Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Thursday, August 18, 2011

When is an equitable estoppel claim viable? No brightline standards or criteria


When will a court go along with invocation of equitable estoppel to do justice?
Texas law includes a number of variations on the general principle of equitable estoppel. See, e.g., Meyer v. WMCO-GP, L.L.C., 211 S.W.3d 302, 306 (Tex. 2006) (interdependent and concerted misconduct estoppel); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding) (direct-benefit estoppel); In re Polymerica, LLC, 271 S.W.3d 442, 449 (Tex. App.-El Paso 2008, orig. proceeding, pet. struck) (substantial- benefit estoppel); Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 136 (Tex. App.-Houston [14th Dist.] 2000, pet. dism'd) (quasi-estoppel).

Estoppel is an equitable doctrine and its application depends on the facts of each case. Van Zanten v. Energy Transfer Partners, L.P., 320 S.W.3d 845, 848-49 (Tex. App.-Houston [1st Dist.] 2010, no pet.) (citing In re Weekley Homes, 180 S.W.3d 127, 134-35 (Tex. 2005)). The lynchpin for all equitable estoppel is equity. Hill v. G E Power Sys., Inc., 282 F.3d 343, 349 (5th Cir. 2002).

SOURCE: Dallas Court of Appeals - 05-11-00634-CV - 8/18/11

Wednesday, August 17, 2011

Contract Construction & Ambiguity (per Houston's 14th Court of Appeals)

Contract interpretation depends on whether contract is ambiguous
In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). We presume the parties to the contract intended every clause to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).

Contract terms are given their plain, ordinary, and generally accepted meanings unless the contract itself shows them to be used in a technical or different sense. Valence Operating Co., 164 S.W.3d at 662. We construe contracts from a utilitarian standpoint, bearing in mind the particular business activity sought to be served. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005). We will avoid, when possible and proper, a construction which is unreasonable, inequitable, and oppressive. Id.

Whether a contract is ambiguous is a question of law. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). A contract is ambiguous when its meaning is uncertain and doubtful or reasonably susceptible to more than one interpretation. Heritage Res., Inc., 939 S.W.2d at 121. A contract is not ambiguous simply because the parties advance conflicting interpretations. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996).

We determine whether a contract is ambiguous by looking to the contract as a whole in light of the circumstances present when the parties executed it. Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981). If a contract is not ambiguous, courts must enforce it as written without considering parol evidence for the purpose of creating an ambiguity or giving the contract “a meaning different from that which its language imports.” David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per curiam).

The contract is not ambiguous if it can be given a certain or definite meaning as a matter of law. Universal Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003).

SOURCE: Houston Court of Appeals - 14-10-00558-CV - 8/16/11

Exemplary Damages in Texas: When are they available?


When are exemplary damages properly awarded in a lawsuit?

Generally, exemplary damages may be awarded only if the claimant proves by clear and convincing evidence that the harm at issue results from (1) fraud; (2) malice; or (3) gross negligence. See Tex. Civ. Prac. & Rem. Code Ann. § 41.003(a) (Vernon 2008).

Malice is defined in this context as “specific intent by the defendant to cause substantial injury or harm to the claimant.” See id. § 41.001(7) (Vernon 2008). Specific intent means that the actor desires to cause the consequences of his act, or that he believes the consequences are substantially certain to result from it. Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985). Malice may be proven by direct or circumstantial evidence. KPH Consolidation, Inc. v. Romero, 102 S.W.3d 135, 144 (Tex. App.—Houston [14th Dist.] 2003), aff’d, 166 S.W.3d 212 (Tex. 2005).

SOURCE: Houston Court of Appeals - 14-10-00195-CV - 8/16/11

The nature of easements


What is an easement?

An easement is a non-possessory interest in another’s property that authorizes the holder to use that property for a particular purpose. Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). An easement does not convey the property itself. Lakeside Launches, Inc. v. Austin Yacht Club, Inc., 750 S.W.2d 868, 871 (Tex. App.—Austin 1988, writ denied). For an easement appurtenant to exist either by implication or in writing, there must be (1) a dominant estate, to which the easement is attached; and (2) a servient estate, which is subject to the use of the dominant estate to the extent of the easement granted or reserved. Drye v. Eagle Rock Ranch, Inc., 364 S.W.2d 196, 207 (Tex. 1962).

In determining whether an easement has been granted expressly, we look to the same rules of construction applicable to deeds. Callejo v. City of Garland, 583 S.W.2d 925, 927 (Tex. App.—Dallas 1979, writ ref’d n.r.e.). Generally, a written instrument is required to validly convey an estate in land. See Tex. Prop. Code Ann. § 5.021 (Vernon 2003). Subject to some exceptions, a writing also is required to create an easement. Drye, 364 S.W.2d at 203.


An implied easement is an exception to the rule that easements appurtenant must be created or transferred in writing. Drye, 364 S.W.2d at 203. It is “universally recognized” that — “without aid of language in the deed, and indeed sometimes in spite of such language” — the circumstances surrounding an owner’s conveyance of part of a previously unified tract of land may cause an easement to arise between the two new parcels. Mitchell v. Castellaw, 246 S.W.2d 163, 167 (Tex. 1952). Such an implied easement may arise in favor of the parcel granted (an implied grant), or in favor of the parcel retained by the grantor (an implied reservation). Id. “The basis of the doctrine is that the law reads into the instrument that which the circumstances show both grantor and grantee must have intended, had they given the obvious facts of the transaction proper consideration.” Id.

There are two forms of implied easement in Texas. The first is an easement by necessity, commonly called a “way of necessity.” See, e.g., Koonce v. Brite Estate, 663 S.W.2d 451, 452 (Tex. 1984); Duff v. Matthews, 311 S.W.2d 637, 640 (Tex. 1958). An easement by necessity is implied when the conveyed or retained parcel cannot be accessed except by traveling over the remaining tract of land. See Koonce, 663 S.W.2d at 452 (citing Bains v. Parker, 182 S.W.2d 397 (Tex. 1944)). An easement by necessity has three requirements: (1) unity of ownership of both parcels prior to separation; (2) access must be a necessity and not a mere convenience; and (3) the necessity must exist at the time of severance. Id. (citing Duff, 311 S.W.2d at 641).

A second type of implied easement is based on prior use of the land and is called an easement implied from a “quasi-easement.” See, e.g., Drye, 364 S.W.2d at 207–08; Ulbricht v. Friedsam, 325 S.W.2d 669, 676–77 (Tex. 1959). The Texas Supreme Court has identified the circumstances under which such an easement may be implied:

If an owner used one part of his land for the benefit of another portion of his own land, the portion served had a ‘quasi-dominant tenement’ [and] [t]he portion which was used was subject to a ‘quasi-servient tenement.’ . . . [W]hen the owner, under those circumstances, sold the portion of his land which had [made] use of the other portion — as for drainage, support, way, or water [— and that use was] apparent, continuous, and necessary to the use of the ‘dominant’ land sold, the courts presumed that the necessary use of the ‘servient’ tract passed by implication to the purchaser.

Drye, 364 S.W.2d at 207. A party claiming an easement by prior use must prove that at the time of the severance: (1) both parcels were under unified ownership; (2) the use was apparent; (3) the use was continuous; and (4) the use was necessary to the use of the dominant estate. Drye, 364 S.W.2d at 207–08; see also Bickler v. Bickler, 403 S.W.2d 354, 357 (Tex. 1966).

Texas courts routinely refer to implied easements based on prior use characteristics simply as “implied easements.” See Mack v. Landry, 22 S.W.3d 524, 530 (Tex. App.—Houston [14th Dist.] 2000, no pet.) (distinguishing between “easement by necessity” related to inaccessible tract of land and “implied easement” based on prior use characteristics); see also State v. Beeson, 232 S.W.3d 265, 273 n.7 (Tex. App.—Eastland 2007, pet. dism’d) (noting that the plaintiffs’ assertion of an implied easement was raised under theory of easement by necessity and was not governed by standards for “implied easement” based on prior use characteristics). The general term “implied easement” is potentially confusing because, by definition, both an easement by necessity and an easement by prior use are implied. See Othen v. Rosier, 226 S.W.2d 622, 626 (Tex. 1950); see also Beeson, 232 S.W.3d at 273 n.7; Mack, 22 S.W.3d at 530.[4]

The “strict necessity” requirement applies to an implied reservation of an easement, and the “reasonable necessity” requirement applies to an implied grant of an easement. See Houston Bellaire, Ltd. v. TCP LB Portfolio I, L.P., 981 S.W.2d 916, 921 (Tex. App.—Houston [1st Dist.] 1998, no pet.) (citing Mitchell, 246 S.W.2d at 168, and Howell v. Estes, 12 S.W. 62, 63 (Tex. 1888)). This rule applies to the element of necessity that is relevant to easements by necessity and to easements by prior use. See Mitchell, 246 S.W.2d at 168 (applying strict necessity rule from “way of necessity” precedent to claim involving reserved easement by prior use); see also Howell, 12 S.W. at 62–63 (“We think the weight of authority sustains the proposition that if an improvement [meets the requirements of an easement by prior use], the use of such improvement will pass as an easement, although it may not be absolutely necessary to the enjoyment of the [benefitted] estate conveyed.”). The Sebers correctly assert that if the right to use the crossing was conveyed as an impliedly granted easement, then they need show only reasonable necessity. See Mitchell, 246 S.W.2d at 168; Howell, 12 S.W. at 62–63.

An easement by necessity is temporary; it continues only so long as the necessity exists and terminates upon the cessation of the necessity. Bains, 182 S.W.2d at 399. Under this rule, a grantee must establish that its use of the easement continues to be “reasonably necessary” to its use of its property. See id. However, the Sebers expressly deny that they claim an easement by necessity; therefore, they need not establish that their use of the crossing continues to be reasonably necessary to their use of their larger tract of land. The dispute here centers on an easement by prior use. We have not identified and the parties do not cite any Texas authority applying this “continued necessity” rule to an otherwise valid implied easement by prior use. Cf. Zapata Cnty. v. Llanos, 239 S.W.2d 699, 702 (Tex. Civ. App.—San Antonio 1951, writ ref’d n.r.e.) (“‘A presumption frequently invoked [as justification for easements by prior use is] that the parties contracted with a view to the condition of the property as it actually was at the time of the transaction, and after sale neither party without the consent of the other has a right to change, to the detriment to the other, that condition which openly and visibly existed. . . . The rule itself, since it presupposes the existence of quasi easements, must be distinguished from the principle which underlies the creation of ways of necessity.’”) (quoting Miles v. Bodenheim, 193 S.W. 693, 696 (Tex. Civ. App.—Texarkana 1917, writ ref’d)).

Applying the “continued necessity” rule to easements by prior use would contradict the principle that the existence of such an easement depends only on the situation of the parties at the time of severance. See Westbrook v. Wright, 477 S.W.2d 663, 665–66 (Tex. Civ. App.—Houston [14th Dist.] 1972, no writ) (“Whether these requirements are met is to be determined at the time the grantor, the one imposing the quasi easement on one portion of his property for the benefit of another portion, conveys away the dominant tenement, that portion benefitted, and retains the servient tenement.”); see also Daniel v. Fox, 917 S.W.2d 106, 110 (Tex. App.—San Antonio 1996, writ denied) (“The situation of the parties at the time of the [partition] constitutes the operative facts to support the claim [of an impliedly granted easement based on prior use characteristics].”); Hoak v. Ferguson, 255 S.W.2d 258, 260 (Tex. Civ. App.—Fort Worth 1953, writ ref’d n.r.e.) (same).

Property ownership or a right to physical possession of real property is a necessary element of a trespass claim. See Tex. Women’s Univ. v. The Methodist Hosp., 221 S.W.3d 267, 286 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (“To recover damages for trespass to real property, a plaintiff must prove that . . . the plaintiff owns or has a lawful right to possess real property . . . .”). An easement is a non-possessory interest in land. See Marcus Cable Assocs., L.P., 90 S.W.3d at 700; Lakeside Launches, Inc., 750 S.W.2d at 871.

SOURCE: Houston Court of Appeals - 14-10-00195-CV - 8/16/11

Tort Claims Act & Recreational Use Statute - Premises Liability Suits against Governmental Defendants


To what extent and under what circumstances does the Texas Tort Claims Act (TTCA) waive immunity of governmental entities? How does it interact with the Recreational Use Statute?

The Texas Tort Claims Act grants a limited waiver of governmental immunity in certain circumstances: use of publicly owned automobiles, premises defects, and injuries arising out of conditions or use of property. Tex. Civ. Prac. & Rem. Code Ann. §§ 101.021, 101.022; see Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225 (Tex. 2004). For example, in a claim based on a premises defect, the municipality owes to the claimant only the duty owed a licensee on private property, unless the claimant pays for the use of the property. Tex. Civ. Prac. & Rem. Code Ann. § 101.022(a).

The duty owed some claimants is restricted further by the Tort Claims Act's incorporation of the Recreational Use Statute. See id. § 101.058. That section provides:

To the extent that Chapter 75 [i.e., the Recreational Use Statute] limits the liability of a governmental unit under circumstances in which the governmental unit would be liable under this chapter, Chapter 75 controls.

Id. The Recreational Use Statute, in turn, provides:

[I]f a person enters premises owned, operated, or maintained by a governmental unit and engages in recreation on those premises, the governmental unit does not owe to the person a greater degree of care than is owed to a trespasser on the premises.

Id. § 75.002(f) (West Supp. 2010).

The statute lists a number of activities that qualify as “recreation,” including nature study (which specifically includes bird-watching) and any other activity associated with enjoying nature or the outdoors. Id. § 75.001(3). And as to the duty owed, a landowner has no duty to warn or protect trespassers from obvious defects or conditions. State v. Shumake, 199 S.W.3d 279, 288 (Tex. 2006). The only duty a premises owner owes a trespasser is not to injure him willfully, wantonly, or through gross negligence. Tex. Utils. Elec. Co. v. Timmons, 947 S.W.2d 191, 193 (Tex. 1997). See Footnote 1 Thus, a municipality waives immunity under the Tort Claims Act and the Recreational Use Statute if the municipality's conduct is grossly negligent. Miranda, 133 S.W.3d at 225. Gross negligence requires that the landowner be actually, subjectively aware of-and consciously indifferent to-an extreme risk of harm. Shumake, 199 S.W.3d at 288.
The existence of subject matter jurisdiction is a question of law. Miranda, 133 S.W.3d at 226. We review the trial court's ruling de novo. Id at 228. When the plea challenges the claimant's pleadings, we determine whether the claimant has pleaded facts that affirmatively demonstrate the trial court's jurisdiction, construing the pleadings liberally and in favor of the claimant. Id. at 226. If the pleadings affirmatively negate jurisdiction, the plea should be granted. Id. at 227. When the plea challenges the existence of jurisdictional facts, we consider evidence submitted by the parties just as the trial court did. Id. We take as true all evidence favorable to the claimant, and we indulge all reasonable inferences in her favor. Id. at 228. If the evidence is undisputed or if it does not raise a fact question on the jurisdictional issue, then the plea can be resolved as a matter of law. Id. If the evidence raises a fact question on the jurisdictional issue, then the fact finder must resolve the issue at trial. Id.

SOURCE: Dallas Court of Appeals - 05-10-00727-CV - 8/15/11

Actual knowledge requirement in premises defect litigation

Premises liability: Did Premises Owner/Operator have actual knowledge of defect, dangerous condition?

As a threshold requirement in a premises liability claim, the plaintiff must prove that the defendant had actual or constructive knowledge of a premises defect. Motel 6 G.P., Inc. v. Lopez, 929 S.W.2d 1, 3 (Tex. 1996). A plaintiff may prove notice by establishing that the defendant actually knew that the condition was dangerous or that it is more likely than not that the condition existed long enough to give the owner-operator a reasonable opportunity to discover it. See Wal-Mart Stores, Inc. v. Reece, 81 S.W.3d 812, 814 (Tex. 2002). While there is no one test for determining actual knowledge that a condition presents an unreasonable risk of harm, a relevant consideration is whether the owner-operator has received prior reports of the danger presented by the condition or prior reports of injuries. Univ. of Tex.-Pan Am. v. Aguilar, 251 S.W.3d 511, 513 (Tex. 2008) (citing Brinson Ford, 228 S.W.3d at 163). Additionally, “[t]he fact that the owner or occupier of a premises created a condition that posed an unreasonable risk of harm may support an inference of knowledge.” Rice Food Mkt., Inc. v. Hicks, 111 S.W.3d 610, 613 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (quoting Keetch v. Kroger Co., 845 S.W.2d 262, 265 (Tex. 1992)) (internal quotation marks omitted). Constructive knowledge, which is defined as knowledge that a person, after reasonable inspection, ought to have or has reason to have, may be imputed when the premises owner-operator had a reasonable opportunity to discover and to remedy an allegedly dangerous condition. Reece, 81 S.W.3d at 814; Hall v. Sonic Drive-In of Angleton, Inc., 177 S.W.3d 636, 645 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

SOURCE: Houston Court of Appeals - 01-09-00492-CV - 8/11/11 (with dissent)

Inquiry into elements of premises liability claim in Texas: Forseeability of injury

Premises liability: Did the condition pose unreasonable risk of harm?

A condition poses an unreasonable risk of harm when there is a “sufficient probability of a harmful event occurring that a reasonably prudent person would have foreseen it or some similar event as likely to happen.” Hall, 177 S.W.3d at 646 (quoting Cnty. of Cameron v. Brown, 80 S.W.3d 549, 556 (Tex. 2002)) (internal quotation marks omitted). “Foreseeability in this context ‘does not require that the exact sequence of events that produced an injury be foreseeable.’ Instead, only the general damage must be foreseeable.” Id. (quoting Cnty. of Cameron, 80 S.W.3d at 556) (internal citations omitted). Evidence of a similar injury or complaint caused by the condition is probative on the question of whether the condition posed an unreasonable risk of harm. Id.; see also Klorer, 717 S.W.2d at 761. Whether a particular condition poses an unreasonable risk of harm is generally fact specific, and there is no definitive test for determining whether a specific condition presents an unreasonable risk of harm. Hall, 177 S.W.3d at 656 (citing Reliable Consultants, Inc. v. Jaquez, 25 S.W.3d 336, 342 (Tex. App.—Austin 2000, pet. denied)).

SOURCE: Houston Court of Appeals - 01-09-00492-CV - 8/11/11 (with dissent)

Premises liability: Reasonable Care Element


Did Owner-operator exercise reasonable care to eliminate known risk?

A defendant breaches its duty of care if it fails to exercise ordinary care to protect the plaintiff from danger by failing to adequately warn the plaintiff of the condition and by failing to make the condition reasonably safe. See Reece, 81 S.W.3d at 814; CMH Homes, 15 S.W.3d at 101. The duty to use ordinary care toward invitees includes the duty to inspect the premises, and the premises owner-operator is charged with constructive knowledge of any premises defect or other dangerous condition that a reasonably careful inspection would have revealed. See CMH Homes, 15 S.W.3d at 101; Corbin, 648 S.W.2d at 295. When an owner-operator has notice of a condition on the premises that poses an unreasonable risk of harm, he has a duty to take whatever action is reasonably prudent under the circumstances to reduce or eliminate the unreasonable risk. Corbin, 648 S.W.2d at 295.

SOURCE: Houston Court of Appeals - 01-09-00492-CV - 8/11/11 (with dissent)

Causality in premises liability litigation: Did failure to exercise reasonable care proximately cause the plaintiff’s injuries?


Did failure to exercise reasonable care proximately cause the injuries suffered by plaintiff

To prevail in an action for premises liability, an invitee must establish that the defendant’s lack of care proximately caused his injuries. CMH Homes, 15 S.W.3d at 99; Hall, 177 S.W.3d at 647. Proximate cause consists of cause-in-fact and foreseeability. Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996). A defendant’s negligence is the cause-in-fact of the plaintiff’s injuries if the negligent act or omission was a substantial factor in bringing about the injury, without which the harm would not have occurred. Hall, 177 S.W.3d at 648. Foreseeability “means that the actor, as a person of ordinary intelligence, should have anticipated the dangers that his negligent act created for others.” Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549–50 (Tex. 1985). It requires only that the general danger, not the exact sequence of events that produced the harm, be foreseeable. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996); Hall, 177 S.W.3d at 648.

SOURCE: Houston Court of Appeals - 01-09-00492-CV - 8/11/11 (with dissent)

SoL for HCLC: What is the limitations period for a med-mal claim?

Limitations Period for Health-Care-Liability Claims

A health-care-liability claim has a two-year limitations period. Tex. Civ. Prac. & Rem. Code Ann. § 74.251(a) (West 2005). The statute tolls the limitations period for 75 days if the claimant notifies the physician of the claim against the physician in the manner that Chapter 74 requires. Id. § 74.051(c) (West 2005); Rubalcaba v. Kaestner, 981 S.W.2d 369, 373 (Tex. App.—Houston [1st Dist.] 1998, pet. denied); see Rowntree v. Hunsucker, 833 S.W.2d 103, 108 (Tex. 1992).[3]

We measure the limitations period from (1) the date that the breach or tort occurred, (2) the last date of a course of treatment for a particular condition, or (3) the last date of a hospitalization for which a claim is made. Tex. Civ. Prac. & Rem. Code Ann. § 74.251(a); Rowntree, 833 S.W.2d at 104. If we can ascertain the date the alleged beach or tort occurred, then the limitations period must be measured from that date; inquiry into the second and third potential dates is unnecessary and immaterial. Id.

SOURCE: Houston Court of Appeals - 01-10-00569-CV - 8/11/11

Med-Mal Suit Elements: Proving Causation in a HCLC

 In a medical malpractice case, the plaintiff must prove that (1) the defendant owed him a duty to act according to an applicable standard of care, (2) the defendant breached the applicable standard of care, (3) he suffered an injury, and (4) within a reasonably medical probability, the defendant’s breach proximately caused his injury. Mariner Health Care of Nashville, Inc. v. Robins, 321 S.W.3d 193, 205 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Proximate cause has two components: causation in fact and foreseeability. W. Invs. Inc. v. Urena, 162 S.W.3d 547, 551 (Tex. 2005). “The test for cause in fact is whether the act or omission was a substantial factor in causing the injury without which the harm would not have occurred.” Id. Evidence that shows only that the defendant’s negligence furnished a condition that made the injuries possible is insufficient to show proximate cause. Id. Proximate cause cannot be established by mere conjecture, guess, or speculation. Id. In a medical malpractice case, proximate cause must be established through expert testimony. Robins, 321 S.W.3d at 205.

SOURCE: Houston Court of Appeals - 01-10-00569-CV - 8/11/11

Tuesday, August 16, 2011

Criminal Defendant's Malpractice Claim against his Defense Attorney: What proof is required?

Legal Malpractice Claim arising from attorney representation in criminal case

The elements of a legal-malpractice claim are (1) counsel owed the plaintiff a duty, (2) counsel breached that duty, (3) the breach proximately caused the plaintiff's injuries, and (4) damages occurred. Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995).

In Peeler, the supreme court held that “plaintiffs who have been convicted of a criminal offense may negate the sole proximate cause bar to their claim for legal malpractice in connection with that conviction only if they have been exonerated on direct appeal, through post-conviction relief, or otherwise.” Id. at 497–98.

The court cited public policy concerns that convicts should not profit from their illegal conduct and allowing civil recovery for convicts would impermissibly shift responsibility for the crime away from the convict. Id. at 498. Therefore, as a matter of law, it is the illegal conduct rather than counsel’s negligence that is the cause in fact of any injuries flowing from the conviction unless it has been overturned. Id.

SOURCE: Houston Court of Appeals - 14-10-00311-CV - 8/16/11

Rule 11 Settlement Agreement and Mediated Settlement Agreements (MSA) enforced as contracts

The MSA is a contract and is therefore governed by the same rules of construction applicable to all contracts. See Doe v. Tex. Ass'n of Sch. Bds., Inc., 283 S.W.3d 451, 458 (Tex. App.-Fort Worth 2009, pet. denied). Thus, in construing the MSA, our primary concern is ascertaining the true intent of the parties as expressed in the agreement. Id. (citing NP Anderson Cotton Exch., L.P. v. Potter, 230 S.W.3d 457, 463 (Tex. App.-Fort Worth 2007, no pet.)); see Republic Nat'l Bank of Dallas v. Nat'l Bankers Life Ins. Co., 427 S.W.2d 76, 79-80 (Tex. Civ. App.-Dallas 1968, writ ref'd n.r.e.) (noting that courts should not consider the "intention which the parties may have had, but failed to express in the instrument"). "Words in a contract must carry their ordinary, generally accepted meanings unless the contract itself shows that the terms have been used in a technical or different sense. In construing a contract, we may not rewrite it nor add to its language." Doe, 283 S.W.3d at 458 (citation omitted). The interpretation of an unambiguous contract is a matter of law to be determined by the trial court. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000).

SOURCE: Fort Worth Court of Appeals, 02-10-00282-CV - 7/21/11


Written settlement agreements and rule 11 agreements may be enforced as contracts even if one party withdraws consent before judgment is entered on the agreement. Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009); Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995); see Tex. Civ. Prac. & Rem. Code Ann. § 154.071(a) (West 2011) ("If the parties reach a settlement and execute a written agreement disposing of the dispute, the agreement is enforceable in the same manner as any other written contract."); Tex. R. Civ. P. 11; City of Roanoke v. Town of Westlake, 111 S.W.3d 617, 626 (Tex. App.-Fort Worth 2003, pet. denied). When consent is withdrawn, an agreed judgment based on the settlement agreement is inappropriate; instead, the party seeking enforcement of the settlement agreement must pursue a claim for breach of contract. Ford Motor Co., 279 S.W.3d at 663; Padilla, 907 S.W.2d at 461 ("Although a court cannot render a valid agreed judgment absent consent at the time it is rendered, this does not preclude the court, after proper notice and hearing, from enforcing a settlement agreement . . . even though one side no longer consents to the settlement."); Alcantar v. Okla. Nat'l Bank, 47 S.W.3d 815, 819 (Tex. App.-Fort Worth 2001, no pet.).

A settlement agreement can be enforced as a contract by the trial court only after proper pleading, notice, hearing, and proof. Ford, 279 S.W.3d at 663; Padilla, 907 S.W.2d at 462; Neasbitt v. Warren, 105 S.W.3d 113, 117 (Tex. App.-Fort Worth 2003, no pet.); see also Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658 (Tex. 1996) (orig. proceeding) ("Where the settlement dispute arises while the trial court has jurisdiction over the underlying action, a claim to enforce the settlement agreement should, if possible, be asserted in that court under the original cause number.").


Although an amended pleading is one method of raising a claim that a settlement agreement should be enforced as a contract, we have held that a motion seeking enforcement of the settlement agreement is a sufficient pleading to allow a trial court to render judgment enforcing the settlement because such a motion gives the alleged breaching party an opportunity to defend itself. Neasbitt, 105 S.W.3d at 117; see Twist v. McAllen Nat'l Bank, 248 S.W.3d 351, 361 (Tex. App.-Corpus Christi 2007, orig. proceeding [mand. denied]) (holding that an oral motion to enforce a settlement agreement was sufficient because "[a]s long as the motion recites the terms of the agreement, states that the other party has revoked its previously stated consent to the agreement, and requests the trial court to grant relief, the motion is sufficient"); Bayway Servs., Inc. v. Ameri-Build Constr., L.C., 106 S.W.3d 156, 160 (Tex. App.-Houston [1st Dist.] 2003, no pet.). If the motion satisfies the general purposes of pleadings, which is to give the other party fair notice of the claim and the relief sought, it is sufficient to allow the trial court to render judgment enforcing the settlement. Twist, 248 S.W.3d at 361; Neasbitt, 105 S.W.3d at 117.[

SOURCE: Abdulwahab v. Sam's Real Estate Business Trust (Tex.App.- Fort Worth, Jul. 21, 2011)

Saturday, August 13, 2011

DRUNK DRIVING & TEXAS DRAM SHOP ACT - Liability for selling/serving alcohol to intoxicated person who then causes accident or other harm


The "waiter/waitress/bartender-was-trained-and-certified" defense

The Dram Shop Act imposes liability on providers of alcohol for the actions of intoxicated customers if: (1) at the time of the provision it was apparent to the provider that the customer was obviously intoxicated to the extent that he presented a clear danger to himself and others; and (2) the intoxication of the customer was a proximate cause of the damages suffered. See Tex.Alco.Bev.Code Ann. § 2.02(b)(West 2007).

However, the Act also contains a section eliminating this liability under certain circumstances. See Tex.Alco.Bev.Code Ann. § 2.02(b); Tex.Alco.Bev.Code Ann. § 106.14(a)(West 2007). Under the “safe harbor” provision, the actions of an employee in over-serving a patron “shall not be attributable to the employer if: (1) the employer requires its employees to attend a commission-approved seller training program; (2) the employee has actually attended such a training program; and (3) the employer has not directly or indirectly encouraged the employee to violate such law.” Tex.Alco.Bev.Code Ann. § 106.14(a).

The provision intends to provide a broad shelter from liability for a provider who has complied with the first two elements while also ensuring that this shelter not be abused. 20801, Inc. v. Parker, 249 S.W.3d 392, 398 (Tex. 2008). As such, Section 106.14(a) has been interpreted to include both an affirmative defense, contained in the first two elements, as well as a potential rebuttal to that defense if the claimant can demonstrate that the employer directly or indirectly encouraged the server to continue to serve an intoxicated patron. See Parker, 249 S.W.3d at 398. Encouragement may be shown, at the minimum, by evidence of the provider’s negligence. Id. at 394.

By comparison, “negligence” in Dram Shop cases implies that the provider has engaged in behavior that a reasonable provider would not have done under the same or similar circumstances, or the provider has failed to do what a reasonable provider would have done under the same or similar circumstances. Parker, 249 S.W.3d at 398. The circumstances that should be taken into consideration include a provider’s awareness of, and reliance on, its employees’ successful completion of an approved seller training program. Id. For example, a provider might, without so intending, encourage its employees to over-serve by serving obviously intoxicated persons himself and thus modeling inappropriate behavior, or by failing to punish over-service, or by setting an excessively high minimum sales quota without regard to the number of patrons. Id. However, a provider, after having otherwise met its burden under Section 106.14(a), is not required to demonstrate enforcement on the occasion giving rise to the cause of action. Parker, 249 S.W.3d at 399.

SOURCE: El Paso Court of Appeals - 08-09-00263-CV - 8/11/11

Doctrine of equitable subrogation explained


What is Equitable Subrogation under Texas law? When can it be asserted?

The doctrine of equitable subrogation prevents unjust enrichment when one person confers upon another a benefit that is not required by legal duty or contract. Smart v. Tower Land & Inv. Co., 597 S.W.2d 333, 337 (Tex. 1980).

A payor who confers a benefit as a “mere volunteer” is not entitled to the remedy of equitable subrogation. Id. Therefore, the “party seeking equitable subrogation must show it involuntarily paid a debt primarily owed by another in a situation that favors equitable relief.” Frymire Eng'g Co., Inc. ex rel. Liberty Mut. Ins. Co. v. Jomar Intern., Ltd., 259 S.W.3d 140, 142 (Tex. 2008).

Voluntary vs. involuntary payment (of property taxes)

A payment is voluntary when the payor acts “without any assignment or agreement for subrogation, without being under any legal obligation to make payment, and without being compelled to do so for the preservation of any rights or property.” Id. at 145 (quoting First Nat'l Bank of Kerrville v. O'Dell, 856 S.W.2d 410, 415 (Tex. 1993)).

Real estate note holder's payment of taxes on subject property not considered voluntary

A person who pays property taxes assessed on property owned by another may be entitled to subrogation to the taxing authority's lien either by statute or by express agreement. Smart, 597 S.W.2d at 338. A mortgagee's interest in the security of his mortgage makes him more than a “mere volunteer” when he pays taxes owed by the mortgagor. Id.

SOURCE: Dallas Court of Appeals - 05-09-00788-CV - 8/11/11

Pre-injury release as bar to subsequent lawsuit


Release is an affirmative defense. Tex. R. Civ. P. 94. The effect of a release like the one at issue in this case “is to relieve a party in advance of responsibility for its own negligence.” Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 507 (Tex. 1993). “It operates to extinguish the claim or cause of action as effectively as would a prior judgment between the parties and is an absolute bar to any right of action on the released matter.” Id. at 508.

Because a pre-injury release of a party's “own negligence is an extraordinary shifting of risk, [the Texas Supreme Court] has developed fair notice requirements which apply to these types of agreements.” Id. To constitute fair notice, a release must satisfy the requirements of conspicuousness and the express negligence rule. Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004); Dresser, 853 S.W.2d at 508. Whether a provision provides fair notice is a question of law for the courts. Dresser, 853 S.W.2d at 509.
The business and commerce code's standard for conspicuousness applies to our determination of whether a release is conspicuous. Mickens v. Longhorn DFW Moving, Inc., 264 S.W.3d 875, 879 (Tex. App.-Dallas 2008, pet. denied) (citing Dresser, 853 S.W.2d at 510-11). It states:

(10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous terms include the following:
(A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and
(B) language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

Tex. Bus. & Com. Code Ann. § 1.201(10) (West 2009). The test for the court is “whether attention can reasonably be expected to be called to [the provision].” Mickens, 264 S.W.3d at 879 (quoting Littlefield v. Schaefer, 955 S.W.2d 272, 275 (Tex. 1997)); Sydlik v. REEIII, Inc., 195 S.W.3d 329, 332-33 (Tex. App.-Houston [14th Dist.] 2006, no pet.). 
The express negligence rule states that if a party intends to be released from its own future negligence it must express that intent in clear, unambiguous terms within the four corners of the contract. Reyes, 134 S.W.3d at 192; Sydlik, 195 S.W.3d at 333. The purpose of “the express negligence rule is to require scriveners to make it clear when the intent of the parties is to exculpate” a party for that party's own negligence. Atlantic Richfield Co. v. Petroleum Pers., Inc., 768 S.W.2d 724, 726 (Tex. 1989). Language that specifically refers to “any negligent act of [the released party]” may be sufficient to define the parties' intent. Id.
SOURCE: Dallas Court of Appeals - 05-10-00146-CV - 8/11/11

Friday, August 12, 2011

Can oral testimony be offered to interpret a contract?

Is oral testimony permitted to aid court's interpreting a contract?


Although extrinsic evidence is generally not admissible to vary the terms of an unambiguous agreement, extrinsic evidence may "be admissible to give the words of a contract a meaning consistent with that to which they are reasonably susceptible, i.e., to 'interpret' contractual terms." Mescalero Energy, Inc. v. Underwriters Indem. General Agency, Inc., 56 S.W.3d 313, 320 (Tex. App. - Houston [1st Dist.] 2001, pet. denied) (quoting National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995)).

And expert testimony may be useful in explaining the commonly understood meaning in the industry of a specialized term. Mescalero, 56 S.W.3d at 320.

In medical cases, the general rule is that expert testimony is necessary to establish causation as to medical conditions laying outside the common knowledge and experience of jurors. Guevara v. Ferrer, 247 S.W.3d 662, 665 (Tex. 2007).

SOURCE: El Paso Court of Appeals - 08-10-00160-CV - 8/10/11

Fraudulent inducement claim requires contract as one of its elements

No viable fraudulent inducement claim in the absence of a contract

A fraudulent inducement claim arises solely in the context of a contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001). The issue of whether a contract was induced by fraud is a dispute involving the parties’ agreement. In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 550 (Tex. 2002).

SOURCE: Beaumont Court of Appeals - 09-11-00349-CV - 8/11/11


A contract is subject to avoidance on the ground of fraud. Williams v. Glash, 789 S.W.2d 261, 264 (Tex.1990); see Cecil v. Zivley, 683 S.W.2d 853, 857 (Tex. App.-Houston [14th Dist.] 1984, no writ). To prevail on a fraudulent-inducement contention, a party must establish the elements of fraud "as they relate to an agreement between the parties." Haase v. Glazner, 62 S.W.3d 795, 798-99 (Tex.2001).
The elements of fraud are (1) a material misrepresentation, (2) made with knowledge of its falsity or without any knowledge of the truth and as a positive assertion, (3) made with the intention that it should be acted on by the other party, and (4) the other party acts in reliance on the misrepresentation and thereby suffers injury. See Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 47-48 (Tex.1998).

SOURCE: Houston Court of Appeals -   No. 14-09-00312-CV - 7/26/2011
McLernon v Dynegy, Inc, 347 S.W.3d 315 (Tex.App. - Houston [14th Dist.] 2011)

Standard for Imposition of Sanctions (TRCP 13) - Presumption of good faith pleading


When are sanctions proper for filing of a dubious pleading?

A trial court may impose sanctions if a pleading is groundless and brought in bad faith or for the purpose of harassment. Tex. R. Civ. P. 13. A pleading is groundless if it has “no basis in law or fact” and is “not warranted by good faith argument for the extension, modification, or reversal of existing law.” Id.

Courts must presume that a lawsuit has been filed in good faith, and a party moving for sanctions must overcome this presumption. Daves v. Daniels, 319 S.W.3d 938, 941 (Tex. App.—Austin 2010, pet. denied); Appleton v. Appleton, 76 S.W.3d 78, 86 (Tex. App.—Houston [14th Dist.] 2002, no pet.). In determining whether to award sanctions, a trial court must examine the facts and circumstances in existence at the time a pleading was filed to determine whether sanctions are proper. Appleton, 76 S.W.3d at 86.

Bad faith does not exist when a party merely exercises bad judgment or is negligent; rather bad faith is the conscious doing of a wrong for dishonest, discriminatory, or malicious purposes. Elkins v. Stotts-Brown, 103 S.W.3d 664, 669 (Tex. App.—Dallas 2003, no pet.). To “harass” means to annoy, alarm, and verbally abuse another person. Id.

SOURCE: Houston Court of Appeals - 01-10-00586-CV - 8/11/11

Thursday, August 11, 2011

Res judicata based on prior federal court judgment

Res judicata defense based on prior action in federal court

The claim-preclusive effect of a federal-court judgment on a federal-question claim is determined by federal res judicata principles. Semtek Int’l. Inc. v. Lockheed Martin Corp., 531 U.S. 497, 507, 121 S. Ct. 1021, 1027 (2001); see John G. Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d 268, 287 (Tex. 2002).

Under the doctrine of res judicata, a party is precluded from litigating a claim in a pending action if (1) in a previous action, a court of competent jurisdiction rendered a final judgment on the merits of a claim, (2) the parties that litigated the prior claim are identical to or in privity with the parties litigating the pending claim, and (3) the pending claim (a) is identical to the prior claim or (b) arises out of the same nucleus of operative facts as did the prior claim and could have been litigated in the previous action. In re Paige, 610 F.3d 865, 870–72 (5th Cir. 2010); see also Russell v. SunAmerica Sec., Inc., 962 F.2d 1169, 1173 (5th Cir. 1992) (“A non-party defendant can assert res judicata so long as it is in ‘privity’ with the named defendant.”).

For res judicata purposes, “privity” exists if (1) a nonparty agrees to be bound by the determination of issues in an action between others; (2) a pre-existing substantive legal relationship governs a nonparty and a party to a judgment; (3) a party with the same interests adequately represents a nonparty in a prior action; (4) a nonparty assumes control over the litigation in the prior action; (5) a nonparty serves as proxy for a party to a prior action; or (6) a special statutory scheme expressly forecloses successive litigation by nonlitigants and claim preclusion is otherwise consistent with due process. Taylor v. Sturgell, 553 U.S. 880, 893–95, 128 S. Ct. 2161, 2172–73 (2008); id. at 885, 128 S. Ct. at 2167 (disapproving of doctrine of “virtual representation”).

SOURCE: Houston Court of Appeals - 01-10-00569-CV - 8/11/11

Elements of Quantum Meruit Claim


Quantum meruit is an equitable theory of recovery based on an implied agreement to pay for benefits received and knowingly accepted. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Tricon Tool & Supply, Inc. v. Thumann, 226 S.W.3d 494, 502 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).

A party can recover in quantum meruit when non-payment for the services rendered would result in an unjust enrichment to the party benefited by the work. Speck v. First Evangelical Lutheran Church of Houston, 235 S.W.3d 811, 815 (Tex. App.—Houston [1st Dist.] 2007, no pet.). To recover in quantum meruit, the plaintiff must establish that: (1) valuable services and/or materials were furnished, (2) to the party sought to be charged, (3) which were accepted by the party sought to be charged, and (4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient. Heldenfels Bros., 832 S.W.2d at 41 (citing Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990)). The plaintiff must also demonstrate that its efforts “were undertaken for the person sought to be charged; it is not enough to merely show that [its] efforts benefitted the defendant.” Hester v. Friedkin Cos., 132 S.W.3d 100, 106 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (emphasis in original).

SOURCE: Houston Court of Appeals - 01-10-00610-CV - 8/11/11

Sworn Account Pleading Requirements & How to Respond - TRCP 185 and 93(10)(verified denial)


Pleadings requirements for petition and answer - General denial insufficient to controvert prima-facie face created by proper sworn account pleading, but Plaintiff must comply with Rule 185 to take advantage of evidentiary benefits of the sworn account rule.  

Texas Rule of Civil Procedure 185 applies to “any claim for a liquidated money demand . . . [for] labor done or labor or materials furnished . . . .” Tex. R. Civ. P. 185. This rule is not a rule of substantive law; rather, “it is a rule of procedure regarding the evidence necessary to establish a prima facie right of recovery” on certain types of contractual account claims. See Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979); Smith v. CDI Rental Equipment, Ltd., 310 S.W.3d 559, 566 (Tex. App.—Tyler 2010, no pet.); Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.—Dallas 2006, no pet.).

Rule 185 provides that “when an action is founded on an open account on which a systematic record has been kept and is supported by an affidavit, the account shall be taken as prima facie evidence of the claim, unless the party resisting the claim files a written denial under oath.” Panditi, 180 S.W.3d at 926; see Tex. R. Civ. P. 185.

To establish a prima facie case in a suit on a sworn account, the plaintiff must strictly comply with the requirements of Rule 185. Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d 558, 562 (Tex. App.—Dallas 2003, pet. denied).

The plaintiff’s petition “must contain a systematic itemized statement of the services rendered, reveal offsets made to the account, and be supported by an affidavit stating the claim is within the affiant’s knowledge and that it is ‘just and true.’” Id.; see also Panditi, 180 S.W.3d at 926 (stating requirements for sworn account petition and accompanying affidavit). If there is a deficiency in the plaintiff’s sworn account, the account will not constitute prima facie evidence of the debt. Panditi, 180 S.W.3d at 927; Nguyen, 108 S.W.3d at 562.

The defendant resisting the sworn account must also strictly comply with the requirements of Rule 185, “or he will not be permitted to dispute the receipt of the services or the correctness of the charges.” See Panditi, 180 S.W.3d at 927; see also Vance v. Holloway, 689 S.W.2d 403, 404 (Tex. 1985) (per curiam) (“Holloway failed to file a sworn denial and he has, therefore, waived his right to dispute the amount and ownership of the account.”).

Rule 185 requires the defendant to “comply with the rules of pleading” and “timely file a written denial, under oath,” or else the defendant “shall not be permitted to deny the claim, or any item therein.” Tex. R. Civ. P. 185; Panditi, 180 S.W.3d at 927 (noting that Rule 185 requires sworn denial to be written and verified by affidavit). To place the plaintiff’s sworn account claim at issue, the defendant must file a “special verified denial of the account” in accordance with Texas Rule of Civil Procedure 93. See Huddleston v. Case Power & Equip. Co., 748 S.W.2d 102, 103 (Tex. App.—Dallas 1988, no writ); see also Tex. R. Civ. P. 93(10) (“A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit[:] A denial of an account which is the foundation of the plaintiff’s action . . . .”).

This sworn denial must be included in the defendant’s answer; a sworn denial in a response to a summary judgment motion does not satisfy Rule 185. See Cooper v. Scott Irrigation Constr., Inc., 838 S.W.2d 743, 746 (Tex. App.—El Paso 1992, no writ); see also Rush v. Montgomery Ward, 757 S.W.2d 521, 523 (Tex. App.—Houston [14th Dist.] 1988, writ denied) (“Only in the affidavit accompanying his response to Ward’s motion for summary judgment did appellant dispute the correctness and fairness of the charges, and demand additional proof of his liability. Because the combined effect of Texas Rule of Civil Procedure 185 and Texas Rule of Civil Procedure 93(10) required appellant to raise those claims in his answer, we hold that appellant raised his assertions too late.”).

If the defendant fails to file a verified denial to the sworn account, the sworn account is received as prima facie evidence of the debt, and the plaintiff, as summary judgment movant, is entitled to summary judgment on the pleadings. Nguyen, 108 S.W.3d at 562; see Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 430 (Tex. App.—Beaumont 1999, no pet.) (holding that when plaintiff files proper sworn account petition but defendant does not comply with Rule 185, the petition will support summary judgment and “additional proof of the accuracy of the account is unnecessary”).

“In other words, a defendant’s noncompliance with rule 185 conclusively establishes that there is no defense to the suit on the sworn account.” Nguyen, 108 S.W.3d at 562; see Whiteside v. Ford Motor Credit Corp., 220 S.W.3d 191, 194 (Tex. App.—Dallas 2007, no pet.) (“When the defendant fails to file a sworn denial and the trial court enters summary judgment on a sworn account, appellate review is limited because the defendant will not be allowed to dispute the plaintiff’s claim.”).

If, however, the plaintiff’s suit on a sworn account was not properly pleaded pursuant to Rule 185, the defendant is not required to file a sworn denial. Panditi, 180 S.W.3d at 927. In this circumstance, a general denial is sufficient to controvert the account. Tex. Dep’t of Corrs. v. Sisters of St. Francis of St. Jude Hosp., 753 S.W.2d 523, 524 (Tex. App.—Houston [1st Dist.] 1988, no writ).

SOURCE: Houston Court of Appeals - 01-10-00610-CV - 8/11/11

Breach of Restrictive Covenant: Are attorney's fees available?

Suit for Breach of Restrictive Covenant - Statutory Attorney's fees to prevailing party
In “an action based on breach of a restrictive covenant pertaining to real property, the court shall allow to a prevailing party who asserted the action reasonable attorney’s fees in addition to the party’s costs and claim.” Tex. Prop. Code Ann. § 5.006 (Vernon 2010).

In determining reasonable attorney’s fees, the court shall consider (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the expertise, reputation, and ability of the attorney; and (4) any other factor. Id. The award of attorney’s fees under section 5.006 is mandatory, and a court has no discretion to not award fees to a prevailing party. Ski Masters of Texas, LLC v. Heinemeyer, 269 S.W.3d 662, 674 (Tex. App.—San Antonio 2008, no pet.); Mitchell v. LaFlamme, 60 S.W.3d 123, 130 (Tex. App.—Houston [14th Dist.] 2000, no pet.).

SOURCE: Houston Court of Appeals - 01-09-01086-CV - 8/11/11

When can a Plaintiff recover in quantum meruit? When not?

When is quantum meruit available as a theory of recovery, when not?


Equitable theories are generally not available when the Plaintiff's claim involves contractual obligations, but there are exceptions to the express-contract preclusion of alternative non-contract theories. 


Quantum meruit is an equitable and alternative theory of recovery intended to prevent unjust enrichment. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005). A cause of action for quantum meruit arises when a plaintiff establishes that it has provided a valuable service to the defendant, the defendant accepted the service, and the defendant had reasonable notice that the plaintiff expected to receive compensation. See Excess Underwriters at Lloyd’s v. Frank’s Casing Crew & Rental Tools, Inc., 246 S.W.3d 42, 49 (Tex. 2008). 
However, while a party may seek alternative relief under contract and quasi-contract theories, it generally cannot recover under quantum meruit when there is a valid contract covering the services or materials furnished and no exception applies. In re Kellogg Brown & Root, 166 S.W.3d at 740. 


The Texas Supreme Court has recognized only three exceptions to the general rule that an express contract bars recovery under quantum meruit: (1) “when a plaintiff has partially performed an express contract but, because of the defendant’s breach, the plaintiff is prevented from completing the contract”; (2) “when a plaintiff partially performs an express contract that is unilateral in nature”; and (3) in a construction contract, when a breaching plaintiff may recover the reasonable value of services less any damages suffered by the defendant if the defendant accepts and retains the benefits arising from the plaintiff’s partial performance. See Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Prior breach by the other party as excuse for nonperformance under contract

Prior material breach by Plaintiff as a defense to breach-of-contract claim

“It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance.” Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004). However, when a breach is immaterial, the non-breaching party is not excused from future performance and may sue only for the damages caused by the breach. See Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 693 (Tex. 1994). Whether a party’s breach of contract is so material as to render the contract unenforceable is a question of fact to be determined by the trier of fact based on the evaluation of several factors, including the extent to which the non-breaching party will be deprived of the benefit that it could have reasonably anticipated from full performance. See Hernandez, 796 S.W.2d at 693 n.2; Henry v. Masson, 333 S.W.3d 825, 835 (Tex. App.—Houston [1st Dist.] 2010, no pet.).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Sworn Account under TRCP 185 & Breach of Contract: Basic Requirements for each

How to recover on Sworn Account and for Breach of Contract:

There are differences. Rule 185 is limited to certain types of claims and imposes additional procedural requirements.

What is a sworn account? - Sworn Account Suit defined

A suit on a sworn account is “a procedural tool that limits the evidence necessary to establish a prima facie right to recover on certain types of accounts.” Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 234 (Tex. App.—Houston [1st Dist.] 2008, no pet.); see Tex. R. Civ. P. 185.

Rule 185 Suit on Account requisites

To establish a claim under Rule 185 of the Rules of Civil Procedure, a plaintiff must allege that: it sold and performed services for the defendant; the claim is due; the charges were just and true; all lawful offsets, payments, and credits were applied; and the damages are liquidated. The plaintiff must also include in its petition a systematic record of the services provided, which shows with a reasonable degree of certainty the name, date, and charge for each item and provides details on how the total amount was determined. Meaders v. Biskamp, 316 S.W.2d 75, 78 (Tex. 1958); Hou–Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App.—Houston [14th Dist.] 1993, no writ).

Elements of Breach of Contract claim generally

To prevail on its breach of contract claim, [ Plaintiff ] must prove the essential elements of a breach of contract claim, which are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of contract by the defendant; and (4) damages sustained as a result of the breach. Williams, 264 S.W.3d at 235–36 (citing Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.)).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Conditions precedent in a contract & effect of failure to satisfy them - exceptions

Conditions precedent in contracts & waiver thereof

A party seeking to enforce a contract bears the burden of proving that all conditions precedent have been satisfied. Mensa-Wilmont v. Smith Int’l, Inc., 312 S.W.3d 771, 781 (Tex. App.—Houston [1st Dist.] 2009, no pet.). When a party’s obligation under the contract is conditioned upon the happening of a future event, the condition must be performed or fulfilled exactly as set forth in the contract before the promise can be enforced. Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992); Beard Family P’ship v. Commercial Indem. Ins. Co., 116 S.W.3d 839, 844 (Tex. App.—Austin 2003, no pet.).

Exceptional circumstances and other reasons for avoidance

Courts may excuse compliance with a condition precedent if requiring its performance will cause extreme forfeiture or penalty and if its existence or occurrence is not an essential part of the parties’ bargained-for exchange. See Lesikar Const. Co. v. Acoustex, Inc., 509 S.W.2d 877, 881 (Tex. App.—Fort Worth 1974, writ ref. n.r.e.).

Waiver of conditions precedent

The failure of a condition precedent may also be waived by the failure to insist on performance. Ames v. Great S. Bank, 672 S.W.2d 447, 449 (Tex. 1984); Farmer v. Holley, 237 S.W.3d 758, 760 (Tex. App.—Waco 2007, pet. denied). Waiver is an affirmative defense and is defined as the intentional relinquishment of a known right or intentional conduct inconsistent with claiming it. Sun Exploration & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987); Straus v. Kirby Court Corp., 909 S.W.2d 105, 108 (Tex. App.—Houston [14th Dist.] 1995, writ denied). To prove waiver, a party must show that the other party to the contract had knowledge of the right and remained silent or inactive for an unreasonable period of time. See Tenneco, Inc. v. Enter. Prod. Co., 925 S.W.2d 640, 643 (Tex. 1996). Waiver may also be satisfied by showing intentional conduct inconsistent with the claim of right. Sun Exploration, 728 S.W.2d at 37. Waiver is ordinarily a fact question. Tenneco, 925 S.W.2d at 643. Because waiver is largely a matter of intent, it will not be implied absent a clear intent expressed in words, acts, or conduct. See EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex. 1996).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Wednesday, August 10, 2011

Easement and Trespass on Property

“An easement is a non-possessory interest that authorizes its holder to use property for a particular purpose.” Koelsch v. Indus. Gas Supply Corp., 132 S.W.3d 494, 497 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (citing Marcus Cable Assocs. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002)).


We interpret easements according to basic principles of contract construction and interpretation. Marcus Cable, 90 S.W.3d at 700; DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999); Koelsch, 132 S.W.3d at 497. Courts construe contracts as a matter of law, and we review their rulings de novo. See J.M Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (applying rule in arbitration-agreement context) (citing Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983)). The intent of the parties, as expressed in the grant, determines the scope of the interest conveyed. Marcus Cable, 90 S.W.3d at 700–01; Koelsch, 132 S.W.3d at 497–98. To interpret the parties’ intentions adequately and to discern the scope of the rights conveyed to the easement holder, we focus on the terms of the granting language. See Marcus Cable, 90 S.W.3d at 701.

We rely solely on the written terms of the easement unless the language is ambiguous. Koelsch, 132 S.W.3d at 498. When terms are not defined, we give them their “plain, ordinary, and generally accepted meaning.” Marcus Cable, 90 S.W.3d at 701. Courts must consider the entire writing, assume that the parties intended to give effect to every clause they chose to include, and strive to harmonize and give effect to all the provisions of the contract by analyzing the provisions with reference to the whole agreement. Frost Nat’l Bank v. L & F Distribs., 165 S.W.3d 310, 312 (Tex. 1999); Koelsch, 132 S.W.3d at 498; see also Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). “When interpreting the granting language of an easement, we resolve doubts about the parties’ intent against the grantor, or servient, estate and adopt the interpretation that is the least onerous to the grantee, or dominant, estate in order to confer on the grantee the greatest estate permissible under the instrument.” CenterPoint Energy Houston Elec. LLC v. Bluebonnet Drive, Ltd., 264 S.W.3d 381, 388–89 (Tex. App.—Houston [1st Dist.] 2008, pet. denied). No rights pass to the easement holder by implication except those that are “reasonably necessary” to enjoy the rights that the easement grants expressly. Marcus Cable, 90 S.W.3d at 701. Accordingly, if the grant expressed in the easement cannot be construed to apply to a particular purpose, a use for that purpose is not allowed. See id.

SOURCE: Houston Court of Appeals - 01-10-00186-CV - 8/4/11


A trespasser has neither express nor implied permission to enter the property of another, but enters it nonetheless. Mellon Mortg. Co. v. Holder, 5 S.W.3d 654, 671 (Tex. 1999); Koelsch, 132 S.W.3d at 497. An easement holder who exceeds the rights granted by the owner of the servient estate thus commits a trespass. Compare Marcus Cable, 90 S.W.3d at 703 (reversing trial court’s grant of summary judgment on trespass claim in favor of easement holder, who had installed cable-television lines on easement, because easement document only granted right to use land for purpose of constructing and maintaining facilities to transmit electricity, not cable) with Koelsch, 132 S.W.3d at 499 (holding that no trespass occurred where easement holder constructed above-ground block valve assembly because easement document granted right to “lay, operate, renew, alter, inspect, and maintain two pipe lines . . . upon, over, under and through” property); CenterPoint Energy Houston Elec. LLC, 264 S.W.3d 381, 388–89 (holding that no trespass occurred where easement holder allowed assignee to install and use cellular telecommunication equipment within easement because easement document granted right of way for “all necessary and desirable appurtenances” including “telephone and telegraph wires”). A party claiming trespass must establish that the defendant committed an act that exceeded the bounds of any legal rights the defendant may have possessed. See Koelsch, 132 S.W.3d at 497.

To prevail on a breach of contract claim, a party must establish that: (1) a valid contract existed between the plaintiff and the defendant; (2) the plaintiff tendered performance or was excused from doing so; (3) the defendant breached the terms of the contract; and (4) the plaintiff sustained damages as a result of the defendant’s breach. See Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, no pet.). “A breach occurs when a party fails or refuses to do something he has promised to do.” Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex. App.—Houston [1st Dist.] 2003, no pet.); see DeWitt, 1 S.W.3d at 98 (holding that trial court properly granted directed verdict in favor of electrical cooperative on breach of contract claim, where cooperative had cut down two trees and trimmed another in easement, because easement document gave cooperative right to “cut and trim trees within the right-of-way.”).

SOURCE: Houston Court of Appeals - 01-10-00186-CV - 8/4/11

Tuesday, August 9, 2011

Collection of a Promissory Note - Multiple Instruments pertaining to the obligationa

Collection of a Promissory Note: Essential elements the creditor must prove 

To collect on a promissory note, a plaintiff m ust establish: (1) that the note exists; (2) that the defendant signed the note; (3) that the plaintiff is the owner and holder of the note; and (4) that a certain balance is due and owing on the note. Cadle Co. v. Regency Homes, Inc., 21 S.W.3d 670, 674 (Tex. App.—Austin 2000, pet. denied); see also Clark v. Dedina, 658 S.W.2d 293, 295–96 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d).

Business and Commerce Code Section 3.117

Business and commerce code section 3.117, titled “Other Agreements Affecting Instrument,” states in relevant part that
the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.
Tex. Bus. & Com. Code Ann. § 3.117 (West 2002). “The separate agreement might be a security agreement . . . that contradicts the terms of the instrument.” Id. § 3.117 cmt. 1 (West Supp. 2010)

Multiple instruments / documents can be given effect as if they were one

Additionally, where two or more instruments, executed contemporaneously or at different times, pertain to the same transaction, the instruments will be read together, even though they do not expressly refer to each other. Bd. of Ins. Comm’rs v. Great S. Life Ins. Co., 150 Tex. 258, 267, 239 S.W.2d 803, 809 (1951); see also Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (stating that it is “well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent”).

SOURCE: Fort Worth Court of Appeals - 02-10-00296-CV - 8/4/11

It was not possible to perform the contract ... is that a viable defense?

Impossibility of Performance as a defense: Will it fly in a court of law?

Subjective or objective impossibility? ... That is the question  

There are two general types of impossibility: (1) objective, and (2) subjective. Walston v. Anglo-Dutch Petroleum (Tenge) L.L.C., No. 14-07-00959-CV, 2009 WL 2176320, at *6 n.2 (Tex. App.—Houston [14th Dist.] July 23, 2009, no pet.) (mem. op.); Janak v. FDIC, 586 S.W.2d 902, 906–07 (Tex. Civ. App.—Houston [1st Dist.] 1979, no writ).

Objective impossibility relates solely to the nature of the promise. See Janak, 586 S.W.2d at 906–07. Something is objectively impossible if “the thing cannot be done,” such as an inability “to perform the promise to settle [a] claim by entering an agreed judgment in the lawsuit which had been dismissed” prior to the completion of the agreement. See Grayson v. Grayson Armature Large Motor Div., Inc., No. 14-09-00748-CV, 2010 WL 2361432, at *5 (Tex. App.—Houston [14th Dist.] June 15, 2010, pet. denied) (mem. op.).

Subjective impossibility is due wholly to the inability of the individual promisor. See id. Something is subjectively impossible if “I cannot do it,” such as when a promisor’s financial inability to pay makes it impossible for the promisor to perform. See id.

Objective impossibility can serve as a defense in a breach of contract suit. Janak, 586 S.W.2d at 906–07. However, a party cannot escape contract liability by claiming subjective impossibility; subjective impossibility neither prevents the formation of the contract nor discharges a duty created by a contract. See Grayson, 2010 WL 2361432, at *5; Walston, 2009 WL 2176320, at *6 n.2; Janak, 586 S.W.2d at 906–07.

SOURCE: Fort Worth Court of Appeals - 02-10-00296-CV - 8/4/11

Premises Liability Suit: Slip & Fall at Store - When is store owner liable for injuries sustained by customer?


What are the elements of a slip & fall premises liability claim?

To prevail on a premises liability suit, an invitee-plaintiff must prove: (1) a condition on the premises posed an unreasonable risk of harm; (2) the premises owner had actual or constructive knowledge of the danger; (3) the premises owner did not exercise reasonable care to reduce or eliminate the risk; and (4) the premises owner's failure to use such care proximately caused the plaintiff's injuries. See Wal-Mart Stores, Inc. v. Reece, 81 S.W.3d 812, 814 (Tex. 2002); Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998); Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992).

SOURCE: Dallas Court of Appeals - 05-09-01310-CV - 8/8/11

Friday, August 5, 2011

Car Wreck suits: What is negligent entrustment (of motor vehicle)?

What does it take to prove that a vehicle involved in a collision was negligently entrusted to the driver?

To establish negligent entrustment of an automobile, a plaintiff must show the following: (1) entrustment of a vehicle by the owner; (2) to an unlicensed, incompetent, or reckless driver; (3) whom the owner knew or should have known to be unlicensed, incompetent, or reckless; (4) the driver was negligent on the occasion in question; and (5) the driver's negligence proximately caused the accident. Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987).

Express permission is that which is affirmatively stated, while implied permission may be inferred from conduct between the parties in which there is acquiescence or lack of objection signifying consent which is shown by usage and practice of the parties over a period of time preceding the occasion on which the automobile was being used. Royal Indem. Co. v. H.E. Abbott & Sons, Inc., 399 S.W.2d 343, 345 (Tex. 1966).

SOURCE: Corpus Christi Court of Appeals - 13-10-00351-CV - 7/28/11  

Thursday, August 4, 2011

Can home owner offer valid testimony on reasonable cost or value of repairs?

Testimony to support or challenge reasonble and necessary & costs of repair: Exception to the Property Owner Rule

Eastland Court of Appeals says property owners not qualified to opine on repair cost even if qualified to offer opinion on the value of the property itself under the property owner rule; Rule does not cover repairs; expert testimony it therefore required.    
A party seeking to recover damages measured by the cost of repair must present competent evidence so that the trier of fact is justified in finding that the repairs are necessary to restore the property to its former condition and that the cost of repairs is reasonable and fair. See Hernandez v. Lautensack, 201 S.W.3d 771, 776-77 (Tex. App.—Fort Worth 2006, pet. denied); Ebby Halliday Real Estate, Inc. v. Murnan, 916 S.W.2d 585, 589 (Tex. App.—Fort Worth 1996, writ denied); Liptak v. Pensabene, 736 S.W.2d 953, 958 (Tex. App.—Tyler 1987, no writ). The magic words “reasonable” and “necessary” need not be used as long as there is sufficient evidence for the trier of fact to conclude that the repairs are necessary and the cost is reasonable. Ron Craft Chevrolet, Inc. v. Davis, 836 S.W.2d 672, 677 (Tex. App.—El Paso 1992, writ denied); Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 694 (Tex. App.—Austin 1989, no writ).

Some courts have held that evidence pertaining to the necessity and reasonableness of repair costs falls within the exclusive domain of an expert. See Legacy Motors, LLC v. Bonham, No. 02-07-00065-CV, 2007 WL 2693863, at *4 (Tex. App.—Fort Worth Sept. 13, 2007, no pet.) (mem. op.); Ha v. W. Houston Infiniti, Inc., No. 01-94-00884-CV, 1995 WL 516993, at *2 (Tex. App.—Houston [1st Dist.] Aug. 31, 1995, writ denied) (op. on reh’g) (not designated for publication); see also Executive Taxi/Golden Cab v. Abdelillah, No. 05-03-01451-CV, 2004 WL 1663980, at *1 (Tex. App.—Dallas July 19, 2004, pet. denied) (mem. op.) (stating that an estimate without the testimony of the person making the estimate or other expert testimony is no evidence of the necessity of the repair or the reasonableness of the costs of the repair) (citing Jordan Ford, Inc. v. Alsbury, 625 S.W.2d 1, 3 (Tex. Civ. App.—San Antonio 1981, no writ)). As a general rule, matters involving specialized or technical knowledge require expert testimony. See FFE Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 90-91 (Tex. 2004). The necessity of subsequent, total roof replacements performed immediately after the work performed by and on behalf of Wortham Bros. and the reasonableness of the cost of the subsequent roof replacements are matters of a specialized and technical nature. Accordingly, we conclude that expert testimony was required to establish the necessity and reasonableness of the subsequent roof replacements.

We disagree with the trial court’s determination that the Haffners’ status as property owners qualifies them to offer an opinion on the necessity and reasonableness of repair costs. Under the “Property Owner Rule,” a property owner is generally qualified to testify as to the value of his or her property even if he or she is not an expert and would not be qualified to testify as to the value of other property. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex. 2011); see Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984). This rule is based on the presumption that an owner will be familiar with his or her own property and know its value. Reid Road Mun. Util. Dist. No. 2, 337 S.W.3d at 853. This presumption does not extend to the reasonable cost of repairing the owner’s property particularly when those repairs are of a technical or specialized nature.

SOURCE: Eastland Court of Appeals - 11-09-00190-CV - 7/28/11

We disagree with the trial court’s determination that the Haffners’ status as property owners qualifies them to offer an opinion on the necessity and reasonableness of repair costs. Under the “Property Owner Rule,” a property owner is generally qualified to testify as to the value of his or her property even if he or she is not an expert and would not be qualified to testify as to the value of other property. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex. 2011); see Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984). This rule is based on the presumption that an owner will be familiar with his or her own property and know its value. Reid Road Mun. Util. Dist. No. 2, 337 S.W.3d at 853. This presumption does not extend to the reasonable cost of repairing the owner’s property particularly when those repairs are of a technical or specialized nature.

Negligence 101: Was the Defendant under a legal duty?


What does it take to establish liability for negligence?

To prevail on a negligence cause of action, a plaintiff must prove (1) the existence of a legal duty, (2) breach of the duty, and (3) injury proximately caused by the defendant’s breach. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1991). Whether a duty exists is a question of law for the court to decide based on the facts surrounding the occurrence in question. Id.

Duty concerns not subjecting others to an unreasonable, foreseeable risk of harm. Tex. Home Mgmt., Inc. v. Peavy, 89 S.W.3d 30, 39 (Tex. 2002); Otis Eng’g Corp. v. Clark, 668 S.W.2d 307, 311 (Tex. 1984) (discussing unreasonable risk of harm as component of duty analysis); see also Keck, Mahin & Cate v. Nat. Union Fire Ins. Co., 20 S.W.3d 692, 702 (Tex. 2000) (noting contributory negligence is that which creates an unreasonable risk of harm to oneself). “As Dean Prosser has observed . . . [‘n]o better general statement can be made, than the courts will find a duty where, in general, reasonable men would recognize it and agree that it exists.’” Otis Eng’g Corp., 668 S.W.2d at 310. (quoting W. Prosser, The Law of Torts § 56 (4th ed. 1971)). A reviewing court balances several related factors to determine whether a defendant owed a plaintiff a duty, including the risk, foreseeability, and likelihood of injury weighed against the social utility of the defendant’s conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant. Phillips,

SOURCE: Corpus Christi Court of Appeals - 13-10-00355-CV - 7/28/11

Wednesday, August 3, 2011

Reasonableness of attorney's fee must be proven

Court of Appeals may overturn fee award even if authorized by statute when the fee claimant did not support the amount of the fees sought with proper evidence of reasonableness through her attorney.

As a prerequisite to the recovery of attorney’s fees for any underlying cause of action, the party seeking fees must prove the reasonableness of the fees. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).

Reasonableness of fees must be supported by competent evidence. Peeples v. Peeples, 562 S.W.2d 503 (Tex.Civ.App.--San Antonio 1978, no writ). Here, there were no findings of fact entered to support the award of attorney's fees and costs. We must therefore presume the trial court made all findings necessary to support its order. Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).

Factors considered by the court when determining the amount of reasonable fees include: (1) the time and labor required, novelty and difficulty of the question presented, and the skill required; (2) the likelihood that acceptance of employment precluded other employment; (3) the fee customarily charged for similar services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer performing the services; and (8) whether the fee is fixed or contingent. Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

[Attorney in this case] did not testify, nor did she present an affidavit, itemized statements, exhibits, or any other offer of proof as to the reasonableness of her fees. The record is devoid of evidence relating to her experience, the time and labor involved, the difficulty of the task, her hourly rates, rates customarily charged for similar services, or her fee agreement with [ client ]. While a party need not offer proof of all the factors above, [ attorney ] did not offer proof under any of them. She referenced a “case ledger” presumably detailing her time spent preparing the motions and fees incurred. But it was not offered as an exhibit, was not introduced into evidence and does not appear in the record. We have only her request for fees of $518.10.

Under these facts, we are not persuaded [ party clainming fees ] provided more than a scintilla of evidence as to the reasonableness of the amount of fees requested. Finding legally insufficient evidence to support the award, we must conclude that the trial court abused its discretion. We sustain Issue Seven and reverse and render that [ fee claimant ] take nothing.

SOURCE: El Paso Court of Appeals - 08-10-00149-CV - 7/29/11

Waiver of contractual right to arbitrate under the Supremes' wholistic Perry-Cull standard

What is the test for waiver of the right to arbitrate? Under Texas Supreme Court precedent, it's anything but clear, but the standard is pretty high. Courts of appeals will continue to make their own calls in light of the kitchen-sink "totality of the circumstances" standard that allows for consideration of just about any arguably relevant factor to either compel or deny arbitration. See Perry Homes vs. Cull (Tex. 2008)
WHEN and HOW is the RIGHT TO ARBITRATE waived?
“Waiver is a question of law that this Court reviews de novo.” Small v. Specialty Contractors, Inc., 310 S.W.3d 639, 644 (Tex. App.-Dallas 2010, no pet.). “[A] party waives an arbitration clause by substantially invoking the judicial process to the other party's detriment or prejudice.” Perry Homes v. Cull, 258 S.W.3d 580, 589 (Tex. 2008). “Due to the strong presumption against waiver of arbitration, this hurdle is a high one.” Id. To decide whether a party substantially invoked the judicial process, we look to the “totality of the circumstances.” Id. at 591. In reviewing the totality of the circumstances, we consider “factors such as when the movant knew of the arbitration clause; how much discovery has been conducted; who initiated it; whether it related to the merits rather than arbitrability or standing; how much of it would be useful in arbitration; and whether the movant sought judgment on the merits.” Id. at 591-92. “[W]aiver can be implied from a party's conduct, although that conduct must be unequivocal.” Id. at 593. In close cases, the “strong presumption against waiver” should govern. Id. “Even substantially invoking the judicial process does not waive a party's arbitration rights unless the opposing party proves that it suffered prejudice as a result.” Id. at 594. Prejudice is defined as “the inherent unfairness in terms of delay, expense, or damage to a party's legal position that occurs when the party's opponent forces it to litigate an issue and later seeks to arbitrate that same issue.” Id. at 597.

The court in Perry Homes deemed the following acts, standing alone, insufficient to amount to waiver: filing suit; requesting initial discovery; noticing, but not taking a deposition; and taking four depositions. Perry Homes, 258 S.W.3d at 590; see also Small, 310 S.W.3d at 645. On the other hand, the Texas Supreme Court stated in another case that the combined acts of conducting full discovery, filing motions going to the merits, and seeking arbitration “only on the eve of trial” would constitute substantially invoking the judicial process. Perry Homes, 258 S.W.3d at 590 (citing In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 764 (Tex. 2006)). Because this case does not fit squarely into the circumstances described in either of those cases, we “must review relevant factors in the context of the totality of the circumstances.” Small, 310 S.W.3d at 645 (citing Perry Homes, 258 S.W.3d at 591-92).

SOURCE: Dallas Court of Appeals - 05-11-00115-CV - 8/2/11

First, we look at “when the movant knew of the arbitration clause.” Id. at 645 n.2, 646.

Tuesday, August 2, 2011

Civil Death Penalty Sanctions in Texas [striking of pleadings & dismissal for bad litigation conduct]

Texas is famous (or infamous, depending on viewpoint) for the use of the death penalty. But the term is also used in civil litigation -- to refer to sanctions that essentially terminate a lawsuit or -- as in the case from which the snippets below are taken -- strike a counterclaim. That's also why there is "death-penalty case law" from the Texas Supreme Court, even though that court does not hear appeals in criminal cases, much less capital cases.    

DEATH PENALTY SANCTIONS: When are they proper; when not?

Standard of Review on Appeal

A trial court’s sanctions order under Texas Rule of Civil Procedure 215.2(b) is reviewed for abuse of discretion. Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). The test for an abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action, but whether the court acted without reference to any guiding rules or legal principles. Cire, 134 S.W.3d at 838; K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000). The trial court’s discretion in imposing sanctions is limited by the standards set out in the applicable Rules of Civil Procedure and TransAmerican Natural Gas Corp. v. Powell, 811 S.W. 2d 913 (Tex. 1991).

Basis for imposition of discovery sanctions

Rule 215.2 of the Texas Rules of Civil Procedure authorizes a trial court to sanction a party for failure to comply with a discovery order or request. Tex.R.Civ.P. 215.2. A list of possible sanctions is found in Rule 215.2(b). Pertinent to this case, an order striking pleadings is one of the sanctions available to the court. Tex.R.Civ.P. 215.2(b)(5). The Texas Supreme Court defines “death penalty sanctions” as “sanctions that terminate a party’s right to present the merits of its claims.” State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 647 (Tex. 2001). Such sanctions include striking a party’s pleadings, dismissing its action, or rendering a default judgment against a party for abusing the discovery process. Id. Death penalty sanctions must be reserved for circumstances in which a party has so abused the rules of procedure, despite imposition of lesser sanctions, that the party’s position can be presumed to lack merit and it would be unjust to permit the party to present the substance of that position before the court. TransAmerican, 811 S.W.2d at 918.

The proportionality criterion   

A trial court may not impose sanctions that are more severe than necessary to satisfy legitimate purposes. Cire, 134 S.W.3d at 839. Further, Rule 215.2(b) explicitly requires that any sanction under this rule be “just.” Tex.R.Civ.P. 215.2(b). The Supreme Court’s decision in TransAmerican set out a two-part test for determining whether a particular sanction is just. Spohn Hospital v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003); TransAmerican, 811 S.W.2d at 917.

First, there must be a direct relationship between the offensive conduct and the sanction imposed. TransAmerican, 811 S.W.2d at 917. A just sanction must be directed against the abuse and toward remedying the prejudice caused to the innocent party, and the sanction should be visited upon the offender. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The trial court should make some attempt to determine whether fault for discovery abuse lies with the party, its counsel, or both. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917.

Second, just sanctions must not be excessive. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. In assessing the second standard, the sanction should be no more severe than necessary to satisfy its legitimate purposes, which include securing compliance with discovery rules, deterring other litigants from similar misconduct, and punishing violators. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The court must consider less stringent sanctions and whether such lesser sanctions will fully promote compliance, deterrence, and discourage further abuse. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. Death penalty sanctions may be imposed in exceptional cases where they are clearly justified and it is apparent that no lesser sanctions would promote compliance with the rules. Spohn Hospital, 104 S.W.3d at 882.

Discovery sanctions that are so severe as to inhibit presentation of the merits of the case should be reserved to address a party’s flagrant bad faith or counsel’s callous disregard for the responsibilities of discovery under the rules. Spohn Hospital, 104 S.W.3d at 883.

SOURCE: El Paso Court of Appeals - 08-09-00239-CV - 7/29/11