Case Updates for October and November 2014

By John BarnesBaker, Donelson, Bearman, Caldwell & Berkowitz, PC, and Andrew Nelson, Wright & Close, LLP


FIRST COURT OF APPEALS

Henry v. Masson, No. 01-13-00898-CV, 2014 WL 6678937 (Tex. App.—Houston [1st Dist.] Nov. 25, 2014, no pet. h.)

Following rendition of judgment by the court of appeals, a trial court has limited discretion to grant additional relief pursuant to the mandate of the court of appeals.

Additionally, when both sides are successful in one or more claims, the trial court has discretion to order that each side bear its own costs.

Following protracted litigation between two doctors, the First Court of Appeals rendered judgment that Henry was entitled to $150,000 on a breach of contract claim against Masson, while Masson was entitled to $100,000 on his breach of contract claim against Henry. The court ordered the amounts offset, and ordered the trial court to enter final judgment of $50,000 for Henry “plus such other further relief to which he is entitled.”

On remand, Henry moved the trial court to enter judgment for $50,000, plus prejudgment interest and additional relief, including court costs. The trial court concluded that it could not award prejudgment interest or court costs as a result of the court of appeals’ mandate. Henry appealed.

On appeal, the trial court first addressed whether the trial court erred in determining that it could not award any relief in addition to the $50,000 court of appeals mandate. The First Court determined that the trial court erred in so holding. The First Court noted that when an appellate court reverses a trial court ruling and issues its mandate, the trial court is to take all actions that are necessary to give full effect to the mandate. In the case before it, the court held that the language “plus such other further relief to which he is entitled” authorized the trial court to consider issues such as prejudgment interest. Thus, the trial court erred in not determining that it could not award prejudgment interest.

The First Court, however, determined that an award of prejudgment interest was not authorized in the case. Next, the court considered the issue of court costs, which the trial court ordered to be borne by the parties. The court noted that both parties obtained relief; therefore, neither was completely successful. Because neither was wholly successful, the trial court did not abuse its discretion in refusing to award court costs to either party.


Oncor Elec. Delivery Company, LLC v. Murillo, No. 01-10-01123-CV, 2014 WL 5285845 (Tex. App.—Houston [1st Dist.] Oct. 16, 2014, no pet. h.) (en banc)

A jury instruction on ordinary negligence is inappropriate when the defendant is a premises owner and is not engaged in contemporaneous, negligent acts. When an ordinary negligence instruction is submitted without a premises-liability question, the court will reverse and render a take-nothing judgment.

The plaintiff—a demolition worker—sustained severe injuries when he attempted to disconnect a cable from an energized electrical transformer. Oncor was the local electrical provider and was supposed to disconnect and turn off the power to an apartment complex that was slated for demolition. The power was not turned off, and the plaintiff sustained injuries. The plaintiff sued Oncor and others under a negligent activity theory. Oncor objected to the submission of questions on active negligence and tendered a question based on a premises-liability theory. The judge submitted only the negligent activity question. The jury found Oncor negligent and the trial court entered judgment against it. Oncor appealed.

On appeal, the trial court determined that Oncor, which owned an easement to access the power lines, should be treated as a premises owner. The court then determined that the submission of a negligent activity question regarding Oncor was inappropriate. Oncor was on the property several weeks before the plaintiff was injured. Oncor read temporary meters, removed them, and closed the account. The plaintiff contended that Oncor was negligent in leaving the transformer energized instead of turning it off.

The court noted that the plaintiff never pointed to any evidence indicating that Oncor was obligated to de-energize the transformer. Additionally, there was no evidence that Oncor retained control over the plaintiff’s work. Further, Oncor did not contemporaneously energize the transformer while Murillo worked. Simply put, there was no evidence of a contemporaneous negligent act by Oncor. The plaintiff’s case was therefore a nonfeasance theory based on Oncor’s failure to make the property safe. Thus, Oncor’s duty, at most, was that of an occupier of the premises. Accordingly, Oncor was entitled to standard jury instructions that would have defined the scope of Oncor’s duty in light of posted warnings on the energized transformers and Oncor’s efforts to make the property safe. No such questions were submitted, which constituted error.

Because the trial court submitted an improper question and the plaintiff did not request a premises-liability question, Oncor asked for the court to reverse and render judgment in its favor. The court of appeals agreed with Oncor. The court noted that a negligence question, without more, cannot support a judgment against a possessor of land. Despite the well-established distinction between premises-liability claims and negligent-activity claims, the plaintiff chose to submit only negligent activity claims. Because the charge did not submit the proper predicate facts to the jury, the court reversed and rendered judgment in Oncor’s favor.


Lenoir v. Marino, No. 01-13-01034-CV, 2014 WL 6678947 (Tex. App.—Houston [1st Dist.] Nov. 25, 2014)

An objection to an affidavit as “conclusory” may be raised for the first time on appeal. Logical conclusions in an affidavit are not conclusory if they are based on underlying facts stated in the affidavit or any attachments.

In a medical malpractice suit against two physicians, the physicians moved to dismiss the plaintiffs’ claims on the grounds that the physicians were employees of governmental units. As such, they argued that the Texas Tort Claims Act barred any suit against them. The trial court dismissed both physicians from the suit.

On appeal, the plaintiff raised several issues, including a challenge to one of the physicians’ affidavits as conclusory. One of the physicians filed an affidavit stating that he was “in the paid service of” the hospital on the date of the event. The plaintiff argued that this statement was legally and factually incorrect and consisted of “legal conclusions not supported by facts.” The plaintiff did not secure a ruling on his objections at trial.

The First Court first noted that an objection that an affidavit is conclusory is a challenge to the substance of an affidavit that can be raised for the first time on appeal. Upon considering the substance of the affidavit, the court stated that “a conclusory fact is one that does not provide the underlying facts to support the conclusion.” While an affidavit that is merely a sworn statement of the allegations or recitation of the elements of a statute lacks probative value, logical conclusions are not improper if they are based on underlying facts stated in the affidavit. The court held that the affidavit was supported by documents attached to the affidavit. Further, an explanation of the structure of the hospital system did not become inadmissible simply because a party argues that the law should interpret the facts differently. The court overruled the plaintiff’s challenge to the affidavit.


FOURTEENTH COURT OF APPEALS

Federal Home Loan Mortgage Corporation v. Trinh Pham, Katherine Crawford & Gary Block, No. 14-13-00109-CV (Tex. App.—Houston [14th Dist.] Oct. 9, 2014)

The failure to adequately plead the facts demonstrating that new litigation derives from a new and independent action from that previously adjudicated adversely to the claimant in prior litigation will support summary judgment on res judicata grounds, even where subsequently introduced evidence establishes those facts.

In 2012, Appellant Federal Home Loan Mortgage Corporation ("Freddie Mac") brought suit for forcible detainer against Appellees Pham, Crawford and Block (collectively, "Appellees") in regards to residential property located at 316 Litchfield Lane in Houston, Texas (the "Property"). In its petition, Freddie Mac alleged only that it was the owner of the property by foreclosure deed, and that all occupants were tenants at sufferance. Freddie Mac had brought suit against Appellees for forcible detainer of the Property on two prior occasions, in 2010 and in 2011, each time resulting in a take-nothing judgment in favor of Appellees.

Appellees moved for summary judgment, asserting res judicata as a bar to Freddie Mac's suit. Appellees' motion attached copies of both the petitions filed by Freddie Mac and the final judgments rendered in the 2010 and 2011 suits. In response, Freddie Mac argued that its 2012 suit constituted a new and independent cause of action, as the occupants of the Property, including Appellees, had been served with new notices to vacate after the date of the final judgment in the 2011 suit. No copies of the notices were attached to Freddie Mac's response.

The trial court granted Appellees' motion, and Freddie Mac filed a motion for new trial, this time attaching a business records affidavit, including copies of the notices to vacate and copies of certified mail envelopes showing that the notices had been mailed but had been returned unclaimed and unopened. The trial court denied the motion for new trial, and Freddie Mac appealed.

The Court of Appeals affirmed, recognizing that the refusal to comply with newly served notices to vacate would give rise to a new and independent cause of action for forcible detainer and thus preclude res judicata, but concluding that, in the absence of affirmative pleading by Freddie Mac, prior to and/or contemporaneous with the motion for summary judgment, that such notices had been served and refused, Appellees had met their summary judgment burden by establishing the existence of the final judgments in the prior suits, and were not required to establish when or if they were served with the notices to vacate upon which the new suit was brought. The Court likewise concluded that Freddie Mac had failed to meet its burden in its response to the motion for summary judgment, as it had attached no evidence concerning the service of the notices. In dicta, the Court further concluded that the evidence produced by Freddie Mac in support of its motion for new trial, even if taken into account for purposes of summary judgment, would still fail to meet the burden, as it failed to show affirmative receipt of the notices by Appellees.

Chief Justice Frost dissented, arguing that where, as in the case at bar, no special exceptions had been sustained against Freddie Mac's petition, the trial court was constrained to liberally construe all pleadings in Freddie Mac's favor. Consequently, she would have held that Freddie Mac had, by inference, sufficiently plead the service of new notices upon and the refusal to vacate by Appellees, which, in turn, would require that Appellees negate these allegations in order to meet their summary judgment burden. Since Appellees did not address this issue in their motion for summary judgment, Chief Justice Frost would reverse.


Mission Petroleum Carriers, Inc. v. David Kelley, No. 14-14-00072-CV (Tex. App.—Houston [14th Dist.] Oct. 9, 2014)

A party may ratify an agreement that would otherwise be unenforceable due to procedural unconscionability, and thereby subject himself to its terms, if he accepts the benefits of the agreement with full knowledge that it is not legally binding.

Appellee David Kelley ("Kelley") was severely injured in an 18-wheeler accident while working for Appellant Mission Petroleum Carriers, Inc. ("Mission"). While Kelley was in the hospital and on a morphine drip, a Mission representative visited his room with paperwork to authorize Kelley's participation in Mission's Health & Safety Plan (the "Plan"). The paperwork included an arbitration acknowledgement (the Agreement"), which required that any claims of injury resulting from an accident be submitted to binding arbitration. It was undisputed that Kelley signed the paperwork for the Plan, including the Agreement.

Kelley subsequently sued Mission and a third party for negligence, alleging gross negligence and seeking punitive damages. Mission filed a motion to compel arbitration, invoking the Agreement. In his response, Kelley argued that the Agreement was procedurally unconscionable, and attached affidavits from himself and his wife, attesting to his lack of memory of any events occurring while he was in the hospital, the failure of Mission's representative to explain that Kelley was consenting to arbitration, and Kelley's need for his wife's physical assistance to sign the paperwork for the Plan. At the hearing, Mission did not deny that the Agreement was procedurally unconscionable, but argued that Keley's acceptance of benefits ratified the Agreement and precluded his repudiation of it. In support, Mission produced affidavits and documentation showing that since the Agreement was signed, Mission had provided Kelley approximately $88,000 in benefits, including approximately $29,500 paid to him or on his behalf from the date the suit was filed through the date of the hearing on Mission's motion. The trial court denied Mission's motion, and an interlocutory appeal was filed.

The Court of Appeals reversed and rendered, concluding that the undisputed evidence of Kelley's acceptance of the benefits of the Plan containing the Agreement after retaining counsel and filing suit against Mission, coupled with his failure to return any of those benefits to Mission, acted as a ratification of the Agreement and subjected Kelley to its terms, even though the Agreement was originally executed under conditions that rendered it procedurally unconscionable.


City of Sugar Land v. Leon Kaplan, No. 14-14-00292-CV (Tex. App.—Houston [14th Dist.] Oct. 16, 2014)

To bring and maintain a wrongful termination suit under the Texas Commission on Human Rights Act (the "Act"), a complainant must first exhaust all of their administrative remedies by filing a written charge with the Equal Employment Opportunity Commission (EEOC) within 180 days after termination, and the trial court will lack jurisdiction over those claims not asserted in the charge. Further, while the relation back doctrine can apply to permit amendment of the charge later than the 180 day threshold, the facts supporting the amendment and the initial charge must be essentially identical, or else the amendment will be jurisdictionally barred.

Appellant Leon Kaplan ("Kaplan") sued his former employer, the City of Sugar Land (the "City") for wrongful termination from his position as the Administrative Manager of the City's Parks & Recreation Department. At the time of his termination, Kaplan was 69 years old, and suffered from high blood pressure and diabetes, which caused him to occasionally fall asleep or lose consciousness while on the job. Kaplan alleged that the City had failed to accommodate his disability or to acknowledge his request to take short breaks throughout the day. Kaplan further alleged that he was ridiculed on one occasion when he took a break and closed his eyes due to his condition.

Kaplan filed his initial charge with the EEOC within 180 days after his termination, as required under Tex. Lab. Code § 21.202. However, Kaplan's initial charge did not refer to his disability, and only alleged age discrimination. After filing suit, and after more than 180 days had passed since his termination, Kaplan filed an amended charge, in which he included allegations regarding his diabetes, etc., and asserted an additional claim for disability discrimination. After these claims were added to the lawsuit, the City filed a plea to the jurisdiction as to the disability discrimination claim. Kaplan argued that his disability discrimination claim related back to the date of his initial charge, and was therefore not barred. The trial court denied the City's plea, and this interlocutory appeal followed.

The Court of Appeals reversed and rendered, holding that Kaplan's amended charge did not relate back to his initial charge, as the initial charge contained no facts from which a disability discrimination claim, as opposed to merely an age discrimination claim, could be reasonably inferred so as to put the City on notice. Therefore, the amended charge was untimely filed, and the suit on the disability discrimination claim was therefore jurisdictionally barred under the Act.


Pinnacle Premier Properties, Inc. et al. v. Ghislain Breton, et al., No. 14-14-00194-CV (Tex. App.—Houston [14th Dist.] original opinion filed Oct. 9, 2014, substitute opinion filed Nov. 6, 2014)

A tenant at sufferance clause in a deed of trust severs the issue of defects in the foreclosure process from the issue of immediate right to possession. Consequently, a district court with a challenge to the foreclosure pending before it lacks jurisdiction to restrain or enjoin a concurrent suit for forcible detainer in the justice court, the latter court having exclusive jurisdiction over such matters.

Melba and Howard Johnson executed a deed of trust to unimproved property located in the Houston Heights neighborhood (the "Property"), to secure a $77,500 note (the "Note") executed by Melba and made payable to Pinnacle Realty Advisors, Inc. ("PRA"). The Property was subsequently sold by the Johnsons and was thereafter subdivided by one of the successor owners into two lots, upon which homes were built. One of these homes was then sold to Appellees Ghisain Breton and Catherine Denicourt, and the other to Appellee David Andreis.

Melba defaulted under the Note, and, after sending foreclosure notices to the Johnsons, PRA assigned the Note to Appellant Pinnacle Premier Properties, Inc. ("PPP"), which thereafter purchased the Property at a foreclosure sale. PPP then served Melba and all occupants with notices to vacate, at which time Appellees first became aware of the foreclosures. PPP then filed forcible detainer proceedings in justice court (the "justice court suit").

Appellees filed suit in district court, alleging claims for trespass to try title, wrongful foreclosure and suit to quiet title, and seeking an injunction to prevent the justice court suit from proceeding. The district court signed a temporary restraining order and then a temporary injunction preventing the justice court suit from going forward, whereupon this interlocutory appeal was filed by PPP.

The Court of Appeals reversed and rendered, holding that the district court lacked jurisdiction to enjoin the justice court suit, since by statute the justice court had exclusive jurisdiction to adjudicate the immediate right of possession where the right of possession can be determined without resolving a title dispute, over which the justice court lacks jurisdiction. The Court focused on the facts that the Johnsons' deed of trust contained a tenant at sufferance clause, pursuant to which the borrowers, i.e., the Johnsons, would become tenants at sufferance of the purchaser of the Property upon foreclosure of the lien. The Court reasoned that, since the Johnsons could not, as a matter of law, convey an interest beyond that which they held, and their interest was subject to the provisions of the deed of trust, all subsequent owners, including Appellees, likewise took subject to its provisions. Thus, Appellees were tenants at sufferance, which, under existing precedent, provided a basis for adjudicating possession independent of the merits of the foreclosure process. Therefore, Appellees' allegations concerning title were insufficient to permit the district court to exercise jurisdiction and enjoin the justice court suit. The Court further found that, irrespective of jurisdiction, the Appellees had failed to show the lack of an adequate remedy at law required for injunctive relief, as the foreclosure had occurred, and they had failed to demonstrate that the available post-foreclosure remedies, rescission or monetary damages, were not adequate to redress any harm done to them.