Fourth Court of Appeals Blog

Robert Clore's weekly update of significant opinions from the Fourth Court of Appeals in San Antonio, Texas.

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February 3, 2016 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

This week’s opinion involves the loss of 1,695 cases of masa due to leaking plastic bags. As you may know, masa is used to make tortillas and tamales. Suffice it to say, that is many, many tortillas and tamales that we will never get to eat.  

In this unfortunate context, the Fourth Court of Appeals considered the applicability of Section 82.003 of the Texas Civil Practice and Remedies Code, which protects non-manufacturing sellers from liability, to the plaintiff’s implied warranty claims.  

1. When is a Claim for Breach of Implied Warranty a Products Liability Claim for Purposes of Tex. Civ. Prac. & Rem. Code § 82.003?

Lopez v. Huron, No. 04-15-00327-CV (Tex. App.—San Antonio, Feb. 3, 2016, no pet. h.). Author:                        Marion, C.J.

Panel:                          Marion, C.J., Martinez, J., Pulliam, J.

Originating Court:        150th District Court, Bexar County, Texas.

Trial Judge:                  Stryker, J.                                              

Holding:                        Affirmed judgment in favor of the plaintiff.                                           

Adam Huron d/b/a Adam’s Mexican Food Products is in the business of selling masa, which it packages in plastic bags. In 2010, Erick Lopez agreed to supply Huron with plastic bags. Lopez ordered bags shipped from A.J. Plastics, Inc., which in turn shipped the bags directly to Huron.

In November, 2011, one of Huron’s customers returned a shipment of 1,695 cases of masa because the bags were breaking at the seam and the masa had spoiled. Huron then sued Lopez and A.J. Plastics for breach of the implied warranties of merchantability and fitness for a particular purpose.

A jury awarded Huron $16,199.07 in damages after finding that Lopez breached the implied warranties. The jury apportioned twenty percent responsibility on Lopez and eighty percent on A.J. Plastics.

On appeal, Lopez urged that as a nonmanufacturing seller, he was not liable for harm caused by the product pursuant to Tex. Civ. Prac. & Rem. Code § 82.003. Lopez further maintained that none of the exceptions in Section 82.003 applied.

Huron responded that Section 82.003 was inapplicable because it only applies to products liability actions, and Lopez’s breach of implied warranty claims were based in contract, not tort.

The court of appeals agreed that Section 82.003 only applies to products liability claims, reminding that “Chapter 82 of the [Texas] Civil Practice and Remedies Code addresses products liability.” Fields v. Klatt Hardware & Lumber, Inc., 374 S.W.3d 543, 546 (Tex. App.—San Antonio 2012, no pet.).

The court of appeals further concluded that Huron’s implied warranties claims were not products liability actions. A “products liability action” must arise “out of personal injury, death, or property damages”. Tex. Civ. Prac. & Rem. Code § 82.001(2). To meet this definition, the claim must sound in tort, not in contract.

The court noted that a breach of implied warranty can be either a contract or tort claim, and that the economic-loss rule applies in determining which it is. JCW Electronics, Inc. v. Garza, 257 S.W.3d 701, 704-05 (Tex. 2008). “[W]hen the damages are purely economic, the claim sounds in contract.” Id. at 705. “[B]ut a breach of implied warranty claim alleging damages for death or personal injury sounds in tort.” Id. Further, an implied warranty claim sounds in contract if the only injury is to the defective product itself as opposed to other property. Mid Continent Aircraft Corp. v. Curry Cty. Spraying Serv., Inc., 572 S.W.2d 308, 313 (Tex. 1978); see also Equistar Chemicals, L.P. v. Dresser-Rand Co., 240 S.W.3d 864, 867 (Tex. 2007).

The damages in this case were for economic loss to the final product, which was the packaged masa. The plastic bags were a component of the final product, and thus the masa did not constitute “other property.”  Because Huron’s claim did not seek “damages arising out of personal injury, death, or property damage” under the particular meaning that phrase has acquired, Huron’s claim was not a products liability action. Accordingly, Section 82.003 did not preclude liability against Lopez.

The court of appeals noted that Huron was entitled to recover damages to the masa as an indirect consequential loss. Nobility Homes of Tex., Inc. v. Shivers, 557 S.W.2d 77, 78 (Tex. 1977)

The court also upheld an award of attorney’s fees despite the failure of the plaintiff’s attorney to segregate attorney’s fees. Segregation is not required when the work for which attorney’s fees are not recoverable is intertwined with the work for which attorney’s fees are recoverable. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313–14 (Tex. 2006).

OPINION  APPELLANT’S BRIEF APPELLEE’S BRIEF  

APPELLEE’S REPLY BRIEF

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January 27, 2016 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

A permissive interlocutory appeal under Section 51.014(d) of the Texas Civil Practice and Remedies Code can be an efficient way to manage a case under appropriate circumstances. If there is a controlling issue of law that should be decided early on, why wait until an appeal from a final judgment to resolve the issue?

This week’s opinion from the Fourth Court of Appeals discusses the strict requirements for a permissive appeal. The opinion demonstrates that it is probably a good idea to bring appellate counsel on board at the motion stage if you are contemplating such an appeal.

1. Permissive Appeals from Interlocutory Judgments.

City of San Antonio v. Harrall, No. 04-15-00286-CV (Tex. App.—San Antonio, Jan. 27, 2016, no pet. h.). Author:                         Pulliam, J. (majority); Marion, C.J. (dissenting).

Panel:                           Marion, C.J., Barnard, J., Pulliam, J.

Originating Court:         County Court at Law No. 2, Bexar County, Texas.

Trial Judge:                   Wolff, J.                                          

Holding:                         Dismissed permissive appeal for lack of jurisdiction.                                           

The City of San Antonio, acting by and through CPS Energy, filed suit against Tommy Harral Construction, Inc. alleging damages in connection with excavation work. The City filed a motion for partial summary judgment as to its request for declaratory relief concerning interpretation of an excavator’s obligations under the Texas Utilities Code.

Without stating the basis for its ruling, the trial court signed an order denying the motion for summary judgment. In the same order, the trial court permitted interlocutory appeal for the Fourth Court of Appeals to determine “whether under the Texas Utilities Code and Texas Administrative Code a general contractor’s notification prior to excavation by a subcontractor relieves that subcontractor of the statutory obligation to separately give notice prior to excavating.”

As the court of appeals observed, permissive appeals are strictly construed, as Section 51.014 only “provides a narrow exception to the general rule that only final judgments are appealable.” CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011); Tex. A & M Univ. Sys. v. Koseglu, 223 S.W.3d 835, 841 (Tex. 2007).

The trial court’s order properly indicated (1) the controlling issue of law requested for determination; (2) that there was substantial ground for difference of opinion; and (3) an immediate appeal may materially advance the ultimate termination of litigation.

The court of appeals rejected the permissive appeal in this case, however, because the order denying the motion and granting permissive appeal did not affirmatively state the trial court’s substantive ruling on the specific legal issue presented. The court of appeals refused to infer that the denial of the summary judgment meant that it found against the City on the issue raised. According to the court of appeals, there were several possible bases for the denial of summary judgment.

“It does not matter that the trial court’s order attempts to identify the controlling issue if the order does not show that the trial court made a substantive ruling on that controlling question of law.” Great Amer. E & S Ins. Co. v. Lapolla Ind., Inc., 2014 WL 2895770 at *1 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (mem. op.).

Further, the “controlling legal issue” presented to the trial court varied slightly from the issue presented on appeal, and thus was not a proper question to be resolved in a permissive appeal. Accordingly, the court of appeals dismissed the permissive appeal for lack of jurisdiction.

Chief Justice Marion disagreed that the trial court did not rule on the controlling issue. Reading the motion for summary judgment broadly, the dissent opined that the motion sought only a single ground for relief. The dissent thus concluded the trial court’s denial of the motion necessarily constituted a ruling on the “controlling legal issue” presented.

OPINION  DISSENTING OPINION  PETITION FOR PERMISSIVE APPEAL

RESPONSE TO PETITION FOR PERMISSIVE APPEAL  APPELLANT’S BRIEF

APPELLEE’S BRIEF  AMENDED APPELLEE’S BRIEF

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January 20, 2016 Opinions.

There were no particularly significant civil opinions handed down last week by the Fourth Court of Appeals. However, the Texas Office of Court Administration recently issued a pre-release of its Annual Statistical Report for appellate courts for fiscal year 2015. This provides an opportunity to discuss statistics from the Fourth Court.

Perhaps the most notable change from last year was the considerable increase in the number of petitions for review granted by the Texas Supreme Court from the Fourth Court of Appeals. While only 7.1 % of petitions granted last year originated in the Fourth, that number rose to 17.3% this year. This was the second highest percentage among the courts of appeals, with the Third Court of Appeals (Austin) coming in first. In fact, the Austin and San Antonio Courts of Appeals accounted for more than 1/3 of all cases in which petitions for review were granted by the Texas Supreme Court.

Keep in mind that on a statewide basis, the likelihood of having your petition for review granted by the Texas Supreme Court is approximately 10%.

The Fourth Court remains an efficient judicial body. The average time between filing of a civil appeal and disposition was 6.1 months, second best among the courts of appeals. Similarly, the average time between submission of the case and disposition was 1 month, fourth best among the courts of appeals.

If you are interested in viewing more statistics from Texas courts, the Office of Court Administration’s annual statistical report can be accessed at http://www.txcourts.gov/media/1135708/2015-Annual-Statistical-Report-Pre-Release-Appellate-Section.pdf.

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January 13, 2016 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

Last week the 4th Court of Appeals handed down no significant civil opinions outside the family law context. This week, the court issued an opinion concerning the election of remedies provision of the Texas Tort Claims Act (“TTCA”). The opinion underscores the need for plaintiffs to exercise caution when determining the parties to name in a suit involving a governmental entity and its employees.

Remember that under Molina v. Alvarado, 463 S.W.3d 867, 871 (Tex. 2015), if the plaintiff is not sure when filing suit whether the employee was acting within the scope of employment, “the prudent choice [is] to sue [the employee], and await a factual resolution of that question.” The governmental entity can be later added under Section 101.106(f). By contrast, if the governmental entity is named first, and not the employee, this is considered an irrevocable decision not to sue the employee.

1. Texas Tort Claims Act and Election of Remedies.

Donohue v. Dominguez, No. 04-15-00068-CV (Tex. App.—San Antonio, Jan. 13, 2016, no pet. h.). Author:                        Angelini, J.  

Panel:                           Angelini, J., Barnard, J., Alvarez, J.

Originating Court:      57th District Court, Bexar County, Texas.

Trial Judge:                  Salinas, J.

Holding:                       Affirmed the dismissal of claims brought against two police officers.

John Donohue sued, among others, the San Antonio Police Department and two officers in connection with injuries sustained during an allegedly improper arrest. Donohue asserted claims of false imprisonment, assault, and aggravated assault against the officers, and maintained the claims were brought under chapters 20, 22, and 39 of the Texas Penal Code. Donohue also alleged violations under article, 1, sections 9, 13, and 19 of the Texas Constitution.

The officers moved to dismiss under the TTCA, and the trial court granted the motion. Donohue then nonsuited his claims against the officers in their official capacities. An interlocutory appeal of the dismissal ensued.

Section 101.106(f) of the Texas Civil Practice and Remedies Code provides:

If a suit is filed against an employee of a governmental unit based on conduct within the general scope of that employee's employment and if it could have been brought under this chapter against the governmental unit, the suit is considered to be against the employee in the employee's official capacity only. On the employee's motion, the suit against the employee shall be dismissed unless the plaintiff files amended pleadings dismissing the employee and naming the governmental unit as defendant on or before the 30th day after the date the motion is filed.

This section forces the plaintiff “to decide at the outset whether an employee acted independently and is thus solely liable, or acted within the general scope of his or her employment such that the governmental unit is vicariously liable, thereby reducing the resources that the government and its employees must use in defending redundant litigation and alternative theories of recovery.’” City of Webster v. Myers, 360 S.W.3d 51, 57 (Tex. App.—Houston [1st Dist.] 2011, pet. denied) (quoting Mission Consol. Ind. Sch. Dist. v. Garcia, 253 S.W.3d 653, 657 (Tex. 2008)).

Here, Donohue failed to make the election, and named both the police department and its officers (in both their individual and official capacities). He declined to dismiss the officers as required by section 101.106(f), maintaining that his claims for violations of the Penal Code and the Texas Constitution arise outside the purview of the TTCA.

The 4th Court of Appeals disagreed. First, the court of appeals explained that the Texas Penal Code does not create a civil cause of action for criminal violations. A party may allege civil assault, but it is still a tort and is not governed by the Penal Code. Further, even though the TTCA does not waive immunity for intentional torts, this does not mean that the claims are not subject to the TTCA.

“Because the Tort Claims Act is the only, albeit limited, avenue for common-law recovery against the government, all tort theories alleged against a governmental unit, whether it is sued alone or together with its employees, are assumed to be under the Tort Claims Act for purposes of section 101.106.” Garcia, 253 S.W.3d at 659 (emphasis added). Thus, even though the TTCA did not waive immunity for the intentional tort claims brought by Donohue (i.e., false imprisonment, assault, and aggravated assault), they were still subject to the TTCA and section 101.106(f).

The court likewise concluded that Donohue’s claims under the Texas Constitution did not remove him from the requirements of the TTCA. Generally, there is no private cause of action against a governmental entity or its officials for money damages relating to alleged violations of Texas constitutional rights. City of Arlington v. Randall, 301 S.W.3d 896, 906-07 (Tex. App.—Fort Worth 2009, pet. denied). “[O]nly if the language of the specific provisions involved clearly impl[y]” a private action for damages does the Texas Constitution create one.” Brown v. De La Cruz, 156 S.W.3d 560, 563 (Tex. 2004). None of the constitutional provisions asserted in this case implied a private right of action for damages against the governmental unit that would exist apart from the TTCA.

The court of appeals also found that the officers were acting within the scope of employment for purposes of section 101.106(f), inasmuch as Donohue’s claims were premised on the allegedly improper acts of the officers in the course of making an arrest. Donohue did not allege an independent course of conduct by the officers intended to further their own purposes only and thereby not intended to serve any purpose of the police department. See Laverie v. Wetherbe, No. 07-13-00348-CV, 2015 WL 739670, at *4 (Tex. App.—Amarillo Feb. 20, 2015, pet. filed) (holding that claims were within the general scope of employment as provided by section 101.106 because the record did not show the government employee was, by her actions, serving her own purposes only and not any purpose of her employer).

Having determined that section 101.106 applied to Donohue’s claims, and that the claims against the officers were required to be dismissed, the court of appeals upheld the trial court’s dismissal of the claims against the officers.

OPINION  APPELLANT'S BRIEF  APPELLEES' BRIEF

APPELLANT'S REPLY BRIEF

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December 23, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

Happy holidays! On December 23rd and 30th, the Fourth Court of Appeals delivered only a handful of opinions. Outside the context of family law, the only particularly noteworthy case involved a trespass to try title action, and the question of whether a signature on a deed that omits the signatory's capacity as a trustee is effective to convey an interest held in trust.

1. Trespass to Try Title and the Failure to Sign a Deed in the Capacity of Trustee.

West 17th Resources, LLC v. Pawelek, No. 04-14-00668-CV (Tex. App.—San Antonio, Dec. 23, 2015, no pet. h.). Author:                         Chapa, J. Panel:                           Martinez, J., Alvarez, J., Chapa, J. Originating Court:         81st District Court, Karnes County, Texas. Trial Judge:                  Rayes,J.                                                     Holding:           Affirmed summary judgment in favor of Appellees.                                            

This is a property dispute over 290 acres in Karnes County. Thomas Mika and Pamela Wolf claimed an interest in the property through their mother, Irene Mika. Irene owned an undivided 1/6th interest individually and an undivided 1/10th interest as trustee for her benefit during her lifetime. Upon her death, the 1/10th interest would vest in Thomas and Pamela in equal shares.

In 1994, Irene and the remaining owners of the property executed a deed conveying the property to Lucian and Carleen Pawelek. Irene signed her name without designating whether she was signing "individually" or "as trustee."

After a dispute over mineral rights, Thomas and Pamela brought a trespass to try title claim against the Paweleks. The trial court granted summary judgment in favor of the Paweleks, finding that Irene conveyed them the 1/10th interest held in trust despite the lack of disclosure of her capacity in the 1994 deed.

According to the 4th court of appeals, just because a grantor fails to disclose her capacity as trustee in a deed does not mean that the deed does not convey the interest held by the grantor in trust. The court construed the deed as unambiguous in that it conveyed all of the 290 acres. "Construing Irene's failure to specify her capacity as an implied intent to reserve the 1/10's interest would ... conflict with the deed's plain, unambiguous language."

The court also upheld summary judgment against Thomas and Pamela on the ground that the Paweleks adversely possessed Thomas and Pamela's 1/10th interest under the five-year statute of limitations. Tex. Civ. Prac. & Rem. Code § 16.025(a). To adversely possess property under the five-year statute, the adverse possessor must claim title under a recorded deed that purports to convey the property claimed by adverse possession. Cass v. Green, 224 S.W. 938, 939 (Tex. Civ. App.—Austin 1920, no writ). Here, the deed was recorded and purported to convey the entire subject property.

The opinion does not discuss Appellants' argument that their mother could not convey any more than her life estate, leaving Appellants with the 1/10th interest upon her death.

OPINION  APPELLANTS' BRIEF  APPELLEES' BRIEF  

APPELLANTS' REPLY BRIEF

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December 9, 2015.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

This past week's opinions from the  Fourth Court of Appeals include the granting of a petition for writ of mandamus involving mandatory venue.

1. Mandamus and Mandatory Venue.

In re Atlantic Sounding Co., Inc, No. 04-15-00407-CV (Tex. App.—San Antonio, Dec. 9, 2015, no pet. h.). Author:                         Barnard, J.  

Panel:                           Barnard, J., Alvarez, J., Chapa, J.

Originating Court:       229th District Court, Starr County, Texas.

Trial Judge:                  Garza, J.

Holding:                        Mandamus conditionally granted.

In this lawsuit under the Jones Act, the 4th Court of Appeals granted mandamus from the denial of a motion to transfer venue based on a mandatory venue provision. Although mandamus is an extraordinary remedy, it is available from a venue determination involving a mandatory venue provision without consideration for the adequacy of an appellate remedy. In re Missouri Pac. R.R. Co., 970 S.W.2d 47, 50 (Tex. App.—Tyler 1998, orig. proceeding).

Juan Gonzalez sued Atlantic Sounding Company, Inc. in Starr County after sustaining injuries on a vessel on the Mississippi River in the inland waters of Louisiana.

Venue under the Jones Act is determined under section 15.0181 of the Civil Practice and Remedies Code. Specifically, under section 15.0181(e), when the accident occurs in inland waters outside Texas, venue is mandatory: (1) in the county of the defendant’s principal office in Texas, if the office is located in a coastal county; (2) in Harris County; (3) in Galveston County; or, (4) “if the defendant does not have a principal office in this state located in a coastal county, in the county where the plaintiff resided at the time the cause of action accrued.”

Gonzalez alleged mandatory venue in Starr County because he was a resident of Starr County and none of the remaining provisions in section 15.0181(e) applied. Gonzalez claimed that Atlantic did not maintain a regular place of business in Texas.

Atlantic denied Gonzalez’s venue facts and filed a motion to transfer venue to Harris County. According to Atlantic, it has an office in Harris County, and Harris County is a “coastal county” as defined by Section 15.0181(a)(1).

Once a defendant challenges a venue fact, the plaintiff then has the burden of providing prima facie proof to support venue in the county of suit. Tex. R. Civ. P. 87. Prima facie proof is made “when the venue facts are properly pleaded and an affidavit, and any duly proved attachments to the affidavit, are filed fully and specifically setting forth the facts supporting such pleading.” Id.

Here, Gonzalez claimed he was unable to find evidence of an Atlantic office in Harris County, and that documents produced in discovery demonstrated Atlantic’s principal office is in New Jersey. The 4th Court of Appeals found that plaintiff’s inability to find an Atlantic office in Harris County, and the fact that Atlantic had an office in New Jersey, did not constitute prima facie evidence that Atlantic did not also maintain a principal place of business in Harris County, Texas. In re Missouri Pac. R.R. Co., 970 S.W.2d at 50 (a company may have more than one principal office).

Further, Atlantic produced affidavit testimony from its risk manager that Atlantic maintains a regular place of business in Harris County, which is its only permanent office in Texas. The Harris County office is comprised of twenty-eight permanent employees, including significant decision makers.

Because the plaintiff failed to meet his prima facie burden to establish venue in Starr County, and Atlantic presented prima face proof that venue was mandatory in Harris County, the trial court abused its discretion in denying Atlantic’s motion to transfer venue.

OPINION

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November 25, 2015.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

Last week’s blog was dormant in light of a complex Appellee’s Brief I filed in the Fourth Court of Appeals in an employment case involving the Bexar County Civil Service Commission. If you have interest, I invite you to access the brief.

On November 25th, the Fourth Court handed down a particularly noteworthy opinion in which it overturned a nearly $100 million dollar verdict involving corporate breach of fiduciary duty. The opinion should encourage plaintiffs to identify, with as much specificity as possible, every cognizable claim in their pleadings to avoid waiver of a theory of recovery.  

1. Corporate Breach of Fiduciary Duty and Specificity in Pleadings.

Huff Energy Fund, L.P. v. Longview Energy Co., No. 04-12-00630-CV (Tex. App.—San Antonio, Nov. 25, 2015, no pet. h.). Author:                         Marion, C.J. (majority);   Barnard, J. (concurring);                                                Chapa, J. (dissenting); Alvarez, J. (concurrring and                                             dissenting 

Panel:                           En Banc.

Originating Court:        365th District Court, Zavala County, Texas.

Trial Judge:                  Abascal, J.

Holding:                        Reversed and rendered a take-nothing judgment.

In this divided opinion, the 4th Court of Appeals overturned a nearly $100 million dollar verdict based on (1) insufficient evidence of breach of fiduciary duty by a corporate director and (2) the trial court’s improper submission of a “competition” breach of fiduciary claim which was not adequately pled.

Longview Energy Company sought to acquire interests in the Eagle Ford Shale. The Huff Energy Fund purchased stock in Longview, and appointed Bill Huff and Rick D’Angelo to Longview’s board of directors.

During a meeting with the board of directors for Longview, D’Angelo and Huff indicated they would not support an investment in Eagle Ford trend acreage. Three days before the meeting, they entered into a contract to purchase acreage which Longview was considering buying through the same brokers. The contract was not mentioned during Longview’s meeting of the board of directors.

Huff Energy ultimately purchase 44,698 acres of Eagle Ford Shale for its own use, despite the fact that Longview was considering purchasing the same acreage. Longview then sued the Huff Energy Fund, Mr. Huff, and Mr. D’Angelo for, inter alia, breach of fiduciary duty for (1) usurping a corporate opportunity and (2) engaging in competition with Longview.

As to the taking of a corporate opportunity, the court of appeals found no evidence that Longview had an “expectancy” in the business opportunity. Whether a director of a corporation is duty bound to acquire a business opportunity for the corporation, or to refrain from acquiring the opportunity for himself, depends upon whether the corporation has an interest, actual or in expectancy.

Longview did not have an actual existing property right in the Eagle Ford opportunity. Further, the evidence was insufficient to show an expectancy. The fact that Longview wanted to invest in the Eagle Ford Shale, spent time and money investigating investment opportunities in Eagle Ford property, and entered into discussions with land brokers about the availability of property did not create an expectancy. Rather, it showed only that Longview had been, “in a general way, ‘negotiating for and endeavoring to purchase’ the interests involved.” According to the court, “[t]o characterize this concept, strategy, and interest in investing as an “expectancy” would give Longview “a virtual monopoly of extensive fields into which its officers and directors were forever precluded from entering.”

An opportunity must be something more than a desire to invest—especially when the investment is in an area as large as the Eagle Ford Shale. Further, there was also no evidence that the directors’ purchase of the property hindered or defeated Longview’s plans and purposes in light of Longview’s non-specific strategy of having interest in investing in the Eagle Ford Shale.

The court of appeals also concluded that the judgment could not be supported by breach of fiduciary duty by competition because Longview failed to plead it as a separate cause of action and it was not tried by consent.

Although Longview argued it adequately pleaded the claim because “competition” was a “pervasive theme” in its petition, the fact that it was not labeled as a separate cause of action under the “Claims” section amounted to a waiver of the claim. According to the court, the plaintiff’s petition failed to give fair notice under Tex. R. Civ. P. 47(a). Further, the competition cause of action was not tried by consent because the defendants objected to the submission of the claim.

The court of appeals reversed and rendered a take-nothing judgment in light of the reversible error committed by the trial court in submitting the “competition” breach of fiduciary duty claim.

Among the various concurring and dissenting opinions, Justice Chapa observed that the court of appeals creates “a new ‘theme’-based standard of construing pleadings . . . when a party pleads facts constituting two similar, yet distinct causes of action, but pleads more facts in support of one than the other, no fair notice is given of the less prominently pled cause of action.” According to Justice Chapa, the majority’s analysis disregards Texas’ fair-notice standard.

�MAJORITY OPINION  J. BARNARD’S CONCURRING OPINION

J. CHAPA’S DISSENTING OPINION  

J. ALVAREZ’S DISSENTING AND CONCURRING OPINION

APPELLANT’S BRIEF (1)  APPELLANT’S BRIEF (2)

APPELLANT’S BRIEF (3)  APPELLEE’S BRIEF  APPELLANT’S REPLY BRIEF  

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November 18, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1. Notice of Default Judgment Hearings.

Templeton Mortgage Corp. v. Poenisch, No. 04-15-00041-CV (Tex. App.—San Antonio, Nov. 18, 2015, no pet. h.). Author:                         Barnard, C.J. Panel:                            Marion, C.J., Barnard, J., Alvarez, J. Originating Court:       216th District Court, Bexar County, Texas. Trial Judge:                   Palmer, J.

Texas Rule of Civil Procedure 245 requires forty-five days’ notice to parties of a first setting for trial in contested cases. Here, the appellant challenged a default judgment entered with less than forty-five days’ notice of the default hearing.

The underlying lawsuit involved a dispute over real property. The appellant urged the court of appeals to set aside default judgment on the basis that (1) it did not receive the full forty-five days’ notice under Rule 245 and (2) the certificate of service of the notice of hearing was facially invalid under Tex. R. Civ. P. 21(d).

The 4th Court of Appeals explained that the forty-five day notice provision is mandatory. Custom-Crete, Inc. v. K-Bar Servs., Inc., 82 S.W.3d 655, 659 (Tex. App.—San Antonio 2002, no pet.). Failure to give the notice, when required, results in a violation of fundamental due process. In re K.M.L., 443 S.W.3d 101, 119–20 (Tex. 2014); Custom-Crete, Inc., 82 S.W.3d at 659. However, notice under Rule 245 is waived if not properly preserved. See, e.g., Abend v. Fed. Nat’l Mortg. Ass’n, 466 S.W.3d 884, 885 (Tex. App.—Houston [14th Dist.] 2015, 04-15-00041-CV - 4 - no pet.); Stallworth v. Stallworth, 201 S.W.3d 338, 346 (Tex. App.—Dallas 2006, no pet.); Custom-Crete, Inc., 82 S.W.3d at 658; Padilla v. Comm’n for Lawyer Discipline, 87 S.W.3d 624, 626 (Tex. App.—San Antonio 2002, pet. denied).

The court of appeals found the appellant failed to preserve the Rule 245 notice issue. The appellant received notice seven days before the hearing, and was required to raise the argument before or during the hearing. Appellant did neither, and also failed to include the insufficient notice argument in its motion for new trial.

In any event, Rule 245 was inapplicable because the trial court struck appellant’s pleadings, and therefore, the case was not contested. Under Rule 245, noncontested cases, i.e., cases in which no answer is on file, may be tried or disposed of at any time whether set or not.

The appellant also challenged a defect in the certificate of service on the notice of the default hearing. The order setting hearing was signed on October 10th, yet the certificate of service was dated October 9th. The appellant, however, failed to explain how this violated its due process rights when it was undisputed that it received notice prior to the hearing.

The Texas Supreme Court has held that a default judgment is void with regard to defects in service when those defects are “so substantial that the defendant was not afforded due process.” PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 275 (Tex. 2012). Even when service is defective, if the defect is not of a type that deprives a party of the opportunity to be heard, then the defect is insufficient to support an attack on the judgment. Id.

Because appellant had notice of the hearing, the inconsistency in the certificate of service was not sufficient to deprive appellant of its due process rights. Accordingly, the court of appeals affirmed entry of default judgment.

OPINION APPELLANT'S BRIEF  APPELLEE'S BRIEF

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November 10, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1. Jurisdiction over Forcible Entry and Detainer When Title is in Dispute.

Harris v. Bank of America, No. 04-15-00371-CV (Tex. App.—San Antonio, Nov. 10, 2015, no pet. h.). Author:                         Marion, C.J. Panel:                          Marion, C.J., Barnard, J., Alvarez, J. Originating Court:        County Court at Law No. 5, Bexar County, Texas. Trial Judge:                  Rodriguez, J.

In this forcible detainer action, a home owner challenged jurisdiction where defects in the foreclosure process raised an issue regarding title.

The property at issue was sold in foreclosure. The home owner refused to vacate the premises, and the bank filed a forcible detainer lawsuit. The county court entered judgment of possession in favor of the bank.

On appeal, the home owner challenged the jurisdiction over the forcible detainer action in light of alleged title defects from the foreclosure sale. Title disputes such as the validity of a foreclosure sale may not be determined in a forcible detainer action, and must be brought in a separate suit. Shutter v. Wells Fargo Bank, N.A., 318 S.W.3d 467, 471 (Tex. App.—Dallas 2010, pet. dism’d w.o.j.).

The 4th Court of Appeals overruled the home owner’s jurisdictional challenge because, regardless of issues with the foreclosure sale, the deed of trust established a landlord and tenant-at-sufferance relationship between the parties. Schlichting v. Lehman Bros. Bank FSB, 346 S.W.3d 196, 199 (Tex. App.—Dallas 2011, pet. dism’d); Villalon v. Bank One, 176 S.W.3d 66, 71 (Tex. App.—Houston [1st Dist.] 2004, pet. denied). This provided an independent basis to determine the issue of immediate possession without addressing the propriety of foreclosure. Schlichting, 346 S.W.3d at 199; Villalon, 176 S.W.3d at 71.

The home owner also asserted that federal law preempted Texas forcible detainer law. The court of appeals found that because the home owner failed to plead preemption as an affirmative defense, he waived the preemption argument. Kelly v. Brown, 260 S.W.3d 212, 217 (Tex. App.—Dallas 2008, pet. denied); In re Marriage of Smith, 115 S.W.3d 126, 130-31 (Tex. App.—Texarkana 2003, pet. denied).

Accordingly, the judgment of possession in favor of the bank was affirmed.

OPINION  APPELLANT’S BRIEF  APPELLEE’S BRIEF

2. Proving Lack of Service of a Motion for Summary Judgment.

Giddings v. Curtis, No. 04-15-00102-CV (Tex. App.—San Antonio, Nov. 10, 2015, no pet. h.). Author:                         Alvarez, J. Panel:                          Martinez, J., Alvarez, J., Chapa, J. Originating Court:        73rd District Court, Bexar County, Texas. Trial Judge:                 Gabriel, Jr., J.

This opinion delivered by the 4th Court of Appeals discusses the evidentiary requirements for challenging summary judgment when the respondent claims lack of service of the motion.

The trial court granted a no-evidence motion for summary judgment disposing of a health care liability claim. Prior to the entry of summary judgment, Plaintiff’s counsel withdrew from the case. After Plaintiff failed to file a response or appear at the summary judgment hearing, the trial court granted summary judgment.

On appeal, Plaintiff asserted she did not receive notice of the hearing on the motion for summary judgment. As the court of appeals observed, a summary judgment respondent is entitled to notice of hearing, and lack of notice violates due process. Lewis v. Blake, 876 S.W.2d 314, 315 (Tex. 1994); Etheredge v. Hidden Valley Airpark Ass’n, Inc., 169 S.W.3d 378, 381 (Tex. App.—Fort Worth 2005, pet. denied).

Here, the defendant completed a certificate of service indicating the motion was mailed to the plaintiff. This constituted prima facie evidence of service. “In the absence of evidence to the contrary, the presumption has the force of a rule of law.” Cliff v. Huggins, 724 S.W.2d 778, 780 (Tex. 1987). The opposing party is then required to rebut the presumption with evidence showing a lack of notice.

Plaintiff failed to respond with evidence that she lacked notice, and thus failed to overcome the presumption of service. Without any evidence countering this presumption, the 4th Court of Appeals was required to affirm summary judgment.

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November 4, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

I was unable to update the blog last week due to a presentation I gave before the Corpus Christi Bar Association on the Texas Supreme Court Update. If you are interested in receiving the article I wrote in support of the presentation, please contact me. Now, on to this week’s opinion.

1. Challenging the Denial of a Motion to Compel Appraisal.

Hodge v. Kraft, No. 04-15-00056-CV (Tex. App.—San Antonio, Nov. 4, 2015, no pet. h.). Author:                         Angelini, J. Panel:                            Angelini, J., Martinez, J., Alvarez, J. Originating Court:        224th District Court, Bexar County, Texas. Trial Judge:                   Sakai, J. This was an attempted interlocutory appeal from the denial of a motion to compel appraisal and a motion to abate a lawsuit. The opinion suggests that mandamus, and not interlocutory appeal, is the only remedy from the denial of a motion to compel appraisal.

The underlying facts involved an employment agreement which, in the event of termination of the employee, included an option to repurchase a membership interest in a limited liability company.

Under the agreement, if the value of the membership interest could not be agreed upon, the parties were required to apply to the American Arbitration Association to appoint a single appraiser, who would then determine the fair market value of the membership interest. The determination would be binding.

Here, the employee was terminated, and Appellants sought to repurchase the membership interest. The repurchase was not agreed upon, and the employee filed suit. Appellants filed a motion to compel appraisal and motion to abate the lawsuit, which the trial court denied. Appellants then challenged the denial of the motion to compel by interlocutory appeal.

The 4th Court of Appeals dismissed the interlocutory appeal for lack of jurisdiction. Unless a statute authorizes an interlocutory appeal, the courts of appeals generally have jurisdiction only over final judgments. CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011).

Section 171.098 of the Texas Civil Practice & Remedies Code authorizes an order denying a motion to compel arbitration, and Appellants likened appraisal to arbitration. The court of appeals rejected the comparison. Appraisal clauses direct the appraiser to decide the “amount of loss,” but “not to construe the policy or decide whether the insurer should pay.” State Farm Lloyds v. Johnson, 290 S.W.3d 886, 890 (Tex. 2009). Thus, “the scope of appraisal is damages, not liability.” Id.

Because appraisal provisions are different from arbitration clauses, they are not subject to interlocutory appeal under Section 171.098. Further, the court of appeals found no case in which a court held that an order denying a motion to compel appraisal is subject to interlocutory appeal under Section 171.098.

While the court agreed that appraisal is intended to take place before suit and is a condition precedent to suit, this does not make interlocutory appropriate.

Significantly, the court observed that the Texas Supreme Court has authorized mandamus relief to enforce appraisal clauses. See In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 412 (Tex. 2011) (orig. proceeding) (“We have held that mandamus relief is appropriate to enforce an appraisal clause because denying the appraisal could vitiate the insurer’s right to defend its breach of contract claim.”); see also In re Cypress Tex. Lloyds, 419 S.W.3d 443, 445 (Tex. App.—Beaumont 2012, orig. proceeding) (conditionally granting petition for writ of mandamus for insurer in motion to compel appraisal context). Here, however, Appellants did not seek mandamus relief.

Because interlocutory appeal was unavailable from the denial of the  motion to compel appraisal, the court of appeals dismissed for lack of jurisdiction. 

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October 21, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1. Interpretation of a Partition Deed.

Hosek v. Scott, No. 04-14-00655-CV (Tex. App.—San Antonio, Oct. 15, 2015, no pet. h.). Author:                           Marion, C.J. Panel:                            Marion, C.J., Angelini, J., Pulliam, J. Originating Court:          81st District Court, Atascosa County, Texas. Trial Judge:                   Shannon, J. This opinion from the 4th Court of Appeals stems from a dispute between siblings over mineral rights and interpretation of a partition deed.  

The parents of Iravene Voigt Hosek (“Hosek”) and Rosale Voigt Scott (“Scott”) conveyed them equal undivided shares of two tracts of land, a 207.77 acre tract and a 130.77 acre tract. In 1979, a year after the conveyance, Hosek and Scott signed a partition deed to divide the land.  With regard to the minerals, the partition deed provided:

“This partition does not include any of the oil, gas and other minerals in, on or under the above described tracts of land, and same are to remain undivided for a period of twenty-five (25) years from the date hereof and as long thereafter as oil, gas or other minerals are produced in paying quantities from the above described lands.”

Thereafter, Scott made several conveyances of different tracts of her portion of the land, while retaining the mineral interests.  

Hosek filed suit in 2013, seeking a declaratory judgment that she owned all of the minerals under her surface estate. Scott filed a motion for summary judgment, asserting the partition deed severed the surface estate from the mineral estate, and that she owns an undivided one-half interest in the minerals under Hosek’s land since the minerals were never partitioned after the 25 year restriction expired.  

Hosek responded that there was an issue of fact concerning the meaning of the partition deed, and the intent of the deed was to revert the mineral interests to the respective surface owners after the expiration of twenty-five years.

The trial court granted summary judgment in favor of Scott, and awarded attorney’s fees in her favor. The court of appeals affirmed the summary judgment and award of attorney’s fees.

According to the court of appeals, for Hosek’s interpretation to make sense, the partition deed would have needed to provide the minerals would be partitioned and owned by the surface estate owner at the conclusion of the period. It did not, and the court declined to add this language to the partition deed. American Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) (“we may neither rewrite the parties’ contract nor add to its language”).

The Court found the partition deed could be given a definite and certain meaning as a matter of law and was, therefore, unambiguous. See Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). The parties’ intent, as expressed in the four corners of the partition deed, was to prevent the partition of the minerals for a stated period of time. The restriction was lifted after the stated period, and the parties then had the unrestricted right to partition their undivided one-half interest in the minerals.

In this case, the parties did not partition the minerals at the end of the twenty-five year restricted period. Accordingly, the trial court properly concluded Hosek and Scott each retained their undivided one-half interest in the minerals.

Hosek challenged the award of attorney’s fees under the Declaratory Judgment Act, which authorizes an award of attorney’s fees “in any proceeding under the Act.” Tex. Civ. Prac. & Rem. Code § 37.009.

Hosek argued the award was inequitable because both parties needed the partition deed interpreted. This argument, however, would be true in any case involving a disagreement over a deed, contract, or any other document. Under this argument, the trial court would never have discretion to award attorney’s fees in any declaratory judgment action in which the parties sought interpretation of a document. The court of appeals thus rejected this argument as contrary to the plain language of the statute.  

OPINION  APPELLANT’S BRIEF APPELLEE’S BRIEF

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2.  Sexual Harassment and Retaliation under the TCHRA, and Sovereign Immunity. Alamo Heights Indep. School Dist. v. Clark, No. 04-14-00746-CV, __ S.W.3d __ (Tex. App.—San Antonio, Oct. 21, 2015, no pet. h.). Author:                             Martinez, J.  Panel:                               Angelini, J., Martinez, J., Alvarez, J. Originating Court:             285th District Court, Bexar County.  Trial Judge:                      Pozza, J. In this interlocutory appeal from the denial of a plea to the jurisdiction, the 4th Court of Appeals considered whether a plaintiff raised a prima facie case of sexual harassment and retaliation against Alamo Heights Independent School District under the Texas Commission on Human Rights Act (“TCHRA”). Tex. Lab. Code § 21.051. The court of appeals concluded that she did, thus waiving the School District’s governmental immunity. Accordingly, the court affirmed the denial of the School District’s plea to the jurisdiction.      

Alamo Heights Junior High hired a female coach and physical education teacher in 2007. Shortly thereafter, she alleged another female coach began making inappropriate and lewd sexual comments to her. The plaintiff alleged the unwanted comments, and in some cases physical contact, continued for more than a year. The plaintiff also claimed that the female athletic director at the school, rather than punish the offending coach, joined in the inappropriate behavior.

The plaintiff attempted to resolve the matter by meeting with the principal of the school on various occasions, but no report was made and no actions were taken. Thus, the plaintiff filed a grievance against the other female coach, and asked that she be removed from the workplace. The coach was then transferred to another campus.

A month later, the plaintiff was placed on administrative leave with pay and ultimately terminated three months later. The plaintiff filed suit against the School District, asserting claims for sexual harassment and retaliation under the TCHRA. The School District subsequently filed a plea to the jurisdiction, arguing that Clark failed to prove each of the prima facie elements of her sexual harassment and retaliation claims and therefore failed to invoke the TCHRA’s waiver of governmental immunity and establish the trial court’s subject matter jurisdiction. The trial court denied the plea to the jurisdiction.

The court of appeals affirmed, finding that plaintiff presented prima facie evidence on both her harassment and retaliation claims.  As to the discrimination claim, the court noted that employment-discrimination cases employ a unique burden-shifting analysis, in which the plaintiff is entitled to a presumption of discrimination if she meets the “minimal” initial burden of establishing a prima facie case of discrimination. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973). The TCHRA prohibits an employer from discriminating against its employee with respect to compensation or the terms, conditions, or privileges of employment because of race, color, disability, religion, sex, national origin, or age. Tex. Lab. Code § 21.051. Sexual harassment is a form of prohibited sex discrimination. Green v. Indus. Specialty Contractors, Inc., 1 S.W.3d 126, 131 (Tex. App.—Houston [1st Dist.] 1999, no pet.).

For her sexual harassment claim, which was based on a hostile work environment, Plaintiff was required to show that (1) she was an employee who belongs to a protected class; (2) she was subjected to unwelcome sexual harassment; (3) the harassment was based on the protected characteristic, such as gender; (4) the harassment affected a term, condition, or privilege of employment; and (5) the employer knew or should have known of the harassment and failed to take adequate remedial action.  Harvill v. Westward Commc’ns, L.L.C., 433 F.3d 428, 434 (5th Cir. 2005); Gulf States Toyota, Inc. v. Morgan, 89 S.W.3d 766, 770 (Tex. App.—Houston [1st 04-14-00746-CV - 9 - Dist.] 2002, no pet.). The court of appeals noted that same-sex sexual harassment claims are actionable under the TCHRA. See City of San Antonio v. Cancel, 261 S.W.3d 778, 783 (Tex. App.—Amarillo 2008, pet. denied) (citing Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 82 (1998)).

The court found that the plaintiff made a prima facie case as to each element. The record was replete with comments and behavior constituting unwelcome sexual harassment, and the bulk of the comments related to the fact that the plaintiff was a female.

The court found there was a prima facie case as to the fourth element, i.e., whether the complained-of conduct altered the terms, conditions, or privileges of her employment and created an objectively abusive working environment. The plaintiff alleged that the comments occurred for more than a year, and that the stress from the harassment caused the plaintiff to take FMLA leave. See Lauderdale v. Tex. Dep’t of Criminal Justice, Institutional Div., 512 F.3d 157, 163 (5th Cir. 2007) (“Frequent incidents of harassment, though not severe, can reach the level of ‘pervasive,’ thereby altering the terms, conditions, or privileges of employment such that a hostile work environment exists”).

As to the last element, the plaintiff reported the harassment to her supervisor and the principal on several occasions. The principal did not report the claim despite a district policy requiring it to do so. Finding a fact issue on each element, the court of appeals concluded the trial court properly denied the School District’s plea to the jurisdiction on the harassment claim.

The plaintiff also made a prima facie case on retaliation, which required a showing that: (1) she engaged in a protected activity, such as filing a charge or complaint; (2) she was subject to an adverse employment action; and (3) a causal link existed between her participation in the protected activity and the adverse employment action. Pineda v. United Parcel Serv., Inc., 360 F.3d 483, 487 (5th Cir. 2004); Hernandez v. Grey Wolf Drilling, L.P., 350 S.W.3d 281, 286 (Tex. App.—San Antonio 2011, no pet.). The causal link required by the third prong does not rise to the level of a “but for” standard at the prima facie stage. Gee v. Principi, 289 F.3d 342, 345 (5th Cir. 2002).

Here, the Plaintiff engaged in protected activity by filing the EEOC charge. See City of Waco v. Lopez, 259 S.W.3d 147, 150 (Tex. 2008). Moreover, an adverse employment action occurred when plaintiff was terminated by the School District.

The court found a causal nexus between the plaintiff’s protected activity and her termination. The School District argued there was no temporal proximity to establish the causal link because over half a year passed between the filing of the EEOC charge and the termination. The court noted that periods of three months, four months, and twenty months between an employee’s protected activity and the adverse action, have been deemed insufficient without other evidence. Clark County Sch. Dist. v. Breeden, 532 U.S. 268, 273-74 (2001). Moreover, there was additional evidence on causation, including that the plaintiff’s disciplinary record was exemplary, she did not have a negative evaluation until after the filing of her EEOC charge, and the School District failed to follow its own policy in firing her.

Thus, the plaintiff established a prima facie case of retaliation under the TCHRA, and the trial court did not err in denying the School District’s plea to the jurisdiction.

OPINION  APPELLANT’S BRIEF  APPELLEE’S BRIEF

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October 14, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1. Offsite Drilling in the Eagle Ford Shale and Rights of Surface and Mineral Estate Owners.  

Lightning Oil Co. v. Anadarko E&P Onshore, LLC, No. 04-14-00903-CV (Tex. App.—San Antonio, Oct. 7, 2015, no pet. h.) (mem. op.). Author:                          Alvarez, J. Panel:                           Barnard, J., Alvarez, J., Pulliam, J. Originating Court:        365th District Court, Dimmit County, Texas. Trial Judge:                  Abascal III, J. This opinion from the 4th Court of Appeals concerns offsite drilling in the Eagle Ford Shale. The court issued this opinion and withdrew its August 19, 2015 opinion to clarify its holdings.  

Lightning owns mineral leases in Dimmit County, Texas. The surface above Lightning’s mineral rights is owned by Briscoe Ranch, Inc.    

Anadarko leased a mineral estate under the Chaparral Wildlife Management Area (”Chaparral” WMA), adjacent to the land owned by Briscoe Ranch.  In order to reach its mineral lease without drilling on the Chaparral WMA, Anadarko secured a Surface Use and Subsurface Easement Agreement that allowed it to place drilling rigs on the surface estate owned by Briscoe Ranch to form wells that open and bottom in the Chaparral WMA.

Lightning sued Anadarko for trespass and tortious interference with contract to prevent Anadarko from siting a well on the land overlying Lightning’s mineral estate and from drilling through Lightning’s mineral estate to reach Anadarko’s adjacent mineral estate.

The parties filed competing motions for summary judgment and the trial court denied Lightning’s motion and granted Anadarko’s motion.  Anandarko’s motion asserted that it established its justification defense as a matter of law and also that there was no evidence of at least one essential element of Lightning’s claims.    

The court of appeals affirmed the trial court’s summary judgment order, holding that “the surface estate owner controls ‘the matrix of the underlying earth,’ and the summary judgment evidence conclusively proves the surface estate owner gave Anadarko permission to site and drill.”

The court of appeals noted that Lightning’s lease did not convey any right to control the subterranean structures in which any hydrocarbon molecules might be found, and Texas law does not automatically convey such a right in an oil and gas lease. Briscoe Ranch, as the surface estate owner, could grant Anadarko permission to site wells on the surface over Lightning’s minerals and drill to reach Anadarko’s adjacent mineral estate.

The court relied upon its opinion in Springer Ranch, Ltd. v. Jones, 421 S.W.3d 273, 282 (Tex. App.—San Antonio 2013, no pet.), where it “construe[d] the term ‘surface estate’ to mean the portions of the earth[] over which the surface estate owner holds dominion after a severance of the mineral estate.” In Springer, the court of appeals added that “ownership of the hydrocarbons does not give the mineral owner ownership of the earth surrounding those substances.” Id. at 283.

Additionally, in Dunn-McCampbell Royalty Interest, Inc. v. Nat’l Park Serv., 630 F.3d 431, 441 (5th Cir. 2011), the Fifth Circuit discussed that under Texas law, the surface owner and not the mineral estate owner “owns all non-mineral ‘molecules’ of the land, i.e., the mass that undergirds the surface of the [conveyed land].” Id. at 442.  That is, “the conveyance of mineral rights ownership does not convey the entirety of the subsurface.” Id. at 441.

Finally, the Court discussed Humble Oil & Ref. Co. v. West, 508 S.W.2d 812, 815 (Tex. 1974), which clarified the nature of the surface estate. The Wests conveyed fee simple title to Humble Oil, while reserving royalties on the oil and gas produced from the land. The Court observed that the Wests no longer owned the underground reservoir because “the surface of the leased lands remaining as the property of the [surface estate owners] included the geological structures beneath the surface.” Id.

Because Lightning Oil was not granted the right to control the subterranean structures in which the oil and gas molecules are held, it did not control “the mass that undergirds the surface of the [conveyed land],” Dunn-McCampbell, 630 F.3d at 442. The court of appeals therefore upheld the trial court’s order granting Anadarko’s motion for summary judgment and denying Lightning’s motion.

In a footnote which did not appear in the court’s initial opinion, the court of appeals instructed that “Briscoe Ranch’s and Lightning’s uses of the surface estate are subject to the accommodation doctrine, see Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248–49 (Tex. 2013), and may also be governed by the Surface Use Agreement executed by Lightning and Briscoe Ranch. The agreement includes the following provision: ‘Lightning agrees to take all reasonable steps to prevent its operations from . . . [h]arming or damaging economic endeavors of [Briscoe Ranch] requiring use of the surface.’”

 OPINION  APPELLANT’S BRIEF  APPELLEE’S BRIEF  

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2.  Subject Matter Jurisdiction and Appeal from an Order Appointing an Appraisal Umpire. Texas Municipal League Joint Self-Ins. Fund v. Housing Authority of the City of Alice, No. 04-15-00069-CV, __ S.W.3d __ (Tex. App.—San Antonio, Oct. 14, 2015, no pet. h.). Author:                             Chapa, J. Panel:                               Martinez, J., Alvarez, J., Chapa, J. Originating Court:            79th District Court, Jim Wells County.  Trial Judge:                      Sanchez, J. The 4th Court of Appeals dismissed this case for lack of subject matter jurisdiction in a suit in which the City of Alice Housing Authority sought and obtained an order appointing an appraisal umpire in an insurance dispute.  

The Housing Authority filed an insurance claim with the Texas Municipal League Joint Self-Insurance Fund for hail and wind damages. The Fund issued a check for the covered damages, and the Housing Authority disputed the amount paid. The Housing Authority then made a written demand for appraisal pursuant to the property coverage document.    

The Housing Authority filed suit by sending an “Application for Appointment of an Umpire” to the District Clerk of Jim Wells County. In the Application, the Housing Authority requested that the court select an umpire, but did not purport to state a cause of action against or seek relief from the Fund. It did not seek a declaratory judgment, and did not seek an order compelling the Fund to do or to refrain from doing anything. Rather, it simply requested that the court appoint an umpire.

The Fund filed a plea to the jurisdiction on the basis of governmental immunity. The trial court denied the plea to the jurisdiction and granted the Housing Authority’s application to appoint an umpire.  

On appeal, the court declined to address the merits of the governmental immunity argument, instead holding there was no justiciable controversy in the lawsuit.  In order for the trial court to have subject matter jurisdiction over a case, there must be a real, justiciable controversy between the parties that will be actually determined by the litigation. See Austin Nursing Center, Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005); In re K.D.E., No. 01-04-00043-CV, 2004 WL 2618730, at *2 (Tex. App.—Houston [1st Dist.] Nov. 18, 2004, no pet.) (mem. op.); Paulsen v. Tex. Equal Access to Justice Found., 23 S.W.3d 42, 48 (Tex. App.—Austin 1999, pet. denied); Wallace v. Inv. Advisors, Inc., 960 S.W.2d 885, 888-89 (Tex. App.—Texarkana 1997, pet. denied).

Although the parties had disagreements, the application for appointment of an umpire did not state a cause of action against any defendant, and there was no controversy between the parties that would actually be determined by the litigation. In the absence of subject matter jurisdiction, the court of appeals vacated the order appointing umpire as void and dismissed the case.

The court qualified its holding by noting that the parties are free to request, outside the judicial system, that a judge to appoint an umpire as contemplated by the parties’ contract.

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October 7, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1.  Expert Testimony Requirements under Havner. Cerny v. Marathon Oil Corp., No. 04-14-00650-CV, __ S.W.3d __ (Tex. App.—San Antonio, Oct. 7, 2015, no pet. h.). Author:                             Martinez, J. (majority); Chapa, J. (concurring and                                                     dissenting). Panel:                               Marion, J., Martinez, J., Chapa, J. Originating Court:            218th District Court, Karnes County.  Trial Judge:                      Saxon, J. The 4th Court of Appeals upheld the granting of a motion for summary judgment in favor of Defendants Marathon Oil EF, LLC and Plains Exploration & Production Company on plaintiffs’ private nuisance and negligence claims.  The plaintiffs, who live on a one-acre tract of land in Karnes County, sued in connection with emissions from oil and gas operations in the Eagle Ford Shale near their home, which they alleged caused damage to their health and their property.

The court of appeals upheld summary judgment on no-evidence grounds, opining that plaintiffs were required to provide expert testimony on causation as required by Merrell Dow Pharms. v. Havner, 953 S.W.2d 706 (Tex. 1997). The court agreed that the Havner requirements applied to plaintiffs’ suit, which was akin to a toxic tort claim.  Plaintiffs complained of damages arising out of their exposure to emissions of “noxious gases and chemicals,” including benzene and nitrogen dioxide, from oil well sites and production facilities, and from the migration of such hazardous materials on to their property.

The court found that the evidence submitted by Plaintiffs failed to raise a scintilla of evidence of causation under Havner, which requires expert testimony: (1) that defendant’s conduct more than doubled the risk, as shown by two epidemiological studies, (2) that the plaintiff’s injuries were caused by the defendant’s conduct, and (3) that plaintiff’s injuries were not caused by other possible sources.  

The record showed that defendants were not the only companies conducting oil and gas operations in the vicinity of plaintiffs’ home, and plaintiffs failed to negate other possible sources of the chemicals.  Further, Plaintiffs failed to produce a medical expert, and produced no evidence differentiating between plaintiffs’ pre-existing physical conditions and the new health problems they claim arose after the oilfield operations began near their home.

The court also found that there was no evidence of causation on the portion of the nuisance claim seeking damages for loss of use and enjoyment of their land. The lay testimony produced by plaintiffs failed to isolate the cause of the dust, noise, traffic, and foul odors to the defendants in this case.

Justice Chapa dissented as to the court’s determination on the loss of use claim relating to plaintiffs’ allegations of foul odors, dust pollution, and abnormal traffic.  Because determining the source of these types of nuisance allegations is within common knowledge and experience, the plaintiffs’ lay testimony raised a fact issue on these claims.  Justice Chapa concurred as to the remaining portion of the opinion upholding summary judgment.  

MAJORITY OPINION  DISSENTING OPINION  APPELLANT’S BRIEF  APPELLEES’ BRIEF (MARATHON)  APPELLEE’S BRIEF (PLAINS) 

2. Mandamus from an Order Authorizing Pre-Suit Deposition under Rule 202.   In re Time Warner Cable, No. 04-15-00539-CV (Tex. App.—San Antonio, Oct. 7, 2015, no pet. h.) (mem. op.). Author:                         Barnard, J. Panel:                           Angelini, J., Barnard, J., Alvarez, J. Originating Court:        285th District Court, Wilson County, Texas. Trial Judge:                  Walsh, J. The court of appeals granted a defendant’s petition for writ of mandamus from an order authorizing a pre-suit deposition under Tex. R. Civ. P. 202.  A former Time Warner employee sought the pre-suit deposition to discover the circumstances surrounding his termination of employment so that he could determine “whether or not he has a claim.”  

Although Rule 202 does not require a fully pled cause of action, it requires some specificity in stating “the substance of the testimony that the petitioner expects to elicit . . . and the petitioner’s reasons for obtaining the testimony.”  Tex. R. Civ. P. 202.2(g).  As the court of appeals explained, “[a] petition that merely tracks the language of Rule 202 in averring the necessity of a pre-suit deposition, without including any explanatory facts regarding the anticipated suit or the potential claim, is insufficient to meet the petitioner’s burden.”  

Here, the petitioner did not indicate what information he would need, beyond what was already available to him, which would be revealed in deposition. Further, he did not provide any factual explanation about the likely benefit to be obtained in allowing him to take the deposition, or how or why that benefit outweighed the burden and expense of the pre-suit deposition.  Accordingly, a pre-suit deposition was unwarranted and mandamus from the order was required.

OPINION

3. Mandamus from an Order Granting Medical Examination under Rule 204.   In re Gonzalez, No. 04-15-00553-CV (Tex. App.—San Antonio, Oct. 7, 2015, no pet. h.) (mem. op.). Author:                         Martinez, J. Panel:                           Marion, C.J., Martinez, J., Pulliam, J. Originating Court:       111th District Court, Webb County, Texas. Trial Judge:                  Notzon, J. This opinion discusses the requirements for obtaining a physical or mental examination under Tex. R. Civ. P. 204. The court of appeals granted mandamus from an order permitting a defense expert to take a medical examination of the plaintiff injured in an automobile accident.  

To establish good cause for a medical examination, the requesting party must show that: (1) the requested examination is relevant to issues in controversy in the case; (2) a reasonable nexus exists between the condition in controversy and the examination sought; and (3) the desired information may not otherwise be obtained through other, less intrusive means of discovery short of a compelled examination.

The court of appeals granted mandamus from the order here because there was no showing that the desired information could not be obtained through other, less intrusive means of discovery.  

The defendant submitted an affidavit from a medical expert recommending an examination before the plaintiff underwent a four level cervical fusion.  According to the defense expert, the examination would entail a “review of all pertinent documents; review of all X-rays and imaging; receiv[ing] the patient’s history and hav[ing] him fill out a history form and pain diagram; perform[ing] a physical examination of the involved anatomical areas, including a neurological exam; and discern[ing] clinical impressions based upon the history, physical exam, and imaging of the patient, finalizing the process with a report.”

The court of appeals concluded that this was insufficient because it did not detail the information necessary to his evaluation that were not covered by existing examinations or medical records or that could not be obtained by other discovery, such as deposing additional witnesses.

OPINION

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September 30, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1.  Waiver of a Local Governmental Entity’s Immunity to Suit by Entering into a Contract. San Antonio Housing Authority v. Serento Apartments, LLC, No. 04-15-00075-CV, __ S.W.3d __ (Tex. App.—San Antonio, Sept. 30, 2015, no pet. h.). Author:                              Angelini, Justice. Panel:                               Angelini, J., Alvarez, J., Chapa, J. Originating Court:             45th District Court, Bexar County.  Trial Judge:                      Walsh, J. The 4th Court of Appeals reversed the denial of a plea to the jurisdiction in a breach of contract action brought against the San Antonio Housing Authority.  Serento Apartments brought suit against the Housing Authority in connection with a contract involving federal low-income housing assistance.  While a governmental entity that enters into a contract waives immunity from liability and is bound by contractual terms, the entity does not necessarily waive immunity from suit.  Rather, immunity from suit is only waived if it is a contract “for providing goods or services to the local governmental entity….”  Tex. Loc. Gov’t Code §§ 271.151-.152.     Under the contract in this case, the Housing Authority referred low-income families eligible to receive federal housing assistance to the apartment complex.  The court of appeals determined that the apartment complex did not provide goods or services to the Housing Authority as required to waive immunity from suit.  Rather, the purpose of the contract was to facilitate federal funds to a private entity on behalf of low-income families. The court of appeals relied principally on a similar case from the First Court of Appeals, East Houston Estate Apartments, LLC v. City of Houston, 294 S.W.3d 723 (Tex. App.—Houston [1st Dist.] 2009, no pet.), in finding no waiver of immunity from suit.  In East Houston, the court of appeals reasoned that governmental immunity is not waived under section 271.152 if the contract merely confers some attenuated benefit on a governmental entity.     The services provided to the Housing Authority under the contract were indirect and attenuated. As in East Houston, the Housing Authority was merely the conduit of federal funds and did not directly receive the benefit of services provided by the apartment complex.  Thus, the apartment complex failed to meet its burden of showing that it pleaded a waiver of governmental immunity under section 271.152 of the Texas Local Government Code.    OPINION  APPELLANT’S BRIEF  APPELLEE’S BRIEF  REPLY  BRIEF 2. Motion for Extension of Time to File a Notice of Appeal.   In re B.L.B., No. 04-15-00485-CV (Tex. App.—San Antonio, Sept. 30, 2015, no pet. h.) (mem. op.). Author:                         Per Curiam.   Panel:                           Martinez, J., Alvarez, J., Chapa, J. Originating Court:         81st District Court, Wilson County, Texas. Trial Judge:                   Uram-Degerolami, J. This short opinion dismissing an appeal for want of jurisdiction serves as a reminder of appellate deadlines, which in some cases are jurisdictional.  Typically, an appellant has thirty days from the signing of a final judgment to perfect an appeal by filing a notice of appeal.  Tex. R. App. P. 26.1.  That timeline is extended to ninety days if the appellant files a motion for new trial or other motion listed under Rule 26.1(a). Here, a party sought to appeal a judgment terminating parental rights, which under the Family Code is an accelerated appeal.  In the case of an accelerated appeal, a notice of appeal is due within twenty days of the signing of the judgment or order, and the deadline to file an accelerated appeal is not extended by the filing of a motion for new trial.  Tex. R. App. P. 26.1(b). As the court of appeals noted, the appellant failed to file a notice of appeal from the judgment within twenty days.  Rule 26.3 allows for a fifteen-day extension of time in which to file a notice of appeal.  However, the appellant failed to file a motion for extension of time within this period.  The failure to file either a timely notice of appeal or a timely motion for extension left the court of appeals without jurisdiction and dismissal was required.  OPINION

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September 23, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

The Fourth Court of Appeals handed down one significant civil opinion this week, which is discussed below.  The relative lack of material presents an opportunity to discuss statistical data from the court for the fiscal year 2014, ending August 31, 2014.

Although it may seem like it takes a long time to receive an opinion, the Fourth Court of Appeals is a model of efficiency among the fourteen intermediate appellate courts.  The Court had the highest number of cases filed per justice at 126, partly due to the fact that it has only seven justices (Dallas has thirteen and both Houston courts have nine).  Further, Bexar County accounted for the third most appeals in the state (7.5%) behind only Harris County (18.6%) and Dallas County (14.2%). 

Yet, the average time between filing of a civil appeal and disposition was 6.3 months, second best only to Texarkana (4.5 months) among the courts of appeals.  Similarly, the average time between submission of the case (meaning all briefs have been filed and oral argument has been heard), and disposition was 1.2 months, also second best among the courts of appeals, with Waco finishing first (0.4 months).

Overall, the court added 523 civil cases and disposed 609, with a clearance rate of 102.5%.  The court issued a total of 1,722 opinions, including criminal and civil cases.  It published 56.5% of its opinions (973). 

A relatively scant percentage, 7.1%, of petitions for review granted by the Texas Supreme Court originated in the Fourth Court.  This puts the court tenth out of the fourteen courts.   

Considering the dollars at stake, I am always surprised attorneys do not take greater efforts to accumulate statistical data on courts and judges to evaluate cases.  Presumably, this type of data mining could yield positive results.  If you are interested in viewing more statistics from Texas courts, the Office of Court Administration's annual statistical report can be accessed at:  

http://www.txcourts.gov/judicial-data.aspx

Now on to the opinion of the week…

1.  Interlocutory Appeal from the Granting of a Motion to Dismiss in a Health Care Liability Claim and Permissive Appeals.

Harper v. Texas Tech Health Science Cntr., No. 04-15-00489-CV (Tex. App.—San Antonio, Sept. 23, 2015, no pet. h.) (mem. op.).

Author:                             Per Curiam.

Panel:                               Marion, C.J., Angelini, J., Barnard, J.

Originating Court:            251st District Court, Potter County. 

Trial Judge:                      Estevez, J.

This opinion serves as a reminder to make sure a judgment disposes of all parties and claims before attempting to appeal, assuming interlocutory appeal is not available.  It also instructs that a verbal recitation that an appeal will be allowed is not sufficient for a permissive appeal under section 51.014(d) of the Texas Civil Practice and Remedies Code.

The 4th Court of Appeals dismissed this attempted interlocutory appeal of an order granting a motion to dismiss under section 74.351(b) of the Texas Civil Practice and Remedies Code for lack of jurisdiction.  The trial court granted the motion after the plaintiff failed to timely serve an expert report as required in health care liability claims.   

The order granting the motion was not a final judgment because it did not dispose of all parties, and the trial court did not enter a severance order.  Although a party may appeal an interlocutory order denying a motion to dismiss filed pursuant to section 74.351(b), no interlocutory appeal is permitted from an order granting such a motion. 

The plaintiff/appellant maintained that the court of appeals could hear the case under section 51.014(d) of the Texas Civil Practice and Remedies Code, which allows for permissive appeals by written order.  The trial court, however, failed to issue any written order authorizing an appeal, but simply stated during the hearing that the parties would have the right to appeal.  The court of appeals observed that, “[a]lthough the trial court’s statement generally acknowledges appellant will have a right to appeal its ruling, the statement does not constitute an order signed by the trial court authorizing an interlocutory appeal pursuant to section 51.014(d).”  The court thus dismissed the appeal without prejudice. 

OPINION

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September 16, 2015 Opinions.

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1.  Pleas to the Jurisdiction, Sovereign Immunity, and the Recreational Use Statute.

City of San Antonio and San Antonio River Authority v. Osvaldo Peralta, No. 04-15-00254-CV, __ S.W.3d __ (Tex. App.—San Antonio, Sept. 16, 2015, no pet. h.).

Author:                              Alvarez, Justice.

Panel:                               Marion, C.J., Barnard, J., Alvarez, J.

Originating Court:             224th District Court, Bexar County. 

Trial Judge:                      Tanner, J.

I was fortunate enough to represent the Appellee in this interlocutory appeal of two pleas to the jurisdiction filed by the City of San Antonio and San Antonio River Authority (SARA).  The 4th Court of Appeals ruled in favor of my client in determining that the trial court correctly denied the pleas to the jurisdiction.  

Appellee suffered severe injuries as he was riding his bike along the San Antonio River Walk when his bicycle crashed into an uncovered sewer in the middle of the path.  The metal plate which should have covered the sewer was missing.  

Appellee sued the City and SARA for negligence and gross negligence in maintaining the path.  The City and SARA filed pleas to the jurisdiction, arguing that Appellee failed to plead facts and produce evidence of gross negligence to satisfy the Recreational Use Statute.  

Applying the fair-notice standard for pleadings as required by Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 2238 (Tex. 2004) and Tex. R. Civ. P. 47 and 45, the court of appeals found Appellee adequately pled a premises and special defect action under the Texas Torts Claims Act.  Appellee also alleged sufficient facts of gross negligence, including that the City and SARA knew about the missing sewer grate before the accident, that an employee at the scene of the accident told Appellee that they knew about the missing grate, and that the City and SARA nevertheless acted with conscious indifference in failing to replace or warn of the missing grate.

As to the evidentiary portion of the pleas to the jurisdiction, the court of appeals reminded that a plea to the jurisdiction on the evidence is akin to a traditional motion for summary judgment. Under this standard, the party asserting the plea carries the initial burden to come forward with evidence negating jurisdiction.  Only then does the burden shift to the respondent to present evidence raising a fact issue.  

The court held that the City and SARA failed to satisfy their initial evidentiary burden to conclusively negate jurisdiction, in particular they failed to negate gross negligence under the Recreational Use Statute. Although they offered Appellee’s deposition testimony to show he was uncertain when they learned the plate was missing, this did “not prove as a matter of law that Appellants did not know the cover plate was missing. . . .”

Because the City and SARA failed to carry their threshold evidentiary burden negating gross negligence, the court of appeals affirmed the trial court’s denial of the pleas to the jurisdiction.

OPINION  THE CITY’S APPELLANT’S BRIEF  SARA’S APPELLANT’S BRIEF

APPELLEE’S BRIEF  THE CITY’S REPLY BRIEF   

APPELLEE’S SUR-REPLY BRIEF

2. Special Appearances and Establishing Personal Jurisdiction by Alter Ego.  

PT Intermediate Holding, Inc. and Personal Touch Holding Corp. v. LMS Consulting, LLC, No. 04-14-00827-CV (Tex. App.—San Antonio, Sept. 6, 2015, no pet. h.) (mem. op.).

Author:                         Angelini, J.    

Panel:                            Angelini, J., Chapa, J., Pulliam, J.

Originating Court:         45th District Court, Bexar County, Texas.

Trial Judge:                    Sakai, J. 

In this interlocutory appeal from the denial of a special appearance, the 4th Court of Appeal addresses personal jurisdiction over nonresident corporations under an alter ego theory.

A Texas recruiting and staffing company sued the New York parent corporations of two Texas home health care corporations for breach of contract and tortious interference with contract.  The New York parent corporations filed a special appearance, asserting they lacked minimum contacts with Texas, and that the exercise of jurisdiction over them would offend traditional notions of fair play and substantial justice.

The court of appeals upheld the trial court’s denial of the special appearance and found sufficient facts to impute personal jurisdiction over the parent corporations.  The court explained that “to ‘fuse’ the parent company and its subsidiary for jurisdictional purposes under the doctrine of alter ego, a plaintiff must prove that the parent controls the internal business operations and affairs of the subsidiary.”

Here, the Texas entities were wholly owned by the New York parent companies and shared the same corporate headquarters.  The parent companies exercised a high level of control over the general policy and administration of the Texas entities, including personnel and financial matters.  Thus, there was some evidence to support the trial court’s implied finding that the parent corporations exercised a degree of control over the Texas entities that was greater than normally associated with common ownership and directorship.  As such, the trial court properly imputed the Texas corporations’ activities for purposes of establishing minimum contacts.  Further, since the Texas corporations did not contest personal jurisdiction, their actions were sufficient to permit the trial court to exercise personal jurisdiction over the New York corporations.  

The court of appeals also rejected the argument that the exercise of personal jurisdiction would offend traditional notions of fair play. The fact that the defendants would have to travel from New York was not controlling as “‘[d]istance alone cannot ordinarily defeat jurisdiction.’”  Moncrief Oil Int’l v. OAO Gazprom, 414 S.W.3d 142, 155 (Tex. 2013).  Given the presence of the subsidiaries in Texas, any burden on the New York companies was minimal.  

OPINION  APPELLANTS’ BRIEF  APPELLEE’S BRIEF  

APPELLANTS’ REPLY BRIEF  APPELLEE’S SUR-REPLY BRIEF

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September 9, 2015 Opinions

by Robert Clore

Clore Appeals & Litigation Support  [email protected]

1.  Temporary Injunctions and the Appointment of Receivers.

In re Benson, No. 04-15-00087-CV, __ S.W.3d __ (Tex. App.—San Antonio, Sept. 2, 2015, no pet. h.).

Author:                              Barnard, Justice.

Panel:                               Angelini, J., Barnard, J., Martinez, J.

Originating Court:             Probate Court No. 2, Bexar County. 

Trial Judge:                      Rickoff, J.

This case involves the fortune of 88-year-old billionaire Tom Benson, owner of the New Orleans Saints and Pelicans.  Tom’s daughter, Renee Benson, is the remainder beneficiary of a trust established by Shirley Benson, Tom’s deceased first wife.  Tom is the trustee. 

The trust’s considerable assets include a non-controlling interest in Bensco, Inc., a ninety-seven percent interest in Lone Star Capital Bank, a ninety-nine percent interest in Uptown Blanco, Ltd., real estate interests in Texas and Louisiana, and several million dollars in cash. According to Renee, Tom’s behavior changed dramatically in 2014, and their relationship became estranged.  Renee alleges that Tom breached his obligations as trustee in his handling of trust assets, including withdrawing $25 million dollars--$4.76 million of which belonged to the trust—from Lone Star Capital Bank.  Renee filed suit, seeking to have Tom removed as trustee. 

The probate court entered a temporary injunction enjoining Tom from acting as trustee and appointing temporary co-receivers (one of whom is former Chief Justice Phil Hardberger) over the trust assets. The court of appeals dissolved the temporary injunction based on its failure to articulate, except in conclusory fashion, the reasons Renee will suffer irreparable injury if the injunction is not granted.  See Tex. R. Civ. P. 683.  The order simply states, “Petitioner [Renee] will have no adequate remedy at law, and the Petitioner will be irreparably harmed.”  As the court explained, simply stating a party “will suffer irreparable harm” does not satisfy Rule 683’s specificity requirement.  AutoNation, Inc. v. Hatfield, 186 S.W.3d 576, 582 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Although an addendum to the order explains injuries to the trust, it does not explain how Renee, the applicant for temporary injunction, will suffer harm, nor why injury will result to her in the absence of an injunction. 

The court of appeals affirmed the probate court’s appointment of temporary co-receivers.  The court found some evidence that Tom committed a breach of his fiduciary duty and therefore a breach of trust in his handling of trust assets.  According to the court of appeals, “Tom’s abrupt severance of all communications with the Trust beneficiaries, his undisclosed transfer of funds that could have negatively impacted the market value of Lone Star Capital Bank—a Trust asset, his unexplained attempts to fire members of the Bank’s board—including long-time business associates, and his concealment of the Trust bookkeeper from the Trust beneficiaries constitute some evidence of actions a person of ordinary prudence and discretion would not take when managing his own affairs.”

The court rejected the argument that in order to obtain appointment of receivers, Rene was required to show, in equity, that she suffered irreparable harm or that less invasive equitable remedies would be inadequate.  Because the probate court appointed receivers pursuant to Tex. Prop. Code § 114.008(a)(5), and not based on equity, there was no requirement that Renee show irreparable harm or lack of another remedy.  Accordingly, the probate court did not abuse its discretion in appointing the receivers.   

OPINION     APPELLANT'S BRIEF    APPELLEE'S BRIEF   

APPELLANT'S REPLY BRIEF

2. Orders Granting Permissive Interlocutory Appeals Must State Why the Appeal May Materially Advance the Ultimate Termination of Litigation.

In re Marshall, No. 04-15-00521-CV (Tex. App.—San Antonio, Sept. 9, 2015, no pet. h.) (mem. op.).

Author:                             Per Curiam

. Panel:                            Alvarez, J., Chapa, J., Pulliam, J.

Originating Court:            Probate Court No. 1, Bexar County, Texas.

Trial Judge:                     Cross, J. 

Beginning in 2011, the Texas Legislature authorized permissive interlocutory appeals where a trial court signs an order permitting an appeal.  Tex. Civ. Prac. & Rem. Code § 51.014(d).  The order appealed must “involve a controlling question of law as to which there is a substantial ground for difference of opinion[.]”  Id at § 51.014(d)(1).  Further, the statute requires that “an immediate appeal from the order may materially advance the ultimate termination of the litigation.”  Id. at § 51.014(d)(2).

Here, the 4th Court of Appeals denied a petition for permissive appeal from an order granting the motion respondents’ motion for summary judgment and denying the petitioner’s competing motion for summary judgment.  The court of appeals rejected the permissive appeal because “the trial court’s order granting permission to appeal does not ‘state why an immediate appeal may materially advance the ultimate termination of the litigation.’”  Accordingly, the court of appeals determined that the requirements for a permissive appeal were not met, denied the petition, and remanded the cause to the trial court.    

OPINION    PETITION FOR PERMISSIVE APPEAL    RESPONSE