Showing posts with label lawyer-lingo. Show all posts
Showing posts with label lawyer-lingo. Show all posts

Monday, March 4, 2013

Claim Preclusion and Issue Preclusion

   
BOTH CLAIM PRECLUSION AND ISSUE PRECLUSION FALL UNDER THE RUBRIC "RES JUDICATA" --BROADLY SPEAKING  
(loosly translated from Latin as "stuff already decided by a judge")
  
But the case law nevertheless makes distinction between res judicata narrowly speaking and collateral estoppel

The term res judicata "is the generic term for a group of related concepts concerning the conclusive effects given final judgments." Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). "Within this general doctrine, there are two principal categories: (1) claim preclusion (also known as res judicata); and (2) issue preclusion (also known as collateral estoppel)." Id.
 
The category at issue in this case, claim preclusion, "prevents the relitigation of a claim or cause of action that has been finally adjudicated, as well as related matters that, with the use of diligence, should have been litigated in the prior suit." Id.
 
Claim preclusion prohibits the "assertion of a claim in a subsequent case when (1) there is a final determination on the merits by a court of competent jurisdiction; (2) the parties in the second action are the same or in privity with those in the first action; and (3) the second action is based on the same claims as were raised or could have been raised in the first action." Pipes v. Hemingway, 358 S.W.3d 438, 448 (Tex. App.-Dallas 2012, no pet.). Accordingly, a second suit asserting "`matters actually litigated and on causes of action or defenses arising out of the same subject matter that might have been litigated in the first suit'" is precluded by the doctrine of res judicata. Id. (quoting Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010)).

Cf. Harris Cnty. v. Sykes, 136 S.W.3d 635, 640 (Tex. 2004) (stating that "a dismissal constitutes a final determination on the merits of the matter actually decided"); Ritchey v. Vasquez, 986 S.W.2d 611, 612 (Tex. 1999) (per curiam) (explaining that dismissal with prejudice qualifies as final determination on merits). 

See Hallco Tex., Inc. v. McMullen Cnty., 221 S.W.3d 50, 58 (Tex. 2006) (explaining that doctrine of res judicata "requires claims arising out of the same subject matter to be litigated in a single lawsuit").

SOURCE: AUSTIN COURT OF APPEAL - No. 03-11-00091-CV – 2/1/2013 – Smith v. City of Blanco

 
In Hallco Tex., Inc. v. McMullen Cnty., 221 S.W.3d 50, 58 (Tex. 2006), the Texas Supreme Court summarized the doctrine, and explained the rationale for it, as follows:

The doctrine of res judicata, or claim preclusion, bars a second action by parties and their privies on matters actually litigated in a previous suit, as well as claims "`which, through the exercise of diligence, could have been litigated in a prior suit.'" Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 799 (Tex.1992) (quoting Barr v. Resolution Trust Corp., 837 S.W.2d 627, 631 (Tex.1992)).
 
We apply the transactional approach to res judicata, which requires claims arising out of the same subject matter to be litigated in a single lawsuit. Barr, 837 S.W.2d at 631. The res-judicata doctrine "serves vital public interests" by promoting the finality of judgments. San Remo Hotel, L.P. v. San Francisco, 545 U.S. 323, 345, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005).
 
We have recognized that the doctrine prevents needless, repetitive litigation, John G. and Marie Stella Kenedy Mem'l Found. v. Dewhurst, 90 S.W.3d 268, 288-89 (Tex.2002) (citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979)), and in doing so, "advance[s] the interest[s] of the litigants (who must pay for each suit), the courts (who must try each suit), and the public (who must provide jurors and administration for each suit)." Schneider Nat'l Carriers, Inc., v. Bates, 147 S.W.3d 264, 278 (Tex. 2004).


 

Wednesday, May 23, 2012

One bite only: Res judicata doctrine stops second bite at the proverbial apple

 
The one-bite rule – as applicable to courthouse apple chumping rather than your neighbor’s dog
 
FROM LOFTY LATIN TO PLAIN ENGLISH: THE NO-TWO-BITES AT-THE-APPLE METAPHOR
 
Res judicata bars assertion of a claim in a subsequent case when (1) there is a prior final determination on the merits by a court of competent jurisdiction; (2) the parties in the second action are the same or in privity with those in the first action; and (3) the second action is based on the same claims as were raised or could have been raised in the first action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Res judicata precludes the relitigation of claims that were finally adjudicated “as well as related matters that, with the use of diligence, should have been litigated in the prior suit.” Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1991). Texas follows the transactional approach to res judicata barring claims arising out of the transaction or occurrence that is the subject matter of the first suit. State & Cnty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001).

As the Texas Supreme Court has explained, “[m]odern rules of procedure obviate the need to give parties two bites at the apple … to ensure that a claim receives full adjudication.” Barr, 837 S.W.2d at 631.
  
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-11-00122-CV – 5/23/12
  
[T]he court’s order was a public record which was on file for four years and which Nancy could have discovered with the use of diligence. See Barr, 837 S.W.2d at 628 (stating res judicata bars related matters that, with the use of diligence, should have been litigated in prior suit).

PS: If you came to this page through a search enging, but were looking for the other one-bite rule, here is a link: http://www.johnneeselaw.com/news/texas-dog-laws-understanding-the-one-bite-rule 

Tuesday, May 1, 2012

Just what is a retainer? – Apparently, it depends, as there are multiple usages

 
THE WORD “RETAINER” IS AMBIGUOUS EVEN AMONG THE LEGALLY SOPHISTICATED

The word “retainer” has a variety of meanings, including a client's authorization for the attorney to act in matter, a fee paid simply to have the attorney available when the client needs legal help, a lump-sum fee paid to engage the lawyer at the outset of the matter, and an advance payment for work to be performed in the future. Black's Law Dictionary 1341-42 (8th ed. 2004). Indeed,


Over the years, attorneys have used the term “retainer” in so many conflicting senses that it should be banished from the legal vocabulary. . . . If some primordial urge drives you to use the term “retainer,” at least explain what you mean in terms that both you and the client will understand.

Id. (quoting Mortimer D. Schwartz & Richard C. Wydick, Problems in Legal Ethics 100, 101 (2d ed. 1988)).


SOURCE:  DALLAS COURT OF APPEALS - 05-10-00725-CV – 4/27/12

Friday, April 20, 2012

Liz who? Liz what? - Lis Pendens ...

Lis pendens is Latin for pending lawsuit. The typical usage in English is "notice of lis pendens", -- a document putting interested parties (potential buyers of property) on notice that a particular piece of real estate is involving in litigation that is currently ongoing. 

LIS PENDENS IS NOT A CAUSE OF ACTION
 
A lis pendens may be filed during the pendency of an action involving title to real property, the establishment of an interest in real property, or an enforcement of an encumbrance against real property. TEX. PROP. CODE ANN. § 12.007 (West 2009). The purpose of a lis pendens is to put parties interested in a particular tract of land on notice as to the facts and issues involved in a suit or action concerning that particular tract. In re Jamail, 156 S.W.3d 104, 108 (Tex. App.—Austin 2004, orig. proceeding.); In re Collins, 172 S.W.3d 287, 292–93 (Tex. App.—Fort Worth 2005, orig. proceeding); Garza v. Pope, 949 S.W.2d 7, 8 (Tex. App.—San Antonio 1997, no writ). 
  
A lis pendens is not an independent claim, Collins v. Tex Mall, L.P., 297 S.W.3d 409, 419 (Tex. App.—Fort Worth 2009, no pet.), and has no existence separate and apart from the litigation of which it gives notice. Taliaferro v. Smith, 804 S.W.2d 548, 550 (Tex. App.—Houston [14th Dist.] 1991, no writ). Under Texas law, a lis pendens does not prevent a sale of the property; it merely places a purchaser on notice that a person other than the title holder claims an interest in the property. Group Purchases, Inc. v. Lance Inv., Inc., 685 S.W.2d 729, 731 (Tex. App.—Dallas 1985, writ ref’d n.r.e.). A lis pendens notice operates during the pendency of the lawsuit and terminates with the judgment, in the absence of appeal. Berg v. Wilson, 353 S.W.3d 166, 180 (Tex. App.—Texarkana 2011, pet. denied); see also Hartel v. Dishman, 135 Tex. 600, 145 S.W.2d 865, 869 (1940); Collins, 297 S.W.3d at 418.
Section 12.0071 of the Texas Property Code provides the statutory authority for expunging a lis pendens. TEX. PROP. CODE ANN. § 12.0071 (West Supp. 2011). Section 12.071 provides in part

(a) A party to an action in connection with which a notice of lis pendens has been filed may:

(1) apply to the court to expunge the notice; and

(2) file evidence, including declarations, with the motion to expunge the notice.

(b) The court may:

(1) permit evidence on the motion to be received in the form of oral testimony; and

(2) make any orders the court considers just to provide for discovery by a party affected by the motion.

(c) The court shall order the notice of lis pendens expunged if the court determines that:

(1) the pleading on which the notice is based does not contain a real property claim;

(2) the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim; or

(3) the person who filed the notice for record did not serve a copy of the notice on each party entitled to a copy under Section 12.007(d).

(d) Notice of a motion to expunge under Subsection (a) must be served on each affected party on or before the 20th day before the date of the hearing on the motion.

TEX. PROP. CODE ANN. § 12.0071 (West Supp. 2011). The record does not reflect that any party to the underlying action filed a motion to expunge the second lis pendens, nor do the children argue one was filed. It appears from the record the trial court sua sponte, only four days after the second lis pendens was filed, ordered the second lis pendens expunged.

Section 12.0071 allows a party to file a motion requesting the trial court expunge a notice lis pendens, but the statute requires that the motion be served on each affected person on or before the 20th day before a hearing on the matter. No party filed a motion and Carmen was not provided twenty days’ notice that the trial court was considering expunging the lis pendens. We hold the trial court erred in expunging the lis pendens sua sponte and without proper notice to each affected party.
  
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-11-00332-CV - 4/18/12

Monday, January 9, 2012

What is a "cause of action" in Texas courts?

  
Dallas Court of Appeals cites definitions of "cause of action" in med-mal case:
 
“[C]ause of action” has been interpreted to mean “a fact or facts entitling one to institute and maintain an action, which must be alleged and proved in order to obtain relief.” In re Jorden, 249 S.W.3d 416, 421 (Tex. 2008) (orig. proceeding) (internal quotations and citations omitted).  And “cause of action” has also been defined as “[a] group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in court from another person.” Id. (quoting Black's Law Dictionary 235 (8th ed. 2004)).
 
SOURCE: DALLAS COURT OF APPEALS - 05-10-01388-CV  - 1/6/12

Monday, December 19, 2011

Is it res judicata? (lawyer lingo)

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

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

Under the doctrine of res judicata, a party is precluded from litigating a claim in a pending action if: (1) in a previous action, a court of competent jurisdiction rendered a final determination on the merits of a claim; (2) the parties that litigated the prior claim are identical to or in privity with the parties litigating the pending claim; and (3) the pending claim (a) is identical to the prior claim or (b) arises out of the same subject matter as the prior claim and could have been litigated in the previous action. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).
 
SOURCE: HOUSTON COURT OF APPEALS - 01-10-01151-CV - 12/14/11

Wednesday, December 7, 2011

Lawyer Lingo: What is the name of the windfall-preclusion rule?


Can't get no satisfaction...? Well, some plaintiffs will, but the court will likely say once is enough 

 
THE ONE SATISFACTION RULE & SETTLEMENT CREDITS 
  
The purpose of the one satisfaction rule is to prevent a windfall to the plaintiff, not to deprive the plaintiff of full recovery for his or her injury from multiple defendants simply because a contract limits the liability of one of the defendants. See, e.g., First Title Co. of Waco v. Garrett, 860 S.W.2d 74, 78 (Tex. 1993) (“The rationale for this doctrine is that the plaintiff should not receive a windfall by recovering an amount in court that covers the plaintiff’s entire damages, but to which a settling defendant has already partially contributed.”); Smith v. Cudd Pressure Control, Inc., 126 S.W.3d 106, 110 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (“[T]he ‘One Satisfaction Rule’ . . . was designed to prevent a windfall to plaintiffs, and dictates that when a plaintiff files a suit against multiple defendants for a single injury, any settlements will be credited against the amount for which non-settling defendants are found liable.”) 

SOURCE: HOUSTON COURT OF APPEALS - 01-10-00672-CV - 12/1/11 

Wednesday, August 17, 2011

The nature of easements

  
TEXAS EASEMENT LAW

What is an easement?

An easement is a non-possessory interest in another’s property that authorizes the holder to use that property for a particular purpose. Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). An easement does not convey the property itself. Lakeside Launches, Inc. v. Austin Yacht Club, Inc., 750 S.W.2d 868, 871 (Tex. App.—Austin 1988, writ denied). For an easement appurtenant to exist either by implication or in writing, there must be (1) a dominant estate, to which the easement is attached; and (2) a servient estate, which is subject to the use of the dominant estate to the extent of the easement granted or reserved. Drye v. Eagle Rock Ranch, Inc., 364 S.W.2d 196, 207 (Tex. 1962).

In determining whether an easement has been granted expressly, we look to the same rules of construction applicable to deeds. Callejo v. City of Garland, 583 S.W.2d 925, 927 (Tex. App.—Dallas 1979, writ ref’d n.r.e.). Generally, a written instrument is required to validly convey an estate in land. See Tex. Prop. Code Ann. § 5.021 (Vernon 2003). Subject to some exceptions, a writing also is required to create an easement. Drye, 364 S.W.2d at 203.

IMPLIED EASEMENT

An implied easement is an exception to the rule that easements appurtenant must be created or transferred in writing. Drye, 364 S.W.2d at 203. It is “universally recognized” that — “without aid of language in the deed, and indeed sometimes in spite of such language” — the circumstances surrounding an owner’s conveyance of part of a previously unified tract of land may cause an easement to arise between the two new parcels. Mitchell v. Castellaw, 246 S.W.2d 163, 167 (Tex. 1952). Such an implied easement may arise in favor of the parcel granted (an implied grant), or in favor of the parcel retained by the grantor (an implied reservation). Id. “The basis of the doctrine is that the law reads into the instrument that which the circumstances show both grantor and grantee must have intended, had they given the obvious facts of the transaction proper consideration.” Id.

There are two forms of implied easement in Texas. The first is an easement by necessity, commonly called a “way of necessity.” See, e.g., Koonce v. Brite Estate, 663 S.W.2d 451, 452 (Tex. 1984); Duff v. Matthews, 311 S.W.2d 637, 640 (Tex. 1958). An easement by necessity is implied when the conveyed or retained parcel cannot be accessed except by traveling over the remaining tract of land. See Koonce, 663 S.W.2d at 452 (citing Bains v. Parker, 182 S.W.2d 397 (Tex. 1944)). An easement by necessity has three requirements: (1) unity of ownership of both parcels prior to separation; (2) access must be a necessity and not a mere convenience; and (3) the necessity must exist at the time of severance. Id. (citing Duff, 311 S.W.2d at 641).

A second type of implied easement is based on prior use of the land and is called an easement implied from a “quasi-easement.” See, e.g., Drye, 364 S.W.2d at 207–08; Ulbricht v. Friedsam, 325 S.W.2d 669, 676–77 (Tex. 1959). The Texas Supreme Court has identified the circumstances under which such an easement may be implied:

If an owner used one part of his land for the benefit of another portion of his own land, the portion served had a ‘quasi-dominant tenement’ [and] [t]he portion which was used was subject to a ‘quasi-servient tenement.’ . . . [W]hen the owner, under those circumstances, sold the portion of his land which had [made] use of the other portion — as for drainage, support, way, or water [— and that use was] apparent, continuous, and necessary to the use of the ‘dominant’ land sold, the courts presumed that the necessary use of the ‘servient’ tract passed by implication to the purchaser.

Drye, 364 S.W.2d at 207. A party claiming an easement by prior use must prove that at the time of the severance: (1) both parcels were under unified ownership; (2) the use was apparent; (3) the use was continuous; and (4) the use was necessary to the use of the dominant estate. Drye, 364 S.W.2d at 207–08; see also Bickler v. Bickler, 403 S.W.2d 354, 357 (Tex. 1966).

Texas courts routinely refer to implied easements based on prior use characteristics simply as “implied easements.” See Mack v. Landry, 22 S.W.3d 524, 530 (Tex. App.—Houston [14th Dist.] 2000, no pet.) (distinguishing between “easement by necessity” related to inaccessible tract of land and “implied easement” based on prior use characteristics); see also State v. Beeson, 232 S.W.3d 265, 273 n.7 (Tex. App.—Eastland 2007, pet. dism’d) (noting that the plaintiffs’ assertion of an implied easement was raised under theory of easement by necessity and was not governed by standards for “implied easement” based on prior use characteristics). The general term “implied easement” is potentially confusing because, by definition, both an easement by necessity and an easement by prior use are implied. See Othen v. Rosier, 226 S.W.2d 622, 626 (Tex. 1950); see also Beeson, 232 S.W.3d at 273 n.7; Mack, 22 S.W.3d at 530.[4]

The “strict necessity” requirement applies to an implied reservation of an easement, and the “reasonable necessity” requirement applies to an implied grant of an easement. See Houston Bellaire, Ltd. v. TCP LB Portfolio I, L.P., 981 S.W.2d 916, 921 (Tex. App.—Houston [1st Dist.] 1998, no pet.) (citing Mitchell, 246 S.W.2d at 168, and Howell v. Estes, 12 S.W. 62, 63 (Tex. 1888)). This rule applies to the element of necessity that is relevant to easements by necessity and to easements by prior use. See Mitchell, 246 S.W.2d at 168 (applying strict necessity rule from “way of necessity” precedent to claim involving reserved easement by prior use); see also Howell, 12 S.W. at 62–63 (“We think the weight of authority sustains the proposition that if an improvement [meets the requirements of an easement by prior use], the use of such improvement will pass as an easement, although it may not be absolutely necessary to the enjoyment of the [benefitted] estate conveyed.”). The Sebers correctly assert that if the right to use the crossing was conveyed as an impliedly granted easement, then they need show only reasonable necessity. See Mitchell, 246 S.W.2d at 168; Howell, 12 S.W. at 62–63.

An easement by necessity is temporary; it continues only so long as the necessity exists and terminates upon the cessation of the necessity. Bains, 182 S.W.2d at 399. Under this rule, a grantee must establish that its use of the easement continues to be “reasonably necessary” to its use of its property. See id. However, the Sebers expressly deny that they claim an easement by necessity; therefore, they need not establish that their use of the crossing continues to be reasonably necessary to their use of their larger tract of land. The dispute here centers on an easement by prior use. We have not identified and the parties do not cite any Texas authority applying this “continued necessity” rule to an otherwise valid implied easement by prior use. Cf. Zapata Cnty. v. Llanos, 239 S.W.2d 699, 702 (Tex. Civ. App.—San Antonio 1951, writ ref’d n.r.e.) (“‘A presumption frequently invoked [as justification for easements by prior use is] that the parties contracted with a view to the condition of the property as it actually was at the time of the transaction, and after sale neither party without the consent of the other has a right to change, to the detriment to the other, that condition which openly and visibly existed. . . . The rule itself, since it presupposes the existence of quasi easements, must be distinguished from the principle which underlies the creation of ways of necessity.’”) (quoting Miles v. Bodenheim, 193 S.W. 693, 696 (Tex. Civ. App.—Texarkana 1917, writ ref’d)).

Applying the “continued necessity” rule to easements by prior use would contradict the principle that the existence of such an easement depends only on the situation of the parties at the time of severance. See Westbrook v. Wright, 477 S.W.2d 663, 665–66 (Tex. Civ. App.—Houston [14th Dist.] 1972, no writ) (“Whether these requirements are met is to be determined at the time the grantor, the one imposing the quasi easement on one portion of his property for the benefit of another portion, conveys away the dominant tenement, that portion benefitted, and retains the servient tenement.”); see also Daniel v. Fox, 917 S.W.2d 106, 110 (Tex. App.—San Antonio 1996, writ denied) (“The situation of the parties at the time of the [partition] constitutes the operative facts to support the claim [of an impliedly granted easement based on prior use characteristics].”); Hoak v. Ferguson, 255 S.W.2d 258, 260 (Tex. Civ. App.—Fort Worth 1953, writ ref’d n.r.e.) (same).

Property ownership or a right to physical possession of real property is a necessary element of a trespass claim. See Tex. Women’s Univ. v. The Methodist Hosp., 221 S.W.3d 267, 286 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (“To recover damages for trespass to real property, a plaintiff must prove that . . . the plaintiff owns or has a lawful right to possess real property . . . .”). An easement is a non-possessory interest in land. See Marcus Cable Assocs., L.P., 90 S.W.3d at 700; Lakeside Launches, Inc., 750 S.W.2d at 871.

SOURCE: Houston Court of Appeals - 14-10-00195-CV - 8/16/11

Monday, August 1, 2011

More Lawyer Lingo: The Parol Evidence Rule - No, not that kind of parole ...

 
THE PAROL EVIDENCE RULE

 
-- Nota bene:  it's not spelled parole - No 'e' at the end

 
“The parol evidence rule provides that the terms of a written contract cannot be contradicted by evidence of an earlier, inconsistent agreement.” Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). The application of the parol evidence rule is a question of law that we review de novo. DeClaire v. G & B McIntosh Family Ltd., 260 S.W.3d 34, 45 (Tex. App.—Houston [1st Dist.] 2008, no pet.). The rule particularly applies when the written contract includes a merger clause or similar language. Baroid Equip., 184 S.W.3d at 13.

We may consider parol evidence, however, “to show want or failure of consideration, and to establish the real consideration given for an instrument.” DeLuca v. Munzel, 673 S.W.2d 373, 376 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.). See also RESTATEMENT (SECOND) OF CONTRACTS §§ 213 cmt. d, 214(d) (1981). We may consider parol evidence to determine if consideration exists “even though the parties have reduced their agreement to a writing which appears to be a completely integrated agreement.” RESTATEMENT (SECOND) OF CONTRACTS § 218(2).

We may also consider parol evidence to determine whether the parties intended a written agreement as a memorialization of their agreement (and therefore only had one contract) or a modification of the prior oral contract (and therefore had two contracts, each of which needed independent consideration as discussed below). See id. at § 210(3) (“Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.”); Mark K. Glasser & Keith A. Rowley, On Parol: The Construction and Interpretation of Written Agreements and the Role of Extrinsic Evidence in Contract Litigation, 49 BAYLOR L. REV. 657, 705–707 (1997).

SOURCE: Houston Court of Appeals - 01-10-00489-CV - 7/28/11

Sunday, July 31, 2011

Lawyer lingo: What is the meaning of novation?

 
CONTRACT LAW: NOVATION DEFINED
   
What is novation?
 
“Novation is the creation of a new obligation in the place of an old one, by which the parties agree that a new obligor will be substituted to perform the duties agreed upon by the old contract, while the original obligor is released from performing those duties.” Vandeventer v. All Am. Life & Cas. Co., 101 S.W.3d 703, 712 (Tex. App.-Fort Worth 2003, no pet.).
 
Elements of novation as a defense
  
A party that raises the affirmative defense of novation must prove (1) the validity of a previous obligation; (2) an agreement among all parties to accept a new contract; (3) the extinguishment of the previous obligation; and (4) the validity of the new agreement. Vickery v. Vickery, 999 S.W.2d 342, 356 (Tex. 1999).

SOURCE: Dallas Court of Appeals - 05-10-00234-CV - 7/29/11