Beyond Mandamus: Writ of Injunction Secures Relief from Trial Court Order Pending Appeal

In re David Mu

Dallas Court of Appeals, No. 05-21-00323 (October 12, 2021)

Justices Myers, Partida-Kipness, and Carlyle (Opinion, linked here)

Brent Rubin

The trial court issued a protective order requiring Mu to complete a Batterer’s Intervention and Prevention Program (BIPP) no later than 30 days before the first anniversary of the order. Mu appealed and asked the trial court to stay the BIPP requirement pending that appeal, arguing that it violated his Fifth Amendment right against self-incrimination, because the course would require him to discuss his alleged bad acts before the statute of limitations had expired. The trial court denied Mu’s request to stay the BIPP requirement. So, Mu sought a writ of injunction against the BIPP requirement from the court of appeals.

An appeals court can grant writs of injunction only in limited circumstances, one being to prevent an appeal from becoming moot. Here, the Dallas Court of Appeals concluded that if Mu had to complete the BIPP course before the appeal was resolved, any relief on appeal could be ineffectual. Therefore, the court of appeals granted a writ of injunction enjoining the trial court from enforcing the BIPP requirement pending the appeal.

It’s Still the Law: Incorporating the AAA Rules Delegates Determination of Arbitrability to the Arbitrator

Holifield v. Barclay Properties, Ltd.

Dallas Court of Appeals, No. 05-21-00239-CV (October 5, 2021)

Justices Schenck (Opinion, linked here), Smith, and Garcia

Ken Carroll

        Barclay built and sold a home to the Holifields. When construction defects allegedly cropped up, the Holifields sent notice of those defects not only to Barclay, but also to others with which Barclay was hoping to do business. Because of that, Barclay sued the Holifields for tortious interference. But the contract between Barclay and the Holifields contained a broad arbitration provision, in which the parties agreed that “any controversy or claim … arising out of or relating to … this Contract [or] … the construction and/or sale of the Property” would be “submitted to binding arbitration with the AAA.” When the Holifields moved to compel arbitration of Barclay’s tortious interference claim, however, the trial court denied that motion. The Dallas Court of Appeals reversed, ruling that “it is for the arbitrator to decide whether Barclay must arbitrate its claim against the Holifields.”

        In addition to being broad in scope, the parties’ arbitration agreement provided that disputes would be arbitrated “in accordance with the Construction Industry Arbitration Rules of the AAA.” AAA Construction Rule 9 dictates that the arbitrator “has the power ‘to rule on his or her own jurisdiction.’” As a result, the Court said, the issue of arbitrability was entrusted to the arbitrator, not the trial court. “When, as here, the parties agree to a broad arbitration clause and explicitly incorporate rules empowering the arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator.” In fact, the Court said, “Where the parties’ contract clearly and unmistakably delegates the arbitrability question to the arbitrator, the court possesses no power to decide the arbitrability issue.”

        Barclays argued that in Jody James Farms v Altman, 547 S.W.3d 624 (Tex. 2018), the Supreme Court of Texas had rejected the principle that incorporation of the AAA rules constituted “clear and unmistakable evidence of the parties’ intent to delegate” the determination of arbitrability to the arbitrator. Not so, said the Dallas Court. The Supreme Court in Jody James rejected that principle only in the context of an arbitrability dispute between a party that was a signatory to the arbitration agreement and another party that was not. It did not rule on the issue in the context presented here, where both parties had agreed to delegate arbitrability to the arbitrator under the AAA rules.

Law Firm Cannot Avoid Agreement to Litigate Rather Than Arbitrate

Fee, Smith, Sharp & Vitullo, LLP v. Strunk

Dallas Court of Appeals, No. 05-21-00003-CV (September 30, 2021)

Justices Myers, Partida-Kipness (opinion available here), and Carlyle

Kelli Hinson

        The law firm Fee, Smith, Sharp & Vitullo, LLP sued its former clients for payment under a contingency fee agreement. The fee agreement contained an arbitration provision, and the firm initiated an arbitration before the AAA. The clients claimed the arbitration provision was unenforceable. So the firm filed suit in Dallas County, delivered a copy of the lawsuit to the clients’ new attorneys, and asked whether the clients preferred to resolve the dispute in court or arbitration. The letter stated: “Please discuss with your clients and let us know which forum they wish to choose to address this matter. If they choose to litigate in District Court, then please advise if you will agree to accept service of the enclosed petition on behalf of all Defendants effective as of this date and assuming you agree, we will dismiss the AAA arbitration without prejudice.”

        The clients chose arbitration, but the attorney responding to the firm’s letter was not their “trial attorney” and was not authorized to accept service. The firm had the clients personally served, and the suit was underway. After the clients answered and filed a motion to transfer venue, the firm moved to compel arbitration. But what about the agreement to proceed in District Court? The firm argued that acceptance of service and maintaining the litigation in Dallas County were conditions to its offer to litigate in court, which conditions the clients did not accept. The trial court disagreed and denied the motion to compel arbitration. The firm appealed.

        The Dallas Court of Appeals sided with the clients and affirmed the trial court’s order. It concluded a novation occurred in which the parties extinguished their arbitration agreement and formed a new agreement to litigate in District Court. The Court rejected the firm’s argument that acceptance of service was a condition to accepting the proposed novation. It concluded that allowing the clients to choose the forum for resolving the fee dispute was the only material term of the offer. The sentence “If they choose to litigate in District Court, then please advise if you will agree to accept service” merely provided “alternative subsequent actions to be taken based on the [clients’] forum choice.” The Court found no indication in the letter that the clients’ forum choice was dependent on acceptance of service. This conclusion was bolstered by the fact that the firm moved forward with effecting personal service of the lawsuit. The Court also found nothing to suggest the offer was limited to litigating in Dallas County, so the clients’ attempt to transfer venue did not invalidate the agreement.

Hey, I Didn't Rob a Bank Today – Mugshots, Defamation, and the TCPA

CBS Stations Group of Texas, LLC v. Burns

Dallas Court of Appeals, No. 05-21-00042-CV (September 27, 2021)

Before Justices Molberg, Nowell (Opinion), and Goldstein

Neil R. Burger

        Unlike most of the appeals in the Fifth Court involving the Texas Citizens Participation Act (TCPA), CBS Stations Group of Texas, LLC v. Cedric Burns did not involve a dispute about whether the TCPA applied to the claims asserted—claims for defamation and intentional infliction of emotional distress (IIED) arising out of CBS’s mistaken use of Mr. Burns’s mugshot while airing a story on an armed bank robbery and subsequent high-speed chase. Instead, the issue before the Court was whether Mr. Burns had met his burden to “establish by clear and specific evidence a prima facie case for each essential element of [his] claim.”

        A Cedric Burns was arrested for bank robbery. But, it was not the Cedric Burns depicted in the mugshot provided to CBS by the Tarrant County Sheriff’s Office as it prepared to air a story on the crime. People who knew the Cedric Burns whose mugshot was displayed on TV notified him of the story, and he promptly contacted CBS about its mistake. CBS then removed all references to the story and the photograph from its digital platforms.

        Burns sued CBS for defamation and IIED. In response to CBS’s TCPA motion, Burns admitted that the story was a matter of public concern, thus making the TCPA applicable, but asserted that he had established all elements of his causes of action. The trial court apparently agreed, and denied the motion. The Dallas Court of Appeals reversed, rendered judgment granting the motion, and remanded for determination of fees and possible sanctions.

        A key issue decided by the Court was whether CBS acted with the “requisite degree of fault” for a defamation claim when it used the mugshot provided by the Sheriff. The applicable degree of fault is determined by whether Burns was a public figure. A public figure must prove malice, while a private individual must only prove negligence. Here, because Burns had nothing to do with the story, and was not otherwise widely known, the Court considered him a private individual, and therefore analyzed the evidence for CBS’s negligence.

        For broadcasters, defamation requires that the person knew or should have known that the statement at issue was false. The content must warn a reasonably prudent editor or broadcaster of its defamatory potential. Here, there was nothing in the record showing that CBS knew or should have known that the mugshot provided to it by the Tarrant County Sheriff’s Office was not the correct Cedric Burns arrested earlier in the day. The Court of Appeals found that lack of proof to be determinative, and rendered judgment dismissing the defamation claim under the TCPA.

        Likewise, the Court dismissed the IIED claim. IIED is a “gap filler” claim limited to rare circumstances when egregious conduct causes emotional harm, but no other cause of action applies. Burns’s allegations and evidence forming his IIED claim were the same as his defamation claim. Therefore, it also failed.

Preserve Error—Even in Arbitration

Alia Realty LLC, EED, Inc. v. Alhalwani

Dallas Court of Appeals, No. 05-21-00265-CV (September 23, 2021)

Justices Schenck, Smith (opinion available here), and Garcia

Kelli Hinson

        The Dallas Court of Appeals reversed a trial court’s judgment vacating the arbitration award in this case and rendered judgment confirming that award, finding that filing a motion for continuance alone was not enough to preserve error.

        Parties involved in a series of real estate investments and construction projects agreed to resolve any potential disputes in an “expedited JAMS arbitration.” The agreement required the arbitration proceeding to occur within three months of a demand for arbitration, or “as close thereto as the parties and arbitrator’s schedule allowed.” Alia Realty filed a claim for arbitration against Alhalwani on July 6, 2020, seeking over $2 million in damages. Alhalwani answered and filed counterclaims.

        The deadline for designating expert witnesses was September 1, 2020, and the deadline for supplemental or rebuttal expert reports was September 18. Arbitration was set for October 13-15, 2020. On September 23, Alhalwani filed a motion for continuance, arguing he had attempted in good faith to meet the scheduling order deadlines but needed more time to examine the “thousands upon thousands” of accounting transactions at issue in the suit and present an expert report. The arbitrator denied the continuance, but gave Alhalwani until October 2, 2020 to file a supplemental expert report. Alhalwani met the new deadline, and the parties proceeded to arbitration as scheduled.

        After the arbitrator found against Alhalwani and awarded over $500,000 to Alia Realty, Alhalwani filed a motion to vacate the award in district court, arguing the arbitrator violated Civil Practice & Remedies Code § 171.088(a)(3)(B) by refusing to postpone the arbitration. The trial court agreed and vacated the award.

        The Dallas Court of Appeals reversed and rendered, confirming the arbitration award. It found that Alhalwani failed to preserve his complaint about the arbitrator’s denial of a continuance. The Court first noted that the preservation requirements of TRAP 33.1 apply to arbitrations. Alhalwani’s filing of a motion for continuance was not sufficient to preserve error as to the timing of the arbitration because, in response to that motion, the arbitrator granted Alhalwani additional time to file a supplemental expert report, which seemed to be Alhalwani’s primary reason for requesting the continuance. The Court held that, once Alhalwani was permitted to and did file a supplemental expert report and then proceeded to arbitration without further complaint, he left the arbitrator with the impression he was ready to proceed with the evidence he had obtained. The Court also noted that it was Alhalwani’s burden to prove error and, without a transcript from the continuance hearing, it was impossible to know who suggested moving the expert deadline or whether the parties agreed with the decision at the time. Because Alhalwani also failed to provide a transcript of the arbitration hearing itself, he had no evidence that he objected to going forward with the arbitration after being given additional time to submit an expert report. “Counsel’s statements in post-arbitration briefing and briefing in this Court concerning what occurred is not a substitute for a record of those proceedings.” Therefore, Alhalwani failed to preserve the alleged error.

First Things First: Due Order of Hearings for Special Appearances

Jayco Hawaii, Inc. v. Viva Railings, LLC

Dallas Court of Appeals, No. 05-20-00528-CV (August 25, 2021)

Chief Justice Burns and Justices Molberg and Goldstein (Opinion, linked here)

Ken Carroll

Most lawyers know and carefully observe the “due-order-of-pleadings” requirement for a special appearance. That is, under Rule 121a(1), a special appearance must be filed “prior to a motion to transfer venue or any other plea, pleading or motion.” Otherwise, the challenge to personal jurisdiction is waived. But Rule 120a(2) embodies a “due-order-of-hearings” requirement, as well, directing that a special appearance “shall be heard and determined before a motion to transfer venue or any other plea or pleading may be heard.” Failure to follow that “due-order” requirement can be fatal to any determination taken out of turn, before the special appearance is resolved.

        Jayco initiated an arbitration in Dallas County pursuant to an arbitration agreement that specified venue in that locale. Viva prevailed in the arbitration and filed suit in a Dallas County District Court to confirm the award. Jayco responded with a special appearance, arguing it was not subject to personal jurisdiction in Texas, and set a hearing on that special appearance. But Viva obtained an earlier setting on its motion to confirm the arbitration award, at which the court granted the motion to confirm and entered judgment for Viva. The Dallas Court of Appeals reversed and remanded, however, because “[t]he rules of civil procedure give a trial court no discretion to hear a plea or pleading, including a motion to confirm an arbitration award, before hearing and determining a special appearance.” Viva argued that Jayco had waived any objection to personal jurisdiction by, among other things, contractually agreeing to a Dallas County venue for the arbitration. But, the appeals court said, “Whether a party has waived its challenge to personal jurisdiction is an issue to be decided by the trial court in connection with that party’s special appearance.” Because the trial court had not conducted a hearing on the special appearance or ruled on it, the Court of Appeals had “no authority to determine the merits of Viva’s waiver arguments” in the first instance. The Court declined Viva’s invitation to construe the order confirming the arbitration award as implicitly overruling Jayco’s special appearance, because Jayco was given no notice that its special appearance would be addressed at the confirmation hearing, “thus depriving Jayco [of] the opportunity to put forth evidence in support of its special appearance.”

        In other words, first things first: No hearing on the special appearance, no discretion to jump ahead and rule on the merits.

HIGHLAND PARK IMMUNE FROM SUIT FOR DEATH OF OFFICER PERFORMING EXTRA-DUTY SECURITY SERVICE AT PRIVATE RESIDENCE

Town of Highland Park v. McCullers

Dallas Court of Appeals, No. 05-19-01431-CV (June 29, 2021)

Chief Justice Burns (Dissent linked here), and Justices Pedersen, III (Opinion linked here) and Goldstein (Concurrence linked here)

Lyndon Bittle

               The Town of Highland Park cannot be sued by the survivors of an off-duty police officer killed in a flash flood while providing security at a private residence through an arrangement coordinated by the Town, according to a divided Dallas Court of Appeals panel. 

        SMU police officer Calvin Marcus McCullers accepted an assignment offered by the Highland Park Department of Public Safety to provide after-hours security, at a property owner’s expense, for a private residence then under construction. A little more than two hours after he arrived at the property in his personal car, a torrential downpour flooded the area where he was parked and swept him and his car over an embankment into Turtle Creek. His body was discovered several weeks later on the banks of the Trinity River more than three miles downstream. 

        Officer McCullers’s survivors sued Highland Park and others for negligence and other torts. Asserting governmental immunity from such claims, Highland Park filed a plea to the jurisdiction, which the trial court denied after the parties conducted limited discovery. On interlocutory appeal, the core issue was whether coordinating a program to provide security services to private residences by off-duty police officers is an exercise of “police protection” and thus a governmental function for which the Town is generally immune from suit, or a “proprietary” function to which immunity does not apply. 

        The distinction between governmental and proprietary functions, which applies only to municipalities, is codified in the Texas Tort Claims Act, chapter 101 of the Civil Practice and Remedies Code. The TTCA defines proprietary functions as those “that a municipality may, in its discretion, perform in the interests of the inhabitants of the municipality”—but not including the list of 36 functions expressly identified as governmental functions. The first item on this list is “police and fire protection and control.” Justices Pedersen and Goldstein, in separate opinions, held “the Town’s coordination of Officer McCullers to provide law enforcement services” at the residence was an exercise of “the governmental function of police protection.” Justice Goldstein’s concurrence, elaborating on the statutory analysis, cited precedent that plaintiffs “may not split various aspects of a city’s operation into discrete functions and recharacterize certain of those functions as proprietary.” She concluded her opinion by noting “the ongoing struggle associated with judicial analysis and application of the governmental-proprietary dichotomy” and other aspects of governmental immunity. She urged the Legislature to provide “more certainty” on these issues for Texas citizens and governmental bodies. 

        Chief Justice Burns, dissenting, said his “colleagues rely on labels instead of function.” He denied that coordinating “private security services for private property owners,” so that an off-duty officer was “essentially functioning as a night-watchman for one citizen,” fits within the statutory meaning of “police protection.” Instead, applying the factors articulated by the Texas Supreme Court for breach-of-contract claims in Wasson Interests, Inc. v. City of Jacksonville (1998), he concluded that “in providing private security services” Highland Park “was acting in a proprietary role.” 

        One final note: finding the program is a governmental function does not necessarily end the immunity analysis. Under the TTCA, governmental immunity is waived in circumstances involving “personal injury or death caused by a condition or use of tangible personal or real property”—if the plaintiff complies with statutory notice requirements or the governmental entity has “actual notice” of the injuries and its potential liability. Justice Pedersen, extensively describing the record and controlling precedent, concluded plaintiffs failed to provide timely notice and rejected plaintiffs’ argument that Highland Park had actual subjective knowledge of its alleged fault in causing or contributing to the officer’s death. Justice Goldstein concurred in a footnote, while identifying the “actual subjective awareness” test as ripe for review by the Legislature. Chief Justice Burns did not mention this issue.  

SCOTx Holds Academy Sports Immune from Suit for Selling Assault Rifle Used in Sutherland Springs Mass Shooting

In re Academy, Ltd.

Supreme Court of Texas, No. 19-0497 (June 25, 2021)

Justice Lehrmann (Opinion, linked here), Justice Boyd Concurring (linked here)

Ken Carroll

        In November 2017, Devin Kelley shot 25 people to death, and wounded 20 more, in the First Baptist Church in Sutherland Springs, Texas. Kelley wielded a semi-automatic assault rifle he purchased from an Academy Sports store in San Antonio. Academy sold the rifle as part of a pre-packaged unit that included a 30-round large-capacity magazine (“LCM”), with a single SKU number and a single price for all components in the package. Kelley should not have been able to purchase the rifle, because he had been convicted of domestic assault in a military court-martial. But the Air Force failed to have that disqualifying conviction information entered on the Criminal Background Check System, and so that system green-lighted the sale when Academy ran the required check. The survivors and families of the victims of the shooting argued the sale shouldn’t have happened for a second reason: Kelley was a Colorado resident, and Colorado prohibits LCMs like that sold as part of the package bought by Kelley. In fact, another retailer—Dick’s Sporting Goods—had previously refused to sell to Kelley. But Academy interpreted the laws to allow this sale in Texas. So, Kelley got his gun. Survivors and families of victims sued the government in federal court for failing to enter the shooter’s conviction information on the background-check system. Holcombe v. United States, No. 5:18-cv-00555-XR (W.D. Tex.). And they sued Academy in state court for selling the gun-and-LCM package to the shooter, an out-of-state resident.

        In the state court case, Academy moved for summary judgment under the federal Protection of Lawful Commerce in Arms Act (“PLCAA”), which protects firearms retailers and manufacturers from certain claims arising out of the criminal conduct of gun purchasers. The trial court denied summary judgment, and the Fourth Court of Appeals refused to disturb that ruling. But the Texas Supreme Court granted mandamus and overturned that decision, finding the PLCAA did in fact bar the plaintiffs’ lawsuit against Academy.

        The Court rejected the plaintiffs’ arguments that their case fell within either of two exceptions to the PLCAA. First, the Court held the sale did not run afoul of the federal Gun Control Act, violation of which would fall within the “predicate exception” to the PLCAA. The Gun Control Act prohibits sales to out-of-state buyers unless “the sale, delivery, and receipt fully comply with the legal conditions of sale in both such States,” i.e., the state of sale and the state of the purchaser’s residence. There was no dispute it would not have been legal in Colorado for Kelley to buy the package he bought from Academy, containing the 30-round LCM. The Supreme Court, however, ruled that the Gun Control Act addressed only sales of “firearms” but not LCMs—even though, in this instance, the pre-packaged unit bought by the shooter contained both, and there could have been no “sale” of the “firearm” without the LCM. Second, it rejected application of the PLCAA exception for “negligent entrustment” claims, ruling that Texas does not recognize a claim for negligent entrustment based on the sale of a chattel, as opposed to temporary entrustment where the owner retains ultimate control. Finally, the Court concluded mandamus was appropriate because the PLCAA protected gun retailers and manufacturers from being subjected to lawsuits, rather than merely providing them a defense from liability—something that could have been addressed on appeal from a final judgment, rather by mandamus.

        For those disappointed Academy claimants who are also plaintiffs in the Holcombe lawsuit against the government, there may be a small silver lining in the Supreme Court’s decision. The government has designated Academy a “responsible third party” in that case, seeking to have the court allocate some of the responsibility for the shooting to Academy, based on the government’s contention that Academy did in fact violate federal and Colorado gun laws. If such responsibility were assigned to Academy, that would reduce the government’s own liability to the plaintiffs and, with it, the plaintiffs’ potential recovery. Now, however, there’s a chance the trial court in Holcombe will strike the designation of Academy as a responsible third party, based on the Texas Supreme Court’s decision. That, however, remains to be seen.

SCOT Holds Amazon Not Liable for Defective Products It Markets for Other Vendors

Amazon.com, Inc. v. McMillan

Supreme Court of Texas, No. 20-0979 (June 25, 2021)

Opinion by Justice Busby (linked here)

Dissent by Justice Boyd (linked here)

Lyndon Bittle

        Answering a question certified by the Fifth Circuit, the Texas Supreme Court held Amazon is not a “seller” under Texas product liability law when it does not hold title to the product but controls the process of the transaction and delivery through the “Fulfillment by Amazon” program.

        As discussed in a previous Sua Sponte post, the McMillan plaintiffs allege injuries to a 19-month-old child who swallowed a battery from a TV remote purchased on Amazon’s website. The listed seller was “USA Shopping 7693,” which Amazon traced to a vendor account owned by Hu Xi Jie—an individual or company that neither Amazon nor plaintiffs have been able to contact or serve. Amazon’s potential liability for the child’s injuries turns on whether it is a “seller” of the product under the Texas Products Liability Act, chapter 82 of the Civil Practice and Remedies Code. A federal district court held Amazon was a seller, i.e., “engaged in the business of distributing or otherwise placing” the product in the stream of commerce. The court certified its order for interlocutory appeal under 28 U.S.C. § 1292(b), and the Fifth Circuit submitted the issue to the Texas Supreme Court in January 2021.

        Fifth Circuit Judge (and former Texas Supreme Court Justice) Don Willett authored the opinion certifying the question, noting the Supreme Court’s “track record of resolving cases promptly.” Justice Busby’s opinion acknowledges the Fifth Circuit’s comment and responds in a footnote, “Challenge accepted.”

        The case focuses on a specific (albeit large) subset of Amazon transactions—products listed on the product-description and order-confirmation pages as “sold by” a vendor other than Amazon and delivered from Amazon warehouses through the “Fulfillment by Amazon” (FBA) program. These transactions differ from other purchases, including products listed as “sold by” and delivered by Amazon, products listed as “sold by” third parties and shipped directly to customers by the vendor, and products sold through other websites or stores and delivered through the FBA program.

        The Supreme Court’s construction of the Product Liability Act’s definition of “seller” is grounded in the presumption that “the Legislature uses statutory language with complete knowledge of the existing law and with reference to it.” (Quotation omitted.) Because the statutory definition is virtually identical to that of section 402A of the Second Restatement of Torts and Texas cases applying it, the Court concludes the statute “does not expand liability for those not considered sellers under common law.” Accordingly, the Court holds “Amazon is not a ‘seller’ under Texas law when it does not hold or relinquish title to an allegedly defective product.” It cannot, therefore, be liable as a non-manufacturing seller under the Product Liability Act.

        Justice Boyd, joined by Justice Devine, dissented, and would have answered the certified question “by holding that Amazon.com is a seller under [the statute] when it ‘controls the process of the transaction and delivery’ of a product through its FBA program, regardless of whether it ever holds title to the product.” This construction is compelled, said the dissent, by the plain meaning of the statute’s language when it was enacted in 1993. The dissent acknowledged the presumption that the Legislature was aware of case law when enacting a similar definition, but insisted “we may not presume that it was aware of what we would hold twenty-eight years later.”

Appraisal Based on Non-Comparable Sales Fails Reliability Test

Bank of Texas v. Collin Central Appraisal District

Dallas Court of Appeals, No. 05-19-00568-CV (June 22, 2021)

Justices Myers, Nowell (Opinion linked here), and Goldstein

Lyndon Bittle

        Bank of Texas appealed a judgment denying its challenge to CCAD’s tax appraisal of two properties. The bank argued the trial court abused its discretion by striking the bank’s appraisal experts for not properly applying the “income method,” one of three appraisal methods recognized by the Tax Code. The Dallas Court of Appeals affirmed, holding the trial court could reasonably have concluded “that the comparables relied on by the [bank’s] appraisers, rents for office buildings and retail properties, were not comparable to the property being valued, branch banks.” This “analytical gap” failed the reliability test articulated by the Texas Supreme Court in Gammill v. Jack Williams Chevrolet (1998) and its progeny.

        The appeals court rejected the bank’s argument (a common refrain of proponents of expert opinions) that CCAD’s complaints went “to the weight of the evidence, not its admissibility.” The court explained that whether an “appraisal is based on non-comparable sales is an issue for the trial court in determining admissibility,” and thus within its discretion. The appeals court also rejected the notion that “real estate appraisers are unique and somehow different from other experts; that their testimony is for the jury and not subject to reliability requirements.” To the contrary, the court said, “Courts must act as gatekeepers of expert testimony; appraisers do not get a free pass.”