Wednesday, November 30, 2011

Quasi-estoppel differentiated from equitable estoppel doctrine

The doctrine of quasi-estoppel precludes a party from asserting, to another’s disadvantage, a right inconsistent with a position previously taken by a party. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000); Eckland Consultants, Inc. v. Ryder, Stillwell, Inc., 176 S.W.3d 80, 87 (Tex. App.—Houston [1st Dist.] 2004, no pet.).
The doctrine applies when it would be unconscionable to allow a party to maintain a position inconsistent with one in which it had acquiesced, or from which it had accepted a benefit. Lopez, 22 S.W.3d at 864; Eckland Consultants, Inc., 176 S.W.3d at 87. “Thus, quasi-estoppel forbids a party from accepting the benefits of a transaction and then subsequently taking an inconsistent position to avoid corresponding obligations or effects.” Eckland Consultants, Inc., 176 S.W.3d at 87.
“Unlike equitable estoppel, quasi-estoppel requires no showing of misrepresentation or detrimental reliance.” Id.
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-11-00209-CV – 11/23/11 

The Elements of Malicious Prosecution as a Tort

Texas courts have long recognized a cause of action for those unjustifiably subjected to criminal proceedings, but has made it clear that such a cause of action, known as malicious prosecution, must sometimes yield to society’s interest in encouraging its citizens to report crimes whether real or merely perceived. Kroger Tex. Ltd. P’ship v. Suberu, 216 S.W.3d 788, 792 (Tex. 2006).
The elements necessary to recover for malicious prosecution reflect a balance of these interests. Id. To recover for malicious prosecution, a plaintiff must prove: (1) a criminal proceeding was commenced against the plaintiff; (2) the defendant initiated or procured the proceeding; (3) the proceeding was terminated in the plaintiff’s favor; (4) the plaintiff was innocent of the crime charged; (5) the defendant lacked probable cause to initiate the criminal proceeding; (6) the defendant acted with malice; and (7) the plaintiff suffered damages. Id. (citing Richey v. Brookshire Grocery Co., 952 S.W.2d 515, 517 (Tex. 1997)). The fifth and sixth elements protect a defendant from a jury’s “natural inclination” to punish a defendant who erroneously, but with cause and no malice, commenced criminal proceedings that resulted in an exoneration. Suberu, 216 S.W.3d at 792.
According to the Texas Supreme Court, procurement, which is the causation element of a malicious prosecution action, occurs when a person’s actions are enough to cause the prosecution, and but for the person’s actions the prosecution would not have occurred. Browning-Ferris Indus., Inc. v. Lieck, 881 S.W.2d 288, 293 (Tex. 1994). A person does not procure a prosecution, however, when the decision to prosecute is left to the discretion of a law enforcement official or grand jury unless the person provides information he knows is false. Id.; King v. Graham, 126 S.W.3d 75, 78 (Tex. 2003).
A person does not procure a prosecution when the decision to prosecute is left to the discretion of a law enforcement official or grand jury. Id.; King v. Graham, 126 S.W.3d 75, 78 (Tex. 2003). However, if a person knowingly provides false information to those responsible for procuring the prosecution, the person has procured the prosecution for purposes of a malicious prosecution action. Id. This exception is satisfied not only when actual false information is provided, but when the reporting person fails to report facts that might establish the accused is not guilty of any offense. Eans, 580 S.W.2d at 20 (holding circumstantial evidence was sufficient for jury to have concluded corporation procured prosecution where reporting persons failed to disclose material facts favorable to accused).
A person acts with malice in a malicious prosecution case when he acts with ill will or evil motive to the injury of another, or acts in reckless disregard of the rights of another and with indifference as to whether the other person is injured so as to amount to wanton and willful action knowingly and unreasonably done. Id. Malice can be established by either direct or circumstantial evidence and may be inferred from a lack of probable cause. Thrift, 974 S.W.2d at 80.
Of course a person has the legal right to report a crime. See Closs, 874 S.W.2d at 878. However, if a person reports a crime with an improper purpose, or in reckless disregard of the rights of another in a knowing and unreasonable manner, that is malice. Id.
Richey, 952 S.W.2d at 519-20 (holding that in malicious prosecution action, failing to fully and fairly disclose all relevant facts or knowingly providing false information to police is relevant to malicious intent of defendant); Thrift, 974 S.W.2d at 80 (holding defendant’s failure to disclose exculpatory facts was sufficient to demonstrate malice).
A malicious prosecution action against a corporate entity may be based on an agent taking action to procure a prosecution. See Eans v. Grocery Supply Co., 580 S.W.2d 17, 21-22 (Tex. Civ. App.—Houston [1st Dist.] 1979, no writ) (malicious prosecution judgment upheld against corporation based on actions of corporate employees).
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00602-CV – 11/23/11 

Can the trial court award both injunctive relief AND damages?

Permanent Injunction and Damages: Does a judgment awarding both violate the prohibition against dual recovery? 
The supreme court has specifically recognized that only when a judgment awards “both an injunction and damages as to future effects” is there an impermissible double recovery. Schneider v. Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 284 (Tex. 2004). In the absence of an award of future damages, there is no double recovery. See id. As one court of appeals recognized, an award of permanent injunctive relief and past damages was not a double recovery because no future damages were awarded. F.S. New Prods., Inc. v. Strong Indus., Inc., 129 S.W.3d 606, 631-32 (Tex. App.—Houston [1st Dist.] 2004), rev’d in part on other grounds, 221 S.W.3d 550 (Tex. 2006).
A party is entitled to bring suit and seek damages on alternative theories; however, the plaintiff may not recover on both theories because these would amount to a “double recovery.” Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184 (Tex. 1998); Foley v. Parlier, 68 S.W.3d 870, 882 (Tex. App.—Fort Worth 2002, no pet.).
A double recovery exists when a plaintiff is awarded more than one recovery for the same injury. Waite Hill Servs., 959 S.W.2d at 184; Foley, 68 S.W.3d at 882-83. “Texas law does not permit double recovery.” Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995). The prohibition against double recovery is a corollary to the one satisfaction rule, Foley, 68 S.W.3d at 883, which provides that a plaintiff may recover only for the damages suffered as a result of a particular injury. Utts v. Short, 81 S.W.3d 822, 833 (Tex. 2002).
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-10-00602-CV – 11/23/11 

Tuesday, November 29, 2011

Sworn Account suit requires more than a verified general denial to destroy prime-facie case if the petition conforms with TRCP 185

An answer in the form of a general denial does not controvert a prima-face case under Rule 185 (Suit on [sworn] Account) even if it puts all claims and facts in issue in other civil suits in Texas courts. Because the evidentiary presumption in favor of the plaintiff created by the sworn account rule is not destroyed, judgment may be had on the pleadings without the need for additional summary judgment evidence. Rule 185 provides an exception to the general rule that pleadings are not evidence and cannot support a judgment, standing alone. 
Under rule 185, a suit on a sworn account must contain a systematic record of the goods sold or services rendered and be supported by an affidavit stating that the “claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets, payments and credits have been allowed.” Tex. R. Civ. P. 185. This is a rule of procedure regarding the evidence necessary to establish a prima facie right of recovery.. Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.--Dallas 2006, no pet.). An open account .on which a systematic record has been kept and is supported by an affidavit. is prima facie evidence of a claim. Id. A plaintiff claiming a suit on a sworn account is not required to formally introduce the account as evidence of the debt. Brown Found. Repair & Consulting, Inc. v. Friendly Chevrolet Co., 715 S.W.2d 115, 116 (Tex. App.--Dallas 1986, writ ref'd n.r.e.).

The evidentiary presumption can be defeated, and the plaintiff forced to introduce proof of its claim, if the defendant files a sworn denial of the plaintiff's account supported by an affidavit denying the account as required by rule 93(10). See Tex. R. Civ. P. 93(10); Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.--Houston [14th Dist.] 1999, no pet.). But a sworn general denial does not constitute a denial of the account and is insufficient to remove the evidentiary presumption created by a properly worded and verified suit on an account. See Panditi, 180 S.W.3d at 927; Andrews v. East Tex. Med. Ctr., 885 S.W.2d 264, 268 (Tex. App.--Tyler 1994, no writ); Cooper v. Scott Irrigation Const., Inc., 838 S.W.2d 743, 746 (Tex. App.--El Paso 1992, no writ); Huddleston v. Case Power and Equipment Co., 748 S.W.2d 102, 103 (Tex. App.--Dallas 1988, no writ). Moreover, the defendant's written denial must state more than a .broad generalization that he .specially denies' each and all of the allegations . . . [and must] address the facts on which he intends to rebut the plaintiff's affidavit.. Andrews, 885 S.W.2d at 268. A defendant is not required to file a sworn denial if the plaintiff's suit on a sworn account was not properly pleaded. Panditi, 180 S.W.3d at 927.        
In this case, appellee sued appellant based on a sworn account for liquidated damages under rule 185. Appellee alleged that it delivered “certain goods, wares and merchandise and/or personal services” to appellant, that appellant agreed to pay appellee the sums charged, and that, after all “just and lawful offsets, payments and credits,” the sum of $775.68 was past due and owing. In addition, appellee sought $300 in reasonable attorney's fees. Appellee's petition included an affidavit from Bong Hoe Kim, president of Everbeauty, Inc. d/b/a Hair to Go, alleging that appellant's account, which was attached to the affidavit and incorporated by reference, was true and correct. Appellant's last responsive pleading, a verified “Fifth Amended Answer and Petition for Declaratory Judgement,” in addition to containing a general denial, included the following list of matters that were designated as defenses:

1. Defendant affirmatively claims defense of estoppel.

2. Defendant affirmatively claims defense of accord and satisfaction.

3. Defendant affirmatively claims defense of latches.

4. Defendant affirmatively claims defense of statute of limitations.

5. Defendant pleads defense of waiver.

6. Defendant pleads defense of satisfaction.

7. Defendant pleads defense of offsets for the returned merchandises to Plaintiff.

8. Defendant pleads defense of credit for the returned merchandises to Plaintiff.

9. Defendant pleads that he was always willing and able to pay Plaintiff any amount that was owed to Plaintiff.

10. Defendant pleads that attorney's fees requested by Plaintiff be denied because Defendant was always willing and able to pay the appropriate amount that was owed to Plaintiff.

11. Any demands for payment by Plaintiff was excessive and in bad faith. Therefore, attorney's fees for Plaintiff should be denied.
Attached to appellant's answer was a business records affidavit from Chu Chang Shu, the custodian of records for Q Hair Beauty Supply II, that included two collection notices, a UPS merchandise return receipt, an invoice, and a translated statement signed by appellee's salesperson on June 27, 2006.
At the trial held before the court on July 12, 2010, appellee's counsel requested judgment based on the rule 185 pleading and appellant's failure to file a verified denial of the account. The trial court discussed with counsel for both parties the sufficiency of appellant's answer and defenses. The court told appellant's trial counsel that appellant's answer and accompanying business records affidavit were insufficient to remove the evidentiary presumption because they did not allege any facts rebutting appellee's affidavit. The trial court heard argument from both parties before granting judgment for appellee, after which it listened to testimony from appellee's counsel regarding attorney's fees. The court did not enter findings of fact and conclusions of law.
Appellant now argues that the trial court “refused to hear [appellant's] defenses,” and that “failure to comply with the rule requiring sworn denials . . . does not foreclose assertion of other defenses that are not inconsistent with a true and just account for goods as delivered.” But appellant's written denial did not comply with rule of civil procedure 93(10), “which requires a special verified denial of the account to put plaintiff's claim at issue.. Huddleston, 748 S.W.2d at 103; see Tex. R. Civ. P. 93(10). Appellant denied .each and every allegation of [appellee's] [p]etition” and demanded “strict proof thereof.” This general denial, however, even though sworn to, did not constitute a denial of the account, and it was insufficient to rebut the evidentiary effect of appellee's pleadings. See Tex. R. Civ. P. 185, 93(10); Andrews, 885 S.W.2d at 268; Cooper, 838 S.W.2d at 746; Huddleston, 748 S.W.2d at103-04; see also Panditi, 180 S.W.3d at 927; Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d 558, 562 (Tex. App.--Dallas 2003, pet. denied); Seisdata, Inc. v. Compagnie Generale de Geophysique, 598 S.W.2d 690, 692 (Tex. App.--Houston [14th Dist.] 1980, writ ref'd n.r.e.). As we have observed, “[a] defendant resisting a suit on a sworn account must comply with the rules of pleading and timely file a verified denial or he will not be permitted to dispute the receipt of the services or the correctness of the charges.” Panditi, 180 S.W.3d at 927 (citing, in part, rules 185 and 93(10)). “In other words, a defendant's noncompliance with rule 185 conclusively establishes that there is no defense to the suit on the sworn account.” Nguyen, 108 S.W.3d at 562.

Pursuant to the rules that govern sworn accounts, appellee presented a prima facie case and was not required to offer additional proof. The record also shows that appellant never offered evidence regarding any affirmative defenses, nor did it seek evidentiary rulings from the court, and it did not make an offer of proof or file a bill of exception. We further note that although appellant cites Cooper and Seisdata to support its argument, neither case suggests a party is free to argue that a trial court “refused to hear” its defenses when, as in this case, no effort was made to prove those defenses. See Cooper, 838 S.W.2d at 747; Seisdata, 598 S.W.2d at 691-92; see also Heggy v. Am. Trading Employee Ret. Account Plan, 123 S.W.3d 770, 778 (Tex. App.--Houston [14th Dist.] 2003, pet. denied) (“an affirmative defense does not rebut the factual proposition of the plaintiffs' pleading, but instead, allows the defendant to introduce evidence to establish an independent reason why the plaintiff should not prevail”). Accordingly, the trial court did not err by entering judgment against appellant.
We overrule appellant's issue.
We affirm the trial court's judgment.
SOURCE: DALLAS COURT OF APPEALS - 05-10-01268-CV -  11/22/11

Garnishment and Lien Priority: Who gets the funds in the garnished account in case of multiple competing claims?

A garnishment proceeding involves at least three parties: (1) the plaintiff (also known as the garnishor or creditor); (2) the defendant or debtor; and (3) the garnishee. The garnishee is a third party who owes a debt to or holds property of the debtor. The plaintiff or garnishor is a creditor of the debtor and requests the court to issue the writ of garnishment to the garnishee.
Garnishment is a statutory proceeding whereby property of the debtor that is in possession of the garnishee is applied to the payment of the debt owed by the debtor to the garnishor. See Tex. Civ. Prac. & Rem. Code Ann. §§ 63.001-.008 (West 2008); Tex. R. Civ. P. 657-79; Thompson v. Harco Nat. Ins. Co., 997 S.W.2d 607, 611 (Tex. App.-Dallas 1998, pet. denied), overruled in part on other grounds by John v. Marshall Health Servs., Inc., 58 S.W.3d 738, 741 (Tex. 2001) (per curiam).
The garnishor is subrogated to the rights of the debtor against the garnishee and may enforce, against the garnishee, any rights the debtor could have enforced had he sued the garnishee directly. See Thompson, 997 S.W.2d at 611 (citing Beggs v. Fite, 106 S.W.2d 1039, 1042 (Tex. 1937)). The garnishor, however, cannot acquire any greater rights against the garnishee than the debtor, himself, possesses. See id. (citing Phoenix Ins. Co. v. Willis, 6 S.W. 825, 830 (Tex. 1888)).
Where, as here, the garnishee's answer is controverted the case is then tried as other cases and a judgment will be issued according to the results of the trial. See Tex. R. Civ. P. 668, 674.
The primary issue in a garnishment suit is whether the garnishee is indebted to, or has in its possession effects belonging to the debtor. See Buckeye Ret. Co. v. Bank of Am., N.A., 239 S.W.3d 394, 399 (Tex. App.-Dallas 2007, no pet.); Putman Putman, Inc. v. Capitol Warehouse, Inc., 775 S.W.2d 460, 463 (Tex. App.-Austin 1989, writ denied). The burden is on the garnishor to establish the amount of the debt owed to the debtor or the value of the property held by the garnishee. “If the garnishor's proof fails, he can of course recover nothing.” Putman, 775 S.W.2d at 463 (citations omitted).
Garnishment proceedings often involve competing claims to property that must be resolved by applying rules of lien priority. The general rule is that in a contest over rights or interests in property, the party that is first in time is first in right. See AMC Mortg. Services, Inc. v. Watts, 260 S.W.3d 582, 585 (Tex. App.-Dallas 2008, no pet.); World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 668 (Tex. App.-Fort Worth 1998, pet. denied). Rights under a writ of garnishment are determined by priority in time, which itself is determined by service of the writ. Small Bus. Inv. Co. v. Champion Int'l Corp., 619 S.W.2d 28, 30 (Tex. App.-Houston [1st Dist.] 1981, no writ). Service of the writ on the garnishee fixes a lien on the debtor's property or debts due him, “subject to prior valid rights and liens against such property or debt.” Hubbell, Slack & Co. v. Farmers' Union Cotton Co., 196 S.W. 681, 684 (Tex. Civ. App.-Beaumont 1917, writ ref'd) (quoting Cyclopedia of Law and Procedure) (emphasis added); United States v. Standard Brass & Mfg. Co., 266 S.W.2d 407, 408 (Tex. Civ. App.-Beaumont 1954, no writ). In garnishment proceedings, allowable claims that are prior in time are prior in right of payment. See Frankfurt's Tex. Inv. Corp. v. Trinity Sav. & Loan Ass'n, 414 S.W.2d 190, 192 (Tex. Civ. App.-Dallas 1967, writ ref'd n.r.e.).


Sunday, November 20, 2011

Defamation & Summary Judgment: Applicable Standards

What does the Defendant have to show to be entitled to summary judgment against the Plaintiff when sued for libel or slander?
[The Court of Appeals reviews] a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). A defendant who conclusively negates, as a matter of law, at least one essential element of a cause of action is entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010), cert. denied, 131 S. Ct. 1017 (2011); Brewer v. Capital Cities/ABC, Inc., 986 S.W.2d 636, 643 (Tex. App.––Fort Worth 1999, no pet.); see Tex. R. Civ. P. 166a(b), (c).
Thus, to be entitled to summary judgment, a defendant in a defamation suit has the negative burden to prove the absence of one of the essential elements of defamation, e.g., that the statement complained of was not defamatory. Ramos v. Henry C. Beck Co., 711 S.W.2d 331, 333–34 (Tex. App.—Dallas 1986, no writ).
The General Law Concerning Defamation       
"Defamation" is generally defined as the invasion of a person’s interest in his or her reputation and good name. Prosser & Keeton on Torts § 111, at 771 (5th ed. 1984 & Supp. 1988). "Defamation" encompasses both libel and slander. By statute, Texas law defines "libel" as a defamation expressed in written or other graphic form that tends to injure a living person’s reputation and thereby expose the person to public hatred, contempt, ridicule, or financial injury or to impeach any person’s honesty, integrity, virtue, or reputation or to publish the natural defects of anyone and thereby expose the person to public hatred, ridicule, or financial injury. Tex. Civ. Prac. & Rem. Code Ann. § 73.001 (West 2011). Although "slander" is not statutorily defined, at common law, slander is a defamatory statement that is orally communicated or published to a third party without legal excuse. Randall’s Food Mkts, Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995).
To prevail on a defamation cause of action, the plaintiff must prove that the defendant (1) published a statement, (2) that was defamatory concerning the plaintiff, (3) while acting with actual malice regarding the truth of the statement where the plaintiff was a limited purpose public figure. See WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998), cert. denied, 526 U.S. 1051 (1999); Tex. Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 574 (Tex. App.—Austin 2007, pet. denied). In this context, actual malice refers to the defendant’s attitude toward the truth of what he said. WFAA-TV, Inc., 978 S.W.2d at 573. Actual malice means that the defendant made the statement knowing that it was false or with reckless disregard about whether the statement was false or not. HBO v. Harrison, 983 S.W.2d 31, 36 (Tex. App.—Houston [14th Dist.] 1998, no pet.).
Whether a Statement Is Capable of Defamatory Meaning Is a Question of Law  
Whether a statement is capable of a defamatory meaning is a question of law. See Fort Worth Star-Telegram v. Street, 61 S.W.3d 704, 708 (Tex. App.—Fort Worth 2001, pet. denied) (citing Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653, 655 (Tex. 1987)). We must view the statements alleged to be defamatory as a whole and in light of the surrounding circumstances; the determination is based upon how a person of ordinary intelligence would perceive the entire statement. Ezrailson v. Rohrich, 65 S.W.3d 373, 376 (Tex. App.—Beaumont 2001, no pet.). Statements alleged to be defamatory must be viewed in their context; they may be false, abusive, unpleasant, or objectionable to the plaintiff and still not be defamatory in light of the surrounding circumstances. Id. We must consider the entire communication, not mere isolated sentences or portions. Musser, 723 S.W.2d at 655. Purely subjective assertions or opinions that do not imply the existence of undisclosed facts and do not misconstrue the facts are not actionable as defamation. Bentley v. Bunton, 94 S.W.3d 561, 583–84 (Tex. 2002); see also Carr v. Brasher, 776 S.W.2d 567, 570 (Tex. 1989) (explaining that "[a]ll assertions of opinion are protected by the first amendment of the United States Constitution and article I, section 8 of the Texas Constitution"). This is particularly so when the facts underlying an opinion are set out in the publication itself, thereby allowing the listener to evaluate the facts and either accept or reject the opinion. Brewer, 986 S.W.2d at 643. Instead, to be actionable as defamation, a statement must be an assertion of verifiable fact, that is, a statement that purports to be verifiable. Bentley, 94 S.W.3d at 583–84.

SOURCE: FORT WORTH COURT OF APPEALS - 02-11-00175-CV - 11/17/11

Nature of Forcible Detainer Action (in Justice Court)

In a forcible detainer action, the only issue the trial court determines is whether the party seeking to obtain possession is entitled to actual and immediate possession, and the merits of whether a party has title shall not be determined. See Tex. R. Civ. P. 746; Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 927 (Tex. App.-Dallas 2010, no pet.); Black v. Wash. Mut. Bank, 318 S.W.3d 414, 416 (Tex. App.-Houston [1st Dist.] 2010, pet. dism'd w.o.j.).
A forcible detainer action is not exclusive, but cumulative of any other remedy that a party may have in the courts of this state. See Rice v. Pinney, 51 S.W.3d 705, 708 (Tex. App.-Dallas 2001, no pet.); Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 437 (Tex.App.-Houston [1st Dist.] 2007, no pet.). Thus, the displaced party is entitled to bring a separate suit in the district court to determine the question of title. Rice, 51 S.W.3d at 708; see also Williams, 315 S.W.3d at 927 (stating questions over whether a sale of property in a deed of trust is invalid "must be brought in a separate suit").
A justice court or county court at law is not deprived of jurisdiction merely by the existence of a title dispute; rather, it is deprived of jurisdiction only if "the right to immediate possession necessarily requires the resolution of a title dispute." Rice, 51 S.W.3d at 713 (citing Haith v. Drake, 596 S.W.2d 194, 196 (Tex. App.-Houston 

SOURCE: DALLAS COURT OF APPEALS - 05-10-01402-CV - 11/9/11

Challenging a Default Judgment by equitable Bill of Review

Attacking a default judgment by Bill of Review petition when the time for a regular or restricted appeal has passed: Under what circumstances may the trial court set aside a default judgment by bill of review?  
A bill of review is an equitable proceeding in which a party seeks to set aside a prior judgment that is no longer subject to challenge by a motion for new trial or appeal. See Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (per curiam); Transworld Fin. Servs. Corp. v. Briscoe, 722 S.W.2d 407, 407-08 (Tex. 1987).

To set aside a judgment by bill of review, “petitioner must ordinarily plead and prove (1) a meritorious defense to the cause of action alleged to support the judgment, (2) that he was prevented from making by the fraud, accident or wrongful act of his opponent, (3) unmixed with any fault or negligence of his own.” Transworld, 722 S.W.2d at 408. The residual four-year statute of limitations applies to bills of review. See Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (West 2008); Caldwell v. Barnes, 975 S.W.2d 535, 538 (Tex. 1998). Although a bill of review is an equitable proceeding, a perceived injustice alone is not sufficient to justify relief by bill of review. See Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999) (per curiam).

“Generally, bill of review relief is available only if a party has exercised due diligence in pursuing all adequate legal remedies against a former judgment and, through no fault of its own, has been prevented from making a meritorious claim or defense by the fraud, accident, or wrongful act of the opposing party.” Id.

A bill of review petitioner claiming non-service is relieved of showing a meritorious defense that was prevented by the fraud, accident, or wrongful act of his opponent, or a court official in the exercise of official duties. Caldwell, 154 S.W.3d at 96-97.
We review an order granting or denying a bill of review under an abuse of discretion standard. Ramsey v. Davis, 261 S.W.3d 811, 815 (Tex. App.-Dallas 2008, pet. denied). A trial court abuses its discretion if it reaches a decision that is so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). A trial court has no discretion in determining what the law is or applying the law to the facts. Id. at 840. A trial court abuses its discretion as to factual matters when it acts unreasonably or arbitrarily. Niskar v. Niskar, 136 S.W.3d 749, 753 (Tex. App.-Dallas 2004, no pet.). The trial court does not abuse its discretion as to factual issues if there is some evidence of a substantive and probative character to support the decision. In re C.G.,
261 S.W.3d 842, 848 (Tex. App.-Dallas 2008, no pet.). Under an abuse of discretion standard, legal and factual insufficiency are not independent grounds for reversal. In re L.A.F., 270 S.W.3d 735, 738 (Tex. App.-Dallas 2008, pet. denied). Sufficiency of the evidence is, however, a relevant factor to the appellate court's review. Id. In our review, we consider whether the trial court had sufficient evidence upon which to exercise its discretion and erred in application of that discretion. In re C.G., 261 S.W.3d at 848. When, as here, there are no findings of fact or conclusions of law, and none were requested, we assume the trial court made all necessary findings to support its judgment. See In re J.H., 264 S.W.3d 919, 924 (Tex. App.-Dallas 2008, no pet.). In our review of the record, we determine whether some evidence supports the judgment and implied findings and disregard entirely contradictory evidence. See id. (citing Niskar, 136 S.W.3d at 753-54). The judgment will be upheld on any legal theory supported in the evidence. Id.

SOURCE: DALLAS COURT OF APPEALS - 05-10-00363-CV – 11/10/11  

The American Rule (with respect to recovery of legal fees) given effect

Dallas Court of Appeals applies the American Rule in Trespass to Try Title Suit - rejects claim for recovery of legal fees under an equitable exception theory.   

The American Rule has been a part of Texas jurisprudence for over 100 years. See Akin, Gump, 299 S.W.3d at 120 (tracing the Rule's roots in Texas jurisprudence to 1896). Moreover, the supreme court has stated that “[a]bsent a contract or statute, trial courts do not have inherent authority to require a losing party to pay the prevailing party's fees.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006) (emphasis added). Texas's only equitable exception to the American Rule that we are aware of is the common-fund doctrine, see generally Allstate Ins. Co. v. Edminster, 224 S.W.3d 456, 457-58 (Tex. App.-Dallas 2007, no pet.) (applying common-fund doctrine), which Neumann acknowledges is not applicable to this case. Given the supreme court's faithful adherence to the American Rule, and its strong statement in Tony Gullo that trial courts lack the inherent authority to award attorney's fees contrary to the Rule, we decline to adopt a new equitable exception to the Rule. Cf. Martin v. Clinical Pathology Labs., Inc., 343 S.W.3d 885, 892 (Tex. App.-Dallas 2011, pet. filed) (stating that Texas Supreme Court rather than intermediate court of appeals was proper tribunal to consider exceptions to state's strong employment-at-will doctrine).
Texas has long followed the American Rule, under which attorney's fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a statute or contract that allows for their recovery. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat'l Dev. & Research Corp., 299 S.W.3d 106, 120 (Tex. 2009). There is a statutory scheme in place to govern trespass-to-try-title claims, see generally Tex. Prop. Code Ann. §§ 22.001-.045 (West. 2000), but it contains no provision authorizing a party to recover attorney's fees from the opposing side. We have held that the plaintiff in a trespass-to-try-title suit cannot recover attorney's fees. McAnally v. Friends of WCC, Inc., 113 S.W.3d 875, 881 (Tex. App.-Dallas 2003, no pet.); see also Barfield v. Holland, 844 S.W.2d 759, 771 (Tex. App.-Tyler 1992, writ denied) (trespass-to-try-title plaintiff could not recover attorney's fees by characterizing claim as one under Declaratory Judgments Act).

SOURCE: DALLAS COURT OF APPEALS - 05-10-00445-CV – 11/6/11

Thursday, November 3, 2011

Sovereign immunity bars lawsuits against government except in case of consent (immunity waiver)


Under the common-law doctrine of sovereign immunity, the state cannot be sued without its consent. City of Houston v. Williams, No. 09-0770, 2011 WL 923980, at *3 (Tex. Mar. 18, 2011) (citing Tooke v. City of Mexia, 197 S.W.3d 325, 331 (Tex. 2006)).
Governmental immunity operates like sovereign immunity to afford similar protection to subdivisions of the state, including counties, cities, and school districts. Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004) (citing Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003)); Learners Online, Inc. v. Dallas Indep. Sch. Dist., 333 S.W.3d 636, 641-42 (Tex. App.-Dallas 2009, no pet.).

Like sovereign immunity, governmental immunity has two components: immunity from liability, which bars enforcement of a judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether. Tooke, 197 S.W.3d at 332. Governmental immunity from suit deprives a trial court of subject matter jurisdiction and is properly asserted in a plea to the jurisdiction. See Miranda, 133 S.W.3d at 225-26.
“[E]ven if the State acknowledges liability on a claim, immunity from suit bars a remedy until the Legislature consents to suit.” Learners Online, 333 S.W.3d at 642 (quoting Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 324 (Tex. 2006)). The plaintiff bears the burden of pleading facts affirmatively demonstrating waiver of immunity from suit. See, e.g., City of Irving v. Seppy, 301 S.W.3d 435, 443 (Tex. App.-Dallas 2009, no pet.). 

SOURCE: DALLAS COURT OF APPEALS – 05-11-00480-CV – 11/3/11

WBA: Good-faith report to what whistleblower believed to be appropriate law-enforcement agency or regulator

The Texas Whistleblower Act is contained in chapter 554 of the Texas Government Code. See Tex. Gov't Code Ann. §§ 554.001-.010. Section 554.002 of the Whistleblower Act provides
(a) A state or local governmental entity may not suspend or terminate the employment of, or take other adverse personnel action against, a public employee who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority. 
(b) In this section, a report is made to an appropriate law enforcement authority if the authority is a part of a state or local governmental entity or of the federal government that the employee in good faith believes is authorized to:
(1) regulate under or enforce the law alleged to be violated in the report; or         

(2) investigate or prosecute a violation of criminal law. 

Id. § 554.002.

Pursuant to section 554.0035 of the act, “[s]overeign immunity is waived and abolished to the extent of liability for the relief allowed under this chapter for a violation of this chapter.” Id. § 554.0035.        
Under section 554.002, a conclusion that a governmental entity to whom a report is made is not authorized to regulate under, enforce, investigate, or prosecute the law at issue is not determinative as to whether a whistleblower action can be maintained. Tex. Dep't of Transp. v. Needham, 82 S.W.3d 314, 320 (Tex. 2002).
A party may obtain Whistleblower Act protection if he in good faith believed such governmental entity was an appropriate law enforcement authority as the statute defines the term. Id. In the context of section 554.002(b), “good faith” means (1) the employee believed the governmental entity was authorized to regulate under or enforce the law alleged to be violated in the report, or investigate or prosecute a violation of criminal law; and (2) the employee's belief was reasonable in light of the employee's training and experience. Id. at 321.
SOURCE: DALLAS COURT OF APPEALS - 05-11-00480-CV  - 11/3/11 

Wednesday, November 2, 2011

Attorney's fees in a contract dispute: Who can recover fees under CPRC Chapter 38?

Attorney's fees not available for successful defense of breach-of-contract claim under Chaper 38 of the Civil Practice and Remedies Code or in case where the Plaintiff does not recover damages. Prevailing defendant may recover fees if the contract authorizes fees to the prevailing party regardless of whether that party is the plaintiff or the defendant.


Chapter 38 of the Texas Civil Practice and Remedies Code allows recovery of attorneys’ fees in breach of contract cases in addition to the amount of a valid claim. Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 2008). In order to recover fees, a party must (1) prevail on the breach of contract claim, and (2) recover damages. MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 666 (Tex. 2009); Mustang Pipeline Co., 134 S.W.3d at 201; Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997). The requirement of damages is implied from the statute’s language, “in addition to the amount of a valid claim,” the claimant must recover some amount on that claim. MBM Fin. Corp., 292 S.W.3d at 666.
Generally, a party seeking attorneys’ fees must show that the fees were incurred on a claim that allows recovery of such fees and must segregate fees incurred among different claims or separate parties. See Stewart Title Guar. Co. v. Aiello, 941 S.W.2d 68, 73 (Tex. 1997); Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10 (Tex. 1991), modified on other grounds by Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313–14 (Tex. 2006). When, however, the claims are “dependent upon the same set of facts or circumstances and thus are ‘intertwined to the point of being inseparable,’ the party suing for attorneys’ fees may recover the entire amount covering all claims.” Sterling, 822 S.W.2d at 11 (citing Gill Sav. Ass’n v. Chair King, Inc., 783 S.W.2d 674, 680 (Tex. App.—Houston [14th Dist.] 1989), aff’d in part & modified in part on other grounds, 797 S.W.2d 31 (Tex. 1990)).

How long does a notice of LIS PENDENS remain in effect?


The purpose of filing a lis pendens is twofold—to protect the rights the filing party claims in the property disputed in the lawsuit and to put those interested in the property on notice of the lawsuit. Collins v. Tex Mall, L.P., 297 S.W.3d 409, 418 (Tex. App.—Fort Worth 2009, no pet.).
A lis pendens notice, however, operates only during the pendency of the lawsuit and terminates with the judgment, in the absence of appeal. Hartel v. Dishman, 145 S.W.2d 865, 869 (Tex. 1940); Collins, 297 S.W.2d at 418.

SOURCE: TEXARKANA COURT OF APPEALS - 06-10-00091-CV – 11/2/11 

Because the lis pendens terminates with the judgment, it was not necessary for the trial court to declare the lis pendens void. It was not, however, error to do that which was unnecessary, but was the result of the judgment.

Non-compliance with terms of settlement agreement

Options when other party does not comply with settlement agreement

When a claim is released for a promised consideration that is not given, the claimant may either pursue rights under the release, or treat the release as rescinded and recover on the underlying claim. Murray v. Crest Constr., 900 S.W.2d 342, 344 (Tex. 1995); see also Hernandez v. LaBella, No. 14-08-00327-CV, 2010 WL 431253 (Tex. App.—Houston [14th Dist.] Feb. 9, 2010, no pet.) (mem. op.) (repudiation or anticipatory breach of settlement agreement permits nonbreaching party to elect not to proceed with settlement agreement); BACM 2001-1 San Felipe Rd. Ltd. P’ship v. Traflagar Holdings I, Ltd., 218 S.W.3d 137, 146 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (on failure of debtor to perform under executory accord, creditor may treat accord as repudiated and may choose to claim rights under the original cause of action or the accord); Shaw v. Kennedy, Ltd., 879 S.W.2d 240, 247 (Tex. App.—Amarillo 1994, no pet.) (if settlement agreement breached, nonbreaching party may treat agreement as repudiated and claim rights either under the agreement or the underlying cause of action).
Whether a party has breached a contract is a question of fact to be determined by the trier of fact. Allied Capital Partners, L.P. v. PTRI, 313 S.W.3d 460 (Tex. App.—Dallas 2010, no pet.).


Statutory waivers of immunity enjoyed by governmental entities

Governmental and Sovereign Immunity & Statutory Exceptions Thereto (immunity waivers)
In Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692 (Tex. 2003), the court explained:

Courts often use the terms sovereign immunity and governmental immunity interchangeably. However, they involve two distinct concepts. Sovereign immunity refers to the State's immunity from suit and liability. In addition to protecting the State from liability, it also protects the various divisions of state government, including agencies, boards, hospitals, and universities. Governmental immunity, on the other hand, protects political subdivisions of the State, including counties, cities, and school districts.
Id. at 694 n.3 (citations omitted). The plaintiff bears the burden to plead facts that affirmatively demonstrate that governmental immunity has been waived and that the court has subject-matter jurisdiction. McMahon Contracting, L.P. v. City of Carrollton, 277 S.W.3d 458, 464 (Tex. App. -Dallas 2009, pet. denied).
The Texas Legislature has created exceptions to the doctrine of governmental immunity which are applicable under certain conditions. See Harris Cnty. v. Dillard, 883 S.W.2d 166, 168 (Tex. 1994). Whether a governmental unit is immune from liability for a particular claim depends entirely upon statute. Dallas Cnty. Mental Health & Mental Retardation v. Bossley, 968 S.W.2d 339, 341 (Tex. 1998). The Texas Tort Claims Act provides that governmental units are liable for "personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law." Tex. Civ. Prac. & Rem. Code Ann. § 101.021(2) (West 2011). The Tort Claims Act recognizes liability for two types of dangerous conditions of real property, premise defects and special defects. Id. at § 101.022.
If a claim arises from a premise defect, the governmental unit owes to the claimant only the same duty as a private person owes to a licensee on private property. Id. at § 101.022(a). That duty requires that a landowner not injure a licensee by willful, wanton or grossly negligent conduct, and that the owner use ordinary care either to warn a licensee of, or to make reasonably safe, a dangerous condition of which the owner is aware and the licensee is not. State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 237 (Tex. 1992) (op. on reh'g). Actual knowledge of the dangerous condition is required. State v. Tennison, 509 S.W.2d 560, 562 (Tex. 1974). Constructive knowledge of the defect is insufficient. Id.
If a claim arises from a special defect, the governmental unit owes the same duty to warn that a private landowner owes an invitee. Id.; Tex. Civ. Prac. & Rem. Code Ann. § 101.022(b). That duty requires an owner to use ordinary care to reduce or eliminate an unreasonable risk of harm created by a premises condition of which the owner is or reasonably should be aware. Payne, 838 S.W.2d at 237. In The University of Texas at Austin v. Hayes, 327 S.W.3d 113, 116 (Tex. 2010), the court discussed the considerations relevant to a determination that a condition is a special defect:
The Legislature does not define special defect but likens it to conditions "such as excavations or obstructions on highways, roads, or streets." Tex. Civ. Prac. & Rem. Code Ann. § 101.022(b); see also County of Harris v. Eaton, 573 S.W.2d 177, 178-80 (Tex. 1978) (construing "special defect" as including those defects of the same kind or class as those expressly mentioned in the statute). In Denton County v. Beynon, we reaffirmed that conditions can be special defects "only if they pose a threat to the ordinary users of a particular roadway." 283 S.W.3d 329, 331 (Tex. 2009) (citing State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 238 n.3 (Tex. 1992)). Whether a condition is a special defect is a question of law. City of El Paso v. Bernal, 986 S.W.2d 610, 611 (Tex. 1999) (per curiam). In deciding this question, we have previously considered characteristics of the class of special defect, such as (1) the size of the condition, (2) whether the condition unexpectedly and physically impairs a vehicle's ability to travel on the road, (3) whether the condition presents some unusual quality apart from the ordinary course of events, and (4) whether the condition presents an unexpected and unusual danger to the ordinary users of the roadway. See Tex. Dep't of Transp. v. York, 284 S.W.3d 844, 847 (Tex. 2009) (per curiam). The class of special defects contemplated by the statute is narrow.
SOURCE: DALLAS COURT OF APPEALS - 05-11-00509-CV - 10/26/11
Appellants argue the tall vegetation located in the easement along Sundown Road is a special defect, or in the alternative a premise defect from which their claim arose. Accordingly, we first address whether the tall vegetation constituted a special defect for purposes of section 101.022(b) of the Tort Claims Act. As emphasized by the court in Hayes and in Denton County v. Beynon, 283 S.W.3d 329, 332 (Tex. 2009), the special defect class is narrow. The defect must "pose a threat to 'ordinary users' in the manner that an excavation or obstruction blocking the road does." Beynon, 283 S.W.3d at 332; see also Hayes, 327 S.W.3d at 116. The court in Beynon also explained that its statement in Payne that excavations and obstructions "present an unexpected and unusual danger to ordinary users of roadways" did not create an additional element that could be proven to establish a special defect. Beynon, 283 S.W.3d at 331, n.11. Rather, the "unexpected and unusual danger" language was used "to describe the class, not to redefine it." Id. As noted in Sipes v. Texas Dep't of Transp., 949 S.W.2d 516, 521 (Tex. App.-Texarkana 1997, writ denied), "grass and weeds growing along an East Texas highway in July are neither unexpected nor unusual." Several courts have concluded vegetation obstructing a motorist's view is not a special defect. See Anderson v. Anderson Cnty., 6 S.W.3d 612, 615-16 (Tex. App.-Tyler 1999, pet. denied) (collecting cases).

Tuesday, November 1, 2011

Waiver: Right to appeal may be waived as part of settlement agreement


Waiver is an intentional relinquishment of a known right or intentional conduct inconsistent with that right. Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003); Lang v. Lee, 777 S.W.2d 158, 164 (Tex. App.-Dallas 1989, no writ). Waiver can be established by an express renunciation of a known right. Jernigan, 111 S.W.3d at 156. In determining if waiver has in fact occurred, the court must examine the acts, words, or conduct of the parties and it must be "equivocally manifested" that it is the intent of the party to no longer assert the right. Robinson v. Robinson, 961 S.W.32d 292, 299 (Tex. App.-Houston [1st Dist.] 1997, no writ).

SOURCE: DALLAS COURT OF APPEALS - 05-10-01098-CV - 10/31/11

At the conclusion of the settlement hearing, the court asked appellant, "And you are agreeing that you understand that you are not-no longer going to prosecute the appeal that you currently have and will not appeal or attempt to appeal any other orders of this court that will be issued as a result of this settlement agreement?" Appellant agreed and said she understood. We conclude appellant unequivocally manifested her intent to waive her right to appeal the issues she now raises on appeal. Cf. Recognition Commc'ns, Inc. v. Am. Auto Ass'n, Inc., 154 S.W.3d 878, 885 (Tex. App.-Dallas 2005, pet. denied) (holding statement by attorney established party's intent to waive right to appeal a specific juy finding but did not waive party's right to appeal as to the entire case). Accordingly, appellant's second and third issues are overruled.

SOURCE: DALLAS COURT OF APPEALS - 05-10-01098-CV - 10/31/11