Thursday, April 28, 2011

How to prove a tortious interference case in Texas: What are the elements?


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

Cause of Action for Breach of Contract in Texas: How is it proven?

PROVING BREACH OF CONTRACT: THE ESSENTIAL ELEMENTS 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.). Defining breach: When does a breach occur? “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.) (citing Townewest Homeowners Ass’n, Inc. v. Warner Commc’n Inc., 826 S.W.2d 638, 640 (Tex. App.—Houston [14th Dist.] 1992, no writ)). SOURCE: Houston Court of Appeals 01-09-00360-CV 4/28/11

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 an affirmative defense to lawsuits in Texas

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 of claim(s) as affirmative defense


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

What is the effect of RES JUDICATA when it applies?

RES JUDICATA Res judicata precludes the relitigation of a finally adjudicated claim and related matters that should have been litigated in a prior suit. State & Cnty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001) (citing Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992)). The doctrine bars matters actually litigated and causes of actions or defenses that arise out of the same subject matter and that could have been litigated in the first suit. Barr, 837 S.W.2d at 630. “[A] claimant generally cannot pursue one remedy to an unfavorable conclusion and then pursue the same remedy in another proceeding before the same or a different tribunal.” Igal v. Brightstar Info. Tech. Group, Inc., 250 S.W.3d 78, 86 (Tex. 2007). Texas follows the transactional approach to res judicata, which requires that a defendant bring as a counterclaim any claim arising out of the transaction or occurrence that is the subject matter of the opposing party’s suit. Miller, 52 S.W.3d at 696. For res judicata to apply, these elements must be present: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) the same parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Igal, 250 S.W.3d at 86. SOURCE: Houston Court of Appeals 01-09-00816-CV 4/28/11 LEGAL TERMS: res judicata, claim preclusion, collateral estoppel, dismissal with and without prejudice; effect of prior judgment on subsequent lawsuit involving same or similar claims and parties

When Is Fraudulent Misrepresentation Actionable in Texas? - Essential Elements of Fraudulent Misrepresentation as a Tort


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

Invasion of Privacy Rights in Texas

INVASION OF PRIVACY TORT Texas law recognizes a common-law right to privacy. Billings v. Atkinson, 489 S.W.2d 858, 859 (Tex. 1973); Farrington v. Sysco Food Srvs., Inc., 865 S.W.2d 247, 253 (Tex. App.—Houston [1st Dist.] 1993, writ denied). What does it take recover on cause of action for invasion of privacy in Texas? To prove invasion of privacy, Prince must establish: (1) that [ Defendants ] intentionally intruded, physically or otherwise, upon her solitude, seclusion, or private affairs or concerns; (2) that such intrusion would be highly offensive to a reasonable person; and (3) that she suffered injury as a result of the appellee’s intrusion. See Valenzuela v. Aquino, 853 S.W.2d 512, 513 (Tex. 1993). The plaintiff must also establish that she suffered injury as a result of the defendant’s intrusion. Clayton v. Wisener, 190 S.W.3d 685, 696 (Tex. App.—Tyler 2005, no pet.). SOURCE: Houston Court of Appeals 01-09-00916-CV 4/28/11

Elements of Wrongful Foreclosure Tort in Texas (updated)

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