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.

Rules Are Rules

 Badger Tavern LP v. City of Dallas

Dallas Court of Appeals, No. 05-23-00299-CV (April 20, 2023)

Chief Justice Burns (opinion available here) and Justices Molberg and Goldstein

Kelli Hinson

The rules authorizing interlocutory appeals are strictly construed—really strictly. Rule 168 requires that a court’s permission to appeal an otherwise unappealable order “must be stated in the appealed order.” In this case, the trial court denied a Rule 91a motion to dismiss and then later signed a separate order granting permission to appeal that denial. The Dallas Court of Appeals, relying on the plain language of the rule and similar cases out of other jurisdictions, dismissed the appeal. It held: “[b]ecause the trial court did not sign a single order that both denied appellants’ rule 91a motion to dismiss and granted permission to appeal the order, this Court has no jurisdiction over this appeal.”

No Interlocutory Appeal of Order Deferring Decision on Motion to Compel Arbitration

Builders FirstSource, Inc. v. White

Dallas Court of Appeals, No. 05-22-00724-CV (March 29, 2023)

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

Ken Carroll

Builders moved to stay White’s lawsuit against it and to compel arbitration under the Federal Arbitration Act. White responded with a motion for a jury trial on the threshold issue of arbitrability. When the trial court denied Builders’ motion and granted White’s, Builders filed an interlocutory appeal under FAA §§ 16(a)(1)(A) & (B). But the Dallas Court of Appeals dismissed for want of jurisdiction. The Court acknowledged that an order denying a motion to stay and for arbitration ordinarily is appealable under the FAA and Civil Practice & Remedies Code § 51.016. But the trial court’s order here “simultaneously granted White’s motion for a jury trial on arbitrability.” Consequently, the Court explained, “the order can only reasonably be construed as deferring a final ruling on whether to grant arbitration.” Citing decisions from several other Texas Courts of Appeals, the Dallas Court then held that an order deferring decision on the motion to compel, as opposed to “a definitive ruling on Builders’ motion to stay litigation and compel arbitration” is interlocutory and not appealable.

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.”

Distribution Center Deemed “Principal Office” Under Venue Statute

Deere & Co. v. Bernal

Dallas Court of Appeals, No. 05-22-00916-CV (January 17, 2023)

Justices Pedersen (Opinion, linked here), Goldstein, and Smith

Brent M. Rubin

Bernal had a fatal accident in Comanche County, Texas while he was operating a tractor manufactured by Deere. Bernal’s next of kin sued Deere and Bernal’s employer in Dallas County. They pleaded venue was proper in Dallas County under section 15.002(a)(3) of the Civil Practice and Remedies Code, which provides for venue in a county where at least one defendant has a “principal office.” Plaintiffs alleged that Deere has a principal office in Dallas County. Deere moved to transfer venue, denying that it had a principal office in Dallas County and arguing the case should be transferred to Comanche County, where the accident occurred, or Lamar County, where Bernal’s employer purportedly had its principal office. The trial court denied the motion to transfer, and Deere brought an interlocutory appeal.

When a defendant challenges venue, the plaintiff has the burden of presenting a prima facie case that venue is proper in the county in which it brought the lawsuit. Any venue facts pleaded by the plaintiff and not specifically denied by the defendant are treated as true. As to venue facts the defendant has specifically denied, the plaintiff must submit affidavits and documents authenticated by its affidavits to support its pleaded venue facts. Deere specifically denied the plaintiffs’ pleaded venue facts, so the plaintiffs had the burden of establishing a prima facie case that Deere had a principal office in Dallas County.

The venue statute defines “principal office” as the “a principal office of the corporation … in this state in which the decision makers for the organization within this state conduct the daily affairs of the organization.” A principal office must have decision makers for the company who have at least substantially equal authority and responsibility to other company officials in Texas. The plaintiffs submitted evidence that Deere operates a 230,000-square-foot regional distribution center in Dallas County that distributes parts to dealers in several states. The manager of the distribution center supervises over fifty-five employees, including several employees who themselves have supervisory responsibilities, and the manager does not report to anyone above him in Texas. The court of appeals concluded that these facts established that the Dallas County distribution center was “a principal office” in Texas and therefore affirmed the trial court’s denial of the motion to transfer.

Rule 165a(3) Motion to Reinstate: "Verified" Really Does Mean What It Says

In re Briseno

Dallas Court of Appeals, Nos. 05-22-01174-CV (December 14, 2022)

Before Justices Myers, Nowell (Opinion), and Goldstein 

Neil R. Burger

Rule 165a(3) states that a motion to reinstate after dismissal for want of prosecution must be “verified by the movant or his attorney.” The Dallas Court of Appeals applied that requirement literally (and some might say harshly) in In re Briseno. There, following a dismissal for want of prosecution, plaintiff’s counsel timely filed a motion to reinstate within 30 days explaining that he failed to appear for the dismissal hearing due to a “calendaring error.” And he attached a “Verification” swearing that the facts in the motion were “true and correct.” But, the “purported verification d[id] not reflect it was made in the presence of an authorized officer such as a notary public.” Nevertheless, the trial court granted the motion and reinstated the case.

The Court of Appeals ruled that the trial court’s order granting the motion to reinstate was void for lack of jurisdiction because it was not properly verified and did not extend the court’s plenary power beyond 30 days of the judgment. A verification must be sworn to before an authorized officer. In addition, the “verification” here did not meet the requirements of an unsworn declaration under CPRC § 132.001, such as containing the declarant’s birthdate and address. Accordingly, the Court granted mandamus relief and ordered the trial court to set aside the case’s reinstatement.

Morale of the story: Follow the rules, especially when dismissal is on the line.

Primer on Proving Up Attorneys’ Fees

Canadian Real Estate Holdings, LP v. Karen F. Newton Revocable Trust

Dallas Court of Appeals, No. 05-20-00747-CV (September 29, 2022)

Justices Pedersen, III (opinion available here), Goldstein, and Smith

Kelli Hinson

The Dallas Court of Appeals provided additional guidance on proving up attorneys’ fees in this declaratory judgment action. After the trial court dismissed the plaintiffs’ claim as moot, it awarded plaintiffs $45,529.13 in incurred attorneys’ fees plus $21,000.00 in conditional attorneys’ fees on appeal. The defendant, Canadian REH, appealed, arguing plaintiffs had failed to prove the amount of reasonable and necessary attorneys’ fees.

Canadian REH first argued that plaintiffs were required to provide “hard” or “disinterested” evidence of a reasonable hourly rate, such as affidavits of other attorneys, the State Bar of Texas Hourly Rate Fact Sheet, or fees awarded in similar cases. But the Court disagreed, noting that the affidavit of plaintiffs’ counsel, who testified he was “familiar with the hourly rates and costs customarily charged in and around” Collin County, Texas, was sufficiently detailed to establish reasonable hourly rates. And his experience was sufficient to back up his assertions of familiarity. The Court noted that neither Rohrmoos nor prior Dallas Court of Appeals cases have required additional “disinterested” evidence.

Canadian REH next argued that plaintiffs failed to establish the reasonable hours worked because the billing records were heavily redacted and contained block billing. Again, the Court disagreed. It noted that attorney invoices are “routinely redacted” when offered as evidence, in order to protect the attorney-client and work-product privileges, and that such redactions do not “obscure[e] meaningful review of attorney time” as Canadian REH claimed. The Court also disagreed that plaintiffs’ counsel’s use of “block billing” was a problem, noting that no entry included more than one day’s work for a timekeeper, and many entries included related tasks charged for fractions of one hour.

Canadian REH did get some traction with its complaint about conditional appellate fees, however. Plaintiffs’ counsel did not provide any explanation for his estimated appellate fees of $14,000 in the Court of Appeals and $7,000 in the Supreme Court. The Court reiterated prior holdings that an award of conditional appellate fees must be based on testimony about the services the attorney reasonably believes will be necessary to defend the appeal and a reasonable hourly rate for those services. Counsel’s conclusory opinion provided neither. The Court therefore vacated that portion of the award.

Refresher: To Get Judgment on a Rule 11 Agreement, Plead Breach of Contract

Patel v. Gonzalez Hotels, LLC

Dallas Court of Appeals, No. 05-20-01020-CV (July 7, 2022)

Justices Partida-Kipness (Opinion, linked here), Reichek, and Goldstein

Ken Carroll

A little reminder is welcome and helpful every now and then—although it’s often less fun for the parties who are being reminded.

Mahesh Patel sued Mehulkumar Patel, Chirag Patel, and Jayson Patel for breach of fiduciary duty, theft, and other claims relating to Gonzalez Hotels, LLC, of which they were all co-owners. After a mediation, the parties entered into a Rule 11 agreement in which Mehulkumar, Chirag, and Jayson “consented to the entry of an agreed judgment making them liable for half of Mahesh’s past and future contributions to the company.” Mahesh promptly filed a motion to enforce that agreement. But Mehulkumar, Chirag, and Jayson withdrew their consent before the trial court could act on that motion. Mahesh then filed a motion for summary judgment, “the stated goal of [which] was to obtain an agreed judgment to enforce the terms of the agreement.” The trial court granted the motion and entered judgment for Mahesh, but the Dallas Court of Appeals reversed.

“Written settlement agreements may be enforced as contracts even if one party withdraws consent before judgment is entered on the agreement,” the Court acknowledged. But, as the Texas Supreme Court explained in Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009) and elsewhere, “[w]hen consent is withdrawn [before the trial court renders judgment], the agreed judgment that was part of the settlement may not be entered. The party seeking enforcement of the settlement agreement must pursue a separate claim for breach of contract, which is subject to the normal rules of pleading and proof.” Here, Mahesh had not asserted a claim for breach of the agreement, and neither his motion to enforce nor his MSJ could substitute for that required pleading. The Court of Appeals therefore reversed and remanded to the trial court, where Mahesh no doubt will now plead breach and take a second swing at enforcing the agreement.

Mandamus: If Not Now, When?

In re Holland

Dallas Court of Appeals, Nos. 05-22-00368-CV, -00369-CV, and -00378-CV (May 27, 2022)

Before Justices Myers, Nowell (Opinion), and Goldstein

Neil R. Burger

In three identical rulings, the Dallas Court of Appeals rejected three identical petitions for writs of mandamus as having been filed prematurely. The petitions complained that the trial court had not ruled on motions to compel discovery in three criminal cases concerning the same incarcerated individual. The convicted defendant “filed his motions on January 7, 2022, reminded the trial court that they were pending by letter dated March 7, 2022, and filed his petition[s] seeking mandamus relief on April 20, 2022.” The Court denied all three petitions, saying the Relator had not “shown he is entitled to mandamus relief after such a short period of time.”

Although it is not clear that a hearing on the motions was ever requested or set, we now have guidance that 103 days from filing a motion without getting a ruling is not long enough to warrant mandamus relief compelling the trial court to rule.

Going Paperless in a Spoliating World

Power v. Power

Dallas Court of Appeals, No. 05-19-01557-CV (May 3, 2022)

Justices Molberg, Nowell (Opinion), and Goldstein

Neil R. Burger

In Power v. Power, the Fifth Court confronted a spoliation jury instruction given after a company went paperless and destroyed a decade’s worth of invoices central to the fiduciary duty claims in the lawsuit. Finding error, the Court reversed and remanded the case for a new trial.

Brothers Craig Power and Braden Power developed real estate together. Craig operated the business, and Braden designed and oversaw the business’s construction activities. In 2013, Craig decided the company would adopt a paperless recordkeeping system and authorized the destruction of ten boxes of invoices dating back to 2003. The brothers later sued each other over finances and distributions.

At trial, the court admitted evidence that Craig gave permission for a payroll employee to shred old invoices when they converted to electronic billing. Braden’s counsel also stated in opening and closing arguments that Craig ordered the destruction of the documents and that that “alone is a breach of fiduciary duty.” The trial court subsequently instructed the jury on spoliation without naming the offending party:

Invoices and documents which would demonstrate or reflect expenses relating to Craig Power and Braden Power [sic] real estate transactions have been destroyed.

You may consider that the invoices, documents, and records destroyed would have been unfavorable to the party who destroyed the invoices, documents, and records on the issues of whether the party complied with the party’s legal duties and the failure to properly account for money under the party’s care and control.

The jury returned a verdict in favor of Braden awarding damages against Craig. This appeal followed.

The Court first addressed whether the jury charge constituted a spoliation instruction when it did not name the party responsible for the destruction of documents. It did. There was no evidence or argument that Braden had destroyed evidence, while Braden’s counsel put on testimony and made arguments that Craig had. Therefore, not naming Craig as the spoliating party was “not determinative.”

Next, the Court analyzed whether the “severe spoliation sanction” of a jury instruction was an abuse of discretion that probably caused the rendition of an improper judgment. It was and it did. To sanction a party for spoliating evidence, the trial court must, outside the presence of the jury, find that (1) the spoliating party had a duty to preserve evidence, and (2) the party intentionally or negligently breached that duty. The trial court did not do that here. Because of the closely contested nature of the issues at trial, the emphasis Braden’s counsel placed on spoliation, and the harshness of a spoliation instruction, the Court of Appeals found harm, reversing and remanding for a new trial.

PSA—Ask for Permission, Not Forgiveness!

In re D.M.

Dallas Court of Appeals, No. 05-21-00185-CV (April 21, 2022)

Justice Goldstein (Concurring Opinion linked here)

Kelli Hinson

In a public service announcement to the bar, written to “draw attention to a disturbing trend,” Justice Goldstein pleaded for Texas lawyers to file timely notices of appeal rather than wasting their time and the courts’ resources with after-the-fact motions for extension. This “pattern and practice of the legal profession to seek forgiveness rather than permission is one that cannot stand without comment and caution.” Justice Goldstein noted that a “notice of appeal is not labor intensive, extensive, or in-depth.” Nevertheless, too often, lawyers miss the deadline to file “what is essentially a rote, perfunctory notice” and then have to file a much longer motion for extension of time, which requires the Court “to consider a myriad of excuses to determine whether the motion’s rationale meets the generous latitude mandated by the Texas Supreme Court.” Justice Goldstein’s advice: “if you file a timely motion for new trial, a two-sentence notice of appeal should follow shortly thereafter.”

Beware the TRAP: The Deadline to Appeal after Filing a Post-Judgment Motion

Nur Ali v. Spectra Bank

Dallas Court of Appeals, No. 05-21-01113-CV (April 6, 2022)

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

A to Z Wholesale Wine & Spirits, LLC, v. Spectra Bank

Dallas Court of Appeals, No. 05-21-01149-CV (April 6, 2022)

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

Ken Carroll

In substantially identical opinions in two related cases, the Dallas Court of Appeals made appellants painfully aware of an anomaly in the Texas rules. Under TRAP 26.1, a notice of appeal ordinarily must be filed “30 days after the [trial court] judgment is signed.” But if an appellant timely files a qualifying motion, such as a motion for new trial, TRAP 26.1(a) extends the deadline for the notice of appeal to “90 days after the judgment is signed”—but not to 30 days after the motion is overruled or denied, as one might expect and as is prescribed by the corresponding federal rule governing notices of appeal, FRAP 4(a)(4). This anomaly can prove especially treacherous where, as in these two cases, the post-judgment motion in the trial court is overruled by operation of law.

In both Ali and A to Z the appellant timely filed a motion for new trial. In each case, the motion was overruled by operation of law 75 days after the judgment was signed, pursuant to TRCP 329b(c). Instead of filing a notice of appeal within the next 15 days—that is, within 90 days after the judgment was signed—the appellants waited until 30 days after the motions were overruled, making the notices 15 days late under TRAP 26.1(a). That still gave each appellant a last-gasp, post-deadline opportunity to seek an extension under TRAP 26.3, provided they could show their delay in filing “was not deliberate or intentional, but was the result of inadvertence, mistake, or mischance.” Trying to meet that standard, each appellant argued the delay was justified to allow for “disposition of the entire case below,” i.e., for the trial court’s plenary jurisdiction to expire under TRCP 329b(e). The Court of Appeals didn’t buy it, saying it had “repeatedly held that delay caused by waiting for the trial court to rule on a post-judgment motion or for the trial court’s plenary power to expire is unreasonable as it reflects an awareness of the deadline for filing a notice of appeal but a conscious decision to ignore it.” In other words, a “deliberate [and] intentional” decision, exactly the opposite of “inadvertance, mistake, or mischance.” In each case, therefore, the Court denied the appellant’s motion to extend time to file a notice of appeal and dismissed for want of jurisdiction.

Squashed: Probate Exception Does Not Provide Jurisdiction over Roach’s Appeal

John H. Roach. v. Patricia S. Roach

Dallas Court of Appeals, No. 05-21-00754-CV (February 15, 2022)

Justices Molberg, Goldstein (Opinion, linked here), and Smith

Brent Rubin

Generally, Texas law allows an appeal only from final judgments and from interlocutory orders made appealable by statute. But an exception exists for interlocutory orders in a probate proceeding if an order disposes of all parties and issues for which a particular part of a probate proceeding was brought—sometimes described as allowing “multiple” final judgments in probate. To determine whether the probate exception applies, a court may consider whether the matter disposed of in the interlocutory order could properly be severed.

John Roach filed an ancillary proceeding in a probate case against Patricia Roach and Patricia Roach Tacker alleging breach of fiduciary duty, breach of a family partnership agreement, and negligence. John also sought a declaration that the Patricias, along with the decedent’s attorney, manipulated the decedent into modifying two codicils while the decedent was cognitively impaired. The Patricias filed a motion for summary judgment alleging John’s challenge to the codicils was barred by the two-year statute of limitations applicable to will contests. The trial court granted the motion, and John appealed.

The Court of Appeals applied the severability analysis and held it lacked jurisdiction over the interlocutory order dismissing John’s declaratory judgment action. Among other things, to be severable, a claim cannot be “so interwoven” with the remaining claims “that they involve the same facts and issues.” Because the alleged scheme between the Patricias and the decedent’s attorney at the heart of the declaratory action was also significant to the remaining claims for breach of fiduciary duty, breach of the partnership agreement, and negligence, the Court concluded the declaratory action was not subject to severance and the interlocutory order dismissing the single claim was not appealable.

The Court of Appeals suggested it disagreed with In re Estate of Florence, 307 S.W.3d 887, 889 (Tex. App.—Fort Worth 2010, no pet.), a “somewhat factually similar case.” The Dallas Court explained that Florence only briefly addressed jurisdiction over the interlocutory order in a footnote without providing meaningful analysis.

Don’t Sleep on Mandamus in Dallas

In re Ruff, No. 05-21-00886-CV (Tex. App.—Dallas February 15, 2022) Justices Molberg, Reichek (Opinion, linked here), and Garcia

In re Perez-Merino, No. 05-22-00082-CV (Tex. App.—Dallas February 14, 2022) Justices Schenck, Reichek (Opinion, linked here), and Carlyle

In re Tekin & Associates, LLC, No. 05-21-00219-CV (Tex. App.—Dallas February 9, 2022) Justices Osborne, Pedersen, III (Opinion, linked here), and Goldstein

Ken Carroll

There is no hard and fast deadline for filing a mandamus petition. But, although mandamus is not technically “an equitable remedy,” it is guided by principles of equity—including laches. And in the last week alone, the Dallas Court of Appeals has summarily denied three mandamus petitions for what it deemed to be excessive delays in filing. In each opinion the Court said, “[A]n unexplained delay of four months or more can constitute laches and result in denial of mandamus relief,” citing Rivercenter Associates v. Rivera, 858 S.W.2d 366 (Tex. 1993) (orig. proceeding), and decisions from the Dallas Court of Appeals and others to the same effect. With these three short, substantially identical opinions in a single week, the Court would seem to be signaling that, absent a good explanation, a delay of four months in filing for mandamus relief can (will?) trigger denial of a petition irrespective of the merits. Moral of the story: if you’re considering filing a mandamus in the Dallas Court of Appeals, get on with it.

Was Evidence “Admitted” During Zoom Hearing?

Kazi v. Sohail

Dallas Court of Appeals, No. 05-20-00789-CV (October 28, 2021)

Justices Molberg, Goldstein (Opinion available here), and Smith

Kelli Hinson

        After conducting a hearing via Zoom, the trial court entered a temporary injunction against Defendants, and Defendants appealed, arguing there was no evidence to support the order. They contended that the Plaintiff had presented no live witnesses and that none of the affidavits or exhibits referred to during the hearing were actually admitted into evidence.

        The Dallas Court of Appeals disagreed and affirmed the temporary injunction. The trial court’s emergency standing order in effect at the time of the Zoom hearing—prompted by the COVID-19 pandemic—encouraged litigants to present evidence through affidavits, declarations, and depositions rather than through live testimony, when possible. The order further provided that parties wishing to admit exhibits or other evidence must electronically deliver the same to the court reporter, court coordinator, and opposing counsel prior to the hearing. Plaintiff’s counsel complied with that order and, during the hearing, referred to the evidence that was “put on the record” and stated he would consider such evidence “part of the record unless any objections arise.” Defendants’ counsel did not object to the evidence being “put on the record” and did not object to Plaintiff’s counsel referring to the evidence throughout the hearing. In the temporary injunction order, the trial court referred to the “evidence presented” during the hearing and stated that Plaintiff had “offered evidence” in support of his position.

The Court of Appeals held that, even though the trial court did not use “magic words” admitting Plaintiff’s affidavits and other electronic submissions into evidence, it was clear from the record that the trial court considered the electronically submitted evidence in determining whether to grant the temporary injunction. Under those circumstances, the Court concluded that the trial court did not abuse its discretion in granting a temporary injunction based on the electronically submitted evidence.

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.

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.  

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.”

THE JOSH BRENT CASE: “APPARENT” INTOXICATION IS AN OBJECTIVE TEST FOR DRAM-SHOP-ACT LIABILITY

Beamers Private Club d/b/a Privae Lounge v. Jackson

Dallas Court of Appeals, No. 05-19-00698-CV (April 21, 2021)

Justices Osborne, Pedersen III (Opinion, here), and Goldstein

Ken Carroll

In the wee hours of the morning on December 8, 2012, after a night of drinking, Dallas Cowboys defensive lineman Josh Brent crashed his car while speeding. Brent’s best friend and teammate, Jerry Brown, was a passenger in the car and died in the accident. Brown’s mother, Stacey Jackson, sued Brent and Beamers d/b/a Privae, the club where Brent had been drinking immediately before the crash, securing multi-million-dollar judgments against each. Brent did not appeal. Beamers did, challenging, among other things, the legal and factual sufficiency of the evidence to support the judgment against the club under the Texas Dram Shop Act.

Under the Act, providing an alcoholic beverage to someone can lead to statutory liability if, “at the time the provision occurred it was apparent to the provider that the individual being sold, served, or provided with an alcoholic beverage was obviously intoxicated to the extent that he presented a clear danger to himself and others.” Focusing on the requirement that it be “apparent to the provider” that the person being served “was obviously intoxicated,” Beamers pointed to testimony from servers and other club employees, as well as from some of Brent’s teammates who were present, that Brent did not appear to them to be “obviously intoxicated.” The jury, of course, disagreed.

The Dallas Court of Appeals affirmed the verdict and judgment, holding that “the test for liability under the Act is an objective one.” The Court explained that “the requirement that intoxication be ‘apparent to the provider’ does not mean that the provider must actually observe such signs of intoxication; if it did, any provider of alcohol could escape liability by turning a blind eye to signs of intoxication that would otherwise be plain, manifest, and open to view.” Here, Brent failed a series of “roadside intoxication tests” at the accident scene, and a video showed Brent—who “was quiet and reserved by nature”—dancing at the club while drinking from two open bottles of alcohol. Especially viewed in the light most favorable to the verdict, the evidence was legally and factually sufficient to satisfy the Act’s objective test.

One procedural note, highlighting the recent turnover on the Dallas Court: Both the late Justice David Bridges and former Justice David Evans had participated in this case through submission. Justices Osborne and Goldstein, having studied the briefs and record, replaced them in the final determination of the appeal.