Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Tuesday, June 28, 2011

Official Immunity Defense [affirmative defense invoked by governmental defendants]

OFFICIAL IMMUNITY OF PUBLIC OFFICIALS, OFFERS, GOVERNMENT EMPLOYEES

The affirmative defense of official immunity "is based on necessity of public officials to act in the public interest with confidence and without the hesitation that could arise from having their judgment continually questioned by extended litigation." Ballantyne v. Champion Builders, Inc., 144 S.W.3d 417, 424 (Tex. 2004). The underlying policy is that officials should be afforded some leeway to err because "the risk of some error is preferable to intimidation from action at all." Id. at 424 (citing Wood v. Strickland, 420 U.S. 308, 319-21 (1975)). To that end, official immunity shields officials "from being forced to defend their decisions that were reasonable when made, but upon which hindsight has cast a negative light." Telthorster v. Tennell, 92 S.W.3d 457, 461 (Tex. 2002). "Police officers' particular need for [official] immunity is well recognized: 'nowhere else in public service is official immunity more appropriate or necessary than in police work. In their routine work, police officers must be free to make split-second judgments . . . based on their experience and training, without fear of personal liability.'" Id. (quoting Travis v. City of Mesquite, 830 S.W.2d 94, 103 (Tex. 1992) (Cornyn, J., concurring)).

Elements of Official Immunity Defense: What does the Defendant have to establish?

An officer's actions are shielded by official immunity when the following elements are proven: (1) the officer was performing a "discretionary" function or duty, (2) within the scope of his authority, (3) in "good faith." Ballantyne, 144 S.W.3d at 422; Telthorster, 92 S.W.3d at 461; Chambers, 883 S.W.2d at 653. Consequently, to prevail on summary judgment based on Garner's official immunity from liability arising from his collision with Albarran, the City had the burden to conclusively establish that, with respect to Garner's actions from which his liability would arise: (1) Garner was performing a "discretionary" function, (2) within the scope of his authority, (3) in "good faith." See Telthorster, 92 S.W.3d at 461.

What is considered discretionary? 

"Discretionary" functions involve "personal deliberation, decision, and judgment," in contrast to "ministerial" acts, which "require obedience to orders or the performance of a duty to which the actor has no choice." Chambers, 883 S.W.2d at 654; see Commissioner of the Gen. Land Office v. Smith, 5 Tex. 471, 479 (1849) ("where the act to be done involves the exercise of discretion or judgment in determining whether the duty exists, it is not to be deemed merely ministerial").

An act is also said to be ministerial if "the law prescribes and defines the duty to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment." Chambers, 883 S.W.2d at 654 (quoting Rains v. Simpson, 50 Tex. 495, 501 (1878)). In determining whether a government employee's action is "discretionary" versus "ministerial," the proper focus is "on whether the officer is performing a discretionary function, not on whether the officer has discretion to do an allegedly wrongful act while discharging that function." Id. at 653 (emphases added).

Texas courts have recognized that a police officer's operation of a motor vehicle may be deemed a discretionary function in certain situations. These situations include an officer's deciding to undertake and conducting of a high-speed pursuit of a suspect, see Chambers, 883 S.W.2d at 655, and an officer's decision to violate traffic laws in order to quickly reach a scene of suspected criminal activity and assist another officer there, see Harless v. Niles, 100 S.W.3d 390, 398 (Tex. App.--San Antonio 2002, no pet.). See also City of San Angelo Fire Dep't v. Hudson, 179 S.W.3d 695, 704 (Tex. App.--Austin 2005, no pet.) (manner of firefighters' driving in response to emergency call was discretionary function as matter of law); City of Houston v. Flaniken, 108 S.W.3d 555, 557 (Tex. App.--Houston [14th Dist.] 2003, no pet.) (manner of operating ambulance in response to emergency situation was discretionary function as matter of law). Although these decisions sometimes speak in apparent circularities--e.g., a police officer performs a "discretionary" function when responding to an "emergency" because responding to an "emergency" entails discretion and judgment--their underlying principle seems to be that when a police officer is performing certain law enforcement functions involving discretion and judgment (e.g, pursuit and detention of suspects), it follows that this discretion and judgment can extend to whether and how the officer utilizes a motor vehicle in performing these functions. See Chambers, 883 S.W.2d at 654; Harless, 100 S.W.3d at 397-98; see also Hudson, 179 S.W.3d at 704; Flaniken, 108 S.W.3d at 557.

In Chambers, for example, an officer's high-speed pursuit of a suspect who ran a red light was held to be a discretionary function because the officer had to elect whether to undertake pursuit, and "[b]eyond the initial decision to engage in the chase, a high speed pursuit involves the officer's discretion on a number of levels, including, which route should be followed, at what speed, should back-up be called for, and how closely should the fleeing vehicle be pursued." 883 S.W.2d at 655. In Harless, officers proceeding to the scene of "suspicious activity" to assist a fellow officer similarly had discretion to determine, in the first instance, whether to respond to a report of ongoing criminal activity. 100 S.W.3d at 398. These circumstances required officers to respond using personal deliberation or exercise professional expertise, decision, or judgment. See id. at 397.

SOURCE: Austin Court of Appeals 03-10-00328-CV - 6/23/11

At-will employment & claims of fraud, fraudulent inducement, and breach of fiduciary duty

NO DETRIMENTAL RELIANCE ON PROMISE OF FUTURE EMPLOYMENT IN THE EMPLOYMENT-AT-WILL CONTEXT Both common-law fraud and fraudulent inducement require proof of detrimental reliance. See Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 179 (Tex. 1997). In the employment context, courts have held that an employee cannot establish justifiable reliance on alleged promises of continued employment when the employment is at-will. See, e.g., Miller v. Raytheon Aircraft Co., 229 S.W.3d 358, 379, 381 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (holding promissory estoppel and fraud claims were barred because of at-will employment); Brown v. Swett & Crawford of Tex., Inc., 178 S.W.3d 373, 379-80 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (holding status as at-will employee precluded claim for fraudulent inducement in wrongful termination lawsuit). As this court [14th CoA] stated in Collins v. Allied Pharmacy Management, Inc.: A promise to provide employment which is subject to termination at any time or for any reason does not provide any assurances about the employer’s future conduct, and does not provide a basis for detrimental reliance as a matter of law. 871 S.W.2d 929, 937 (Tex. App.—Houston [14th Dist.] 1994, no writ). We agree with the trial court that the same reasoning bars [ FORMER EMPLOYER-PLAINTIFF ] from claiming that it justifiably relied on promises or statements of intent by its at-will employee to remain employed. See Collins, 871 S.W.2d at 937-38 (“An employee may quit at any time, or may never start performance and suffer no liability. . . . [E]mployees are not indentured servants.”). BREACH OF FIDUCIARY DUTY The elements of a breach of fiduciary duty claim are (1) a fiduciary relationship between the plaintiff and defendant, (2) a breach by the defendant of his fiduciary duty to the plaintiff, and (3) an injury to the plaintiff or benefit to the defendant as a result of the defendant’s breach. Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—Houston [14th Dist.] 2008, pet. denied). DETRIMENTAL RELIANCE NOT AN ELEMENT OF BoFD Unlike a fraud claim, a claim for breach of fiduciary duty does not require a plaintiff to establish reliance. See id. (listing elements of the claims). Consequently, the fact that at-will employment precludes [ PLAINTIFF ] from establishing justifiable reliance for purposes of its fraud claim on alleged statements by [ EMPLOYEE ] regarding future employment with [ DEFENDANT ] does not bar its breach of fiduciary duty claim. See Wilson, 305 S.W.3d at 74-75 (although similarity existed “in the abstract” between the elements of the two claims, claims had different elements and thus exception did not apply); see also Lundy, 260 S.W.3d at 506-07 (fraud and breach of fiduciary duty claims, although based on the same set of facts, were separate theories of liability for which plaintiff had to make an election of remedies). SOURCE: Houston Court of Appeals - 14-10-00513-CV - 6/28/11

Civil Conspiracy: What amounts to actionable civil conspiracy under Texas law?

CIVIL CONSPIRACY LEGALLY DEFINED

A civil conspiracy consists of a combination by two or more persons to accomplish an unlawful purpose or a lawful purpose by unlawful means. Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996).

ELEMENTS OF CIVIL CONSPIRACY CAUSE OF ACTION
The elements of civil conspiracy are (1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex. 2005); Boales v. Brighton Builders, Inc., 29 S.W.3d 159, 164 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).

SOURCE: Houston Court of Appeals - 14-10-00513-CV - 6/28/11

Monday, June 27, 2011

Negligent Activity and Premises Defect Claim: Is there a difference?

CAUSE OF ACTION FOR NEGLIGENT ACTIVITY ON PREMISES The Texas Supreme Court has consistently recognized that negligent-activity claims and premises-defect claims involve two independent “theories” of recovery that fall within the scope of negligence. See Gen. Elec. Co. v. Moritz, 257 S.W.3d 211, 214–15 (Tex. 2008) (distinguishing between “negligent-activity claim” or “theory” and “premises-condition claim” or “theory”); Clayton W. Williams, Jr., Inc. v. Olivo, 952 S.W.2d 523, 527 (Tex. 1997) (stating that there are “two types of negligence in failing to keep the premises safe: that arising from an activity on the premises, and that arising from a premises defect”); see also Mayer v. Willowbrook Plaza Ltd. Partnership, 278 S.W.3d 901, 909 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (stating that “[n]egligent activity and premises defect are independent theories of recovery”). Negligent activity claims and premises liabiltiy claims distinguished: Commission vs. omission Although “[t]he lines between negligent activity and premises liability are sometimes unclear,” the court has continued to recognize the distinction between these two claims, explaining that “negligent activity encompasses a malfeasance theory based on affirmative, contemporaneous conduct by the owner that caused the injury, while premises liability encompasses a nonfeasance theory based on the owner’s failure to take measures to make the property safe.” Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 776 (Tex. 2010). Activity as opposed to condition as cause of injury Recovery on a negligent-activity claim requires that the plaintiff have been injured by or as a contemporaneous result of the “activity itself” rather than by a “condition” created by the activity. Olivo, 952 S.W.2d at 527; Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992). Although an owner or occupier generally does not owe a duty to ensure that an independent contractor performs its work in a safe manner, an owner or occupier “who retains a right to control the contractor’s work may be held liable for negligence in exercising that right” under the negligent-activity theory. Moritz, 257 S.W.3d at 214 (emphasis added). SOURCE: Houston Court of Appeals - 01-09-01089-CV - 6/23/11

Liability for Premises Defects & Independent Contractors

CATEGORIES OF PREMISES-DEFECT CLAIMS UNDER TEXAS LAW There are two types of premises defects for which an independent contractor’s employee may seek to hold a premises owner or general contractor liable. Clayton W. Williams, Jr., Inc. v. Olivo, 952 S.W.2d 523, 527 (Tex. 1997). Existing dangerous conditions on premises not created by the contractor The first category includes those defects that exist on a premises when a business invitee enters for business purposes or are created through some means unrelated to the activity of the injured employee or his employer. Id.; Shell Chem. Co. v. Lamb, 493 S.W.2d 742, 746 (Tex. 1973). When dangerous conditions do not arise through the independent contractor’s work activity, the owner or general contractor has a duty to inspect the premises and warn about the dangerous conditions of which the owner or general contractor knows or should know. Moritz, 257 S.W.3d at 214–15; Olivo, 952 S.W.2d at 527. An independent contractor is “under no duty to inspect the premises forconcealed dangers” because independent contractors may “anticipate” that the owner or general contractor “will discharge [its] duty to inspect the premises and warn of any dangerous condition which is not open and obvious.” Lamb, 493 S.W.2d at 746 (emphasis added); see also Moritz, 257 S.W.3d at 215 (stating that “[g]enerally, a landowner is liable to employees of an independent contractor only for claims arising from a pre-existing defect rather than from the contractor’s work, and then only if the pre-existing defect was concealed”). The rationale for this duty is that the owner or general contractor is in a “superior position to know of or discover hidden dangerous conditions on his premises.”[5] Lamb, 493 S.W.2d at 746 (emphasis added). [5] When a hidden, dangerous condition exists on a premises at the time an independent contractor enters, or when it “exists through some means other than the [independent contractor’s] work activity on the premises,” the owner’s or general contractor’s duty to an independent contractor and its employees “may be discharged by an adequate warning to the [independent contractor] or one supervising his work.” Shell Chem. Co. v. Lamb, 493 S.W.2d 742, 747 (Tex. 1973). Independent contractors' work actitivity as cause of injury The second category of premises defects includes those defects an independent contractor, or its injured employee, create by its work activity. Dow Chem. Co. v. Bright, 89 S.W.3d 602, 606 (Tex. 2002); Olivo, 952 S.W.2d at 527. When the independent contractor creates a dangerous condition, the owner or general contractor ordinarily has no duty to warn the independent contractor’s employees of the premises defect. Olivo, 952 S.W.2d at 527. The rationale for this rule is that an owner or general contractor normally has no duty to ensure that an independent contractor performs its work in a safe manner. Id. In explaining why, under the first category, the duty owed by a premises owner or general contractor to an independent contractor is limited to concealed hazards, the Texas Supreme Court has recently explained that because an independent contractor “owes its own employees a nondelegable duty to provide them a safe place to work, safe equipment to work with, and warn them of potential hazards,” a premises owner that “hires an independent contractor generally expects the contractor to take into account any open and obvious premises defects in deciding how the work should be done, what equipment to use in doing it, and whether its workers need any warnings.” Moritz, 257 S.W.3d at 216–17. The court reasoned that “[p]lacing the duty on an independent contractor to warn its own employees or make safe open and obvious defects ensures that the party with the duty is the one with the ability to carry it out.” Id. (emphasis added). In Moritz, an independent contractor, on a daily basis, loaded trailers with supplies from a General Electric warehouse. Id. at 213–14. Moritz, the independent contractor, sustained personal injuries in the course of securing the supplies after a rubber bungee cord that he was using broke and he fell off the side of a loading ramp. Id. Based upon the absence of handrails on the loading ramp, Moritz brought a premises-defect claim against GE. Id. at 215. The court, noting that the absence of handrails was “obviously a pre-existing condition and obviously not a concealed hazard,” concluded that GE had “no duty to warn Moritz that a ramp [that] he had been using for more than a year had no handrails.” Id. at 216. Although the court acknowledged that GE, as the premises owner, “had a duty to exercise care with respect to matters over which it exercised control,” it reasoned that Moritz’s premises-defect claim failed because GE “did not control where or how Moritz chose to secure his load.” Id. at 217. The court noted that “independent contractors are hired for special projects that often entail special expertise, and can be expected to use whatever equipment or precautions are necessary so long as a hazard is not concealed.” Id. (emphasis added). SOURCE: Houston Court of Appeals - 01-09-01089-CV - 6/23/11

Saturday, June 25, 2011

TCHRA: Types of Discrimination Claims under Texas anti-discrimination act (employment)

TCHRA CLAIM [discrimination in employment under state law] [TCHRA=TEXAS COMMISSION ON HUMAN RIGHTS ACT] Because the TCHRA’s stated purpose is to “provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments,” Texas courts apply analogous federal case law when interpreting the Texas statute. Id. § 21.001(1); Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 476 (Tex. 2001). There are two types of Title VII employment discrimination cases. Quantum Chem., 47 S.W.3d at 476. The first is the “pretext” case, in which the plaintiff claims the employer’s stated reason for the adverse action was a pretext for discrimination. Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 252–53 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–04 (1973). In a pretext case, federal and Texas courts traditionally follow the McDonnell Douglas-Burdine framework for allocation of proof. E.g., Shackelford v. Deloitte & Touche, LLP, 190 F.3d 398, 404 n.2 (5th Cir. 1999); Quantum Chem., 47 S.W.3d at 479–80; Claymex Brick & Tile, Inc. v. Garza, 216 S.W.3d 33, 35 (Tex. App.—San Antonio 2006, no pet.). Under the McDonnell Douglas-Burdine framework, the plaintiff-employee has the burden of producing evidence that raises an inference of discrimination. Russo v. Smith Int’l, Inc., 93 S.W.3d 428, 435 (Tex. App.—Houston [14th Dist.] 2002, pet. denied). The plaintiff’s burden at this stage “is not onerous.” Quantum Chem., 47 S.W.3d at 477 (quoting Burdine, 450 U.S. at 253). A prima facie case of age discrimination requires proof that the plaintiff (1) is at least forty years of age; (2) was discharged; (3) was qualified for the position from which he was discharged; and (4) was replaced by someone under forty, replaced by someone younger, or was otherwise discharged because of age. Russo, 93 S.W.3d at 435. If the plaintiff makes this showing, the burden then shifts to the defendant-employer to articulate a “legitimate, nondiscriminatory reason” for the plaintiff’s discharge. Quantum Chem., 47 S.W.3d at 477 (quoting McDonnell Douglas, 411 U.S. at 802). If the defendant can articulate such a reason, the presumption of discrimination created by the plaintiff’s prima facie showing is eliminated, and the burden shifts back to the plaintiff to show the defendant’s stated reason was a pretext for discrimination. Id. The Texas Supreme Court has held that under the TCHRA, a plaintiff need only prove that age discrimination was “a motivating factor” in the termination decision. Id. at 480. The second type of employment discrimination case is the mixed-motive case, in which the plaintiff has direct evidence of discrimination in the employment decision. Price Waterhouse v. Hopkins, 490 U.S. 228, 244–45 (1989). Whether a case will be classified as a pretext case or a mixed-motive case “depends entirely” on whether the plaintiff has direct evidence that discriminatory motives influenced the employer’s decision to terminate the plaintiff. Quantum Chem., 47 S.W.3d at 476. If the plaintiff has only circumstantial evidence that the employment decision was motivated by discrimination, the case will be classified as a pretext case “regardless of how many motives the employer had.” Id. at 477. SOURCE: San Antonio Court of Appeals - 04-10-00730-CV - 6/22/11

TCHRA Retaliation claim against Employer

RETALIATION CLAIM In an action for retaliation brought under the TCHRA [ Texas Commission on Human Rights Act, no Section 21 of the Labor Code ] , the plaintiff-employee must make a prima facie showing that: (1) he engaged in a protected activity, (2) an adverse employment action occurred, and (3) a causal link existed between the protected activity and the adverse action. Dias v. Goodman Mfg. Co., L.P., 214 S.W.3d 672, 676 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). Protected activities include: (1) opposing a discriminatory practice; (2) making or filing a charge; (3) filing a complaint; or (4) testifying, assisting, or participating in any manner in an investigation, proceeding, or hearing. Id. (citing TEX. LAB. CODE ANN. § 21.055). If the plaintiff makes this showing, the burden shifts to the defendant-employer to articulate a legitimate, nondiscriminatory reason for the adverse employment action. Id. SOURCE: San Antonio Court of Appeals - 04-10-00730-CV - 6/22/11 AGE DISCRIMINATION CLAIM Under the THCRA: An employer commits an unlawful employment practice if because of race, color, disability, religion, sex, national origin, or age the employer: (1) fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with compensation or the terms, conditions, or privileges of employment; or (2) limits, segregates, or classifies an employee or applicant for employment in a manner that would deprive or tend to deprive an individual of any employment opportunity or adversely affect in any other manner the status of an employee. TEX. LAB. CODE ANN. § 21.051 (West 2006). The TCHRA also provides: (a) Except as otherwise provided by this chapter, an unlawful employment practice is established when the complainant demonstrates that race, color, sex, national origin, religion, age, or disability was a motivating factor for an employment practice, even if other factors also motivated the practice, unless race, color, sex, national origin, religion, age, or disability is combined with objective job-related factors to attain diversity in the employer’s work force. (b) In a complaint in which a complainant proves a violation under Subsection (a) and a respondent demonstrates that the respondent would have taken the same action in the absence of the impermissible motivating factor, the court may grant declaratory relief, injunctive relief except as otherwise provided by this subsection, and attorney’s fees and costs demonstrated to be directly attributable only to the pursuit of a complaint under Subsection (a), but may not award damages or issue an order requiring an admission, reinstatement, hiring, promotion, or back pay. Id. § 21.125. Because the TCHRA’s stated purpose is to “provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments,” Texas courts apply analogous federal case law when interpreting the Texas statute. Id. § 21.001(1); Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 476 (Tex. 2001). SOURCE: San Antonio Court of Appeals - 04-10-00730-CV - 6/22/11

Thursday, June 23, 2011

Suit on personal guaranty: Elements a creditor has to prove to recover from guarantor

LAW OF GUARANTY IN TEXAS 
  
When can a creditor sue the guarantor of a promissory note or contract? 
  
ELEMENT OF SUIT AGAINST GUARANTOR

To recover for breach of the guaranty agreement, [ Plaintiff ] had to establish (1) the existence and ownership of the guaranty agreement, (2) the terms of the underlying contract by the holder, (3) the occurrence of the conditions upon which liability is based, and (4) the failure or refusal to perform the promise by the guarantor. Escalante v. Luckie, 77 S.W.3d 410, 416 (Tex. App.—Eastland 2002, pet. denied). A secured party is not required to dispose of the collateral through foreclosure before suing on the underlying obligation. Christian v. Univ. Fed. Sav. Ass’n, 792 S.W.2d 533, 535 (Tex. App.—Houston [1st Dist.] 1990, no writ). Where a guaranty agreement so provides, a lender need not liquidate its collateral before obtaining judgment against a guarantor. Fed. Deposit Ins. Corp. v. Coleman, 795 S.W.2d 706, 709-710 (Tex. 1990).

SOURCE: Eastland Court of Appeals - 11-09-00196-CV - 6/16/11
 
CITES AND CASELAW SNIPPETS ON ELEMENTS OF ACTION AGAINST GUARANTORS FROM OTHER TEXAS COURTS OF APPEALS 
   
Wiman v. Tomaszewicz, 877 S.W.2d 1, 8 (Tex. App.-Dallas 1994, no writ) (to recover on the guaranty of a note, a party must show proof of the existence and ownership of the guaranty contract, the terms of the underlying contract by the holder, the occurrence of the conditions upon which liability is based, and the failure or refusal to perform by the guarantor). In order to recover on a breach of guaranty agreement, the plaintiff must prove: (1) the existence and ownership of the guaranty agreement; (2) the terms of the underlying contract by the holder; (3) the occurrence of the conditions upon which liability is based; and (4) the failure or refusal to perform the promise by the guarantor. Marshall v. Ford Motor Company, 878 S.W.2d 629, 631 (Tex.App.-Dallas 1994, no writ). 
   
A guaranty agreement is a person's promise to perform the same act that another person is contractually bound to perform. Simmons v. Compania Financiera Libano, S.A., 830 S.W.2d 789, 792 (Tex. App.-Houston [1st Dist.] 1992, writ denied). A guaranty creates a secondary obligation under which the guarantor promises to answer for the debt of the primary obligor if the primary obligor fails to perform. Garner v. Corpus Christi Nat'l Bank, 944 S.W.2d 469, 475 (Tex. App.-Corpus Christi 1997, writ denied). 
  
To recover under a guaranty agreement, a plaintiff must show (1) the existence and ownership of the guaranty agreement, (2) the terms of the underlying contract by the holder, (3) the occurrence of the conditions upon which liability is based, and (4) the failure or the refusal to perform the promise by the guarantor. Byrd v. Estate of Nelms, 154 S.W.3d 149, 157 (Tex. App.-Waco 2004, pet. denied); Roye Enter., Inc. v. Roper, No. 02-04-00132-CV, 2005 WL 1791964, at *3 (Tex. App.-Fort Worth July 28, 2005, no pet.) (mem. op.); see also Simpson v. MBank Dallas, N.A., 724 S.W.2d 102, 107 (Tex. App.-Dallas 1987, writ ref'd n.r.e.) (stating that when a guaranty is in writing and signed by the guarantor, the guaranty's existence presumes consideration). 
  
 "To obtain summary judgment on a guaranty agreement, a party must conclusively prove: (1) the existence and ownership of the guaranty contract, (2) the performance of the terms of the contract by plaintiff, (3) the occurrence of the condition on which liability is based, and (4) guarantor's failure or refusal to perform the promise." Corona v. Pilgrim's Pride Corp., 245 S.W.3d 75, 80 (Tex.App.-Texarkana 2008, pet. denied). Barclay v. Waxahachie Bank & Trust Co., 568 S.W.2d 721, 723 (Tex.Civ. App.-Waco 1978, no writ). 
   
Recovery on a Promissory Note and Guaranty 
   
To recover for a debt on a promissory note, a party must establish that it is the legal holder of the note, the debtor's execution of the note, and that an outstanding balance is due and owing. Austin v. Countrywide Homes, 261 S.W.3d 68, 72 (Tex. App.-Houston [1st Dist.] 2008, pet. denied). To recover on the guaranty of a note, a party must show proof of the existence and ownership of the guaranty contract, the terms of the underlying contract by the holder, the occurrence of the conditions upon which liability is based, and the failure or refusal to perform by the guarantor. Wiman v. Tomaszewicz, 877 S.W.2d 1, 8 (Tex.App.-Dallas 1994, no writ). 

RELATED CAUSES OF ACTION

Suit for breach of note, default under promissory note, breach of contract, breach of residential or commercial lease agreement, personal guaranty agreement, corporate guaranty [not guarantee], suit for judicial forclosure of security interest in collateral, suit for deficiency judgment

Credit card debt collection: Legal Theories of Recovery

Causes of action invoked by card issuers and their assignees to collect credit card debt in Texas courts: BREACH OF CONTRACT [breach of credit card agreement or default under terms of agreement] To prevail on its breach of contract cause of action, Citibank had to prove the following essential elements: (1) the existence of a valid contract, (2) performance or tendered performance by Citibank, (3) breach of the contract by Owusu, and (4) damages sustained as a result of the breach. See Winchek v. American Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.) (op. on reh'g). ACCOUNT STATED THEORY OF RECOVERY [recently approved by several courts of appeals as viable for debt collection by financial institutions without requiring them to produce the underlying cardmember agreement] A party is entitled to relief under the common law cause of action for account stated where (1) transactions between the parties give rise to indebtedness of one to the other; (2) an agreement, express or implied, between the parties fixes an amount due; and (3) the one to be charged makes a promise, express or implied, to pay the indebtedness. See Dulong v. Citibank (South Dakota), N.A., 261 S.W.3d 890, 893 (Tex. App.-Dallas 2008, no pet.). SOURCE: Dallas Court of Appeals - 05-10-00175-CV - 6/22/11

Lawyer lingo: What is laches?

   
INVOKING LACHES AS A DEFENSE IN CASE OF DELAY 
 
Laches is an equitable remedy akin to estoppel that requires a showing that the party asserting a claim has unreasonably delayed the assertion of that claim and, due to that delay, the opposing party has made a good faith change of position to his or her detriment. See City of Fort Worth v. Johnson, 388 S.W.2d 400, 403 (Tex. 1964); In re Laibe Corporation, 307 S.W.3d 314, 318 (Tex. 2010). However, in its sovereign capacity, the State, unlike ordinary litigants, is not subject to the defense of laches. State v. Durham, 860 S.W.2d 63, 67 (Tex. 1993). SOURCE: Amarillo Court of Appeals - 07-10-0464-CV - 6/14/11
 
RECENT TEXAS SUPREME COURT OPINION ADDRESSING LACHES:
   
In re Laibe Corp., 307 S.W.3d 314 (Tex. 2010) Issuance of mandamus relief "is largely controlled by equitable principles," and equity "`aids the diligent and not those who slumber on their rights.'" Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex.1993) (quoting Callahan v. Giles, 137 Tex. 571, 155 S.W.2d 793, 795 (1941)). To invoke the equitable doctrine of laches, the moving party ordinarily must show an unreasonable delay by the opposing party in asserting it rights, and also the moving party's good faith and detrimental change in position because of the delay. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex.1989). Jackson Drilling has not demonstrated a detrimental change in position between the time the motion for reconsideration was denied in the trial court and the filing of the mandamus petition in the court of appeals. See In re E.I. du Pont de Nemours & Co., 92 S.W.3d 517, 524 (Tex.2002) (orig. proceeding) (rejecting argument that unreasonable delay barred mandamus relief, in part because "plaintiffs have failed to show how the delay has prejudiced them in any way"). Accordingly, without hearing oral argument, see TEX.R.APP. P. 52.8(c), we conditionally grant mandamus relief and direct the trial court to grant Laibe's motion to dismiss. We are confident that the court will comply, and the writ will issue only if it does not.
 
LACHES CASE LAW SNIPPETS FROM OTHER COURTS OF APPEALS 
  
Laches is an affirmative defense; therefore, the party asserting it has the burden of proving its essential elements. City of Fort Worth v. Johnson, 388 S.W.2d 400, 403 (Tex. 1964). Texas courts have recognized that "[t]he defense of laches is akin to that of estoppel". Id. Accordingly, Appellants must prove: "(1) unreasonable delay by one having legal or equitable rights in asserting them, and (2) a good faith change of position by another to his detriment because of the delay". Id. The City maintains that laches is inapplicable to a governmental entity. The Texas Supreme Court has "long held that a city cannot be estopped from exercising its governmental functions". City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770, 773 (Tex. 2006). One important reason for this rule "is that barring estoppel helps preserve separation of powers; legislative prerogative would be undermined if a government agent could—through mistake, neglect, or an intentional act— effectively repeal a law by ignoring, misrepresenting, or misinterpreting a duly enacted statute or regulation". Id. (citing Office of Personnel Mgmt. v. Richmond, 496 U.S. 414, 428 (1990)). A narrow exception exists, however, "where justice requires [the application of equitable estoppel], and there is no interference with the exercise of [the City's] governmental functions". City of Hutchins v. Prasifka, 450 S.W.2d 829, 836 (Tex. 1970). In such instances, the doctrine of estoppel "is applied with caution and only in exceptional cases where the circumstances clearly demand its application to prevent manifest injustice". Id. In Texas, "[t]he court, not the jury, determines whether the exception applies". Super Wash, 198 S.W.3d at 774. The Texas Supreme Court clarified recently that the exception is limited to instances where "city officials may have affirmatively misled the parties seeking to estop the city and . . . the misleading statements resulted in the permanent loss of their claims against the cities". Id. at 775. In short, the defense may be allow ed where justice requires estoppel and the party asserting the defense would otherwise be without a remedy. Id.
   
RELATED LEGAL CONCEPTS: equitable estoppel, unreasonable delay, lack of diligence, failure to prosecute

Wednesday, June 22, 2011

Filing lawsuit just before expiration of limitations but failing to serve Defendant promptly ....

AVOIDING LIMITATIONS

Diligence in serving the Defendant is critical 

When a plaintiff files suit within the limitations period, but obtains service on the defendant outside of the limitations period, the service may still be valid if the plaintiff exercised diligence in procuring service. Ashley v. Hawkins, 293 S.W.3d 175, 179 (Tex. 2009); see also Proulx v. Wells, 235 S.W.3d 213, 215 (Tex. 2007) ("[A] timely filed suit will not interrupt the running of limitations unless the plaintiff exercises due diligence in the issuance and service of citation.").
 
If a plaintiff diligently obtains service after the expiration of the statute of limitations, the date of service relates back to the date of filing. Proulx, 235 S.W.3d at 215. If a defendant affirmatively pleads the defense of limitations and shows that service occurred after the limitations deadline, the burden shifts to the plaintiff to prove diligence. Ashley, 293 S.W.3d at 179; Proulx, 235 S.W.3d at 216. The plaintiff must then present evidence regarding the efforts made to serve the defendant and "explain every lapse in effort or period of delay." Proulx, 235 S.W.3d at 216.
 
A plaintiff's explanation of the efforts in obtaining service may demonstrate a lack of diligence "as a matter of law" when "one or more lapses between service efforts are unexplained or patently unreasonable." Id. Although the clerk of the court has the duty, upon the plaintiff's request, to issue and deliver the citation as directed, and although a party "may ordinarily rely on the clerk to perform his duty within a reasonable time," the ultimate responsibility to ensure that citation was served on the defendant still rests with the plaintiff. Bilinsco Inc. v. Harris Cnty. Appraisal Dist., 321 S.W.3d 648, 652 (Tex. App.-Houston [1st Dist.] 2010, pet. denied) (quoting Boyattia v. Hinojosa, 18 S.W.3d 729, 733-34 (Tex. App.-Dallas 2000, pet. denied). A plaintiff "who wholly ignores her duty to have the citation served on the defendant during a lengthy period of time [in which] the citation remains with the clerk does not manifest a bona fide intention to have process served." Boyattia, 18 S.W.3d at 734. Any deficiency in the server's performance is imputed to [ Plaintiff ]. Gonzalez v. Phoenix Frozen Foods, Inc., 884 S.W.2d 587, 590 (Tex. App.-Corpus Christi 1994, no writ).

A court looks to "the time it took to secure citation, service, or both, and the type of effort or lack of effort the plaintiff expended in procuring service." Proulx, 235 S.W.3d at 216; see also Mauricio v. Castro, 287 S.W.3d 476, 479 (Tex. App.-Dallas 2009, no pet.) ("Texas courts have consistently held that lack of diligence may be shown based on unexplained lapses of time between the filing of the suit, issuance of the citation, and service of process."). It is the responsibility of the one requesting service to see that service is properly accomplished. Tex. R. Civ. P. 99(a); Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 153 (Tex. 1994). [ Plaintiff ] does not adequately explain her effort in procuring service during the more than four months after she filed suit and more than three months after the limitations period expired. See Boyattia, 18 S.W.3d at 734 (Plaintiff's failure to take any action during the clerk's three-month delay in delivering the citation constituted a lack of diligence as a matter of law.); Webster v. Thomas, 5 S.W.3d 287, 288-90 (Tex. App.-Houston [14th Dist.] 1999, no pet.) (Plaintiff failed to use due diligence as a matter of law, in part, because evidence showed that during three month period from filing suit to issuance of citation, plaintiff called wrong clerk's office when inquiring about issuance of citation.). [ Plaintiff ]'s issue is overruled. The trial court did not err in granting summary judgment. The judgment is affirmed

SOURCE: Beaumont Court of Appeals - 09-10-00157-CV - 6/16/11

LEADING TEXAS SUPREME COURT CASE: Proulx v. Wells, 235 S.W.3d 213, 215 (Tex. 2007) ("[A] timely filed suit will not interrupt the running of limitations unless the plaintiff exercises due diligence in the issuance and service of citation."); Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 830 (Tex. 1990) (same).
 
CASELAW CLIPS FROM OTHER COURTS ON DILIGENCE IN SERVING THE DEFENDANT 

Due diligence requires that the plaintiff exercise "that diligence to procure service which an ordinarily prudent person would have used under the same or similar circumstances." Gonzalez v. Phoenix Frozen Foods, Inc., 884 S.W.2d 587, 590 (Tex. App.-Corpus Christi 1994, no writ). It also requires that the plaintiff diligently pursue service on the defendant. Hodge, 856 S.W.2d at 215. Although the question of diligence is generally a fact question, a plaintiff may demonstrate a lack of diligence as a matter of law, "when one or more lapses between service efforts are unexplained or patently unreasonable." Proulx, 235 S.W.3d at 216. 

In assessing diligence, the relevant inquiry is whether the plaintiff acted as an ordinarily prudent person would have acted under the same or similar circumstances and was diligent up until the time the defendant was served. Proulx v. Wells, 235 S.W.3d 213, 216 (Tex.2007); see Tate v. Beal, 119 S.W.3d 378, 381 (Tex. App.-Fort Worth 2003, pet. denied). Generally, the question of the plaintiff's diligence 370*370 in effecting service is one of fact, and diligence is determined by examining the time it took to secure citation, service, or both, and the type of effort or lack of effort the plaintiff expended in procuring service. Proulx, 235 S.W.3d at 216; see Webster v. Thomas, 5 S.W.3d 287, 289-90 (Tex.App.-Houston [14th Dist.] 1999, no pet.). 

If the plaintiff's explanation for the delay raises a material fact issue concerning the diligence of service efforts, the burden shifts back to the defendant to conclusively show why, as a matter of law, the explanation is insufficient. Zale Corp. v. Rosenbaum, 520 S.W.2d 889, 891 (Tex. 1975). Whether a plaintiff acted with due diligence is generally a question of fact. Eichel v. Ullah, 831 S.W.2d 42, 43 (Tex. App.-El Paso 1992, no writ). The question of due diligence may be answered as a matter of law only when a delay in service is "unexplained or patently unreasonable." Proulx v. Wells, 235 S.W.3d 213, 216 (Tex. 2007) (per curiam). Whether diligence is lacking as a matter of law is a conclusion of law to be reviewed de novo. See, e.g., Ashley v. Hawkins, 293 S.W.3d 175, 180-81 (Tex. 2009). We will uphold the trial court's conclusion of law if the judgment can be sustained on any legal theory supported by the evidence. BMC Software Belg. N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Lack of diligence may be found even in the face of an offered explanation, if that explanation affirmatively establishes lack of reasonable diligence. Id. When a defendant has affirmatively pleaded the defense of limitations and shown that service was not timely, as International Fidelity has done here, the burden shifts to the plaintiff to prove diligence. Id. (citing Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 830 (Tex. 1990)). If the plaintiff's explanation for the delay raises a material fact issue concerning the diligence of service efforts, the burden shifts back to the defendant to conclusively show why, as a matter of law, the explanation is insufficient. Id. 
  
OLDER CASES ON DILIGENCE IN PROCURING SERVICE OF CITATION 
  
Rigo Mfg. Co. v. Thomas, 458 S.W.2d 180, 182 (Tex. 1970) (holding lack of diligence existed as matter of law when respondents waited seventeen months after learning of improper service to correct it); Perkins v. Groff, 936 S.W.2d 661, 668 (Tex. App.-Dallas 1996, writ denied) (upholding summary judgment because there was "no explanation for the delay" in service); Liles v. Phillips, 677 S.W.2d 802, 809 (Tex. App.-Fort Worth 1984, writ ref'd n.r.e.) (holding lack of diligence existed as matter of law when appellee "offered no explanation whatsoever concerning the delay between filing suit and service of citation"); Allen v. Bentley Labs, Inc., 538 S.W.2d 857, 860 (Tex. Civ. App.-San Antonio 1976, writ ref'd n.r.e.) (upholding summary judgment finding lack of diligence as matter of law when appellant "did not plead or offer any excuse for the delay of almost six months in serving [appellee]"); Williams v. Houston-Citizens Bank & Trust Co., 531 S.W.2d 434, 436 (Tex. Civ. App.-Houston [14th Dist.] 1975, writ ref'd n.r.e.) (upholding judgment finding lack of diligence as matter of law when appellee "offered no explanation of the delay between issuance of the first and second citations"); Buie v. Couch, 126 S.W.2d 565, 567 (Tex. Civ. App.-Waco 1939, writ ref'd) (holding, when appellee failed to ascertain whether the clerk had prepared citation, that "[s]uch conduct on his part, without any excuse therefore, is wholly inconsistent with due diligence and constitutes negligence as a matter of law"). Furthermore, case law supports the existence of a fact question when a plaintiff attempts timely service, but miscommunications or mistakes by the district clerk's office unknown to the plaintiff result in service being unsuccessful. See Hodge v. Smith, 856 S.W.2d 212, 217 (Tex. App.-Houston [1st Dist.] 1993, writ denied); Valdez v. Charles Orsinger Buick Co., 715 S.W.2d 126, 128 (Tex. App.-Texarkana 1986, no writ).


Types of Defamation in Texas: Libel vs Slander, Per Se vs. Per Quod

DEFAMATION DEFINED Defamation is generally defined as the invasion of a person's interest in his or her reputation and good name. Prosser & Keeton on Torts § 111, at 771 (5th ed. 1984 & Supp. 1988). TWO CATEGORIES DEPENDING ON MODE OF COMMUNICATION Defamation claims are divided into two categories depending on how the defamatory statement was communicated: libel for written communications and slander for oral communications.[5] LEGAL CLASSIFICATION OF DEFAMATION CLAIMS: Per se vs. per quod Defamation claims are also divided into two categories, defamation per se and defamation per quod, according to the level of proof required in order to make them actionable. Texas Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 580 (Tex.App.--Austin 2007, pet. denied); Moore v. Waldrop, 166 S.W.3d 380, 384 (Tex.App.--Waco 2005, no pet.). Statements that are defamatory per quod are actionable only upon allegation and proof of damages. Texas Disposal, 219 S.W.3d at 580; Alaniz v. Hoyt, 105 S.W.3d 330, 345 (Tex.App.--Corpus Christi 2003, no pet.). That is, before a plaintiff can recover for defamation per quod, he must carry his burden of proof as to both the defamatory nature of the statement and the amount of damages caused by the publication of that statement. Texas Disposal, 219 S.W.3d at 580; See also Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 374 (Tex. 1984); Peshak v. Greer, 13 S.W.3d 421, 426 (Tex.App.--Corpus Christi 2000, no pet.). By contrast, in cases involving defamation per se, damages are presumed to flow from the nature of the defamation itself and, in most situations, a plaintiff injured by a defamatory per se communication is entitled to recover general damages without specific proof of the existence of harm. Bentley v. Bunton, 94 S.W.3d 561, 604 (Tex. 2002) ("Our law presumes that statements that are defamatory per se injure the victim's reputation and entitle him to recover general damages, including damages for loss of reputation and mental anguish."); Exxon Mobil Corp. v. Hines, 252 S.W.3d 496, 501 (Tex.App--Houston [14th Dist.] 2008, pet. denied); but see Gertz v. Robert Welch, Inc., 418 U.S. 323, 347-48, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974) (holding that, so long as they do not impose liability without fault, States are free to define for themselves the appropriate standard of liability in defamation suits where a private plaintiff sues a media defendant for speech involving a public issue). The United States Supreme Court later clarified that the constitutional requirements of Gertz do not prohibit the application of strict liability to defamation suits involving private-figure plaintiffs who sue nonmedia defendants for speech involving nonpublic issues. Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 760-61, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985). In suits involving such situations, courts applying Texas law have applied strict liability in defamation per se causes of action. See Thomas-Smith v. Mackin, 238 S.W.3d 503, 509 (Tex.App.--Houston [14th Dist.] 2007, no pet.); Peshak v. Greer, 13 S.W.3d 421, 425-26 (Tex.App.--Corpus Christi 2000, no pet.); Snead v. Redland Aggregates Ltd., 998 F.2d 1325, 1334 (5th Cir. 1993). Because the decision whether an alleged defamatory statement is defamatory per se or per quod affects the level of proof required, that question is initially determined by the trial court as a matter of law. Turner v. KTRK TV, Inc., 38 S.W.3d 103, 114 (Tex. 2000); Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653, 654-55 (Tex. 1987). A communication is considered libel per se when it is so obviously hurtful to the person aggrieved that no proof of its injurious character is required to make it actionable. Clark v. Jenkins, 248 S.W.3d 418, 437 (Tex.App.--Amarillo 2009, pet. denied), cert. denied, __ U.S. __, 130 S.Ct. 52, 175 L.Ed.2d 21 (2009); Houseman v. Publicaciones Paso Del Norte, S.A. de C.V., 242 S.W.3d 518, 524 (Tex.App.--El Paso 2007, no pet.). A false statement will typically be classified as defamatory per se if it injures a person in his office, profession, or occupation; Morrill v. Cisek, 226 S.W.3d 545, 549 (Tex.App.--Houston [1st Dist.] 2006, no pet.); charges a person with the commission of a crime; Leyendecker, 683 S.W.2d at 374; or imputes to him a loathsome disease. Bolling v. Baker, 671 S.W.2d 559, 570 (Tex.App.--San Antonio 1984, no writ). Whether a given statement is reasonably capable of a defamatory meaning is a question to be decided by the trial court as matter of law. See Musser, 723 S.W.2d at 654-55. The trial court should construe the alleged defamatory communication as a whole in light of the surrounding circumstances based upon how a reasonable person of ordinary intelligence would perceive it, considering the surrounding circumstances and the context of the statement. New Times, Inc. v. Isaacks, 146 S.W.3d 144, 153 (Tex. 2003), cert. denied, 545 U.S. 1105, 125 S.Ct. 2557, 162 L.Ed.2d 276 (2005); Turner, 38 S.W.3d at 114. This is an objective test, not a subjective one. New Times, Inc., 146 S.W.3d at 157. Thus, the parties' opinion of the statements, Musser v. Smith, 690 S.W.2d 56, 58 (Tex.App.--Houston [14th Dist.] 1985), aff'd, 723 S.W.2d 653 (Tex. 1987), or the defendant's intent in making the statements have no bearing on whether they are defamatory. Peshak, 13 S.W.3d at 426 ("We assume the words were intended because they were used.") "Common sense requires courts to understand the statement as ordinary men and women would"; Moore, 166 S.W.3d at 385, and the question whether a statement is defamatory per se is only submitted to the jury if the contested language is ambiguous or of doubtful import. See Denton Pub. Co. v. Boyd, 460 S.W.2d 881, 884 (Tex. 1970). Otherwise, it is an issue of law for the trial court to decide. Musser, 723 S.W.2d at 655. Therefore, according to this body of law, a written communication, made by a nonmedia defendant, concerning a private-figure individual and pertaining to a nonpublic issue, which is obviously hurtful to the aggrieved party in his profession or occupation, is libel per se. SOURCE: Amarillo Court of Appeals - 07-09-0277-CV - 6/16/11

DTPA Claim in Texas: What is actionable?

   
What can bad actors (businesses) be sued for by consumers? 
   
The DTPA prohibits “[f]alse, misleading, or deceptive acts or practices in the conduct of any trade or commerce.” TEX. BUS. and COMM. CODE ANN. § 17.46(a) (West 2011).
 
DTPA Violations Laundry list 
 
Section 17.46(b) contains a laundry list of specifically prohibited acts. Included in that laundry list are (1) “representing that goods or services have characteristics which they do not have,” (2) “representing that goods or services are of a particular . . . quality, . . . if they are of another, ” (3) “representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve,” (4) “representing that a guarantee or warranty confers or involves rights or remedies which it does not have or involve,” and (5) “failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.” Id. § 17.46(b)(5), (7), (12), (20) and (24). Actionable representations may be oral or written. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 502 (Tex. 2001). Intent to make a misrepresentation is not required to recover under section 17.46 (b)(5), (7), and (12). See id.
 
What damages are available? 
 
Under section 17.50(a), a DTPA plaintiff may recover “economic damages” for which the defendant’s misconduct was a producing cause. TEX. BUS. and COM. CODE ANN. § 17.50(a) (West 2011). Economic damages include both benefit-of-the-bargain damages similar to those recoverable for breach of contract and out-of-pocket damages. See W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127, 128 (Tex. 1988) (explaining that out-of-pocket and benefit-of-the-bargain are two measures of damages under the DTPA, and noting that a plaintiff may recover the greater of the two measures). Additionally, “recovery under the DTPA is not exclusively limited to only these two types of damages.” Manon v. Tejas Toyota, Inc., 162 S.W.3d 743, 754 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Rather, the consumer may recover its “total loss sustained . . . as a result of the deceptive trade practice,” including “related and reasonably necessary expenses.” Id.; see D.S.A., Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d at 662, 663–64 (Tex. 1998) (explaining that a plaintiff can recover, in addition to out-of-pocket-expenses, any loss otherwise suffered as a consequence of misrepresentations); Henry S. Miller Co. v. Bynum, 836 S.W.2d 160, 162 (Tex. 1992) (holding that DTPA damages include recovery for “lost capital investment”). In other words, the consumer is “permitted [to recover] other damages to ensure that the plaintiff is made whole.” Bynum, 836 S.W.2d at 162.
 
Mere Breach of Contract not a DTPA violation 
   
[W]hen a plaintiff’s claim arises solely from the failure of one of the parties to perform on a contract, a DTPA action is inappropriate. Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 14 (Tex. 1996) (per curiam); see also Wayne Duddlesten, Inc. v. Highland Ins. Co., 110 S.W.3d 85, 92 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (holding that proof of a failure to comply with contractual promises “cannot be used to support an action under the DTPA”). In Crawford, the plaintiff sought to escape this rule based on the defendant’s misrepresentations that it would perform under the contract. The court held, however, that a misrepresentation that is based on nothing more than a failure to perform a contractual promise cannot be the basis for a DTPA claim; otherwise, every breach of contract claim would be converted into a DTPA claim. Id.
 
SOURCE: Houston Court of Appeals - 01-10-00017-CV - 6/16/11



Tuesday, June 21, 2011

Elements of Negligence cause of action

What are the elements of a cause of action for negligence under Texas law? A negligence cause of action has three elements: (1) a legal duty owed by one person to another, (2) a breach of that duty, and (3) damages proximately caused by the breach. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). No duty of care - No viable lawsuit based on negligence The threshold inquiry in a negligence case is duty. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); Mathis v. RKL Design/Build, 189 S.W.3d 839, 844 (Tex. App.—Houston [1st Dist.] 2006, no pet.). When does duty exist - when not? The existence of duty is a question of law for the court to decide from the facts surrounding the occurrence at issue. Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998); Siegler, 899 S.W.2d at 197; Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). “The nonexistence of a duty ends the inquiry into whether negligence liability may be imposed.” Van Horn, 970 S.W.2d at 544. Generally, no duty exists to take action to prevent harm to others absent certain special relationships or circumstances. Torrington Co. v. Stutzman, 46 S.W.3d 829, 837 (Tex. 2000). SOURCE: Houston Court of Appeals - 01-10-00078-CV - 6/9/11 RELATED LEGAL TERMS: negligent conduct, omission, failure to act, exercise care, tort claims, claims sounding in tort, no fiduciary relationship, duty of care

Monday, June 20, 2011

Legal Malpractice - Elements of claim by client against attorney

When is lously lawyering actionable? Elements of legal malpractice in Texas: To recover on a claim of legal malpractice a plaintiff must prove: (1) the attorney owed the plaintiff a duty; (2) the attorney breached that duty; (3) the breach proximately caused the plaintiff’s injuries; and (4) damages occurred. Alexander v. Turtur & Associates, Inc., 146 S.W.3d 113, 117 (Tex. 2004); Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995). Privity, which refers to the contractual connection or relationship existing between attorney and client, is directly related to the existence of duty and is necessary for a plaintiff to have standing to bring a legal malpractice claim. Thompson v. Vinson & Elkins, 859 S.W.2d 617, 621 (Tex.App.--Houston [1st Dist.] 1993, writ denied). SOURCE: El Paso Court of Appeals - 08-10-00168-CV - 615/11 RELATED LEGAL TERMS: attorney malpractice, legal malpractice, grievance, professsional competence, incompetence, inadequate or incompetent legal representation, former client's suits against lawyer

What constitutes gross negligence under Texas law?

LEGAL DEFINITION OF GROSS NEGLIGENCE When does negligent conduct amount to gross negligence? Gross negligence is “an act or omission involving subjective awareness of an extreme degree of risk, indicating conscious indifference to the rights, safety, or welfare of others.” State v. Shumake, 199 S.W.3d 279, 287 (Tex. 2006) (citing Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 21 (Tex. 1994)). Gross negligence, as applied under the recreational-use statute, involves two components: (1) viewed objectively from the actor's standpoint, the act or omission must involve an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and (2) the actor must have actual, subjective awareness of risk involved, but nevertheless proceeds in conscious indifference to the rights, safety, or welfare of others. See Miranda, 133 S.W.3d at 225. Extreme Degree of Risk Gross negligence involves not only actual knowledge of a risk, but knowledge of an extreme degree of risk, considering the probability and magnitude of potential harm to others. Miranda, 133 S.W.3d at 225; see also Moriel, 879 S.W.2d at 22 (“extreme degree of risk” for gross negligence not satisfied by remote possibility of injury or high probability of minor harm, but rather “likelihood of serious injury”). SOURCE: Dallas Court of Appeals - 05-10-00511-CV - 6/14/11 (Plaintiff failed to create a fact issue as to his allegations of gross negligence in suit against governmental entity)

Saturday, June 18, 2011

Mental anguish damages

How to properly prove mental anguish damages An award of mental anguish damages will survive a legal sufficiency challenge when the plaintiff has introduced (1) "direct evidence of the nature, duration, or severity of [plaintiff's] anguish, thus establishing a substantial disruption in the plaintiff's daily routine"; or (2) other evidence of "a high degree of mental pain and distress that is more than mere worry, anxiety, vexation, embarrassment, or anger." Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Direct evidence may be in the form of the parties' own testimony, that of third parties, or experts. Id. "There must also be some evidence to justify the amount awarded"; Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996), and the amount awarded must be fair and reasonable. Id. SOURCE: Generally, an award of mental anguish damages must be supported by direct evidence that the nature, duration, and severity of mental anguish was sufficient to cause, and caused, either a substantial disruption in the plaintiff’s daily routine or a high degree of mental pain and distress. Bentley v. Bunton, 94 S.W.3d 561, 606 (Tex. 2002). Citing Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995) SOURCE: Tex. 2011 - 6/17/11 Service Corporation International [SCI] v. Guerra, No. 09-0941 (Tex. Jun 17, 2011)(Opinion by Phil Johnson) (insufficienct evidence of mental anguish damages)

Federal Preemption [affirmative defense against state-law claim]

When federal law overrides state law A state law that conflicts with federal law is preempted and has no effect. U.S. CONST. art. VI, cl. 2; Maryland v. Louisiana, 451 U.S. 725, 747 (1981); BIC Pen, 251 S.W.3d at 504. State law may be preempted in three ways: (1) expressly, by a federal law specifically preempting state law; (2) impliedly, by the scope of a federal law or regulation indicating Congress intended the federal law or regulation to exclusively occupy the field; or (3) impliedly, by the state law conflicting with a federal law or regulation to the extent it is impossible to comply with both or by the state law obstructing Congress’s objectives as reflected by the federal law. BIC Pen Corp. v. Carter, 251 S.W.3d 500, 504 (Tex. 2008) SOURCE: Texas Supreme Court - 6/17/11 - Bic Pen Corp. v. Carter II, No. 09-0039 (Tex. June 17, 2011)(Johnson)(product liability, cigarette lighter safety for children)

Tuesday, June 14, 2011

UDJA Fees when the case becomes moot

Statutory Legal Fees under the Texas version of the UDJA Attorneys' fees under the Declaratory Judgments Act [UDJA or DJA], chapter 37 of the Texas Civil Practice and Remedies Code. The Act provides, “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 (West 2008). A party to a declaratory-judgment action need not prevail in order to recover an award of attorneys' fees. Martin v. Cadle Co., 133 S.W.3d 897, 906-07 (Tex. App.-Dallas 2004, pet. denied); accord City of Temple v. Taylor, 268 S.W.3d 852, 858 (Tex. App.-Austin 2008, pet. denied). Mootness Doctrine “A case becomes moot if a controversy ceases to exist or the parties lack a legally cognizable interest in the outcome.” Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005). “A case is not rendered moot simply because some of the issues become moot . . . .” In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding). “The mootness doctrine implicates subject matter jurisdiction.” City of Dallas v. Woodfield, 305 S.W.3d 412, 416 (Tex. App.-Dallas 2010, no pet.). “[W]hen a case becomes moot the only proper judgment is one dismissing the cause.” Polk v. Davidson, 196 S.W.2d 632, 633 (Tex. 1946); see also Woodfield, 305 S.W.3d at 416 (“If a case is moot, the appellate court is required to vacate any judgment or order in the trial court and dismiss the case.”). Texas Supreme Court authorities on fees and mootness The Texas Supreme Court has decided three cases that address the question of whether an outstanding claim for attorneys' fees will prevent the dismissal of an otherwise moot case. The first is Camarena v. Texas Employment Commission, 754 S.W.2d 149 (Tex. 1988). Camarena and others sued the Commission, seeking a declaratory judgment that a statute excluding most agricultural workers from the Texas Unemployment Compensation Act was unconstitutional. Id. at 150. The trial court granted Camarena the declaration he sought, but it denied his request for attorneys' fees based on sovereign immunity. Id. The legislature amended the statute to give farm workers phased- in unemployment coverage, and the trial court rendered an amended judgment holding the new statute constitutional. Id. The Commission appealed, contending that the case had become moot, and Camarena cross-appealed the denial of attorneys' fees. Id. The court of appeals held that the case was moot and that immunity barred Camarena's claim for fees. Id. at 150-51. The Texas Supreme Court, however, held that the claim for attorneys' fees was a live claim that prevented the case from becoming moot. Id. at 151. It further held that the fee claim was not barred because chapter 106 of the civil practice and remedies code waived sovereign immunity. Id. at 151-52. Thus, Camarena supports the proposition that a claim for attorneys' fees can prevent a case from becoming moot. Next, the supreme court decided Speer v. Presbyterian Children's Home & Service Agency, 847 S.W.2d 227 (Tex. 1993), a case heavily relied on by the Hansens in this appeal. In Speer, Speer sued the Agency under the Texas Commission on Human Rights Act for refusing to hire her as an adoption worker because of her religion. Id. at 228. She sought only declaratory and injunctive relief. Id. The trial court ruled for the Agency, this Court affirmed, and Speer appealed to the Texas Supreme Court. Id. While the case was pending in the supreme court, the Agency ceased offering adoption services and abolished the position for which Speer had applied. Id. The supreme court held that the case was therefore moot and had to be dismissed. Id. at 230. The court distinguished Camarena, holding that because Speer's declaratory and injunction claims had become moot, she could never be a prevailing party under the Texas Commission on Human Rights Act and therefore could never recover her attorneys' fees and costs. Id. at 229-30. The El Paso Court of Appeals subsequently elaborated on the distinction between Camarena and Speer. Citing Camarena, the court of appeals held that a claim for attorneys' fees can keep a declaratory-judgment case alive despite substantive mootness because a party does not have to prevail in order to recover its attorneys' fees under the Declaratory Judgments Act. Labrado v. Cnty. of El Paso, 132 S.W.3d 581, 589-91 (Tex. App.-El Paso 2004, no pet.). Speer was distinguishable because Speer sued under the Texas Commission on Human Rights Act, which required her to prevail in order to recover her attorneys' fees. Id. at 590. Because the mootness of her substantive TCHRA claim meant she could never prevail, a claim for fees could not keep her claim alive. Id. at 590-91. Finally, in the Allstate Insurance Co. case, the supreme court reaffirmed that a dispute over attorneys' fees under the Declaratory Judgments Act is a “live controversy” even if the substance of the case becomes moot during its pendency. Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005). In that case, Hallman was sued for property damage. Id. at 641. Her liability insurer, Allstate, provided her with a defense under a reservation of rights but commenced a declaratory- judgment action against Hallman contesting coverage of the property-damage claim. Id. The trial court granted summary judgment for Allstate and denied both sides their attorneys' fees, but this Court reversed, held that the claim was covered, and remanded for consideration of Hallman's claim for attorneys' fees. Id. at 642. While the case was on further appeal to the Texas Supreme Court, Hallman won the underlying property-damage case, and Allstate disclaimed any intention of seeking to recoup from Hallman its costs of defending the underlying case. Id. The supreme court cited Camarena and held that Hallman's continuing claim for attorneys' fees kept the case from becoming moot. Id. at 643 (“Hallman's remaining interest in obtaining attorney's fees 'breathes life' into this appeal and prevents it from being moot.”). Accordingly, the court proceeded to decide the merits of the coverage question because of the live attorneys' fees issue. Id. at 643-45. Thus, Allstate Insurance Co. confirms that a claim for attorneys' fees under the Declaratory Judgments Act will keep a case alive even if the request for substantive declaratory relief becomes moot. SOURCE: Dallas Court of Appeals - 05-09-01001-CV - 6/13/11 We conclude that Camarena and Allstate Insurance Co. stand for the proposition that a case under the Declaratory Judgments Act remains a live controversy, even if all requests for substantive declaratory relief become moot during the action's pendency, as long as a claim for attorneys' fees under the Act remains pending. See Tex. Dep't of Transp. v. Tex. Weekly Advocate, No. 03-09- 00159-CV, 2010 WL 323075, at *3 (Tex. App.-Austin Jan. 29, 2010, no pet.) (mem. op.) (“An appeal from the grant or denial of attorney's fees, at least with respect to a UDJA claim, is usually a separate controversy and can persist even when the underlying controversy is moot.”) (emphasis added) (citing Allstate Insurance Co. and Camarena in support). Thus, Chase's and Cramer's claims for attorneys' fees under the Declaratory Judgments Act kept this case from becoming moot even though the Hansens dropped their objection to the sale of the house and the house was actually sold. Speer does not apply to cases under the Declaratory Judgments Act, and the Hansens' reliance on Speer is thus misplaced. In support of their mootness argument, the Hansens also rely on cases such as MBM Financial Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660 (Tex. 2009), and City of Carrollton v. RIHR Inc., 308 S.W.3d 444 (Tex. App.-Dallas 2010, pet. denied). These cases are not on point. In each case, the appellate court concluded that a party could not use the Declaratory Judgments Act as a vehicle for recovering attorneys' fees when the declaratory-judgment claims merely duplicated other claims already before the trial court. See MBM Fin. Corp., 292 S.W.3d at 669-71; RIHR Inc., 308 S.W.3d at 454-55. The instant case, by contrast, was an action solely for declaratory judgment, so Chase's declaratory-judgment claims were not duplicative of any other claims. Accordingly, MBM Financial Corp. and similar cases are distinguishable. The Hansens also rely on two other cases that predate Allstate Insurance Co. These cases are not persuasive. In Ware v. Miller, the Amarillo Court of Appeals held that a plaintiff's claim for declaratory judgment “was rendered moot” during its pendency, and it therefore vacated the trial court's judgment (which awarded the plaintiff his attorneys' fees) and dismissed the appeal. 134 S.W.3d 381, 384-85 (Tex. App.-Amarillo 2003, pet. denied). It appears that the Ware court did not consider the possibility that the plaintiff's claim for fees under the Declaratory Judgments Act might have prevented the case from becoming moot. See id. In Kenneth Leventhal & Co. v. Reeves, Reeves sued the defendants for breach of contract and declaratory judgment, and he obtained a judgment awarding him no relief except for attorneys' fees. 978 S.W.2d 253, 256-57 (Tex. App.-Houston [14th Dist.] 1998, no pet.). The court of appeals reversed and rendered a take- nothing judgment against Reeves, holding that the judgment for fees could not be sustained under the Declaratory Judgments Act for two reasons. Id. at 258-60. First, Reeves's claim for declaratory judgment was duplicative of his claim for breach of contract, and so it could not enable him to recover fees that were otherwise not recoverable. Id. at 258-59. We agree with this reasoning. Second, the court concluded that Reeves's claim for declaratory relief had become moot during its pendency and therefore would not support an award of attorneys' fees to either side. Id. at 259-60. This reasoning is contrary to Allstate Insurance Co., which is binding on us, and so we decline to follow Reeves. Neither side cited our recent opinion in City of Richardson v. Gordon, 316 S.W.3d 758 (Tex. App.-Dallas 2010, no pet.). In Gordon, we addressed a fact-specific issue concerning attorneys' fees in relation to the Declaratory Judgments Act and governmental immunity. We conclude that Gordon is limited to its facts and should not be construed beyond its application to the discrete facts of that case. SOURCE: Dallas Court of Appeals - 05-09-01001-CV - 6/13/11

When are attorney's fees available in Texas?

TEXAS FOLLOWS THE "AMERICAN RULE" ON ATTORNEY FEES

Attorney's fees are recoverable only when provided for by statute or by the parties' agreement. Doss v. Homecomings Fin. Network, Inc., 210 S.W.3d 706, 711 (Tex. App.-Corpus Christi 2007, pet. denied) (citing Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992)).

SOURCE: Houston Court of Appeals - 01-09-00816-CV - 5/28/11

Fees under Chapter 38 of the CPRC

An award of attorney's fees in a breach of contract claim is appropriate only if a party prevails and recovers damages. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (West 2008) (allowing recovery of attorney's fees in valid claims involving oral or written contracts); State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 437 (Tex. 1995). SOURCE: Corpus Christi Court of Appeals - 13-09-00355-CV - 6/9/11

Fees under Chapter 37 of the CPRC UDJA FEES - Uniform Declaratory Judgment Act ("UDJA").

Reasonable and necessary attorney's fees may be awarded in any proceeding utilizing the UDJA if they are equitable and just. Id. at 711-12; see TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (Vernon 2008) ("In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just.").[2] "The UDJA is a procedural device for deciding cases already within a court's subject matter jurisdiction." Doss, 210 S.W.3d at 712 (citing TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001—.011 (Vernon 2008) and State v. Morales, 869 S.W.2d 941, 947 (Tex. 1994)). "A litigant's request for declaratory relief cannot confer jurisdiction on the court, nor can it change the basic character of a suit." Id. (citing Morales, 869 S.W.2d at 947). The UDJA provides: A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder. TEX. CIV. PRAC. & REM. CODE ANN. § 37.004.

Appellate review of fee awards

We review a trial court's award of attorney's fees for an abuse of discretion. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); see also Gilbert v. City of El Paso, 327 S.W.3d 332, 336 (Tex. App.-El Paso 2010, no pet.) ("An award of attorney's fees under the UDJA is within the trial court's discretion."). A trial court abuses its discretion when it acts without regard for any guiding rules or principles. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). In Tony Gullo Motors I, L.P. v. Chapa, the Texas Supreme Court held that parties claiming attorney's fees must "segregate fees between claims for which they are recoverable and claims for which they are not" and are "required to show that attorney's fees were incurred while suing the defendant sought to be charged with the fees on a claim which allows recovery of such fees." 212 S.W.3d 299, 311 (Tex. 2006) (quoting Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991)). "Intertwined facts" do not make fees for unrecoverable claims recoverable. Id. at 313-14. "[I]t is only when discrete legal services advance both a recoverable and unrecoverable claim that they are so intertwined that they need not be segregated." Id. Thus, "[i]f any attorney's fees relate solely to a claim for which such fees are unrecoverable, the claimant must segregate recoverable from unrecoverable fees." 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 S.W.3d 488, 506 (Tex. App.-Houston [14th Dist.] 2007, pet. denied) (citing Chapa, 212 S.W.3d at 313-14). The supreme court in Chapa further stated,
There may, of course, be some disputes about fees that a trial or appellate court should decide as a matter of law. For example, to prevail on a contract claim a party must overcome any and all affirmative defenses (such as limitations, res judicata, or prior material breach), and the opposing party who raises them should not be allowed to suggest to the jury that overcoming those defenses was unnecessary. But when, as here, it cannot be denied that at least some of the attorney's fees are attributable only to claims for which fees are not recoverable, segregation of fees ought to be required. . . .
Chapa, 212 S.W.3d at 314 (emphasis added).
Attorneys are not required to keep separate time records when drafting parts of a petition or completing other tasks that relate to claims for which attorney's fees are unrecoverable. 7979 Airport Garage, 245 S.W.3d at 506 (citing Chapa, 212 S.W.3d at 313-14). Rather, an attorney may testify, for example, "that a given percentage of the drafting time would have been necessary even if the claim for which attorney's fees are nonrecoverable had not been asserted." Id. The party seeking to recover attorney's fees bears the burden of demonstrating that segregation is not required. See Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 455 (Tex. App.-Houston [1st Dist.] 2007, no pet.). [2] We also note that attorney's fees are recoverable for claims arising out of an oral or written contract. See TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (Vernon 2008) ("A person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for . . . an oral or written contract.").

SOURCE: Houston Court of Appeals - 01-09-00816-CV - 5/28/11

Monday, June 13, 2011

Money Had and Received (MHnR) Theory of Recovery for Debt


MONEY HAD AND RECEIVED

Alternative theory for a debt suit when there is no contract or no prove of it

To recover on a claim for money had and received, a plaintiff must show that the defendant holds money that in equity and good conscience belongs to him. Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951); Edwards v. Mid-Continent Office Distribs., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied).

A cause of action for money had and received is not based on wrongdoing, but, instead, "looks only to the justice of the case and inquires whether the defendant has received money which rightfully belongs to another." Everett v. TK-Taito, L.L.C., 178 S.W.3d 844, 860 (Tex. App.-Fort Worth 2005, no pet.); Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ). In short, it is an equitable doctrine applied to prevent unjust enrichment. Hunt v. Baldwin, 68 S.W.3d 117, 132 (Tex. App.-Houston [14th Dist.] 2001, no pet.); Phippen v. Deere & Co., 965 S.W.2d 713, 725 (Tex. App.-Texarkana 1998, no pet.).

In defending against such a claim, a defendant may present any facts and raise any defenses that would deny the claimant's right or show that the claimant should not recover. Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007).

SOURCE: Dallas Court of Appeals - 05-09-01397-CV- 4/22/11

MONEY-HAD-AND-RECEIVED CASELAW CLIP(S) AND CITES FROM OTHER COURTS OF APPEALS

"An action for money had and received is an equitable doctrine that courts apply to prevent unjust enrichment." London v. London, 192 S.W.3d 6, 13 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (citing Miller-Rogaska, Inc. v. Bank One, 931 S.W.2d 655, 662 (Tex. App.-Dallas 1996, no writ). "The cause of action is not premised on wrongdoing, but looks to the justice of the case and inquires whether the party has received money that rightfully belongs to another." Id. (citing Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ). The question in an action for money had and received is to which party does the money, in equity and law, belong. Id. (citing Staats v. Miller, 150 Tex. 581, 243 S.W.2d 686, 687 (1951); Tri-State Chems., Inc. v. W. Organics, Inc., 83 S.W.3d 189, 194-95 (Tex. App.-Amarillo 2002, pet. denied)).
ALTERNATIVE CAUSES OF ACTION ON DEBT: breach of contract, credit card agreement or promissory note; open account, account stated, sworn account under TRCP 185, common law debt claim, suit on account


DISTINGUISH FROM: civil cause of action for theft, misappropriation, and conversion

Friday, June 10, 2011

Temporary Injunction – When can the trial court judge grant immediate injunctive relief?

   
TEMPORARY INJUNCTION REQUIREMENTS 
 
Elements of claim for temporary injunctive relief A trial court has broad discretion in deciding whether to deny a temporary injunction. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). We review the denial of a temporary injunction for a clear abuse of discretion without addressing the merits of the underlying case. Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993). We will uphold the trial court’s determination against issuing injunctive relief unless the trial court’s action was so arbitrary that it exceeded the bounds of reasonable discretion. Butnaru, 84 S.W.3d at 204. In reviewing the trial court’s exercise of discretion, the appellate court must draw all legitimate inferences from the evidence in the light most favorable to the trial court’s decision. EMS USA, Inc. v. Shary, 309 S.W.3d 653, 657 (Tex. App.—Houston [14th Dist.] 2010, no pet.). When, as here, no findings of fact or conclusions of law are filed, the trial court’s determination of whether to grant or deny a temporary injunction must be upheld on any legal theory supported by the record. Id. An applicant for a temporary injunction seeks extraordinary relief. In re Tex. Natural Res. Conservation Comm’n, 85 S.W.3d 201, 204 (Tex. 2002). The sole issue before the trial court in a temporary injunction hearing is whether the applicant may preserve the status quo of the litigation’s subject matter pending trial on the merits. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978). The status quo is the last actual, peaceable, noncontested status which preceded the pending controversy. RP & R, Inc. v. Territo, 32 S.W.3d 396, 402 (Tex. App.—Houston [14th Dist.] 2000, no pet.) What must the applicant for temporary injunctive relief show? To obtain a temporary injunction, the applicant must plead a cause of action against the defendant and show both a probable right to recover on that cause of action and a probable, imminent, and irreparable injury in the interim. EMS USA, Inc. v. Shary, 309 S.W.3d 653, 657 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citing Butnaru, 84 S.W.3d at 204). To show a probable right of recovery, the applicant must plead and present evidence to sustain the pleaded cause of action. Id. An injury is irreparable when the injured party cannot be adequately compensated in damages or if damages cannot be measured by any certain pecuniary standard. Id. An existing legal remedy is adequate if it is as complete, practical, and efficient to the ends of justice and its prompt administration as is equitable relief. Hilb, Rogal & Hamilton Co. of Texas v. Wurzman, 861 S.W.2d 30, 32 (Tex. App.—Dallas 1993, no writ.). There is no adequate remedy at law if the plaintiff cannot calculate damages or if a defendant is incapable of responding in damages. Id. The party applying for a temporary injunction has the burden of production, which is the burden of offering some evidence that establishes a probable right to recover and a probable interim injury. Dallas Anesthesiology Associates, P.A. v. Texas Anesthesia Group, P.A., 190 S.W.3d 891, 897 (Tex. App.—Dallas 2006, no pet.). If an applicant does not discharge its burden, it is not entitled to injunctive relief. Id. The applicant for a temporary injunction bears the burden to present evidence sufficient to demonstrate a probable, imminent, and irreparable injury. The harm is irreparable when the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. EMS USA, 309 S.W.3d at 657. Based on the evidence in the appellate record, the trial court could have reasonably concluded that monetary damages would adequately compensate appellant for any alleged loss of investment if it prevailed at trial. Daily Int’l Sales Corp. v. Eastman Whipstock, Inc., 662 S.W.2d 60, 64 (Tex. App.—Houston [1st Dist.] 1983, no writ). An applicant for a temporary injunction has the burden to establish all of the requirements for a temporary injunction. A trial court has broad discretion to determine whether the applicant met that burden. Hilb, Rogal & Hamilton Co. of Texas, 861 S.W.2d at 33. [The appellate court concludes] that, when viewed in the light most favorable to the trial court’s order, the evidence supports the trial court’s refusal to grant injunctive relief. Therefore, [the reviewing court ] concludes the trial court did not abuse its discretion by denying appellant’s application for a temporary injunction.

 SOURCE: Houston Court of Appeals - 14-10-00992-CV – 6/9/11
 
RELATED LEGAL TERMS: temporary injunction, restraining order, TRO, permanent injunction, injunctive relief


Thursday, June 9, 2011

Substantial Performance Doctrine in contract dispute

CONSTRUCTION LAW:
The Substantial Performance Doctrine
Substantial performance is defined as "performance of the primary, necessary terms of an agreement." Black's Law Dictionary 1252 (9th ed. 2009).
The doctrine of substantial performance is not available to a party when that party has made a willful departure from the terms of an agreement or omitted essential points of a project. See E.P. Towne, 242 S.W.3d at 125; Smith v. Smith, 112 S.W.3d 275, 279 (Tex. App.--Corpus Christi 2003, pet. denied).
The substantial performance doctrine originated and is still mostly used in the context of construction contracts. See Vance v. My Apartment Steak House, Inc., 677 S.W.2d 480, 482 (Tex. 1984); Turner, Collie & Braden, Inc. v. Brookhollow, Inc., 642 S.W.2d 160, 164 (Tex. 1982); RAJ Partners, Ltd. v. Darco Constr. Corp., 217 S.W.3d 638, 643 (Tex. App.--Amarillo 2006, no pet.); Beard Family P'ship v. Commercial Indem. Ins. Co., 116 S.W.3d 839, 844 (Tex. App.--Austin 2003, no pet.).
But the doctrine has also been expanded to other types of contracts. See, e.g., E.P. Towne Ctr. Partners, L.P. v. Chopsticks, Inc., 242 S.W.3d 117, 124-25 (Tex. App.--El Paso 2007, no pet.) (applied to settlement agreement); Geotech Energy Corp. v. Gulf States Telecomms. & Info. Sys. Inc., 788 S.W.2d 386, 390 (Tex. App.--Houston [14th Dist.] 1990, no writ) (applied to contract for sale and installation of telephone system); Continental Dredging, Inc. v. De-Kaizered, Inc., 120 S.W.3d 380, 394 (Tex. App.--Texarkana 2003, pet. denied) (applied to contract for dredging services). The down payment and purchase price of property set forth in an agreement are considered essential terms of that agreement. See Liberto v. D.F. Stauffer Biscuit Co., 441 F.3d 318, 324 (5th Cir. 2006) (noting that Texas courts generally construe essential terms of contract to include price to be paid). SOURCE: Austin Court of Appeals - 03-09-00713-CV - 6/3/11
Related terms: construction law, contractors, sub-contractors, draws, retainage

Quantum Meruit & Clean Hands Doctrine

QUANTUM MERUIT AS THEORY OF RECOVERY DEFINED Quantum meruit is an equitable remedy that "'is based upon the promise implied by law to pay for beneficial services rendered and knowingly accepted.'" Vortt Exploration, Inc. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990) (quoting Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988)). Founded on unjust enrichment, quantum meruit "will be had when non-payment for the services rendered would 'result in an unjust enrichment to the party benefitted by the work.'" Id. (quoting City of Ingleside v. Stewart, 554 S.W.2d 939, 943 (Tex. Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.)). CLEAN HANDS REQUIRED FOR RELIEF IN EQUITY A party seeking an equitable remedy, such as quantum meruit, must come to court with "clean hands." In re Gamble, 71 S.W.3d 313, 325 (Tex. 2002) (Baker, J., concurring); Truly, 744 S.W.2d at 938; Omohundro v. Matthews, 161 Tex. 367, 381, 341 S.W.2d 401, 410 (1960). This clean hands doctrine requires that one who seeks equity, does equity; equitable relief is not warranted when the plaintiff has engaged in unconscionable, unjust, or inequitable conduct with regard to the issue in dispute. In re Francis, 186 S.W.3d 534, 551 (Tex. 2006); Thomas v. McNair, 882 S.W.2d 870, 880 (Tex. App.—Corpus Christi 1994, no writ). WHEN IS (UN) CLEAN HANDS DOCTRINE APPLIED? WHEN NOT? The clean hands doctrine is not, however, absolute. Omohundro, 341 S.W.2d at 410. It should not be applied unless the party asserting the doctrine has been harmed and the wrong complained of cannot be corrected without the application of the doctrine. City of Fredericksburg v. Bopp, 126 S.W.3d 218, 221 (Tex. App.—San Antonio 2003, no pet.); Thomas, 882 S.W.2d at 880; see also Omohundro, 341 S.W.3d at 410 (setting out that the party complaining that his opponent is in court with "unclean hands . . . must show that he himself has been injured by such conduct" and "the wrong must have been done to the defendant himself and not to some third party"); Afri Carib Enters., Inc. v. Mabon Ltd., 287 S.W.3d 217, 222 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (explaining that the trial court cannot apply the clean hands doctrine unless "the misconduct at issue is connected to the subject of the litigation and the party asserting the defense has been seriously harmed by the misconduct"). SOURCE: Corpus Christi Court of Appeals - 13-09-00355-CV - 6/9/11 UNCLEAN HANDS CASE LAW CITES FROM OTHER COURTS, INCLUDING TEXAS SUPREME COURT Truly v. Austin, 744 S.W.2d 934, 938 (Tex. 1988) ("It is well-settled that a party seeking an equitable remedy must do equity and come to court with clean hands."). A party seeking to invoke this equitable doctrine must show that he has been seriously harmed and the wrong complained of cannot be corrected without applying the doctrine. City of Fredericksburg v. Bopp, 126 S.W.3d 218, 221 (Tex. App.-San Antonio 2003, no pet.). A party seeking an equitable remedy must do equity and come to court with clean hands. Truly v. Austin, 744 S.W.2d 934, 938 (Tex.1988); Crown Constr. Co. v. Huddleston, 961 S.W.2d 552, 559 221*221 (Tex.App.-San Antonio 1997, no pet.). The doctrine of unclean hands applies to a litigant whose own conduct in connection with the same matter or transaction has been unconscientious, unjust, marked by a want of good faith or violates the principles of equity and righteous dealing. Crown Constr. Co., 961 S.W.2d at 559; Thomas v. McNair, 882 S.W.2d 870, 880 (Tex.App.-Corpus Christi 1994, no writ). A party seeking to invoke this equitable doctrine must show that he has been seriously harmed and the wrong complained of cannot be corrected without applying the doctrine. Thomas, 882 S.W.2d at 880. A party seeking to invoke this equitable doctrine must show that he has been seriously harmed and the wrong complained of cannot be corrected without applying the doctrine. City of Fredericksburg v. Bopp, 126 S.W.3d 218, 221 (Tex. App.-San Antonio 2003, no pet.). RELATED LEGAL TERMS: equitable claims and remedies, clean and unclean hands doctrine, equitable estoppel