When does a claim or appeal become moot?

Release can operate as an affirmative defense, but sometimes the invocation of mootness can even be more effective to quickly terminate a pending case or appeal. 

WHEN DOES THE MOOTNESS DOCTRINE KICK IN?

A case becomes moot when: (1) it appears that a party seeks to obtain a judgment upon some controversy, when in reality none exists; or (2) a party seeks a judgment upon some matter, which cannot have any practical legal effect upon a then existing controversy. Camarena v. Tex. Employment Comm'n, 754 S.W.2d 149, 151 (Tex. 1988); Robinson v. Alief Indep. Sch. Dist., 298 S.W.3d 321, 324 (Tex. App.-Houston [14th Dist.] 2009, pet. denied).

EFFECT OF UNCONDITIONAL RELEASE OF JUDGMENT 

"An unconditional release of judgment operates as a total relinquishment of all rights of the judgment creditor in the judgment. It is a complete discharge of the debt created by the judgment and a complete surrender of the judgment creditor's rights in the judgment." Rapp v. Mandell & Wright, P.C., 123 S.W.3d 431, 435 (Tex. App.-Houston [14th Dist.] 2003, pet. denied).

SOURCE:  HOUSTON COURT OF APPEALS - 14-13-00467-CV - 1/9/2014

NATURE OF MOOTNESS DOCTRINE AND EFFECT ON PENDING APPEAL 

The mootness doctrine limits courts to deciding cases in which an actual controversy exists. Ex parte Flores, 130 S.W.3d 100, 104-05 (Tex. App.-El Paso 2003, pet. ref'd). When there has ceased to be a controversy between the litigating parties, which is due to events occurring after judgment has been rendered by the trial court, the decision of an appellate court would be a mere academic exercise and the court may not decide the appeal. Id. A case that is moot is normally not justiciable. Pharris v. State, 165 S.W.3d 681, 687-88 (Tex. Crim. App. 2005).

EXCEPTION 

One of the exceptions to the general rule is when a claim is "capable of repetition, yet evading review." The United States Supreme Court has said that "the `capable of repetition but evading review' doctrine [is] limited to the situation where two elements combine: (1) the challenged action was in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there was a reasonable expectation that the same complaining party would be subjected to the same action again." Weinstein v. Bradford, 423 U.S. 147, 149 (1975). The Texas Court of Criminal Appeals has adopted and applied this doctrine. See Pharris, 165 S.W.3d at 688.

SOURCE: HOUSTON COURT OF APPEALS FOR THE FOURTEENTH DISTRICT - 14-13-00647-CR - 2/6/2014 EX PARTE BRADSHAW, Tex: Court of Appeals, 14th Dist. 2014 (criminal case context)

Foreclosure under Deed of Trust (DoT) vs lawsuit to enforce the Promissory Note: Is there a difference, and if so, what's difference?

Foreclosure of mortgaged property under a deed of trust and suit to enforce note to obtain money judgment against borrower are separate and distinct creditor remedies 

WHAT IS THE RELATIONSHIP BETWEEN FORECLOSURE AND SUIT ON PROMISSORY NOTE? 

A lien creditor may pursue foreclosure of a lien against real property under the deed of trust independent of whether the creditor pursues personal action against the borrower to collect under the note. See Stephens v. LPP Mortg., Ltd., 316 S.W.3d 742, 747 (Tex. App.-Austin 2010, pet. denied). As a federal district court applying Texas law has explained:

Texas law differentiates between enforcement of a promissory note and foreclosure. Foreclosure is an independent action against the collateral and may be conducted without judicial supervision. Enforcement of the note, on the other hand, is a personal action against the signatory and requires a judicial proceeding (citations omitted).

Reardean v. CitiMortgage, Inc., No. A-11-CA-420-SS, 2011 WL 3268307, at *3 (W.D. Tex. July 25, 2011). Because Wells Fargo was the mortgagee by statute, it was entitled to enforce the deed of trust and, thus, begin nonjudicial foreclosure proceedings. Farkas's second and third issues are overruled. Because Wells Fargo was authorized to enforce the deed of trust, we need not address the fourth issue: whether Wells Fargo was entitled to enforce the note. Similarly, for the same reason, we need not address Farkas's first issue regarding the servicing rights to the loan under the note.

SOURCE: ELEVENTH COURT OF APPEALS IN EASTLAND, TEXAS - 11-12-00024-CV - 1/9/2014

ROLE OF MERS IN REAL ESTATE FINANCE AND SECONDARY MORTGAGE MARKET EXPLAINED 

A federal judicial panel on multidistrict litigation gave the following explanation of how the MERS system purportedly operates:

When a home is purchased, the lender obtains from the borrower a promissory note and a mortgage instrument naming MERS as the mortgagee (as nominee for the lender and its successors and assigns). In the mortgage, the borrower assigns his right, title, and interest in the property to MERS, and the mortgage instrument is then recorded in the local land records with MERS as the named mortgagee. When the promissory note is sold (and possibly re-sold) in the secondary mortgage market, the MERS database tracks that transfer. As long as the parties involved in the sale are MERS members, MERS remains the mortgagee of record (thereby avoiding recording and other transfer fees that are otherwise associated with the sale) and continues to act as an agent for the new owner of the promissory note.

In re Mortg. Elec. Registration Sys. (MERS) Litig., 659 F. Supp. 2d 1368, 1370 n.6 (J.P.M.L. 2009).

DEED OF TRUST AND STATUS OF MORTGAGEE 

If Wells Fargo was the mortgagee, then it was entitled to exercise the powers that Farkas granted in the deed of trust. The Property Code authorizes a mortgagee to sell real property under a "power of sale conferred by a deed of trust." PROP. § 51.002. The statutory definition of a mortgagee includes: (1) the grantee, beneficiary, owner, or holder of a security instrument; (2) a book entry system, which acts as a nominee for the grantee, beneficiary, owner, or holder of a security instrument and its successors and assigns; and (3) the last person to whom the security interest has been assigned of record. See id. § 51.0001(1), (4).

Here, the summary judgment evidence shows that Wells Fargo was the last person to whom the instrument had been assigned. According to the terms of the deed of trust, MERS was the beneficiary and the nominee for the lender (Jefferson Mortgage Services) and its successors and assignees. Thus, MERS was a mortgagee as defined in the Property Code. When MERS executed the assignment to Wells Fargo Bank, N.A. on December 1, 2009, Wells Fargo obtained all of MERS's rights and interest in the deed of trust (originating from the lender, Jefferson Mortgage Services), including the "right to foreclose and sell the Property." See Athey v. Mortg. Elec. Registration Sys., Inc., 314 S.W.3d 161, 166 (Tex. App.-Eastland 2010, pet. denied).

Farkas contends that Wells Fargo is not the mortgagee because "[t]he purported assignment of the Deed of Trust is ineffective to transfer the security interest to Wells Fargo as a matter of law" because "Wells Fargo does not hold the subject debt." Essentially, Farkas argues that Wells Fargo was not the holder of the note and, thus, could not exercise the powers granted by him under the deed of trust. Farkas seems to conflate the foreclosure with enforcing the note against the borrower.

SOURCE:  EASTLAND COURT OF APPEALS - 11-12-00024-CV - 1/9/2014

EXCERPT FROM RECENT FEDERAL DISTRICT COURT IN TEXAS OPINION / ORDER

Texas law differentiates between enforcement of a promissory note and a deed of trust. "Where there is a debt secured by a note, which is, in turn, secured by a lien, the lien and the note constitute separate obligations." Aguero v. Ramirez, 70 S.W.3d 372, 374 (Tex. App. 2002). Thus, the right to recover on the promissory note and the right to foreclose may be enforced separately. See Stephens v. LPP Mortg., 316 S.W.3d 742, 747 (Tex. App. 2010) (finding that the promissory note and the lien which secures it are "separate legal obligations" that "may be litigated in separate lawsuits"); Carter v. Gray, 125 Tex. 219, 81 S.W.2d 647, 648 (Tex. 1935) ("It is so well settled as not to be controverted that the right to recover a personal judgment for a debt secured by a lien on land and the right to have a foreclosure of lien are severable, and a plaintiff may elect to seek a personal judgment without foreclosing the lien, and even without a waiver of the lien.").
 
Foreclosure is an independent action against the collateral and may be conducted without judicial supervision. Bierwirth v. BAC Home Loans Servicing, L.P., No. 03-11-00644-CV, 2012 WL 3793190, at *4 (Tex. App. Aug. 30, 2012) (citing Reardean v. CitiMortgage, Inc., No. A-11-CA-420, 2011 WL 3268307, at *3 (W.D. Tex. July 25, 2011)). Enforcement of the promissory note, on the other hand, is a personal action against the signatory and requires a judicial proceeding. Id.

Chapter 51 of the Texas Property Code, which governs non-judicial foreclosures, authorizes either a mortgagee or a mortgage servicer acting on behalf of a mortgagee to sell real property under a "power of sale conferred by a deed of trust." See Tex. Prop. Code. §§ 51.002, 51.0025. The Property Code defines a "mortgagee" as "(A) the grantee, beneficiary, owner, or holder of a security instrument; (B) a book entry system;[3] or (C) if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record." Tex. Prop. Code § 51.0001(4). Under Texas law, therefore, Defendant need not hold the Note in order to foreclose; it need only have the right to foreclose under the Deed of Trust.

SOURCE: Rodriguez v. Bank of America, NA, Dist. Court, WD Texas 2013 United States District Court, W.D. Texas, San Antonio Division. April 25, 2013.

LEGAL VS EQUITABLE TITLE IN RELATION TO MORTGAGED PROPERTY 

 "When a mortgagor executes a deed of trust the legal and equitable estates in the property are severed. The mortgagor retains the legal title and the mortgagee holds the equitable title. Texas has always followed this lien theory of mortgages." Green v. McKay, 376 S.W.3d 891, 899 n.9 (Tex. App.-Dallas 2012, pet. denied) (quoting Flag-Redfern Oil v. Humble Exploration Co., 744 S.W.2d 6, 8 (Tex. 1987)).

See Lighthouse Church of Cloverleaf v. Tex. Bank, 889 S.W.2d 595, 603 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (stating that "[f]oreclosure transfers title from the debtor to another party").

How do courts interpret contracts in Texas?

CONTRACT CONSTRUCTION IN TEXAS: 

Basic Principles 

“[A] court interprets a contract by ascertaining the true objective intentions of the parties, based on the contract language.” SAS Inst., Inc. v. Breitenfeld, 167 S.W.3d 840, 841 (Tex. 2005) (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)). A court construes written instruments as a whole in an effort to harmonize and give effect to all the provisions of the instrument so that none will be rendered meaningless. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Shell Oil Co. v. Khan, 138 S.W.3d 288, 292 (Tex. 2004). Contract terms are given their “plain, ordinary, and generally accepted meanings unless the contract itself shows them to be used in a technical or different sense.” Dorsett, 164 S.W.3d at 662. If a contract is capable of more than one reasonable interpretation, it is ambiguous; if, however, the contract can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and we will construe it as a matter of law. Coker, 650 S.W.2d at 393; Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 131 (Tex. App.—Houston [14th Dist.] 2000, pet. dism’d). 

SOURCE: Houston Court of Appeals 01-10-00141-CV 5/12/12
 LEGAL TERMS: contract construction (interpretation) of contractual provisions, terms of agreement

To be enforceable, contract requires agreement on material terms

ESSENTIAL MATERIAL TERMS MUST BE SPECIFIED FOR CONTRACT TO BE ENFORCEABLE - RIGHTS AND OBLIGATIONS OF PARTIES MUST BE CLEARLY DEFINED FOR COURT TO ENFORCE CONTRACT
  

To be enforceable, a contract must be sufficiently definite in its terms that a court can understand what the promisor undertook. T. O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The material terms of the contract must be agreed on before a court can enforce it. Id.

If an alleged agreement is so indefinite as to make it impossible for a court to fix the legal obligations and liabilities of the parties, it cannot constitute an enforceable contract. University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex. App.--San Antonio 1989, no writ).

A lack of definiteness in an agreement may concern various elements, including time of performance, price to be paid, work to be done, or service to be done. Gannon v. Baker, 830 S.W.2d 706, 709 (Tex. App.--Houston [1st Dist.] 1992, writ denied); Terrell v. Nelson Puett Mortgage Co., 511 S.W.2d 366, 369 (Tex. Civ. App.--Austin 1974, writ ref'd n.r.e.).

Whether an agreement has all the essential terms to be an enforceable agreement is a question of law. See America's Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 625 (Tex. App.--San Antonio 1996, writ denied). Each contract should be considered separately to determine its material terms. See T. O. Stanley Boot Co., 847 S.W.2d at 221 (citing Bridewell v. Pritchett, 562 S.W.2d 956, 958 (Tex. Civ. App.--Fort Worth 1978, writ ref'd n.r.e.)).

AGREEMENT TO AGREE [on unspecified contract terms yet to be determined] NOT ENFORCEABLE

To be enforceable, an agreement to enter into a future contract must specify all its material and essential terms, leaving none to be agreed on as the result of future negotiations. See Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 135 (Tex. App.--Waco 2005, pet. denied) (citing Parker Chiropractic Research Found. v. Fairmont Dallas Hotel Co., 500 S.W.2d 196, 201 (Tex. Civ. App.--Dallas 1973, no writ)). When an essential term is left open for future negotiation, the parties have nothing more than an unenforceable "agreement to agree." See Oakrock Exploration Co. v. Killam, 87 S.W.3d 685, 690 (Tex. App.--San Antonio 2002, pet. denied).

SOURCE: Austin Court of Appeals - 03-10-00656-CV - 5/11/11

Tortious interference with prospective business relations - Elements of this biz tort under Texas law

INTERFERENCE WITH EXPECTED BUSINESS AS A TORT 

Texas has long recognized the tort of interference with prospective business relations. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 712-13 (Tex. 2001).

 

Although the Texas Supreme Court has never set forth the elements for this claim, see Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 78 (Tex. 2000), several appellate courts have. See, e.g., Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 367 (Tex. App.-Dallas 2009, pet. denied); Labor v. Warren, 268 S.W.3d 273, 278 (Tex. App.-Amarillo 2008, no pet.); Tex. Disposal Sys. Landfill, Inc. v. Waste Management Holdings, Inc., 219 S.W.3d 563, 590 (Tex. App.-Austin 2007, pets. denied); Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.-Houston [14th Dist.] 2001, pets. denied).

These courts hold that to establish a claim for tortious interference with prospective business relations, a plaintiff must show: (1) a reasonable probability that the parties would have entered into a business relationship; (2) an intentional, malicious intervention or an independently tortious or unlawful act performed by the defendant with a desire to prevent the relationship or with the knowledge the interference was likely to occur as a result of its conduct; (3) lack of privilege or justification for the defendant's actions; and (4) actual harm or damages suffered by the plaintiff as a result of the defendant's interference, i.e., the defendant's actions prevented the relationship. Labor, 268 S.W.3d at 278.

SOURCE: SAN ANTONIOCOURT OF APPEALS - 04-13-00033-CV - 11/6/2013 

Quasi-contract theories: Money had and received

Money Had and Received and Unjust Enrichment 
as theories of recovery under Texas law 

  

Unjust enrichment and money had and received are examples of quasi-contract theories. See Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000); Merry Homes, Inc. v. Luc Dao, 359 S.W.3d 881, 883 (Tex. App.-Houston [14th Dist.] 2012, no pet.). A quasi-contract, or a "contract implied in law," is "not a contract at all but an obligation imposed by law to do justice even though it is clear that no promise was ever made or intended." Bank of Am. v. Jeff Taylor LLC, 358 S.W.3d 848, 856 (Tex. App.-Tyler 2012, no pet) (quoting Fortune Prod. Co., 52 S.W.3d at 684).

Unjust enrichment occurs when the person sought to be charged has wrongfully secured a benefit or has passively received one that it would be unconscionable to retain. Villareal v. Grant Geophysical, Inc., 136 S.W.3d 265, 270 (Tex. App.-San Antonio 2004, pet. denied). "To prove a claim for money had and received, a plaintiff must show that a defendant holds money which in equity and good conscience belongs to him." MGA Ins. Co. v, Charles R. Chesnutt, P.C., 358 S.W.3d 808, 814 (Tex. App.-Dallas 2012, no pet.); accord Edwards v. Mid-Continent Office Distrib., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied).

SOURCE: DALLAS COURT OF APPEALS - 05-12-00534-CV - 6/19/2013 

Implied-in-fact Contract - Texas case law cite

An implied-in-fact contract "arises from the acts and conduct of the parties, it being implied from the facts and circumstances that there was a mutual intention to contract." Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607, 609 (Tex. 1972); accord Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 850 (Tex. 2009). 
  
A meeting of the minds is an essential element of an implied-in-fact contract. Tex. Ass'n of Counties Cnty. Gov't Risk Mgmt. Pool v. Matagorda Cnty., 52 S.W.3d 128, 133 (Tex. 2000). 

The court must look to the conduct of the parties to determine the terms of the contract on which the minds of the parties met. Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 75 (Tex. App.-Houston [14th Dist.] 2010, pet. denied); Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 557 (Tex. App.-Houston [14th Dist.] 2002, no pet.). The determination of a meeting of the minds is based on the objective standard of what the parties said and did, not on their subjective states of mind. Parker Drilling Co., 316 S.W.3d at 75; Lopez, 93 S.W.3d at 557.  

SOURCE: DALLAS COURT OF APPEALS - 05-12-00534-CV - 6/19/2013 

Legal instruments (notes, contracts) and the parol evidence rule

   
The nature of the parol evidence rule

   

The parol evidence rule functions to make the instrument sued on the sole repository of the legal transaction. Lawrence Gen. Corp. v. Anchor Post Prod. of Tex., Inc., No. 05-95-01771-CV, 1997 WL 78913 at *2 (Tex. App.-Dallas Feb. 26, 1997, no writ) (not designated for publication). In other words, the terms of the transaction must be derived from the writing alone. 

Where the instrument sued on is a professedly partial or incomplete agreement, however, the rule excluding parol evidence does not apply. Id.; see also Garner v. Redeaux, 678 S.W.2d 124, 128 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.). An instrument is incomplete when it refers to terms or understandings not embraced in its provisions. Lawrence Gen. Corp., 1997 WL 78913 at *2.

SOURCE:  DALLAS COURT OF APPEALS -  No. 05-11-01536-CV - 6/7/2013 

Also see Anglo-Dutch Petroleum Int'l,352 S.W.3d at 451; Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.-Houston [1st Dist.] 2005, pet. denied) ("The parol evidence rule is not a mere rule of evidence, but a rule of substantive contract law. . . . Evidence violating the parol evidence rule has no legal effect and merely constitutes proof of facts that are immaterial and inoperative."). But the parol evidence rule

does not prohibit consideration of surrounding circumstances that inform, rather than vary from or contradict, the contract text. Those circumstances include . . . the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give a context to the transaction between the parties.

Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex. 2011) (internal citations omitted).

Mutual Mistake argument in contract dispute to avoid enforcement or liability

   
Mutual Mistake as affirmative defense in contract dispute

To establish the defense of mutual mistake in a written instrument, [Defendant] must plead and prove (1) the original agreement, and (2) a mutual mistake made in reducing the original agreement to writing. Peters v. Gifford-Hill & Co., 794 S.W.2d 856, 860 (Tex. App.-Dallas 1990, writ denied). 
   
The party asserting mutual mistake must prove what the true agreement was, but "his case is not made by proof that there was an agreement which is at variance with the writing. He must go further and establish the fact that the terms and provisions of the writing which differ from the true agreement made were placed in the instrument by mutual mistake." Id. (citing Sun Oil Co. v. Bennett, 84 S.W.2d 447, 451 (Tex. 1935)); see also Balboa Ins. Co. v. K&D & Assoc., 589 S.W.2d 752, 757 (Tex. Civ. App.-Dallas 1979, writ ref'd n.r.e.) (evidence must show both parties were acting under the same misunderstanding of the same material fact to establish mutual mistake). 
  
Mutual mistake is generally established from all of the facts and circumstances surrounding the parties, and the execution of the instrument. Simpson v. Curtis, 351 S.W.3d 374, 378 (Tex. App.-Tyler 2010, no pet.).

SOURCE:  DALLAS COURT OF APPEALS -  No. 05-11-01536-CV - 6/7/2013 

What is equitable title versus legal title?

What is equitable title?

Equitable title is the present right to compel legal title. Smith v. Dass, Inc., 283 S.W.3d 537, 542 (Tex. App.-Dallas 2009, no pet.). Equitable title may be shown where the plaintiff proves it has paid the purchase price and fully performed the obligations under the contract. Cullins v. Foster, 171 S.W.3d 521, 533 (Tex. App.-Houston [14th Dist.] 2005, pet. denied).

SOURCE:  DALLAS COURT OF APPEALS  -  No. 05-11-01536-CV - 6/7/2013 

Can causes of actions be assigned in Texas?

   
Can causes of action be assigned – General Rule and Exceptions

As a general rule, causes of action are freely assignable. City of Brownsville ex rel. Pub. Utils. Bd. v. AEP Tex, Cent. Co., 348 S.W.3d 348, 358 (Tex. App.-Dallas 2011, pet. denied). The Texas Supreme Court has recognized a few exceptions to this general rule, but it has not held that bill-of-review claims may not be assigned. See PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P'ship, 146 S.W.3d 79, 92 (Tex.2004) (holding that "DTPA claims generally cannot be assigned by an aggrieved consumer to someone else"); State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696, 707-11 (Tex.1996) (discussing four circumstances in which claims cannot be assigned: legal-malpractice claims, Mary Carter agreements, assignments of a plaintiffs claim to a joint tortfeasor, and assignments of certain interests in an estate). The law generally prohibits the assignment of a claim only when the particular assignment presents specific dangers, such as jury confusion, the multiplication of disputes, and potential prejudice to the parties. See Gandy, 925 S.W.2d at 707-11. Unless the assignment of a bill-of-review claim like HSBC's would present similar dangers, the general rule of assignability ought to apply.

SOURCE:  DALLAS COURT OF APPEALS - No. 05-10-00676-CV – 6/15/2012

The policy of this State is to permit the assignment of a cause of action in the absence of policy reasons to forbid the particular kind of assignment. See generally Gandy, 925 S.W.2d at 705-11. We have not been presented with any reason to conclude that permitting the assignment of Fieldstone's bill-of-review rights to HSBC would be inimical to public policy. We conclude that HSBC is correct and that Fieldstone's right to bring a bill of review to challenge the underlying default judgment is assignable.

Contract ambiguity as an affirmative defense in a contract dispute

CONTRACT AMBIGUITY AS DEFENSE 

When asserting ambiguity as an affirmative defense, the pleading must set out the alleged ambiguous portion of the contract and the meaning or construction relied on by the party asserting ambiguity. See World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 680 (Tex. App.-Fort Worth 1998, pet. denied). 

SOURCE:  DALLAS COURT OF APPEALS  -  No. 05-11-01536-CV - 6/7/2013

Plaintiffs prevented from double-dipping on damages claims under the one-satisfaction rule

THE ONE-SATISFACTION RULE  

The one-satisfaction rule is the longstanding proposition that precludes a plaintiff from recovering twice for the same injury. Utts v. Short, 81 S.W.3d 822, 831 (Tex. 2002) (citing Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000)); Galle, 262 S.W.3d at 573. The rule applies when several defendants commit the same act and when multiple defendants commit technically different acts that result in a single injury. Crown Life, 22 S.W.3d at 390; Galle, 262 S.W.3d at 573. 
  
The one-satisfaction rule guards against a plaintiff's "receiving a windfall `by recovering an amount in court that covers the plaintiff's entire damages, but to which a settling defendant has already contributed.'" Galle, 262 S.W.3d at 573 (quoting Osborne v. Jauregui, 252 S.W.3d 70, 75 (Tex. App.-Austin 2008, pet. denied) (en banc)).

SOURCE: AUSTIN COURT OF APPEALS - 03-10-00499-CV – 8/23/2013  

The American Rule applies in Texas courts (regarding award of attorney's fees in a lawsuit)

THE AMERICAN RULE GOVERNS RECOVERABILITY OF ATTORNEYS' FEES IN LITIGATION

Texas follows the American Rule, meaning that attorney’s fees can only be awarded as part of the judgment if a contract or statute provides for them

Whether a party may recover reasonable attorney's fees is a question of law for the trial court which we review de novo. Brent v. Field, 275 S.W.3d 611, 621 (Tex. App.-Amarillo 2008, no pet.) (citing Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94, 95 (Tex. 1999)). 
  
It has long been the rule in Texas that attorney's fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a statute or contract that allows for their recovery. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006) ("Absent a contract or statute, trial courts do not have inherent authority to require a losing party to pay the prevailing party's fees."); Wm. Cameron & Co. v. Am. Sur. Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm'n App. 1932, judgm't adopted) ("It is settled law in this state that, unless provided for by statute or by contract between the parties, attorneys' fees incurred by a party to litigation are not recoverable against his adversary either in an action in tort or a suit upon a contract."); Sherrick v. Wyland, 14 Tex. Civ. App. 299, 37 S.W. 345, 345 (Tex. Civ. App. 1896) ("It has often been ruled, in this state and elsewhere, that fees of counsel, incurred in prosecuting a suit for or defending against a wrong, are not ordinarily recoverable as actual damages, because they are not considered proximate results of such wrong."). The rule is known as the American Rule. See Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 602, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001) ("[P]arties are ordinarily required to bear their own attorney's fees—the prevailing party is not entitled to collect from the loser.").

SOURCE:  WACO COURT OF APPEALS - 10-12-00241-CV – 8/8/2013  Pharia, LLC v Childers (Trial court erred in awarding attorney's fees; court of appeals reverses portion of the judgment that awarded the attorney's fees and renders a take-nothing judgment on that claim, but otherwise affirms). 

ATTORNEYS FEES NOT RECOVERABLE AS ACTUAL DAMAGES 

Texas has long followed the "American Rule," which prohibits an award of attorney's fees unless specifically provided by contract or statute. MBM Fin. Corp. v. The Woodlands Operating Co., 292 S.W.3d 660, 6693d (Tex. 2009).

Here, there is no contract between the parties, and Sherman does not seek attorney's fees under any statutory provision. Rather, he contends that because Wein filed a fraudulent lawsuit against him, causing him to expend money in attorney's fees and expenses, he is entitled to recover those fees and expenses as actual damages.

Attorney's fees, however, are ordinarily not recoverable as actual damages in and of themselves. See Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 81-82, 83 (Tex. 2003) (attorney plaintiffs who sought to recover damages based solely on value of time and costs incurred in defending claims had not suffered actual damages and were not entitled to only damages they claimed; plaintiffs should have pursued attorney's fees as sanctions under Rule 13 or Chapter 10); Worldwide Asset Purchasing, L.L.C. v. Rent-a-Center East, Inc., 290 S.W.3d 554, 570 (Tex. App.-Dallas 2009, no pet.) (attorney's fees not recoverable as actual damages); Haden v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.-Houston [1st. Dist.] 2007) (same), rev'd on other grounds, 266 S.W.3d 447 (Tex. 2008); Quest Commc'ns Int'l, Inc. v. AT&T Corp., 114 S.W.3d 15, 35-36 (Tex. App.-Austin 2003) (damages measured by plaintiff's attorney's fees recoverable only under certain exceptions not implicated here), rev'd in part on other grounds, 167 S.W.324 (Tex. 2005) (per curiam).

Because Sherman neither sought nor proved any damages other than attorney's fees, there is no evidence to support the actual damage element of any of his asserted claims, and the district court did not err in granting summary judgment in Wein's favor. We overrule Sherman's cross-issue.

SOURCE: AUSTIN COURT OF APPEALS - 03-10-00499-CV – 8/23/2013  

Defamation law principles - Elements of cause of action and defenses to defamation suit

  
The General Law Concerning Defamation

"Defamation" is generally defined as the invasion of a person's interest in his or her reputation and good name. PROSSER & KEETON ON TORTS § 111, at 771 (5th ed. 1984 & Supp. 1988). "Defamation" encompasses both libel and slander. By statute, Texas law defines "libel" as a defamation expressed in written or other graphic form that tends to injure a living person's reputation and thereby expose the person to public hatred, contempt, ridicule, or financial injury or to impeach any person's honesty, integrity, virtue, or reputation or to publish the natural defects of anyone and thereby expose the person to public hatred, ridicule, or financial injury. TEX. CIV. PRAC. & REM. CODE ANN. § 73.001 (Vernon 2011).

Elements of defamation tort as a cause of action under Texas law 

To prevail on a defamation cause of action, the plaintiff must prove that the defendant (1) published a statement, (2) that was defamatory concerning the plaintiff, (3) while acting with actual malice regarding the truth of the statement where the plaintiff was a limited purpose public figure.[4] See WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998); Tex. Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 574 (Tex. App.-Austin 2007, pet. denied).

Whether a statement is capable of a defamatory meaning is a question of law. See Fort Worth Star-Telegram v. Street, 61 S.W.3d 704, 708 (Tex. App.-Fort Worth 2001, pet. denied) (citing Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653, 655 (Tex. 1987)). We must view the statements alleged to be defamatory as a whole and in light of the surrounding circumstances; the determination is based upon how a person of ordinary intelligence would perceive the entire statement. Ezrailson v. Rohrich, 65 S.W.3d 373, 376 (Tex. App.-Beaumont 2001, no pet.). Statements alleged to be defamatory must be viewed in their context; they may be false, abusive, unpleasant, or objectionable to the plaintiff and still not be defamatory in light of the surrounding circumstances. Id. We must consider the entire communication, not mere isolated sentences or portions. Musser, 723 S.W.2d at 655.

Opinion

Purely subjective assertions or opinions that do not imply the existence of undisclosed facts and do not misconstrue the facts are not actionable as defamation. See Bentley v. Bunton, 94 S.W.3d 561, 583-84 (Tex. 2002); see also Carr v. Brasher, 776 S.W.2d 567, 570 (Tex. 1989) (explaining that "[a]ll assertions of opinion are protected by the first amendment of the United States Constitution and article I, section 8 of the Texas Constitution"). This is particularly so when the facts underlying an opinion are set out in the publication itself, thereby allowing the listener to evaluate the facts and either accept or reject the opinion. Brewer, 986 S.W.2d at 643. Instead, to be actionable as defamation, a statement must be an assertion of verifiable fact, that is, a statement that purports to be verifiable. Bentley, 94 S.W.3d at 583-84.

The determination of whether a publication is an actionable statement of fact or a constitutionally protected statement of opinion, like the determination whether a statement is false and defamatory, is a question of law. Bentley, 94 S.W.3d at 580; see also Turner v. KTRK, Television, Inc., 38 S.W.3d 103, 114 (Tex. 2000). And, like the determination whether a publication is false and defamatory, the determination whether a publication is an actionable statement of fact or a protected expression of opinion depends upon a reasonable person's perception of the entirely of the publication. Bentley, 94 S.W.3d at 579.

Statements 1 through 4 listed above are all statements reflecting Jones's opinion that Vecchio was not properly appointed or elected according to Huisache Acres' Bylaws. Specifically, Jones considered Vecchio "a threat" to the HOA because he "[held] himself out as an elected director," brought "reckless" lawsuits, "deemed" himself a director though never "duly elected," and brought suits for "questionable" HOA violations.

In Falk & Mayfield LLP v. Molzan, 974 S.W.2d 821, 822-23 (Tex. App.-Houston [14th Dist.] 1998, pet. denied), the defendant placed a sign in from of his place of business stating, "Ask me about lawsuit abuse & the Law Firm of Falk & Mayfield." Id. at 822. The law firm referenced in the sign filed a suit for defamation against the defendant. Id. The court of appeals held that, although the term "lawsuit abuse" is an accusation of legally manipulating the civil justice system to gain an unfair advantage, it was "an individual judgment that rests solely in the eye of the beholder" and was "an expression of opinion which is absolutely protected." Id. at 824.

Despite Vecchio's claims that Jones's statements amounted to accusations of barratry, we hold that the statements by Jones that Vecchio was a "threat" and brought "reckless lawsuits" for "questionable" HOA violations to be, like the term "lawsuit abuse" in Falk, nothing more than Jones's opinions, thus not actionable. See also Tomlinson v. McComas, No. 02-11-00175-CV, 2011 WL 5607604, at *8 (Tex. App.-Fort Worth Nov. 17, 2011, pet. denied) (holding that statements regarding how president of homeowners' association presided over matters constituted opinions that were not actionable for defamation).

Substantial Truth

Truth is a defense to defamation. Klentzman v. Brady, 312 S.W.3d 886, 898 (Tex. App.-Houston [1st Dist.] 2009, no pet.) A showing of substantial truth of defamatory words likewise will defeat a defamation cause of action. McIlvain v. Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990); Gustafson v. City of Austin, 110 S.W.3d 652, 656 (Tex. App.-Austin 2003, pet. denied) ("The defense of truth does not require proof that the alleged defamatory statement is literally true in every detail; substantial truth is sufficient."). The test of substantial truth is "whether the alleged defamatory statement was more damaging to [plaintiff's] reputation, in the mind of the average listener, than a truthful statement would have been." McIlvain, 794 S.W.2d at 16; see Turner, 38 S.W.3d at 115 (noting substantial truth doctrine "precludes liability for a publication that correctly conveys a story's `gist' or `sting' although erring in the details"); Langston v. Eagle Printing Co., 797 S.W.2d 66, 69-70 (Tex. App.-Waco 1990, writ ref'd n.r.e.) (concluding statement is substantially true even if it greatly exaggerates plaintiff's misconduct, as long as the average reader would not attach any more opprobrium to the plaintiff's conduct merely because of the exaggeration). In making the determination as to substantial truth, we look to the "gist" of the statement alleged to be defamatory. See McIlvain, 794 S.W.2d at 16.

Actual Malice

To establish a defamation claim, a limited purpose public figure must show that the defendant published the allegedly defamatory statements with actual malice. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S. Ct. 2997, 3008 (1974); McLemore, 978 S.W.2d at 571. A defendant may prevail on his motion for summary judgment by offering evidence negating the actual malice element as a matter of law. See Hearst Corp. v. Skeen, 159 S.W.3d 633, 637 (Tex. 2005); Huckabee v. Time Warner Entm't Co. L.P., 19 S.W.3d 413, 420 (Tex. 2000). Once the defendant meets this burden, then the plaintiff must present evidence raising a genuine issue of material fact regarding actual malice to avoid summary judgment. Huckabee, 19 S.W.3d at 420.

The actual malice standard serves to protect innocent, but erroneous, speech on public issues, while deterring "calculated falsehoods." Turner, 38 S.W.3d at 120. A showing of "actual malice" in a defamation suit requires proof that the defendant made a statement with knowledge that it was false or with reckless disregard of whether it was true or false. New Times, Inc. v. Isaacks, 146 S.W.3d 144, 162 (Tex. 2004); Huckabee, 19 S.W.3d at 420. In this context, actual malice refers to the defendant's attitude toward the truth of what he said, McLemore, 978 S.W.2d at 573, and means that the defendant made the statement knowing that it was false or with reckless disregard about whether the statement was false or not. HBO v. Harrison, 983 S.W.2d 31, 36 (Tex. App.-Houston [14th Dist.] 1998, no pet.).

Reckless disregard is a subjective standard, focusing on the defendant's state of mind. Isaacks, 146 S.W.3d at 162; Bentley, 94 S.W.3d at 591. Specifically, the plaintiff must establish that the defendant in fact entertained serious doubts as to the truth of his publication, or had a high degree of awareness of the probable falsity of the published information. Isaacks, 146 S.W.3d at 162 (citing Bentley, 94 S.W.3d at 591) (internal quotations omitted).

Thus, we look to the record to determine whether Jones has negated actual malice, thus shifting the burden to Vecchio. In Casso v. Brand, 776 S.W.2d 551, 559 (Tex. 1989), the court considered the adequacy of Casso's evidence negating actual malice and concluded some of Casso's summary judgment proof was sufficient to negate actual malice, and some of it was not. Id. When Casso testified "he did not believe the allegations were false and did not act with reckless disregard as to their truth or falsity in repeating those allegations," summary judgment was proper. Id. When Casso's proof provided "no information as to Casso's knowledge that the statements were not false or were not made with reckless disregard to their truth or falsity," it was not sufficient. Id. In Huckabee, the supreme court further explained that to negate actual malice, an affidavit from an interested witness "must establish the defendant's belief in the challenged statements' truth and provide a plausible basis for this belief." Huckabee,19 S.W.3d at 424.

"Actual malice" in the defamation context is a term of art. Id. Unlike common-law malice, it does not include ill will, spite, or evil motive. Id. Rather, to establish actual malice, a plaintiff must prove that the defendant made the statement "with knowledge that it was false or with reckless disregard of whether it was true or not." New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 727 (1964); Huckabee, 19 S.W.3d at 420. "Reckless disregard" is also a term of art. Huckabee, 19 S.W.3d at 420. To establish reckless disregard, a public official or public figure must prove that the publisher "entertained serious doubts as to the truth of his publication." St. Amant v. Thompson, 390 U.S. 727, 731, 88 S. Ct. 1323, 1326 (1968); Huckabee, 19 S.W.3d at 420. "Actual malice concerns the defendant's attitude toward the truth, not toward the plaintiff." Isaacks, 146 S.W.3d at 165.

SOURCE: HOUSTON COURT OF APPEALS - 01-12-00442-CV – 7/9/2013