With this week’s orders, the Texas Supreme Court issued opinions in two cases (including Justice Devine’s first signed opinion), issued a corrected judgment in a previous case, and chose two new cases for oral argument.

This week’s opinions

Takings applied to a future interest in property

EL DORADO LAND COMPANY, L.P. v. CITY OF MCKINNEY, No. 11-0834

Opinion of the Court

A landowner sold a parcel of land to the City of McKinney, with a condition attached: that if the land were used for anything other than a city park, the seller would have the right to repurchase it.

Ten years later, the city placed a public library on the land. The previous owner sued for inverse condemnation, arguing that the government’s action had deprived it of a compensable property interest, namely, the right to repurchase the land.

The court of appeals held that this condition in a deed was in the nature of a contract and, thus, that the city was immune from suit.

The Texas Supreme Court reversed, with Justice Devine writing for a unanimous court. The Court held that the case concerned a property interest rather than a mere contract right and, thus, no immunity attached.

Along the way, the Court rejected several arguments about why this particular flavor of future property interest — a “right of reentry” — should not be compensable in a taking. The Court noted that the most recent Restatement largely “dispenses with the historical parsing of future interests, recognizing only reversions and remainders. It thus abandons distinctions that previously differentiated a possibility of reverter from a right of entry because, in its view, no legal consequences attach to such distinctions.”

When an express warranty supersedes an implied warranty

NELDA GONZALES v. SOUTHWEST OLSHAN FOUNDATION REPAIR COMPANY, LLC, D/B/A OLSHAN FOUNDATION REPAIR COMPANY, No. 11-0311

Opinion of the Court

In a suit over a defective home-foundation repair, the jury found that the repair company had violated the implied warranty but had not violated the express warranty stated in the sales contract.

The court of appeals reversed, concluding that this claim was barred by limitations. In particular, it held that there was no free-standing claim here for “implied warranty” but that, instead, the theory would have to be raised under the DTPA — and thus subject to a two-year statute of limitations.

The Texas Supreme Court granted review, and now affirms (on different grounds). The Court did not, however, ultimately reach the question of whether Texas has a freestanding claim for “implied warranty” or whether it must be brought under the DTPA — an issue “over which courts have differed.” (Footnote 9 on page 5) Instead, the Court chose to first ask whether the express warranty made here superseded the implied warranty.¹

The Court held that the implied warranty “of good and workmanlike repair” applicable here is just a gap filler.² As a gap-filler warranty, it cannot be disclaimed, but it can be superseded — the parties can agree to replace the implied warranty with a custom-tailored express warranty.

Looking at the agreements here, the Court found “language [that] ‘sufficiently describes the manner, performance or quality’” of the work to supersede the implied warranty and replace it with an express warranty. Thus, the judgment could not be supported on the basis of an implied-warranty theory, whether brought as a freestanding claim or as a facet of the DTPA. The statutory question of whether implied warranty claims fall within the DTPA will be left for another day.

The more immediate lesson to counsel with warranty claims may be to handle gingerly any evidence suggesting a warranty obligation — even if not part of a signed contract. The Supreme Court did not analyze the loss of implied-warranty claims as a question of waiver; express warranties can attach — and displace the implied warranty — without the plaintiff signing anything.

Here, the trial court viewed this unsigned document as a problem and decided to admit it for a limited purpose — just to show “what in [the defendant's] opinion the company was supposed to do.” (Discussion at pages 8.) Yet on appeal, the Supreme Court looked to the terms of this document as part of its analysis of whether the express warranty superseded the implied warranty. The Court explained that, even unsigned, the disputed document “could fairly be characterized as an obligation of [the defendant] to [the plaintiff].” Accordingly, the document’s broad language could weigh in favor of the express warranty superseding the implied warranty.

Correction of a judgment that had reversed some unchallenged parts of a trial court’s decision

In WENDELL REEDER v. WOOD COUNTY ENERGY, LLC; WOOD COUNTY OIL & GAS, LTD.; NELSON OPERATING..., No. 10-0887 , the Court issued a short supplemental opinion explaining that it was modifyings its previous judgment. In August 2012, the Court had reversed and “render[ed] a take-nothing judgment.” As this week’s opinion (PDF) explains, that language was too broad because there were some parts of the trial court’s judgment that had not been challenged in the scope of the appeal. The Supreme Court thus issued a corrected judgment, specifying the issues on which it was reversing the trial court.

Two New Grants

• GENE E. PHILLIPS, INDIVIDUALLY AND D/B/A PHILLIPS OIL INTERESTS, LLC, ET AL. v. CARLTON ENERGY GROUP, LLC, No. 12-0255 : The petition argues that damages measured by lost “market value” must be held to the same evidentiary standards as damages for “lost profits.” An amicus letter from the Texas Civil Justice League urges the Court to take the petition to overrule Castleberry v. Branscum, 721 S.W.2d 270 (Tex. 1986), a decision about piercing the corporate veil.

• MAN ENGINES & COMPONENTS, INC. AND MAN NUTZFAHRZEUGE AKTIENGESELLSCHAFT v. DOUG SHOWS, No. 12-0490 : The petition argues that the implied warranty of merchantability cannot be invoked by subsequent purchasers of (used) goods.

1. The Court had its choice of which sub-issue to address first. Had it started with the question of whether the DTPA controlled, then it might never have needed to reach this question about when express warranties supersede implied warranties. [↩]
2. The Court also held that a general “no evidence” objection at the charge conference was sufficient to preserve this question of whether an implied warranty existed under Texas law. [↩]

The Texas Supreme Court did not issue any opinions or choose any new cases for review with this week’s orders list.

The Court’s public calendar shows a conference of the Justices on Tuesday, March 26th.

Link: Texas Supreme Court Holds Child Support Obligor Must be Current on All Child Supp… (Dallas Divorce Law Blog) dallastxdivorce.com/2013/03/articl…

— SCOTXblog (@scotxblog) March 19, 2013

With this week’s orders list, the Texas Supreme Court issued one opinion.

What counts as a notice of appeal?

IN THE INTEREST OF J.M. AND Z.M., MINOR CHILDREN, No. 12-0836

Per Curiam

The question before the Court was whether a document filed in the trial court qualified as a “notice of appeal” to trigger appellate jurisdiction before the clock expired.

The wrinkle is that the document claimed to be a combination of a motion for new trial and notice of appeal. Under Texas practice, these are usually separate documents, with the notice of appeal filed after any motion for new trial is disposed.

But the Texas Supreme Court held that this was sufficient because — based on the title of the document and language indicating that the party “wishes to appeal this case” — it was “a bona fide attempt to invoke appellate jurisdiction.”

I was puzzled the first time I saw opposing counsel attach a formal word-count certificate to a very simple one-page letter to a court. No word limits apply to those letters. (Don’t get any ideas!) So, why would that be required?

His reasoning was that the governing rule was a little unclear about what was required. At that time, it said “A computer-generated document must include a certificate … stating the number of words…” So, thinking like a good appellate lawyer, my opposing counsel included a certificate on all filed documents as a matter of course.

This week, the Texas Supreme Court has clarified the rule. Its short set of amendments to the word count rules now specifies that only those documents that are actually “subject to a word limit” need attach a certificate of compliance.

The U.S. Supreme Court has released its decision in Gunn v. Minton, No. 11-1118 (opinion docket), reversing the decision from the Texas Supreme Court.

This is a legal malpractice suit about a patent issue. The defendant argued that the presence of an issue over which federal courts had special jurisdiction (patent law) meant that Texas state courts lacked the power to render a complete decision. The Texas Supreme Court agreed, concluding that the appeal raised an issue of federal law over which Texas courts had no authority and thus should defer to federal courts. The U.S. Supreme Court accepted the case for review and heard arguments in January.

Chief Justice Roberts wrote today for a unanimous Court, holding that federal law did not in these circumstances require the Texas legal-malpractice claim to have been brought in federal court. The Court thus reversed the Texas Supreme Court’s 6-3 decision in VERNON F. MINTON v. JERRY W. GUNN, INDIVIDUALLY, WILLIAMS SQUIRE & WREN..., No. 10-0141 and remanded to the Texas state courts for further proceedings.

The nub of the reasoning begins at page 8 of the slip opinion, which frames the relevant test as whether the particular issue of federal law involved here was substantial to the federal system (not to the parties):

Minton’s argument founders on [Grable & Sons Metal Products, Inc. v. Darue Engineering]‘s next requirement, however, for the federal issue in this case is not substantial in the relevant sense. In reaching the opposite conclusion, the Supreme Court of Texas focused on the importance of the issue to the plaintiff’s case and to the parties before it. … As our past cases show, however, it is not enough that the federal issue be significant to the particular parties in the immediate suit; that will always be true when the state claim “necessarily raise[s]” a disputed federal issue, as Grable separately requires. The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole.

Having thus reframed the dispute between these parties into a vastly bigger context — the federal system, and federal-state relations — the Court concluded that there was no bar to the Texas courts adjudicating this claim.

This may be, in part, because it was an unusually retrospective kind of claim — legal malpractice — which involves determining hypothetical questions in the past tense about what might have happened in litigation. Any holdings that state courts might reach in such a narrowly defined context are unlikely to disturb the uniformity of federal patent law. See slip op. 9-10.

The Court also rejected the argument that the unique expertise of the Federal Circuit was a reason for the federal courts to be the exclusive forum for patent-malpractice cases. See Slip op. 11-12. The Court’s reasoning here again echoed the opinion’s theme: “[T]he possibility that a state court will incorrectly resolve a state claim [malpractice] is not, by itself, enough to trigger the federal courts’ exclusive patent jurisdiction …. [R]esolution of a patent issue in the context of a state legal malpractice action can be vitally important to the particular parties in that case. But something more, demonstrating that the question is significant to the federal system as a whole, is needed.”¹

The immediate effect of Gunn v. Minton is of course to clarify that state courts can resolve legal-malpractice issues that touch upon federal patent law.

More interesting to appellate lawyers, perhaps, is how the Court shifted the focus of a jurisdictional inquiry from analysis of the parties’ claims to a broader question that, to my eyes, reads more like a discussion of discretionary review. The focus in the Chief Justice’s opinion is on whether the issue is important to federal jurisprudence, something that echoes how the Supreme Court resolves cert petitions. Indeed, the opinion employs some argumentative devices that one might find in a solid Brief in Opposition arguing against the Court taking certiorari of a state-law patent issue:

• the evergreen argument that “If the question arises frequently, it will soon be [presented in a better case, in federal court]“, slip op. 10;

• explaining how rarely state court decisions about federal issues are viewed as authority in federal court or by federal agencies, slip op. 11; and

• explaining that, even if there were some issue preclusion from a mistake made by a state court about a patent-law issue, that effect would be limited to the parties and thus not important to the jurisprudence, slip op. 11-12.

I do not envy the state court having to guess which claims might, at the margin, meet that test.

But although the edges of this jurisprudential test are perhaps less crisply defined than before, the Supreme Court’s framing results in such a smaller zone of preemption that, for most cases involving routine disputes, it will not matter precisely where the line falls.

1. In that regard, this case is really about which funnel patent cases must follow toward uniformity. The patent issues present in some state claims may no longer have a direct path to the federal circuit. But an interesting enough substantive question about patent law could nonetheless make its way to the U.S. Supreme Court by means of certiorari to the state courts (just as in this case). [↩]

On Monday, a special event is being held at the Texas Supreme Court to mark the publication of “The Texas Supreme Court: A Narrative History, 1836-1986″ by James Haley.

The book begins around the time of Texas became an independent Republic in 1836 and ends in 1986, which is both an even 150 years and a smooth place to divide history from the present day.¹

The description on Amazon teases that the book “use[s] a lively narrative style rather than a legalistic approach.” I hope that won’t dissuade too many appellate readers from ordering.

It continues:

[Haley] focuses on the personalities and judicial philosophies of those who served on the Supreme Court, as well as on the interplay between the Court’s rulings and the state’s unique history in such areas as slavery, women’s rights, land and water rights, the rise of the railroad and oil and gas industries, Prohibition, civil rights, and consumer protection.

That’s quite a bit to pack into 344 pages.

The ceremony of the Court receiving a copy of the book will be held on Monday February 11, 2013 at 4:00 p.m. in the Texas Capitol Building’s historic courtroom (not the regular court chamber). Seating is limited, but the Court does plan to live-stream the ceremony, preserving the event for posterity — or at least for you to view it at your convenience later.

The author will also be speaking at the CLE program “The History of Texas Supreme Court Jurisprudence” (brochure) on April 11, 2013, jointly sponsored by the State Bar and the Texas Supreme Court Historical Society.

1. The modern Republican Court began to form in 1988, with the elections of Justice Hecht and former Chief Justice Phillips. [↩]

The Texas Supreme Court did not issue any opinions with today’s orders list.

The Court calendar shows a private conference scheduled for next Monday and Tuesday. The Court’s final scheduled argument sitting for the term will begin on February 26, 2013.

With the first orders list of February, the Texas Supreme Court issued one opinion. It also chose to grant rehearing in two (consolidated) petitions it had previously denied, instead setting them for oral argument later this month.

DIEGO RODRIGUEZ-ESCOBAR, M.D. v. MICHAEL ALLEN GOSS, STEVEN GOSS, AND TIMOTHY LEE GOSS, INDIVIDUALLY AND AS REPRESENTATIVE OF THE ESTATE OF BEVERLY GOSS, No. 10-0511

Per Curiam

This claim was brought by the family of someone who had been evaluated for possible involuntary hospitalization for psychiatric care as a suicide risk. The physician determined that she did not meet the test for involuntary commitment. Three days after her release, she committed suicide. The trial court entered judgment that the doctor had been negligent, awarding $200,000 in damages.

Read more about this and the new case set for argument

The Texas Supreme Court issued opinions in six cases with last Friday’s orders list.

Opinions in Argued Cases

THE STATE OF TEXAS v. NINETY THOUSAND TWO HUNDRED THIRTY-FIVE DOLLARS AND NO CENTS IN UNITED STATES CURRENCY ($90,235) AND 2000 BLACK LINCOLN NAVIGATOR VIN: 5LMPU28A7YLJ10865, No. 11-0642

Opinion of the Court

Although the subject matter of the case is forfeiture of property suspected of being involved in criminal activity, the appeal came down to a question of summary-judgment procedure.

The property’s owner moved for a traditional summary judgment, arguing (in part) that the police officer who seized the property did not have a reasonable basis to believe it had been used in criminal activity. In support of that summary judgment, he offered his own affidavit denying that the officer had a reasonable basis.

The Court held that this was not enough to prevail on summary judgment, where the question was the other person’s state of mind:

[Read more →]

With this week’s orders list, the Texas Supreme Court chose two (related) petitions for oral argument. The Court did not issue any opinions with these orders.

Petitions Granted

The Court granted review two tax petitions that ask whether it was proper for a government contractor to claim a “sale for resale” exemption on certain goods it purchased to fulfill a government contract. The Comptroller argues that, because the overall contract was for a “non-taxable service,” this exemption did not apply.

The cases are:

SUSAN COMBS, COMPTROLLER OF PUBLIC ACCOUNTS AND GREG ABBOTT, ATTORNEY GENERAL v. HEALTH CARE SERVICE CORPORATION, No. 11-0283 , and

SUSAN COMBS, COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS AND GREG ABBOTT, ATTORNEY GENERAL OF THE STATE OF TEXAS v. HEALTH CARE SERVICES CORPORATION, No. 11-0652 .

The two have been consolidated for purposes of oral argument, which is scheduled for February 27, 2013.

You’ve no doubt noticed the new word-count limits applicable in Texas appellate courts.

At his blog, Todd Smith has collected some examples from practitioners about how to phrase the word-count certificate of compliance.

The comment I left suggested that your certificate specify the word processor that you used to generate the document (and thus the count). That may seem a minor point. This post explains my thinking — and may make you reconsider your word-processor allegiances.

Word processors disagree about the math

Although your favorite word processor will give you a “word count,” do you know what it is counting?

For example:

• Phrasal adjectives: Is “summary-judgment motion” two words or three?

• Legal citations: Is “S.W.3d” one word or two?

• Numerals: Does a pinpoint cite to a span of pages (e.g., “123-25″) count as one word or two?

• Record citations: Is a record citation like “4.RR.124-25″ one word or two or three or four?

• Statutory citations: How many words is a cite to “§123.23(A)(1)(i)(a)”? Is it just one long word, or is it five very short words?

I was curious. So, I ran an experiment. I lifted roughly a page and a half from a recent appellate brief. I put this text into its own clean word-processing file and made a few tweaks to the typography.

Survey says…

Here are the word counts from four word processors I had at my fingertips:

What led to the huge gap between the lowest count (Word) and the highest count (Pages)? It turns out that Pages uses an algorithm that treats an abbreviation like “4.RR.125-26″ as being four words. Yes, four. Pages sees imaginary word breaks in places that I do not.

This is a shame, because Pages is a very pleasant word processor to use. But so long as it counts words so greedily, it will be relegated to short motions and letters.¹

The title match: Word vs. WordPerfect

What about the difference between WordPerfect and Word?

It turns out that WordPerfect counts a record citation like “CR.25″ as two separate words.²

Word and WordPerfect also treat dashes differently. In WordPerfect, two words joined together by any flavor of dash (a hyphen, en dash, or em dash) are treated as one long word. The same goes for spans of numbers; joining them with an en dash to indulge your typographic precision does not cost you an extra word. But Microsoft Word is less forgiving. If you use an en dash rather than a hyphen, that subtle choice increases the word count.³

But all WordPerfect’s sophistication is lost for deeply nested statutory cites. WordPerfect (much like Pages) thinks that “§123.23(A)(1)(a)(i)” is five words. Microsoft Word? It counts that statutory cite as a single word.

The winner

The clear choice for verbose people is Microsoft Word. If you are using WordPerfect, you now have one more thing to boast about: Your briefs will, by necessity, be a little less wordy.

1. Perhaps the programmer was trying aid struggling freelancers “paid by the word”? It’s puzzling. [↩]
2. Oddly, WordPerfect counts “S.W.3d” as just one word and “4.RR.125-26″ as (just) two words. So the over counting of record cites is less pronounced in WordPerfect than in Pages. [↩]
3. This paragraph was rewritten after Leif’s comment on this post. [↩]