As Long as There’s a Plan—Resolving Defenses after Class Certification

Topletz v. Choice

Dallas Court of Appeals, No. 05-22-00781-CV (August 22, 2023)

Justices Carlyle (Opinion, linked here), Goldstein, and Kennedy

Brent M. Rubin

Topletz owns roughly 225 rental houses. The City of Dallas sued Topletz for various code violations. Several Topletz tenants intervened in 2016, asserting claims individually and on behalf of a class, alleging, among other things, that Topletz’s standard lease omitted certain language about tenant remedies required by Texas Property Code § 92.056(g) and improperly shifted certain repair duties from Topletz to the tenants in violation of § 92.006 of the Property Code. In a lengthy order, the trial court certified a class, and Topletz brought an interlocutory appeal.

The Court of Appeals affirmed in part and reversed in part. Citing the Supreme Court of Texas’s recent decision in American Campus Communities, Inc. v. Berry, 667 S.W.3d 227 (Tex. 2023), the Court of Appeals held that the class could not proceed on its claims for the missing lease language under § 92.056(g) because mere failure to include the language is not actionable. But the court affirmed part of the order deciding the class could proceed on its § 92.006 claims relating to waiver of the landlord’s repair duties.

Topletz also argued that class certification was not proper because the class included members whose claims were barred by limitations. The class definition included all who signed the standard lease from 2008 to present, and Topletz claimed the four-year limitations period barred all claims that had accrued more than four years before the named plaintiffs intervened in 2016. The court disagreed, explaining that a trial court need not resolve the merits of a defense before certifying a class. Rather, a certification order must only explain how a defense will be tried. The trial court’s certification order addressed how it intended to resolve limitations after certification, and Topletz did not identify any specific defects in that part of the trial court’s certification order. Therefore, the Court affirmed certification with respect to the § 92.006 claims about waiver of repair duties.

Arbitration: Where's the Agreement with the Plaintiff?

Fox v. The Rehabilitation & Wellness Centre of Dallas, LLC, et al.

Dallas Court of Appeals, No. 05-21-00904-CV (June 5, 2023)

Justices Molberg (Opinion), Partida-Kipness, and Carlyle

Neil R. Burger

Roger Fox brought wrongful death and survivor claims on behalf of his deceased wife, Karen. Defendants moved to compel arbitration based on an agreement signed by Roger—not Karen. The trial court granted Defendants’ motion to compel arbitration and dismissed all claims.

The issue before the Court was simple: Did Defendants “meet their initial evidentiary burden to prove the existence of a valid, enforceable arbitration agreement?” No, they did not.

The Court noted that the trial court did not hold an evidentiary hearing, did not consider any affidavits, and did not admit any evidence into the record. Instead, the only items before it were unauthenticated documents attached to the filings. Although the parties apparently ignored this evidentiary problem in both the trial court and on appeal, which would have been dispositive had he raised it, the Court recognized another fundamental problem: there was no evidence that Roger signed the agreement on Karen’s behalf. Therefore, even assuming the contract had been authenticated and admitted, Defendants did not meet their burden under principles of contract law and agency, which require the agent’s (Roger’s) authority to be established through the principal’s (Karen’s) conduct. Roger’s signature, accompanied by language in the agreement purportedly stating Roger was acting as Karen’s agent, did not suffice.

The Court thus reversed the order compelling arbitration and remanded the case to the trial court for further proceedings.

Thou Shalt Not Delay Trial for Appeal of a Temporary Injunction

Bienati v. Cloister Holdings, LLC

Dallas Court of Appeals, No. 05-22-00324-CV (February 10, 2023)

Justices Carlyle (Opinion, linked here), Goldstein, and Kennedy

Ken Carroll

Appellate courts often say the most efficient way to deal with a trial court’s decision granting or denying a temporary injunction is just to promptly go to trial. The Dallas Court of Appeals recently put teeth into that admonition.

Bienati and others pursued an interlocutory appeal from a temporary injunction. Although it had set a trial date in the injunction order, the district court first continued the trial and then abated the case entirely pending resolution of the temporary injunction appeal. Appellant’s counsel explained that the case was abated “because the probable right to recovery issue could impact the merits of the entire case, [and so] the trial court ‘abated it until this Court [of Appeals] weighed in on the merits of the temporary injunction and whether there’s a probable right to recovery.’”

The appeals court did not take kindly to that. Invoking Rule 683’s directive that “the appeal of a temporary injunction shall constitute no cause for delay of the trial,” the Dallas Court dismissed the appeal without addressing the merits. “The proceedings in the trial court have been stayed in an effort to obtain an advisory opinion from this Court,” it explained. “Judicial economy dictates that we not reward this behavior.”

“Taking Responsibility” ≠ Negligence as a Matter of Law

Yedlapalli v. Jaldu

Dallas Court of Appeals, No. 05-20-00531-CV (June 28, 2022)

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

Brent M. Rubin

While Yedlapalli was stopped at a stop sign, Jaldu rear-ended her. Yedlapalli testified that, from her rear-view mirror, she saw Jaldu on her cell phone and that Jaldu never slowed down. Jaldu, in contrast, claimed she was at a complete stop behind Yedlapalli and reached down to get a piece of paper on the floor, which caused her foot to slip off the brake and her car to roll forward and tap Yedlapalli’s car.

Yedlapalli sued Jaldu, claiming not only damage to her car but also bodily injury. On cross-examination, Yedlapalli’s attorney asked Jaldu if she was “taking one hundred percent responsibility for the crash.” Jaldu agreed that her car hit Yedlapalli’s when her foot slipped from the brake. Jaldu also admitted she told Yedlapalli at the scene that it was her “mistake,” making her responsible for the damage to Yedlapalli’s car. But Jaldu refused to take responsibility for Yedlapalli’s purported injuries, claiming everyone was “completely fine” immediately after the accident. Jaldu also explained to the jury that it was “fishy” that Yedlapalli sued only after Yedlapalli did not pay her medical bills.

Yedlapalli moved for a directed verdict based on Jaldu’s purportedly “taking one hundred percent responsibility” for the accident. The trial court denied the request for directed verdict. The jury later answered “no” on the question whether Jaldu’s negligence caused the occurrence in question. So, the trial court entered a take-nothing judgment against Yedlapalli.

Yedlapalli appealed, challenging the denial of the motion for directed verdict and the factual sufficiency of the evidence supporting the jury’s finding on negligence. On the directed verdict, the court of appeals explained that acceptance of responsibility, standing alone, does not establish negligence as a matter of law. The court observed that a jury could have concluded a person of ordinary prudence, sitting at a complete stop a safe distance behind Yedlapalli, could have reached down to pick up a piece of paper, as Jaldu testified. On factual sufficiency, the court similarly explained that a rear-end collision, standing alone, does not mean a jury’s failure to find negligence is not supported by sufficient evidence. The jury could have credited Jaldu’s account and concluded that a reasonably prudent person would have acted in the same way. Or, the jury could have concluded Yedlapalli failed to meet her burden of proving negligence by a preponderance of the evidence. Therefore, the court of appeals affirmed.

Not So Fast: Trial Court Cannot Compel Discovery While Plea to Jurisdiction Attacking Pleadings Is Pending

In re Dallas County, Texas and Dallas County Constable Bill Gipson

Dallas Court of Appeals, No. 05-21-01144 (May 10, 2022)

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

Brent Rubin

After Gipson was elected constable, he told deputy constables Woodard and Yarbrough that they would not be re-sworn as deputy constables after he took office. Woodard and Yarbrough sought to pursue grievances with Dallas County. But the County concluded they were not covered by the civil-service grievance system because they had been hired after August 19, 2003; it therefore denied them a grievance hearing.

Woodard and Yarbrough then sued, claiming they were denied their property rights in employment and denied equal protection because they were not allowed to access the grievance procedure available to those hired before August 19, 2003. The County and Constable Gipson answered and filed pleas to the jurisdiction based on governmental immunity. After the jurisdictional pleas were filed, Woodard and Yarbrough moved to compel discovery. The trial court ordered the County and Constable Gipson to respond to discovery requests and to appear for depositions.

The County and Constable Gipson sought mandamus relief, arguing discovery was improper while their pleas to the jurisdiction were pending.

The Court of Appeals explained that there are two types of pleas to the jurisdiction: an attack on the sufficiency of the pleadings and an evidentiary attack on the existence of jurisdictional facts. When a plea to the jurisdiction is based on evidence, a trial court has discretion to decide the plea at a preliminary hearing or later, after the case is more fully developed. If the trial court delays determination, the trial court can also allow targeted discovery on issues relevant to the plea to the jurisdiction. In contrast, when a plea to the jurisdiction is based on the pleadings alone, discovery is not proper while the plea is pending.

The Court of Appeals concluded the County’s and Constable Gipson’s pleas to the jurisdiction were based on the pleadings, so the trial court was obligated to hear and decide the pleas to the jurisdiction before compelling discovery. Further, the Court of Appeals noted that even if this were a scenario where the court could compel targeted discovery, the trial court erred by failing to confine the compelled discovery to jurisdictional issues. The Court of Appeals therefore granted mandamus relief, directing the trial court to vacate its order compelling discovery.

Splitting with Sister Courts, the Dallas Court of Appeals Holds Post-Judgment Interest Applies to Judgments Confirming Arbitration Awards

Bluestone Resources, Inc. v. First National Capital, LLC

Dallas Court of Appeals, No. 05-20-00776-CV (April 29, 2022)

Justices Reichek (Opinion, linked here), Nowell, and Carlyle

Robert Fountain

First National secured an award in arbitration against Bluestone. When First National sought confirmation of the award, it requested post-judgment interest under the Finance Code. The trial court issued a final judgment confirming the award and ordering post-judgment interest on all sums awarded in the judgment. On appeal, Bluestone argued the trial court’s award of post-judgment interest was an impermissible modification of the arbitration award.

The Dallas Court of Appeals held chapter 304 of the Finance Code requires post-judgment interest on a judgment confirming an arbitration award. The Court cited section 304.003, which states that post-judgment interest accrues on any “money judgment of a court of this state.” Because the trial court’s judgment confirming First National’s arbitration award was a “money judgment of a court of this state,” First National was entitled to post-judgment interest.

The Court acknowledged that its decision departed from a line of cases holding that a court may award post-judgment interest only if the arbitrator awards it. The Court observed that those cases failed to differentiate between post-award interest (accruing from the date of the arbitration award) and post-judgment interest (accruing from the date of final judgment). Post-award interest ordered by a trial court but not the arbitrator amounts to an impermissible modification of an arbitration award. Post-judgment interest, on the other hand, accrues automatically under the Finance Code even if a court’s judgment does not specifically reference it. Awarding post-judgment interest in this context, therefore, is completely consistent with the general rule that courts may not modify arbitration awards, because the post-judgment interest applies to the judgment and not the award.

Given the split among the courts of appeals, and absent reconsideration en banc, the availability of post-judgment interest in arbitration confirmation proceedings appears bound for the Texas Supreme Court. Until then, Bluestone clarifies it’s available (and mandatory) in the Fifth District.

Standing to Challenge Zoning Decisions

City of Dallas v. Homan

Dallas Court of Appeals, No. 05-20-01111-CV (March 31, 2022)

Justices Carlyle, Smith, and Garcia (Opinion available here)

Kelli Hinson

Katherine Homan filed a declaratory judgment action claiming that an amended zoning ordinance was invalid. The City of Dallas filed a plea to the jurisdiction, arguing Homan had no standing to challenge the ordinance. The trial court disagreed, denied the plea to the jurisdiction, and granted summary judgment in favor of Homan on her declaratory judgment claim that the ordinance is invalid. The City appealed.

The Dallas Court of Appeals agreed Homan had standing to contest the ordinance. Standing to challenge a government action requires a showing that the plaintiff suffered a particularized injury apart from the general public. So, in the context of a zoning decision, a plaintiff has standing “when the zoning affects the plaintiff differently than other members of the general public.” The Court noted that the Texas Legislature has created a mechanism for parties living within 200 feet of a proposed zoning change to receive notice and have the opportunity to protest the change. The Court found this to be a recognition that property owners within 200 feet of a proposed zoning change face a greater risk of injury to the use, enjoyment, and value of their property than the general public. This is a sufficient interest in the process to confer standing.

Post-Petition Developments Derail Mandamus

In re Am Re Syndicate, Inc.

Dallas Court of Appeals, No. 05-21-00358-CV (February 23, 2022)

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

Ken Carroll

Ordinarily, an appeal or mandamus is decided on the basis of the record before the trial court at the time it issued the order challenged in the appellate court. But not always.

Plaintiff TEXCAZ sued Am Re and its CEO, Barder, alleging breach of contract, fraud (for entering into a contract they didn’t intend to perform), tortious interference, and conspiracy. Am Re and Barder moved to dismiss, because the contract at issue specified that the forum for determining “any controversy arising out of this Agreement, or any breach thereof, shall be in Oklahoma County, Oklahoma.” Am Re and Barder were not parties to that contract—Am Re’s principal, GIC, was—but Am Re and Barder contended TEXCAZ was estopped to deny it was bound by the Oklahoma forum-selection clause by virtue of its claims of breach of the contract containing that provision and fraud regarding the lack of intent to perform that contract. The trial court denied the motion to dismiss. Am Re and Barder sought mandamus to enforce the forum-selection clause.

Several months after Am Re and Barder filed their mandamus petition, TEXCAZ amended its petition in the trial court to drop its claims for breach of contract and fraud. In addition, GIC revoked Am Re’s agency authority. Based on these post-petition developments, the Dallas Court of Appeals concluded “that the controversy does not arise out of the contract and that relators lack capacity and standing to assert the forum- or venue-selection clause.” It therefore denied mandamus.

Court-Ordered Mediation on Appeal

Newsom, Terry & Newsom, LLP v. Henry S. Miller Commercial Co.

Dallas Court of Appeals, No. 05-20-00379-CV (February 22, 2022)

Justice Carlyle (Order, linked here)

Brent M. Rubin

In the U.S. Court of Appeals for the Fifth Circuit, it’s not unusual to get a notice that a case has been referred to the Circuit Mediation Program. When the circuit mediator has selected a case for the program, any party may opt out, which concludes mediation proceedings (at least as to that party). When the Court has referred a case to the program, the Court has discretion to grant or deny an opt-out request. Similarly, some Texas courts of appeals, like the First Court in Houston, have appellate mediation programs under which the court can order the parties to mediation.

The resources on the Fifth Court of Appeals website do not mention a formal mediation program. (One appears to have existed under a prior version of the Court’s local rules.) The Court’s current Internal Operating Procedures state that if “both parties notify the Court that they have agreed to a mediator, the Court will refer the case to mediation,” but do not speak to the Court’s ordering mediation without a request from the parties. Nonetheless, the Fifth Court has the power to order the parties to mediate under Chapter 154 of the Civil Practice and Remedies Code. The Court doesn’t frequently order parties to mediate without a request. But it just did so in Newsom, a legal malpractice case argued in November 2021.

Party Has No Standing to Appeal Sanctions Against Its Attorneys

On Deck Capital, Inc. v. CWO Designer Landscapes LLC

Dallas Court of Appeals, No. 05-20-00471-CV (February 10, 2022)

Justices Reichek (opinion available here), Nowell, and Carlyle

Kelli Hinson

When the day of trial arrived, the plaintiff had not timely responded to or supplemented its discovery responses. It became clear that, if trial proceeded, the court would exclude much of plaintiff’s anticipated evidence because of that failure to respond or supplement. When the trial court refused the plaintiff’s request for a continuance in order to supplement its discovery, the plaintiff filed a motion for non-suit. The parties disagreed about whether the non-suit should be with or without prejudice and whether discovery sanctions should be issued. Ultimately, the trial court dismissed the case without prejudice, but ordered discovery sanctions against the plaintiff’s law firm, “not the client.” The plaintiff appealed.

The Court of Appeals dismissed for lack of jurisdiction, holding that the plaintiff/appellant had no standing to appeal the sanctions order because the sanctions were imposed against the law firm, not the plaintiff. “An appellant is not harmed when sanctions are imposed solely against the appellant’s attorney” the Court explained, “and does not have standing to challenge an order imposing sanctions solely upon his attorney.”

Whose Card Is It Anyway?

American Express National Bank v. Sherwood

Dallas Court of Appeals, No. 05-20-00153-CV (January 27, 2022)

Justices Osborne (opinion available here), Reichek, and Carlyle

Kelli Hinson

American Express brought suit against Christopher Sherwood to collect amounts it alleged were due on two credit card accounts. The trial court entered a take-nothing judgment against American Express, finding the bank had failed to prove it owned the accounts at issue. American Express appealed.

The Dallas Court of Appeals carefully reviewed the evidence presented by American Express to determine whether it conclusively proved its right to recover on the two accounts. Although American Express put on testimony from a custodian of records that the outstanding account balances were owed on accounts opened by Sherwood and owned by American Express, many questions remained. For example, there was no evidence explaining why the account number on one of the cards changed from one ending in 62009 to one ending in 61001. Despite the bank witness’s testimony that he was “one hundred percent” confident the two accounts were for the same card, there was no documentation showing the reason for the change in account numbers. The other card had originated with Citibank. The bank witness testified that American Express “took over the Citibank Hilton portfolio,” but there was no documentation of any transfer or assignment of the account at issue. In addition, there was a balance due when the account was allegedly transferred from Citibank to American Express, and American Express did not have any documentation of the Citibank charges that resulted in that balance. Even though Sherwood testified at trial and did not deny those charges were his, the Court held “Sherwood’s silence does not provide affirmative evidence that was otherwise lacking.”

In the end, American Express could not connect all the dots proving its right to collect on either card, and the take-nothing judgment was affirmed.

Two Practice Pointers: Redacting Fee Statements and Post-Judgment Interest Rates

THB Construction, LLC v. Holt Texas, Ltd.

Dallas Court of Appeals, No. 05-20-00020-CV (January 13, 2022)

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

Ken Carroll

The opinion of the Dallas Court of Appeals in THB Construction included two important reminders, the first for those practitioners proving up attorney’s fees, and the second for those seeking the maximum post-judgment interest allowed by law:

First, when seeking attorney’s fees, don’t go overboard in redacting the fee statements you submit to prove up those fees. Redactions are customary and necessary to avoid revealing confidential information protected by privilege or to eliminate time and expenses for tasks not covered by the fee request. But in THB Construction, the Court found the plaintiff’s redactions to be so extensive for one period of time that those billing records did not constitute “evidence identifying the specific tasks performed, the individual who performed the tasks, and the time each task took,” as required under Rohrmoos. That led to the reversal or remittitur of a significant portion of the fees awarded by the trial court. So, redact as necessary, but be careful and don’t overdo it. And supplement with other evidence if need be.

Second, remember that the Finance Code sets different levels of maximum post-judgment interest, depending on the basis for the judgment. In most circumstances, the post-judgment interest rate is 5%, unless the prime rate is higher. Tex. Fin. Code § 304.003. If the judgment is based on a contract “that provides for interest or time price differential,” however, post-judgment interest accrues at the “rate specified in the contract,” as one would expect. Tex. Fin. Code § 304.002. But, if the contract provides for interest but doesn’t specify a rate, then the court should order post-judgment interest at “18 percent a year.” Id.

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.

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.

COURT REINS IN RUNAWAY INJUNCTION

Retail Services WIS Corp. d/b/a Product Connections v. Crossmark, Inc.

Dallas Court of Appeals, No. 05-20-00937-CV (May 4, 2021)

Justices Schenck, Reichek, and Carlyle (Opinion linked here)

Lyndon Bittle

The Dallas Court of Appeals vacated for lack of specificity several provisions of a temporary injunction against a company’s former employees and its competitor (their new employer). The court affirmed other provisions of the order, and remanded to the trial court.

Crossmark and Product Connections compete for business providing “in-store consumer experience” services to large retailers. In a familiar scenario, Crossmark sued Product Connections and three former Crossmark employees for misappropriating trade secrets and improperly soliciting Crossmark employees and clients. Following an evidentiary hearing, the trial court entered a temporary injunction with nineteen separate provisions (in twelve paragraphs) prohibiting certain conduct and a “Device Turnover Order” (DTO) requiring defendants to produce all laptops and other digital storage devices to Crossmark’s counsel for forensic inspection. Defendants filed an accelerated interlocutory appeal.

The appeals court first rejected appellants’ arguments that Crossmark had not established a probable right to relief or irreparable injury. The court found Crossmark adduced sufficient evidence “to raise a bona fide issue as to its right to ultimate relief” and noted the misuse of confidential information “has been described as ‘the epitome of irreparable injury.’”

Turning to the specific relief granted by the order, the court applied the requirements of Texas Rule of Civil Procedure 683 that a temporary injunction “state the reasons for its issuance, be specific in terms, and describe in reasonable detail … the act or acts sought to be restrained.” The court concluded the order adequately explained the reasons underlying the prohibitive provisions, but did not justify the mandatory DTO.

The court then reviewed each of the prohibitions and found that eleven of the nineteen provisions failed to satisfy Rule 683’s specificity requirements, primarily because some material terms were not defined. For example, while the order adequately defined Crossmark’s “Confidential Information and Trade Secrets” for some provisions, other provisions enjoined conduct using terms that were not clearly defined, such as “confidential,” “proprietary,” and “business information.” Nor did the order adequately identify “Covered Clients and Customers.”

The DTO likewise failed the specificity test by failing to define “Crossmark information” or “other digital storage devices,” which gave another ground for reversing that part of the order. The court rejected, however, appellants’ argument that ordering turnover of digital devices without following the procedures governing pretrial discovery of “electronic or magnetic data” is always improper because it circumvents the protections provided by Rules 192-196 and In re Weekley Homes, 295 S.W.3d 311 (Tex. 2005). According to the court, neither the discovery rules nor Weekley precludes an injunction mandating turnover of electronic devices—provided the order complies with Rule 683.

CHALLENGING PERSONAL JURISDICTION? DECIDE FAST

Aaron Kaufman v. AmeriHealth Laboratory, LLC

Dallas Court of Appeals, No. 05-20-00504-CV (October 30, 2020)

Justices Molberg, Carlyle, and Browning (Opinion, linked here)

Neil R. Burger

Does an attorney’s appearance and participation in a TRO hearing and entrance into a Rule 11 agreement constitute a general appearance? Yes, under certain circumstances.

AmeriHealth Laboratory executed a consulting agreement with Final Inch, a Florida corporation, which was signed by Final Inch’s CEO, Aaron Kaufman, a Florida resident. AmeriHealth later sued both Kaufman and Final Inch. It also sought a TRO.

The trial court granted the TRO the same day the lawsuit was filed, after a non-transcribed hearing. However, Kaufman’s attorney appeared at the hearing, did not limit his appearance on Kaufman’s behalf, and actively argued against the entrance of the TRO by challenging the underlying facts concerning his client’s personal liability.

After the hearing, the trial court ordered the parties to confer concerning expedited discovery. The parties reached an agreement, which the court orally entered into the record. The Rule 11 agreement also extended the TRO. Kaufman’s attorney confirmed the agreement, making one modification to the discovery requests. He also agreed with AmeriHealth’s request for the trial court to order compliance with the parties’ agreement.

Kaufman filed his special appearance a week later, arguing that the court lacked personal jurisdiction over him. The trial court denied the special appearance, and the Dallas Court of Appeals affirmed, finding that his attorney’s actions on the day the lawsuit was filed constituted a general appearance and waived the grounds asserted in the special appearance.

A party makes a general appearance if, without limitation, the party “(1) invokes the judgment of the court on any question other than the court’s jurisdiction, (2) recognizes by its acts that an action is properly pending, or (3) seeks affirmative relief from the court.”

While noting that simply appearing at an ancillary hearing, such as on a TRO application, does not always waive jurisdictional objections, the Court of Appeals found the attorney’s level of active participation here did. Kaufman’s attorney was not an “observer or silent figurehead.” He challenged the underlying facts supporting the TRO, and he “sought and obtained affirmative relief” in the Rule 11 agreement. These activities prior to filing a special appearance distinguished the conduct from other cases holding that an appearance on matters that are “prior to the main suit” do not constitute a general appearance.

The lesson to be learned: if you plan to challenge personal jurisdiction, those words should be the first ones out of your mouth. And they should be on the record.

ANDERS AND THE SECOND MILE

In the interest of J.L.B., a child

Dallas Court of Appeals, No. 05-20-00526-CV (October 15, 2020)

Justices Whitehill (Opinion, linked here), Osborne, and Carlyle

Ken Carroll

In Anders v. California, 386 U.S. 738 (1967), the United States Supreme Court established a procedure for how appointed counsel for a criminal defendant must deal with the client’s request to pursue an appeal when that lawyer knows that any appeal would be frivolous. In short, that lawyer must file the appeal as requested, but prepare and file a brief that examines the law and the record in detail and explains why there are no arguable grounds for reversal. Anyone who has ever written an “Anders brief” knows it is a soul-crushing experience, contrary to every advocate’s basic instincts. Because the client understandably feels betrayed by the lawyer’s performance of his duty to the legal system under Anders, the brief is accompanied by a motion to withdraw as counsel for that client. And in the federal criminal system, when the appeals court agrees with the lawyer’s analysis and decides the appeal lacks merit, that motion to withdraw is routinely granted. But there’s a twist in Texas.

Texas courts have extended Anders to parental termination cases. See In re D.D., 279 S.W.3d 849, 850 (Tex. App.—Dallas 2009, pet. denied). In J.L.B., the counsel appointed for a mother in a parential rights dispute duly followed the Anders procedure and filed a brief that “professionally evaluate[d] the record and demonstrate[d] that there are no arguable grounds for reversal.” The appeals court affirmed the ruling the mother had sought to overturn. But it denied the attorney’s motion to withdraw. The Court reminded us that here, an appointed counsel’s obligations extend through a potential petition for review to the Supreme Court of Texas. “If Mother, after consulting with counsel, desires to file a petition for review, counsel must file a petition for review that satisfies Anders.” Counsel must walk the second mile. “[T]he appeal’s frivolousness … is not sufficient good cause for withdrawing” before that task is done.

NURSING HOME POLICIES AND PROCEDURES NOT SUBJECT TO CHAPTER 74 DISCOVERY STAY

In re: Kenneth Smith

Dallas Court of Appeals, No. 05-20-00497-CV (August 12, 2020)

Justices Burns, Pedersen (Opinion available here), and Carlyle

Kelli Hinson

Kenneth Smith sued the nursing home where his wife had stayed during the months before her death, alleging the facility failed to provide adequate care and supervision to prevent his wife from suffering several falls during her stay. Under Chapter 74, discovery in a health care liability claim is stayed until an expert report has been filed, except for “information, including medical or hospital records or other documents or tangible things, related to the patient’s health care.” Relying on that discovery stay, the trial court denied a motion to compel that sought to require the nursing home to produce several policies and procedures that are statutorily required to be kept and made available to patients and their families.

The Dallas Court of Appeals conditionally granted mandamus, concluding the trial court abused its discretion in denying discovery of the requested policies. Texas courts have reached different conclusions about whether policies and procedures fall within the exception to the Chapter 74 discovery stay. But the Court noted in this case that the requested policies (1) were required by statute to be publicly available; and (2) were “related to the patient’s health care.” “As there is no dispute that relator’s claims—alleging inadequate supervision and services to meet a nursing home resident’s health care needs and protect her from harm—are health care claims, it logically follows that “training and staffing policies” are “integral components of [the nursing home’s] rendition of health care services.” In particular, the requested policies and procedures were “relevant to assessing the standard of care that should have been given to Mrs. Smith,” and Mr. Smith and his expert should have had access to those documents before having to produce their expert report.

The Court also found that Mr. Smith had no adequate remedy by appeal because, without the requested documents, he would be severely hampered in his ability to file an adequate expert report, which could result in his claims being dismissed. Although he would be able to appeal from the grant of a motion to dismiss, the Court would be limited in its ability to cure the error because it would only be able to remand for the trial court to consider whether to grant a thirty-day extension to file an adequate report. The Court therefore vacated the trial court’s order and directed it to issue an order granting discovery of the requested documents.

DALLAS COURT OF APPEALS CONTINUES TO REIN IN THE TCPA’S APPLICABILITY TO BUSINESS DISPUTES

Palladium Metal Recycling, LLC v. 5G Metals, Inc.

Dallas Court of Appeals, No. 05-19-00482-CV (July 28, 2020)

Justices Bridges, Molberg (Opinion, linked here), and Partida-Kipness

Woods Capital Enterprises, LLC v. DXC Technology Services, LLC

Dallas Court of Appeals, No. 05-19-00380-CV (July 29, 2020)

Justices Pedersen, III, Reichek (Opinion, linked here), and Carlyle (Concurrence, linked here)

Ken Carroll

In a pair of opinions this week, the Dallas Court of Appeals continued its trend of holding the TCPA inapplicable to many private business disputes. Palladium arose from a disagreement regarding a joint venture to acquire and re-sell scrap metals. Woods Capital grew out of a failed agreement for the sale of a large tract of commercial real estate. In each case, the Court of Appeals held the TCPA’s free-speech and right-of-association protections did not apply to communications and conduct focused on the business dealings of the parties involved. In each case, the Court referenced the stated purpose of the TCPA to protect “public participation” and drew upon the Supreme Court’s decision last year in Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 127 (Tex. 2019). A sampling of the Court’s observations in the two cases:

• “The TCPA’s purpose of curbing strategic lawsuits against public participation is not furthered by a construction finding a right of association based simply on communications between parties with a shared interest in a private business transaction.”

• Rejecting a TCPA free-speech attack, the Court held the allegations targeted by the motion “lack any communications regarding matters of public concern as opposed to private pecuniary interests and thus do not implicate the TCPA’s protection of Palladium’s exercise of the right of free speech.”

• Acknowledging that the TCPA defines “matters of public concern”—the linchpin of TCPA free-speech protection—to include “issues related to health or safety; environmental, economic, or community well-being; the government; a public official or public figure; or a good, product, or service in the marketplace,” the Court cautioned that “not every communication related to one of the broad categories set out in [the statute] always regards a matter of public concern.” Because the record was “devoid of allegations or evidence that the dispute had any relevance beyond the pecuniary interests of the private parties involved,” the Court refused to find TCPA free-speech protections applicable.

• “This Court has consistently held that to constitute an exercise of the right of association under the TCPA, the nature of the communication between individuals who join together must involve public or citizen participation.”

Beyond its pronouncements on the applicability of the TCPA to business disputes, each decision also included an additional holding to which litigants should be alert. In Palladium, the Court held the TCPA movant had waived its objections to the non-movants’ evidence because it had not obtained a ruling on those objections and had not objected to the trial court’s failure to rule.

In Woods Capital, the Court ruled that the movant had “forfeited its [TCPA] motion” by failing to schedule a hearing within the period prescribed by statute. The TCPA allows the parties to delay a hearing by agreement for up to 90 days after service of the motion. A hearing may be delayed up to 120 days only if the court, upon a showing of good cause, “allows” limited discovery related to the TCPA motion. Reaffirming its ruling earlier this summer in Walker v. Pegasus Eventing, LLC, the Court held that the parties’ agreement to conduct discovery and the court’s acquiescence does not equate to “allowance” by the court that triggers the extra 30 days. Consequently, failure to schedule a hearing within the 90-day period, without court “allowance” of discovery, resulted in forfeiture of the motion.

BUYING A TRAIN TICKET ISN’T “PAYING FOR USE” OF THE TRAIN STATION

City of Dallas v. Kennedy

Dallas Court of Appeals, No. 05-19-01299-CV (June 18, 2020)

Justices Whitehill (Opinion available here), Osborne, and Carlyle

Kelli Hinson

Ms. Kennedy tripped and fell in Union Station train station and sued the City of Dallas for premises liability. The Texas Tort Claims Act waives a city’s governmental immunity for personal injuries caused by a real property condition if the city would, were it a private person, be liable to the claimant under Texas law. Whether the City could be held liable depends on whether Kennedy is treated as a licensee or an invitee. The City’s duty is that owed by a private person to a licensee “unless the claimant pays for the use of the premises,” in which case the City’s duty is elevated to that owed to an invitee. This is critical because a premises owner only owes a licensee the duty not to injure her (i) by willful, wanton, or grossly negligent conduct or (ii) by failing to use ordinary care to warn of or make safe a dangerous condition of which the owner is aware and the licensee is not. By contrast, an invitee must prove only that the owner knew or should have known about the dangerous condition.

Kennedy alleged she paid for use of the Dallas train station because she purchased a train ticket to travel from Kilgore to Dallas. The Dallas Court of Appeals disagreed. Kennedy paid a fee to Amtrak to ride the train, but did not pay a separate fee to the City of Dallas for use of Union Station, and a fee must be paid “specifically for entry onto and use of the premises” in order to trigger invitee status. Because Kennedy did not pay a fee to use the train station, she was a mere licensee and had to produce evidence the City was actually aware of the allegedly dangerous condition, which she failed to do. Kennedy testified that a man wearing “a gray top and blue pants” told her that “they should’ve have had that fixed a long time ago.” But this testimony did not raise a fact issue regarding the City’s knowledge of the allegedly dangerous condition because there was no evidence the man worked for the City or ever reported the condition to the City. The Court therefore rendered judgment granting the City’s plea to the jurisdiction and dismissing Kennedy’s claim.