Federal Statute Nullifies Arbitration Agreement in Sexual Assault Case

Whataburger Restaurants, LLC v. Garcia

Dallas Court of Appeals, No. 05-26-00093-CV (October 15, 2026) 
Justices Miskel, Breedlove (Opinion linked here), and Jackson

Ken Carroll

    Arbitration agreements are favored creatures. Courts try hard to enforce them. But when the dispute at issue arises from a claim of sexual assault or harassment, a recently enacted federal statute can bar enforcement of even an undisputed agreement to arbitrate. 

The EFAA—the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” 9 U.S.C. §§ 401-02, enacted in March of 2022—provides that when a person “alleg[es] conduct constituting a sexual harassment dispute or sexual assault dispute … no predispute arbitration agreement shall be valid or enforceable.” Further, the EFAA renders a pre-dispute arbitration agreement unenforceable with respect to the entire case that relates to the alleged sexual assault or harassment, and not just the assault or harassment claims—i.e., “the EFAA bars a motion to arbitrate any claim within that case.” The election whether to invoke the EFAA rests with the person alleging sexual assault or harassment.

    Garcia asserted claims against Whataburger and her supervisor for sexual assault, hostile work environment, retaliation, assault and battery, negligent hiring and supervision, and more. Whataburger countered with a motion to compel arbitration, arguing Garcia had executed a valid arbitration agreement during her “onboarding.” Garcia did not dispute the existence or validity, generally, of the arbitration agreement. Instead, she contended that her claims for sexual assault and harassment rendered her case exempt from arbitration under the EFAA. 

    The trial court and the Dallas Court of Appeals agreed. After rejecting Whataburger’s argument that federal Rule 12(b)(6) pleading standards should apply, the appeals court ruled that Garcia had sufficiently alleged “sexual assault” as defined in the EFAA, measured by Texas’s “notice pleading” standard. And because all of Garcia’s claims related to her sexual-assault claim, the Court held the EFAA rendered the arbitration agreement unenforceable with respect to her entire case.

Think Before You Boilerplate

Infotek Consulting, LLC v. Dunn

Dallas Court of Appeals, No. 05-26-00028-CV (October 5, 2026)
Justices Miskel, Breedlove, and Jackson (Opinion linked here)

Ken Carroll

The venerable request “for such further relief to which this Defendant may show itself to be entitled.” We’ve all included it at the end of a pleading or motion. Still do. Do we really think it matters? In this personal jurisdiction case, it could have—but not in a good way.

Dunn sued Lombardi for striking him with her car. He then amended to add Lombardi’s employer, Infotek. Dunn alleged Infotek was liable under the doctrine of respondeat superior because Lombardi was acting “within the scope and course of her employment” when she struck him. Infotek responded with a special appearance, contesting personal jurisdiction. It supported its special appearance with sworn testimony establishing its lack of contacts with Texas and refuting Dunn’s allegation that Lombardi—a remote employee—was on the job when the accident occurred. (She was on her way to meet a friend at a coffee shop after finishing work for the day.)

Dunn replied, however, that “Infotek waived its jurisdictional challenge by requesting ‘such further relief’ to which it may show itself to be entitled in the prayer section of its special appearance.” Oops? The Court of Appeals noted that, “A party enters a general appearance and waives a special appearance by (1) invoking the jurisdiction of the court on any question other than the court’s jurisdiction, … or (3) seeking affirmative action from the court.” Although the boilerplate request in Infotek’s prayer sounds like it could fit these criteria, the appeals court denied Dunn’s waiver claim. It ruled that, “Because the request for ‘further relief’ was made solely in conjunction with Infotek’s special appearance, Infotek did not make a request for relief that was inconsistent with its assertion that the trial court lacked jurisdiction.”

Clearly the right result. But did the request “for such further relief to which this Defendant may show itself to be entitled” serve any useful purpose? Was it worth the heartburn? It’s always a good idea to pause and think before you boilerplate.

Superseding at Half Net Worth Requires “Complete, Detailed Information”

Abel v. Texas Capital Bancshares, Inc.

Dallas Court of Appeals, No. 05-25-00932-CV (August 26, 2026)
Justices Goldstein (Opinion linked here), Garcia, and Lee

Ken Carroll

To supersede a money judgment, one normally must post a bond or cash in an amount equal to the sum of (1) compensatory damages and costs awarded in the judgment and (2) interest for the estimated duration of the appeal. TCPRC § 52.006(a). But if that amount exceeds half the judgment debtor’s net worth as determined by generally accepted accounting principles, he or she may supersede by posting a bond or making a deposit in the amount of half his or her net worth, provided the judgment debtor also files an affidavit that “states complete, detailed information concerning the debtor’s assets and liabilities from which net worth can be ascertained.” Tex. R. App. P. 24.2(c)(1).

Facing a $7 million judgment, Abel tried to avail herself of the half-your-net-worth alternative to supersede. But the trial court and the Dallas Court of Appeals ruled the affidavit she filed in support did not provide sufficiently “complete, detailed information.” Here is what her affidavit stated:

The Court of Appeals explained that, “‘Complete, detailed information,’ for purpose of the rule, is sufficient information, or supporting documentation, from which the assigned values of the assets and liabilities in the affidavit can be verified.” Here, although Abel provided amounts for various categories of assets and liabilities, she attached no supporting documents and provided no information from which those amounts could “be verified.” For example, she didn’t specify what the “cash equivalents” and “accrued receivables” were or include the year, make, and model of the truck or trailer; nor did she break down what was included in “accrued liability.” Because the her affidavit was insufficient under the statute, Abel was not entitled to supersede based on half of her purported net worth.

Ratification Saves Condominium Assessments, But Not the Judgment

La Villita Condominium Community, Inc. v. Lanae

Dallas Court of Appeals, No. 05-24-00820-CV (August 7, 2026)
Justice Miskel, Kennedy, and Rossini (Opinion, linked here)

Robert Fountain

A corporation’s directors may ratify an act they could have authorized in the first instance. In La Villita, a properly elected condominium board ratified two special assessments; that conclusively established that the assessments were valid without requiring the Court to decide whether the directors who originally approved them were properly appointed.

La Villita Condominium Community consists of 141 units governed by a declaration and bylaws. In February 2022, the board amended the bylaws to expand from three directors to five. After two directors resigned, the sole remaining director appointed four unit owners to fill the two vacancies and the two new seats. That board imposed a $3.4 million special assessment in August 2022 and a $2.9 million special assessment in May 2023. The unit owners elected all five directors at the Association’s December 2023 annual meeting, and the elected board unanimously ratified both assessments in April 2024.

Melissa Lanae’s allocated shares of the assessments were $22,668.79 and $19,335.14. The Association sued in November 2022, seeking Lanae’s unpaid shares of both assessments and collection costs and to foreclose its assessment lien. Following a two-day trial, the jury found Lanae had not failed to comply with the declaration. The jury’s answers reflected implied findings that the assessments had not been approved or ratified by the requisite board majority at a meeting with a quorum and that the directors were not properly elected or appointed. The trial court rendered a take-nothing judgment against the Association and awarded Lanae $21,000 in attorney’s fees, plus conditional appellate fees.

The Dallas Court of Appeals reversed. Instead of deciding whether the directors who originally approved the assessments were properly appointed, it relied on the later ratification. The evidence that the unit owners properly elected all five directors in December 2023 was uncontroverted, as was the testimony that those directors unanimously ratified both assessments in April 2024. The Court therefore held the assessments were validly ratified as a matter of law and that no evidence supported the jury’s contrary implied findings.

But, somewhat curiously, that did not entitle the Association to rendition of judgment. Because liability was contested at trial and damages were unliquidated, the appeals court held that Texas Rule of Appellate Procedure 44.1(b) prohibited remand for a separate trial on damages alone. The Court therefore remanded for a new trial on both liability and damages.

$25-Million Supersedeas Cap Applies Per Judgment Debtor, Not Per Judgment, Not Per Bond

In re Greystar Development & Construction, L.P.

Supreme Court of Texas, No. 24-0293 (May 22, 2026)
Opinion by Justice Busby (linked here), Dissent by Justice Huddle (linked here)

Ken Carroll

Texas Civil Practice & Remedies Code § 52.006(b), which deals with bonds and other security posted to supersede a judgment pending appeal, says, “Notwithstanding any other law or rule of court, when a judgment is for money, the amount of security must not exceed the lesser of: (1) 50 percent of the judgment debtor’s net worth; or (2) $25 million.” But does the $25-million cap in (b)(2) apply per judgment or per judgment-debtor or per bond? In a 5-4 decision—with both the majority and dissent insisting they were “[h]ewing to the text,” “[a]pplying the statute’s plain language,” “adher[ing] to the words the Legislature chose”—the Supreme Court of Texas held that the $25-million statutory cap applies per judgment-debtor.

Three Greystar affiliates were held jointly and severally liable for $360 million in a lawsuit arising from a construction-crane accident. Relying on § 52.006(b)(2), they posted one joint bond in the amount of $25 million and noticed their appeals. Plaintiffs moved for review of the bond, arguing it was insufficient as a matter of law because the $25-million cap of § 52.006(b)(2) applied to each judgment debtor individually, not collectively. The trial court agreed, and the Dallas Court of Appeals affirmed.

The Greystar entities sought relief in the Supreme Court by mandamus, pursuant to Tex. R. App. P. 24.4(a). But by the narrowest of margins, the Supreme Court agreed with the lower courts. The majority drew heavily on the singular, per-debtor formulation of the definition of “security” in § 52.001: “‘security’ means a bond or deposit posted … by a judgment debtor to suspend execution of the judgment ….” Substituting that definition for the word “security” in § 52.006(b), the majority argued, demonstrates legislative intent that the cap be applied on a per-debtor basis: “the amount of [a bond or deposit posted … by a judgment debtor to suspend execution of the judgment] must not exceed … $25 million.” Further, the majority said, interpreting the $25-million cap to apply on a per-debtor basis is consistent with the explicitly per-debtor alternative standard of § 52.006(b)(1)—capping the required security at “50 percent of the judgment debtor’s net worth.” And it aligns with other aspects of appellate practice, such as the requirement that each party seeking to avoid a judgment file its own appeal. Finally, the majority noted anomalies that could arise from not applying the cap on a per-debtor basis when a judgment is affirmed with respect to fewer than all defendants.

The dissent wasn’t buying it. The language of the statute, the dissent argued, unambiguously applies the $25-million cap not on a per-debtor or per-judgment basis, but on a per-bond basis. The dissent recounted Texas’s long history of allowing appealing parties to file one joint bond to supersede a judgment pending appeal and the Legislature’s presumed awareness of that practice. The Legislature, the dissent contended, made no distinction in § 52.006(b) between a bond filed by an individual judgment debtor and a joint bond filed by multiple debtors. So where, as here, defendants who are jointly and severally liable under a judgment seek to supersede that judgment on appeal with one joint bond, the plain language of the statute says the “amount of [that] security,” that bond, is capped at $25 million.

Unless the Legislature amends § 52.006(b) to explicitly say otherwise, however, the $25-million cap will be applied on a per-debtor basis, as interpreted by the majority.

Trial Court’s Failure to Hold a Hearing on TCPA Motion ≠ Denial by Operation of Law

Swicegood v. Clemishire
Dallas Court of Appeals, No. 05-26-00159-CV (May 20, 2026)
Chief Justice Koch (Opinion linked here) and Justices Goldstein and Garcia

Ken Carroll

The hearing on a TCPA motion to dismiss ordinarily must be held within 60 days after the motion is served, and the trial court must rule within 30 days after the hearing. Tex. Civ. Prac. & Rem. Code §§ 27.004, 27.005(a). If the trial court doesn’t timely rule, the motion is deemed denied by operation of law and the movant may immediately appeal. Id. §§ 27.005(a), 27.008(a). But failure to timely hold a hearing is not the same as failure to timely rule.

Here, the trial court did not conduct a hearing on Swicegood’s TCPA motion to dismiss within the prescribed 60-day period. Swicegood appealed, equating that failure to hold a timely hearing with a failure to rule, which would result in the motion being denied by operation of law and give rise to a right of appeal. The Dallas Court dismissed the appeal for want of jurisdiction. “Without a hearing,” the Court explained, “the deadline for the trial court to rule on a motion to dismiss is never triggered, and no denial by operation of law can occur.” Therefore, the Court held, “because appellant’s dismissal motion was not heard, it was not denied by operation of law, and no basis for an appeal exists.” In so ruling the Court followed its earlier decision in Braun v. Gordon, No. 05-17-00176-CV, 2017 WL 4250235 (Tex. App.—Dallas Sept. 26, 2017, no pet.), in which it cautioned litigants that it is the TCPA movant’s “responsibility to obtain a timely hearing on the motion to dismiss.”

Accord and Satisfaction by Check Memo

The Bryant Law Firm v. Walker  

Supreme Court of Texas, No. 25-0131 (May 8, 2026) 

Per Curiam Opinion (linked here)

Ken Carroll

Who among us, when embroiled in a dispute with a landlord or merchant, has not been tempted to send our adversary a check in the amount we think is fair, emblazoned with the words, “Cashing this check constitutes a full and final settlement of all claims between us”? Guess what—it can work.

Walker retained Bryant, a lawyer, to get his child-support obligations terminated. After more than a year of continuing to pay child support and with no apparent progress on his case, Walker fired Bryant, demanded a refund of the fees he’d paid, and lamented that, in addition to those fees, he’d had to continue paying support because Bryant hadn’t gotten the obligations lifted. After some back and forth, Bryant responded with a check for the full amount of the fees Walker had paid, but included this on the memo line of that check: “CASH OF THIS CHECK REPRESENTS A FULL & FINAL SETTLEMENT AND RELEASE OF ALL CLAIMS AGAINST [BRYANT] & [THE BRYANT LAW FIRM] AND REFUND OF ALL ATTORNEY’S FEES ON [THIS MATTER].” Bryant also included a release agreement with the check. Walker cashed the check after crossing out the settlement language on its face. He did not sign the release agreement. Then, after another attorney got his child-support obligations terminated, Walker sued Bryant, asserting malpractice and other claims. The trial court rendered judgment for Walker, awarding actual and exemplary damages. The court denied Bryant’s motion for judgment notwithstanding the verdict based on the affirmative defense of accord and satisfaction. A divided panel of the 14th Court of Appeals affirmed.

But the Supreme Court disagreed. The Court held that “[t]he evidence in this case conclusively establishes the negotiable-instrument defense” embodied in Tex. Bus. & Com. Code § 3.311. It explained that “Walker’s intentional strike-through of the notation on the check does not relieve him of the legal consequence of negotiating it and depositing it into his account.” “Under the accord-and-satisfaction doctrine,” the Court held, “a claimant may not alter the conditions under which a party tenders payment, accept the payment, and continue to sue for claims covered by a release.” The Supreme Court therefore reversed and rendered a take-nothing judgment for Bryant.

Tornadoes & Hot Dogs: Parsing the Ordinary Meaning of Contract Terms

Privilege Underwriters Reciprocal Exchange v. Mankoff
Supreme Court of Texas, No. 24-0132 (February 13, 2026)
Opinion by Justice Lehrmann (linked here)

Michael P. O'Brien

“Asking abstractly whether a tornado is a windstorm seems like it may lead us into an unsolvable conundrum like the passionately debated controversy of whether a hotdog is a sandwich.” – Court of Appeals Justice Emily Miskel

The seemingly simple question whether a tornado is a windstorm drove years of litigation in this property-insurance case. The question reached the Supreme Court of Texas, which held that yes, a tornado is indeed a windstorm.

Homeowners Jeff and Staci Mankoff sued their insurer, Privilege Underwriters Reciprocal Exchange (PURE), seeking additional insurance proceeds after a 2019 tornado damaged their home. PURE paid the claim but applied an $87,156 “Windstorm or Hail Deductible,” maintaining that tornado damage fell within the policy’s undefined term “windstorm.” The Mankoffs disagreed, but the trial court sided with PURE on summary judgment.

A divided Dallas Court of Appeals reversed. The majority concluded that “windstorm” was ambiguous because the term was undefined and susceptible to more than one reasonable meaning. The court pointed to meteorological distinctions, an encyclopedia’s separate classification, and several Insurance Code provisions listing “tornado” and “windstorm” as separate perils. Applying the rule that ambiguous exclusionary provisions must be construed in favor of the insured, the court rendered judgment for the Mankoffs. Justice Miskel dissented, arguing that dictionary definitions consistently describe both windstorms and tornadoes as storms marked by violent winds.

The Texas Supreme Court agreed with Justice Miskel. The Supreme Court examined dictionary definitions, statutory usage, and case law, finding a “common thread”: a windstorm is a storm with violent, strong winds. Tornadoes, defined by their violent rotating winds, fall squarely within that definition. The Court noted that some dictionaries even explicitly define a tornado as a type of windstorm.

The Court rejected the Mankoffs’ argument that statutory provisions listing tornadoes and windstorms separately indicated legislative intent to treat them as mutually exclusive categories. Instead, the Court explained, the Legislature may list narrower terms alongside broader ones for emphasis without excluding the former from the latter. No Texas court had previously held that a tornado is not a windstorm, and the Supreme Court declined to create such a distinction. The Court reversed the appeals court’s judgment and reinstated the judgment of the trial court, holding the common, ordinary meaning of “windstorm” in an insurance policy unambiguously includes a tornado.

The decision follows the principle that undefined words are generally given their ordinary meaning. Ask a person on the street or a jury if a tornado is a windstorm, and they are likely to answer yes. But the jury is still out on whether a hot dog is a sandwich.

Appellate Self-Care: Attorney, Don’t Forget Your Own Notice of Appeal

Townsend v. Air Bon Air Conditioning Co. 

Dallas Court of Appeals, No. 05-24-00884-CV (February 9, 2026)

Justices Garcia (Opinion linked here), Jackson, and Lee

 

Ken Carroll

The Townsends sued three HVAC contractors, alleging they had negligently performed maintenance on the Townsends’ home that caused carbon-monoxide poisoning. One defendant, Hatley Brothers, responded with a combined motion for summary judgment and for sanctions pursuant to Tex. R. Civ. P. 13 and TCPRC Chapter 10. The trial court granted summary judgment to Hatley Brothers and also ordered the Townsends “and [their] counsel” to pay Hatley Brothers $10,000 in attorney’s fees as a monetary sanction.

The Townsends appealed both the summary judgment and the sanctions award, contending, among other things, that the trial judge erred by imposing sanctions without conducting an evidentiary hearing. The Court of Appeals affirmed summary judgment, but reversed and remanded the sanctions order against the Townsends. The Court held, “It is settled law in this Court that a trial judge must hold an evidentiary hearing before imposing sanctions under either Rule 13 or Chapter 10,” and the trial court had not done so in this case.

The Court of Appeals noted, however, that the Townsends’ counsel had not filed his own notice of appeal from the sanctions order or included himself as an appellant in the notice he filed for the Townsends. So, the Court held it “lacked appellate jurisdiction to review the sanctions order as to him” and therefore affirmed that part of the trial court’s order. Yikes!

This holding and result are not novel or unique. The Austin Court of Appeals, for example, has held that, “When an attorney and his client are both sanctioned, and both wish to appeal the sanctions order, this Court and other courts of appeals have held that it is essential that both the client and the attorney be named as appellants in the notice of appeal. This is because a client lacks standing to appeal sanctions imposed on her attorney.” Cortez v. Brown, 2019 WL 961672, at *2 (Tex. App.—Austin Feb. 28, 2019, pet. denied). Moral: where sanctions orders are concerned, attorneys must take care of themselves as well as their clients.

The Mandate: Wait for it ….

 In re Madison

Supreme Court of Texas, No. 24-1073 (October 31, 2025)

Per Curiam Opinion (linked here)

 

Ken Carroll

“When a party appeals the denial of a motion to dismiss under the Texas Citizens Participation Act, all trial court proceedings are stayed by operation of law, and the statutory stay remains in effect until the appeal has been resolved”—more specifically, until the Court of Appeals “signals that the appeal is resolved” by issuing its mandate. Parties must wait until the mandate issues before resuming proceedings in the trial court—a lesson learned the hard way here. 

Madison sued an HOA and a law firm. The law firm filed a motion to dismiss under the TCPA, which the trial court denied. But the law firm appealed that denial pursuant to TCPRC § 51.014(a)(12), and the Court of Appeals reversed, rendered judgment for the firm, and remanded. After the appeals court denied her motion for rehearing and for reconsideration en banc, Madison timely sought review in the Texas Supreme Court. Even before Madison filed her petition for review, however, the law firm moved for an award of attorney fees under the TCPA, relying on the appeals court’s judgment, and the trial court granted that motion.

The court of appeals declined to set aside the attorney-fees order on mandamus, but the Supreme Court disagreed. Under TCPRC § 51.014(b), the appeal of an order denying a motion to dismiss under the TCPA “stays all … proceedings in the trial court pending resolution of that appeal.” The Supreme Court explained that an appellate court’s judgment “takes effect” and the appeal is resolved “when the mandate is issued” (quoting Tex. R. App. P. 18.6)—not upon issuance of the appeals court’s opinion and judgment. “When the appellate mandate issues, the automatic stay [under TCPRC § 15.014(b)] expires,” not before. And under Tex. R. App. P. 18.1, a court of appeals cannot issue its mandate until after the Supreme Court has completed or denied a review that has been timely requested or the time to seek such review has expired.

Here, the law firm moved for its fees under the TCPRC, and the trial court granted that motion before the appeals court issued its mandate—even before it could have issued its mandate, since Madison timely sought Supreme Court review of the appeals court’s decision on the merits, and the Supreme Court had not yet ruled. As a result, “the court of appeals’ judgment was not final and had not yet taken effect, so the automatic stay remained operative, and the trial court had no authority to act.” The Supreme Court held, therefore, that “[e]ntertaining and granting the motion for attorney’s fees before the court of appeals’ mandate had issued—indeed, before the court of appeals was authorized to issue its mandate—was an abuse of discretion,” and so the Court granted Madison’s mandamus petition.