No Medical Malpractice Lawsuit without Expert Report

 
In the course of tort reform, the Texas legislature required that each medical malpractice lawsuit be accompanied by an expert report to vouch for its non-frivolousness. The required report must cover several elements and has been the subject of much appellate litigation. The stakes are high, because failure to file the report entails dismissal. Failure to file an adequate expert report, or failure to file it timely, usually has dire consequences likewise.
    
HEALTHCARE LIABILITY CLAIMS: MED-MAL EXPERT REPORT REQUIREMENT

 
UNDER SECTION 74.351 OF THE CIVIL PRACTICE AND REMEDIES CODE
 
When a plaintiff brings a healthcare liability claim, section 74.351 requires the plaintiff to serve each health care provider defendant with an expert report that “provides a fair summary of the expert’s opinions . . . regarding applicable standards of care, the manner in which the care rendered by the physician or health care provider failed to meet the standards, and the causal relations between that failure and the injury, harm, or damages claimed.” TEX. CIV. PRAC. & REM. CODE ANN. §§ 74.351(a) and 74.351(r)(6).

If a plaintiff timely files an expert report, the defendant may move to challenge its sufficiency. Id. § 74.351(a); Palacios, 46 S.W.3d at 877. The trial court must dismiss the case with prejudice if the court finds that the report does not represent a good-faith effort to comply with the statute. TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(l); Palacios, 46 S.W.3d at 877 (discussing predecessor statute).

An expert report represents a good faith effort to comply with section 74.351 if it provides enough information to inform the defendant of the specific conduct called into question by the plaintiff and provides a basis for the trial court to determine that the claims made by the plaintiff have merit. Palacios, 46 S.W.3d at 879. The report need not marshal all of the plaintiff’s proof, but it must address all three statutory elements—standard of care, breach and causation. See id. at 878. The report must link the expert’s conclusions to the facts upon which those conclusions rest. See Jelinek, 328 S.W.3d at 539 (citing Bowie Mem’l Hosp., 79 S.W.3d at 52). An expert report that omits any of the statutory requirements is not a good faith effort. Palacios, 46 S.W.3d at 879. In reviewing the sufficiency of a report, we look only within the four corners of the document. Id. at 878.

Section 74.351(c) permits a trial court to grant a medical malpractice plaintiff a thirty day extension if an expert report “has not been served within the period specified by Subsection (a) because elements of the report are found deficient.” TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(c). If the claimant receives notice of the court’s ruling after the initial 120-day deadline has passed, then the extension runs from the date the plaintiff first received notice. Id.

STANDARD OF REVIEW ON APPEAL

We review the trial court’s decision on a section 74.351 motion to dismiss for abuse of discretion. Am. Transitional Care Ctrs. of Tex., Inc. v. Palacios, 46 S.W.3d 873, 878 (Tex. 2001) (addressing predecessor statute to section 74.351). The trial court abuses its discretion if it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. Jelinek v. Casas, 328 S.W.3d 526, 539 (Tex. 2010) (quoting Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 51–52 (Tex. 2002)).

SOURCE: HOUSTON COURT OF APPEALS - 01-11-00136-CV - 12/14/11

A bare assertion of causation does not meet the requirements of section 74.351(r)(6), because “[a]n expert report cannot simply opine that the breach caused the injury.” Jelinek, 328 S.W.3d at 539. No “magical words” such as “reasonable medical probability” demonstrate that the report complies with section 74.351(r)(6). See Bowie Mem’l Hosp., 79 S.W.3d at 53; Regent Care Ctr. of San Antonio II, Ltd. P’ship v. Hargrave, 300 S.W.3d 343, 347 (Tex. App.—San Antonio 2009, pet. denied) (finding single sentence addressing causation did not demonstrate good-faith effort to comply with Act). Rather, to satisfy the element of causation, an expert must explain the basis of her statements and link her conclusions to the facts of the case. Jelinek, 328 S.W.3d at 539; Bowie Mem’l Hosp., 79 S.W.3d at 52.

Deed construction analogous to contract construction; so is admissibility of parol evidence to interpret or clarify deed

 
CONSTRUCTION OF A DEED - A LEGAL QUESTION, RATHER THAN A TRIABLE ISSUE OF FACT, BUT THERE MAY BE EXCEPTIONS
     
The construction of a deed is ordinarily a question of law. See Terrill v. Tuckness, 985 S.W.2d 97, 101 (Tex. App.—San Antonio 1998, no pet.) (noting that rules of contract construction ordinarily apply to construction of deeds). Our primary concern in construing a deed is to ascertain the parties’ true intent as expressed in the instrument. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991); CenterPoint Energy Houston Elec., L.L.P. v. Old TJC Co., 177 S.W.3d 425, 430 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). “Because ‘once a dispute arises over meaning, it can hardly be expected that the parties will agree on what meaning was intended,’ courts use canons of construction to help ascertain the parties’ intent.” French v. Chevron U.S.A., Inc., 896 S.W.2d 795, 797 (Tex. 1995) (quoting Southland Royalty Co. v. Pan Am. Petroleum Corp., 378 S.W.2d 50, 59 (Tex. 1964) (Calvert, C.J., concurring)). The “four corners” rule requires us to ascertain intent from the entire instrument. See French, 896 S.W.2d at 797. We must strive to harmonize all of the deed’s parts, construing the deed to give effect to all of its provisions. Luckel, 819 S.W.2d at 462; CenterPoint Energy, 177 S.W.3d at 430.

PAROL EVIDENCE RULE GENERALLY APPLIES UNLESS THERE IS AMBIGUITY

Extrinsic evidence of intent is admissible only if the deed is ambiguous on its face. See Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 283 (Tex. 1996); CenterPoint Energy, 177 S.W.3d at 431 (“A court may consider the parties’ interpretations of the contract through extrinsic or parol evidence only after a contract is first determined to be ambiguous.”).

The decision whether the deed is ambiguous is also a question of law. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); see also CenterPoint Energy, 177 S.W.3d at 430. To make this determination, we look at the deed as a whole in light of the circumstances existing when the parties entered into their agreement. See CenterPoint Energy, 177 S.W.3d at 430. If the deed is worded in such a way that it can be given a definite or certain legal meaning, then it is not ambiguous and the court will be confined to the writing. See id. at 30-31. A mere disagreement about the proper interpretation of a deed, however, does not make the deed ambiguous; the instrument is ambiguous only if, after application of the rules of construction, the deed is reasonably susceptible to more than one meaning. Brown v. Havard, 593 S.W.2d 939, 942 (Tex. 1980); Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951).

SOURCE: HOUSTON COURT OF APPEALS - 01-10-01002-CV - 12/15/11

Collateral attack on judgment - can it work?

 
COLLATERAL ATTACKS GENERALLY NOT PERMITTED- RULE AGAINST COLLATERAL ATTACKS MAY THUS PROVIDE A DEFENSE
 
Judgments—except judgments void for lack of jurisdiction—are not subject to collateral attack; they may only be challenged on direct attack by appeal. Browning v. Placke, 698 S.W.2d 362, 363 (Tex. 1985). A collateral attack, unlike a direct attack, seeks to avoid the effect of a judgment in a later proceeding not instituted for the purpose of modifying or vacating the judgment, but instituted in order to obtain some relief that the judgment currently stands as a bar against. Henderson v. Chambers, 208 S.W.3d 546, 550 (Tex. App.—Austin 2006, no pet.) (holding that wife’s suit based on fraud claim was collateral attack on prior judgment); see Kendziorski v. Saunders, 191 S.W.3d 395, 408 (Tex. App.—Austin 2006, no pet.) (“A collateral attack . . . ‘is an attempt to avoid the effect of a judgment in a proceeding brought for some other purpose.’”) (quoting Employers Cas. Co. v. Block, 744 S.W.2d 940, 943 (Tex. 1988)). “[T]he prohibition against collateral attack extends to claims that false swearing or fraud of a party to the judgment renders it voidable.” In re Cantu, 961 S.W.2d 482, 486 (Tex. App.—Corpus Christi 1997, no writ) (citing Glenn v. Dallas Cnty. Bois D’Arc Island Levee Dist., 268 S.W. 452 (Tex. 1925); Kaphan v. Fid. & Deposit Co. of Md., 564 S.W.2d 459, 462 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.)).


SOURCE: HOUSTON COURT OF APPEALS - 01-10-01151-CV - 12/14/11
RELATED LEGAL CONCEPTS: res judicata and collateral estoppel 

Is it res judicata? (lawyer lingo)

 
Yes, it's Latin, and it is an affirmative defense that may thwart a (second) lawsuit.  
  
RES JUDICATA  
  
Res judicata prevents parties and those in privity with them from relitigating a case that a competent tribunal has adjudicated to finality. Ingersoll–Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 206 (Tex. 1999).

Res judicata bars claims or defenses that could have been litigated in the earlier suit but were not. Id. at 206–07. “The doctrine is intended to prevent causes of action from being split, thus curbing vexatious litigation and promoting judicial economy.” Id. at 207.

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 determination 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 subject matter as the prior claim and could have been litigated in the previous action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).
 
SOURCE: HOUSTON COURT OF APPEALS - 01-10-01151-CV - 12/14/11

Mandamus Practice 101 - Petition requirements ignored

       
It is almost impossible for pro-se (pro-per) litigants to be successful in Texas Courts of Appeals. The sole case decided by the First Court of Appeals last Friday is no exception. But at least the author of the panel opinion went to the trouble of explaining what was wrong with the mandamus petition. That cannot be taken for granted, as cases are on occasion disposed of by what are essentially one- or two-liner "opinions" that amount to nothing more than a declaratory sentence announcing denial.
  

MEMORANDUM OPINION

 
Relator, Charles W. Bishop, II, has filed a pro se petition for writ of mandamus in this court. See Tex. Gov’t Code § 22.221 (Vernon 2004); see also Tex. R. App. P. 52. Relator complains that respondent* has not ruled on his "Declaration for Entry of Default."

Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal. In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 422 (Tex. 2010); In re Team Rocket, L.P., 256 S.W.3d 257, 259 (Tex. 2008) ("We grant the extraordinary relief of mandamus only when the trial court has clearly abused its discretion and the relator lacks an adequate appellate remedy."). We have previously stated, "A party seeking mandamus relief must show that (1) the trial court had a legal duty to act, (2) there was a demand for performance, and (3) there was a refusal to act." In re Smith, 263 S.W.3d 93, 96 (Tex. App.—Houston [1st Dist.] 2006, orig. proceeding) (citing Stoner v. Massey, 586 S.W.2d 843, 846 (Tex. 1979)).

When a motion is properly filed and pending before a trial court, the act of giving consideration to and ruling on that motion is a ministerial act, and mandamus may issue to compel the trial court to act. See Safety–Kleen Corp. v. Garcia, 945 S.W.2d 268, 269 (Tex. App.—San Antonio 1997, orig. proceeding); see also Eli Lilly and Co. v. Marshall, 829 S.W.2d 157, 158 (Tex. 1992).

To establish that the trial court refused to rule on a pending motion, the relator must provide a record demonstrating that he asked the trial court for a ruling on his motion and that the trial court refused to rule. See Barnes v. State, 832 S.W. 2d 424, 426 (Tex. App.—Houston [1st Dist.] 1992, orig. proceeding); see also Walker v. Packer, 827 S.W.2d 833, 837 (Tex. 1992) (orig. proceeding). The trial court is not required to consider a motion unless it is called to its attention. Smith, 263 S.W.3d at 96. The mandamus record must show that the motion was presented to the trial court and that the trial court refused to rule on it. See In re Chavez, 62 S.W.3d 225, 228 (Tex. App—Amarillo 2001, orig. proceeding).

According to relator, he filed his "Declaration for Entry of Default" in the trial court on September 21, 2011. He contends that he sent a letter to the trial court on November 1, 2011 requesting that it rule on his Declaration for Entry of Default. Relator also asserts that on November 14, 2011 he filed his "Motion Objecting to the Court’s Refusal to Rule." Relator attaches copies of these documents to his mandamus petition but does not provide a file-stamped copy of these documents or any other documentation to show that his Declaration for Entry of Default, or the other documents appended to his mandamus petition, have been filed and are pending before the trial court.

Nor does the record show that the trial court has actually been made aware of the Declaration for Entry of Default or refused to rule on it, as relator claims. See In re Davidson, 153 S.W.3d 490, 491 (Tex. App.—Amarillo 2004, orig. proceeding); see also Smith, 263 S.W.3d at 96; Barnes, 832 S.W. 2d at 426. Lastly, we note that relator’s Declaration for Entry of Default does not request the trial court to render a default judgment or to grant any other affirmative relief to relator; rather, it simply contains a statement or "declaration" by relator that the defendants in the trial court have failed to answer or defend against his suit.

All petitioners for writ of mandamus, including those acting pro se, must furnish a record sufficient to support the claim for mandamus relief. See Barnes, 832 S.W.2d at 426; see also Walker, 827 S.W.2d at 837. Here, relator has not provided us with a record showing that the trial court received a motion requesting relief, was made aware of it, was asked to rule on it, and refused to rule. See Davidson, 153 S.W.3d at 491; see also Barnes, 832 S.W.2d at 426. Accordingly, we deny the petition for writ of mandamus. See Tex. R. App. P. 52.8(a).

Laura Carter Higley

Justice

Panel consists of Justices Keyes, Higley, and Massengale.

SOURCE: HOUSTON COURT OF APPEALS - FIRST DISTRICT -
01-11-01048-CV - 12/16/11

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

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

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

Seal of the City of Dallas in front of Cityhall


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

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

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


A Question of Identifying to Proper Target

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

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

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



Oh, the Quirks of Federalism

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

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

Everything with dignity -
including selection of arbitrators


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

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

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


Grave Problems ....

... go to the arbitrator - But which one?

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

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


The Courthouse clock had been ticking

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

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

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

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

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

In the Texas Supreme Court, it's usually the corporate
defendants that get a break


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

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


Go or No Go? - The signals from
the judiciary can be a challenge

  CONCLUSION: In this case, the covenant not to compete is “ancillary to or part of” an otherwise enforceable agreement because the business interest being protected (goodwill) is reasonably related to the consideration given (stock options). Section 15.50 requires that there be a nexus between the covenant not to compete and the interest being protected. TEX.BUS.&COM.CODE § 15.50(a). This requirement is satisfied by the relationship that exists here. We reverse the judgment of the court of appeals and remand to the trial court for further proceedings consistent with this opinion.
  
MARSH USA INC. AND MARSH & MCLENNAN COMPANIES, INC. v. REX COOK; from Dallas County; 5th district (05-08-00685-CV, 287 SW3d 378, 05-26-09)
  
The Court's opinion of June 24, 2011 is withdrawn and the opinion of this date is substituted. The concurring opinion by Justice Willet, the dissenting opinion by Justice Paul Green, and the judgment issued June 24, 2011, remain in place.
  
Links to pdf version of opinion and to Electronic Briefs in this case can be found on the Texas Supreme Court's web site

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

How to get attorney's fees awarded: What kind of evidence; is fee segregation required?

   
PROVING LEGAL FEES and FEE SEGREGATION REQUIREMENT (per Dallas CoA)

As to attorney's fees, clear, direct, and uncontroverted evidence of attorney's fees is taken as true as a matter of law, especially when the opposing party has the means and opportunity to disprove the testimony. B&W Supply, Inc. v. Beckman, 305 S.W.3d 10, 20 (Tex. App.-Houston [1st Dist.] 2009, no pet.); see Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990).
 
If a claimant is entitled to recover attorney's fees for some but not all of his claims, he bears the burden of segregating his fees between claims for which they are recoverable and claims for which they are not. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006); A&L Eng'g & Consulting, Inc. v. Shiloh Apollo Plaza, Inc., 315 S.W.3d 928, 931 (Tex. App.-Dallas 2010, no pet.).
 
But a party is not required to segregate attorney's fees if “discrete legal services advance both a recoverable and unrecoverable claim,” thus causing the fees to become “so intertwined that they need not be segregated.” Chapa, 212 S.W.3d at 313-14. If legal fees are incurred to prosecute a claim for which fees are recoverable, the resulting fees are recoverable even if the services also support claims for which fees are not recoverable. Chapa, 212 S.W.3d at 313.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

The Homebuyers' attorney stated his attorney's fees were $29,944.75, and he had deleted $5477.50 from his bills relating to the proceedings against Langford. The Homebuyers' attorney testified the remaining bills were for time spent on the Home-Sellers' case involving DTPA and fraud, and he was unable to separate those bills because they were so intertwined. The Homebuyers' attorney testified $24,467.25 would be a reasonable fee for the work he performed in this case. The Homebuyers' attorney was cross examined about both the time spent on the case and the segregation of fees. The Home-Sellers stipulated that the Homebuyers' attorney was qualified when he began his testimony regarding attorney's fees. The trial court heard all the evidence and awarded attorney's fees of $20,000. The record shows the attorney's fees associated with claims against Langford were segregated. Because the record shows the legal services advanced both the fraud and DTPA claims against the Home-Sellers, the fees were so intertwined that segregation was not necessary. See Chapa, 212 S.W.3d at 313. This record shows the Homebuyers presented competent evidence of out-of-pocket expenses, loss of fair market value, mental anguish damages, and attorney's fees. We therefore uphold the trial court's finding on these damages. See Fernandez, 15 S.W.3d at 651. We overrule the Home-Sellers' fourth issue.

We affirm the trial court's judgment.

SOURCE: FIFTH COURT OF APPEALS IN DALLAS, TX - 05-10-00173-CV - 12/15/11 (judgment in favor of buyers of vermin-infested home against sellers who did not make proper disclosure of termites affirmed; see prior post on this blog)

Unknowingly bought a termite-infested home in Texas? What cause of action provides relief?

  
A case decided by the Dallas Court of Appeals today discusses fraud by non-disclosure and DTPA in a case involving sale of a termite-infested house.
 

FRAUD, MISREPRESENTATION, FAILURE TO MAKE DISCLOSURE OF DEFECTS IN CONNECTION WITH
SALE OF RESIDENCE

ELEMENTS OF FRAUD & FRAUDULENT NON-DISCLOSURE  
  
The elements of a cause of action for fraud are: (1) that a material misrepresentation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Fraud also occurs when a party fails to disclose a material fact within the knowledge of that party; the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; the party intends to induce the other party to take some action by failing to disclose the fact; and the other party suffers injury as a result of acting without knowledge of the undisclosed fact. New Process Steel Corp. v. Steel Corp. of Texas, 703 S.W.2d 209, 214 (Tex. App.-Houston [1st Dist.] 1985, writ ref'd n.r.e.). A seller is charged with disclosing such material facts as to put a buyer exercising reasonable diligence on notice of the condition of the house. Cole v. Johnson, 157 S.W.3d 856, 860-61 (Tex. App.-Fort Worth 2005, no pet.).

Under certain circumstances, a buyer's independent inspection of the property may conclusively defeat two elements of a fraud claim: causation and reliance. A buyer's independent inspection precludes a showing of causation and reliance if it reveals to the buyer the same information that the seller allegedly failed to disclose. See Lesieur v. Fryar, 325 S.W.3d 242, 246-49 (Tex. App.-San Antonio 2010, no pet.).

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

DECEPTIVE TRADE PRACTICES ACT (Texas DTPA)

“The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or practices.”Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex.1996); see Tex. Bus. & Com. Code Ann. § 17.50(a) (West Supp. 2010); see also id. §§ 17.45(5), 17.46(b). The trial court found the Home-Sellers knowingly engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers. The elements of a DTPA claim are: (1) the plaintiff was a consumer; (2) the defendant either engaged in false, misleading or deceptive acts (i.e., violated a specific laundry-list provision of the DTPA) or engaged in an unconscionable action or course of action; and (3) the DTPA laundry-list violation or unconscionable action was a producing cause of the plaintiff's injury. Amstadt, 919 S.W.2d at 649; see Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex.1995). In our review of a DTPA claim, we must liberally construe and apply the statute to promote the underlying goals of the statute, which include protecting consumers against false, misleading, and deceptive business practices and unconscionable actions. See Tex. Bus. & Com. Code Ann. § 17.44(a) (West 2002); Latham v. Castillo, 972 S.W.2d 66, 68 (Tex.1998).
  
WHAT DAMAGES CAN BE RECOVERED UNDER THE DTPA?
 
A consumer who prevails on a claim under the DTPA may obtain the amount of economic damages found by the trier of fact. Tex. Bus. & Com. Code Ann. § 17.50(b)(1) (West Supp. 2010). If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for any mental anguish found by the trier of fact. Id. A prevailing party shall be awarded reasonable and necessary attorney's fees and any other relief which the court deems proper. Id. §§17.50(d); 17.50(b)(4).
  
An award of mental anguish damages will survive a legal sufficiency challenge when the plaintiffs have introduced direct evidence of the nature, duration, and severity of their mental anguish, thus establishing a substantial disruption in the plaintiffs' daily routine. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Direct evidence of mental anguish 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, and the amount awarded must be fair and reasonable. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996).
  
Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Parkway, 901 S. W. 2d at 444.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

BUYERS vs. SELLERS 

of termite-infested home

Firth Court of Appeals affirms judgment for Buyers
in unsuccessful appeal by Sellers

Rick and Kathy [Home-Sellers] appeal the trial court's judgment awarding Jerry and Connie [Homebuyers] damages on their claims arising out of their purchase of a termite-infested house from the Home-Sellers. In four issues, the Home-Sellers argue the evidence is factually insufficient to support the trial court's judgment, and the trial court erred by (1) declining to make findings of fact and conclusions of law, (2) rendering judgment in favor of the Homebuyers when the evidence was factually insufficient to support the judgment, (3) failing to grant the Home-Sellers' motion for judgment as a matter of law, and (4) awarding judgment for out-of-pocket expenses, loss of fair market value, mental anguish, and attorney's fees. We affirm the trial court's judgment.

NOTE: The court of appeals' opinion refers to the parties by their real names; they have here been replaced with functional labels

In the summer of 2006, the Homebuyers, interested in purchasing a property in Sherman, were driving through a residential neighborhood when they saw a for sale sign in front of the Home-Sellers' home. The Homebuyers stopped and got out to look at the house, and the Home-Sellers came out and offered to give them a tour of the house. During the tour, the Home-Sellers discussed the remodeling they had done to the house. The Homebuyers decided to buy the house and offered $125,000, which the Home-Sellers accepted. The Homebuyers hired James Langford to do a home and termite inspection before the closing. The Homebuyers and Home-Sellers were all present at the time of the inspection. In the seller's disclosure statement, the Homebuyers had seen the Seller's disclosure that the house had been “sprayed and treated in spring for termite[s]. Outside only.” The Home-Sellers had told the realtor that it was “for maintenance purposes only.” During the inspection, Langford asked where the termites were. Rick Seller did not respond to Langford's question, and Langford asked, “Where did you spray?” Rick Seller said “it was outside, out down around the old storage building.” Connie Home-Buyer “felt a concern” and asked Rick Seller if there were any termites or if there had ever been any termites. Rick Seller said no. The sale proceeded to closing.

The Homebuyers began moving into the house and found termites on September 1, 2006, nine days after closing. At that time, the interior of the home appeared freshly painted. Connie Home-Buyer set a box down and bumped into a picture and a dry erase board that the Home-Sellers had left in the kitchen. The dry erase board and picture fell down, revealing a hole in the wall behind each one. Connie Home-Buyer began removing the wallpaper in the kitchen because she knew she was “going to have to redo it” and “get that hole fixed in the kitchen.” When Connie Home-Buyer removed the “very first piece of wallpaper” she discovered what she recognized were termite holes.

The Homebuyers hired a licensed exterminator and termite inspector, Roy Reed, to perform an inspection on September 8, 2006. In the den ceiling, Reed immediately identified an area where the termites had already eaten the wood, and it was “not even wood anymore, [it was] caulk.” Reed pushed up with his thumb on the ceiling and “termites just showered down on him.” Reed told Connie Home-Buyer “what pictures to take as he was going through the inspection,” and the photos were admitted at trial. The inspection revealed termite infestation in the house, and the Homebuyers “never unpacked.” The Homebuyers got estimates on repairing the termite damage, but they could not afford to make the repairs, and they decided to move. The Homebuyers rented a place to live and sold the house approximately eight months later for $74,000, a thousand dollars less than they owed the bank. In July 2007, the Homebuyers sued the Home-Sellers and Langford. The Homebuyers settled their claims against Langford. Following a bench trial, the trial court entered judgment in favor of the Homebuyers, and this appeal followed.

In their first issue, the Home-Sellers argue the trial court erred in failing to make findings of fact and conclusions of law. Contrary to the Home-Sellers' assertion, the record contains the trial court's letter to the parties making findings that (1) the Home-Sellers engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers; (2) the Home-Sellers engaged in such conduct knowingly; and (3) the Home-Sellers committed fraud against the Homebuyers. The trial court went on to find the Homebuyers were entitled to benefit of the bargain damages, out of pocket expenses, mental anguish damages, “additional damages permitted by the DTPA,” and attorney's fees.

After the trial court files its original findings of fact and conclusions of law, any party may file a request for specified additional or amended findings or conclusions with the clerk of the court. Tex. R. Civ. P. 298;Gentry v. Squires Constr., Inc., 188 S.W.3d 396, 408 (Tex. App.-Dallas 2006, no pet.). The failure of a party to request additional or amended findings or conclusions waives the party's right to complain on appeal about the presumed finding. Gentry, 188 S.W.3d at 408. The Home-Sellers failed to request additional or amended findings and therefore have waived any complaint. We overrule the Home-Sellers' first issue.

In their second issue, the Home-Sellers argue the evidence is factually insufficient to support the trial court's judgment. The Home-Sellers argue the evidence is factually insufficient to show they made false material representations to the Homebuyers or their acts were a substantial factor in bringing about an injury to the Homebuyers.

[section on factual sufficiency challenge omitted]

The trial court found the Home-Sellers committed fraud against the Homebuyers. The elements of a cause of action for fraud are: (1) that a material misrepresentation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Fraud also occurs when a party fails to disclose a material fact within the knowledge of that party; the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; the party intends to induce the other party to take some action by failing to disclose the fact; and the other party suffers injury as a result of acting without knowledge of the undisclosed fact. New Process Steel Corp. v. Steel Corp. of Texas, 703 S.W.2d 209, 214 (Tex. App.-Houston [1st Dist.] 1985, writ ref'd n.r.e.). A seller is charged with disclosing such material facts as to put a buyer exercising reasonable diligence on notice of the condition of the house. Cole v. Johnson, 157 S.W.3d 856, 860-61 (Tex. App.-Fort Worth 2005, no pet.).

“The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or practices.”Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex.1996); see Tex. Bus. & Com. Code Ann. § 17.50(a) (West Supp. 2010); see also id. §§ 17.45(5), 17.46(b). The trial court found the Home-Sellers knowingly engaged in a misleading, deceptive act that the Homebuyers relied on to their detriment and which was a producing cause of damages to the Homebuyers. The elements of a DTPA claim are: (1) the plaintiff was a consumer; (2) the defendant either engaged in false, misleading or deceptive acts (i.e., violated a specific laundry-list provision of the DTPA) or engaged in an unconscionable action or course of action; and (3) the DTPA laundry-list violation or unconscionable action was a producing cause of the plaintiff's injury. Amstadt, 919 S.W.2d at 649; see Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex.1995). In our review of a DTPA claim, we must liberally construe and apply the statute to promote the underlying goals of the statute, which include protecting consumers against false, misleading, and deceptive business practices and unconscionable actions.See Tex. Bus. & Com. Code Ann. § 17.44(a) (West 2002); Latham v. Castillo, 972 S.W.2d 66, 68 (Tex.1998).

Here, Rick Seller testified that, at the time he filled out the seller's disclosure form, he knew that in 2004 he had found live and dead termites in the garage and the “freezer room,” a room connected to the house. The Home-Sellers called Barry Walker to treat the termites. Walker advised them to treat the entire house for termites. The termites came back in the spring of 2005, and Walker treated them again. In spring 2006, a few months before the sale of the house to the Homebuyers, termites appeared again in the garage and freezer room, and Walker treated them. The Home-Sellers did not disclose any of these treatments in the garage and freezer room attached to the house. Instead, the Seller's disclosure stated that the house had been “sprayed and treated in spring for termite[s]. Outside only.”

Connie Home-Buyer testified Rick Seller said at the time of the inspection that he sprayed for termites “outside, out down around the old storage building.” Connie Home-Buyer “felt a concern” and asked Rick Seller if there were any termites or if there had been any termites at the property. Rick Seller said no. Connie Home-Buyer testified she would not have closed on the house if she had known the Home-Sellers (1) had seen a swarm of termites outside the house in the spring of 2004, (2) had a professional treat the house for termites in 2004, and (3) had a recurrence of termites in 2005 and had a professional come out and treat the house. We conclude this evidence was factually sufficient to support the trial court's determination that the Home-Sellers made false material representations to the Homebuyers, and their acts were a substantial factor in bringing about an injury to the Homebuyers. See Plas-Tex, Inc., 772 S.W.2d at 445. Further, the evidence was factually sufficient to show the Homebuyers acted in reliance on the Home-Sellers' misrepresentations. See In re FirstMerit Bank, N.A., 52 S.W.3d at 758; Amstadt, 919 S.W.2d at 649.

In their third issue, the Home-Sellers argue the trial court erred in failing to grant their “motion for verdict as a matter of law” on the Homebuyers' fraud and DTPA claims. See Footnote . Specifically, they argue “the Homebuyers' reliance on their own professional inspection negates the element of reliance.”

Under certain circumstances, a buyer's independent inspection of the property may conclusively defeat two elements of a fraud claim: causation and reliance. A buyer's independent inspection precludes a showing of causation and reliance if it reveals to the buyer the same information that the seller allegedly failed to disclose. See Lesieur v. Fryar, 325 S.W.3d 242, 246-49 (Tex. App.-San Antonio 2010, no pet.). Relying on Dubow v. Dragon, 746 S.W.2d 857 (Tex. App.-Dallas 1988, no writ), the Home-Sellers argue the Homebuyers' careful inspection of the property in this case negated the element of reliance. Based on the facts presented in Dubow, this Court concluded that “the [buyers'] 'careful' inspection of the house's condition constituted a new and independent basis for the purchase which intervened and superseded the [sellers'] alleged wrongful act.” Id. at 860. But the crucial fact in Dubow was not the buyers' procurement of an independent inspection; it was their express and exclusive reliance on the “professional opinions” they received to renegotiate the sales contract that resulted in the sale of the house. Id.; see Fernandez v. Schultz, 15 S.W.3d 648, 652 (Tex. App.-Dallas 2000, no pet.). In this case, there is no evidence that the Homebuyers relied solely on the opinion of their inspector in making their decision to purchase the house. See Fernandez, 15 S.W.3d at 652. Also, the contract here was never renegotiated in reliance on the inspection. See id. In fact, the testimony shows the Homebuyers' decision to buy the property would have been materially affected if the Home-Sellers had told them on the seller's disclosure form about the prior termites in the home. See id.

Although it may be true that their inspector's failure to discover the termites inside the house was a producing cause of the Home-Buyer's damages, there nevertheless may be more than one producing cause of damages in a case. Fernandez, 15 S.W.3d at 653. Here, the Home-Sellers' failure to disclose their knowledge of the termites was also a producing cause of the Homebuyers' damages. Id. Had the Home-Sellers informed the Homebuyers about the termites, they could have required their inspector to look more deeply for signs of termite damage. Id. Further, the evidence shows the Home-Sellers actively concealed the presence of the termites, thus making it more difficult for the inspector to discover them. Id. Accordingly, we conclude the Homebuyers' procurement of an independent inspection did not supersede the Home-Sellers' actions as a producing cause of damages. See id.We overrule the Home-Sellers' third issue.

In their fourth issue, the Home-Sellers argue the trial court erred in awarding “out-of-pocket” expenses, loss of fair market value, mental anguish damages, and attorney's fees. Specifically, the Home-Sellers argue the Homebuyers failed to present competent evidence to support any damages. In reviewing a contention of no evidence to support a trial court's finding, we must consider only the evidence and inferences tending to support the finding and disregard all evidence and inferences to the contrary. Fernandez, 15 S.W.3d at 651. If there is more than a scintilla of evidence to support the finding, it must be upheld. Id.

A consumer who prevails on a claim under the DTPA may obtain the amount of economic damages found by the trier of fact. Tex. Bus. & Com. Code Ann. § 17.50(b)(1) (West Supp. 2010). If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for any mental anguish found by the trier of fact. Id. A prevailing party shall be awarded reasonable and necessary attorney's fees and any other relief which the court deems proper. Id. §§17.50(d); 17.50(b)(4).

A property owner is qualified to testify to the market value of his property. Redman Homes v. Ivy, 920 S.W.2d 664, 669 (Tex. 1996). This evidence is probative if it is based on the owner's estimate of market value and not some intrinsic or other value such as replacement cost. Id. The Home-Sellers argue a property owner has to show some familiarity with market value. Connie Home-Buyer testified she researched the market value of the property through a realtor and determined the property had to be sold in “as-is” condition. Jerry Home-Buyer testified he paid $125,000 for the house and, after the termites were discovered, he was able to sell the house for only $74,000. Connie Home-Buyer testified she had owned six houses in the past as real estate investments and sold the properties after remodeling them. Thus, the record shows the Homebuyers' testimony concerning market value was based on their estimates of market value and not some intrinsic or other value. See id.

As to out-of-pocket expenses, Jerry Home-Buyer testified he and Connie incurred expenses of $13,250 to rent a home because the house they bought from the Home-Sellers was uninhabitable, $652 to maintain insurance on the house, $404 for renters' insurance, $610.96 in moving costs, and $2401.89 in taxes. Connie Home-Buyer testified she had owned six houses “as a home investor.” She got bids to repair the house, but the bids were limited in scope to the damage visible at the time. The bids ranged from $40,000 to $60,000. The Homebuyers decided to sell the house and placed an advertisement in the newspaper. A realtor told the Homebuyers that the house had to be sold “as-is.” In eight months of trying to sell the house, the Homebuyers received only three calls from “interested” parties, and only two people looked at the house. One person made an offer of $74,000, and the Homebuyers accepted the offer.

An award of mental anguish damages will survive a legal sufficiency challenge when the plaintiffs have introduced direct evidence of the nature, duration, and severity of their mental anguish, thus establishing a substantial disruption in the plaintiffs' daily routine. Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). Direct evidence of mental anguish 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, and the amount awarded must be fair and reasonable. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996).

The Home-Sellers cite the standard that “the evidence must show a high degree of mental pain and distress that is more than worry, anxiety, vexation, embarrassment or worry,” citing Houston Livestock Show & Rodeo, Inc. v. Hamick, 125 S. W. 3d 555 (Tex. App.-Austin 2003, no pet.). They argue that the evidence from Connie Home-Buyer showed she experienced stress, lost a little weight, felt anxiety because of her husband's drinking, and refused to take any anti-anxiety medicine. The Home-Sellers also cite Jerry Home-Buyer's testimony that some of his wife's anxiety was directly related to his issues with alcohol.

Direct evidence of mental anguish may be in the form of the parties' own testimony, that of third parties, or experts. Parkway, 901 S. W. 2d at 444. Connie Home-Buyer testified she and her husband put their life savings into a home they could neither live in nor afford to repair. She testified that it destroyed them financially. Connie Home-Buyer related how her husband had maintained his sobriety for twelve years but began drinking again because of this stress. She convinced him to go to the doctor, who prescribed medication. Jerry Home-Buyer has continued to take prescription medication for the last two years. Connie Home-Buyer testified she was unable to eat for three months after this occurred, she threw up everything she ate, and she lost fifteen pounds. Under cross examination, she stated her husband's relapse was caused by the loss of the house, and she was under a lot of mental anguish and a lot of mental pain. Jerry Home-Buyer testified how very hard emotionally this had been and that this was his only relapse in his sobriety. Evidence that Jerry Home-Buyer maintained his sobriety for twelve years and then relapsed under the financial stress of losing his home and life savings, together with evidence Connie Home-Buyer shared in this loss and was unable to eat, is evidence of much more than mere worry, anxiety, vexation, embarrassment, or anger. We conclude the evidence was sufficient to establish the nature, duration, and severity of their mental anguish. See Parkway, 901 S. W. 2d at 444.

[section on law governing award of attorney's fees and segregation requirement omitted]

The Homebuyers' attorney stated his attorney's fees were $29,944.75, and he had deleted $5477.50 from his bills relating to the proceedings against Langford. The Homebuyers' attorney testified the remaining bills were for time spent on the Home-Sellers' case involving DTPA and fraud, and he was unable to separate those bills because they were so intertwined. The Homebuyers' attorney testified $24,467.25 would be a reasonable fee for the work he performed in this case. The Homebuyers' attorney was cross examined about both the time spent on the case and the segregation of fees. The Home-Sellers stipulated that the Homebuyers' attorney was qualified when he began his testimony regarding attorney's fees. The trial court heard all the evidence and awarded attorney's fees of $20,000. The record shows the attorney's fees associated with claims against Langford were segregated. Because the record shows the legal services advanced both the fraud and DTPA claims against the Home-Sellers, the fees were so intertwined that segregation was not necessary. See Chapa, 212 S.W.3d at 313.

This record shows the Homebuyers presented competent evidence of out-of-pocket expenses, loss of fair market value, mental anguish damages, and attorney's fees. We therefore uphold the trial court's finding on these damages. See Fernandez, 15 S.W.3d at 651. We overrule the Home-Sellers' fourth issue.

We affirm the trial court's judgment.

DAVID L. BRIDGES

JUSTICE

________________________________________

Footnote:  Although the Home-Sellers also argue the trial court erred in denying their motion for judgment on the Homebuyers' negligent misrepresentation claims, the Homebuyers did not assert a claim for negligent misrepresentation, and the trial court's judgment did not award relief on a negligent misrepresentation claim. While the Homebuyers' original petition alleged certain negligence claims against Langford, all claims against Langford were dismissed prior to trial.

________________________________________

SOURCE: DALLAS COURT OF APPEALS - 05-10-00173-CV - 12/15/11

Statute of frauds as to sale of land, real property, may not always nix claim of ownership in the absence of a deed

   
Conveyance of land normally requires a proper written instrument (deed), but there are exceptions. Moreover, the statute of frauds is an affirmative defense subject to waiver.
    
TEXAS STATUTE OF FRAUDS AS TO REAL ESTATE TRANSACTIONS AND
EXCEPTIONS TO ITS STRICT APPLICATION
  
Under Texas law, oral contracts to convey land are not void, but unenforceable if the party against whom enforcement is sought raises the statute of frauds as a defense. Joiner v. Elrod, 716 S.W.2d 606, 608-09 (Tex. App.—Corpus Christi 1986, no writ).
   
To relieve a parol sale of land from the operation of the statute of frauds, three things are necessary: (1) payment of the consideration, whether it be in money or services; (2) possession by the vendee; and (3) the making by the vendee of valuable and permanent improvements upon the land with the consent of the vendor or, without such improvements, the presence of such facts as would make the transaction a fraud upon the purchaser if it were not enforced. Hooks v. Bridgewater, 111 Tex. 122, 126-27, 229 S.W.2d 1114, 1116-117 (1921).
  
This is also called the doctrine of partial performance. See Boyert v. Tauber, 834 S.W.2d 60, 63 (Tex. 1992) (“Under the doctrine of partial performance as applied to the statute of frauds, an oral contract for the purchase of real property is enforceable if the purchaser: (1) pays the consideration; (2) takes possession of the property; and (3) makes permanent and valuable improvements on the property with the consent of the seller, or, without such improvements, other facts are shown that would make the transaction a fraud on the purchaser if the oral contract was not enforced.”).

SOURCE: CORPUS CHRISTI COURT OF APPEALS - 13-10-00490-CV – 12/1/11 

Legal action to divide land (partition suit) has some particularities

   
Partition suit involving jointly-owned land is exception to the rule that a lawsuit can only result in one final and appealable judgment (barring severance of claims).
  
SUIT FOR PARTITION OF LAND HAS SOME QUIRKS
    

Partition serves to divide property owned by co-tenants and concerns possession, not title. See Barham v. McGraw, 342 S.W.3d 716, 719 (Tex. App.—Amarillo 2011, pet. filed); Dierschke v. Central Nat’l Branch of First Nat’l Bank of Lubbock, 876 S.W.2d 377, 380 (Tex. App.—Austin 1994, no writ) (stating that an owner of a non-possessory interest cannot compel partition). Thus, to prevail in a suit for partition, “a plaintiff need only establish that he owns an interest in the property and has a right to possession of a portion thereof.” Trevino v. Trevino, 64 S.W.3d 166, 171 (Tex. App.—San Antonio 2001, no pet.). In order to have a partitionable, “possessory interest” in a given piece of property, one must have an equal “right to possession” with the other joint owners. Savell v. Savell, 837 S.W.2d 836, 838-40 (Tex. App.—Houston [14th Dist.] 1992, writ denied) (must have right to present possessory interest); Brelsford v. Scheltz, 564 S.W.2d 404, 406 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref'd n.r.e.); Lichtenstein v. Lichtenstein Bldg. Corp., 442 S.W.2d 765, 767-68 (Tex. Civ. 5 App.—Corpus Christi 1969, no writ) (party seeking the partition must have an equal right to possession with the other joint owners). The trial court shall order partition if it “determines that the whole, or any part of such property is susceptible of partition.” TEX. R. CIV. P. 761.

  
TWO FINAL JUDGMENTS
   
A partition case, unlike other proceedings, has two final judgments, and the first one is appealable as a final judgment. Griffin v. Wolfe, 610 S.W.2d 466, 466 (Tex. 1980). The first decree determines the interest of each of the joint owners or claimants, all questions of law affecting the title, and appoints commissioners and gives them appropriate directions. Ellis v. First City Nat'l Bank, 864 S.W.2d 555, 557 (Tex. App.—Tyler 1993, writ denied); see also TEX. R. CIV. P. 760, 761.
  
The second decree approves the report of the commissioners and sets aside to the parties their separate shares. Ellis, 864 S.W.2d at 557. In addition to determining the basic issues of partitionability in kind and the fractional interest of the parties, the trial court also has the power during the initial stage of the partition proceeding to adjust all equities between the parties. Yturria v. Kimbro, 921 S.W.2d 338, 342 (Tex. App.—Corpus Christi 1996, no writ); see also Snow v. Donelson, 242 S.W.3d 570, 572 (Tex. App.—Waco 2007, no pet.) (“The trial court applies the rules of equity in determining the broad question of how property is to be partitioned”).

Proof is made to the fact finder at trial of the existence and value of improvements to the property at the time of partition and of other equitable considerations that may warrant awarding a particular portion of the property to one of the parties. Price v. Price, 394 S.W.2d 855, 858 (Tex. Civ. App.—Tyler 1965, writ ref’d n.r.e.). The general rule is that where improvements have been made upon the property sought to be partitioned, the improved portion will be allotted to the part owner who has made the improvements if this can be done without prejudice to the other owners. Id.
It is well-established that the trial court has the power during the initial stage of the partition proceeding to adjust all equities between the parties. Yturria, 921 S.W.2d at 342; see also Snow, 242 S.W.3d at 572 (“The trial court applies the rules of equity in determining the broad question of how property is to be partitioned.”).
 

SOURCE: CORPUS CHRISTI COURT OF APPEALS - 13-10-00490-CV – 12/1/11 

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