Source: http://dallas-appellate.blogspot.com/
Timestamp: 2019-04-23 20:39:29+00:00

Document:
Comerica Bank sued Lone Star, a private equity fund, and several of its portfolio companies after those portfolio companies failed to pay a loan guaranteed by Lone Star. The accounts receivable, inventory, equipment, fixtures, and other personal property of the portfolio companies served as collateral for the loan. Because the portfolio companies were insolvent and did not have assets adequate to cover the balance of the loan, Comerica sought and obtained a temporary injunction preventing Lone Star from dissipating funds received from a recent capital call to prevent those funds from becoming unavailable to satisfy Comerica’s claim on the loan and guarantee. On appeal, Lone Star argued the district court had abused its discretion because Comerica had not established it would suffer irreparable injury for which it had no adequate remedy at law.
The Dallas Court of Appeals held the lower court had abused its discretion by failing to follow established precedent prohibiting trial courts from issuing injunctions to freeze defendants’ assets simply to assure payment of future judgments. The Court echoed concerns expressed by the United States Supreme Court that allowing for such injunctions would create a race to the courthouse among creditors where insolvent or nearly insolvent debtors were concerned—with the fastest creditor “licensing himself, as first hog to the trough, to all of its contents.” Further, the Court said, such a practice would render obsolete statutory remedies like garnishment, attachment, and receivership.
The Court distinguished this general rule, however, from instances in which “there is a logical and justifiable connection between the claims alleged and the acts sought to be enjoined, or where the plaintiff claims a specific contractual or equitable interest in the assets it seeks to freeze.” Of the millions Comerica sought to sequester, $800,000 was an accounts receivable payment received by one of the insolvent portfolio companies, which Lone Star had then transferred to itself and refused to turn over to Comerica. Because that money was collateral for the loan in question, the Court found it was logically and justifiably connected to Comerica’s breach-of-contract claim. It therefore affirmed the trial court’s temporary injunction with respect to that amount.
Finally, the Court rejected Lone Star’s argument that the trial court’s failure to find it insolvent prevented Comerica from demonstrating an inadequate remedy at law. While insolvency can be sufficient to show an inadequate remedy, the Court explained, it is not necessary. Inadequacy might be shown, as in this case, by a defendant’s limited resources and an unwillingness to pay.
In re Yamaha Golf-Car Co.
In this mandamus proceeding, the Dallas Court of Appeals held that the relator waived its right to pursue mandamus relief by failing to timely challenge a trial court ruling contained in an email to the parties, even though no signed, written order was issued until months later.
The underlying lawsuit involved injuries to a child caused by a golf-car accident. The defendant, Yamaha, moved to designate emergency medical care providers as responsible third parties under Chapter 33. Plaintiffs filed a motion to strike, asserting that Yamaha had failed to meet the pleading and proof requirements of Chapter 74 concerning medical-care providers in emergency situations.
A month after the court held a hearing on that and other motions, the Judge sent an email to the court administrator stating that she needed “the following orders,” and listing the pending motions with an indication as to the court’s ruling on each, including that the motion to strike was “Granted.” The court administrator forwarded the Judge’s email to all counsel, and requested orders be submitted.
So, the next time a court announces a ruling orally, in an email, or in some other informal fashion, think twice about waiting for a signed, written order before pursuing mandamus.
The Texas Supreme Court issued two opinions today interpreting and applying the Local Government Contracts Act in cases in which cities had claimed governmental immunity. The Court found immunity had been waived in one case, but not the other.
The district court denied the City’s plea to the jurisdiction, and the Fort Worth Court of Appeals affirmed. The core issue was whether the employment manual was a “contract subject to this subchapter,” defined as “a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the … entity.” §271.151(2). The Court of Appeals held the “unilateral contract” reflected in the employment manual was subject to the statute, and affirmed the trial court’s denial of the City’s plea to the jurisdiction. The Supreme Court reversed, holding that the City’s policy did not create an enforceable contract because the disclaimer effectively negated any intent to do so.
In Hays Street Bridge Restoration Group v. City of San Antonio, it was undisputed that a contract was formed by a Memorandum of Understanding between the parties concerning funding for restoration of the Hays Street Bridge and creation of a park. When the City decided not to use the property for a park and sold it to Alamo Beer Company, the Restoration Group sued for specific performance of the MOU. The City claimed immunity, but the trial court rejected that argument and entered judgment requiring the City to comply with the agreement. The San Antonio Court of Appeals reversed and rendered judgment for the City. The Supreme Court, citing its 2014 Zachry Construction opinion, held that Local Government Code § 271.153 limited damages that can be awarded against the City for breach of contract, and thus narrowed the waiver of immunity provided by § 271.152 (quoted above). However, because § 271.153 says nothing about the equitable relief of special performance, § 271.152 waives the City’s immunity for such claims. The Court remanded to the Court of Appeals for consideration of other defenses raised by the City that had not previously been addressed.
Reyes sued D Magazine and the DSO for, among other things, defamation, tortious interference, and conspiracy. Both defendants moved for summary judgment, partly on the basis that some of the statements at issue were constitutionally protected, and partly on other, nonconstitutional grounds. When the trial court granted the motions in part and denied them in part, the magazine and the DSO appealed under § 51.014(a)(6) of the Civil Practice & Remedies Code, which provides for interlocutory appeal when a trial court “denies a motion for summary judgment that is based in whole or in part” on a defense grounded in the First Amendment’s free speech and free press guarantees. The Dallas Court of Appeals, however, concluded it lacked jurisdiction to review the trial court’s denial of the DSO’s motion regarding tortious interference, saying interlocutory review under § 51.014(a)(6) “is limited to the denial of summary judgment on claims or defenses implicating rights of free speech or free press”—an issue on which intermediate courts of appeals had disagreed.
The Supreme Court reversed, holding that whenever an appeal is triggered under § 51.014(a)(6), the statute’s plain language extends review to the entire order denying summary judgment and not just to those portions of the order addressing constitutional claims or defenses. The Court discounted earlier characterizations of the interlocutory-appeal statute as a “narrow exception” to general rules of appealability, an exception that must be “strictly construed.” “Characterizations of textual interpretations as ‘strict,’ liberal,’ ‘narrow,’ ‘broad,’ and the like,” the Court said, “are not helpful when, as is usually the case, the real goal is simply a ‘fair’ reading of the language.” Carefully parsing that language here—and particularly the statute’s authorization of an appeal from an order that denied a motion “based in whole or in part” on constitutional guarantees—the Court held that § 51.014(a)(6) allowed the DSO to appeal from the entire order denying its motion, on all grounds. The Court therefore proceeded to review the trial court’s denial of the DSO’s motion for summary judgment on tortious interference, a review that involved no constitutional defenses. It reversed that denial and remanded for the trial court to render judgment for the DSO.
Plaintiff Slaver alleges she was injured when a water-meter cover flipped open under her, causing her to fall. The City of Richardson argued Slaver’s claim against it should be dismissed on the grounds of sovereign immunity because it was based on an alleged premises defect about which the City had no knowledge. Slaver argued the claim was based on the condition or use of tangible personal property, so knowledge of the alleged defect was not necessary for waiver of immunity. The trial court agreed with Slaver and denied the City’s motion to dismiss.
The Dallas Court of Appeals sided with the City. There was no dispute that the water meter was in the ground under the level of the parking lot where Slaver fell, and when allegedly defective property is affixed to land or other property, the case involves a premises defect. The Court ruled that the water meter included all of its integral parts, including the cover, regardless whether the cover could be removed. But even if the cover itself could be considered tangible property, an item of personal property that creates a dangerous condition on real property is a premises defect. “The distinction lies in whether it is the actual use or condition of the tangible personal property itself that allegedly caused the injury, or whether it is a condition of real property—created by an item of tangible personal property—that allegedly caused the injury.” Because the Court concluded the case involved a premises defect and there was no evidence the City had actual knowledge of the dangerous condition, the Court reversed the trial court’s order denying the City’s plea and dismissed Slaver’s claims for lack of jurisdiction.
Rules 192.3 and 194.2 permit a party to request discovery of all materials that have been provided to, reviewed by, or prepared by or for an expert in anticipation of the expert’s testimony. If you have designated your own client or a client representative as an expert witness, does that mean you have to turn over documents provided to the client that would otherwise be protected by the attorney-client privilege? The Supreme Court of Texas says no.
The City of Dickinson sued Texas Windstorm, asserting a claim for property damage caused by Hurricane Ike. In response to the City’s summary judgment motion, Texas Windstorm submitted an affidavit from Paul Strickland, its corporate representative and senior claims examiner. The affidavit included both factual and expert opinion testimony. The City subsequently learned that Strickland’s affidavit had been revised in a series of emails between Strickland and Texas Windstorm’s counsel. Not surprisingly, the City wanted to see those emails, and the trial court ordered their production. Texas Windstorm sought mandamus relief, and the court of appeals held that the emails were privileged and that the trial court abused its discretion in ordering their production. The City then sought mandamus relief from the Texas Supreme Court.
Siding with Texas Windstorm and the court of appeals, the Supreme Court held the documents were privileged and protected from discovery. The Court noted that, although the discovery rules permit a party to request documents provided to the other side’s testifying expert, they do not necessarily require the other side to produce such documents. Any such request must be evaluated in light of the other discovery rules. In addition, the official comments to Rule 194 explain that, although a party cannot withhold such documents based on the work-product doctrine, it “may assert any [other] applicable privileges.” The Court also focused on the importance of the attorney-client privilege and noted that a “lawyer’s candid advice and counseling is no less important when a client also testifies as an expert.” It therefore held that the documents were privileged and the court of appeals did not abuse its discretion in vacating the trial court’s discovery orders.

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