In a dissent from a dismissal order in Chapman v. Doe, Justice Jackson questioned whether the Supreme Court had become too quick to vacate judgments, noting, inter alia, that “our common-law system assumes that judicial decisions are valuable and should not be cast aside lightly, especially because judicial precedents ‘are not merely the property of private litigants,’ but also belong to the public and ‘legal community as a whole.'” (reviewing United States v. Munsingwear, Inc., 340 U.S. 36 (1950)).

As she was the sole dissenter on this point, her views are apparently not shared by a majority of that court, but her analysis is still thought-provoking and deserves study, as it examines a part of the appellate process that often goes largely unnoticed. Thanks to Ben Taylor for drawing my attention to this one!

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Aflalo v. Harris arose from a contract to sell a house. The question was (generally) how to calculate the value of the house at the contractually specified sales time, and (specifically) when a later resale of a home can be probative of that value. The Fifth Court reviewed the specific facts of this resale to determine that it was probative, discussing and distinguishing Barry v. Jackson,  309 S.W.3d 135 (Tex. App.–Austin 2010, no pet.) (LPHS represented the successful appellant in this case.)

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Ryan, an accounting firm, made a claim on its professional liability policy for losses caused by a rogue director’s submission of fraudulent tax returns. The insurer acknowledged an obligation to pay for losses resulting from employee “theft,” but instead:

“… maintain[ed] that that Weaver did not unlawfully take money from Ryan but that, instead, he started a chain reaction that caused money to improperly flow from the taxing authorities to Ryan’s clients, to Ryan, and then to Weaver and other employees.”

The Fifth Court found coverage for $346,612 paid to the director in bonuses, as an “unlawful taking” of those funds by him, and remanded for further consideration of related issues. Ryan, LLC v. Nat’l Union Fire Ins. Co., No. 05-22-00286-CV (March 13, 2023) (mem. op.).

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The Legislature is in session; thus, legislators are seeking continuances of trial settings pursuant to Tex. Civ. Prac. & Rem. Code § 30.003. While the trial court in In re Jones did not expressly deny a state senator’s request for a legislative continuance, it implicitly denied it by, inter alia, setting a status conference and making a docket entry that said “Proposed Order Denied,” That was sufficient to justify mandamus relief, since a proper motion had been made under section 30.003 and relator would not have an adequate remedy by appeal. No. 05-23-00070-CV (March 10, 2023) (mem. op.).

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US Bank “prayed for a declaration that [appellant’s] equitable title was subject to US Bank’s lien.”

But US Bank pleaded a suit to quiet title as its cause of action. “In such a suit, the plainitff has the burden to show (1) an interest in a specific property, (2) title to the property is affected by a claim by the defendant, and (3) the clai, although facially valid, is invalid or unenforceable.”

Because that claim didn’t match the requested relief, the Fifth Court reversed summary judgment for the bank. TFHSP, LLC v. U.S. Bank N.A., No. 05-22-00002-CV (March 8, 2022) (mem. op.).

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The interplay between appellate lawyers and courts (“we need the transcript now!”) and trial-court reporters (“I have twenty other transcripts due this month!”) is part of daily life in appellate practice. The situation in In the Interest of B.Q.L. goes to a whole other level, however, and presents a textbook application of Tex. R. App. 34.6. The Fifth Court reversed and remanded for a new trial, due to the lack of a reporter’s record, when the following facts were established in trial-court proceedings:

(1) Atkins [court reporter] testified she was not present at the trial held on June 8, 2021; (2) her testimony was untruthful; (3) Atkins was the reporter for the trial; (4) Atkins stated she has no notes from the trial; (5) Mother is not at fault for the reporter’s record not being transcribed; (6) the attorneys state the record is necessary to the appeal’s resolution; and (6) the record cannot be replaced by agreement of the parties. 

No. 05-21-01108-CV (March 6, 2023) (mem. op.).

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Litigation between two parties about the ownership of a valuable Ferrari ended with a final judgment that awarded clean title to the car–except, lienholder Truist Bank was not joined as a party. Truist filed a bill of review; as the Fifth Court explained: “Ordinarily, a bill of review involves an independent action by a party to the former case. A nonparty, however, has standing to bring a bill of review if it had a then-existing legal right or interest that was prejudiced by the prior judgment.” The Court went on to reverse and render judgment for Truist on its bill, observing:

“Truist Bank asserted a meritorious defense based upon its unreleased priority lien, its possession of the original title to the Ferrari, and its challenge to Loyola’s right to relief in [another related] lawsuit. On this record, we are not persuaded by Loyola’s 2.403 Business and Commerce Code argument that, as a matter of law, he had a right to clear title, and we decline to so determine. … Truist Bank was prevented from establishing or protecting its priority lien rights by Loyola’s wholesale failure to serve, join, or notify Truist Bank in the … suit.”

Truist Bank v. Loyola, No. 05-21-00206-CV

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The issue in Harry Hines Millennium Market Place LLC v. Pawn TX, Inc. was whether a commercial tenant vacated the leased premises on May 31, 2018.

The tenant’s principal testified that it did so, and also offered testimony about how it “gutted the showroom …, moved inventory and all pawns …, pulled down fixtures and back racks,” and made its last pawn-shop transaction on the premises on May 30.

The Fifth Court found the landlord’s contrary testimony to be conclusory (that the tenant “failed to vacate the premises and remained in possession of the Property for an additional two (2) months”). The Court also rejected the landlord’s argument that termination was ineffective absent formal notice, as the lease did not impose such a requirement and the common law does not otherwise impose one. (The Court also declined to consider several photographs submitted along with the landlord’s brief because they were not in the record.) No. 05-21-00778-CV (Feb. 28, 2023) (mem. op.).

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The Baroque rules surrounding special-exception practice led to reversal in J.G. v. Jones, a claim by “J.G.” against the owner of the Dallas Cowboys alleging unwanted physical contact. In particular, the Fifth Court held:

• Preservation. Where, as here, the plaintiff amended in response to a special-exceptions order, the plaintiff preserved error by, inter alia, opposing the defendants’ motion to dismiss. The Court distinguished a 1993 opinion in which the plaintiff did not amend in response to a similar order.
• Merits. The Court noted that of six deficiencies identified in the special exceptions, only two were challenged in the motion to dismiss. As to the location of the alleged conduct, the court found that her revised description “was at least a good faith attempt” that could not support dismissal; as to the use of initials, the court noted that “[a]ppellees do not dispute that they were informed of appellant’s identify before the trial court ruled on their motion to dismiss.”

No. 05-22-00215-CV (Feb. 27, 2023) (mem. op.).

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In the case of In re Commitment of Robinson, a civil-commitment case about a sexually violent individual, the trial court granted a directed verdict that the defendant was a “repeat sexually violent offender” and included an instruction to that effect in the jury charge. In a holding that likely has little effect outside this specific procedural setting, the Fifth Court found no plain error from that particular instruction in this specific case. No. 05-21-00795-CV (Feb. 23, 2023).

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On a second appeal after an earlier remand from the Texas Supreme Court, the once-successful plaintiff in Credit Suisse AG v. Claymore Holdings LLC sought judgment for “an additional $25,235,910.61 for secondary market purchases in addition to the $40 million in damages for fraudulent inducement.” The Fifth Court noted:

• “[t]he jury was not asked to determine liability as to the secondary market purchases; therefore, the record contains no liability or causation finding” to support such damages;
• “Claymore did not object to the absence” of a question on those matters, and did not try to submit one either;
• in the trial court’s findings of fact and conclusions of law, on matters tried to the bench, “[t]here is not a separate section for fraudulent inducement of secondary market purchases”;
• The trial court’s conclusion of law that awarded such damages did not make “an implicit finding and conclusion” about liability and causation;
• The supreme court did not address this topic in its prior opinion, and because “[t]he jury made no liability finding on the secondary market purchases … there was nothing for Credit Suisse to appeal at that stage in the proceedings.”

No. 05-21-00649-CV (Feb. 14, 2023) (mem. op.).

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Desperate to hear the fabled song of the Sirens, but knowing full well that they steered sailors toward the rocks, Odysseus told his crew:

“[T]ake me and bind me to the crosspiece half way up the mast; bind me as I stand upright, with a bond so fast that I cannot possibly break away, and lash the rope’s ends to the mast itself. If I beg and pray you to set me free, then bind me more tightly still.”

He survived. Not so, the appellants in Bienati v. Cloister Holdings, LLC, who disclosed during argument that:

“… because the probable right to recovery issue could impact the merits of the entire case, the trial court ‘abated it until this Court weighed in on the merits of the temporary injunction and whether there’s a probable right to recovery.”

The court of appeals held: “We have repeatedly disapproved the practice of postponing the trial on the merits of a case to obtain a ruling on the appeal of a temporary injunction. This practice not only delays the ultimate resolution of the merits of the parties’ dispute but wastes judicial resources.” It thus dismissed the appeal. No. 05-22-00324-CV (Feb. 10, 2023) (mem. op.).

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The classic question of “who” was central to Western Healthcare LLC v. Herda, which involved the role of a “contractual delay” provision as a defense to a suit alleging a failure to pay certain workers: “[Plaintiffs] contended that because the work stoppage at issue affected Ellwood, rather than WHC, it should not defeat their claims. But the contractual provision does not specify that a particular employer must undergo a work stoppage to trigger its application; Ellwood’s closure certainly stopped the Providers’ ability to work at its hospital, which was the work bargained for in their contracts.” No. 05-21-00603-CV (Feb. 10. 2023) (mem. op.) (emphasis added).

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On Wednesday at noon, I am doing a virtual CLE for the Dallas Bar that reviews the key cases, since last spring, from the U.S. Court of Appeals for the Fifth Circuit and the Fifth Court of Appeals in Dallas. You can register here and you can download (subject to last-minute revisions) my PowerPoint here. I hope you can join me!

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Kirk v. Atkins enforced a straightforward arbitration agreement (my apologies for the tilt, which appears in the original record) with broad, “any dispute” language:despite similarly broad “all remedies” language in another section about remedies: Held: “[I]t is possible to harmonize and give effect to both provisions of the agreement. The ADR paragraph, in which the arbitration clause is found, controls the process of resolving disputes between the parties, while the remedies paragraph describes the substantive relief that may flow from decisions on those controversies.” No. 05-21-00639-CV (Feb. 1, 2023) (mem. op.).

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In a Tarot deck, the “Magician” (right) has the power to transform. In the Fifth Court, however, the phrase “reasonable and necessary” is not a “magic word.”

In a construction-contract dispute, even though “no witness explicitly testified that the expenses incurred were reasonable and necessary,” the Court reversed a JNOV and reinstated judgment on the jury’s verdict when the evidence allowed the jury to infer that the costs incurred were reasonable and necessary. That evidence included:

• detailed invoices;
• presented by a witness with extensive relevant experience;
• with a contract-based incentive to not incur excessive expense;
• general consistency with an estimate presented by the other side.

Bosque v. Barbosa, No.05-22-00230-CV (Jan. 30, 2023) (mem. op.). (Congrats to my LPHS colleague Greg Brassfield who tried the underlying case and successfully argued this appeal!)

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These events produced a triable fact issue about whether the parties renewed a lease:

• On March 1, Property Manager emails Tenant about lease renewal, noting that “rent will be increasing to $2,275/month” from the current $2,200 monthly amount.
• That same day, Tenant responds that “yes, I would like to renew the lease. I will follow up this weekend with more information.”
• On March 12, Tenant sent a lengthy email about problems with her air conditioning, claimed roughly $4000 dollars in damages as a result, and ended: “I still intend to renew the lease and this settlement offer does not constitute a counter offer or rejection to your lease renewal offer on March 1 ….”
• On March 13, Property Owners’ counsel sent a notice of termination.

The Fifth Court noted: “Under the common law, an acceptance may not change or qualify the material terms of the offer, and an attempt to do so results in a counteroffer rather than an acceptance.” Bismar v. Mitchell, No. 05-21-00104-CV (Jan. 27, 2023) (mem. op.).

The post Contract? appeared first on 600 Commerce.

Justice Emily Miskel recently published a good article in Headnotes about recent appellate opinions involving issues with virtual trial proceedings. You can read the article on page 16 of the online publication or in this screenshot.

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One World Bank v. Miller presents a dispute between Miller, the buyer from a used-car dealership of a 2014 Ferrari 458 Italia (example of one, to the right), and the lender for the dealership, which sued the dealership for alleged misconduct in the sale of 27 exotic cars. As to Miller, the suit was unsuccessful, as he established himself to be a bona fide purchaser for value under UCC Article 9, and thus not subject to the lender’s security interest in the dealer’s inventory. The lender argued on appeal that the Certificate of Title Act applied because of irregularities in the transfer of title to Miller, but the Fifth Court rejected that argument, agreeing with other courts’ precedent that the Legislature had expressed a preference for the UCC controlling over the Title Act in the event of tension between them. No. 05-21-00705-CV (Jan. 20, 2023) (mem. op.)

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Maersk v. Mgbeowula presented what Maersk (the shipping company) apparently considered to be a collection matter arising from a freight delivery to Nigeria, and what the defendant contended was a problem created by an agent acting without authority. When Maersk’s Texas-law contract claims encountered rough seas at trial, it sought leave to amend with a claim based on maritime law. The trial court denied that request and the court of appeals affirmed, declining to raise that ship by concluding (among other matters) that there had been no trial by consent of such a claim:

“[T]he evidence admitted at trial was submitted by Maersk in support of its claims for breach of contract and sworn account under Texas law. Because the evidence was relevant to the pleaded claims, we cannot conclude that a claim under maritime law was tried by consent. … This is particularly so in light of Mgbowula’s objection at the start of trial to the use of any exhibit to invoke maritime law. While the evidence offered by Maersk might be relevant to a cause of action under maritime law, this does not change the fact that the requested amendment asserted a new substantive matter that would have reshaped Maersk’s case.”

No. 05-21-00820-CV (Jan. 20, 2023).

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