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SUPREME COURT UPDATE JUSTICE PAUL W GREEN Supreme Court of Texas

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									         SUPREME COURT UPDATE




         JUSTICE PAUL W. GREEN
            Supreme Court of Texas
                 P.O. Box 12248
                Austin, TX 78711
                  512-463-1328
          paul.green@courts.state.tx.us




              State Bar of Texas
PRACTICE BEFORE THE TEXAS SUPREME COURT
                April 27, 2007
                    Austin

                CHAPTER 11
                             Justice Paul W. Green
                                Supreme Court of Texas
                                   P.O. Box 12248
                                  Austin, TX 78711

                                     512-463-1328
                             paul.green@courts.state.tx.us



JUSTICE PAUL W. GREEN was elected to the Supreme Court of Texas in 2004. Before
joining the Court, he served for ten years as a Justice on the Fourth Court of Appeals in
San Antonio.

A lifelong resident of San Antonio, Justice Green received his business degree from the
University of Texas at Austin in 1974 and his law degree from St. Mary’s University
School of Law in 1977. After law school, Justice Green, a third-generation lawyer, joined
his father in a litigation practice and remained there for seventeen years until he was
elected to the Court of Appeals in 1994.

During his career as a lawyer, Justice Green served as president of the San Antonio Bar
Association, director of the State Bar of Texas, and as a member of the House of
Delegates of the American Bar Association. He is a member of The American Law
Institute, the American Judicature Society, the College of the State Bar of Texas, and a
founding member of the William S. Sessions American Inn of Court. He is also a Fellow
of the Austin Bar Foundation and a Sustaining Life Fellow of the San Antonio and Texas
Bar Foundations.

Justice Green has two sons: Paul is a mechanical engineer at Bell Helicopters in Hurst,
and John is a police officer with the Fort Worth Police Department.
___________________________________________________

      SUPREME COURT UPDATE
___________________________________________________



                     Phil Johnson
                        Justice
                Supreme Court of Texas

                 Cassandra Robertson
                    Staff Attorney
                Supreme Court of Texas

                   Heather Holmes
                     George Hoyt
                      Law Clerks
                Supreme Court of Texas

                   Georgie Gonzales
                  Executive Assistant
                Supreme Court of Texas



      Special thanks to all the Staff Attorneys and
      Law Clerks at the Supreme Court of Texas
          for their substantial contributions.




___________________________________________________

  January 1, 2006 – December 31, 2006
___________________________________________________
Supreme Court Update
January 1, 2006 – December 31, 2006

                                                       TABLE OF CONTENTS


I. SCOPE OF THIS ARTICLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. ADMINISTRATIVE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
      A. Administrative Procedures Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
             1. El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 161 S.W.3d 587 (Tex.
                      App.—Austin 2005), pet. granted, 49 Tex. Sup. Ct. J. 782 (June 30, 2006) [05-
                      0372]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
      B. Civil Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
             1. City of Houston v. Jackson, 192 S.W.3d 764 (Tex. April 7, 2006) [04-0465]. . . . . . 1
             2. Thomas v. Long, 207 S.W.3d 334 (Tex. April 21, 2006) [03-0204]. . . . . . . . . . . . . . 2
      C. Driver’s License Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
             1. Tex. Dep’t of Pub. Safety v. Alford,                             S.W.3d , 50 Tex. Sup. Ct. J. 188 (Tex.
                      December 1, 2006) [05-0164]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
      D. Exhaustion of Administrative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
             1. Blue Cross Blue Shield of Tex., v. Duenez, 201 S.W.3d 674, (Tex. August 31, 2006) [05-
                      0521]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
             2. Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501 (Tex. June 2, 2006) [04-
                      0359]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
             3. Christus Health Gulf Coast v. Aetna, Inc., 167 S.W.3d 879 (Tex. App.—Houston [14th
                      Dist.] 2005), pet. granted, 49 Tex. Sup. Ct. J. 966 (September 1, 2006) [05-
                      0710]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
      E. Judicial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             1. City of Houston v. Clark, 194 S.W.3d 314 (Tex. June 30, 2006) [04-0930]. . . . . . . . 5
      F. Public Utility Commission/Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             1. AT&T Commc’ns of Tex., L.P., v. Sw. Bell Tel. Co., 186 S.W.3d 517 (Tex. January 27,
                      2006) [03-0789]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             2. In re Sw. Bell Tel. Co., 2005 WL 1405777 (Tex. App.—Corpus Christi 2005), argument
                      granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. J. 360 (February 7, 2006)
                      [05-0511]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
             3. In re Sw. Bell Tel. Co., 2004 WL 2365194 (Tex. App.—Corpus Christi 2004), argument
                      granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. J. 1041 (September 25,
                      2006) [05-0951]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
      G. Texas Water Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
             1. City of Marshall v. City of Uncertain, 206 S.W.3d 97 (Tex. June 12, 2006) [03-
                      1111]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

III. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
       A. Enforcement of Arbitration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
              1. In re D. Wilson Constr., 196 S.W.3d 774 (Tex. June 30, 2006) [05-0326], consolidated
                       with Am. Standard and the Trane Co. v. Brownsville Indep. Sch. Dist., 196 S.W.3d
                       774, (Tex. June 30, 2006) [05-0327]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
              2. In re Dallas Peterbilt, Ltd. L.L.P., 196 S.W.3d 161 (Tex. June 16, 2006) [05-
                       0706]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
              3. In re Dillard Dep’t Stores, Inc., 198 S.W.3d 778 (Tex. March 6, 2006) [04-1132]. . 8
              4. In re Dillard Dep’t Stores, Inc., 186 S.W.3d 514 (Tex. January 27, 2006) [05-
                       0250]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
       B. Enforcement/Non-Signatories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


                                                                        ii
Supreme Court Update
January 1, 2006 – December 31, 2006

                 1. In re Palm Harbor Homes, Inc., 195 S.W.3d 672 (Tex. June 9, 2006) [04-0490]. . . . 9
                 2. Meyer v. WMCO-GP, L.L.C., S.W.3d , 50 Tex. Sup. Ct. J. 264 (Tex. December 22,
                          2006) [04-0252]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
           C. Waiver of Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
                 1. Perry Homes v. Cull, 173 S.W.3d 565 (Tex. App.—Fort Worth 2005), pet. granted, 50
                          Tex. Sup. Ct. J. 218 (December 18, 2006) [05-0882]. . . . . . . . . . . . . . . . . . . . 10

IV. ATTORNEYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      A. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
             1. Hoover Slovacek L.L.P. v. Walton, 206 S.W.3d 557 (Tex. November 3, 2006) [04-
                         1004]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      B. Guardian Ad Litem Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
             1. Land Rover U.K., Ltd. v. Hinojosa,                                   S.W.3d            , 50 Tex. Sup. Ct. J. 236 (Tex.
                         December 15, 2006) [04-0794]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
      C. Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
             1. Am. Flood Research, Inc. v. Jones, 192 S.W.3d 581 (Tex. May 5, 2006) [05-
                         0271]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

V. CONSTITUTIONAL LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
     A. Commercial Speech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
            1. Pruett v. Harris County Bail Bond Bd., 177 S.W.3d 260 (Tex. App.—Houston [1st Dist.]
                    2005), pet. granted, 49 Tex. Sup. Ct. J. 966 (September 5, 2006) [05-0283]. . 12
     B. Punitive/Exemplary Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
            1. Tony Gullo Motors I, L.P. v. Chapa,                          S.W.3d , 50 Tex. Sup. Ct. J. 278 (Tex.
                    December 22, 2006) [04-0961]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
     C. Religion Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
            1. Barr v. City of Sinton, 2005 WL 3117209 (Tex. App.—Corpus Christi 2005), pet.
                    granted, 50 Tex. Sup. Ct. J. 218 (December 18, 2006) [06-0074]. . . . . . . . . . 14
            2. Westbrook v. Penley, 146 S.W.3d 220 (Tex. App.—Fort Worth 2004), pet. granted, 49
                    Tex. Sup. Ct. J. 509 (April 24, 2006) [04-0838]. . . . . . . . . . . . . . . . . . . . . . . . 14
     D. Takings Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
            1. City of San Antonio v. Pollock, 155 S.W.3d 322 (Tex. App.—San Antonio 2004), pet.
                    granted, 49 Tex. Sup. Ct. J. 567 (May 8, 2006) [04-1118]. . . . . . . . . . . . . . . . 14
            2. State v. Holland, 161 S.W.3d 227 (Tex. App.—Corpus Christi 2005), pet. granted, 49
                    Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0292]. . . . . . . . . . . . . . . . . . . . . . . . 15

VI. CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
      A. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
             1. State v. Oakley, 181 S.W.3d 855 (Tex. App.—Austin 2005), pet. granted, 50 Tex. Sup.
                     Ct. J. 65 (October 30, 2006) [06-0050], consolidated for oral argument with State
                     v. Oakley, 2006 WL 152108 (Tex. App.—Austin 2006), pet. granted, 50 Tex. Sup.
                     Ct. J. 65 (October 30, 2006) [06-0172]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
      B. Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
             1. First Commerce Bank v. Palmer, 165 S.W.3d 366 (Tex. App.—Corpus Christi 2004),
                     pet. granted, 49 Tex. Sup. Ct. J. 636 (May 29, 2006) [05-0686]. . . . . . . . . . . 16
      C. Discovery Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
             1. Via Net v. TIG Ins. Co., S.W.3d , 50 Tex. Sup Ct. J. 296 (Tex. December 22, 2006),
                     [05-0785]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

           D. Economic Duress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

                                                                          iii
Supreme Court Update
January 1, 2006 – December 31, 2006

                  1. Sudan v. Mackenzie, 199 S.W.3d 291 (Tex. April 21, 2006) [04-0921]. . . . . . . . . . 17
           E. Statute of Frauds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
                  1. The Long Trusts v. Griffin, S.W.3d , 50 Tex. Sup. Ct. J. 209 (Tex. December 8,
                          2006) [04-0825]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
           F. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
                  1. Gym-N-I Playgrounds, Inc. v. Snider, 158 S.W.3d 78 (Tex. App.—Austin 2005), pet.
                          granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0197]. . . . . . . . . . . . . . 18

VII. CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
      A. Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
             1. Gaines v. Kelly, 181 S.W.3d 394 (Tex. App.—Waco 2005), pet. granted, 49 Tex. Sup.
                     Ct. J. 950 (August 28, 2006) [05-1092]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
      B. Shareholder Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
             1. Willis v. Donnelly, 199 S.W.3d 262 (Tex. June 2, 2006) [04-0409]. . . . . . . . . . . . 19

VIII. DRAM SHOP ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
       A. Proportionate Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
             1. F.F.P. Operating Partners L.P. v. Duenez, S.W.3d , 50 Tex. Sup. Ct. J. 102 (Tex.
                     November 3, 2006) [02-0381]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

IX. ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
      A. Candidate Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
            1. In re Angelini, 186 S.W.3d 558 (Tex. February 24, 2006) [06-0088]. . . . . . . . . . . . 21
            2. In re Barnett, 207 S.W.3d 326 (Tex. April 21, 2006) [06-0275]. . . . . . . . . . . . . . . . 21
            3. In re Carlisle, S.W.3d , 49 Tex. Sup. Ct. J. 262 (Tex. January 17, 2006) [06-
                     0025]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
            4. In re Francis, 186 S.W.3d 534 (Tex. January 27, 2006) [06-0040]. . . . . . . . . . . . . . 22
            5. In re Holcomb, 186 S.W.3d 553 (Tex. January 27, 2006) [06-0042]. . . . . . . . . . . . 22
            6. In re Sharp, 186 S.W.3d 556 (Tex. January 24, 2006) [06-0061]. . . . . . . . . . . . . . . 23

X. EMPLOYMENT LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
     A. Covenants Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
            1. Alex Sheshunoff Mgmt. Servs. v. Johnson, S.W.3d , 50 Tex. Sup. Ct. J. 44 (Tex.
                    October 20, 2006) [03-1050]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
            2. In Re AutoNation, Inc., 186 S.W.3d 576 (Tex. App.—Houston [14th Dist.] 2005),
                    argument granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. J. 567 (May 8,
                    2006) [05-0311]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
     B. Employer Liability for Employee’s Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
            1. Loram Maintenance of Way, Inc. v. Ianni, S.W.3d , 49 Tex. Sup. Ct. J. 874 (Tex.
                    June 30, 2006) [04-0666]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
     C. Employment Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
            1. Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738 (Tex. February 27, 2006)
                    [03-0111]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
     D. Independent Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
            1. Fifth Club, Inc. v. Ramirez, 196 S.W.3d 788 (Tex. June 30, 2006) [04-0550]. . . . . 25
     E. Law Enforcement Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
            1. VanDevender v. Woods, 175 S.W.3d 545 (Tex. App.—Beaumont 2005), pet. granted,
                    49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0956]. . . . . . . . . . . . . . . . . . . . 25

           F. Texas Workers’ Compensation Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

                                                                         iv
Supreme Court Update
January 1, 2006 – December 31, 2006

                 1. Morales v. Liberty Mut. Ins. Co., 169 S.W.3d 485 (Tex. App.—El Paso 2005), pet.
                         granted, 49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0754]. . . . . . . . . . . . . 26
                 2. W. Steel Co. v. Altenburg, 206 S.W.3d 121 (Tex. October 27, 2006) [05–0630]. . 26
           G. Whistleblower Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
                 1. Ed Rachal Foundation v. D’Unger, 207 S.W.3d 330 (Tex. April 21, 2006) [03-1101].
                           . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
                 2. Montgomery County v. Park, 2005 WL 2667488 (Tex. App.—Waco 2005), pet. granted,
                         50 Sup. Ct. J. 218 (December 18, 2006) [05-1023]. . . . . . . . . . . . . . . . . . . . . . 27

XI. EVIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
      A. Expert Testimony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
            1. Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797 (Tex. June 16, 2006) [04-1039].
                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
            2. Ford Motor Co. v. Ledesma, 173 S.W.3d 78 (Tex. App.—Austin 2005), pet. granted, 50
                      Sup. Ct. J. 65 (October 30, 2006) [05-0895]. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
            3. Guevara v. Ferrer, 192 S.W.3d 39 (Tex. App.—El Paso 2005), pet. granted, 50 Tex. Sup.
                      Ct. J. 65 (October 30, 2006) [05-1100]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

XII. FAMILY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
       A. Child Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
              1. In re A.M., 192 S.W.3d 570 (Tex. May 5, 2006) [03-0509]. . . . . . . . . . . . . . . . . . . 29
              2. In the Interest of M.C.C., 187 S.W.3d 383 (Tex. January 27, 2006) [04-0787]. . . . 29
       B. Grandparent Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
              1. In re Karen Mays-Hooper, 189 S.W.3d 777 (Tex. April 7, 2006) [04-1040]. . . . . . 29
       C. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
              1. In Re Saperstein, 2006 WL 278245 (Tex. App.—Houston [14th Dist.] 2006), argument
                       granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. 951 (August 28, 2006) [06-
                       0129]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
       D. Termination of Parental Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
              1. In re H.R.M., S.W.3d , 50 Tex. Sup. Ct. J. 192 (Tex. December 1, 2006) [06-
                       0270]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
              2. In re Tex. Dept. of Family and Protective Servs., S.W.3d , 50 Tex. Sup. Ct. J. 238
                       (Tex. December 15, 2006) [04–1043]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

XIII. GOVERNMENTAL IMMUNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
       A. Declaratory Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
              1. Houston Mun. Employees Pension Sys. v. Ferrell, 177 S.W.3d 502 (Tex. App.–Houston
                      [1st Dist.] 2005), pet. granted, 49 Tex. Sup. Ct. J. 1040 (September 25, 2006) [05-
                      0587]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
       B. Derivative Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
              1. Ben Bolt-Palito Blanco Consol. ISD v. Tex. Political Subdivisions Prop./Cas. Joint Self-
                      Ins. Fund, S.W.3d , 50 Tex. Sup. Ct. J. 344 (December 29, 2006) [05-
                      0340]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
       C. Federal Civil Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
              1. County of Dallas v. Sempe, 151 S.W.3d 291 (Tex. App.—Dallas 2004), pet. granted, 49
                      Tex. Sup. Ct. J. 636 (May 29, 2006) [05-0022]. . . . . . . . . . . . . . . . . . . . . . . . . 32
       D. Interlocutory Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
              1. Tex. A&M Univ. Sys. v. Koseoglu, 167 S.W.3d 374 (Tex. App.—Waco 2005), pet.
                      granted, 49 Tex. Sup. Ct. J. 642 (May 29, 2006) [05-0321]. . . . . . . . . . . . . . . 32
       E. Premise and Special Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

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                  1. City of San Antonio v. Hartman, 155 S.W.3d 460 (Tex. App.—San Antonio 2004), pet.
                            granted, 49 Tex. Sup. Ct. J. 360 (February 24, 2006) [05-0147]. . . . . . . . . . . 33
           F. Recreational Use Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
                  1. State of Texas v. Shumake, 199 S.W.3d 279 (Tex. June 26, 2006) [04-0460]. . . . . 33
           G. Suits by the State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
                  1. City of Galveston v. State, 175 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2004), pet.
                            granted, 49 Tex. Sup. Ct. J. 254 (January 23, 2006) [04-0890]. . . . . . . . . . . . 34
           H. Texas Tort Claims Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
                  1. City of Dallas v. Thompson, S.W.3d , 50 Tex. Sup. Ct. J. 189 (Tex. December 1,
                            2006) [05-0787]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
                  2. City of Grapevine v. Sipes, 195 S.W.3d 689 (Tex. June 16, 2006) [04-0933]. . . . . 34
                  3. Mission Consol. Indep. Sch. Dist. v. Garcia, 166 S.W.3d 902 (Tex. App.—Corpus
                            Christi 2005), pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-0734],
                            consolidated for oral argument with Mission Consol. Indep. Sch. Dist. v.
                            Sotuyo,166 S.W.3d 902 (Tex. App.—Corpus Christi 2005), pet. granted, 50 Tex.
                            Sup. Ct. J. 151 (December 4, 2006) [05-0762], consolidated for oral argument with
                            Mission Consol. Indep. Sch. Dist. v. Medina, 166 S.W.3d 902 (Tex. App.—Corpus
                            Christi 2005), pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-
                            0763]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
                  4. Stephen F. Austin Univ. v. Flynn, 2004 WL 948885 (Tex. App.—Tyler 2004), pet.
                            granted, 49 Tex. Sup. Ct. J. 782 (June 30, 2006) [04-0515]. . . . . . . . . . . . . . . 35
           I. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
                  1. Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. June 30, 2006) [02-
                            1031]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
                  2. Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. June 30, 2006) [03-0878]. . . . . . . 37

XIV. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
      A. Article 21.55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
             1. State Farm Life Ins. Co. v. Martinez, 174 S.W.3d 772 (Tex. App.—Waco 2005), pet
                     granted, 49 Tex. Sup. Ct. J. 966 (September 5, 2006) [05-0812]. . . . . . . . . . . 37
      B. Bad-Faith Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
             1. Minn. Life Ins. Co. v. Vasquez, 192 S.W.3d 774 (Tex. April 7, 2006) [04-0477]. . 38
      C. Class Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
             1. Farmers Group, Inc. v. Lubin, 157 S.W.3d 113 (Tex. App.—Austin 2005), pet. granted,
                     50 Tex. Sup. Ct. J. 72 (October 30, 2006) [05-0169]. . . . . . . . . . . . . . . . . . . . 39
      D. Duty to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
             1. Nat’l Union Fire Ins. Co. v. Crocker, certified question accepted, 50 Tex. Sup. Ct. J. 10
                     (October 16, 2006) [06-0868]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
             2. PAJ, Inc. v. Hanover Ins. Co., 170 S.W.3d 258 (Tex. App.–Dallas 2005), pet. granted,
                     49 Tex. Sup. Ct. J. 567 (May 5, 2006) [05-0849]. . . . . . . . . . . . . . . . . . . . . . . 40
      E. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
             1. Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co., 150 S.W.3d 718 (Tex. App.—Austin
                     2004), pet. granted, 49 Tex. Sup. Ct. J. 255 (January 23, 2006) [05-0006]. . . 40
      F. Policies/Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
             1. A.G. Edwards & Sons, Inc. v. Beyer, 170 S.W.3d 684 (Tex. App.—El Paso 2005), pet.
                     granted, 50 Tex. Sup. Ct. J. 251 (December 28, 2006) [05-0580]. . . . . . . . . . 41
             2. Evanston Ins. Co. v. ATOFINA Petrochem., Inc., S.W.3d , 49 Tex. Sup. Ct. J. 589
                     (Tex. May 5, 2006) [03-0647], rehearing granted October 27, 2006. . . . . . . . 41
             3. Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. August 31, 2006) [04-1104]. . . 42



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                  4. GuideOne Elite Ins. Co. v. Fielder Road Baptist Church, 197 S.W.3d 305 (Tex. June 30,
                           2006) [04-0692]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
           G. Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
                  1. Lexington Ins. Co. v. Strayhorn, S.W.3d , 50 Tex. Sup. Ct. J. 181 (Tex. December
                           1, 2006) [04-0429]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
           H. Regulation of Insurance Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
                  1. Allstate Ins. Co. v. Fleming, 2005 WL 1536228 (Tex. App.—Austin 2005), pet. granted,
                           49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0645]. . . . . . . . . . . . . . . . . . . . . 43
                  2. Mid-Century Ins. Co. v. Ademaj, 2004 WL 2694475 (Tex. App.—Tyler 2004), pet.
                           granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0016]. . . . . . . . . . . . . . 43
           I. Reimbursement for Claims Paid but Not Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
                  1. Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, Inc.,
                              S.W.3d , 48 Tex. Sup. Ct. J. 735 (Tex. May 27, 2005), motion for rehearing
                           granted, 49 Tex. Sup. Ct. J. 240 (January 9, 2006) [02-0730]. . . . . . . . . . . . . 44
           J. Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
                  1. Allstate Indem. Co. v. Forth, 204 S.W.3d 795 (Tex. April 21, 2006) [05-0057]. . . 44
           K. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
                  1. Fortis Benefits v. Cantu, 170 S.W.3d 755 (Tex. App.—Waco 2005), pet. granted 49 Tex.
                           Sup. Ct. J. 950 (August 28, 2006) [05-0791]. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
           L. Underinsured/Uninsured Motorist Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
                  1. Brainard v. Trinity Universal Ins. Co.,                            S.W.3d , 50 Tex. Sup. Ct. J. 271 (Tex.
                           December 22, 2006) [04-0537]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
                  2. State Farm Mut. Auto. Ins. Co. v. Nickerson, S.W.3d , 50 Tex. Sup. Ct. J. 268 (Tex.
                           December 22, 2006) [04-0427]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
                  3. State Farm Mut. Auto. Ins. Co. v. Norris, S.W.3d , 50 Tex. Sup. Ct. J. 269 (Tex.
                           December 22, 2006) [04-0514]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

XV. INTENTIONAL TORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
      A. False Imprisonment/Assault and Battery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
             1. Pleasant Glade Assembly of God v. Schubert, 174 S.W.3d 388 (Tex. App.—Fort Worth
                      2005), pet. granted, 49 Tex. Sup. Ct. J. 1041 (September 25, 2006) [05-
                      0916]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
      B. Malicious Prosecution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
             1. In re Bexar County Criminal Dist. Attorney’s Office, 179 S.W.3d 47 (Tex. App.—San
                      Antonio 2005), argument granted on pet. for writ of mandamus, 49 Tex. Sup. Ct.
                      J. 509 (April 24, 2006) [05-0613]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
             2. Kroger Tex. Ltd. P’ship v. Suberu, S.W.3d , 49 Tex. Sup. Ct. J. 592 (Tex. May 5,
                      2006) [03-0913]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

XVI. JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
      A. Amount in Controversy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
            1. United Servs. Auto. Ass’n v. Brite, 161 S.W.3d 566 (Tex. App.—San Antonio 2005),
                   pet. granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0132]. . . . . . . . . . . 48
      B. Minimum Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
            1. PHC-Minden, L.P. v. Kimberly-Clark Corp., 2005 WL 1979102 (Tex. App.—Tyler
                   2005), pet. granted, 49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0823]. . . . 48
      C. Mootness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
            1. Marshall v. Housing Auth., 198 S.W.3d 782 (Tex. March 3, 2006) [04-0147]. . . . 49




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           D. Public Utility Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
                 1. In re Sw. Bell Tel. Co., 2005 WL 1405777 (Tex. App.—Corpus Christi 2005), argument
                          granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. J. 360 (February 7, 2006)
                          [05-0511]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

XVII. JUVENILE JUSTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
       A. Confessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
             1. In the Matter of H.V., 179 S.W.3d 746 (Tex. App.—Fort Worth 2005), pet. granted, 50
                      Tex. Sup. Ct. J. 151 (December 4, 2006) [06-0005]. . . . . . . . . . . . . . . . . . . . . 50

XVIII. MEDICAL MALPRACTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
       A. Expert Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
              1. Hillcrest Baptist Med. Ctr. v. Wade, 172 S.W.3d 55 (Tex. App.—Waco 2005), pet.
                      granted, 49 Tex. Sup. Ct. J. 1041 (September 25, 2006) [05-0773]. . . . . . . . . 50
              2. In re McAllen Med. Ctr., Inc., 2005 WL 2456602 (Tex. App.—Corpus Christi 2005),
                      argument granted on pet. for writ of mandamus, 49 Tex. Sup. Ct. J. 951 (August 28,
                      2006) [05-0892]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
       B. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
              1. Kallam v. Boyd, 152 S.W.3d 670 (Tex. App.—Fort Worth 2004), pet. granted, 49 Tex.
                      Sup. Ct. J. 966 (September 5, 2006) [05-0027]. . . . . . . . . . . . . . . . . . . . . . . . . 51
       C. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
              1. Yancy v. United Surgical Partners Int’l, Inc., 170 S.W.3d 185 (Tex. App.—Dallas 2005),
                      pet. granted, 50 Tex. Sup. Ct. J. 65 (October 30, 2006) [05-0925]. . . . . . . . . . 52

XIX. MUNICIPAL LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
      A. Estoppel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
             1. City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770 (Tex. March 3, 2006)
                     [04-0340]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

XX. NEGLIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
      A. Duty to Warn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
             1. Kroger Co. v. Elwood, 197 S.W.3d 793 (Tex. May 12, 2006) [04-1133]. . . . . . . . . 53
      B. Independent Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
             1. Cent. Ready Mix Concrete Co. v. Islas, 2005 WL 428410 (Tex. App.—Corpus Christi
                     2005), pet. granted, 50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-0940]. 54
      C. Medical Malpractice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
             1. Jackson v. Axelrad, 142 S.W.3d 418 (Tex. App.—Houston[14th Dist.] 2004), pet.
                     granted, 49 Tex. Sup. Ct. J. 14 (January 23, 2006) [04-0923]. . . . . . . . . . . . . 54
             2. Jernigan v. Langley, 195 S.W.3d 91 (Tex. June 9, 2006) [05-0299]. . . . . . . . . . . . . 54
             3. Larson v. Downing, 197 S.W.3d 303 (Tex. June 12, 2006) [05-0155]. . . . . . . . . . . 55
             4. St. Luke’s Episcopal Hosp. v. Marks, 193 S.W.3d 575 (Tex. May 5, 2006) [05-
                     0693]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
      D. Premises Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
             1. Brookshire Grocery Co. v. Taylor, S.W.3d , 50 Tex. Sup. Ct. J. 170 (December 1,
                     2006) [03-0408]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
             2. Gen. Elec. Co. v. Moritz, 2004 WL 1119481, (Tex. App.—Fort Worth 2004), pet.
                     granted, 49 Tex. Sup. Ct. J. 567 (May 8, 2006) [04-0871]. . . . . . . . . . . . . . . . 57
             3. LMB, Ltd. v. Moreno, 201 S.W.3d 686 (Tex. August 31, 2006) [05-0764]. . . . . . . 57
             4. Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566 (Tex. February 24, 2006) [04-1046]8                                           5.
             5. Wilhelm v. Flores, 195 S.W.3d 96 (Tex. June 9, 2006) [04-0208]. . . . . . . . . . . . . . 58

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January 1, 2006 – December 31, 2006



XXI. OIL AND GAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
      A. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
             1. Seagull Energy E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342 (Tex. June 16, 2006)
                    [04-0662]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
      B. Damages from a Previous Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
             1. Exxon Corp. v. Emerald Oil & Gas Co., 2005 WL 167051 (Tex. App.—Corpus Christi
                    2005), pet. granted, 50 Tex. Sup. Ct. J. 64 (October 30, 2006) [05-0729]. . . . 59
      C. Royalty Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
             1. Dominion Okla. Tex. Exploration & Prod., Inc. v. Castle Tex. Oil & Gas L.P., 2005 WL
                    1797065 (Tex. App.—Corpus Christi 2005), pet granted, 49 Tex. Sup. Ct. J. 950
                    (August 28, 2006) [05-0739]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
      D. Subsurface Trespass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
             1. Coastal Oil & Gas Corp. v. Garza Energy Trust, 166 S.W.3d 301 (Tex. App.—Corpus
                    Christi 2005), pet. granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-
                    0466]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

XXII. PROBATE: WILLS, TRUSTS, ESTATES, AND GUARDIANSHIPS . . . . . . . . . . . . . . . . 60
      A. Will Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
             1. In re the Estate of Marvin Nash, 164 S.W.3d 856 (Tex. App.—Beaumont 2005), pet.
                     granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0538]. . . . . . . . . . . . . . 60

XXIII. PROCEDURE—APPELLATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
       A. Dismissal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
              1. Higgins v. Randall County Sheriff’s Office, 193 S.W.3d 898 (Tex. May 26, 2006) [05-
                       0095]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
              2. Peña v. McDowell, 201 S.W.3d 665 (Tex. August 31, 2006) [05-0546]. . . . . . . . . 61
       B. Effect of Non-Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
              1. The Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon ex rel. Shultz, 195
                       S.W.3d 98 (Tex. June 12, 2006) [05-0594]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
       C. Intervention on Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
              1. In re Lumbermens Mut. Cas. Co., 184 S.W.3d 718 (February 3, 2006) [04-0245]. . 62
       D. Memorandum Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
              1. Citizens Nat’l Bank in Waxahachie v. Scott, 195 S.W.3d 94 (Tex. June 9, 2006) [05-
                       0454]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
              2. Gonzalez v. McAllen Med. Ctr., Inc., 195 S.W.3d 680 (Tex. June 9, 2006) [03-
                       0939]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
       E. Motion for Reconsideration En Banc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
              1. City of San Antonio v. Hartman, 201 S.W.3d 667 (Tex. August 31, 2006) [05-
                       0147]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
       F. Reduction of Damages on Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
              1. Barker v. Eckman, S.W.3d , 50 Tex. Sup. Ct. J. 175 (Tex. December 1, 2006) [04-
                       0194]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

XXIV. PROCEDURE—PRETRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
      A. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
            1. Hardy v. Int’l Interests, L.P., certified question accepted, 49 Tex. Sup. Ct. J. 681 (June
                    9, 2006) [06-0347]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63




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           B. Contractual Jury Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
                  1. In re Gen. Elec. Capital Corp., 203 S.W.3d 314, (Tex. September 22, 2006) [05-
                           0482]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
           C. Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
                  1. In re Ford Motor Co., S.W.3d , 50 Tex. Sup. Ct. J. 291 (Tex. December 22, 2006)
                           [05-0696]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
           D. Discovery/Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
                  1. In re Graco Children’s Prods., Inc., S.W.3d , 50 Tex. Sup. Ct. J. 87 (Tex. October
                           27, 2006) [05-0479]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
           E. Service of Citation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
                  1. City of Tyler v. Beck, 196 S.W.3d 784 (Tex. June 30, 2006) [04-0813]. . . . . . . . . 65
           F. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
                  1. Exxon Corp. v. Emerald Oil & Gas Co., 180 S.W.3d 299 (Tex. App.—Corpus Christi
                           2005), pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-1076]. . 65
           G. Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
                  1. In re Applied Chem. Magnesias Corp., 206 S.W.3d 114 (Tex. September 5, 2006) [04-
                           1119]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
                  2. In re Team Rocket, 2006 WL 1071213 (Tex. App.—Houston [14th Dist.] 2006),
                           argument granted on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 151 (December
                           4, 2006) [06-0414]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
           H. Verification of Motions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
                  1. Guest v. Dixon, 195 S.W.3d 687 (Tex. June 16, 2006) [04-0128]. . . . . . . . . . . . . . 67

XXV. PROCEDURE—TRIAL AND POST-TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
      A. Bills of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
              1. Cary v. Alford, 203 S.W.3d 837 (Tex. September 22, 2006) [05-1018]. . . . . . . . . . 67
              2. Ross v. Nat’l Ctr. for the Employment of the Disabled, 197 S.W.3d 795 (Tex. June 16,
                       2006) [05-1082]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
      B. Consent Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
              1. Chisholm v. Chisholm, S.W.3d , 50 Tex. Sup. Ct. J. 191 (Tex. December 1, 2006)
                       [05-0996]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
      C. Default Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
              1. Fid. & Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571 (Tex. February 24, 2006)
                       [05-0295]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
              2. In re R.R., S.W.3d , 50 Tex. Sup. Ct. J. 195 (Tex. December 1, 2006) [06-
                       0460]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
              3. Ross v. Nat’l Ctr. for the Employment of the Disabled, 201 S.W.3d 694, (Tex. August
                       31, 2006) [05-0534]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
      D. Enforcement of Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
              1. In re Smith, 192 S.W.3d 564 (Tex. May 5, 2006) [06-0107] consolidated with In re Main
                       Place Custom Homes, Inc., 192 S.W.3d 564 (Tex. May 5, 2006) [06-0108]. . 69
      E. Error Preservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
              1. Parker v. Barefield, 206 S.W.3d 119 (Tex. October 27, 2006) [06-0201]. . . . . . . . 70
      F. Finality of Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
              1. Brittingham-Sada De Ayala v. Mackie, 193 S.W.3d 575 (Tex. April 21, 2006) [04-
                       0160]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
              2. Childers v. Advanced Found. Repair, L.P., 193 S.W.3d 897 (Tex. May 26, 2006) [05-
                       0831]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
              3. Kiefer v. Touris, 197 S.W.3d 300 (Tex. May 26, 2006) [05-0651]. . . . . . . . . . . . . 71



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          G. Jury Instructions and Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
                  1. Bed, Bath & Beyond, Inc. v. Urista,                               S.W.3d , 50 Tex. Sup. Ct. J. 334 (Tex.
                           December 29, 2006) [04-0332]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
                  2. Dew v. Crown Derrick Erectors, Inc., S.W.3d , 49 Tex. S. Ct. J. 851 (Tex. June 30,
                           2006) [03-1128]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
                  3. Shupe v. Lingafelter, 192 S.W.3d 577 (Tex. May 5, 2006) [05-0083]. . . . . . . . . . . 73
          H. Motion for New Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
                  1. In re Brookshire Grocery Co., 160 S.W.3d 288 (Tex. App.—Texarkana 2005), argument
                           granted on petition for writ of mandamus, 49 Tex. Sup. Ct. J. 360 (February 27,
                           2006) [05-0300]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
          I. Post-Judgment Filing Deadlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
                  1. Hernandez v. Nat’l Restoration Techs.,                              S.W.3d , 50 Tex. Sup. Ct. J. 251 (Tex.
                           December 22, 2006) [06-0454]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
                  2. In re The Lynd Co., 195 S.W.3d 682 (Tex. June 12, 2006) [05-0432]. . . . . . . . . . . 74
          J. Voir Dire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
                  1. Hyundai Motor Co. v. Vasquez, 189 S.W.3d 743 (Tex. March 10, 2006) [03-
                           0914]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

XXVI. PRODUCTS LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
      A. Causation Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
             1. Bic Pen Corp. v. Carter, 171 S.W.3d 657 (Tex. App.—Corpus Christi 2005), pet.
                    granted, 50 Tex. Sup. Ct. J. 64 (October 30, 2006) [05-0835]. . . . . . . . . . . . . 76
             2. Borg-Warner Corp. v. Flores, 153 S.W.3d 209 (Tex. App.—Corpus Christi 2004), pet.
                    granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0189]. . . . . . . . . . . . . . 76
             3. Mack Trucks, Inc. v. Tamez,                   S.W.3d , 50 Tex. Sup. Ct. J. 80 (Tex. October 27,
                    2006) [03-0526]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
      B. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
             1. Owens & Minor, Inc. v. Ansell Healthcare Prods., Inc., certified question accepted, 49
                    Sup. Ct. J. 567 (May 8, 2006) [06-0322]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
             2. SSP Partners v. Gladstrong Invs. (USA) Corp., 169 S.W.3d 27 (Tex. App.—Corpus
                    Christi 2005), pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-
                    0721]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

XXVII. REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
      A. Adverse Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            1. Tran v. Macha, S.W.3d , 50 Tex. Sup. Ct. J. 186 (Tex. December 1, 2006) [04-
                    1107]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
      B. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            1. Bulanek v. WesTTex 66 Pipeline Co.,                           S.W.3d , 50 Tex. Sup. Ct. J. 174 (Tex.
                    December 1, 2006) [04-0011]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            2. PR Invs. v. State, 180 S.W.3d 654 (Tex. App.—Houston [14th Dist.] 2005), pet. granted,
                    50 Tex. Sup. Ct. J. 218 (December 18, 2006) [04-0431]. . . . . . . . . . . . . . . . . 79
      C. Constable’s Deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
            1. AIC Mgmt. v. Crews, 2005 WL 267667 (Tex. App.—Houston [1st Dist.] 2005), pet.
                    granted, 49 Tex. Sup. Ct. J. 1040 (September 25, 2006) [05-0270]. . . . . . . . . 79
      D. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
            1. FKM P’ship, Ltd. v. Bd. of Regents of the Univ. of Houston Sys., 178 S.W.3d 1 (Tex.
                    App.—Houston [14th Dist.] 2005), pet. granted, 50 Tex. Sup. Ct. J. 227 (December
                    18, 2006) [05-0661]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80



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           E. Inverse Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
                  1. Hallco Tex., Inc. v. McMullen County,                               S.W.3d , 50 Tex. Sup. Ct. J. 314 (Tex.
                          January 2, 2007) [02-1176]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
                  2. State v. Delany, 197 S.W.3d 297 (Tex. April 28, 2006) [04-0628]. . . . . . . . . . . . . . 81
           F. Mechanic’s Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
                  1. Reliance Nat’l Indem. Co. v. Advance’d Temps., Inc., 165 S.W.3d 1 (Tex. App.—Corpus
                          Christi 2004), pet. granted, 49 Tex. Sup. Ct. J. 567 (May 8, 2006) [05-
                          0558]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
           G. Zoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
                  1. City of Dallas v. Vanesko, 189 S.W.3d 777 (Tex. April 7, 2006) [04-0263]. . . . . . 82

XXVIII. TELEPHONE CONSUMER PROTECTION ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
      A. Liability for Unsolicited Faxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
             1. Chair King, Inc. v. GTE Mobilnet of Houston Inc., 184 S.W.3d 707 (Tex. February 3,
                      2006) [04-0570]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

XXIX. TEXAS FREE ENTERPRISE & ANTITRUST ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
      A. Interpretation and Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
             1. Coca-Cola Co. v. Harmar Bottling Co.,                S.W.3d , 50 Tex. Sup. Ct. J. 21 (Tex.
                     October 20, 2006) [03-0737]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

XXX. TRUSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
      A. Capacity to be Sued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
            1. Ray Malooly Trust v. Juhl, 186 S.W.3d 568 (Tex. February 24, 2006) [04-0685]. . 84

XXXI. WORKERS’ COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
      A. General Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
            1. Entergy Gulf States, Inc. v. Summers, 2004 WL 3021178 (Tex. App.—Beaumont 2004),
                    pet. granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0272]. . . . . . . . . . . 84
      B. Payment of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
            1. Sw. Bell Tel. Co. v. Mitchell, 2005 WL 154203 (Tex. App.—San Antonio 2005), pet.
                    granted, 49 Tex. Sup. Ct. J. 360 (February 27, 2006) [05-0171]. . . . . . . . . . . 85




                                                                         xii
Supreme Court Update
January 1, 2006 – December 31, 2006

                                     SUPREME COURT UPDATE
                               ______________________________________

                                               Phil Johnson
                                                  Justice
                                          Supreme Court of Texas


I. SCOPE OF THIS ARTICLE                                   Appeals affirmed, further holding that because the
     This article surveys cases that were decided          cutoff was not a rule, there was no jurisdiction to
by the Supreme Court of Texas from January 1,              hear a declaratory judgment action about whether
2006 through December 31, 2006. Petitions that             the cutoff violated a statute, and that the Hospitals
have been granted but not yet decided are also             were not entitled to a formal hearing on the
included.                                                  excluded claims. The Texas Supreme Court heard
                                                           argument on November 15, 2006.
II. ADMINISTRATIVE LAW
A. Administrative Procedures Act                           B. Civil Service
1. El Paso Hosp. Dist. v. Tex. Health & Human              1. City of Houston v. Jackson, 192 S.W.3d 764
Servs. Comm’n, 161 S.W.3d 587 (Tex.                        (Tex. April 7, 2006) [04-0465].
App.—Austin 2005), pet. granted, 49 Tex. Sup.                    The issue in this case involved the
Ct. J. 782 (June 30, 2006) [05-0372].                      construction of section 143.134(h) of the Texas
       In this administrative law case, a group of         Local Government Code, which imposes a $1,000
hospitals complain that a policy regarding the             penalty payable to an aggrieved fire fighter for
calculation of Medicaid reimbursement rates is a           each day a department head intentionally fails to
rule that the Health and Human Services                    implement a decision of the Fire Fighters’ and
Commission (HHSC) improperly adopted without               Police Officers’ Civil Service Commission under
following the requirements of the Administrative           section 143.131 or a decision of a hearing
Procedures Act. Every three years, HHSC collects           examiner under section 143.129 that has become
a twelve-month period of claims data in order to           final.
calculate Medicaid reimbursement rates. This                     Robert Jackson, an engineer operator with
process employs a data collection cutoff, which            the City of Houston Fire Department, requested a
the Hospitals complain systematically excludes             transfer to Fire Station 70. When his request was
the most complicated and costly cases because              denied, Jackson initiated a grievance procedure
HHSC subjects these claims to an extra rigorous            pursuant to Subchapter G of Chapter 143 of the
review. The Hospitals complain that even if this           Local Government Code. After Jackson’s transfer
cutoff is not considered by the Court to be a rule,        request was denied under the first two steps of the
it is part of the process which the Legislature has        procedure, a grievance examiner recommended
required to be published and described by rule. In         that he receive a transfer to any station, other than
any event, the Hospitals argue that this cutoff            Station 70, that had an opening. Neither Jackson
violates the Medicaid reimbursement statute,               nor the Fire Chief appealed the grievance
which requires HHSC to adopt rules to ensure               examiner’s recommendation to the Commission.
reasonable and adequate compensation for each              After approximately two years, Jackson sued the
hospital. The El Paso Hospital District and other          Fire Chief and the City of Houston, alleging that
hospitals filed this declaratory judgment action.          the city failed to implement the recommendation
       The trial court held that HHSC has the power        and seeking declaratory and mandamus relief as
to select whatever data it deems proper within the         well as statutory penalties under section
12-month period, that this process did not interfere       143.134(h) of the Local Government Code. Based
with any legal right or privilege of the Hospitals,        on the jury’s finding, the trial court entered
and that the Hospitals failed to show the rates            judgment in Jackson’s favor and awarded
were unreasonable or inadequate. The Court of              $477,000 in statutory penalties, attorney’s fees,


                                                       1
Supreme Court Update
January 1, 2006 – December 31, 2006

post-judgment interest, and other expenses. The                  The trial court entered a partial judgment in
court of appeals affirmed the trial court’s                favor of Long, allowing her to return to work
judgment.                                                  without any further testing or re-application. The
     The Supreme Court reversed the judgment of            trial court also granted Thomas’s motion in part,
the court of appeals and dismissed Jackson’s               dismissed Long’s request for mandamus relief, but
statutory penalty claim for want of jurisdiction.          entered an order identifying Long’s remaining
The Supreme Court concluded that section                   claims before the court. Thomas filed an
143.134(h)’s plain language requires a decision of         interlocutory appeal challenging the denial of his
the Commission or of a hearing examiner.                   plea to the jurisdiction. The Fourteenth Court of
Because the grievance examiner’s                           Appeals dismissed the appeal for lack of
recommendation concerning Jackson’s grievance              jurisdiction because the record did not contain an
was neither a Commission decision nor a hearing            order granting or denying a plea to the jurisdiction
examiner decision, any failure to implement the            and because their interpretation of Texas Civil
recommendation was not sanctionable under                  Practice & Remedies Code section 51.014(a) did
section 143.134(h).                                        not allow for the appeal of the denial of a
                                                           summary judgment based on lack of subject
2. Thomas v. Long, 207 S.W.3d 334, (Tex. April             matter jurisdiction.
21, 2006) [03-0204].                                             The Supreme Court reversed the court of
      Jeanne Long was terminated from the Harris           appeals’ judgment and rendered judgment
County Sheriff’s Department. She appealed the              dismissing Long’s claims for lack of jurisdiction.
termination to the Harris County Sheriff’s                 The Court held it had jurisdiction over this
Department Civil Service Commission. The                   interlocutory appeal because there is a conflict
Commission determined Long’s termination was               among the courts of appeals on whether a
not supported by sufficient evidence and ordered           governmental unit’s challenge to subject matter
the Department to reinstate Long with no loss of           jurisdiction is appealable if raised in a motion for
seniority or benefits.                                     summary judgment. While the Court agreed with
      The Department informed Long she would               the court of appeals that the record did not contain
need to complete a physical ability test before            an order explicitly denying a plea to the
returning to work. Long refused, and later filed           jurisdiction, the Court considered Thomas’s
suit in state district court against Harris County         summary judgment motion to have clearly
Sheriff Tommy Thomas seeking a declaration that            challenged the trial court’s subject matter
she was entitled to immediately return to work             jurisdiction. Since Texas Civil Practice &
with no loss of seniority or benefits, without any         Remedies Code section 51.014(a)(8) provides for
tests or re-application procedures, but with back          the interlocutory appeal of a governmental unit’s
pay dating from the Commission’s order. She also           challenge to subject matter jurisdiction regardless
sought a writ of mandamus compelling Thomas to             of procedural vehicle used, Thomas’s challenge to
comply with the Commission’s order and a                   jurisdiction in his motion for summary judgment
temporary restraining order and temporary                  was sufficient. The trial court, by reaching the
injunction allowing her to return to work without          merits of Long’s declaratory judgment claim,
undergoing any testing. Thomas asserted a partial          necessarily denied Thomas’s challenge, giving the
plea in bar arguing the trial court did not have           court of appeals jurisdiction to consider Thomas’s
jurisdiction over Long’s reinstatement claims; the         interlocutory appeal.
trial court, however, never explicitly ruled on this             The Court also held that Long failed to
plea. Long moved for partial summary judgment              exhaust her administrative remedies with the
on the declaratory judgment and mandamus                   Commission before filing suit, and thus the trial
actions, and Thomas filed a cross-motion for               court lacked subject matter jurisdiction. Because
summary judgment on the same causes of action,             the Commission creates rights not available to
arguing the trial court lacked subject matter              employees at common law, the Commission
jurisdiction over those claims.                            obtains exclusive jurisdiction over such matters.
                                                           Long did not return to the Commission to obtain


                                                       2
Supreme Court Update
January 1, 2006 – December 31, 2006

a decision regarding the Department’s                         D. Exhaustion of Administrative Remedies
enforcement of the physical ability test. Thus, the           1. Blue Cross Blue Shield of Tex., v. Duenez, 201
trial court lacked subject matter jurisdiction over           S.W.3d 674, (Tex. August 31, 2006) [05-0521].
her reinstatement claims.                                           The issue in this case is the whether
                                                              Employee Retirement System of Texas (ERS) has
C. Driver’s License Suspension                                exclusive jurisdiction over a claim for attorney’s
1. Tex. Dep’t of Pub. Safety v. Alford,                       fees, thus requiring a claimant to exhaust
     S.W.3d      , 50 Tex. Sup. Ct. J. 188 (Tex.              administrative remedies before a trial court
December 1, 2006) [05-0164].                                  acquires jurisdiction to consider that claim. This
      Gyles Alford was stopped by a police officer            case stems from an automobile accident in which
while driving a non-commercial vehicle. Alford                Ashley Duenez was seriously injured. Blue Cross
admitted he had been drinking and failed three                Blue Shield (BCBS) insured Duenez and initially
field sobriety tests. The officer warned Alford of            certified that her private nursing care was covered.
the consequences of refusing a breath test, as                Later BCBS informed the Duenezes that it would
required by section 724.015 of the Texas                      discontinue coverage. In response, Xavier and
Transportation Code, and Alford refused the                   Irene Duenez, individually and as next friends of
breath test. His commercial driver’s license was              Ashley, sought a declaratory judgment in district
administratively suspended, and because he had a              court to compel BCBS to continue payments. The
previous “alcohol-related enforcement contact,”               trial court issued a temporary injunction. While
the suspension was increased to two years. An                 the suit for permanent relief was pending, the
administrative law judge affirmed, but the trial              Duenezes switched insurance providers and non-
court overturned the suspension. The court of                 suited all of their claims against BCBS except for
appeals affirmed the trial court’s judgment. The              their suit for attorney’s fees under the Declaratory
Supreme Court, without hearing oral argument,                 Judgment Act. See TEX . CIV . PRAC . & REM .
reversed and rendered judgment for the Texas                  CODE § 37.009. The trial court awarded the fees
Department of Public Safety.                                  and the court of appeals affirmed.
      Alford argued that he should have been                        In a per curiam opinion, the Supreme Court
warned that his refusal to perform a breath test              held that ERS had exclusive jurisdiction over the
would result in suspension of his commercial                  dispute because it was a dispute “arising from the
license, that the application of the statute                  plan.” The Duenezes argued that the claim for
governing suspension was ex post facto because                attorney’s fees was not within ERS’s jurisdiction
the longer suspension was based on events prior to            because it did not concern enrollment or payment.
the enactment of the statute, and that there was              The Court disagreed, noting that the Texas
insufficient evidence to sustain the suspension.              Employees Group Benefits Act provides that the
The Supreme Court held that the warnings for                  ERS’s executive director has exclusive authority
commercial drivers required by section 522.103 of             to determine all questions relating to enrollment in
the Transportation Code only apply to drivers                 or payment of a claim arising from ERS group
stopped while driving a commercial vehicle, thus              coverages or benefits. Therefore, the plain
the warning given to Alford was the proper one.               language of the ERS Act makes clear that the
Nor was the increase in his sentence an invalid ex            administrative appeals process is the “exclusive”
post facto application of a statute; it is well settled       means for resolving a claim for payment of ERS-
that a punishment enhancement statute may                     derived benefits. The Court held that the
require enhancement of punishment imposed for                 Duenezes could not circumvent the exhaustion
subsequent violations based on event prior to the             requirement by filing a “coverage determination”
enactment of the statute. Finally, regardless of a            claim under the Declaratory Judgment Act,
mistake in the written findings of the                        because the action involves payment of a claim,
administrative law judge referring to the warning             over which the ERS has exclusive jurisdiction.
statute as 724.000 instead of 724.015, there was
sufficient evidence as a matter of law to support
the suspension.


                                                          3
Supreme Court Update
January 1, 2006 – December 31, 2006

2.      Cameron Appraisal Dist. v. Rourk,                          In 1998, Aetna, an HMO, contracted with the
194 S.W.3d 501 (Tex. June 2, 2006) [04-0359].                Health Care Financing Administration (HCFA),
      In this class-action taxation case, the                who administers Medicare, to provide healthcare
Supreme Court held that litigants cannot bypass a            to M+C enrollees. Aetna delegated administration
statutorily required administrative appeal by                of the plan—including its obligation to pay for
attempting to form a class challenging the legality          covered services rendered to the M+C
and constitutionality of the tax because a class             enrollees—to North America Medical
action cannot be used to alter these statutory pre-          Management (NAMM). Aetna paid NAMM a
requisites to taxpayer recovery. The Cameron                 monthly fee in return for NAMM agreeing to pay
Appraisal District assessed ad valorem taxes                 health care providers, including the hospital
against the owners of 34 travel trailers. After              petitioners in this case, for all covered services
some but not all of the owners filed administrative          rendered to the M+C enrollees. If the services
protests and then timely appeals in the trial court,         rendered in a certain month exceeded the set fee
the trial court dismissed for lack of jurisdiction the       paid to NAMM by Aetna, NAMM was held
claims by those who had not exhausted their                  responsible for the difference. NAMM entered
administrative remedies, granted summary                     into agreements with each hospital, in which
judgment against the remainder because the                   NAMM assumed responsibility for paying for
trailers were taxable as a matter of law, and                services rendered. There are no contracts between
refused to certify a class action. The court of              Aetna and the individual hospitals.
appeals reversed, finding error in all three rulings.              NAMM became insolvent and stopped
      The Supreme Court reversed in part, holding            paying the hospitals for services provided to
that exhaustion of administrative remedies was               Aetna’s M+C enrollees. Aetna refused to
mandatory. The court of appeals erred in                     reimburse the hospitals for the charges NAMM
reversing the trial court’s partial dismissal and in         did not pay. The unpaid services totaled
requiring certification of a class of taxpayers who          approximately $13 million. The hospitals asked
failed to pursue administrative remedies. The                HCFA to intervene in their payment dispute with
Court also noted that the taxpayers “[were]                  Aetna. HCFA took the position that the state
seeking more than a declaration that taxing trailers         judiciary should decide the dispute. When the
is unconstitutional—they [were] seeking to have              hospitals sought a remedy at the Texas
their individual assessments set aside. While the            Department of Insurance, the agency responded
former claim need not be brought administratively,           that the state court system was the proper forum
the latter must.” The Court did agree with the               for relief. The hospitals then filed this suit
court of appeals that “fact issues preclude finding          alleging breach of contract, breach of fiduciary
the remaining taxpayers’ trailers taxable as a               duty, and quantum meruit. The trial court
matter of law” and remanded to the trial court so            dismissed the case upon Aetna’s motion to
that those taxpayers who did pursue the required             dismiss for lack of subject matter jurisdiction,
administrative appeal could press their case.                arguing that the hospitals were required to first
                                                             exhaust Medicare administrative remedies prior to
3. Christus Health Gulf Coast v. Aetna, Inc., 167            bringing suit. The court of appeals affirmed,
S.W.3d 879 (Tex. App.—Houston [14th Dist.]                   holding that because Aetna has a potential
2005), pet. granted, 49 Tex. Sup. Ct. J. 966                 coverage defense to the claims that form the basis
(September 1, 2006) [05-0710].                               of the hospitals’ suit, the coverage disputes must
     The issue in this case is whether the                   be first exhausted through Medicare’s
Medicare Act requires health care providers to               administrative process.
exhaust the Medicare administrative appeals                        The Supreme Court granted the hospital’s
process prior to bringing a claim to compel                  petition for review and heard argument in this
payment for the services from the HMO who                    case on December 6, 2006.
contracted to provide services to Medicare
beneficiaries who enroll in “Medicare+Choice”
(M+C).


                                                         4
Supreme Court Update
January 1, 2006 – December 31, 2006

E. Judicial Review                                         the Legislature’s delegation of authority to
1. City of Houston v. Clark, 194 S.W.3d 314                independent hearing examiners constitutionally
(Tex. June 30, 2006) [04-0930].                            suspect. See Tex. Boll Weevil Eradication
      The issue in this case is whether Chapter 143        Found., Inc. v. Lewellen, 952 S.W.2d 454, 472
of the Local Government Code, known as the Fire            (Tex. 1997). The Supreme Court remanded the
Fighter and Police Officer Civil Service Act,              case to the court of appeals to determine whether
authorizes municipalities to appeal adverse                the City’s appeal in this case fits within the
decisions of independent hearing examiners.                strictures of Section 143.1016(j), i.e., whether the
      Donald Clark, a senior fire alarm dispatcher         independent hearing examiner was without
for the Houston Fire Department, was suspended             jurisdiction or exceeded that jurisdiction or the
for fifteen days without pay for violating basic           order was procured by fraud, collusion or other
dispatch protocols.        At the time Clark’s             unlawful means. TEX . LOC . GOV ’T CODE §
suspension was imposed, Houston Fire Chief                 143.1016(j).
Lester Tyra was himself serving a suspension, so
Clark’s suspension was handed down by an acting            F. Public Utility Commission/Jurisdiction
fire chief. Clark elected to appeal his suspension         1. AT&T Commc’ns of Tex., L.P., v. Sw. Bell
to an independent hearing examiner, as was his             Tel. Co., 186 S.W.3d 517 (Tex. January 27, 2006)
right under the Local Government Code. The                 [03-0789].
independent hearing examiner denied Clark’s                      In this case, the Supreme Court first
appeal on the merits, finding that the fire                considered whether the Public Utility Regulatory
department’s decision to suspend him was                   Act (PURA) authorizes the Public Utility
justified. But the examiner granted Clark’s                Commission (PUC) to reduce switched access
motion to dismiss, concluding that the Local               rates charged by an incumbent local exchange
Government Code empowered only the fire chief              telecommunications carrier that has elected
to temporarily suspend fire department personnel.          incentive regulation under chapter 58 of the Texas
The City appealed the examiner’s decision to the           Utilites Code. The Supreme Court agreed with
trial court, which granted summary judgment in             the court of appeals and the trial court that PURA
favor of Clark. The court of appeals reversed the          does not give the PUC such authority. The Court
trial court’s decision, but on remand summary              then considered whether, even without such
judgment was again granted in Clark’s favor. The           authority, the PUC may conduct hearings on the
City again appealed the summary judgment and               alleged anticompetitive effect of switched access
the court of appeals dismissed the appeal for want         rates, and whether it may include as a party to
of jurisdiction, holding that Section 143.1016(j) of       those hearings an affiliated interexchange carrier.
the Code did not afford the City a right to appeal         The Court concluded that PURA gives the PUC
an independent hearing examiner’s decision.                broader authority to conduct such hearings than
      The Supreme Court reversed the court of              the lower courts allowed. Finally, the Court ruled
appeals’ judgment and remanded the case to that            that the PUC’s jurisdiction under Texas Utilities
court to consider the City’s appeal in this case.          Code section 52.108(3) extends only to
The Supreme Court determined that Section                  allegations of preferential activities, not to
143.1016(j) of the Local Government Code does              allegations of cross-subsidization or a price
afford the City a right of appeal from an                  squeeze. Accordingly, the Court reversed the
independent hearing examiner’s decision. The               judgment of the court of appeals and remanded
Supreme Court explained that the provision’s own           the case to the trial court for rendition of judgment
terms does not limit appeals to any particular party       in accordance with its opinion.
and that its holding in favor of the City’s right to             AT&T Communications of Texas, Inc.
an appeal found support in the historical roots of         (AT&T), a provider of local exchange
the hearing examiner provisions currently codified         telecommunications services and
in the Local Government Code. In addition,                 telecommunications services among and between
interpreting Section 143.1016(j) to foreclose a            local access and transport areas (intraLATA and
municipalities’ appellate rights could well render         interLATA long-distance service, respectively) in


                                                       5
Supreme Court Update
January 1, 2006 – December 31, 2006

competition with SWBT and its sister company                     The Supreme Court rejected AT&T’s cross-
Southwestern Bell Communications Services                  subsidization and price-squeeze allegations,
(SBCS), complained to the PUC that SBCS was                pointing out that since AT&T was itself an
offering intrastate long-distance services to              interexchange carrier, it could bring these
SWBT’s customers below cost. AT&T alleged                  allegations only under section 52.107, entitled
that since it had to pay SWBT above-cost rates for         “Predatory Pricing”, not under section 52.108,
access to SWBT’s extensive local exchange                  entitled “Other Prohibited Practices,” because to
networks throughout the state, SBCS’s “price               allow such allegations under section 52.108 would
squeeze,” which was made possible through cross-           nullify the procedural restrictions imposed by
subsidization with SWBT, was anti-competitive,             section 52.107. Accordingly, the Court ruled that
discriminatory, and prejudicial.                           under section 52.108(3) the PUC has no authority
      The PUC denied SWBT’s and SBCS’s                     to consider allegations of price squeeze or cross-
motions to dismiss, concluding that AT&T’s                 subsidization, but it may consider AT&T’s
complaint was within its jurisdiction and stated a         allegations that SBCS engaged in preferential
claim for which the PUC could grant some form of           activities.
relief under PURA. It then referred the complaint
to the State Office of Administrative Hearings to          2. In re Sw. Bell Tel. Co., 2005 WL 1405777
determine whether SWBT and SBCS had violated               (Tex. App.—Corpus Christi 2005), argument
PURA. SWBT promptly sued the PUC to enjoin                 granted on pet. for writ of mandamus, 49 Tex.
any further proceedings on the theory that they            Sup. Ct. J. 360 (February 7, 2006) [05-0511].
were outside the PUC’s jurisdiction. SBCS                        The principal issues in this case are (1)
intervened on the side of SWBT, and AT&T                   whether the trial court clearly abused its
intervened on the PUC’s side. The trial court              discretion by refusing to abate a tort, DTPA,
denied the temporary injunction request, but on            fraud, and antitrust lawsuit to allow the Public
interlocutory appeal, the court of appeals reversed.       Utility Commission of Texas (PUC) to resolve the
The trial court subsequently granted summary               preliminary issues regarding interconnection
judgment for SWBT and SBCS. The PUC and                    agreements within its exclusive or primary
AT&T appealed and the court of appeals affirmed.           jurisdiction, and (2) whether relator Southwestern
      The Supreme Court concluded that the PUC             Bell Telephone Company (SWBT) lacks an
has no authority to reduce SWBT’s switched                 adequate remedy at law.
access rates because the Legislature intended to                 The real parties in interest are competitive
permit an electing carrier to raise its switched           local exchange carriers (CLECs) who compete for
access rates to a specified level without regard to        customers with relator SWBT, an incumbent local
a PUC determination of the effect on competition.          exchange carrier, by purchasing and reselling
The Court pointed out that while section 58.302(b)         SWBT’s local telephone services. When the
of the Utilities Code specifically references PURA         CLECs place orders to resell service, they may do
provisions authorizing the PUC to ensure fair              so electronically using an SWBT interface, or
competition by ensuring that rates are not                 manually, which requires SWBT employees to
unreasonably preferential, discriminatory, or              enter the orders. In this case, the CLECs sued
prejudicial, section 58.302 (a) does not. The              SWBT in Texas district court for damages on tort,
Court reasoned that it must treat this omission as         negligent misrepresentation, DTPA, and antitrust
intentional. The Court also determined that                theories, alleging that SWBT charged them for
section 58.025(a) of the Utilities Code, which             orders processed electronically as though they
provides that an electing carrier’s rates can never        were processed manually by SWBT employees.
be challenged as unreasonable, proscribes the              SWBT removed the suit to federal court, but the
PUC from considering the reasonableness of                 federal court remanded the case back to state
SWBT’s switched access rates, but the PUC may              district court for lack of a federal question. After
still consider whether the rates result in unfair          the trial court denied its motion to dismiss, SWBT
competition under chapter 60 and may take any              moved (1) for summary judgment based on
action otherwise authorized by PURA.                       previous PUC decisions that SWBT claimed were


                                                       6
Supreme Court Update
January 1, 2006 – December 31, 2006

identical to this case, or (2) alternatively, for           location. The Commission, acting through its
abatement and referral to the PUC, so that the              Executive Director, granted the application
PUC could decide the threshold issues regarding             without notice or a contested case hearing,
the parties’ interconnection agreements.                    concluding that section 11.122(b) of the Water
      The trial court denied SWBT’s motions for             Code precluded a contested case hearing. The
summary judgment and abatement. The court of                City of Uncertain and similarly interested parties
appeals denied SWBT’s petition for writ of                  sued, arguing that a hearing was required. The
mandamus. The Supreme Court heard argument                  trial court granted Uncertain’s motion for
in this case on March 22, 2006.                             summary judgment, and the court of appeals
                                                            affirmed.
3. In re Sw. Bell Tel. Co., 2004 WL 2365194                      The Court held that the Commission
(Tex. App.—Corpus Christi 2004), argument                   erroneously concluded that section 11.122(b)
granted on pet. for writ of mandamus, 49 Tex.               entirely precluded a contested case hearing.
Sup. Ct. J. 1041 (September 25, 2006) [05-0951].            Instead, the Court held, a limited hearing may be
      This case presents the issue of whether the           necessary to allow the Commission to assess an
Public Utility Commission has exclusive                     amendment’s impact on certain limited criteria
jurisdiction over telecommunications utilities.             other than the application’s effect on other water-
      Plaintiffs brought suit against Southwestern          rights holders and the on-stream environment,
Bell Telephone in Hidalgo County, alleging that             including the adequacy of the applicant’s water
SBT overcharged them by including Texas                     conservation plan, the application’s consistency
Universal Fund Surcharges on their telephone                with the state and any approved regional water
bills. Plaintiffs allege the surcharge SBT imposed          plans, and impact on groundwater. The Court
was illegal because SBT chose to participate in an          therefore affirmed the court of appeals’ judgment
incentive regulation scheme, which placed a rate            and remanded the case to the Commission for
cap on the amount it can charge for                         further proceedings consistent with the Court’s
telecommunication services.            TEX . UTIL .         opinion.
CODE § 58.021. SBT filed a plea to the
jurisdiction contending that the Legislature vested         III. ARBITRATION
exclusive jurisdiction over telecommunications              A. Enforcement of Arbitration Agreement
utilities in the PUC, and the district court had no         1. In re D. Wilson Constr., 196 S.W.3d 774 (Tex.
jurisdiction to hear the case. Plaintiffs argue that        June 30, 2006) [05-0326], consolidated with Am.
because SBT chose incentive regulation, the PUC             Standard and the Trane Co. v. Brownsville Indep.
is precluded from inquiring into SBT’s rates and            Sch. Dist., 196 S.W.3d 774, (Tex. June 30, 2006)
thus, lacks jurisdiction to hear this case. The trial       [05-0327].
court denied SBT’s plea to the jurisdiction, and                  The issues in this case were: (1) whether the
the court of appeals affirmed.                              Federal Arbitration Act preempted the Texas
      The Supreme Court granted SBT’s petition              Arbitration Act, thereby depriving the court of
for review and will hear argument on January 24,            appeals of jurisdiction over the interlocutory
2007.                                                       appeal, and (2) whether the agreements to
                                                            arbitrate in the parties’ contracts were ambiguous.
G. Texas Water Code                                         Relators and petitioners are contractors who
1. City of Marshall v. City of Uncertain,                   worked on two schools for the Brownsville
206 S.W.3d 97 (Tex. June 12, 2006) [03-1111].               Independent School District.           The general
      In 2001, the City of Marshall applied to the          conditions of BISD’s contracts with the two
Texas Commission on Environmental Quality for               general contractors, D. Wilson Construction and
an amended water-right permit that would convert            Stotler Construction, incorporate a broad
its original permit from solely municipal use to            arbitration provision. The contracts also contain
municipal and industrial use. The application did           supplementary conditions. Those conditions “add
not request a change in the amount of water                 to” the arbitration provisions a factual dispute
diverted, the diversion rate, or the diversion              clause, stating that any factual dispute is to be


                                                        7
Supreme Court Update
January 1, 2006 – December 31, 2006

resolved by BISD. In another court, students and            program. The summary indicated that the
teachers at BISD sued the contractors for personal          program, which included arbitration, covered
injuries. American Standard and the Trane                   claims for tort, discrimination, harassment,
Company initiated this suit against BISD to                 wrongful termination, and violations of law.
preserve evidence in the personal injury suit.              Peterbilt terminated Harris’s employment in 2003,
BISD counterclaimed for alleged defects and filed           and Harris sued. The trial court denied Peterbilt’s
third-party actions against the contractors. The            motion to compel arbitration under the Federal
contractors moved to compel arbitration. The trial          Arbitration Act.
court denied their motions, finding the contracts                 The Supreme Court held that the six-page
ambiguous. The contractors filed an interlocutory           summary and acknowledgment form constituted
appeal under the Texas Arbitration Act and a                effective notice of Harris’s terms of employment,
petition for writ of mandamus under the Federal             and that Harris commencing his at-will
Arbitration Act. The court of appeals held that the         employment constituted acceptance of the terms
FAA applied because the project involved                    of employment. The Court further held that
interstate commerce. It held that the FAA                   Harris’s claims fall within the scope of the
preempted the TAA and that it thus lacked                   arbitration agreement. Without hearing oral
jurisdiction over the interlocutory appeal. The             argument, the Court conditionally granted the writ
court of appeals denied mandamus relief, holding            of mandamus and directed the trial court to order
that the factual dispute clause creates ambiguity in        that all claims proceed to arbitration.
the contracts.
      The Supreme Court first held that the FAA             3.      In re Dillard Dep’t Stores, Inc.,
only preempts the TAA if state law imposes an               198 S.W.3d 778 (Tex. March 6, 2006) [04-1132].
additional enforceability requirement the FAA                     In this original proceeding, the Supreme
does not require. As the TAA imposed no                     Court issued a per curiam opinion conditionally
additional enforceability requirement in this case,         granting a writ of mandamus to compel arbitration
there is no preemption and both acts apply.                 of a retaliatory discharge claim filed by Dillard’s
Therefore, the court of appeals had jurisdiction            former employee. The Court held that the trial
over the interlocutory appeal. The Court then held          court abused its discretion in (1) finding no
that the factual dispute and arbitration clauses are        agreement to arbitrate, and (2) concluding that,
not ambiguous because they can be reconciled.               even if there were an agreement, it was illusory.
The Court conditionally granted mandamus relief.                  Delia Garcia was a sales associate when
      Justice Brister concurred, writing that parties       Dillard Department Stores adopted an arbitration
appealing rulings on motions to compel arbitration          policy and distributed copies to all employees at
should be able to file one interlocutory appeal             a mandatory meeting. Two years later, Dillard
seeking relief under the FAA and TAA because, if            fired Garcia after she requested workers’
there is preemption, courts of appeals should treat         compensation benefits. Garcia sued for retaliatory
the interlocutory appeal as a mandamus                      discharge, and Dillard moved to compel
proceeding.                                                 arbitration, but the trial court denied the motion
                                                            on two grounds. First, it found no agreement to
2.     In re Dallas Peterbilt, Ltd. L.L.P.,                 arbitrate because Garcia’s affidavit stated that,
196 S.W.3d 161 (Tex. June 16, 2006) [05-0706].              although she received a document briefly
     In this original proceeding, the Supreme               describing the policy, she refused to sign it, and
Court held that the trial court abused its discretion       she never received a copy of the rules governing
by denying a motion to compel arbitration in an             the policy. The Supreme Court concluded that the
employee’s suit for discrimination, retaliation,            evidence in the record compelled a finding that,
defamation, and other torts.                                under In re Halliburton Co., 80 S.W.3d 566, 568
     William Harris signed an acknowledgment                (Tex. 2002), the document Garcia received
form in 1999 when he began work for Dallas                  unequivocally notified her of definite changes in
Peterbilt, indicating that he had received and              the terms of her employment, and by continuing
understood a summary of the dispute resolution              her employment, Garcia accepted the changes as


                                                        8
Supreme Court Update
January 1, 2006 – December 31, 2006

a matter of law. Second, the trial court concluded          B. Enforcement/Non-Signatories
that even if Garcia agreed to arbitrate, the                1.      In re Palm Harbor Homes, Inc.,
agreement was illusory because Dillard retained             195 S.W.3d 672 (Tex. June 9, 2006) [04-0490].
the right to modify its policy at any time. The                   In this case, the Supreme Court held that a
Supreme Court disagreed, concluding that nothing            third-party beneficiary’s right to opt out of an
in the policy expressly reserved to Dillard a right         arbitration agreement did not render the
to modify the terms of arbitration, and by drafting         agreement unconscionable and that the agreement
a new policy during Garcia’s employment, Dillard            was supported by sufficient consideration.
did not unilaterally amend Garcia’s preexisting                   The retailer and purchasers of a
agreement because Dillard did not notify Garcia of          manufactured home signed an arbitration
the modifications.      Accordingly, the Court              agreement under which they were required to
conditionally granted Dillard’s petition for writ of        arbitrate disputes related to the home. The
mandamus.                                                   manufacturer, as a third-party nonsignatory, had
                                                            the right to unilaterally opt out of the agreement
4.      In re Dillard Dep’t Stores, Inc.,                   within twenty days of receiving notice of another
186 S.W.3d 514 (Tex. January 27, 2006) [05-                 party’s intent to arbitrate a dispute. After the
0250].                                                      purchasers filed suit against the retailer and
      In this original proceeding, the Supreme              manufacturer, they filed a motion to compel
Court held that the trial court abused its discretion       arbitration. The trial court denied the motion and
by denying a motion to compel arbitration in a              the court of appeals affirmed.
defamation lawsuit by an employee, whose                          The Supreme Court held that the
employment arbitration agreement covered                    manufacturer was a third-party beneficiary, and as
personal injuries arising from termination.                 such, was not required to give consideration for
      Andrea Martinez was employed with Dillard             the agreement. The Court further held that
and signed an arbitration agreement in which she            considered in light of the rest of the agreement,
acknowledged that she had received and would be             the manufacturer’s opt-out right did not render the
subject to the rules of arbitration contained in the        agreement unconscionable because in some
agreement and that her continued employment                 circumstances a party to an arbitration agreement
constituted acceptance of the provisions. The               may be compelled to arbitrate claims with a
arbitration terms expressly applied to personal             nonparty and because third-party beneficiaries
injuries claims arising from termination. Dillard           generally have the right to disclaim benefits under
terminated Martinez’s employment, and Martinez              a contract.
filed a defamation lawsuit against Dillard, and its               Justice O’Neill filed a concurrence in which
district manager, Grizelda Reeder. Dillard moved            she argued the manufacturer’s opt-out right
to compel arbitration. The trial court denied               rendered the arbitration clause unconscionable as
Dillard’s motion to compel arbitration. The court           to the manufacturer, but that the purchasers were
of appeals denied Dillard’s mandamus petition on            equitably estopped from seeking to avoid
the ground that the defamation claim did not fall           arbitration with the manufacturer because their
within the scope of the arbitration agreement.              claims against the manufacturer relied on the
      The Supreme Court held that the arbitration           terms of the retail contract and raised misconduct
agreement is susceptible to an interpretation that          substantially interdependent with the claims
includes Martinez’s claim of defamation under its           against the retailer.
personal injuries provision. Without hearing oral
argument, the Court conditionally granted the writ          2. Meyer v. WMCO-GP, L.L.C.,           S.W.3d ,
of mandamus and directed the trial court to order           50 Tex. Sup. Ct. J. 264 (Tex. December 22, 2006)
that all claims proceed to arbitration under the            [04-0252].
Federal Arbitration Act.                                          Ford Motor Company exercised its right of
                                                            first refusal to acquire the business of its dealer
                                                            Bullock Motor Company, provided in its
                                                            dealership agreement, and assigned the right to


                                                        9
Supreme Court Update
January 1, 2006 – December 31, 2006

Alton J. Meyer and Meyer Acquisition Corp.                       Justice O’Neill dissented. The dissent
(collectively “Meyer”), preempting Bullock’s                concluded that the arbitration clause was not
agreement to sell to WMCO-GP. WMCO-GP                       intended to cover WMCO’s claims and that
then sued Meyer, Ford, and Bullock for various              neither prong of the Grigson test was satisfied:
claims. Although they had no contract with                  WMCO’s claims relied on the existence of the
WMCO, Ford and Meyer demanded arbitration                   purchase agreement but not its terms and alleged
based on a clause in WMCO’s purchase                        no substantially interdependent misconduct
agreement where WMCO agreed to arbitrate                    between Bullock and Ford or Meyer but only
“controvers[ies] between the parties to this                asserted that Bullock had been compelled by Ford
Agreement involving the construction or                     and Meyer to breach the purchase agreement.
application of any of the terms, covenants, or
conditions of this Agreement.” Ford and Meyer               C. Waiver of Arbitration
argued that because of this clause WMCO was                 1. Perry Homes v. Cull, 173 S.W.3d 565 (Tex.
equitably estopped from refusing to arbitrate. The          App.—Fort Worth 2005), pet. granted, 50 Tex.
trial court refused to compel arbitration, a divided        Sup. Ct. J. 218 (December 18, 2006) [05-0882].
court of appeals affirmed, and the Supreme Court                  This case concerns an alleged waiver of
reversed and remanded the case to the trial court.          arbitration under a contractual arbitration clause.
      The Court determined that equitable estoppel          The case involves a number of issues. The
allows a nonsignatory to a contract containing an           primary issue is whether Cull substantially
arbitration clause to compel arbitration “when the          invoked the judicial process by filing a lawsuit,
signatory to a written agreement containing an              objecting to arbitration, adding claims, pursuing
arbitration clause must rely on the terms of the            discovery, and then requesting arbitration on the
written agreement in asserting its claims against           eve of trial. Also at issue is whether prejudice
the nonsignatory. . . . [that is,] [w]hen each of a         should remain a component of waiver analysis and
signatory’s claims against a nonsignatory makes             what constitutes prejudice in this context.
reference to or presumes the existence of the                     Robert and Jane Cull purchased a new home
written agreement,” as well as when the signatory           from Perry Homes and also purchased a home
“raises allegations of substantially interdependent         warranty from Home Owners Multiple Equity and
and concerted misconduct by both the                        Warranty Underwriters Insurance Company. Due
nonsignatory and one or more of the signatories to          to certain home defects, the Culls sued Perry
the contract.” Grigson v. Creative Artists Agency,          Homes and the warranty companies. The two
L.L.C., 210 F.3d 524, 527 (5th Cir. 2000). The              warranty companies filed a Plea in Abatement
language of the arbitration clause here was not so          requesting arbitration as was required in the
narrow as to preclude the application of equitable          warranty contract. The Culls argued that the
estoppel by a nonsignatory or to exclude                    arbitration clause was unconscionable because it
WMCO’s claims. The Court also noted that                    required arbitration before the American
WMCO’s claims relied squarely on or depended                Arbitration Association, allegedly an expensive
on the existence of the agreement and that WMCO             and biased institution. The trial court never ruled
conceded its damages could not be calculated                on this issue and the litigation continued. After
without reference to the agreement. Finally, the            conducting about a year of discovery, the Culls
Court concluded that WMCO’s claims against                  moved for arbitration. Perry Homes responded in
Meyer and Ford were intertwined with its claims             opposition to the motion, arguing that the Culls
against Bullock since only if WMCO was correct              had waived their right to arbitration. Four days
in its assertion that Ford lost its right of first          before trial, the trial court granted the motion.
refusal could any of its claims against Meyer,              Perry Homes sought mandamus relief, but was
Ford, and Bullock succeed. The Court noted that             denied by both the court of appeals and this Court.
WMCO was trying to have it both ways by                     As a result, the arbitration occurred, and an award
asserting rights provided by the purchase                   was issued in favor of the Culls. Perry Homes
agreement but refusing to honor its agreement to            challenged the arbitration award by filing a
arbitrate disputes over those rights.                       motion to vacate or modify the award, contending


                                                       10
Supreme Court Update
January 1, 2006 – December 31, 2006

that the Culls had waived their right to arbitration         the fee was unconscionable or that Walton
by opposing the warranty companies’ original                 discharged Hoover with good cause, and awarded
motion for arbitration and by pursing the case               the firm $900,000. The court of appeals reversed
within the judicial system.                                  and rendered a take-nothing judgment against
      The trial court confirmed the arbitration              Hoover, concluding that the fee was
award. The court of appeals affirmed, holding                unconscionable as a matter of law.
that the Culls did not waive their right to                        Citing Mandell & Wright v. Thomas, 441
arbitration by their pre-arbitration conduct.                S.W.2d 841, 847 (Tex. 1969), the Supreme Court
      The Supreme Court granted Perry Homes’                 reaffirmed the Texas rule that, if an attorney hired
petition for review and oral argument is scheduled           on a contingent-fee basis is discharged without
for March 20, 2007.                                          cause before the representation is completed, the
                                                             attorney may seek compensation in quantum
IV. ATTORNEYS                                                meruit or in a suit to enforce the contract by
A. Fees                                                      collecting the contingent fee from any damages
1.      Hoover Slovacek L.L.P. v. Walton,                    the client subsequently recovers. The Court gave
206 S.W.3d 557 (Tex. November 3, 2006) [04-                  several reasons why, in exceeding Mandell,
1004].                                                       Hoover’s termination fee provision was contrary
      The Supreme Court granted the petitioner’s             to public policy and unenforceable. First, its
motion for rehearing and denied the respondent’s.            immediate payment requirement allowed the
The Court withdrew its opinion of June 30, 2006              lawyer to collect a contingent interest without
and substituted a new opinion. In this case, the             regard for when and whether the client eventually
Court considered the enforceability of an                    prevailed, violating the rule that a lawyer is
attorney’s termination fee provision. The Court              entitled to receive a contingent fee only when and
held that an attorney hired on a contingent-fee              to the extent the client receives payment. Second,
basis may not include in the fee agreement a                 the fee granted the lawyer a proprietary interest in
provision stating that, in the event the attorney is         the client’s claim, violating Texas Disciplinary
discharged before completing the representation,             Rule of Professional Conduct 1.08. Third, the fee
the client must immediately pay the present value            created a perverse incentive for the lawyer to be
of the attorney’s interest in the client’s claim.            discharged soon after establishing the value of the
      John B. Walton, Jr. hired Hoover Slovacek              client’s claim, thereby avoiding the demands and
L.L.P. to recover unpaid royalties from several oil          consequences of trials and appeals. The Court
and gas companies operating on his ranch.                    distinguished this dynamic from the traditional
Walton agreed to pay Hoover 28.66% of any                    contingent fee, which encourages lawyers to
amounts recovered, and that, if he discharged                obtain the best results possible because they will
Hoover before the representation was completed,              receive no fee whatsoever if the case is lost.
he would immediately pay the firm the present                Finally, the Court noted that Hoover’s termination
value of its contingent fee. Hoover settled a                fee provision failed to explain how the parties
number of Walton’s claims, but was eventually                would measure the present value of the client’s
discharged. Walton alleged that Hoover was                   claim at the time of discharge. This violated the
pressuring him to settle with Bass Enterprises               lawyer’s duty to clearly explain, at the outset of
Production Company, and that Hoover had                      the representation, how the fee would be
damaged his credibility with Bass by making an               calculated and the fee’s implications for the client.
unauthorized and excessive $58.5 million demand.             The Court severed the termination fee provision,
Pursuant to the termination fee provision, Hoover            leaving a contingent fee contract subject to
sent Walton a bill for $1.7 million, asserting that          Mandell. The Court affirmed the court of
his claim against Bass was worth $6 million at the           appeals’ judgment in part, reversed in part, and
time of discharge. Walton later hired Andrews &              remanded to the court of appeals to address
Kurth L.L.P., which settled the Bass claim for               Walton’s challenges to the factual and legal
$900,000. When Hoover sought to enforce the                  sufficiency of the jury finding on the good-cause
termination fee provision, a jury failed to find that        issue.


                                                        11
Supreme Court Update
January 1, 2006 – December 31, 2006

     Justice Hecht, joined by Justice Medina and           a fee. Accordingly, the Court reversed and
Justice Willett, dissented. The dissent argued that        remanded to the court of appeals.
the termination fee provision was not
unconscionable because a competent lawyer could            C. Sanctions
form a reasonable belief that the fee was                  1.     Am. Flood Research, Inc. v. Jones,
reasonable, and that the fee was not contrary to           192 S.W.3d 581 (Tex. May 5, 2006) [05-0271].
public policy because it did not contravene any                  In this case, the Supreme Court held that the
statute or well-established rule of law. The               court of appeals failed to review the entire record
dissent also criticized the Court for voiding the          to determine whether a trial court abused its
termination fee based on hypothesized problems             discretion in imposing sanctions on an attorney.
rather than the facts of this case. It noted that                Attorney Harry Jones was sanctioned for
ascertaining the value of the contingent fee at the        discovery abuse committed while representing a
time of discharge may be impossible, but in this           group of employees in a suit brought by American
case there was no evidence that the fee was ever           Flood Research, Inc. After the employees failed
worth more than $900,000. Accordingly, the                 to appear for court-ordered depositions, American
dissent would enforce the termination fee                  Flood moved for sanctions against both the
provision on this amount.                                  employees and Jones. After an evidentiary
                                                           hearing, the trial court sanctioned Jones only. The
B. Guardian Ad Litem Fees                                  court of appeals reversed the sanctions award,
1.     Land Rover U.K., Ltd. v. Hinojosa,                  holding that the trial court abused its discretion by
     S.W.3d      , 50 Tex. Sup. Ct. J. 236 (Tex.           imposing sanctions on Jones without a prior
December 15, 2006) [04-0794].                              finding that the employees abused the discovery
      The Hirn family was injured, and one son             process.
died, in a rollover accident in their Land Rover                 The Supreme Court reversed, holding that
Discovery.       The Hirns sued the vehicle                there was ample evidence to support sanctions
manufacturer, the parent company of the vehicle            against Jones under Texas Rule of Civil Procedure
manufacturer, and the dealership (collectively             215.2, which allows the trial court to impose
“Land Rover”). The Hirns also sued the tire                sanctions on a party or its attorney for failing to
manufacturer and the tire retailer (collectively           obey a court order compelling discovery. The
“Continental”). The trial court appointed Juan             Court reiterated the two-part inquiry used to
Hinojosa guardian ad litem for the Hirns’                  determine whether sanctions are appropriate and
surviving son. As part of a settlement, Continental        just: (1) the appellate court should ensure that
paid Hinojosa a $45,000 fee. At the hearing                there is a direct relationship between the improper
finalizing the Hirns’ settlement with Land Rover,          conduct and the sanction, and (2) the court must
Hinojosa requested a $100,000 fee. Hinojosa                ensure that less severe sanctions would not have
multiplied the number of hours worked on the case          been sufficient. Because the court of appeals did
by his hourly rate and then added a $25,000                not complete the second part of this analysis, the
premium for work he declined due to his                    Court remanded the case to that court for further
engagement in this case to arrive at his fee. The          proceedings.
trial court entered judgment for Hinojosa and the
court of appeals affirmed.                                 V. CONSTITUTIONAL LAW
      In a per curiam opinion, the Court reversed          A. Commercial Speech
and remanded to the court of appeals to reconsider         1. Pruett v. Harris County Bail Bond Bd.,
the fee.       The Court held the premium                  177 S.W.3d 260 (Tex. App.—Houston [1st Dist.]
unreasonable. The Court also held some of                  2005), pet. granted, 49 Tex. Sup. Ct. J. 966
Hinojosa’s time was not compensable because it             (September 5, 2006) [05-0283].
exceeded the duties of a guardian ad litem. The                 The primary issue in this case is the validity
Court finally suggested that, while not required,          of two rules promulgated by the Harris County
written billing records are helpful in determining         Bail Bond Board that restrict certain types of



                                                      12
Supreme Court Update
January 1, 2006 – December 31, 2006

contacts between bail bondsmen and potential                       Justice Brister authored the majority opinion.
customers.                                                   The Court first held that the jury’s awards
      The Harris County Bail Bond Board                      violated the one-satisfaction rule. That is, there
promulgated Rules 24 and 25 in the late 1990s                can only be one recovery for one injury. The
after receiving complaints from law enforcement              Court, however, rejected Gullo’s argument that
officers and citizens about bail bond solicitation           breach of contract was Chapa’s only viable claim.
practices in the county. Rule 24 prohibits bail              The Court held that the facts were sufficient to
bondsmen from soliciting business from                       support Chapa’s fraud and DTPA claims as well.
individuals with outstanding but unexecuted bail             Accordingly, she was entitled to the most
bonds, and Rule 25 places certain restrictions on            favorable judgment of the three.
solicitation after warrants have been executed.                    The Court also held the court of appeals
Carl Pruett, a bail bondsmen, intentionally                  award of $125,000 in exemplary damages
violated the rules and the Board suspended his               unconstitutional. The Court noted that the
license. Pruett and National American Insurance              constitutionality of exemplary damages is
Company then sued for declaratory and injunctive             adjudged by three guideposts: (1) the nature of the
relief, contending the Board lacked authority to             defendant’s conduct, (2) the ratio between
pass the rules. Pruett also challenged the rules as          exemplary and compensatory damages, and (3) the
unconstitutional restrictions of commercial                  size of civil penalties in comparable cases. The
speech. International Fidelity Insurance Co. and             Court held the 4:1 ratio between exemplary
Allegheny Casualty Co. intervened to support the             damages and compensatory damages “close to the
rules. The trial court granted Pruett and National           line of constitutional impropriety” and
American’s motion for summary judgment and                   unconstitutional when applied to the facts of this
permanently enjoined enforcement of the rules.               case. Accordingly, the Court remanded to the
The court of appeals reversed in part, although it           court of appeals to consider a constitutionally
concluded that at least one portion of Rule 25               permissible remittitur.
unconstitutionally restricted speech.                              Finally, the Court modified the rule that both
      The Supreme Court granted Pruett and                   recoverable and unrecoverable attorney’s fees
National American’s petition for review, as well             may be recovered when they are inextricably
as the Board’s and International Fidelity and                intertwined. To the extent this rule suggested that
Allegheny’s cross petitions, and heard argument              a common set of underlying facts made all claims
on December 6, 2006.                                         arising therefrom “inseparable,” the court held it
                                                             went too far. The Court concluded that it is “only
B. Punitive/Exemplary Damages                                when discrete legal services advance both a
1. Tony Gullo Motors I, L.P. v. Chapa,                       recoverable and unrecoverable claim that they are
    S.W.3d       , 50 Tex. Sup. Ct. J. 278 (Tex.             so intertwined that they need not be segregated.”
December 22, 2006) [04-0961].                                      Justice Johnson filed a concurring opinion
     Nury Chapa bought a vehicle from Tony                   and Justice O’Neill filed a dissent. They both
Gullo Motors for $30,207.38, but the parties                 argued that the court of appeals’ exemplary
disagreed about what model of car was involved.              damages award was not necessarily
Chapa brought suit for breach of contract, fraud             unconstitutional. Justice Johnson would have
and violations of the DTPA. The jury found for               remanded so the court of appeals could more fully
Chapa on all three claims and also found a                   explain its award and Justice O’Neill argued that
difference in value of the two models of $7,213,             the Court should not have intervened given the
mental anguish damages of $21,639, exemplary                 court of appeals’ remittitur. Finally, Justice
damages of $250,000, and attorney’s fees of                  O’Neill would not have addressed the attorney’s
$20,000. The court of appeals affirmed all of the            fees issue, calling it an “advisory opinion.”
jury’s awards but reduced exemplary damages to
$125,000. In the Supreme Court, Gullo raised
several issues challenging the validity of the jury’s
awards.


                                                        13
Supreme Court Update
January 1, 2006 – December 31, 2006

C. Religion Clause                                              acknowledged on joining the congregation.
1. Barr v. City of Sinton, 2005 WL 3117209 (Tex.                Penley immediately resigned as a member.
App.—Corpus Christi 2005), pet. granted, 50 Tex.                Nevertheless, Westbrook and three other church
Sup. Ct. J. 218 (December 18, 2006) [06-0074].                  elders disseminated a letter to the congregation
       In this religious freedom action, Pastor Rick            asking that Penley be shunned because she had
Barr asserts that a city zoning ordinance impedes               “no biblical basis” for her divorce and had
his free exercise of religion. Barr runs the                    “chosen to engage in a biblically inappropriate
Philemon Homes, a nonprofit organization to                     relationship with another man.”
provide men with religious counseling. Barr owns                      Penley sued Westbrook, the elders and the
two houses, which he and the Philemon Homes                     church on a number of theories, all of which the
use for their ministry. These homes are located in              trial court dismissed. The court of appeals
Sinton, directly across from the sponsoring                     affirmed in part, but reversed the dismissal of her
church. Those living in the homes have been                     professional negligence claims against Westbrook.
released on parole and must receive permission                  The court of appeals determined these claims
from the State before taking up residence. The                  involved secular professional counseling and
City of Sinton passed an ordinance which                        neutral rules generally applicable to such conduct.
prohibits locating a correctional or rehabilitation             The Supreme Court granted Westbrook’s petition
facility within 1,000 feet of certain areas,                    for review and heard argument on September 26,
including churches.                                             2006.
       The trial court found that the ordinance did
not substantially burden Barr’s religion, and, even             D. Takings Clause
if it did, a set-off of 1,000 feet constituted the least        1.      City of San Antonio v. Pollock,
restrictive means. The court of appeals affirmed                155 S.W.3d 322 (Tex. App.—San Antonio 2004),
the trial court’s judgment, holding that the trial              pet. granted, 49 Tex. Sup. Ct. J. 567 (May 8,
court entered appropriate findings of fact and                  2006) [04-1118].
conclusions of law and that the city ordinance did                    In this toxic tort case, the Supreme Court will
not substantially burden Barr’s religious beliefs.              examine whether “adequate compensation” under
The Supreme Court granted Barr’s petition for                   the Takings Clause of the Texas Constitution
review and will hear argument on March 22, 2007.                includes personal injury damages.
                                                                      In 1992, Charles and Tracy Pollock moved
2. Westbrook v. Penley, 146 S.W.3d 220 (Tex.                    into a house that abutted a dormant City-owned
App.—Fort Worth 2004), pet. granted, 49 Tex.                    landfill. The Pollocks allege that the City assured
Sup. Ct. J. 509 (April 24, 2006) [04-0838].                     them of the landfill’s safety, even though it knew
      In this Religion Clause case, the question is             that dangerous gases such as benzene were
to what extent pastors can be held liable for                   escaping from the landfill. Sarah Pollock was
providing counseling services under secular                     born in 1994; in 1998, she was diagnosed with
negligence standards.                                           acute lymphoblastic leukemia. Sarah’s doctor
      C.L. Westbrook, Jr., a licensed counselor,                attributed Sarah’s illness to benzene exposure.
provided paid marriage counseling to Peggy Lee                  The Pollocks filed suit in January 2000. At trial,
Penley. Westbrook later became the pastor of a                  the Pollocks’ expert presented evidence that
new church, of which Penley became a member.                    methane-carrying benzene was migrating out of
Penley and her husband attended group marriage                  the landfill, and had done so for many years. He
counseling with Westbrook and other members of                  presented evidence of gas readings throughout the
the church. Outside these sessions, Penley                      Pollocks’ neighborhood, and opined that, based on
confided in Westbrook her intention to seek a                   EPA gas migration models, the gas levels within
divorce and her participation in an extramarital                the Pollocks’ house and yard were similar.
affair.    Westbrook recommended a divorce                      However, there were no readings taken in the
attorney but informed Penley he would share this                Pollocks’ house or yard itself. The only evidence
information with the church pursuant to its                     of benzene in the Pollocks’ house and yard was
disciplinary principles, which Penley had                       testimony of strong smells from the methane.


                                                           14
Supreme Court Update
January 1, 2006 – December 31, 2006

Sarah Pollock’s doctor testified that because of the        of three coastal water filtration systems using
specific chromosomal damage experienced, and                Holland’s oil removal process.             Holland
because he had ruled out heredity and radiation as          performed much of the work personally. Holland
a cause, his opinion was that benzene caused                applied for a patent on this process in 1998, which
Sarah’s leukemia. In support of this opinion, he            was issued in 2000. After the facilities were
presented numerous scientific studies linking               completed, Holland worked with officials at the
benzene with other types of leukemia. The City              General Land Office to present these projects at a
did not object to the sufficiency of this evidence          conference in 1999.
until appeal. The jury found that the City operated              In 2002, Holland began sending letters to the
a nuisance, that the conduct was expressly                  State claiming that the State had infringed on his
authorized by the City, that the City acted with            patent and seeking compensation. The State
malice, and that the negligence of the City caused          referred Holland to its administrative contract
the injury. The Pollocks elected the nuisance               dispute process, which Holland did not pursue.
remedy, and judgment was entered for them for $7            Holland brought this inverse condemnation claim
million in personal injury damages to Sarah,                under Article I, section 17 of the Texas
$6,111,000 for past and future medical expenses,            Constitution. The State filed a plea to the
$10,000 for loss of use and enjoyment of property,          jurisdiction and a general denial. The State
$19,000 for difference in market value, and $10             argued that this was an artfully pleaded contract
million in exemplary damages. The trial court               claim, barred by sovereign immunity. The State
reduced the $6 million in past and future medical           further argued that there was no allegation of an
expenses to $500,000. After review, the court of            intentional act as required in a takings claim and
appeals reversed the award of exemplary damages             that patent infringement is not the taking of
and otherwise affirmed the judgment.                        property. The trial court denied this plea, and the
      The City of San Antonio petitioned the                court of appeals affirmed the denial. The
Supreme Court for review of this case. The City             Supreme Court granted the State’s petition for
argues that the Takings Clause, which prohibits             review and heard argument on September 27,
uncompensated taking or damage of property,                 2006.
does not require compensation for personal injury.
The City also argues that there was not legally             VI. CONTRACTS
sufficient evidence that the City’s failure to cure         A. Assignment
the known gas seepage problems from the landfill            1. State v. Oakley, 181 S.W.3d 855 (Tex.
was an intentional act, which is required to                App.—Austin 2005), pet. granted, 50 Tex. Sup.
recover under the Takings Clause. Lastly, the City          Ct. J. 65 (October 30, 2006) [06-0050],
argues that there was not legally sufficient                consolidated for oral argument with State v.
evidence that benzene from the landfill cause               Oakley, 2006 WL 152108 (Tex. App.—Austin
Sarah Pollock’s leukemia.                                   2006), pet. granted, 50 Tex. Sup. Ct. J. 65
      The Supreme Court granted the City’s                  (October 30, 2006) [06-0172].
petition for review and heard argument on October                This case concerns the effect of an
18, 2006.                                                   assignment on a wrongful-imprisonment claim.
                                                            The question presented is whether a claim for
2. State v. Holland, 161 S.W.3d 227 (Tex.                   compensation for wrongful imprisonment under
App.—Corpus Christi 2005), pet. granted, 49 Tex.            chapter 103 of the Civil Practice and Remedies
Sup. Ct. J. 509 (April 24, 2006) [05-0292].                 Code can be assigned to, and enforced by, a third
      This inverse condemnation case alleging               party.
State patent infringement comes as an                            After the rape and murder of Nancy
interlocutory appeal from denial of the State’s plea        DePriest, Richard Ochoa entered into a plea
to the jurisdiction.                                        agreement, falsely confessing to the crime and
      From 1996 to 1998, the Texas General Land             falsely testifying that Richard Danziger was an
Office contracted with two of Herbert Holland’s             accomplice. Ochoa and Danziger spent twelve
companies to assist in the design and construction          years in prison for a crime, it was later


                                                       15
Supreme Court Update
January 1, 2006 – December 31, 2006

determined, they did not commit. While in prison,            Christine W. Palmer, and Frederick A. Palmer,
Danziger was badly beaten by a fellow prisoner               III., as independent co-executors of the estate of
and as a result, suffered a brain injury that                Frederick A. Palmer, Jr. In January 1988,
rendered him legally incompetent. Danziger is                pursuant to the note, the Bank accelerated its
represented by his guardian, Barbara Oakley.                 maturity, and notified the borrower and the
      Upon being released from prison on grounds             guarantors that the unpaid balance of $768,625
of actual innocence, Ochoa and Oakley each                   and interest would have to be paid by March 30,
brought suit against the City of Austin for its role         1988. Thereafter, a second promissory note in the
in the wrongful conviction. Both suits resulted in           amount of $743,625 was prepared as of March 30,
settlements. Oakley also brought suit against                1988 and executed in renewal of the 1983 note.
Travis County and, separately, against Christopher           On August 9 and 10, 1988, the Palmers signed and
Ochoa for falsely implicating Danziger in the                executed guaranties of the March 30, 1988
crime. Again, both suits settled. As part of the             promissory note. The Bank then restarted the loan
settlement between Oakley and Ochoa, Ochoa                   in its system as of March 30, 1988. The Bank
assigned his right to compensation from the State            eventually brought this action to enforce the
under chapter 103 of the Texas Civil Practice &              Palmers’ guaranties of the second note.
Remedies Code to Danziger. Oakley then brought                      After a bench trial, and after the close of the
two suits against the State, under chapter 103, for          Bank’s case, the trial court granted the Palmers’
the wrongful imprisonment of Ochoa and                       motion for instructed verdict on grounds that the
Danziger. She alleged standing to bring Ochoa’s              guaranty agreements were not supported by
suit based on the assignment of his claim that was           consideration. The court of appeals affirmed the
procured in the settlement.                                  judgment of the trial court, holding that the
      In both causes, the trial court denied the             evidence was legally sufficient to prove: (1) the
State’s plea to the jurisdiction. The State appealed         guaranties were signed well after the promissory
the trial court’s denial of its plea to jurisdiction,        note was signed, thereby requiring a consideration
contending that the statutory waiver of sovereign            distinct from that of the note; (2) no such
immunity in chapter 103 does not extend to an                consideration arose by reason of any agreement
assignee, common-law principles do not allow                 of, or benefit to the Palmers prior to the execution
assignment of chapter 103 claims, and there is no            of the note; and (3) the facts are sufficient to
jurisdiction because the wrongfully convicted                overcome any presumption of such consideration.
person has already received compensation through             The court also held that the evidence was
a settlement with the City of Austin. The court of           factually sufficient to support the trial court’s
appeals affirmed the trial court’s denial of the plea        findings.
to jurisdiction.                                                    The Supreme Court of Texas granted First
      The Supreme Court granted the State’s                  Commerce Bank’s petition for review and heard
petition for review and will hear argument on                argument on November 14, 2006.
February 15, 2007.
                                                             C. Discovery Rule
B. Consideration                                             1. Via Net v. TIG Ins. Co., S.W.3d , 50 Tex.
1.      First Commerce Bank v. Palmer,                       Sup Ct. J. 296 (Tex. December 22, 2006), [05-
165 S.W.3d 366 (Tex. App.—Corpus Christi                     0785].
2004), pet. granted, 49 Tex. Sup. Ct. J. 636 (May                  In this case, the Supreme Court held that the
29, 2006) [05-0686].                                         four-year statute of limitations for breach of a
     The principal issue in this case is whether             promise to provide additional-insured coverage
there is consideration for guaranties signed only            usually accrues at the time of the breach, not at
after the underlying promissory note was                     the time the breach is discovered.
executed. On March 30, 1983, First Commerce                        Safety Lights was assured that it had been
Bank loaned $1 million to J.V.3, Inc. The loan               added as an additional insured under Via Net’s
was evidenced by a promissory note and secured,              commercial general liability insurance policy.
in part, by guaranty agreements signed by                    Via Net’s insurance broker issued a certificate


                                                        16
Supreme Court Update
January 1, 2006 – December 31, 2006

which listed Safety Lights as “holder” and stated           breach of the alimony agreement, intentional
that “holder is added as additional insured re:             infliction of emotional distress, fraud in the
General Liability.” However, the certificate also           inducement, tortious interference, non-payment of
contained a waiver which stated that it was only            child support, and attorney’s fees. The trial court
issued for informational purposes and did not               granted Sudan a partial summary judgment,
confer any rights on the holder.                            disposing of all claims except those relating to
      Subsequently, a Via Net employee sued                 child support and attorney’s fees, which were
Safety Lights. Safety Lights requested a defense            severed and are pending. Mackenzie appealed the
from Via Net’s insurer, but was denied based on             summary judgment, and a divided court of appeals
the waiver language. Safety Lights settled the              reversed the summary judgment and remanded the
employee’s suit and then sued Via Net and its               case for trial, concluding that the trial court had
insurer for breach of contract and                          erred in dismissing Mackenzie’s claims because
misrepresentation. Via Net moved for summary                there was evidence of economic duress.
judgment on the ground that more than four years                  The Supreme Court reversed the court of
had elapsed since Via Net breached the alleged              appeals’ judgment and rendered judgment that
contract, and the trial court granted the motion.           Mackenzie take nothing. Duress can only exist
The court of appeals reversed, holding that the             when threats render persons incapable of
discovery rule could defer accrual until Safety             exercising their free agency and destroy the power
Lights received the insurer’s denial.                       to withhold consent. Furthermore, the compulsion
      The Supreme Court reversed, holding that the          created by duress must be imminent and such as to
discovery rule did not apply to the type of contract        destroy free agency without present means of
at issue in the case. The Court noted that this             protection. Mackenzie was able to consult with
breach of contract was not inherently                       her accountant and an attorney, and actually
undiscoverable. Further, Safety Lights learned of           proposed the amendment which she later attacked.
the breach within a few months after it occurred.           Mackenzie failed to raise a fact issue about
The Court recognized that some breach of contract           whether Sudan’s threat deprived her of a present
claims may be inherently undiscoverable; but such           means of protection or caused her imminent
instances will necessarily be rare because most             restraint. The Court concluded that Mackenzie
breaches should be discoverable within the four-            presented no evidence of economic duress.
year limitations period.
                                                            E. Statute of Frauds
D. Economic Duress                                          1. The Long Trusts v. Griffin,          S.W.3d ,
1. Sudan v. Mackenzie, 199 S.W.3d 291 (Tex.                 50 Tex. Sup. Ct. J. 209 (Tex. December 8, 2006)
April 21, 2006) [04-0921].                                  [04-0825].
      The issue in this case was whether the trial                This case involved disputes over a litigation
court erred in holding that an ex-wife had not              recovery agreement and agreements relating to
presented sufficient evidence to support her                working interests in producing oil wells. The
economic duress claim. Maggie Mackenzie                     Supreme Court partially reversed the court of
married Philip P. Sudan in 1978. The Sudans                 appeals’ judgment and remanded the case to the
divorced in 1993, and Mackenzie was awarded                 trial court to redetermine attorneys fees.
custody of their two children. In lieu of child                   The Long Trusts sued a third party, offering
support, Sudan agreed to pay Mackenzie alimony              to split recovery with the Griffins and others who
until January 1, 2001, to maintain life insurance,          shared in the costs of litigation. The Long Trusts
and to pay off her mortgage. Several years later,           were to bill such investors monthly; any investor
Sudan threatened to quit paying the monthly                 who missed more than one payment would be
alimony.      Mackenzie consulted with her                  dropped from the lawsuit. Billing was sporadic
accountant and an attorney at the law firm where            for three years, but the Griffins timely paid the
she worked and settled her alimony claim for                bills that did come. When the Long Trusts sent a
$30,000.00. Several months later, Mackenzie                 bill for twenty months of accumulated expenses,
sued Sudan for rescission of this settlement,               the Griffins refused to pay the full bill. When the


                                                       17
Supreme Court Update
January 1, 2006 – December 31, 2006

Griffins did not timely pay the next month’s bill,         could assert the Statute of Frauds as a defense to
the Long Trusts notified the Griffins that they            any future wells for which the Griffins, Ogilvie,
would be dropped from the lawsuit. No more                 and Conrad had not yet paid anything. The
payments were made, but when the lawsuit settled,          Supreme Court reversed the court of appeals’
the Griffins demanded their share of the                   judgment to the extent it had enforced the
settlement. The trial court awarded the Griffins a         agreements for any future wells.
share of the settlement, and the court of appeals
affirmed.      The Supreme Court reversed.                 F. Warranties
Assuming that the Long Trusts’ failure to send             1.     Gym-N-I Playgrounds, Inc. v. Snider,
monthly bills was a material breach, the Griffins          158 S.W.3d 78 (Tex. App.—Austin 2005), pet.
could either treat the contract as terminated, thus        granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006)
excusing their own failure to pay for litigation           [05-0197].
costs, or they could sue for enforcement, but they               The question presented in this petition is
could not both cease performance and sue to claim          whether an “as is” clause in a commercial lease
the benefit of the bargain.                                agreement waives the implied warranty of
      Further, the Griffins, the Ogilvies, and             suitability.
Charles Conrad contracted in 1978 and 1982 to                    Ron Snider founded Gym-N-I Playgrounds,
pay the Long Trusts for part of the drilling and           Inc., a playground equipment manufacturing
operating costs in exchange for assignment of              company, and owns the building in New Braunfels
working interests in producing wells. When                 where the business is located. Patrick Finn and
contract disputes arose, the Long Trusts asserted          Bonnie Caddell purchased the company and
that the agreements were unenforceable under the           entered into a lease agreement with Snider for the
Statute of Frauds because the contracts did not            building. The agreement contained an “as is”
specifically identify the property intended to be          clause and expressly disclaimed all implied
covered. The trial court and court of appeals held         warranties. In 2000, a fire destroyed Snider’s
that the property descriptions were sufficient, and        building and its contents. Gym-N-I, through Finn
the court of appeals further held that the Long            and Caddell, sued Snider for negligence, DTPA
Trusts could not avoid enforcement under the               violations, fraud, and breach of the implied
Statute of Frauds because they had knowingly               warranty of suitability, alleging that the building
accepted the benefits of the agreements. The               contained faulty electrical wiring and that Snider
Supreme Court reversed in part, holding that the           failed to install and maintain a fire sprinkler
agreements did not comply with the Statute of              system.      The trial court granted summary
Frauds, and that past performance of the                   judgment for Snider. The court of appeals
agreements did not require any future                      affirmed, concluding that the “as is” clause
performance. The property descriptions in the              negates the causation element in Gym-N-I’s
1978 agreement amounted to no more than a                  claims for negligence, DTPA violations, and
statement of the number of acres each lease was to         fraud, and that the “as is” clause waives the
cover within a certain area. The 1982 agreement            implied warranty of suitability. Gym-N-I argues
was similar, but also contained a reference to             that the court of appeals erred because, under
another contract. That contract, however, also             Davidow v. Inwood N. Prof’l Group–Phase 1, 747
failed to describe the property sufficiently,              S.W.2d 373, 377 (Tex. 1988), the implied
assuming it could serve that purpose; although             warranty of suitability is waived only to the extent
there was an attachment to that contract describing        that the tenant agrees to repair certain defects.
certain leases, the attachment stated that it was                The Supreme Court granted Gym-N-I’s
part of yet another contract. Whether or not the           petition for review and heard argument on
court of appeals was correct in enforcing                  September 27, 2006.
performance with respect to wells already drilled,
the agreements specifically stated that acquisition
of any interest in the past was completely separate
from future transactions, thus the Long Trusts


                                                      18
Supreme Court Update
January 1, 2006 – December 31, 2006

VII. CORPORATIONS                                           agent when he made representations to Kelly that
A. Agency                                                   the loan was a “done deal.”
1. Gaines v. Kelly, 181 S.W.3d 394 (Tex.                          The Supreme Court granted Gaines’s petition
App.—Waco 2005), pet. granted, 49 Tex. Sup. Ct.             for review and heard argument on December 5,
J. 950 (August 28, 2006) [05-1092].                         2006.
      The principal issue in this case is whether
there was any evidence that a real estate advisor           B. Shareholder Liability
was cloaked with apparent authority to negotiate            1. Willis v. Donnelly, 199 S.W.3d 262 (Tex. June
a loan on behalf of a mortgage company.                     2, 2006) [04-0409].
      Roger Kelly enlisted the help of Robert                    The primary issue in this case was whether
Thompson, president of Commercial Realty                    majority shareholders in closely held corporations
Advisors, to obtain financing for the lease and             could be held individually liable to a minority
purchase of a 31-acre tract of land which Kelly             shareholder who entered into a contractual
intended to develop.          Thompson identified           business arrangement with the corporations.
Southwest Guaranty Mortgage Company as a                         Urban Retreat—a Houston day spa formed
possible lender and forwarded necessary loan                through two separate corporate entities by
application documents on the lender’s letterhead            Michael Willis, its majority shareholder who later
to Kelly. Then Thompson sent Kelly a letter                 transferred his shares to his wife Francie
stating that Thompson would “no longer be acting            Willis—hired Dan Donnelly to establish and run
as a mortgage broker in [Kelly’s] loan                      its salon. Donnelly signed an employment
application” and requesting that Kelly deal                 contract, which included various formulas for
directly with Russell Gaines, president of                  receiving compensation in company stock. In
Southwest Guaranty. With the understanding that             1994 Donnelly’s employment ended. Donnelly
Kelly had a present ownership interest in the tract         did not receive any stock and Urban Retreat made
and that it had been platted and partially pre-sold,        no profits. The Willises sued Donnelly to collect
Southwest Guaranty issued a thirty-day loan                 on two promissory notes and Donnelly counter-
commitment contingent on the receipt of a full              claimed seeking damages for breach of his
title report and other financial documentation.             employment contract and breach of fiduciary duty.
The title report revealed that Kelly had no present         The jury awarded Donnelly $1,707,684.30 for
ownership of the tract, and Southwest Guaranty              breach of each claim and awarded Willis
asked Kelly for proof of ownership and pre-                 $26,982.56 for the promissory notes. The court of
selling. When proof was not forthcoming,                    appeals affirmed the breach of fiduciary duty
Southwest Guaranty informed Kelly that it would             claim, finding sufficient support for a
no longer pursue his loan.                                  majority/minority shareholder relationship, and
      Kelly filed suit against Gaines and Southwest         reversed and remanded the breach of contract
Guaranty for breach of contract, fraud, negligence,         claim, holding that the trial court had applied the
conspiracy, and conversion; and against                     wrong measure of damages.
Thompson and Commercial Realty for breach of                     The Supreme Court reversed in part the court
contract, fraud, negligence, and breach of a                of appeals’ judgment and rendered a take-nothing
fiduciary duty.         Both defendants brought             judgment on all of Donnelly’s claims against the
counterclaims. The trial court granted no-                  Willises. The Court held that the Willises could
evidence motions for summary judgment on all                not be held individually liable on the contract
claims for both sides. The court of appeals                 because Donnelly entered into the agreement with
affirmed in part but reversed as to Kelly’s claim           the corporate entities, not Willis in his individual
for fraud and exemplary damages. The court held             capacity, and Donnelly’s ratification theory for
that Kelly had produced more than a scintilla of            holding the Willises liable failed as a matter of
evidence on the issue of fraud since there was still        law. See TEX . BUS . ORGS . CODE § 21.223(a).
a genuine issue of material fact as to whether              The Court declined to determine whether Texas
Thompson was acting as Southwest Guaranty’s                 recognizes a fiduciary duty between majority and
                                                            minority shareholders, noting that Donnelly was


                                                       19
Supreme Court Update
January 1, 2006 – December 31, 2006

not a shareholder at the time of the alleged                applies to claims brought under chapter 2 of the
breaches. The Court concluded that there was                Alcoholic Beverage Code. The Court concluded
therefore no fiduciary relationship between the             that holding the dram shop responsible to injured
Willises and Donnelly at the time of the breaches,          third parties for its own and its intoxicated
thus, Donnelly’s breach of fiduciary duty claim             patron’s liability is consistent with the express
also failed as a matter of law.                             provisions of the proportionate responsibility
                                                            statute. The Court noted that the Legislature had
VIII. DRAM SHOP ACT                                         not expressly excepted dram shop liability from
A. Proportionate Responsibility                             the proportionate responsibility statute as it had
1. F.F.P. Operating Partners L.P. v. Duenez,                with other statutory causes of action. Further, the
     S.W.3d       , 50 Tex. Sup. Ct. J. 102 (Tex.           Court’s decision in Smith v. Sewell, 858 S.W.2d
November 3, 2006) [02-0381].                                350 (Tex. 1993), governs this case. In Sewell, the
       On September 3, 2004, the Court issued a             Court held that the proportionate responsibility
judgment and opinion affirming the judgment of              statute applies to a first party claim by a drunken
the court of appeals. On April 8, 2005, the Court           patron against a dram shop. Thus, the trial court
granted the petitioner’s motion for rehearing. On           abused its discretion by failing to submit the
November 3, 2006, the Court withdrew its opinion            patron’s negligence and proportion of
and judgment of September 3, 2004 and issued a              responsibility to the jury and by severing the
judgment and opinion reversing the judgment of              provider’s claim against the patron from the case.
the court of appeals and remanding the case to the                Chief Justice Jefferson dissented, arguing
trial court. The respondents’ motion for rehearing          that the Dram Shop Act imposes a form of
remains pending before the Court.                           vicarious liability. He concluded the Legislature
       In this case, the Supreme Court determined           did not intend a dram shop to be included in the
(1) the extent to which Texas Civil Practice &              apportionment of liability but instead intended a
Remedies Code chapter 33’s proportionate                    provider to answer in damages for the injury its
responsibility scheme applies to third-party claims         patron’s intoxication inflicts on a third party, even
brought under the Dram Shop Act (Texas                      if the provision of alcohol to a clearly intoxicated
Alcoholic Beverage Code section 2.02) when                  patron is not the proximate cause of the injury.
there is no allegation that the plaintiff was               He would limit Sewell to first-party claims and
negligent and (2) whether the trial court abused its        overrule its holding that the provider is properly
discretion by severing the dram shop’s                      included within those persons who caused the
contribution claim against the drunken driver.              harm.
Several members of a family suffered serious                      Justice O’Neill also dissented. She would
injuries after being hit by a drunken driver. The           hold that when a customer who has been served in
family brought suit under the Dram Shop Act                 violation of the Dram Shop Act injures an
against the convenience store that sold alcohol to          innocent third party, the third party may recover
the intoxicated driver. The convenience store               from the dram shop. However, the intoxicated
brought a contribution claim against the driver.            customer’s percentage of responsibility must be
The trial court severed the contribution claim and          apportioned under chapter 33 to allow the
granted a partial summary judgment to the                   provider to seek reimbursement from the
plaintiffs. The court of appeals affirmed, holding          customer. In her view, however, even though the
that the Dram Shop Act imposes vicarious liability          trial court should have submitted the intoxicated
on the alcohol seller and that the proportionate            patron’s percentage of responsibility to the jury
responsibility act is inapplicable to third-party           for apportionment, its severance order did not
dram shop actions in the absence of any allegation          amount to reversible error.
that the plaintiffs themselves were negligent.
       Justice Wainwright delivered the opinion of
the Court. The Court reversed and remanded the
case to the trial court, holding that the
proportionate responsibility scheme of chapter 33


                                                       20
Supreme Court Update
January 1, 2006 – December 31, 2006

IX. ELECTIONS                                               opportunity that was not included or intended by
A. Candidate Certification                                  the Legislature.
1. In re Angelini, 186 S.W.3d 558 (Tex. February
24, 2006) [06-0088].                                        2. In re Barnett, 207 S.W.3d 326 (Tex. April 21,
      In this election dispute, one candidate               2006) [06-0275].
challenged another candidate’s application and                    In this election dispute, the Dallas County
petition for Place 5 on the Fourth Court of                 Independent School District rejected Reverend
Appeals, alleging multiple defects that could not           Marion Barnett’s application for Place Six on the
be cured before the filing deadline.           The          Dallas ISD ballot because it did not include his
challenged candidate filed his application and              permanent residence address. Barnett wrote his
petition on the day of the deadline by facsimile.           permanent residence address in the adjacent space
The facsimile date and time stamps indicate that            provided for his mailing address. He also
they were transmitted after the 6:00 p.m. deadline.         provided: (1) his full name, (2) his date of birth,
The candidate argued that the facsimile clock had           (3) his occupation, (4) his office and home
not been reset from Daylight Savings Time,                  telephone numbers, (5) his voter registration
making the filings timely. Other disputed facts             number, and (6) a statement under oath that he
included: (1) whether the candidate complied with           had continuously lived in District Six for thirty-
all statutory requirements except apparent facial           three years. Barnett timely submitted this
defects, (2) whether the Democratic Party had               application on the date of the filing deadline.
sufficient time to complete its statutory review            DISD notified Barnett by letter and a subsequent
before the deadline, (3) whether after that review          phone call that it was rejecting the application for
but before the deadline the Party erroneously               failure to include a permanent residence address.
notified the candidate that his filings complied            Barnett submitted a corrected application the
with statutory requirements, and (4) whether the            following day. The Supreme Court held that
candidate could have cured any facial errors                Barnett’s rejected application provided DISD with
before the deadline had the state chair properly            sufficient information to confirm the undisputed
notified him of those defects. The Court held that          fact that Barnett resides in District Six.
the many disputed facts required denial of the              Accordingly, the Court ordered DISD to certify
petition, citing the prohibition against appellate          Barnett as candidate.
courts determining disputed issues of fact in an
original mandamus proceeding.                               3. In re Carlisle, S.W.3d , 49 Tex. Sup. Ct. J.
      Justice Johnson, joined by Justice O’Neill,           262 (Tex. January 17, 2006) [06-0025].
concurred, stating that because factual disputes                  The question presented by this case was
exist, they would not comment on what relief may            whether Anette Carlisle, who was serving on the
be appropriate in the event of future hearings.             board of trustees of the Amarillo Independent
      Justice Wainwright dissented, stating that the        School District, held a “lucrative office” within
candidate’s filings contained several fatal defects         the meaning of Article III, Section 19 of the Texas
and that the candidate’s failure to comply with the         Constitution, making her ineligible to be a
Election Code requirements precluded him from               candidate for election to the Legislature. The
being certified for the ballot. He would hold that          chair of the Texas Republican Party, Tina J.
the factual disputes are immaterial under the               Benkiser, refused to certify Carlisle as a candidate
Election Code because it is undisputed that the             for District 87 of the Texas House of
candidate’s petition failed to comply with the              Representatives on the ground that Carisle held a
Code’s requirements as of the filing deadline.              lucrative office because she received
Justice Wainwright also stated that the errors in           reimbursement for meals on a per diem basis
the candidate’s filings were not technical or minor         while performing duties associated with her
but pervasive and substantial, but the Court’s              position on the board of trustees. Carlisle filed a
rulings in Francis and Holcomb improperly extend            petition for writ of mandamus under Section
the deadline for an opportunity to cure—an                  273.061 of the Texas Election Code, requesting



                                                       21
Supreme Court Update
January 1, 2006 – December 31, 2006

that the Texas Supreme Court direct Benkiser to                have been cured, the trial court must abate the
certify her as a candidate.                                    challenge and allow the candidate the opportunity
      The Supreme Court held that the                          to cure.
reimbursement Carlisle received for meals did not                    Justice Wainwright, joined by Justices
make her position as a member of the Amarillo                  O’Neill and Johnson, dissented. The dissent
ISD school board a lucrative office within the                 stated that the Legislature did not include a cure
meaning of Article III, Section 19 of the Texas                provision in the Election Code and the Court was
Constitution. Because Benkiser had a duty to                   not at liberty to do so. The Election Code is an
certify Carlisle as a candidate, the Court                     intricate statutory scheme including several
conditionally granted the petition for writ of                 deadlines that the Court’s decision threatens to
mandamus and directed Benkiser to take all                     disrupt. The dissent also noted that the obligation
actions necessary under the Texas Election Code                to file a proper application and petition
to certify Carlisle.                                           traditionally rests with the candidate, but that the
                                                               Court’s opinion undercuts that responsibility by
4. In re Francis, 186 S.W.3d 534 (Tex. January                 allowing the candidate to cure a mistake if it was
27, 2006) [06-0040].                                           not timely caught by the party chair.
       In this election dispute, a trial court barred a
candidate for the Texas Court of Criminal Appeals              5. In re Holcomb, 186 S.W.3d 553 (Tex. January
from running because several pages of the                      27, 2006) [06-0042].
candidate’s petition omitted that he was running                     A candidate for the Texas Court of Criminal
for “Place 8” on that court. Republican and                    Appeals filed a petition containing hundreds of
Democratic candidates for statewide judicial                   signatures, nine of which were duplicated. The
office must file their applications and petitions              day after he submitted his application and petition
with the state chair of the party in whose primary             to the state chair, a party representative reviewed
they choose to run. The state chair must review                the application as required by law, accepted it,
the applications and petitions to determine                    and listed him as a candidate on the party’s
whether they comply with statutory requirements                website. Four days later and shortly before the
as soon as practicable, and if the documents do not            filing deadline, his opponent notified party
comply with the statutory requirements, the state              officials of the duplicated signatures. Alerted to
chair must reject the application and immediately              the duplicate and therefore invalid signatures, the
notify the candidate of the reason for rejection. In           party notified the candidate that his application
this case, the Republican Party of Texas reviewed              was defective and that he would not be certified as
the petition and accepted the candidate, but the               a candidate.
trial court later removed his name after his petition                The Supreme Court held that although a
was challenged for failure to include “Place 8.”               petition containing duplicate signatures
       The Supreme Court held that although the                invalidates those signatures, the Election Code
Texas Election Code requires each petition page to             does not mandate that the candidate therefore be
include the place number and that the omission of              punished by exclusion from the ballot. Because
such statutorily required information renders the              the Code did not specify a penalty, the Court
signatures on that petition page invalid, the                  looked to the purposes of the Code, concluding a
Election Code does not mandate that a candidate                candidate is due an opportunity to cure facial
must be declared ineligible when petition                      defects that were overlooked and accepted by the
signatures are invalid. Because the Election Code              party chair before the deadline passed. Here, the
is silent as to the penalty, the Court looked to the           candidate could have remedied the defect in time
statute’s purpose for guidance. One of the                     had the state chair pointed it out.
primary purposes of the Election Code is to                          Justice Wainwright, joined by Justices
provide a safety net for a candidate’s errors. As a            O’Neill and Johnson, dissented. The dissent
result, the Court determined that when a challenge             stated: (1) that the Legislature did not include a
is made based on facial defects that a party chair             cure provision in the Election Code and the Court
overlooked and approved when the errors could                  was not at liberty to do so; and (2) that the


                                                          22
Supreme Court Update
January 1, 2006 – December 31, 2006

obligation to file a proper application and petition        employer agreed to provide training and
should rest with the candidate, not the party chair.        confidential information to the employee, and the
                                                            employee agreed not to reveal the confidential
6. In re Sharp, 186 S.W.3d 556 (Tex. January 24,            information. The agreement also contained a
2006) [06-0061].                                            covenant not to compete.           The employer
      In this companion case to In re Francis 186           proceeded to provide the training and confidential
S.W.3d 534 (Tex. 2006), a candidate for the First           information to the employee. The employee then
Court of Appeals, Place 9, filed his application            quit and went to work for a competitor. The trial
and petition with the Texas Democratic Party but            court granted a summary judgment holding that
failed to notarize the application. When the                the covenant was unenforceable. The court of
candidate filed the application, a party official           appeals affirmed.
reviewed it and assured him that everything was in                The Supreme Court held that the covenant
order. After the deadline to file applications              not to compete was enforceable. The Court,
passed, a party official notified the candidate that        disagreeing with footnote six of Light v. Centel
he would not be certified as a candidate because            Cellular Co., 883 S.W.2d 642, 645 n.6 (Tex.
his application was not properly acknowledged.              1994), held that under the Covenants Not to
      The Supreme Court did not decide whether              Compete Act, Texas Business and Commerce
the candidate’s application complied with the               Code section 15.50, the agreement containing the
Election Code’s requirement that it be “signed and          covenant not to compete need not be enforceable
sworn to,” but assumed without deciding that the            the instant it is made. Instead, if the agreement
application was defective. The Court then held,             becomes an enforceable unilateral contract by
as it did in Francis, that once the party told the          virtue of the employer’s performance of its
candidate that his application was in order, it             promises to provide training and confidential
could not change that decision without giving him           information, the covenant not to compete is
the same opportunity to cure he would have had              enforceable if other requirements of the Act are
before the deadline passed.                                 satisfied. The Act’s requirement that the covenant
      Justice O’Neill concurred in the judgment,            be “ancillary or part of an otherwise enforceable
and Justice Johnson filed a dissenting opinion in           agreement at the time the agreement is made”
which Justice Wainwright joined. The dissent                requires that the covenant be ancillary to or part of
stated that the candidate should have first sought          the agreement at the time the agreement is made,
relief in the court of appeals before appealing to          but does not require that the agreement be
the Supreme Court. When the Supreme Court and               enforceable the instant it is made.
the court of appeals have concurrent jurisdiction,                Chief Justice Jefferson, joined by Justices
a direct appeal to the Supreme Court is proper              O’Neill and Medina, concurred, and read the Act
only for compelling reasons. No compelling                  to require that the employer’s exchange of
reason justified bypassing the court of appeals.            consideration must occur within a reasonable time
The dissent also contended that outstanding                 after the agreement is made. The concurrence
factual issues required the case to first be brought        concluded that this requirement was met.
in trial court, stating that mandamus is                          Justice Wainwright concurred, and would
inappropriate when factual issues exist.                    have reconsidered and rejected requirements in
                                                            Light that (1) the consideration given by the
X. EMPLOYMENT LAW                                           employer for the confidentiality agreement “must
A. Covenants Not to Compete                                 give rise to the employer’s interest in restraining
1. Alex Sheshunoff Mgmt. Servs. v. Johnson,                 the employee from competing,” and (2) the
  S.W.3d , 50 Tex. Sup. Ct. J. 44 (Tex. October             covenant “must be designed to enforce the
20, 2006) [03-1050].                                        employee’s consideration or return promise” not
     In this case the Court held that a covenant not        to disclose confidential information.
to compete was enforceable. An employer and its
at-will employee entered into a written
employment agreement providing that the


                                                       23
Supreme Court Update
January 1, 2006 – December 31, 2006

2. In Re AutoNation, Inc., 186 S.W.3d 576 (Tex.             tracks by utilizing a very large, complex machine.
App.—Houston [14th Dist.] 2005), argument                   Because of the nature of the work, Loram’s
granted on pet. for writ of mandamus, 49 Tex.               employees are constantly on the road, working
Sup. Ct. J. 567 (May 8, 2006) [05-0311].                    twelve-hour shifts. They travel with their
       In this employment case, the Supreme Court           families, staying in motels paid for by Loram.
addresses whether noncompetition covenants                  Roger Tingle worked for Loram and traveled with
governing a Texas resident employed in Texas                his wife. Tingle also used methamphetamine for
must be construed by Texas courts, according to             recreational purposes and to stay awake at work.
Texas law, despite the presence of forum-selection          There was also evidence that Tingle’s supervisor
and choice-of-law clauses calling for a Florida             and co-workers used the drug, and that Tingle’s
venue and Florida law.                                      supervisor had given Tingle time off to purchase
       Garrick Hatfield worked for a Texas                  more of the drug. In the weeks and days leading
subsidiary of AutoNation, Inc., a Florida-based             up to the shooting, Tingle was seen using the drug
automobile dealership.           His employment             at work, and he threatened one of his wife’s
agreements contained noncompete covenants as                friends with a knife. Those incidents were
well as forum-selection and choice-of-law clauses           reported to Loram management. On the day of the
calling for a Florida venue and Florida law. In             incident, Tingle reportedly spoke of attacking his
January 2005, Hatfield resigned with the intention          wife in front of his co-workers before heading
of joining a Texas competitor. AutoNation sued              back to the motel with his co-workers. At the
Hatfield in Florida to enforce the non-compete              motel, Tingle argued with his wife, forced her into
covenants, among other things.             Hatfield         their car, and began to drive out of the motel
subsequently filed an action in Texas seeking a             parking lot. When he threatened his wife with a
declaration that the covenants were unenforceable           gun, she jumped out of the car, screaming for
under Texas law. The Texas trial court retained             help. David Ianni, an El Paso police officer, saw
jurisdiction to construe the covenants and enjoined         the altercation and went to her aid. When Tingle
AutoNation from pursuing the Florida suit. The              got out of his car to pursue his wife, Ianni tried to
court of appeals denied AutoNation’s petition for           intervene. Tingle then shot Ianni, seriously
mandamus, reasoning Texas public policy, as set             injuring him.
forth in DeSantis v. Wackenhut Corp., 793 S.W.2d                  Ianni sued Loram. The jury found that
670 (Tex. 1990), required Texas courts interpret            Loram’s negligence caused Ianni’s injuries, and
noncompete covenants governing Texas                        two Loram supervisors were vice-principals of
employees regardless of forum-selection and                 Loram, making Loram liable for gross negligence
choice-of-law clauses. Further, the court rejected          for the supervisors’ actions. The trial court
AutoNation’s argument that comity prevented the             entered judgment on the jury’s verdict. The court
trial court from entertaining the declaratory action        of appeals affirmed.
despite the previously filed Florida suit. The                    The Supreme Court held that Loram owed no
Supreme Court granted argument on AutoNation’s              duty to Ianni for Tingle’s off-duty conduct
petition for writ of mandamus. The Court heard              because Loram did not exercise control over
argument on October 19, 2006.                               Tingle, its incapacitated, off-duty employee.
                                                            Because the Court held that Loram had no duty to
B. Employer Liability for Employee’s Actions                third parties for Tingle’s acts, it did not reach the
1. Loram Maintenance of Way, Inc. v. Ianni,                 other issues in the case, including an evidentiary
   S.W.3d , 49 Tex. Sup. Ct. J. 874 (Tex. June              issue and Loram’s possible liability for the acts of
30, 2006) [04-0666].                                        Loram supervisors. The Court reversed the court
     In this case, the Supreme Court considered in          of appeals’ judgment against Loram and rendered
what circumstances an employer can be liable to             a take-nothing judgment in Loram’s favor. Justice
the public for the off-duty actions of its employee.        O’Neill, joined by Chief Justice Jefferson,
An employee of Loram Maintenance of Way,                    concurred in the opinion, further admonishing
Roger Tingle, shot and seriously injured David              Loram’s conduct and stating that the opinion
Ianni, a police officer. Loram refurbishes railroad         should not be read as condoning such conduct.


                                                       24
Supreme Court Update
January 1, 2006 – December 31, 2006

C. Employment Contracts                                    lot security officer to escort Ramirez and his
1. Matagorda County Hosp. Dist. v. Burwell,                brother out of the club’s entrance. In the
189 S.W.3d 738 (Tex. February 27, 2006)                    altercation West injured Ramirez, leaving
[03-0111].                                                 Ramirez with multiple injuries, including a
     In this case, the Supreme Court considered            fractured skull. Ramirez sued West and the club
whether a statement in a personnel policy manual           for damages.
that “[e]mployees may be dismissed for cause”                    The Supreme Court reversed the court of
constitutes an agreement that dismissal may be             appeals’ judgment in part, holding that there was
only for cause, thereby modifying the at-will              no evidence of Fifth Club’s control over its
employment relationship.                                   independent contractor, West, and that Texas does
     A former employee brought an action against           not recognize a personal character exception to
the district for breach of an employment contract          the rule that an owner is generally not liable for
and age discrimination. The trial court entered            the tortious acts of independent contractors. The
summary judgment in favor of the district on the           Supreme Court affirmed the court of appeals’
breach of contract claim, and the employee                 judgment as to future mental anguish damages,
appealed. The court of appeals reversed and                finding sufficient evidence to support the jury’s
remanded. On remand, the trial court entered               award. Justice Brister concurred in the opinion,
judgment on the jury’s verdict in favor of the             joined by Chief Justice Jefferson, writing that the
employee on the breach of contract claim, and the          personal character exception should not be
employer appealed.         The court of appeals            adopted because of public policy considerations
affirmed. The Supreme Court held that the                  and the Court’s precedent. Justice Willett
employer’s manual stating that an employee                 dissented in part to the opinion, joined by Justice
“may” be dismissed for cause did not modify                Hecht, Justice Wainwright, and Justice Johnson,
at-will employment by requiring that dismissal be          stating that there was insufficient evidence of
only for cause. Further, the Court held that the           future mental anguish damages because Ramirez
employee’s subjective understanding could not              failed to show future substantial disruption to his
create a contract with her employer. The Court             life due to his injuries.
reversed the court of appeals’ judgment and
rendered judgment in favor of the district.                E. Law Enforcement Officers
                                                           1. VanDevender v. Woods, 175 S.W.3d 545 (Tex.
D. Independent Contractors                                 App.—Beaumont 2005), pet. granted, 49 Tex.
1. Fifth Club, Inc. v. Ramirez, 196 S.W.3d 788             Sup. Ct. J. 950 (August 28, 2006) [05-0956].
(Tex. June 30, 2006) [04-0550].                                 The principal issue presented in this case is
      In this case, the Supreme Court considered in        whether Article III, Section 52e of the Texas
what circumstances an employer can be                      Constitution requires a county to pay the salary of
vicariously liable for the acts of its independent         an injured deputy sheriff beyond the expiration of
contractor, whether a personal character exception         the term-of-office during which the officer was
exists to the general rule of non-liability, and           injured.
whether there was legally sufficient evidence of                James VanDevender was injured while in the
future mental anguish damages. Fifth Club, Inc.            course and scope of his employment as a deputy
operates an Austin nightclub known as Club                 sheriff in Jefferson County. He was unable to
Rodéo. David West, a certified peace officer, was          return to work for approximately four months,
hired as an independent contractor by Fifth Club           during which time he received his full salary, as
to provide security at the nightclub. Late one             mandated under Article III, Section 52e of the
night, Roberto Ramirez arrived at Club Rodéo               Texas Constitution. After his term as deputy
after several hours of drinking. Ramirez and his           sheriff ended, VanDevender was immediately re-
brother tried to enter the club but were denied            deputized to a subsequent three-year term. He
admission by the doorman, allegedly because they           continued to work until, two months later, he left
were intoxicated. The doorman, an employee of              work at his doctor’s behest, allegedly because of
Fifth Club, signaled to West and another parking           the injuries he originally sustained on the job.


                                                      25
Supreme Court Update
January 1, 2006 – December 31, 2006

The county continued to pay VanDevender his full            under the Administrative Procedure Act, for a
salary for almost a year thereafter, but then ceased        substantial evidence review. The court of appeals
doing so.                                                   found that the issue raised by Mrs. Morales was
      VanDevender sought a declaratory judgment             one of coverage, and thus jurisdiction was proper
that Jefferson County was required to pay his full          in Travis County. Accordingly, the court of
salary until the earlier of: (1) his return to work,        appeals affirmed the judgment of the trial court.
or (2) the expiration of his current term as deputy               The Supreme Court granted Mrs. Morales’s
sheriff. The trial court found VanDevender’s                petition for review and heard argument on
entitlement to salary-continuation payments ended           November 16, 2006.
upon the expiration of the term-of-office in which
his injury occurred and entered a take-nothing              2. W. Steel Co. v. Altenburg, 206 S.W.3d 121
judgment in favor of the county. The court of               (Tex. October 27, 2006) [05–0630].
appeals affirmed.                                                 The issue in this case was whether the
      The Supreme Court granted VanDevender’s               evidence was sufficient to support the jury’s
petition for review and heard argument on                   finding that a worker injured at a steel company
December 5, 2006.                                           was not that company’s borrowed employee.
                                                                  Hank Altenburg, a temporary worker hired
F. Texas Workers’ Compensation Act                          by Unique Employment Services, was injured
1.     Morales v. Liberty Mut. Ins. Co.,                    when a steel beam fell on his foot while working
169 S.W.3d 485 (Tex. App.—El Paso 2005), pet.               for Western Steel Company.              Thereafter,
granted, 49 Tex. Sup. Ct. J. 950 (August 28, 2006)          Altenburg received benefits under Unique’s
[05-0754].                                                  workers’ compensation policy and he sued
     The principal issue presented in this case is          Western for his injuries. Western answered and
whether a worker’s employment status under the              filed a motion for summary judgment arguing that
Workers’ Compensation Act is a question                     the Texas Workers’ Compensation Act (TWCA)
“regarding compensability or eligibility for or the         was a bar to Altenburg’s action. Included among
amount of income or death benefits” under Texas             the summary judgment evidence was a copy of
Labor Code section 410.301.                                 Western’s workers’ compensation policy
     Guadalupe Morales died in April, 1995,                 indicating coverage at the time of his injury. The
while repairing the roof of a building foreclosed           trial court denied Western’s motion and the case
on by State National Bank, which is insured by              proceeded to trial.
Continental Casualty Company. In February                         Altenburg subsequently offered into
1997, Morales’ widow filed a notice of fatal injury         evidence the workers’ compensation policies of
and claim for benefits with the Texas Workers’              both Unique and Western. The trial court
Compensation Commission (TWCC), claiming                    admitted the exhibits which were identified as
that Morales had been an employee of State                  their workers’ compensation policies; however,
National Bank, Turnkey Services and PGD, Inc.,              Western’s policy was actually its commercial
none of whom had filed a notice of his death.               general liability policy. Apparently neither the
TWCC denied the claim on the grounds that                   court nor the parties noticed the mistake. The jury
Morales was not an employee entitled to coverage            found Altenburg was not Western’s borrowed
injured in the course and scope of his                      employee and the trial court rendered judgement
employment. Mrs. Morales appealed to an El                  against Western for damages relating to
Paso district court, which granted the insurers’            Altenburg’s injury.
plea to the jurisdiction.                                         Western appealed, challenging the legal and
     On appeal, the court of appeals observed that,         factual sufficiency of the jury’s finding that
under the Labor Code, venue of appeals of TWCC              Altenburg was not Western’s borrowed employee.
decision is based on subject matter. Venue of               Western asserted, in its appellate brief, that it had
appeals involving “compensability or eligibility”           workers’ compensation insurance at the time of
lies in local district courts. Venue of other               Altenburg’s injury, and Altenburg did not dispute
disputes lies in Travis County district courts,             that fact. Despite this assertion, and although


                                                       26
Supreme Court Update
January 1, 2006 – December 31, 2006

Altenburg agreed that Western had workers’                  chief executive officer learned of D’Unger’s
compensation insurance at the time of his injury            activities, he first suspended him and then fired
and attempted to put that policy into evidence, the         him when he refused to resign. D’Unger sued the
court of appeals affirmed, holding that Western             Foundation for breach of contract and wrongful
was not entitled to assert the workers’                     termination, and the chief executive officer for
compensation defense because there was no                   tortious interference. Shortly after he filed suit,
evidence that Western had workers’ compensation             the Border Patrol produced records under the
insurance. The court of appeals did not reach the           Freedom of Information Act showing his concerns
legal and factual sufficiency issues.                       were unfounded because the foreman had safely
      The Supreme Court held that the court of              delivered the teenagers to Border Patrol custody
appeals erred in not accepting the undisputed fact          the day he apprehended them. Nevertheless, a
that Western had workers’ compensation                      jury later found for D’Unger on all his claims, and
insurance at the time of Altenburg’s injury and             the trial court rendered judgment for $364,194.12
thereby not reaching the matter at issue on appeal,         in lost wages and $193,001.00 in attorney’s fees.
regardless of whether the evidence was sufficient           The court of appeals reversed the breach of
to support the jury’s verdict. The Court also held          contract and tortious interference claims, but
that the court of appeals erred by creating an issue        affirmed the judgment for wrongful termination.
of fact where none existed. This was akin to a                    The Supreme Court reversed the court of
court searching for errors the parties had not              appeals’ judgment in part and rendered judgment
raised. Accordingly, the Court reversed the court           that D’Unger take nothing. The Supreme Court
of appeals’ judgment and remanded the case to               held that the court of appeals erred in finding
that court for further proceedings.                         there was some evidence that D’Unger was asked
                                                            to join a criminal conspiracy. Because there was
G. Whistleblower Actions                                    no evidence D’Unger was asked to participate in
1.     Ed Rachal Foundation v. D’Unger,                     any impending criminal acts or that he ever
207 S.W.3d 330 (Tex. April 21, 2006) [03-1101].             intended to do so, and because failing to report a
      Claude D’Unger was an officer and director            crime, like any other failure to act, was not a
of the Ed Rachal Foundation, a charitable                   crime in this instance, there was no evidence to
organization that owns a ranch in Webb County               support D’Unger’s claim for wrongful
used for wildlife and farming research studies.             termination.
The ranch covers more than 100 square miles,
including five miles along the Rio Grande. Due to           2. Montgomery County v. Park, 2005 WL
its location, migrants from Mexico frequently               2667488 (Tex. App.—Waco 2005), pet. granted,
cross the ranch on foot. D’Unger became                     50 Sup. Ct. J. 218 (December 18, 2006) [05-
concerned that the ranch’s foreman was harassing            1023].
migrants, and reported his concerns to the                       Lieutenant Park of the Montgomery County
Foundation’s chief executive officer. According             Sheriff’s Department reported sexual harassment
to D’Unger, the chief executive officer told him            of two female employees by a county
“to drop it,” which he took as an instruction not to        commissioner to the Sheriff and to the county
report the foreman’s activities to any law                  attorney. Thereafter, Park’s duties arranging for
enforcement officials. On September 17, 1997,               off-duty officers to provide security to the county
the foreman apprehended three teenage Mexican               convention center were curtailed at the request of
nationals at the ranch, handcuffed them, and                the commissioner. Park brought suit under the
turned them over to Border Patrol agents. When              Texas Whistleblower Act. See TEX . GOV ’T CODE
D’Unger saw a ranch report of the incident, he              § 554.001. The trial court granted Montgomery
contacted Border Patrol agents, who told him they           County’s motion for summary judgment, but the
had no knowledge or record of the incident.                 court of appeals reversed and remanded. At issue
Concerned that a crime might have been                      in this case is what constitutes an “adverse
committed, D’Unger subsequently contacted                   personnel action” and a “public employee” under
several authorities about the matter. When the              the Texas Whistleblower Act, and whether


                                                       27
Supreme Court Update
January 1, 2006 – December 31, 2006

Lieutenant Park reported in good faith a violation           $65,921 in prejudgment interest. The court of
of law to an appropriate law enforcement agency.             appeals affirmed the judgment. The primary issue
      The Supreme Court granted the County’s                 in the Supreme Court is whether testimony offered
petition for review and will hear oral argument on           by Ledesma satisfied requirements for scientific
March 20, 2007.                                              experts. The Supreme Court granted Ford’s
                                                             petition for review and will hear oral argument on
XI. EVIDENCE                                                 February 14, 2007.
A. Expert Testimony
1. Cooper Tire & Rubber Co. v. Mendez,                       3. Guevara v. Ferrer, 192 S.W.3d 39 (Tex.
204 S.W.3d 797 (Tex. June 16, 2006) [04-1039].               App.—El Paso 2005), pet. granted, 50 Tex. Sup.
      The dispositive issue in this case was                 Ct. J. 65 (October 30, 2006) [05-1100].
whether the evidence was legally sufficient in the                 Noemi Guevara turned left at a green light
face of challenges to the admission of expert                when her car collided with an oncoming car she
testimony. A tire on a minivan lost its tread while          did not see. Arturo Labao, an 86-year-old
the vehicle was proceeding down a highway,                   passenger in the other car, was taken to the
resulting in a rollover and the deaths and serious           hospital, and he died seven months later. Labao’s
injuries of the occupants.            The plaintiffs,        daughter, Corazon Ferrer, sued Guevara, seeking
consisting of injured occupants and estates of               compensation for her deceased father’s injuries.
those who died in the accident, sued Cooper Tire,            The record contained no physicians’ diagnoses,
the manufacturer of the tire. Three experts                  reports, or narratives recorded during the first
cumulatively presented a manufacturing defect                three and a half months after the accident; the
theory that the tire failed because its skim stock           only records from this time are hospital invoices
layer had been contaminated at the Cooper Tire               and the police report. There were three narratives
plant with wax.                                              by physicians as to Labao’s medical condition
      The Supreme Court, applying extant law on              between three and a half and six months after the
the admissibility of expert testimony, held that the         accident, and all three testified for the Plaintiff.
expert testimony was legally insufficient to                 They described Labao’s shortness of breath, that
establish a manufacturing defect that caused the             he had a small tracheotomy wound which was
tire failure. The Court held under previously                expected to heal, and that Labao had sustained
established standards that the testimony did not             multiple orthopedic injuries. More than one
meet the reliability requirement for admissibility           physician noted Labao’s complicated medical
and that one of the experts was not qualified to             history, including:         hypertension, difficulty
testify at all on the subject of tire chemistry.             breathing, a low-grade fever, atrial fibrillation
      The Court also held that in the case of a tire         with rapid ventricular response, a history of end
with 30,000 miles on it, a manufacturing defect              stage renal disease, atherosclerotic heart disease,
could not be established by a process of                     and congestive heart failure. Nothing in the
elimination by the experts, who attempted to rule            record stated the cause of Labao’s death. The
out other causes of the tire failure.                        main issue in this petition is whether courts
                                                             should still follow the holding in Morgan v.
2. Ford Motor Co. v. Ledesma, 173 S.W.3d 78                  Compugraphic Corp., 675 S.W.2d 729, 733 (Tex.
(Tex. App.—Austin 2005), pet. granted, 50 Sup.               1984), which authorizes courts of appeals to find
Ct. J. 65 (October 30, 2006) [05-0895].                      that there is legally sufficient evidence to establish
      Ledesma sued Ford under a products liability           a sequence of events from which the trier of fact
theory following an accident involving his Ford F-           could properly infer causation without the aid of
350. He argued that a defective u-bolt had caused            expert medical testimony.
the leaf-spring assembly to the axle to separate,                  After a jury trial, the trial court granted
thus leading to the accident. Ford argued that               judgment not withstanding the verdict, denying
Ledesma’s negligent driving caused the accident,             Ferrer’s claims against Guevara. The case was
which in turn caused the axle to separate.                   originally appealed to the Houston Court of
Ledesma won a jury verdict for $215,380, plus                Appeals, but the case was transferred by docket


                                                        28
Supreme Court Update
January 1, 2006 – December 31, 2006

equalization order to the El Paso Court of                        Justice Johnson filed a concurring and
Appeals. The court of appeals reversed and                   dissenting opinion, disagreeing only with the
remanded, holding that because Labao was healthy             nature of the proof needed by the obligor to prove
before the car accident, causation could be                  the affirmative defense.
inferred from his injury and medical problems
over the last seven months of his life.                      2. In the Interest of M.C.C., 187 S.W.3d 383
      The Supreme Court granted Guevara’s                    (Tex. January 27, 2006) [04-0787].
petition for review and will hear argument on                     The issue in this case was the interpretation
February 14, 2007.                                           of Texas Family Code section 157.265.
                                                                  Pursuant to a divorce decree, M.C.C.’s father
XII. FAMILY LAW                                              was to make child support payments beginning in
A. Child Support                                             July 1993. The father failed to make some of the
1. In re A.M., 192 S.W.3d 570 (Tex. May 5,                   payments and in November 2001 the Attorney
2006) [03-0509].                                             General filed an enforcement motion seeking
      In this suit to collect past-due child support,        payment of the delinquent child support together
the Supreme Court was asked to decide under                  with the accrued interest. The action later
what circumstances a parent, who has been                    resulted in an order signed May 16, 2002, which
ordered to pay periodic child support, may raise             reduced the unpaid child support to a formal
the affirmative defense contained in Texas Family            judgment. The trial court retroactively applied
Code section 157.008 to a suit to collect that               section 157.265, reducing the interest owed by the
support.                                                     respondent-defendant. The court of appeals
      The statute provides that an obligor parent,           affirmed, holding that the statute applied
who by agreement has possessed a child for                   retroactively under the plain language of the
periods exceeding court-ordered possession, and              statute.
who has provided actual support for the child                     The Supreme Court reversed the court of
during such period, “may request reimbursement               appeals’ judgment, without hearing oral argument,
for that support as a counterclaim or offset against         holding that the language of section 157.265, the
the claim of the obligee [parent].” TEX . FAM .              effective date language of the statute, and the
CODE § 157.008(d). The court of appeals                      child support statutory scheme, considered
concluded that this statute provided the obligor             together, required the prospective application of
both an offset and an affirmative right to                   section 157.265.
reimbursement for periodic child support
payments during a period of excess possession,               B. Grandparent Access
that the obligor did not have to provide an                  1. In re Karen Mays-Hooper, 189 S.W.3d 777
accounting of expenses to receive this relief, and           (Tex. April 7, 2006) [04-1040].
that the Attorney General, as assignee of the                     This case centers around a son born to Karen
obligee parent’s right to enforce the child support          Mays-Hooper and her husband Kelly Hooper in
order, could litigate offsets, but could not defend          1997. The couple divorced in 2000, and Kelly
against an affirmative claim for reimbursement               died in 2003. After Kelly’s death, conflicts arose
from the obligee.                                            between Karen and her mother-in-law, Linda
      In reversing the court of appeals’ judgment,           Thornton, resulting in a suit by the latter for
the Supreme Court held that the statute did not              court-ordered access to the child. See TEX . FAM .
permit the obligor to obtain both an offset and              CODE § 153.432. The trial court rejected Karen’s
affirmative reimbursement for the same periodic              claims that the statute allowing the grandparents
payment, that the Attorney General did have                  access was unconstitutional and awarded her
standing to litigate all aspects of the defense              mother-in-law “possession” of the child for one
provided by this statute, and that under the                 weekend a month, two weeks in the summer, four
circumstances of the case, an itemization of the             days during Christmas vacation, and alternating
obligor’s expenses during excess possession was              Thanksgiving weekends, as well as access through
not necessary.


                                                        29
Supreme Court Update
January 1, 2006 – December 31, 2006

weekly telephone calls. A divided court of                  be abated until the California trial court
appeals denied relief.                                      determines spousal support. Following the filing
      The Supreme Court granted mandamus relief             of the current mandamus petition, the California
and directed the trial court to vacate its order            trial court re-affirmed its jurisdiction over the
granting grandparent possession. The Court found            spousal support issues. Prior to the California
the facts here were virtually the same as in Troxel         court’s reaffirmance, the Texas trial court signed
v. Granville, 530 U.S. 57 (2000), in which the              temporary orders addressing spousal support.
Supreme Court of the United States held                     About a week after, the California trial court
unconstitutional a Washington trial court’s order           issued its own interim child and spousal support
granting a boy’s grandparents visitation rights             order. Thus, dueling inconsistent child support
over the objection of his mother.                           orders are now at issue.
                                                                  The Supreme Court heard argument on
C. Jurisdiction                                             December 6, 2006.
1. In Re Saperstein, 2006 WL 278245 (Tex.
App.—Houston [14th Dist.] 2006), argument                   D. Termination of Parental Rights
granted on pet. for writ of mandamus, 49 Tex.               1. In re H.R.M., S.W.3d , 50 Tex. Sup. Ct. J.
Sup. Ct. 951 (August 28, 2006) [06-0129].                   192 (Tex. December 1, 2006) [06-0270].
      This mandamus proceeding will afford the                   A mother sought to terminate the father’s
Supreme Court an opportunity to interpret Texas             parental rights based on section 161.001(1)(Q) of
Family Code section 159.204, which provides a               the Texas Family Code. Section 161.001(1)(Q)
mechanism for selecting which court has the                 provides for termination of parental rights where
power to grant a family support order when two              the parent has “knowingly engaged in criminal
actions are contemporaneously filed in two                  conduct that has resulted in the parent’s: (i)
different states. Section 159.204 is identical to           conviction of an offense; and (ii) confinement or
section 204 of the Uniform Interstate Family                imprisonment and inability to care for the child
Support Act which has been adopted by all fifty             for not less than two years from the date of filing
states. The proper construction of this provision           the petition.” The Supreme Court held that the
is a question of first impression in Texas and in           court of appeals impermissibly elevated the
the nation as well.                                         burden of proof above the clear and convincing
      This mandamus proceeding arises from a                standard and failed to weigh all of the evidence
complicated divorce case. The husband filed for             when it decided that the jury could not reasonably
divorce in Texas and subsequently the wife filed            have formed a firm belief or conviction that the
in California. The wife then filed a special                father would remain imprisoned or confined for
appearance and a plea in abatement, asking the              two years when the father was concurrently
Texas trial court to wait until after the California        serving seven- and thirteen-year sentences for
trial court determined whether support orders               felonies. Based on the facts of the case, the Court
should issue there. The Texas trial court denied            also held that, as a matter of law, the father’s
the special appearance but abated the Texas action          leaving his child in the non-incarcerated parent’s
until the Texas judge could speak with the                  care did not constitute providing care for the
California judge. The judges agreed that the                child. And, assuming the father had a right to
California trial court would determine child                effective assistance of counsel, the record did not
support issues, and the Texas trial court would             support the father’s ineffective assistance of
determine spousal support issues. However, the              counsel claim because the father did not show
California trial court later reconsidered and               how counsel’s actions prejudiced his case.
reversed itself, concluding that it had jurisdiction
over spousal support as well.                               2. In re Tex. Dept. of Family and Protective
      The wife then filed the current mandamus              Servs., S.W.3d , 50 Tex. Sup. Ct. J. 238 (Tex.
requesting (1) that the Texas trial court’s order           December 15, 2006) [04–1043].
assuming jurisdiction over spousal support be                    In this termination-of-parental-rights case,
vacated; and (2) that the husband’s Texas action            the Court determined whether mandamus relief


                                                       30
Supreme Court Update
January 1, 2006 – December 31, 2006

was proper for a trial court’s failure to dismiss a            mandamus and leave the court of appeals’ order in
suit brought by the Texas Department of Family                 place.
and Protective Services when a final order had not
been rendered before a statutory deadline for entry            XIII. GOVERNMENTAL IMMUNITY
expired. Subsection 263.401(a) of the Texas                    A. Declaratory Judgments
Family Code requires a trial court to dismiss a suit           1. Houston Mun. Employees Pension Sys. v.
affecting the parent-child relationship filed by the           Ferrell, 177 S.W.3d 502 (Tex. App.–Houston [1st
Department if a final order has not been rendered              Dist.] 2005), pet. granted, 49 Tex. Sup. Ct. J.
by the first Monday after the one-year anniversary             1040 (September 25, 2006) [05-0587].
(plus a 180-day extension, if applicable) of the                     This interlocutory appeal concerns whether
date when the trial court appointed the Department             a governmental entity is immune from actions
temporary managing conservator. If the trial court             under the Declaratory Judgments Act.
has not rendered a final order at the expiration of                  Craig E. Ferrell, Jr. was a policeman for the
the time period, the court must dismiss the suit.              City of Houston for thirteen years from
      The statutory deadline in this case was July             1977-1990, during which he participated in the
24, 2004. On July 19 trial began. Three days later,            Houston Police Officers Pension System
before the state rested, the mother and                        (HPOPS). In 1990, he was hired by the Houston
grandmother, who had intervened to request                     Police Department’s Legal Services Division. He
conservatorship of the children, moved to dismiss              subsequently joined the Houston Municipal
for failure to render a final order before the                 Employees Pension System (HMEPS), and ceased
statutory deadline. The trial court did not rule on            participation in his former pension system.
the motions until after the return of the unanimous                  In 1998, HMEPS’ Board of Trustees issued
jury verdict terminating the mother’s parental                 a declaration stating that no credit would accrue to
rights and appointing the Department sole                      an employee’s HMEPS membership for time that
managing conservator. After reading the verdict,               employee “was in a position covered by another
the trial court denied the motions to dismiss. Both            pension system to which the City of Houston
the mother and grandmother petitioned the court                contributes . . . .” Mr. Ferrell petitioned HMEPS
of appeals for mandamus relief. The court of                   to give him pension credit for the thirteen years he
appeals granted relief and ordered the trial court to          served as a police officer and was a member of
dismiss the suit.                                              HPOPS. HMEPS denied Mr. Ferrell’s petition.
      Justice Wainwright delivered the opinion of              In March of 2003, Mr. Ferrell filed this action
the Court. The Court held that the trial court                 against HMEPS initially seeking damages under
abused its discretion by failing to dismiss the suit           a number of theories but eventually modifying the
because there was no rendition of a final order by             pleadings to seek only a declaratory judgment and
the statutory deadline, and the mother’s and                   injunctive relief. HMEPS filed a motion to
grandmother’s motions to dismiss were timely.                  dismiss, asserting that it was immune from a suit
However, the court of appeals’ mandamus relief                 which was, it argued, in essence requesting
was improper because the mother and                            damages in the guise of a declaratory judgment.
grandmother had an adequate remedy by                          The trial court denied HMEPS’ motion and
accelerated appeal. The Court conditionally                    HMEPS filed this interlocutory appeal. The court
granted relief and directed the court of appeals to            of appeals affirmed the trial court’s judgment,
vacate its order to the trial court directing the trial        holding that Mr. Ferrell’s action did not implicate
court to dismiss the case.                                     the doctrine of governmental immunity, since the
      Justice O’Neill dissented, arguing that the              relief sought amounted to a declaration of
court of appeals correctly granted mandamus relief             benefits, not actual damages. The Supreme Court
because the trial court lacked authority to do                 granted HMEPS’ petition for review and will hear
anything but dismiss the Department’s action                   oral argument on January 23, 2007.
under the statute.          Given the potentially
irremediable effect of terminating parental rights
in this case, she would deny the petition for writ of


                                                          31
Supreme Court Update
January 1, 2006 – December 31, 2006

B. Derivative Immunity                                      C. Federal Civil Rights
1. Ben Bolt-Palito Blanco Consol. ISD v. Tex.               1. County of Dallas v. Sempe, 151 S.W.3d 291
Political Subdivisions Prop./Cas. Joint Self-Ins.           (Tex. App.—Dallas 2004), pet. granted, 49 Tex.
Fund,       S.W.3d      , 50 Tex. Sup. Ct. J. 344           Sup. Ct. J. 636 (May 29, 2006) [05-0022].
(December 29, 2006) [05-0340].                                    The principal issue is whether Texas
      The issues in this insurance policy-coverage          counties can be held liable under 28 U.S.C. §
dispute are (1) whether a self-insurance pool               1983 for wrongful death.
authorized by the Texas Legislature possesses                     In 1990, Charles Sempe was arrested for
governmental immunity, (2) whether that pool can            misdemeanor possession of marijuana and placed
assert its immunity against one of its members in           in a Dallas County jail cell. That night, Sempe
a suit to determine coverage, and (3) whether its           was beaten to death by another prisoner in the
immunity has been waived, either expressly or               cell. Sempe’s sons, Christopher and Carl, were
impliedly, by the Texas Legislature or by the               nine and seven years old at the time. In 2000, two
conduct of the self-insurance fund.                         months before Christopher turned twenty, the sons
      Texas       Political       Subdivisions              brought suit for wrongful death and survival
Property/Casualty Joint Self-Insurance Fund                 damages under 28 U.S.C. § 1983, alleging that
(TPS), a self-insurance pool made up of various             Dallas County violated their father’s due process
counties, municipalities, special districts, and            rights by following a policy of deliberate
other political subdivisions, denied a claim for            indifference to dangerous and overcrowded jail
water damage submitted by Ben Bolt-Palito                   conditions. The County filed a plea to the
Blanco ISD, a member school district. TPS                   jurisdiction, arguing that the Sempes could not
denied the claim on the basis that the alleged loss         recover wrongful death damages under § 1983
was not covered under the insurance contract. In            because the federal civil rights statute must
Ben Bolt’s suit for a declaratory judgment seeking          borrow remedies from state law, and the Texas
a determination that the loss was a covered                 Wrongful Death Act expressly excludes counties
occurrence, the trial court denied TPS’s plea to the        from the definition of persons subject to liability.
jurisdiction and motion to dismiss, in which it             TEX . CIV . PRAC . & REM . CODE § 71.001. The trial
claimed immunity from suit. The court of appeals            court denied Dallas County’s plea to the
reversed and rendered judgment dismissing Ben               jurisdiction, and the court of appeals affirmed.
Bolt’s claims for lack of subject matter                    The court of appeals concluded that state law
jurisdiction. The court of appeals held that TPS            immunity is not a defense to liability imposed
possessed immunity because it was a government              under § 1983.
entity, and Ben Bolt failed to show a clear and                   The Supreme Court granted Dallas County’s
unambiguous waiver of TPS’s immunity from suit.             petition for review and heard argument on
      The Supreme Court reversed and remanded               November 15, 2006.
the case to the trial court. The Court held that
TPS possessed governmental immunity discrete                D. Interlocutory Appeals
from that of its members, as evidenced by chapter           1.     Tex. A&M Univ. Sys. v. Koseoglu,
2259 of the Government Code and the Interlocal              167 S.W.3d 374 (Tex. App.—Waco 2005), pet.
Cooperation Act, chapter 791 of the Code. The               granted, 49 Tex. Sup. Ct. J. 642 (May 29, 2006)
Court further held, however, that section 271.152           [05-0321].
of the Local Government Code, a statute enacted                   The principal issue presented in this petition
after the court of appeals issued its decision              is whether a state employee is entitled to
provided a clear and unambiguous waiver of                  interlocutory review when the trial court denies
TPS’s immunity. Justice Willett, joined by Justice          his plea to the jurisdiction asserting sovereign
Hecht, dissented. Justice Willett agreed that TPS           immunity.
had immunity but disagreed that section 271.152                   Dr. Sefa Koseoglu performed research under
clearly waived its immunity.                                contract with the Texas Engineering Experiment
                                                            Station (TEES) of Texas A&M University System
                                                            (TAMU). When Koseoglu was fired by Dr. Mark


                                                       32
Supreme Court Update
January 1, 2006 – December 31, 2006

McLellan, the director of TEES, he considered                 the City, alleging that the water on the roadway
bringing suit for a violation of due process.                 was a special or premise defect that the City was
Koseoglu alleges that he entered into a settlement            liable for under the Texas Tort Claims Act. The
agreement with TAMU, TEES, and McLellan, but                  City filed a plea to the jurisdiction and attached
they breached the agreement. All three defendants             supporting evidence, alleging that sovereign
filed pleas to the jurisdiction, which the trial court        immunity barred the suit. The trial court denied
denied.      The court of appeals dismissed                   the City’s plea to the jurisdiction, and the court of
McLellan’s appeal for want of jurisdiction,                   appeals affirmed. It held that: (1) the emergency
concluding that, because government employees                 exception does not apply, (2) fact issues prohibit
are individuals, not governmental units, McLellan             a finding that the City did not control the road, (3)
was not entitled to interlocutory review. TEX .               fact issues prohibit a finding that the presence of
CIV . PRAC . & REM . CODE § 51.014(a)(8). The                 a barricade or barricades satisfied the City’s duty
court noted that McLellan would have been                     of care, and (4) the discretionary design exception
entitled to interlocutory review if he had asserted           does not apply.
sovereign immunity in a motion for summary                          The Supreme Court heard argument on
judgment. TEX . CIV . PRAC . & REM . CODE §                   March 23, 2006.
51.014(a)(5). The court sustained the pleas to the
jurisdiction filed by TAMU and TEES, but                      F. Recreational Use Statute
remanded to the trial court to afford Koseoglu an             1. State of Texas v. Shumake, 199 S.W.3d 279
opportunity to amend his pleadings.               The         (Tex. June 26, 2006) [04-0460].
petitioners argue that Koseoglu is not entitled to                  This case concerned the effect of the
an opportunity to amend his pleadings because his             recreational use statute on a premises liability
breach of contract claim falls incurably outside              claim against the state. TEX . CIV . PRAC . & REM .
any waiver of sovereign immunity, and that                    CODE §§ 75.001-.004. The Tort Claims Act
McLellan was entitled to interlocutory review                 waives the state’s sovereign immunity for
because a suit against a state employee in his                premises defects or injuries caused by “a
official capacity is a suit against the State. The            condition or use of . . . real property.” TEX . CIV .
Court heard argument on November 14, 2006.                    PRAC . & REM . CODE § 101.021. The State
                                                              contended, however, that the recreational use
E. Premise and Special Defects                                statute’s adoption of the trespasser standard
1.      City of San Antonio v. Hartman,                       effectively reinstated immunity for premises
155 S.W.3d 460 (Tex. App.—San Antonio 2004),                  liability claims arising on state-owned recreational
pet. granted, 49 Tex. Sup. Ct. J. 360 (February 24,           properties. The Supreme Court, Justice Medina
2006) [05-0147].                                              writing, disagreed, concluding that while the
      The issues in this case are: (1) whether the            recreational use statute raised the burden of proof
emergency exception to the Texas Tort Claims                  by classifying the recreational user of state-owned
Act’s waiver of immunity applies, (2) whether the             property as a trespasser and requiring proof of
City of San Antonio owed a duty to the decedents              gross negligence, malicious intent, or bad faith, it
by owning or controlling the subject roadway, (3)             did not reinstate sovereign immunity for all
whether the presence of a barricade or barricades             premises liability claims on state-owned
on the subject roadway preserves the City’s                   recreational lands. Gross negligence under the
immunity, and (4) whether the discretionary                   statute was given its commonly accepted legal
design exception to the Texas Tort Claims Act’s               meaning; i.e., that the landowner be subjectively
waiver of immunity applies.                                   aware of, and consciously indifferent to, an
      Flooding in the City of San Antonio in                  extreme risk of harm. The Court further noted
October 1998 inundated part of Rigsby Avenue.                 that a landowner might assume that the
City and state employees placed a barricade or                recreational user needed no warning to appreciate
barricades on both sides of the flooding. The                 natural dangers, such as a sheer cliff, a rushing
decedents drowned when their vehicle was swept                river or even a concealed rattlesnake, but that a
away by floodwaters on Rigsby. Hartman sued                   landowner could be liable for gross negligence in


                                                         33
Supreme Court Update
January 1, 2006 – December 31, 2006

creating a condition that a recreational user would           reconsideration was denied, with Justice Jennings
not reasonably expect to encounter on the property            dissenting from the denial and agreeing with
in the course of permitted use.                               Justice Keyes that a statutory waiver of the city’s
      Justice Wainwright filed a concurring                   immunity was required.
opinion, noting that the Court had previously                       The Supreme Court granted Galveston’s
applied the common-law gross negligence                       petition for review and heard argument on
standard to the recreational use statute in Tex.              February 16, 2006.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d
217, 224 (Tex. 2004).                                         H. Texas Tort Claims Act
      Justice Brister filed a dissent, concluding that        1. City of Dallas v. Thompson,         S.W.3d ,
the recreational use statute’s adoption of the                50 Tex. Sup. Ct. J. 189 (Tex. December 1, 2006)
trespasser standard was intended to bar premise               [05-0787].
liability claims.                                                   Margaret Thompson sued the City of Dallas
                                                              under the Texas Tort Claims Act for injuries she
G. Suits by the State                                         suffered after tripping on a metal coverplate
1. City of Galveston v. State, 175 S.W.3d 1 (Tex.             protruding from the floor in the lobby of Dallas
App.—Houston [1st Dist.] 2004), pet. granted, 49              Love Field airport. The City is immune from the
Tex. Sup. Ct. J. 254 (January 23, 2006) [04-0890].            suit unless there is evidence it had actual
      The issue in this case is whether a city may            knowledge of an unreasonably dangerous
assert governmental immunity from suit or                     condition. The trial court held there was no such
liability in a tort action where the plaintiff is the         evidence and sustained the City’s plea to the
State. In 2001, a water line owned by the City of             jurisdiction, but the court of appeals reversed.
Galveston ruptured near a highway, allegedly                  The Supreme Court, without hearing oral
washing out the roadbed and displacing material               argument, reversed the court of appeals’
supporting the highway. The State alleged that                judgment.
Galveston breached its duty to prevent erosion of                   The Court held that the fact that the
the subjacent support of the surface by its                   coverplate could become loose and protrude over
negligent installation, maintenance, and upkeep of            time did not make the coverplate itself
the water line. The State sought recovery of its              unreasonably dangerous, and the city’s knowledge
costs incurred in repairing the highway, interest,            of this periodic deterioration was not relevant,
and attorney’s fees.                                          only its knowledge of the condition at the time
      The trial court granted Galveston’s                     Thompson tripped. Reports of tripping in that
immunity-based plea to the jurisdiction and,                  same spot that were at least three years old were
alternatively, its motion for summary judgment,               too remote to show actual knowledge at the time
which contended that the city had immunity from               of the accident. Nor was evidence of the
suit and liability because operating the water line           proximity of city employees sufficient to show
was a governmental function and the State’s claim             knowledge absent evidence showing how long the
did not fall within the Texas Tort Claim Act’s                condition, which could have occurred either
limited waiver of immunity. The court of appeals              suddenly or over time, had existed. Finally, the
reversed. The court of appeals concluded that a               fact that the City later added an additional screw
municipality, even a home-rule one such as                    to the coverplate was not sufficient to show the
Galveston, does not enjoy governmental immunity               City knew at the time of the accident that the
from the State’s suit for negligence against it. The          coverplate was unreasonably dangerous.
court of appeals reasoned that any immunity a city
enjoys is derived from the State’s own immunity               2. City of Grapevine v. Sipes, 195 S.W.3d 689
and logically cannot be asserted back against the             (Tex. June 16, 2006) [04-0933].
State. Justice Keyes dissented, concluding that a                 In this case, the Supreme Court held that the
city’s immunity exists against all suits, including           word “absence” in section 101.060(a)(2) of the
those by the State, unless waived by the Texas                Texas Civil Practice and Remedies Code did not
Constitution or by statute.              En banc


                                                         34
Supreme Court Update
January 1, 2006 – December 31, 2006

apply to a governmental unit’s initial installation           3. Mission Consol. Indep. Sch. Dist. v. Garcia,
of a traffic device.                                          166 S.W.3d 902 (Tex. App.—Corpus Christi
      Amy Sipes and her passenger were injured                2005), pet. granted, 50 Tex. Sup. Ct. J. 151
when her vehicle was struck by a truck in a                   (December 4, 2006) [05-0734], consolidated for
construction zone. Sipes sued the City of                     oral argument with Mission Consol. Indep. Sch.
Grapevine, among others, arguing that the absence             Dist. v. Sotuyo,166 S.W.3d 902 (Tex.
of a traffic light, as well as obstructions caused by         App.—Corpus Christi 2005), pet. granted, 50
other traffic devices, caused the accident. The               Tex. Sup. Ct. J. 151 (December 4, 2006) [05-
trial court granted the City’s motion for summary             0762], consolidated for oral argument with
judgment and severed the claims against the City              Mission Consol. Indep. Sch. Dist. v. Medina, 166
from the underlying suit. On appeal, the court of             S.W.3d 902 (Tex. App.—Corpus Christi 2005),
appeals examined section 101.060(a)(2) of the                 pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4,
Texas Tort Claims Act, which waives a                         2006) [05-0763].
governmental unit’s sovereign immunity for                          These three related petitions arise out of the
claims arising from the “absence, condition, or               alleged wrongful termination of three teachers
malfunction” of a road sign, signal, or warning               from MCISD. The teachers filed separate suits
device, if the governmental unit had notice of the            against MCISD and H.F. Dyer, the
problem and failed to correct it within a                     Superindendent, alleging wrongful termination
reasonable time. The court of appeals held that               under the Texas Labor Code, defamation,
once a governmental unit makes the discretionary              intentional infliction of emotional distress, and
decision to install a traffic device, it must do so           fraud. MCISD filed a plea to the jurisdiction in
within a reasonable time or its immunity from suit            each suit based on the Texas Tort Claims Act,
is waived. The court concluded that questions of              specifically section 101.106 of the Texas Civil
material fact existed as to whether the City failed           Practices and Remedies Code. Section 101.106
to install the traffic light within a reasonable time,        bars certain claims against some potential
and accordingly, it remanded the case to the trial            defendants in cases involving governmental
court for further proceedings. The court of                   entities and their employees. The trial court
appeals affirmed the remainder of the trial court’s           denied MCISD’s plea to the jurisdiction and the
judgment.                                                     court of appeals consolidated the three cases and
      The Supreme Court reversed the court of                 affirmed the trial court’s order.
appeals’ judgment in part, holding that the use of                  The issue before the Supreme Court is
the word “absence” in section 101.060(a)(2) did               whether and to what extent section 101.106
not apply to the City’s discretionary decisions of            applies to these cases. The Court granted the
whether and when to initially install a traffic               petitions for review and will hear oral argument
device. Because 101.060(a)(2) could not serve to              on February 15, 2007.
waive the City’s immunity, the Court dismissed
the case for lack of subject-matter jurisdiction.             4. Stephen F. Austin Univ. v. Flynn, 2004 WL
                                                              948885 (Tex. App.—Tyler 2004), pet. granted, 49
                                                              Tex. Sup. Ct. J. 782 (June 30, 2006) [04-0515].
                                                                   This case concerns application of the Torts
                                                              Claims Act and the recreational use statute. Flynn
                                                              was injured when a stream of water from an
                                                              oscillating sprinkler struck her in the head,
                                                              knocking her off a bicycle, and injuring her. The
                                                              sprinkler was on Stephen F. Austin University’s
                                                              campus, but Flynn was allegedly riding on an
                                                              easement granted to the City of Nacogdoches.
                                                              Prior to the accident, the sprinkler was in ground
                                                              and apparently surprised Flynn when it came on.
                                                              Flynn sued SFA, alleging claims of negligent


                                                         35
Supreme Court Update
January 1, 2006 – December 31, 2006

activity and premises defects. The Tort Claims                      suit by intervening in a lawsuit to assert claims for
Act provides a limited waiver of the state’s                        affirmative relief. The court of appeals held that
immunity from suit for certain tort claims,                         the City of Dallas did not waive its right to
including claims of injury or death from premises                   governmental immunity by asserting its right to
defects, and the recreational use statute adds                      sue. On April 2, 2004, the Supreme Court issued
additional qualifications when the injury or death                  a per curiam opinion reversing the court of
occurs on state-owned land being used for                           appeals’ judgment. The Court withdrew that
recreational purposes.                                              opinion and granted rehearing. On rehearing, the
        SFA filed a plea to the jurisdiction, asserting             Court noted that “there is tension between the
sovereign immunity and urging that the                              concept of a governmental entity waiving its
recreational use statute foreclosed Flynn’s claim                   immunity from suit by some action independent
for premises defects. SFA further claimed that                      from the Legislature’s waiving immunity and the
even if the recreational use statute did not apply,                 principle that only the Legislature can waive
SFA retained its immunity because the actions                       sovereign immunity” and that there “is also
forming the basis of Flynn’s suit were                              tension between the concept of a governmental
discretionary.                                                      entity waiving its immunity from suit and the
        The trial court denied the plea to the                      principle that a court’s lack of subject-matter
jurisdiction, concluding that although SFA’s                        jurisdiction generally cannot be waived.”
watering of its grounds was a discretionary                         However, the Court noted that “[r]ecognizing that
function, its placement and operation of the                        sovereign immunity is a common-law doctrine, we
s p r i n kl e r s y s t e m c o n s t i t ut e d po l i c y        have not foreclosed the possibility that the
implementation for which immunity had been                          judiciary may modify or abrogate such immunity
waived. The Tyler court of appeals affirmed,                        by modifying the common law.” The Court
agreeing that the state had waived immunity for                     concluded that “a determination that a
the design and operation of an irrigation system                    governmental entity’s immunity from suit does
under the Torts Claims Act and that the                             not extend to a situation where the entity has filed
recreational use statute did not apply because SFA                  suit is consistent with the policy issues involved
did not control the easement on which Flynn was                     with immunity,” as “it would be fundamentally
riding her bicycle when she was injured.                            unfair to allow a governmental entity to assert
        The Supreme Court granted the petition to                   affirmative claims against a party while claiming
consider: (1) whether the recreational use statute                  it had immunity as to the party’s claims against
applies when a condition on the state’s land                        it.” The Court therefore held that the City lacked
injures a person crossing that land on a public                     immunity from Reata’s claims that are germane
easement; (2) whether Flynn’s claim was properly                    to, connected to, and properly defensive to claims
limited to premises defect, instead of negligent                    asserted by the City, to the extent any recovery on
activity, since Flynn’s claim related to the force,                 those claims will offset any recovery by the City
timing, and direction of the sprinkler’s spray; and                 from Reata. The Court reversed the court of
(3) whether SFA’s immunity for discretionary acts                   appeals’ judgment and remanded the case to the
under the Tort Claims Act is governed by the                        trial court.
governmental-versus-proprietary distinction                               Justice Brister filed a concurring opinion.
traditionally applied to municipalities, and if so,                 He agreed that the City lacked immunity from
whether causing a sprinkler to spray across a                       claims germane to, connected to, and properly
public path is a discretionary act. The Court heard                 defensive to the City’s claim. However, he wrote
argument on October 19, 2006.                                       separately to express disagreement with the idea
                                                                    “that we must partially abrogate sovereign
I. Waiver                                                           immunity because the rule is in ‘tension’ with
1. Reata Constr. Corp. v. City of Dallas,                           other jurisdictional rules.” He would hold that
197 S.W.3d 371 (Tex. June 30, 2006) [02-1031].                      “sovereign immunity has always had its own set
     The issue in this case was whether a                           of jurisdictional rules.”
municipality waives governmental immunity from


                                                               36
Supreme Court Update
January 1, 2006 – December 31, 2006

2. Tooke v. City of Mexia, 197 S.W.3d 325 (Tex.              history of the 2005 enactment of H.B. 2039
June 30, 2006) [03-0878].                                    supports this conclusion.
      This decision overruled Missouri Pacific                    Justice Johnson filed an opinion concurring
Railroad Co. v. Brownsville Navigation District,             in part and dissenting in part. He would hold that
453 S.W.2d 812, 813 (Tex. 1970), insofar as that             the “plain and common meaning of the phrase
case holds that statutory language providing that            ‘plead and be impleaded’ does not reflect clear
a governmental entity may “sue and be sued”                  and unambiguous legislative intent to waive
would, by itself, always waive immunity from suit.           governmental immunity from suit,” but that the
The Court, noting that scores of Texas statutes, as          phrase “sue and be sued” does. He would
well as municipal charters and ordinances,                   therefore hold that the Court should not overrule
provide that various public entities may “sue and            Missouri Pacific Railroad Co. v. Brownsville
be sued,” “(im)plead and (or) be impleaded”, “be             Navigation District, 453 S.W.2d 812 (Tex. 1970).
impleaded”, “prosecute and defend”, “defend or                    The Court also issued several per curiam
be defended”, “answer and be answered”,                      opinions applying the holding in Tooke:
“complain and (or) defend” in court, concludes               Sattrfield & Pontikes Constr., Inc. v. Irving Indep.
that these phrases, in and of themselves, are not a          Sch. Dist., 197 S.W.3d 390, (Tex. June 30, 2006)
sufficiently clear and unambiguous waiver of                 [04-0175].
immunity. The import of these words cannot be                City of Houston v. Clear Channel Outdoor,
ascertained without the context in which they                Inc., 197 S.W.3d 386, (Tex. June 30, 2006)
appear. Read in context, sometimes these phrases             [04-0406].
waive immunity from suit, but, sometimes, they               M c M a h o n C o nt r . , L.P. v. City o f
concern only an entity’s capacity, or the manner in          Carrollton, 197 S.W.3d 387, (Tex. June 30, 2006)
which suit can be had.                                       [04-0622].
      This holding, however, is not sufficient to            City of Houston v. Allco, Inc., 206 S.W.3d 113,
dispose of this case, since the Legislature, during          (Tex. June 30, 2006) [04-0730].
the pendency of the case enacted a partially                 City of Houston v. Jones, 197 S.W.3d 391, (Tex.
retroactive, but limited, waiver of immunity from            June 30, 2006) [04-0879].
suit for contract claims, applicable to this and             City of Houston v. Boyer, Inc., 197 S.W.3d 393,
other local governmental entities. See Act of May            (Tex. June 30, 2006) [04-1021].
23, 2005, 79th Leg., R.S., ch. 604, § 1, 2005 Tex.           PKG Contr., Inc. v. City of
Gen. Laws 1548 (codified at TEX . LOC . GOV ’T               Mesquite, 197 S.W.3d 388, (Tex. June 30, 2006)
CODE §§ 271.151-.160) (“H.B. 2039”). The Court               [04-1139].
concludes that, although the Act’s retroactive               Columbus Indep. Sch. Dist. v. Five Oaks
scope would include the Tookes’ contract claims,             Achievement Ctr., 197 S.W.3d 384, (Tex. June 30,
the Act’s exclusion of consequential damages does            2006) [05-0414].
not allow the only damages sought and awarded                Sisk Utils., Inc. v. City of
the Tookes at trial.                                         Greenville, 197 S.W.3d 389, (Tex. June 30, 2006)
      Justice O’Neill filed a dissenting opinion,            [05-0601].
stating that she would hold that immunity from
suit was waived under Missouri Pacific and noting            XIV. INSURANCE
that for “well over three decades,” both citizens            A. Article 21.55
contracting with Texas municipalities and the                1. State Farm Life Ins. Co. v. Martinez,
Legislature had relied upon and accepted this                174 S.W.3d 772 (Tex. App.—Waco 2005), pet
precedent. Since that holding, the Legislature has           granted, 49 Tex. Sup. Ct. J. 966 (September 5,
inserted similar language in at least eighty statutes        2006) [05-0812].
authorizing or creating governmental entities. The                In this life insurance case, the primary issues
dissent argues that, given that long-standing                are whether a life insurer may be subject to
legislative acceptance, it was up to the Legislature         penalties and attorney’s fees under article 21.55 of
to change the law, and, further, that the legislative        the Texas Insurance Code and whether life
                                                             insurers presented with competing claims are


                                                        37
Supreme Court Update
January 1, 2006 – December 31, 2006

required to decide which claimant it should pay              payment. Thus, the penalty award was affirmed.
and then do so “subject to” a competing claimant’s           The Supreme Court granted State Farm’s petition
rights.                                                      for review and heard argument on December 7,
      As part of their September 15, 1994 divorce            2006.
agreement, Mr. Martinez promised to pay $5,000
per month to Linda Martinez for ten years, to                B. Bad-Faith Liability
make his estate liable for any unpaid balance, and           1.      Minn. Life Ins. Co. v. Vasquez,
to name his ex-wife as the beneficiary to a portion          192 S.W.3d 774 (Tex. April 7, 2006) [04-0477].
of the State Farm policy as well as other policies                 The mortgage insurer in this bad-faith case
not at issue in this case. On May 16, 1996, Mr.              took six months to pay off the insured’s mortgage
Martinez named his daughter Lisa as the successor            because (1) the death certificate and autopsy
beneficiary. Also in May of 1996, with his ex-               report made coverage unclear, and (2) the hospital
wife’s written consent, Mr. Martinez changed the             took four months to produce the remaining
beneficiary of the $175,000 State Farm policy to             medical records.         The insurance provided
his estate.                                                  coverage only for accidental deaths. Because the
      On June 30, 1996, Mr. Martinez married                 autopsy report and death certificate listed the
Toni. On August 1, 2002, Mr. Martinez named                  cause of death as “seizure disorder . . . followed
Toni as primary beneficiary and did not name Lisa            by blunt force trauma to the head,” the insurer
or anyone else as a successor beneficiary. In an             delayed payment while it requested further
August 16, 2002 letter, State Farm informed Mr.              documentation regarding the cause of death.
Martinez that it would not process Mr. Martinez’s                  The principal issue addressed was whether
request due to the divorce decree and that it                there was legally sufficient evidence to support
currently showed “Linda Martinez” as the primary             the jury’s finding that Minnesota Life committed
beneficiary.                                                 a knowing violation of the Texas Insurance Code.
      On August 25, 2002, Mr. Martinez died                  Minnesota Life contended that there was no
while still owing up to $120,000 in spousal                  evidence of a knowing violation, because the
support. On September 2, 2002, Mr. Martinez’s                delay in payment was caused by a hospital’s slow
daughter Lisa filed for the benefits. On September           response in producing medical records that
5, 2002, Mr. Martinez’s ex-wife Linda filed for              Minnesota Life needed to make a coverage
the benefits. On September 10, 2002, Mr.                     determination. In contrast, Vasquez argued that
Martinez’s second wife Toni filed her application.           liability was reasonably clear without the records
      Litigation began in November 2002. The                 and that Minnesota Life nonetheless delayed
trial court entered an order granting a partial              payment for approximately six months. Finding
summary judgment on Toni’s motion and finding                the insurer had knowingly engaged in an unfair or
that Toni was the beneficiary, subject to a                  deceptive act, a jury awarded extra-contractual
constructive trust on the portion of the policy              damages on top of the $41,000 mortgage the
proceeds equal to the amount of unpaid                       insurer paid after suit was filed. The jury awarded
contractual alimony due and payable to Linda on              Vasquez $60,000 in mental anguish damages,
a monthly basis. After a bench trial, the trial court        $250,000 in actual damages, and $37,000 in
awarded Mr. Martinez’s second wife, Toni, 6%                 attorney’s fees; the trial court allowed a post-
prejudgment interest in the amount of $ 25,506.73;           verdict amendment and ultimately rendered an
an 18% statutory penalty of $76,520.19 under                 award of $180,000 plus attorney’s fees. The court
Article 21.55 of the Insurance Code; attorney's              of appeals affirmed.
fees in the amount of $37,089.92; and additional                   The Supreme Court held that while the
appellate attorney’s fees as needed.                         insurance company might have done better, the
      The court of appeals upheld the trial court’s          Texas Insurance Code does not grant
finding that Mr. Martinez’s second wife, Toni,               policyholders extra-contractual damages unless an
was the rightful beneficiary and held that the               insurer knew its actions were false, deceptive, or
evidence supported the trial court's finding that the        unfair. Since the Court found no such evidence,
insurance company unreasonably delayed


                                                        38
Supreme Court Update
January 1, 2006 – December 31, 2006

the judgment of the court of appeals was reversed            including typicality and adequacy of
and remanded.                                                representation, and that the Attorney General did
                                                             not meet these requirements.
C. Class Action                                                   The Supreme Court granted the petition for
1. Farmers Group, Inc. v. Lubin, 157 S.W.3d 113              review and oral arguments are set for January 25,
(Tex. App.—Austin 2005), pet. granted, 50 Tex.               2007.
Sup. Ct. J. 72 (October 30, 2006) [05-0169].
      The issue in this case is whether section              D. Duty to Defend
541.251(a) of the Texas Insurance Code                       1. Nat’l Union Fire Ins. Co. v. Crocker, certified
authorizes the Attorney General to bring a parens            question accepted, 50 Tex. Sup. Ct. J. 10 (October
patriae class action law suit on behalf of Texas             16, 2006) [06-0868].
citizens.                                                          The certified questions in this case are: (1)
      Initially, the State commenced an                      Where an additional insured does not and cannot
investigation of Farmers’ insurance practices. The           be presumed to know of coverage under an
Attorney General then sued Farmers, alleging                 insurer’s liability policy, does an insurer that
deceptive, misleading, and discriminatory                    knows that a suit implicating coverage has been
homeowners’ insurance practices in violation of              filed against its additional insured have a duty to
the Texas Insurance Code and the DTPA. Also,                 inform the additional insured of the available
the Commissioner of Insurance began an                       coverage? (2) If so, what is the extent or proper
administrative proceeding against Farmers and                measure of the insurer’s duty to inform the
issued an emergency cease and desist order,                  additional insured, and what is the extent or
ordering Farmers to change its rating practices              measure of any duty on the part of the additional
within three months. Originally, the suit was not            insured to cooperate with the insurer up to the
brought as a class action but “in the name of the            point he is informed of the policy provisions? and
State of Texas and on behalf of the Texas                    (3) Does proof of an insurer’s actual knowledge of
Commissioner of Insurance.” Eventually, the                  service of process in a suit against its additional
State, the Attorney General, the Texas Department            insured, when the knowledge is obtained in
Insurance, and Commissioner of Insurance settled             sufficient time to provide a defense for the
with Farmers for $117 million. Under the                     insured, establish as a matter of law the absence
settlement agreement, the Attorney General                   of prejudice to the insurer from the additional
amended his pleadings to transform the suit into a           insured’s failure to comply with the notice-of-suit
class action settlement including all claims that            provisions of the policy?
had been or could be made by individual                            Beatrice Crocker seeks to recover from
policyholders in Texas. The Attorney General did             National Union on the basis of a default judgment
not designate representative class members,                  she won against National Union’s insured,
however, and asserted his statutory authority to             Richard Morris. Crocker sued both Morris and
bring class actions under the Insurance Code.                his former employer for injuries Crocker sustained
When they learned of the terms of the settlement             when she was struck by a swinging door allegedly
agreement, respondents Villanueva, Paladino, and             pushed negligently by Morris in the scope of his
Lubin filed separate pleas of intervention to object         employment at a nursing home where Crocker
to the settlement and to contest class certification.        lived.     Crocker’s claims against Morris’s
They were later joined by the Hooks.                         employer were covered by a commercial general
      The trial court held a certification hearing           liability policy issued by National Union. As an
and certified the class without a class                      employee acting within the course and scope of
representative. When the intervenors appealed,               his employment, Morris was an additional insured
the court of appeals reversed and remanded,                  and was entitled to defense and indemnity under
rejecting the State’s arguments that the Insurance           the policy. Although National Union defended
Code authorized the action. The court of appeals             the employer, it did not defend Morris. Morris
held that the Attorney General is required to                never forwarded the suit papers to National
comply with private class action prerequisites               Union, he never answered the suit, and he did not


                                                        39
Supreme Court Update
January 1, 2006 – December 31, 2006

appear at trial. The claims against Morris were             notify Hanover of either the claim or suit as soon
severed from the claims against his employer. A             as practicable, as was required by the insurance
jury rendered a take-nothing verdict against                policy. The parties also stipulated that Hanover
Crocker in the suit against the employer. Later,            was not prejudiced by PAJ’s violation of the
the trial court granted a default judgment in favor         notice provisions.
of Crocker and entered a $1,000,000 judgment                     The trial court granted Hanover’s motion for
against Morris.                                             summary judgment and denied PAJ’s, specifically
      Once both judgments became final, Crocker             finding that Hanover did not have to show
sued National Union as a third-party beneficiary            prejudice in order to defeat PAJ’s coverage claim.
of the policy. It is undisputed that the claims             The court of appeals affirmed. The Supreme
against Morris were covered by the policy, that             Court granted PAJ’s petition for review and heard
National Union knew Morris was a named                      argument on October 18, 2006.
defendant, that Morris did not know he was an
insured under the policy, and that National Union           E. Fiduciary Duty
did not inform Morris that he was an insured nor            1. Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins.
did it offer to defend Morris.                              Co., 150 S.W.3d 718 (Tex. App.—Austin 2004),
      The Supreme Court will hear argument on               pet. granted, 49 Tex. Sup. Ct. J. 255 (January 23,
January 25, 2007.                                           2006) [05-0006].
                                                                  The issues in this case are (1) whether the
2. PAJ, Inc. v. Hanover Ins. Co., 170 S.W.3d 258            insurance code or the parties’ contract gives rise
(Tex. App.–Dallas 2005), pet. granted, 49 Tex.              to a general fiduciary relationship between a third-
Sup. Ct. J. 567 (May 5, 2006) [05-0849].                    party administrator and an insurance company,
      The principal issue in this case is whether an        and (2) whether the “single business enterprise”
insured’s failure to comply with a commercial               theory should be applied to pierce the corporate
general liability insurance policy provision                veil. NPA, a third-party administrator owned by
requiring it to give notice of a claim or suit as           CRS marketing, and NHIC, an insurance carrier,
soon as practicable defeats coverage of an                  entered into a contract under which NPA was to
advertising injury without a showing of prejudice           perform administrative functions for NHIC. After
by the insurer.                                             NHIC decided to exit the line of insurance being
      PAJ, Inc. had a commercial general liability          administered by NPA, NPA approached another
insurance policy (CGL policy) with Hanover                  insurance carrier about purchasing the policies.
Insurance Company that included coverage for                After negotiating with NPA, the other carrier
advertising injury liability. The policy required           purchased only the policies of individuals who
that PAJ give notice to Hanover of any claim or             were “actively at work.” The less lucrative
suit brought against PAJ as soon as practicable. In         policies of those not “actively at work” remained
November 1998, Yurman Designs, Inc. demanded                with NHIC, and NHIC’s number of policies
that PAJ, also a jewelry designer and marketer,             dropped significantly. NHIC sued NPA and CRS
halt its marketing of a certain line of jewelry that        for breach of contract and fiduciary duty. The
Yurman claimed violated its copyrighted designs.            jury found that NPA had violated a fiduciary duty
The next month, Yurman sued PAJ on the same                 to NHIC, and that NPA and CRS had acted as a
basis. PAJ did not notify Hanover of the claim or           single business entity. The trial court rendered
suit until between five and eight months later.             judgment against CRS and NPA jointly and
      PAJ sued Hanover for a declaration                    severally.
concerning Hanover’s contractual obligation to                    NPA appealed, claiming it owed no general
defend or indemnify PAJ in the Yurman copyright             fiduciary duty to NHIC. CRS also appealed,
infringement litigation, and both filed motions for         claiming the single-business-enterprise theory
summary judgment. There was no dispute that the             should not be applied to pierce the corporate veil.
claim and suit were covered under the policy’s              The court of appeals concluded that under the
advertising injury coverage.           The parties          insurance code and the contract between the
stipulated, among other things, that PAJ did not            parties, NPA owed NHIC a general fiduciary duty.


                                                       40
Supreme Court Update
January 1, 2006 – December 31, 2006

The court of appeals also concluded that it                 Probate Code is not designed to protect A.G.
recognized the single-business-enterprise theory as         Edwards from its own malfeasance. Beyer
a valid means of piercing the corporate veil to             defends the award of attorney’s fees for, among
impose liability, but that CRS had not preserved            other things, defending against a federal
error on the issue. The Supreme Court heard                 interpleader action because that defense was
argument on NPA’s and CRS’s petitions for                   necessary to prevail on her state court action.
review on February 16, 2006.                                     The Supreme Court granted the petition for
                                                            review and will hear oral arguments on March 22,
F. Policies/Coverage                                        2007.
1. A.G. Edwards & Sons, Inc. v. Beyer,
170 S.W.3d 684 (Tex. App.—El Paso 2005), pet.               2. Evanston Ins. Co. v. ATOFINA Petrochem.,
granted, 50 Tex. Sup. Ct. J. 251 (December 28,              Inc., S.W.3d , 49 Tex. Sup. Ct. J. 589 (Tex.
2006) [05-0580].                                            May 5, 2006) [03-0647], rehearing granted
      Beyer filed suit against A.G. Edwards over a          October 27, 2006.
dispute concerning a document purported to create                 In this case the Court considered the scope of
a right of survivorship in a joint account. Beyer           insurance coverage that is provided to a
alleged that she and her father properly executed           third-party additional insured under an excess
the document but A.G. Edwards’ representative               insurance policy. ATOFINA Petrochemicals, Inc.
subsequently lost it. Beyer alleged conversion,             hired Triple S Industrial Corporation as an
negligence, fraud, negligent misrepresentation,             independent contractor to perform maintenance
breach of contract, and breach of fiduciary duty.           and construction work at ATOFINA’s Port Arthur
At trial, the jury returned a verdict in favor of           oil refinery. A Triple S employee was killed at
Beyer on all six claims. The jury also awarded              the ATOFINA facility while performing work
attorney’s fees for breach of contract. A.G.                pursuant to the independent contractor agreement
Edwards does not dispute the jury’s finding that            between ATOFINA and Triple S. The employee’s
A.G. Edwards agreed to create a joint account               relatives sued ATOFINA for wrongful death and
with enforceable rights of survivorship for Beyer           received a favorable settlement. ATOFINA seeks
and her father; it also does not dispute that A.G.          indemnification for its share of the settlement
Edwards failed to comply with that agreement.               from one of Triple S’s insurers, Evanston
Beyer elected to recover under breach of contract           Insurance Company.
and judgment was entered accordingly. The court                   Specifically, the Supreme Court was asked to
of appeals affirmed, holding that first, section            decide whether the additional insured provisions
439(a) of the Probate Code did not apply except             of the policy in question are broad enough to
for in a suit against the estate and, second, the           indemnify the third-party’s own acts of
attorney’s fees award need not be segregated when           negligence, and whether the scope of this
every claim arose from the same transaction and             coverage is limited in any way by the separate
the claims were inextricably intertwined.                   indemnity agreement between the third party and
      The Court was asked to review whether                 the policy’s named insured. The Court concluded
section 439(a) requires a writing, applies in suits         that the policy language excludes coverage for the
against financial institution such as A.G. Edwards,         additional insured’s sole negligence and, for that
whether Beyer improperly characterized her                  reason, it was unnecessary to reach the second
claims, and whether the attorney’s fee award was            question. However, the Court could not determine
proper. Beyer responds that the suit falls outside          from the record whether the accident was actually
of the Probate Code because the injury here, the            a product of the additional insured’s sole
negligent or intentional loss of documents, was             negligence, and therefore remanded for a
inflicted on her in tort by A.G. Edwards; further,          determination of the underlying liability issues.
as the jury found, the same conduct constitutes a
breach of contract. Beyer argues in the alternative
that even if the Probate Code applies in general, it
does not apply to this particular case because the


                                                       41
Supreme Court Update
January 1, 2006 – December 31, 2006

3. Fiess v. State Farm Lloyds, 202 S.W.3d 744                independent and discrete coverage issue, not
(Tex. August 31, 2006) [04-1104].                            touching on the merits of the underlying third-
      In this insurance case, the Texas Supreme              party claim. The insurer argued that a stipulation
Court answered the certified question from the               from the insured in the case established that the
Fifth Circuit of whether an “ensuing loss                    event in question was not covered. The Court
provision” contained in a standard homeowners                concluded that the exception recognized by other
insurance policy prescribed by the Texas                     courts did not apply in this case because the
Department of Insurance provided coverage for                stipulation concerned not only the issue of
mold contamination caused by water damage.                   coverage but also the underlying merits.
      The policy contained a provision listing                    Justice Hecht filed a concurring opinion,
losses caused by mold as excluded under the                  concluding that the pleadings were sufficient to
policy. Another provision, however, stated that              invoke the insurer’s duty to defend and that the
the insurer would cover ensuing losses caused by             stipulation was irrelevant to that determination.
water damage. The Court held that there was no
ambiguity in the “we do not cover loss caused by             G. Premium Taxes
mold” language of the policy despite the                     1. Lexington Ins. Co. v. Strayhorn, S.W.3d ,
alternative construction advanced by the Texas               50 Tex. Sup. Ct. J. 181 (Tex. December 1, 2006)
Department of Insurance. The risks excluded,                 [04-0429].
such as mold, tended to damage a home over time.                   In this case, the Supreme Court considered
The Court held that the “ensuing loss” provision             whether the Texas Insurance Code distinguishes
could not be construed as covering mold when that            between eligible surplus lines carriers and other
risk was explicitly excluded and that a broader              unlicensed insurers for tax purposes. The
reading could potentially convert homeowner’s                Supreme Court was asked to decide who should
policies into maintenance agreements.                        pay almost $2 million in unpaid premium taxes on
      Justice Medina dissented.       He would               policies issued by surplus lines carriers. Taxes on
conclude that the policy was ambiguous, and as               insurance premiums are normally assessed even if
such, that the ambiguity should be construed to              the policy is issued by an unlicensed insurer; this
favor the insured. The dissent adopted the Fifth             prevents unlicensed insurers from gaining an
Circuit’s suggested application of the policy                unwarranted advantage. For policies issued by
provision. The damage from an ensuing loss                   unlicensed insurers, the insurer must pay the tax
would be covered as long as it had not been                  or, if it does not, the insured must pay it. Surplus
excluded by some other provision of the policy.              lines policies are arguably distinct, however,
                                                             because only licensed agents may issue surplus
4. GuideOne Elite Ins. Co. v. Fielder Road Baptist           lines policies. The agent’s name and address is on
Church, 197 S.W.3d 305 (Tex. June 30, 2006)                  the policy. That agent is required to pay the tax
[04-0692].                                                   after collecting it from the insured. In this case,
      In this declaratory judgment action, the Court         because some of the agents on policies for which
was asked to create an exception to the complaint-           taxes were never collected either were
allegation or eight-corners rule. This rule                  unavailable, uncooperative, or unhelpful, the
provides that when an insured is sued by a third             Comptroller treated the policies as unauthorized
party, the liability insurer is to determine its duty        insurance and assessed the insurers for past-due
to defend solely from terms of the policy and the            premium taxes. After failing to resolve the issue
pleadings of the third-party claimant. Resort to             administratively, the insurers paid the taxes under
evidence outside the four corners of these two               protest and filed declaratory judgment actions
documents is generally prohibited.                           seeking refunds of those payments.
      Justice Medina, writing for the Court, noted                 The Supreme Court acknowledged that the
that the Court had never recognized an exception             Insurance Code, during the relevant time period,
to the eight-corners rule but that other courts had          did indeed create an exception for surplus lines
drawn a very narrow exception, permitting the use            insurance. That exception, however, shielded the
of extrinsic evidence only when relevant to an               insurers only when (1) the insurance was procured


                                                        42
Supreme Court Update
January 1, 2006 – December 31, 2006

from by a licensed surplus lines agent; and (2)             alleging that Allstate cannot collect charges such
from an eligible surplus lines insurer. The                 as the Auto Theft Prevention charge that are
Supreme Court held that its earlier decision in             outside of, and in addition to, the regulated article
Mid-American Indemnity Insurance Co. v. King,               5.101 premium rate. The trial court held that (1)
22 S.W.3d 321 (Tex. 1995), specifically included            an insurer could not charge the ATPA fee to its
surplus lines insurers in the same category as              insureds unless it was included in the regulated
unauthorized insurers. Moreover, the fact that a            premium rates under Texas Insurance Code article
specific statute established the tax structure and          5.101, and (2) the Texas Department of
set up separate, harsher penalties for surplus lines        Insurance’s rule allowing recoupment of the
policies and unauthorized insurance could not be            ATPA fee from insureds was void under the
read to preclude the use of the more general,               Texas Insurance Code. The court of appeals
unauthorized insurance tax for surplus lines                affirmed the trial court’s judgment.
policies falling outside the explicit exception                   The Supreme Court granted Allstate’s
when the relevant statutes could be reconciled.             petition for review and heard argument on
The Supreme Court held that when a policy is                October 17, 2006.
procured from an eligible surplus lines carrier
without a licensed surplus lines agent, the                 2. Mid-Century Ins. Co. v. Ademaj, 2004 WL
premium tax applicable to unauthorized insurance            2694475 (Tex. App.—Tyler 2004), pet. granted,
policies may be collected from the insurer.                 49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-
                                                            0016].
H. Regulation of Insurance Rates                                  The principal issue in this case is whether
1. Allstate Ins. Co. v. Fleming, 2005 WL 1536228            Texas Insurance Code article 21.35B allows an
(Tex. App.—Austin 2005), pet. granted, 49 Tex.              insurer to collect the Automobile Theft Prevention
Sup. Ct. J. 509 (April 24, 2006) [05-0645].                 Act (ATPA) fee from its insureds in addition to
      The principal issues in this case are (1)             policy premium rates set under Texas Insurance
whether Texas Insurance Code article 21.35B                 Code article 5.101.
allows an insurer to collect the Automobile Theft                 The Texas Legislature created the
Prevention Act (ATPA) fee from its insureds in              Automobile Theft Prevention Authority to combat
addition to its policy premium rates, which are set         automobile theft in Texas. The ATPA is funded
under Texas Insurance Code article 5.101; (2)               through a fee assessed against automobile
whether the court of appeals’ effective                     insurers. Farmers Insurance Company sold auto
invalidation of a valid Texas Department of                 insurance to Ademaj and collected two separate
Insurance rule, that allows recoupment of the               charges: (1) a regulated charge under its filed rate
ATPA fee, violates the United States and Texas              under Texas Insurance Code article 5.101, and (2)
Constitution; and (3) whether the court of appeals’         an additional Auto Theft Prevention charge to
opinion engages in rate-making thereby violating            cover the ATPA fee assessed against it. Ademaj
the separation of powers clause of the Texas                brought this suit alleging that Farmers may not
Constitution.                                               collect charges such as the ATPA fee that are
      The Texas Legislature created the                     outside of, and in addition to, the regulated article
Automobile Theft Prevention Authority to combat             5.101 rate.
automobile theft in Texas. The ATPA is funded                     The trial court held that for an insurer to
through a fee assessed against automobile insurers          assess the ATPA fee against its insured, the
by the Texas Legislature. After the Texas                   insurer must include the fee in its regulated
Legislature passed the legislation requiring this           premiums and that the Texas Insurance Code does
fee be paid by insurers, the Texas Department of            not authorize the insurer to charge the ATPA fee
Insurance promulgated a rule that expressly                 outside the rate established under article 5.101.
authorized insurers to recoup the ATPA fee from             The court of appeals affirmed the trial court’s
its insureds. Allstate Insurance Company sold               judgment.
auto insurance to Fleming and collected the ATPA                  The Supreme Court granted Mid-Century’s
charge from Fleming. Fleming brought this suit              petition for review and heard argument on


                                                       43
Supreme Court Update
January 1, 2006 – December 31, 2006

October 17, 2006.                                           Matagorda County was distinguishable and noted
                                                            that he would overrule the decision. Justice
I. Reimbursement for Claims Paid but Not                    O’Neill also concurred, concluding that the case
Covered                                                     differed from Matagorda County because the
1. Excess Underwriters at Lloyd’s, London v.                policy required Frank’s consent to any settlement.
Frank’s Casing Crew & Rental Tools, Inc.,                   Justice Wainwright also concurred. He reasoned
   S.W.3d , 48 Tex. Sup. Ct. J. 735 (Tex. May               that no implied-in-law obligation existed, but
27, 2005), motion for rehearing granted, 49 Tex.            concurred in the judgment because he believed
Sup. Ct. J. 240 (January 9, 2006) [02-0730].                that Frank’s had an implied-in-fact obligation to
      In this case, Excess Underwriters provided            reimburse the insurer under the facts of the case.
excess liability coverage to Frank’s Casing Crew            On January 6, 2006, the Court granted Frank’s
& Rental Tools, Inc. Excess had no duty to                  motion for rehearing. The Court heard argument
defend under the policy. After Frank’s notified             on February 15, 2006.
Excess of probable claims arising from the
collapse of an oil rig Frank’s had installed, Excess        J. Standing
contested coverage of some of the claims. Before            1. Allstate Indem. Co. v. Forth, 204 S.W.3d 795
trial, Excess made several offers to Frank’s to             (Tex. April 21, 2006) [05-0057].
settle conditioned on Frank’s participation in the                The issue in this case was whether an insured
settlement, but Frank’s refused those offers.               had standing to sue her insurance company for
Shortly after the trial began, Frank’s approached           settling her medical bills in what the insured
the claimant in the underlying suit and suggested           considered to be an arbitrary and unreasonable
that it make a settlement offer within Excess’s             manner. Pat Forth’s daughter required medical
policy limits. Excess eventually funded the                 treatment in 1997 as the result of an auto accident.
settlement and then filed the present suit in which         The personal injury protection of Forth’s Allstate
it sought a declaratory judgment that the claims            auto insurance policy covered “reasonable
were not covered and reimbursement of the                   medical expenses incurred for necessary medical
settlement. The trial court rendered a partial              services.” After Allstate settled Forth’s medical
summary judgment that the claims were not                   bills for less than the actual amount billed, Forth
covered and another on damages. It also rendered            sued Allstate for injunctive and declaratory relief,
an additional partial summary judgment that                 alleging that it arbitrarily reduced her bills by
Excess was entitled to reimbursement. But before            comparing her charges to a third-party
the judgment was final, the Supreme Court issued            contractor’s computerized database and offering
its decision in Texas Association of Counties               about eighty-five percent of the medical expenses
Gov’t Risk Mgmt. Pool v. Matagorda County, 52               reflected in that database for the same treatment.
S.W.3d 128 (Tex. 2000). The trial court                     Forth claimed that she had been injured because
ultimately determined that Excess was not entitled          Allstate did not cover the full amount of her
to reimbursement under that decision because                “reasonable expenses.” The trial court granted
Frank’s had not unequivocally agreed to reimburse           Allstate’s motion to dismiss for lack of standing.
Excess, and it rendered a take-nothing judgment in          The court of appeals affirmed in part and reversed
Frank’s favor. The court of appeals affirmed.               in part, holding that Forth lacked standing to seek
      The Supreme Court granted Excess’s petition           prospective relief because Allstate no longer
for review on April 5, 2003. On May 27, 2005,               insured her, but that she could seek retrospective
the Court handed down a decision. In that                   relief if a fair and independent evaluation of the
opinion, the Court held that Frank’s had an                 medical bills would reveal that Allstate had paid
implied-in-law obligation to reimburse Excess,              less than the full amount of Forth’s “reasonable
and explained that Matagorda County did not                 expenses.”
limit an insurer’s right to reimbursement only to                 The Supreme Court reversed the court of
situations in which the insured has expressly               appeals’ judgment and rendered judgment that
agreed to a reimbursement obligation. Justice               Forth’s claims be dismissed.            The Court
Hecht concurred, but rejected the notion that               concluded that Forth lacked standing to seek any


                                                       44
Supreme Court Update
January 1, 2006 – December 31, 2006

relief because she did not suffer a threatened or           L. Underinsured/Uninsured Motorist Policies
actual injury. Forth did not claim that she had any         1. Brainard v. Trinity Universal Ins. Co.,
unreimbursed, out-of-pocket medical expenses,                    S.W.3d       , 50 Tex. Sup. Ct. J. 271 (Tex.
that her medical providers withheld medical                 December 22, 2006) [04-0537].
treatment as a result of Allstate reducing their                  The principal issues in this case were (1) the
bills, or that the medical providers harassed her in        availability and calculation of prejudgment
any manner or threatened to sue her for any                 interest under an underinsured motorist policy and
deficiency. Allstate satisfied its obligation to            (2) the availability of attorney’s fees in a suit
cover Forth’s “reasonable expenses” under the               against an insurer on an underinsured motorist
policy, because Forth could not show injury or              claim. Edward Brainard was killed in an
potential injury.                                           automobile accident. His family settled with the
                                                            tortfeasor’s insurance company for the policy
K. Subrogation                                              limit and then sued Brainard’s own insurance
1. Fortis Benefits v. Cantu, 170 S.W.3d 755 (Tex.           company, Trinity Universal, seeking damages
App.—Waco 2005), pet. granted 49 Tex. Sup. Ct.              through the underinsured motorist provision of his
J. 950 (August 28, 2006) [05-0791].                         policy. The Brainards argued that prejudgment
      After suffering severe injuries in a motor            interest owed by the tortfeasor on the entire
vehicle accident that rendered her a paraplegic,            amount of damages, not taking into account any
Vanessa Cantu filed suit against several                    settlement credits, was recoverable under the
defendants to recover past and future medical               policy and that attorney’s fees were recoverable
expenses and other damages. Fortis Benefits,                under chapter 38 of the Texas Civil Practice and
Cantu’s health insurance provider, intervened in            Remedies Code. The court of appeals affirmed
the suit to recover through contractual subrogation         the trial court’s denial of prejudgment interest and
or reimbursement the benefits it had paid for               reversed the portion of the trial court’s judgment
Cantu’s health care. At the pretrial conference, all        awarding the Brainards attorney’s fees.
of the parties agreed that the defendants would                   The Supreme Court held that UIM insurance
negotiate a settlement with Cantu, and Fortis               covers prejudgment interest that the underinsured
would be excused until the post-verdict phase,              motorist would owe the insured. The Court noted
when it would look only to Cantu to resolve its             that prejudgment interest is awarded to
claims. Cantu settled her claims with the                   compensate the injured party, not to punish the
defendants for $1,445,000; however, Cantu and               defendant. Furthermore, Brainard’s UIM policy
Fortis could not agree on what portion of the               was based on Texas Insurance Code article 5.06-
settlement, if any, Fortis was entitled to.                 1(5), and that statute’s “compensatory purpose is
Subsequently, Cantu filed a motion for summary              well served when the insured obtains, in addition
judgment, asserting that Fortis was not entitled to         to actual damages, any prejudgment interest that
recover anything because Cantu had not been                 the underinsured motorist would owe the
“made whole” in the settlement.                             insured.” Trinity argued that the UIM policy’s
      Because the settlement and the amount                 language covering damages “because of bodily
already paid by Fortis did not cover her projected          injury” excluded prejudgment interest, but the
future medical expenses, the trial court found that         Court rejected this argument because it promotes
Cantu had not been “made whole” and granted her             an “artificially literal” meaning that “has no basis
motion for summary judgment, disposing of                   in the statute’s history or our precedent under
Fortis’ intervention claims against all defendants.         which article 5.06-1 is liberally construed to
The court of appeals affirmed the judgment. The             protect persons who are legally entitled to recover
Supreme Court granted Fortis’s petition for review          damages from underinsured mototists.”
and heard argument on November 16, 2006.                          With regard to the attorney’s fees issue, the
                                                            Court held that Brainard was not entitled to
                                                            attorney’s fees. Under Chapter 38 of the Civil
                                                            Practice and Remedies Code, a claimant must
                                                            present a claim that the insured is “legally entitled


                                                       45
Supreme Court Update
January 1, 2006 – December 31, 2006

to recover.” UIM contracts are unique in that the            trial court did not err in refusing to award
duty to pay is not triggered until “the insured              attorney’s fees. See Brainard v. Trinity Universal
obtains a judgment establishing the liability and            Ins. Co.,___S.W.3d___, 50 Tex. Sup. Ct. J. 271
underinsured status of the other motorist.”                  (Tex. December 22, 2006) [04-0537].
Therefore, “under chapter 38, a claim for UIM
benefits is not presented until the trial court signs        XV. INTENTIONAL TORTS
a judgment establishing the negligence and                   A. False Imprisonment/Assault and Battery
underinsured status of the other motorist.”                  1. Pleasant Glade Assembly of God v. Schubert,
                                                             174 S.W.3d 388 (Tex. App.—Fort Worth 2005),
2. State Farm Mut. Auto. Ins. Co. v. Nickerson,              pet. granted, 49 Tex. Sup. Ct. J. 1041 (September
    S.W.3d      , 50 Tex. Sup. Ct. J. 268 (Tex.              25, 2006) [05-0916].
December 22, 2006) [04-0427].                                      Laura Schubert sued Pleasant Glade
     In accordance with its opinion in Brainard v.           Assembly of God Church and several of its
Trinity Universal Insurance Company, the Court               members for false imprisonment and assault and
reversed the part of the court of appeals’ opinion           battery. While attending events at Pleasant Glade
awarding attorney’s fees to Nickerson and                    Assembly of God while her parents were out of
rendered judgment for State Farm. See Brainard               town, 17-year-old Laura Schubert was restrained
v. Trinity Universal Ins. Co.,___S.W.3d___, 50               by church members on two different occasions.
Tex. Sup. Ct. J. 271 (Tex. December 22, 2006)                Schubert was first restrained after she had told
[04-0537].                                                   other members that she had seen a vision. She
                                                             then collapsed and was taken by adults into a back
3. State Farm Mut. Auto. Ins. Co. v. Norris,                 classroom at the church where she was held for
    S.W.3d        , 50 Tex. Sup. Ct. J. 269 (Tex.            approximately two and a half hours while church
December 22, 2006) [04-0514].                                members prayed over her. Schubert was again
      Jimmie R. Norris was injured in an accident            restrained three days later when church members
with an underinsured driver. He sued State Farm              found her sitting in a corner of the church in a
to recover benefits under his underinsured                   fetal position. In both instances, Schubert was
motorist (UIM) policy.          Two issues were              allegedly held against her will while church
presented on appeal: (1) whether Norris’s UIM                members prayed over her, and she fought to be
policy covers prejudgment interest, and (2)                  released by kicking, clenching her fists and teeth,
whether he is entitled to attorney’s fees under              screaming, and crying. There is some conflicting
chapter 38 of the Civil Practice and Remedies                evidence regarding whether these actions were the
Code. The Court held that Norris is entitled to              result of Schubert being forcibly restrained or
prejudgment interest, but not attorney’s fees.               whether they were the types of behaviors that led
      Writing for the Court, Chief Justice Jefferson         church members to become concerned and
said “an [] UIM policy allows an insured driver to           restrain Schubert in the first place.
recover the difference between the negligent                       After a jury trial, the trial court awarded
driver’s insurance policy limit and the full amount          Schubert compensatory damages of approximately
of damages, including prejudgment interest,                  $450,000. The court of appeals reversed the part
determined at trial.” Consistent with the Court’s            of the judgment awarding damages for future lost-
opinion in Brainard v. Trinity Universal Insurance           earning capacity because it was not a foreseeable
Co., ___ S.W.3d ___, 50 Tex. Sup. Ct. J. 271                 result of the two incidents and affirmed the
(Tex. December 22, 2006), the Court held that                remainder of the judgment. The principal issues
State Farm owes prejudgment interest, up to the              before the Supreme Court are whether the court of
policy limit, calculated by the declining principal          appeals erred in allowing recovery for damages
formula.                                                     for mental anguish and whether the court of
      Also in accordance with the Brainard                   appeals erred in finding that expert psychological
opinion, the Court held that Norris could not seek           testimony regarding Post Traumatic Stress
attorney’s fees until, at the earliest, thirty days          Disorder was reliable and admissible.
after the trial court rendered judgment. Thus, the


                                                        46
Supreme Court Update
January 1, 2006 – December 31, 2006

    The Supreme Court granted Pleasant Glade                intentional infliction of emotional distress after
Assembly of God’s petition for review and heard             she was acquitted of shoplifting charges. The jury
argument on January 24, 2007.                               returned a verdict in her favor on both her civil
                                                            claims, and the court of appeals affirmed. On
B. Malicious Prosecution                                    petition for review, Kroger challenged the legal
1. In re Bexar County Criminal Dist. Attorney’s             sufficiency of the evidence to support liability on
Office, 179 S.W.3d 47 (Tex. App.—San Antonio                each claim. The Supreme Court reversed, and
2005), argument granted on pet. for writ of                 rendered judgment that Suberu take nothing.
mandamus, 49 Tex. Sup. Ct. J. 509 (April 24,                      Suberu went to pick up medicine from the
2006) [05-0613].                                            pharmacy at a Kroger grocery store. When she
      The central issue in this case is whether the         noticed that she did not bring enough cash, she
work-product privilege protects prosecutors from            told the pharmacy technician that she was going
testifying in a malicious prosecution case when             outside to retrieve money from her vehicle and
they have already released the prosecution file.            would return to complete the purchase. Suberu
David Crudup and Cindy Blank were neighbors                 was exiting the store when three Kroger
who had frequent disagreements. Arguments and               employees accused her of attempting steal a cart
complaints escalated to the point where Cindy               full of unsacked groceries. At trial, Suberu
Blank and her son Travis filed a complaint against          testified that she never had a cart. With respect to
Crudup, alleging that Crudup threatened Travis’s            malicious prosecution, Kroger argued that the
life, thus putting Travis in fear for his life. The         evidence was legally insufficient to support the
Bexar County District Attorney’s Office initiated           jury’s finding that Kroger initiated the prosecution
a prosecution against Crudup for a “Terroristic             without probable cause. The Supreme Court
Threat,” a misdemeanor. The District Attorney               identified three pieces of evidence favorable to
dropped the charges, however, when Cindy Blank              this finding, but concluded that two had to be
informed him that neither she nor her son could             disregarded as a matter of law. Thus, the only
testify at trial. Crudup then filed this malicious          evidence remaining was Suberu’s testimony that
prosecution case against Cindy Blank. In response           she did not have a cart. The Court concluded that
to a subpoena, the District Attorney’s office               Suberu’s evidence was legally insufficient to rebut
released its prosecution file to Crudup, but would          the presumption that Kroger acted with probable
not agree to testify, filing a motion to suppress in        cause in reporting Suberu to the police. With
the trial court. The District Attorney asserts a            respect to intentional infliction of emotional
work-product privilege covering his                         distress, Kroger challenged the jury’s finding that
decision-making process in the case against                 its conduct was extreme and outrageous. The
Crudup. The trial court quashed Crudup’s                    Court concluded that Suberu produced no
subpoena ordering prosecutors to appear after               evidence that Kroger acted with an ulterior motive
holding a hearing about the scope of testimony              or knew she was innocent.
sought. In an original proceeding, the court of                   Justice Johnson, joined by Justice Medina,
appeals ruled that the claimed privilege did not            dissented. The dissent concluded that Suberu’s
protect the prosecutors from having to testify,             testimony was sufficient for the jury to find that
ordering the trial court to set aside its order             Kroger was unreasonable, and therefore lacked
quashing the subpoena.                                      probable cause in accusing Suberu of shoplifting.
      The Supreme Court heard argument in the               In a section joined by Justice Wainwright, the
petition for writ of mandamus on September 28,              dissent noted that the Court should re-examine its
2006.                                                       holdings that malice may be inferred from a
                                                            finding that the defendant lacked probable cause.
2.    Kroger Tex. Ltd. P’ship v. Suberu,
  S.W.3d , 49 Tex. Sup. Ct. J. 592 (Tex. May 5,
2006) [03-0913].
     Theresa Suberu sued Kroger Texas Limited
Partnership for malicious prosecution and


                                                       47
Supreme Court Update
January 1, 2006 – December 31, 2006

XVI. JURISDICTION                                           interest.     In total, Brite was awarded
A. Amount in Controversy                                    approximately $980,000. The court of appeals
1.     United Servs. Auto. Ass’n v. Brite,                  affirmed the judgment.
161 S.W.3d 566 (Tex. App.—San Antonio 2005),                      The Supreme Court granted USAA’s petition
pet. granted, 49 Tex. Sup. Ct. J. 509 (April 24,            for review and heard argument on September 26,
2006) [05-0132].                                            2006.
      The principal issue presented in this case is
whether, in determining the “amount in                      B. Minimum Contacts
controversy” to establish jurisdiction, the court           1. PHC-Minden, L.P. v. Kimberly-Clark Corp.,
should consider the total amount of the damages             2005 WL 1979102 (Tex. App.—Tyler 2005), pet.
the plaintiff seeks to recover, or whether it should        granted, 49 Tex. Sup. Ct. J. 950 (August 28,
exclude damages that are uncertain in duration and          2006) [05-0823].
amount.                                                           The issues are (1) whether a foreign
      As part of a reduction in force, United               corporation established minimum contacts in
Services Automobile Association terminated                  Texas; (2) whether the Single Business Enterprise
James Brite’s employment. Brite subsequently                theory allows assertion of personal jurisdiction
filed an age-discrimination claim in the county             over a wholly-owned subsidiary because of the
court at law, which has jurisdiction in “civil cases        parent company’s contacts; (3) whether a
in which the matter in controversy exceeds $500             plaintiff’s failure to plead Single Business
but does not exceed $100,000, excluding interest,           Enterprise theory waives it as a basis of
statutory or punitive damages and penalties, and            jurisdiction; (4) whether the relevant period for
attorney’s fees and costs, as alleged on the face of        evaluating minimum contacts extends only to the
the petition . . . .”         TEX . GOV ’T CODE             date of injury or to the date the suit commences;
§ 25.0003(c)(1). Brite sought damages for back              and (5) whether the trial court’s failure to make
pay (“compensation due Plaintiff that accrued at            findings of fact and conclusions of law after
the time of filing this Petition”) and front pay            ruling that it had general jurisdiction was harmful
(“the present value of unaccrued wage                       error.
payments”), punitive damages, and attorneys’                      Minden Medical Center (MMC) is located in
fees.                                                       Louisiana, but .009% of its patients are Texas
      In his Original Petition, Brite pleaded only          residents. MMC also purchases from Texas
that his damages exceeded the statutory minimum             vendors and contracts with Texas businesses.
of $500. He did not plead that his damages were             MMC is a wholly-owned subsidiary of Province
below the $100,000 maximum limits. In an                    Health Care (Province), which also owns two
amended petition, Brite stated that he sought               hospitals in Texas. Jajah Eddington, a Texas
damages of $1.6 million, but he did not specify             resident, received treatment for flu-like symptoms
how much of that amount consisted of punitive               from MMC. Eddington later died from toxic
damages or attorney’s fees, which the statute               shock syndrome caused by her use of a tampon
excludes from the jurisdictional calculation.               manufactured by Kimberly-Clark. Eddington’s
However, in a discovery response, Brite admitted            family filed a wrongful death suit against
that “his lost wages and benefits in the future,            Kimberly-Clark; Kimberly-Clark filed a third
until age 65, total approximately $1,000,000.00.”           party action against MMC alleging medical
USAA filed a plea to the jurisdiction, asserting            negligence. MMC filed a special appearance
that the county court at law lacked jurisdiction            contesting jurisdiction.
because Brite sought damages greater than                         The trial court ruled that it had general
$100,000. The trial court denied the plea to the            jurisdiction over MMC and denied the special
jurisdiction.                                               appearance. MMC filed a request for findings of
      After a jury trial, the trial court ultimately        fact and conclusions of law, which the trial court
awarded Brite $188,406 for back pay, $350,000               denied. The court of appeals affirmed, holding
for front pay, $300,000 in punitive damages,                that there was jurisdiction based on MMC’s own
$129,387 in attorneys’ fees, and prejudgment                contacts and based on Province’s contacts, which


                                                       48
Supreme Court Update
January 1, 2006 – December 31, 2006

could be imputed to MMC under the Single                    appeals’ judgment and opinion, vacated the trial
Business Enterprise theory. The court of appeals            court’s judgment, and dismissed the case. The
stated that a relevant contacts analysis included           Court held that Marshall’s failure to post a
the period up to the date of injury or the date the         supersedeas bond pursuant to Texas Property
suit commenced, excluding as irrelevant a contract          Code Section 24.007 did not prevent her from
signed after commencement of the suit.                      appealing the trial court’s judgment, and in light
      The Supreme Court granted MMC’s petition              of her expression of intent to appeal, Marshall’s
for review and heard argument on November 16,               action in giving up possession did not moot her
2006.                                                       appeal so long as appellate relief was not futile.
                                                            But, her lease had expired and she presented no
C. Mootness                                                 basis for claiming a right to possession. Thus,
1. Marshall v. Housing Auth., 198 S.W.3d 782                there was no live controversy between the parties
(Tex. March 3, 2006) [04-0147].                             as to the right of current possession and the issue
      In this case, the Supreme Court addressed the         of possession was moot. See Williams v. Lara, 52
issues of whether a tenant may appeal from an               S.W.3d 171, 184 (Tex. 2001). No exception
adverse judgment in a forcible detainer action              applied to warrant consideration of the appeal on
without posting a supersedeas bond and whether              its merits except the issue of costs. The Court
a forcible detainer action is moot when the tenant          taxed costs to the party by whom incurred,
is no longer in possession of the premises and her          holding that the Housing Authority’s seeking
lease has expired. Answering both questions in              dismissal of the case because it was otherwise
the affirmative, the Court dismissed the case as            moot and concurrently asserting that the costs
moot and vacated the underlying judgments.                  awarded by the trial court are de minimus
      Theresa Marshall leased an apartment from             constituted good cause for the Housing Authority
the San Antonio Housing Authority. After a                  to be responsible for its own trial court costs.
shooting at her apartment, the housing authority
brought an action for forcible detainer, seeking            D. Public Utility Commission
possession of the apartment. The trial court                1. In re Sw. Bell Tel. Co., 2005 WL 1405777
entered judgment awarding the Housing Authority             (Tex. App.—Corpus Christi 2005), argument
possession of the apartment, court costs, and               granted on pet. for writ of mandamus, 49 Tex.
post-judgment interest. Marshall failed to file a           Sup. Ct. J. 360 (February 7, 2006) [05-0511].
supersedeas bond and vacated the apartment. The                   The principal issues in this case are (1)
court of appeals determined that Marshall’s appeal          whether the trial court clearly abused its
was moot and dismissed the appeal for want of               discretion by refusing to abate a tort, DTPA,
jurisdiction. In her petition for review in the             fraud, and antitrust lawsuit to allow the Public
Supreme Court, Marshall argued that the court of            Utility Commission of Texas (PUC) to resolve the
appeals erred in dismissing her appeal without              preliminary issues regarding interconnection
reviewing its merits because (1) review of her              agreements within its exclusive or primary
appeal was not contingent on her posting a                  jurisdiction, and (2) whether relator Southwestern
supersedeas bond; (2) vacating her apartment did            Bell Telephone Company (SWBT) lacks an
not moot her appeal; and (3) if she prevailed, the          adequate remedy at law.
trial court’s judgment would be reversed and then                 The real parties in interest are competitive
(a) she would be entitled to recover the fair market        local exchange carriers (CLECs) who compete for
value of her apartment through expiration of her            customers with relator SWBT, an incumbent local
lease; (b) the adverse collateral consequences she          exchange carrier, by purchasing and reselling
had suffered would be ameliorated; and (c) she              SWBT’s local telephone services. When the
would be relieved of liability for payment of the           CLECs place orders to resell service, they may do
Housing Authority’s court costs and                         so electronically using an SWBT interface, or
post-judgment interest.                                     manually, which requires SWBT employees to
      The Supreme Court concluded that                      enter the orders. In this case, the CLECs sued
Marshall’s case was moot, vacated the court of              SWBT in Texas district court for damages on tort,


                                                       49
Supreme Court Update
January 1, 2006 – December 31, 2006

negligent misrepresentation, DTPA, and antitrust              in the juvenile facility for an uncertain amount of
theories, alleging that SWBT charged them for                 time before he would be able to talk to his mother,
orders processed electronically as though they                and that if he wanted an attorney, it would have to
were processed manually by SWBT employees.                    be his choice, to which H.V. responded “I’m only
SWBT removed the suit to federal court, but the               16.” The magistrate apparently explained to H.V.
federal court remanded the case back to state                 that he could ask for a lawyer, and then
district court for lack of a federal question. After          determined that H.V. was willing to speak to the
the trial court denied its motion to dismiss, SWBT            police.      The magistrate signed a form
moved (1) for summary judgment based on                       acknowledging that the proper warnings had been
previous PUC decisions that SWBT claimed were                 given, but H.V. did not sign. H.V. then made a
identical to this case, or (2) alternatively, for             written, signed statement on a form stating that
abatement and referral to the PUC, so that the                the proper warnings had been given. Based on
PUC could decide the threshold issues regarding               information in that statement and a diagram drawn
the parties’ interconnection agreements.                      by H.V. while making the statement, police
      The trial court denied SWBT’s motions for               located a gun.
summary judgment and abatement. The court of                        At trial, H.V. moved to suppress both the
appeals denied SWBT’s petition for writ of                    second written statement and the gun. The trial
mandamus. The Supreme Court heard argument                    court held that H.V. had unambiguously invoked
on March 22, 2006.                                            his right to counsel; because the confession was
                                                              obtained after a failure to honor this invocation
                                                              and the gun was the fruit of the improperly
XVII. JUVENILE JUSTICE                                        obtained confession, both must be suppressed.
A. Confessions                                                The trial court also ruled that the delay in
1. In the Matter of H.V., 179 S.W.3d 746 (Tex.                transporting H.V. to the detention center and
App.—Fort Worth 2005), pet. granted, 50 Tex.                  notifying his parents of his arrest violated
Sup. Ct. J. 151 (December 4, 2006) [06-0005].                 provisions of the Family Code. The court of
      The issues presented in this case are whether           appeals affirmed, holding that given the totality of
a juvenile’s statement during a custodial                     the circumstances, the trial court did not abuse its
interrogation that he wanted to call his mother               discretion in suppressing the written statement,
because he wanted his mother to ask for an                    and differentiating between the physical fruits of
attorney constitute an unambiguous invocation of              a statement obtained after a failure to honor a
the right to counsel such that a subsequently                 request for counsel, such as the gun in this case,
obtained statement must be excluded from                      which must be suppressed, and the physical fruits
evidence at the juvenile’s criminal trial, and, if the        of a statement obtained after a failure to provide
statement is inadmissible, whether physical                   proper Miranda warnings, which need not be
evidence discovered as a result of that statement             suppressed.
must also be excluded from evidence.                                The Supreme Court granted the State’s
      H.V., a 16-year-old Bosnian native who was              petition for review, and will hear oral arguments
a suspect in a murder investigation, was taken in             on April 12, 2007.
for a custodial interrogation, properly warned,
made a written statement, and was released. Later             XVIII. MEDICAL MALPRACTICE
the same day, he was arrested and held in the back            A. Expert Reports
of a patrol car for approximately 90 minutes                  1.    Hillcrest Baptist Med. Ctr. v. Wade,
before being transported to a juvenile facility. His          172 S.W.3d 55 (Tex. App.—Waco 2005), pet.
parents were not told of his arrest until sometime            granted, 49 Tex. Sup. Ct. J. 1041 (September 25,
after he had been transported to the detention                2006) [05-0773].
facility. During the administration of the Miranda                 In this medical malpractice case, Penny
warnings by a magistrate, H.V. stated he wanted to            Wade sued Hillcrest Baptist Medical Center, two
call his mother because he wanted her to ask for a            emergency room doctors, and the doctors’
lawyer. H.V. was told that he would be detained               employers, alleging that the defendants’ delay in


                                                         50
Supreme Court Update
January 1, 2006 – December 31, 2006

consulting with a cardiologist after she presented           claims included fraud, fraudulent concealment,
with chest pain and a cough resulted in severe               civil conspiracy, misrepresentation, and violations
heart damage that could ultimately cause her to              of the DTPA. Dr. Jetta Brown submitted expert
require a heart transplant. Wade filed three expert          reports on behalf of the Plaintiffs. McAllen
reports. The first report was prepared by a nurse            moved to dismiss, claiming the expert reports
who attested that Hillcrest’s nursing staff breached         were inadequate to meet the requirements of
the appropriate standard of care for nurses by               sections 13.01 and 14.01 of the MLIIA. The trial
failing to immediately draw Wade’s condition to              court denied the motion to dismiss. The court of
the attention of a physician, but it does not address        appeals denied McAllen’s request for mandamus
causation. Two other reports by physicians                   relief and found that McAllen failed to show that
maintain that the doctors breached the applicable            the trial court clearly abused its discretion, or that
standard of care by failing to properly interpret            there was no adequate remedy on appeal.
Wade’s tests and immediately consult a                             The Supreme Court granted argument on
cardiologist, resulting in permanent heart damage            McAllen’s petition for writ of mandamus and
that could have been avoided by earlier treatment.           heard argument on December 5, 2006.
Hillcrest, whose liability is dependent on the
nursing staff, moved to dismiss Wade’s complaint             B. Limitations
based on the failure of any expert report to address         1. Kallam v. Boyd, 152 S.W.3d 670 (Tex.
causation with respect to the nursing staff. The             App.—Fort Worth 2004), pet. granted, 49 Tex.
trial court denied the motion and the court of               Sup. Ct. J. 966 (September 5, 2006) [05-0027].
appeals affirmed, holding that all three affidavits,              The principal issue in this case is what test a
read together, were adequate.                                court is to use to determine whether a medical
      Hillcrest maintains that the court of appeals          malpractice plaintiff had a “reasonable
abused its discretion by inferring causation as to           opportunity” to discover an alleged wrong or
the nursing staff from the reports addressing the            alleged injury and bring suit during the applicable
physicians’ alleged breach of the standard of care.          limitations period, to determine in turn whether
Wade responds that her reports, read as a whole,             the limitations bar as applied to that plaintiff
are sufficient to comply with section 74.351 of the          would violate the open courts provision of the
Texas Civil Practice and Remedies Code. Wade                 state constitution under the Supreme Court’s
contends that the court of appeals should have               previous decisions.
dismissed the appeal because Hillcrest challenged                 Sharon Boyd, a nurse of 25 years, was
the adequacy of her reports, not their timeliness.           diagnosed with colorectal cancer after undergoing
The Court granted Hillcrest Baptist Medical                  a colonoscopy. Boyd first reported her rectal
Center’s petition for review and heard argument              bleeding and constipation to Dr. Kallam, her
on January 23, 2007.                                         gynecologist, in November 1998, and at
                                                             subsequent visits both Dr. Kallam and her primary
2. In re McAllen Med. Ctr., Inc., 2005 WL                    care physician Dr. Thompson diagnosed
2456602 (Tex. App.—Corpus Christi 2005),                     hemorrhoids. In February 2002, Boyd requested
argument granted on pet. for writ of mandamus,               a referral to have the colonoscopy, which took
49 Tex. Sup. Ct. J. 951 (August 28, 2006) [05-               place in April 2002. Besides learning of her
0892].                                                       cancer, Boyd was also told that a tumor or some
      The primary issues in this case are whether            precursor abnormality had been present and
the trial court abused its discretion in finding that        growing in her colon since 1996. That Boyd’s
expert reports satisfied the requirements of the             father had colon polyps removed, without having
Medical Leave and Insurance Improvement Act,                 suffered any of Boyd’s symptoms, was the only
and whether mandamus is an appropriate remedy                relevant family history.
to address this issue. Plaintiffs brought suit                    On August 30, 2002, Boyd sued Dr. Kallam,
against McAllen Medical Center, Inc., for claims             Dr. Thompson, and others alleging various
arising from cardiac and vascular surgeries                  negligent acts such as misdiagnosis.            The
performed by Dr. Frederico Bracamontes. The                  defendants moved for partial summary judgment,


                                                        51
Supreme Court Update
January 1, 2006 – December 31, 2006

arguing that the two-year statute of limitations for         defendant summary judgment movant; and
medical malpractice claims found in former TEX .             whether the guardian plaintiff met this burden.
REV . CIV . STAT . article 4590i, section 10.01                    Thirty-eight year old Carletha Yates went
barred Boyd’s claims which alleged negligence                into cardio pulmonary arrest during a surgical
occurring before August 30, 2000. Boyd had                   procedure in May 2000. She was allegedly left
pleaded that the open courts provision precluded             comatose. In 2001, her mother Eula Yancy, as
any application of this limitations period because           guardian of her daughter’s estate and person, sued
she had no reasonable opportunity to discover the            the anesthesiologist and his associates but did not
wrongs or her injury within that period, and in              amend to add three additional defendants until
response to the summary judgment motion Boyd                 September 2003. These three defendants moved
filed evidence that she claimed raised a fact issue          for summary judgment based on the two year
regarding whether she had such a reasonable                  statute of limitations for healthcare liability
opportunity. The trial court granted the motions             claims. Yancy responded that this statute of
for partial summary judgment.                                limitations, when applied to bar the claim of a
      The court of appeals reversed and remanded             me n t a l l y i nc ap ac it at ed c la ima nt , i s
as to the majority of Boyd’s negligence claims,              unconstitutional under the open courts provision
holding that Boyd had raised a fact issue                    of the state constitution, particularly where the
concerning whether she had a reasonable                      incapacity was caused by the defendants and had
opportunity to learn of the defendants’ negligence           been continuous as in Yates’s case. On the day of
or her cancer during the limitations period. The             the summary judgment hearing, the defendants
defendants argue that the appropriate test is                filed a reply arguing that the response assumed
whether it was impossible or exceedingly difficult           issues in dispute, including whether Yates had
for Boyd to discover the defendants’ alleged                 been continuously mentally incapacitated since
negligence or her alleged cancer within the                  her surgery, and making various objections to two
limitations period, not whether she had no reason            of the three affidavits Yancy attached to her
to know of the alleged wrongs or her alleged                 response, which she claims provided competent
injury within that period. The defendants also               evidence at to Yates’s incapacity. The trial court
deny that Boyd’s summary judgment evidence met               granted the motions for summary judgment
either the burden articulated by the court of                without specifying grounds or sustaining the
appeals or that articulated by them.                         defendants’ objections.
      The Supreme Court granted the defendants’                    The court of appeals affirmed summary
petitions for review and heard argument on                   judgment, holding that Yancy’s open courts
December 7, 2006.                                            argument was based on Yates’s continuous
                                                             incapacity since the date of surgery, that this
C. Statute of Limitations                                    argument presented an affirmative defense to the
1. Yancy v. United Surgical Partners Int’l, Inc.,            statute of limitations, that Yancy thus had the
170 S.W.3d 185 (Tex. App.—Dallas 2005), pet.                 burden to raise a fact issue as to Yates’s
granted, 50 Tex. Sup. Ct. J. 65 (October 30, 2006)           continuous incapacity, that Yancy had failed in
[05-0925].                                                   this burden because of substantive defects in the
      The principal issues presented in this case are        affidavits, and that those substantive defects were
whether the statute of limitations for medical               properly before the court despite the fact that the
malpractice claims, when applied to bar the claims           trial court had not ruled on the objections.
of a mentally incapacitated claimant, violated the                 The Supreme Court granted Yancy’s petition
open courts provision of the state constitution;             for review and will hear argument on February 14,
whether the court of appeals erroneously placed              2007.
the burden to provide competent evidence as to
that claimant’s incapacity and thus to raise a fact
issue as to the applicability of the open-courts
challenge on the guardian plaintiff instead of the



                                                        52
Supreme Court Update
January 1, 2006 – December 31, 2006

XIX. MUNICIPAL LAW                                          a city cannot be estopped from exercising its
A. Estoppel                                                 governmental functions, examined its prior
1. City of White Settlement v. Super Wash,                  decision in City of Hutchins v. Prasifka, 450
Inc., 198 S.W.3d 770 (Tex. March 3, 2006) [04-              S.W.2d 829 (Tex. 1970). In Prasifka, the Court
0340].                                                      held that a city may be estopped when “justice
      In this case, the Supreme Court held that a           requires” and there is no interference with its
city could not be estopped from enforcing a                 governmental functions. In this case, the Court
zoning ordinance.                                           held that Super Wash had not presented an
      In 1986, the City of White Settlement passed          exceptional case in which justice required
a zoning ordinance that changed the zoning on a             estoppel because there was no evidence Super
piece of property from multi-family housing to              Wash needed an additional exit to continue
commercial use, conditioned on the construction             operating its business and the record indicated that
of a privacy fence along one side of the property           the City acted quickly to inform Super Wash of
to shield the abutting residential neighborhood             the fence requirement once it learned of it.
from the commercial development. The City’s                 Additionally, the Court held that estopping the
zoning map was changed to reflect the rezoning,             City from enforcing the fence requirement would
but the fence requirement was omitted from the              impair its ability to perform its governmental
map by mistake. In 2000, Super Wash, who had                functions, because it would preclude the City from
no knowledge of the fence requirement, purchased            using its chosen method of regulating traffic in
the rezoned property and submitted a building               and around Super Wash’s property. Accordingly,
plan to the City for approval. The plan called for          the Court reversed the court of appeals’ judgment
an exit along the side of the property that required        on the estoppel question and rendered judgment
the privacy fence. Because the City’s zoning map            for the City.
did not reflect the fence requirement, the City
approved Super Wash’s plan and issued a building            XX. NEGLIGENCE
permit. After Super Wash’s construction was                 A. Duty to Warn
forty-five percent complete, neighborhood                   1. Kroger Co. v. Elwood, 197 S.W.3d 793 (Tex.
residents complained and brought the fence                  May 12, 2006) [04-1133].
requirement to the City’s attention. The City then               In this negligence case, the Supreme Court
informed Super Wash that, as required by the                held that Kroger owed no duty to warn its
ordinance, it had to build a continuous privacy             employee of a known danger, and accordingly, the
fence along the side of the property on which it            Court rendered judgment for Kroger.
had planned to place one of its two exits. Under                 Billy Elwood worked as a courtesy clerk at a
protest, Super Wash built the fence and completed           Kroger grocery store. While loading groceries
construction.                                               into a customer’s car, which was parked on a
      Super Wash sued the City, challenging the             sloped area of the store’s parking lot, Elwood
validity of the ordinance and arguing that the City         used one foot to prevent the cart from rolling
should be estopped from enforcing it. The trial             while leaning his hand on the doorjamb. Elwood
court granted summary judgment for the City. On             sustained injuries when the customer closed the
appeal, the court of appeals affirmed the trial             car door on his hand. A jury found that Kroger’s
court’s judgment in part, but reversed and                  negligence caused Elwood’s injuries, and the trial
remanded on the estoppel question, holding that             court awarded Elwood damages. The court of
there were issues of material fact regarding                appeals affirmed.
whether this was the type of case in which justice               The Supreme Court reversed and rendered
required estoppel and whether the City’s                    judgment for Kroger, holding that Kroger had no
governmental functions would be impaired if it              duty to warn Elwood of a danger known to all, nor
was estopped.                                               did it have an obligation to provide training or
      The Supreme Court held that the City could            equipment to dissuade employees from using a
not be estopped from enforcing the zoning                   vehicle doorjamb for leverage.
ordinance. The Court, after noting that, generally,


                                                       53
Supreme Court Update
January 1, 2006 – December 31, 2006

B. Independent Contractors                                         After suffering extreme lower abdominal
1. Cent. Ready Mix Concrete Co. v. Islas, 2005               pains, David Axelrad went to his physician, Dr.
WL 428410 (Tex. App.—Corpus Christi 2005),                   Richard Jackson. Diagnostic tests indicated a
pet. granted, 50 Tex. Sup. Ct. J. 218 (December              viral illness, so Jackson directed Axelrad to take
18, 2006) [05-0940].                                         a laxative and two enemas. At the time of his
      In this suit for personal injuries, Luciano            advice, Jackson had not received a blood test that
Islas, an employee of Eugene Taylor, was injured             would later reveal an elevated white blood cell
while exiting a concrete ready mix drum he had               count indicative of infection. The first enema
been cleaning with a coworker. The injury                    caused Axelrad to vomit and experience
occurred on Taylor’s premises, but the truck was             excruciating pain. Axelrad’s wife took him to the
owned by Central Ready Mix. Central Ready Mix                emergency room where it was discovered that
had hired Taylor to clean the drum; Taylor had in            Axelrad suffered from diverticulitis and a
turn employed Islas.                                         perforated colon.
      At trial, the jury allocated 70% of the                      Axelrad sued Jackson for malpractice in
negligence to Taylor, 20% to Central Ready Mix,              failing to diagnose the diverticulitis and
and 10% to Islas, awarding $290,700. Central                 negligently prescribing enemas. Jackson sought
Ready Mix then moved to disregard the jury                   a comparative fault jury question on grounds that
findings and for a judgment notwithstanding the              Axelrad failed to disclose that his pain was severe
verdict. The trial court granted Central Ready               and originated in the lower left quadrant of his
Mix’s motions in regard to Central Ready Mix’s               abdomen and that in 1994 he had undergone a
portion of liability and entered judgment for                protoscopy that resulted in the recommendation to
Central Ready Mix. Islas appealed the take-                  have a colonoscopy in two years. The trial court
nothing judgment in reference to Central Ready               submitted Axelrad’s comparative fault to the jury,
Mix. The court of appeals reversed the trial                 which found him 51% responsible, resulting in a
court’s judgment, holding that the jury verdict              take-nothing judgment. The court of appeals
should stand and Cement Ready Mix is 20% liable              reversed, holding that Axelrad’s fault should not
for the injuries to Islas. Islas asserts that Central        have been submitted because there was no
Ready Mix, as a contracting party, owes him                  evidence of a query designed to elicit the
certain duties as the employee of an independent             information Axelrad allegedly failed to
contractor.     Ready Mix argues that as a                   communicate, and therefore, no evidence to
contracting party, it does not owe duties to the             support Jackson’s contention that Axelrad had a
employees of an independent contractor. The                  duty to volunteer the information.
Supreme Court granted Central Ready Mix’s                          The Supreme Court granted Jackson’s
petition for review and will hear oral argument on           petition for review and heard argument on
March 21, 2007.                                              February 16, 2006.

C. Medical Malpractice                                       2. Jernigan v. Langley, 195 S.W.3d 91 (Tex. June
1. Jackson v. Axelrad, 142 S.W.3d 418 (Tex.                  9, 2006) [05-0299].
App.—Houston[14th Dist.] 2004), pet. granted, 49                  The issue in this medical malpractice case
Tex. Sup. Ct. J. 14 (January 23, 2006) [04-0923].            was whether the plaintiff’s expert reports met the
     The principal issues in this medical                    specificity requirements of section 13.01 of the
malpractice case are whether and to what extent a            Medical Liability and Insurance Improvement Act
patient has a duty to disclose information                   (the MLIIA).
concerning medical history to a treating physician,               In September 1998, Marie Langley brought
and, if there is such a duty, whether the                    suit alleging that the death of her 46-year-old
sufficiency of evidence needed to submit the                 husband, John Langley, resulted from the
patient’s name in a comparative fault jury question          negligence of Providence Hospital in Waco and
should be measured against the duty as defined in            several physicians, including Dr. Floyd Jernigan.
the unobjected-to jury charge or as determined by            The trial court dismissed Langley’s suit against
law.                                                         Dr. Jernigan for failure to provide an expert report


                                                        54
Supreme Court Update
January 1, 2006 – December 31, 2006

that satisfied the requirements of section 13.01 of         because he was not qualified as an expert, and that
the MLIIA. The court of appeals reversed the trial          without his testimony, Downing had no evidence
court’s dismissal.                                          to support her claims. Larson asserted that Bell
      The Supreme Court of Texas found that                 was not qualified as an expert because he had not
Langley’s expert reports did not discuss the                repaired an orbital blow-out fracture in fifteen
applicable standard of care, the alleged breach of          years, and that he had never used the type of mesh
the standard, and how that breach caused the                implant that Larson used. Downing responded
injury complained of with “sufficient specificity to        that Bell had been practicing medicine for twenty
inform the defendant of the conduct the plaintiff           seven years, was licensed in four states and one
has called into question and to provide a basis for         foreign country, was board certified in plastic and
the trial court to conclude that the claims have            reconstructive surgery, had been chief of plastic
merit.” See Am. Transitional Care Ctrs. of Tex.,            surgery at two medical centers, had taught at
Inc. v. Palacios, 46 S.W.3d 873, 877–78 (Tex.               Tulane medical school as an assistant clinical
2001). The Court noted that of Langley’s two                professor in plastic surgery until about a year
timely filed expert reports, one report made no             before Downing’s surgery, and was currently
mention of Dr. Jernigan and the other report                actively practicing plastic surgery in Arizona.
mentioned Dr. Jernigan in only a single sentence:           Bell explained that he had not performed orbital
“At 4:30 p.m. [John Langley’s] case was                     blow-out repair for many years because younger
discussed with Dr. Jernigan and at 4:50 p.m. a              plastic surgeons tend to handle emergencies like
lactulose enema was ordered.” The Court                     facial fractures, and that like many others, he
determined that this single reference was not               moved from reconstructive surgery into cosmetic
sufficient to alert Dr. Jernigan as to how he               surgery. After a hearing, the trial court granted
breached the applicable standard of care. Because           summary judgment in favor of Larson.
Langley’s expert reports failed to adequately                     A divided court of appeals reversed,
address at least one of the three specifically              concluding that Dr. Bell was qualified according
enumerated requirements of section 13.01(r)(6),             to the statutory requirements for expert testimony
the Court found that the trial court did not abuse          in medical malpractice cases then in effect, article
its discretion in dismissing Langley’s claims               4590i of the Revised Civil Statutes, and that the
against Dr. Jernigan. See Palacios, 46 S.W.3d at            trial court had abused its discretion in excluding
879. Thus, the Court reversed the judgment of the           his testimony. The Supreme Court reversed the
court of appeals and dismissed Langley’s claims             court of appeals’ judgment and affirmed the
against Dr. Jernigan with prejudice.                        judgment of the trial court, finding that the trial
                                                            court had not abused its discretion. The Court
3. Larson v. Downing, 197 S.W.3d 303 (Tex.                  reasoned that the decision to exclude Bell’s
June 12, 2006) [05-0155].                                   testimony was a close call and that close calls
      In this case, the Court considered whether the        must go to the trial court. The Court further
trial court abused its discretion when it excluded          determined that the trial court did not act without
the plaintiff’s medical expert because it had been          reference to guiding rules and was well within its
fifteen years since he had performed surgery like           discretion to conclude based on the statute that
that performed by the defendant. Dr. Mark Larson            Bell was too far removed from practicing that type
operated on Mary Martha Downing to repair a left            of surgery and even from teaching.
orbital blow-out fracture. He performed a second
surgery to release an entrapped muscle in her left          4. St. Luke’s Episcopal Hosp. v. Marks,
eye. Downing sued Larson, claiming that because             193 S.W.3d 575 (Tex. May 5, 2006) [05-0693].
of his negligence she required a third surgery to                The principal issue in this case was whether
release the trapped muscle. Downing filed an                a hospital inpatient’s claim regarding injuries
expert report by Dr. Martin Bell, her only expert,          incurred in a fall from a hospital bed constituted
who was later deposed.                                      a health care liability claim under section 13.01 of
      Larson moved for summary judgment on the              the Medical Liability and Insurance Improvement
basis that Bell’s testimony should be excluded              Act (the MLIIA).


                                                       55
Supreme Court Update
January 1, 2006 – December 31, 2006

      On March 17, 2000, Irving Marks underwent              D. Premises Liability
surgery to implant an intrathecal morphine pump              1.      Brookshire Grocery Co. v. Taylor,
catheter in his spinal area at St. Luke’s Episcopal             S.W.3d , 50 Tex. Sup. Ct. J. 170 (December
Hospital. While recovering as a surgical inpatient           1, 2006) [03-0408].
at St. Luke’s and receiving morphine treatment,                    Taylor sued Brookshire Grocery Co. for
Marks allegedly attempted to rise from his bed late          injuries suffered after she slipped on a piece of
one evening, but fell when the bed’s footboard,              partially melted ice on the tile floor near a self-
which he was using to push himself up, dislodged             serve ice dispenser in one of Brookshire’s stores.
from the bed and fell to the floor. Marks brought            The trial court denied Brookshire’s summary
suit against St. Luke’s, alleging in his original            judgment motion, granted partial summary
petition that St. Luke’s breached its duty of                judgment for Taylor on premises liability, and
ordinary care owed to Marks by: (a) failing to               awarded Taylor damages found by the jury. The
properly train and supervise its agents, employees,          court of appeals affirmed. The Supreme Court,
servants, and nursing staff when caring for him;             without hearing oral argument, reversed and
(b) failing to provide him with the assistance he            rendered judgment for Brookshire.
required for daily living activities; (c) failing to               The Court held that there was no evidence
provide him a safe environment in which to                   that the dispenser was set up in such a way as to
receive treatment and recover; and (d) providing             constitute an unreasonably dangerous condition.
him with a hospital bed that had been negligently            Although one employee testified that there could
attached and assembled by the hospital’s                     have been more floor mats around the ice
employees, agents, servants, or nursing staff.               dispenser, the mere fact that more precautions
Marks did not file an expert report within 180               could have been taken does not show the actual
days of filing his original petition. Marks later            conditions were unreasonably dangerous. The
filed a second amended petition, with additional             only unreasonably dangerous condition was the
acts of negligence, at which time Marks filed two            actual piece of ice on which Taylor slipped, and
expert reports.                                              there was no evidence it had been on the ground
      St. Luke’s moved to dismiss the case, arguing          long enough for the store to have constructive
that Marks’s original petition asserted health care          knowledge of the condition. The Court rendered
claims within the meaning of the MLIIA, and that             judgment that Taylor take nothing.
Marks failed to file an expert report within 180                   Justice Johnson concurred, writing to address
days of filing, as required by the statute. The trial        the confusion created by Corbin v. Safeway, 648
court granted St. Luke’s motion to dismiss. On               S.W.2d 292 (Tex. 1983), a premises defect case
March 3, 2005, the court of appeals reversed and             which somewhat blurred the distinction between
remanded, concluding that Marks’s original                   premises defect and negligent activity, and
petition stated a premises liability claim, not a            seemed to hold that a premises defect case can
health care liability claim, and thus no expert              succeed even absent evidence the premises owner
report was required for the original petition. St.           had actual or constructive knowledge of the
Luke’s petitioned the Texas Supreme Court for                specific condition. Justice Johnson noted that the
review. The Supreme Court granted the petition               parties in this case had not asked the Court to re-
and, without reference to the merits, vacated the            examine Corbin, but felt the Court should do so at
court of appeals’ judgment, and remanded the case            an appropriate time.
to the court of appeals for further consideration in               Justice O’Neill, joined by Justice Medina,
light of the Court’s decision in Diversicare Gen.            dissented. The dissent concluded that, as in
Partner, Inc. v. Rubio, 185 S.W.3d 842 (Tex.                 Corbin, Taylor had presented some evidence that
2005). See TEX . R. APP . P. 59.1, 60.2(f).                  the manner of the display itself created an
                                                             unreasonable risk of injury, since the mat under
                                                             the ice dispenser did not extend beyond one side
                                                             of the dispenser and ice could easily bounce to an
                                                             exposed part of the floor. Knowledge of the
                                                             presence of the particular piece of ice was not


                                                        56
Supreme Court Update
January 1, 2006 – December 31, 2006

required if there was knowledge that the set-up            action against GE, and that the trial court should
itself was unreasonably dangerous; because at              have waited for the evidence to be presented at
least one employee testified that water or ice fell        trial before deciding whether the case fell under
on the exposed tile frequently, there was a                the category of premises defect or negligent
question of fact as to Brookshire’s knowledge.             activity.
                                                                 The Supreme Court granted GE’s petition for
2. Gen. Elec. Co. v. Moritz, 2004 WL 1119481,              review and heard argument on October 17, 2006.
(Tex. App.—Fort Worth 2004), pet. granted, 49
Tex. Sup. Ct. J. 567 (May 8, 2006) [04-0871].              3. LMB, Ltd. v. Moreno, 201 S.W.3d 686 (Tex.
      The issues in this case are: (1) whether an          August 31, 2006) [05-0764].
employer can be liable to an independent                         In this case, the Texas Supreme Court
contractor under a premises defect theory when             reversed a premises liability judgment and
the existing defect is open and obvious; (2) what          rendered judgment in favor of the defendant,
constitutes control over an independent                    LMB.
contractor’s activities in the employer/independent              Ernestina Moreno was struck by a car when
contractor context; (3) whether plaintiffs can             she walked out from between two vehicles in a
claim that their injuries arose out of both a              parking lot owned by LMB, Ltd. Ernestina, who
negligent activity and a premises defect cause of          was suffering from cancer at the time, sustained a
action; and (4) if an independent contractor is            number of injuries in the accident. When she died
injured on a ramp leading up to rented premises,           approximately one year later, her spouse, children,
what constitutes a landlord’s retention of control         and the representative of her estate brought suit
over the ramp for liability purposes?                      against LMB and others. The Morenos alleged
      Arthur Lee Moritz, a truck driver for a              that LMB was negligent in failing to inspect for
trucking company, injured himself when he fell             and correct premises defects which caused the
off an elevated loading ramp leading to GE’s               accident and Ernestina Moreno’s death.
warehouse. The warehouse, leased from Tarrant                    LMB moved for summary judgment on the
County Limited Partnership, was part of a                  ground that there was no evidence it proximately
warehouse complex owned by the Partnership and             caused Ernestina Moreno’s injuries or her death.
managed by Richard Ellis. Moritz hurt himself              TEX . R. CIV . P. 166a(i). In support of their
while loading his truck, which was parked on the           response to the summary judgment motion, the
loading ramp. He was wrapping a cord around the            Morenos attached an affidavit from Dr. Gumaro
supplies to secure them, leaning away from the             Garza, Ernestina Moreno’s treating physician. In
truck to pull tighter, when the cord broke. His            his affidavit, Dr. Garza stated that “[i]n reasonable
momentum caused him to fall backwards off the              medical probability, the death of Ernestina
ramp and break his pelvis, hip, and thumb. The             Moreno resulted from her weakened condition
ramp did not have rails along its sides, which he          caused by the accident in question. Therefore, in
claims would have prevented his fall.                      my opinion, the conduct of [LMB] substantially
      Moritz sued GE, Ellis, and the Partnership,          caused Ernestina Moreno’s injuries and death.”
claiming that he should not have been allowed to                 The Supreme Court held that mere proof that
load his truck on the ramp, and that the ramp              Ernestina Moreno was injured in LMB’s parking
should have been equipped with safety rails. The           lot was not evidence of LMB’s failure to use
trial court granted the defendants’ summary                reasonable care to reduce or eliminate an
judgment motions. The court of appeals reversed,           unreasonably dangerous premises condition. The
holding that there were questions of fact as to            Court therefore concluded that the plaintiffs had
whether the Partnership and Ellis contractually            produced no summary judgment evidence on the
retained the right to control the loading ramp,            issue of proximate cause. Accordingly, it reversed
thereby owing Moritz a duty to make the ramp               the court of appeals’ judgment and rendered
safe. The court of appeals also held that there            judgment that the Morenos take nothing.
were questions of fact as to whether Moritz had
premises defect and negligent activity causes of


                                                      57
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January 1, 2006 – December 31, 2006

4.     Wal-Mart Stores, Inc. v. Spates,                            Flores’s statutory beneficiaries sued Black
186 S.W.3d 566 (Tex. February 24, 2006) [04-                 and Wilhelm, and the jury found that Black and
1046].                                                       Wilhelm had negligently caused Flores’s death
     In Wal-Mart Stores, Inc. v. Reece, the                  and were equally responsible. The trial court
Supreme Court concluded that the mere proximity              rendered judgment on the verdict and held Black
of an employee to a hazard on the floor, without             and Wilhelm jointly and severally liable. Only
evidence of when or how it came to be there, was             Wilhelm appealed, and the court of appeals
legally insufficient to charge a premises owner              affirmed the judgment.
with constructive notice of the hazard. In this per                The Supreme Court reversed, concluding that
curiam opinion, the Court reaffirmed that holding.           Wilhelm did not owe Flores any duty alleged by
     Kathy Spates alleged she tripped on a plastic           the respondents because Black was merely a buyer
six-pack soft-drink ring on the floor of an aisle in         of bees, not Wilhelm’s independent contractor.
a Wal-Mart store, injuring her shoulder. The ring
was three to five feet behind a Wal-Mart                     XXI. OIL AND GAS
employee.      Because Spates also presented                 A. Assignments
evidence that the ring was on the floor for at least         1. Seagull Energy E&P, Inc. v. Eland Energy,
30 to 45 seconds, the court of appeals held that             Inc., 207 S.W.3d 342 (Tex. June 16, 2006) [04-
Spates presented some evidence of constructive               0662].
notice. The Supreme Court reversed the court of                    The question presented in this case is
appeals’ judgment, holding such evidence was not             whether, in the absence of an agreement, a
legally sufficient to establish Wal-Mart had a               working-interest owner remains liable to the
reasonable opportunity to discover the hazard.               operator of an oil and gas lease after it sells its
                                                             working interests and assigns the corresponding
5. Wilhelm v. Flores, 195 S.W.3d 96 (Tex. June               operating agreements to a third party.
9, 2006) [04-0208].                                                Seagull Energy E&P, Inc. is the designated
      In this case, the Supreme Court concluded              operator of two offshore oil and gas leases in
that a seller of hived bees does not owe a                   which Eland Energy, Inc. acquired working
commercial buyer’s employees or agents any duty              interests.      The corresponding operating
to warn them of the dangers associated with bee              agreements, which Eland assumed, require for the
stings or to protect them from being stung.                  working interest owner to reimburse Seagull for a
      Curtis Wilhelm, a hobbyist beekeeper, sold             share of operating expenses proportional to its
his beehives to John Black, a commercial                     interests. Eland later sold its interests to Nor-Tex
beekeeper. The next day, Black brought two men               Gas Corp., which assumed Eland’s obligations
to help load the hives onto a trailer and take them          and liabilities to Seagull. Nor-Tex subsequently
away. One of the men was Black’s employee, and               defaulted. Seagull sued Eland for breach of
the other, Santos Flores, Sr., was a friend recruited        contract, seeking reimbursement for expenses
for the job. Black knew of the danger of an                  incurred after the assignment. Both Seagull and
allergic reaction to bee stings, and provided                Eland moved for summary judgment. The trial
protective suits, hats, veils, and gloves for himself        court granted Seagull’s partial summary judgment
and his men. Wilhelm accompanied them, but did               motion and denied Eland’s motion. In its
not assist in the work, and there was no evidence            summary judgment, the trial court concluded that
that he controlled Black’s work or had the right to          Nor-Tex had breached the operating agreement by
do so.                                                       failing to pay its share of the operating expenses
      While the hives were being loaded, Flores              and that Eland also remained liable for these
walked away from the area and disappeared into               expenses, which it incurred under the operating
some bushes. He emerged a few minutes later                  agreement. Damages were tried to the court,
with his veil open, yelling for help, and                    which found Eland and Nor-Tex jointly and
complaining of bee stings. Within minutes, Flores            severally liable to Seagull in the amount of
suffered an allergic reaction and died.                      $268,418.90, plus interest and attorney’s fees.
                                                             The court of appeals reversed the trial court’s


                                                        58
Supreme Court Update
January 1, 2006 – December 31, 2006

judgment to the extent it awarded damages against             unanticipated and significant costs. Emerald then
Eland, concluding that the operating agreement                sued Exxon, alleging that Exxon had sworn to
contained no provision imposing continuing                    false statements in its Railroad Commission
liability on Eland after it had assigned its interests        plugging filings and had improperly plugged the
and obligations to Nor-Tex.                                   wells, including introducing environmental
      The Supreme Court reversed the court of                 contaminants, without documenting all of its
appeals’ judgment, concluding that, despite selling           activities in Commission Reports, thereby
its working interest, Eland remains liable under              attempting to inhibit or eliminate any possibility
the operating agreement, unless released by the               of future redevelopment. Exxon maintains that
operator or the terms of the agreement. Eland did             Emerald, as a subsequent lessee, cannot recover
not argue that Seagull expressly released it from             for injuries to the property prior to ownership.
its obligations but rather focused on the operating           The Supreme Court granted the petition for
agreement’s terms as effectuating an express                  review and will hear oral argument on February
release. The operating agreements, however, do                13, 2007.
not expressly release a working interest owner
from its obligations upon assignment. The                     C. Royalty Payments
provisions that Eland relied on to argue release              1. Dominion Okla. Tex. Exploration & Prod., Inc.
connected its reimbursement obligations to its                v. Castle Tex. Oil & Gas L.P., 2005 WL 1797065
participating interest. However, these provisions             (Tex. App.—Corpus Christi 2005), pet granted,
do not mention the subject of release or the                  49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-
consequences that are to follow the assignment of             0739].
a working interest and these subjects are                           The principal issue in this oil and gas case is
mentioned elsewhere. The “Withdrawal” and the                 whether Texas should abandon the distinction
“Assignment of Interest” sections address this                between legal and factual mistakes in favor of
subject but do not specifically deal with the                 refunding any mistaken royalty overpayments
present circumstances. Therefore, the operating               made in good faith.
agreement simply does not explain the                               Dominion Oklahoma Texas Exploration &
consequence of an assignment of a working                     Production, Inc. purchased a producing oil and gas
interest to a third party. Thus, the assignment               property from a bankruptcy estate and continued
does not operate as an express release of Eland’s             its predecessor’s royalty payments to Castle Texas
obligations.                                                  Oil & Gas L.P., Delta Petroleum Corporation, and
                                                              BWAB L.L.C. Thereafter, Dominion discovered
B. Damages from a Previous Lessee                             that its predecessor had been overpaying certain
1. Exxon Corp. v. Emerald Oil & Gas Co., 2005                 royalties to Castle and immediately stopped
WL 167051 (Tex. App.—Corpus Christi 2005),                    making overpayments. Additionally, the company
pet. granted, 50 Tex. Sup. Ct. J. 64 (October 30,             began taking an extra deduction from Castle’s
2006) [05-0729].                                              revenue to recoup prior excess payments. A
      This is an action by an oil and gas lessee to           dispute with Castle led Dominion to file a
recover damages from a previous lessee. Exxon                 declaratory judgment action, seeking a ruling that
acquired mineral leases from Humble Oil &                     its reduced royalty calculation was correct and
Refining Company for several thousand acres of                that it be awarded recovery of overpayments. The
land in Refugio County, Texas. In 1991, the                   district court granted Dominion summary
leases terminated. Pace West Production, Ltd.                 judgment on both issues.
began leasing a portion of the acreage in May                       On appeal, the court of appeals modified the
1993. Pace West later assigned the lease to                   district court’s judgment by deleting Castle’s
Emerald. The lease contained no provisions                    obligation to refund any overpayments to the
related to the conveyance of causes of action for             company. The court held that Dominion had
injuries to the property prior to the date of the             made a mistake of law rather than fact and thus
lease. Emerald attempted to re-enter several of the           was not entitled to a refund. The trial court’s
wells and encountered problems resulting in                   judgment was affirmed as modified.


                                                         59
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January 1, 2006 – December 31, 2006

      The Supreme Court granted Dominion’s                    XXII.       PROBATE:          WILLS, TRUSTS,
petition for review and heard argument on                     ESTATES, AND GUARDIANSHIPS
November 15, 2006.                                            A. Will Construction
                                                              1.      In re the Estate of Marvin Nash,
D. Subsurface Trespass                                        164 S.W.3d 856 (Tex. App.—Beaumont 2005),
1. Coastal Oil & Gas Corp. v. Garza Energy                    pet. granted, 49 Tex. Sup. Ct. J. 509 (April 24,
Trust, 166 S.W.3d 301 (Tex. App.—Corpus                       2006) [05-0538].
Christi 2005), pet. granted, 49 Tex. Sup. Ct. J. 509                Marvin Nash left the residue of his estate to
(April 24, 2006) [05-0466].                                   his wife provided that she survived him by thirty
      The principal issue in this case is whether             days. His will offered the following alternate
Texas law recognizes a cause of action for                    disposition: “In the event that my wife and I die at
subsurface trespass when hydraulic fracture                   the same time or in the event that she does not
procedures are performed on a well cross                      survive me by thirty (30) days or in the event that
neighboring lease lines.                                      my wife should predecease me, I give [the residue
      Coastal Oil and Gas Corporation performed               to] my beloved step-child, SHELLY RENE
a subsurface hydraulic fracturing procedure on a              TEDDER.” Nash divorced his wife and then died
well located on Share 12, which resulted in                   without changing his will.             Under such
subsurface fractures under Share 13. Garza                    circumstances, Section 69(a) of the Texas Probate
Energy Trust, the royalty interest owner of Share             Code instructs: “all provisions in the will in favor
13, brought an action against Coastal alleging that           of the testator’s former spouse . . . must be read as
Coastal’s subsurface trespass into Share 13                   if the former spouse failed to survive the testator,
allowed Coastal to drain Share 13 without paying              and shall be null and void and of no effect unless
Garza royalties. It also claimed that Coastal                 the will expressly provides otherwise.” TEX .
breached the duty of good faith pooling, as well as           PROB . CODE § 69(a).
the implied covenants to market, develop the                        Reading the will as though the former spouse
leasehold, and protect against drainage. Following            failed to survive, the trial court held Tedder took
a trial, the jury returned a verdict in favor of Garza        the residue under the alternate disposition. The
on each of its claims except breach of the implied            court of appeals reversed, holding that Section
covenant to market. The jury awarded actual                   69(a) of the Texas Probate Code did not apply to
damages of $1 million in connection with its                  the entire will and the contingency under which
trespass finding. The jury found that Coastal had             Tedder would take did not occur, leaving the
acted with malice and awarded $10 million in                  estate to pass intestate. See TEX . PROB . CODE §
punitive damages. The jury also found that                    69(a). The Supreme Court granted Tedder’s
Coastal had committed “felony theft,” which                   petition for review and heard argument on
rendered inapplicable the statutory cap on punitive           September 28, 2006.
damages. The trial court reduced the actual
damage award to $543,776. The court of appeals                XXIII. PROCEDURE—APPELLATE
held that Texas law recognized a cause of action              A. Dismissal
for subsurface trespass by hydraulic fracture and             1. Higgins v. Randall County Sheriff’s Office,
affirmed the trial court’s judgment for actual                193 S.W.3d 898 (Tex. May 26, 2006) [05-0095].
damages.                                                            In this case, the Supreme Court held that a
      The Supreme Court granted Coastal’s                     court of appeals cannot dismiss an appeal for
petition for review and heard argument on                     failure to timely file an affidavit of indigence
September 28, 2006.                                           without giving the appellant an opportunity to
                                                              cure the defect.
                                                                    After the trial court dismissed Lawrence
                                                              Higgins’s claims for want of prosecution, Higgins
                                                              filed a timely notice of appeal, but did not pay a
                                                              filing fee or file an affidavit of indigence with the
                                                              court of appeals. Four months later, the court of


                                                         60
Supreme Court Update
January 1, 2006 – December 31, 2006

appeals notified him that unless he paid the $125           request, he appealed. Immediately thereafter, the
filing fee within ten days, his appeal would be             clerk of the court of appeals sent Peña a letter
dismissed. Nine days later, Higgins filed an                indicating his notice of appeal failed to include
affidavit of indigence. The court of appeals                the name and address of the Texas Attorney
dismissed the appeal anyway, holding that the               General on the certificate of service attached to
affidavit was untimely, unaccompanied by a                  the notice of appeal, information specifically
motion to extend time, and in any event facially            required by Rule 25.1(e) of the Texas Rules of
insufficient.                                               Appellate Procedure. The letter further stated that
      The Supreme Court reversed, holding that              Peña’s appeal would be referred to the court of
because Higgins properly invoked the jurisdiction           appeals for dismissal unless Peña filed a proper
of the court of appeals by filing a notice of appeal        notice of appeal before Monday, May 9, 2005.
in accordance with Texas Rule of Appellate                  When Peña failed to respond to the letter, the
Procedure 25.1(b),“[a]s with any other formal               court dismissed his appeal.
defect or irregularity in appellate procedure, the                The Supreme Court observed that Rule
court of appeals could dismiss the appeal for               25.1(e) makes no mention of a certificate of
noncompliance only after allowing Higgins a                 service. Instead, the Court noted, Rule 25.1(e)
reasonable time to correct this defect” under               merely requires actual service on all parties to the
Texas Rule of Appellate Procedure 44.3. The                 trial court’s judgment. Although Peña’s failure to
Court further held that nothing in the affidavit            prepare an adequate certificate of service violated
showed that Higgins could pay appellate costs and           Rule 9.5(d) of the Rules of Appellate Procedure,
any defects in the affidavit of indigence could not         the Court explained, the appellate clerk deprived
be grounds for dismissal unless the court of                Peña of the opportunity to correct his mistake by
appeals allowed Higgins an opportunity to amend.            mis-identifying the defect in the notice of appeal.
Because the affidavit “discharged the filing fee            As such, the Court reversed and remanded,
requirement unless a contest to it was sustained,           holding the court of appeals’s dismissal could not
Higgins corrected the defect within the allotted            be sustained on the ground that Peña’s notice
time.”                                                      violated Rule 25.1(e).

2. Peña v. McDowell, 201 S.W.3d 665 (Tex.                   B. Effect of Non-Suit
August 31, 2006) [05-0546].                                 1. The Univ. of Tex. Med. Branch at Galveston v.
      William Peña, an inmate, filed suit against           Estate of Blackmon ex rel. Shultz, 195 S.W.3d 98
t h e T e x a s Departmen t o f C r i mi n a l              (Tex. June 12, 2006) [05-0594].
Justice-Institutional Division as well as several                 In this case, the Supreme Court held that the
other individual defendants, including the Office           appeal should be dismissed for want of
of the Texas Attorney General. The trial court              jurisdiction. Darla Blackmon died of pneumonia
dismissed Peña’s suit with prejudice as “frivolous          while she was incarcerated at a substance abuse
or malicious.” The court of appeals affirmed the            facility operated by the University of Texas
dismissal, but reformed the trial court’s judgment          Medical Branch at Galveston (UTMB). Her
to read “without prejudice,” based on its                   daughter, Sheila Shultz, brought a negligence
assumption that the trial court dismissed Peña’s            claim seeking wrongful death and survival
suit for failure to comply with section 14.004 of           damages. UTMB filed a plea to the jurisdiction,
the Civil Practices and Remedies Code, which                which the trial court denied. On interlocutory
requires an inmate to list, with particularity, the         appeal, the court of appeals reversed the trial
operative facts of any suit previously filed in             court’s judgment and rendered judgment for
forma pauperis by the inmate.                               UTMB. The court withdrew its judgment,
      Peña then re-filed his suit. The trial court,         however, when it granted Shultz’s motion for
acting sua sponte, again dismissed the case with            rehearing. Shultz then filed a non-suit in the trial
prejudice as frivolous. Peña filed motions for              court and moved the court of appeals to dismiss
reconsideration and for an evidentiary hearing,             the appeal. The court denied Shultz’s motion and
and when the trial court did not rule on either


                                                       61
Supreme Court Update
January 1, 2006 – December 31, 2006

eventually issued a new opinion denying UTMB’s              D. Memorandum Opinions
plea to the jurisdiction.                                   1. Citizens Nat’l Bank in Waxahachie v. Scott,
      The Supreme Court held that Shultz’s nonsuit          195 S.W.3d 94 (Tex. June 9, 2006) [05-0454].
deprived the court of appeals of jurisdiction to                  This case involves a suit over the alleged
issue an order and opinion on rehearing. The                nonpayment of a promissory note. At trial, the
Court reasoned that a non-suit extinguishes a case          jury found that the note had not been paid. The
or controversy at the moment it is filed, before the        court of appeals, in a very brief memorandum,
trial court signs an order dismissing the suit.             reversed on legal sufficiency grounds, entered a
Because the nonsuit rendered the merits of                  finding of payment, but gave no explanation for
UTMB’s plea moot, the Court vacated the court of            its decision.
appeals’ order and dismissed the appeal for want                  While the Supreme Court noted that under
of jurisdiction.                                            Texas Rule of Appellate Procedure 47.4
                                                            memorandum opinions are intended to be brief in
C. Intervention on Appeal                                   scope and “no longer than necessary to advise the
1.      In re Lumbermens Mut. Cas. Co.,                     parties of the court’s decision and the basic
184 S.W.3d 718 (February 3, 2006) [04-0245].                reasons for it,” the Court held that the court of
      The issue in this case was whether the court          appeals’ decision here exceeds what is
of appeals abused its discretion by denying                 permissible by failing to give any reason
Lumbermens Mutual Casualty Company’s motion                 whatsoever for its conclusion that the evidence
to intervene in the appeal pending before that              established a finding of nonpayment. The Court
court. Lumbermens was not a party to the                    went on to say that when a court of appeals
underlying contractual indemnity suit but was the           disturbs the judgment of a trial court, merely
defendant’s excess liability insurer. The trial             saying that the court has reviewed all the evidence
court rendered judgment for the plaintiff for $20.7         and reached a conclusion contrary to that of the
million, and the defendant appealed.                        trier of fact is not enough. Instead, the court
      After Lumbermens had posted a $29 million             should explain, with specificity, why it has
bond for the appeal, the plaintiff and defendant            substituted its judgment for that of the trial court.
entered into a Rule 11 agreement, whereby the               The Court therefore reversed the court of appeals’
defendant agreed not to challenge the trial court’s         judgment and remanded the case to that court for
choice-of-law ruling that Texas law (as opposed to          more detailed consideration.
Louisiana law) law applied. Because that issue
was potentially dispositive of Lumbermens’                  2. Gonzalez v. McAllen Med. Ctr., Inc.,
indemnity obligation, Lumbermens sought to                  195 S.W.3d 680 (Tex. June 9, 2006) [03-0939].
intervene in the appeal to raise the issue itself.                In a memorandum opinion, the Thirteenth
The court of appeals denied Lumbermens’ request,            Court of Appeals overruled plaintiffs’ factual
and Lumbermens sought mandamus relief from                  sufficiency points of error with the following:
the Supreme Court.                                                Considering the record in its entirety,
      The Supreme Court granted mandamus relief.                  we hold that appellants’ factual
It held that under the unusual circumstances                      sufficiency challenge fails because the
presented by the case, Lumbermens was entitled to                 jury’s verdict was not against the great
invoke the virtual-representation doctrine to raise               weight of the evidence.
on appeal the choice-of-law issue its insured               Texas Rule of Appellate Procedure 47.4 requires
abandoned in order to settle uninsured claims in            that a court advise the parties of the “basic
another suit, and that the court of appeals abused          reasons” for its decision. Because the above fails
its discretion in holding otherwise.                        to articulate any reason at all, the Supreme Court
                                                            reversed the judgment and remanded the case to
                                                            the court of appeals. Although courts need not
                                                            rehash the facts and procedural background of the
                                                            case when overruling points of error, at the very
                                                            least, even in a memorandum opinion, a court


                                                       62
Supreme Court Update
January 1, 2006 – December 31, 2006

must focus on the basic reasons “why the law                 court of appeals reduced the award to $16,180,
applied to the facts leads to the court’s decision.”         concluding that the remaining damages were
                                                             barred by limitations. However, the court of
E. Motion for Reconsideration En Banc                        appeals did not reduce the attorney’s fee award.
1.     City of San Antonio v. Hartman,                             The Supreme Court reversed the court of
201 S.W.3d 667 (Tex. August 31, 2006) [05-                   appeals’ judgment and remanded the case to the
0147].                                                       trial court for reconsideration of attorney’s fees.
      The Supreme Court addressed two issues: (1)            The Court held that a review of the original jury
whether the emergency exception to the Texas                 finding as to attorney’s fees could not afford the
Tort Claims Act’s waiver of immunity applies;                Barkers the factual sufficiency review to which
and (2) whether a motion for reconsideration en              they were entitled—a factual sufficiency review
banc qualifies as a “motion for rehearing” that              of a jury finding made in consideration of the
extends the deadline to file a petition for review.          correct damages amount. The Court concluded
Flooding in the City of San Antonio in October               that under such circumstances, the error is
1998 inundated part of Rigsby Avenue. City and               reversible unless the appellate court is reasonably
state employees placed a barricade or barricades             certain that the jury was not significantly
on both sides of the flooding. The decedents                 influenced by the erroneous amount of damages it
drowned when their vehicle was swept away by                 considered. The Court noted that not every
flood waters on Rigsby. Hartman sued the City,               appellate adjustment to the damages will require
alleging that the water on the roadway was a                 reversal of the attorney’s fee award. In this case,
special or premise defect that the City was liable           however, considering both the absolute value of
for under the Texas Tort Claims Act. The City                the difference between the erroneous and correct
filed a plea to the jurisdiction and attached                amounts of damages, and the fact that the correct
supporting evidence, alleging that sovereign                 damages were one-seventh of the erroneous
immunity barred the suit. The trial court denied             damages, the Court was not reasonably certain
the City’s plea to the jurisdiction, and the court of        that the jury was not significantly affected by the
appeals affirmed.                                            error. Accordingly, the trial court’s error was
      The Supreme Court, after hearing oral                  harmful.
argument, held that the City’s petition for review
was timely since motions for reconsideration en              XXIV. PROCEDURE—PRETRIAL
banc qualify as “motions for rehearing” and                  A. Choice of Law
therefore extend the deadline to file a petition for         1. Hardy v. Int’l Interests, L.P., certified question
review. The Court also held the limited waiver of            accepted, 49 Tex. Sup. Ct. J. 681 (June 9, 2006)
governmental immunity did not apply since the                [06-0347].
City was responding to an emergency situation.                     The Fifth Circuit certified the following
As a result, the judgment of the court of appeals            questions to the Supreme Court of Texas: “1. In
was reversed and judgment was rendered for the               an action to recover the deficiency owing on a
City.                                                        note guaranteed by the defendant where the
                                                             guaranty agreement between the original parties is
F. Reduction of Damages on Appeal                            governed by Ohio law and the deed of trust to the
1. Barker v. Eckman, S.W.3d , 50 Tex. Sup.                   property that secured the note is governed by
Ct. J. 175 (Tex. December 1, 2006) [04-0194].                Texas law and the property itself is in Texas, does
      The primary issue in this case was whether a           the law of the guaranty or the law of the deed of
case must be remanded for a new trial as to                  trust govern the calculation of any deficiency? 2.
attorney’s fees when the amount of actual                    If the law of the guaranty governs the calculation
damages is significantly reduced on appeal                   of the deficiency, should an Ohio choice of law
because of trial court error. The Supreme Court              clause in that guaranty be given effect under
held that remand was necessary.                              section 187 of the Restatement (Second) of
      The trial court awarded Eckman $111,983 for            Conflict of Laws where (1) no party is from Ohio,
breach of a bailment contract. On appeal, the                the property that secured the note is in Texas, the


                                                        63
Supreme Court Update
January 1, 2006 – December 31, 2006

note, deed of trust, and guaranty were all executed          B. Contractual Jury Waiver
and delivered in Texas, and Texas’s foreclosure              1.      In re Gen. Elec. Capital Corp.,
law, not Ohio’s, was used to foreclose the                   203 S.W.3d 314, (Tex. September 22, 2006) [05-
underlying property and (2) applying Ohio law                0482].
would prevent application of section 51.003 of the                 In this mandamus proceeding, the Court
Texas Property Code, which provides for a                    considered whether General Electric Capital
deficiency offset?”                                          Corp., who did not receive notice of a jury
       Charles F. Hardy, III, a resident of                  demand, nevertheless waived its contractual right
Oklahoma, was co-owner of a Texas corporation                to a non-jury trial by failing to notice that the case
in the nursing home business, Concierge of                   had been moved to the jury docket. When GECC
Houston, Inc. Concierge purchased a nursing                  finally noticed that the case was no longer on the
home in Houston with a temporary loan for $4.82              non-jury docket, it moved to strike the jury
million from Keybank National Association, an                demand, but the trial court denied the motion.
Ohio-based bank. Concierge issued a promissory               Finding no evidence that the jury-waiver
note to Keybank for the loan amount that was                 provision was invalid or that GECC knowingly
secured by a deed of trust to the property and was           waived its contractual right to a non-jury trial, the
personally guaranteed by Hardy. The promissory               Supreme Court concluded that the trial court had
note, deed of trust, and guaranty were each                  abused its discretion in failing to enforce the
executed and delivered in Texas. The guaranty                provision.
contained an Ohio choice-of-law provision. When                    The Court distinguished Rivercenter
Concierge failed to secure permanent financing,              Associates v. Rivera, 858 S.W.2d 366 (Tex.
Keybank set the nursing home for nonjudicial                 1993), a mandamus case in which it declined to
foreclosure sale. A few days before the sale,                enforce a contractual jury waiver because of the
Concierge filed for Chapter 11 bankruptcy, staying           relator’s lack of diligence in asserting its rights.
the foreclosure. Keybank sold the note and                   Unlike the circumstances in Rivercenter, GECC
associated interests and collateral rights to a Texas        had already asserted its contractual right to a non-
limited partnership, International Interests, which          jury trial when its opponent filed his jury demand
convinced the bankruptcy court to lift the                   and explained its delay in moving to quash the
foreclosure stay and sold the property at a                  demand as a consequence of not being served with
foreclosure sale in Harris County in accordance              notice of that demand. The issue then was not
with Texas law for $1,000,000.                               whether GECC was diligent in asserting its
       International sued Hardy pursuant to the              contractual right in the first place, but rather
guaranty agreement to recover the deficiency of              whether GECC waived its right to a non-jury trial
a p p r o x i ma t e l y $ 3 , 0 9 0 , 4 7 6 . Hardy         by failing to notice the docket change over a ten
counterclaimed, alleging that the property was               month period. In enforcing the contractual jury
sold for less than fair market value, and seeking a          waiver, the Court concluded that GECC’s failure
determination of the fair market value and an                to complain more promptly indicated at most
offset in that amount from any deficiency                    inattention but did not imply that GECC intended
judgment, pursuant to section 51.003 of the Texas            to waive its previously asserted contractual right.
Property Code. The federal district court granted
International’s summary judgment motion and                  C. Discovery
dismissed Hardy’s counterclaim, holding among                1. In re Ford Motor Co., S.W.3d , 50 Tex.
other things that the Ohio choice-of-law provision           Sup. Ct. J. 291 (Tex. December 22, 2006) [05-
was enforceable and thus Ohio law governed the               0696].
deficiency action, which does not provide for a                   As part of wrongful death litigation
deficiency offset. Hardy appealed to the Fifth               stemming from an SUV rollover, relators Ford
Circuit Court of Appeals, which certified the                Motor Co. and Volvo Car Corp. entered into an
question to the Texas Supreme Court. The                     agreed protective order with real parties in
Supreme Court accepted the certified question and            interest, the Marroquins, to maintain the
heard argument on November 14, 2006.                         confidentiality of numerous Volvo documents. In


                                                        64
Supreme Court Update
January 1, 2006 – December 31, 2006

similar litigation in Florida, a trial court clerk          E. Service of Citation
released copies of those documents, despite a               1. City of Tyler v. Beck, 196 S.W.3d 784 (Tex.
similar protective order; these documents were              June 30, 2006) [04-0813].
reported in the media as well as posted on a                      The principal issue in this case was whether
federal government web site. The Texas trial                the trial court abused its discretion by dismissing
court granted the Marroquins’ motion to deem the            the City of Tyler’s challenge of a condemnation
documents nonconfidential under a provision in              award for want of prosecution. The City initiated
the protective order that denied confidentiality for        proceedings to condemn the Becks’ property, for
documents that were released to the government.             which three special commissioners entered an
The court of appeals denied the writ of mandamus.           award. The City, and then the Becks, filed
      The Supreme Court of Texas conditionally              objections to the award and sent copies to
granted the writ of mandamus. It reviewed the               opposing counsel, but neither issued formal
protective order de novo and held that the contract         service of citation on the other as the Property
did not permit disclosure to the government by a            Code requires. The trial court dismissed the case
third party to destroy Ford’s or Volvo’s privilege          for want of prosecution due to lack of service and
of confidentiality. Because the protective order            reinstated the award. The court of appeals
extended to “trade secrets and other confidential           affirmed, holding that conversion of an
research, development and commercial                        administrative condemnation proceeding into a
information,” the Court declined to apply a trade           judicial one, which operates to vacate the
secret analysis to the documents. Finally, the              commissioners’ award, turns upon service of
Court held that the disclosures to the media from           citation, the absence of which in this case
the Florida trial court did not waive Ford’s and            demonstrated a failure to prosecute.
Volvo’s confidentiality.                                          The Supreme Court reversed and remanded
                                                            for further proceedings in the trial court. The
D. Discovery/Production                                     Court found that judicial condemnation
1.     In re Graco Children’s Prods., Inc.,                 proceedings commence when an objection to the
   S.W.3d , 50 Tex. Sup. Ct. J. 87 (Tex. October            award is filed; if service of citation on the
27, 2006) [05-0479].                                        opposing party is not timely secured, the award is
      In this mandamus action, the Court was asked          subject to reinstatement. However, in this case,
to review a trial court’s order compelling                  both parties invoked the judicial process by filing
production of documents in a products liability             objections to the commissioners’ award and each
matter. The documents concerned products                    participated in the judicial proceedings with
involved in a separate, recently settled dispute.           notice of the other’s objections. Although service
The products at issue in that matter did not contain        was not by citation, the parties were already
the same kind of allegedly defective component as           before the court and the court acquired in
those involved in the claims against the relator in         personam jurisdiction over them. Under these
the trial court.                                            circumstances, the Court held that the purposes of
      The Supreme Court, without hearing oral               the formal citation requirement were met and the
argument, conditionally granted the writ of                 trial court erred in dismissing the case.
mandamus and directed the trial court to vacate its
order compelling discovery. The Court held that             F. Statute of Limitations
the request for production of some 20,000                   1. Exxon Corp. v. Emerald Oil & Gas Co.,
documents was impermissibly overbroad, and not              180 S.W.3d 299 (Tex. App.—Corpus Christi
reasonably tailored to the relevant product defect.         2005), pet. granted, 50 Tex. Sup. Ct. J. 151
The Court reiterated an earlier holding that                (December 4, 2006) [05-1076].
evidence about different products and dissimilar                 After several years of leasing land for oil and
accidents is not admissible; it generally distracts         gas production, Exxon terminated its lease and left
attention from the circumstances and occurrence             the property. The royalty owners subsequently
in dispute.                                                 leased the land to Emerald Oil & Gas, which
                                                            encountered obstructions and other difficulties


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when trying to reenter the wellbores. The royalty            agreement.          ACMC filed an answer
owners and Emerald sued Exxon and alleged                    contemporaneously with a motion to transfer
numerous causes of action, including common law              venue, asserting mandatory venue in Culberson
waste, statutory waste, negligent                            County pursuant to section 15.035 of the Texas
misrepresentation, tortious interference, and fraud          Civil Practice and Remedies Code, which applies
based on the filing of false reports with the Texas          to contracts in writing. The motion to transfer
Railroad Commission. After granting summary                  venue, however, listed as movant ACMC’s
judgment in favor of Exxon on some claims, the               president, Robert McCreless, who was not named
trial court rendered judgment on a jury verdict in           a party to the suit. ACMC filed a first amended
the royalty owners’ favor, but awarded Emerald               motion to transfer venue correctly naming itself as
nothing. The court of appeals affirmed the royalty           movant, but still relying on section 15.035.
owners’ verdict but reversed and remanded for                ACMC filed a second amended motion to transfer
Emerald’s fraud, negligent misrepresentation, and            venue, alleging mandatory venue in Culberson
tortious interference claims.                                County pursuant to section 15.011, which applies
      Exxon argues that almost all of the royalty            to actions for recovery of real property. The trial
owners’ and Emerald’s claims are barred by the               court denied ACMC’s request to transfer venue
statute of limitations, and that neither the                 without specifying the grounds. The court of
discovery rule nor fraudulent concealment tolled             appeals denied ACMC’s petition for a writ of
the limitations period. Exxon further argues that            mandamus without a written opinion.
fraudulent inducement cannot be shown in this                      With regard to jurisdiction, the Supreme
case. The Supreme Court granted Exxon’s                      Court held that the record clearly indicated that
petition for review and will hear oral argument on           the trial court’s order denying ACMC’s motion to
February 13, 2007.                                           transfer venue was a decision on the merits, and
                                                             thus mandamus jurisdiction was proper under
G. Venue                                                     section 15.0642 of the Civil Practice and
1. In re Applied Chem. Magnesias Corp.,                      Remedies Code.
206 S.W.3d 114 (Tex. September 5, 2006)                            The Supreme Court granted ACMC’s writ of
[04-1119].                                                   mandamus, and held that a suit seeking
      In this case, the Supreme Court considered             declaration of “rights, status and legal relations”
(1) whether a party may file a writ of mandamus              under a letter agreement may involve an interest
pursuant to section 15.0642 of the Texas Civil               in real property. In so holding, the Court
Practice and Remedies Code when the trial court              distinguished Smith v. Hall, 219 S.W.2d 441 (Tex.
did not explain its denial of the motion to transfer         1949), which stands for the proposition that “a
venue and that denial could have been based on               suit for specific performance of a contract to
waiver; and (2) whether a declaratory judgment               convey an interest in land, or for damages for
action seeking a declaration of rights under a               breach of such contract, does not come under the
contract that provides for the conveyance of a               provisions of the venue statutes relating to suits
mineral lease constitutes an action for recovery of          for recovery of lands or damages thereto,” due to
real property subject to the mandatory venue                 the fact that TAA sought only declaratory relief,
provision of section 15.011 of the Texas Civil               not specific performance. The Court also noted
Practice and Remedies Code.                                  that Smith concerned article 1995 of Vernon’s
      Texas Architectural Aggregate, Inc. (TAA),             Texas Civil Statutes, a repealed predecessor to
and Applied Chemical Magnesias Corp. (ACMC),                 section 15.011. The Court further reasoned that,
executed a letter of agreement for the conveyance            with regard to real property suits, declaratory
to ACMC of mineral leases located in Culberson               judgment actions should not necessarily give rise
County. After a dispute over whether certain                 to special distinction. In this case, the Court noted
conditions precedent to conveyance had been                  that TAA used the declaratory judgment action as
performed, TAA filed a declaratory judgment                  an indirect means of quieting title to the mineral
action in San Saba County, seeking a declaration             estate.
of the parties’ rights and responsibilities under the


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2. In re Team Rocket, 2006 WL 1071213 (Tex.                 rather than current counsel, and therefore did not
App.—Houston [14th Dist.] 2006), argument                   extend the appellate deadline.
granted on pet. for writ of mandamus, 50 Tex.                    The Supreme Court disagreed. Noting that it
Sup. Ct. J. 151 (December 4, 2006) [06-0414].               has “repeatedly stressed that procedural rules
       The Creekmores filed a wrongful death suit           should be construed and applied so that the right
against relators Team Rocket, MLF Airframes,                of appeal is not unnecessarily lost to
and Mark L. Frederick (collectively “Team                   technicalities,” the Court held that the motion to
Rocket”) in Harris County. The trial court granted          reinstate was properly verified “because it was
Team Rocket’s motion to transfer venue to                   supported by the affidavit of Guest’s attorney for
Williamson County; the Creekmores subsequently              much of the time the case was pending, who was
nonsuited and then refiled in Fort Bend County.             aware of the facts regarding its prosecution.”
Team Rocket moved to have the Fort Bend County              According to the Court, holding otherwise would
trial judge enforce the original venue order, but he        deprive Guest of the best available evidence,
refused. The court of appeals denied mandamus               which is a result not required by Rule 165a.
relief. The Supreme Court granted argument on                    The Court also held that the fact that Guest’s
the petition for mandamus to determine whether a            former attorney had ceased his representation
party may voluntarily nonsuit and then refile a             almost two years before the motion to dismiss and
cause of action in a different county following an          therefore could not account for any lack of
order to transfer venue. The Court will hear oral           activity during that time may go to the merits of
argument on February 15, 2007.                              the motion to reinstate, but does not deprive the
                                                            court of jurisdiction. Accordingly, the Supreme
H. Verification of Motions                                  Court reversed and remanded to the court of
1. Guest v. Dixon, 195 S.W.3d 687 (Tex. June 16,            appeals for consideration of the other arguments
2006) [04-0128].                                            raised by the appeal.
      In this case, the Supreme Court considered
whether a motion to reinstate a case supported by           XXV. PROCEDURE—TRIAL AND POST-
the affidavit of the movant’s former attorney was           TRIAL
properly verified in accordance with Rule 165a(3)           A. Bills of Review
of the Texas Rules of Civil Procedure, and                  1. Cary v. Alford, 203 S.W.3d 837 (Tex.
therefore extended the deadline for appeal. The             September 22, 2006) [05-1018].
Court concluded that it was properly verified.                    In this case, the Supreme Court considered
      James and Anita Guest sued Austin Dixon,              whether a trial court properly set aside a default
M.D., for medical negligence. Almost seven years            judgment on a bill of review. Specifically, the
later, and five years after James died, Dixon               Court addressed whether a defendant’s affidavit
moved to dismiss the case for want of prosecution.          was sufficient to establish that his failure to
Guest responded to the motion five months later,            answer was an accident rather than conscious
and after a hearing, the trial court granted Dixon’s        indifference. Because the Court recently clarified
motion. Guest filed a motion to reinstate the case          the standard of review when service papers are
supported by an affidavit of an attorney who had            lost, the Court vacated the court of appeals’
served as Guest’s co-counsel for most of the case,          judgment and remanded the case to that court to
but had departed the firm before the case was               reconsider in light of the recent decision.
dismissed. The affidavit discussed the history of
the case’s prosecution based on the lawyer’s                2. Ross v. Nat’l Ctr. for the Employment of the
personal knowledge. The trial court denied the              Disabled, 197 S.W.3d 795 (Tex. June 16, 2006)
motion, and the Guests filed a notice of appeal.            [05-1082].
      A divided court of appeals dismissed the                    Ross, the petitioner here, filed a bill of
appeal for want of jurisdiction holding that the            review to set aside a $10 million default judgment
motion to reinstate was not properly verified under         obtained against him without service. The trial
TEX . R. CIV . P. 165a(3) because it was supported          court denied the bill of review because of the
by an affidavit from the Guests’ former counsel             petitioner’s “unclean hands,” based in part on his


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January 1, 2006 – December 31, 2006

failure to comply with post-judgment discovery in            petitioner was never asked whether she
the underlying defaulted case. The court of                  understood or consented to it as a whole, and no
appeals affirmed, holding that when Ross was                 other evidence was admitted. Respondent moved
informed of the default judgment entered against             for a final decree based on the agreement, and the
him, he had a duty to file a motion for a new trial,         trial court rendered a judgment removing from
in effect making a general appearance.                       and adding to the recited terms.
      The Supreme Court reversed, holding that                     The court of appeals affirmed, concluding
under Caldwell v. Barnes, 154 S.W.3d 93, 96-97               that Qi Wu Chisholm had participated in reaching
(Tex. 2004), “a defendant who is not served with             the agreement and understood it sufficiently for
process is entitled to a bill of review without a            the trial court to render judgment. The Supreme
further showing.” The fact that a defendant has              Court disagreed, noting that even if she consented
been informed of a case against him does not                 to the custody arrangements and marital residence
impose on him a duty to participate. The Supreme             sale, nothing showed she consented to the
Court also held that denial of a bill of review for          property division, the only issue before the Court.
“unclean hands” is too severe a sanction for                 When a consent judgment is rendered without
failure to appear under subpoena, as an initial step.        consent or is not in strict compliance with the
Because a bill of review is a separate proceeding            terms of the agreement, the judgment must be set
from the underlying suit, the court cannot                   aside. As to Gary Bryce Chisholm’s argument
“sanction Ross in this proceeding for misconduct             that the trial court, typical to Bexar County
in another.” The Supreme Court reversed the                  proceedings, rendered final judgment only partly
court of appeals, rendering judgment for Ross that           based on the parties’ agreement and otherwise on
the default judgment be set aside, and remanding             its own orders, the Court noted that there was no
for trial on the merits of the underlying suit.              basis for the trial court to make the findings
                                                             necessary to divide the marital estate.
B. Consent Judgments                                               Accordingly, the Supreme Court granted the
1. Chisholm v. Chisholm, S.W.3d , 50 Tex.                    petition for review and, without hearing oral
Sup. Ct. J. 191 (Tex. December 1, 2006) [05-                 argument, reversed the court of appeals’ judgment
0996].                                                       and remanded the case to the trial court for further
       When this divorce case was called for bench           proceedings.
trial, respondent Gary Bryce Chisholm’s counsel
recited into the record what she said was the                C. Default Judgment
parties’ agreement, containing terms on child                1. Fid. & Guar. Ins. Co. v. Drewery Constr. Co.,
custody and the division of property. Without                186 S.W.3d 571 (Tex. February 24, 2006) [05-
objection from petitioner Qi Wu Chisholm’s                   0295].
counsel, respondent’s counsel tendered as                          In this case, the Supreme Court applied the
evidence an exhibit listing pre-marital items and            Craddock test for reversing a default judgment to
items acquired during the marriage to be divided             a situation where the defendant insurance
between the parties, which counsel described as              company’s registered agent received notice, but
the division of personal property approved by the            the defendant averred that it did not receive any
parties. The court received the exhibit in                   forwarded notice from the agent. See Craddock v.
evidence. Almost immediately, petitioner, of                 Sunshine Bus Lines, 133 S.W.2d 124, 126 (Tex.
disputed ability to speak and understand English,            1939) (requiring a new trial if the defendant
stated that she did not understand what had been             shows (1) that the default was neither intentional
read into the record. With the occasional aid of an          nor conscious indifference, (2) a meritorious
interpreter petitioner acknowledged the agreement            defense, and (3) that a new trial would cause
on child custody and appeared to assent to the sale          neither delay nor undue prejudice).
of the marital residence, but she stated that the                  Drewery properly named Fidelity in its
parties had only discussed other matters and                 filings and served notice on Fidelity’s agent for
maintained she did not understand the agreement.             process, Corporate Service Co. (CSC). CSC
Other discussions ensued as to the agreement, but            timely received the citation and petition, but did


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not forward an electronic scan of the documents to             3. Ross v. Nat’l Ctr. for the Employment of the
Fidelity as it would in the ordinary course of                 Disabled, 201 S.W.3d 694 (Tex. August 31, 2006)
business, a process that would normally include                [05-0534].
forwarding the service documents themselves.                         In this appeal, Petitioner Richard Ross
Neither Fidelity nor CSC could verify that the                 sought review of a turnover order requiring him to
service documents were actually forwarded, and                 relinquish a letter of credit or its proceedings to
Fidelity’s employee averred that she did not                   satisfy a default judgment against him. In a
receive them. Fidelity did not file a timely answer            separate but related appeal, the Supreme Court
to the petition and default judgment was entered               granted Ross’s bill of review and set aside the
for Drewery in the amount of $158,131.05.                      default judgment giving rise to the turnover order.
      The Supreme Court held that under these                  The Court held that since the underlying judgment
circumstances the Craddock test was satisfied. It              was reversed, the turnover order must also be
emphasized that “[t]his Court has often set aside              reversed. Accordingly, without hearing oral
default judgments when papers were misplaced,                  argument, the Court reversed the court of appeals’
though no one knew precisely how.”                             judgment and rendered a take nothing judgment in
                                                               the turnover proceeding.
2. In re R.R., S.W.3d , 50 Tex. Sup. Ct. J. 195
(Tex. December 1, 2006) [06-0460].                             D. Enforcement of Judgments
       In this termination-of-parental rights case, the        1. In re Smith, 192 S.W.3d 564 (Tex. May 5,
trial court entered a default judgment against the             2006) [06-0107] consolidated with In re Main
mother, Ambrea Rodgers, after she failed to file an            Place Custom Homes, Inc., 192 S.W.3d 564 (Tex.
answer. The trial court denied her motion for new              May 5, 2006) [06-0108].
trial, and the court of appeals affirmed. At issue                  This mandamus proceeding addresses
is whether Rodgers met the Craddock                            judgment debtors’ attempts to supersede
requirements by showing that her failure to file an            enforcement of a judgment pending appeal under
answer was not intentional or due to conscious                 Texas Rule of Appellate Procedure Rule 24.
indifference, she had a meritorious defense, and               Richard and Ginger Honaker obtained a judgment
that a new trial would not cause delay or undue                against Ron Smith and Main Place Custom
prejudice. See Craddock v. Sunshine Bus Lines,                 Homes, Inc. in the total amount of $800,820.44.
133 S.W.2d 124, 126 (Tex. 1939).                               Smith and Main Place appealed the judgment.
       In her motion for new trial, Rodgers asserted           The Honakers then began conducting post-
that she did not think she was required to file an             judgment discovery in an effort to enforce the
answer for various reasons, including that she                 judgment. On the eve of the agreed upon date for
thought an attorney would automatically be                     Smith’s deposition, Smith and Main Place filed
appointed to her. She had also kept in regular                 affidavits stating that Smith had a negative net
contact through letters with her children’s                    worth and that Main Place had a net worth of
caseworker. She further asserted that she had a                $0.00.     Because Texas Rule of Appellate
meritorious defense because termination of her                 Procedure 24.2(a)(1)(A) states that the amount of
parental rights was not in the best interests of the           a supersedeas bond must not exceed fifty percent
children. There was no evidence in the trial court             of the judgment debtors net worth, Smith and
that a new trial would cause injury to any party.              Main Place filed cash deposits in lieu of bond in
The Court held that under these circumstances,                 the amount of $10.00 each in order to supersede
Rodgers satisfied the Craddock requirements.                   enforcement of the judgment.
Accordingly, without hearing oral argument, the                     The Honakers immediately filed a contest to
Court reversed the court of appeals’ judgment and              the affidavits of net worth and moved the trial
remanded the case to the trial court for a new trial.          court to set aside the cash deposits in lieu of bond.
                                                               They also filed a motion for sanctions and to
                                                               compel discovery responses in aid of the
                                                               judgment. The Honakers argued that Smith and
                                                               Main Place’s net worth affidavits were misleading


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and that additional discovery was needed to                  held that in this case the trial court failed to enter
accurately determine their net worth.                        sufficient findings to support its alter ego
Nevertheless, the Honakers argued that they had              determination. The Court agreed with Smith and
sufficient evidence to show that Smith’s closely             Honaker that the court of appeals should have
held corporation R.A. Smith & Company, Inc. (an              conducted a legal and factual sufficiency analysis
entity not named in the Honakers’ lawsuit) was               of the trial court’s net worth determinations and
Smith’s alter ego. Therefore, the Honakers                   instructed the court of appeals to do so if called
argued, all of that company’s assets should be               upon to review the trial court’s net worth
included in the calculation of Smith’s net worth.            determination again. Finally, the Court declined
       After a hearing, the trial court issued two           Smith and Main Place’s requests to review the
separate orders that Smith and Main Place                    discovery sanctions order in this mandamus
challenged in this proceeding. In the first order,           proceeding because they had an adequate remedy
the trial court sustained the Honakers’ challenge to         by appeal.
the net worth affidavits. The trial court found that
the affidavits were misleading. The trial court              E. Error Preservation
also determined that R.A. Smith & Company was                1. Parker v. Barefield, 206 S.W.3d 119 (Tex.
Smith’s alter ego. Without stating the basis for its         October 27, 2006) [06-0201].
calculation, the trial court entered a finding that                In this appeal the Court considered whether
Smith’s net worth was $1,142,951.00; however,                a trial court abused its discretion by failing to
the trial court did not determine Main Place’s net           allow a party leave to amend its pleadings before
worth. The trial court ordered that any future               ruling on special exceptions and dismissing the
attempts to supersede the judgment must comply               case. The Parkers brought suit against Barefield
with its alter ego finding. In the second order, the         and Champion EMS for allegedly causing further
trial court granted the Honakers’ motion to compel           injury to their minor child after arriving at the
responses to post-judgment discovery and                     scene of a head-on collision. Barefield and
sanctioned Smith and $11,275 for expenses, plus              Champion filed special exceptions and a motion
attorney’s fees.                                             to dismiss. The Parkers voluntarily amended the
       Smith and Main Place filed motions pursuant           petition to include willful and wanton negligence
to Rule 24.4 with the court of appeals seeking               to meet the requirements of the “Good Samaritan
review of the trial court’s order setting aside their        Act,” and also filed a response to the motion to
cash deposits in lieu of bond and determining                dismiss which requested leave to amend. Without
Smith’s net worth. Smith filed a separate appeal             a hearing, the trial court granted the special
of the discovery order. The court of appeals                 exceptions and dismissed the case with prejudice.
denied relief, but one justice dissented, arguing            The court of appeals found that the Parkers did
that the trial court improperly based its                    not preserve error for appeal because they did not
determination of Smith’s net worth on its finding            file a motion for new trial.
that R.A. Smith & Company was Smith’s alter                        The Supreme Court disagreed that a motion
ego.                                                         for new trial was needed to preserve error in this
       Smith and Main Place then filed “Rule 24.4            case. The Parkers had already asserted their right
Motion[s]” with the Supreme Court. The Supreme               to replead and had, in fact, amended their
Court treated the motions as petitions for writ of           pleadings before the trial court sustained the
mandamus, granted relief in part and denied relief           special exceptions and dismissed the case. The
in part. The Court held that the trial court abused          Court held that under these circumstances, an
its discretion by not stating with particularity the         additional request to amend in a motion for new
factual basis for its determination of Smith’s net           trial was not necessary to preserve error.
worth and by not determining Main Place’s net
worth as required by Rule 24.4(c)(3). In addition,
the Court held that trial courts may consider an
alter ego theory when determining a judgment
creditor’s net worth under Rule 24. But the Court


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January 1, 2006 – December 31, 2006

F. Finality of Judgments                                    Advanced Foundation Repair (AFR) over work
1. Brittingham-Sada De Ayala v. Mackie,                     done to level and stabilize a foundation. The
193 S.W.3d 575 (Tex. April 21, 2006) [04-0160].             parties’ contract included an arbitration clause.
      In this appeal arising from a probate                 AFR moved to compel arbitration and dismiss the
proceeding, the Supreme Court held that the court           suit in its entirety. The trial court signed a
of appeals lacked jurisdiction to hear the appeal of        judgment that compelled arbitration and disposed
an order that denied a plea to the jurisdiction and         of all parties and claims. When the plaintiff
overruled a motion to remove the estate’s                   appealed, the court of appeals deemed the appeal
executor.                                                   interlocutory. The Supreme Court concluded that
      Testator Juan Roberto Brittingham-McLean              the judgment was a final judgment because it
died in Mexico in 1998. In 2000, the testator’s             actually disposed of all parties and claims, based
widow, Ana Maria de la Fuente de Brittingham,               on the record. The Court remanded for the court
filed an application to have the will admitted to           of appeals to consider the merits of the appeal.
probate in Texas, alleging that Brittingham owned
personal property in Webb County. Later that                3. Kiefer v. Touris, 197 S.W.3d 300 (Tex. May
month, the trial court issued ancillary letters             26, 2006) [05-0651].
testamentary to Ms. Brittingham, naming her the                   In this case, the Supreme Court addressed the
independent executor of the estate. On behalf of            issue of whether a judgment on a bill of review
the estate, Ms. Brittingham sued Mr.                        setting aside a parentage determination in a
Brittingham’s daughters and grandchildren (who              divorce decree is final and appealable if the trial
were the beneficiaries of ninety-five percent of his        court does not make a new parentage
residuary estate), accusing them of pillaging the           determination.
estate’s assets. The testator’s daughter, Ayala,                  Kelly Jo Wood married Terry Kiefer in 1995.
moved to dismiss for lack of subject matter                 The next year, while married to Kiefer, Wood
jurisdiction, or, alternatively, to have Ms.                began an affair with Ioannis John Touris. In 1998,
Brittingham removed as executor. The trial court            Wood became pregnant with Touris’s child, and
denied Ayala’s motions. On appeal, the court of             A.K. was born later that year. Wood and Kiefer
appeals concluded that it had jurisdiction over the         divorced in 2000. The divorce decree adjudicated
appeal and that the trial court had subject matter          Wood and Kiefer parents of A.K., naming them
jurisdiction, but it also held that Ms. Brittingham         joint managing conservators. In 2001, Wood and
should be removed as executor due to a conflict of          Touris filed an acknowledgment of paternity with
interest.                                                   the Bureau of Vital Statistics naming Touris as
      The Supreme Court reversed the court of               A.K.’s father. In 2002, Touris filed a petition for
appeals’ judgment and dismissed the appeal,                 voluntary paternity asking to be formally
holding that because the trial court’s order did not        adjudicated the father of A.K. DNA testing
end a phase of the probate proceeding, it was               established that Touris is A.K.’s biological father.
interlocutory and not appealable. Additionally,             After Touris discovered Wood’s divorce decree
the Court held that Texas Civil Practice &                  declaring Kiefer and Wood to be A.K.’s parents,
Remedies Code section 51.014(a)(2), which                   Touris filed a bill of review to set aside the
permits interlocutory appeals of orders overruling          decree’s parentage adjudication to allow his
motions to vacate orders appointing receivers or            voluntary paternity petition to go forward. The
trustees, did not permit an interlocutory appeal of         trial court granted the bill of review, set aside the
an order overruling a motion to remove an estate’s          parentage adjudication in the divorce decree, but
executor.                                                   did not enter a new adjudication of A.K.’s
                                                            parentage. Wood and Kiefer appealed. The court
2. Childers v. Advanced Found. Repair, L.P.,                of appeals affirmed the trial court’s judgment
193 S.W.3d 897 (Tex. May 26, 2006) [05-0831].               granting the bill of review.
      The principal issue in the case was whether                 The Supreme Court reversed the court of
the judgment was an appealable final judgment or            appeals’ judgment and dismissed the appeal for
an interlocutory order.       The plaintiff sued            lack of jurisdiction. The Court held, without


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January 1, 2006 – December 31, 2006

hearing oral argument, that the trial court’s                instruction to be reversible error. Justice Brister
judgment setting aside the parentage adjudication            issued a concurring opinion in which he agreed
did not dispose of all of the bill of review issues.         that the instruction was harmless but added his
Therefore, the judgment was not final and                    view that the trial court did nothing wrong when
appealable, and the court of appeals did not have            it gave the instruction.
jurisdiction to review the case.
                                                             2.     Dew v. Crown Derrick Erectors, Inc.,
G. Jury Instructions and Questions                              S.W.3d , 49 Tex. S. Ct. J. 851 (Tex. June 30,
1.     Bed, Bath & Beyond, Inc. v. Urista,                   2006) [03-1128].
     S.W.3d       , 50 Tex. Sup. Ct. J. 334 (Tex.                  The issue in this wrongful death and survival
December 29, 2006) [04-0332].                                action was whether the trial court erred in refusing
      The Court considered whether an                        to submit an inferential rebuttal instruction on
unavoidable accident instruction, which both                 “new and independent cause.” A divided court of
parties agreed was improperly given, caused                  appeals reversed and remanded for new trial,
reversible error. In this case, the plaintiff claimed        concluding that the trial court had erred in failing
he was hit on the head and knocked unconscious               to submit the instruction because the evidence
by trash cans that fell from a Bed, Bath & Beyond            raised the issue. The Supreme Court reversed,
store shelf. A store employee on a ladder in the             concluding that the instruction was unnecessary.
adjacent aisle on the other side of the shelf had                  A worker on an oil derrick, which was under
reportedly been trying to retrieve merchandise               construction, died when he fell through an
with a broom when the trash cans fell. The                   opening in one of the derrick’s elevated platforms.
employee was not called to testify at trial, and             The liability issue at trial concerned responsibility
Bed, Bath & Beyond closed its case without                   for the opening and the precautions taken to
calling any witnesses. The trial court submitted             protect workers from the hazard of this opening.
the case to the jury in a broad-form charge and              The jury apportioned responsibility among the
gave the jury an unavoidable accident instruction            owner, designer, and erector of the derrick. The
stating that the occurrence need not be attributed           erector maintained, however, that it was entitled
to any party’s negligence. The jury answered                 to an instruction on new and independent cause
“no” to the liability question. The court of appeals         because it had provided adequate protection to
reversed and remanded, holding that the erroneous            safeguard the opening while it was awaiting
instruction was likely the basis for the jury’s              additional parts to complete its job, but that the
answer.                                                      actions of the owner or others had intervened to
      The Supreme Court noted that Crown Life                alter its safety precautions.
Insurance Co. v. Casteel, 22 S.W.3d 378 (Tex.                      Justice Medina, in a plurality opinion,
2000), did not control because the broad-form                concluded that a new and independent cause
question in this case submitted a single liability           instruction was not needed because the acts of
theory (negligence) to the jury. Assuming but not            others in altering the erector’s inadequate safety
deciding that the instruction was erroneous, the             measures were a concurring cause rather than a
Court then concluded that the record did not                 superseding cause of the death.
support a finding that the trial court’s submission                Justice Brister filed a concurring opinion,
of the instruction probably caused the rendition of          concluding that the omission of an inferential
an improper judgment. Accordingly, any error in              rebuttal instruction should be reviewed under the
including the instruction in the jury charge was             harmless error standard and that under that
harmless. The Court reversed the court of                    standard the omission here had been harmless.
appeals’ judgment and remanded the case to that                    Justice Johnson filed a dissenting opinion,
court for consideration of remaining issues.                 concluding that there was some evidence of a new
      Justice Medina dissented. Although he                  and independent cause and that under such
agreed that Casteel did not apply, he believed that          circumstances it was harmful error not to submit
the jury was confused by the unavoidable accident            the instruction.
instruction and the Court should have held the


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January 1, 2006 – December 31, 2006

3. Shupe v. Lingafelter, 192 S.W.3d 577 (Tex.                filed a motion for judgment notwithstanding the
May 5, 2006) [05-0083].                                      verdict and alternative motion for new trial. The
      The issue in this case was whether the trial           motion said, “In the event the court declines the
court committed reversible error by refusing to              relief requested in this motion and enters a
submit a requested jury instruction on negligent             judgment, Brookshire intends to file a more
entrustment. John Lingafelter and the passengers             comprehensive motion for new trial raising all
of his car sought damages for personal injuries              insufficiency and other complaints not addressed
arising from a vehicle accident they were involved           herein.” The trial court held a hearing on the
in when a pick-up truck driven by Joseph Heppler             motions on December 9, 2004; at the hearing, the
collided with a tractor-trailer driven by Brent              judge said “realistically what’s before the court
Shupe. The tractor-trailer was leased to Shupe’s             right now is whether or not the court should enter
employer, Midwest Coast Transport (MCT). The                 a judgment on the, on the verdict or a judgment
plaintiffs alleged that Shupe was negligent and              notwithstanding the verdict.” The trial court
that MCT negligently entrusted the tractor-trailer           signed the judgment that day, and signed an order
to Shupe. The trial court submitted a negligence             overruling the “motions” the next day, December
question as to Heppler, Shupe, and MCT, and                  10th.       Brookshire then filed a more
asked for percentages of liability as to each. The           comprehensive motion for new trial on January 7,
trial court denied the plaintiffs’ request for a jury        2005. The trial court held a hearing on that
instruction on negligent entrustment. The jury               motion on January 25th and granted the motion on
determined that Heppler was 100% negligent and               February 1st. Goss then filed a petition for writ of
that MCT and Shupe were 0% negligent. The trial              mandamus in the court of appeals, contending that
court entered a take nothing judgment. In a                  the trial court lacked jurisdiction to grant the new
divided opinion, the court of appeals reversed and           trial because the trial court’s plenary power under
remanded for a new trial on grounds that omitting            Rule 329b of the Texas Rules of Civil Procedure
the jury instruction on negligent entrustment was            had expired. The court of appeals acknowledged
harmful error.                                               that the trial court had arguably impliedly granted
      The Supreme Court reversed the court of                Brookshire permission to file an amended motion
appeals’ judgment and rendered judgment that the             for new trial at the December 9th hearing.
plaintiffs take nothing. As the driver of the                Nevertheless, it held that under In re Dickason,
tractor-trailer, Shupe’s negligence was an essential         987 S.W.2d 570 (Tex. 1998), the amended motion
element of the negligent entrustment theory                  for new trial did not extend the trial court’s
against MCT. Because the jury declined to find               plenary power. The Supreme Court held oral
Shupe negligent, or that his negligence                      argument on Brookshire’s petition for writ of
proximately caused the accident, the negligent               mandamus on March 23, 2006.
entrustment instruction would not have altered the
verdict even if it had been submitted. The Court             I. Post-Judgment Filing Deadlines
concluded, therefore, that the trial court’s                 1. Hernandez v. Nat’l Restoration Techs.,
omission of the instruction was harmless error, if                S.W.3d       , 50 Tex. Sup. Ct. J. 251 (Tex.
any.                                                         December 22, 2006) [06-0454].
                                                                   Hernandez alleged, and National Restoration
H. Motion for New Trial                                      Technologies conceded, that the court of appeals
1. In re Brookshire Grocery Co., 160 S.W.3d 288              erroneously dismissed Hernandez’s appeal as
(Tex. App.—Texarkana 2005), argument granted                 untimely due to a mistaken belief that the Harris
on petition for writ of mandamus, 49 Tex. Sup. Ct.           County District Clerk’s Office was open for
J. 360 (February 27, 2006) [05-0300].                        business on January 2, 2006. When a filing
     The issue in this case is whether the trial             deadline falls on a holiday or a day in which the
court lacked jurisdiction to grant an amended                district clerk’s office is closed or inaccessible, the
motion for new trial because its plenary power had           filing deadline is automatically extended until the
expired. After a jury returned a verdict in favor of         end of the next day when the district clerk’s office
real party in interest Barbara Goss, Brookshire              is open and accessible. TEX . R. APP . P. 4.1(b).


                                                        73
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January 1, 2006 – December 31, 2006

     Hernandez’s ninety-day filing deadline fell          Procedure 306a. Rule 306a allows for the
on New Year’s Day. The court of appeals                   extension of post-judgment deadlines when a
reopened from the holidays on January 2, but the          party first receives notice of a judgment more than
Harris County District Clerk’s Office was not             twenty, but less than ninety-one, days after it is
open until January 3. Thus, when Hernandez’s              signed. The trial court issued an order granting
notice of appeal was filed with the district clerk        Lynd’s motions.
and the court of appeals on January 3, the filing               Anthony filed a petition for writ of
was timely. However, the court of appeals                 mandamus in the court of appeals; the court
believed the appropriate deadline to be January 2,        granted the petition and ordered the trial court to
not realizing that the district clerk’s office was        vacate its order. Specifically, the court of appeals
closed that day. The court of appeals ordered             held that because the trial court’s order did not
Hernandez, pursuant to Texas Rules of Appellate           include a finding of the date Lynd received notice
Procedure 26.3 and 10.5(b), to file a formal              of the judgment, it could not serve to revive its
motion to extend time with an explanation as to           plenary power to grant Lynd a new trial. Lynd
why his notice of appeal was untimely.                    filed a petition for writ of mandamus in the
Hernandez’s counsel failed to respond to this             Supreme Court, arguing that Rule 306a did not
order and the court of appeals dismissed                  require that the trial court include a specific
Hernandez’s appeal for want of jurisdiction.              finding of the date of notice of judgment in its
     Because Hernandez’s notice of appeal was             order. The Supreme Court held that when the trial
timely, Texas Rules of Appellate Procedure 26.3           court fails to specifically find the date of notice,
and 10.5(b) did not apply and Hernandez was not           the finding may be implied from the trial court’s
required to explain the timing of his notice of           order and the record. If the implied date falls
appeal. Accordingly, the Supreme Court reversed           within the period described in Rule 306a, then the
the court of appeals’ judgment and the case was           order properly extends the trial court’s plenary
remanded so that Hernandez’s appeal could be              power. The Court then held there was ample
reinstated.                                               evidence in the record to imply from the trial
                                                          court’s order a finding that Lynd first received
2. In re The Lynd Co., 195 S.W.3d 682 (Tex. June          notice of the judgment more than twenty, but less
12, 2006) [05-0432].                                      than ninety-one, days after it was signed.
      In this case, the Supreme Court held that a         Therefore, the trial court had jurisdiction to grant
reviewing court may imply from a trial court’s            Lynd’s motion for new trial, and the court of
order the date a party received notice of judgment        appeals abused its discretion in ordering the trial
for the purpose of extending post-judgment filing         court to vacate the order. Accordingly, the Court
deadlines under Texas Rule of Civil Procedure             granted Lynd’s petition for writ of mandamus,
306a.                                                     directed the court of appeals to vacate its ruling,
      John Adrian Anthony sued The Lynd                   and ordered the trial court to vacate its order
Company after falling at one of Lynd’s apartment          withdrawing the order granting new trial.
complexes. Lynd filed an answer, but was later
sanctioned for failing to respond to Anthony’s            J. Voir Dire
request for disclosures. Five months later,               1.      Hyundai Motor Co. v. Vasquez,
Anthony filed a Motion for Entry of Final                 189 S.W.3d 743 (Tex. March 10, 2006)
Judgment. After a hearing, which Lynd did not             [03-0914].
attend, the court entered final judgment on May                 In this case, the Supreme Court considered
18, 2004. On August 27, 2004, after the trial             whether a trial court abused its discretion in
court’s normal plenary power period expired,              refusing to allow a voir dire question from counsel
Lynd filed a motion to set aside the default              that previewed relevant evidence and inquired of
judgment and a motion for new trial. Lynd                 prospective jurors whether such evidence was
claimed it first learned of the judgment on August        outcome determinative. The Supreme Court also
4, 2004, and moved to extend the trial court’s            considered whether counsel had properly
plenary jurisdiction under Texas Rule of Civil


                                                     74
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January 1, 2006 – December 31, 2006

preserved error as to the trial court’s refusal to            to the trial judge’s request that counsel specify the
allow further questions.                                      type of additional inquiry he would ask, counsel
       In a products liability action to recover for a        framed only one inquiry, which was virtually the
child’s death caused by an automobile airbag, the             same as the inquiry the trial court perceived had
trial judge dismissed two jury panels before                  caused confusion during the second voir dire.
seating the jury in the case from a third. During             After the trial court’s ruling, it was incumbent on
the first voir dire, Vasquez’s counsel asked jurors           counsel to request alternative approaches to avoid
whether the fact that the child was not wearing her           the problems the trial court was addressing in its
seat belt would determine their verdict. After                ruling.
numerous jurors indicated that the lack of a seat                   Justice Wainwright, joined by Justice
belt would determine their verdict, the trial court           Johnson, dissented. This dissent would have held
dismissed the jury panel. During the second voir              that error was preserved. It stated that the central
dire, the trial judge questioned the jurors along             question in this case should not have been the
similar lines, with slightly fewer, but nonetheless           propriety of asking the one particular question
significant, affirmative responses. The court again           identified by the Court but should have been the
dismissed the panel. Before the third voir dire, the          propriety of the trial court’s barring counsel from
trial judge discussed with counsel her concern that           inquiring about an entire and admittedly relevant
the previous jury panels had misunderstood the                subject during voir dire. The trial judge reserved
inquiry regarding seatbelts to be one about the               for individual questioning at the bench after
weight they could give to particular evidence in              general voir dire any questions concerning seat-
the case rather than whether they could fairly                belting children and seat-belt usage of other
consider all of the evidence presented. After the             persons, but after general questioning the trial
third voir dire, in which the court sustained                 judge refused to allow the questioning, instructing
Defendant’s objection to a voir dire question, the            “we are not going any further into seat belts.”
court seated a panel.                                         Whether the questions would have revealed
       The Supreme Court held that the trial court            disqualifying bias or not, the answers would have
did not abuse its discretion and could have                   assisted in the intelligent exercise of peremptory
reasonably determined that counsel’s question                 challenges.
regarding the child’s lack of a seat belt sought to                 In addition, Justice Medina, joined by Justice
gauge the jurors’ verdicts. The Court explained               Wainwright and Justice Johnson, dissented. This
that the question isolated a single material                  dissent stated that the issue was whether the trial
fact—that the child did not wear a seat belt—and              court abused its discretion when it cut off
sought to identify those jurors who agreed that one           questions about whether members of the venire
fact overcomes all others. The Court held that                would fairly consider all the evidence knowing
while a trial judge may choose to hear jurors’                that the decedent was not wearing her seat belt at
responses before deciding whether an inquiry                  the time of the accident. The trial judge must
pries into potential prejudices or potential                  have understood the question at issue to touch
verdicts, if the question reaches for the latter, a           upon disqualifying bias or prejudice at one time or
trial judge does not abuse its discretion in refusing         she would not have struck the first two panels.
to allow it. If the trial judge does allow a question         While the question rejected by the trial court, as it
that seeks a juror’s view about the weight to give            was phrased, was an impermissible attempt to pre-
relevant evidence, however, then the juror’s                  test the weight jurors would attach to the decedent
response, without more, is not disqualifying.                 not being belted, this improper question did not
       The Court also held that counsel did not               authorize the trial court to foreclose the entire area
properly preserve error as to any further questions.          of properly-phrased seat belt usage questions. It
While litigants need not present a list of each               is impossible to know here whether the verdict
intended voir dire question, they must “adequately            would have been different had the jury been
apprise[] the trial court of the nature of their              seated properly, but the harm analysis must reflect
inquiry.” Babcock v. Nw. Mem’l Hosp., 767                     the importance of the right to a trial by a fair and
S.W.2d 705, 707 (Tex. 1989). Here, in response                impartial jury.


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Supreme Court Update
January 1, 2006 – December 31, 2006

XXVI. PRODUCTS LIABILITY                                    court’s determination that the settlement credit
A. Causation Evidence                                       amount of $42,125 was accurate.
1. Bic Pen Corp. v. Carter, 171 S.W.3d 657 (Tex.                  Arturo Flores, a brake mechanic, sued Borg-
App.—Corpus Christi 2005), pet. granted, 50 Tex.            Warner Corporation for negligence and defective
Sup. Ct. J. 64 (October 30, 2006) [05-0835].                design, manufacture, and marketing of disk brake
      Brittany Carter sustained third-degree burns          pads containing asbestos, which allegedly caused
to over fifty-five percent of her body when her             Flores to develop asbestosis. The jury found that
five-year-old brother, Jonas, accidently set fire to        Borg-Warner’s negligence was a proximate cause
her dress while using a J-26 model lighter made by          of Flores’s asbestos-related health problems and
BIC Pen Corporation. Brittany’s mother, Janace              that Borg-Warner’s brake pads contained
Carter, sued BIC as Brittany’s next friend,                 manufacturing, marketing, and design defects.
claiming her injuries were caused by the lighter’s          The trial court awarded Flores $61,075 in
manufacturing and design defects.                           compensatory damages, which was equal to the
      The jury found for Carter, awarding $3                $103,200 awarded by the jury less $41,125 in
million in actual damages and $2 million in                 settlement credits owed to the defendant, and
exemplary damages. The trial court entered                  awarded $24,145.54 in pre-judgment interest and
judgment in accordance with the verdict but                 $55,000 in exemplary damages. The court of
reduced exemplary damages to $750,000 as                    appeals affirmed, holding that the evidence was
required by statute. The court of appeals affirmed          sufficient to support the jury’s findings, but
the judgment of the trial court based on the                denied that it could review the trial court’s
plaintiff’s design-defect claim; it did not address         approval of the jury-determined $41,125
Carter’s manufacturing defect claim.                        settlement credit.
Additionally, the court of appeals held that                      The Texas Supreme Court granted Borg-
Carter’s design defect claim is not preempted by            Warner Corp.’s petition for review and heard
federal law, the lighter caused Brittany Carter’s           argument on September 26, 2006.
injuries, BIC acted with malice, the trial court did
not commit reversible error by admitting the                3. Mack Trucks, Inc. v. Tamez,        S.W.3d ,
testimony of Carter’s expert witnesses, and the             50 Tex. Sup. Ct. J. 80 (Tex. October 27, 2006)
trial court did not award excessive interest.               [03-0526].
      The Supreme Court granted BIC’s petition                   The issue in this case was whether there was
for review and will hear argument on February 13,           legally sufficient evidence that a tractor-trailer
2007.                                                       defect was the proximate cause of the fire that led
                                                            to Abram Tamez’s death. The trial court excluded
2. Borg-Warner Corp. v. Flores, 153 S.W.3d 209              the plaintiff’s proposed expert witness,
(Tex. App.—Corpus Christi 2004), pet. granted,              concluding that the expert had not demonstrated
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-               that his methodology was scientifically reliable.
0189].                                                      After the witness was excluded, the plaintiff’s
     The issues in this case are (1) whether the            attorney moved for reconsideration and included
plaintiff’s development of slight interstitial              additional testimony from the proposed expert in
scarring and reduced pulmonary function after               a “bill of exceptions.” The trial court denied the
installing asbestos-containing brakes for several           motion for reconsideration. The trial court then
years during which he also smoked, constitutes              granted summary judgment in favor of Mack
legally sufficient evidence of causation for an             Trucks, concluding that without the expert
asbestos-related injury; (2) whether evidence               testimony, there was no evidence of causation.
about the dangers of asbestos and the asbestos              The court of appeals reversed. It looked at the
industry constitutes legally sufficient evidence of         testimony offered in the bill of exceptions to
malice on behalf of a brake pad manufacturer; and           conclude that the expert had established the
(3) whether Texas Rule of Appellate Procedure               reliability of his methodology, and further
38.1(h) properly led the court of appeals to                concluded that the expert testimony provided
consider itself incapable of reviewing the trial            some evidence of causation.


                                                       76
Supreme Court Update
January 1, 2006 – December 31, 2006

     The Supreme Court reversed the court of                  summary judgment. The Supreme Court accepted
appeals’ judgment and rendered judgment that the              the certified question and heard argument on
plaintiff take nothing. The Court held that the               October 19, 2006.
court of appeals erred in considering the expert’s
causation testimony from the bill of exceptions               2. SSP Partners v. Gladstrong Invs. (USA) Corp.,
without having first determined, pursuant to                  169 S.W.3d 27 (Tex. App.—Corpus Christi
properly assigned error, that the trial court erred in        2005), pet. granted, 50 Tex. Sup. Ct. J. 151
refusing to admit the testimony and reconsider its            (December 4, 2006) [05-0721].
decision to exclude the expert. The Court then                      The principal issue in this products liability
held that the trial court did not abuse its discretion        case is whether a company which did not
when it excluded the expert’s testimony on                    manufacture a defective product, but was part of
causation and that, with the expert excluded, there           the chain of commerce of the product, may
was no evidence of causation.                                 nevertheless owe a duty to indemnify the sellers
                                                              of the product.
B. Indemnification                                                  In 2001, Joshua Castillo, a child, died in a
1. Owens & Minor, Inc. v. Ansell Healthcare                   fire. His two brothers were also injured in the
Prods., Inc., certified question accepted, 49 Sup.            fire. Their parents claimed the fire was caused by
Ct. J. 567 (May 8, 2006) [06-0322].                           a defective butane lighter purchased at a Circle K
      The question certified is: “When a distributor          store. The parents brought a products liability
sued in a products liability action seeks                     action against the distributor, SSP Partners and
indemnification from less than all of the                     Gladstrong USA. SSP sued Metro Novelties,
manufacturers implicated in the case, does a                  another distributor, for indemnity. SSP and Metro
manufacturer fulfill its obligation under Texas               then collectively sued Gladstrong USA for
Civil Practice and Remedies § 82.002 by offering              indemnity, as Gladstrong USA was the alleged
indemnification and defense for only the portion              manufacturer and further upstream in the chain of
of the distributor’s defense concerning the sale or           distribution.
alleged sale of that specific manufacturer’s                        In October 2002, Gladstrong USA, SSP and
product, or must the manufacturer indemnify and               Metro all settled with the Castillos. The trial
defend the distributor against all claims and then            court granted Gladstrong USA’s no-evidence
seek contribution from the remaining                          motions for summary judgment against Metro and
manufacturers?”                                               SSP’s indemnity claim.
      In this case, Kathy Burden and members of                     The court of appeals affirmed the grant of
her family sued distributor Owens & Minor, Inc.,              summary judgment for Gladstrong USA based on
manufacturers Ansell Healthcare Products and                  statutory indemnity, but reversed on common-law
Becton Dickinson & Company (BD), and over                     indemnity grounds. The court of appeals held
thirty other entities for injuries allegedly sustained        that, although Gladstrong USA might not have
due to exposure to latex gloves manufactured and              been the manufacturer of the butane lighter, the
sold by the defendants.            Owens requested            doctrine of apparent manufacturer could be used
indemnity from some, but not all, of its                      to show that Gladstrong USA held itself out to be
manufacturers. Ansell and BD offered to defend                the manufacturer and would thus be forced to
Owens as to the products that Ansell and BD                   indemnify SSP and Metro. Accordingly, the court
manufactured. Owens rejected the offers. The                  of appeals reversed in part the trial court’s
plaintiffs voluntarily dismissed the defendants               summary judgment in favor of Gladstrong USA,
because they could not demonstrate that the                   affirmed in part, and remanded the case to the trial
defendants made or sold any of the gloves that                court.
injured Burden. Owens then cross-claimed                            The Supreme Court granted SSP and Metro’s
against four manufacturers, seeking to recover its            petitions for review and will hear argument on
defense costs. Two manufacturers settled, leaving             March 20, 2007.
Owens’s suit against Ansell and BD. The district
court granted Ansell and BD’s motions for


                                                         77
Supreme Court Update
January 1, 2006 – December 31, 2006

XXVII. REAL PROPERTY                                        easements. Petitioners sued and received a
A. Adverse Possession                                       condemnation award based on the testimony of
1. Tran v. Macha, S.W.3d , 50 Tex. Sup. Ct.                 two experts, Brad Kangieser and Tom Edmonds.
J. 186 (Tex. December 1, 2006) [04-1107].                   These experts, implicitly considering the 3.915
      Neighboring relatives shared the use of a             acres to be a separate economic unit, testified that
driveway for many years, thinking it belonged to            the easement had a highest and best use as a
one of them when it actually belonged to the other.         pipeline easement and that neither had used the
The court of appeals held that this shared use and          before-and-after valuation method in appraising
mutual mistake transferred title by adverse                 the property acquired by WesTTex. Both experts
possession. In its first adverse possession decision        appraised the easement without reference to the
in nearly twenty years the Supreme Court                    parent tract. The court of appeals, following the
reversed, holding that the evidence was legally             Supreme Court’s decision in Exxon Pipeline Co.
insufficient to support the statute of limitations.         v. Zwahr, 88 S.W.3d 623, 630-31 (Tex. 2002),
      The Court began with an examination of the            reversed the award and rendered judgment based
adverse possession statute. It noted that the               on WesTTex’s valuation evidence.
language “actual and visible appropriation”                       The Supreme Court concluded that this case
requires adverse possession, not just adverse               was not factually distinguishable from Zwahr,
beliefs. The shared use and mutual mistake in this          where Exxon Pipeline Co. condemned a fifty foot
case were simply insufficient to put the true owner         wide strip across a 49-acre cotton farm for a
on notice that plaintiffs were claiming ownership           pipeline easement, the 1.01-acre strip paralleled or
of the driveway. The Court noted that there is              largely overlapped an existing pipeline easement,
nothing inconsistent or hostile to one’s ownership          and Mr. Kangeiser had testified that the easement
about sharing use with another.                             was a self-contained, separate economic unit with
      Further, the Court clarified that adverse             a value independent from the surface acreage and
possession must be intentional. While this intent           a highest and best use as a pipeline easement.
does not require a desire to dispossess the true            There the Supreme Court reversed the
owner, or even knowledge that there is one, the             condemnation award, holding that Mr.
claimant must intend to claim the disputed                  Kangeiser’s testimony was irrelevant and
property as his own. The mere occupancy of land             inadmissible because he relied on the
is insufficient to show adverse possession.                 condemnation itself in establishing a separate
      Finally, quoting Robert Frost, the Court              economic unit and in assigning a value to that unit
recognized that it may seem harsh that adverse              and had not applied the before-and-after valuation
possession rewards only those who believe “good             method to evaluate the easement as a
fences make good neighbors” and not those who               proportionate part of the entire tract. Here the
are kind enough to share. But the Court noted that          Supreme Court held that Bulanek’s argument that
adverse possession is itself a harsh doctrine that          WesTTex’s easement was part of a pipeline
takes property from its true owner and gives it to          corridor comprising a separate economic unit
another. Because of the severity of the doctrine,           faltered because even if a pipeline corridor could
Texas law requires that the claimant’s intentions           be a separate economic unit without
be absolutely clear.                                        improvements or characteristics setting it apart
                                                            from surrounding property, petitioners’ experts’
B. Condemnation                                             testimony was no evidence of such a unit in this
1. Bulanek v. WesTTex 66 Pipeline Co.,                      case.
    S.W.3d     , 50 Tex. Sup. Ct. J. 174 (Tex.                    The Supreme Court held that the case should
December 1, 2006) [04-0011].                                be remanded given that Bulanek had presented the
      WesTTex 66 Pipeline Co. condemned a fifty             case in reliance on the court of appeals’ opinion in
foot wide strip across a 227-acre portion of                Zwahr, rejecting WesTTex’s argument that
petitioners’ undeveloped land for a pipeline                petitioners could have awaited the Supreme
easement. The 3.915-acre strip paralleled or                Court’s reversing decision in Zwahr before
largely overlapped seven existing pipeline                  seeking judgment.


                                                       78
Supreme Court Update
January 1, 2006 – December 31, 2006

2. PR Invs. v. State, 180 S.W.3d 654 (Tex.                   action and requested that the trial court award
App.—Houston [14th Dist.] 2005), pet. granted,               them attorney’s fees, expenses, and costs incurred
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [04-             in the case. The trial court dismissed the case
0431].                                                       without prejudice, awarding attorney’s fees and
      The State condemned a portion of PR                    accessing sanctions. The court of appeals initially
Investments’ property, seeking to convert the                affirmed the trial court’s judgment, but upon
street abutting the property into a controlled-              rehearing en banc, the court of appeals reversed
access highway.          Specialty Retailers, PR             and remanded the case to the trial court, holding
Investments’ tenant, leases an office and                    that the condemnation statute did not prohibit the
warehouse complex on the property and owns an                State from changing its specific plan for the
easement running east-west down the middle of                property after the commissioners’ hearing in a
the property, connecting the complex directly to             way that allegedly prejudices the landowners or
the main lanes of the condemned street. The State            require the issues relating to damages in the trial
initiated the condemnation action against PR                 court to be the same as those considered by the
Investments and Specialty Retailers, and the trial           special commissioners.
court appointed special commissioners to assess                    The Supreme Court granted PR Investments’
the condemnation damages in a hearing. PR                    and Specialty Retailers’ petitions for review and
Investments and Specialty Retailers voiced                   will hear argument on March 21, 2007.
concerns that the State create a safe and suitable
means of access from the highway into and out of             C. Constable’s Deeds
the property. Before the hearing, the State agreed           1. AIC Mgmt. v. Crews, 2005 WL 267667 (Tex.
to construct deceleration and acceleration lanes             App.—Houston [1st Dist.] 2005), pet. granted, 49
together with a raised traffic island to provide             Tex. Sup. Ct. J. 1040 (September 25, 2006) [05-
safer access to the remaining property and the               0270].
office complex. Satisfied with the safety of the                   In 1989, the City of Houston won a tax
State’s plan, Specialty Retailers did not appear at          deficiency suit against the Crews family for
the special commissioners’ hearing. At the                   failure to pay property taxes on a piece of
hearing, the State repeated that it would construct          property described as “Tract 12 being 6.0 acres
the highway with the deceleration and acceleration           out of T.S. Roberts Survey Abstract 659 situated
lanes and the raised traffic island. After the               in Harris County, Texas as shown in file number
special commissioners assessed $166,000 in                   J659372 of the Deed and Plat Records of Harris
damages against the State, both the State and PR             County Texas.” However, the partition deed held
Investments timely objected to the award, thereby            by the Crews family gave them title to 8.511 acres
invoking the trial court’s jurisdiction. On                  of land with no internal subdivisions. In 1991, the
December 1, 1999, the State alerted PR                       City attempted to sell the property at public
Investments that it had changed the construction             auction, but there were no bidders. The constable
plan to eliminate the acceleration and deceleration          then issued a deed to the City of Houston for the
lanes as well as the raised, concrete traffic island.        property, described as “TR 12 AB 659 T S
PRI received a “to scale” copy of the new                    Roberts * situated in Harris County, Texas” but
construction plan from the State on December 3,              with no specified acreage. The City again offered
only one business day before the December 6 trial.           the property at auction again in 1997, and it was
The State never notified Specialty Retailers of the          sold, by constable’s deed, to AIC Management.
changes to the construction plan. The State did              The constable issued a new deed for the property,
not move for a continuance to the December 3                 this time to AIC Management and again
deadline, nor did it supplement the opinions or              describing the land as “TR 12 AB 659 T S
reports of its testifying experts.                           Roberts * situated in Harris County, Texas.” In
      Both PR Investments and Specialty Retailers            2000, the City of Houston filed a condemnation
moved to dismiss for lack of jurisdiction, arguing           action in county court for the 8.511 acres
that the State’s decision to change plans deprived           described in the partition deed, valuing the
the trial court of jurisdiction in a condemnation            property at $259,518. The proceeds from the


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condemnation were deposited in the registry of the           the university campus, adjacent to Calhoun Road
trial court. The Crews family filed a motion for             and the State Highway 35 frontage road. Prior to
summary judgment in county court based on their              the University’s attempt to condemn the property,
partition deed, arguing that the description of              FKM had approached the University with plans to
Tract 12 in the constable’s deeds were insufficient          build a shopping center on the site, but the
to locate the property on the ground.                        University claimed it needed to take the property
      Aldine Independent School District (AISD)              to accomplish the public use of creating a Texas
did not participate in the original 1989 tax suit.           Highway 35 right-of-way. The University then
Following the condemnation, AISD filed claims                offered FKM $205,250 for the property. The
for the payment of ad valorem taxes due on that              University sought to condemn the land when
property for the years 1980-1991 and 1997-2001.              FKM refused its offer.
The trial court issued an order allocating tax                     The trial court appointed special
liability. AIC Management then filed a cross                 commissioners who assessed damages to be paid
claim asking the court to declare that the                   to FKM at $275,000. After the University took
Petitioner had no tax liability to AISD. AISD                possession of the property, FKM timely filed
filed a motion for summary judgment to dismiss               objections to the special commissioner’s award
the cross claims. The court granted AISD’s                   and requested a jury trial. Approximately two
motion, thereby dismissing the Petitioner’s claims.          years into the litigation the University filed an
The court then signed an order authorizing AISD              amended petition that reduced the amount of
withdrawal of funds from the court registry in the           property to be condemned to a five-foot-wide strip
full amount of its tax claim, and the clerk of the           of land along the length of Calhoun Road. FKM
county court issued a check to AISD for payment              filed a plea to the jurisdiction and a motion to
of the taxes.                                                dismiss, arguing the University’s amendment to
      The trial court granted the Crews family’s             take less property than it originally sought
motion for summary judgment, finding that both               stripped the trial court of jurisdiction because the
of the constable’s deeds generated from the tax              University altered the subject matter of the
deficiency action (one transferring title to the City        petition that was considered and valued by the
of Houston and the other transferring title to AIC           special commissioners.
Management) were void as a matter of law. The                      The trial court dismissed the University’s
Court of Appeals affirmed the judgment. The                  condemnation action and, after a jury trial on
Supreme Court heard argument on January 24,                  FKM’s request for attorney’s fees, expenses, and
2007.                                                        temporary possession damages, entered judgment
                                                             awarding FKM $323,026 in temporary possession
D. Eminent Domain                                            damages, $67,031.71 for appraisal fees, and
1. FKM P’ship, Ltd. v. Bd. of Regents of the                 $495,642 in attorney’s fees, plus contingent
Univ. of Houston Sys., 178 S.W.3d 1 (Tex.                    appellate fees totaling $175,000. The court of
App.—Houston [14th Dist.] 2005), pet. granted,               appeals held that the county court at law had
50 Tex. Sup. Ct. J. 227 (December 18, 2006) [05-             jurisdiction to hear the case even though it
0661].                                                       involved a smaller tract than that presented to the
     The principal issues presented in this case             special commissioners, and reversed and
involve the effect upon a condemnation                       remanded the case back to the trial court with
proceeding brought by a governmental entity                  instructions.
when, subsequent to the special commissioners’                     The Supreme Court granted petitions for
valuation proceedings, it significantly reduces the          review from both parties and will hear argument
size of the tract it seeks to take.                          on March 21, 2007.
     In 1999, the Board of Regents of the
University of Houston filed a condemnation case
in the County Civil Court at Law Number 3 to
take 1.0792 acres of unimproved land owned by
FKM. The land is located along the east side of


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E. Inverse Condemnation                                     presented an as-applied takings challenge that was
1. Hallco Tex., Inc. v. McMullen County,                    not ripe when the first judgment was rendered.
     S.W.3d       , 50 Tex. Sup. Ct. J. 314 (Tex.           The dissenting justices concluded that fact issues
January 2, 2007) [02-1176].                                 existed whether the County’s ordinance effected
      The principal issue in this case is whether a         a taking so that remand was warranted.
prior judgment based on the court of appeals’
determination that a landowner did not possess a            2. State v. Delany, 197 S.W.3d 297 (Tex. April
constitutionally protected property interest barred         28, 2006) [04-0628].
a later lawsuit. Hallco purchased land in                         In this eminent domain case, the Supreme
McMullen County and informed the County that                Court determined an owner of undeveloped land
it planned to use the site as a non-hazardous               could not recover damages based on hypothetical
industrial waste landfill. Hallco applied for a             impairment of access to the property.
landfill permit from the Texas Commission on                      In 1947 the State acquired 29.57 acres from
Environmental Quality in July 1992 and received             the predecessors of George and Patricia Delany
a draft permit in February 1995. After Hallco               for the construction of Interstate Highway 45. In
applied for the permit but before it received the           1965 the State condemned an additional 5.733
draft permit, the county enacted an ordinance               acres (Parcel 9) from the predecessors to construct
prohibiting landfills within three miles of Choke           an overpass and attendant facilities. Although
Canyon Lake, which encompassed Hallco’s land.               Parcel 9 cut a swath of state land between the
Hallco sued the County, contending that the                 predecessors’ remaining property and IH 45, the
ordinance constituted an unconstitutional taking of         State constructed a road (the Connector Road)
its property. The trial court granted the County’s          along the edge of Parcel 9 against which the
summary judgment motion and the court of                    remaining property abutted. Further, the State’s
appeals affirmed, holding that Hallco lacked a              Petition for Condemnation pleaded “the right of
constitutionally cognizable property interest               ingress and egress to or from the remaining
because it had yet to receive a permit to operate a         property of defendants abutting on said highway
landfill on its property. More than two years later,        is not to be denied.” The Delanys now own 3.48
Hallco filed a variance request with the County.            acres of the “remaining property.” The Delany
After the County took no action on the variance             Property has always remained undeveloped and
request, Hallco filed another lawsuit, which it             without driveways.
characterized as an as-applied regulatory takings                 In 1998 the State demolished the Connector
challenge. The County moved for summary                     Road for safety reasons, leaving Parcel 9 between
judgment on several grounds, including res                  the Delany Property and the nearest public
judicata. The trial court granted the motion                road—the northbound frontage road of IH 45.
without specifying the ground, and the court of             The Delanys sued for inverse condemnation,
appeals again affirmed.                                     arguing that removal of the Connector Road
      The Supreme Court affirmed, holding that the          resulted in substantial and material impairment of
earlier judgment barred Hallco’s second takings             access to the property, a compensable taking
claim. The Court held that there was no                     under the Texas Constitution. The trial court
cognizable distinction between Hallco’s earlier             awarded damages of $341,075 after interest and
takings claim and the second lawsuit because none           $5,000 of sanctions, totaling $497,637.80 in
of the facts relevant to the claim had changed. For         damages. The court of appeals affirmed, with two
the same reason, the Court concluded that                   judges dissenting from a denial of rehearing en
Hallco’s claim under the Private Real Property              banc.
Rights Preservation Act, section 2007.001-045 of                  The Supreme Court reversed the court of
the Texas Government Code, was also barred by               appeals’ judgment. The Court first held that the
the earlier unappealed judgment.                            Delanys, as landowners abutting a public road,
      Justice Hecht issued a dissenting opinion,            possessed a general easement of access to their
joined by Justices Medina and Willett. The                  property, but did not possess an easement to a
dissent concluded that Hallco’s second suit                 specific road. Second, the Court held that the


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1965 Petition for Condemnation preserved this               G. Zoning
general easement even if the Delany property was            1. City of Dallas v. Vanesko, 189 S.W.3d 777
no longer an abutting property. Third, the Court            (Tex. April 7, 2006) [04-0263].
held that the removal of the Connector Road did                   In this zoning case, the Court considered
not substantially and materially impair access to           whether a City can enforce a zoning ordinance
the property. The Delanys retained access to the            against a property owner whose substantially
northbound frontage roads across Parcel 9, access           completed new home was built in violation of the
which was reasonable given the raw state of the             ordinance, even though the City had given
property. Because the property has always been              preliminary approval to the owner’s building
undeveloped, the Delanys could not argue such               plans.
access was unreasonable based on hypothetical                     Dallas residents Doug and Grace Vanesko
development plans. Accordingly, the Court                   wanted a larger home, so they decided to tear
rendered a take-nothing judgment as to the                  down their existing house and build a new one in
impaired access damages.                                    its place on the same lot. To save money, they
                                                            also decided to design the new structure
F. Mechanic’s Lien                                          themselves, without the assistance of architects
1. Reliance Nat’l Indem. Co. v. Advance’d                   and engineers, and to act as their own general
Temps., Inc., 165 S.W.3d 1 (Tex. App.—Corpus                contractor. The City initially approved the
Christi 2004), pet. granted, 49 Tex. Sup. Ct. J. 567        building plans as submitted and issued a building
(May 8, 2006) [05-0558].                                    permit. However, after the roof was framed in, an
      The principal issue in the case is whether the        inspector advised the Vaneskos that the structure
plaintiff furnished labor under section                     was too high, in violation of a local zoning
53.021(a)(1) of the Texas Property Code.                    ordinance. The Vaneskos sought a height
Advance’d Temporaries, Inc. is a temporary                  variance from the local Board of Adjustment.
employment agency that provided over 100                    Despite a lack of opposition from the City or other
temporary employees to subcontractor Gonzalez               residents, the Board denied the Vaneskos’
Construction on the Corpus Christi Crosswinds               variance request. The Vaneskos appealed the
Apartments construction project. The general                action of the Board by application for writ of
contractor, L & T, J.V. (Lamar), terminated the             certiorari to the Dallas County District Court,
subcontract with Gonzalez, paying Gonzalez for              which reversed the decision of the Board. A
all outstanding work. Gonzalez paid Advance’d               divided panel of the court of appeals affirmed.
$63,210.67, leaving unpaid Advance’d invoices of                  The Supreme Court reversed the court of
$208,219.56. After unsuccessfully asserting a               appeals’ judgment, holding that the Vaneskos’
claim on the payment bond, Advance’d sued                   decision to build a structure in violation of a
Lamar, Gonzalez, Crosswinds, and the payment                zoning ordinance was a self-created hardship and
bond surety, Reliance National Indemnity                    thus could not be the subject of a variance.
Company. Following a bench trial, the trial court                 Justice O’Neill filed a dissent in which she
held that Advance’d was not entitled to a                   wrote that the Board misunderstood the level of
mechanic’s lien because it did not furnish labor            discretion it was afforded under the zoning
under section 53.021(a) of the Property Code.               regulations due to faulty advice from City
The court of appeals reversed and remanded,                 lawyers.
developing a seven-factor test and holding that
Advance’d did furnish labor under the test.                 XXVIII.        TELEPHONE CONSUMER
      The Supreme Court granted Reliance’s                  PROTECTION ACT
petition for review and heard argument on October           A. Liability for Unsolicited Faxes
18, 2006.                                                   1. Chair King, Inc. v. GTE Mobilnet of Houston
                                                            Inc., 184 S.W.3d 707 (Tex. February 3, 2006) [04-
                                                            0570].
                                                                  The issue in this case was whether the
                                                            receipt of unsolicited faxes was actionable in


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Texas courts under the federal Telephone                      restraint of trade will require evidence that the
Consumer Protection Act (TCPA) before Texas                   agreement has a demonstrable economic effect in
law separately provided for such a cause of action.           the relevant market, by showing a substantial
The plaintiffs in this case received unsolicited              market foreclosure or an adverse impact on
faxes from various companies advertising their                consumer prices.
products. The plaintiffs originally filed suit in                   Five carbonated soft drink bottlers, with
federal court, but the case was dismissed for lack            franchises to distribute Royal Crown Cola in
of subject-matter jurisdiction. Chair King, Inc. v.           territories in a region including parts of Arkansas,
Houston Cellular Corp., 131 F. 3d 507, 509 (5th               Louisiana, Oklahoma, and Texas, sued the
Cir. 1997). The suit was then filed in state court            Coca-Cola Company and distributers in the area
with the plaintiffs alleging a private damage claim           (collectively “Coke”) for using calendar
under the TCPA, negligence, negligence per se,                marketing agreements (CMAs) with retailers to
invasion of privacy, trespass to chattels, gross              unreasonably restrain trade, monopolize the
negligence, and conspiracy among the senders.                 market, and attempt and conspire to monopolize
     The trial court granted the defendants’ joint            the market in violation of the Texas Free
and individual summary judgment motions and                   Enterprise and Antitrust Act of 1983 (TFEAA)
denied the plaintiffs’ motion for partial summary             and the antitrust laws of the other three states.
judgment. The court of appeals affirmed in part               The trial court rendered judgment on the jury’s
and reversed and remanded in part, holding that               verdict for the plaintiffs, awarding damages
states need not pass enabling legislation before              incurred throughout the region and permanently
TCPA claims become actionable in state courts.                enjoining conduct it deemed anti-competitive in
     The Supreme Court reversed the judgment of               specified counties in the four states. The court of
the court of appeals and rendered judgment for                appeals affirmed. The Supreme Court reversed,
GTE Mobilnet. The Court noted that the TCPA                   dismissing the plaintiffs’ claims of injury
provides that “a person or entity may, if otherwise           occurring in other states and rendering judgment
permitted by the laws or rules of court of a State,           that plaintiffs take nothing on their claims of
bring in an appropriate court of that state . . .” an         injury occurring in Texas.
action based on the receipt of an unsolicited fax.                  Justice Hecht authored the Court’s opinion,
The Supreme Court concluded that the right of                 which held that the TFEAA would not support
action the TCPA affords is not self-implementing,             extraterritorial relief in the absence of a showing
but requires state enabling legislation to be                 that such relief promotes competition in Texas or
enforceable in Texas courts. Because Texas did                benefits Texas consumers, explaining that the Act,
not otherwise provide for a private cause of action           although it provides that the presence of interstate
for unsolicited faxes until 1999, and the faxes at            commerce will not be a defense to relief, also
issue in this case were sent before 1999, the                 contains language indicating that the Act’s intent
Supreme Court held that the plaintiffs had no                 is to benefit consumers in the state. In the
actionable claim under the TCPA.                              absence of clear language affording a cause of
                                                              action for injury outside the state, the Court would
XXIX. TEXAS FREE ENTERPRISE &                                 not imply one. The Court also held that Texas
ANTITRUST ACT                                                 courts, as a matter of interstate comity, will not
A. Interpretation and Application                             decide how another state’s antitrust laws and
1. Coca-Cola Co. v. Harmar Bottling Co.,                      policies apply to injuries confined to that state.
  S.W.3d , 50 Tex. Sup. Ct. J. 21 (Tex. October                     Looking to federal law for guidance, the
20, 2006) [03-0737].                                          Court then held that plaintiffs’ antitrust claims
      In this antitrust case, the Court clarified that        under the TFEAA, and therefore its tort claims,
Texas courts will not grant extraterritorial antitrust        failed because there was no evidence that Coke’s
relief in the absence of evidence showing that                CMAs had a “demonstrable economic
such relief promotes competition or benefits                  effect”—there was no evidence that the CMAs,
consumers within the state, and that establishing             for example, foreclosed a specific percentage of
that a marketing agreement is an unreasonable                 competition in any relevant market, and no


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evidence showing that any market foreclosure was              could authorize suits against a trust in its own
substantial. Though there was evidence that Coke              name, it has not done so.
dominated the market and that its CMAs made it                      The Supreme Court concluded that the Trust
more difficult for competitors and caused some                waived its objection to capacity by filing its
retailers to price competing products artificially            verified pleading too late. The Court stated: “By
higher, there was no evidence that such isolated              failing to raise a timely objection to capacity,
instances impacted consumers throughout any                   [Malooly] waived any objection that judgment
territory or the region, and no evidence that the             had to be rendered against the Trust, rather than
CMAs caused consumers to pay higher prices                    himself as trustee.”
generally.
      Justice Brister dissented and would have                XXXI. WORKERS’ COMPENSATION
found the evidence sufficient to support the jury’s           A. General Contractors
verdict, pointing out that Coke purchased                     1. Entergy Gulf States, Inc. v. Summers, 2004
distributors in the region, then began demanding              WL 3021178 (Tex. App.—Beaumont 2004), pet.
that retailers stop advertising and selling, or raise         granted, 49 Tex. Sup. Ct. J. 509 (April 24, 2006)
prices for, competing brands, and that it punished            [05-0272].
non-complying retailers with higher wholesale                       The issue in this case is whether section
prices; the jury found that Coke had crossed the              406.123 of the Texas Labor Code protects a
“line between competing and bullying.” Justice                premises owner who procures work from an
Brister also argued that comity and abstention                independent contractor and provides workers’
were misapplied here, particularly because the                compensation to the employees of that
TFEAA, in providing that it applies to “trade and             independent contractor.
commerce occurring wholly or partly within” the                     John Summers brought suit against Entergy
state, precludes abstention.                                  Gulf States, Inc. (EGSI) for injuries sustained
                                                              while working at EGSI’s Sabine Station plant as
XXX. TRUSTS                                                   an employee of International Machine
A. Capacity to be Sued                                        Corporation (IMC). Acting through an agent,
1. Ray Malooly Trust v. Juhl, 186 S.W.3d 568                  EGSI entered into a contract with IMC whereby
(Tex. February 24, 2006) [04-0685].                           IMC was to perform work on EGSI’s premises.
      The Ray Malooly Trust appealed a judgment               While the contract defined IMC as an independent
against it for $351,352, arguing that it lacked               contractor, it also explained that it should not be
capacity to be sued. The Supreme Court agreed                 construed as precluding EGSI from raising the
that a trust does not have the capacity to be sued,           “Statutory Employee” defense. The parties signed
but denied the petition for review as this point was          an addendum to the contract stating the Entergy
waived because the trust did not file an answer               companies were intended to be the “principal
stating that it did not have the capacity to be sued          employer” and the statutory employer of IMC’s
until more than three years after the Juhls sued the          employees while working under the contract.
Trust in May 1999. Indeed, the trust answered                 EGSI later accepted IMC’s offer to reduce its
discovery “by and through its trustee Raymond                 contract price in exchange for EGSI providing
Malooly.”                                                     workers’ compensation insurance to IMC’s
      The Court reiterated the long-standing                  employees. EGSI then obtained a workers’
general rule in Texas that “suits against a trust             compensation policy and paid the workers’
must be brought against its legal representative,             compensation premiums. Three months later,
the trustee.” The Court pointed out that the Texas            Summers was injured while repairing a leak on a
Trust Code “explicitly defines a trust as a                   hydrogen cooler at the Sabine Plant. He applied
relationship rather than a legal entity,” TEX . PROP .        for and received workers’ compensation benefits
CODE § 111.004(4), and held that language in the              under the policy obtained by EGSI and also filed
code stating that a “plaintiff may sue the trustee in         suit against EGSI for negligence.
his representative capacity” authorized just that.                  The trial court granted summary judgment to
See id. § 114.084(a). Although the Legislature                EGSI on the basis that Summer’s claims are


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barred because EGSI is Summer’s deemed                      affirming the Commission’s decision. The court
employer.      The court of appeals reversed,               of appeals affirmed the trial court’s judgment,
concluding EGSI was not a general contractor                applying the Downs decision retrospectively.
since the definition of general contractor did not               The Supreme Court granted Southwestern
include an owner who did not undertake to                   Bell Telephone Company’s petition for review
perform work or services and then subcontracted             and heard argument on March 23, 2006.
a part of that work. The Supreme Court granted
Entergy’s petition for review and heard argument
on January 24, 2007.

B. Payment of Benefits
1. Sw. Bell Tel. Co. v. Mitchell, 2005 WL
154203 (Tex. App.—San Antonio 2005), pet.
granted, 49 Tex. Sup. Ct. J. 360 (February 27,
2006) [05-0171].
      This issues in this case are (1) whether the
Supreme Court should overrule its decision in
Continental Casualty Co. v. Downs, 81 S.W.3d
803 (Tex. 2002), interpreting TEXAS LABOR CODE
Section 409.021 to be a waiver of compensability
if a carrier fails to act within seven days, and (2)
alternatively, whether the Downs decision should
be applied retroactively so that its holding would
apply only to insurance carriers who received
notice of an employee’s injury after Downs was
final, August 30, 2002.
      Louise Mitchell, a typist for Southwestern
Bell Telephone Company, L.P., contracted
Legionnaire’s disease, a serious and potentially
deadly form of pneumonia. Mitchell filed a
written notice, which her employer received on
August 23, 2000. Four days later, she died. Her
husband, William Mitchell, pursued a claim for
death benefits under the Workers’ Compensation
Act. Over a month later, Southwestern Bell
Telephone Company filed a dispute of
compensability with the Texas Workforce
Commission. The Downs decision was released
while this case was pending before the Texas
Workforce Commission.
      Both the Texas Workforce Commission
hearing officer and the appeals judge, each
applying Downs retrospectively, held that
Southwestern Bell Telephone Company waived
the right to dispute compensability by taking no
action within the seven days described by TEX .
LAB . CODE 409.021. Southwestern Bell sought
judicial review of the Texas Workforce
Commission’s decision. The trial court granted
Mitchell’s motion for summary judgment,


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                                                               Index


A.G. Edwards & Sons, Inc. v. Beyer,
170 S.W.3d 684 (Tex. App.—El Paso 2005), pet. granted,
50 Tex. Sup. Ct. J. 251 (December 28, 2006) [05-0580]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

AIC Mgmt. v. Crews,
2005 WL 267667 (Tex. App.—Houston [1st Dist.] 2005), pet. granted,
49 Tex. Sup. Ct. J. 1040 (September 25, 2006) [05-0270]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Alex Sheshunoff Mgmt. Servs. v. Johnson,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 44 (Tex. October 20, 2006) [03-1050]. . . . . . . . . . . . . . . . . . . . . . 23

Allstate Indem. Co. v. Forth,
204 S.W.3d 795 (Tex. April 21, 2006) [05-0057]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Allstate Ins. Co. v. Fleming,
2005 WL 1536228 (Tex. App.—Austin 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2001) [05-0645]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Am. Flood Research, Inc. v. Jones,
192 S.W.3d 581 (Tex. May 5, 2006) [05-0271]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Am. Standard and the Trane Co. v. Brownsville Indep. Sch. Dist.,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 909 (Tex. June 30, 2006) [05-0327]. . . . . . . . . . . . . . . . . . . . . . . . 7

AT&T Commc’ns of Tex., L.P., v. Sw. Bell Tel. Co.,
186 S.W.3d 517 (Tex. January 27, 2006) [03-0789]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Barker v. Eckman,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 175 (Tex. December 1, 2006) [04-0194]. . . . . . . . . . . . . . . . . . . . 63

Barr v. City of Sinton,
2005 WL 3117209 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [06-0074]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Bed, Bath & Beyond, Inc. v. Urista,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 334 (Tex. December 29, 2006) [04-0332]. . . . . . . . . . . . . . . . . . . 72

Ben Bolt-Palito Blanco Consol. ISD v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 344 (December 29, 2006) [05-0340]. . . . . . . . . . . . . . . . . . . . . . . 32

Bic Pen Corp. v. Carter,
171 S.W.3d 657 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 64 (October 30, 2006) [05-0835]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Blue Cross Blue Shield of Tex., v. Duenez,
201 S.W.3d 674 (Tex. August 31, 2006) [05-0521]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3



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Borg-Warner Corp. v. Flores,
153 S.W.3d 209 (Tex. App.—Corpus Christi 2004), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0189]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Brainard v. Trinity Universal Ins. Co.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 271 (Tex. December 22, 2006) [04-0537]. . . . . . . . . . . . . . . . . . . 45

Brittingham-Sada De Ayala v. Mackie,
193 S.W.3d 575 (Tex. April 21, 2006) [04-0160]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Bulanek v. WesTTex 66 Pipeline Co.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 174 (Tex. December 1, 2006) [04-0011]. . . . . . . . . . . . . . . . . . . . 78

Cameron Appraisal Dist. v. Rourk,
194 S.W.3d 501 (Tex. June 2, 2006) [04-0359]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Cary v. Alford,
203 S.W.3d 837 (Tex. September 22, 2006) [05-1018]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Cent. Ready Mix Concrete Co. v. Islas,
2005 WL 428410 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-0940]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Chair King, Inc. v. GTE Mobilnet of Houston Inc.,
184 S.W.3d 707 (Tex. February 3, 2006) [04-0570]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Childers v. Advanced Found. Repair, L.P.,
193 S.W.3d 897 (Tex. May 26, 2006) [05-0831]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Chisholm v. Chisholm,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 191 (Tex. December 1, 2006) [05-0996]. . . . . . . . . . . . . . . . . . . . 68

Christus Health Gulf Coast v. Aetna, Inc.,
167 S.W.3d 879 (Tex. App.—Houston [14th Dist.] 2005), pet. granted,
49 Tex. Sup. Ct. J. 966 (September 1, 2006) [05-0710]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Citizens Nat’l Bank in Waxahachie v. Scott,
195 S.W.3d 94 (Tex. June 9, 2006) [05-0454]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

City of Dallas v. Thompson,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 189 (Tex. December 1, 2006) [05-0787]. . . . . . . . . . . . . . . . . . . . 34

City of Dallas v. Vanesko,
189 S.W.3d 777 (Tex. April 7, 2006) [04-0263]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

City of Galveston v. State,
175 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2004), pet. granted,
49 Tex. Sup. Ct. J. 254 (January 23, 2006) [04-0890]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34




                                                                 87
Supreme Court Update
January 1, 2006 – December 31, 2006

City of Grapevine v. Sipes,
195 S.W.3d 689 (Tex. June 16, 2006) [04-0933]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

City of Houston v. Allco, Inc.,
206 S.W.3d 113 (Tex. June 30, 2006) [04-0730]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

City of Houston v. Boyer, Inc.,
197 S.W.3d 393 (Tex. June 30, 2006) [04-1021]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

City of Houston v. Clark,
197 S.W.3d 314 (Tex. June 30, 2006) [04-0930]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

City of Houston v. Clear Channel Outdoor, Inc.,
197 S.W.3d 386 (Tex. June 30, 2006) [04-0406]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

City of Houston v. Jackson,
192 S.W.3d 764 (Tex. April 7, 2006) [04-0465]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

City of Houston v. Jones,
197 S.W.3d 391 (Tex. June 30, 2006) [04-0879]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

City of Marshall v. City of Uncertain,
206 S.W.3d 97 (Tex. June 12, 2006) [03-1111]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

City of San Antonio v. Hartman,
201 S.W.3d 667 (Tex. August 31, 2006) [05-0147]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

City of San Antonio v. Hartman,
155 S.W.3d 460 (Tex. App.—San Antonio 2004), pet. granted,
49 Tex. Sup. Ct. J. 360 (February 24, 2006) [05-0147]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

City of San Antonio v. Pollock,
155 S.W.3d 322 (Tex. App.—San Antonio 2004), pet. granted,
49 Tex. Sup. Ct. J. 567 (May 8, 2006) [04-1118]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

City of Tyler v. Beck,
196 S.W.3d 784 (Tex. June 30, 2006) [04-0813]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

City of White Settlement v. Super Wash, Inc.,
198 S.W.3d 770 (Tex. March 3, 2006) [04-0340]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Coastal Oil & Gas Corp. v. Garza Energy Trust,
166 S.W.3d 301 (Tex. App.—Corpus Christi 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0466]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Coca-Cola Co. v. Harmar Bottling Co.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 21 (Tex. October 20, 2006) [03-0737]. . . . . . . . . . . . . . . . . . . . . . 83

Columbus Indep. Sch. Dist. v. Five Oaks Achievement Ctr.,
197 S.W.3d 384 (Tex. June 30, 2006) [05-0414]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37


                                                                 88
Supreme Court Update
January 1, 2006 – December 31, 2006

Cooper Tire & Rubber Co. v. Mendez,
204 S.W.3d 797 (Tex. June 16, 2006) [04-1039]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

County of Dallas v. Sempe,
151 S.W.3d 291 (Tex. App.—Dallas 2004), pet. granted,
49 Tex. Sup. Ct. J. 636 (May 29, 2006) [05-0022] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Dew v. Crown Derrick Erectors, Inc.,
___ S.W.3d ___, 49 Tex. S. Ct. J. 851 (Tex. June 30, 2006) [03-1128]. . . . . . . . . . . . . . . . . . . . . . . . . 72

Dominion Okla. Tex. Exploration & Prod., Inc. v. Castle Tex. Oil & Gas L.P.,
2005 WL 1797065 (Tex. App.—Corpus Christi 2005), pet granted,
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0739]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Ed Rachal Foundation v. D’Unger,
207 S.W.3d 330 (Tex. April 21, 2006) [03-1101]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n,
161 S.W.3d 587 (Tex. App.—Austin 2005), pet. granted,
49 Tex. Sup. Ct. J. 782 (June 30, 2006) [05-0372] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Entergy Gulf States, Inc. v. Summers,
2004 WL 3021178 (Tex. App.—Beaumont 2004), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0272]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Evanston Ins. Co. v. ATOFINA Petrochem., Inc.,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 589 (Tex. May 5, 2006) [03-0647],
rehearing granted October 27, 2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, Inc.,
___ S.W.3d ___, 48 Tex. Sup. Ct. J. 735 (Tex. May 27, 2005),
motion for rehearing granted, 49 Tex. Sup. Ct. J. 240 (January 9, 2006) [02-0730]. . . . . . . . . . . . . . . 44

Exxon Corp. v. Emerald Oil & Gas Co.,
180 S.W.3d 299 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-1076]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Exxon Corp. v. Emerald Oil & Gas Co.,
2005 WL 167051 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 64 (October 30, 2006) [05-0729]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

F.F.P. Operating Partners L.P. v. Duenez,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 102 (Tex. November 3, 2006) [02-0381]. . . . . . . . . . . . . . . . . . . . 20

Farmers Group, Inc. v. Lubin,
157 S.W.3d 113 (Tex. App.—Austin 2005), pet. granted,
50 Tex. Sup. Ct. J. 72 (October 30, 2006) [05-0169]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Fid. & Guar. Ins. Co. v. Drewery Constr. Co.,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 374 (Tex. Feb. 24, 2006) [05-0295]. . . . . . . . . . . . . . . . . . . . . . . . 68


                                                                    89
Supreme Court Update
January 1, 2006 – December 31, 2006

Fiess v. State Farm Lloyds,
202 S.W.3d 744 (Tex. August 31, 2006) [04-1104]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Fifth Club, Inc. v. Ramirez,
196 S.W.3d 788 (Tex. June 30, 2006) [04-0550]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

First Commerce Bank v. Palmer,
165 S.W.3d 366 (Tex. App.—Corpus Christi 2004), pet. granted,
49 Tex. Sup. Ct. J. 636 (May 29, 2006) [05-0686]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

FKM P’ship, Ltd. v. Bd. of Regents of the Univ. of Houston Sys.,
178 S.W.3d 1 (Tex. App.—Houston [14th Dist.] 2005), pet. granted,
50 Tex. Sup. Ct. J. 227 (December 18, 2006) [05-0661]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Ford Motor Co. v. Ledesma,
173 S.W.3d 78 (Tex. App.—Austin 2005), pet. granted,
50 Sup. Ct. J. 65 (October 30, 2006) [05-0895]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Fortis Benefits v. Cantu,
170 S.W.3d 755 (Tex. App.—Waco 2005), pet. granted
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0791]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Gaines v. Kelly,
181 S.W.3d 394 (Tex. App.—Waco 2005), pet. granted,
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-1092]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Gen. Elec. Co. v. Moritz,
2004 WL 1119481, (Tex. App.—Fort Worth 2004), pet. granted,
49 Tex. Sup. Ct. J. 567 (May 8, 2006) [04-0871]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Gonzalez v. McAllen Med. Ctr., Inc.,
195 S.W.3d 680 (Tex. June 9, 2006) [03-0939]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Guest v. Dixon,
195 S.W.3d 687 (Tex. June 16, 2006) [04-0128]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Guevara v. Ferrer,
192 S.W.3d 39 (Tex. App.—El Paso 2005), pet. granted,
50 Tex. Sup. Ct. J. 65 (October 30, 2006) [05-1100]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

GuideOne Elite Ins. Co. v. Fielder Road Baptist Church,
197 S.W.3d 305 (Tex. June 30, 2006) [04-0692]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Gym-N-I Playgrounds, Inc. v. Snider,
158 S.W.3d 78 (Tex. App.—Austin 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0197]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Hallco Tex., Inc. v. McMullen County,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 314 (Tex. January 2, 2007) [02-1176]. . . . . . . . . . . . . . . . . . . . . . 81



                                                                  90
Supreme Court Update
January 1, 2006 – December 31, 2006

Hardy v. Int’l Interests, L.P.,
certified question accepted, 49 Tex. Sup. Ct. J. 681 (June 9, 2006) [06-0347]. . . . . . . . . . . . . . . . . . . . 63

Hernandez v. Nat’l Restoration Techs.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 251 (Tex. December 22, 2006) [06-0454]. . . . . . . . . . . . . . . . . . . 73

Higgins v. Randall County Sheriff’s Office,
193 S.W.3d 898 (Tex. May 26, 2006) [05-0095]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Hillcrest Baptist Med. Ctr. v. Wade,
172 S.W.3d 55 (Tex. App.—Waco 2005), pet. granted,
49 Tex. Sup. Ct. J. 1041 (September 25, 2006) [05-0773]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Hoover Slovacek L.L.P. v. Walton,
206 S.W.3d 557 (Tex. November 3, 2006) [04-1004]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Houston Mun. Employees Pension Sys. v. Ferrell,
177 S.W.3d 502 (Tex. App.–Houston [1st Dist.] 2005), pet. granted,
49 Tex. Sup. Ct. J. 1040 (September 25, 2006) [05-0587]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Hyundai Motor Co. v. Vasquez,
189 S.W.3d 743 (Tex. March 10, 2006) [03-0914]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

In re A.M.,
192 S.W.3d 570 (Tex. May 5, 2006) [03-0509]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

In re Angelini,
186 S.W.3d 558 (Tex. February 24, 2006) [06-0088]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

In re Applied Chem. Magnesias Corp., 206 S.W.3d 114 (Tex. September 5, 2006) [04-1119]. . . . . . . . 66

In re AutoNation, Inc.,
186 S.W.3d 576 (Tex. App.—Houston [14th Dist.] 2005),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. J. 567 (May 8, 2006) [05-0311]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

In re Barnett,
207 S.W.3d 326 (Tex. April 21, 2006) [06-0275]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

In re Bexar County Criminal Dist. Attorney’s Office,
179 S.W.3d 47 (Tex. App.—San Antonio 2005),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0613]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

In re Brookshire Grocery Co.,
160 S.W.3d 288 (Tex. App.—Texarkana 2005),
argument granted on petition for writ of mandamus,
49 Tex. Sup. Ct. J. 360 (February 27, 2006) [05-0300]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73




                                                                 91
Supreme Court Update
January 1, 2006 – December 31, 2006

In re Carlisle,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 262 (Tex. January 17, 2006) [06-0025]. . . . . . . . . . . . . . . . . . . . . 21

In re D. Wilson Constr.,
196 S.W.3d 774 (Tex. June 30, 2006) [05-0326], consolidated with
Am. Standard and the Trane Co. V. Brownsville Indep. Sch. Dist.,
196 S.W.3d 774 (Tex. June 30, 2006) [05-0327]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

In re Dallas Peterbilt, Ltd. L.L.P.,
196 S.W.3d 161 (Tex. June 16, 2006) [05-0706]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

In re Dillard Dep’t Stores, Inc.,
198 S.W.3d 778 (Tex. March 6, 2006) [04-1132]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

In re Dillard Dep’t Stores, Inc.,
186 S.W.3d 514 (Tex. January 27, 2006) [05-0250]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

In re Ford Motor Co.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 291 (Tex. December 22, 2006) [05-0696]. . . . . . . . . . . . . . . . . . . 64

In re Francis,
186 S.W.3d 534 (Tex. January 27, 2006) [06-0040]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

In re Gen. Elec. Capital Corp.,
203 S.W.3d 314 (Tex. September 22, 2006) [05-0482]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

In re Graco Children’s Prods., Inc.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 87 (Tex. October 27, 2006) [05-0479]. . . . . . . . . . . . . . . . . . . . . . 65

In re H.R.M.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 192 (Tex. December 1, 2006) [06-0270]. . . . . . . . . . . . . . . . . . . . 30

In re Holcomb,
186 S.W.3d 553 (Tex. January 27, 2006) [06-0042]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

In re Karen Mays-Hooper,
189 S.W.3d 777 (Tex. April 7, 2006) [04-1040]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

In re Lumbermens Mut. Cas. Co.,
184 S.W.3d 718 (February 3, 2006) [04-0245]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

In re McAllen Med. Ctr., Inc.,
2005 WL 2456602 (Tex. App.—Corpus Christi 2005),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. J. 951 (August 28, 2006) [05-0892]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

In re Palm Harbor Homes, Inc.,
195 S.W.3d 672 (Tex. June 9, 2006) [04-0490]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9




                                                                 92
Supreme Court Update
January 1, 2006 – December 31, 2006

In re R.R.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 195 (Tex. December 1, 2006) [06-0460]. . . . . . . . . . . . . . . . . . . . 69

In re Saperstein,
2006 WL 278245 (Tex. App.—Houston [14th Dist.] 2006),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. 951 (August 28, 2006) [06-0129]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

In re Sharp,
186 S.W.3d 556 (Tex. January 24, 2006) [06-0061]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

In re Smith,
192 S.W.3d 564 (Tex. May 5, 2006) [06-0107]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

In re Sw. Bell Tel. Co.,
2004 WL 2365194 (Tex. App.—Corpus Christi 2004),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. J. 1041 (September 25, 2006) [05-0951]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

In re Sw. Bell Tel. Co.,
2005 WL 1405777 (Tex. App.—Corpus Christi 2005),
argument granted on pet. for writ of mandamus,
49 Tex. Sup. Ct. J. 360 (February 7, 2006) [05-0511]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 49

In re Team Rocket,
2006 WL 1071213 (Tex. App.—Houston [14th Dist.] 2006),
argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [06-0414]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

In re Tex. Dept. of Family and Protective Servs.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 238 (Tex. December 15, 2006) [04–1043]. . . . . . . . . . . . . . . . . . . 30

In re the Estate of Marvin Nash,
164 S.W.3d 856 (Tex. App.—Beaumont 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0538]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

In re The Lynd Co.,
195 S.W.3d 682 (Tex. June 12, 2006) [05-0432]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

In the Interest of M.C.C.,
187 S.W.3d 383 (Tex. January 27, 2006) [04-0787]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

In the Matter of H.V.,
179 S.W.3d 746 (Tex. App.—Fort Worth 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [06-0005]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Jackson v. Axelrad,
142 S.W.3d 418 (Tex. App.—Houston[14th Dist.] 2004), pet. granted,
49 Tex. Sup. Ct. J. 14 (January 23, 2006) [04-0923]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54



                                                                 93
Supreme Court Update
January 1, 2006 – December 31, 2006

Jernigan v. Langley,
195 S.W.3d 91 (Tex. June 9, 2006) [05-0299]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Kallam v. Boyd,
152 S.W.3d 670 (Tex. App.—Fort Worth 2004), pet. granted,
49 Tex. Sup. Ct. J. 966 (September 5, 2006) [05-0027]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Kiefer v. Touris,
197 S.W.3d 300 (Tex. May 26, 2006) [05-0651]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Kroger Co. v. Elwood,
197 S.W.3d 793 (Tex. May 12, 2006) [04-1133]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Kroger Tex. Ltd. P’ship v. Suberu,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 592 (Tex. May 5, 2006) [03-0913]. . . . . . . . . . . . . . . . . . . . . . . . 47

Land Rover U.K., Ltd. v. Hinojosa,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 236 (Tex. December 15, 2006) [04-0794]. . . . . . . . . . . . . . . . . . . 12

Larson v. Downing,
197 S.W.3d 303 (Tex. June 12, 2006) [05-0155]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Lexington Ins. Co. v. Strayhorn,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 181 (Tex. December 1, 2006) [04-0429]. . . . . . . . . . . . . . . . . . . . 42

LMB, Ltd. v. Moreno,
201 S.W.3d 686 (Tex. August 31, 2006) [05-0764]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Loram Maintenance of Way, Inc. v. Ianni,
___ S.W.3d ___, 49 Tex. Sup. Ct. J. 874 (Tex. June 30, 2006) [04-0666]. . . . . . . . . . . . . . . . . . . . . . . 24

Mack Trucks, Inc. v. Tamez,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 80 (Tex. October 27, 2006) [03-0526]. . . . . . . . . . . . . . . . . . . . . . 76

Marshall v. Housing Auth.,
198 S.W.3d 782 (Tex. March 3, 2006) [04-0147]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Matagorda County Hosp. Dist. v. Burwell,
189 S.W.3d 738 (Tex. February 27, 2006) [03-0111]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

McMahon Contr., L.P. v. City of Carrollton,
197 S.W.3d 387 (Tex. June 30, 2006) [04-0622]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Meyer v. WMCO-GP, L.L.C.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 264 (Tex. December 22, 2006) [04-0252]. . . . . . . . . . . . . . . . . . . . 9

Mid-Century Ins. Co. v. Ademaj,
2004 WL 2694475 (Tex. App.—Tyler 2004), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2001) [05-0016]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43



                                                                 94
Supreme Court Update
January 1, 2006 – December 31, 2006

Minn. Life Ins. Co. v. Vasquez,
192 S.W.3d 774 (Tex. April 7, 2006) [04-0477]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Mission Consol. Indep. Sch. Dist. v. Garcia,
166 S.W.3d 902 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-0734],
consolidated for oral argument with Mission Consol. Indep. Sch. Dist. v. Sotuyo,
166 S.W.3d 902 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-0762],
consolidated for oral argument with Mission Consol. Indep. Sch. Dist. v. Medina,
166 S.W.3d 902 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-0763]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Montgomery County v. Park,
2005 WL 2667488 (Tex. App.—Waco 2005), pet. granted,
50 Sup. Ct. J. 218 (December 18, 2006) [05-1023]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Morales v. Liberty Mut. Ins. Co.,
169 S.W.3d 485 (Tex. App.—El Paso 2005), pet. granted,
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0754]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co.,
150 S.W.3d 718 (Tex. App.—Austin 2004), pet. granted,
49 Tex. Sup. Ct. J. 255 (January 23, 2006) [05-0006]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Nat’l Union Fire Ins. Co. v. Crocker,
certified question accepted, 50 Tex. Sup. Ct. J. 10 (October 16, 2006) [06-0868]. . . . . . . . . . . . . . . . . 39

Owens & Minor, Inc. v. Ansell Healthcare Prods., Inc.,
certified question accepted, 49 Sup. Ct. J. 567 (May 8, 2006) [06-0322]. . . . . . . . . . . . . . . . . . . . . . . . 77

PAJ, Inc. v. Hanover Ins. Co.,
170 S.W.3d 258 (Tex. App.–Dallas 2005), pet. granted,
49 Tex. Sup. Ct. J. 567 (May 5, 2006) [05-0849]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Parker v. Barefield,
206 S.W.3d 119 (Tex. October 27, 2006) [06-0201]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Perry Homes v. Cull,
173 S.W.3d 565 (Tex. App.—Fort Worth 2005), pet. granted,
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-0882]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Peña v. McDowell,
201 S.W.3d 665 (Tex. August 31, 2006) [05-0546]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

PHC-Minden, L.P. v. Kimberly-Clark Corp.,
2005 WL 1979102 (Tex. App.—Tyler 2005), pet. granted,
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0823]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48




                                                                 95
Supreme Court Update
January 1, 2006 – December 31, 2006

PKG Contr., Inc. v. City of Mesquite,
197 S.W.3d 388 (Tex. June 30, 2006) [04-1139]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Place Custom Homes, Inc.,
192 S.W.3d 564 (Tex. May 5, 2006) [06-0108]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Pleasant Glade Assembly of God v. Schubert,
174 S.W.3d 388 (Tex. App.—Fort Worth 2005), pet. granted,
49 Tex. Sup. Ct. J. 1041 (September 25, 2006) [05-0916]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

PR Invs. v. State,
180 S.W.3d 654 (Tex. App.—Houston [14th Dist.] 2005), pet. granted,
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [04-0431]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Pruett v. Harris County Bail Bond Bd.,
177 S.W.3d 260 (Tex. App.—Houston [1st Dist.] 2005), pet. granted,
49 Tex. Sup. Ct. J. 966 (September 5, 2006) [05-0283]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Ray Malooly Trust v. Juhl,
186 S.W.3d 568 (Tex. February 24, 2006) [04-0685]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Reata Constr. Corp. v. City of Dallas,
197 S.W.3d 317 (Tex. June 30, 2006) [02-1031]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Reliance Nat’l Indem. Co. v. Advance’d Temps., Inc.,
165 S.W.3d 1 (Tex. App.—Corpus Christi 2004), pet. granted,
49 Tex. Sup. Ct. J. 567 (May 8, 2006) [05-0558]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Ross v. Nat’l Ctr. for the Employment of the Disabled,
197 S.W.3d 795 (Tex. June 16, 2006) [05-1082]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67, 69

Ross v. Nat’l Ctr. for the Employment of the Disabled,
201 S.W.3d 694 (Tex. August 31, 2006) [05-0534]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Sattrfield & Pontikes Constr., Inc. v. Irving Indep. Sch. Dist.,
197 S.W.3d 390 (Tex. June 30, 2006) [04-0175]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Seagull Energy E&P, Inc. v. Eland Energy, Inc.,
207 S.W.3d 342 (Tex. June 16, 2006) [04-0662]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Shupe v. Lingafelter,
192 S.W.3d 577 (Tex. May 5, 2006) [05-0083]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Sisk Utils., Inc. v. City of Greenville,
197 S.W.3d 389, 49 Tex. Sup. Ct. J. 916 (Tex. June 30, 2006) [05-0601]. . . . . . . . . . . . . . . . . . . . . . . 37

SSP Partners v. Gladstrong Invs. (USA) Corp.,
169 S.W.3d 27 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 151 (December 4, 2006) [05-0721]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77



                                                                 96
Supreme Court Update
January 1, 2006 – December 31, 2006

St. Luke’s Episcopal Hosp. v. Marks,
193 S.W.3d 575 (Tex. May 5, 2006) [05-0693]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

State Farm Life Ins. Co. v. Martinez,
174 S.W.3d 772 (Tex. App.—Waco 2005), pet granted,
49 Tex. Sup. Ct. J. 966 (September 5, 2006) [05-0812]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

State Farm Mut. Auto. Ins. Co. v. Nickerson,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 268 (Tex. December 22, 2006) [04-0427]. . . . . . . . . . . . . . . . . . . 46

State Farm Mut. Auto. Ins. Co. v. Norris,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 269 (Tex. December 22, 2006) [04-0514]. . . . . . . . . . . . . . . . . . . 46

State of Texas v. Shumake,
199 S.W.3d 279 (Tex. June 26, 2006) [04-0460]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

State v. Delany,
197 S.W.3d 297 (Tex. April 28, 2006) [04-0628]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

State v. Holland,
161 S.W.3d 227 (Tex. App.—Corpus Christi 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0292]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

State v. Oakley,
181 S.W.3d 855 (Tex. App.—Austin 2005), pet. granted,
50 Tex. Sup. Ct. J. 65 (October 30, 2006) [06-0050],
consolidated for oral argument with State v. Oakley,
2006 WL 152108 (Tex. App.—Austin 2006), pet. granted,
50 Tex. Sup. Ct. J. 65 (October 30, 2006) [06-0172]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Stephen F. Austin Univ. v. Flynn,
2004 WL 948885 (Tex. App.—Tyler 2004), pet. granted,
49 Tex. Sup. Ct. J. 782 (June 30, 2006) [04-0515]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Sudan v. Mackenzie,
199 S.W.3d 291 (Tex. April 21, 2006) [04-0921]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Sw. Bell Tel. Co. v. Mitchell,
2005 WL 154203 (Tex. App.—San Antonio 2005), pet. granted,
49 Tex. Sup. Ct. J. 360 (February 27, 2006) [05-0171]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Tex. A&M Univ. Sys. v. Koseoglu,
167 S.W.3d 374 (Tex. App.—Waco 2005), pet. granted,
49 Tex. Sup. Ct. J. 642 (May 29, 2006) [05-0321]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Tex. Dep’t of Pub. Safety v. Alford,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 188 (Tex. December 1, 2006) [05-0164]. . . . . . . . . . . . . . . . . . . . . 3

The Long Trusts v. Griffin,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 209 (Tex. December 8, 2006) [04-0825]. . . . . . . . . . . . . . . . . . . . 17


                                                                 97
Supreme Court Update
January 1, 2006 – December 31, 2006

The Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon ex rel. Shultz,
195 S.W.3d 98 (Tex. June 12, 2006) [05-0594]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Thomas v. Long,
207 S.W.3d 334 (Tex. April 21, 2006) [03-0204]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Tony Gullo Motors I, L.P. v. Chapa,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 278 (Tex. December 22, 2006) [04-0961]. . . . . . . . . . . . . . . . . . . 13

Tooke v. City of Mexia,
197 S.W.3d 325 (Tex. June 30, 2006) [03-0878]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Tran v. Macha,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 186 (Tex. December 1, 2006) [04-1107]. . . . . . . . . . . . . . . . . . . . 78

United Servs. Auto. Ass’n v. Brite,
161 S.W.3d 566 (Tex. App.—San Antonio 2005), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [05-0132]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

VanDevender v. Woods,
175 S.W.3d 545 (Tex. App.—Beaumont 2005), pet. granted,
49 Tex. Sup. Ct. J. 950 (August 28, 2006) [05-0956]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Via Net v. TIG Ins. Co.,
___ S.W.3d ___, 50 Tex. Sup Ct. J. 296 (Tex. December 22, 2006) [05-0785]. . . . . . . . . . . . . . . . . . . 16

W. Steel Co. v. Altenburg,
206 S.W.3d 121 (Tex. October 27, 2006) [05–0630]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Wal-Mart Stores, Inc. v. Spates,
186 S.W.3d 566 (Tex. February 24, 2006) [04-1046]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Westbrook v. Penley,
146 S.W.3d 220 (Tex. App.—Fort Worth 2004), pet. granted,
49 Tex. Sup. Ct. J. 509 (April 24, 2006) [04-0838]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Wilhelm v. Flores,
195 S.W.3d 96 (Tex. June 9, 2006) [04-0208]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Willis v. Donnelly,
199 S.W.3d 262 (Tex. June 2, 2006) [04-0409]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Yancy v. United Surgical Partners Int’l, Inc.,
170 S.W.3d 185 (Tex. App.—Dallas 2005), pet. granted,
50 Tex. Sup. Ct. J. 65 (October 30, 2006) [05-0925]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52




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