tag:blogger.com,1999:blog-58682284453397714252024-02-22T10:10:02.861-06:00COA.TXLegal Blog ("Blawg")
on Causes of Action and
Affirmative Defenses in Texas --
with Caselaw Snippets from Appellate Opinions, and Occasional Commentary on Decisions MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.comBlogger645125tag:blogger.com,1999:blog-5868228445339771425.post-7809206655109061302020-02-21T12:37:00.000-06:002020-03-11T09:38:26.711-05:00Making Attorney Misconduct Pay, Texas Supreme Court Shows the Way: A Critical Comment on Bethel v. Quilling (Tex. 2020) (rejecting criminal-conduct exception to "attorney immunity" in Texas)<span style="color: red;"><b>Texas Supreme Court continues to exempt an entire industry (the
legal profession) from civil liability; lets attorneys and law firms profit
from lawsuits brought to hold them accountable for wrongdoing.</b> </span><br />
<br />
Bethel v. QUILLING,
SELANDER, LOWNDS, WINSLETT & MOSER, P.C., No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0595&coa=cossup" target="_blank">18-0595</a> (Tex. Feb. 21, 2020) (Opinion by Justice John P. Devine) (holding
that Rule 91a was properly applied to dismiss lawsuit on pleadings alleging that defendant
attorneys and law firm committed fraud, trespass to chattel, and conversion, based on the affirmative defense of attorney immunity).<br />
<br />
<span style="color: #3d85c6;"><b>FROM LAW LICENCE TO LICENSE TO LIE AND CHEAT</b></span><br />
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The SCOTX previously blessed Texas attorneys’ invocation of
the Texas Citizens Participation Act (TCPA) to quash lawsuits against them, and
collect attorney’s fees from those who seek to hold them accountable for their
misdeeds. See Youngkin v. Hines, 546 S.W.3d 675, 681 (Tex. 2018); also see Cantey
Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015) (holding, as a general
rule, that Texas attorneys are immune from civil liability to non-clients for
actions taken in connection with representing a client in litigation.). <span style="mso-spacerun: yes;"> </span></div>
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<span style="mso-spacerun: yes;"><br /></span></div>
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The Texas Supreme Court has now gone a step further in blessing wayward
attorneys’ and law firms' utilization of Rule 91a to dismiss such civil suits. <o:p></o:p></div>
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<b><span style="color: #3d85c6;">TRCP 91a - THE "FRIVOLOUS SUIT" DISMISSAL RULE </span></b></div>
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Rule 91a of the Texas Rules of Civil Procedure is a “tort
reform” rule that authorizes a defendant to seek early dismissal of a lawsuit
alleged to have no merit, and allows the defendant to stick the plaintiff with
fees incurred in procuring the dismissal. <o:p></o:p></div>
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Traditionally, a dismissal on an affirmative defense
required a motion for summary judgment by the defendant, for which the Texas Rules
of Civil Procedure authorizes no fee recovery. Traditionally, the defendant had
the burden to prove the affirmative defense, rather than the plaintiff, and had
to do so with competent evidence under the summary judgment standard. <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
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<span style="mso-spacerun: yes;"><br /></span></div>
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All that is now history when a victim of attorney malfeasance
sues the perpetrator. Thanks to the jurisprudential protectionism the Texas
High Court has bestowed upon its most captive audience, Texas attorneys now have the right to terminate lawsuits against them by flashing their bar card—as it were. They can take advantage
of the status-based civil immunity that the Texas Supreme Court has seen fit to
grant them, and can even benefit from their crimes. </div>
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<br /></div>
<br />
<div style="text-align: center;">
<span style="color: #3d85c6;"><span style="font-size: large;">Devine words:</span> </span></div>
<blockquote class="tr_bq">
<div style="text-align: center;">
<span style="color: red; font-size: large;">“Criminal conduct is not categorically excepted from the protections of attorney civil immunity when the conduct alleged is connected with representing a client in litigation”</span></div>
<span style="color: red; font-size: large;">
</span></blockquote>
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<b><span style="color: #3d85c6;">RULE BY LAWYERS, FOR LAWYERS, AND TO FILL THE POCKETS OF LAWYERS </span></b></div>
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How did the nine Republican jurists on the state court of last resort pull
this off? </div>
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<br /></div>
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They did so by engaging in a sophisticated form of legislating from the
bench: Transforming the common-law doctrine of judicial proceedings privilege
(no defamation liability for statements made in a judicial proceeding) into a broad-sweeping
and categorical attorney immunity; - an immunity that shields Texas attorneys
from civil liability to non-clients--i.e. the rest of society--and lets them lie,
cheat, and engage in fraud so long as they lie, cheat, and engage in fraud to advance
the interests of a client. So long as they do it while practicing their once-noble profession. The Supremes originally amended the doctrine by judicial fiat in Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015), and now cite that case -- i.e. themselves -- as legal authority. </div>
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<span style="mso-spacerun: yes;"> </span></div>
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But the Supremes did not stop at creating a blanket immunity for the industry they are supposed to regulate and hold to high professional and ethical standards. As seen in Bethel v. Quilling Texas attorneys who engage in illegal and unethical conduct in
their work on behalf of clients can count on being rewarded. Thanks to the Texas Supreme Court immunity grant and rule 91a approval, the worst in the bar stand to profit some more from their
malfeasance if they get sued. Indeed, they can now count themselves lucky to be sued because they will get an opportunity to run up attorney's fees and shift them to the victims of the misconduct who were brazen enough to fight back and take them to court.<br />
</div>
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<o:p></o:p></div>
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</div>
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Thanks to the common-law generosity of the SCOTX, Texas
attorneys can now utilize Rule 91a to stick it to their victims; -- just in case
the amended TCPA doesn’t do the trick. <o:p></o:p></div>
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</div>
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It’s tort reform <i>plus</i>. <o:p></o:p></div>
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<a href="https://1.bp.blogspot.com/-h0aFEES6aig/XlAe-BnDBkI/AAAAAAAAQs0/_oLs4x2Ias8M0N14m0yST4dLfMiYm0lVQCNcBGAsYHQ/s1600/Bethel-v-Qulling-Rule91-Dismissal-Order.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Bethel v. Quilling Dismissal Order based on Rule 91a" border="0" data-original-height="904" data-original-width="648" height="400" src="https://1.bp.blogspot.com/-h0aFEES6aig/XlAe-BnDBkI/AAAAAAAAQs0/_oLs4x2Ias8M0N14m0yST4dLfMiYm0lVQCNcBGAsYHQ/s400/Bethel-v-Qulling-Rule91-Dismissal-Order.JPG" title="Bethel v. Quilling Dismissal Order based on Rule 91a " width="285" /></a></div>
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Bethel v. Quilling Dismissal Order (above) </div>
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and Attorney Fee Award Order to the Defendants (below)</div>
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<a href="https://1.bp.blogspot.com/-7fbkUXUI6X0/XlAfCdVz-NI/AAAAAAAAQs4/I2yMbw1jnukit2LW88wG_yMz13t_W7rNgCNcBGAsYHQ/s1600/Bethel-v-Qulling-Rule91-Dismissal-Fee-Order.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="844" data-original-width="1305" height="257" src="https://1.bp.blogspot.com/-7fbkUXUI6X0/XlAfCdVz-NI/AAAAAAAAQs4/I2yMbw1jnukit2LW88wG_yMz13t_W7rNgCNcBGAsYHQ/s400/Bethel-v-Qulling-Rule91-Dismissal-Fee-Order.JPG" width="400" /></a></div>
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IN THE SUPREME COURT OF TEXAS<o:p></o:p></div>
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444444444444<o:p></o:p></div>
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NO. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0595&coa=cossup" target="_blank">18-0595</a><o:p></o:p></div>
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444444444444<o:p></o:p></div>
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<br /></div>
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CHERLYN BETHEL, INDIVIDUALLY AND AS THE REPRESENTATIVE OF
THE ESTATE<o:p></o:p></div>
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OF RONALD J. BETHEL, DECEASED, PETITIONER,<o:p></o:p></div>
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v.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: center;">
QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., AND
JAMES H.<o:p></o:p></div>
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MOODY, III, RESPONDENTS<o:p></o:p></div>
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<br /></div>
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4444444444444444444444444444444444444444444444444444<o:p></o:p></div>
<div class="MsoNormal" style="text-align: center;">
ON PETITION FOR REVIEW FROM THE<o:p></o:p></div>
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COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS<o:p></o:p></div>
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4444444444444444444444444444444444444444444444444444<o:p></o:p></div>
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<br /></div>
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Argued November 7, 2019<o:p></o:p></div>
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<br /></div>
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<span style="font-size: x-small;">JUSTICE DEVINE delivered the opinion of the Court.<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">This case presents two issues: first, whether an affirmative
defense may be the basis of a<o:p></o:p></span></div>
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<span style="font-size: x-small;">Rule 91a motion to dismiss; and second, whether the alleged
destruction of evidence is an action<o:p></o:p></span></div>
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<span style="font-size: x-small;">“taken in connection with representing a client in
litigation,” thus entitling the respondent attorneys<o:p></o:p></span></div>
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<span style="font-size: x-small;">to attorney immunity. We join the court of appeals in
concluding that Rule 91a permits dismissal<o:p></o:p></span></div>
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<span style="font-size: x-small;">based on an affirmative defense. See 581 S.W.3d 306, 310
(Tex. App.—Dallas 2018). We also<o:p></o:p></span></div>
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<span style="font-size: x-small;">agree with the court of appeals that, on the facts of this
case, the respondent attorneys are entitled<o:p></o:p></span></div>
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<span style="font-size: x-small;">to attorney immunity. See id. at 311-13. Accordingly, we
affirm.<o:p></o:p></span></div>
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<span style="font-size: x-small;">I<o:p></o:p></span></div>
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<span style="font-size: x-small;">Petitioner Cherlyn Bethel’s husband, Ronald, tragically died
in a car accident while towing<o:p></o:p></span></div>
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<span style="font-size: x-small;">a trailer. Bethel sued the trailer’s manufacturer, alleging
that the trailer’s faulty brakes caused the<o:p></o:p></span></div>
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<span style="font-size: x-small;">accident. Law firm Quilling, Selander, Lownds, Winslett
& Moser, as well as attorney James<o:p></o:p></span></div>
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<span style="font-size: x-small;">“Hamp” Moody (collectively, Quilling), represented the
manufacturer in the lawsuit. Bethel alleges<o:p></o:p></span></div>
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<span style="font-size: x-small;">that Quilling intentionally destroyed key evidence in the
case by disassembling and testing the<o:p></o:p></span></div>
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<span style="font-size: x-small;">trailer’s brakes before Bethel had the opportunity to either
examine them or document their original<o:p></o:p></span></div>
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<span style="font-size: x-small;">condition.<o:p></o:p></span></div>
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<span style="font-size: x-small;">Bethel sued Quilling for, among other things, fraud,
trespass to chattel, and conversion.1<o:p></o:p></span></div>
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<span style="font-size: x-small;">Quilling moved to dismiss the case under Texas Rule of Civil
Procedure 91a, arguing that it was<o:p></o:p></span></div>
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<span style="font-size: x-small;">entitled to attorney immunity as to all of Bethel’s claims.
The trial court granted Quilling’s motion<o:p></o:p></span></div>
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<span style="font-size: x-small;">and dismissed the case. Bethel appealed, arguing that (1)
affirmative defenses, such as attorney<o:p></o:p></span></div>
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<span style="font-size: x-small;">immunity, cannot be the basis of a Rule 91a dismissal, and
(2) attorney immunity did not protect<o:p></o:p></span></div>
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<span style="font-size: x-small;">Quilling’s conduct.<o:p></o:p></span></div>
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<span style="font-size: x-small;">The court of appeals affirmed. 581 S.W.3d 306. First, the
court of appeals concluded that<o:p></o:p></span></div>
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<span style="font-size: x-small;">attorney immunity could be the basis of a Rule 91a motion
because the allegations in Bethel’s<o:p></o:p></span></div>
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<span style="font-size: x-small;">pleadings established Quilling’s entitlement to the defense.
Id. at 309–10. Second, the court of<o:p></o:p></span></div>
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<span style="font-size: x-small;">appeals reasoned that Quilling’s actions, while possibly
wrongful, were the “kinds of actions” that<o:p></o:p></span></div>
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<span style="font-size: x-small;">are part of an attorney’s duties in representing a client in
litigation. Id. at 311–13. Thus, the court<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">1</span><span style="font-size: x-small;"> </span><span style="font-size: x-small;">Bethel also sued the
experts who conducted Quilling’s examination but later nonsuited them to
perfect this appeal. 581 S.W.3d 306, 309.</span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">PAGE 2<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">of appeals held that attorney immunity barred all of
Bethel’s claims.2<o:p></o:p></span></div>
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<span style="font-size: x-small;">II<o:p></o:p></span></div>
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<span style="font-size: x-small;">Texas Rule of Civil Procedure 91a provides that a party “may
move to dismiss a cause of<o:p></o:p></span></div>
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<span style="font-size: x-small;">action on the grounds that it has no basis in law or fact.”
TEX. R. CIV. P. 91a.1. “A cause of action<o:p></o:p></span></div>
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<span style="font-size: x-small;">has no basis in law if the allegations, taken as true,
together with inferences reasonably drawn from<o:p></o:p></span></div>
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<span style="font-size: x-small;">them, do not entitle the claimant to the relief sought.” Id.
“A cause of action has no basis in fact<o:p></o:p></span></div>
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<span style="font-size: x-small;">if no reasonable person could believe the facts pleaded.”
Id. In ruling on a Rule 91a motion, a court<o:p></o:p></span></div>
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<span style="font-size: x-small;">“may not consider evidence . . . and must decide the motion
based solely on the pleading of the<o:p></o:p></span></div>
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<span style="font-size: x-small;">cause of action.” TEX. R. CIV. P. 91a.6. We review the
merits of a Rule 91a motion de novo. City<o:p></o:p></span></div>
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<span style="font-size: x-small;">of Dallas v. Sanchez, 494 S.W.3d 722, 724 (Tex. 2016) (per
curiam).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Attorney immunity is an affirmative defense. Youngkin v.
Hines, 546 S.W.3d 675, 681 (Tex.<o:p></o:p></span></div>
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<span style="font-size: x-small;">2018). Bethel reasons that affirmative defenses are
generally waived unless they are raised in the<o:p></o:p></span></div>
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<span style="font-size: x-small;">defendant’s pleading. TEX. R. CIV. P. 94. Thus, Bethel
contends, a court must look to the<o:p></o:p></span></div>
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<span style="font-size: x-small;">defendant’s pleading to determine whether an affirmative
defense is properly before the court.<o:p></o:p></span></div>
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<span style="font-size: x-small;">However, Rule 91a.6 expressly limits the court’s
consideration to “the pleading of the cause of<o:p></o:p></span></div>
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<span style="font-size: x-small;">action,” together with a narrow class of exhibits. TEX. R.
CIV. P. 91a.6. Because only a plaintiff’s<o:p></o:p></span></div>
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<span style="font-size: x-small;">pleading is a “pleading of a cause of action,” Bethel argues
that courts may not consider a<o:p></o:p></span></div>
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<span style="font-size: x-small;">defendant’s pleading in making a Rule 91a determination.
Bethel therefore concludes that an<o:p></o:p></span></div>
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<span style="font-size: x-small;">affirmative defense can never be the basis of a Rule 91a
motion.<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br />2 <span style="mso-spacerun: yes;"> </span>The court of
appeals also concluded that Bethel perhaps waived the Rule 91a argument, but
the court addressed the merits of the argument anyway. 581 S.W.3d at 309. In
this Court, the parties agree that Bethel did not waive the argument and urge
the Court to reach the Rule 91a question on the merits.<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">PAGE 3<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">We disagree. We interpret rules of procedure according to
our usual principles of statutory<o:p></o:p></span></div>
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<span style="font-size: x-small;">interpretation. Ford Motor Co. v. Garcia, 363 S.W.3d 573,
579 (Tex. 2012). We therefore begin<o:p></o:p></span></div>
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<span style="font-size: x-small;">with the text of the rule and construe it according to its
plain meaning. Id. However, Texas Rule<o:p></o:p></span></div>
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<span style="font-size: x-small;">of Civil Procedure 1 provides that the rules of procedure
“shall be given a liberal construction” to<o:p></o:p></span></div>
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<span style="font-size: x-small;">further the rules’ objective of “obtain[ing] a just, fair,
equitable[,] and impartial adjudication” of<o:p></o:p></span></div>
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<span style="font-size: x-small;">parties’ rights. TEX. R. CIV. P. 1. We thus apply our
general canons of statutory interpretation in<o:p></o:p></span></div>
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<span style="font-size: x-small;">light of this specific guiding rule. See, e.g., In re
Bridgestone Ams. Tire Operations, LLC, 459<o:p></o:p></span></div>
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<span style="font-size: x-small;">S.W.3d 565, 569 (Tex. 2015).<o:p></o:p></span></div>
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<span style="font-size: x-small;">Bethel urges us to focus on the rule’s requirement that the
court “must decide the motion<o:p></o:p></span></div>
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<span style="font-size: x-small;">based solely on the pleading of the cause of action.” TEX.
R. CIV. P. 91a.6 (emphasis added). As<o:p></o:p></span></div>
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<span style="font-size: x-small;">Bethel sees it, this provision prohibits a court deciding a
Rule 91a motion from considering anything<o:p></o:p></span></div>
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<span style="font-size: x-small;">other than the plaintiff’s pleading. Of course, it is not
possible to “decide the motion” without<o:p></o:p></span></div>
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<span style="font-size: x-small;">considering the motion itself, in addition to the
plaintiff’s pleading. Additionally, the rule provides<o:p></o:p></span></div>
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<span style="font-size: x-small;">that the court may hold a hearing on the motion. TEX.R.CIV.
P. 91a.6. Thus, the rule contemplates<o:p></o:p></span></div>
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<span style="font-size: x-small;">that a court may consider at least the substance of the Rule
91a motion and arguments at the hearing,<o:p></o:p></span></div>
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<span style="font-size: x-small;">in addition to the plaintiff’s pleadings, in deciding the
motion. Bethel’s proffered interpretation<o:p></o:p></span></div>
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<span style="font-size: x-small;">would render these aspects of the rule meaningless,
preventing a court from considering even the<o:p></o:p></span></div>
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<span style="font-size: x-small;">substance of a Rule 91a motion or a response in deciding
whether to dismiss the case. See Silguero<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">v. CSL Plasma, Inc., 579 S.W.3d 53, 59 (Tex. 2019) (noting
that in interpreting a statute, we avoid<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">“absurd or nonsensical results” (quotations omitted)).
Bethel’s overly narrow interpretation of one<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">piece of the rule simply does not comport with the text of
the rule as a whole. See id. (“The statutory<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 4<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">words must be determined considering the context in which
they are used, not in isolation.”).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Construing the rules of procedure liberally, as Rule 1
requires us to do, we conclude that<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Rule 91a limits the scope of a court’s factual, but not
legal, inquiry. We begin with the text of the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">rule. Ford Motor Co., 363 S.W.3d at 579. Rule 91a provides
that “the court may not consider<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">evidence in ruling on the motion and must decide the motion
based solely on the pleading of the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">cause of action.” TEX.R.CIV. P. 91a.6 (emphasis added).
Thus, the rule contrasts “the pleading of<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">the cause of action” with “evidence,” not the defendant’s
pleading. This dichotomy indicates that<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">the limitation is factual, rather than legal, in nature. Further,
the rule provides that a court may<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">dismiss a claim as lacking a basis in law “if the
allegations, taken as true, together with inferences<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">reasonably drawn from them, do not entitle the claimant to
the relief sought.” TEX.R.CIV.P. 91a.1.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Again, the rule limits the scope of the court’s factual
inquiry—the court must take the “allegations”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">as true—but does not limit the scope of the court’s legal
inquiry in the same way. Rather, the rule<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">provides that a claim lacks a basis in law if the facts
alleged “do not entitle the claimant to the relief<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">sought.” Id. The rule does not limit the universe of legal
theories by which the movant may show<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">that the claimant is not entitled to relief based on the
facts as alleged.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">This interpretation accounts for the parts of the rule that
allow courts to consider the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">substance of Rule 91a motions and hearings in addition to
the plaintiff’s pleadings. See TEX.R.CIV.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">P. 91a.6. Both motions and hearings are avenues by which the
movant may present legal theories<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">as to why the claimant is not entitled to relief. Thus, the
legal-factual distinction avoids violence<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 5<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">to the text of the rule as a whole while preserving the
rule’s intended limitation on factual inquiries.3<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">See Silguero, 579 S.W.3d at 59 (“In interpreting statutes,
we must look to the plain language,<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">construing the text in light of the statute as a whole.”).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Finally, Rule 1 directs us to consider expedition and cost
to the parties and the state in<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">construing rules of procedure. TEX. R. CIV. P. 1 (“To the
end that this objective may be attained<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">with as great expedition and dispatch and at the least
expense both to the litigants and to the state<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">as may be practicable, these rules shall be given a liberal
construction.”). Our interpretation of Rule<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">91a serves these objectives by allowing courts to dismiss
meritless cases before the parties engage<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">in costly discovery. Forcing parties to conduct discovery
when the claimant’s allegations<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">conclusively establish the existence of an affirmative
defense would be a significant waste of state<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">and private resources.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">In sum, Rule 91a limits a court’s factual inquiry to the
plaintiff’s pleadings but does not so<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">limit the court’s legal inquiry. In deciding a Rule 91a
motion, a court may consider the defendant’s<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">pleadings if doing so is necessary to make the legal
determination of whether an affirmative defense<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">is properly before the court. We therefore conclude that
Rule 91a permits motions to dismiss based<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">on affirmative defenses “if the allegations, taken as true,
together with inferences reasonably drawn<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">from them, do not entitle the claimant to the relief
sought.” TEX.R.CIV. P. 91a.1. Of course, some<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">affirmative defenses will not be conclusively established by
the facts in a plaintiff’s petition.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">3 </span><span style="font-size: x-small;">Bethel also argues
that we should read Rule 91a narrowly because previous versions of the rule
included a mandatory fee-shifting provision. However, the fee-shifting
provision is no longer mandatory and does not affect our analysis. See TEX. R.
CIV. P. 91a.7 (providing that a court “may award” costs and fees to the
prevailing party).</span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 6<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Because Rule 91a does not allow consideration of evidence,
such defenses are not a proper basis for<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">a motion to dismiss.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">In this case, the allegations in Bethel’s petition show that
Bethel is not entitled to relief. In<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">its Rule 91a motion, Quilling simply argued that the
facts—as Bethel pleaded them—entitled<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Quilling to attorney immunity and thus dismissal under Rule
91a. The trial court did not need to<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">look outside Bethel’s pleadings to determine whether
attorney immunity applied to the alleged facts.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">See Youngkin, 546 S.W.3d at 681–83 (holding that a defendant
was “entitled to dismissal” based on<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">attorney immunity, despite the defendant’s failure to
support his defense with evidence, because “the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">necessary facts [were] not in dispute”); Sabre Travel Int’l,
Ltd. v. Deutsche Lufthansa AG, 567<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">S.W.3d 725, 736–41 (Tex. 2019) (considering a federal
preemption affirmative defense in the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">context of a Rule 91a motion); cf. AC Interests, L.P. v.
Tex. Comm’n on Envtl. Quality, 543 S.W.3d<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">703, 706 (Tex. 2018) (noting that a Rule 91a motion is not
the proper vehicle for dismissal based<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">on untimely service of process because the court has to look
beyond the pleadings to determine<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">whether process was, in fact, untimely). Taking Bethel’s
allegations as true, the trial court<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">determined that Bethel was not entitled to the relief sought
because attorney immunity barred<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Bethel’s claims.4<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><span style="mso-spacerun: yes;"> </span>That is enough for
dismissal under Rule 91a.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">4</span><span style="font-size: x-small;"> </span><span style="font-size: x-small;">Bethel further argues
that, even if an affirmative defense is established on the face of a
plaintiff’s pleading, dismissal is improper because there may be additional
facts that negate the affirmative defense. However, Bethel has yet to
articulate what kind of additional facts would negate attorney immunity in this
case. If a plaintiff believes that there are additional facts that would negate
an affirmative defense in a Rule 91a motion, the plaintiff may amend her pleadings
accordingly. See TEX. R. CIV. P. 63 (allowing amendment in most circumstances);
TEX. R. CIV. P. 91a.5(b) (contemplating amendment after a Rule 91a motion is
filed).</span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 7<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">III<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">We next turn to the question of attorney immunity. In Cantey
Hanger, LLP v. Byrd, we held<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">that, “as a general rule, attorneys are immune from civil
liability to non-clients for actions taken in<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">connection with representing a client in litigation.” 467
S.W.3d 477, 481 (Tex. 2015) (quotations<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">omitted). The immunity inquiry “focuses on the kind of
conduct at issue rather than the alleged<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">wrongfulness of said conduct.” Youngkin, 546 S.W.3d at 681
(emphasis in original). Under this<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">analysis, “a lawyer is no more susceptible to liability for
a given action merely because it is alleged<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">to be fraudulent or otherwise wrongful.” Id. In this case,
however, Bethel urges us to recognize an<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">exception where a third party alleges that an attorney engaged
in criminal conduct during the course<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">of litigation.5<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">We recently declined to recognize fraud as an exception to
the attorney-immunity doctrine.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">In Cantey Hanger, 467 S.W.3d at 484–86, we concluded that a
law firm was shielded by attorney<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">immunity for preparing documents ancillary to a divorce
decree, even though the firm allegedly<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">acted fraudulently in drafting the documents. “An attorney
is given latitude to pursue legal rights<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">that he deems necessary and proper precisely to avoid the
inevitable conflict that would arise if he<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">were forced constantly to balance his own potential exposure
against his client’s best interest.” Id.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">at 483 (citations and quotations omitted). We recognized
that a general fraud exception to attorney<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">immunity would “significantly undercut” this purpose. Id.
Thus, we concluded that “[m]erely<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">labeling an attorney’s conduct ‘fraudulent’ does not and
should not remove it from the scope of<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">5 <span style="mso-spacerun: yes;"> </span>Bethel’s briefing
frames the issue differently, arguing that “[c]riminal conduct is not ‘an
exception to the attorney-immunity doctrine’—it is simply not the type of civil
wrong to which the doctrine applies.” However the issue is framed, though,
Bethel is asking us to categorically exempt allegedly criminal conduct from
attorney immunity.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 8<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">client representation or render it ‘foreign to the duties of
an attorney.’” Id. Instead, our focus<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">remained on whether the attorney’s complained-of conduct
fell within “the scope of an attorney’s<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">legal representation of his client.” Id. at 484.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">The same reasoning applies here. Under Bethel’s proposed
exception, a plaintiff could avoid<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">the attorney-immunity doctrine by merely alleging that an
attorney’s conduct was “criminal.” This<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">would “significantly undercut” the protections of attorney
immunity by allowing non-client plaintiffs<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">to sue opposing counsel so long as the plaintiffs alleged
that the attorney’s actions were criminal in<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">nature. Id. at 483. We therefore conclude that criminal
conduct is not categorically excepted from<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">the protections of attorney civil immunity when the conduct
alleged is connected with representing<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">a client in litigation. Accord Troice v. Greenberg Traurig,
L.L.P., 921 F.3d 501, 507 (5th Cir. 2019)<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">(making an Erie guess that, under Texas law, attorney
immunity “can apply even to criminal acts<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">so long as the attorney was acting within the scope of
representation”).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">We have long recognized, however, that attorney immunity is
not boundless. See Poole v.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Hous. & T.C. Ry. Co., 58 Tex. 134 (1882) (holding that
attorney immunity did not protect actions<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">taken “for the purpose and with the intention of
consummating [] fraud upon [the] appellant”). An<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">attorney is not immune from suit for participating in
criminal or “independently fraudulent<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">activities” that fall outside the scope of the attorney’s
representation of a client. Cantey Hanger, 467<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">S.W.3d at 483. For example, immunity does not apply when an
attorney participates in a fraudulent<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">business scheme with her client or knowingly facilitates a
fraudulent transfer to help her clients<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">avoid paying a judgment. Id. at 482. Immunity also does not
apply when an attorney’s actions do<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">not involve “the provision of legal services”—for example,
when an attorney assaults opposing<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">counsel. Id. Certainly, there is a wide range of criminal
conduct that is not within the “scope of<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 9<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">client representation” and therefore “foreign to the duties
of an attorney.” Id. at 483. Thus, while<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">we decline to recognize a per se criminal-conduct exception,
an attorney’s allegedly criminal<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">conduct may fall outside the scope of attorney immunity. See
Troice, 921 F.3d at 507 (“We<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">conclude that criminal conduct does not automatically negate
immunity, but in the usual case it will<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">be outside the scope of representation.”). We also note that
nothing in our attorney-immunity<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">jurisprudence affects an attorney’s potential criminal
liability if the conduct constitutes a criminal<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">offense. And other remedies—such as sanctions, spoliation
instructions, contempt, and disciplinary<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">proceedings—may be available even if immunity shields an
attorney’s wrongful conduct. See<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Cantey Hanger, 467 S.W.3d at 482.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">With these principles in mind, and taking Bethel’s factual
allegations as true, we conclude<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">that Quilling’s complained-of actions are the kind of
actions that are “taken in connection with<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">representing a client in litigation.” Cantey Hanger, 467
S.W.3d at 481. Bethel’s petition alleges<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">that Quilling destroyed evidence in the underlying suit by:
(1) disassembling the trailer’s brakes;<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">(2) failing to “establish any testing/inspection protocol at
the time of the disassembly”; (3) failing<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">to document the disassembly on video; (4) changing the
position of the brakes’ adjuster screws to<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">facilitate the disassembly; (5) actuating some of the brakes
to test them; and (6) spilling oil on the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">brakes during disassembly. Thus, at bottom, Bethel takes
issue with the manner in which Quilling<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">examined and tested evidence during discovery in civil
litigation while representing Bethel’s<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">opposing party. These are paradigmatic functions of an
attorney representing a client in litigation.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Bethel nevertheless contends that Quilling’s
conduct—criminal destruction of personal<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">property—is not the type of conduct that is part of client
representation. This certainly could be true<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">in some circumstances. For instance, if an attorney
destroyed a non-client’s property that was<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">PAGE 10<o:p></o:p></span></div>
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<span style="font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">unrelated to litigation, then that conduct likely would not
involve “the provision of legal services,”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">and the attorney would not be entitled to immunity. See
Cantey Hanger, 467 S.W.3d at 482.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Immunity also may not protect the intentional destruction of
evidence—for instance, if Quilling had<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">simply taken a sledgehammer to the brakes. Such actions do
not involve the provision of legal<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">services and therefore cannot fall within the scope of
client representation. See id. Here, however,<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Quilling acted in conjunction with its experts to examine
and test key evidence in the underlying<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">suit. It may well be, as Bethel alleges, that Quilling’s
actions resulted in the destruction of evidence.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">But again, for civil-immunity purposes, our analysis looks
to the type of conduct, not whether that<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">conduct was wrongful. Youngkin, 546 S.W.3d at 681. Because
Quilling’s allegedly wrongful<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">conduct involved the provision of legal
services—specifically, examining and testing relevant<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">evidence—that conduct is protected by attorney immunity.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Based on the facts alleged in Bethel’s petition, the courts
below correctly concluded that<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">attorney immunity shields Quilling from civil suit by a
third party, whom Quilling did not represent,<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">for conduct connected to Quilling’s representation of its
client in litigation. Accordingly, the<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">judgment of the court of appeals is affirmed.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">________________________________________<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">John P. Devine<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">Justice<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">OPINION DELIVERED: February 21, 2020<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: x-small;">11</span><o:p></o:p></div>
<div class="MsoNormal">
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-B5BO1jHbZJM/XlBLJ3D4jlI/AAAAAAAAQtI/HRgyWfwDgns4-c6JfNeyW5So0aVtbKSYgCNcBGAsYHQ/s1600/Tex%2BBethel%2Bv%2BQuilling%2B-%2BQuilling%2BLetter%2B2019-11-08%2Bre%2Bprotection%2Bof%2Bcriminal%2Bconduct%2Bunder%2BTexas%2Battorney%2Bimmunity%2Bdoctrine.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="893" data-original-width="763" height="640" src="https://1.bp.blogspot.com/-B5BO1jHbZJM/XlBLJ3D4jlI/AAAAAAAAQtI/HRgyWfwDgns4-c6JfNeyW5So0aVtbKSYgCNcBGAsYHQ/s640/Tex%2BBethel%2Bv%2BQuilling%2B-%2BQuilling%2BLetter%2B2019-11-08%2Bre%2Bprotection%2Bof%2Bcriminal%2Bconduct%2Bunder%2BTexas%2Battorney%2Bimmunity%2Bdoctrine.JPG" width="545" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><b><span style="color: blue; font-size: small;">Fifth Circuit Erie Too: Civil Immunity for Criminal Conduct for Texas Attorneys </span></b></td></tr>
</tbody></table>
<br /></div>
<div class="MsoNormal">
18-0595 CHERLYN BETHEL, INDIVIDUALLY, AND AS THE
REPRESENTATIVE OF THE ESTATE OF RONALD J. BETHEL, DECEASED v. QUILLING,
SELANDER, LOWNDS, WINSLETT & MOSER, P.C., AND JAMES H. MOODY, III; from
Dallas County; 5th Court of Appeals District (05-17-00850-CV, 581 SW3d 306,
05-30-18). <o:p></o:p></div>
<div class="MsoNormal">
The Court affirms the court of appeals' judgment. <o:p></o:p><br />
<br />
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
<b>581 S.W.3d 306 (2018)</b></center>
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<h3 id="gsl_case_name" style="border: 0px; margin: 1em 0px; padding: 0px;">
<span style="color: #3d85c6;">Cherlyn BETHEL, Individually and as the representative of the Estate of Ronald J. Bethel, Deceased, Appellant<br />v.<br />QUILLING, SELANDER, LOWNDS, WINSLETT & MOSER, P.C., and James H. Moody, III, Appellees</span></h3>
</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
<a href="https://scholar.google.co.uk/scholar?scidkt=813925040169289355&as_sdt=2&hl=en" style="color: #660099;">No. 05-17-00850-CV.</a></center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
<div style="position: relative;">
<b>Court of Appeals of Texas, Dallas.</b></div>
</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
Opinion Filed May 30, 2018.</center>
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</center>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
On Appeal from the 116th Judicial District Court, Dallas County, Texas, Trial Court Cause No. DC-17-03487.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Affirmed.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Morgan McPheeters, Frederick Leighton Durham, Jessica Foster, Thad D. Spalding, Kelly, Durham & Pittard, LLP, Andrew Galen Counts, E. Todd Tracy, Stewart Donavan Matthews, The Tracy Law Firm, Dallas, TX, for Cherlyn Bethel, Individually and as the Representative of the Estate of Ronald J. Bethel, Deceased.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Marcie L. Schout, Quilling, Selander, Lownds, Winslett & Moser, P.C., Dallas, TX, for Quilling, Selander, Lownds, Winslett & Moser, P.D.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Before Justices Francis, Fillmore, and Whitehill.</div>
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</div>
<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
<a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p308" style="color: #aaaaaa; font-size: 13px; font-weight: normal; left: -55px; position: absolute; text-decoration-line: none;">308</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p308" id="p308" style="color: #aaaaaa; font-size: 13px; font-weight: normal; text-decoration-line: none;">*308</a> MEMORANDUM OPINION</h2>
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</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Opinion by Justice Francis. </div>
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<br /></div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Cherlyn Bethel, individually and as the representative of the Estate of Ronald J. Bethel, sued opposing counsel for conduct involving an expert inspection of a trailer brake assembly that is the focus of a separate wrongful death action. Appellees Quilling, Selander, Lownds, Winslett & Moser, P.C., and James H. Moody, III, filed a motion to dismiss under Texas Rule of Civil Procedure 91a, asserting the affirmative defense of attorney immunity. The trial court granted the motion, dismissed Bethel's suit, and awarded attorney's fees to appellees. In two issues, Bethel challenges the ruling on appeal. We affirm.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Bethel's petition in this suit alleged the following: Bethel's husband, Ron, died following an accident that Bethel contends was caused by defective brakes in the trailer he was towing. Bethel sued the manufacturer of the trailer, and appellees represent the manufacturer in the wrongful death suit. According to Bethel, during the course of that litigation, appellees or their experts, with appellees' "knowledge and at their direction and supervision," disassembled the brakes and destroyed their condition. Bethel filed this lawsuit against appellees and their experts, alleging fraud, tortious interference with a contract, spoliation of evidence, "conspiracy to deny [Bethel] the pursuit of justice," trespass to chattel, conversion, negligence, and gross negligence. She sought damages for the destruction of the evidence.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Appellees filed a motion to dismiss the lawsuit, arguing there was no basis in law or fact because the claims were barred by attorney immunity. Bethel responded to the motion, arguing appellees' conduct constituted <a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p309" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">309</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p309" id="p309" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*309</a> criminal destruction of property, and Texas law is unresolved as to whether the attorney immunity doctrine applies to criminal conduct. In addition, Bethel amended her petition to add nine paragraphs addressing whether the attorney immunity doctrine applied.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
The trial court granted the motion, dismissed Bethel's claims with prejudice, and awarded appellees $7,480 in attorney's fees as well as contingent appellate attorney's fees. After Bethel nonsuited her claims against the engineers and their firms, she appealed the trial court's order dismissing her claims against appellees.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Under rule 91a, a party may move to dismiss a cause of action on the grounds it has no basis in law or fact. TEX. R. CIV. P. 91a.1. "A cause of action has no basis in law if the allegations, taken as true, together with the inferences reasonably drawn from them, do not entitle the claimant to the relief sought." <i>Id.</i> In ruling on a 91a motion, the trial court may not consider evidence and must decide the motion "solely on the pleading of the cause of action, together with any pleading exhibits permitted by Rule 59." TEX. R. CIV. P. 91a.6; <a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=14458243639878563354&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Highland Capital Mgmt., LP v. Looper Reed & McGraw, P.C.,</i> No. 05-15-00055-CV, 2016 WL 164528, at *4 (Tex. App.-Dallas Jan. 14, 2016, pet. denied)</a> (mem. op.). Whether a cause of action has any basis in law is a legal question we review de novo. <i>See </i><a href="https://scholar.google.co.uk/scholar_case?case=17896359589823330448&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Dallas v. Sanchez,</i> 494 S.W.3d 722, 724 (Tex. 2016) (per curiam)</a>. We base our review on the allegations in the live petition and any attachments, and we accept as true the factual allegations. <a href="https://scholar.google.co.uk/scholar_case?case=9923006697149838580&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Wooley v. Schaffer,</i> 447 S.W.3d 71, 76 (Tex. App.-Houston [14th] 2014, pet. denied)</a>.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
In her first issue, Bethel asserts the plain language of rule 91a limits the scope of a court's review to the plaintiff's pleading. Because an affirmative defense is not part of a plaintiff's pleading, she argues, it cannot serve as a basis for dismissal. Consequently, she concludes, the trial court erred by granting appellees' motion on the basis of the affirmative defense of attorney immunity.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Initially, we note that Bethel did not present this particular issue to the trial court in her response to the motion to dismiss; rather, her response argued only that appellees' conduct constituted a crime for which attorney immunity should not apply. Preservation of error reflects important prudential considerations recognizing that the judicial process benefits greatly when trial courts have the opportunity to first consider and rule on error. <a href="https://scholar.google.co.uk/scholar_case?case=3195866027663516695&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burbage v. Burbage,</i> 447 S.W.3d 249, 258 (Tex. 2014)</a>. Affording courts this opportunity conserves judicial resources and promotes fairness by ensuring that a party does not neglect a complaint at trial and raise it for the first time on appeal. <i>Id.</i> Because Bethel did not present this issue to the trial court below, we conclude it is waived.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
But even assuming this issue is properly before us,<sup><a class="gsl_hash" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Bethel acknowledges this Court, as well as others, have upheld rule 91a dismissals on the basis of affirmative defenses. <i>See </i><a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=14458243639878563354&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Highland Capital,</i> 2016 WL 164528, at *4-6</a> (attorney immunity); <i>Galan Family Tr. v. State,</i> No. 03-15-00816-CV, 2017 WL 744250, at *3 (Tex. App.-Austin Feb. 24, 2017, pet. denied) (mem. op.) (statute of limitations); <a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=16458856286953388060&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Guzder v. Haynes & Boone, LLP,</i> No. 01-13-00985-CV, 2015 WL 3423731, at *7 (Tex. App.- </a><a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p310" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">310</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p310" id="p310" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*310</a><a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=16458856286953388060&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"> Houston [1st Dist.] May 28, 2015, no pet.)</a> (mem. op.) (attorney immunity); <a href="https://scholar.google.co.uk/scholar_case?case=12759260260661370987&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>GoDaddy.com, LLC v. Toups,</i> 429 S.W.3d 752, 754-55 (Tex. App.-Beaumont 2014, pet. denied)</a> (immunity from suit under the Communications Decency Act). Nevertheless, she argues these cases apply a "mistaken interpretation" of the rule and urges us to follow <a href="https://scholar.google.co.uk/scholar_case?case=14778678499347798205&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bedford Internet Office Space, LLC v. Texas Insurance Group, Inc.,</i> 537 S.W.3d 717 (Tex. App.-Fort Worth 2017, pet. filed)</a>. There, the Fort Worth court concluded the plain language of the rule required trial courts to "wear blinders to any pleadings except the pleading of the cause of action'" and determined the court erred by dismissing claims on the basis of the statute of limitations, which would require the court to look beyond the plaintiff's pleadings and review the defendant's pleadings. <a href="https://scholar.google.co.uk/scholar_case?case=14778678499347798205&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;">537 S.W.3d at 720</a>. We decline Bethel's invitation for two reasons.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
First, as stated above, this Court previously applied rule 91a to the affirmative defense of attorney immunity. <i>See </i><a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=14458243639878563354&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Highland Capital,</i> 2016 WL 164528, at *4-6</a>. In <i>Highland Capital,</i> we considered the plaintiff's pleadings and concluded that, meritorious or not, the <i>type</i> of conduct alleged fell squarely within the scope of the law firm's representation of its client. 2016 WL 164528, at *4. We therefore concluded the trial court did not err in granting the law firm's rule 91a motion to dismiss the non-client's claims for theft, breach of the duty of confidentiality, conversion, tortious interference with contract, and civil conspiracy to commit theft, extortion, slander, and disparagement based on attorney immunity. <i>Id.</i></div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Second, the rationale underpinning Bethel's argument and the <i>Bedford Internet</i> case is that rule 91a limits a court's consideration to the plaintiff's pleading of the cause of action. Even if we were to assume the correctness of this argument, Bethel's live pleading included nine paragraphs on why attorney immunity does not shield appellees from her suit. In particular, she alleged she owned the trailer and its component parts; appellees knew she owned them and that they were critical to her claim against the manufacturer; appellees did not obtain her consent to conduct destructive testing; she did not consent to such testing; and appellees "intentionally and knowingly directed the destructive disassembly, testing, and examination of the trailer brakes." She alleged appellees were "seasoned veterans" who were familiar with the standards governing forensic engineering and product liability litigation and were aware "with reasonable certainty" that the disassembly, testing, and examination of the trailer brakes would damage or destroy the brakes. Finally, Bethel alleged appellees' acts and omissions constituted criminal tampering with evidence, given they were aware she had filed a civil lawsuit against the trailer's manufacturer and they altered or destroyed the brakes with the intent to impair the "verity, legibility, or availability of the trailer brakes as evidence" in the suit. Because these allegations are contained in Bethel's live pleading, the trial court would not have needed to look beyond Bethel's petition to consider the issue of attorney immunity. We overrule the first issue.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
In her second issue, Bethel argues appellees cannot establish attorney immunity solely from the facts alleged on the face of her petition. She contends Texas law does not shield an attorney from the consequence of "illegal conduct." More specifically, she acknowledges that appellees' investigation of the trailer brakes would ordinarily fall within an attorney's role in representing his client, but appellees' actions "went far beyond obtaining, retaining, reviewing, or analyzing evidence." She argues appellees conducted <a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p311" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">311</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p311" id="p311" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*311</a> destructive testing they knew was reasonably certain to cause this result and proceeded even though they knew they had no consent from her and destroyed property owned by her. She equates appellees' actions with conduct that is clearly "foreign to the duties of an attorney," such as assaulting opposing counsel in trial. We cannot agree.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
We begin with the Supreme Court's decision in <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger, LLP v. Byrd,</i> 467 S.W.3d 477 (Tex. 2015),</a> which controls our analysis of attorney immunity. <i>See </i><a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin v. Hines,</i> 546 S.W.3d 675, 681-82 (Tex. 2018)</a>. In <i>Cantey Hanger,</i> the Texas Supreme Court explained the attorney immunity defense is intended to ensure "loyal, faithful, and aggressive representation by attorney's employed as advocates." <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 481</a> (quoting <a href="https://scholar.google.co.uk/scholar_case?case=8889590492991702829&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Mitchell v. Chapman,</i> 10 S.W.3d 810, 812 (Tex. App.-Dallas 2000, pet. denied)</a>). An attorney is immune from liability to non-clients for conduct within the scope of his representation of his clients. <a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin,</i> 546 S.W.3d at 681-82</a>; <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 481</a>. In other words, an attorney may be liable to non-clients only for conduct outside the scope of his representation of his client or for conduct foreign to the duties of a lawyer. <a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin,</i> 546 S.W.3d at 681-82</a>; <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 482</a>.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
In determining the immunity issue, the inquiry focuses on the <i>kind</i> of conduct at issue rather than the <i>alleged wrongfulness</i> of said conduct. <a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin,</i> 546 S.W.3d at 681-82</a>; <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 482</a>. Even conduct that is "wrongful in the context of the underlying suit" is not actionable if it is "part of the discharge of the lawyer's duties in representing his or her client." <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 481</a>. Thus, a plaintiff's characterization of a firm's conduct as fraudulent or otherwise wrong is immaterial to our evaluation of the immunity defense. <a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin,</i> 546 S.W.3d at 681-82</a>; If an attorney proves his conduct is "part of the discharge of the duties to his client," immunity applies. <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 484</a>; <a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=14458243639878563354&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Highland Capital,</i> 2016 WL 164528, at *3</a>.</div>
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At the same time, attorneys "are not protected from liability to non-clients for their actions when they do not qualify as `the kind of conduct in which an attorney engages when discharging his duties to his client.'" <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 482</a> (quoting <a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=13552813762696222508&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Dixon Fin. Servs. v. Greenberg, Peden, Siegmyer & Oshman, P.C.,</i> No. 01-06-00696-CV, 2008 WL 746548, at *9 (Tex. App.-Houston [1st] Mar. 20, 2008, pet. denied)</a>) (mem. op. on reh'g). Examples of attorney conduct that would not be protected include participating in a fraudulent business scheme with a client, knowingly assisting a client with a fraudulent transfer to avoid paying a judgment, theft of goods or services on a client's behalf, and assaulting opposing counsel during trial. <a href="https://scholar.google.co.uk/scholar_case?case=14047434646076236026&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Youngkin,</i> 546 S.W.3d at 682-83</a>; <a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 482-83</a>.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Here, Bethel's third amended petition alleged appellees permitted or conducted the destruction of key components of the trailer's brakes by permitting, directing, or taking the following action or inaction:</div>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
a. Disassembly of the brakes, which was destructive in nature and by itself. Essentially everything about the brakes has changed because of the inspection.</blockquote>
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b. Failed to establish any testing/inspection protocol at the time of the disassembly.</blockquote>
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c. Failed to video document the brake disassembly being done, despite the fact that video cameras were present (videos of the brake operation were done by [engineer] Kelly Adamson).</blockquote>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
<a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p312" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">312</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p312" id="p312" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*312</a> d. Manipulation of the adjuster screw for each brake to facilitate drum removal. The original condition and position of the adjuster screws now cannot be known.</blockquote>
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Bethel alleged appellees (1) failed to notify her or her counsel of their intent to do a destructive examination and did not have an agreed-upon protocol; (2) intended to cause the disassembly and destruction of the brakes; and (3) altered or destroyed the trailer brakes with the intent to "impair the verity, legibility, or availability" of the trailer brakes as evidence in the pending action against the manufacturer. Bethel asserted that because she was not given notice of the inspection, she did not have an agent present.</div>
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Bethel's allegations focus on <i>how</i> the inspection was conducted and contend appellees' actions were criminal. She asserts that "intentionally destroying property belonging to another and willfully concealing from Texas courts evidence crucial to resolving claims" fall outside the immunity doctrine. But merely labeling an attorney's conduct wrongful does not and should not remove it from the scope of representation or render it `foreign to the duties of a lawyer. <i>Id.</i> As the court said in <i>Cantey Hanger,</i> other mechanisms are in place to discourage and remedy such conduct, such as sanctions, contempt, and attorney disciplinary proceedings. <i>Id.</i> at 482.</div>
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Focusing on the type of conduct alleged here — and not the nature of the conduct — we conclude these alleged acts do not constitute conduct "foreign to the duties of an attorney" in representing a client. The complained-of actions involve the investigation of the trailer brakes, and more specifically the scheduling of the inspection, the planning of and participation in the expert inspection, and the testing and examination of those brakes, in a wrongful death action. These are the types of action taken to facilitate the rendition of legal services to a client in such a case. This case simply does not rise to the level of those examples of misconduct cited in <i>Cantey Hanger</i> that fall outside the immunity doctrine. <i>See </i><a href="https://scholar.google.co.uk/scholar_case?case=1009893182482264036&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cantey Hanger,</i> 467 S.W.3d at 482</a>.</div>
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We find support for our conclusion in this Court's previous opinion in <i>Highland Capital.</i> There, the plaintiff also argued the law firm's actions were criminal. Highland sued opposing counsel alleging the client-employee stole documents containing confidential and privileged information and the law firm then tried to "extort Highland" through a "series of criminal acts" with respect to the documents. <a class="gsl_co_link" href="https://scholar.google.co.uk/scholar_case?about=14458243639878563354&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Highland Capital,</i> 2016 WL 164528, at *1</a>. Highland alleged the law firm reviewed, copied, and analyzed information it knew to be stolen and proprietary in furtherance of its scheme to extort, slander, and disparage Highland; threatened to disclose the information and disparage Highland if a monetary sum was not paid; refused to return or stop using the information after receiving written notice of the nature of the stolen materials; lied to Highland's counsel about the scope of the theft and stolen material in the firm's possession; and knowingly and actively facilitated the employee's wrongful disclosure of the information and then lied to Highland and the court regarding the extent to counsel's involvement. <i>Id.</i> Highland characterized the law firm's actions as "criminal, tortious, and malicious." <i>Id.</i> at *6.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
This Court, however, looked at the actions taken by the law firm — acquiring documents from a client that were the subject of litigation against the client; reviewing, copying, retaining and analyzing the documents; making demands on the client's behalf; advising a client on a course of action; and threatening to disclose the documents if demands were not met — and <a class="gsl_pagenum" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p313" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">313</a><a class="gsl_pagenum2" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#p313" id="p313" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*313</a> concluded they were the "kinds of actions" that were part of an attorney's duties in representing a client in "hard-fought litigation." <i>Id.</i></div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
As in <i>Highland</i> Capital, we conclude the type of conduct alleged by Bethel falls within the scope of appellees' representation of the manufacturer of the trailer. Accepting Bethel's factual allegations as true, appellees' conduct "involves acts or omissions undertaken as part of the discharge of the attorney's duties as counsel to an opposing party." <i>See id.</i> We therefore conclude the trial court did not err by granting appellees' rule 91a motion to dismiss Bethel's claims. We overrule the second issue.</div>
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We affirm the trial court's order.</div>
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<span style="font-size: x-small;"><small style="background-color: white; color: #222222; font-family: Arial, sans-serif;"></small></span><br />
<div style="position: relative;">
<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.co.uk/scholar_case?case=11587519075298447093&q=05-17-00850-CV&hl=en&as_sdt=4,44#r[1]" name="[1]" style="color: #660099; text-decoration: underline;">[1]</a> Courts may not consider <i>issues</i> that were not raised in the courts below, but parties are free to construct new <i>arguments</i> in support of issues properly before the court. <a href="https://scholar.google.co.uk/scholar_case?case=5725824499964033386&q=05-17-00850-CV&hl=en&as_sdt=4,44" style="color: #660099; text-decoration: underline;"><i>Miller v. JSC Lake Highlands Ops., LP,</i> 536 S.W.3d 510, 513 n.5 (Tex. 2017)</a>. Thus, to the extent Bethel's assertion is an <i>argument</i> as opposed to an <i>issue,</i> we address it.</span></div>
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<b><span style="color: #3d85c6;">LEGAL CITATION FOR DALLAS COURT OF APPEALS ATTORNEY IMMUNITY RULING:</span></b> <i style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">Bethel v. Quilling, Selander, Lownds, Winslett & Moser P.C.,</i><span style="background-color: white; color: #222222; font-family: "arial" , sans-serif; font-size: 15px;"> No. 05-17-00850-CV, 2018 WL 2434410 (Tex. App.-Dallas May 30, 2018, pet. granted) (mem. op.)</span><br />
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<span style="background-color: white; color: #3d85c6; font-family: "arial" , sans-serif; font-size: 15px;"><b>RELATED LEGAL ETHICS ARTICLE: </b></span></div>
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<span style="background-color: white; color: #505050; font-family: "nexussanswebpro"; font-size: 16px;">Steinberg, Marc I. and Weissler, Logan, The Litigation Privilege as a Shelter for Miscreant Legal Counsel (2018). Oregon Law Review, Vol. 97, No. 1, 2018; SMU Dedman School of Law Legal Studies Research Paper No. 390. Available at SSRN: </span><a href="https://ssrn.com/abstract=3194765" style="background-color: white; box-sizing: border-box; color: #505050; font-family: NexusSansWebPro; font-size: 16px;" target="_blank">https://ssrn.com/abstract=3194765</a><br />
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-69259151723825384342020-02-08T11:58:00.001-06:002020-02-08T12:31:56.851-06:00SCOTX issues opinion on enforceability of liquidated damages clause in service contract <div style="text-align: center;">
Atrium Med. Ctr., LP v. Houston Red C LLC, No. <a href="http://search.txcourts.gov/Case.aspx?cn=18-0228&coa=cossup" target="_blank">18-0228</a> (Tex. Feb. 2, 2020)<br />
(Opinion by Justice Jane Nenninger Bland)</div>
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<a href="https://1.bp.blogspot.com/-6a3SViK4Nk0/Xj71ygOdcYI/AAAAAAAAQsQ/LVh8SQDQjXYgiI032bql8F-VgiQC745LACNcBGAsYHQ/s1600/Tex%2B2019-02-07%2BAtrium%2BMedical%2BCenter%2BLP%2Bv%2BHouston%2BRed%2BC%2BLLC%2B18-0228%2Bby%2BBland%2B%2528enforceability%2Bof%2Bliquidated%2Bdamages%2Bclause%2529%2B%2528snip%2Bof%2BPage%2B1%2529.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="Atrium Medical Center, LP v. Houston Red C LLC, No. 18-0228 (Tex. 2020) " border="0" data-original-height="769" data-original-width="628" height="400" src="https://1.bp.blogspot.com/-6a3SViK4Nk0/Xj71ygOdcYI/AAAAAAAAQsQ/LVh8SQDQjXYgiI032bql8F-VgiQC745LACNcBGAsYHQ/s400/Tex%2B2019-02-07%2BAtrium%2BMedical%2BCenter%2BLP%2Bv%2BHouston%2BRed%2BC%2BLLC%2B18-0228%2Bby%2BBland%2B%2528enforceability%2Bof%2Bliquidated%2Bdamages%2Bclause%2529%2B%2528snip%2Bof%2BPage%2B1%2529.PNG" title="Atrium Med. Ctr., LP v. Houston Red C LLC, No. 18-0228 (Tex. 2020) " width="326" /></a></div>
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IN THE SUPREME COURT OF TEXAS</div>
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No. 18-0228</div>
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ATRIUM MEDICAL CENTER, LP AND TEXAS HEALTHCARE ALLIANCE LLC ,</div>
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PETITIONERS,</div>
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v.</div>
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HOUSTON RED C LLC D/B/A IMAGEFIRST HEALTHCARE LAUNDRY SPECIALISTS,</div>
<div style="text-align: center;">
RESPONDENT</div>
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ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS</div>
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Argued November 5, 2019</div>
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JUSTICE BLAND delivered the opinion of the Court.<br />
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In this contract dispute, we determine whether a liquidated damages provision is<br />
enforceable. The breaching party seeks to avoid the provision on the ground that it is a penalty.<br />
The trial court enforced the provision, ruling that it was not a penalty because it reasonably<br />
estimated the harm that would result from a breach, and actual damages were difficult to predict<br />
when the contract was made.1 On those grounds, the court of appeals affirmed..<br />
<br />
Because a provision not designed to be a penalty can nevertheless operate as one, our<br />
precedent requires a third step: courts must examine whether, at the time of the breach, an<br />
unbridgeable discrepancy exists between actual and liquidated damages.3 Because the breaching<br />
party in this case did not prove an “unbridgeable discrepancy” or otherwise demonstrate that the<br />
provision operated as a penalty, we affirm the judgment of the court of appeals.<br />
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* * *</div>
We hold that, at the time the parties’ agreement was made, (1) the harm that would result<br />
from a breach was difficult to estimate and (2) the liquidated damages provision reasonably<br />
forecast just compensation. We further hold that the breaching party failed to demonstrate an<br />
“unbridgeable discrepancy” between liquidated and actual damages, measured at the time of the<br />
breach, to invalidate an otherwise valid contract provision. Accordingly, we affirm the judgment<br />
of the court of appeals.<br />
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<a href="https://1.bp.blogspot.com/-Go5aa3LGaZs/Xj3HWvyOC1I/AAAAAAAAQr4/wPHWq_860aMMhBzTFw7If-H7p7zeZYovwCNcBGAsYHQ/s1600/Tex%2B2019-02-07%2BAtrium%2BMedical%2BCenter%2BLP%2Bv%2BHouston%2BRed%2BC%2BLLC%2B18-0228%2B-%2BSCOTX%2BRELEASE.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="597" data-original-width="1081" height="220" src="https://1.bp.blogspot.com/-Go5aa3LGaZs/Xj3HWvyOC1I/AAAAAAAAQr4/wPHWq_860aMMhBzTFw7If-H7p7zeZYovwCNcBGAsYHQ/s400/Tex%2B2019-02-07%2BAtrium%2BMedical%2BCenter%2BLP%2Bv%2BHouston%2BRed%2BC%2BLLC%2B18-0228%2B-%2BSCOTX%2BRELEASE.PNG" width="400" /></a></div>
<br />
Tex. 2019-02-07 Opinion Release: <a href="http://search.txcourts.gov/Case.aspx?cn=18-0228&coa=cossup" target="_blank">Atrium Medical Center LP v. Houston Red C LLC</a>, Regular Cause No. 18-0228 by Bland (enforceability of liquidated damages clause) (14 pages 43 footnotes)<br />
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<b><span style="color: blue; font-size: large;">OPINION OF THE HOUSTON COURT OF APPEALS BELOW</span></b></div>
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<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<b>546 S.W.3d 305 (2017)</b></center>
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<h3 id="gsl_case_name" style="border: 0px; margin: 1em 0px; padding: 0px;">
ATRIUM MEDICAL CENTER, LP, and Texas Healthcare Alliance, LLC, Appellants<br />v.<br />HOUSTON RED C LLC d/b/a ImageFirst Healthcare Laundry Specialists, Appellee.</h3>
</center>
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<a href="https://scholar.google.com/scholar?scidkt=9881435999999174203&as_sdt=2&hl=en" style="color: #660099;">No. 14-16-00277-CV.</a></center>
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<b>Court of Appeals of Texas, Houston (14th Dist.).</b></div>
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Majority Opinion and Concurring Opinions filed December 21, 2017.</center>
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Rehearing Denied January 30, 2018.</center>
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On Appeal from the 190th District Court, Harris County, Texas, Trial Court Cause No. 2013-04227A.</div>
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Affirmed in part and Reversed and Remanded in part.</div>
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Hiren Patel, HOUSTON, TX, for Appellants.</div>
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H. Ronald Welsh, Meghan Flanery, Jared Gregory LeBlanc, HOUSTON, TX, for Appellee.</div>
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Panel consists of Chief Justice Frost, Justice Donovan, and Justice Wise</div>
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<a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p309" style="color: #aaaaaa; font-size: 13px; font-weight: normal; left: -55px; position: absolute; text-decoration-line: none;">309</a> OPINION</h2>
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John Donovan, Justice.</div>
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Appellants Atrium Medical Center, L.P., and Texas Healthcare Alliance, LLC, appeal a judgment in favor of appellee Houston Red C LLC d/b/a ImageFirst Healthcare Laundry Specialists, finding that appellants breached a laundry service agreement and are jointly and severally liable for damages, costs, interest and attorney's fees. Following a bench trial, the trial court entered amended findings of fact and conclusions of law supporting the judgment for appellee. In four issues on appeal, appellants assert the trial court erred in finding breach of contract, enforcing a liquidated damages clause, applying prejudgment interest, and granting an unsegregated, contested attorney's fee application. We affirm in part and reverse and remand in part.</div>
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I. Background</h2>
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Atrium owns and operates a sixty-bed, long-term acute care hospital in Stafford, Texas. THA is the general partner, part owner, and day-to-day manager of Atrium. ImageFirst is a rental and laundry service company.</div>
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In November 2012, Atrium and appellee executed a five-year (260 week) laundry services agreement. The contract provides, in relevant part, the following:</div>
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The length of this agreement is for sixty (60) months from the date of the first delivery and therefore for the same time period unless cancelled by either party, in writing, at least ninety (90) days prior to any termination date. The terms of this contract shall apply to all subsequent increases or additions to such service. There will be a minimum weekly billing of 60% of this agreement value or 60% of the current invoice amount, whichever is greater. Customer may discontinue service at any time provided customer pay Company a cancellation charge of 40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under this agreement. The customer agrees that this cancellation charge is not punitive, but a reimbursement to Company for related investments to service the customer. Customer agrees to pay attorneys fees and cost necessary to collect monies due. The price in effect may be changed annually. A finance charge of 1½% per month, which is equal to 18% per year will be added to all balances not paid within terms of Net 10 EOM. If credit terms are allowed, customer agrees to pay balance due to Company within ten (10) days after the end of the month that said invoices are dated.</blockquote>
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In 2013, Atrium was in financial crisis, stemming from an alleged abuse of power, fraud, and embezzlement by Sohail Siddiqui, M.D., the former manager of THA. In April 2013, Atrium failed to pay appellee's invoices. Appellee continued to deliver linens without payment for several months.</div>
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Atrium's new chief executive officer, Ahmad Zaid, testified that he tried to work out a payment plan with appellee to ensure no interruption in the delivery of linens to the hospital; however, appellee responded that it would no longer deliver linens without a payment towards Atrium's past due balance. Appellee continued to deliver linens uninterrupted.</div>
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On or about September 11, 2013, Zaid allegedly verbally informed appellee that it would no longer use appellee's linens or services, exercising the cancellation provision of the contract. The last day appellee delivered linens to Atrium was on September 2, 2013. Appellee's last invoice to Atrium was on September 6, 2013, for <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p310" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">310</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p310" id="p310" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*310</a> $8,066.79. At the time Atrium's CEO verbally cancelled the contract, 9 months/38-weeks had elapsed under the 60-month/ 260 week contract, and Atrium had not paid $165,587.33 of the total charges invoiced by appellee.</div>
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In November 2013, appellee filed a petition in intervention in appellants' pending lawsuit against Siddiqui in the 190th Judicial District Court of Harris County. In its second amended petition in intervention, appellee asserted claims against appellants, Siddiqui, and several other individual owners<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> for breach of contract, quantum meruit, conversion, suit on sworn account, unjust enrichment, and money had and received. Appellee claimed more than $1 million dollars in damages. After nonsuiting the individual defendants, a bench trial between Atrium, THA, and ImageFirst was held in February 2016.</div>
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In March 2016, the trial court awarded a final judgment in favor of appellee on its breach of contract claim, finding Atrium and THA were jointly and severally liable for breach of contract and damages. The court determined that appellee was entitled to damages under the terms of the contract, including the liquidated damages provision which the trial court found was not a penalty. The trial court found appellee suffered actual damages "for those amounts due and owing as of September 2013 and for damages calculated under the liquidated damages provision." The trial court awarded the following damages:</div>
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• Actual damages: $881,918.28</blockquote>
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• Contractual pre-judgment interest: $375,021.20</blockquote>
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• Attorney's fees (trial): $110,000.00</blockquote>
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• Attorney's fees (appellate): $70,000.00</blockquote>
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Total: $1,436,939.48</blockquote>
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The trial court further found that appellee was entitled to recover from appellants post-judgment interest accruing at 5% simple interest and all costs of court.</div>
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On June 3, 2016, the trial court entered amended findings of fact and conclusions of law in support of the judgment.</div>
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II. ISSUES AND STANDARDS OF REVIEW</h2>
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A. Issues</h2>
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Appellants challenge the trial court's judgment, claiming in their first issue that the record does not contain legally or factually sufficient evidence to support a finding that appellee should prevail on its breach of contract claim. Alternatively, appellants contend in its second issue, with multiple subparts, that we should reverse and reform the judgment by denying appellee recovery under the contract's liquidated damages clause. In their third issue, appellants maintain that we should reverse and modify the judgment by limiting the contractual prejudgment interest solely to amounts actually invoiced by appellee. Finally, appellants argue in their fourth issue that we should reverse and modify the judgment by reducing the attorney's fees award to account for fees required to be segregated.</div>
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B. Standard or review</h2>
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Because this was a bench trial, the trial judge issued findings of fact and conclusions of law. We review the trial court's conclusions of law de novo. <a href="https://scholar.google.com/scholar_case?case=12163558130232331977&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>BMC Software Belgium, N.V. v. Marchand,</i> 83 S.W.3d 789, 794 (Tex. 2002)</a>; <a href="https://scholar.google.com/scholar_case?case=6462692187384298237&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Johnston v. McKinney,</i> 9 S.W.3d 271, 277 (Tex. App.-Houston [14th Dist.] 1999, pet. denied)</a>. Incorrect conclusions of law will not require a reversal if the controlling facts support a correct legal theory. <i>Id.</i> The <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p311" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">311</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p311" id="p311" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*311</a> findings of fact in a bench trial have the same force and dignity as a jury verdict, and we review them for legal and factual sufficiency of the evidence under the same standards we apply in reviewing a jury's findings. <a href="https://scholar.google.com/scholar_case?case=11935440747397075301&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>West v. Triple B. Servs., LLP,</i> 264 S.W.3d 440, 445 (Tex. App.-Houston [14th Dist.] 2008, no pet.)</a> (citing <a href="https://scholar.google.com/scholar_case?case=1319588470071174146&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ortiz v. Jones,</i> 917 S.W.2d 770, 772 (Tex. 1996)</a>).</div>
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When conducting a legal-sufficiency review, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Keller v. Wilson,</i> 168 S.W.3d 802, 823 (Tex. 2005)</a>. We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable fact-finder could not. <i>See id.</i> at 827. We must determine whether the evidence at trial would enable a reasonable and fair-minded factfinder to find the facts at issue. <i>See id.</i> The factfinder is the only judge of witness credibility and the weight to give to testimony. <i>See id.</i> at 819. Because findings of fact in a bench trial have the same force and dignity as a jury verdict, we review them for legal sufficiency of the evidence under the same standards we apply in reviewing the jury's findings. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5197338863534578686&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Anderson v. City of Seven Points,</i> 806 S.W.2d 791, 794 (Tex. 1991)</a>.</div>
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When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding. <a href="https://scholar.google.com/scholar_case?case=16210486533734595971&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cain v. Bain,</i> 709 S.W.2d 175, 176 (Tex. 1986)</a>. After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. <a href="https://scholar.google.com/scholar_case?case=1211819715591756757&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Pool v. Ford Motor Co.,</i> 715 S.W.2d 629, 635 (Tex. 1986)</a>. The trier of fact is the sole judge of the credibility of the witnesses and the weight to be given to their testimony. <a href="https://scholar.google.com/scholar_case?case=4716815949105353460&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>GTE Mobilnet of S. Tex. v. Pascouet,</i> 61 S.W.3d 599, 615-16 (Tex. App.-Houston [14th Dist.] 2001, pet. denied)</a>. We may not substitute our own judgment for that of the trier of fact, even if we would reach a different answer on the evidence. <a href="https://scholar.google.com/scholar_case?case=14759506139688711623&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Maritime Overseas Corp. v. Ellis,</i> 971 S.W.2d 402, 407 (Tex. 1998)</a>. The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment. <a href="https://scholar.google.com/scholar_case?case=4716815949105353460&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Pascouet,</i> 61 S.W.3d at 616</a>.</div>
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III. ANALYSIS</h2>
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A. Breach of Contract</h2>
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In issue one, appellants request we reverse and render a take-nothing judgment, arguing that appellee breached the service agreement before Atrium by overcharging Atrium for the quantities of linens delivered from February 2013, and thereafter. Appellants argue that Atrium did not start falling behind on its payments until April 2013. Appellants contend that appellee's breaches occurred first and were material, and thus, Atrium was discharged of its obligations to further perform under the contract. According to appellants, appellee cannot prevail for breach of contract as a matter of law.</div>
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To prevail on a breach of contract claim, a party must establish the following elements: (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. <a href="https://scholar.google.com/scholar_case?case=11935440747397075301&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>West v. Triple B Servs., LLP,</i> 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist.] 2008, no pet.)</a> A breach occurs when a party fails or refuses to do something he has promised to do. <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=10114343332994797634&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Townewest Homeowners Ass'n, Inc. v. Warner Commc'n Inc.,</i> </a><a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p312" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">312</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p312" id="p312" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*312</a><a href="https://scholar.google.com/scholar_case?case=10114343332994797634&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"> 826 S.W.2d 638, 640 (Tex. App.-Houston [14th Dist.] 1992, no writ)</a>). When one party to a contract commits a material breach of that contract, the other party is excused from further performance under the contract. <i>See id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=7292241199417161701&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hernandez v. Gulf Group Lloyds,</i> 875 S.W.2d 691, 692 (Tex. 1994)</a>).</div>
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The trial court did not err in finding that appellants are liable for breach of contract. In amended findings of fact and conclusions of law, the trial court found appellee had established a valid contract; that "ImageFirst fully performed its obligations under the Contract;" that verbal and premature cancellation was "a material breach of contract," and that appellee sustained damages as a result of Atrium's breach. The evidence of record supports the trial court's findings. The trial testimony revealed that both parties performed initially as contemplated by the contract—appellee picked-up and delivered linens to Atrium three times a week, providing Atrium with 120% of the inventory they requested, and only billing Atrium for 100%. Due to growing needs by Atrium, however, Atrium required a more frequent delivery and pick-up schedule, <i>e.g.,</i> every other day. Eventually, Atrium required appellee to pick-up and delivery every single day. Due to the increased schedule, the parties, by agreement, eliminated the "free" 20% of linen. Atrium accepted the increased services and paid invoices that included the adjusted fee through mid-April 2013. Appellants did not plead as an affirmative defense "prior material breach," and the trial court denied appellants' post-trial motion for leave to file an amended answer. Under these circumstances, appellants contention that appellee did not perform under the contract has no merit. The evidence of record is sufficient to support the trial court's findings; thus, appellants' first issue is overruled.</div>
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B. Liquidated Damages</h2>
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In their second issue, appellants argue, alternatively, appellee should not recover for liquidated damages.</div>
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1. Appellants' material breach triggered liquidated damages clause</h2>
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Appellants assert the record does not contain legally or factually sufficient evidence to support the liquidated damages clause was triggered. Further, appellants contend that appellee's repudiation of the contract bars enforcement of the liquidated damages clause.</div>
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In its findings of fact and conclusions of law, the trial court found that <i>after</i> Atrium already owed appellee over $165,587.33, appellants materially breached and triggered the liquidated damages clause as follows:</div>
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33. By failing to pay ImageFirst for the laundry services that ImageFirst provided from April 2013 through September 2013, Atrium committed a material breach of the Contract.</blockquote>
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34. By verbally and prematurely canceling the Contract without any written notice as the Contract requires, Atrium committed a material breach of the Contract, entitling ImageFirst to the amounts provided in the Liquidated Damages Clause.</blockquote>
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38. As a result of Atrium's breach of canceling the Contract with 51-months/ 222-weeks remaining under the Contract, ImageFirst is entitled to recover under the Contract's Liquidated Damages Provision. ImageFirst's last invoice of $8,066.79 to Atrium is greater than the original Contract amount of $2,616.66. Therefore, ImageFirst is entitled to recover 40% of the last invoice, multiplied by the 222-weeks remaining under the Contract, totaling $716,330.95.</blockquote>
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<a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p313" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">313</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p313" id="p313" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*313</a> As set forth above, <i>supra</i> at III.A., the trial court determined appellee "fully performed its obligations under the Contract."</div>
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The trial court further found that appellee "did not repudiate the Contract." The evidence demonstrated that Atrium stopped making payments to appellee in mid-April 2013; nevertheless, appellee continued services to Atrium until September 2013, when Atrium's CEO verbally terminated the contract. As such, the trial court's finding that appellee was entitled to amounts provided in the liquidated damages clause is supported by sufficient evidence.</div>
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2. Liquidated damages provision provides reasonable forecast of appellee's expectation damages</h2>
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Appellants maintain that even if the liquidated damages clause is triggered it should be governed by the parties' agreement to establish reliance damages, claiming the liquidated damages clause serves as a reimbursement to appellee for related investments to service Atrium. Appellants also claim the reasonableness of the liquidated damages clause should be evaluated by comparison to appellee's reliance damages.</div>
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In its findings of fact and conclusions of law, the trial court made findings regarding damages as follows:</div>
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6. At the time the parties entered into the Contract, the damages ImageFirst would suffer if Atrium breached the Contract were incapable or difficult of estimation at the time the parties signed the Contract because:</blockquote>
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a. The parties knew that the volume of the laundry services would fluctuate over time as the census changed and given the needs of the individual patients;</blockquote>
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b. The parties could not predict how long linens would last, so ImageFirst's costs could not be determined;</blockquote>
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c. The parties could not determine the frequency of deliveries that would be required to service Atrium's account, so ImageFirst's costs could not be determined;</blockquote>
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d. The parties could not determine Atrium's rate of loss of ImageFirst's linens, so ImageFirst's costs could not be determined;</blockquote>
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e. The parties could not determine the amount ImageFirst's general overhead expenses and resources would be expended to service Atrium's account, so ImageFirst's costs could not be determined.</blockquote>
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7. Because ImageFirst's damages in the event of Atrium's breach could not be calculated or estimated at the time the Contract was signed, the Contract provided that if Atrium prematurely canceled the Contract, Atrium would pay ImageFirst "40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under the agreement" (the "Liquidated Damages Provision").</blockquote>
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8. ImageFirst arrived at the 40% number in the Liquidated Damages Provision because it was a conservative historical estimate of the net profits, and a reasonable rate of return on the infrastructure investments, over the life of laundry service agreements similar to the Contract.</blockquote>
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9. Considering the average revenue ImageFirst receives for the weekly rental of its linens during the linens' lifespan, the average customer's rate of loss and ImageFirst's overhead expenses throughout the performance of a contract like the Contract with Atrium, "40% of the agreement values of the <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p314" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">314</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p314" id="p314" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*314</a> current invoice amount, whichever is greater" is a reasonable forecast of ImageFirst's just compensation under the Contract.</blockquote>
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10. The Liquidated Damages Provision is a reasonable forecast of ImageFirst's just compensation over the life of the Contract even though the Liquidated Damages Provision's damages calculation is based only on the most recent one-week invoice as of the date of cancellation instead of being based on an average of all weekly invoices under the Contract through the date of cancellation or even a larger sample size of invoices issued under the Contract.</blockquote>
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11. At the time the parties entered into the Contract, ImageFirst had access to damages data and information compiled by ImageFirst's franchisor based on information gathered by all franchisees over an extended period of time. But access to this data and information was not sufficient as of the effective date of the Contract to estimate ImageFirst's damages in the event of breach.</blockquote>
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The evidence of record demonstrated that the 40% cancellation charge was a reasonable estimate of appellee's lost profits over the life of the contract. Appellants' interpretation of the cancellation charge, contemplating only reimbursement for appellee's investments, is an attempt to change the cancellation charge into a limitation of liability provision. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2456095293103390799&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur's Garage, Inc. v. Racal-Chubb Sec. Sys., Inc.,</i> 997 S.W.2d 803, 810 (Tex. App.-Dallas 1999, no pet.)</a> ("a contractual provision setting an upper limit to the amount recoverable is considered a limitation of liability provision."). Here, the trial court correctly rejected this contention as the cancellation charge has no upper limit and is specifically tied to the 40% of the last invoice over the remaining term.</div>
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3. Cancellation charge is enforceable and calls for just compensation</h2>
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Moreover, appellants contend that even if the parties had agreed to estimate expectation damages, the liquidated damages clause is unenforceable because its formula does not offer a reasonable forecast. Appellants argue that appellee's expectation damages were not incapable or difficult to estimate. Appellants also assert that enforcing the liquidated damages clause would act as an unenforceable penalty.</div>
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In <i>FPL Energy, LLC v. TXU Portfolio Mgmt. Co., LP,</i> the Texas Supreme Court discussed the enforceability of liquidated damages:</div>
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The basic principle underlying contract damages is compensation for losses sustained and no more; thus, we will not enforce punitive contractual damages provisions. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2774801440795833715&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Stewart v. Basey,</i> 150 Tex. 666, 245 S.W.2d 484, 486 (1952)</a>. In <i>Phillips v. Phillips,</i> we acknowledged this principle and restated the two indispensable findings a court must make to enforce contractual damages provisions: (1) "the harm caused by the breach is incapable or difficult of estimation," and (2) "the amount of liquidated damages called for is a reasonable forecast of just compensation." 820 S.W.2d 785, 788 (Tex. 1991) (citing <a href="https://scholar.google.com/scholar_case?case=12638507779276861814&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Rio Grande Valley Sugar Growers, Inc. v. Campesi,</i> 592 S.W.2d 340, 342 n. 2 (Tex. 1979)</a>). We evaluate both prongs of this test from the perspective of the parties at the time of contracting.</blockquote>
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426 S.W.3d 59, 69-70 (Tex. 2014). "While the question may require a court to resolve certain factual issues first, ultimately the enforceability of a liquidated damages provision presents a question of law for the court to decide." <i>Id.,</i> at 70. The party asserting that a liquidated-damages clause is a penalty provision bears the burden of <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p315" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">315</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p315" id="p315" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*315</a> pleading and proof. <a href="https://scholar.google.com/scholar_case?case=5018413437083607195&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garden Ridge, LP v. Advance Intern., Inc.,</i> 403 S.W.3d 432, 437-38 (Tex. App.-Houston [14th Dist.] 2013, pet. denied)</a> (citing <i>Phillips,</i> 820 S.W.2d at 789; Tex. R. Civ. P. 94).</div>
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In this case, the trial court analyzed both <i>Phillips</i> prongs, finding difficulty in estimating damages and the reasonableness of damage forecast. <i>See </i><a href="https://scholar.google.com/scholar_case?case=11762762278812344165&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Phillips v. Phillips,</i> 820 S.W.2d 785, 788 (Tex. 1991)</a>. In its findings of fact and conclusions of law, the trial court observed that at the time the parties entered into the contract, the damages appellee would suffer if Atrium breached the contract were incapable or difficult of estimation because: (a) the parties knew the volume of laundry services would fluctuate over time as the census changed and given the needs of individual patients; (b) the parties could not predict how long linens would last; (c) the parties could not determine the frequency of deliveries that would be required to service Atrium's account; (d) the parties could not determine Atrium's rate of loss of appellee's linens; and (e) the parties could not determine the amount of appellee's general overhead expenses and resources that would be expended to service Atrium's account. Thus, the trial court correctly found appellee's costs could not be determined.</div>
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Additionally, the trial court found that because appellee's damages could not be calculated at the time the contract was signed, the contract provided that if Atrium prematurely canceled the contract, Atrium would pay appellee "40% of the agreement value or the current invoice amount, whichever is greater, multiplied by the number of weeks remaining under the agreement." As set forth in the trial court's findings of fact and conclusions of law, appellee derived 40% because it was a conservative historical estimate of the net profits, and a reasonable rate of return on infrastructure investments, over the life of laundry service agreements similar to the contract.</div>
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The trial court further found that appellee arrived at the 40% number because it was a conservative historical estimate of the net profits, and a reasonable rate of return on the infrastructure investments, over the life of laundry service agreements similar to the contract between Atrium and appellee. On this basis, the trial court found that the provision is a reasonable forecast of appellee's just compensation over the life of the contract even though the provision's damages calculation is based only on the most recent one-week invoice as of the date of cancellation instead of being based on an average of all weekly invoices under the contract through the date of cancellation or even a larger sample size invoices issued under the contract.</div>
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In its conclusions of law, the trial court determined: the contract is valid and enforceable; the contract is not illusory; and based on the clear and unambiguous language of the contract, the parties' intent at the time of formation was for the liquidated damages provision to serve as a reasonable forecast of appellee's expectation damages in the event of breach, not as a reasonable forecast of appellee's reliance damages in the event of breach. It further determined that the liquidated damages provision was not a penalty. The liquidated damages provision is enforceable because at the time the contract was signed, damages resulting from material breach were very difficult, if not impossible to determine, and the amount of damages was a reasonable estimate of the harm that would be incurred. <i>See </i><a href="https://scholar.google.com/scholar_case?case=13424518934484116488&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Murphy v. Cintas Corp.,</i> 923 S.W.2d 663, 666 (Tex. App.-Tyler 1996, writ denied)</a> (upholding liquidated damages provision for 50% of the weekly fees for the remainder of the 60-month <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p316" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">316</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p316" id="p316" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*316</a> term, noting "[t]o forecast the actual damages to Cintas as a result of Murphy's termination of the contract sixty months in advance would be fraught with uncertainty."); <a href="https://scholar.google.com/scholar_case?case=8255348439928988599&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Oetting v. Flake Uniform & Linen Serv., Inc.,</i> 553 S.W.2d 793, 797-98 (Tex. Civ. App.-Fort Worth 1977, no writ)</a> (focusing on anticipated profit margin, court held that 85% cancellation charge reasonable). Here, the evidence of record demonstrated 40% was a reasonable forecast.</div>
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Appellants failed to prove the liquidated damages provision is an unenforceable penalty. <a href="https://scholar.google.com/scholar_case?case=5018413437083607195&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garden Ridge, LP,</i> 403 S.W.3d at 437-38</a>. For the above reasons, appellants' second issue is overruled.</div>
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C. Pre-judgment Interest</h2>
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In their third issue, appellants maintain the court should reverse and modify the judgment by limiting the contractual prejudgment interest solely to amounts actually invoiced by ImageFirst. Appellants maintain that contractual finance charges are limited to "past-due invoices issued by ImageFirst." Thus, appellants argue that appellee is not entitled to recover the finance charge on liquidated damages that were never invoiced.</div>
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In its finding of fact and conclusions of law, the trial court found that pursuant to the contract's finance charge provision, the $716,330.95 appellee is entitled to under the liquidated damages provision has been accruing interest at 1½% per month or 18% per year from October 12, 2013, to February 16, 2016. Contrary to appellants' contention, the contract expressly provides for contractual interest on the cancellation of the contract. "A finance charge of 1½% per month, which is equal to 18% per year will be added to all balances not paid within terms of Net 10 EOM."</div>
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The terms of the contract do not require amounts to be invoiced to become due or to incur the contractual finance charge. Here, the latest date of the termination and cancellation charge became due was September 11, 2013. Under the contract, if the cancellation charge was not paid by October 10, it accrued interest of 1½% per month. As such, the evidence of record is sufficient to support the trial court's findings. Thus, appellants' third issue is overruled.</div>
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D. Attorney's Fees</h2>
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In their fourth issue, appellants assert the court should reverse and modify the judgment by reducing the attorney's fees award to account for fees required to be segregated.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup></div>
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In support of an application for $110,000 in attorney's fees, H. Ronald Welsh, counsel for appellee submitted an affidavit and fourteen pages of Welsh LeBlanc LLP's billing report. In Welsh's affidavit, he maintains that a ten percent (10%) reduction of fees properly and fully segregates the fees incurred for the quantum meruit and conversion causes of action from those fees incurred from breach of contract.</div>
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Atrium opposed the fee application and submitted a controverting attorney's fees declaration by Helen Patel, directly addressing the segregation issue and establishing $11,473.50 should be excluded from recovery because it relates to time entries in pursuit of appellee's claims against individual defendants. Patel criticizes Welsh's "10% reduction of attorney's fees" because it does not take into account the significant <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p317" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">317</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p317" id="p317" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*317</a> amount of time appellee's counsel spent solely on Siddiqui litigation (<i>e.g.,</i> attended depositions of individuals with no knowledge or connection to appellee's claims against appellants and played no part in this lawsuit's trial; reviewed motions and correspondence and attended hearings on issues having no bearing on appellee's claims against appellants; propounded discovery on the individual defendants and conducted follow-up work on that discovery; opposed for a substantial period of time appellants' attempts to sever appellee's claims from the Siddiqui litigation; engaged in correspondence with counsel for the individual defendants; and prepared dismissal document for the individual defendants). Patel's affidavit is unrebutted evidence.</div>
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We review a trial court's award of attorney's fees under an abuse of discretion standard. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6131577391635120575&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ridge Oil Co., Inc. v. Guinn Invs., Inc.,</i> 148 S.W.3d 143, 163 (Tex. 2004)</a>. A party may not recover attorney's fees unless authorized by statute or contract. <a href="https://scholar.google.com/scholar_case?case=3994486142378722337&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Tony Gullo Motors I, L.P. v. Chapa,</i> 212 S.W.3d 299, 310-11 (Tex. 2006)</a>. Texas Civil Practice and Remedies Code section 38.001(8) provides for the recovery of attorney's fees in a suit on a contract. To recover attorney's fees under section 38.001, a party must prevail on the underlying claim and recover damages. <a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Intercontinental Grp. P'ship v. KB Home Lone Star L.P.,</i> 295 S.W.3d 650, 653 (Tex. 2009)</a>. Under section 38.001, the trial court has no discretion to deny attorney's fees when presented with evidence of the same. <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bocquet v. Herring,</i> 972 S.W.2d 19, 20 (Tex. 1998)</a>. Notwithstanding, a party seeking attorney's fees must segregate based on claims and parties. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3994486142378722337&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Chapa,</i> 212 S.W.3d at 313-14</a>. Determinations addressing the need to segregate attorney's fees is a question of law. <a href="https://scholar.google.com/scholar_case?case=2189676187627118407&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>CA Partners v. Spears,</i> 274 S.W.3d 51, 81 (Tex. App.-Houston [14th Dist.] 2008, pet. denied.)</a>.</div>
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Here, appellee prevailed on its breach of contract claim and recovered damages for that claim; thus, appellee is entitled to recover some amount of attorney's fees under Chapter 38. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>KB Home,</i> 295 S.W.3d at 653</a>. The trial court's findings of fact and conclusions of law do not discuss fee segregation. Instead, without any explanation, the trial court awarded the full measure of appellee's attorney's fees, $110,000. This was an error and, as stated in <i>Chapa</i> "an unsegregated damages award require[s] a remand." <a href="https://scholar.google.com/scholar_case?case=3994486142378722337&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;">212 S.W.3d at 314</a>. As such, appellants' fourth issue is sustained.</div>
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IV. CONCLUSION</h2>
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Appellants' issues one, two, and three are overruled. Appellants' issue four is sustained. Thus, the trial court's judgment is affirmed in part, reversed in part, and remanded for reconsideration of attorney's fees.</div>
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(Frost, C.J., concurring).</div>
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CONCURRING OPINION</h2>
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Kem Thompson Frost, Chief Justice</div>
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The majority rejects the appellants' main argument under their first issue based on a conclusion that the parties deleted an obligation in their agreement by means of an oral modification. The better course would be to conclude that the agreement never imposed the obligation in question, so there was no need to modify the agreement.</div>
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No Merit in the Appellants' First Issue</h2>
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In their first issue, appellants Atrium Medical Center, LP and Texas Healthcare Alliance, LLC (collectively the "Atrium Parties") assert that appellee Houston Red C LLC d/b/a ImageFIRST Healthcare <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p318" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">318</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p318" id="p318" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*318</a> Laundry Specialists ("ImageFIRST") cannot recover on its breach-of-contract claim as a matter of law because the undisputed trial evidence shows that before Atrium Medical Center, LP breached its November 2012 agreement with ImageFIRST (the "Agreement"), ImageFIRST breached the Agreement by failing to provide a particular service. The service that the Agreement allegedly required was ImageFIRST's giving Atrium access to 120% of the amount of linens invoiced to Atrium on a weekly basis (the "120% Service"). The Atrium Parties' first issue lacks merit for three reasons.</div>
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<i>1. The Atrium Parties waived the prior-material-breach defense.</i></h2>
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Under their first issue, the Atrium Parties assert that ImageFIRST cannot recover on its breach-of-contract claim as a matter of law because the trial evidence conclusively proves that ImageFIRST materially breached the Agreement before Atrium breached the Agreement. The alleged material breach is the failure to provide the 120% Service starting in February 2013. This contention is an affirmative defense that the Atrium Parties were required to plead.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[3]" name="r[3]" style="color: #660099;">[1]</a></sup> Because the Atrium Parties did not plead it, they waived it unless the parties tried the defense by consent.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[4]" name="r[4]" style="color: #660099;">[2]</a></sup></div>
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On appeal, the Atrium Parties assert that the parties did just that. The majority does not address this argument. If issues not raised by the pleadings are tried by express or implied consent of the parties, these issues shall be treated as if they had been raised by the pleadings.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[5]" name="r[5]" style="color: #660099;">[3]</a></sup> To determine whether the issue was tried by consent, we examine the record not for evidence of the issue, but rather for evidence of trial of the issue.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[6]" name="r[6]" style="color: #660099;">[4]</a></sup> Under this court's precedent, one of the essential elements of ImageFIRST's breach-of-contract claim is that ImageFIRST tendered performance or was excused from doing so.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[7]" name="r[7]" style="color: #660099;">[5]</a></sup> The Atrium Parties cite trial evidence as to ImageFIRST's failure to provide the 120% Service after February 1, 2013, but the Atrium Parties also rely on this evidence to show that, as a matter of law, ImageFIRST did not prove the performance element of its breach-of-contract claim. Because the evidence on which the Atrium Parties rely is germane to issues other than the prior-material-breach defense, this evidence does not show trial of the defense.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[8]" name="r[8]" style="color: #660099;">[6]</a></sup> The record does not contain evidence showing trial of the prior-material-breach defense.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[9]" name="r[9]" style="color: #660099;">[7]</a></sup> This defense was not tried by express or implied consent of the parties.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[10]" name="r[10]" style="color: #660099;">[8]</a></sup> Therefore, the Atrium Parties <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p319" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">319</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p319" id="p319" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*319</a> waived this defense, and they may not obtain a reversal of the trial court's judgment based on this defense.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[11]" name="r[11]" style="color: #660099;">[9]</a></sup></div>
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<i>2. The trial evidence does not conclusively prove that ImageFIRST breached the Agreement by failing to give Atrium the 120% Service.</i></h2>
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The Atrium Parties also argue that the trial evidence proves as a matter of law that ImageFIRST breached the Agreement starting on February 1, 2013, by failing to provide the 120% Service to Atrium. Evidence at trial showed that, starting on February 1, 2013, ImageFIRST made deliveries more frequently than the three deliveries per week that ImageFIRST had been making. Evidence also showed that when ImageFIRST stopped the three-deliveries-per-week schedule, ImageFIRST also stopped providing the 120% Service. The Atrium Parties cite the trial testimony of Ryan Steen, ImageFIRST's President, on this point, and suggest that Steen conceded that ImageFIRST breached the Agreement starting on February 1, 2013. Though Steen may have agreed that ImageFIRST abandoned the three-deliveries-per-week schedule and stopped providing the 120% Service on February 1, 2013, Steen did not give testimony that rises to the level of a judicial admission that ImageFIRST breached the Agreement by engaging in this conduct.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[12]" name="r[12]" style="color: #660099;">[10]</a></sup></div>
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A crucial premise of the Atrium Parties' argument is that the Agreement requires ImageFIRST to provide the 120% Service throughout its term and even if ImageFIRST was making more than three deliveries per week. In the Agreement, Atrium and ImageFIRST agreed that "[t]he terms of this contract shall apply to all subsequent increases or additions to such service." The parties also agreed that "[n]o modification of this agreement will be binding unless in writing and signed by [ImageFIRST]." The record contains no evidence of any written modification of the Agreement. If ImageFIRST agreed to provide the 120% Service throughout the Agreement's term and even if ImageFIRST was making more than three deliveries per week, then it would appear that ImageFIRST was breaching the Agreement starting on February 1, 2013.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[13]" name="r[13]" style="color: #660099;">[11]</a></sup></div>
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The provision of the Agreement that addresses the 120% Service provides as follows: "I further understand the three times per week delivery system with 40% of my total inventory being available for use at each delivery (120% total available weekly) and will be billed for 100% weekly."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[14]" name="r[14]" style="color: #660099;">[12]</a></sup> The "I" appears to refer to Atrium's agent. The Atrium Parties assert that, under this provision, ImageFIRST agreed to provide the 120% Service throughout the Agreement's term and regardless of how many deliveries per week ImageFIRST was making. In this provision, the parties discuss the 120% Service only in the context of the "three times per week delivery system," which was discontinued at Atrium's <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p320" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">320</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p320" id="p320" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*320</a> request on January 31, 2013. In the Agreement, the parties anticipated that there might be "subsequent increases or additions" to ImageFIRST's services under the Agreement. Although the parties agreed to various terms in the first page of the Agreement, the parties did not agree that ImageFIRST would provide the 120% Service regardless of how many deliveries per week ImageFIRST was making. Under the Agreement's unambiguous language, the parties were free to increase the number of deliveries to more than three times per week, and ImageFIRST agreed to provide the 120% Service only when it was making three deliveries per week.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[15]" name="r[15]" style="color: #660099;">[13]</a></sup> Thus, though the trial evidence showed that ImageFIRST stopped providing the 120% Service on February 1, 2013, this evidence did not show that ImageFIRST breached the Agreement. The trial evidence does not prove as a matter of law that ImageFIRST breached the Agreement starting on February 1, 2013, by failing to provide the 120% Service to Atrium.</div>
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<i>3. The trial evidence is legally and factually sufficient to support the trial court's finding that ImageFIRST fully performed its obligations under the Agreement.</i></h2>
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Under this court's precedent, one of the essential elements of ImageFIRST's breach-of-contract claim is that ImageFIRST tendered performance or was excused from doing so.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[16]" name="r[16]" style="color: #660099;">[14]</a></sup> The trial court found that ImageFIRST fully performed its obligations under the Agreement. On appeal the Atrium Parties argue that the trial evidence is legally and factually insufficient to support this finding.</div>
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When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[17]" name="r[17]" style="color: #660099;">[15]</a></sup> We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[18]" name="r[18]" style="color: #660099;">[16]</a></sup> We must determine whether the evidence at trial would enable reasonable and fair-minded people to find the facts at issue.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[19]" name="r[19]" style="color: #660099;">[17]</a></sup> The factfinder is the only judge of witness credibility and the weight to give to testimony.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[20]" name="r[20]" style="color: #660099;">[18]</a></sup></div>
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When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[21]" name="r[21]" style="color: #660099;">[19]</a></sup> After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[22]" name="r[22]" style="color: #660099;">[20]</a></sup> The trier of fact is the sole judge of the credibility of the witnesses and the weight to be given to their testimony.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[23]" name="r[23]" style="color: #660099;">[21]</a></sup> We may not substitute our own judgment for that of the trier of fact, even if we would reach a different <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p321" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">321</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p321" id="p321" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*321</a> answer on the evidence.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[24]" name="r[24]" style="color: #660099;">[22]</a></sup> The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[25]" name="r[25]" style="color: #660099;">[23]</a></sup></div>
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The Atrium Parties base their sufficiency challenges on the evidence showing that ImageFIRST did not provide the 120% Service starting on February 1, 2013. Yet, the evidence shows that beginning on that date, ImageFIRST made more than three deliveries per week, and, in this scenario, the Agreement does not require ImageFIRST to provide the 120% Service. Under the applicable standards of review, the trial evidence is legally and factually sufficient to support the trial court's finding that ImageFIRST fully performed its obligations under the Agreement.</div>
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Flaws in the Majority's Analysis</h2>
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Though the majority concludes that the Atrium Parties' arguments under their first issue lack merit, the majority applies a different analysis. Contrary to the unambiguous language of the Agreement, the majority indicates that the Agreement required ImageFIRST to provide the 120% Service throughout the Agreement's term and even if ImageFIRST was making more than three deliveries per week. The majority concludes that this requirement does not conflict with the trial court's finding that ImageFIRST fully performed its obligations under the Agreement because the parties agreed to modify the Agreement to eliminate this requirement. There is no allegation or evidence of any written modification, so any such modification of the Agreement would have been an oral modification. But, if the Agreement contained such a requirement, then the parties agreed that this requirement "shall apply to all subsequent increases or additions to such service" and that "[n]o modification of this agreement will be binding unless in writing and signed by [ImageFIRST]."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[26]" name="r[26]" style="color: #660099;">[24]</a></sup></div>
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Though ImageFIRST argues on appeal that the parties agreed to such an oral modification, the only evidence that ImageFIRST cites is testimony by Steen that ImageFIRST had to provide the 120% Service under a three-delivery-per-week schedule but that this changed when the parties negotiated a "different delivery schedule." This evidence seems to show an agreement to increase the frequency of the deliveries under the Agreement rather than an oral agreement to modify the Agreement. There does not appear to be legally sufficient evidence to show that the parties agreed to an oral modification of the Agreement. Even if there were evidence showing an oral modification, the parties agreed that oral modifications of the Agreement would not be binding, and under recent Texas precedent, courts generally enforce such agreements.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[27]" name="r[27]" style="color: #660099;">[25]</a></sup> The trial evidence does not raise a fact issue as to any potential exception to the general enforceability of the parties' ban on oral modifications.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#[28]" name="r[28]" style="color: #660099;">[26]</a></sup> So, the better course would <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p322" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">322</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#p322" id="p322" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*322</a> be to reject the Atrium Parties' arguments based on the absence of a contractual obligation to provide the 120% Service under an increased delivery schedule, rather than to rely on an oral-modification theory.</div>
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For the reasons stated above, though I join the court's judgment, I respectfully decline to join the majority opinion.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[1]" name="[1]" style="color: #660099;">[1]</a> Robert Scott Poston, Starskey Bomer, and David Dale.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[2]" name="[2]" style="color: #660099;">[2]</a> Appellee filed a petition in intervention in an existing lawsuit initiated by appellants against Siddiqui. In its second amended petition, appellee alleged claims against appellants and several individual doctors. Eventually appellee nonsuited the individual defendants.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[3]" name="[3]" style="color: #660099;">[1]</a> <i>See</i> Tex. R. Civ. P. 94; <i>In re Marriage of Moore,</i> No. 14-15-00859-CV, 2017 WL 3089962, at *2 (Tex. App.-Houston [14th Dist.] Jul. 20, 2017, pet. filed) (mem. op.).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[4]" name="[4]" style="color: #660099;">[2]</a> <i>See In re Marriage of Moore,</i> 2017 WL 3089962, at *2.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[5]" name="[5]" style="color: #660099;">[3]</a> <i>See</i> Tex. R. Civ. P. 67, 301; <i>In re Marriage of Moore,</i> 2017 WL 3089962, at *2.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[6]" name="[6]" style="color: #660099;">[4]</a> <i>See In re Marriage of Moore,</i> 2017 WL 3089962, at *2.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[7]" name="[7]" style="color: #660099;">[5]</a> <i>See </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=11987997790327164720&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Dror v. Mushin,</i> No. 14-12-00322-CV, 2013 WL 5643407, at *6 (Tex. App.-Houston [14th Dist.] Sep. 23, 2013, pet. denied)</a> (mem. op.).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[8]" name="[8]" style="color: #660099;">[6]</a> <i>See In re Marriage of Moore,</i> 2017 WL 3089962, at *2.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[9]" name="[9]" style="color: #660099;">[7]</a> <i>See id.</i></div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[10]" name="[10]" style="color: #660099;">[8]</a> <i>See id.</i> After trial, the Atrium Parties moved the trial court for leave to amend their pleadings as to the prior-material-breach defense on the ground that this issue had been tried by consent. The Atrium Parties do not assert on appeal that the trial court erred in denying this motion, and, in any event, the record reflects that this defense was not tried by express or implied consent of the parties.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[11]" name="[11]" style="color: #660099;">[9]</a> <i>See id.</i></div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[12]" name="[12]" style="color: #660099;">[10]</a> <i>See </i><a href="https://scholar.google.com/scholar_case?case=10727347172614876853&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Regency Advantage Ltd. P'ship v. Bingo Idea-Watauga, Inc.,</i> 936 S.W.2d 275, 278 (Tex. 1996)</a>; <a href="https://scholar.google.com/scholar_case?case=9839178855936467248&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re S.A.M.,</i> 321 S.W.3d 785, 790, n. 1 (Tex. App.-Houston [14th Dist.] 2010, no pet.)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[13]" name="[13]" style="color: #660099;">[11]</a> ImageFIRST's oral-modification argument and the majority's reliance on this argument are discussed later in this opinion.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[14]" name="[14]" style="color: #660099;">[12]</a> An agent of Atrium and an agent of ImageFIRST signed at the bottom of each page, and at least one of the agents appears to have signed the second page on December 16, 2012, more than a month after an agent of Atrium signed the first page. Nonetheless, the parties agree that the two pages in Plaintiff's Exhibit 1 constitute the Agreement, and it is presumed that these two pages are the Agreement for the purposes of this opinion.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[15]" name="[15]" style="color: #660099;">[13]</a> <i>See </i><a href="https://scholar.google.com/scholar_case?case=2046674048768984003&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Highmount Expl. & Prod. LLC v. Harrison Interests, Ltd.,</i> 503 S.W.3d 557, 566 (Tex. App.-Houston [14th Dist.] 2016, no pet.)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[16]" name="[16]" style="color: #660099;">[14]</a> <i>See </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=11987997790327164720&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Dror,</i> 2013 WL 5643407, at *6</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[17]" name="[17]" style="color: #660099;">[15]</a> <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Keller v. Wilson,</i> 168 S.W.3d 802, 823 (Tex. 2005)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[18]" name="[18]" style="color: #660099;">[16]</a> <i>See id.</i> at 827.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[19]" name="[19]" style="color: #660099;">[17]</a> <i>See id.</i></div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[20]" name="[20]" style="color: #660099;">[18]</a> <i>See id.</i> at 819.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[21]" name="[21]" style="color: #660099;">[19]</a> <a href="https://scholar.google.com/scholar_case?case=14759506139688711623&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Maritime Overseas Corp. v. Ellis,</i> 971 S.W.2d 402, 406-07 (Tex. 1998)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[22]" name="[22]" style="color: #660099;">[20]</a> <i>Id.</i></div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[23]" name="[23]" style="color: #660099;">[21]</a> <a href="https://scholar.google.com/scholar_case?case=4716815949105353460&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>GTE Mobilnet of S. Tex. v. Pascouet,</i> 61 S.W.3d 599, 615-16 (Tex. App.-Houston [14th Dist.] 2001, pet. denied)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[24]" name="[24]" style="color: #660099;">[22]</a> <a href="https://scholar.google.com/scholar_case?case=14759506139688711623&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Maritime Overseas Corp.,</i> 971 S.W.2d at 407</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[25]" name="[25]" style="color: #660099;">[23]</a> <a href="https://scholar.google.com/scholar_case?case=4716815949105353460&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Pascouet,</i> 61 S.W.3d at 616</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[26]" name="[26]" style="color: #660099;">[24]</a> The Atrium Parties have not asserted in the trial court or on appeal that the statute of frauds would bar enforcement of any alleged oral modification. <i>See</i> Tex. Bus. & Com. Code Ann. § 26.01(b)(6) (West, Westlaw through 2017 1st C. S.).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[27]" name="[27]" style="color: #660099;">[25]</a> <i>See </i><a href="https://scholar.google.com/scholar_case?case=12309930370194068680&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Shields Ltd. P'ship v. Bradberry,</i> 526 S.W.3d 471, 481-85 & n.44 (Tex. 2017)</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=8985635592338789910&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cooper Valves, LLC v. ValvTechnologies,</i> 531 S.W.3d 254, 263-64 (Tex. App.-Houston [14th Dist.] 2017, no pet.)</a> (enforcing contract provision in which parties prohibited oral modifications of the contract).</div>
<small style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 11px;"></small><br />
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3897365624944335937&q=14-16-00277-CV&hl=en&as_sdt=4,44#r[28]" name="[28]" style="color: #660099; text-decoration: underline;">[26]</a> <i>See </i><a href="https://scholar.google.com/scholar_case?case=12309930370194068680&q=14-16-00277-CV&hl=en&as_sdt=4,44" style="color: #660099; text-decoration: underline;"><i>Shields Ltd. P'ship,</i> 526 S.W.3d at 481-85 & n.44</a>.</div>
<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-63310721495553747362019-08-24T10:19:00.002-05:002019-08-24T10:31:18.162-05:00Fifth Circuit concludes that TCPA [Texas version of anti-SLAPP] does not apply in federal court in diversity cases because it conflicts with federal rules of procedure Klocke v. Watson (5th Cir. 2019) <div style="text-align: center;">
<b><span style="color: #cc0000;">DOES THE TCPA DISMISSAL PROCEDURE APPLY IN FEDERAL COURT? - FIFTH CIRCUIT SAYS NO! </span></b></div>
<div style="text-align: center;">
<br /></div>
<a href="https://cases.justia.com/federal/appellate-courts/ca5/17-11320/17-11320-2019-08-23.pdf?ts=1566581477" target="_blank">Klocke v. Watson</a>, No. 17-11320 (5th Cir. Aug. 23, 2019) (reversing district court’s judgment of dismissal under the Texas Citizen Participation Act and remanding for further proceedings under the federal rules)(Opinion by Edith Jones)<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-1ciLZIg4Pk0/XWFU5hS5XsI/AAAAAAAAQeU/EWF7CMIq7eoaKc_WZXgFb_EOu9mZrW72gCLcBGAs/s1600/TCPA%2B5th%2BCir%2Bdecision%2Bre%2Bnon-applicability%2Bin%2Bfederal%2Bcourt%2BKlocke%2Bv%2BWatson%2B%25285th%2BCir%2B2019%2529.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Does TCPA apply in federal court? - 5th Circuit says NO" border="0" data-original-height="895" data-original-width="954" height="375" src="https://1.bp.blogspot.com/-1ciLZIg4Pk0/XWFU5hS5XsI/AAAAAAAAQeU/EWF7CMIq7eoaKc_WZXgFb_EOu9mZrW72gCLcBGAs/s400/TCPA%2B5th%2BCir%2Bdecision%2Bre%2Bnon-applicability%2Bin%2Bfederal%2Bcourt%2BKlocke%2Bv%2BWatson%2B%25285th%2BCir%2B2019%2529.JPG" title="5th Cir decision re non-applicability in federal court Klocke v Watson (5th Cir 2019)" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Klocke v. Watson, No. 17-11320 (5th Cir. Aug. 23, 2019)</td></tr>
</tbody></table>
<div style="text-align: center;">
<b><span style="color: #0b5394;">EXCERPT FROM THE OPINION</span></b></div>
<blockquote class="tr_bq">
<div style="text-align: justify;">
Because the TCPA’s burden-shifting framework imposes additional requirements beyond those found in Rules 12 and 56 and answers the same question as those rules, the state law cannot apply in federal court. Under Rule 12(b)(6), a federal court may dismiss a case for failure to state a claim upon which relief may be granted if, accepting all well-pleaded factual allegations as true, the complaint does not state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678–79, 129 S. Ct. 1937, 1949–50 (2009). This is not an insuperable pleading barrier, and it requires no evidentiary support: “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 1965 (2007) (quotation marks omitted). Rule 56 states that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The party resisting summary judgment succeeds simply by showing that a material fact issue exists and requires trial by a factfinder. In ruling on a summary judgment motion, “the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511 (1986). Summary judgment motions are normally resolved after the discovery process has concluded or sufficiently progressed.</div>
</blockquote>
<blockquote class="tr_bq">
<div style="text-align: justify;">
In contrast to the federal procedural requirements, the TCPA imposes additional requirements that demand judicial weighing of evidence. Thus, confronted with a motion to dismiss under the TCPA, the court must determine “by a preponderance of the evidence” whether the action relates to a party’s exercise of First Amendment rights. Tex. Civ. Prac. & Rem. Code § 27.005(b)(1)-(3). The court must also determine whether there is “clear and specific evidence” that a plaintiff can meet each element of his claim. Id. at § 27.005(c). “Clear and specific evidence” must be, inter alia, “unambiguous, sure, or free from doubt.” In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015). The standard, which lies somewhere between the state’s pleading baseline and the standard necessary to prevail at trial, id. at 591, in any event exceeds the plaintiff’s Rule 56 burden to defeat summary judgment. Finally, the court must determine “by a preponderance of the evidence” if the defendant</div>
<div style="text-align: justify;">
can establish a valid defense to the plaintiff’s claim. Tex. Civ. Prac. & Rem. Code § 27.005(d). All these determinations are to be made while discovery normally available in federal court is circumscribed by the TCPA, except for “good cause.” Id. at §§ 27.003(c), 27.006(b). Because the TCPA imposes evidentiary weighing requirements not found in the Federal Rules, and operates largely without pre-decisional discovery, it conflicts with those rules. </div>
</blockquote>
<div style="text-align: center;">
* * * </div>
<blockquote class="tr_bq">
<div style="text-align: justify;">
The Federal Rules impose comprehensive, not minimum, pleading requirements. Rules 8, 12, and 56 “provide a comprehensive framework governing pretrial dismissal and judgment.” Id. at 1351. These rules “contemplate that a claim will be assessed on the pleadings alone or under the summary judgment standard; there is no room for any other device for determining whether a valid claim supported by sufficient evidence [will] avoid pretrial dismissal.” Id.</div>
</blockquote>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<br /></div>
<div>
<br /></div>
MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-47629121144797537332019-06-23T12:57:00.002-05:002019-10-04T16:49:49.655-05:00Nath v. Texas Children's Hospital, No. 17-0110 (Tex. 2019) Rohrmoos Venture v. UTSW standard for fee-shifting also applies to attorney fees awarded as frivolous-suit sanctions, SCOTX says <div style="text-align: center;">
<i>Nath, MD v. Texas Children's Hospital</i>, No. <a href="http://search.txcourts.gov/Case.aspx?cn=17-0110&coa=cossup">17-0110</a> (Tex. 2019) (Conclusory affidavits containing mere generalities about attorney's fees for defending frivolous claims held legally insufficient to justify amount of fees awarded as sanctions)</div>
<div style="text-align: center;">
<br /></div>
<span style="color: #0b5394;">In its seminal opinion in <i><a href="https://causeofactionelements.blogspot.com/2019/04/rohrmoos-venture-v-utsw-dva-healthcare.html">Rohrmoos Venture v. UTSW</a> DVA Healthcare, LLP</i>, No. <a href="http://search.txcourts.gov/Case.aspx?cn=16-0006&coa=cossup">16-0006</a>, 2019 WL 1873428 (Tex. Apr. 29, 2019), the Texas Supreme Court recently adopted the federal Lodestar approach as the proper method to determine the amount of reasonable and necessary attorney's fees to be paid by the losing party under a contract containing a prevailing party provision, or under a fee-shifting statute. In a companion case decided the same day, the Court reversed an award of fees under Chapter 38 of the CPRC for evidentiary insufficiency with reference to the standard announced in Rohrmoos. <i>Barnett v Schiro</i>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0278&coa=cossup">18-0278</a> (Tex. Apr. 26, 2019).</span><br />
<span style="color: #0b5394;"><br /></span>
<span style="color: #0b5394;">In the latest installment in its updated <a href="https://causeofactionelements.blogspot.com/2019/04/rohrmoos-venture-v-utsw-dva-healthcare.html">attorney-fee-shifting</a> jurisprudence, the Court has now applied the same standard to attorney's fees ordered paid as a sanction for the filing of a frivolous suit under the Civil Practice and Remedies Code. This is significant because some intermediate courts of appeal had not required evidence of necessity or reasonableness to support an award of attorney’s fees as a sanction.</span><br />
<br />
<div style="text-align: center;">
IN THE SUPREME COURT OF TEXAS</div>
<div style="text-align: center;">
<br />
444444444444</div>
<div style="text-align: center;">
NO. 17-0110</div>
<div style="text-align: center;">
444444444444<br />
<br /></div>
<div style="text-align: center;">
RAHUL K. NATH, M.D., PETITIONER,</div>
<div style="text-align: center;">
v.</div>
<div style="text-align: center;">
TEXAS CHILDREN’S HOSPITAL AND BAYLOR COLLEGE OF MEDICINE,</div>
<div style="text-align: center;">
RESPONDENTS<br />
<br /></div>
<div style="text-align: center;">
4444444444444444444444444444444444444444444444444444</div>
<div style="text-align: center;">
ON PETITION FOR REVIEW FROM THE</div>
<div style="text-align: center;">
COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS</div>
<div style="text-align: center;">
4444444444444444444444444444444444444444444444444444</div>
<div style="text-align: center;">
<br />
PER CURIAM</div>
<br />
JUSTICE GUZMAN did not participate in this decision.<br />
<br />
This is the second appeal of a $1.4 million sanction, levied to compensate the prevailing parties, Texas Children’s Hospital and Baylor College of Medicine, for their attorney’s fees in defending against a frivolous suit. In the first appeal, the Hospital and Baylor moved for attorney’s fees as a compensatory sanction based on Nath’s frivolous claims that the trial court described as frivolous ab initio. Nath v. Tex. Children’s Hosp. (Nath I), 446 S.W.3d 355, 364–65, 372 (Tex. 2014); see also TEX. CIV. PRAC. & REM. CODE § 10.004(c)(3); TEX. R. CIV. P. 13.<br />
<br />
We agreed that Nath’s pleadings were groundless and sanctionable. Nath I, 446 S.W.3d at 371–72. We remanded, however, because the parties had litigated merits issues for nearly a half-decade before the Hospital and Baylor moved for summary judgment, noting that “the degree to which the Hospital and Baylor caused their attorney’s fees is a relevant inquiry.” Id. at 372. While acknowledging that placing the entire cost of litigation on Nath might be proper, we noted further that a party “cannot arbitrarily shift the entirety of its costs on its adversary simply because it ultimately prevails on a motion for sanctions.” Id. We remanded for the trial court to reassess its award of attorney’s fees.<br />
<br />
On remand, the prevailing parties’ attorneys submitted affidavits, asserting they did nothing to prolong the suit or unnecessarily increase their fees. The affidavits stated total amounts billed to their clients in defending against Nath’s frivolous suit. The trial court found the evidence sufficient and reassessed the same $1.4 million sanction for attorney’s fees “pursuant to Chapter 10 of the Texas Civil Practice and Remedies Code and/or Texas Rule of Civil Procedure 13.”<br />
<br />
Nath argues that the Hospital and Baylor’s affidavits are insufficient to prove that the $1.4 million sanction is a reasonable and necessary attorney’s fee. See In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017) (observing that the party seeking attorney’s fees “bears the burden of establishing the fees are reasonable and necessary”). The Hospital and Baylor, however, argue that a different standard of proof applies for attorney’s fees awarded as sanctions because the purpose of sanctions is to punish violators and deter misconduct. Because sanctions are intended to punish, the Hospital and Baylor argue they should not be held to the same evidentiary burden as in other feeshifting cases. Cf. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, ___ S.W.3d ___ (Tex. 2019) (clarifying the evidentiary standards for shifting attorney’s fees). Indeed, some courts of appeal have not required proof of necessity or reasonableness when assessing attorney’s fees as sanctions. See, e.g., Quick Change Artist, LLC v. Accessories, No. 05–14–01562–CV, 2017 WL 563340, at *6 (Tex. App.—Dallas Feb. 13, 2017, no pet.) (mem. op.); Pressley v. Casar, 567 S.W.3d 28, 61 (Tex.<br />
<div style="text-align: center;">
2</div>
App.—Austin 2016), rev’d per curiam, 567 S.W.3d 327 (Tex. 2019); Prize Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537, 575–76 (Tex. App.—San Antonio 2011, no pet.); Scott Bader, Inc. v. Sandstone Prods., Inc., 248 S.W.3d 802, 816–17 (Tex. App.—Houston [1st Dist.] 2008, pet. denied); Olibas v. Gomez, 242 S.W.3d 527, 535 (Tex. App.—El Paso 2007, pet. denied); Glass v. Glass, 826 S.W.2d 683, 688 (Tex. App.—Texarkana 1992, writ denied); Allied Assocs., Inc. v. INA Cty. Mut. Ins. Cos., 803 S.W.2d 799, 799 (Tex. App.—Houston [14th Dist.] 1991, no writ).<br />
<br />
This line of authority is premised on a misunderstanding of a per curiam opinion from this Court. In Brantley v. Etter, we refused the writ, no reversible error, observing in a brief opinion that a party complaining about an award of attorney’s fees as a sanction does not have the right to a jury trial on the amount of the sanction. 677 S.W.2d 503, 504 (Tex. 1984) (per curiam). Rather, we said the amount awarded by the trial court was solely within the court’s sound discretion, subject only to its abuse. Id. Several years later, an intermediate appellate court cited Brantley to support its “belief that proof of attorney’s fees expended or the reasonableness thereof is not required when such fees are assessed as sanctions.” Allied Assocs., 803 S.W.2d at 799. The line of authority thus developed from this initial misunderstanding regarding the proof necessary to invoke the trial court’s discretion.<br />
<br />
Before a court may exercise its discretion to shift attorney’s fees as a sanction, there must be some evidence of reasonableness because without such proof a trial court cannot determine that the sanction is “no more severe than necessary” to fairly compensate the prevailing party. PR Invs. & Speciality Retailers, Inc. v. State, 251 S.W.3d 472, 480 (Tex. 2008) (quoting TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991)); see also Low v. Henry, 221 S.W.3d 609, 620 (Tex. 2007) (“[A] sanction cannot be excessive nor should it be assessed without appropriate guidelines.”). “Consequently, when a party seeks attorney’s fees as sanctions, the burden is on that party to put forth some affirmative evidence of attorney’s fees incurred and how those fees resulted from or were caused by the sanctionable conduct.” CHRISTUS Health Gulf Coast v. Carswell, 505 S.W.3d 528, 540 (Tex. 2016).<br />
<br />
Chapter 10 of the Civil Practice and Remedies Code authorizes a court to award sanctions for groundless allegations and other pleadings presented for an improper purpose. TEX.CIV. PRAC. & REM.CODE §§ 10.001-.006. The sanction may include a “directive” from the court, the payment of a “penalty into court,” and a payment to the opposing party of “the amount of the reasonable expenses incurred by the other party . . . including reasonable attorney’s fees.” Id. § 10.004(c)(1)-(3). We have recently clarified the legal and evidentiary requirements to establish a reasonable attorney’s fee in a fee-shifting situation. See Rohrmoos, __ S.W.3d at __. Although this case deals with attorney’s fees awarded through a sanctions order, the distinction is immaterial because all feeshifting situations require reasonableness.<br />
<br />
On remand, the Hospital and Baylor attempted to prove the reasonableness of the awarded fees by submitting two additional conclusory affidavits. Although we expressed confidence in Nath I that the reasonableness of the sanction might be resolved on the existing record or through additional affidavits, 446 S.W.3d at 372 n.30, the subsequent affidavits here merely reference the fees without substantiating either the reasonable hours worked or the reasonable hourly rate. See Rohrmoos S.W.3d at ___ (explaining the applicability of the lodestar analysis for fee-shifting awards).<br />
<br />
Rohrmoos explains the necessity of presenting either billing records or other supporting evidence when seeking to shift attorney’s fees to the losing party. Id. Conclusory affidavits containing mere generalities about the fees for working on Nath’s frivolous claims are legally insufficient to justify the sanction awarded here. See Long v. Griffin, 442 S.W.3d 253, 255 (Tex. 2014) (per curiam) (overturning an attorney’s fee award when the affidavit supporting the fees “only offer[ed] generalities” and “no evidence accompanied the affidavit”); El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 763–64 (Tex. 2012) (discussing the insufficiency of attorney’s fee evidence that “based [its] time estimates on generalities”).<br />
<br />
The trial court’s judgment awards the Hospital attorney’s fees of $726,000 and Baylor attorney’s fees of $644,500.16 for their respective defenses to Nath’s groundless claims and recites that this amount “fairly compensates [them] with regard to defending against the claims that serve as the basis for this award.” The court has thus used its authority under Chapter 10 to shift responsibility for the defendant’s reasonable attorney’s fees to the plaintiff, Nath, as a penalty for his pursuit of groundless claims. Because the standard for fee-shifting awards in Rohrmoos likewise applies to fee-shifting sanctions, we reverse the court of appeals’ judgment affirming the sanctions award and, without hearing oral argument, remand the case to the trial court for further proceedings in light of Rohrmoos. See TEX. R. APP. P. 59.1.<br />
<br />
Opinion Delivered: June 21, 2019<br />
<br />
<b><span style="color: #0b5394;">RELATED LEGAL COMMENTARY ON OPINIONS </span></b><br />
<br />
Commentary on Rohrmoos: <a href="http://dx.doi.org/10.2139/ssrn.3402040">Texas Supreme Court Tells Bar and Bench to Follow the Lodestar</a>: Post-Opinion Amicus Brief in Rohrmoos v. UTSW, No.16-0006 (Tex. 2019) (June 7, 2019). Available at SSRN: https://ssrn.com/abstract=3402040 or http://dx.doi.org/10.2139/ssrn.3402040<br />
<br />
Commentary on Hill v. Shamoun & Norman: <a href="http://dx.doi.org/10.2139/ssrn.3152327" target="_blank">Recovery of Attorney's Fees in the Absence of a Contract in Texas</a>: <a href="https://ssrn.com/abstract=3152327" target="_blank">Amicus Curiae Brief in Hill v. Shamoun on behalf of the public </a>(Tex. 2018) (January 23, 2018). Available at SSRN: https://ssrn.com/abstract=3152327<br />
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-9908067138875982902019-05-24T17:01:00.006-05:002019-10-07T09:23:12.934-05:00Sad Day for Free Speech and Press Freedom in Texas: Corpus Christi Caller-Times v. ex-Chamber of Commerce CEO Terry Carter (Tex. May 24, 2019)<div style="text-align: center;">
<span style="color: red;"><b>CHAMPIONS OF THE GIST (ANALYSIS) BRING ON A BIG CHILL </b></span></div>
<div style="text-align: center;">
<span style="color: red;"><b>ON PRESS FREEDOMS IN TEXAS </b></span></div>
<div style="text-align: center;">
<br /></div>
<div>
Using its power to amend the "common law" the homogeneously Republican Texas Supreme Court has seen fit to exempt an entire industry (the legal profession) from the civil tort system by granting it "<a href="https://causeofactionelements.blogspot.com/2015/06/comment-on-cantey-hanger-llp-v-byrd-tex.html">attorney immunity</a>", but when it comes to a less captive audience, it's a different matter, even when the rights at issue are of constitutional dimensions.<br />
<br />
<div style="text-align: center;">
<span style="font-size: x-small;">Scripps NP Operating dba The Corpus Christi Caller-Times v. Terry Carter, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0046&coa=cossup" target="_blank">17-0046</a> (Tex. May 24, 2019) </span></div>
<br />
Abusers of freedom of speech and the press, as determined through a judicial <b>defamation-gist-distillation</b> process, are to be held accountable. So a Corpus Christi newspaper must now face trial, and associated attorney's fees, for reporting and editorializing critically about a former Chamber of Commerce CEO in its home town. </div>
<br />
If opinions from the Lone Star State's highest court such as the one just handed down in <a href="http://www.txcourts.gov/media/1444140/170046.pdf">Scripps NP Operating LLC v. Carter</a>, don't chill free speech and freedom of the press, what does?<br />
<br />
<div style="text-align: center;">
<b><span style="color: red;">Who will protect free speech when the State's highest court won't? </span></b></div>
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<tr><td class="tr-caption" style="text-align: center;">Corpus Christi Shoreline </td></tr>
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<div style="text-align: center;">
IN THE SUPREME COURT OF TEXAS</div>
<div style="text-align: center;">
---------</div>
<div style="text-align: center;">
NO. 17-0046</div>
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<div style="text-align: center;">
SCRIPPS NP OPERATING, LLC, A WISCONSIN LIMITED LIABILITY COMPANY,</div>
<div style="text-align: center;">
SUCCESSOR IN INTEREST TO SCRIPPS TEXAS NEWSPAPERS, LP D/B/A CORPUS</div>
<div style="text-align: center;">
CHRISTI CALLER-TIMES, PETITIONERS,</div>
<div style="text-align: center;">
v.</div>
<div style="text-align: center;">
TERRY CARTER, RESPONDENT<br />
<br /></div>
<div style="text-align: center;">
4444444444444444444444444444444444444444444444444444</div>
<div style="text-align: center;">
ON PETITION FOR REVIEW FROM THE</div>
<div style="text-align: center;">
COURT OF APPEALS FOR THE THIRTEENTH DISTRICT OF TEXAS</div>
<div style="text-align: center;">
4444444444444444444444444444444444444444444444444444</div>
<div style="text-align: center;">
Argued February 20, 2019<br />
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<a href="https://1.bp.blogspot.com/-NYD62RGIUCA/XOhq7CVtipI/AAAAAAAAQU8/7RQF7WR-F5ksuAoDijjrP6BAXad89M6LwCLcBGAs/s1600/SCOTX%2BScripps%2BNP%2BOperating%2BLLC%2Bdba%2BCorpus%2BChristi%2BCaller-Times%2Bv.%2BCarter%2BNo.%2B17-0046%2B%2528Tex.%2BMay%2B24%252C%2B2019%2529%2528Page%2B1%2529.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="809" data-original-width="912" height="353" src="https://1.bp.blogspot.com/-NYD62RGIUCA/XOhq7CVtipI/AAAAAAAAQU8/7RQF7WR-F5ksuAoDijjrP6BAXad89M6LwCLcBGAs/s400/SCOTX%2BScripps%2BNP%2BOperating%2BLLC%2Bdba%2BCorpus%2BChristi%2BCaller-Times%2Bv.%2BCarter%2BNo.%2B17-0046%2B%2528Tex.%2BMay%2B24%252C%2B2019%2529%2528Page%2B1%2529.PNG" width="400" /></a></div>
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JUSTICE DEVINE delivered the opinion of the Court.<br />
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<h3 id="gsl_case_name" style="border: 0px; margin: 1em 0px; padding: 0px;">
SCRIPPS NP OPERATING, LLC, A WISCONSIN LIMITED LIABILITY COMPANY, SUCCESSOR IN INTEREST TO SCRIPPS TEXAS NEWSPAPERS, LP D/B/A CORPUS CHRISTI CALLER-TIMES, Petitioners,<br />v.<br />TERRY CARTER, Respondent.</h3>
</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<a href="https://scholar.google.com/scholar?scidkt=6774943117548323674&as_sdt=2&hl=en" style="color: #660099;">No. 17-0046.</a></center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<div style="position: relative;">
<b>Supreme Court of Texas.</b></div>
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<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
Argued February 20, 2019.</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
Opinion delivered: May 24, 2019.</center>
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</center>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
James A. Hemphill, for Texas Press Association, Freedom of Information Foundation of Texas and Texas Association of Broadcasters, Amicus Curiae.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Bryan A. Garner, Rene D. Rodriguez, Carol T. Jackson, Angelica Estell Hernandez, Craig S. Smith, Karolyne Garner, for Terry Carter, Respondent.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Jorge C. Rangel, Joseph M. Marcum, Paul C. Watler, Shannon Z. Teicher, Jaime S. Rangel, for Scripps NP Operating, LLC, a Wisconsin Limited Liability Company, Successor in Interest to Scripps Texas Newspapers, LP d/b/a Corpus Christi Caller-Times and the E.W. Scripps Company, Petitioner.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
On Petition for Review from the Court of Appeals for the Thirteenth District of Texas.</div>
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JUSTICE, DEVINE delivered the opinion of the Court.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
At issue in this interlocutory appeal is whether a newspaper was entitled to summary judgment in a defamation case. The former chief executive officer of the Corpus Christi Chamber of Commerce sued the <i>Corpus Christi Caller-Times,</i> asserting that articles reporting he had been accused of financial improprieties were defamatory. The Newspaper filed a motion for summary judgment claiming that the allegedly defamatory articles were substantially true and that an editorial was protected opinion. The trial court disagreed and denied the Newspaper's motion. The Newspaper filed an interlocutory appeal. The court of appeals agreed with the trial court that the Newspaper was not entitled to summary judgment on those grounds. 567 S.W.3d 1, 20-21 (Tex. App.-Corpus Christi-Edinburg 2016).</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
In this Court, the Newspaper again asserts that the trial court should have granted summary judgment because the articles at issue were substantially true. It argues that no fact issue regarding substantial truth exists because it accurately reported the allegations of others and because statements in an editorial, which tied together the previous reporting, were non-actionable opinions. Because we agree with the court of appeals that the Newspaper was not entitled to summary judgment, we affirm.</div>
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<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
I. Background</h2>
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</div>
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Terry Carter began working for the Corpus Christi Chamber of Commerce (chamber) as the president and CEO in 2004. On February 15, 2008, the Newspaper published an article online entitled "Financial, management questions raised at CC Chamber." The article stated that three chamber officials "raised what they describe as serious financial and management issues." No chamber officials would discuss the nature of the issues, but the concerns arose after the chamber chairman-elect "recommended a raise, bonus and contract extension for Carter" and the executive committee treasurer, Damon Bentley, was asked to review the chamber's financial standing. The article also noted that an emergency meeting had taken place that day from which Carter could be heard shouting.</div>
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The next day, the Newspaper printed another article in the print version of the newspaper with additional details about the meeting the day before. The article stated that three of the chamber's five executive committee members had demanded the meeting to address concerns about the chamber's "financial and management practices, which Carter oversees." But before the meeting started, two of those members were informed that they were no longer eligible to serve on the committee, "meaning they can't participate in the committee's recommendation to the full board on matters involving Carter's contract." The Newspaper quoted Bentley as saying "I was saddened and I'm still confused on why two chamber executive board members had been removed from the executive committee after being asked to assist in the evaluation process of our CEO." The article again noted that the "financial concerns" arose after a raise, bonus, and contract extension were recommended for Carter.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Over the next four months, the Newspaper published over twenty more articles about the chamber and Carter. The next article was entitled "CC Chamber meeting to discuss financial irregularities" and stated that irregularities were discovered "during a performance review of president Terry Carter after a raise and bonus for Carter had been proposed." The Newspaper next reported on a special called meeting, stating that the chamber decided to conduct a full audit "after what have been described as financial irregularities were uncovered while reviewing a proposed raise and bonus for . . . Carter." The article also noted "significant developments" about two of three executive committee members who brought the financial concerns to the full committee's attention and were informed by Carter and the chamber's attorney that they were no longer eligible to serve on the committee.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
The headline of the next article was "Chamber CEO shifted funds, letter says," with the subtitle "Move makes loss appear to be profit, treasurer writes." The article reported on a letter from Bentley to board members and stated that Carter, "whose bonus is based on financial performance, shifted funds to make a loss look like a profit, according to [the] letter." The letter also stated that Carter deferred part of his salary and that the chamber executive vice president was also asked to defer his salary because the chamber was in a "cash crunch" and the chamber "showed a $40,425 profit when it should have shown a $61,782 loss." According to Bentley's letter, Carter also used $18,312 from the chamber's building funds to pay operating expenses which, according to the chamber's accountant, could "possibly forfeit the (chamber) foundation's (nonprofit) status because of the link between the CEO's bonus to the financial performance of the chamber." The article described the February 15 meeting of the executive committee as including "a shouting match with Carter and the dismissal of two committee members" and stated that, according to Bentley's letter and witness accounts, Carter "seized" the tape recording of the meeting and left the building. The article quoted from Bentley's letter: "In the end . . . this comes down to trust and accountability. Removing executive committee members who voice sincere concerns, keeping taped meetings from other board members, yelling in an attempt to intimidate board volunteers . . . and attempting to justify a raise based on disputable numbers do not change my fiduciary responsibility." The article reported that Carter, also in a letter to board members, said that he deferred part of his salary for tax purposes and that the failure to record the deferral was a bookkeeping error. Carter also stated in the letter that he had discussed moving funds from the chamber's building funds with Bentley and the chamber's accountant before he did so.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
In another article, the Newspaper reported on a letter to board members from one of the board members who had been removed. She had concerns the Chamber had not taken sufficient steps to address the financial concerns raised by Bentley and that Carter's letter to board members "gloss[ed] over financial irregularities and the declining membership numbers." The article again noted that Carter "seized" the tape of the February 15 meeting and shouted at the board members who were removed that day. The article also stated that after Bentley reviewed the chamber's finances in anticipation of a raise, bonus, and contract extension for Carter, "Bentley found that Carter had shifted funds among accounts and deferred $19,992 of his 2007 salary. Without those moves, the chamber's cash flow would have been negative, according to Bentley, adding that Carter's bonus is based on the chamber's financial performance." The article additionally said that according to Bentley, the chamber's accountant told him that "the chamber foundation's nonprofit status could be in jeopardy because Carter shifted chamber foundation funds to pay operating expenses and Carter's bonus is linked to the chamber's financial performance."</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
On March 2, 2008, the Newspaper published an editorial with the headline "Chamber CEO's actions raise serious questions," and a subtitle stating "Funds were shifted that made a loss look like a profit, entitling CEO to a bonus." The unsigned editorial stated that the Newspaper had resigned from the chamber the prior year, a decision prompted by "the divisive leadership of Terry Carter" because the Newspaper could not be part of an organization whose president "engages in name calling and shows favoritism toward one business over another." The editorial noted that reports of "highly questionable stewardship of the financial affairs of the chamber by Carter" had been laid out in a series of stories and that these "news accounts describe duplicitous dealings by Carter in his relations with the membership and the executive committee." It stated that a letter by Bentley laid out "the questionable shifting of funds" and "[t]he fund shifting, including the deferring of Carter's salary, allowed the chamber to show a profit, thus qualifying Carter for a bonus." The editorial stated that Carter had explained he had discussed using chamber foundation money for operating expenses with the chamber accountant, but that the accountant had "warned that the use of foundation money in such a way would threaten the chamber's nonprofit status." The editorial closed with</div>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; margin: 1em 0px; padding: 0px 40px; position: relative;">
The chamber can be an effective and creditable voice for the business community only if its leadership conducts itself in an ethical and professional manner, accountable to its members and holding itself to the same businesslike standards that its members expect of themselves. Intimidation, secrecy and duplicity discredit a vital organization. The question mark remains over Carter until he fully explains his actions, or until the chamber chooses to move on without him.</blockquote>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
After the editorial, the Newspaper published additional articles regarding chamber members signing a petition for the chamber to address the financial practices and provide membership rosters, and the chamber meetings held to address those concerns. The Newspaper also reported on the chamber putting Carter on paid leave and his eventual resignation and severance agreement. Finally, the Newspaper published articles regarding a lawsuit filed by Carter against the chamber and Bentley and court proceedings related to the tape of the February 15 meeting.</div>
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Six months after the articles were published, an outside accounting firm completed an audit of the chamber's finances. The audit stated that "[t]he staff-prepared financial statements had material misstatements. The misstatements are due to omissions, accounting applications and or lack of current accounting requirements." The audit also noted that the "misstatements" had been "corrected by management."</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Carter filed suit against Scripps Texas Newspapers (the predecessor in interest to Scripps NP Operating, LLC) d/b/a <i>Corpus Christi Caller-Times</i> for (1) tortious interference with a contract, (2) tortious interference with prospective relationship, (3) defamation, and (4) conspiracy. He asserted that the Newspaper published false statements about him alleging wrongful and deceitful conduct by engaging in financial and managerial irregularities to obtain an undeserved bonus and as a result, he suffered loss of employment and past and future income. The Newspaper filed a combined motion for traditional and no-evidence summary judgment, arguing that there was no evidence of actual malice, which the Newspaper alleged to be an element of Carter's defamation claims because he was a public figure. The Newspaper also asserted that in the absence of actual malice, Carter's non-defamation claims failed. The trial court denied the motion, and the Newspaper pursued an interlocutory appeal. <i>See</i> TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6) (permitting an interlocutory appeal from the denial of a motion for summary judgment by a member of the media "arising under the free speech or free press clause of the First Amendment to the United States Constitution, or Article I, Section 8, of the Texas Constitution, or Chapter 73 [of the Texas Civil Practice and Remedies Code]").</div>
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The court of appeals affirmed the trial court's order denying the Newspaper's motion for summary judgment. <i>Scripps Tex. Newspaper, LP v. Carter,</i> 13-09-00655-CV, 2012 WL 5948955, at *8 (Tex. App.-Corpus Christi-Edinburg Nov. 21, 2012, pet. denied).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3822059495295379235&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&scisbd=2&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> The court concluded Carter was not required to prove the Newspaper's actual malice because he was not a public figure. <i>Id.</i> at *5. The court then affirmed the denial of the Newspaper's summary-judgment motion, concluding that fact issues remained regarding the Newspaper's liability for publishing allegedly defamatory statements. <i>Id.</i> at *7-8.</div>
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On remand, the Newspaper filed a second motion for summary judgment on traditional and no-evidence grounds. This time it argued that the articles were (1) true, (2) not defamatory, (3) non-actionable opinion, (4) privileged as fair reports of judicial proceedings, and (5) published without negligence or actual malice. The Newspaper also asserted there was no evidence to support Carter's non-libel claims. The trial court again denied the Newspaper's motion for summary judgment, and the Newspaper filed a second interlocutory appeal. The court of appeals agreed with the Newspaper that there was no evidence supporting Carter's non-defamation claims and rendered judgment granting the Newspaper's motion for summary judgment as to those claims. 567 S.W.3d at 26. The court also held that the relevant articles were protected by the fair-report privilege, <i>id.</i> at 21, and that there was no evidence of actual malice as to any of the articles. <i>Id.</i> at 25. But the court concluded the articles were defamatory. <i>Id.</i> at 18. The court further concluded that the Newspaper failed to establish that the articles were published without negligence, <i>id.</i> at 24-25, or that the editorial was non-actionable opinion. <i>Id.</i> at 21. Finally, the court concluded that the Newspaper failed to conclusively prove that the gist of the articles was substantially true. <i>Id.</i> at 20. The court rejected the Newspaper's claim that the articles were substantially true reports of allegations, observing that the statements went beyond mere "allegation reporting." <i>Id.</i></div>
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In this Court, the Newspaper challenges the court of appeals conclusion as to the substantial truth of the statements at issue. The Newspaper claims that it accurately reported third-party allegations against Carter, meeting the substantial truth test, and additionally that there are no fact issues regarding substantial truth. The Newspaper also asserts that the court of appeals incorrectly determined that the editorial was not a protected expression of opinion. And finally, the Newspaper argues that the court of appeals erred by analyzing the multiple publications at issue together rather than individually to determine the gist of the articles.</div>
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II. Jurisdiction</h2>
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We first consider Carter's challenge to our jurisdiction, claiming that we lack jurisdiction over this second interlocutory appeal because the Newspaper's second motion for summary judgment is essentially an untimely motion for rehearing raising issues that were, or could have been, raised in the Newspaper's first interlocutory appeal. While Texas appellate courts generally only have jurisdiction over appeals from final judgments, they do have jurisdiction over appeals from interlocutory orders when authorized by statute. <a href="https://scholar.google.com/scholar_case?case=3214707215235444896&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Rusk State Hosp. v. Black,</i> 392 S.W.3d 88, 92 (Tex. 2012)</a> (citing TEX. CIV. PRAC. & REM. CODE § 51.014(a)). The Civil Practice and Remedies Code provides that "a person may appeal from an interlocutory order" that</div>
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denies a motion for summary judgment that is based in whole or in part upon a claim against or defense by a member of the electronic or print media, acting in such capacity, or a person whose communication appears in or is published by the electronic or print media, arising under the free speech or free press clause of the First Amendment to the United States Constitution, or Article I, Section 8, of the Texas Constitution, or Chapter 73 [of the Texas Civil Practice and Remedies Code].</blockquote>
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TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6).</div>
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Carter asserts that section 51.014 does not authorize multiple interlocutory appeals by the same party in one case. He contends that the statutory language providing that "[a] person may appeal from an interlocutory order . . . that denies a motion for summary judgment" does not permit an appeal from <i>any</i> interlocutory order that denies a second motion for summary judgment. <i>See id.</i> We disagree that the statute restricts interlocutory appeals in this way.</div>
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In <a href="https://scholar.google.com/scholar_case?case=15122793448751435240&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Houston v. Estate of Jones,</i> 388 S.W.3d 663 (Tex. 2012) (per curiam)</a>, we addressed whether the City of Houston was entitled to a second appeal under section 51.014(a)(8), which permits an interlocutory appeal from an order that grants or denies a plea to the jurisdiction by a governmental unit. We concluded the court of appeals did not have jurisdiction over the second appeal because the City did not raise any new issues in its second plea to the jurisdiction so it was substantively a motion to reconsider. <i>Id.</i> at 667. In a later case, we explained that "[u]nder <i>Jones,</i> the touchstone of our analysis was whether the later plea to the jurisdiction was a new and distinct motion or a mere motion to reconsider." <a href="https://scholar.google.com/scholar_case?case=7218922849786125142&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Magnolia 4A Econ. Dev. Corp. v. Smedley,</i> 533 S.W.3d 297, 301 (Tex. 2017) (per curiam)</a>. And in that case, we concluded that because the second motion was sufficiently different from the first, it merited an independent interlocutory appeal. <i>Id.</i> at 302.</div>
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Even though the interlocutory appeals in this case are under subsection 51.014(a)(6), the same analysis applies—a court has jurisdiction over a subsequent appeal if the second motion is a new and distinct motion and not a mere motion to reconsider previous grounds for summary judgment. <i>See id.</i> Carter asserts that the Newspaper's second motion was a motion for rehearing because it raised the same category of issues as its first motion—First Amendment issues. We disagree that the Newspaper's second motion was a motion to reconsider and not a distinct motion.</div>
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In its first motion for summary judgment, the Newspaper asserted (1) the evidence established as a matter of law that Carter was a public figure, (2) there was no evidence that the Newspaper published the articles at issue with actual malice, an essential element of Carter's defamation claims because of Carter's public-figure status, and (3) in the absence of malice, Carter's non-defamation claims also failed. The trial court denied the motion and the court of appeals affirmed, holding that Carter was not a public figure. <i>Scripps Tex. Newspaper, LP v. Carter,</i> 2012 WL 5948955, at *1, 5, 8. In contrast, the Newspaper argued in its second motion that the articles at issue were (1) substantially true, (2) non-actionable opinion, (3) privileged as fair reports of judicial proceedings, (4) published without negligence or malice, and (5) not defamatory. Although the second motion raised issues related to the First Amendment, it raised new and distinct grounds for relief, which entitled the Newspaper to further interlocutory review. <i>See</i> TEX. CIV. PRAC. & REM. CODE § 51.014(a)(6).</div>
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Carter invites us to set a clear jurisdictional boundary of only one interlocutory appeal under section 51.014(a). Otherwise, Carter claims, the floodgates will be open to multiple interlocutory appeals in every case where that section applies. But nothing in the statutory language limits a party to only one appeal. We decline to read a limitation in the statute that the Legislature has not provided. <i>See </i><a href="https://scholar.google.com/scholar_case?case=11076066210323579299&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Rockwall v. Hughes,</i> 246 S.W.3d 621, 629 (Tex. 2008)</a> ("[O]ur standard is to construe statutes to effectuate the intent of the Legislature, with the language of the statute as it was enacted to be our guide.").</div>
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We next turn to the merits of the case.</div>
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III. Defamation</h2>
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The First Amendment to the United States Constitution and Article I, Section 8 of the Texas Constitution guarantee the people a right to a free press. U.S. CONST. amend. I; TEX. CONST. art. I, § 8. The open courts provision of the Texas Constitution also guarantees that "every person for an injury done him, in his . . . reputation, shall have remedy by due course of law." TEX. CONST. art. I, § 13. Nearly 100 years ago, this Court said, "The purpose of [section 8] is to preserve what we call `liberty of speech' and `the freedom of the press,' and at the same time hold all persons accountable to the law for the misuse of that liberty or freedom." <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=8555169648198607901&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Ex parte Tucker,</i> 220 S.W. 75, 76 (Tex. 1920)</a>. The tort of libel has been part of our common law tradition since the sixteenth century, and our courts have grappled with the proper balance between this tradition and the protection of First Amendment freedoms for many decades. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15073454428774944905&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Masson v. New Yorker Magazine, Inc.,</i> 501 U.S. 496, 515 (1991)</a>; <a href="https://scholar.google.com/scholar_case?case=10183527771703896207&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>New York Times Co. v. Sullivan,</i> 376 U.S. 254, 265-66 (1964)</a>; <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=8555169648198607901&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Ex parte Tucker,</i> 220 S.W. at 76</a>. In a defamation case, when the defendant is a media outlet and the plaintiff is a private citizen (not a public official or public figure), the plaintiff must prove (1) a publication by the defendant, (2) that defamed the plaintiff, and (3) which was published negligently with regard to the truth. <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely v. Wilson,</i> 418 S.W.3d 52, 61 (Tex. 2013)</a>. As we explained in <i>Neely,</i> these elements are consistent with the United States Supreme Court's application of constitutional principles to defamation claims. <i>See id.</i></div>
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A. Standard of Review</h2>
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We review the denial of a motion for summary judgment de novo. <a href="https://scholar.google.com/scholar_case?case=7339535568853282923&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Dall. Morning News, Inc. v. Tatum,</i> 554 S.W.3d 614, 624 (Tex. 2018)</a>. The party moving for summary judgment, here the Newspaper, bears the burden of proof. <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 59</a>. The Newspaper sought summary judgment on traditional and no-evidence grounds and while the burdens vary for the different types of motions, both parties presented summary judgment evidence. <i>See id.</i> Therefore, the "differing burdens are immaterial and the ultimate issue is whether a fact issue exists." <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=10173643912533186367&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Buck v. Palmer,</i> 381 S.W.3d 525, 527 & n.2 (Tex. 2012)</a>). We review the evidence in the light most favorable to the nonmovant and indulge every reasonable inference and resolve any doubts against the motion. <i>Id.</i> at 59-60 (citing <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Keller v. Wilson,</i> 168 S.W.3d 802, 824 (Tex. 2005)</a>). These summary judgment standards of review are not affected by the constitutional concerns over defamation. <i>Id.</i> at 60.</div>
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B. Consideration of Multiple Articles</h2>
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In the court of appeals, the Newspaper asserted that the articles were not defamatory. The court of appeals disagreed, finding "the impression left by the articles <i>taken together</i>is certainly one which a reader of ordinary intelligence could perceive as defamatory." 567 S.W.3d at 17 (emphasis added). The court concluded that the articles implicitly suggested that Carter committed theft and made false statements to obtain property. <i>Id.</i>at 18. The court also found that the articles collectively reported that Carter misrepresented the chamber finances for his own financial gain, "seized" a tape recording of a meeting, and attempted to intimidate his critics, all of which were directly relevant to his fitness to serve as CEO of a non-profit organization. <i>Id.</i> The Newspaper argues that a court must treat each article as a separate and distinct publication in assessing its defamatory impact and the court of appeals erred by considering the articles together. Carter responds that the Newspaper published these articles as a series and defamation must be considered in context, which includes all instances of publication. We agree with Carter that the court of appeals correctly analyzed the multiple articles together to assess whether the publications were defamatory.</div>
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To establish the defamatory meaning of a publication, courts analyze the gist of the publication "as a whole in light of the surrounding circumstances based upon how a person of ordinary intelligence would perceive it." <a href="https://scholar.google.com/scholar_case?case=7436507982546408154&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>D Magazine Partners, L.P. v. Rosenthal,</i> 529 S.W.3d 429, 434 (Tex. 2017)</a> (quoting <a href="https://scholar.google.com/scholar_case?case=205633650980612084&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Turner v. KTRK Television, Inc.,</i> 38 S.W.3d 103, 114 (Tex. 2000)</a>) (citing <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 63</a>). In <a href="https://scholar.google.com/scholar_case?case=14806149054223605379&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bentley v. Bunton</i></a><i>,</i> we ruled that statements made by the host of a call-in talk show were defamatory after considering statements he made on public access television over a nearly eight-month span. <a href="https://scholar.google.com/scholar_case?case=14806149054223605379&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;">94 S.W.3d 561, 581, 602 (Tex. 2002)</a>. Similarly, the court of appeals correctly considered all the articles together to determine whether they were defamatory. The Newspaper's editorial itself characterizes the articles in this case as a "series," and all of the articles reported on the same subject matter—financial irregularities at the chamber linked to Carter's entitlement to a bonus and Carter's attempts to intimidate his critics. The court of appeals could not make a proper assessment of the alleged defamatory material in this case without looking at the "surrounding circumstances" encapsulated in this series. <i>See </i><a href="https://scholar.google.com/scholar_case?case=205633650980612084&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Turner,</i> 38 S.W.3d at 114</a>. Accordingly, we hold the court of appeals did not err by considering the entire series of articles for the purposes of assessing their defamatory meaning.</div>
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C. Substantial Truth</h2>
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The Newspaper next argues it was entitled to summary judgment because the alleged defamatory material it published was substantially true as a matter of law. "The truth of the statement in the publication on which an action for libel is based is a defense to the action." TEX. CIV. PRAC. & REM. CODE §73.005(a). The Newspaper claims the statements were substantially true based on two grounds: (1) the Newspaper merely reported third-party allegations against Carter and did so accurately, and (2) there is no evidence that raises a fact issue on substantial truth. Because this is an appeal from the denial of a motion for summary judgment, we consider whether there is a fact issue regarding the substantial truth of the statements at issue.</div>
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1. Reporting Allegations</h2>
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The Newspaper argues it cannot be liable for defamation for accurately reporting the allegations of chamber members because it is true that these third parties made the allegations of impropriety against Carter. Carter asserts that the Newspaper waived this issue because it was not presented to the trial court in its motion for summary judgment, but we disagree. The Newspaper argued in its motion for summary judgment that statements in the articles regarding allegations that had been made against Carter were substantially true. Although the Newspaper did not label the statements as "accurate reporting of allegations," it nevertheless presented the issue to the trial court. <i>See</i> TEX. R. CIV. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal."). The issue therefore has not been waived.</div>
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Carter next responds that because we have never recognized an allegation-reporting privilege, and because the dispute here is not a matter of public concern, the ordinary rules for defamation liability should apply, including equal liability for anyone who republishes defamatory material of an original speaker. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 61</a>(citing <a href="https://scholar.google.com/scholar_case?case=13855794774127926991&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations,</i> 413 U.S. 376, 386 (1973)</a>). The Legislature addressed this issue in 2015 by amending section 73.005 of the Civil Practice and Remedies Code to read, "In an action brought against a newspaper or other periodical or broadcaster, the defense [of truth] applies to an accurate reporting of allegations made by a third party regarding a matter of public concern." TEX. CIV. PRAC. & REM. CODE § 73.005(b). This amendment, however, does not apply to this dispute because it was passed after Carter filed this defamation suit against the Newspaper. <i>See</i> Act of May 15, 2015, 84th Leg., R.S., ch. 191, § 1, sec. 73.005(b), 2015 Tex. Gen. Laws 1260.</div>
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We are nevertheless urged by the Newspaper and an amicus<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3822059495295379235&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&scisbd=2&as_sdt=4,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> to adopt a parallel common law rule that would operate to shield the Newspaper from liability for accurately reporting the allegations of the chamber members. In <i>Neely,</i> we were asked to adopt a similar rule to "shield media defendants from defamation liability for publishing third-party allegations if the defendants show that the underlying allegations (1) were made, and (2) were accurately reported." <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;">418 S.W.3d at 64</a>. We declined to adopt such a rule, concluding instead that a genuine issue of material fact existed in that case as to whether the broadcast at issue accurately reported on an investigation. <i>Id.</i> at 65. We did not, however, "foreclose the possibility that the gist of some broadcasts may merely be allegation reporting, such that one measure for the truth of the broadcast could be whether it accurately relayed the allegations of a third party." <i>Id.</i></div>
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Both parties also cite <a href="https://scholar.google.com/scholar_case?case=9426417989298604867&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Global Relief Foundation, Inc. v. New York Times Co.,</i> 390 F.3d 973 (7th Cir. 2004),</a> as pertinent to whether the allegation-reporting privilege should apply here. In that case, Global Relief Foundation claimed that various news outlets defamed it by falsely reporting the charity financed terrorism around the time of the September 11 attacks. <i>Id.</i> at 975. The court found the gist of the defendants' publications was not that Global Relief was funding terrorism, but only that it was being investigated for such crimes. <i>Id.</i> at 986-87. The court rejected Global Relief's assertion that the defendants were required to prove the truth of the charges before reporting on the investigations. <i>Id.</i> at 987. Instead, it concluded that the defendants were entitled to summary judgment because all of the reports about the government's investigations were true or substantially true. <i>Id.</i> at 986-87.</div>
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The Newspaper argues that this case is similar to <i>Global Relief</i> because all the Newspaper did was report on allegations made by chamber members and that it should not be charged with proving those allegations as true before reporting on them. Carter responds that this case is distinguishable from <i>Global Relief</i> because there was no government investigation and the gist of the underlying allegations was not true.</div>
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Because we agree with the court of appeals that the reporting here went beyond merely restating the allegations of a third party and instead adopted a gist that the substance of the allegations was itself true, as we did in <i>Neely</i> we leave open the question of whether the common law recognizes a substantial truth defense for accurately reporting third-party allegations. <i>See</i> 567 S.W.3d at 19-20 (citing <a href="https://scholar.google.com/scholar_case?case=9426417989298604867&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Global Relief,</i> 390 F.3d at 983</a>). The Newspaper published several articles detailing allegations that Carter shifted funds to make the chamber appear profitable when it was not, shouted at board members who raised financial concerns, and even succeeded in removing some antagonistic members. In several of these articles the Newspaper stated, without attributing it as an allegation, that Carter's bonus was linked to the chamber's financial performance. The Newspaper then published an editorial on March 2 headlined "Chamber CEO's actions raise serious questions" and with a subheadline, "Funds were shifted that made a loss look like a profit, entitling CEO to a bonus." The editorial states that reports of "highly questionable stewardship of the financial affairs of the chamber by Carter" had been laid out in a series of news stories. The piece goes on to say that the news accounts describe "duplicitous dealings by Carter in his relations with the membership and the executive committee." <i>Id.</i> The editorial also states that in "an attempt to intimidate critics of his conduct," Carter removed two board members from their positions after they attempted to bring transparency and accountability to the chamber. The editorial briefly mentions that the "shifting of funds" allegation was made in Bentley's letter, but none of the other aforementioned statements were attributed to anyone as allegations. <i>See id.</i></div>
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We disagree with the Newspaper's claim that it was simply reporting allegations by third parties. The gist of the editorial was that the statements in the prior articles regarding Carter's shifting of funds for his own financial gain and intimidation of his critics were true, not that they were merely the accusations of others.</div>
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2. Fact Issue on Substantial Truth</h2>
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The Newspaper next contends that the court of appeals erred in finding a fact issue on whether the statements at issue were substantially true. Specifically, the Newspaper asserts that the court of appeals incorrectly found a fact issue (1) regarding Carter's entitlement to a bonus based on evidence that Carter's contract did not make his bonus dependent on the chamber's financial performance and (2) regarding the existence of accounting "deficiencies" in financial statements prepared by Carter based on an auditor's report prepared after the articles were published.</div>
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To establish the truth defense at the summary judgment phase, a defendant must show that the gist of the publication is substantially true. <a href="https://scholar.google.com/scholar_case?case=4782528697257982842&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>McIlvain v. Jacobs,</i> 794 S.W.2d 14, 16 (Tex. 1990)</a>. This requires consideration of whether, in the mind of an average reader, the alleged defamatory publication is more damaging to the plaintiff's reputation than a true statement would be. <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 63-64</a>; <a href="https://scholar.google.com/scholar_case?case=4782528697257982842&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>McIlvain,</i> 794 S.W.2d at 16</a> (citing 53 C.J.S. <i>Libel & Slander</i> § 109(a) (1987)). The gist here is that Carter shifted chamber funds for his own financial gain. The Newspaper concedes it reported that Carter's bonus was dependent on the chamber's financial performance but argues this was true according to Bentley's statements at executive committee meetings, Bentley's letter to the chamber board, and deposition testimony of the chamber's chairman. Carter responded to this claim by producing his 2007 employment contract amendments and claiming in his affidavit that under that contract, he was to receive a $10,000 "performance" bonus no matter the financial performance of the chamber. According to the Newspaper, it never reported that Carter's contract allowed for a bonus and therefore the contract is irrelevant to whether its reporting was substantially true. Moreover, the Newspaper asserts that Carter himself testified that his bonus "had some connection" to the financial performance of the chamber which in turn implicated his performance and the attainment of some financial goals.</div>
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But Carter's 2007 contract provided that his term of employment was to continue until December 31, 2008. It set out Carter's annual salary and provided that Carter was to be paid a performance bonus as soon as feasible after ratification of the contract which occurred on February 15, 2007. Nothing in the contract provided that the bonus was related to the financial performance of the chamber or provided for a subsequent bonus. In December of 2007, the executive committee began reviewing Carter's contract for an extension and a potential raise and bonus. Carter testified in a deposition that his performance bonus was not singularly linked to the financial performance of the chamber, but that it was a component.</div>
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The Newspaper reported that Carter shifted chamber funds to be entitled to a bonus. The evidence raised a fact question regarding whether this was more harmful to Carter's reputation than if the Newspaper had reported that Carter's prior contract entitled him to receive a flat bonus regardless of the financial state of the chamber and that Carter was under consideration for a subsequent bonus of which the chamber's financial performance would be a component. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 63-64</a>; <a href="https://scholar.google.com/scholar_case?case=4782528697257982842&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>McIlvain,</i> 794 S.W.2d at 16</a>.</div>
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The Newspaper also contends that the court of appeals erred in finding the independent auditor's report—issued months after the articles were published—created a fact issue as to the truth of whether the financial reports Carter prepared contained financial irregularities or inaccuracies. The Newspaper submits that the audit does not exonerate Carter in the matter and further asserts that its reports were substantially true because Carter admitted to the errors. The Newspaper cites <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Keller v. Wilson</i></a> for the proposition that we may not ignore relevant undisputed facts and must look to them in deciding whether the evidence creates a disputed fact issue. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;">168 S.W.3d 802, 824-25 (Tex. 2005)</a>.</div>
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The court of appeals found the auditor's report did not establish the truth or falsity of Bentley's accusations. 567 S.W.3d at 19. We agree. The auditor's report was ambiguous at best. It does not exonerate Carter; neither does it confirm the gist of Bentley's accusations. The report says, "The staff-prepared financial statements had material misstatements. The misstatements are due to omissions, accounting applications and or lack of current accounting requirements." The report also concludes "the financial statements" were corrected, and the auditor concluded that the statements "present fairly, in all material respects, the financial position of the Corpus Christi Chamber of Commerce as of December 31, 2007."</div>
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But even agreeing with the Newspaper that the audit does not by itself create a fact issue as to the substantial truth of its reporting, we still agree with the court of appeals that there is a fact issue that must be resolved by a jury. While Carter admits he did not initially confirm the proper accounting of his salary deferral and that he oversaw a transfer of funds from the building fund to the chamber's operating expenses, he claimed his actions were consistent with the modified accrual accounting method and that he properly transferred funds. That Carter did so illegally or to be entitled to a bonus is not established as a matter of undisputed fact in this record. Put another way, Carter may have played a part in accounting errors that were later corrected, but that does not establish a fraudulent or criminal intent, which was the gist of the Newspaper's reporting. <i>See</i> 567 S.W.3d at 18 (citing TEX. PENAL CODE §§ 31.03, 32.32). Thus, we agree with the court of appeals that the Newspaper was not entitled to summary judgment because it failed to conclusively prove the substantial truth of the Newspaper's alleged defamatory statements.</div>
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C. Protected Opinion</h2>
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Finally, the Newspaper argues that the editorial published on March 2 contained non-actionable opinion, not statements of fact, and the court of appeals erred in holding otherwise. "[S]tatements that are not verifiable as false cannot form the basis of a defamation claim." <a href="https://scholar.google.com/scholar_case?case=15976729297122851464&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neely,</i> 418 S.W.3d at 62</a> (citing <a href="https://scholar.google.com/scholar_case?case=7582860956470530700&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Milkovich v. Lorain Journal Co.,</i> 497 U.S. 1, 21-22 (1990)</a>). Therefore, in distinguishing between fact (verifiable as false) and opinion, we focus on a statement's verifiability. <a href="https://scholar.google.com/scholar_case?case=14806149054223605379&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bentley v. Bunton,</i> 94 S.W.3d 561, 581 (Tex. 2002)</a>. But we note that even if a statement is verifiable as false, we consider the entire context of the statement which may disclose that "it is merely an opinion masquerading as fact." <a href="https://scholar.google.com/scholar_case?case=7339535568853282923&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Dall. Morning News, Inc. v. Tatum,</i> 554 S.W.3d 614, 639 (Tex. 2018)</a>. The question of whether a statement is non-actionable opinion is a question of law. <i>Id.</i> at 625 ("Meaning is a question of law."); <a href="https://scholar.google.com/scholar_case?case=14806149054223605379&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bentley,</i> 94 S.W.3d at 579</a> (discussing meaning in the context of determining whether a publication is a constitutionally protected expression of opinion).</div>
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The Newspaper claims the statements in the editorial are subjective and not capable of objective proof as true or false. The Newspaper compares statements in the editorial such as Carter's "highly questionable stewardship of the financial affairs of the chamber" to statements that a court found to be constitutionally protected opinion—such as that a former Senior Ranger captain of the Texas Rangers "was a `blight on law enforcement.'" <i>See </i><a href="https://scholar.google.com/scholar_case?case=1002776968846616985&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&as_sdt=4,44" style="color: #660099;"><i>Associated Press v. Cook,</i> 17 S.W.3d 447, 454 (Tex. App.-Houston [1st Dist.] 2000, no pet.)</a> (concluding that the statements about the Texas Ranger were "little more than name calling"). Although some statements in the editorial are assertions of opinion, the editorial here said much more. First, the subheadline states "Funds were shifted that made a loss look like a profit, entitling CEO to a bonus." The editorial goes on to state that the prior news reports "describe duplicitous dealings by Carter in his relations with the membership and the executive committee." The editorial continues that "[t]wo executive committee members . . . were removed from the committee by Carter after they attempted to bring transparency and accountability to the finances," and that their removal was "nothing less than an attempt to intimidate critics of [Carter's] conduct." These statements are verifiable as false and are not protected opinion.</div>
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Further, the context of the editorial indicates that it is not simply opinion masquerading as fact. Although the editorial states that "[t]he business side of the newspaper and the opinions expressed in this editorial page space are separate," the editorial also stated that a series of news stories had laid out reports of "highly questionable stewardship of the financial affairs of the chamber by Carter," indicating that the statements in the editorial were supported by the prior reporting. We agree with the court of appeals that the editorial is not protected opinion.</div>
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While the United States and Texas Constitutions guarantee the people a right to a free press, people who misuse that liberty may be held accountable. The Newspaper claims it proved as a matter of law that the articles at issue were substantially true, but we agree with the court of appeals that the evidence raised a fact question on that issue. Further, the Newspaper did not prove it was entitled to summary judgment on the ground that the editorial was protected opinion. Accordingly, we affirm the judgment of the court of appeals and remand the case to the trial court.</div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3822059495295379235&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&scisbd=2&as_sdt=4,44#r[1]" name="[1]" style="color: #660099;">[1]</a> Carter's suit also joined the chamber, Bentley and other former executive committee members as defendants. The court of appeals found the former executive committee members were entitled to summary judgment and rendered judgment for them in that appeal. <i>Id.</i> at *7-8. Bentley did not file a brief so the court dismissed his appeal for want of prosecution. <i>Id.</i> at *1 n.1. Bentley was no longer listed as a party in the trial court after remand. The chamber has not been a party to these appeals.</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3822059495295379235&q=Scripps+NP+Operating+LLC+v.+Carter&hl=en&scisbd=2&as_sdt=4,44#r[2]" name="[2]" style="color: #660099; text-decoration: underline;">[2]</a> An amicus brief was submitted by Texas Press Association, Texas Association of Broadcasters, and Freedom of Information Foundation of Texas.</span></div>
________________________________________<br />
John P. Devine<br />
Justice<br />
OPINION DELIVERED: May 24, 2019<br />
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THE SUPREME COURT OF TEXAS</div>
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Orders Pronounced May 24, 2019</div>
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ORDERS ON CAUSES</div>
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17-0046</div>
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SCRIPPS NP OPERATING, LLC, A WISCONSIN LIMITED LIABILITY COMPANY, SUCCESSOR IN INTEREST TO SCRIPPS TEXAS NEWSPAPERS, LP D/B/A CORPUS CHRISTI CALLER-TIMES v. TERRY CARTER; from Nueces County; 13th Court of Appeals District (13-15-00506-CV, 567 SW3d 1, 12-21-16)</div>
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<span class="a70" style="color: black; font-size: 13pt;">The Court affirms the court of appeals' judgment and remands the case to the trial court.<br /><br />Justice Devine delivered the <a data-udi="umb://media/f551ea6d83a84d4f9d13df367e4e4bbd" href="http://www.txcourts.gov/media/1444140/170046.pdf" rel="noopener noreferrer" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="170046">opinion of the Court</a>.</span><br />
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<a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0046" style="color: #551a8b; text-decoration-line: none;" title="17-0046 Electronic Briefs">View Electronic Briefs </a>| <a href="http://www.texasbarcle.com/CLE/TSCPlayVideo.asp?sCaseNo=17-0046" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="17-0046 Video">Oral Argument</a></div>
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<br />
<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-22311548177428230402019-05-14T10:27:00.003-05:002019-05-14T11:52:27.931-05:00What is the remedy for breach of a Rule 11 settlement agreement? <br />
Generally, the remedy for a breach of a Rule 11 agreement is
a breach-of-contract claim filed by a party. <i>See In re Build by Owner, LLC</i>, No. 01- 11-00513-CV, 2011 WL 4612790, at *7 (Tex. App.—Houston [1st Dist.] Oct. 6,
2011, no pet.) (mem. op.) (holding Rule 11 agreement enforced by breach-of contract claim); s<i>ee also Padilla v. LaFrance</i>, 907 S.W.2d 454, 460 (Tex. 1995)
(holding courts construe Rule 11 agreements as any other contract).<br />
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SOURCE: HOUSTON COURT OF APPEALS - 01-17-00364-CV - 5/14/2019<br />
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Texas Rule of Civil Procedure 11 provides that,</div>
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Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.</blockquote>
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<span style="color: #222222; font-family: arial, sans-serif;"><span style="font-size: 15px;">TEX. R. CIV. P. 11. Rule 11 agreements "are contracts relating to litigation." <i>Trudy's Tex. Star, Inc. v. City of Austin</i>, 307 S.W.3d 894, 914 (Tex. App.-Austin 2010, no pet.). "The purpose of Rule 11 is to ensure that agreements of counsel affecting the interests of their clients are not left to the fallibility of human recollection and that the agreements themselves do not become sources of controversy." <i>ExxonMobil Corp. v. Valence Operating Co</i>., 174 S.W.3d 303, 309 (Tex. App.-Houston [1st Dist.] 2005, pet. denied). </span></span><br />
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Trial courts have a ministerial duty to enforce valid Rule 11 agreements. <i>Id.</i></div>
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IN RE BUILD BY OWNER, LLC, Relator.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=16254792357639866929&as_sdt=2&hl=en" style="color: #660099;">No. 01-11-00513-CV.</a></center>
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<b>Court of Appeals of Texas, First District, Houston.</b></div>
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Opinion issued October 6, 2011.</center>
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Panel consists of Justices Keyes, Higley, and Massengale.</div>
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MEMORANDUM OPINION</h2>
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EVELYN V. KEYES, Justice.</div>
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Relator, Build by Owner, LLC ("Build by Owner"), filed a petition for writ of mandamus seeking to compel the trial court to vacate its order granting real parties in interest John-Baptist and Ellen Sekumade's motion to transfer venue from Galveston County to Harris County.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Build by Owner contends that the trial court abused its discretion in granting the motion because, at a prior hearing before the original trial judge, Build by Owner and Sekumade allegedly entered into a Rule 11 agreement providing that venue would remain in Galveston County because Sekumade sought affirmative relief from the Galveston County trial court on a counterclaim.</div>
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We deny the petition for writ of mandamus.</div>
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Background</h2>
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In 2008, Sekumade and Build by Owner entered into a contract for the construction of a house. On June 22, 2009, Build by Owner sued Sekumade for breach of contract, alleging that Sekumade "failed to provide payment for [Build by Owner's] work and reimbursement of labor and materials provided in the construction of [Sekumade's] residence." In his original answer, Sekumade moved to transfer venue from Galveston County to either Brazoria County—where Sekumade resided—or Harris County—where Sekumade signed the contract at issue—and also asserted a counterclaim for breach of contract.<br />
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During the course of the litigation, Sekumade served Build by Owner with discovery requests, including requests for admissions, requests for production of documents, and interrogatories. Sekumade also moved for summary judgment on his breach of contract counterclaim, contending, among other things, that Build by Owner failed to either fully or substantially perform its contractual obligations. He did not make this motion subject to his motion to transfer venue. Sekumade later amended his pleadings to drop his breach of contract claim and to assert a claim for violation of the Deceptive Trade Practices Act ("DTPA").<br />
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On April 22, 2010, after a lengthy discovery battle, the trial court heard argument on Build by Owner's motion for discovery sanctions and motion to strike Sekumade's pleadings. At the beginning of the hearing, the trial court asked the parties which motion they wanted to address first. Sekumade stated, without previous reference to his motion to transfer venue:</div>
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If I may, we filed a Motion to Transfer Venue. We would probably pass that motion because we have filed a counter-suit based on a DTPA claim. So, that probably will be less the Court has to consider.</blockquote>
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After the parties and the trial court discussed Build by Owner's discovery-related motions, the trial court asked if there were any other matters to consider. Sekumade said, "As I stated earlier, Your Honor, we had a Motion to Transfer Venue. Because we had filed a DTPA claim, we're going to pass that motion."</div>
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Shortly thereafter, the parties and the trial court had the following exchange:</blockquote>
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[Build by Owner]: Second of all, based on Counsel's statement about the motion to transfer, it appears that we've entered into a Rule 11 Agreement in open court on the record that the case is going to be here in Galveston County as the county of mutually agreed venue and jurisdiction before this Honorable Court. So, then, rather than [d]efense counsel saying we're passing the hearing, I think what he said, based on his DTPA counterclaim, is that he's agreed and has purposefully availed himself that we have a Rule 11 agreement and I would like that clarified.</blockquote>
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The Court: Mr. Sekumade, that's the Court's interpretation of that also. Is that incorrect?</blockquote>
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Sekumade: In reference to the—</blockquote>
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The Court: To the Motion to Transfer Venue, you're essentially waiving that. If you say that "I want the Court to rule on my DTPA case," you're availing this Court of this jurisdiction.</blockquote>
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Sekumade: That's correct, Your Honor. That's why I stated—</blockquote>
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The Court: So, it is of record, then.</blockquote>
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[Build by Owner]: Then that's mutually agreeable.</blockquote>
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The next day, the trial court issued an order granting Build by Owner's motion to compel. The court ordered Sekumade to pay $3,000 in attorney's fees to Build by Owner's counsel within thirty days and to fully comply with all outstanding discovery requests within forty-five days or the court would require payment of an additional $10,000 in discovery sanctions and completion of forty hours of community service, and it would strike Sekumade's pleadings. This order did not mention Sekumade's motion to transfer venue.<br />
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Approximately one month later, Sekumade again amended his answer, moved to transfer venue to Brazoria or Harris County, and asserted a counterclaim for breach of contract. In response to this motion to transfer venue, Build by Owner argued that, at the April 22, 2010 hearing, it and Sekumade entered into a Rule 11 agreement providing that venue would remain in Galveston County. In reply, Sekumade argued that proper venue could not be waived pursuant to Civil Practice and Remedies Code section 15.035, the venue provision that governed this dispute, and that Build by Owner never presented any evidence demonstrating that venue was proper in Galveston County or that venue was improper in Brazoria or Harris County. Sekumade also denied that the parties ever entered into a Rule 11 agreement regarding venue at the April 22, 2010 hearing. The trial court explicitly denied Sekumade's motion to transfer venue on August 2, 2010.<br />
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After Sekumade failed to pay Build by Owner's counsel within the allotted thirty days after the April 23, 2010 order, Build by Owner moved for enforcement of the order and for the imposition of sanctions on Sekumade for his failure to comply. At a hearing on September 2, 2010, the trial court granted Build by Owner's motion to enforce and ordered Sekumade to pay $13,000 to Build by Owner's counsel by 5:00 p.m. on September 10, 2010, ordered Sekumade to complete forty hours of community service, and struck Sekumade's pleadings.<br />
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Sekumade subsequently filed a petition for writ of mandamus in this Court.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> In addition to complaining about Judge Ellisor's discovery rulings and his actions allegedly preventing Sekumade from filing a motion to compel arbitration, Sekumade also complained that, by making a statement at the April 22, 2010 hearing that Sekumade waived his motion to transfer venue because he filed a counterclaim, Judge Ellisor "stifled" and "dissuaded" him from pursuing his motion and that Judge Ellisor erroneously denied his motion to transfer venue. In its response to Sekumade's petition for writ of mandamus, Build by Owner informed this Court that Sekumade had filed a civil rights suit against Judge Ellisor and his court coordinator in the Southern District of Texas. As a result, the Administrative Judge of Galveston County transferred the underlying lawsuit, <i>Build by Owner, LLC v. John-Baptist Sekumade and Ellen Carol Sekumade,</i> No. 09-CV-1019, from the 122nd District Court of Galveston County to the 56th District Court of Galveston County. The Administrative Judge then transferred the underlying case back to the 122nd District Court, but it appointed another judge, the Honorable Hugo Touchy, to hear the dispute.<br />
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On March 10, 2011, this Court issued an order abating Sekumade's petition for writ of mandamus pursuant to Texas Rule of Appellate Procedure 7.2(b) to allow Judge Touchy to reconsider Judge Ellisor's rulings on Sekumade's motion to transfer venue and Build by Owner's motion to compel and motion to strike Sekumade's pleadings. <i>See</i> TEX. R. APP. P. 7.2(b); <a href="https://scholar.google.com/scholar_case?case=8246181617464293278&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Baylor Med. Ctr. at Garland,</i> 280 S.W.3d 227, 228 (Tex. 2008)</a> ("Mandamus will not issue against a new judge for what a former one did. . . . As a new judge now presides over the trial court, [Texas Rule of Appellate Procedure] 7.2 requires abatement of this original proceeding to allow the successor to reconsider the order.").<br />
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At the hearing before Judge Touchy, Build by Owner informed the court of Sekumade's two statements from the April 22, 2010 hearing informing Judge Ellisor that he was "passing" his motion to transfer venue because of his DTPA counterclaim and of the Rule 11 agreement discussion. Sekumade argued:</div>
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At no time was I party to any Rule 11 Agreement. The record does not reflect it. All I said was I will pass the motion because the Court was telling me I had forfeited my rights to waive venue. So, as [Build by Owner's counsel] properly read, I passed my motion. I did not waive my right. [Build by Owner's counsel] waived my right for me. He acted as my counsel and came up with a Rule 11 Agreement between himself and the Court and that's how we got to this Rule 11 argument.</blockquote>
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At the close of the hearing, the trial court granted Sekumade's motion to transfer venue to Harris County, reasoning that "[Sekumade] never voluntarily waived his plea to transfer the venue willfully."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#[3]" name="r[3]" style="color: #660099;">[3]</a></sup></div>
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Standard of Review</h2>
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Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal. <a href="https://scholar.google.com/scholar_case?case=7027568462900971293&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Odyssey Healthcare, Inc.,</i> 310 S.W.3d 419, 422 (Tex. 2010) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Team Rocket, L.P.,</i> 256 S.W.3d 257, 259 (Tex. 2008)</a> ("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."). A trial court commits a clear abuse of discretion when its action is "so arbitrary and unreasonable as to amount to a clear and prejudicial error of law." <a href="https://scholar.google.com/scholar_case?case=16258163734193041053&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re CSX Corp.,</i> 124 S.W.3d 149, 151 (Tex. 2003) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=8103615984452897368&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Stern,</i> 321 S.W.3d 828, 837 (Tex. App.-Houston [1st Dist.] 2010, no pet.)</a>. A trial court has no discretion in determining what the law is or in applying the law to the particular facts. <a href="https://scholar.google.com/scholar_case?case=6207522956368226204&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Prudential Ins. Co. of Am.,</i> 148 S.W.3d 124, 135 (Tex. 2004)</a>.</div>
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Motion to Transfer Venue</h2>
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Although mandamus review is available to enforce the Civil Practice and Remedies Code's mandatory venue provisions, a party generally may not seek mandamus review of a permissive venue determination.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#[4]" name="r[4]" style="color: #660099;">[4]</a></sup> <i>See</i> TEX. CIV. PRAC. & REM. CODE ANN. § 15.0642 (Vernon 2002) ("A party may apply for a writ of mandamus with an appellate court to enforce the mandatory venue provisions of [Chapter 15.]"); <a href="https://scholar.google.com/scholar_case?case=1235796317279377094&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Mo. Pac. R.R. Co.,</i> 998 S.W.2d 212, 215-16 (Tex. 1999)</a> ("We reiterated in early 1995 that 2017Texas law is quite clear that venue determinations are not reviewable by mandamus.' But a few months later, the Legislature enacted section 15.0642 authorizing parties to seek mandamus 2017to enforce the mandatory venue provisions,' along with a timetable for seeking mandamus.") (quoting <a href="https://scholar.google.com/scholar_case?case=14608267478873029251&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Polaris Inv. Mgmt. Corp. v. Abascal,</i> 892 S.W.2d 860, 862 (Tex. 1995) (per curiam)</a>).<br />
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The Texas Supreme Court has held that "venue determinations generally are incidental trial rulings that are correctable on appeal." <a href="https://scholar.google.com/scholar_case?case=18068686660099650382&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bridgestone/Firestone, Inc. v. Thirteenth Court of Appeals,</i> 929 S.W.2d 440, 441 (Tex. 1996) (per curiam)</a>(citing <a href="https://scholar.google.com/scholar_case?case=9091328426411787040&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montalvo v. Fourth Court of Appeals,</i> 917 S.W.2d 1, 2 (Tex. 1995) (per curiam)</a>); <i>see </i><a href="https://scholar.google.com/scholar_case?case=8976257930155929631&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Masonite Corp.,</i> 997 S.W.2d 194, 197 (Tex. 1999)</a> ("[V]enue determinations as a rule are not reviewable by mandamus."); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Team Rocket,</i> 256 S.W.3d at 261</a> ("The only remedy afforded by the Legislature when a party loses a venue hearing is to proceed with trial in the transferee county and appeal any judgment from that court on the basis of alleged error in the venue ruling."). "[T]he mere fact that a trial court's erroneous order will result in an eventual reversal on appeal does not mean that a trial will be a 2017waste of judicial resources' . . . . To hold otherwise would mean that virtually any reversible error by a trial court would be a proper subject for mandamus review." <a href="https://scholar.google.com/scholar_case?case=18229696397399244202&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re City of Irving,</i> 45 S.W.3d 777, 779 (Tex. App.-Texarkana 2001, orig. proceeding)</a>.<br />
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The Texas Supreme Court has also held, however, that mandamus review of permissive venue determinations is appropriate in "extraordinary circumstances." <a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Team Rocket,</i> 256 S.W.3d at 262</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=8976257930155929631&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Masonite Corp.,</i> 997 S.W.2d at 197</a> ("But on rare occasions an appellate remedy, generally adequate, may become inadequate because the circumstances are exceptional. Specifically, a trial court's action can be 2017with such disregard for guiding principles of law that the harm . . . becomes irreparable.'") (quoting <a href="https://scholar.google.com/scholar_case?case=1115837252618116973&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nat'l Indus. Sand Ass'n v. Gibson,</i>897 S.W.2d 769, 771 (Tex. 1995)</a>); <a href="https://scholar.google.com/scholar_case?case=18068686660099650382&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bridgestone/Firestone,</i> 929 S.W.2d at 441</a>(noting that court had previously granted mandamus relief when trial court failed to afford venue movant reasonable opportunity to supplement venue record). The court has "granted mandamus relief in the context of Rule 87 venue rulings where . . . the trial court made no effort to follow the rule." <a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Team Rocket,</i> 256 S.W.3d at 262</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=2286998342048927534&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Woods v. Alvarez,</i> 925 S.W.2d 119, 122 (Tex. App.-Corpus Christi 1996)</a> (noting that mandamus relief is available when "the trial court fails to follow the procedural requirements of Texas Rule of Civil Procedure 87 concerning each party's right to sufficient notice of the venue hearing"), <i>overruled on other</i> <i>grounds, </i><a href="https://scholar.google.com/scholar_case?case=18068686660099650382&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bridgestone/Firestone,</i> 929 S.W.2d at 442</a>; <a href="https://scholar.google.com/scholar_case?case=5245772304170373478&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Cone v. Gregory,</i> 814 S.W.2d 413, 414-15 (Tex. App.-Houston [1st Dist.] 1991, orig. proceeding)</a> (listing as exceptions to general rule of no mandamus relief for venue determinations: (1) trial court has mandatory, ministerial duty to transfer, (2) trial court issues a void order on venue, and (3) trial court violates mandatory notice procedure).<br />
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In <i>Team Rocket,</i> for example, the plaintiffs originally filed suit in Harris County for, among other things, negligence arising out of a fatal plane accident that occurred in Fort Bend County. <a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;">256 S.W.3d at 258</a>. Team Rocket moved to transfer venue to Williamson County, its principal place of business, and the trial court granted the motion. <i>Id.</i> at 259. The plaintiffs nonsuited and then immediately filed an identical suit in Fort Bend County. <i>Id.</i> The Fort Bend County trial court denied Team Rocket's motion to transfer venue to Williamson County. <i>Id.</i> The Texas Supreme Court found that "extraordinary circumstances" for granting mandamus review of a non-mandatory venue determination existed, and reasoned that when "a trial court improperly applied the venue statute and issued a ruling that permits a plaintiff to abuse the legal system by refiling his case in county after county, which would inevitably result in considerable expense to taxpayers and defendants, requiring defendants to proceed to trial in the wrong county is not an adequate remedy." <i>Id.</i>at 262; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=8976257930155929631&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Masonite Corp.,</i> 997 S.W.2d at 198</a> (finding "exceptional circumstances" present when trial court denied motion to transfer venue to defendant's requested county and "on its own motion" severed claims into sixteen different cases and transferred cases to counties of plaintiffs' residence).<br />
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Build by Owner contends that such exceptional circumstances justifying mandamus relief exist in this case because Judge Touchy, in refusing to enforce the parties' Rule 11 agreement on venue, abused his discretion by incorrectly applying Texas Rule of Civil Procedure 87(3)(b), which provides that the trial court shall determine a venue motion "on the basis of the pleadings [and] any stipulations made by and between the parties. . . ." <i>See</i> TEX. R. CIV. P. 87(3)(b).</div>
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Texas Rule of Civil Procedure 11 provides that,</div>
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Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.</blockquote>
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TEX. R. CIV. P. 11. Rule 11 agreements "are contracts relating to litigation." <a href="https://scholar.google.com/scholar_case?case=16902239873867294543&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Trudy's Tex. Star, Inc. v. City of Austin,</i> 307 S.W.3d 894, 914 (Tex. App.-Austin 2010, no pet.)</a>. "The purpose of Rule 11 is to ensure that agreements of counsel affecting the interests of their clients are not left to the fallibility of human recollection and that the agreements themselves do not become sources of controversy." <a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil Corp. v. Valence Operating Co.,</i> 174 S.W.3d 303, 309 (Tex. App.-Houston [1st Dist.] 2005, pet. denied)</a>. Trial courts have a ministerial duty to enforce valid Rule 11 agreements. <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=11276502804452986208&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>EZ Pawn Corp. v. Mancias,</i> 934 S.W.2d 87, 91 (Tex. 1996)</a> and <a href="https://scholar.google.com/scholar_case?case=17092148823204540064&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Fed. Lanes, Inc. v. City of Houston,</i> 905 S.W.2d 686, 690 (Tex. App.-Houston [1st Dist.] 1995, writ denied)</a>).</div>
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"[I]t is not sufficient that a party's consent to a Rule 11 agreement may have been given at one time; consent must exist at the time that judgment is rendered." <i>Id.; see also </i><a href="https://scholar.google.com/scholar_case?case=10014602994341512228&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Padilla v. LaFrance,</i> 907 S.W.2d 454, 461 (Tex. 1995)</a> ("[C]onsent must exist at the very moment the court undertakes to make the agreement the judgment of the court."). A party may revoke his consent to a Rule 11 agreement at any time before rendition of judgment. <a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil,</i> 174 S.W.3d at 309</a>. "A court is not precluded from enforcing a Rule 11 agreement once it has been repudiated by one of the parties, but an action to enforce a Rule 11 agreement to which consent has been withdrawn must be based on proper pleading and proof." <i>Id.; see also </i><a href="https://scholar.google.com/scholar_case?case=10014602994341512228&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Padilla,</i> 907 S.W.2d at 462</a> ("An action to enforce a settlement agreement [pursuant to Rule 11], where consent is withdrawn, must be based on proper pleading and proof."). If a party revokes his consent to a Rule 11 agreement, the opposing party may attempt to enforce the Rule 11 agreement under contract law. <a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil,</i> 174 S.W.3d at 309</a>; <i>see </i><a href="https://scholar.google.com/scholar_case?case=3479904285993693673&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Staley v. Herblin,</i> 188 S.W.3d 334, 336 (Tex. App.-Dallas 2006, pet. denied)</a> ("[W]here consent [to a Rule 11 agreement] has been withdrawn, a court may not render judgment on the settlement agreement, but may enforce it only as a written contract. Accordingly, the party seeking enforcement must pursue a separate breach of contract claim which is subject to the normal rules of pleading and proof."); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=2175849891457747643&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Mantas v. Fifth Court of Appeals,</i> 925 S.W.2d 656, 658 (Tex. 1996) (per curiam)</a> (holding same).<br />
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If fact issues are raised or a party has withdrawn consent, "the only method available for enforcing a [Rule 11] agreement is through summary judgment or trial." <a href="https://scholar.google.com/scholar_case?case=3479904285993693673&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Staley,</i> 188 S.W.3d at 336</a>. The non-breaching party should raise its claim to enforce the disputed agreement "through an amended pleading or counterclaim asserting breach of contract." <i>Id.; see also </i><a href="https://scholar.google.com/scholar_case?case=10014602994341512228&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Padilla,</i> 907 S.W.2d at 462</a> (approving of Padilla's counterclaim seeking enforcement of Rule 11 agreement); <a href="https://scholar.google.com/scholar_case?case=18367899212015936105&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Baylor College of Med. v. Camberg,</i> 247 S.W.3d 342, 348 (Tex. App.-Houston [14th Dist.] 2008, pet. denied)</a> ("[N]othing in the record indicates that Baylor employed a proper procedure for enforcing a Rule 11 settlement agreement once the parties proffered differing interpretations of the agreement. For example, Baylor did not file a motion for summary judgment seeking interpretation of the Rule 11 agreement."). "To allow enforcement of a disputed [Rule 11] agreement simply on motion and hearing would deprive a party of the right to be confronted by appropriate pleadings, assert defenses, conduct discovery, and submit contested fact issues to a judge or jury." <a href="https://scholar.google.com/scholar_case?case=3479904285993693673&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Staley,</i> 188 S.W.3d at 336-37</a>.<br />
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Build by Owner contends that it and Sekumade entered into an enforceable Rule 11 agreement at the April 22, 2010 hearing before Judge Ellisor that venue would remain in Galveston County. Sekumade contends that a Rule 11 agreement never existed between the parties and that, if one did so exist, he revoked his consent by filing a second motion to transfer venue and informing Judge Ellisor that he did not consent to venue in Galveston County.<br />
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Even if Build by Owner and Sekumade entered into a Rule 11 agreement at the April 22, 2010 hearing agreeing that venue was proper in Galveston County, Sekumade revoked his consent to this agreement before either Judge Ellisor or Judge Touchy ruled on his venue motion. The trial court issued an order on April 23, 2010, solely relating to discovery sanctions against Sekumade; the order did not reference Sekumade's motion to transfer venue or any alleged Rule 11 agreement on venue. On May 28, 2010, Sekumade filed a second motion to transfer venue, seeking to transfer the case to Brazoria or Harris County. After Build by Owner responded to the venue motion and argued that the trial court should deny the motion based on the purported Rule 11 agreement, Sekumade argued, among other things, that he did not enter into a Rule 11 agreement on venue at the April 22, 2010 hearing. Sekumade repeatedly argued that venue was proper in Brazoria or Harris County, not Galveston County.<br />
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Judge Ellisor denied Sekumade's venue motion on August 2, 2010. Sekumade then sought mandamus relief from this ruling, among other rulings, in this Court. After the Administrative Judge of Galveston County assigned Judge Touchy to hear the underlying dispute, we abated Sekumade's mandamus petition for Judge Touchy to reconsider Judge Ellisor's rulings on the discovery sanctions issue and Sekumade's venue motion. <i>See</i> TEX. R. APP. P. 7.2(b). Judge Touchy ultimately agreed that Sekumade did not "voluntarily waive[] his plea to transfer the venue willfully" and transferred venue to Harris County on April 11, 2011.<br />
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Build by Owner never filed an amended pleading, counterclaim for breach of contract, or motion to enforce the Rule 11 agreement.<br />
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Because Sekumade revoked any consent to the purported Rule 11 agreement before Judge Touchy ruled on his motion to transfer venue, consent did not exist at the time the trial court decided the issue, and, therefore, the court could not have rendered an agreed decision on venue. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10014602994341512228&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Padilla,</i> 907 S.W.2d at 461</a> (holding that, for agreed judgment, "consent must exist at the very moment the court undertakes to make the agreement the judgment of the court"); <a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil,</i> 174 S.W.3d at 309</a> ("[I]t is not sufficient that a party's consent to a Rule 11 agreement may have been given at one time; consent must exist at the time that judgment is rendered."). Although a trial court may not render an agreed judgment when one party has withdrawn his consent to a Rule 11 agreement, the trial court may still enforce the agreement as a binding contract, but only upon "proper pleading and proof." <i>See </i><a href="https://scholar.google.com/scholar_case?case=10014602994341512228&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Padilla,</i> 907 S.W.2d at 462</a>; <a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil,</i> 174 S.W.3d at 309</a>. The party seeking to enforce the Rule 11 agreement must file a separate breach of contract claim, and the alleged breaching party must be afforded the opportunity to assert defenses, conduct discovery, and submit contested fact issues, if any, to a judge or jury. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3479904285993693673&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Staley,</i> 188 S.W.3d at 336-37</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=14070573006860324326&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>ExxonMobil,</i> 174 S.W.3d at 309</a>("In such a case [when a party withdraws consent to a Rule 11 agreement], a party may seek to enforce the agreement under contract law."). Because Build by Owner never attempted to enforce the Rule 11 agreement by pursuing a separate breach of contract claim, we conclude that the trial court did not abuse its discretion in refusing to enforce the disputed agreement. <i>See </i><a href="https://scholar.google.com/scholar_case?case=18367899212015936105&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Camberg,</i> 247 S.W.3d at 348</a>(holding that party seeking enforcement of Rule 11 agreement did not employ "proper procedure" for enforcing when parties offered different interpretations of agreement).<br />
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We hold, therefore, that Build by Owner has not established that this case involves the "extraordinary circumstances" necessary to depart from the general rule that permissive venue determinations are not reviewable by mandamus. <i>See </i><a href="https://scholar.google.com/scholar_case?case=9464547285077735613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Team Rocket,</i> 256 S.W.3d at 262</a>.</div>
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Build by Owner further contends that mandamus review of Judge Touchy's venue ruling is appropriate because "[t]his Court is already exercising its mandamus jurisdiction based on [Sekumade's] petition challenging Judge Ellisor's rulings on his motion for sanctions and motion for transfer of venue" and cites the Texas Supreme Court's decision in <a href="https://scholar.google.com/scholar_case?case=10591039786654184436&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>General Motors Corp. v. Gayle,</i> 951 S.W.2d 469 (Tex. 1997),</a> for the proposition that an appellate court may review an issue on mandamus that may ordinarily be reviewable only on appeal—such as an incidental trial ruling—if the court is already addressing another issue for which mandamus review is appropriate. In <i>Gayle,</i> the court noted that two of the issues presented—denial of a jury trial and denial of a motion for continuance—were generally not appropriate for mandamus review because parties had an adequate appellate remedy, but it held that that particular case presented "special circumstances" because mandamus review was appropriate for another issue that had been presented to the court. <i>Id.</i> at 477. The court concluded that "the interests of judicial economy dictate that [it] should also remedy the trial court's denial of the right of jury trial by mandamus." <i>Id.</i></div>
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This case, however, does not present such special circumstances. Judge Touchy's rulings on Build by Owner's discovery motions and Sekumade's venue motion vacated Judge Ellisor's initial rulings. Thus, Sekumade's original petition for writ of mandamus is moot. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8246181617464293278&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Baylor Med. Ctr.,</i> 280 S.W.3d at 228</a>. Because the parties have presented no other issue that is proper for us to review by mandamus, we will not exercise our mandamus jurisdiction to review Judge Touchy's venue ruling.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#[5]" name="r[5]" style="color: #660099;">[5]</a></sup></div>
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Conclusion</h2>
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We deny the petition for writ of mandamus.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#r[1]" name="[1]" style="color: #660099;">[1]</a> The Honorable Hugo Touchy, Judge of the 122nd District Court of Galveston County, Texas, Respondent. The underlying lawsuit is <i>Build by Owner, LLC v. John-Baptist Sekumade and Ellen Carol Sekumade,</i> No. 09-CV-1019 (122nd Dist. Ct., Galveston County, Tex.).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#r[2]" name="[2]" style="color: #660099;">[2]</a> <i>See In re John-Baptist Sekumade and Ellen Carol Sekumade,</i> No. 01-10-00817-CV (Tex. App.-Houston [1st Dist.] Oct. 6, 2011, orig. proceeding) (mem. op.).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#r[3]" name="[3]" style="color: #660099;">[3]</a> Judge Touchy also granted Build by Owner's motion to compel and ruled that Sekumade had twenty days to comply with all written discovery requests or the court would strike his pleadings. The trial court awarded Build by Owner's counsel $4,000 in attorney's fees to be included in the final judgment. Neither Build by Owner nor Sekumade complain of Judge Touchy's discovery rulings.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#r[4]" name="[4]" style="color: #660099;">[4]</a> The venue statute applicable here, Civil Practice and Remedies Code section 15.035(b), is a permissive venue provision. TEX. CIV. PRAC. & REM. CODE ANN. § 15.035(b) (Vernon 2002). This statute provides that, "[i]n an action founded on a contractual obligation of the defendant to pay money arising out of or based on a consumer transaction for goods [or] services . . . intended primarily for personal, family, household, or agricultural use, suit by a creditor on or by reason of the obligation may be brought against the defendant either in the county in which the defendant in fact signed the contract or in the county in which the defendant resides when the action is commenced." <i>Id.</i> It is undisputed that Sekumade signed the contract in Harris County and that he resided in Brazoria County when Build by Owner filed suit against him. Other than its Rule 11 agreement and general waiver contentions, Build by Owner has not, at any point, presented arguments or evidence for why Galveston County is a county of proper venue under section 15.035(b). <i>See</i> TEX. R. CIV. P. 87(2)(a) ("A party who seeks to maintain venue of the action in a particular county . . . has the burden to make proof . . . that venue is maintainable in the county of suit.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13932353772743337522&q=01-+11-00513-CV&hl=en&as_sdt=4,44#r[5]" name="[5]" style="color: #660099; text-decoration: underline;">[5]</a> Build by Owner also contends that we should vacate Judge Touchy's venue ruling because Sekumade waived his venue motion on two grounds: (1) Sekumade failed to obtain a hearing on his motion within a reasonable time, and (2) Sekumade pursued counterclaims and dispositive motions before the trial court heard his venue motion. Build by Owner, however, cites no authority for the proposition that no adequate appellate remedy exists for addressing these contentions, and that, therefore, mandamus relief is appropriate. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1115607130542104613&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099; text-decoration: underline;"><i>Toliver v. Dallas Fort Worth Hosp. Council,</i> 198 S.W.3d 444, 446-48 (Tex. App.-Dallas 2006, no pet.)</a> (addressing on ordinary appeal whether defendant waived motion to transfer venue); <a href="https://scholar.google.com/scholar_case?case=12553797473758761912&q=01-+11-00513-CV&hl=en&as_sdt=4,44" style="color: #660099; text-decoration: underline;"><i>Carlile v. RLS Legal Solutions, Inc.,</i> 138 S.W.3d 403, 406 (Tex. App.-Houston [14th Dist.] 2004, no pet.)</a> (addressing same). We therefore decline to address these arguments on mandamus review.</div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-87601212286520706452019-05-10T13:37:00.003-05:002019-05-12T11:41:47.372-05:00Texas Supreme Court blesses contractual SOL circumvention in Godoy v. Wells Fargo Bank, N.A. - Within Reason <div style="text-align: center;">
Gerald <a href="http://www.txcourts.gov/media/1444058/180071.pdf">Godoy v. Wells Fargo Bank</a>, N.A., No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0071&coa=cossup">18-0071</a> (Tex. May 10, 2019) </div>
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<a href="https://1.bp.blogspot.com/-d1SOGz1GqF0/XNWmBVsGIcI/AAAAAAAAQPc/jI9V2RQrg70yIolwuDahH_i2xIqrMq_XwCKgBGAs/s1600/Wells%2BFargo%2Blogo%2Bin%2Bfront%2Bof%2BBank%2BBuilding.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="306" data-original-width="418" height="146" src="https://1.bp.blogspot.com/-d1SOGz1GqF0/XNWmBVsGIcI/AAAAAAAAQPc/jI9V2RQrg70yIolwuDahH_i2xIqrMq_XwCKgBGAs/s200/Wells%2BFargo%2Blogo%2Bin%2Bfront%2Bof%2BBank%2BBuilding.JPG" width="200" /></a></div>
This is a rare instance where the all-Republican Texas Supreme Court agreed to hear an individual's petition for review in a dispute with a major bank. But it didn't do the individual much good, as the high court affirmed the lower courts' judgment in the bank's favor. No big surprise here. The opinion in Godoy v. Wells Fargo is nevertheless important because the Supreme Court did not wholeheartedly embrace the rationale of the majority in the court below when it affirmed summary judgment for the bank on a guaranty Godoy had signed. The bank sued him on the guaranty agreement when the foreclosure and sale of the real estate that secured the promissory note did not generate proceeds sufficient to pay off the loan balance. See related post on the intermediate court of appeal's decision:<br />
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-- > S.O.L. - <a href="https://debt-suit-litigation-in-texas.blogspot.com/2017/11/sol-did-two-justices-on-houston-coa.html">Did two justices on the Houston Court of Appeals just gut the statute of limitations</a>? </div>
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When Godot's appeal was heard by the Fourteenth Court of Appeals in 2017, the Chief of that Court vigorously dissented on the key issue in the case, a contractual provision in a guaranty agreement purporting to waive the statute of limitations, concluding that the contractual waiver of the two-year statute of limitations governing deficiency claims -- TEX. PROP. CODE § 51.003(a) -- was void on public policy grounds, and that the summary judgment in the bank's favor should accordingly have been reversed.<br />
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<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-aU5PP70RRrA/XNXdPWRYxeI/AAAAAAAAQQ0/uIY0t2wyF3wZatNzjfEnCgA5CfR_nxpPwCLcBGAs/s1600/14-16-00599-CV%2BFrost%2BDissent%2Bin%2BGodoy%2Bv%2BWells%2BFargo%2BBank%2B%2528snip%2Bof%2BPage%2B1%2529.PNG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="910" data-original-width="745" height="400" src="https://1.bp.blogspot.com/-aU5PP70RRrA/XNXdPWRYxeI/AAAAAAAAQQ0/uIY0t2wyF3wZatNzjfEnCgA5CfR_nxpPwCLcBGAs/s400/14-16-00599-CV%2BFrost%2BDissent%2Bin%2BGodoy%2Bv%2BWells%2BFargo%2BBank%2B%2528snip%2Bof%2BPage%2B1%2529.PNG" width="326" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Dissent by Chief Justice Frost </td></tr>
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The supreme court agreed with <a href="http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=8a4a646b-cc04-4c29-b74a-93fea1ebbf98&coa=coa14&DT=Opinion&MediaID=169f1a03-205e-4406-a85c-77ea0bd7a08e">Chief Justice Frost's dissent</a> to an extent. This included the issue of whether it was enough for Godoy to raise the public policy defense at the summary judgment stage, when he had not expressly raised it in his pleadings (on top of pleading limitations as an affirmative defense). But the partial vindication of Chief Frost's take on the void-as-against-public-policy issue in the case wasn't enough to change the outcome.</div>
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<span style="color: #3d85c6; font-family: "arial" , "helvetica" , sans-serif;"><b>Blanket pre-dispute waivers of all statutes of limitation are unenforceable, but waivers of a particular limitations period for a defined and reasonable amount of time may be enforced.</b></span></blockquote>
Rather than reversing the judgment grant for Wells Fargo, as unsuccessfully urged by Chief Justice Frost on her own court, or agreeing that the statute of limitations had been rendered inapplicable by the fine print in the Bank's shrewdly and self-servingly drafted guaranty agreement, the Texas High Court ended up taking what might look like a middling position.<br />
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In an opinion written by Justice Blacklock, the Court concluded, without any dissent, that the contractual waiver in the contract at issue substituted a four-year limitations period for the statutory limitations period of two years that governs deficiency suits, and that the contractual doubling to a four-year period (the SOL generally applicable to suits on debt) was not contrary to Texas public policy.<br />
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Because the Bank had filed suit against Godot within the four-year period, limitations did not bar its claim. The supreme court accordingly affirmed the summary judgment for Wells Fargo, albeit on a different basis.<br />
<br />
The Supreme Court further noted that the waiver language in the guaranty agreement contained a savings provision, buy declined to decide whether a blanket waiver of all statutes of limitations (as opposed to the specific one governing deficiency claims) could be made compliant with public policy by judicially limiting it to four years, as opposed to striking the contractual waiver as void and therefore ineffective in its entirety because it would allow the bank to bring claims in perpetuity.<br />
<blockquote class="tr_bq">
<span style="color: #3d85c6; font-family: "arial" , "helvetica" , sans-serif;"><b>Once section 51.003(a)’s two-year statute of limitations is waived by operation of section (A), the four-year statute of limitations applying to suits to collect debts found in section 16.004(a)(3) of the Civil Practice and Remedies Code becomes applicable. The concern about litigating long stale claims is absent, and Godoy does not contend that a four-year limitations period is unreasonable. The backstop of section 16.004(a)(3) is sufficient to satisfy the requirement that contractual statute-of-limitations waivers must be only “for a reasonable time.” </b></span></blockquote>
The bottom line here is that the Bank prevailed; that the statute of limitations was not expressly gutted, but that Wells Fargo and other banks have been given a green light to work their way around it.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://2.bp.blogspot.com/-IImSlxNFu5k/XNXGIyDVjwI/AAAAAAAAQP0/DKTQYq6z7PoBddf3ua9vT0tO-UZXY21YgCLcBGAs/s1600/Courthouse%2Bpic%2Bwith%2Bgreen%2Blight.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Courthouse of the First and Fourteenth Courts of Appeals" border="0" data-original-height="921" data-original-width="1248" height="236" src="https://2.bp.blogspot.com/-IImSlxNFu5k/XNXGIyDVjwI/AAAAAAAAQP0/DKTQYq6z7PoBddf3ua9vT0tO-UZXY21YgCLcBGAs/s320/Courthouse%2Bpic%2Bwith%2Bgreen%2Blight.JPG" title="Courthouse of the First and Fourteenth Courts of Appeals" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Old Harris County Courthouse, <br />
now the seat of the First and Fourteenth Courts of Appeals </td></tr>
</tbody></table>
<br />
The message to financial institutions is that they are free to require customers to agree to a contractual extension of the otherwise applicable limitations periods as long as the contracted-for limitations period is not unreasonable as ultimately judged by the Texas Supreme Court in case of a subsequent dispute.<br />
<br />
The <i>Godoy</i> opinion won't lay to rest all questions that might arise, though. Case-dispositive here was the Court's substitution of the four-year statute of limitations governing debt for the statute of limitations that would govern deficiency suits (which is a special subcategory of suit on debt with its own statute of limitations) in the absence of a contractual waiver. That does not cover all scenarios. So there may be appellate litigation forthcoming on limitations waivers in other scenarios, such as when a contract purports to waive the four-year statute of limitations governing "debt" or the six-year statute of limitations governing promissory notes that meet the definition of negotiable instruments under the Texas version of the UCC. It is by no means clear how many contracted-for additional years would amount to too many years in the Supremes' estimation, thereby offending the state's public policy under the "reasonableness" criterion. <br />
<br />
Note also that <i>Godoy</i> opinion does not address the matter of contractual choice of law. In <i>Godoy</i>, the obligation arose from a guaranty Godoy had signed for a mortgage loan made to a corporation. There is no mention whether the contract was governed by Texas law or some other state's law. There is little doubt that it was Texas law. In credit card card agreements, however, Wells Fargo's contractual choice of law is South Dakota, not Texas, and federal laws also applies to extensions of consumer credit. That, and any distinctions between commercial vs. consumer credit cases, may create additional supreme litigation opportunities that remain for another day.<br />
<br />
Corrected: Godoy, not Godot. There was quite a bit of wait, but not for <a href="https://en.wikipedia.org/wiki/Waiting_for_Godot">Godot</a>.<br />
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Clink hyperlink to opinion [in PDF] here ---> <b><a href="http://www.txcourts.gov/media/1444058/180071.pdf">Godoy v. Wells Fargo Bank, N.A.</a> </b></div>
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SCOTX Docket sheet with hotlinks to briefs here --> <b><a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0071&coa=cossup">18-0071</a> </b></div>
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IN THE SUPREME COURT OF TEXAS</div>
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No. 18-0071</div>
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GERALD GODOY, PETITIONER,</div>
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WELLS FARGO BANK, N.A., RESPONDENT</div>
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ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS</div>
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Argued February 19, 2019</div>
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<a href="http://www.txcourts.gov/media/1444058/180071.pdf">Godoy v. Wells Fargo Bank</a>, N.A., No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0071&coa=cossup">18-0071</a> (Tex. May 10, 2019) </div>
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JUSTICE BLACKLOCK delivered the opinion of the Court.<br />
JUSTICE BUSBY did not participate in the decision.<br />
<br />
Seventy-five years ago in Simpson v. McDonald, this Court held that “an agreement in<br />
advance to waive or not plead the statutes of limitation is void as against public policy.” 179<br />
S.W.2d 239, 243 (Tex. 1944). We reaffirm that longstanding principle today, although we agree<br />
with the courts of appeals that have since interpreted Simpson to allow a contractual waiver of the<br />
statute of limitations if the waiver is “specific and for a reasonable time.” E.g., Am. Alloy Steel,<br />
Inc. v. Armco, Inc., 777 S.W.2d 173, 177 (Tex. App.—Houston [14th Dist.] 1989, no writ). The<br />
court of appeals found that Gerald Godoy waived the argument that his contractual waiver of the<br />
statute of limitations is void as against public policy. 542 S.W.3d 50, 54 (Tex. App.—Houston<br />
[14th Dist.] 2017). We hold that the court of appeals erred by declining to reach Godoy’s<br />
argument, but we nonetheless agree with its ultimate disposition of the case. While portions of<br />
2<br />
Godoy’s contractual waiver are unenforceable under Simpson, other portions are sufficiently<br />
specific and result only in the substitution of a four-year limitations period for a two-year period<br />
rather than the abandonment of all limitations prohibited by Simpson. When the enforceable<br />
portions of Godoy’s contractual waiver are applied, limitations do not bar Wells Fargo’s suit<br />
against him. We therefore affirm the judgment of the court of appeals.<br />
I. Background<br />
GDG Mortgage, Inc., borrowed $250,000 from Wachovia Bank. The loan was secured by<br />
real property owned by GDG Mortgage. Gerald Godoy guaranteed the loan. The guaranty<br />
agreement Godoy signed included the following waiver of defenses:<br />
GUARANTOR’S WAIVERS.<br />
Guarantor also waives any and all rights or defenses arising by reason of (A) any<br />
“one action” or “anti-deficiency” law or any other law which may prevent Lender<br />
from bringing any action, including a claim for deficiency, against Guarantor,<br />
before or after Lender’s commencement or completion of any foreclosure action,<br />
either judicially or by exercise of a power of sale; (B) any election of remedies by<br />
Lender which destroys or otherwise adversely affects Guarantor’s subrogation<br />
rights or Guarantor’s rights to proceed against Borrower for reimbursement,<br />
including without limitation, any loss of rights Guarantor may suffer by reason of<br />
any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or<br />
other defense of Borrower, of any other guarantor, or of any other person, or by<br />
reason of the cessation of Borrower’s liability from any cause whatsoever, other<br />
than payment in full in legal tender, of the Indebtedness; (D) any right to claim<br />
discharge of the Indebtedness on the basis of unjustified impairment of any<br />
collateral for the Indebtedness; (E) any statute of limitations, if at any time any<br />
action or suit brought by Lender against Guarantor is commenced, there is<br />
outstanding indebtedness of Borrower to Lender which is not barred by any<br />
applicable statute of limitations; or (F) any defenses given to guarantors at law or<br />
in equity other than actual payment and performance of the Indebtedness. . . .<br />
GUARANTOR’S UNDERSTANDING WITH RESPECT TO WAIVERS.<br />
Guarantor warrants and agrees that each of the waivers set forth above is made with<br />
Guarantor’s full knowledge of its significance and consequences and that, under<br />
the circumstances, the waivers are reasonable and not contrary to public policy or<br />
law. If any such waiver is determined to be contrary to any applicable law or public<br />
3<br />
policy, such waiver shall be effective only to the extent permitted by law or public<br />
policy.<br />
GDG Mortgage defaulted. Wells Fargo, Wachovia’s successor, foreclosed on GDG<br />
Mortgage’s real property securing the loan. Wells Fargo purchased the property at the foreclosure<br />
sale, which took place in November 2011. The purchase price of the property was not enough to<br />
satisfy GDG Mortgage’s unpaid balance. Wells Fargo sued Godoy to recover the deficiency in<br />
June 2015. Godoy moved for summary judgment, arguing that Wells Fargo’s claim was barred<br />
by the Property Code’s two-year statute of limitations for deficiency claims, which provides:<br />
If the price at which real property is sold at a foreclosure sale under Section<br />
51.002 is less than the unpaid balance of the indebtedness secured by the real<br />
property, resulting in a deficiency, any action brought to recover the deficiency<br />
must be brought within two years of the foreclosure sale and is governed by this<br />
section.<br />
TEX. PROP. CODE § 51.003(a). In response, Wells Fargo moved for partial summary judgment,<br />
arguing that Godoy waived section 51.003’s two-year statute of limitations when he signed the<br />
guaranty agreement. The trial court denied Godoy’s motion for summary judgment and granted<br />
Wells Fargo’s motion for partial summary judgment. Wells Fargo moved for final summary<br />
judgment on its deficiency claim, and the trial court granted that motion.<br />
Godoy appealed. He argued that, under court of appeals decisions applying Simpson v.<br />
McDonald, a statute-of-limitations defense can only be waived if the language in the waiver is<br />
specific and for a defined period of time. See Am. Alloy Steel, Inc., 777 S.W.2d at 177; Duncan v.<br />
Lisenby, 912 S.W.2d 857, 859 (Tex. App.—Houston [14th Dist.] 1995, no writ); Squyres v.<br />
Christian, 253 S.W.2d 470, 472 (Tex. App.—Fort Worth 1952, writ ref’d n.r.e.). Godoy claimed<br />
that the waiver he agreed to was indefinite and thus void as against public policy because, he<br />
contended, it allowed Wells Fargo to bring suit at any time in the future. 542 S.W.3d at 52. Citing<br />
4<br />
our decision in Moayedi v. Interstate 35/Chisam Road, L.P., 438 S.W.3d 1 (Tex. 2014), Wells<br />
Fargo argued that, by signing a broad waiver of all defenses, a party such as Godoy can waive all<br />
statute-of-limitations defenses indefinitely. Id.<br />
The court of appeals affirmed. Id. at 51. It held that, under Moayedi, Godoy’s agreement<br />
to waive “all rights or defenses arising by reason of . . . any . . . anti-deficiency law” was sufficient<br />
to waive section 51.003(a)’s two-year statute of limitations. Id. at 53. The court of appeals did<br />
not consider Godoy’s argument that his contractual waiver of the limitations period was void as<br />
against public policy under Simpson. It determined that Godoy waived this public-policy argument<br />
by failing to affirmatively plead it as a “matter constituting an avoidance” under Rule 94. Id. at<br />
54; TEX. R. CIV. P. 94.<br />
Although it did not consider Godoy’s public-policy arguments against enforcement of the<br />
waivers, the court of appeals did not decide whether the guaranty agreement’s waiver provision<br />
was sufficient to waive all Godoy’s possible statute-of-limitations defenses. Because Wells Fargo<br />
sued within the four-year limitations period applying generically to suits to collect debts, the court<br />
of appeals concluded that its suit was timely even if Godoy could not contractually waive all<br />
limitations defenses. 542 S.W.3d at 55; see TEX. CIV. PRAC. & REM. CODE § 16.004(a)(3). The<br />
court of appeals decided only that Godoy waived the two-year statute of limitations and that Wells<br />
Fargo’s suit—filed three-and-a-half years after the foreclosure sale—was not barred by the fouryear limitations period that would apply in the absence of the two-year period. 542 S.W.3d at 55.<br />
One court of appeals justice dissented. With respect to waiver, the dissent concluded that,<br />
under Phillips v. Phillips, Godoy did not need to plead his public-policy defense in his answer<br />
because the complete waiver of the statute of limitations “appears on the face of the petition” and<br />
5<br />
its voidness “is established as a matter of law.” 542 S.W.3d at 62–63 (Frost, C.J., dissenting)<br />
(citing Phillips, 820 S.W.2d 785, 789–90 (Tex. 1991) (holding that a defense “is not waived by<br />
the failure to plead it if it is apparent on the face of the petition and established as a matter of<br />
law”)). The dissent also argued that Wells Fargo tried the defense by consent by not objecting to<br />
Godoy’s alleged pleading defect before the trial court rendered judgment. Id. at 65 (citing Via Net<br />
v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) (per curiam)). With respect to the statute of<br />
limitations, the dissent argued that Simpson prohibits enforcement of Godoy’s contractual waiver<br />
of section 51.003(a)’s two-year statute of limitations. Id. at 58. The dissent reasoned that nothing<br />
in Moayedi’s general holding regarding a contractual waiver of all defenses alters the specific rule<br />
in Simpson governing contractual waiver of statutes of limitation. Id. at 60–61. The dissent<br />
concluded that, because Godoy’s waiver of the two-year statute of limitations was void under<br />
Simpson, the trial court’s summary judgment enforcing that waiver should be reversed. Id. at 57.<br />
Before this Court, Godoy contends that he did not waive the argument that his contractual<br />
abandonment of the statute of limitations is void as against public policy. Further, he continues to<br />
argue that, under Simpson, his agreement to waive section 51.003(a)’s two-year limitations period<br />
is void unless it is specific and for a pre-determined length of time. In Godoy’s view, if the court<br />
of appeals is correct that he waived the two-year limitations period, then Wells Fargo could bring<br />
its deficiency claims at any time in the distant future. However, Wells Fargo no longer argues that<br />
the guaranty agreement waived all statute-of-limitations defenses such that it could bring suit in<br />
perpetuity. Wells Fargo now asserts only that Godoy waived all defenses under section 51.003 of<br />
the Property Code, including the two-year statute of limitations. The effect of waiving the twoyear limitations period, Wells Fargo contends, is that the four-year limitations period of section<br />
6<br />
16.004(a)(3) of the Civil Practice and Remedies Code applies as a backstop in the absence of the<br />
waived two-year period. If a four-year limitations period applies, Wells Fargo’s suit—brought<br />
three-and-a-half years after the foreclosure sale—is not barred by limitations.<br />
II. Discussion<br />
A. Standard of Review<br />
“We review the trial court’s summary judgment de novo.” Valence Operating Co. v.<br />
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). “As the parties dispute not the facts” but questions of<br />
law, we “determin[e] all legal questions presented.” Guynes v. Galveston Cty., 861 S.W.2d 861,<br />
862 (Tex. 1993). As always, “[w]e review legal questions de novo.” Tex. Dep’t of Transp. v.<br />
Needham, 82 S.W.3d 314, 318 (Tex. 2002).<br />
B. Waiver<br />
We first consider whether, by failing to plead it in his answer, Godoy waived the argument<br />
under Simpson that his contractual abandonment of the statute of limitations is void. Rule 94 of<br />
the Texas Rules of Civil Procedure requires that “[i]n a pleading to a preceding pleading, a party<br />
shall set forth affirmatively” any matter “constituting an avoidance or affirmative defense.” An<br />
affirmative defense is “[a] defendant’s assertion of facts and arguments that, if true, will defeat the<br />
plaintiff’s or prosecution’s claim, even if all the allegations in the complaint are true.” Zorrilla v.<br />
Aypco Constr. II, LLC, 469 S.W.3d 143, 155–56 (Tex. 2015) (quoting affirmative defense,<br />
BLACK’S LAW DICTIONARY (10th ed. 2009)). An avoidance “derives from the historic English<br />
common-law pleas of ‘confession and avoidance’” and means “a plea in which a defendant admits<br />
allegations but pleads additional facts that deprive the admitted facts of an adverse legal effect.”<br />
Id. at 156 (quoting confession and avoidance, BLACK’S LAW DICTIONARY (10th ed. 2009)). “[A]<br />
7<br />
statute of limitations is an affirmative defense . . . .” Id. Godoy pleaded the two-year statute of<br />
limitations as an affirmative defense in his original answer. His argument about contractual<br />
invalidity was not its own affirmative defense but rather an argument in support of his affirmative<br />
statute-of-limitations defense. The need to make the argument arose in the course of summary<br />
judgment briefing. It was a purely legal argument that did not involve “plead[ing] additional facts<br />
that deprive the admitted facts of an adverse legal effect.” Id. The court of appeals nevertheless<br />
strictly applied its precedent, under which “[a]n allegation that a provision in a contract is void,<br />
unenforceable, or unconscionable is a matter in the nature of avoidance and must be affirmatively<br />
pleaded.” 542 S.W.3d at 54 (quoting 950 Corbindale, L.P. v. Knotts Capital Holdings Ltd. P’ship,<br />
316 S.W.3d 191, 196 (Tex. App—Houston [14th Dist.] 2010, no pet.)).<br />
“Whenever possible, we reject form-over-substance requirements that favor procedural<br />
machinations over reaching the merits of a case.” Dudley Constr., Ltd. v. Act Pipe & Supply, Inc.,<br />
545 S.W.3d 532, 538 (Tex. 2018). We question whether a legal argument in support of an alreadypleaded affirmative defense amounts to its own “matter constituting an avoidance or affirmative<br />
defense” under Rule 94. Requiring Godoy, on pain of waiver, to amend his answer just to make a<br />
purely legal argument during summary judgment briefing—related to a matter he has already<br />
pleaded—does not serve the stated purpose of the Rules of Civil Procedure, which is to “obtain a<br />
just, fair, equitable and impartial adjudication of the rights of litigants under established principles<br />
of substantive law.” TEX. R. CIV. P. 1.1<br />
<br />
1 “‘This court has labored long and hard to remove as many procedural traps from our rules as possible.<br />
Litigants are entitled to have their disputes resolved on the merits, not on unnecessary and arcane points that can sneak<br />
up on even the most diligent of attorneys.’ Tricky procedural rules threaten substantive rights.” In re Brookshire<br />
Grocery Co., 250 S.W.3d 66, 73–74 (Tex. 2008) (Hecht, J., dissenting) (quoting Donwerth v. Preston II ChryslerDodge, Inc., 775 S.W.2d 634, 643 (Tex. 1989) (Ray, J., concurring)).<br />
8<br />
Ultimately, we need not decide whether Rule 94 required Godoy to amend his answer to<br />
plead his public-policy argument based on Simpson. Even if it did, the dissenting justice in the<br />
court of appeals was correct that under our decision in Roark v. Stallworth Oil & Gas, Inc., Wells<br />
Fargo waived Godoy’s alleged pleading error by not raising it in the trial court prior to judgment.<br />
813 S.W.2d 492, 495 (Tex. 1991). Wells Fargo did not alert the trial court to Godoy’s alleged<br />
pleading defect during summary judgment proceedings or at any other time prior to judgment.<br />
Instead, Wells Fargo waited until its response to Godoy’s motion for new trial to argue that Rule<br />
94 required some of Godoy’s arguments to appear in his pleadings. Under Roark, this is too late.<br />
Roark involved a scenario nearly identical to this case. Stallworth, the defendant, moved for<br />
summary judgment, which the trial court granted based on an affirmative defense. Id. at 494.<br />
Roark, the plaintiff, complained that Stallworth had failed to plead the affirmative defense as<br />
required by Rule 94. Id. However, just like Wells Fargo in this case, Roark complained about this<br />
pleading defect for the first time in new-trial briefing. Id. We held that this was too late, stating<br />
that the party opposing summary judgment must “object to the lack of a rule 94 pleading in either<br />
its written response [to a summary judgment motion] or before the rendition of judgment.” Id.<br />
Because Wells Fargo did not alert the trial court to the alleged pleading defect before judgment, it<br />
waived its complaint about Godoy’s pleadings. The court of appeals therefore erred by declining<br />
to consider Godoy’s void-as-against-public-policy argument.<br />
C. Statute of Limitations<br />
Having determined Godoy did not waive his argument, we now consider it. Godoy<br />
contends that his contractual waiver of limitations defenses is void as against public policy. In<br />
Simpson v. McDonald, we stated: “It appears to be well settled that an agreement in advance to<br />
9<br />
waive or not plead the statutes of limitation is void as against public policy.” 179 S.W.2d at 243;<br />
see also Nunn v. Edmiston, 9 Tex. Civ. App. 562, 563 (1895, no writ) (“It has been held that a<br />
person may, by contract, waive the right to plead the statute of limitations. Such agreements are,<br />
however, in our opinion, contrary to public policy, and subversive of a wholesome statute, and<br />
should not be upheld.” (citation omitted)). Since Simpson was decided, courts of appeals have<br />
built upon its holding to require that a waiver of a statute of limitations is void unless the waiver<br />
is “specific and for a reasonable time.” Am. Alloy Steel, Inc., 777 S.W.2d at 177. See also Duncan,<br />
912 S.W.2d at 859 (“The agreement must be specific and for a pre-determined length of time.”).<br />
Indeed, the requirement that in order to be enforceable the statute-of-limitations waiver must be<br />
“specific” and “only for a reasonable time” was already understood to be part of the law at the<br />
time Simpson was decided. See Titus v. Wells Fargo Bank & Union Tr. Co., 134 F.2d 223, 224<br />
(5th Cir. 1943) (“[W]aiver before the bar has fallen must be specific and only for a reasonable<br />
time, and [] the purpose of such statutes may not be thwarted by general agreements to waive the<br />
benefit of the statute permanently. The Texas courts have adopted this view.” (citation omitted)).<br />
The courts of appeals have never understood Simpson as Godoy does, as an absolute bar<br />
on contractual waivers of statutes of limitation. Instead, from even before Simpson was decided,<br />
the general rule has been that such waivers must be specific and for a reasonable time. We agree<br />
with the courts of appeals that have applied this understanding of Simpson’s holding. See, e.g.,<br />
Am. Alloy Steel, Inc., 777 S.W.2d at 177. Blanket pre-dispute waivers of all statutes of limitation<br />
are unenforceable, but waivers of a particular limitations period for a defined and reasonable<br />
amount of time may be enforced.<br />
10<br />
This holding does not conflict with our recent decision in Moayedi v. Interstate 35/Chisam<br />
Road, L.P. In Moayedi, we held that by agreeing to a general waiver of all defenses in a guaranty<br />
agreement, a party waived the right of offset provided by section 51.003(c) of the Property Code.<br />
438 S.W.3d at 2. However, Moayedi did not consider whether a party could waive the statute of<br />
limitations provided by section 51.003(a) or whether such a waiver would run afoul of Simpson.<br />
The fact that Moayedi did not consider waiver of statutes of limitation is important, because “[a]<br />
limitations bar differs materially from a debtor’s or guarantor’s rights to valuation and offset under<br />
chapter 51.” Segal v. Emmes Capital, L.L.C., 155 S.W.3d 267, 281 (Tex. App.—Houston [1st<br />
Dist.] 2004, pet. dism’d). Statutes of limitation are “the Legislature’s procedural device for<br />
establishing a point of repose for past actions and for ‘ensur[ing] that the search for truth is not<br />
impaired by stale evidence or the loss of evidence.’” Id. (quoting Childs v. Haussecker, 974<br />
S.W.2d 31, 38–39 (Tex. 1998)). On the other hand, “a guarantor’s valuation and offset rights<br />
under chapter 51 are substantive rights, not procedural bars to suit.” Id.<br />
While “[i]n general, parties may waive statutory and even constitutional rights,” Moayedi,<br />
438 S.W.3d at 6, a statute of limitations is not solely a right belonging to the party asserting it. It<br />
“protect[s] defendants and the courts from having to deal with cases in which the search for truth<br />
may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses,<br />
fading memories, disappearance of documents or otherwise.” Murray v. San Jacinto Agency, Inc.,<br />
800 S.W.2d 826, 828 (Tex. 1990) (emphasis added). In addition to affording comfort and repose<br />
to the defendant, statutes of limitation protect the courts and the public from the perils of<br />
adjudicating stale claims. Although this Court has “long recognized a strong public policy in favor<br />
of preserving the freedom of contract,” Fortis Benefits v. Cantu, 234 S.W.3d 642, 649 (Tex. 2007)<br />
11<br />
(quoting Lawrence v. CDB Servs., Inc., 44 S.W.3d 544, 553 (Tex. 2001)), under our precedent that<br />
freedom does not include the authority to unqualifiedly waive statutes of limitation and thereby<br />
require the courts to attempt to adjudicate claims long after they have become stale. Simpson<br />
continues to prohibit enforcement of open-ended pre-dispute waivers that eliminate the limitations<br />
period.<br />
We turn now to whether Godoy’s contractual waiver of the two-year limitations period is<br />
enforceable. The “Guarantor’s Waivers” section of the agreement contains three discrete sections<br />
that potentially waive statutes of limitation: sections (E), (F), and (A). We analyze each separately.<br />
Section (E) states that the guarantor “waives any and all rights or defenses arising by reason of . . .<br />
any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is<br />
commenced, there is outstanding indebtedness of Borrower to Lender which is not barred by any<br />
applicable statute of limitations.” Section (F) purports to waive “any defenses given to guarantors<br />
at law or in equity other than actual payment and performance of the Indebtedness.” Under<br />
Simpson, sections (E) and (F) are both unenforceable with respect to statutes of limitation because<br />
they purport to completely waive all limitations periods. See 179 S.W.2d at 243. Neither section<br />
is “specific” to a particular limitations period, and neither section has a “reasonable time” period<br />
limiting the waiver. See Am. Alloy Steel, Inc., 777 S.W.2d at 177 (“[A]ny agreement made before<br />
the statutory bar has fallen must be specific and for a reasonable time.”). Instead, application of<br />
either section (E) or section (F) would enable Wells Fargo to sue Godoy any time in the future, no<br />
matter how distant. Godoy is correct that sections (E) and (F) are unenforceable as applied to<br />
statutes of limitation.<br />
Section (A) states:<br />
12<br />
Guarantor also waives any and all rights or defenses arising by reason of (A) any<br />
“one action” or “anti-deficiency” law or any other law which may prevent Lender<br />
from bringing any action, including a claim for deficiency, against Guarantor,<br />
before or after Lender’s commencement or completion of any foreclosure action,<br />
either judicially or by exercise of a power of sale . . . .<br />
Unlike sections (E) and (F), section (A) is both “specific” and “for a reasonable time.” Id. As for<br />
specificity, section (A) waives a particular, identifiable statute of limitations—the two-year period<br />
provided by section 51.003. It does so by waiving all “defenses” arising from any “antideficiency” law. Section 51.003 is Texas’s “anti-deficiency law.” See Moayedi, 438 S.W.3d at 6<br />
(referring to section 51.003 as “[t]his anti-deficiency law”). Its two-year limitations period is a<br />
“defense” arising from this “anti-deficiency” law. Section (A) does not purport to waive all<br />
statutes of limitation or any other statute of limitations. It waives one statute of limitations, and it<br />
does so with sufficient specificity.<br />
Section (A) also satisfies the “for a reasonable time” requirement. It does not state a<br />
substitute limitations period or provide a specific end-date for the waiver, defects which might<br />
make other such agreements unenforceable. In this instance, however, the law provides a<br />
reasonable four-year limitations period as a backstop. Once section 51.003(a)’s two-year statute<br />
of limitations is waived by operation of section (A), the four-year statute of limitations applying<br />
to suits to collect debts found in section 16.004(a)(3) of the Civil Practice and Remedies Code<br />
becomes applicable. The concern about litigating long stale claims is absent, and Godoy does not<br />
contend that a four-year limitations period is unreasonable. The backstop of section 16.004(a)(3)<br />
is sufficient to satisfy the requirement that contractual statute-of-limitations waivers must be only<br />
“for a reasonable time.” Am. Alloy Steel, Inc., 777 S.W.2d at 177.<br />
13<br />
The guaranty agreement’s savings clause further supports this conclusion. It states, “[i]f<br />
any such waiver is determined to be contrary to any applicable law or public policy, such waiver<br />
shall be effective only to the extent permitted by law or public policy.” Enforcing the section (A)<br />
waiver “to the extent permitted by law or public policy,” as the parties agreed we should, we<br />
conclude that the four-year statute of limitations applying to suits to collect debts applies as a<br />
backstop. See TEX.CIV. PRAC. &REM.CODE § 16.004(a)(3). With respect to statutes of limitation,<br />
section (A) is effectively an agreement to move the limitations period for Wells Fargo’s deficiency<br />
suit from two years to four years. Such an agreement does not run afoul of the policy concerns<br />
animating Simpson because it is specific and for a reasonable time. Section (A) of the “Guarantor’s<br />
Waivers” is enforceable.<br />
2<br />
III. Conclusion<br />
The court of appeals correctly concluded that Godoy contractually waived the two-year<br />
statute of limitations and that a four-year statute of limitations applied to Wells Fargo’s claims.<br />
Because Wells Fargo sued Godoy within that four-year period, limitations did not bar the suit.<br />
Although we disagree with portions of the court of appeals’ reasoning, its judgment is affirmed.<br />
2 Because we conclude that Section (A) is sufficient to waive the limitations period on which Godoy relies,<br />
we do not address whether the otherwise unenforceable waiver of all statutes of limitation in Section (E) could be<br />
enforceable on a limited basis by virtue of the guaranty agreement’s savings clause. The savings clause provides, “If<br />
any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective<br />
only to the extent permitted by law or public policy.” It could be argued that, under this clause, the Section (E)<br />
waiver—while generally unenforceable on public-policy grounds under Simpson—should nevertheless be enforced to<br />
the greatest extent public policy allows. Whatever that greatest extent is, it likely includes a two-year extension of the<br />
statutory two-year limitations period. We do not address the validity of this argument, however, because it is not<br />
necessary to the disposition of the case.<br />
14<br />
__________________________________<br />
James D. Blacklock<br />
Justice<br />
OPINION DELIVERED: May 10, 2019<br />
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-14479223337510282582019-04-26T11:53:00.003-05:002019-07-26T10:07:42.493-05:00Lodestar as Guidance: Texas Supreme Court goes fully federal on attorney-fee shifting: Rohrmoos Venture v. UTSW DVA Healthcare (Tex. 2019) <div style="text-align: center;">
<b><span style="color: #3d85c6;">FEE-SHIFTING BY BENCH AND BAR IN TEXAS </span></b></div>
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<b><span style="color: #0b5394;"><span style="color: #3d85c6;">HENCEFORTH TO BE GUIDED BY THE LODESTAR</span><span style="color: red;"> </span></span></b><br />
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<i>Rohrmoos Venture v. UTSW DVA Healthcare, LLP</i>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0006&coa=cossup">16-0006</a> (Tex. Apr. 26, 2019) ("Because the record does not provide the requisite details to support a fee award, we reverse the court of appeals’ judgment as to the attorney’s fee award and remand the case to the trial court for a redetermination of fees consistent with this opinion.")</div>
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<a href="https://1.bp.blogspot.com/-fN4j_RELcLs/XMM1gxpjyII/AAAAAAAAQMo/Tgeft3r2x7QpmxSp7AGhLUbQUN0MrsIGgCLcBGAs/s1600/Tex%2B2019%2BRohrmoos%2BVenture%2Bv%2BUTSW%2BDVA%2BHealthcare%252C%2BLLP%2B-%2BNew%2BTexas%2BLodestar%2BPrecedent%2Bfor%2BAttorney-Fee%2BShifting.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="940" data-original-width="1002" height="375" src="https://1.bp.blogspot.com/-fN4j_RELcLs/XMM1gxpjyII/AAAAAAAAQMo/Tgeft3r2x7QpmxSp7AGhLUbQUN0MrsIGgCLcBGAs/s400/Tex%2B2019%2BRohrmoos%2BVenture%2Bv%2BUTSW%2BDVA%2BHealthcare%252C%2BLLP%2B-%2BNew%2BTexas%2BLodestar%2BPrecedent%2Bfor%2BAttorney-Fee%2BShifting.JPG" width="400" /></a></div>
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In a carefully crafted opinion authored by Justice Green, with no dissents, the Texas Supreme Court this morning (April 26, 2019) blessed the federal courts’ Lodestar approach to the matter of proving and granting attorney-fee awards under fee-shifting statutes and similar provisions in contracts in state courts. While claiming to merely “clarify” its prior precedents on the matter, and acknowledging no major break with the longstanding <i>Arthur Andersen</i> fee-factors framework, the Texas high court will have accomplished much more. </div>
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There is no question that the Texas Supreme Court’s resolution of the fee issue in <i>Rohrmoos</i> is one of great importance, and will have a major impact on many practice areas. Contrary to the Court’s meek disclaimer, it was not at all clear that the holding in <i>El Apple</i> applied across the board, as opposed to just the employment context, where Texas substantive law is an analogue to federal civil rights law, and perhaps a few other select areas of law.<br />
<blockquote class="tr_bq">
Texas courts have long followed federal statutes and cases in applying the TCHRA. See TEX. LABOR CODE ANN. § 21.001; <i>AutoZone, Inc. v. Reyes</i>, 272 S.W.3d 588, 592 (Tex. 2008) (noting that, by enacting the TCHRA, the Texas Legislature "intended to correlate state law with federal law in employment discrimination cases") (<i>quoting Wal-Mart Stores, Inc. v. Canchola</i>, 121 S.W.3d 735, 739 (Tex. 2003)).</blockquote>
Nor was it clear that data on time spent and hourly rates was required to prove up attorneys fees when the attorney had not <i><u>elected</u></i> to use the lodestar-method to substantiate the reasonableness of the amount of fees sought under other fee-shifting statutes.<br />
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<i>Rohrmoos</i> holds the promise of bringing greater predictability to the attorney fee awards "lottery" and promoting more effective and more meaningful appellate review of fee awards granted on flimsy and self-serving attorney testimony concerning the supposed reasonableness and necessity of their own fees in light of their years of practice and easily inflated self-assessment of litigation prowess.<br />
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Based on its holding in <i>Rohrmoos</i>, the supreme court also reversed a fee award in a companion case, which it resolved in a per curiam opinion. See <i><a href="https://www.txcourts.gov/media/1443998/180278.pdf">Barnett v. Schiro</a></i> No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=18-0278&coa=cossup">18-0278</a> (Tex. 2019) (attorney fee award based on fee-shifting statute reversed and remanded for redetermination).<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-S-cu8HWfMGM/XQ0QGKob8VI/AAAAAAAAQXg/Jm0FrdLHZXsOjUmtMEPWZCU4cRnJGQNhwCEwYBhgL/s1600/Rohrmoos%2BOrtstafel.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Rohrmoos (sign)" border="0" data-original-height="141" data-original-width="204" height="221" src="https://1.bp.blogspot.com/-S-cu8HWfMGM/XQ0QGKob8VI/AAAAAAAAQXg/Jm0FrdLHZXsOjUmtMEPWZCU4cRnJGQNhwCEwYBhgL/s320/Rohrmoos%2BOrtstafel.JPG" title="Rohrmoos (sign)" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: xx-small;">Cognate Place Name </span></td></tr>
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ROHRMOOS VENTURE, ERIC LANGFORD, DAN BASSO, AND TOBIN GROVE, Petitioners,<br />v.<br />UTSW DVA HEALTHCARE, LLP, Respondent.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=13096812598874327105&as_sdt=2&hl=en" style="color: #660099;">No. 16-0006.</a></center>
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<b>Supreme Court of Texas.</b></div>
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Argued October 31, 2018.</center>
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Opinion delivered: April 26, 2019.</center>
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On Petition for Review from the Court of Appeals for the Fifth District of Texas.</div>
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JUSTICE GREEN delivered the opinion of the Court.</div>
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PAUL W. GREEN, Justice.</div>
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In this case, we must decide whether a tenant can terminate a commercial lease contract for the landlord's prior material breach. We hold that under <a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow v. Inwood North Professional Group-Phase I,</i> 747 S.W.2d 373 (Tex. 1988),</a>termination is a justified remedy when the landlord breaches the commercial lease. We also must consider whether the evidence offered to prove attorney's fees is sufficient under our precedent for fee-shifting awards. We hold that it is not. When a fee claimant seeks to recover attorney's fees from an opposing party, it must put on evidence of reasonable hours worked multiplied by a reasonable hourly rate, yielding a base figure that can be adjusted by considerations not already accounted for in either the hours worked or the rate. Because the record does not contain this evidence, we affirm the court of appeals' judgment in part, reverse as to the award of attorney's fees, and remand the case to the trial court for further proceedings.</div>
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I. Background</h2>
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Landlord Rohrmoos Venture executed a commercial lease with tenant UT Southwestern DVA Healthcare, LLP (UTSW), for a commercial building in Dallas, Texas.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> UTSW used the commercial building for a dialysis clinic. At some point UTSW began experiencing water penetration in the building's concrete foundation and installed ceramic floor tiles because of the moisture problems.<br />
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Around September 2007, state health inspectors evaluated UTSW's dialysis clinic and criticized the facility because some ceramic floor tiles had come loose from the concrete slab and moisture could be seen under the tiles. UTSW notified Rohrmoos of the inspection results and over the following months, the two exchanged extensive communication in an attempt to diagnose and fix the issue. Neither party accepted responsibility. Multiple engineers and contractors were called in, but the issue persisted into 2009 and then began to worsen as the building apparently suffered significant water penetration.<br />
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Because UTSW viewed the commercial building as unsuitable for its intended commercial purpose, UTSW terminated its lease early, vacated the premises, and relocated to Irving, Texas, while still allegedly owing approximately $250,000 in unpaid rent. UTSW then sued Rohrmoos and the joint-venturers behind it for breach of contract and breach of the implied warranty of suitability. UTSW also sought declaratory judgment that: (1) a casualty occurred in accordance with the lease, (2) Rohrmoos failed to remedy the casualty, and (3) UTSW had the right to terminate the lease. Rohrmoos answered with several affirmative defenses, including waiver and prior material breach. Rohrmoos also counterclaimed for negligence and breach of contract. UTSW asserted its own affirmative defenses to Rohrmoos's counterclaims.<br />
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The case was submitted to a jury. The jury found that UTSW and Rohrmoos both failed to comply with the lease, that Rohrmoos failed to comply first, and that Rohrmoos breached the implied warranty of suitability. Although UTSW initially sought money damages, it did not submit that claim to the jury. Accordingly, no money damages were awarded to UTSW.<br />
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Regarding attorney's fees, the parties' lease agreement provided for a fee-shifting arrangement whereby "the prevailing party shall be entitled to an award for its reasonable attorneys' fees" from the non-prevailing party "[i]n any action to enforce the terms of [the] Lease." In an attempt to prove the reasonableness and necessity of the requested attorney's fees at trial, UTSW's attorney, Wade Howard, testified that he had twenty years of litigation experience, the standard rate he charges is $430 per hour, he has handled cases similar in nature to this one before, and a reasonable and necessary number of hours to spend on this case would be around 750 to 1,000. Those hours multiplied by his standard hourly rate equals between $322,500 and $400,000, so he testified that a reasonable and necessary fee would be between $300,000 and $400,000. But then Howard went on to state, "This case, for whatever reason, has not been worked up in a reasonable fashion. . . . But because of that, the fees in this case are much closer — my fees are much closer to 800 — over $800,000." He gave some examples of why the cost of this litigation was so high—searching through "millions" of emails and reviewing "hundreds of thousands" of documents during discovery, over forty depositions taken, and a forty-page motion for summary judgment. Howard did not explain how much time was spent on each of those tasks, however, and it was clear that not all the tasks he performed were included in his testimony. Rather, he stated that the factors relevant to his attorney's fees were (1) the amount in controversy, (2) the complexity of the case, and (3) his knowledge and experience—three of the eight factors set out in <a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen & Co. v. Perry Equipment Corp.,</i> 945 S.W.2d 812, 818 (Tex. 1997)</a>. The jury determined reasonable attorney's fees for both UTSW and Rohrmoos at $800,000 for representation in the trial court, $150,000 in the court of appeals, and $75,000 for representation in this Court.</div>
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The trial court entered final judgment against Rohrmoos, stating:</div>
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1. [Rohrmoos] materially breached the lease agreement first.</blockquote>
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2. [Rohrmoos] breached the implied warranty of suitability.</blockquote>
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3. Because [Rohrmoos] materially breached the lease agreement first and breached the implied warranty of suitability, UTSW had the right to terminate the lease agreement.</blockquote>
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4. Rohrmoos Venture takes nothing on all of its claims against UTSW and Counter-Defendants . . . .</blockquote>
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The trial court awarded UTSW attorney's fees in the amount determined by the jury—totaling $1,025,000 with the conditional appellate awards. Rohrmoos moved to reform the judgment or, alternatively, for a new trial. The trial court denied the motion.<br />
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Because the trial court's judgment authorized UTSW to <i>terminate</i> the commercial lease, Rohrmoos, on appeal, attacked the jury's finding that it breached the implied warranty of suitability established under <i>Davidow. See </i><a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow,</i> 747 S.W.2d at 377</a> (holding that "there is an implied warranty of suitability by the landlord in a commercial lease that the premises are suitable for their intended commercial purpose"). Rohrmoos reasoned that unless <i>Davidow</i> is waived under the lease or the lease contains a provision that supersedes <i>Davidow</i>'s implied warranty of suitability, a tenant can terminate a commercial lease only by proving a breach of the implied warranty of suitability. Otherwise, posited Rohrmoos, why would a commercial tenant go through the rigors of proving a <i>Davidow</i> breach if instead it could obtain the same remedy—termination—by merely convincing a jury that the landlord had materially breached the lease? Rohrmoos therefore devoted most of its briefing to challenging the jury's finding that it breached <i>Davidow</i>'s implied warranty of suitability. Rohrmoos did not challenge the jury's finding that it materially breached the lease.<br />
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The court of appeals initially missed Rohrmoos's primary argument under <i>Davidow,</i> largely because Rohrmoos did not brief the <i>Davidow</i> issue fully. On this point, the court of appeals held:</div>
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All of [Rohrmoos's <i>Davidow</i> arguments] are irrelevant unless Rohrmoos also defeats the answers to questions one through three [of the jury charge], which support [UTSW]'s prior material breach of contract defense to Rohrmoos's counterclaim. But, as discussed later, Rohrmoos does not properly challenge the sufficiency of the evidence to support the jury's breach of contract findings. And unchallenged jury findings are binding on this court.</blockquote>
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559 S.W.3d 155, 160 (Tex. App.-Dallas 2015, pet. granted) (mem. op.) (footnote omitted) (citation omitted).<br />
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Rohrmoos filed a motion for reconsideration, asserting that the court of appeals overlooked Rohrmoos's primary argument under <i>Davidow</i> that a material breach of contract does not support the termination of a commercial lease. The court of appeals withdrew its opinion, vacated its judgment, and published a new opinion with the following language:</div>
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Rohrmoos's motion for reconsideration improperly now argues that we should ignore the answers to Questions One through Three [of the jury charge] because the right to terminate a commercial lease for failure to make repairs exists only with respect to a breach of the implied warranty of suitability that the Supreme Court established in <a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow v. Inwood North Professional Group-Phase I,</i> 747 S.W.2d 373, 376-77 (Tex. 1988)</a> and does not exist for a prior material breach of an express duty [to] repair contained in the lease. But Rohrmoos did not assert that objection to Questions One through Three in the trial court, or otherwise preserve the point in the trial court. <i>See</i> TEX. R. CIV. P. 274 ("A party objecting to a charge must point out distinctly the matter to which he objects and the grounds of his objection.").</blockquote>
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<i>Id.</i> at 163. The court of appeals decided Rohrmoos's remaining points of error against Rohrmoos and affirmed the trial court's judgment. <i>See id.</i> at 160-64, 169.<br />
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Regarding the $1,025,000 in attorney's fees, Rohrmoos challenged the award in the court of appeals on two grounds: (1) UTSW was not a "prevailing party" under the lease and therefore was not entitled to recover attorney's fees, and (2) the evidence was insufficient to support the fee award.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> <i>Id.</i> at 164-66. The court of appeals disagreed with Rohrmoos on both counts, holding that UTSW was a "prevailing party" under the lease, and that <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple I, Ltd. v. Olivas,</i> 370 S.W.3d 757 (Tex. 2012),</a> and its progeny, which use the "lodestar method" for calculating attorney's fees, do not apply in this case. 559 S.W.3d at 165-68. The court of appeals further held that billing records are not required to prove attorney's fees, and testimony about the attorney's experience, the total amount of fees, and the reasonableness of the fees complied with <i>Arthur Andersen</i> and supported the fee award. <i>Id.</i> at 167-68. Rohrmoos petitioned this Court for review, and we granted the petition. 61 Tex. Sup. Ct. J. 1505 (June 22, 2018).</div>
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II. Davidow `s Implied Warranty of Suitability</h2>
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Rohrmoos raises many arguments in this Court involving the <i>Davidow</i> implied warranty of suitability. Rohrmoos argues primarily that the court of appeals incorrectly assumed that a material breach of a commercial lease can justify termination, resulting in a holding that is contrary to our decision in <i>Davidow.</i>However, there are preservation concerns surrounding this issue, which we address first before turning to the applicability of <i>Davidow</i>'s implied warranty of suitability.</div>
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A. Preservation</h2>
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Rohrmoos maintains that the issue of whether a tenant can terminate a commercial lease based on the landlord's prior material breach is properly preserved for our review. Refuting the court of appeals' holding that Rohrmoos did not object to the jury charge based on its <i>Davidow</i> theory, or otherwise preserve the point in the trial court, Rohrmoos contends that the issue is legal and not factual—meaning it can be raised at any time, including on appeal. Rohrmoos also claims that it nevertheless did raise the issue repeatedly in the trial court and correctly preserved the issue for review in the court of appeals and this Court.<br />
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UTSW, on the other hand, argues that the <i>Davidow</i> issue is not properly before this Court. First, UTSW argues that Rohrmoos did not object to the jury charge regarding material breach and assert its <i>Davidow</i> theory in the trial court, thereby waiving the right to appeal the issue. Second, even if the <i>Davidow</i> argument had been preserved in the trial court, UTSW argues that Rohrmoos did not adequately brief the issue in the court of appeals, thus waiving the issue there. And finally, UTSW asserts that Rohrmoos waived the issue in this Court by not challenging the court of appeals' application of the law on preservation and waiver in its petition for review.<br />
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After a careful review of the record, we agree with Rohrmoos that the <i>Davidow</i>issue is preserved for our review. Importantly, the availability of termination as a remedy did not become an issue until the trial court entered judgment authorizing termination. When that happened, Rohrmoos promptly filed a motion to reform the judgment or, alternatively, for a new trial. In that motion, Rohrmoos asserted that "under Texas law, a tenant claiming material breach of lease is <i>not</i> entitled to terminate the lease unless the lease expressly provides for that remedy." Rohrmoos cited <i>Davidow,</i> saying that "[t]his is still the law in Texas today." This gave the trial court notice of Rohrmoos's complaint that the verdict and judgment were at least partially based on a theory of recovery that Rohrmoos contends did not support termination as a matter of law. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=9941512478836113085&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>United Scaffolding, Inc. v. Levine,</i>537 S.W.3d 463, 482 (Tex. 2017)</a> (holding that the preservation requirement was satisfied because the defendant raised the issue of an improper theory of recovery that could not support the judgment in a motion for judgment notwithstanding the verdict). Regarding the jury charge, there was no need to object because it did not mention termination as a remedy or ask whether UTSW was entitled to terminate.<br />
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Furthermore, whether a tenant can terminate a commercial lease under <i>Davidow</i>for material breach is a question of law for the court to decide, and it is not one which must be resolved before the jury can properly perform its fact-finding role. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2616455964292255096&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Holland v. Wal-Mart Stores, Inc.,</i> 1 S.W.3d 91, 94 (Tex. 1999) (per curiam)</a>(holding that a party's failure to object at the charge conference regarding attorney's fees was not fatal because "[t]he availability of attorney's fees under a particular statute is a question of law for the court" and is not one that must be answered before the jury can properly determine the facts in the case). A jury can determine whether there was a breach of contract, which party breached first, and whether there was a breach of the implied warranty of suitability—as the jury did here—and it can do all of this whether or not termination is an available remedy under <i>Davidow</i> for material breach of a commercial lease.<br />
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Additionally, the record indicates that Rohrmoos raised its argument under <i>Davidow</i> in the trial court. In a trial brief, Rohrmoos stated specifically that a commercial tenant "may not terminate the lease" unless it proves a breach of the implied warranty of suitability. Likewise, during trial, Rohrmoos's counsel explained:</div>
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Their allegation on [breach of contract] is that the landlord failed in his duty to repair, that's their allegation. Under Texas law, that does not entitle a party to terminate the contract. It entitles them to repair it and then to collect back from the landlord, there's an offset for rent. . . . So, if we breached because we did not do repairs, if that's what the jury agrees to, it does — they aren't entitled to terminate, that's a remedy they aren't entitled to. They're entitled to damages.</blockquote>
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When the trial court pressed for case law supporting this position, Rohrmoos's counsel responded, "I'm hanging my hat on <i>Davidow,</i> . . . [which says] as a matter of Texas law, a breach of the duty to repair is only remediable by damages." In no sense can we say that Rohrmoos failed to inform the trial court of its theory under <i>Davidow.</i> Indeed, our law on preservation is built almost entirely around putting the trial court on notice so that it can cure any error. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3195866027663516695&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burbage v. Burbage,</i> 447 S.W.3d 249, 258 (Tex. 2014)</a> ("Preservation of error reflects important prudential considerations recognizing that the judicial process benefits greatly when trial courts have the opportunity to first consider and rule on error." (citing <a href="https://scholar.google.com/scholar_case?case=14776684068188929381&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re B.L.D.,</i>113 S.W.3d 340, 350 (Tex. 2003)</a>)). Affording trial courts an opportunity to correct errors conserves judicial resources and prevents an appeal by ambush or otherwise having to order a new trial. <i>Id.</i> Here, there is no such concern because the trial court was given an opportunity to cure any error when it entered judgment and later in response to Rohrmoos's post-judgment motion. Rohrmoos properly preserved this issue in the trial court.<br />
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Rohrmoos also raised the argument in the court of appeals. We have firmly mandated that courts broadly construe issues to encompass the core questions and to reach all issues subsidiary to and fairly included within them. <i>See </i><a href="https://scholar.google.com/scholar_case?case=999307691430555375&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ditta v. Conte,</i> 298 S.W.3d 187, 190 (Tex. 2009)</a>; <i>see also</i> TEX. R. APP. P. 38.9 ("Because briefs are meant to acquaint the court with the issues in a case and to present argument that will enable the court to decide the case, substantial compliance with [briefing rules] is sufficient . . . ."). This mandate must be applied "reasonably, yet liberally," so that the merits of an appeal are addressed whenever "reasonably possible." <a href="https://scholar.google.com/scholar_case?case=999307691430555375&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ditta,</i> 298 S.W.3d at 190</a> (citing <a href="https://scholar.google.com/scholar_case?case=4065385211453731235&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perry v. Cohen,</i> 272 S.W.3d 585, 587 (Tex. 2008) (per curiam)</a>). Fairly subsumed in Rohrmoos's briefing to the court of appeals is the challenge to the trial court's judgment based on Rohrmoos's contention that, under <i>Davidow,</i> UTSW was not entitled to terminate the lease based on the landlord's prior material breach.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[3]" name="r[3]" style="color: #660099;">[3]</a></sup> The argument also clearly appears in Rohrmoos's reply brief to the court of appeals, although that is neither controlling nor dispositive regarding a litigant's duty to brief issues before appellate courts.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[4]" name="r[4]" style="color: #660099;">[4]</a></sup> <i>See</i> TEX. R. APP. P. 38.1(f) (stating that the appellant's opening brief "must state concisely all issues or points presented for review"). And while Rohrmoos may not have briefed <i>Davidow</i>'s holding as a specifically enumerated issue, we have long rejected any form-over-substance approach that leads to a rigid application of our preservation rules. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7019070699808102091&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Thota v. Young,</i> 366 S.W.3d 678, 690 (Tex. 2012)</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=3195866027663516695&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burbage,</i> 447 S.W.3d at 258</a> (holding that our "procedural rules are technical, but not trivial," and courts must "construe such rules liberally so that the right to appeal is not lost unnecessarily"). The entirety of Rohrmoos's briefing rests on the premise that <i>Davidow</i> does not allow UTSW to terminate the lease for Rohrmoos's material breach. This was sufficient to put the court of appeals on notice of Rohrmoos's understanding regarding <i>Davidow,</i> and to invite the court of appeals to correct any error of law as to <i>Davidow</i> and the availability of termination as a remedy.</div>
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Rohrmoos likewise adequately presented the argument in its petition for review and briefing in this Court. We now turn to the merits of Rohrmoos's <i>Davidow</i>argument and the availability of termination for material breach of a commercial lease.</div>
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B. Remedy of Termination</h2>
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Rohrmoos's position is that <i>Davidow</i> expressly prohibits termination as a remedy for material breach of a commercial lease. All this Court said in <i>Davidow,</i> however, is that there is an implied warranty of suitability in commercial leases, and what the implied warranty means:</div>
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Therefore, we hold there is an implied warranty of suitability by the landlord in a commercial lease that the premises are suitable for their intended commercial purpose. This warranty means that at the inception of the lease there are no latent defects in the facilities that are vital to the use of the premises for their intended commercial purpose and that these essential facilities will remain in a suitable condition. If, however, the parties to a lease expressly agree that the tenant will repair certain defects, then the provisions of the lease will control.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">747 S.W.2d at 377</a>. The Court did not, as Rohrmoos contends, make an absolute statement that a material breach of a commercial lease will never justify termination. In fact, if anything, the holding in <i>Davidow</i> leans the other way.<br />
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In <i>Davidow,</i> this Court addressed the implications of independent covenants in our property law, concluding that they were antiquated and unworkable in the modern lease setting. <i>See id.</i> at 375-77. The opinion begins with the observation that "[a]t common law, the lease was traditionally regarded as a conveyance of an interest in land, subject to the doctrine of <i>caveat emptor.</i>" <i>Id.</i> at 375. Once the landlord delivered the right of possession to the tenant, the tenant had a duty to pay rent as long as he was in possession. <i>Id.</i> This was true "even if the buildings on the leasehold were destroyed or became uninhabitable." <i>Id.</i> All lease covenants at common law were thus considered independent because the tenant, being in possession of everything he was entitled to under the lease, had to pay rent no matter what lease covenant the landlord breached. <i>Id.</i><br />
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This outdated common law concept, <i>Davidow</i> noted, "is no longer indicative of the contemporary relationship between the tenant and landlord." <i>Id.</i> at 376. Therefore, this Court first did away with independent covenants in residential leases in <a href="https://scholar.google.com/scholar_case?case=8813261986813686148&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kamarath v. Bennett,</i> 568 S.W.2d 658, 660-61 (Tex. 1978),</a> <i>superseded by statute,</i>Act of May 28, 1979, 66th Leg., R.S. ch. 780, §§ 1-18, 1979 Tex. Gen. Laws 1978. In that case, the Court implicitly held that the residential tenant's obligation to pay rent is dependent upon the landlord's performance under the then newly created warranty of habitability. <i>See id.</i><br />
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The Court then extended <i>Kamarath</i>'s reasoning to commercial leases in <i>Davidow:</i></div>
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We recognized in <i>Kamarath</i> that the primary objective underlying a residential leasing arrangement is "to furnish [the tenant] with quarters suitable for living purposes." The same objective is present in a commercial setting. A commercial tenant desires to lease premises suitable for their intended commercial use. A commercial landlord impliedly represents that the premises are in fact suitable for that use and will remain in a suitable condition. The tenant's obligation to pay rent and the landlord's implied warranty of suitability are therefore mutually dependent.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">747 S.W.2d at 377</a> (alteration in original) (citation omitted). Although the last sentence refers to the tenant's obligation to pay rent as being dependent on the landlord's implied warranty of suitability, there is no reason to conclude that the Court in <i>Davidow</i> did not intend to extend that same dependency to the landlord's obligations under the lease.<br />
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Indeed, the courts of appeals that have addressed a landlord's material breach in <i>residential</i> lease settings have held that termination is an available remedy. <i>See, e.g., Pala v. Maxim,</i> No. 01-01-00618-CV, 2002 WL 188567, at *4-5 (Tex. App.-Houston [1st Dist.] Feb. 7, 2002, no pet.) (not designated for publication) (holding that the tenant was excused from all obligations to perform under the lease when the landlord materially breached the lease by not replacing the countertops in the premises). And the courts of appeals that have addressed this issue in <i>commercial</i>lease settings have held the same. <i>See, e.g., Clark v. Porter,</i> No. 04-08-00520-CV, 2009 WL 2618359, at *3-4 (Tex. App.-San Antonio Aug. 26, 2009, pet. denied) (mem. op.) (noting that the tenant's obligations under the commercial lease could terminate and be excused by the landlord's earlier material breach); <a href="https://scholar.google.com/scholar_case?case=17649656381153485471&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Parts Indus. Corp. v. A.V.A. Servs., Inc.,</i> 104 S.W.3d 671, 680-81 (Tex. App.-Corpus Christi-Edinburg 2003, no pet.)</a> (approving the tenant's proper use of non-payment of rent as a remedy for breach of the landlord's express obligations under the commercial lease to repair a leaky roof). Rohrmoos cites no authority that has interpreted <i>Davidow</i> to mean that a tenant cannot terminate a commercial lease for material breach of the contract. This is because there is none, and we see no reason to hold otherwise.<br />
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To be clear, <i>Davidow</i> stands for the proposition that in a commercial lease, a landlord warrants that the property is suitable for the tenant's intended commercial purpose. <a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">747 S.W.2d at 377</a>. This implied warranty exists separately and apart from any obligation the landlord may have under the lease. <i>See id.</i> As a matter of law, the implied warranty is limited only by specific terms in the parties' commercial lease whereby a tenant expressly agrees to repair certain defects. <i>Id.</i> Parties are also free to contract out of the implied warranty by expressly waiving it in their contract. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16790488999838429623&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Gym-N-I Playgrounds, Inc. v. Snider,</i> 220 S.W.3d 905, 912 (Tex. 2007)</a> (holding that an "as is" clause that expressly waived <i>Davidow</i>'s implied warranty of suitability was sufficient to waive the implied warranty). Termination is available as a remedy for breach of the implied warranty of suitability. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow,</i> 747 S.W.2d at 377</a>. The same holds true for a landlord's material breach of the commercial lease.<br />
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Because we agree with the court of appeals that Rohrmoos did not properly preserve its challenge as to UTSW's breach of contract claim, as discussed below,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[5]" name="r[5]" style="color: #660099;">[5]</a></sup> the jury's finding that Rohrmoos materially breached the lease stands, and we cannot disturb that part of the trial court's judgment. We need not and do not address Rohrmoos's remaining arguments regarding the implied warranty of suitability under <i>Davidow.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[6]" name="r[6]" style="color: #660099;">[6]</a></sup></div>
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III. Breach of Commercial Lease</h2>
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After the court of appeals issued its opinion holding that Rohrmoos did not properly challenge the sufficiency of the evidence supporting the jury's breach of contract finding, Rohrmoos argued in its motion for reconsideration in the court of appeals that it did, in fact, challenge the jury's finding that Rohrmoos materially breached the lease. That is, notwithstanding Rohrmoos's clear headings in its opening briefing to the court of appeals and ensuing arguments—all challenging the implied warranty of suitability—Rohrmoos claims that the evidence UTSW used to prove that Rohrmoos breached the implied warranty of suitability is the same evidence UTSW used to prove that Rohrmoos materially breached the lease. A challenge to one is a challenge to all, argues Rohrmoos.<br />
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We disagree. At no point in its briefing to the court of appeals did Rohrmoos challenge the sufficiency of the evidence with respect to the jury's finding that Rohrmoos materially breached the lease. Nothing in Rohrmoos's briefing put the court of appeals on notice of such a challenge, even when read liberally. Moreover, we are not prepared to do away with our preservation requirements altogether by holding that Rohrmoos's challenge to the evidence supporting a breach of the implied warranty of suitability fairly subsumes a challenge to the evidence supporting a breach of contract. The two causes of action are different, each with entirely different elements that must be specifically pled, argued, and proved with supporting evidence. A challenge as to whether the plaintiff satisfied its burden of proof for one cause of action does not, by implication, challenge the evidence as to a separate cause of action. Had Rohrmoos not intended to base its challenge solely on <i>Davidow,</i> it should have argued alternative theories in the court of appeals to include a sufficiency challenge regarding material breach. Rohrmoos did not do so. This issue is not preserved for our review.</div>
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IV. Attorney's Fees</h2>
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In Texas, as in the federal courts, each party generally must pay its own way in attorney's fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue v. Kenny A. ex rel. Winn,</i> 559 U.S. 542, 550 (2010)</a>("The general rule in our legal system is that each party must pay its own attorney's fees and expenses."); <a href="https://scholar.google.com/scholar_case?case=15173305528652236159&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ashford Partners, Ltd. v. ECO Res., Inc.,</i> 401 S.W.3d 35, 41 (Tex. 2012)</a> ("As a general rule, litigants in Texas are responsible for their own attorney's fees and expenses in litigation."). But there are certain circumstances in which the prevailing party can recover fees from the opposing party. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12375315779177033661&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Baker Botts LLP v. ASARCO LLC,</i> 135 S. Ct. 2158, 2164 (2015)</a> ("Our basic point of reference when considering the award of attorney's fees is the bedrock principle known as the American Rule: Each litigant pays his own attorney's fees, win or lose, unless a statute or contract provides otherwise." (quoting <a href="https://scholar.google.com/scholar_case?case=13596907832122885396&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hardt v. Reliance Standard Life Ins. Co.,</i> 560 U.S. 242, 252-53 (2010)</a>)); <a href="https://scholar.google.com/scholar_case?case=6228523148686193851&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Nat'l Lloyds Ins. Co.,</i> 532 S.W.3d 794, 809 (Tex. 2017)</a> (orig. proceeding) ("Texas follows the American rule on attorney's fees, which provides that, generally, `a party may not recover attorney's fees unless authorized by statute or contract.'" (quoting <a href="https://scholar.google.com/scholar_case?case=5577571589296316264&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Wheelabrator Air Pollution Control, Inc. v. City of San Antonio,</i>489 S.W.3d 448, 453 n.4 (Tex. 2016)</a>)). When fee-shifting is authorized, whether by statute or contract, the party seeking a fee award must prove the reasonableness and necessity of the requested attorney's fees. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kinsel v. Lindsey,</i> 526 S.W.3d 411, 427 (Tex. 2017)</a> ("The party seeking recovery bears the burden of proof to support the award."); <a href="https://scholar.google.com/scholar_case?case=6228523148686193851&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nat'l Lloyds,</i> 532 S.W.3d at 809</a> ("When fee-shifting is authorized, the party seeking to recover those fees bears the burden of establishing the fees are reasonable and necessary." (citing <a href="https://scholar.google.com/scholar_case?case=593844185078297496&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Bent,</i> 487 S.W.3d 170, 184 (Tex. 2016)</a> (orig. proceeding); <a href="https://scholar.google.com/scholar_case?case=7289189175819495928&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Stewart Title Guar. Co. v. Sterling,</i>822 S.W.2d 1, 10 (Tex. 1991)</a>)).<br />
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With that in mind, we consider the two arguments Rohrmoos raises against the $1,025,000 award of attorney's fees. First, Rohrmoos argues that UTSW is not a "prevailing party" under this Court's precedent and is therefore not entitled to attorney's fees. Second, even if UTSW could be considered a prevailing party, Rohrmoos contends there was legally insufficient evidence to support UTSW's award of attorney's fees. We address each in turn.</div>
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A. Prevailing Party</h2>
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The parties' contract provided that "[i]n any action to enforce the terms of this Lease, the prevailing party shall be entitled to an award for its reasonable attorneys' fees." The lease did not further define the term "prevailing party." Rohrmoos cites our decision in <a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Intercontinental Group Partnership v. KB Home Lone Star LP,</i> 295 S.W.3d 650 (Tex. 2009),</a> to assert that courts should apply section 38.001 of the Texas Civil Practice and Remedies Code when a contract leaves the term "prevailing party" undefined. <i>See id.</i> at 653 (analyzing the applicability of Chapter 38 to a contract that did not define the term "prevailing party"); <i>see also</i> TEX. CIV. PRAC. & REM. CODE § 38.001(8) ("A person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for . . . an oral or written contract."). We have held that "[t]o recover attorney's fees under section 38.001, a party must (1) prevail on a cause of action for which attorney's fees are recoverable, and (2) recover damages." <a href="https://scholar.google.com/scholar_case?case=8994625690149538788&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Green Int'l, Inc. v. Solis,</i> 951 S.W.2d 384, 390 (Tex. 1997)</a>. But here, no damages were sought or awarded under the jury charge.<br />
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Although instructive, Chapter 38 and <i>Green International</i> are not controlling in this case. "Parties are free to contract for a fee-recovery standard either looser or stricter than Chapter 38's." <a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>KB Home,</i> 295 S.W.3d at 653</a>. The commercial lease here plainly states that "[i]n any action to enforce the terms of this Lease, the prevailing party shall be entitled to an award for its reasonable attorneys' fees." Nothing in that contract provision requires that a party receive any damages, as we have held is required under Chapter 38. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8994625690149538788&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Green Int'l,</i> 951 S.W.2d at 390</a>. The operative event under the contract is that a party prevail "[i]n any action to enforce the terms of [the] Lease." That is sufficiently different and less stringent than Chapter 38's standards, rendering section 38.001 inapplicable. The question remains, however, whether UTSW is a prevailing party under the contract when it did not seek or obtain monetary damages.<br />
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In <i>KB Home,</i> we considered whether the plaintiff prevailed for purposes of attorney's fees when the jury found that the defendant violated the contract but awarded no money damages to the plaintiff. <a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">295 S.W.3d at 652</a>. Like the commercial lease in this case, the contract in <i>KB Home</i> did not define "prevailing party." <i>Id.</i> We held, after looking to the plain meaning of the term "prevailing party," that the plaintiff did not prevail for purposes of attorney's fees because to prevail requires a plaintiff to "prove compensable injury and secure an enforceable judgment in the form of damages or equitable relief." <i>Id.</i> The plaintiff recovered no damages, secured no declaratory or injunctive relief, obtained no consent decree or settlement in its favor, and received nothing of value of any kind. <i>Id.</i> at 655. No misconduct was deterred or punished, nor did we "perceive any manner in which the outcome materially altered the legal relationship between" the plaintiff and defendant. <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=4029288770020466344&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Farrar v. Hobby,</i> 506 U.S. 103, 111-12 (1992),</a> which held that to prevail for a claimant means obtaining actual and meaningful relief, something that materially alters the legal relationship of the parties)). KB Home, the plaintiff, sought more than $1,000,000 in damages, but instead left the courthouse with nothing. <i>Id.</i><br />
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At first blush, <i>KB Home</i>'s holding appears damning to UTSW, but in that case we examined only what a <i>plaintiff</i> must prove to be a "prevailing party." <i>See id.</i> at 652 (holding that "a plaintiff must prove compensable injury and secure an enforceable judgment in the form of damages or equitable relief"). Here, although UTSW was the original plaintiff, it argues that it successfully defended—<i>as a defendant</i>—against Rohrmoos's breach of contract counterclaim. This is true. In an attempt to relieve itself of its future obligations to perform under the contract, UTSW sought a jury finding that Rohrmoos breached the lease first. The jury found that both Rohrmoos and UTSW breached the lease but that Rohrmoos breached first. The trial court entered judgment accordingly and ordered that Rohrmoos take nothing on its counterclaim for approximately $250,000 in back rent. The court of appeals employed this logic to hold that UTSW, as counter-defendant, was the prevailing party because it was vindicated by the court's judgment. 559 S.W.3d at 166 (citing <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=12256693937534648862&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Johnson v. Smith,</i> No. 07-10-00017-CV, 2012 WL 140654, at *3 (Tex. App.-Amarillo Jan. 18, 2012, no pet.)</a> (mem. op.)).<br />
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Interestingly, this specific question regarding prevailing defendants presented itself in <i>KB Home,</i> but we did not address it because it was not preserved for our review. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=15549225697323793606&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">295 S.W.3d at 659</a> ("The issue of whether a breaching-but-nonpaying defendant can be a `prevailing party' under an attorney's-fees provision like this is interesting legally, but not before us procedurally."). We did hold, however, that to prevail means to "obtain actual and meaningful relief, something that materially alters the parties' legal relationship." <i>Id.</i> at 652 (citing <a href="https://scholar.google.com/scholar_case?case=4029288770020466344&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Farrar,</i> 506 U.S. at 111-12</a>). Since <i>KB Home,</i> courts of appeals have held that a defendant who did not recover actual damages can be a prevailing party for defending against a plaintiff's breach of contract claim when it achieves a material alteration in its legal relationship with the plaintiff. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=9266964839563246842&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>SEECO, Inc. v. K.T. Rock, LLC,</i> 416 S.W.3d 664, 674 (Tex. App.-Houston [14th Dist.] 2013, pet. denied)</a> (holding that a successful breach of contract defense entitled the defendant to attorney's fees as the prevailing party); <a href="https://scholar.google.com/scholar_case?case=18116355329880442128&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Fitzgerald v. Schroeder Ventures II, LLC,</i> 345 S.W.3d 624, 629 (Tex. App.-San Antonio 2011, no pet.)</a> (concluding that there was no basis for denying the defendants attorney's fees under the contract with a "prevailing party" provision after analyzing and agreeing with another intermediate appellate court that held <i>KB Home</i> did not apply to attorney's fees sought by a defendant defending against a claim for breach of contract).<br />
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We agree. A defendant can obtain actual and meaningful relief, materially altering the parties' legal relationship, by successfully defending against a claim and securing a take-nothing judgment on the main issue or issues in the case. Our holding is consistent with the United States Supreme Court's interpretation of what it means to prevail as a defendant. <i>See </i><a href="https://scholar.google.com/scholar_case?case=4456280429408240319&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>CRST Van Expedited, Inc. v. Equal Emp't Opportunity Comm'n,</i> 136 S. Ct. 1642, 1651 (2016)</a> ("The defendant may prevail even if the court's final judgment rejects the plaintiff's claim for a nonmerits reason."). Here, UTSW was not just a plaintiff; it also successfully defended against Rohrmoos's breach of contract counterclaim, and the trial court rendered a take-nothing judgment in UTSW's favor as a counter-defendant. The jury's finding and the trial court's judgment altered the legal relationship between the parties. UTSW is therefore a "prevailing party" under the lease and is entitled to reasonable and necessary attorney's fees.</div>
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B. Legal Sufficiency</h2>
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The jury awarded $800,000 in attorney's fees for trial work and conditional fee awards of $150,000 for appeal to the intermediate appellate court and $75,000 for appeal to this Court. The trial court's judgment awarded UTSW fees according to the verdict and ordered that Rohrmoos take nothing. In this Court, Rohrmoos challenges the evidence offered by UTSW's attorney, Wade Howard, as legally insufficient to support the fee awards, claiming that the lodestar method applies and Howard should have submitted detailed proof, likely in the form of billing records, so the jury could have conducted a meaningful review to determine the reasonableness of the fees. Howard did not attempt to introduce billing records into evidence, nor did he testify to the details of his work, which Rohrmoos claims prevented the jury from determining whether the hundreds of hours spent were reasonable or necessary. Rohrmoos asserts that this award of more than $1,000,000 in attorney's fees cannot be based on the <i>ipse dixit</i> of the testifying expert. UTSW, on the other hand, argues that Howard's testimony is sufficient to support the fee award under <i>Arthur Andersen</i> because Howard testified to the total amount of fees, the reasonableness of the fees, and his experience.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[7]" name="r[7]" style="color: #660099;">[7]</a></sup></div>
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Before addressing the parties' arguments and the evidence presented in this case, we first examine the law governing attorney's fees in a fee-shifting situation. In short, to secure an award of attorney's fees from an opponent, the prevailing party must prove that: (1) recovery of attorney's fees is legally authorized, and (2) the requested attorney's fees are reasonable and necessary for the legal representation, so that such an award will compensate the prevailing party generally for its losses resulting from the litigation process.</div>
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1. Legally Authorized</h2>
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Legal authorization begins, as we have mentioned, with the American Rule, which provides that a prevailing party has no inherent right to recover attorney's fees from the non-prevailing party unless there is specific statutory or contractual authority allowing it. <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=6228523148686193851&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nat'l Lloyds,</i> 532 S.W.3d at 809</a>; <a href="https://scholar.google.com/scholar_case?case=3994486142378722337&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Tony Gullo Motors I, LP v. Chapa,</i> 212 S.W.3d 299, 310-11 (Tex. 2006)</a> (observing that Texas law has followed the American Rule for more than a century). When fee-shifting is authorized, whether by statute or contract, there are a few key principles that serve as the basis for our attorney's fee jurisprudence.<br />
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First, the idea behind awarding attorney's fees in fee-shifting situations is to compensate the prevailing party generally for its reasonable losses resulting from the litigation process. <i>See generally </i><a href="https://scholar.google.com/scholar_case?case=478653375077320916&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re Nalle Plastics Family Ltd. P'ship,</i> 406 S.W.3d 168, 173 (Tex. 2013)</a> (orig. proceeding) (observing that although attorney's fees are not awarded as damages, they can be viewed as compensating the prevailing party for its losses because the award helps make the party whole). The award and the ability to enforce it thus belongs to the party, not the attorney, absent express statutory or contractual text mandating otherwise. <i>See, e.g.,</i> TEX. FAM. CODE § 6.708(c) (providing that the court may award reasonable attorney's fees and expenses in suits for the dissolution of marriage, and "[t]he court may order the fees and expenses and any postjudgment interest to be paid directly to the attorney, who may enforce the order in the attorney's own name by any means available for the enforcement of a judgment for debt").<br />
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Second, because such fee awards are compensatory in nature, fee-shifting is not a mechanism for greatly improving an attorney's economic situation. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Pennsylvania v. Del. Valley Citizens' Council for Clean Air,</i> 478 U.S. 546, 565 (1986)</a> (noting that fee-shifting statutes are enacted to "enable private parties to obtain legal help in seeking redress for injuries" and not to improve significantly the financial lot of attorneys as a form of economic relief, "nor were they intended to replicate exactly the fee an attorney could earn through a private fee arrangement with his client"). Thus, only fees reasonable and necessary for the legal representation will be shifted to the non-prevailing party, and not necessarily the amount contracted for between the prevailing party and its attorney, as a client's agreement to a certain fee arrangement or obligation to pay a particular amount does not necessarily establish that fee as reasonable and necessary. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818</a> ("[W]e cannot agree that the mere fact that a party and a lawyer have agreed to a contingent fee means that the fee arrangement is in and of itself reasonable for purposes of shifting that fee to the defendant."). Stated differently, an amount incurred or contracted for is not conclusive evidence of reasonableness or necessity. <i>See id.</i> The fee claimant still has the burden to establish reasonableness and necessity. <a href="https://scholar.google.com/scholar_case?case=6228523148686193851&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nat'l Lloyds,</i> 532 S.W.3d at 809</a>.</div>
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Third, a party must be represented by an attorney to secure an award of attorney's fees. For example, courts have held that a corporate client can be awarded fees for representation by its in-house counsel. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=6589432628326918733&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Tesoro Petrol. Corp. v. Coastal Ref. & Mktg., Inc.,</i> 754 S.W.2d 764, 766-67 (Tex. App.-Houston [1st Dist.] 1988, writ denied)</a> ("[T]he award of reasonable attorney's fees for services performed by in-house counsel compensates the prevailing party for time counsel could have spent on other corporate matters." (citing <a href="https://scholar.google.com/scholar_case?case=9827509506089471595&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Textor v. Bd. of Regents of N. Ill. Univ.,</i> 711 F.2d 1387, 1396-97 (7th Cir. 1983)</a>)). Likewise, courts have held that a law firm can be awarded fees for representation by its own attorney. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=9092002027931913375&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Campbell, Athey & Zukowski v. Thomasson,</i> 863 F.2d 398, 400 (5th Cir. 1989)</a>(citing <i>Tesoro</i> to hold that "[j]ust as the corporation should be entitled to compensation for the time which in-house counsel could have spent on other corporate matters, so is a law firm entitled to compensation for the time which the representing attorney could have spent on other client matters"). Attorneys have been awarded fees for their own pro se representation.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[8]" name="r[8]" style="color: #660099;">[8]</a></sup> <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=17332136470704983107&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Beckstrom v. Gilmore,</i> 886 S.W.2d 845, 847 (Tex. App.-Eastland 1994, writ denied)</a> (awarding fees to an attorney representing himself pro se). <i>But see </i><a href="https://scholar.google.com/scholar_case?case=13326874147952835235&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Jackson v. State Office of Admin. Hearings,</i> 351 S.W.3d 290, 299-300 (Tex. 2011)</a> (denying attorney's fees to a pro se attorney because the attorney did not incur the fees as required by the applicable statute). And the State of Texas can be awarded fees under certain statutes for representation by Attorney General's Office attorneys. <i>See, e.g.,</i> TEX. GOV'T CODE § 402.006(c) ("In a case in which the state is entitled to recover a penalty or damages the attorney general is entitled, on behalf of the state, to reasonable attorney's fees and court costs."); <a href="https://scholar.google.com/scholar_case?case=16279772567226749330&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Merchs. Fast Motor Lines, Inc. v. State,</i> 917 S.W.2d 518, 523-24 (Tex. App.-Waco 1996, writ denied)</a> (upholding the State's attorney's fee award under section 402.006(c)).<br />
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Here, the parties' contract provides for a fee-shifting arrangement by stating, "In any action to enforce the terms of this Lease, the prevailing party shall be entitled to an award for its reasonable attorneys' fees." The contract does not define "reasonable" attorney's fees, so we turn to our attorney's fee jurisprudence in considering reasonableness.</div>
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2. Reasonable and Necessary</h2>
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As an initial matter, we note that parties in their contracts and the Legislature in its enabling statutes will often loosely employ a reasonable and necessary standard, sometimes using both terms "reasonable and necessary" and other times just "reasonable." <i>Compare</i> TEX. BUS. & COM. CODE § 17.50(d) ("Each consumer who prevails [under the Deceptive Trade Practices Act] shall be awarded court costs and reasonable and necessary attorneys' fees."), <i>with</i> TEX. CIV. PRAC. & REM. CODE § 38.001 (providing that "[a] person may recover reasonable attorney's fees from an individual or corporation, in addition to the amount of a valid claim and costs" for, among other things, breach of contract). The distinction between such provisions is immaterial. When a claimant wishes to obtain attorney's fees from the opposing party, the claimant must prove that the requested fees are both reasonable and necessary. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6228523148686193851&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nat'l Lloyds,</i> 532 S.W.3d at 809</a> (stating that a party seeking recovery of attorney's fees from the losing party "bears the burden of establishing the fees are reasonable <i>and</i> necessary" (emphasis added)). Both elements are questions of fact to be determined by the fact finder and act as limits on the amount of fees that a prevailing party can shift to the non-prevailing party. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17572494353043337676&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Transcon. Ins. Co. v. Crump,</i> 330 S.W.3d 211, 231 (Tex. 2010)</a> (observing that generally the reasonableness of particular fees presents a fact question that the fact finder must decide, as does necessity); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=15052939308021524816&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bocquet v. Herring,</i> 972 S.W.2d 19, 21 (Tex. 1998)</a> (explaining that reasonableness is a question of fact for the jury, and that "[t]he second limitation, that fees must be necessary, is likewise a fact question" (citing <a href="https://scholar.google.com/scholar_case?case=14527081982641822034&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Gen. Motors Corp. v. Bloyed,</i> 916 S.W.2d 949, 961 (Tex. 1996)</a>)).</div>
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Furthermore, some enabling statutes have an explicit reference to attorney's fees that are "incurred." <i>See, e.g.,</i> TEX. CIV. PRAC. & REM. CODE § 74.351(b)(1) (allowing the recovery of "reasonable attorney's fees and costs of court incurred by the physician or health care provider" for certain situations under the Texas Medical Liability Act); <i>id.</i> § 27.009(a)(1) (providing for recovery of "court costs, reasonable attorney's fees, and other expenses incurred in defending against the legal action as justice and equity may require" under the Texas Citizens Participation Act). In those instances, we have held that the word "incurred," just as the word "reasonable," acts to limit the amount of fees the court may award, and "[a] fee is incurred when one becomes liable for it." <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia v. Gomez,</i> 319 S.W.3d 638, 642 (Tex. 2010)</a> (holding that "[b]oth the adjective `reasonable' and the verb `incurred' [in section 74.351(b)(1)] act to limit the amount of attorney's fees the trial court may award"); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=13326874147952835235&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Jackson,</i> 351 S.W.3d at 299-300</a>(denying a pro se attorney fees under the Texas Public Information Act, which has an "incurred" requirement, because he "did not incur attorney's fees as that term is used in its ordinary meaning because he did not at any time become liable for attorney's fees"). As we have explained, attorney's fee awards are compensatory in nature, intended generally to make the prevailing party whole as to reasonable and necessary fees for successfully prosecuting or defending against a claim. <i>See </i><a href="https://scholar.google.com/scholar_case?case=478653375077320916&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Nalle Plastics,</i> 406 S.W.3d at 173</a>. But when statutes do not contain an explicit requirement that fees be "incurred," <i>e.g.,</i> TEX. CIV. PRAC. & REM. CODE § 38.001, we do not imply such a term; rather, we evaluate whether legally sufficient evidence supports that the amount of attorney's fees awarded is reasonable and necessary for the legal representation, so that an award of such fees will compensate the prevailing party generally for its losses resulting from the litigation process.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[9]" name="r[9]" style="color: #660099;">[9]</a></sup> <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long v. Griffin,</i> 442 S.W.3d 253, 255 (Tex. 2014) (per curiam)</a>. And when contracts provide for recovery of attorney's fees, we similarly do not imply terms but adhere to the parties' intent as expressed in the language of the contract. <i>See </i><a href="https://scholar.google.com/scholar_case?case=4094152628049594957&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>URI, Inc. v. Kleberg Cty.,</i> 543 S.W.3d 755, 763 (Tex. 2018)</a>(noting that "our primary objective is to ascertain and give effect to the parties' intent as expressed in the instrument"). Here, because there is no "incurred" requirement on the face of the contract, we evaluate whether legally sufficient evidence supports that the amount of attorney's fees awarded is reasonable and necessary for the legal representation, so that a fee-shifting award will compensate the prevailing party generally for its losses resulting from the litigation process.<br />
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Historically, claimants have proven reasonableness and necessity of attorney's fees through an expert's testimony—often the very attorney seeking the award—who provided a basic opinion as to the requested attorney's fees. <i>See generally </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=2202764497810435185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Penn Mut. Life Ins. v. Maner,</i> 109 S.W. 1084, 1084 (Tex. 1908)</a>. In recent years, Texas law has developed with references to the <i>Arthur Andersen</i> method (sometimes referred to as the "traditional" method) and the lodestar method for proving the reasonableness and necessity of attorney's fees. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=13218555992985684188&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Metroplex Mailing Servs.,</i> 410 S.W.3d at 900</a> (suggesting that "[u]nder the traditional method of awarding fees, [as opposed to the lodestar method,] documentary evidence is not a prerequisite"). The court of appeals in this case referenced both methods, distinguishing them and concluding that "Rohrmoos does not assert, and the record does not show, that the lodestar method was statutorily required or that [UTSW] `chose to prove up attorney's fees using this method.'" 559 S.W.3d at 167 (citations omitted). The court of appeals then affirmed the attorney's fee award, holding that "Howard's testimony concerning his experience, the total amount of fees, and the reasonableness of the fees charged was sufficient to support the award" under <i>Arthur Andersen. Id.</i> at 168.</div>
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These two seemingly different methods for evaluating claims for attorney's fees have created confusion for practitioners and courts alike. As explained below, however, the lodestar method developed as a "short hand version" of the <i>Arthur Andersen</i> factors and was never intended to be a separate test or method. With that in mind, we clarify the law governing recovery of attorney's fees in Texas courts. We begin by reviewing fee-shifting and attorney's fee jurisprudence in the federal courts.</div>
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a. <i>Johnson</i> Factors and Lodestar in Federal Courts</h2>
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To assist district courts in awarding attorney's fees, the Fifth Circuit in <a href="https://scholar.google.com/scholar_case?case=2009664919588302672&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Johnson v. Georgia Highway Express, Inc.,</i> 488 F.2d 714 (5th Cir. 1974),</a> set out twelve factors that a court should consider in determining a reasonable fee. <i>Id.</i> at 717-19. Those factors, consistent with the American Bar Association's Code of Professional Responsibility then in effect, included:</div>
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(1) the time and labor required;</blockquote>
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(2) the novelty and difficulty of the questions;</blockquote>
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(3) the skill requisite to perform the legal service properly;</blockquote>
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(4) the preclusion of other employment by the attorney due to acceptance of the case;</blockquote>
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(5) the customary fee;</blockquote>
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(6) whether the fee is fixed or contingent;</blockquote>
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(7) time limitations imposed by the client or the circumstances;</blockquote>
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(8) the amount involved and the results obtained;</blockquote>
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(9) the experience, reputation, and ability of the attorneys;</blockquote>
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(10) the "undesirability" of the case;</blockquote>
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(11) the nature and length of the professional relationship with the client; and</blockquote>
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(12) awards in similar cases.</blockquote>
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<i>Id. Johnson</i> was widely followed by other courts. <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=9948957338858604303&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Reynolds v. Coomey,</i> 567 F.2d 1166, 1167 (1st Cir. 1978)</a> (observing that the district court properly applied the <i>Johnson</i> factors as a guide in determining the amount of attorney's fees); <a href="https://scholar.google.com/scholar_case?case=7592022289383743275&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Allen v. Amalgamated Transit Union Local</i> <i>788,</i> 554 F.2d 876, 884 (8th Cir. 1977)</a>(approving the <i>Johnson</i> factors for determining the reasonableness of attorney's fee claims). But as the United States Supreme Court observed, this method "gave very little actual guidance to district courts" and "[s]etting attorney's fees by reference to a series of sometimes subjective factors placed unlimited discretion in trial judges and produced disparate results." <a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 563</a>.<br />
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For this reason, the Third Circuit developed the lodestar method for calculating reasonable attorney's fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1575737114906353290&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Lindy Bros. Builders, Inc. of Phila. v. Am. Radiator & Standard Sanitary Corp.</i> (<i>Lindy I</i>), 487 F.2d 161, 167-68 (3d Cir. 1973)</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 563-65</a> (providing a historical analysis of the development of the lodestar method). This method involved two steps. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1575737114906353290&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Lindy I,</i> 487 F.2d at 167-68</a>. First, for each attorney involved, the court was to multiply the hours reasonably spent on the case by a reasonable hourly rate of compensation to form a base number or "lodestar." <i>Id.</i> Second, the court could then adjust this lodestar figure to account for whether the expenses incurred and hours invested were based on a contingent agreement (i.e., without assurances of compensation), as well as the quality of the work performed, as evidenced by the recovery obtained and complexity of the case. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2115968421967738802&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Lindy Bros. Builders, Inc. of Phil. v. Am. Radiator & Standard Sanitary Corp.</i> (<i>Lindy II</i>), 540 F.2d 102, 117 (3d Cir. 1976)</a>. This lodestar formulation produced a more focused analysis than the <i>Johnson</i> factors by emphasizing the objective consideration of amount of time expended by the attorneys. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 563</a>(explaining that the lodestar "formulation emphasized the amount of time expended by the attorneys, and provided a more analytical framework for lower courts to follow than the unguided `factors' approach provided by <i>Johnson</i>"). It also allowed for greater consistency in awards of attorney's fees, although "allowing the courts to adjust the lodestar amount based on considerations of the `riskiness' of the lawsuit and the quality of the attorney's work could still produce inconsistent and arbitrary fee awards." <i>Id.</i><br />
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The United States Supreme Court refined the lodestar method in <a href="https://scholar.google.com/scholar_case?case=5179727217217722884&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hensley v. Eckerhart,</i> 461 U.S. 424 (1983),</a> adopting a hybrid approach for calculating reasonable attorney's fees that shared elements of both the lodestar method and <i>Johnson</i> factors. <i>See id.</i> at 433-35. The Court explained: "The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." <i>Id.</i> at 433. The Court's analysis was consistent with the lodestar's first step described by the Third Circuit, but then the Court we went on to state: "The product of reasonable hours times a reasonable rate does not end the inquiry. There remain other considerations that may lead the district court to adjust the fee upward or downward . . . ." <i>Id.</i> at 434. The "other considerations" included, but were not limited to, the <i>Johnson</i> factors, but the Court made clear that many of the factors listed in <i>Johnson</i> would usually be "subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate." <i>Id.</i> at 434 n.9 (citation omitted).</div>
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The Court further refined its views on the appropriate method for determining a reasonable fee award in <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum v. Stenson,</i> 465 U.S. 886 (1984),</a> again affirming its preference for the lodestar method. <i>See id.</i> at 888. Consistent with previous rulings, <i>Blum</i> explained that the proper first step in determining a reasonable attorney's fee is to multiply "the number of hours reasonably expended on the litigation times a reasonable hourly rate." <i>Id.</i> But the Court went a step further, emphasizing that this base calculation is not an initial approximation of the final award to be made but is instead a presumed reasonable fee if the applicant "has carried his burden of showing that the claimed rate and number of hours are reasonable." <i>Id.</i> at 897. The <i>Blum</i> Court also restricted the adjusting factors courts could use to increase or decrease the base lodestar amount. <i>See id.</i> at 898-900. That is, after affirming <i>Hensley</i>'s position that many of the <i>Johnson</i> factors "are subsumed within the initial calculation" of the lodestar, the Court specifically held in <i>Blum</i> that the "novelty and complexity of the issues," "the special skill and experience of counsel," the "quality of representation," and the "results obtained" from the litigation generally cannot serve as independent bases for increasing the base fee award because those considerations are fully reflected in the lodestar amount. <i>Id.</i> Upward adjustments of the lodestar figure, although still permissible, are proper only in certain "rare" and "exceptional" cases, supported by both detailed findings by the lower courts and specific evidence on the record. <i>See id.</i>at 898-901. And in a later ruling, the Court clarified that contingent fee arrangements also should not enhance the base lodestar:</div>
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We note at the outset that an enhancement for contingency would likely duplicate in substantial part factors already subsumed in the [base] lodestar. The risk of loss in a particular case (and, therefore, the attorney's contingent risk) is the product of two factors: (1) the legal and factual merits of the claim, and (2) the difficulty of establishing those merits. The second factor, however, is ordinarily reflected in the lodestar—either in the higher number of hours expended to overcome the difficulty, or in the higher hourly rate of the attorney skilled and experienced enough to do so. Taking account of it again through lodestar enhancement amounts to double counting.</blockquote>
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The first factor (relative merits of the claim) is not reflected in the [base] lodestar, but there are good reasons why it should play no part in the calculation of the award. It is, of course, a factor that <i>always</i>exists (no claim has a 100% chance of success), so that computation of the lodestar would never end the court's inquiry in contingent-fee cases.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington v. Dague,</i> 505 U.S. 557, 562-63 (1992)</a> (citations omitted).</div>
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In its most current form, the lodestar method as described in <i>Blum</i> has achieved dominance in the federal courts and has "become the guiding light" for fee-shifting jurisprudence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12994163253801574929&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Gisbrecht v. Barnhart,</i> 535 U.S. 789, 801 (2002)</a> (quoting <a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington,</i> 505 U.S. at 562</a>)). As recently as 2010, the Court again outlined the value of the lodestar calculation.</div>
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<i>See </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 551-57</a>. The Court explained:</div>
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Although the lodestar method is not perfect, it has several important virtues. First, in accordance with our understanding of the aim of fee-shifting statutes, the lodestar looks to "the prevailing market rates in the relevant community." Developed after the practice of hourly billing had become widespread, the lodestar method produces an award that <i>roughly</i> approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case. Second, the lodestar method is readily administrable; and unlike the <i>Johnson</i> approach, the lodestar calculation is "objective" and thus cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results.</blockquote>
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<i>Id.</i> at 551-52 (citations omitted). The Court went on to observe that the presumptive reasonableness of the base lodestar calculation accounts for most of the <i>Johnson</i> factors:</div>
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[W]e have noted that "the lodestar figure includes most, if not all, of the relevant factors constituting a `reasonable' attorney's fee" and have held that an enhancement may not be awarded based on a factor that is subsumed in the lodestar calculation. We have thus held that the novelty and complexity of a case generally may not be used as a ground for an enhancement because these factors "presumably [are] fully reflected in the number of billable hours recorded by counsel." We have also held that the quality of an attorney's performance generally should not be used to adjust the lodestar "[b]ecause considerations concerning the quality of a prevailing party's counsel's representation normally are reflected in the reasonable hourly rate."</blockquote>
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<i>Id.</i> at 553 (citations omitted) (second and third alteration in original). This remains the standard for attorney's fee awards in federal courts today.</div>
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b. <i>Arthur Andersen</i> Factors and Lodestar in Texas Courts</h2>
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Similar to the federal system, Texas jurisprudence first developed a factor-based method for the fact finder to assess what fees are reasonable and necessary, the cornerstone for shifting attorney's fees away from the prevailing party. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818</a>. Like the Fifth Circuit in <i>Johnson,</i> this Court identified non-exclusive factors to guide the fact finder in determining the reasonableness and necessity of attorney's fees. <i>See id.</i> Those factors are:</div>
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(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;</blockquote>
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(2) the likelihood . . . that the acceptance of the particular employment will preclude other employment by the lawyer;</blockquote>
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(3) the fee customarily charged in the locality for similar legal services;</blockquote>
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(4) the amount involved and the results obtained;</blockquote>
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(5) the time limitations imposed by the client or by the circumstances;</blockquote>
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(6) the nature and length of the professional relationship with the client;</blockquote>
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(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and</blockquote>
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(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.</blockquote>
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<i>Id.</i> (quoting TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04, <i>reprinted in</i> TEX. GOV'T CODE, tit. 2, subtit. G, app. A (TEX. STATE BAR R. art. X, § 9)). We explained that without evidence of the factors identified in Disciplinary Rule 1.04, the fact finder has no meaningful way to determine if the fees sought are in fact reasonable and necessary. <i>Id.</i> at 818-19. The factors were designed to be applicable across all fee-shifting awards, whether determined by the jury or trial court. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6298326732350685872&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Young v. Qualls,</i> 223 S.W.3d 312, 314 (Tex. 2007) (per curiam)</a>.<br />
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In 2012, we provided additional guidelines for determining reasonableness and necessity by introducing the lodestar calculation to Texas jurisprudence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 760</a> (analyzing a fee award under the Texas Commission on Human Rights Act (TCHRA)); <i>see also</i> TEX. LAB. CODE § 21.259(a) ("In a proceeding under [the TCHRA], a court may allow the prevailing party . . . a reasonable attorney's fee as part of the costs."). We explained that:</div>
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Under the lodestar method, the determination of what constitutes a reasonable attorney's fee involves two steps. First, the court must determine the reasonable hours spent by counsel in the case and a reasonable hourly rate for such work. The court then multiplies the number of such hours by the applicable rate, the product of which is the base fee or lodestar. The court may then adjust the base lodestar up or down (apply a multiplier), if relevant factors indicate an adjustment is necessary to reach a reasonable fee in the case.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 760</a> (citations omitted). The relevant factors are straight from <i>Arthur Andersen. Id.</i> at 760-61.<br />
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We ultimately overturned the fee award in <i>El Apple</i> even though the trial court employed the lodestar method, concluding that the evidence was legally insufficient to support the reasonableness and necessity of the fee award. <i>Id.</i> at 763-64. The plaintiff's attorneys testified that they collectively spent 890 hours on the case (as estimated), and that those hours were attributed to "the number of discovery instruments and pleadings, the number of depositions and witness interviews, as well as the quality of representation." <i>Id.</i> at 759. They also testified that their time was reasonable and necessary given the results obtained and nature of the case. <i>Id.</i> But that was not enough. <i>See id.</i> at 762-63. The starting point for determining a lodestar fee award, we noted, is the number of hours "reasonably expended on the litigation," and proof of reasonable hours "should include the basic facts underlying the lodestar, which are: (1) the nature of the work, (2) who performed the services and their rate, (3) approximately when the services were performed, and (4) the number of hours worked." <i>Id.</i> Applying that standard to the case, we held that the evidence was insufficient because:</div>
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[N]either attorney indicated how the 890 hours they spent in the aggregate were devoted to any particular task or category of tasks. Neither attorney presented time records or other documentary evidence. Nor did they testify based on their recollection of such records. The attorneys instead based their time estimates on generalities such as the amount of discovery in the case, the number of pleadings filed, the number of witnesses questioned, and the length of the trial. While all this is relevant, it provides none of the specificity needed for the trial court to make a meaningful lodestar determination. The court could not discern from the evidence how many hours each of the tasks required and whether that time was reasonable. Without at least some indication of the time spent on various parts of the case, a court has little basis upon which to conduct a meaningful review of the fee award.</blockquote>
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<i>Id.</i> at 763.<br />
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After <i>El Apple,</i> questions surfaced regarding whether the lodestar method applies in cases where the request for attorney's fees is not based on the TCHRA or other state statutes that require application of the lodestar method. But any doubt as to the lodestar method's applicability should have been resolved when we applied <i>El Apple</i>'s holding to a $339,000 award under a different fee-shifting statute that did not "require that attorney's fees be determined under a lodestar method." <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>City of Laredo v. Montano,</i> 414 S.W.3d 731, 736 (Tex. 2013) (per curiam)</a>; <i>see also</i> TEX. PROP. CODE § 21.019(c) (allowing courts to award reasonable and necessary attorney's fees incurred by a property owner successfully defending a condemnation suit). Although we did not explain why, the opinion made clear that we viewed the lodestar method as having an expansive application to be used when evidence of reasonable hours worked multiplied by reasonable hourly rates can provide an objective analytical framework that is presumptively reasonable. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736</a>. Moreover, we gave additional guidance for sufficient proof when we determined that, like the proof in <i>El Apple,</i> the plaintiff's testimony in <i>Montano</i> was devoid of substance and could not support an award of reasonable attorney's fees. <i>See id.</i> We overturned the fee award, explaining that time estimates based on generalities were not sufficient to support a fee-shifting award:</div>
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Gonzalez offered nothing to document his time in the case other than the "thousands and thousands and thousands of pages" generated during his representation of the Montanos and his belief that he had reasonably spent 1,356 hours preparing and trying the case. We rejected similar proof in <i>El Apple.</i></blockquote>
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Gonzalez's testimony that he spent "a lot of time getting ready for the lawsuit," conducted "a lot of legal research," visited the premises "many, many, many, many times," and spent "countless" hours on motions and depositions is not evidence of a reasonable attorney's fee under lodestar. . . . In <i>El Apple,</i> we said that a lodestar calculation requires certain basic proof, including itemizing specific tasks, the time required for those tasks, and the rate charged by the person performing the work.</blockquote>
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<i>Id.</i> (citations omitted).<br />
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A year after that, we again confirmed our position that the lodestar method applies when the fee claimant puts on evidence of reasonable fees by relating the hours worked multiplied by hourly rates for a total fee. <a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255</a>. We overturned the fee award in <i>Long,</i> just as we had in <i>El Apple</i> and <i>Montano:</i></div>
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Here, as in <i>El Apple</i> and <i>Montano,</i> the affidavit supporting the request for attorney's fees only offers generalities. It indicates that one attorney spent 300 hours on the case, another expended 344.50 hours, and the attorneys' respective hourly rates. The affidavit posits that the case involved extensive discovery, several pretrial hearings, multiple summary judgment motions, and a four and one-half day trial, and that litigating the matter required understanding a related suit that settled after ten years of litigation. But no evidence accompanied the affidavit to inform the trial court [of] the time spent on specific tasks. . . . [W]ithout any evidence of the time spent on specific tasks, the trial court had insufficient information to meaningfully review the fee request.</blockquote>
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<i>Id.</i> (citations omitted).<br />
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Based on our recent precedent, it should have been clear that the lodestar method developed as a "short hand version" of the <i>Arthur Andersen</i> factors and was never intended to be a separate test or method. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7289189175819495928&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Stewart Title,</i> 822 S.W.2d at 10</a>("Although courts should consider several factors when awarding attorney's fees, a short hand version of these considerations is that the trial court may award those fees that are `reasonable and necessary' for the prosecution of the suit."); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=17306533183869561873&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hill v. Shamoun & Norman, LLP,</i> 544 S.W.3d 724, 744 (Tex. 2018)</a> (remanding for a new trial to determine attorney's fees and referencing <i>Arthur Andersen</i> factors but citing <a href="https://scholar.google.com/scholar_case?case=14527081982641822034&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bloyed,</i> 916 S.W.2d at 961,</a> for the proposition that on remand, "any fee awarded . . . should be tested against the lodestar approach to prevent grossly excessive attorney's fee awards"). As we have explained, if the non-prevailing party is subject to paying the prevailing party's attorney's fees, the fees must be reasonable and necessary for success in prosecuting or defending the claim, and the award is intended to compensate the prevailing party generally for its legal representation. The lodestar method provides for this, as it is a focused and objective analysis of whether the fees sought are reasonable and necessary, yielding a base figure that reflects most <i>Arthur Andersen</i> factors and is thus presumptively reasonable. But that figure is subject to adjustment if the presumption is overcome by other factors not accounted for in the base lodestar figure.<br />
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Incidentally, as the court of appeals did in this case, some courts have decided that testimony about an attorney's experience, the total amount of fees, and the reasonableness of the fees complies sufficiently with <i>Arthur Andersen</i> to support an attorney's fee award. <i>See, e.g.,</i> 559 S.W.3d at 168; <i>Jeff Kaiser, PC v. State,</i> No. 03-15-00019-CV, 2016 WL 1639731, at *5 (Tex. App.-Austin Apr. 20, 2016, pet. denied) (mem. op.); <i>Jimoh v. Nwogo,</i> No. 01-13-00675-CV, 2014 WL 7335158, at *7 (Tex. App.-Houston [1st Dist.] Dec. 23, 2014, no pet.) (mem. op.); <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=17592887039383016169&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Ferrant v. Graham Assocs. Inc.,</i> No. 02-12-00190-CV, 2014 WL 1875825, at *9 (Tex. App.-Fort Worth May 8, 2014, no pet.)</a> (mem. op.); <a href="https://scholar.google.com/scholar_case?case=13218555992985684188&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Metroplex Mailing Servs.,</i> 410 S.W.3d at 900</a>. We have clearly held, however, that generalities such as these are not sufficient to support a fee-shifting award under the lodestar method, which applies in fee-shifting situations. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255</a>; <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736</a>; <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 763</a>.<br />
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Additionally, some courts of appeals have relied on our decision in <i>Garcia,</i> in which we stated that an attorney's testimony about his experience and his estimate of a reasonable and necessary fee in a case was "some evidence of a reasonable fee." <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">319 S.W.3d at 642</a>; <i>see, e.g., </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=2260922154314583464&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Barnett v. Schiro,</i> No. 05-16-00999-CV, 2018 WL 329772, at *10 (Tex. App.-Dallas Jan. 9, 2018, pet. filed)</a> (mem. op.) (citing <i>Garcia</i>to say that an "attorney's brief testimony about experience, total amount of fees, and that [the] total amount of fees was reasonable and necessary is `some evidence' of reasonableness of attorney's fees"). But as we explained in <i>El Apple, Garcia</i> involved a statute that required a trial court to dismiss a healthcare liability claim and award attorney's fees if the plaintiff did not timely serve an expert report. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 762</a> (citing <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia,</i> 319 S.W.3d at 641</a>); <i>see also</i> TEX. CIV. PRAC. & REM. CODE § 74.351(b)(1) (mandating that if, "as to a defendant physician or health care provider, an expert report has not been served within [120 days], the court . . . shall . . . enter an order that: (1) awards to the affected physician or health care provider reasonable attorney's fees and costs of court incurred"). The report was not provided in <i>Garcia,</i> but the trial court did not award attorney's fees as required by the statute after the fee claimant testified briefly to his experience and his customary fee for handling a case up to the point of dismissal. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia,</i> 319 S.W.3d at 640-41</a>. The court of appeals in <i>Garcia</i>affirmed, concluding that the attorney's testimony was conclusory and therefore no evidence of the reasonable attorney's fees incurred by Dr. Garcia. <a href="https://scholar.google.com/scholar_case?case=13517618087555898622&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia v. Gomez,</i> 286 S.W.3d 445, 449 (Tex. App.-Corpus Christi-Edinburg 2008),</a> <i>aff'd in part, rev'd in part,</i> <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">319 S.W.3d 638 (Tex. 2010)</a>. However, "[w]e concluded that the statute mandated the award of attorney's fees, on motion, and that the attorney's uncontested, albeit cursory, testimony about his fee, along with the other circumstances, <i>was enough to present the issue to the court.</i>" <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 762</a> (emphasis added) (citing <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia,</i> 319 S.W.3d at 641</a>). But what we <i>did not say</i> was that such cursory testimony was sufficient to support an award of attorney's fees. <i>Garcia</i> is confined to a no-evidence challenge and should not be read, in any way, as a guiding statement on the standard for whether evidence is legally sufficient to support a fee-shifting award of attorney's fees.<br />
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Related to <i>Garcia</i> is our decision in <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kinsel v. Lindsey</i></a><i>,</i> which likewise deals with the evidence to defeat a no-evidence challenge. We held:</div>
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To support its claim for attorney's fees, counsel for the Kinsels testified regarding legal services rendered and various work performed through trial, each attorney's related experience, and what factors each considered to determine a reasonable fee. Although the court of appeals found this testimony "lacking in specifics," it was "at the very least, the quantum of evidence found sufficient" by this Court in <a href="https://scholar.google.com/scholar_case?case=16306918893560279939&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Garcia v. Gomez,</i> 319 S.W.3d 638 (Tex. 2010)</a>. We agree.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">526 S.W.3d at 427</a> (citation omitted). Because the claimant had not segregated legal fees accrued among the one recoverable and two non-recoverable claims, the court of appeals remanded the case to the trial court for a new trial on attorney's fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7894856053722013900&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Jackson Walker, LLP v. Kinsel,</i> 518 S.W.3d 1, 25-28 (Tex. App.-Amarillo 2015),</a> <i>aff'd and remanded sub nom. </i><a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kinsel v. Lindsey,</i> 526 S.W.3d 411 (Tex. 2017)</a>. Having determined that the claimant presented some evidence of fees incurred on the recoverable claim, we affirmed the remand for a redetermination of fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kinsel,</i> 526 S.W.3d at 427-28</a>. As in <i>Garcia,</i> our opinion in <i>Kinsel</i> addressed only the quantum of proof required to defeat a no-evidence challenge.</div>
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c. Applicable Standard for Proving Reasonable Attorney's Fees</h2>
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(1) Base Calculation: Time × Rate = Presumptively Reasonable</h2>
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It should have been clear from our opinions in <i>El Apple, Montano,</i> and <i>Long</i> that we intended the lodestar analysis to apply to any situation in which an objective calculation of reasonable hours worked times a reasonable rate can be employed. We reaffirm today that the fact finder's starting point for calculating an attorney's fee award is determining the reasonable hours worked multiplied by a reasonable hourly rate, and the fee claimant bears the burden of providing sufficient evidence on both counts. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 760</a>. Sufficient evidence includes, at a minimum, evidence of (1) particular services performed, (2) who performed those services, (3) approximately when the services were performed, (4) the reasonable amount of time required to perform the services, and (5) the reasonable hourly rate for each person performing such services. <i>See id.</i> at 762-63. This base lodestar figure should approximate the reasonable value of legal services provided in prosecuting or defending the prevailing party's claim through the litigation process. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=10071675908916809931&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blanchard v. Bergeron,</i> 489 U.S. 87, 93 (1989)</a>(explaining that a fee-shifting statute "contemplates reasonable compensation . . . for the time and effort expended by the attorney for the prevailing [party], no more and no less"). And the lodestar calculation should produce an objective figure that approximates the fee that the attorney would have received had he or she properly billed a paying client by the hour in a similar case. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 551</a>(noting that "the lodestar method produces an award that <i>roughly</i> approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case" (emphasis in original)). This readily administrable and objectively reasonable calculation is the standard for calculating the reasonableness and necessity of attorney's fees in a fee-shifting situation. <i>See id.</i> at 551-52 (recognizing that the lodestar method is administrable and objective, cabins discretion of trial court judges, permits meaningful judicial review, and produces reasonably predictable results).<br />
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It is worth repeating that because fee-shifting awards are to be reasonable and necessary for successfully prosecuting or defending against a claim, reasonableness and necessity are not dependent solely on the contractual fee arrangement between the prevailing party and its attorney. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=10071675908916809931&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blanchard,</i> 489 U.S. at 96</a> (explaining that "[f]ee awards are to be reasonable, reasonable as to billing rates and reasonable as to the number of hours spent in advancing the successful claims"); <a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 565</a> (explaining that fee-shifting statutes are not "intended to replicate exactly the fee an attorney could earn through a private fee arrangement with his client"); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818-19</a> (holding that although "[a] contingent fee may indeed be a reasonable fee from the standpoint of the parties to the contract," it is not "in and of itself reasonable for purposes of shifting that fee to the defendant"; the fact finder is still required to "decide the question of attorney's fees specifically in light of the work performed in the very case for which the fee is sought"). Therefore, the base lodestar calculation should reflect hours reasonably expended for services necessary to the litigation. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5179727217217722884&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hensley,</i> 461 U.S. at 434</a> ("Counsel for the prevailing party should make a good-faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission."); <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 762</a> ("Charges for duplicative, excessive, or inadequately documented work should be excluded." (citing <a href="https://scholar.google.com/scholar_case?case=2911279578939088288&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Watkins v. Fordice,</i> 7 F.3d 453, 457 (5th Cir. 1993)</a>)). Likewise, the base calculation should reflect a reasonable hourly rate for the attorney to prosecute or defend successfully against the claim at issue.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[10]" name="r[10]" style="color: #660099;">[10]</a></sup> <i>See </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 551-56</a> (recognizing that the lodestar method "[d]eveloped after the practice of hourly billing had become widespread" and provides a rough approximation of such billing practices, but "if hourly billing becomes unusual, an alternative to the lodestar method may have to be found"); <a href="https://scholar.google.com/scholar_case?case=8733218411511751532&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Missouri v. Jenkins,</i> 491 U.S. 274, 283 (1989)</a> (stating that fee-shifting awards for attorney's fees "are to be based on market rates for the services rendered"); <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 895 n.11</a> (recognizing that "determining an appropriate `market rate' for the services of a lawyer is inherently difficult," as rates are based on supply and demand in a particular community, as well as on a lawyer's experience, skill, and reputation; however, a rate shown to be "in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation" is "normally deemed to be reasonable"). In light of our recent attorney's fees jurisprudence, we clarify today that there is a presumption that the base lodestar calculation, when supported by sufficient evidence, reflects the reasonable and necessary attorney's fees that can be shifted to the non-prevailing party. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 760</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 551-52</a>; <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 897</a> (explaining that the base lodestar figure is presumed reasonable if the claimant "has carried his burden of showing that the claimed rate and number of hours are reasonable").</div>
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(2) Enhancing or Reducing Base Calculation</h2>
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Some commentators have opined that our willingness to apply the lodestar method to any situation in which an attorney testifies to reasonable hours multiplied by reasonable rates—as we did in <i>Long</i> and <i>Montano</i>—renders <i>El Apple</i>'s two-step process invalid. <i>See, e.g.,</i> Mark E. Steiner, <i>Will</i> El Apple <i>Today Keep Attorneys' Fees Away?,</i> 19 J. CONSUMER & COM. L. 114, 117 (2016) (expressing that both <i>Long</i> and <i>Montano</i> "appear to apply the term `lodestar' to any situation that involves recovering attorneys' fees on the basis of `reasonable hours times reasonable rate.' There is no sense that lodestar is a two-step process, which is how the Court had described it in <i>El Apple</i>"). To the contrary, both <i>Long</i> and <i>Montano</i> analyzed the issue of whether the evidence was sufficient under our precedent dealing with the lodestar method—based on <i>El Apple. See </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255</a>; <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736</a>. Our opinions in <i>Long</i> and <i>Montano</i>referenced and followed <i>El Apple,</i> and both resulted in remand to the trial court for redetermination of attorney's fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255-56</a>; <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736-37</a>. The second part of <i>El Apple</i>'s two-step analysis—adjusting the base calculation up or down based on relevant considerations—remains very much intact. Like our federal counterpart, we recognize that the base lodestar figure accounts for most of the relevant <i>Arthur Andersen</i> considerations.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[11]" name="r[11]" style="color: #660099;">[11]</a></sup> <i>See </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818</a>; <i>cf. </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553</a>; <a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington,</i> 505 U.S. at 562-63</a>; <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 898-900</a>. And an enhancement or reduction of the base lodestar figure cannot be based on a consideration that is subsumed in the first step of the lodestar method. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553</a> (reaffirming that a lodestar enhancement may not be based on a factor that is included in the base lodestar calculation). As in the federal courts, the base lodestar calculation usually includes at least the following considerations from <i>Arthur Andersen:</i> "the time and labor required," "the novelty and difficulty of the questions involved," "the skill required to perform the legal service properly," "the fee customarily charged in the locality for similar legal services," "the amount involved," "the experience, reputation, and ability of the lawyer or lawyers performing the services," "whether the fee is fixed or contingent on results obtained," "the uncertainty of collection before the legal services have been rendered," and "results obtained."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[12]" name="r[12]" style="color: #660099;">[12]</a></sup> <i>See </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818</a>; <i>cf. </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553</a> (noting that the base lodestar calculation appropriately accounts for the novelty and complexity of a case because those considerations are presumably "fully reflected in the number of billable hours recorded by counsel," and that the quality of the attorney's performance is likewise already accounted for because "considerations concerning the quality of a prevailing party's counsel's representation normally are reflected in the reasonable hourly rate" (quoting <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 898</a>; <a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 566</a>)); <a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington,</i> 505 U.S. at 562-63</a> (disallowing an enhancement for contingency because it would likely duplicate in substantial part considerations already subsumed in the base lodestar calculation, as "[t]he risk of loss in a particular case (and, therefore, the attorney's contingent risk) . . . is ordinarily reflected in the lodestar—either in the higher number of hours expended to overcome the difficulty, or in the higher hourly rate of the attorney skilled and experienced enough to do so"). These considerations therefore may not be used to enhance or reduce the base calculation to the extent that they are already reflected in the reasonable hours worked and reasonable hourly rate. If a fee claimant seeks an enhancement, it must produce specific evidence showing that a higher amount is necessary to achieve a reasonable fee award. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553</a> (observing that the requirement of "specific evidence" is essential "if the lodestar method is to realize one of its chief virtues, <i>i.e.,</i> providing a calculation that is objective and capable of being reviewed on appeal"); <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 760</a>. Likewise, if a fee opponent seeks a reduction, it bears the burden of providing specific evidence to overcome the presumptive reasonableness of the base lodestar figure.</div>
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d. Standard Summary</h2>
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To summarize, the lodestar method as we presented it in <i>El Apple</i> applies for determining the reasonableness and necessity of attorney's fees in a fee-shifting situation:</div>
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Under the lodestar method, the determination of what constitutes a reasonable attorney's fee involves two steps. First, the [fact finder] must determine the reasonable hours spent by counsel in the case and a reasonable hourly rate for such work. The [fact finder] then multiplies the number of such hours by the applicable rate, the product of which is the base fee or lodestar. The [fact finder] may then adjust the base lodestar up or down (apply a multiplier), if relevant factors indicate an adjustment is necessary to reach a reasonable fee in the case.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">370 S.W.3d at 760</a> (citations omitted). Thus, the fact finder must first determine a base lodestar figure based on reasonable hours worked multiplied by a reasonable hourly rate. <i>Id.</i> In a jury trial, the jury should be instructed that the base lodestar figure is presumed to represent reasonable and necessary attorney's fees, but other considerations may justify an enhancement or reduction to the base lodestar; accordingly, the fact finder must then determine whether evidence of those considerations overcomes the presumption and necessitates an adjustment to reach a reasonable fee. <i>Id.</i> at 765; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 558-59</a>(suggesting that adequate appellate review is only feasible when the fact finder makes reasonably specific findings as to each step of the fee determination). <i>Arthur Andersen</i> lists relevant considerations that may justify an adjustment, but as explained above, considerations already incorporated into the base calculation may not be applied to rebut the presumption that the base calculation reflects reasonable and necessary attorney's fees. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818</a>; <i>cf. </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553</a>; <a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington,</i> 505 U.S. at 562-63</a>; <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 898-900</a>. General, conclusory testimony devoid of any real substance will not support a fee award. Thus, a claimant seeking an award of attorney's fees must prove the attorney's reasonable hours worked and reasonable rate by presenting sufficient evidence to support the fee award sought. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255-56</a>; <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736-37</a>; <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 763-64</a>. Sufficient evidence includes, at a minimum, evidence of (1) particular services performed, (2) who performed those services, (3) approximately when the services were performed, (4) the reasonable amount of time required to perform the services, and (5) the reasonable hourly rate for each person performing such services. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 762-63</a>.<br />
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As the United States Supreme Court has observed, "[t]he lodestar method was never intended to be conclusive in all circumstances"; rather, "there is a `strong presumption' that the [base] lodestar figure is reasonable, but that presumption may be overcome in those rare circumstances in which the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee." <a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 553-54</a>. Thus, the second step of the lodestar method allows for the base lodestar figure to be adjusted up when considerations not already accounted for in the first step establish that the base lodestar figure represents an unreasonably low fee award, depriving fair compensation to the prevailing party's attorney. Likewise, the base lodestar figure can be adjusted down when it is established, based on considerations not already accounted for in the first step, to be an unreasonably high or excessive fee award, creating a windfall for the prevailing party or its attorney.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[13]" name="r[13]" style="color: #660099;">[13]</a></sup></div>
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e. Billing Records</h2>
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Contemporaneous billing records are not required to prove that the requested fees are reasonable and necessary. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 763</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736</a> (explaining that "<i>El Apple</i> does not hold that a lodestar fee can only be established through time records or billing statements"). Nevertheless, billing records are <i>strongly</i> encouraged to prove the reasonableness and necessity of requested fees when those elements are contested. In <i>El Apple,</i>we acknowledged the value of contemporaneous records for lodestar calculations:</div>
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An attorney could, of course, testify to these details, but in all but the simplest cases, the attorney would probably have to refer to some type of record or documentation to provide this information. Thus, when there is an expectation that the lodestar method will be used to calculate fees, attorneys should document their time much as they would for their own clients, that is, contemporaneous billing records or other documentation recorded reasonably close to the time when the work is performed.</blockquote>
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<a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;">370 S.W.3d at 763</a>; <i>see also id.</i> at 762 (observing that hours "not properly billed to one's client also are not properly billed to one's adversary" under a fee-shifting statute (quoting <a href="https://scholar.google.com/scholar_case?case=5179727217217722884&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hensley,</i> 461 U.S. at 434</a>)). Creating the documents makes them available for production, provides a basis for testifying as to the reasonableness and necessity of the requested fees, and permits cross-examination.<br />
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Importantly, however, we are not endorsing satellite litigation as to attorney's fees. The fact finder will generally not benefit from attorneys cross-examining each other point-by-point on every billable matter. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5179727217217722884&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Hensley,</i> 461 U.S. at 437</a> ("A request for attorney's fees should not result in a second major litigation. Ideally, of course, litigants will settle the amount of a fee. Where settlement is not possible, the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates."). Parties should use discovery and pretrial procedure to evaluate attorney's fee claims and the evidence supporting them, then present to the fact finder the evidence relevant to determining a reasonable and necessary fee as discussed in this opinion.</div>
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3. Howard's Testimony</h2>
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Finally, we consider the evidence presented at trial supporting the award of attorney's fees. As mentioned, the trial court awarded $1,025,000 in attorney's fees, including the conditional awards. Because UTSW secured the attorney's fees in the final judgment over Rohrmoos, we focus on the testimony of UTSW's attorney, Wade Howard. On direct examination, Howard testified that "all I've done for my 20 years" of legal experience is litigation. "The standard rate[] that I charge is generally around $430 an hour. I know that sounds ridiculously high. I often think myself it is ridiculously high. But it is — it pays for a lot of things," namely, the logistics of running a law firm. Howard then stated:</div>
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I have handled cases similar in nature to this. . . . [A] reasonable and necessary amount of hours in this case, I would think would be at around 750 to 1,000 hours. So that would put the attorney's fees at my rate somewhere in the 3 to $400,000 range. Again, I know that sounds very high, but I do believe based on my experience, 20 years of experience in the legal profession, and handling these types of cases at this magnitude that [this] is really what would be a reasonable and necessary fee if this case were worked up by both sides in a reasonable and necessary fashion.</blockquote>
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Howard went on:</div>
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This case, for whatever reason, has not been worked up in a reasonable fashion. Now, of course, I'm going to say that I've put most of that on the other side. And I'll talk about that in a little more detail. But because of that, the fees in this case are much closer — my fees are much closer to 800 — over $800,000. Now, I will be the first to admit, that is a ridiculous number. Okay. They should never have gotten [that] high.</blockquote>
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Howard explained how Rohrmoos's actions, in his view, caused the fees to reach such a high amount. He talked about the volume of document production, saying his firm had to "search literally millions of emails to find the documents that you see here in the courtroom. And we [had] to review all of those emails when we [ran] our searches to make sure that they're relevant to this case and also that they don't contain any patient information."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[14]" name="r[14]" style="color: #660099;">[14]</a></sup><br />
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Next, Howard described having to produce large numbers of hard-copy documents. "It was about 60 bankers boxes of documents," Howard said, and "[t]hose bankers boxes will hold — the small ones will hold around 3,000 pages, the larger ones around 7,000 pages of documents." Tasked with reviewing all those documents were the paralegals, who bill the client for their time. They "had to go through every single one of those documents, page by page, and remove all of the old patient files that we had in [those] boxes of documents. . . . That's one of the reasons why the costs in this case have gotten so ridiculously high."<br />
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From there, Howard went to depositions. "Okay. When somebody — when a witness gets deposed, both sides have to prepare for the deposition. Then you have to go to the deposition. Then you have time reviewing the deposition afterwards, getting it summarized and making it ready for if it's actually called to trial." Those get expensive, "[s]o that's another thing that's contributed." Howard testified summarily that more than forty depositions occurred in this case. He then ended with an analogy aimed at shedding light on Rohrmoos's actions:</div>
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[I]t's kind of like when you go to the doctor and the doctor says, I think I need to run the following tests. You, as the patient, just kind of go, okay. . . . And when a lawyer has that kind of control, they can just run up the fees. They can just say, oh, I need to investigate this. I need to do research on that. I want to file a motion on that.</blockquote>
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This all led to a lengthy discussion of motion practice. "I think [there were] four or five motions to compel" and a forty-page motion for summary judgment. Howard explained:</div>
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I can tell you from my experience, to draft a motion of that length is expensive. Probably was 30, $40,000 to draft that type of detailed motion on the law.</blockquote>
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I then have to respond to it. I file my response. He then filed a 30 or 35-page what they call reply to my response. Then we have to have a hearing on it. Lasted for several hours. That one motion alone, probably cost the parties $80,000. And in my opinion, it just wasn't necessary. It wasn't reasonable. It wasn't necessary. And it just caused both parties to spend a lot of money that wasn't necessary.</blockquote>
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And so, you know, again, I'm sure when [opposing counsel] takes the stand, he's going to say, I've done things that have run on up the cost. The simple reality is, both parties probably have to take some blame. The costs got way out of control here and the fees were not reasonable or necessary. I think the 3 to $400,000 range is where fees are reasonable and necessary. I do think, however, that if you find that we prevail in this case, that our fees should be something higher than that. I won't even wager a guess as to what it should be higher than that. Whatever you think is necessary. But I think our fees were higher than what were reasonable and necessary because we had to respond to all of the experts that [opposing counsel] designated. We had to appear at all the depositions that he noticed. I can't just ignore those things.</blockquote>
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So, if we prevail, I think our fees should be somewhat higher [than] the 3 to $400,000 range, but I'll leave that to your discretion. But I will tell you that if both sides had just approached this case in a reasonable fashion, the fees in this case should not have exceeded 3 or $400,000.</blockquote>
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That concluded Howard's direct testimony. Rohrmoos's counsel immediately moved to strike it, asserting that Howard did not comply with the <i>Arthur Andersen</i>factors to prove the reasonableness of the fees. The trial court denied the motion after Howard responded, "The amount in controversy, Your Honor, the complexity of the case, my knowledge and experience. I think that's really the factors that were relevant in this case." The court of appeals then affirmed the award, holding that "Howard's testimony concerning his experience, the total amount of fees, and the reasonableness of the fees charged was sufficient to support the award" under <i>Arthur Andersen.</i> 559 S.W.3d at 168.<br />
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We understand Howard's testimony that $800,000 in attorney's fees for trial work may seem unreasonable for a breach of lease case that implicated roughly $300,000 in damages.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[15]" name="r[15]" style="color: #660099;">[15]</a></sup> We also understand Howard's position that opposing counsel's actions drove the cost of litigation, in most instances, and that made UTSW's $800,000 in requested attorney's fees necessary, even reasonable.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#[16]" name="r[16]" style="color: #660099;">[16]</a></sup>However true this may be, Howard's justification for why his fees should be $800,000—searching through "millions" of emails and reviewing "hundreds of thousands" of papers in discovery, more than forty depositions taken, and a forty-page motion for summary judgment—is too general to establish that the requested fees were reasonable and necessary. Without detail about the work done, how much time was spent on the tasks, and how he arrived at the $800,000 sum, Howard's testimony lacks the substance required to uphold a fee award. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7752149503288853185&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Long,</i> 442 S.W.3d at 255-56</a>; <a href="https://scholar.google.com/scholar_case?case=3357965753455607838&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Montano,</i> 414 S.W.3d at 736-37</a>; <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple,</i> 370 S.W.3d at 763-64</a>. Attorneys should not have to take the stand for days and testify to every detail of a three-year-long case, but they must provide more than what Howard has said here. We conclude that Howard's testimony is legally insufficient to support the attorney's fee award.</div>
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V. Conclusion</h2>
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In summary, we hold that a commercial tenant can terminate a commercial lease based on the landlord's prior material breach. Our holding is not inconsistent with <a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow v. Inwood North Professional Group-Phase I,</i> 747 S.W.2d 373 (Tex. 1988)</a>. We affirm the court of appeals' judgment as to breach of the implied warranty of suitability, but on different grounds. We also hold that the evidence used to prove attorney's fees is not legally sufficient to support the fee award. Because the record does not provide the requisite details to support a fee award, we reverse the court of appeals' judgment as to the attorney's fee award and remand the case to the trial court for a redetermination of fees consistent with this opinion.<br />
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[1]" name="[1]" style="color: #660099;">[1]</a> Rohrmoos's and UTSW's predecessors executed the original lease in 1996. Rohrmoos and UTSW modified and ratified that original lease agreement in March 2003.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[2]" name="[2]" style="color: #660099;">[2]</a> Rohrmoos also argued that UTSW was not entitled to recover attorney's fees under the Declaratory Judgment Act because UTSW allegedly abandoned its declaratory judgment claim prior to trial. <i>See</i>TEX. CIV. PRAC. & REM. CODE § 37.009 (stating that "[i]n any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just"). The court of appeals declined to address this issue because it affirmed the award of attorney's fees on other grounds. <i>See</i> 559 S.W.3d at 164-65.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[3]" name="[3]" style="color: #660099;">[3]</a> We note that Rohrmoos relied heavily on <i>Davidow</i> in its briefing to the court of appeals. Although unclear at times, there are multiple instances in which Rohrmoos presented its theory that <i>Davidow</i>does not allow the remedy of termination upon a showing that the landlord materially breached the commercial lease. Rohrmoos asserted:</div>
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UTSW's claims of breach of lease from failing to make repairs should have been dealt with on their proper foundation in fact and law, the remedy being money damages. "Thus, a tenant is still under a duty to pay rent even though his landlord has breached his covenant to make repairs." <a href="https://scholar.google.com/scholar_case?case=16935173706944978409&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Davidow v. Inwood North Prof. Group-Phase I,</i> 747 S.W.2d 373, 375 (Tex. 1988)</a> (confirming that failure to make repairs does not justify rescission).</div>
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. . . .</div>
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A lease property can obviously experience repair issues without causing the landlord to be in breach of the lease. Were this not so, the implied warranty of suitability created in <i>Davidow</i> would have been completely unnecessary since the concept of "breach" (or "material breach" in Mr. Howard's world) would have already provided the identical remedy of rescission.</div>
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. . . .</div>
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Even if Rohrmoos had failed to repair property defects (which it did not), the remedy under Texas law for a tenant in that situation is money damages. . . . For recompense, the tenant can sue for damages or it can make the repairs itself and deduct the cost from rent owed. What a tenant <i>cannot</i> do is claim "breach of lease" from repairs not being performed on its preferred timetable and then vacate the premises years later. If that were the law, the <i>slightest</i> unrepaired defect in the property: a burned-out light bulb, would afford the tenant with the <i>harshest</i> remedy known to the law: rescission. And, as shown above, if that were the law, there would have been no need for the warranty of unsuitability.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[4]" name="[4]" style="color: #660099;">[4]</a> Rohrmoos argued:</div>
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Indeed, if UTSW was correct, and if a "material" breach allowed for lease termination, then the Supreme Court's decision in <i>Davidow</i> was totally unnecessary. After all, what is the purpose of adopting the <i>Davidow</i> warranty if every lease can already be "materially" breached and that alone would allow for termination/rescission? The fact is, before <i>Davidow,</i> a landlord's breach of a commercial lease afforded the tenant with only limited recourse—which did <i>not</i> include termination or refusal to pay rent. For UTSW to continue to argue that "material breach" allows for termination is contrary to over 100 years of Texas law and renders the <i>Davidow</i> factors irrelevant.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[5]" name="[5]" style="color: #660099;">[5]</a> <i>See</i> discussion <i>infra</i> Part III.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[6]" name="[6]" style="color: #660099;">[6]</a> Rohrmoos asserts many arguments in an attempt to negate the jury's finding that Rohrmoos breached the <i>Davidow</i> implied warranty of suitability, including: (1) no competent evidence supports the finding that the <i>Davidow</i> implied warranty was breached; (2) UTSW waived its <i>Davidow</i> warranty claims because it remained on the property and continued to use the facility; (3) the parties agreed to an express warranty in the lease under Article 13 that superseded <i>Davidow</i> and therefore made <i>Davidow</i>'s implied warranty inapplicable as a matter of law; and (4) there is an "as is" clause in the lease that renders <i>Davidow</i>'s implied warranty inapplicable as a matter of law. None of these arguments are helpful to Rohrmoos, however, unless it also defeats the jury's finding that it materially breached the commercial lease.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[7]" name="[7]" style="color: #660099;">[7]</a> To support its position, UTSW relies heavily on case law from courts of appeals that developed after our decision in <a href="https://scholar.google.com/scholar_case?case=5556380148629311996&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>El Apple I, Ltd. v. Olivas,</i> 370 S.W.3d 757 (Tex. 2012),</a> for the proposition that testimony regarding the total amount of fees, the reasonableness of the fees, the number of hours worked, the average hourly rate, the nature of the case, and the attorney's experience is sufficient to support a fee award under <i>Arthur Andersen. See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=13218555992985684188&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Metroplex Mailing Servs., LLC v. RR Donnelley & Sons Co.,</i>410 S.W.3d 889, 900 (Tex. App.-Dallas 2013, no pet.)</a> ("It has consistently been held that an attorney's testimony about his experience, the total amount of fees, and the reasonableness of the fees charged is sufficient to support an award." (citing <a href="https://scholar.google.com/scholar_case?case=2137813955717407134&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>In re A.B.P.,</i> 291 S.W.3d 91, 99 (Tex. App.-Dallas 2009, no pet.)</a>)); <a href="https://scholar.google.com/scholar_case?case=15476476611224779303&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Woodhaven Partners, Ltd. v. Shamoun & Norman, LLP,</i> 422 S.W.3d 821, 846 (Tex. App.-Dallas 2014, no pet.)</a> (citing <i>Metroplex</i> for the same proposition).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[8]" name="[8]" style="color: #660099;">[8]</a> The United States Supreme Court takes a different view regarding attorney pro se representation, at least under the Civil Rights Attorney's Fees Award Act of 1976. <i>See generally </i><a href="https://scholar.google.com/scholar_case?case=13809078291952328068&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Kay v. Ehrler,</i> 499 U.S. 432, 435-36 (1991)</a> (denying attorney's fees to a pro se attorney because "the word `attorney' assumes an agency relationship, and it seems likely that Congress contemplated an attorney-client relationship as the predicate for an award under § 1988" of the Act (footnotes omitted)).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[9]" name="[9]" style="color: #660099;">[9]</a> We note that section 38.004 of the Civil Practice and Remedies Code authorizes a court, in certain proceedings involving fee-shifting under section 38.001, to take judicial notice of usual and customary attorney's fees. TEX. CIV. PRAC. & REM. CODE § 38.004 ("The court may take judicial notice of the usual and customary attorney's fees and of the contents of the case file without receiving further evidence in: (1) a proceeding before the court; or (2) a jury case in which the amount of attorney's fees is submitted to the court by agreement."). In such instances, there is a rebuttable presumption that the usual and customary fees are reasonable. <i>Id.</i> § 38.003 ("It is presumed that the usual and customary attorney's fees for a claim of the type described in Section 38.001 are reasonable.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[10]" name="[10]" style="color: #660099;">[10]</a> We recognize that when fee agreements provide for arrangements other than hourly billing, the attorney will not be able to present evidence of a particular hourly rate billed or paid for the services performed. In those instances, the fee claimant, through its expert, has the burden of showing that the rate claimed for purposes of the base lodestar calculation reflects a reasonable market rate given considerations in <i>Arthur Andersen,</i> including the attorney's experience and expertise, the novelty and complexity of the questions involved, any special skill required for the representation, the attorney's risk in accepting such representation, which may be reflected in a contingent fee agreement, and any other considerations that would factor into an attorney's fee negotiations if the attorney were to bill hourly. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2557094556311036785&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Burlington,</i> 505 U.S. at 566</a> (noting that "attorneys factor in the particular risks of a case in negotiating their fee"); <a href="https://scholar.google.com/scholar_case?case=1400760332852773921&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Del. Valley Citizens' Council,</i> 478 U.S. at 566</a> (recognizing that "considerations concerning the quality of a prevailing party's counsel's representation normally are reflected in the reasonable hourly rate"); <a href="https://scholar.google.com/scholar_case?case=1751498717150008353&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Arthur Andersen,</i> 945 S.W.2d at 818-19</a> (explaining that for contingent fee cases, the jury must decide reasonable and necessary fees in light of the work performed in that case, and reflecting the non-exclusive list of factors, arriving at a specific dollar amount). In this way, the contingent nature of a fee agreement, or the nature of an alternative fee arrangement, is taken into account in calculating the presumptively reasonable fee in the first step of the analysis, prior to any potential adjustments for <i>Arthur Andersen</i> factors that have not yet been considered, as discussed below. <i>See infra</i> Part IV.B.2.c.(2).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[11]" name="[11]" style="color: #660099;">[11]</a> Although <i>Arthur Andersen</i> speaks in terms of factors, we employ the term "considerations" because there are multiple considerations within some of the factors.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[12]" name="[12]" style="color: #660099;">[12]</a> Because attorney's fee determinations in federal court are within the district court's discretion, the "results obtained" factor is generally considered in calculating the base lodestar, and thus "it normally should not provide an independent basis for increasing the fee award." <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 900</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=14594284913231871642&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Perdue,</i> 559 U.S. at 554</a> (considering "results obtained" in conjunction with superior attorney performance and indicating that in rare and exceptional circumstances where specific evidence demonstrates that the base lodestar fee would not have been "adequate to attract competent counsel," superior attorney performance may justify an enhancement (quoting <a href="https://scholar.google.com/scholar_case?case=14012192812481338663&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Blum,</i> 465 U.S. at 897</a>)). In Texas courts, the base lodestar calculation of reasonable hours times a reasonable rate should account for any results obtained up to trial. But to the extent that the results obtained are not reflected in the base lodestar, then the fact finder may determine whether the results obtained consideration necessitates an adjustment to achieve a reasonable fee under the second step of the lodestar method. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=11590415779891751624&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&as_sdt=4,44" style="color: #660099;"><i>Barker v. Eckman,</i> 213 S.W.3d 306, 313-14 (Tex. 2006)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[13]" name="[13]" style="color: #660099;">[13]</a> We emphasize that, pursuant to an attorney-client fee agreement, a client could ultimately owe its attorney more fees than the amount of the award shifting fees to the non-prevailing party. However, fact finders should be concerned with awarding reasonable and necessary fees, not with any contractual obligations that may remain between the attorney and client.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[14]" name="[14]" style="color: #660099;">[14]</a> On cross-examination, Howard explained that it was probably "tens of millions" of documents, rather than just "millions," but they did not have to physically review each document. Computer software designed for discovery in litigation narrowed down the final number to around "hundreds of thousands of pages of documents that we put eyes on."</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[15]" name="[15]" style="color: #660099;">[15]</a> Indeed, Rohrmoos requested $1,300,000 in attorney's fees. Even the trial court was baffled by the high amount of attorney's fees for a breach of lease case.</div>
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THE COURT: Okay. So, now, let's go [back] to the amount [of attorney's fees].</div>
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MR. HOWARD: Yes, Your Honor.</div>
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THE COURT: We all had those discussions both on the record and off the record of what this court's impression was of the attorney's fees and how this case was driven. I believe that defense counsel testified to how much in attorney's fees?</div>
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MR. HOWARD: $1.3 million, Your Honor, for the landlord. And there were —</div>
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THE COURT: And how much was — how much rent did you owe if you had lost?</div>
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MR. HOWARD: The less than 300.</div>
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THE COURT: $300,000. And the attorney's fees for defendant, once again, were how much?</div>
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MR. HOWARD: The landlord's were $1.3 million.</div>
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THE COURT: And how much did — were you yours?</div>
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MR. HOWARD: Ours were over $800,000.</div>
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THE COURT: On a breach of lease case?</div>
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MR. HOWARD: Yes, Your Honor.</div>
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THE COURT: And if you moved out and you move out too early, before the term of the lease was up, how much would you have owed had you lost, one more time?</div>
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MR. HOWARD: Less than $300,000.</div>
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THE COURT: Think about it. Thank you. All right. You can continue.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=12251745114633409184&q=Rohrmoos+Venture+v.+UTSW+DVA+Healthcare&hl=en&scisbd=2&as_sdt=4,44#r[16]" name="[16]" style="color: #660099;">[16]</a> Howard explained himself to the court:</div>
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Which is exactly why, Your Honor, that what I testified to was that the reasonable necessary fees in this case should have been in the 3 to $400,000. But primarily because of the Defendant's conduct, hiring twelve experts —</div>
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. . . .</div>
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[The Defendants] spent $1.3 million [in attorney's fees]. Of course, I'm — you know, he notices up 37 depositions including, you know, 15 third-party depositions, I have to attend. He hires twelve experts. You know, I have to depose them and know what they're going to say. And all of that evidence came in about all the things that the landlord did that caused the Plaintiff to incur significantly more fees than what should have been reasonable and necessary. But if you recall, I did say that we did have to do those. They were reasonable. They were necessary. The amount charged was reasonable. The time spent doing those tasks was reasonable. It just — the actions they took.<br />
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<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-JEW8QBNqp9I/XTN_5Olb9wI/AAAAAAAAQbc/c95kB9jswFk2N6okB96rMqO_7jA6lEF0QCLcBGAs/s1600/DSC00175-Arthur-Andersen.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="958" data-original-width="1600" height="238" src="https://1.bp.blogspot.com/-JEW8QBNqp9I/XTN_5Olb9wI/AAAAAAAAQbc/c95kB9jswFk2N6okB96rMqO_7jA6lEF0QCLcBGAs/s400/DSC00175-Arthur-Andersen.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Arthur Andersen Immortalized </td></tr>
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<b style="color: #3d85c6;"><u>LIST OF SCOTX ATTORNEY FEE PROOF PRECEDENTS</u>: </b></div>
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<div>
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997). </div>
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<div>
El Apple I, Ltd v. Olivas, 370 S.W.3d 757 (Tex. 2012)<br />
City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013)<br />
Long v. Griffin, 442 S.W.3d 253 (Tex. 2014) (per curiam)<br />
<a href="http://search.txcourts.gov/Case.aspx?cn=16-0107&coa=cossup" target="_blank">Hill v. Shamoun & Norman, LLP</a>, <a href="http://search.txcourts.gov/Case.aspx?cn=16-0107&coa=cossup" target="_blank">16-0107</a>, 544 S.W.3d 724 (Tex. 2018)<br />
<a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0006&coa=cossup" target="_blank">Rohrmoos Venture v. UTSW DVA Healthcare, LLP</a>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0006&coa=cossup" target="_blank">16-0006</a>, ___ S.W.3d ___, 2019 Lexis 389 (Tex. Apr. 26, 2019)<br />
<a href="http://search.txcourts.gov/Case.aspx?cn=18-0278&coa=cossup">Barnett v. Schiro</a>, No. <a href="http://search.txcourts.gov/Case.aspx?cn=18-0278&coa=cossup">18-0278</a> (Tex. Apr. 26, 2019)(applying Rohrmoos standard in Chapter 38 fee award context)<br />
<a href="https://scholar.google.com/scholar_case?case=4369221700158192288&q=nath+v+texas+children%27s+sanctions+case&hl=en&as_sdt=4,44&as_ylo=2019">Nath v. Texas Children's Hospital</a>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0110&coa=cossup" target="_blank">17-0110</a> (Tex. June 21, 2019) (apply Rohrmoos standard to award of attorney's fees as sanctions)<br />
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<u><b><span style="color: #3d85c6;">FULL CASE STYLE</span></b></u>: ROHRMOOS VENTURE, ERIC LANGFORD, DAN BASSO, AND TOBIN GROVE v. UTSW DVA HEALTHCARE, LLP, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0006&coa=cossup">16-0006</a> (Tex. Apr. 26, 2019) (Op. by Green, J.)<br />
Petition for Review from Dallas County; 5th Court of Appeals District (05-14-00774-CV, 559 SW3d 155, 10-05-15)<br />
The Court affirms in part and reverses in part the court of appeals' judgment and remands the case to the trial court.</div>
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<span class="a70" style="background-color: white; font-size: 17.3333px; text-align: center;"><span class="a70" style="font-size: 13pt;">Justice Green delivered the <a data-udi="umb://media/a522abd7a6c64bbca9180fd05bd5894c" href="https://www.txcourts.gov/media/1443994/160006.pdf" rel="noopener noreferrer" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="160006">opinion of the Court</a>.</span></span><span style="background-color: white; color: #333333; font-size: 17.3333px; text-align: center;"></span><br />
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<a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0006" style="color: #551a8b; text-decoration-line: none;" title="16-0006 Electronic Briefs">View Electronic Briefs </a>| <a href="http://www.texasbarcle.com/CLE/TSCPlayVideo.asp?sCaseNo=16-0006" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="16-0006 Video">Oral Argument</a> </div>
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Commentary on Rohrmoos: <a href="http://dx.doi.org/10.2139/ssrn.3402040">Texas Supreme Court Tells Bar and Bench to Follow the Lodestar</a>: Post-Opinion Amicus Brief in Rohrmoos v. UTSW, No.16-0006 (Tex. 2019) (June 7, 2019). Available at SSRN: https://ssrn.com/abstract=3402040 or http://dx.doi.org/10.2139/ssrn.3402040<br />
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Commentary on Hill v. Shamoun & Norman: <a href="http://dx.doi.org/10.2139/ssrn.3152327" target="_blank">Recovery of Attorney's Fees in the Absence of a Contract in Texas</a>: Amicus Curiae Brief on Behalf of the Public in Hill v. Shamoun (Tex 2018) (January 23, 2018). Available at SSRN: https://ssrn.com/abstract=3152327<br />
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-63514926790854868222019-04-24T11:46:00.000-05:002019-05-23T12:46:24.782-05:00What limitations period applies to a claim of civil conspiracy? Texas Supreme Court answers the question: It will depend<div style="text-align: center;">
<b><span style="color: red;">CIVIL CONSPIRACY DOES NOT HAVE ITS OWN SOL </span></b><br />
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<b><span style="color: red;">TAKES IT FROM THE UNDERLYING TORT </span></b><br />
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The Texas Civil Practice & Remedies Code (CPRC) specifies the limitations period for a number of different categories of claims, but civil conspiracy is not one of them. So, is it two years (as is true of personal injury torts) or should it mirror the statute of limitations that governs to the underlying tort, given that civil conspiracy implicates an underlying tort (with a range between 1 to 4 years)? Or should it be four years because there is a residual statute of limitations of that length that could fill the void in the absence of a specific provision to cover the conspiratorial scenario?<br />
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Several intermediate courts of appeals have held that a 2-year SOL applies to civil conspiracy, a rule whose logic is debatable. On April 5, 2019 the Texas Supreme Court resolved the conundrum in a case from the <a href="https://tex-app-justices.blogspot.com/p/14thcoa.html">Fourteenth Court of Appeals in Houston</a>. CITE: <a href="http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=b39df229-f7fe-411f-8bdf-b57ed0c6ebcf&coa=cossup&DT=OPINION&MediaID=0a285a4e-43c0-4c8c-8348-9980a8fdac5b"><i>Agar Corp. Inc. v. Electro Circuits International, LLC</i></a>, <a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0630&coa=cossup">No. 17-0630</a> (Tex. 2019, motion for rehearing due May 22, 2019) (derivative tort of civil conspiracy subject to limitations period that applies to the underlying tort).<br />
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<u><span style="color: red;">Comment</span></u>:<i><span style="color: blue;"><span style="color: blue;"> </span><span style="color: #0b5394;">While the new rule makes good sense as a matter of jurisprudential policy, it also happens to cut both ways (shortening or lengthening the limitations period depending on the nature of the claim and under what theory it is actionable). So some would-be plaintiffs may have their not-yet-barred claim nixed by the SOL-shortening and may not have viable alternative theories of legal liability to avoid the harsh impact of the new rule, e.g., in a defamation case, which involves a 1-year limit. Unless appellate courts come up with some grandfathering doctrine to exempt claims that would not have been time-barred before the Supreme Court handed down its decision in Agar Corp. v Electro Circuits. For other cases, however, the newly-established rule will result in an extension of time to initiate a lawsuit or add a co-conspirator. See legal news coverage, e.g. </span></span></i><span style="color: #0b5394;"><i><a href="https://www.law360.com/articles/1146922/texas-high-court-kills-2-year-limits-for-civil-conspiracy">Texas High Court Kills 2-Year Limits For Civil Conspiracy</a> - Law360 Apr. 5, 2019; </i></span><span style="color: #0b5394;"><i><a href="https://www.law.com/texaslawyer/2019/04/10/texas-supreme-court-ditches-long-standing-precedent-to-hold-conspiracy-is-a-derivative-claim-governed-by-the-statute-of-limitations-for-the-underlying-tort/">Texas Supreme Court Ditches Long-Standing Precedent</a> to Hold Conspiracy Is a Derivative Claim Governed by the Statute of Limitations for the Underlying Tort - TEXAS LAWYER Apr. 10, 2019. </i></span><br />
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<i><span style="color: #0b5394;">In the case before the supreme court, some conspiracy claims were found to be time-barred based on the nature of the underlying tort, but the record did not establish that all were so barred. The high court accordingly reversed the court of appeals, which had affirmed the summary judgment on limitations granted by a Harris County district court, and remanded to the trial court to proceed with the claim that may not yet be time-barred. </span></i><br />
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AGAR CORPORATION, INC., Petitioner,<br />v.<br />ELECTRO CIRCUITS INTERNATIONAL, LLC AND SURESH PARIKH, Respondents.</h3>
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Argued January 23, 2019.</center>
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Opinion delivered: April 5, 2019.</center>
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Matthew A. Kornhauser, Dylan B. Russell, for AGAR Corporation, Inc., Petitioner.</div>
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Terri Silver Morgan, Megan N. Brown, Kenneth M. Krock, for Electro Circuits International, LLC and Suresh Parikh, Respondent.</div>
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On Petition for Review from the Court of Appeals for the Fourteenth District of Texas.</div>
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JUSTICE DEVINE delivered the opinion of the court.</div>
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JUSTICE BUSBY did not participate in the decision.</div>
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JOHN P. DEVINE, Justice.</div>
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In this summary-judgment appeal we must determine what statute of limitations applies to a claim of civil conspiracy. Following its own precedent, the court of appeals applied the two-year statute generally applicable to torts, including trespass, and affirmed the trial court's summary judgment concluding that the civil conspiracy claims were indeed barred by limitations. 565 S.W.3d 12, 18 (Tex. App.-Houston [14th Dist.] 2016) (mem. op.) (citing TEX. CIV. PRAC. & REM. CODE § 16.003 and cases applying it to civil conspiracy). We do not agree that section 16.003 universally applies to such claims.</div>
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Because civil conspiracy is a derivative tort that "depends on participation in some underlying tort," we conclude that the applicable statute of limitations must coincide with that of the "underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable." <i>See </i><a href="https://scholar.google.com/scholar_case?case=15074482311675292510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tilton v. Marshall,</i> 925 S.W.2d 672, 681 (Tex. 1996)</a> (describing the nature of a civil conspiracy claim). And because at least one of the underlying torts asserted as the basis for the conspiracy claims here may not be barred by its applicable statute of limitations, we reverse the court of appeals' judgment in part and affirm it in part.</div>
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I. Background</h2>
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Agar Corporation designs, manufactures, and sells measuring devices for use in the oil and gas industry. Agar sued more than a dozen individuals and entities, including Sanjay Shah and Pandurang Nayak, who they alleged sold Agar's technology in the scheme to produce the knock-off products. Electro Circuits and its owner Suresh Parikh (collectively "Electro") were subsequently implicated in the scheme and added to Agar's lawsuit in November 2011. Electro once manufactured circuit boards for Agar, and its alleged role in the conspiracy was that it used Agar's proprietary information to manufacture circuit boards for the knock-off products.</div>
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In its seventh amended petition filed on February 10, 2012, Agar asserted claims against Electro for tortious interference, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud, fraud by non-disclosure, misappropriation of trade secrets, violations of the Texas Theft Liability Act, conversion, and civil conspiracy and asserted similar claims against the other defendants. Electro answered and, as pertinent here, filed a counterclaim against Agar seeking attorney's fees under the Texas Theft Liability Act.</div>
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Electro later filed a traditional motion for summary judgment based on the statute of limitations and a no-evidence motion that attacked the elements of Agar's various claims. <i>See</i> TEX. R. CIV. P. 166a(c), (i). The trial court (1) denied the no-evidence motion for summary judgment as to Agar's claims for civil conspiracy; (2) granted the no-evidence motion in favor of Electro "as to all other claims [by Agar] alleging direct liability;" and (3) granted "a traditional summary judgment on Plaintiff's claims against Defendants Electro Circuits International, LLC and Suresh Parikh only on the limited basis as to [their] . . . affirmative defense of statute of limitations." Following the severance of Agar's and Electro's adverse claims from the others in the case, Electro filed another motion for summary judgment in the severed case on the issue of attorney's fees under the Texas Theft Liability Act. The trial court granted that motion, awarded Electro its attorney's fees, and together with the previous summary judgment in Electro's favor disposed of all issues in the severed case.</div>
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Agar appealed, complaining about that part of the summary judgment that barred its civil conspiracy claims because of limitations and the subsequent summary judgment that awarded Electro attorney's fees. Agar argued that the trial court should not have applied a two-year statute of limitations to its conspiracy claims and thereby erred in concluding that such claims were barred by limitations. Agar also contended that the Texas Theft Liability Act did not provide for the award of fees to Electro, the defendant. The court of appeals rejected Agar's arguments and affirmed the summary judgments for Electro. 565 S.W.3d at 26. In a concurrence to the denial of rehearing en banc, Chief Justice Frost explained that the courts of appeals have uniformly applied section 16.003's two-year statute of limitations to civil conspiracy claims, even though the logic for that rule might reasonably be questioned. 529 S.W.3d 559, 563-64 (Tex. App.-Houston [14th Dist.] 2017) (Frost, C.J., concurring in order denying rehearing en banc). Having never passed on the question, we granted Agar's petition to consider the relevant statute of limitations for a claim of civil conspiracy.</div>
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II. Statute of Limitations</h2>
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The statute of limitations is an affirmative defense that serves to "establish a point of repose and to terminate stale claims." <a href="https://scholar.google.com/scholar_case?case=9040048826886064816&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murray v. San Jacinto Agency, Inc.,</i> 800 S.W.2d 826, 828 (Tex. 1990)</a>. Statutes of limitations vary from claim to claim as determined by the Legislature. <i>See generally</i> TEX. CIV. PRAC. & REM. CODE §§ 16.002.051. For example, a two-year limitations period applies to suits for trespass and conversion, whereas a four-year limitations period applies to suits for fraud or breach of fiduciary duty. <i>Id.</i> §§ 16.003(a), .004(a)(4), (5). For claims not expressly identified by the Legislature, a residual limitations period of four years is provided. <i>Id.</i> § 16.051.</div>
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None of the statutes of limitations mention civil conspiracy by name. Rather than apply the residual limitations period, the courts of appeals that have considered the issue have held civil conspiracy falls under the two-year statute of limitations applied to suits for trespass in section 16.003 of the Civil Practices and Remedies Code.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Agar contends that these cases are wrong and that they misunderstand the nature of a civil conspiracy claim.</div>
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In civil conspiracy, the plaintiff seeks to hold the defendant liable for an injury caused by a third party who has acted in combination with the defendant for a common purpose. <a href="https://scholar.google.com/scholar_case?case=16867687399759617682&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Chu v. Hong,</i> 249 S.W.3d 441, 444-45 (Tex. 2008)</a>; <a href="https://scholar.google.com/scholar_case?case=14798473346895754544&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Carroll v. Timmers Chevrolet, Inc.,</i>592 S.W.2d 922, 925 (Tex. 1979)</a>. Agar therefore submits that the applicable statute of limitations for a civil conspiracy claim should be that of the underlying tort because that limitations period more accurately reflects civil conspiracy's status as a vicarious liability theory that hinges on an underlying tort.</div>
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Electro responds that civil conspiracy is not a vicarious liability theory but rather an independent cause of action in the nature of a trespass to which section 16.003's two-year statute of limitations applies. Electro accordingly concludes that the courts of appeals have correctly applied this limitations period to past civil conspiracy claims and that this uniform line of decisions should not be disturbed. The parties thus disagree about whether civil conspiracy is an independent tort or merely a theory of vicarious tort liability derivative of an underlying wrong.</div>
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A. Civil Conspiracy in Texas as a Vicarious Liability Theory</h2>
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In most jurisdictions, civil conspiracy is a vicarious liability theory that imparts joint-and-several liability to a co-conspirator who may not be liable for the underlying tort. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=14844531323663686230&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Mackey v. Compass Mktg., Inc.,</i> 892 A.2d 479, 485 (Md. 2006)</a>; <a href="https://scholar.google.com/scholar_case?case=9295705135030165375&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Upah v. Ancona Bros. Co.,</i> 521 N.W.2d 895, 901 (Neb. 1994),</a> <i>disapproved on other grounds, </i><a href="https://scholar.google.com/scholar_case?case=18131142673932069214&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Welsch v. Graves,</i> 582 N.W.2d 312, 316 (Neb. 1998)</a>; <a href="https://scholar.google.com/scholar_case?case=9557518735156570955&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Granewich v. Harding,</i> 985 P.2d 788, 792 (Or. 1999)</a>; <a href="https://scholar.google.com/scholar_case?case=9630785132375702048&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Dunn v. Rockwell,</i> 689 S.E.2d 255, 269 (W. Va. 2009)</a>. Liability depends on injury from the underlying tort, not the conspiracy itself. <a href="https://scholar.google.com/scholar_case?case=14844531323663686230&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Mackey,</i> 892 A.2d at 485</a>. By contrast, a minority of states treat civil conspiracy as an independent claim where defendants may be held liable for damages caused by the conspiracy itself, even in the absence of an unlawful act. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=3824193837187681300&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Allegro, Inc. v. Scully,</i> 791 S.E.2d 140, 144 (S.C. 2016)</a>. Our case law on civil conspiracy leaves Texas's position on the debate arguably unclear. Although we have not expressly said whether a civil conspiracy claim is in the nature of a vicarious liability theory or an independent tort, we have at various times used language implying that it was one or the other.</div>
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We have said a proven civil conspiracy means "each of [the] defendants in error is responsible for all acts done by any of the conspirators in furtherance of the unlawful combination." <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=15543469767680033492&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>State v. Standard Oil Co.,</i> 107 S.W.2d 550, 559 (Tex. 1937)</a>. This is a statement of vicarious liability. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14798473346895754544&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Carroll,</i> 592 S.W.2d at 925-26</a> (citing <i>Standard Oil</i>while describing civil conspiracy as a theory of vicarious liability).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> We have repeatedly called civil conspiracy a "derivative tort," meaning it depends on some underlying tort or other illegal act. <a href="https://scholar.google.com/scholar_case?case=16867687399759617682&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Chu,</i> 249 S.W.3d at 444</a>; <a href="https://scholar.google.com/scholar_case?case=15074482311675292510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tilton,</i> 925 S.W.2d at 681</a>. Our use of the word "derivative" in this context means a civil conspiracy claim is connected to the underlying tort and survives or fails alongside it. <a href="https://scholar.google.com/scholar_case?case=7703714337182422537&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>NME Hosps., Inc. v. Rennels,</i> 994 S.W.2d 142, 148 (Tex. 1999)</a>. This is because "[i]t is not the agreement itself, but an injury to the plaintiff resulting from [another] act done pursuant to the common purpose that gives rise to the cause of action." <a href="https://scholar.google.com/scholar_case?case=14798473346895754544&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Carroll,</i> 592 S.W.2d at 925</a>. Civil conspiracy depends entirely on the injury caused by the underlying tort; the injury is the damage from the underlying wrong, not the conspiracy itself. <a href="https://scholar.google.com/scholar_case?case=404939847191851013&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp.,</i>435 S.W.2d 854, 856 (Tex. 1968)</a>. These cases clearly describe civil conspiracy as a theory of vicarious liability and establish that in Texas, civil conspiracy requires some underlying wrong.</div>
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In other cases, we have described civil conspiracy as a "recognized tort" or a "cause of action." <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=8740084902497112195&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Juhl v. Airington,</i> 936 S.W.2d 640, 644 (Tex. 1996)</a>; <a href="https://scholar.google.com/scholar_case?case=16234521067355938978&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Massey v. Armco Steel Co.,</i> 652 S.W.2d 932, 934 (Tex. 1983)</a>. A cause of action is simply "a factual situation that entitles one person to obtain a remedy." <i>Cause of Action,</i> BLACK'S LAW DICTIONARY (10th ed. 2014). Likewise, in modern usage a tort is simply a "civil wrong, other than breach of contract, for which a remedy may be obtained." <i>Tort,</i> BLACK'S LAW DICTIONARY (10th ed. 2014). When used as a theory of vicarious liability, civil conspiracy is part of the factual situation that permits a remedy against co-conspirators. Without it, there would be no grounds for recovery against co-conspirators who did not commit the underlying unlawful act. So it is not inconsistent to say civil conspiracy is a vicarious liability theory while also recognizing that it is a kind of cause of action. Indeed, it is not uncommon for courts to characterize vicarious liability itself as a cause of action when sorting through plaintiffs' various claims. <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=8183683407061271510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Sky View at Las Palmas, LLC v. Mendez,</i> 555 S.W.3d 101, 105 n.2 (Tex. 2018)</a> (including vicarious liability in a list of the plaintiff's causes of action alongside malpractice, negligence, and breach of contract); <a href="https://scholar.google.com/scholar_case?case=6234231885584941662&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>N.P. v. Methodist Hosp.,</i> 190 S.W.3d 217, 225 (Tex. App.-Houston [1st Dist.] 2006, pet. denied)</a> ("[Plaintiff] nonetheless has a viable cause of action for vicarious liability under principles of respondeat superior."). None would take this usage to mean vicarious liability is an independent cause of action. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10033084553487154285&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Crooks v. Moses,</i> 138 S.W.3d 629, 637 (Tex. App.-Dallas 2004, no pet.)</a> (explaining that vicarious liability is not an independent cause of action). Likewise, characterizing civil conspiracy as a cause of action does not mean it is an independent tort.</div>
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Our discussion of the five elements of civil conspiracy enumerated in <a href="https://scholar.google.com/scholar_case?case=16234521067355938978&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Massey v. Armco Steel Co.,</i> 652 S.W.2d at 934,</a> might also point to civil conspiracy being an independent claim. There, we defined the elements of civil conspiracy as: "(1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result." <i>Id.</i> (citing 15A C.J.S. Conspiracy § 1(2) (1967)). These elements might be read to mean the litigated damages must only be proximately caused by the conspiracy itself, and we have sometimes described the damages element as "damages caused by the conspiracy." <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=6111617783851769215&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Operation Rescue-Nat'l v. Planned Parenthood of Hou. & Se. Tex., Inc.,</i> 975 S.W.2d 546, 554 (Tex. 1998)</a>. But no past decisions depend on that characterization of the damages element. Our conspiracy decisions both before and after <i>Massey</i> emphasize that the damages that matter come from the underlying wrongful act, not the conspiracy itself. <a href="https://scholar.google.com/scholar_case?case=15074482311675292510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tilton,</i> 925 S.W.2d at 680-81</a>; <a href="https://scholar.google.com/scholar_case?case=404939847191851013&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Schlumberger,</i> 435 S.W.2d at 856</a>. This precedent does not contradict the <i>Massey</i> elements; it instead clarifies that the damages element refers not to the entire conspiracy itself but to some tortious act committed by a co-conspirator pursuant to the conspiracy. These cases thus do not contradict those that more clearly indicate that civil conspiracy is a theory of vicarious liability and not an independent tort.</div>
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B. Civil Conspiracy Limitations Tied to the Underlying Tort</h2>
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Having determined that civil conspiracy is not an independent tort, it follows that the claim does not have its own statute of limitations. In fact, assigning civil conspiracy its own fixed limitations period conflicts with its nature as a derivative tort. Civil conspiracy requires an underlying tort that has caused damages. <a href="https://scholar.google.com/scholar_case?case=15074482311675292510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tilton,</i> 925 S.W.2d at 681</a>. The cause of action for the underlying tort typically accrues as soon as the tort causes those damages. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6982193025485451292&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murphy v. Campbell,</i> 964 S.W.2d 265, 270 (Tex. 1997)</a> ("[A] cause of action accrues when a wrongful act causes some legal injury . . . ."). A fixed limitations period of two years for civil conspiracy that differs from that of its underlying tort can produce bizarre consequences. For example, why should co-conspirators who participate in a scheme to defame a person but who do not commit any defamatory acts themselves be subject to suit for a longer period than the primary tortfeasor upon whom their liability is premised? <i>See</i> TEX. CIV. PRAC. & REM. CODE § 16.002(a) (applying a one-year limitations period for libel and slander).</div>
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Equating the limitations period for civil conspiracy with that of the underlying tort also accords with the Legislature's statute-of-limitations scheme. The Legislature has defined different statutes of limitations for various claims, such as "suit[s] for trespass or injury," "suit[s] on . . . fraud," "suit[s] for . . . libel" or "suit[s] for misappropriation of trade secrets." TEX. CIV. PRAC. & REM. CODE §§ 16.002.004, .010. The scheme thus assigns statutes of limitations based on the type of wrong, but it does not assign different limitations for parties who may be liable through different theories for the same wrong. Because civil conspiracy is a theory of vicarious liability, a lawsuit alleging a civil conspiracy that committed some intentional tort is still a "suit for" that tort.</div>
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We are not alone in our understanding of civil conspiracy as a theory of derivative liability that shares a limitations period with that of its underlying tort. The courts of last resort in Maryland, Nebraska, Virginia, and West Virginia agree. <a href="https://scholar.google.com/scholar_case?case=5110162060576925273&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Dunlap v. Cottman Transmission Sys.,</i> 754 S.E.2d 313, 320-21 (Va. 2014)</a>; <a href="https://scholar.google.com/scholar_case?case=5718510201360993581&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Prince George's Cty. v. Longtin,</i> 19 A.3d 859, 877 (Md. 2011)</a>; <a href="https://scholar.google.com/scholar_case?case=9295705135030165375&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Upah v. Ancona Bros. Co.,</i> 521 N.W.2d at 902</a>; <a href="https://scholar.google.com/scholar_case?case=9630785132375702048&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Dunn,</i> 689 S.E.2d at 269</a>. Several other states' intermediate courts have held the same.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#[3]" name="r[3]" style="color: #660099;">[3]</a></sup></div>
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Electro offers three reasons we should apply section 16.003's two-year limitations period to all civil conspiracies—as our own courts of appeals have uniformly done—rather than align ourselves with these other states. First, Electro submits that 16.003's two-year limitations period generally applies to torts not named by more specific statutes and therefore should apply to a civil conspiracy claim as an action in trespass. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8060837344036381624&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Williams v. Khalaf,</i> 802 S.W.2d 651, 654 (Tex. 1990)</a> ("[Torts] not expressly covered by a limitation provision nor expressly held by this court to be governed by a different provision would presumptively be a `trespass' for limitations purposes."). The argument assumes that civil conspiracy is itself an independent tort, but it is not.</div>
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Next, Electro compares civil conspiracy to tortious interference with business relations to support a strict application of 16.003's limitations period here. In <i>First National Bank of Eagle Pass v. Levine,</i> we held section 16.003 governs tortious interference claims. 721 S.W.2d 287, 289 (Tex. 1986). And in <i>Wal-Mart Stores, Inc. v. Sturges,</i> we held that tortious interference with business relations requires proving that the defendant's conduct would be actionable under another recognized tort. 52 S.W.3d 711, 726 (Tex. 2001). <i>Levine</i> and <i>Sturges</i> combined suggest that 16.003's two-year limitation can govern claims that depend on other underlying tortious actions, like tortious interference and civil conspiracy. But we have held this is not the case. In <i>Nath v. Texas Children's Hospital,</i> we held that only a one-year statute of limitations applies to tortious interference claims where a one-year tortious act is the only grounds for the claim. 446 S.W.3d 355, 370 (Tex. 2014). So even if Electro's analogy between tortious interference and civil conspiracy were sound, it would not be grounds for holding section 16.003 applies to every civil conspiracy claim.</div>
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Finally, Electro argues that we should not overturn the court of appeals' decades-long, uniform application of the two-year limitations period to civil conspiracy. But a long history of mistaken application alone is insufficient to counsel against correcting the error. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=13818844584740250358&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Hubenak v. San Jacinto Gas Transmission Co.,</i> 141 S.W.3d 172, 181 & n.44, 183 & n.69 (Tex. 2004)</a> (disapproving at least sixteen court of appeals decisions spanning over seventy years); <a href="https://scholar.google.com/scholar_case?case=1470415203416268293&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Callejo v. Brazos Elec. Power Coop., Inc.,</i> 755 S.W.2d 73, 75 (Tex. 1988)</a> (disapproving at least twelve decisions spanning over thirty years). Nor is the Legislature's inaction in the face of these appellate decisions evidence that those decisions are in line with the statutory scheme. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1000041559535036897&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Entergy Gulf States, Inc. v. Summers,</i> 282 S.W.3d 433, 470-71 (Tex. 2009)</a> (refusing to make inferences about the Legislature's statutory intent from the Legislature's inaction). Because we hold civil conspiracy is not an independent tort and its statute of limitations is that of the underlying tort, we disapprove the courts of appeals' decisions to the extent they contradict this opinion.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#[4]" name="r[4]" style="color: #660099;">[4]</a></sup></div>
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Agar's seventh amended petition alleges Electro engaged in a civil conspiracy to commit several underlying torts including, among others, conversion, misappropriation of trade secrets, and fraud. These underlying claims are governed by separate two-, three- and four-year statutes of limitations respectively. TEX. CIV. PRAC. & REM. CODE §§ 16.003(a), 16.004(a), 16.010(a). The civil conspiracy claims are likewise governed respectively by those statutes. Agar's civil conspiracy claims may only proceed if they are based on an underlying tort that is itself not barred by limitations. To determine on which bases Agar's claim may proceed, if any, we turn to accrual.</div>
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III. Accrual</h2>
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The statute of limitations begins to run when a claim accrues. <a href="https://scholar.google.com/scholar_case?case=9040048826886064816&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murray v. San Jacinto Agency, Inc.,</i> 800 S.W.2d 826, 828 (Tex. 1990)</a>. A cause of action accrues when facts come into existence that permit a plaintiff to recover. <a href="https://scholar.google.com/scholar_case?case=7598357183174956895&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Exxon Mobil Corp. v. Rincones,</i> 520 S.W.3d 572, 593 (Tex. 2017)</a>. Generally, this is when a wrongful act causes an injury. <a href="https://scholar.google.com/scholar_case?case=9040048826886064816&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murray,</i> 800 S.W.2d at 828</a>.</div>
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As with the statute of limitations, we have not previously considered when a civil conspiracy claim accrues. But the above principles should apply to civil conspiracy claims as they do to other claims. Because a civil conspiracy requires an underlying tort, <a href="https://scholar.google.com/scholar_case?case=15074482311675292510&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tilton,</i> 925 S.W.2d at 681,</a> most civil conspiracy claims should accrue when the underlying tort causes harm to the plaintiff, that is, at the same time as the tort claim against the primary tortfeasor.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#[5]" name="r[5]" style="color: #660099;">[5]</a></sup> But some disagreement exists about this.</div>
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The courts of other states have announced differing rules for accrual in the context of a conspiracy. <i>See</i> 16 AM. JUR. 2D <i>Conspiracy</i> § 65 (2018) (describing with citations at least four different rules for civil conspiracy accrual applied by various courts). For instance, the California Supreme Court has held the entirety of the conspiracy does not accrue until the last overt act of the conspiracy. <a href="https://scholar.google.com/scholar_case?case=5738507738670327305&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Wyatt v. Union Mortgage Co.,</i> 157 Cal.Rptr. 392, 400 (Cal. 1979)</a>. In Arizona, by contrast, the statute of limitations commences when the tortious act is committed on which conspiracy liability is premised. <a href="https://scholar.google.com/scholar_case?case=14302999591906279348&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tovrea Land & Cattle Co. v. Linsenmeyer,</i> 412 P.2d 47, 63 (Ariz. 1966)</a>.</div>
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A. Civil Conspiracy's Accrual in Texas</h2>
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Texas appellate courts on balance appear to agree with Arizona, treating each underlying tort of the conspiracy as having its own limitations which runs from the time the act is committed. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=10338070884160006773&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Harang v. Aetna Life Ins. Co.,</i> 400 S.W.2d 810, 813</a> (Tex. Civ. App.-Houston [1st Dist.] 1966, writ ref'd n.r.e.); <a href="https://scholar.google.com/scholar_case?case=1573389986642226520&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Cathey v. First City Bank of Aransas Pass,</i> 758 S.W.2d 818, 822 (Tex. App.-Corpus Christi 1988, writ denied)</a>. The application of this rule, however, is not always clear or consistent. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=2056469658205215162&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Jeanes v. Hamby,</i> 685 S.W.2d 695, 699 (Tex. App.-Dallas 1984, writ ref'd n.r.e</a>.) (holding that limitations in a civil conspiracy claim for fraud ran from the conspiracy's last overt act rather than with the underlying fraud claim's accrual). We agree with the rule as stated in <i>Tovrea</i> and <i>Harang:</i> the claim accrues when each underlying tort of the conspiracy damages the plaintiff, and limitations run separately for each such tortious act. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14302999591906279348&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tovrea,</i> 412 P.2d at 63</a>; <a href="https://scholar.google.com/scholar_case?case=10338070884160006773&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Harang,</i> 400 S.W.2d at 813</a>. Understanding that civil conspiracy is a theory of derivative liability, it follows that a civil conspiracy claim should share both accrual and the limitations period of the underlying wrong. This also accords with the general rule that a cause of action accrues when a wrongful act causes an injury. <i>See </i><a href="https://scholar.google.com/scholar_case?case=9040048826886064816&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murray,</i> 800 S.W.2d at 828</a>.</div>
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Agar contends that statute of limitations in civil conspiracy runs from the commission of the last overt act alleged to have caused damage, which is the rule followed in California. Applying this rule, Agar argues its civil conspiracy claims accrued on July 3, 2009 because the trial court identified a sale of knock-offs between the conspirators on that date as the conspiracy's "last overt act." Electro contends the statute of limitations in civil conspiracy accrues with the injury, and here that injury occurred in April 2008, at the latest, when Agar discovered the theft of its technology and initially sued Shah and Nahak.</div>
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Agar argues <i>Harang</i> actually supports its suggested accrual rule, but we disagree. <i>Harang,</i> in fact, explicitly rejects the last-overt-act accrual rule. The plaintiff in that case sued on a 1958 conspiracy to commit defamation, and later added alleged co-conspirators to the case in 1964. <a href="https://scholar.google.com/scholar_case?case=10338070884160006773&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Harang,</i> 400 S.W.2d at 812</a>. While agreeing that a two-year statute of limitations applied to his claim, the plaintiff argued limitations ran from the "last overt act" of the conspiracy, which he said was one of two meetings of the co-conspirators in 1964 and 1965. <i>Id.</i> at 812-14. The court of appeals disagreed, holding that limitations ran from when the injury occurred and so the conspiracy claim against the late-added co-conspirators was time-barred. <i>Id.</i> at 813. Under the <i>Harang</i> court's reasoning, for each tort committed under the conspiracy, "the statute of limitations begins to run when it occurs." <i>See id.</i> Because the defamation injury in <i>Harang</i> had occurred in 1958, the court held the civil conspiracy claim accrued and limitations began to run at that time and so the claim as to the co-conspirators added in 1964 was barred to the extent it relied a tort for which the limitations period had run. <i>See id.</i> at 812-13.</div>
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If conspirators conspire about different underlying torts over the course of a conspiracy, then claims based thereon accrue separately according to when each tort and injury occur. A conspiracy claim based on an earlier underlying tort does not re-accrue when the co-conspirators agree to commit a second tort or make another overt act. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1573389986642226520&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Cathey,</i> 758 S.W.2d at 822</a> ("[A]ny act committed [outside limitations] prior to the filing of this conspiracy action would be barred by limitations and may not be recovered upon at trial.").</div>
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Agar also relies on another decision it contends interpreted <i>Harang</i> to support its conspiracy-accrual rule. That case involved a civil conspiracy where an estranged husband conspired with a friend to hide a winning lottery ticket from his wife to keep lottery winnings out of the marital assets during divorce. <a href="https://scholar.google.com/scholar_case?case=8046442408533306035&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Mayes v. Stewart,</i> 11 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist.] 2000, pet. denied)</a>. The wife sued both the friend and husband for fraud on both direct and conspiracy liability theories and won a judgment, which only the friend appealed. <i>Id.</i> at 447. Although the court in <i>Mayes</i> cited both <i>Harang</i> and <i>Cathey,</i> it rejected an argument that the conspiracy accrued with the underlying fraud and instead ties accrual to later overt acts of the conspiracy—using the last-overt-act rule that <i>Harang</i> rejected. <i>Id.</i> at 453. The court ultimately concluded, however, that the conspiracy-limitations issue was irrelevant because of the jury's fraud finding against the friend directly. <i>Id.</i></div>
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The better rule for civil conspiracy accrual is for the statute of limitations to accrue as to each alleged underlying tort when that tort occurs. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14302999591906279348&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Tovrea,</i> 412 P.2d at 63</a>; <a href="https://scholar.google.com/scholar_case?case=10338070884160006773&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Harang,</i>400 S.W.2d at 813</a>. Because a civil conspiracy claim is derivative of an underlying tort, the claim accrues when the underlying tort accrues. We therefore reject Agar's argument that we should adopt the last-overt-act accrual rule.</div>
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Agar seeks recovery for the injury of the theft of its intellectual property which it discovered no later than April 2008 when it commenced litigation. The trial court found that for limitations purposes the last overt act of the conspiracy was the co-conspirators submission and receipt of the purchase order on July 3, 2009. But this finding suggests the wrong rule because Agar's civil conspiracy claim as to each underlying tort accrued at the same time as Agar's direct claims for those torts, all of which accrued by April 2008.</div>
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Agar relies on the July 2009 purchase orders as evidence of the last overt act of the conspiracy. But the discovery of additional damages does not alter the accrual of an earlier tort, nor is there evidence of an underlying tort distinct from those alleged earlier. The purchase orders may show continuing damage to Agar from earlier torts, but this does not reset the statute of limitations. <a href="https://scholar.google.com/scholar_case?case=9040048826886064816&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Murray,</i> 800 S.W.2d at 828</a>. Because the July 2009 purchase order does not support a later accrual of any of Agar's alleged underlying torts and Agar has not offered any other accrual date, we hold Agar's civil conspiracy claims all accrued at the latest on April 3, 2008, when it first filed suit against Electro's alleged co-conspirators.</div>
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B. Discovery Rule</h2>
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Agar also asserts the discovery rule, arguing its civil conspiracy claim against Electro did not accrue until March 2011, when it discovered the July 2009 sale. Agar complains that the purchase orders were not produced until March 30, 2011 although requested years earlier. Because Agar ties the accrual of its civil conspiracy claims to the July 2009 sale, it argues that the discovery rule should further toll limitations to March 2011.</div>
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The discovery rule is an exception to the general accrual rule that applies when the injury is by its nature inherently undiscoverable. <a href="https://scholar.google.com/scholar_case?case=4239497248892452278&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Childs v. Haussecker,</i> 974 S.W.2d 31, 36-37 (Tex. 1998)</a>. Where the discovery rule applies, the cause of action accrues when a reasonably diligent and careful plaintiff knows or should have known of the wrongful act and injury. <i>Id.</i> at 37.</div>
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Agar's contention again relies on the assumption that its civil conspiracy claim accrued with the July 2009 sale as the last overt act of the conspiracy. As we have already rejected that assumption, no basis exists for Agar's argument here. Agar's civil conspiracy claims did not accrue with the July 2009 sale regardless of when Agar discovered it.</div>
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C. Application of Accrual and Limitations to Agar's Civil Conspiracy Claims</h2>
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Agar's live pleading, its seventh amended petition, alleges a civil conspiracy based on several underlying torts, including: "tortious interference with existing contracts; breach of fiduciary duty; fraud; fraud by nondisclosure; misappropriation of trade secrets; civil theft; conversion; unfair competition; trademark infringement and passing off." Agar alleges those torts as direct claims against Electro and the other defendants and as tortious actions taken pursuant to the conspiracy. Electro argues that the civil conspiracy claim only relates to misappropriation of trade secrets, but the record does not support Electro's belief. Because the various civil conspiracy claims accrued when their related underlying tortious injuries occurred, Agar's civil conspiracy claims with respect to all alleged underlying torts accrued by April 2008 at the latest. As Agar does not allege any underlying tort related to the July 3, 2009 sale different from those previously alleged, that date is irrelevant to Agar's conspiracy claims.</div>
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Agar did not add Electro to the lawsuit until November 2011. To see whether limitations has run on Agar's various civil conspiracy claims, we look to the limitations periods of the alleged underlying torts. Agar's civil conspiracy claims may not proceed to the extent they are based on torts barred by limitations. For example, misappropriation of trade secrets is subject to a three-year limitations period. TEX. CIV. PRAC. & REM. CODE § 16.010. As Agar added Electro to the lawsuit more than three years after April 2008, Agar may not pursue its civil conspiracy claim on the basis of an alleged misappropriation of trade secrets. But fraud and breach of fiduciary duty are subject to a four-year limitations period. TEX. CIV. PRAC. & REM CODE § 16.004. Agar's civil conspiracy claims against Electro based on those underlying torts may not be barred. Because the record does not establish that all of the alleged wrongs underlying Agar's civil conspiracy claims are barred by limitations, we conclude the trial court erred in its application of limitations to all of Agar's civil conspiracy claims. The court of appeals therefore erred in affirming that part of the trial court's summary judgment.</div>
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IV. Attorney's Fees</h2>
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Agar also asks us to reverse the trial court's award of $64,307.44 in attorney's fees to Electro under the Texas Theft Liability Act. <i>See</i> TEX. CIV. PRAC. & REM. CODE § 134.001.005. Agar has alleged a civil theft claim directly against Electro. Under the Act, "each person who prevails in a suit. . . shall be awarded court costs and reasonable and necessary attorney's fees." TEX. CIV. PRAC. & REM. CODE § 134.005(b). The trial court granted Electro a no-evidence summary judgment on Agar's direct claim of theft under the Act.</div>
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In the final judgment, the trial court awarded attorney's fees "incurred as a result of defending the TTLA claim or the performance of discrete legal acts that were intertwined with defending the TTLA claim." An affidavit from Electro's attorney supported the fees award with an attached hourly record of the fees amassed during litigation and an estimation as to how much each task involved or was intertwined with Electro's defense to the civil theft claim. Agar does not challenge the trial court's segregation of the attorney's fees.</div>
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Agar contends, however, that a "person who prevails" under section 134.005(b) of the Act includes only plaintiffs, not defendants like Electro. We begin statutory interpretation with the statute's text. <a href="https://scholar.google.com/scholar_case?case=12772432811451189916&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Jose Carreras, M.D., P.A. v. Marroquin,</i> 339 S.W.3d 68, 71 (Tex. 2011)</a>. The inquiry ends there if "a statute's words are unambiguous and yield a single inescapable interpretation." <a href="https://scholar.google.com/scholar_case?case=15116534871081593415&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson,</i> 209 S.W.3d 644, 651-52 (Tex. 2006)</a>. The statute defines "person" as "an individual, partnership, corporation, association, or other group, however organized." TEX. CIV. PRAC. & REM. CODE § 134.002(1). Agar contends that this definition serves to broaden the types of plaintiffs who may sue under the Act, but nothing in the statute supports that contention. The statute also refers to potential defendants as "persons." <i>See id.</i> §§ 134.003, .005(a) (assigning liability under the Act to a "person who commits theft" or a "person who has the duty [to control] a child [who commits theft]"). The statute's command that attorney's fees be awarded to "each person who prevails" unambiguously applies to all persons, be they a prevailing plaintiff or defendant. <i>See id.</i> § 134.005(b).</div>
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Agar also contends Electro has not "prevailed on the merits" of the civil theft claim because Electro only avoided liability through the statute of limitations. This argument ignores that Electro won a no-evidence summary judgment of Agar's direct civil theft claim. A defendant "prevails" when the plaintiff loses with prejudice, whether on the merits or for some other reason. <a href="https://scholar.google.com/scholar_case?case=13894509038750947309&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Epps v. Fowler,</i> 351 S.W.3d 862, 868 (Tex. 2011)</a>. Agar's civil theft claim against Electro has been resolved with prejudice. Electro is therefore a prevailing party with respect to that claim.</div>
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Agar next argues the affidavit supporting Electro's attorney's fees was legally defective and controverted by Agar. Agar contends the affidavit is insufficient as a matter of law because it lacks an assertion that its contents are true or made under penalty of perjury. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3072740424763014344&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Humphreys v. Caldwell,</i> 888 S.W2d 469, 470 (Tex. 1994)</a> ("An affidavit which does not positively and unqualifiedly represent the facts as disclosed in the affidavit to be true and within the affiant's personal knowledge is legally insufficient."). We disagree. The challenged affidavit says it was taken upon the affiant's oath and the facts are based on his personal knowledge. An affidavit containing a statement that the affiant appeared before the notary, was duly sworn, and submitted the statement "on his oath" is legally sufficient. <a href="https://scholar.google.com/scholar_case?case=16615022197078027401&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Ford Motor Co. v. Leggat,</i> 904 S.W.2d 643, 645 (Tex. 1995)</a>.</div>
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Agar finally contends its attorney's affidavit created a fact issue on the reasonableness and necessity of the attorney's fees by reasoning that Electro won the case on limitations and therefore should have moved for summary judgment much earlier. But Electro did not win purely on limitations; only the civil conspiracy claims were subject to summary judgment on limitations. Electro won a no-evidence summary judgment against all of Agar's non-derivative tort claims, including the civil theft claim. No-evidence summary judgment is only available "[a]fter adequate time for discovery." TEX. R. CIV. P. 166a(i). The affidavit's rationale fails and offers no other support for its assertion that Electro's fees were not reasonably necessary. Accordingly, no genuine issue of material fact has been raised as to the reasonableness or necessity of Electro's attorney's fees. The trial court did not err in awarding attorney's fees to Electro under the Act.</div>
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In summary, we hold that civil conspiracy is a derivative claim that takes the limitations period of the underlying tort that is the object of the conspiracy. Limitations as to both typically run simultaneously because the conspiracy and underlying tort generally accrue at the same time. As pled, the underlying torts alleged in this case all accrued by April 2008. Because Electro was not joined as a party to the conspiracy until November 2011 and no underlying tort other than those previously pled was alleged in that joinder, limitations that would bar the underlying tort claims if alleged anew similarly bar the related claims of conspiracy. Thus, any conspiracy claim based on one of the underlying torts alleged in April 2008 that shares a limitation period that expired before November 2011 is barred. Finally, we hold that the Texas Theft Liability Act's provision for the award of attorney's fees to each prevailing person applies both to plaintiffs and defendants who prevail.</div>
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We affirm the court of appeal's judgment as to attorney's fees, reverse it as to those civil conspiracy claims whose underlying tort was not barred by limitations at the time of Electro's addition to the litigation, and remand the cause to the trial court for further proceedings consistent with this opinion.</div>
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<tr><td class="tr-caption" style="text-align: center;">Trial Court Order re SOL on Conspiracy </td></tr>
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FOOTNOTES:<br />
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#r[1]" name="[1]" style="color: #660099;">[1]</a> <i>See, e.g., Tucker v. Bedgood,</i> 2016 WL 7011584, at *3 (Tex. App.-Corpus Christi-Edinburg Dec. 1, 2016, no pet.) (mem. op.); <i>Archer v. Allison,</i> 2015 WL 7889910, at *3 (Tex. App.-Amarillo Dec. 3, 2015, pet. denied) (mem. op.); <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=14773530442110129521&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Bennett v. Reynolds,</i> 2014 WL 4179452, at *10 (Tex. App.-Austin Aug. 22, 2014, pet. denied)</a> (mem. op.); <i>Dodson v. Ford,</i> 2013 WL 5433915, at *4 (Tex. App.-Fort Worth Sept. 26, 2013, no pet.) (mem. op.); <a href="https://scholar.google.com/scholar_case?case=15236402568906309924&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Sharpe v. Roman Catholic Diocese of Dall.,</i> 97 S.W.3d 791, 795 (Tex. App.-Dallas 2003, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=8046442408533306035&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Mayes v. Stewart,</i> 11 S.W.3d 440, 453 (Tex. App.-Houston [14th Dist.] 2000, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=2052059262610524769&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Chandler v. Chandler,</i> 991 S.W.2d 367, 394 (Tex. App.-El Paso 1999, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=13709995728621895992&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Martz v. Weyerhaeuser Co.,</i> 965 S.W.2d 584, 587 (Tex. App.-Eastland 1998, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=8843894739629280797&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Fisher v. Yates,</i> 953 S.W.2d 370, 381 (Tex. App.-Texarkana 1997),</a> <i>writ denied,</i> <a href="https://scholar.google.com/scholar_case?case=3944867325144219739&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;">988 S.W.2d 730 (Tex. 1998) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=114456059141269365&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Allen v. City of Midlothian,</i> 927 S.W.2d 316, 322 (Tex. App.-Waco 1996, no writ)</a>; <a href="https://scholar.google.com/scholar_case?case=2274363916562848946&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Stroud v. VBFSB Holding Corp.,</i> 917 S.W.2d 75, 82 (Tex. App.-San Antonio 1996, writ denied)</a>; <a href="https://scholar.google.com/scholar_case?case=14104017257766398178&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Stevenson v. Koutzarov,</i>795 S.W.2d 313, 318 (Tex. App.-Houston [1st Dist.] 1990, writ denied)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#r[2]" name="[2]" style="color: #660099;">[2]</a> Electro argues that <i>Carrol</i> stands for the opposite because it says civil conspiracy is "distinguished from the concept of vicarious liability for concerted action. . . ." <i>See </i><a href="https://scholar.google.com/scholar_case?case=14798473346895754544&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Carrol,</i> 592 S.W.2d at 925-26</a>. This misses that concerted action is a separate theory of vicarious liability distinct from civil conspiracy. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8740084902497112195&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Juhl v. Airington,</i> 936 S.W.2d 640, 643-44 (Tex. 1996)</a>(treating civil conspiracy and concerted action as similar but distinct theories). <i>Carrol</i> simply recognized that distinction.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#r[3]" name="[3]" style="color: #660099;">[3]</a> <i>E.g., </i><a href="https://scholar.google.com/scholar_case?case=6571886481840738087&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Filmservice Labs., Inc. v. Harvey Bernhard Enters., Inc.,</i> 256 Cal. Rptr. 735, 742 (Cal. Ct. App. 1989)</a>; <a href="https://scholar.google.com/scholar_case?case=13350500484489141439&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Mauvais-Jarvis v. Wong,</i> 987 N.E.2d 864, 894 (Ill. App. Ct. 2013)</a>; <a href="https://scholar.google.com/scholar_case?case=16372552930856975800&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Meyer Land & Cattle Co. v. Lincoln Cty. Conservation Dist.,</i> 31 P.3d 970, 977 (Kan. Ct. App. 2001)</a>; <a href="https://scholar.google.com/scholar_case?case=10054066134687425895&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Terlecki v. Stewart,</i> 754 N.W.2d 899, 906 (Mich. Ct. App. 2008)</a>; <a href="https://scholar.google.com/scholar_case?case=9612759928785959545&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Schlotthauer v. Sanders,</i> 545 N.Y.S.2d 197, 199 (N.Y. App. Div. 1989)</a>; <a href="https://scholar.google.com/scholar_case?case=12634628052772587844&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019" style="color: #660099;"><i>Segall v. Hurwitz,</i> 339 N.W.2d 333, 338 (Wis. Ct. App. 1983)</a>.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#r[4]" name="[4]" style="color: #660099;">[4]</a> See cases cited <i>supra,</i> note 1.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=8205889829774971811&q=%22civil+conspiracy%22+statute+of+limitations&hl=en&as_sdt=4,44&as_ylo=2019#r[5]" name="[5]" style="color: #660099; text-decoration: underline;">[5]</a> As the parties would tie the accrual date in this case to an allegedly damaging overt act or underlying tort, we need not consider whether a civil conspiracy claim might accrue at a later time if the last element of the claim alleged to come into existence is something other than an act injuring the plaintiff.</div>
<br />
CASE CITE: Agar Corp., Inc. v. Electro Circuits Int’l, LLC, —S.W.3d—, No. 17-0630, 2019 WL 1495211 (Tex. Apr. 5, 2019).<br />
<br />
<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-59786130120889864212019-01-03T02:30:00.000-06:002019-01-16T09:44:20.247-06:00Buyer of real property liable for delinquent taxes only in rem, not personally<div style="text-align: center;">
<span style="font-size: x-small;">Fenlon v Harris County and other taxing entities (No. <a href="http://search.txcourts.gov/Case.aspx?cn=01-17-00877-CV&coa=coa01">01-17-00877-CV</a> (Tex.App. - Houston Dec 20, 2018) </span></div>
<div style="text-align: center;">
<span style="font-size: x-small;"><br /></span></div>
<blockquote class="tr_bq">
The record contains no indication that Fenlon, when he purchased the property, expressly agreed to assume liability for the delinquent taxes. We conclude that, while Fenlon purchased the property subject to the delinquent taxes and the liens securing payment of the delinquent taxes, he did not become personally liable for the delinquent taxes. Thus, the trial court erred to the extent that it entered a personal judgment against Fenlon for the delinquent taxes. </blockquote>
<center>
<h3 id="gsl_case_name">
ROBERT M. FENLON, Appellant,<br />v.<br />HARRIS COUNTY, CITY OF HOUSTON, HOUSTON INDEPENDENT SCHOOL DISTRICT, HOUSTON COMMUNITY COLLEGE SYSTEM, AND PROPEL FINANCIAL SERVICES, LLC AS AGENT AND ATTORNEY IN FACT FOR PROPEL FUNDING NATIONAL 1, LLC, Appellees.</h3>
</center>
<center>
<a href="https://scholar.google.com/scholar?scidkt=2749592115710545731&as_sdt=2&hl=en">No. 01-17-00877-CV.</a></center>
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<b>Court of Appeals of Texas, First District, Houston.</b></center>
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Opinion issued December 20, 2018.</center>
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</center>
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</center>
Robert M. Fenlon, for Appellant, Pro Se.<br />
<br />
Emily Watkins, Damon Dawain Edwards, Edward J. (Nick) Nicholas, for Harris County et al., Appellee.<br />
Yanira Reyes, Matthew Countryman, for Propel Financial Services, Appellee.<br />
Jermecia Beachem, for Bishop Moses Belton, Appellee.<br />
Joseph James, for Brian James, Appellee.<br />
<br />
On Appeal from the 165th District Court, Harris County, Texas, Trial Court Case No. 2015-42442.<br />
Panel consists of Justices Keyes, Massengale, and Brown.<br />
<br />
<h2>
OPINION</h2>
<br />
EVELYN V. KEYES, Justice.<br />
<br />
In this case involving liens for delinquent property taxes, Betty James, the owner of the subject property, contracted with the predecessor in interest of appellee Propel Financial Services, LLC, an entity that paid delinquent taxes on James's behalf and received a transfer of the tax liens on the property. Several years later, after James had passed away, Harris County filed the underlying suit, seeking foreclosure of its tax liens on the property. Propel intervened, also seeking foreclosure of its liens, and appellant Robert Fenlon, who had purchased the property during the pendency of the suit, became a defendant. After a tax master made recommendations in the case, the trial court entered judgment in favor of Harris County and Propel, ordering foreclosure of their tax liens. With respect to Propel, the trial court awarded Propel $14,173.67 for "delinquent base tax" for the 2003-2007 tax years, $10,477.25 for "penalty & interest," and $6,304.22 for attorney's fees.<br />
<br />
In five issues, Fenlon contends that (1) legally and factually insufficient evidence supports the trial court's finding that the base tax to which Propel is entitled is $14,173.67; (2) legally and factually insufficient evidence supports the finding that Propel had a valid tax lien for the 2006-2007 tax years; (3) legally and factually insufficient evidence supports the award of $10,477.25 in penalties and interest to Propel; (4) the award of $6,304.22 in attorney's fees to Propel is unreasonable and excessive; and (5) legally and factually insufficient evidence supports the finding that Fenlon is personally liable for the amounts awarded in the judgment.<br />
<br />
We modify the judgment of the trial court and affirm as modified.<br />
<br />
<h2>
Background</h2>
<br />
Betty James owned a piece of residential property on Belarbor Street in southeast Houston. After several years' worth of property taxes had become delinquent, James entered into an agreement in September 2008 with Moncor, Inc.— the predecessor in interest of intervenor and appellee Propel Financial Services—in which Moncor agreed to pay James's delinquent taxes for the years 2003-2007 and assumed a tax lien on the property (the Note). In the Note, James agreed to re-pay Moncor $10,690.37 in principal, plus interest, with her monthly payment set at $171.82. The Note had a maturity date of October 1, 2018.<br />
<br />
At the same time James signed the Note, she also executed a Deed of Trust. James agreed, among other things, to make all monthly payments under the Note and "not to grant another tax lien pursuant to" Texas Tax Code section 32.06. The Deed of Trust specifically defined what constituted an "event of default," including James's failure to timely make any payment under the Note, and it provided remedies for Moncor if a default occurred, including acceleration of the outstanding balance of the Note and foreclosure of the tax lien that Moncor held on the property. The Deed of Trust contained the following provision:<br />
<blockquote>
Grantor [James] represents that this deed of trust and the Note are given for the following purposes: The Grantor has requested and authorized the Lender [Moncor] to pay the ad valorem taxes, penalties, interest and collection costs assessed against the Property for [James's account number] for taxes on the Property that are not delinquent and taxes on the Property that are delinquent and due and owing by the Grantor to Harris County, Texas, and all other taxing units for which Harris County, Texas serves as the collecting agent and/or tax collector . . . and for which the Harris County Tax Assessor Collector collects taxes (hereinafter collectively the "Taxing Units") and the Grantor has requested and authorized that tax collector for the Taxing Units (hereinafter the "Tax Assessor Collector") to transfer the tax liens held by the Taxing Units securing the payment of all of the above described taxes to the Lender as is authorized by V.T.C.A., Tax Code § 32.06. The Note evidences the amount advanced by the Lender. This deed of trust does not waive the tax liens, and the tax liens and the lien and rights created by this instrument shall be cumulative.</blockquote>
Neither the Note nor the Deed of Trust expressly stated which tax years were covered by the agreement between James and Moncor.<br />
<br />
James executed two affidavits "Authorizing Payment of Taxes and Transfer of Tax Lien": one for the 2003-2005 tax years, and one for the 2006-2007 tax years. These affidavits identified the property and authorized Moncor to pay the ad valorem taxes owed to various Harris County taxing units for the 2003-2005 tax years and the 2006-2007 tax years. James also authorized the Harris County Tax Assessor to transfer the tax liens held by the taxing units for these tax years to Moncor. On November 7, 2008, the Harris County Tax Assessor certified that Moncor had paid $4,386.82 in delinquent taxes for the 2006-2007 tax years on James's behalf, and the Tax Assessor transferred the tax lien for these years to Moncor. On March 17, 2015, the Tax Assessor certified that Moncor had paid $5,098.35 in delinquent taxes for the 2003-2005 tax years on James's behalf, and the Tax Assessor transferred the tax liens for these years to Moncor. The Note, Deed of Trust, James's affidavits, and the Tax Assessor's certifications were all filed in the Harris County property records.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=10445184092345756796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[1]" name="r[1]">[1]</a></sup><br />
<br />
No provision was made in the Deed of Trust for Moncor's payment of any taxes on the property after the 2007 tax year. However, evidence in the record indicates that Moncor paid the ad valorem taxes on the property for the 2008-2009 tax years on August 31, 2010. The record does not include a certificate from the Harris County Tax Assessor transferring the tax liens for these two years to Moncor. There is no evidence that anyone paid the taxes on the property after the 2009 tax year, although Harris County and related entities continued to levy taxes on it.<br />
<br />
James passed away in 2012 and her two sons became owners of the property. In July 2015, Harris County—on its own behalf and on behalf of the City of Houston, the Houston Independent School District, and the Houston Community College System—filed suit against James's sons and Propel to recover delinquent ad valorem taxes assessed against the property for tax years 2010-2014. Harris County named both of James's sons as defendants "in rem only" and stated that it did not seek a personal judgment against any defendant identified as "in rem only." Harris County alleged that it was owed a total of $9,908.74 in taxes, penalties, and interest for the 2010-2014 tax years. Harris County asserted tax liens against the property for the 2010-2014 tax years, and it sought foreclosure of its liens. Harris County also sought "personal judgment against Defendant(s) who owned the property on January 1 of the year for which the taxes were imposed for all taxes, penalties, interest, and costs that are due or will become due on the property, together with attorney's fees and abstractor's fees."<br />
<br />
James's sons appeared and filed an answer generally denying the allegations in Harris County's petition. Moncor's successor in interest, Propel, filed an answer and plea in intervention. Propel alleged that it held "a superior tax lien interest in the subject property" but that it was "not personally liable for any of the amounts or liens claimed" by Harris County. Propel alleged that taxes were assessed against the property, and the resulting tax liens were eventually transferred to Propel after it entered into the Note and Deed of Trust with James for payment of the taxes. It alleged that James had defaulted under the Note and Deed of Trust, and it therefore sought "a judgment of foreclosure against the Subject Property for delinquent taxes, together with penalties, interest, costs and fees, that are due Propel on the Subject Property." It alleged that, because James had defaulted under the Note, it "intervene[d] to seek foreclosure for all amounts owed Propel that are secured by its transferred tax lien." Propel did not allege the specific years for which it had paid James's delinquent taxes, nor did it identify the tax years for which it held a tax lien on the property. In its prayer for relief, Propel sought, among other things, "judgment for foreclosure [to] be entered in favor of Propel for the total amount due Propel under the [Note]" and an order of sale of the property.<br />
<br />
On August 1, 2016, Harris County nonsuited its claim against Propel.<br />
<br />
On September 8, 2016, Propel filed a selection of business records with the district clerk, supported by a business records affidavit completed by Propel's custodian of records. These records included the Note, the Deed of Trust, James's two affidavits authorizing Moncor's payment of her taxes for the 2003-2007 tax years, and the certifications from the Harris County Tax Assessor that Moncor had paid the 2003-2007 taxes on James's behalf and the tax liens had been transferred from the taxing units to Moncor.<br />
<br />
Propel also filed with the district clerk a "Transferred Tax Lien Payoff Statement," dated September 8, 2016, reflecting a "total payoff amount" of $29,452.31. The itemization of this payoff amount reflected $14,173.67 in "Unpaid [Principal] Balance" and $9,538.64 in "Interest as of Balance Date." Propel also included several pages of James's "Mortgage History Ledger" and "Loan History." These documents reflected that James made some payments on the Note into 2012. These documents also reflected that, on August 31, 2010, $4,077.09 was added to the principal balance on the Note, bringing the outstanding balance at that time to $14,127.44. A "Tax Lien Transfer Account Statement," dated September 8, 2016, stated that the "Principal Remaining" on the Note was $14,173.67, with a "Past Due Amount" of $13,736.46.<br />
<br />
In October 2016, during the pendency of the underlying lawsuit, appellant Fenlon purchased the property, subject to its liens and knowing that James had entered into the Note. On November 29, 2016, Harris County amended its petition to name Fenlon as a defendant. This amended petition did not name Fenlon as an "in rem only" defendant. Harris County also amended its petition to seek delinquent taxes, penalties, and interest for the 2015-2016 tax years, in addition to the 2010-2014 tax years. In this amended petition, Harris County named James's sons as defendants "in rem only" and named Fenlon as a defendant. Harris County did not seek any relief against Propel.<br />
<br />
Fenlon, acting pro se, appeared and filed an answer. Fenlon generally denied the allegations in Harris County's petition, as well as the allegations in Propel's petition in intervention. Fenlon also stated that he had "recently purchased the subject real property," and he requested that the trial court "limit any adverse finding against [him] to an in rem judgment."<br />
<br />
The trial court referred the case to a tax master sitting in chancery. At a hearing before the tax master on March 3, 2017, Harris County offered into evidence certified tax statements for the 2010-2016 tax years, records of liens, and deed records. Fenlon did not challenge any of the evidence offered by Harris County.<br />
<br />
Propel offered into evidence the Note, the Deed of Trust, documentation concerning James's authorization in 2008 to transfer the tax liens for the 2003-2007 tax years to Moncor, and certification from Harris County that Moncor had paid James's taxes for the years 2003-2007 and that the tax liens for these years had been transferred to Moncor. Propel's evidence included a "Transferred Tax Lien Payoff Statement," dated February 16, 2017, reflecting, among other things, $14,173.67 in "Unpaid [Principal] Balance" on the Note, $10,477.25 in "Interest as of Balance Date," $6,304.22 in attorney's fees, and a "total payoff amount" of $31,802.80.<br />
<br />
Propel also offered evidence that, in addition to the taxes on the property that Moncor had paid for tax years 2003-2007, Moncor had also paid $4,077.09 for tax years 2008-2009. Propel submitted a tax receipt from the Harris County Tax Assessor and a cancelled check indicating that, on August 31, 2010, Moncor paid $4,077.09 for James's delinquent 2008-2009 taxes. Propel did not offer an affidavit from James authorizing this payment, which was outside the agreement reached by Moncor and James in 2008, nor did it offer a certificate from the Harris County Tax Assessor transferring the tax liens for the 2008-2009 tax years to Moncor. Propel also offered evidence of the attorney's fees that it had incurred over several years related to James's taxes. Fenlon stated that he had no objections to Propel's evidence at the time it was offered. Fenlon later stated during the hearing, "I believe that the evidence does not support—there's problems with the evidence, and it doesn't support [Propel's] claim of what is due."<br />
<br />
During the hearing, Fenlon told the tax master that at the time he purchased the property the Note already existed and he knew of the Note at the time of the purchase. The attorney representing Harris County stated, "I think the biggest issue here is how much is owed on the note," and he asked Fenlon, "[H]ow much do you believe is owed on the note at this time?" Fenlon responded,<br />
<blockquote>
I believe it would be less than half of what they [Propel] are claiming. And there's a lot of unknowns. And I think it will be very difficult when we analyze things to really figure out what is owed, because there are a lot of problems with the way they've done the records, and an analysis of the records will bring this out.</blockquote>
Under questioning from the tax master, Fenlon stated his belief that "less than $15,000" should be owed on the Note. The only evidence presented at the hearing concerning the amount owed on the Note was the "Transferred Tax Lien Payoff Statement" submitted by Propel.<br />
<br />
On July 16, 2017, the tax master recommended that the Harris County taxing units recover a total of $14,624.17 in "delinquent base tax," penalties and interest, and attorney's fees for the 2010-2016 tax years, and the master recommended that Propel recover a total of $30,955.14 in "delinquent base tax," penalties and interest, and attorney's fees for the 2003-2007 tax years.<br />
<br />
On July 24, 2017, Fenlon moved to appeal the tax master's recommendation to the trial court and requested that the district judge hear the case. He stated in his motion, "Propel seeks monies far in excess of the amount of the tax liens held by Propel including any appropriate interest and penalties."<br />
In an amended answer filed on August 1, 2017, after he appealed the tax master's recommendation,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=10445184092345756796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[2]" name="r[2]">[2]</a></sup> Fenlon raised several arguments to defeat Propel's recovery. Fenlon first argued that Propel had improperly charged James interest on unpaid interest, instead of charging interest solely on unpaid principal. He also argued that Propel had voluntarily paid James's taxes and thus was not entitled to reimbursement. Fenlon also pointed out that Propel never presented a tax lien certificate from the Harris County Tax Assessor certifying that Moncor had paid James's 2008 taxes and that the tax lien had been transferred to Moncor. Finally, Fenlon argued that Propel committed an anticipatory breach of the Note, improperly charged James late fees and other fees, and made other accounting errors. Fenlon again requested that the trial court "limit any adverse finding against [him] to an in rem judgment."<br />
<br />
On August 11, 2017, the trial court signed a final judgment.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=10445184092345756796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[3]" name="r[3]">[3]</a></sup> In the judgment, the trial court stated that the "adjudged market value" of the property was $49,406. The trial court ordered the Harris County taxing units to recover, for the 2010 through 2016 tax years, a total of $8,170.46 in "delinquent base tax," $6,249.44 in penalties and interest, and $204.27 in attorney's fees. The trial court awarded Propel, for tax years 2003 through 2007, $14,173.67 in "delinquent base tax," $10,477.25 in penalties and interest, and $6,304.22 in attorney's fees, for a total recovery of $30,955.14. The trial court's judgment did not mention the 2008 or 2009 tax years.<br />
The trial court also ordered the taxing units to foreclose on its tax liens on the property, and the court ordered the property sold "for the adjudged market value of the property stated in the judgment or the aggregate amount of the judgments against the property, whichever is less."<br />
<br />
Fenlon moved for a new trial, and this motion was overruled by operation of law. He did not request that the trial court file findings of fact and conclusions of law. This appeal followed.<br />
<br />
<h2>
Sufficiency of the Evidence</h2>
<br />
In his first issue, Fenlon contends that legally and factually insufficient evidence supports the trial court's finding that the delinquent base tax owed to Propel for the 2003 through 2007 tax years is $14,173.67. In his second issue, he contends that legally and factually insufficient evidence supports the finding that Propel had a valid tax lien for the 2006 and 2007 tax years. In his third issue, he argues that legally and factually insufficient evidence supports the finding that the penalties and interest owed to Propel for the 2003 through 2007 tax years is $10,477.25. Fenlon also contends, in his fourth issue, that the award of $6,304.22 in attorney's fees is unreasonable and excessive.<br />
<br />
<h2>
<i>A. Standard of Review</i></h2>
<br />
In an appeal of a judgment rendered after a bench trial, the trial court's findings of fact have the same weight as a jury's verdict, and we review the legal and factual sufficiency of the evidence supporting those findings by using the same standards to review jury verdicts. <a href="https://scholar.google.com/scholar_case?case=13055718646999048787&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Ferrara v. Nutt,</i> 555 S.W.3d 227, 235 (Tex. App.-Houston [1st Dist.] 2018, no pet.)</a>; <i>see </i><a href="https://scholar.google.com/scholar_case?case=15601123785945381933&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>MBM Fin. Corp. v. Woodlands Operating Co.,</i> 292 S.W.3d 660, 663 n.3 (Tex. 2009)</a>. When, as here, the trial court does not issue findings of fact and conclusions of law, all facts necessary to support the judgment and that are supported by the evidence are implied. <a href="https://scholar.google.com/scholar_case?case=12163558130232331977&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>BMC Software Belg., N.V. v. Marchand,</i> 83 S.W.3d 789, 795 (Tex. 2002)</a>. When the appellate record includes the reporter's and clerk's records, implied findings are not conclusive, and they may be challenged for legal and factual sufficiency. <i>Id.</i><br />
<i><br /></i>
When considering whether legally sufficient evidence supports a challenged finding, we consider the evidence that favors the finding if a reasonable fact finder could, and we disregard contrary evidence unless a reasonable fact finder could not. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14274397393234131974&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Choice! Power, L.P. v. Feeley,</i> 501 S.W.3d 199, 208 (Tex. App.-Houston [1st Dist.] 2016, no pet.)</a> (citing <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>City of Keller v. Wilson,</i> 168 S.W.3d 802, 827 (Tex. 2005)</a>). We view the evidence in the light most favorable to the finding and indulge every reasonable inference to support it. <i>Id.</i> We may not sustain a legal sufficiency, or "no evidence," point unless the record demonstrates: (1) a complete absence of evidence of a vital fact; (2) that the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) that the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) that the evidence conclusively establishes the opposite of the vital fact. <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>City of Keller,</i> 168 S.W.3d at 810</a>). The trial court, as the fact finder in a bench trial, is the sole judge of the credibility of the witnesses and the weight to be given to their testimony. <i>Id.</i> If the evidence would allow "reasonable and fair-minded people to differ in their conclusions," we will not substitute our judgment for that of the fact finder. <i>Id.</i><br />
<i><br /></i>
In conducting a factual sufficiency review, we consider and weigh all of the evidence. <i>Id.</i> at 209; <i>see </i><a href="https://scholar.google.com/scholar_case?case=5426405722736665125&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Crosstex N. Tex. Pipeline, L.P. v. Gardiner,</i> 505 S.W.3d 580, 615 (Tex. 2016)</a>. When an appellant challenges the factual sufficiency of evidence supporting an adverse finding on which he did not have the burden of proof at trial, we set aside the verdict only if the evidence supporting the finding is so weak as to make the verdict clearly wrong and manifestly unjust. <a href="https://scholar.google.com/scholar_case?case=14274397393234131974&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Choice! Power,</i> 501 S.W.3d at 209</a>.<br />
<br />
<h2>
<i>B. Tax Lien Transfers</i></h2>
<br />
On January 1 of each year, a tax lien attaches to real property to secure the payment of all taxes, penalties, and interest ultimately imposed for the tax year on the property. TEX. TAX CODE ANN. § 32.01(a) (West 2015); <a href="https://scholar.google.com/scholar_case?case=13586619400965969054&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Avelo Mortg., LLC v. Infinity Capital, LLC,</i> 366 S.W.3d 258, 261-62 (Tex. App.-Houston [14th Dist.] 2012, no pet.)</a>. A property owner may authorize another person (the "transferee") to pay the taxes imposed on real property by filing with the collector for the taxing unit a sworn document authorizing payment of the taxes and describing the property. <i>See</i> Act of May 24, 2007, 80th Leg., R.S., ch. 1220, § 3, 2007 Tex. Gen. Laws 4111, 4116 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(a-1)); Act of May 25, 2007, 80th Leg., R.S., ch. 1329, § 1, 2007 Tex. Gen. Laws 4484, 4484 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(a-1)); <a href="https://scholar.google.com/scholar_case?case=13586619400965969054&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Avelo Mortg.,</i> 366 S.W.3d at 262</a>. A tax lien may be transferred from the taxing unit to the person who pays taxes on behalf of the property owner. Act of May 25, 2007, 80th Leg., R.S., ch. 1329, § 1, 2007 Tex. Gen. Laws 4484, 4484 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(a-2)(1)); <a href="https://scholar.google.com/scholar_case?case=17595838777333347972&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>1901 NW 28th Street Tr. v. Lillian Wilson, LLC,</i> 535 S.W.3d 96, 100 (Tex. App.-Fort Worth 2017, no pet.)</a>.<br />
<br />
If a transferee pays the taxes and any penalties and interest imposed, the collector for the taxing unit must issue a tax receipt to the transferee and must certify that the taxes have been paid by the transferee on the property owner's behalf and that the taxing unit's tax lien is transferred to the transferee. Act of May 25, 2007, 80th Leg., R.S., ch. 1329, § 1, 2007 Tex. Gen. Laws 4484, 4485 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(b)); <a href="https://scholar.google.com/scholar_case?case=13586619400965969054&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Avelo Mortg.,</i> 366 S.W.3d at 262</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=9079810452655385499&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Genesis Tax Loan Servs., Inc. v. Kothmann,</i> 339 S.W.3d 104, 110 (Tex. 2011)</a> ("The statutory transfer process involves an authorization by the property owner and a certification by the tax collector."). The transferee shall record the transferred tax lien and the certification in the deed records of the county where the property is located. TEX. TAX CODE ANN. § 32.06(d). Section 32.06(e) provides that a transferee may not charge more than 18% interest per year on the funds advanced to the property owner and states that "[f]unds advanced are limited to the taxes, penalties, interest, and collection costs paid as shown on the tax receipt, expenses paid to record the lien, plus reasonable closing costs." <i>Id.</i> § 32.06(e). The transferee may foreclose on the tax lien. Act of May 25, 2007, 80th Leg., R.S., ch. 1329, § 1, 2007 Tex. Gen. Laws 4484, 4485 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(c)); <i>see also</i> TEX. TAX CODE ANN. § 32.065(c) (West 2015) ("Notwithstanding any other provision of this code, a transferee of a tax lien . . . is subrogated to and is entitled to exercise any right or remedy possessed by the transferring taxing unit, including or related to foreclosure or judicial sale . . . ."); <a href="https://scholar.google.com/scholar_case?case=4083186500969627895&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>ABN AMRO Mortg. Grp. v. TCB Farm & Ranch Land Invs.,</i> 200 S.W.3d 774, 777 (Tex. App.-Fort Worth 2006, no pet.)</a>.<br />
<br />
At any time after a property tax becomes delinquent, a taxing unit may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. TEX. TAX CODE ANN. § 33.41(a) (West 2015). In a suit to foreclose a delinquent tax lien, the taxing unit shall join each transferee of a tax lien under section 32.06. <i>Id.</i> § 33.445(a) (West 2015). After the transferee joins the suit, the transferee "may file its claim and seek foreclosure in the suit for <i>all amounts owed the transferee that are secured by the transferred tax lien,</i> regardless of when the original transfer of tax lien was recorded or whether the original loan secured by the transferred tax lien is delinquent." <i>Id.</i> (emphasis added).<br />
<br />
<h2>
<i>C. Analysis</i></h2>
<br />
<br />
<h2>
1. Finding of valid tax lien for 2006-2007 tax years</h2>
<br />
In his second issue, Fenlon contends that insufficient evidence supports the trial court's finding that Propel had a valid tax lien for the 2006-2007 tax years because there is no evidence in the record that James executed an affidavit authorizing the payment of taxes and transfer of the tax liens to Propel for these two tax years. He argues that, instead, the affidavits from James included in the appellate record only authorize payment and transfer of the tax liens for the 2003-2005 tax years.<br />
<br />
In addition to the clerk's record, the appellate record also contains a supplemental clerk's record. The supplemental clerk's record includes, among other things, a business records affidavit completed by Propel's custodian of records and forty-one pages of records, filed with the district clerk on September 8, 2016. These records include a "Transferred Tax Lien Payoff Statement" reflecting that the unpaid principal balance of the loan to James was $14,173.67, a payment ledger and loan history, a "Tax Lien Transfer Account Statement," the Note, and the Deed of Trust. Propel also filed an "Affidavit Authorizing Payment of Taxes and Transfer of Tax Lien," signed by James and notarized on September 25, 2008, and recorded in the Harris County property records. This affidavit lists Moncor's name and address, describes the property, and includes the following paragraph:<br />
<blockquote>
I (We) hereby request and authorize Moncor, Inc. dba Moncor Mortgage . . . to pay the ad valorem taxes, penalties, interest and collection costs due and owing by me (us) to Harris [County], Texas and all other taxing units for which Harris [County], Texas serves as the collecting agent and/or tax collector and for which the Harris [County] Tax Assessor Collector collects taxes, Houston ISD, Harris County, Harris County Flood Control Dist[rict], Port of Houston Authority, Harris County Hospital District, Harris County Dept[artment] of Education, Houston Community College System, City of Houston for [James's account number] <i>for the tax year 2006-2007</i> (collectively the "Taxes"), and upon the payment of said Taxes, I (we) request and authorize the Harris [County] Tax Assessor Collector to transfer the tax liens held by the Taxing Units securing the payment of said Taxes to Moncor, Inc. dba Moncor Mortgage as authorized by V.T.C.A. Tax Code § 32.06.</blockquote>
(Emphasis added.) Immediately following this affidavit is a certification from the Harris County Tax Assessor Collector that Moncor paid $4,386.82 on James's behalf for the 2006-2007 taxes years and that tax liens for these years were transferred to Moncor.<br />
<br />
The record therefore includes evidence that James executed an affidavit authorizing Moncor to pay her delinquent property taxes for the 2006-2007 tax year and authorizing the transfer of the tax liens for these tax years to Moncor. <i>See</i> Act of May 24, 2007, 80th Leg., R.S., ch. 1220, § 3, 2007 Tex. Gen. Laws 4111, 4116 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(a-1)(1)) (stating requirements for document executed by property owner to authorize another person to pay property taxes imposed on owner's real property). The record also includes evidence that the Harris County Tax Assessor certified Moncor's payment of James's taxes for the 2006-2007 tax years, transferred the tax liens to Moncor, and recorded this certification in the Harris County property records. <i>See</i> Act of May 25, 2007, 80th Leg., R.S., ch. 1329, § 1, 2007 Tex. Gen. Laws 4484, 4485 (amended 2013) (current version at TEX. TAX CODE ANN. § 32.06(b)) (requiring certification of payment and transfer of tax lien by county tax collector); <a href="https://scholar.google.com/scholar_case?case=13586619400965969054&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Avelo Mortg.,</i> 366 S.W.3d at 262</a> (stating that, under section 32.06, two documents were required to be recorded in county where property was located for tax lien transfer to be valid: sworn document authorizing transfer and tax collector's certified statement of payment and transfer).<br />
<br />
We hold that sufficient evidence supports the trial court's implied finding that Propel, as Moncor's successor in interest, had a valid tax lien for the 2006-2007 tax years. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14274397393234131974&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Choice! Power,</i> 501 S.W.3d at 208-09</a>.<br />
<br />
We overrule Fenlon's second issue.<br />
<br />
<h2>
2. Award of delinquent base tax, penalties and interest, and attorney's fees</h2>
<br />
In his first, third, and fourth issues, Fenlon challenges the trial court's award of delinquent base tax, penalties and interest, and attorney's fees to Propel.<br />
<br />
At the hearing before the tax master, Propel submitted business records into evidence, including a "Transferred Tax Lien Payoff Statement." This document reflected that the "Unpaid [Principal] Balance" on the Note was $14,173.67, that the "Interest as of Balance Date" was $10,477.25," that Propel had incurred $6,304.22 in attorney's fees, and that the "total payoff amount" was $31,802.80. Propel also introduced as evidence the Note, the Deed of Trust, James's affidavits authorizing the payments and transfers of the tax liens, the required certifications from the Harris County Tax Assessor, the cancelled check reflecting Moncor's payment of James's 2008 and 2009 taxes, and affidavits relating to attorney's fees. Fenlon did not object at the time this evidence was introduced.<br />
Later in the hearing, Fenlon stated, "I believe that the evidence does not support—there's problems with the evidence, and it doesn't support [Propel's] claim of what is due." The following exchange also occurred during the hearing:<br />
<blockquote>
Harris County: I think the biggest issue here is how much is owed on the note, and I would like to ask that question directly. How much do you believe—how much do you believe should be—how much do you believe is owed on the note at this time?</blockquote>
<blockquote>
Fenlon: I believe it would be less than half of what [Propel is] claiming. And there's a lot of unknowns. And I think it will be very difficult when we analyze things to really figure out what is owed, because there are a lot of problems with the way they've done the records, and an analysis of the records will bring this out.</blockquote>
<blockquote>
The Court: Okay.</blockquote>
<blockquote>
Propel: Your Honor, do I need to continue with—</blockquote>
<blockquote>
The Court: No. Mr. Fenlon, your objection as to the evidence [is] the fact that you understand that the note should be less than what is being presented, correct?</blockquote>
<blockquote>
Fenlon: Yes.</blockquote>
<blockquote>
The Court: How much should it be less? What are you talking about?</blockquote>
<blockquote>
Fenlon: I would think it should be less than half the amount.</blockquote>
<blockquote>
The Court: Give me a number.</blockquote>
<blockquote>
Fenlon: Less than $15,000, it really—I don't have the data, the information to calculate it, what it should be because the records they are presenting are not correct, and there are unknowns.</blockquote>
Fenlon did not identify the specific ways in which he believed Propel's records were inaccurate. He did not raise any specific challenges to the validity of Propel's documents, nor did he provide a specific amount that, he believed, should be owed on the Note. Further, he raised no objection at the hearing to Propel's evidence on attorney's fees, and it was not until his motion for new trial that he argued that Propel sought unreasonable and excessive amounts in attorney's fees, although he did not specifically identify charges that he believed were duplicative or excessive.<br />
<br />
To preserve an issue for appellate review, the complaining party must show that he made his complaint to the trial court by a timely request, objection, or motion that stated the grounds for the ruling sought with sufficient specificity to make the trial court aware of the complaint. TEX. R. APP. P. 33.1(a)(1). Fenlon's general statements at the hearing before the tax master that Propel's evidence did not support its claim and that Propel made errors in calculating the balance on the Note were not sufficiently specific to preserve any complaint concerning Propel's evidence. <i>See id.</i><br />
Propel submitted evidence demonstrating that the outstanding principal balance under the Note was $14,173.67, that the penalties and interest that had accrued on the principal balance was $10,477.25, and that the attorney's fees it had incurred were $6,304.22. Fenlon presented no contradictory evidence. The trial court awarded these amounts to Propel in the final judgment. We therefore conclude that legally and factually sufficient evidence supported the amounts awarded to Propel in the final judgment.<br />
<br />
We overrule Fenlon's first, third, and fourth issues.<br />
<br />
<h2>
Personal Liability</h2>
<br />
Finally, in his fifth issue, Fenlon contends that the trial court improperly found him personally liable for the judgment in this case. He argues that because he did not own the property on January 1 of any of the tax years addressed in the trial court's judgment, the judgment against him could only be "in rem" and the court erred to the extent that it found him personally liable. We agree.<br />
<br />
Property taxes are the personal obligation of the person who owns or acquires the property on January 1 of the year for which the tax is imposed. TEX. TAX CODE ANN. 32.07(a) (West 2015). At any time after a taxing unit's tax on property becomes delinquent, the taxing unit "may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both." <i>Id.</i> § 33.41(a). If, in a suit to collect a delinquent property tax, the taxing unit seeks to enforce personal liability for the tax, the defendant may raise the affirmative defense that he did not own the property on January 1 of the year for which the tax was imposed. <i>Id.</i> § 42.09(b)(1) (West 2015); <a href="https://scholar.google.com/scholar_case?case=14294393555485913273&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hydrogeo, LLC v. Quitman Indep. Sch. Dist.,</i> 483 S.W.3d 51, 60 (Tex. App.-Texarkana 2016, no pet.)</a>.<br />
<br />
"One who purchases property does so subject to any delinquent taxes." <a href="https://scholar.google.com/scholar_case?case=8265501479485988513&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Franz v. Katy Indep. Sch. Dist.,</i> 35 S.W.3d 749, 754 (Tex. App.-Houston [1st Dist.] 2000, no pet.)</a>. However, the purchaser does not become personally liable for delinquent taxes; instead, the property may be subject to a lien to secure payment of the delinquent taxes. <i>Id.; </i><a href="https://scholar.google.com/scholar_case?case=8741586305857659796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>State v. Lincoln Corp.,</i> 596 S.W.2d 593, 595-96 (Tex. Civ. App.-Beaumont 1980, writ ref'd n.r.e</a>.) ("It is well settled that one who purchases property against which taxes are delinquent does not become personally liable therefor in the absence of an express assumption of the tax indebtedness."); <a href="https://scholar.google.com/scholar_case?case=4521949821611721462&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Leonard v. State,</i> 242 S.W.2d 199, 200 (Tex. Civ. App.-San Antonio 1951, no writ)</a> ("The defendant was not personally liable for taxes prior to the time that he purchased the property, and while the property is subject to a lien for all past due taxes the present owner is not personally liable for taxes which were assessed against the property prior to the time he purchased it.").<br />
<br />
In its third amended petition, filed in November 2016, Harris County named four defendants, including Fenlon, James's two sons, and another individual who had owned the property after James's sons and before Fenlon. For three of the defendants, Harris County included an indication of "(In Rem Only)," but it did not include this indication for Fenlon. Harris County also stated that it did not "seek any monetary relief or personal judgment against any defendant identified as In Rem Only hereinabove." Against these defendants, Harris County sought foreclosure of its tax liens for the 2010-2016 tax years. In its petition in intervention, Propel sought "judgment for foreclosure [to] be entered in favor of Propel for the total amount due Propel under the [Note]." In his answer and amended answer, Fenlon requested that the trial court limit any adverse judgment against him "to an in rem judgment."<br />
<br />
The trial court's final judgment listed four defendants: as in Harris County's amended petition, three of the defendants were identified as "(In Rem Only)," but Fenlon was not. The trial court's judgment also stated, "IT IS ORDERED that Plaintiff Taxing Unit(s) shall not be granted any monetary relief against any defendant identified as IN REM ONLY." The judgment further ordered that the taxing units "do have and recover from the Defendant(s), as indicated above, the total sum of money due for taxes, penalties, interest, and attorney[`s] fees" and also ordered foreclosure of the tax liens against the property.<br />
<br />
It is undisputed that Fenlon purchased the property in October 2016 and that he, therefore, did not own the property on January 1 of any of the tax years for which Propel and Harris County held liens for delinquent taxes. The record contains no indication that Fenlon, when he purchased the property, expressly agreed to assume liability for the delinquent taxes. We conclude that, while Fenlon purchased the property subject to the delinquent taxes and the liens securing payment of the delinquent taxes, he did not become personally liable for the delinquent taxes. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8265501479485988513&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Franz,</i> 35 S.W.3d at 754</a>. Thus, the trial court erred to the extent that it entered a personal judgment against Fenlon for the delinquent taxes. <i>See id.; </i><a href="https://scholar.google.com/scholar_case?case=8741586305857659796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Lincoln Corp.,</i> 596 S.W.2d at 595-96</a>; <a href="https://scholar.google.com/scholar_case?case=4521949821611721462&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Leonard,</i> 242 S.W.2d at 200</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=3351794416411605501&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Tierra Sol Joint Venture v. City of El Paso,</i> 311 S.W.3d 492, 499 (Tex. App.-El Paso 2009, no pet.)</a> ("Tax liens attach upon the land rather than upon the person, and a foreclosure suit is a proceeding `<i>in rem</i>' rather than `<i>in personam.</i>'").<br />
<br />
We sustain Fenlon's fifth issue.<br />
<br />
<h2>
Conclusion</h2>
<br />
We modify the judgment of the trial court to indicate that Fenlon is a defendant "in rem only." We affirm the judgment as modified.<br />
<br />
<small></small><br />
<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=10445184092345756796&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[1]" name="[1]">[1]</a> On September 15, 2009, Moncor transferred the Note, Deed of Trust, and the tax liens to Moncor Tax Advisors, Inc. Moncor Tax Advisors then transferred the Note, Deed of Trust, and the tax liens to Intervenor Propel Financial Services, LLC, on July 11, 2014. Propel Financial Services transferred the Note, Deed of Trust, and tax liens to Propel Funding National 1, LLC, on April 1, 2016. The transfer documents were recorded in the Harris County property records. Propel Funding National 1, LLC appointed Propel Financial Services to act as its servicer, agent, and attorney-in-fact.</span>MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-54411164551557559272019-01-02T16:55:00.002-06:002019-01-02T16:55:59.488-06:00Affirmative Defense of Quasi-Estoppel The affirmative defense of quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position she has previously taken. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000). The doctrine applies when it would be unconscionable to allow a party to maintain a position inconsistent with one in which she acquired or by which that party accepted a benefit. Nash v. Beckett, 365 S.W.3d 131, 144 (Tex. App.-Texarkana 2012, pet. denied).<br />
<br />
SOURCE: TYLER COURT OF APPEALS - No. 12-17-00234-CV - 12/21/2018<br />
<br />
The record shows that Robert initiated approximately fifty real estate transactions in which he invested Trust assets. Deborah agreed to all of these transactions. All transactions except Bighorn were successful and the Trust benefitted from those prior investments. Therefore, Deborah's claims for breach of fiduciary duty are barred by the affirmative defense of quasi-estoppel. See id.<br />
<br />
<center>
<h3 id="gsl_case_name">
DEBORAH PATTERSON HOWARD GOUGHNOUR, Appellant,<br />v.<br />ROBERT H. PATTERSON, JR., TRUSTEE OF THE DEBORAH PATTERSON HOWARD TRUST, Appellee.</h3>
</center>
<center>
<a href="https://scholar.google.com/scholar?scidkt=15535337556118778409&as_sdt=2&hl=en">No. 12-17-00234-CV.</a></center>
<center>
<b>Court of Appeals of Texas, Twelfth District, Tyler.</b></center>
<center>
December 21, 2018.</center>
Craig M. Daugherty, P. Tyrone Beard, Jim E. Bullock, for Deborah Patterson Howard Goughnour, Appellant.<br />
Richard H. Lottmann, Mary C. Burdette, Brandy Baxter-Thompson, Deborah J. Race, for Robert H. Patterson, Jr., Appellee.<br />
David M. Pruessner, for Dean Bailey, Appellee.<br />
Appeal from the 241st Judicial District Court, Smith County, Texas.<br />
<i>Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.</i><br />
<br />
<h2>
<i>MEMORANDUM OPINION</i></h2>
<br />
BRIAN HOYLE, Justice.<br />
Deborah Patterson Howard Goughnour appeals from an adverse judgment rendered in favor of Robert H. Patterson, Jr., Trustee of the Deborah Patterson Howard Trust. In forty-two issues, Deborah raises complaints regarding discovery rulings, Robert's affirmative defenses to her counterclaims, sufficiency of the evidence to show that Robert properly administered the Trust, conditional provisions in the judgment, attorney's fees, and a discovery abuse sanctions order. We modify in part and affirm as modified.<br />
<br />
<h2>
BACKGROUND</h2>
<br />
Robert Harold Patterson, Sr. provided for the creation of a Trust for the benefit of his wife, Ruth, upon his death. Ruth served as the Trustee until 2002, when, by judicial modification, she resigned, and the Trust was divided into four trusts of equal value, named after each of their four children.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[1]" name="r[1]">[1]</a></sup> Ruth is the sole beneficiary during her lifetime, and upon Ruth's death any remaining assets in the four trusts pass to the trust's namesake.<br />
In 2002, Robert Patterson, Jr. became Trustee of all four trusts. With the knowledge of Ruth and his three siblings, Robert invested Trust assets to generate income. In July 2007, Robert and his business partner Dean Bailey formed Bighorn Venture III, Ltd. to purchase real estate and develop a residential subdivision. Robert invited Ruth and his siblings to participate by allowing the use of Trust funds. They all agreed, and Robert transferred a total of $2.1 million from the four trusts to Bighorn. The Bighorn project failed, and the Trust lost the $2.1 million.<br />
In 2011, Robert filed a petition for resignation as Trustee of the Deborah Patterson Howard Trust (DPH Trust), approval of accountings, judicial discharge, and appointment of a Successor Trustee. Deborah did not oppose Robert's resignation as Trustee. However, she filed counterclaims against Robert for breach of fiduciary duty, statutory violations, misuse of trust property, and fraud. She also asserted allegations against Robert and Bailey for civil conspiracy to breach fiduciary duty, civil conspiracy to commit fraud, breach of a personal guaranty, and breach of contract. Robert and Bailey asserted numerous affirmative defenses to the counterclaims.<br />
Deborah sought an interlocutory order to remove Robert as Trustee immediately which was denied in March 2013. Deborah filed a motion for partial summary judgment regarding Robert's claim for a discharge from liability and a motion for summary judgment on her claims for breach of fiduciary duty and breach of guaranty. In his response, Robert asserted several affirmative defenses. The trial court denied both motions in August 2015. Additionally, Robert filed no evidence and traditional motions for partial summary judgment on Deborah's guaranty claim and a traditional motion for partial summary judgment attacking her other claims, asserting his affirmative defenses. The trial court granted all three of Robert's motions for partial summary judgment in December 2015.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[2]" name="r[2]">[2]</a></sup><br />
After a trial before the court on the remaining issues, the court rendered judgment approving the DPH Trust accounting, ordered that Robert's administration of the DPH Trust is approved, and that Robert, individually and in his capacity of Trustee, is "completely discharged and relieved of all duties" and "fully and completely released and discharged from any and all claims, duties, causes of action or liabilities (including taxes of any kind) relating to any and all actions or omissions in connection with his administration of the DPH Trust." The court ordered that the Trustee or Successor Trustee pay all outstanding legal and accounting fees incurred by the DPH Trust, appointed a Successor Trustee effective as of the date the final judgment becomes final and unappealable, and relieved the Successor Trustee of any and all duty, responsibility, or authority to investigate the actions or inactions of Robert as prior Trustee. The court further ordered that Deborah take nothing on all her claims against Robert and Bailey, incorporating its prior summary judgment orders. The court also ordered Deborah to pay attorneys' fees for Robert and Ruth. This appeal ensued.<br />
<br />
<h2>
DEBORAH'S COUNTERCLAIMS</h2>
<br />
Deborah was in favor of Robert's resignation. She felt that he pilfered the Trust for his own benefit and engaged in subterfuge to keep it hidden. In an attempt to recover the money she believed Robert misappropriated, she filed counterclaims for breach of fiduciary duty, fraud, breach of a guaranty, exposure to tax liability, and, together with Bailey, conspiracy to breach fiduciary duty and to commit fraud. All of Deborah's counterclaims were disposed of by summary judgment.<br />
<br />
<h2>
Standard of Review</h2>
<br />
We review the trial court's decision to grant summary judgment de novo. <a href="https://scholar.google.com/scholar_case?case=4618187279043026465&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Tex. Mun. Power Agency v. Pub. Util. Comm'n,</i> 253 S.W.3d 184, 192 (Tex. 2007)</a>. After adequate time for discovery, a party without the burden of proof at trial may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense. TEX. R. CIV. P. 166a(i). Once a no evidence motion has been filed in accordance with Rule 166a(i), the burden shifts to the nonmovant to bring forth evidence that raises a fact issue on the challenged element. <a href="https://scholar.google.com/scholar_case?case=634515139996330548&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Mack Trucks, Inc. v. Tamez,</i> 206 S.W.3d 572, 582 (Tex. 2006)</a>. A no evidence challenge will be sustained when, among other scenarios, there is a complete absence of evidence of a vital fact. <a href="https://scholar.google.com/scholar_case?case=3037178416992355379&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Merriman v. XTO Energy, Inc.,</i> 407 S.W.3d 244, 248 (Tex. 2013)</a>.<br />
A party moving for traditional summary judgment bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). A defendant who conclusively negates at least one of the essential elements of the cause of action or conclusively establishes an affirmative defense is entitled to summary judgment. <a href="https://scholar.google.com/scholar_case?case=15620743557171271991&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Frost Nat'l Bank v. Fernandez,</i> 315 S.W.3d 494, 508 (Tex. 2010)</a>. Once the defendant establishes his right to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a genuine issue of material fact. <a href="https://scholar.google.com/scholar_case?case=3592489423338619963&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Simulis, L.L.C. v. Gen. Elec. Capital Corp.,</i> 439 S.W.3d 571, 575 (Tex. App.-Houston [14th Dist.] 2014, no pet.)</a>.<br />
To determine if there is a fact issue, we review the evidence in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could do so, and disregarding contrary evidence and inferences unless reasonable jurors could not. <a href="https://scholar.google.com/scholar_case?case=6373610643099867527&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Gonzalez v. Ramirez,</i> 463 S.W.3d 499, 504 (Tex. 2015) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=7847608500596721360&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,</i> 289 S.W.3d 844, 848 (Tex. 2009)</a>. More than a scintilla of evidence exists, and the evidence raises a genuine issue of fact, when the evidence rises to a level that would enable reasonable and fair minded jurors to differ in their conclusions in light of all the summary judgment evidence. <a href="https://scholar.google.com/scholar_case?case=17119693818026086763&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Goodyear Tire & Rubber Co. v. Mayes,</i> 236 S.W.3d 754, 755 (Tex. 2007) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=1285567049726364148&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wal-Mart Stores, Inc. v. Spates,</i> 186 S.W.3d 566, 568 (Tex. 2006) (per curiam)</a>; <a href="https://scholar.google.com/scholar_case?case=15365811585969460745&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Forbes Inc. v. Granada Biosciences, Inc.,</i> 124 S.W.3d 167, 172 (Tex. 2003)</a>. Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. <a href="https://scholar.google.com/scholar_case?case=15365811585969460745&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Forbes, Inc.,</i> 124 S.W.3d at 172</a>.<br />
When a party has moved for summary judgment on both traditional and no evidence grounds, we typically first review the propriety of the summary judgment under the no evidence standard. <i>See</i> TEX. R. CIV. P. 166a(i); <a href="https://scholar.google.com/scholar_case?case=6743019337152020464&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Ford Motor Co. v. Ridgway,</i> 135 S.W.3d 598, 600 (Tex. 2004)</a>. When both sides move for summary judgment and the trial court grants one motion but denies the other, the appellate court should review both sides' proof and determine all questions presented by the motions. <a href="https://scholar.google.com/scholar_case?case=10456033731113852494&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc.,</i> 323 S.W.3d 151, 153-54 (Tex. 2010) (per curiam)</a>. The appellate court should then render the judgment the trial court should have rendered. <i>Id.</i> at 154. However, the denial of a cross-motion for summary judgment is only reviewable if that cross-motion sought a disposition of all claims in the trial court. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=8263472989059452793&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re D.W.G.,</i> 391 S.W.3d 154, 164 (Tex. App.-San Antonio 2012, no pet.)</a>.<br />
<br />
<h2>
Breach of Fiduciary Duty and Fraud</h2>
<br />
In her thirteenth issue, Deborah contends the trial court erred in granting Robert's motion for partial summary judgment on her counterclaims,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[3]" name="r[3]">[3]</a></sup> which was based on several affirmative defenses. In her eighth, ninth, and tenth issues, she contends the trial court erred in denying her second motion for partial summary judgment which addressed her claims for breach of fiduciary duty and, alternatively, her claim that Robert breached his personal guaranty. In this motion, she also asserted that Robert's affirmative defenses have no merit.<br />
<br />
<h2>
<i>Statute of Limitations</i></h2>
<br />
A suit for breach of fiduciary duty or fraud must be brought no later than four years from the date the cause of action accrues. TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a) (West 2002). When a cause of action accrues is a question of law. <a href="https://scholar.google.com/scholar_case?case=15041537762895942074&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Moreno v. Sterling Drug, Inc.,</i> 787 S.W.2d 348, 351 (Tex. 1990)</a>. A cause of action accrues when facts have come into existence that authorize a claimant to seek a judicial remedy. <a href="https://scholar.google.com/scholar_case?case=14869237150354339192&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Apex Towing Co. v. Tolin,</i> 41 S.W.3d 118, 120 (Tex. 2001)</a>. Defendants seeking summary judgment on the basis of limitations must prove when the cause of action accrued. <a href="https://scholar.google.com/scholar_case?case=14117488151825694495&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Burns v. Thomas,</i> 786 S.W.2d 266, 267 (Tex. 1990)</a>. In most cases, a cause of action accrues when a wrongful act causes a legal injury, regardless of when the plaintiff learns of that injury. <a href="https://scholar.google.com/scholar_case?case=6936701091571468222&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Provident Life & Accident Ins. Co. v. Knott,</i> 128 S.W.3d 211, 221 (Tex. 2003)</a>.<br />
When applicable, the discovery rule defers accrual of a cause of action until the plaintiff knew or, exercising reasonable diligence, should have known of the facts giving rise to the cause of action. <a href="https://scholar.google.com/scholar_case?case=644765208014293568&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Computer Assocs. Int'l, Inc. v. Altai, Inc.,</i> 918 S.W.2d 453, 455 (Tex. 1996)</a>. The discovery rule applies to claims for breach of fiduciary duty. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=6669782305888399065&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>HECI Expl. Co. v. Neel,</i> 982 S.W.2d 881, 888 (Tex. 1998)</a>. Likewise, fraud prevents the running of the statute of limitations until it is discovered, or by the exercise of reasonable diligence might have been discovered. <a href="https://scholar.google.com/scholar_case?case=2948539023217545470&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hooks v. Samson Lone Star, Ltd. P'ship,</i> 457 S.W.3d 52, 57 (Tex. 2015)</a>. A person to whom a fiduciary duty is owed is relieved of the responsibility of diligent inquiry into the fiduciary's conduct, so long as the relationship exists. <a href="https://scholar.google.com/scholar_case?case=3511142506448916365&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>S.V. v. R.V.,</i> 933 S.W.2d 1, 8 (Tex. 1996)</a>. However, once the fact of misconduct becomes apparent it can no longer be ignored, regardless of the nature of the relationship. <i>Id.</i><br />
In his motion for partial summary judgment, Robert asserted that Deborah's claims for breach of fiduciary duty and fraud are barred by the statute of limitations. Contending that her claims accrued on August 30, 2007, the day the Bighorn investment was made, he argues that her July 30, 2012 counterclaims were not timely filed.<br />
In her response, Deborah argued that "the earliest she had any inkling that Robert was up to something nefarious was in 2009" when her request for an accounting was met with a demand that she release him from past acts. Her argument continued with, "[a]t best, Deborah's claims accrued in 2011, when Robert first disclosed that her trust had no ownership interest in Bighorn or its real property. . . ." Deborah rebuffs Robert's assertion that the injury Deborah complains of occurred when Robert invested Trust assets in Bighorn. Although she admits "[i]t is true that Deborah's claims for Robert's breach of his fiduciary duty and fraud arise out of the Bighorn transaction," she lists ten specific acts and omissions that form the basis of her complaints. Among these are her complaints about the structure of the Trust's involvement in the Bighorn transaction and Robert's lies and omissions about the details of the transaction. She argues that Robert has the burden to show that she had sufficient knowledge of these acts or omissions before July 2008, four years prior to the date she filed her counterclaim.<br />
On July 20, 2007, Robert sent an email to his mother and three sisters entitled "Investment Opportunity." He explained that he formed a real estate company with Dean Bailey and briefly described their plan to develop residential lots and sell them to builders, stating that they are currently working on two projects, Bighorn Venture III and Lucas Farms. He stated that he was considering placing the Trust into these deals and described a potential scenario for their participation. Saying they would use approximately $750,000 of the Trust's line of credit, he called it an equity investment with a preferred return of approximately 13.25%, that would receive 1.25% of the equity profits generated. He specifically asked if the email recipients wanted "to make an investment like in this venture." He asked for a yes or no answer and stated that if they did not want their Trust invested, he would honor their wishes.<br />
Robert's three sisters, including Deborah, and Ruth agreed to his proposal. Robert transferred Trust assets to Bighorn on August 30, 2007. He sent a Trust update email on October 3, 2007, stating that all four trusts are invested in Bighorn Venture III. He said the trusts are guaranteed a minimum of a 15% internal rate of return and can possibly go as high as a 20% rate of return. He stated that three trusts invested $600,000 each while one of the sisters' trust invested $323,600.<br />
In an April 27, 2008 email, Robert reiterated the Bighorn report that he sent in October. He also reported that one of the builders was interested in buying a larger percentage of the development. In a September 10, 2008 email, regarding Bighorn, Robert reported that they refinanced the debt on the Trust loans and were attempting to delay bringing new lots online in 2009. He noted that "softness is still prevalent in the DFW market" and that, due to the state of the housing recovery, 2010 is a better time to bring those lots online. He stated that one of the builders withdrew its commitment to the project.<br />
In her deposition testimony, Ruth explained that Deborah was angry at Robert in December 2008 because of the Bighorn project. She also stated that Deborah asked Robert to resign from her trust "way back."<br />
In a May 14, 2009 email, Robert reported that they delayed bringing new lots online since one builder declared bankruptcy and the other advised that they will not currently accept new lots. He said they were working with the bank to restructure the loan. He stated, "[t]here is much uncertainty about the viability of the housing market and so we are working with the bank and our other lenders to determine how to handle this project."<br />
His January 5, 2010 email was even more grim. He explained that in October 2008, they determined that they needed to delay the project and went to their bank and asked to renegotiate the terms. The bank stonewalled them and they ceased construction. Efforts to deal with the bank failed, the loan matured in August 2009, and in October they received a foreclosure notice. They placed Bighorn into Chapter 11 bankruptcy. He closed by saying, "[t]his is a very difficult situation but we have a possibility although slight to reorganize and return a part or all of the Trust Investment. It depends on how receptive the bankruptcy judge may be."<br />
In his March 28, 2011 email, Robert announced that the property involved in the Bighorn Venture was foreclosed by the bank on April 5, 2010. He also stated that the Trust lost all investments. He explained that the Trust has no further liability because the Trust loaned money to Bighorn for a preferred returns interest but did not guarantee any debt. He clarified that the Trust is no longer involved in Bighorn Venture III, there are no assets in Bighorn, only debt, and there is no possibility of recovery of the Trust's investment.<br />
In response to the March 28 email, Deborah asked, on March 30, who owns the property Bighorn purchased. Robert replied, explaining that the bank foreclosed on April 5, 2010, and Bighorn, which is defunct and owns no assets, owes the bank $5.1 million and filed for bankruptcy.<br />
The Bighorn transaction occurred on August 30, 2007. To be timely, Deborah's claims for breach of fiduciary duty and fraud, which are based on that transaction, should have been filed by August 30, 2011. <i>See</i> TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a). The evidence shows that, by August 30, 2011, Deborah knew that the structure of the transaction that occurred was not the one Robert described in July 2007; the housing market was struggling; one of the Bighorn builders withdrew from the project and the other stopped accepting new lots; by mid-August 2009 they ceased construction, the bank started foreclosure proceedings, and Bighorn filed for bankruptcy; and by March 2011, all of the Trust's investments were lost with no possibility of recovery of that money. In his March 28, 2011 email, Robert stated that the Trust loaned money to Bighorn for a preferred returns interest.<br />
The emails Robert sent contained sufficient facts giving rise to her causes of action. Additionally, by the end of 2008, Deborah was angry with Robert because of the Bighorn project, and she had already asked Robert to resign from her trust before that date. We disagree with Deborah's assertion that some of her allegations constitute breaches of fiduciary duty separate from the Bighorn transaction. Her allegations that Robert lied about the transaction, failed to provide pertinent information about the transaction, and structured the transaction differently than described in his initial email are all facets of the allegation that Robert breached his fiduciary duty by misusing Trust assets for the Bighorn project. Therefore, these allegations share the same accrual date, August 30, 2007. We conclude that the statute of limitations ran on Deborah's breach of fiduciary duty and fraud claims on August 30, 2011. The trial court did not err in granting Robert's motion for summary judgment on these claims.<br />
In her seventh counterclaim, Deborah asserted that Robert breached the statutory prudent investor standard by failing to invest and manage the Trust's assets as a prudent investor would. <i>See</i> TEX. PROP. CODE ANN. §§ 117.003-.004 (West 2014). A claim that the Trustee violated the statutory standard of care equates to a claim for breach of fiduciary duty. Thus, the four year limitations period applies to this claim. <i>See</i> TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a). Summary judgment on this claim was proper.<br />
In her tenth counterclaim, Deborah asserted that Robert's misuse of Trust assets constituted defalcation. Defalcation is defined as the fraudulent misappropriation of money held in trust; financial wrongdoing involving a breach of trust; or the failure to meet an obligation; a nonfraudulent default. <i>Defalcation,</i> BLACK'S LAW DICTIONARY (10th ed. 2014). This claim is merely a restatement of her breach of fiduciary duty and fraud claims. Thus, the four year statute of limitations applies to this claim. <i>See</i> TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a). Summary judgment on this claim was also proper.<br />
<br />
<h2>
<i>Quasi-Estoppel</i></h2>
<br />
The affirmative defense of quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position she has previously taken. <a href="https://scholar.google.com/scholar_case?case=6016423641513540463&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Lopez v. Munoz, Hockema & Reed, L.L.P.,</i> 22 S.W.3d 857, 864 (Tex. 2000)</a>. The doctrine applies when it would be unconscionable to allow a party to maintain a position inconsistent with one in which she acquired or by which that party accepted a benefit. <a href="https://scholar.google.com/scholar_case?case=12997909169242229063&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Nash v. Beckett,</i> 365 S.W.3d 131, 144 (Tex. App.-Texarkana 2012, pet. denied)</a>.<br />
The record shows that Robert initiated approximately fifty real estate transactions in which he invested Trust assets. Deborah agreed to all of these transactions. All transactions except Bighorn were successful and the Trust benefitted from those prior investments. Therefore, Deborah's claims for breach of fiduciary duty are barred by the affirmative defense of quasi-estoppel. <i>See</i> <i>id.</i><br />
<br />
<h2>
<i>Terms of Trust Instrument</i></h2>
<br />
Generally, subject to the Trustee's duty to act in good faith and in accordance with the purposes of the Trust, the terms of the Trust prevail over provisions of the Texas Trust Code. TEX. PROP. CODE ANN. § 111.0035(b)(4)(B) (West Supp. 2018). A term of a Trust exculpates a Trustee from liability if the Trustee's breach of trust is not committed in bad faith, intentionally, or with reckless indifference to the interest of a beneficiary. TEX. PROP. CODE ANN. § 114.007(a) (West 2014).<br />
Paragraph C(5) of the Trust provided that the Trustee shall not "at any time be held liable for any action or default of himself or his agent or of any other person in connection with the administration of the trust estate, unless caused by his own gross negligence or by a willful commission by him of an act in breach of trust." Such an exculpatory clause has been held effective in exonerating a trustee from liability for losses when no evidence of gross negligence was shown. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=3511878559721330195&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Tex. Commerce Bank, N.A. v. Grizzle,</i> 96 S.W.3d 240, 251 (Tex. 2002)</a>.<br />
To prove gross negligence, a plaintiff must show (1) an act or omission that, when viewed objectively from the defendant's standpoint at the time it occurred, involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others and (2) that the defendant had an actual, subjective awareness of the risk but proceeded with conscious indifference to the rights, safety, and welfare of others. TEX. CIV. PRAC. & REM. CODE ANN. § 41.001(11) (West Supp. 2018). Under the first element, an "extreme risk is not a remote possibility of injury or even a high probability of minor harm, but rather the likelihood of serious injury to the plaintiff." <a href="https://scholar.google.com/scholar_case?case=9011485443275750789&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Columbia Med. Ctr. of Las Colinas, Inc. v. Hogue,</i> 271 S.W.3d 238, 248 (Tex. 2008)</a>. To determine if acts or omissions involve extreme risk, we analyze the events and circumstances from the defendant's perspective at the time the harm occurred, without resorting to hindsight. <i>Id.</i> Under the second element, "actual, subjective awareness" means that "the defendant knew about the peril, but its acts or omissions demonstrated that it did not care." <a href="https://scholar.google.com/scholar_case?case=34529581554409460&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Mobil Oil Corp. v. Ellender,</i> 968 S.W.2d 917, 921 (Tex. 1998)</a>. Circumstantial evidence is sufficient to prove either element. <i>Id.</i><br />
Robert testified that he thought he should make the Trust available to have investments. He invested Trust funds for many years, making as many as fifty deals. All those investments were successful except Bighorn. He gave his mother and siblings the option to participate. When structuring the Bighorn deal, he tried to get the Trust the best rate of return. He did not want the Trusts to be guarantors of debt. Robert personally guaranteed the bank debt and the debt to the previous owner of the land. At the time, he was very comfortable with the investment and would not have "done the deal" if he thought it would result in a large judgment against him. He opined that, in 2007, no one could predict the 2008 financial crisis.<br />
Robert explained his due diligence in connection with the Bighorn transaction. He and his partner, Bailey, did two other similar transactions and it appeared this was a good business to be in. They hired a consulting firm to do a market analysis and feasibility study, including a determination of the time frame for selling off all the lots. They talked to multiple home builders, "getting their input on what they thought the market was going to be, what their demands were." They talked to banks about borrowing ten to twelve million dollars. A bank ordered an appraisal of the land they wanted to purchase. The bank agreed to loan the money and Robert and Bailey contracted with two reputable builders who took all of the lots over a sixty month basis. They looked at "mezzanine financing to put the extra layer of equity. . . ." Robert decided the Trust should be involved in the mezzanine financing. Based on their research, Robert and Bailey felt it was a good investment and their partnership expected a three million dollar profit. Robert testified that they knew what the equity would be, and the risk of profit was on them as the developer. According to Robert's projections, in a three year period, the Trust would have received about $3.5 million, including the return of the principal. Deborah's trust would have received close to one million dollars of that amount.<br />
The evidence shows that Robert had experience in real estate transactions, hired professional consultants, and researched home builders and financing options. Robert obtained the commitment of experienced home builders and bankers. He structured the Trust's role in a manner that did not require it to guarantee any debt to a bank and, if the transaction had been successful, would have resulted in a high profit for the Trust. When viewed objectively from his standpoint, at the time they occurred, his acts did not involve an extreme degree of risk, considering the probability and magnitude of the potential harm to the Trust. Thus, the evidence does not support the objective component of the gross negligence analysis. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=9011485443275750789&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hogue,</i> 271 S.W.3d at 248</a>.<br />
Robert is also a beneficiary of the Trust and his Trust also contributed $600,000 to Bighorn funding, which he lost. Additionally, his company, Bighorn Ventures, invested in the project and did not survive, and Robert made personal guaranties to creditors to consummate the deal. There is no evidence that Robert had an actual, subjective awareness of the risk of a coming financial crisis but nevertheless proceeded with conscious indifference to the rights, safety, and welfare of the Trust, his mother, or his sisters. <i>See</i> TEX. CIV. PRAC. & REM. CODE ANN. § 41.001(11)(B). Thus, there is no evidence of gross negligence. We conclude that Robert showed as a matter of law that Deborah's claims were barred by the Trust instrument's exculpatory clause. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=3511878559721330195&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Grizzle,</i> 96 S.W.3d at 251</a>.<br />
Because Robert asserted valid affirmative defenses to Deborah's breach of fiduciary duty and fraud claims, the trial court did not err in granting Robert's partial motion for summary judgment on those claims. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=15620743557171271991&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Fernandez,</i> 315 S.W.3d at 508</a>. We overrule Deborah's thirteenth issue.<br />
<br />
<h2>
<i>Deborah's Second Motion for Partial Summary Judgment</i></h2>
<br />
Deborah's second motion for partial summary judgment, which addressed her claims for breach of fiduciary duty, did not seek judgment on all claims before the trial court, therefore its denial is not reviewable. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=8263472989059452793&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re D.W.G.,</i> 391 S.W.3d at 164</a>. We do not reach Deborah's eighth, ninth, and tenth issues in which she complains of the trial court's denial of her second motion for partial summary judgment.<br />
<br />
<h2>
Guaranty</h2>
<br />
In her eleventh and twelfth issues, Deborah asserts that the trial court erred in granting Robert's no evidence and traditional motions for partial summary judgment on her guaranty claim. In his no evidence motion for summary judgment, Robert argued that "Deborah can present no evidence sufficient to raise a genuine issue of material fact as to any element of her claim that a guaranty exists pursuant to which Robert has guaranteed payment of a debt to the Trust."<br />
"Guaranty" means an agreement under which a person assumes, guarantees, or otherwise becomes primarily or contingently liable for the payment or performance of an obligation of another person. TEX. FIN. CODE ANN. § 306.001(6)(A) (West 2016). The agreement must be in writing, signed by the person to be charged with the promise or by someone authorized to sign for him, be complete in every material detail, and contain all essential elements of the agreement. TEX. BUS. & COM. CODE ANN. § 26.01(a), (b)(2) (West 2009); <a href="https://scholar.google.com/scholar_case?case=7105474637542644578&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Cohen v. McCutchin,</i> 565 S.W.2d 230, 232 (Tex. 1978)</a>. The essential terms of a guaranty agreement are (1) the parties involved, (2) a manifestation of intent to guaranty the obligation, and (3) a description of the obligation being guaranteed. <a href="https://scholar.google.com/scholar_case?case=8006059806581861137&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Material P'ships, Inc. v. Ventura,</i> 102 S.W.3d 252, 261 (Tex. App.-Houston [14th Dist.] 2003, pet. denied)</a>.<br />
In his July 20, 2007 email explaining the proposed Bighorn arrangement, Robert included the statement: "Also Robert Patterson and Dean Bailey would guarantee the $750,000 personally secured by their interest in BHV III." On August 31, 2007, Bailey, on behalf of Bighorn, and Robert, as guarantor, signed a document entitled "Memorandum of Agreement, Bighorn Ventures III, Ltd. and Regina Patterson Edwards Trust, Robert H. Patterson, Jr. Trust, Deborah Patterson Howard Trust, and Deanne Patterson Brown Trust." It specified the business terms of the agreement between Bighorn and the four trusts. Pertinent to this discussion, it provided as follows:<br />
<blockquote>
2) The Trusts investments of $2,123,600 will be guaranteed by Robert H. Patterson, Jr.</blockquote>
<blockquote>
3) The proposed yield to the Trust is 15.0% preferred return over the life of the investment. This yield shall accrue and shall be payable only when there are net proceeds available to be distributed to the sponsors. Distributions to the Trusts will go first to pay any accrued but unpaid interest on the unpaid investment amount and second to repay the investment amount.</blockquote>
The July 2007 email is insufficient to meet the definition of guaranty. It speaks in terms of a future offer and did not fully describe the obligation being guaranteed. However, the August 2007 memorandum identifies the parties, the obligation of the four trusts to invest $2,123,600, and Robert's intent to guaranty that obligation. Reviewing the evidence in the light most favorable to Deborah, we conclude that the evidence is sufficient to show that "a guaranty exists pursuant to which Robert has guaranteed payment of a debt to the Trust." <i>See</i> <i>id.</i> Accordingly, the trial court erred in granting Robert's no evidence motion for partial summary judgment on Deborah's guaranty claim. <i>See</i> TEX. R. CIV. P. 166a(i). But as we explain next, this error was rendered harmless by the trial court's ruling on Robert's traditional motion for partial summary judgment on Deborah's guaranty claim.<br />
In his traditional motion for partial summary judgment on Deborah's guaranty claim, Robert argues that Deborah cannot recover on the guaranty because there is no principal obligation to which a guaranty may attach, the Trust cannot show ownership of the guaranty, and, if the agreement creates an obligation for Robert to repay the Trust's investment, it fails for lack of consideration.<br />
To recover under a guaranty agreement, a party must show proof of (1) the existence and ownership of the guaranty contract, (2) the performance of the terms of the underlying contract by the holder, (3) the occurrence of the conditions upon which liability is based, and (4) the failure or refusal to perform the promise by the guarantor. <a href="https://scholar.google.com/scholar_case?case=7423162645275632497&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Rainier Income Fund I, Ltd. v. Gans,</i> 501 S.W.3d 617, 622 (Tex. App.-Dallas 2016, pet. denied)</a>. The Memorandum of Agreement provided that the proposed yield to the Trust "shall accrue and shall be payable only when there are net proceeds available to be distributed to the sponsors." The evidence is undisputed that the Bighorn development ended with the property being foreclosed on and Bighorn filing for bankruptcy. There were never any net proceeds available to be distributed. Therefore, the evidence proves as a matter of law that the condition upon which liability is based never occurred, and there is no obligation to which a guaranty can attach. <i>See</i> <i>id</i><br />
Furthermore, like any contract, a guaranty agreement must be supported by consideration. <a href="https://scholar.google.com/scholar_case?case=8006059806581861137&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Material P'ships, Inc.,</i> 102 S.W.3d at 262</a>. Consideration consists of either a benefit to the promisor or a detriment to the promisee. <i>Id.</i> The detriment must induce the making of the promise, and the promise must induce the incurring of the detriment. <i>Id.</i> "If the promise of the guarantor is made contemporary to the promise of the primary debtor, the consideration which supports the primary debtor's promise also supports that of the guarantor." <a href="https://scholar.google.com/scholar_case?case=1968685377816514352&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Schulz v. Jackson Petroleum Prods., Inc.,</i> 791 S.W.2d 656, 658 (Tex. App.-Beaumont 1990, no writ)</a>. "In the case of a pre-existing debt, there must be a new and independent undertaking and a new consideration." <i>Id.</i> The record shows that the Trust's investment was made on August 30, 2007. The guaranty was executed on August 31, 2007. There is no evidence of a new benefit to Robert or additional detriment to the Trust. Because the guaranty was made independently of the transaction that initially caused an obligation, and no additional consideration was provided at the time the guaranty was executed, the guaranty fails for lack of consideration. <i>See</i> <i>id.</i> Thus, Robert proved entitlement to judgment as a matter of law on Deborah's guaranty claim. The trial court did not err in granting Robert's traditional motion for partial summary judgment on that claim. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=15620743557171271991&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Fernandez,</i> 315 S.W.3d at 508</a>.<br />
Which brings us back to the court's ruling on Robert's no evidence motion for partial summary judgment on the guaranty claim. The harmless error rule states that before reversing a judgment because of an error of law, the reviewing court must find that the error amounted to such a denial of the appellant's rights as was reasonably calculated to cause and probably did cause the rendition of an improper judgment, or that the error probably prevented the appellant from properly presenting the case on appeal. TEX. R. APP. P. 44.1; <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>G & H Towing Co. v. Magee,</i> 347 S.W.3d 293, 297 (Tex. 2011)</a>. The rule applies to all errors. <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>G & H Towing Co.,</i> 347 S.W.3d at 297</a>.<br />
The trial court's erroneous determination that no guaranty existed is rendered harmless by the trial court's determination that Deborah cannot recover under that guaranty. <i>See</i> TEX. R. APP. P. 44.1(a). We overrule Deborah's eleventh and twelfth issues.<br />
<br />
<h2>
Statutory Fraud and Exposure to Tax Liability</h2>
<br />
By her fourteenth, fifteenth, and sixteenth issues, Deborah asserts that the trial court erred when granting Robert's no evidence motion for partial summary judgment and both of his traditional motions for partial summary judgment by ruling that she take nothing on all of her claims. She argues that his motions did not address her claims for exposure to tax liability and violation of statutory securities regulations.<br />
Robert filed his three motions on September 29, 2015. Deborah added her claims for violation of statutory securities regulation and breach of fiduciary duty based on exposure to potential tax liability in her Fourth Amended Petition which she filed on November 12, 2015. She correctly asserts that Robert did not address these claims in his motions for partial summary judgment.<br />
A summary judgment cannot be granted on the entirety of an opponent's case unless the motion addresses each of the nonmovant's causes of action. <a href="https://scholar.google.com/scholar_case?case=480009543832153063&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Chessher v. Sw. Bell Tel. Co.,</i> 658 S.W.2d 563, 564 (Tex. 1983) (per curiam)</a>. If, after a motion for summary judgment is filed, the nonmovant amends her petition to allege new causes of action, the movant must ordinarily amend his motion to address the new causes of action. <a href="https://scholar.google.com/scholar_case?case=5731302787569968065&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Avary v. Bank of Am., N.A.,</i> 72 S.W.3d 779, 791 (Tex. App.-Dallas 2002, pet. denied)</a>. It is generally reversible error for a trial court to render summary judgment on a claim not addressed in the summary judgment motion. <a href="https://scholar.google.com/scholar_case?case=100726138524360578&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wilson v. Davis,</i> 305 S.W.3d 57, 73 (Tex. App.-Houston [1st Dist.] 2009, no pet.)</a>. There is, however, a limited exception to the general rule. <i>Id.</i> The exception applies when (1) the movant conclusively proved or disproved a matter, usually corresponding to a claim's element or to an affirmative defense, that would also preclude the unaddressed claim as a matter of law or (2) the unaddressed claim is derivative of the addressed claim, and the movant proved its entitlement to summary judgment on that addressed claim. <i>Id.</i><br />
In her eighth counterclaim, which Deborah entitled "Breach of Fiduciary Duty, Exposure to Extreme Tax Liability," she incorporated by reference the factual allegations contained in the preceding paragraph and pleaded this claim in the alternative. She asserted that Robert claimed a $600,000 short term capital loss for a bad business debt on the Trust's 2010 federal income tax return and that he testified that this reflected a write off of the loan from the Trust to Bighorn. Arguing that Robert's current claim that the transfer was a purchase transaction involving the sale of an equity interest is at odds with the tax return, she asserted that Robert has exposed the Trust to potential damage.<br />
As explained above, the Trust instrument contains an exculpatory clause which exonerates Robert from liability when there is no evidence of gross negligence. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=3511878559721330195&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Grizzle,</i> 96 S.W.3d at 251</a>. Because the Trust's participation in the Bighorn transaction resulted in a loss to the Trust, Robert reported that loss on the Trust's 2010 income tax return and claimed a deduction. As shown above, there is no evidence that Robert's use of the Trust's funds in furtherance of that transaction constituted gross negligence. Likewise, his characterization of the loss on the 2010 tax return does not constitute gross negligence. Accordingly, the exoneration clause of the Trust instrument exonerates Robert from liability for breach of fiduciary duty, if any, in exposing the Trust to potential tax liability. Because the affirmative defense asserted in Robert's motion for partial summary judgment also encompasses this claim for breach of fiduciary duty, any error in granting the motion on this claim is harmless. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>G & H Towing Co.,</i> 347 S.W.3d at 297-98</a>; <a href="https://scholar.google.com/scholar_case?case=100726138524360578&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wilson,</i> 305 S.W.3d at 73</a>.<br />
In her ninth counterclaim, Deborah asserted that Robert initially represented that he would sell the Trust an equity interest in Bighorn, the Trust did not receive an equity interest, and Robert later characterized the use of the Trust's money as a loan. She argued that this constitutes a violation of the Texas Securities Act, citing Article 581-33A(2). <i>See</i> TEX. REV. CIV. STAT. ANN. art. 581-33 (West 2010).<br />
In her Fourth Amended Counterclaim, Deborah stated that, in March 2011, Robert disclosed that the Trust received no ownership interest in Bighorn or the real property it purchased. Her securities act claim was first asserted in her Fourth Amended Counterclaim, which was filed on November 12, 2015. The statute provides that no person may sue under Section 33A(2) more than three years after discovery of the untruth or omission, or after discovery should have been made by the exercise of reasonable diligence, or more than five years after the sale. <i>Id.</i> art. 581-33H(2)(a)-(b). Deborah asserted her claim more than four years after she discovered the facts on which her claim is based and more than eight years after the transaction that is the basis of her claim.<br />
As explained above, Robert asserted limitations as an affirmative defense against Deborah's claims. Because a ground asserted in his motion for partial summary judgment encompasses Deborah's claim for violation of the Texas Securities Act, this claim is precluded as a matter of law. <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>G & H Towing, Co.,</i> 347 S.W.3d at 297-98</a>. Therefore, the trial court's granting of Robert's motions on all of Deborah's claims, including the unaddressed claim for violation of the securities act, is harmless. <i>Id.</i> We overrule Deborah's issues fourteen, fifteen, and sixteen.<br />
<br />
<h2>
REQUEST FOR REMOVAL OF TRUSTEE</h2>
<br />
In issues one through four, Deborah contends the trial court abused its discretion by refusing to remove Robert as Trustee and appointing a Successor Trustee in February 2013. She argues that Robert should be removed because he breached the Trust agreement, the property code, and his fiduciary duty.<br />
The property code authorizes removal of a trustee, after a hearing, for certain numerated reasons. <i>See</i> TEX. PROP. CODE ANN. § 113.082 (West 2014). Deborah presented her removal request to the trial court, the court held an evidentiary hearing, and it denied her request. However, in the final judgment, the court ordered that Robert "is fully and completely discharged and relieved of all duties, responsibilities and further obligations with respect to the administration of the DPH Trust. . . ." The court further ordered that Texas Private Trust will be appointed as Successor Trustee.<br />
Appellate courts are prohibited from deciding moot controversies. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=11211581266712477394&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Camarena v. Tex. Emp't Comm'n,</i> 754 S.W.2d 149, 151 (Tex. 1988)</a>. An issue becomes moot if there ceases to be an actual controversy between the parties. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=16531780394727949140&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Strange v. HRsmart, Inc.,</i> 400 S.W.3d 125, 132 (Tex. App.-Dallas 2013, no pet.)</a>. Denial of Deborah's interim request to remove Robert as Trustee became moot when the trial court ordered his removal in the final judgment. We do not reach Deborah's first, second, third, or fourth issues.<br />
<br />
<h2>
REQUEST FOR ADMISSIONS</h2>
<br />
In her fifth and sixth issues, Deborah contends the trial court abused its discretion by failing to overrule Robert's objections to her requests for admissions and by refusing to declare that Robert admitted each of Deborah's requests for admissions. She argues that Robert's objections were prohibited "prophylactic" objections which the trial court was obligated to overrule.<br />
Deborah submitted requests for admissions to Robert, asking him to admit or deny 257 statements. Robert objected to each statement. Deborah moved to strike Robert's objections and compel responses to her requests. A hearing was held on Robert's motions for partial summary judgment at which Deborah's request to present her motion to strike was denied. Robert's motions for partial summary judgment were granted and, thereafter, the court determined that Deborah's motion to strike objections and compel responses became moot when Robert's motions were granted.<br />
The primary purpose of requests for admission is to simplify trials by eliminating matters about which there is no real controversy. <a href="https://scholar.google.com/scholar_case?case=8455783837425757229&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Boulet v. State,</i> 189 S.W.3d 833, 838 (Tex. App.-Houston [1st Dist.] 2006, no pet.)</a>. When the trial court granted Robert's motions for partial summary judgment on all of Deborah's claims against him, there was no need for admissions to simplify the case. As we explained, the trial court correctly found in favor of Robert on Deborah's counterclaims. Deborah makes no attempt to explain how the trial court's determination that her motion to strike was moot probably caused the rendition of an improper judgment or probably prevented her from properly presenting her case in this court. <i>See</i> TEX. R. APP. P. 44.1(a). We overrule Deborah's fifth and sixth issues.<br />
<br />
<h2>
TRUSTEE'S PERFORMANCE AND LIABILITY</h2>
<br />
In her issues seventeen and twenty through twenty-two, Deborah asserts that there is insufficient evidence to support the trial court's determination that Robert properly administered and managed the DPH Trust, properly performed his duties and responsibilities as Trustee, furnished the beneficiaries with full and complete accountings, or that Robert's administration should be approved.<br />
In Deborah's eighteenth, nineteenth, and twenty-third issues, she contends the trial court abused its discretion by discharging Robert from liability involving any and all actions or omissions relating to his administration of the DPH Trust. She argues that neither approval of a final accounting nor declaratory judgment actions adjudicate potential tort liability.<br />
Whether a Trustee's resignation should be accepted is within the discretion of the trial court. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=10572765845324610275&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>McCormick v. Hines,</i> 498 S.W.2d 58, 63 (Tex. Civ. App.-Amarillo 1973, writ dism'd)</a>.<br />
The trust code and the language of the trust instrument determine the Trustee's powers and duties. <i>See</i> TEX. PROP. CODE ANN. §§ 113.002, 113.051 (West 2014); <a href="https://scholar.google.com/scholar_case?case=5605841360555363382&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Corpus Christi Bank & Trust v. Roberts,</i> 597 S.W.2d 752, 753 (Tex. 1980)</a>. The trust code requires that a written statement of accounts shall show (1) all trust property that has come to the trustee's knowledge or into the trustee's possession, (2) a complete account of receipts, disbursements, and other transactions regarding the trust property, (3) a listing of all property being administered, with a description of each asset, (4) the cash balance on hand with the name and location of the depository where the balance is kept, and (5) all known liabilities owed by the trust. TEX. PROP. CODE ANN. § 113.152 (West 2014).<br />
The Trust instrument was designed to provide for Ruth's support, and Robert was required to make distributions to her during her lifetime. To that end, Robert was authorized to hold assets, make investments, manage securities, operate, sell, or liquidate the Trust's business interests, sell, lease, or develop Trust property, manage, control, improve, and repair Trust property, borrow money for any Trust purpose, commence or defend litigation affecting the Trust or its property, and pay taxes and expenses of the Trust.<br />
A trial before the court was held on May 30, 2017. The Trust's accountant testified that the accounting reflects the receipts, disbursements, payment of expenses, distributions, transfers, land sales, and all financial transactions that occurred in the DPH Trust. He stated that the accounting fully and fairly discloses all financial matters relating to the administration of the Trust from 2002 through 2016.<br />
Robert testified regarding the documents that he provided to Deborah showing all financial transactions involved in the administration of the Trust. He presented monthly statements itemizing investment accounts, including their gains, losses, and values, as reported by UBS Financial Services, Inc., for 2002 through 2016 and showing the cash balance on hand. He also presented spreadsheets showing receipts and disbursements from the DPH Trust from 2002 through 2016, documents showing cash available to the DPH Trust, as well as income tax returns for the DPH Trust for 2002 through 2015. The record also contains closing statements relating to the sale of real estate.<br />
Robert testified that each of the four trusts started with $115,000 in 1989. Since 2002, when he became Trustee, till the time of trial, he paid Ruth close to a million dollars. He estimated that the value of the DPH Trust at the time of trial was $1.2 or $1.3 million. The record shows that all investments Robert made on behalf of the Trust, with the exception of the Bighorn investment, were profitable. Additionally, Robert sent emails to Ruth and his siblings describing the current financial picture of the Trust and updating them on Trust activities. Based on the evidence presented at the hearing on Robert's petition for resignation, we conclude the trial court did not abuse its discretion by determining that Robert properly administered the Trust and properly performed his duties, including providing the beneficiaries with a complete accounting, and the court properly approved Robert's administration. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=5605841360555363382&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Roberts,</i> 597 S.W.2d at 753</a>. We overrule Deborah's issues seventeen and twenty through twenty-two.<br />
In the final judgment, the court ordered that Robert is fully and completely released and discharged from any and all claims, duties, causes of action or liabilities relating to any and all actions or omissions in connection with his administration of the DPH Trust. Deborah complains that this order constitutes an abuse of discretion. She states that approving a final accounting does not adjudicate a trustee's "potential tort liability" and that a trustee cannot use a declaratory judgment action to determine "potential tort liability." The court's order does not include this phrase, and she does not explain how the order addresses "potential tort liability." We conclude that it does not.<br />
A judgment is construed in the same manner as other written instruments, and it is construed as written. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=17996716435025009301&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Ellis v. Mortgage and Trust, Inc.,</i> 751 S.W.2d 721, 723 (Tex. App.-Fort Worth 1988, no pet.)</a>. If the decree taken as a whole is unambiguous, the court is required to declare the effect of the decree in light of the literal meaning of the language used. <a href="https://scholar.google.com/scholar_case?case=17989201266347609068&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wilde v. Murchie,</i> 949 S.W.2d 331, 332-33 (Tex. 1997) (per curiam)</a>.<br />
In response to Robert's petition for resignation as Trustee, Deborah filed counterclaims alleging various theories of liability. Those counterclaims were disposed of by partial summary judgments prior to the trial before the court at which the issues of the accounting and Robert's discharge were heard. The final judgment incorporated the prior summary judgments, specifically ordering that Deborah take nothing on all her claims against Robert. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=2071682292604490029&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>City of Beaumont v. Guillory,</i> 751 S.W.2d 491, 492 (Tex. 1988) (per curiam)</a> (holding that partial summary judgments merge in final judgment disposing of all parties and issues). Considering the literal meaning of the language used, we conclude that the final judgment's reference to a release of liability contemplates the previously determined counterclaims, not "potential tort liability." <i>See</i> <i>id.</i> As previously explained, the trial court's rulings on Deborah's counterclaims were proper. Therefore, the trial court did not abuse its discretion by releasing Robert from liability for his actions or omissions in connection with his administration of the Trust. We overrule Deborah's issues eighteen, nineteen, and twenty-three.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[4]" name="r[4]">[4]</a></sup><br />
<br />
<h2>
CONDITIONAL PROVISIONS IN JUDGMENT</h2>
<br />
In her twenty-fourth and twenty-fifth issues, Deborah asserts the trial court erred in finding that Robert tendered his resignation as Trustee contingent upon a non-appealable judgment and by ordering that the appointment of the Successor Trustee would be effective on the date the final judgment becomes unappealable. She argues that Robert did not plead that his resignation should be subject to a non-appealable judgment. She further argues that there is no evidence that conditioning his resignation on an unappealable judgment is necessary to protect the rights of other interested persons.<br />
In her twenty-sixth issue, Deborah complains of the provision of the judgment relieving the Successor Trustee of any and all duty, responsibility, or authority to investigate the actions or inactions of Robert as Trustee. She argues that Robert made no such request in his pleadings, there was no evidence, or insufficient evidence, or law, to support an implied finding that the ruling would ensure the safety of the trust fund, and the ruling was an abuse of discretion.<br />
The trial court may accept a Trustee's resignation and discharge the Trustee from the Trust on the terms and conditions necessary to protect the rights of other interested parties. TEX. PROP. CODE ANN. § 113.081 (West 2014). Acceptance of the Trustee's resignation is within the trial court's discretion. <a href="https://scholar.google.com/scholar_case?case=10572765845324610275&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>McCormick v. Hines,</i> 498 S.W.2d 58, 63 (Tex. Civ. App.-Amarillo 1973, writ dism'd)</a>. Consideration must be given to the interests of parties to be affected. <i>Id.</i> The trial court has the discretion to alter the rights, powers, and authority of the successor trustee. TEX. PROP. CODE ANN. § 113.084 (West 2014).<br />
Deborah's complaints arise from the following portion of the judgment:<br />
<blockquote>
IT IS FURTHER ORDERED that, effective as of the date that this Final Judgment becomes final and appealable, Texas Private Trust is appointed as the sole Successor Trustee of the DPH Trust, and that Texas Private Trust or any other Successor Trustee is relieved of any and all duty, responsibility or authority to investigate the actions or inactions of Robert H. Patterson, Jr. as the prior Trustee of the DPH Trust.</blockquote>
Deborah asserts that conditioning appointment of the Successor Trustee on an unappealable judgment is error because Robert failed to include that request in his pleadings. We acknowledge that a judgment must conform to the pleadings. <i>See</i> TEX. R. CIV. P. 301. Robert requested the court allow him to resign as Trustee and appoint a successor. That is what this judgment does. Deborah complains of the timing of the requested relief. Timing is not a separate cause of action or issue. It is a factor within the discretion of the trial court.<br />
Apparently, Deborah prefers the court appoint the Successor Trustee upon approval of the accounting, that is, immediately, and not at some point in the future. Even assuming there is nothing in the record on which the trial court could base a determination that delaying appointment of the Successor Trustee is necessary to protect the rights of some interested person, Deborah must identify the harm done by postponing the appointment. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>G & H Towing Co.,</i> 347 S.W.3d at 297</a>. She did not articulate any argument explaining how she was harmed. From her stance in the trial court, we know that she believes Robert will continue to pay his legal fees out of the Trust as long as he is Trustee. As we explain below, we conclude that Robert cannot look to Deborah for payment of his attorney's fees. Deborah has not shown any harm, or reversible error, caused by the trial court's order to appoint the Successor Trustee after the judgment becomes final and appealable. <i>See</i> <i>id.</i><br />
In three sentences, with no citation to authority, Deborah complains that the judgment improperly shields Robert from investigation by the Successor Trustee. Again, she complains that Robert did not include this request for relief in his petition. Assuming he was required to, and assuming the record supports the trial court's determination that it is appropriate to include this limitation on the Successor Trustee, Deborah has not shown how this provision harms her. She brought numerous claims against Robert, without success. Subject to the potential application of the doctrine of res judicata, this judgment does not restrict her, or anyone other than the Successor Trustee, from investigating Robert's actions further and pursuing litigation if warranted. Because Deborah has shown no harm caused by the provision in the judgment insuring that Robert will not be investigated by the Successor Trustee, she has not shown reversible error. <i>See</i> <i>id.</i> We overrule Deborah's issues twenty-four, twenty-five, and twenty-six.<br />
<br />
<h2>
ATTORNEY'S FEES-JUST AND EQUITABLE</h2>
<br />
In her twenty-seventh issue, Deborah asserts the trial court abused its discretion in ordering her to reimburse the Trust in the amount of $587,585 for Robert's attorney's fees. She argues that the evidence is legally and factually insufficient to support a finding that it is just and equitable for her to reimburse the Trust for fees Robert incurred defending himself against her counterclaims. She also asserts that it is just and equitable that Robert reimburse the Trust for the Trust funds Robert used to pay his attorney's fees. In her thirtieth issue, Deborah asserts it is not just and equitable for her to reimburse Ruth for attorney's fees Ruth incurred in connection with Deborah's counterclaims against Robert. She further argues the trial court abused its discretion by ordering Deborah to reimburse the Trust $53,791 for Ruth's attorney's fees.<br />
In her twenty-eighth and twenty-ninth issues, Deborah contends that it is not just and equitable for her to reimburse Robert for attorney's fees he might incur in connection with an appeal to the court of appeals or the Texas Supreme Court, and the trial court abused its discretion in ordering her to do so. In her thirty-first and thirty-second issues, Deborah asserts the evidence is insufficient to support a finding that it is just and equitable for her to reimburse Ruth's attorney's fees on appeal to the court of appeals and the Texas Supreme Court, and the trial court abused its discretion in ordering her to do so.<br />
<br />
<h2>
Applicable Law</h2>
<br />
An award of reasonable and necessary attorney's fees that are "equitable and just" is allowed under the Uniform Declaratory Judgments Act and the Texas Trust Code. TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2015); TEX. PROP. CODE ANN. § 114.064 (West 2014). Whether an award of attorney's fees is equitable and just are matters of law addressed to the trial court's discretion. <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet v. Herring,</i> 972 S.W.2d 19, 21 (Tex. 1998)</a>. That determination depends on the concept of fairness in light of all the surrounding circumstances. <a href="https://scholar.google.com/scholar_case?case=6131577391635120575&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Ridge Oil Co. v. Guinn Invs., Inc.,</i> 148 S.W.3d 143, 162 (Tex. 2004)</a>. The party asserting the inequity of an attorney's fee award is not required to present distinct evidence on that question of law. <a href="https://scholar.google.com/scholar_case?case=16000780883680874488&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re Estate of Kuykendall,</i> 206 S.W.3d 766, 772 (Tex. App.-Texarkana 2006, no pet.)</a>. The court may conclude that it is not equitable or just to award even reasonable and necessary fees. <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet,</i> 972 S.W.2d at 21</a>. In applying the Declaratory Judgments Act or trust code Section 114.064, the conclusion that an award of fees is equitable and just is not dependent on a finding that a party "substantially prevailed." <a href="https://scholar.google.com/scholar_case?case=5566571311140648897&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Barshop v. Medina Cty. Underground Water Conservation Dist.,</i> 925 S.W.2d 618, 637 (Tex. 1996)</a>; <a href="https://scholar.google.com/scholar_case?case=687448325621487000&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hachar v. Hachar,</i> 153 S.W.3d 138, 142 (Tex. App.-San Antonio 2004, no pet.)</a>.<br />
The trial court's determination to award attorney's fees is reviewed for an abuse of discretion. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet,</i> 972 S.W.2d at 22</a>; <a href="https://scholar.google.com/scholar_case?case=687448325621487000&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hachar,</i> 153 S.W.3d at 142</a>; <i>see also</i> <a href="https://scholar.google.com/scholar_case?case=15270709449738283316&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re Ford Motor Co.,</i> 988 S.W.2d 714, 721 (Tex. 1998)</a> (orig. proceeding) (held that trial court's award of appellate attorney's fees is reviewed for abuse of discretion). Under an abuse of discretion standard of review, we review the entire record. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=1365671451973670816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Kirkland v. Schaff,</i> 391 S.W.3d 649, 655 (Tex. App.-Dallas 2013, no pet.)</a>. If there is some evidence in the record that shows the trial court followed guiding rules and principles, then the reviewing court may not find an abuse of discretion. <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet,</i> 972 S.W.2d at 22-23 (Baker, J., dissenting)</a>. Trial judges, as well as appellate judges, can draw on their common knowledge and experience as lawyers and judges in considering the testimony, the record, and the amount in controversy in determining attorney's fees. <i>See</i> <i>id.</i> at 22 (Baker, J., dissenting).<br />
<br />
<h2>
Analysis</h2>
<br />
Initially, we address Deborah's argument that it would be just and equitable for Robert to reimburse the DPH Trust for funds he previously took for payment of his attorney's fees. As a prerequisite to presenting a complaint for appellate review, the record must show that the complaint was made to the trial court and the trial court ruled on the request. TEX. R. APP. P. 33.1(a). Deborah provides no record cite showing where this request was presented to the trial court or denied by the trial court. We found no reference to this remedy in our review of the record. This argument is waived. <i>Id.</i><br />
In considering the question of whether Deborah should reimburse the Trust, we consider provisions of the Trust instrument and circumstances surrounding the fee requests when made. The Trust instrument authorized payment of litigation expenses out of Trust funds for any litigation that affected the Trust. However, the Trust instrument did not speak to the question of what is or is not equitable.<br />
The record shows that there was discord between Robert and Deborah since at least 2007. Deborah asked Robert to resign as Trustee. He offered to resign only if Deborah would provide him with a release of liability which Deborah refused to provide.<br />
Robert petitioned the court for approval of his resignation as Trustee in 2011. In that petition, he asked the court to render judgment approving the accounting and "releasing and fully and completely discharging [Robert] from any and all claims, duties and liabilities regarding the Trust and/or his administration of the Trust, . . ." and directing that all costs, expenses and attorney's fees and accounting fees incurred by Robert in connection with his petition be paid out of the assets of the Trust. In her original answer, Deborah asked only for an accounting. A year after Robert filed his original petition, Deborah filed an amended answer that first included her counterclaims. In November 2015, Robert filed his first amended petition in which he stated that he sought a declaratory judgment approving the Trust accountings and releasing and discharging him, as Trustee and individually, from any liability involving matters relating to his administration of the Trust.<br />
While acknowledging that Deborah was not required to give him a release, Robert testified that there would have been no litigation if she had provided the release. Robert's attorney testified that Robert would agree to resign if they designated a Successor Trustee and if Deborah agreed to fully release Robert. At the same time, Robert complains that the litigation drained the Trust. His actions show that he deemed it more important to obtain the release than to preserve his mother's funds. He asked the court to order Deborah to reimburse the Trust with $587,585 that was used to pay his attorneys and accountants for fees for services rendered to defend against the counterclaims. Robert's attorney testified that Robert was not asking Deborah to pay for amounts predating the lawsuit or for the accounting. In argument to the court, he made it clear that Robert wanted the court to order Deborah to reimburse the Trust for fees that were incurred to defend against her counterclaims. The judgment provides in pertinent part:<br />
<blockquote>
IT IS FURTHER ORDERED that the Trustee, on behalf of the Trust, shall recover from Deborah the sum of $587,585.00 as reasonable attorney's fees and expenses incurred by the Trustee related to Deborah's claims through the trial of this case. In the event of an appeal by Deborah or any Respondent (other than Mrs. Harris) to the Court of Appeals, if the appeal is unsuccessful, the Trustee will be further entitled to recover from Deborah an additional sum of $70,000.00 as reasonable attorney's fees and expenses. In the event that Deborah or any Respondent (other than Mrs. Harris) files a Petition for Review in the Texas Supreme Court, if the appeal is unsuccessful, the Trustee will be further entitled to recover from Deborah an additional sum of $25,000. In the event the Texas Supreme Court grants a Petition for Review and the Trustee prevails, then the Trustee will be further entitled to recover from Deborah an additional sum of $50,000.</blockquote>
<blockquote>
IT IS FURTHER ORDERED that Mrs. Harris shall have and recover judgment from and against Deborah in the sum of $53,791.00, as reasonable attorney's fees and expenses incurred by Mrs. Harris through the trial of this case. In the event of an appeal by Deborah or any Respondent (other than Mrs. Harris) to the Court of Appeals, if the appeal is unsuccessful, Mrs. Harris will be further entitled to recover from Deborah an additional sum of $30,000.00 as reasonable attorney's fees and expenses. In the event that Deborah or any Respondent (other than Mrs. Harris) files a Petition for Review in the Texas Supreme Court, Mrs. Harris will be further entitled to recover from Deborah an additional sum of $15,000.00.</blockquote>
The record shows that Robert repeatedly engaged in self-dealing. In the summer of 2007, he told the Trust beneficiaries that, with their permission, he would invest approximately $750,000 of Trust money in a project planned by his real estate company. After getting the approval of the beneficiaries, he did not follow through on those terms. Instead, he loaned $2.1 million in Trust funds to an entity he was part owner in and lost all of that money when the deal collapsed. His actions resulted in a material financial loss to the Trust.<br />
It is settled law that a trustee is not entitled to expenses related to litigation resulting from the fault of the trustee. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=10293664592065938223&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>duPont v. S. Nat'l Bank,</i> 575 F.Supp. 849, 864 (S.D. Tex. 1983),</a> <i>modified,</i> <a href="https://scholar.google.com/scholar_case?case=13164998159737684920&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1">771 F.2d 874 (5th Cir. 1985)</a>. Here, although Deborah asserted that Robert engaged in wrongdoing, there was no trial on Deborah's breach of fiduciary duty and fraud claims. Robert won on those counterclaims, not after a review of the merits, but based solely on his affirmative defenses presented by way of summary judgment motion. Through affirmative defenses the defendant seeks to establish a reason why the plaintiff should not recover independent from an examination of the merits of her claims. <a href="https://scholar.google.com/scholar_case?case=578654918443394129&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hamm v. Millennium Income Fund, L.L.C.,</i> 178 S.W.3d 256, 268 (Tex. App.-Houston [1st Dist.] 2005, pet. denied)</a>. If true, the defendant's affirmative defense will defeat the plaintiff's claim, even if all the allegations in the complaint are true. <a href="https://scholar.google.com/scholar_case?case=114101654663869728&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Zorrilla v. Aypco Constr. II, LLC,</i> 469 S.W.3d 143, 155-56 (Tex. 2015)</a>. That Deborah's counterclaims are barred by limitations, quasi-estoppel, and the Trust instrument's exculpatory clause is a factor we consider in looking at the equities in this case. For purposes of our discussion, a win on affirmative defenses is not on equal footing with a win on the merits. Moreover, neither the Declaratory Judgments Act nor trust code Section 114.064 are prevailing party statutes, and an award of attorney's fees under those statutes is not dependent on a finding that a party substantially prevailed. <a href="https://scholar.google.com/scholar_case?case=687448325621487000&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Hachar,</i> 153 S.W.3d at 142</a>; <a href="https://scholar.google.com/scholar_case?case=8133902745254622415&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>City of Willow Park v. Bryant,</i> 763 S.W.2d 506, 511 (Tex. App.-Fort Worth 1988, no writ)</a>. It follows that Robert's win does not require a determination that an award of attorney's fees is equitable.<br />
We acknowledge that the judgment orders "that the Trustee has properly performed his duties and responsibilities as the Trustee of the DPH Trust." This language is found in the sentence discharging Robert from the duties of Trustee. This can only refer to Robert's actions that were proven at trial which did not include his defenses against Deborah's counterclaims, the rationale for the award of $587,585.<br />
Robert complains that Deborah was the only one to contest his actions and her counterclaims cost the Trust an enormous amount of money, depleting the liquid assets to the point that the Trust cannot pay its share of Ruth's mandatory distributions. He argues that this causes Ruth to bear the burden of the cost of this litigation. Therefore, he argues, Deborah should reimburse the Trust. We disagree. Robert and Ruth treated the four trusts as belonging to the remainder beneficiaries by naming the trusts after them, getting their permission to use funds for investments, and by making distributions to the remainder beneficiaries during Ruth's lifetime. Robert engaged in very risky activities and lost a substantial amount of Trust money. Deborah had the right to disagree with and question Robert's actions, and her claims were against him individually, alleging inappropriate actions. Robert did not have the right to insist on a release from Deborah. Robert was not cleared of any wrongdoing by a review of the merits. Considering all of the circumstances, we conclude that it was inequitable as a matter of law for the trial court to order Deborah to pay Robert's $587,585 attorney's fee bill for his defense of her counterclaims. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet,</i> 972 S.W.2d at 21</a>. We sustain Deborah's twenty-seventh issue.<br />
Robert named Ruth as a party in his petition, and she entered an appearance in the case as an interested party. Without elaboration, her attorney testified that her appearance was necessitated by the claims asserted by Deborah. Ruth is the Trust beneficiary and the Trust funds belong to her. No claims were filed by or against Ruth. She is essentially an observer. However, she hired an attorney who charged her a total of $53,791.50 for reviewing documents, participating in conferences, and attending hearings and a deposition between August 2012 and May 2017.<br />
Ruth did not want Robert to resign as Trustee, she had no complaints about his actions as Trustee, and she did not want Deborah to sue Robert. She testified that she wanted to protect Robert because Deborah was angry about the Bighorn investment. There is no indication in the record that Ruth objected to payment by the Trust of attorney's fees incurred by Robert in defending against the counterclaims by which Deborah sought to impose personal liability on Robert. Her attorney testified that Ruth paid her attorney's fees personally and argued that it would be just and equitable for the court to order Deborah to pay Ruth's attorney's fees. As explained above, it was not equitable for Robert to be reimbursed for his attorney's fees. Ruth aligned herself with Robert and played no discernable part in the conflict between Robert and Deborah. Under these circumstances, we conclude that it was not equitable to award attorney's fees to Ruth, and the trial court abused its discretion in ordering Deborah to pay Ruth $53,791 in attorney's fees.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[5]" name="r[5]">[5]</a></sup> <i>See</i> <i>id.</i> We sustain Deborah's thirtieth issue.<br />
Deborah also asserts that the trial court abused its discretion by ordering her to reimburse Robert and Ruth for attorney's fees that they might incur on appeal to this court and the supreme court because the evidence is insufficient to show reimbursement is just and equitable. We agree. The bulk of the appeal involves issues concerning the counterclaims. Deborah never contested the accounting or Robert's removal as Trustee. Other than the award of attorney's fees to Ruth, neither the judgment nor Deborah's complaints about it directly concern Ruth. The rationale that caused us to conclude it was not equitable to order Deborah to reimburse Robert and Ruth for attorney's fees incurred through trial is equally applicable to the order for Deborah to pay their appellate attorney's fees. The trial court abused its discretion in ordering that Robert is entitled to $70,000 in attorney's fees for an unsuccessful appeal to the court of appeals, $25,000 if Deborah files an unsuccessful petition in the supreme court, and an additional $50,000 if that petition is granted. Likewise, the trial court abused its discretion in ordering that Ruth is entitled to recover from Deborah $30,000 in attorney's fees in the event of an unsuccessful appeal to the court of appeals and $15,000 if Deborah files a petition for review in the Texas Supreme Court. <i>See</i> <i>id.</i> We sustain Deborah's issues twenty-eight, twenty-nine, thirty-one and thirty-two.<br />
<br />
<h2>
ATTORNEY'S FEES-OUTSTANDING FEES</h2>
<br />
In her thirty-third issue, Deborah asserts that the evidence is legally and factually insufficient to support the trial court's implied findings that Robert had additional legal fees or expenses outstanding, or that those fees were reasonable and necessary. She further asserts that the trial court abused its discretion by ordering that the Trust should pay Robert's outstanding legal fees.<br />
Deborah apparently refers to the part of the trial court's order that provides: "IT IS FURTHER ORDERED that the Trustee or Successor Trustee shall pay all outstanding legal and accounting fees incurred by the DPH Trust immediately upon receipt of sufficient liquid funds to do so." Considering the decree as a whole and the literal meaning of the language used, we conclude that this sentence does not order Deborah to pay amounts in addition to the specified attorney's fees. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=17989201266347609068&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wilde,</i> 949 S.W.2d at 332-33</a>. It merely orders the Trustee to pay fees specifically identified in other paragraphs of the order when the Trust contains sufficient funds to do so. We overrule Deborah's thirty-third issue.<br />
<br />
<h2>
ATTORNEY'S FEES-DEBORAH'S</h2>
<br />
In her thirty-fourth, thirty-fifth, and thirty-sixth issues, Deborah contends the trial court should have ordered Robert to pay Deborah's trial and appellate attorney's fees. She argues that the record supports a determination that it was just and equitable for Robert to pay the fees, that the fees are reasonable and necessary, and the trial court abused its discretion by failing to order Robert to pay her attorney's fees incurred in prosecuting her counterclaims and for successful appeals to the court of appeals and the supreme court.<br />
We will discuss the requirement that Deborah prove her requested fees are reasonable and necessary. For purposes of this discussion, we assume without deciding that Deborah established all other matters necessary to show an entitlement to attorney's fees.<br />
<br />
<h2>
Applicable Law</h2>
<br />
Under the Texas Property Code, the trial court may award reasonable and necessary attorney's fees as are equitable and just. TEX. PROP. CODE ANN. § 114.064. The grant or denial of attorney's fees lies within the discretion of the trial court. <a href="https://scholar.google.com/scholar_case?case=10146224088279779316&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Lesikar v. Moon,</i> 237 S.W.3d 361, 375 (Tex. App.-Houston [14th Dist.] 2007, pet. denied)</a>. Under an abuse of discretion standard, legal and factual sufficiency of the evidence are relevant factors in assessing whether the trial court abused its discretion. <i>Id.</i> Whether attorney's fees are reasonable or necessary are questions of fact for the trier of fact's determination. <a href="https://scholar.google.com/scholar_case?case=15052939308021524816&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Bocquet,</i> 972 S.W.2d at 21</a>. Unreasonable fees cannot be awarded even if the court believed them to be just. <i>Id.</i><br />
The factors to be considered in determining the reasonableness of attorney's fees include:<br />
<blockquote>
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;</blockquote>
<blockquote>
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;</blockquote>
<blockquote>
(3) the fee customarily charged in the locality for similar legal services;</blockquote>
<blockquote>
(4) the amount involved and the results obtained;</blockquote>
<blockquote>
(5) the time limitations imposed by the client or by the circumstances;</blockquote>
<blockquote>
(6) the nature and length of the professional relationship with the client;</blockquote>
<blockquote>
(7) the experience, reputation, and ability of the lawyer performing the services; and</blockquote>
<blockquote>
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.</blockquote>
TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(b), <i>reprinted in</i> TEX. GOV'T CODE ANN., tit. 2, subtit. G, app. A (West 2013) (TEX. STATE BAR R. art. X, § 9); <a href="https://scholar.google.com/scholar_case?case=1751498717150008353&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Arthur Andersen & Co. v. Perry Equip. Corp.,</i> 945 S.W.2d 812, 818 (Tex. 1997)</a>.<br />
<br />
<h2>
Analysis</h2>
<br />
At the hearing on Robert's petition to resign as Trustee, Deborah's attorney attempted to admit into evidence an exhibit containing invoices itemizing attorney's fees charged from 2011 through May 20, 2017. The opposing parties objected to the relevance of the evidence, arguing there is no pleading to support it. The court sustained the objection and allowed presentation of the evidence as an offer of proof. In support of the exhibit, Deborah's attorney then testified as to the number of hours worked by multiple attorneys and their respective hourly rates. He stated that the total fees incurred "defending against Mr. Patterson's request for a judicial absolution and approval of his accounting and prosecuting counterclaims is about $302,500." He explained that the majority of that, about $250,000, was spent on the counterclaims and about $50,000 on the accounting. He testified that, if Deborah prevails in the court of appeals she should be entitled to an award of $25,000, if she is successful in pursuing or defeating an application for petition for review in the supreme court she would be entitled to a fee of $15,000, and if she is successful in defeating or prevailing on a petition for review in the supreme court she would be entitled to another $15,000 in attorney's fees. After the attorney completed his testimony, the court restated its previous ruling that the objection lodged by the opposing parties is sustained, and the proffered exhibit and the attorney's testimony on attorney's fees constitute an offer of proof and is not admitted into evidence.<br />
The primary purpose of an offer of proof is to include excluded evidence in the record so the appellate court can determine whether the trial court erred in excluding it. <i>See</i> TEX. R. EVID. 103(a)(2); <a href="https://scholar.google.com/scholar_case?case=13301069168797977245&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re Canales,</i> 113 S.W.3d 56, 68 (Tex. Rev. Trib. 2003, pet. denied)</a>. Here, Robert and Ruth objected to admission of the evidence, the objection was sustained, and the evidence was not admitted. There is no corresponding complaint on appeal that denial of admission into evidence was error. The offer of proof is not evidence of Deborah's attorney's fees. Additionally, notably missing from the testimony is any reference to the reasonableness or necessity of the requested fees.<br />
Even assuming Deborah has established all other matters necessary to show entitlement to attorney's fees, she has not shown the requested fees are reasonable and necessary. Because there is no evidence that the requested attorney's fees would be reasonable and necessary, the trial court did not abuse its discretion by failing to order Robert to pay Deborah's attorney's fees. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=10146224088279779316&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Lesikar,</i> 237 S.W.3d at 375</a>. We overrule Deborah's issues thirty-four, thirty-five, and thirty-six.<br />
<br />
<h2>
DISCOVERY ABUSE SANCTIONS</h2>
<br />
Deborah's issues thirty-seven through forty-two involve sanctions levied against her attorneys for actions taken in an attempt to obtain from a third party information about Robert's business transactions that they felt was pertinent to her counterclaims. Robert pursued sanctions for failure to comply with discovery rules and for engaging in deception.<br />
<br />
<h2>
Applicable Law</h2>
<br />
The Texas Rules of Civil Procedure impose detailed requirements on litigants who wish to obtain information about the case in preparation for trial. <i>See</i> TEX. R. CIV. P. 190-205. The rules also provide for imposition of sanctions for the failure to comply with those requirements. TEX. R. CIV. P. 215. Sanctions are used to assure compliance with discovery and to deter those who might be tempted to abuse discovery in the absence of a deterrent. <a href="https://scholar.google.com/scholar_case?case=2082544514791659438&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Cire v. Cummings,</i> 134 S.W.3d 835, 839 (Tex. 2004)</a>.<br />
We review a trial court's ruling on a motion for sanctions using an abuse of discretion standard. <a href="https://scholar.google.com/scholar_case?case=16025938529898675367&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Am. Flood Research, Inc. v. Jones,</i> 192 S.W.3d 581, 583 (Tex. 2006) (per curiam)</a>. The ruling will be reversed if the trial court acted without reference to any guiding rules and principles such that its ruling was arbitrary or unreasonable. <i>Id.</i> The appellate court must ensure that the sanctions were appropriate or just. <i>Id.</i> To determine whether a sanction is just, we consider whether there is a direct relationship between the offensive conduct and the sanctions imposed and whether less severe sanctions would have been sufficient to promote compliance. <i>Id.</i> The appellate court is not bound by the trial court's findings of fact and conclusions of law and we are not limited to a review of the sufficiency of the evidence to support the trial court's findings. <a href="https://scholar.google.com/scholar_case?case=11594679361779947533&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Scott Bader, Inc. v. Sandstone Prods, Inc.,</i> 248 S.W.3d 802, 812 (Tex. App.-Houston [1st Dist.] 2008, no pet.)</a>. Rather, appellate courts must independently review the entire record to determine whether the trial court abused its discretion. <i>Id.</i><br />
<br />
<h2>
Facts</h2>
<br />
In May 2013, Craig M. Daugherty, one of Deborah's attorneys, sent an email to a Central Title Company employee attaching a "Subpoena to Appear and Produce Documents" and instructing her that "compliance with the subpoena may be simplified by producing the requested documents attached to the business records affidavit which is included within the subpoena." The style of the case appears at the top of the first page of the attached document. The pertinent portion of the document is as follows:<br />
<blockquote>
SUBPOENA TO APPEAR AND PRODUCE DOCUMENTS</blockquote>
<blockquote>
To: Central Title Company, 6783 Old Jacksonville Hwy, Tyler, Texas 75703</blockquote>
<blockquote>
BY THIS SUBPOENA, a Custodian of Records of Central Title Company is COMMANDED to APPEAR before the Presiding Judge of the 241st Judicial District Court of Smith County, Texas, in the Smith County Courthouse, 100 N. Broadway, Room 220, Tyler, Texas 75702 on June 25, 2013 at 11:00 a.m. and continuing day to day thereafter until released by Order of the Court or consent of Deborah Patterson Howard Goughnour to give testimony and provide evidence in a case pending therein, filed under Cause Number 11-2216-C and styled, "In Re: The Deborah Patterson Howard Trust."</blockquote>
<blockquote>
BY THIS SUBPOENA DUCES TECUM, a Custodian of Records of Central Title Company is COMMANDED to produce and permit inspection and copying by the attorneys for Deborah Patterson Howard Goughnour of documents or tangible things in their possession, custody, or control designated and described in Exhibit A attached hereto before the Presiding Judge of the 241st Judicial District Court of Smith County, Texas, in the Smith County Courthouse, 100 N. Broadway, Room 220, Tyler, Texas 75702 on June 25, 2013 at 11:00 a.m.</blockquote>
The document also explained that compliance was required, and the failure to comply could result in a fine or confinement, or both. The final paragraph of the document announced that "COMPLIANCE WITH THIS SUBPOENA WILL BE EXCUSED IF THE DOCUMENTS DESCRIBED IN EXHIBIT A ARE PROVIDED ALONG WITH A SIGNED, NOTARIZED BUSINESS RECORDS AFFIDAVIT. . . ." The document is signed by Craig M. Daugherty and lists the names of attorneys Ty Beard, Donald Harris, Jim E. Bullock, and Brian Casper as well as the names, addresses, and telephone numbers of their law firms. Exhibit A requests all documents, information, and communications regarding real estate transactions for Robert and twenty-one entities he or Deborah is associated with.<br />
In response to the subpoena, Central Title Company delivered a substantial number of documents to Deborah's attorneys although the business records affidavit was not executed or delivered. When he learned of the document production, Robert filed a motion to quash the subpoena and for sanctions for discovery abuse asserting that the subpoena did not comply with applicable discovery rules. He complained that his attorneys did not receive a copy of the subpoena, it was not filed with the court, and the subpoena falsely claimed there was a June 25 trial date set. He asserted that the subpoena was a deceptive device used to evade the discovery rules. Citing rules of civil procedure 215.3 and 215.2(b), Robert asked the court to order that Deborah is precluded from conducting any more discovery and using at trial any document obtained through the subpoena, that she is required to turn over to Robert's attorneys all documents obtained through the subpoena, and that she must pay all attorney's fees incurred by Robert, Ruth, or Dean Bailey caused by the issuance of the subpoena.<br />
In response to the motion to quash, Daugherty wrote a letter to Robert's attorney in which he agreed that he failed to follow the notice requirements of Rule 205.2 which is applicable to discovery from nonparties. He explained that he has used the same procedure for thirty-five years to obtain records from recalcitrant medical providers. He asked that opposing counsel consider the letter a retraction of the subpoena and promised to provide copies of the records received from Central Title Company and to send Rule 205.2 notice for service of the subpoena. Daugherty also filed an amended response to the motion, admitting that the procedure he followed is not authorized by the rules of civil procedure. He argued that the violation of the rules was an inadvertent mistake and inconsequential because Central Title Company did not execute a business records affidavit, rendering the documents that were produced inadmissible.<br />
Robert filed a supplement to his motion, attaching an affidavit of Jerry W. Hill, an owner of Central Title Company, in which he states that Central Title Company produced documents in response to the subpoena. Robert also attached Daugherty's September 19, 2013 affidavit in which Daugherty stated that Hill told him he agreed to produce the documents voluntarily but Hill would not execute an affidavit confirming that the subpoena was not the basis of his decision to produce documents because Hill did not want to create a conflict with Robert. Daugherty explained in the affidavit that he attempted unsuccessfully to depose Hill, opining that he could not adequately respond to the motion for sanctions without Hill's testimony.<br />
The hearing on the motion spanned three non-consecutive days. Robert's attorney, Mary Burdette, complained that Daugherty did not follow Rule 205 which governs discovery from nonparties. She argued that Daugherty tried to use a Rule 176 trial subpoena to conduct discovery, a procedure that has never been valid, and the rules do not allow subpoena of a third party to a hearing or trial. She further complained that she received no notice of the subpoena which was not served in accordance with the rules. She said Robert was prejudiced because about half of the documents Daugherty received involved Robert's personal transactions, information the other side was not entitled to have. Robert testified, identifying documents that involved the Trust and those that did not involve the Trust.<br />
Daugherty said he used rule of evidence 902, the business records affidavit, which does not require notice, and he was not seeking discovery by subpoena. He claimed he was not trying to force production. He explained that he was giving the third party a choice, either comply with the request voluntarily through the business records affidavit or be subpoenaed. He further explained that putting the hearing date in the fake subpoena gave it a little sense of urgency when dealing with a reluctant records custodian. He claimed ignorance of the current rules. Daugherty also claimed the records are relevant to Robert's breach of fiduciary duty and production of the records created no prejudice. He further stated that he spoke to Hill and that Hill agreed to provide the documents. Daugherty opined that he later attempted to correct his mistake and obtain documents the correct way. He also complained that Robert's attorney did not comply with the local rules which require a conference before filing a motion for sanctions.<br />
At the third hearing, Jerry Hill, part owner of Central Title Company, testified, explaining that he was not physically served with the subpoena but Central Title agreed to produce the documents in accordance with the subpoena. He did not recall telling Daugherty that he did not want to injure his business relationship with Robert. On cross examination, he stated that Central Title would not have produced the documents without a subpoena.<br />
Burdette testified about her attorney's fees in connection with the motion for sanctions. She charged $400 an hour and an associate charged $250 an hour, which she claimed is reasonable and necessary. Together they worked a total of 27.9 hours, and she asked for $18,015 in fees. Richard Lottman, another of Robert's attorneys, said that he worked on this matter for twelve hours at $380 per hour and asked for $4,560. Burdette stated that Robert is not asking to have relevant documents removed, and Daugherty said they did not need Robert's personal documents.<br />
The court determined that a procedure was used that did not meet the requirements of the rules and that the attorneys should be sanctioned. He announced that, as a sanction, he was awarding attorney's fees in the amount of $14,000. He explained that he arrived at that number by allowing thirty-five hours at $400 an hour.<br />
Several months after the third sanctions hearing, the trial court signed an order granting the motion for sanctions. The trial court found that Daugherty, Beard, Harris, Bullock, and Casper sent a false trial subpoena to Central Title Company to avoid compliance with the rules of civil procedure which constitutes a sanctionable abuse of the discovery process under Rule 215.3. The court found that a monetary sanction is authorized by Rule 215.2(b)(8) and ordered Daugherty, Beard, Harris, Bullock, and Casper, jointly and severally, to pay the Trust $14,000 in attorney's fees.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[6]" name="r[6]">[6]</a></sup><br />
<br />
<h2>
Analysis</h2>
<br />
In her thirty-seventh and fortieth issues, Deborah contends there is legally and factually insufficient evidence to prove her attorneys abused the discovery process, and the trial court abused its discretion by finding that they did, by sanctioning them, and by failing to consider a lesser sanction. She argues that counsel sought to obtain documents from Central Title Company pursuant to Rule of Evidence 902 which supports obtaining business records via voluntary production. She asserts that the order cannot be based on an attempt to avoid compliance with the rules because there was no enforceable subpoena or attempt to serve an enforceable subpoena, thus Central Title Company's production of documents was wholly voluntary and there was no sanctionable conduct. In her thirty-ninth issue, Deborah asserts that the general testimony of Robert's counsel is legally and factually insufficient evidence to support a finding that the attorney's fees Robert requested were reasonable and necessary, and the trial court abused its discretion by ordering Deborah's attorneys to pay those fees as a sanction.<br />
Daugherty sent what he referred to as a fake subpoena to a third party in an attempt to obtain documents, half of which he was not entitled to have. The fake subpoena included a fake trial date. He admitted that he did not know or follow the rules for obtaining documents from a third party. The court also had before it Daugherty's affidavit in which he claimed that Hill said Central Title Company provided the documents voluntarily. In contrast, the court heard Hill's testimony that the documents were produced in response to the subpoena. In spite of Daugherty's assertion that he was not trying to force production, the language of the subpoena was forceful and intimidating. The court could have reasonably determined that Daugherty was trying to fool the recipient of the subpoena. The facts and evidence before the court support its determination that Deborah's attorneys should be sanctioned for the method by which they obtained documents from Central Title Company. The time spent addressing Daugherty's abuse caused prejudice to Robert's attorneys. The punishment, requiring Deborah's attorneys to pay expenses incurred by Robert's attorneys in pursuing sanctions, was tailored to remedy that prejudice. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=16025938529898675367&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Jones,</i> 192 S.W.3d at 583</a>.<br />
The judgment reflects that the trial court considered Robert's request, contained in his motion for sanctions, that the court prohibit any further discovery and disallow use of the documents. In open court, the trial court wanted identification of the type of documents provided, and clarification about which documents were not relevant, and which documents were discoverable. The court stated that it was considering excluding everything and asked Burdette to suggest other possible sanctions. During the proceedings, the court ordered Deborah's attorneys not to look at the documents, indicating there was a possibility that he would not allow their use. The trial court did not order any of the documents excluded. Thus, contrary to Deborah's argument that the court failed to consider lesser sanctions, the record shows that the trial court considered other sanctions and imposed lesser sanctions than it considered. <i>See</i> <i>id.</i> The court imposed a sanction that is limited to costs associated with addressing the abuse to promote compliance with the rules. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=16515612615824488563&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Wilson v. Shamoun & Norman, LLP,</i> 523 S.W.3d 222, 233 (Tex. App.-Dallas 2017, pet. denied)</a>.<br />
Deborah argues that the evidence is insufficient to show the amount of attorney's fees she was ordered to pay is reasonable and necessary. Rule 215.2(8) authorizes the trial court to order a party's attorney to pay reasonable expenses, including attorney's fees, caused by the abuse. TEX. R. CIV. P. 215.2(8). The record shows that Robert's attorneys spent a total of 39.9 hours addressing the sanctions matter. At the first hearing, they asked for $11,600. At the third hearing, which was necessitated by Daugherty's insistence on presenting Hill's testimony, they asked for a total of $22,575. The trial court awarded only $14,000. That amount is supported by the record, and we discern no abuse of discretion in the court's award. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=14891812859390016847&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Finlay v. Olive,</i> 77 S.W.3d 520, 527 (Tex. App.-Houston [1st Dist.] 2002, no pet.)</a>. The ruling granting the motion for sanctions and ordering Deborah's attorneys to pay Robert's attorneys $14,000 was not arbitrary or unreasonable. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=16025938529898675367&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Jones,</i> 192 S.W.3d at 583</a>. We overrule Deborah's thirty-seventh, thirty-ninth, and fortieth issues.<br />
In her thirty-eighth issue, Deborah complains that the trial court erred in sanctioning her attorneys because the order cites to Rule 215.3, which authorizes sanctions against a party, not counsel. In her forty-first issue, Deborah asserts the trial court abused its discretion by ordering that all of her attorneys are jointly and severally liable when Daugherty alone sent the fake subpoena. She argues that there is no evidence that attorneys Ty Beard, Donald Harris, or Jim E. Bullock<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#[7]" name="r[7]">[7]</a></sup> prepared, signed or sent the complained-of document, and there is no direct relationship between the sanction and any improper conduct by those attorneys.<br />
Deborah filed a motion to modify the sanctions order but did not include either of these complaints. When an attorney fails to complain of the sanction and fails to ask the trial court to reconsider its actions, the attorney waives any complaint about the trial court's action. TEX. R. APP. P. 33.1; <a href="https://scholar.google.com/scholar_case?case=5586335269476928226&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Victory Energy Corp. v. Oz Gas Corp.,</i> 461 S.W.3d 159, 181 (Tex. App.-El Paso 2014, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=1219656614878357056&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Howell v. Tex. Workers' Comp. Comm'n,</i> 143 S.W.3d 416, 450 (Tex. App.-Austin 2004, pet. denied)</a>. We overrule Deborah's thirty-eighth and forty-first issues.<br />
In her forty-second issue, Deborah contends the trial court abused its discretion by failing to enforce procedural requirements before rendering its sanctions order. Specifically, she complains that Robert's attorneys failed to comply with the local rule requiring opposing counsel to confer with her attorneys before filing the motion for sanctions. Burdette offered no explanation for making no effort to confer with Daugherty, although she stated that opposing counsel obtained documents they were not entitled to, which could not be fixed. Daugherty argued that, had counsel conferred with him, he could have withdrawn the fake subpoena and made a request that complied with the rules.<br />
The local rules for Smith County district courts require a party seeking sanctions to certify that the movant conferred with or made a reasonable effort to confer with opposing counsel in an effort to resolve the dispute without the necessity of court intervention and that the attempt failed. SMITH (TEX.) CIV. DIST. AND CTY. CTS. AT LAW LOC. R. 2.1. Likewise, the rules of civil procedure require that all discovery motions contain a certificate of conference stating that reasonable efforts were used to resolve the pending dispute without the need for court intervention. TEX. R. CIV. P. 191.2.<br />
The failure to confer might affect the scope of the dispute, and thus the amount of attorney's fees billed. <a href="https://scholar.google.com/scholar_case?case=4291357860077959194&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Clark v. Clark,</i> 546 S.W.3d 268, 274 (Tex. App.-El Paso 2017, no pet.)</a>. However, the certificate of conference is for the court's benefit and the court may choose to enforce it or not at the court's option. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=16544711886109907116&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Groves v. Gabriel,</i> 874 S.W.2d 660, 661 n.3 (Tex. 1994)</a> (orig. proceeding) (per curiam).<br />
Here, Burdette's failure to follow the rule requiring a conference did not cause the damage. Furthermore, a pre-motion conference and allowing Daugherty his requested "do-over" would not have erased the abuse. Daugherty sent a misleading, fake subpoena to a third party which responded by sending him documents to which he was not entitled. Under the facts, the court did not abuse its discretion in determining that the motion for sanctions would still be necessary even if the parties conferred before it was filed. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=4291357860077959194&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>Clark,</i> 546 S.W.3d at 274</a>. We overrule Deborah's forty-second issue.<br />
<br />
<h2>
DISPOSITION</h2>
<br />
Because we determined that it is inequitable for Deborah to pay Robert's and Ruth's trial and appellate attorney's bills, we <i>modify</i> the trial court's judgment to <i>delete</i> the order for Deborah to pay those fees. We <i>affirm</i> the trial court's judgment as <i>modified.</i>(PUBLISH)<br />
<br />
<h2>
JUDGMENT</h2>
<br />
THIS CAUSE came to be heard on the oral arguments, appellate record and the briefs filed herein, and the same being considered, it is the opinion of this court that there was error in the judgment of the court below. In accordance with this court's opinion of this date, the judgment of the trial court is modified as follows:<br />
We DELETE the following portion of the trial court's judgment:<br />
<blockquote>
IT IS FURTHER ORDERED that the Trustee, on behalf of the Trust, shall recover from Deborah the sum of $587,585.00 as reasonable attorney's fees and expenses incurred by the Trustee related to Deborah's claims through the trial of this case. In the event of an appeal by Deborah or any Respondent (other than Mrs. Harris) to the Court of Appeals, if the appeal is unsuccessful, the Trustee will be further entitled to recover from Deborah an additional sum of $70,000.00 as reasonable attorney's fees and expenses. In the event that Deborah or any Respondent (other than Mrs. Harris) files a Petition for Review in the Texas Supreme Court, if the appeal is unsuccessful, the Trustee will be further entitled to recover from Deborah an additional sum of $25,000. In the event the Texas Supreme Court grants a Petition for Review and the Trustee prevails, then the Trustee will be further entitled to recover from Deborah an additional sum of $50,000.</blockquote>
<blockquote>
IT IS FURTHER ORDERED that Mrs. Harris shall have and recover judgment from and against Deborah in the sum of $53,791.00, as reasonable attorney's fees and expenses incurred by Mrs. Harris through the trial of this case. In the event of an appeal by Deborah or any Respondent (other than Mrs. Harris) to the Court of Appeals, if the appeal is unsuccessful, Mrs. Harris will be further entitled to recover from Deborah an additional sum of $30,000.00 as reasonable attorney's fees and expenses. In the event that Deborah or any Respondent (other than Mrs. Harris) files a Petition for Review in the Texas Supreme Court, Mrs. Harris will be further entitled to recover from Deborah an additional sum of $15,000.00.</blockquote>
It is therefore ORDERED, ADJUDGED and DECREED that the judgment of the court below is AFFIRMED as modified. It is further ORDERED that all costs of this appeal are hereby adjudged against the party incurring same, for which execution may issue, and that this decision be certified to the court below for observance.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[1]" name="[1]">[1]</a> Throughout this opinion, our reference to the "Trust" encompasses all four trusts collectively, and, at times, only Deborah's Trust, which is also referred to at times as the DPH Trust.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[2]" name="[2]">[2]</a> The orders granting Robert's motions on the guaranty claim specifically decreed that Deborah take nothing on all her claims against any party. The order granting Robert's motion on Deborah's other claims decrees that Deborah take nothing on all her claims against Robert and Bailey. Our record does not include a motion for summary judgment filed by Bailey. However, Bailey is not a party to this appeal.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[3]" name="[3]">[3]</a> Robert's motion addressed Deborah's claims for breach of fiduciary duty and fraud. Deborah's claims for common law fraud and constructive fraud were made in the alternative and based on the same facts as her breach of fiduciary duty claims, Robert's representations and omissions of material facts relating to the Bighorn transaction. In her brief, in arguing against the trial court's ruling on this motion, Deborah refers only to her breach of fiduciary duty claims. Therefore, it appears that she is not challenging the ruling as to her fraud claims. To the extent she is challenging that ruling, the challenge meets the same fate as her challenge to the ruling on the fiduciary duty claims.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[4]" name="[4]">[4]</a> In her seventh issue, Deborah asserts that the trial court erred by denying her first motion for partial summary judgment. In that motion, she sought to dispose of Robert's request for a judicial release and discharge as Trustee. We do not reach this issue because it is based on review of the denial of a motion that did not seek a final judgment. <i>See</i> <a href="https://scholar.google.com/scholar_case?case=8263472989059452793&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1"><i>In re D.W.G.,</i> 391 S.W.3d at 164</a>.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[5]" name="[5]">[5]</a> The Trust, as amended, requires discretionary distributions to Ruth to be made equally from the four trusts. Therefore, if Ruth is to be reimbursed, the Trust instrument forbids full payment from Deborah's Trust.<br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[6]" name="[6]">[6]</a> The court ordered the attorneys to pay the Trust no later than July 21, 2014. The sanctioned attorneys sought mandamus relief from this order. This court denied the petition for writ of mandamus but ordered the attorneys to pay the sanction into the registry of the court within thirty days of our January 20, 2015 opinion. <i>In re Beard,</i> 12-15-00005-CV, 2015 WL 273187, at *2 (Tex. App.-Tyler Jan. 20, 2015, orig. proceeding) (mem. op.).<br />
<small></small><br />
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=2136430100462309062&hl=en&lr=lang_en&as_sdt=4,44&as_vis=1&oi=scholaralrt#r[7]" name="[7]">[7]</a> The order also named attorney Brian Casper. Deborah does not mention Casper.MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-41895674212717537522018-11-29T17:25:00.001-06:002018-11-29T17:42:18.707-06:00Asset freeze by temporary injunction based on unadjudicated tort claim for unliquidated damages reversed by Austin Court of Appeals Yvonne Brown v. Coffee Traders, Inc., No. <a href="http://search.txcourts.gov/Case.aspx?cn=03-18-00428-CV&coa=coa03" target="_blank">03-18-00428-CV</a> (Tex.App. - Austin, Nov. 21, 2018) (temporary injunction improperly used for prejudgment asset freeze; dissolved)<br />
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Yvonne Brown, Appellant,<br />v.<br />Coffee Traders, Inc., Appellee.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=12233602633858400060&as_sdt=2&hl=en" style="color: #660099;">No. 03-18-00428-CV.</a></center>
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<b>Court of Appeals of Texas, Third District, Austin.</b></div>
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Filed: November 21, 2018.</center>
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Appeal from the District Court of Travis County, 201st Judicial District, No. D-1-GN-18-002358, Honorable Jan Soifer, Judge Presiding.</div>
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Reversed and Remanded.</div>
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Before Justices Puryear, Goodwin, and Bourland.</div>
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MEMORANDUM OPINION</h2>
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DAVID PURYEAR, Justice. </div>
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In this interlocutory appeal, Yvonne Brown argues that the trial court abused its discretion in issuing a temporary injunction freezing her assets solely on the basis of Coffee Traders, Inc.'s unadjudicated tort claims against her for unliquidated damages. Brown contends that the temporary injunction is an improper prejudgment attachment and that Coffee Traders failed to demonstrate imminent and irreparable injury. We agree with Brown and therefore reverse and dissolve the trial court's temporary injunction and remand the cause for further proceedings consistent with this opinion.</div>
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BACKGROUND</h2>
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Brown was employed by Coffee Traders as an accounts-payable representative. After Coffee Traders began suspecting that Brown had embezzled over $100,000 in funds, it terminated Brown's employment and sued her for fraud, conversion, breach of fiduciary duty, and violation of the Texas Theft Liability Act. Coffee Traders's petition sought damages, attorney's fees, and a temporary injunction freezing Brown's assets. The trial court issued a temporary restraining order (TRO) enjoining Brown from: (1) disposing of any assets in her name or under her control; (2) accessing any amounts on deposit with any bank unless more than $110,000 remains on deposit, excepting $1,000 for necessities; and (3) injuring or otherwise impairing property in her possession to devalue or make it unsalable.</div>
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A temporary-injunction hearing was later held, at which the operations manager, Traci Armstrong, of Coffee Traders testified. Armstrong testified about the company's investigation into the alleged embezzlement and about documentary evidence admitted at the hearing, including checks signed by Brown and made payable to "cash" and falsified invoices, supporting Coffee Traders's likelihood to prevail on the merits of its claims. Armstrong also testified that she feared Coffee Traders would "never get repaid" by Brown because of her dual U.S.-Panama citizenship and Armstrong's belief that Brown had already made significant asset purchases in Panama, including a home and a bakery, and would "move the money" she had misappropriated to Panama, which would make it "very difficult" for Coffee Traders to collect on a judgment.</div>
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After the hearing, the trial court awarded Coffee Traders a temporary injunction accomplishing the same purposes as the TRO, except that the court reduced the amount required to remain on deposit to $70,970 after finding that Coffee Traders failed to show $110,000 worth of damages and increased the amount able to be withdrawn for necessities to $2,000 per month. Brown appeals from the trial court's grant of the temporary injunction.</div>
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STANDARD OF REVIEW</h2>
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Our review of a temporary injunction is limited to a determination of whether the trial court clearly abused its discretion. <a href="https://scholar.google.com/scholar_case?case=13113454727176221607&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Davis v. Huey,</i> 571 S.W.2d 859, 862 (Tex. 1978)</a>. The particular aspect of the abuse-of-discretion standard that is dispositive of this appeal is the erroneous application of the law to the established facts. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1890178492646002387&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Walker v. Packer,</i> 827 S.W.2d 833, 840 (Tex. 1992)</a> (orig. proceeding); <a href="https://scholar.google.com/scholar_case?case=9248602116426897287&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>State v. Southwestern Bell Tel. Co.,</i> 526 S.W.2d 526, 528 (Tex. 1975)</a>.</div>
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DISCUSSION</h2>
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A temporary injunction is an extraordinary remedy and does not issue as a matter of right. <a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Butnaru v. Ford Motor Co.,</i> 84 S.W.3d 198, 204 (Tex. 2002)</a>; <a href="https://scholar.google.com/scholar_case?case=4664412384911496863&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Walling v. Metcalfe,</i> 863 S.W.2d 56, 57 (Tex. 1993)</a>. To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. <a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Butnaru,</i> 84 S.W.3d at 204</a>; <a href="https://scholar.google.com/scholar_case?case=4664412384911496863&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Walling,</i>863 S.W.2d at 57</a>. An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. <a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Butnaru,</i> 84 S.W.3d at 204</a>. Generally, an adequate remedy at law exists and injunctive relief is improper where any potential harm may be "adequately cured by monetary damages." <a href="https://scholar.google.com/scholar_case?case=12703643646688503518&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Ballenger v. Ballenger,</i> 694 S.W.2d 72, 77 (Tex. App.-Corpus Christi-Edinburg 1985, no writ)</a>.</div>
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A temporary injunction is available to preserve the "status quo of the subject matter of the suit pending trial on the merits." <a href="https://scholar.google.com/scholar_case?case=13113454727176221607&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Davis,</i> 571 S.W.2d at 862</a>; <a href="https://scholar.google.com/scholar_case?case=9248602116426897287&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Southwestern Bell,</i> 526 S.W.2d at 528</a>. However, the temporary injunction issued here covers all of Brown's assets, which are not directly the subject matter of Coffee Traders's suit. The general rule "prohibit[s] an injunction to secure the legal remedy of damages by freezing a defendant's assets that are completely unrelated to the subject matter of the suit." <a href="https://scholar.google.com/scholar_case?case=4906350638737718418&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Texas Black Iron, Inc. v. Arawak Energy Int'l, Ltd.,</i>527 S.W.3d 579, 586 (Tex. App.-Houston [14th Dist.] 2017, no pet.)</a>; <i>see </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=11524894169438749572&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099;"><i>Victory Drilling, LLC v. Kaler Energy Corp.,</i> No. 04-07-00094-CV, 2007 WL 1828015, at *2 (Tex. App.-San Antonio June 27, 2007, no pet.)</a> (mem. op.) (holding that trial court abused discretion in granting temporary injunction to secure legal remedy of damages by freezing assets unrelated to subject matter of suit); <a href="https://scholar.google.com/scholar_case?case=9910776642250209843&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Harper v. Powell,</i>821 S.W.2d 456, 457-58 (Tex. App.-Corpus Christi 1992, no writ)</a> (same); <a href="https://scholar.google.com/scholar_case?case=10687459111446696885&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Lane v. Baker,</i> 601 S.W.2d 143, 145 (Tex. App.-Austin 1980, no writ)</a> (same).</div>
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The rule holds even when the alleged misconduct rises to the level of an intentional tort or crime, such as embezzlement, and the defendant is insolvent or likely to be insolvent at the time a judgment is rendered. <i>See </i><a href="https://scholar.google.com/scholar_case?case=11274010120371998798&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Nowak v. Los Patios Inv'rs, Ltd.,</i> 898 S.W.2d 9, 10-11 (Tex. App.-San Antonio 1995, no writ)</a> (declining to expand general rule to apply to embezzlement case where assets frozen were "completely unrelated" to subject matter of suit); <i>see also </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=11524894169438749572&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099;"><i>Victory Drilling,</i> 2007 WL 1828015, at *3</a> ("recogniz[ing] that [Plaintiff] presented evidence that [Defendant] will dissipate its assets and become judgment-proof" and, nonetheless, dissolving injunction because frozen assets were unrelated to subject matter of suit). While Coffee Traders may have a claim to some amount of money in damages from Brown, cash is fungible, and Coffee Traders cannot point to any evidence showing a direct link between Brown's frozen assets, including the cash in her bank accounts, and the allegedly embezzled funds.</div>
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Although there are exceptions to the general rule, they are inapplicable here. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=10275579428053460684&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Deckert v. Independent Shares Corp.,</i> 311 U.S. 282, 289 (1940)</a> (affirming injunction sought to preserve assets or their proceeds that are subject to pleaded equitable remedy such as recission, constructive trust, or restitution); <a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Butnaru,</i> 84 S.W.3d at 211</a> (affirming injunction sought to enjoin sale of real property that formed basis of underlying suit); <a href="https://scholar.google.com/scholar_case?case=4906350638737718418&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Texas Black Iron,</i> 527 S.W.3d at 587</a> (affirming injunction where particular drilling equipment sought to be enjoined was basis of contract dispute); <a href="https://scholar.google.com/scholar_case?case=2668378372054611501&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Khaledi v. H.K. Glob. Trading, Ltd.,</i> 126 S.W.3d 273, 278-79 (Tex. App.-San Antonio 2003, no pet.)</a> (affirming injunction where party seeking injunction has security interest in asset sought to be enjoined).</div>
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We echo the reasoning of one of our sister courts: "If we were to uphold the injunction in this case, `it is difficult to see why a plaintiff in any action for a personal judgment in tort or contract may not, also, apply to the chancellor for a so-called injunction sequestrating his opponent's assets pending recovery and satisfaction of a judgment in such a law action. No relief of this character has been thought justified in the long history of equity jurisprudence.'" <a href="https://scholar.google.com/scholar_case?case=11274010120371998798&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Nowak,</i> 898 S.W.2d at 11</a> (quoting <a href="https://scholar.google.com/scholar_case?case=5975635771128534643&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>De Beers Consol. Mines v. United States,</i> 325 U.S. 212, 222-23 (1945)</a>). Furthermore, as another of our sister courts concluded, "we cannot agree that a plaintiff need show probable right [of recovery] on <i>any</i> cause of action to obtain injunctive relief regarding a defendant's assets . . . . If this were the case, injunctions would usurp the carefully constructed statutes concerning garnishment, attachment, receivership, etc." <a href="https://scholar.google.com/scholar_case?case=16823708495747591124&q=03-18-00428-CV&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Alliance Royalties, LLC v. Boothe,</i> 313 S.W.3d 493, 497 (Tex. App.-Dallas 2010, no pet.)</a>.</div>
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CONCLUSION</h2>
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We reverse the trial court's order, dissolve the temporary injunction, and remand the cause to the trial court for further proceedings consistent with this opinion. We deny Brown's request to order that Coffee Traders's bond securing the temporary injunction be forfeited to her.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=16226780230136278451&q=03-18-00428-CV&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[1]" name="r[1]" style="color: #660099;">[1]</a> </sup></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=16226780230136278451&q=03-18-00428-CV&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[1]" name="[1]" style="color: #660099; text-decoration: underline;">[1]</a> Brown does not support her request with any authority indicating that this Court has jurisdiction to order bond forfeiture under these circumstances and, accordingly, we deny her request. </div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-39721621309174212302018-11-16T10:24:00.001-06:002018-11-16T10:37:30.298-06:00SCOTX applies discovery rule to breach of right of first refusal regarding conveyance of mineral interest <div style="text-align: center;">
<a href="http://www.txcourts.gov/media/1442728/170093.pdf">Carl M. Archer Trust No. Three v. Tregellas</a>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0093&coa=cossup">17-0093</a> (Tex. Nov. 11, 2018) </div>
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Texas Supreme Court applies discovery rule to breach of right of first refusal regarding conveyance of mineral interest, reversing intermediate court of appeal's judgment; limits holding to the particular breach at issue in the case: conveyance with no notice of the intent to sell or the existence of an offer<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://4.bp.blogspot.com/-a67PgfOvNB0/W-7tuf0D9mI/AAAAAAAAObQ/-xqZewvQy5wFJkibOh7Ysa06fomZJfISgCLcBGAs/s1600/Tex%2Bopinion%2B-%2BCarl%2BM.%2BArcher%2BTrust%2BNo.%2BThree%2Bv.%2BTregellas%2BNo.%2B17-0093%2B%2528Tex.%2BNov.%2B11%252C%2B2018%2529.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Carl M. Archer Trust No. Three v. Tregellas No. 17-0093 (Tex. Nov. 11, 2018)" border="0" data-original-height="921" data-original-width="888" height="400" src="https://4.bp.blogspot.com/-a67PgfOvNB0/W-7tuf0D9mI/AAAAAAAAObQ/-xqZewvQy5wFJkibOh7Ysa06fomZJfISgCLcBGAs/s400/Tex%2Bopinion%2B-%2BCarl%2BM.%2BArcher%2BTrust%2BNo.%2BThree%2Bv.%2BTregellas%2BNo.%2B17-0093%2B%2528Tex.%2BNov.%2B11%252C%2B2018%2529.JPG" title="Carl M. Archer Trust No. Three v. Tregellas No. 17-0093 (Tex. Nov. 11, 2018)" width="385" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><a href="http://www.txcourts.gov/media/1442728/170093.pdf">Carl M. Archer Trust No. Three v. Tregellas No. 17-0093 (Tex. Nov. 11, 2018)</a></td></tr>
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CARL M. ARCHER TRUST NO. THREE, MARY FRANCES G. ARCHER TRUST NO. THREE, AND MARY ARCHER DIXON AND CARLA ARCHER JOHNSON, TRUSTEES v. RONALD RALPH TREGELLAS AND DONNITA TREGELLAS (Tex. Nov. 11, 2018) (appeal from Hansford County; 7th Court of Appeals District (07-14-00421-CV, 507 SW3d 423, 12-20-16) </div>
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IN THE SUPREME COURT OF TEXAS</div>
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No. 17-0093</div>
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CARL M. ARCHER TRUST NO. THREE, MARY FRANCES G. ARCHER TRUST NO.</div>
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THREE, AND MARY ARCHER DIXON AND CARLA ARCHER JOHNSON, TRUSTEES,</div>
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PETITIONERS,</div>
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v.</div>
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RONALD RALPH TREGELLAS AND DONNITA TREGELLAS, RESPONDENTS</div>
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ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS</div>
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~ consolidated for oral argument with ~</div>
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No. 17-0094</div>
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CARL M. ARCHER TRUST NO. THREE, MARY FRANCES G. ARCHER TRUST NO.</div>
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THREE, AND MARY ARCHER DIXON AND CARLA ARCHER JOHNSON, TRUSTEES,</div>
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PETITIONERS,</div>
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v.</div>
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RONALD RALPH TREGELLAS AND DONNITA TREGELLAS, RESPONDENTS</div>
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ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS</div>
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Argued September 13, 2018 </div>
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<span style="font-size: x-small;">JUSTICE LEHRMANN delivered the opinion of the Court.</span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="font-size: x-small;">This case concerns whether the statute of limitations bars a claim for breach of a recorded</span></div>
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<span style="font-size: x-small;">right of first refusal to purchase a mineral interest. The grantors of the right conveyed the mineral</span></div>
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<span style="font-size: x-small;">interest to a third party without notifying the holders. More than four years later, the rightholders</span></div>
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<span style="font-size: x-small;">learned of the conveyance and sued the third party for breach, seeking specific performance. The</span></div>
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<span style="font-size: x-small;">trial court rendered judgment for the holders, but the court of appeals reversed, holding that the</span></div>
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<span style="font-size: x-small;">statute of limitations bars the claim. Specifically, the court of appeals held that the rightholders’</span></div>
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<span style="font-size: x-small;">cause of action accrued when the grantors conveyed the property without notice and that the</span></div>
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<span style="font-size: x-small;">discovery rule does not apply to defer accrual. We agree with the court of appeals’ first conclusion</span></div>
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<span style="font-size: x-small;">but disagree with the second. Accordingly, we reverse the court of appeals’ judgment in part and</span></div>
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<span style="font-size: x-small;">reinstate the trial court’s judgment.</span></div>
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<span style="font-size: x-small;"><br /></span></div>
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<span style="background-color: white;"><span style="color: #3d85c6; font-size: x-small;">[...] </span></span></div>
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<div>
<span style="font-size: x-small;">2. Discovery Rule</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">The discovery rule is a “limited exception” to the general rule that a cause of action accrues</span></div>
<div>
<span style="font-size: x-small;">when a legal injury is incurred. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 66 (Tex. 2011).</span></div>
<div>
<span style="font-size: x-small;">When applicable, the rule defers accrual until the plaintiff knew or should have known of the facts</span></div>
<div>
<span style="font-size: x-small;">giving rise to the cause of action. S.V., 933 S.W.2d at 4. We apply the discovery rule when the</span></div>
<div>
<span style="font-size: x-small;">nature of the injury is inherently undiscoverable and the evidence of injury is objectively verifiable.</span></div>
<div>
<span style="font-size: x-small;">Id. at 6. These two elements attempt to strike a balance between the policy underlying statutes of</span></div>
<div>
<span style="font-size: x-small;">limitations (barring stale claims) and the objective of avoiding an unjust result (barring claims that</span></div>
<div>
<span style="font-size: x-small;">could not be brought within the limitations period). Id. at 3, 6. The parties do not dispute that the</span></div>
<div>
<span style="font-size: x-small;">injury here is objectively verifiable; in contention is discoverability.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">An injury is inherently undiscoverable when it is “unlikely to be discovered within the</span></div>
<div>
<span style="font-size: x-small;">prescribed limitations period despite due diligence.” Via Net v. TIG Ins. Co., 211 S.W.3d 310,</span></div>
<div>
<span style="font-size: x-small;">313–14 (Tex. 2006) (quoting Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex.</span></div>
<div>
<span style="font-size: x-small;">2001)). The determination of whether an injury is inherently undiscoverable is made on a</span></div>
<div>
<span style="font-size: x-small;">categorical basis rather than on the facts of the individual case. HECI Expl. Co. v. Neel, 982 </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 13</span></div>
</div>
<div>
<span style="font-size: x-small;">S.W.2d 881, 886 (Tex. 1998). Here, therefore, we look not to whether Trustees in particular could</span></div>
<div>
<span style="font-size: x-small;">have discovered their injury with diligence, but whether Trustees’ injury was “the type of injury</span></div>
<div>
<span style="font-size: x-small;">that could be discovered through the exercise of reasonable diligence.” BP Am. Prod. Co., 342</span></div>
<div>
<span style="font-size: x-small;">S.W.3d at 66.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">The court of appeals held that Trustees’ injury was not inherently undiscoverable. 507</span></div>
<div>
<span style="font-size: x-small;">S.W.3d at 433. It noted that a conveyance of real property, including one made in violation of a</span></div>
<div>
<span style="font-size: x-small;">right of first refusal, is likely to be reflected in a publicly recorded instrument and that knowledge</span></div>
<div>
<span style="font-size: x-small;">of the conveyance may also be gleaned from “other public sources like tax rolls and from</span></div>
<div>
<span style="font-size: x-small;">commercial sources like abstractors.” Id. The court thus concluded that the holder of a firstrefusal</span></div>
<div>
<span style="font-size: x-small;">right exercising reasonable diligence to protect its interest (as contracting parties must do)</span></div>
<div>
<span style="font-size: x-small;">would have discovered the conveyance. See id. And the court of appeals rejected Trustees’</span></div>
<div>
<span style="font-size: x-small;">argument that ROFR holders are akin to property owners who have no duty to routinely search</span></div>
<div>
<span style="font-size: x-small;">public records for documents impugning their title; instead, it concluded that an ROFR holder has</span></div>
<div>
<span style="font-size: x-small;">a mere contractual right to purchase property on the occurrence of certain events. Id. at 433–34.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">We have held that the discovery rule applies in certain circumstances even though the</span></div>
<div>
<span style="font-size: x-small;">injury could have been gleaned from reviewing publicly available information. For example, in</span></div>
<div>
<span style="font-size: x-small;">Kelley v. Rinkle, we held that the rule delayed accrual of a libel action based on the submission of</span></div>
<div>
<span style="font-size: x-small;">a false credit report to a reporting agency. 532 S.W.2d 947, 949 (Tex. 1976). We explained that</span></div>
<div>
<span style="font-size: x-small;">a “person will not ordinarily have any reason to suspect that he has been defamed by the</span></div>
<div>
<span style="font-size: x-small;">publication of a false credit report to a credit agency until he makes application for credit to a</span></div>
<div>
<span style="font-size: x-small;">concern which avails itself of the information furnished by the credit agency.” Id. In turn, we</span></div>
<div>
<span style="font-size: x-small;">concluded that applying the general accrual-at-injury rule would enhance the potential for abuse </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 14</span></div>
</div>
<div>
<span style="font-size: x-small;">by wrongdoers and that the policy considerations weighed in favor of deferring accrual until the</span></div>
<div>
<span style="font-size: x-small;">person defamed learns of, or by reasonable diligence should have learned of, the existence of the</span></div>
<div>
<span style="font-size: x-small;">credit report. Id.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">Using similar reasoning, courts have applied the discovery rule to a property owner’s</span></div>
<div>
<span style="font-size: x-small;">fraudulent-lien claims despite the lien’s filing in the property records. E.g., Vanderbilt Mortg. &</span></div>
<div>
<span style="font-size: x-small;">Fin., Inc. v. Flores, 692 F.3d 358, 369–70 (5th Cir. 2012) (applying Texas law). Such an injury is</span></div>
<div>
<span style="font-size: x-small;">nevertheless inherently undiscoverable where the property owner has “no reason . . . to believe</span></div>
<div>
<span style="font-size: x-small;">that any adverse claim has been made on his property, and no reason to be checking regularly to</span></div>
<div>
<span style="font-size: x-small;">see whether such a filing has been made.” Id. at 368. This is consistent with the well-settled</span></div>
<div>
<span style="font-size: x-small;">principle that one who “already owns the land . . . is not required to search the records every</span></div>
<div>
<span style="font-size: x-small;">morning in order to ascertain if something has happened that affects his interests or deprives him</span></div>
<div>
<span style="font-size: x-small;">of his title.” Cox v. Clay, 237 S.W.2d 798, 804 (Tex. Civ. App.—Amarillo 1950, writ ref’d n.r.e.);</span></div>
<div>
<span style="font-size: x-small;">cf. Leonard v. Benford Lumber Co., 216 S.W. 382, 384 (Tex. 1919) (noting that “registration of</span></div>
<div>
<span style="font-size: x-small;">an instrument carries notice of its contents only to those bound to search for it, among whom are</span></div>
<div>
<span style="font-size: x-small;">subsequent purchasers”) (emphasis added).</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">On the other hand, we have held that the discovery rule does not apply to royalty owners’</span></div>
<div>
<span style="font-size: x-small;">claims of underpayment of royalties where “[r]eadily accessible and publicly available</span></div>
<div>
<span style="font-size: x-small;">information” would have revealed the underpayments. Shell Oil Co. v. Ross, 356 S.W.3d 924,</span></div>
<div>
<span style="font-size: x-small;">929–30 (Tex. 2011); BP Am. Prod. Co., 342 S.W.3d at 66–67. We have rejected royalty owners’</span></div>
<div>
<span style="font-size: x-small;">arguments that “due diligence did not require that they verify information or payments received</span></div>
<div>
<span style="font-size: x-small;">from their lessees,” confirming that they must “exercise due diligence in enforcing their</span></div>
<div>
<span style="font-size: x-small;">contractual rights . . . within the statutory limitations period.” Via Net, 211 S.W.3d at 314 </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 15</span></div>
</div>
<div>
<span style="font-size: x-small;">(discussing HECI Expl. Co., 982 S.W.2d at 887, and Wagner & Brown, 58 S.W.3d at 737) (internal</span></div>
<div>
<span style="font-size: x-small;">quotations omitted). And in Via Net, we recognized that application of the discovery rule to</span></div>
<div>
<span style="font-size: x-small;">contract claims “should be rare, as diligent contracting parties should generally discover any</span></div>
<div>
<span style="font-size: x-small;">breach” during the limitations period. Id. at 315.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">The Tregellases argue that holders of first-refusal rights resemble royalty owners with a</span></div>
<div>
<span style="font-size: x-small;">duty to verify a lessee’s contractual compliance, while Trustees compare such rightholders to</span></div>
<div>
<span style="font-size: x-small;">property owners with no duty to continually confirm that their title is not being unlawfully</span></div>
<div>
<span style="font-size: x-small;">impugned. As the Tregellases note, a right of first refusal does not itself convey title to its holder.</span></div>
<div>
<span style="font-size: x-small;">But we have described the right as a property interest that “runs with the land itself and thus . . . is</span></div>
<div>
<span style="font-size: x-small;">not a collateral or personal contract between the parties.” Stone v. Tigner, 165 S.W.2d 124, 127</span></div>
<div>
<span style="font-size: x-small;">(Tex. App.—Galveston 1942, writ ref’d). Further, as discussed, one who purchases property with</span></div>
<div>
<span style="font-size: x-small;">actual or constructive notice of a first-refusal right does so subject to that right. Jarvis, 400 S.W.3d</span></div>
<div>
<span style="font-size: x-small;">at 652–53. Considering the nature of the first-refusal right, and balancing the appropriate policy</span></div>
<div>
<span style="font-size: x-small;">considerations, we conclude that the discovery rule applies.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">A right of first refusal has been described as “essentially a dormant option.” A.G.E., 105</span></div>
<div>
<span style="font-size: x-small;">S.W.3d at 673. The rightholder has no right to compel or prevent a sale per se; rather, as explained,</span></div>
<div>
<span style="font-size: x-small;">he has the “right to be offered the property at a fixed price or at a price offered by a bona fide</span></div>
<div>
<span style="font-size: x-small;">purchaser if and when the owner decides to sell.” Abraham Inv. Co., 968 S.W.2d at 525 (emphasis</span></div>
<div>
<span style="font-size: x-small;">added). Only when the grantor communicates her intention to sell and discloses the offer does the</span></div>
<div>
<span style="font-size: x-small;">holder have a duty to act by electing to accept or reject the offer. A.G.E., 105 S.W.3d at 673. In</span></div>
<div>
<span style="font-size: x-small;">accordance with this principle, the ROFR in this case required Trustees to accept or reject a bona </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 16</span></div>
</div>
<div>
<span style="font-size: x-small;">fide offer to purchase the Farbers’ mineral interest no later than “sixty (60) days after receipt of</span></div>
<div>
<span style="font-size: x-small;">said offer.”</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">In light of the grantor’s duty to provide notice of an offer, the corresponding absence of</span></div>
<div>
<span style="font-size: x-small;">the rightholder’s duty to act before receipt of said notice, and the fact that a purchaser takes</span></div>
<div>
<span style="font-size: x-small;">property subject to a recorded first-refusal right, we agree with Trustees that a rightholder who has</span></div>
<div>
<span style="font-size: x-small;">been given no notice of the grantor’s intent to sell or the existence of a third-party offer generally</span></div>
<div>
<span style="font-size: x-small;">has no reason to believe that his interest may have been impaired. In turn, we cannot conclude</span></div>
<div>
<span style="font-size: x-small;">that such a rightholder in the exercise of reasonable diligence would continually monitor public</span></div>
<div>
<span style="font-size: x-small;">records for evidence of such an impairment. This is in stark contrast to a rightholder who, for</span></div>
<div>
<span style="font-size: x-small;">example, learns of the existence of a third-party offer but is unable, despite a reasonable</span></div>
<div>
<span style="font-size: x-small;">investigation, to clarify the offer’s specific terms. See Comeaux v. Suderman, 93 S.W.3d 215, 221</span></div>
<div>
<span style="font-size: x-small;">(Tex. App.—Houston [14th Dist.] 2002, no pet.) (noting that a grantor must make reasonable</span></div>
<div>
<span style="font-size: x-small;">disclosure of an offer’s terms, while a holder must undertake a reasonable investigation of any</span></div>
<div>
<span style="font-size: x-small;">terms that are unclear). Under those circumstances, the holder is given some indication the grantor</span></div>
<div>
<span style="font-size: x-small;">intends to convey the property and thus has reason to monitor whether that has occurred.</span></div>
<div>
<span style="font-size: x-small;">We therefore hold that a grantor’s conveyance of property in breach of a right of first</span></div>
<div>
<span style="font-size: x-small;">refusal, where the rightholder is given no notice of the grantor’s intent to sell or the purchase offer,</span></div>
<div>
<span style="font-size: x-small;">is inherently undiscoverable and that the discovery rule applies to defer accrual of the holder’s</span></div>
<div>
<span style="font-size: x-small;">cause of action until he knew or should have known of the injury.10 In this instance, the opposing</span></div>
<div>
<span style="font-size: x-small;">policies at play—on the one hand, preventing stale claims and on the other, discouraging deceptive</span></div>
<div>
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">10 We limit our holding to this particular breach—conveyance with no notice of the intent to sell or the existence of an offer—of this particular type of right. </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 17</span></div>
</div>
<div>
<span style="font-size: x-small;">conduct and ensuring claims are not barred before a party even knows he is injured—weigh in</span></div>
<div>
<span style="font-size: x-small;">favor of applying the discovery rule.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">Here, the trial court found that Trustees did not know of their injury, nor in the exercise of</span></div>
<div>
<span style="font-size: x-small;">reasonable diligence should they have known, until May 4, 2011. Other than their general</span></div>
<div>
<span style="font-size: x-small;">arguments regarding the nature of Trustees’ injury, which we have rejected, the Tregellases do not</span></div>
<div>
<span style="font-size: x-small;">challenge this finding. That is, the Tregellases point to no evidence that purportedly would or</span></div>
<div>
<span style="font-size: x-small;">should have put Trustees on notice before May 2011 that the Farbers had (or even may have)</span></div>
<div>
<span style="font-size: x-small;">conveyed the burdened mineral interest. Therefore, Trustees sued well within four years of the</span></div>
<div>
<span style="font-size: x-small;">date the cause of action accrued, and the statute of limitations does not bar their claim.</span><br />
<span style="font-size: x-small;"><br /></span></div>
<div>
<div style="text-align: center;">
<span style="color: #3d85c6; font-size: x-small;">[...]</span></div>
</div>
<div>
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">III. Conclusion</span></div>
<div>
<span style="font-size: x-small;"><br /></span></div>
<div>
<span style="font-size: x-small;">The court of appeals erred in reversing the portion of the trial court’s judgment granting</span></div>
<div>
<span style="font-size: x-small;">Trustees specific performance of the ROFR with respect to the Farbers’ conveyed mineral interest.</span></div>
<div>
<span style="font-size: x-small;">Consequently, the court of appeals also erred in reversing the trial court’s award of attorney’s fees.</span></div>
<div>
<span style="font-size: x-small;">We therefore reverse the court of appeals’ judgment in part in Cause No. 17-0993, reverse the</span></div>
<div>
<span style="font-size: x-small;">court’s judgment in Cause No. 17-0994, and reinstate the trial court’s judgment. </span></div>
<div>
<div style="text-align: center;">
<span style="font-size: x-small;">Page 18</span></div>
</div>
<div>
<span style="font-size: x-small;">________________________________</span></div>
<div>
Debra H. Lehrmann</div>
<div>
Justice</div>
<div>
OPINION DELIVERED: November 16, 2018<br />
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<br /></div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-53885101959360755322018-11-16T08:45:00.001-06:002018-11-16T10:37:05.636-06:00So-called common-law marriage in Texas is actually governed by statute: the Texas Family Code. How is it proven? <div style="text-align: center;">
<b><span style="color: #cc0000;">ELEMENTS OF INFORMAL MARRIAGE IN TEXAS </span></b></div>
<div style="text-align: center;">
<b><span style="color: #cc0000;">AND VOIDNESS ISSUE WHEN ONE WAS STILL MARRIED TO SOMEONE ELSE </span></b></div>
<div style="text-align: center;">
<br /></div>
In Texas, a valid common law marriage consists of three elements: (1) a present agreement to be married; (2) living together in Texas as husband and wife after the agreement, and (3) representing to others they are married. Ballesteros v. Jones, 985 S.W.2d 485, 489 (Tex. App.-San Antonio 1998, pet. denied); see TEX. FAM. CODE ANN. § 2.401(a)(2) (West 2006). The statutory requirement of "representing to others that they [are] married" is the same as the common law requirement of "holding out to the public." See Small v. McMaster, 352 S.W.3d 280, 284-85 (Tex. App.-Houston [14th Dist.] 2011, pet. denied). These elements may be proved by either direct or circumstantial evidence. Russell v. Russell, 865 S.W.2d 929, 933 (Tex. 1993). "A common-law marriage does not exist until the concurrence of all three elements." Eris v. Phares, 39 S.W.3d 708, 713 (Tex. App.-Houston [1st Dist.] 2001, pet. denied); see In re J.J.F.R., No. 04-15-00751-CV, 2016 WL 3944823, at *1 (Tex. App.-San Antonio July 20, 2016, no pet.). The circumstances of each case must be determined from the facts of that case. Russell, 865 S.W.2d at 933.<br />
<br />
If an impediment to the creation of a lawful marriage exists, such as when one party is married to someone else, there can be no common law marriage, even if all elements are proven. Ballesteros, 985 S.W.2d at 490. However, an ongoing agreement to be married may be shown by the circumstantial evidence of the parties continuing to live together as husband and wife and holding themselves out to others as being married after the removal of the impediment. Id.<br />
<br />
The Texas Family Code provides that a marriage is void if it is entered into when either party has an existing marriage to another person that has not been dissolved by legal action or by the death of the other spouse. TEX. FAM. CODE ANN. § 6.202(a) (West 2006). However, a marriage that is void under section 6.202(a) becomes valid when the prior marriage is dissolved if, after the date of dissolution, the parties lived together as husband and wife and represented themselves to others as being married. Id. 6.202(b).<br />
<br />
SOURCE: San Antonio Court of Appeals, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=04-17-00318-CV&coa=coa04">04-17-00318-CV</a> - 9/19/2018 (Objection to alleged sham affidavit was not preserved for appellate review, summary judgment on no-marriage issue reversed based on fact issue regarding elements of existence of common-law marriage).<br />
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Lisa Bueno MARTINEZ, Appellant,<br />v.<br />FURMANITE AMERICA INC., Furmanite Corporation, Furmanite Louisiana LLC f/k/a Furmanite US GSG LLC, Galbraith Contracting Inc., Southcross Energy Partners GP LLC, Southcross Energy Partners LP, Southcross NGL Pipeline Ltd., Estate of Dennis Henneke and Estate of Rene Elizondo, Appellees.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=11197290118088922605&as_sdt=2&hl=en" style="color: #660099;">No. 04-17-00318-CV.</a></center>
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<b>Court of Appeals of Texas, Fourth District, San Antonio.</b></div>
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Delivered and Filed: September 19, 2018.</center>
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Appeal from the 229th Judicial District Court, Duval County, Texas, Trial Court No. DC-16-139-C, Honorable Ana Lisa Garza, Judge Presiding.</div>
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REVERSED AND REMANDED.</div>
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Sitting: Sandee Bryan Marion, Chief Justice, Karen Angelini, Justice, Irene Rios, Justice.</div>
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MEMORANDUM OPINION</h2>
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KAREN ANGELINI, Justice.</div>
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Lisa Bueno Martinez appeals from the dismissal of her wrongful death claims against Furmanite America Inc., Furmanite Corporation, Furmanite Louisiana LLC f/k/a Furmanite US GSG LLC, (collectively, Furmanite); Galbraith Contracting Inc.; Southcross Energy Partners GP LLC, Southcross Energy Partners LP, Southcross NGL Pipeline Ltd., (collectively, Southcross); the Estate of Dennis Henneke; and Rene Elizondo. Because we conclude a genuine issue of material fact exists with regard to the existence of a common law marriage, we reverse and remand.</div>
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BACKGROUND</h2>
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Lisa claims to have been the common law wife of Jesus Gonzalez Jr. (Jesse), who was employed by Galbraith and died in a work-related explosion on April 12, 2016. At the time of the explosion, Jesse was working on a pipeline at a gas processing facility near Woodsboro, Texas. Another worker, Dennis Henneke, also died in the explosion. Henneke's family members filed a wrongful death suit against Furmanite, Galbraith, Southcross, Jesse's estate, and Rene Elizondo.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Lisa intervened in the suit, bringing wrongful death claims against Furmanite, Galbraith, Southcross, the Estate of Dennis Henneke, and Rene Elizondo.</div>
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After conducting discovery, Furmanite filed a traditional motion for summary judgment arguing that, as a matter of law, Lisa was not Jesse's wife at the time of his death and, therefore, she was not entitled to sue under the Texas wrongful death statute. Attached to Furmanite's motion was: (1) Lisa's original petition in this case; (2) the certified record from a probate action involving Jesse's estate; and (3) Lisa's deposition. Galbraith and Southcross joined Furmanite's summary judgment motion.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> The record from the probate action showed that the probate court had found that Jesse was not married at the time of his death.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#[3]" name="r[3]" style="color: #660099;">[3]</a></sup> Southcross submitted additional summary judgment evidence, namely, divorce decrees showing that Lisa and Jesse were not divorced from their former spouses until 2015.</div>
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Lisa responded to the summary judgment responses, asserting that a fact issue existed as to whether she and Jesse had a common law marriage. Additionally, Lisa submitted evidence to controvert the summary judgment proof submitted by Furmanite, Galbraith, and Southcross. This evidence included orders showing that the probate court had set aside its order finding that Jesse was not married at the time of his death and had dismissed the probate action altogether.</div>
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The trial court held a hearing on the summary judgment motions. At the end of the hearing, Lisa's counsel asked the trial court if it wanted further submissions from the parties. In response, the trial court advised counsel: "If you want to submit anything else I will allow you all to do that within ten days" and "I will let both of you submit something within ten days." Lisa submitted two additional summary judgment responses with additional evidence.</div>
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The trial court granted the summary judgment motions and dismissed all of Lisa's claims with prejudice. The order granting summary judgment states it is based on "the Motions, the Response of the Intervenor, the Reply of the Furmanite Defendants, argument of all counsel, and the post-hearing additional Responses by Intervenor and Replies by the Furmanite Defendants, and on the documents on file with the Court. . . ." The trial court severed Lisa's claims from the other claims in the suit. Lisa appealed.</div>
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THE SUMMARY JUDGMENT EVIDENCE</h2>
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As a preliminary matter, we address Furmanite, Galbraith, and Southcross's arguments about the summary judgment evidence.</div>
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<i>Late-filed Responses and Evidence</i></h2>
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Lisa filed four responses to the summary judgment motions. According to Furmanite and Southcross, we may only consider the evidence attached to Lisa's first summary judgment response because Lisa's other summary judgment responses were not timely filed in the trial court.</div>
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A response to a summary judgment motion, including opposing summary judgment evidence, may be filed no later than the seventh day before the date of the summary judgment hearing, except on leave of court. <a href="https://scholar.google.com/scholar_case?case=16710603748352033897&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neimes v. Ta,</i> 985 S.W.2d 132, 138 (Tex. App.-San Antonio 1998, pet. dism'd by agreement)</a>; TEX. R. CIV. P. 166a(c). Therefore, a party may file a late response and evidence only if she obtains permission from the trial court. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16710603748352033897&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neimes,</i> 985 S.W.2d at 138</a>; TEX. R. CIV. P. 166a(c). Permission to file a late response to a summary judgment motion may be reflected in a separate order, a recital in the summary judgment, or an oral ruling contained in the reporter's record from the summary judgment hearing. <a href="https://scholar.google.com/scholar_case?case=16710603748352033897&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Neimes,</i> 985 S.W.2d at 138</a>. The record must contain an affirmative indication that the trial court permitted the late filing of the response. <i>Id.</i></div>
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Here, the record contains affirmative indications that the trial court permitted Lisa's late-filed responses. First, at the summary judgment hearing, the trial court stated it would give all parties ten additional days to file whatever they would like to file. Second, the order granting summary judgment states the trial court's ruling was based on all of Lisa's responses and the documents on file with the court. Therefore, the record affirmatively indicates that the trial court permitted Lisa's late-filed responses and evidence. We conclude Lisa's late-filed responses and evidence were permitted by the trial court and, therefore, we will consider them on appeal.</div>
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<i>Alleged "Sham Affidavit"</i></h2>
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Next, Furmanite, Galbraith, and Southcross argue that we cannot consider Lisa's supplemental affidavit in this appeal because they claim it is a "sham affidavit." When a summary judgment affidavit is executed after a witness's deposition and there is a clear contradiction on a material point without an explanation for the change, the affidavit merely creates a sham fact issue. <a href="https://scholar.google.com/scholar_case?case=7188364402857579694&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>E-Learning LLC v. AT & T Corp.,</i> 517 S.W.3d 849, 855 (Tex. App.-San Antonio 2017, no pet.)</a>. In the trial court, Furmanite objected in writing to Lisa's supplemental affidavit asserting that it was a sham affidavit. On appeal, Furmanite asserts that its sham affidavit objection "was implicitly sustained by the trial court."</div>
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Nothing in the record indicates the trial court ruled on Furmanite's sham affidavit objection. "Absent a timely objection and a ruling from the trial court, the complaint that a summary-judgment affidavit is a sham is waived for purposes of appellate review." <i>In re T.A.D.,</i> No. 14-16-00717-CV, 2017 WL 924550, at *5 (Tex. App.-Houston [14th Dist.] Mar. 7, 2017, no pet.). Furthermore, objected-to evidence is valid summary judgment proof unless an order sustaining the objection is reduced to writing, signed, and entered of record. <a href="https://scholar.google.com/scholar_case?case=7598357183174956895&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Exxon Mobil Corp. v. Rincones,</i> 520 S.W.3d 572, 583 (Tex. 2017)</a>. No such order appears in the record.</div>
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Additionally, the record indicates the trial court in fact considered Lisa's supplemental affidavit. The trial court's order granting summary judgment states, without qualification, that it is based on "the post-hearing additional [r]esponses by [i]ntervenor" and "on the documents on file with the [c]ourt."</div>
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We conclude that all the evidence Lisa submitted in opposition to the summary judgment motions, including her supplemental affidavit, is valid summary judgment proof. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1529728328269946419&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Well Solutions Inc. v. Stafford,</i> 32 S.W.3d 313, 317 (Tex. App.-San Antonio 2000, no pet.)</a> (concluding that by failing to obtain rulings on its objections to the form of summary judgment evidence, party waived objections and appellate court could consider objected-to evidence in determining if a fact issue existed). Therefore, we will consider all the evidence Lisa submitted in analyzing the issues presented in this appeal. <i>See id.</i></div>
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STANDARD OF REVIEW</h2>
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We review the granting of a summary judgment motion de novo. <a href="https://scholar.google.com/scholar_case?case=4321349621179920395&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Valence Operating Co. v. Dorsett,</i> 164 S.W.3d 656, 661 (Tex. 2005)</a>. A party moving for traditional summary judgment has the burden to submit sufficient evidence to establish on its face that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. <a href="https://scholar.google.com/scholar_case?case=7564309037738286672&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Amedisys, Inc. v. Kingwood Home Health Care, LLC,</i> 437 S.W.3d 507, 511 (Tex. 2014)</a>; TEX. R. CIV. P. 166a(c). When the movant meets this burden, the burden then shifts to the respondent to raise an issue of material fact in response to the summary judgment motion. <a href="https://scholar.google.com/scholar_case?case=7564309037738286672&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Amedisys,</i> 437 S.W.3d at 511</a>. In reviewing a trial court's summary judgment ruling, we take as true all evidence favorable to the respondent, and we indulge every reasonable inference and resolve all doubts in the respondent's favor. <a href="https://scholar.google.com/scholar_case?case=4321349621179920395&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Valence,</i>164 S.W.3d at 661</a>. "An appellate court reviewing a summary judgment must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all the evidence presented." <a href="https://scholar.google.com/scholar_case?case=17119693818026086763&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Goodyear Tire and Rubber Co. v. Mayes,</i> 236 S.W.3d 754, 755-56 (Tex. 2007)</a>.</div>
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COMMON LAW MARRIAGE</h2>
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On appeal, Lisa argues the trial court erred in granting summary judgment because (1) Furmanite, Galbraith, and Southcross did not meet their summary judgment burden to conclusively negate the existence of a common law marriage; and (2) she submitted evidence raising material fact issues as to the existence of a common law marriage. For purposes of our analysis, we will assume, without deciding, that Furmanite, Galbraith, and Southcross met their initial summary judgment burden to conclusively negate the existence of a common law marriage and that the burden shifted to Lisa to raise a material fact issue. Thus, our analysis focuses on whether Lisa raised a material fact issue as to the existence of a common law marriage.</div>
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In Texas, a valid common law marriage consists of three elements: (1) a present agreement to be married; (2) living together in Texas as husband and wife after the agreement, and (3) representing to others they are married. <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros v. Jones,</i>985 S.W.2d 485, 489 (Tex. App.-San Antonio 1998, pet. denied)</a>; <i>see</i> TEX. FAM. CODE ANN. § 2.401(a)(2) (West 2006). The statutory requirement of "representing to others that they [are] married" is the same as the common law requirement of "holding out to the public." <i>See </i><a href="https://scholar.google.com/scholar_case?case=1220243476961084731&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Small v. McMaster,</i> 352 S.W.3d 280, 284-85 (Tex. App.-Houston [14th Dist.] 2011, pet. denied)</a>. These elements may be proved by either direct or circumstantial evidence. <a href="https://scholar.google.com/scholar_case?case=16928982158555376626&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Russell v. Russell,</i> 865 S.W.2d 929, 933 (Tex. 1993)</a>. "A common-law marriage does not exist until the concurrence of all three elements." <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Eris v. Phares,</i> 39 S.W.3d 708, 713 (Tex. App.-Houston [1st Dist.] 2001, pet. denied)</a>; <i>see In re J.J.F.R.,</i> No. 04-15-00751-CV, 2016 WL 3944823, at *1 (Tex. App.-San Antonio July 20, 2016, no pet.). The circumstances of each case must be determined from the facts of that case. <a href="https://scholar.google.com/scholar_case?case=16928982158555376626&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Russell,</i> 865 S.W.2d at 933</a>.</div>
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If an impediment to the creation of a lawful marriage exists, such as when one party is married to someone else, there can be no common law marriage, even if all elements are proven. <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 490</a>. However, an ongoing agreement to be married may be shown by the circumstantial evidence of the parties continuing to live together as husband and wife and holding themselves out to others as being married after the removal of the impediment. <i>Id.</i></div>
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The Texas Family Code provides that a marriage is void if it is entered into when either party has an existing marriage to another person that has not been dissolved by legal action or by the death of the other spouse. TEX. FAM. CODE ANN. § 6.202(a) (West 2006). However, a marriage that is void under section 6.202(a) becomes valid when the prior marriage is dissolved if, after the date of dissolution, the parties lived together as husband and wife and represented themselves to others as being married. <i>Id.</i> 6.202(b).</div>
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ANALYSIS</h2>
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It is undisputed that Lisa and Jesse were both married to other individuals when their relationship began in 2011. Lisa was divorced from her former husband on April 21, 2015, and Jesse was divorced from his former wife on July 14, 2015. Thus, the final impediment to a valid common law marriage was removed on July 14, 2015, when Jesse was divorced.</div>
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In determining if a fact issue exists, Furmanite, Galbraith, and Southcross urge us to focus on the evidence concerning Lisa and Jesse's relationship after Jesse's divorce, and to disregard the evidence concerning Lisa and Jesse's relationship before Jesse's divorce. However, this approach is contrary to the approach we have taken in similar situations. <i>See In re J.J.F.R.,</i> 2016 WL 3944823, at *5-6 (considering evidence from the time period before the alleged common law husband's divorce from a prior spouse when evaluating the sufficiency of the evidence to support an agreement to be married); <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 489-90</a> (examining all the facts pertaining to the alleged common law marriage, including facts arising prior to the removal of all impediments to the marriage). Therefore, we will consider the evidence from before and after Jesse's divorce, knowing that a common law marriage could not exist until the concurrence of all three required elements and the removal of all impediments to a valid marriage. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 713</a>; <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 490</a>.</div>
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The summary judgment evidence attached to Lisa's responses included two affidavits (an original and a supplemental) in which Lisa testified about aspects of her relationship with Jesse; letters Jesse had written to Lisa; a text message in which Jesse referred to himself as "daddy" to Lisa's son; text messages from Jesse in which he referred to Lisa's son as one of his kids and "my son;" a health record in which Lisa listed Jesse as her son's "step-dad;" the divorce decrees from Lisa and Jesse's previous marriages; affidavits from neighbors, friends, and family who had observed Lisa and Jesse's relationship; photographs of the house where Lisa and Jesse allegedly lived; a photograph of Lisa, Jesse, and Lisa's son together; a photograph of Lisa and Jesse together; Jesse's identification cards; several of Jesse's paystubs; records showing that Jesse and Jesse's mother and father sometimes picked up Lisa's son from daycare; an obituary and a funeral program listing Lisa's son as Jesse's "step-son;" and Lisa's deposition testimony.</div>
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<i>Present Agreement to be Married</i></h2>
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To establish the first element of a common law marriage, an agreement to be married, the evidence must show that the parties intended to have a present, immediate, and permanent marital relationship and that they did in fact agree to be husband and wife. <i>In re J.J.F.R.,</i> 2016 WL 3944823, at *4; <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 714</a>. The testimony of one party that they agreed to be married is more than a scintilla of evidence that the two agreed to be married. <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 714</a>. Additionally, "[p]roof of cohabitation and representations to others that the couple are married may constitute circumstantial evidence of an agreement to be married." <a href="https://scholar.google.com/scholar_case?case=16928982158555376626&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Russell,</i>865 S.W.2d at 933</a>.</div>
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In her supplemental affidavit, Lisa testified she and Jesse were married to other people when they met in 2011. According to Lisa, she and Jesse were both in bad relationships and they were unhappy about it, but they were happy together and they decided to be together forever. Lisa and Jesse began referring to each other as husband and wife in 2012. However, Lisa and Jesse knew they could not be legally married to each other because they were still married to other people. Lisa and Jesse agreed that they would divorce their spouses so they would be legally married. Lisa filed for divorce on February 4, 2015, and Jesse filed for divorce on February 9, 2015. Lisa's divorce became final on April 21, 2015. Jesse's divorce became final on July 14, 2015. As far as Lisa and Jesse were concerned, they were now legally married to each other. In fact, when they walked out of the courtroom after Jesse's divorce hearing, Jesse told Lisa "now we are both divorced and really married and there is nothing [my former wife] can do about it." According to Lisa, "When the judge granted our divorces we knew we were no longer married to others, and we were married to each other."</div>
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Lisa's affidavit testimony in which she states that she and Jesse agreed to be married raises a fact issue as to whether she and Jesse agreed to be married. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 714</a>; <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 490</a> (concluding that alleged wife's testimony that she and alleged husband had entered into an agreement to be married was some evidence of the required agreement to be married).</div>
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Furmanite, Galbraith, and Southcross argue Lisa failed to raise a fact issue on this element because the evidence showing an agreement to be married must be from both parties. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17881280305650995530&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Gary v.</i> <i>Gary,</i> 490 S.W.2d 929, 932 (Tex. Civ. App.-Tyler 1973, writ ref'd n.r.e</a>.). Furmanite, Galbraith, and Southcross assert that none of the evidence presented in this case shows that Jesse agreed to be married. Contrary to these assertions, there is some evidence indicating that Jesse agreed to be married. First, Lisa stated in her affidavit that immediately after his divorce was granted, Jesse told her that they were "really married." Second, the record contains a letter Jesse wrote to Lisa in February 2015, before he was divorced from his former wife. Jesse signed the letter, "love your husband [sic]." Additionally, when Jesse sent the letter to Lisa, he added his surname to Lisa's name and addressed the envelope to "Lisa Gonzalez-Bueno." Thus, there is some evidence that Jesse agreed to be married.</div>
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Finally, the law provides that an ongoing agreement to be married may be shown by the circumstantial evidence of the parties continuing to live together as husband and wife and holding themselves out to others as being married after the removal of the impediment. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 490</a>. As will be discussed in greater detail below, some of the summary judgment evidence shows that Lisa and Jesse continued to live together as husband and wife and to hold themselves out to others as being married after both of them were divorced from their former spouses. We conclude the evidence raises a fact issue as to whether Lisa and Jesse had a present agreement to be married.</div>
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<i>Living Together in Texas as Husband and Wife</i></h2>
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Ample evidence exists to raise a fact issue as to the second element of common law marriage. In her supplemental affidavit, Lisa testified that she and Jesse started living together in 2011 and continued living together after Jesse's divorce in July 2015. Specifically, Lisa testified in her affidavit, "We continued living together as husband and wife (and a family) from after Jesse's divorce until just before his death" and "Jesse continued treating me as his wife . . . as he had before our divorces." Lisa testified that about two or three weeks before Jesse's death in April 2016, she and Jesse had had a disagreement and he had left the couple's home. Lisa further testified that Jesse left behind his clothes and important documents, such as his check stubs and his identification cards. According to Lisa's testimony, Jesse told her that he intended to return home to the family. And, while Jesse was gone, he continued to provide money to Lisa and her son. Lisa said that Jesse had left in anger and that he had done this before and had always returned home.</div>
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Cohabitation need not be continuous for a couple to enter into a common law marriage. <a href="https://scholar.google.com/scholar_case?case=1220243476961084731&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Small,</i> 352 S.W.3d at 284</a>; <i>see </i><a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Ballesteros,</i> 985 S.W.2d at 491</a>. Thus, the fact that Lisa and Jesse were not living together at the time of his death does not defeat this element of common law marriage.</div>
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Lisa also submitted multiple affidavits from friends and family members that raise a fact issue on this element. Ricardo Chapa testified that he knew Lisa and Jesse and he had seen them in the two different homes that they had shared together. Chapa further testified that Lisa and Jesse had lived together "as man and wife" for more than six months. Elma Marie Casso, a neighbor, testified that Lisa and Jesse "were living together across the street from her" at Jesse's grandfather's house. Casso had heard Jesse refer to Lisa as his wife on more than one occasion. Lisa had a son who was not Jesse's biological son. However, Casso testified that Jesse had raised Lisa's son as his son, and Jesse had always referred to Lisa's son as his son.</div>
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Additionally, Lisa Lopez testified that she had attended barbecues and parties at Lisa and Jesse's house, and it was clear to her that Lisa and Jesse "were actively living together as husband and wife." In another affidavit, Hermelinda Tanguma testified that she would sometimes live with Jesse and Lisa in their house. Tanguma testified that, based on what she saw and heard, Lisa and Jesse were living together as a married couple. Finally, Lisa's mother, Emelinda Bueno, testified that it had been her understanding that Lisa and Jesse were living together as husband and wife for the last six to seven years. We conclude the evidence raises a fact issue as to whether Lisa and Jesse lived together in Texas as husband and wife after they agreed to be married.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#[4]" name="r[4]" style="color: #660099;">[4]</a></sup></div>
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<i>Representing to Others/Holding Out</i></h2>
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The element of "representing to others that they are married" or "holding out" may be established by either word or conduct. <i>Ballestros,</i> <a href="https://scholar.google.com/scholar_case?case=10903641392650440706&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;">985 S.W.2d at 491</a>. Establishing that a couple held themselves out as husband and wife turns on whether the couple had a reputation in the community for being married. <a href="https://scholar.google.com/scholar_case?case=1220243476961084731&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Small,</i>352 S.W.3d at 285</a>. Proving a reputation for being married requires evidence that the community viewed them as married, or that the couple consistently held themselves out in the public eye. <i>Id.</i> Occasional introductions as husband and wife are not sufficient. <i>Id.</i> Further, this element requires both parties to have represented themselves as married. <i>Id.</i></div>
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Here, the summary judgment evidence includes affidavits from multiple witnesses who testified that they had heard both Jesse and Lisa refer to the other as their spouse. One witness, Chapa, testified that on more than one occasion, Jesse had told him that Lisa was his "`Mujer' which translates to wife," that Lisa would always refer to Jesse as her "man or husband." Another witness, Cano, testified that she had heard Jesse refer to Lisa as his wife on more than one occasion. Similarly, Lopez testified that she had heard Jesse refer to Lisa as his wife many times. Lisa's mother, Bueno, testified that Jesse had told her many times that he considered Lisa his wife, and he considered Lisa's son his son. Another family friend, Sarah Hernandez, also testified that she had known Jesse for five or six years and had visited the home he shared with Lisa. Hernandez had heard Jesse refer to Lisa as "his significant other, his wife[,] and `mi mujer.'" Furthermore, in her supplemental affidavit, Lisa testified that, "Especially after our divorces, the community knew us as a married couple and treated us as a married couple." Lisa further testified that she and Jesse had held parties together at their home, and they were invited to parties together.</div>
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Additionally, the evidence shows that Lisa listed Jesse as her son's "step-dad" on a health record, and that Jesse referred to Lisa's son, who was not Jesse's biological son, as his child, in text messages. <i>See Bailey v. Thompson,</i> No. 14-11-00499-CV, 2012 WL 4883219, at *11 (Tex. App.-Houston [14th Dist.] Oct. 16, 2012, no pet.) (concluding the evidence was sufficient to support "holding out" element when it included, among other things, testimony that purported husband was introduced as the child's stepfather at school events and did not object). Another witness, Chapa, testified in his affidavit that Lisa's son would refer to Jesse as his "dad," and Jesse would refer to Lisa's son as his "son." In her supplemental affidavit, Lisa explained that she would not have allowed her son to create a "permanent father/son relationship with Jesse without Jesse also forming a permanent husband/wife relationship with me." Finally, the evidence included Jesse's obituary and his funeral program, which listed Lisa's son as Jesse's step-son.</div>
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Indulging every reasonable inference and resolving all doubts in Lisa's favor, we conclude a fact issue exists about whether Lisa and Jesse represented to others that they were married. <i>See </i><a href="https://scholar.google.com/scholar_case?case=4321349621179920395&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Valence,</i> 164 S.W.3d at 661</a>.</div>
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<i>Additional Arguments Presented by Furmanite, Galbraith, and Southcross</i></h2>
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Furmanite, Galbraith, and Southcross emphasize that if Lisa and Jesse had entered into a common law marriage prior to Jesse's divorce on July 14, 2015, it would have been void. They argue that no material fact issue exists because the summary judgment evidence does not show that Lisa and Jesse satisfied each of the common law marriage elements <i>after</i> both Lisa and Jesse were divorced from their former spouses. We disagree. At a minimum, Lisa's supplemental affidavit raises a fact issue as to each of the required elements during the time period in question.</div>
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Furmanite and Southcross also argue that a material fact issue does not exist because the evidence in this case fails to show "a new matrimonial intent" after Jesse's divorce in July 2015. To support this argument, they cite to <i>Howard v. Howard,</i> which states that when</div>
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the original relationship between the parties was illicit in origin, but where there has been a change in circumstances, a subsequent common law marriage may be shown circumstantially. However, the facts must be such as to exclude the inference that the previous illicit arrangement continued and must show a new matrimonial intent.</blockquote>
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459 S.W.2d 901, 904 (Tex. Civ. App.-Houston [1st Dist.] 1970, no writ). Again, we disagree with this argument. In her supplemental affidavit, Lisa stated that immediately after Jesse's divorce hearing, Jesse told her that they were now married. Lisa also stated that immediately after Jesse's divorce hearing, she and Jesse went home and celebrated with a barbecue, and they told everyone they knew that they were now married to each other. Thus, there is some evidence indicating that Lisa and Jesse had "a new matrimonial intent" after the final impediment to the creation of a lawful marriage was removed.</div>
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Furmanite and Southcross further argue that no material fact issue exists because "every single record" in the summary judgment record—Jesse's paystubs, Jesse's Department of Public Safety records, and a Texas Department of Family and Protective Services form completed by Lisa—show that shortly after Jesse's divorce on July 14, 2015, Lisa and Jesse referred to themselves as "single" and stated that they were living at different addresses. According to Furmanite and Southcross, these records show that Lisa and Jesse were two "people living two different lives . . . in two different places." However, in determining whether a material fact issue exists, we are obligated to consider all the evidence in the summary judgment record, which in this case includes not only the above-referenced records, but also affidavit testimony indicating that Lisa and Jesse had agreed to be married, were living together in Texas as husband and wife, and were representing to others that they were married.</div>
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Finally, Galbraith and Southcross direct our attention to a social media post contained in the summary judgment record, asserting the post is detrimental to Lisa's common law marriage claim. The post, which was written on Lisa's Facebook account after Jesse's death, states:</div>
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I need for people in San Diego to stop running there mouth saying that im trying to get lawyers to try and get money out of jesses death because that is all lies thd lawyers were calling me harassing me telling me offering me money and <i>i told them i was not jesses wife</i> and [my son] was not his blood son so for them to leave me alone cause no money in the world would bring jess back and thats the only thing I want is jess back so stop blabbing u alls mouths. . . .</blockquote>
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[sic passim] (emphasis supplied). However, Lisa submitted summary judgment proof controverting the statement in her post. In her deposition and her affidavits, Lisa testified that she did not write the post and that her sister-in-law wrote the post because Lisa was tired of being contacted by lawyers after Jesse's death and wanted to be left alone.</div>
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Based on all the evidence presented, we believe reasonable and fair-minded jurors could differ in their conclusions about whether Lisa and Jesse had a common law marriage. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17119693818026086763&q=%22sham+affidavit%22&hl=en&as_sdt=4,44" style="color: #660099;"><i>Goodyear Tire,</i> 236 S.W.3d at 755-56</a>. Therefore, we conclude the summary judgment evidence raises a fact issue concerning the existence of a common law marriage.</div>
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CONCLUSION</h2>
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Because the evidence raises fact issues on each element of common law marriage, the trial court erred in granting the summary judgment motions and in dismissing Lisa's claims.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#[5]" name="r[5]" style="color: #660099;">[5]</a></sup> We, therefore, reverse the trial court's judgment and remand for proceedings consistent with this opinion.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#r[1]" name="[1]" style="color: #660099;">[1]</a> Furmanite owned the equipment involved in the explosion. Galbraith was a contractor at the site of the explosion. Rene Elizondo was employed by Galbraith. Southcross owned the pipeline and the property where the explosion occurred. Dennis Henneke was employed by Southcross.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#r[2]" name="[2]" style="color: #660099;">[2]</a> Neither the Estate of Dennis Henneke nor Elizondo filed a summary judgment motion.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#r[3]" name="[3]" style="color: #660099;">[3]</a> However, this finding was eventually set aside by the probate court.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#r[4]" name="[4]" style="color: #660099;">[4]</a> Additionally, both Furmanite and Southcross acknowledged in their summary judgment pleadings that the evidence showed that Lisa and Jesse had lived together for at least a short period after Jesse was divorced. Furmanite stated the evidence showed that Jesse had moved out of Lisa's trailer two months after his divorce, and Southcross stated the evidence showed that Lisa and Jesse had lived together for "at most" "three months after" Jesse's divorce.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=3159318507737108127&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44#r[5]" name="[5]" style="color: #660099; text-decoration: underline;">[5]</a> Lisa also argues the trial court erred in granting summary judgment in favor of the Estate of Henneke and Elizondo because they did not file or join a summary judgment motion. Having determined that it was error to grant summary judgment in favor of Furmanite, Galbraith, and Southcross, we conclude it was also error to grant summary judgment in favor of the Estate of Henneke and Elizondo.</div>
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-20330910702072195502018-11-09T11:02:00.001-06:002019-10-27T10:25:56.516-05:00Texas Theft Liability Act mandates award of attorneys fees to the prevailing party, whether plaintiff or defendant<div style="text-align: center;">
<b><span style="color: #cc0000;">STATUTORY ATTORNEY'S FEES UNDER THE TTLA </span></b></div>
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The availability of attorney's fees under a particular statute is a question of law that we review de novo. Arrow Marble, LLC v. Killion, 441 S.W.3d 702, 705 (Tex. App.-Houston [1st Dist.] 2014, no pet.). Section 134.005(b) of the TTLA provides that "[e]ach person who prevails in a suit under this chapter shall be awarded court costs and reasonable and necessary attorney's fees." TEX. CIV. PRAC. & REM. CODE ANN. § 134.005(b) (West 2011). The award of fees to a prevailing party in a TTLA action is mandatory. Arrow Marble, 441 S.W.3d at 705; see Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998) ("Statutes providing that a party `may recover,' `shall be awarded,' or `is entitled to' attorney fees are not discretionary."). The statute requires attorney's fees to be awarded to a party that successfully prosecutes or defends a TTLA claim, and an award is not dependent on a recovery of damages. See In re Corral-Lerma, 451 S.W.3d 385, 386 (Tex. 2014) (no damages recovery needed); Air Routing Int'l Corp. v. Britannia Airways, Ltd., 150 S.W.3d 682, 686 (Tex. App.-Houston [14th Dist.] 2004, no pet.) (attorney's fees to successful defendant of TTLA claim); Johns v. Ram-Forwarding, Inc., 29 S.W.3d 635, 638 (Tex. App.-Houston [1st Dist.] 2000, no pet.) (prevailing party is one who successfully prosecutes or defends an action). Further, when a plaintiff's claims are dismissed with prejudice, the defendant is the prevailing party. See Arrow Marble, LLC v. Killion, 441 S.W.3d 702, 707-708 (Tex. App.-Houston [1st Dist.] 2014, no pet.).<br>
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<b>SOURCE:</b> Chieftain Exploration Co., Inc v. Gastar Exploration Inc., No. <a href="http://search.txcourts.gov/Case.aspx?cn=10-15-00037-CV&coa=coa10">10-15-00037-CV</a> (Tex.App.- Waco, Aug. 30, 2017, pet. filed and docketed under Tex. <a href="http://no.17-1040/">No.17-1040</a>, case abated 11/9/2018 based on bankruptcy filing) (summary judgment reversed in part and remanded for award of attorney's fees under the TTLA to the prevailing defendant).<br>
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Chieftain contends Gastar was not a prevailing party because Gastar did not prove it did not commit theft of the royalties. We have already held that because Chieftain was not entitled to royalties, Gastar was not liable to Chieftain for theft. Summary judgment was granted in favor of Gastar and all of Chieftain's claims, including its claim under the TTLA, were dismissed with prejudice. Therefore, Gastar was entitled to attorney's fees, and the trial court erred in denying Gastar's request for attorney's fees.<br>
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Gastar's second issue is sustained. Because of our disposition of Gastar's second issue, we need not discuss Gastar's first issue.<br>
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CONCLUSION<br>
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Having overruled Chieftain's issues necessary to the appeal but having granted one of Gastar's issue necessary to the appeal, we reverse the trial court's Final Summary Judgment, only to the extent that it does not award attorney's fees to Gastar, and remand this appeal to the trial court for a determination of reasonable and necessary attorney's fees for Gastar's defense of Chieftain's TTLA claim. The trial court's Final Summary Judgment is affirmed in all other respects.<br>
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<b><span style="font-size: 18.0pt; mso-bidi-font-size: 14.0pt;">COURT OF
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<b>TENTH DISTRICT OF TEXAS</b></div>
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<span style="font-size: 13.0pt; line-height: 150%;">August 30, 2017<o:p></o:p></span></div>
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<span style="font-size: 13.0pt; line-height: 150%;">No. 10-15-00037-CV<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">CHIEFTAIN EXPLORATION COMPANY, INC.<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">v.<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">From the 369<sup>th</sup> District Court<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">Leon County, Texas<o:p></o:p></span></div>
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<span style="font-size: 13.0pt;">Trial Court No. NOT-13-126<o:p></o:p></span></div>
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<b><span style="font-size: 13.0pt; letter-spacing: 1.0pt; text-transform: uppercase;">JUDGMENT<o:p></o:p></span></b></div>
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<span style="font-size: 11.0pt; line-height: 150%;"> This Court has
reviewed the briefs of the parties and the record in this proceeding as
relevant to the issues raised. Because
it is the opinion of this Court that there was error, in part, in the Final
Summary Judgment of the trial court; it is the judgment of this Court that the
Final Summary Judgment signed by the trial court on July 31, 2014, is reversed
but only to the extent that attorney’s fees were not awarded to Gastar
Exploration Company, Inc., and this appeal is remanded to the trial court for further
proceedings only on the issue of attorney’s fees due to Gastar Exploration
Company, Inc. for Gastar Exploration Company, Inc.’s defense of the Texas Theft
Liability Act claim made by Chieftain Exploration Company, Inc. To the extent not expressly reversed and
remanded, the trial court’s Final Summary Judgment is affirmed. <o:p></o:p></span></div>
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<span style="font-size: 11.0pt; line-height: 150%;"> It
is further ordered that Gastar Exploration Company, Inc. and Cubic Assets,
LLC., is awarded judgment against Chieftain Exploration Company, Inc. for
Gastar Exploration Company, Inc.’s and Cubic Assets, LLC.’s appellate court costs
that were paid, if any, by Gastar Exploration Company, Inc. and Cubic Assets,
LLC.; and all unpaid appellate court costs, if any, are taxed against Chieftain
Exploration Company, Inc. <o:p></o:p></span></div>
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copy of this judgment will be certified by the Clerk of this Court and
delivered to the trial court clerk for enforcement.<o:p></o:p></span></div>
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<span style="font-size: 11.0pt;"> PER CURIAM<o:p></o:p></span></div>
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<span style="font-size: 11.0pt;"> SHARRI
ROESSLER, CLERK </span><span style="font-size: 11.0pt; mso-fareast-font-family: Calibri;"><o:p></o:p></span></div>
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___________________________<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 11.0pt; mso-fareast-font-family: Calibri;"> Nita
Whitener, Deputy Clerk</span><o:p></o:p></div>
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<br></div>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<h3 id="gsl_case_name" style="border: 0px; margin: 1em 0px; padding: 0px;">
CHIEFTAIN EXPLORATION COMPANY, INC., Appellant,<br>v.<br>GASTAR EXPLORATION INC. AND CUBIC ASSETS, LLC. Appellee.</h3>
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</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<div style="position: relative;">
<b>Court of Appeals of Texas, Tenth District, Waco.</b></div>
</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
Opinion delivered and filed August 30, 2017.</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px;">
<span style="background-color: transparent;">No.</span><span style="background-color: transparent;"> </span><a href="http://search.txcourts.gov/Case.aspx?cn=10-15-00037-CV&coa=coa10" style="background-color: transparent;">10-15-00037-CV</a><span style="background-color: transparent;"> </span></center>
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</center>
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</center>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Jess W. Mason, Christopher Grimm, Robert D. O'Conor, for Chieftain Exploration Company, Inc., Appellant.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Matthew Jensen, Barry F. Cannaday, for Cubic Assets, LLC, Appellee.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Ltd., Appellee.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Katherine A. Willyard, Cassandra M. McGarvey, Michael C. Sanders, for Gastar Exploration Texas, LP, Appellee.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Appeal from the 369th District Court, Leon County, Texas, Trial Court No. NOT-13-126.</div>
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<br></div>
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Affirmed in part; Reversed and remanded in part.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Before Chief Justice Gray, Justice Davis, and Justice Scoggins.</div>
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</div>
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MEMORANDUM OPINION</h2>
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<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
TOM GRAY, Chief Justice.</div>
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<br></div>
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Chieftain Exploration Company, Inc. appeals the trial court's summary judgment in favor of Gastar Exploration, Ltd. and Gastar Exploration Texas, L.P. (now Gastar Exploration Inc.) and Cubic Assets, LLC. Gastar also appeals the denial of its request for attorney's fees. Because the trial court did not err in granting Gastar's and Cubic's motions for summary judgment but did err in denying Gastar's request for attorney's fees, the trial court's Final Summary Judgment is reversed and remanded in part and, to the extent not expressly reversed and remanded, is affirmed.</div>
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BACKGROUND</h2>
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The Streater Gas Unit, a pooled unit, was formed in 2010 by Gastar and two other entities (Presco, Inc. and Navasota Resources, Ltd., LLP) which had executed various oil and gas leases included in the Unit. The Unit was comprised of 56 leases, covering 702.3 acres of land. These leases are listed in the Unit Designation. Tract 17, which was comprised of 56 surface acres, was included in the Unit. The Streater Well was drilled on the Unit but not on Tract 17.</div>
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<br></div>
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Title to the minerals in Tract 17, the 56 acre tract, is divided, with two parties each owning an undivided one-half of the minerals: the McBeth Family Limited Partnership and Lone Oak.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=7350754737819426781&q=10-15-00037-CV&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2017#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> An undivided ¼ nonparticipating royalty interest, now owed by Chieftain, was carved out of Lone Oak's mineral estate.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; position: relative;">
Before Chieftain acquired its NPRI, two oil and gas leases were executed, each covering the lessor's one-half of the mineral estate in the 56 acre tract: the McBeth Lease, executed by the McBeth Family Limited Partnership, and the Lone Oak Lease, executed by Lone Oak. The Lone Oak Lease covered 3,466 acres, including the 56 acre tract. The McBeth Lease covered 591.3 acres, which also included the 56 acre tract.</div>
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</div>
<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
CHIEFTAIN'S APPEAL</h2>
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Chieftain sued Gastar asserting violations of the Natural Resources Code, breach of contract, and violations of the Texas Theft Liability Act and claiming it was owed oil and gas royalties from a well drilled in a pooled unit. As a successor in interest to Gastar's rights in the Streater Unit, Cubic intervened in the suit. Each party filed competing motions for summary judgment. Gastar filed a traditional motion for partial summary judgment asserting Chieftain's claims fail as a matter of law because Chieftain is not owed any royalties. Cubic filed a traditional motion for summary judgment asserting that the terms of a Ratification and the Lone Oak Lease defeat Chieftain's claims as a matter of law. Chieftain also filed a traditional motion for partial summary judgment on its claims. The trial court granted Gastar's and Cubic's motions and denied Chieftain's motion.</div>
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</div>
<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
Summary Judgment Review</h2>
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<span style="color: #0b5394;">[omitted]</span></div>
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</div>
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Issues</h2>
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</div>
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Asserted by various issues, Chieftain's appeal centers on its desire to be paid what it alleges to be its share of royalties from the Streater Well located in the Streater Unit. We first discuss whether the Lone Oak Lease was pooled in the Streater Unit, which would entitle Chieftain to payment. If the Lease was not pooled, we then will address other reasons for payment asserted by Chieftain</div>
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</div>
<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
<i>Pooling of the Lease/Land</i></h2>
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</div>
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Oil and gas leases in general, and pooling clauses in particular, are a matter of contract. <i>Samson Expl., LLC v. T.S. Reed Props., Inc.,</i> No. 15-0886, 60 Tex. Sup. Ct. J. 1413, 2017 Tex. LEXIS 599, at *13 (June 23, 2017); <a href="https://scholar.google.com/scholar_case?case=4043177733236633085&q=10-15-00037-CV&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Wagner & Brown, Ltd. v. Sheppard,</i> 282 S.W.3d 419, 424 (Tex. 2008)</a>. A lessee's authority to pool requires the lessor's consent, which is typically furnished through a pooling provision in the mineral lease. <i>Samson,</i> at *13; <a href="https://scholar.google.com/scholar_case?case=14355899000569919236&q=10-15-00037-CV&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Se. Pipe Line Co. v. Tichacek,</i> 997 S.W.2d 166, 170 (Tex. 1999)</a>. Pooling is valid only if done "in accordance with the method and purposes specified in the lease." <i>Id.</i> A pooling agreement that does not comply with the terms of the lease is invalid and unenforceable absent the lessor's ratification. <i>See Samson,</i> at *14.</div>
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</div>
<a href="http://causeofactionelements.blogspot.com/2018/11/texas-theft-liability-act-mandates.html#more">Read more »</a>MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-64064726896416322942018-11-06T11:11:00.001-06:002018-11-07T07:34:15.564-06:00No-marriage summary judgment reversed based on evidence of fact issues on each element of informal (re)marriage under Texas law <div style="text-align: center;">
<div style="text-align: justify;">
<span style="font-size: x-small;">Tran v. Ngo, <span style="text-align: start;">No. </span><a href="http://www.search.txcourts.gov/Case.aspx?cn=01-17-00138-CV&coa=coa01" style="text-align: start;">01-17-00138-CV</a><span style="text-align: start;"> </span>(Tex.App. - Houston [1st Dist.] Aug. 30, 2018) (No-marriage summary judgment reversed on finding that Tran presented more than a scintilla of evidence for each element for proving common-law marriage and that Ngo has not disproved any of the elements as a matter of law.).</span></div>
<b><span style="color: #cc0000;"><br /></span></b>
<b><span style="color: #cc0000;">TRIAL COURT'S SUMMARY JUDGEMENT</span></b></div>
<div style="text-align: center;">
<b><span style="color: #cc0000;">REVERSED BASED ON SOME EVIDENCE ON ELEMENTS OF INFORMAL MARRIAGE </span></b></div>
<br />
Was the allegation of an informal marriage between a previously married-and-divorced couple a sham? Evidence offered for marriage was enough to require reversal of summary judgment, appellate panel concludes, and passes on opportunity to apply the <a href="https://tex-app-justices.blogspot.com/2018/04/comment-on-lujan-v-navistar-inc-tex.html">novel sham affidavit rule</a> created by the Texas Supreme Court in <a href="https://tex-app-justices.blogspot.com/2018/04/comment-on-lujan-v-navistar-inc-tex.html">Lujan v. Navistar (blog comment)</a>. Lujan v. Navistar, Inc., 555 S.W.3d 79, 2018 WL 1974473, 61 Sup. Ct. J. 982 (Apr. 27, 2018).<br />
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<h3 id="gsl_case_name" style="border: 0px; margin: 1em 0px; padding: 0px;">
BRIAN LANG TRAN, Appellant,<br />v.<br />MANDY QUYNH NGO, Appellee.</h3>
</center>
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
<a href="https://scholar.google.com/scholar?scidkt=8715515913750235543&as_sdt=2&hl=en" style="color: #660099;">No. 01-17-00138-CV.</a></center>
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<b>Court of Appeals of Texas, First District, Houston.</b></div>
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<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
Opinion issued August 30, 2018.</center>
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</center>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Kelli B. Smith, Jedediah D. Moffett, for Mandy Quynh Ngo, Appellee.</div>
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Allan A. Cease, for Brian Lang Tran, Appellant.</div>
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<br /></div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
On Appeal from the 309th District Court, Harris County, Texas, Trial Court Case No. 2015-28264.</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Panel consists of Chief Justice Radack and Justices Higley and Bland.</div>
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</div>
<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
MEMORANDUM OPINION</h2>
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</div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
LAURA CARTER HIGLEY, Justice.</div>
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<br /></div>
<div style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; position: relative;">
Brian Lang Tran filed for divorce from Mandy Quynh Ngo, alleging a common-law marriage. Ngo filed for summary judgment, arguing they had not been married. The trial court granted the motion. In two issues on appeal, Tran argues the trial court erred by granting the motion.</div>
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<br /></div>
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We reverse and remand.</div>
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</div>
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Background</h2>
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Tran and Ngo were formally married in 2000. The parties filed for divorce, and the divorce was finalized on August 15, 2005. The parties agree that, after the divorce, they operated a chiropractic clinic together. They agree that they continued to live together until at least some time in 2006. The parties also agree that they continued some sort of relationship with each other, with a child born in 2006 and another born in 2007.</div>
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<br /></div>
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The parties also agree that their relationship changed in 2012.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=466974861097660107&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Tran alleges that he moved out and that he and Ngo moved back in together in late 2013 and that their relationship continued until late 2014.</div>
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Tran filed for divorce in May 2015. Ngo filed a traditional motion for summary judgment, arguing that the evidence established as a matter of law that there was no agreement to be married, that they did not live together during the time period in question, and that they did not hold themselves out as married during that time.</div>
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For proof that there was no agreement, Ngo points to affidavits they signed in 2013 representing that they were not married, were not living together, and had not represented to others that they were married. She also points to her deposition, where she denied that they lived together, and to Tran's deposition. The excerpts from Tran's deposition focus on Tran's difficulty specifying the exact date that they agreed to be married and on his acknowledgement that he had represented he was single in certain documents. For example, Tran acknowledged that he had filed a bankruptcy petition in October 2005 representing under oath that he was divorced and not currently married.</div>
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For proof that they were not living together, Ngo points to Tran's tax filings from 2007 to 2014, identifying a different address than where Ngo lived. She also points to Tran's voter registration and driver's license, which also showed a different address from Ngo. For proof that they did not hold themselves out as married, Ngo points to the same documents that showed separate addresses for the two of them and that identified them as not married or living together.</div>
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Tran responded to the motion. He attached to the response his affidavit, the declaration of twelve other people, and cards from Ngo. He also incorporated by reference his deposition, attached to Ngo's motion. In his affidavit, Tran averred that, while he and Tran were formally married, he encountered financial trouble. He asserts that, to protect Ngo from the creditors, they agreed to divorce. He also asserts that, after they divorced, they agreed to be married to each other but to keep that a secret from his creditors. To that end, according to Tran, the two of them identified themselves as not married and as living at different addresses in formal documents. But to their friends, family and associates, Tran averred, they presented themselves as married.</div>
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Tran asserted in his affidavit that the two continued to live together even after their first divorce. He claimed that he lived with Ngo at the addresses identified as her formal address. They had two children together and shared expenses.</div>
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Tran's deposition expresses the same ideas. He testified that he covered up his marriage to Ngo in formal documents to protect his family from creditors. But he asserted that the two of them continued to live together and that they were referred to as husband and wife by their friends.</div>
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Tran's declarations are from various friends and associates. The declarants describe knowing Tran and Ngo, hearing them refer to each other as husband and wife, and believing them to be married. Many of them assert seeing the two living together. One of the declarations is from the landscaper at the house that he identified as Tran and Ngo's joint residence. Another is from the nanny that cared for Tran and Ngo's children. The nanny identified Tran and Ngo living together and referred to Tran and Ngo as each other's spouse.</div>
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Tran also attached a number of cards and letters Ngo wrote to him. One of them, dated January 29, 2010, says, "Happy anniversary to my husband" on the cover. On the inside of the card, Ngo expressed her love to Tran and wrote, "Thank you for being the husband that you thrive to be for me."</div>
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Ngo acknowledged the authenticity of this card. She also acknowledged that she sometimes wore her wedding band after she and Tran were divorced. Ngo likewise conceded that she received professional awards jointly with her husband, and that some presenters referred to her and Tran as husband and wife when dispensing these awards and she did not try to correct them. As late as 2014, the auto-insurance policy purchased by Ngo reflected that she and Tran were married.</div>
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The trial court granted Ngo's summary judgment. Later, the trial court severed that ruling from the suit affecting parent-child relationship. Tran appealed.</div>
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Standard of Review</h2>
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The summary-judgment movant must conclusively establish its right to judgment as a matter of law. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16784693170724825006&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>MMP, Ltd. v. Jones,</i> 710 S.W.2d 59, 60 (Tex. 1986)</a>. Because summary judgment is a question of law, we review a trial court's summary judgment decision de novo. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7847608500596721360&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,</i> 289 S.W.3d 844, 848 (Tex. 2009)</a>.</div>
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To prevail on a traditional summary-judgment motion asserted under Rule 166a(c), a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law. <i>See</i> TEX. R. CIV. P. 166a(c); <a href="https://scholar.google.com/scholar_case?case=14976679623482894132&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Little v. Tex. Dep't of Criminal Justice,</i> 148 S.W.3d 374, 381 (Tex. 2004)</a>. A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>City of Keller v. Wilson,</i> 168 S.W.3d 802, 816 (Tex. 2005)</a>.</div>
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A party moving for traditional summary judgment on a claim for which it does not bear the burden of proof must either disprove at least one element of the plaintiff's cause of action or plead and conclusively establish each essential element of an affirmative defense to rebut the plaintiff's cause. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7620388708769403273&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Am. Tobacco Co., Inc. v. Grinnell,</i> 951 S.W.2d 420, 425 (Tex. 1997)</a>. If the movant meets its burden, the burden then shifts to the non-movant to raise a genuine issue of material fact precluding summary judgment. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6484587282442354217&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Centeq Realty, Inc. v. Siegler,</i> 899 S.W.2d 195, 197 (Tex. 1995)</a>.</div>
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To determine whether there is a fact issue in a motion for summary judgment, we review the evidence in the light most favorable to the non-movant, crediting favorable evidence if reasonable jurors could do so, and disregarding contrary evidence unless reasonable jurors could not. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7847608500596721360&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Fielding,</i> 289 S.W.3d at 848</a>(citing <a href="https://scholar.google.com/scholar_case?case=18303564960181757665&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>City of Keller,</i> 168 S.W.3d at 827</a>). We indulge every reasonable inference and resolve any doubts in the non-movant's favor. <a href="https://scholar.google.com/scholar_case?case=5025013690388769257&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Sw. Elec. Power Co. v. Grant,</i>73 S.W.3d 211, 215 (Tex. 2002)</a>.</div>
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Evidentiary Objections</h2>
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Before we turn to Tran's challenge to the trial court's summary-judgment ruling, we address Tran's contention that Ngo waived her objections to Tran's summary-judgment evidence. Ngo made two kinds of objections to Tran's summary-judgment evidence. First, she contended that Tran sought to create a "sham" fact issue on summary judgment by contradicting without adequate explanation his own earlier affidavit and representations under oath denying any informal marriage to Ngo. </div>
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Second, she objected to the other witness declarations that Tran proffered, arguing they were conclusory. The trial court did not formally rule on these objections. Ngo argues on appeal that the trial court implicitly ruled on the objections. <i>See </i><a href="https://scholar.google.com/scholar_case?case=18146872284964551855&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Ordonez v. Solorio,</i> 480 S.W.3d 56, 63 (Tex. App.-El Paso 2015, no pet.)</a> (holding implicit ruling on objections apply when something other than mere granting of motion for summary supports implicit ruling).</div>
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For the sham affidavit objection, we do not need to decide whether the trial court implicitly sustained Ngo's sham-affidavit objection because, even if it did so, other summary-judgment evidence—as discussed below—creates genuine issues of material fact that must be resolved by a factfinder.</div>
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For the objections to the declarations, the absence of a ruling on Ngo's objection that these declarations are conclusory does not waive the argument, because a party may challenge the substance of an opposing party's summary-judgment evidence as conclusory for the first time on appeal. <i>See </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13223302946188507168&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Seim v. Allstate Tex. Lloyds,</i> No. 17-0488, 2018 WL 3189568, at *4 (Tex. June 29, 2018) (per curiam)</a>. Conclusory declarations are not competent summary-judgment proof. <i>See</i> TEX R. CIV. P. 166a(f); <a href="https://scholar.google.com/scholar_case?case=11541122740409125336&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brownlee v. Brownlee,</i> 665 S.W.2d 111, 112 (Tex. 1984)</a> (affidavits consisting of conclusions do not raise genuine issue of material fact; facts must be stated with sufficient specificity to allow perjury to be assigned to false representations).</div>
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We thus turn to the summary-judgment evidence as to informal marriage, including Ngo's objection that some of this evidence is conclusory and therefore no evidence.</div>
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Motion for Summary Judgment</h2>
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In his two issues on appeal, Tran argues the trial court erred by granting summary judgment, which found that the evidence established as a matter of law that there was no common-law marriage between him and Ngo. The elements for establishing a common-law marriage are (1) the parties agreed to be married, (2) after the agreement, the parties lived together as spouses, and (3) the parties presented themselves as married to others. TEX. FAM. CODE ANN. § 2.401(a)(2) (West 2006); <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Eris v. Phares,</i> 39 S.W.3d 708, 713 (Tex. App.-Houston [1st Dist.] 2001, pet. denied)</a>. Tran bears the burden of proof at trial for establishing these elements. <a href="https://scholar.google.com/scholar_case?case=1220243476961084731&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Small v. McMaster,</i> 352 S.W.3d 280, 282-83 (Tex. App.-Houston [14th Dist.] 2011, pet. denied)</a>. Ngo moved for summary judgment on all three elements.</div>
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As an initial matter, Ngo argued to the trial court and on appeal that there was a rebuttable presumption that the parties were not married. When a party asserting a common-law marriage brings a petition for divorce over two years after the parties separated, "it is rebuttably presumed that the parties did not enter into an agreement to be married." FAM. § 2.401(b). Ngo did not establish as a matter of law that they separated over two years before Tran filed his petition for divorce.</div>
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Tran included a declaration from the nanny for his and Ngo's children. The nanny asserted that she started working as their nanny in July 2014, that Tran and Ngo lived together at that time, and that she understood Tran and Ngo to be married. Other people asserted in declarations that they went to the house that Tran and Ngo shared and spent time with them there together. Accordingly, there is a fact issue on when Tran and Ngo finally separated. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7847608500596721360&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Fielding,</i> 289 S.W.3d at 848</a>(holding motion for summary judgment is reviewed by viewing light most favorable to non-movant). Ngo is not entitled to this presumption, then. <i>See</i> FAM. § 2.401(b).</div>
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The first element for establishing a common-law marriage is the parties agreed to be married. FAM. § 2.401(a)(2). The evidence shows Tran and Ngo filed a joint tax return as a married couple in 2011. Though Ngo filed an amended return to alter this filing status, she did so only after Tran filed for divorce. Ngo gave Tran anniversary cards in 2008 and 2010. The printed text for both cards was addressed to "my husband." In the 2010 card, Ngo handwrote a personal message to Tran thanking him for being her "husband." She also continued to wear her wedding band on occasion. This evidence is circumstantial, but an agreement to be married may be proved by circumstantial evidence. <a href="https://scholar.google.com/scholar_case?case=16928982158555376626&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Russell v. Russell,</i> 865 S.W.2d 929, 933 (Tex. 1993)</a>. Ngo's references to Tran as her husband is "stronger evidence of an agreement than such a statement by the proponent" of an informal marriage. <i>Id.</i> at 932 (internal quotations omitted). This evidence is enough to raise a genuine issue of material fact as to whether Tran and Ngo agreed to be married.</div>
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Ngo also argues there is an ambiguity on which date the parties allegedly agreed to be married. To establish a common-law marriage, Tran must show that, after the agreement was made, the parties lived together and held themselves out as married. <i>See</i> FAM. § 2.401(a)(2); <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 713</a> ("A common-law marriage does not exist until the concurrence of all three elements."). While Tran must establish a time period for the agreement to show that the other two elements followed the agreement, nothing in the law establishes that failing to prove a specific date or that proof of conflicting dates is fatal to this burden. <i>See</i>FAM. § 2.401(a)(2); <a href="https://scholar.google.com/scholar_case?case=16582320854734579276&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Eris,</i> 39 S.W.3d at 713</a>.</div>
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The second element for establishing a common-law marriage is, after they agreed to be married, the parties lived together as spouses. FAM. § 2.401(a)(2). According to Tran, they lived together up to 2012, separated in 2012, moved back in together in 2013, and separated again in 2014. <i>See </i><a href="https://scholar.google.com/scholar_case?case=1220243476961084731&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Small,</i> 352 S.W.3d at 284</a>(holding living together does not have to be continuous). Multiple affidavits from people that knew both of them acknowledge Tran and Ngo lived together during this time period. These include affidavits from their landscaper, their nanny, and friends who came over to their house to play poker with Tran.</div>
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The parties acknowledge that, during the time period in which Tran alleges they were living together, Tran and Ngo had two children. Ngo gave Tran cards expressing a strong love for Tran. One of those cards, dated January 29, 2010, says, "Happy anniversary to my husband" on the cover. On the inside of the card, Ngo wrote, "Thank you for being the husband that you thrive to be for me." Tran testified in his affidavit that they paid bills out of each other's bank accounts and credit cards. This is more than a scintilla of proof that Tran and Ngo lived together as spouses after they agreed to be married.</div>
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To establish that they did not live together, Ngo points to documents in which Tran identified his residence being different from her address. The documents include his tax return filings, his voter registration, and his driver's license. This creates a fact issue, not conclusive proof that Tran and Ngo lived in separate residences. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5025013690388769257&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Sw. Elec. Power,</i> 73 S.W.3d at 215</a> (holding reviewing courts view evidence in light most favorable to non-movant and resolve doubts in non-movant's favor).</div>
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The third element for establishing a common-law marriage is, after they agreed to be married, the parties represented to others that they were married. FAM. § 2.401(a)(2). This requirement "is synonymous with the judicial requirement of `holding out to the public.'" <a href="https://scholar.google.com/scholar_case?case=18136706487615871030&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Lee v. Lee,</i> 981 S.W.2d 903, 906 (Tex. App.-Houston [1st Dist.] 1998, no pet.)</a>. Proof of holding themselves out as married can be established by the conduct of the parties, their words, or both. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10096824197201117426&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Winfield v. Renfro,</i> 821 S.W.2d 640, 648 (Tex. App.-Houston [1st Dist.] 1991, writ denied)</a>(holding conduct of parties is relevant; acknowledging representations as spouses relevant to analysis but not required). This element can be satisfied with proof that the couple identified themselves as married to each other and "opinion and reputation testimony indicated that the couple's conduct was viewed as a representation that they were married." <a href="https://scholar.google.com/scholar_case?case=18136706487615871030&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Lee,</i> 981 S.W.2d at 906</a>.</div>
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After 2005, Tran and Ngo received awards with their names engraved on them "as a husband and wife team." As late as 2014, Ngo held herself out as Tran's wife when buying insurance. <i>See </i><a href="https://scholar.google.com/scholar_case?case=4206040952843563796&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Alonso v. Alvarez,</i> 409 S.W.3d 754, 757 (Tex. App.-San Antonio 2013, pet. denied)</a> (representations made to healthcare provider, contractor, and in passport application were some evidence of informal marriage).</div>
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Tran also offered twelve declarations of people who knew the two of them and understood they were married. Ngo correctly points out that one of the declarations claims to have known them since before they were formally married. This declaration represents that they held themselves out as married but does not state whether these representations were before or after their divorce.</div>
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She is also correct that another is conclusory. It contains a statement that the witness "always thought of Brian and Mandy as husband and wife." This is no evidence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=545221611101026645&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Mills v. Mest,</i> 94 S.W.3d 72, 75 (Tex. App.-Houston [14th Dist.] 2002, pet. denied)</a> (testimony that couple "seemed like" they were married was subjective opinion lacking evidentiary value); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=8709634451742325439&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Nichols v. Lightle,</i> 153 S.W.3d 563, 570-71 (Tex. App.-Amarillo 2004, pet. denied)</a> (affidavits paraphrasing informal-marriage statute and affidavit averring to holding out only in generic terms were conclusory).</div>
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Other witness statements were not conclusory, however. One witness, who has only known Tran and Ngo since 2014, represented that he "attended their wedding anniversary." Another stated that he "met Brian and Mandy as husband and wife" in 2010, that they "presented themselves as husband and wife," and that he saw them "living together." A third represented that he visited Tran and Ngo's home in 2013 or 2014, said they were "living together," and heard them refer "to each other as husband and wife." Similarly, a fourth witness testified that he attended a party at their Bellaire Court home around 2009, saw them "living together," and heard Ngo refer to Tran "as her husband." These declarations span several years' time after the 2005 divorce and constitute some evidence that they represented to others that they were married. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12651077022249866917&q=%22sham+affidavit%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>In re Estate of Giessel,</i> 734 S.W.2d 27, 31-32 (Tex. App.-Houston [1st Dist.] 1987, writ ref'd n.r.e</a>.) (evidence was sufficient to establish cohabitation and holding out notwithstanding substantial contrary evidence, including ostensible wife's filing of separate tax returns as single person).</div>
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Tran has presented more than a scintilla of evidence for each element for proving common-law marriage. Ngo has not disproved any of the elements as a matter of law. We sustain Tran's first issue.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=466974861097660107&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[2]" name="r[2]" style="color: #660099;">[2]</a></sup></div>
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Conclusion</h2>
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We reverse the trial court's grant of summary judgment and remand for further proceedings.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=466974861097660107&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[1]" name="[1]" style="color: #660099;">[1]</a> Ngo alleges that their romantic relationship ended. Tran alleges that they separated and agreed to date other people.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=466974861097660107&q=%22sham+affidavit%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[2]" name="[2]" style="color: #660099; text-decoration: underline;">[2]</a> Because Tran's second issue is identical to his first, we do not need to independently rule on it. <i>See</i>TEX. R. APP. P. 47.1.</div>
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-49951624910841135822018-11-05T08:41:00.001-06:002018-11-06T10:36:21.016-06:00Negligent hiring and negligent entrustment claims require proof that entrusted person committed tort Claims for negligent hiring or retention and negligent entrustment require proof that the employee or entrusted person committed an underlying tort. See Wansey v. Hole, 379 S.W.3d 246, 247-48 (Tex. 2012) ("To prevail on a claim for negligent hiring or supervision, the plaintiff is required to establish not only that the employer was negligent in hiring or supervising the employee, but also that the employee committed an actionable tort against the plaintiff. . . . We have explicitly established this requirement in negligent entrustment cases, which are factually similar to negligent hiring claims." (quotation and citations omitted)); see also Shupe v. Lingafelter, 192 S.W.3d 577, 580 (Tex. 2006) ("On a negligent entrustment theory, a plaintiff must prove, among other elements, that the driver was negligent on the occasion in question and that the driver's negligence proximately caused the accident."); see also Jackson v. NAACP Houston Branch,No. 14-15-00507-CV, 2016 WL 4922453, at *11-12 (Tex. App.-Houston [14th Dist.] Sept. 15, 2016, pet. denied) (mem. op.) (affirming summary judgment for the defendant-employer because there was no evidence that the employee had committed a "separate actionable tort to support the negligent-retention claim").<br />
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KENNETH ALFORD AND DENISE ALFORD v. GERALD SINGLETON AND TARGA RESOURCES LLC, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=14-17-00504-CV&coa=coa14">14-17-00504-CV</a> (Tex.App. - Houston [14th Dist.] Oct. 30, 2018)<br />
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KENNETH ALFORD AND DENISE ALFORD, Appellants,<br />v.<br />GERALD SINGLETON AND TARGA RESOURCES LLC, Appellees.</h3>
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<span style="color: black; font-family: "times new roman"; font-size: small; text-align: start;">No. </span><a href="http://www.search.txcourts.gov/Case.aspx?cn=14-17-00504-CV&coa=coa14" style="font-family: "Times New Roman"; font-size: medium; text-align: start;">14-17-00504-CV</a><span style="color: black; font-family: "times new roman"; font-size: small; text-align: start;"> </span></center>
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<b>Court of Appeals of Texas, Fourteenth District, Houston.</b></div>
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Memorandum Opinion filed October 30, 2018.</center>
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Jon R. Hanna, Frederick Dunbar, for Kenneth Alford and Denise Alford, Appellant.</div>
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Jarod D. Bonine, Daniel Francis Patton, for Gerald Singleton, Appellee.</div>
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On Appeal from the 127th District Court, Harris County, Texas, Trial Court Cause No. 2015-20209.</div>
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Affirmed.<br />
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Panel consists of Justices Jamison, Wise, and Jewell.</div>
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MEMORANDUM OPINION</h2>
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KEN WISE, Justice.</div>
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Appellants Kenneth and Denise Alford appeal from a take-nothing judgment following (1) a jury trial on their negligence claim against appellee Gerald Singleton and (2) the trial judge's grant of summary judgment for Singleton's employer, appellee Targa Resources LLC.<br />
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One morning before dawn, Kenneth was driving on the busiest highway in Breckenridge, Texas, when debris spilled from the back of his flatbed truck onto the highway. Kenneth parked his truck in a nearby parking lot and went into the middle of the highway to pick up the debris. As Singleton turned onto the highway from a cross street at a slow speed, Singleton struck Kenneth.</div>
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The Alfords sued Singleton and Targa. The trial court granted a summary judgment on all of the Alfords' claims against Targa, and the issue of Kenneth's and Singleton's negligence was submitted to the jury. The jury found that no negligence of Singleton proximately caused the occurrence, and Kenneth's negligence proximately caused the occurrence. The trial court signed a take-nothing judgment.<br />
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The Alfords challenge the trial court's judgment in three issues, contending that (1) the trial court erred by giving the jury a negligence per se instruction as to Kenneth's conduct, (2) the jury's finding that Singleton was not negligent is against the great weight and preponderance of the evidence, and (3) the trial court erred by granting a summary judgment to Targa on claims that the Alfords added in amended pleadings but that were not addressed in the motion. We affirm.</div>
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I. JURY CHARGE</h2>
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In their first issue, the Alfords contend that the trial court erred by "giving the jury a negligence per se instruction as to [Kenneth]'s conduct." In the charge, the trial court defined "negligence," "ordinary care," and "proximate cause." Then, the court included the following Jury Question No. 1:</div>
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Did the negligence, if any, of the persons named below proximately cause the occurrence in question?</blockquote>
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You are instructed that the law requires a vehicle bed carrying a load of refuse to be enclosed on all four sides[.]</blockquote>
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Answer "Yes" or "No" for each of the following</blockquote>
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a. Gerald Singleton</blockquote>
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b. Kenneth Alford</blockquote>
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The jury answered unanimously "no" for Singleton and "yes" for Alford.<br />
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Kenneth complains about the trial court's inclusion of the instruction regarding a vehicle carrying a load of refuse to be enclosed on all four sides. It was undisputed at trial that Kenneth's truck did not have a rear tailgate. There was no evidence that Singleton's truck had a similar deficiency. Kenneth contends that the trial court's error probably caused the rendition of an improper judgment under Rule 44.1(a) of the Texas Rules of Appellate Procedure. <i>See</i> Tex. R. App. P. 44.1(a).<br />
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Assuming without deciding that the trial court erred by including this instruction, we cannot conclude that the alleged error probably caused the rendition of an improper judgment. To determine whether an instruction probably caused an improper judgment, we examine the entire record. <a href="https://scholar.google.com/scholar_case?case=11086001625687053971&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Bed, Bath & Beyond, Inc. v. Urista,</i> 211 S.W.3d 753, 757 (Tex. 2006)</a>.<br />
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In this case, the trial court rendered a take-nothing judgment in Singleton's favor because of the jury's "no" answer to Singleton's negligence, not because of the jury's "yes" answer to Kenneth's negligence. The trial court's judgment would have been the same even if the jury answered "no" as to Kenneth's negligence. Even if the contested instruction caused the jury to answer "yes" for Kenneth's negligence, the instruction had no impact on the trial court's judgment. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=7019070699808102091&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Thota v. Young,</i> 366 S.W.3d 678, 683-84, 694 (Tex. 2012)</a> (holding that the trial court's inclusion of a question on the plaintiff's contributory negligence was harmless because the jury answered "no" regarding the defendant's negligence). Once the jury answered "no" to Singleton's negligence, the "yes" answer for Kenneth's negligence became immaterial. <i>See id.</i> at 694 ("Once the jury answered `No' to whether any negligence of [the defendant] proximately caused [the plaintiff's] injury, [the defendant] was exonerated, and neither a `Yes' nor a `No' answer as to [the plaintiff's] contributory negligence could alter the verdict.").<br />
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Moreover, in the charge, the jurors were instructed that they could find more than one party negligent; therefore, they were aware that a finding that Kenneth was negligent in not securing debris on all four sides would not preclude a finding that Singleton was also negligent. In <i>Thota,</i> for example, the Supreme Court of Texas reasoned that any error in the submission of the plaintiff's negligence was harmless in part because "the jury was well aware that its findings as to [the parties'] negligence were separate." <i>Id.</i> The court looked to the entire jury charge and noted that (1) each party was listed separately with separate blanks for the jury's answers; (2) the proximate cause definition informed the jury that there could be more than one proximate cause of an event; and (3) the apportionment question was conditioned on the jury answering "yes" as to liability for both the plaintiff and the defendant. <i>See id.</i> at 683, 694.<br />
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Likewise, the jury charge in this case included (1) separate blanks for Kenneth's and Singleton's negligence, (2) a definition of proximate cause informing the jury that there could be more than one proximate cause of an event, and (3) an instruction that for the jury to answer the apportionment question, the jury first would need to answer "yes" for more than one of the parties listed in Jury Question No. 1.<br />
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Considering the entire record, we cannot conclude that the trial court's inclusion of the instruction pertaining to Kenneth's negligence probably caused the rendition of an improper take-nothing judgment. The Alfords' first issue is overruled.</div>
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II. FACTUAL SUFFICIENCY</h2>
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In their second issue, the Alfords contend that the jury's "no" answer regarding Singleton's negligence is against the great weight and preponderance of the evidence.<br />
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When, as here, a party attacks the factual sufficiency of an adverse finding on an issue for which the party has the burden of proof, the party must demonstrate that the adverse finding is against the great weight and preponderance of the evidence. <a href="https://scholar.google.com/scholar_case?case=3502312959828367997&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Dow Chem. Co. v. Francis,</i> 46 S.W.3d 237, 242 (Tex. 2001)</a>. We must consider and weigh all of the evidence, and we may set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. <i>Id.</i><br />
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The evidence is largely undisputed. Some debris spilled from Kenneth's truck on the highway, and he parked the truck in a nearby lot with the headlights illuminated. On foot, Kenneth went into the middle turn lane of the highway to pick up the debris. It was dark outside, in the pre-dawn hours of the morning. The five-lane highway was the busiest street in Breckenridge with a speed limit of forty miles per hour. One witness testified that he almost hit Kenneth that morning before Singleton did, and it was a dangerous situation for Kenneth to be in the middle of the highway because it was "exceptionally dark that morning."<br />
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Singleton testified that he came to a stop at a stop sign on a cross street and noticed Kenneth's truck parked in the lot with its lights on, as if the truck was going to enter the highway. Singleton looked to his left, to his right, and then to his left again. When traffic cleared, Singleton turned left onto the highway. Singleton was looking to the left as he made the turn. Singleton acknowledged that he was looking one way and driving another. As Singleton was completing the turn, Singleton began looking forward. Singleton was driving five to ten miles per hour at the time. Singleton testified that Kenneth had been "bent over in the street and he start[ed] the process of standing up." Singleton did not see Kenneth until that moment, and Singleton struck Kenneth with the truck.<br />
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A police officer who responded to the scene included the following diagram in his report:</div>
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In his report, the officer did not identify any contributing factors to the incident. But, the officer testified that Kenneth "chose about the most unsafe way possible to pick up that debris." In particular, Kenneth did not park his vehicle on the highway with flashing lights, nor did he wear any reflective clothing.<br />
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Generally, the resolution of a defendant's possible breach of duty is a question of fact for the jury. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6983505199014177181&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Aguirre v. Vasquez,</i> 225 S.W.3d 744, 757 (Tex. App.-Houston [14th Dist.] 2007, no pet.)</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=16109700991927787758&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Smith v. Cent. Freight Lines, Inc.,</i> 774 S.W.2d 411, 412-14 (Tex. App.-Houston [14th Dist.] 1989, writ denied)</a>. The mere existence of a vehicle collision—even one involving a pedestrian—does not necessarily mean that the defendant was negligent. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16109700991927787758&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Smith,</i> 774 S.W.2d at 412, 414</a> (factually sufficient evidence to support jury's "no" answer regarding the defendant's negligence when the defendant rear-ended the plaintiff); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=14302832739828208827&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Chavarria v. Valley Transit Co.,</i> 75 S.W.3d 107, 111-12 (Tex. App.-San Antonio 2002, no pet.)</a> (factually sufficient evidence to support jury's verdict for the defendant bus driver who struck and killed a pedestrian at night when the pedestrian was standing in a lane of traffic, hunched over, and the driver had a mere split second to react before hitting the pedestrian); <a href="https://scholar.google.com/scholar_case?case=15868532529674743833&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Howard v. Wilburn,</i> 351 S.W.2d 345, 346-49 (Tex. Civ. App.-San Antonio 1961, writ ref'd n.r.e</a>.) (factually sufficient evidence to support jury's verdict for the defendant driver who struck and killed a pedestrian who was crossing the main thoroughfare while it was getting dark outside); <a href="https://scholar.google.com/scholar_case?case=4351310387624410133&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Lofland v. Jackson,</i> 237 S.W.2d 785, 789-91 (Tex. Civ. App.-Amarillo 1950, writ ref'd n.r.e</a>.) (sufficient evidence to support the jury's finding of no negligence when a driver struck a pedestrian); <i>cf. </i><a href="https://scholar.google.com/scholar_case?case=10934044270082856774&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Guyger v. Hamilton Trailer Co.,</i>304 S.W.2d 377, 378-79, 382 (Tex. Civ. App.-Eastland 1957, no writ)</a> (affirming jury's finding that driver who struck pedestrian was not negligent or liable under the discovered peril doctrine).<br />
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The Alfords fault Singleton for "cut[ting] more than he had to through the middle turn lane," rather than pulling only into the lane immediately to the right of the middle lane. Singleton testified that he cut into the middle lane before getting into the lane immediately to the right because there was a truck approaching on the highway in the far right lane. Singleton wanted to make sure he was not pulling out in front of the approaching truck.<br />
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The jury, weighing all of the evidence, could have found that Singleton's conduct was not negligent under the circumstances. Kenneth was bent over in the middle of the busiest highway in town while it was exceptionally dark outside, without taking any precautionary measures. Another driver almost struck Kenneth, yet Kenneth remained in the road. There is evidence that Singleton kept a lookout on the road and was not speeding or driving erratically. Considering the totality of the evidence, the jury's finding that no negligence by Singleton proximately caused the occurrence in question is not against the great weight and preponderance of the evidence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14302832739828208827&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Chavarria,</i> 75 S.W.3d at 111-12</a>.<br />
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The Alfords' second issue is overruled.</div>
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III. SUMMARY JUDGMENT</h2>
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In their third issue, the Alfords contend that the trial court erred by granting summary judgment to Targa because the Alfords amended their petition to include new claims for negligent retention and negligent entrustment that were not addressed in Targa's motion for summary judgment. Targa contends, among other things, that any such error was harmless because negligent retention and negligent entrustment claims require the plaintiff to prove that the employee or entrusted person committed an underlying tort, and here, the jury found that Singleton was not negligent.<br />
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Generally, granting summary judgment on a claim not addressed in the motion is reversible error. <a href="https://scholar.google.com/scholar_case?case=17970707918409514008&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>G & H Towing Co. v. Magee,</i> 347 S.W.3d 293, 297 (Tex. 2011)</a>. The harmless error rule, however, applies to this type of error. <i>See id.</i> (citing Tex. R. App. 44.1(a)). Error is harmless unless a reviewing court finds that the error probably caused the rendition of an improper judgment or prevented the appellant from properly presenting the case on appeal. <i>Id.</i> (citing Tex. R. App. 44.1(a)).<br />
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The error of granting summary judgment on a claim not addressed in the motion is harmless if "the omitted cause of action is precluded as a matter of law by other grounds raised in the case." <i>Id.</i> at 298. In <i>Magee,</i> for example, the Supreme Court of Texas held that a summary judgment on a vicarious liability theory of recovery, though not expressly presented in the motion, was harmless when a summary judgment was properly granted on the underlying tort committed by the employee. <i>See id.</i><br />
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Claims for negligent hiring or retention and negligent entrustment require proof that the employee or entrusted person committed an underlying tort. <i>See </i><a href="https://scholar.google.com/scholar_case?case=13491284237299662266&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Wansey v. Hole,</i> 379 S.W.3d 246, 247-48 (Tex. 2012)</a> ("To prevail on a claim for negligent hiring or supervision, the plaintiff is required to establish not only that the employer was negligent in hiring or supervising the employee, but also that the employee committed an actionable tort against the plaintiff. . . . We have explicitly established this requirement in negligent entrustment cases, which are factually similar to negligent hiring claims." (quotation and citations omitted)); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=5737581076899127808&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Shupe v. Lingafelter,</i> 192 S.W.3d 577, 580 (Tex. 2006)</a> ("On a negligent entrustment theory, a plaintiff must prove, among other elements, that the driver was negligent on the occasion in question and that the driver's negligence proximately caused the accident."); <i>see also Jackson v. NAACP Houston Branch,</i>No. 14-15-00507-CV, 2016 WL 4922453, at *11-12 (Tex. App.-Houston [14th Dist.] Sept. 15, 2016, pet. denied) (mem. op.) (affirming summary judgment for the defendant-employer because there was no evidence that the employee had committed a "separate actionable tort to support the negligent-retention claim").<br />
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Accordingly, a negligent entrustment claim may be negated as a matter of law by a jury's negative answer to a jury question concerning the negligence of the entrusted person. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5737581076899127808&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Shupe,</i> 192 S.W.3d at 580</a>. In <i>Shupe,</i> the plaintiff complained about the trial court's error in failing to submit to the jury a definition of negligence that incorporated a negligent entrustment theory of liability against one of the defendants. <i>See id.</i> at 578-79. The Supreme Court of Texas held that any error by omitting this theory of liability against the defendant was rendered harmless by the jury's "no" answer as to the negligence of the entrusted person. <i>See id.</i> at 580. The court held, "The jury's negative finding on this question negated the unsubmitted negligent entrustment issue as a matter of law." <i>Id.</i><br />
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Since both negligent entrustment and negligent retention claims require proof of an underlying tort, <i>see, e.g., </i><a href="https://scholar.google.com/scholar_case?case=13491284237299662266&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Wansey,</i> 379 S.W.3d at 247-48,</a> the jury's "no" answer regarding Singleton's negligence in this case negated the unsubmitted claims as a matter of law. <i>See </i><a href="https://scholar.google.com/scholar_case?case=5737581076899127808&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Shupe,</i> 192 S.W.3d at 580</a>. We cannot conclude, based on this record, that any improper summary judgment on those claims probably caused the rendition of an improper judgment or prevented the appellant from properly presenting the case on appeal. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17970707918409514008&q=14-17-00504-CV&hl=en&as_sdt=4,44" style="color: #660099;"><i>Magee,</i> 347 S.W.3d at 298</a>. The Alfords' third issue is overruled.</div>
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IV. CONCLUSION</h2>
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Having overruled all of the Alfords' issues, we affirm the trial court's judgment. <br />
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-63333628528980101382018-11-01T22:08:00.002-05:002019-05-11T16:22:35.305-05:00Unenforceable penalty objection to contractual liquidated damages provision must be pleaded as an affirmative defense <br />
An assertion that a contractual liquidated-damages provision is an unenforceable penalty is an affirmative defense. <i>Phillips v. Phillips</i>, 820 S.W.2d 785, 789 (Tex. 1991); <i>Magill v. Watson</i>, 409 S.W.3d 673, 679 (Tex. App.—Houston [1st Dist.] 2013, no pet.).<br />
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Unless it is apparent from the face of the plaintiff’s petition that the provision is a penalty, the defendant must plead the defense or it is waived. See TEX. R. CIV. P. 94; Phillips, 820 S.W.2d at 789–90. Moreover, the defendant cannot raise this affirmative defense for the first time on appeal even if it is apparent from the face of the plaintiff’s petition that the liquidated-damages provision is an unenforceable penalty. <i>See Phillips</i>, 820 S.W.2d at 790; <i>Excela Energy v. Exalt Real Estate Grp</i>., No. 14-16-00388-CV, 2017 WL 2292586, at *2–3 (Tex. App.— Houston [14th Dist.] May 25, 2017, pet. denied) (mem. op.).<br />
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Source: First Court of Appeals, NO. <a href="http://search.txcourts.gov/Case.aspx?cn=01-18-00027-CV&coa=coa01">01-18-00027-CV</a> - 10/30/2018<br />
TYHAN, INC. D/B/A AUTO FIX UNLIMITED V. CINTAS CORPORATION NO. 2<br />
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Tyhan did not challenge that the contract’s liquidated-damages provision as an unenforceable penalty either in its answer or in its response to Cintas’s summary judgment motion. Tyhan raised this issue for the first time in its appellate brief. Tyhan therefore has not preserved this issue for review. See Phillips, 820 S.W.2d at 790; Excela Energy, 2017 WL 2292586, at *2–3.<br />
<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-72957264985925779482018-10-11T03:39:00.002-05:002018-10-11T03:59:51.083-05:00Breach-of-Contract or Fraud Damages in the Alternative - No attorneys fees when election is made for recovery on fraud theory<div style="text-align: center;">
Pollitt v. Computer Comforts, Inc. (Tex.App. - Houston [1st Dist.] Oct. 4, 2018, no pet. h.) </div>
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<b><span style="color: #cc0000;">NO PICKING AND CHOOSING OF REMEDIES <i>A LA CARTE</i> WHEN CLAIMS IS ACTIONABLE AND SUCCESSFUL UNDER ALTERNATIVE LEGAL THEORIES </span></b><br />
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When a plaintiff succeeds on two legal theories of recovery, such as breach of contract and fraud, he is entitled to an election in favor of the theory that affords him the highest amount of damages, but he cannot elect to recover a higher award of damages on a tort cause of action and additionally get attorney's fees which cannot be awarded for success on the tort claim, relying instead on the breach-of-contract cause of action.<br />
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In a second appeal of the same case, which was remanded for determination of exemplary damages, the First Court of Appeals recently held that the trial court erred in awarding both attorney’s fees for breach of contract and exemplary damages on the fraud claim, and removed the fee award from the judgment. <i><a href="http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=1d134b8a-6f50-4970-81a1-d42407022c24&coa=coa01&DT=Opinion&MediaID=f1f4aa61-40db-40b6-b33b-ddc27da78bf9">Pollitt v. Computer Comforts, Incorporated</a></i>, NO. <a href="http://www.search.txcourts.gov/Case.aspx?cn=01-17-00067-CV&coa=coa01">01-17-00067-CV</a> (Tex.App. - Houston [1st Dist.] Oct. 4, 2018, no pet. h.) (deleting $11,500 in attorney's fee awarded on breach of contract cause of action based on plaintiff's election to recover under tort theory which included exemplary damages and affirming judgment as modified).<br />
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<blockquote class="tr_bq">
<b>THE GIST:</b> When a party prevails on alternate theories, the party is entitled to elect recovery on the theory affording the greatest recovery. But the one-satisfaction rule precludes a party from mixing damage elements from different liability theories to maximize its recovery. <i>McCullough v. Scarbrough, Medlin & Assocs</i>., 435 S.W.3d 871, 916–17 (Tex. App.—Dallas 2014, pet. denied). Thus, a party who has suffered a single injury cannot recover exemplary damages under a fraud theory and also recover attorney’s fees for breach of contract. </blockquote>
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KEY WORDS: Tort vs. contract claims, one statisfaction rule, election of remedies, fraud vs. contract, contract claims vs. tort claims.<br />
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Opinion issued October 4, 2018<br />
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In The </div>
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Court of Appeals </div>
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For The </div>
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First District of Texas </div>
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NO. 01-17-00067-CV </div>
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<b>DAVID POLLITT, Appellant </b></div>
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<b>V. </b></div>
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<b>COMPUTER COMFORTS, INCORPORATED, Appellee </b></div>
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On Appeal from the 212th District Court </div>
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Galveston County, Texas </div>
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Trial Court Case No. 11-CV-1203 </div>
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<b><span style="color: #3d85c6;">MEMORANDUM OPINION</span></b> </div>
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Appellant David Pollitt appeals from the final judgment rendered against him on fraud and contract claims. He argues that the judgment violated the one-satisfaction rule by awarding exemplary damages for the fraud claim and attorney’s fees for the contract claim. He also contends that postjudgment interest 2<br />
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was erroneously awarded from the date of an earlier judgment that was vacated as the result of a prior appeal.<br />
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We sustain the first issue because the amended judgment improperly awards attorney’s fees, and we overrule the remaining issue because the amended judgment properly awarded postjudgment interest from the date of the original judgment.<br />
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We modify the amended judgment to delete the award of attorney’s fees, and otherwise we affirm.<br />
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<b><span style="color: #3d85c6;">I. One-satisfaction rule</span></b><br />
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The factual background of this dispute was described in our opinion in a prior appeal in this case. See Pollitt v. Computer Comforts, Inc., No. 01-13-00785-CV, 2014 WL 7474073 (Tex. App.—Houston [1st Dist.] Dec. 30, 2014, no pet.) (mem. op.) (“Pollitt I”). We take judicial notice of the appellate record in the prior appeal. See Scott Bader, Inc. v. Sandstone Prods., Inc., 248 S.W.3d 802, 806 n.1 (Tex. App.—Houston [1st Dist.] 2008, no pet.). The result of the first appeal was a remand “for the fact-finder to determine how much in exemplary damages, if any, should be awarded against Pollitt individually.” Pollitt I, 2014 WL 7474073, at *4. On remand, the trial court (with a different judge presiding) requested briefing on the exemplary-damages issue. The trial-court brief filed by appellee Computer Comforts, Inc. included evidentiary arguments with citations to the reporter’s record from the trial on the merits, and Pollitt’s trial-court brief included a proffer of the reporter’s record and his evidentiary arguments.<br />
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The trial court awarded exemplary damages against Pollitt in the amount of $20,000. Pollitt objected to the judgment proposed by Computer Comforts, and he argued based on the one-satisfaction rule that there must be an election of remedy because the trial court could not award both attorney’s fees for breach of contract and exemplary damages on the fraud claim. The trial court signed the proposed judgment, allowing Computer Comforts to recover: actual damages from Pollitt and the other defendants, jointly and severally, in the amount of $40,000; exemplary damages from the other defendants in the amount of $40,000; exemplary damages from Pollitt in the amount of $20,000; and attorney’s fees in the amount of $11,500 from all defendants, jointly and severally. Pollitt filed a motion to modify the judgment, again relying upon the one-satisfaction rule, but the motion was overruled by operation of law.<br />
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On appeal, Pollitt continues to argue that the trial court erred in rendering a judgment against him that includes both an award of attorney’s fees for breach of contract and exemplary damages for fraud because it violates the one-satisfaction rule. Pollitt asserts that we should vacate the award of attorney’s fees because the $20,000 exemplary-damages award affords the greater recovery. Computer Comforts did not file an appellee’s brief to respond to Pollitt’s arguments. 4<br />
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The one-satisfaction rule provides that a plaintiff is limited to only one recovery for any damages suffered because of a single injury. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex. 2006); Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 8 (Tex. 1991); TMRJ Holdings, Inc. v. Inhance Techs., LLC, 540 S.W.3d 202, 208 (Tex. App.—Houston [1st Dist.] 2018, no pet.); Pollitt I, 2014 WL 7474073, at *4 (citing Stewart Title, 822 S.W.2d at 7). “The rule applies when multiple defendants commit the same act as well as when defendants commit technically different acts that result in a single injury.” Pollitt I, 2014 WL 7474073, at *4 (citing Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000)).<br />
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A party may seek damages based on alternate theories of liability—as Computer Comforts did—but it is not entitled to a double recovery for a single injury. See Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184 (Tex. 1998); Peterson Grp., Inc. v. PLTQ Lotus Grp., L.P., 417 S.W.3d 46, 63–64 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). When a party pleads and prevails on alternate theories of liability, “a judgment awarding damages on each alternate theory may be upheld if the theories depend on separate and distinct injuries and if separate and distinct damages findings are made as to each theory.” Pollitt I, 2014 WL 7474073, at *4.<br />
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The one-satisfaction rule further precludes a party from mixing damage elements from different liability theories to maximize recovery of damages. See Chapa, 212 S.W.3d at 304; McCullough v. Scarbrough, Medlin & Assocs., 435 S.W.3d 871, 916–17 (Tex. App.—Dallas 2014, pet. denied). Thus, a party who has suffered a single injury cannot recover exemplary damages under a fraud theory and also recover attorney’s fees for breach of contract. See, e.g., Win Shields Prods., Inc. v. Greer, No. 05-16-00274-CV, 2017 WL 2774443, at *5–6 (Tex. App.—Dallas June 27, 2017, pet. denied) (mem. op.) (applying one-satisfaction rule to fraudulent-inducement and breach-of-contract claims); McCullough, 435 S.W.3d at 916–17 (applying one-satisfaction rule to alternate liability theories of breach of contract, fraud, and breach of fiduciary duty); see also Chapa, 212 S.W.3d at 304 (noting that plaintiff could recover attorney’s fees but not exemplary damages for breach of contract and that plaintiff could recover exemplary damages but not attorney’s fees for fraud).<br />
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When a party does prevail on alternate theories, the party is entitled to elect recovery on the theory affording the greatest recovery. Chapa, 212 S.W.3d at 304, 314; Madison v. Williamson, 241 S.W.3d 135, 158 (Tex. App.—Houston [1st Dist.] 2007, pet. denied). If the prevailing party fails to elect between the alternate theories, the court should render judgment using the findings that afford the greatest recovery. McCullough, 435 S.W.3d at 917 (citing Birchfield v. Texarkana Mem’l Hosp., 747 S.W.2d 361, 367 (Tex. 1987)).<br />
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The origin of this dispute was an order placed by the Covington entities to buy computer furniture from Computer Comforts. After the furniture was delivered, the Covington entities did not pay. Computer Comforts asserted its breach-of-contract claim against the defendants, including Pollitt, for failure to pay for the furniture. Its fraudulent-inducement claim was that the defendants, including Pollitt, ordered the furniture with no intent to pay for it. Computer Comforts suffered a single injury—the loss associated with receiving no payment for the furniture—and there is no argument and no evidence that Computer Comforts suffered separate and distinct injuries resulting from the alternate liability theories of fraud and breach of contract. See, e.g., Win Shields, 2017 WL 2774443, at *6; McCullough, 435 S.W.3d at 916–17. Based on the facts of this case, Computer Comforts cannot recover from Pollitt an award of attorney’s fees for breach of contract in the amount of $11,500 and exemplary damages for fraud in the amount of $20,000. The trial court erroneously awarded both of those damages amounts. We therefore sustain Pollitt’s first issue. Because the $20,000 exemplary-damages award for fraud provides the greater recovery, we reverse the portion of the amended judgment that awarded attorney’s fees. 7<br />
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<b><span style="color: #3d85c6;">II. Postjudgment interest</span></b><br />
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The judgment on remand awarded postjudgment interest on “the total amount of the judgment here rendered” “at the rate of 6% from June 10, 2013 until paid.” June 10, 2013 was the date of the original judgment. Pollitt asserts in his second issue that postjudgment interest was erroneously awarded from the date of the original judgment and that it should be awarded from the date of the amended judgment.<br />
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In the first appeal, after finding error in the original judgment’s award of exemplary damages against all defendants jointly and severally, this court remanded the case for a determination of how much in exemplary damages, if any, should be awarded against Pollitt. As noted above, the trial court corrected its error in the amended judgment, awarding exemplary damages against Pollitt individually in the amount of $20,000. Postjudgment interest “accrues during the period beginning on the date the judgment is rendered and ending on the date the judgment is satisfied.” TEX. FIN. CODE § 304.005(a). In a recent series of cases, the Supreme Court of Texas formulated rules for which judgment should be used for postjudgment-interest accrual when there is more than one judgment as a result of an appellate-court remand. See Ventling v. Johnson, 466 S.W.3d 143, 149–51 (Tex. 2015); Long v. Castle Tex. Prod. Ltd. P’ship, 426 S.W.3d 73, 77–82 (Tex. 2014); 8<br />
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Phillips v. Bramlett, 407 S.W.3d 229, 238–43 (Tex. 2013); see also Whittington v. City of Austin, 456 S.W.3d 692, 707–08 (Tex. App.—Austin 2015, pet. denied).<br />
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In Ventling, the Court reiterated the rule that it had formulated in Phillips on which judgment controls for the purpose of postjudgment-interest accrual, noting that the answer “depends on whether additional evidence is required on remand.” Ventling, 466 S.W.3d at 149. “‘[W]hen an appellate court remands a case to the trial court for entry of judgment consistent with the appellate court’s opinion, and the trial court is not required to admit new or additional evidence to enter that judgment . . . the date the trial court entered the original judgment is the ‘date the judgment is rendered,’ and postjudgment interest begins to accrue . . . as of that date.’” Id. at 150 (quoting Phillips, 407 S.W.3d at 239).<br />
<br />
The trial court did not reopen the record on remand; it did not require or allow new or additional evidence, and thus it possessed a sufficient record as of the date of the original judgment to render an accurate judgment. See Long, 426 S.W.3d at 76 (“The rationale behind the postjudgment-interest accrual rule and exception is that a claimant is entitled to postjudgment interest from the judgment date once the trial court possesses a sufficient record to render an accurate judgment.”); Whittington, 456 S.W.3d at 707–08 (concluding that postjudgment interest properly awarded from original judgment’s date because trial court disposed of condemnation compensation on remand without considering additional evidence or reopening record). Therefore the trial court did not err by awarding postjudgment interest from the date of the original judgment.<br />
<br />
We overrule Pollitt’s second issue.<br />
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<b><span style="color: #3d85c6;">Conclusion</span></b><br />
<br />
We modify the amended judgment to delete the $11,500 award of attorney’s fees to Computer Comforts, and we affirm the amended judgment as modified.<br />
<br />
Michael Massengale<br />
Justice<br />
<br />
Panel consists of Justices Jennings, Higley, and Massengale.<br />
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-91440997541644084892018-09-21T12:36:00.000-05:002018-09-21T12:36:06.834-05:00Post-mortem promissory estoppel claim against former romantic partner's estate found barred by Estates Code section 254.004(a) <b><span style="color: #cc0000;">STATUTE OF FRAUDS IN THE ESTATE CODE [formerly PROBATE CODE]</span></b><br />
<b><span style="color: #cc0000;">DOOMS CLAIM BY FORMER GIRLFRIEND WHO WAS CUT OUT OF THE WILL; -- PROMISE HELD UNENFORCEABLE </span></b><br />
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<span style="color: #222222; font-family: "arial" , sans-serif;"><span style="font-size: 15px;"><i>In re Estate of Jack C. Gilbert</i>, </span></span><span style="color: #222222; font-family: "arial" , sans-serif; font-size: 15px;">No. <a href="http://search.txcourts.gov/Case.aspx?cn=04-16-00641-CV&coa=coa04">04-16-00641-CV</a>, </span><span style="color: #222222; font-family: "arial" , sans-serif; font-size: 15px;">513 S.W.3d 767 </span><span style="color: #222222; font-family: "arial" , sans-serif; font-size: 15px;">(Tex.App.- San Antonio Feb, 8, 2017, no pet.)(denial of temporary injunction affirmed on appeal because </span><span style="color: #222222; font-family: "arial" , sans-serif;"><span style="font-size: 15px;">promissory estoppel claim is barred by Estates Code section 254.004(a). </span></span><br />
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Section 254.004(a) of the Texas Estates Code provides as follows:</div>
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(a) A contract executed or entered into on or after September 1, 1979, to make a will or devise, or not to revoke a will or devise, may be established only by:</blockquote>
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(1) a written agreement that is binding and enforceable; or</blockquote>
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(2) a will stating:</blockquote>
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(A) that a contract exists; and</blockquote>
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(B) the material provisions of the contract.</blockquote>
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TEX. ESTATES CODE ANN. § 254.004(a) (West 2014). </div>
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In recognition of this provision, Trudy dropped her breach of contract claim; however, Trudy contends section 254.004(a) does not affect her ability to assert a promissory estoppel claim. </div>
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<b>513 S.W.3d 767 (2017)</b></center>
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In the ESTATE OF Jack C. GILBERT Jr., Deceased.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=4553222064814493257&as_sdt=2&hl=en" style="color: #660099;">No. 04-16-00641-CV.</a></center>
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<b>Court of Appeals of Texas, San Antonio.</b></div>
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Delivered and Filed: February 8, 2017.</center>
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<a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p768" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">768</a></div>
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Appeal from the County Court at Law, Kendall County, Texas, Trial Court No. 16-048-PR, Honorable Stephen B. Ables, Judge Presiding.<br />
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AFFIRMED.</div>
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Kurtis S. Rudkin, for James C. Gilbert.</div>
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Shannon K. Dunn, Beth Watkins, for Trudy Jane Schuetze Sundin.</div>
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Sitting: Karen Angelini, Justice, Marialyn Barnard, Justice, Patricia O. Alvarez, Justice.</div>
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OPINION</h2>
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Opinion by: Patricia O. Alvarez, Justice.</div>
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Trudy Jane Schuetze Sundin appeals the trial court's order denying her application for a temporary injunction in the underlying probate proceeding. In her sole issue on appeal, Trudy contends the trial court abused its discretion because she alleged a viable cause of action for promissory estoppel based on Jack C. Gilbert Jr.'s promise to name her as his sole beneficiary in his will. We affirm the trial court's order.</div>
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BACKGROUND</h2>
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Beginning in the late 1990s, Trudy was Jack's romantic partner for almost seventeen years. In April of 2001, Trudy sold Jack her house in exchange for Jack's promise to execute a will naming her as the sole beneficiary of his estate. In 2004, Jack executed such a will. In 2006, Jack revised his will but again named Trudy as his sole beneficiary. In 2008, Trudy executed a gift deed transferring an unimproved half-acre lot to Jack also in reliance on his promise to name her as his sole beneficiary. When Trudy and Jack ended their relationship in November of 2015, Jack revised his will; he named his son, James, as his sole beneficiary and independent executor of his estate. Jack died about four months later. </div>
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After the November 2015 will was admitted to probate, Trudy sued Jack's estate asserting claims for breach of contract and promissory estoppel. Trudy requested injunctive relief and a constructive trust on all of the estate's property, including the two tracts of real property Trudy previously conveyed to Jack. The trial court granted a temporary restraining order in Trudy's favor.</div>
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At the subsequent hearing on her request for a temporary injunction, Trudy sought the injunction based only on her promissory estoppel claim. The trial court concluded Trudy did not have a viable cause of action as a matter of law; it dissolved the temporary restraining order and denied her application for a temporary injunction. Trudy appeals.</div>
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DISCUSSION</h2>
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Trudy contends the trial court erred in concluding she does not have a viable promissory estoppel claim against Jack's <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p769" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">769</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p769" id="p769" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*769</a> estate. James counters that Trudy did not present evidence to support her promissory estoppel claim. But Trudy correctly asserts in her reply brief that the trial court's ruling was not based on the evidence.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Instead, at the hearing, the trial court expressly stated its decision was based on whether the law allowed Trudy to assert a promissory estoppel claim against Jack's estate:</div>
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THE COURT: And if — if there's some authority that part performance of a promise to bequeath under an estate is enough for you to recover property from the estate in contradiction of the terms of a will or a trust, then, you know, we need to see it. I'm not — I don't think you're going to find it.</blockquote>
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What I'm saying today is I'm assuming that you're right, that there's going to be somebody to get up and testify that, I was promised that if I would do this, I would be the sole heir of the estate, assuming that's right.</blockquote>
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[Trudy's attorney]: Yes, sir.</blockquote>
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THE COURT: I don't think that that's going to be enough for you to win, because I don't think that there's a cause of action for that.... I understand promissory estoppel. But I don't know if I've seen it in the context of setting aside the bequeaths under a will saying, you get that property instead of the person who's supposed to receive it under [a] valid will.</blockquote>
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Therefore, the dispositive question in this appeal is whether Trudy can assert a promissory estoppel claim against Jack's estate based on his oral promise to name her as his sole beneficiary in his will.</div>
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A. Applicable Statute</h2>
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Section 254.004(a) of the Texas Estates Code provides as follows:</div>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
(a) A contract executed or entered into on or after September 1, 1979, to make a will or devise, or not to revoke a will or devise, may be established only by:</blockquote>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
(1) a written agreement that is binding and enforceable; or</blockquote>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
(2) a will stating:</blockquote>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px; margin: 1em 0px; padding: 0px 40px; position: relative;">
(A) that a contract exists; and</blockquote>
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(B) the material provisions of the contract.</blockquote>
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TEX. ESTATES CODE ANN. § 254.004(a) (West 2014). In recognition of this provision, Trudy dropped her breach of contract claim; however, Trudy contends section 254.004(a) does not affect her ability to assert a promissory estoppel claim.</div>
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B. Relevant Case Law</h2>
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<i>1.</i> Estate of Wallace</h2>
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In <i>In re Estate of Wallace,</i> this court considered a similar argument. No. 04-05-00567-CV, 2006 WL 3611277 (Tex. App.-San Antonio Dec. 13, 2006, no pet.) (mem. op.). In that case, William Riddick and Willard Wallace were distant cousins. <i>Id.</i> at *1. Wallace owned 500 acres of land, and Riddick alleged Wallace, who regarded Riddick as a son, promised to sell him the property in the future. <i>Id.</i> In consideration for this promise, Riddick performed personal services for Wallace. <i>Id.</i> In 1991, Wallace contracted to sell 400 acres to a third party; however, the sale never closed, and Riddick subsequently threatened to sue Wallace for breaching his promise. <i>Id.</i> In exchange for Riddick's promise not to sue, Wallace and his wife "agreed to bequeath Riddick an undivided one-half interest in 100 acres, rather than selling him the entire 500 acres as previously promised." <i>Id.</i> In 1993, Wallace and his wife provided Riddick a copy of their wills containing the devise. <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Estate of Wallace,</i> </a><a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p770" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">770</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p770" id="p770" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*770</a><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"> 2006 WL 3611277, at *1</a>. When Wallace died in 2001, his wife filed an application to probate his will. <i>Id.</i> The will offered for probate, however, was a 1996 will that excluded Riddick from receiving any interest in the 100 acres. <i>Id.</i>Riddick sued the estate asserting various claims, and the trial court granted a series of summary judgments on different claims. <i>Id.</i> at *2. On appeal, Riddick challenged the summary judgment dismissing his unjust enrichment claim. <i>Id.</i></div>
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Similar to Trudy's stance in this appeal, Riddick conceded that section 59A(a) of the Texas Probate Code barred him from maintaining a breach of contract claim.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#[2]" name="r[2]" style="color: #660099;">[2]</a></sup><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Estate of Wallace,</i> 2006 WL 3611277, at *4</a>. However, Riddick argued the trial court erred in granting the estate's motion for summary judgment "wherein the estate contended that Riddick's claim for unjust enrichment was barred as a matter of law because § 59A bars the enforcement of [an] oral agreement to make a will." <i>Id.</i> This court rejected Riddick's argument:</div>
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Unjust enrichment is an equitable remedy that places an aggrieved plaintiff in the position he occupied prior to his dealings with the defendant. This remedy is distinct from expectancy damages that allow a plaintiff to receive the benefit of the bargain by placing him in as good a position as he would have been had the contract been performed. Here, Riddick claims he performed various services that benefitted Wallace. He does not, however, seek to be placed in the position he occupied prior to his dealings with Wallace by recovering the value of the services performed. Instead, he has consistently maintained that he should receive the property promised to him because "an agreement implied in law under principles of equity arose compelling delivery of the contested tract to Plaintiff." To hold otherwise, Riddick argues, would result in Wallace's estate being unjustly enriched by having received benefits for which compensation was promised to Plaintiff but not delivered. However, equitable relief is not available merely because it might appear expedient or generally fair that some recompense be afforded for an unfortunate loss to the claimant, or because the benefits to the person sought to be charged amount to a windfall.</blockquote>
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Riddick, as a matter of law, cannot recover expectancy damages which are only available pursuant to a contract. Accordingly, we overrule Riddick's first issue.</blockquote>
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<i>Id.</i> at *5 (footnotes omitted) (citations omitted).</div>
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Trudy contends our decision in <i>Estate of Wallace</i> does not preclude her promissory estoppel claim because she has limited the relief she is requesting and only seeks to be placed in the position she was in prior to her dealings with Jack by recovering the real property she conveyed to him.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#[3]" name="r[3]" style="color: #660099;">[3]</a></sup> Although our decision in <i>Estate of Wallace</i> is distinguishable on its facts, we did not hold Riddick would have prevailed on his <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p771" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">771</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p771" id="p771" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*771</a> unjust enrichment claim if he had limited the relief he requested to the value of the services he performed. We simply held Riddick could not recover expectancy damages as a matter of law. <i>See id.</i></div>
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<i>2.</i> Doyle v. Heilman</h2>
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In <i>Doyle v. Heilman,</i> the Houston court noted that this court did not reach the issue of whether section 59A of the Texas Probate Code precluded a claim for unjust enrichment. No. 01-09-00164-CV, 2010 WL 1053062, at *5 (Tex. App.-Houston [1st Dist.] Mar. 11, 2010, no pet.) (mem. op.). In <i>Doyle,</i> Leticia G. Heilman sued the estate of Albert Miller alleging she "had an oral contract with Miller agreeing that Miller would give `all his worldly goods of value' to Heilman if she cared for his needs until he died." <i>Id.</i> at *1. Heilman sued for "breach of contract, promissory estoppel, quantum meruit, breach of fiduciary duty, spousal liability, and unjust enrichment." <i>Id.</i> The trial court granted summary judgment in favor of the executor on all of Heilman's claims except her claim for quantum meruit. <i>Id.</i> After a bench trial, the trial court entered a judgment in favor of Heilman on her claim for quantum meruit and awarded her $72,300 in damages. <i>Doyle,</i> 2010 WL 1053062, at *5.</div>
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On appeal, the executor argued section 59A of the Texas Probate Code was an absolute bar to Heilman's recovery. <i>Id.</i> "Heilman argued that she should recover under quantum meruit for the reasonable value of her services." <i>Id.</i> The Houston court referred to this court's decision in <i>Estate of Wallace:</i></div>
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The San Antonio Court of Appeals addressed a claim for unjust enrichment and a Section 59A defense but did not reach the issue because the claimant sought a recovery based on a contract, which Section 59A precludes if it is not in writing.</blockquote>
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<i>Id.</i> (citing <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Estate of Wallace,</i> 2006 WL 3611277, at *5</a>). The Houston court further noted, "We find no authority establishing that a claimant can recover on a claim for quantum meruit for an alleged oral agreement that is barred by Section 59A." <i>Id.</i>Because the Houston court held Heilman failed to prove all of the elements of her quantum meruit claim, however, that court also concluded it "need not decide whether Section 59A bars a quantum meruit claim." <i>Id.</i></div>
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C. Standard of Review</h2>
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Here, the trial court assumed Trudy could prove all of the elements of her promissory estoppel claim, but it denied Trudy's application for a temporary injunction because it concluded section 254.004 bars such a claim as a matter of law. Although the decision "to grant or deny a temporary injunction is within the trial court's sound discretion," <a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Butnaru v. Ford Motor Co.,</i> 84 S.W.3d 198, 204 (Tex. 2002),</a> "[a] trial court has no `discretion' in determining what the law is," <a href="https://scholar.google.com/scholar_case?case=1890178492646002387&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Walker v. Packer,</i> 827 S.W.2d 833, 840 (Tex. 1992),</a> and we review de novo the trial court's determination that section 254.004 bars such a claim, <i>see </i><a href="https://scholar.google.com/scholar_case?case=14957982747601198737&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Marketshare Telecom, L.L.C. v. Ericsson, Inc.,</i> 198 S.W.3d 908, 916 (Tex. App.-Dallas 2006, no pet.)</a> ("We review de novo any determinations on questions of law that the trial court made in support of the [temporary injunction].").</div>
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D. Statute Bars Trudy's Claim</h2>
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<i>1. Trudy's Cases Lack Requisite Support</i></h2>
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Trudy cites <i>Trevino & Associates Mechanical, Blackstone Medical,</i> and <i>Richter</i> to show promissory estoppel is a valid cause of action in Texas and to identify the elements of promissory estoppel. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3278810751794946769&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C.,</i> 470 S.W.3d 636, 655 (Tex. </a><a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p772" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">772</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#p772" id="p772" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*772</a><a href="https://scholar.google.com/scholar_case?case=3278810751794946769&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"> App.-Dallas 2015, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=6729339418929019010&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Trevino & Assocs. Mech., L.P. v. Frost Nat'l Bank,</i> 400 S.W.3d 139, 146 (Tex. App.-Dallas 2013, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=13364995720934842923&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Richter v. Wagner Oil Co.,</i> 90 S.W.3d 890, 899 (Tex. App.-San Antonio 2002, no pet.)</a>. We recognize that promissory estoppel is a valid cause of action in Texas, but none of Trudy's cases addresses promissory estoppel in the context of section 254.004's statutory bar. <i>See</i> TEX. EST. CODE ANN. § 254.004; <a href="https://scholar.google.com/scholar_case?case=3278810751794946769&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Blackstone Med.,</i> 470 S.W.3d at 655</a>; <a href="https://scholar.google.com/scholar_case?case=6729339418929019010&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Trevino & Assocs. Mech.,</i> 400 S.W.3d at 146</a>; <a href="https://scholar.google.com/scholar_case?case=13364995720934842923&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Richter,</i> 90 S.W.3d at 899</a>. Trudy does not cite any authority to show that promissory estoppel is a viable cause of action in her circumstances, and we have found none.</div>
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<i>2. Contrary Authority</i></h2>
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To the contrary, where our sister courts have addressed similar circumstances, none has held that an oral promise to bequeath property on the promisor's death is enforceable in light of section 254.004. <i>See, e.g., Doyle,</i> 2010 WL 1053062, at *5 ("We find no authority establishing that a claimant can recover on a claim for quantum meruit for an alleged oral agreement that is barred by Section 59A [section 254.004's predecessor statute]."); <i>see also Pool v. Diana,</i> No. 03-08-00363-CV, 2010 WL 1170234, at *8 (Tex. App.-Austin Mar. 24, 2010, pet. denied) (mem. op.) (citing section 59A of the former Probate Code, the statutory predecessor of Estates Code section 254.004, and stating "[a]s a matter of law, an oral agreement to devise property otherwise disposed of in a will is unenforceable").</div>
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<i>3. Statute Bars Trudy's Promissory Estoppel Claim</i></h2>
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Having reviewed the statute and the relevant case law, we conclude the legislature intended to foreclose a claim relating to a promise to make a will or devise or not to revoke a will or devise if that promise is not in writing. <i>See</i> TEX. EST. CODE ANN. § 254.004; <i>Pool,</i> 2010 WL 1170234, at *8; <i>Doyle,</i> 2010 WL 1053062, at *5; <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Estate of Wallace,</i> 2006 WL 3611277, at *4</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=16122518579598880289&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Taylor v. Johnson,</i> 677 S.W.2d 680, 682 (Tex. App.-Eastland 1984, writ ref'd n.r.e</a>.).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#[4]" name="r[4]" style="color: #660099;">[4]</a></sup> We hold that section 254.004 bars a claim for promissory estoppel on an oral promise to devise property that is disposed of in a will. <i>See</i> TEX. EST. CODE ANN. § 254.004; <i>Pool,</i>2010 WL 1170234, at *8. Because Trudy seeks to enforce Jack's alleged oral promise to devise his estate to her, and Jack's will devises his estate to another, Trudy's claim is barred.</div>
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CONCLUSION</h2>
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To obtain a temporary injunction, Trudy was required to prove she had a cause of action against the estate. <i>See </i><a href="https://scholar.google.com/scholar_case?case=16550706050613004929&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="color: #660099;"><i>Butnaru,</i> 84 S.W.3d at 204</a>. Because we hold Trudy's promissory estoppel claim is barred by Estates Code section 254.004(a), we conclude the trial court did not abuse its discretion in denying Trudy's application for a temporary injunction. Thus, we affirm the trial court's order.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#r[1]" name="[1]" style="color: #660099;">[1]</a> We note Trudy made an informal offer of proof which was dictated into the record.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#r[2]" name="[2]" style="color: #660099;">[2]</a> Section 59A(a) of the Texas Probate Code was similar to section 254.004(a) of the Texas Estates Code; section 59A(a) read as follows:</div>
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(a) A contract to make a will or devise, or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by provisions of a will stating that a contract does exist and stating the material provisions of the contract.</div>
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<a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13372097621379772688&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Estate of Wallace,</i> 2006 WL 3611277, at *4</a> (quoting Texas Probate Code section 59A(a)).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#r[3]" name="[3]" style="color: #660099;">[3]</a> We note Trudy's pleading broadly sought to enjoin James from disposing of all of the estate's assets, and her argument to the trial court was equally broad. In her brief, however, Trudy only seeks to enjoin James from disposing of the real property she conveyed to Jack.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15339172105889928859&q=%22statute+of+frauds%22&hl=en&as_sdt=4,44&as_ylo=2017#r[4]" name="[4]" style="color: #660099; text-decoration: underline;">[4]</a> <i>See generally</i> Ozgur K. Bayazitoglu, <i>Applying Realist Statutory Interpretation to Texas Probate Code § 59A — Contracts Concerning Succession,</i> 33 HOUS. L. REV. 1175, 1192-94 (1996) (asserting strict interpretation of section 59A is unjust but stating "If the <i>Taylor</i> court is correct, section 59A is essentially a supplement to the statute of frauds, operating as another statute that requires certain contracts to be in writing if they are to be enforceable.... Even where a promisee has reasonably relied upon a promise to her detriment, she will nevertheless be unable to enforce the promise in court."). </div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-53981036993606811202018-06-22T10:51:00.001-05:002018-09-21T12:50:33.010-05:00SCOTX: No cause of action for intentional interference with inheritance in Texas. Archer v. Anderson (Tex. June 22, 2018) <span style="color: #0b5394;">No longer an open question: Whether there is a cause of action for tortious interference with an inheritance in Texas. Texas Supreme Court says No in a 5:4 decision. Partially dissenting justices would not have ruled as sweepingly, but would have denied recovery in the case at bar. </span><br />
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<a href="http://www.txcourts.gov/media/1441859/160256.pdf">Archer v. Anderson</a>, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0256&coa=cossup">16-0256</a> (Tex. June 22, 2018, motion for rehearing filed 8/8/2018) ("The tort of intentional interference with inheritance is not recognized in Texas. The decisions of the courts of appeals to the contrary are overruled.") </div>
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<tr><td style="text-align: center;"><a href="https://4.bp.blogspot.com/-_2t3owJeMFE/Wy0ZU2TfPJI/AAAAAAAAINM/wzJfbI2Tq48vvdK3NDif0VyfpMijBWxcQCLcBGAs/s1600/Tex%2B2018-06-22%2BTex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2BTex%2B2018%2Bcase%2Binfo.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img alt="Archer v. Anderson, No. 16-0256 (Tex. June 22, 2018)" border="0" data-original-height="540" data-original-width="948" height="227" src="https://4.bp.blogspot.com/-_2t3owJeMFE/Wy0ZU2TfPJI/AAAAAAAAINM/wzJfbI2Tq48vvdK3NDif0VyfpMijBWxcQCLcBGAs/s400/Tex%2B2018-06-22%2BTex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2BTex%2B2018%2Bcase%2Binfo.JPG" title="Archer v. Anderson, No. 16-0256 (Tex. June 22, 2018) " width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Archer v. Anderson, No. 16-0256 (Tex. June 22, 2018) </td></tr>
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<blockquote class="tr_bq" style="clear: both; text-align: justify;">
<br />Last Term, in <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&hl=en&as_sdt=6,44">Kinsel v. Lindsey</a>, we noted that Texas has never recognized a cause of action for intentional interference with inheritance but left open the question whether we should do so.1 Today, to eliminate continuing confusion over the matter and resolve a split among the courts of appeals, we answer that question. </blockquote>
<blockquote class="tr_bq" style="clear: both; text-align: justify;">
Because existing law affords adequate remedies for the wrongs the tort would redress, and because the tort would conflict with Texas probate law, we hold that there is no cause of action in Texas for intentional interference with inheritance. We affirm the judgment of the court of appeals.2</blockquote>
<blockquote class="tr_bq">
<span style="font-size: x-small;"><span style="text-align: justify;">1 </span><span style="text-align: justify;"> 526 S.W.3d 411, 423 (Tex. 2017) (“Neither our precedent nor the Legislature has blessed tortious interference </span><span style="text-align: justify;">with an inheritance as a cause of action in Texas. Its viability is an open question.”).</span></span></blockquote>
<span style="text-align: justify;"><br /></span>
RICHARD T. ARCHER, DAVID B. ARCHER, CAROL ARCHER BUGG, JOHN V. ARCHER, KAREN ARCHER BALL, AND SHERRI ARCHER v. T. MARK ANDERSON AND CHRISTINE ANDERSON, AS CO-EXECUTORS OF THE ESTATE OF TED ANDERSON; from Travis County; 3rd Court of Appeals District (03-13-00790-CV, 490 SW3d 175, 03-02-16)<br />
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<a href="https://4.bp.blogspot.com/-voBE9q8WFZE/Wy0ZxLjaWnI/AAAAAAAAINU/P4_SFzuOiRsMSNPA_8gWjyFww8loxIOXQCLcBGAs/s1600/Tex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2B%2528Tex%2B2018%2529%2B%2528no%2Btortious%2Binterference%2Bwith%2Binheritance%2Btort%2Bin%2BTexas%2529.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="970" data-original-width="722" height="640" src="https://4.bp.blogspot.com/-voBE9q8WFZE/Wy0ZxLjaWnI/AAAAAAAAINU/P4_SFzuOiRsMSNPA_8gWjyFww8loxIOXQCLcBGAs/s640/Tex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2B%2528Tex%2B2018%2529%2B%2528no%2Btortious%2Binterference%2Bwith%2Binheritance%2Btort%2Bin%2BTexas%2529.JPG" width="476" /></a></div>
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The Court affirms the court of appeals' judgment.<br />
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Chief Justice Hecht delivered the opinion of the Court, in which Justice Green, Justice Guzman, Justice Devine, and Justice Blacklock joined.<br />
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Justice Johnson delivered an opinion, concurring in part and dissenting in part, and concurring in the judgment, in which Justice Lehrmann, Justice Boyd, and Justice Brown joined.<br />
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<tr><td style="text-align: center;"><a href="https://1.bp.blogspot.com/-vCg-w_mvOGU/Wy0e7mCCupI/AAAAAAAAINg/cYu7k6wlal8w9MiAbw0hEqAlEib2xxdHgCLcBGAs/s1600/Tex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2BTex%2B2018%2Bcase%2Binfo%2B-%2BJohnson%2BDissent.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="842" data-original-width="926" height="361" src="https://1.bp.blogspot.com/-vCg-w_mvOGU/Wy0e7mCCupI/AAAAAAAAINg/cYu7k6wlal8w9MiAbw0hEqAlEib2xxdHgCLcBGAs/s400/Tex%2B2018-06-22%2BArcher%2Bv%2BAnderson%2BTex%2B2018%2Bcase%2Binfo%2B-%2BJohnson%2BDissent.JPG" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: small;">Phil Johnson would not go as far</span><br />
<span style="font-size: small;">would keep potential interference tort available as gapfiller </span><br />
<span style="font-size: small;">if no other remedy would cover the situation. </span></td></tr>
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<span style="color: #cc0000;">I join the Court’s judgment but dissent from its blanket rejection of the type of cause of action the Archers asserted. The cause of action is designed to protect persons damaged by another’s intentional interference with a benefit that the persons in reasonable likelihood would have received as an inheritance absent the interference. </span></div>
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<blockquote class="tr_bq" style="text-align: justify;">
<span style="color: #cc0000;">I would not now foreclose the option of a tort
action for intentional interference with inheritance to be used in circumstances where no alternative
adequate remedy is available, and the tort would provide the only avenue for relief. The appropriate
situation for recognizing the tort did not present itself in this case. </span></blockquote>
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<b>IN THE SUPREME COURT OF TEXAS</b><br />
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444444444444</div>
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NO. 16-0256</div>
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444444444444<br />
<b><br /></b></div>
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<b>RICHARD T. ARCHER, DAVID B. ARCHER,</b></div>
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<b>CAROL ARCHER BUGG, JOHN V. ARCHER,</b></div>
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<b>KAREN ARCHER BALL, AND SHERRI ARCHER, PETITIONERS,</b></div>
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<b>v.</b></div>
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<b>T. MARK ANDERSON AND CHRISTINE ANDERSON, AS</b></div>
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<b>CO-EXECUTORS OF THE ESTATE OF TED ANDERSON, RESPONDENTS</b><br />
<b><br /></b></div>
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4444444444444444444444444444444444444444444444444444</div>
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ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS</div>
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4444444444444444444444444444444444444444444444444444<br />
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Argued October 11, 2017.</center>
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Opinion delivered: June 22, 2018.</center>
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Philip M. Ross, for Jo Ann Rivera, John Schaefer, Jessica Schaefer, Hilary Kulik, Gretchen Thompson, Ronald Schaefer, Jr. and Matthew Schaefer, Amicus Curiae.</div>
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Scott V. Kidd, Scott R. Kidd, for Christine Anderson and T. Mark Anderson, Respondents.</div>
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Laurie E. Ratliff, Frank N. Ikard, Jr., for Karen Archer Ball, Sherri Archer, Richard T. Archer, David B. Archer, Carol Archer Bugg and John V. Archer, Petitioners.</div>
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On Petition for Review from the Court of Appeals for the Third District of Texas.</div>
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CHIEF JUSTICE HECHT delivered the opinion of the Court, in which JUSTICE GREEN, JUSTICE GUZMAN, JUSTICE DEVINE, and JUSTICE BLACKLOCK joined.</div>
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JUSTICE JOHNSON filed an opinion, concurring in part and dissenting in part, and concurring in the judgment, in which JUSTICE LEHRMANN, JUSTICE BOYD, and JUSTICE BROWN joined.</div>
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NATHAN L. HECHT, Chief Justice.</div>
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Last Term, in <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel v. Lindsey</i></a><i>,</i> we noted that Texas has never recognized a cause of action for intentional interference with inheritance but left open the question whether we should do so.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> Today, to eliminate continuing confusion over the matter and resolve a split among the courts of appeals, we answer that question. Because existing law affords adequate remedies for the wrongs the tort would redress, and because the tort would conflict with Texas probate law, we hold that there is no cause of action in Texas for intentional interference with inheritance. We affirm the judgment of the court of appeals.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[2]" name="r[2]" style="color: #660099;">[2]</a></sup></div>
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I</h2>
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John R. "Jack" Archer, a successful oil-and-gas businessman, married and divorced 4 times but had no children. His closest family was a brother, Richard Archer, and Richard's 6 children (loosely referred to as "the Archers").<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[3]" name="r[3]" style="color: #660099;">[3]</a></sup> Jack executed a will in 1991 that left the bulk of his roughly $7.5 million estate to the Archers, including a 1,000-acre ranch, mineral interests, homes, life insurance, bank accounts, a large coin collection, and many other assets. The little Jack did not leave to them—part of his mineral interests worth some $90,000—Jack left to 12 Christian charities.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[4]" name="r[4]" style="color: #660099;">[4]</a></sup></div>
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In August 1998, Jack, then 71, suffered a stroke and was hospitalized for several weeks. When he returned home, the Archers assisted with his care. He regularly misidentified people, was delusional, and was sometimes disoriented. He never fully recovered.</div>
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A few weeks after Jack's stroke, Ted Anderson, an attorney and Jack's longtime friend, drafted durable and medical powers of attorney appointing himself as Jack's attorney-in-fact. Jack signed the documents, but his medical records showed that the day he signed them he was delusional and appeared confused. Anderson also tried to have Jack change his estate plan. Anderson proposed that Jack sell his ranch and transfer the proceeds into a charitable remainder trust with the 12 charities as beneficiaries so that Jack's entire estate would go to the charities and the Archers would be disinherited. Jack complained that Anderson was forcing him to sell the ranch against his will, so Anderson dropped the proposal.</div>
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Anderson then hired attorneys Richard Leshin and Buster Adami to draft estate planning documents for Jack. Jack began distancing himself from the Archers, and for a while they lost all contact. So in the fall of 1999, the Archers instituted guardianship proceedings for Jack in Blanco County. Leshin and Adami appeared for Jack and agreed to the appointment of temporary guardians of his person and estate. Leshin advised Anderson that further estate planning for Jack would have to await termination of the guardianship. But Anderson retained a new lawyer for Jack, who repudiated the agreed guardianship. At Anderson's request, Leshin had Jack sign wills and trust documents, all disinheriting the Archers and leaving Jack's entire estate to the charities. Leshin later testified that he received all his instructions from Anderson, did not talk with Jack before preparing the wills and trust documents, and knew doctors disagreed about Jack's mental capacity. Leshin also testified that he did not determine for himself whether Jack had the mental capacity to validly execute the documents but instead relied on Anderson's representations.</div>
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The Archers nonsuited the guardianship proceeding in Blanco County and refiled it in Bexar County. Over Jack's new attorney's opposition, the court appointed guardians of Jack's person and estate. After an accounting of Jack's estate was filed, showing that all his assets were in trust, the Archers learned of the wills and trust disinheriting them. Rather than wait until Jack's death and challenge the charities in a will contest, the Archers decided to immediately challenge the trust. The Archers agreed to pay their attorneys, who had been charging hourly rates, a contingent fee of 40% of all Jack's assets recovered. With Jack still alive, the Archers sued for a declaratory judgment that Jack had lacked the mental capacity to execute the wills and trust documents. The charities, the beneficiaries of the trust, were defendants. In May 2002, the parties settled. The charities agreed not to probate Jack's post-1991 wills, and the Archers agreed to give the charities Jack's coin collection and pay their attorney fees. Those fees and the value of the coin collection, which was in addition to what the charities would receive under Jack's 1991 will, totaled $588,054.</div>
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The Archers sued Anderson on Jack's behalf for breach of fiduciary duty, intentional infliction of emotional distress, and legal malpractice. The Archers also sued others on Jack's behalf and settled for, in their words, "hundreds of thousands of dollars". Anderson died in March 2006, and Jack died a month later. Jack's 1991 will was probated, and the Archers took their bequests under it. The following year, the Archers brought this action against Anderson's estate for intentional interference with their inheritance, alleging that Anderson influenced Jack to disinherit them. They concede that Anderson never profited personally from his efforts and that they have never been able to show his motivation other than some unexplained personal malice. They also concede that in the end, they received all that Jack left them in his 1991 will, but they claim as damages the $588,054 they gave the charities in settlement, plus $2,865,928 in attorney fees and litigation expenses they incurred avoiding Jack's post-1991 wills and trusts. The jury found in favor of the Archers but awarded only $2,006,150 in damages. The trial court rendered judgment on the verdict but added $588,054.</div>
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Both sides appealed. The court of appeals concluded that this Court has never recognized tortious interference with inheritance as a cause of action in Texas and deferred to this Court to decide whether to do so.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[5]" name="r[5]" style="color: #660099;">[5]</a></sup> The appeals court reversed and rendered judgment for Anderson.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[6]" name="r[6]" style="color: #660099;">[6]</a></sup> We granted the Archers' petition for review.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[7]" name="r[7]" style="color: #660099;">[7]</a></sup></div>
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<h2 style="background-color: white; border: 0px; color: #222222; font-family: Arial, sans-serif; margin: 1em 0px; padding: 0px; position: relative;">
II</h2>
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The Archers argue that tortious interference with an inheritance has long been part of Texas law, but as we noted at the outset, less than a year ago we stated in <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel v. Lindsey</i></a> that neither this Court nor the Legislature has ever recognized such an action.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[8]" name="r[8]" style="color: #660099;">[8]</a></sup>The appellate courts that have recognized the tort, we explained, largely relied on <a href="https://scholar.google.com/scholar_case?case=8712371211788597107&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>King v. Acker</i></a><i>,</i> a decision of the Court of Appeals for the First District of Texas in Houston.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[9]" name="r[9]" style="color: #660099;">[9]</a></sup><i>King</i> concluded that this Court impliedly recognized the cause of action in <i>Pope v. Garrett.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[10]" name="r[10]" style="color: #660099;">[10]</a></sup> But this, we said, was "an inaccurate reading of our precedent", and whether to recognize the tort remained "an open question" that could be answered only by weighing the factors that we have repeatedly held must be considered in determining whether to recognize a new cause of action.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[11]" name="r[11]" style="color: #660099;">[11]</a></sup> We declined to consider the matter further because the claimants had another adequate remedy—the imposition of a constructive trust.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[12]" name="r[12]" style="color: #660099;">[12]</a></sup></div>
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The court of appeals in the present case, which issued its opinion before <i>Kinsel,</i>correctly concluded that this Court has not recognized a tort of intentional interference with inheritance.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[13]" name="r[13]" style="color: #660099;">[13]</a></sup> Further, the court of appeals acknowledged, neither the appellate courts nor the trial courts should recognize the tort "in the first instance".<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[14]" name="r[14]" style="color: #660099;">[14]</a></sup> "Absent legislative or supreme court recognition of the existence of a cause of action," the court wrote, "we, as an intermediate appellate court, will not be the first to do so. We must . . . follow the existing law rather than change it".<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[15]" name="r[15]" style="color: #660099;">[15]</a></sup></div>
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Since <i>Kinsel,</i> both courts of appeals sitting in Houston have considered whether the tort should be recognized. In <a href="https://scholar.google.com/scholar_case?case=8891766734785296709&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Yost v. Fails</i></a><i>,</i> the Court of Appeals for the First District of Texas continued to follow its precedent, <i>King,</i> in holding that a cause of action for intentional interference with an inheritance exists.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[16]" name="r[16]" style="color: #660099;">[16]</a></sup> <i>Yost</i> neither cited <i>Kinsel</i> nor analyzed the factors for deciding whether to recognize a new cause of action; it simply followed <i>King.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[17]" name="r[17]" style="color: #660099;">[17]</a></sup> A few weeks later, in <i>Rice v. Rice,</i> the Court of Appeals for the Fourteenth District of Texas, also in Houston, reached the opposite conclusion.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[18]" name="r[18]" style="color: #660099;">[18]</a></sup> The court acknowledged that it had recognized the tort in <a href="https://scholar.google.com/scholar_case?case=300810890242593565&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brandes v. Rice Trust, Inc</i></a><i>.,</i> relying on <i>King,</i> which had relied on <i>Pope.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[19]" name="r[19]" style="color: #660099;">[19]</a></sup> But following <i>Kinsel</i>'s contrary analysis of <i>Pope,</i> the court concluded that it was relieved of its <i>stare decisis</i> obligation to follow <i>Brandes.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[20]" name="r[20]" style="color: #660099;">[20]</a></sup> Nor would it follow <i>Yost,</i> the <i>Rice</i> court said, because that court had neither cited <i>Kinsel</i> nor analyzed the factors noted in that case to be considered in determining whether to recognize a new cause of action.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[21]" name="r[21]" style="color: #660099;">[21]</a></sup> Ultimately, it concluded that the case before it did "not warrant an extension of existing law" because "the parties. . . already [had] an adequate remedy."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[22]" name="r[22]" style="color: #660099;">[22]</a></sup></div>
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The First and Fourteenth Courts of Appeals' 10-county districts completely overlap.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[23]" name="r[23]" style="color: #660099;">[23]</a></sup>Cases are randomly assigned between them.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[24]" name="r[24]" style="color: #660099;">[24]</a></sup> In the aftermath of <i>Kinsel,</i> judges, lawyers, and parties in cases in those districts must follow opposite rules: a cause of action for intentional interference with an inheritance does and may not exist. The concurring opinion minimizes this confusion, speculating that the cases will be relatively few, and courts will eventually follow <i>Kinsel</i>'s holding that a tort does not exist when there is another adequate remedy.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[25]" name="r[25]" style="color: #660099;">[25]</a></sup> As we will explain, whether to recognize a tort to provide an adequate remedy begs the question of what remedy is adequate. Existing remedies are not inadequate merely because they do not provide the relief a tort would. The fundamental difficulty with the tort is that it claims for the judiciary the authority to supplant or augment statutory probate law and settled remedies and principles whenever they are perceived to be unfair. Whether there will be many cases or few in the Houston courts of appeals districts and throughout Texas, we think we should avoid the waste of public and private resources arguing over a question we can answer, especially when the answer is as clear as we think it is.</div>
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III</h2>
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A</h2>
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Courts that have recognized the tort of intentional interference with inheritance have mostly relied on Section 774B of the <i>Restatement (Second) of Torts,</i> which provides that "[o]ne who by fraud, duress or other tortious means intentionally prevents another from receiving from a third person an inheritance or gift that he would otherwise have received is subject to liability to the other for loss of the inheritance or gift."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[26]" name="r[26]" style="color: #660099;">[26]</a></sup> Section 774B has been replaced by Section 18 of the <i>Restatement (Third) of Torts: Liability for Economic Harm,</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[27]" name="r[27]" style="color: #660099;">[27]</a></sup> which states:</div>
<blockquote style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 14px; margin: 1em 0px; padding: 0px 40px; position: relative;">
(1) A defendant is subject to liability for interference with an inheritance or gift if:</blockquote>
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(a) the plaintiff had a reasonable expectation of receiving an inheritance or gift;</blockquote>
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(b) the defendant committed an intentional and independent legal wrong;</blockquote>
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(c) the defendant's purpose was to interfere with the plaintiff's expectancy;</blockquote>
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(d) the defendant's conduct caused the expectancy to fail; and</blockquote>
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(e) the plaintiff suffered injury as a result.</blockquote>
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(2) A claim under this Section is not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court.</blockquote>
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Section 18(1) changes 4 elements of the tort:</div>
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• the inheritance or gift is one the plaintiff "had a reasonable expectation of receiving" rather than one the plaintiff "would otherwise have received";</blockquote>
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• the defendant must commit an "independent legal wrong" rather than act by "fraud, duress or other tortious means";</blockquote>
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• the defendant's conduct must "cause[] the expectancy to fail" rather than "prevent[] [the plaintiff] from receiving" the property; and</blockquote>
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• the plaintiff must incur simply an "injury" rather than the "loss of the inheritance or gift."</blockquote>
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None of these differences appears to be material. But Section 18(2) is a substantive change, at least insofar as it makes explicit that the tort is "not available to a plaintiff who had the right to seek a remedy for the same claim in a probate court."</div>
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While a cause of action for intentional interference with an inheritance might take other forms, we focus our analysis on Sections 774B and 18. We have repeatedly explained the policy analysis we use in deciding whether to recognize a new cause of action:</div>
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The considerations include social, economic, and political questions and their application to the facts at hand. We have weighed the risk, foreseeability, and likelihood of injury against the social utility of the actor's conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant. Also among the considerations are whether one party would generally have superior knowledge of the risk or a right to control the actor who caused the harm.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[28]" name="r[28]" style="color: #660099;">[28]</a></sup></blockquote>
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The issue here is not whether these considerations support remedies for misconduct that prevents a person from disposing of his estate as he wishes. They all certainly do. Rather, the issue is whether these considerations support additional or different remedies than those already afforded by statutory probate law and a suit in equity for unjust enrichment. We begin by examining the conflicts between existing law and the Section 774B and Section 18 tort and then turn to whether an additional tort remedy is needed.</div>
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B</h2>
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Harvard Law Professors John C.P. Goldberg and Robert H. Sitkoff have made a strong case against recognizing the tort in a lengthy article recently published in the <i>Stanford Law Review.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[29]" name="r[29]" style="color: #660099;">[29]</a></sup> They conclude that the tort</div>
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is conceptually and practically unsound. . . . [I]t is deeply problematic from the perspectives of both inheritance law and tort law. It undermines the core principle of freedom of disposition that undergirds American inheritance law. It invites circumvention of principled policies encoded in the specialized rules of procedure applicable in inheritance disputes. In many cases, it has displaced venerable and better-fitting causes of action for equitable relief. It has a derivative structure that violates the settled principle that torts identify and vindicate rights personal to the plaintiff. . . . [T]he emergence of the interference-with-inheritance tort is symptomatic of two related and unhealthy tendencies in modern legal thought: the forgetting of restitution and equitable remedies, and the treatment of tort as an unstructured delegation of power to courts to impose liability whenever doing so promises to deter antisocial conduct or compensate victims of such conduct.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[30]" name="r[30]" style="color: #660099;">[30]</a></sup></blockquote>
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There are opposing views, Professors Goldberg and Sitkoff acknowledge,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[31]" name="r[31]" style="color: #660099;">[31]</a></sup> but their rebuttals of contrary arguments are convincing.</div>
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Fundamentally, probate law protects a donor's right to freely dispose of his property as he chooses.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[32]" name="r[32]" style="color: #660099;">[32]</a></sup> An interference tort, it is argued, reinforces that protection.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[33]" name="r[33]" style="color: #660099;">[33]</a></sup> But a prospective beneficiary has no right to a future inheritance; he has only an expectation that is dependent on the donor's exercise of his own right. The tort of intentional interference with inheritance gives a beneficiary his own right, one he does not otherwise have. That right is sometimes said to be derivative of the donor's right, but the beneficiary's exercise of his own right may or may not protect the donor's right of free disposition.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[34]" name="r[34]" style="color: #660099;">[34]</a></sup> A beneficiary's interests and motives and those of his donor may be consistent, but they may also conflict. Family relationships and the very personal feelings they involve change. An expectancy is powerful motivation to ignore reality and misperceive a donor's true intent.</div>
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Intentional interference with inheritance is thus different from intentional interference with a business opportunity, another kind of expectancy. Like the beneficiary of an inheritance, a competitor has no right to a future opportunity.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[35]" name="r[35]" style="color: #660099;">[35]</a></sup> But he does have the right not to be disadvantaged by unfair competition that is tortious or wrongful.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[36]" name="r[36]" style="color: #660099;">[36]</a></sup> The plaintiff and defendant share that right, and the question is whether the defendant crossed the line. When there is unlawful interference with a commercial or business opportunity, tort law recognizes a remedy.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[37]" name="r[37]" style="color: #660099;">[37]</a></sup> A remedy is warranted because the defendant's unlawful behavior impeded the plaintiff's liberty interest, that is, "an interest in pursuing productive activity free from wrongful interference."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[38]" name="r[38]" style="color: #660099;">[38]</a></sup> The expectation of a prospective beneficiary is different. He has no right to fairness; he gets only what the donor chooses to give, fairly or unfairly. Probate law protects the donor's interest in making that choice freely.</div>
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Tort law "is ill-suited to posthumous reconstruction of the true intent of a decedent."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[39]" name="r[39]" style="color: #660099;">[39]</a></sup>Even before his death, a donor may not wish to disclose his true intentions, offending family and friends. Probate law employs specialized doctrines and procedures to arrive at the testator's true intent. Courts use principles of "undue influence" and "duress" to distinguish the unclear demarcation between legitimate persuasion and overbearing influence.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[40]" name="r[40]" style="color: #660099;">[40]</a></sup> These carefully developed doctrines take into account the context of "nuanced family dynamics and customs that are often inaccessible to outsiders."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[41]" name="r[41]" style="color: #660099;">[41]</a></sup></div>
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Moreover, the evidentiary rules and procedures in probate law strike a balance between honoring a testator's actions while addressing situations where those actions were wrongfully taken. "Safeguarding freedom of disposition requires the court to invalidate a disposition that was not volitional because it was procured by undue influence. But openness to circumstantial evidence facilitates the bringing of strike suits by disgruntled family members whom the decedent truly meant to exclude."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[42]" name="r[42]" style="color: #660099;">[42]</a></sup> This justifies the rule that a will contestant has the burden of proving that a will was wrongfully procured.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[43]" name="r[43]" style="color: #660099;">[43]</a></sup>These and other carefully constructed provisions were enacted by the Legislature and should be respected. It is not prudent for the Court to recognize a new tort simply because probate procedures sometimes present hardships or even bar a plaintiff's recovery.</div>
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Comment a to Section 18 states that the tort "is not meant to interfere with probate law or to provide a way for a plaintiff to avoid its limits and restrictions" but is "to provide relief when . . . no remedy is available in probate."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[44]" name="r[44]" style="color: #660099;">[44]</a></sup> It is not enough, according to comment c, that probate law "offers less generous relief than would be attainable in tort."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[45]" name="r[45]" style="color: #660099;">[45]</a></sup> The tort is available only "if a probate court, for whatever reason, lacks the power to provide redress."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[46]" name="r[46]" style="color: #660099;">[46]</a></sup> But limits on a probate court's power are among the "limits and restrictions" of probate law with which the tort "is not meant to interfere".<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[47]" name="r[47]" style="color: #660099;">[47]</a></sup> Given probate law's extensive and thorough provisions to protect an owner's free devise of his property, the lack of further remedies must be viewed not as legislative oversight but legislative choice.</div>
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C</h2>
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A tort of intentional interference with inheritance is needed, it is argued, as a gap-filler when probate and other law do not provide an adequate remedy.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[48]" name="r[48]" style="color: #660099;">[48]</a></sup> Texas law thoroughly governs inheritance through probate and restitution and, as we noted in <i>Kinsel,</i> provides remedies for unfairness, such as a constructive trust.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[49]" name="r[49]" style="color: #660099;">[49]</a></sup> If these remedies are inadequate, it is because of legislative choice or inaction, and filling them is work better suited for further legislation than judicial adventurism.</div>
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A court already has broad authority to rectify inequity using a constructive trust in an action for restitution to prevent unjust enrichment.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[50]" name="r[50]" style="color: #660099;">[50]</a></sup> As early as the first <i>Restatement of Restitution,</i> published in 1937, the underlying principle has been stated as thus: "Where a disposition of property by will or an intestacy is procured by fraud, duress or undue influence, the person acquiring the property holds it upon a constructive trust, unless adequate relief can otherwise be given in a probate court."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[51]" name="r[51]" style="color: #660099;">[51]</a></sup> Most recently, the <i>Restatement (Third) of Restitution and Unjust Enrichment</i> explains liability in restitution owing to wrongful interference with a donor's freedom of disposition as follows: "If assets that would otherwise have passed by donative transfer to the claimant are diverted to another recipient by fraud, duress, undue influence, or other intentional misconduct, the recipient is liable to the claimant for unjust enrichment."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[52]" name="r[52]" style="color: #660099;">[52]</a></sup> The doctrine, therefore, is malleable to fit the particular needs of each situation.</div>
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"[R]estitution by way of constructive trust" operates as "a gap-filling complement, rather than a rival, to the will contest in probate."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[53]" name="r[53]" style="color: #660099;">[53]</a></sup> Most importantly, the body of restitution law "is sensitive to `the rules of procedure, standards of proof, and limitations periods applicable in probate cases,' so that [it] cannot be used `to circumvent' probate[] . . . procedures."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[54]" name="r[54]" style="color: #660099;">[54]</a></sup> In <i>Kinsel,</i> we concluded that the constructive trust remedy was adequate to redress the alleged injuries.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[55]" name="r[55]" style="color: #660099;">[55]</a></sup> Suits on established torts, such as fraud, conversion, theft, and breach of fiduciary duty, as well as suit under the Declaratory Judgment Act, may also be available. The Court has never been persuaded that the remedies provided by probate law and established torts are inadequate.</div>
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In <i>Kinsel,</i> we left open the possibility that situations could arise to justify recognition of the tort of intentional interference with inheritance, but we did not hint at what they might be.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[56]" name="r[56]" style="color: #660099;">[56]</a></sup> Nor are we able to do so. Professor Diane Klein, a prominent proponent of the tort, posits 4 specific factual scenarios in which the probate system falls short, justifying the need for a tort action. None of the situations warrants recognition of the tort.</div>
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One scenario is when an intestate heir tortiously induces the testator to make a will that is more favorable to the tortfeasor than to another heir.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[57]" name="r[57]" style="color: #660099;">[57]</a></sup> The estate's payment of the expenses of a good-faith will contest would diminish the value of the challenger's share, and if the will is struck down, the tortfeasor would still collect through intestacy or a prior will, leaving the offender unpunished.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[58]" name="r[58]" style="color: #660099;">[58]</a></sup> But the rule that costs of a good-faith will contest are paid from the estate is established by the law of probate.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[59]" name="r[59]" style="color: #660099;">[59]</a></sup> Good policy arguments can certainly be made that the rule punishes the innocent and provides no deterrence to wrongdoing. But to use this example to argue for a tort remedy is to say, not that probate law is inadequate, but that it is wrong, and that courts should circumvent legislative policy.</div>
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Another proffered scenario justifying recognition of the tort is when a would-be beneficiary lacks standing to contest a will.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[60]" name="r[60]" style="color: #660099;">[60]</a></sup> But standing rules are broad. A person interested in the outcome of an estate plan has standing,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[61]" name="r[61]" style="color: #660099;">[61]</a></sup> including anyone having "a property right in or claim against [the] estate being administered".<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[62]" name="r[62]" style="color: #660099;">[62]</a></sup> An interested person also may file an application admitting a will to probate, even when the will has been destroyed.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[63]" name="r[63]" style="color: #660099;">[63]</a></sup> To the extent that these rules might not include someone with some expectation of a gift is, again, a legislative choice.</div>
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A third situation posited by Professor Klein is when someone obtains a gift in place of the testator's originally named beneficiary through undue influence.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[64]" name="r[64]" style="color: #660099;">[64]</a></sup> Even if the will provision is invalidated in probate, it is argued, the gift may not be restored, and the tortfeasor will not be penalized.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[65]" name="r[65]" style="color: #660099;">[65]</a></sup> The tortfeasor may even still benefit if he is a residuary beneficiary.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[66]" name="r[66]" style="color: #660099;">[66]</a></sup> Further, the wrongdoing may be concealed until probate is closed. But in such circumstances, restitution may afford relief, and if the relief is lacking, the reason is legislative choice. Against the policy argument for relief is the policy argument that probate proceedings should not be retried in a tort action, certainly a reasonable view.</div>
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Professor Klein's fourth scenario is when a tortfeasor uses undue influence or fraud to induce the testator to make inter vivos transfers depleting the estate.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[67]" name="r[67]" style="color: #660099;">[67]</a></sup> The transfers might not be discovered until after the testator's death, and while the property might be recovered through restitution, it might also be beyond reach. But the limits of restitution simply recognize that not every wrong can be remedied.</div>
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The factual scenarios posited by Professor Klein are by no means an exhaustive list of cases in which proponents of recognizing the tort argue that it is necessary to fill a gap left open by probate procedures. Still, we are unable to imagine a situation in which the lack of a full remedy is not a legislative choice or a matter for targeted legislative amendments to probate law and procedures. A general interference tort is not a solution.</div>
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The Archers argue that probate and other remedies are inadequate because they do not allow recovery of their attorney fees incurred in setting aside Jack's post-1991 wills and trust and their expenses in settling with the charities. But settling their declaratory judgment action against the charities was the Archers' choice, as were their decisions not to seek attorney fees against the charities and to pay the charities' fees. The Archers argue that their remedies were inadequate because they did not punish Anderson, the wrongdoer. And they argue more broadly that a beneficiary wrongfully deprived of an inheritance should not be limited to reimbursement of expenses by the estate in a will contest.</div>
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At bottom, the Archers' argument is for a different probate process than the Legislature has created, specifically attorney fee shifting so that an award of fees does not diminish the estate. We agree generally that the law should discourage wrongdoing and punish wrongdoers. But the Archers asserted 3 other causes of action against Anderson—breach of fiduciary duty, intentional infliction of emotional distress, and legal malpractice. The law provided adequate remedies for the Archers' injuries. Even if a tort of intentional interference with inheritance were recognized, the Archers would not recover based on <i>Kinsel.</i><sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[68]" name="r[68]" style="color: #660099;">[68]</a></sup></div>
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But the case prompts us to answer the question left open there. We have now had 2 opportunities in successive Terms to consider the creation of a new tort. Neither case calls for one, and the circumstances involved in each, along with thorough analyses of the issues in judicial opinions and legal scholarship, provide compelling reasons not to recognize the tort.</div>
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The concurring opinion's "overriding concern" is that we have too little information to know whether to recognize the tort of intentional interference with inheritance.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[69]" name="r[69]" style="color: #660099;">[69]</a></sup> In the concurring opinion's view, there is little risk in deferring the issue again, as we did in <i>Kinsel.</i> There do not appear to be many such cases, and the risk of confusion, the concurring opinion believes, is low.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[70]" name="r[70]" style="color: #660099;">[70]</a></sup> The concurring opinion argues that courts will get the message after <i>Kinsel</i> that the tort would only be available in extraordinary circumstances.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[71]" name="r[71]" style="color: #660099;">[71]</a></sup> We do not share so rosy a view of things. We have called the tort of intentional infliction of emotional distress a "gap-filler",<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[72]" name="r[72]" style="color: #660099;">[72]</a></sup> but it is nevertheless invoked in a great many cases. We believe the bench, bar, and public deserve a straight answer when one is as clear as here.</div>
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We share fully, of course, the concurring opinion's concern that the elderly and disabled not be taken advantage of. But all the good efforts to assure their protection to which the concurring opinion points are legislative.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[73]" name="r[73]" style="color: #660099;">[73]</a></sup> The concurring opinion argues that a new tort is needed to assure free disposition of estates.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[74]" name="r[74]" style="color: #660099;">[74]</a></sup> But as we have noted, the tort creates rights in expectancies that are often in conflict with those of property owners. With our state's extensive, settled probate procedures and its attention to and improvements in guardianship processes,<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[75]" name="r[75]" style="color: #660099;">[75]</a></sup> the Legislature has shown itself to be active and creative in protecting the vulnerable. An expansion of tort law is not needed.</div>
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Importantly, the concurring opinion agrees that "the Archers had adequate remedies"<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[76]" name="r[76]" style="color: #660099;">[76]</a></sup>even though those remedies do not allow them to recover their attorney fees and settlement costs in litigating with the charities. The concurring opinion does not explain why the limits of the law of probate and unjust enrichment might be expanded for some, just not the Archers. Our decision that any expansion should be left to the Legislature is a principled reason for concluding that the Archers' remedies were adequate. The concurring opinion does not agree with our analysis but offers no reason of its own for reaching the same conclusion.</div>
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Finally, the concurring opinion argues that other states that have recognized the tort "have adopted what are seemingly pragmatic and workable standards."<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[77]" name="r[77]" style="color: #660099;">[77]</a></sup> If that is true, and it is far from clear what the effects of the tort have been in other jurisdictions, we think a new tort is not needed in Texas. The fundamental question is why tort law should provide a remedy in disregard of the limits of statutory probate law. We think here it should not.</div>
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The tort of intentional interference with inheritance is not recognized in Texas. The decisions of the courts of appeals to the contrary are overruled.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[78]" name="r[78]" style="color: #660099;">[78]</a></sup></div>
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The judgment of the court of appeals is</div>
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<i>Affirmed.</i></div>
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<i><br /></i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[1]" name="[1]" style="color: #660099;">[1]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">526 S.W.3d 411, 423 (Tex. 2017)</a> ("Neither our precedent nor the Legislature has blessed tortious interference with an inheritance as a cause of action in Texas. Its viability is an open question.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[2]" name="[2]" style="color: #660099;">[2]</a> 490 S.W.3d 175 (Tex. App.-Austin 2016).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[3]" name="[3]" style="color: #660099;">[3]</a> Five of the children—Carol A. Bugg, David B. Archer, John V. Archer, Karen A. Ball, and Sherri Archer—are petitioners. The sixth, James Michael Archer, has never been a party to the suit. Their father, Richard, died in 2009, prior to trial. In our review of the events leading up to this case, we mean by "the Archers" the Richard Archer family. In discussing the contentions of the parties, we use "the Archers" to refer to Richard Archer's 5 children who remain parties to the case.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[4]" name="[4]" style="color: #660099;">[4]</a> The charities were Campus Crusade for Christ at Arrowhead Springs, San Benito, California; Young Life, Corpus Christi, Texas; Child Evangelism Fellowship, Warrenton, Missouri; Laity Lodge, Kerrville, Texas; Christian Associates International, Orange, Ca1ifornia; Bill Glass Evangelistic Association, Dallas, Texas; Agape Foundation, Donna, Texas; The Bible League, South Holland, Illinois; Moral Majority, Forrest, Virginia; Intervarsity Christian Fellowship, Madison, Wisconsin; James Robison Ministries, Fort Worth, Texas; and Prison Fellowship Ministries, Washington, D.C.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[5]" name="[5]" style="color: #660099;">[5]</a> 490 S.W.3d at 177.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[6]" name="[6]" style="color: #660099;">[6]</a> <i>Id.</i> at 179.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[7]" name="[7]" style="color: #660099;">[7]</a> 60 Tex. Sup. Ct. J. 1230 (June 16, 2017).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[8]" name="[8]" style="color: #660099;">[8]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">526 S.W.3d 411, 423 (Tex. 2017)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[9]" name="[9]" style="color: #660099;">[9]</a> <i>Id.</i> (citing <a href="https://scholar.google.com/scholar_case?case=8712371211788597107&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>King v. Acker,</i> 725 S.W.2d 750 (Tex. App.-Houston [1st Dist.] 1987, no writ)</a>).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[10]" name="[10]" style="color: #660099;">[10]</a> <a href="https://scholar.google.com/scholar_case?case=8712371211788597107&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>King,</i> 725 S.W.2d at 754</a> (citing <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=4103948875968475689&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Pope v. Garrett,</i> 204 S.W.2d 867 (Tex. Civ. App.-Galveston 1947),</a> <i>rev'd in part,</i> <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=15213256189274271294&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;">211 S.W.2d 559, 562 (Tex. 1948)</a>).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[11]" name="[11]" style="color: #660099;">[11]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel,</i> 526 S.W.3d at 423-424 & n.6</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[12]" name="[12]" style="color: #660099;">[12]</a> <i>Id.</i> at 424.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[13]" name="[13]" style="color: #660099;">[13]</a> 490 S.W.3d 175, 177 (Tex. App.-Austin 2016).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[14]" name="[14]" style="color: #660099;">[14]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[15]" name="[15]" style="color: #660099;">[15]</a> <i>Id.</i> (citations omitted).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[16]" name="[16]" style="color: #660099;">[16]</a> <a href="https://scholar.google.com/scholar_case?case=8891766734785296709&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">534 S.W.3d 517, 529-530 (Tex. App.-Houston [1st Dist.] 2017, no pet.)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[17]" name="[17]" style="color: #660099;">[17]</a> <i>See id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[18]" name="[18]" style="color: #660099;">[18]</a> <a href="https://scholar.google.com/scholar_case?case=2931524069374234031&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">533 S.W.3d 58, 62-63 (Tex. App.-Houston [14th Dist.] 2017, no pet.)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[19]" name="[19]" style="color: #660099;">[19]</a> <i>Id.</i> at 60 (citing <a href="https://scholar.google.com/scholar_case?case=300810890242593565&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brandes v. Rice Trust, Inc.,</i> 966 S.W.2d 144, 146-147 (Tex. App.-Houston [14th Dist.] 1998, pet. denied)</a> (acknowledging <i>King</i>'s holding "that a cause of action for tortious interference with inheritance rights exists in Texas" (quoting <a href="https://scholar.google.com/scholar_case?case=8712371211788597107&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>King v. Acker,</i> 725 S.W.2d 750, 754 (Tex. App.-Houston [1st Dist.] 1987, no writ)</a>))).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[20]" name="[20]" style="color: #660099;">[20]</a> <i>Id.</i> at 62.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[21]" name="[21]" style="color: #660099;">[21]</a> <i>Id.</i> at 63.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[22]" name="[22]" style="color: #660099;">[22]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[23]" name="[23]" style="color: #660099;">[23]</a> <i>See</i> TEX. GOV'T CODE § 22.201(b), (o); <i>see also id.</i> §§ 22.202-.2021, -.215.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[24]" name="[24]" style="color: #660099;">[24]</a> <i>Id.</i> § 22.202(h).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[25]" name="[25]" style="color: #660099;">[25]</a> <i>Post</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[26]" name="[26]" style="color: #660099;">[26]</a> RESTATEMENT (SECOND) OF TORTS § 774B (AM. LAW INST. 1979).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[27]" name="[27]" style="color: #660099;">[27]</a> RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM § 18 (AM. LAW INST., Tentative Draft No. 3, approved May 21, 2018).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[28]" name="[28]" style="color: #660099;">[28]</a> <a href="https://scholar.google.com/scholar_case?case=9862657802783947985&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Pagayon v. Exxon Mobil Corp.,</i> 536 S.W.3d 499, 504 (Tex. 2017)</a> (quoting <a href="https://scholar.google.com/scholar_case?case=880439261860509790&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Humble Sand & Gravel, Inc. v. Gomez,</i> 146 S.W.3d 170, 182 (Tex. 2004)</a>); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel v. Lindsey,</i> 526 S.W.3d 411, 423-424 n.6 (Tex. 2017)</a>; <a href="https://scholar.google.com/scholar_case?case=6880716916198538956&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Ritchie v. Rupe,</i> 443 S.W.3d 856, 878 (Tex. 2014)</a>; <a href="https://scholar.google.com/scholar_case?case=13580576374315523710&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Roberts v. Williamson,</i> 111 S.W.3d 113, 118 (Tex. 2003)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[29]" name="[29]" style="color: #660099;">[29]</a> John C.P. Goldberg & Robert H. Sitkoff, <i>Torts and Estates: Remedying Wrongful Interference with Inheritance,</i> 65 STAN. L. REV. 335 (2013).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[30]" name="[30]" style="color: #660099;">[30]</a> <i>Id.</i> at 335-336.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[31]" name="[31]" style="color: #660099;">[31]</a> Specifically, their article notes that Professor Diane J. Klein at the University of La Verne College of Law has written most extensively in favor of recognizing the tort. <i>See id.</i> at 363 & n.188, 365 n.198; <i>see also</i> Diane J. Klein, <i>"Go West, Disappointed Heir": Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the Pacific States,</i> 13 LEWIS & CLARK L. REV. 209 (2009); Diane J. Klein, <i>River Deep, Mountain High, Heir Disappointed: Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the Mountain States,</i> 45 IDAHO L. REV. 1 (2008); Diane J. Klein, <i>A Disappointed Yankee in Connecticut (or Nearby) Probate Court: Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the First, Second, and Third Circuits,</i> 66 U. PITT. L. REV. 235 (2004) [hereinafter <i>A Disappointed Yankee in Connecticut</i>]; Diane J. Klein, <i>The Disappointed Heir's Revenge, Southern Style: Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the Fifth and Eleventh Circuits,</i> 55 BAYLOR L. REV. 79 (2003).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[32]" name="[32]" style="color: #660099;">[32]</a> Goldberg & Sitkoff, <i>supra</i> note 29, at 338.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[33]" name="[33]" style="color: #660099;">[33]</a> <i>A Disappointed Yankee in Connecticut, supra</i> note 31, at 238-240.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[34]" name="[34]" style="color: #660099;">[34]</a> Goldberg & Sitkoff, <i>supra</i> note 29, at 379.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[35]" name="[35]" style="color: #660099;">[35]</a> <i>See id.</i> at 387; <a href="https://scholar.google.com/scholar_case?case=11393266327735938930&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Wal-Mart Stores, Inc. v. Sturges,</i> 52 S.W.3d 711, 727 (Tex. 2001)</a> (observing that cases involving tortious interference with prospective business relations involve "two parties . . . competing for interests to which neither is entitled").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[36]" name="[36]" style="color: #660099;">[36]</a> <i>See</i> Goldberg & Sitkoff, <i>supra</i> note 29, at 387; <a href="https://scholar.google.com/scholar_case?case=11393266327735938930&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Wal-Mart Stores, Inc.,</i> 52 S.W.3d at 726</a> ("We therefore hold that to recover for tortious interference with a prospective business relation a plaintiff must prove that the defendant's conduct was independently tortious or wrongful.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[37]" name="[37]" style="color: #660099;">[37]</a> <a href="https://scholar.google.com/scholar_case?case=11393266327735938930&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Wal-Mart Stores, Inc.,</i> 52 S.W.3d at 726</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[38]" name="[38]" style="color: #660099;">[38]</a> Goldberg & Sitkoff, <i>supra</i> note 29, at 387-388.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[39]" name="[39]" style="color: #660099;">[39]</a> <i>Id.</i> at 338.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[40]" name="[40]" style="color: #660099;">[40]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[41]" name="[41]" style="color: #660099;">[41]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[42]" name="[42]" style="color: #660099;">[42]</a> <i>Id.</i> at 346 (footnotes omitted).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[43]" name="[43]" style="color: #660099;">[43]</a> <i>See id.</i> ("The contestant normally has the burden of proving that a will was procured by undue influence.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[44]" name="[44]" style="color: #660099;">[44]</a> RESTATEMENT (THIRD) OF TORTS: LIAB. FOR ECON. HARM § 18 cmt. a (AM. LAW INST., Tentative Draft No. 3, approved May 21, 2018).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[45]" name="[45]" style="color: #660099;">[45]</a> <i>Id.</i> cmt. c.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[46]" name="[46]" style="color: #660099;">[46]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[47]" name="[47]" style="color: #660099;">[47]</a> <i>Id.</i> cmt. a.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[48]" name="[48]" style="color: #660099;">[48]</a> Goldberg & Sitkoff, <i>supra</i> note 29, at 365.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[49]" name="[49]" style="color: #660099;">[49]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">526 S.W.3d 411, 425 (Tex. 2017)</a> ("A constructive trust is an equitable, court-created remedy designed to prevent unjust enrichment." (quoting <a href="https://scholar.google.com/scholar_case?case=3731426121929834668&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>KCM Fin. LLC v. Bradshaw,</i> 457 S.W.3d 70, 87 (Tex. 2015)</a>)).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[50]" name="[50]" style="color: #660099;">[50]</a> <i>See</i> Goldberg & Sitkoff, <i>supra</i> note 29, at 350 ("A constructive trust is a flexible remedy that courts of equity have long used to prevent unjust enrichment."); <a href="https://scholar.google.com/scholar_case?case=13170069853788447047&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Meadows v. Bierschwale,</i> 516 S.W.2d 125, 131 (Tex. 1974)</a>("Constructive trusts, being remedial in character, have the very broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice.").</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[51]" name="[51]" style="color: #660099;">[51]</a> RESTATEMENT (FIRST) OF RESTITUTION § 184 (AM. LAW INST. 1937).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[52]" name="[52]" style="color: #660099;">[52]</a> RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 46(1) (AM. LAW INST. 2011).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[53]" name="[53]" style="color: #660099;">[53]</a> Goldberg & Sitkoff, <i>supra</i> note 29, at 351.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[54]" name="[54]" style="color: #660099;">[54]</a> <i>Id.</i> (quoting RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 46 cmt. c).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[55]" name="[55]" style="color: #660099;">[55]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">526 S.W.3d 411, 424 (Tex. 2017)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[56]" name="[56]" style="color: #660099;">[56]</a> <i>See id.</i> at 423-425.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[57]" name="[57]" style="color: #660099;">[57]</a> <i>See A Disappointed Yankee in Connecticut, supra</i> note 31, at 247.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[58]" name="[58]" style="color: #660099;">[58]</a> <i>Id.</i></div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[59]" name="[59]" style="color: #660099;">[59]</a> TEX. EST. CODE § 352.052(a)-(b).</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[60]" name="[60]" style="color: #660099;">[60]</a> <i>A Disappointed Yankee in Connecticut, supra</i> note 31, at 247.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[61]" name="[61]" style="color: #660099;">[61]</a> TEX. EST. CODE § 55.001.</div>
<div style="position: relative;">
<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[62]" name="[62]" style="color: #660099;">[62]</a> <i>Id.</i> § 22.018(1).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[63]" name="[63]" style="color: #660099;">[63]</a> <i>Id.</i> § 256.051(a).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[64]" name="[64]" style="color: #660099;">[64]</a> <i>A Disappointed Yankee in Connecticut, supra</i> note 31, at 248.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[65]" name="[65]" style="color: #660099;">[65]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[66]" name="[66]" style="color: #660099;">[66]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[67]" name="[67]" style="color: #660099;">[67]</a> <i>Id.</i></div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[68]" name="[68]" style="color: #660099;">[68]</a> <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">526 S.W.3d 411, 424 (Tex. 2017)</a> (holding that the plaintiffs were not entitled to recover for tortious interference with an inheritance because a constructive trust provided an adequate remedy).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[69]" name="[69]" style="color: #660099;">[69]</a> <i>Post</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[70]" name="[70]" style="color: #660099;">[70]</a> <i>Id.</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[71]" name="[71]" style="color: #660099;">[71]</a> <i>Id.</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[72]" name="[72]" style="color: #660099;">[72]</a> <a href="https://scholar.google.com/scholar_case?case=14825243029392433364&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Standard Fruit & Vegetable Co. v. Johnson,</i> 985 S.W.2d 62, 68 (Tex. 1998)</a>.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[73]" name="[73]" style="color: #660099;">[73]</a> <i>See post</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[74]" name="[74]" style="color: #660099;">[74]</a> <i>Id.</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[75]" name="[75]" style="color: #660099;">[75]</a> <i>See, e.g.,</i> TEX. EST. CODE § 1101.151(a) (providing for court appointment of a guardian with full authority over an incapacitated person upon a finding "that the proposed ward is totally without capacity to care for himself or herself, manage his or her property, operate a motor vehicle, make personal decisions regarding residence, and vote in a public election"); TEX. GOV'T CODE § 155.102 (requiring certification for certain guardians).</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[76]" name="[76]" style="color: #660099;">[76]</a> <i>Post</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[77]" name="[77]" style="color: #660099;">[77]</a> <i>Id.</i> at ___.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[78]" name="[78]" style="color: #660099;">[78]</a> These include <a href="https://scholar.google.com/scholar_case?case=8891766734785296709&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Yost v. Fails,</i> 534 S.W.3d 517, 530 (Tex. App.-Houston [1st Dist.] 2017, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=2022869650674658308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Stern v. Marshall,</i> 471 S.W.3d 498, 516 (Tex. App.-Houston [1st Dist.] 2015, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=5136010934797137333&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>In re Estate of Valdez,</i> 406 S.W.3d 228, 233 (Tex. App.-San Antonio 2013, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=3211961066612024035&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>In re Estate of Russell,</i> 311 S.W.3d 528, 535 (Tex. App.-El Paso 2009, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=300810890242593565&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brandes v. Rice Trust, Inc.,</i> 966 S.W.2d 144, 146-147 (Tex. App.-Houston [14th Dist.] 1998, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=8712371211788597107&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>King v. Acker,</i> 725 S.W.2d 750, 754 (Tex. App.-Houston [1st Dist.] 1987, no writ)</a>.</div>
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<span style="color: #cc0000; font-size: large;"><b>JUSTICE JOHNSON, joined by JUSTICE LEHRMANN, JUSTICE BOYD, and JUSTICE BROWN, concurring in part and dissenting in part, and concurring in the judgment.</b></span></div>
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I. It's Too Soon</h2>
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I agree with the Court's conclusion that in this case, as was the situation in <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel v. Lindsey,</i> 526 S.W.3d 411 (Tex. 2017),</a> there is no need to allow the Archers<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#[79]" name="r[79]" style="color: #660099;">[1]</a></sup> to recover for harm they suffered due to Ted Anderson's intentional interference with the inheritance benefit that in reasonable likelihood they were to receive from Jack Archer. That is because the Archers had adequate remedies otherwise. <i>Ante</i> at ___. But just as the Court did not see the need to completely reject the cause of action in <i>Kinsel,</i> I see no need to do so today. To the contrary, I see the need <i>not</i> to do so. Accordingly, I join the Court's judgment but dissent from its blanket rejection of the type of cause of action the Archers asserted. The cause of action is designed to protect persons damaged by another's intentional interference with a benefit that the persons in reasonable likelihood would have received as an inheritance absent the interference. The exact label and elements of such a cause of action vary slightly from jurisdiction to jurisdiction, between the Restatement (Second) of Torts and the Restatement (Third) of Torts, and commentator to commentator. <i>See ante</i> at ___ (discussing amendments to the Restatement); <i>see generally</i> Diane J. Klein, <i>River Deep, Mountain High, Heir Disappointed: Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the Mountain States,</i> 45 IDAHO L. REV. 1 (2008) (discussing the adoption of the cause of action in the various Mountain States). The Court refers to the cause of action generally as "intentional interference with inheritance," so for consistency and ease of reference, I will also use that label.</div>
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The Court says that probate law protects a donor's right in freely choosing how to dispose of his or her property. <i>Ante</i> at ___. Of course it does, at least to a large degree. But not always. Where I part ways with the Court is over its conclusion that there are and will be no circumstances under which a tort for intentional interference with inheritance need be available to Texans, even though such a cause of action might be the only viable avenue of relief against someone who wrongfully took or diverted assets in frustration of the asset owner's intent. The Court's justification? "Because existing law affords adequate remedies for the wrongs the tort [of intentional interference with an inheritance] would redress, and because the tort would conflict with Texas probate law. . . ." <i>Ante</i> at ___.</div>
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I disagree with both reasons. As to the first reason, I disagree that the Court can realistically predict that the law in its current state affords adequate remedies for all situations that might arise in the future where bad actors wrongfully relieve elderly persons of assets intended for others. With respect, the Court's confidence in existing remedies is too great in light of human experience with those among us who prey on the elderly. As to the second reason, the cause of action would not conflict with probate law but would augment it when properly cabined in. Both probate law and the cause of action for intentional interference with inheritance are designed to protect persons' rights to transfer their property to whomever they choose.</div>
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At a minimum, withholding a decision about whether to recognize or reject the tort until the full effects of our decision in <i>Kinsel</i> can be seen and evaluated poses little downside. To begin with, <i>Kinsel</i> and this case are the first two cases in which the Court has directly addressed the cause of action. Next, the courts of appeals have considered the cause of action in only a relatively small number of cases, and that small number does not portend a large number of such claims waiting to be pursued. That is especially so in light of our explaining the limits of the cause of action in <i>Kinsel.</i> And an increase in cases would be even less likely if, in this case, we were to follow and reinforce <i>Kinsel</i>'s lead. Were we to do so, then between <i>Kinsel</i> and this case, we would have firmly clarified just when the cause of action could be maintained: only if no other theory of liability or avenue of relief is available. Under the circumstances, there likely would be little confusion about if and when the cause of action would be viable.</div>
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II. Diminished Capacity in the Elderly — A Growing Issue</h2>
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Jack Archer's stroke left him with diminished capacity to manage his affairs and susceptible to manipulation by his long-time friend, Anderson. Anderson did not take advantage of Jack's condition to benefit himself. But whether his actions benefitted him is not the real question. The question is who had the right to determine how Jack's assets would be disposed of and who would receive his estate. Here, the evidence supports the jury's finding that Anderson did not, and that his actions in relation to Jack, Jack's assets, and Jack's estate were tortious.</div>
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Jack's condition of diminished capacity is not unusual among the aging population where stroke, illness, or just the general infirmities of age can reduce the ability to manage one's affairs generally, properly care for one's business and assets, and resist the influence of others over those decisions. Such reduced capacity creates opportunities for the elderly to be taken advantage of, even to the point of their being persuaded or coerced into taking actions that directly contradict earlier, competently professed desires regarding disposition of their estates, as happened with Jack. The problem is not inconsequential and it is growing. Texas has the third largest elderly population among the states. <i>See</i> TEXAS DEMOGRAPHIC CTR., AGING IN TEXAS: INTRODUCTION 2-3 (2016) (defining "older" or "elder" population as "those aged 65 years and older"). The elderly population in Texas grew by 49.5% from nearly 2.1 million in 2000 to nearly 3.1 million in 2014. <i>Id.</i> at 3. This type of growth will inexorably lead to more and more Texans being in the position in which Jack and the Archer family found themselves—an older person with diminished capacity being taken advantage of to the detriment of that person's desires as expressed before his capacity became diminished, or if no desires had been expressed, then to the detriment of the natural objects of his affections.</div>
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Texas is making progress in providing protections for its aging citizens and their assets. <i>See, e.g.,</i> TEX. EST. CODE § 1101.151 (providing for the court appointment of a guardian with full authority over an incapacitated person upon a finding that the proposed ward is totally without capacity to care for himself, manage his property, operate a motor vehicle, make personal decisions regarding residence, and vote in a public election); TEX. GOV'T CODE § 155.102 (requiring certification for certain guardians). This Court has brought issues relating to Texas's expanding elderly population to the forefront in several ways. Two of these are the establishment of a Working Interdisciplinary Network of Guardianship Stakeholders (WINGS), and calling for the Texas Judicial Council, the policy-making body of the judicial branch of government, to study issues related to the aging population and make recommendations for reforming Texas's approach to issues involving our elderly.</div>
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But even with these efforts, experience teaches that where there is opportunity for persons to take advantage of others, they will do so in inventive and unusual ways that simply cannot be fully anticipated. In written testimony to the United States House of Representatives Committee on Ways and Means dated March 22, 2017, David Slayton, the Administrative Director for the Texas Office of Court Administration (OCA), reported that pursuant to a pilot project to assist Texas courts in monitoring guardianship cases, OCA has reviewed over 13,600 guardianship cases in fourteen Texas counties. According to Slayton's testimony:</div>
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1. As of December 31, 2016, there were 51,388 active guardianships in Texas; the number had increased by 37% in the preceding five years; guardianships were one of the fastest growing case types in the state; and the estimated value of estates under guardianship in Texas exceeded 5 billion dollars.</blockquote>
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2. The majority of guardians appointed in Texas are licensed attorneys, family members, or friends of the ward.</blockquote>
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3. Forty-three percent of guardianship cases were out of compliance with reporting requirements of law, and the large majority of those cases were cases in which family members of friends were guardians.</blockquote>
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4. A review of accountings that <i>were</i> filed showed that on a regular basis there were: unauthorized withdrawals from accounts, unauthorized gifts to family members and friends; unsubstantiated and unauthorized expenses, and a lack of backup data to substantiate accountings.</blockquote>
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<i>Examining the Social Security Administration's Representative Payee Program: Joint Hearing on Who Provides Help Before the Oversight Subcomm. and Social Sec. Subcomm. of the H. Ways & Means Comm.,</i> 115th Cong. (2017) (statement of David Slayton, Administrative Director, Office of Court Administration, Texas Judicial Branch).</div>
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The OCA study did not include the innumerable elderly for whom no formal guardianship was established, as was Jack's situation from August 1998 until December 1999. And even if formal guardianship proceedings have shortcomings in protecting the elderly with diminished capacity and their assets as is shown by the OCA's study, how much more protection do the elderly with diminished capacity need when there is no formal guardianship and no pretense of supervision such as is provided for in a formal guardianship proceeding? In my view, much. And the family or other persons who have expectations of inheriting from an older family member or friend are logically the most likely to raise the question of whether improper advantage has been taken of an older person. This case demonstrates how such a tort, properly limited, works to enforce the principle that when testators have freely made provision for disposition of their estates, those decisions will be protected by the law.</div>
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III. An Expectancy Based on More Than Speculation</h2>
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Before his stroke, Jack executed his 1991 will. No one questions the validity of that will, which left the bulk of his estate to his family. The evidence is practically uncontroverted that the 1991 will was the last valid instrument expressing Jack's freely adopted intended disposition of his estate. So the distribution of Jack's estate was effectively locked in before Anderson began influencing Jack's post-stroke decisions. Thus, the expectancy of inheritance the Archers had as to Jack's estate was more than a speculative hope. If, after Jack's stroke, Anderson had convinced him to transfer assets to a third party who then consumed or dissipated the assets before Jack died, or to a third party who disappeared, and the Archer family did not discover the transfers until after Jack's death, then both Jack's reasonable expectancy that his last valid will would control the disposition of his estate, and the Archers' reasonable expectancy of inheriting the bulk of his estate in accordance with his last competent intentions would have been frustrated. Why? Because there would have been no estate. Under those circumstances, the remedies of a constructive trust and restitution would have been of little, if any, benefit to the Archers in enforcing Jack's intent regarding his estate. Thus, the existence of a gap-filling cause of action against Anderson for interference with the Archers' expectancy of inheritance might well have been the only viable vehicle to remedy Anderson's actions. Even if a remedy other than tortious interference with expectancy of inheritance was viable in such a situation, then having the tortious interference remedy as a backup would do no harm. And if, under all the facts, another remedy was not viable, the tortious interference cause of action might well afford relief where otherwise there would be none. However, the situation where after his stroke, Jack's estate was intentionally diverted or dissipated and the perpetrators or assets gone, is not before us. In the case that <i>is</i> before us, the Archers had, and took advantage of, adequate remedies available to them, other than a claim for tortious interference with their reasonable certainty of inheriting from Jack in accordance with the intentions he expressed in his 1991 will. That is also what the plaintiffs in <i>Kinsel</i> did. There we noted that although this Court has not recognized a cause of action for intentional interference with inheritance, some courts of appeals had—including in two cases where we denied petitions for review. <a href="https://scholar.google.com/scholar_case?case=10343041009404639405&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Kinsel,</i> 526 S.W.3d at 422-23 & n.4</a> (citing <a href="https://scholar.google.com/scholar_case?case=2022869650674658308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Stern v. Marshall,</i> 471 S.W.3d 498, 516 (Tex. App.-Houston [1st Dist.] 2015, no pet.)</a>; <a href="https://scholar.google.com/scholar_case?case=11170057704311723907&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Magana v. Citibank, N.A.,</i> 454 S.W.3d 667, 685 (Tex. App.-Houston [14th Dist.] 2014, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=5136010934797137333&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>In re Estate of Valdez,</i> 406 S.W.3d 228, 233 (Tex. App.-San Antonio 2013, pet. denied)</a>; <a href="https://scholar.google.com/scholar_case?case=3211961066612024035&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>In re Estate of Russell,</i> 311 S.W.3d 528, 535 (Tex. App.-El Paso 2009, no pet.)</a>). Nevertheless, we saw "no compelling reason to consider a previously unrecognized tort if the constructive trust [awarded in the case] proved to be an adequate remedy." <i>Id.</i> at 424 (noting that a relevant factor when considering an unrecognized cause of action is the existence and adequacy of other protections). We went on to conclude that the constructive trust provided redress for the injuries, so the facts did not warrant enlarging the body of Texas's tort law by recognizing a new cause of action. <i>Id.</i> at 425.</div>
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In regard to the intentional interference with expectation of inheritance question, this case is postured similarly to <i>Kinsel.</i> The Court concludes that the Archers had an adequate remedy because they ultimately received their inheritance, albeit minus attorney's fees and a settlement with the charities. <i>Ante</i> at ___. But rather than leaving open the issue of whether to recognize the cause of action as we did in <i>Kinsel,</i> the Court changes course and closes that door. It does so even though that door might, in some instances, provide the only avenue to relief for parties who suffer loss at the hands of actors who intentionally—not merely negligently—caused the loss. The Court indicates that we should do so now in order to eliminate confusion based on conflicting decisions in the courts of appeals in Houston. <i>Ante</i> at ___. The Court points out that after our opinion in <i>Kinsel</i> issued, the Court of Appeals for the First District recognized the cause of action in <a href="https://scholar.google.com/scholar_case?case=8891766734785296709&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Yost v. Fails,</i> 534 S.W.3d 517, 530 (Tex. App.-Houston [1st Dist.] 2017, no pet.),</a> while the Court of Appeals for the Fourteenth District declined to do so in <a href="https://scholar.google.com/scholar_case?case=2931524069374234031&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Rice v. Rice,</i> 533 S.W.3d 58, 63 (Tex. App.-Houston [14th Dist.] 2017, no pet.)</a>. But in <i>Yost,</i> the first court did not award damages for intentional interference with an inheritance. <a href="https://scholar.google.com/scholar_case?case=8891766734785296709&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;">534 S.W.3d at 531-33</a>. So even taking these two cases into consideration, I am confident that Texas courts are fully capable of prospectively applying the guidance in <i>Kinsel</i> regarding intentional interference with inheritance cause of action—guidance that would be emphasized and more fully explained in this case should we choose to follow the same path we took in <i>Kinsel.</i></div>
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The Court says that a judicially recognized gap-filler cause of action is unnecessary because statutory probate law provides adequate remedies. <i>Ante</i> at ___. My overriding concern is that neither we nor the courts of appeals have considered a sufficient spectrum of factual circumstances for us to confidently conclude that foreclosing the cause of action will not leave parties without any avenue of relief against those whose actions intentionally and wrongfully divest an elderly person with diminished capacity of assets and thus interfere with that person's last-expressed true intentions about the disposition of his or her property.</div>
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The Court addresses and dismisses four fact scenarios that commentator Diane J. Klein argues necessitate the recognition of the tort of intentional interference with an inheritance. <i>Ante</i> at ___ (citing Diane J. Klein, <i>A Disappointed Yankee in Connecticut (or Nearby) Probate Court: Tortious Interference with Expectation of Inheritance—A Survey with Analysis of State Approaches in the First, Second, and Third Circuits,</i> 66 U. PITT. L. REV. 235, 247 (2004)). While acknowledging that these scenarios are "by no means an exhaustive list," the Court concludes that it is "unable to imagine a situation in which the lack of a full remedy is not a legislative choice or a matter for targeted legislative amendments to probate law and procedures." <i>Ante</i> at ___. But even allowing for what the Court describes as the Legislature being "active and creative in protecting the vulnerable," <i>ante</i> at ___, it is beyond reasonable belief that all the possible circumstances and designs of persons focused on taking advantage of those with diminished capacity have been anticipated, or are even capable of being anticipated. After all, that is the reason common law causes of action and remedies have arisen—although I do not dispute that probate law will be applicable and provide an adequate remedy in many situations.</div>
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Nevertheless, under certain circumstances probate proceedings may not be a viable option for relief to a would-be beneficiary. For example, such a proceeding might offer no relief in a case where the statutory probate limitations period expired before the would-be beneficiary learned of the testator's death, as was the situation in <a href="https://scholar.google.com/scholar_case?case=14856636729049391025&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Schilling v. Herrera,</i>952 So. 2d 1231, 1237 (Fla. Dist. Ct. App. 2007)</a> (holding that the plaintiff's tort claim was not barred by the plaintiff's failure to appear in a probate proceeding when the defendant concealed the testator's death until after the expiration of the statutory limitations period). And another example might be where the wrongful interference occurs with a decedent's nonprobate assets, such as payable on death accounts or life insurance proceeds. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6147926412829267898&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Valdez v. Ramirez,</i> 574 S.W.2d 748, 750 (Tex. 1978)</a>. But as I have noted above, experience teaches that it is impossible to anticipate the limitless ways in which unscrupulous persons can take advantage of others, in this instance elderly persons. Indeed, if those ways could be anticipated, then preventative measures would already have been devised, publicized, and widely adopted. And there would be negligible (well, at least a reduction of) fleecing of our older population. But that is not going to happen. So long as humans with human traits and desires exist, there will be those among us who devise new and more effective ways of taking advantage of the vulnerable elderly who have assets.</div>
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The Court recognizes that a constructive trust can provide a remedy for unfairness. <i>Ante</i>at ___. But the typical remedy of imposing a constructive trust resulting from a successful restitution action is not always available or may not provide an adequate remedy, as this Court has recognized. While we have stated that "[t]he specific instances in which equity impresses a constructive trust are numberless," <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=15213256189274271294&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Pope v. Garrett,</i> 211 S.W.2d 559, 560 (Tex. 1948)</a> (quoting 4 POMEROY'S EQUITY JURISPRUDENCE § 1045, at 97 (5th ed. 1941)), we have also acknowledged that "the reach of a constructive trust is not unlimited." <a href="https://scholar.google.com/scholar_case?case=3731426121929834668&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>KCM Fin. LLC v. Bradshaw,</i> 457 S.W.3d 70, 87 (Tex. 2015)</a>. The imposition of a constructive trust generally requires the requesting party to establish (1) a breach of a special trust or fiduciary relationship or actual or constructive fraud, (2) unjust enrichment of the wrongdoer, and (3) an identifiable res that can be traced back to the original property. <i>Id.</i> As applied in the inheritance context, the would-be beneficiary must trace the fraudulently obtained property to funds received by the wrongdoer. <i>See </i><a href="https://scholar.google.com/scholar_case?case=13170069853788447047&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Meadows v. Bierschwale,</i> 516 S.W.2d 125, 133 (Tex. 1974)</a> (stating that "[w]hen property subject to a constructive trust is transferred, a constructive trust fastens on the proceeds"). However, if the property has been dissipated or traceable funds have been depleted, there will be nothing remaining upon which to impose a constructive trust. A judgment obtained from a tort action, on the other hand, would provide the expectant beneficiary with at least potential redress.</div>
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Some states have recognized the tort of interference with inheritance and have adopted what are seemingly pragmatic and workable standards. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=10329311015354951298&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Doughty v. Morris,</i> 871 P.2d 380, 384 (N.M. Ct. App. 1994)</a> (recognizing the tort of tortious interference with an expected inheritance and requiring a plaintiff to prove "(1) the existence of an expectancy; (2) a reasonable certainty that the expectancy would have been realized, but for the interference; (3) intentional interference with that expectancy; (4) tortious conduct involved with interference, such as fraud, duress, or undue influence; and (5) damages"); <a href="https://scholar.google.com/scholar_case?case=9727752778416747289&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>DeWitt v. Duce,</i> 408 So. 2d 216, 218 (Fla. 1981)</a> (discussing a claim for wrongful interference with a testamentary expectancy and when such a claim is considered a collateral attack on a probate decree). Of course, the elements of a cause of action in Texas would not necessarily mirror the elements of the action in other states. But the experience of other states can give focus and guidance.</div>
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In the end, it is hard to overestimate the creativity of those seeking to obtain or redirect money or assets that belong to another. Members of the increasing aging population with money and assets are ripe targets for predators. Said another way, the current target-rich environment for those who would prey on our elderly is expanding. I would not now foreclose the option of a tort action for intentional interference with inheritance to be used in circumstances where no alternative adequate remedy is available, and the tort would provide the only avenue for relief. The appropriate situation for recognizing the tort did not present itself in this case. However, the past does not control the future— it only undergirds it. The number of cases in which the cause of action has been asserted in the past indicates the potential for an increase in the number of cases asserting such claims. And if we were to use this case to reinforce what we said in <i>Kinsel,</i> it would surely foreclose most claims for intentional interference with inheritance.</div>
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Finally, the persons benefitted by the Court's action today are those who prey on some of the most vulnerable among us—seniors who have worked to accumulate estates to care for themselves in their twilight years, and to at death, either pass those estates on to their loved ones or distribute however else they might decide. We should be both sensitive to the needs of that vulnerable segment of the population and protective of their right to distribute the fruit of their life's work to whomever they competently and validly choose. I would not run the risk of shielding those who prey on them from being held responsible for their actions.</div>
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IV. Conclusion</h2>
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I join the Court's judgment affirming that of the court of appeals. But I respectfully dissent from the Court's barring the possibility of tort relief to those persons damaged by another's intentional interference with a benefit that the person in reasonable likelihood would have received as an inheritance. I would follow the approach we took in <i>Kinsel.</i>That is, I would go no further than to hold that we need not recognize the cause of action in this case and reserve judgment about whether to completely foreclose it.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=15740105388931577308&q=RICHARD+T.+ARCHER,+DAVID+B.+ARCHER&hl=en&as_sdt=4,44&as_ylo=2018#r[79]" name="[79]" style="color: #660099; text-decoration: underline;">[1]</a> Five of Jack Archer's nieces and nephews are parties to this suit—David B. Archer, Carol Archer Bugg, John V. Archer, Karen Archer Ball, and Sherri Archer.</div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-43584195001335963022018-06-19T00:11:00.001-05:002018-06-19T00:13:13.873-05:00Fourteenth Court of Appeals sustains duress defense, reverses grant of summary judgment for breach of settlement agreement signed under threat of criminal prosecution <div style="text-align: center;">
Weinberg v. Baharav, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=14-17-00023-CV&coa=coa14">14-17-00023-CV</a> (Tex.App. - Houston [14th Dist.] Jun. 12, 2018)</div>
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Duress is an affirmative defense applicable to a breach of contract cause of action. While there are several applications and definitions of duress, "[A] common element of duress in all its forms . . . is improper or unlawful conduct or threat of improper or unlawful conduct that is intended to and does interfere with another person's exercise of free will and judgment." Dallas Cty. Cmty. Coll. Dist. v. Bolton, 185 S.W.3d 868, 878-79 (Tex. 2005); Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 706 (Tex. App.-Houston [1st Dist.] 2014, no pet.). The threat must also be imminent. Bolton, 185 S.W.3d at 879. Further, duress must be established based on the conduct of the party accused of duress, not the emotions of the purported victim. E.g., Parks v. Affiliated Bank, No. 05-16-00784-CV, 2018 WL 2057545, at *5 (Tex. App.-Dallas May 3, 2018, no pet. h.) (mem. op.). </blockquote>
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Accordingly, to avoid summary judgment based on his duress affirmative defense, Weinberg was required to present evidence that Baharav (1) threatened Weinberg with improper or unlawful conduct that was (2) imminent and (3) intended to and (4) did interfere with his exercise of free will and judgment.</blockquote>
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ADI WEINBERG, Appellant,<br />v.<br />DOVEV BAHARAV AND DVIR BIRGIR, Appellees.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=5504504458979833044&as_sdt=2&hl=en" style="color: #660099;">No. 14-17-00023-CV.</a></center>
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<b>Court of Appeals of Texas, Fourteenth District, Houston.</b></div>
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Opinion filed June 12, 2018.</center>
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Danny M. Sheena, Hung Michael Nguyen, for Dovev Baharav and Dvir Birgir, Appellee.</div>
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Steven A. Hershkowitz, for Adi Weinberg, Appellant.</div>
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On Appeal from the 295th District Court, Harris County, Texas, Trial Court Cause No. 2015-76112.</div>
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Reversed and Remanded.</div>
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Panel consists of Justices Boyce, Jamison, and Brown.</div>
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OPINION</h2>
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MARTHA HILL JAMISON, Justice.</div>
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Appellant Adi Weinberg appeals from the trial court's grant of traditional summary judgment favoring appellees Dovev Baharav and Dviv Birgir. Appellees sued Weinberg for breach of a settlement agreement that Weinberg asserts he signed under duress, specifically due to threats of criminal prosecution. </div>
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Because Weinberg raised a material issue of fact on each of the elements of his duress affirmative defense, we reverse the trial court's judgment and remand for further proceedings.</div>
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<i>Background</i></h2>
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According to his declaration attached to his response to the motion for summary judgment, Weinberg operated a real estate business that primarily involved the buying, renovation, and resale of buildings. The funds used to purchase the properties often came from outside investors. When a property was sold, some of the proceeds might be returned to investors as profit, but the ideal was for the bulk of the sale proceeds to be rolled into the next purchase. Weinberg explained that sometimes properties would need to be held for a time before market conditions could make resale profitable. Some of the investors in the business were Weinberg's family members including Birgir, who is Weinberg's cousin, and Baharav, who is the husband of another cousin of Weinberg's.</div>
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Weinberg further detailed multiple problems that beset the business and the relationships. Despite these difficulties, Weinberg states that he continued to do business with Baharav, Birger, and other family investors "because the business model was essentially sound." However, as market conditions worsened and properties had to be held longer to make a profit, Weinberg says that Baharav became impatient and began insisting that properties should be "dumped . . . at unfavorable prices" just so Baharav could receive payment on his investment.</div>
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As Weinberg explained in his declaration, the situation came to a head at a meeting of family investors. During the meeting, Baharav threatened to have Weinberg arrested and charged with crimes if he did not sign an agreement Baharav presented, which is the agreement Baharav and Birger sued under.</div>
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The agreement at issue states in part as follows:</div>
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[Weinberg] has admitted that he has illegally taken monies belonging to the creditors in this agreement without any permission and without informing the creditors before taking the funds. . . .</blockquote>
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Since the majority of the creditors are relatives of [Weinberg] and out of the goodwill in their hearts they have created this agreement between themselves and [Weinberg] to collect the illegally gotten monies, rather than pursue both civil and criminal actions against [Weinberg] at this time. The creditors still maintain their rights to pursue any and all legal actions available under the law to retrieve their money if [Weinberg] doesn't abide by any portion of this agreement.</blockquote>
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The agreement then lists amounts that Weinberg purportedly owed to each of the listed investors, and repayment terms for the supposed debts.</div>
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Weinberg asserted in his declaration that such charges "would have effectively ruined and terminated my business, deprived me of future business and profits, and destroyed my family, especially my father, who is a Rabbi." Under this "duress and coercion," Weinberg says that he signed the agreement and since then has "attempted to accommodate [Baharav] out of fear that he would make these criminal accusations." Weinberg further maintains that he felt he had no other choice than to sign, even though he did not agree with Baharav's position or the valuations set forth in the agreement. Moreover, Weinberg said that Birger and the other family signatories to the agreement went along with Baharav's demands because—while they understood Weinberg "had not committed any bad acts"—they wanted to keep peace within the family and avoid the public scandal that a criminal prosecution would entail.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[1]" name="r[1]" style="color: #660099;">[1]</a></sup></div>
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Weinberg specifically denied having committed any criminal acts or taken any money out of the business for his personal gain, notwithstanding the language of the agreement. He further insisted that no purchases or expenditures had ever been "made without full disclosure to all parties, including [Baharav and Birger]."</div>
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In his declaration, Weinberg notes that he has paid approximately $40,000 to investors since signing the agreement. Appellees assert Weinberg stopped making payments as of June 1, 2013. On December 17, 2015, appellees' counsel sent a Notice of Default and Demand for Payment to Weinberg, demanding that he make the past due payments.</div>
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In their second amended petition, appellees each asserted a cause of action for breach of contract based on Weinberg's failure to make payments pursuant to the parties' agreement. In his answer, Weinberg generally denied the accusations against him, and, among other defenses, he asserted the affirmative defense of duress. In their motion for summary judgment, appellees presented evidence that they contended proved Weinberg breached the agreement as a matter of law and thereby caused them specified damages. Among other arguments in his response, Weinberg again asserted duress, and he provided the declaration discussed above in support.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[2]" name="r[2]" style="color: #660099;">[2]</a></sup> The trial court granted appellees' motion for summary judgment, awarded Baharav $93,615 and Birger $72,270 plus interest and attorney's fees. </div>
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In his appeal, Weinberg raises four issues, contending (1) he presented evidence raising a material issue of fact on each element of his duress affirmative defense, (2) appellees failed to establish the amount of their alleged damages as a matter of law, (3) all signatories to the agreement were not made parties to the lawsuit, and (4) the evidence was insufficient to support the amount the trial court awarded to appellees for attorney's fees. </div>
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Because we conclude that Weinberg raised a material issue of fact on each element of duress, we need not consider his other issues.</div>
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<i>Standards of Review</i></h2>
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We review a trial court's grant of summary judgment de novo. <i>See </i><a href="https://scholar.google.com/scholar_case?case=7847608500596721360&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,</i> 289 S.W.3d 844, 848 (Tex. 2009)</a>. A plaintiff who moves for summary judgment has the burden of conclusively proving all the elements of the asserted cause of action as a matter of law. <a href="https://scholar.google.com/scholar_case?case=9894779211004464323&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Rhone— Poulenc, Inc. v. Steel,</i> 997 S.W.2d 217, 223 (Tex. 1999)</a>. A party seeking to avoid summary judgment by virtue of an affirmative defense bears the burden of raising a material issue of fact on each element of that defense. <a href="https://scholar.google.com/scholar_case?case=11541122740409125336&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brownlee v. Brownlee,</i> 665 S.W.2d 111, 112 (Tex. 1984)</a>. A nonmovant asserting an affirmative defense is not required to prove the affirmative defense as a matter of law—raising a fact issue is enough. <i>Id.</i> In conducting our review, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. <i>See </i><a href="https://scholar.google.com/scholar_case?case=634515139996330548&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Mack Trucks, Inc. v. Tamez,</i> 206 S.W.3d 572, 582 (Tex. 2006)</a>. Evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary judgment evidence. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17119693818026086763&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Goodyear Tire & Rubber Co. v. Mayes,</i> 236 S.W.3d 754, 755 (Tex. 2007)</a>.</div>
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<i>Duress</i></h2>
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Duress is an affirmative defense applicable to a breach of contract cause of action. While there are several applications and definitions of duress, "[A] common element of duress in all its forms . . . is improper or unlawful conduct or threat of improper or unlawful conduct that is intended to and does interfere with another person's exercise of free will and judgment." <a href="https://scholar.google.com/scholar_case?case=13618642433636387833&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Dallas Cty. Cmty. Coll. Dist. v. Bolton,</i> 185 S.W.3d 868, 878-79 (Tex. 2005)</a>; <a href="https://scholar.google.com/scholar_case?case=8973323983000807915&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Lujan v. Navistar Fin. Corp.,</i> 433 S.W.3d 699, 706 (Tex. App.-Houston [1st Dist.] 2014, no pet.)</a>. The threat must also be imminent. <a href="https://scholar.google.com/scholar_case?case=13618642433636387833&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Bolton,</i> 185 S.W.3d at 879</a>. Further, duress must be established based on the conduct of the party accused of duress, not the emotions of the purported victim. <i>E.g., Parks v. Affiliated Bank,</i> No. 05-16-00784-CV, 2018 WL 2057545, at *5 (Tex. App.-Dallas May 3, 2018, no pet. h.) (mem. op.). Accordingly, to avoid summary judgment based on his duress affirmative defense, Weinberg was required to present evidence that Baharav (1) threatened Weinberg with improper or unlawful conduct that was (2) imminent and (3) intended to and (4) did interfere with his exercise of free will and judgment.</div>
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Does duress based on threats of criminal prosecution require proof of innocence?</h2>
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The law has long recognized that duress can result from threats of criminal prosecution. An issue of some inconsistency in Texas jurisprudence, however, is whether in asserting duress due to a threat of criminal prosecution, a defendant need establish his or her innocence of the offense in question. In other words, is it improper or unlawful conduct to threaten criminal prosecution in order to pressure someone to sign a contract regardless of whether the person is guilty of an offense?</div>
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Appellees cite a 1928 case from the Fourth Court of Appeals for the proposition that there is no duress unless a person threatening criminal prosecution has no legal right to do so: <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=16372873553706884693&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Borderland Hardware Co. v. Saenz,</i> 95 S.W.2d 1049, 1050 (Tex. Civ. App.-San Antonio 1928, no writ)</a>.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[3]" name="r[3]" style="color: #660099;">[3]</a></sup> <i>Borderland Hardware</i> dealt with a situation in which the threatened criminal prosecution was against a relative of the person who then executed an agreement due to the threat. <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=16372873553706884693&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;">95 S.W.2d at 1050</a>. The court noted that in that scenario, the person executing the contract was not doing so "in order to escape the consequences of his own crime" but to save his relative from prosecution. <i>Id.</i> The court held "while it may be true that an accused person cannot avoid contracts executed by him under threats of lawful prosecution," that under the facts presented, duress could be asserted to void the contract. <i>Id.</i> Interestingly, while the case <i>Borderland Hardware</i> relies on, <i>Gray v. Freeman,</i> involved a similar fact pattern and arrived at the same result, the <i>Gray</i> court stated more generally that "the guilt or innocence of the wronged party, or the lawfulness or unlawfulness of the threats, are immaterial." 37 Tex. Civ. App. 556, 559-62, 84 S.W. 1105, 1106-08 (1905).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[4]" name="r[4]" style="color: #660099;">[4]</a></sup></div>
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Indeed, the majority position in Texas, as well as other states, appears to be that the threat of criminal prosecution to pressure someone to execute a contract is itself a wrongful use of the criminal justice process that may constitute duress sufficient to void the resulting agreement. <i>See, e.g., </i><a href="https://scholar.google.com/scholar_case?case=6991858615310730330&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Sims v. Jones,</i> 611 S.W.2d 461, 462 (Tex. Civ. App.-Dallas 1980, no writ)</a> ("It has long been held that threats of criminal prosecution are sufficient to give rise to duress. The modern view is that threats of criminal prosecution may give rise to duress even where the party threatened is actually guilty of an offense."); <a href="https://scholar.google.com/scholar_case?case=11037227649024560637&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Pierce v. Estate of Haverlah,</i> 428 S.W.2d 422, 425 (Tex. Civ. App.-Tyler 1968, writ ref'd n.r.e</a>.) ("[T]he threatened prosecution need not be for a crime or offense of which the party threatened is not guilty, but . . . duress may arise from threats of prosecution for an offense of which the party threatened is actually guilty."); <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=16602276764652679516&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Pfeuffer v. Haas,</i> 55 S.W.2d 111, 114 (Tex. Civ. App.-Austin 1932, writ dism'd)</a> (following "modern doctrine"); <i>see also Walker v. Texas,</i> No. 7:17-CV-00168-O-BP, 2018 WL 1448799, at *9 (N.D. Tex. Mar. 7, 2018) (applying Texas law), <i>report and recommendation adopted sub nom. Walker v. Stephens,</i> No. 7:17-CV-00168-O-BP, 2018 WL 1427201 (N.D. Tex. Mar. 22, 2018); <a href="https://scholar.google.com/scholar_case?case=10134158686023940756&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>F.D.I.C. v. White,</i> 76 F. Supp. 2d 736, 739 (N.D. Tex. 1999)</a> (same).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[5]" name="r[5]" style="color: #660099;">[5]</a></sup> We have previously agreed with the majority position albeit in dicta. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6849989810040958913&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Eggleston v. Humble Pipe Line Co.,</i> 482 S.W.2d 909, 916</a> (Tex. Civ. App.-Houston [14th Dist.] 1972, writ ref'd n.r.e.).<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[6]" name="r[6]" style="color: #660099;">[6]</a></sup></div>
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We will follow the majority rule in this case and consider whether Weinberg presented evidence that Baharav threatened him with imminent criminal prosecution such as was intended to and did interfere with Weinberg's exercise of free will and judgment, but without requiring proof that Weinberg was innocent of the criminal allegations.</div>
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Did Weinberg present evidence raising a fact issue on each elements of the affirmative defense of duress?</h2>
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In his declaration, Weinberg states that he signed the agreement at a meeting of family investors after Baharav threatened to have him arrested and charged with crimes if he did not sign. Weinberg also provided lengthy detail about the business relationship between himself, Baharav, and Birger, and the problems that beset that relationship, which provided context for understanding the nature of the threats Baharav allegedly made. Weinberg stated that such charges as Baharav threatened "would have effectively ruined and terminated my business, deprived me of future business and profits, and destroyed my family, especially my father, who is a Rabbi." Weinberg insists that he signed under "duress and coercion" and had subsequently "attempted to accommodate [Baharav] out of fear that he would make these criminal accusations." Weinberg indicated that he felt that he had no other choice than to sign, even though he did not agree that the agreement was factually accurate or a good idea.</div>
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Language from the agreement itself further supports Weinberg's assertions, particularly wherein it recites that the "creditors . . . out of the goodwill in their hearts . . . created this agreement . . . rather than pursue both civil and criminal actions against the debtor at this time" and that they "still maintain their rights to pursue any and all legal actions available under the law to retrieve their money if the debtor doesn't abide by any portion of this agreement." Additionally, in one of Weinberg's emails that were included in the summary judgment evidence, he denied being a thief, which suggests someone accused him of being a thief at some point.</div>
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This evidence, viewed in the light most favorable to Weinberg, is sufficient to raise a material issue of fact on Weinberg's affirmative defense that he was threatened with imminent criminal prosecution if he did not sign the agreement and that such threats were intended to and did interfere with his exercise of free will and judgment.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#[7]" name="r[7]" style="color: #660099;">[7]</a></sup> <i>See </i><a href="https://scholar.google.com/scholar_case?case=13618642433636387833&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Bolton,</i> 185 S.W.3d at 878-79</a>; <i>Man Indus.,</i> 407 S.W.3d at 367. The alleged improper or unlawful conduct here was the reference to the criminal justice processes to pressure Weinberg to sign an agreement that he otherwise professes he did not voluntarily sign. <i>See </i><a href="https://scholar.google.com/scholar_case?case=13618642433636387833&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Bolton,</i> 185 S.W.3d at 878-79</a> (noting that "[a] common element of duress in all its forms . . . is improper or unlawful conduct or threat of improper or unlawful conduct"); <a href="https://scholar.google.com/scholar_case?case=10134158686023940756&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>White,</i> 76 F. Supp. 2d at 739</a> (describing the use of threats of criminal prosecution to pressure someone into signing an agreement as wrongful conduct); <a href="https://scholar.google.com/scholar_case?case=13597967222947879927&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Greene,</i> 424 S.W.2d at 9</a> (same); <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=9815883277187359845&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Harlan,</i> 228 S.W. 1090, 1091</a> (same); <i>Gray,</i> 37 Tex. Civ. App. at 560-61, 84 S.W. at 1107 (same).</div>
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<i>Conclusion</i></h2>
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Because Weinberg presented evidence sufficient to raise a material issue of fact on each of the elements of his affirmative defense, the trial court erred in granting summary judgment favoring appellees.</div>
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<a href="https://scholar.google.com/scholar_case?case=11541122740409125336&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Brownlee,</i> 665 S.W.2d at 112</a>. Accordingly, we sustain Weinberg's first issue. Having sustained his first issue, we need not address his remaining three issues.</div>
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We reverse the trial court's judgment and remand for further proceedings in accordance with this opinion.</div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[1]" name="[1]" style="color: #660099;">[1]</a> In addition to Weinberg, Baharav, and Birger, two other investors signed the agreement. These investors, however, did not participate in the trial court proceedings in this lawsuit and are not parties to this appeal.</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[2]" name="[2]" style="color: #660099;">[2]</a> Weinberg additionally provided a declaration from Lindsey Certo, who owns a property management company that worked with Weinberg and Baharav on a number of projects.</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[3]" name="[3]" style="color: #660099;">[3]</a> Appellees also cite <i>Gigout v. C & L Constructors, Inc.,</i> No. 01-96-01109-CV, 1999 WL 191324, at *4 (Tex. App.-Houston [1st Dist.] Apr. 8, 1999, pet. denied) (not designated for publication). However, <i>Gigout</i> is an unpublished, pre-2003 case and therefore not precedential. <i>See, e.g., Guardianship of A.S.K.,</i> No. 14-15-00588-CV, 2017 WL 3611845, at *4 n.7 (Tex. App.-Houston [14th Dist.] Aug. 22, 2017, pet. denied) (mem. op.).</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[4]" name="[4]" style="color: #660099;">[4]</a> Of further note, in both of the opinions appellees cite, the respective courts ignored and failed to follow their own prior precedent. <i>See </i><a href="https://scholar.google.com/scholar_case?case=13597967222947879927&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Greene v. Bates,</i> 424 S.W.2d 5, 8-11</a> (Tex. Civ. App.-Houston [1st Dist.] 1968, no writ) (preceding <i>Gigout</i> and holding evidence was sufficient to require submission of duress issue to a jury without considering whether there was evidence of guilt of the threatened criminal charges); <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=5037393951209441147&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Sabinal State Bank v. Ebell,</i>294 S.W. 226, 227 (Tex. Civ. App.-San Antonio 1927, no writ)</a> (preceding <i>Borderland Hardware</i> and stating "duress may arise from threats of prosecution for an offense of which the party threatened is actually guilty.").</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[5]" name="[5]" style="color: #660099;">[5]</a> Several courts in Texas have quoted the following language from the Alabama Supreme Court crystalizing the reasoning behind the majority rule:</span></div>
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<span style="font-size: x-small;">It was never contemplated in the law that either the actual or threatened use or misuse of criminal process, legal or illegal, should be resorted to for the purpose of compelling the payment of a mere debt, although it may be justly owing and due, or to coerce the making of contracts or agreements from which advantage is to be derived by the party employing such threats. Ample civil remedies are afforded in the law to enforce the payment of debts and the performance of contracts, but the criminal law and the machinery for its enforcement have a wholly different purpose, and cannot be employed to interfere with that wise and just policy of the law that all contracts and agreements shall be founded upon the exercise of the free will of the parties, which is the real essence of all contracts.</span></div>
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<span style="font-size: x-small;"><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=15516186905372889936&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Hartford Fire Ins. Co. v. Kirkpatrick,</i> 111 Ala. 456, 20 So. 651, 654 (1896)</a> (quoted in <a href="https://scholar.google.com/scholar_case?case=10134158686023940756&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>White,</i> 76 F. Supp. 2d at 739</a>; <a href="https://scholar.google.com/scholar_case?case=13597967222947879927&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Greene,</i> 424 S.W.2d at 9</a>; <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=9815883277187359845&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Houston Ice & Brewing Co. v. Harlan,</i> 228 S.W. 1090, 1091 (Tex. Comm'n App. 1921, judgm't adopted)</a>; <i>Gray,</i> 37 Tex. Civ. App. at 560-61, 84 S.W. at 1107).</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[6]" name="[6]" style="color: #660099;">[6]</a> This is also the position taken in the Restatement. Restatement (Second) of Contracts §§ 175(1) ("If a party's manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim."), 176(1)(b) ("A threat is improper if . . . what is threatened is a criminal prosecution. . . ."), cmt. c ("[I]f a threat is made, the fact that the one who makes it honestly believes that the recipient is guilty is not material. The threat involves a misuse, for personal gain, of power given for other legitimate ends. . . . The guilt or innocence of the person whose prosecution is threatened is immaterial in determining whether the threat is improper. . . ."); <i>see also </i><a href="https://scholar.google.com/scholar_case?case=13618642433636387833&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Bolton,</i> 185 S.W.3d at 877-79 & n.7</a> (discussing section 175 and other duress-related sections in various Restatements).</span></div>
<div style="position: relative;">
<span style="font-size: x-small;">The Texas Supreme Court has not addressed the specific issue raised here. In <a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=13525933786043527564&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Landa v. Obert,</i> 78 Tex. 33 (1890),</a> the court considered a lawsuit brought to recover funds obtained due to duress from a threat of criminal prosecution. As other courts have noted, however, <i>Landa</i> is distinguishable from the present situation because it involved a duress cause of action rather than an affirmative defense, the right of recovery was predicated on the alleged falsity of the charges made, and there was a contract involved under which the plaintiff was to be entitled to reimbursement if the charges were demonstrated to be false. <i>See </i><a class="gsl_co_link" href="https://scholar.google.com/scholar_case?about=9815883277187359845&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="border-bottom: 1px dotted rgb(102, 0, 153); color: #660099; text-decoration-line: none;"><i>Harlan,</i> 228 S.W. at 1091</a>; <a href="https://scholar.google.com/scholar_case?case=13597967222947879927&q=%22Texas+Supreme+Court%22&hl=en&as_sdt=4,44&as_ylo=2018" style="color: #660099;"><i>Greene,</i> 424 S.W.2d at 10</a>.</span></div>
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<span style="font-size: x-small;"><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=9546824507609328010&q=%22Texas+Supreme+Court%22&hl=en&scisbd=2&as_sdt=4,44&as_ylo=2018#r[7]" name="[7]" style="color: #660099; text-decoration: underline;">[7]</a> Appellees did not present any evidence suggesting that no such threat was made.</span></div>
MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-21143583795165883762018-05-11T18:48:00.000-05:002018-05-14T17:42:39.556-05:00The Dallas Morning News v. Tatum (Tex. 2018) - On the Cutting Edge of Suicide Prevention and First Amendment Burnishing: Defamation-by-Gist and Libel-by-Implication <div style="text-align: center;">
<br />
The Dallas Morning News v. Tatum, No. <a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0098&coa=cossup" style="background-color: white; font-family: "times new roman"; font-size: 18.6667px; text-align: left; white-space: pre-wrap;">16-0098</a> (Tex. May 11, 2018) (Don't omit-in-the-obit defamation case). </div>
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<tr><td class="tr-caption" style="text-align: center;">Hyper-attenuated inferential chains stretching over dozens of pages. </td></tr>
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<b><span style="color: #cc0000;">JURISPRUDENTIAL JEWEL OF THE WEEK</span></b>:<br />
<blockquote class="tr_bq">
Defamation by implication, as a subtype of textual defamation, covers both gist and implication. </blockquote>
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<i><span style="color: #0b5394;">Got it? If not, you definitely need to read all 41 pages of "gist" analysis delivered by the Texas High Court this morning for elucidation, plus a shorter critique by Justice Boyd that gently pokes fun at it. </span></i><i><span style="color: #0b5394;">You will also learn that the distinction between “as-a-whole” gist and “partial” implication is important; that there is a "sting" version of the "gist"; and that the gist has to be substrated out of the totality of the circumstances. Or was that the totality of the context? The proverbial and purely fictitious reasonable-reader character gets a good workout, too, of course. But divining the gist is as much a judicial prerogative as defining who qualifies to be called a Welfare Queen, and whether that may be done without paying. Stay away from Wikipaedia! Read Texas Supreme Court opinions, rather, and keep tuned to what the High Court deems reasonable and unworthy of input by wikipaedia contributors, not to mention linguistics professors, or a jury. </span></i></div>
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<b><span style="color: #cc0000;">THEN THERE IS THE KUDO VS VODOO STANDARD [roughly paraphrasing it]</span></b><br />
<blockquote class="tr_bq">
The “could” standard avoids one of the problems that the “would” standard creates a reasonable reader “could,” without departing from the constraints that pure logic imposes, follow or construct hyper-attenuated inferential chains that stretch beyond the realm of ordinary semantic meaning.</blockquote>
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<i><span style="color: #0b5394;">You didn't fully appreciate that until now, did you? </span></i></div>
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<b><span style="color: #cc0000;">AND, AS A BASELINE, THE PRE-EXISTING DEFINITIONS, NOW SUPREMELY SUPPLEMENTED WITH CONTEMPORARY LEGAL AUTHORITY </span></b></div>
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<blockquote class="tr_bq">
“Gist” refers to a publication or broadcast’s main theme, central idea, thesis, or essence. See THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 745 (4th ed. 2000) (defining “gist” as “[t]he central idea; the essence”); WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 959 (2002) (defining “gist” as “the main point or material part . . . the pith of a matter”); Gist, BLACK’S LAW DICTIONARY (10th ed. 2014) (defining gist as “[t]he main point”). Thus, we use “gist” in its colloquial sense. In this usage, publications and broadcasts typically have a single gist. </blockquote>
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<i><span style="color: #0b5394;">This is the case where the parents of a teen that committed suicide sued the local newspaper and columnist for disclosing the suicide that they had themselves omitted from their obit (in the same newspaper), alleging defamation. The columnist made the disclosure within a well-written and well-meaning opinion piece arguing that suicide should not be concealed and cloaked as a taboo by society, as this may make matters worse and impede prevention and intervention. </span></i><br />
<i><span style="color: #0b5394;"><br /></span></i>
<i><span style="color: #0b5394;">If such writing does not qualify as a meaningful contribution to public discourse, what does? The First Amendment protects unpopular and odious speech. This was quite mainstream and tempered. </span></i><br />
<i><span style="color: #0b5394;"><br /></span></i>
<i><span style="color: #0b5394;"> </span></i>
<i><span style="color: #0b5394;">Here is the text of the column:</span></i><br />
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<b>APPENDIX</b></div>
<br />
So I guess we’re down to just one form of death still considered worthy of deception.<br />
I’m told there was a time when the word “cancer” was never mentioned. Oddly, it was<br />
considered an embarrassing way to die.<br />
It took a while for honesty to come to the AIDS epidemic. Ironically, the first person I<br />
knew to die of AIDS was said to have cancer.<br />
We’re open these days with just about every form of death except one — suicide.<br />
When art expert Ted Pillsbury died in March, his company said he suffered an apparent<br />
heart attack on a country road in Kaufman County.<br />
But what was apparent to every witness on the scene that day was that Pillsbury had walked<br />
a few paces from his car and shot himself.<br />
Naturally, with such a well-known figure, the truth quickly came out.<br />
More recently, a paid obituary in this newspaper reported that a popular local high school<br />
student died “as a result of injuries sustained in an automobile accident.”<br />
When one of my colleagues began to inquire, thinking the death deserved news coverage,<br />
it turned out to have been a suicide.<br />
There was a car crash, all right, but death came from a self-inflicted gunshot wound [page<br />
break] in a time of remorse afterward.<br />
And for us, there the matter ended. Newspapers don’t write about suicides unless they<br />
involve a public figure or happen in a very public way.<br />
But is that always best?<br />
I’m troubled that we, as a society, allow suicide to remain cloaked in such secrecy, if not<br />
outright deception.<br />
Some obituary readers tell me they feel guilty for having such curiosity about how people<br />
died. They’re frustrated when obits don’t say. “Morbid curiosity,” they call it apologetically.<br />
But I don’t think we should feel embarrassment at all. I think the need to know is wired<br />
deeply in us. I think it’s part of our survival mechanism.<br />
Like a cat putting its nose to the wind, that curiosity is part of how we gauge the danger<br />
out there for ourselves and our loved ones.<br />
And the secrecy surrounding suicide leaves us greatly underestimating the danger there.<br />
Did you know that almost twice as many people die each year from suicide as from<br />
homicide?<br />
Think of how much more attention we pay to the latter. We’re nearly obsessed with crime.<br />
Yet we’re nearly blind to the greater threat of self-inflicted violence.<br />
Suicide is the third-leading cause of death among young people (ages 15 to 24) in this<br />
country.<br />
Do you think that might be important for parents to understand?<br />
In part, we don’t talk about suicide because we don’t talk about the illness that often<br />
underlies it—mental illness.<br />
I’m a big admirer of Julie Hersh. The Dallas woman first went public with her story of<br />
depression and suicide attempts in my column three years ago.<br />
She has since written a book, Struck by Living. Through honesty, she’s trying to erase<br />
some of the shame and stigma that compounds and prolongs mental illness.<br />
41<br />
Julie recently wrote a blog item titled “Don’t omit from the obit,” urging more openness<br />
about suicide as a cause of death.<br />
“I understand why people don’t include it,” she told me. “But it’s such a missed opportunity<br />
to educate.”<br />
And she’s so right.<br />
Listen, the last thing I want to do is put guilt on the family of suicide victims. They already<br />
face a grief more intense than most of us will ever know.<br />
But averting our eyes from the reality of suicide only puts more lives at risk.<br />
Awareness, frank discussion, timely intervention, treatment—those are the things that save<br />
lives.<br />
Honesty is the first step.<br />
<br />
See Steve Blow, Shrouding suicide in secrecy leaves its danger unaddressed, THE DALLAS<br />
MORNING NEWS (July 12, 1010), https://www.dallasnews.com/news/news/2010/07/12/20100620-<br />
Shrouding-suicide-in-secrecy-leaves-its-9618.<br />
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ORDERS ON CAUSES</div>
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<a href="http://www.search.txcourts.gov/Case.aspx?cn=16-0098&coa=cossup">16-0098</a></div>
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THE DALLAS MORNING NEWS, INC. AND STEVE BLOW v. JOHN TATUM AND MARY ANN TATUM; from Dallas County; 5th Court of Appeals District (<a href="http://search.txcourts.gov/Case.aspx?cn=05-14-01017-CV&coa=coa05">05-14-01017-CV</a>, <a href="https://scholar.google.com/scholar_case?case=15016473449199666824&hl=en&as_sdt=6,44">493 SW3d 646</a>, 12-30-15)</div>
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<span class="a70" style="color: black; font-size: 13pt;">respondents' motion for sanctions denied</span></div>
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<span style="color: black; font-size: 13pt;">The Court reverses the court of appeals' judgment and renders judgment.</span></div>
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<span class="a70" style="color: black;"><span style="font-family: "times new roman"; font-size: 13pt;"><span style="font-size: 13pt;">Justice Brown delivered the </span><a data-udi="umb://media/9b7a9dc90979477381c31075259ca1bd" href="http://www.txcourts.gov/media/1441577/160098.pdf" rel="noopener noreferrer" style="color: #551a8b; font-size: 13pt;" target="_blank" title="160098">unanimous opinion</a><span style="font-size: 13pt;"> of the Court with respect to Parts I, II, III.B, and IV, the opinion of the Court with respect to Part III.A, in which Chief Justice Hecht, Justice Green, Justice Guzman, and Justice Devine joined, and an opinion with respect to Part III.C, in which Chief Justice Hecht and Justice Johnson joined.</span></span></span></div>
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<span class="a70" style="color: black;"><span style="font-family: "times new roman"; font-size: 13pt;"><span style="font-size: 13pt;">Justice Boyd delivered a </span><a data-udi="umb://media/be508f10f0f643fb94eb496618af5173" href="http://www.txcourts.gov/media/1441578/160098c.pdf" rel="noopener noreferrer" style="color: #551a8b; font-size: 13pt;" target="_blank" title="160098c">concurring opinion</a><span style="font-size: 13pt;">, in which Justice Lehrmann and Justice Blacklock joined.</span></span></span></div>
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MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-29223880503301438582018-05-11T15:01:00.003-05:002019-10-27T10:50:26.327-05:00Take it from Justice Blacklock: Harris County Deputy's use of personal gun to shoot a citizen wasn't use of tangible personal property for Tort Claims Act purposes. Victim's case dismissed!Harris County, Texas v. Lori Annab, <a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0329&coa=cossup">No. 17-0329</a> (Tex. May 11, 2018) (County held immune from suit by citizen shot by off-duty officer using County-approved but privately-owned duty weapon).<br />
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<i><span style="color: #0b5394;">Authoring Justice Blacklock allows that the record of the shooter (who was later convicted and is now in jail) may not have made him the ideal candidate to be a peace officer, considering that he had been fired from 12 of 21 prior jobs, that he was dismissed from the police academy for bad behavior, and that he required mood stabilizing medications. </span></i></div>
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<tr><td class="tr-caption" style="text-align: center;">Old and Modern Harris County Courthouse </td></tr>
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<i><span style="color: #0b5394;">Once you (are forced by the Texas Supreme Court to) accept the premise that the government is entitled to win in civil disputes with citizens because the government is the government -- a modern version of "<b>The King Can Do No Wrong</b>" -- and that it is the job of the courts to apply that principle and shut the courthouse door to victims of the government's agents it's easier to understand it all.</span></i> </div>
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<span style="font-size: large;"> <b style="text-align: center;"><span style="color: #cc0000;">SUPREME COURT OPINION </span></b></span></div>
<div style="text-align: center;">
<span style="font-size: large;"><b style="text-align: center;"><span style="color: #cc0000;">BY JUSTICE BLACKLOCK </span></b></span></div>
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<b style="text-align: center;"><span style="color: #cc0000;"><br /></span></b></div>
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IN THE SUPREME COURT OF TEXAS</div>
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No. 17-0329</div>
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HARRIS COUNTY, TEXAS, PETITIONER,</div>
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v.</div>
<div style="text-align: center;">
LORI ANNAB, RESPONDENT</div>
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<div style="text-align: center;">
ON PETITION FOR REVIEW FROM THE</div>
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COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS</div>
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Argued March 1, 2018</div>
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<br /></div>
JUSTICE BLACKLOCK delivered the opinion of the Court.<br />
<br />
On November 14, 2011, Kenneth Caplan shot Lori Annab in a fit of road rage. Caplan was<br />
a Harris County deputy constable, but he was off duty when he committed this vicious crime. He<br />
fired his personal firearm from his personal vehicle, striking and injuring Annab. Caplan is now<br />
in prison serving a twenty-year sentence. These facts are undisputed.<br />
<br />
Although Caplan was off duty and used his personal firearm in the assault, Annab sued<br />
Harris County, Caplan’s employer. Invoking the Texas Tort Claims Act, Annab attempted to<br />
overcome Harris County’s governmental immunity by claiming that Harris County used tangible<br />
personal property when Caplan shot Annab. The trial court granted the county’s plea to the<br />
jurisdiction and dismissed the case. The court of appeals concluded that Annab had not established<br />
a waiver of governmental immunity but remanded the case to allow Annab to replead and conduct<br />
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2</div>
more discovery. We agree with the court of appeals that Annab has not established a waiver of<br />
governmental immunity because her allegations, taken as true, do not demonstrate that Harris<br />
County’s use of tangible personal property caused her injuries. We disagree, however, with the<br />
court of appeals’ decision to remand the case. Despite multiple opportunities to do so, Annab has<br />
identified no viable factual or legal theory under which she could overcome the county’s immunity<br />
on remand, and we can conceive of none. Remand was therefore improper. We affirm the<br />
judgment of the court of appeals in part, reverse in part, and render judgment for Harris County.<br />
<br />
<b>I. Background</b><br />
<b><br /></b>
Annab sued Harris County in October 2015. Attempting to trigger the Tort Claims Act’s<br />
limited waiver of governmental immunity, she alleged that Harris County’s use of tangible<br />
personal property caused the injuries she suffered when Caplan shot her. The alleged use of<br />
tangible personal property was the county’s decision to hire Caplan and “repeatedly<br />
approv[e]/authoriz[e] and qualify[] [Caplan] to have, possess, and use the Glock gun as a firearm.”<br />
The county responded with a plea to the jurisdiction. The county made three arguments: (1)<br />
Annab’s claims were excluded from the Tort Claims Act’s immunity waiver because they arose<br />
from Caplan’s intentional assault, (2) the use or misuse of information was not the “use of tangible<br />
personal property” under the Tort Claims Act, and (3) Caplan did not act within the scope of his<br />
employment, so “[n]o county property was used.” The trial court permitted additional discovery<br />
into these issues prior to ruling on the plea to the jurisdiction. Annab deposed the county’s<br />
representative, Deputy Chief Armando Tello, before the court granted the county’s plea and<br />
dismissed the case.<br />
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Annab filed an interlocutory appeal. TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8). The<br />
court of appeals found that Annab’s allegations regarding the county’s “use” of the firearm failed<br />
to establish a waiver of the county’s immunity. Annab v. Harris Cty., 524 S.W.3d 793, 803–05<br />
(Tex. App.—Houston [14th Dist.] 2017, pet. granted). Further, the court of appeals found that any<br />
alleged use was not a proximate cause of Annab’s injuries. Id. But the court of appeals remanded<br />
the case to the trial court to allow Annab to replead and conduct more discovery. Id. One justice<br />
dissented. The dissent argued that Annab’s claims arose from an intentional tort and were therefore<br />
excluded from the Tort Claims Act, regardless of whether she sufficiently alleged the county’s use<br />
of tangible personal property. Id. at 805–08 (Donovan, J., dissenting).<br />
<br />
<b>II. Analysis</b><br />
<b><br /></b>
Sovereign immunity and governmental immunity are related common law doctrines<br />
protecting the government from suit. Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 57–<br />
58 (Tex. 2011). “Sovereign immunity protects the state and its various divisions, such as agencies<br />
and boards, from suit and liability, whereas governmental immunity provides similar protection to<br />
the political subdivisions of the state, such as counties, cities, and school districts.” Id.; see also<br />
Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003). An assertion of<br />
governmental immunity “implicates courts’ subject-matter jurisdiction.” Rusk State Hosp. v.<br />
Black, 392 S.W.3d 88, 91 (Tex. 2012). Thus immunity “is properly asserted in a plea to the<br />
jurisdiction.” Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004).<br />
Subject matter jurisdiction is a question of law that we review de novo. Id. at 226. When<br />
considering whether the pleadings allege jurisdiction, we “require[] the pleader to allege facts that<br />
affirmatively demonstrate the court’s jurisdiction.” Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852<br />
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S.W.2d 440, 446 (Tex. 1993). “When reviewing a trial court order dismissing a cause for want of<br />
jurisdiction, Texas appellate courts ‘construe the pleadings in favor of the plaintiff and look to the<br />
pleader’s intent.’” Id. (quoting Huston v. FDIC, 663 S.W.2d 126, 129 (Tex. App.—Eastland 1983,<br />
writ ref’d n.r.e.)).<br />
<br />
A governmental unit such as Harris County may be sued if the Legislature has waived<br />
immunity in “clear and unambiguous language.” TEX. GOV’T CODE § 311.034; Oncor Elec.<br />
Delivery Co. v. Dall. Area Rapid Transit, 369 S.W.3d 845, 849 (Tex. 2012) (“[A] waiver of<br />
governmental immunity must be clear and unambiguous.”). The Tort Claims Act waives immunity<br />
for certain tort claims against governmental units, including claims for “personal injury . . . caused<br />
by a condition or use of tangible personal . . . property if the governmental unit would, were it a<br />
private person, be liable to the claimant according to Texas law.” TEX. CIV. PRAC. & REM. CODE<br />
<br />
§ 101.021(2); see also id. § 101.025(a) (“Sovereign immunity to suit is waived and abolished to<br />
the extent of liability created by this chapter.”). Annab does not contend that her injuries were<br />
caused by a “condition” of tangible personal property. Thus, to invoke section 101.021(2)’s waiver<br />
of immunity, Annab must allege that the county’s “use of tangible personal property” caused her<br />
injuries. See Texas Ass’n of Bus., 852 S.W.2d at 446 (emphasis added).<br />
<br />
“[S]ince 1973 we have consistently defined ‘use’ to mean ‘to put or bring into action or<br />
service; to employ for or apply to a given purpose.’ A governmental unit does not ‘use’ personal<br />
property merely by allowing someone else to use it and nothing more. If all ‘use’ meant were ‘to<br />
make available,’ the statutory restriction would have very little force.” San Antonio State Hosp.<br />
v. Cowan, 128 S.W.3d 244, 246 (Tex. 2004); see also Rusk, 392 S.W.3d at 98 (holding that “use”<br />
does not include “providing, furnishing, or allowing access to tangible property”).<br />
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5</div>
Annab alleges that the county used Caplan’s firearm by authorizing Caplan to use or<br />
possess the firearm. This allegation fails as a matter of law to trigger the Tort Claims Act’s<br />
immunity waiver. Annab’s primary allegation of “use” stems from the county’s alleged<br />
“authorization” or “approval” of Caplan’s use of his firearm. Stated another way, Annab alleges<br />
the county “made available” the firearm to Caplan, which he then used to cause her injuries. The<br />
allegation that the county made the firearm available to Caplan is at odds with the undisputed facts,<br />
as explained below. But even accepting the allegation at face value, Annab has not alleged “use”<br />
of the firearm by the county under the Tort Claims Act. We consistently have defined “use” to be<br />
more than making tangible personal property available for use by another. To use something, the<br />
governmental unit must “put [it] or bring [it] into action or service [or] employ [it] for or apply [it]<br />
to a given purpose.” Cowan, 128 S.W.3d at 246. For the government to “use” tangible personal<br />
property, “the governmental unit [must] itself [be] the user,” id., and “the injury must be<br />
contemporaneous with the use of the tangible personal property.” Sampson v. Univ. of Tex. at<br />
Austin, 500 S.W.3d 380, 389 (Tex. 2016). Annab’s allegation that the county enabled, authorized,<br />
or approved Caplan’s use of the firearm does not amount to an allegation that the county used the<br />
firearm. This allegation therefore does not trigger the Tort Claims Act’s waiver of immunity.<br />
Annab also attempts to overcome Harris County’s immunity by alleging that the county’s<br />
various administrative decisions regarding Caplan’s employment amount to the “use of tangible<br />
personal property.” Annab points to Caplan’s troubled employment history before and during his<br />
time as a constable. She alleges that Caplan’s bad acts prior to and during his employment<br />
demonstrate that the county should not have hired Caplan, should have fired Caplan, or should<br />
have withdrawn its authorization for him to possess his firearm while on duty. Although these<br />
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allegations have little to do with the county’s liability under the Tort Claims Act, they demonstrate<br />
that Caplan’s record may not have made him the ideal candidate to be a peace officer. Caplan<br />
disclosed on his application that he had been fired from 12 of 21 prior jobs, that he was dismissed<br />
from the police academy for bad behavior, and that he required mood stabilizing medications.<br />
According to Annab, the county failed to investigate these events prior to hiring Caplan as a deputy<br />
constable and authorizing him to use his firearm while on duty. During his employment with the<br />
county, Caplan had two reported incidents of road rage. Annab complains that despite these acts,<br />
Caplan was neither terminated from employment nor prohibited from carrying his firearm during<br />
his duties.<br />
<br />
In a different case, these allegations could have some relevance to a claim against a private<br />
employer. But Harris County is not a private employer. It is immune from suits such as Annab’s<br />
unless the Legislature waives its immunity. The Legislature has chosen to waive the county’s<br />
governmental immunity only in limited circumstances. Kerrville State Hosp. v. Clark, 923 S.W.2d<br />
582, 585 (Tex. 1996) (noting that the Tort Claims Act did not “abolish[] governmental immunity”<br />
but was a “limited waiver [by] the Legislature”). The only waiver of immunity Annab alleges is<br />
the Tort Claims Act’s waiver for the county’s “use of tangible personal property.” Under our<br />
precedent and the plain text of the Tort Claims Act, the county’s failure to take action based on<br />
information it knew or should have known about its employee is not the “use of tangible personal<br />
property.” “We have long held that information is not tangible personal property, since it is an<br />
abstract concept that lacks corporeal, physical, or palpable qualities.” Tex. Dep’t of Pub. Safety v.<br />
Petta, 44 S.W.3d 575, 580 (Tex. 2001); see also Univ. of Tex. Med. Branch at Galveston v. York,<br />
871 S.W.2d 175, 178 (Tex. 1994) (“[T]angible personal property refers to something that has a<br />
<div style="text-align: center;">
7</div>
corporeal, concrete, and palpable existence.”). We have also held that complaints about<br />
employment decisions allege the use or non-use of information, not the use of tangible personal<br />
property. See Tex. Dep’t of Criminal Justice v. Campos, 384 S.W.3d 810, 815 (Tex. 2012) (holding<br />
that a state agency’s failure to properly screen, hire, train, supervise, and discipline employees who<br />
later committed assault while employed by the state agency was misuse of information, not of<br />
tangible personal property). We reject Annab’s claim that the county’s use or non-use of<br />
information regarding Caplan’s fitness to serve as a constable or to possess his personal firearm<br />
establishes a waiver of immunity under the Tort Claims Act.<br />
<br />
Further, non-use is by definition not use. “It is well settled that mere nonuse of property<br />
does not suffice to invoke section 101.021(2)’s waiver. If it did, governmental immunity ‘would<br />
be rendered a nullity,’ because ‘[i]t is difficult to imagine a tort case which does not involve the<br />
use, or nonuse, of some item of real or personal property.’” City of N. Richland Hills v. Friend,<br />
370 S.W.3d 369, 372 (Tex. 2012) (quoting Kerrville State Hosp., 923 S.W.2d at 586). The<br />
county’s failure to use information when it hired Caplan, retained Caplan as an employee, and<br />
declined to revoke the authorization for his on-duty possession of a firearm, cannot be the “use of<br />
tangible personal property.”<br />
<br />
In addition to their legal insufficiency, Annab’s claims proceed from an untenable factual<br />
premise. Even if the county making the firearm available to Caplan were enough to waive the<br />
county’s immunity—and it is not—the record demonstrates that the county did not make the<br />
firearm available to Caplan. Annab admits that Harris County does not issue firearms to deputy<br />
constables. Annab also admitted before the court of appeals that Caplan owned the firearm prior<br />
to his employment with the county. Annab, 524 S.W.3d at 801–02. There is no dispute that Caplan<br />
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8</div>
procured the firearm independently of the county. He possessed it and had the ability to use it<br />
criminally against Annab irrespective of his employment. Even accepting Annab’s allegations as<br />
true, there is no factual basis for the notion that the county made the firearm available to Caplan.<br />
Annab argues repeatedly that, but for the county’s approval and authorization, Caplan<br />
would not have been able to carry and use his personal firearm. As explained above, approval and<br />
authorization does not constitute “use of tangible personal property” under our precedent, which<br />
requires the county be the user of the tangible personal property at the time of the injury. But in<br />
any event, Annab has not articulated how Caplan’s right to possess his personal firearm on his<br />
personal time was dependent on the county’s approval. See U.S. CONST. amend II; TEX. CONST.,<br />
art. I, § 23. The county’s policy on deputy constables’ use of personal firearms actually functions<br />
in the opposite fashion; it assumes the deputy constable has the right to carry his personal firearm<br />
while off duty but attempts to impose controls on what kind of firearm deputy constables may<br />
carry. The policy also prohibits the carrying of a firearm to “locations where the primary business<br />
activity is the service of alcoholic beverages” and generally urges constables to exercise discretion<br />
when deciding where they carry their off duty firearm. The county’s maintenance of this generic<br />
off duty firearms policy for all its deputy constables does not amount to approval or authorization<br />
of everything an individual deputy constable does with his personal firearm while off duty.<br />
Despite this, Annab claims that Deputy Chief Tello admitted at his deposition that without<br />
the county’s authorization Caplan could not have kept his firearm. But this testimony was cabined<br />
to Caplan’s possession of the firearm during his duties as a constable. Certainly the county could<br />
have prevented Caplan from possessing or using the firearm while on duty. But the shooting<br />
<div style="text-align: center;">
9</div>
occurred when Caplan was off duty. Tello testified at his deposition that the county’s policies do<br />
not affect Caplan’s right to carry a firearm while off duty:<br />
<blockquote class="tr_bq">
Q. In reference to the authorization to use firearms, what is the purpose of<br />
authorizing a firearm?<br />
A. First of all, we want to ensure that the deputy can show proficiency with the<br />
weapon, the approved weapon, for conducting his job.<br />
Q. Is the authorization a license to carry that firearm?<br />
A. No, sir.<br />
Q. Does it have any effect on Mr. Caplan’s or any other deputy’s legal right to<br />
carry a firearm?<br />
A. No, sir.</blockquote>
In sum, Annab’s allegations that the county made the firearm available to Caplan and authorized<br />
or approved his possession and use of it are both legally insufficient and factually unsupportable.<br />
These allegations do not establish a waiver of immunity under the Tort Claims Act.<br />
<br />
* * *<br />
<br />
We turn next to whether the court of appeals correctly remanded the case to afford Annab<br />
the opportunity to replead and conduct further discovery. As explained below, we conclude that<br />
remand was improper, and we render judgment for the county.<br />
<br />
When a defendant raises a jurisdictional argument for the first time on appeal, remand may<br />
be appropriate to afford the plaintiff a “fair opportunity to address” the jurisdictional argument.<br />
Rusk, 392 S.W.3d at 96; see also RSL Funding, LLC v. Pippins, 499 S.W.3d 423, 429 (Tex. 2016)<br />
(citing Rusk in ordering remand where standing was raised for the first time on appeal). However,<br />
if the party who raised the jurisdictional defense can show that “the pleadings or record . . .<br />
conclusively negate the existence of jurisdiction,” or that the plaintiff did in fact have a “full and<br />
fair opportunity in the trial court to develop the record and amend the pleadings,” or that even with<br />
<div style="text-align: center;">
10</div>
a remand “the plaintiff would be unable to show the existence of jurisdiction,” then the case should<br />
be dismissed without a remand. Id. at 96–97.<br />
<br />
The court of appeals remanded the case because it determined that the county raised<br />
arguments regarding the proper understanding of “use” under the Tort Claims Act for the first time<br />
on appeal. Annab, 524 S.W.3d at 805. To begin with, the record does not indicate that the county<br />
waited until the appeal to raise this issue. To the contrary, the county’s plea to the jurisdiction<br />
twice argued that the county did not use tangible personal property. The county argued that<br />
“claims arising from the misuse or failure to use information do not waive a governmental entity’s<br />
sovereign immunity,” and that “[n]o county property was used during the commission of<br />
Defendant Caplan’s crime.” But even assuming these arguments were not raised until appeal, new<br />
arguments alone do not entitle the plaintiff to replead and conduct further discovery. Under Rusk,<br />
a remand should be denied if “the plaintiff would be unable to show the existence of jurisdiction”<br />
on remand. Rusk, 392 S.W.3d at 96. That is the case here. Despite multiple opportunities in<br />
briefing and at oral argument to articulate a legal or factual theory under which Harris County’s<br />
use of tangible personal property caused Annab’s injuries, Annab’s counsel could not do so. This<br />
is not surprising. Caplan shot Annab with his personal firearm while off duty. Annab does not<br />
dispute this. Even accepting Annab’s allegations as true, the county did not provide the firearm to<br />
Caplan and had no involvement in his use of it against Annab. We can envision no other facts—<br />
and Annab’s counsel has offered none—that when combined with these undisputed facts would<br />
establish that Harris County’s “use of tangible personal property” caused Annab’s injuries.<br />
Because no amount of future discovery or rephrasing of the allegations could properly invoke the<br />
Tort Claims Act’s limited waiver of the county’s immunity, remand serves no purpose.<br />
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Finally, we note that remand may also be appropriate when the plaintiff did not have a “full<br />
and fair opportunity in the trial court to develop the record.” Id. Here, the trial court allowed<br />
discovery into the relevant issues, including allowing Annab to take the deposition of a<br />
representative for the county. In that deposition, Annab and the county both asked questions<br />
regarding the county’s alleged “use of tangible personal property.” This provided sufficient<br />
development of the record. No amount of discovery or repleading could result in Annab<br />
establishing Harris County’s liability for Caplan’s off duty criminal act. Remand was therefore<br />
inappropriate.<br />
<br />
<b>III. Conclusion</b><br />
<b><br /></b>
Annab’s allegations fail to trigger the Tort Claims Act’s waiver of Harris County’s<br />
governmental immunity. Neither further discovery nor repleading could cure this defect. We<br />
affirm the judgment of the court of appeals in part, reverse in part, and render judgment for Harris<br />
County.1<br />
____________________________________<br />
James D. Blacklock<br />
Justice<br />
<br />
OPINION DELIVERED: May 11, 2018<br />
<br />
1<br />
The county also argued that the Tort Claims Act’s waiver of immunity does not apply to claims arising from Caplan’s intentional assault, TEX. CIV. PRAC. & REM. CODE § 101.057(2) (exempting claims “arising out of assault . . . or any other intentional tort” from liability), and that the alleged use of tangible personal property by the county was not a proximate case of Annab’s injuries. Our holding that Annab cannot successfully allege that the county used tangible personal property fully disposes of the case. We need not decide whether Annab’s allegations also suffer from other<br />
defects.<br />
<br />
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<tr><td class="tr-caption" style="text-align: center;">Harris County Administration Building in Houston </td></tr>
</tbody></table>
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<br /></div>
<div style="text-align: center;">
<b><span style="color: #cc0000;">COURT OF APPEALS OPINION </span></b></div>
<div style="text-align: center;">
<b><span style="color: #cc0000;">WITH DISSENT ON AN ISSUE NOT REACHED BY THE SUPREME COURT</span></b></div>
<br />
<center style="background-color: white; color: #222222; font-family: Arial, sans-serif; font-size: 15px;">
<b>524 S.W.3d 793 (2017)</b></center>
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Lori ANNAB, Appellant<br />v.<br />HARRIS COUNTY, Texas, Appellee.</h3>
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<a href="https://scholar.google.com/scholar?scidkt=8694579084576661916&as_sdt=2&hl=en" style="color: #660099;">NO. 14-16-00348-CV.</a></center>
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<b>Court of Appeals of Texas, Houston (14th Dist.).</b></div>
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Opinions filed March 14, 2017.</center>
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On Appeal from the 165th District Court, Harris County, Texas, Trial Court Cause No. 2015-58707.</div>
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Affirmed in Part, Reversed and Remanded in Part.</div>
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Steve E. Couch, Houston, TX, for appellant.</div>
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Michael Wayne Blaise, Kenneth R. Caplan, Barry Herrscher, Bruce Powers, Houston, TX, for appellee.</div>
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Panel consists of Justices Busby, Donovan, and Brown (Brown, J., majority).</div>
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<a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p797" style="color: #aaaaaa; font-size: 13px; font-weight: normal; left: -55px; position: absolute; text-decoration-line: none;">797</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p797" id="p797" style="color: #aaaaaa; font-size: 13px; font-weight: normal; text-decoration-line: none;">*797</a> OPINION</h2>
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Marc W. Brown, Justice.</div>
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In this interlocutory appeal, Lori Annab contends the trial court erred in granting Harris County's plea to the jurisdiction. Annab raises three issues on appeal: (1) the trial court erred if the grant of Harris County's plea was based on the Texas Tort Claims Act (TTCA) intentional torts exclusion; <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p798" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">798</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p798" id="p798" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*798</a> (2) the trial court erred in granting the plea because the evidence raised a fact issue as to Harris County's use or misuse of property; and (3) the trial court erred in granting the plea because Harris County failed to conclusively prove the trial court lacked jurisdiction. We affirm in part and reverse and remand in part.</div>
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I. FACTUAL AND PROCEDURAL BACKGROUND</h2>
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On November 11, 2014, Kenneth Caplan, using his Glock firearm, shot and injured Annab. At the time of the incident, Caplan was a Deputy Constable for Harris County. In applying for employment with Harris County, Caplan disclosed that he was on medication for mood stabilization due to a chemical imbalance. In the five years prior to his employment with Harris County, Caplan held 21 jobs and was fired from 12. Caplan was dismissed from the College of the Mainland Law Enforcement Academy within four months of entering. The separation form indicated Caplan's dismissal was the result of: (1) failing minimum standards for safety in performing traffic stops and building entries for Patrol Procedures—liability concerns; (2) violation of rules by jumping chain of command on three occasions; (3) inability to function as a team member and increasing hostility towards classmates; and (4) ethics—lying.</div>
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After Caplan was hired, he identified and disclosed his Glock firearm as his primary weapon. Harris County approved and authorized the use and possession of the firearm at all times during Caplan's employment. Harris County had the authority to withdraw its approval and authorization of the firearm.</div>
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Before the November 11 incident, Caplan was involved in four other incidents. Caplan exhibited anger management issues working as a security guard on August 7, 2012. He yelled, screamed, and cursed at supervisors and threatened a supervisor or co-worker that if stopped for a traffic violation he would go to jail, not simply receive a ticket. Caplan was involved in a road rage incident on November 11, 2013. During the incident, Caplan sped up to make sure the driver could see him motioning as though he was shooting at her. He repeatedly yelled at her, loud enough for her and her children to hear, that he intended to shoot them. The driver believed Caplan was armed as he was in uniform. Caplan again exhibited road rage behavior by stopping his personal vehicle in the middle of the street to stop a driver on July 4, 2014. Caplan exited his vehicle and approached the driver who was a uniformed Houston Police Department officer. He voiced expletives at the officer prior to returning to his car. Caplan exhibited hostility towards two other officers by striking their vehicle twice on July 24, 2014.</div>
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Annab filed suit against Harris County, Caplan, and Carole Busick, Ph.D. Annab's claims against Harris County arise under the TTCA. Specifically, in her third amended original petition, Annab alleged: (1) use and misuse of property by hiring Caplan insofar as Harris County used and devoted funds and property toward him; (2) use and misuse of property by repeatedly approving, authorizing, and qualifying Caplan to have, possess, and use the firearm; and (3) use and misuse of property by negligently failing to withdraw and revoke approval and authorization for Caplan to possess and use the firearm before the November 11 incident. Annab contends the negligent acts were the proximate cause of the incident in question and the severe injuries and losses she sustained.</div>
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Harris County filed a plea to the jurisdiction. Annab filed a response arguing the trial court had jurisdiction and requesting the plea be denied. Evidence was submitted with Harris County's and Annab's motions. <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p799" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">799</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p799" id="p799" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*799</a> Following a hearing, the trial court granted Harris County's plea to the jurisdiction.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[1]" name="r[1]" style="color: #660099;">[1]</a></sup> This interlocutory appeal followed.</div>
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II. ANALYSIS</h2>
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A. Sovereign Immunity</h2>
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In Texas, a governmental unit is immune from tort liability unless immunity has been waived by the legislature or the governmental unit has consented to suit. <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Tex. Dep't of Parks and Wildlife v. Miranda,</i> 133 S.W.3d 217, 224 (Tex. 2004)</a> (consent to suit); <a href="https://scholar.google.com/scholar_case?case=9779904620512355176&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Dallas Cty. Mental Health and Mental Retardation v. Bossley,</i> 968 S.W.2d 339, 341 (Tex. 1998)</a> (legislative waiver). "The Texas Tort Claims Act provides a limited waiver of sovereign immunity." <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 224</a>. </div>
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Sovereign immunity includes immunity from suit and immunity from liability. <i>Id.</i> "Immunity from liability is an affirmative defense, while immunity from suit deprives a court of subject matter jurisdiction." <i>Id.</i> The two immunities are co-extensive under the TTCA. <i>Id.</i> Absent express waiver under the TTCA, Harris County will be immune from suit. <i>See</i> Tex. Civ. Prac. & Rem. Code Ann. § 101.001(3)(B) (West Supp. 2016) (defining governmental unit to include a political subdivision of the state); <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 224-25</a>.</div>
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B. Standard of Review</h2>
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Sovereign immunity is properly asserted in a plea to the jurisdiction. <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 226</a>. A plea to the jurisdiction is a dilatory plea; its purpose is "to defeat a cause of action without regard to whether the claims asserted have merit." <a href="https://scholar.google.com/scholar_case?case=85062015673661441&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Bland Indep. Sch. Dist. v. Blue,</i> 34 S.W.3d 547, 554 (Tex. 2000)</a>. The plea challenges the trial court's jurisdiction over the subject matter of a pleaded cause of action. <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 226</a>. We review a trial court's ruling on a plea to the jurisdiction <i>de novo. Id.</i> at 228.</div>
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A plaintiff bears the burden of alleging facts that affirmatively demonstrate the trial court's jurisdiction. <i>Id.</i> at 226. "When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause." <i>Id.</i> We must accept as true all factual allegations in the petition, construe the pleadings liberally, and look to the pleader's intent. <i>Id.</i> at 226-27. A plea to the jurisdiction may be granted without allowing amendment if the pleading affirmatively negates the existence of jurisdiction. <i>Id.</i> at 227. If the pleadings do not affirmatively demonstrate incurable defects in jurisdiction, the plaintiff should be afforded the opportunity to amend. <i>Id.</i></div>
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Where the governmental unit challenges the existence of jurisdictional facts, and the parties submit evidence relevant to the jurisdictional challenge, we consider that evidence when necessary to resolve the jurisdictional issues raised. <i>Id.</i> We credit as true all evidence favoring the nonmovant and draw all reasonable inferences and resolve any doubts in the non-movant's favor. <i>Id.</i> at 228. The standard of review for a jurisdictional plea or motion based on evidence "mirrors that of a summary judgment under Texas Rule of Civil Procedure 166a(c)." <i>Id.</i> The movant must present conclusive proof that the trial court lacks subject matter jurisdiction. <i>Id.</i> If the movant discharges its burden to establish that the trial court lacks jurisdiction, the nonmovant must present evidence sufficient to raise a material issue of fact regarding jurisdiction, or the plea will be sustained. <i>Id.</i></div>
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C. Harris County's Plea to the Jurisdiction</h2>
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Annab challenges the trial court's grant of Harris County's plea in three issues. We <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p800" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">800</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p800" id="p800" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*800</a> begin by addressing Annab's third issue as our resolution of that broad issue resolves all issues raised on appeal. In her third issue, Annab contends the trial court erred because Harris County failed to conclusively establish the trial court lacked jurisdiction. Harris County challenged the trial court's jurisdiction based on Annab's pleadings and the existence of jurisdictional facts.</div>
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Annab relies on Section 101.021(2) of the TTCA in contending Harris County's sovereign immunity is waived. Section 101.021(2) provides a waiver of sovereign immunity 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). In the trial court, Harris County argued: (1) Annab alleged an intentional tort which was excluded under the TTCA; (2) the TTCA does not recognize a claim for negligent entrustment, hiring, or supervision; and (3) sovereign immunity was not waived because Caplan was not within the scope of his employment at the time he committed the tort. On appeal, Harris County also contends the trial court lacked jurisdiction as Annab did not allege a "use" of the tangible personal property under Section 101.021(2). <i>See id.</i> Harris County had the burden to conclusively prove the trial court's lack of jurisdiction by challenging Annab's pleadings or the existence of jurisdictional facts. <i>See </i><a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 228</a>. Only then would the burden shift to Annab to present evidence sufficient to raise a material issue of fact. <i>Id.</i></div>
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1. Intentional Torts Exclusion</h2>
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The limited waiver of immunity under the TTCA does not apply to intentional acts. <i>See</i> Tex. Civ. Prac. & Rem. Code Ann. § 101.057 (West 2011); <a href="https://scholar.google.com/scholar_case?case=13421751587472524128&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>City of Watauga v. Gordon,</i> 434 S.W.3d 586, 589 (Tex. 2014)</a>. "[T]o sue a governmental unit under the Act's limited waiver, a plaintiff may allege an injury caused by negligently using tangible property, but to be viable, the claim cannot arise out of an intentional tort." <a href="https://scholar.google.com/scholar_case?case=13421751587472524128&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Watauga,</i> 434 S.W.3d at 589</a>. "[I]ntentional conduct intervening between a negligent act and the result does not always vitiate liability for the negligence." <a href="https://scholar.google.com/scholar_case?case=12686332157283260725&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Delaney v. Univ. of Houston,</i> 835 S.W.2d 56, 60 (Tex. 1992)</a>. When the focus of the claim is on the governmental entity's negligent conduct, not the intentional conduct of its employee, the claim will not be treated as arising from an intentional tort. <i>See id.</i> at 59-60; <a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Young v. City of Dimmitt,</i> 787 S.W.2d 50, 51 (Tex. 1990)</a>.</div>
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Unlike our dissenting colleague, Harris County does not argue that the intentional torts exclusion applies to its alleged conduct in authorizing the firearm's use and failing to withdraw that authorization. Instead, in its brief, Harris County uses quotes from Annab's petition to frame "the issue in this case [as] whether `approving/authorizing and qualifying' the use of a specific weapon or `failing to withdraw and revoke such approval/authorization' or `hiring and using/devoting funds' to pay an employee constitutes a `use' of tangible personal property . . ."—an issue we address below. Only in a footnote does Harris County address the intentional torts exclusion, and then only to explain why the alleged acts just quoted—and not the act of discharging the firearm—should be the focus of our analysis. As Harris County observes, "[t]he act of firing the weapon could not be the basis of a claim against Harris County in this case, because that act was an intentional tort specifically excluded from the coverage of the Tort Claims Act."</div>
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We agree with Harris County that the act of firing the weapon is not the basis of Annab's claim. Annab points out <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p801" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">801</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p801" id="p801" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*801</a> that her claim as pleaded arises out of Harris County's independent negligent use and misuse of the firearm, not Caplan's discharging of the firearm — which was an intentional tort. An intervening criminal act will not automatically vitiate the negligence cause of action when the negligent actor should have realized the likelihood that such a situation might be created and that a third person might avail himself of the opportunity to commit such a crime. <i>See </i><a href="https://scholar.google.com/scholar_case?case=14723131436650528833&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Tex. Youth Comm'n v. Ryan,</i> 889 S.W.2d 340, 343 (Tex. App.-Houston [14th Dist.] 1994, no writ)</a>. Annab alleges Harris County negligently used and misused the firearm by authorizing, approving, and failing to withdraw its approval and authorization for Caplan to possess and use the firearm. She argues that without this approval and authorization, Caplan was not entitled to use or possess the firearm. Further, she contends that taking her factual allegations as true, it was reasonably foreseeable an incident like the one at issue in this case would occur if Harris County continued to authorize Caplan's possession and use of the firearm.</div>
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The authorization and failure to withdraw authorization for Caplan to possess and use the firearm, as alleged by Annab, are distinct actions from Caplan's use of the firearm, the intentional tort. <i>Cf. </i><a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Young,</i> 787 S.W.2d at 51</a> ("claims arise out of the alleged negligence of the city employees supervising the officer, not out of the officer's intentional tort"). Construing the pleadings liberally and accepting all facts as true, Annab's claim is not one that arises out of an intentional tort because the focus of her claim arises out of Harris County's alleged negligence in authorizing and failing to withdraw authorization to possess and use the firearm, with which Annab argues Caplan was able to commit the offending acts.</div>
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We conclude Annab has alleged facts by which her claim is not excluded from the waiver of sovereign immunity under the TTCA based on the intentional torts exclusion. Accordingly, Harris County did not meet its burden of proving that the TTCA's intentional torts exclusion applies.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[2]" name="r[2]" style="color: #660099;">[2]</a></sup></div>
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The trial court's order does not expressly state the plea was granted based on the intentional torts exclusion. Harris County raised additional arguments in support of its plea in the trial court. Accordingly, our resolution of this issue does not end our analysis.</div>
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2. Negligent Entrustment, Hiring, and Supervision</h2>
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Before the trial court, Harris County argued that Annab's negligent entrustment, hiring, or supervision claims did not waive sovereign immunity under the TTCA.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[3]" name="r[3]" style="color: #660099;">[3]</a></sup>Regarding any potential negligent entrustment claim, Annab's counsel conceded at oral argument that the firearm was Caplan's. An element of a negligent entrustment claim is entrustment of the chattel by the owner. <i>See </i><a href="https://scholar.google.com/scholar_case?case=977807280747368217&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>4Front Engineered Sols., Inc. v. Rosales,</i> 505 S.W.3d 905, 909 (Tex. 2016)</a>; <a href="https://scholar.google.com/scholar_case?case=10201028068910678835&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Prather v. Brandt,</i> 981 S.W.2d 801, 806 (Tex. App.-Houston [1st Dist.] 1998, pet. denied)</a>(firearm). The entrustment element requires a showing that the defendant either owned or had the right to control the chattel when the injury occurred. <i>See </i><a href="https://scholar.google.com/scholar_case?case=6249069694751572076&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>De Blanc v. Jensen,</i> 59 S.W.3d 373, 376 (Tex. App.-Houston [1st Dist.] 2001, no pet.)</a>. The right to control <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p802" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">802</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p802" id="p802" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*802</a> requires the entrustor have a superior possessory right to the chattel than the person to whom it was entrusted. <i>Id.</i> If the firearm was Caplan's, Harris County could not have issued it to him as alleged by Annab in her petition. Further, the control of the firearm alleged by Annab would not result in negligent entrustment of the firearm to Caplan as he possessed the superior right to the firearm as owner. Since Caplan owned the firearm, the facts alleged in Annab's petition do not state a claim for negligent entrustment. Accordingly, any claim for negligent entrustment arising from the facts alleged in Annab's petition does not result in a waiver of sovereign immunity under the TTCA.</div>
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As the alleged facts raise claims other than negligent entrustment, this does not conclude our analysis.</div>
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3. Scope of Employment</h2>
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On appeal, Harris County argues that Caplan was not within the scope of his employment when he discharged the firearm, so the act of firing the weapon could not be the basis of Annab's claim against it. Annab counters that there is no scope of employment requirement in a Section 101.102(2) claim, and that the act of firing is not the basis of her claim.</div>
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Annab relies on several cases in arguing there is no scope of employment requirement under Section 101.021(2). However, the cases Annab relies on involve personal injury caused by a condition of property or premises defect. <i>See </i><a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 230</a> ("The Mirandas' allegation of an injury caused by a tree limb falling on Maria Miranda constitutes an allegation of a condition or use of real property and is an allegation of a premises defect."); <a href="https://scholar.google.com/scholar_case?case=17916897316028030304&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Tex. Dep't of Transp. v. Pate,</i> 170 S.W.3d 840, 844 (Tex. App.-Texarkana 2005, pet. denied)</a> ("The case was submitted to the jury. . . as a premises defect allegedly arising from the Department's failure to properly maintain its right-of-way."); <a href="https://scholar.google.com/scholar_case?case=4956918112266394806&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Webb Cty. v. Sandoval,</i>88 S.W.3d 290, 295 (Tex. App.-San Antonio 2002, no pet.)</a> (claim regarding negligent condition of food served).</div>
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Cases involving liability for use have been distinguished from cases involving liability for a condition of property. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8475322321146955706&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>DeWitt v. Harris Cty.,</i> 904 S.W.2d 650, 652-54 (Tex. 1995)</a>. Use under Section 101.021(2) must be based on the government's use, although a condition need not be. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2834097105987872498&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>San Antonio State Hosp. v. Cowan,</i>128 S.W.3d 244, 246 n.9 (Tex. 2004)</a>. As Annab is alleging Harris County's use of the property, and not a condition of the property, the claim must arise out of the government's use.</div>
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As explained above, Annab's claim against Harris County is that Harris County was negligent in authorizing or failing to withdraw authorization for Caplan to possess and use the firearm involved in the incident. Construing her pleadings liberally, Annab's claim against Harris County is not for the act of discharging the firearm, and therefore is not dependent on whether Caplan was within the scope of his employment at the time he did so. Harris County did not offer evidence in the trial court, and does not argue on appeal, that the authorization or failure to withdraw authorization of the firearm was done outside of the scope of employment. Accordingly, Harris County did not meet its burden of proof in conclusively establishing that there was no waiver of sovereign immunity under the TTCA and the trial court lacked jurisdiction.</div>
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Harris County did not conclusively establish the trial court lacked jurisdiction based on its arguments presented in the trial court. Apart from the facts alleging negligent entrustment, Annab has alleged that Harris County negligently used the firearm by authorizing and failing to withdraw authorization for Caplan's use and possession of the firearm. Liberally construing <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p803" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">803</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p803" id="p803" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*803</a> Annab's pleadings and accepting all facts as true, these allegations are sufficient to demonstrate the trial court's jurisdiction to hear the case. We conclude the trial court erred in granting Harris County's plea, except as to Annab's negligent entrustment claim, based on the arguments presented and sustain Annab's third issue in part. We overrule Annab's third issue as to the negligent entrustment claim as she did not allege facts resulting in the waiver of sovereign immunity on that claim. In light of our holding as to Annab's third issue, we do not address her second issue as the burden never shifted back to Annab to raise an issue of material fact. <i>See</i> Tex. R. App. P. 47.1; <a href="https://scholar.google.com/scholar_case?case=9201820167388146137&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Miranda,</i> 133 S.W.3d at 228</a>.</div>
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4. Injury Caused by Use of Tangible Personal Property</h2>
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For the first time on appeal, Harris County contends the trial court's grant of its plea was proper as Annab does not allege a "use" of tangible personal property within the meaning of Tex. Civ. Prac. & Rem. Code § 101.021(2). Harris County further contends Annab failed to present evidence that Harris County's use of the firearm proximately caused her injury. Harris County argues the "real substance of the Appellant's complaint is that her injury was caused, not by the condition or use of property, but by the failure of Caplan's superiors to revoke his authorization to carry a weapon after a prior incident reportedly involving road-rage type behavior." Harris County alleges such actions are nonuse of information and do not state a cause of action under the Tort Claims Act. We consider these new arguments first raised on appeal. <i>See </i><a href="https://scholar.google.com/scholar_case?case=8742241686260250395&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Dallas Metrocare Servs. v. Juarez,</i> 420 S.W.3d 39, 41 (Tex. 2013)</a> ("[A]n appellate court must consider all of a defendant's immunity arguments, whether the governmental entity raised other jurisdictional arguments in the trial court or none at all.")</div>
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When the jurisdictional issues before the appellate court were not raised in the trial court, a plaintiff may not have had a fair opportunity to address the issues by amending her pleadings or developing the record. <a href="https://scholar.google.com/scholar_case?case=3214707215235444896&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Rusk State Hosp. v. Black,</i> 392 S.W.3d 88, 96 (Tex. 2012)</a>. In such cases, the pleadings are construed in favor of the party asserting jurisdiction and, if necessary, a review of the record for evidence supporting jurisdiction is conducted. <i>Id.</i> If the pleadings or record affirmatively negate the existence of jurisdiction, the suit should be dismissed. <i>Id.</i>"But if the pleadings and record neither demonstrate jurisdiction nor conclusively negate it, then in order to obtain dismissal of the plaintiff's claim, the defendant entity has the burden to show either that the plaintiff failed to show jurisdiction despite having had full and fair opportunity in the trial court to develop the record and amend the pleadings; or, if such opportunity was not given, that the plaintiff would be unable to show the existence of jurisdiction if the cause were remanded to the trial court and such opportunity afforded." <i>Id.</i> If the governmental entity meets this burden, the suit should be dismissed. <i>Id.</i> If the governmental entity does not meet this burden, the suit should be remanded to the trial court for further proceedings. <i>Id.</i></div>
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"Use" under Section 101.021(2) has been defined to mean "`to put into action or service; to employ for or apply to a given purpose.'" <a href="https://scholar.google.com/scholar_case?case=2834097105987872498&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Cowan,</i> 128 S.W.3d at 246</a>. The nonuse of property or the failure to act does not result in waiver of immunity under the TTCA. <i>See </i><a href="https://scholar.google.com/scholar_case?case=10233017955760299259&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>City of N. Richland Hills v. Friend,</i> 370 S.W.3d 369, 372 (Tex. 2012)</a> (nonuse of property will not result in waiver of immunity); <a href="https://scholar.google.com/scholar_case?case=6400354125007988626&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Univ. of Tex. Med. Branch at Galveston v. Kai Hui Qi,</i> 402 S.W.3d 374, 389-90 (Tex. App.-Houston [14th Dist.] 2013, no pet.)</a> ("failure to act does not invoke the Tort Claims <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p804" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">804</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p804" id="p804" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*804</a> Act's limited waiver of immunity"). Further, a governmental entity does not "use" tangible personal property by merely providing, furnishing, or allowing access to it. <a href="https://scholar.google.com/scholar_case?case=14220252256690925861&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Sampson v. Univ. of Tex. at Austin,</i> 500 S.W.3d 380, 389 (Tex. 2016)</a>. Allowing someone to use personal property and nothing more does not equate to "use" of personal property. <i>See </i><a href="https://scholar.google.com/scholar_case?case=2834097105987872498&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Cowan,</i> 128 S.W.3d at 246</a>. Additionally, without more, the "[u]se, misuse, or nonuse of information does not constitute use, misuse, or nonuse of tangible personal property under section 101.021(2)." <a href="https://scholar.google.com/scholar_case?case=4409240778336358076&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Prairie View A&M Univ. of Tex. v. Mitchell,</i> 27 S.W.3d 323, 327 (Tex. App.-Houston [1st Dist.] 2000, pet. denied)</a>; <i>see also </i><a href="https://scholar.google.com/scholar_case?case=8187346771440255465&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Tex. Dep't of Pub. Safety v. Petta,</i> 44 S.W.3d 575, 580-81 (Tex. 2001)</a>. Annab's petition must be viewed in its entirety to determine whether waiver under the TTCA exists.</div>
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While Annab includes allegations of misuse of information in her pleadings, she also contends the result of Harris County's misuse of information was that Harris County "negligently used and misused property by continuing to approve, authorize, and qualify the use and possession of the firearm by Deputy Constable Caplan and such negligence was a proximate cause of the incident." Annab contends that overlooking or disregarding Caplan's previous employment history and incident history shows that Harris County's act of continuing to authorize and approve Caplan's possession and use of the firearm was negligent. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12447354374063270871&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Univ. of Tex. M.D. Anderson Cancer Ctr. v. Jones,</i> 485 S.W.3d 145, 149 (Tex. App.-Houston [14th Dist.] 2016, pet. denied)</a> (holding allegation of negligent use of property triggered waiver of immunity under section 101.021(2) where plaintiff relied on misuse of information to show that the use of property was negligent).</div>
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Further, Annab alleges Harris County "had control over the property and this constitutes a `use' for purposes of Section 101.021(2)." In arguing Harris County used the firearm through control, Annab relies on <a href="https://scholar.google.com/scholar_case?case=9515805476249262467&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Sipes v. City of Grapevine,</i> 146 S.W.3d 273 (Tex. App.-Fort Worth 2004),</a> <i>rev'd in part on other grounds,</i> <a href="https://scholar.google.com/scholar_case?case=10461930924373223503&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">195 S.W.3d 689 (Tex. 2006)</a>. In <i>Sipes,</i> the court stated "[t]here is no requirement under the [Tort Claims] Act that the City own the tangible property that causes the injury. The City may be liable in circumstances in which it assumes control over tangible personal property and the negligent exercise of that control results in personal injury." <i>Id.</i> at 281.</div>
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Annab alleges Harris County, independent of Caplan, used the firearm; however, she does not affirmatively allege facts by which Harris County's authorization of the firearm put it "into action or service." Further, the allegations do not establish Harris County exercised control over the firearm, independent of Caplan. In her brief to this court, Annab contends the facts alleged establish Caplan could not carry or use the firearm — even while off duty — without Harris County's approval and authorization. Annab does not cite to her petition in support of this contention and we have not found such factual allegations therein.</div>
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In an effort to show use and control, Annab cites to the testimony of Chief Deputy Constable Armando Tello, Harris County's designated representative, which Annab submitted in response to Harris County's plea. Tello testified it was his opinion that Harris County should not have hired Caplan based on his employment history. Additionally, Tello testified he would have recommended dismissal of Caplan at least twice in response to incidents that occurred before he shot Annab. Annab also points to the Harris County policy on authorized duty weapons attached as an exhibit to Tello's deposition. The policy states "Harris County Precinct <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p805" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">805</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p805" id="p805" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*805</a> 6 Constable's Office employees are only authorized to carry and use weapons, lethal and non-lethal, approved by the Constable or designee." However, the policy in the record is undated, and Tello's testimony does not establish that the policy was in effect prior to the November incident in which Annab was injured, nor does it address to what extent the policy applied to deputies while off duty. This evidence submitted by Annab does not affirmatively establish Harris County's use or control over the firearm. We conclude the facts alleged by Annab in her pleading, and the evidence submitted, do not conclusively establish Harris County's use of the firearm under Section 101.021(2).</div>
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Waiver of immunity under Section 101.021(2) also requires Harris County's use of the firearm be the proximate cause of Annab's injury. <i>See </i><a href="https://scholar.google.com/scholar_case?case=17896359589823330448&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>City of Dallas v. Sanchez,</i> 494 S.W.3d 722, 726 (Tex. 2016)</a>. "Proximate cause requires both `cause in fact and foreseeability.'" <i>Id.</i> For Harris County's use of the firearm to be a cause in fact, the use must be "`a substantial factor in causing the injury and without which the injury would not have occurred.'" <i>Id.; see also </i><a href="https://scholar.google.com/scholar_case?case=5030919694437085054&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Univ. of Tex. M.D. Anderson Cancer Ctr. v. Baker,</i> 401 S.W.3d 246, 257 (Tex. App.-Houston [14th Dist.] 2012, pet. denied)</a>. Use of the property must have actually caused the injury. <a href="https://scholar.google.com/scholar_case?case=14220252256690925861&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Sampson,</i> 500 S.W.3d at 389</a>; <a href="https://scholar.google.com/scholar_case?case=12480707214999502521&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Brown v. Houston Indep. Sch. Dist.,</i> 123 S.W.3d 618, 620 (Tex. App.-Houston [14th Dist.] 2003, pet. denied)</a>.</div>
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Annab contends that Harris County's use of the firearm was the proximate cause of her injuries. However, the facts alleged in Annab's petition do not demonstrate that Harris County's approval, authorization, and qualification of the use and possession of the firearm were the proximate cause of her injuries. As Annab has not alleged facts affirmatively demonstrating personal injury proximately caused by Harris County's use of tangible personal property, we conclude she has not meet her burden of affirmatively establishing jurisdiction based on the pleadings.</div>
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We conclude the pleadings and record do not demonstrate jurisdiction or conclusively negate it. Given the new arguments regarding use that Harris County advances for the first time on appeal, it has not demonstrated that Annab failed to show jurisdiction despite having full and fair opportunity to litigate the issue in the trial court. Nor has Harris County established that Annab would be unable to show the existence of jurisdiction if this case were remanded. Accordingly, we reverse the trial court's grant of Harris County's plea and remand this case for further proceedings. <i>See </i><a href="https://scholar.google.com/scholar_case?case=3214707215235444896&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Rusk State Hosp.,</i> 392 S.W.3d at 96</a>.</div>
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III. CONCLUSION</h2>
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We affirm the trial court's judgment granting Harris County's plea on Annab's negligent entrustment claim. We reverse the remainder of the trial court's judgment and remand for proceedings consistent with this opinion.</div>
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(Donovan, J., dissenting.)</div>
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John Donovan, Justice, dissenting</div>
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Because I would affirm the trial court's order on the basis that Annab's pleadings demonstrate incurable defects in jurisdiction, I respectfully dissent.</div>
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The Texas Tort Claims Act (TTCA) waives immunity for injuries caused by the negligent use of tangible property but this limited waiver does not apply to intentional torts. Tex. Civ. Prac. & Rem. Code §§ 101.021(2) and 101.057. In order to be viable, the claim cannot arise out of an intentional tort. <a href="https://scholar.google.com/scholar_case?case=13421751587472524128&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>City of Watauga v. Gordon,</i> 434 S.W.3d 586, 587 (Tex. 2014)</a>. Annab's pleadings state that Caplan shot and <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p806" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">806</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p806" id="p806" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*806</a> severely injured her, clearly an intentional tort. Thus, to maintain a negligence claim against Harris County, Annab's pleadings must allege facts that, taken as true, reflect her claim does not "arise out of" being intentionally shot by Caplan.</div>
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The tangible property identified in Annab's pleadings is Caplan's personal gun that he used to shoot her.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[4]" name="r[4]" style="color: #660099;">[1]</a></sup> Annab alleges Harris County had control over Caplan's personal gun because it authorized Caplan to use it. Annab alleges that Harris County's negligence regarding that authorization was a proximate cause of her injuries. These allegations are reflected in the following statement from her petition:</div>
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Specifically, [Caplan] using the Glock gun which the County had repeatedly approved and qualified and thus, had allowed Deputy Constable Caplan to retain possession of such Glock gun, Deputy Constable Caplan, acting under his indicia of authority as a Deputy Constable; used the approved and qualified Glock gun and shot and severely injured the Plaintiff.</blockquote>
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The majority cites three cases in support of its determination that Annab's allegations state a claim that her injuries were caused by negligent use of tangible property, rather than an intentional tort. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12686332157283260725&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Delaney v. Univ. of Houston,</i> 835 S.W.2d 56, 60 (Tex. 1992)</a>; <a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Young v. City of Dimmitt,</i> 787 S.W.2d 50, 51 (Tex. 1990)</a>; and <a href="https://scholar.google.com/scholar_case?case=14723131436650528833&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Texas Youth Comm'n v. Ryan,</i> 889 S.W.2d 340, 343 (Tex. App.-Houston [14th Dist.] 1994, no pet.)</a>.</div>
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In <i>Delaney,</i> a university failed to fix the lock on a door that provided access to a campus dormitory despite complaints. <a href="https://scholar.google.com/scholar_case?case=12686332157283260725&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">835 S.W.2d at 57</a>. An intruder entered through that door, found the plaintiff in her room, and raped her. <i>Id.</i> The plaintiff sued the university for failing to repair the lock and breach of contract to provide a secure residence. <i>Id.</i> at 60. The court expressly did not decide whether the plaintiff's negligence claims fell within the waiver of immunity contained in the TTCA or whether they were barred by immunity for other reasons. <i>Id.</i> at 60-61. The court only concluded that it was error for the lower courts to apply section 101.057(2) to the plaintiff's claims. The court gave two reasons: (1) intentional conduct intervening between a negligent act and the result does not always vitiate liability for the negligence; and (2) "arising out of," as used in section 101.057(2), "requires a certain nexus" between the claim and an intentional tort for the provision to apply. <i>Id.</i> 59-60. Thus <i>Delaney</i> stands for the proposition that an intentional tort precludes a negligence claim when there is a nexus between the two.</div>
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The Texas Supreme Court in <i>Young</i> disapproved the lower court's conclusion that regardless of the claims for negligent employment, entrustment, and supervision, the officer's intentional tort precluded application of the TTCA.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[5]" name="r[5]" style="color: #660099;">[2]</a></sup> <a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Young,</i> 787 S.W.2d at 51</a>. The court then found no error requiring reversal of the trial court's dismissal of the petitioners' claims. <i>Id.</i> Thus the court did not overturn the Court of Appeal's determination that the officer's intentional tort — driving his car into oncoming traffic in an attempted suicide — precluded application of the TTCA. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15316760710477708139&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Young v. City of Dimmitt,</i> 776 S.W.2d 671, 673 (Tex. App.-Amarillo 1989),</a> <i>writ denied per curiam,</i> <a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">787 S.W.2d 50 (Tex. 1990)</a>. Thus while <i>Young</i> stands for the proposition that negligence claims <i>may</i> arise from acts other than the intentional <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p807" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">807</a><a class="gsl_pagenum2" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p807" id="p807" style="color: #aaaaaa; font-size: 13px; text-decoration-line: none;">*807</a> tort, it does not support a finding that such is the case here. <a href="https://scholar.google.com/scholar_case?case=12212600621068189027&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">787 S.W.2d at 51</a>.</div>
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<i>Ryan</i> involved multiple intentional torts. <a href="https://scholar.google.com/scholar_case?case=14723131436650528833&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">889 S.W.2d at 341</a>. This court recognized that an intervening intentional tort does not automatically bar the negligence claim "simply because [the intentional tort] played a role." <i>Id.</i> at 343. We then determined the tangible personal property alleged to have been used, diagnostic tests and evaluation forms to determine the youth's placement, was not property under the TTCA. We further held the causal nexus required under section 101.021(2) was absent because the tests and forms were not the "direct devices" which proximately caused the plaintiff's injuries. <i>Id.</i> at 344-45; Tex. Civ. Prac. & Rem. Code § 101.021(2). Like <i>Young, Ryan</i> acknowledges an intervening intentional tort does not <i>necessarily</i> preclude a negligence claim. But unlike <i>Ryan,</i> the nexus we are concerned with is whether the claim arises from an intentional tort. <i>See </i><a href="https://scholar.google.com/scholar_case?case=12686332157283260725&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Delaney,</i> 835 S.W.2d at 59</a>; Tex. Civ. Prac. & Rem. Code § 101.057.</div>
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As this court recognized in <a href="https://scholar.google.com/scholar_case?case=4982422254817730411&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Holder v. Mellon Mortgage Co.,</i> 954 S.W.2d 786, 806-807 (Tex. App.-Houston [14th Dist.] 1997),</a> <i>rev'd on other grounds,</i> <a href="https://scholar.google.com/scholar_case?case=11092381314940210773&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;">5 S.W.3d 654 (Tex. 1999),</a> the nexus between the use of the property and the alleged negligent conduct causing the injury is the critical inquiry. In that case, the plaintiff was raped by a police officer in the City's police car. <i>Id.</i> at 789. The plaintiff alleged the City was negligent in hiring the officer, retaining him, entrusting him with a badge and a police car, and in monitoring his activities and failing to discover his personal and emotional problems. <i>Id.</i> at 804. The plaintiff argued her claim did not arise from the officer's intentional tort, but from the City's negligent supervision and monitoring of the officer and his use of its police car, which was the tangible personal property in that case. <i>Id.</i> at 805. We determined the patrol car was not the direct device that caused the plaintiff's injury and the required causal nexus for liability was absent, stating the cause of the plaintiff's injury was the officer's intentional assault. <i>Id.</i> at 807.</div>
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Annab's injuries were caused by Caplan's gun and there are no allegations of a causal connection between the alleged negligent conduct and Caplan's use of that gun. <i>See </i><a href="https://scholar.google.com/scholar_case?case=15342485005605222751&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>McCord v. Mem'l Med. Ctr. Hosp.,</i> 750 S.W.2d 362 (Tex. App.-Corpus Christi 1988, no writ)</a> (the use of the nightstick against the plaintiff was committed by the security guard in the course of an intentional tort, precluding plaintiff's claim); <a href="https://scholar.google.com/scholar_case?case=624847629681625332&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Townsend v. Mem'l Med. Ctr.,</i> 529 S.W.2d 264 (Tex. Civ. App.-Corpus Christi 1975, writ ref'd n.r.e</a>.) (the essence of the plaintiff's complaint was the rape, an intentional tort excluded by the TTCA). There are no factual allegations in Annab's pleadings as to how Harris County used or misused the gun. <i>See </i><a href="https://scholar.google.com/scholar_case?case=425048539109638420&q=14-16-00348-CV&hl=en&as_sdt=6,44" style="color: #660099;"><i>Tex. Dep't of Criminal Justice v. Miller,</i> 51 S.W.3d 583, 587-88 (2001)</a> (recognizing that non-use of property does not waive immunity under the TTCA but misuse is within the waiver). It is not alleged that Harris County had any right to take Caplan's gun or that if Harris County had never authorized, or withdrawn its authorization, for Caplan to use the gun he would not have been in lawful possession of his own gun in his own personal car.<sup><a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#[6]" name="r[6]" style="color: #660099;">[3]</a></sup> </div>
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Because Annab's pleadings, if taken as true, establish her claims arise from an intentional tort, I would find her claims against Harris County for negligence <a class="gsl_pagenum" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#p808" style="color: #aaaaaa; font-size: 13px; left: -55px; position: absolute; text-decoration-line: none;">808</a>are precluded by the TTCA and affirm the trial court's order.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[1]" name="[1]" style="color: #660099;">[1]</a> The record contains no reporter's record from the hearing.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[2]" name="[2]" style="color: #660099;">[2]</a> Based on our conclusion, we also sustain Annab's first issue that the trial court erred if it granted Harris County's plea based on the intentional torts exclusion for the same reasons.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[3]" name="[3]" style="color: #660099;">[3]</a> In her brief, Annab states she is not making a claim against Harris County for negligent hiring, retention, training, or supervision. Accordingly, we limit our discussion to Harris County's argument related to negligent entrustment.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[4]" name="[4]" style="color: #660099;">[1]</a> Annab conceded at oral argument the gun was owned by Caplan and he was not on duty.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[5]" name="[5]" style="color: #660099;">[2]</a> As the majority notes, none of these claims are at issue in this case.</div>
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<a class="gsl_hash" href="https://scholar.google.com/scholar_case?case=13059733575988898185&q=14-16-00348-CV&hl=en&as_sdt=6,44#r[6]" name="[6]" style="color: #660099; text-decoration: underline;">[3]</a> Harris County's assertion in its plea to the jurisdiction that Caplan was driving his own car has never been disputed.</div>
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<span style="color: #cc0000;"><b>CASE INFO AND LINKS </b></span></div>
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<a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0329&coa=cossup">17-0329</a></div>
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HARRIS COUNTY, TEXAS v. LORI ANNAB; from Harris County; 14th Court of Appeals District (<a href="http://www.search.txcourts.gov/Case.aspx?cn=14-16-00348-CV&coa=coa14">14-16-00348-CV</a>, 524 SW3d 793, 03-14-17)</div>
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<span class="a70" style="color: black; font-size: 13pt;">The Court affirms in part and reverses in part the court of appeals' judgment and renders judgment.<br /><br />Justice Blacklock delivered the <a data-udi="umb://media/61dba2e5036b46e8bd664683b7d7d255" href="http://www.txcourts.gov/media/1441581/170329.pdf" rel="noopener noreferrer" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="170329">opinion of the Court</a>.</span><br />
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<a href="http://www.search.txcourts.gov/Case.aspx?cn=17-0329" style="color: #551a8b; text-decoration-line: none;" title="17-0329 Electronic Briefs">View Electronic Briefs </a>| <a href="http://www.texasbarcle.com/CLE/TSCPlayMP3.asp?sCaseNo=17-0329" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="17-0329 Oral Arguments">Oral Argument</a> | <a href="http://www.texasbarcle.com/CLE/TSCPlayVideo.asp?sCaseNo=17-0329" style="color: #551a8b; text-decoration-line: none;" target="_blank" title="17-0329 Video">Video</a></div>
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<br />MOTPhttp://www.blogger.com/profile/15883011307129083993noreply@blogger.com0tag:blogger.com,1999:blog-5868228445339771425.post-83700184217032741422018-05-10T22:02:00.002-05:002018-07-02T10:10:21.950-05:00Law Firm cannot recover on cause of action for Invasion of Privacy because such theory is not recognized in Texas, First COA holds, and reverses judgment <div style="text-align: center;">
Doggett v. The Travis Law Firm P.C.<br />
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<b><span style="color: #cc0000;">PICTURE-PERFECT EXAMPLE OF TRAVIS LAW FIRM ... </span></b></div>
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<span style="text-align: start;">Jeffrey L. Doggett v The Travis Law Firm, P.C. f/k/a Travis & Hammond, P.C., </span><a href="http://www.search.txcourts.gov/Case.aspx?cn=01-17-00098-CV&coa=coa01" style="text-align: start;">No. 01-17-00098-CV</a><span style="text-align: start;"> (Tex.App. - Houston [1st Dist.] Feb. 9, 2017) (corporate entities have no cause of action for invasion of privacy under Texas law). </span></div>
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<a href="https://1.bp.blogspot.com/-xIQwhcse70w/WvUGC1pDDzI/AAAAAAAAH24/tP7XOZfOS1MYc8vBiz6N9SM0cl2lXgUggCKgBGAs/s1600/DSCN2896.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1274" height="400" src="https://1.bp.blogspot.com/-xIQwhcse70w/WvUGC1pDDzI/AAAAAAAAH24/tP7XOZfOS1MYc8vBiz6N9SM0cl2lXgUggCKgBGAs/s400/DSCN2896.JPG" width="317" /></a></div>
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<b><span style="color: #cc0000;">... JUNK LITIGATION</span></b></div>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="text-align: start;">Invasion of privacy is the theory on which The Travis Law Firm tried its case and on which the jury was charged. Texas courts have not recognized a corporation’s right to privacy, and we likewise decline to do so here. The Travis Law Firm cannot recover for invasion of privacy by appropriation of name or likeness. Accordingly, we sustain Doggett’s first issue.</span> </blockquote>
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<span style="text-align: start;">Conclusion</span></blockquote>
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<span style="text-align: start;"> Having determined that that The Travis Law Firm cannot recover on its cause of action for invasion of privacy, we reverse the judgment of the trial court and render judgment that The Travis Law Firm take nothing against Doggett on its invasion of privacy claim.</span></blockquote>
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<br />
<blockquote class="tr_bq">
<br /></blockquote>
<div style="text-align: center;">
Opinion issued May 10, 2018</div>
<div style="text-align: center;">
In The</div>
<div style="text-align: center;">
Court of Appeals</div>
<div style="text-align: center;">
For The</div>
<div style="text-align: center;">
First District of Texas</div>
<div style="text-align: center;">
————————————</div>
<div style="text-align: center;">
NO. 01-17-00098-CV</div>
<div style="text-align: center;">
———————————</div>
<div style="text-align: center;">
JEFFREY L. DOGGETT, Appellant</div>
<div style="text-align: center;">
V.</div>
<div style="text-align: center;">
THE TRAVIS LAW FIRM, P.C. F/K/A TRAVIS & HAMMOND, P.C.,</div>
<div style="text-align: center;">
Appellee</div>
<div style="text-align: center;">
On Appeal from the 333rd District Court</div>
<div style="text-align: center;">
Harris County, Texas</div>
<div style="text-align: center;">
Trial Court Case No. 2014-10648</div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<b><span style="font-size: large;">O P I N I O N</span></b></div>
<div style="text-align: center;">
<br /></div>
Appellant, Jeffrey L. Doggett, appeals the trial court’s judgment rendered in<br />
favor of appellee, The Travis Law Firm f/k/a Travis & Hammond, P.C. (“The Travis<br />
Law Firm”), on its cause of action for invasion of privacy by appropriation of name<br />
2<br />
or likeness. Doggett raises eight issues on appeal. In issues one and five through<br />
eight, Doggett contends that The Travis Law Firm cannot recover on its claim for<br />
invasion of privacy by misappropriation because (1) a corporation does not have a<br />
right to privacy; (2) there was no evidence presented at trial that (a) The Travis Law<br />
Firm’s name had any value, (b) the alleged appropriation of the name was for any<br />
such value, (c) the alleged appropriation resulted in a benefit to Doggett, and (d) The<br />
Travis Law Firm’s alleged damages were the proximate consequence of Doggett’s<br />
appropriation of its name; and (3) the evidence conclusively proved that The Travis<br />
Law Firm (a) consented to Doggett’s use of its name and (b) was estopped from<br />
complaining about Doggett’s use of its name. In issues two through four, Doggett<br />
argues that The Travis Law Firm cannot recover attorney’s fees from a prior lawsuit<br />
as actual damages because (1) the Texas Supreme Court has not adopted an equitable<br />
exception to the general rule regarding attorney’s fees; (2) an attorney representing<br />
himself does not incur attorney’s fees; and (3) The Travis Law Firm was not a<br />
prevailing party in the prior lawsuit. We reverse and render.<br />
Background<br />
In 2008, Gregory R. Travis, the sole shareholder of The Travis Law Firm, met<br />
with William D. Hammond to discuss the possibility of working together. Travis<br />
and Hammond agreed to change the firm’s name to Travis & Hammond, P.C.<br />
3<br />
At trial, Travis testified that he and Hammond changed the name of the firm<br />
to facilitate a cross-marketing agreement between them. Travis testified that<br />
Hammond’s role at the firm was that of a contract employee only but that Hammond<br />
was allowed to obtain, in his individual capacity, the d/b/a designation of Travis &<br />
Hammond. Travis testified that the arrangement ultimately “didn’t work out” and<br />
ended approximately nine months later.1<br />
<br />
Hammond, however, disputed Travis’s characterization of their arrangement.<br />
Hammond testified that he became a partner and that he and Travis represented<br />
themselves as partners to the public as well to as the bar.<br />
Doggett began working at Travis & Hammond in 2008. Doggett and<br />
Hammond testified that Travis offered, and Doggett accepted, an “of counsel”<br />
position with the firm. Doggett testified that, as part of the arrangement, he was<br />
allowed to use the firm phone number, fax number, the email address<br />
jdoggett@travishammondlaw.com, as well as internet and office facilities, including<br />
the storage room, kitchen, and conference room. Doggett also testified that the firm<br />
receptionist answered his calls and the firm offered to do his billing. Hammond<br />
testified that, as a firm partner, he authorized Doggett to use the firm letterhead and<br />
the firm name, without limitation, and that he specifically asked Doggett to use the<br />
<br />
1 Travis testified that the firm became Travis & Portele, P.C. but was later renamed<br />
The Travis Law Firm.<br />
4<br />
firm letterhead in cases on which they worked together. Hammond further testified<br />
that the firm listed Doggett’s name together with the firm’s name in pleadings, and<br />
that Doggett used the firm’s name in some of the pleadings he filed. Doggett’s<br />
biography and photograph were included in the firm’s marketing materials and on<br />
the firm’s website.<br />
Travis testified that he never discussed an “of counsel” role for Doggett, that<br />
Doggett’s role at the firm was limited to leasing office space and working on his<br />
own cases as well as Hammond’s cases, and that any work Doggett performed on<br />
Travis’s cases was as a contract attorney. Travis further testified that Hammond did<br />
not have the authority to bind Travis & Hammond, and that Doggett was prohibited<br />
from using the Travis & Hammond name on cases that Doggett brought in and<br />
worked on in his individual capacity.<br />
Sometime in 2008, Doggett was hired to represent a client named Li Li in a<br />
lawsuit (the “1821 litigation”) in which the client was sued for breach of contract<br />
and negligence. Doggett testified that Ms. Li hired him in his individual capacity,<br />
and that she did not hire Travis & Hammond. Nevertheless, Doggett sent emails to<br />
Ms. Li using the jdoggett@travishammondlaw.com email account that included a<br />
signature line showing Doggett’s name and Travis & Hammond, P.C. together.<br />
Doggett also signed the original answer for Ms. Li as well as a counterclaim on her<br />
behalf under the designation Travis & Hammond, P.C. Doggett received $14,279.31<br />
5<br />
for representing Ms. Li in the “1821 litigation.” On September 29, 2010, the trial<br />
court rendered judgment against Ms. Li.<br />
On December 7, 2012, Ms. Li sued Doggett and The Travis Law Firm f/k/a<br />
Travis & Hammond, P.C., alleging that Doggett had committed malpractice in his<br />
representation of her, and that The Travis Law Firm was liable under a theory of<br />
respondeat superior. Travis asked Doggett to defend the firm in the malpractice<br />
litigation but Doggett told Travis that he could not do so because he was a fact<br />
witness in the case and was representing himself, and that he was concerned that a<br />
conflict of interest existed. Doggett subsequently represented himself and The<br />
Travis Law Firm represented itself in the malpractice suit. On September 13, 2013,<br />
one day before her scheduled deposition, Ms. Li non-suited her claims against<br />
Doggett and The Travis Law Firm.<br />
On February 28, 2014, The Travis Law Firm filed suit against Doggett,<br />
alleging causes of action for negligence and invasion of privacy by appropriation of<br />
name or likeness. It later amended its petition to add claims for fraud, fraud by<br />
nondisclosure, and breach of contract.<br />
The case proceeded to trial on August 15, 2016. The Travis Law Firm<br />
submitted two causes of action to the jury: (1) invasion of privacy by appropriation<br />
of name or likeness and (2) breach of contract. As relevant here, the charge stated:<br />
6<br />
QUESTION NO. 1<br />
Did Doggett invade the privacy of Travis Law Firm by appropriation of<br />
the name and/or likeness of Travis Law Firm?<br />
“Appropriate the name and/or likeness” means the following:<br />
a. Doggett used Travis Law Firm’s name or likeness, including its former<br />
name Travis & Hammond, P.C. for the value associated with it; and<br />
b. Travis Law Firm could be identified by Doggett’s use of Travis Law<br />
Firm’s name or likeness; and<br />
c. Doggett received some advantage or benefit from the appropriation;<br />
and<br />
d. Travis Law Firm suffered an injury as a result of Doggett’s<br />
appropriation.<br />
The jury answered “Yes” and awarded $24,279.31 in damages to The Travis Law<br />
Firm on its invasion of privacy claim. Although the jury found that Doggett had<br />
breached his agreement with The Travis Law Firm, it found that his failure to comply<br />
was excused.<br />
On September 16, 2016, The Travis Law Firm filed a motion for judgment.<br />
Doggett filed a response to the motion and request for oral hearing. On October 4,<br />
2016, Doggett filed a motion for judgment notwithstanding the verdict (“JNOV”).<br />
In his motion, Doggett argued, among other things, that The Travis Law Firm could<br />
not recover on its invasion of privacy claim by appropriation of name or likeness<br />
because Texas law does not recognize a corporation’s right to privacy. On<br />
November 4, 2016, the trial court held a hearing on the motion for judgment and the<br />
7<br />
motion JNOV. The trial court deferred ruling on the motions and requested<br />
supplemental briefing from the parties.<br />
On November 11, 2016, the trial court rendered judgment on the jury’s verdict<br />
in favor of The Travis Law Firm and awarded damages in the amount of $24,279.31.<br />
On December 9, 2016, Doggett filed a motion for new trial and, on January 6, 2017,<br />
a motion to reconsider his motion JNOV or, alternatively, a motion to vacate and/or<br />
modify the judgment, both of which were overruled by operation of law. Doggett<br />
timely filed this appeal.<br />
Discussion<br />
In his first issue, Doggett contends that the trial court erred in rendering<br />
judgment in favor of The Travis Law Firm on its invasion of privacy claim by<br />
appropriation of name of likeness because Texas law does not recognize a right of<br />
privacy for a corporation. The Travis Law Firm argues that a corporation can prevail<br />
under such a theory.<br />
Invasion of privacy is an intentional tort. See Billings v. Atkinson, 489 S.W.2d<br />
858, 860–61 (Tex. 1973). Texas recognizes three separate types of invasion of<br />
privacy: (1) intrusion upon seclusion or solitude or into one’s private affairs; (2)<br />
public disclosure of embarrassing private facts; and (3) wrongful appropriation of<br />
8<br />
one’s name or likeness. See Cain v. Hearst Corp., 878 S.W.2d 577, 578 (Tex. 1994)<br />
(discussing cases recognizing each type of privacy right).2<br />
The three elements of invasion of privacy by misappropriation are (1) the<br />
defendant appropriated the plaintiff’s name or likeness for the value associated with<br />
it; (2) the plaintiff can be identified from the publication; and (3) there was some<br />
advantage or benefit to the defendant. Express One Int’l, Inc. v. Steinbeck, 53<br />
S.W.3d 895, 900 (Tex. App.—Dallas 2001, no pet.) (citing Matthews v. Wozencraft,<br />
15 F.3d 432, 437 (5th Cir. 1994)). Texas law applies a very restrictive interpretation<br />
of the tort. See Cardiovascular Provider Res., Inc. v. Gottlich, No. 05-13-01763-<br />
CV, 2015 WL 4914725, at *3 (Tex. App.—Dallas Aug. 18, 2015, pet. denied) (mem.<br />
op.) (citing Meadows v. Hartford Life Ins. Co., 492 F.3d 634, 639 (5th Cir. 2007)).<br />
No Texas authority has recognized a corporation’s right to privacy. See<br />
Abbott v. Gametech Int’l, Inc., No. 03-06-00257-CV, 2009 WL 1708815, at *7 (Tex.<br />
App.—Austin June 17, 2009, pet. denied) (noting no Texas authority recognizes<br />
corporation’s right to privacy, and declining to recognize such right); Chair King,<br />
Inc. v. GTE Mobilnet, 135 S.W.3d 365, 395 (Tex. App.—Houston [14th Dist.] 2004),<br />
rev’d on other grounds, 184 S.W.3d 707 (Tex. 2006) (same); Express One, 53<br />
S.W.3d at 900; see also MICHOL O’CONNOR, TEXAS CAUSES OF ACTION 409 (2017)<br />
<br />
2<br />
In Cain v. Heart Corp., the Texas Supreme Court expressly declined to recognize a<br />
false light invasion of privacy action. See 878 S.W.2d 577, 578 (Tex. 1994).<br />
9<br />
(noting corporations do not have right to privacy and probably cannot recover for<br />
invasion of privacy by appropriation of name or likeness). Doggett argues that<br />
because Texas does not recognize a right of privacy for a corporation, and<br />
appropriation of name or likeness is a species of invasion of privacy, The Travis Law<br />
Firm cannot recover on its appropriation claim.<br />
In support of its assertion that it can recover under a misappropriation theory,<br />
The Travis Law Firm cites U.S. Sporting Prods., Inc. v. Johnny Stewart Game Calls,<br />
Inc., 865 S.W.2d 214 (Tex. App.—Waco 1993, writ denied). In that case, the<br />
plaintiff corporation sued a sporting goods corporation and its president for<br />
misappropriation of its animal sound tape recordings. See id. at 216. Following a<br />
jury trial, the trial court rendered judgment for the plaintiff, and the defendant<br />
appealed. See id. In particular, the defendant argued that the plaintiff had failed to<br />
state a claim for misappropriation as it is recognized under Texas law. See id. The<br />
court of appeals rejected the defendant’s argument and recognized a cause of action<br />
for misappropriation. See id. at 218.<br />
U.S. Sporting Goods is inapposite to the case before us. There, the court<br />
recognized the plaintiff’s misappropriation claim as one of several independent<br />
causes of action within the broad scope of unfair competition. See id. at 217. Here,<br />
10<br />
The Travis Law Firm alleged a claim for invasion of privacy, not unfair<br />
competition.3<br />
The Travis Law Firm also relies on Express One. 53 S.W.3d 895. In that<br />
case, Express One International sought to recover damages from Steinbeck, a former<br />
Express One pilot, after Steinbeck, using the screen name “ExpresONE,” allegedly<br />
posted on an internet message board a message containing negative comments about<br />
union supporters during a labor representation election campaign. See id. at 897.<br />
After it denied responsibility, Express One sued Steinbeck for trade name dilution,<br />
invasion of privacy, negligence, and conversion. See id. The trial court granted<br />
summary judgment in favor of Steinbeck, and Express One appealed. See id. at 898.<br />
In addressing Express One’s challenge to the summary judgment granted on<br />
its invasion of privacy claim, the trial court stated<br />
Express One acknowledges there is no Texas authority granting<br />
corporations a right of privacy. It argues, however, that a corporation<br />
should be allowed to sue for invasion of privacy as a logical extension<br />
of its right to sue in tort. Express One notes that its invasion of privacy<br />
claim is not based on allegations of intrusion into its seclusion, but<br />
rather on the alleged misappropriation of its name. Express One argues<br />
that this species of invasion of privacy should be equally available to<br />
corporations as it is to individuals.<br />
<br />
3 The Travis Law Firm also cites International News Service v. Associated Press, 248<br />
U.S. 215, 39 S. Ct. 68 (1918) and Gilmore v. Sammons, 269 S.W. 861 (Tex. Civ.<br />
App.—Dallas 1925, writ ref’d). Similar to U.S. Sporting Goods, these courts<br />
recognized the plaintiffs’ appropriation claims within the scope of unfair<br />
competition law and not as invasion of privacy actions.<br />
11<br />
Id. at 900. The court then stated, “[e]ven assuming Express One had a legal right to<br />
sue for invasion of privacy by virtue of the alleged misappropriation of its name, we<br />
conclude it produced no evidence to support its cause of action.” Id. In particular,<br />
the court noted that Express One produced no evidence that Steinbeck appropriated<br />
the name “Express One” for his own benefit because of any value associated with<br />
the name. See id. The court upheld the summary judgment granted on Express<br />
One’s appropriation claim. See id.<br />
The Travis Law Firm argues that the Express One decision supports its<br />
position because the court did not hold that a misappropriation cause of action is<br />
unavailable to a corporation, rather it “assumed that the corporation plaintiff had a<br />
viable cause of action for appropriation” and fully considered the claim. However,<br />
the Express One court began its analysis of the issue by noting that no Texas<br />
authority has recognized a corporation’s right to privacy. It then stated that even if<br />
Express One had such a right, it would still not prevail on its claim. We do not read<br />
the court’s analysis as suggesting anything more.<br />
The Travis Law Firm also cites Anambra State Community in Houston, Inc.<br />
v. Ulasi, 412 S.W.3d 786 (Tex. App.—Houston [14th Dist.] 2013, no pet.) in support<br />
of its argument that a corporation can maintain a misappropriation claim. There,<br />
ANASCO, a non-profit corporation, sued former executives alleging causes of<br />
action for breach of fiduciary duty, fraudulent misrepresentation, invasion of privacy<br />
12<br />
by appropriation of corporation’s name and likeness, and criminal liability. See id.<br />
at 789. The parties filed cross-motions for summary judgment, and the trial court<br />
granted the executives’ motion. Id. at 789–90. The trial court subsequently issued<br />
an order stating, among other things, that it had inadvertently granted the executives’<br />
motion, the case presented no justiciable controversy within the court’s subject<br />
matter jurisdiction, and to the extent that a justiciable controversy existed, the court<br />
declined to exercise jurisdiction over the internal affairs of a private, non-profit<br />
organization. See id. at 790. The trial court vacated its prior summary judgment<br />
order, declined to rule on the competing summary judgment motions, and dismissed<br />
all of the corporation’s claims. See id.<br />
On appeal, the Fourteenth Court of Appeals upheld the portion of the trial<br />
court’s judgment dismissing the corporation’s claim seeking to impose criminal<br />
liability on the executives. See id. at 791. With regard to the remaining claims,<br />
including the invasion of privacy by appropriation of name of likeness, the court of<br />
appeals concluded that the claims presented justiciable controversies within the trial<br />
court’s subject matter jurisdiction. See id. at 792. In making its determination, the<br />
trial court expressly stated that it was not addressing the merits of those claims. See<br />
id. at 791 n.3.<br />
The Travis Law Firm argues that “ANASCO thus presents, at a minimum an<br />
implicit, if not explicit, holding that a corporation, such as Travis & Hammond, can<br />
13<br />
maintain a claim for misappropriation of name or likeness.” But, a determination<br />
that subject matter jurisdiction exists in the trial court says nothing about the viability<br />
of the claims asserted. Indeed, the court of appeals noted that the issue of whether<br />
the claims had merit was not before it. See id.<br />
Invasion of privacy is the theory on which The Travis Law Firm tried its case<br />
and on which the jury was charged. Texas courts have not recognized a<br />
corporation’s right to privacy, and we likewise decline to do so here. The Travis<br />
Law Firm cannot recover for invasion of privacy by appropriation of name or<br />
likeness. Accordingly, we sustain Doggett’s first issue.4<br />
Conclusion<br />
Having determined that that The Travis Law Firm cannot recover on its cause<br />
of action for invasion of privacy, we reverse the judgment of the trial court and<br />
render judgment that The Travis Law Firm take nothing against Doggett on its<br />
invasion of privacy claim.<br />
<br />
Russell Lloyd<br />
Justice<br />
<br />
Panel consists of Justices Keyes, Bland, and Lloyd.<br />
<br />
4<br />
In light of our disposition, we need not address Doggett’s remaining evidentiary<br />
issues and his issues challenging the recovery of attorney’s fees. See TEX. R. APP.<br />
P. 47.1.<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://3.bp.blogspot.com/-gpCzDukmrzo/WvUFzHZm7KI/AAAAAAAAH20/qimLqouvbJ4jFYd9p29emlxA7BIp82UygCKgBGAs/s1600/DSCN2896.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1600" data-original-width="1274" height="640" src="https://3.bp.blogspot.com/-gpCzDukmrzo/WvUFzHZm7KI/AAAAAAAAH20/qimLqouvbJ4jFYd9p29emlxA7BIp82UygCKgBGAs/s640/DSCN2896.JPG" width="508" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">The Harris County Courthouse has endured all sorts of things </td></tr>
</tbody></table>
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<div style="text-align: center;">
<br />
<div style="text-align: center;">
<b><span style="color: #990000; font-size: large;">JUDGMENT</span></b></div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
Court of Appeals</div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
First District of Texas</div>
<div style="text-align: center;">
NO. 01-17-00098-CV</div>
<div style="text-align: center;">
JEFFREY L. DOGGETT, Appellant</div>
<div style="text-align: center;">
V.</div>
<div style="text-align: center;">
THE TRAVIS LAW FIRM, P.C. F/K/A TRAVIS & HAMMOND, P.C., Appellee</div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: left;">
Appeal from the 333rd District Court of Harris County. (Tr. Ct. No. 2014-10648).</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
This case is an appeal from the final judgment signed by the trial court on</div>
<div style="text-align: left;">
November 11, 2016. After submitting the case on the appellate record and the arguments</div>
<div style="text-align: left;">
properly raised by the parties, the Court holds that there was reversible error in the trial</div>
<div style="text-align: left;">
court’s judgment because The Travis Law Firm cannot recover for invasion of privacy by</div>
<div style="text-align: left;">
appropriation of name or likeness. Accordingly, the Court reverses the trial court’s</div>
<div style="text-align: left;">
judgment and renders judgment that The Travis Law Firm take nothing against Jeffrey</div>
<div style="text-align: left;">
L. Doggett on its invasion of privacy claim.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
The Court orders that this decision be certified below for observance.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Judgment rendered May 10, 2018.</div>
<div style="text-align: left;">
<br /></div>
<div style="text-align: left;">
Panel consists of Justices Keyes, Bland, and Lloyd. Opinion delivered by Justice Lloyd.</div>
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