Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court
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Three decided cases and nine grants [Jan. 30, 2015]

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With this orders list, the Court issued opinions resolving three cases and granted nine cases for oral argument.

This flurry of grants gives the Court a […]

With this orders list, the Court issued opinions resolving three cases and granted nine cases for oral argument.

This flurry of grants gives the Court a complete argument calendar for late February and begins to fill a (new) argument week scheduled for late March.1

Opinions

The effect on a statute of limitations when public records are tainted by fraud

A mineral owner sued the operator for fraud that occurred more than four years before suit, the effects of which continued in the stream of payments to the current day. The operator responded with, among other arguments, a limitations defense. The mineral owner contended that the discovery rule should have tolled that limitations period because it reasonably relied on the operator's representations. The operator contends that any such reliance was unreasonable because Railroad Commission records contained the needed information.

The opinion discussed whether "reasonable diligence" is one of fact or law, answering that it's ultimately one of fact but that there are categories of evidence — including some public records — that put a party conclusively on notice, thus starting the clock for limitations.

The Court distinguished those public-record cases because, here, the fraud had also "tainted" the integrity of the public records, with allegedly false information being included in the latest filings. Although the defendant contended that comparing these later records with earlier records should have put someone on notice of the fraud, the Court held that would require too much to be "reasonable diligence" as a matter of law.

Among the other issues, the Court interpreted the parties' "most favored nations" clause for royalty payments. The court of appeals had held this clause was not violated when the State in effect received preferential royalty payments because the State was not a market actor and thus the policy concerns were somewhat different. The Supreme Court held that the contract text did not draw such a distinction and, thus, that the contract had been breached.

Previously:
  • Three opinions, one grant (June 16, 2014)
  • The special role of the Attorney General in reporting child-support issues to a federal database

    Can a trial court reviewing allegations of family violence affecting child custody have, along with that, order OAG to change how it has flagged the case file in a federal database?

    Although the Court’s analysis dealt with a federal regulatory system, it approached this question as a matter of state statutory interpretation. The relevant list of statutory remedies included a catch-all provision “any other order.” The Court emphasized that it was evaluating that phrase within the larger context, not taken in isolation.

    When construing statutes, or anything else, one cannot divorce text from context. The meaning of words read in isolation is frequently contrary to the meaning of words read contextually in light of what surrounds them. Given the enormous power of context to transform the meaning of language, courts should resist rulings anchored in hyper-technical readings of isolated words or phrases. The import of language, plain or not, must be drawn from the surrounding context, particularly when construing everyday words and phrases that are inordinately context-sensitive.

    Against that background, the Court explained that Texas had designed the Office of Attorney General as its “Title IV-D agency, [which] must collect, store, and maintain” certain information required by federal law — information that included this flag.

    The Court concluded that the phrase “any other order” was not meant to upset this balance, nor did it create a distinct right to judicial review under state law of the agency’s decision whether to flag the file in the federal database.

    An unresolved request for UDJA fees can undermine the finality of a summary judgment

    The Court dealt with what it called “the familiar issue of whether a trial court’s order ... is final for purposes of appeal.” This order came after a motion for summary judgment by an insurer (Farm Bureau), in which the trial court denied relief and ruled that the insurer did have a duty to cover the claims. Although both sides had requested attorney’s fees, the order made no mention of those requests — but it did contain a “Mother Hubbard” clause and made an award of court costs. Farm Bureau appealed the merits.

    The court of appeals dismissed for want of jurisdiction, reasoning that the order could not be a final judgment because there was not a formal cross-motion for summary judgment filed by the insured. The Supreme Court disagreed that the lack of an underlying motion would deprive the judgment of force. Quoting its own decision in Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001), the Court explained that “[i]f the trial court’s intent to enter a final judgment is ‘clear from the order, then the order is final and appealable, even though the record does not provide an adequate basis for rendition of judgment.’ In that case, ‘the judgment is final—erroneous, but final.’” So that basis would not defeat jurisdiction here.

    But the Supreme Court saw a second problem with jurisdiction, namely, that the trial court had not ruled on attorney’s fees. In contrast to the merits issue — where the order spoke directly to the claims — there was no mention of attorney’s fees in the order and no other indication in the record that the trial court’s order was meant to resolve the question of fees. “In the absence of evidence of the trial court’s intent with respect to the parties’ claims for attorney’s fees, we find that the trial court’s order did not dispose of all parties and claims.”

    Grants

    For late February

    PLAINS EXPLORATION & PRODUCTION COMPANY v. TORCH ENERGY ADVISORS INCORPORATED, No. 13-0597

    Set to be argued on February 24, 2015

    IN RE LONGVIEW ENERGY COMPANY, No. 14-0175

    Set to be argued on February 25, 2015

    JLG TRUCKING, LLC v. LAUREN R. GARZA, No. 13-0978

    Set to be argued on February 26, 2015

    For late March

    1. The Court calendar had an early February argument sitting, but no cases were ever scheduled for that week. []

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    SCOTX to decide the future of Texas school finance [Jan. 23, 2015]

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    The big item on today’s otherwise quiet orders list is the Court formally accepting a case about the Texas school-finance system.

    Schedule set in school finance […]

    The big item on today’s otherwise quiet orders list is the Court formally accepting a case about the Texas school-finance system.

    Schedule set in school finance cases

    The Court has now formally said that it will hear this "direct appeal" of the school finance ruling that held certain portions of the system unconstitutional.

    The Court has agreed to the briefing schedule suggested by the parties, which puts the briefs due on April 13, 2015 (for the State and others challenging the judgment); July 2, 2015 (for those defending the judgment); and a reply on August 11, 2015 (for the State and others challenging the judgment).

    That briefing schedule extends beyond the July 1, 2015 deadline set by the trial court's order. The State's motion states its belief that this deadline was suspended automatically by the appeal.

    The briefing schedule also permits the Legislature to finish its session (and perhaps even a special session). Both sides will have an opportunity to address how any new legislation might affect this case.

    Based on this schedule, I would expect the Court to hear oral argument in September 2015.

    The briefing so far just consists of very short notices of appeal ("jurisdictional statements") filed by four groups challenging aspects of the judgment below:

    • the State Defendants (the commissioner of education and others)

    • a group led by the Texas Charter School Association

    • a group led by the Texas Taxpayer & Student Fairness Coalition

    • a group of six school districts that have broken with the main group of plaintiffs (Calhoun ISD, Abernathy ISD, Aransas ISD, Frisco ISD, Lewisville ISD, and Richardson ISD)

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    Quiet orders list [Jan. 16, 2015]

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    It was a quiet orders list this week, with no grants made or opinions issued.

    With the holiday next Monday, the Court has scheduled its next […]

    It was a quiet orders list this week, with no grants made or opinions issued.

    With the holiday next Monday, the Court has scheduled its next private conference for this Thursday, January 22.

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    Two opinions: when a fraudulent representation contradicts a contract and whether the Tort Claims Act forces a party to give up Section 1983 claims [Jan. 9, 2015]

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    With its January 9, 2015 orders list, the Texas Supreme Court issued opinions in two cases.

    Section 101.106 election of remedies does not foreclose a federal […]

    With its January 9, 2015 orders list, the Texas Supreme Court issued opinions in two cases.

    Section 101.106 election of remedies does not foreclose a federal claim against state officials

    Justice Lehrmann delivered the opinion for a unanimous court, affirming the court of appeals.

    Section 101.106 of the Texas Tort Claims Act makes plaintiffs choose whether to sue the government entity or the state officials. If a plaintiff tries to have it both ways by suing both categories of defendant, “the employees shall immediately be dismissed.” Tex. Civ. Proc. & Rem. Code §101.106(e).

    This petition asked the Court to clarify two situations:

    • Is a plaintiff barred from filing an amended petition after the State files a motion under Section 101.106(e)?

    • Does Section 101.106(e) also require the dismissal of claims that a plaintiff might have against state officials under federal law, such as a Section 1983 claim?

    On the first, the Court held that this statute does not prevent a plaintiff from amending its petition to add a new claim. The Court distinguished its recent opinion in a health-care-liability case that a plaintiff could not dismiss its claim in an effort to avoid the penalty for not filing a timely expert report. See Op. at 10 (discussing AUSTIN STATE HOSPITAL, DR. VIKAR NUZHATH AND DR. ERIK LINDFORS v. JOEL GRAHAM, No. 10-0674 ). Here, the Court holds that the wording of the Tort Claims Act (using the word “immediately”) does not change the normal background rules of Texas procedure that would generally permit a party to amend its petition.

    On the second, the Court held that Section 101.106(e) does not bar federal claims because they are not brought “under” the Tort Claims Act. See Op. at 6-7. The Court reached that result as a matter of statutory construction and so did not consider questions related to preemption or constitutionality. See Op. at 13.

    A party cannot avoid an unambiguous contractual release that he chose not to read

    Although this appeal led to a per curiam opinion, there is more than one holding of interest for commercial cases.

    This dispute grows out of settlement negotiations in a related case. The allegation is that, when the parties were negotiating a formal written settlement agreement, one of them (Plank) promised the other (Westergren) that they would be in a partnership to develop a piece of property for which he would receive $1 million plus a share of future development profits. Westergren contends this agreement is enforceable.

    The written settlement agreement, however, contained a provision described as a “RELEASE” that provided for a one-time $500,000 payment.

    Westergren sued Plank and the developer of the property (NPH), claiming that he was defrauded into settling or that, at a minimum, those promises constituted an enforceable oral contract. His theory was that the release was unenforceable because of fraudulent inducement, as he had not actually read the provision but instead relied on the promises made. A jury largely agreed with him, but the trial court entered judgment notwithstanding the verdict. A divided court of appeals reversed, reinstating the verdict.

    With this per curiam, the Court holds:

    • A contractual release is not defeated by a party choosing not to read the contract. The Court had little patience for the contention for Westergren’s explanation of why he did not read this release language, characterizing it as “because he was ‘in a hurry’ and did not have his reading glasses with him.” See Op. at 7.

    • A release is not a covenant not to sue. Plank argued that Westergren even bringing this suit was a breach of the settlement agreement, for which it should be entitled to damages. The Supreme Court holds that the language involved was merely a release of claims, and that the language used in this release did not imply a covenant not to sue.

    • The statue of frauds. The Court also addressed whether the alleged oral agreement was enforceable at all. The statute of frauds would normally bar an oral agreement regarding real estate. Westergren contended that an exception applied here for partial performance because Plank paid $500,000. Westergren’s theory is that this represented the first half of performance under the alleged oral contract and, thus, was partial performance.

      The Court disagreed that Westergren’s framing of this issue accurately stated the law about “partial performance” — explaining in footnote 2 that more would be required but that it would reserve that issue for a proper case. See Op. 9n.2. This case does not shed much light on what law does apply in that situation.

      The Court did not need to provide more clarity because, even accepting Westergren’s framing, the record was still legally insufficient here. The Court held that this $500,000 payment was not “’unequivocally referable’ to the agreement.” See Op. 9. Here, NPH’s payment of $500,000 could easily be explained as referable to the settlement agreement, not the alleged partnership agreement. The Court thus held that Westergren’s statute-of-frauds theory failed even his own suggested test.

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    Dallas is hosting the AJEI conference later this month

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    This year’s AJEI (Appellate Judges Education Institute) is being held in Dallas from November 13-16. If you’re in the area, you should see if […]

    This year’s AJEI (Appellate Judges Education Institute) is being held in Dallas from November 13-16. If you’re in the area, you should see if part of the program works with your schedule. (If you’re already planning to attend, then please say hello if you see me wandering the halls).

    The program lineup gives you a sense of the range of topics. This is a national event, and the centerpiece Saturday event is a two-hour program with Justice Scalia and Bryan Garner. The program also has some Texas Supreme Court flavor, including former Chief Justice Wallace Jefferson, current Chief Justice Nathan Hecht, former Justice Scott Brister, former Justice (now federal judge) Xavier Rodriguez, and former Chief Justice Wallace Jefferson (who is indeed speaking twice).

    I’ll be moderating a breakout panel about electronic briefing on Friday morning, with Judge Stephen Higginson of the Fifth Circuit, Justice Virginia Linder of the Oregon Supreme Court, and Kevin Newsom of Bradley Arant Boult Cummings LLP.

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    Four grants: disqualifying counsel; suing compounding pharmacies; government immunity × 2 [Oct. 24, 2014]

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    The Court had a two-day private conference before this weekly orders list, leading to orders in more than four dozen petitions. Four cases were […]

    The Court had a two-day private conference before this weekly orders list, leading to orders in more than four dozen petitions. Four cases were ultimately chosen for oral argument in January. The remaining petitioners and relators were not so lucky. The Court has posted the list at a new location.

    New Grants

    These are the cases chosen for oral argument with this orders list:

    Compounding pharmacies under the health-care-liability act

    This is a claim against a compounding pharmacy based on an antioxidant supplement. The supplement was provided to a doctor's office, which then provided it to patients. The pharmacy argued that this was a health-care-liability claim and, accordingly, should be dismissed because no expert report was timely filed. The plaintiff argues that filling what the response calls a "bulk" order for these supplements is not filling a prescription and does not fit the statute.

    Proof needed to raise a fact question on immunity

    This is a suit against a government unit by the family of two girls who were killed by riptides near the Texas City Dike. There were signs posted elsewhere, but not where the accident took place. The City won a plea to the jurisdiction. The petition argues that there was a fact question on immunity, in part because the presence of warning signs at other nearby locations signaled awareness of the problem — or at least would permit a fact-finder to draw such an inference.

    Disqualification of counsel

    IN RE RSR CORPORATION AND QUEMETCO METALS LIMITED, INC., No. 13-0499

    Chosen for future argument by order issued October 24, 2014

    The Court granted rehearing of its previous denial of this mandamus petition. The petition concerns disqualification of counsel for having hired a former employee of the other side's litigation team. The issues include how harm to the litigants should be weighed in this analysis and whether lesser alternatives to disqualification should have been explored.

    Local government immunity from contract claims

    LOWER COLORADO RIVER AUTHORITY v. CITY OF BOERNE, TEXAS, No. 14-0079

    Set to be argued on January 15, 2015

    The question is whether suit can be brought against the City for a contract alleged to have been entered in its proprietary (rather than governmental) capacity. The LCRA argues that this category of contract is not covered by immunity and that, if there were any doubt, it has also been waived by statute. The City argues that this proprietary-governmental distinction is inapplicable to contract claims and has also become unworkable in practice.

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    My apologies for a bumpy road on the blog this week and next

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    This weekend, the Texas court system rolled out a new website design for the Texas Supreme Court. The old “supreme.courts.state.tx.us” domain has been retired, with […]

    This weekend, the Texas court system rolled out a new website design for the Texas Supreme Court. The old “supreme.courts.state.tx.us” domain has been retired, with the Court’s information now folded into the larger “txcourts.gov” domain that already handles the courts of appeals. The new page format is cleaner and more modern. It will be good for humans with taste.

    The software scrapers that feed this blog are, unfortunately, still trained for the old website. I’ve shut down the scrapers for a short bit until I can re-train and re-test that software. That should freeze the data in place as things stand now.1

    A compressed work schedule will prevent me from opening the code editor this week. My best estimate is that the blog will return to normal operation sometime the week of October 27th or the week of November 3rd.

    Update 10:00am: Among the items that relocated were the Court’s previous slip opinions. Links that formerly went to a specific opinion now go to the Court’s main page.

    I’ve written before about how entangled this blog is with my docket-tracking software. One side benefit is that, when there is some major change to the Court website, I can implement a change in one place and have the fix ripple through the blog archive. (This is not my first rodeo.)

    Today’s payoff is this: I’ve written one quick fix for the opinion links in recent blog posts and some data tables. Those should now take you to my archived copy of the slip opinions, rather than to the Court website itself.2 This fix doesn’t make the scrapers any smarter. But it does make the blog a little more usable in the meantime.

    1. If you see some glitches that crept into the data pool before the shutdown — such as case names disappearing from old blog posts — those should naturally resolve themselves once the system is re-trained and the scrapers can reanalyze the pages. []
    2. This fix is not rolled out for posts older than mid-2012. The deeper archive can be fixed eventually, but not this morning. []

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    A quiet orders list [Oct. 17, 2014]

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    It was a quiet orders list today, with no opinions or grants. The Court heard oral arguments this week, and there was no internal […]

    It was a quiet orders list today, with no opinions or grants. The Court heard oral arguments this week, and there was no internal conference at which more fully developed petitions might have been considered.

    The Court’s calendar shows a two-day private conference next Tuesday and Wednesday.

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