Texas Appellate Law Blog : Texas Appellate Lawyer & Attorney : Smith Law Group, P.C. : Appeals, Sanctions, Summary Judgment : Austin, Texas

The Texas Supreme Court issued one opinion with this week's orders.  In Grimes Construction, Inc. v. Great American Lloyds Insurance Co. (No. 06-0332) (per curiam), the Court reversed after concluding that the court of appeals' decision conflicted with Lamar Homes, Inc. v. Mid-Continent Casualty Co., 242 S.W.3d 1 (Tex. 2007).

In Lamar Homes, the Court determined that allegations of unintended construction defects might constitute an accident or occurrence under a commercial general liability policy and that allegations of damage to or loss of use of the home itself might also constitute property damage sufficient to trigger the duty to defend.  Grimes presented similar issues, but the court of appeals concluded that defective work involved a contract claim outside the CGL policy's scope.  The supreme court remanded the case to the trial court for further proceedings consistent with its opinion.

The Grimes opinion bears the noteworthy delivery date of February 29.  I'm no historian, but based on a quick Westlaw search, the Court seems to have issued only nine other opinions on February 29.  They are:

• Jensen v. Jensen, 665 S.W.2d 107 (Tex. 1984);
• Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984);
• Gappelberg v. Landrum, 666 S.W.2d 88 (Tex. 1984);
• Ex parte Ratliff, 3 S.W.2d 406 (Tex. 1928);
• Monger & Henry v. Delaware Ins. Co., 79 S.W. 7 (Tex. 1904);
• Western Union Tel. Co. v. Arnold, 79 S.W. 8 (Tex. 1904);
• Houston E. & W.T. Ry. v. Hardy, 61 Tex. 230 (1884);
• Astugueville v. Loustaunau, 61 Tex. 233 (1884); and
• Perkins v. Dunlavy, 61 Tex. 241 (1884).

Standing alone, Grimes adds nothing to Texas jurisprudence, but it nonetheless joins a special class of cases based on its issuance date.

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Last night, WFAA-TV in Dallas ran a news feature (entitled "Justice Delayed?") addressing the "backlog problem" at the Texas Supreme Court.  Investigative reporter Byron Harris took the lead, and Austin public interest group Texas Watch contributed.

The story centered around Sharon Boyd, who died of cancer shortly before the December 2006 oral argument in her failure-to-diagnose case (previously discussed here).  Rather than address the merits, the Court ultimately dismissed the health care providers' petition for review as improvidently granted.

The report also discussed the Court's 6-week "summer hiatus," the speed with which Justice Hecht and Justice Wainwright turn out opinions, and those justices' travel habits.  Chief Justice Jefferson and Justice Wainwright were interviewed.

The news video, as well as an online article, are available through this link.

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Although I haven't seen an official announcement (or any publicity whatsoever), it looks as if the Fourth Court of Appeals will begin webcasting oral arguments through the St. Mary's University web site on March 5, 2008.

The Fourth Court would be the logical choice for expanding the webcasting program, considering that St. Mary's (also in San Antonio) provided all of the equipment and funding for the Texas Supreme Court pilot (previously discussed here, here, and here) and is presumably doing so again.  Until the Legislature appropriates the necessary monies or more Texas law schools step up, we can expect the other 13 intermediate appellate courts and the Court of Criminal Appeals to stay blacked out.

3/4/08 Update:  Sadly, it was too good to be true.

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As reported in The Houston Chronicle, a group of 11 plaintiffs have brought a putative class action in federal district court in Marshall seeking to have the Chapter 74 medical malpractice damage caps declared unconstitutional.  Among the plaintiffs is former Dallas Cowboy Ron Springs, who has been in a coma since late last year following surgery to remove a cyst.

The lawsuit, styled Watson et al. v. Harrison County Hospital Association et al. (Civil Action No. 2:08-CV-00081), has been assigned to U.S. District Judge John Ward.  A copy of the complaint is available here.

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In Austin Periodontal Associates, Inc. v. Husak (No. 03-07-00125-CV), a pre-House Bill 4 dental malpractice case, the Third Court of Appeals has affirmed a $503,923 judgment rendered after a jury trial.  The dentist and hisemployer challenged the judgment on several grounds, most of which involved evidentiary complaints.  This decision is noteworthy, however, because the trial court refused the defendants' proposed "bad result" instruction under former Article 4590i, Section 7.02:

A finding of negligence may not be based solely on evidence of bad result to the patient in question, but such a bad result may be considered by you, along with other evidence, in determining the issue of negligence; you shall be the sole judge of the weight, if any, to be given any such evidence.

Section 7.02 was limited to jury trials "involving a health care liability claim against a physician or hospital."  The court of appeals concluded that no abuse of discretion occurred in Husak because the dentist presented no evidence that he was a "physician," and his employer presented no evidence that it was a "hospital," as the former statute defined those terms.

The current version, Section 74.303(e) of the Civil Practice and Remedies Code, mandates a "bad result" instruction in "any action on a health care liability claim that is tried by a jury."  The jury may or may not have reached the same result had it been instructed under the current law, but the trial court could not have refused the instruction.

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Appellants surnamed Belt had a rough day in the Third Court of Appeals.

In opinions written by Justice Jan Patterson (pictured), the Court dismissed for want of jurisdiction two restricted appeals brought by Robert Belt and one brought by Justin Belt.  All three cases are styled Belt v. Point Venture Property Owners' Association, Inc., and all of them involved tax foreclosure sales.

In Robert's first case (No. 03-07-000567-CV), the Court concluded that the order at issue, which involved distribution of part but not all of the excess sale proceeds, was interlocutory and therefore not appealable.  Although Section 34.04 of the Tax Code allows appeals from orders regarding excess proceeds, the Court concluded that "[n]o statute authorizes an interlocutory appeal from an order to distribute a portion of the excess proceeds from a tax sale."

In Justin's case (No. 03-07-000568-CV) and in Robert's second case (No. 03-07-000569-CV), the Court concluded that that both appellants could not establish three of the four prerequisites for a restricted appeal:  (1) the notice of the restricted appeal was filed within six months after the judgment was signed; (2) by a party to the lawsuit; (3) who neither participated in the hearing nor filed a timely notice of appeal, post-judgment motion, or request for findings of fact or conclusions of law; and (4) the face of the record must disclose the claimed error.  Both Justin and Robert timely filed their restricted appeals, but neither was a party to the underlying lawsuit, both timely perfected (but did not pursue) an ordinary appeal, and the records in both cases failed to demonstrate error.

Of general appellate interest, the Court noted in the latter two opinions that "a party can no longer abandon an ordinary appeal and then seek a restricted appeal" (citing TRAP 30 and Salvaggio v. Brazos County Water Control & Improvement Dist., 598 S.W.2d 277 (Tex. 1980)).

The Belts have three other matters against the same opponent pending on the Third Court's docket.

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The Texas Supreme Court issued one opinion with this week's orders.  In El Paso Hospital District v. Texas Health & Human Services Commission (No. 05-0372), the Court granted the District's motion for rehearing, withdrew the opinion issued on August 31, 2007, and substituted another in its place.

In both instances, the Court held that HHSC's February 28 cutoff for gathering data for Medicaid patients was an agency rule and, because HHSC did not follow proper rule-making procedures, declared the rule invalid.  Originally, the Court "remanded the rule to [HHSC ] for further action."  But the Court acted more decisively in the opinion on rehearing,"revers[ing] the court of appeals' judgment and render[ing] judgment declaring the rule invalid and enjoining its enforcement."

In light of its new disposition, the Court remanded the case to the trial court for further proceedings, specifically a review of individual claims data excluded by the February 28 cutoff.

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Of all the Texas Supreme Court decisions issued last week, Fairfield Insurance Co. v. Stephens Martin Paving, LP (04-0728) is arguably the most significant.  In that case, the Court answered "no"—sort of—to the Fifth Circuit's certified question, "Does Texas public policy prohibit a liability insurance provider from indemnifying an award for punitive damages imposed on its insured because of gross negligence?"

More accurately, the Court reframed the question narrowly and answered it this way:  "Pursuant to article V, section 3-c of the Texas Constitution and rule 58.1 of the Texas Rules of Appellate Procedure, we answer that Texas public policy does not prohibit coverage under the type of workers' compensation and employer's liability insurance policy at issue in this case."

That answer begs the question, "How about other types of insurance policies?"  More on that in a minute.

Citing three out-of-state cases, the Court first described a two-step analysis for determining whether exemplary damages are insurable.  The Court decides (1) whether the policy's plain language covers the exemplary damages sought in the underlying suit against the insured; and (2) if so, whether Texas public policy allows or prohibits coverage under the circumstances, considering any express statutory provisions regarding the insurability of exemplary damages.

The Court skipped the first part of its newly announced analytical standard and proceeded to the second step.  After reviewing the relevant statutes, the Court concluded that "[t]he Legislature's expressed intent is that Texas public policy does not prohibit insurance coverage for claims of gross negligence in this context."

That's it.  Certified question answered.  Opinion over at page 10, right?

Wrong.  This is where it gets interesting—so much so as to spark concurring opinions from Justice Hecht and Justice Johnson.

Recognizing "the import of this issue," the Court went on to discuss the "considerations relevant to determining whether Texas public policy prohibits insurance coverage of exemplary damages in other contexts in the absence of a clear legislative policy decision."  What follows over the next 17 pages is an impressively researched explication of how every other state has treated the issue, as well as a discussion of key cases outlining both sides of the debate and the critical policy concerns:  freedom of contract and whether, based on the specific circumstances, the purpose of imposing exemplary damages is served.

Folks who were hoping for ultimate resolution of whether punitive damages are insurable in Texas are undoubtedly disappointed.  Although the Court said more than was needed to answer the Fifth Circuit's certified question, it stopped well short of adopting a bright-line rule.  Indeed, just about everything other than worker's compensation coverage remains open for further debate under the framework announced in this case.

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As part of my year-end spending spree (which my accountant recommended to maximize business deductions—but that's another story), I purchased the 18th Edition of The Bluebook: A Uniform System of Citation.  Now, the good folks at Harvard Law Review have announced that they are making an online version available on a subscription basis.  Figures.

Hat tip to The California Blog of Appeal.

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Following up on this post, I finished reading John Grisham's The Appeal this past weekend.  As some reviews have noted, the story is more about the politics of judicial elections than the actual appellate process, which is barely mentioned at all.  I laughed out loud, though, when I read the following passage:

In Atlanta, Jared Kurtin passed the file to the firms appellate unit, the eggheads, as they were known, brilliant legal scholars who functioned poorly in normal circles and were best kept in the library.  Two partners, four associates, and four paralegals were already hard at work on the appeal when the massive transcript arrived and they had their first look at every word that was recorded at trial.  They would dissect it and find dozens of reasons for a reversal [at 103].

This reminded me of my big firm days, although no one referred to our group as "eggheads" (more like "nerds," I think).  We also didn't staff even the largest matters with two partners, four associates, and four paralegals.  At current rates, that kind of coverage would ring up about $3,000 an hour.

I didn't find the book to be as much a "bully pulpit for reform" as some, though the Author's Note does speak out in pointed opposition to judicial elections.  It's classic Grisham—David versus Goliath with political undertones, but withGoliath reversing his fortune 5 votes to 4.  The timing is interesting, but I wouldn't take it for anything more than an easy, fairly entertaining read.

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In today's On Appeal column, Law.com's Howard Bashman discusses those instances in which an appellate judge, rather than writing a separate concurring opinion, merely issues a short statement to the effect that he or she concurs in the result.  While somewhat rare, Texas appellate justices occasionally engage in this practice.

Bashman concludes:

A judge who cares enough to note his or her disagreement with the majority's approach should dignify the case with at least a brief explanation of the reason for that disagreement.  And if he or she cannot supply such an explanation, then perhaps he or she should simply join in the majority opinion.

It's hard to find fault with this conclusion.  Really, what purpose does "concurring in the result" serve, other than to tell the public that the writer just didn't want to join the majority opinion?  Without some explanation, the reasons for that decision are a mystery to the parties and other litigants with potentially affected cases.  If the majority opinion has a defect in reasoning or if the law is vulnerable to change in a way the parties haven't emphasized, please tell us so we can better do our job as advocates.

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The Texas Supreme Court has been busy, issuing opinions in six cases with this week's orders.  The Court decided matters involving contractual indemnity and prompt-payment claims (on rehearing), class actions, jurisdiction under Chapter 21 of the Property Code, insurance coverage for punitive damages, an insurer's duties to a potential additional insured, and the Good Samaritan defense.

Four of the cases were filed in 2003 or 2004, reflecting an effort to address the Court's well publicized docket backlog (as Chief Justice Jefferson discussed in this Texas Lawyer interview).  Two involved certified questions from the Fifth Circuit.

Osler McCarthy's case summaries are available here.

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The Texas Supreme Court issued one opinion with today's orders.  In In re D.N.C. (No. 07-0621) (per curiam), a family law case consolidated with four others involving the same parent, the Court explained its denial of the Department of Family and Protective Services' petitions for review.  The Department contended that the court of appeals' reversal of a conservatorship order and a conservatorship appointment on factual insufficiency grounds was erroneous under the Court's recent decision in In re J.A.J., (No. 07-0511), previously discussed here.

In J.A.J., the Court held that an appellant whose parental rights have been terminated must specifically assign error to the Department's appointment as conservator, not just to the termination decision.  Unlike J.A.J., however, the trial court in D.N.C. made no specific findings to support the conservatorship appointment.  Because "the only available statutory mechanism for the Department's appointment was as a consequence of the termination pursuant to [Family Code] section 161.207," the supreme court held that J.A.J. did not apply and allowed the court of appeals' complete reversal to stand.

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The Texas Supreme Court issued one opinion other than the new decision in Frank's Casing with today's orders.  In DaimlerChrysler Corp. v. Inman (No. 03-1189) (written by Justice Hecht, joined by Justices Wainwright, Brister, Medina, and Willett), the Court dismissed a putative class action for want of jurisdiction on the ground that the plaintiffs' claims—which involved seat belt buckles that were allegedly too easy to unlatch unintentionally—were too speculative and hypothetical to confer standing.

Chief Justice Jefferson (joined by Justices O'Neill, Green, and Johnson) dissented on the ground that the majority "improperly equates standing with the merits of the plaintiffs claim" in contravention of "fundamental tenets of the standing doctrine, our rules of procedure, and the statute governing interlocutory appeals."

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With today's orders, the Texas Supreme Court issued a new opinion in Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools, Inc. (No. 02-0730), possibly the oldest case on the Court's docket.  The Court originally decided the case in May 2005, but granted respondent's motion for rehearing in January 2006 and heard re-argument a month later.

In its original opinion (authored by then-Justice Owen, joined by Chief Justice Jefferson and Justices Hecht, Medina, and Green) the Court held that excess insurance carriers who correctly disputed coverage, but nevertheless settled third-party claims against their insured, were entitled to recoup the settlement payments from their insured.  The new opinion (authored by Justice O'Neill, joined by Chief Justice Jefferson and Justices Medina, Johnson, and Willett) does an about-face and holds that no reimbursement obligation is implied when the policy involves excess coverage, the insurer has no duty to defend under the policy, and the insured acknowledges that the claimant's settlement offer is reasonable and demands that the insurer accepts it.

Justice Hecht (joined by Justice Green) and Justice Wainwright each delivered dissenting opinions.  Justice Brister did not participate in the decision.

Expect considerable media attention to this case. It may receive more coverage than any other decision the Court makes this year.

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