In Resurgence Financial, L.L.C. v. Foster, the Dallas Court of Appeals followed and applied the Texas Supreme Court‘s opinion in Thordson v. City of Houston.  From the moment that Resurgence filed its suit the trial court notified Resurgence that the case would be placed on the dismissal docket unless an answer were filed by a date specified.  On October 23, 2007, Resurgence filed a motion for substituted service, supported by affidavit.  The trial court returned the motion with an unsigned letter stating that Resurgence had failed to establish sufficient attempts to serve the defendant.  On the same day the trial court returned the motion, it dismissed the suit for want of prosecution.  Resurgence filed a motion to reinstate and asked for a hearing in its motion.  The record showed no indication that the trial court heard the motion, but there was a docket entry indicating that the judge was aware of the filing.  The motion to reinstate was overruled as a matter of law.

On appeal, Resurgence raised a single issue to complain about the lack of a hearing on its motion to reinstate.  The court of appeals holds that "the trial court’s failure to comply with rule 165a(3) is erroneous and requires reversal."  The court’s opinion may be found here.

The Houston First Court of Appeals has held that a voidable attorney-client retainer agreement may not be used as a basis upon which to establish personal jurisdiction in a suit by the attorney against the client on the agreement.   In Cobb v. Sterm, Miller and Higdon, Cobb, a Louisiana resident, was injured in Louisiana while working on an anchor boat in Lousiana for his Lousiana employer.  The law firm went to Louisiana to solicit Cobb as a client.  Two months later, one of the law firm’s representatives drove Cobb to Houston where he signed an engagement agreement providing for the application of Texas law.   A few weeks later, Cobb terminated the law firm and three days after that, he settled his claims with his employer and went back to work.

The law firm brought suit in Texas against Cobb to recover its expenses and Cobb filed a special appearance.  The trial court [11th Judicial District] initially sustained Cobb’s special appearance, but on rehearing, the court [151st Judicial District] granted the law firm’s new trial.  Cobb filed an interlocutory appeal.

Continue Reading Voidable Agreement Negates Specific Contacts Jurisdiction

In a case of first impression the Texas Supreme Court  recently held that the issue of whether a party has the mental capacity to contract is an issue for courts, not arbitrators.  The Court traced the history of the so-called "separability" spawned by the United States Supreme Court’s decision in Prima Paint Corp. v. Conklin Manufacturing Co., 388 U.S. 395, 404 (1967), that held that challenges to an entire contract should be decided by arbitrators and challenges to an arbitration agreement itself should be decided by courts.

The separability doctrine proved problematic in a third category of cases; those in which a party challenged the very existence of a contract in the first place, so-called "contract formation" issues.  Relying on dicta in Buckeye Check Cashing, Inc. v Cardegna, 546 U.S. 440, 444 n.1 (2006), and numerous other state and federal decisions, the Texas Supreme Court held that contract formation issues, specifically mental capacity, are for courts, not arbitrators.  Accordingly, the Court denied Morgan Stanley’s attempt to compel arbitration by mandamus.  Justice Hecht dissented and would have treated lack of capacity as "closer to fraudulent inducement than to lack of signature."  The Court’s opinion in In re Morgan Stanley & Co., Inc. can be found at this link.

The United States Supreme Court’s recent opinion in Caperton v. A.T. Massey Coal Co., raises some unique questions for our own system of electing judges in Texas.  Justice Kennedy, writing for the majority, holds that the campaign contributions of the chairman of the board and president of Massey Coal toward the campaign of a West Virginia Supreme Court candidate raised “the probability of actual bias ris[ing] to an unconstitutional level.” The majority gives little bright-line guidance for future cases, but in apparent recognition of the precedential implications of its holding, the majority is careful to emphasize the extreme nature of the facts of the case, including that the Massey chairman donated the maximum personal contribution to the candidate and $2.5 million to a political PAC, and those donations accounted for more than two-thirds of the total funds raised. The contributions were more than the total amount spent by all other supporters for the candidate.
The dissent, written by Chief Justice Roberts, expresses concern at extending due process to application of judicial disqualification. Instead, the dissent suggests that disqualification is a matter more properly left to the states to regulate by statute or rule. By extending due process to matters of disqualification, the dissent warns that the majority may actually undermine concerns for the need to maintain a fair, independent and impartial judiciary.  The Court’s opinions may be found at this link.

Continue Reading Campaign finance and judicial disqualification

A few weeks ago I wrote about an opinion issued by the Fort Worth Court of Appeals, wherein that court held that Civil Practice and Remedies Code Section 33.004(e) applied to a statute of repose to revive the claims against a responsible third party.  Click here for that discussion.  I questioned whether Section 33.004(e)’s reference to statutes of limitation should be construed to include statutes of repose.  Last Friday, the Texas Supreme Court confirmed that Section 33.004(e) does not  apply to statutes of repose.

In Galbraith Engineering Consultants, Inc. v. Pochucha, Sam and Jean Pochucha bought a house in April 2003, that had been built 8 years earlier by builder Bill Cox.   After the house showed water damage following moderate to heavy rainfall, the Pochuchas sued Cox.  Cox in turn filed a motion for leave to designate Galbraith Engineering Consultants as a responsible third party.  The Ponchuchas joined Galbraith as a defendant within sixty days pursuant to Chapter 33.  Galbraith moved for summary judgment and asserted the applicable statute of repose because the Ponchuchas joined it as a defendant more than ten years after completion of the house.  The trial court granted the motion for summary judgment, but the San Antonio Court of Appeals reversed holding that Section 33.004(e) applies to both statutes of limitation and repose.

The Texas Supreme Court reversed the and affirmed the summary judgment.  Construing Section 33.004(e), the court held that the term "limitations" should be construed narrowly to include only statutes of limitation rather than both statutes of limitation and statutes of repose.  The supreme court’s opinion may be found at this link.

I am sad to learn (and report) that the appellate world has lost an icon today.  Rusty McMains passed away this morning in Corpus Christi.

As a briefing clerk at the Texas Supreme Court,  I learned that there were certain oral advocates who were in the "must see" category when they came to town to argue before the court.  Rusty was definitely in the "must see" category.  He had a deep, commanding voice and authoritative demeanor.  He was a great speaker and a long-time contributor to our educational betterment.    I remember well attending my first Advanced Appellate seminar almost 20 years ago where Rusty spoke about the court’s charge. 

We are all better off because of Rusty and people like him.   I have little doubt that his golden voice will gain him access through the pearly gates.   He will be missed by many.

"To the victor belong the spoils" or so said New York Senator William L. Marcy in 1828.  Maybe that’s why we award court costs to the winners.  But what happens when both sides win?  Or lose? Can a court award court costs to one side in those instances?

That was the issue the Dallas Court of Appeals case Sullivan v. White. 

Robert Sullivan sued his client, Pam E. White, for unpaid attorney’s fees.  She counterclaimed for negligence and DTPA violations.  They went to trial and the jury returned a verdict awarding no damages to either party.  The trial court, however, signed a final judgment awarding White $3,068.58 in costs.  Sullivan appealed arguing White should not get costs because she was not the successful party at trial.

Did the trial court abuse its discretion by awarding costs to White?

Rule 131 allows a successful party in a suit to recover court costs.  But Rule 141 allows a court to award costs for other reasons if there is good cause that is stated on the record.  The Dallas Court of Appeals reversed the lower court’s ruling on court costs, but not because the judge did not have discretion to award court costs to one side in a suit that ended in a tie.  Instead, the Court noted the judge failed to specify good cause in the record.  Failing to so do precluded an award of court costs where both sides prevailed.  Consequently, the Court reversed the award and rendered judgment that each side bear its own costs.

Here is the opinion.

The Houston (First) Court of Appeals recently issued an interesting opinion regarding perfection of an appeal from a small claims court to a county court at law.  The appellant failed to timely file an appeal bond within ten days of the judgment pursuant to to TRCP 571.  Instead, the appellant "deposited $5,000 in cash . . . in lieu of a justice court appeal bond."  The small claims judgment was not in the record, but the judgment was entered on April 12, 2007 at the latest because the appellant attempted to appeal the judgment on that date.  The deposit, however, was not made until May 4, some 22 days later.  Thus, appellant’s attempt to perfect the appeal was late regardless of whether the appellant filed a bond or made a deposit.

The court of appeals continued and also stated:

Even if [appellant] had timely filed its cash bond in the justice court, instead of untimely filing it in the county court, when a deposit of cash has not been authorized by statute, such a deposit does not constitute sufficient compliance with the statute that requires a bond to be given.

The court cited two cases, one from 1929 and one from 1952, in support of the proposition that Rule 571 does not authorize the fiing of a cash bond in lieu of a surety bond.  In fact, one case was quoted as holding "we have found no Rule so providing."

That’s because the rule didn’t exist yet.  Rule 14c was adopted in 1981 and expressly allows any surety bond required by the rules to be satisfied by a cash deposit.  Appellant’s appeal in this case could not benefit from the rule because it seems that the attempted deposit was late.  But to the extent the court’s holding regarding the deposit was an alternative holding, as opposed to mere dicta, it is contrary to TRCP 14c.  The court’s opinion in Gundogan v. Woodgrove Condo. Ass’n can be found at this link. 

 

The Dallas Court of Appeals held that plaintiffs were not entitled to take the depositions of George W. and Laura Bush in relation to the ongoing dispute over the location of the proposed Bush Presidental Library.  The Court stated:

For reasons of comity and the policy considerations discussed in [United States v.]Poindexter, we conclude the decision to allow the deposition of a sitting or former President is not controlled by the standards applicable to apex depositions.   . . . Our review of the record indicates that real parties in interest Vodicka and Tafel did not meet either prong of the Poindexter standard.

The bottom line was that the real parties in interest did not establish Bush’s testimony was material or necessary and specifically failed to produce a list of proposed questions for trial court review under a "meticulous standard." Accordingly, the Court granted George W. Bush’s petition for writ of mandamus and ordered the trial court to enter an order quashing the depositions of the former President and First Lady.   The Court’s opinion in In re President George W. Bush can be found at this link.