Texas Appellate Lawyer & Attorney : D. Todd Smith Law Firm : Appeals, Sanctions, Summary Judgment : Austin, Texas

The Texas Supreme Court issued four decisions—two of which were among the older cases on its docket—with this week's regular orders.

In Pleasant Glade Assembly of God v. Schubert (No. 05-0916), the Court held that a church was not estopped from asserting its constitutional rights, reversed a money judgment against the church, and rendered judgment of dismissal because the case represented an ecclesiastical dispute over religious conduct.  Chief Justice Jefferson, Justice Green, and Justice Johnson each filed separate dissenting opinions.

In JCW Electronics, Inc. v. Garza (No. 05-1042), the Court held that the proportionate responsibility statute (Chapter 33 of the Civil Practice and Remedies Code) applies to personal injury claims brought under a breach of implied warranty theory.  Applying that rule to the jury's finding that the decedent was 60 percent responsible, the Court determined that the plaintiff's claims were barred and rendered a take-nothing judgment.  Chief Justice Jefferson (joined by Justice O'Neill) concurred.

In In re Chambless (No. 07-0767) (per curiam) the Court concluded that the trial court abused its discretion by ordering temporary grandparental visitation without allowing the custodial parent an opportunity to be heard.

In In re Office of the Attorney General (No. 08-0165) (per curiam), the Court determined that the trial court's temporary restraining order and related orders violated Texas Rules of Civil Procedure 680 and 684 in various ways and were therefore void.  Because TROs are not appealable, the Attorney General had no adequate remedy at law, and the Court granted mandamus relief.

Unless the Court issues a special set of orders next week, it appears that the last regular orders until late August may come on Friday, July 11.

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I'm a little late to this party—I just happened to be at a conference today and another function this evening with some of the lawyers involved—but the Texas Supreme Court denied the State's mandamus petitions in the FLDS cases this afternoon.  The Supreme Court of Texas Blog discusses the per curiam decision in the lead case and Justice O'Neill's concurring and dissenting opinion (joined by Justices Johnson and Willett) here.

5/30/08 Update:  Texas Lawyer has this follow-up story, which unfortunately fails to credit my friend Amy Warr, of Alexander, Dubose, Jones & Townsend, for the result she obtained on the mothers' behalf.

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In Merck & Co. v. Ernst (No. 14-06-00835-CV), the Fourteenth Court of Appeals has reversed Mark Lanier's $26.1 million judgment in a highly publicized Vioxx case and has rendered judgment that the plaintiff take nothing.  (The jury verdict included a $229 million award for punitive damages, which trial court reduced in accordance with statutory caps.)  The concluding paragraphs state:

The epidemiological evidence supports the conclusion that Vioxx use at a certain dose and duration is associated with an increased risk of thrombotic cardiovascular events.  The expert's speculation that a clot could have existed, but could have dissolved, been dislodged, or fragmented gives rise to nothing more than conjecture.  Crediting all favorable evidence that reasonable jurors could believe and disregarding all contrary evidence except that which they could not ignore, we find no evidence that Ernst suffered a thrombotic cardiovascular event, i.e., a myocardial infarction triggered by a blood clot.  Accordingly, appellee failed to show that the ingestion of Vioxx caused her husband's death.  Merck's first issue is sustained.

The judgment of the trial court is reversed and judgment is rendered that appellee take nothing.

Merck has aggressively defended these cases, rather than settle them.  Looks like that strategy will continue paying off.

Clarification:  My comment above is somewhat unclear, perhaps because I had a limited amount of time to write this post.  I accurately described Merck's litigation approach to the Ernst case and others—before it entered into a $4.85 billion global settlement late last year.  That may not seem aggressive, but some are speculating that Merck will save as much as $10 billion by resolving the cases this way.

5/30/08 Update:  Texas Lawyer has more detailed coverage, including Mark Lanier's reaction, here.  Also, I neglected to mention that my former firm defended the Ernst case and handled the appeal.  I was not involved at either level.

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The Texas Supreme Court issued two decisions with today's regular orders.

In Providence Health Center v. Dowell (No. 05-0386) (consolidated with Petit v. Dowell (No. 05-0788)), a negligence action against emergency-room personnel for failing to prevent a suicide, the Court concluded that any connection between releasing the patient and the patient's death was too attenuated for proximate cause.  The Court therefore reversed and rendered a take-nothing judgment.

In In re Team Rocket, L.P. (No. 06-0414) (orig. proceeding), the Court held that, once a trial court rules on the merits of a motion to transfer venue, a plaintiff cannot avoid the ruling by nonsuiting the case and re-filing in another county.

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In In re Steed (No. 03-08-00235-CV) (orig. proceeding) (per curiam), the Third Court of Appeals has conditionally granted the petition for writ of mandamus and vacated the district court's order placing more than 400 FLDS children in state custody.  The Supreme Court of Texas Blog, the ABA Journal, and other media outlets are reporting additional details.

Chief Justice Law, Justice Pemberton, and Justice Waldrop made the decision, but we don't know who wrote the opinion.  It's difficult to criticize deciding this case per curiam, given its  highly politicized and controversial subject matter and the national publicity it has received.

Update:  On closer examination, the Third Court's ruling in In re Steed does not purport to return all the FLDS children in CPS custody, only those belonging to the 38 relators in that proceeding.  The court reached the same result in a related case, In re Bradshaw (No. 03-08-00298-CV), also issued per curiam, which involved three additional relators.

After these orders, however, CPS would presumably change course on all the affected children.

A third case involving three more relators, In re Jessop (No. 03-08-00236-CV), remains pending.

5/23/08 Update:  Per coverage at CNN.com and the Salt Lake Tribune, the State is taking the matter up to the Texas Supreme Court.  The Deseret News posted unsigned PDFs of the mandamus petition and motion for emergency relief apparently filed today.

5/24/08 Update:  Per the Supreme Court of Texas Blog, the response to the State’s motion, the Court’s docket sheet, and a page with the electronic versions of the briefs (which should be updated when any further briefs are filed) are now available through the Texas Supreme Court's web site.

Given the present uncertainty, I have added a question mark to the title of this post.

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The Third Court of Appeals has released its opinion in the lead State Farm rate case, Geeslin v. State Farm Lloyds (No. 03-05-00067-CV).  So much for any concerns that the recent panel-switch would delay the decision—although the Court did not decide all the cases together, as Chief Justice Law indicated it might.  Here is the opening paragraph (footnote omitted):

This appeal concerns the validity of a rate order issued by the commissioner of insurance.  The rate order was based on now-expired article 5.26-1 of the insurance code, which provided the procedure by which Texas homeowners insurance providers were to file their initial homeowners insurance rates with the Texas Department of Insurance (“TDI” or the “department”) as required by Senate Bill 14 in 2003.  Tex. Ins. Code Ann. art. 5.26-1 (West Supp. 2004-2005).  The rate order required State Farm Lloyds to reduce its filed homeowners insurance rates by twelve percent.  State Farm Lloyds sought review in district court.  Finding that article 5.26-1 was unconstitutional and that State Farm Lloyds’s due process rights had been violated, the district court vacated the rate order.  Appellants now seek reversal of the district court’s judgment.  We conclude that the portion of section 4 of article 5.26-1 setting out what insurers are required to prove on appeal to the commissioner (“the proof provision”) is unconstitutional on its face and as applied to State Farm Lloyds.  Therefore, we affirm the judgment of the trial court in part as to its findings that the provision of former Article 5.26-1, section 4, which requires an insurer to prove that a rate reduction would produce inadequate rates, is unconstitutional and that State Farm Lloyds’s due process rights were violated.  Because we further hold that the unconstitutional proof provision is severable, we sever that provision, reverse the trial court’s judgment as to the constitutionality of the remainder of the statute, and remand to the department for further proceedings consistent with this opinion.

Lots of juicy issues here.  This dispute seems far from over.

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The following is a guest post from Roger Hughes of Adams & Graham, LLP:

Lawyers, and perhaps appellate attorneys, now face a new problem if their briefs or pleadings stretch facts or are flat wrong about them.  That problem is indictment and jail.  This week, the Texas Court of Criminal Appeal decided round two of Vasilas v. State ( PD-1473-06) (May 7, 2008).  The Court reversed the trial court’s ruling that quashed the indictment against an attorney who allegedly made a false statement in a civil pleading.

Vasilas was an attorney for a criminal defendant who beat the criminal charges; Vasilas then filed an expunction suit.  The petition he prepared contained factual error.  Unamused, the DA indicted Vasilas under Texas Penal Code § 37.10(a), which prohibits making false entries in a “government record.”  This is a felony if there is an intent to defraud.  The trial judge quashed the indictment.  Still unamused, the DA appealed.

In the first round, the Court held that a petition in a civil case was a “government record” for the purpose of Section 37.10.  Vasilas v. State, 187 S.W.3d 486 (Tex. Crim. App. 2006).  It remanded to the Dallas Court of Appeals, which determined that the civil rule about frivolous pleadings, TRCP 13, did not supplant the Penal Code and remanded for trial.  Vasilas returned to Court of Criminal Appeals, joined by amici TTLA and TADC.

In Vasilas II, the Court decided that the doctrine of in pari materia did not apply.  Because TRCP 13 was a court rule, not a statute, it doesn't trump the Penal Code for false statements in civil case pleadings.  The Legislature did not write TRCP 13, so there was no reason to use it construe or control Section 37.10.

The upshot is that, no matter what the judge in a civil case does, the DA can still indict and prosecute for arguably false statements in a brief or pleading.  It's a bit scary to think that you can defeat a motion for sanctions over a statement in your brief, but your opponent can still get you indicted.

Think about going to jail for something in your factual statement the next time you write a a brief.  Your ultimate audience may be the DA and a criminal jury.

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The Texas Supreme Court issued one new decision and one substituted opinion with this week's regular Friday orders.

In Perry Homes, a Joint Venture v. Cull (No.  05-0882), the Court held that the plaintiffs waived their right to arbitration by substantially invoking the litigation process, including "request[ing] hundreds of items of merits-based information and conduct[ing] months of discovery under the rules of court" before changing their minds "only four days before the trial setting . . . and decid[ing] they would prefer to arbitrate after all."  The Court vacated an $800,000 arbitration award and "remanded the case to the trial court for a prompt trial."

This is a significant decision that warrants further study and analysis.  I will likely post about it further when time permits.

In Igal v. Brightstar Information Technology Group, Inc. (No. 04-0931), the Court withdrew its December 7, 2007 opinion, substituted a new one in its place, and denied the parties' motions for rehearing.  The votes and the result remain the same.

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After last week's barrage (from which I'm not the only one still recovering), the Texas Supreme Court issued just two decisions with this week's orders.

In Ansell Healthcare Products, Inc. v. Owens & Minor, Inc. (06-0386) (per curiam), the Court followed last week's decision involving the same parties and issues, Owens & Minor, Inc. v. Ansell Healthcare Products, Inc. (No. 06-0322).  There, the Court held that, under Section 82.002 of the Civil Practice and Remedies Code, manufacturers must indemnify an "innocent seller" only for the portion of the defense associated with the seller's own products.  Because the court of appeals' decision conflicted with that rule, the Court reversed and remanded to the trial court for further proceedings.

In Texas Mutual Insurance Co. v. Ledbetter (No. 06-0814), the Court concluded that an insurance carrier should have been allowed to intervene and assert its statutory subrogation claim to the "first money" paid out in a court-approved wrongful-death settlement.  Although the plaintiffs had an absolute right to nonsuit their own claims, the carrier's intervention was a pending claim for affirmative relief that could not be prejudiced by a nonsuit.  The Court affirmed the court of appeals' judgment reinstating the intervention, but otherwise reversed and remanded the case to the trial court to sort out the details.

In other noteworthy developments, the Court granted rehearing in Entergy Gulf States, Inc. v. Summers (No. 05-0272), a controversial decision publicly rebuked by legislators.  No date has been set for oral argument.

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The blogosphere has been a little slow catching on to yesterday's SCOTUS decision in Hall Street Associates, L.L.C. v. Mattel, Inc. (06-989).  Aside from my own post, here are the blog entries I have found discussing the case:

• Adjunct Law Prof Blog, which opines that parties to a collective bargaining agreement can still alter the standard of judicial review because they are governed by 29 U.S.C. § 1985 (Section 301) and common law, rather than the FAA.
  
• Blawgletter, which surmises that the decision might re-focus attention on the arbitration process itself and mentions that parties who remain concerned about an arbitrator "going off the reservation" might consider adopting an arbitration appeal procedure.
  
• Federal Civil Practice Bulletin, which summarizes the majority opinion.
  
• Northwest Business Litigation Blog, which does the same.
  
• SCOTUSwiki, which has a lot of background information on the case.
  
• Supreme Court of Texas Blog, which focuses on how the case may affect Bison Building Materials, Ltd. v. Aldridge (No. 06-1084), a case currently pending in the Texas Supreme Court—and rightly points out that Hall Street may be flying under the radar because it was issued the same day as "the much sexier Medellin v. Texas decision."
  
• WorkPlace Prof Blog, which found the outcome surprising and somewhat troubling because it might restrict contracting parties' ability to bargain for procedural protections not specifically addressed in the FAA.

I will supplement this list as new discussions come to my attention.

3/27/08 update with additional links:

• ADR Prof Blog
• ADR Prof Blog (follow-up)
• Disputing
• LawMemo Arbitration Blog
• National Arbitration Forum Blog

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In Hall Street Associates, L.L.C. v. Mattel, Inc. (06-989) (previously discussed here), the U.S. Supreme Court has held that a contract purporting to allow judicial review of an arbitration award for evidentiary and legal errors cannot be enforced under the Federal Arbitration Act.

Although this decision shutters the notion that parties can contract for expanded judicial review under the FAA, it does not preclude enforcement of such agreements under state law.  The key is whether the underlying agreement "involves commerce"—something the Hall Street parties did not litigate—and thereby triggers the federal statute.  Thus, in an effort to preserve existing agreements for enhanced review, parties will contend that state arbitration law applies.  Going forward, contracting parties will more likely turn to "arbitration appellate panels," building a level of review into the arbitration process before reaching any potential judicial remedies.

In vehemently defending the narrow statutory bases for vacating arbitration awards, Hall Street muddies the water with respect to whether judicially created vacatur grounds such as "manifest disregard of the law" and "violation of public policy" remain valid.  Those grounds were not squarely at issue—manifest disregard is mentioned in the majority opinion, but public policy is not—yet the Court describes the FAA bases for vacatur and modification as "exclusive."  Federal and state courts applying the FAA will face these issues in the near future.

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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 following chart from the Houston Chronicle depicts how long argued cases have been pending before the Texas Supreme Court and the number of deciding opinions each of the justices wrote in Fiscal Year 2007.  Though intended to expand on recent controversies, it provides some perspective nonetheless.

 

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In Texas Comptroller of Public Accounts v. Attorney General of Texas (No. 03-07-00102-CV), the Third Court of Appeals has agreed with an attorney general opinion that state employees' birth dates are public information subject to disclosure under the Texas Public Information Act.  Justice Diane Henson (pictured) wrote the panel opinion (joined by Chief Justice Law and Justice Waldrop) affirming the trial court's summary judgment for the AG.  The appellate court also rejected a request for attorney's fees by The Dallas Morning News, which made the public information request that generated the controversy.

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Roger Hughes tipped me off to this opinion from the Thirteenth Court of Appeals, which borrows a Spanish expression I had the privilege of learning directly from the source cited, former Texas Supreme Court Justice Raul Gonzalez.  Roughly translated, ya basta means "enough is enough."

As Roger observed:

The 13th Ct App (notoriously lenient in putting up with the difficult appellant) finally sanctions someone and their lawyer for a frivolous mandamus.  After finding counsel's citation to authority so bad as to be "bad faith", the court states:

Finally, we order Mr. Leas to cease and desist from filing frivolous motions and pleadings in this Court and the trial court.⁽⁸²⁾  Ya Basta!⁽⁸³⁾

Sanctions with salsa.  Only in Texas.

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In Charles v. Grief (No. 07-50537), the Fifth Circuit has affirmed the district court's denial of a state official's motion for summary judgment based on qualified immunity because the official's immunity turned on fact issues.  What is remarkable about this decision is the following section from the circuit court's opinion, which is worth quoting in full (footnote omitted):

The cost in time and money incurred by a public employee who has sued in the belief that he has suffered an adverse employment action as the result of unconstitutional retaliation is significantly increased when, as here, the defendant takes a clearly unwarranted appeal of an interlocutory denial of qualified immunity.  Taking such an appeal is now unconscionable in light of this courts burgeoning precedent uniformly rejecting such appeals of fact-based denials of qualified immunity for lack of appellate jurisdiction, our most recent being Connelly.  Considering the usual disparity in the financial conditions of the parties to such actions, cavalierly taking such an appeal smacks of economic duress.  Indeed, this is at least the second such case this year in which the office of the Attorney General of Texas has improvidently brought and doggedly prosecuted such an appeal, Connelly being another.  We trust that counsel for Grief, as well as all other counsel who represent public employers and state actors in such roles, will henceforth carefully heed the case law of this court on point and be chary to take appeals of interlocutory orders denying qualified immunity on grounds of the existence of genuine factual disputes, lest they incur penalties, sanctions, damages for, e.g., frivolous appeals, or worse.

Do you think General Abbott's staff got the message?

11/28/07 Update:  The Fifth Circuit issued a revised opinion today, leaving the above-quoted language intact.

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As promised, here are some very brief summaries of the latest Texas Supreme Court opinions.

In In re Pirelli Tire, L.L.C. (No. 04-1129) (orig. proceeding), a case brought by non-U.S. residents, the Court held that the trial court abused its discretion by denying a motion to dismiss based on forum non conveniens.  The Court relied on the private and public interest factors set out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) and held that they "clearly and overwhelmingly favor a Mexican forum for resolution of this dispute."  The Court further held that the "[e]rroneous denial of an forum-non-conveniens motion . . . cannot be adequately rectified on appeal."  Justice Willett (joined by Justice Wainwright) issued a concurring opinion, and Justice Johnson (joined by Chief Justice Jefferson) dissented.

In both Springer v. Springer (No. 06-0382) (per curiam) and Sprowl v. Payne (No. 06-0533) (per curiam), the Court held that dismissal of an appeal was improper even though the appellant failed to either pay the filing fee or file an affidavit of indigence "with or before" the notice of appeal as TRAP 20.1(c)(1) requires.  Relying on TRAP 44.3, the Court reversed the court of appeals' judgment of dismissal in both cases, concluding that "failure to file an affidavit of indigence 'with or before' a notice of appeal will not support dismissal unless the appellant is given a reasonable time to correct the defect and fails to do so."

In Knapp Medical Center v. De La Garza (No. 06-0575) (per curiam), the Court held that TRCP 11 barred enforcement of a disputed oral settlement agreement reached during trial.

In Bossier Chrysler-Dodge II, Inc. v. Rauschenberg (No. 06-0874) (per curiam), the Court reversed and remanded the case to the court of appeals in light of Barker v. Eckman, 213 S.W.3d 306 (Tex. 2006), which held that the issue of attorney's fees should ordinarily be retried when damages are significantly reduced on appeal.

In In re J.A.J., (No. 07-0511), the Court held that an appellant whose parental rights have been terminated must specifically assign error to the Department of Family and Protective Services' appointment as conservator.  If the parent appeals only the termination decision, any error in the conservatorship appointment is waived.

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In Vaughn v. American Honda Motor Co. (No. 07-41056), the Fifth Circuit has held that the district court's decision to require any objector to a class action settlement to post a $150,000 bond for costs on appeal was an abuse of discretion.  Concluding that the district court could not use FRAPs 7 and 38 to effectively bar an appeal, the circuit court reduced the bond amount to $1,000.

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In In re Volkswagen of America, Inc. (No. 07-40058), the Fifth Circuit has held that a district court sitting in the Eastern District of Texas, Marshall Division, abused its discretion by failing to transfer this product liability case to the Northern District of Texas, Dallas Division.  The Fifth Circuit granted mandamus relief, concluding that the district court incorrectly applied the private and public interest factors relevant to transfer motions brought under 28 U.S.C. § 1404.

Update:  Per this order, the Fifth Circuit will rehear the case en banc.

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In Saudi Refining, Inc. v. Combs, the Third Court of Appeals has held that it lacked jurisdiction to decide an appeal from a summary judgment signed in 2003.  In an opinion authored by Chief Justice W. Kenneth Law (pictured), the court rejected an argument that the omission of costs sought by the defendants was sufficient to render an otherwise final judgment interlocutory.  The court thus dismissed the appeal for want of jurisdiction.

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Residing and practicing in Austin, I follow the Third Court of Appeals pretty closely.  I note that the Court has not released a substantive opinion in a civil case since September 14, 2007.  Are we headed for a barrage?

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In Wolk v. Wolk, the Third Court of Appeals has reversed a no-answer default divorce decree challenged in a restricted appeal, holding that error was apparent on the face of the record because the plaintiff presented no evidence identifying, describing, and valuing community assets awarded in the decree.  Without this evidence, the trial court could not have divided the community estate in a manner that was "just and right" under Texas Family Code § 7.001.  Accordingly, the appellate court reversed the decree and remanded the case for a new trial on the issues appellant raised, which also included child support and attorney's fees.

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In Romano v. Newton, the Third Court of Appeals has affirmed a post-answer default judgment, conditioned on a remittitur of all but $29,544.47 of the original $176,150.68 judgment amount.  The appellate court held that the trial court acted within its discretion by overruling the defendant's equitable motion for new trial, but that the plaintiff presented no evidence supporting the damages and attorney's fees awarded above the sum sought on a sworn account.  On its own motion, the court of appeals suggested a remittitur for the difference.

Update:  On December 7, 2007, the court of appeals issued a supplemental opinion noting that the plaintiff did not file a remittitur. Thus, in accordance with its prior opinion, the Court reversed the district court's judgment and remanded the case for a new trial on unliquidated damages and attorney's fees.

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Well, the long weekend and resulting short week caught up to me, and it turns out that I won't be able to post summaries of the most recent Texas Supreme Court decisions as intended.  The fact that I am attending the Advanced Appellate Seminar here in Austin tomorrow and Friday hasn't helped that cause.  If things slow down, I may write about some of the individual cases.  In any event, Osler McCarthy's excellent summaries are available here.

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In Osborne v. Jauregui, Inc., a dispute over a defectively built home,a divided panel of the Third Court of Appeals has reversed and remanded the trial court's judgment declining to award the plaintiffs attorney's fees and denying an intervening insurer's subrogation claim.

Plaintiffs sued the architect/builder and several subcontractors, alleging DTPA violations and other causes of action.  Their homeowners insurer (State Farm) intervened to assert subrogation rights for benefits previously paid.  Plaintiffs settled with all defendants except the builder, against whom they proceeded to trial and obtained an $835,158 jury verdict.  After applying a dollar-for-dollar credit for the $1,260,500 in settlement proceeds, the trial court refused to award attorney's fees under the DTPA, denied State Farm's subrogation claim, and rendered a take-nothing judgment. Plaintiffs and State Farm appealed.

The appellate court first concluded that plaintiffs were "prevailing parties" entitled to attorney's fees under the DTPA, even though the settlement credit negated the jury's damage award.  Noting a split of authority on this issue, the court distinguished this case on the basis that it did not involve prior payments by the same defendant against whom plaintiffs had gone to trial.  Because plaintiffs prevailed against the lone remaining defendant, who had not contributed to the settlement, they were entitled to fees.  The court remanded for calculation of the appropriate amount.

Addressing State' Farm's issues, the court of appeals acknowledged the Texas Supreme Court's recent decision in Fortis Benefits v. Cantu, which held that contract-based subrogation rights trump equitable considerations.  Although the court of appeals criticized the positions State Farm took in the litigation and noted that State Farm did not allocate the settlement proceeds to losses covered by insurance payments, it nevertheless reversed and remanded the subrogation issue so that the trial court could review the contractual subrogation language under Fortis Benefits and determine whether the policy or equitable principles control.

Justice Puryear dissented, citing his belief that plaintiffs were not prevailing parties in light of the one-satisfaction rule and thus are not entitled to attorney's fees.  Applying Fortis Benefits, Justice Puryear further concluded that the insurance contract governed the subrogation issue and that State Farm was entitled to subrogation against the settlement funds.

This is a very interesting case.  When the dust settles, I expect the supreme court will give it a close look.

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In Wallace v. Texas Department of Health, the Third Court of Appeals has held that the trial court acquired subject-matter jurisdiction over a prematurely filed Texas Commission on Human Rights Act claim when the statutory administrative period ended.  Under the statute, the Commission had exclusive jurisdiction over the dispute until 180 days after the employee filed his administrative complaint or until he received a right-to-sue letter from the Commission.  The appellate court reversed the trial court's judgment granting the Texas Department of Health's plea to the jurisdiction after concluding that the employee was not required to dismiss and re-file his lawsuit before jurisdiction could vest in the district court.

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In AXA Financial, Inc. v. Roberts, a consolidated interlocutory appeal and mandamus proceeding previously discussed here, the Third Court of Appeals has turned away efforts to compel arbitration under both the Texas and federal statutes.  The court first held that it lacked jurisdiction over the interlocutory appeal because the notice of appeal was not filed timely (within 20 days of the district court's order denying the motion to compel arbitration) and because a "motion to reconsider" neither extended the appellate timetable nor qualified as an independently appealable order.  Considering the mandamus petition, the court of appeals concluded that the relator failed to establish the existence of an arbitration agreement covering the dispute and that the district court acted within its discretion in refusing to consider "new" evidence submitted with the motion to reconsider.

This opinion contains a good summary of Texas arbitration law, particularly the procedure and burdens of proof relating to a motion to compel arbitration.  The lessons learned are (1) remember that an appeal from an order denying a motion to compel arbitration is accelerated, making the notice of appeal due in 20 days rather than the usual 30; and (2) if you are the movant, gather and present your evidence on the first go-round because you might not get a second chance.

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In GWTP Investments, L.P. v. SES Americom, Inc., the Fifth Circuit has reversed in part the dismissal of plaintiff's breach-of-contract and fraud claims.  Although the circuit court agreed that the statute of frauds precluded recovery on the alleged contract, it rejected the district court's conclusion that the fraud claim was merely a "repackaged" contract claim because (1) some of the alleged misrepresentations occurred after the putative contract was formed; and (2) plaintiff sought only reliance damages, not benefit-of-bargain damages, for fraud.  The circuit court also affirmed the district court's summary judgment on plaintiff's claim for breach of fiduciary duty.

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In Texas A&M University v. Bading, a case stemming from the 1999 Aggie bonfire disaster, the Waco Court of Appeals has reversed the trial court's denial of the University's plea to the jurisdiction based on sovereign immunity.  The appellees were defendants in wrongful death and personal injury actions who brought various claims against the University for(1) contribution and indemnity, (2) proportionate responsibility findings under Chapter 33 of the Civil Practice and Remedies Code, and (3) breach of contract.  Finding no statute or legislative resolution waiving the state's immunity, the appellate court rendered judgment dismissing these claims.

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In Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, the Fifth Circuit has held that ERISA trumped a divorce decree purportedly divesting an ex-spouse of her interest in any "retirement plan, pension plan, or like benefit program existing by reason of [decedent's] employment."  The decedent never removed his ex-wife as the designated beneficiary, and the decree did not meet the requirements of a "qualified domestic relations order" under ERISA.  Therefore, the decree did not trigger an exception to the statute's "anti-alienation provision," which prohibits assignment or alienation of benefits provided under an employee pension benefit plan.  The ex-spouse collected about $400,000 because of this mistake.

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As reported in Blawgletter, the Fifth Circuit handed down two more Katrina-related insurance decisions yesterday, reaching the same basic result as the case discussed here last week.  Arias-Benn v. State Farm Fire & Casualty Insurance Co. involved damage to refrigerators and freezers from post-storm putrefaction of their contents.  Chauvin v. State Farm Fire & Casualty Co. dealt with exclusion of "flood" damage from homeowner policies.  Insurance companies 3, insureds 0.

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In In re Katrina Canal Breaches Litigation, the Fifth Circuit has rejected several insurance policyholders' attempts to obtain coverage for water damage caused by Hurricane Katrina, despite exclusions for damages caused by "flood," based on allegations that the inundation of water into the City of New Orleans resulted from the negligent design, construction, and maintenance of the levees along three canals.  The plaintiffs argued that the policies were ambiguous because the flood exclusions did not clearly exclude coverage for water inundation caused by negligence.  The circuit court held that, aside from any negligence, the policy exclusions unambiguously precluded recovery.

Update:  Here is a list of all counsel involved in the Fifth Circuit appeal.  See the WSJ Law Blog for some interesting coverage and comments, as well as a YouTube video set to Led Zeppelin's When the Levee Breaks.

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I found another free interest calculator through JudgmentCenter.com, which offers training courses on how to make money collecting judgments.  I ran some hypotheticals, and this calculator seems more accurate than the one linked in the previous post.  (For that reason, I am substituting this one in the "Useful Links" section on the home page.)  The key, of course, is knowing the current judgment interest rate, which is published in the Texas Credit Letter, available through the the "Interest Rates" link on the Office of Consumer Credit Commissioner's web site.

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A judgment-collection outfit called the National Judgment Network has a free online interest calculator that may come in handy when you need to calculate interest for purposes of preparing a final judgment, supersedeas bond, etc.  I wouldn't rely on it exclusively, but it looks like it might be a good place to start.  The calculator now appears in the "Useful Links" section on the upper right portion of this blog's home page.

Update:  On closer inspection, this calculator seems to figure compound interest (which is inconsistent with Texas law) and the rate is also outdated.  See the next post for what looks like a better alternative.

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Over at Law.com,appellate practitioner and How Appealing blogger Howard J. Bashman has this piece about the stare decisis effect of federal circuit court decisions predicting state law when intermediate state appellate courts have since reached a different result.  As cited in a law review article surveying the circuits' various approaches to this issue, the Fifth Circuit laid out its rule in FDIC v. Abraham, 137 F.3d 264 (5th Cir. 1998):

We are, of course, a strict stare decisis court.  One aspect of that doctrine to which we adhere without exception is the rule that one panel of this court cannot disregard, much less overrule, the decision of a prior panel.  Adherence to this rule is no less immutable when the matter determined by the prior panel is the interpretation of state law:  Such interpretations are no less binding on subsequent panels than are prior interpretations of federal law. . . .

We conclude then, that when our [Erie Railroad Co. v. Tompkins] analysis of controlling state law is conducted for the purpose of deciding whether to follow or depart from prior precedent of this circuit, and neither a clearly contrary subsequent holding of the highest court of the state nor a subsequent statutory authority, squarely on point, is available for guidance, we should not disregard our own prior precedent on the basis of subsequent intermediate state appellate court precedent unless such precedent comprises unanimous or near-unanimous holdings from several—preferably a majority—of the intermediate appellate courts of the state in question.

Absent definitive statutory or Texas Supreme Court authority, lawyers otherwise constrained by a Fifth Circuit prediction of Texas law should examine whether intervening court of appeals decisions hold differently on the issue at hand.  If so, Abraham may create an argument that a Fifth Circuit panel is not bound by the prior Erie prediction and need not wait for an en banc ruling to reach a contrary result.

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In another chapter of the most recent school-finance case, Neeley v. West Orange-Cove Consolidated Independent School District, the Third Court of Appeals has rejected the State's challenge to the district court's $4 million attorneys' fee award.  The court of appeals held that the State waived its argument that certain constitutional provisions precluded the districts from recovering such fees by failing to raise the argument in its direct appeal to the Texas Supreme Court.  Applying the Uniform Declaratory Judgments Act, the court further held that that the award was "equitable and just."

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In Smith International, Inc. v. The Egle Group LLC, the Fifth Circuit has reversed in part the district court's summary judgment on the plaintiff's claims for breach of contract, negligence, and indemnity.  Although it agreed with the district court that the contract and negligence claims were time-barred under Texas law, the circuit court concluded that neither res judicata nor limitations precluded the indemnity claim.  The opinion contains an interesting discussion of "liability" versus "damages" indemnity agreements and explains the different accrual rules for each.

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In Levy v. OfficeMax, Inc., the Third Court of Appeals has reversed the dismissal of class claims that OfficeMax and Best Buy must assign tax refund rights to customers who mailed in product rebates.  On remand, the trial court will consider whether such assignments can be compelled and whether a class should be certified.

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The Fifth Circuit recently issued a decision confirming an arbitration award in American Laser Vision v. Laser Vision Institute (No. 06-10260).  The losing party sought to vacate the award on grounds that the arbitrator exceeded his authority and manifestly disregarded the law.

As noted over at Disputing, the decision breaks no new ground, but "is still helpful as a recent and cogent explanation of the analysis on these two fairly common grounds parties assert when attempting to appeal arbitral awards."

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Authoritative enough for the Fifth Circuit, apparently.  Last week, in Exxon Mobil Corp. v. Commissioner (note 1), a circuit panel cited the online encyclopedia for its definition of the accounting term "accrue."  (Hat tip to Appellate Law &Practice.)

Are internet-savvy clerks are showing their influence?  Should the Fifth Circuit rely on a wiki of uncertain authorship to define a term of art?

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In Polk v. City of Killeen, the Third Court of Appeals has affirmed a take nothing summary judgment on the plaintiff's survival claim.  What makes this otherwise run-of-the-mill decision interesting is that the claim arose from a collision between an ambulance transporting the decedent (who had been found unresponsive at his workplace) and another vehicle.  The court of appeals held that an emergency room physician's affidavit testimony that the decedent was "unable to be brought back to life from the time he was first treated by Kileen Fire Department EMS" where he collapsed conclusively established that the decedent did not sustain an injury while he was alive.  Because the plaintiff had no controverting evidence, summary judgment was proper on both traditional and no-evidence grounds.

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