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

The Texas Supreme Court issued three opinions with today's regular Friday orders.

In In re Roberts (No. 05‑0362) (orig. proceeding) (per curiam), the Court concluded that allowing plaintiffs a 30-day grace period to amend expert reports in a health-care liability case "does not substantially prolong litigation or allow for extensive discovery" and therefore does not cause the kind of delay for which mandamus is available under its recent decision in In re McAllen Medical Center.  The Court somewhat snidely observed that this original proceeding had delayed the case for four years, in contrast to the the mere 30-day delay the extension would have caused.

In In re Methodist Healthcare System of San Antonio, Ltd. (No. 05-0575) (orig. proceeding) (per curiam), a health-care liability case involving the trial court's refusal to dismiss based on allegedly defective expert reports, the Court conditionally granted mandamus relief and instructed the court of appeals to consider whether an adequate appellate remedy exists in light of In re McAllen Medical Center.

In FKM Partnership, Ltd. v. Board of Regents of the University of Houston System (05‑0661), the Court held that the trial court retained jurisdiction over a condemnation action after the condemning authority amended its petition to reduce the amount of property to be taken by more than 97 percent.  The Court further held that the condemning authority was liable to the landowner for certain fees and expenses because the reduction in property condemned effectively dismissed the original proceeding.  Justice Willett issued an opinion concurring and dissenting in part.

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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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The Texas Supreme Court decided six cases and issued one substituted opinion with this week's orders.  Briefly, the new decisions are:

• First American Title Insurance Co. v. Combs (No. 05-0541), affirming the Comptroller's interpretation of a retaliatory tax statute affecting foreign insurers.
  
  
• In re McAllen Medical Center (No. 05-0892) (orig. proceeding), holding that appellate courts may review the adequacy of expert reports required by the Medical Liability Act when the statute's purposes would otherwise be defeated.  The Court conditionally granted the writ and ordered the trial court to dismiss the plaintiffs' claims against the hospital.
  
  
• Canyon Regional Water Authority v. Guadalupe-Blanco River Authority (No. 06-0873), deciding a state water authority's easement rights involving a lake.
  
  
• In re Citigroup Global Markets, Inc. (No. 06-0886) (orig. proceeding) (per curiam), concluding that removing a case to federal court before filing an answer did not waive the defendants' right to arbitration.  Compare Perry Homes v. Cull (No. 05-0882), previously discussed here.
  
  
• Higgins v. Randall County Sheriff's Office (No. 06- 0917), holding that an uncontested affidavit of indigence entitled the appellant to pursue his appeal without advance payment of costs.
  
  
• City of Dallas v. Reed (No. 07-0469) (per curiam), determining that a two-inch variance between traffic lanes was neither a special defect nor a premises defect for purposes of the Tort Claims Act.

I expect we'll see some lively discussion of McAllen Medical Center, Citigroup, and Reed in the coming days.

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The Texas Supreme Court issued its first decision of 2008 with today's orders.  In In re Brookshire Grocery Co. (No. 05-0300), the Court held that a motion for new trial filed within 30 days of judgment, but after a preceding motion for new trial had been overruled, did not extend the trial court's plenary power under TRCP 329b.  The Court based its decision on language in the rule allowing an amended motion to be filed without leave of court when no preceding motion for new trial has been overruled and the amended motion is filed within 30 days of the judgment.  Chief Justice Jefferson's majority opinion (in which Justices O'Neill, Medina, Johnson, and Willett joined) also relies on the rule's history and purpose.

The trial court denied Brookshire's first motion for new trial and signed a judgment conforming to the jury's verdict.  More than 30 days after signing the judgment, the trial courtattempted to grant Brookshire's second motion for new trial, which was filed within 30 days of the judgment but after the first motion was overruled.  Under these facts, the supreme court concluded that the trial court lacked jurisdiction to grant a new trial and agreed with the court of appeals' decision to order mandamus relief.

Justice Hecht (joined by Justices Wainwright, Brister, and Green) dissented.  The dissenting justices would have held that the second motion extended the plenary period, and thus would have allowed the trial court to rescind its judgment in favor of a new trial.

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The Texas Supreme Court handed down six decisions with this week's orders.

In Mid-Century Insurance Co. v. Ademaj (No. 05-0016), a declaratory judgment action, the Court held that insurers may lawfully collect Texas Automobile Theft Prevention Authority fees from auto insurance policyholders without including such fees in rate filings required under Article 5.101 of the Insurance Code.  Because the trial court and court of appeals concluded otherwise, the supreme court reversed and rendered judgment that plaintiff take nothing.  Justice O'Neill (joined by Justice Medina) issued a concurring opinion.

In Houston Municipal Employees Pension System v. Ferrell (No. 05-0587), the Court held that 29 members of the Pension System could not bring a declaratory judgment action to adjudicate their rights under the statute that created the System.  Because the statute expressly provides that the administrative agency's interpretation is "final and binding on any interested party," the Court held that the trial court lacked jurisdiction over the case, reversed the court of appeals' judgment, and dismissed for want of jurisdiction.  Justice Brister (joined by Justice O'Neill) concurred.

In Montgomery County, Texas v. Park (No. 05-1023), the Court defined an "adverse" personnel action under the Texas Whistleblower Act (which provides no definition) as one that "would be likely to dissuade a reasonable, similarly situated worker from making a report under the Act."  Concluding thatplaintiff failed to meet that definition, the Court reversed the court of appeals' judgment and rendered judgment for the County.

In Ogletree v. Matthews (No. 06-0502), the Court determined that a defendant in a health-care liability action has no right to an immediate interlocutory appeal when the trial court denies a motion to dismiss and grants the claimant a 30-day extension of time to cure defects in otherwise timely served expert reports.  Because the court of appeals reached the same conclusion, the supreme court affirmed the lower court's judgment.  Justice Willett delivered a concurring opinion.

In Best Buy Co. v. Barrera (No. 07-0028) (per curiam), a class action in which plaintiffs sought return of restocking fees, the Court followed its recent decision in Stonebridge Life Insurance Co. v. Pitts andconcluded that individual issues will predominate over common issues of proof.  Holding that plaintiffs thus failed to satisfy TRCP 42(b)(3)'s predominance requirement, the Court reversed the court of appeals' judgment affirming the class-certification order and remanded the case to the trial court.

In In re McKee (No. 06-0055) (orig. proceeding) (per curiam), the Court denied a mandamus petition seeking to invalidate an administrative judge's assignment of one trial judge to hear a recusal motion involving another trial judge when the administrative judge had previously recused himself from the case.  Noting that it had previously declined mandamus relief from the denial of a recusal motion, the Court applied the updated Prudential standard and concluded that there would be no significant benefit to granting relief in this case.

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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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The Texas Supreme Court issued four opinions with this week's orders.

In In re U.S. Home Corp. (No. 03-1080) (per curiam), a dispute between a homebuilder and purchasers, the Court conditionally granted mandamus relief from a trial court order refusing to compel arbitration, holding that no evidence supported any of the asserted defenses to enforcement of the arbitration clause.  The Court declined the defendants' invitation to reverse the trial court's class certification order because the court of appeals had not yet ruled on that request.

Answering certified questions from the Fifth Circuit in Mid-Continent Insurance Co v. Liberty Mutual Insurance Co. (No. 05-0261), the Court held under the facts of the case that one insurer owed a second insurer no duty (directly or by subrogation) to compensate the second insurer for paying more than its proportionate share of a settlement to which both contributed.  Justice Willett delivered a concurring opinion providing his additional thoughts on why Texas law should not recognize such a claim.

In In re SCI Texas Funeral Services, Inc. (06-0385) (per curiam), the Court conditionally granted mandamus relief from discovery and sanctions orders in a putative class action because the court of appeals' reversal of class certification "render[ed] the class-wide discovery superfluous and the class-wide sanctions incongruous."

In BFI Waste Systems of North America, Inc. v. North Alamo Water Supply Corp. (No. 06-0602) (per curiam), the Court denied both petitions for review, but indicated that the court of appeals (in footnote 6 of its opinion) had improperly commented on the validity of a discharge permit, an issue not before that court.  The supreme court agreed with petitioners' argument that the court of appeals' comments should not prejudice future litigation over the discharge permit.

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The Texas Supreme Court ended its summer recess with a bang by issuing seven opinions today.

In In re H&R Block Financial Advisors, Inc., the per curiam Court conditionally granted mandamus relief from a trial court's order refusing to stay the plaintiffs' lawsuit in light of an arbitration clause.  The Court rejected the plaintiffs' attempts to avoid arbitration with their investment advisor and his firm over Enron-related losses because the firm had changed its name and because the advisor did not sign the investment agreements in his personal capacity.

In In re Merrill Lynch Trust Co., the Court conditionally granted mandamus relief and compelled arbitration against employees of the entity with whom plaintiffs agreed to arbitrate, but not affiliates of that entity.  With respect to the employee, the Court reasoned that the substance of plaintiffs' lawsuit was against the signatory, even though it was not named as a party, and that the signatory would be liable for the employee's torts.  Regarding the affiliates, the Court rejected "an estoppel theory based on substantially interdependent and concerted misconduct" as a basis for imposing an obligation to arbitrate upon a nonsignatory, even though the case was governed by the Federal Arbitration Act and the Fifth Circuit has recognized such a theory.  Justice Hecht (joined by Justice Medina and in part by Justice O'Neill) and Justice Johnson (joined by Justice Wainwright) each issued opinions concurring and dissenting.

In Energy Service Co. v. Superior Snubbing Services, Inc., the Court held that a Worker's Compensation-subscribing employer's agreement to indemnify a person and that person's contractors was an agreement with the contractors for purposes of the Worker's Compensation Act, as amended in 1989.  Justice Johnson (joined by Justices Wainwright, Green, and Willet) dissented.

In Fort Worth Independent School District v. Service Employment Redevelopment, the per curiam Court continued the trend of remanding breach-of-contract cases against governmental entities to allow plaintiffs to argue that the legislature waived sovereign immunity under new Sections 271.151-.160 of the Local Government Code.

In Gaines v. Kelly, a no-evidence summary judgment case, the Court held that the borrower/plaintiff presented no evidence that a mortgage broker had apparent authority to bind a lender and therefore rendered judgment that the plaintiff take nothing on the borrower's claim against the lender based on the mortgage broker's alleged misrepresentations.

In In re Kaplan Higher Education Corp., the per curiam Court conditionally granted mandamus relief from a trial court's order refusing to compel arbitration under an agreement between a vocational college and 45 of its students, even though the students had dropped their direct claims against the college and were asserting claims against only the president and admissions director, because the substance of the action was fraudulent inducement and because the college would have been liable for the judgment under the Education Code and common law.

The following statement from Elledge v. Friberg-Cooper Water Supply Corp. (per curiam) says it all:  "We reject the court of appeals' 'obiter dictum' label.  Our statements that the two-year statute [of limitations, rather than the four-year statute] applies to unjust enrichment claims, though not essential to the outcomes in HECI [Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998)] and Wagner & Brown, [Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001)], should have been followed."

Ouch!

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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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With last week's orders, the Texas Supreme Court decided five cases, four of which involved per curiam opinions.

In Goodyear Tire & Rubber Co. v. Mayes, the Court concluded that the plaintiff failed to raise fact issues sufficient to preclude summary judgment.  Reversing a divided court of appeals for failure to apply the proper standard of review, the Court rendered judgment that the plaintiff take nothing.

In In re Allied Chemical Corporation, a divided Court conditionally granted mandamus relief to defendants in a mass-tort case set for trial even though the plaintiffs had never identified medical experts who could connect their diseases to the defendants' products.  The Court determined that the trial setting was premature and that mandamus was appropriate (1) to avoid a "monumental waste of judicial resources," (2) because the trial setting effectively denied discovery going to the heart of the defendants' case, and (3) because the setting severely compromised the defendants' ability to present any case at all at trial.  Justice Hecht concurred, and Chief Justice Jefferson (joined by Justices O'Neill, Wainwright, and Johnson) and Justice Wainwright each issued dissenting opinions.

In Kallam v. Boyd, theCourt withdrew its previous order granting the defendants' petitions and denied the petitions as improvidently granted because the plaintiff died shortly before oral argument.  Under the circumstances, the Court decided not to address the constitutional issue on which the court of appeals' decision turned:  whether the Texas Constitution's Open Courts provision precluded application of the statute of limitations to bar claims before the plaintiff reasonably could have discovered them.

In Brinson Ford, Inc. v. Alger, the Court held that the plaintiff, who fell from a pedestrian ramp at an auto dealership, presented no evidence of a premises condition posing an unreasonable risk of harm.  The Court reversed and rendered judgment for the dealership.

In In re Allstate County Mutual Insurance Co., the Court conditionally granted mandamus relief to an insurer and agent bombarded with a total of 213 discovery requests (89 requests for production, 59 interrogatories, and 65 requests for admission) in a third party car-wreck case.

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In In re AXA Financial, Inc., the Third Court of Appeals has consolidated a mandamus with an interlocutory appeal from an order denying the defendants' motion to compel arbitration.  To be honest, this event is not terribly noteworthy, but with the legislature in session, it seems timely to mention the procedural gaffe that triggers such parallel proceedings.

Basically, while the legislature has authorized an interlocutory appeal from an order denying arbitration under the Texas statute, our courts have uniformly held that no corresponding statutory remedy exists when the Federal Arbitration Act is in play.  Lawyers attempting to enforce an arbitration clause most often seek relief under both statutes for fear they will pick the wrong one.  When denying relief, trial courts usually don't explain their reasoning, leaving the movant's counsel no choice but to pursue both an appeal and a mandamus, with the Texas Supreme Court's blessing.  At the supreme court's behest, the intermediate appellate courts routinely consolidate the parallel actions.

As others have written before me, this is a silly rule that ought to be corrected.  (Some, most notably Heidi Bloch, say it already has been; the courts just don't recognize the change.)  The legislature could prevent the waste of having to bring two separate actions, only to have them consolidated, by tweaking the appellate provisions of the Texas General Arbitration Act.  Unfortunately, with the time for filing new bills passed, it will be at least 2009 before common sense can prevail.

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The Supreme Court of Texas released one opinion with today's orders.

In In re Derzapf, a father/custodial parent discontinued the maternal grandmother and step-grandfather's access to the deceased mother's children.  The per curiam Court held that the step-grandfather lacked standing to modify custody and that the grandmother failed to meet the high threshold for overcoming the statutory presumption that a fit parent acts in his children's best interest.  The supreme court conditionally granted mandamus relief from the trial court's order allowing access.

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With today's orders, the Texas Supreme Court has issued per curiam opinions in six cases.

In Zipp v. Wuemling, the Court held that an appeal from the district court's guardianship decision was not rendered moot merely because the ward had died while the appeal was pending.  Because issues remained with respect to who should settle the estate and whether the appellant has a legally cognizable interest in attorney's fees and costs, the supreme court reversed the court of appeals' judgment of dismissal and remanded to that court for further proceedings.

In City of Dallas v. Saucedo-Falls, the Court remanded the case to the trial court after determining that police officers and firefighters who sued the City alleging they were entitled to a pay raise "should have the opportunity to argue any grounds for waiver of immunity remaining under this Court's decisions [after the new opinion in Reata Construction Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006)], including whether the City's immunity from suit is waived by sections 271.151-.160 of the Local Government Code, enacted while this case has been pending on appeal."

In another immunity case, City of Sweetwater v. Waddell, the Court concluded that the court of appeals' reliance on "sue and be sued" language in the City's charter as a waiver was inconsistent with Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) and remanded to the trial court for further proceedings.

In In re Texas Department of Transportation and In re Gillespie County, separate mandamus actions originating from the same dispute, the Court conditionally granted mandamus relief directing a Travis County probate court to transfer venue of the plaintiffs' claims against certain defendants to Gillespie County, a county of mandatory venue.

In Doe v. Pilgrim Rest Baptist Church, the Court treated as timely a notice of appeal filed more than 90 days after the trial court signed a severance order conditioned on payment of a filing fee.

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It's been a busy week at the Texas Supreme Court.  Today's orders included opinions in the following six cases:

In Citizens Insurance Co. v. Daccach, the court of appeals affirmed the trial court's certification of a worldwide class of securities purchasers. The supreme court reversed,decertified the class, and remanded the case to the trial court, concluding that the trial court failed to consider how res judicata affected the class representative's adequacy, the superiority of litigating the case as a class action, the typicality of claims within the class, and the predominance of common issues.  Chief Justice Jefferson and two other justices concurred.

In Moki Mac River Expeditions v. Drugg, the Court held that the plaintiffs did not establish specific jurisdiction over a nonresident defendant.  The Court reversed and remanded the case with instructions that the court of appeals consider whether the defendant is subject to general jurisdiction in Texas.  Justice Johnson, joined by Justice Medina, dissented.

In City of Galveston v. State of Texas, the Court held that the state bears the burden of showing that the legislature allows the state to sue cities.  Because the state failed to meet that burden in this negligence case involving water damage to a highway, the Court reversed and rendered.  Justice Willett, along with three others, dissented.

In In re Discount Rental, Inc., the per curiam Court conditionally issued a writ of mandamus directing the trial court to vacate an order that a judgment debtor's property be sold to satisfy a void judgment.

In Varner v. Cardenas, the per curiam Court concluded that the court of appeals correctly reversed and remanded the trial court's judgment for segregation of recoverable from unrecoverable attorney's fees, but modified the court of appeals' judgment on the basis that the lower court defined recoverable fees too narrowly.

In Ontiveros v. Flores, the per curiam Court held that the court of appeals erred by reversing the trial court's summary judgment on claims the appellant had not raised on appeal.

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