Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Friday, December 16, 2011

Texas Supreme Court releases gusher of new opinions, including an oil-and-gas related one

  
Some of the new opinions contain points of law relevant to this blawg (e.g., governmental immunity & prospective injunctive relief exception, limitations tolling theories, availability of declaratory relief), but can't be digested on the run. In the meantime, here is a list with excerpts (mostly introductory paragraphs and conclusions) from the Court's opinions in the 11 cases:  
       
TEX. SUP. CT. UPDATE: TABLE OF CASES DECIDED DECEMBER 16, 2011 (and one opinion on motion for rehearing)
    

[Case style with opinion snippets and procedural history, i.e. case in the court below]
[Photos added 12/20]
       
City of Dallas v. Parker, No. 07-0288 (Tex. Dec. 16, 2011)(public employment, immunity of governmental entities)
 
Seal of the City of Dallas in front of Cityhall

This appeal involves issues of governmental immunity from suit. With the exception that this matter is a class action, which does not affect our analysis or conclusions, and one argument that we address separately, the material facts, procedural background, issues, and arguments presented are similar to those we considered in City of Dallas v. Albert, ___ S.W.3d ___ (Tex. 2011). Thus, our conclusions and holdings are the same as those in Albert.

In addition to arguments made in Albert and addressed above, the Officers in this case assert that the City’s immunity from suit is waived because the suit implicitly involves the validity of pay resolutions adopted by the city council. See TEX. CIV. PRAC. & REM. CODE § 37.006(b) (“In any proceeding that involves the validity of a municipal ordinance . . . the municipality must be made a party . . . .”). However, the Officers’ pleadings do not support this contention. Their pleadings reference the ordinance as having become a term of their employment contracts and two resolutions as possible bases for calculating their damages. They do not question the validity of either the ordinance or a resolution.
 
We reverse the judgment of the court of appeals and remand the case to the trial court for further proceedings.
 
CITY OF DALLAS v. DAVID S. MARTIN AND GEORGE G. PARKER, ET AL.; from Rockwall County; 5th district (05-03-01310-CV, 214 SW3d 638, 12-21-06) 2 petitions

The Court reverses the court of appeals' judgment and remands the case to the trial court.
 
Justice Phil Johnson delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Hecht, Justice Wainwright, Justice David Medina, Justice Paul Green, Justice Eva Guzman, and Justice Lehrmann joined.
 
Justice Willett delivered a dissenting opinion
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
  
Lowell v. City of Baytown, TX, No. 07-1011 (Tex. Dec. 16, 2011)(firefighter litigation, governmental entities, no immunity to claim prospective injunctive relief brought against government official in official capacity)
  
Petitioners are firefighters for the City of Baytown. They sued the City, claiming that it improperly calculated pay for certain assignments in violation of the Firefighter and Police Civil Services Act. The firefighters sought declaratory and injunctive relief, as well as “all pay and benefits lost as a result of Defendant’s failure to properly pay Plaintiffs during temporary assignment of higher-classified duties.” The firefighters also requested prejudgment interest on back pay, attorney’s fees, costs, and postjudgment interest. The City filed a jurisdictional plea asserting governmental immunity, which the trial court granted.
 
The court of appeals also reversed the trial court’s judgment dismissing the firefighters’ claims for prospective declaratory and injunctive relief, holding that such claims did not implicate governmental immunity. Although the court of appeals correctly concluded that immunity does not preclude certain prospective claims, we recently held that such actions must be brought against the relevant government officials, rather than the governmental entity itself. See Heinrich, 284 S.W.3d at 373 (observing that “these suits cannot be brought against the state, which retains immunity, but must be brought against the state actors in their official capacity. This is true even though the suit is, for all practical purposes, against the state.”). Here, the firefighters named the City rather than city officials in their official capacity as Heinrich requires, but their pleading predated Heinrich.
  

A Question of Identifying to Proper Target
In addition to remanding to permit the firefighters to replead in light of chapter 271, our remand will also permit the firefighters to replead in light of Heinrich and seek appropriate relief, if any, against the relevant city officials.  
Accordingly, we grant the firefighters’ petition for review and, without hearing oral argument, reverse the court of appeals’ judgment and remand the case to the trial court for further proceedings consistent with this opinion. TEX. R. APP. P. 59.1, 60.2(d).

KEITH LOWELL, ET AL. v. CITY OF BAYTOWN, TEXAS; from Harris County; 1st district (01-04-00548-CV, 264 SW3d 31, 08-09-07)

Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and remands the case to the trial court.
 
Per Curiam Opinion
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site


Oh, the Quirks of Federalism
 Minton v. Gunn, No. 10-0141 (Tex. Dec. 16, 2011)(patent litigation)
    
This case arises out of patent infringement litigation. We consider whether federal courts possess exclusive subject-matter jurisdiction over state-based legal malpractice claims that require the application of federal patent law. The federal patent issue presented here is necessary, disputed, and substantial within the context of the overlying state legal malpractice lawsuit. Additionally, the patent issue may be determined without creating a jurisdictional imbalance between state and federal courts. We conclude that exclusive federal jurisdiction exists in this case. Accordingly, without reaching the merits of the legal malpractice claim, we reverse the court of appeals’ judgment and dismiss this case.

CONCLUSION: Because we determine that the application of the experimental use exception to the on-sale bar is a necessary, disputed, and substantial element of Minton’s state-based legal malpractice claim, and because the federal courts are capable of addressing this issue without disrupting the jurisdictional balance existing between state and federal courts, we hold that Minton’s claim has triggered exclusive federal patent jurisdiction. Accordingly, we do not reach the merits of Minton’s claims, and we reverse the court of appeals’ judgment and dismiss the case.
 
VERNON F. MINTON v. JERRY W. GUNN, INDIVIDUALLY, WILLIAMS SQUIRE & WREN, L.L.P., JAMES E. WREN, INDIVIDUALLY, SLUSSER & FROST, L.L.P., WILLIAM C. SLUSSER, INDIVIDUALLY, SLUSSER WILSON & PARTRIDGE, L.L.P., AND MICHAEL E. WILSON, INDIVIDUALLY; from Tarrant County; 2nd district (02-06-00443-CV, 301 SW3d 702, 10-08-09)
 
The Court reverses the court of appeals' judgment and dismisses the case.
 
Justice Paul Green delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Wainwright, Justice Phil Johnson , and Justice Lehrmann joined.
 
Justice Eva Guzman delivered a dissenting opinion, in which Justice David Medina and Justice Willett joined.
 
(Justice Hecht not sitting)
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
 
  
In Re SCI, No. 10-0155 (Tex. Dec. 16, 2011)(arbitration, procedure to select arbitrator)
  
This mandamus proceeding arises from an arbitration agreement governed by the Federal Arbitration Act (FAA). The parties entered into a contract for interment rights and services. The contract obligated the parties to arbitrate this dispute over the care and maintenance of the cemetery.
   
Everything with dignity -
including selection of arbitrators

The arbitration agreement provides that an arbitrator would either be selected by mutual agreement of the parties or appointed by the American Arbitration Association (AAA). The parties failed to agree to an arbitrator and the trial court appointed an arbitrator without allowing a reasonable opportunity to procure an appointment by AAA. We conclude that the trial court abused its discretion and conditionally grant the petition for writ of mandamus.
 
We conclude that the contract is not ambiguous on this point. If the parties cannot agree on an arbitrator, the contract requires that they use AAA to appoint the arbitrator.

IN RE SERVICE CORPORATION INTERNATIONAL AND SCI TEXAS FUNERAL SERVICES, INC. D/B/A MAGIC VALLEY MEMORIAL GARDENS; from Hidalgo County; 13th district (13-09-00681-CV, ___ SW3d ___, 02-17-10) stay order issued March 12, 2010, lifted
 
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
 
Per Curiam Opinion
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

     
In re Service Corp. Inc., No. 10-0158 (Tex. Dec. 16, 2011)(appointment of arbitrator based on agreement on method, rather than selection by the trial court judge) (mandamus granted)
  
IN RE SERVICE CORPORATION INTERNATIONAL AND SCI TEXAS FUNERAL SERVICES, INC., JOINTLY D/B/A MONT META MEMORIAL GARDENS; from Cameron County; 13th district (13-10-00026-CV, ___ SW3d ___, 02-23-10)
 
Norma Sandoval and her sister, Nora Martinez, jointly filed suit against Service Corporation International (SCI) alleging fraud, deceptive trade practices, and other tort claims arising from their respective interment rights and services contracts for family burial plots at Mont Meta Memorial Park.1 The parties agree the dispute was required to be arbitrated pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-16.

Grave Problems ....

... go to the arbitrator - But which one?
SCI asserts that the trial court’s appointment of an arbitrator interfered with the contractual rights of the parties and was not authorized by the Federal Arbitration Act. Without reaching the parties’ arguments as to which party or parties have the burden of approaching the AAA to appoint an arbitrator, we agree with SCI that the trial court’s appointment was an abuse of discretion from which there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004). In a related case also decided today, In re Service Corp. International & SCI Tex. Funeral Services, Inc. d/b/a Magic Valley Memorial Gardens, we analyzed an identical arbitration provision. __ S.W.3d __ (Tex. 2011). Following the rationale in Magic Valley Memorial Gardens, we conclude the trial court abused its discretion by appointing an arbitrator instead of following the agreed-upon method of selection outlined in the contract.
As a matter of law, the two month delay in the selection of an arbitrator in this case, by itself, does not establish a lapse or failure of the parties to avail themselves of the contractual selection method. See 9 U.S.C. § 5; Magic Valley Memorial Gardens, __ S.W.3d __ (Tex. 2011). Accordingly, without hearing oral argument, we conditionally grant SCI’s petition for writ of mandamus and direct the trial court to vacate its prior order appointing David Calvillo as arbitrator. TEX. R.APP. P. 59.1, 52.8(c). We are confident the trial court will comply, and the writ will issue only if it fails to do so.
  
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
  
Per Curiam Opinion
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
  
  
Etan Industries, Inc. v. Lehmann, No. 10-0318 (Tex. Dec. 16, 2011)(limitations bar, propriety of declaratory relief, award of attorney's fees on declaratory judgment claim, mootness doctrine)
 
Defendant Etan Industries, Inc. contends that the tort claims against it are barred by the two year statute of limitations. It also argues that the declaratory judgment against it was unwarranted.
  
We agree and accordingly reverse and render judgment for Etan.
  
We agree with Etan that the Lehmanns’ common-law tort claims were barred by limitations. Etan argues that the claims for declaratory judgment were moot because Etan had removed its lines from the Lehmanns’ properties prior to trial. We agree. We have recently noted that a request for declaratory judgment is moot if the claim presents “no live controversy.” Tex. A & M Univ.-Kingsville v. Yarbrough, 347 S.W.3d 289, 290 (Tex. 2011).
 
ETAN INDUSTRIES, INC. AND ETAN INDUSTRIES, INC., D/B/A CMA CABLEVISION AND/OR CMA COMMUNICATIONS v. RONALD LEHMANN AND DANA LEHMANN; from Lee County; 3rd district (03-07-00539-CV, 308 SW3d 489, 03-26-10)
  
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and renders judgment.
  
Per Curiam Opinion
  
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

    
Shell Oil Co. v. Ross, No. 10-0429 (Tex. Dec. 16, 2011)(oil, gas and natural resources law, limitations and discovery rule, fraudulent concealment, accrual of cause of action, starting date for running of limitations)

The Courthouse clock had been ticking
This case involves a dispute concerning alleged underpayments of gas royalty. We must decide whether limitations barred a royalty owner’s claims against the operator of the field. We hold that the fraudulent concealment doctrine does not apply to extend limitations as a matter of law when the royalty underpayments could have been discovered from readily accessible and publicly available information before the limitations period expired. When, as in this case, the information was publicly available and readily accessible to the royalty owner during the applicable time period, a royalty owner who fails to take action does not use reasonable diligence as a matter of law. It has long been the law that the discovery rule does not apply to defer the accrual of royalty owners’ claims for underpayments when the injury could have been discovered through the exercise of due diligence. Accordingly, because the parties do not dispute that the pertinent information was readily accessible and publicly available, the royalty owner’s claims are time-barred as a matter of law.
 
Conclusion: 
We hold that evidence conclusively established that Shell’s alleged fraud could have been discovered by the Rosses through the exercise of reasonable diligence. Accordingly, we reverse the court of appeals’ judgment and render judgment for Shell.
  
SHELL OIL COMPANY; SWEPI LP D/B/A SHELL WESTERN E&P, SUCCESSOR IN INTEREST TO SHELL WESTERN E&P, INC. v. RALPH ROSS; from Harris County; 1st district (01-08-00713-CV, ___ SW3d ___, 02-25-10)
  
The Court reverses the court of appeals' judgment and renders judgment.
  
Justice Lehrmann delivered the opinion of the Court.
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
 
  
Americo Life, Inc. v. Myer, No. 10-0734 (Tex. Dec. 16, 2011)(selection of arbitrators on panel, neutrality of chosen arbitrator)

This case concerns an arbitration provision that allows each party to appoint one arbitrator to a panel, subject to certain requirements. At issue is whether Americo Life, Inc. waived its objection to the removal of the arbitrator it selected. The underlying dispute concerned the financing mechanism for Americo’s purchase of several insurance companies from Robert Myer.1 Pursuant to the financing agreement, Americo and Myer submitted their dispute to arbitration under American Arbitration Association (AAA) rules. The arbitrators found in favor of Myer, and Americo filed a The court of appeals is correct that Americo did not expressly state that arbitrators were not required to be neutral. 315 S.W.3d at 75–76. However, Americo argued that the AAA requirements did not apply, that the only applicable requirements were that they be knowledgeable and independent businesspersons or professionals, and that Figari met these qualifications. Americo properly preserved this argument. Therefore, without hearing oral argument, TEX. R.APP. P. 59.1, we reverse the court of appeals’ judgment and remand the case to the court of appeals for further proceedings consistent with this opinion.
  
AMERICO LIFE, INC., AMERICO FINANCIAL LIFE AND ANNUITY INSURANCE COMPANY, GREAT SOUTHERN LIFE INSURANCE COMPANY, THE OHIO STATE LIFE INSURANCE COMPANY, AND NATIONAL FARMERS' UNION LIFE INSURANCE COMPANY v. ROBERT L. MYER AND STRIDER MARKETING GROUP, INC.; from Dallas County; 5th district (05-08-01053-CV, 315 SW3d 72, 10-22-09)
  
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and remands the case to that court.
  
Per Curiam Opinion
  
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
   

In re Jeffrey Cook, No. 10-0855 (Tex. Dec. 16, 2011)(reason for grant of new trial required, even if original judge replaced)(mandamus granted).
   
The relator asks us to decide whether a trial court abused its discretion when it issued an order granting a motion for new trial “based on all grounds in the motion.” While this case was pending, however, the judge who signed the order resigned, and we remanded the case pursuant to Texas Rule of Appellate Procedure 7.2(b). The successor trial judge then entered an order stating only that his predecessor’s ruling “should remain unchanged.” We recently held that a successor trial court’s order reaffirming the original trial court’s grant of a motion for new trial was “effectively an order refusing to enter judgment on the jury verdict and affects the rights of the parties no less than did the orders of the original judge,” and we concluded that the relator in that case was “entitled to know those reasons just as much as it would be entitled to know the reasons for the orders entered by the former trial judge.” In re Columbia Med. Ctr. of Las Colinas, 290 S.W.3d 204, 214 (Tex. 2009). Accordingly, we conditionally granted mandamus relief, directing the successor trial court to specify the reasons it refused to enter judgment on the jury verdict and ordered a new trial. Id. at 215. Because the successor trial court judge in this case did not state sufficient reasons for his ruling, contrary to our holding in In re Columbia, we conditionally grant relief.
 
Without hearing oral argument, TEX. R. APP. P. 52.8(c), we conditionally grant Jeffrey’s petition for writ of mandamus and direct the successor trial court to specify the reasons why it refused to enter judgment on the jury verdict. See In re Columbia, 290 S.W.3d at 215 (requiring reasons to be “clearly identified and reasonably specific”).
  
We are confident that the trial court will comply, and our writ will issue only if it does not.
  
IN RE JEFFREY COOK; from Tarrant County; 2nd district (02-10-00068-CV, ___ SW3d ___, 06-08-10)
  
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the writ of mandamus.
  
Per Curiam Opinion
 
(Justice Lehrmann not sitting)

Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

   
Ryland Enterprise, Inc. v. Weatherspoon, No. 11-0189 (Tex. Dec. 16, 2011)(appellate procedure, timeliness of appeal, extension of deadline to file notice of appeal)
    
In this case we must decide whether the court of appeals erred in dismissing Ryland Enterprise, Inc.’s appeal as untimely. Because an arguable interpretation of our procedural rules allowed Ryland’s premature, pre-judgment motion for judgment notwithstanding the verdict (JNOV motion) to extend the appellate timetable to ninety days, the court of appeals erred in dismissing the appeal. Accordingly, pursuant to Texas Rule of Appellate Procedure 59.1 without hearing oral argument, we reverse the court of appeals’ judgment and remand the case to that court.
   
In the Texas Supreme Court, it's usually the corporate
defendants that get a break

On the facts of this case, an arguable interpretation of appellate rules 26.1(a) and 27.2 and civil rules 329b and 306c allowed Ryland’s motion, though filed pre-judgment, to nevertheless extend the appellate timetable to ninety days. Ryland’s sixty-fifth-day notice of appeal was therefore timely, and the court of appeals erred in dismissing the appeal. Pursuant to Texas Rule of Appellate Procedure 59.1, we reverse the court of appeals’ judgment without hearing oral argument and remand to that court for consideration of Ryland’s appeal.
  
RYLAND ENTERPRISE, INC. v. VICKIE WEATHERSPOON; from Harris County; 1st district (01-10-00715-CV, ___ SW3d ___, 01-27-11)
 
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Court reverses the court of appeals' judgment and remands the case to that court.

Per Curiam Opinion
 
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site
  
 
MOTIONS FOR REHEARING DENIED -- WITH OPINION -- IN:
     
Marsh USA, Inc. v. Cook, No. 09-0558 (Tex. Dec. 16, 2011) (opinion on rehearing)(noncompetes, consideration, enforceability)
 
We deny Rex Cook’s motion for rehearing. We withdraw our opinion of June 24, 2011 and substitute the following in its place.
  
In this case, we decide whether a covenant not to compete signed by a valued employee in consideration for stock options, designed to give the employee a greater stake in the company’s performance, is unenforceable as a matter of law because the stock options did not give rise to an interest in restraining competition. We hold that, under the terms of the Covenants Not to Compete Act (Act), the consideration for the noncompete agreement (stock options) is reasonably related to the company’s interest in protecting its goodwill, a business interest the Act recognizes as worthy of protection. The noncompete is thus not unenforceable on that basis. We reverse the court of appeals’ judgment and remand to the trial court for further proceedings.

Go or No Go? - The signals from
the judiciary can be a challenge
  CONCLUSION: In this case, the covenant not to compete is “ancillary to or part of” an otherwise enforceable agreement because the business interest being protected (goodwill) is reasonably related to the consideration given (stock options). Section 15.50 requires that there be a nexus between the covenant not to compete and the interest being protected. TEX.BUS.&COM.CODE § 15.50(a). This requirement is satisfied by the relationship that exists here. We reverse the judgment of the court of appeals and remand to the trial court for further proceedings consistent with this opinion.
  
MARSH USA INC. AND MARSH & MCLENNAN COMPANIES, INC. v. REX COOK; from Dallas County; 5th district (05-08-00685-CV, 287 SW3d 378, 05-26-09)
  
The Court's opinion of June 24, 2011 is withdrawn and the opinion of this date is substituted. The concurring opinion by Justice Willet, the dissenting opinion by Justice Paul Green, and the judgment issued June 24, 2011, remain in place.
  
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

SOURCE: 
Supreme Court of Texas - Tex (2011) Opinions released December 16, 2011 (link to court here)

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