With today’s orders list, the Texas Supreme Court granted one new petition for review and issued opinions in seven others.

New grant: How to calculate child support obligations when one parent chooses a career path below their maximum income potential

James Derwood Iliff v. Jerilyn Trije Iliff, No. 09-0753 (briefs and docket)

This case involves a split between the Austin Court and other courts of appeals over when a child-support order can look to a parent’s “potential income” instead of their “actual income” when calculating a child-support obligation.

As explained in the petition for review, the Austin Court did not require a showing that the parent had chosen a lower income with the purpose of evading child support.

By contrast, several other courts of appeals have interpreted the phrase “intentional unemployment or underemployment” to encompass an intent to evade child-support obligations, rather than just a voluntary choice of career path.

The Texas Supreme Court has granted the petition but has not yet chosen an argument date this fall to hear the case.

Motion to recuse a Justice denied

The orders list also reflects that the Court denied a recusal motion for Justice Wainwright in Southwestern Bell Telephone Co. v. Marketing on Hold, Inc., No. 05-0748.

If Marketing on Hold sounds familiar, it’s the case that was at the center of the lawsuit filed against the Court for not deciding a case more quickly. The Court soon ruled, and the losing party sought rehearing.

As part of the rehearing process, the plaintiffs argued that the author of the opinion against them (Justice Wainwright) should be recused under Caperton‘s language about the “risk of actual bias” based on “objective and reasonable perception.” Their complaint was that Justice Wainwright’s 2008 campaign website indicated that he had been endorsed by the general counsel of one of the parties. (( The discussion is at pages 14-15 of the rehearing motion. ))

The Court denied the motion to recuse (with Justice Wainwright sitting out the vote). The Court then denied rehearing in the same orders list. (( Justice Guzman did not sit on this case at all. ))

Aside: It doesn’t strike me as a very strong Caperton argument to point out that an attorney is listed as a campaign supporter on a website — especially not when listed among so many other names given equal prominence — so today’s disposition doesn’t break any new ground. But the motion is another example of a litigant claiming a “risk of bias” based on a person’s name being associated with a judge on a webpage.

Seven decisions today

The damages for breach of fiduciary duty can include forfeiture of shares given in consideration

ERI Consulting Engineers, Inc. and Larry G. Snodgrass v. J. Mark Swinnea, Brady Environmental, Inc., and Malmeba Co., No. 07-1042

Justice Green delivered the opinion of the Court:

We hold that when a fiduciary fraudulently induced a contract, such a breach of fiduciary duty may give rise to equitable forfeiture of contractual consideration. We therefore reverse the portion of the court of appeals’ judgment that ERI take nothing in equity. Because trial courts are required to consider certain factors when fashioning a forfeiture remedy, which we have set out, we direct the court of appeals to remand the case to the trial court, in turn, for review of its forfeiture award in light of these principles. . . .
We also hold that while legally sufficient evidence does not exist to prove the lost profits awarded by the trial court, legally sufficient evidence does exist to prove some reasonably certain amount of lost profits. We therefore also reverse the portion of the court of appeals’ judgment that ERI take nothing on its claims for lost profit damages and punitive damages and remand the case to the court of appeals to consider a remittitur, as well as any other remaining issues, before remanding the case to the trial court.

Interlocutory appeal for medical residents at state hospitals (two cases)

Geoffrey Klein, M.D. and Baylor College of Medicine v. Cynthia Hernandez, as the parent of next friend of N.H., a minor, No. 08-0453

Justice Medina delivered the opinion of the Court:

By statute, a state employee may appeal an interlocutory order denying a motion for summary judgment based on an assertion of immunity. . . . The issue here is whether a resident physician, working at a public hospital under an agreement with his private medical school, may take an interlocutory appeal under this statute. The court of appeals decided he could not . . . . We conclude, however, that by statute a resident physician at a private medical school is to be treated like a state employee for purposes of section 5l.014(5) when the underlying litigation arises from a residency program coordinated through a supported medical school at a public hospital.

Justice Willett delivered a concurring opinion agreeing with the outcome but criticizing the majority for looking beyond the text of the statute to construe its plain terms.

Geoffrey Zimmerman, M.D. v. Wendy Gonzalez Anaya, individually and as next friend of Christopher Gabriel Hernandez, deceased, No. 08-0580 (per curiam)

Through a per curiam opinion, the Court noted its decision today in Klein v. Hernandez, reversing remanding to the court of appeals to consider the appeal.

Does ice from a winter storm constitute an unreasonable risk to trigger premises liability?

Scott and White Memorial Hospital and Scott, Sherwood, and Brindley Foundation v. Gary Fair and Linda Fair, No. 08-0970

The facts were very brief:

Gary Fair drove his wife to a doctor’s appointment at Scott and White Memorial Hospital the morning after a winter storm. The Fairs walked through the parking lot, across the roadway separating the parking lot from the hospital, and next to a set of stairs leading to the building. There was ice in the parking lot, on the road, and on the steps. After the appointment, Fair left the building to retrieve his car while his wife waited inside. Fair slipped and fell on the road that separated the hospital from the parking lot. The Fairs sued [the hospital] for damages arising from injuries Fair sustained in the fall.

Writing an opinion for the Court, Chief Justice Jefferson looked to Texas precedents about the accumulation of other natural materials, such as dirt and mud. Under those cases, the Texas Supreme Court had held that these materials (in their natural state) did not pose an “unreasonable risk of harm” to business guests to create premises liability. M.O. Dental Lab v. Rape, 139 S.W.3d 671, 676 (Tex. 2004) (per curiam)

The Court rejected the argument that ice should be treated differently:

The Fairs argue that ice should be treated differently than mud because, unlike mud, icy conditions occur rarely in Texas. We see no basis for such a distinction. Both conditions pose the same risk of harm, and ice, like mud, results from precipitation beyond a premises owner’s control. Further, invitees “are at least as aware as landowners of the existence of [ice] that has accumulated naturally outdoors and will often be in a better position to take immediate precautions against injury.” . . .

Ice in Texas may occur less frequently than mud, but frequency is only one of many factors relevant to our analysis. And, the relative irregularity of icy conditions in this state may weigh against imposing liability. Requiring premises owners to guard against wintery conditions would inflict a heavy burden because of the limited resources landowners likely have on hand to combat occasional ice accumulations.

Accordingly, the Texas Supreme Court held “that naturally occurring ice that accumulates without the assistance or involvement of unnatural contact is not an unreasonably dangerous condition sufficient to support a premises liability claim.”

Forum non conveniens doesn’t require that the factors “strongly favor” dismissal

In re Ensco Offshore International Co., Ensco International Incorporated and Ensco Offshore Company, individually and as successor-in-interest of Chiles Offshore, Inc., No. 09-0317 (per curiam)

In a per curiam opinion, the Texas Supreme Court held that the trial court abused its discretion by refusing to dismiss under the forum non conveniens statute.

If you’re litigating about that statute, you’ll want to read the opinion very carefully — especially if there are several other logical places your suit could have been filed. (This case involved Australian nationals suing against Texas defendants about a drilling-rig accident in Singapore, with the drilling rig now located in Malaysia.)

The key to the case, however, was the burden of proof. More specifically, the Texas Supreme Court reiterated that there is no burden of proof under this statute — the trial court must weigh the evidence and, if it weighs even slightly in favor of dismissal, the statute requires dismissal:

The trial court stated at the forum non conveniens hearing “[w]hile I do think all the factors weigh in favor of a different forum probably in Australia, I don’t think that they weigh so heavily that I’ve got to dismiss this case.” Merema asserts, citing several cases, that the trial court did not abuse its discretion because the trial court correctly found that it should only disturb a plaintiff’s choice of forum if the balance of factors strongly favors the defendant, which they do not. . . . We disagree. The cases relied on by Merema were decided on common-law forum non conveniens grounds. The forum non conveniens statute does not contain similar requirements. See TEX. CIV. PRAC. & REM. CODE § 71.051. “The Legislature . . . by use of the word ‘shall,’ requires dismissal of the claim or action if the statutory factors weigh in favor of the claim or action being more properly heard in a forum outside Texas.” In re Gen. Elec., 271 S.W.3d at 686. The statute’s language simply does not require that the Section 71.051(b) factors “strongly” favor staying or dismissing the suit.

This police report wasn’t specific enough to put the city on notice of a possible claim under the Tort Claims Act

City of Dallas v. Olivia J. Carbajal, No. 09-0427 (per curiam)

Under the Texas Tort Claims Act, the plaintiff must either give a formal notice of claim or must show that the governmental unit has some “actual notice that . . . that claimant has received some injury.” Tex. Civ. Prac. & Rem. Code §101.101.

The argument here was whether a police report, which noted that the roadway was missing barricades, counted as “actual notice.”

In a per curiam opinion, the Texas Supreme Court held that at least this particular police report did not:

Although both parties agree that the road was not properly blocked, the report here did not provide the City with subjective awareness of fault because it did not even imply, let alone expressly state, that the City was at fault. The report only describes what apparently caused the accident (missing barricades). It does not say who failed to erect or maintain the barricades. Carbajal ignores the possibility that a private contractor or another governmental entity (such as the county or state) could have been responsible for the road’s condition. . . .
. . . When a police report does not indicate that the governmental unit was at fault, the governmental unit has little, if any, incentive to investigate its potential liability because it is unaware that liability is even at issue.

The Court reversed and rendered judgment dismissing the case.

Employment agreement requiring arbitration of workers compensation claims is enforceable

In re Odyssey Healthcare, Inc. and George Portillo, No. 09-0786 (per curiam)

The facts are summarized in the opinion through this short paragraph:

Guadalupe Morales worked in El Paso for Odyssey Healthcare, Inc., which provides hospice care. Morales alleges that she was injured at work when she tripped on an uneven step at a patient’s home. She sued Odyssey and her supervisor, George Portillo, for negligence.

Odyssey did not subscribe to the Texas Workers Compensation but instead provided its employees (as a condition of their employment) with a contract provision requiring arbitration of any injury claims.

The trial court found this was unconscionable. The court of appeals denied Odyssey’s request for mandamus relief.

In the Texas Supreme Court, Morales advanced four arguments: (1) that the arbitration agreement was substantively unconscionable; (2) that the Workers Compensation Act did not permit this; (3) that the Federal Arbitration Act violated the federal Tenth Amendment; and (4) that the underlying arbitration agreement was illusory or void for want of consideration.

The Texas Supreme Court rejected each argument in turn, granting mandamus relief that will send the case to arbitration. As for unconscionability, the Court noted that Morales had not presented specific enough evidence about the added costs she would incur and how they would prevent her from pursuing her claim.