Collection of a Promissory Note - Multiple Instruments pertaining to the obligationa

Collection of a Promissory Note: Essential elements the creditor must prove 

To collect on a promissory note, a plaintiff m ust establish: (1) that the note exists; (2) that the defendant signed the note; (3) that the plaintiff is the owner and holder of the note; and (4) that a certain balance is due and owing on the note. Cadle Co. v. Regency Homes, Inc., 21 S.W.3d 670, 674 (Tex. App.—Austin 2000, pet. denied); see also Clark v. Dedina, 658 S.W.2d 293, 295–96 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d).

Business and Commerce Code Section 3.117

Business and commerce code section 3.117, titled “Other Agreements Affecting Instrument,” states in relevant part that

the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.

Tex. Bus. & Com. Code Ann. § 3.117 (West 2002). “The separate agreement might be a security agreement . . . that contradicts the terms of the instrument.” Id. § 3.117 cmt. 1 (West Supp. 2010)

Multiple instruments / documents can be given effect as if they were one

Additionally, where two or more instruments, executed contemporaneously or at different times, pertain to the same transaction, the instruments will be read together, even though they do not expressly refer to each other. Bd. of Ins. Comm’rs v. Great S. Life Ins. Co., 150 Tex. 258, 267, 239 S.W.2d 803, 809 (1951); see also Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (stating that it is “well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent”).

SOURCE: Fort Worth Court of Appeals - 02-10-00296-CV - 8/4/11

It was not possible to perform the contract ... is that a viable defense?

Impossibility of Performance as a defense: Will it fly in a court of law?

Subjective or objective impossibility? ... That is the question  

There are two general types of impossibility: (1) objective, and (2) subjective. Walston v. Anglo-Dutch Petroleum (Tenge) L.L.C., No. 14-07-00959-CV, 2009 WL 2176320, at *6 n.2 (Tex. App.—Houston [14th Dist.] July 23, 2009, no pet.) (mem. op.); Janak v. FDIC, 586 S.W.2d 902, 906–07 (Tex. Civ. App.—Houston [1st Dist.] 1979, no writ).

Objective impossibility relates solely to the nature of the promise. See Janak, 586 S.W.2d at 906–07. Something is objectively impossible if “the thing cannot be done,” such as an inability “to perform the promise to settle [a] claim by entering an agreed judgment in the lawsuit which had been dismissed” prior to the completion of the agreement. See Grayson v. Grayson Armature Large Motor Div., Inc., No. 14-09-00748-CV, 2010 WL 2361432, at *5 (Tex. App.—Houston [14th Dist.] June 15, 2010, pet. denied) (mem. op.).

Subjective impossibility is due wholly to the inability of the individual promisor. See id. Something is subjectively impossible if “I cannot do it,” such as when a promisor’s financial inability to pay makes it impossible for the promisor to perform. See id.

Objective impossibility can serve as a defense in a breach of contract suit. Janak, 586 S.W.2d at 906–07. However, a party cannot escape contract liability by claiming subjective impossibility; subjective impossibility neither prevents the formation of the contract nor discharges a duty created by a contract. See Grayson, 2010 WL 2361432, at *5; Walston, 2009 WL 2176320, at *6 n.2; Janak, 586 S.W.2d at 906–07.

SOURCE: Fort Worth Court of Appeals - 02-10-00296-CV - 8/4/11

Premises Liability Suit: Slip & Fall at Store - When is store owner liable for injuries sustained by customer?

PREMISES LIABILITY: SLIP & FALL INCIDENT AT STORE

What are the elements of a slip & fall premises liability claim?

To prevail on a premises liability suit, an invitee-plaintiff must prove: (1) a condition on the premises posed an unreasonable risk of harm; (2) the premises owner had actual or constructive knowledge of the danger; (3) the premises owner did not exercise reasonable care to reduce or eliminate the risk; and (4) the premises owner's failure to use such care proximately caused the plaintiff's injuries. See Wal-Mart Stores, Inc. v. Reece, 81 S.W.3d 812, 814 (Tex. 2002); Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998); Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992).

SOURCE: Dallas Court of Appeals - 05-09-01310-CV - 8/8/11

Car Wreck suits: What is negligent entrustment (of motor vehicle)?

ELEMENTS OF NEGLIGENT ENTRUSTMENT

What does it take to prove that a vehicle involved in a collision was negligently entrusted to the driver?

To establish negligent entrustment of an automobile, a plaintiff must show the following: (1) entrustment of a vehicle by the owner; (2) to an unlicensed, incompetent, or reckless driver; (3) whom the owner knew or should have known to be unlicensed, incompetent, or reckless; (4) the driver was negligent on the occasion in question; and (5) the driver's negligence proximately caused the accident. Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987).

Express permission is that which is affirmatively stated, while implied permission may be inferred from conduct between the parties in which there is acquiescence or lack of objection signifying consent which is shown by usage and practice of the parties over a period of time preceding the occasion on which the automobile was being used. Royal Indem. Co. v. H.E. Abbott & Sons, Inc., 399 S.W.2d 343, 345 (Tex. 1966).

SOURCE: Corpus Christi Court of Appeals - 13-10-00351-CV - 7/28/11  

Can home owner offer valid testimony on reasonable cost or value of repairs?

  
Testimony to support or challenge reasonble and necessary & costs of repair: Exception to the Property Owner Rule

Eastland Court of Appeals says property owners not qualified to opine on repair cost even if qualified to offer opinion on the value of the property itself under the property owner rule; Rule does not cover repairs; expert testimony it therefore required.    
A party seeking to recover damages measured by the cost of repair must present competent evidence so that the trier of fact is justified in finding that the repairs are necessary to restore the property to its former condition and that the cost of repairs is reasonable and fair. See Hernandez v. Lautensack, 201 S.W.3d 771, 776-77 (Tex. App.—Fort Worth 2006, pet. denied); Ebby Halliday Real Estate, Inc. v. Murnan, 916 S.W.2d 585, 589 (Tex. App.—Fort Worth 1996, writ denied); Liptak v. Pensabene, 736 S.W.2d 953, 958 (Tex. App.—Tyler 1987, no writ). The magic words “reasonable” and “necessary” need not be used as long as there is sufficient evidence for the trier of fact to conclude that the repairs are necessary and the cost is reasonable. Ron Craft Chevrolet, Inc. v. Davis, 836 S.W.2d 672, 677 (Tex. App.—El Paso 1992, writ denied); Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 694 (Tex. App.—Austin 1989, no writ).

Some courts have held that evidence pertaining to the necessity and reasonableness of repair costs falls within the exclusive domain of an expert. See Legacy Motors, LLC v. Bonham, No. 02-07-00065-CV, 2007 WL 2693863, at *4 (Tex. App.—Fort Worth Sept. 13, 2007, no pet.) (mem. op.); Ha v. W. Houston Infiniti, Inc., No. 01-94-00884-CV, 1995 WL 516993, at *2 (Tex. App.—Houston [1st Dist.] Aug. 31, 1995, writ denied) (op. on reh’g) (not designated for publication); see also Executive Taxi/Golden Cab v. Abdelillah, No. 05-03-01451-CV, 2004 WL 1663980, at *1 (Tex. App.—Dallas July 19, 2004, pet. denied) (mem. op.) (stating that an estimate without the testimony of the person making the estimate or other expert testimony is no evidence of the necessity of the repair or the reasonableness of the costs of the repair) (citing Jordan Ford, Inc. v. Alsbury, 625 S.W.2d 1, 3 (Tex. Civ. App.—San Antonio 1981, no writ)). As a general rule, matters involving specialized or technical knowledge require expert testimony. See FFE Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 90-91 (Tex. 2004). The necessity of subsequent, total roof replacements performed immediately after the work performed by and on behalf of Wortham Bros. and the reasonableness of the cost of the subsequent roof replacements are matters of a specialized and technical nature. Accordingly, we conclude that expert testimony was required to establish the necessity and reasonableness of the subsequent roof replacements.

We disagree with the trial court’s determination that the Haffners’ status as property owners qualifies them to offer an opinion on the necessity and reasonableness of repair costs. Under the “Property Owner Rule,” a property owner is generally qualified to testify as to the value of his or her property even if he or she is not an expert and would not be qualified to testify as to the value of other property. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex. 2011); see Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984). This rule is based on the presumption that an owner will be familiar with his or her own property and know its value. Reid Road Mun. Util. Dist. No. 2, 337 S.W.3d at 853. This presumption does not extend to the reasonable cost of repairing the owner’s property particularly when those repairs are of a technical or specialized nature.

SOURCE: Eastland Court of Appeals - 11-09-00190-CV - 7/28/11

We disagree with the trial court’s determination that the Haffners’ status as property owners qualifies them to offer an opinion on the necessity and reasonableness of repair costs. Under the “Property Owner Rule,” a property owner is generally qualified to testify as to the value of his or her property even if he or she is not an expert and would not be qualified to testify as to the value of other property. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337 S.W.3d 846, 852-53 (Tex. 2011); see Porras v. Craig, 675 S.W.2d 503, 504 (Tex. 1984). This rule is based on the presumption that an owner will be familiar with his or her own property and know its value. Reid Road Mun. Util. Dist. No. 2, 337 S.W.3d at 853. This presumption does not extend to the reasonable cost of repairing the owner’s property particularly when those repairs are of a technical or specialized nature.

Negligence 101: Was the Defendant under a legal duty?

DUTY AS AN ESSENTIAL ELEMENT OF A NEGLIGENCE CLAIM

What does it take to establish liability for negligence?

To prevail on a negligence cause of action, a plaintiff must prove (1) the existence of a legal duty, (2) breach of the duty, and (3) injury proximately caused by the defendant’s breach. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1991). Whether a duty exists is a question of law for the court to decide based on the facts surrounding the occurrence in question. Id.

Duty concerns not subjecting others to an unreasonable, foreseeable risk of harm. Tex. Home Mgmt., Inc. v. Peavy, 89 S.W.3d 30, 39 (Tex. 2002); Otis Eng’g Corp. v. Clark, 668 S.W.2d 307, 311 (Tex. 1984) (discussing unreasonable risk of harm as component of duty analysis); see also Keck, Mahin & Cate v. Nat. Union Fire Ins. Co., 20 S.W.3d 692, 702 (Tex. 2000) (noting contributory negligence is that which creates an unreasonable risk of harm to oneself). “As Dean Prosser has observed . . . [‘n]o better general statement can be made, than the courts will find a duty where, in general, reasonable men would recognize it and agree that it exists.’” Otis Eng’g Corp., 668 S.W.2d at 310. (quoting W. Prosser, The Law of Torts § 56 (4th ed. 1971)). A reviewing court balances several related factors to determine whether a defendant owed a plaintiff a duty, including the risk, foreseeability, and likelihood of injury weighed against the social utility of the defendant’s conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing the burden on the defendant. Phillips,

SOURCE: Corpus Christi Court of Appeals - 13-10-00355-CV - 7/28/11

Reasonableness of attorney's fee must be proven

Court of Appeals may overturn fee award even if authorized by statute when the fee claimant did not support the amount of the fees sought with proper evidence of reasonableness through her attorney.
   ATTORNEY FEE EVIDENCE: SHOWING OF REASONABLENESS REQUIRED 

As a prerequisite to the recovery of attorney’s fees for any underlying cause of action, the party seeking fees must prove the reasonableness of the fees. Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).

Reasonableness of fees must be supported by competent evidence. Peeples v. Peeples, 562 S.W.2d 503 (Tex.Civ.App.--San Antonio 1978, no writ). Here, there were no findings of fact entered to support the award of attorney's fees and costs. We must therefore presume the trial court made all findings necessary to support its order. Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).

Factors considered by the court when determining the amount of reasonable fees include: (1) the time and labor required, novelty and difficulty of the question presented, and the skill required; (2) the likelihood that acceptance of employment precluded other employment; (3) the fee customarily charged for similar services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer performing the services; and (8) whether the fee is fixed or contingent. Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).

[Attorney in this case] did not testify, nor did she present an affidavit, itemized statements, exhibits, or any other offer of proof as to the reasonableness of her fees. The record is devoid of evidence relating to her experience, the time and labor involved, the difficulty of the task, her hourly rates, rates customarily charged for similar services, or her fee agreement with [ client ]. While a party need not offer proof of all the factors above, [ attorney ] did not offer proof under any of them. She referenced a “case ledger” presumably detailing her time spent preparing the motions and fees incurred. But it was not offered as an exhibit, was not introduced into evidence and does not appear in the record. We have only her request for fees of $518.10.

Under these facts, we are not persuaded [ party clainming fees ] provided more than a scintilla of evidence as to the reasonableness of the amount of fees requested. Finding legally insufficient evidence to support the award, we must conclude that the trial court abused its discretion. We sustain Issue Seven and reverse and render that [ fee claimant ] take nothing.

SOURCE: El Paso Court of Appeals - 08-10-00149-CV - 7/29/11

Waiver of contractual right to arbitrate under the Supremes' wholistic Perry-Cull standard

 
What is the test for waiver of the right to arbitrate? Under Texas Supreme Court precedent, it's anything but clear, but the standard is pretty high. Courts of appeals will continue to make their own calls in light of the kitchen-sink "totality of the circumstances" standard that allows for consideration of just about any arguably relevant factor to either compel or deny arbitration. See Perry Homes vs. Cull (Tex. 2008)
  
WHEN and HOW is the RIGHT TO ARBITRATE waived?
  
“Waiver is a question of law that this Court reviews de novo.” Small v. Specialty Contractors, Inc., 310 S.W.3d 639, 644 (Tex. App.-Dallas 2010, no pet.). “[A] party waives an arbitration clause by substantially invoking the judicial process to the other party's detriment or prejudice.” Perry Homes v. Cull, 258 S.W.3d 580, 589 (Tex. 2008). “Due to the strong presumption against waiver of arbitration, this hurdle is a high one.” Id. To decide whether a party substantially invoked the judicial process, we look to the “totality of the circumstances.” Id. at 591. In reviewing the totality of the circumstances, we consider “factors such as when the movant knew of the arbitration clause; how much discovery has been conducted; who initiated it; whether it related to the merits rather than arbitrability or standing; how much of it would be useful in arbitration; and whether the movant sought judgment on the merits.” Id. at 591-92. “[W]aiver can be implied from a party's conduct, although that conduct must be unequivocal.” Id. at 593. In close cases, the “strong presumption against waiver” should govern. Id. “Even substantially invoking the judicial process does not waive a party's arbitration rights unless the opposing party proves that it suffered prejudice as a result.” Id. at 594. Prejudice is defined as “the inherent unfairness in terms of delay, expense, or damage to a party's legal position that occurs when the party's opponent forces it to litigate an issue and later seeks to arbitrate that same issue.” Id. at 597.

The court in Perry Homes deemed the following acts, standing alone, insufficient to amount to waiver: filing suit; requesting initial discovery; noticing, but not taking a deposition; and taking four depositions. Perry Homes, 258 S.W.3d at 590; see also Small, 310 S.W.3d at 645. On the other hand, the Texas Supreme Court stated in another case that the combined acts of conducting full discovery, filing motions going to the merits, and seeking arbitration “only on the eve of trial” would constitute substantially invoking the judicial process. Perry Homes, 258 S.W.3d at 590 (citing In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 764 (Tex. 2006)). Because this case does not fit squarely into the circumstances described in either of those cases, we “must review relevant factors in the context of the totality of the circumstances.” Small, 310 S.W.3d at 645 (citing Perry Homes, 258 S.W.3d at 591-92).

SOURCE: Dallas Court of Appeals - 05-11-00115-CV - 8/2/11

First, we look at “when the movant knew of the arbitration clause.” Id. at 645 n.2, 646.

Civil Death Penalty Sanctions in Texas [striking of pleadings & dismissal for bad litigation conduct]

   
Texas is famous (or infamous, depending on viewpoint) for the use of the death penalty. But the term is also used in civil litigation -- to refer to sanctions that essentially terminate a lawsuit or -- as in the case from which the snippets below are taken -- strike a counterclaim. That's also why there is "death-penalty case law" from the Texas Supreme Court, even though that court does not hear appeals in criminal cases, much less capital cases.    

DEATH PENALTY SANCTIONS: When are they proper; when not?

Standard of Review on Appeal

A trial court’s sanctions order under Texas Rule of Civil Procedure 215.2(b) is reviewed for abuse of discretion. Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). The test for an abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action, but whether the court acted without reference to any guiding rules or legal principles. Cire, 134 S.W.3d at 838; K-Mart Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000). The trial court’s discretion in imposing sanctions is limited by the standards set out in the applicable Rules of Civil Procedure and TransAmerican Natural Gas Corp. v. Powell, 811 S.W. 2d 913 (Tex. 1991).

Basis for imposition of discovery sanctions

Rule 215.2 of the Texas Rules of Civil Procedure authorizes a trial court to sanction a party for failure to comply with a discovery order or request. Tex.R.Civ.P. 215.2. A list of possible sanctions is found in Rule 215.2(b). Pertinent to this case, an order striking pleadings is one of the sanctions available to the court. Tex.R.Civ.P. 215.2(b)(5). The Texas Supreme Court defines “death penalty sanctions” as “sanctions that terminate a party’s right to present the merits of its claims.” State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 647 (Tex. 2001). Such sanctions include striking a party’s pleadings, dismissing its action, or rendering a default judgment against a party for abusing the discovery process. Id. Death penalty sanctions must be reserved for circumstances in which a party has so abused the rules of procedure, despite imposition of lesser sanctions, that the party’s position can be presumed to lack merit and it would be unjust to permit the party to present the substance of that position before the court. TransAmerican, 811 S.W.2d at 918.

The proportionality criterion   

A trial court may not impose sanctions that are more severe than necessary to satisfy legitimate purposes. Cire, 134 S.W.3d at 839. Further, Rule 215.2(b) explicitly requires that any sanction under this rule be “just.” Tex.R.Civ.P. 215.2(b). The Supreme Court’s decision in TransAmerican set out a two-part test for determining whether a particular sanction is just. Spohn Hospital v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003); TransAmerican, 811 S.W.2d at 917.

First, there must be a direct relationship between the offensive conduct and the sanction imposed. TransAmerican, 811 S.W.2d at 917. A just sanction must be directed against the abuse and toward remedying the prejudice caused to the innocent party, and the sanction should be visited upon the offender. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The trial court should make some attempt to determine whether fault for discovery abuse lies with the party, its counsel, or both. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917.

Second, just sanctions must not be excessive. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. In assessing the second standard, the sanction should be no more severe than necessary to satisfy its legitimate purposes, which include securing compliance with discovery rules, deterring other litigants from similar misconduct, and punishing violators. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. The court must consider less stringent sanctions and whether such lesser sanctions will fully promote compliance, deterrence, and discourage further abuse. Spohn Hospital, 104 S.W.3d at 882; TransAmerican, 811 S.W.2d at 917. Death penalty sanctions may be imposed in exceptional cases where they are clearly justified and it is apparent that no lesser sanctions would promote compliance with the rules. Spohn Hospital, 104 S.W.3d at 882.

Discovery sanctions that are so severe as to inhibit presentation of the merits of the case should be reserved to address a party’s flagrant bad faith or counsel’s callous disregard for the responsibilities of discovery under the rules. Spohn Hospital, 104 S.W.3d at 883.

SOURCE: El Paso Court of Appeals - 08-09-00239-CV - 7/29/11

MSJ involving a contract: Unambiguous vs. ambiguous contracts

Whether enforcement of contract terms via summary judgment is appropriate depends on whether the contract is unambiguous or ambiguous, and whether consequently it can be construed as a matter of law.

PRINCIPLES OF CONTRACT INTERPRETATION: 

Contract construction as a question of law vs. resolution of fact issues with the aid of extrinsic evidence by the fact finder   

The interpretation of an unambiguous contract is a question of law, which we review de novo. See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650-51 (Tex. 1999). When the parties disagree over the meaning of an unambiguous contract, the court must determine the parties' intent by examining and considering the entire writing in an effort to give effect to the parties' intentions as expressed in the contract. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); Nicol v. Gonzales, 127 S.W.3d 390, 394 (Tex. App.-Dallas 2004, no pet.).

The parties' intent must be taken from the agreement itself, and the agreement must be enforced as written. Wells Fargo Bank, Minn., N.A. v. N. Cent. Plaza I, L.L.P., 194 S.W.3d 723, 726 (Tex. App.-Dallas 2006, pet. denied); Nicol, 127 S.W.3d at 394; see also Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (only where contract is first determined to be ambiguous may courts consider parties' interpretation or admit extraneous evidence to determine true meaning of instrument). Further, under the “Four Corners Rule,” the parties' intent must be “ascertained from the instrument as a whole and not from isolated parts thereof.” Calpine Producer Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex. App.-Dallas 2005, no pet.).

All writings that pertain to the same transaction will be considered together, even if they were executed at different times. DeWitt Cnty. Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999). Unless the agreement shows that the parties used a term in a technical or different sense, we give the terms their plain, ordinary, and generally accepted meaning. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). “Courts will not declare a forfeiture unless they are compelled to do so by language which can be construed in no other way.” Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987).

When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue. See Harris v. Rowe, 593 S.W.2d 303, 306 (Tex. 1979). If a written instrument is so worded that it can be given “a certain or definite legal meaning or interpretation,” then it is not ambiguous. Coker, 650 S.W.2d at 394. “A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation.” Las Colinas Obstetrics-Gynecology-Infertility Ass'n, P.A. v. Villalba, 324 S.W.3d 634, 640 (Tex. App.-Dallas 2010, no pet.); accord Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). A disagreement over the meaning of a contract provision does not render the provision ambiguous. See Nicol, 127 S.W.3d at 394. The question of whether a contract is ambiguous is a question of law, which is reviewed de novo. See MCI Telecomms. Corp., 995 S.W.2d at 650.

SOURCE: Dallas Court of Appeals - 05-09-00962-CV - 8/2/11

An appellate court reviews a trial court’s construction of an unambiguous contract de novo. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). In performing a de novo review, we exercise our own judgment and redetermine each legal issue. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1999). When construing a written contract, courts ascertain the intent of the parties as expressed in the instrument. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). Courts examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). If there is no ambiguity in the instrument, its construction is a question of law for the court. See id. Interpretation of a contract becomes a fact issue, to be resolved by extrinsic evidence, only when application of pertinent rules of construction leaves a genuine uncertainty as to which of two meanings is proper. Id. at 393-94.

SOURCE: Tyler Court of Appeals - 12-10-00342-CV - 7/29/11

What is an indemnity agreement?

INDEMNITY DEFINED

Legally speaking: What is indemnity all about?

“An indemnity agreement is a promise to safeguard or hold the indemnitee harmless against either existing and/or future loss liability” and provides the indemnitee with a cause of action to recover against the indemnitor. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993).

Most contract provisions involve a certain degree of risk-shifting, but some provisions involve such an “extraordinary shifting of risk” that courts impose additional fair notice requirements to make the provision enforceable. Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 387 (Tex. 1997); Dresser, 853 S.W.2d at 508; Amtech Elevator Serv. Co. v. CSFB 1998-P1 Buffalo Speedway Office Ltd., 248 S.W.3d 373, 377 (Tex. App.—Houston [1st Dist.] 2007, no pet.).

The fair notice requirements are (1) the express negligence doctrine and (2) the conspicuousness requirement. Amtech Elevator Serv., 248 S.W.3d at 377.

Express negligence doctrine

The express negligence doctrine dictates that a party’s intent to be released or indemnified from its own future negligence must be clear and unambiguous. Green Int’l, 951 S.W.2d at 386.

Conspicuousness requirement

The conspicuousness requirement means that “something must appear on the face of the [contract] to attract the attention of a reasonable person.” Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004) (quoting Dresser, 853 S.W.2d at 508)).

The fair notice requirements apply when “one party exculpates itself from its own future negligence.” Green Int’l, 951 S.W.2d at 387; DDD Energy, Inc. v. Veritas DGC Land, Inc., 60 S.W.3d 880, 885 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (holding fair notice does not apply “where an indemnitee is seeking indemnification from claims not based on the negligence of the indemnitee.”). In DDD Energy Inc., the indemnity clause required each contracting party to indemnify the other for its individual negligence resulting from claims by a third party. DDD Energy, 60 S.W.3d at 884. Nothing in the indemnity clause shifted responsibility for DDD Energy’s negligence onto the other contracting party. Id. The court of appeals affirmed summary judgment and held that the fair notice requirements identified in Dresser are limited to claims for indemnity based on the indemnitee’s own negligence. Id. at 885. See also English v. BGP Int’l, Inc., 174 S.W.3d 366, 375 (Tex. App.—Houston [14th Dist.] 2005, no pet.).


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

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

A rear-ender accident: Whose fault? What kind'a lawsuit?

Got hit from behind - Got a lawsuit against the other driver, right? - Not so fast ...

Sounding a cautionary note, Houston Court of Appeals explains:

The mere occurrence of a rear-end collision is not of itself evidence of negligence as a matter of law. See, e.g., Benavente v. Granger, 312 S.W.3d 745, 749 (Tex. App.—Houston [1st Dist.] 2009, no pet.); Neese v. Dietz, 845 S.W.2d 311, 314 (Tex. App.—Houston [1st Dist.] 1992, writ denied).

The plaintiff must prove specific acts of negligence on the part of the defendant driver and must prove proximate cause. Neese, 845 S.W.2d at 314. With regard to rear-end collisions, “standards of ordinary care cannot be fixed with any degree of certainty but must be left in large measure to the trier of the facts.” Id. Conflicts in the witnesses’ testimony present credibility questions for the jury to resolve. Id. at 314–15.

SOURCE: Houston Court of Appeals - 01-10-00473-CV - 7/28/11 

[ Plaintiff-Driver-in-front ] contends that the "undisputed evidence was that at the time of the accident [he] was lawfully stopped with his left turn signal blinking and brake lights on waiting for traffic to clear." Relying, in part, on section 545.062 of the Transportation Code, he argues that the evidence of Nguyen’s negligence was conclusive because she rear-ended his vehicle and admitted to being 100% at fault. Section 545.062(a) provides:


TEX. TRANSP. CODE ANN. § 545.062(a) (West 2011).

But [ Defendant-Driver-behind ] did not admit fault, and there was disputed evidence suggesting [ Plaintiff-Driver-in-front ]’s negligence. [ Plaintiff-Driver-in-front ] testified that he had been completely stopped for approximately 60 seconds before Nguyen’s vehicle collided with his, but[ Defendant-Driver-behind ]testified otherwise, stating that [ Plaintiff-Driver-in-front ] stopped suddenly and without warning. She stated that she saw [ Plaintiff-Driver-in-front ]’s brake lights come on when he made a sudden stop, and that she applied her brakes, but she was unable to avoid colliding with [ Plaintiff-Driver-in-front ]’s vehicle.

[ Plaintiff-Driver-in-front ] also testified that he was making a left turn into an apartment complex. He testified that he was leaning to the right, talking to a pedestrian through the passenger-side window, and trying to find a pen in his center console. [ Defendant-Driver-behind ]recalled seeing the pedestrian to her right and stated that [ Plaintiff-Driver-in-front ]’s vehicle had passed the entry for the apartment complex and was at the intersection. She testified that [ Plaintiff-Driver-in-front ]’s vehicle was "pulled to the right" and that he was not positioned to make a left turn. She also testified that the left-rear side of [ Plaintiff-Driver-in-front ]’s bumper was damaged, as opposed to the center or right-rear side, in the collision.

The jury could have concluded based upon [ Plaintiff-Driver-in-front ]’s and Nguyen’s testimony that [ Plaintiff-Driver-in-front ] stopped suddenly or that he was distracted by a conversation with a pedestrian. The jury is the sole judge of the credibility of the witnesses and the weight accorded to their testimony. City of Keller, 168 S.W.3d at 819. When viewed in the light most favorable to the jury’s finding, the evidence raises an issue as to whether [ Plaintiff-Driver-in-front ] acted negligently. See McDonald v. Dankworth, 212 S.W.3d 336, 340–45 (Tex. App.—Austin 2006, no pet.). Therefore, we hold that the evidence was legally sufficient to support the jury’s finding that [ Plaintiff-Driver-in-front ] was negligent and that his negligence was a proximate cause of the collision.

With respect to apportionment of fault, the jury is given wide latitude in determining the negligent parties’ proportionate responsibility. Hagins v. E-Z Mart Stores, Inc., 128 S.W.3d 383, 392 (Tex. App.—Texarkana 2004, no pet); Rosell v. Cent. W. Motor Stages, Inc., 89 S.W.3d 643, 659–60 (Tex. App.—Dallas 2002, pet. denied.). As with our review of the sufficiency of the evidence to support the negligence finding, we consider the evidence in the light most favorable to the finding under review and indulge every reasonable inference that would support it. City of Keller, 168 S.W.3d at 822. If the evidence is sufficient to support the jury’s negligence finding, the Court may not substitute its judgment for that of the jury, even if the evidence could support a different percentage allocation. Rosell, 89 S.W.3d at 659–60; Samco Props., Inc. v. Cheatham, 977 S.W.2d 469, 478 (Tex. App.—Houston [14th Dist.] 1998, pet. denied). Having found sufficient evidence that both [ Plaintiff-Driver-in-front ] and[ Defendant-Driver-behind ]were at fault, we find no basis for interfering with the jury’s assignment of 40% responsibility to [ Plaintiff-Driver-in-front ].

SOURCE: Houston Court of Appeals - 01-10-00473-CV - 7/28/11

An operator shall, if following another vehicle, maintain an assured clear distance between the two vehicles so that, considering the speed of the vehicles, traffic, and the conditions of the highway, the operator can safely stop without colliding with the preceding vehicle or veering into another vehicle, object, or person on or near the highway.

TRCP 91 - Failure to state viable cause of action is properly raised with special exceptions under Rule 91

Special exceptions under TRCP 91 are the procedural vehicle to challenge deficiencies in the opponent's pleadings, but may also be used to assert that the Plaintiff has not pleaded a valid cause of action at all. Trial court must generally provide an opportunity to amend upon sustaining special exceptions, at least when it would not be obviously futile. 
   
SPECIAL EXCEPTIONS PROCEDURE UNDER THE TEXAS RULES OF PROCEDURE
　
A party is generally required to file a special exception to challenge a defective pleading. Connolly v. Gasmire, 257 S.W.3d 831, 839 (Tex. App.—Dallas 2008, no pet.); see also TEX. R. CIV. P. 90 (providing that "[g]eneral demurrers shall not be used" and that any "defect, omission or fault in a pleading" is waived if not presented in writing to trial court prior to instruction or charge to the jury or, in non-jury case, prior to trial court signing the judgment). Texas Rule of Civil Procedure 91 provides:


A special exception shall not only point out the particular pleading excepted to, but it shall also point out intelligibly and with particularity the defect, omission, obscurity, duplicity, generality, or other insufficiency in the allegations in the pleading excepted to.TEX. R. CIV. P. 91. 

The purpose of special exceptions is to furnish a party with a medium to force clarification of an adverse party’s pleadings when they are not clear or sufficiently specific. Connolly, 257 S.W.3d at 839.

Special exceptions may also be used to determine whether the plaintiff has stated a cause of action permitted by law. Mowbray v. Avery, 76 S.W.3d 663, 677 (Tex. App.—Corpus Christi 2002, pet. denied) (citing TEX. R. CIV. P. 91).

Standard of review of ruling on special exceptions

When reviewing a trial court’s dismissal of a cause of action following the sustaining of special exceptions, we review the propriety of both the trial court’s decision to sustain the special exceptions and the trial court’s order of dismissal. Perry v. Cohen, 285 S.W.3d 137, 142 (Tex. App.—Austin 2009, pet. denied) (citing Cole v. Hall, 864 S.W.2d 563, 566 (Tex. App.—Dallas 1993, writ dism’d w.o.j.) (en banc)).

We review the pleadings to determine whether the trial court abused its discretion in granting special exceptions. Id. (citing Cole, 864 S.W.2d at 566 and Muecke v. Hallstead, 25 S.W.3d 221, 224 (Tex. App.—San Antonio 2000, no pet.)). The trial court has broad discretion in granting special exceptions to order more definite pleadings as a particular case may require. Id. (citing Burgess v. El Paso Cancer Treatment Ctr., 881 S.W.2d 552, 554 (Tex. App.—El Paso 1994, writ denied)). A trial court abuses its discretion when it acts without reference to any guiding rules or principles. Id. (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)). When reviewing the trial court’s decision on special exceptions, we accept as true all the material factual allegations and statements reasonably inferred from the allegations set forth in the pleadings. Id. (citing Sorokolit v. Rhodes, 889 S.W.2d 239, 240 (Tex. 1994)).

If we determine that the trial court’s decision to grant the special exceptions was proper, we then review whether the decision to dismiss was appropriate. Connolly, 257 S.W.3d at 838 (citing Cole, 864 S.W.2d at 566).

Special exceptions must be specific 

Rule 91 requires that special exceptions "point out intelligibly and with particularity" the alleged defect or omission in the pleadings. TEX. R. CIV. P. 91. If special exceptions lack specificity in pointing out how the plaintiff’s allegations are faulty, they constitute a general demurrer, and general demurrers are prohibited by the Rules of Civil Procedure. See TEX. R. CIV. P. 90; see also Castano v. San Felipe Ag. Mfg. & Irrigation Co., 147 S.W.3d 444, 453 (Tex. App.—San Antonio 2004, no pet.) (holding that special exceptions failed "to state with specificity the elements lacking in [plaintiff’s] petition" and thus was general demurrer prohibited under rules and that grant of those special exceptions "would . . . permit the [defendants] to circumvent the protective features of the special exception procedure").

SOURCE: Houston Court of Appeals - 01-10-00412-CV - 7/28/11

Mere nonperformance ("nonfeasance") of contractual obligation not a tort

CAN A BREACH OF CONTRACT ALSO BE A TORT?

“Although a party’s actions may breach duties in tort, contract, or both, Texas jurisprudence has long recognized that ‘mere nonfeasance under a contract creates liability only for breach of contract.’” Esty v. Beal Bank S.S.B., 298 S.W.3d 280, 301 (Tex. App.—Dallas 2009, no pet.) (quoting Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 13 (Tex. 1996)).

Economic Loss rule

Generally, tort damages are not recoverable unless the plaintiff suffered an injury that is independent and separate from the economic losses recoverable under a breach of contract claim. Id. (citing Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 45–47 (Tex. 1998)).

SOURCE: Houston Court of Appeals - 01-10-00412-CV - 7/28/11
(Duties all ran from the official Loan Documents. Because the Plaintiffs did not plead any fraud in the inducement of those documents, they did not allege an independent tort. See Formosa Plastics, 960 S.W.2d at 47. Trial court did not err in sustaining Defendant's special exceptions.)