Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Wednesday, March 17, 2010

How is contract formed, entered into, in Texas?

MAKING A LEGALLY ENFORCEABLE DEAL: CONTRACT FORMATION EXPLAINED

In its simplest terms, a contract is established when proven by a preponderance of the evidence that an offer is accepted, accompanied by consideration. See Domingo v. Mitchell, 257 S.W.3d 34, 39-40 (Tex.App.-Amarillo 2008, pet. denied). To determine whether there was an offer and acceptance, and therefore a "meeting of the minds," courts use an objective standard, concerning what the parties did and said, not their subjective states of mind. See Komet v. Graves, 40 S.W.3d 596, 601 (Tex.App.-San Antonio 2001, no pet.).

"Meeting of the minds" describes the mutual understanding and assent to the agreement regarding the subject matter and the essential terms of the contract. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.App.-Dallas 1999, pet. denied). Where this element is contested, as here, the determination of the existence of a contract becomes a question of fact. Hallmark v. Hand, 885 S.W.2d 471, 476-77 (Tex.App.-El Paso 1996, writ denied).

Further, parties may agree to the material terms of a contract but leave other matters open for later negotiation; it is only when an essential term is left open for future negotiation that no binding contract exists. Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 766 (Tex.App.-El Paso 2004, no pet.); Komet v. Graves, 40 S.W.3d at 602.

Written contracts may also consist of multiple documents; City of Houston v. Clear Channel Outdoor, Inc., 233 S.W.3d 441, 445 (Tex.App.-Houston [14th Dist.] 2007, no pet.), and writings may be considered together if they pertain to the same transaction. City of Keller, 168 S.W.2d at 811. See Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981) (separate instruments executed at the same time, for the same purpose, and in the course of the same transaction are to be considered as one instrument and construed together).

In addition, if one party signs a contract, the other may accept by his or her acts, conduct, or acquiescence in the terms of the contract. DeClaire v. G. & B. McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 44 (Tex.App.-Houston [1st Dist.] 2008, no pet.) (collected cases cited therein).

SOURCE: 07-08-0344-CV - 3/12/2010 (Amarillo Court of Appeals)

Contract formation and elements to prove existence

EXISTENCE OF A VALID CONTRACT UNDER TEXAS LAW The essential elements of a breach of contract claim are (1) the existence of a valid contract, (2) the plaintiff performed or tendered performance, (3) the defendant breached the contract, and (4) the plaintiff was damaged as a result of the breach. Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.). Parties form a binding contract when there is (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) consent by each party to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App.—Houston [14th Dist.] 2002, no pet.). For an agreement to be enforceable, there must be a meeting of the minds with respect to its subject matter and essential terms. Id. at 556. A “meeting of the minds” is a mutual understanding and assent to the expression of the parties’ agreement. See Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex. App.—Dallas 1999, pet. denied). To determine whether there was an offer and acceptance, and therefore a “meeting of the minds,” courts use an objective standard; they consider what the parties did and said, not the parties’ subjective states of mind. See Komet v. Graves, 40 S.W.3d 596, 601 (Tex. App.—San Antonio 2001, no pet.). SOURCE: 14-08-01098-CV (3/16/10) (Houston Court of Appeals)

Sunday, March 14, 2010

Elements of Quantum Meruit Claim (alternative to breach-of-contract cause of action for services rendered)

QUANTUM MERUIT CLAIM: NOTICE OF EXPECTATION OF PAYMENT AS ONE ELEMENT Quantum meruit is an equitable remedy that does not arise out of a contract, but is independent of it. Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). WHAT TYPE OF LEGAL THEORY IS QUANTUM MERUIT? Quantum meruit is an equitable theory of recovery founded in the principle of unjust enrichment. Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). CONTRACT AND QUANTUM MERUIT INCOMPATIBLE - MUTUALLY EXCLUSIVE REMEDIES - EXPRESS CONTRACT DEFENSE Generally, a party may recover under quantum meruit only when there is no valid express contract covering the services or materials furnished. Id.; see also Woodard v. Sw. States, Inc., 384 S.W.2d 674, 675 (Tex. 1964) (“Where there exists a valid express contract covering the subject matter, there can be no implied contract.”). ELEMENTS OF QUANTUM MERUIT CLAIM UNDER TEXAS COMMON LAW “To recover under the doctrine of quantum meruit, a plaintiff must establish that: 1) valuable services and/or materials were furnished, 2) to the party sought to be charged, 3) which were accepted by the party sought to be charged, and 4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient.” Heldenfels Bros. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Vortt Exploration Co., 787 S.W.2d at 944; Speck v. First Evangelical Lutheran Church of Houston, 235 S.W.3d 811, 815 (Tex. App.—Houston [1st Dist.] 2007, no pet.). SOURCE: Doyle v. Heilman, 01-09-00164-CV (Tex.App.- Houston [1st Dist.] Mar. 11, 2010) (judgment on quantum meruit claim for personal care services reversed, essential element of notice that Plaintiff expected to be paid for services rendered not shown, not satisfied)

Tuesday, March 2, 2010

Suit to remove cloud from title, suit to quiet title

CIVIL ACTION TO RESOLVE TITLE DISPUTE A suit to quiet title, sometimes referred to as a suit to remove a cloud from title, is an equitable action that may be used to establish that an adverse party's claim to property is invalid or unenforceable. See Angell v. Bailey, 225 S.W.3d 834, 838 n.6 (Tex. App.-El Paso 2007, no pet.) ("A cloud on title exists when an outstanding claim or encumbrance is shown, which on its face, if valid, would affect or impair the title of the owner of the property."); see also In re Stroud Oil Props., Inc., 110 S.W.3d 18, 25-26 (Tex. App.-Waco 2002, orig. proceeding); Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.-Beaumont 2000, pet. denied); Bell v. Ott, 606 S.W.2d 942, 952-53 (Tex. Civ. App.-Waco 1980, writ ref'd n.r.e.). " A suit to quiet title or to remove a cloud can be maintained only by a person owning an interest in the property involved." Bell, 606 S.W.2d at 953. The plaintiff in a suit to quiet title then "must allege right, title, or ownership in himself or herself with sufficient certainty to enable the court to see he or she has a right of ownership that will warrant judicial interference." Wright, 26 S.W.3d at 578. SOURCE: 03-08-00372-CV (Austin Court of Appeals) (2/26/10)

Monday, March 1, 2010

What is a constructive trust? When may a court impose it as a remedy?

THE EQUITABLE REMEDY OF CONSTRUCTIVE TRUST

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex. App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.; see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. App.-Fort Worth 2004, pet. denied).

ELEMENTS OF CONSTRUCTIVE TRUST

To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud; (2) unjust enrichment of the wrongdoer; and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485.
  
A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that her acquisition or retention of the property is wrongful and that she would be unjustly enriched if she were permitted to retain the property. Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 142 Tex. 81, 86, 176 S.W.2d 158, 160 (1943)).

DISCRETIONARY EQUITABLE REMEDY

Whether a constructive trust should be imposed at all is within the discretion of the trial court. Troxel, 201 S.W.3d at 297; Hubbard, 138 S.W.3d at 485. The proponent of a constructive trust must strictly prove the elements necessary for the imposition of the trust. Troxel, 201 S.W.3d at 297; Hubbard, 138 S.W.3d at 485.
   
SOURCE: 12-07-00022-CV (Tyler Court of Appeals) (2/26/10)

Duress Defined

WHAT IS DURESS, LEGALLY SPEAKING? Duress requires unlawful conduct or a threat of unlawful conduct of such a character as to destroy the other party's exercise of free will and judgment. See Dallas County Cmty. Coll. Dist. v. Bolton, 185 S.W.3d 868, 878-79 (Tex. 2005); Cooper v. Cochran, 288 S.W.3d 522, 533 (Tex. App.-Dallas 2009, r. 53.7(f) motion granted) (op. on reh'g); Deer Creek Ltd. v. N. Am. Mortgage Co., 792 S.W.2d 198, 200 (Tex. App.-Dallas 1990, no writ). The threat must be imminent and the party must have no present means of protection. See Bolton, 185 S.W.3d at 879; Cooper, 288 S.W.3d at 533; Deer Creek, 792 S.W.2d at 200. Duress must be shown from the acts or conduct of the party accused of duress, not the emotions of the purported victim. See Brown v. Cain Chem., Inc., 837 S.W.2d 239, 244 (Tex. App.-Houston [1st Dist.] 1992, writ denied). The burden to prove duress is on the party claiming it. Tex. R. Civ. P. 94; Cropper v. Caterpillar Tractor Co., 754 S.W.2d 646, 650 (Tex. 1988). Generally, what constitutes duress is a question of law, but whether duress exists under a particular set of circumstances is a fact question. See Wright v. Sydow, 173 S.W.3d 534, 544 (Tex. App.-Houston [14th Dist.] 2004, pet. denied). SOURCE: 05-08-00939-CV (Dallas Court of Appeals) (2/26/10)

Usury (excessive interest) claim elements

The essential elements of a usurious transaction are: "(1) a loan of money, (2) an absolute obligation to repay the principal, and (3) the exaction of a greater compensation than allowed by law for the use of the money by the borrower." First Bank v. Tony's Tortilla Factory, Inc., 877 S.W.2d 285, 287 (Tex. 1994). The Texas Finance Code defines the term "loan" as "an advance of money that is made to or on behalf of an obligor, the principal amount of which the obligor has an obligation to pay the creditor," and an "obligor" is "a person to whom money is loaned or credit is otherwise extended." TEX. FIN. CODE ANN. § 301.002(a)(10), (13) (Vernon 2006). A "creditor" is "a person who loans money or otherwise extends credit." See TEX. FIN. CODE ANN. § 301.002(a)(3) (Vernon 2006). Section 305.004 provides for additional monetary damage if a creditor charges and receives more than twice the legal rate of interest. TEX. FIN. CODE ANN. § 305.004 (Vernon 2006). Compare with § 305.003 (states creditor liable if he or she "charges or receives" usurious interest). SOURCE: 06-09-00009-CV (6th Court of Appeals) (2/26/10)

Texas Theft Liability Act (TTLA) Civil Claim Based on Definition of Offense in Criminal Code

CIVIL LIABILITY (STATUTORY) PREDICATED ON THEFT OF PERSONAL PROPERTY Under the Texas Theft Liability Act, an individual, corporation, or other "person" who commits theft is liable for the damages resulting from the theft. Tex. Civ. Prac. & Rem. Code Ann. §§ 134.001-.005. Theft is defined as "unlawfully appropriating property or unlawfully obtaining services" as described by certain sections of the penal code. Id. § 134.002. The section at issue here is section 31.03, which states (a) A person commits an offense if he unlawfully appropriates property with intent to deprive the owner of property. (b) Appropriation of property is unlawful if: (1) it is without the owner's effective consent; (2) the property is stolen and the actor appropriates the property knowing it was stolen by another; or (3) property in the custody of any law enforcement agency was explicitly represented by any law enforcement agent to the actor as being stolen and the actor appropriates the property believing it was stolen by another. Tex. Penal Code Ann. § 31.03 (Vernon Supp. 2009). SOURCE: 05-08-01521-CV (Dallas Court of Appeals) (2/26/10)

Wednesday, February 24, 2010

Tortious Interference with Contract: What are the elements?

PROVING TORT OF TORTIOUS INTERFERENCE WITH EXISTING CONTRACT The elements of tortious interference with contract are (1) existence of a contract subject to interference, (2) willful and intentional interference, (3) interference that proximately caused damage, and (4) actual damage or loss. Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex. 1998). SOURCE: 14-08-00019-CV (14th Court of Appeals)(2/23/2010) (No liability for tortious interference where underlying contract not proven)

Was a contract validly formed? Was there a meeting of the minds?

PROVING FORMATION OF A BINDING CONTRACT To prevail on a breach-of-contract claim, a plaintiff must prove (1) a valid contract existed between the plaintiff and the defendant, (2) the plaintiff tendered performance or was excused from doing so, (3) the defendant breached the terms of the contract, and (4) the plaintiff sustained damages as a result of the defendant’s breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex. App.—Houston [14th Dist] 2008, no pet.). In its motion for summary judgment, ConocoPhillips asserted the evidence conclusively negated the existence of a valid contract because the parties did not have a meeting of the minds; i.e. offer and acceptance. Among other elements, a party must prove offer and acceptance to demonstrate existence of a valid contract. DeClaire v. G & B Mcintosh Family Ltd. P’ship, 260 S.W.3d 34, 44 (Tex. App.—Houston [1st Dist.] 2008, no pet.); Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555–56 (Tex. App.—Houston [14th Dist.] 2002, no pet.). A “meeting of the minds” is “merely a mutuality subpart of the offer and acceptance elements.” Domingo v. Mitchell, 257 S.W.3d 34, 40 (Tex. App.—Amarillo 2008, pet. denied). Although whether the parties intended to be bound is often a question of fact, it may be determined as a matter of law. See Foreca, S.A. v. GRD Devel. Co., 758 S.W.2d 744, 746 (Tex. 1988) SOURCE: WTG Gas Processing, LP v. ConocoPhillips Company (Tex.App.- Houston [14th Dist.] Feb. 23, 2010)(Seymore)(breach of contract and tortious-interference claims, no contract formed, meeting of the minds on material terms, statute of frauds, summary judgment affirmed)

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