Tuesday, September 29, 2009
Monday, September 28, 2009
Friday, September 25, 2009
Generally, to recover for the breach of a fiduciary duty, a plaintiff must show: 1) the existence of a fiduciary duty, 2) a breach of the duty, 3) causation, and 4) damages. See Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.-Houston [1st Dist.] 2003, no pet.). When, however, the plaintiff seeks fee restitution or benefit disgorgement, he need not prove actual damages. Burrow v. Arce, 997 S.W.2d 229, 240 (Tex. 1999); Alavi v. MCI Worldcom Network Services, Inc., 2007 WL 274565, at *3 (Tex. App.-Beaumont, Feb. 1, 2007, pet. denied). Because Richard's claim for breach of fiduciary duty sought damages as his remedy, he was required to prove them. See Alavi, 2007 WL 274565, at *3; Lee v. Lee, 47 S.W.3d 767, 780-81 (Tex. App.-Houston [14th Dist.] 2001, pet. denied); Longaker v. Evans, 32 S.W.3d 725, 733 n.2 (Tex. App.-San Antonio 2000, pet. withdrawn).
ABSENCE OF EVIDENCE ON DAMAGES PROVED FATAL TO CLAIM
Cynthia's no-evidence motion asserted there was no evidence that: 1) she owed a fiduciary duty to Richard, or 2) that damages resulted from the alleged breach. Richard's response contended that a DTA creates a fiduciary relationship by its "very nature," that such beneficiaries typically are unaware of delinquencies until foreclosure proceedings have begun, that beneficiaries often (as in his case) do not have adequate funds to bring the note current, and that the unavoidable foreclosure results in a "major hit" on the beneficiary's credit. Richard further argued that he did not have to prove damages to recover on his breach of fiduciary claim. On appeal, Richard maintains this Court should determine whether a DTA creates a fiduciary duty. We need not reach the issue concerning whether Cynthia owed Richard a duty. Even if we assumed that Cynthia owed Richard a fiduciary duty, which she disputes, Richard is required to have presented evidence raising a genuine fact issue on his damages. See Grant, 73 S.W.3d 215. Because Richard failed to present any evidence proving that he had been damaged, the trial court did not err in granting summary judgment to Cynthia on Richard's breach-of-fiduciary-duty claim. We overrule issue two. Having overruled both of Richard's issues, we affirm the trial court's judgment.
SOURCE: 07-08-08833 CV (7/16/09)
THE DISCOVERY RULE: WHEN CAN IT BE INVOKED TO GOOD EFFECT TO AVOID LIMITATIONS BAR ?
"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). 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.
INHERENTLY UNDISCOVERABLE INJURY & EXISTENCE OF FIDUCIARY DUTY
A variation to the inherently undiscoverable element arises when applying the discovery rule to a fiduciary relationship. Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996); see also S.V. v. R.V. , 933 S.W.2d 1, 8 (Tex. 1996). In the fiduciary context, "a person to whom a fiduciary duty is owed is either unable to inquire into the fiduciary's actions or unaware of the need to do so." S V., 933 S.W.2d at 8. When a trustee breaches its duty to a beneficiary, the nature of the injury is considered inherently undiscoverable because of the fiduciary nature of the relationship. See id. However, the person owed a fiduciary relationship still must exercise reasonable diligence "when the fact of misconduct becomes [so] apparent it can no longer be ignored." (1) Id.; see also Computer Assocs. Int'l, 918 S.W.2d at 456; Slay v. Burnett Trust, 187 S.W.2d 377, 394 (Tex. 1945); G. Prop. Mgmt., Ltd. v. Multivest Fin. Servs. of Tex., Inc., 219 S.W.3d 37, 48-49 (Tex. App.--San Antonio 2006, no pet.).
FIDUCIARY DUTY CONTEXT
Because Jones owed fiduciary responsibilities to Polk Mechanical, the inherently undiscoverable requirement for applying the discovery rule is satisfied. See S V., 933 S.W.2d at 8. Moreover, the injury in this case is objectively verifiable as it can be objectively established through bank records and cancelled checks. See HECI Exploration Co., 982 S.W.2d at 886. Accordingly, we hold the discovery rule applied to Polk Mechanical's claim against Jones, and Jones was required to conclusively negate its application to be entitled to summary judgment. See Pustejovsky, 35 S.W.3d at 646.
NEGATING THE DISCOVERY RULE
To conclusively negate the discovery rule, Jones was required to prove as a matter of law that there was no genuine issue of fact about when Polk Mechanical discovered or should have discovered the nature of the injury. See Potter, 137 S.W.3d at 704. Inquiries involving the discovery rule usually entail questions for the trier of fact because when a plaintiff knew or should have known of an injury is generally a fact question. Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex. 1998); Cadle Co. v. Wilson, 136 S.W.3d 345, 352 (Tex. App.--Austin 2004, no pet.). However, if reasonable minds could not differ about the conclusion to be drawn from the facts in the record, the start of the limitations period may be determined as a matter of law. Childs, 974 S.W.2d at 44; Cadle Co., 136 S.W.3d at 352; Zacharie v. U.S. Nat. Resources, Inc., 94 S.W.3d 748, 753 (Tex. App.--San Antonio 2002, no pet.).
SOURCE: 04-08-00509-CV (7/1/09) (San Antonio Court of Appeals)
Civil Actions involving Trusts: Statute of Limitations and the Discovery Rule
A suit involving a trust is governed by the four-year statute of limitations. Hicks v. Hoover, 422 S.W.2d 613, 614 (Tex. Civ. App.--Waco 1967, writ ref'd n.r.e.). The statute of limitations begins to run when the all assets have been distributed. See In re Estate of McGarr, 10 S.W.3d 373, 376 (Tex. App.--Corpus Christi 1999, pet. denied). The discovery rule, however, tolls the running of the statute of limitations until the plaintiff discovers or should have discovered the nature of the injury. Houston Endowment, Inc. v. Atlantic Richfield Co., 972 S.W.2d 156, 159 (Tex. App.--Houston [14th Dist.] 1998, no pet.). In order for the discovery rule to apply, the injury must be inherently undiscoverable and objectively verifiable. Id.
SOURCE: 04-08-00601-CV (7/8/09) (San Antonio Court of Appeals)
Wednesday, September 23, 2009
BILL OF REVIEW DEFINED - PROCEDURE EXPLAINED
“A bill of review is an independent equitable action brought by a party to a former action seeking to set aside a judgment, which is no longer appealable or subject to motion for new trial.” Baker v. Goldsmith, 582 S.W.2d 404, 406 (Tex. 1979). The judgment may be set aside “for sufficient cause.” Tex. R. Civ. P. 329b(f); Baker, 582 S.W.2d at 406. The complainant files a petition “to invoke the equitable powers of the court.” Baker, 582 S.W.2d at 408; In re K.M.S., 68 S.W.3d 61, 66 (Tex. App.—Dallas 2001), pet. denied, 91 S.W.3d 331 (Tex. 2002) (per curiam).
ELEMENTS OF PROOF FOR BILL OF REVIEW TO VACATE PRIOR JUDGMENT
Generally, the bill of review complainant must prove “‘(1) a meritorious defense to the cause of action alleged to support the judgment, (2) which he was prevented from making by the fraud, accident or wrongful act of the opposite party, (3) unmixed with any fault or negligence of his own.’” Baker, 582 S.W.2d at 406–07 (quoting Alexander v. Hagedorn, 148 Tex. 565, 568–69, 226 S.W.2d 996, 998 (1950)).
EFFECT OF TRIAL COURT'S GRANT OF THE RELIEF SOUGHT IN A BILL-OF- REVIEW PROCEEDING
If the complainant establishes prima facie proof of a meritorious defense, the court conducts a trial at which the merits of the underlying issue are effectively relitigated. Caldwell v. Barnes, 154 S.W.3d 93, 98 (Tex. 2004); Baker, 582 S.W.2d at 409. During the bill of review trial, “the parties . . . revert to their original status as plaintiff and defendant with the burden on the original plaintiff to prove his or her case.” Caldwell, 154 S.W.3d at 98; accord Baker, 582 S.W.2d at 407–08. The bill of review defendant—the original plaintiff—must prove, and may offer evidence to support, “his original cause of action.” Meece v. Moerbe, 631 S.W.2d 729, 729 (Tex. 1982) (citing Baker, 582 S.W.2d at 409). At the end of the proceeding, if the fact-finder decides the complainant (the original defendant) has proved his case to set aside the judgment, the trial court may vacate the prior judgment. See Baker, 582 S.W.2d at 409. And if the bill of review defendant (the plaintiff in the original proceeding) proves his original case, the trial court may “substitute a new judgment which properly adjudicates the entire controversy.” In re J.B.A., 127 S.W.3d 850, 851 (Tex. App.—Fort Worth 2004, no pet.); cf. Jordan v. Jordan, 907 S.W.2d 471, 472 (Tex. 1995) (per curiam) (citing Tesoro Petrol. v. Smith, 796 S.W.2d 705, 705 (Tex. 1990) (per curiam)).
SOURCE: 04-09-00040-CV (8/31/09) (San Antonio Court of Appeals)
A Bill of Review is not exactly a substantive cause of action, but nevertheless a means by which a court may grant EQUITABLE RELIEF (setting aside a default judgment that is no longer appealable). The Bill of Review, and its elements, thus fit within the scope of this blawg.
THE NATURE OF A BILL OF REVIEW AND REQUIREMENTS FOR A SUCCESSFUL PETITION IN A BILL-OF-REVIEW SUIT:
A bill of review is an independent equitable proceeding brought by a party to a former action who seeks to set aside a judgment that is no longer appealable or subject to a challenge by a motion for new trial. Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (per curiam).
ELEMENTS OF BILL OF REVIEW
To prevail, a bill of review plaintiff must prove: (1) a meritorious defense to the cause of action upon which the judgment is based, (2) which he or she was prevented from making by the fraud, accident, or wrongful act of the opposing party or official mistake, (3) unmixed with any fault or negligence on his or her own part. Caldwell, 154 S.W.3d at 96; Baker v. Goldsmith, 582 S.W.2d 404, 406-07 (Tex. 1979).
Additionally, bill of review relief is available only if a party has exercised due diligence in pursuing all adequate legal remedies. Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999). This due diligence requirement is distinct from the three bill of review elements and must be established before a complainant is entitled to seek bill of review relief. Narvaez, 127 S.W.3d at 321. “The inquiry traditionally used to determine whether a party has been diligent is whether the litigant and his counsel used such care as that which prudent and careful men would ordinarily use in their own cases of equal importance.” In the Interest of A.L.H.C., 49 S.W.3d 911, 916 (Tex. App.—Dallas 2001, pet. denied).
SOURCE: 04-09-00198-CV (9/23/09) (San Antonio Court of Appeals) (trial court's order granting bill of review reversed because petitioner did not exercise available remedies, i.e., direct appeal).
Default on Installment Payment Plan: SoL and accrual of claim for breach of a contract that requires payments at regular intervals
ACCRUAL OF DEBT CLAIM WHEN CONTRACT REQUIRES PERIODIC PAYMENTS: EACH MISSED PAYMENT DATE TRIGGERS RUNNING OF LIMITATIONS SEPARATELY
A four-year statute of limitations applies to contract actions. Tex. Civ. Prac. & Rem. Code Ann. § 16.004 (Vernon 2002). A breach of contract claim accrues at the time of breach. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). When recovery is sought on an obligation payable in installments, the statute of limitations runs against each installment from the time it becomes due. Intermedics, Inc. v. Grady, 683 S.W.2d 842, 845 (Tex.App.-Houston [1st Dist.] 1984, writ ref'd n.r.e.). Thus, a suit for the breach of a contract requiring payment in periodic installments may include all payments due within the four-year statute of limitations period, even if the initial breach was beyond the limitations period. Recovery of any payment more than four years overdue is barred. Hollander v. Capon, 853 S.W.2d 723, 726-27 (Tex.App.-Houston [1st Dist.] 1993, writ denied).
RELATED TERMS: Retail Installment Contract, financing, closed-ended consumer loan requiring monthly payments in equal amounts, monthly payment-due dates, missing monthly loan repayment, payment schedule
SOURCE: 05-08-00458-CV (9/18/09) (Dallas Court of Appeals)
Monday, September 21, 2009
Friday, September 18, 2009
Thursday, September 17, 2009
PREVAILING DEFENDANT MAY RECOVER ATTORNEY'S FEES IF AUTHORIZED BY CONTRACT
The trial court's decision to award attorney's fees and post-judgment interest is supported by the contract, which states:
If the services of an attorney are retained and/or if any action at law or in equity is brought to enforce or interpret the provisions of this Agreement or to collect any monies due hereunder, the prevailing party shall be entitled to reasonable attorney's fees together with interest thereon at the highest rate provided by law in addition to any other relief to which he may be entitled at law or in equity.
WHAT DOES 'PREVAILING' MEAN? WHAT DOES IT TAKE TO QUALIFY AS PREVAILING PARTY FOR FEE RECOVERY PURPOSES?
A "prevailing party" is a party who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even if not to the extent of its original contention. See Flagship Hotel, Ltd. v. City of Galveston, 117 S.W.3d 552, 564 (Tex. App.--Texarkana 2003, pet. denied); Dear v. City of Irving, 902 S.W.2d 731, 739 (Tex. App.--Austin 1995, writ denied).
Because ADC successfully defended against Hertzberg's suit by obtaining summary judgment on his claims, ADC is the prevailing party. See Robbins v. Capozzi, 100 S.W.3d 18, 27 (Tex. App.--Tyler 2002, no pet.). Thus, [Defendant] is entitled to "reasonable attorney's fees together with interest thereon" as provided by the contract. Accordingly, the trial court's decision to grant [Defendant's] requests for attorney's fees and post-judgment interest was not an abuse of discretion.
SOURCE: THIRD COURT OF APPEALS IN AUSTIN - 03-07-00072-CV - 9/11/2009
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
(2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.
Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
STANDARD OF REVIEW OF ATTORNEY'S FEES AWARDS ON APPEAL
We review a trial court's decision to either grant or deny attorney's fees under an abuse-of-discretion standard, and we review the amount of attorney's fees awarded under a legal-sufficiency standard. See Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004); Aaron Rents, Inc. v. Travis Cent. Appraisal Dist., 212 S.W.3d 665, 671 (Tex. App.--Austin 2006, no pet.).
A trial court abuses its discretion if it acts without reference to any guiding rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). To determine whether a trial court abused its discretion, we must determine whether the trial court's action was arbitrary or unreasonable. Id. at 242.
Because we review the amount of attorney's fees awarded under a legal-sufficiency review, we must view the evidence in a light that tends to support the disputed finding and disregard evidence and inferences to the contrary. Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003). If more than a scintilla of evidence supports the challenged finding, the legal-sufficiency challenge must fail. Id.SOURCE: 03-07-00072-CV (9/11/09)
[Appellee - Defendant] requests that we award it appellate attorney's fees as monetary sanctions against [Appellant - Plaintiff] for bringing a frivolous appeal. See Tex. R. App. P. 45 (authorizing appellate court to award prevailing party "just damages" upon determination that appeal is frivolous).
Standard for Award of Appellate Attorney's Fees as a Sanction
In determining whether an appeal is frivolous, we review the record from the appellant's viewpoint and decide whether the appellant had reasonable grounds to believe the judgment could be reversed. Smith v. Brown, 51 S.W.3d 376, 381 (Tex. App.--Houston [1st Dist.] 2001, pet. denied).
Whether to grant sanctions for a frivolous appeal is a matter of discretion that an appellate court exercises with prudence and caution and only after careful deliberation in truly egregious circumstances. Goss v. Houston Cmty. Newspapers, 252 S.W.3d 652, 657 (Tex. App.--Houston [14th Dist.] 2008, no pet.).
Although we have rejected [Appellant's] arguments on appeal, we cannot characterize the appeal as objectively frivolous. Accordingly, we overrule [Appellee's] request.SOURCE: 03-07-00072-CV (9/11/09)
What is the limitations period for bringing suit for breach of contract in Texas? When does the claim accrue for purposes of starting the running of limitations? How long does the Plaintiff have time to file suit without running in limitations problems?
The statute of limitations for a breach-of-contract action is four years from the date the cause of action accrues. See Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (West 2008); Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002).
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. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 211 (Tex. 2003 ). 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 occurred. Id.
In order to determine when [Plaintiff's] cause of action accrued, we must first look at the injury on which he based his cause of action and then determine when the facts underlying the cause of action came into existence. See id.
SOURCE: AUSTIN COURT OF APPEALS - 03-07-00072-CV (because there is no genuine issue of material fact that the Plaintiff filed suit more than four years after his cause of action accrued, the Austin Court of Appeals affirms the trial court's summary judgment in favor of the Defendant.)
Sunday, September 13, 2009
HOW DOES THE LAW DEFINE THE AFFIRMATIVE DEFENSE OF WAIVER?
Waiver is an intentional relinquishment of a known right. Straus v. Kirby Court Corp., 909 S.W.2d 105, 109 (Tex. App.-Houston [14th Dist.] 1995, writ denied).
NON-WAIVER CLAUSE IN CONTRACT MAY PRECLUDE WAIVER DEFENSE
Creech's entire argument is based on Christian's ultimate acceptance of Creech's untimely or replacement payments. But the parties' Agreement contains a non-waiver clause; Christian hired an attorney, and the attorney unequivocally demanded the entire amount due as a result of the default; and there is no evidence in the record that Christian intended to accept a lesser amount than what he had demanded. [...] We will not construe Christian's efforts to collect past-due amounts as a waiver of his right to a full recovery. We overrule Creech's second issue as well.
SOURCE: DALLAS COURT OF APPALS - 05-08-00952-CV
Thursday, September 10, 2009
When Is a Statement Actionable as Defamatory? Defamation defined:A statement is defamatory if the words tend to injure a person's reputation, exposing the person to public hatred, contempt, ridicule, or financial injury. Colson v. Grohman, 24 S.W.3d 414, 421 (Tex. App.--Houston [1st Dist.] 2000, pet. denied). Defense to Defamation Claim: The Statements Made the Basis of the Lawsuit Are Substantially True Truth is an affirmative defense to a claim for defamation. See Associated Press v. Cook, 17 S.W.3d 447, 452 (Tex. App.--Houston [1st Dist.] 2000, no pet.). Similarly, a showing of substantial truth in a summary judgment case will defeat a defamation claim. McIlvain v. Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990). To determine substantial truth, we consider whether the defamatory statement was more damaging to the plaintiff in the mind of the average reader than a true statement would have been. McIlvain, 794 S.W.2d at 16; Barbouti v. Hearst Corp., 927 S.W.2d 37, 65 (Tex. App.--Houston [1st Dist.] 1996, writ denied). This evaluation involves looking at the "gist" of the statement. McIlvain, 794 S.W.2d at 16; KTRK Television v. Felder, 950 S.W.2d 100, 105 (Tex. App.--Houston [14th Dist.] 1997, no writ). If the underlying facts as to the gist of the libelous charge are undisputed, then we can disregard any variance with respect to items of secondary importance and determine substantial truth as a matter of law. McIlvain, 794 S.W.2d at 16; KTRK Television, 950 S.W.2d at 105-06. As stated previously, the truth of a statement is an absolute defense to a claim for defamation. See Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 766 (Tex. 1987). The defense of truth does not require proof that the alleged defamatory statement is literally true in every detail; substantial truth is sufficient. Howell v. Hecht, 821 S.W.2d 627, 631-32 (Tex. App.--Dallas 1991, writ denied). If [Defendant] Pohl established, as a matter of law, the substantial truth of the statements about which the Pedens [Plaintiffs] complain, he is entitled to summary judgment. McIlvain, 794 S.W.2d at 15; Gustafson v. City of Austin, 110 S.W.3d 652, 656 (Tex. App.--Austin 2003, pet. denied). SOURCE OF ALL CASELAW SNIPPETS: Appellate opinion in 01-08-00373-CV (9/10/09) RELATED CONCEPTS: libel, slander, business disparagement, derogatory statements, reputation and reputational damages, standing in the community, goodwill, tortious interference
Wednesday, September 9, 2009
THE DISCOVERY RULE TO COUNTER ASSERTION OF LIMITATIONS BY THE OPPONENT
In rare cases where the nature of the injury is inherently undiscoverable and evidence of the injury is objectively verifiable, courts have recognized the discovery rule as an exception to the general accrual rule. See, e.g., Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996).
The discovery rule is a very limited exception to limitations and is construed strictly. See id.; S.V., 933 S.W.2d at 25 (noting that applications of discovery rule “should be few and narrowly drawn"). The rule has been limited to matters that are properly characterized as inherently undiscoverable. Johnson v. Abbey, 737 S.W.2d 68, 69-70 (Tex. App.-Houston [14th Dist.] 1987, no writ).
An injury is inherently undiscoverable if, by its very nature, it is unlikely to be discovered within the prescribed limitations period despite the exercise of due diligence. Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734-35 (Tex. 2001). Whether an injury is inherently undiscoverable is determined on a categorical basis, because such an approach “brings predictability and consistency to the jurisprudence." See Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122 (Tex. 2001). Thus, the focus is on whether a type of injury, rather than a particular injury, was discoverable. Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006).
Where the discovery rule applies, the cause of action accrues when the plaintiff knows, or through the exercise of reasonable care and diligence should have discovered, the nature of his injury and the likelihood that it was caused by the wrongful acts of another. See Childs, 974 S.W.2d at 40. Thus, accrual is not delayed until the plaintiff learns of actual causes and possible cures for his injuries. PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P'ship, 146 S.W.3d 79, 93 (Tex. 2004). Instead, a plaintiff who invokes the discovery rule still must have sought information about his injuries and their likely cause once apprised of facts that would prompt a reasonably diligent person to make an inquiry that would lead to discovery of the cause of action. Pirtle v. Kahn, 177 S.W.3d 567, 571 (Tex. App.- Houston [1st Dist.] 2005, pet. denied).
If, as here, the plaintiff pleads the discovery rule as an exception to limitations, the defendant moving for summary judgment must negate it. KPMG, 988 S.W.2d at 748. This may be done by demonstrating that the discovery rule does not apply or by proving, as a matter of law, that there is no genuine issue of material fact as to when the plaintiff discovered, or in the exercise of reasonable diligence should have discovered, the nature of his injury. Childs, 974 S.W.2d at 44.
SOURCE: Seureau v. Exxon Mobil Corp (Tex.App.- Houston [14th Dist.] Oct. 16, 2008)(Brown) SEE ALSO: fraudulent concealment as a basis for tolling running of limitations
Tuesday, September 8, 2009
Saturday, September 5, 2009
Friday, September 4, 2009
To begin with, a fiduciary duty must first exist.
In order to prevail on a breach of fiduciary duty claim, a plaintiff must prove: (1) the existence of a fiduciary relationship between the plaintiff and the defendant, (2) a breach by the defendant of his or her fiduciary duty to the plaintiff, and (3) an injury to the plaintiff or benefit to the defendant as a result of the breach. Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.-Houston [14th Dist.] 2008, pet. denied).
An attorney can breach his or her fiduciary duty to a client by, among other things, failing to disclose a conflict of interest, failing to deliver the client's funds, placing his or her personal interests over those of the client, misusing client confidences, taking advantage of the client's trust, self‑dealing, and making misrepresentations. See Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). An attorney only owes a duty of care to his clients and not to third parties, even if they may have been damaged by the attorney's representation of the client. Barcelo v. Elliott, 923 S.W.2d 575, 577-78 (Tex. 1996); Stancu v. Stalcup, 127 S.W.3d 429, 432 (Tex. App.-Dallas 2004, no pet.); see also Swank v. Cunningham, 258 S.W.3d 647, 661-62 (Tex. App.-Eastland 2008, pet. denied) (holding that former corporate officers and shareholders could not maintain legal malpractice action in their individual capacities against law firm that represented corporation).
SOURCE: Brown v. Green (Tex.App.- Houston [14th Dist.] Sep. 1, 2009)(Hedges)(legal malpractice, breach of fiduciary duty) (summary judgment for attorney affirmed)
Thursday, September 3, 2009
WHAT IS CONSIDERED ESTABLISHED WITHOUT A NEED FOR PROOF IN THE DEFAULT JUDGMENT CONTEXT?
In a no-answer default judgment, the failure to file an answer operates as an admission of the material facts alleged in the petition, except as to unliquidated damages. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).
A claim for damages is liquidated if the amount of damages can accurately be calculated by the court from the factual, as opposed to the conclusory allegations in the petition and written instruments. Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687 (Tex. App.-Dallas 2005, no pet.); see also Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex. App.-Houston [14th Dist.] 2001, no pet.) (suit to recover amount due for professional services was liquidated claim proved by written instruments where plaintiff attached original instruments to verified petition and motion for default judgment).
When damages are unliquidated, the judge must “hear” evidence on the damages. See Argyle Mech., Inc., 156 S.W.3d at 687; see also Tex. R. Civ. P. 243. In contrast, “if the claim is liquidated and proved by an instrument in writing, the damages shall be assessed by the court, or under its direction, and final judgment shall be rendered therefor . . . .” Tex. R. Civ. P. 241.
SOURCE: DALLAS COURT OF APPEALS - 05-07-01449-CV (credit card debt suit)
What proof is required to recover damages for the opposing party's breach of contract?
Recovery under a breach of contract claim requires proof of four elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Orix Capital Mkts., L.L.C. v. Washington Mutual Bank, 260 S.W.3d 620, 623 (Tex. App.-Dallas 2008, no pet.).
SOURCE: DALLAS COURT OF APPEALS - 05-07-01492-CV (credit card debt suit)
Tuesday, September 1, 2009
The traditional statute of frauds in Texas, currently at Tex. Bus. & Com. Code Ann. § 26.01(a) (Vernon Pamph. 2008), provides that certain types of agreements, such as a promise to answer for the debt, default, or miscarriage of another, a contract for the sale of real estate, or an agreement which is not to be performed within one year of its making, are not enforceable unless the agreement, or a memorandum of it, is in writing and signed by the person to be charged or his authorized representative. See Footnote 5 However, equity will act to avoid the statute of frauds in circumstances where enforcing the statute would itself amount to a fraud. See Nagle v. Nagle, 633 S.W.2d 796, 799-800 (Tex. 1982); Birenbaum v. Option Care, Inc., 971 S.W.2d 497, 503 (Tex. App.-Dallas 1997, pet. denied) (“Before using equity to circumvent the statute of frauds, the Texas Supreme Court has consistently required a showing that fraud would result in not doing so.”). Those circumstances are limited, however, because otherwise the exceptions would render the statute meaningless:
The Statute of Frauds is the Legislature's directive that courts enforce promises covered by the statute only if such promises are in writing. Equity can avoid the strictures of that directive only by “some positive rule which will insure its exercise for . . . the prevention of an actual fraud as distinguished from a mere wrong . . . so surely as to leave the statute itself, through the exactness of the exception, with some definiteness of operation.”Nagle, 633 S.W.2d at 799 (quoting Hooks v. Bridgewater, 111 Tex. 122, 128, 229 S.W. 1114, 1116 (1921)).
Promissory estoppel and partial performance have been recognized as equity-based exceptions to the traditional statute of frauds. Promissory estoppel allows enforcement of an otherwise unenforceable oral agreement when (1) the promisor makes a promise that he should have expected would lead the promissee to some definite and substantial injury; (2) such an injury occurred; and (3) the court must enforce the promise to avoid the injury. Nagle, 633 S.W.2d at 800; “Moore” Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex. 1972).
Promissory estoppel avoids the traditional statute of frauds when the alleged oral promise is to sign an existing document that satisfies the statute of frauds. See Nagle, 633 S.W.2d at 800 (discussing contract for sale of real estate provision of section 26.01); Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 438 (Tex. App.-Dallas 2002, pet. denied) (same); see also Birenbaum, 971 S.W.2d at 504 (promissory estoppel avoids statute of frauds only if oral promise “was to execute a document in existence that itself complied with the statute”; discussing statute of frauds formerly applicable to purchase of securities).
Under the partial performance equitable exception, an oral agreement that does not satisfy the traditional statute of frauds but that has been partially performed may be enforced if denying enforcement would itself amount to a fraud. Breezevale, 82 S.W.3d at 439; Carmack v. Beltway Dev. Co., 701 S.W.2d 37, 40 (Tex. App.-Dallas 1985, no writ) (discussing statute of frauds for agreements to pay a commission on sale or lease of real estate). The actions asserted to constitute partial performance must be “unequivocally referable” to the alleged oral agreement and corroborate the existence of that agreement; they “must be such as could have been done with no other design than to fulfill the particular agreement sought to be enforced; otherwise, they do not tend to prove the existence of the parol agreement relied upon by the plaintiff.” Breezevale, 82 S.W.3d at 439-40.
Whether an implied contract exists is determined from the parties' actions and conduct. See Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607, 609 (Tex. 1972); Harrison v. Williams Dental Group, P.C., 140 S.W.3d 912, 916 (Tex. App.-Dallas 2004, no pet.); Ervin v. Mann Frankfort Stein & Lipp CPAs, L.L.P., 234 S.W.3d 172, 182 (Tex. App.-San Antonio 2007, no pet.).
An implied contract exists when the facts and circumstances show a mutual intention to contract. See Haws & Garrett Gen. Contractors, 480 S.W.2d at 609; Harrison, 140 S.W.3d at 916; Lection v. Dyll, 65 S.W.3d 696, 704 (Tex. App.-Dallas 2001, pet. denied); Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex. App.-Dallas 1999, pet. denied); see also Ervin, 234 S.W.3d at 183.
Where the existence of the agreement is disputed, whether the parties reached an agreement is a question of fact. See Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enters., 625 S.W.2d 295, 298 (Tex. 1981); Haws & Garrett Gen. Contractors, 480 S.W.2d at 609; Live Oak Ins. Agency v. Shoemake, 115 S.W.3d 215, 218 (Tex. App.-Corpus Christi 2003, no pet.).
However, as a general rule, the existence of an express contract covering the same subject matter precludes finding the existence of an implied contract, whether in fact or in law. See Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990); Woodard v. Sw. States, Inc., 384 S.W.2d 674, 675 (Tex. 1964); Threadgill v. Farmers Ins. Exch., 912 S.W.2d 264, 268 (Tex. App.-Dallas 1995, no writ). “Where the parties expressly state the terms of an agreement, they create an express contract and are bound by it to the exclusion of conflicting implied terms.” Smith v. State, 96 S.W.3d 377, 384 (Tex. App.-Amarillo 2002, pet. ref'd) (citing Haws & Garrett Gen. Contractors, 480 S.W.2d at 609; Woodard, 384 S.W.2d at 675).
SOURCE: Notley v. Sterling Bank, No. 05-07-00891-CV, 2008 WL 4952835(Tex.App.-Dallas Nov. 21, 2008, no pet.).
PROMISSORY ESTOPPEL AS BASIS FOR RELIEF
Promissory estoppel may be utilized to enforce a promise when a plaintiff justifiably and reasonably relies on the promise to his detriment, it was foreseeable that the plaintiff would rely on the promise, and injustice can only be avoided by enforcement of the promise. See Boy Scouts v. Responsive Terminal Sys., 790 S.W.2d 738, 742 (Tex. App.-Dallas 1990, writ denied).
A promise must be sufficiently definite to support promissory estoppel. Gillium v. Republic Health Corp., 778 S.W.2d 558, 570 (Tex. App.-Dallas 1989, no writ). A promise must also be more than speculation of future events, a statement of hope, an expression of opinion, an expectation, or an assumption. City of Beaumont v. Excavators & Constructors, Inc., 870 S.W.2d 123, 138 (Tex. App.-Beaumont 1993, writ denied). Lost profits are not recoverable under promissory estoppel; a plaintiff may only recover reliance damages. Fretz Constr. Co. v. Southern Nat'l Bank, 626 S.W.2d 478, 483 (Tex. 1981).
SOURCE: DALLAS COURT OF APPEALS - 05-08-00038-CV
A breach of contract occurs when a party fails to perform an act that it has expressly or impliedly promised to perform. Methodist Hosps. of Dallas v. Corporate Communicators, Inc., 806 S.W.2d 879, 882 (Tex. App.-Dallas 1981, writ denied). The elements of a claim for breach of contract are: (1) the existence of a valid contract; (2) performance or tentative performance by plaintiff; (3) beach of the contract by defendant; and (4) damage resulting to the plaintiff from the breach. Stewart v. Sanmina Texas, L.P., 156 S.W.3d 198, 214 (Tex. App.-Dallas 2005, no pet.). Addressing the no-evidence issue of damages first, we conclude there is not a scintilla of probative evidence to establish that any breach caused Esty's alleged damages. See Southwell v. Univ. of Incarnate Word , 974 S.W.2d 351, 354-55 (Tex. App.-San Antonio 1998, pet. denied) (evidence of injury or damage to plaintiff is an essential element of breach of contract). Source: 05-08-00038-CV
BOUNCED CHECK/LATE PAYMMENT BREACHED TIME-IS-OF-THE-ESSENCE PROVISION
The elements of breach of contract are: a valid contract, performance or tendered performance by the plaintiff, breach of the contract by the defendant, and damages sustained by the plaintiff as a result of that breach. Drake v. Wilson N. Jones Med. Ctr., 259 S.W.3d 386, 389 (Tex. App.-Dallas 2008, pet. denied). In this case it is undisputed the parties had a valid contract and Christian performed as he promised. The elements of breach and damages are intertwined: the Agreement provided that if Creech failed to pay the original amount due under the Agreement in a timely manner, then he would owe an additional sum to Christian. Creech argues he did not breach because he eventually paid the initial amount due. But the summary judgment evidences establishes Creech not only paid untimely when the Promissory Note made time of the essence, he repeatedly failed to make any payment at all because his checks were dishonored. Indeed, Creech's own summary judgment evidence establishes that-well past the date when all of his payments were to be completed-Creech was still replacing bad checks for payments due many months earlier. By utterly failing to comply with the parties' contractual requirement of timely payment, Creech defaulted and triggered the obligation to pay the increased amount called for under the Agreement. It is undisputed he has not paid that amount. The summary judgment record establishes Creech breached the contract and Christian has suffered damages as a result. We overrule Creech's first issue.
Monday, August 31, 2009
REASONABLE RELIANCE ELEMENT
Fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel all require reasonable and justified reliance upon a misrepresentation or promise. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001) (fraud); TMI, Inc. v. Brooks, 225 S.W.3d 783, 792, 795 (Tex. App.- Houston [14th Dist.] 2007, pet. denied) (fraudulent inducement); Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.- Houston [14th Dist.] 2006, no pet.) (fraud, negligent misrepresentation, and promissory estoppel).
When the parties' written agreement addresses the substance of the oral statement and contains language precluding reliance on external representations, Texas courts find reliance on subsequent oral promises unreasonable. See Simpson v. Woodbridge Props., L.L.C., 153 S.W.3d 682, 684 (Tex. App.- Dallas 2004, no pet.) (holding that disclaimer of reliance clause in contract negated reliance on post contract oral misrepresentations); Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 226 (Tex. App.- Houston [1st Dist.] 2004, pet. denied) (holding that reliance on misrepresentation that was easily refutable with reasonable diligence was not justified or reasonable where two opposing parties were engaged in litigation and negotiating from equal bargaining positions); DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 856, 858-59 (Tex. App.- Houston [14th Dist.] 2003, pet. denied) (holding that reliance on both pre- and post-contractual oral representations, directly contradicted by express terms of contract, was not justified as matter of law); Airborne Freight Corp. v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 297 (Tex. App.- El Paso 1992, writ denied) (finding that written contract containing ample cautionary language precluded exclusive reliance by reasonable businessperson on verbal statements contradicting written agreement).
SOURCE: Biosilk Spa, LP v. HG Shopping Centers, LP (Tex.App.- Houston [14th Dist.] May 8, 2008) (Yates) (fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel, no reasonable reliance)