Rule 11 Agreement must be in writing and filed with the court

WHAT REQUIREMENTS DOES A RULE ELEVEN AGREEMENT 
HAVE TO SATISFY TO BE ENFORCEABLE?

A Rule 11 agreement must be in writing and signed and filed with the court unless it is made in open court. See TEX.R.CIV.P. 11. The filing requirement creates the imprimatur of a court record. ExxonMobil Corporation v. Valence Operating Company, 174 S.W.3d 303, 309 (Tex.App.-Houston [1st Dist.] 2005, pet. denied). A settlement agreement must comply with Rule 11 to be enforceable. Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995); Broderick v. Kaye Bassman International Corp., 333 S.W.3d 895, 904-05 (Tex.App.-Dallas 2011, no pet.).

Rule Eleven Agreements are named after Rule 11 of the
Texas Rules of Civil Procedure 

While Rule 11 requires the writing to be filed in the court record, it does not say when it must be filed. Padilla, 907 S.W.2d at 461.

WHEN A PARTY CHANGES ITS MIND AFTER SIGNING RULE 11 - REVOCATION OF CONSENT

A party has the right to revoke its consent to a Rule 11 agreement at any time before the rendition of judgment. Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983). Withdrawal of consent must be effectively communicated to the trial court. Baylor College of Medicine v. Camberg, 247 S.W.3d 342, 346-47 (Tex.App.-Houston [14th Dist.] 2008, pet. denied); First Heights Bank, FSB v. Marom, 934 S.W.2d 843, 845 (Tex.App.-Houston [14th Dist.] 1996, no writ). Ordinarily, when one party withdraws consent to a Rule 11 agreement, another party can still seek to enforce it as a contract through an amended pleading or a counterclaim. Ford Motor Company v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009); Padilla, 907 S.W.2d at 461; see Kanan v. Plantation Homeowner's Association Inc., 407 S.W.3d 320, 334 (Tex.App.-Corpus Christi 2013, no pet.h.)(Where consent to a Rule 11 agreement has been withdrawn, a court may enforce it through a separate breach of contract claim). Generally, these rules are applied in cases where the trial court rendered judgment pursuant to a Rule 11 agreement and one party is claiming that it withdrew its consent to the agreement.

ENFORCEMENT OF RULE 11 AGREEMENT

A trial court has a ministerial duty to enforce a valid Rule 11 agreement. Fortis Benefits v. Cantu, 234 S.W.3d 642, 651 (Tex. 2007); EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 91 (Tex. 1996); In re Guardianship of White, 329 S.W.3d 591, 592 (Tex.App.-El Paso 2010, no pet.).

Rule 11 agreements are contracts relating to litigation and are subject to general rules of contract construction. Trudy's Texas Star, Inc. v. City of Austin, 307 S.W.3d 894, 914 (Tex.App.-Austin 2010, no pet.). Our primary objective in construing a written contract is to ascertain and give effect to the intentions the parties have objectively manifested in the written instrument. Trudy's Texas Star, 307 S.W.3d at 914, citing Frost National Bank v. L & F Distributors, Ltd., 165 S.W.3d 310, 311-12 (Tex. 2005). Contract terms are given their plain, ordinary, and generally accepted meanings, and contracts are to be construed as a whole in an effort to harmonize and give effect to all provisions of the contract. Trudy's Texas Star, 307 S.W.3d at 914, citing Valence Operating Company v. Dorsett, 164 S.W.3d 656, 663 (Tex. 2005). If a contract can be given a certain or definite legal meaning or interpretation, it is not ambiguous and is construed as a matter of law. Trudy's Texas Star, 307 S.W.3d at 914, citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).

SOURCE: EL PASO COURT OF APPEALS -No. 08-13-00069-CV - 4/23/2014 

SIGNATURE REQUIRED - EITHER PARTY OR PARTY'S ATTORNEY, OR BOTH 

Rule 11 provides that "no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record." TEX. R. CIV. P. 11. A Rule 11 agreement may be signed by attorneys for the parties, or the parties themselves. See TEX. R. CIV. P. 11; see also Ebner v. First State Bank of Smithville, 27 S.W.3d 287, 297 (Tex. App.-Austin 2000, pet. denied) (Rule 11 agreement may be signed by party or party's attorney). Thus, a settlement agreement satisfies the requirements of Rule 11 if it is (1) in writing, (2) signed by the parties or their attorneys, and (3) filed with the court or entered in open court prior to a party seeking enforcement. See TEX. R. CIV. P. 11. 

SOURCE: HOUSTON COURT OF APPEALS - No. 01-13-00176-CV -3/13/2014

Abuse of Process as a tort under Texas law

 

The tort of abuse of process

The elements of an abuse-of-process claim are (1) the defendant misused a regularly issued process—e.g., "the issuance of a citation or a writ"—for a purpose not lawfully warranted by that particular process, (2) the defendant had an ulterior motive or purpose for misusing the process, and (3) the plaintiff sustained damage from the irregularity. Detenbeck v. Koester, 886 S.W.2d 477, 480 (Tex. App.-Houston [1st Dist.] 1994, no writ); Tandy Corp. v. McGregor, 527 S.W.2d 246, 249 (Tex. App.-Texarkana 1975, writ ref'd n.r.e.); see also Pittsburgh SNF, LLC v. PharMerica E., Inc., 2:10-CV-363-JRG-RSP, 2012 WL 4509753, at *2 (E.D. Tex. July 19, 2012), report and recommendation adopted, No. 2:10-CV-363-JRG-RSP, 2012 WL 4508127 (E.D. Tex. Sept. 28, 2012) (listing examples of processes). The focus is on the use of the process once it is properly obtained, not on the motive for originally obtaining the process. See Detenbeck, 886 S.W.2d at 480-81; Tandy, 527 S.W.2d at 249 ("An action for abuse of process presupposes an originally valid and regular process, duly and properly issued."); cf. Bossin v. Towber, 894 S.W.2d 25, 33 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (explaining that malicious prosecution, by contrast, focuses on party's actions and malice in getting process issued); Tex. Beef Cattle Co. v. Green, 921 S.W.2d 203, 207-08 (Tex. 1996) (malicious prosecution case).

A suit for abuse of process must be based on an allegation that the other party misused process for a collateral purpose:

Some definite act or threat not authorized by the process . . . is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. The improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance or any formal use of the process itself, which constitutes the tort.

Blackstock v. Tatum, 396 S.W.2d 463, 468 (Tex. Civ. App.-Houston 1965, no writ); cf. Blanton v. Morgan, 681 S.W.2d 876, 878 (Tex. App.-El Paso 1984, writ ref'd n.r.e.) (seeking exemplary damages as means to extort settlement not abuse of process because process was used for intended purpose to require answer to petition). The process must be used to "compel[] a party to do a collateral thing which he would not be compelled to do" otherwise. See Detenbeck, 886 S.W.2d at 480; Blanton, 681 S.W.2d at 878; Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 378-79 (Tex. App.-Texarkana 1989, no writ) (citing RESTATEMENT (SECOND) OF TORTS § 682, cmt. b (1977)).

SOURCE: HOUSTON COURT OF APPEALS - 01-13-00463-CV - 3/27/2014

Suit-within-suit requirement in legal malpractice action against attorney by client alleging he lost case as a result of attorney’s error or negligence

   
Legal malpractice claim against attorney: the case-within-the-case causation element 

To prevail on a legal malpractice claim, a plaintiff must show that “(1) the attorney owed the plaintiff a duty, (2) the attorney breached that duty, (3) the breach proximately caused the plaintiff’s injuries, and (4) damages occurred.” Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 117 (Tex. 2004); see also Greathouse v. McConnell, 982 S.W.2d 165, 172 (Tex. App.—Houston [1st Dist.] 1998, pet. denied). If a legal malpractice case arises from underlying litigation, a plaintiff must prove that, but for the attorney’s breach of his duty, the plaintiff would have prevailed in the underlying case. Greathouse, 982 S.W.2d at 172.

Courts often refer to this causation aspect of the plaintiff’s burden as the “suitwithin-a-suit” requirement. See id. at 173. In general, one proves causation in a legal malpractice suit by expert testimony. See Alexander, 146 S.W.3d at 119–20.

SOURCE: FIRST COURT OF APPEALS - 01-13-00099-CV - 4/1/2014  (Borrell v. Robert Scott Wiliams and his law office)

Because Borrell has not adduced evidence to support a finding that he would have prevailed in the underlying case save for his lawyer’s malpractice, we hold that he has failed to raise a fact issue regarding the “case within a case” causation element of his claim against Williams. See Merrell Dow Pharm., 953 S.W.2d at 711; TEX. R. CIV. P. 166(i). Accordingly, the trial court properly granted a no-evidence summary judgment. See Merrell Dow Pharm., 953 S.W.2d at 711; TEX. R. CIV. P. 166(i).

What must the plaintiff show in a suit to quiet title?

SUIT TO QUIET TITLE REQUIREMENTS

To prevail in a suit to quiet title, a plaintiff must prove: (1) he has an interest in a specific property; (2) title to the property is affected by a claim by the defendant; and (3) the claim, although facially valid, is invalid or unenforceable. See, e.g., Vernon v. Perrien, 390 S.W.3d 47, 61 (Tex. App.-El Paso 2012, pet. denied); see also U.S. Nat'l Bank Ass'n v. Johnson, No. 01-10-00837-CV, 2011 WL 6938507, at *3 (Tex. App.-Houston [1st Dist.] Dec. 30, 2011, no pet.) (mem. op.). "[T]o contest a bank's foreclosure of a deed of trust, a party must, at the time of the foreclosure, either (1) be the mortgagor under the deed of trust or be in privity with the mortgagor, or (2) have an ownership interest in the property affected by the foreclosure." Ursic v. NBC Bank S. Tex., N.A., 827 S.W.2d 334, 336 (Tex. App.-Corpus Christi 1991, writ denied) (citing Goswami v. Metropolitan Sav., 751 S.W.2d 487, 489 (Tex. 1988)).

Caselaw snippet from a 2015 federal district court opinion/order 

STRENGTH OF PLAINTIFF'S TITLE VS WEAKNESS OF OPPONENT'S

And the plaintiff must recover on the strength of his own title, not on the weakness of his adversary's title. Fricks v. Hancock, 45 S.W.3d 322, 327 (Tex. App.-Corpus Christi 2001, no pet.) (citing Alkas v. United Sav. Ass'n of Tex., Inc., 672 S.W.2d 852, 857 (Tex. App.-Corpus Christi 1984, writ ref'd n.r.e.)). He "must allege right, title or ownership in himself with sufficient certainty to enable the court to see that plaintiff has a right of ownership that will warrant judicial interference." Ellison v. Butler, 443 S.W.2d 886, 888-89 (Tex. Civ. App.-Corpus Christi 1969, no writ); see Wright v. Matthews, 26 S.W.3d 575, 578 (Tex. App.-Beaumont 2000, pet. denied). The plaintiff has the burden of supplying the proof necessary to establish his superior equity and right to relief. Essex Crane Rental Corp. v. Carter, 371 S.W.3d 366, 387-88 (Tex. App.-Houston [1st Dist.], pet. denied) (op. on reh'g); Ellison, 443 S.W.2d at 888-89.

SOURCE: CORPUS CHRISTI COURT OF APPEALS - Nos. 13-12-00474-CV, 13-12-00753-CV Burnett v Bank of New

Breach of Note Claim - Which elements must the lender / holder / assignee prove?

    
ELEMENTS OF BREACH OF PROMISSORY NOTE
 
“To collect on a promissory note, a plaintiff must establish: (1) the existence of the note in question, (2) the defendant signed the note, (3) the plaintiff is the owner and holder of the note, and (4) 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 Clark v. Dedina, 658 S.W.2d 293, 295 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d).
 
OWNERSHIP OF NOTE AND RIGHT-TO-SUE ISSUE IMPLICATES THE MERITS OF THE CLAIM [not a standing issue in the jurisdictional sense]
 
“[T]he question of whether a party is entitled to sue on a contract is sometimes informally referred to as an issue of standing.” Ashford Partners, Ltd. v. Eco Res., Inc., No. 01-09-00809-CV, 2010 WL 2991118, at *3 (Tex. App.—Houston [1st Dist.] July 29, 2010, pet. filed); see Yasuda Fire & Marine Ins. Co. of Am. v. Criaco, 225 S.W.3d 894, 898 (Tex. App.—Houston [14th Dist.] 2007, no pet.). “Nevertheless, . . . the issue does not affect the court’s jurisdiction, [and] it is not truly one of standing, but one on the merits of the contract claim itself.” Ashford Partners, 2010 WL 2991118, at *3 (citing Criaco, 225 S.W.3d at 898). Because ownership of the promissory note was an essential element of Wells Fargo’s right to collect on it, see Cadle, 21 S.W.3d at 674; Clark, 658 S.W.2d at 295, the [...] District Court’s determination that Wells Fargo did not own the promissory note is a determination on the merits, not one of jurisdiction. See Ashford Partners, 2010 WL 2991118, at *3; Criaco, 225 S.W.3d at 898.
 
SOURCE: Houston Court of Appeals for the First District -  01-10-00020-CV 5/12/12

The Equitable Remedy of Constructive Trust

What is Constructive Trust as a form of relief in a lawsuit?

CONSTRUCTIVE TRUST DEFINED

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex. App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.; see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. App.-Fort Worth 2004, pet. denied).

 

ESSENTIAL ELEMENTS THAT MUST BE SATISFIED TO STAKE CLAIM FOR IMPOSITION OF A CONSTRUCT TRUST

 

To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud, (2) unjust enrichment of the wrongdoer, and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485. "`A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that [her] acquisition or retention of the property is wrongful and that [she] would be unjustly enriched if [she] were permitted to retain the property.'" Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 176 S.W.2d 158, 160 (Tex. 1943)).

SOURCE: SAN ANTONIO COURT OF APPEALS – No. 06-13-00043-CV – 2/20/2014

 

 

Waiver as a Defense or Counterdefense: When does it apply? When not?

WAIVER AS AN AFFIRMATIVE DEFENSE OR COUNTERDEFENSE

What is waiver, legally speaking, in the context of litigation?

WAIVER DEFENSE DEFINED

“Waiver is the intentional relinquishment of a right actually known, or intentional conduct inconsistent with claiming that right.” Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008).

ELEMENTS OF WAIVER INCLUDE BEING AWARE OF WHAT IS BEING WAIVED

The elements of waiver are: (1) an existing right, benefit, or advantage held by a party; (2) the party’s actual knowledge of its existence; and (3) the party’s actual intent to relinquish the right held or intentional conduct that is inconsistent with the right. Id.

SOURCE: HOUSTON COURT OF APPEALS - 01-12-00168-CV – 2/27/2014

 

 

Attorneys Fees not recoverable as damages

 
Attorneys' Fees are not considered damages and not recoverable as such; contract or statute must authorize fee award

Texas law distinguishes between the recovery of attorneys' fees as actual damages and recovery of attorneys' fees incident to the recovery of other actual damages. Worldwide Asset Purchasing, L.L.C. v. Rent-a-Center East, Inc., 290 S.W.3d 554, 570 (Tex. App.-Dallas 2009, no pet.). A party may recover attorneys' fees only as provided by contract or statute. Id.; Burnside Air Conditioning & Heating, Inc. v. T.S. Young Corp., 113 S.W.3d 889, 898 (Tex. App.-Dallas 2003, no pet.). As a general rule, attorneys' fees are not recoverable as damages in and of themselves. See, e.g., Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 82 (Tex. 2003); Imagine Automotive Group, Inc. v. Boardwalk Motor Cars, L.L.C., 356 S.W.3d 716, 718 (Tex. App.-Dallas 2011, no pet.); Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 521 (Tex. App.-Houston [1st Dist.] 2009, pet. denied); Worldwide Asset Purchasing, 290 S.W.3d at 570; see also Quest Communications Int'l, Inc. v. AT & T Corp., 114 S.W.3d 15, 35-36 (Tex. App.-Austin 2003) (damages measured by plaintiff's attorneys' fees recoverable only under certain exceptions not implicated here), rev'd in part on other grounds, 167 S.W.3d 324 (Tex. 2005) (per curiam).

A party relying on assertions of non-recoverable damages alone, such as attorneys' fees and expenses sustained in defending a lawsuit and prosecuting a counterclaim, has presented a legal barrier to any recovery. See Tana, 104 S.W.3d at 82 (damages described in terms of "value of time spent" and "costs incurred" in defending lawsuit were non-recoverable, even if party seeking such damages could have proven all other elements of claim for tortious interference); Eberts v. Businesspeople Personnel Servs., Inc., 620 S.W.2d 861, 863 (Tex. Civ. App.-Dallas 1981, no writ) ("[e]xpenses of litigation are not recoverable as damages unless expressly provided by statute or contract," and "[t]his rule applies to a litigant's loss of time"); Phillips v. Latham, 523 S.W.2d 19, 27 (Tex. Civ. App.-Dallas 1975, writ ref'd n.r.e.) ("the only time lost from work by either of the plaintiffs . . . was time lost because of the pendency of the lawsuit, such as that required for depositions and attendance at the two trials in this case. This loss is an expense of litigation. We know of no authority supporting recovery of actual damages for such a loss . . . ."); see also Haden v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex. App.-Houston [1st Dist.] 2007 (op. on reh'g), rev'd on other grounds, 266 S.W.3d 447 (Tex. 2008) (per curiam). This is true even if all other elements of the party's claim are proven. See Tana, 104 S.W.3d at 82; Consumer Portfolio Servs, Inc. v. Obregon, No. 13-09-00548-CV, 2010 WL 4361765, at *9 (Tex. App.-Corpus Christi Nov. 4, 2010, no pet.) (mem. op.).

SOURCE: DALLAS COURT OF APPEALS - 05-11-01718-CV - 1/30/2014.
CASE STYLE: Woodhaven Partners Ltd v. Shamoun & Norman LLP

The importance of reading the contract prior to signing it - Finding out in litigation the hard way

Read the contract: You are stuck with what you agree to by signing it. The court probably won't allow you to come up with a different "reading" when you later find that the wording does not suit you. 

Hagee cites no case law to support her contention that Felder had a duty to disclose his interpretation to her. Indeed, case law supports the opposite conclusion. See Pride Int'l, Inc. v. Bragg, 259 S.W.3d 839, 850 (Tex. App.-Houston [1st Dist.] 2008, no pet.) (holding director had no duty to disclose personal opinion regarding contract's interpretation during negotiations). "To the contrary, a person who signs a contract must be held to have known what words were used in the contract and to have known their meaning, and he must be held to have known and fully comprehended the legal effect of the contract." Tamez v. Southwestern Motor Transport, Inc., 155 S.W.3d 564, 570 (Tex. App.-San Antonio 2004, no pet.); see also Centella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex. 1996) (referring to "legal presumption that a party who signs a contract knows of its contents").

Moreover, even when a court construes a contract to determine the intent of the parties, it is the objective intent that controls; the court does not consider the parties' personal interpretations or subjective intent. Neel v. Tenet HealthSys. Hosps. Dallas, Inc., 378 S.W.3d 597, 605 (Tex. App.-Dallas 2012, pet. denied); Weaver v. Highlands Ins. Co., 4 S.W.3d 826, 831 (Tex. App.-Houston [1st Dist.] 1999, no pet.).

SOURCE: SAN ANTONIO COURT OF APPEALS - No. 04-12-00434-CV - 1/22/2014

How to establish damages for temporary injury to real property

What is the proper measure of damages on a successful claim predicated on non-permanent injury to real property?

"In the case of a temporary injury to real estate, the measure of damages is ordinarily the cost and expense of restoring the land to its former condition, plus the loss or damages occasioned by being deprived of the use of same, with interest." Vaughn v. Drennon, 372 S.W.3d 726, 738 (Tex. App.-Tyler 2012, no pet.); see also Meridien Hotels, Inc. v. LHO Fin. P'ship I, L.P., 255 S.W.2d 807, 821 (Tex. App.-Dallas 2008, no pet.). Felder and Esperanza concede that the record contains no evidence to support the damage award, but appear to believe Esperanza is entitled to a remand for a new trial on this claim.

Because Hagee and Serengeti raised this issue in a motion for judgment notwithstanding the verdict and they assert a no evidence challenge on appeal, they are entitled to a rendition of the judgment, rather than a remand of the cause. See E-Z Mart Stores, Inc. v. Ronald Holland's A-Plus Transmission & Auto., Inc., 358 S.W.3d 665, 670 (Tex. App.-San Antonio 2011, pet. denied); but see Graves v. Tomlinson, 329 S.W.3d 128, 141 n.2 (Tex. App.-Houston [14th Dist.] 2010, pet. denied) (noting party entitled to remand rather than rendition if legal sufficiency issue preserved only by motion for new trial).

Accordingly, because there is no evidence to support the jury's damage award, the trial court's judgment regarding the trespass claim is reversed, and judgment is rendered that Esperanza take nothing as to the trespass claim.

SOURCE: SAN ANTONIO COURT OF APPEALS - No. 04-12-00434-CV - 1/22/2014
SERENGETI RESORT, LLC v. ESPERANZA PROPERTIES, LP ET AL

Mitigation in the context of default on real estate note and foreclosure

Mitigation in the foreclosure and breach of real estate note context: Bank not required to accept offer/consent to sale of secured property that would not have covered the entire indebtedness and would have precluded it from enforcing the note and obtain deficiency judgment against debtors

The doctrine of mitigation of damages prevents a party from recovering for damages resulting from a breach of contract that could be avoided by reasonable efforts on the part of the plaintiff. Great Am. Ins. Co. v. N. Austin Mun. Utility Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995). In other words, where a party is entitled to the benefits of a contract and can save himself from the damages resulting from its breach at a trifling expense or with reasonable exertions, it is his duty to incur such expense and make such exertions. Id. (quoting Walker v. Salt Flat Water Co., 96 S.W.2d 231, 232 (Tex. 1936)). Although an injured party is required to exercise reasonable efforts to minimize damages, it is not required to mitigate its losses "by accepting an arrangement with the repudiator if that is made conditional on [its] surrender of [its] rights under the repudiated contract." Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 135 (Tex. App.-Houston [14th Dist.] 2000, pet. dism'd) (quoting Publicker Chemical Corp. v. Belcher Oil Co., 792 F.2d 482, 488 (5th Cir. 1986)).

Here, the Williams parties, as the breaching parties, had the burden of proving that damages could have been mitigated. See Copenhaver v. Berryman, 602 S.W.2d 540, 544 (Tex. App.-Corpus Christi 1980, writ ref'd n.r.e.). The Williams parties base their failure to mitigate affirmative defense on testimony from Donald Williams, who found a buyer who was willing to pay "approximately $1,400,000" for one of the parcels at issue, but the Bank refused to give Williams its permission for the sale. If the Bank accepted this side arrangement with the Williams parties, it would have required the Bank to surrender its rights and remedies under the promissory notes, as well as the Agreement with regard to this particular parcel. Because the notes were in default, and the Williams parties failed to pay their indebtedness by June 7, 2011, the Bank was not required to mitigate its damages by forgoing its rights and remedies under the notes and the Agreement. See Cook Composites, 15 S.W.3d at 135. Without other evidence that damages could have been mitigated, the Williams parties failed to raise a question of fact on the Bank's failure to mitigate.[3]

ELEMENTS CREDITOR HAS TO PROVE WHEN SUING ON PROMISSORY NOTE

To recover a debt due and owing under a promissory note, a party must establish that it is the legal holder of an existing note, the debtor's execution of the note, and that an outstanding balance is due and owing. Austin v. Countrywide Homes Loans, 261 S.W.3d 68, 72 (Tex. App.-Houston [1st Dist.] 2008, pet. denied).

SOURCE: CORPUS CHRISTI-EDINBURG COURT OF APPEALS - No. 13-12-00704-CV - 1/16/2014 - Williams v. Compass Bank (creditor can't be forced into short sale under duty-to-mitigate-damages doctrine and give up its claim).

Footnote 3: We also note that the Bank had a right under the promissory notes to foreclose on the properties prior to the Agreement reached in 2011 because the Williams parties were in default. The Agreement, by itself, is further conclusive proof of the Bank's attempt to exercise reasonable efforts to minimize damages by forbearing its collection efforts and allowing the Williams parties to pay back its indebtedness.  

Discretionary nature of attorney fee awards in declaratory judgment actions

Fee Awards under the Texas DJA

Under the Uniform Declaratory Judgments Act, "the court may award costs and reasonable and necessary attorney's fees as are equitable and just." TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008). A grant or denial of attorney's fees in a declaratory judgment action lies within the sound discretion of the trial court. Oake v. Collin Cnty., 692 S.W.2d 454, 455 (Tex. 1985). The court's judgment will not be reversed on appeal absent a clear showing that it abused its discretion. Id.; A & L Eng'g & Consulting, Inc. v. Shiloh Apollo Plaza, Inc., 315 S.W.3d 928, 930 (Tex. App.-Dallas 2010, no pet.).

SOURCE:  FIFTH COURT OF APPEALS IN DALLAS - 05-11-01425-CV - 1/6/2014

Here, the parties stipulated to the amounts for reasonable and necessary attorney's fees through trial and if the case is appealed. Based on our resolution of Wells Fargo's appellate issues and this opinion affirming the trial court's judgment, we cannot conclude the trial court abused its discretion by awarding Leath his fees. We overrule Wells Fargo's fourth issue.

CASE: WELLS FARGO BANK, NA v. Leath, Tex: Court of Appeals, 5th Dist. 2014

Recovery under the Texas Declaratory Judgments Act in the presence of other claims 

In this case, all parties sought declaratory relief with regard to the construction and interpretation of the various agreements. Section 37.009 allows a trial court to award attorneys' fees in any declaratory judgment proceeding. TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008). Hagee contends that the declaratory relief was sought simply to recover fees that would not otherwise be recoverable in relation to the other claims that were asserted. In this case, however, the declaratory relief was not sought simply for that purpose. Instead, the interpretation of the release language in the CSA was a crucial component of the claims asserted by both parties, and the declaratory relief narrowed the issues for trial.

SOURCE: FOURTH COURT OF APPEALS IN SAN ANTONIO - No. 04-12-00434-CV - 1/22/2014

Effect of Release of Judgment on pending appeal

RELEASE BY JUDGMENT CREDITOR MOOTS APPEAL 

Appeal cannot proceed after appellee files release of judgment. Houston Court of Appeal issues dismissal order. 

Appellant R. F. Bearden appeals from a judgment in favor of appellee Walton Houston Galleria Office, L.P. On November 21, 2013, appellee filed a release of judgment, which provides:

Plaintiff WALTON HOUSTON GALLERIA, L.P. hereby Releases, Relinquishes, and Discharges the Final Judgment signed by the Court in this case on April 17, 2013 ("judgment"), which judgment was in favor of the Plaintiff and against the Defendant R.F. BEARDEN, and Plaintiff WALTON HOUSTON GALLERIA, L.P. hereby Releases, Acquits, and Discharges the Defendant R.F. BEARDEN from that judgment.

On December 3, 2013, appellee filed a motion to dismiss the appeal as moot. "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).

Because appellee unconditionally released the judgment, we do not have jurisdiction over appellant's appeal. See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 392 (Tex. 2000).

Appellant argues that this court has jurisdiction over his appeal because the judgment is void and therefore subject to appeal. See State ex rel. Latty v. Owens, 907 S.W.2d 484, 486 (Tex. 1995). However, a party affected by void judicial action need not appeal. State ex rel Latty v. Owens, 907 S.W.2d 484, 486 (Tex.1995). If the judgment is void, it cannot be enforced against appellant, just as it cannot be enforced due to appellee's release. See Custom Corporates, Inc. v. Sec. Storage, Inc., 207 S.W.3d 835, 837 (Tex. App.-Houston [14th Dist.] 2006, no pet.). Even if this court had jurisdiction over appellant's appeal and determined the judgment is void, the result to appellant is the same.

Accordingly, the appeal is dismissed.

SOURCE: HOUSTON COURT OF APPEALS - 14-13-00578-CV - 1/9/2014 Bearden v. Walton Houston Galleria Office LP

When is a lien filed in the county real estate records presumed fraudulent under the Texas Government Code?

WHEN IS A LIEN PRESUMED FRAUDULENT PER STATUTE? 

Pursuant to Section 51.901 of the Government Code, a document is "presumed" to be fraudulent if:

[T]he document or instrument purports to create a lien or assert a claim against real or personal property or an interest in real or personal property and:

(A) is not a document or instrument provided for by the constitution or law of this state or of the United States;
(B) is not created by implied or express consent or agreement of the obligor, debtor, or the owner of the real or personal property or an interest in the real or personal property, if required under the laws of this state, or by implied or express consent or agreement of an agent, fiduciary, or other representative of that person; or
(C) is not an equitable, constructive, or other lien imposed by a court with jurisdiction created or established under the constitution or laws of this state or of the United States.

TEX. GOV'T CODE ANN. § 51.901(c)(2) (West 2013).

A trial court may presume a document is fraudulent only if it makes one positive finding and three negative findings about the document; if the document is provided for by constitution or statute, created by agreement, or imposed by a court, then it is not "presumed fraudulent" under section 51.901(c)(2). See id.; In re Hai Quang La, No. 02-13-00110-CV, 2013 WL 5651746, at *3 (Tex. App.-Fort Worth Oct. 17, 2013, no pet. h.).

A trial court may base its finding solely on its review of the document itself and without hearing any testimonial evidence. TEX. GOV'T CODE ANN. § 51.903(c) (West 2013). A trial court may review the document ex parte and without delay or notice of any kind, but the trial court may make no finding as to any underlying claim. Id. § 51.903(c), (g); In re Purported Liens or Claims Against Samshi Homes, L.L.C., 321 S.W.3d 665, 667 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (holding that trial court may not rule on validity of underlying lien). The trial court also may not rule on any substantive evidentiary claim. Samshi Homes, 321 S.W.3d at 668.

A document filed in the form of a mechanic's lien is "provided for by the . . . laws of this state" and thus cannot be presumed to be fraudulent under section 51.901(c)(2)(A) of the Government Code. Id. at 667-68; see also David Powers Homes, 355 S.W.3d at 339 (discussing and applying holding of Samshi Homes).

SOURCE: HOUSTON COURT OF APPEALS - 01-13-00509-CV - 1/14/2014

Texas Government Code authorizes action to attack fraudulent lien

LIEN NOT PRESUMPTIVELY FRAUDULENT HERE 

Cardenas notified the Wilsons of his intent to file a mechanic's lien on Wilson's truck. Article 16, section 37 of the Texas Constitution and Chapter 53 of the Texas Property Code both provide a legal basis for a mechanic's lien. TEX. CONST. art. XVI, § 37 (West 1993); TEX. PROP. CODE ANN. Ch. 53 (West 2007). Cardenas' document is provided for by the laws of Texas and is thus not presumed to be fraudulent. See Samshi Homes, 321 S.W.3d at 667-68. The Wilsons respond that they adduced proof that Cardenas forged the repair authorization. The Wilsons' proof, however, does not refute the validity of a lien for a mechanical repair under Texas law, but rather attacks the merit of the underlying claim for payment for the repair.

Under the fraudulent lien statute, the trial court does not rule on the validity of the underlying claim creating the lien or rule on any substantive evidentiary claim. See id. at 667-68.

Conclusion

We hold that Cardenas' lien is not presumed fraudulent as defined by section 51.901 of the Texas Government Code. We therefore reverse and vacate the trial court's orders removing the lien and releasing the truck to the Wilsons.

SOURCE: HOUSTON COURT OF APPEALS - 01-13-00509-CV - 1/14/2014 - Cardenas v Wilson

Related earlier post: Remedy for fraudulent lien under the Texas Government Code

Mootness exception: Attorney fee claim may survive even though underlying dispute becomes moot

WHEN THE MOOTNESS DOCTRINE DISPOSES OF THE DISPUTE THAT SPURRED THE LAWSUIT, BUT NOT OF THE PLAINTIFF'S CLAIM FOR ATTORNEY FEES 

A court cannot decide a case that becomes moot during the pendency of the litigation. Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012). A case is moot if "there has ceased to exist a justiciable controversy between the parties." Id. In a declaratory judgment action, a justiciable controversy exists concerning the rights and status of the parties when the controversy will be resolved by the declaration sought. Robinson v. Alief Indep. Sch. Dist., 298 S.W.3d 321, 324 (Tex. App.-Houston [14th Dist.] 2009, pet. denied). But no justiciable controversy exists if the issues presented are no longer "live" or if the parties lack a legally cognizable interest in the outcome. Heckman, 369 S.W.3d at 162.

However, a "live" issue in controversy exists when there is a question about whether a party has a legally cognizable interest in recovering attorney's fees and costs. Camarena v. Tex. Emp't Comm'n, 754 S.W.2d 149, 151 (Tex. 1988); see also Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 643 (Tex. 2005) (holding that party's interest in obtaining attorney's fees "breathe[d] life" into appeal of declaratory judgment where underlying claims had become moot).

SOURCE: SOURCE: TYLER COURT OF APPEALS - 12-13-00231-CV - 1/15/2014 Pate v. Edwards (public employment dispute with declaratory judgment claim alleging violation of state constitutional rights and seeking injunctive relief).

PARTY MAY STILL SEEK ATTORNEY'S FEES  UNDER SOME CIRCUMSTANCES WHEN CLAIM BECOMES MOOT:  DJA AUTHORIZES SUCH FEES AND DOES NOT LIMIT THEM PREVAILING PLAINTIFFS 

The Uniform Declaratory Judgments Act authorizes an award of attorney's fees on an equitable basis. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008). Thus, in a declaratory judgment action, a party need not "substantially prevail" in the litigation to receive attorney's fees. Barshop v. Medina County Underground Water Conservation District 925 S.W.2d 618, 637-38 (Tex. 1996). Instead, a trial court may award just and equitable attorney's fees to a nonprevailing party. Texas A&M Univ.-Kingsville v. Lawson, 127 S.W.3d 866, 874-75 (Tex. App.-Austin 2004, pet. denied).

Even though Edwards's underlying constitutional claims are moot, her claim for attorney's fees is a separate controversy that persists. See Camarena, 754 S.W.2d at 151. Further, Edwards obtained a ruling in her favor before the case was rendered moot. The trial court awarded her a temporary restraining order and a temporary injunction. Because there is a question about whether Edwards has a legally cognizable interest in recovering attorney's fees and costs, her claim for attorney's fees is a live controversy and not moot. See id.

We overrule Pate's sole issue as to Edwards's claim for attorney's fees.

SOURCE: Pate v. Edwards, Tex: Court of Appeals (Tyler), 12th Dist. 2014