Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Monday, November 2, 2009

Declaratory Judgment under the Texas UDJA (DJA)

   
DECLARATORY RELIEF UNDER THE DECLARATORY JUDGMENTS ACT (DJA)
   

The Declaratory Judgments Act is a procedural device for deciding cases that are within the trial court's jurisdiction. State v. Morales, 869 S.W.2d 941, 947 (Tex. 1994). The stated purpose of the Act is "to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations." Tex.Civ.Prac.&Rem.Code Ann. § 37.002(b)(Vernon 2008); Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995).
   
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).

   
ATTORNEY'S FEES AVAILABLE TO WINNER OR LOSER IN DECLARATORY JUDGMENT ACTION

 
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).

   
SOURCE: 08-07-00074-CV (El Paso Court of Appeals) (10/28/09)


   

Accord and Satisfaction as Affirmative Defense to Debt Claim

WHAT IS "ACCORD AND SATISFACTION" AS A LEGAL CONCEPT? The affirmative defense of accord and satisfaction is a type of contractual modification that rests upon a new contract, express or implied, in which the parties agree to the discharge of the existing obligation by means of a lesser payment tendered and accepted. Jenkins v. Henry C. Beck Co., 449 S.W.2d 454, 455 (Tex. 1969). A modification of a contract must satisfy the elements of a contract: a meeting of the minds supported by consideration. Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986). Whether a contract is modified depends on the parties' intentions and is a question of fact. Id. at 228-29. ACCORD AND SATISFACTION REQUIRES AGREEMENT ON MODIFICATION OF ORIGINAL CONTRACT AND CONSIDERATION The burden of proving modification rests on the party asserting the modification. Id. at 229. Because a valid accord and satisfaction depends upon an agreement, it "only occurs when the parties mutually assent to it," and their intention is a controlling element. McCarty v. Humphrey, 261 S.W. 1015, 1016 (Tex. Comm'n App. 1924, judgm't adopted). The trial court found that there was no mutual assent or “meeting of the minds” necessary for an accord and satisfaction. We defer to the trial court’s findings of fact that there was not sufficient intent that a new agreement was formed. We find that the trial court did not err in its finding of no accord and satisfaction as a matter of law and that this finding is not against the great weight of the evidence. SOURCE: 10-07-00362-CV (Tenth Court of Appeals-Waco) (10/28/2009)

Clean vs Unclean Hands Doctrine

   
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 (not tortuous) Interference with Business Relations (prospective)

BIZ TORTS: 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)

SPECIFIC PERFORMANCE REMEDY (breach of contract)

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)

Elements of Negligence Claim in Texas

WHAT DOES IT TAKE TO PROVE NEGLIGENCE? To prevail on its negligence claim, [Plaintiff] had to prove the existence of a legal duty, a breach of that duty, and damages proximately caused by the breach. See D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). Thus, among the other elements of its negligence cause of action, [Plaintiff] had to show it was injured by [Defendant's] actions. See generally A.B.F. Freight Sys., Inc. v. Austrian Import Serv., Inc., 798 S.W.2d 606, 615 (Tex. App.-Dallas 1990, writ denied) (recognizing that establishing the fact of damage is a prerequisite to establishing the amount of damages to be awarded). SOURCE: 09-08-00083-CV (Beaumont Court of Appeals)(10/29/09)

ATTORNEY'S FEES: The American Rule (and its exceptions)

The American Rule with Regard to Fees: Loser Pays? - No, but there are plenty of exceptions It has long been the rule in Texas that attorney’s fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a statute or contract that allows for their recovery. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006) (“Absent a contract or statute, trial courts do not have inherent authority to require a losing party to pay the prevailing party’s fees.”); Wm. Cameron & Co. v. Am. Sur. Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm’n App. 1932, judgm’t adopted) (“It is settled law in this state that, unless provided for by statute or by contract between the parties, attorneys’ fees incurred by a party to litigation are not recoverable against his adversary either in an action in tort or a suit upon a contract.”); Sherrick v. Wyland, 37 S.W. 345, 345 (Tex. Civ. App. 1896) (“It has often been ruled, in this state and elsewhere, that fees of counsel, incurred in prosecuting a suit for or defending against a wrong, are not ordinarily recoverable as actual damages, because they are not considered proximate results of such wrong.”). The rule is known as the American Rule. See Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health and Human Res., 532 U.S. 598, 602 (2001) (“[P]arties are ordinarily required to bear their own attorney’s fees—the prevailing party is not entitled to collect from the loser.”); Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967). SOURCE: Akin, Gump, Strauss, Hauer & Feld, LLP vs. National Development and Research Corp. No. 07-0818 (Tex. Oct. 30, 2009) (Opinion by Phil Johnson) (legal malpractice, attorney's caused by malpractice recoverable as damages despite the American Rule)

When is a broken promise actionable as fraud, rather than merely as a breach of contractual obligation?

TEXAS SUPREME COURT FINDS OCCASION TO RESTATE FRAUD ELEMENTS: The elements of fraud are: (1) that a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001) (citing Formosa Plastics Corp. v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)). BROKEN PROMISES: BREACH OF CONTRACT VS. FRAUD "A promise of future performance constitutes an actionable misrepresentation if the promise was made with no intention of performing at the time it was made.” Formosa Plastics, 960 S.W.2d at 48. “Proving that a party had no intention of performing at the time a contract was made is not easy, as intent to defraud is not usually susceptible to direct proof.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 305 (Tex. 2006) (citing Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986)). While breach of the contract alone is not evidence that a party did not intend to perform, “breach combined with ‘slight circumstantial evidence’ of fraud” is some evidence of fraudulent intent, enough to support a verdict. Id. “[A] party’s intent is determined at the time the party made the representation, [but] it may be inferred from the party’s subsequent acts after the representation is made.” Spoljaric, 708 S.W.2d at 434 (citing Chicago, T. & M.C. Ry. Co. v. Titterington, 19 S.W. 472, 474 (1892)). SOURCE: Aquaplex, Inc v. Rancho Law Valencia, Inc., No. 08-0280 (Tex. Oct 30, 2009) (per curiam) (fraud damages, proving amount of damages, remittiture by court of appeals or new trial)

Construction of Insurance Policy Is Analogous to Contract Interpretation

INTERPRETING INSURANCE POLICY IS A FORM OF CONTRACT CONSTRUCTION The interpretation of an insurance contract is generally subject to the same rules of construction as other contracts. Nat’l Union Fire Ins. Co. of Pittsburg, PA v. Crocker, 246 S.W.3d 603, 606 (Tex. 2008). Contract language that can be given a certain or definite meaning is not ambiguous and is construed as a matter of law. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). The primary objective is to determine the parties’ intent as reflected in the policy’s terms, Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 23 (Tex. 2008), and our review of an unambiguous contract, like any other legal question, is de novo. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). SOURCE: Chrysler Ins. Co., v. Greenspoint Dodge of Houston, Inc., No. 08-0780 (Tex. Oct. 30, 2009)(per curiam)

Thursday, October 29, 2009

The Defense of Substantial Truth to a Defamation Claim

DEFAMATION / LIBEL / SLANDER

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)

Elements of common-law fraud claim in Texas

WHICH ELEMENTS HAVE TO BE PROVEN TO ESTABLISH A COMMON-LAW FRAUD CLAIM UNDER TEXAS LAW? To prevail on a fraud claim, a plaintiff must prove that (1) the defendant made a material representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) the defendant intended to induce the plaintiff to act upon the representation; and (4) the plaintiff actually and justifiably relied on the representation, which caused injury. Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001); Hartford Fire Ins. Co. v. C. Springs 300, Ltd., 287 S.W.3d 771, 781 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). SOURCE: 01-07-01004-CV (1st CoA Houston)(10/29/09)

Tuesday, October 27, 2009

Claim for LIQUIDATED and UNLIQUIDATED Damages in Default Judgment Context


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)

Elements of Breach of Contract (breach of credit card agreement in debt collection 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: No. 05-07-01730-CV (Tex.App.- Dallas Oct. 26, 2009)

Monday, October 26, 2009

What is a CASH PRICE VIOLATION (under the Texas Finance Code)?

CASH PRICE VIOLATION CLAIM UNDER THE TEX. FIN. CODE IN CONNECTION WITH PURCHASE OF CAR, TRUCK, MOTOR VEHICLE: When is it viable? When Not? A cash price violation occurs when a dealership establishes a cash price for the vehicle, but sells the vehicle for more than the price established. Collins v. Fred Haas Toyota, 21 S.W.3d 606, 607 (Tex. App.-Houston [1st Dist.] 2000, no pet.). The finance code defines cash price as the “price at which the retail seller offers in the ordinary course of business to sell for cash the goods or services that are subject to the transaction.” Tex. Fin. Code Ann. § 348.004(a) (Vernon 2006). The underlying purpose of a cause of action for a cash price violation is to prevent a dealership from charging a finance customer more than a cash customer for the same vehicle. Collins, 21 S.W.3d at 607. In Collins, the plaintiff entered into a financing agreement and purchased a car from the dealership. He later sued complaining of a cash price violation when he learned that on the same day that he purchased the car, the dealership advertised it for less than the price he had paid. Id. at 607. The trial court granted summary judgment for the dealership on the basis that an advertisement cannot establish a cash price unless it is relied upon. Id. The court of appeals reversed. The court held that reliance is not an element of a cash price violation. Id. at at 608. The cash price and the negotiated price agreed upon between the dealership and the buyer are not the same. The finance code provides that the retail installment contract must contain the “cash price of the retail installment transaction.” Tex. Fin. Code Ann. § 348.102(a)(5) (Vernon 2006). It is the negotiated price that the retail installment contract must contain, not the cash price that the dealership offered the vehicle in the ordinary course of business to all customers. As noted by the court in Collins, the cash price of the vehicle was the price the dealership “offered the vehicle in the ordinary course of business to all customers, not the price ultimately agreed on and stated in the contract.” Collins, 21 S.W.3d at 608. The trial court found a violation because the “negative equity that was rolled into this retail installment contract was not put in the proper location.” In his appellee's brief, Kuberski states “Bledsoe's inclusion of financed negative equity in Mr. Kuberski's contracted-for cash price violated the Texas Finance Code and federal disclosure requirements.” However, failure to separately disclose the negative equity is not relevant to a determination of a cash price violation. Moreover, the contracted-for cash price, alone, does not determine a cash price violation under the finance code. See Collins, 21 S.W.3d at 607. What qualifies as a "finance charge"? - Financing of Negative Equity to Pay off Loan on Trade-In Not Included The finance code does not define the term finance charge. The finance code provides that the disclosure requirements of Regulation Z under the Truth in Lending Act apply to retail installment contracts in Texas. See Tex. Fin. Code Ann. § 348.009 (Vernon 2006). Regulation Z defines finance charge as “any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit.” 12 C.F.R. § 226.4 (2003). Negative equity does not fit within this definition. SOURCE: 05-08-00071-CV (Dallas CoA) (1/30/09) (no cash-price violation based on inclusion of financed negative equity for trade-in in loan for new truck) CITE: Bledsoe Dodge, L.L.C. v. Kuberski, 279 S.W.3d 839 (Tex. App.-Dallas 2009, no pet.)

Inherently undiscoverable injury for purposes of the DISCOVERY RULE (SoL Tolling Theories)

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: 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).[1] “ 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

The DISCOVERY RULE in the context of a FIDUCIARY RELATIONSHIP and FIDUCIARY DUTY

WHEN DOES THE DISCOVERY RULE APPLY? EXISTENCE OF FIDUCIARY RELATIONSHIP AND FIDUCIARY DUTY IS RELEVANT 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.). 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. 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 (4th Court of Appeals) (7/1/09, pet. denied Oct. 16, 2009)

The DISCOVERY RULE in the Context of Limitations (SoL)

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

No RES JUDICATA where underlying judgment reversed or vacated

THE DEFENSE OF RES JUDICATA Res judicata bars a party from attempting to relitigate a claim or cause of action that a competent tribunal has finally adjudicated. Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999). For res judicata to apply, the following elements must be present: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) the same parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Igal v. Brightstar Info. Tech. Group, Inc., 250 S.W.3d 78, 86 (Tex. 2008). FIRST ELEMENT OF RES JUDICATA DEFENSE: A PRIOR JUDGMENT ON THE MERITS Because of our holding that the motions for summary judgment in the first suit were erroneously granted, a prior final judgment on the merits does not exist on which Biela's and Alert can base their res judicata argument. Accordingly, the appellees cannot establish the first element of res judicata as a matter of law. The October 14, 2008 order granting summary judgment is therefore reversed, and the cause is remanded to the trial court for further proceedings. SOURCE: Nos. 04-08-00587-CV, 04-08-00857-CV (San Antonio Court of Appeals 6/10/09, pet. denied Oct 16, 2009)

Monday, October 19, 2009

Defamation claim based on job reference by former employer & qualified privilege, immunity defense

ELEMENTS OF DEFAMATION CLAIM To maintain a defamation cause of action, the plaintiff must prove that the defendant: (1) published a statement; (2) that was defamatory concerning the plaintiff; (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. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989) (citing New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964)). To prevail on its motion for summary judgment, a defendant must disprove at least one essential element of the plaintiff's defamation claim or establish all of the elements of an affirmative defense as a matter of law. WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998); Montgomery, 669 S.W.2d at 310-11. Because it is dispositive, the first ground of Rosban's traditional summary judgment motion that we consider is the affirmative defense of immunity from Graham's defamation claim under the labor code. STATUTORY IMMUNITY FROM DEFAMATION LIABILITY FOR JOB REFERENCES "An employer may disclose information about a current or former employee's job performance to a prospective employer of the current or former employee on the request of the prospective employer or the employee." Tex. Lab. Code Ann. § 103.003 (West 2006). "Job performance" is defined as "the manner in which an employee performs a position of employment and includes an analysis of the employee's attendance at work, attitudes, effort, knowledge, behaviors, and skills." Id. § 103.002(3). Employers are immune from civil liability for making disclosures about current or former employees' job performance:

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

Effect of Absence of MATERIAL TERM from CONTRACT

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 CoA) (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 are the essential, material TERMS of a CONTRACT

WHICH ELEMENTS ARE ESSENTIAL TO ENFORCEABILITY OF A CONTRACT? - IT DEPENDS ON THE NATURE (OBJECT) OF THE CONTRACT 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., 847 S.W.2d at 221 (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)

AGREEMENT and CONTRACT Distinguished

IS THERE A DIFFERENCE BETWEEN A CONTRACT AND AN AGREEMENT? TEXAS COURT OF APPEALS SAYS "Yes" Although sometimes used interchangeably, the terms "agreement" and "contract" are not synonymous. "Agreement" refers to "a manifestation of mutual assent on the part of two or more persons," whereas the term "contract" refers to "a promise or a set of promises for the breach of which the law gives a remedy." Restatement (Second) of Contracts '' 1, 3 (1981) (emphasis added); Wiley v. Bertelsen, 770 S.W.2d 878, 882 (Tex. App.- Texarkana 1989, no writ) (noting that the term "agreement" is more broad than the term "contract" and that parties might have an agreement but not a contract). SOURCE: 02-07-00355-CV (Fort Worth Court of Appeals) (5/28/2009, pet. denied 10/16/09)

Saturday, October 17, 2009

Discharge Defense to Suit to Enforce Personal Guaranty

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 CoA) (5/21/09, pet. denied Oct 16, 2009)

SoL may be waived by failure to plead limitations as an affirmative defense

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)

Tuesday, October 13, 2009

IIED Tort Difficult to Establish in Employment Context in Texas: What Is Extreme and Outrageous Treatment of Employee?

Elements of Intentional Infliction of Emotional Distress (IIED) Cause of Action The elements of the cause of action of intentional infliction of emotional distress are (1) the defendant acted intentionally or recklessly; (2) the defendant's conduct was extreme and outrageous; (3) the actions of the defendant caused the plaintiff emotional distress; and (4) the emotional distress suffered by the plaintiff was severe. Texas Farm Bureau Mut. Ins. Co. v. Sears, 84 S.W.3d 604, 610 (Tex. 2002). What kind of behavior by the boss rises to the level of "extreme and outrageous"? Extreme and outrageous conduct is conduct so outrageous in character, and so extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society. Id. Texas has adopted a strict approach to intentional infliction of emotional distress claims arising in the workplace. GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 612-13 (Tex. 1999) (holding supervisor's ongoing acts of harassment, intimidation, and humiliation, and daily obscene and vulgar behavior went beyond the bounds of tolerable work behavior and were within the realm of extreme and outrageous conduct). While an employer's conduct in the workplace may sometimes be unpleasant for the employee, the employer must have some discretion to supervise, review, criticize, demote, transfer, and discipline its workers. Sears, 84 S.W.3d at 611. Thus, Texas courts decline to recognize intentional infliction of distress claims for ordinary employment disputes, recognizing that extreme conduct in this context exists only in the most unusual circumstances. Id. SOURCE: 04-08-00146-CV (7/1/09) (San Antonio Court of Appeals)

Friday, October 9, 2009

Is conspiracy claim viable against employees (agents) of the same entity?

Can Multiple Agents of the Same Employer Be Held Liable for Conspiracy? In his petition against [Defendant, a grocery store], [Plaintiff, a customer] alleges that [Defendant], through actions of its employees, conspired to have him charged with theft. The elements of civil conspiracy include: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as a proximate result. Juhl v. Airington, 936 S.W.2d 640, 644 (Tex. 1996); Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996). Employees or agents of a principal acting within the course and scope of their employment or agency relationship cannot form a conspiracy together unless they are acting outside their capacity as an employee or agent or are acting for a personal purpose of their own. See Texas-Ohio Gas, Inc. v. Mecom, 28 S.W.3d 129, 138 (Tex. App.--Texarkana 2000, no pet.); Atlantic Richfield Co. v. Misty Prods. Inc., 820 S.W.2d 414, 421 (Tex. App.--Houston [14th Dist.] 1991, writ denied). SOURCE: 03-07-00149-CV (10/7/09) (Austin CoA)

Elements of Fraud by Misrepresentation Claim

ELEMENTS OF A FRAUD CLAIM BASED ON MISREPRESENTATION IN TEXAS A plaintiff must allege the following to state a cause of action for fraud based on misrepresentation: (1) a material representation was made; (2) it was false; (3) when the representation was made, the speaker knew it was false or the statement was made recklessly without any knowledge of its truth and as a positive assertion; (4) the speaker made the representation with the intent that it should be acted upon by the other party; (5) the other party acted in reliance on the representation; and (6) the party thereby suffered injury. DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 688 (Tex. 1990). SOURCE: 03-07-00149-CV (10/7/09) (Third Court of Appeals in Austin, TX)

Invasion of Privacy Tort(s) in Texas

WHICH INVASION-OF-PRIVACY CLAIMS ARE ACTIONABLE IN TEXAS? Invasion of privacy consists of four separate torts, each protecting a different privacy interest: (1) unreasonable intrusion upon the seclusion or private affairs of another; (2) unreasonable publicity given to an aspect of one's private life in which the public has no legitimate concern; (3) publicity that unreasonably places another in a false light before the public; and (4) unwarranted appropriation of one's name or likeness. See Billings v. Atkinson, 489 S.W.2d 858, 860 (Tex. 1973). The Texas Supreme Court has recognized the first and second types of invasion of privacy, indicated probable acceptance of the fourth, and expressly declined to recognize the third. See Cain v. Hearst Corp., 878 S.W.2d 577, 578 (Tex. 1994). SOURCE: 03-07-00149-CV (10/7/09) (Austin Court of Appeals)

False Imprisonment & Shopkeeper's Privilege

ELEMENTS OF CAUSE OF ACTION FOR FALSE IMPRISONMENT UNDER TEXAS LAW To prevail under a false imprisonment claim, a plaintiff must prove (1) willful detention, (2) without consent, and (3) without authority of law. Sears, Roebuck & Co. v. Castillo, 693 S.W.2d 374, 375 (Tex. 1985). Absence of adequate justification or authority of law is an essential element of a cause of action for false imprisonment. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). If the alleged detention was performed with authority of law, no false imprisonment occurs. Wal-Mart Stores v. Resendez, 962 S.W.2d 539, 540 (Tex. 1998). SHOP-KEEPER'S PRIVILEGE The "shopkeeper's privilege" expressly grants an employee the authority of law to detain a customer to investigate the ownership of property in a reasonable manner and for a reasonable period of time if the employee has a reasonable belief that the customer has stolen or is attempting to steal store merchandise. Tex. Civ. Prac. & Rem. Code Ann. § 124.001 (West 2005). [Plaintiff] has failed to state a viable cause of action for false imprisonment because the facts he has alleged demonstrate that the HEB employees had the authority to detain him under the shopkeeper's privilege. [Plaintiff] alleged that he was stopped by the store security officer as he was leaving the store with an unmarked bag whose contents set off the security alarm. [Plaintiff]stated in his deposition that when he first entered the store carrying the unmarked bag, he attempted to get Cruz's attention, but that Cruz did not notice or acknowledge him. Cruz did not, therefore, have any reason to know that Carr had brought the bag with him into the store. When the contents of [Plaintiff's] bag set off the security alarm as [Plaintiff] was leaving the store, Cruz and the other HEB employees had a reasonable basis for believing that [Plaitniff] was attempting to steal store merchandise. The shopkeeper's privilege does not require that the person detaining another confirm or refute the detainee's claims regarding the merchandise, nor does it prevent the suspected shoplifter from being held for a reasonable time in order to deliver him to the police. Resendez, 962 S.W.2d at 540; see also Tex. Civ. Prac. & Rem. Code Ann. § 124.001; Tex. Crim. Proc. Code Ann. art. 18.16 (granting to any person privilege to detain person suspected of theft and deliver them to peace officer). Because the detention was not without authority of law, Carr has not stated a legally arguable cause of action for false imprisonment, and the realistic chance of his ultimate success on this claim was slight. The trial court did not abuse its discretion by dismissing Carr's claim for false imprisonment. SOURCE: 03-07-00149-CV (10/7/09) (3rd Court of Appeals in Austin, TX)

Governmental Immunity: Waiver-by-Conduct Exception Rarely Viable

GOVERNMENT CONTRACTS AND SOVEREIGN IMMUNITY Governmental units do not waive their immunity from suit simply by contracting with a private party. Federal Sign v. Texas S. Univ., 951 S.W.2d 401, 408 (Tex. 1997). The supreme court's decision in Federal Sign, however, appeared to leave open the possibility that a governmental unit could waive its immunity from suit, absent legislative action, by conduct that amounted to something more than merely contracting with a private party. Id. at 408 n.1. Justice Baker, writing for a plurality of the supreme court in IT-Davy, seemed to foreclose the option altogether; however, five justices, writing in concurrence and dissent, suggested that there may be equitable circumstances that would justify it. See, e.g., 74 S.W.3d at 862 (Hecht, J., concurring) ("I cannot absolutely foreclose the possibility that the State may waive immunity in some circumstances other than by statute."). WHEN DOES A GOVERNMENTAL ENTITY WAIVE ITS IMMUNITY BY ITS CONDUCT (IF EVER)? While there is no supreme court decision approving of a specific waiver by conduct, at least one recent case from the First Court of Appeals provides guidance. See Texas S. Univ. v. State St. Bank & Trust Co., 212 S.W.3d 893 (Tex. App.--Houston [1st Dist.] 2007, pet. denied). In that case, Texas Southern University contracted with CMS Viron to lease heavy equipment to the University. Id. at 897. Attached to the Master Lease Agreement was an opinion letter from TSU's general counsel giving assurances to CMS that the contract was binding against the University and that CMS would be able to collect on a judgment against TSU, should the need arise. Id. at 898. After CMS delivered the equipment, TSU refused to honor its agreement, citing sovereign immunity. Id. The court held that TSU waived immunity by its conduct. Id. at 908. The court focused primarily on the fact that TSU gave false assurances of the validity and enforcability of the contract to "lure" CMS into the contract, then reneged on its agreement, and tried to hide behind the cloak of immunity. Id. CONDUCT WAS NOT EGREGIOUS ENOUGH TO EFFECT WAIVER In the present case, we have no such egregious conduct by the City. Smith does not allege that the City lured him into the deal with representations that the City would not be immune from suit should the need arise to sue. He does not contend that the City did anything other than what one would expect of any ordinary contracting party. While Smith may have been under the impression that the City would not be immune from suit, he does not allege that the City did anything to plant or foster the mistaken belief. Smith does not allege that the City provided him with a legal opinion on which to rely, nor does Smith claim that the City made any representations to him concerning immunity at all. Smith's potential misunderstanding of the law is not enough to justify an equitable waiver of immunity against the City. Likewise, Smith's reliance on the City's promise to build and maintain a river crossing is not sufficient. The existence of mutual promises is a necessary element of most contracts, and the supreme court has held that merely contracting with a private party, without more, is not enough to waive governmental immunity by conduct. See Fed. Sign, 951 S.W.2d 408. Nor is it even enough that the City accepted the benefits of the contract. See Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex. 2007); IT-Davy, 74 S.W.3d at 860. SOURCE: 03-08-00784-CV (10/8/09) (Austin Court of Appeals)

GUARDIANSHIP - Purpose of Guardianship Proceeding, Competency Obviates Need for Guardian

WHAT IS THE PURPOSE OF A GUARDIANSHIP SUIT? The only purpose of a guardianship proceeding is to appoint a guardian with either full or limited authority over an incapacitated person. See Tex. Prob. Code Ann. § 602 (Vernon 2003). A guardianship is neither necessary nor appropriate when a person is found to be competent. If the probate judge had found Miller to be incapacitated, the appropriate course of action would have been to appoint a guardian with full or limited authority over him. See id. The probate judge did not. LEGAL COMPETENCY/INCOMPETENCY & GUARDIANSHIP A conclusion that no guardian is needed is a determination that the proposed ward has sufficient capacity to care for himself. Such a conclusion is, in effect, a finding that the person is competent, and it is an express denial of a request to form a guardianship. Although there is no order in the record using the express language “the application is denied” and there were apparently no further hearings or proceedings on the application, the February 15th order is final. There is no magic language required to render a judgment final. The probate judge's order states that after considering evidence, “it was neither necessary nor appropriate to appoint a guardian in this cause.” Thus, the order expressly disposes of the entire case. The language of the order does not, in any way, reserve the issue of guardianship for later determination. The language of an order can make it final, even though it should have been interlocutory, when, as here, the language expressly disposes of all claims and all parties. SOURCE: 05-08-00627-CV (10/7/09) (Dallas Court of Appeals)

Wednesday, October 7, 2009

What is conversion and how do you prove the claim in a Texas court?

Cause of action for conversion in Texas Conversion is 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. Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971); Khorshid, Inc. v. Christian, 257 S.W.3d 748, 758-59 (Tex. App.-Dallas 2008, no pet.). Proving Conversion Claim To establish a claim for conversion, a plaintiff must prove that: (1) the plaintiff owned or had possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised 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. Khorshid, Inc., 257 S.W.3d at 759. SOURCE: 05-08-00654-CV (10/6/09) (Dallas CoA) Conversion Claims under Texas Law: Elements to Prove To establish a claim for conversion, a plaintiff must show: (1) title; (2) right to possession; and (3) a demand for the return of the property unless the possessor's acts manifest a clear repudiation of the plaintiff's rights. Buffet Partners, L.P. v. Sheffield Square, L.L.C., 256 S.W.3d 920, 924 (Tex. App.--Dallas 2008, no pet.); El Paso Production Co. v. Valence Operating Co., 112 S.W.3d 616, 625 (Tex. App.--Houston [1st Dist.] 2003, pet. denied). SOURCE: 04-08-00171-CV (7/8/09) (San Antonio Court of Appeals) Related causes of action: Texas Theft Liability Act claim (statutory civil theft claim)

Tuesday, October 6, 2009

Meeting of the Minds Element of Civil Conspiracy Claim Not Established

Elements of a Civil Conspiracy Claim To recover on an action for civil conspiracy, the plaintiff must prove: (1) the defendant and another person acted together, (2) they acted to accomplish an object (an unlawful purpose or a lawful purpose by unlawful means), (3) they had a meeting of the minds on the object or course of action, (4) they committed one or more unlawful acts, and (5) the plaintiff suffered damages as the proximate result of the unlawful acts. Ins. Co. Of N. Am. v. Morris, 981 S.W.2d 667, 675 (Tex. 1998). Absence of Evidence on Meeting of the Minds on the object of the alleged conspracy warrants no-evidence summary judgment In his motion for summary judgment, [Defendant] argued there is no evidence supporting any of the elements of conspiracy. Appellant provided no evidence of conspiracy and merely alleged that "all" defendants conspired against him because he is not proficient in English and is a "simple" blue collar worker. One of the essential elements required to establish a civil conspiracy is a meeting of the minds on the object or course of action. Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 857 (Tex. 1969). There is no evidence of a meeting of the minds between the defendants. Appellant points out no specific facts establishing any of the elements of conspiracy. Appellant did not attach any evidence of conspiracy to his response as required by rule 166a(i). See Tex. R. Civ. P. 166a(i). Specifically, appellant presented no evidence on the third element of conspiracy, a meeting of the minds. The trial court did not err in granting Manley's no-evidence motion for summary judgment. SOURCE: 14-07-01085-CV (10/6/09) (Fourteenth Court of Appeals-Houston)

Failure to produce evidence of false representation dooms fraud claim

Elements of Fraud Cause of Action To recover on an action for fraud, the plaintiff must prove: (1) a material representation was made, (2) the representation was false, (3) when the speaker made the representation, he knew it was false or made it recklessly without knowledge of the truth as a positive assertion, (4) the speaker made it with the intention that it should be acted upon by the party, (5) the party acted in reliance upon it, and (6) the party thereby suffered injury. Solutioneers Consulting, Ltd. v. Gulf Greyhound Partners, Ltd., 237 S.W.3d 379, 385 (Tex. App.-Houston [14th Dist.] 2007, no pet.). Allegation of fraud was conclusory and did not raise issue of fact to avert summary judgment; no evidence of specific false representation produced. In his summary judgment motion, Manley argued there is no evidence to support any of the elements of fraud. Appellant alleges Manley engaged in fraud, conspiracy to defraud, and constructive fraud. He claims his signature on the final settlement agreement was procured by fraud because Manley did not explain the settlement agreement to him and he admittedly signed without reading the agreement. However, appellant fails to point to a specific false representation by Manley. Mere conclusory statements do not constitute effective summary judgment proof and need not be given the same presumptive force as allegations of fact. Abbott Laboratories, Inc. v. Segura, 907 S.W.2d 503, 508 (Tex. 1995). Moreover, appellant attached no evidence to his motion. See Tex. R. Civ. P. 166a(i) ("The court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact."). Appellant's allegations of fraud amount to conclusory accusations and he presents no evidence raising a genuine issue of material fact on any element of his fraud cause of action. See Segura, 907 S.W.2d at 508. Specifically, appellant did not point to a single specific misrepresentation upon which he bases his claim. The trial court did not err in granting summary judgment on this claim. SOURCE: 14-07-01085-CV (10/6/09) (14th Court of Appeals - Houston)

Monday, October 5, 2009

Ambiguous vs. Unambiguous Contract: Implications for Summary Judgment, Admissibility of Extrinsic, Parol Evidence

WHEN IS A CONTRACT AMBIGUOUS / UNAMBIGUOUS? A contract is unambiguous if it can be given a definite legal meaning; if it is subject to two or more reasonable interpretations, it is ambiguous, creating a fact issue on the parties' intent. Webster, 128 S.W.3d at 229; Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000). Lack of clarity, however, does not necessarily create an ambiguity, and neither does a mere disagreement between the parties. See Universal Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003) (adding that whether "a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered"); see also City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App.- Fort Worth 2008, pet. filed) (explaining that when "the meaning of a contract is unambiguous, a party's construction is immaterial"). Question of Law vs. Question of Fact When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). Conversely, the interpretation of an unambiguous contract is a matter of law to be determined by the trial court. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000). Effect of Contract Ambiguity (or Absence thereof) on Admissibility of Extrinsic Evidence / Parol Evidence In its second issue, Vineyard argues that the trial court erred by sustaining Univest's general objection to the purported parol evidence testimony of Collins and by excluding portions of Collins's affidavit because Collins's testimony met the admissibility requirements under the rules of evidence and common law. However, because we have concluded that the terms in the REA are not ambiguous, we must overrule Vineyard's evidentiary issues. See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006) (recognizing that if the agreement is not ambiguous, courts do not consider extrinsic evidence when interpreting the agreement). Accordingly, we overrule Vineyard's second issue. SOURCE: 02-08-00496-CV (10/1/09) (Fort Worth Court of Appeals)

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