This week brings the Texas Supreme Court’s first full argument sitting since late February. The Court will hear seven cases, spread across September 16, 17, and 18.

Amending a petition after a 101.106 motion is filed

This petition asks one question: "Where a plaintiff’s initial petition asserts only tort claims against a governmental unit and its employees, and the unit moves to dismiss the employees under section 101.106(e), must a trial court grant the motion to dismiss even if the plaintiff amended her pleading to drop the tort claims and add other claims before the court rules on the motion?"

Here, after a state entity moved to dismiss tort claims brought against it and an employee, the plaintiff amended to add federal Section 1983 claims. The state argues that this amendment was improper (and the whole case must be dismissed) because it had filed a Section 101.106 dismissal motion prior ot the amendment.

The Court originally denied the petition for review in April 2013, but it granted rehearing in October 2013, reinstating the case to the docket and requesting full merits briefing. It granted the case for oral argument in June 2014.

A contractor who promises to work in a “good and workmanlike manner” does not forfeit CGL coverage


Set to be argued on September 16, 2014

This case reaches the Texas Supreme Court by certified question from the U.S. Fifth Circuit in New Orleans.

In this branch of the litigation arising from the 2010 Deepwater Horizon drilling rig explosion, the question is not how much is paid out but which entity will ultimately bear the cost.

BP contracted with Transocean to provide "additional insured" protection covering Transocean's operations above the water line, while BP engaged in drilling below the water line. That narrow limitation was contained in the business contracts between the entities, while the insurance contracts themselves (arguably, at least) did not mirror the same limitation.

The first major issue is about construing the various contracts. BP contends that only the insurance policy language matters in deciding whether it is an "additional insured," citing cases such as EVANSTON INSURANCE COMPANY v. ATOFINA PETROCHEMICALS, INC., No. 03-0647. The insurers contend that the extent of coverage they agreed to provide to BP was limited to the scope of Transocean's agreement to provide that coverage, and thus excludes the claims here.

The second major issue might have broader implications. BP contends that if there is any ambiguity about whether it is covered, the policy should be construed against the insurer and in favor of the insured. The insurers contend that the doctrine does not apply in this sophisticated commercial context.

When the State condemns land containing a billboard, what compensation is due?


Set to be argued on September 17, 2014

In this case, the State (supported by some local governments) challenges how billboards were valued in condemnation. The landowners contend that the installed billboards are part of the realty warranting compensation for their lost income. The State argues that they should, instead, be seen as a type of personal property that can be relocated away from the property being condemned.

The latest:
Fraud in mineral leases

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 petitioners present four issues:

  • Should limitations have been tolled here? In part, this asks whether the special legal duties that an operator owes to the mineral owner make the owner's reliance on these statements more reasonable.

  • Did the court of appeals err in reversing and rendering judgment on the breach of contract claim? In part, this issue asks whether a defendant can obtain rendition on such a claim without having moved for summary judgment.

  • Even if the statute of limitations applies, does it only bar recovery for the oldest payments made under these contracts or does limitations also bar recovery for new payments so long as the alleged misconduct was more than four years in the past?

  • Was there any basis to refuse attorneys fees here given the parties' stipulations on that point?

The respondents challenge some other aspects of the judgment, including whether there was sufficient evidence that the parties agreed to a higher rate of post-judgment interest (here, 18% rather than the 5% that would have otherwise applied).

The latest:
  • Three opinions, one grant (June 16, 2014)
  • Construing an insurance policy that covers multiple properties hit by a single hurricane


    Set to be argued on September 18, 2014

    The insured suffered losses across a number of properties during Hurricane Rita. This petition concerns how to determine the insurers' maximum liability. Is it limited to the "scheduled" value of each property under the policy, taken separately? Or do other provisions in the policy allow the insured to recover the full value of those properties, staying within other limits of the policy?

    The insurer contends that the policy, as a whole, should be read as a "scheduled" policy and thus construed in line with a national body of law that would limit its liability here. The petition accuses the court of appeals of coming up with what it labels a "hybrid" policy that would lead to absurd results.

    The property owner contends that the court of appeals properly construed the actual policy language agreed here, and that this policy language — not a label like "scheduled" or "hybrid" policy — is what should control the outcome.

    The court of appeals heard the case en banc and divided 4-3, with one of the four justices in the majority writing separately to encourage the Court to grant review.

  • Three petitions granted (February 16, 2014)
  • Three opinions, one grant (June 16, 2014)
  • Unresolved questions about Section 51.003


    Set to be argued on September 18, 2014

    Having recently issued an opinion about lender's rights of offset under Section 51.003 in MEHRDAD MOAYEDI v. INTERSTATE 35/CHISAM ROAD, L.P. AND MALACHI DEVELOPMENT CORPORATION, No. 12-0937, the Court has decided to go back for more.

    This petition asks more questions about Section 51.003, including: (1) whether it creates a right to an offset when a lender resells the property on the open market rather than a foreclosure sale and (2) how to compute fair market value to compute the offset.

  • Three opinions, one grant (June 16, 2014)
  • When does city code enforcement raise a takings issue?


    Set to be argued on September 18, 2014

    The City of Houston ordered the owners of a condominium to vacate until they repaired the units to meet city code. In a separate suit, the City was found to have violated the owners' due process rights. In this suit, the owners sued the City for a regulatory taking. The court of appeals agreed that the property owners had a valid claim that could proceed.

    The City presents two issues:

    1. Can an invalid order to vacate a condominium be a taking, even without some actual damage or use of the property in question?

    2. Does the order in this case represent the kind of "public use" that constitute a taking or is it instead what the City calls "a nonpublic, noncompensatory use of a governmental entity’s police powers"?