Source: https://jrjoneslaw.wordpress.com/category/uncategorized/
Timestamp: 2019-04-21 02:49:35+00:00

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The Supreme Court in Texas issued an opinion on April 5, 2019 that effectively changes the statute of limitations analysis on civil conspiracy claims in Texas. See Agar Corporation, Inc. v. Electro Circuits International LLC, 2019 Tex. LEXIS 351 (April 5, 2019). The Supreme Court of Texas also clarified its position on whether a civil conspiracy claim is an independent tort or a theory of vicarious liability and held that it was theory of vicarious liability and a derivative claim that depends on some underlying tort or illegal act. Because a civil conspiracy requires an underlying tort, most civil conspiracy claims should accrue when the underlying tort claim causes harm to the plaintiff, that is, the same time as the tort claim against the primary wrongdoer. Further, limitations run separately for each such tortious act.
Agar was a summary judgment appeal. The trial court granted summary judgment on various tort claims based on the general two-year statute of limitations generally applicable to torts at section 16.003 of the Texas Civil Practice and Remedies Code. Included in the grant of summary judgment were various civil conspiracy claims. The court of appeals affirmed the trial court’s decision and the issue before the Supreme Court of Texas was what statute of limitations applies to a claim of civil conspiracy. Texas. See Agar Corporation, Inc. v. Electro Circuits International LLC, 2019 Tex. LEXIS 351, *1.
The Supreme Court of Texas held that it did not agree that section 16.003 of the Texas Civil Practice and Remedies Code universally applies to claims of civil conspiracy. Because civil conspiracy is a derivative tort that “depends on participation in some underlying tort,” the Supreme Court held that the applicable statute of limitations on a civil conspiracy claim must coincide with that of the underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.” See Agar Corporation, Inc. v. Electro Circuits International LLC, 2019 Tex. LEXIS 351, *1-2, citing, Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). Because one of the claims in Agar may not be barred by the applicable statute of limitations, the decision of the court of appeals was reversed in part and affirmed in part.
The Agar opinion has a lot of meat on it and if you are considering adding a civil conspiracy claim to your pleadings, it is a must read as it also sets out the elements of civil conspiracy and discusses what other jurisdictions have decided and why the court reached the opinion it did. The Supreme Court also goes through an analysis and finds that while civil conspiracy is a cause of action, it is not an independent tort.See Agar Corporation, Inc. v. Electro Circuits International LLC, 2019 Tex. LEXIS 351, *9. The court finally goes to great pains to point out that damages come from the underlying wrongful act, not the conspiracy itself. See Agar Corporation, Inc. v. Electro Circuits International LLC, 2019 Tex. LEXIS 351, *9, citing, Tilton v. Marshall, 925 S.W.2d 672, 680-681 (Tex. 1996).The opinions in this blog are solely the author’s and any comments, suggestions, or replies can be sent to john@jrjoneslaw.com.
The United States Supreme Court’s unanimous opinion in Obduskey v. McCarthy & Holthus LLP, Case No. 17-1307, 2019 U.S. LEXIS 2090, ___U.S. ___ (March 20, 2019) held that a business engaged in no more than a nonjudicial foreclosure proceeding is not a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”), except for the limited purposes of Section 1692f(6) dealing with the enforcement of security interests. The opinion also continues the shift into a more mechanical and textual analysis and approach used by the current United States Supreme Court.
The facts of this case are straight forward. Obduskey defaulted on his mortgage and in 2014, McCarthy & Holthus, on behalf of its client, sent a notice initiating a nonjudicial foreclosure. The notice complied with the mandatory notice under Colorado law and once received by Obduckey, Obduskey responded demanding validation of the debt as allowed under the FDCPA. McCarthy & Holthus did not respond and simply initiated a new nonjudicial foreclosure in 2015. Obduskey then sued McCarthy & Holthus under the FDCPA. The issue before the courts was very limited.
As restated by Justice Breyer, the question before the court was “Does it mean that one principally involved in the enforcement of security interests is not a debt collector (except for the purposes of section 1692f(6))? If that is true, then numerous other provisions of the FDCPA do not apply or does it simply reinforce the fact that those principally involved in enforcement of security interests are also subject to the other provisions of the FDCPA? Strictly reading the statute, Justice Breyer, writing for an unanimous court, held that the last sentence does (with its section 1692f(6) exception) place those whose principal purpose is the enforcement of security interests outside the scope of the primary debt collector definition at section 1692a(6), where the business is engaged in no more that a nonjudicial foreclosing like the one before the court.
This is an important opinion in Texas as Texas is one of the states that allows for nonjudicial foreclosures on real property loans. However, it can also be a trap for the unwary as it is an extremely narrow decision and only deals with situations when a nonjudicial foreclosure action simply meets the minimum requirements of state law and does not do more. Additional actions by McCarthy & Holthus could have easily tipped the scale to where the Supreme Court could have gone the other way on this decision and found that other sections of the FDCPA applied to any additional actions.
The opinions in this blog are solely the author’s and any suggestions, comments or replies can be sent to john@jrjoneslaw.com.
There has been significant litigation in the last few years over individuals trying to circumvent the requirements set out in the Texas Real Estate Licensing Act to recover a commission for the sale of real property in Texas. Section 1101.806(c) of the Texas Real Estate Licensing Act entitled “Liability for Payment of Compensation or Commission” is the statute of frauds provision of the Real Estate Licensing Act (hereinafter “RELA”).
Strict compliance is required with RELA and an agreement to pay a real estate commission must be in writing or it is not enforceable. Lathem v. Kruse, 290 S.W.3d 922 (Tex. App.– Dallas 2009, no pet.); see also Expo Holdings, LP v. Jacobson, 2010 Tex. App. LEXIS 6851 (Tex. App. – [14th Dist.] 2010, n.w.h.). RELA also limits the persons who can receive a commission and a person must be either a licensed real estate agent or an attorney to receive a commission for the sale of real estate in Texas. See Tex. Occ. Code 1101.806 (b). Therefore, in order to recover for a commission, the agreement to do so must be in writing and paid to either a licensed real estate agent or attorney. Despite the plain language of the statute, creative attempts continue to pop-up around Texas to try and circumvent the requirements of RELA.
Texas courts have strictly construed RELA because of the policy to protect the public and have insisted on compliance with the RELA regardless of the types of claims made. Texas courts also look to the substance, not the form of the contract at issue to determine the applicability of the RELA. McKellar v. Marsac, 778 S.W.2d 573, 575 (Tex. App.–Houston [1st Dist.] 1989, no writ) (holding that when RELA applies and its requirements are not met, courts have denied recovery when fraud, conspiracy, deceit, quantum meruit and breach of contract have been plead); See Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631,634 (Tex. 1997) (rejecting tortious interference claim by broker against lessors because claim wholly derivative of unenforceable oral commission agreement and only translates into loss of expectancy of receiving a commission at the end of lease negotiations). Even when someone introduces a party and helps locate property and negotiate the sales transaction, they are not entitled to a commission unless they are a person entitled to recover a commission under RELA and the fee agreement is in writing and signed by the parties. See Expo Holdings, LP v. Jacobson, 2010 Tex. App. LEXIS 6851 (Tex. App. – [14th Dist.] 2010, n.w.h.).
The Texas Real Estate Licensing Act is designed to protect the public and rightfully, in my opinion, requires that any fee agreement be in writing and can only be paid to a licensed real estate agent or an attorney. The most valuable asset people own is their home and protections are necessary. The opinions in this blog are solely the author’s and any comments, suggestions and replies can be sent to john@jrjoneslaw.com. Happy Halloween!

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