SUPREME COURT UPDATE PHIL JOHNSON Justice Supreme Court of Texas by wuxiangyu

VIEWS: 38 PAGES: 120

									              SUPREME COURT UPDATE




                   PHIL JOHNSON
                        Justice
                 Supreme Court of Texas

               MARCY HOGAN GREER
                 Fulbright & Jaworski




                   State Bar of Texas
     TH
24        ANNUAL LITIGATION UPDATE INSTITUTE
                  January 17-18, 2008
                       Lost Pines

                     CHAPTER 14
                                       PHIL JOHNSON

                      JUSTICE, SUPREME COURT OF TEXAS


        Justice Johnson was appointed to the Texas Supreme Court in March 2005 and was elected
in November 2006. At the time of his appointment to the Supreme Court he was serving as Chief
Justice of the Seventh Court of Appeals which sits in Amarillo. Justice Johnson was elected to the
Seventh Court of Appeals in 1998 and was elected Chief Justice in 2002. He practiced law from
1975 until 1998 with the Lubbock law firm of Crenshaw, Dupree & Milam, L.L.P. His practice mainly
involved civil litigation and he is board certified in civil trial law and personal injury trial law.

        Justice Johnson attended Texas Tech University School of Law, where he was a member of
the law review and graduated with honors in 1975. He is a member of the Order of the Coif and has
been designated as a Distinguished Alumnus of the Law School. He has served on numerous
committees of the State Bar, including pattern jury charge and alternative dispute resolution
committees. He is a member of the College of the State Bar, is a Life Fellow of both the Texas and
American Bar Foundations, and has served as president of the Lubbock County Bar Association.
From 1965 until 1972 he served in the U.S. Air Force as a pilot. He is a Vietnam veteran.

       Justice Johnson and his wife Carla have five children.
                                                   BIOGRAPHY: Marcy Hogan Greer


                                Marcy Hogan Greer
                                Partner

                                "Complex litigation problems? We provide comprehensive solutions tailored to
                                your needs."

                                AREAS OF CONCENTRATION
                                • Appellate
                                • Complex Commercial Litigation
                                • Product Liability
                                • Pharmaceutical and Medical Devices
Marcy Hogan Greer               EXPERIENCE
mgreer@fulbright.com
D: +1 512 536 4581              Marcy Greer, a partner in Fulbright & Jaworski L.L.P.’s Austin office, joined the
                                firm in 1994. Her practice is focused on civil trial and appellate litigation. Marcy
Austin                          has been board certified in Civil Appellate Law by the Texas Board of Legal
600 Congress Avenue             Specialization since 1997.
Suite 2400
Austin, TX 78701-2978
T: +1 512 474 5201              Before joining the Firm, she was a law clerk for the Honorable Carolyn D. King,
F: +1 512 536 4598              who is the former Chief Judge of the United States Court of Appeals for the Fifth
                                Circuit.
Industries
 •   Pharmaceutical
 •   Insurance
                                Marcy’s practice focuses upon the “law” side of the trial practice, principally
 •   Oil & Gas                  litigation strategy and procedures in complex civil matters. Marcy has handled
 •   Health Care Products and   trial and appellate proceedings throughout the country, including a wide range of
     Services
                                substantive and procedural subject areas, such as administrative agency
                                challenges, arbitration, antitrust, class actions, civil rights, contracts, health care,
                                intellectual property disputes, labor and employment, mass torts, oil and gas,
                                pharmaceutical and products, real estate, removals, and utilities.

                                Marcy is a member of Fulbright’s Women in the Firm and Professional Working
                                Group, and in that capacity has participated in a number of initiatives focused
                                upon the recruitment, retention and advancement of women and minorities.

                                PROFESSIONAL ACTIVITIES AND MEMBERSHIPS
                                • State Bar of Texas Appellate Section
                                        •    Treasurer (2006-2007)
                                        •    Secretary (2005-2006)
                                        •    Pro Bono Committee, Co-Chair (2004-2006)
                                        •    Website Committee, Co-Chair (2003-2004)
                                        •    Council Member (2000-2003)
                                •   Robert W. Calvert American Inn of Court, Barrister (2005-2008)
___________________________________________________

      SUPREME COURT UPDATE
___________________________________________________




                     Phil Johnson
                       Justice
                Supreme Court of Texas


                   Heather Holmes
                     Staff Attorney


                    Omari Jackson
                       Law Clerk


                 Thomas McCulloch
                       Law Clerk


                  Georgie Gonzales
                  Executive Assistant




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




___________________________________________________

  November 1, 2006 – October 31, 2007
___________________________________________________
Supreme Court Update
November 1, 2006 – October 31, 2007

                                                         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 and Human Servs. Comm’n, S.W.3d , 50 Tex.
                      Sup. Ct. J. 1143 (Tex. August 1, 2007) [05-0372]. . . . . . . . . . . . . . . . . . . . . . . 1
      B. Driver’s License Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
             1. Tex. Dep’t of Pub. Safety v. Alford, 209 S.W.3d 101 (Tex. December 1, 2006) [05-
                      0164]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
      C. Exhaustion of Administrative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
             1. Christus Health Gulf Coast v. Aetna, Inc., S.W.3d , 50 Tex. Sup. Ct. J. 1148 (Tex.
                      August 31, 2007) [05-0710]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
      D. Public Utility Commission/Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
             1. In re Sw. Bell Tel. Co., 226 S.W.3d 400 (Tex. June 1, 2007) [05-0511]. . . . . . . . . . 2
             2. In re Sw. Bell Tel. Co., L.P., S.W.3d , 50 Tex. Sup. Ct. J. 1178 (Tex. August 31,
                      2007) [05-0951]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

III. AGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
       A. Apparent Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
             1. Gaines v. Kelly, S.W.3d , 50 Tex. Sup. Ct. J. 1054 (Tex. August 24, 2007) [05-
                         1092]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

IV. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
      A. Economic Duress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
             1. In re RLS Legal Solutions, LLC, 221 S.W.3d 629 (Tex. April 20, 2007) [05-0290]. 4
      B. Enforcement of Arbitration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
             1. In re U.S. Home Corp., S.W.3d , 51 Tex. Sup. Ct. J. 42 (Tex. October 12, 2007) [03-
                      1080]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
      C. Enforcement/Non-Signatories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             1. In re H&R Block Fin. Advisors, Inc., S.W.3d , 50 Tex. Sup. Ct. J. 1029 (Tex. August
                      24, 2007) [04-0061]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             2. In re Kaplan Higher Educ. Corp., S.W.3d , 50 Tex. Sup. Ct. J. 1058 (Tex. August 24,
                      2007) [06-0072]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
             3. In re Merrill Lynch Trust Co. FSB, S.W.3d , 50 Tex. Sup. Ct. J. 1139 (Tex. August
                      31, 2007) [03-1059]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
             4. In re Merrill Lynch Trust Co. FSB, S.W.3d , 50 Tex. Sup. Ct. J. 1030 (Tex. August
                      24, 2007) [04-0865]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
             5. Meyer v. WMCO-GP, L.L.C., 211 S.W.3d 302 (Tex. December 22, 2006) [04-
                      0252]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
      D. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
             1. In re Bank One, 216 S.W.3d 825 (Tex. February 23, 2007) [06-0093]. . . . . . . . . . . . 7
             2. 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]. . . . . . . . . . . . . . . . . . . . . 8




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November 1, 2006 – October 31, 2007

V. ATTORNEYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
      A. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
             1. Hoover Slovacek L.L.P. v. Walton, 206 S.W.3d 557 (Tex. November 3, 2006) [04-
                         1004]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
             2. Med. City Dallas, Ltd. v. Carlisle Corp., 196 S.W.3d 855 (Tex. App.—Dallas 2006), pet.
                         granted, 50 Tex. Sup. Ct. J. 712 (May 7, 2007) [06-0660]. . . . . . . . . . . . . . . . . 9
             3. Varner v. Cardenas, 218 S.W.3d 68 (Tex. March 2, 2007) [06-0212]. . . . . . . . . . . . 9
             4. Young v. Qualls, 223 S.W.3d 312 (Tex. May 4, 2007) [05-1091]. . . . . . . . . . . . . . 10
      B. Former-client Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
             1. In re Basco, 221 S.W.3d 637 (Tex. April 20, 2007) [05-0771]. . . . . . . . . . . . . . . . . 10
      C. Guardian Ad Litem Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
             1. Land Rover U.K., Ltd. v. Hinojosa, 210 S.W.3d 604 (Tex. December 15, 2006) [04-
                         0794]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      D. Liability to Non-clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
             1. Chu v. Hong, 185 S.W.3d 507 (Tex. App.—Fort Worth 2005), pet. granted, 50 Tex. Sup.
                         Ct. J. 667 (April 30, 2007) [06-0127]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

VI. CLASS ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      A. Assignment of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
             1. Sw. Bell Tel. Co. v. Marketing On Hold, Inc., 170 S.W.3d 814 (Tex. App.—Corpus
                     Christi 2005), pet. granted, 50 Tex. Sup. Ct. J. 446 (February 26, 2007) [05-
                     0748]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
      B. Choice of Law/Res Judicata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
             1. Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430 (Tex. March 2, 2007) [03-
                     0505]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
      C. Predominance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
             1. Stonebridge Life Ins. Co. v. Pitts, S.W.3d , 50 Tex. Sup. Ct. J. 1195 (Tex. August
                     31, 2007) [06-0655]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

VII. CONSTITUTIONAL LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
      A. Due Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
             1. County of Dallas v. Walton, 216 S.W.3d 367 (Tex. February 16, 2007) [04-0631]. 13
             2. County of Dallas v. Wiland, 216 S.W.3d 344 (Tex. February 16, 2007) [04-0247]. 13
      B. Punitive/Exemplary Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
             1. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. December 22, 2006) [04-
                      0961]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
      C. Religion Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
             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]. . . . . . . . . . 15
             2. HEB Ministries, Inc. v. Texas Higher Educ. Coordinating Bd., S.W.3d , 50 Tex. Sup.
                      Ct. J. 1094 (Tex. August 31, 2007) [03-0995]. . . . . . . . . . . . . . . . . . . . . . . . . . 15
             3. Westbrook v. Penley, 231 S.W.3d 389 (Tex. June 29, 2007) [04-0838]. . . . . . . . . . 16
      D. Spousal Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
             1. In re Green, 221 S.W.3d 645 (Tex. April 20, 2007) [06-0496]. . . . . . . . . . . . . . . . . 16

VIII. CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
       A. Condition Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
             1. Solar Applications Eng’g, Inc. v. T.A. Operating Corp., 191 S.W.3d 173 (Tex.
                     App.—San Antonio 2006), pet. granted, 50 Tex. Sup. Ct. J. 667 (April 30, 2007)
                     [06-0243]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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           B. Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
                  1. First Commerce Bank v. Palmer, 226 S.W.3d 396 (Tex. June 1, 2007) [05-0686]. . 17
           C. Discovery Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
                  1. Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. December 22, 2006) [05-0785]. . . 17
           D. Fraudulent Inducement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
                  1. Forest Oil Corp. v. McAllen, 2005 WL 3435061 (Tex. App.—Corpus Christi 2005), pet.
                           granted, 50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0178]. . . . . . . . . . . . . . 18
           E. Statute of Frauds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
                  1. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632 (Tex. April 20, 2007) [04-0851]. . . . 18
                  2. Quigley v. Bennett, 227 S.W.3d 51 (Tex. June 8, 2007) [05-0870]. . . . . . . . . . . . . 19
                  3. The Long Trusts v. Griffin, 222 S.W.3d 412 (Tex. December 8, 2006) [04-0825]. 19
           F. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
                  1. Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905 (Tex. April 20, 2007) [05-
                           0197]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
                  2. JCW Elecs., Inc. v. Garza, 176 S.W.3d 618 (Tex. App.—Corpus Christi 2005), pet.
                           granted, 50 Tex. Sup. Ct. J. 910 (June 25, 2007) [05-1042]. . . . . . . . . . . . . . . 20

IX. COUNTY OFFICIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
      A. Removal from Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
            1. In re Bazan, 2006 WL 3095888 (Tex. App.—Corpus Christi 2006), argument granted
                    on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 842 (June 8, 2007) [06-
                    0952]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

X. DRAM SHOP ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
     A. Proportionate Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
            1. F.F.P. Operating Partners, L.P. v. Duenez, S.W.3d , 50 Tex. Sup. Ct. J. 764 (Tex.
                    May 11, 2007) [02-0381]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
     B. Safe-Harbor Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
            1. 20801, Inc. v. Parker, 194 S.W.3d 556 (Tex. App.—Houston [14th Dist.] 2006), pet.
                    granted, 50 Tex. Sup. Ct. J. 532 (March 12, 2007) [06-0574]. . . . . . . . . . . . . 22

XI. ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
      A. Local Option Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
            1. In re Davis, 2007 WL 530033 (Tex. App.—Dallas 2007), argument granted on pet. for
                     writ of mandamus, 50 Tex. Sup. Ct. J. 1074 (September 4, 2007) [07-0147]. . 22

XII. EMPLOYMENT LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
      A. Constructive Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
            1. Baylor Univ. v. Coley, 221 S.W.3d 599 (Tex. April 20, 2007) [04-0916]. . . . . . . . 23
      B. Law Enforcement Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
            1. VanDevender v. Woods, 222 S.W.3d 430 (Tex. April 27, 2007) [05-0956]. . . . . . . 23
      C. Whistleblower Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
            1. City of Waco v. Lopez, 183 S.W.3d 825 (Tex. App.—Waco 2005), pet. granted, 50 Tex.
                    Sup. Ct. J. 674 (April 30, 2007) [06-0089]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
            2. Montgomery County v. Park, 2005 WL 2667488 (Tex. App.—Waco 2005), pet. granted,
                    50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-1023]. . . . . . . . . . . . . . . . . 24




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XIII. EVIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
       A. Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
              1. Guevara v. Ferrer, S.W.3d , 50 Tex. Sup. Ct. J. 1182 (Tex. August 31, 2007) [05-
                      1100]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
       B. Defendant’s Financial Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
              1. Reliance Steel & Aluminum Co. v. Sevcik, 2006 WL 563044 (Tex. App.—Corpus
                      Christi 2006), pet. granted, 50 Tex. Sup. Ct. J. 1014 (August 24, 2007) [06-
                      0422]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
       C. Interested Party Testimony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
              1. Wilz v. Flournoy, 228 S.W.3d 674 (Tex. June 29, 2007) [06-0913]. . . . . . . . . . . . . 25
       D. Nonsuited Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
              1. Bay Area Healthcare Group, Ltd. v. McShane,                                   S.W.3d , 50 Tex. Sup. Ct. J. 866
                      (Tex. June 8, 2007) [05-1069]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

XIV. EXPUNCTION OF ARREST RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
      A. Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
             1. State v. Beam, 226 S.W.3d 392 (Tex. June 1, 2007) [06-0974]. . . . . . . . . . . . . . . . 26

XV. FAMILY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
      A. Grandparent Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
            1. In re Derzapf, 219 S.W.3d 327 (Tex. March 23, 2007) [06-0669]. . . . . . . . . . . . . . 27
      B. Termination of Parental Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
            1. In re H.R.M., 209 S.W.3d 105 (Tex. December 1, 2006) [06-0270]. . . . . . . . . . . . . 27
            2. In re Tex. Dept. of Family and Protective Servs., 210 S.W.3d 609 (Tex. December 15,
                     2006) [04–1043]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

XVI. FEDERAL PREEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
      A. Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
             1. Dallas Area Rapid Transit v. Amalgamated Transit Union Local No. 1338, 173 S.W.3d
                      896 (Tex. App.—Dallas 2005), pet. granted, 50 Tex. Sup. Ct. J. 929 (July 2, 2007)
                      [06-0034]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
      B. Railroads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
             1. Mo. Pac. R.R. v. Limmer, 180 S.W.3d 803 (Tex. App.—Houston [14th Dist.] 2005), pet.
                      granted, 50 Tex. Sup. Ct. J. 801 (June 4, 2007) [06-0023]. . . . . . . . . . . . . . . . 28

XVII. GOVERNMENTAL IMMUNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
      A. Assignability of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
             1. State v. Oakley, 227 S.W.3d 58 (Tex. June 8, 2007) [06-0050, 06-0172]. . . . . . . . 29
      B. Contract Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
             1. State v. Holland, 221 S.W.3d 639 (Tex. April 20, 2007) [05-0292]. . . . . . . . . . . . . 29
      C. Declaratory Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
             1. City of El Paso v. Heinrich, 198 S.W.3d 400 (Tex. App.—El Paso 2006), pet. granted,
                     50 Tex. Sup. Ct. J. 910 (June 25, 2007) [06-0778]. . . . . . . . . . . . . . . . . . . . . . 30
             2. City of Houston v. Williams, 216 S.W.3d 827 (Tex. February 23, 2007) [06-
                     0159]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
      D. Derivative Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
             1. Ben Bolt-Palito Blanco Consol. ISD v. Tex. Political Subdivisions Prop./Cas. Joint Self-
                     Ins. Fund, 212 S.W.3d 320 (Tex. December 29, 2006) [05-0340]. . . . . . . . . . 31
      E. Police Pursuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
             1. City of San Antonio v. Ytuarte, 229 S.W.3d 318 (Tex. May 4, 2007) [05-0991]. . . 31

                                                                         v
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November 1, 2006 – October 31, 2007

           F. Recreational Use Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
                  1. Stephen F. Austin State Univ. v. Flynn, 228 S.W.3d 653 (Tex. June 29, 2007) [04-
                            0515]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
           G. Suits by the State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
                  1. City of Galveston v. State, 217 S.W.3d 466 (Tex. March 2, 2007) [04-0890]. . . . . 32
           H. Texas Tort Claims Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
                  1. City of Dallas v. Thompson, 210 S.W.3d 601 (Tex. December 1, 2006) [05-0787]. 32
                  2. 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]. . 33
           I. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
                  1. Abilene Housing Auth. v. Gene Duke Builders, Inc., 226 S.W.3d 415 (Tex. June 1, 2007)
                            [05-0631]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
                  2. City of Arlington v. Matthews, 226 S.W.3d 417 (Tex. June 1, 2007) [06-0251]. . . 33
                  3. City of Dallas v. Saucedo-Falls, 218 S.W.3d 79 (Tex. March 9, 2007) [05-0973]. . 34
                  4. City of Elsa v. M.A.L., 226 S.W.3d 390 (Tex. June 1, 2007) [06-0516]. . . . . . . . . 34
                  5. City of Pasadena v. Kinsel Indus., Inc., 227 S.W.3d 651 (Tex. June 1, 2007) [06-
                            0353]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
                  6. City of Sweetwater v. Waddell, 218 S.W.3d 80 (Tex. March 9, 2007) [05-1033]. . 35
                  7. City of Texarkana v. City of New Boston, 228 S.W.3d 648 (Tex. June 1, 2007) [04-
                            0797]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
                  8. Dallas Fire Fighters Ass’n v. City of Dallas, 231 S.W.3d 388 (Tex. June 1, 2007) [04-
                            0821]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
                  9. Fort Worth Indep. Sch. Dist. v. Serv. Employment Redev., S.W.3d , 50 Tex. Sup. J.
                            1053 (Tex. August 24, 2007) [05-0427]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
                  10. Lamesa Indep. Sch. Dist. v. Booe, S.W.3d , 51 Tex. Sup. Ct. J. 24 (Tex. September
                            28, 2007) [05-0959]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
                  11. State v. Fid. & Deposit Co. of Maryland, 223 S.W.3d 309 (Tex. May 4, 2007) [04-
                            0180]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
                  12. State v. Precision Solar Controls, Inc., 220 S.W.3d 494 (Tex. April 5, 2007) [06-
                            0348]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
                  13. Tomball Hosp. Auth. v. Harris County Hosp. Dist., 178 S.W.3d 244
                            (Tex.App.—Houston [14th Dist.] 2005), pet. granted, 50 Tex. Sup. Ct. J. 1014
                            (August 24, 2007) [05-0986]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

XVIII. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
       A. Class Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
              1. Farmers Group, Inc. v. Lubin, 222 S.W.3d 417 (Tex. April 27, 2007) [05-0169]. . 37
       B. Coverage by Estoppel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
              1. Ulico Cas. Co. v. Allied Pilots Ass’n, 187 S.W.3d 91 (Tex. App.—Fort Worth 2005),
                     pet. granted, 50 Tex. Sup. Ct. J. 532 (March 9, 2007) [06-0247]. . . . . . . . . . . 38
       C. Duty to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
              1. Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co., certified question accepted, 50 Tex.
                     Sup. Ct. J. 1015 (August 24, 2007) [07-0639]. . . . . . . . . . . . . . . . . . . . . . . . . . 38
              2. Lamar Homes, Inc. v. Mid-Continent Cas. Co., S.W.3d , 50 Tex. S. Ct. J. 1162 (Tex.
                     August 31, 2007) [05-0832]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39


                                                                           vi
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November 1, 2006 – October 31, 2007

                  3. Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 2006 WL 1892669 (Tex.
                           App.—Houston [14th Dist] 2006), pet. granted, 50 Tex. Sup. Ct. J. 1073 (August
                           31, 2007) [06-0867]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
           D. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
                  1. Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co., S.W.3d , 51 Tex. Sup. Ct. J. 13
                           (Tex. September 28, 2007) [05-0006]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
           E. Interpleader Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
                  1. State Farm Life Ins. Co. v. Martinez, 216 S.W.3d 799 (Tex. January 9, 2007) [05-
                           0812]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
           F. Policies/Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
                  1. State Farm Lloyds v. Johnson, 204 S.W.3d 897 (Tex. App.—Dallas 2006), pet. granted,
                           51 Tex. Sup. Ct. J. 2 (September 28, 2007) [06-1071]. . . . . . . . . . . . . . . . . . . 40
           G. Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
                  1. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83 (Tex. December 1, 2006) [04-
                           0429]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
           H. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
                  1. Fortis Benefits v. Cantu, S.W.3d , 50 Tex. Sup. Ct. J. 965 (Tex. June 29, 2007) [05-
                           0791]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
                  2. Frymire Eng’g Co., Inc. v. Jomar Int’l Ltd., 194 S.W.3d 713 (Tex. App.—Dallas 2006),
                           pet. granted, 50 Tex. Sup. Ct. J. 1015 (August 24, 2007) [06-0755]. . . . . . . . 42
                  3. Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co., S.W.3d , 51 Tex. Sup. Ct. J. 44
                           (Tex. October 12, 2007) [05-0261]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
           I. Underinsured/Uninsured Motorist Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
                  1. Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. December 22, 2006) [04-
                           0537]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
                  2. State Farm Mut. Auto. Ins. Co. v. Nickerson, 216 S.W.3d 823 (Tex. December 22, 2006)
                           [04-0427]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
                  3. State Farm Mut. Auto. Ins. Co. v. Norris, 216 S.W.3d 819 (Tex. December 22, 2006)
                           [04-0514]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

XIX. JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
      A. Minimum Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
            1. IRA Res., Inc. v. Griego, 221 S.W.3d 592 (Tex. April 20, 2007) [05-0469]. . . . . . 43
            2. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. March 2, 2007) [04-
                     0432]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
            3. PHC-Minden, L.P. v. Kimberly-Clark Corp., S.W.3d , 50 Tex. Sup. Ct. J. 1153 (Tex.
                     August 31, 2007) [05-0823]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
      B. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
            1. Tellez v. City of Socorro, 226 S.W.3d 413 (Tex. June 1, 2007) [05-0629]. . . . . . . 45

XX. JUVENILE JUSTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
      A. Confessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
            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]. . . . . . . . . . . . . . . . . . . . . 45

XXI. MEDICAL MALPRACTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
      A. Comparative Fault . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
            1. Jackson v. Axelrad, 221 S.W.3d 650 (Tex. April 20, 2007) [04-0923]. . . . . . . . . . 46




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November 1, 2006 – October 31, 2007

           B. Expert Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
                  1. Leland v. Brandal, 217 S.W.3d 60 (Tex. App.—San Antonio 2006), pet. granted, 50 Tex.
                          Sup. Ct. J. 910 (June 25, 2007) [06-1028]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
                  2. Villafani v. Trejo, 2006 WL 1284948 (Tex. App.—Corpus Christi 2006), pet. granted,
                          50 Tex. Sup. Ct. J. 447 (February 26, 2007) [06-0501]. . . . . . . . . . . . . . . . . . 47
           C. Informed Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
                  1. Schaub v. Sanchez, 229 S.W.3d 322 (Tex. June 22, 2007) [06-0375]. . . . . . . . . . . 47
           D. Interlocutory Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
                  1. Lewis v. Funderburk, 191 S.W.3d 756 (Tex. App.—Waco 2006), pet. granted, 50 Tex.
                          Sup. Ct. J. 929 (July 2, 2007) [06-0518]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
                  2. Ogletree v. Matthews, 212 S.W.3d 331 (Tex. App.—Austin 2006), pet. granted, 50 Tex.
                          Sup. Ct. J. 454 (February 23, 2007) [06-0502]. . . . . . . . . . . . . . . . . . . . . . . . . 48
           E. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
                  1. Kallam v. Boyd, 232 S.W.3d 774 (Tex. June 15, 2007) [05-0027]. . . . . . . . . . . . . . 48
           F. Pre-trial depositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
                  1. In re Jorden, 191 S.W.3d 483 (Tex. App.—Tyler 2006), argument granted on pet. for
                          writ of mandamus, 50 Tex. Sup. Ct. J. 533 (March 12, 2007) [06-0369]. . . . . 49
           G. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
                  1. Yancy v. United Surgical Partners Int’l, Inc., S.W.3d , 51 Tex. Sup. Ct. J. 63 (Tex.
                          October 19, 2007) [05-0925]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

XXII. MUNICIPAL LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
      A. Police Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
             1. City of San Antonio v. TPLP Office Park Prop., 218 S.W.3d 60 (Tex. February 9, 2007)
                     [04-1130]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

XXIII. NEGLIGENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
       A. Duty to Warn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
              1. Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649 (Tex. June 29, 2007) [05-
                      0940]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
              2. Jack in the Box, Inc. v. Skiles, 221 S.W.3d 566 (Tex. February 9, 2007) [05-
                      0911]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
       B. Premises Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
              1. Brinson Ford, Inc. v. Alger, 228 S.W.3d 161 (Tex. June 15, 2007) [05-0722]. . . . . 51
              2. Brookshire Grocery Co. v. Taylor, 222 S.W.3d 406 (Tex. December 1, 2006) [03-
                      0408]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
       C. Strict Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
              1. New Tex. Auto Auction Servs., L.P. v. Gomez de Hernandez, 193 S.W.3d 220 (Tex.
                      App.—Corpus Christi 2006), pet. granted, 50 Tex. Sup. Ct. J. 667 (April 30, 2007)
                      [06-0550]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
       D. Substantial-Factor Causation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
              1. Borg-Warner Corp. v. Flores, 232 S.W.3d 765 (Tex. June 8, 2007) [05-0189]. . . . 53

XXIV. OIL AND GAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
      A. Pooling Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
             1. Wagner & Brown, Ltd. v. Sheppard, 198 S.W.3d 369 (Tex. App.—Texarkana 2006), pet.
                    granted, 50 Tex. Sup. Ct. J. 1015 (August 24, 2007) [06-0845]. . . . . . . . . . . . 53
      B. Railroad Commission Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
             1. Seagull Energy E & P, Inc. v. R.R. Comm’n of Tex., 226 S.W.3d 383 (Tex. May 4, 2007)
                    [03-0364]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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XXV. PROBATE: WILLS, TRUSTS, ESTATES, AND GUARDIANSHIPS . . . . . . . . . . . . . . . . 54
      A. Mootness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
             1. Zipp v. Wuemling, 218 S.W.3d 71 (Tex. March 9, 2007) [05-0731]. . . . . . . . . . . . 54
      B. Right of Survivorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
             1. A.G. Edwards & Sons, Inc. v. Beyer,                               S.W.3d , 51 Tex. Sup. Ct. J. 20 (Tex.
                      September 28, 2007) [05-0580]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
      C. Teachers Retirement System Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
             1. Holmes v. Kent, 221 S.W.3d 622 (Tex. April 20, 2007) [04-0729]. . . . . . . . . . . . . 55
      D. Will Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
             1. In re Estate of Nash, 220 S.W.3d 914 (Tex. April 20, 2007) [05-0538]. . . . . . . . . . 56

XXVI. PROCEDURE—APPELLATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
      A. Dismissal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
             1. Hood v. Wal-Mart Stores, Inc., 216 S.W.3d 829 (Tex. February 23, 2007) [05-
                     0902]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
      B. Final Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
             1. Doe v. Pilgrim Rest Baptist Church, 218 S.W.3d 81 (Tex. March 9, 2007) [06-
                     0686]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
      C. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
             1. Ramos v. Richardson, 228 S.W.3d 671 (Tex. June 29, 2007) [06-0336]. . . . . . . . . 57
             2. Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835 (Tex. September 7, 2007) [05-
                     0321]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
             3. Tex. Parks & Wildlife Dep’t v. E. E. Lowrey Realty, Ltd., S.W.3d , 51 Tex. Sup. Ct.
                     J. 19 (Tex. September 28, 2007) [05-0157]. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
      D. Preservation of Error . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
             1. Equistar Chems., L.P. v. Dresser-Rand Co., S.W.3d , 50 Tex. Sup. Ct. J. 727 (Tex.
                     May 4, 2007) [04-0121]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
      E. Reduction of Damages on Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
             1. Barker v. Eckman, 213 S.W.3d 306 (Tex. December 1, 2006) [04-0194]. . . . . . . . 58
      F. Scope of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
             1. BFI Waste Sys. of N. Am., Inc., v. N. Alamo Water Supply Corp., S.W.3d , 51 Tex.
                     Sup. J. 54 (Tex. October 12, 2007) [06-0602]. . . . . . . . . . . . . . . . . . . . . . . . . . 59
      G. Standards of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
             1. Goodyear Tire & Rubber Co. v. Mayes, S.W.3d , 50 Tex. Sup. Ct. J. 886 (Tex. June
                     15, 2007) [04-0993]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
             2. Tex. Mut. Ins. Co. v. Ledbetter, 192 S.W.3d 912 (Tex. App.—Eastland 2006), pet.
                     granted, 51 Tex. Sup. Ct. J. 2 (September 28, 2007) [06-0814]. . . . . . . . . . . . 59
      H. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
             1. Ontiveros v. Flores, 218 S.W.3d 70 (Tex. March 2, 2007) [06-0607]. . . . . . . . . . . 60

XXVII. PROCEDURE—PRETRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
      A. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
             1. In re AutoNation, Inc., 228 S.W.3d 663 (Tex. June 29, 2007) [05-0311]. . . . . . . . . 60
      B. Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
             1. In re Allied Chem. Corp., 227 S.W.3d 652 (Tex. June 15, 2007) [04-1023]. . . . . . 60
             2. In re Allstate County Mut. Ins. Co., 227 S.W.3d 667 (Tex. June 15, 2007) [06-
                      0878]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
             3. In re Bexar County Criminal Dist. Attorney’s Office, 224 S.W.3d 182 (Tex. May 4,
                      2007) [05-0613]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

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                   4. In re BP Prods. N. Am., Inc., 2007 WL 1228614 (Tex. App.—Houston [1st Dist.] 2007),
                            argument granted on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 910 (June 22,
                            2007) [07-0119]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
                   5. In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434 (Tex. April 27, 2007) [04-
                            0914]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
                   6. In re Ford Motor Co., 211 S.W.3d 295 (Tex. December 22, 2006) [05-0696]. . . . . 63
                   7. In re SCI Tex. Funeral Servs., Inc., S.W.3d , 51 Tex. Sup. Ct. J. 52 (Tex. October 12,
                            2007) [06-0385]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
          C.   Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
                   1. In re Gen. Elec. Co., 2007 WL 625010 (Tex. App.—Houston [1st Dist.] 2007), argument
                            granted on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 910 (June 22, 2007) [07-
                            0195]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
          D.   Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
                   1. Low v. Henry, 221 S.W.3d 609 (Tex. April 20, 2007) [04-0452]. . . . . . . . . . . . . . . 64
          E.   Service of Citation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
                   1. Hubicki v. Festina, 226 S.W.3d 405 (Tex. June 1, 2007) [05-0357]. . . . . . . . . . . . . 65
                   2. Prouxl v. Wells, S.W.3d , 50 Tex. Sup. Ct. J. 1188 (Tex. August 1, 2007) [06-
                            0258]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
          F.   Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
                   1. S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304 (Tex. April 27, 2007) [05-0855]. . 65
          G.   Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
                   1. Elledge v. Friberg-Cooper Water Supply Corp., S.W.3d , 50 Tex. Sup. Ct. J. 1060
                            (Tex. August 24, 2007) [06-0677]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
                   2. 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]. . 66
                   3. Ford v. Exxon Mobil Chem. Co., S.W.3d , 50 Tex. Sup. Ct. J. 1191 (Tex. August 31,
                            2007) [06-0293]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
          H.   Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
                   1. 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
                   2. In re Tex. Dep’t of Transp. & In re Gillespie County, 218 S.W.3d 74 (Tex. March 9,
                            2007) [06-0289, 06-0302]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

XXVIII. PROCEDURE—TRIAL AND POST-TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
      A. Consent Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
             1. Chisholm v. Chisholm, 209 S.W.3d 96 (Tex. December 1, 2006) [05-0996]. . . . . . 68
      B. Default Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
             1. In re R.R., 209 S.W.3d 112 (Tex. December 1, 2006) [06-0460]. . . . . . . . . . . . . . . 68
             2. Wachovia Bank of Del. v. Gilliam, 215 S.W.3d 848 (Tex. February 9, 2007) [05-
                      0903]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
      C. Enforcement of Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
             1. In re Discount Rental, Inc., 216 S.W.3d 831 (Tex. March 2, 2007) [05-0249]. . . . . 69
      D. Jury Instructions and Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
             1. Bed, Bath & Beyond, Inc. v. Urista, 211 S.W.3d 753 (Tex. December 29, 2006) [04-
                      0332]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
      E. Mandamus Review of New Trial Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
             1. In re Baylor Med. Ctr., 2006 WL 14278 (Tex. App.—Dallas 2006), argument granted
                      on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 533 (March 12, 2007) [06-
                      0491]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70


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                  2. In re Columbia Med. Ctr., 2006 WL 1309583 (Tex. App.—Dallas 2007), argument
                          granted on pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 533 (March 12, 2007)
                          [06-0416]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
           F. Post-Judgment Filing Deadlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
                  1. Hernandez v. Nat’l Restoration Techs., 211 S.W.3d 309 (Tex. December 22, 2006) [06-
                          0454]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
           G. Voir Dire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
                  1. Davis v. Fisk Elec. Co., 187 S.W.3d 570 (Tex. App.—Houston [14th Dist.] 2006), pet.
                          granted, 50 Tex. Sup. Ct. J. 446 (February 26, 2007) [06-0162]. . . . . . . . . . . 71

XXIX. PRODUCTS LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
      A. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
             1. 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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

XXX. REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
     A. Ad Valorem Tax Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
           1. Galveston Cent. Appraisal Dist. v. TRQ Captain’s Landing, L.P., 212 S.W.3d 726 (Tex.
                   App.—Houston [1st Dist.] 2006), pet. granted, 51 Tex. Sup. Ct. J. 41 (October 12,
                   2007) [07-0010]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
     B. Adverse Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
           1. Tran v. Macha, 213 S.W.3d 913 (Tex. December 1, 2006) [04-1107]. . . . . . . . . . . 73
     C. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
           1. Bulanek v. WesTTex 66 Pipeline Co., 209 S.W.3d 98 (Tex. December 1, 2006) [04-
                   0011]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
           2. City of Seabrook v. Port of Houston Auth., 199 S.W.3d 403 (Tex. App.—Houston [1st
                   Dist.] 2006), pet. granted, 50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-
                   0566]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
           3. 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]. . . . . . . . . . . . . . . . . 74
     D. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
           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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
     E. Homestead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
           1. Norris v. Thomas, 215 S.W.3d 851 (Tex. February 9, 2007) [05-0476]. . . . . . . . . . 75
     F. Mechanic’s Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
           1. Reliance Nat’l Indem. Co. v. Advance’d Temps., Inc., 227 S.W.3d 46 (Tex. June 8,
                   2007) [05-0558]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

XXXI. SANCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
      A. Imposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
            1. In re Michelle Moore, S.W.3d , 50 Tex. Sup. Ct. 1193 (Tex. August 31, 2007) [06-
                     0544]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

XXXII. TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
      A. Title Insurance Retaliatory Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
              1. First Am. Title Ins. Co. v. Strayhorn, 169 S.W.3d 298 (Tex. App.—Austin 2005), pet.
                        granted, 50 Tex. Sup. Ct. J. 532 (March 12, 2007) [05-0541]. . . . . . . . . . . . . 77

                                                                          xi
Supreme Court Update
November 1, 2006 – October 31, 2007



XXXIII. WATER LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
      A. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
            1. Canyon Reg’l Water Auth. v. Guadalupe-Blanco River Auth., 211 S.W.3d 351 (Tex.
                    App.—San Antonio 2006), pet. granted, 50 Tex. Sup. Ct. J. 929 (July 2, 2007) [06-
                    0873]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
      B. Conservation Districts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            1. Guitar Holding Co., L.P. v. Hudspeth County Underground Water Conservation Dist.,
                    209 S.W.3d 172 (Tex. App.—El Paso 2006), pet. granted, 50 Tex. Sup. Ct. J. 929
                    (July 2, 2007) [06-0904]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

XXXIV. WORKERS’ COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
     A. General Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            1. Entergy Gulf States, Inc. v. Summers,                                S.W.3d , 50 Tex. Sup. Ct. J. 1140 (Tex.
                       August 31, 2007) [05-0272]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
            2. HCBeck, Ltd. v. Rice, 2006 WL 908761 (Tex. App.—Fort Worth 2006), pet. granted,
                       50 Tex. Sup. Ct. J. 801 (June 4, 2007) [06-0418]. . . . . . . . . . . . . . . . . . . . . . . 79
     B. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
            1. Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc., S.W.3d , 50 Tex.
                       Sup. J. 1045 (Tex. August 24, 2007) [05-0202]. . . . . . . . . . . . . . . . . . . . . . . . 79
     C. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
            1. Daughters of Charity Health Servs. v. Linnstaedter, 226 S.W.3d 409 (Tex. June 1, 2007)
                       [05-0108]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80




                                                                        xii
Supreme Court Update
November 1, 2006 – October 31, 2007

                                     SUPREME COURT UPDATE
                               ______________________________________

                                               Phil Johnson
                                                  Justice
                                          Supreme Court of Texas


I. SCOPE OF THIS ARTICLE                                   rules for appealing HHSC’s data-collection
     This article surveys cases that were decided          methodology, HHSC properly followed the
by the Supreme Court of Texas from November 1,             procedures governing the hospitals’ appeal of
2006 through October 31, 2007. Petitions that              HHSC’s proposed rates. Therefore, the Court
have been granted but not yet decided are also             remanded the case to the trial court for further
included.                                                  proceedings consistent with its opinion.

II. ADMINISTRATIVE LAW                                     B. Driver’s License Suspension
A. Administrative Procedures Act                           1. Tex. Dep’t of Pub. Safety v. Alford,
1. El Paso Hosp. Dist. v. Tex. Health and Human            209 S.W.3d 101 (Tex. December 1, 2006) [05-
Servs. Comm’n, S.W.3d , 50 Tex. Sup. Ct. J.                0164].
1143 (Tex. August 1, 2007) [05-0372].                            Gyles Alford was stopped by a police officer
      Fourteen Texas hospitals sued the Texas              while driving a non-commercial vehicle. Alford
Health and Human Services Commission (HHSC)                admitted he had been drinking and failed three
asking that the data-collection method for                 field sobriety tests. The officer warned Alford of
calculating prospective Medicaid inpatient                 the consequences of refusing a breath test, as
services rates be declared invalid, and asking             required by section 724.015 of the Texas
whether HHSC failed to follow the procedures               Transportation Code, and Alford refused the
prescribed by other rules that govern a party’s            breath test. His commercial driver’s license was
appeal of HHSC’s proposed rates. The trial court           administratively suspended, and because he had a
denied all relief, and the court of appeals affirmed       previous “alcohol-related enforcement contact,”
its judgment.                                              the suspension was increased to two years. An
      HHSC is charged with establishing methods            administrative law judge affirmed, but the trial
for administering and adopting necessary rules for         court overturned the suspension. The court of
operating Medicaid assistance programs. Every              appeals affirmed the trial court’s judgment. The
three years, HHSC collects a twelve-month period           Supreme Court, without hearing oral argument,
of claims data in order to calculate Medicaid              reversed and rendered judgment for the Texas
reimbursement rates. This process employs a data           Department of Public Safety.
collection cutoff, which the hospitals argued is a               Alford argued that he should have been
rule. The Legislature has required HHSC to adopt           warned that his refusal to perform a breath test
rules through specific procedures under the                would result in suspension of his commercial
Administrative Procedures Act (APA).                       license, that the application of the statute
      Applying the APA’s requirements for rule-            governing suspension was ex post facto because
making, the Court agreed with the hospitals. The           the longer suspension was based on events prior to
Court found the data collection cutoff met the             the enactment of the statute, and that there was
requirements of a rule as set out in the APA               insufficient evidence to sustain the suspension.
because the cutoff was a rule of general                   The Supreme Court held that the warnings for
applicability that implemented law or described            commercial drivers required by section 522.103 of
procedures, amended another one of HHSC’s                  the Transportation Code only apply to drivers
rules, and affected the hospitals private rights.          stopped while driving a commercial vehicle, thus
Thus, the Court declared the rule invalid. The             the warning given to Alford was the proper one.
Court also concluded, however, that under the              Nor was the increase in his sentence an invalid ex


                                                       1
Supreme Court Update
November 1, 2006 – October 31, 2007

post facto application of a statute; it is well settled       because the Hospitals had not pursued Medicare’s
that a punishment enhancement statute may                     administrative remedies, the trial court lacked
require enhancement of punishment imposed for                 subject matter jurisdiction over the claims. The
subsequent violations based on event prior to the             court of appeals affirmed. The Supreme Court
enactment of the statute. Finally, regardless of a            reversed and remanded the case to the trial court.
mistake in the written findings of the                             Citing Rencare, Ltd. v. Humana Health Plan
administrative law judge referring to the warning             of Tex., Inc., 395 F.3d 555 (5th Cir. 2004), issued
statute as 724.000 instead of 724.015, there was              two days after the court of appeals’ opinion in this
sufficient evidence as a matter of law to support             case, the Court held that the administrative review
the suspension.                                               process attendant to the relevant portion of the
                                                              Medicare Act did not extend to claims in which an
C. Exhaustion of Administrative Remedies                      enrollee had no interest. The Court distinguished
1.    Christus Health Gulf Coast v. Aetna,                    between nonpayment due to enrollees’ lack of
Inc., S.W.3d , 50 Tex. Sup. Ct. J. 1148 (Tex.                 coverage from arising out of nonpayment due to
August 31, 2007) [05-0710].                                   insolvency or a dispute about who was
      At issue in this case is whether the Medicare           contractually obligated to pay. Therefore, because
Act requires health care providers to exhaust the             the hospitals’ claims fell within the latter
Medicare administrative appeals process prior to              category, the hospitals did not have any
bringing a claim to compel payment for the                    administrative remedies to exhaust, and whether
services from a health maintenance organization               the hospitals are entitled to payment from Aetna
(HMO) which contracted to provide services to                 was a matter within the trial court’s jurisdiction.
Medicare beneficiaries as part of the Medicare
Advantage Program. Aetna owned NYLCare, an                    D. Public Utility Commission/Jurisdiction
HMO Medicare Advantage organization.                          1. In re Sw. Bell Tel. Co., 226 S.W.3d 400 (Tex.
NYLCare contracted with North American                        June 1, 2007) [05-0511].
Medical Management of Texas (NAMM) to                               The issue in this case was whether the Public
administer the plan. NAMM then contracted with                Utility Commission had primary jurisdiction to
health care providers, including Christus Health              resolve threshold questions about the meaning and
Gulf Coast and several other hospitals to provide             effect of certain telephone interconnection
services to NYLCare enrollees. NAMM stopped                   agreements between Southwestern Bell Telephone
paying the hospitals for their services and notified          Company and the plaintiff local exchange
them and NYLCare that it was no longer able to                telephone service carriers. The Supreme Court
satisfy its financial obligations. The Texas                  concluded that it did and conditionally granted
Department of Insurance subsequently placed                   mandamus relief abating the lawsuit for
NAMM under supervision conservatorship.                       administrative proceedings in the PUC.
Aetna, through NYLCare, assumed responsibility                      Federal law permits competing local
for institutional claims incurred by NYLCare                  exchange carrier telephone companies (CLECs) to
members for covered services rendered after                   connect with the network owned by the incumbent
NAMM gave notice of its inability to pay. The                 local exchange carrier (ILEC) that formerly
hospitals sought payment from Aetna for services              possessed a monopoly on local telephone service.
rendered prior to that date, but Aetna refused                CLECs may negotiate the terms of
demands for payment.                                          interconnection agreements with the ILEC. If
      The hospitals sued Aetna, alleging                      they are not able to reach an agreement, the PUC
$13,067,759.19 in unpaid services, asserting                  may conduct an arbitration to set rates for
claims for suit on an account, breach of contract,            interconnection services. The plaintiff CLECs in
breach of fiduciary duty, quantum meruit, and                 this case each entered interconnection agreements
claims under the Texas Insurance Code. The trial              with ILEC Southwestern Bell to obtain access to
court granted Aetna’s plea to the jurisdiction on             Southwestern Bell’s network.            After the
the grounds that the hospitals’ claims were                   agreements were finalized, the PUC conducted
governed exclusively by the Medicare Act and that             two arbitrations between Southwestern Bell and


                                                          2
Supreme Court Update
November 1, 2006 – October 31, 2007

other companies that had not been able to reach               promptly, sought a hearing within the time frame
agreements on the appropriate rates to be charged.            set by the scheduling order, and sought mandamus
In the arbitration proceedings the PUC set rates              relief soon after its motion was denied.
for certain services to be supplied by
Southwestern Bell at prices between $2.56 and                 2. In re Sw. Bell Tel. Co., L.P., S.W.3d , 50
$5.00, which were substantially lower prices than             Tex. Sup. Ct. J. 1178 (Tex. August 31, 2007) [05-
those in the agreed-upon contracts at issue in this           0951].
case. The CLECs in this case had contracted to                      At issue in the case is whether the Public
pay between $5.00 and $25.00 for the same                     Utilities Commission (PUC) has exclusive
services. The CLECs brought suit, asserting that              jurisdiction over claims that Southwestern Bell
Southwestern Bell had been overcharging them                  Telephone (SWBT) improperly collected the
because the rates in their contracts were                     Texas Universal Service Fund surcharge from
substantially higher than the rates set in the                customers. SWBT customers, individually and as
arbitration proceedings. The causes of action                 representatives of a putative class consisting of all
asserted by plaintiffs included Deceptive Trade               SWBT residential customers in Texas, sued
Practices Act (DTPA) violations, unjust                       SWBT. The customers sought a declaration that
enrichment/money had and received, violations of              the Service Fund surcharge SWBT collected
Texas anti-trust laws, and fraud. Southwestern                monthly under chapter 58 of the Public Utility
Bell sought mandamus relief from the Supreme                  Regulatory Act (PURA) was a rate charged for
Court to direct the trial court to (1) refer the issues       basic network services and it increased SWBT’s
regarding the interconnection agreements to the               rate in violation of a rate freeze agreement. The
PUC and (2) abate the case while the PUC reviews              customers also sought an order requiring SWBT
the issues.                                                   to refund the surcharge to its customers (the “core
      The Supreme Court granted the mandamus                  claims”). SWBT filed a plea to the jurisdiction,
relief requested. It held that the PUC had primary            arguing that the PUC had exclusive jurisdiction
jurisdiction over questions regarding interpretation          over the core claims, and the trial court denied it.
and enforceability of the parties’ interconnection            The customers then filed several amended
agreements. It noted that the PUC is staffed with             petitions asserting new claims for breach of
experts who routinely consider the validity and               contract and violations of the Texas Deceptive
enforceability of interconnection agreements. In              Trade Practices-Consumer Protection Act. The
addition to approving the interconnection                     court of appeals denied mandamus relief.
agreements in the first instance, the PUC also                      The Supreme Court concluded that
retains authority to interpret and enforce the                mandamus relief would be an appropriate remedy
interconnection agreements when disputes arise                if the PUC had exclusive jurisdiction over the
about their meaning or effect. The Court also held            core claims. The Court then concluded that
that uniform interpretation of the agreements                 PURA was intended to serve as a pervasive
provides great benefit. Conflicting jury verdicts             regulatory scheme that governs the Texas
and rulings by different courts in regard to same or          Universal Service Fund. The Court noted that the
similar situations and fact patterns could result in          PUC, as the administrator of the Service Fund,
disparate treatment of the CLECs and ILEC.                    had the authority to grant such relief and the
Disparate treatment of companies and lack of                  expertise to decide the matter.
uniform decisions regarding contractual                             As to the later-added claims, the Supreme
obligations could inhibit competition, compromise             Court noted that SWBT had not yet filed a
the PUC’s ability to perform its regulatory duties            jurisdictional plea as to the new claims, and the
under the Federal Telecommunications Act, and                 parties had not briefed or presented those issues to
frustrate Congress’s goal of providing opportunity            the trial court. Accordingly, the Court declined to
for competition in the local-calling market. The              discuss whether those claims were within the
Court further held that Southwestern Bell                     PUC’s exclusive or primary jurisdiction. As to
preserved its right to seek mandamus relief                   the core claims, the Supreme Court conditionally
because it raised the issue of primary jurisdiction           granted the writ of mandamus and directed the


                                                          3
Supreme Court Update
November 1, 2006 – October 31, 2007

trial court to dismiss those claims for want of             from the agreement as a whole. Although Maida
jurisdiction.                                               objected to the arbitration provision specifically,
                                                            she also objected to other provisions of the new
III. AGENCY                                                 agreement, and there was no evidence that the
A. Apparent Authority                                       arbitration provision was the only provision she
1. Gaines v. Kelly, S.W.3d , 50 Tex. Sup. Ct.               was under duress to sign. The Court held that
J. 1054 (Tex. August 24, 2007) [05-1092].                   unless the arbitration provision alone was singled
      In this appeal from a no-evidence summary             out from the rest of the agreement, a claim of
judgment, the Court considered whether                      duress goes to the validity of the agreement
representations, allegedly made by a mortgage               generally and must be decided in arbitration.
broker that a loan would be funded, could be
attributed to a lender for purposes of a borrower’s         B. Enforcement of Arbitration Agreement
fraud claim against that lender. The court of               1. In re U.S. Home Corp., S.W.3d , 51 Tex.
appeals concluded that there was evidence that the          Sup. Ct. J. 42 (Tex. October 12, 2007) [03-1080].
mortgage broker had apparent authority to speak                   At issue in this case was whether the
for the lender on this subject and reversed the trial       arbitration clauses in home sales contracts
court’s summary judgment in the lender’s favor.             between U.S. Home Corp. and home purchasers
The Supreme Court, however, agreed with the trial           were enforceable over several contract defenses.
court that there was no evidence that the mortgage          The Supreme Court concluded there was no
broker had apparent authority either to negotiate           evidence to support any of the five grounds the
the terms of the loan or otherwise commit the               trial court listed to justify its decision to deny the
lender. Accordingly, the Court reversed the court           defendants’ motion to compel arbitration.
of appeals’ judgment and rendered judgment that                   The Court first found that evidence that U.S.
the borrower take nothing.                                  Home refused to contract with the plaintiffs unless
                                                            they agreed to arbitration was not enough to prove
IV. ARBITRATION                                             that the arbitration clauses were contracts of
A. Economic Duress                                          adhesion and procedurally unconscionable.
1. In re RLS Legal Solutions, LLC, 221 S.W.3d               Second, the arbitration agreements were not
629 (Tex. April 20, 2007) [05-0290].                        procured by fraud since the plaintiffs provided no
      The trial court in the underlying employment          evidence of any misrepresentations, scienter, or
suit denied RLS Legal Solutions’s motion to                 reliance and they conceded that no one prevented
compel arbitration. The court of appeals held that          them from reading the arbitration clause on the
the denial was not an abuse of discretion because           back of their single-sheet contract. Third, the
RLS used economic duress to force consent to                arbitration clauses were supported by mutual
arbitrate. The Supreme Court, in a per curiam               consideration since both parties agreed to
opinion and without hearing oral arguments,                 arbitration and neither of the two relevant
disagreed, and directed the trial court to grant the        provisions allowed U.S. Home to cancel the
motion compelling arbitration.                              contracts at will or to opt out of arbitration if there
      Amy Cobb Maida was an employee of RLS.                was a dispute regarding whether it had properly
During her employment, Maida signed several                 done so. Fourth, there was no evidence that
agreements to arbitrate disputes with RLS, but              arbitration would not be unduly burdensome or
refused to sign a new such agreement in                     costly since plaintiffs offered no specific evidence
November 2001. Maida claimed that RLS                       that a party would be charged excessive fees.
withheld the salary that it owed her in order to            Fifth, the trial court incorrectly found that
force her to accept the arbitration provision and           mediation, which had not yet occured, was a
that the provision was therefore unenforceable.             condition precedent to arbitration. There was no
The Court assumed that Maida made out a case for            indication the parties intended to dispense with
economic duress, but held there was no evidence             arbitration if mediation did not occur first.
that the duress was directed solely at obtaining her        Finally, the Court held that because U.S. Home
agreement to the arbitration provision as distinct          employees’ liability arose from and would be


                                                        4
Supreme Court Update
November 1, 2006 – October 31, 2007

determined by reference to the parties’ contracts         include disputes about their agents’ actions. Here,
rather than general obligations imposed by law,           any liability Bullock may have had must have
claims against the employees, even though they            arisen from the Bonds’ contracts with Olde, as he
were not signatories to the contracts, were also          had no duty to provide investment advice other
subject to the contracts’ arbitration provisions.         than in his role as Olde’s employee. Therefore,
                                                          the contracts’ arbitration provisions applied to the
C. Enforcement/Non-Signatories                            Bonds’ claims against Bullock as well.
1. In re H&R Block Fin. Advisors, Inc.,
    S.W.3d     , 50 Tex. Sup. Ct. J. 1029 (Tex.           2. In re Kaplan Higher Educ. Corp., S.W.3d ,
August 24, 2007) [04-0061].                               50 Tex. Sup. Ct. J. 1058 (Tex. August 24, 2007)
      At issue in this case is whether                    [06-0072].
nonsignatories to an arbitration agreement could                At issue in this case is whether
nonetheless invoke that agreement based on their          nonsignatories to an arbitration agreement could
status as agents of or successors to one of the           nonetheless invoke that agreement based on their
signatories.                                              status as agents or affiliates of one of the
      In 1992 and 1996, Robert and Gilda Bonds            signatories.
signed investment account agreements with Olde                  A vocational college and 45 of its students
Discount Corporation that required arbitration of         agreed to arbitrate any dispute “arising from or
“any and all controversies or claims arising out of       relating to” their enrollment agreements. The
the relationship established by this agreement or         students claimed they were fraudulently induced
any corresponding agreement to arbitration.”              to enroll by assurances that they would be eligible
Bullock, an Olde employee, signed these contracts         for certain electrician licenses upon graduation.
on Olde’s behalf. Bullock advised the Bonds               The students sued nonsignatories Kaplan, the
about investments and continued to do so after            parent corporation of the vocational college, and
Olde changed its name to H&R Block Financial              Ventura, the college’s admissions director,
Advisors, Inc. in 2000. One of Bullock’s                  seeking refunds of tuition and other costs. Kaplan
recommended investments was in Enron                      and Ventura sought to compel arbitration of these
Corporation. When the Bonds lost their entire             claims. The trial court refused to compel
$119,031.92 investment in Enron, they sued H&R            arbitration, and the court of appeals denied
Block and Bullock for negligence, gross                   mandamus relief.            The Supreme Court
negligence, fraud, breach of fiduciary duty, and          conditionally granted mandamus relief and
violations of the Texas Securities Act and the            directed the trial court to order arbitration.
Texas Deceptive Trade Practices Act. H&R Block                  The Supreme Court held that Ventura and
and Bullock moved to compel arbitration and stay          Kaplan could invoke the arbitration clause in the
the proceedings pursuant to the Federal                   enrollment agreements. Arbitration clauses do not
Arbitration Act. The trial court denied the motion,       automatically cover all corporate agents or
and the court of appeals denied mandamus relief.          affiliates. For example, an owner acting on its
The Supreme Court conditionally granted                   own behalf may not be able to invoke a
mandamus relief and directed the trial court to           subsidiary’s arbitration clause. Here, however,
order that the Bonds’ claims proceed to                   the ultimate liability would have fallen on the
arbitration.                                              college because any liability on the part of
      The Court held that both H&R Block and              Ventura or Kaplan must have arisen when they
Bullock could invoke the Bonds’ arbitration               procured enrollment agreements on the college’s
agreements with Olde. A contracting party that            behalf as its agents. Because a party generally
has merely changed its name is still a contracting        cannot avoid unfavorable clauses in contracts
party. Here, H&R Block showed that Olde                   simply by suing the other party’s agents, the same
changed its name to H&R Block by amending its             rule is necessary in the arbitration context to put
Articles of Incorporation in 2000. Further, when          arbitration agreements on equal footing with other
contracting parties agree to arbitrate all disputes       contracts. A contrary rule would require every
under the contract, they generally intend to              agent and affiliate of a signatory corporation, even


                                                      5
Supreme Court Update
November 1, 2006 – October 31, 2007

when acting on behalf of the corporation, to sign          4.     In re Merrill Lynch Trust Co. FSB,
or be listed in every contract in order to gain the            S.W.3d       , 50 Tex. Sup. Ct. J. 1030 (Tex.
protection of the arbitration clauses therein, which       August 24, 2007) [04-0865].
is an impractical result. When a contract clearly                The principal issue in this case is whether
provides for arbitration of disputes related to that       nonsignatories to an arbitration agreement may
contract, parties cannot avoid arbitration simply          enforce the agreement against the signatories
by alleging a nonsignatory agent or affiliate was          under theories of agency or equitable estoppel.
liable.                                                    When Juan Alaniz and his wife opened accounts
                                                           at the brokerage firm Merrill Lynch, Pierce,
3.    In re Merrill Lynch Trust Co. FSB,                   Fenner & Smith, Inc. (MLPF&S), they signed
    S.W.3d       , 50 Tex. Sup. Ct. J. 1139 (Tex.          cash management agreements that contained
August 31, 2007) [03-1059].                                arbitration provisions.         Henry Medina, an
     The principal issue in this case is whether           MLPF&S employee who was also a licensed
nonsignatories to an arbitration agreement may             insurance agent, was the plaintiffs’ financial
enforce the agreement against the signatories              advisor. The Alanizes sued Medina and two
under theories of agency or equitable estoppel.            MLPF&S affiliates, Merrill Lynch Trust Co. (ML
Chris Pereyra retained Merrill Lynch, Pierce,              Trust) and Merrill Lynch Life Insurance Co. (ML
Fenner & Smith Inc. and its employee Henry                 Life) for claims related to an insurance trust. The
Medina as her financial advisors. Her agreement            defendants, who were not signatories to the cash
with Merrill Lynch contained a broad arbitration           management agreements between the Alanizes
clause.     Among other investments, Medina                and MLPF&S, moved to compel arbitration based
advised the plaintiff to set up a trust account and        on the arbitration provisions in those agreements.
name Merrill Lynch Trust Company of Texas (ML                    The Supreme Court held that Medina, as an
Trust) as trustee. The sole asset of the trust was a       MLPF&S employee, could compel arbitration,
variable life insurance policy bought from Merrill         since he was acting as the agent of MLPF&S and
Lynch Life Insurance Company (ML Life). Both               was within the course and scope of his
of these Merrill Lynch affiliates had their own            employment. ML Life and ML Trust, however,
contracts with Pereyra, neither of which contained         could not compel arbitration. As affiliates, no
an arbitration clause.                                     exception that would otherwise allow
     When Pereyra initiated an arbitration                 nonsignatories to compel arbitration applied. The
proceeding against Merrill Lynch and Medina, she           Court rejected compelling arbitration through the
also filed this lawsuit against Medina and ML              equitable theory of substantially interdependent
Trust asserting several torts as well as violations        and concerted misconduct. Even so, the Court
of the Texas Trust Code and Texas Insurance                held that the Alanizes’ claims against ML Life
Code. Medina and ML Trust filed a motion to                and ML Trust must be stayed pending arbitration.
compel arbitration and stay litigation. The trial                Justice Hecht filed an opinion concurring in
court denied the motion, and the court of appeals          part and dissenting in part. Justice O’Neill joined
denied mandamus relief.                                    part I of the writing, which stated that because the
     For the reasons stated in an almost identical         plaintiffs disavowed all claims against MLPF&S
case, In re Merrill Lynch Trust Co., ____                  and only alleged claims against Medina for his
S.W.3d___, 50 Tex. Sup. Ct. J. 1030 (Tex. 2007),           actions as a licensed insurance agent, Medina
the Court held that the trial court abused its             could not compel arbitration. In part II, Justice
discretion in refusing to compel arbitration with          Hecht argued that ML Life and ML Trust could
the Medina, and in refusing to stay the litigation         not compel arbitration because the Alanizes
against ML Trust.                                          limited their allegations to the illegality of the
                                                           inter-affiliate sale of the life policy.
                                                                 Justice Johnson, joined by Justice
                                                           Wainwright, also concurred in part and dissented
                                                           in part, and argued that Medina as well as ML
                                                           Life and ML Trust should be allowed to compel


                                                       6
Supreme Court Update
November 1, 2006 – October 31, 2007

arbitration. As to ML Life and ML Trust, Justice           WMCO’s claims. The Court also noted that
Johnson argued that applying Grigson v. Creative           WMCO’s claims relied squarely on or depended
Artists Agency, 210 F.3d 524 (5th Cir. 2000), the          on the existence of the agreement and that
Alanizes should be equitably estopped from                 WMCO conceded its damages could not be
asserting they have no arbitration agreement with          calculated without reference to the agreement.
ML Trust and ML Life to the extent their claims            Finally, the Court concluded that WMCO’s claims
rely on substantially interdependent and concerted         against Meyer and Ford were intertwined with its
misconduct by Medina, ML Trust, and ML Life.               claims against Bullock since only if WMCO was
                                                           correct in its assertion that Ford lost its right of
5. Meyer v. WMCO-GP, L.L.C., 211 S.W.3d 302                first refusal could any of its claims against Meyer,
(Tex. December 22, 2006) [04-0252].                        Ford, and Bullock succeed. The Court noted that
      Ford Motor Company exercised its right of            WMCO was trying to have it both ways by
first refusal to acquire the business of its dealer        asserting rights provided by the purchase
Bullock Motor Company, provided in its                     agreement but refusing to honor its agreement to
dealership agreement, and assigned the right to            arbitrate disputes over those rights.
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              D. Waiver
argued that because of this clause WMCO was                1. In re Bank One, 216 S.W.3d 825 (Tex.
equitably estopped from refusing to arbitrate. The         February 23, 2007) [06-0093].
trial court refused to compel arbitration, a divided             J&S Air, Inc. sued Bank One when Bank
court of appeals affirmed, and the Supreme Court           One honored checks totaling nearly $35,000 that
reversed and remanded the case to the trial court.         were allegedly forged by two J&S Air employees.
      The Court determined that equitable estoppel         After Bank One failed to answer the suit, a default
allows a nonsignatory to a contract containing an          judgment was entered against it. Bank One timely
arbitration clause to compel arbitration “when the         filed a motion to set aside the default judgment.
signatory to a written agreement containing an             Bank One then filed an answer, at which point
arbitration clause must rely on the terms of the           further activity ceased on the suit until nearly
written agreement in asserting its claims against          eight months later. In August 2005, Bank One
the nonsignatory. . . . [that is,] [w]hen each of a        filed a Motion to Compel Arbitration. The trial
signatory’s claims against a nonsignatory makes            court denied the motion to compel arbitration.
reference to or presumes the existence of the              Bank One filed a mandamus petition with the
written agreement,” as well as when the signatory          court of appeals, which the court denied.
“raises allegations of substantially interdependent              In a per curiam opinion, the Supreme Court
and concerted misconduct by both the                       conditionally granted the mandamus petition,
nonsignatory and one or more of the signatories to         directing the trial court to compel the parties to
the contract.” Grigson v. Creative Artists Agency,         arbitration. The Court held that an arbitration
L.L.C., 210 F.3d 524, 527 (5th Cir. 2000). The             agreement existed and the dispute fell within the
language of the arbitration clause here was not so         scope of the agreement. The Court further held
narrow as to preclude the application of equitable         that there is a strong presumption against waiver
estoppel by a nonsignatory or to exclude                   and waiver must be intentional. A party waives


                                                       7
Supreme Court Update
November 1, 2006 – October 31, 2007

an arbitration clause if it substantially invokes the       that the Culls did not waive their right to
judicial process. Bank One’s moving to set aside            arbitration by their pre-arbitration conduct.
a default judgment and requesting a new trial did                 The Supreme Court granted Perry Homes’
not substantially invoke the judicial process.              petition for review and heard oral argument on
                                                            March 20, 2007.
2. Perry Homes v. Cull, 173 S.W.3d 565 (Tex.
App.—Fort Worth 2005), pet. granted, 50 Tex.                V. ATTORNEYS
Sup. Ct. J. 218 (December 18, 2006) [05-0882].              A. Fees
      This case concerns an alleged waiver of               1.     Hoover Slovacek L.L.P. v. Walton,
arbitration under a contractual arbitration clause.         206 S.W.3d 557 (Tex. November 3, 2006) [04-
The case involves a number of issues. The                   1004].
primary issue is whether Cull substantially                       The Supreme Court granted the petitioner’s
invoked the judicial process by filing a lawsuit,           motion for rehearing and denied the respondent’s.
objecting to arbitration, adding claims, pursuing           The Court withdrew its opinion of June 30, 2006
discovery, and then requesting arbitration on the           and substituted a new opinion. In this case, the
eve of trial. Also at issue is whether prejudice            Court considered the enforceability of an
should remain a component of waiver analysis and            attorney’s termination fee provision. The Court
what constitutes prejudice in this context.                 held that an attorney hired on a contingent-fee
      Robert and Jane Cull purchased a new home             basis may not include in the fee agreement a
from Perry Homes and also purchased a home                  provision stating that, in the event the attorney is
warranty from Home Owners Multiple Equity and               discharged before completing the representation,
Warranty Underwriters Insurance Company. Due                the client must immediately pay the present value
to certain home defects, the Culls sued Perry               of the attorney’s interest in the client’s claim.
Homes and the warranty companies. The two                         John B. Walton, Jr. hired Hoover Slovacek
warranty companies filed a Plea in Abatement                L.L.P. to recover unpaid royalties from several oil
requesting arbitration as was required in the               and gas companies operating on his ranch.
warranty contract. The Culls argued that the                Walton agreed to pay Hoover 28.66% of any
arbitration clause was unconscionable because it            amounts recovered, and that, if he discharged
required arbitration before the American                    Hoover before the representation was completed,
Arbitration Association, allegedly an expensive             he would immediately pay the firm the present
and biased institution. The trial court never ruled         value of its contingent fee. Hoover settled a
on this issue and the litigation continued. After           number of Walton’s claims, but was eventually
conducting about a year of discovery, the Culls             discharged. Walton alleged that Hoover was
moved for arbitration. Perry Homes responded in             pressuring him to settle with Bass Enterprises
opposition to the motion, arguing that the Culls            Production Company, and that Hoover had
had waived their right to arbitration. Four days            damaged his credibility with Bass by making an
before trial, the trial court granted the motion.           unauthorized and excessive $58.5 million demand.
Perry Homes sought mandamus relief, but was                 Pursuant to the termination fee provision, Hoover
denied by both the court of appeals and this Court.         sent Walton a bill for $1.7 million, asserting that
As a result, the arbitration occurred, and an award         his claim against Bass was worth $6 million at the
was issued in favor of the Culls. Perry Homes               time of discharge. Walton later hired Andrews &
challenged the arbitration award by filing a motion         Kurth L.L.P., which settled the Bass claim for
to vacate or modify the award, contending that the          $900,000. When Hoover sought to enforce the
Culls had waived their right to arbitration by              termination fee provision, a jury failed to find that
opposing the warranty companies’ original motion            the fee was unconscionable or that Walton
for arbitration and by pursing the case within the          discharged Hoover with good cause, and awarded
judicial system.                                            the firm $900,000. The court of appeals reversed
      The trial court confirmed the arbitration             and rendered a take-nothing judgment against
award. The court of appeals affirmed, holding               Hoover, concluding that the fee was
                                                            unconscionable as a matter of law.


                                                        8
Supreme Court Update
November 1, 2006 – October 31, 2007

      Citing Mandell & Wright v. Thomas, 441                statute or well-established rule of law. The
S.W.2d 841, 847 (Tex. 1969), the Supreme Court              dissent also criticized the Court for voiding the
reaffirmed the Texas rule that, if an attorney hired        termination fee based on hypothesized problems
on a contingent-fee basis is discharged without             rather than the facts of this case. It noted that
cause before the representation is completed, the           ascertaining the value of the contingent fee at the
attorney may seek compensation in quantum                   time of discharge may be impossible, but in this
meruit or in a suit to enforce the contract by              case there was no evidence that the fee was ever
collecting the contingent fee from any damages              worth more than $900,000. Accordingly, the
the client subsequently recovers. The Court gave            dissent would enforce the termination fee
several reasons why, in exceeding Mandell,                  provision on this amount.
Hoover’s termination fee provision was contrary
to public policy and unenforceable. First, its              2. Med. City Dallas, Ltd. v. Carlisle Corp., 196
immediate payment requirement allowed the                   S.W.3d 855 (Tex. App.—Dallas 2006), pet.
lawyer to collect a contingent interest without             granted, 50 Tex. Sup. Ct. J. 712 (May 7, 2007)
regard for when and whether the client eventually           [06-0660].
prevailed, violating the rule that a lawyer is                    At issue in this case is whether attorney’s
entitled to receive a contingent fee only when and          fees are recoverable in a breach of warranty
to the extent the client receives payment. Second,          action. Medical City replaced the roof on one of
the fee granted the lawyer a proprietary interest in        its buildings. Carlisle was the manufacturer of the
the client’s claim, violating Texas Disciplinary            roofing materials and issued Medical City a
Rule of Professional Conduct 1.08. Third, the fee           twenty-year written warranty. After several years
created a perverse incentive for the lawyer to be           of leaks in the roof, Medical City sued Carlisle for
discharged soon after establishing the value of the         breach of warranty. A jury found in Medical
client’s claim, thereby avoiding the demands and            City’s favor, and the trial court awarded Medical
consequences of trials and appeals. The Court               City damages and attorney’s fees. The court of
distinguished this dynamic from the traditional             appeals affirmed the judgment on the breach of
contingent fee, which encourages lawyers to                 warranty claim, but reversed the award of
obtain the best results possible because they will          attorney’s fees. The court of appeals held that
receive no fee whatsoever if the case is lost.              although attorney’s fees are recoverable for a
Finally, the Court noted that Hoover’s termination          breach of contract claim under Texas Civil
fee provision failed to explain how the parties             Practice and Remedies Code section 38.001(8),
would measure the present value of the client’s             Medical City’s breach of warranty claim was
claim at the time of discharge. This violated the           distinct from a breach of contract claim so
lawyer’s duty to clearly explain, at the outset of          attorney’s fees were not recoverable. Medical
the representation, how the fee would be                    City filed a petition for review with the Supreme
calculated and the fee’s implications for the client.       Court claiming that attorney’s fees are
The Court severed the termination fee provision,            recoverable. The Supreme Court granted Medical
leaving a contingent fee contract subject to                City’s petition for review and heard oral argument
Mandell. The Court affirmed the court of appeals’           on October 17, 2007.
judgment in part, reversed in part, and remanded
to the court of appeals to address Walton’s                 3. Varner v. Cardenas, 218 S.W.3d 68 (Tex.
challenges to the factual and legal sufficiency of          March 2, 2007) [06-0212].
the jury finding on the good-cause issue.                        In this opinion, the Supreme Court addressed
      Justice Hecht, joined by Justice Medina and           whether a prevailing party must segregate
Justice Willett, dissented. The dissent argued that         attorney’s fees generated while defending a
the termination fee provision was not                       counterclaim that attacked claimant’s suit for
unconscionable because a competent lawyer could             breach of contract. The claimants sold a ranch in
form a reasonable belief that the fee was                   exchange for cash and a promissory note. When
reasonable, and that the fee was not contrary to            the buyers failed to pay annual installments,
public policy because it did not contravene any             claimants brought suit. The buyers asserted the


                                                        9
Supreme Court Update
November 1, 2006 – October 31, 2007

ranch was 180 acres less than represented and              a new trial on that issue in accordance with the
counterclaimed to reduce the amount sought on              recent decision of Barker v. Eckman, 213 S.W.3d
the note.                                                  306 (Tex. 2006).
     The Court held that the claimants had to
overcome this defense in order to recover on their         B. Former-client Conflicts
contract, and as a result, any attorney’s fees             1. In re Basco, 221 S.W.3d 637 (Tex. April 20,
incurred defending against the counterclaim were           2007) [05-0771].
recoverable. Conversely, the Court agreed with                   The Supreme Court held that the trial court
the court of appeals that any attorney’s fees              abused its discretion in failing to disqualify an
incurred while pursuing claims against other               attorney who would have had to question the work
parties not privy to the contract must be                  product of his former law partner.
segregated.                                                      Dr. Michael Basco sued Baylor Medical
                                                           Center at Grapevine for terminating his hospital
4. Young v. Qualls, 223 S.W.3d 312 (Tex. May 4,            privileges. One reason provided by Baylor for
2007) [05-1091].                                           terminating Basco’s privileges was his failure to
      This case considers whether an award of              report a suit against him for medical malpractice.
attorney’s fees should be reconsidered when a              Basco admitted to not reporting the suit but
remittitur reduces a damage award on appeal.               claimed that he did so on the advice of his
Young and Qualls engaged in a real estate                  attorney, Winston Borum. The malpractice case
development project in which Young provided the            eventually settled. While this case was pending,
financing to purchase a 75-acre tract of land, and         one of Borum’s law partners, James Stewart, left
Qualls agreed to develop the property into lots for        the firm three months after the malpractice case
sale.    Although the parties had a written                settled and became Baylor’s current counsel.
partnership agreement governing a prior project,           Stewart testified he did not work on the case and
they relied on an oral agreement for this                  did not recall ever discussing it. Basco sought to
development. Qualls and his wife worked in an              disqualify Stewart from representing Baylor in his
office on the site and cleared the property for            wrongful termination suit based on Stewart’s
development, and Young paid the costs associated           former partnership with Borum.
with those activities. After about two years, no                 The trial court denied disqualification and
lots had been sold in the development and Young            the court of appeals denied mandamus relief. The
stopped paying the Quallses’ bills and instructed          Supreme Court conditionally granted Basco’s writ
them to vacate the property. Qualls eventually             of mandamus. The Court held that even if a
filed this suit for breach of the partnership              departing lawyer has no connection with a former
agreement. The jury found that Young breached              client of a former firm, they cannot take on a case
the partnership agreement and awarded Qualls               against that client if it involves questioning the
$142,550 in damages. Pursuant to the parties’              validity of the earlier representation. Here,
agreement to submit the question of attorney’s             Stewart would have to question the veracity of
fees to the court for determination, the judge             Borum’s advice given to Basco. The Court held
awarded Qualls $46,331.86 in attorney’s fees.              this would be a violation of Texas Disciplinary
The court of appeals affirmed the jury’s liability         Rule of Professional Conduct 1.09(a).
finding, but determined that the evidence                  Accordingly, the Court conditionally granted the
supporting the jury’s damage award was factually           writ of mandamus and ordered the trial court to
insufficient. The court of appeals suggested a             disqualify Stewart and his current firm from
remittitur reducing the damage award to                    representing Baylor.
$54,751.50, and Qualls agreed to the reduction.
      The Supreme Court held that because it could
not tell whether the damage award affected the
trial court’s determination of attorney’s fees, it
reversed the court of appeals’ judgment on the
issue of attorney’s fees and remanded the case for


                                                      10
Supreme Court Update
November 1, 2006 – October 31, 2007

C. Guardian Ad Litem Fees                                   assets of the donut shop to the Kims. Gyu
1.     Land Rover U.K., Ltd. v. Hinojosa,                   completed the transaction without Hong’s
210 S.W.3d 604 (Tex. December 15, 2006) [04-                consent, and immediately wired the funds to
0794].                                                      relatives in Korea. Gyu then sued Hong for
      The Hirn family was injured, and one son              divorce. Hong counterclaimed for divorce and
died, in a rollover accident in their Land Rover            asserted third party claims against Chu and the
Discovery.       The Hirns sued the vehicle                 Kims claiming the sale of the donut shop was
manufacturer, the parent company of the vehicle             improperly completed without her consent and
manufacturer, and the dealership (collectively              was fraud on the community estate. The trial
“Land Rover”). The Hirns also sued the tire                 court found that Chu conspired with Gyu and the
manufacturer and the tire retailer (collectively            Kims to effectuate a fraudulent transfer and
“Continental”). The trial court appointed Juan              convert the donut shop to the Kims, and that Chu
Hinojosa guardian ad litem for the Hirns’                   participated and assisted Gyu in breaching his
surviving son. As part of a settlement, Continental         fiduciary duty to Hong. Only Chu appealed, and
paid Hinojosa a $45,000 fee. At the hearing                 the court of appeals affirmed the trial court’s
finalizing the Hirns’ settlement with Land Rover,           judgment and found Hong could recover
Hinojosa requested a $100,000 fee. Hinojosa                 economic damages for lost profits and punitive
multiplied the number of hours worked on the case           damages from Chu on a claim for conspiracy to
by his hourly rate and then added a $25,000                 violate the UFTA.
premium for work he declined due to his                           The Supreme Court granted Chu’s petition
engagement in this case to arrive at his fee. The           for review and heard oral argument on October
trial court entered judgment for Hinojosa and the           16, 2007.
court of appeals affirmed.
      In a per curiam opinion, the Court reversed           VI. CLASS ACTIONS
and remanded to the court of appeals to reconsider          A. Assignment of Claims
the fee.       The Court held the premium                   1. Sw. Bell Tel. Co. v. Marketing On Hold, Inc.,
unreasonable. The Court also held some of                   170 S.W.3d 814 (Tex. App.—Corpus Christi
Hinojosa’s time was not compensable because it              2005), pet. granted, 50 Tex. Sup. Ct. J. 446
exceeded the duties of a guardian ad litem. The             (February 26, 2007) [05-0748].
Court finally suggested that, while not required,                 The principal issues in this interlocutory
written billing records are helpful in determining          appeal are whether the trial court erred in
a fee. Accordingly, the Court reversed and                  certifying the class of Southwestern Bell
remanded to the court of appeals.                           customers or in naming Marketing On Hold as the
                                                            class representative.
D. Liability to Non-clients                                       Marketing On Hold audits the Southwestern
1. Chu v. Hong, 185 S.W.3d 507 (Tex.                        Bell phone bills of its customers and seeks refunds
App.—Fort Worth 2005), pet. granted, 50 Tex.                when necessary. In this case, the class asserts that
Sup. Ct. J. 667 (April 30, 2007) [06-0127].                 refunds are due because Southwestern Bell
     At issue in this case is whether an attorney           charged municipal fees in relation to services not
has a duty to a third party. This case arises out of        covered by the relevant Specified Annual Payment
a divorce proceeding where the wife asserted                ordinances.       Specified Annual Payment
claims against her husband and third parties under          ordinances dictate when Southwestern Bell may
the Uniform Fraudulent Transfer Act for                     pass through municipal fees to its customers for
fraudulent transfer and conspiracy to fraudulently          the purpose of compensating cities for the costs of
transfer. Shortly before their divorce, Gyu Churl           administering public rights-of-way. The class
Kim and Chong Hui Hong engaged in negotiations              consists of subscribers to Southwestern Bell’s
to sell their donut shop to the Kims. The Kims              Digital Loop, SmartTrunk, and Hotel/Motel
hired William Chu, an attorney, to represent them.          services. Five subscribers to the Digital Loop and
Acting alone, Gyu went to Chu’s office and signed           SmartTrunk services assigned their claims to
a Bill of Sale purporting to sell and transfer the          Marketing On Hold, but no claims were assigned


                                                       11
Supreme Court Update
November 1, 2006 – October 31, 2007

by subscribers to the Hotel/Motel service. As the            class. The court of appeals modified the class
assignee of these claims, Marketing On Hold filed            definition and affirmed the certification as
suit against Southwestern Bell and sought class              modified, holding that no choice of law analysis
certification from the trial court and appointment           was necessary because the relevant provision of
as class representative of nearly 7,000                      the Texas Securities Act directs the application of
Southwestern Bell customers.                                 Texas law. The court of appeals also held that res
      The trial court held a certification hearing           judicata would not bar later individual claims
and issued an order certifying the class under what          arising from the same transaction.
is now Texas Rule of Civil Procedure 42(b)(3) and                  All class actions must satisfy four
appointing Marketing On Hold as class                        prerequisites: numerosity, commonality,
representative. Southwestern Bell appealed the               typicality, and adequacy of representation.
certification and appointment contending: (1) that           Because the class here sought certification under
Marketing On Hold lacks standing to sue because              Texas Rule of Civil Procedure 42(b), “questions
its assignments are void as a matter of public               of law or fact common to the members of the class
policy; (2) that Marketing On Hold does not meet             [must] predominate over any questions affecting
the typicality and adequacy requirements of                  only individual members” and class treatment
Rule 42; and (3) that the litigation will be                 must be “superior to other available methods for
dominated by individual issues and not those                 the fair and efficient adjudication of the
common to the class. The court of appeals                    controversy.” In Compaq Computer Corp. v.
affirmed, holding that the assignments are valid,            Lapray, 135 S.W.3d 657 (Tex. 2004), the
Marketing On Hold’s claims are typical, any                  Supreme Court required the satisfaction of these
potential conflicts between the class representative         requirements to include an “extensive choice of
and the class or within the class are too                    law analysis” conducted by the trial court before
speculative, and class issues would dominate the             certifying a class. Here, the Court held that
litigation.                                                  because section 12 of the Texas Securities Act
      The Supreme Court granted Southwestern                 applies to the class claim under any choice of law
Bell’s petition for review and heard oral argument           analysis, the trial court was not required to
on March 22, 2007.                                           conduct the extensive choice of law analysis
                                                             described in Compaq.
B. Choice of Law/Res Judicata                                      The Court also addressed the effect of res
1. Citizens Ins. Co. of Am. v. Daccach,                      judicata on the adequacy of the class
217 S.W.3d 430 (Tex. March 2, 2007) [03-0505].               representative, the superiority of litigating this
      In this interlocutory appeal of a trial court’s        case as a class action, the typicality of claims
certification of a worldwide class, the Court                within the class, and the predominance of
considered whether the trial court properly                  common issues over individual issues. In this
concluded that Texas law applies to the class                case, the class representative abandoned certain
claim and whether res judicata will bar class                claims that were unsuitable for class certification.
members from later bringing the uncertified                  Because basic principles of res judicata apply to
claims individually. The class representative, a             class actions just as they do to any other form of
Columbian physician, alleged that Citizens, a                litigation, claim preclusion applies to claims not
Texas company not registered as a securities                 pursued by the class representative. This would
dealer with the Texas Securities Board, sold                 bar individuals who did not opt out of the class
insurance policies that constituted securities under         from pursuing claims arising from the same
Texas law.         The putative class included               transaction in a separate, later suit. Because the
policyholders in over thirty-five countries. To              trial court failed to consider the impact of res
certify the class, the class representative dropped          judicata on the class certification prerequisites,
claims for breach of contract, deceptive trade               the Court reversed the court of appeals’ judgment,
practices, and fraud and proceeded only on the               decertified the class, and remanded the case to the
claim for Citizens’ sales of securities as an                trial court.
unregistered dealer. The trial court certified the


                                                        12
Supreme Court Update
November 1, 2006 – October 31, 2007

      In section IV-B of the opinion, a concurrence          charged by Stonebridge for the insurance. The
joined by Justice Johnson, Justice Wainwright                Supreme Court held that the trial court erred in
offered an alternative approach to the choice of             certifying the class. The Court noted that a claim
law issue. Section 6 of the Restatement (Second)             for money had and received requires proof that
of Conflicts of Law provides a two-pronged                   the defendant possesses money that “in equity and
approach to choice of law determinations: A court            good conscience” belongs to the plaintiff. The
will follow the statutory directive of its own state         Court concluded that the nature of the claim was
on choice of law, subject to constitutional                  such that the predominance requirement in Texas
limitations. If no such directive exists, the court          Rule of Civil Procedure 42(b)(3) was not met, and
must balance factors including the interests of the          thus ordered the class decertified.
forum, other relevant jurisdictions, the system in
general, predictability, ease of application, and            VII. CONSTITUTIONAL LAW
policies underlying the law at issue. Justice                A. Due Process
Wainwright argued that the language of section 12            1. County of Dallas v. Walton, 216 S.W.3d 367
of the Texas Securities Act contains a statutory             (Tex. February 16, 2007) [04-0631].
directive. He supports that interpretation with the               Lamar Walton, a deputy constable covered
history and purpose of the Uniform Securities Act.           by Dallas County’s civil service system, sued the
      Chief Justice Jefferson concurred, joined by           County and Constable Derrick Evans under 42
Justice Brister and Justice Medina. He contended             U.S.C. § 1983 for denial of procedural and
that the trial court was required to conduct an              substantive due process in violation of the
extensive choice of law analysis as required in              Fourteenth Amendment to the United States
Compaq. He concluded that section 12 of the                  Constitution based on the County’s termination of
Texas Securities Act does not contain a statutory            his employment without just cause or a hearing.
directive. Therefore, the trial court was required           The trial court granted summary judgment for the
to examine the factors listed in section 6(2) of the         County and Evans, but the court of appeals
Restatement. This is especially important, he                reversed and remanded. The Supreme Court,
argued, when the interests of many worldwide will            based on the reasoning in County of Dallas v.
be adjudicated by this class action. He viewed the           Wiland, decided the same day, reversed the
Court’s holding as permitting plaintiffs to choose           judgment of the court of appeals and remanded
the law that governs the proceeding by their                 the case to the trial court.
pleadings.                                                        The Court noted that Walton had been
                                                             required by the previous constable to sign a
C. Predominance                                              statement acknowledging that his appointment
1. Stonebridge Life Ins. Co. v. Pitts, S.W.3d ,              was at will and could be terminated at any time,
50 Tex. Sup. Ct. J. 1195 (Tex. August 31, 2007)              but held that the civil service statute does not
[06-0655].                                                   allow individual constables unilaterally to remove
      In this class action suit, the Court held that         otherwise covered deputies from the civil service
the court of appeals erred in affirming the trial            system, and the statement was thus of no effect.
court’s certification of a class. Gayle Pitts and                 Justice Brister, joined by Chief Justice
others sued Stonebridge Life Insurance Company,              Jefferson, Justice O’Neill, and Justice Medina,
asserting a claim for money had and received.                concurred for the same reasons stated in their
The plaintiffs alleged that Stonebridge contacted            separate opinion in County of Dallas v. Wiland.
potential consumers by telephone, offering to sell
them accidental death and dismemberment                      2. County of Dallas v. Wiland, 216 S.W.3d 344
insurance on a sixty- or ninety-day free trial basis.        (Tex. February 16, 2007) [04-0247].
Stonebridge allegedly informed the consumers that                 Three deputy constables covered by Dallas
their credit cards would be charged if they did not          County’s civil service system sued the County for
timely cancel but did not tell them that it already          denial of procedural and substantive due process
possessed their account information. Pitts sought            in violation of the Fourteenth Amendment to the
certification of a class to recover the amounts              United States Constitution and requested damages


                                                        13
Supreme Court Update
November 1, 2006 – October 31, 2007

under 42 U.S.C. § 1983 based on the County’s               the trial court and also noting that the United
termination of their employment without just               States Supreme Court had never decided the issue
cause or a hearing. The trial court granted partial        and there was disagreement on the issue among
summary judgment for the deputies on liability             federal circuit courts.
and rendered judgment on the jury’s findings of
actual damages resulting from the deputies’ loss of        B. Punitive/Exemplary Damages
employment, and the court of appeals affirmed.             1. Tony Gullo Motors I, L.P. v. Chapa,
The Supreme Court reversed the court of appeals’           212 S.W.3d 299 (Tex. December 22, 2006) [04-
judgment and remanded the case to the trial court.         0961].
      After examining the provisions of the                     Nury Chapa bought a vehicle from Tony
County’s civil service system, the Supreme Court           Gullo Motors for $30,207.38, but the parties
concluded that covered employees could not be              disagreed about what model of car was involved.
discharged without just cause and thus had a               Chapa brought suit for breach of contract, fraud
protected property interest. The denial of the             and violations of the DTPA. The jury found for
hearing promised by the system rules was a denial          Chapa on all three claims and also found a
of due process, but the deputies were entitled to          difference in value of the two models of $7,213,
the damages awarded, that is, damages for injuries         mental anguish damages of $21,639, exemplary
resulting from the loss of their employment, only          damages of $250,000, and attorney’s fees of
if just cause did not exist for their termination.         $20,000. The court of appeals affirmed all of the
The Court concluded that the existence of just             jury’s awards but reduced exemplary damages to
cause had never been established, and thus                 $125,000. In the Supreme Court, Gullo raised
reversed the damage award, but because the                 several issues challenging the validity of the
deputies should not be penalized for the trial             jury’s awards.
court’s error in holding that the absence of just               Justice Brister authored the majority opinion.
cause had been established, the Court remanded             The Court first held that the jury’s awards
the case for the deputies to advance their                 violated the one-satisfaction rule. That is, there
contention that the damages alleged were caused            can only be one recovery for one injury. The
by the denial of due process. The Court                    Court, however, rejected Gullo’s argument that
concluded, however, that the deputies had no               breach of contract was Chapa’s only viable claim.
interest in continued employment protected by              The Court held that the facts were sufficient to
substantive due process, and even if such interest         support Chapa’s fraud and DTPA claims as well.
were protected, the County’s actions were not              Accordingly, she was entitled to the most
arbitrary and capricious so as to violate                  favorable judgment of the three.
substantive due process.                                        The Court also held the court of appeals
      Justice Brister, joined by Chief Justice             award of $125,000 in exemplary damages
Jefferson, Justice O’Neill, and Justice Medina,            unconstitutional. The Court noted that the
concurred in part and dissented in part. They              constitutionality of exemplary damages is
agreed that the deputies had a protected property          adjudged by three guideposts: (1) the nature of the
interest in their employment and that they had             defendant’s conduct, (2) the ratio between
been denied procedural due process. The justices           exemplary and compensatory damages, and (3) the
concluded, however, that the record was                    size of civil penalties in comparable cases. The
unequivocal that the deputies had been terminated          Court held the 4:1 ratio between exemplary
without just cause, and were therefore entitled to         damages and compensatory damages “close to the
damages resulting from their loss of employment.           line of constitutional impropriety” and
Because the damages awarded were far beyond the            unconstitutional when applied to the facts of this
deputies’ wages, they concurred in the remand but          case. Accordingly, the Court remanded to the
would have limited the remand only to the amount           court of appeals to consider a constitutionally
of damages. They would not have decided the                permissible remittitur.
issue of substantive due process, concluding that               Finally, the Court modified the rule that both
the County had failed to preserve the argument in          recoverable and unrecoverable attorney’s fees


                                                      14
Supreme Court Update
November 1, 2006 – October 31, 2007

may be recovered when they are inextricably                     2. HEB Ministries, Inc. v. Texas Higher Educ.
intertwined. To the extent this rule suggested that             Coordinating Bd., S.W.3d , 50 Tex. Sup. Ct.
a common set of underlying facts made all claims                J. 1094 (Tex. August 31, 2007) [03-0995].
arising therefrom “inseparable,” the court held it                     At issue in this case is whether provisions of
went too far. The Court concluded that it is “only              the Higher Education Coordinating Act, which
when discrete legal services advance both a                     restrict the terminology that private post-
recoverable and unrecoverable claim that they are               secondary educational institutions may use to
so intertwined that they need not be segregated.”               describe themselves and the educational
      Justice Johnson filed a concurring opinion                achievements of their students without approval of
and Justice O’Neill filed a dissent. They both                  the Higher Education Coordinating Board, as
argued that the court of appeals’ exemplary                     applied to a religious educational institution,
damages award was not necessarily                               violate the Free Exercise, Establishment, and Free
unconstitutional. Justice Johnson would have                    Speech Clauses of the United States and Texas
remanded so the court of appeals could more fully               Constitutions. The Board assessed administrative
explain its award and Justice O’Neill argued that               fines against Tyndale Theological Seminary and
the Court should not have intervened given the                  Bible Institute, a school operated by petitioner
court of appeals’ remittitur. Finally, Justice                  HEB Ministries, for using protected terminology,
O’Neill would not have addressed the attorney’s                 including “seminary”in its title, and for issuing
fees issue, calling it an “advisory opinion.”                   “degrees” without authorization. HEB Ministries
                                                                sued the Board for declaratory judgment. The
C. Religion Clause                                              trial court concluded that the restriction on the use
1. Barr v. City of Sinton, 2005 WL 3117209 (Tex.                of the term “seminary” was constitutionally
App.—Corpus Christi 2005), pet. granted, 50 Tex.                impermissible, but in all other respects granted
Sup. Ct. J. 218 (December 18, 2006) [06-0074].                  summary judgment for the Board. The court of
       In this religious freedom action, Pastor Rick            appeals reversed the trial court’s judgment with
Barr asserts that a city zoning ordinance impedes               respect to the word “seminary” but upheld the
his free exercise of religion. Barr runs the                    remainder of the judgment. The Supreme Court
Philemon Homes, a nonprofit organization to                     reversed and remanded.
provide men with religious counseling. Barr owns                       The Court unanimously held that the
two houses, which he and the Philemon Homes                     restriction on the use of the term “seminary”
use for their ministry. These homes are located in              violated the Free Exercise Clause. Because
Sinton, directly across from the sponsoring                     “seminary” has a distinctly religious meaning, the
church. Those living in the homes have been                     State’s regulation targeted religion and was, thus,
released on parole and must receive permission                  subject to strict scrutiny. Because the State had
from the State before taking up residence. The                  no interest in regulating religious education, the
City of Sinton passed an ordinance which                        statute impermissibly burdened HEB Ministries’
prohibits locating a correctional or rehabilitation             free exercise rights.
facility within 1,000 feet of certain areas,                           Justice Hecht, joined by Justices O’Neill,
including churches.                                             Brister, and Medina, also concluded that the
       The trial court found that the ordinance did             State’s regulation of other educational
not substantially burden Barr’s religion, and, even             terminology, as applied to a religious educational
if it did, a set-off of 1,000 feet constituted the least        institution, violated the Establishment and Free
restrictive means. The court of appeals affirmed                Exercise Clauses. By allowing only approved
the trial court’s judgment, holding that the trial              religious institutions access to restricted
court entered appropriate findings of fact and                  terminology, the State expressed a preference for
conclusions of law and that the city ordinance did              one mode of religious education over another and
not substantially burden Barr’s religious beliefs.              excessively entangled the State in religious
The Supreme Court granted Barr’s petition for                   education.       In addition, because the State
review and heard oral argument on March 22,                     effectively restricted all terminology capable of
2007.                                                           describing educational attainment, the regulations


                                                           15
Supreme Court Update
November 1, 2006 – October 31, 2007

placed a unique burden on religious                          trial court dismissed. The court of appeals
communication and was not narrowly tailored to               affirmed in part, but reversed the dismissal of her
achieve its purpose.                                         professional negligence claims against Westbrook.
      Justice Wainwright, joined by Justice                  The court of appeals determined these claims
Johnson, concurred in part and dissented in part.            involved secular professional counseling and
Justice Wainwright concluded that the State’s                neutral rules generally applicable to such conduct.
decision to regulate the granting of degrees was a                 The Supreme Court reversed, dismissing the
neutral regulation of general applicability and,             case for want of jurisdiction. The Court noted
thus, did not impermissibly burden HEB                       that in his dual capacity as her pastor and
Ministries’ free exercise rights. However, Justice           counselor, Westbrook owed Penley conflicting
Wainwright concurred in the result on the grounds            duties; as her counselor he owed her a duty of
that the regulations violated the Free Speech                confidentiality and as her pastor he had an
Clause. Tyndale’s use of restricted terminology              obligation to disclose her conduct. The Court
was protected commercial speech, and the State’s             determined that parsing out Westbrook’s roles for
regulations, barring Tyndale from using all terms            purposes of determining civil liability, where
useful for describing educational attainment, were           health and safety are not at issue, would
not proportionate to the interest served.                    unconstitutionally entangle the court in matters of
      Chief Justice Jefferson, joined by Justice             church governance and impinge on the core
Green, concurred in part and dissented in part,              religious function of church discipline.
concluding that the State’s regulations regarding
the issuance of degrees were constitutional.                 D. Spousal Support
                                                             1. In re Green, 221 S.W.3d 645 (Tex. April 20,
3. Westbrook v. Penley, 231 S.W.3d 389 (Tex.                 2007) [06-0496].
June 29, 2007) [04-0838].                                          In this case, the Supreme Court granted
      At issue in this case is to what extent pastors        Green’s writ of habeas corpus and ordered him
may be held liable for providing counseling                  discharged.
services under secular negligence standards.                       Alvin Green agreed in a divorce decree to
      C.L. Westbrook, Jr., a licensed counselor,             pay contractual alimony to his ex-wife on a
provided paid marriage counseling to Peggy Lee               monthly basis for a period lasting over a decade.
Penley. Westbrook later became the pastor of a               He was incarcerated for criminal contempt for
new church, of which Penley became a member.                 failing to make the payments agreed to in the
Penley and her husband attended group marriage               decree. The payments did not meet the Texas
counseling with Westbrook and other members of               Family Code’s definition of spousal maintenance:
the church. Outside these sessions, Penley                   a spouse can only be ordered to pay maintenance
confided in Westbrook her intention to seek a                if (1) the spouse has committed a recent act of
divorce and her participation in an extramarital             family violence, or (2) the marriage lasted at least
affair.    Westbrook recommended a divorce                   ten years and the receiving spouse cannot support
attorney but informed Penley he would share this             himself or herself due to disability, is the full-time
information with the church pursuant to its                  custodian of a disabled child of the marriage, or
disciplinary principles, which Penley had                    lacks earning ability adequate to provide support
acknowledged on joining the congregation.                    for the spouse’s minimum reasonable needs.
Penley immediately resigned as a member.                           Because the money Green owed to his ex-
Nevertheless, Westbrook and three other church               wife was a contractual debt, rather than a legal
elders disseminated a letter to the congregation             obligation imposed by Texas law, the Supreme
asking that Penley be shunned because she had                Court held that article I, section 18 of the Texas
“no biblical basis” for her divorce and had                  Constitution—which states, “No person shall ever
“chosen to engage in a biblically inappropriate              be imprisoned for debt”—prohibits punishing
relationship with another man.”                              Green by contempt.
      Penley sued Westbrook, the elders, and the
church on a number of theories, all of which the


                                                        16
Supreme Court Update
November 1, 2006 – October 31, 2007

VIII. CONTRACTS                                              petition for review and heard oral argument on
A. Condition Precedent                                       October 16, 2007.
1. Solar Applications Eng’g, Inc. v. T.A.
Operating Corp., 191 S.W.3d 173 (Tex.                        B. Consideration
App.—San Antonio 2006), pet. granted, 50 Tex.                1.      First Commerce Bank v. Palmer,
Sup. Ct. J. 667 (April 30, 2007) [06-0243].                  226 S.W.3d 396 (Tex. June 1, 2007) [05-0686].
      In this case, a construction contract between                This case involved the validity of two
a general contractor and an owner provided that              guaranty agreements required by a creditor and
the general contractor must release liens filed              given by shareholders of a corporate debtor. The
against the project prior to final payment. At issue         trial court refused to enforce the guaranties,
is whether the general contractor must provide lien          finding problems with the underlying
releases from it and its subcontractors as a                 consideration, and the court of appeals affirmed.
condition precedent to suing the owner for breach            Because there was evidence that the guaranties
of contract.                                                 were signed after the promissory note, the court of
      TA hired Solar to build a truck stop in San            appeals concluded that consideration independent
Antonio. The construction contract contemplated              of the underlying debt was required. The
a certain sequence of events leading up to the               Supreme Court disagreed, noting that the
project’s completion and final payment. When                 determination of whether a guaranty agreement is
construction began, the parties became embroiled             independent of the debt it guarantees is not simply
in various disagreements so that the process                 a question of the order in which the documents are
contemplated by the contract for completion and              signed. Instead, the Court noted that independent
payment was not followed. The parties agree that             consideration is required only when the
the project was substantially complete on August             guarantor’s promise is not part of the transaction
11, 2000. A few weeks later, TA presented Solar              creating the guaranteed debt. Concluding that the
with a “punch list” of items that needed to be               guaranties at issue were not independent
completed before final payment. After that,                  transactions but rather part of the corporation’s
disputes arose over completion of the punch list.            renewal of a prior note, the Court reversed the
According to Solar, by late September it had                 court of appeals’ judgment and remanded the case
completed “most of the items that were its                   to the trial court for further proceedings.
responsibility, and was working on completing the
rest.” Solar filed a lien affidavit against the              C. Discovery Rule
project on October 2, 2000, in the amount of                 1. Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex.
$472,393. On November 13, TA terminated Solar                December 22, 2006) [05-0785].
pursuant to the agreement’s termination “for                       In this case, the Supreme Court held that the
cause” provision, stating that Solar had failed to           four-year statute of limitations for breach of a
keep the project lien-free, as the contract required,        promise to provide additional-insured coverage
and failed to complete the punch list. On the same           usually accrues at the time of the breach, not at
day, Solar responded with a payment request for              the time the breach is discovered.
$472,149.       TA refused to make payment,                        Safety Lights was assured that it had been
contending that Solar had not complied with the              added as an additional insured under Via Net’s
contract’s lien-release requirement. Solar sued              commercial general liability insurance policy.
TA for breach of contract to recover the contract            Via Net’s insurance broker issued a certificate
balance. TA counterclaimed for breach of                     which listed Safety Lights as “holder” and stated
contract.                                                    that “holder is added as additional insured re:
      A jury found for Solar, but the court of               General Liability.” However, the certificate also
appeals reversed and rendered a take-nothing                 contained a waiver which stated that it was only
judgment in favor of TA because Solar had not                issued for informational purposes and did not
complied with the contract as it had not released            confer any rights on the holder.
its liens. The Supreme Court granted Solar’s                       Subsequently, a Via Net employee sued
                                                             Safety Lights. Safety Lights requested a defense


                                                        17
Supreme Court Update
November 1, 2006 – October 31, 2007

from Via Net’s insurer, but was denied based on              any agent of “the parties being released hereby,”
the waiver language. Safety Lights settled the               and that each had been advised by counsel.
employee’s suit and then sued Via Net and its                      Six years later, McAllen and other
insurer for breach of contract and                           signatories and non-signatories to the settlement
misrepresentation. Via Net moved for summary                 agreement brought suit against Forest Oil
judgment on the ground that more than four years             Corporation and its employee Daniel Worden
had elapsed since Via Net breached the alleged               based on various acts and omissions on McAllen’s
contract, and the trial court granted the motion.            ranch causing environmental damage and other
The court of appeals reversed, holding that the              damages and personal injury. Forest Oil moved to
discovery rule could defer accrual until Safety              stay litigation and compel arbitration as to
Lights received the insurer’s denial.                        McAllen and the signatory plaintiffs. In response,
      The Supreme Court reversed, holding that the           McAllen claimed that he was fraudulently induced
discovery rule did not apply to the type of contract         into the arbitration provision by representations
at issue in the case. The Court noted that this              made by Forest Oil that there were no
breach of contract was not inherently                        contamination problems with his land.
undiscoverable. Further, Safety Lights learned of                  The trial court denied the motion without
the breach within a few months after it occurred.            stating the grounds.       Forest Oil took an
The Court recognized that some breach of contract            interlocutory appeal, but the court of appeals
claims may be inherently undiscoverable; but such            affirmed, concluding, among other things, that
instances will necessarily be rare because most              Schlumberger Technology Corp. v. Swanson,
breaches should be discoverable within the four-             959 S.W.2d 171 (Tex. 1997) did not support the
year limitations period.                                     contention that McAllen was not entitled to rely
                                                             on any alleged representations because of the
D. Fraudulent Inducement                                     disclaimers in the settlement agreement. The
1. Forest Oil Corp. v. McAllen, 2005 WL                      court also noted the disclaimers went only to the
3435061 (Tex. App.—Corpus Christi 2005), pet.                released claims, not the reserved claims, and so
granted, 50 Tex. Sup. Ct. J. 667 (April 30, 2007)            McAllen did not disclaim reliance on the
[06-0178].                                                   representations as to contamination.
      The principle issues presented in this case are              The Supreme Court granted Forest Oil’s
whether plaintiff’s disclaimer of reliance on                petition for review and heard oral argument on
representations made in a settlement contract                October 16, 2007.
releasing and reserving certain claims and sending
any disputes to arbitration should bar plaintiff’s           E. Statute of Frauds
claim he was fraudulently induced into the                   1. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632
arbitration provision and, if not, whether plaintiff         (Tex. April 20, 2007) [04-0851].
could have justifiably relied on representations                  Women’s volleyball coach Tom Sonnichsen
contrary to the contract and made during                     sued Baylor for fraud and breach of his
settlement negotiations for purposes of fraudulent           employment contract. He alleged that Baylor
inducement.                                                  breached an oral promise to enter into a two-year
      James McAllen and other plaintiffs settled             written employment contract with him and that
their royalty underpayment and underdevelopment              Baylor committed fraud by representing that it
suit against oil and gas lessees. They reserved              would give him such a contract. The trial court
environmental liability and personal injury claims           entered summary judgment in favor of Baylor on
relating to the McAllen Ranch leases, and the                both claims. The court of appeals affirmed
parties agreed to arbitrate disputes over the                summary judgment on the breach of contract
released and reserved claims. The plaintiffs                 claim, holding that an oral promise to enter into a
warranted that no promises had been made to them             two-year contract is not enforceable under the
“in executing the releases,” that none of them was           statute of frauds. The court of appeals reversed
relying upon any statement or representation of              the summary judgment on the fraud claim, noting
                                                             that the statute of frauds would also bar


                                                        18
Supreme Court Update
November 1, 2006 – October 31, 2007

Sonnichsen’s fraud claim for the same damages               elected to recover on the fraud claim, and the
sought in his breach of contract claim but holding          court of appeals affirmed.
that Baylor had not established that Sonnichsen’s                The Supreme Court held that the evidence of
fraud damages were limited to the benefits of his           the value of an overriding royalty interest could
alleged contract.       On remand, Sonnichsen               not be considered to determine Bennett’s damages
amended his petition, adding a claim for breach of          because such an interest falls within the statute of
contract rights created by Baylor’s representations         frauds and the parties had no written agreement.
and a one-year written contract that Baylor fully           Allowing recovery of the value of a royalty
executed but did not deliver. Baylor specially              interest when the interest itself could not be
excepted to the amended contract claim and also             recovered would circumvent protections of the
moved for summary judgment on the fraud claim.              statute of frauds. While there was other evidence
The trial court sustained the special exception and         of Bennett’s damages, it was legally insufficient
granted Baylor’s motion for summary judgment.               to support the full $1 million award. The
In the second appeal, the court of appeals reversed         Supreme Court reversed the court of appeals
on both points.                                             judgment and remanded the case to that court.
      The Supreme Court reversed the court of                    Justice Brister, joined by Justice Hecht and
appeals’ judgment and rendered judgment that                Justice Willett, concurred in part and dissented in
Sonnichsen take nothing. The Court concluded                part. He agreed that the $1 million verdict must
that the trial court correctly sustained Baylor’s           be set aside under the statute of frauds. However,
special exceptions for two reasons: (1) Taking              because the jury charge contained the same
Sonnichsen’s pleadings as true, Baylor never                instructions for determining damages on the fraud
delivered the one-year written contract to                  and quantum meruit charges, he would render
Sonnichsen. Without delivery, the contract lacked           judgment on the $2,500 quantum meruit verdict.
mutual assent and was therefore unenforceable.
(2) Sonnichsen’s pleadings only alleged an oral             3. The Long Trusts v. Griffin, 222 S.W.3d 412
promise to enter into a two-year written                    (Tex. December 8, 2006) [04-0825].
agreement, which the court of appeals already held                This case involved disputes over a litigation
was barred by the statute of frauds. The trial court        recovery agreement and agreements relating to
properly granted summary judgment on the fraud              working interests in producing oil wells. The
claim because Sonnichsen sought to recover the              Supreme Court partially reversed the court of
same damages under his fraud claim as he sought             appeals’ judgment and remanded the case to the
for breach of an unenforceable contract.                    trial court to redetermine attorneys fees.
                                                                  The Long Trusts sued a third party, offering
2. Quigley v. Bennett, 227 S.W.3d 51 (Tex. June             to split recovery with the Griffins and others who
8, 2007) [05-0870].                                         shared in the costs of litigation. The Long Trusts
      Robert Bennett, a geologist, agreed to                were to bill such investors monthly; any investor
analyze some data for Michael Quigley who was               who missed more than one payment would be
selling some oil and gas leases. Bennett initially          dropped from the lawsuit. Billing was sporadic
agreed to do the work for free as a favor to a              for three years, but the Griffins timely paid the
colleague but agreed to do additional work when             bills that did come. When the Long Trusts sent a
Quigley told him, “Don’t worry, Bennett, I’ll take          bill for twenty months of accumulated expenses,
care of you.” Quigley eventually sold the leases            the Griffins refused to pay the full bill. When the
and retained an overriding royalty interest. After          Griffins did not timely pay the next month’s bill,
producing wells were drilled, Bennett sought                the Long Trusts notified the Griffins that they
compensation, but the two could not come to an              would be dropped from the lawsuit. No more
agreement. Bennett sued Quigley for quantum                 payments were made, but when the lawsuit
meruit and fraud. At trial, he presented evidence           settled, the Griffins demanded their share of the
that he only worked for an overriding royalty               settlement. The trial court awarded the Griffins a
interest. They jury awarded Bennett $1 million              share of the settlement, and the court of appeals
for fraud and $2,500 for quantum meruit. Bennett            affirmed.       The Supreme Court reversed.


                                                       19
Supreme Court Update
November 1, 2006 – October 31, 2007

Assuming that the Long Trusts’ failure to send             F. Warranties
monthly bills was a material breach, the Griffins          1. Gym-N-I Playgrounds, Inc. v. Snider, 220
could either treat the contract as terminated, thus        S.W.3d 905 (Tex. April 20, 2007) [05-0197].
excusing their own failure to pay for litigation                 The question presented in this case is
costs, or they could sue for enforcement, but they         whether an “as is” clause in a commercial lease
could not both cease performance and sue to claim          agreement waives the implied warranty of
the benefit of the bargain.                                suitability.
      Further, the Griffins, the Ogilvies, and                   Ron Snider founded Gym-N-I Playgrounds,
Charles Conrad contracted in 1978 and 1982 to              Inc., a playground equipment manufacturing
pay the Long Trusts for part of the drilling and           company, and owned the building in New
operating costs in exchange for assignment of              Braunfels where the business was located. Patrick
working interests in producing wells. When                 Finn and Bonnie Caddell purchased the company
contract disputes arose, the Long Trusts asserted          and entered into a lease agreement with Snider for
that the agreements were unenforceable under the           the building. The agreement contained an “as is”
Statute of Frauds because the contracts did not            clause and expressly disclaimed all implied
specifically identify the property intended to be          warranties. In 2000, a fire destroyed Snider’s
covered. The trial court and court of appeals held         building and its contents. Gym-N-I, through Finn
that the property descriptions were sufficient, and        and Caddell, sued Snider for negligence, DTPA
the court of appeals further held that the Long            violations, fraud, and breach of the implied
Trusts could not avoid enforcement under the               warranty of suitability, alleging that the building
Statute of Frauds because they had knowingly               contained faulty electrical wiring and that Snider
accepted the benefits of the agreements. The               failed to install and maintain a fire sprinkler
Supreme Court reversed in part, holding that the           system.      The trial court granted summary
agreements did not comply with the Statute of              judgment for Snider. The court of appeals
Frauds, and that past performance of the                   affirmed, concluding that the “as is” clause
agreements did not require any future                      negates the causation element in Gym-N-I’s
performance. The property descriptions in the              claims for negligence, DTPA violations, and
1978 agreement amounted to no more than a                  fraud, and that the “as is” clause waives the
statement of the number of acres each lease was to         implied warranty of suitability.
cover within a certain area. The 1982 agreement                  The Supreme Court rejected Gym-N-I’s
was similar, but also contained a reference to             claim that the implied warranty of suitability is
another contract. That contract, however, also             waived only to the extent that the tenant agrees to
failed to describe the property sufficiently,              repair certain defects. The Court, held that the “as
assuming it could serve that purpose; although             is” clause was in effect at the time of the fire, the
there was an attachment to that contract describing        lease expressly disclaimed the implied warranty of
certain leases, the attachment stated that it was          suitability, and the “as is” clause negated Gym-N-
part of yet another contract. Whether or not the           I’s other causes of action based on the condition
court of appeals was correct in enforcing                  of the property. The Court affirmed the court of
performance with respect to wells already drilled,         appeals’ judgment.
the agreements specifically stated that acquisition
of any interest in the past was completely separate        2. JCW Elecs., Inc. v. Garza, 176 S.W.3d 618
from future transactions, thus the Long Trusts             (Tex. App.—Corpus Christi 2005), pet. granted,
could assert the Statute of Frauds as a defense to         50 Tex. Sup. Ct. J. 910 (June 25, 2007) [05-1042].
any future wells for which the Griffins, Ogilvie,               The principle issues in this case are whether
and Conrad had not yet paid anything. The                  the proportionate responsibility statute applies to
Supreme Court reversed the court of appeals’               actions for breach of an implied warranty, whether
judgment to the extent it had enforced the                 the jury charge was correct regarding the
agreements for any future wells.                           affirmative defense of suicide, and whether a
                                                           claimant should be allowed to recover for breach



                                                      20
Supreme Court Update
November 1, 2006 – October 31, 2007

of an implied warranty of fitness when there has            immediate temporary relief. The Supreme Court
been no sale of goods.                                      granted argument on Bazan’s petition for writ of
     Rolando Montez was arrested for public                 mandamus and heard oral argument on September
intoxication and while in his prison cell, he hung          26, 2007.
himself using the phone cord installed in his cell.
JCW Electronics owned and installed the phone               X. DRAM SHOP ACT
pursuant to a contract with the city. Montez’s              A. Proportionate Responsibility
family brought suit against both the city and JCW.          1. F.F.P. Operating Partners, L.P. v. Duenez,
The jury found JCW breached its implied                        S.W.3d , 50 Tex. Sup. Ct. J. 764 (Tex. May
warranty but found it only 15% responsible for the          11, 2007) [02-0381].
harm caused, while finding Montez was 60%                         On September 3, 2004, the Court issued a
responsible. JCW moved that the plaintiff take              judgment and opinion affirming the judgment of
nothing in accord with Texas’ proportionate                 the court of appeals. On April 8, 2005, the Court
responsibility scheme, which mandates that a                granted the petitioner’s motion for rehearing. On
plaintiff take nothing in an action based in tort           November 3, 2006, the Court withdrew its opinion
when his own negligence totals more than 50%.               and judgment of September 3, 2004 and issued a
The trial court denied JCW’s motion for entry of            judgment and opinion reversing the judgment of
judgment that the plaintiff take nothing and held           the court of appeals and remanding the case to the
JCW liable based on fraud and breach of contract            trial court. On May 11, 2007, the Court denied
theories. The court of appeals modified the                 the respondents’ motion for rehearing and issued
judgment of the trial court by premising liability          a new opinion in place of the November 3, 2006
on breach of an implied warranty rather than                opinion. The May 11, 2007 opinion contained
breach of contract and fraud and refused to apply           only minor changes.
the proportionate responsibility statute to a breach              In this case, the Supreme Court determined
of implied warranty claim. The Supreme Court                (1) the extent to which Texas Civil Practice &
granted JCW’s petition for review and heard oral            Remedies Code chapter 33’s proportionate
argument on October 18, 2007.                               responsibility scheme applies to third-party claims
                                                            brought under the Dram Shop Act (Texas
IX. COUNTY OFFICIALS                                        Alcoholic Beverage Code section 2.02) when
A. Removal from Office                                      there is no allegation that the plaintiff was
1. In re Bazan, 2006 WL 3095888 (Tex.                       negligent and (2) whether the trial court abused its
App.—Corpus Christi 2006), argument granted on              discretion by severing the dram shop’s
pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 842          contribution claim against the drunken driver.
(June 8, 2007) [06-0952].                                   Several members of a family suffered serious
      At issue in this case is whether a constable          injuries after being hit by a drunken driver. The
who has been convicted of a crime that occurred             family brought suit under the Dram Shop Act
prior to his reelection may be removed from office          against the convenience store that sold alcohol to
and suspended pending appeal under sections                 the intoxicated driver. The convenience store
87.031 and 87.032 of the Texas Local Government             brought a contribution claim against the driver.
Code. In 2004, Eduardo “Walo” Gracia Bazan, a               The trial court severed the contribution claim and
Hildago County constable, was reelected to his              granted a partial summary judgment to the
position. In 2006, Bazan was convicted of theft by          plaintiffs. The court of appeals affirmed, holding
a public servant for an event occurring in 2001.            that the Dram Shop Act imposes vicarious liability
As part of the conviction order, the trial court            on the alcohol seller and that the proportionate
removed Bazan from his position under section               responsibility act is inapplicable to third-party
87.031 of the Texas Local Government Code and               dram shop actions in the absence of any allegation
stated that under section 87.032, in the event of an        that the plaintiffs themselves were negligent.
appeal by Bazan, the public interest required his                 The Supreme Court reversed and remanded
suspension from office. The court of appeals                the case to the trial court, holding that the
denied Bazan’s request for mandamus and                     proportionate responsibility scheme of Chapter 33


                                                       21
Supreme Court Update
November 1, 2006 – October 31, 2007

applies to claims brought under chapter 2 of the             B. Safe-Harbor Provision
Alcoholic Beverage Code. The Court concluded                 1. 20801, Inc. v. Parker, 194 S.W.3d 556 (Tex.
that holding the dram shop responsible to injured            App.—Houston [14th Dist.] 2006), pet. granted,
third parties for its own and its intoxicated                50 Tex. Sup. Ct. J. 532 (March 12, 2007) [06-
patron’s liability is consistent with the express            0574].
provisions of the proportionate responsibility                     This case involves statutory interpretation of
statute. The Court noted that the Legislature had            the third element of the safe harbor provision of
not expressly excepted dram shop liability from              the Dram Shop Act, which requires an alcohol
the proportionate responsibility statute, as it had          provider to prove that it did not directly or
with other statutory causes of action. Further, the          indirectly encourage its employees to serve
Court’s decision in Smith v. Sewell, 858 S.W.2d              alcohol to an intoxicated customer. Parker sued
350 (Tex. 1993), governs this case. In Sewell, the           20801 under the Dram Shop Act for injuries he
Court held that the proportionate responsibility             sustained at Slick Willie’s Family Pool Hall,
statute applies to a first party claim by a drunken          operated by 20801, Inc. The trial court granted
patron against a dram shop. Thus, the trial court            20801’s motion for summary judgment. The court
abused its discretion by failing to submit the               of appeals reversed, holding that 20801 failed to
patron’s negligence and proportion of                        establish the third element of the safe-harbor
responsibility to the jury and by severing the               provision because it presented no evidence of its
provider’s claim against the patron from the case.           behavior on the night in question. 20801 asserts
      Chief Justice Jefferson dissented, arguing             that the courts have rendered the provision
that the Dram Shop Act imposes a form of                     impossible to prove by requiring evidence of no
vicarious liability. He concluded the Legislature            direct or indirect encouragement on the occasion
did not intend a dram shop to be included in the             in question. The Texas Restaurant Association,
apportionment of liability but instead intended a            Texas Retailers Association, Texas Petroleum
provider to answer in damages for the injury its             Marketers and Convenience Store Association,
patron’s intoxication inflicts on a third party, even        and the Texas Package Stores Association
if the provision of alcohol to a clearly intoxicated         presented an amicus curiae brief in support of
patron is not the proximate cause of the injury. He          20801. The Supreme Court granted 20801’s
would limit Sewell to first-party claims and                 petition for review and heard oral argument on
overrule its holding that the provider is properly           September 26, 2007.
included within those persons who caused the
harm.                                                        XI. ELECTIONS
      Justice O’Neill also dissented. She would              A. Local Option Election
hold that when a customer who has been served in             1. In re Davis, 2007 WL 530033 (Tex.
violation of the Dram Shop Act injures an                    App.—Dallas 2007), argument granted on pet. for
innocent third party, the third party may recover            writ of mandamus, 50 Tex. Sup. Ct. J. 1074
from the Dram Shop. However, the intoxicated                 (September 4, 2007) [07-0147].
customer’s percentage of responsibility must be                    Texas has special election rules relating to
apportioned under Chapter 33 to allow the                    the sale of alcohol in local precincts. Under the
provider to seek reimbursement from the                      Texas Alcoholic Beverage Code, whenever a local
customer. In her view, however, even though the              option status of wet/dry has been put into effect as
trial court should have submitted the intoxicated            the result of a local precinct election, this status is
patron’s percentage of responsibility to the jury            to remain in effect until it is changed as the result
for apportionment, its severance order did not               of a vote in the same territory that comprised the
amount to reversible error.                                  precinct when such status was established. If the
                                                             boundaries of the justice precinct have changed
                                                             since the status was adopted, the commissioners
                                                             court must define the boundaries of the original
                                                             precinct and a local option election may be held



                                                        22
Supreme Court Update
November 1, 2006 – October 31, 2007

within the territory defined by the commissioners           over time, and were sometimes more clerical than
court constituting the original precinct.                   she desired, there was no evidence her
      The issue in this case is whether the Dallas          responsibilities were anything other than those of
County Commisioners Court abused its discretion             an assistant professor. Further, even a substantial
in refusing to order a local option election. The           change in job assignments could not be the basis
relators submitted a petition requesting an election        for a constructive discharge claim. Constructive
in the current justice of the peace precinct 3. The         discharge occurs when an employer makes
Commissioners Court determined that portions of             conditions so intolerable that a reasonable
precinct 3 were included within the boundaries of           employee would feel compelled to resign, and the
former precincts that voted dry in previous local           trial court properly instructed the jury using this
option elections.          The Dallas County                standard. The Court rejected the argument that
Commissioners Court established the historical              Coley had not preserved error, holding that her
boundaries for one of the earlier precincts but             proposed jury instruction timely and plainly made
denied a request from the Dallas County Elections           the trial court aware of the principal legal issue of
Department to order a local option election. The            the constructive discharge standard.
relator sought mandamus relief in the court of                    Justice Johnson, joined by Justice
appeals but relief was denied. The Supreme Court            Wainwright, concurred, arguing that Coley had
granted argument on relator’s petition for writ of          not preserved error. There was some dispute
mandamus and will hear oral argument on                     between the parties about whether Coley was
December 5, 2007.                                           tenured in a position or in a field. Because
                                                            Coley’s proposed instruction used the word
XII. EMPLOYMENT LAW                                         position, it directly assumed a controverted
A. Constructive Discharge                                   material fact, and thus could not be substantially
1. Baylor Univ. v. Coley, 221 S.W.3d 599 (Tex.              correct. As the Texas Rules of Civil Procedure
April 20, 2007) [04-0916].                                  preclude reversal unless a substantially correct
      Betty Coley was a librarian at Baylor                 instruction is requested, the concurrence would
University and was tenured at the rank of                   have rendered judgment for Baylor without
Assistant Professor. Coley alleged that Baylor              discussing the merits.
effectively demoted her by reassigning her
responsibilities to others, thereby breaching her           B. Law Enforcement Officers
contract and forcing her to resign. The trial judge         1. VanDevender v. Woods, 222 S.W.3d 430 (Tex.
refused to submit Coley’s proposed jury                     April 27, 2007) [05-0956].
instruction on breach of contract and instead                      Deputy Sheriff James VanDevender sought
submitted a question on constructive discharge.             a declaratory judgment that Jefferson County and
The jury found no constructive discharge, and the           its sheriff, G. Mitch Woods, violated article III,
trial court rendered judgment for Baylor.                   section 52e of the Texas Constitution by failing to
Although the court of appeals held that Coley was           pay VanDevender’s full salary during his second
not entitled to a separate jury question on breach          term as a deputy sheriff after he became disabled.
of contract, it reversed, holding that the jury             Under that constitutional provision, county law
instruction on the constructive discharge used the          enforcement officers are granted their “maximum
wrong standard.                                             salary” while they are “hospitalized or
      The Supreme Court reversed the court of               incapacitated” until their “term of office” expires.
appeals’judgment and rendered judgment for                  The trial court and court of appeals held that the
Baylor. The Court held that there was no evidence           Constitution did not entitle VanDevender to salary
that changing Coley’s responsibilities at the               continuation benefits.
library was a breach of contract. Coley’s tenure                   The Supreme Court held that the court of
contract gave her the right to “continue in her             appeals should not have reached the ultimate
academic position” and to continue to do the                c o n s t i t u t i on a l qu e s t i on—whether t h e
“general kinds of things” she was doing when                Constitution’s full-pay entitlement extends into an
given tenure. Even if her responsibilities changed          officer’s subsequent term of office—without first


                                                       23
Supreme Court Update
November 1, 2006 – October 31, 2007

reviewing whether VanDevender’s incapacity                   rejected the City’s arguments regarding Lopez’s
resulted from a job-related injury, a precondition           good faith belief that he was reporting the
to receiving continued salary. Because this                  violation of a law to an appropriate law
threshold issue should be addressed first, the               enforcement authority.
Court vacated the court of appeals’ judgment and                   The Supreme Court granted the City’s
remanded to that court to consider VanDevender’s             petition for review and heard oral argument on
factual sufficiency argument.                                September 27, 2007.

C. Whistleblower Actions                                     2. Montgomery County v. Park, 2005 WL
1. City of Waco v. Lopez, 183 S.W.3d 825 (Tex.               2667488 (Tex. App.—Waco 2005), pet. granted,
App.—Waco 2005), pet. granted, 50 Tex. Sup. Ct.              50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-
J. 674 (April 30, 2007) [06-0089].                           1023].
      This case presents three issues: (1) whether                 Lieutenant Park of the Montgomery County
the Commission on Human Rights Act (CHRA) is                 Sheriff’s Department reported sexual harassment
the exclusive remedy for a retaliation claim, (2)            of two female employees by a county
whether a city’s Equal Employment Opportunity                commissioner to the Sheriff and to the county
(EEO) policy is a law under the Whistleblower                attorney. Thereafter, Park’s duties arranging for
Act (WBA), and (3) whether the WBA applies                   off-duty officers to provide security to the county
only to retaliation for reporting violations of law          convention center were curtailed at the request of
detrimental to the public good.                              the commissioner. Park brought suit under the
      The City of Waco employed Lopez as an                  Texas Whistleblower Act. See TEX . GOV ’T CODE
inspector in the New Construction division.                  § 554.001. The trial court granted Montgomery
Lopez filed a grievance with the City’s EEO                  County’s motion for summary judgment, but the
officer in the Human Resource Department, citing             court of appeals reversed and remanded. At issue
race and age discrimination as reasons for his               in this case is what constitutes an “adverse
transfer from one department to another. The                 personnel action” and a “public employee” under
following September, Lopez traveled from Waco                the Texas Whistleblower Act, and whether
to Austin in a city owned vehicle and was fired for          Lieutenant Park reported in good faith a violation
allegedly making the trip in the city owned vehicle          of law to an appropriate law enforcement agency.
without obtaining prior approval.                                  The Supreme Court granted the County’s
      Lopez filed suit under the WBA, claiming               petition for review and heard oral argument on
that the City fired him in retaliation for filing the        March 20, 2007.
grievance two months earlier. He claimed the City
violated its EEO policy of non-discrimination                XIII. EVIDENCE
based on age or race. The City filed a plea to the           A. Damages
jurisdiction and motion for summary judgment,                1. Guevara v. Ferrer, S.W.3d , 50 Tex. Sup.
arguing that the facts do not, as a matter of law,           Ct. J. 1182 (Tex. August 31, 2007) [05-1100].
support a WBA claim. The trial court denied the                    At issue in this case was whether expert
City’s plea and motion. The City appealed and the            medical evidence was required to support a
court of appeals affirmed, holding that the CHRA             finding that an automobile accident caused
is not Lopez’s exclusive remedy because he is not            medical expenses of over $1 million. Eighty-six-
pursuing a claim under the CHRA, does not allege             year-old Aurturo Labao was injured in a car
the City violated the CHRA, and does not allege              accident and taken by ambulance to a hospital
that the City fired him for reporting a violation of         emergency room. He underwent surgery that
the CHRA. On the second issue, the court of                  night, remained in the hospital for three months,
appeals held that the City’s EEO policy is a “law”           underwent another surgery, and then spent two
under the WBA because it is a “rule adopted under            weeks in a continuing care facility. The next
a statute” and rejected the City’s argument that             month, he was admitted to another medical center
laws under the WBA must pertain to the public                for two weeks. Labao later died and his daughter,
good in general. The court of appeals further                Corazon Labao Ferrer, sued the driver of the other


                                                        24
Supreme Court Update
November 1, 2006 – October 31, 2007

vehicle, Noemi Guevara. At trial, Labao’s                   B. Defendant’s Financial Status
medical bills, totaling over $1 million, were               1. Reliance Steel & Aluminum Co. v. Sevcik,
admitted into evidence. A few medical records               2006 WL 563044 (Tex. App.—Corpus Christi
were also admitted into evidence. One indicated             2006), pet. granted, 50 Tex. Sup. Ct. J. 1014
he had a significant past medical history of “atrial        (August 24, 2007) [06-0422].
fibrillation and hypertension as well as acute and               The issue in this case is whether evidence of
chronic renal failure,” and the record from his last        a defendant’s financial status is admissible in a
hospitalization, months after the accident,                 personal injury case where the plaintiff does not
indicated that he went to the emergency room                seek punitive damages.
complaining of “[c]ough and shortness of breath.”                Samuel Alvarado, an employee of Reliance
The jury found damages of over $1.1 million for             Steel, was involved in an automobile accident in
Arturo’s medical expenses, but the trial court              which Cathy Loth was injured. All parties agreed
granted Guevara’s motion for judgment                       that Reliance would be liable for Alvarado’s
notwithstanding the verdict on the grounds that             actions under the theory of respondeat superior,
there was no evidence that Labao’s treated                  and Alvarado admitted to his negligence at trial.
conditions were caused by the accident. The court           Although Loth did not seek punitive damages, she
of appeals reversed and remanded for entry of               was allowed to introduce evidence of Reliance’s
judgment based on the jury’s verdict.                       gross annual sales.
      The Supreme Court held that expert medical                 Pursuant to the jury’s verdict, the trial court
evidence is generally required to prove causation           awarded damages to Loth for past and future
unless competent evidence supports a finding that           medical expenses, as well as loss of future earning
the causal relationship between the conditions and          capacity. The court of appeals affirmed the
the accident, and the necessity of the particular           judgment of trial court, with the exception of a
medical treatments for the conditions are within            small adjustment to Loth’s past medical expenses.
the common knowledge and experience of                      The Supreme Court granted Reliance’s petition
laypersons. In this case, the Court noted that              for review and will hear oral argument on
Labao’s medical course was not smooth or simple,            December 4, 2007.
and that the evidence did not specify the
conditions for which he was treated. But, the               C. Interested Party Testimony
Court further noted that non-expert evidence of             1. Wilz v. Flournoy, 228 S.W.3d 674 (Tex. June
circumstances surrounding the accident and                  29, 2007) [06-0913].
Arturo’s complaints was sufficient to allow a                     In this constructive trust case, the Supreme
layperson of common knowledge and experience                Court held that the court of appeals erred in
to determine that Arturo’s immediate post-                  limiting a constructive trust to a thirty-five percent
accident condition, transportation to an emergency          interest in a property where the only evidence that
room, and examination were causally related to              the trustee contributed his own funds to the
the accident. Thus, the evidence was legally                property was his deposition testimony.
sufficient to support a finding that some, although               Patricia Wilz and Kenneth Flournoy
not all, of his medical expenses were causally              divorced, and Kenneth was awarded custody of
related to the accident. The Supreme Court                  their son, Jon. Jon suffered incapacitating injuries
reversed the court of appeals’ judgment and                 in an automobile accident, and Kenneth sued Ford
remanded the case to that court to consider a               Motor Company. In a settlement, Kenneth
remittitur as to expenses for which expert                  received $379,300 on Jon’s behalf and $95,000
evidence was required.                                      personally. Later, Kenneth and his new wife,
                                                            June, purchased a 110-acre farm for $153,049,
                                                            paying $49,365.50 in cash and executing a note
                                                            for the balance. The note called for monthly
                                                            payments of $961. Between 1991 and 1999, the
                                                            Flournoys withdrew several thousand dollars from
                                                            Jon’s account, many installments of which were


                                                       25
Supreme Court Update
November 1, 2006 – October 31, 2007

roughly $960. By the end of 2001, the Flournoys                  The Supreme Court reversed the court of
had depleted Jon’s account, and Jon became a               appeals’ judgment and held that under the Texas
ward of the State.                                         Rules of Evidence, a superseded pleading is
      Patricia later became Jon’s guardian, and she        treated as an admission by a party-opponent and is
sued the Flournoys on Jon’s behalf for conversion,         admissible against that party. The Court noted
breach of fiduciary duty, and constructive fraud.          that pre-Texas Rules of Evidence case law
She traced several checks drawn on Jon’s account           allowed superseded pleadings to be admitted if
to the Flournoys’ personal account. When                   they contained a statement relevant to a material
questioned about these checks, the handling of             issue in the case that is inconsistent with the
Jon’s funds, and the source of the funds used to           position taken by the party against whom it is
purchase the farm, the Flournoys each invoked the          introduced. But because the Texas Rules of
Fifth Amendment privilege against self-                    Evidence now govern the admissibility of
incrimination. The Flournoys’ sole evidence                evidence in court proceedings, the Court clarified
regarding the funds consisted of Kenneth’s pretrial        that there is no requirement that the statement be
deposition, where he said he used his settlement           inconsistent with the party’s position at trial. The
money for the farm’s down payment and that                 Court held that the court of appeals erred in
$50,000 remained outstanding on the note. When             finding the superseded pleadings inadmissible and
questioned about the truth of this testimony,              did not reach Bay Area’s other issues.
Kenneth again invoked the Fifth Amendment.                       With respect to the McShanes cross-point,
      The jury found that Kenneth breached his             that Bay Area improperly impeached their expert,
fiduciary duty and committed constructive fraud            the Court agreed with the court of appeals that the
and that the Flournoys converted Jon’s property            McShanes did not preserve the issue for review
with malice. The trial court therefore imposed a           because they failed to timely object to the
constructive trust on the entire farm. The court of        complained-of questions. The Court reversed the
appeals reversed, saying that Kenneth’s deposition         court of appeals’ judgment and rendered a take-
testimony was conclusive proof that he                     nothing judgment in favor of Bay Area.
contributed his own funds to the purchase of the
farm. The Supreme Court reversed and reinstated            XIV.         EXPUNCTION OF ARREST
the judgment of the trial court because once               RECORDS
Patricia traced Jon’s funds to the farm, the entire        A. Statutory Requirements
farm would be subject to the trust except for what         1. State v. Beam, 226 S.W.3d 392 (Tex. June 1,
the Flournoys could show they purchased with               2007) [06-0974].
their own funds, and the jury was free to disregard              Judy Beam was arrested and charged with a
Kenneth’s deposition testimony on this subject.            misdemeanor offense. The charge was later
                                                           dismissed pursuant to a plea agreement, and Beam
D. Nonsuited Parties                                       was granted deferred adjudication on the lesser
1. Bay Area Healthcare Group, Ltd. v. McShane,             charge of disorderly conduct. Beam attempted to
  S.W.3d , 50 Tex. Sup. Ct. J. 866 (Tex. June 8,           file a petition for expunction less than two years
2007) [05-1069].                                           later. The State argued that the requirements for
     In this medical malpractice action, Deborah           obtaining an expunction under Code of Criminal
Sue McShane and James Patrick McShane sued                 Procedure article 55.01(a)(2)(A)(i) apply to
Bay Area and others for injuries allegedly                 misdemeanor arrests, and therefore, the
sustained during the birth and delivery of their           limitations period for bringing an indictment for
daughter, Maggie. A jury found in the hospital’s           the underlying misdemeanor offense must expire
favor, and the trial court signed a take-nothing           before the date on which the petition for
judgment. The court of appeals reversed, holding           expunction is filed. The trial court, however,
that the trial court abused its discretion in              granted Beam’s petition for expunction. The State
admitting evidence that two doctors involved in            appealed, and the court of appeals affirmed. The
the incident were originally sued by the                   Supreme Court reversed the court of appeals’
McShanes, but were nonsuited before trial.                 judgment and rendered judgment for the State.


                                                      26
Supreme Court Update
November 1, 2006 – October 31, 2007

The Supreme Court held that the limitations                   B. Termination of Parental Rights
requirement of article 55.01(a)(2)(A)(i) applies to           1. In re H.R.M., 209 S.W.3d 105 (Tex. December
both felonies and misdemeanors, and therefore,                1, 2006) [06-0270].
Beam did not satisfy the requirements for filing an                 A mother sought to terminate the father’s
expunction petition because the limitations period            parental rights based on section 161.001(1)(Q) of
for her misdemeanor offense had not yet expired.              the Texas Family Code. Section 161.001(1)(Q)
                                                              provides for termination of parental rights where
XV. FAMILY LAW                                                the parent has “knowingly engaged in criminal
A. Grandparent Access                                         conduct that has resulted in the parent’s: (i)
1. In re Derzapf, 219 S.W.3d 327 (Tex. March 23,              conviction of an offense; and (ii) confinement or
2007) [06-0669].                                              imprisonment and inability to care for the child
      In this grandparent access case, the trial court        for not less than two years from the date of filing
signed amended temporary orders granting Connie               the petition.” The Supreme Court held that the
and Randy Johnson access to their grandchildren,              court of appeals impermissibly elevated the
despite Ricky Derzapf’s desire to limit the                   burden of proof above the clear and convincing
Johnsons’ access to his children. Derzapf sought              standard and failed to weigh all of the evidence
mandamus relief. After initially granting his                 when it decided that the jury could not reasonably
motion for temporary relief and staying the trial             have formed a firm belief or conviction that the
court’s orders, the court of appeals denied                   father would remain imprisoned or confined for
Derzapf’s mandamus petition. At issue is whether              two years when the father was concurrently
the Johnsons overcame the presumption that                    serving seven- and thirteen-year sentences for
Derzapf was acting in the children’s best interest            felonies. Based on the facts of the case, the Court
by proving by a preponderance of the evidence                 also held that, as a matter of law, the father’s
that denying the Johnsons access would                        leaving his child in the non-incarcerated parent’s
significantly impair the children’s physical health           care did not constitute providing care for the
or emotional well being as required by Family                 child. And, assuming the father had a right to
Code section 153.433.                                         effective assistance of counsel, the record did not
      The Supreme Court held that because Randy               support the father’s ineffective assistance of
Johnson was the grandchildren’s step-grandfather,             counsel claim because the father did not show
and not the grandchildren’s biological or adoptive            how counsel’s actions prejudiced his case.
grandfather, he lacked standing under Family
Code section 153.432 to bring a suit for                      2. In re Tex. Dept. of Family and Protective
grandparent access. The Court also held that                  Servs., 210 S.W.3d 609 (Tex. December 15, 2006)
Connie Johnson failed to overcome section                     [04–1043].
153.433’s presumption that Derzapf was acting in                    In this termination-of-parental-rights case,
his children’s best interest by proving by a                  the Court determined whether mandamus relief
preponderance of the evidence that denying the                was proper for a trial court’s failure to dismiss a
grandchildren access to Connie in particular                  suit brought by the Texas Department of Family
would significantly impair the children’s physical            and Protective Services when a final order had not
health or emotional well being. The Court has                 been rendered before a statutory deadline for entry
previously granted mandamus relief to require a               expired. Subsection 263.401(a) of the Texas
trial court to vacate its temporary orders granting           Family Code requires a trial court to dismiss a suit
grandparent access. In re Mays-Hooper, 189                    affecting the parent-child relationship filed by the
S.W.3d 777, 778 (Tex. 2006). Accordingly, the                 Department if a final order has not been rendered
Court conditionally granted mandamus relief and               by the first Monday after the one-year anniversary
directed the trial court to vacate its amended                (plus a 180-day extension, if applicable) of the
temporary orders.                                             date when the trial court appointed the
                                                              Department temporary managing conservator. If
                                                              the trial court has not rendered a final order at the



                                                         27
Supreme Court Update
November 1, 2006 – October 31, 2007

expiration of the time period, the court must                  a regional transportation authority authorized
dismiss the suit.                                              under the Texas Transportation Code. DART
      The statutory deadline in this case was July             receives federal assistance pursuant to section 13
24, 2004. On July 19 trial began. Three days later,            of the Urban Mass Transportation Act. Section
before the state rested, the mother and                        13(c) conditions this assistance on DART
grandmother, who had intervened to request                     providing fair and equitable arrangements to
conservatorship of the children, moved to dismiss              protect the interests of employees affected by the
for failure to render a final order before the                 assistance. Pursuant to procedures approved by
statutory deadline. The trial court did not rule on            the Secretary of Labor under section 13(c), ATU
the motions until after the return of the unanimous            1338 and DART entered into a general grievance
jury verdict terminating the mother’s parental                 resolution agreement to address disputed salaries
rights and appointing the Department sole                      and wages. ATU 1338 alleged that DART
managing conservator. After reading the verdict,               breached the resolution agreement by failing to
the trial court denied the motions to dismiss. Both            implement the pay increase and by taking other
the mother and grandmother petitioned the court                unilateral actions inconsistent with the resolution.
of appeals for mandamus relief. The court of                   DART filed a plea to the jurisdiction based on
appeals granted relief and ordered the trial court to          governmental immunity, which the trial court
dismiss the suit.                                              denied. The court of appeals affirmed, holding
      Justice Wainwright delivered the opinion of              that the federal section 13(c) preempted DART’s
the Court. The Court held that the trial court                 state law governmental immunity. The Supreme
abused its discretion by failing to dismiss the suit           Court granted DART’s petition for review and
because there was no rendition of a final order by             heard argument on November 14, 2007.
the statutory deadline, and the mother’s and
grandmother’s motions to dismiss were timely.                  B. Railroads
However, the court of appeals’ mandamus relief                 1. Mo. Pac. R.R. v. Limmer, 180 S.W.3d 803
was improper because the mother and                            (Tex. App.—Houston [14th Dist.] 2005), pet.
grandmother had an adequate remedy by                          granted, 50 Tex. Sup. Ct. J. 801 (June 4, 2007)
accelerated appeal. The Court conditionally                    [06-0023].
granted relief and directed the court of appeals to                  This case involves issues of federal
vacate its order to the trial court directing the trial        preemption with regard to railroad crossings, legal
court to dismiss the case.                                     sufficiency standards of review, and procedural
      Justice O’Neill dissented, arguing that the              rules for preserving error with regard to a jury
court of appeals correctly granted mandamus relief             question combining multiple claims.
because the trial court lacked authority to do                       Billy Limmer was killed at a railroad
anything but dismiss the Department’s action                   crossing owned by Missouri Pacific. Limmer’s
under the statute.          Given the potentially              heirs brought suit. The trial court rejected the
irremediable effect of terminating parental rights             railroad’s argument that federal law preempted
in this case, she would deny the petition for writ of          state negligence law because federal funds were
mandamus and leave the court of appeals’ order in              used to install and upgrade warning signs at the
place.                                                         crossing. At trial, there was evidence that the
                                                               crossing was obscured by vegetation and a pile of
XVI. FEDERAL PREEMPTION                                        limestone. The jury found that the crossing was
A. Labor                                                       extra-hazardous, that the railroad’s failure to
1. Dallas Area Rapid Transit v. Amalgamated                    provide additional warnings was a proximate
Transit Union Local No. 1338, 173 S.W.3d 896                   cause of the accident, that the railroad’s failure to
(Tex. App.—Dallas 2005), pet. granted, 50 Tex.                 eliminate the sight restrictions was a proximate
Sup. Ct. J. 929 (July 2, 2007) [06-0034].                      cause of the accident, and that 85% of the
     Amalgamated Transit Union Local No. 1338                  negligence that caused the accident was
(ATU 1338) is a union that represents many                     attributable to the railroad. The railroad objected
employees of Dallas Area Rapid Transit (DART),                 to the question on sight restrictions, arguing that


                                                          28
Supreme Court Update
November 1, 2006 – October 31, 2007

sight obstructions were not an independent                         The Supreme Court held Danziger could
grounds of recovery under Texas law, but did not             bring a wrongful imprisonment claim against the
object to the question regarding apportionment of            State on his own behalf. His settlement with the
responsibility.                                              city did not prevent him from seeking recovery
      The court of appeals held that federal law             from the State; sovereign immunity was no
would preempt the Limmers’ claims if federal                 defense. However, the Court held that the same
money were spent on the crossing, but that there             claim could not be brought as an assignee. The
was insufficient evidence of such expenditure.               Court recognized that wrongfully imprisoned
The court remanded the case because the                      persons trying to resume their lives after years of
submission of a separate question on sight                   injustice may want to assign their claims.
obstructions was error and could not be considered           Ultimately, however, the Court held that the cause
harmless since the court was not reasonably                  of action is a creation of the legislature and the
certain that the jury was not influenced by the              legislature did not make such claims assignable.
question. The court held that it was not necessary
for the railroad to object to the apportionment              B. Contract Claims
question in order to preserve error on the                   1. State v. Holland, 221 S.W.3d 639 (Tex. April
submission of the sight restrictions question.               20, 2007) [05-0292].
      The Supreme Court granted both parties’                      From 1996 to 1998, the Texas General Land
petitions for review and heard argument on                   Office contracted with two of Herbert Holland’s
November 13, 2007.                                           companies to assist in the design and construction
                                                             of three coastal water filtration systems using
XVII. GOVERNMENTAL IMMUNITY                                  Holland’s oil removal process.             Holland
A. Assignability of Claims                                   performed much of the work personally. Holland
1. State v. Oakley, 227 S.W.3d 58 (Tex. June 8,              applied for a patent on this process in 1998, which
2007) [06-0050, 06-0172].                                    was issued in 2000. After the facilities were
      Christopher Ochoa and Richard Danziger                 completed, Holland worked with officials at the
were indicted for murder in Travis County in                 General Land Office to present these projects at a
1989. Ochoa agreed to plead guilty and testify               conference in 1999.
against Danziger if the State promised not to seek                 In 2002, Holland began sending letters to the
the death penalty. The jury convicted Danziger at            State claiming that the State had infringed on his
trial, and the trial court sentenced him to life in          patent and seeking compensation. The State
prison. Seven years after the 1989 indictment, a             referred Holland to its administrative contract
third person confessed to the murder. DNA                    dispute process, which Holland did not pursue.
evidence exonerated both Ochoa and Danziger.                 Holland brought this inverse condemnation claim
Twelve years after the 1989 indictment, both men             under Article I, section 17 of the Texas
were released. During his prison stay, Danziger              Constitution. The State filed a plea to the
had been assaulted in prison by another inmate               jurisdiction and a general denial. The State
and suffered a severe brain injury.                          argued that this was an artfully pleaded contract
      Ochoa and Danziger, acting through                     claim, barred by sovereign immunity. The State
Danziger’s representative, won judgments against             further argued that there was no allegation of an
the City of Austin for wrongful imprisonment.                intentional act as required in a takings claim and
Danziger then sued Ochoa for falsely testifying              that patent infringement is not the taking of
against him. To settle the claim, Ochoa assigned             property. The trial court denied this plea, and the
his false imprisonment claim against the State to            court of appeals affirmed the denial.
Danziger. Danziger then sued the State for                         The Supreme Court reversed. The Court
wrongful imprisonment as allowed under statute,              held that Holland could not state a takings claim
individually and as an assignee. The trial court             for the State’s alleged unlawful use of his patent
rejected the State’s plea to the jurisdiction and the        because the State was using the systems pursuant
Third Court of Appeals affirmed. The State                   to colorable contract rights so his claim actually
appealed.                                                    sounded in contract. Consequently, the State was


                                                        29
Supreme Court Update
November 1, 2006 – October 31, 2007

immune from suit, and the Court dismissed the                 determined that the individual board members did
case for want of jurisdiction.                                not have official immunity.
                                                                    The Supreme Court granted the city’s, the
C. Declaratory Judgments                                      fund’s, its board’s, and its board members’
1. City of El Paso v. Heinrich, 198 S.W.3d 400                petitions for review and heard argument on
(Tex. App.—El Paso 2006), pet. granted, 50 Tex.               November 13, 2007.
Sup. Ct. J. 910 (June 25, 2007) [06-0778].
      The principle issues presented in this case are         2. City of Houston v. Williams, 216 S.W.3d 827
whether governmental immunity from suit is                    (Tex. February 23, 2007) [06-0159].
waived in a claim for declaratory and injunctive                    The issue in this case was whether retired
relief requiring the payment of money, or in a                City of Houston firefighters could recover
claim alleging unauthorized acts under a statute,             amounts deducted from their termination pay
without court consideration of evidence                       despite the City’s assertion of governmental
concerning the alleged acts in light of the                   immunity. The Court held they could not unless
controlling law.                                              they could show their claims fell within the
      Lillie Heinrich began receiving one hundred             waiver provisions of sections 271.151-.160 of the
percent of her deceased husband’s final pension               Local Government Code.
amount shortly after his death, which was caused                    Retired City of Houston firefighters alleged
by an injury he received while on duty as an El               the City improperly deducted vacation and sick
Paso policeman. Seventeen years later, the                    leave pay from their lump-sum termination
pension fund administrator informed her that                  payouts. The firefighters sued the City to recover
thereafter she would receive only two-thirds of the           this pay, but the City filed a plea asserting
amount since her son was no longer a “qualified               governmental immunity. The court of appeals
child” under the controlling fund bylaws.                     rejected the City’s jurisdictional plea on two
      Heinrich sued the city, the pension fund, and           grounds. First, the court held that the “sue and be
its board, as well as the board members, whom she             sued” language in the City’s charter and “plead
“named as defendants individually.” She claimed               and be impleaded” language in section 51.075 of
the board had originally awarded her one hundred              the Local Government Code waived the City’s
percent of her husband’s final pension amount due             immunity from suit. Second, the court held the
to his service record, in accordance with the                 City had no immunity from the firefighters’
bylaws and the statute enabling the pension fund.             request for declaratory relief.
Among other things, she argued that the board had                   The Supreme Court reversed. The Court
violated the statute by reducing that percentage              held, consistent with its recent decision in Tooke
without getting approval from a majority of the               v. City of Mexia, 197 S.W.3d 325 (Tex. 2006),
fund’s voting members.               After several            that neither the “sue and be sued” nor the “plead
amendments to her petition, she claimed not to                and be impleaded” language waived the City’s
seek damages but declaratory and injunctive relief            immunity from suit. The Court also held that the
to “restore the status quo” from the date of the              firefighters could not rely on their declaratory
illegal act and to keep defendants from continuing            judgment action to circumvent the City’s
to act illegally.                                             immunity from suit because their only conceivable
      By pleas to jurisdiction the city, the fund, and        remedy was money damages.                The Court
its board asserted governmental immunity.                     ultimately remanded the case to the trial court to
Likewise, by pleas to jurisdiction the individual             allow the firefighters to argue that their claims fall
board members asserted derivative governmental                within the waiver provisions of sections
immunity and official immunity. The trial court               271.151–.160 of the Local Government Code
denied the pleas without specifying its grounds.              which were enacted during the pendency of the
The court of appeals affirmed, determining that               case.
Heinrich’s declaratory and injunctive claim was
not a disguised claim for money damages barred
by governmental immunity. The court also


                                                         30
Supreme Court Update
November 1, 2006 – October 31, 2007

D. Derivative Immunity                                      E. Police Pursuits
1. Ben Bolt-Palito Blanco Consol. ISD v. Tex.               1. City of San Antonio v. Ytuarte, 229 S.W.3d
Political Subdivisions Prop./Cas. Joint Self-Ins.           318 (Tex. May 4, 2007) [05-0991].
Fund, 212 S.W.3d 320 (Tex. December 29, 2006)                     In this interlocutory appeal from an order
[05-0340].                                                  denying the City of San Antonio’s motion for
      The issues in this insurance policy-coverage          summary judgment, the Court considered whether
dispute are (1) whether a self-insurance pool               the court of appeals sufficiently analyzed the good
authorized by the Texas Legislature possesses               faith element of immunity in a police pursuit case.
governmental immunity, (2) whether that pool can            The police pursuit began when San Antonio
assert its immunity against one of its members in           police spotted a suspect in a stolen SUV shortly
a suit to determine coverage, and (3) whether its           after an aggravated robbery and car jacking were
immunity has been waived, either expressly or               reported at a convenience store. As the pursuit
impliedly, by the Texas Legislature or by the               was terminating, the suspect lost control of the
conduct of the self-insurance fund.                         SUV and crashed into a parked car, injuring a
      Texas       Political       Subdivisions              bystander, Dolores Ytuarte. Ytuarte filed suit,
Property/Casualty Joint Self-Insurance Fund                 and the City responded by asserting immunity and
(TPS), a self-insurance pool made up of various             moving for summary judgment. The trial court
counties, municipalities, special districts, and            denied the City’s motion and the court of appeals
other political subdivisions, denied a claim for            affirmed, concluding that the City had not
water damage submitted by Ben Bolt-Palito                   established the officers’ good faith as a matter of
Blanco ISD, a member school district. TPS                   law.
denied the claim on the basis that the alleged loss               The Supreme Court, in a per curiam opinion,
was not covered under the insurance contract. In            reversed the court of appeals’ judgment. The
Ben Bolt’s suit for a declaratory judgment seeking          Court recognized the well established rule in
a determination that the loss was a covered                 police pursuit cases that “an officer acts in good
occurrence, the trial court denied TPS’s plea to the        faith if a reasonably prudent officer under the
jurisdiction and motion to dismiss, in which it             same or similar circumstance could have believed
claimed immunity from suit. The court of appeals            that the need to immediately apprehend the
reversed and rendered judgment dismissing Ben               suspect outweighed a clear risk of harm to the
Bolt’s claims for lack of subject matter                    public in continuing (rather than terminating) the
jurisdiction. The court of appeals held that TPS            pursuit.” Wadewitz v. Montgomery, 951 S.W.2d
possessed immunity because it was a government              464, 466 (Tex. 1997). The Court further noted
entity, and Ben Bolt failed to show a clear and             that under the good faith standard, the officers
unambiguous waiver of TPS’s immunity from suit.             must weigh the need to immediately apprehend
      The Supreme Court reversed and remanded               the suspect against the risk of continuing the
the case to the trial court. The Court held that            pursuit from the perspective of a reasonably
TPS possessed governmental immunity discrete                prudent officer. Lancaster v. Chambers, 883
from that of its members, as evidenced by chapter           S.W.2d 650, 653 (Tex. 1994). The Court held that
2259 of the Government Code and the Interlocal              the court of appeals failed to apply the Chambers
Cooperation Act, chapter 791 of the Code. The               and Wadewitz analysis when evaluating the
Court further held, however, that section 271.152           summary judgment proof of good faith, and
of the Local Government Code, a statute enacted             summary judgment evidence clearly indicated that
after the court of appeals issued its decision              the officers met the good faith standard. Thus,
provided a clear and unambiguous waiver of                  without hearing oral argument, the Court reversed
TPS’s immunity. Justice Willett, joined by Justice          the court of appeals’ judgment and rendered
Hecht, dissented. Justice Willett agreed that TPS           judgment dismissing the case.
had immunity but disagreed that section 271.152
clearly waived its immunity.




                                                       31
Supreme Court Update
November 1, 2006 – October 31, 2007

F. Recreational Use Statute                                G. Suits by the State
1. Stephen F. Austin State Univ. v. Flynn,                 1. City of Galveston v. State, 217 S.W.3d 466
228 S.W.3d 653 (Tex. June 29, 2007) [04-0515].             (Tex. March 2, 2007) [04-0890].
      This case concerns application of the Tort                 The issue in this case was whether a city may
Claims Act and the Recreational Use Statute. See           assert governmental immunity from suit or
TEX . CIV . PRAC . & REM . CODE §§ 101.021,                liability in a tort action where the plaintiff is the
101.056 and §§ 75.001-.004. The Tort Claims Act            State on behalf of a state agency. In 2001, a water
provides a limited waiver of the State’s immunity          line owned by the city of Galveston ruptured near
from suit for certain tort claims, including claims        a highway, allegedly washing out the roadbed and
of injury or death from premises defects, and the          displacing material supporting the highway. The
Recreational Use Statute adds additional                   State alleged that Galveston breached its duty to
qualifications when the injury or death occurs on          prevent erosion by its negligent installation,
state-owned land being used for recreational               maintenance, and upkeep of the water line. The
purposes.                                                  State sought recovery of its costs, interest, and
      Diane Flynn was riding her bike on a public          attorney’s fees related to the expenses incurred in
easement which crossed the Stephen F. Austin               repairing the highway.
(SFA) campus when she was hit by a stream of                     The Supreme Court dismissed the lawsuit on
water from an oscillating sprinkler. The force of          sovereign immunity grounds, holding that a
the water knocked her off her bike, causing her            governmental unit is immune from tort liability
injury. Flynn sued SFA for damages under the               unless the Legislature waives immunity. The City
Tort Claims Act, alleging that her injuries were           had immunity from suit and liability because
proximately caused by SFA’s negligent use of real          operating the water line was a governmental
property, negligent operation of the premises,             function and the State’s claim did not fall within
negligent activity, and gross negligence.                  the Texas Tort Claim Act’s limited waiver of
      The trial court denied SFA’s plea to the             immunity. A city’s immunity exists against all
jurisdiction and motion to dismiss, and the court          suits, including those by the State, unless waived
of appeals affirmed, concluding that neither the           by the Texas Constitution or by statute.
discretionary powers exception to the Texas Tort                 The dissent argued that a municipality, even
Claims Act nor the Recreational Use Statute                a home-rule city such as Galveston, does not
applied to Flynn’s claim. The Supreme Court                enjoy governmental immunity from the State’s
agreed that the discretionary powers exception did         suit for negligence against it. The dissent
not apply, but disagreed with the court of appeals’        reasoned that any immunity a city enjoys is
treatment of the Recreational Use Statute.                 derived from the State’s own immunity and
Holding that a landowner who dedicates a public            logically cannot be asserted back against the State.
easement for recreational purposes is entitled to
the protection of the Recreational Use Statute, the        H. Texas Tort Claims Act
Court reversed the court of appeals’ judgment and          1. City of Dallas v. Thompson, 210 S.W.3d 601
dismissed the case.                                        (Tex. December 1, 2006) [05-0787].
      Justice Hecht filed a concurring opinion,                 Margaret Thompson sued the City of Dallas
asserting that because immunity was not waived             under the Texas Tort Claims Act for injuries she
under the Recreational Use Statute, the Court did          suffered after tripping on a metal coverplate
not need to consider whether the discretionary             protruding from the floor in the lobby of Dallas
powers exception applied. He further urged that            Love Field airport. The City is immune from the
the analysis of the discretionary powers exception         suit unless there is evidence it had actual
should follow the federal courts’ interpretation of        knowledge of an unreasonably dangerous
a similar exception under the Federal Tort Claims          condition. The trial court held there was no such
Act.                                                       evidence and sustained the City’s plea to the
                                                           jurisdiction, but the court of appeals reversed.
                                                           The Supreme Court, without hearing oral



                                                      32
Supreme Court Update
November 1, 2006 – October 31, 2007

argument, reversed the court of appeals’ judgment.                The issue before the Supreme Court is
      The Court held that the fact that the                 whether and to what extent section 101.106
coverplate could become loose and protrude over             applies to these cases. The Court granted the
time did not make the coverplate itself                     petitions for review and heard oral argument on
unreasonably dangerous, and the city’s knowledge            February 15, 2007.
of this periodic deterioration was not relevant,
only its knowledge of the condition at the time             I. Waiver
Thompson tripped. Reports of tripping in that               1. Abilene Housing Auth. v. Gene Duke Builders,
same spot that were at least three years old were           Inc., 226 S.W.3d 415 (Tex. June 1, 2007)
too remote to show actual knowledge at the time             [05-0631].
of the accident. Nor was evidence of the                          The Housing Authority contracted with Gene
proximity of city employees sufficient to show              Duke Builders, Inc. for repair of its housing units.
knowledge absent evidence showing how long the              After a dispute arose, the builder sought to compel
condition, which could have occurred either                 arbitration under the contract. The Authority filed
suddenly or over time, had existed. Finally, the            a plea to the jurisdiction, claiming that it was a
fact that the City later added an additional screw          “unit of state government” for purposes of the
to the coverplate was not sufficient to show the            exclusive contract claim procedures provided by
City knew at the time of the accident that the              Chapter 2260 of the Texas Government Code.
coverplate was unreasonably dangerous.                      The trial court granted the Authority’s plea to the
                                                            jurisdiction. The court of appeals disagreed and
2. Mission Consol. Indep. Sch. Dist. v. Garcia,             held that the “sue and be sued” clause in Texas
166 S.W.3d 902 (Tex. App.—Corpus Christi                    Local Government Code section 392.065 waived
2005), pet. granted, 50 Tex. Sup. Ct. J. 151                immunity from suit. The Supreme Court reversed
(December 4, 2006) [05-0734], consolidated for              the court of appeals’ judgment in light of Tooke v.
oral argument with Mission Consol. Indep. Sch.              City of Mexia, 197 S.W.3d 325, 344 (Tex. 2006),
Dist. v. Sotuyo, 166 S.W.3d 902 (Tex.                       which held that a “sue and be sued” clause does
App.—Corpus Christi 2005), pet. granted, 50 Tex.            not waive immunity. The Court also rejected the
Sup. Ct. J. 151 (December 4, 2006) [05-0762],               Housing Authority’s claim that it was a “unit of
consolidated for oral argument with Mission                 state government” for purposes Chapter 2260.
Consol. Indep. Sch. Dist. v. Medina, 166 S.W.3d             The Court remanded the case to the trial court to
902 (Tex. App.—Corpus Christi 2005), pet.                   allow the parties to address the applicability of the
granted, 50 Tex. Sup. Ct. J. 151 (December 4,               limited, retroactive waiver of immunity from suit
2006) [05-0763].                                            for certain contract claims which was enacted in
      These three related petitions arise out of the        Texas Local Government Code sections
alleged wrongful termination of three teachers              271.151-.160 while this case was pending.
from MCISD. The teachers filed separate suits
against MCISD and H.F. Dyer, the                            2. City of Arlington v. Matthews, 226 S.W.3d
Superindendent, alleging wrongful termination               417 (Tex. June 1, 2007) [06-0251].
under the Texas Labor Code, defamation,                           Charles Mathews sued the City of Arlington
intentional infliction of emotional distress, and           for breach of an employment agreement. The trial
fraud. MCISD filed a plea to the jurisdiction in            court denied the City’s plea to the jurisdiction and
each suit based on the Texas Tort Claims Act,               the court of appeals affirmed, holding that section
specifically section 101.106 of the Texas Civil             51.075 of the Texas Local Government Code
Practices and Remedies Code. Section 101.106                which allows a city to “plead and be impleaded”
bars certain claims against some potential                  waived the City’s immunity from suit. The
defendants in cases involving governmental                  Supreme Court reversed in light of Tooke v. City
entities and their employees. The trial court               of Mexia, 197 S.W.3d 325 (Tex. 2006), and, citing
denied MCISD’s plea to the jurisdiction and the             City of Houston v. Jones, 197 S.W.3d 391, 392
court of appeals consolidated the three cases and           (Tex. 2006), remanded to the trial court for
affirmed the trial court’s order.                           further proceedings under the limited retroactive


                                                       33
Supreme Court Update
November 1, 2006 – October 31, 2007

waiver of immunity for contract claims enacted in            left the force after positive drug tests. The three
sections 271.151-.160 of the Local Government                officers then sued the City, alleging that it had
Code while this litigation was pending.                      improperly disclosed medical information under
                                                             the Medical Practice Act, improperly disclosed
3. City of Dallas v. Saucedo-Falls, 218 S.W.3d 79            information not subject to the Open Records Act,
(Tex. March 9, 2007) [05-0973].                              and engaged in “deprivations of privacy and
       In this opinion, the Supreme Court reversed           confidential rights, privileges and immunities
the judgment of the court of appeals affirming the           secured by the laws and Constitution of Texas
trial court’s denial of the City of Dallas’ plea to          under Article I, Section 8 and 19.” The former
the jurisdiction because the court of appeals relied         officers generally alleged entitlement to monetary
on the Court’s first opinion in Reata Construction           damages. They also sought equitable and
Corp. v. City of Dallas, which the Court withdrew.           injunctive relief for the alleged constitutional
See Reata Constr. Corp. v. City of Dallas, 197               violations.      The City filed a plea to the
S.W.3d 371 (Tex. 2006).                                      jurisdiction, which the trial court denied. The City
       Several police officers and firefighters sued         then filed an interlocutory appeal of the denial of
the City of Dallas alleging they were entitled               its plea.
to a pay raise. The City counterclaimed for                        The court of appeals affirmed in part and
declaratory relief on the effect of a City resolution        reversed in part. It affirmed the trial court’s
and filed a plea to the jurisdiction based on                denial of the plea as to the statutory claims,
governmental immunity from suit. Plaintiffs                  holding that a “sue and be sued” provision in the
argued the City waived this immunity by entering             City’s charter waived the City’s immunity from
into employment contracts, by accepting and                  suit. The court reversed and remanded the trial
retaining the benefit of plaintiffs’ labor                   court’s denial of the plea as to the constitutional
thereunder, and by asserting its counterclaim. The           claims, holding that to the extent the plaintiffs’
trial court denied the plea, and the court of appeals        pleadings sought monetary damages, such claims
affirmed on interlocutory appeal.                            were invalid but that equitable relief could be
       The Supreme Court noted it was not reaching           sought. The court held that the that the plaintiffs’
the issue of whether a counterclaim for declaratory          request for injunctive relief failed to affirmatively
relief and attorney’s fees waives immunity from              demonstrate the trial court’s jurisdiction over their
suit for claims for money damages not otherwise              claim for prospective injunctive relief because the
allowed under the Texas Declaratory Judgment                 plaintiffs pleaded only “mere fear or apprehension
Act. The Court also noted that on remand the                 of possible injury” in the future. It remanded the
plaintiffs should have the opportunity to argue any          case to the trial court to allow the plaintiffs to
grounds for waiver remaining under its decisions,            amend their petition and state a less speculative
including whether the City’s immunity from suit              claim for equitable relief.
is waived by sections 271.151-.160 of the Texas                    The Supreme Court reversed the court of
Local Government Code, enacted while the case                appeals’ judgment in part and affirmed it in part.
was pending on appeal.                                       The Court held that the City of Elsa possessed
                                                             sovereign immunity from suits for monetary
4. City of Elsa v. M.A.L., 226 S.W.3d 390 (Tex.              damages and reversed the court of appeals’
June 1, 2007) [06-0516].                                     judgment in light of Tooke v. City of Mexia, 197
     In this case, the Supreme Court reaffirmed              S.W.3d 325, 344 (Tex. 2006), which held that a
that (1) “sue and be sued” provisions in city                “sue and be sued” provision in a city charter does
charters do not waive immunity from suit for                 not, by itself, constitute an unambiguous waiver of
monetary damages, and (2) governmental entities              governmental immunity. The Court affirmed the
may be sued for injunctive relief under the Texas            part of the court of appeals’ holding that refused
Constitution.                                                to dismiss the plaintiffs’ claims for injunctive
     This case arose after three police officers             relief based on alleged constitutional violations,
resigned from the City of Elsa’s police force. A             concluding that such suits could be brought
local news station reported that the police officers         against governmental entities.


                                                        34
Supreme Court Update
November 1, 2006 – October 31, 2007

5. City of Pasadena v. Kinsel Indus., Inc.,                by sections 271.151-.160 of the Texas Local
227 S.W.3d 651 (Tex. June 1, 2007) [06-0353].              Government Code or other statutory provisions.
      After a contractor building a wastewater
plant for the City was sued by a subcontractor, it         7. City of Texarkana v. City of New Boston,
brought third party claims against the City. The           228 S.W.3d 648 (Tex. June 1, 2007) [04-0797].
trial court denied the City’s plea to the                         The City of New Boston and six other cities
jurisdiction. The court of appeals held that the           sued the City of Texarkana on tort and contract
city’s immunity from suit was waived by Local              claims arising out of a series of water-supply
Government Code section 51.075 which                       agreements. The trial court refused to dismiss
empowered to City to “plead and be impleaded”              based on governmental immunity and, in an
and the city charter which empowered the City to           interlocutory appeal, the court of appeals reversed
“sue and be sued.” The Supreme Court reversed              as to the tort claims but affirmed as to the contract
the court of appeals judgment in light of Tooke v.         claims. In this per curiam opinion, the Supreme
City of Mexia, 197 S.W.3d 325 (Tex. 2006). The             Court denied the petitions but disapproved the
Supreme Court also remanded in light of the                court of appeals’ holding, citing Tooke v. City of
limited retroactive waiver of immunity for                 Mexia, 197 S.W.3d 325 (Tex. 2006). The Court
contract claims enacted in Local Government                also pointed out that the plaintiffs should be
Code sections 271.151-.160 while the litigation            permitted to pursue their contract claims in the
was pending.                                               trial court under the retroactive, limited waiver for
                                                           contract claims in Local Government Code
6. City of Sweetwater v. Waddell, 218 S.W.3d 80            sections 271.151-.160, which was adopted while
(Tex. March 9, 2007) [05-1033].                            the case was pending on appeal.
      In this opinion, the Supreme Court reversed
the judgment of the court of appeals, which                8. Dallas Fire Fighters Ass’n v. City of Dallas,
reversed the trial court’s granting of the City of         231 S.W.3d 388 (Tex. June 1, 2007) [04-0821].
Sweetwater’s plea to the jurisdiction, because the               The Dallas Fire Fighters Association sued
court of appeals’ decision was inconsistent with           the City of Dallas for breach of contract. The trial
the Court’s opinion in Tooke v. City of Mexia, 197         court dismissed the action on the City’s plea to the
S.W.3d 325 (Tex. 2006). The Court remanded the             jurisdiction and the court of appeals affirmed.
case to the trial court for further proceedings.           Citing Tooke v. City of Mexia, 197 S.W.3d 325,
      Several firefighters and the Sweetwater              342 (Tex. 2006), the Supreme Court rejected the
Professional Fire Fighters Association sued the            Association’s claim that the City’s immunity was
City for failure to promote firefighter Waddell to         waived by language in the City’s charter that the
fire marshal and to pay each firefighter the same          City may “sue and be sued.” The Supreme Court
base salary as required by the Texas Local                 nonetheless reversed and remanded the case to the
Government Code. Plaintiffs sought a declaration,          trial court, to allow the parties to address the
injunctive order, and attorney’s fees and costs            effect of the limited, retroactive waiver in Local
under the Texas Declaratory Judgment Act, as               Government Code sections 271.151-.160 which
well as monetary damages. The City filed a plea            was enacted while the case was pending on
to the jurisdiction asserting governmental                 appeal.
immunity from suit and that certain plaintiffs
lacked standing. The trial court granted the plea          9. Fort Worth Indep. Sch. Dist. v. Serv.
and dismissed the case with prejudice, but the             Employment Redev., S.W.3d , 50 Tex. Sup. J.
court of appeals reversed and remanded on the              1053 (Tex. August 24, 2007) [05-0427].
basis that a “sue and be sued” clause in the City’s             This case involves the “sue and be sued”
charter waived immunity and that the plaintiffs all        clause applicable to school districts and the
had standing.                                              Legislature’s retroactive, limited waiver of
      The Supreme Court noted that on remand the           immunity from suit for claims for breach of
trial court could consider, among other things,            certain contracts. Also at issue in this case was
whether the City’s immunity from suit is waived            whether a vendor suing a school district on a


                                                      35
Supreme Court Update
November 1, 2006 – October 31, 2007

contract had to exhaust administrative remedies               trial court denied. The court of appeals affirmed,
and lacked standing to sue.                                   and the District appealed. The Supreme Court
      A vendor sued the Fort Worth Independent                reversed and remanded the case to the court of
School District for breach of a contract to provide           appeals. On the basis of its rulings in Tooke v.
alternative education program services. The trial             City of Mexia, 197 S.W.3d 325 (Tex. 2006) and
court dismissed the case for want of jurisdiction,            Satterfield & Pontikes Construction, Inc. v. Irving
but a divided court of appeals reversed, holding              Independent School District, 197 S.W.3d 390
that the “sue and be sued” language in Texas                  (Tex. 2006), issued after the court of appeals’
Education Code section 11.151(a) waived the                   opinion in this case, the Court held that the “sue
district’s governmental immunity from suit.                   and be sued” language in section 11.151(a) of the
      The Supreme Court reversed and remanded                 Texas Education Code was not a valid waiver of
the case to the trial court. Citing the analysis set          governmental immunity from suit.
out in in Tooke v. City of Mexia, 197 S.W.3d 325,
342 (Tex. 2006), and applied in Satterfield &                 11. State v. Fid. & Deposit Co. of Maryland, 223
Pontikes Constr., Inc. v. Irving Indep. Sch. Dist.,           S.W.3d 309 (Tex. May 4, 2007) [04-0180].
197 S.W.3d 390, 391 (Tex. 2006), the Court                           When a contractor defaulted on a project to
concluded that section 11.151(a)’s sue-and-be-                construct a research and technology center for the
sued language was insufficiently clear and                    Texas Department of Transportation (TxDOT), its
unambiguous to waive immunity from suit. The                  sureties (collectively “Fidelity”) stepped in to
Court also held that the parties should have the              complete the project. TxDOT filed suit against
opportunity to address the applicability of the               Fidelity for various cost overruns, and Fidelity
Legislature’s retroactive, but limited, waiver of             counterclaimed.       Fidelity also initiated the
immunity from suit for claims for breach of                   administrative process with TxDOT but
certain contracts with local governmental entities            abandoned that process. The trial court denied
enacted while the appeal was pending. See TEX .               TxDOT’s plea to the jurisdiction. The Third
LOCAL GOV ’T CODE §§ 271.151-160.                             Court of Appeals affirmed, holding that (1)
      The Court also concluded that a vendor’s                TxDOT waived immunity against Fidelity’s
claim for breach of a contract to provide services            counterclaims by filing suit, and (2) the dispute-
was not a complaint of a violation of Texas school            resolution process in the Texas Transportation
laws, and rejected the District’s argument that the           Code applied only to contracts for construction of
vendor was required to first seek relief from the             bridges and roads, not buildings.
Commissioner of Education. The Court rejected                        In a per curiam opinion, the Supreme Court
claims that the vendor’s claims were really for a             vacated the court of appeals’ judgment and
violation of Education Code § 37.008(g), which                remanded the case to the trial court. As to the
the vendor had no standing to assert, rather than             first issue, the Court held that its opinion in Reata
for breach of the vendor’s contract with the                  Construction Corp. v. City of Dallas, 197 S.W.3d
District.                                                     371 (Tex. 2006), which was issued subsequent to
                                                              the court of appeals’ decision, controlled. TxDOT
10.     Lamesa Indep. Sch. Dist. v. Booe,                     had waived immunity for Fidelity’s claims, but
    S.W.3d         , 51 Tex. Sup. Ct. J. 24 (Tex.             only those that were germane to, connected with,
September 28, 2007) [05-0959].                                and properly defensive to TxDOT’s claims, and
     At issue in this case is whether the “sue and            only in the amount of an offset. As to the second
be sued” clause applicable to school districts                issue, the Court held that the administrative
waives governmental immunity from suit. David                 process authorized in the Texas Transportation
Booe sued Lamesa Independent School District                  Code did not apply to the contract at issue.
under implied contract and quantum meruit
theories over nonpayment for repairs Booe made                12. State v. Precision Solar Controls, Inc., 220
to several roofs owned by the District. The                   S.W.3d 494 (Tex. April 5, 2007) [06-0348].
District filed a plea to the jurisdiction on the basis             The State sued Precision, alleging that traffic
of governmental immunity from suit, which the                 signal displays made by Precision were defective;


                                                         36
Supreme Court Update
November 1, 2006 – October 31, 2007

Precision counterclaimed for damages for business            XVIII. INSURANCE
disparagement. The trial court, on the State’s               A. Class Action
claim of sovereign immunity, refused to dismiss              1. Farmers Group, Inc. v. Lubin, 222 S.W.3d 417
the counterclaims, and the court of appeals                  (Tex. April 27, 2007) [05-0169].
affirmed. On the State’s motion for rehearing of                   The issue in this case is whether section
its petition for review, the Supreme Court                   541.251(a) of the Texas Insurance Code
withdrew its prior denial of the State’s petition,           authorizes the Attorney General to bring a parens
vacated the court of appeals’ judgment, and                  patriae class action law suit on behalf of Texas
remanded the case to the trial court for further             citizens.
proceedings in light of the Court’s          new,                  Initially, the State commenced an
substituted opinion in Reata Construction Corp. v.           investigation of Farmers’ insurance practices. The
City of Dallas, 197 S.W.3d 371 (Tex. 2006).                  Attorney General then sued Farmers alleging
                                                             deceptive, misleading, and discriminatory
13. Tomball Hosp. Auth. v. Harris County Hosp.               homeowners insurance practices in violation of
Dist., 178 S.W.3d 244 (Tex.App.—Houston [14th                the Texas Insurance Code and the Deceptive
Dist.] 2005), pet. granted, 50 Tex. Sup. Ct. J. 1014         Trade Practices Act. Also, the Commissioner of
(August 24, 2007) [05-0986].                                 Insurance began an administrative proceeding
      Harris County Hospital District allegedly              against Farmers and issued an emergency cease
diverted certain District residents eligible for free        and desist order, ordering Farmers to change its
health care from the District to Tomball Hospital            rating practices within three months. Originally,
Authority for treatment. The Authority requested             the suit was not brought as a class action but “in
reimbursement from the District under the                    the name of the State of Texas and on behalf of
provisions of the Indigent Health Care and                   the Texas Commissioner of Insurance.”
Treatment Act.        After the District refused             Eventually, the State, the Attorney General, the
reimbursement, the Authority sued the District for           Texas Department Insurance, and Commissioner
violations of the Act and the Texas Constitution.            of Insurance settled with Farmers for $117
The District filed a plea to the jurisdiction arguing        million. Under the settlement agreement, the
that its governmental immunity barred suit. The              Attorney General amended his pleadings to
trial court granted the plea and dismissed the suit.         transform the suit into a class action settlement
The court of appeals reversed and remanded                   including all claims that had been or could be
holding that the “sue and be sued” clause in                 made by individual policyholders in Texas. The
section 281.056 of the Health and Safety Code                Attorney General did not designate representative
waived immunity from suit, and that neither the              class members, however, and asserted he had
county court nor the Health Department had                   statutory authority to bring class actions under the
exclusive jurisdiction over the Authority’s claims.          Insurance Code. When they learned of the terms
The question before the Supreme Court is                     of the settlement agreement, some policyholders
whether, under Tooke v. City of Mexia, 197                   filed separate pleas of intervention to object to the
S.W.3d 325, 332 (Tex. 2006), section 281.056 and             settlement and contest class certification.
other provisions of the Health and Safety Code                     The trial court certified the class without a
authorize and clearly and unambiguously waive                class representative. When the intervening
governmental immunity for claims for                         policyholders appealed, the court of appeals
reimbursement under the Indigent Health Care                 reversed and remanded, rejecting the State’s
Act. The Court granted the District’s petition for           arguments that the Insurance Code authorized the
review and has set the case for oral argument on             action. The court of appeals held that the
December 4, 2007.                                            Attorney General is required to comply with
                                                             private class action prerequisites including
                                                             typicality and adequacy of representation, and that
                                                             the Attorney General did not meet these
                                                             requirements.



                                                        37
Supreme Court Update
November 1, 2006 – October 31, 2007

     The Supreme Court agreed that a rigorous                 had waived its right to assert, and (4) was
analysis of class certification requirements must             estopped from asserting, that the policy did not
take place. The Court, however, held that those               cover Allied’s claim. Damages were awarded to
requirements cannot be applied in a way that                  Allied in the amount of $308,235 but the trial
renders attorney general class actions impossible,            court rendered a take-nothing judgment as to
a result that would frustrate the Legislature’s               Allied’s claims for attorneys’ fees in the action
intent. As a result, the Court held that the standard         against Ulico. Ulico filed a motion for a j.n.o.v.
class action requirements must be applied                     on liability and damages and Allied moved for a
generally to the claims asserted by the Attorney              judgment on the verdict regarding liability and
General, not the Attorney General himself.                    j.n.o.v. on damages, seeking $616,468.55. The
     Justice Hecht filed an opinion concurring in             trial court granted Ulico’s motion on the findings
part and dissenting in part, arguing that by the              that Ulico had granted an Extended Reporting
plain statutory text, the four traditional class              Period and had agreed to cover Allied’s claim
action requirements do not apply to a class action            separate and the apart from the policy, but entered
brought by the Attorney General.                              judgment on the estoppel and waiver findings.
                                                              The court also granted Allied’s motion on
B. Coverage by Estoppel                                       damages, raising the award to the requested
1. Ulico Cas. Co. v. Allied Pilots Ass’n, 187                 $616,468.55.
S.W.3d 91 (Tex. App.—Fort Worth 2005), pet.                         The court of appeals affirmed the jury’s
granted, 50 Tex. Sup. Ct. J. 532 (March 9, 2007)              waiver and estoppel findings and the trial court’s
[06-0247].                                                    grant of j.n.o.v. on damages, but reversed the take-
      The principal issue in this case is whether the         nothing judgment on attorneys’ fees, finding that
Supreme Court should adopt an exception to the                Allied was entitled to fees in the action against
rule that estoppel cannot be used to create                   Ulico under Texas Rule of Civil Procedure section
coverage under an insurance policy where none                 38.001(8). The court of appeals declined to reach
exists.                                                       the Extended Reporting Period and separate
      In this case, Ulico issued a policy to Allied           contract issues and remanded the case to the trial
which provided coverage for claims made against               court to determine the amount of attorneys’ fees.
Allied prior to the policy’s expiration or during an          Ulico filed a petition for review.
extended reporting period. Allied was sued during                   The Supreme Court granted Ulico’s petition
the reporting period but failed to file a claim with          for review and heard oral argument on April 11,
Ulico until after the policy’s expiration. Despite            2007.
the policy’s expiration, Ulico mistakenly sent two
separate letters stating that defense costs were              C. Duty to Defend
afforded to Allied with respect to the claim filed.           1. Don’s Bldg. Supply, Inc. v. OneBeacon Ins.
Ulico also sent Allied its Litigation Management              Co., certified question accepted, 50 Tex. Sup. Ct.
Guidelines, a defense attorney evaluation form,               J. 1015 (August 24, 2007) [07-0639].
and an attorney time forecast, with a request that                  The certified questions in this case are: (1)
they be signed and returned along with the billing            When not specified by the relevant policy, what is
rate of Allied’s counsel. When Allied’s counsel               the proper rule under Texas law for determining
billed Ulico after securing a summary judgment in             the time at which property damage occurs for
the suit against Allied, Ulico realized the mistake           purposes of an occurrence-based commercial
it had made in granting coverage and refused to               general liability insurance policy? (2) Under the
pay. Allied flied suit against Ulico to recover the           rule identified in the answer to the first question,
costs of the suit filed against it.                           have the pleadings in lawsuits against an insured
      After a trial on the merits, the jury found: (1)        alleged that property damage occurred within the
that Ulico provided Allied with an Extended                   policy period of an occurrence-based commercial
Reporting Period under the policy, (2) that Ulico             general liability insurance policy, such that the
had agreed, separate and apart from the policy, to            insurer’s duty to defend and indemnify the insured
cover Allied’s defense costs, and (3) that Ulico              is triggered, when the pleadings allege that actual


                                                         38
Supreme Court Update
November 1, 2006 – October 31, 2007

damage was continuing and progressing during the            of the Texas Insurance Code, may be applied
policy period, but remained undiscoverable and              when an insurer wrongfully refuses to promptly
not readily apparent for purposes of the discovery          pay a defense benefit owed to the insured.
rule until after the policy period ended because the             In a dissenting opinion, Justice Brister
internal damage was hidden from view by an                  argued that the Fifth Circuit’s second question
undamaged exterior surface?                                 should be answered no because a homebuilder’s
      The Supreme Court accepted the certified              defective work that damages only the home is not
questions from the U.S. Court of Appeals for the            property damage but rather an economic loss that
Fifth Circuit, but the date for oral argument is yet        CGL insurance does not cover. The dissent
to be determined.                                           further claimed that the Court’s interpretation of
                                                            the CGL failed to follow the majority rule.
2. Lamar Homes, Inc. v. Mid-Continent Cas.
Co.,      S.W.3d , 50 Tex. S. Ct. J. 1162 (Tex.             3. Pine Oak Builders, Inc. v. Great Am. Lloyds
August 31, 2007) [05-0832].                                 Ins. Co., 2006 WL 1892669 (Tex. App.—Houston
The U.S Court of Appeals for the Fifth Circuit              [14th Dist] 2006), pet. granted, 50 Tex. Sup. Ct.
certified three questions to the Supreme Court              J. 1073 (August 31, 2007) [06-0867].
concerning whether an insurer under a commercial                  Great American Lloyds Insurance Company
general liability (CGL) policy has a duty to defend         and Mid-Continent Casualty issued separate
its insured, a homebuilder, against a homebuyer’s           commercial general liability (CGL) policies to
claims of defective construction. The Fifth Circuit         Pine Oak Builders for different periods between
asked:                                                      April 5, 1993 and April 5, 2003. Between 2002
      1. When a homebuyer sues his general                  and 2003, five separate homeowners sued Pine
      contractor for construction defects and               Oak for claims related to faulty construction.
      alleges only damage to or loss of use of              After Great American and Mid-Continent refused
      the home itself, do such allegations                  Pine Oak’s demand for defense in the five
      allege an “accident” or “occurrence”                  lawsuits, Pine Oak sued to enforce the CGL
      sufficient to trigger the duty to defend              policies. The insurers filed a motion for summary
      or indemnify under a CGL policy?                      judgment claiming that they did not have a duty to
      2. When a homebuyer sues his general                  defend or indemnify Pine Oak in any of the
      contractor for construction defects and               lawsuits because the CGL policies did not cover
      alleges only damage to or loss of use of              claims for defective construction and because Pine
      the home itself, do such allegations                  Oak had not established the date of the
      allege “property damage” sufficient to                “occurrence” in each lawsuit that would trigger
      trigger the duty to defend or indemnify               coverage. The trial court granted the insurers’
      under a CGL policy?                                   motion for summary judgment. The court of
      3. If the answers to certified questions              appeals affirmed in part and reversed in part,
      1 and 2 are answered in the affirmative,              holding that the insurers separately had duties to
      does Article 21.55 of the Texas                       defend in certain lawsuits, but not in others.
      Insurance Code apply to a CGL                               Several of the issues presented in the case
      insurer's breach of the duty to defend?               were resolved by Lamar Homes, Inc. v. Mid-
      The Supreme Court answered the first two              Continent Casualty Co., ___ S.W.3d ___, 50 Tex.
questions in the affirmative, concluding that               Sup. Ct. J. 1162 (Tex. 2007). However, this case
allegations of unintended construction defects may          presents the additional issues of how a policy’s
constitute an “accident” or “occurrence” under a            trigger date initializing the duty to defend should
CGL policy and that allegations of damage to, or            be determined, and whether extrinsic evidence
loss of use of, the home itself may also constitute         may be introduced to determine the insurer’s duty
“property damage” sufficient to trigger the duty to         to defend.
defend under a CGL policy. The Court also                         The Supreme Court granted the petition for
answered yes to the final question, concluding that         review, but the date for oral argument is yet to be
the prompt-payment statute, sections 542.051-.061           determined.


                                                       39
Supreme Court Update
November 1, 2006 – October 31, 2007

D. Fiduciary Duty                                           Code. The statutory penalties, however, should
1. Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins.             not be imposed after interpleader is filed.
Co.,     S.W.3d , 51 Tex. Sup. Ct. J. 13 (Tex.                   After Ed Martinez died, his daughter Lisa,
September 28, 2007) [05-0006].                              his ex-wife Linda, and his second wife Toni
      At issue in this case is whether a third-party        separately filed claims with State Farm Life
insurance administrator owed a general fiduciary            Insurance Company for the proceeds of his life
duty to an insurer. National Plan Administrators            insurance policy. Toni sued State Farm and State
(NPA) contracted with National Health Insurance             Farm filed an interpleader two days later, but this
Company to perform third-party administrator                was twelve days after the statutory 60-day prompt
duties with regard to cancer insurance policies             payment deadline that began after State Farm
issued by National Health. When National Health             received Toni’s initial claim. The trial court
decided to exit the cancer insurance market, NPA            eventually awarded the life insurance proceeds to
“rolled” or transferred most of the policies to             Toni and assessed penalty interest at eighteen
another carrier. National Health sued NPA for               percent through the date of final judgment
violation of a general fiduciary duty. The jury             because State Farm had not paid Toni by the sixty
found NPA did not comply with its general                   day deadline.
fiduciary duty and that National Health’s damages                The Supreme Court held that the
were $744,937. The court of appeals affirmed.               Legislature’s 1991 adoption of a sixty-day
      The Supreme Court held that NPA did not               deadline required imposition of the statutory
owe National Health a general fiduciary duty and            penalties, despite the insurer’s interpleader. The
reversed the court of appeals’ judgment. The                interpleader exception to the prompt payment
Court first examined the Insurance Code and                 statute did not survive the 1991 changes.
determined that it did not impose a statutory               Statutory penalties do not apply, however, after
general fiduciary duty on third-party insurance             interpleader is filed. As State Farm’s interpleader
administrators. The Court then considered the               was filed twelve days after the sixty-day deadline,
contract between NPA and National Health noting             it only owed statutory penalties and attorney’s
that the parameters of an agency relationship are           fees for twelve days.
to be established by an agreement between the
parties. The Court also noted that this was an              F. Policies/Coverage
arms length business transaction, the parties were          1. State Farm Lloyds v. Johnson, 204 S.W.3d 897
represented by counsel, and they were aware of              (Tex. App.—Dallas 2006), pet. granted, 51 Tex.
the practice of “rolling” policies. The agreement           Sup. Ct. J. 2 (September 28, 2007) [06-1071].
set out the specific duties NPA was to perform.                   At issue in this case is whether an insurance
The agreement also stated that NPA would act as             policy’s appraisal clause giving appraisers the
an independent contractor and provide services to           power to determine the “amount of loss” includes
third parties. Because the contract allowed NPA             the power to consider causation, coverage, and
to take actions that would have been in violation           liability. State Farm insured Johnson’s home
of a general fiduciary duty to National Health, the         under a policy that required appraisers to resolve
Court declined to impose such a duty on NPA.                disputes over “the amount of loss.” After a hail
The Court reversed the court of appeals’ judgment           storm damaged Johnson’s home, State Farm’s
and rendered judgment that National Health take             inspector determined that the storm damaged only
nothing.                                                    a small portion of the roof and that the cost to
                                                            repair the small portion was below the policy
E. Interpleader Actions                                     deductible. Johnson’s expert determined that the
1. State Farm Life Ins. Co. v. Martinez,                    storm damaged a larger portion of the roof and
216 S.W.3d 799 (Tex. January 9, 2007) [05-0812].            that the repair costs exceeded the policy
     In this life insurance case, the Supreme Court         deductible. After State Farm denied Johnson’s
held that an insurer who interpleads policy                 request for an appraisal, she filed a declaratory
proceeds after the 60-day deadline must pay                 judgment action seeking to compel it. State Farm
statutory penalties under the Texas Insurance               filed a motion for summary judgment arguing that


                                                       40
Supreme Court Update
November 1, 2006 – October 31, 2007

the appraisal clause was not triggered because              22 S.W.3d 321 (Tex. 1995), specifically included
determining the extent of damage involves an                surplus lines insurers in the same category as
issue of causation, and not “amount of loss.” The           unauthorized insurers. Moreover, the fact that a
trial court granted summary judgment in favor of            specific statute established the tax structure and
State Farm, but the court of appeals reversed,              set up separate, harsher penalties for surplus lines
holding that the dispute over the extent of the hail        policies and unauthorized insurance could not be
damage fell under the contract’s “amount of loss”           read to preclude the use of the more general,
provision. The Supreme Court granted State                  unauthorized insurance tax for surplus lines
Farm’s petition for review and will hear oral               policies falling outside the explicit exception
argument on January 15, 2008.                               when the relevant statutes could be reconciled.
                                                            The Supreme Court held that when a policy is
G. Premium Taxes                                            procured from an eligible surplus lines carrier
1. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83           without a licensed surplus lines agent, the
(Tex. December 1, 2006) [04-0429].                          premium tax applicable to unauthorized insurance
      In this case, the Supreme Court considered            policies may be collected from the insurer.
whether the Texas Insurance Code distinguishes
between eligible surplus lines carriers and other           H. Subrogation
unlicensed insurers for tax purposes. The                   1. Fortis Benefits v. Cantu, S.W.3d , 50 Tex.
Supreme Court was asked to decide who should                Sup. Ct. J. 965 (Tex. June 29, 2007) [05-0791].
pay almost $2 million in unpaid premium taxes on                  The primary issue in this case is whether the
policies issued by surplus lines carriers. Taxes on         equitable “made whole” doctrine—the rule that an
insurance premiums are normally assessed even if            insurer is not entitled to subrogation of medical
the policy is issued by an unlicensed insurer; this         benefits unless the insured has been “made
prevents unlicensed insurers from gaining an                whole”—trumps an insurer’s contract-based
unwarranted advantage. For policies issued by               subrogation right.
unlicensed insurers, the insurer must pay the tax                 After Vanessa Cantu sued multiple parties
or, if it does not, the insured must pay it. Surplus        for severe injuries she sustained in an auto
lines policies are arguably distinct, however,              accident, her medical insurer, Fortis Benefits,
because only licensed agents may issue surplus              intervened, claiming a subrogation right under the
lines policies. The agent’s name and address is on          policy. The various defendants settled with
the policy. That agent is required to pay the tax           Cantu, and Fortis looked only to Cantu for its
after collecting it from the insured. In this case,         recovery. A divided court of appeals upheld a
because some of the agents on policies for which            trial court finding that because Cantu’s medical
taxes were never collected either were                      expenses exceeded the settlement amount plus the
unavailable, uncooperative, or unhelpful, the               benefits Fortis had paid, Fortis’s subrogation
Comptroller treated the policies as unauthorized            claim was barred by the equitable “made whole”
insurance and assessed the insurers for past-due            doctrine.
premium taxes. After failing to resolve the issue                 The Supreme Court held that the “made
administratively, the insurers paid the taxes under         whole” doctrine must yield to Fortis’s right to
protest and filed declaratory judgment actions              contractual subrogation under the plain terms of
seeking refunds of those payments.                          the insurance policy. Fortis was therefore entitled
      The Supreme Court acknowledged that the               to recover from the settlement the money it had
Insurance Code, during the relevant time period,            paid pursuant to the insurance contract. The
did indeed create an exception for surplus lines            Court also held that the trial court did not err in
insurance. That exception, however, shielded the            enforcing the parties’ Rule 11 agreement to
insurers only when (1) the insurance was procured           prevent Fortis from recovering directly against
from by a licensed surplus lines agent; and (2)             defendant Ford Motor Company.
from an eligible surplus lines insurer. The
Supreme Court held that its earlier decision in
Mid-American Indemnity Insurance Co. v. King,


                                                       41
Supreme Court Update
November 1, 2006 – October 31, 2007

2. Frymire Eng’g Co., Inc. v. Jomar Int’l Ltd., 194         case. Liberty Mutual sued Mid-Continent to
S.W.3d 713 (Tex. App.—Dallas 2006), pet.                    recover Mid-Continent’s pro rata share of the
granted, 50 Tex. Sup. Ct. J. 1015 (August 24,               settlement, and the federal district court concluded
2007) [06-0755].                                            that Liberty Mutual was entitled to recover
      At issue in this case is whether equitable            $550,000 from Mid-Continent through
subrogation applies when a subcontractor’s insurer          subrogation.
paid for damages resulting from a design defect in                The Supreme Court concluded that Liberty
equipment correctly installed by the subcontractor          Mutual had no right of reimbursement via
when the subcontractor was contractually liable             contribution or subrogation. The Court held that
for damages. Frymire Engineering Company, as                a claim for contribution was precluded by the
a subcontractor of Price Woods, Inc., installed a           presence of “other insurance” or “pro rata”
valve manufactured by Jomar to repair a water line          clauses in the policies: each co-insurer had not
at the Renaissance Dallas Hotel. Although                   contractually agreed to pay each other’s pro rata
Frymire installed the valve correctly, the valve            share. The Court also held that a claim for
was defectively designed and it ruptured, causing           contractual subrogation was precluded because
extensive water damage at the Renaissance.                  after being fully indemnified, the insured no
Frymire was required to indemnify Renaissance               longer had any contractual rights against Mid-
for any damage under its contract with Price                Continent that Liberty Mutual could assert. The
Woods, and Frymire’s insurer, Liberty Mutual                Court also held that Liberty Mutual was not
Insurance Co., compensated Renaissance for the              subrogated to the right of the insured under
damage. Renaissance released Frymire from all               Stowers because the claimants did not make a
claims relating to the water damage. Frymire and            settlement offer within Mid-Continent’s policy
Liberty Mutual brought suit against Jomar,                  limits. Finally, the Court concluded that this case
seeking damages in the amount it compensated                did not present a situation where equity required
Renaissance and alleging negligence, products               it to prevent a primary insurer from taking
liability, and breach of warranty. The trial court          advantage of an excess insurer because in paying
granted summary judgment for Jomar and the                  $350,000 more than its $1 million policy limits,
court of appeals affirmed, reasoning that Frymire           Liberty Mutual seemed to have been motivated by
lacked standing to sue and the doctrine of                  concern for its excess insurance policy.
equitable subrogation did not apply. The Supreme                  Justice Willett filed a concurring opinion
Court granted Frymire’s petition for review and             asserting it was unnecessary to recognize a cause
will hear oral argument on December 4, 2007.                of action where the insured was fully indemnified
                                                            and the primary insurer complied with its
3. Mid-Continent Ins. Co. v. Liberty Mut. Ins.              contractual obligations.
Co.,     S.W.3d , 51 Tex. Sup. Ct. J. 44 (Tex.
October 12, 2007) [05-0261].                                I. Underinsured/Uninsured Motorist Policies
      On certified question from the United States          1. Brainard v. Trinity Universal Ins. Co.,
Court of Appeals for the Fifth Circuit, the issue in        216 S.W.3d 809 (Tex. December 22, 2006)
this case was whether a primary liability insurer           [04-0537].
that also provides the applicable excess insurance                The principal issues in this case were (1) the
policy is entitled to reimbursement from another            availability and calculation of prejudgment
primary insurer for payment of more than its                interest under an underinsured motorist policy and
proportionate share of a settlement. Mid-                   (2) the availability of attorney’s fees in a suit
Continent, a primary insurer, and Liberty Mutual,           against an insurer on an underinsured motorist
a primary and excess insurer, admitted coverage in          claim. Edward Brainard was killed in an
a suit against their common insured. Liberty                automobile accident. His family settled with the
Mutual settled for $1.5 million and demanded half           tortfeasor’s insurance company for the policy
from Mid-Continent. However, Mid-Continent                  limit and then sued Brainard’s own insurance
agreed to pay only $150,000 which was half of               company, Trinity Universal, seeking damages
Mid-Continent’s calculated settlement value of the          through the underinsured motorist provision of his


                                                       42
Supreme Court Update
November 1, 2006 – October 31, 2007

policy. The Brainards argued that prejudgment                awarding attorney’s fees to Nickerson and
interest owed by the tortfeasor on the entire                rendered judgment for State Farm. See Brainard
amount of damages, not taking into account any               v. Trinity Universal Ins. Co., 216 S.W.3d 809
settlement credits, was recoverable under the                (Tex. 2006).
policy and that attorney’s fees were recoverable
under chapter 38 of the Texas Civil Practice and             3. State Farm Mut. Auto. Ins. Co. v. Norris,
Remedies Code. The court of appeals affirmed                 216 S.W.3d 819 (Tex. December 22, 2006)
the trial court’s denial of prejudgment interest and         [04-0514].
reversed the portion of the trial court’s judgment                 Jimmie R. Norris was injured in an accident
awarding the Brainards attorney’s fees.                      with an underinsured driver. He sued State Farm
      The Supreme Court held that UIM insurance              to recover benefits under his underinsured
covers prejudgment interest that the underinsured            motorist (UIM) policy.          Two issues were
motorist would owe the insured. The Court noted              presented on appeal: (1) whether Norris’s UIM
that prejudgment interest is awarded to                      policy covers prejudgment interest, and (2)
compensate the injured party, not to punish the              whether he is entitled to attorney’s fees under
defendant. Furthermore, Brainard’s UIM policy                chapter 38 of the Civil Practice and Remedies
was based on Texas Insurance Code article 5.06-              Code. The Court held that Norris is entitled to
1(5), and that statute’s “compensatory purpose is            prejudgment interest, but not attorney’s fees.
well served when the insured obtains, in addition                  Writing for the Court, Chief Justice Jefferson
to actual damages, any prejudgment interest that             said “an [] UIM policy allows an insured driver to
the underinsured motorist would owe the insured.”            recover the difference between the negligent
Trinity argued that the UIM policy’s language                driver’s insurance policy limit and the full amount
covering damages “because of bodily injury”                  of damages, including prejudgment interest,
excluded prejudgment interest, but the Court                 determined at trial.” Consistent with the Court’s
rejected this argument because it promotes an                opinion in Brainard v. Trinity Universal
“artificially literal” meaning that “has no basis in         Insurance Co., 216 S.W.3d 809 (Tex. December
the statute’s history or our precedent under which           22, 2006), the Court held that State Farm owes
article 5.06-1 is liberally construed to protect             prejudgment interest, up to the policy limit,
persons who are legally entitled to recover                  calculated by the declining principal formula.
damages from underinsured mototists.”                              Also in accordance with the Brainard
      With regard to the attorney’s fees issue, the          opinion, the Court held that Norris could not seek
Court held that Brainard was not entitled to                 attorney’s fees until, at the earliest, thirty days
attorney’s fees. Under Chapter 38 of the Civil               after the trial court rendered judgment. Thus, the
Practice and Remedies Code, a claimant must                  trial court did not err in refusing to award
present a claim that the insured is “legally entitled        attorney’s fees. See Brainard v. Trinity Universal
to recover.” UIM contracts are unique in that the            Ins. Co., 216 S.W.3d 809 (Tex. 2006).
duty to pay is not triggered until “the insured
obtains a judgment establishing the liability and            XIX. JURISDICTION
underinsured status of the other motorist.”                  A. Minimum Contacts
Therefore, “under chapter 38, a claim for UIM                1. IRA Res., Inc. v. Griego, 221 S.W.3d 592
benefits is not presented until the trial court signs        (Tex. April 20, 2007) [05-0469].
a judgment establishing the negligence and                        The Griegos sued IRA Resources and other
underinsured status of the other motorist.”                  California defendants in a Texas state court for an
                                                             alleged securities violation. The defendants all
2. State Farm Mut. Auto. Ins. Co. v. Nickerson,              filed special appearances, which the trial court
216 S.W.3d 823 (Tex. December 22, 2006)                      denied. The court of appeals reversed as to the
[04-0427].                                                   other defendants but affirmed for IRA Resources,
     In accordance with its opinion in Brainard v.           holding that sufficient minimum contacts existed
Trinity Universal Insurance Company, the Court               for specific jurisdiction in Texas.
reversed the part of the court of appeals’ opinion


                                                        43
Supreme Court Update
November 1, 2006 – October 31, 2007

      In a per curiam opinion, the Supreme Court              analysis. The Court further held, however, that
reversed, holding that IRA Resources had not                  the claims alleged against Moki Mac did not arise
purposely availed itself of the privilege of                  from or relate to its contacts with the forum. In
conducting activities within Texas. First, an agent           reaching that conclusion, the Court adopted a test
for a different company established the account               under which a defendant’s contacts will support
for the Griegos with IRA Resources. Second,                   the exercise of personal jurisdiction if there is a
although IRA Resources maintained an investment               substantial connection between those contacts and
account for and sent periodic statements to the               the operative facts of the litigation. The Court
Griegos, the bulk of its contacts with Texas were             reversed the court of appeals’ judgment and
not purposeful. Finally, IRA Resources structured             remanded to that court to allow it to consider
its transaction so as to avoid subjecting itself to           whether general jurisdiction was established.
jurisdiction in Texas.                                              Justice Johnson, joined by Justice Medina,
      The Supreme Court remanded the case to the              dissented. The dissenting justices would have
court of appeals for consideration of whether IRA             held that the substance of the Druggs’ suit was
Resources was subject to general jurisdiction in              related to Moki Mac’s activities which were
Texas.                                                        purposefully directed toward Texas residents, that
                                                              the due process inquiry was satisfied, that it was
2. Moki Mac River Expeditions v. Drugg,                       not unreasonable or unfair to Moki Mac for Texas
221 S.W.3d 569 (Tex. March 2, 2007) [04-0432].                to exercise jurisdiction over Moki Mac as to the
      This is a wrongful death suit against Moki              Druggs’ suit, and subject to a “fair play and
Mac River Expeditions, a Salt Lake City based                 substantial justice” analysis, the exercise of
river rafting outfitter, arising out of a hiking trail        jurisdiction by Texas in this case fell within the
accident in the Grand Canyon. The primary issue               boundaries of federal constitutional due process
was whether the quality and nature of a Utah                  requirements.
corporation’s contacts with customers in Texas
were sufficient to satisfy due process and support            3. PHC-Minden, L.P. v. Kimberly-Clark Corp.,
personal jurisdiction.                                             S.W.3d , 50 Tex. Sup. Ct. J. 1153 (Tex.
      Andy Drugg, age thirteen, died while hiking             August 31, 2007) [05-0823].
during one of Moki Mac’s river-rafting trips in                     At issue in this case is whether a Louisiana
Arizona after slipping and falling off a ledge in the         hospital, either independently or through its parent
Grand Canyon. The Druggs brought suit in Texas                corporation, had continuous and systematic
for wrongful death and for intentional and                    contacts with Texas giving rise to jurisdiction in
negligent misrepresentation based upon statements             Texas. DeWayne Eddington, individually and as
made in two brochures that Moki Mac sent to a                 representative of Jajah Eddington’s estate, sued
customer in T exas and in an                                  Kimberly-Clark Corporation asserting product
acknowledgment-of-risk form signed by the                     liability, breach of warranty, and negligence
Druggs. The trial court denied Moki Mac’s                     claims. He alleged that Jajah’s use of Kotex
special appearance. The court of appeals affirmed             tampons led to the infection that caused her death.
on the basis of specific jurisdiction, concluding             On February 28, 2003, Kimberly-Clark filed a
that (1) the Druggs’ misrepresentation claims arise           third-party petition against PHC-Minden, L.P.
from, and relate to, Moki Mac’s minimum                       (Minden), which owns Minden Hospital, asserting
contacts with Texas, (2) Moki Mac satisfied the               that Minden’s negligence proximately caused her
purposeful availment requirement by targeting                 death. Minden, a Louisiana hospital and a
customers in Texas, and (3) these circumstances               wholly-owned subsidiary of Province Health Care,
do not violate notions of fair play or due process.           filed a special appearance in response. Kimberly-
      The Supreme Court held that the Druggs did              Clark claimed that Province, whose headquarters
not establish specific jurisdiction. The Court                is in Tennessee, did business in Texas and that its
agreed that the Druggs established that Moki Mac              forum-related acts should be imputed to Minden.
had sufficient Texas contacts to satisfy the                  After a hearing, the trial court concluded it had
purposeful-availment prong of the jurisdictional              general jurisdiction over Minden and denied the


                                                         44
Supreme Court Update
November 1, 2006 – October 31, 2007

special appearance.        The court of appeals             B. Waiver
affirmed, reasoning that (1) Minden itself had              1. Tellez v. City of Socorro, 226 S.W.3d 413
“continuous and systematic contacts with Texas”;            (Tex. June 1, 2007) [05-0629].
and (2) Minden and Province operated as a single                  In this per curium opinion, the Supreme
business enterprise, and Minden, through                    Court held that a failure to follow the procedures
Province, did business in Texas.                            set forth for zoning challenges in Texas Local
      The Supreme Court noted that general                  Government Code section 211.011(a)-(c) did not
jurisdiction is “dispute-blind,” an exercise of the         deprive the court of appeals of jurisdiction of the
court’s jurisdiction made without regard to the             case.
nature of the claim presented. The Court noted                    Juan Tellez filed suit against the City of
that the courts of appeals were in conflict over the        Soccorro after the City’s Board of Adjustment
appropriate time period for assessing general               denied his application for a legal non-conforming
jurisdictional contacts. The Court concluded that           use permit for his auto salvage yard. The trial
the relevant period ends at the time suit is filed.         court affirmed the Board’s decision but the court
Because general jurisdiction is dispute-blind, the          of appeals dismissed Tellez’s appeal sua sponte,
incident made the basis of the suit should not be           holding that it lacked subject-matter jurisdiction.
the focus in assessing continuous and systematic            The court of appeals based this conclusion on
contacts. The Court also concluded that Minden’s            Tellez’s failure to name the Board itself as a
sporadic contacts, which included two trips to              defendant and his failure to specifically allege
Texas, payments to Texas vendors, and contracts             how the Board’s decision was illegal.
with three Texas-based entities, were not the type                The Supreme Court reversed. The Court
of continuing and systematic activity upon which            held that jurisdiction exists under section 211.011
general jurisdiction may be based.                          of the Local Government Code “[o]nce a party
      The Supreme Court then examined whether               files a petition within ten (10) days after a zoning
Province’s Texas contacts could be imputed to               board decision.”         Although subject-matter
Minden. The Court noted that the factors relevant           jurisdiction cannot be waived, the procedural
to jurisdictional veil-piercing differ from those           defects noted by the court of appeals could be
pertinent to substantive veil-piercing.           In        waived because they were not jurisdictional.
determining the former, the plaintiffs must prove           Because the City failed to object to either defect,
the parent controls the internal business operations        the court of appeals had jurisdiction of the appeal.
and affairs of the subsidiary. But the Court stated         Accordingly, the Court remanded the case to the
that the degree of control the parent exercises             court of appeals to consider the merits of Tellez’s
must be greater than that normally associated with          petition.
common ownership and directorship; the evidence
must show that the two entities cease to be                 XX. JUVENILE JUSTICE
separate so that the corporate fiction should be            A. Confessions
disregarded to prevent fraud or injustice. The              1. In the Matter of H.V., 179 S.W.3d 746 (Tex.
Court concluded that there was no evidence of               App.—Fort Worth 2005), pet. granted, 50 Tex.
control other than that consistent with Province’s          Sup. Ct. J. 151 (December 4, 2006) [06-0005].
investor status, so Province’s Texas contacts could               The issues presented in this case are whether
not be imputed to Minden.                                   a juvenile’s statement during a custodial
      The Supreme Court concluded that Minden               interrogation that he wanted to call his mother
did not have continuous and systematic contacts             because he wanted his mother to ask for an
with Texas, nor was there any basis for imputing            attorney constitute an unambiguous invocation of
Province’s Texas contacts to Minden. The Court              the right to counsel such that a subsequently
reversed the court of appeals’ judgment and                 obtained statement must be excluded from
dismissed the claims against Minden for want of             evidence at the juvenile’s criminal trial, and, if the
jurisdiction.                                               statement is inadmissible, whether physical
                                                            evidence discovered as a result of that statement
                                                            must also be excluded from evidence.


                                                       45
Supreme Court Update
November 1, 2006 – October 31, 2007

      H.V., a 16-year-old Bosnian native who was                  The Supreme Court granted the State’s
a suspect in a murder investigation, was taken in           petition for review, and heard oral arguments on
for a custodial interrogation, properly warned,             April 12, 2007.
made a written statement, and was released. Later
the same day, he was arrested and held in the back          XXI. MEDICAL MALPRACTICE
of a patrol car for approximately 90 minutes                A. Comparative Fault
before being transported to a juvenile facility. His        1. Jackson v. Axelrad, 221 S.W.3d 650 (Tex.
parents were not told of his arrest until sometime          April 20, 2007) [04-0923].
after he had been transported to the detention                    The principal issue in this medical
facility. During the administration of the Miranda          malpractice case is whether and to what extent a
warnings by a magistrate, H.V. stated he wanted to          patient has a duty to disclose information
call his mother because he wanted her to ask for a          concerning medical history to a treating physician,
lawyer. H.V. was told that he would be detained             and whether, when the patient is a doctor, his
in the juvenile facility for an uncertain amount of         medical training should be taken into account in
time before he would be able to talk to his mother,         evaluating the medical history he conveys.
and that if he wanted an attorney, it would have to               After suffering extreme lower abdominal
be his choice, to which H.V. responded “I’m only            pains, Dr. David Axelrad, a psychiatrist, went to
16.” The magistrate apparently explained to H.V.            his physician, Dr. Richard Jackson. Diagnostic
that he could ask for a lawyer, and then                    tests indicated a viral illness, so Jackson directed
determined that H.V. was willing to speak to the            Axelrad to take a laxative and two enemas. At the
police.      The magistrate signed a form                   time of his advice, Jackson had not received a
acknowledging that the proper warnings had been             blood test that would later reveal an elevated
given, but H.V. did not sign. H.V. then made a              white blood cell count indicative of infection.
written, signed statement on a form stating that the        The first enema caused Axelrad to vomit and
proper warnings had been given. Based on                    experience excruciating pain. Axelrad’s wife took
information in that statement and a diagram drawn           him to the emergency room where it was
by H.V. while making the statement, police                  discovered that Axelrad suffered from
located a gun.                                              diverticulitis and a perforated colon.
      At trial, H.V. moved to suppress both the                   Axelrad sued Jackson for malpractice in
second written statement and the gun. The trial             failing to diagnose the diverticulitis and
court held that H.V. had unambiguously invoked              negligently prescribing enemas. Jackson sought
his right to counsel; because the confession was            a comparative fault jury question on grounds that
obtained after a failure to honor this invocation           Axelrad failed to disclose that his pain was severe
and the gun was the fruit of the improperly                 and originated in the lower left quadrant of his
obtained confession, both must be suppressed.               abdomen and that in 1994 he had undergone a
The trial court also ruled that the delay in                protoscopy that resulted in the recommendation to
transporting H.V. to the detention center and               have a colonoscopy in two years. The trial court
notifying his parents of his arrest violated                submitted Axelrad’s comparative fault to the jury,
provisions of the Family Code. The court of                 which found him 51% responsible, resulting in a
appeals affirmed, holding that given the totality of        take-nothing judgment. The court of appeals
the circumstances, the trial court did not abuse its        reversed, holding that Axelrad’s fault should not
discretion in suppressing the written statement,            have been submitted because there was no
and differentiating between the physical fruits of          evidence of a query designed to elicit the
a statement obtained after a failure to honor a             information Axelrad allegedly failed to
request for counsel, such as the gun in this case,          communicate, and therefore, no evidence to
which must be suppressed, and the physical fruits           support Jackson’s contention that Axelrad had a
of a statement obtained after a failure to provide          duty to volunteer the information.
proper Miranda warnings, which need not be                        The Supreme Court examined the physician
suppressed.                                                 of ordinary prudence standard and determined that
                                                            the ordinary prudence standard—under same or


                                                       46
Supreme Court Update
November 1, 2006 – October 31, 2007

similar circumstances—includes a party’s                      action against Dr. Juan Mario Villafani. Villafani
expertise. As such, the jury could have found that            challenged the adequacy of Trejo’s expert witness
as a doctor, Axelrad’s failure to self-diagnose or            report. However, the trial court denied Villafani’s
better convey his maladies caused his injuries.               motion for sanctions and dismissal pursuant to
The Supreme Court reversed the court of appeals’              Article 4590i. After the denial, Trejo filed a
judgment because it erred by disregarding the                 notice of nonsuit without prejudice. The trial
jury’s verdict.                                               court granted an order to nonsuit and an order
                                                              granting severance. Villafani appealed. The court
B. Expert Reports                                             of appeals dismissed the appeal for lack of
1. Leland v. Brandal, 217 S.W.3d 60 (Tex.                     jurisdiction.    The Supreme Court granted
App.—San Antonio 2006), pet. granted, 50 Tex.                 Villafani’s petition for review and heard oral
Sup. Ct. J. 910 (June 25, 2007) [06-1028].                    argument on April 10, 2007.
      At issue in this medical malpractice case is
whether a plaintiff whose proposed expert is                  C. Informed Consent
accepted by the trial court, but disqualified on              1. Schaub v. Sanchez, 229 S.W.3d 322 (Tex. June
appeal is thereafter entitled to the statutory thirty-        22, 2007) [06-0375].
day extension to correct any deficiencies in the                    Janie Sanchez sued Doctors Lowry Schaub
plaintiff’s expert report.                                    and Kevin Crawford for failing to obtain her
      George Brandal suffered a stroke after                  informed consent to perform a stellate ganglion
following the advice of his dentist, John Leland, to          block among other claims. By agreed order, the
stop taking two medications. He and his wife sued             trial court dismissed with prejudice Sanchez’s
Dr. Leland for medical malpractice. The trial                 other malpractice-related claims, leaving only her
court overruled Dr. Leland’s objections to the                claim that the doctors “failed to obtain informed
Brandals’ expert report. On appeal, the court of              consent with regard to the stellate ganglion
appeals held that the Brandals’ expert witness, an            block.”      The trial court granted summary
anesthesiologist, had not explained how he was                judgment in favor of the doctors on grounds that
qualified to express an opinion on the nature and             Sanchez had signed forms consenting to the
degree of causation, if any, of Brandal’s stroke by           procedure.
discontinuing the medication. The court of                          The court of appeals reversed, holding that
appeals then held, however, that since the trial              the forms, which did not give specific consent to
court had accepted the expert report, the Brandals            a stellate ganglion block, incorporated recognized
had never had the opportunity to invoke the                   common-law duties regarding informed consent.
statutory thirty-day extension of time to correct             It reasoned that performing the procedure to
any deficiencies in their expert report. The court            which Sanchez had verbally objected might have
of appeals accordingly reversed the judgment of               deviated from accepted medical practices, thus
the trial court and remanded the cause for further            raising a fact issue regarding Sanchez’s consent.
proceedings.                                                        The Supreme Court reversed the court of
      The Supreme Court granted Dr. Leland’s                  appeals judgment and rendered judgment that
petition for review and heard argument on                     Sanchez take nothing. The Court held that the
November 14, 2007.                                            summary judgment record conclusively negated
                                                              Sanchez’s informed consent claim because
2. Villafani v. Trejo, 2006 WL 1284948 (Tex.                  Sanchez admitted she was informed of the danger
App.—Corpus Christi 2006), pet. granted, 50 Tex.              of the treatment. The Court reasoned that
Sup. Ct. J. 447 (February 26, 2007) [06-0501].                Sanchez’s claim that she objected to the block
     The principal issue in this case is whether a            sounded in battery or negligence, but by statute,
defendant can appeal the denial of motion to                  Sanchez would have a claim for lack of informed
dismiss under former Article 4590i, section 13.01             consent only if she was not informed of the risks
of the Medical Liability and Insurance                        of the procedure. Here, Sanchez knew the risks
Improvement Act after a plaintiff nonsuits all                and therefore could not claim lack of informed
claims. Adelo Trejo brought a medical negligence              consent.


                                                         47
Supreme Court Update
November 1, 2006 – October 31, 2007

D. Interlocutory Appeal                                      by the Matthewses were so inadequate so as not to
1. Lewis v. Funderburk, 191 S.W.3d 756 (Tex.                 be expert reports at all. The trial court denied
App.—Waco 2006), pet. granted, 50 Tex. Sup. Ct.              Ogletree’s motion, but found that the Matthewses’
J. 929 (July 2, 2007) [06-0518].                             expert reports were deficient and granted the
      The issue in this medical malpractice case is          Matthewses a 30-day extension to cure the
whether a party may file an interlocutory appeal             deficiencies in the reports. It also held that Heart
from the denial of a motion to dismiss a deficient           Hospital failed to object to the reports within the
expert report in a healthcare liability claim under          statutory time period and thus waived any
Civil Practice & Remedies Code section                       challenge to the defects in the report. The court of
51.014(a)(9). Dewayne Funderburk, as next                    appeals dismissed Ogletree’s appeal for want of
friend of his daughter, Whitney Funderburk, filed            jurisdiction, holding that because the trial court
suit against Dr. Rory Lewis and alleged that Lewis           granted an extension of time when it denied
negligently treated his daughter’s broken wrist.             Ogletree’s motion, an interlocutory appeal was
Lewis claimed that Funderburk did not serve an               not proper. The court of appeals also affirmed the
expert report by the 120-day statutory deadline              trial court’s denial of Heart Hospital’s motion to
and moved to dismiss; Funderburk denied this                 dismiss. Therefore, one issue in this case is
claim and argued that he had served Lewis with a             whether a trial court’s denial of a motion to
letter from a physician.                                     dismiss an expert report, coupled with the grant of
      Several months later the trial court held              a time extension to cure a deficiency in a report,
Funderburk’s expert report was deficient, but                may be subject to an interlocutory appeal under
granted Funderburk’s motion for a 30-day                     § 74.351 of the Texas Civil Practice and
extension and denied Lewis’s motion to dismiss.              Remedies Code. Other issues include whether a
After Funderburk served an expert report from a              party must object to an expert report when
different physician, Lewis filed a motion for                causation is not properly addressed and whether a
reconsideration of the prior ruling, a second                deficient report may be cured with report from a
motion to dismiss, and an objection to the                   new expert.
sufficiency of Funderburk’s expert report. After                   The Supreme Court granted Ogletree and
a hearing, the trial court refused to hear the motion        Heart Hospital’s petition for review and heard oral
for reconsideration and denied Lewis’s second                argument on April 10, 2007.
motion to dismiss and the objection. Lewis filed
a notice of interlocutory appeal. The court of               E. Limitations
appeals dismissed the case for lack of jurisdiction.         1. Kallam v. Boyd, 232 S.W.3d 774 (Tex. June
The Supreme Court granted Lewis’s petition for               15, 2007) [05-0027].
review and heard argument on November 15,                          Sharon Boyd was diagnosed with colorectal
2007.                                                        cancer. She began reporting her symptoms to
                                                             various physicians in November 1998. In
2. Ogletree v. Matthews, 212 S.W.3d 331 (Tex.                February 2002, Boyd requested a referral to have
App.—Austin 2006), pet. granted, 50 Tex. Sup.                a colonoscopy, which took place in April 2002.
Ct. J. 454 (February 23, 2007) [06-0502].                    Besides learning of her cancer, Boyd was told that
      Nancy and Luann Matthews filed a                       the tumor or some precursor abnormality had been
healthcare liability claim against Dr. Ogletree and          present and growing in her colon since 1996.
Heart Hospital concerning the care and treatment                   Boyd sued five health care providers alleging
their father received before his death. The                  various negligent acts such as misdiagnosis. The
Matthewses provided an expert report within the              defendants moved for partial summary judgment,
proper time frame—one day before the expiration              arguing that the two-year statute of limitations for
of the statutory deadline. Ogletree objected to the          medical malpractice claims found in former TEX .
reports and filed a timely motion to dismiss the             REV . CIV . STAT . article 4590i, section 10.01
report. Heart Hospital also objected to the reports,         barred Boyd’s claims which alleged negligence
but did so after the statutorily prescribed deadline.        occurring before August 30, 2000. Boyd had
Both motions allege that the documents provided              pleaded that the open courts provision precluded


                                                        48
Supreme Court Update
November 1, 2006 – October 31, 2007

any application of this limitations period because           Therefore, the issue is whether the language of
she had no reasonable opportunity to discover the            Chapter 74 of the Texas Civil Practice and
wrongs or her injury within that period, and in              Remedies Code prohibits pre-lawsuit depositions
response to the summary judgment motion Boyd                 as permitted under Rule 202 of the Texas Rules of
filed evidence that she claimed raised a fact issue          Civil Procedure. The Supreme Court heard oral
regarding whether she had such a reasonable                  argument on September 26, 2007.
opportunity. The trial court granted the motions
for partial summary judgment.                                G. Statute of Limitations
      The court of appeals reversed and remanded             1. Yancy v. United Surgical Partners Int’l, Inc.,
as to the majority of Boyd’s negligence claims,                 S.W.3d , 51 Tex. Sup. Ct. J. 63 (Tex. October
holding that Boyd had raised a fact issue                    19, 2007) [05-0925].
concerning whether she had a reasonable                            On May 3, 2000 during a medical procedure,
opportunity to learn of the defendants’ negligence           Carletha Yates suffered a cardiac arrest, allegedly
or her cancer during the limitations period. The             caused by the medical personnel’s failure to
Supreme Court granted the defendants’ petitions              monitor her oxygen while she was under general
for review. However, Boyd died before oral                   anesthesia, and is now comatose. On December
argument, and the primary issue in the case                  10, 2001, Eula Yancy, Yates’s mother and
became whether the open courts provision of the              guardian of her estate and person, sued Manuel
Constitution would allow Boyd’s heirs to continue            Ramirez, M.D. and Dallas Pain & Anesthesia
the case. The Supreme Court dismissed the case               Associates for negligence. Almost two years
as improvidently granted to allow the new issue to           later, on September 2, 2003, Yancy added United
be fully argued and briefed in the trial court and           Surgical Partners International, Inc., Valley View
court of appeals.                                            Surgical Center, Inc., and Judith Smith, R.N., as
                                                             defendants.
F. Pre-trial depositions                                           United Surgical, Valley View, and Smith
1.     In re Jorden, 191 S.W.3d 483 (Tex.                    asserted that limitations barred Yates’s claims,
App.—Tyler 2006), argument granted on pet. for               and they moved for summary judgment on that
writ of mandamus, 50 Tex. Sup. Ct. J. 533 (March             basis. In response, Yancy conceded that she filed
12, 2007) [06-0369].                                         Yates’s claims outside of the two-year statute of
      Nancy Allan died and her son retained                  limitations but contended that, due to her
counsel to investigate and potentially file a                continuous incapacity, the two-year statute of
medical negligence lawsuit against those who                 limitations violated the open courts provision of
treated his mother. Allan filed a petition to                the Texas Constitution as applied to her. The trial
conduct pre-suit discovery under Rule 202 of the             court granted the motions. The court of appeals
Texas Rules of Civil Procedure seeking to depose             affirmed, holding that Yancy failed to present
each of the parties he anticipates suing. At the             competent evidence of Yates’s alleged continuous
time of his petition, Allan had not served an expert         mental incapacity and, therefore, failed to raise a
medical report pursuant to § 74.351 of the Texas             fact issue about the constitutionality of the statute
Civil Practice and Remedies Code. While Rule                 of limitations for health care liability claims as
202 of the Texas Rules of Civil Procedure                    applied to her.
provides a mechanism by which parties can                          The Supreme Court affirmed on different
conduct pre-suit depositions to investigate                  grounds. The Court held that Yancy had the
potential future lawsuits, the Texas Medical                 burden to present evidence of Yates’s continuous
Liability Act prohibits almost all discovery until           mental incapacity but concluded that she met that
an expert report is filed. The trial court denied            burden. The Court noted that one affiant testified
Allan’s petition, holding that the provisions of             that based on her personal observations,
Chapter 74 limiting pre-suit discovery govern Rule           assessment, interviews, and review of her medical
202. The court of appeals granted mandamus                   records, Yates had been in a comatose, vegetative
relief, holding that Chapter 74’s legislative history        state consistently and uninterrupted since May 3,
does not preclude Rule 202 depositions.                      2000. When viewed in conjunction with Yates’s


                                                        49
Supreme Court Update
November 1, 2006 – October 31, 2007

medical records reflecting a cardiac arrest, a ten-         power because they were rationally related to a
minute period during which Yates was not                    legitimate governmental interest. The Court also
breathing, and the anesthesiologist’s deposition            concluded that the City was not estopped from
testimony, the Court held that Yancy raised a fact          closing the access because estopping a city from
issue as to whether Yates has been continuously             employing its chosen method to regulate traffic
mentally incapacitated since the surgery, and the           would improperly interfere with the City’s
court of appeals erred in concluding otherwise.             governmental functions. Finally, the Court held
      The Court then examined Yancy’s open                  that closure of the access would not constitute a
courts claim. The Court noted that the open courts          compensable taking because access to the
guarantee differed from tolling provisions. Unlike          business park would not be substantially impaired
the discovery rule, the open courts provision               as other reasonable access points would remain
merely gives litigants a reasonable time to                 open.
discover their injuries and file suit. Court must
determine what constitutes a reasonable time. The           XXIII. NEGLIGENCE
Court concluded that the open courts guarantee              A. Duty to Warn
was not violated as applied to Yates. Yancy knew            1. Cent. Ready Mix Concrete Co. v. Islas,
of Yates’s incapacity the day it occurred, retained         228 S.W.3d 649 (Tex. June 29, 2007) [05-0940].
a lawyer and filed suit within the applicable                     The principal issue in this case is whether a
limitations period, and did not offer any                   party who contracts with an independant
explanation for failing to name additional                  contractor owes the contractor a duty to warn of
defendants for almost twenty-two months after               the dangers of the endeavor.
filing suit.                                                      Central Ready Mix Concrete operated
                                                            several ready-mix cement trucks. The drums of
XXII. MUNICIPAL LAW                                         these trucks must be periodically cleaned of
A. Police Power                                             residual concrete. Central contracted with Eugene
1. City of San Antonio v. TPLP Office Park                  Taylor to perform the periodic cleaning. While
Prop., 218 S.W.3d 60 (Tex. February 9, 2007) [04-           Taylor’s employee, Luciano Islas, was cleaning
1130].                                                      one of the trucks, he was injured. He then sued
      The issues in this case were whether the City         Taylor and Central. A jury found that cleaning
of San Antonio’s attempts to block access from a            the truck was an inherently dangerous activity and
private business park to a city street were a proper        constituted a peculiar risk. The jury found Central
exercise of the City’s police power, whether the            20% liable, Taylor 70% liable, and Islas 10%
City was estopped from taking such action, and              liable. The trial court granted Central’s motion
whether closing the access would constitute a               for a take nothing judgment notwithstanding the
compensable taking. TPLP filed suit seeking a               verdict on the grounds that there was no evidence
declaratory judgment to prevent the City from               to support the judgment against it, but the court of
closing the access. The trial court held that the           appeals reversed.
City was estopped from closing the access and                     On appeal, the Supreme Court reinstated the
closure of the access would constitute an                   trial court’s judgment. The Court began with the
unreasonable exercise of the City’s police power            rule that owners generally do not have a duty to
and a compensable taking. The court of appeals              ensure that independent contractors perform their
affirmed the judgment of the trial court after              work in a safe manner. The Court then rejected
reviewing the legal and factual sufficiency of the          the evidence the court of appeals relied on to
trial court’s findings.                                     overturn the trial court’s judgment. First, the
      The Supreme Court reversed the court of               Court held that the danger of cleaning the trucks
appeals’ judgment. First, the Court held that when          was not a concealed hazard about which Central
reviewing the reasonableness of a city’s actions, a         had a duty to warn Taylor. Second, the Court
deferential standard should be applied. Under a             rejected the evidence that Central failed to
deferential standard, the Court concluded that the          properly train Taylor and his employees because
City’s actions were a proper exercise of its police         there was no evidence that Central retained a right


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November 1, 2006 – October 31, 2007

to control their training. Third, the Court rejected        Court held the experience of the employee in
the idea that Central failed to properly investigate        Keng differed from Skiles’s experience in two
Taylor’s background because there was nothing to            respects. First, the unloading of food products
indicate that an investigation would have                   was a normal part of Skiles’s job and he had been
uncovered a history of negligence. Accordingly,             trained by Jack in the Box on procedures to follow
the Court reinstated the trial court’s take nothing         when the lift gate failed to operate. Second,
judgment for Central.                                       Skiles voluntarily made the decision to obtain a
                                                            ladder and jump into the trailer.
2. Jack in the Box, Inc. v. Skiles, 221 S.W.3d 566               The Court concluded the dangers associated
(Tex. February 9, 2007) [05-0911].                          with the use of a ladder to climb over a lift gate
      Wade Skiles sued Jack in the Box, Inc. for            were common and obvious. Citing its recent
negligence after he injured both of his knees when          holding in Kroger Co. v. Elwood, 197 S.W.3d 793
he used a ladder to jump over the broken lift gate          (Tex. 2006), that an employer owes no duty to
of a Jack in the Box delivery truck. The trial court        warn of hazards commonly known or already
granted Jack in the Box’s motion for summary                appreciated by their employees, the Court held
judgment, but the court of appeals reversed. On             Jack in the Box owed no duty to warn Skiles of
petition for review, Jack in the Box asserted, inter        the danger posed by his intended use of the ladder.
alia, there was no evidence it owed and breached
a duty to warn Skiles of an obviously dangerous             B. Premises Liability
condition. The Supreme Court reversed the court             1. Brinson Ford, Inc. v. Alger, 228 S.W.3d 161
of appeals’ judgment and rendered judgment that             (Tex. June 15, 2007) [05-0722].
Skiles take nothing.                                              Connie Alger fell off a pedestrian ramp when
      Skiles worked for Jack in the Box as a                visiting a car dealership and brought this premises
tractor-trailer delivery driver. The company                liability action for the injuries she sustained.
trailers are equipped with automatic lift gates that        Although there were handrails along most of the
assist drivers in loading and unloading food                ramp as it sloped down to ground level, a small
products. Jack in the Box drivers are instructed to         portion of the ramp extended beyond the handrails
call the company’s independent service center if a          to the sidewalk. When Alger turned to walk
lift gate fails to operate. The service center then         toward her car, she stepped off the unrailed
sends a maintenance person to make repairs.                 portion of the ramp and fell.
Skiles’s injury occurred when he arrived for a                    Alger sued Brinson Ford alleging, among
delivery at a Jack in the Box store in Seguin,              other things, that the ramp’s configuration was a
Texas and attempted to lower the lift gate. When            premises condition posing an unreasonable risk of
the lift gate failed to lower, Skiles obtained a            harm. The dealership filed a motion for summary
ladder from the restaurant and used it to climb             judgment asserting that there was no evidence of
over the lift gate and jump into the back of the            a premises condition that presented an
trailer. Upon landing on the trailer floor, Skiles          unreasonable risk of harm; alternatively, Brinson
injured both of his knees.                                  Ford contended the evidence established as a
      Skiles argued Jack in the Box should have             matter of law that the condition of the premises
warned him about the dangers of using a ladder to           did not pose an unreasonable risk of harm. The
jump over trailer lift gates because an employer            trial court granted summary judgment in Brinson
has a duty to warn employees of dangerous                   Ford’s favor and a divided court of appeals
activities that are not normally a part of their job        reversed, holding that fact issues existed as to the
duties. See Kroger Co. v. Keng, 976 S.W.2d 882,             premises owner’s actual or constructive
887 (Tex. App.—Tyler 1988), aff’d, 23 S.W.3d                knowledge of the condition, whether the condition
347 (Tex. 2000). In Keng, a deli worker was                 posed an unreasonable risk of harm, and whether
injured after being told by her supervisors to              the premises owner failed to exercise reasonable
retrieve boxes from the upper shelves of a deli             care to reduce or eliminate the risk of harm.
freezer, a duty she did not normally perform in the               The Supreme Court reversed the court of
course of her employment. Id. at 885-86. The                appeals’ judgment and rendered judgment for


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Brinson Ford. It held that, as a matter of law, the         Corbin, but felt the Court should do so at an
ramp did not pose an unreasonable risk of harm              appropriate time.
because the area of the ramp without handrails met                Justice O’Neill, joined by Justice Medina,
applicable safety standards and was outlined in             dissented. The dissent concluded that, as in
yellow stripping, the height of the highest point of        Corbin, Taylor had presented some evidence that
the unrailed portion of the ramp was less than the          the manner of the display itself created an
average step, and no other customer had ever been           unreasonable risk of injury, since the mat under
injured by the ramp. Thus, the trial court properly         the ice dispenser did not extend beyond one side
granted summary judgment in the dealership’s                of the dispenser and ice could easily bounce to an
favor, and the court of appeals erred in reversing          exposed part of the floor. Knowledge of the
the trial court’s judgment.                                 presence of the particular piece of ice was not
                                                            required if there was knowledge that the set-up
2. Brookshire Grocery Co. v. Taylor, 222 S.W.3d             itself was unreasonably dangerous; because at
406 (Tex. December 1, 2006) [03-0408].                      least one employee testified that water or ice fell
      Taylor sued Brookshire Grocery Co. for                on the exposed tile frequently, there was a
injuries suffered after she slipped on a piece of           question of fact as to Brookshire’s knowledge.
partially melted ice on the tile floor near a self-
serve ice dispenser in one of Brookshire’s stores.          C. Strict Liability
The trial court denied Brookshire’s summary                 1. New Tex. Auto Auction Servs., L.P. v. Gomez
judgment motion, granted partial summary                    de Hernandez, 193 S.W.3d 220 (Tex.
judgment for Taylor on premises liability, and              App.—Corpus Christi 2006), pet. granted, 50
awarded Taylor damages found by the jury. The               Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0550].
court of appeals affirmed. The Supreme Court,                     At issue in this case is whether an auctioneer
without hearing oral argument, reversed and                 should be held to a strict liability standard. New
rendered judgment for Brookshire.                           Texas Auto Auction, which sells only to licensed
      The Court held that there was no evidence             commercial dealers, sold a 1993 Ford Explorer
that the dispenser was set up in such a way as to           with defective tires to a second auctioneer. Ford
constitute an unreasonably dangerous condition.             and Bridgestone recalled the tires on this Ford
Although one employee testified that there could            model prior to the auction because of the tires’
have been more floor mats around the ice                    inherently dangerous and defective nature, but the
dispenser, the mere fact that more precautions              tires were not removed from the vehicle. The
could have been taken does not show the actual              second auctioneer sold the car to a dealer who
conditions were unreasonably dangerous. The                 eventually sold the car to Jose Hernandez
only unreasonably dangerous condition was the               Gonzales. Gonzales was killed in an auto
actual piece of ice on which Taylor slipped, and            accident, allegedly due to the vehicle’s tire failure.
there was no evidence it had been on the ground             Gonzales’s wife sued New Texas on theories of
long enough for the store to have constructive              strict products liability and negligence. The trial
knowledge of the condition. The Court rendered              court granted New Texas’s motion for summary
judgment that Taylor take nothing.                          judgment, but the court of appeals reversed. The
      Justice Johnson concurred, writing to address         court of appeals held that there were genuine
the confusion created by Corbin v. Safeway, 648             issues of material fact regarding whether the
S.W.2d 292 (Tex. 1983), a premises defect case              auction house is a seller and thus held to a strict
which somewhat blurred the distinction between              liability standard, whether the auction house had
premises defect and negligent activity, and seemed          a duty with respect to selling defective vehicles,
to hold that a premises defect case can succeed             and whether the auction house breached its duty
even absent evidence the premises owner had                 when it sold the vehicle as is. The Supreme Court
actual or constructive knowledge of the specific            granted New Texas’s petition for review and
condition. Justice Johnson noted that the parties           heard oral argument on October 17, 2007.
in this case had not asked the Court to re-examine



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D. Substantial-Factor Causation                             concluded that “in a case like this, proof of mere
1. Borg-Warner Corp. v. Flores, 232 S.W.3d 765              frequency, regularity, and proximity is necessary
(Tex. June 8, 2007) [05-0189].                              but not sufficient, as it provides none of the
      Arturo Flores, who spent much of his career           quantitative information necessary to support
as a brake mechanic, sued Borg-Warner and                   causation under Texas law.”
others, alleging that the asbestos contained in                   The Court rejected the idea that substantial-
brake pads the defendants manufactured caused               factor causation must be reduced to mathematical
him to develop asbestosis. At trial, Flores                 precision, noting that defendant-specific evidence
presented the testimony of two experts. One                 relating to the approximate dose to which the
diagnosed Flores with asbestosis based on his               plaintiff was exposed, coupled with evidence that
work as a brake mechanic coupled with an                    the dose was a substantial factor in causing the
adequate latency period. She acknowledged that              asbestos-related disease, will suffice. Without
everyone is exposed to asbestos in the ambient air          proof that the Borg-Warner brake pads were a
and that Flores’s pulmonary function tests showed           substantial factor in bringing about his injuries,
mild obstructive lung disease, which was                    Flores’s negligence and strict liability claims
unrelated to asbestos exposure. The other expert            failed. The Supreme Court reversed the court of
testified that brake mechanics could be exposed to          appeals’ judgment and rendered judgment for
respirable asbestos either by grinding brake pads           Borg-Warner.
or blowing out accumulated dust in the brake
housing; most of the asbestos is destroyed by the           XXIV. OIL AND GAS
heat of friction, but some survived. He had not             A. Pooling Agreements
researched Borg-Warner products and did not                 1.     Wagner & Brown, Ltd. v. Sheppard,
have any specific knowledge about them. The                 198 S.W.3d 369 (Tex. App.—Texarkana 2006),
jury found in Flores’s favor, and Borg-Warner               pet. granted, 50 Tex. Sup. Ct. J. 1015 (August 24,
appealed. The court of appeals affirmed, holding            2007) [06-0845].
that there was legally sufficient evidence of                     Jane Sheppard owns a 1/8 mineral interest in
negligence.                                                 a 62.72-acre tract of land and executed a form oil
      The Supreme Court reversed the court of               and gas lease to C.W. Resources for a three year
appeals’ judgment and held that Flores failed to            term in exchange for 1/4 royalty. Wagner &
present evidence of substantial-factor causation.           Brown and C.W. Resources (Wagner) separately
The Court examined the Lohrmann “frequency,                 leased from third parties most of the remaining
regularity, and proximity” test, Lohrmann v.                7/8 mineral interest in the Sheppard Tract.
Pittsburgh Corning Corp., 782 F.2d 1156 (4th Cir.           Wagner pooled the Sheppard Tract with other
1986), but noted that those terms did not, in               leased tracts, creating the Landers Gas Unit. This
themselves, capture the emphasis Texas                      unit was comprised of a 116.65-acre pooled unit,
jurisprudence has placed on causation as an                 and two wells were drilled on this unit.
essential predicate to liability. The Court noted                 Six months after the Landers Unit was
that Restatement section 431’s “substantial                 established, the Sheppard Lease terminated,
factor” test had informed its causation analysis on         according to its terms, when Wagner failed to pay
several occasions. The Court also noted that some           Sheppard royalties under the 120-day clause
evidence of dose was critical to proving Flores’s           included in the lease. Upon discovering this
asbestosis claim. The Court held that the record            failure to timely pay Sheppard royalties, Wagner
established that mechanics in the braking industry          advised Sheppard’s attorney of the clerical error
could be exposed to respirable asbestos fibers.             and unsuccessfully sought to reinstate her lease.
But without more, this testimony was insufficient           Sheppard filed suit seeking damages and a
to establish that the Borg-Warner brake pads were           declaratory judgment that, as an unleased co-
a substantial factor in causing Flores’s disease, as        tenant, she is no longer bound by the agreement,
asbestosis appears to be dose-related. The record,          and is entitled to a full 1/8 share of production
however, revealed nothing about how much                    from the two wells on the Sheppard Tract.
asbestos Flores might have inhaled. The Court


                                                       53
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November 1, 2006 – October 31, 2007

      On a summary judgment motion, the trial                area of Keller’s residence, neglected to
court held that Sheppard’s mineral interest was no           satisfactorily maintain Keller, and interfered with
longer subject to the agreement. The case then               her progress and participation in the community
proceeded to a bench trial on damages and                    and with her family. The court appointed Alisa
Wagner’s right to deduct leasehold, land/legal,              Wuemling as successor guardian. Zipp appealed
and overhead expenses from Sheppard’s share of               the district court’s decision to the Tenth Court of
production. The trial court awarded Sheppard                 Appeals, but during the pendency of the appeal,
$395,749.53 in damages, subject to an offset of              Keller died of natural causes. As a result of
$168,559.85 for paid royalties and attorney’s fees.          Keller’s death, the court of appeals dismissed
The court of appeals affirmed the trial court’s              Zipp’s appeal as moot. On petition for review,
judgment in all respects.                                    Zipp argued the court of appeals erred in
      The Supreme Court granted Wagner’s                     dismissing her appeal as moot because: (1) there
petition for review and set oral argument for                remained a controversy between Zipp and
December 5, 2007.                                            Wuemling over who should wind up the affairs of
                                                             the estate; and (2) as a result of the district court’s
B. Railroad Commission Authority                             removal of her for cause, she had a legally
1. Seagull Energy E & P, Inc. v. R.R. Comm’n of              cognizable interest in guardian fees, attorney’s
Tex., 226 S.W.3d 383 (Tex. May 4, 2007) [03-                 fees, and costs.          See TEX . PROB . CODE
0364].                                                       §§ 665(e)(2), 668(1)-(2).
      The issue in this case was whether the statute               Wuemling argued that the issue of the
that granted the Railroad Commission authority to            guardianship of Keller’s person became moot with
regulate production of commingled oil and/or gas             Keller’s death and, as the current guardian, she
deposits included the authority to regulate drilling,        was the only person who should be charged with
and if so, whether the Railroad Commission could             the duty of preserving Keller’s estate. The real
consider the commingled deposits as though they              parties in interest, Wuemling reasoned, were not
were one reservoir when regulating drilling and              Zipp and Wuemling but Keller and her estate.
production in the commingled field. See TEX .                Reinstating Zipp as guardian, Wuemling
NAT . RES . CODE § 86.081. The Supreme Court                 contended, would result in needless duplication of
concluded that the Railroad Commission could                 effort and cost to the estate. Wuemling also
consider the commingled deposits as one reservoir            argued that Zipp waived her claim to fees and
when determining correlative rights and could                costs by failing to preserve error and that any
deny an exception to the well-spacing                        claim Zipp may have had to guardian fees was
requirements prescribed by the field rules unless            forfeited under the Probate Code when she was
there was proof of confiscation as to the                    removed for cause.
commingled reservoir as a whole. The Court                         The Supreme Court reversed and remanded
noted that section 86.081 had been amended after             the case to the court of appeals, holding that,
the case began as a result of the litigation and was         while the guardianship of Keller’s person ended
meant to clarify the scope of the Commission’s               with her death, Keller’s estate still had to be
authority. The Court further concluded that this             settled. The Court disagreed with Wuemling’s
application of the statute did not violate vested            contention that the real parties in interest were
property rights.                                             Keller and her estate. Instead, the Court stated
                                                             that, with Keller’s death, the parties with a
XXV.       PROBATE:          WILLS, TRUSTS,                  remaining interest in the dispute were Zipp,
ESTATES, AND GUARDIANSHIPS                                   Wuemling, and the estate; and the estate would be
A. Mootness                                                  served best by the person the courts deemed most
1. Zipp v. Wuemling, 218 S.W.3d 71 (Tex. March               qualified to settle the estate. Since there remained
9, 2007) [05-0731].                                          a dispute between Zipp and Wuemling over which
     The district court removed Cynthia Zipp as              one of them was most qualified to settle the estate,
guardian of the person and estate of Jewel W.                the Court concluded there existed a justiciable
Keller for cause, finding that she moved from the            controversy. See Weatherley v. Byrd, 552 S.W.2d


                                                        54
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November 1, 2006 – October 31, 2007

573, 574 (Tex. Civ. App.—Fort Worth 1977)                   C. Teachers Retirement System Benefits
(overruling appellant’s motion to declare the case          1. Holmes v. Kent, 221 S.W.3d 622 (Tex. April
moot after the ward’s death), rev’d, 566 S.W.2d             20, 2007) [04-0729].
292 (Tex. 1978) (reversing the court of civil                      When Linda Ann McWhorter retired from
appeals’ decision on the merits without addressing          her position as a teacher, she designated her then-
the mootness issue).                                        husband Tommy Joe Holmes as the beneficiary of
                                                            an optional annuity from the Teachers Retirement
B. Right of Survivorship                                    System of Texas (TRS). The annuity is governed
1. A.G. Edwards & Sons, Inc. v. Beyer,                      by a detailed statutory scheme limiting and
      S.W.3d      , 51 Tex. Sup. Ct. J. 20 (Tex.            specifying how and when a beneficiary
September 28, 2007) [05-0580].                              designation may be changed in favor of a new
      The issue presented in this case is whether           beneficiary and allowing TRS to prescribe forms
the Probate Code bars a beneficiary from seeking            for such alterations. Following her retirement,
ownership of joint account funds against the estate         McWhorter and Holmes divorced. McWhorter
of the deceased owner of the account when no                signed a form to re-designate her son, Alan Kent,
written agreement exists. Alicia Beyer and her              and his wife as beneficiaries of all of her
father, Federico Beyer, contacted an A.G.                   retirement benefits, and later submitted to TRS
Edwards representative to create a joint account            the final divorce decree divesting Holmes of any
with right of survivorship. A.G. Edwards agreed             right, title, interest, or claim in or to McWhorter’s
to create the account and took steps to do so.              TRS benefits. TRS notified McWhorter that the
After her father’s death, Alicia discovered that the        form was not the proper form, and that the
account had not properly been created, and that             language of the decree was inadequate. TRS
she did not have a survivorship interest in the             further suggested appropriate language, provided
account funds. Alicia sued A.G. Edwards for                 the forms for a change of beneficiary, and
negligently failing to properly create the account.         alternatively suggested that the beneficiary could
The trial court entered judgment on a verdict               be changed by submission of Holmes’s notarized
against A.G. Edwards and the court of appeals               consent in lieu of an altered divorce decree.
affirmed. The Supreme Court affirmed the                    McWhorter did nothing further before her death a
judgment against A.G. Edwards but reversed the              little over a year later. She left everything to Kent
court of appeals judgment as to attorneys’ fees.            in her will.
      The Court held that Alicia’s claim was not                   Following McWhorter’s death, TRS began
governed by Texas Probate Code section 439(a),              making annuity payments to Holmes. The Kents
which applies to right of survivorship accounts.            brought this action against Holmes seeking
Although the statute requires a written agreement           enforcement of the divorce decree to change the
as proof of the right of survivorship, Alicia’s             beneficiary and requesting a constructive trust on
claim was not that she was entitled to the account          the payments received and an injunction against
funds as the survivor to the account. Rather, her           future payments. The trial court granted summary
claim was that A.G. Edwards breached its duty by            judgment for Holmes. The court of appeals
failing to properly create an account with a right          agreed that McWhorter had not met the statutory
of survivorship. As such, she was allowed to                requirements to change the beneficiary of the
present evidence other than the written agreement           annuity, but also held that because the divorce
itself in order to prove her claim. The Court               decree divested Holmes of any right to the
reversed and remanded on the issue of segregation           annuity, her estate was entitled to a constructive
of attorney’s fees based on recoverable and                 trust unless McWhorter intended to give Holmes
unrecoverable claims.                                       the payments notwithstanding the decree. The
                                                            court remanded the case for a determination of
                                                            McWhorter’s intentions.
                                                                   The Supreme Court, in a per curiam opinion
                                                            without hearing oral arguments, rendered
                                                            judgment for Holmes, agreeing with the court of


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November 1, 2006 – October 31, 2007

appeals that McWhorter never met the statutory               XXVI. PROCEDURE—APPELLATE
requirements for a change of beneficiary because             A. Dismissal
she failed to submit the proper forms, and she               1.      Hood v. Wal-Mart Stores, Inc.,
failed to submit either Holmes’s notarized consent           216 S.W.3d 829 (Tex. February 23, 2007) [05-
or a divorce decree with appropriate language.               0902].
However, the Supreme Court disagreed with the                      In accord with its decision in Higgins v.
court of appeals that a constructive trust could be          Randall County Sheriff’s Office, 193 S.W.3d 898
imposed since it would circumvent the statutory              (Tex. 2006), the Supreme Court reversed the court
scheme, alter TRS’s statutory obligations, and               of appeals’ dismissal of Hood’s pro se appeal and
create unnecessary uncertainty and litigation                remanded to that court for further proceedings.
surrounding a decedent’s intentions.                         Under Higgins, Texas Rule of Appellate
                                                             Procedure 44.3 prohibits a court from dismissing
D. Will Construction                                         an appeal due to a formal defect or irregularity
1. In re Estate of Nash, 220 S.W.3d 914 (Tex.                without allowing reasonable time to cure the error.
April 20, 2007) [05-0538].                                   Although Hood did not pay the filing fee or file an
      In this will construction case, Shelley Tedder         affidavit of indigence as required by Texas Rule
sought a declaration that she was entitled to the            of Appellate Procedure 20.1(c)(1) when he first
estate of her former step-father, Marvin Nash.               filed his notice of appeal, Hood filed an affidavit
Nash divorced Tedder’s mother, Vicky Nash,                   of indigence within the ten days he was given to
approximately two years before his death. He                 pay the filing fee. The Court concluded that the
never changed the will he wrote some ten years               court of appeals erred in dismissing Hood’s
earlier which named Tedder as the contingent                 appeal.
beneficiary if Vicky did not survive him. Tedder
believed she was entitled to Nash’s estate because           B. Final Judgment
section 69 of the Probate Code, which provides               1.     Doe v. Pilgrim Rest Baptist Church,
that provisions in a will favoring a former spouse           218 S.W.3d 81 (Tex. March 9, 2007) [06-0686].
should be construed as if the former spouse failed                 This case involved the question of whether
to survive that testator, applies to the entire will.        an appeal was timely following a conditional
Nash’s heirs at law, on the other hand, believed             severance order. The Supreme Court reversed the
section 69 applied only to those will provisions             court of appeals’ judgment and remanded the case
that favored the former spouse and sought a                  to that court for further proceedings.
declaratory judgment that Tedder take nothing.                     Jane Doe, individually and as the next friend
      The trial court admitted Nash’s will to                of a minor child, sued Pilgrim Rest Baptist Church
probate and declared that Tedder was entitled to             and two other defendants. The trial court granted
Nash’s entire estate. Nash’s heirs at law appealed,          summary judgment for the Church and ordered
and the court of appeals reversed. The Supreme               that all claims against the Church be severed,
Court affirmed the court of appeals’ judgment.               renumbered, and restyled “upon compliance with
The Supreme Court held that section 69 of the                the District Clerk’s procedure.” The parties
Probate Code requires only those will provisions             agreed that the required procedure involved the
that favor a former spouse to be read as if she              payment of certain fees. Jane Doe paid those fees
predeceased the testator and the contingent                  123 days after the order was signed and filed her
bequest to Tedder did not favor a former spouse.             notice of appeal a week later. The court of
Because Vicky did not predecease Marvin, the                 appeals dismissed for want of jurisdiction because
contingent bequest did not become operative.                 the appeal was filed more than ninety days after
Therefore, Tedder did not take under the will and            the judgment was signed.
it instead passed to Nash’s heirs at law.                          The Supreme Court noted that the severance
                                                             of an interlocutory judgment generally makes it
                                                             final, but a court can condition severance on a
                                                             future event, such as the payment of fees. The
                                                             court of appeals interpreted the specified


                                                        56
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November 1, 2006 – October 31, 2007

condition to apply only to the renumbering and              the Station, and Mark McLellan, his supervisor,
restyling, not to the severance itself, but the             for allegedly breaching his employment contract.
Supreme Court saw no reason that the condition              Both Texas A&M and McLellan filed pleas to the
would not apply to the severance. The parties’              jurisdiction asserting sovereign immunity. The
agreement that the condition so applied was not             trial court denied the pleas to the jurisdiction.
determinative, but did reflect their understanding          The Supreme Court considered whether a plaintiff
of what the trial court did. The Court held that the        who, on appeal, loses a plea to the jurisdiction
appeal was timely and remanded the case to the              based on sovereign immunity is entitled to a
court of appeals.                                           remand for an opportunity to cure the
                                                            jurisdictional pleading defect. In addition, the
C. Jurisdiction                                             Court analyzed section 51.014(a) of the Texas
1. Ramos v. Richardson, 228 S.W.3d 671 (Tex.                Civil Practice and Remedies Code to determine
June 29, 2007) [06-0336].                                   whether appellate courts have jurisdiction to
      Armando Ramos, an inmate, and members of              consider a government official’s appeal of a trial
his family brought medical malpractice actions,             court’s denial of a plea to the jurisdiction based
pro se, against Dr. Ian Richardson and Valley               on sovereign immunity.
Baptist Medical Center. The trial court dismissed                 The Court held that Texas A&M’s sovereign
the actions for failure to comply with the expert           immunity from suit barred Koseoglu’s breach of
report requirements of section 74.351 of the Texas          contract claim. However, it also held that the case
Civil Practice and Remedies Code. The deadline              need not be remanded to allow Koseoglu to
to file notices of appeal was on March 21, 2005.            amend his pleadings. “[A] pleader must be given
Ramos and his family claimed Ramos delivered                an opportunity to amend in response to a plea to
signed notices of appeal to the prison’s outgoing           the jurisdiction only if it is possible to cure the
mailbox on March 9, 2005 for prison authorities to          pleading defect.” The Court concluded that
place in the United States mail, but the notices of         Koseoglu could not state a cause of action that
appeal were not stamped “filed” by the clerk’s              could survive Texas A&M’s sovereign immunity
office of the court of appeals until March 22,              and thus dismissed Koseoglu’s claim against
2005. The court of appeals dismissed the appeal,            Texas A&M. The Court also held that section
holding it was without jurisdiction because the             51.014(a)(8) allows a state official to bring an
notices of appeal were not timely filed.                    interlocutory appeal challenging the denial of a
      On appeal to the Supreme Court, Ramos and             plea to the jurisdiction and vests appellate courts
his family argued their notice of appeal was timely         with jurisdiction to hear those appeals.
filed under the “mailbox rule” because the notice           Accordingly, the Court reversed the judgment the
was placed in the prison mailbox prior to the filing        court of appeals and dismissed Koseoglu’s claim
deadline.     The Supreme Court agreed and                  against McLellan.
reinstated the appeal stating, “we have held on
more than one occasion that an inmate who does              3. Tex. Parks & Wildlife Dep’t v. E. E. Lowrey
everything necessary to satisfy timeliness                  Realty, Ltd., S.W.3d , 51 Tex. Sup. Ct. J. 19
requirements must not be penalized if the                   (Tex. September 28, 2007) [05-0157].
document is ultimately filed tardily because of an               E.E. Lowrey Realty sued the Texas Parks
error on the part of officials over whom the inmate         and Wildlife Department and two of its
has no control.”                                            employees, alleging negligence and breach of
                                                            contract claims relating to a fire that occurred at a
2.    Tex. A&M Univ. Sys. v. Koseoglu,                      storage facility Lowrey owned. TPWD and its
233 S.W.3d 835 (Tex. September 7, 2007) [05-                employees filed a joint plea to the jurisdiction
0321].                                                      asserting sovereign immunity which the trial court
     Sefa Koseoglu worked as a contract                     denied. The Supreme Court first considered
employee at the Texas Engineering Experiment                whether the Texas Civil Practice and Remedies
Station, a division of the Texas A&M University             Code authorizes interlocutory review of a state
System. Koseoglu sued the University System,                entity’s jurisdictional plea on claims brought


                                                       57
Supreme Court Update
November 1, 2006 – October 31, 2007

against government officials in their official               sued Dresser-Rand to recover for the damage
capacity. Relying on Texas A&M University                    caused by the impeller failures. A jury assessed
System v. Koseoglu, ___ S.W.3d ___, 50 Tex. Sup.             the damages at $3.6 million and apportioned 80%
Ct. J. 1213 (Tex. 2007), the Court held that the             of the fault to Dresser-Rand. The court of appeals
code vests appellate courts with jurisdiction to             reversed the trial court’s judgment, holding that
consider a government employee’s interlocutory               the economic loss rule barred recovery because
appeal of a trial court’s denial of a plea to the            (1) the compressor was the subject of the relevant
jurisdiction. Therefore, the Court dismissed                 contract of sale between the parties and therefore
Lowrey’s claims against the TPWD employees.                  the relevant product for purposes of the economic
      The Court then considered whether a                    loss rule; (2) damage to the compressor itself was
plaintiff, whose plea to the jurisdiction based on           economic damage recoverable only through a
sovereign immunity was denied, is entitled to a              contractual breach of warranty cause of action;
remand for an opportunity to cure the                        and (3) the claim for damage to the compressor,
jurisdictional pleading defect. The Court held that          whether caused by original or replacement parts,
Lowrey, who did not obtain legislative consent to            was barred when the statute of limitations ran on
sue, could not pursue a breach of contract suit              claims arising from breaches based on the original
against the State. With regard to Lowrey’s                   1975 contract for sale of the compressor.
negligence claims, the Court concluded that                        The Supreme Court reversed the court of
Lowrey failed to establish a waiver of sovereign             appeals’ judgment. It held that Dresser-Rand
immunity for property damage arising from the                failed to preserve error on the economic loss rule
use of motor-driven vehicles or equipment. Again             by failing to object to a jury charge question that
citing Koseoglu, the Court held that merely                  asked the jury to consider all damages without
pleading more facts in support of his claims would           excluding damages to the product itself. The jury
not overcome TPWD’s immunity from suit.                      was instructed to consider the cost of repairs “to
Accordingly, the Court dismissed Lowrey’s claims             restore the Equistar Chemicals’ ethylene plant to
against TPWD.                                                the condition it was in immediately prior to the
                                                             occurrence(s) in question.” Thus, the question did
D. Preservation of Error                                     not distinguish damages to the product itself,
1. Equistar Chems., L.P. v. Dresser-Rand Co.,                which would not be recoverable under the
    S.W.3d , 50 Tex. Sup. Ct. J. 727 (Tex. May               economic loss rule, and damages to surrounding
4, 2007) [04-0121].                                          property, which would be recoverable. Dresser
      The primary issue in this case was whether             did not object to the damages question. If Dresser
the court of appeals erred in concluding that the            believed that the jury charge presented an
economic loss rule barred product-liability                  improper measure of damages, it was required to
damages awarded by the trial court. Because the              timely object and make the trial court aware of its
economic loss rule argument was not preserved in             complaint in order to preserve error for appeal.
the trial court, the Supreme Court held that the             Because there was no objection to the charge, the
court of appeals erred in reversing the trial court’s        Supreme Court measured the damages by the
judgment on that basis.                                      question and instruction given and concluded that
      In the mid 1970s, Equistar Chemicals bought            there was legally sufficient evidence to support
two gas compressors from Dresser-Rand                        the verdict.
Company. Impellers, which resemble large fan
blades, are essential parts of the compressors.              E. Reduction of Damages on Appeal
Dresser-Rand installed new impellers over the                1. Barker v. Eckman, 213 S.W.3d 306 (Tex.
years to improve the performance of the gas                  December 1, 2006) [04-0194].
compressors. In April 1999, one of the impellers                  The primary issue in this case was whether a
failed, causing major damage to the compressor,              case must be remanded for a new trial as to
its turbine and adjacent parts of the plant. A               attorney’s fees when the amount of actual
replacement impeller subsequently failed in May              damages is significantly reduced on appeal
1999, again causing extensive damage. Equistar


                                                        58
Supreme Court Update
November 1, 2006 – October 31, 2007

because of trial court error. The Supreme Court              before the court of appeals and thus could not
held that remand was necessary.                              determine the validity of the permit.
      The trial court awarded Eckman $111,983 for
breach of a bailment contract. On appeal, the                G. Standards of Review
court of appeals reduced the award to $16,180,               1. Goodyear Tire & Rubber Co. v. Mayes,
concluding that the remaining damages were                      S.W.3d , 50 Tex. Sup. Ct. J. 886 (Tex. June
barred by limitations. However, the court of                 15, 2007) [04-0993].
appeals did not reduce the attorney’s fee award.                   In this case, the Supreme Court corrected the
      The Supreme Court reversed the court of                court of appeals’ misapplication of the proper
appeals’ judgment and remanded the case to the               standard of review when considering evidence
trial court for reconsideration of attorney’s fees.          with a motion for summary judgment. Here, the
The Court held that a review of the original jury            summary judgment record contained
finding as to attorney’s fees could not afford the           uncontraverted evidence that an employee, when
Barkers the factual sufficiency review to which              he was not at work, awoke at 3:00 a.m. and drove
they were entitled—a factual sufficiency review of           a company truck to a nearby convenience store.
a jury finding made in consideration of the correct          During the trip, the employee fell asleep at the
damages amount. The Court concluded that under               wheel and hit the plaintiff’s truck head-on. There
such circumstances, the error is reversible unless           was no conflicting evidence to raise a genuine
the appellate court is reasonably certain that the           issue of material fact over whether, at the time of
jury was not significantly influenced by the                 the accident, the employee was acting in
erroneous amount of damages it considered. The               furtherance of his employer’s business. The court
Court noted that not every appellate adjustment to           of appeals erred in considering only the evidence
the damages will require reversal of the attorney’s          favorable to the plaintiff while ignoring
fee award. In this case, however, considering both           undisputed evidence in the record that cannot be
the absolute value of the difference between the             disregarded. Instead, the court of appeals should
erroneous and correct amounts of damages, and                have considered whether reasonable and fair-
the fact that the correct damages were one-seventh           minded jurors could differ in their conclusions in
of the erroneous damages, the Court was not                  light of all of the evidence presented. The Court
reasonably certain that the jury was not                     reversed the court of appeals’ judgment and
significantly affected by the error. Accordingly,            rendered judgment that the plaintiff take nothing.
the trial court’s error was harmful.
                                                             2. Tex. Mut. Ins. Co. v. Ledbetter, 192 S.W.3d
F. Scope of Review                                           912 (Tex. App.—Eastland 2006), pet. granted, 51
1. BFI Waste Sys. of N. Am., Inc., v. N. Alamo               Tex. Sup. Ct. J. 2 (September 28, 2007) [06-
Water Supply Corp., S.W.3d , 51 Tex. Sup. J.                 0814].
54 (Tex. October 12, 2007) [06-0602].                              The issues presented in this case are whether
      Various local governmental and private                 the standard of review for a nonsuit is abuse of
entities sued a landfill operator, alleging breach of        discretion or de novo and whether a trial court
a prior settlement agreement, and won a verdict              erred by striking a petition in intervention. After
and injunction. The court of appeals reversed the            Charles Ledbetter was fatally electrocuted at
injunction but awarded damages under the verdict.            work, Texas Mutual, Ledbetter’s employer’s
The court, however, also addressed an issue                  workers’ compensation carrier, began paying his
admittedly not raised in the instant litigation              wife and children monthly benefits. Ledbetter’s
concerning a permit issued by one of the                     estate and family sued his employer for
governmental entities in connection with the prior           negligently causing his death and ultimately
agreement. In a per curiam opinion, the Supreme              reached a settlement agreement.
Court denied the parties’ petitions but, noting one                At the settlement hearing, when Texas
party’s concern that the court of appeals’ footnote          Mutual filed a petition in intervention to secure
could prejudice future litigation, specifically              subrogation rights, the plaintiffs moved to nonsuit
stated that the footnote was not within the issues           all the plaintiffs except the estate and moved to


                                                        59
Supreme Court Update
November 1, 2006 – October 31, 2007

strike Texas Mutual’s petition. The trial court             Hatfield in Florida to enforce the non-compete
granted the motion to nonsuit and struck Texas              covenants. Hatfield subsequently filed suit in
Mutual’s petition. The court of appeals affirmed            Texas. The Texas trial court declined to dismiss
the trial court’s granting of the nonsuit, but              or stay the action and enjoined AutoNation from
reversed the trial court’s striking of Texas                pursuing the Florida suit. The court of appeals
Mutual’s petition in intervention. Both parties             denied AutoNation mandamus relief, holding that
petitioned the Supreme Court for review. The                the enforcement of non-compete covenants was a
Court granted the petitions for review and heard            matter of fundamental Texas public policy.
oral argument on November 15, 2007.                               The Supreme Court conditionally granted
                                                            AutoNation’s petition for mandamus because
H. Waiver                                                   mandamus is appropriate to enforce forum
1. Ontiveros v. Flores, 218 S.W.3d 70 (Tex.                 selection clauses, and no precedent or statute
March 2, 2007) [06-0607].                                   required suit to be brought in Texas when a
      Flores sued Ontiveros for fraudulent transfer,        forum-selection clause mandates venue elsewhere.
breach of fiduciary duty, tortious interference with        The Court reasoned that deferring to the first-filed
a contract, conspiracy, conversion, and fraud. The          Florida action honors the parties’ contractual
trial court granted Ontiveros’s motion for                  agreement and also comports with principles of
summary judgment as to all the causes of action.            state-to-state comity.
Flores appealed but complained only about the                     Justice O’Neill concurred, writing that had
summary judgment granted on his claims for                  there been a clear showing that application of the
fraudulent transfer and breach of fiduciary duty.           forum-selection clause would have undermined
The court of appeals reversed and remanded as to            Texas public policy, she might have agreed with
all Flores’s claims. Because Flores did not assert          the court of appeals’ analysis. The mere
error regarding his claims for tortious interference        indication, however, that the Florida court would
with a contract, conspiracy, conversion, and fraud,         apply Florida law did not justify Texas courts’
the Supreme Court held that he had waived them              interference with the contract.
and the court of appeals erred by reversing the
summary judgment on them. The Supreme Court                 B. Discovery
affirmed the trial court’s judgment that he take            1. In re Allied Chem. Corp., 227 S.W.3d 652
nothing on those claims.                                    (Tex. June 15, 2007) [04-1023].
                                                                   In this mass tort case, the Supreme Court
XXVII. PROCEDURE—PRETRIAL                                   detailed the limits of a trial court’s discretion to
A. Choice of Law                                            postpone discovery responses until shortly before
1. In re AutoNation, Inc., 228 S.W.3d 663 (Tex.             trial.
June 29, 2007) [05-0311].                                          About 1900 plaintiffs sued over 30
     In this employment case, the Supreme Court             defendants for injuries arising from exposure to a
decided that non-competition covenants governing            combination of pesticides produced or stored at
a Texas resident employed in Texas did not need             nearby facilities. The defendants include the
to be construed by Texas courts and according to            facilities’ owners, operators, and remediators as
Texas law, where forum-selection and choice-of-             well as suppliers and manufacturers of raw
law clauses called for a Florida venue and Florida          materials used at the facilities. Allied Chemical
law.                                                        served the plaintiffs with interrogatories asking
     Garrick Hatfield worked for a Texas                    each plaintiff to provide information that showed
subsidiary of AutoNation, Inc., a Florida-based             a causal connection between the alleged injuries
automobile dealership.          His employment              and Allied Chemical’s products. Allied Chemical
agreements contained non-compete covenants and              sought mandamus relief from plaintiffs’ failure to
forum-selection and choice-of-law clauses calling           answer the interrogatories and from the trial
for a Florida venue and Florida law. In January             court’s order consolidating five plaintiffs and
2005, Hatfield resigned with the intention of               setting the case for trial. After the Supreme Court
joining a Texas competitor. AutoNation sued


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Supreme Court Update
November 1, 2006 – October 31, 2007

granted a stay, the trial court, at the plaintiffs’          damaged vehicle; and (4) legal instruments
request, withdrew the consolidation order.                   documenting Allstate's status as a corporation and
      The Court held that mandamus was proper                its net worth. The insurer and its agent objected
even though the plaintiffs were no longer                    to the discovery and moved for summary
consolidated because their failure to answer the             judgment, claiming the plaintiffs had no direct
interrogatories was still at issue. The Court                action against a third party’s insurer. The trial
determined that the plaintiffs had the burden to             court denied summary judgment, overruled their
plead and prove they were injured and by whom.               objections, and ordered them to respond. The
Plaintiffs cannot file suit against numerous                 court of appeals denied mandamus relief without
defendants, allege a “toxic soup” caused their               explanation.
injuries, and demand that defendants prove                         The Supreme Court conditionally issued a
otherwise. As a result, the Court vacated the trial          writ, directing the trial court to vacate its
court order setting any of the plaintiffs’ claims for        discovery order and reconsider the scope of
trial until the defendants had an opportunity to             permissible discovery in light of its opinion. The
prepare for trial after learning which plaintiffs            Court advised that discovery is a tool for focusing
could connect Allied Chemical products to their              the trial process, not a weapon for making
injuries.                                                    litigation more expensive. Discovery orders may
      Chief Justice Jefferson, joined by Justice             not be overly broad and trial courts must make an
O’Neill, Justice Wainwright, and Justice Johnson             effort to impose reasonable discovery limits.
dissented arguing the case was moot. After the
trial court deconsolidated the case, the plaintiffs          3. In re Bexar County Criminal Dist. Attorney’s
supplemented their discovery responses to identify           Office, 224 S.W.3d 182 (Tex. May 4, 2007) [05-
causation witnesses.         Since no disputed               0613].
controversy remained, the dissent objected to the                   David Crudup filed a malicious prosecution
Court’s opinion. Justice Wainwright, in a separate           lawsuit against Cynthia Blank and her son, who
dissenting opinion noted that Allied Chemical                had accused Crudup of threatening to kill him.
could have, but did not, filed a motion for                  The Bexar County Criminal District Attorney’s
summary judgment or motion to compel, which                  Office (DA’s Office) had dropped terroristic
would have properly put the dispute for the Court.           threat charges against Crudup after the Blanks
      Justice Hecht, in a concurring opinion,                refused to testify. The DA’s Office turned over
responded to the dissent’s argument that the case            its prosecution file to Crudup for use in the civil
was moot. He asserted that while some plaintiffs             trial, but it filed a motion for protective order and
had filed supplemental discovery responses, the              to quash a subpoena requesting that three of its
remaining 1,888 plaintiffs had not.                          employees testify. The trial court granted the
                                                             motion. The court of appeals issued a writ of
2.    In re Allstate County Mut. Ins. Co.,                   mandamus for Crudup, ordering the trial court to
227 S.W.3d 667 (Tex. June 15, 2007) [06-0878].               vacate its order. The court held that Crudup had
      After a $13,000 settlement offer failed, a             a substantial need for testimony to prove an
driver and a passenger sued the other vehicle’s              essential element of malicious prosecution and
driver, her insurance carrier, and the insurer’s             that the DA’s Office had not met its burden of
adjuster. The plaintiffs made eighty-nine requests           proof to show that the testimony sought was
for production, fifty-nine interrogatories, and              protected by the work product privilege.
sixty-five requests for admission. Among other                      In an opinion authored by Justice Willett, the
things, they asked for: (1) transcripts of all               Supreme Court granted a conditional writ of
testimony ever given by any of the insurer’s agents          mandamus to the court of appeals to vacate its
on the topic of insurance; (2) every court order             writ and to reinstate the trial court’s order. The
finding the insurer wrongfully adjusted the value            Court held that DA testimony was not necessary
of a damaged vehicle; (3) personnel files of every           to prove the procurement prong of malicious
one of the insurer’s employees that had ever been            prosecution. It then held that the DA’s work in
found to have wrongfully assessed the value of a             preparing the criminal prosecution against Crudup


                                                        61
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November 1, 2006 – October 31, 2007

constituted work product, so he could not compel           reviews various reports and speaks to others about
testimony regarding the DA’s mental impressions,           the company’s activities. Furthermore, BP argues
thought processes, and procedures. Further, the            the parties signed a binding Rule 11 agreement in
DA’s Office did not waive its work-product                 which the plaintiffs agreed not to depose Browne.
privilege against testifying by producing the              The plaintiffs argue that the deposition should go
prosecution file. Given the nature of what Crudup          forward because Browne “arguably has unique or
sought and his inability to show both “substantial         superior personal knowledge of any discoverable
need” and “undue hardship” under Rule of Civil             information,” the standard for apex depositions.
Procedure 192.5(b)(2), he could not force DA               They claim he had personal oversight of safety
personnel to discuss their mental processes or             issues at the refinery, he visited the accident site
other case-related communications and                      the day after it occurred, and he has made public
preparation, even if the subpoenaed testimony              statements about the accident; thus he has
related to documents already produced                      personal and unique information. The plaintiffs
      Justice Willett wrote a separate concurrence         further argue that the Rule 11 agreement permits
to note the policy interests served by limiting the        Browne’s deposition, and alternatively, the trial
scope of the work-product waiver resulting from            court did not abuse its discretion in refusing to
the DA’s disclosure to the documents themselves,           enforce the agreement. The Supreme Court
not to live testimony concerning the thoughts and          granted argument on this petition for writ of
communications underlying each document’s                  mandamus and heard oral argument on October
contents.                                                  18, 2007.
      In a dissent joined by two justices, Justice
Johnson wrote that the work-product privilege              5. In re Christus Spohn Hosp. Kleberg, 222
could not be asserted to quash a subpoena duces            S.W.3d 434 (Tex. April 27, 2007) [04-0914].
tecum. He acknowledged that some of the                          In this case the Supreme Court considered
testimony Crudup sought might be privileged, but           whether privileged documents inadvertently
much relevant, non-privileged evidence could be            disclosed to a party’s own testifying expert are
adduced via testimony.                                     discoverable under Texas Rule of Civil Procedure
      Justice Green did not participate in the             192.3(e)(6), which mandates disclosure of all
decision.                                                  documents provided to a party’s testifying expert,
                                                           or whether they are instead subject to Texas Rule
4. In re BP Prods. N. Am., Inc., 2007 WL                   of Civil Procedure193.3(d), which provides that a
1228614 (Tex. App.—Houston [1st Dist.] 2007),              party who inadvertently produces privileged
argument granted on pet. for writ of mandamus,             material does not waive a claim of privilege if a
50 Tex. Sup. Ct. J. 910 (June 22, 2007) [07-0119].         party asserts the privilege within ten days of
      This is a mandamus proceeding in which               learning of the inadvertent disclosure.
relator, BP Products North America, Inc., seeks                  When Mona Palmer notified Christus Spohn
relief from a trial court order denying BP’s motion        Hospital Kleberg of her intent to file a health care
to prevent the apex deposition of BP’s CEO, John           liability claim, the hospital’s internal investigator,
Browne. The underlying action arises from an               Sandra Northcutt, conducted an investigation.
explosion at the BP Texas City refinery that               That investigation generated a number of
resulted in fifteen fatalities and numerous other          documents which formed the basis of this
injuries. Hundreds sued and the cases were                 mandamus action.           The documents were
consolidated for discovery purposes.                       mistakenly sent to the hospital’s only testifying
      BP argues that the apex doctrine is not              expert, Nurse Kendra Menzies. Palmer’s counsel
satisfied because Browne has only second-hand              sought to depose Menzies, and issued a subpoena
knowledge concerning the accident provided to              duces tecum requesting all documents furnished to
him by others whom the plaintiffs have already             and reviewed by Menzies in connection with her
deposed. Browne should not be deposed simply               consultation in the lawsuit. Menzies brought the
because he directs broad company policies,                 Northcutt documents to the deposition. The
accepts ultimate responsibility for decisions,             hospital sought to recover the documents


                                                      62
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November 1, 2006 – October 31, 2007

mistakenly produced to Menzies pursuant to Rule             of confidentiality. Because the protective order
193.3(d), known as the “snap-back” provision. At            extended to “trade secrets and other confidential
the hearing on the issue, Nurse Menzies testified           research, development and commercial
that she had not read the documents but did                 information,” the Court declined to apply a trade
“glance” at them. The trial court then overruled            secret analysis to the documents. Finally, the
the hospital’s claim of privilege, and the court of         Court held that the disclosures to the media from
appeals denied the hospital’s petition for writ of          the Florida trial court did not waive Ford’s and
mandamus.                                                   Volvo’s confidentiality.
      The Supreme Court held that the inadvertent
nature of the production in this case preserved the         7.     In re SCI Tex. Funeral Servs., Inc.,
privilege under Rule 193.3(d) and entitled the                 S.W.3d , 51 Tex. Sup. Ct. J. 52 (Tex. October
hospital to recover the documents upon realizing            12, 2007) [06-0385].
its mistake, provided that hospital’s designated                  This case involves a discovery dispute in a
expert does not testify at trial. However, as long          potential class-action suit when the class had not
as the hospital stands upon its testifying expert           yet been certified. Prior to class certification, the
designation, Rule 192’s plain language and                  trial court ordered class-wide discovery,
purpose and the policy considerations that                  sanctioned SCI for inadequate discovery
surrounded its amendment, compel the conclusion             responses, and barred SCI from contesting the
that the documents may not be snapped back.                 plaintiffs’ method of calculating damages. The
Because the hospital indicated an intent to rely            Supreme Court recognized that much of the class-
upon the expert to whom the documents were                  wide discovery was no longer relevant and the
disclosed, the Court denied the hospital’s petition         sanctions were incongruous because the court of
for writ of mandamus without prejudice to any               appeals (in a separate appeal) reversed
right the hospital might have to designate another          certification and held that the plaintiffs had no
testifying expert and recover the privileged                cause of action against SCI for damages.
documents.                                                  Nevertheless, the Court held that under the proper
                                                            class-wide, precertification discovery rule, trial
6. In re Ford Motor Co., 211 S.W.3d 295 (Tex.               courts must limit precertification discovery to the
December 22, 2006) [05-0696].                               particular issues governing certification in each
      As part of wrongful death litigation                  case. In this case, the question of law at issue,
stemming from an SUV rollover, relators Ford                whether private parties have standing to assert
Motor Co. and Volvo Car Corp. entered into an               violations of the funeral disclosure rules, did not
agreed protective order with real parties in                require the broad discovery the plaintiffs sought
interest, the Marroquins, to maintain the                   (200,000 funeral service contracts and 2.5 million
confidentiality of numerous Volvo documents. In             invoices). As a result, the Court held that the trial
similar litigation in Florida, a trial court clerk          court abused its discretion by compelling
released copies of those documents, despite a               discovery that was not narrowly tailored to the
similar protective order; these documents were              relevant dispute.
reported in the media as well as posted on a                      The Court also addressed whether mandamus
federal government web site. The Texas trial                relief should be denied based on laches because
court granted the Marroquins’ motion to deem the            SCI waited nearly six months after the trial court’s
documents nonconfidential under a provision in              final sanctions before seeking mandamus relief.
the protective order that denied confidentiality for        The Court held SCI’s explanations for
documents that were released to the government.             waiting—that it took three months to get the
The court of appeals denied the writ of mandamus.           reporter’s record of the numerous discovery
      The Supreme Court of Texas conditionally              hearings, and three more months to brief both the
granted the writ of mandamus. It reviewed the               discovery and the certification appeals so they
protective order de novo and held that the contract         could be filed together (although in separate
did not permit disclosure to the government by a            proceedings)—were sufficient to establish that
third party to destroy Ford’s or Volvo’s privilege          SCI had not “slumber[ed] on [its] rights.”


                                                       63
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November 1, 2006 – October 31, 2007

Accordingly, the Court conditionally granted the               D. Sanctions
writ of mandamus and directed the trial court to               1. Low v. Henry, 221 S.W.3d 609 (Tex. April 20,
vacate its deemed factual findings and discovery               2007) [04-0452].
orders in light of the court of appeals’                             In this case, the Court addressed the
decertification.                                               imposition of a monetary penalty under chapter 10
                                                               of the Texas Civil Practice and Remedies Code.
C. Forum                                                       Chapter 10 requires a pleading’s signatory to
1. In re Gen. Elec. Co., 2007 WL 625010 (Tex.                  certify that he or she conducted a reasonable
App.—Houston [1st Dist.] 2007), argument                       inquiry into the allegations and concluded that
granted on pet. for writ of mandamus, 50 Tex.                  each allegation or other factual contention in the
Sup. Ct. J. 910 (June 22, 2007) [07-0195].                     pleading has, or is likely to have, evidentiary
      Austin Richards allegedly contracted                     support.
asbestosis from long-term exposure to asbestos                       Thomas Henry filed a wrongful death suit on
through his job as a mason and through working                 behalf of his client a few days before the
on his home. He is a life-long resident of Maine,              limitations deadline. The petition primarily
worked exclusively in Maine, was diagnosed with                alleged product defect claims involving a
the disease in Maine, and has treating physicians              defective drug but also included some medical
in Maine. He has never visited Texas, has no                   malpractice claims. Many of the allegations
relatives or acquaintances in Texas, owns no                   against two physicians involved the prescription
property in Texas, and was not exposed to                      and provision of the drug to the decedent. On the
asbestos in Texas. He nevertheless filed suit in               same day Henry filed the suit, he moved to
Texas against numerous manufacturers of                        withdraw. The doctors answered the petition,
asbestos-containing products; three of the twenty-             presented undisputed evidence that neither of
three manufacturers are headquartered in Texas,                them prescribed the drug to the patient, and
thus precluding removal to federal court.                      moved for sanctions. The trial court ordered
      Three of the defendants moved for dismissal              Henry to pay a $50,000 penalty for violating
based on forum non conveniens pursuant to the                  Chapter 10. An en banc court of appeals reversed
newly-amended Texas Civil Practice and                         in a split decision, holding in part that because
Remedies Code section 71.051. They argued that                 part of the pleading’s alternative allegations met
Maine was a more appropriate forum for this                    the requirements of Chapter 10 and because
action than Texas. The trial court denied the                  alternative pleadings are permitted by the Texas
motion, writing in a letter to the parties that Texas          Rules of Civil Procedure, sanctions under Chapter
was a better forum in the interest of justice. The             10 were unjustified. The court of appeals also
trial court reasoned that if Richards filed suit in            held that the trial court’s findings were not
Maine, the defendants would most likely remove                 specific enough to meet Chapter 10’s
to federal district court based on diversity, and              requirements.
that court would then transfer the case to the                       The Supreme Court reversed the court of
notoriously slow-moving federal asbestos MDL                   appeals’ judgment and held that under Chapter 10
court. Because Richards has only a short time to               the signer of a pleading or motion certifies that
live, and because the defendants would not waive               each claim, allegation, and denial is based on the
their right to remove to federal court, the trial              signer’s best knowledge, information, and belief
court ruled that the interests of justice dictated that        after reasonable inquiry. “Group” or alternative
Richards’ case could go to trial swiftly only in               pleadings do not relieve the party from meeting
Texas. On the relators’ motion for rehearing, the              Chapter 10’s express requirements. Finally, the
trial court vacated its earlier order but still denied         amount of the penalty for a violation of Chapter
the motion without listing grounds.                            10 “must be limited to what is sufficient to deter
      The court of appeals refused to grant                    repetition of the conduct or comparable conduct
mandamus relief. The Supreme Court granted                     by others similarly situated” and should be guided
argument on the petition for writ of mandamus                  by a list of nonexclusive factors, which includes
and heard argument on November 14, 2007.                       the costs and fees incurred. The Court concluded


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that the trial court was within its discretion to           reversed the court of appeals’ judgment and
award sanctions under Chapter 10 but remanded               remanded to the trial court.
the case in the interest of justice to allow the
parties to present evidence responsive to the               2. Prouxl v. Wells, S.W.3d , 50 Tex. Sup. Ct.
enumerated guidelines and to allow the trial court          J. 1188 (Tex. August 1, 2007) [06-0258].
to consider the amount of the penalty imposed in                  In this case, the court of appeals held that
light of the Court’s opinion.                               limitations barred Denis Prouxl’s suit against
                                                            Michael Wells because, as a matter of law, Prouxl
E. Service of Citation                                      was not diligent in serving Wells with process.
1. Hubicki v. Festina, 226 S.W.3d 405 (Tex. June            The Supreme Court reversed, holding that the
1, 2007) [05-0357].                                         summary judgment evidence failed to
       In this case, the trial court authorized             conclusively establish that the plaintiff did not
substituted service under Texas Rule of Civil               exercise diligence in effectuaing service.
Procedure 106(b) by first class mail and by                       The Court explained that, when a defendant
certified mail, return receipt requested, on Frank          seeks summary judgment based upon untimely
Maryan Hubicki at a post office box associated              service, the burden is initially on the plaintiff to
with a house he owned in Mexico, Casa                       explain the delay in service. If the plaintiff
Tranquilidad. Hubicki did not answer, and the               provides an explanation, the defendant is not
trial court rendered a default judgment against him         entitled to summary judgment unless the
for $2,302,000 in actual damages, $4,000,000 in             defendant presents conclusive evidence that the
punitive damages, $37,210.12 in prejudgment                 plaintiff’s explanation is insufficient to establish
interest and $37,000 in attorney’s fees. The trial          diligence. The Court held that Wells had not met
court authorized the alternative service after the          that burden because Prouxl had presented
plaintiff, Festina, had unsuccessfully attempted            evidence of more than thirty attempts to serve
service by certified mail as provided by Rule               Wells over a nine-month period between the time
106(a)(2). Festina’s motion seeking alternative             suit was filed and the time Prouxl finally secured
service was supported by an affidavit from its              substituted service on Wells. The Court held that
process server attesting that Hubicki was                   the short periods of delay that Prouxl did not
“currently in Mexico and can usually be found” at           explain were not comparable to those in other
Casa Tranquilidad. After the default judgment               cases in which a plaintiff’s lack of diligence was
was rendered, Hubicki filed this restricted appeal,         established as a matter of law. Accordingly, the
arguing that error was apparent on the face of the          Court reversed the court of appeals’ judgment and
record because it failed to demonstrate that the            remanded to the trial court.
alternative service was reasonably effective to
give him notice of the suit as Rule 106(b)(2)               F. Standing
requires.                                                   1. S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304
       The Supreme Court agreed. The Court noted            (Tex. April 27, 2007) [05-0855].
that, although the process server’s affidavit stated              At issue in this case is whether a group of
that Hubicki was “currently” in Mexico, Festina             Kingsville residents have standing to sue South
did not attempt service until almost a month after          Texas Water Authority (STWA). Romeo Lomas,
the affidavit’s date. The Court also observed that          individually, and other City of Kingsville
Festina’s petition alleged that Hubicki had a               residents organized as a private non-profit
residence address in Dallas. Consequently, the              association under the name WATER, and brought
Court concluded that there was no evidence that             suit against STWA.         Lomas and WATER
Hubicki was in Mexico when Festina attempted                contended the rates charged under a contract
service. The Court held that, as a matter of law,           between the City of Kingsville and STWA are
Festina failed to establish that alternative service        excessive and discriminatory, causing Kingsville
at Casa Tranquilidad was reasonably calculated to           ratepayers to bear a disproportionate percentage
provide Hubicki with notice of the proceedings in           of the operating expense of service compared to
time to answer and defend. The Court therefore              other users of STWA services. Lomas and


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WATER asserted standing as third-party                      curiam opinion, the Supreme Court pointed to two
beneficiaries of the water-supply contract,                 prior opinions in which the Court indicated that
claiming the contract was intended to provide a             the two-year statute of limitations governs unjust
direct benefit to the citizens of Kingsville. They          enrichment claims. Relying on this precedent, the
also contended they had standing to bring suit as           Court reversed the judgment of the court of
consumers and taxpayers. WATER additionally                 appeals and affirmed the trial court’s judgment.
asserted associational standing. Finding neither
plaintiff had standing, the trial court granted             2. Exxon Corp. v. Emerald Oil & Gas Co.,
summary judgment in STWA’s favor. The court                 180 S.W.3d 299 (Tex. App.—Corpus Christi
of appeals reversed in part, holding that Lomas             2005), pet. granted, 50 Tex. Sup. Ct. J. 151
had individual standing to pursue monetary and              (December 4, 2006) [05-1076].
declaratory relief, WATER had associational                       After several years of leasing land for oil and
standing to pursue declaratory relief, and both             gas production, Exxon terminated its lease and left
parties had standing as third-party beneficiaries of        the property. The royalty owners subsequently
the water-supply contract.                                  leased the land to Emerald Oil & Gas, which
      The Supreme Court reversed and held that              encountered obstructions and other difficulties
the plaintiffs failed to meet the requirements              when trying to reenter the wellbores. The royalty
necessary to establish standing under any of the            owners and Emerald sued Exxon and alleged
theories they asserted. The contract does not               numerous causes of action, including common law
mention Lomas, WATER, or residents of the City              waste, statutory waste, negligent
of Kingsville in general other than to specify the          misrepresentation, tortious interference, and fraud
water’s intended use for sale to municipal and              based on the filing of false reports with the Texas
industrial customers. The mere description of a             Railroad Commission. After granting summary
product’s intended use cannot confer third-party-           judgment in favor of Exxon on some claims, the
beneficiary status on intended users. Also, Lomas           trial court rendered judgment on a jury verdict in
did not suffer an injury peculiar to himself as all         the royalty owners’ favor, but awarded Emerald
the City residents suffered the same harm, nor did          nothing. The court of appeals affirmed the royalty
Lomas fit within the limited exception to the               owners’ verdict but reversed and remanded for
particularized-injury rule that confers standing on         Emerald’s fraud, negligent misrepresentation, and
taxpayers who seek injunctive relief to prevent the         tortious interference claims.
illegal expenditure of public funds. Finally,                     Exxon argues that almost all of the royalty
because neither Lomas nor any other WATER                   owners’ and Emerald’s claims are barred by the
member demonstrated individual standing to                  statute of limitations, and that neither the
contest the water-supply contract, WATER lacked             discovery rule nor fraudulent concealment tolled
associational standing to sue on behalf of its              the limitations period. Exxon further argues that
members.                                                    fraudulent inducement cannot be shown in this
                                                            case. The Supreme Court granted Exxon’s
G. Statute of Limitations                                   petition for review and heard oral argument on
1. Elledge v. Friberg-Cooper Water Supply                   February 13, 2007.
Corp., S.W.3d , 50 Tex. Sup. Ct. J. 1060 (Tex.
August 24, 2007) [06-0677].                                 3. Ford v. Exxon Mobil Chem. Co., S.W.3d ,
     Friberg-Cooper Water Supply Corp. sued                 50 Tex. Sup. Ct. J. 1191 (Tex. August 31, 2007)
Elledge on an unjust enrichment claim more than             [06-0293].
two years, but less than four years, after the cause             At issue in this case was whether the four-
of action arose. The trial court granted summary            year statute of limitations for fraud barred both
judgment in favor of Elledge on the grounds that            Ford’s fraud claim and his equitable action to
the two-year statute of limitations had run. The            remove a cloud on title.
court of appeals reversed, holding that the four-                Ford sued Mobil Chemical Company
year limitations period applicable to debts also            (predecessor of ExxonMobil Chemical Company)
applies to unjust enrichment claims. In a per               in 1998 for real estate fraud claiming Mobil


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falsely represented that its pipeline easement              Williamson County; the Creekmores subsequently
covered three tracts of his land when in fact it            nonsuited and then refiled in Fort Bend County.
covered only one. On summary judgment, the trial            Team Rocket moved to have the Fort Bend
court awarded Ford $36,167 and ordered the                  County trial judge enforce the original venue
pipeline removed. The court of appeals reversed             order, but he refused. The court of appeals denied
the damage award because it was time-barred but             mandamus relief. The Supreme Court granted
affirmed the removal order, holding that quiet title        argument on the petition for mandamus to
actions have no statute of limitations. The                 determine whether a party may voluntarily nonsuit
Supreme Court reversed the removal order,                   and then refile a cause of action in a different
affirmed the damage award, and rendered                     county following an order to transfer venue. The
judgment for ExxonMobil.                                    Court heard oral argument on February 15, 2007.
       The Supreme Court held that both Ford’s
fraud claim and quiet title claim were barred by            2. In re Tex. Dep’t of Transp. & In re Gillespie
limitations. Fraud claims must be brought within            County, 218 S.W.3d 74 (Tex. March 9, 2007) [06-
four years of the time the fraud should have been           0289, 06-0302].
discovered through reasonable diligence. The                     The principal issue in this case was whether
recorded instruments in a grantee’s chain of title          venue was proper in Travis County as to either the
generally raise an irrebuttable presumption of              Texas Department of Transportation or Gillespie
notice. Here, Ford’s fraud claim stemmed from a             County, where the suit arose from a single car
discrepancy among several recorded instruments              accident in Gillespie County.
concerning the three tracts at issue. Ford admitted              Courtney Foreman was the front-seat
learning of the discrepancy by simply reading the           passenger of a car driven by Jim Robbins in
documents. Because Ford failed to bring suit                Gillespie County. Robbins failed to negotiate a
within four years of the time this discrepancy              sharp left curve where the road approached a
arose, his fraud claim was time-barred. An                  bridge over the Pedernales River. The car slid off
equitable action to remove cloud on title has no            the roadway into a drainage alley between the
statute of limitations if a deed is void or has             bridge guardrail and a dirt retaining wall and fell
expired by its own terms. A deed that is merely             into the river. Courtney Foreman drowned and
voidable, however, is not eligible for such                 her parents brought a wrongful death action
equitable treatment because the claimant has an             against the Texas Department of Transportation
adequate legal remedy. Because deeds obtained               and Gillespie County, among others, in Travis
by fraud are voidable rather than void, the deed in         County Probate Court during the administration of
this case was subject to the four-year statute of           Courtney’s estate.
limitations. Therefore, Ford’s quiet title action                The Foremans alleged negligence, gross
was also time-barred. A contrary rule would allow           negligence, premises defect, special defect, injury
parties to evade the statute of limitations in              by traffic control device, and “joint enterprise.”
virtually every real estate case by recasting their         The Department filed a motion to transfer venue
claims as equitable actions to remove clouds on             to Gillespie County arguing that the Foremans
title.                                                      failed to properly plead a cause of action for
                                                            which venue was proper in Travis County under
H. Venue                                                    section 101.102(a) of the Texas Tort Claims Act.
1. In re Team Rocket, 2006 WL 1071213 (Tex.                 Specifically, the Department argued that the
App.—Houston [14th Dist.] 2006), argument                   Foremans only properly pleaded premises defect
granted on pet. for writ of mandamus, 50 Tex.               and special defect causes of action and that
Sup. Ct. J. 151 (December 4, 2006) [06-0414].               neither action arose in any part in Travis County,
     The Creekmores filed a wrongful death suit             as required by section 101.102(a). Gillespie
against relators Team Rocket, MLF Airframes,                County filed a separate motion to transfer venue
and Mark L. Frederick (collectively “Team                   agreeing with the Department and arguing in the
Rocket”) in Harris County. The trial court granted          alternative that, pursuant to Texas Civil Practice
Team Rocket’s motion to transfer venue to                   and Remedies Code section 15.015, venue was


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proper only in Gillespie County since Gillespie              of the marital residence, but she stated that the
County was being sued.                                       parties had only discussed other matters and
      The trial court dismissed all of the motions to        maintained she did not understand the agreement.
transfer venue to Gillespie County.              The         Other discussions ensued as to the agreement, but
Department and Gillespie County separately                   petitioner was never asked whether she
sought mandamus relief from the court of appeals.            understood or consented to it as a whole, and no
The court of appeals, without comment, denied                other evidence was admitted. Respondent moved
relief as to both parties. Both parties filed sought         for a final decree based on the agreement, and the
mandamus relief from this Court.                             trial court rendered a judgment removing from
      Without hearing oral argument, the Supreme             and adding to the recited terms.
Court granted mandamus and ordered the probate                     The court of appeals affirmed, concluding
court to transfer the case to Gillespie County. The          that Qi Wu Chisholm had participated in reaching
Court held that claims of negligent design,                  the agreement and understood it sufficiently for
maintenance, and inspection of the bridge could              the trial court to render judgment. The Supreme
not support a claim of negligence or gross                   Court disagreed, noting that even if she consented
negligence because they do not allege activity               to the custody arrangements and marital residence
contemporaneous to the accident. The Court also              sale, nothing showed she consented to the
held that “injury by traffic control device” was not         property division, the only issue before the Court.
an independent cause of action which could                   When a consent judgment is rendered without
support venue in Travis County and that alleging             consent or is not in strict compliance with the
a “joint enterprise” did not change the fact that the        terms of the agreement, the judgment must be set
actions alleged occurred antecedent to the                   aside. As to Gary Bryce Chisholm’s argument
accident. Ultimately, the Court ruled, the only              that the trial court, typical to Bexar County
properly pleaded causes of action were premises              proceedings, rendered final judgment only partly
and special defect and no part of either of these            based on the parties’ agreement and otherwise on
claims arose in Travis County.                               its own orders, the Court noted that there was no
                                                             basis for the trial court to make the findings
XXVIII. PROCEDURE—TRIAL AND POST-                            necessary to divide the marital estate.
TRIAL                                                              Accordingly, the Supreme Court granted the
A. Consent Judgments                                         petition for review and, without hearing oral
1. Chisholm v. Chisholm, 209 S.W.3d 96 (Tex.                 argument, reversed the court of appeals’ judgment
December 1, 2006) [05-0996].                                 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                B. Default Judgment
parties’ agreement, containing terms on child                1. In re R.R., 209 S.W.3d 112 (Tex. December 1,
custody and the division of property. Without                2006) [06-0460].
objection from petitioner Qi Wu Chisholm’s                         In this termination-of-parental rights case,
counsel, respondent’s counsel tendered as                    the trial court entered a default judgment against
evidence an exhibit listing pre-marital items and            the mother, Ambrea Rodgers, after she failed to
items acquired during the marriage to be divided             file an answer. The trial court denied her motion
between the parties, which counsel described as              for new trial, and the court of appeals affirmed.
the division of personal property approved by the            At issue is whether Rodgers met the Craddock
parties. The court received the exhibit in                   requirements by showing that her failure to file an
evidence. Almost immediately, petitioner, of                 answer was not intentional or due to conscious
disputed ability to speak and understand English,            indifference, she had a meritorious defense, and
stated that she did not understand what had been             that a new trial would not cause delay or undue
read into the record. With the occasional aid of an          prejudice. See Craddock v. Sunshine Bus Lines,
interpreter petitioner acknowledged the agreement            133 S.W.2d 124, 126 (Tex. 1939).
on child custody and appeared to assent to the sale


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      In her motion for new trial, Rodgers asserted                The Supreme Court reversed the court of
that she did not think she was required to file an           appeals’ judgment, noting that the Business
answer for various reasons, including that she               Corporation Act also requires service to a foreign
thought an attorney would automatically be                   corporation’s “principal office.” The Court
appointed to her. She had also kept in regular               concluded that the record was insufficient to
contact through letters with her children’s                  prove such service. It noted that it had never
caseworker. She further asserted that she had a              addressed whether the face of a record in a
meritorious defense because termination of her               restricted appeal must show that service was
parental rights was not in the best interests of the         forwarded to a statutorily required address.
children. There was no evidence in the trial court           However, the Court had repeatedly said that there
that a new trial would cause injury to any party.            are no presumptions in favor of valid service in
The Court held that under these circumstances,               restricted appeal from a default judgment. Thus,
Rodgers satisfied the Craddock requirements.                 without an allegation that 920 King Street was
Accordingly, without hearing oral argument, the              Wachovia’s principal office, service was improper
Court reversed the court of appeals’ judgment and            and the default could not be sustained.
remanded the case to the trial court for a new trial.        Accordingly, the Court reversed the court of
                                                             appeals’ judgment and vacated the default
2.     Wachovia Bank of Del. v. Gilliam,                     judgment.
215 S.W.3d 848 (Tex. February 9, 2007) [05-
0903].                                                       C. Enforcement of Judgments
      The primary issue in this restricted appeal            1. In re Discount Rental, Inc., 216 S.W.3d 831
was whether substitute service based on statutes             (Tex. March 2, 2007) [05-0249].
requiring papers to be forwarded to the                            In this opinion, the Supreme Court
defendant’s “home office” or “principal office”              conditionally granted relator Discount Rental’s
was valid in the absence of evidence the                     petition for mandamus and directed the trial court
requirement was complied with. The Supreme                   to vacate a writ of execution on and orders for
Court held it was not.                                       sale of Discount Rental’s property and to return
      Patsy Flower obtained a home-equity loan               that property because the court of appeals had
from First Union National Bank of Delaware                   reversed the underlying default judgment.
secured by her home in Waxahachie. She later                       Discount Rental did not supersede the default
filed suit to declare the lien on her home void              judgment, and while the restricted appeal was
because her daughter, Marjorie Gilliam, owned a              pending plaintiffs William and Barbara Carter
twenty-five percent undivided interest in the home           obtained a writ of execution on Discount Rental’s
but had not signed the loan documents. The                   property, the constable seized the property, the
petition sought personal or substituted service in           parties reached agreement on how the property
general terms, without alleging any specific statue          should be sold at a hearing on plaintiffs’ motion to
or procedural rule.                                          sell the property, and the trial court signed an
      The constable’s return showed service upon             order reflecting that agreement. Before the sale
an agent for the Secretary of State. The file                occurred, the court of appeals reversed the default
contained a certificate from the Secretary                   judgment because service was improper, and
indicating his office forwarded process to                   Discount Rental moved for the return of its
Wachovia at 920 King Street, and received a                  property under section 34.021 of the Texas Civil
return receipt from “Addressee’s Agent.” On this             Practice and Remedies Code. But the trial court
record, the trial court granted a default judgment.          denied the motion and directed that the sale take
      The court of appeals held that while the               place.
default in this case could not be affirmed under the               The Supreme Court noted that even assuming
Long Arm statute because there was no allegation             Discount Rental could waive its statutory right for
that 920 King Street was Wachovia’s home or                  return of its property by its agreement on the
home office, it could be affirmed the under the              terms of sale, that agreement was premised on the
Texas Business Corporation Act.                              trial court’s authority to force a sale. The Court


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held that since the default judgment was taken               issued a concurring opinion in which he agreed
without proper service it was void, any attempt by           that the instruction was harmless but added his
process based upon it to reach Discount Rental’s             view that the trial court did nothing wrong when
property was void of lawful authority, and                   it gave the instruction.
mandamus would lie to correct the error.
                                                             E. Mandamus Review of New Trial Orders
D. Jury Instructions and Questions                           1. In re Baylor Med. Ctr., 2006 WL 14278 (Tex.
1.     Bed, Bath & Beyond, Inc. v. Urista,                   App.—Dallas 2006), argument granted on pet. for
211 S.W.3d 753 (Tex. December 29, 2006) [04-                 writ of mandamus, 50 Tex. Sup. Ct. J. 533 (March
0332].                                                       12, 2007) [06-0491].
      The Court considered whether an                              In this mandamus action, the Supreme Court
unavoidable accident instruction, which both                 was asked to review whether two separate trial
parties agreed was improperly given, caused                  courts abused their discretion. The first trial court
reversible error. In this case, the plaintiff claimed        heard the trial, entered judgment, but then granted
he was hit on the head and knocked unconscious               a new trial on the plaintiffs’ motion. The second
by trash cans that fell from a Bed, Bath & Beyond            trial court reconsidered the first trial court’s order
store shelf. A store employee on a ladder in the             granting a new trial nearly six months later
adjacent aisle on the other side of the shelf had            pursuant to Texas Rule of Appellate Procedure
reportedly been trying to retrieve merchandise               7.2(b); after initially vacating the first trial court’s
with a broom when the trash cans fell. The                   order the second trial court reconsidered and
employee was not called to testify at trial, and             reinstated the order. Baylor contends that by
Bed, Bath & Beyond closed its case without                   doing so, both trial courts violated its
calling any witnesses. The trial court submitted             constitutional rights and clearly abused their
the case to the jury in a broad-form charge and              discretion.
gave the jury an unavoidable accident instruction                  Tammy Williams suffered hypoxic brain
stating that the occurrence need not be attributed           damage, allegedly during the night of May 3,
to any party’s negligence. The jury answered                 2002. Her husband filed suit on her behalf.
“no” to the liability question. The court of appeals         Williams claimed Baylor waited too long to
reversed and remanded, holding that the erroneous            intubate Tammy when it had notice of the need to
instruction was likely the basis for the jury’s              do so earlier. Baylor denied causation and breach
answer.                                                      of the duty of care. The jury found for Baylor.
      The Supreme Court noted that Crown Life                Williams moved for a new trial. The first trial
Insurance Co. v. Casteel, 22 S.W.3d 378 (Tex.                court granted the motion. Baylor filed a petition
2000), did not control because the broad-form                for writ of mandamus. The Fifth Court of
question in this case submitted a single liability           Appeals denied it. Baylor initially sought
theory (negligence) to the jury. Assuming but not            mandamus relief in this Court but subsequently
deciding that the instruction was erroneous, the             asked the Court to dismiss its petition as moot
Court then concluded that the record did not                 after a second trial court vacated the first trial
support a finding that the trial court’s submission          court’s order. The Court dismissed Baylor’s
of the instruction probably caused the rendition of          petition as moot. Thereafter, on Williams’
an improper judgment. Accordingly, any error in              motion, the second trial court reconsidered its
including the instruction in the jury charge was             order and granted a new trial based on the
harmless. The Court reversed the court of                    pleadings, motions, and arguments of counsel.
appeals’ judgment and remanded the case to that                    Baylor filed a second petition for writ of
court for consideration of remaining issues.                 mandamus directly with the Supreme Court,
      Justice Medina dissented. Although he                  alleging that it was an abuse of discretion for
agreed that Casteel did not apply, he believed that          either of the trial courts to have ordered a new
the jury was confused by the unavoidable accident            trial. The Supreme Court heard oral argument on
instruction and the Court should have held the               September 27, 2007.
instruction to be reversible error. Justice Brister


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2. In re Columbia Med. Ctr., 2006 WL 1309583                  Harris County District Clerk’s Office was not
(Tex. App.—Dallas 2007), argument granted on                  open until January 3. Thus, when Hernandez’s
pet. for writ of mandamus, 50 Tex. Sup. Ct. J. 533            notice of appeal was filed with the district clerk
(March 12, 2007) [06-0416].                                   and the court of appeals on January 3, the filing
      In this mandamus action, the Supreme Court              was timely. However, the court of appeals
was asked to review whether a trial court abused              believed the appropriate deadline to be January 2,
its discretion by ordering a new trial solely in the          not realizing that the district clerk’s office was
interest of justice and fairness. Relators contend            closed that day. The court of appeals ordered
that by doing so the trial court violated their               Hernandez, pursuant to Texas Rules of Appellate
constitutional rights and clearly abused its                  Procedure 26.3 and 10.5(b), to file a formal
discretion.                                                   motion to extend time with an explanation as to
      Donald Creech had trouble passing a kidney              why his notice of appeal was untimely.
stone. He entered Columbia Medical Center to                  Hernandez’s counsel failed to respond to this
pass it with medical assistance. He died in the               order and the court of appeals dismissed
hospital. His wife filed suit on behalf of herself,           Hernandez’s appeal for want of jurisdiction.
their children, and his estate, alleging that                      Because Hernandez’s notice of appeal was
Columbia Medical Center and its employees were                timely, Texas Rules of Appellate Procedure 26.3
negligent by, among other things, failing to                  and 10.5(b) did not apply and Hernandez was not
recognize or adjust for Creech’s particular needs.            required to explain the timing of his notice of
Columbia countered that it and its employees                  appeal. Accordingly, the Supreme Court reversed
complied with the applicable standard of care and             the court of appeals’ judgment and the case was
that the evidence at trial showed that the plaintiffs         remanded so that Hernandez’s appeal could be
could not establish causation. The jury found in              reinstated.
Columbia’s favor. The plaintiffs moved to set
aside the verdict and for a new trial, alleging some          G. Voir Dire
twenty-eight evidentiary grounds for doing so.                1. Davis v. Fisk Elec. Co., 187 S.W.3d 570 (Tex.
The trial court granted the motion and Columbia               App.—Houston [14th Dist.] 2006), pet. granted,
filed a petition for writ of mandamus. The                    50 Tex. Sup. Ct. J. 446 (February 26, 2007) [06-
Supreme Court granted oral argument on the                    0162].
petition for writ of mandamus and heard oral                        The principal issues presented in this case
argument on September 27, 2007.                               are whether the trial court abused its discretion in
                                                              denying plaintiff’s challenges based on Batson v.
F. Post-Judgment Filing Deadlines                             Kentucky, 476 U.S. 79 (1986), to defendants’
1. Hernandez v. Nat’l Restoration Techs.,                     peremptory strikes of five African-American
211 S.W.3d 309 (Tex. December 22, 2006) [06-                  venire members, particularly given defendants’
0454].                                                        questions to venire members as to racial
      Hernandez alleged, and National Restoration             discrimination and the “N word” and defendants’
Technologies conceded, that the court of appeals              citing to multiple nonverbal reactions by the
erroneously dismissed Hernandez’s appeal as                   venire members.
untimely due to a mistaken belief that the Harris                   Davis, an African-American, sued Fisk
County District Clerk’s Office was open for                   Electric Co., Fisk Technologies, and Fisk
business on January 2, 2006. When a filing                    Management Inc. for firing him because of his
deadline falls on a holiday or a day in which the             race in violation of state and federal statutes. Fisk
district clerk’s office is closed or inaccessible, the        claimed it fired Davis because of poor job
filing deadline is automatically extended until the           performance. At voir dire, Fisk peremptorily
end of the next day when the district clerk’s office          struck five African-Americans, Davis raised a
is open and accessible. TEX . R. APP . P. 4.1(b).             Batson challenge as to each strike, and Fisk
      Hernandez’s ninety-day filing deadline fell             provided reasons for each strike, including, among
on New Year’s Day. The court of appeals                       other reasons, the struck venire members’
reopened from the holidays on January 2, but the              nonverbal reactions and verbal responses to a


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variety of questions. Some questions concerned               indemnity grounds. The court of appeals held
the venire members’ abilities to remain impartial            that, although Gladstrong USA might not have
despite past experiences with racial discrimination          been the manufacturer of the butane lighter, the
and despite accusations that a certain person had            doctrine of apparent manufacturer could be used
used the “N word.” The trial court denied the                to show that Gladstrong USA held itself out to be
challenges, and the jury returned a verdict in favor         the manufacturer and would thus be forced to
of Fisk. The court of appeals reviewed the trial             indemnify SSP and Metro. Accordingly, the court
court’s denial of the challenges for an abuse of             of appeals reversed in part the trial court’s
discretion and found none, holding among other               summary judgment in favor of Gladstrong USA,
things that Fisk’s questions as to racial                    affirmed in part, and remanded the case to the trial
discrimination and the “N word” were proper                  court.
bases for its peremptory challenges and that Fisk’s                The Supreme Court granted SSP and Metro’s
unchallenged observations of nonverbal                       petitions for review and heard oral argument on
occurrences were proof thereof.                              March 20, 2007.
      The Supreme Court granted Davis’s petition
for review and heard oral argument on April 10,              XXX. REAL PROPERTY
2007.                                                        A. Ad Valorem Tax Exemptions
                                                             1. Galveston Cent. Appraisal Dist. v. TRQ
XXIX. PRODUCTS LIABILITY                                     Captain’s Landing, L.P., 212 S.W.3d 726 (Tex.
A. Indemnification                                           App.—Houston [1st Dist.] 2006), pet. granted, 51
1. SSP Partners v. Gladstrong Invs. (USA) Corp.,             Tex. Sup. Ct. J. 41 (October 12, 2007) [07-0010].
169 S.W.3d 27 (Tex. App.—Corpus Christi 2005),                    At issue in this case is whether a community
pet. granted, 50 Tex. Sup. Ct. J. 151 (December 4,           housing development organization may, as holder
2006) [05-0721].                                             of equitable title, obtain an ad valorem tax
      The principal issue in this products liability         exemption for properties legally owned by its
case is whether a company which did not                      subsidiaries.
manufacture a defective product, but was part of                  In 2003, the American Housing Foundation,
the chain of commerce of the product, may                    a Texas non-profit and a qualified community
nevertheless owe a duty to indemnify the sellers of          housing development organization, formed CD
the product.                                                 Captain’s Landing, LLC and became its sole
      In 2001, Joshua Castillo, a child, died in a           member. CD, in turn, purchased TRQ Captain’s
fire. His two brothers were also injured in the fire.        Landing, L.P., which owned the Captain’s
Their parents claimed the fire was caused by a               Landing Apartments, by obtaining a 99% limited
defective butane lighter purchased at a Circle K             partnership interest directly along with a 100%
store. The parents brought a products liability              membership interest in TRQ Galveston, LLC,
action against the distributor, SSP Partners and             which held the remaining 1% interest as general
Gladstrong USA. SSP sued Metro Novelties,                    partner. Once the transaction was complete, CD
another distributor, for indemnity. SSP and Metro            filed an application with the Galveston Central
then collectively sued Gladstrong USA for                    Appraisal District seeking a 2003 ad valorem tax
indemnity, as Gladstrong USA was the alleged                 exemption for the apartments under section
manufacturer and further upstream in the chain of            11.182 of the Texas Tax Code, which allows
distribution.                                                exemptions for certain real property owned by
      In October 2002, Gladstrong USA, SSP and               community housing development organizations.
Metro all settled with the Castillos. The trial court        The District denied the exemption on the grounds
granted Gladstrong USA’s no-evidence motions                 that CD did not own the apartments for the
for summary judgment against Metro and SSP’s                 purposes of section 11.182. TRQ Captain’s
indemnity claim.                                             Landing and the Housing Foundation sought
      The court of appeals affirmed the grant of             judicial review in district court, claiming that they
summary judgment for Gladstrong USA based on                 were entitled to an exemption as the equitable
statutory indemnity, but reversed on common-law              owners of the property. The trial court upheld the


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Appraisal District’s decision, but the court of             C. Condemnation
appeals reversed.                                           1. Bulanek v. WesTTex 66 Pipeline Co.,
     The Supreme Court granted the Appraisal                209 S.W.3d 98 (Tex. December 1, 2006) [04-
District’s petition for review. Oral argument has           0011].
been set for January 15, 2008.                                    WesTTex 66 Pipeline Co. condemned a fifty
                                                            foot wide strip across a 227-acre portion of
B. Adverse Possession                                       petitioners’ undeveloped land for a pipeline
1. Tran v. Macha, 213 S.W.3d 913 (Tex.                      easement. The 3.915-acre strip paralleled or
December 1, 2006) [04-1107].                                largely overlapped seven existing pipeline
      Neighboring relatives shared the use of a             easements. Petitioners sued and received a
driveway for many years, thinking it belonged to            condemnation award based on the testimony of
one of them when it actually belonged to the other.         two experts, Brad Kangieser and Tom Edmonds.
The court of appeals held that this shared use and          These experts, implicitly considering the 3.915
mutual mistake transferred title by adverse                 acres to be a separate economic unit, testified that
possession. In its first adverse possession decision        the easement had a highest and best use as a
in nearly twenty years the Supreme Court                    pipeline easement and that neither had used the
reversed, holding that the evidence was legally             before-and-after valuation method in appraising
insufficient to support the statute of limitations.         the property acquired by WesTTex. Both experts
      The Court began with an examination of the            appraised the easement without reference to the
adverse possession statute. It noted that the               parent tract. The court of appeals, following the
language “actual and visible appropriation”                 Supreme Court’s decision in Exxon Pipeline Co.
requires adverse possession, not just adverse               v. Zwahr, 88 S.W.3d 623, 630-31 (Tex. 2002),
beliefs. The shared use and mutual mistake in this          reversed the award and rendered judgment based
case were simply insufficient to put the true owner         on WesTTex’s valuation evidence.
on notice that plaintiffs were claiming ownership                 The Supreme Court concluded that this case
of the driveway. The Court noted that there is              was not factually distinguishable from Zwahr,
nothing inconsistent or hostile to one’s ownership          where Exxon Pipeline Co. condemned a fifty foot
about sharing use with another.                             wide strip across a 49-acre cotton farm for a
      Further, the Court clarified that adverse             pipeline easement, the 1.01-acre strip paralleled or
possession must be intentional. While this intent           largely overlapped an existing pipeline easement,
does not require a desire to dispossess the true            and Mr. Kangeiser had testified that the easement
owner, or even knowledge that there is one, the             was a self-contained, separate economic unit with
claimant must intend to claim the disputed                  a value independent from the surface acreage and
property as his own. The mere occupancy of land             a highest and best use as a pipeline easement.
is insufficient to show adverse possession.                 There the Supreme Court reversed the
      Finally, quoting Robert Frost, the Court              condemnation award, holding that Mr.
recognized that it may seem harsh that adverse              Kangeiser’s testimony was irrelevant and
possession rewards only those who believe “good             inadmissible because he relied on the
fences make good neighbors” and not those who               condemnation itself in establishing a separate
are kind enough to share. But the Court noted that          economic unit and in assigning a value to that unit
adverse possession is itself a harsh doctrine that          and had not applied the before-and-after valuation
takes property from its true owner and gives it to          method to evaluate the easement as a
another. Because of the severity of the doctrine,           proportionate part of the entire tract. Here the
Texas law requires that the claimant’s intentions           Supreme Court held that Bulanek’s argument that
be absolutely clear.                                        WesTTex’s easement was part of a pipeline
                                                            corridor comprising a separate economic unit
                                                            faltered because even if a pipeline corridor could
                                                            be a separate economic unit without
                                                            improvements or characteristics setting it apart
                                                            from surrounding property, petitioners’ experts’


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November 1, 2006 – October 31, 2007

testimony was no evidence of such a unit in this            concerns that the State create a safe and suitable
case.                                                       means of access from the highway into and out of
      The Supreme Court held that the case should           the property. Before the hearing, the State agreed
be remanded given that Bulanek had presented the            to construct deceleration and acceleration lanes
case in reliance on the court of appeals’ opinion in        together with a raised traffic island to provide
Zwahr, rejecting WesTTex’s argument that                    safer access to the remaining property and the
petitioners could have awaited the Supreme                  office complex. Satisfied with the safety of the
Court’s reversing decision in Zwahr before                  State’s plan, Specialty Retailers did not appear at
seeking judgment.                                           the special commissioners’ hearing. At the
                                                            hearing, the State repeated that it would construct
2. City of Seabrook v. Port of Houston Auth., 199           the highway with the deceleration and
S.W.3d 403 (Tex. App.—Houston [1st Dist.]                   acceleration lanes and the raised traffic island.
2006), pet. granted, 50 Tex. Sup. Ct. J. 667 (April         After the special commissioners assessed
30, 2007) [06-0566].                                        $166,000 in damages against the State, both the
      The Port Authority filed suit condemning the          State and PR Investments timely objected to the
property of certain landowners.           The City          award, thereby invoking the trial court’s
intervened and filed a plea to the jurisdiction. The        jurisdiction. On December 1, 1999, the State
City claimed that under Texas Water Code section            alerted PR Investments that it had changed the
62.016(d), the City was required to consent to the          construction plan to eliminate the acceleration and
condemnation and because the City had not                   deceleration lanes as well as the raised, concrete
consented, the trial court lacked jurisdiction. The         traffic island. PRI received a “to scale” copy of
trial court denied the plea to the jurisdiction and         the new construction plan from the State on
the City appealed. The court of appeals rejected            December 3, only one business day before the
the City’s jurisdictional argument and held that            December 6 trial. The State never notified
section 62.016(d) was not a jurisdictional                  Specialty Retailers of the changes to the
limitation on condemnation. The City filed a                construction plan. The State did not move for a
petition for review, reasserting its jurisdictional         continuance to the December 3 deadline, nor did
argument and arguing that the section 62.016(d)             it supplement the opinions or reports of its
defeated the trial court’s jurisdiction. The                testifying experts.
Supreme Court granted the petition for review but                 Both PR Investments and Specialty Retailers
has not yet set oral argument.                              moved to dismiss for lack of jurisdiction, arguing
                                                            that the State’s decision to change plans deprived
3. PR Invs. v. State, 180 S.W.3d 654 (Tex.                  the trial court of jurisdiction in a condemnation
App.—Houston [14th Dist.] 2005), pet. granted,              action and requested that the trial court award
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [04-            them attorney’s fees, expenses, and costs incurred
0431].                                                      in the case. The trial court dismissed the case
      The State condemned a portion of PR                   without prejudice, awarding attorney’s fees and
Investments’ property, seeking to convert the               accessing sanctions. The court of appeals initially
street abutting the property into a controlled-             affirmed the trial court’s judgment, but upon
access highway.         Specialty Retailers, PR             rehearing en banc, the court of appeals reversed
Investments’ tenant, leases an office and                   and remanded the case to the trial court, holding
warehouse complex on the property and owns an               that the condemnation statute did not prohibit the
easement running east-west down the middle of               State from changing its specific plan for the
the property, connecting the complex directly to            property after the commissioners’ hearing in a
the main lanes of the condemned street. The State           way that allegedly prejudices the landowners or
initiated the condemnation action against PR                require the issues relating to damages in the trial
Investments and Specialty Retailers, and the trial          court to be the same as those considered by the
court appointed special commissioners to assess             special commissioners.
the condemnation damages in a hearing. PR
Investments and Specialty Retailers voiced


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Supreme Court Update
November 1, 2006 – October 31, 2007

     The Supreme Court granted PR Investments’                    The trial court dismissed the University’s
and Specialty Retailers’ petitions for review and            condemnation action and, after a jury trial on
heard oral argument on March 21, 2007.                       FKM’s request for attorney’s fees, expenses, and
                                                             temporary possession damages, entered judgment
D. Eminent Domain                                            awarding FKM $323,026 in temporary possession
1. FKM P’ship, Ltd. v. Bd. of Regents of the                 damages, $67,031.71 for appraisal fees, and
Univ. of Houston Sys., 178 S.W.3d 1 (Tex.                    $495,642 in attorney’s fees, plus contingent
App.—Houston [14th Dist.] 2005), pet. granted,               appellate fees totaling $175,000. The court of
50 Tex. Sup. Ct. J. 227 (December 18, 2006) [05-             appeals held that the county court at law had
0661].                                                       jurisdiction to hear the case even though it
      The principal issues presented in this case            involved a smaller tract than that presented to the
involve the effect upon a condemnation                       special commissioners, and reversed and
proceeding brought by a governmental entity                  remanded the case back to the trial court with
when, subsequent to the special commissioners’               instructions.
valuation proceedings, it significantly reduces the               The Supreme Court granted petitions for
size of the tract it seeks to take.                          review from both parties and heard oral argument
      In 1999, the Board of Regents of the                   on March 21, 2007.
University of Houston filed a condemnation case
in the County Civil Court at Law Number 3 to                 E. Homestead
take 1.0792 acres of unimproved land owned by                1. Norris v. Thomas, 215 S.W.3d 851 (Tex.
FKM. The land is located along the east side of              February 9, 2007) [05-0476].
the university campus, adjacent to Calhoun Road                    The Norrises filed for bankruptcy and
and the State Highway 35 frontage road. Prior to             claimed a homestead exemption for their 68-foot
the University’s attempt to condemn the property,            yacht. They had lived in a house but took
FKM had approached the University with plans to              permanent residence on the boat in 2000; they
build a shopping center on the site, but the                 traveled to various locations along the Gulf Coast
University claimed it needed to take the property            and dry-docked at a marina in Corpus Christi. The
to accomplish the public use of creating a Texas             bankruptcy court held that the Texas homestead
Highway 35 right-of-way. The University then                 exemption, even broadly construed, does not
offered FKM $205,250 for the property. The                   include boats. The federal district court agreed,
University sought to condemn the land when FKM               concluding that the boat was a movable chattel
refused its offer.                                           “by virtue of its self-powered mobility” and not
      The trial court appointed special                      entitled to homestead protection. Norris appealed
commissioners who assessed damages to be paid                to the Fifth Circuit, which certified the question of
to FKM at $275,000. After the University took                whether a boat qualifies as a homestead in Texas
possession of the property, FKM timely filed                 to the Supreme Court of Texas.
objections to the special commissioner’s award                     The Court answered the question “no,”
and requested a jury trial. Approximately two                holding that a boat does not qualify for a
years into the litigation the University filed an            homestead exemption. The plain language of the
amended petition that reduced the amount of                  Texas Constitution and the Texas Property Code
property to be condemned to a five-foot-wide strip           describe homesteads in terms of attachment to
of land along the length of Calhoun Road. FKM                land, and the Court’s precedent describes a
filed a plea to the jurisdiction and a motion to             homestead as being permanently affixed to realty.
dismiss, arguing the University’s amendment to               The Court compared the status of boats to the
take less property than it originally sought stripped        status of mobile homes under its prior precedent:
the trial court of jurisdiction because the                  those with some type of permanent attachment
University altered the subject matter of the                 and lack of mobility qualified for the homestead
petition that was considered and valued by the               exemption, while those with only temporary
special commissioners.                                       attachment and the means of self-propulsion did
                                                             not.


                                                        75
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     Although the dissent agreed that a residence         PROPERTY CODE §53.021(a). Advance’d hired
must be attached to land to give it homestead             construction workers as its employees, who then
status, it disagreed that the attachment must be          labored on a construction of an improvement in
permanent and that the mobility of the dwelling           this state, by virtue of a contract with an owner,
should be a factor. The dissent argued that the           contractor, or subcontractor, thus satisfying the
purpose of the dwelling as a family residence             statutory requirement of the mechanic’s lien
should control, and it looked to the policy behind        statute. Id. The Court reasoned that Advance’d
the homestead exemption as protecting the family          was no different from a supplier who furnishes
residence.                                                lumber, pipe, or shingles, but instead of materials,
                                                          Advance’d furnished labor. Thus, the Court
F. Mechanic’s Liens                                       concluded that the temporary workers were
1. Reliance Nat’l Indem. Co. v. Advance’d                 Advance’d’s employees, and Advance’d furnished
Temps., Inc., 227 S.W.3d 46 (Tex. June 8, 2007)           labor by providing these workers to Gonzalez for
[05-0558].                                                work on the construction project.
      In this appeal the Court considered whether
a temporary employment agency, which places               XXXI. SANCTIONS
workers at a construction project under a contract        A. Imposition
with a subcontractor, “furnishes labor” within the        1. In re Michelle Moore, S.W.3d , 50 Tex.
meaning of Chapter 53 of the Texas Property               Sup. Ct. 1193 (Tex. August 31, 2007) [06-0544].
Code, thus qualifying for a mechanic’s lien.                    The issue in this case is whether the court of
Because the temporary agency qualified as one             appeals abused its discretion in imposing $47,178
who “furnished labor,” the Supreme Court                  in sanctions upon Michelle Moore. Moore filed a
affirmed the court of appeals’ decision reversing         suit affecting the parent-child relationship
the trial court.                                          (SAPCR) seeking custody of I.E.T. The real party
      During construction of an apartment                 in interest, Lisa Santos gave birth to I.E.T. while
complex, the general contractor, Lamar,                   she was living with Moore’s son, but was legally
subcontracted with Cesar Gonzalez to frame,               married to another man. In the first SAPCR,
drywall, and roof the apartment project. Because          Moore alleged that she had standing as I.E.T.’s
Gonzalez did not have an adequate work force, he          paternal grandmother. When the trial court
sought additional workers from Advance’d                  granted temporary custody to Moore, Santos
Temporaries, Inc. After a few months, Lamar               sought mandamus relief from the court of appeals.
terminated Gonzalez’s work. Although Lamar                The court held that Moore lacked standing under
paid Gonzalez, Gonzalez failed to pay the full            the Family Code, but denied Santos’s request for
amount owed to Advance’d.              Advance’d          sanctions because Moore was entitled to a
thereupon gave notice of its claim under the              presumption of good faith. Despite the court of
mechanic’s lien statute and filed an affidavit            appeals’ ruling that she lacked standing, Moore
claiming a mechanic’s lien. Advance’d also sued           refused to give up possession of I.E.T., prompting
Gonzalez for the balance owed under its contract          Santos to file a suit seeking habeas corpus relief
after it was unable to collect from Gonzalez’s or         from the 214th District Court to regain possession
Lamar’s surety bond, and joined Lamar’s surety,           of the child. Three days later, Moore filed a
Reliance National Indemnity Company. The trial            second SAPCR in the 319th District Court, this
court rendered judgment against Gonzalez, but             time alleging standing as a person in possession of
denied Advance’d recovery against the other               the child for at least six months. The 214th
parties. The court of appeals reversed and                District Court denied Santos’s request for habeas
remanded, holding that Advance’d had furnished            corpus relief and ordered the proceedings
labor and was entitled to recover under the               transferred to the 319th Court. The 319th Court
mechanic’s lien statute.                                  issued a temporary restraining order preventing
      The Supreme Court affirmed the court of             Santos from removing I.E.T. from Moore’s
appeals’ judgment, holding that Advance’d                 possession. Santos again sought mandamus relief
“furnished labor” under the statute. See TEX .            from both orders. The court of appeals granted


                                                     76
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November 1, 2006 – October 31, 2007

mandamus relief as to both orders. It also ordered         are foreign corporations that sell title insurance
Moore to pay Santos’s attorney’s fees and costs            policies in Texas through title agents. Using this
for what it characterized as Moore’s “disregard”           new method of calculation, the Comptroller
for the court’s prior order.                               assessed fees of approximately $1.4 million
      The Supreme Court held that the court of             against First American Insurance Company and
appeals abused its discretion, noting that Moore           $220,000 against Old Republic Insurance
alleged a new basis for standing in the second             Company. The title insurance companies filed
SAPCR, and that both trial courts had declined to          lawsuits to recover the retaliatory taxes they paid
remove I.E.T. from Moore’s possession.                     under protest. The companies filed cross-motions
Accordingly, the Court conditionally issued a writ         for summary judgment, and the trial court ruled in
of mandamus directing the court of appeals to              favor of the Comptroller on all claims and issues.
vacate its sanctions order.                                The court of appeals affirmed the trial court’s
                                                           holding that the Comptroller’s interpretation of
XXXII. TAX                                                 the retaliatory tax is reasonable and it is not a
A. Title Insurance Retaliatory Tax                         violation of the equal protection guarantees
1. First Am. Title Ins. Co. v. Strayhorn, 169              provided by the United States and Texas
S.W.3d 298 (Tex. App.—Austin 2005), pet.                   Constitutions. Thus, the issues in this case are
granted, 50 Tex. Sup. Ct. J. 532 (March 12, 2007)          whether the Comptroller’s revised interpretation
[05-0541].                                                 of the Texas retaliatory tax statute is reasonable
       This case questions the Comptroller’s               and whether that interpretation violates the
interpretation of a “retaliatory tax” statute which        Federal and State Equal Protection Clauses.
affects out-of-state title insurance companies. A                The Supreme Court granted the petition for
retaliatory tax seeks to mirror the taxes imposed          review and heard oral argument on April 11,
by a foreign state whenever the foreign state’s            2007.
taxes are more burdensome than those of the
retaliating state.                                         XXXIII. WATER LAW
       Under Texas law a tax is imposed on title           A. Condemnation
insurance premiums, and this tax is imposed on             1.      Canyon Reg’l Water Auth. v.
the policy issuer. If the home state of a foreign          Guadalupe-Blanco River Auth., 211 S.W.3d 351
title insurance company imposes higher taxes on            (Tex. App.—San Antonio 2006), pet. granted, 50
title insurance companies doing business in that           Tex. Sup. Ct. J. 929 (July 2, 2007) [06-0873].
sate, the Texas retaliatory tax is imposed in                   After initially agreeing to allow the Water
addition to the tax on the policy premium. In              Authority to expand its fresh-water intake
determining the amount of retaliatory tax owed by          infrastructure at the dam-end of Lake Dunlap, the
a title insurer, the Comptroller historically              River Authority reversed course and filed suit to
permitted out-of-state title insurers to include           enjoin any expansion. The Water Authority
100% of the premium tax they remitted to Texas             counter-claimed, arguing that its existing
in their retaliatory tax calculation. However, in          easement allowed it to expand and, in the
the mid-1990s, the Comptroller changed this                alternative, it had power to condemn any needed
interpretation. Title insurance agents are required        right-of-way. On cross-motions for summary
by law to pay 85% of the premium taxes owed to             judgment, the trial court held that the Water
the State and the company is required to pay 15%           Authority could build the new intake, the Water
of the premium tax. To better reflect the payments         Authority’s intended use was paramount to any
the companies make, the Comptroller concluded              prior public use that might be affected, and the
the out-of-state insurance companies should                River Authority could seek compensation for any
include only 15% of the premium tax as part of             taking that resulted. The trial court certified its
their total imposed financial burden instead of the        order for interlocutory appeal.
100% previously allowed.                                        The court of appeals reversed, holding that
       First American Title Insurance Company and          the easement allowed only one underwater intake.
Old Republic National Title Insurance Company              The court of appeals concluded that the River


                                                      77
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November 1, 2006 – October 31, 2007

Authority’s affidavit conclusively showed the new                The Supreme Court granted Guitar’s petition
intake would practically destroy the public’s prior         for review and will hear oral argument on
recreational use of that part of Lake Dunlap                December 5, 2007.
affected by the new intake and that any new intake
would impede access to the dam. The court of                XXXIV. WORKERS’ COMPENSATION
appeals found that the Water Authority failed to            A. General Contractors
address whether the purpose of the new intake               1. Entergy Gulf States, Inc. v. Summers,
could otherwise be accomplished without                         S.W.3d       , 50 Tex. Sup. Ct. J. 1140 (Tex.
destroying the public’s prior recreational use of           August 31, 2007) [05-0272].
Lake Dunlap. The court of appeals rendered                       At issue in this case is whether a premises
judgment for the River Authority.                           owner can also qualify as a general contractor for
     The Supreme Court granted the Water                    purposes of the defenses provided under the Texas
Authority’s petition for review and heard                   Labor Code. Entergy Gulf Services contracted
argument on November 15, 2007.                              with IMC for the performance of construction and
                                                            maintenance services on its property. As part of
B. Conservation Districts                                   the contract, Entergy agreed to provide workers’
1. Guitar Holding Co., L.P. v. Hudspeth County              compensation insurance to cover the IMC
Underground Water Conservation Dist., 209                   employees working at its Sabine plant. IMC
S.W.3d 172 (Tex. App.—El Paso 2006), pet.                   employee John Summers was injured while
granted, 50 Tex. Sup. Ct. J. 929 (July 2, 2007)             performing work at the Sabine plant. He obtained
[06-0904].                                                  benefits under the Entergy insurance plan and
      At issue in this case is whether a water              then sued Entergy for tort damages. Entergy
district may promulgate rules for transferring              moved for summary judgment, arguing that it met
water that are based on the amount of water                 the statutory definition of a general contractor
previously used by landowners.                              under the Texas Labor Code and therefore
      Prior to 2002, landowners could pump five             qualified for the Code’s exclusive-remedy defense
acre feet of water per acre owned from the Bone             that would bar Summers’s suit. The trial court
Spring-Victorio Peak Aquifer. The Hudspeth                  agreed with Entergy and granted the motion for
County Underground Water Conservation District              summary judgment, but the court of appeals
enacted rules under which the amount of water               reversed, holding that, by definition, a premises
landowners are now allowed to pump is based on              owner could not be a general contractor under the
the amount of water they had pumped from 1992-              Code.
2002, rather than the amount of land owned.                      The Supreme Court held that Entergy
Several landowners became interested in selling             qualified as a general contractor for purposes of
their water for use by cities, making the amount of         the Texas Labor Code. The Court acknowledged
water they may pump very crucial. Guitar                    that a prior version of the statute seemed to
Holding Company owns over 35,000 acres of land,             preclude premises owners from qualifying as
but only irrigated fifty-seven of those acres during        general contractors. However, the Court relied on
the pertinent ten-year period. Therefore, under the         amended language in the most recent version of
Water District’s new rules, although Guitar sought          the statute to hold that a property owner is not
permits to pump much more water, it was granted             precluded from being a general contractor
a permit to pump based on those fifty-seven acres.          protected by the exclusive-remedy defense. The
Guitar brought suit claiming the new rules, by              Court then applied the statutory requirements for
allowing landowners who had previously irrigated            general contractor status to the facts of the case
the land to continue to pump large amounts of               and held that Entergy met those requirements. As
water that were to be sold outside the District,            a general contractor under the Code, Entergy was
denied it equal protection and violated the Water           therefore entitled to the protections of the
Code. The trial court upheld the Water District’s           exclusive-remedy defense, so the Court reversed
decisions and the court of appeals affirmed.                and rendered judgment in favor of Entergy.



                                                       78
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                                                          preclude a contractor, as a third-party beneficiary
2. HCBeck, Ltd. v. Rice, 2006 WL 908761 (Tex.             of a contract with the subscribing employer, from
App.—Fort Worth 2006), pet. granted, 50 Tex.              seeking indemnification for amounts paid in
Sup. Ct. J. 801 (June 4, 2007) [06-0418].                 settlement damages to the subscriber’s employee.
      This personal injury case concerns whether a        Former article 8306 section 3(d) stated that a
general contractor “provided” insurance so as to          subscribing employer was not liable to indemnify
be immune from suit by the subcontractor’s                others for an employee’s personal injury claim
employee when the general contractor required the         unless it agreed to do so “in a written agreement
subcontractor to obtain workers’ compensation             expressly assuming such liability, executed by the
coverage under an Owner Controlled Insurance              subscriber prior to such injury or death.” Current
Program, the subcontractor obtained such                  section 417.004 of the Texas Labor Code provides
coverage, and the owner payed the premiums.               that the employer “is not liable to the third-party
      FMR hired HCBeck to perform as the general          for reimbursement damages . . . unless the
contractor for a construction project on its              employer executed, before the injury or death
property. HCBeck subcontracted a portion of the           occurred, a written agreement with the third-party
work to Haley Greer. Greer employed Charles               to assume the liability.” The Court held that the
Rice, who sustained injuries while performing             Legislature intended no substantive change, and
under the subcontract, collected workers’                 that the contractor could recover.
compensation, and brought a negligence action                   Energy Service Company and Superior
against HCBeck. HCBeck moved for summary                  Snubbing Services provided oilfield services to
judgment, claiming it had “provided” workers’             Mitchell Energy Corporation. Through two
compensation insurance to Greer through FMR’s             written and signed indemnity contracts, Energy
“Owner Controlled Insurance Program,” and that            agreed to indemnify Mitchell and its contractors,
Rice was its “deemed employee.” HCBeck                    one of which was Superior, for personal injury
claimed it was immune from suit and that Rice’s           claims by Energy employees, and Superior agreed
exclusive remedy was to recover workers’                  to indemnify Mitchell and its contractors, one of
compensation benefits. Rice also filed a motion           which was Energy, for personal injury claims by
for summary judgment, claiming that HCBeck did            Superior employees. No agreement existed
not provide workers’ compensation to Greer                directly between Superior and Energy. A
because the subcontract did not obligate HCBeck           Superior employee, Daryll Faulk, sued Mitchell
to provide coverage and that FMR actually                 and Energy for work-related injuries. Mitchell
“provided” the coverage. The trial court granted          and Energy settled with Faulk, and then sued
HCBeck’s motion for summary judgment and                  Superior for indemnity. Superior contended that
supplemental motion for summary judgment, and             section 417.004 barred Energy’s claim because
denied Rice’s reciprocal cross motion for                 the new Act requires a written signed agreement
summary judgment. The court of appeals reversed           between an employer and a third-party, and
the trial court’s judgment, rendered partial              Superior and Energy never signed a written
judgment for Rice on the issue of HCBeck’s                agreement with each other. The trial court
immunity from suit and remanded the case back to          disagreed and granted summary judgment for
the trial court. HCBeck appealed.                         Energy. The court of appeals reversed.
      The Supreme Court granted HCBeck’s                        After reviewing the legislative history of the
petition for review and heard oral argument on            Workers’ Compensation Act and the limits set by
October 18, 2007.                                         the Texas Oilfield Anti-Indemnity Act, the
                                                          Supreme Court reversed and remanded, holding
B. Indemnification                                        that the Legislature made no substantive change in
1. Energy Serv. Co. of Bowie, Inc. v. Superior            the 1989 amendments to the Act. Therefore, the
Snubbing Servs., Inc., S.W.3d , 50 Tex. Sup.              third-party contractor need not sign an agreement
J. 1045 (Tex. August 24, 2007) [05-0202].                 directly with the employer in order to receive
     At issue in this case is whether the 1989            indemnification from the employer.
amendments to the Worker’s Compensation Act


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     Justice Johnson, joined by Justices
Wainwright, Green and Willett, dissented. Based
on the “literal, plain, and common meaning” of the
statute, the “key concern” of employer immunity
from liability underlying the Act, and the “crisis”
of costs to employers that led to the 1989
amendments, the dissent argued that the statute
precludes a non-signatory third-party from
receiving indemnification. Justice O’Neill did not
take part in the decision. Pursuant to section
22.005 of the Texas Government Code, the
Honorable Douglas S. Lang of the Court of
Appeals for the Fifth District at Dallas sat by
commission of Governor Rick Perry.

C. Liens
1. Daughters of Charity Health Servs. v.
Linnstaedter, 226 S.W.3d 409 (Tex. June 1, 2007)
[05-0108].
     At issue in this case is whether hospitals are
barred from maintaining hospital liens once they
are reimbursed for their services in accordance
with the Workers’ Compensation Act. Donal
Linnstaedter and Kenneth Bolen (the employees)
were involved in a car accident while driving their
employer’s vehicle within the course of their
employment. They were admitted and treated at
Providence Health Center. Providence filed a
hospital lien for the charges incurred by the
employees and received payment from the
employees’ workers’ compensation carrier for the
amounts allowed under the workers’ compensation
fee guidelines. The hospital then filed a lien
against any cause of action filed by the employees.
The employees filed suit against the driver of the
other vehicle and later settled the claim. They
brought this suit against the hospital to recover the
amount paid to the hospital to discharge its lien.
The trial court found in the employees’ favor and
the court of appeals affirmed.
     The Supreme Court affirmed the judgment of
the court of appeals, holding that the Texas Labor
Code prohibits liens against workers’
compensation patients. Hospitals that treat
workers’ compensation patients are bound by the
Labor Code’s caps on reimbursement, and they are
barred from asking the patients for more.




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                                                               Index

20801, Inc. v. Parker,
194 S.W.3d 556 (Tex. App.—Houston [14th Dist.] 2006), pet. granted,
50 Tex. Sup. Ct. J. 532 (March 12, 2007) [06-0574]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 22

A.G. Edwards & Sons, Inc. v. Beyer
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 20 (Tex. September 28, 2007) [05-0580]. . . . . . . . . . . . . . . . . . . . 55

Abilene Housing Auth. v. Gene Duke Builders, Inc.
226 S.W.3d 415 (Tex. June 1, 2007) [05-0631]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Barker v. Eckman,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 175 (Tex. December 1, 2006) [04-0194]. . . . . . . . . . . . . . . . . . . . 58

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Bay Area Healthcare Group, Ltd. v. McShane
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 866 (Tex. June 8, 2007) [05-1069]. . . . . . . . . . . . . . . . . . . . . . . . 26

Baylor Univ. v. Coley
221 S.W.3d 599 (Tex. April 20, 2007) [04-0916]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Baylor Univ. v. Sonnichsen
221 S.W.3d 632 (Tex. April 20, 2007) [04-0851]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Bed, Bath & Beyond, Inc. v. Urista,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 334 (Tex. December 29, 2006) [04-0332]. . . . . . . . . . . . . . . . . . . 70

Ben Bolt-Palito Blanco Consol. ISD v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund
212 S.W.3d 320 (Tex. December 29, 2006) [05-0340]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

BFI Waste Sys. of N. Am., Inc., v. N. Alamo Water Supply Corp.,
___ S.W.3d ___, 51 Tex. Sup. J. 54 (Tex. October 12, 2007) [06-0602]. . . . . . . . . . . . . . . . . . . . . . . . . 59

Borg-Warner Corp. v. Flores,
232 S.W.3d 765 (Tex. June 8, 2007) [05-0189]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Brainard v. Trinity Universal Ins. Co.
216 S.W.3d 809 (Tex. December 22, 2006) [04-0537]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Brinson Ford, Inc. v. Alger
228 S.W.3d 161 (Tex. June 15, 2007) [05-0722]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Brookshire Grocery Co. v. Taylor
222 S.W.3d 406 (Tex. December 1, 2006) [03-0408]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52




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November 1, 2006 – October 31, 2007

Bulanek v. WesTTex 66 Pipeline Co.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 174 (Tex. December 1, 2006) [04-0011]. . . . . . . . . . . . . . . . . . . . 73

Canyon Reg’l Water Auth. v. Guadalupe-Blanco River Auth.
211 S.W.3d 351 (Tex. App.—San Antonio 2006), pet. granted,
50 Tex. Sup. Ct. J. 929 (July 2, 2007) [06-0873]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Cent. Ready Mix Concrete Co. v. Islas
228 S.W.3d 649 (Tex. June 29, 2007) [05-0940]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

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.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1148 (Tex. August 31, 2007) [05-0710]. . . . . . . . . . . . . . . . . . . . . 2

Chu v. Hong
185 S.W.3d 507 (Tex. App.—Fort Worth 2005), pet. granted,
50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0127]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Citizens Ins. Co. of Am. v. Daccach
217 S.W.3d 430 (Tex. March 2, 2007) [03-0505]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

City of Arlington v. Matthews
226 S.W.3d 417 (Tex. June 1, 2007) [06-0251]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

City of Dallas v. Saucedo-Falls
218 S.W.3d 79 (Tex. March 9, 2007) [05-0973]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

City of Dallas v. Thompson,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 189 (Tex. December 1, 2006) [05-0787]. . . . . . . . . . . . . . . . . . . . 32

City of El Paso v. Heinrich
198 S.W.3d 400 (Tex. App.—El Paso 2006), pet. granted,
50 Tex. Sup. Ct. J. 910 (June 25, 2007) [06-0778]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

City of Elsa v. M.A.L.
226 S.W.3d 390 (Tex. June 1, 2007) [06-0516]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

City of Galveston v. State
217 S.W.3d 466 (Tex. March 2, 2007) [04-0890]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

City of Houston v. Williams
216 S.W.3d 827 (Tex. February 23, 2007) [06-0159]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

City of Pasadena v. Kinsel Indus., Inc.
227 S.W.3d 651 (Tex. June 1, 2007) [06-0353]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

City of San Antonio v. TPLP Office Park Prop.
218 S.W.3d 60 (Tex. February 9, 2007) [04-1130]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50


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City of San Antonio v. Ytuarte
229 S.W.3d 318 (Tex. May 4, 2007) [05-0991]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

City of Seabrook v. Port of Houston Auth.
199 S.W.3d 403 (Tex. App.—Houston [1st Dist.] 2006), pet. granted,
50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0566]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

City of Sweetwater v. Waddell
218 S.W.3d 80 (Tex. March 9, 2007) [05-1033]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

City of Texarkana v. City of New Boston
228 S.W.3d 648 (Tex. June 1, 2007) [04-0797]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

City of Waco v. Lopez
183 S.W.3d 825 (Tex. App.—Waco 2005), pet. granted,
50 Tex. Sup. Ct. J. 674 (April 30, 2007) [06-0089]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

County of Dallas v. Walton
216 S.W.3d 367 (Tex. February 16, 2007) [04-0631]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

County of Dallas v. Wiland
216 S.W.3d 344 (Tex. February 16, 2007) [04-0247]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Dallas Area Rapid Transit v. Amalgamated Transit Union Local No. 1338
173 S.W.3d 896 (Tex. App.—Dallas 2005), pet. granted,
50 Tex. Sup. Ct. J. 929 (July 2, 2007) [06-0034]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Dallas Fire Fighters Ass’n v. City of Dallas
231 S.W.3d 388 (Tex. June 1, 2007) [04-0821]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Daughters of Charity Health Servs. v. Linnstaedter
226 S.W.3d 409 (Tex. June 1, 2007) [05-0108]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Davis v. Fisk Elec. Co.,
187 S.W.3d 570 (Tex. App.—Houston [14th Dist.] 2006), pet. granted,
50 Tex. Sup. Ct. J. 446 (February 26, 2007) [06-0162]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Doe v. Pilgrim Rest Baptist Church
218 S.W.3d 81 (Tex. March 9, 2007) [06-0686]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co.
certified question accepted, 50 Tex. Sup. Ct. J. 1015 (August 24, 2007) [07-0639]. . . . . . . . . . . . . . . . 38

El Paso Hosp. Dist. v. Tex. Health and Human Servs. Comm’n
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1143 (Tex. August 1, 2007) [05-0372]. . . . . . . . . . . . . . . . . . . . . . 1

Elledge v. Friberg-Cooper Water Supply Corp.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1060 (Tex. August 24, 2007) [06-0677]. . . . . . . . . . . . . . . . . . . . 66




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November 1, 2006 – October 31, 2007

Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc.
___ S.W.3d ___, 50 Tex. Sup. J. 1045 (Tex. August 24, 2007) [05-0202]. . . . . . . . . . . . . . . . . . . . . . . 79

Entergy Gulf States, Inc. v. Summers
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1140 (Tex. August 31, 2007) [05-0272]. . . . . . . . . . . . . . . . . . . . 78

Equistar Chems., L.P. v. Dresser-Rand Co.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 727 (Tex. May 4, 2007) [04-0121]. . . . . . . . . . . . . . . . . . . . . . . . 58

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

F.F.P. Operating Partners, L.P. v. Duenez
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 764 (Tex. May 11, 2007) [02-0381]. . . . . . . . . . . . . . . . . . . . . . . 21

Farmers Group, Inc. v. Lubin
222 S.W.3d 417 (Tex. April 27, 2007) [05-0169]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

First Am. Title Ins. Co. v. Strayhorn,
169 S.W.3d 298 (Tex. App.—Austin 2005), pet. granted,
50 Tex. Sup. Ct. J. 532 (March 12, 2007) [05-0541]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

First Commerce Bank v. Palmer
226 S.W.3d 396 (Tex. June 1, 2007) [05-0686]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Ford v. Exxon Mobil Chem. Co.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1191 (Tex. August 31, 2007) [06-0293]. . . . . . . . . . . . . . . . . . . . 66

Forest Oil Corp. v. McAllen
2005 WL 3435061 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0178]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Fort Worth Indep. Sch. Dist. v. Serv. Employment Redev.
___ S.W.3d ___, 50 Tex. Sup. J. 1053 (Tex. August 24, 2007) [05-0427]. . . . . . . . . . . . . . . . . . . . . . . 35

Fortis Benefits v. Cantu
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 965 (Tex. June 29, 2007) [05-0791]. . . . . . . . . . . . . . . . . . . . . . . 41

Frymire Eng’g Co., Inc. v. Jomar Int’l Ltd.
194 S.W.3d 713 (Tex. App.—Dallas 2006), pet. granted,
50 Tex. Sup. Ct. J. 1015 (August 24, 2007) [06-0755]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Gaines v. Kelly
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1054 (Tex. August 24, 2007) [05-1092]. . . . . . . . . . . . . . . . . . . . . 4



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November 1, 2006 – October 31, 2007

Galveston Cent. Appraisal Dist. v. TRQ Captain’s Landing, L.P.,
212 S.W.3d 726 (Tex. App.—Houston [1st Dist.] 2006), pet. granted,
51 Tex. Sup. Ct. J. 41 (October 12, 2007) [07-0010]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Goodyear Tire & Rubber Co. v. Mayes
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 886 (Tex. June 15, 2007) [04-0993]. . . . . . . . . . . . . . . . . . . . . . . 59

Guevara v. Ferrer
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1182 (Tex. August 31, 2007) [05-1100]. . . . . . . . . . . . . . . . . . . . 24

Guitar Holding Co., L.P. v. Hudspeth County Underground Water Conservation Dist.
209 S.W.3d 172 (Tex. App.—El Paso 2006), pet. granted,
50 Tex. Sup. Ct. J. 929 (July 2, 2007) [06-0904]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Gym-N-I Playgrounds, Inc. v. Snider
220 S.W.3d 905 (Tex. April 20, 2007) [05-0197]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

HCBeck, Ltd. v. Rice
2006 WL 908761 (Tex. App.—Fort Worth 2006), pet. granted,
50 Tex. Sup. Ct. J. 801 (June 4, 2007) [06-0418]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

HEB Ministries, Inc. v. Texas Higher Educ. Coordinating Bd.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1094 (Tex. August 31, 2007) [03-0995]. . . . . . . . . . . . . . . . . . . . 15

Hernandez v. Nat’l Restoration Techs.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 251 (Tex. December 22, 2006) [06-0454]. . . . . . . . . . . . . . . . . . . 71

Holmes v. Kent
221 S.W.3d 622 (Tex. April 20, 2007) [04-0729]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Hood v. Wal-Mart Stores, Inc.
216 S.W.3d 829 (Tex. February 23, 2007) [05-0902]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Hoover Slovacek L.L.P. v. Walton,
206 S.W.3d 557 (Tex. November 3, 2006) [04-1004]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Hubicki v. Festina
226 S.W.3d 405 (Tex. June 1, 2007) [05-0357]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

In re Allied Chem. Corp.,
227 S.W.3d 652 (Tex. June 15, 2007) [04-1023]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

In re Allstate County Mut. Ins. Co.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 902 (Tex. June 15, 2007) [06-0878]. . . . . . . . . . . . . . . . . . . . . . . 61

In re Allstate County Mut. Ins. Co.
227 S.W.3d 667 (Tex. June 15, 2007) [06-0878]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

In re AutoNation, Inc.
228 S.W.3d 663 (Tex. June 29, 2007) [05-0311]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60


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In re Bank One
216 S.W.3d 825 (Tex. February 23, 2007) [06-0093]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

In re Basco
221 S.W.3d 637 (Tex. April 20, 2007) [05-0771]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

In re Baylor Med. Ctr.,
2006 WL 14278 (Tex. App.—Dallas 2006), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 533 (March 12, 2007) [06-0491]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

In re Bazan
2006 WL 3095888 (Tex. App.—Corpus Christi 2006), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 842 (June 8, 2007) [06-0952]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

In re Bexar County Criminal Dist. Attorney’s Office,
224 S.W.3d 182 (Tex. May 4, 2007) [05-0613]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

In re BP Prods. N. Am., Inc.
2007 WL 1228614 (Tex. App.—Houston [1st Dist.] 2007), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 910 (June 22, 2007) [07-0119]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

In re Christus Spohn Hosp. Kleberg
222 S.W.3d 434 (Tex. April 27, 2007) [04-0914]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

In re Columbia Med. Ctr.,
2006 WL 1309583 (Tex. App.—Dallas 2007), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 533 (March 12, 2007) [06-0416]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

In re Davis
2007 WL 530033 (Tex. App.—Dallas 2007), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 1074 (September 4, 2007) [07-0147]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

In re Derzapf
219 S.W.3d 327 (Tex. March 23, 2007) [06-0669]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

In re Discount Rental, Inc.
216 S.W.3d 831 (Tex. March 2, 2007) [05-0249]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

In re Estate of Nash
220 S.W.3d 914 (Tex. April 20, 2007) [05-0538]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

In re Ford Motor Co.
211 S.W.3d 295 (Tex. December 22, 2006) [05-0696]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

In re Gen. Elec. Co.
2007 WL 625010 (Tex. App.—Houston [1st Dist.] 2007), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 910 (June 22, 2007) [07-0195]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

In re Green
221 S.W.3d 645 (Tex. April 20, 2007) [06-0496]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


                                                                  86
Supreme Court Update
November 1, 2006 – October 31, 2007

In re H.R.M.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 192 (Tex. December 1, 2006) [06-0270]. . . . . . . . . . . . . . . . . . . . 27

In re H&R Block Fin. Advisors, Inc.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1029 (Tex. August 24, 2007) [04-0061]. . . . . . . . . . . . . . . . . . . . . 5

In re Jorden,
191 S.W.3d 483 (Tex. App.—Tyler 2006), argument granted on pet. for writ of mandamus,
50 Tex. Sup. Ct. J. 533 (March 12, 2007) [06-0369]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

In re Kaplan Higher Educ. Corp.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1058 (Tex. August 24, 2007) [06-0072]. . . . . . . . . . . . . . . . . . . . . 5

In re Merrill Lynch Trust Co. FSB
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1139 (Tex. August 31, 2007) [03-1059]. . . . . . . . . . . . . . . . . . . . . 6

In re Michelle Moore
___ S.W.3d ___, 50 Tex. Sup. Ct. 1193 (Tex. August 31, 2007) [06-0544]. . . . . . . . . . . . . . . . . . . . . . 76

In re R.R.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 195 (Tex. December 1, 2006) [06-0460]. . . . . . . . . . . . . . . . . . . . 68

In re RLS Legal Solutions, LLC
221 S.W.3d 629 (Tex. April 20, 2007) [05-0290]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

In re SCI Tex. Funeral Servs., Inc.,
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 52 (Tex. October 12, 2007) [06-0385]. . . . . . . . . . . . . . . . . . . . . . 63

In re Sw. Bell Tel. Co., L.P.
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1178 (Tex. August 31, 2007) [05-0951]. . . . . . . . . . . . . . . . . . . . . 3

In re Sw. Bell Tel. Co.
226 S.W.3d 400 (Tex. June 1, 2007) [05-0511]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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

In re Tex. Dept. of Family and Protective Servs.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 238 (Tex. December 15, 2006) [04–1043]. . . . . . . . . . . . . . . . . . . 27

In re Tex. Dep’t of Transp. & In re Gillespie County
218 S.W.3d 74 (Tex. March 9, 2007) [06-0289, 06-0302]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

In re U.S. Home Corp.,.
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 42 (Tex. October 12, 2007) [03-1080]. . . . . . . . . . . . . . . . . . . . . . . 4

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45


                                                                 87
Supreme Court Update
November 1, 2006 – October 31, 2007

IRA Res., Inc. v. Griego
221 S.W.3d 592 (Tex. April 20, 2007) [05-0469]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Jack in the Box, Inc. v. Skiles
221 S.W.3d 566 (Tex. February 9, 2007) [05-0911]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Jackson v. Axelrad
221 S.W.3d 650 (Tex. April 20, 2007) [04-0923]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

JCW Elecs., Inc. v. Garza
176 S.W.3d 618 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 910 (June 25, 2007) [05-1042]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Kallam v. Boyd,
232 S.W.3d 774 (Tex. June 15, 2007) [05-0027]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Lamar Homes, Inc. v. Mid-Continent Cas. Co.
___ S.W.3d ___, 50 Tex. S. Ct. J. 1162 (Tex. August 31, 2007) [05-0832]. . . . . . . . . . . . . . . . . . . . . . 39

Lamesa Indep. Sch. Dist. v. Booe
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 24 (Tex. September 28, 2007) [05-0959]. . . . . . . . . . . . . . . . . . . . 36

Land Rover U.K., Ltd. v. Hinojosa,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 236 (Tex. December 15, 2006) [04-0794]. . . . . . . . . . . . . . . . . . . 11

Leland v. Brandal
217 S.W.3d 60 (Tex. App.—San Antonio 2006), pet. granted,
50 Tex. Sup. Ct. J. 910 (June 25, 2007) [06-1028]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Lewis v. Funderburk
191 S.W.3d 756 (Tex. App.—Waco 2006), pet. granted,
50 Tex. Sup. Ct. J. 929 (July 2, 2007) [06-0518]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Lexington Ins. Co. v. Strayhorn,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 181 (Tex. December 1, 2006) [04-0429]. . . . . . . . . . . . . . . . . . . . 41

Low v. Henry
221 S.W.3d 609 (Tex. April 20, 2007) [04-0452]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Med. City Dallas, Ltd. v. Carlisle Corp.
196 S.W.3d 855 (Tex. App.—Dallas 2006), pet. granted,
50 Tex. Sup. Ct. J. 712 (May 7, 2007) [06-0660]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Meyer v. WMCO-GP, L.L.C.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 264 (Tex. December 22, 2006) [04-0252]. . . . . . . . . . . . . . . . . . . . 7

Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co.,
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 44 (Tex. October 12, 2007) [05-0261]. . . . . . . . . . . . . . . . . . . . . . 42




                                                                  88
Supreme Court Update
November 1, 2006 – October 31, 2007

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]. . . 33

Mo. Pac. R.R. v. Limmer
180 S.W.3d 803 (Tex. App.—Houston [14th Dist.] 2005), pet. granted,
50 Tex. Sup. Ct. J. 801 (June 4, 2007) [06-0023]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Moki Mac River Expeditions v. Drugg
221 S.W.3d 569 (Tex. March 2, 2007) [04-0432]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Montgomery County v. Park
2005 WL 2667488 (Tex. App.—Waco 2005), pet. granted,
50 Tex. Sup. Ct. J. 218 (December 18, 2006) [05-1023]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co.
___ SW.3d ___, 51 Tex. Sup. Ct. J. 13 (Tex. September 28, 2007) [05-0006]. . . . . . . . . . . . . . . . . . . . 40

New Tex. Auto Auction Servs., L.P. v. Gomez de Hernandez
193 S.W.3d 220 (Tex. App.—Corpus Christi 2006), pet. granted,
50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0550]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Norris v. Thomas
215 S.W.3d 851 (Tex. February 9, 2007) [05-0476]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Ogletree v. Matthews,
212 S.W.3d 331 (Tex. App.—Austin 2006), pet. granted,
50 Tex. Sup. Ct. J. 454 (February 23, 2007) [06-0502]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Ontiveros v. Flores
218 S.W.3d 70 (Tex. March 2, 2007) [06-0607]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

PHC-Minden, L.P. v. Kimberly-Clark Corp.,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1153 (Tex. August 31, 2007) [05-0823]. . . . . . . . . . . . . . . . . . . . 44

Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co.
2006 WL 1892669 (Tex. App.—Houston [14th Dist] 2006), pet. granted,
50 Tex. Sup. Ct. J. 1073 (August 31, 2007) [06-0867]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74



                                                                  89
Supreme Court Update
November 1, 2006 – October 31, 2007

Prouxl v. Wells
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1188 (Tex. August 1, 2007) [06-0258]. . . . . . . . . . . . . . . . . . . . . 65

Quigley v. Bennett
227 S.W.3d 51 (Tex. June 8, 2007) [05-0870]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Ramos v. Richardson
228 S.W.3d 671 (Tex. June 29, 2007) [06-0336]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Reliance Nat’l Indem. Co. v. Advance’d Temps., Inc.
227 S.W.3d 46 (Tex. June 8, 2007) [05-0558]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Reliance Steel & Aluminum Co. v. Sevcik
2006 WL 563044 (Tex. App.—Corpus Christi 2006), pet. granted,
50 Tex. Sup. Ct. J. 1014 (August 24, 2007) [06-0422]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

S. Tex. Water Auth. v. Lomas
223 S.W.3d 304 (Tex. April 27, 2007) [05-0855]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Schaub v. Sanchez
229 S.W.3d 322 (Tex. June 22, 2007) [06-0375]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Seagull Energy E & P, Inc. v. R.R. Comm’n of Tex.
226 S.W.3d 383 (Tex. May 4, 2007) [03-0364]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Solar Applications Eng’g, Inc. v. T.A. Operating Corp.
191 S.W.3d 173 (Tex. App.—San Antonio 2006), pet. granted,
50 Tex. Sup. Ct. J. 667 (April 30, 2007) [06-0243]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

State Farm Life Ins. Co. v. Martinez
216 S.W.3d 799 (Tex. January 9, 2007) [05-0812]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

State Farm Lloyds v. Johnson
204 S.W.3d 897 (Tex. App.—Dallas 2006), pet. granted,
51 Tex. Sup. Ct. J. 2 (September 28, 2007) [06-1071]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

State Farm Mut. Auto. Ins. Co. v. Nickerson
216 S.W.3d 823 (Tex. December 22, 2006) [04-0427]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

State Farm Mut. Auto. Ins. Co. v. Norris
216 S.W.3d 819 (Tex. December 22, 2006) [04-0514]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

State v. Beam
226 S.W.3d 392 (Tex. June 1, 2007) [06-0974]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26




                                                                 90
Supreme Court Update
November 1, 2006 – October 31, 2007

State v. Fid. & Deposit Co. of Maryland
223 S.W.3d 309 (Tex. May 4, 2007) [04-0180]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

State v. Holland
221 S.W.3d 639 (Tex. April 20, 2007) [05-0292]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

State v. Oakley
227 S.W.3d 58 (Tex. June 8, 2007) [06-0050, 06-0172]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

State v. Precision Solar Controls, Inc.
220 S.W.3d 494 (Tex. April 5, 2007) [06-0348]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Stephen F. Austin State Univ. v. Flynn
228 S.W.3d 653 (Tex. June 29, 2007) [04-0515]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Stonebridge Life Ins. Co. v. Pitts
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 1195 (Tex. August 31, 2007) [06-0655]. . . . . . . . . . . . . . . . . . . . 13

Sw. Bell Tel. Co. v. Marketing On Hold, Inc.,
170 S.W.3d 814 (Tex. App.—Corpus Christi 2005), pet. granted,
50 Tex. Sup. Ct. J. 446 (February 26, 2007) [05-0748]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Tellez v. City of Socorro
226 S.W.3d 413 (Tex. June 1, 2007) [05-0629]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Tex. A&M Univ. Sys. v. Koseoglu
___ S.W.3d ___,50 Tex. Sup. Ct. J. 1213 (Tex. September 7, 2007) [05-0321]. . . . . . . . . . . . . . . . . . . 57

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

Tex. Mut. Ins. Co. v. Ledbetter
192 S.W.3d 912 (Tex. App.—Eastland 2006), pet. granted,
51 Tex. Sup. Ct. J. 2 (September 28, 2007) [06-0814]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Tex. Parks & Wildlife Dep’t v. E. E. Lowrey Realty, Ltd.
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 19 (Tex. September 28, 2007) [05-0157]. . . . . . . . . . . . . . . . . . . . 57

The Long Trusts v. Griffin
222 S.W.3d 412 (Tex. December 8, 2006) [04-0825]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Tomball Hosp. Auth. v. Harris County Hosp. Dist.
178 S.W.3d 244 (Tex.App.—Houston [14 Dist.] 2005), pet. granted,
50 Tex. Sup. Ct. J. 1014 (August 24, 2007) [05-0986]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Tony Gullo Motors I, L.P. v. Chapa,
___ S.W.3 ___, 50 Tex. Sup. Ct. J. 278 (Tex. December 22, 2006) [04-0961]. . . . . . . . . . . . . . . . . . . . 14

Tran v. Macha,
___ S.W.3d ___, 50 Tex. Sup. Ct. J. 186 (Tex. December 1, 2006) [04-1107]. . . . . . . . . . . . . . . . . . . . 73


                                                                 91
Supreme Court Update
November 1, 2006 – October 31, 2007

Ulico Cas. Co. v. Allied Pilots Ass’n,
187 S.W.3d 91 (Tex. App.—Fort Worth 2005), pet. granted,
50 Tex. Sup. Ct. J. 532 (March 9, 2007) [06-0247]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

VanDevender v. Woods
222 S.W.3d 430 (Tex. April 27, 2007) [05-0956]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Varner v. Cardenas
218 S.W.3d 68 (Tex. March 2, 2007) [06-0212]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Via Net v. TIG Ins. Co.
211 S.W.3d 310 (Tex. December 22, 2006) [05-0785]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Villafani v. Trejo,
2006 WL 1284948 (Tex. App.—Corpus Christi 2006), pet. granted,
50 Tex. Sup. Ct. J. 447 (February 26, 2007) [06-0501]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Wachovia Bank of Del. v. Gilliam
215 S.W.3d 848 (Tex. February 9, 2007) [05-0903]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Wagner & Brown, Ltd. v. Sheppard
198 S.W.3d 369 (Tex. App.—Texarkana 2006), pet. granted,
50 Tex. Sup. Ct. J. 1015 (August 24, 2007) [06-0845]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Westbrook v. Penley
231 S.W.3d 389 (Tex. June 29, 2007) [04-0838]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Wilz v. Flournoy
228 S.W.3d 674 (Tex. June 29, 2007) [06-0913]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Yancy v. United Surgical Partners Int’l, Inc.,
___ S.W.3d ___, 51 Tex. Sup. Ct. J. 63 (Tex. October 19, 2007) [05-0925]. . . . . . . . . . . . . . . . . . . . . . 49

Young v. Qualls
223 S.W.3d 312 (Tex. May 4, 2007) [05-1091]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Zipp v. Wuemling
218 S.W.3d 71 (Tex. March 9, 2007) [05-0731]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54




                                                                92
                                                           9
             STATE BAR LITIGATION SECTION REPORT

               A DVOCATE
             THE
EVIDENCE &

              U
                    PDATES ON CASE LAW pertaining to
PROCEDURE           procedure and evidence as compiled
   UPDATES          by Luther H. Soules III and Robinson

              C. Ramsey, of Langley & Banack, Inc.




                   THE “BEST OF”
              LITIGATION UPDATE 2008
                         ✯
10                                                   ADVOCATE     ✯ SPRING 2008




                                               THE
                                               EVIDENCE UPDATE
                                BY LUTHER H. SOULES III & ROBINSON C. RAMSEY




SUPREME COURT OF TEXAS                                              required an extra manufacturing step, unless [the defendant]
RULE 702 – EXPERT TESTIMONY                                         thought that procedure was needed.”
Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 2007 WL
4465732, *2, 4–6 (Tex. 2007) “An expert’s testimony, to be          The expert also testified that, “regardless of the shape of the
admissible, must possess a reliable foundation. ‘Admission          u-bolt, [the defendant] might have failed to tighten the u-bolt
of expert testimony that does not meet the reliability              nuts to [the defendant’s] own torque specification because
requirement is an abuse of discretion.’ Expert testimony is         the air pressure on the tightening equipment was incorrect
unreliable if it is based on unreliable data, or if the expert      or for some other reason, thus explaining the inadequate
draws conclusions from his underlying data ‘based on flawed         torque and vibration damage he observed. His review of the
methodology.’ Expert testimony is also unreliable if ‘there is      accident scene photographs further persuaded him that the
simply too great an analytical gap between the data and the         accident did not cause the u-bolt slippage and to opine that
opinion proffered.’”                                                ‘I don’t think [the u-bolt] should have come loose with what
                                                                    I saw happen there on that street.’”
In this products liability case, one of the plaintiff’s experts
presented testimony that was “sufficiently reliable to warrant      The Court found that the expert’s testimony did not present
admission and is some evidence that a manufacturing defect          a case where “there is simply too great an analytical gap
caused the accident.” He offered “a plausible theory of how         between the data and the opinion proffered,” or the expert’s
the accident occurred,” basing his testimony on “deviations         testimony “amounted to nothing more than a recitation of his
between [the defendant]’s own specifications as to torque,          credentials and a subjective opinion.” Therefore, the Court
alignment of the flattened portion of the u-bolt, and the           concluded that the defendant’s complaints regarding the
tolerance for the difference in u-bolt leg lengths.” He relied      expert’s testimony went to “its weight, not its admissibility,”
upon “observations and measurements of tangible truck               and that the trial court did not abuse its discretion in admit-
components, which were documented with photographs                  ting the expert’s testimony.
and a videotape of his initial examination of the truck.”
Furthermore, the u-bolts and rear-axle assembly were                COURTS OF APPEALS
admitted into evidence. Therefore, “[t]he jury was free to          RULE 202 – JUDICIAL NOTICE
examine this evidence and the [defendant]’s specifications          Burlington Northern and Santa Fe Ry. Co. v. Gunderson, Inc.,
that were also admitted into evidence.”                             235 S.W.3d 287, 291 (Tex. App.—Fort Worth 2007, pet. filed)
                                                                    “Under rule of evidence 202, a party may compel a trial court
Although the expert conceded that “the u-bolt could have            to take judicial notice of another state’s law by filing a motion,
been stretched in the accident, perhaps accounting for the          giving notice to other parties, and furnishing the court with
inadequate torques he measured,” he also found that “the            sufficient information to enable it to properly comply with
overall length of the allegedly defective u-bolt was the same       the request.” However, “[w]hen a party fails to request judicial
length as exemplar u-bolts provided by [the defendant] and          notice of the law of another state as permitted under Rule
was within one millimeter of the length of another u-bolt from      202, ‘Texas courts will simply presume that the law of the
the truck.” He further conceded that he had “no photographic        other state is identical to Texas law.’ . . . A preliminary motion
proof of indentation of the axle caused by the asymmetrical         is necessary to assure the application of the law of another
flat portion of the u-bolt and that “I never came back here to      jurisdiction, and absent a motion by a party, Texas law may
check that,” but he opined that the asymmetrical manufacture,       be applied to a dispute.”
regardless of indentation of the axle housing, reduced the
area of contact between the u-bolt and axle.” Therefore, the        Here, the plaintiff “never moved the trial court to take judicial
jury could infer that the defendant “would not have specified       notice of another state’s law. In its original petition, the
flattening of the curved end of the u-bolt, which indisputably      plaintiff alleged that “resolution of its claims ‘may require
                                                       ADVOCATE     ✯ SPRING 2008                                                    11




                                                 THE
application of the laws of other states’ and stated that it           could not grant summary judgment until a party filed its
‘intends to prove at trial the applicable laws of Nebraska,           choice-of-law motion ‘shortly before trial.’”
Oregon, Pennsylvania[,] or other states.’” (emphasis added
in opinion). However, “its live pleading at the time of the           Because the plaintiff “never filed a rule 202 motion requesting
summary judgment hearing . . . made no conflict-of-law                the trial court to take judicial notice of other states’ law,
allegation and, indeed, did not even mention the possibility          the presumption [arose] that the law of the other states in
that another state’s law might apply.”                                question is identical to Texas law.” Therefore, “there was no
                                                                      need for the trial court to conduct a conflict-of-law analysis
In its summary judgment responses, the plaintiff “argued that         because there was no conflict to analyze,” and “because the
there was a choice-of-law dispute, but claimed it could not           trial court was entitled to presume that the law of the other
identify which state’s law applied because [the defendants]           states is identical to Texas law, the trial court did not err by
had stonewalled its discovery efforts.” However, even in its          applying Texas law to [the plaintiff]’s claims.” ✯
summary judgment response, the plaintiff “did not ask the
trial court to take judicial notice of any other state’s law, nor     Robinson C. Ramsey is a shareholder with Langley & Banack,
did it ‘furnish the court sufficient information to enable it         Inc. in San Antonio. Board-certified in Civil Appellate Law
properly to comply’ with such a request as required by rule           and Family Law, he has written and spoken on the topics
202.” Therefore, the plaintiff “never filed a motion under rule       of evidence and civil procedure for the Texas Bar Journal,
202 that would have compelled the trial court to take judicial        the State Bar of Texas Litigation Update Course, and the
notice of the law of any other state.”                                State Bar of Texas Advanced Civil Appellate, Civil Trial, and
                                                                      Expert Witness Courses, as well as the State Bar’s Ten-Minute
The plaintiff cited several cases “where parties filed rule 202       Mentor Program and the University of Houston Law Center’s
motions shortly before trial,” and argued that “it was not            Evidence/Discovery and Litigation/Trial Tactics Series.
required to file a rule 202 motion because its claims never
went to trial.” However, the court of appeals concluded that          Luther H. Soules III is a shareholder with Langley & Banack,
those cases did not apply because there “the appellants filed         Inc. in San Antonio. Board-certified in Civil Trial and Civil
rule 202 motions, while in this case, [the plaintiff] never filed     Appellate Law, he is a past chairman of the Texas Supreme
a rule 202 motion.” Under Rule 202, “a trial court is required        Court Advisory Committee. He has authored books and
to take judicial notice of another state’s law only when a party      numerous articles on evidence and civil procedure, and has
files an appropriate motion.” Because the plaintiff “did not file     lectured extensively on these topics for the State Bar, including
a rule 202 motion . . . it cannot complain that the trial court       the Litigation Update Series and the Advanced Civil Trial,
failed to take judicial notice of another state’s law, regardless     Civil Appellate, Personal Injury, and Discovery Courses.
of when the deadline for filing such a motion falls.” The court       He also has published law journal articles and has lectured
reasoned that “[t]o adopt the rule proposed by [the plaintiff]        frequently on evidence and civil procedure for law school
would create a summary-judgment limbo where a trial court             sponsored seminars.
12                                                   ADVOCATE     ✯ SPRING 2008




                                               THE
                                             PROCEDURE UPDATE
                                BY LUTHER H. SOULES III & ROBINSON C. RAMSEY




SUPREME COURT OF TEXAS                                              claims asserted in the underlying litigation.” He then “sued
RULE 11 AGREEMENTS                                                  the hospital for the disputed $200,000, alleging fraud and
Knapp Medical Center v. De La Garza, 238 S.W.3d 767,                breach of an oral agreement that pre-dated the . . . hearing
2007 WL 3230144, 1–2 (Tex. 2007) “Rule 11 requires                  at which the settlement terms were dictated into the record
that agreements between attorneys or parties touching any           and accepted by the court.”
pending suit be in writing, signed and filed of record, or be
made in open court and entered of record as a condition to          After a bench trial, the judge awarded the plaintiff damages
enforcement.”                                                       and attorney’s fees. The hospital appealed this judgment,
                                                                    arguing that Rule 11 barred the plaintiff’s claims “because
Here, a physician sued a hospital for defamation, business          they were based on an alleged oral settlement agreement.”
disparagement, interference with business relations, and civil      Without addressing the Rule 11 argument, the court of appeals
conspiracy. During that trial, the plaintiff’s attorney offered     held that “the parol testimony of one of the attorneys was
to settle the case for the hospital’s insurance policy limits       sufficient to support the existence and breach of the settle-
of $1,000,000. At the time of this settlement demand, the           ment agreement, and affirmed the trial court’s judgment.”
plaintiff’s attorney “understood that the hospital would con-       However, the Supreme Court of Texas “agree[d] with the
tribute an additional $200,000 to the settlement.” However,         hospital’s unaddressed argument below that the failure to
after making the policy-limits demand, “he learned that             comply with Rule 11 bars the present claims.”
the hospital did not plan to contribute to the settlement,
but that the insurer had agreed to settle for the $1,000,000        As the Supreme Court explained, “‘Rule 11 is a minimum
policy limits.”                                                     requirement for enforcement of all agreements concerning
                                                                    pending suits.’ The rule provides, with certain exceptions not
During proceedings held just prior to jury argument,                relevant here, that ‘no agreement between attorneys or parties
the plaintiff’s attorney explained to the judge that “he            touching any suit pending will be enforced unless it be in
had offered to settle for the policy limits based upon his          writing, signed and filed with the papers as part of the record,
understanding that the hospital would contribute $200,000,          or unless it be make in open court and entered of record.’ . . .
and that he was now in a quandary as to what should be              One hundred and fifty years ago, we recognized the wisdom
done because of the hospital’s disagreement with that               of eschewing the verbal agreements of counsel in favor of
understanding.” The hospital’s attorney acknowledged that           written ones, noting that the vicissitudes of memory would
“the insurer had agreed to settle the case for policy limits”       otherwise ‘beget misunderstandings and controversies.’ . . .
and “an additional contribution from the hospital had been          The rule continues to be an effective tool for finalizing
discussed, but that no agreement had been reached and that          settlements by objective manifestation so that the agreements
the hospital would, in fact, not contribute anything further        ‘do not themselves become sources of controversy.’ . . . In
to the settlement.”                                                 short, settlement agreements ‘must comply with Rule 11 to
                                                                    be enforceable.’”
“Despite the disagreement about what had been promised,
[the plaintiff] agreed on the record to settle the underlying       The Supreme Court concluded that “[because the hospital’s
claims for $1,000,000, while purporting to reserve his              alleged agreement to contribute an additional $200,000 to
right to collect an additional $200,000 from the hospital in        settle the underlying suit was neither in writing nor made
another lawsuit.” After the judge accepted the agreement and        in open court and entered of record, it is not enforceable.”
discharged the jury, the plaintiff signed a release “acknowl-       Therefore, the Court reversed the court of appeals’ judgment
edging the settlement funds as complete satisfaction of the         and rendered judgment that the plaintiff take nothing.
                                                       ADVOCATE      ✯ SPRING 2008                                                    13




                                                 THE
DISCOVERY AGREEMENTS                                                   the deposition could not be set in Galveston, that plaintiffs
In re BP Products North America, Inc., 2008 WL 204506,                 could still not show that [the other executive] had unique or
*1–6 (Tex. 2008) In this personal injury case arising from an          superior knowledge of relevant facts . . . and that [the first
oil refinery explosion that killed fifteen people and injured          executive]’s deposition had not produced ‘new evidence’”
many others, hundreds of the resulting lawsuits were con-              [that the other executive] had ‘unique and superior personal
solidated for discovery.                                               knowledge’ of relevant facts as required under the parties’
                                                                       discovery agreement.”
After the plaintiffs served notices to take the depositions of
two executives of the relator’s parent company, the relator            On the day of the hearing of the relator’s motion for protec-
moved to quash the depositions and for protective orders,              tion, the plaintiffs filed a supplemental response arguing
contending that the plaintiffs “had not met their burden               that, “at the time the parties entered the agreement, ‘it was
under the apex doctrine.” The plaintiffs countered that both           not anticipated’ new information demonstrating [the other
executives had “unique or superior knowledge of relevant               executive]’s knowledge would become available from [the
facts.” The trial court struck the relator’s supporting affidavits     other executive]’s public statements.”
as being insufficient, and denied the motions. However, the
court of appeals granted the relator’s request for mandamus            The trial court denied the relator’s motions, and ordered the
relief, and required the trial court to consider the affidavits.       other executive’s deposition to proceed. After the court of
After doing so, the trial court again denied the relator’s             appeals denied the relator’s petition for writ of mandamus,
motions and permitted the depositions to proceed.                      the relator filed a petition with the Supreme Court of Texas,
                                                                       which stayed the trial court’s order pending review of the
Rather than pursue further mandamus review, the relator                issues. During the pendency of the mandamus proceeding, the
entered into a discovery agreement with the plaintiffs relating        other executive resigned from the relator’s employment, and
to the executives’ depositions, and filed this agreement with          retired. At that point, the plaintiffs filed a motion to dismiss
the trial court. The agreement provided that, in exchange              the relator’s petition as moot, urging that “apex protections
for the relator’s producing one of the executives for a four-          do not apply to retired officials.”
hour deposition, the plaintiffs would withdraw the notice of
deposition of the other executive and would not try to depose          Texas Rule of Civil Procedure 191.1 provides that “except
any other executive officer or board member of the relator,            where specifically prohibited” the parties may modify the
with one exception: if, during the executive’s deposition, the         “rules pertaining to discovery” by agreement.” An agreement
plaintiffs developed new evidence that the other executive             is enforceable “when it complies with the terms of Rule 11, or
had “unique and superior personal knowledge” of relevant               as it affects an oral deposition, if made a part of the record of
facts, the plaintiffs could issue a new notice of deposition           the deposition.” The agreement here complied with Rule 11’s
for the other executive. In such event, the relator “retained          requirements. Therefore, the issue was “whether the trial court
its right to file a motion to quash and motion for protection          had adequate reason to set aside the parties’ agreement.”
‘on this new notice,’ as well as its right to seek review of the
trial court’s ruling on these motions.”                                The Supreme Court noted that it had not previously addressed
                                                                       “the scope of a trial court’s power to set aside an otherwise
After the parties made this discovery agreement, the other             enforceable Rule 191.1 agreement,” but that “[c]onsistent with
executive “made numerous public statements regarding the . . .         its powers over discovery, a trial court may modify discovery
explosion, including giving interviews to [a magazine] and             procedures and limitations for ‘good cause.’” Nevertheless,
[newspapers], providing information packets to investors, and          this power is not “unbounded.” Whenever possible, a trial
hosting several ‘town hall’ meetings for employees, at least one       court “should give effect to agreements between the parties.”
of which plaintiffs contend appeared on the internet.”                 Discovery agreements “serve an important role in efficient trial
                                                                       management, permitting the parties to settle their disputes
After taking the first executive’s deposition, the plaintiffs          without resort to judicial supervision. The Rules of Civil
issued a new notice to take the other executive’s deposition.          Procedure encourage parties to reach discovery agreements. . . .
“Despite the provision of the agreement that any deposi-               When the parties conclude an agreement, the court should
tion take place ‘by telephone,’ the notice provided that the           not lightly ignore their bargain.”
deposition would take place in Galveston, Texas.” As a result,
the relator “filed a motion for protection, complaining that           “A court should be particularly reluctant to set aside a Rule
14                                                    ADVOCATE     ✯ SPRING 2008




                                                THE
191.1 agreement after one party has acted in reliance on the         pute without the necessity of court intervention and the effort
agreed procedure and performed its obligations under the             failed.’. . . To achieve ‘the efficient disposition of the case . . . .
agreement. . . . An easy disregard for partially performed           without the necessity of court intervention,’ parties and their
agreements would discourage parties from committing to               attorneys must be able to rely on agreements.” Therefore, the
discovery agreements for fear that the other party would             Court held that the trial court “abused its discretion by setting
avail itself of the benefit of the bargain and then attempt to       aside the parties’ Rule 191.1 agreement.”
avoid its own obligations.”
                                                                     As to the plaintiffs’ assertion that the relator’s apex objection
Here, the trial court “apparently set aside the agreement here       was moot because of the other executive’s retirement from
based on the court’s application of equitable and contract           employment with the relator, the Court held: “The apex
principles.” The trial court found that the other executive’s        doctrine, however, does not control the outcome in this case.
public statements “justified setting aside the discovery agree-      The discovery agreement displaced the common law standard
ment on grounds of misrepresentation, estoppel, and changed          with the parties’ own standard. . . . ‘If new evidence was
circumstances.” The Supreme Court, however, disagreed,               developed during [the first executive]’s deposition showing
concluding that, “[o]n this record, none of these grounds            that [the other executive] had unique and superior knowledge
provides a valid basis for ignoring the parties’ agreement.” The     of relevant facts, then [the other executive] would be presented
Court pointed out that the plaintiffs identified “no specific        at a limited deposition. . . . .” Therefore, the terms of the
misrepresentations on which they may have relied. Nor does           parties’ discovery agreement applied.
the record contain evidentiary support for the assertion that
[the relator] made a material, false representation that could       DISCOVERY SANCTIONS
have reasonably induced the plaintiffs to enter the discovery        PR Investments and Specialty Retailers, Inc. v. State, ___
agreement. . . .”                                                    S.W.3d ___ 2008 WL 400396, *6–7 (Tex. 2008) In this
                                                                     condemnation case, the Texas Supreme Court held that the
The Court also found no support for the trial court’s estoppel       condemnor’s “decision to change the traffic-flow design . . .
theory: “The trial court invoked estoppel apparently to prevent      does not divest the trial court of jurisdiction over the trial de
[the relator] from taking a position in court concerning the         novo.” Therefore, the Court held that the trial judge erred in
extent of [the other executive]’s knowledge that the court           dismissing the condemnation action for lack of jurisdiction
viewed as inconsistent with [the other executive]’s public           and in sanctioning the condemnor $650,000, representing
statements. . . . Even if [the other executive] had unique or        fees and costs.
superior knowledge, that fact would not estop [the relator]
from insisting upon the time and manner restrictions included        The condemnor did not dispute that “it might be subject
in the agreement; the parties expressly agreed that even if          to monetary sanctions for failing to timely supplement its
[the other executive]’s deposition was ‘not protected,’ [his]        discovery responses so that Petitioners were fairly apprised
deposition would be limited.”                                        before trial” that the condemnor was abandoning its project.
                                                                     Nevertheless, a discovery sanction “should be no more severe
The record further failed to demonstrate that the other              than necessary to satisfy its legitimate purposes,” and “courts
executive’s public statements were “the kind of changed              must consider the availability of less stringent sanctions and
circumstance that might amount to ‘good cause’ for setting           whether such lesser sanctions would fully promote compli-
aside the discovery agreement.” His public statements “ren-          ance. . . .”
dered the agreement neither impracticable nor impossible.
A subsequent development reducing the usefulness of a                Here, the trial court concluded that: (1) “the sanctions
discovery agreement to one party, without more, does not             imposed are just and not excessive”; (2) it “made sufficient
justify a refusal to enforce the agreement.”                         efforts to avoid imposition of sanctions”; and (3) “no lesser
                                                                     sanction based on the State’s conduct was available to the
Rule 191.2 provides that “[p]arties and their attorneys are          Court.” However, “[t]he punishment should fit the crime,”
expected to cooperate in discovery and to make any agreements        and “the extreme sanction imposed—dismissal of the case
reasonably necessary for the efficient disposition of the case.”     and the award of all of Petitioners’ fees and expenses—would
It further provides that, “when requesting a hearing relating to     only be warranted as a discovery sanction if dismissal were
discovery or when filing a discovery motion, a party must cer-       necessary and the entirety of fees and expenses incurred
tify ‘that a reasonable effort has been made to resolve the dis-     were required to remedy ‘the prejudice caused the innocent
                                                        ADVOCATE      ✯ SPRING 2008                                                   15




                                                  THE
party.’” The trial court “apparently thought so” because it             The defendants claimed that “their attorney placed the answer,
concluded that the condemnor “should be required to start               along with a filing letter, in his ‘outgoing mail bin’ four days
the condemnation proceeding over from scratch, filing a new             before the trial court signed the original default judgment
petition and conducting a new administrative hearing before             on December 17, 2004.” However, “[n]either the trial court
new commissioners.”                                                     nor the law firms received the answer,” and the defendants’
                                                                        attorney “never attempted to confirm that the answer had
Because the trial court premised its conclusion upon its                been filed. He did not even know until December 23, 2004,
“erroneous belief that it lacked jurisdiction to hear the case. . .     when his client informed him of the default judgment, that
and could not grant a lesser sanction,” the Supreme Court               the clerk had not received the answer.”
agreed with the court of appeals that “the trial court’s award
of sanctions should be reversed, and that a remand for further          The defendants filed several motions attempting to set aside
consideration of sanctions is warranted.”                               the default judgment; however, the trial judge denied all of
                                                                        these motions and refused to grant a new trial. The court of
DEFAULT JUDGMENTS                                                       appeals affirmed this decision, concluding that the evidence
Levine v. Shackelford, Melton & McKinley, L.L.P. ___ S.W.3d             demonstrated “a pattern of conduct that disregarded dead-
___, 2007 WL 109073, *1–2 (Tex. 2008) “A three-part test                lines, promises, procedures, and simple steps that a person
determines whether a court should grant a motion for new                of reasonable sensibilities would have taken to ensure that
trial to set aside a proper default judgment. The first part            the answer was properly and timely filed.” However, the
of the test requires that “the failure of the defendant to              proper standard is not negligence, but rather “intentional or
answer before judgment [i]s not intentional, or the result of           conscious indifference – that the defendant knew it was sued
conscious indifference on his part, but [i]s due to a mistake           but did not care.” (Emphasis in original). Finding that the
or an accident.”                                                        court of appeals had “incompletely described the standard
                                                                        that applies in this case,” the Supreme Court clarified that
Here, three law firms sued former clients for unpaid legal              “the complete definition of conscious indifference amounts
fees. Before filing an answer, the attorney for two of the              to more than mere negligence . . .”
defendants asked for a “standstill agreement” whereby “no
pleadings, including the Answer, will be filed for a 45 to 60           Here, the defendants’ attorney “knew of the November 29,
day period while we attempt to have the mediation process               2004 deadline for answer in the suit. He agreed to file a
run its course.” After the law firms refused this request,              general denial by that date, but he did not do so. He again
the defendants’ attorney “agreed to file an answer by the               failed to meet an extended deadline. Though he eventually
November 29, 2004 deadline, but then failed to do so.”                  emailed a draft denial to the parties, he never attempted to
One of the attorneys for the law firms tried to contact the             confirm that an answer was filed, despite repeated discus-
defendants’ attorney on December 6, 2004, “advising that the            sions, emails, and contact with the opposing party warning
law firms would take a default judgment if no answer was                him that if he did not file an answer, the law firms would
filed.” The following day, the defendants’ attorney “assured            take a default judgment.” The Supreme Court concluded that
the law firms that an answer would be filed on December 8,              “[t]his pattern of ignoring deadlines and warnings from the
2004.” However, instead of filing the answer on that date,              opposing party amounts to conscious indifference.”
he “emailed a draft of the proposed answer to the law firms,
assuring them that he would send the answer to the court                JURY CHARGE
‘by the end of the week.’”                                              Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 2007 WL
                                                                        4465732, * 6–10 (Tex. 2007) In this products liability case,
One week later, the law firms sent discovery requests to                the defendant complained that “over its objection, the trial
the defendants’ attorney, and the following day “the parties            court improperly instructed the jury on the definitions
attended mediation, which had been scheduled by agreement               of manufacturing defect and producing cause.” The jury
on November 24, 2004, though there still was no answer                  answered “yes” to Question 1, which asked: “Was there a
from the [the defendants] on file with the court.” The law              manufacturing defect in the 1999 Ford F-350 pickup truck
firms filed a motion for default judgment the next day, which           at the time it left Ford’s possession that was a producing
was eighteen days after the defendants’ attorney initially had          cause of the June 5, 1999 incident in question?” The accom-
promised to file an answer. The trial judge granted a default           panying instructions stated: (1) “A ‘defect’ means a condition
judgment without a hearing.                                             of the product that renders it unreasonably dangerous. An
16                                                   ADVOCATE     ✯ SPRING 2008




                                               THE
‘unreasonably dangerous’ product is one that is dangerous to        design defect is that’“[a] design defect claim requires proof
an extent beyond that which would be contemplated by the            and a jury finding of a safer alternative design.’ The charge
ordinary user of the product, with the ordinary knowledge           did not make such an inquiry.”
common to the community as to the product’s characteristics”
and (2) “‘Producing cause’ means an efficient, exciting, or         Furthermore, the Court explained, “requiring a deviation from
contributing cause that, in a natural sequence, produces the        specifications or planned output permits a jury to determine
incident in question. There may be more than one producing          whether a specific defect caused the accident, rather than
cause.”                                                             premising liability on a belief that a product failure, standing
                                                                    alone, is enough to find a product defect. Texas law does not
In defining “defect,” the trial judge followed Texas Pattern        generally recognize a product failure or malfunction, standing
Jury Charge 71.3, and, in accordance with the comment to            alone, as sufficient proof of a product defect. Instead, we have
PJC 71.3, the judge “included in the question the definition of     held that ‘a specific defect must be identified by competent
producing cause found in PJC 70.1.” Ford objected that “both        evidence and other possible causes must be ruled out. Our
PJC 71.3 and PJC 70 .1 were ‘not accurate under the law’ and        law requires more than finding an undifferentiated ‘condition’
failed to track [the Texas Supreme] Court’s precedent.” The         that renders the product unreasonably dangerous, which is all
Supreme Court agreed, noting that the plaintiff “may have           the court’s charge mandated. While a products liability claim
argued a manufacturing defect to the jury, but the law requires     does not of course require proof of manufacturer negligence,
the jury to determine specifically whether he had proven one.”      the deviation from design that caused the injury must be
(Emphasis in original). The Court concluded that the jury           identified. Otherwise, the jury is invited to find liability based
“received a legally incorrect charge that omitted an indispens-     on speculation as to the cause of the incident in issue.”
able element: that the product deviated, in its construction or
quality, from its specifications or planned output in a manner      For these reasons, the Supreme Court held that the
that rendered it unreasonably dangerous.”                           jury charge was “fundamentally flawed in omitting the
                                                                    requirement that the product deviate, in its construc-
Although the trial judge “submitted the pattern jury charge’s       tion or quality, from its specifications or planned output
definition on manufacturing defect,” the Supreme Court held         in a manner that renders it unreasonably dangerous.”
that “the model charge is erroneous, as it does not include
the requirement that a manufacturing defect must deviate            “If a cause of action consists of more than one element, and
from its specifications or planned output in a manner that          an element is omitted from the charge without request or
renders the product unreasonably dangerous.” This standard,         objection, the missing element can be found by the trial
the Court pointed out, requires “deviation from specifications      court or deemed found if certain requirements are met.
or planned output.” This requirement “is separate from, and         But where, as here, a proper objection is made about the
in addition to, the requirements that the product was defec-        omission of an essential element, the failure to include it is
tive when it left the manufacturer and that the defect was a        reversible error.”
producing cause of the plaintiff’s injuries.”
                                                                    Ford further complained that the trial judge “improperly
“The requirement of a deviation from the manufacturer’s             instructed the jury on producing cause.” Again relying upon
specifications or planned output serves the essential purpose       the PJC, the judge PJC 70.1, instructed the jury, in accordance
of distinguishing a manufacturing defect from a design defect.      with PJC 70.1 that “‘Producing cause’ means an efficient,
PJC 71.3 refers to a ‘manufacturing defect’ in the product ‘at      exciting, or contributing cause that, in a natural sequence,
the time it left’ the manufacturer. A jury—without further          produces the incident in question. There may be more than
guidance—may view any defect in a product at the time it            one producing cause.” Ford complained that “this definition is
leaves the manufacturer as satisfying the PJC’s reference to        an incorrect statement of Texas law, and that a valid definition
a ‘manufacturing defect,’ rather than making the essential          would state that producing cause ‘means that cause which,
distinction between a manufacturing and design defect. As it        in a natural sequence, was a substantial factor in bringing
stood, the court’s charge merely inquired whether a ‘condition’     about an event, and without which the event would not have
of the product rendered it unreasonably dangerous. That             occurred. There may be more than one producing cause,” and
‘condition’ could have been a design defect or a manufacturing      requested this definition.
defect. The distinction is material. The danger of allowing
a jury to conclude that the defect was or might have been a         The Supreme Court agreed with the plaintiff that “the second
                                                       ADVOCATE     ✯ SPRING 2008                                                   17




                                                 THE
part of the court’s definition, recognizing that there may            But jury argument that strikes at the appearance of and the
be more than one producing cause of an event, is correct.             actual impartiality, equality, and fairness of justice rendered
And we have seemed to sanction the first part, employing it           by courts is incurably harmful not only because of its harm
ourselves several times in describing producing cause. But            to the litigants involved, but also because of its capacity to
we have also described a producing cause as one ‘that is a            damage the judicial system. Such argument is not subject to
substantial factor that brings about injury and without which         the general harmless error analysis.”
the injury would not have occurred,’ the definition Ford asks
us to adopt.”                                                         After the defendant in this wrongful death suit stipulated
                                                                      liability, the plaintiff’s attorney, in final argument regarding
“To say that a producing cause is ‘an efficient, exciting, or         the issue of damages, “compared [the defendant]’s lawyer’s
contributing cause that, in a natural sequence, produces the          attempts to minimize damages to a World War II German
incident in question’ is incomplete and, more importantly,            program in which elderly and infirm persons were used for
provides little concrete guidance to the jury. Juries must            medical experimentation and killed.” The defendant’s attorney
ponder the meaning of ‘efficient’ and ‘exciting’ in this context.     “did not object to the argument, but attempted to counter it
These adjectives are foreign to modern English language as a          by arguing that “there are no Nazis in this courtroom” and
means to describe a cause, and offer little practical help to a       ‘I’ve never been accused of being a Nazi before.’”
jury striving to make the often difficult causation determina-
tion in a products case.”                                             Texas Rule of Civil Procedure 269 provides that during
                                                                      final arguments, “[m]ere personal criticism by counsel upon
“Defining producing cause as being a substantial factor in            each other shall be avoided, and when indulged in shall be
bringing about an injury, and without which the injury would          promptly corrected as a contempt of court.” Trial judges “are
not have occurred, is easily understood and conveys the               not required to wait for objections before correcting improper
essential components of producing cause that (1) the cause            argument, but should guard against such conduct and correct
must be a substantial cause of the event in issue and (2) it          it sua sponte.”
must be a but-for cause, namely one without which the event
would not have occurred.” This, the Court concluded “is the           Although incurable arguments are rare, nevertheless, “argu-
definition that should be given in the jury charge.”                  ments that strike at the courts’ impartiality, equality, and
                                                                      fairness inflict damage beyond the parties and the individual
JURY ARGUMENT                                                         case under consideration if not corrected. Such arguments
Living Centers of Texas, Inc. v. Penalver, 2008 WL 204502,            damage the judicial system itself by impairing the confidence
*1–4 (Tex. 2008) “Error as to improper jury argument must             which our citizens have in the system, and courts countenance
ordinarily be preserved by a timely objection which is over-          very little tolerance of such arguments.”
ruled. . . . The complaining party must not have invited or
provoked the improper argument. . . . Typically, retraction           There was no evidence here that the defendant intended to
of the argument or instruction from the court can cure any            injure or kill the decedent or that the defendant had performed
probable harm, but in rare instances the probable harm or             any medical experiments on her. Therefore, the Supreme
prejudice cannot be cured. In such instances the argument             Court concluded that this “extreme final argument” was
is incurable and complaint about the argument may be made             neither invited nor inadvertent, but rather “was designed to
even though objection was not timely made. . . .”                     incite passions of the jury and turn the jurors against defense
                                                                      counsel for doing what lawyers are ethically bound to do:
“To prevail on a claim that improper argument was incurable,          advocate clients’ interests within the bounds of law.” The
the complaining party generally must show that the argument           defendant’s attorney “was entitled to urge a smaller damages
by its nature, degree, and extent constituted such error that         amount than the plaintiffs sought without being painted
an instruction from the court or retraction of the argument           as modern-day equivalents of T-4 Project operators who
could not remove its effects. . . . The test is the amount of         experimented on and purposefully killed humans.”
harm from the argument: whether the argument, considered
in its proper setting, was reasonably calculated to cause such        Concluding that the argument “struck at the integrity of
prejudice to the opposing litigant that a withdrawal by counsel       the courts by utilizing an argument that was improper,
or an instruction by the court, or both, could not eliminate          unsupported, and uninvited” and that it was incurable, the
the probability that it resulted in an improper verdict. . . .        Supreme Court reasoned that “[f]ailure to deal harshly with
18                                                     ADVOCATE      ✯ SPRING 2008




                                                 THE
this type of argument can only lead to its emulation and the           physician]’s opinion testimony on [the offender]’s feigning.
entire judicial system will suffer as a result.” Therefore, the        In addition, prior to the jury’s verdict, [the offender] did not
Court reversed and remanded for a new a trial.                         argue or attempt to show that the evidence would not unfairly
                                                                       surprise or prejudice the State.”
COURTS OF APPEALS
SUMMARY JUDGMENTS                                                      “The burden of establishing good cause or the lack of unfair
Souder v. Cannon, 235 S.W.3d 841, 848 (Tex. App.—Fort                  surprise or unfair prejudice is on the party seeking to intro-
Worth 2007, no pet. h.) “For court records to be admissible            duce the evidence or call the witness. A finding of good cause
as evidence in support of a motion for summary judgment                or of the lack of unfair surprise or unfair prejudice must be
. . . copies of the records must be certified and attached to          supported by the record.” The trial court has discretion to
the motion.” (Emphasis in original). Here, “neither of the             determine “whether or not a party calling a witness has met
petitions from the other lawsuits that appellees attached to           its discovery burden,” which required the offender to show
their summary judgment response appear[ed] to be certified.”           “good cause” under these circumstances.
Therefore, the trial judge “should not have considered them
as summary judgment evidence.”                                         Here, the offender did not disclose “the general substance
                                                                       of [the physician]’s mental impressions and opinions with
Speck v. First Evangelical Lutheran Church of Houston, 235             respect to the question of [the offender]’s feigning a mental
S.W.3d 811, 815–16 (Tex. App.—Houston [1st Dist.] 2007,                illness. Despite the fact that [the physician] apparently stated
no pet. h.) “‘Summary judgment evidence may be filed late,             an opinion regarding this subject in a pre-trial deposition, the
but only with leave of court.’ . . . Where nothing appears in          State was entitled to go to trial and rely on the one subject
the record to indicate that the trial court granted leave to file      identified by [the physician] in his disclosure responses,
the summary judgment response late, [it is] presume[d] that            which did not expressly incorporate the opinions of [the
the trial court did not consider the response.”                        physician] that he might have expressed elsewhere.”

Here, the appellant’s affidavits were untimely because he filed        The offender’s responses to the requests for disclosure “did
them “six days before the summary judgment hearing instead             not reveal that the subject matter of [the physician]’s opinions
of seven, as required by Rule 166a(c).” The record did not             included that [the offender] was not feigning his mental
reflect that the trial judge had granted the appellant leave to        illness.” Because the offender “neither requested a finding of
file the affidavits late or that judge “otherwise considered them      good cause or a finding of no unfair surprise or prejudice to
in granting summary judgment.” Therefore, the affidavits did           the State prior to the time he rested, nor made an offer of proof
not constitute summary judgment evidence.                              to show surprise, the record fail[ed] to demonstrate that the
                                                                       trial court abused its discretion in excluding [the physician]’s
DISCOVERY                                                              proffered testimony.” Therefore, the court of appeals concluded
In re Commitment of Marks, 230 S.W.3d 241, 244–45 (Tex.                that the offender had failed to show that the trial court abused
App.—Beaumont 2007, no pet. h.) In this civil commitment               its discretion in excluding the testimony.
case, in which a jury found that an offender was a sexually
violent predator, the offender’s disclosure responses “did not         DISCOVERY SANCTIONS
provide the general substance of [the physician]’s mental              Rammah v. Abdeljaber, 235 S.W.3d 269, 273–74 (Tex.
impressions and opinions. While the response identified a              App.—Dallas 2007, no pet. h.) In this would-be-death-
subject matter, it did not include the subject of [the offender]’s     penalty-sanctions case, the appellant complained of the trial
alleged feigning of his mental illness.” Instead, the disclosure       court’s awarding expenses of $830 to the appellee under Texas
of the subject matter of the physician’s testimony “related            Rule of Civil Procedure 215.1(d) when the trial judge denied
solely to [the offender]’s competence to testify as a witness.         the appellant’s motions for discovery sanctions. However, the
Trial courts have discretion to exclude expert testimony               court of appeals held that no abuse of discretion occurred
when the subject matter and opinions related to the proposed           in the judge’s denying the appellant’s motion for sanctions
testimony have not been disclosed.”                                    because the appellant “sought only death-penalty sanctions
                                                                       without first seeking a lesser discovery sanction . . .”
After the trial court excluded the evidence, the offender “did
not request a finding or argue that good cause existed to              The court of appeals noted that the appellant had not cited
excuse his failure to disclose the general substance of [the           any authority that a trial judge could award a lesser dis-
                                                     ADVOCATE     ✯ SPRING 2008                                                    19




                                               THE
covery sanction on the judge’s own motion, and the court of         or practice of any court, other than local rules and amend-
appeals decline to hold that it is an abuse of discretion for a     ments which fully comply with all requirements of this
trial court “not to award a sanction that is not requested by       Rule 3a, shall ever be applied to determine the merits of
motion.” Furthermore, “[i]t was also within the trial court’s       any matter.” Here, the trial court “effectively applied a ‘local
discretion to award reasonable expenses to the prevailing           rule’ or ‘practice’ . . . which did not fully comply with Rule
party, including attorneys’ fees.”                                  3a, to determine the merits of this case because the deemed
                                                                    admissions were merits-preclusive.” Therefore, the court of
NOTICE OF HEARING                                                   appeals held that the trial court abused its discretion by
Approximately $1,589.00 v. State, 230 S.W.3d 871, 873–74            applying the district court’s local rule and refusing to hear
(Tex. App.—Houston [14 Dist.] 2007, no pet. h.) In this             the appellant’s motion.
contraband forfeiture case, the appellant argued that the trial
court abused its discretion “by refusing to hear her motion         JURY SELECTION
to strike deemed admissions because the rule applied by the         Smith v. Dean, 232 S.W.3d 181, 189—92 (Tex. App.—Fort
trial court impermissibly expanded the three-day period             Worth 2007, pet. filed) “Voir dire examination is largely
prescribed by the Texas Rules of Civil Procedure.” The court        within the sound discretion of the trial court, and broad
of appeals agreed.                                                  latitude is allowed for examination. . . . However, Texas law
                                                                    disqualifies venire members who are unequivocally biased or
Texas Rule of Civil Procedure 21 provides that a motion and         prejudiced. . . . The Texas Supreme Court defines bias as an
notice of hearing “shall be served upon all other parties not       inclination toward one side of an issue rather than to the other.
less than three days before the time specified for the hearing      . . . Prejudice is prejudgment, which necessarily includes
unless otherwise provided by these rules or shortened by the        bias. . . . The bias or prejudice applies not only to parties but
court.” This rule “does not expressly require that a motion and     also to certain types of cases. . . . A venire member who is
notice of hearing be filed at least three days before hearing.”     unequivocally biased or prejudiced is disqualified to serve as
(Emphasis in original). However, it does expressly require that     a juror, and the venire member cannot revive his eligibility
“a motion and notice of hearing be served on opposing parties       by recanting an earlier expression of bias or prejudice. . .
at the time of filing.” (Emphasis in original). Therefore, Rule     . Whether a juror is biased or prejudiced may be a factual
21 “effectively requires that a motion and notice of hearing        determination for the trial court to decide.”
be filed at least three days before hearing, unless otherwise
provided by the Texas Rules of Civil Procedure or shortened         “Rehabilitation of a venire member involves further ques-
by the court.” (Emphasis in original).                              tioning of a venire member who expressed an equivocal bias as
                                                                    opposed to an unequivocal bias. . . . Rehabilitation is allowed
“With certain limitations, a district court is permitted to         because biased responses may be the result of inappropriate
make local rules.” However, “no time period provided by             leading questions, confusion, misunderstanding, ignorance
[the Texas Rules of Civil Procedure] may be altered by local        of the law, or merely loose words spoken in warm debate. . .
rules[.]” Here, the State suggested that Rule 3a(2) “precludes      . If a venire member expresses equivocal bias, further ques-
application of a local rule to shorten a time period prescribed     tioning should be allowed to reinforce the biased statement
under the Texas Rules of Civil Procedure, but does not              or rehabilitate the venire member.” (Emphasis in original).
preclude application of a local rule to lengthen a time period
prescribed under the Texas Rules of Civil Procedure.” The           “If a venire member unequivocally expresses bias, the venire
court of appeals disagreed, concluding instead that “Rule 3a(2)     member is disqualified as a matter of law, and the trial court
absolutely prohibits application of a local rule that alters a      has no discretion to decide whether to strike the venire
time period set forth in the Texas Rules of Civil Procedure. .      member. . . . However, trial courts exercise discretion in
. . Rule 3a(2) does not distinguish a local rule that shortens      deciding whether to strike venire members for cause when
a time period from a local rule that lengthens a time period.       bias or prejudice is not established as a matter of law, and
. . . Therefore, the ten-day requirement prescribed by the          there is error only if that discretion is abused. . . . A trial
‘local rule’ of the [district court] improperly expanded the        court does not abuse its discretion by refusing to strike a
three-day period prescribed under the Texas Rules of Civil          juror who expresses bias when the juror equivocates or is
Procedure.”                                                         ‘rehabilitated.’ . . . In reviewing such decisions, we must
                                                                    consider the entire examination, not just answers that favor
In addition, Rule 3a(6) provides that “no local rule, order,        one litigant or the other. . . .”
20                                                   ADVOCATE     ✯ SPRING 2008




                                               THE
In this medical negligence case, after the appellants’ attorney     “Although the jurors from the ‘block group’ expressed some
explained the law to the jury panel, several of the venire          bias during voir dire, by the end of the questioning, they
members “indicated they would want higher than 51 percent           were rehabilitated. [The attorney] and the trial court spent
certainty that [the physician] made a mistake before they           time explaining the law and the burden of proof to the panel.
would make him pay.” However, the appellants’ attorney              After his explanation, [the attorney] asked each row if they
“asked this question regarding the burden of proof in a             understood the law and then asked if they could follow it
confusing manner.” He initially asked, “[I]s your attitude that     and the trial court’s instructions. None of the jurors from
you cannot follow the Court’s instructions because you need         the ‘block group’ who were ultimately empaneled raised their
more than 51 percent to prove a breach of the standard of           hands or otherwise indicated that they could not follow the
care in a medical negligence case?” Then, “without allowing         instructions or the law. This further questioning and explana-
any venireperson to respond, he asked, ‘Is there anyone that        tion allowed the jurors empaneled from the ‘block group’ to
disagrees with that?’”                                              show that they had been successfully rehabilitated. . . .”

“If trial counsel paused between these questions and none of        Here, “the jurors empaneled from the ‘block group’ merely
the venire members to whom he directed the first question           raised their hands in agreement with another juror. . . . This
responded, then their silence could have meant they could           is not bias as a matter of law; thus, the jurors here were able
follow the trial court’s instructions on the preponderance of       to be rehabilitated. . . . Because the trial court was in a better
the evidence burden of proof. However, because appellants’          position to judge the venire members’ sincerity and capacity
counsel did not pause between the two questions, then his           for fairness, it acted within its discretion by concluding that
use of the words cannot’ and ‘disagree’ in the two ques-            the ‘block group’ of jurors who raised their hands as if to say,
tions, respectively, rendered his query not only a compound         ‘Me too, Me too’ had been rehabilitated.”✯
question, but confusing due to the double negative. Some of
the venire members from the block group may have been               Robinson C. Ramsey is a shareholder with Langley & Banack,
nonresponsive to the first question, some the second, and           Inc. in San Antonio. Board-certified in Civil Appellate Law
some nonresponsive due to confusion, i.e., concerning where         and Family Law, he has written and spoken on the topics
to indicate disagreement. . . . Therefore, it was likely that       of evidence and civil procedure for the Texas Bar Journal,
the trial court did not disqualify those jurors because their       the State Bar of Texas Litigation Update Course, and the
answers could have been the result of confusion. . . .”             State Bar of Texas Advanced Civil Appellate, Civil Trial, and
                                                                    Expert Witness Courses, as well as the State Bar’s Ten-Minute
Furthermore, “the venire members from the ‘block group’             Mentor Program and the University of Houston Law Center’s
did not express unequivocal bias by merely raising their            Evidence/Discovery and Litigation/Trial Tactics Series.
hands. . . . They could have raised their hands in response
to trial counsel’s question about whether they agreed with          Luther H. Soules III is a shareholder with Langley & Banack,
another venire member.” In addition, veniremember # 26 was          Inc. in San Antonio. Board-certified in Civil Trial and Civil
the only seated juror that raised a hand when [the attorney]        Appellate Law, he is a past chairman of the Texas Supreme
asked who agreed with [another] [v]enireperson . . . and            Court Advisory Committee. He has authored books and
would require more than preponderance of evidence to award          numerous articles on evidence and civil procedure, and has
noneconomic damages. By themselves, these responses, or             lectured extensively on these topics for the State Bar, including
lack of responses, are not enough to establish bias as a matter     the Litigation Update Series and the Advanced Civil Trial,
of law. . . . Because the jurors were not biased as a matter of     Civil Appellate, Personal Injury, and Discovery Courses.
law, the trial court had discretion to decide whether to strike     He also has published law journal articles and has lectured
them for cause or to temporarily retain them on the panel           frequently on evidence and civil procedure for law school
for rehabilitation.”                                                sponsored seminars.
      ADVOCATE   ✯ SPRING 2008   21




THE

								
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