Saturday, November 14, 2009
In order to succeed on a breach of contract claim, [Plaintiff] would have had to prove that: (1) a valid contract existed; (2) it performed or tendered performance; (3) [Defendant] breached the contract; and (4) [Plaintiff] sustained damages as a result of the defendant's breach. Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 771 (Tex. App.-Corpus Christi 2001, no pet.).
Netrana contends that it performed its obligations under the contract by "standing ready, willing, and able to perform professional services" and that TXU breached the guaranteed minimum payment provision of the contract. Thus, we look to the contract under our well recognized rules of contract construction to determine if a minimum payment provision existed in the amended agreement.
CONTRACT CONSTRUCTION RULES
In construing a written contract, the primary concern is to ascertain and to give effect to the parties' intentions as expressed in the document. Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 311-12 (Tex. 2005). We consider the entire writing and attempt to harmonize and to give effect to all of the contract's provisions. Id. at 312.
We construe contracts "'from a utilitarian standpoint bearing in mind the particular business activity sought to be served'" and "'will avoid when possible and proper a construction which is unreasonable, inequitable, and oppressive.'" Id. (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)). "
The language in a contract is to be given its plain grammatical meaning unless doing so would defeat the parties' intent." Amtech Elevator Servs. Co. v. CSFB 1998-P1 Buffalo Speedway Office Ltd. P'ship, 248 S.W.3d 373, 379 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
UNAMBIGUOUS CONTRACT CONSTRUED AS A MATTER OF LAW
If, after the pertinent rules of construction are applied, the contract can be given a definite or certain legal meaning, it is unambiguous, and we construe it as a matter of law. Frost Nat'l Bank, 165 S.W.3d at 312. However, if after such rules are applied, the meaning of the contract remains uncertain or is susceptible to more than one reasonable interpretation, it is ambiguous. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995); Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex. 1983).
AMBIGUOUS CONTRACT CALLS FOR CONSIDERATION OF OTHER EVIDENCE TO ESTABLISH THE PARTIES' INTENT
If a contract is ambiguous, the contract's interpretation becomes a fact issue to be resolved by deciding the parties' true intent, for which the fact finder may consider extraneous evidence of intent. See Nat'l Union Fire Ins. Co., 907 S.W.2d at 520; Coker, 650 S.W.2d at 394-95.
Whether a contract is ambiguous is a question of law to be determined "by looking at the contract as a whole in light of the circumstances present when the contract was entered." Coker, 650 S.W.2d at 394.SOURCE: 13-08-00264-CV (13th Court of Appeals) (Nov. 12, 2009)
Tuesday, November 10, 2009
Section 27.01 of the business and commerce code provides:
(a) Fraud in a transaction involving real estate . . . consists of a
(1) false representation of a past or existing material fact, when the false representation is
(A) made to a person for the purpose of inducing that person to enter into a contract; and
(B) relied on by that person in entering into that contract . . . .
Tex. Bus. & Com. Code Ann. § 27.01 (West 2009).
Monday, November 9, 2009
Theft as defined in Section 31.03 constitutes a single offense superseding the separate offenses previously known as theft, theft by false pretext, conversion by a bailee, theft from the person, shoplifting, acquisition of property by threat, swindling, swindling by worthless check, embezzlement, extortion, receiving or concealing embezzled property, and receiving or concealing stolen property.Tex. Penal Code Ann. § 31.02 (West 2003). CONVERSION - COMMON-LAW CAUSE OF ACTION Conversion is [...] a cause of action similar to theft or one means by which a person "unlawfully appropriates property with intent to deprive the owner of property." See id. § 31.03. Even though Karbach did not expressly allege a violation of the theft liability act in his original petition, he did allege conversion, and the district court granted summary judgment on that claim. As Karbach's amended petitions merely asserted the same claim in a different form, the district court's judgment was effective against Karbach's later-pleaded theft liability act claim. See Wortham, 179 S.W.3d at 202; Lampasas, 988 S.W.2d at 435-37. SOURCE: 03-06-00636-CV (3rd CoA - Austin) (Nov. 6, 2009)
STATUTORY CAUSE OF ACTION UNDER THE TEXAS CONSTRUCTION TRUST FUND ACT
The Texas Construction Trust Fund Act makes construction funds "trust funds" if the payments are made to a contractor or subcontractor or to an officer, director, or agent of a contractor or subcontractor, under a construction contract for the improvement of specific real property in this state. Tex. Prop. Code Ann. § 162.001 (West Supp. 2009). Beneficiaries of the trust fund include artisans, laborers, mechanics, contractors, subcontractors, or materialmen who furnish labor or material for the construction or repair of an improvement. Id. § 162.003 (West Supp. 2009).
CIVIL LIABILITY FOR VIOLATION OF CONSTRUCTION TRUST FUND ACT
A party who misapplies trust funds under the Trust Fund Act is subject to civil liability to trust fund beneficiaries whom the Act was designed to protect. Id. § 162.031 (West Supp. 2009); Dealers Elec. Supply Co. v. Scoggins Constr. Co., 52 Tex. Sup. Ct. J. 1088, 2009 Tex. LEXIS 475, at *16-17 (Tex. July 3, 2009).
SOURCE: 03-06-00636-CV (Austin Court of Appeals (11/6/09)
ELEMENTS OF SUIT ON ACCOUNT IN TEXAS
The elements of a cause of action on a sworn account are (1) a sale and delivery of the goods; (2) that the amount of the account is just, that is, that the prices are charged in accordance with an agreement or, in the absence of an agreement, they are the usual customary and reasonable prices for those goods; and (3) that the amount is unpaid. See Site Work Group, Inc. v. Chem. Lime Ltd., 171 S.W.3d 512, 513–14 (Tex. App.-Waco 2005, no pet.); PennWell Corp. v. Ken Assocs. Inc., 123 S.W.3d 756, 766 (Tex.App.-Houston [14th Dist.] 2003, pet. denied
ELEMENTS IN SUIT ON ACCOUNT CAN BE PROVEN IN SUMMARY JUDGMENT WHEN DEFENDANT FILES A SWORN DENIAL AND THUS CONTROVERTS PLAINTIFF'S PRIMA-FACIE CASE
“A defendant’s verified denial of the correctness of a plaintiff’s sworn account, in the form required by Rule 185, destroys the evidentiary effect of the itemized account and forces the plaintiff to put on proof of its claim.” Site Work Group, Inc. v. Chem. Lime Ltd., 171 S.W.3d 512, 513 (Tex. App.—Waco 2005, no pet.) (citing Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979)). However, even when a defendant verifies its sworn denial to a suit on a sworn account, a plaintiff may properly obtain a summary judgment on its sworn account claim by filing “legal and competent summary judgment evidence establishing the validity of its claim as a matter of law.” PennWell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756, 765 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (citing United Bus. Machs. v. Entm’t Mktg., Inc., 792 S.W.2d 262, 264 (Tex. App.—Houston [1st Dist.] 1990, no writ)).
SOURCE: 01-08-00890-CV (Houston Court of Appeals - 1st District) (11/5/09)
|Rule 185 of the Texas Rules of Civil Procedure|
Sunday, November 8, 2009
Friday, November 6, 2009
"The unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner's rights, is in law a conversion." Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971).
HOW TO PROVE CONVERSION OF PERSONAL PROPERTY
To establish a claim for conversion of personal property, a plaintiff must prove that: (1) the plaintiff owned or had legal possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. See Smith v. Maximum Racing, Inc., 136 S.W.3d 337, 341 (Tex. App.--Austin 2004, no pet.).SOURCE: 03-09-00114-CV (Austin Court of Appeals) (11/6/09)
THE ELEMENTS OF A CONTRACT UNDER TEXAS LAW
The elements of a valid contract are (1) an offer, (2) an acceptance, (3) a meeting of the minds, (4) each party’s consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied).
The elements of written and oral contracts are the same and must be present for a contract to be binding. Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.—Houston [14th Dist.] 2002, no pet.). For an agreement to be enforceable, there must be a meeting of the minds with respect to its subject matter and essential terms. Id. at 556.
The determination of a meeting of the minds, and thus offer and acceptance, is based on the objective standard of what the parties said and did. Id. The execution of a contract includes the performance of all acts necessary to render it complete as an instrument. Verson Allsteel Press Co. v. Carrier Corp., 718 S.W.2d 300, 303 (Tex. App.—Tyler 1985, writ ref’d n.r.e.) (per curiam). The question of whether a contract contains all the essential terms for it to be enforceable is a question of law. Beal Banks, S.S.B. v. Schleider, 124 S.W.3d 640, 654 n.8 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). What terms are material or essential to a contract are determined on a contract-by-contract basis, depending on the subject matter of the contract at issue. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (“Each contract should be considered separately to determine its material terms.”).
SOURCE: 01-09-00030-CV (First Court of Appeals) (11/5/09)
Wednesday, November 4, 2009
A cause of action for negligence arises when an actor breaches a legal duty and the breach proximately causes damages. Columbia Med. Ctr. of Las Colinas, Inc. v. Hogue, 271 S.W.3d 238, 246 (Tex. 2008). Texas law generally imposes no duty to control the acts of another person to prevent harm to third parties absent certain special relationships or circumstances. Providence Health Ctr. v. Dowell, 262 S.W.3d 324, 331 (Tex. 2008); Torrington Co. v. Stutzman, 46 S.W.3d 829, 837 (Tex. 2000); see also Restatement (Second) of Torts § 315 (1965).
Examples of relationships that have been recognized as giving rise to a duty to control include employer/employee, parent/child, and independent contractor/contractee. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). A party who agrees to attempt to help someone else has a duty to provide that help without negligently harming the person in need. Torrington, 46 S.W.3d at 837-38; see also Restatement (Second) of Torts § 323. (2)
A party who negligently creates a dangerous situation has a duty to attempt to prevent injury to others if it reasonably appears or should appear to him that others in the exercise of their lawful rights may be injured thereby. SmithKline Beecham Corp. v. Doe, 903 S.W.2d 347, 353 (Tex. 1995) (citing Buchanan v. Rose, 159 S.W.2d 109, 110 (Tex. 1942)). However, a mere bystander who did not create a dangerous situation generally is not required to intervene and prevent injury to others. See id.; see also Restatement (Second) of Torts § 314 ("The fact that [an] actor realizes or should realize that action on his part is necessary for another's aid or protection does not of itself impose upon him a duty to take such action.").
Whether a legal duty exists is a question of law for the court. Trammell Crow Cent. Tex., Ltd. v. Gutierrez, 267 S.W.3d 9, 12 (Tex. 2008). In determining whether the defendant was under a duty, the court will consider several interrelated factors, including the risk, foreseeability, and likelihood of injury weighed against the social utility of the actor's conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant. Phillips, 801 S.W.2d at 525.
Courts have also considered whether one party has superior knowledge of the risk, and whether a right to control the actor whose conduct precipitated the harm exists. Graff v. Beard, 858 S.W.2d 918, 920 (Tex. 1993). Appellants do not cite any authority establishing a legal duty by individuals to control the actions of a companion who is under the influence of drugs or similar behavior-altering substances. (3) Therefore, to hold that there is a duty in this case, we must interpret an existing duty to include the behavior described in the plaintiffs' pleadings or recognize a new duty under Texas law.SOURCE: 03-07-00251-CV (Austin Court of Appeals)(11/4/09)
Monday, November 2, 2009
UNDER WHAT CIRCUMSTANCES IS DECLARATORY RELIEF WARRANTED?
A declaratory judgment is appropriate only where there is a justiciable controversy about the rights and status of the parties and the declaration will resolve the controversy. Bonham State Bank, 907 S.W.2d at 467.
To constitute a justiciable controversy, there must exist a real and substantial controversy involving genuine conflict of tangible interests and not merely a theoretical dispute. Id. The Act does not empower courts to issue advisory opinions. Brooks v. Northglen Association, 141 S.W.3d 158, 164 (Tex. 2004).
In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just.
Tex.Civ.Prac.&Rem.Code Ann. § 37.009.
In a declaratory judgment action, the decision to grant or deny attorney's fees is solely within the discretion of the trial court. Neeley v. West Orange-Cove Consolidated Independent School District, 176 S.W.3d 746, 799 (Tex. 2005).
Under Section 37.009, a trial court may exercise its discretion to award attorney's fees to either the prevailing or the nonprevailing party. See Barshop v. Medina County Underground Water Conservation District, 925 S.W.2d 618, 637-38 (Tex. 1996). The requirements that fees be reasonable and necessary are matters of fact, while the requirements that fees be equitable and just are matters of law. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).
UNCLEAN HANDS MAY PRECLUDE EQUITABLE RELIEF
One who seeks equity must do equity and must come to court with clean hands. See Dunnagan v. Watson, 204 S.W.3d 30, 41 (Tex. App.—Fort Worth 2006, pet. denied); Flores v. Flores, 116 S.W.3d 870, 876 (Tex. App.—Corpus Christi 2003, no pet.). Whether equitable relief should be denied based on unclean hands is left to the discretion of the trial court. Dunnagan, 204 S.W.3d at 41; Flores, 116 S.W.3d at 876.
Mustang argues that Sinclair has unclean hands because he purportedly owned the Carter liens through prior dealings with Carter and that he also solicited perjured testimony regarding whether he was ready, willing, and able to perform under the contract.
WHEN IS INVOCATION AND APPLICATION OF THE UNCLEAN HANDS DOCTRINE PROPER?
The clean hands doctrine should not be applied unless the party asserting the doctrine has been seriously harmed and the wrong complained of cannot be corrected without the application of the doctrine. Dunnagan, 204 S.W.3d at 41.
Even if we agreed that Sinclair had unclean hands, Mustang has made no claim or argument to this Court regarding any serious harm due to the misconduct, if any, of Sinclair. Therefore, Mustang’s claim of unclean hands must fail.
SOURCE: 10-07-00362-CV (Waco Court of Appeals) (10/28/09)
Tortious Interference with Business Relations (in the future - as opposed to interfering with existing contract) The elements of tortious interference with prospective business relations are: (1) a reasonable probability that the plaintiff would have entered into a contractual relationship; (2) an independently tortious or unlawful act by the defendant that prevented the relationship from occurring; (3) the defendant did the act with a conscious desire to prevent the relationship from occurring or with knowledge that the interference was certain or substantially certain to occur as a result of his conduct; and (4) the plaintiff suffered actual harm or damage as a result of the interference. See Ash v. Hack Branch Distrib. Co., 54 S.W.3d 401, 414-15 (Tex. App.—Waco 2001, pet. denied). See also Finlan v. Dallas Indep. Sch. Dist., 90 S.W.3d 395, 412 (Tex. App.—Eastland 2002, pet. denied).
LOST PROFIT DAMAGES - HOW TO PROVE THEM
"Lost profits are damages for the loss of net income to a business measured by reasonable certainty." Miga v. Jensen, 96 S.W.3d 207, 213 (Tex. 2002). See also Bossier Chrysler Dodge II, Inc. v. Rauschenberg, 201 S.W.3d 787, 808 (Tex. App.—Waco 2006) rev'd in part, 238 S.W.3d 376 (Tex. 2007) (per curiam). "Net profits" is defined as "what remains in the conduct of a business after deducting from its total receipts all of the expenses incurred in carrying on the business." Turner v. PV Int'l Corp., 765 S.W.2d 455, 465 (Tex. App.—Dallas 1988, writ denied) (citing R. A. Corbett Transp., Inc. v. Oden, 678 S.W.2d 172, 176 (Tex. App.—Tyler 1984, no writ).
WHAT DEGREE OF PRECISION IS REQUIRED TO ESTABLISH LOSS OF PROFITS?
"Exact calculations" are not required to recover for lost profits. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 504 (Tex. 2001). "At a minimum [however], opinions or lost-profit estimates must be based on objective facts, figures, or data from which the lost-profits amount may be ascertained." Id.
SOURCE: 10-07-00362-CV (Tenth Court of Appeals in Waco, TX) (Oct 28, 2009)
WHEN IS A PLAINTIFF ENTITLED TO SPECIFIC PERFORMANCE AS A REMEDY?
The equitable remedy of specific performance may be awarded upon a showing of a breach of contract. Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex. App.—Dallas 2007, pet. denied).
ELEMENTS REQUIRED FOR AWARD OF SPECIFIC PERFORMANCE
However, a party seeking specific performance must plead and prove (1) compliance with the contract including tender of performance unless excused by the opposing party's breach or repudiation and (2) the readiness, willingness, and ability to perform at relevant times. DiGiuseppe v. Lawler, 269 S.W.3d 588, 593-94, 601 (Tex. 2008); see also 17090 Parkway, Ltd. v. McDavid, 80 S.W.3d 252, 258 (Tex. App.—Dallas 2002, pet. denied). It is required that both elements be proved prior to an award of specific performance unless the requirement of tender is excused. DiGiuseppe, 269 S.W.3d at 599.
SPECIFIC PERFORMANCE IN CONTEXT OF SALE OF REAL ESTATE
"Generally speaking, it is a prerequisite to the equitable remedy of specific performance that the buyer of land shall have made an actual tender of the purchase price . . . [unless] actual tender would have been a useless act . . . ." DiGiuseppe, 269 S.W.3d at 594 (citing Wilson v. Klein, 715 S.W.2d 814, 822 (Tex. App.—Austin 1986, writ ref'd n.r.e.). See also McMillan v. Smith, 363 S.W.2d 437, 442-43 (Tex. 1962). The exception to the general rule that actual tender of performance is a prerequisite to obtaining specific performance is grounded in the notion that actual pre-suit tender of performance should be excused when it would be a "useless act, an idle ceremony, or wholly nugatory." DiGiuseppe, 269 S.W.3d at 594; Wilson, 715 S. W.2d at 822. The issue of whether a party to a contract is "ready, willing, and able" to perform presents a question of fact, not a question of law. See DiGiuseppe, 269 S.W.3d at 596. See also Holt v. Elliott Indus., Inc., 711 S.W.2d 435, 437 (Tex. App.—Fort Worth 1986, no writ). Additionally, whether a plaintiff would have performed his contractual obligations when they came due but for the defendant’s breach or repudiation of the contract is also a question of fact. DiGiuseppe, 269 S.W.3d at 600.
SOURCE: 10-07-00362-CV (Waco Court of Appeals) (10/28/09)
When is a broken promise actionable as fraud, rather than merely as a breach of contractual obligation?
Thursday, October 29, 2009
AND (SUBSTANTIAL) TRUTH DEFENSE UNDER TEXAS LAW
To maintain a cause of action for defamation, a plaintiff must establish that the defendant (1) published a statement about the plaintiff; (2) that was defamatory; (3) while acting with either actual malice, if the plaintiff was a public official or public figure, or negligence, if the plaintiff was a private individual, regarding the truth of the statement. WFAA-TV v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998); Henriquez v. Cemex Management, Inc., 177 S.W.3d 241, 251 (Tex. App.--Houston [1st Dist.] 2005, pet. denied); Grotti v. Belo Corp., 188 S.W.3d 768, 774 (Tex. App.--Fort Worth 2006, pet. denied). "
ESTABLISHING TRUTH AND SUBSTANTIAL TRUTH TO DEFEAT DEFAMATION CLAIM
The truth of the statement in the publication on which an action for libel is based is a defense to the action." Tex. Civ. Prac. & Rem. Code Ann. § 73.005 (Vernon 2005).
A defendant may also defeat a libel claim by establishing the substantial truth of the statement. Grotti, 188 S.W.3d at 774 (citing McIlvain v. Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990)).
SUBSTANTIAL TRUTH ANALYSIS LOOK FOR "GIST" OF THE COMPLAINED-OF STATEMENT
To determine if a publication is substantially true, "we consider whether the alleged defamatory statement was more damaging to the plaintiff's reputation, in the mind of the average person, than a truthful statement would have been," and "[w]e look at the 'gist' of the publication "to determine whether it is substantially true." Id. (citations omitted).
The defense of truth does not require proof that the alleged defamatory statement is literally true in every detail; substantial truth is sufficient. Gustafson v. City of Austin, 110 S.W.3d 652, 656 (Tex. App.--Austin 2003, pet. denied); Howell v. Hecht, 821 S.W.2d 627, 631-32 (Tex. App.--Dallas 1991, writ denied).
SOURCE: 01-08-00856-CV (First Court of Appeals-Houston)(10/29/09) (ample evidence substantiating the "gist" of the complained-of statements contained in the internet article)(defamation claim barred by the affirmative defense of substantial truth)
Tuesday, October 27, 2009
EFFECT OF DEFAULT BY DEFENDANT WHO WAS PROPERLY SERVED
A defendant who defaults admits all allegations of facts except unliquidated damages. See Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992); Stoner v. Thompson, 578 S.W.2d 679, 684-85 (Tex. 1979).
WHEN CAN DEFAULT JUDGMENT BE HAD FOR LIQUIDATED DAMAGES?
When a plaintiff's claim is liquidated, and proven by an instrument in writing, the plaintiff may be awarded damages without the necessity of a hearing or the presentation of evidence. Burrows v. Bowden, 564 S.W.2d 474, 475 (Tex. Civ. App.-Corpus Christ 1978, no writ); Tex. R. Civ. P. 241.
WHAT MAKES A CLAIM "LIQUIDATED"?
A claim is liquidated if the amount of damages caused by the defendant can be accurately calculated from: (1) the factual, as opposed to conclusory, allegations in the petition, and (2) an instrument in writing. Freeman v. Leasing Assocs., Inc., 503 S.W.2d 406, 408 (Tex. Civ. App.-Houston [14th Dist.] 1973, no writ). A default judgment does not establish allegations pertaining to unliquidated damages. First Nat'l Bank of Irving v. Shockley, 663 S.W.2d 685, 689 (Tex. App.-Corpus Christi 1983, no writ). If damages are unliquidated or not proved by an instrument in writing, the court must hear evidence as to damages before a default judgment may be granted. Tex. R. Civ. P. 243.
ATTORNEYS FEES ARE UNLIQUIDATED (BUT CAN BE PROVEN UP BY AFFIDAVIT) Attorney's fees are by their very nature unliquidated. The reasonableness of attorney's fees, in the absence of a contract therefore, is a question of fact and is an unliquidated demand for which the trial court entering a default judgment should hear evidence. First Nat'l Bank of Irving, 663 S.W.2d at 691.
DEEMED ADMISSIONS MAY BE USED AS SUBSTITUTE FOR OTHER PROOF
A trial court may be able to ascertain the amount of damages and attorney's fees in a default judgment based on a request for admissions. Sherman Acquisition II LP v. Garcia, 229 S.W.3d 802, 813 (Tex. App.-Waco 2007, no pet.). A plaintiff may serve a request for admissions as part of its petition, and when the defendant fails to file an answer or other response, those requests are deemed admitted. Id. at 811-12 (citing Tex. R. Civ. P. 198.2(c)). Deemed admissions may be employed as proof, and once admissions are deemed admitted by operation of law and where the admissions fully support each element of a cause of action, including damages, they will fully support a judgment based thereon. This is because unanswered requests for admissions are deemed admitted without the necessity of a court order and any matter thus admitted is conclusively established as being true. Id. at 812-13 (citing Tex. Rs. Civ. P. 198.2(c), 198.3). Thus, the facts admitted may not be contradicted by evidence at the trial. Id. at 813 (citing Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989)).
SOURCE: 05-07-01730-CV (Dallas Court of Appeals)(10/26/2009) (credit card debt suit)
BREACH OF CONTRACT ELEMENTS (UNPAID DEBT ON CREDIT CARD)
The elements of a breach of contract claim are: (1) the existence of a valid contract; (2) performance or tender of performance; (3) breach by the defendant; and (4) damages resulting from the breach. Hussong v. Schwan's Sales Enters., Inc., 896 S.W.2d 320, 326 (Tex. App.-Houston [1st Dist.] 1995, no writ).
REASONABLE ATTORNEY'S FEES IN ADDITION TO PROVEN AMOUNT OF DEBT Reasonable attorney's fees may be recovered, in addition to the amount of a valid claim and costs, if the claim is for a written contract. Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (Vernon 2008). See id. § 38.002 (providing for recovery procedure).
SOURCE: DALLAS COURT OF APPEALS - No. 05-07-01730-CV (Tex.App.- Dallas Oct. 26, 2009)
Monday, October 26, 2009
DEFERRING CLAIM ACCRUAL DATE THROUGH THE DISCOVERY RULE
The discovery rule is a very limited exception to limitations and is construed strictly. See Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1994) (“the discovery rule, in application, proves to be a very limited exception to statutes of limitation.”); S.V. v. R.V., 933 S.W.2d 1, 25 (Tex. 1996) (“exceptions to the legal injury rule should be few and narrowly drawn”). [U]nder Texas law, the discovery rule applies when “the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable.” See Computer Assocs. Int'l, Inc., 918 S.W.2d at 456.
HOW IS 'INHERENTLY UNDISCOVERABLE' CONSTRUED AND APPLIED BY COURTS IN TEXAS?
As the Texas Supreme Court explained in Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734-35 (Tex. 2001): An injury is inherently undiscoverable if it is, by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence. S.V. v. R.V., 933 S.W.2d 1, 7 (Tex.1996) (citing Altai, 918 S.W.2d at 456). “Inherently undiscoverable” does not mean that a particular plaintiff did not discover his or her particular injury within the applicable limitations period. Id. Instead, we determine whether an injury is inherently undiscoverable on a categorical basis because such an approach “brings predictability and consistency to the jurisprudence.” Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122 (Tex.2001) (citing S.V. v. R.V., 933 S.W.2d at 6); see also HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex.1998). Accordingly, the question [...] is not whether [parties] detected the alleged improper charges and resulting underpayment within the limitations period. Rather, we must decide whether theirs is “the type of injury that generally is discoverable by the exercise of reasonable diligence.” HECI, 982 S.W.2d at 886. The court also explained in Via Net, U.S. v. TIG Insurance Co., 211 S.W.3d 310, 314 (Tex. 2006), that whether an injury is inherently undiscoverable is a legal question “decided on a categorical rather than case-specific basis; the focus is on whether a type of injury rather than a particular injury was discoverable.” (Emphasis in original).
SOURCE: DALLAS COURT OF APPEALS - 05-07-01553-CV (Dallas CoA)(10/19/09)
SoL: When does a cause of action accrue? Under what circumstances can a later ACCRUAL DATE be claimed?
WHEN DOES AN ACTIONABLE CLAIM ACCRUE FOR LIMITATIONS PURPOSES?
Determining when a cause of action accrues typically is a question of law. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003). “ As a general rule, a cause of action accrues and the statute of limitations begins to run when facts come into existence that authorize a party to seek a judicial remedy." Id. (citing Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 514 (Tex. 1998), and Murray, 800 S.W.2d at 828). “In most cases, a cause of action accrues when a wrongful act causes a legal injury, regardless of when the plaintiff learns of that injury or if all resulting damages have yet to occur." Knott, 128 S.W.3d at 221 (citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)).
WHEN DOES A LATER ACCRUAL DATE APPLY?
Accrual may be deferred if the cause of action (1) is not discovered as a result of fraud or fraudulent concealment; or (2) is “inherently undiscoverable." Kuzniar v. State Farm Lloyds, 52 S.W.3d 759, 760 (Tex. App.-San Antonio 2001, pet. denied) (en banc). [Party] did not plead these bases for deferring accrual of his cause of actions; did not assert them in his summary judgment response; and does not assert them on appeal. Therefore, [opposing party] was not required to negate these bases for deferring accrual in the trial court and they do not affect the analysis on appeal. See, e.g, Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006).
SOURCE: 14-08-00248-CV (14th Court of Appeals-Houston) (10/15/09)
Thursday, October 22, 2009
LIMITATIONS & DISCOVERY RULE: WHAT IS ITS EFFECT WHEN IT APPLIES?
"The discovery rule has been applied in limited categories of cases to defer accrual of a cause of action until the plaintiff knew or, exercising reasonable diligence, should have known of the facts giving rise to a cause of action." HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998).
WHEN DOES THE DISCOVERY RULE TOLL THE RUNNING OF LIMITATIONS?
The application of the discovery rule is generally limited to those cases where the nature of the injury is inherently undiscoverable and the evidence of the injury is objectively verifiable. Id. The applicability of the discovery rule is determined categorically, i.e., not based on whether the particular injury in the case at hand may not have been discovered but whether the injury is of a type that generally is discoverable by the exercise of reasonable diligence. Id.
SOURCE: (04-08-00509-CV (San Antonio Court of Appeals (7/1/09, pet. denied Oct. 16, 2009)
Tuesday, October 20, 2009
Monday, October 19, 2009
An employer who discloses information about a current or former employee under Section 103.003 is immune from civil liability for that disclosure or any damages proximately caused by that disclosure unless it is proven by clear and convincing evidence that the information disclosed was known by that employer to be false at the time the disclosure was made or that the disclosure was made with malice or in reckless disregard for the truth or falsity of the information disclosed. For purposes of this subsection, "known" means actual knowledge based on information relating to the employee, including any information maintained in a file by the employer or that employee. Id. § 103.004(a).
When a defendant seeks summary judgment based on qualified privilege, it is the defendant's burden to conclusively establish that his allegedly defamatory statement was made with an absence of actual malice. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995).
In the defamation context, a statement is made with actual malice when it is made with knowledge of its falsity or with reckless disregard as to its truth. Id. at 646. Reckless disregard exists when "the defendant in fact entertained serious doubts as to the truth of his publication" or had a "high degree of awareness of . . . [the] probable falsity of his statements." Bentley v. Bunton, 94 S.W.3d 561, 591 (Tex. 2002) (quoting Harte-Hanks Commc'ns, Inc. v. Connaughton, 491 U.S. 657, 688 (1989)).
Actual malice with regard to a defamatory statement involves a higher level of culpability than mere ill will or animosity. Akin v. Santa Clara Land Co., 34 S.W.3d 334, 341 (Tex. App.--San Antonio 2000, pet. denied). Negligence, failure to investigate the truth or falsity of the statements prior to publication, or failure to act as a reasonable prudent person is insufficient. Id. at 341-42.SOURCE: 03-07-00317-CV (Austin Court of Appeals) (10/14/09) (statement about former employee's refusal to take drug test not actionable) (evidence is sufficient to conclusively establish that [former employer's] statements were made without malice or reckless disregard for their truth or falsity. See New Times, Inc. v. Issacks, 146 S.W.3d 144, 164 (Tex. 2004) (affidavits from interested witnesses may negate actual malice as a matter of law if they are "clear, positive, and direct, otherwise credible and free from contradictions and inconsistencies, and [able to be] readily controverted. Tex. R. Civ. P. 166a(c)").
Sunday, October 18, 2009
OMISSION OF MATERIAL TERM WOULD RENDER CONTRACT UNENFORCEABLE
A contract that lacks a material term is not an enforceable contract. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (stating that "[i] n order to be legally binding, a contract must be sufficiently definite in its terms so that a court can understand what the promisor undertook" and that "[w]here an essential term is open for future negotiation, there is no binding contract"); Sadeghi v. Gang, 270 S.W.3d 773, 776 (Tex. App.-Dallas 2008, no pet.) ("If a contract is not clear and certain as to all essential terms, it will fail for indefiniteness."); Miga v. Jensen, 25 S.W.3d 370, 376 (Tex. App.-Fort Worth 2000), aff'd in part and rev'd in part, 96 S.W.3d 207 (Tex. 2002). Thus, a party may defend a breach of contract action by asserting that the contract on which the claim is based is not enforceable as a matter of law and therefore cannot support a breach of contract action. See T.O. Stanley Boot Co., 847 S.W.2d at 221-22.
NATURE OF THE LEGAL ARGUMENT THAT ESSENTIAL TERMS IS MISSING FROM THE CONTRACT SUED ON
An assertion that the contract lacked a material term does not establish an independent reason why a plaintiff should not recover and is therefore not an affirmative defense. See Phillips v. Phillips, 820 S.W.2d 785, 791 (Tex. 1991) (stating that affirmative defense does not rebut facts asserted by plaintiff but rather seeks to establish independent reason why plaintiff should not recover).
QUESTION OF LAW NOT FOR THE JURY TO DECIDE
[T]he question of whether the contract contained all essential terms for it to be enforceable is a question of law. Beal Bank, S.S.B., 124 S.W.3d at 654 n.8; Am.'s Favorite Chicken Co., 929 S.W.2d at 622. [T]he jury's answer to the question is therefore not determinative. Alcorn v. Brown, 536 S.W.2d 80, 82 (Tex. Civ. App- Fort Worth 1976, writ ref'd n.r.e.); see also Se. Pipe Line Co., Inc. v. Tichacek, 997 S.W.2d 166, 172 (Tex. 1999) (noting that a jury's answer to a question may be disregarded if question calls for a finding on a question of law). Alcorn, 536 S.W.2d at 82 (stating that trial court may disregard jury's answer to erroneously submitted question of law).
SOURCE: 02-07-00355-CV (Fort Worth Court of Appeals) (5/28/09, pet. denied 10/16/09) (finding that the contract for sale/purchase of interest in house boat at issue contained all the material terms necessary for it to be enforceable).
What terms are material or essential to a contract are determined on a contract-by-contract basis, depending on the subject matter of the contract at issue. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (stating that "[e]ach contract should be considered separately to determine its material terms" and that "[i]n a contract to loan money, the material terms will generally be: the amount to be loaned, maturity date of the loan, the interest rate, and the repayment terms").
ESSENTIAL TERMS OF CONTRACT FOR SALE
Three essential elements of a contract for sale are "(1) the thing sold, which is the object of the contract; (2) the consideration or price to be paid for the thing sold; and (3) the consent of the parties to exchange the thing for the price." Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 767 (Tex. App.-El Paso 2004, no pet.); John Wood Group USA, Inc. v. ICO, Inc., 26 S.W.3d 12, 20 (Tex. App.-Houston [1st Dist.] 2000, pet. denied).
ESSENTIAL TERMS OF CONTRACT FOR LOANING OF MONEY
In a contract to loan money, the material terms will generally be: the amount to be loaned, maturity date of the loan, the interest rate, and the repayment terms. T.O. Stanley Boot Co., 847 S.W.2d at 221.
RELATED CONCEPTS: missing, omitted material contract terms, indefiniteness of contract terms, meeting of the minds, agreement to agree, enforceability of contract.
SOURCE: 02-07-00355-CV (Fort Worth CoA) (5/28/09, pet. denied 10/16/09)
Saturday, October 17, 2009
Discharge Defense to Suit to Enforce Personal Guaranty - Material Alteration of Contract without Guarantor's Consent
AFFIRMATIVE DEFENSE OF DISCHARGE AGAINST ENFORCEMENT OF PERSONAL GUARANTY FOR LIABILITY EVIDENCED BY PROMISSORY NOTE
To be entitled to discharge from liability, the guarantor must prove: (1) a material alteration of the underlying contract; (2) made without the guarantor's consent; (3) which is to the guarantor's detriment. Vastine v. Bank of Dallas, 808 S.W.2d 463, 464-65 (Tex. 1991) (per curiam); Old Colony Ins. Co. v. City of Quitman, 163 Tex. 144, 352 S.W.2d 452, 455 (1961).
We review a trial court's conclusions of law as a legal question. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).
DISCHARGE DEFENSE NOT ESTABLISHED
There is no evidence of any modification of the promissory note here. The evidence Byboth relies on concerns whether Wood breached the note, not whether it modified it. Moreover, the evidence also negates as a matter of law any damages resulting from the misapplication of the payments from 2-16 Holdings, Inc. It is undisputed that when Wood calculated the amount owed on the note at trial (or at least before judgment), it credited 2-16 Holdings, Inc. and Byboth with the amounts of the four payments. Byboth agreed that Wood was not seeking to recover under the guaranty more than 2-16 Holdings, Inc. owed under the terms of the promissory note. Therefore, any earlier misapplication of the payments due under the promissory note was corrected, and the judgment on the underlying obligation reflected the correction. Thus, the undisputed facts fail to show that Byboth should be discharged from liability.
SOURCE: 05-08-00915-CV (Dallas Court of Appeals) (5/21/09, pet. denied Oct 16, 2009)
|Material Alteration of Contract and Discharge Defense |
in Suit to Enforce Personal Guaranty
LIMITATIONS MUST BE PLED TO AVOID WAIVER
“In pleading to a preceding pleading, a party shall set forth affirmatively . . . statute of limitations . . . and any other matter constituting an avoidance or affirmative defense.” Tex. R. Civ. P. 94. Limitations is an affirmative defense that is waived if not pleaded. G.R.A.V.I.T.Y. Enters., Inc. v. Reece Supply Co., 177 S.W.3d 537, 544 (Tex. App.-Dallas 2005, no pet.).
DEFENSE OF LIMITATIONS IN ATTORNEY DISCIPLINARY ACTION / DISBARMENT ACTION
No attorney licensed to practice law in Texas may be disciplined for Professional Misconduct occurring more than four years before the time when the allegation of Professional Misconduct is brought to the attention of the Office of Chief Disciplinary Counsel, except in cases in which disbarment or suspension is compulsory.
ACCRUAL AND TOLLING OF STATUTE / DISCOVERY RULE
Limitations will not begin to run where fraud or concealment is involved until such Professional Misconduct is discovered or should have been discovered in the exercise of reasonable diligence by the Complainant.Tex. R. Disciplinary P. 15.06, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A-1 (Vernon 2005). Appellant argues that the mandatory nature of the language in rule 15.06, “No attorney . . . may be disciplined for Professional Misconduct occurring more than four years before . . . the allegation . . . is brought to the attention of the Office of Chief Disciplinary Counsel, “ makes it an absolute bar to discipline for conduct outside the limitations period.
EXAMPLES OF STATUTES OF LIMITATIONS THAT WERE WAIVED
[Texas courts of appeals] have held other statutes of limitations containing mandatory language could be waived. Tex. Fam. Code Ann. § 160.607(a) (Vernon 2008) (“a proceeding . . . to adjudicate the parentage of a child . . . shall be commenced not later than the fourth anniversary of the date of the birth of the child”); Miles v. Peacock, 229 S.W.3d 384, 387-88 (Tex. App.-Houston [1st Dist.] 2007, no pet.) (family code § 160.607(a) waived by failure to plead limitations); see also Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(3) (Vernon 2002) (“A person must bring suit on the following actions not later than four years after the day the cause of action accrues: . . . (3) debt . . . .”); Frazier v. Havens, 102 S.W.3d 406, 411-12 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (four-year statute of limitations waived by failure to plead it). Thus, the mandatory nature of the language does not preclude waiver.
SOURCE: 05-07-00428-CV (Dallas CoA) (3/17/09, pet. denied Oct 16, 2009)