Thursday, April 28, 2011
TORTIOUS INTERFERENCE: THE ESSENTIAL ELEMENTS OF THE TORT
To recover for tortious interference with a contract, a plaintiff must prove: (1) the existence of a contract subject to interference; (2) a willful and intentional act of interference; (3) that proximately caused the plaintiff's injury, and (4) actual damage or loss. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 207 (Tex. 2002); ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997).
Privilege Defense to tortious interference claim
Even if the plaintiff is able to establish each of the above elements, a defendant may negate liability by pleading and proving that its conduct was privileged. See ACS Investors, 943 S.W.2d at 431. A person is privileged to interfere with another’s contract if it is done in a bona fide exercise of his own rights or if he has an equal or superior right in the subject matter to that of the other party. Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1996). When a privilege based on a financial interest or principal-agent relationship exists, there can be no tortious interference with a contract as a matter of law. Cent. Sav. & Loan Ass’n v. Stemmons Nw. Bank, N.A, 848 S.W.2d 232, 241–42 (Tex. App.—Dallas 1992, no writ) (citing Schoellkopf v. Pledger, 778 S.W.2d 897, 903 (Tex. App.—Dallas 1989 writ denied)).
SOURCE: Houston Court of Appeals 01-09-00916-CV 4/28/11
LEGAL TERMS: tortious [not tortuous] interference with contract, contractual relations, business, affirmative defenses to interference tort
What does it take to win breach-of-contract claim? Essential elements of cause of action for breach of a contract
To prevail on a claim for breach of contract, the plaintiff must establish the following elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Wright v. Christian & Smith, 950 S.W.2d 411, 412 (Tex. App.—Houston [1st Dist.] 1997, no writ).
SOURCE: Houston Curt of Appeals 01-10-00649-CV 5/5/11
WAIVER AS BAR TO CLAIM: MUST BE PLEADED AS AFFIRMATIVE DEFENSE
Waiver is an affirmative defense to a contract claim. See Tex. R. Civ. P. 94. In order to rely on the affirmative defense, a defendant must plead, prove, and secure findings to sustain the defense. Woods v. William H. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988).
The record does not reflect that AMS requested a jury question on the defense it now seeks to assert. By failing to do so, it has not preserved its argument for appellate review. See Tex. R. App. P. 33.1(a); Rivas v. Cantu, 37 S.W.3d 101, 116-17 (Tex. App.—Corpus Christi 2000, pet. denied) (holding defendant failed to preserve statute of frauds defense by, inter alia, failing to request jury charge or object to absence of charge issue); Abraxas Petrolrolium Corp. v. Hornburg, 20 S.W.3d 741, 763 (Tex. App.—El Paso 2000, no pet.) (holding defendant waived estoppel and waiver defenses by failing to submit a jury question).
SOURCE: Houston Court of Appeals 01-09-00360-CV 4/28/11
LEGAL TERMS: defense of waiver, release, estoppel
Release is an affirmative defense. Tex. R. Civ. P. 94. A release is a writing which provides that a duty or obligation owed to one party to the release is discharged immediately or upon the occurrence of a condition. Henry v. Masson, No. 01-07-00522-CV, 2010 WL 5395640, at *16 (Tex. App.—Houston [1st Dist.] Dec. 31, 2010, no pet.). A release of a claim or cause of action extinguishes the claim or cause of action. Id. (citing Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993)).
SOURCE: Houston Court of Appeals 01-09-00816-CV 4/28/11
RELATED LEGAL TERMS: Release of claim, prior settlement of controversy dispute, accord and satisfaction
When Is Fraudulent Misrepresentation Actionable in Texas? - Essential Elements of Fraudulent Misrepresentation as a Tort
FRAUDULENT MISREPRESENTATION AS A CAUSE OF ACTION UNDER TEXAS LAW
The elements of a fraudulent misrepresentation claim include proof by the plaintiff that (1) the defendant made a material misrepresentation; (2) the representation was false; (3) the defendant knew the representation was false when made or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the defendant made the representation with the intention that it should be acted upon; (5) the representation was in fact justifiably relied upon; and (6) damage to the plaintiff resulted. See Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923 (Tex. 2010); see also Ernst & Young, L.L.P. v. Pacific Mut. Life Ins. Co., 51 S.W.3d 573, 575 (Tex. 2001).
Fraudulent inducement of contract
As a general rule, a party is not bound by a contract procured by fraud. Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998); see also Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 179 (Tex. 1997).
Detrimental reliance on false representations
A false representation made indirectly to a third party and later relied on by the defrauded party may constitute fraud under certain circumstances. See BP Am. Prod. Co. v. Marshall, 288 S.W.3d 430, 444–45 (Tex. App.—San Antonio 2008, pet. granted) (holding misrepresentations made to one sibling acting as agent for all siblings constituted misrepresentations to all siblings). “[A] person who makes a misrepresentation is liable to the person or class of persons the maker intends or ‘has reason to expect’ will act in reliance upon the misrepresentation.” Ernst & Young, 51 S.W.3d at 578. “Even an obvious risk that a misrepresentation might be repeated to a third party is not enough to satisfy the reason-to-expect standard; rather, the alleged fraudfeasor must ‘have information that would lead a reasonable man to conclude that there is an especial likelihood that it will reach those persons and will influence their conduct.’” Id. at 580 (quoting Restatement (Second) of Torts § 531 cmt. d (1977)) (emphasis added).
Deliberate misrepresentation vs. mistake, misunderstanding
Fraud requires proof of an affirmative misrepresentation, not simply a misunderstanding by a party. See Orion Ref. Corp. v. UOP, 259 S.W.3d 749, 771–72 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (stating misunderstanding and other evidence do not amount to actionable misrepresentations).
SOURCE: Houston Court of Appeals 01-10-00104-CV 4/28/11
CAUSE OF ACTION FOR WRONGFUL FORECLOSURE
Elements of Wrongful Foreclosure
The elements of wrongful foreclosure are: (1) a defect in the foreclosure sale proceeding; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex.App.-Houston [14th Dist.] 1989, writ denied).
A wrongful foreclosure claim does not always require proof of a grossly inadequate selling price if another substantive injury to the mortgagor exists. Id. Under Texas law, "a deed of trust is a mortgage with a power to sell on default." Starcrest Trust v. Berry, 926 S.W.2d 343, 351 (Tex.App.-Austin 1996, no writ) (internal quotation omitted). Mortgages, and therefore deeds of trust, are construed like contracts. Id. at 351-52. "Further, `[t]he note and deed of trust on . . . property should be construed together and effectively regarded as one instrument.'" Id. (quoting Chapa v. Herbster, 653 S.W.2d 594, 600 (Tex.App.-Tyler 1983, no writ)).
SOURCE: Helms v. Mortgage Electronic Registration Systems, Inc., Dist. Court, SD Texas 2012
The elements for wrongful foreclosure when the plaintiff seeks to set aside the sale are (1) a defect in the foreclosure sale proceedings; (2) a grossly inadequate selling price; and (3) a causal connection between the defect and the grossly inadequate selling price. See Charter Nat’l Bank-Houston v. Stevens, 781 S.W.2d 368, 371 (Tex. App.—Houston [14th Dist.] 1989, writ denied).
SOURCE: Houston Court of Appeals 01-09-00269-CV 4/28/11 (dissenting opinion)
RELATED LEGAL TERMS: Wrongful foreclosure, irregularity in foreclosure sale proceeding, eviction, ownership and right to possession