CLE: 2007: Texas Supreme Court: Update and Trends

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CLE: 2007: Texas Supreme Court: Update and Trends

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L. Wayne Scott

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St. Mary's University School of Law San Antonio Texas Alumni Homecoming, St. Mary's University School of Law Alumni Homecoming

Date

2007-03-30

Relation

St. Mary's University School of Law Alumni Homecoming

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RFC3778

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English, en-US

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Text

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STMU_HomecomingCLE2007Scott

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Texas Supreme Court: Update and Trends
L. Wayne Scott, Professor of Law and Director of ADR Programs

Print Version

II School of Law at St. Mary's University

Page 1 of2

School of Law at St. Mary's University

L. Wayne Scott
ph: (210) 431-2271
email: wscott@stmarytx.edu
Professor of Law and Director of ADR Studies
B.A., 1961, Southwest Texas State University
J.D., 1962, University ofTexas
M.A., 1971, Baylor University

Before St. Mary's
• Partner in what is now the law firm of Sheehy,
Lovelace, and Mayfield in Waco, Texas.
• Briefing Attorney, Court of Criminal Appeals
• Briefing Attorney, Supreme Court ofTexas
• U.S. Commissioner for the Western District of Texas
• Lecturer in Law, Baylor University

Specialties:
Professor Scott is certified by the Texas Board of Legal Specialization in:
• Civil Appellate
• Civil Trial
• Personal Injury Law

Publications:
Recent publications include:
Books:

• Richard Flint and L. Wayne Scott: Texas Civil Procedure: Pretri al (2004)
• Richard Flint and L. Wayne Scott: Texas Civil Procedure: Trial and Appeal
(2004)
Article:

• Appellate Mediation , published in State Bar of Texas, Appellate Advocate
(Spring 2004)
CLE Papers:

• Ethics ofConjlict Resolution (St. Mary's School of Law and Texas Land Title
Association Seminar, (December 2003)
• Supreme Court ofTexas April 2003-2004 (St. Mary's Alumni Institute, April
2004)
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Print Version II School of Law at St. Mary's University

Page 2 of2

• Trends in the Texas Supreme Court (State Bar Institute on Practice in the Texas
Supreme Court, April 2004)
• Three State Bar of Texas Supreme Court Update Telephone Seminars (with
Mike Hatchell, Rusty McMains, and Judge Sarah Duncan)
• State Bar Telephone Seminar: Future of Litigation Practice in Texas (with
Justice Nathan Hecht, and the Presidents of the Texas Trial Lawyer's
Association and The Texas Association of Defense Counsel)
• State Bar of Texas Telephone Seminar: Tips, Tricks and Traps ofMediation
• Presentation to Judges of Harris County: Future ofLitigation Practice in Texas
(with Justice Nathan Hecht, and the Presidents of the Texas Trial Lawyer's
Association and The Texas Association of Defense Counsel)

Highlights:
Listed as one of the Super Lawyers of Texas by Texas Monthly (Nov. 2003)

~STMAIW'S
UNIVOOTV

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School of Law at St. Mary's University
School of Law, St. Mary's University, One Camino Santa Maria, San Antonio, Texas
78228

http://www.stmarytx.edu/law/print.php?go=fac_scott&id=&print= l

3/26/2007

Summaries
of the

OPINIONS OF THE
TEXAS SUPREME COURT
April 7, 2006- March 23, 2007
by

Professor L. Wayne Scott
Director Conflict Resolution Studies
St. Mary's University School of Law

Tex. Sup. Ct .Summaries - © L. Wayne Scott - St. Mary's Alumni Reunion Program 2007
Page 1 of 118 - 3/27/2007

Biographical Sketch
Prof. Wayne Scott
BA Southwest Texas
JD UT School of Law
MA Baylor
Post Graduate Study: New York University; Harvard.
Briefing Attorney Court of Criminal Appeals (1962-1963).
Briefing Attorney Supreme Court of Texas (1963-64).
Private Practice Waco, Texas [Associate and Partner in firm that is now Sheehy, Lovelace
and Mayfield] (1964-1971).
U.S. Commissioner, Western District of Texas (Waco Division) (1967-1971).
Lecturer Baylor School of Law (1968-1971).
Professor of Law St. Mary's University (1971-present).
Editor, State Bar of Texas Civil Digest (and its predecessor publications)-(1971-prcsent).
Currently Director of Conflict Resolution Studies at St. Mary's University.
Board Certified: Civil Appellate, Civil Trial, Personal Injury Law.
Course Director St. Mary's Procedural Law and Tort Institutes; Course Directo r ADR
Course 1987, Course Director 2"d Advanced Appellate J>ractice Course 1988.
Chair Appellate Practice Section, State Bar of Texas (1993-1994).
Teaching: Current courses are Texas Civil Procedure: Pre-trial, Texas Civil Procedure:
Trial and Appellate, Mediation, Negotiation, and Law and Philosophy, but has taught,
among others, courses in Appellate Practice, Jurisprudence, Evidence, Federal Courts,
Criminal Law and Criminal Procedure, Workers Compensation, and Land Use
Management. Instructor for the Attorney Mediator's Institute and the World Legal
Problems in Innsbruck, Austria (1993, 1994, 1995).
Author: Scott, SOURCE BOOK OF TEXAS CIVIL PROCEDURE (1981); Flint and Scott, TEXAS
CIVIL PROCEDURE: PRETRIAL (Revised Annually, 1999-2006); Flint and Scott, TEXAS CIVIL
PROCEDURE: TRIAL AND APPEAL (Revised Annually 1999-2006); The Law of Mediation, 37
St. Mary's L.J. 325 (2006), and numerous articles and continuing legal education
presentations.
Moderator: State Bar of Texas Supreme Court Telephone Updates (with Mike Hatchell,
Rusty McMains, Judge Sarah Duncan, and Bill Dorseano), as well as other Telephone
Seminars and Webcasts on Appellate Law, Ethics, Negotiation, and Mediation.

Tex. Sup.

Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 2 of I 18- 3/27/2007

Table of Authorities
Cases

Alex Sheshunoff Management Services, L.P. v. Johnson, 209 S.W.3d 644 .............. ~ ... .... ...... 60
Allstate Indemnity Co. v. Forth, 204 S.W.3d 795 ..................................................................... 13
American Flood Research, Inc. v. Jones, 192 S.W.3d 581 ............ .......................................... 19
Barker v. Eckman, 213 S.W.3d 306 ........................................................................................... 69
Bed, Bath & Beyond, Inc. v. Urista, 211 S.W.3d 753 ............................................................... 86
Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780 .................................... 17
Ben Bolt-Palito Blanco Consolidated lSD v. Texas Political Subdivisions Property/Casualty
Joint Self-Insurance Fund, 212 S.W.3d 320 ....... .......................................... ......................... 87
Blue Cross Blue Shield of Texas and Health Care Service Corp v. Duenez, 201 S.W.3d 674
........ ................ ............ ............................................................ .................. ................. ........ ..... ... 53
Brainard v. Trinity Universal Insurance Co.,--- S.W.3d ----,2006 WL 3751572 .................. 81
Brittingham-Sada de Ayala v. Kevin Michael Mackie, .............. ............................................. 33
Brittingham-Sada de Ayala v. Kevin Michael Mackie, Not yet reported in S.W.3d, 2006WL
1043484 ....................................... .................. ..... ...... ................................................................. 12
Brookshire Grocery Co. v. Taylor,--- S.W.3d ----, 2006 WL 3456559 ................................... 67
Bulanek v. WesTTex 66 Pipeline Co., 209 S.W.3d 98 .............................................................. 68
Cameron Appraisal District v. Rourk, 194 S.W.3d 501 ........................................................... 24
Cary v. Alford, 203 S.W.3d 837 .................................................................................................. 58
Childers v. Advanced Foundation Repair, 193 S.W.3d 897 .................................................... 24
Chisholm v. Chisholm, 209 S.W.3d 96 ....................................................................................... 72
Citizens Insurance Company of America v. Daccach, --- S.W.3d ----, 2007 WL 623799 ...... 98
Citizens National Bank in Waxahachie v. Scott, 195 S.W.3d 94 ............................................. 32
City of Angleton v. USFilter Operating Services, Inc., 201 S.W.3d 677 ................................. 56
City of Dallas v. Saucedo-Falls, --- S.W.3d ----,2007 WL 704921 .... .... ....... ..... ..................... 106
City of Dallas v. Thompson, 210 S.W.3d 601 .............. .... .................................................. ........ 72
City ofDallas v. Vanesko, 189 S.W.3d 769 ..................................................................... ............. 7
City of Galveston v. State of Texas, --- S.W.3d ----, 2007 WL 624076 .................................. 103
City of Grapevine, Texas v. Sipes, 195 S.W.3d 689 .............................................. .................... 34
City of Houston v. Clark, 197 S.W.3d 314 ................................................................................ 47
City of Houston v. J ackson, 192 S.W.3d 764 ............................................................................... 7
City of Houston v. United Water Services, Inc., 201 S.W.3d 690 ........................................... 56
City of Houston v. Williams,--- S.W.3d ----,2007 WL 549745 ........................................... ..... 97
City of Irving v. Inform Construction, Inc., 201 S.W.3d 693 .................................................. 56
City of Marshall v. City of Uncertain, 206 S.W.3d 97 ............................................................ .. 27
City of Midland v. Goerlitz, 201 S.W.3d 689 ............................................ ....... .............. ........... 56
City of San Antonio v. Hartman, 201 S.W.3d 667 .. ........................................ .......................... 52
City of San Antonio v. TPLP Office Park Properties,--- S.W.3d ----,2007 WL 431048 ...... 90
City of Sweetwater v. Waddell,--- S.W.3d ----, 2007 WL 704927 ......................................... 107
City of Tyler v. Beck, 196 S.W.3d 784 .............................. ......................................................... 46
City of Waco, Texas v. Abbott, 209 S.W.3d 104 ......................................... .............................. 75
City of Waco, Texas v. Kelley, 197 S.W.3d 324 ........................................................................ 48
Coca-Cola Company v. Harmar Bottling Company,--- S.W.3d ----, 2006 WL 2997436 ...... 58
Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797 ................................................. ...... ... 35
Tex. Sup. Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 3 of 118- 3/27/2007

County of Dallas v. Walton, --- S.W.3d ----, 2007 WL 490032 ................................................. 95
County of Dallas v. Wiland,--- S.W.3d ----, 2007 WL 489983 ..... ............................................ 93
Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448 ............................................................ 42
Doe 1 v. Pilgrim Rest Baptist Church,--- S.W.3d ----,2007 WL 70494 1.. ............................ 109
E d Rachal Foundation v. D' Unger, 207 S.W.3d 330 ... ...................................... ....................... 11
Evanston Insurance Co. v. ATOFINA Petrochemicals, Inc.,--- S.W.3d ----, 2006 WL
1195330 ......... ......................................................... .............................. ..................................... 15
Evanston Insurance Co. v. ATOFINA Petrochemicals, Inc., 2006 Tex. LEXIS 439; 49 Tex.
Sup. J. 589 ..... ............ ...................... ......................... .......... ........... ............................................ 63
F.F.P. Operating Partners v. Duenez,--- S.W.3d ----,2006 WL 3110426 ...................... ......... 66
F iess v. State Farm Lloyds, 202 S.W.3d 744 ............................................................................. 51
Fifth Club, Inc. v. Ramirez, 196 S.W.3 d 788 ............................................................................ 43
Gonzalez v. McAllen Medical Center, Inc., 195 S.W.3d 680 ................................................... 27
Guest v. Dixon, 195 S.W.3d 687 ................ ....... ............... ................................................ ........... 34
GuideOne Elite Insurance Company v. Fielder Road Baptist Church, 197 S.W.3d 305 .. .... 45
Hallco Texas, I nc. v. McMullen County, --- S.W.3d ----, 2006 WL 3825298 .......... ............ .... 85
Hernandez v. National Restoration Technologies, L.L.C., 211 S.W.3d 309 ........... ................ 85
Higgins v. Randall County Sheriffs Office, 193 S.W.3d 898 .................................................. 23
Hood v. Wal-Mart Stores, Inc.,--- S.W.3d ----, 2007 WL 549746 ........................................... 96
Hoover Slovacek LLP v. Walton , 206 S.W.3d 557 ................................................................... 67
In reApplied Chemical Magnesias Corporation, 206 S.W.3d 114 ................... ...................... 52
In re Bank One, N. A.,--- S.W.3d ----, 2007 WL 549744 .......... .................... ....... ..... .... ............ 96
In re Barnett, 207 S.W.3d 326 ..................... ............................. .. ....................................... ...... ... 10
In re Castillo, 20 1 S.W.3d 682 .................................................................................................... 55
In reD. Wilson Construction Co., 196 S.W.3d 774 .................................................................. 49
I n re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161 ........................................................ .... ..... 37
In re Derzapf, 2007 WL 867013, (Tex. 2007) ..... ................................ .. ...................... ............. 110
In reDiscount Rental, Inc.,--- S.W.3d ----,2007 WL 624075 .. .......... .... ................................ 104
In re Ford Motor Company, 211 S.W.3d 295 ............ ......................................................... ...... 83
In re General Electric Capital Corporation, 203 S.W.3d 314 ......................... ........................ 57
In re Graco Children 's Products, Inc., 210 S.W.3d 598 ........................... ............................... 62
In re HECHT, 213 S.W.3d 547 .................................................................. ................................. 64
In re Karen Mays-Hooper, 189 S.W.3d 777 ................................................................................ 9
In re Palacios, --- S. W .3d ----, 2006 WL 1791683 ........................... .................................... .. ..... 49
I n re Palm Harbor Homes, Inc., 195 S.W.3d 672 .................... ..................... ............ ........ ........ 29
I n re Ron Smith, 192 S.W.3d 564 ......... ..... .. ............................................................................... 2 1
In re Texas Department of Family and Protective Services, 2 10 S.W.3d 609 ..... ............... ... 77
In re Texas Department of Family and Protective Services, Not yet reported in S.W.3d, 2006
WL 2708467 ............................................................................. ................................................ 56
In re Texas Department of T ransportation an d In re Gillespie County,--- S.W.3d ----, 2007
WL 704584 ............ ............. ............... .............. ......... ........ ................................. ..................... 107
In re The Lynd Company, Relator, 195 S.W.3d 682 ................................................................ 31
In the Interest of A.M., 192 S.W.3d 570 ...................................... ...... ........... ...................... ....... 14
In the Interest of H.R.M., 209 S.W.3d 105 .............................. .............................................. .... 73
In the I nterest of R.R., 209 S.W.3d 112 ............... ... ................................................................... 74
Jack in the Box, Inc. v. Skiles, --- S.W.3d ----,2007 WL 431045 ..................................... ........ 92
Jernigan v. Langley, 195 S.W.3d 91 ........................ ................................................................... 3 1
Tex. Sup. Ct .Summaries-© L. Wayne Scott - St. Mary's Alumni Reunion Program 2007
Page 4 of 118 - 3/27/2007

Kiefer v. Touris, 197 S.W.3d 300 .................. ........... .. .................................................... ............ 23
Kroger Co. v. Elwood, 197 S.W.3d 793 .... .............. ................................................................... 22
Kroger Texas Limited Partnership v. Suberu, --- S.W.3d ----, 2006 WL 1195331 ................ 16
Land Rover U.K., Ltd. v. Hinojosa, 210 S.W.3d 604 ............. ...... .... ........ .... ........ ... ..... .. ......... 76
Larson v. Downing, 197 S.W.3d 303 ........... .................... ......... ................. .. ............................... 30
Lexington Insurance Company v. Strayhorn, 209 S.W.3d 83 ........ ....... ...... ............... ..... .. ...... 70
LMB, Ltd. v. Moreno, 201 S.W.3d 686 .... ...... ............... ..... ........ ..... ............ ............. ..... ............. 54
Long Trusts v. Griffin,--- S.W.3d ----, 2006 WL 3524376 ..... ................. ................................. 75
Loram Maintenance of Way, Inc., v. Ianni, 21 0 S.W.3d 593 ........................................ ........... 44
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 ........ .. ................................................ ................ 60
Metropolitan Transit Authority v. M.E.B. E ngineering, Inc., 201 S.W.3d 692 ....... .. ........ .... 56
Meyer v. WMCO-GP, LLC, 211 S.W.3d 302 ...................................... ...................................... 82
Minnesota Life Insurance Company v. Vasquez, 192 S.W.3d 774 ........................................... 8
Moki Mac River Expeditions v. Drugg, --- S.W.3d ----,2007 WL 623805 ............................ 101
Norris v. Thomas, --- S.W.3d ----, 2007 WL 428075 ................... .............................................. 90
O'Donnell v. Smith, 197 S.W.3d 394 ............................. ....... ................................................. ..... 51
Ontiveros v. Flores, --- S.W.3d ----,2007 WL 624079 ..... ........ ............ ...... ................... ......... 105
Parker v. Barefield, 206 S.W.3d 119 ................................. ....... ........................................... ....... 63
PeNa v. McDowell, 201 S.W.3d 665 .................... ................................. ......................... ... ... .... ... 54
Reata Construction Co. v. Dallas ..... ...... .... .. ......... ...... ...... .... ............. ...... .............. .................... 56
Reata Construction Corp. v. City of Dallas, 197 S.W.3d 371 ............... ............. .... .......... .... .... 39
Ross v. National Center for the E mploy ment of the Disabled, 197 S.W.3d 795 ........... .... ..... 37
Ross v. National Center for the E mployment of the Disabled, 201 S.W.3d 694 ......... ........... 54
Seagull Energy E&P, Inc. v. Eland E nergy, Inc., 207 S.W.3d 342 .............. .......... ................. 34
Shupe v. Lingafelter, 192 S.W.3d 577 ... ........................................................ ..................... ....... 18
Slovacek LLP v. Walton, Not yet reported in S.W.3d, 2006 WL 1791694 ........................ ...... 48
St. Luke's E piscopal Hospital v. Marks, 193 S.W.3d 575 ........................................................ 20
State Farm Life I nsurance Co. v. Martinez,--- S.W.3d ----,2007 WL 431043 ............. ......... 91
State Farm Mutual Automobile Insurance Co. v, Nickerson , --- S.W.3d ----, 2006 WL
3754824 ................................................................ ............................................... .. .................... 82
State Farm Mutual Automobile Insurance Co. v. Norris, --- S.W.3d ----,2006 WL 375158 82
State of Texas v. Delany 197 S.W.3d 297 ...................................................... .......... ............. ...... 14
State of Texas v. Shumake, 199 S.W.3d 279 ........................ ...... ............. ................................... 38
Sudan v. Sudan, 199 S.W.3d 29 1..................... .. ... .. ............ ...... ............................. ..... ................ 47
Texas Department of Public Safety v. Alford, 209 S.W.3 d 101.. ...... ................................ ....... 71
T homas v. Long, 207 S.W.3d 334 .......... ........................... .......................................................... 10
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 ................................................. ......... .... 77
Tooke v. City of Mexia, 197 S.W.3d 325 .................................................... ............................... 41
Tooke v. City of Mexia ............................. ................................. ........................................ .......... 56
Tran v. Macha,--- S.W.3d ----, 2006 WL 3456550 ............................. ............................. .......... 70
United Services Automobile Association v. Brite, --- S.W.3d ----, 2007 WL 283826 ............. 88
University of Texas Medical Branch at Galveston v. Estate of Blackmon, 195 S.W.3d 98 .. 33
Varner v. C ardenas,--- S.W.3d ----, 2007 WL 624074 ......... ............................... ................... 105
Via Net v. TIG Insurance Co., 21 1 S.W.3d 310 ................... ................. .................... ................ 84
Wachovia Bank of Delaware v. Gilliam,--- S.W.3d ----, 2007 WL 427977 ...... .................... .. 92
Western Steel Co. v. Altenburg, 206 S.W.3d 121 ........................................ ... .......................... 63
Wilhelm v. Flores, 195 S.W.3d 96 ................... ..... .......................... ................................... .... ..... 28
Tex. Sup. Ct .Summa ries - © L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 5 of 118 - 3/27/2007

Willis v. Donnelly, 199 S.W.3d 262 ............................................................................................ 25
Zipp v. Wuemling, --- S.W.3d ----,2007 WL 704581 .............................................................. 106

Tex. Sup. Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 6 of 118- 3/27/2007

Summaries of Decisions
April 7, 2006 - March 23, 2007
City ofDallas v. Vanesko, 189 S.W.3d 769
04-0263
4/7/2006
Justice Green. Justice O'Neill filed a dissenting opinion.
Zoning Ordinance Can Be Enforced, Even Though Had Given Preliminary Approval To
The Owner's Building Plans.
A city can enforce a zoning ordinance against a property owner whose substantially completed
new home has been built in violation of the ordinance, even though the city had given
preliminary approval to the owner' s building plans. The mere issuance of a building permit does
not render a city's zoning ordinances unenforceable, nor does the fact that a permit was issued in
error entitle the property owner to a variance in every case. Because the property owners'
hardship was personal in nature, and because the Board was not required to consider the
erroneous issuance of a building permit, it cannot be said, on the facts of this case, particularly
under the restrictive scheme imposed by the Dallas City Code, that a clear abuse of discretion
OCCUlTed.

Zoning Board. Court Review Of Decisions By A Zoning Board.
As a quasi-judicial body, the decisions of a zoning board are subject to appeal, before a state
district court, upon application for a writ of certiorari. The district court sits only as a court of
review, and the only question before it is the legality of the zoning board's order. To establish
that an order is illegal, the party attacking the order must present a very clear showing of abuse
of discretion. A zoning board abuses its discretion if it acts without reference to any guiding
rules and principles or clearly fail s to analyze or apply the law correctly. With respect to a
zoning board' s factual findings, a reviewing court may not substitute its own judgment for that of
the board. Instead, a party challenging those findings must establish that the board could only
have reasonably reached one decision. The abuse-of-discretion review is necessarily less
deferential when considering any legal conclusions made by the zoning board, and is similar in
nature to a de novo review.

**********************
City of Houston v. Jackson, 192 S.W.3d 764
04-0465
4/7/2006
Justice O' Neill
Fire Fighters' Civil Sen,ice. Failure To Implement Decision Of Hearing Examiner (As
Opposed To A Decision Of The Commission) Does Not Impose Daily Penalty.
Tex. Loc. Gov't Code § 143.134(h) imposes a $1 ,000 penalty, payable to an aggrieved fire
fi ghter for each day a department head intentionally fails to implement a decision of the Fire
Fighters' and Police Officers' Civil Service Commission (the " Commission") under Section
143.131 , or a decision of a hearing examiner under Section 143.129 that has become final. The
Tex. Sup. Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 7 of 118 - 3/27/2007

penalty prov1s10n, however, does not apply to a grievance examiner' s unappealed
recommendation under Section 143 .130 of the Code. The Code contains substantive distinctions
between grievance examiners and independent third party hearing examiners, and those
distinctions must inform our construction of the statutory penalty provision. A grievance
examiner's recommendation does not "become" a final "decision" of the Commission when no
one appeals; rather, Section 143.1 30 specifically provides that the solution is deemed "accepted"
by the parties: The grievance examiner's recommendation concerning Jackson's grievance was
not a sanctionable decision under Section 143 .134(h); therefore, the trial court lacked jurisdiction
over Jackson' s statutory penalty claim.

******** ************* *
SIGNIFICANT DECISION
Minnesota Life Insurance Company v. Vasquez, 192 S.W.3d 774
04-0477
4/7/2006
Justice Brister delivered the opinion of the Court.

Extra-Contractual Damages Are Not Available Against Insurer Unless Its Actions Were
False, Deceptive, Or Unfair.
According to the autopsy report and death certificate filed at the time of death, Joe Vasquez
" [f] ell and hit back of head" [sic]. But both documents listed hi s cause of death as "[s]eizure
disorder with encephalopathy followed by blunt force trauma to the head." The policy h ere
provided coverage if "death results directly and independently ofall other causes ... from an
accidental injury" (emphasis added). As the documents here listed both a seizure disorder and a
blow to the head as the cause of death, they unquestionably di sclosed an "accidental injury," but
not one that was the sole cause of death "independently of all other causes." The mortgage
insurer in this bad-faith case took six months to pay off the insured's mortgage, because (1) the
death certificate made coverage uncl ear and (2) the ho spital took four months to produce the
remaining medical records. It is undisputed that all Minnesota Life ever knew about the cause of
death here was what appeared in the autopsy report and death certificate. Finding the insurer had
knowingly engaged in an unfair or deceptive act, a jury awarded extra-contractual damages on
top of the $4 1,000 mortgage whi ch the insurer paid after suit was fi led. Applying a statutory cap,
the trial cout1 entered a reduced judgment for additional damages, mental anguish, and attorney's
fees , and the court of appeals affirmed. Held: Reversed and remanded. When insurers are
negligent, the Texas Insurance Code does not grant policyholders extra-contractual damages.
Instead, such damages are reserved for cases in which an insurer knew its actions were false,
deceptive, or unfair. There is no such evidence here. Claims for extra-contractual damages
should not be a routine addition to every breach-of-policy case. The Constitution requires
" [e]xacting appellate review" of dan1ages that punish, rather than compensate. As the autopsy
report and death certificate were all the insurer had, if coverage was not reasonably clear from
them, it was not reasonably clear at all. Since the policy covered death caused independently of
any bodily infirmity, it was not reasonably clear here. Accordingly, we hold there is no evidence
that the insurer failed to pay the claim after coverage had become reasonably clear.
Extra-Contractual Damages.
Could Not Disregard It.

Disregard Contrary Evidence Unless Reasonable Ju rors

Tex. Sup. Ct .Summ aries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 8 of 118 - 3/27/2007

The court of appeals found some evidence that Minnesota Life failed to pay this claim, after
coverage had become reasonably clear. But it reached that conclusion by " [c ]onsidering only the
evidence offered in support of the finding." 133 S.W.3d 320,328. As recently noted in City of Keller
v. Wilson, 168 S.W.3d 802, 817-18 (Tex. 2005), using this standard in insurance bad-faith cases is
problematic, as coverage will almost always be reasonably clear, if reviewing courts must
disregard all evidence that it was unclear. Instead, appellate courts look at all the evidence in
such cases, crediting favorable evidence if reasonable jurors could, and disregarding contrary
evidence unless reasonable jurors could not. Applying that standard, there was no evidence that
the insurer failed to settle this claim after coverage had become reasonably clear. It is
undisputed that all Minnesota Life ever knew about the cause of death here was what appeared in
the autopsy report and death certificate. Those documents described an "accident" in which
unquestionably disclosed an "accidental injury," but not one that was the sole cause of death
"independently of all other causes." Similarly, the policy excluded payment of benefits if "death
results from or is caused directly or indirectly by . . . bodily or mental infirmity, illness or
disease". Again, by listing both a seizure and an accident, the documents suggested that a bodily
infirmity or illness had contributed at least indirectly to the death.
Insurance Code Penalties For Delayed Investigation And Payment Of Claims.
The Insurance Code contains several penalties for delayed investigation and payment of claims.
State law requires an insurer to accept or reject a claim within 15 business days after receiving
"all items, statements, and forms required," a deadline the insurer may extend an additional 45
days by notifying the insured of the reasons why it needs additional time. Failure to meet these
deadlines entitles the insured to 18 per cent interest and reasonable attorney's fees. But the Code
also defines failing to affirm or deny coverage within a reasonable time as an "unfair settlement
practice." Standing alone, such a claim entitles an insured only to actual damages and attorney's
fees. But if the conduct is committed knowingly, mental anguish and additional damages are
available.

**********************
I n re Karen Mays-Hooper, 189 S.W.3d 777
04-1040
417/2006
Per Curiam. Justice Willett did not pmiicipate in the decision.
Grandparents Denied Access To Grandchildren In Possession Of Mother.
This is an original mm1damus proceeding. The subject of these proceedings is a son born to
Karen Mays-Hooper and her husband Kelly Hooper, in 1997. The couple divorced in 2000, and
Kelly died in 2003. After Kelly' s death, conflicts arose between Karen and her mother-in-law,
Linda Thornton, resulting in a suit by the latter, for court-ordered access to the child under Tex.
Fam. Code § 153.432 (since amended). The trial court rejected Karen's claims that the statute
was unconstitutional, and awarded her mother-in-law visitation. The court of appeals denied
mandamus relief. Held: Writ of mandamus will issue. In Troxel v. Granville, 530 U.S. 57
(2000), the Supreme Court of the United States held unconstitutional a Washington trial court's
order granting a boy's grandparents visitation rights over the objection of his mother. Because
the trial court's order here is indistinguishable, it must meet the same fate. In this case (as in
Troxel), there was no evidence that the child ' s mother was unfit, no evidence that the boy 's
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health or emotional well-being would suffer, if the comi deferred to her decisions, and no
evidence that she intended to exclude Thornton's access completely. As the statute at issue here
has since been amended, the Supreme Court declines to analyze the repealed statute more
extensively.

**********************
In re Barnett, 207 S.W.3d 326
06-0275
4/21 /2006
Per Curiam
Elections. Ballot Application Sufficient, If Enough Information To Determine Residency Is
Provided.
This is an original mandamus proceeding. Barnett seeks to require the Dallas ISO, and Secretary
of the Board of Trustees of the DISD, to place his name on the ballot, as a candidate for DISD
Trustee, District Six. Barnett timely filed an application to become a candidate for an unexpired
term for DISD Trustee, District Six. DISD rejected Barnett's application. Held: Writ of
mandamus will issue. Barnett was eligible for the office of Dallas ISD Trustee, even though he
omitted his street address from his permanent residence address on his application to place his
name on the ballot, and instead provided that information in the adjacent space reserved for a
separate mailing address. Barnett provided sufficient information in his application to allow the
respondents to determine that he resides in District Six.
Election Contests. Election Officials Do Not Have Authority To Determined Disputed Fact
Issues Concerning Eligibility.
Election officials do not have the authority to independently determine di sputed questions of fact
regarding a candidate's eligibility.

**********************
Thomas v. Long, 207 S.W.3d 334
03-0204
4/2 1/2006
Justice Wainwright
Jurisdiction. Trial Court May Dismiss Claim, Over ·w hich It Does Not Have Subject
Matter Jurisdiction, And Retain Jurisdiction of Other Claims.
This is an interlocutory appeal of a trial court's denial of a jurisdictional plea. Held: It is proper
for a trial court to dismiss claims, over which it does not have subject matter jurisdiction, but to
retain claims in the same case, over which it has jurisdiction. A trial court is not required to deny
an otherwise meritorious plea to the jurisdiction, or a motion for summary judgment based on a
jurisdictional challenge concerning some claims, because the trial co urt bas jurisdiction over
other claims. "To the extent some courts of appeals have held otherwise, we disapprove of those
holdings."

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Jurisdiction Over Interlocutory Appeals Of Jurisdictional Challenges Raised In Motions
For Summary Judgments.
While the record does not contain an order explicitly denying a plea to the jurisdiction, and
Defendant-Sheriff Thomas did not file a document titled "plea to the jurisdiction" with the trial
court, Thomas's summary judgment motion clearly challenged the trial court' s subject matter
jurisdiction. The Court of Appeals dismissed for want of jurisdiction. 97 S.W.3d 300, 302.
Held: A governmental unit's challenge to subject matter jurisdiction is appealable if raised in a
motion for summary judgment. In Tex. Civ. Prac. & Rem. Code§ 51.014(a)(8), the Legislature
provided for an interlocutory appeal when a trial court denies a governmental unit's challenge to
subject matter jurisdiction, iiTespective of the procedural vehicle used. "To the extent some
courts of appeals have held otherwise, we disapprove of those holdings."
Preservation Of Error. Trial Court's Ruling On Merits Implicitly Denies Jurisdictional
Attack.
Because a trial court cannot reach the merits of a case without subject matter jurisdiction, a trial
court that rules on the merits of an issue, without explicitly rejecting an asserted jurisdictional
attack, has implicitly denied the jurisdictional challenge.
Employment Termination. An Employee Subject To For-Cause Termination Has A
Property Right In Continued Employment.
An employee, subject to for-cause tern1ination, has a property interest in continued employment,
sufficient to entitle the employee to judicial review of an administrative decision to terminate
employment.
Civil Service Commission Has Exclusive Jurisdiction, Where The Employees Are Given
Rights Not Existing At Common Law.
Tex. Loc. Gov't Code §158.033 and §158.034 of the Texas Local Government Code permit the
creation of a sheriffs department civil service system, and a commission in certain counties.
Once the employees of a department elect to create a commission, here, the Harris County
Sheriffs Department Civil Service Commission, and the commission's rules create rights, which
employees would not have at common law (here, by promulgating Rule 12.03(a), as authorized
by the Local Government Code, the Commission vested Department employees with for-cause
employment status), the commission obtains exclusive jurisdiction over those matters.

**********************
Ed Rachal Foundation v. D'Unger, 207 S.W.3d 330
03-1101
4/21/2006
Per Curiam
Employment Contracts For A Fixed Sum & Period Does Not Constitute A Promise Of
Definite E mployment For That Term.
The Foundation's hiring ofD'Unger at a salary of$80,000 per year did not bind the Foundation
to a contract of renewable one-year terms. Hiring an employee at a stated sum per week, month,
or year does not always constitute a promise of definite employment for that term. Instead,
employment is presumed to be at-will in Texas, absent an unequivocal agreement to be bound for
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that term. Standing alone, an agreement to pay at a stated rate is not enough; if it were, there
would be very few at-will employees.
Whistleblower May Not Recover When Asked Not To Report A Crime.
The Texas Supreme Court, in its decision in Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733
(Tex. 1985), created a narrow exception to at-will employment. This exception makes it
unlawful to terminate employees if the sole reason is their refusal to perform an illegal act.
Sabine Pilot protects employees who are asked to commit a crime, not those who are asked not to
report one. If failing to report a crime were itself a crime, then almost all whistleblowers could
claim the Sabine Pilot exception. Generally, failing to report a crime, like any other failure to act,
is not a crime unless a specific law "provides that the omission is an offense or otherwise
provides that he has a duty to perform the act." A general common-law cause of action for all
whistleblowers would eclipse the Legislature's decision to enact a number of narrowly-tailored
whistleblower statutes instead.
Criminal Conspiracy Requires An Intent To Assist In The Commission Of A Crime Before
It Occurs.
Criminal responsibility as a conspirator requires proof of culpable acts made with an intent to
assist in the commission of a crime before it occurs.
Misprision Of A Felony Requires Knowledge Of The Commission Of A Felony.
M isprision of a felony is committed by anyone who has "knowledge of the actual commission of
a felony" and yet "conceals and does not as soon as possible make known the same to some
judge or other person in civil or military authority under the United States." 18 U.S.C. § 4.
Although mere silence is generally not enough for conviction, we have noted that a literal
reading of the statute and some actual convictions suggest that it might be. But the crime still
requires "knowledge of the actual commission of a felony."

**********************
Brittingham-Sada de Ayala v. Kevin Michael Mackie, Not yet reported in S.W.3d, 2006WL
1043484
04-0160
4/2112006
Chief Justice Jefferson; Justice O'Neill and Justice Green did not participate in the decision.
Interlocutory Appeal Not Allowed From Probate Court's Refusal To Dismiss For Want Of
Jurisdiction.
This is an interlocutory appeal. Maria Cristina Brittingham-Sada de Ayala ("Ayala"), defendant
below, alleged that the trial court lacked subject matter jurisdiction over this ancillary probate
proceeding invoh·ing the estate of her father, a Mexican testator, whose will was probated in
Mexico. The trial court denied Ayala's motion to dismiss, and she pursued an interlocutory
appeal. The court of appeals concluded that it had jurisdiction over the appeal, and the parties
now agree. Held: The court of appeals' judgment is reversed and the appeal is dismissed. An
order denying a motion to dismiss an entire proceeding for want of subject matter jurisdiction
does not dispose of a claim that, if asserted independently, would be the proper subject of a
lawsuit. Moreover, the trial court's order was interlocutory, because it did not dispose of all
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parties or issues in a particular phase of the proceedings. An order denying a plea to the
jurisdiction and refusing to remove an executor does not end a phase of the proceedings, but sets
the stage for the resolution of all proceedings, and, is, therefore, interlocutory.
Interlocutory Appeal Not Allowed By Failure To Remove Executor.
The court of appeals did not reach Ayala's other alleged basis for appellate jurisdiction: that the
trial court's failure to remove Ms. Brittingham as executor was immediately appealable pursuant
to Tex. Civ. Prac. & Rem. Code §51.014(a) (2), as an order that "overrules a motion to vacate an
order that appoints a receiver or trustee." Held: The judgment of the court of appeals is
reversed, and the appeal is dismissed. Section 51.0 14(a)(2) does not permit Ayala to pursue an
interlocutory appeal of the trial court's order. The Legislature did not intend by that language to
give appellate courts jurisdiction over all orders refusing to remove estate executors. The
Legislature enacted the statute permitting interlocutory appeal of orders overruling motions to
vacate orders appointing receivers or trustees in 1917, and the provision remains substantially
unchanged today. At no time during the statute's almost ninety-year history has it been applied to
a motion to remove an estate's executor.
Interlocutory Appeals By Agreement Of The Parties And The Court Is Permitted.
Pursuant to Tex. Civ. Prac. & Rem. Code§ 51.014(d), if the parties and the trial court agree, the
parties may seek a permissive interlocutory appeal. The trial court may order an interlocutory
appeal, if ( 1) the parties agree that the order involves a controlling question of law as to which
there is a substantial ground for difference of opinion; (2) an immediate appeal from the order
may materially advance the ultimate termination of the litigation; and (3) the parties agree to the
order.

**********************
Allstate Indemnity Co. v. Forth, 204 S.W.Jd 795
05-0057
4/21/2006
Per Curiam
Standing Requires Damage Or An Injury To The Plaintiff-Insured.
An insured does not have standing to sue her insurance company for settling her medical bills in,
what the insured considered to be, an arbitrary and unreasonable manner. In reversing the trial
court and remanding the case for trial, the court of appeals concluded that the insured had
standing, even though the insured bad no out-of-pocket expenses, and her health care providers
had not, and now could not, collect any additional sum from her. 151 S.W.3d 732, 738. Held:
Reversed and dismissed, because there are no allegations that the insured suffered damages, or
that the manner in which the insurance company settled the insured's medical expenses caused
her any injury. To have standing a party must have suffered a threatened or actual injury. F01ih
does not claim that she has any unreimbursed, out-of-pocket medical expenses. She does not
assert that these providers withheld medical treatment as a result of Allstate reducing their bills,
or threatened to sue her for any deficiency, or harassed her in any other manner. Moreover, F01ih
has no exposure in the future, because limitations have now run on the medical claims. From all
appearances, her medical providers have accepted the amount which Allstate paid them, without
complaint, thereby satisfying Allstate ' s obligation under the policy.
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State of Texas v. Delany 197 S. W.3d 297
04-0628
4/28/2006
Per Curiam
Condemnation. There Is No Damage Because Hypothetical Development Plans Have To
Be Modified Because Of Changed Access.
In this inverse condemnation case, the owner of raw land recovered a judgment for 90 percent of
the property's value based on alleged impairment of access. The state had, in 1947, acquired
property belonging to the Delanys' predecessors to construct and Interstate Highway. At that
time, the Delanys' predecessors had access from the remaining property to the highway . In 1965
the State began constructing an overpass Road at the intersection. For this project the State
condemned an additional 5.733 acre tract, known as Parcel 9, from the Delanys' predecessors. In
its 1965 Petition for Condemnation of Parcel 9, the State pleaded that the Delanys' "right of
ingress and egress to or from the remaining property abutting on said highway is not to be
denied." property of defendants abutting on said highway is not to be denied. A connector road
was constructed, but has now been destroyed. There was evidence that the Delanys' land could
be reached by constructing two driveways. The trial court found that the Delanys had an
easement of access to the Connector Road that was destroyed by its removal. Finding that the
State had "abandoned" Parcel 9, the court found that the Delanys' property was landlocked, and
that altematively any proposed driveways across it would be unsafe. The court of appeals
affirmed. Held: Reversed and rendered that the Delanys take nothing. While condemned
property may be appraised at its highest and best use, remaining propet1y on which there are no
improvements and to which reasonable access remains, is not damaged simply because
hypothetical development plans may have to be modified. The property owners are entitled only
to reasonable access, not the most expansive or expensive access their planners might design.

**********************
In the Interest of A.M., 192 S.W.3d 570
03-0509
5/5/2006
Justice Medina. Justice Johnson delivered a concurring and dissenting opinion.
Child Support. Reimbursement Or Offset When Obligor Parent Possesses Child For
Periods Exceeding Court-Ordered Possession.
Tex. Fam. Code§ 157.008(d) provides that an obligor parent, who by agreement has possessed a
child for periods exceeding court-ordered possession, and who has provided actual support for
the child during such period, "may request reimbursement for that support as a counterclaim or
offset against the claim of the obligee [parent]." The com1 of appeals concluded that this statute
provided the obligor both an offset and an affirmative right to reimbursement for periodic child
support payments during a period of excess possession. 101 S.W.3d 480. Held: Reversed and
remanded to the trial court. The statute does not create both a defense and an affirmative right to
collect child suppot1 from the obligee. Depending on the circumstances, the obligor may be
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entitled to an offset, or to affirmative reimbursement, but not to both as to any particular periodic
payment. Whether an obligor parent is entitled to an offset or to reimbursement will depend on
whether such parent continued to pay the court-ordered support obligation during all, or part, of
the period of excess possession. If support was paid during this period, the obligor must seek
reimbursement; if it was not, the obligor must ask for an offset. Moreover, the statute is purely
defensive.
Standing. Attorney General Has Standing To Defend Against Claims For Offset Or
Reimbursement By Party Obligated To Pay Child Support.
The Attorney General, as assignee of the obligee' s child support claim, had standing to fully
litigate all issues raised by the obligor under Tex. Fam. Code § 157.008(d). Section 157.008
operates only as a defense to a motion to enforce an existing order, albeit a defense with two
sides - offset, if support has not been paid to the obligee during a period of excess possession,
and affirmative reimbursement, if support has been paid. The Attorney General, as the Title IVD agency and Chism's assignee, is fully authorized to sue for unpaid child support and defend
against any claim that might affect that collection.
Child Support Offset Or Reimbursement During Period Of Excess Possession Did Not, In
This Case, Require Proof To Measure Actual Support.
[Part III] The court of appeals concluded that Tex. Fam. Code § 157.008(d) provided the obligor
both an offset and an affirmative right to reimbursement for periodic child support payments
during a period of excess possession, and that the obligor did not have to provide an accounting
of expenses to receive this relief. It was undisputed that the father, Mullen, solely supported his
son and daughter, and later his son, during the two relevant periods of excess possession. Held:
While there is disagreement among the courts of appeals regarding the proof needed to measure
"actual support" under section 157.008., the court of appeals, here, could reasonably presume, as
it did, that during the period of excess possession Mullen was entitled to equate his monthly
child support obligation to the actual support he provided each child. On this record, nothing
more was required.

**********************
Evanston Insurance Co. v. ATOFINA Petrochemicals, Inc., --- S.W.3d ----, 2006 WL
1195330
03-0647
5/5/2006
Justice Green
Insurance; Excess. Additional Insurance Provision Of Excess Policy Was Not Broad
Enough To Indemnify The Third Party's Own Negligence.
ATOFINA Petrochemicals, Inc. hired TripleS Industrial Corporation as an independent
contractor to perform maintenance and construction work at ATOFINA's Port Arthur oil
refinery. A Triple S employee was killed at the ATOFINA facility while performing work
pursuant to the independent contractor agreement between ATOFINA and Triple S. The
employee' s relatives sued ATOFINA for wrongful death, and received a favorable settlement.
ATOFINA seeks indemnification for its share of the settlement from one of TripleS's insurers,
Evanston Insurance Company. Held: The additional insured provisions of the excess insurance
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policy in question [set forth in the opinion] are not broad enough to indemnify the third-party's
own acts of negligence. The policy language excludes coverage for the additional insured's sole
negligence and, for that reason, it is unnecessary to reach the second question. We remand for a
determination of the underlying liability issues.

**********************
Kroger Texas Limited Partnership v. Suberu, --- S.W.3d ----, 2006 WL 1195331
03-0913
5/5/2006
Chief Justice Jefferson. Justice Johnson filed an opinion concurring in part and dissenting in
part, in which Justice Medina joined, and in Part III ofwhich Justice Wainwright joined.
Sufficiency Of Evidence On Causation In Malicious Prosecution Action. P's Denial Of
Inclupatory Facts Insufficient. Plaintiff Must Prove Defendant Did Not Believe She Was
Guilty.
This is a malicious prosecution action. Suberu went to a Kroger grocery store to purchase
medication. Parkey, Kroger's pharmacy technician, recognized Suberu as a prior customer,
assumed she had come to pick up medicine for her husband, Michael, and placed his medicine on
the counter. Suberu uses cash for all transactions and did not have enough in her purse to pay for
both her medicine and Michael's. Therefore, she told Parkey she would retrieve money from her
vehicle and would return momentarily. Suberu was leaving the store when Wier, the front-end
manager, yelled "Stop!" According to Wier, Suberu was pushing a grocery cart full of unsacked
goods. Suberu, however, testified that she has never used a cart to shop for groceries and did not
have one that evening. Police were called. While sitting in the office, Suberu explained that she
bad been at the pharmacy and was going outside to get cash from her vehicle. Despite these
pleas, neither the officers nor any Kroger employee checked with the pharmacy. The officers
arrested Suberu. After a jury acquitted her on misdemeanor theft charges, Suberu sued Kroger
and assistant store manager Moody (collectively, Kroger) for malicious prosecution and
intentional infliction of emotional distress. The jury returned a verdict in Suberu's favor on both
claims, and the trial court signed a judgment in conformity with the verdict. The com1 of appeals
affirmed. Held: Reversed and rendered. There was no evidence to suppm1ing a finding that
Kroger Jacked probable cause to report this case to the police. To establish Jack of probable
cause, Suberu relies primarily on her testimony that she did not have a cm1. In contrast to the
criminal case, however, here the question is not whether Suberu had a cart, but whether Kroger
reasonably believed she did. Three of Kroger's employees each testified that they observed
Suberu leaving the store with a cart containing items she had not purchased. The law presumes
that Kroger honestly and reasonably acted on the basis of these observations in repmiing S uberu
to police. Suberu's evidence is legally insufficient to rebut this presumption. To rebut the
probable cause presumption, Suberu had to produce evidence that the motives, grounds, beliefs,
or other information upon which Kroger acted demonstrate that it did not reasonably believe
Suberu was guilty of shoplifting. Although the critical question in this case was Kroger's state
of mind, Suberu produced no evidence that Kroger initiated her prosecution on the basis of
something other than a reasonable belief that she was guilty. Suberu's testimony does no more
than create a surmise or suspicion that Kroger did not believe she was guilty of shoplifting,
because it merely invites speculation that Kroger framed her and lied to the police. This

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conclusion, however, is no more probable than the proposition that Kroger's employees, each
independent of the others, mistakenly believed they observed the commission of a crime.
False Imprisonment. No Duty To Investigate Suspect's Alibi.
It is well settled that a private citizen has no duty to investigate a suspect's alibi or explanation
before reporting a crime. If the acts or omissions necessary to constitute a crime reasonably
appear to have been completed, a complainant's failure to investigate does not negate probable
cause. Thus, the fact that no one investigated Suberu's explanation is not evidence that probable
cause was lacking.
Sufficiency Of Evidence. Evidence So Slight As To Make An Inference A Guess Is No
Evidence.
Evidence that is so slight as to make any inference a guess is in legal effect no evidence. In a
malicious prosecution case, unless there is evidence rebutting the presumption of probable cause,
a prosecution resulting from eyewitness identifications that turn out to be incorrect or, at least,
insufficient to warrant a conviction, does not satisfy the exacting requirements for a plaintiff to
prevail in a malicious prosecution case.
Intentional Infliction Of Emotional Distress. Elements. Here No Evidence Of Extreme And
Outrageous Conduct.
To prevail on her claim of intentional infliction of emotional distress, the plaintiff had to prove
by a preponderance of the evidence that: (1) Kroger acted intentionally or recklessly; (2) its
conduct was extreme and outrageous; (3) its actions caused her emotional distress; and ( 4) the
emotional distress was severe. A defendant's conduct satisfies the second element only if it is
'"so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of
decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.'"
Conduct that is merely insensitive or rude is not extreme and outrageous, nor are "mere insults,
indignities, threats, annoyances, petty oppressions, or other trivialities."
Here, there is no
evidence that Kroger intentionally subjected her to such distress knowing she was innocent.
Consequently, Suberu's testimony, that she did not take a cmi full of food from the store without
paying for it, does not exceed a scintilla of evidence and is legally insufficient to support a
finding that Kroger's conduct was extreme and outrageous.

**********************
SIGNIFICANT DECISION
Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., 192 S.W.3d 780
04-0681
5/5/2006
Chief Justice Jefferson. Justice Green did not participate in the decision.
Standing. Decedent's Estate Has A Justiciable Interest In Estate-Planning Attorney
Malpractice.
The Terks-the joint, independent executors of their father 's estate- sued several attorneys and
their law firm, (collectively, the Attorneys) for legal malpractice. The Attorneys moved for
summary judgment on the ground that estate planners owe no duty to the personal
representatives of a deceased client's estate. The trial court granted summary judgment for the
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attorneys, and the court of appeals affirmed the judgment. 141 S.W.3d 706. Held: Reversed and
remanded. There is no legal bar preventing an estate's personal representative from maintaining
a legal malpractice claim on behalf of the estate against the decedent's estate planners for pure
economic loss, because such claims are necessarily limited to recovery for property damage.
The Court disapproves of the holding in Estate of Arlitt v. Paterson 995 S.W.2d 713, 720 (Tex.
App.- San Antonio 1999, pet. denied). Even though an estate may suffer significant damages
after a client's death, this does not preclude survival of an estate-planning malpractice claim.
Legal Malpractice. Elements Of The Cause Of Action. None For Beneficiaries Against
Attorney For Malpractice In Drafting A Will.
Legal malpractice claims sound in tort. The plaintiff must demonstrate that (1) the attorney owed
the plaintiff a duty, (2) the attorney breached that duty, (3) the breach proximately caused the
plaintiff's injuries, and ( 4) damages occurred. While an attorney always owes a duty of care to a
client, no such duty is owed to non-client beneficiaries, even if they are dan1aged by the
attorney 's malpractice. Thus, under the decision in Barcelo v. Elliott, 923 S.W.2d 575 (Tex.
1996), in Texas, a legal malpractice claim in the estate-planning context may be maintained only
by the estate planner's client. This is the minority rule in the United States-only eight other
states require strict privity in estate-planning malpractice suits. In the majority of states, a
beneficiary banned by a lawyer's negligence in drafting a will or trust may bring a malpractice
claim against the attorney, even though the beneficiary was not the attorney' s client.
Survival Actions. Contractual Claims Or Claims That Affect Property Rights Survive.
When no statute addresses the survivability of a cause of action, common law rules are applied.
At common law all causes of action for damages die with the person of the party injured, or the
person inflicting the injury, except such damages as grow out of acts affecting the property rights
of the injured party. Thus, absent a statute providing to the contrary, a cause of action that is
penal or personal in nature typically does not survive, whi le claims that are contractual in nature
or affect property rights survive the death of either party.
Legal Malpractice In Estate-Planning Survives Death.
While the primary damages at issue here-increased tax li ability--did not occur until after the
decedent's death, the lawyer's alleged negligence occurred while the decedent was alive.
Therefore, if the injury occurs during the client's lifetime, a claim for estate-planning
malpractice survives the client's death.

**********************
Shupe v. Lingafelter, 192 S.W.3d 577
05-0083
5/5/2006
Per Curiam
Jury Charge. Failure Jo Submit Instruction On Negligent E ntrustment Harmless Where
Party T o Whom Vehicle Was Entrusted Found Not To Be Negligent.
In this personal injury suit, it was shown that a truck was stopped in the eastbow1d lane of
Highway 67 on a narrow bridge. As traffic stacked up behind the truck, a van came to a stop
several vehicles behind the wide load. Heppler's pickup truck rear-ended the van and then
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swerved into the westbound lane into the path of an oncoming tractor-trailer driven by Shupe.
Shupe's tractor-trailer collided with Heppler's pickup, shearing the pickup's fuel tank and
causing a fire that injured Heppler's passengers. At the conclusion of the trial, the trial court
refused to submit an instruction on the allegation that Midwest Coast Transport (MCT)
negligently entrusted its truck to Shupe. The jury returned a verdict that the negligence of
Heppler, the driver of the pickup truck, was the sole cause of the multi-vehicle accident. The
jury further found that none of the negligence that caused the accident was attributable to Shupe,
or his alleged employer, MCT. Because the jury concluded that the plaintiffs suffered no
damages, the trial court entered a take-nothing judgment. The court of appeals reversed the
judgment and remanded. Held: Reversed and rendered that plaintiff take nothing. To succeed
on their negligent entrustment theory against MCT, the plaintiffs had to obtain a jury finding that
Shupe, the truck driver at the time of the accident, was negligent, and that his negligence
proximately caused the accident. The liability question answered by the jury asked whether the
negligence of Shupe proximately caused the accident. The jury's answer of "no" to this question
determined that either Shupe was not negligent or, if he were, his negligence did not proximately
cause the accident. The jury's negative finding on this question negated the unsubmitted
negligent entrustment issue as a matter of law. By specifically declining to find that Shupe was
negligent on the occasion in question or that his negligence proximately caused the accident, the
jury provided its answer to the negligent entrustment issue-and the vicarious liability issueelsewhere in the verdict. In addition, the jury' s finding that zero-percent of the negligence
causing the accident was attributable to Shupe and MCT precluded a finding of proximate cause
against them. Therefore, even if the negligent entrustment instruction had been submitted, it
would not have altered the verdict.
Courts Charge. Refusal To Submit An Instruction Reviewed Under An Abuse Of
Discretion Standard. Error Must Cause Harm.
A trial court' s decision to submit or refuse a particular instruction is reviewed under an abuse of
discretion standard. When a trial court refuses to submit a requested instruction on an issue
raised by the pleadings and evidence, the question on appeal is whether the request was
reasonably necessary to enable the jury to render a proper verdict. The omission of an
instruction is reversible error only if the omission probably caused the rendition of an improper
judgment. Error in the omission of an issue is harmless "when the findings of the jury in answer
to other issues are sufficient to support the judgment."

**********************
American Flood Research, Inc. v. Jones, 192 S.W.3d 581
05-0271
5/5/2006
Per Curiam
Discovery Sanctions. Party Does Not Have To Be Sanctioned Before Attorney Can Be
Sanctioned.
Attorney Harry Jones was sanctioned for discovery abuse committed in the course of
representing a group of employees in a suit brought by American Flood Research, Inc. (AFR).
Jones appealed the sanctions order. Because the trial court found that the attorney, but not the
party, abused the discovery process, the court of appeals held that the trial comi abused its
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discretion in imposing sanctions on Jones. The court of appeals reversed the judgment, holding
that the trial court abused its discretion in imposing sanctions. Held: Reversed and remanded to
the court of appeals. Sanctions may be visited exclusively on the attorney, if the evidence
demonstrates that the offensive conduct is attributable to counsel alone. A trial court's di scretion
to impose sanctions does not depend on whether it issues a specific finding that the "party"- in
this case, the employees-abused the discovery process. The order imposing sanctions neither
referred to a specific rule nor tracked the language of any particular rule; thus, contrary to the
court of appeals' analysis, whether the trial court properly sanctioned Jones is not governed by
Tex. R. Civ. P. 215.3 alone. Here, there is ample evidence to support a sanction against Jones
pursuant to Texas Rule of Civil Procedure 215 .2, a rule AFR cited in its motion for sanctions.
Discovery Sanctions. Standard Of Review.
A trial court's imposition of sanctions is reviewed for an abuse of discretion. The ruling will be
reversed only if the trial court acted "without reference to any guiding rules and principles," such
that its ruling was arbitrary or unreasonable. In determining whether the trial court abused its
discretion, the appellate court must ensure that the sanctions were appropriate or just. First, the
court must ensure that there is a direct relationship between the improper conduct and the
sanction imposed; in other words, the court should examine whether punishment was imposed
upon the true offender, and tailored to remedy any prejudice which the discovery abuse caused.
Thus, the trial court must determine whether sanctions should be imposed on the party, its
counsel, or both. Second, the court must make certain that less severe sanctions would not have
been sufficient to promote compliance.
Discovery Sanction Appropriate Where Attorney Instructed Clients Not To Attend
Deposition .
.Jones instructed certain of his clients not to appear for depositions ordered by the trial court. The
employees did not obey the court's order compelling depositions. The trial court sanctioned
Jones. Held: Because the record supports a finding that only Jones's conduct was sanctionable,
the trial court was within its discretion to impose sanctions on him alone and, therefore, the court
of appeals erred in reversing the sanctions order. Jones was present when the trial judge ordered
in open court that depositions begin January 6, yet neither Jones nor the employees appeared.
Thus, a Tex. R. Civ. P. 215 .2(b) prerequisite to imposing sanctions-a party's failure to comply
with an order to permit discovery- was satisfi ed .. Accordingly, the trial court, after serving notice
and holding a hearing, had the discretion to impose any "just" sanction authorized by Rule
215 .2(b ). Paragraphs (2) and (8) of Rule 215 .2(b) allow the trial court to impose sanctions
against the party or the a/forney advising the party, which may include charging the sanctioned
individual for court costs or the reasonable expenses caused by the failure to comply with the
di scovery order.

**********************
St. Luke's Episcopal Hospital v. Marks, 193 S.W.3d 575
05-0693
5/5/2006
Per Curiam
Case Remanded For Review In Light Of Diversicare.
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"The petition for review is granted. Without reference to the merits, the court of appeals'
judgment, 177 S.W.3d 255, is vacated and the case is remanded to the court of appeals for
fmiher consideration in light of our decision in Diversicare General Partner, Inc. v. Rubio, 185
S.W.3d 842 (Tex. 2005) [(holding that a claim for sexual harassment of a nursing home patient
was a health care claim)]. See TEX. R. APP. P. 59.1, 60.2(£)."

**********************
In re Ron Smith, 192 S.W.3d 564
06-0107 consolidated with 06-0108 (one opinion).
5/5/2006
Per Curiam
Supersedeas Bond. When Contested The Trial Court Must State Basis For Finding
Appellants Net Worth.
The Honakers obtained a judgment against Smith and Main Place in the total amount of
$800,820.44, plus post-judgment interest. Smith and Main Place filed notices of appeal with the
Second Court of Appeals. The Honakers began conducting post-judgment discovery in an effort
to enforce the judgment. Smith and Main Place filed cash deposits in lieu of bond in the amount
of $10.00 each and net worth affidavits to supersede enforcement of the trial comi's judgment,
and to stay post-judgment discovery. In the affidavits, Smith avened that his net worth was
negative $167,206.00 and that Main Place' s net worth was $0.00. The Honakers immediately
filed a contest to the affidavits of net worth and moved the trial court to set aside the cash
deposits in lieu of bond. They also filed a motion for sanctions and to compel discovery
responses in aid of the judgment. The trial court sustained the Honakers' contest. The trial court
found that the net worth affidavits were insufficient to adequately describe Smith' s and Main
Place's net wmih. Without stating the basis for its calculation, the trial court found that Smith's
net worth as of June 14, 2005 was $1 , 142,951; however, the court did not detennine Main
Place' s net worth. Held: Writ of mandamus is granted. Under Tex. R. App. P. 24.2(c)(3), when
a judgment creditor files a contest to the judgment debtor's affidavit of net worth, the trial comi
must hold a hearing and "issue an order that states the debtor's net worth and states with
particularity the factual basis for that determination.". The trial court abused its discretion by
issuing an order that did not state with pru.iicularity the factual basis for its determina6on of
Smith' s net wo1ih. Fmiher, the trial court found that R.A. Smith & Company, Inc. was Smith's
alter ego without stating the factual or legal basis for that conclusion.
Supersedeas Bond. Procedure For Determining Appellant's Net Worth.
Under Tex. Civ. Prac. & Rem. Code§ 52.006(b); Tex. R. App . P. 24.2(a)(l), when a judgment is
for money, the amount of security required to suspend enforcement of the judgment pending
appeal may not exceed the lesser of: (I) fifty percent of the judgment debtor' s net worth; or (2)
twenty-five million dollars. Under Texas Rule of Appellate Procedure 24.2(c)(l), a judgment
debtor who provides a bond, deposit, or security based upon its net worth "must simultaneously
file an affidavit that states complete, detailed infonnation concerning the debtor's assets and
liabilities from which net worth can be ascertained." A judgment creditor may challenge the
debtor' s affidavits, and the trial court must hear the judgment creditor's challenge promptly after
reasonable discovery concerning the judgment debtor' s net worth is complete. Following the

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hearing, "[t]he trial court must issue an order that states the debtor's net worth and states with
particularity the factual basis for that determination."
Supersedeas Bond. Alter Ego Theory May Be Considered In Determining Appellant's Net
Worth.
Because alter ego applies when there is such unity between corporation and individual that the
separateness ofthe corporation has ceased, an alter ego finding is relevant to the determination of
the judgment debtor's net worth. Although the trial court did not abuse its discretion by
considering the alter ego theory, that does not mean that the trial court' s alter ego finding may be
used to hold R.A. Smith & Company, Inc. or any other nonparty liable for the judgment. A
judgment may not be amended to include an alter ego that was not named in the suit. Therefore,
an alter ego finding in a post -judgment net worth proceeding may not be used to enforce the
judgment against the unnamed alter ego or any other nonjudgment debtor, but only to determine
the judgment debtor's net worth for the purposes of Rule 24.
Supsedeas Bonds. Net Worth Finding May Be Reviewed On Legal Or Factual Sufficiency
Grounds.
The court of appeals erred in not conducting a legal and factual sufficiency analysis of the trial
court's net worth determination, but the trial comi's failure to make the required findings
prevented the comi of appeals from conducting the necessary sufficiency review.

**********************
Kroger Co. v. Elwood, 197 S.W.3d 793
04-1133
5112/2006
Per Curiam
Duty. No Duty To Warn Employee Of Danger Of Using A Doorjamb For Leverage.
Elwood, a courtesy clerk at a Kroger grocery store, was injured when a customer shut her vehicle
door on his hand, while he was transferring items from a grocery cart to the vehicle. Kroger is a
nonsubscriber to workers' compensation; therefore, to recover damages, Elwood must establish
that Kroger's negligence proximately caused his injuries. The trial court entered a judgment for
Elwood on the jury's verdict. The court of appeals affirmed. Held: Reversed and rendered.
Kroger had no duty to warn Elwood of a danger known to all, and no obligation to provide
training or equipment to dissuade an employee from using a vehicle doorjamb for leverage.
Employers are not insurers of their employees. There is no evidence that additional equipment or
assistance were needed to perform Elwood's job safely. Elwood testified that, prior to working
at Kroger, he knew it was dangerous to place his hand in a vehicle's doorjamb. Moreover, there
is no evidence that carts with wheel locks or additional personnel were necessary to safely load
grocenes.
Worker's Compensation Nonsubcribers Are Not Entitled To A Contributory Negligence
Instruction.
Nonsubcribers are not entitled to a contributory negligence instruction.
Nonsubscribing Employer's Duty To Employees.
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An employer has a duty to use ordinary care in providing a safe workplace. It must, for example,
warn an employee of the hazards of employment, and provide needed safety equipment or
assistance. However, an employer is not an insurer of its employees' safety. It owes no duty to
warn of hazards that are commonly known, or already appreciated by the employee. It has no
duty to provide equipment or assistance that is unnecessary to the job's safe performance. And,
when an employee's injury results from performing the same character of work that employees
in that position have always done, an employer is not liable, if there is no evidence that the work
is unusually precarious.

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Higgins v. Randall County Sheriffs Office, 193 S.W.3d 898
05-0095
5/26/2006
Per Curiam. Justice Johnson did not participate in the decision.
Notice Of Appeal Invokes Jurisdiction Of Court Of Appeals, Even If Affidavit Of
Indigence Not Included.
Plaintiff-Higgins, a pro se inmate, sued the Sheriffs Office. The trial court dismissed his claim
for want of prosecution. Higgins filed a timely notice of appeal, but did not include either a filing
fee or an affidavit of indigence. Four months later, the court of appeals notified him that, unless
he paid the filing fee of $125 within ten days, his appeal would be dismissed. Nine days later,
Higgins filed an affidavit of indigence. The court of appeals dismissed the appeal because the
affidavit was untimely and unaccompanied by a motion to extend time. Held: Reversed and
remanded. The affidavit of indigence is no longer a jurisdictional requirement. As with any other
formal defect or irregularity in appellate procedure, the court of appeals could dismiss the appeal
for noncompliance only after allowing Higgins a reasonable time to correct this defect. Because
an affidavit of indigence discharged the filing-fee requirement, unless a contest to it was
sustained, l-Iiggins corrected the defect within the allotted time.

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Kiefer v. Touris, 197 S.W.3d 300
05-0651
5/26/2006
Per Curiam
Finality Of Judgments. Bill Of Review Judgment That Sets Aside Parentage Adjudication,
Without Making A New Parentage Adjudication, Is Not Final.
A summary judgment, in a bill of review proceeding, that sets aside a parentage adjudication, but
does not make a new parentage adjudication, is not an appealable judgment. A bill of review
that sets aside a prior judgment, but does not dispose of all the issues of the case on the merits, is
interlocutory in nature and not a final judgment appealable to the court of appeals or the supreme
court.

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Childers v. Advanced Foundation Repair, 193 S.W.3d 897
05-0831
5/26/2006
Per Curiam
Finality Of Judgment. Dismissal Of "All Other Claims," In Case Requiring Arbitration, Is
Final.
Childers contracted with Advanced Foundation Repair to level and stabilize a damaged
foundation. Childers later brought suit against AFR asserting negligence, breach of contract,
breach of implied warranty of good and workmanlike services, and Deceptive Trade Practices
Act claims. The contract contained an arbitration agreement. AFR moved to dismiss the case " in
its entirety without prejudice due to the arbitration agreement on these matters." In its Final
Judgment, the trial court granted the motion to dismiss without prejudice and stated: "All other
claims ... are hereby dismissed without prejudice, such claims to be decided in arbitration ...
The court of appeals determined the appeal to be interlocutory, and dismissed. Held: Reversed
and remanded to the court of appeals. It is unnecessary to determine whether this case is
controlled by the Federal or State Arbitration Acts. This judgment is final, disposes of all parties
and all claims in this case, is appealable, and disposes of this case in its entirety. An appeal may
be taken of an order that compels arbitration and di smisses all claims before the court).

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Cameron Appraisal District v. Rourk, 194 S.W.3d 501
04-0359
6/02/2006
Per Curiam
Ad Valorem Taxes. Exhaustion of Administrative Remedies Required Before Going To
Court Is A Jurisdictional Requirement.
The Cameron Appraisal District assessed ad valorem taxes against the owners of 34 travel
trailers for the tax years 2000 and 200 1. After some but not all filed unsuccessful administrative
protests and then timely appeals in the district court, the latter (I) dismissed for Jack of
jurisdiction the claims by those who had not exhausted administrative remedies, (2) granted
summary judgment against the remainder because their trailers were taxable as a matter of Jaw,
and (3) refused to certify a class action. The court of appeals reversed, finding error in all three
rulings. 131 S.W.3d 285 (Tex. App.-Corpus Christi 2004). Held: Reversed and remanded to the
trial couti. The Texas Tax Code provides detailed administrative procedures for those who
would contest their property taxes. Administrative decisions are final if not appealed to the
district court within 45 days. The administrative procedures are "exclusive" and most defenses
are barred if not raised therein. Thus, a taxpayer's failure to pursue an appraisal review board
proceeding deprives the comis of jurisdiction to decide most matters relating to ad valorem
taxes.
Ad Valorem Taxes. Class Action May Not Be Used To Alter Need For Exhaustion Of
Administrative Remedies.
Here, the summary judgment record establishes that some of the named taxpayers pursued
administrative remedies and filed timely appeals, but others did not. The record does not indicate
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how many unnamed class members might be in either category. The court of appeals found that
the trial court erred in not certifying a class action in this suit to contest ad valorem taxes. Held:
Reversed and remanded. By mandating class certification of all claims nonetheless, the court of
appeals allowed taxpayers to bypass the statutorily required administrative remedies. A class
action cannot be used to alter these statutory prerequisites to taxpayer recovery.
Exhaustion Of Administrative Remedies. Taxation Of Mobile Homes.
The court of appeals held the exhaustion requirements inapplicable because purely legal and
constitutional questions were involved here. Held: Reversed and remanded .. In addition to
claiming that taxing their trailers was unconstitutional, the taxpayers claim that their trailers were
nontaxable "recreational vehicles" rather than taxable "manufactured homes" due to their size,
shape, and intended use. The taxpayers here are seeking more than a declaration that taxing
trailers is unconstitutional - they are seeking to have their individual assessments set aside.
While the former claim need not be brought administratively, the latter must.

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Willis v. Donnelly, 199 S.W.3d 262
04-0409
6/2/2006
Justice Willett; Justice O'Neill, Justice Brister, and Justice Medina did not participate in the
decision.
Preservation Of Error. Brief In Court Of Appeals Preserved Error. Liberal Construction.
In this breach of contract/breach of fiduciary duty case, the jury found that the Willises,
shareholders in the corporations involved, had ratified the letter agreement, between the plaintiff
and the corporations in question. The court of appeals held that the Willises can be held liable for
breach of contract, based on this jury finding, and further held that they had waived any
argument that the evidence is insufficient to support liability on the contract, based on
ratification. Held: The ratification argument was preserved. As a general rule, a petitioner's
complaint about the trial court's judgment must be raised in the court of appeals to preserve error
in the Supreme Court. However, a pm1y should not lose its right to appeal based on an unduly
technical application of procedural rules. The Willises' opening brief (relevant portions of the
brief are set forth in the opinion) in the court of appeals preserved error on this issue.
Corporations Are Designed To Shield Those Who Operate The Corporation.
A bedrock principle of corporate Jaw is that an individual can incorporate a business and thereby
normally shield himself from personal liability for the corporation's contractual obligations.
A voidance of personal liability is not only sanctioned by the law; it is an essential reason that
entrepreneurs, like Willis, choose to incorporate their businesses.
Corporations. Liability Of Shareholder Limited By Statute.
In this breach of contract/breach of fiduciary duty case, liability was found on the basis of
ratification. Held: Reversed and rendered in part, and affirmed in part. Shareholders in closely
held corporations cannot be held liable to an individual, who agreed to a contractual business
arrangement with the corporations, breach of contract and breach of fiduciary duty theories.
Under current law, by statute, Tex. Bus. Orgs. Code § 21.223(a) (previously codified at Tex.
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Bus. Corp. Act Ann. art. 2.21(A), a shareholder "may not be held liable to the corporation or its
obligees with respect to ... any contractual obligation of the corporation ... on the basis that the
holder ... is or was the alter ego of the corporation or on the basis of actual or constructive
fraud, a sham to perpetrate a fraud, or other similar theory ...."The liability of a shareholder for
a contractual corporate debt under this statute "is exclusive and preempts any other liability
imposed for that obligation under common law or otherwise." There is a statutory exception to
this rule where the shareholder "caused the corporation to be used for the purpose of perpetrating
and did perpetrate an actual fraud on the obligee, primarily for the direct personal benefit of the"
shareholder. The jury rejected Plaintiff-Donnelly's fraud claim. There is also a statutory
exception where the shareholder "expressly ... agrees to be personally liable to the obligee for
the obligation", but there is no evidence that the Willises expressly agreed to assume personal
liability under the letter agreement.
Contracts. Ratification May Not Be Used To Impose Liability On Shareholder For
Contractual Obligations Of The Corporation.
Willis is not a party to the letter agreement, and he incorporated two companies that by law
would shield him from personal liability. While his name is included in the opening sentence of
the agreement, the agreement obligated URH and WHE only to issue shares to Donnelly.
Moreover, at the meeting where the agreement was signed, Willis crossed his signature line off
the agreement and refused to sign it. To impose liability against the Willises, shareholders in the
closely-held corporations, under a common law theory of implied ratification, because they
accepted the benefits of the letter agreement, would contravene the statutory imperative that,
absent actual fraud or an express agreement to assume personal liability, a shareholder may not
be held liable for contractual obligations of the corporation. Characterizing the theory as
"ratification" rather than "alter ego" is simply asserting a "similar theory" of derivative liability
that is covered by the statute.
Ratification Cannot Contravene Statutory Limits On Shareholder Liability. Generally,
ratification is a doctrine of agency law, and allows a principal to be bound by an agent's
unauthorized contract in circumstances where the principal becomes aware of the contract and
retains benefits under it. Ratification, however, presupposes that the principal has an agent who,
by agreement, is authorized to act on the principal's behalf. In the pending case, the corporations
were not agents of Willis authorized to act on Willis's behalf and bind him to contracts. Quite the
opposite, the corporate entities were separate corporations created to prevent the imposition of
contractual liabilities on Willis personally. The law allows an individual in these circumstances
to incorporate a business and thereby protect himself from personal liability.
Corporations. Contracting Party Must Look To Subsequently Formed Corporation For
Performance.
Plaintiff-Donnelly argues that the corporate separateness of URH should be disregarded because
the letter agreement indicates that URH did not exist at the time that the agreement in question
was signed, and instead refers to "Urban Retreat of Houston, Inc., a corporation to be fanned and
originally owned by principals of Willis/Hite Enterprises, Inc." The corporate records of URH
reveal, however, that it existed before the letter agreement was signed. It is true that WHE is also
a party to the letter agreement and was not incorporated until August 1989, shortly after the letter
agreement was signed. Held: In these circumstances, the better rule is that a contracting party
must look to the unformed corporation for performance. The contract was made in the name of
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two corporations, stated that one of the corporations has not been formed, and that the individual
"promoter," assuming Willis can be characterized as such, struck his name from the agreement,
thus indicating that he would not be held personally liable under it.

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Gonzalez v. McAllen Medical Center, Inc., 195 S.W.3d 680
03-0939
6/9/2006
Per Curiam
Court Of Appeal Opinions Must State Basic Reasons For Affirming In Memorandum
Opinions.
A jury rejected the medical negligence claims, brought by the family of Enrique Gonzalez
against McAllen Medical Center and Dr. Jose Igoa. The plaintiffs appealed, challenging the
factual sufficiency of several jury findings. The Thirteenth Court of Appeals rejected these points
in a memorandum opinion, concluding in a single sentence that the evidence was factually
sufficient, without stating any reason why. _
S.W.3d _ , (Tex. App.-Corpus Christi 2003)
(mem. op.). Held: Reversed and remanded to the court of appeals. When the issues in a case
are settled, the Texas Rules of Appellate Procedure require courts of appeals to "write a brief
memorandum opinion no longer than necessary to advise the pmiies of the comi's decision and
the basic reasons for it." The opinion here does not comply with this rule, because, while it
advises the plaintiffs of the court's decision, it fails to articulate any reason for it. A court of
appeals must detail the evidence, and clearly state why the jury' s finding is factually
insufficient" when reversing a jury verdict, but need not do so, when affirming a jury verdict.
Thus, neither the appellate rules, nor the Supreme Court, require detailed recitations of the
evidence when a factual sufficiency complaint is overruled. But, merely stating that it is
overruled does not count as providing the "basic reasons" for that decision.
Courts of Appeal. Contents Of Memorandum Opinions.
Rule 4 7 does not attempt to prescribe the appropriate contents of every memorandum opinion,
but a comi's discretion, in deciding what to include, should be guided by the rule's purpose. A
memorandum opinion is intended primarily for the pmiies, who already know the background
facts and procedural history. They should also be well aware of the standard of review and
applicable law, as memorandum opinions are appropriate, only when these are well-settled.
Accordingly, a memorandum opinion generally should focus on the basic reasons why the law
applied to the facts leads to the comi' s decision.

**********************
City of Marshall v. City of Uncertain, 206 S.W.3d 97
03-1111
6/9/2006
Justice O'Neill
Water. Need For Hearing On Change Of Purpose Of Certificate Of Adjudication.

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In 1986, the City of Marshall received a certificate of adjudication recognizing a right to divert
and use up to 16,000 acre-feet of water from Cypress Creek for municipal use, meaning that the
water it supplied had to be potable. In 2001, the City applied to the Texas Commission on
Environmental Quality to change the purpose of use in its certificate so that it could supply
untreated water for industrial use. The City's application did not request a change in the amount
of water or rate of diversion. The City of Uncetiain, and others, opposed the application, alleging
the amendment would have serious adverse environmental and socio-economic consequences,
and sought a contested-case hearing. The Commission concluded that section 11.122(b) of the
Texas Water Code mandated approval of the amendment without a contested-case hearing. Held:
Remanded to the Commission for further proceedings. Section 11.122(b) does not preclude a
contested-case hearing, when a proposed water-rights amendment requests a change in use, but
does not seek to increase the amount of water appropriated or the rate of diversion. While section
11.122(b) significantly restricts the issues that may be reviewed in a contested-case proceeding,
it does not altogether preclude one. Depending upon the particular amendment application, a
hearing may be necessary to allow the Commission to assess certain limited criteria other than
the application's effect on other water-rights holders and the on-stream environment that the
Legislature considered necessary to protect the public interest, including assessment of water
conservation plans, consistency with the state and any approved regional water plans, and
groundwater effects. The Commission should make this determination in light of our
construction of section 11.122(b).
Water. Surface Water Is Owned By The State.
Surface water in Texas is generally owned by the State of Texas and held in trust for the public,
and the preservation and conservation of water resources are "public rights and duties."

**********************
Wilhelm v. Flores, 195 S.W.3d 96
04-0208
6/9/2006
Per Curiam
Seller Of Bees Does Not Owe A Duty To A Commercial Buyer's Employees Or Agents To
Warn Of, Or To Protect Them From, Danger Of Bee Stings.
This is a wrongful death case. Flores died of bee stings, whil e assisting Black in moving bees,
sold by Wilhelm to Black. Held: A seller of hived bees does not owe a commercial buyer's
employees, or agents, any duty to warn them of the dangers associated with bee stings or to
protect them from being stung. Had Wilhelm hired Black as an independent contractor to move
the beehives, Wilhelm would have owed Flores no duty of care, because Wilhelm did not control
Flores; Black did. Nor would Wilhelm, as occupier of the premises where the beehives were
kept, have owed an independent contractor's employees a duty to warn them about being stung,
since that danger was obvious. It would have been Black's responsibility, not Wilhelm 's, to warn
Flores of the danger of an allergic reaction, if Flores was not already aware of it. But Black was
merely a buyer of the bees; he was not Wilhelm's independent contractor, and Wilhelm owed
Black' s employees no greater duty than if he had been.

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In re Palm Harbor Homes, Inc., 195 S.W.3d 672
04-0490
6/9/2006
Justice Johnson. Justice O'Neill filed a concurrence.
Arbitration. Opt Out Provision For Manufacturer Did Render Agreement Unenforceable.
This original mandamus proceeding presents the issue of whether the purchasers of a
manufactured home must arbitrate their claims against both the retailer and manufacturer of the
home pursuant to a written arbitration agreement between the purchasers and the retailer. The
agreement specified that it inured to the benefit of the manufacturer and gave the manufacturer a
twenty-day period during which it could opt out of arbitration. Held: The manufacturer's optout right did not render the arbitration agreement unenforceable. The purchasers must arbitrate
their claims against both parties.
Arbitration Agreement Binding Whether Read Or Not.
Absent fraud, misrepresentation, or deceit, parties to an arbitration agreement are bound by the
terms of the contract signed, regardless of whether they read it).
Arbitration Agreements. Consideration May Be Provided By Remainder Of The Contract.
In detem1ining the validity of agreements to arbitrate, which are subject to the Federal
Arbitration Act, Texas courts, generally, apply state-law principles governing the formation of
contracts. Arbitration agreements, like other contracts, must be suppmted by consideration. Such
consideration may take the form of bilateral promises to arbitrate. Further, when an arbitration
clause is part of a larger, underlying contract, the remainder of the contract may suffice as
consideration for the arbitration clause. Here, as to the retailer, the arbitration agreement was
part of a larger contractual relationship between the Ripples and the retailer. The underlying
contract between the Ripples and the retailer constituted valid consideration for the arbitration
agreement as between them, as did their mutual promises to arbitrate disputes involving the
manufactured home or its sale.
Arbitration Clause Benefiting Third Party Beneficiary Did Not Require Consideration
A third-party beneficiary may enforce a contract to which it is not a party if the parties to the
contract intended to secure a benefit to that third patty and entered into the contract directly for
the third party's benefit. Here, the arbitration agreement provided that it "inure[ d] to the benefit
of the manufacturer of the Home." By its own terms, the agreement was entered into, in part,
directly for the manufacturer's benefit. Because the manufacturer is a third-patty beneficiary of
the underlying contract and not a first party to it, the manufacturer was not a promisor and
therefore was not required to give consideration for the agreement which created its third-party
beneficiary status. For purposes of determining whether the arbitration agreement was supported
by consideration under such circumstat1ces, it is not relevant that the agreement did not bind the
manufacturer to arbitrate, for the agreement was supported by consideration in the form of both
the underlying contract and promises of the retailer. It follows that the Ripples' obligation to
arbitrate with the manufacturer did not fail for lack of consideration.
Arbitration Agreement With Third-Party Beneficiary, Which Has Right To Opt Out, Is
Not Illusory.
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An arbitration agreement may be illusory if a party can unilaterally avoid the agreement to
arbitrate. However, in this matter the manufacturer was a third-party beneficiary, not a direct
party promisor. Thus, the agreement was not illusory as to the manufacturer.
Arbitration Agreement Is Not Substantively Unconscionable Because It Binds Buyer, But
Not The Third Party Beneficiary. Test.
The arbitration agreement in question is not substantively unconscionable, because it binds the
buyers o arbitrate with the manufacturer, but does not bind the manufacturer to arbitrate with
them. The test for substantive unconscionability is whether, given the parties' general
commercial background and the commercial needs of the particular trade or case, the clause
involved is so one-sided that it is unconscionable under the circumstances existing when the
parties made the contract. The Ripples agreement to purchase the home and their use of the
home underlie all their claims. Under certain circumstances a party to an arbitration agreement
may be compelled to arbitrate claims with a nonparty if the controversy arises from a contract
containing an arbitration clause. Also, the manufacturer had a limited period in which to refuse
arbitration. Such a circumstance does not create a different relationship than provisions usually
found in third-party beneficiary situations, because third-party beneficiaries generally have the
right to disclaim benefits proffered by a contract. There is nothing inherently unconscionable
about arbitration agreements, and there is nothing unconscionable about contracting to benefit a
third party. The Ripples have not met their burden to prove the agreement was so one-sided as to
be unconscionable when its provisions effectively incorporate established principles of contract
law. Considered in light of the remaining provisions of the agreement, the manufacturer's limited
right as a third-party beneficiary to refuse to arbitrate does not render the arbitration agreement
so one-sided as to be substantively unconscionable.
Arbitration Clause Not Unconscionable Because Purchase Could Not Be Completed
Without The Clause. Adhesion Contracts Are Not Per Se Unconscionable Or Void.
The agreement is not substantively unconscionable, because the Ripples would not have been
able to buy the manufactured home, unless they signed the arbitration agreement. Furthermore,
assuming arguendo that the agreement constituted a contract of adhesion, adhesion contracts are
not per se unconscionable or void. Thus, the agreement in question is not procedurally
unconscionable. The principles of unconscionability do not negate a bargain because one pa1ty to
the agreement may have been in a less advantageous bargaining position. Unconscionablity
principles are applied to prevent unfair surprise or oppression. The agreement before us is clearly
labeled as an agreement providin g that disputes will be settled by arbitration. It is relatively short
and specifically provides that it does not constitute a waiver of any substantive rights or remedies
except as to the forum for resolving disputes, and it highlights the statem ent that a jury trial is
being waived. Here, there is neither unfair surprise nor oppression in the agreement as a whole
nor in the substance of the manufacturer' s opt-out provision.

**********************
Larson v. Downing, 197 S.W.3d 303
05-0155
6/9/2006
Per Curiam
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Qualification Of Expert Witness On Plastic Surgery, Who Had Not Performed Surgery For
Fifteen Years, Was Matter For The Trial Court.
The trial court, in this medical malpractice case, excluded the plaintiffs expert, Bell, because it
had been fifteen years since he had performed surgery like that performed by the defendant. A
divided court of appeals reversed. 153 S.W.3d 248 (Tex. App.-Beaumont 2004). Held: The
judgment of the court of appeals is reversed, and the judgment of the trial court is affirmed.
Whether to exclude Bell's testimony is a close call on this record. Close calls must go to the trial
court. The qualification of a witness, as an expert, is within the trial court's discretion. The trial
court's discretion is disturbed only for a clear abuse. The test for abuse of discretion is whether
the trial court acted without reference to any guiding rules or principles. The trial court, in this
case, did not act without reference to guiding rules. It was required by statute to consider whether
Bell was "actively practicing medicine in rendering medical care services relevant to the claim."
The trial court was well within its discretion in determining that Bell was too far removed from
surgical practice, and even from teaching.

**********************
Jernigan v. Langley, 195S.W.3d 91
05-0299
6/9/2006
Per Curiam
Medical Malpractice. Thirty-Day Extension Properly Denied When Expert Report Fails
To Discuss Standard Of Care, Breach, And Causation.
In this medical malpractice case the plaintiffs expert repmis failed to meet the specificity
requirements of section 13.01 of the Medical Liability and Insurance Improvement Act (the
"MLIIA"). Because Langley ' s expert reports omit at least one of the three specifically
enumerated requirements of section 13.0l(r)(6), they cannot constitute a good faith effort to meet
the statutory requirements. A trial court's decision to dismiss under section 13.01 (e) is reviewed
for abuse of discretion. Denial of a section 13.01 (g) grace period is also reviewed for abuse of
discretion. In order to constitute a good-faith effort under section 13 .01 (1), an expert repmi must
discuss the standard of care, breach, and causation with sufficient specificity to inform the
defendant of the conduct the plaintiff has called into question and to provide a basis for the trial
court to conclude that the claims have merit.

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In re The Lynd Company, Relator, 195 S.W.3d 682
05-0432
6/9/2006
Chief Justice Jefferson. Justice Green did not participate in the decision.
Rule 306a. Signed Order Not Required To Find Date Defaulting Party Actually Learned
Of Default.
This is an original mandamus proceeding. Held: An appellate court may imply the date on
which a complaining party received late notice of judgment from an order granting a motion to
extend post-judgment deadlines pursuant to Tex. R. Civ. P. 306a, which allows for extensions of
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post-judgment deadlines when a party first receives notice of a judgment more than twenty, but
less than ninety-one days after the judgment is signed. However, ambiguities could be avoided
by express findings by the trial court.
Plenary Power. Post-Judgment Timetables.
Post-judgment procedural timetables-including the period of the trial court's plenary powerrun from the day a party receives notice of judgment, rather than the day judgment is signed, if
the party: (1) complies with the sworn motion, notice and hearing requirements mandated by
Tex. R. Civ. P. 306a (5), and (2) proves it received notice of the judgment more than twenty (but
less than ninety-one) days after it was signed. Specifically, Rule 306a(5) requires that the party
alleging late notice of judgment file a sworn motion with the trial court establishing the date the
pruiy or its counsel first learned of the judgment. The motion must be filed before the trial
court's plenary power-measured from the date of notice established under Rule 306a(4)expires. The sworn motion establishes a prima facie case that the party lacked timely notice and
invokes a trial comi's otherwise-expired jurisdiction for the limited purpose of holding an
evidentiary hearing to determine the date on which the party or its counsel first received notice or
acquired knowledge of the judgment.
Extension Of Time. None When Defaulting Party Learns Of Judgment More Than 90
Days After The Judgment Is Signed.
Rule 306a( 4) does not apply and cannot serve to extend a trial court's plenary power when a
party learns of final judgment more than ninety days after it is signed. In such cases a bill of
review is the proper method of seeking relief.

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Citizens National Bank in Waxahachie v. Scott, 195 S.W.3d 94
05-0454
6/9/2006
Per Curiam
Court Of Appeals Opinion Must State A Reason, And, If Reversing, Must Explain Why It
Substitutes Its Judgment For That Of Trial Court.
This is a suit on a note. The trial cow1 entered judgment for the plaintiffs. The court of appeals
reversed and rendered judgment for the defendants, reciting the facts, and then stating only that
"the evidence conclusively establishes, as a matter of Jaw, all \'ital facts to supp011 a finding of
payment. "
Held: Reversed and remanded to the court of appeals for more detailed
consideration. While memorandum opinions are intended to be brief in scope, a memorandum
opinion issued by a court of appeals, advising the pa1ties of the court's decision but failing to
articulate any reason for that decision, does not comply with Texas Rule of Appellate Procedure
4 7.4. Additionally, when a court of appeals disturbs the judgment of a lower tribunal, merely
saying that the court has reviewed all the evidence and reached a conclusion contrary to that of
the trier of fact, is not enough. Instead, the cow1 should explain, with specificity, why it has
substituted its judgment for that of the trial court.

**********************
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University of Texas Medical Branch at Galveston v. Estate of Blackmon, 195 S.W.3d 98
05-0594
6/9/2006
Per Curiam
Nonsuit Effective While Interlocutory Appeal Is Pending. Case Becomes Moot.
While the petitioner's interlocutory appeal, from its plea to the jurisdiction, was pending in the
court of appeals, the respondent filed a nonsuit. The court of appeals denied Shultz's motion, and
eventually issued a new opinion, denying UTMB's plea to the jurisdiction.169 S.W.3d 712.
Held: The order of the court of appeals is vacated, and the interlocutory appeal is dismissed for
want of jurisdiction. A plaintiffs nonsuit, pending the disposition of an interlocutory appeal,
moots the case, and terminates the appellate court's jurisdiction over the case. The nonsuit
extinguishes a case or controversy from the moment that it is filed or when an oral motion is
made in open court.
Effective Date Of Nonsuit. Power To Defer Signing Of Order Of Dismissal. Case Still
Moot.
While the date on which the trial court signs an order dismissing the suit is the starting point for
determining when a trial court's plenary power expires, a nonsuit is effective when it is filed.
The nonsuit does not prejudice pending claims for affirmative relief or excuse the payment of
costs taxed by the clerk, and a dismissal "shall have no effect on any motion for sanctions,
attorney's fees or other costs, pending at the time of dismissal." Altbough Rule 162 permits the
trial court to hold hearings and enter orders affecting costs, attorney's fees, and sanctions, within
a reasonable time, even after notice of nonsuit is filed, while the court retains plenary power, it
does not forestall the nonsuit's effect of rendering the merits of the case moot.

**********************
Brittingham-Sada de Ayala v. Kevin Michael Mackie,
04-0160
6/9/2006
Chief Justice Jefferson; Justice O'Neill and Justice Green did not participate in the decision. [On
Motion for Rehearing, The Court strikes the paragraph preceding the conclusion in the
original opinion and adds footnote 5.]
Interlocutory Appeals, By Agreement Of The Parties And The Court, Is Permitted In Suits
Filed On Or After 9/1/2001.
Pursuant to Tex. Civ. Prac. & Rem. Code§ 51.014(d), if the pmiies and the trial court agree, the
parties may seek a permissive interlocutory appeal. The trial cou1i may order an interlocutory
appeal, if (1) the parties agree that the order involves a controlling question of law as to which
there is a substantial ground for difference of opinion; (2) an immediate appeal from the order
may materially advance the ultimate termination of the litigation; and (3) the parties agree to the
order. That avenue is unavailable to the parties in this case, however, as this suit was filed on
August 3, 2000, and the statute applies only to suits filed on, or after, the statute's September 1,
2001 effective date.

**********************
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Guest v. Dixon, 195 S.W.3d 687
04-0128
6/16/2006
Per Curiam. Justice Johnson did not participate in the decision.
Motion To Reinstate May Be Verified By A Former Attorney.
A motion to reinstate a case, dismissed for want of prosecution under Tex. R. Civ. P. 165a, may
be verified by the defendant's former attorney, who had ceased representation nearly two years
before the motion was filed. The attorney's lack of knowledge may go to the merits of the
reinstatement motion, but it does not deprive the court of jurisdiction.

**********************
Seagull Energy E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342
04-0662
6/16/2006
Justice Medina delivered the opinion of the Court. Justices O'Neill and Brister did not
pmiicipate in the decision.
Oil And Gas. Sale Of Working Interest, In Itself, Docs Not Release Seller From
Obligations To Operator.
The sale of an oil and gas working interest, which was subject to an operating agreement, did not
release the seller from any further obligations to the operator. The seller remains liable under the
operating agreement, unless released by the operator, or the terms of the agreement. Because
neither the operating agreement nor the operator expressly released the seller from its obligations
under that agreement, the judgment of the court of appeals is reversed and judgment is rendered
for the operator.
Contract Is Not Ambiguous Merely Because Parties Disagree On Its Interpretation.
A contract is not ambiguous merely because the parties disagree on its meaning. An ambiguity
exists only if the contract language is susceptible to two or more reasonable interpretations.

**********************
City of Grapevine, Texas v. Sipes, 195 S.W.3d 689
04-0933
6116/2006
Chief Justice Jefferson
Tort Claim Act. City's Delay In Installing Traffic Light Does Not Create Liability.
"Absence" Requires Prior Presence.
The D-City had decided to install a traffic light at the intersection, where the plaintiffs were
injured, but had not yet done so. The trial court held that Tex. Civ. Prac. & Rem. Code §
101.060(a)(2) immunized the City of Grapevine from liability based on its aJJeged negligence in
failing to install a traffic signal within a reasonable time after initially deciding to do so. The trial
court granted the City's motion, and severed the claims. Sipes appealed. The court of appeals
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reversed and remanded the trial court's judgment in favor of the City on the traffic signal issue
Held: Reversed and rendered for lack of jurisdiction. Under Tex. Civ. Prac. & Rem. Code §
101.060(a)(2), a governmental unit retains immunity for claims based on the absence of a traffic
signal, unless the absence is not corrected by the governmental unit within a reasonable time
after notice.. "Absence," as used in subsection (a)(2), requires a prior presence, and does not
include the failure to install a traffic signal within a reasonable time after the decision is made to
do so.

**********************
Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797
04-1039
6/16/2006
Justice Willett
Products Liability. Testimony Of Three Experts Concerning Cause Of Tire Failure Was
Legally Insufficient To Uphold The Finding Of A Product Defect.
In 1997 Mendez was driving a minivan carrying six passengers. The left rear tire, a steel-belted
radial tire manufactured by Cooper Tire, lost its tread. Mendez lost control of the vehicle, and it
rolled several times. All in the van were injured or killed. When the tire was examined a nail hole
was found in the tread. The nail had penetrated completely through the tire. Plaintiffs sued
Cooper Tire, and proceeded to trial on the theory that the tire tread separated due to a
manufacturing defect, and the tread separation in turn caused the rollover and the resulting
deaths and injuries. The jury found a manufacturing defect, and awarded over $11 million in
damages. The trial court entered judgment on this verdict. The court of appeals affirmed. 155
S.W.3d 382. Held: Reversed and rendered. The evidence of a manufacturing defect, given by
plainitffs' three expert witnesses, Grogan, Milner, and Crate, was legally insufficient to support
the judgment. Grogan worked for years for the Dunlop Tire Company in its technical
department, tire examination lab, and technical service section, where he examined tires
including tires that had failed. He had also written and revised a book on An Investigator's
Guide to Tire Failures. Grogan opined that the tire separated because the skim stock, used to
manufacture the tire, was contaminated with hydrocarbon wax. He testified that the tread
separation did not originate at the nail hole, because he detected "polishing" in other portions of
the tire's layers, indicating that the separation stm1ed elsewhere. This novel theory of a
manufacturing defect did not meet the reliability standard for the admission of expert testimony.
Failure to meet this standard means that his testimony was legally no evidence of a
manufacturing defect or a defect that caused the tire failure. The testimony of Milner, a
professional engineer with degrees in metallurgy and engineering, who was a failure analysis
expert, devoted most of his testimony to explaining why he did not believe the nail hole or
under-inflation had caused the tire failure. This testimony is legally insufficient to establish, by a
process of elimination, the existence of a manufacturing defect that caused the failure. Crate,
who works for the Georgia Tech Research Institute, which conducts testing for industrial and
litigation clients, m1d who also works privately for a company called Failure Analysts, Inc, holds
an undergraduate degree in chemistry and a master' s degree in polymer science and engineering.
He testified that based on his review of several published m1icles, the wax in the skim stock
identified in the RAPRA report was the result of contmnination, rather than migration before or
after the accident from other parts of the tire where wax was intentionally applied. However,
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Crate was not qualified to testify as to the existence of wax contamination and its effect on tire
ply adhesion. Without this expert testimony there was no expert testimony establishing the
existence of a manufacturing defect when the tire left Cooper Tire's manufacturing plant, or
proof by expert testimony that such a defect caused the tire to fail. Without reliable expert
testimony establishing these essential elements of a manufacturing defect claim, plaintiffs' proof
was legally insufficient to establish liability.
Products Liability. Three Types Of Defects.
In products liability cases, there are three types of defect: marketing, design, and manufacturing.
A manufacturing defect exists when a product deviates, in its construction or quality, from the
specifications or planned output in a manner that renders it unreasonably dangerous. A plaintiff
must prove that the product was defective when it left the hands of the manufacturer and that the
defect was a producing cause of the plaintiffs injuries.
Evidence; Scientific, Technical Or Specialized Knowledge. Requirements.
lf scientific, technical, or other specialized knowledge will assist the trier of fact to understand
the evidence, or to determine a fact in issue, a witness qualified as an expert by knowledge, skill,
experience, training, or education, may testify thereto in the form of an opinion or otherwise.
Expert testimony is admissible if, (1) the expe11 is qualified, and (2) the testimony is relevant,
and based on a reliable foundation. If the expert's scientific evidence is not reliable, it is not
evidence. Admission of expert testimony that does not meet the reliability requirement is an
abuse of discretion. In deciding whether an expert is qualified, the trial court must ensure that
those who purport to be experts truly have expertise concerning the actual subject about which
they are offering an opinion. Scientific testimony is unreliable, if it is not grounded in the
methods and procedures of science, and amounts to no more than a subjective belief or
unsupported speculation. Expert testimony is unreliable, if there is simply too great an analytical
gap between the data and the opinion proffered. A flaw in the expert's reasoning from the data
may render reliance on a study unreasonable and render the inferences drawn therefrom dubious.
Under that circumstance, the expert's scientific testimony is unreliable and, legally, no evidence.
The trial court is not required to admit opinion evidence which is connected to existing data only
by the ipse dixit of the expert. If the expert brings only his credentials and a subjective opinion,
his testimony is fundamentally unsupported and therefore of no assistance to the jury. Tex. R.
Evid. 702, by its terms, only provides for the admission of expert testimony that actually assists
the finder of fact.
Evidence. Robinson Factors Used To Show That Expert Testimony Was Not Sufficiently
Relevant Or Reliable.
The six factors recognized in E.! duPont de Ne mours & Co. v. Robinson, 923 S.W.2d 549, 556
(Tex. 1995), that trial courts may consider in detern1ining whether expert testimony is reliable,
cannot always be used in assessing an expert's reliability, but there must be some basis for the
opinion offered to show its reliability. The Robinson relevance and reliability requirements
apply to all expe11 testimony. Applying the Robinson factors here, none of the expert testimony,
offered by the plaintiffs, was sufficiently reliable to constitute any evidence of a product defect.
Products Liability. Product Failure, Standing Alone, Is Not Proof Of A Product Defect.
Texas law does not generally recognize a product failure standing alone as proof of a product
defect.
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Product Defect In Tire Could Not Be Established By Process Of Eliminating Other Causes.
Plaintiffs' expert testimony, attempting to eliminate other causes of the tire fai lure, was not
legally sufficient to establish a manufacturing defect. The universe of possible causes for the tire
failure is simply too large, and too uncertain, to allow an expert to prove a manufacturing defect
merely by the process of elimination. Even if plaintiffs had eliminated every conceivable reason
for the tire failure other than a product defect existing when the tire left Cooper Tire's plant, they
did not eliminate the possibility of a design defect.

***************** *****
In re Dallas Peterbilt, Ltd., L.L.P., 196 S.W.3d 161
05-0706
6/16/2006
Per Curiam
Arbitration. Receipt Of Summary Of Underlying Arbitration Policy Was Enough To Bind
Employee To Arbitrate.
This is an original mandamus proceeding. On 1/111999, American TruckSource, Inc., Peterbilt' s
holding company, instituted a dispute resolution program. Part of this program required
employees to resolve certain work-related disputes, via binding arbitration. When Harris
commenced his at-will employment with Peterbilt in 12/1999, he received a copy of a "Summary
Plan Description of Mutual Agreement to Arbitrate Claims", which outlined the Mutual
Agreement to Arbitrate Claims. The trial court refused to compel arbitration. The court of
appeals denied writ- of mandamus. Held: Writ of mandamus will issue. An employer may
enforce an arbitration agreement, entered into during an at-will employment relationship, if the
employee received notice of the employer's arbitration policy and accepted it. A swnmary notice
of the employer's arbitration policy was sufficient notice. It was not necessary that Harris
receive the underlying agreement to arbitrate itself. When determining whether an employee
received notice of a binding arbitration agreement, our cases do not confine that " notice
analysis" to the underlying agreement, but to all commw1ications between the employer and
employee.
Arbitration. An At-Will Employee Who Continues To Work After Notice Of An
Agreement To Arbitrate Binds E mployee.
An at-will employee, who receives notice of an employer's arbitration policy, and continues
working with knowledge of the policy, accepts the terms as a matter oflaw.

**********************
Ross v. National Center for the Employment of the Disabled, 197 S.W.3d 795
05-1082
6/16/2006
Per Curiam
Bill Of Review. Diligence Not Required Where Party Has Never Been Served.

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A trial court entered a $10 million default judgment against a party who was never served. The
trial court denied a bill of review to set aside that default. The court of appeals affirmed, pointing
to evidence that the unserved party failed to file a motion for a new trial in the original default,
and resisted postjudgment enforcement of it. 176 S.W.3d 642, 646-49. Held: Reversed and
remanded. The trial court had no jurisdiction either to enter judgment, or to enforce it, against a
party who had neither been properly served nor appeared. Traditionally, a bill of review requires
proof of three elements: (1) a meritorious defense, (2) that was not asserted due to fraud,
accident, or wrongful act of an opponent or official mistake, (3) unmixed with any fault or
negligence by the movant. A defendant, who is not served with process, is entitled to a bill of
review without a further showing, because the Constitution discharges the first element, and Jack
of service establishes the second and third.
Default Judgment. Postcard Notice Of Default Does Not Require Appearance, Where
There Has Been No Service Of Citation.
Ross learned of the 2/29/2000 default judgment by regular mail, on 4/12/2000. He did not file an
out-of-time motion for new trial in that case. Held: A postjudgment postcard, giving notice of
default, does not trigger a duty to enter an appearance. A party who becomes aware of the
proceedings, without proper service of process has no duty to participate in them. While
diligence is required from properly served parties, or those who have appeared, those not
properly served have no duty to act, diligently or otherwise. Ross filed his bill of review well
within the applicable four-year limitations period, and proved that he had never been properly
served.
Sanction For Not Appearing At Trial Does Not Include Dismissing A Party's Case As An
Initial Step.
Following entry of a default judgment, the trial cou11 dismissed D-Ross's bill of review by
summary judgment. The court of appeals affirmed on the basis that Ross did not have clean
hands. The court first cited Ross's failure to appear at the trial of his bill of review after receiving
a subpoena. 176 S.W.3d at 649. Held: Reversed and remanded. There is nothing in the record
indicating the district court considered or tried lesser sanctions before denying his bill of review.
While the range of sanctions available for nonappearance is quite broad, it generally does not
include dismissing a party's case as an initial step. "Death penalty" sanctions are inappropriate
unless a party's conduct justifies a presumption that its claims or defenses lack merit.
Trial Participation Not Required Absent Service Of Process.
A party has no duty to participate in proceedings absent proper service of process.

**********************
State of Texas v. Shumake, 199 S.W.3d 279
04-0460
6/23/2006
Justice Medina. Justice Wainwright filed a concurrence. Justice Brister filed a dissent. Justice
Willet did not participate.
Recreational Use Statute Allows Action Against State For Gross Negligence.
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The Plaintiffs'-Shumakes' daughter, Kayla, drowned while swimming in the Blanco River, at the
Blanco State Park. Kayla was allegedly sucked underwater by a powerful undertow and trapped
in a man-made culvert that diverted the water under a nearby park road. Days before Kayla's
death three other park patrons had encountered the same undertow, and nearly drowned due to
the same conditions. These events were communicated to the Parks Department. The Shumakes
sued for the wrongful death of Kayla. The trial court denied Parks Department's plea to the
jurisdiction, and the Parks Department took an interlocutory appeal. The court of appeals
affirmed the trial court's denial of the plea to the jurisdiction. Held: Affirmed. The Shumakes'
pleadings were sufficient to state a premises liability claim under the recreational use statute,
Tex. Civ. Prac. & Rem. Code§§ 75.001-.004. The recreational use statute does not, as argued by
the State, effectively reinstates immunity for premises liability claims arising on state-owned
recreational properties. While the recreational use statute raises the burden of proof by
classifying the recreational user of state-owned property as a trespasser, and by requiring proof
of gross negligence, malicious intent, or bad faith, it does not reinstate sovereign immunity.
Rather, it immunizes the state only to the extent of the elevated standard.
Recreational Use Statute Does Not Require Warnings About Natural Conditions Or
Obvious Defects Or Conditions.
Under the recreational use statute, a landowner has no duty to warn or protect trespassers from
obvious defects or conditions. Thus, the owner may assume that the recreational user needs no
warning to appreciate the dangers of natural conditions, such as a sheer cliff, a rushing river, or
even a concealed rattlesnake. But a landowner can be liable for gross negligence in creating a
condition that a recreational user would not reasonably expect to encounter on th e property in the
course of the permitted use. The recreational use statute limits the state's liability for premises
defects, but its effect is not to reinstate the state's immunity from suit.

**********************
Reata Construction Corp. v. City of Dallas, 197 S.W.3d 371
02-103 1
6/3 0/2006
Justice Johnson. Justice Brister concurs, joined by Justice Hecht and O'Neill. Justice Willett
did not participate in the deci sion. [On Motion for rehearing. The opinion of 4/2/2006 is
withdrawn. ]
Intervention By City, In Suit To Assert A Claim For Affirmative Relief, Waives
Governmental Immunity As To Certain Claims.
Where the governmental entity (here, the City of Dallas) has joined into the litigation process, by
asserting its own affirmative claims for monetary relief, adverse parties may assert, as an offset,
claims germane to, connected with, and properly defensive to, those asserted by the
governmental entity. This modifies the common-law immunity doctrine and, to an extent,
abrogated immunity of the entity that filed suit.
Sovereign Immunity Protects States And Political Subdivisions.
Sovereign immunity protects the State from lawsuits for money damages. Political subdivisions
of the state, including cities, are entitled to such immunity-referred to as governmental
immunity- unless it has been waived. Sovereign immunity encompasses immunity from suit,
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which bars a suit unless the state has consented, and immunity from liability, which protects the
state from judgments even if it has consented to the suit. Sovereign immunity from suit deprives
a trial court of subject-matter jurisdiction.

Sovereign Immunity Waiver By State Action. Problems Of Jurisdiction.
Define Boundaries.

Judiciary To

Sovereign immunity is a common-law doctrine that initially developed without any legislative or
constitutional enactment. The courts have consistently deferred to the Legislature to waive such
immunity. The possibility that a governmental entity might waive its immunity by certain
actions, even absent a legislative waiver of immunity, has been reco gnized. Recognizing that
sovereign immunity is a common-law doctrine, the courts have not foreclosed the possibility that
the judiciary may modify or abrogate such immunity by modifying the common law. Therefore,
it remains the judiciary's responsibility to define the boundaries of the common-law doctrine and
to detern1ine under what circumstances sovereign immunity exists in the first instance.

Governmental Immunity May Be Waived By Asserting An Affirmative Claim.
If the governmental entity interjects itself into, or chooses to engage in, litigation to assert
affirmative claims for monetary damages, the entity will presumably have made a decision to
expend resources to pay litigation costs.

Tort Claims Act Waives Immunity For Injury Or Death, If The Governmental Entity Is
The User Of Property.
Through the Tort Claims Act, the Legislature has waived the City's immunity for "personal
injury and death so caused by a condition or use of tangible personal or real property if the
governmental unit would , were it a private person, be liable to the claimant according to Texas
law. However, Tex. Civ. Prac. & Rem. Code § 101.021 (2) only waives immunity when the
governmental unit is the user of the property.

Wavier Of Immunity Is Governed By Tort Claims Act And Not Local Government Code.
Reata also claims the City's immunity from suit is waived by Tex. Loc. Gov't Code § 5 1.075,
which provides that a home-ru le municipality "may plead and be impleaded in any court."
However, waiver of immunity for tort claims is governed by the Texas Tort Claims Act. Under
rules of statutory construction, precedence is given to the Tort Claims Act over section 5 1 .075,
because the Tort Claims Act is the later-enacted, more specific statute, regarding waiver of
immunity in tort cases. Moreover, the phrase "plead and be impleaded," in section 51.075, does
not clearly and unambiguously reflect legislative intent to waive immunity from suit.

Waiver Of Immunity Not Shown By City Charter Allowing City To Sue And Be Sued and
Implead And Be Impleaded.
Reata also claims the City's immunity is waived by the Dallas City Cha1ier which states that the
City may "sue and be sued" and "implead and be impleaded." Held: The City Charter provision
does not waive the City's immunity from suit. Such phrases, separately or together, do not
comprise a cl ear and unambiguous waiver of immunity to suit. See id.

**********************
SIGNIFICANT DECISION
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Tooke v. City of Mexia, 197 S.W.3d 325
03-0878 [Per curiam opinions disposing of similar issues: 04-0175, 04-0406, 04-0622, 04-0730,
04-0879,04-1021,04-1139,05-0414, 05-0601.]
6/30/2006
Justice Hecht. Justice Johnson filed an opinion concurring in part and dissenting in part. Justice
O'Neill filed a dissenting opinion. Justice Willett did not participate in the decision.
Governmental Immunity Not Waived By "City May Plead Or Be Impleaded"
Language In Local Government Code.
This case involves a suit against a home rule city for breach of contract. The trial court
rendered judgment on a verdict for the plaintiffs, but the court of appeals reversed, 115
S.W.3d 618 (Tex. App. - Waco 2003), holding that the contract covered a governmental
function of the city, over which it was immune from suit, and that immunity was not
waived by section 51.075 of the Local Government Code, which provides that a homerule municipality "may plead and be impleaded in any court." Held: Affirmed. The
City's immunity from suit on the Plaintiff-Tookes' breach of contract claim was not
waived by section 51.075. The words "sue and be sued" do not necessarily mean that the
sovereign immunity of the governmental entity is waived.
Governmental Immunity. Missouri Pacific Railroad Co. v. Brownsville Navigation District Is
Overruled.
In Missouri Pacific Railroad Co. v. Brownsville Navigation District, 453 S.W.2d 812 (Tex.
1970), decided in 1970, the argument was made that certain navigation districts' immunity from
suit was waived by an organic statute providing that the districts "may, by and through the
navigation and canal commissioners, sue and be sued." There, the Supreme Court held that "[the
statute on navigation districts] is quite plain and gives general consent for the District to be sued
in the courts of Texas in the same manner as other defendants." Held: Missouri Pacific must be,
and now is, overruled. The holding of Missouri Pacific that 'sue and be sued', by itself, in an
organic statute always waives immunity from suit is simply incorrect." The effect of a "sue and
be sued" clause in an organic statute depends on the context in which it is used. The words can
mean that immunity is waived, but they can also mean only that a governmental entity, like
others, has the capacity to sue and be sued in its own name.
Governmental Immunity. Contract Waives Immunity From Liability, But May Not
Waive Immunity From Suit.
In Texas, governmental immunity has two components: immunity from liability, which
bars enforcement of a judgment against a governmental entity, and immunity from suit,
which bars suit against the entity altogether. By entering into a contract, a governmental
entity necessarily waives immunity from liability, voluntarily binding itself like any other
party to the terms of agreement, but it does not waive immunity from suit. To ensure that
this legislative control is not lightly disturbed, a waiver of immunity must be clear and
unambiguous .
Governmental Immunity May Be Waived Retroactively. Immunity From Suit On
Contract With Local Government Waived Here.
HB 2039, passed by the Legislature while this case has been pending, enacts sections 271.151.160 of the Local Government Code, waiving immunity from suit for contract claims against
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most local governmental entities, in certain circumstances. The provisions waiving immunity and
limiting damages "apply to a claim that arises under a contract executed before the effective date
of this Act only if sovereign immunity has not been waived with respect to the claim before the
effective date of this Act," which was 911/ 2005. If immunity was waived for a claim that arose
before that date, HB 2039 has no effect. A governmental entity cannot complain of a retroactive
waiver of immunity, since all governmental immunity derives from the State, and a
governmental entity acquires no vested rights against the State. Because the City was immune
from suit on the Tookes' claim that aro se before the effective date of HB 2039, its immunity is
waived only to the extent provided by that statute.

**********************
Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448
03-1128
6/30/2006
Justice Medina delivered a plurality opinion, joined by Chief Justice Jefferson, Justice O'Neill,
and Justice Wainwright. Justice Brister fi led a concurring opinion, joined by Justice Willett.
Justice Johnson filed a dissenting opinion, joined by Justice Hecht and Justice Green.
Inferential Rebuttal Issue Not Required Where The Intervening Act Is The Same Risk
That Renders The Original Actor Negligent.
The issue, in this wrongful death and survival action, is whether the trial court erred in refusing
to submit an inferential rebuttal instruction on "new and independent cause." The court of
appeals reversed and remanded for new trial. 11 7 S.W.3d 526, 537. Held: Reversed and
remanded to the court of appeals to consider the other issues raised in the appeal. The evidence
[detailed in the opinion] in this case did not require the submission of this additional instruction.
Where the intervening act's risk is the very same risk that renders the original actor negli gent, the
intervening act cannot serve as a superseding cause.
New And Independent Cause Defined. It Is An Inferential Rebuttal Defense.
A new and independent cause is one that intervenes between the original wrong and the final
injury, such that the injury is attributed to the new cause, rather than the first and more remote
cause. An intervening cause thus supersedes the defendant's negligence by destroying the causal
connection between that negligence and the plaintiffs injury thereby relieving that defendant of
liability. The purpose of an instruction, on new and independent cause, is to advise the jurors, in
the appropriate case, that they do not have to place blame on a pmiicular defendant to the suit if
the true cause for the accident li es elsewhere. The instruction is necessary when the evidence in
the case raises a fact issue on new and independent cause.
Independent Cause. Effect Of Concurring Cause.
If the intervening force was foreseeable at the time of the defendant' s negligence, the force is
considered to be a concurring cause of the plaintiffs injuries, and the defendant remains liable
for the original negligence. If, on the other hand, the intervening act is extraordinary under the
circumstances, not foreseeable in the norn1al course of events, or independent of, or far removed
from, the defendant's conduct, it may well be a superseding act. What generally distingu ishes a
superseding cause from one that merely concurs in the injury is that the intervening force was not
only unforeseeable, but its consequences also unexpected: A superseding cause is one that alters
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the natural sequence of events and produces results that would not otherwise have occurred. Or
one that is of such an extraordinary nature or so attenuates defendant's negligence from the
ultimate injury that responsibility for the injury may not be reasonably attributed to the
defendant.

Intervening Cause Cannot Serve As A Superseding Cause Where It Is The Very Risk That
Rendered The Original Actor Negligent.
Where the intervening act's risk is the very same risk that renders the original actor negligent, the
intervening act cannot serve as a superseding cause.

**********************
Fifth Club, Inc. v. Ramirez, 196 S.W.3d 788
04-0550
6/30/2006
Justice Green delivered the opinion of the Court, in which Chief Justice Jefferson, Justices
O'Neill, Brister, and Medina joined, and in which Justices Hecht, Wainwright, Johnson, and
Willett joined as to Parts I, II, and III. Justice Brister filed a concurring opinion, in which
Chief Justice Jefferson joined. Justice Willett filed a dissenting opinion, in which Justices
Hecht, Wainwright, and Johnsonjoined.
Personal Character Exception To General Rule Against Liability Of Employers, For Acts
Of Independent Contractors, Is Rejected.
[Part II]. Fifth Club, Inc. operates an Austin nightclub. West, a certified peace officer, was hired
as an independent contractor by Fifth Club to provide security at the nightclub. West and another
parking lot security officer were asked to escort Ramirez and his brother out of the club's
entrance. West allegedly grabbed Ramirez, slammed Ramirez's head against a concrete wall,
knocking him unconscious, and then struck him several times. Ramirez sued West and the club
for damages. A jury found Fifth Club vicariously liable for West's conduct and for negligence
and malice in its hiring of West. The jury awarded Ramirez actual damages that included future
mental anguish damages and exemplary damages. The court of appeals affirmed. Held: The
court of appeals' judgment against Fifth Club, based on jury findings of vicarious liability
negligence and malice in hiring, is reversed and a take-nothing judgment is entered in Fifth
Club's favor. The court of appeals' judgment against West as to future mental anguish damages
is affirmed. The Supreme Court declines to recognize a personal character exception to the rule
that an employer is generally insulated from liability for the tortious acts of its independent
contractors. In Texas, business owners and employers alike are generally held liable for an
independent contractor' s tortious acts, only if the employer maintains detailed control over the
independent contractor' s acts, or if the work itself involves a nondelegable duty, whether
inherently dangerous or statutorily prescribed. Under the personal character exception to the
general rule against liability of employers for the acts of independent contractors, argued for by
Ramirez, a premises owner can be held liable when an independent contractor's work involves
duties that are personal in character, such as those performed by a security guard.
Negligent Hiring Requires That Employer's Failure To Investigate Proximately Caused
The Plaintiff's Injury.

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[Part III]. Negligence in hiring requires that the employer's failure to investigate, screen, or
supervise its hirees proximately caused the injuries the plaintiffs allege. There is no such
evidence in this case.
Hiring Of Certified Peace Officer As Security Guard Indicates Fitness For Job, Absent
Contrary Evidence.
[Part III]. While Plaintiff-Ramirez presented evidence that Defendant-Fifth Club did not
perform a background check, or train the security guard, West, who was alleged to have injured
Ramirez, West's status as a certified peace officer made him fit for this type of work, and there
was no conflicting evidence that he was unfit for the security position prior to the incident in
question.
Damages; Mental Anguish Recoverable When, As A Result Of Physical Injury, It Is Of
Lasting Duration.
[Part IV]. Plaintiff-Ramirez presented evidence that he was severely beaten by West, a security
guard hired by the Defendant. Ramirez and his wife testified that Ramirez continued to be
depressed, humiliated, non-communicative, unable to sleep, and angry, continued to have
headaches and nightmares, and that his daily activities and his relationships with his wife and
daughter continued to be detrimentally affected almost two years after the incident. Ramirez also
presented evidence of the severity of the intentional beating by West, including significant
injuries to his head and body, his loss of consciousness, and his visits to the hospital. The j ury
awarded $20,000 in future mental anguish damages against West. Held: The court of appeals'
judgment against West as to future mental anguish damages is affirmed. The evidence shows the
nature of Ramirez's mental anguish, its lasting duration, and the severity of his injuries, and is
therefore legally sufficient to supp011 future mental anguish damages. Mental anguish awards
will pass a legal sufficiency review if evidence is presented describing the nature, duration, and
severity of their mental anguish, thus establishing a substantial disruption in the plaintiffs' daily
routine. Furthermore, some types of disturbing or shocking injuries have been found sufficient
to support an inference that the injury was accompanied by mental anguish.

**********************
Loram Maintenance of Way, Inc., v. Ianni, 210 S.W.3d 593
04-0666
6/30/2006
Justice Green delivered the opinion of the Com1. Justice O'Neill filed a concurring opinion, in
which Chief Justice Jefferson joined.
Duty. Employer Has No Duty To Control Off-Duty Employee Known To Be Intoxicated
Or Impaired.
This is an action for personal injuries. Tingle worked for Loram, and traveled with his wife.
Tingle also participated in an illegal drug culture that was allowed to flourish among the
employees at Loram. He had been using methan1phetamine, on and off the job, for ten months.
There was evidence that Tingle's supervisor and co-workers used the drug, and that Tingle's
supervisor had given Tingle time off to purchase more. On the day of the incident, while at work,
Tingle repmiedly spoke of attacking his wife. After their shift ended, he and his co-workers were
driven back to the motel where they were housed with their families. Later that day, Tingle got
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into an argument with his wife, forced her into their car. When he threatened his wife with a gun,
she jumped out of the car screaming for help. Ianni, an El Paso police officer, witnessed the
altercation and went to her aid. Tingle shot Ianni, seriously injuring him. Ianni sued Loram,
claiming it was negligent in retaining an incompetent, unfit, or dangerous employee; in failing to
properly control and supervise Tingle; and in encouraging drug use. The jury found Loram's
negligence proximately caused Ianni's injuries and that Loram's supervisors were vice
principals. Ianni was awarded actual and punitive damages. The comt of appeals affirmed the
trial court's judgment. 141 S.W.3d 722 Held: Reversed and rendered. In the absence of a
relationship between the parties giving rise to the right of control, one person is under no legal
duty to control the conduct of another, even if there exists the practical ability to do so. Simply
knowing that an employee is intoxicated or incapacitated is not enough for a duty to arise.
Rather, the employer must affirmatively exercise control over the incapacitated employee. Thus,
while an employer owes no duty to act to control the conduct of an impaired off-duty employee,
if the employer does decide to act, its duty is to avoid any affirmative act which might worsen
the situation.
Law Of The Case Doctrine Does Not Apply To Supreme Court, Which Previously Refused
To Review An Earlier Court Of Appeals Decision.
The 'law of the case' doctrine is defined as that principle, under which questions of law decided
on appeal to a court of last resort, will govern the case throughout its subsequent stages. The fact
that the Texas Supreme Court declined to review a court of appeals judgment, in a prior appeal,
concerning the pending case, is not evidence that the Supreme Court agrees with the law, as
decided by the court of appeals. In other words, a court of appeals' conclusion is not binding,
under the "law of the case" doctrine, when the petitioner's first petition for review is denied by
the Supreme Court. The denial or dismissal of a petition does not give any indication of the
Supreme Court's decision on the merits of the issue.
Employer's Liability For Employee's Off-Duty Conduct.
In the absence of a relationship between the parties, giving rise to the right of control, one person
is under no legal duty to control the conduct of another, even if there exists the practical ability
to do so. The employer-employee relationship can give rise to this kind of duty. But it is a
narrow duty; typically an employer is liable only for the off-duty torts of his employees which
are committed on the employer's premises or with the employer's chattels. In addition, when,
because of an employee's incapacity, an employer exercises control over the employee, the
employer has a duty to take such action as a reasonably prudent employer under the same or
similar circumstances would take to prevent the employee from causing an unreasonable risk of
harm to others.

**********************
GuideOne Elite Insurance Company v. Fielder Road Baptist Church, 197 S.W.3d 305
04-0692
6/30/2006
Justice Medina. Justice Hecht filed a concurring opinion, joined by Justices Wainwright, Brister,
and Willett.

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Insurance. Duty To Defend Determined Under The "Eight-Corners" Rule. No Exception
For Mixed Or Overlapping Extrinsic Evidence.
This is a suit for declaratory judgment. GuideOne issued a commercial general liability
insurance policy to the Church, providing liability coverage for sexual misconduct. The plaintiff
filed a sexual misconduct suit, alleging improper conduct by Evans, and alleging that Evans was
employed by the church when he sexually exploited and abused her. GuideOne filed a
declaratory judgment action to determine its duty to defend. The Church admitted that Evans
ceased working for it before the policy in question became effective. The trial court, considering
the extrinsic evidence, that Evans was not employed when the policy became effective, entered
summary judgment for GuideOne. The court of appeals reversed. Held: Affirmed. In deciding
the declaratory judgment action, under the "eight corners rule," concerning the duty to defend,
the trial court could only consider the face of the insurance policy and the plaintiff's pleadings
(which alleged that Evans was employed by the church at a time covered by the policy). Resort
to evidence outside the four corners of these two documents is generally prohibited. The
Supreme Court declines to recognize an exception to the "eight-corners" rule for mixed or
overlapping evidence (evidence that is relevant to both coverage and the merits). Such extrinsic
evidence would pose a significant risk of undem1ining the insured's ability to defend itself in the
underlying litigation.

**********************
City of Tyler v. Beck, 196 S.W.3d 784
04-0813
6/30/2006
Per Curiam
Service Of Citation Not Required In Condemnation Cases, Where Both Parties Object To
Award, And Participate With Knowledge Of The Other's Objection.
This is a condemnation action. The Becks owned real property, which the City of Tyler initiated
proceedings to condemn. Three appointed special commissioners assessed damages to the Becks,
and entered an award, pursuant to Tex. Prop. Code§ 21.0 14. The City, and then the Becks, filed
objections to the award and sent copies to opposing counsel, but neither issued formal service of
citation on the other, as the Property Code requires. The trial court dismi ssed the case for want of
prosecution, due to lack of service and reinstated the award. The court of appeals affinned, Held:
Reversed and remanded. Judicial condemnation proceedings commence when an objection to the
award is filed; if service of citation is not timely secured, the award is subject to reinstatement.
Here, both pa1ties invoked the judicial process, by filing objections to the commissioners' award,
and each participated in the judicial proceedings, with notice of the other's objections. The
purpose of the service of citation requirement was satisfi ed because the Becks, by filing their
own objections, invoked the judicial process, and the comt acquired in personam jmisdiction
over them.
Pleadings By New Attorney, Who Has Not Been Designated As Attorney In Charge, Is
Valid.
The City's post-judgment motions, signed by a new attorney, who had not been designated as the
City's attorney in charge, properly extended the plenary power of the court and the time for
appeal. Tex. R. Civ. P. 8 provides that " [a]ll communications . . . with respect to a suit shall be
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sent to the attorney in charge," and that any change of that designation must be made by written
notice to the court and the other parties. However, nothing in the rule indicates that a motion
(here a motion for new trial) filed by an attorney, other than the designated attorney in charge, is
void, or that other attorneys are not authorized to act on behalf of the party.

**********************
Sudan v. Sudan, 199 S.W.3d 291
04-0921
6/30/2006
Per Curiam
Economic Duress Requires Compulsion That Is Imminent And Render Person Incapable
Of Exercising Free Agency.
This is a suit to enforce a settlement agreement, incorporated into a divorce decree. Several years
after negotiating for ninety-two months of alimony, which was incorporated into the divorce
decree, Phillip Sudan threatened his fon11er wife, Maggie (Sudan) Mackenzie, with stopping the
alimony payments. After consulting with an accountant, and with an attorney at the law firm
where she worked, Mackenzie negotiated a final lump sum payment of $30,000. The parties,
thereafter, signed an amendment to the settlement agreement, relieving Sudan of any future
alimony obligation, in exchange for the $30,000. Several months later, Mackenzie, claiming
economic duress, sued Sudan to rescind this amendment, and for breach of the settlement
agreement, intentional infliction of emotional distress, fraud in the inducement, tortious
interference, non-payment of child support, and attorney ' s fees. The trial court granted Sudan a
partial summary judgment, disposing of all claims, except those relating to child support and
attorneys' fees. The court of appeals reversed the summary judgment, finding evidence of
economic duress. Held: Reversed and rendered. There is no evidence here of economic duress.
Duress is the result of threats, which render persons incapable of exercising their free agency,
and which destroy the power to withhold consent. The compulsion must be actual and imminent,
and not merely feigned or imagined. Following Sudan's threat, Mackenzie had adequate time to
consult with professionals, and apparently chose to negotiate an amendment, rather than enforce
the parties' existing agreement. Her summary judgment evidence did not raise a fact issue about
whether Sudan's threat deprived her of a present means of protection, or caused her imminent
restraint.

**********************
City of Houston v. Clark, 197 S.W.3d 314
04-0930
6/30/2006
Justice O'Neill
Police Independent Hearing Examiner's Adverse Decision May Be Appealed By City.
Chapter 143 of the Local Government Code, known as the Fire Fighter and Police Officer Civil
Service Act, authorizes municipalities to appeal adverse decisions of independent hearing
examiners. That appeal, however, is restricted by the scope of review, described in Tex. Loc.
Gov't Code § 143.10 16(j), i.e., that the hearing examiner was without jurisdiction, or exceeded
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that jurisdiction, or the order was procured by fraud, collusion or other unlawful means. If the
right of appeal, provided by Section 143.10 160), does not afford a city meaningful review of the
merits of a decision, as Clark appears to argue, delegation of grievance decisions to an
independent hearing examiner may raise constitutional problems. But the precise scope of the
appeal, provided by Section 143 .10 160), and its effect on cities have not been fully presented in
this Court.

**********************
Slovacek LLP v. Walton, Not yet reported in S.W.3 d, 2006 WL 1791694
04-1004
6/30/2006 [Opinion withdrawn 11 /3/2006]
Chief Justice Jefferson, Justice Hecht filed a dissenting opinion, in which Justices Medina and
Willett joined.
Attorney Hired On A Contingent-Fee Basis May Not Require Present Value Payment If
Discharged Before The Case Is Over.
An attorney, hired on a contingent-fee basis, may not include in the fee agreement a provision
stating that, in the event the attorney is discharged before completing the representation, the
client must immediately pay a fee, equal to the present value of the attorney's interest in the
client's claim. Such a termination fee provision penalizes the client for changing counsel, grants
the attorney an impermissible proprietary interest in the client's claims, shifts the risks of the
representation almost entirely to the client's detriment, and subverts several policies underlying
the use of contingent fees. Such a termination fee provision is contrary to public policy, and is
unenforceable.

**********************
City of Waco, Texas v. Kelley, 197 S.W.3d 324
04-111 3
6/30/2006
Per Curiam
City May Appeal Independent Police Hearing Examiner's Decision.
Kelley, Waco's Assistant Chief of Police, was suspended indefinitely by the Chief of Police for
his an-est while driving under the influence of alcohol. Kelley appealed the suspension to an
independent third party hearing examiner, who found the charges were proven but reduced the
indefinite suspension to a I 80-day suspension with reinstatement at the rank of sergeant. The
examiner also awarded Kelley back pay. The City challenged the decision on various grounds in
its appeal to district court pursuant to Tex. Loc. Gov't Code § 143.057(j). The trial court upheld
the examiner's decision. On the City's appeal, the court of appeals vacated the district court's
judgment and dismissed the case for lack of jurisdiction, concluding that the City had no right to
appeal from an independent hearing examiner's decision. Held: Reversed and remanded to the
court of appeals for fmiher proceedings. Municipalities have the right to appeal an independent
hearing examiner's decision. As explained today in City of Houston v. Clark, _ S.W.3d _
(Tex. 2006), the City of Waco has a right to such an appeal under Section 143.057(j) ofthe Local
Government Code.
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In re Palacios,--- S.W.3d ----,2006 WL 1791683
05-0038
6/30/2006
Per Curiam
Mandamus, Generally, Unavailable To Review Trial Court's Order Compelling
Arbitration.
This is an original mandamus proceeding. Palacios filed suit against several individuals and
companies when her attempt to buy a duplex in Austin fell through. One of those defendants,
Mortgages Direct, moved to compel arbitration based on an agreement providing that all disputes
relating to its agreement with Palacios "shall be submitted for binding arbitration." The
transaction involves foreign commerce, and thus implicates the Federal Arbitration Act. The trial
court granted the motion, and the Third Court of Appeals denied mandamus relief. Held: Writ of
mandamus is denied. The Supreme Court writes, however, "to recognize a change in accordance
with developments in federal law." Texas Supreme Court has previously held that an order
granting arbitration under the FAA can be reviewed by mandamus. But since then, the United
States Supreme Court has held that the FAA allows review of such orders only if the underlying
case is dismissed; if it is merely stayed (as was the case here), there can be no review until final
judgment. Texas courts applying the FAA follow Texas rather than federal procedure.
Nevertheless, "it is important for federal and state law to be as consistent as possible in this area,
because federal and state courts have concunent jurisdiction to enforce the FAA." There is little
friction between the FAA and Texas procedures when state courts review by mandamus an order
that the federal courts would review by interlocutory appeal. But it is quite another matter for
state courts to review by mandamus an order that the federal courts could not review at all. Such
review would create tension with the legislative intent of the FAA, which generally permits
immediate appeal of orders hostile to arbitration," but "bars appeal of interlocutory orders
favorable to arbitration. The Court does not decide whether mandamus review of an order
staying a case for arbitration is entirely precluded, as where a party can meet a "particularly
heavy" mandamus burden to show "clearly and indisputably that the district court did not have
the discretion to stay the proceedings pending arbitration.

**********************
In reD. Wilson Construction Co., 196 S.W.3d 774
05-0326 consolidated with 05-0327
6/30/2006
Justice Willett. Justice Brister filed a concuning opinion.
Arbitration. Contract Is Not Ambiguous In Either The Existence Or Scope Of The
Arbitration Agreement.
In 1993, the Brownsville Independent School District contracted with two general contractors, D.
Wilson Construction Company and Stotler Construction Company, to build two schools in
Brownsville. Both contracts incorporate General Conditions and Supplementary Conditions. The
General Conditions expressly incorporate AlA Document A20 1, a standard construction industry
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document, published by the American Institute of Architects that details the parties' respective
rights, responsibilities and relationships on the project. Paragraph 4.5 of A201 is titled
"Arbitration," and subparagraph 4.5.1, titled "Controversies and Claims Subject to Arbitration,"
sets forth the broad, catch-all scope of the arbitration agreement: "Any controversy or Claim
arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration in
accordance with the Construction Industry Arbitration Rules of the American Arbitration
Association ...."The Supplementary Conditions state that they "modify, change, delete from or
add to" the General Conditions. Among other things, the Supplementary Conditions "[a]dd new
Clause 4.5 .1 .1" to the arbitration provision: "Except as otherwise provided in this Contract, any
dispute concerning a question of fact arising under this contract, which is not disposed of by
agreement shall be decided by [BISD] .... The decision of [BISD] shall be final and conclusive
unless" it is timely appealed to the Superintendent and then to the BISD Board of Trustees,
"whose decision shall be final and conclusive." The trial court refused to order arbitration of the
disputes in question. Held: Writ of mandamus will issue. There is no ambiguity in either the
existence or scope of these arbitration agreements. The placement, caption, and caveat of clause
4.5.1.1, as well as the language of subparagraphs 4.5 .2-4.5.7, indicate that the clause is
subordinate to subparagraph 4.5.1 if subparagraph 4.5.1 applies in a given situation. The
arbitration agreements and clause 4.5.1.1 can be reconciled; the arbitration agreements are not
susceptible to more than one reasonable interpretation and are therefore not ambiguous.
Arbitration. Refusal Of Trial Court To Compel Arbitration Involving Both FAA & TAA
Is Subject To An Interlocutory Appeal.
The trial court refused to order arbitrations, under contracts which reference neither the Federal
Arbitration Act, nor Texas Arbitration Act. The contracts provide that "[t]he Contracts shall be
governed by the law of the place where the Project is located." The court of appeals di smissed
their interlocutory appeal for want of jurisdiction, because the construction contracts involved
interstate commerce. Held: The court of appeals erred in dismissing the interlocutory appeal
from the trial court's refusal to compel arbitration. The contract invoked both federal and state
law. The mere fact that a contract affects interstate commerce, thus triggering the FAA, does not
preclude enforcement under the T AA, as well.
Mandamus May Be Used To Review A Trial Court's Refusal To Compel Arbitration
Under The Federal Arbitration Act.
Mandamus is appropriate to review a trial court' s denial of a motion to compel arbitration under
the Federal Arbitration Act.
Arbitration. Federal Arbitration Act Preempts The Texas Act Only When Texas Law
Contrary To Federal Law.
The Federal Arbitration Act (FAA) only preempts contrary state law, not consonant state law.
The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to
occupy the entire field of arbitration. But, even when Congress has not completely displaced
state regulation in an area, state law may nonetheless be pre-empted to the extent that it actually
conflicts with federal law- that is, to the extent that it stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress. The FAA only
preempts the TAA if: (1) the agreement is in writing, (2) it involves interstate commerce, (3) it
can withstand scrutiny, under traditional contract defenses [under state law], and (4) state law
affects the enforceability of the agreement. In today's case, the court of appeals ignored the
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fourth factor. The mere fact that a contract affects interstate commerce, thus triggering the FAA,
does not preclude enforcement under the TAA, as well. For the FAA to preempt the TAA, state
law must refuse to enforce an arbitration agreement that the FAA would enforce, either because
(1) the TAA has expressly exempted the agreement from coverage, or (2) the TAA has imposed
an enforceability requirement not found in the FAA.

**********************
O'Donnell v. Smith, 197 S.W.3d 394
05-0072
6/30/2006
Per Curiam. Justice Green did not participate in the decision.
May An Estate's Representative Sue A Decedent's Former Attorneys For Malpractice In
Advising Decedent In His Capacity As Executor Of His Late Wife's Estate?
This is a legal malpractice case. The lower courts held that an estate's personal representative
cannot sue the decedent's former attorneys for malpractice they are alleged to have committed in
advising the decedent in his capacity as executor of his wife's estate. Held: Reversed and
remanded, without reference to the merits, to the court of appeals for reconsideration in light of
the decision in Belt v. Oppenheimer, Blend, Harrison & Tate, Inc., _ S.W.3d _(Tex . 2006).

**********************
Fiess v. State Farm Lloyds, 202 S.W.3d 744
04-1104
8/31 /2006
Justice Brister. Justice Medina filed a dissenting opinion, in which Justice O'Neill joined.
Insurance; Homeowner's Policy Does Not Provide Coverage For Mold Contamination
Caused By Water Damage That Is Otherwise Covered By The Policy.
This case comes as a certified question from the Fifth Circuit Court of Appeals. The
Homeowners Form B (HO-B) insurance policy, in question, provides: "We do not cover loss
caused by: (I) wear and tear, deterioration or loss caused by any quality in property that causes
it to damage or destroy itself; (2) rust, rot, mold or other fungi; (3) dampness of atmosphere,
extremes of temperature; (4) contamination; (5) rats, mice, termites, moths or other insects. We
do cover ensuing loss caused by collapse of the building or any part of the building, water
damage, or breakage ofglass which is part of the building if the loss would otherwise be covered
under this policy. " [The Supreme Court, in answering the certified question, does not address
personal propetiy coverage under paragraph 9 (accidental discharge, leakage or overflow of
water) of the HO-B policy, because the Fifth Circuit Court of Appeals concluded that the Fiesses
failed to appeal that issue.] Held: The ensuing loss provision contained in Section !-Exclusions,
part l(f) of the Homeowners Fom1 B (HO-B) insurance policy, as prescribed by the Texas
Department of Insurance effective 7/8/1992 (Revised 1/1/1996), when read in conjunction with
the remainder of the policy, does not provide coverage for mold contamination caused by water
damage that is otherwise covered by the policy. By its own terms, paragraph l(f) covers only
ensuing losses from water damage, not water alone. The only reasonable construction of this
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clause is that it applies when an excluded risk is followed by an intervening occurrence that in
turn causes an ensuing loss.
Insurance. Construction Of Policy. Prior Policy Is Extrinsic Evidence And Inadmissible,
Unless The Policy Is Ambiguous.
In determining whether a policy of insurance is ambiguous, evidence of prior policies is extrinsic
evidence, and thus inadmissible, unless this policy in question is ambiguous. Ambiguity must be
evident from the policy itself; it cannot be created by introducing parol evidence of intent. And
while courts have looked at a prior policy, in deciding between reasonable constructions of a
current one, the Texas Supreme Court has never done so, in lieu of construing the current one at
all. Given the complexities found in most insurance poli cies, it is wiser to stick with the rule that
insurance policies must be construed one policy at a time.
Administrative Agency's Amicus Brief Cannot Create An Ambiguity In An Existing
Insurance Policy.
The homeowner's insurance policy in question is not ambiguous, just because the Texas
Department of Insurance advances an interpretation that, while not convincing, is a reasonable
alternative to the Supreme Court's own. It is true that courts give some deference to an agency
regulation containing a reasonable interpretation of an ambiguous statute. But that is not always
true. First, such deference is given only to formal opinions adopted after formal proceedings, not
isolated comments during a hearing or opinions in documents like the Department's amicus brief
here. Second, the language at issue must be ambiguous; an agency's opinion cannot change plain
language. Third, the agency' s construction must be reasonable; alternative unreasonable
constructions do not make a policy ambiguous. An agency's opinion can help construe an
exi sting ambiguity, but it cannot create one; that the Department agrees with the Fiesses'
construction does not make this policy ambiguous.

**********************
In reApplied Chemical Magnesias Corporation, 206 S.W.3d 114
04-1119
8/31 /2006
Justice Green
Venue. A Declaratory Judgment Action To Determine The Rights Of The Parties To A
Contract To Acquire Leases Is An Action Involving Real Estate.
This is an original mandamus proceeding. Held: A declaratory judgment suit to determine the
rights of the parties to a contract, to acquire surface and mineral leases, is an action involving an
interest in real property, thus making it subject to the mandatory venue provision of section
15.0 11 of the Texas Civil Practice and Remedies Code. Special distinctions are not made for real
property suits, simply because they are couched in terms of a declaratory judgment action.

**********************
City of San Antonio v. Hartman, 201 S.W.3d 667
05-0147
8/31 /2006
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Justice Brister. Justice Green did not participate.

Motion For Rehearing En Bane Extends The Time For A Petition For Review.
A motion for rehearing en bane qualifies as a "motion for rehearing" that extends the deadline
for a petition for review. Tex. R. App. P. 53.7 extends the petition deadline, only if a motion is
timely filed. Although motions for rehearing must be filed within 15 days of judgment, the City's
motion here was filed 26 days after judgment. Nevertheless, it was timely filed. Unlike other
motions for rehearing, en bane reconsideration may be requested at any time while a court of
appeals retains plenary power: Because the City' s motion was filed within the court of appeals'
plenary power, it was timely filed and operated to extend the deadline for its petition for review.
Governmental Immunity Applies To The Emergency Situation Of A 100-Year Flood
During a rainstorm of historic proportions, the City put up barricades on one side of Rigsby
Avenue, but not the other. Four members of the Hartmans' extended family were killed when the
car they were in, drove into the flooded portion of Rigsby, and was swept away in the current.
The Texas Tort Claims Act, Tex. Civ. Prac. & Rem. Code §§ 101.021-025, waives immunity
from liability and suit in a number of circumstances. However, the statute contains a number of
exceptions to the waiver of immunity are included, including §101.055(2), which exempts
governments reacting to an emergency situation. The trial court denied the city's jurisdictional
plea. The court of appeals affirmed, holding, in part, that the flood did not constitute an
emergency. Held: Reversed and rendered for the City. A 100-year flood is an "emergency
situation" to which government immunity applies. Section 10 1.055(2), exempts governments
reacting to an emergency situation, which necessarily includes prioritizing some risks over
others. Under the statute, evidence that the City had time to do more at Rigsby Avenue is not
evidence that the City was no longer reacting to an emergency situation. The Hartmans do not
assert that any law or ordinance governed the placement of barricades on Rigsby A venue. Nor do
they assert that the City's acts or omissions show that it did not care what happened to motorists.
Accordingly, the exception to the Tort Claims Act found in Section 101.055(2), applies, unless
the Hartmans presented some evidence that City employees were not reacting to an emergency
situation. This they could not do, since the evidence is conclusive that an emergency situation
existed. Under the statute, evidence that the City had time to do more at Rigsby A venue, is not
evidence that the City was no longer reacting to an emergency situation.

**********************
Blue Cross Blue Shield of Texas and Health Care Sen,ice Corp v. Duenez, 201 S.W.3d 674
05-0521
8/3112006
Per Curiam
Exhaustion Of Administrative Remedies Required Of State Employee Seeking To
Overturn Decision of ERS Executive Director. Jurisdictional Requirement.
A state employee, who is insured through the Employee Retirement System of Texas (ERS), by
Blue Cross Blue Shield of Texas, must, when coverage is denied, exhaust all administrative
remedies before proceeding to the courts. Under Tex. Ins. Code § 1551.352, ERS's executive
director "has exclusive authority to determine all questions relating to enrollment in or payment
of a claim arising from [ERS] group coverages or benefits." Generally, the executive director's
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determination may be appealed only to the ERS Board of Trustees. A party aggrieved by the
Board's decision may then seek judicial review in a Travis County district court, where the
determination is subject to substantial-evidence review. The plain language of the ERS Act
makes clear that the administrative appeals process is the "exclusive" means of resolving a claim
for payment of ERS-derived benefits. Until the party has satisfied the exhaustion requirement,
the trial court lacks subject-matter jurisdiction, and must dismiss without prejudice those claims
within the agency's exclusive jurisdiction.

**********************
Ross v. National Center for the Employment of the Disabled, 201 S.W.3d 694
05-0534
8/31/2006
Per Curiam
Appellate Review Of Turnover Order. Reversal Of Underlying Judgment Requires
Reversal Of Order.
If the underlying judgment is reversed on appeal, then the turnover order, issued pursuant to that
judgment, must be reversed also.

**********************
PeNa v. McDowell, 201 S.W.3d 665
05-0546
8/312006
Per Curiam
Certificate Of Service Not Required With Notice Of Appeal. Other Methods Possible.
Tex. R. App. P. 25.l(e) makes no mention of a certificate of service. Indeed, nowhere in Rule 25
are litigants directed to include a certificate of service with their notice of appeal, or as to what
the contents of such a certificate ought to be. Rule 25.l(e) merely requires actual service on all
parties to the trial court's judgment. A certificate of service is simply one method of
demonstrating that actual ser\'ice occurred, and is addressed within an entirely different section
of the Rules of Appellate Procedure.
Procedure. Pro Se Litigants Are Not Exempt From The Rules of Civil Procedure.
Pro se litigants are not exempt from the rules of procedure.
Notice Of Appeal. Dismissal For Defect. Proper Notice Of Defect Required.
In dismissing an appeal for a defect in the notice of appeal, the appellate clerk must notify the
parties of the defect, so that the parties can remedy the defect. Here, the appellate clerk failed to
correctly identify the defect in Pefi.a's notice of appeal, and failed to give him a chance to correct
the mistake.

**********************
LMB, Ltd. v. Moreno, 201 S.W.3d 686
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05-0764
8/3 1/2006
Per Curiam
Summary Judgment. Conclusion Of Medical Doctor That Acts Of D Caused Injury Is No
Evidence Of Causation.
This is a premises liability case. Ernestina Moreno was struck by a car when she walked out from
between two vehicles, in a parking lot, owned by LMB, Ltd. Emestina, who was suffering from
cancer at the time, sustained a number of injuries in the accident. When she died approximately
one year later, the Morenos brought suit against LMB. The Morenos alleged LMB was negligent
in failing to inspect for, and correct, premises defects which caused the accident, and Emestina
Moreno's death. The defendant fi led a "no-evidence" summary judgment. In support of their
response to the summary judgment motion, the Plaintiffs attached an affidavit from Dr. Garza,
Ernestina's treating physician, medical records, and a police accident report. In his affidavit, Dr.
Garza stated that "[i] n reasonable medical probability, the death of Ernestina Moreno resulted .
from her weakened condition, caused by the accident in question. Therefore, in my opinion, the
conduct of [LMB] substantially caused Ernestina Moreno's injuries and death." H eld: The
expert testimony of Dr. Garza was insufficient to withstand a no evidence summary j udgment.
Dr. Garza' s affi davit does not comprise evidence that some premises condition, or an act or
omission ofLMB, was causally related to the accident and Ernestina Moreno's resulting injuries.
The affidavit does not contain competent summary judgment evidence of either cause-in-fact or
foreseeability.

**********************
In re Castillo, 201 S.W.3d 682
06-0314
8/3 1/2006
Chief Justice Jefferson
Court Of Appeals May Modify Method Of Assigning Cases To Judges.
In this original proceeding, Justice Castillo of the Thirteenth Court of Appeals seeks writs of
mandamus and prohibition ordering the Thirteenth Court to vacate an exit plan devised for her
by the other justices of that court, after Justice Castillo lost her reelection bid. Under the
modified exit plan, Justice Castill o would participate in the draw for panel assignments for the
summer and fall terms, and would be eligible to draw for majority-opinion assignments for the
summer tenn . Begi1ming in the fall term, however, Justice Castillo would not be assigned initial
responsibility for drafting majority opinions. Held: The writs of mandamus and prohibition are
denied. Although the modified plan itself may not be the most prudent model for a court
endeavoring to clear its docket, the court acted within its discretion in adopting it. Courts must
have some leeway in making such assignments, to help maintain a current docket. The
constellation of constitutional, statutory, and admini strative provisions, on which Justice Castillo
relies, does not create a right to participate in the majority-opinion draw, and cannot support her
claim for extraordinary relief.
Supreme Court Has Duty & Power To Supervise The Judicial Branch.
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Under Tex. Const. art. V, §§ 3, 31, the Texas Supreme Court has a constitutional obligation to
supervise and administer the judicial branch. Under Tex. Gov't Code § 74.021, the Court is
responsible "for the orderly and efficient administration of justice.". The Court also has inherent
power to protect and preserve the proper administration of the judicial system.

**********************
The following per curiam opinions REVERSE AND REMAND on issues decided by Tooke v.
City of Mexia (6/30/2006) (holding that the City's immunity from suit on the Plaintiff-Tookes'
breach of contract claim was not waived by Tex. Loc. Gov't Code § 51.075, and that the words
in the City Charter that the City may "sue and be sued" and "implead and be impleaded," does
not waive the City's immunity from suit), and Reata Construction Co. v. Dallas (6/30/2006)
(holding that the phrase "plead and be impleaded," in Tex. Loc. Gov' t Code§ 51.075, does not
clearly and unambiguously reflect legislative intent to waive immw1ity from suit):
City of Midland v. Goerlitz, 201 S.W.3d 689
03-0185
8/31 /2006
Per Curiam
City of Houston v. United Water Services, Inc., 201 S.W .3d 690
04-0547
8/3 1/2006
Per Curian1
Metropolitan Transit Authority v. M.E.B. Engineering, Inc., 20 1 S.W.3d 692
04-0547
8/31 /2006
Per Curiam
City oflrving v. I nform Construction, Inc., 201 S.W.3d 693
04-0984
8/31 /2006
Per Curiam
City of Angleton v. USFiltcr Operating Services, Inc., 201 S.W.3d 677
05-0098
8/31/2006
Per Curiam

**********************
In re Texas Department of Family and Protective Services, Not yet rep01t ed in S.W.3d, 2006
WL 2708467
04-1043
9/22/2006
Per Curian1
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Mandamus. Accelerated Appeal Adequate Remedy To Challenge Trial Court's Failure to
Timely Decide SAPCR Case.
This is an original mandamus proceeding. Section 263.401 of the Texas Family Code establishes
a deadline for rendition of a final order in suits affecting the parent-child relationship (SAPCRs)
brought by the Texas Department of Family and Protective Services. The court of appeals
granted mandamus relief and ordered the trial court to dismiss the Department's case, because
that deadline had not been observed . .Held: Writ of mandamus will issue directing the court of
appeals to vacate its order to the trial court directing the trial court to dismiss the case. Although
the trial court abused its discretion in failing to dismiss the Department's case, the parties
challenging a trial court' s denial of a motion to dismiss under§ 263.401 had an adequate remedy
by accelerated appeal.
In this case, the parties contesting termination of the parental relationship, Higdon and Ludwig,
filed their motions to dismiss during trial. Because the trial was underway when the dismissal
deadline passed and because physical possession of the children had already transferred to the
Department when the petition for writ of mandamus was filed with the court of appeals, we
conclude that an accelerated appeal provided an adequate remedy in this case. We do not hold
that a party complaining of a trial court's failure to dismiss a SAPCR within the statutory
deadline could never be entitled to mandamus relief, but under the facts of this case, we cannot
conclude that an accelerated appeal was not an adequate remedy. Impending transfer of physical
possession of the children or a trial court's unreasonable delay in entering a final decree might
alter this conclusion, but this record raises neither situation.
Family Law. SAPCR Suite Filed By Department Must Be Dismissed If Not Decided Within
One Year. Waiver.
Tex. Fam. Code § 263.401 (b), (c) requires a trial court to dismiss a SAPCR filed by the
Department if a final order has not been rendered by the first Monday after the one-year
anniversary of the date when the trial court appointed the Department temporary managing
conservator. The statute allows a maximum extension of 180 days. If the trial court has not
rendered a final order at the expiration of the additional 180 days, the court must dismiss the
SAPCR. Parties may waive complaints about a trial comi's failure to render a timely final order.
Under § 263 .402(b ), a timely motion to dismiss must be filed before the Depmiment introduces
all of its evidence, other than rebuttal evidence. A motion requesting the comi to render a final
order must be made before the dismissal deadline passes.

**********************
In re General Electric Capital Corporation, 203 S.W.3d 314
05-0482
9/22/2006
Per Curiam. Justice O'Neill did not pariicipate in the decision.
Jury Waiver Not Lost Because Party Failed To Notice That Case Had Been Moved From
Non-Jury Docket To Jury Docket.
A party, who did not receive notice of a jury demand, did not waive its contractual right to a nonjury trial by failing to notice that the case had been moved to the jury docket. When the pmiy
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finally noticed that the case was no longer on the non-jury docket, it moved to strike the jury
demand, but the trial court denied the motion. Unlike the circumstances in Rivercenter
Associates v. Rivera, 858 S.W.2d 366 (Tex. 1993), General Electric had already asserted its
contractual right to a non-jury trial when Small filed his jury demand. Moreover, General
Electric explains its delay in moving to quash the demand as a consequence of Small's failure to
send notice. Under these facts, the trial court abused its discretion in refusing to enforce the jury
waiver, because the contractual provision was not proven to be invalid nor impliedly waived by
the knowing conduct of the party seeking its enforcement.
Waiver Is A Matter Of Intent. There Is No Waiver When Party Does Not Act
Inconsistently With Right.
Waiver is largely a matter of intent, and for implied waiver to be fow1d through a party's
actions, intent must be clearly demonstrated by the surrounding facts and circumstances.
There can be no waiver of a right if the person sought to be charged with waiver says or
does nothing inconsistent with an intent to rely upon such right. Waiver is ordinarily a
question of fact, but when the surrounding facts and circumstances are undisputed, as in
this case, the question becomes one of law.
Mandamus Is Appropriate To Enforce A Valid Contractual Jury Waiver.
Mandamus is appropriate to enforce a valid contractual jury waiver. Finding no evidence that the
provision was invalid or that General Electric knowingly waived its contractual right to a nonjury trial, the trial court abused its discretion in failing to enforce the provision. Writ of
mandamus will issue directing the trial court to return the case to the non-jury trial docket.

**********************
Cary v. Alford, 203 S.W.3d 837
05- 101 8
9/22/2006
Per Curiam.
Summary from Default Judgment Resulting From Lost Papers. Motion For New Trial
Requirements.
The issue in this combined bill-of-review and medical-malpractice appeal is whether the
defendant's affidavit was sufficient to establish that his failure to answer was an accident rather
than conscious indifference. The trial court held that it was, set aside a default judgment for
$ 1,95 1, 188.00, and granted a new trial. Two years later, the trial court granted summary
judgment for the defendant. The Court of Appeals reversed, holding that the defendant's bill-ofreview affidavit was conclusory. Held: Reversed and remanded to the Court of Appeals, for
reconsideration in light of Fidelity and Guar. Ins. Co. v. Drewery Constr. Co. , 186 S.W.3d 571,
575-76 (Tex. 2006) (per curiam), where . the Supreme Court clarified the standard of review
when service papers are lost.

**********************
SIGNIFICANT DECISION
Coca-Cola Company v. Harmar Bottling Company, --- S.W.3d ----,2006 WL 2997436
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03-0737
10/20/2006
Justice Hecht. Dissenting opinion by Justice Brister, in which Chief Justice Jefferson, Justice
O'Neill, and Justice Medina joined.
Antitrust. Extraterritorial Relief, Generally, Not Available Anti-Completive Injury.
Five carbonated soft drink bottlers with franchises to distribute Royal Crown Cola in various
territories within the Ark-La-Tex region (a four state region including parts of Arkansas,
Louisiana, and Texas where the three borders meet, and also nearby southeast Oklahoma) sued
The Coca-Cola Company and several distributors of both Coca-Cola and Dr Pepper in the same
area, for using calendar marketing agreements ("CMAs") with retailers to unreasonably restrain
trade, monopolize the market, and attempt and conspire to monopolize the market in violation of
the Texas Free Enterprise and Antitrust Act of 1983 ("TFEAA") and the antitrust laws of the
other three states. The district court rendered judgment on the jury's verdict for the plaintiffs,
awarding damages incurred throughout the region and permanently enjoining, in specified
counties in each of the four states, certain conduct that it determined to be anticompetitive. The
court of appeals affirmed. Held: Reversed. The plaintiffs' claims of injury occurring in other
states are dismissed. Judgment is rendered that the plaintiffs take nothing on their claims of
injury occurring in Texas. Texas courts cannot adjudicate and remedy an anti-competitive injury
occurring in another state, either under the TFEAA, or the law of that state. The TFEAA will not
support extraterritorial relief in the absence of a showing that such relief promotes competition in
Texas or benefits Texas consumers.
Antitrust Laws. Texas Will Not Decide How Another State's Laws Apply To Injuries
Confined To That State.
Texas comis, as a matter of interstate comity, will not decide how another state's antitrust laws
and policies apply to injuries confined to that state. The issue is not whether antitrust claims
involving actors, conduct, and public injury all in another state should be govemed by that state's
law or Texas law. Rather, the issue is whether a Texas court can, or should, enforce law that is
so policy-laden so as to affect the economy of another state. Choice-of-law principles do not
address that issue.
Comity Controls Over Forum Non Conveniens Where Antitrust Issue Involves
Extraterritorial Injury.
While an important consideration for forum non conveniens is the public interest in having a
matter decided where it arises, a concern with jurisdictional overtones, the doctrine tends to
focus on the practicalities of litigating in one place or another, such as the availability of
evidence, the convenience of the parties, and the imposition on the chosen forum's resources.
Here, the parties do not argue that it would have been more convenient to try this case in one of
the other states a few miles away. The issue is not whether it is convenient for a Texas court to
apply another state's antitrust law to an extraterritorial injury, but whether it is proper, as a
matter of comity, for a Texas court to do so. A state's antitrust laws should be applied by its own
courts.

**********************
SIGNIFICANT DECISION
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Alex Sheshunoff Management Services, L.P. v. Johnson, 209 S.W.3d 644
03-1050
10/20/2006
Justice Willett. Chief Justice Jefferson filed a concurring opinion, in which Justice O'Neill and
Justice Medina joined. Justice Wainwright filed a concurring opinion.
Covenant Not To Compete Enforceable If Executory Promise Is Performed By Employer.
Light Decision Is Modified.
Modifying the holding in Light v. Centel Cellular Co .. 883 S.W.2d 642 (Tex. 1994), the Court
holds that an at-will employee, who signs a non-compete covenant, is bound by that agreement
(and the agreement is enforceable) when the employer perfom1s the promises it made in
exchange for the covenant. Thus, a covenant not to compete is not unenforceable under the
Covenants Not to Compete Act solely because the employer's promise is executory when made.
If the agreement becomes enforceable after the agreement is made because the employer
performs his promise under the agreement and a unilateral contract is formed, the covenant is
enforceable if all other requirements under the Act are met.
Covenant Not To Compete In Unilateral Contract May Become Enforceable If Illusory
Promise Is Performed.
The Court disagrees with language in Light v. Centel Cellular Co .. 883 S.W.2d 642 (Tex. 1994),
stating that the Covenants Not to Compete Act requires the agreement containing the cov enant to
be enforceable the instant the agreement is made. The covenant need only be "ancillary to or
part of' the agreement at the time the agreement is made. Accordingly, a unilateral contract
formed when the employer performs a promise that was illusory when made can satisfy the
requirements of the Act.

********* *************
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572
03-0526
I 0/27/2006
Justice Johnson
Preservation Of Error. Appealing Party Must Claim Error In Excluding Bill Of
Exceptions Evidence, When Passing On Admissibility Of Testimony.
Here, the proponents of excluded testimony, that of the expert Elwell, do not claim on appeal
either that the bill of exceptions testimony was improperly excluded or that the trial court erred
in denying their motion to reconsider. Held: The comi of appeals erred in considering testimony
from the bill of exceptions in evaluating the trial couri's exclusion of Elwell's causation
testimony, without having first determined, pursuant to properly assigned error, that the trial
court erred in refusing to admit the testimony and reconsider its decision to exclude Elwell's
causation opinions. The purpose of a bill of exceptions is to allow a pariy to make a record for
appellate review of matters that do not otherwise appear in the record, such as the testimony of
the witness Elwell, that was excluded. Under the record and issues presented, there being no
fundarnental error, the appellate courts may not consider the witness' (Elwell's) testimony from
the bill of exceptions in determining whether the trial court erred in excluding Elwell's causation
testimony.
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Evidence. Trial Court Has Discretion To Exclude Expert Testimony Where Expert's
Processes are Obscured By Evasive Testimony.
A trial court has broad discretion in determining whether expert testimony is admissible. Its
ruling will be reversed only if that discretion is abused. Because the party sponsoring the expert
bears the burden of showing that the expert's testimony is admissible, the burden of presenting
understandable evidence that will persuade the trial court is on the presenting party. When an
expert's "processes" or "methodologies" are obscured or concealed by testimony that is
excessively internally contradictory, non-responsive or evasive, a trial court will not have abused
its discretion in determining that the expert's testimony is not admissible.
Reliability Of Opinion Of Expert Does Not Depend Upon Whether Expert's Conclusion Is
Correct, But Upon Whether Methodology Is Reliable.
In this truck accident case the trial court excluded the expert testimony of Elwell, as to what
caused a post-accident fire that burned the truck and the driver. After excluding the experi
testimony because it was not reliable, the trial court granted summary judgment for the
defendant. Elwell's testimony largely applied his knowledge, training, and experience to the
underlying data and his methodology was not easily tested by objective criteria such as
identifiable scientific formulas. The court of appeals concluded that under such circumstances
the reliability of Elwell's opinion is not properly measured by a Robinson- factor analysis, but
that the "analytical gap" test should be applied. 100 S.W.3d at 555-56. Held: Reversed and
rendered. Elwell's testimony did no more than set out "factors" and "facts" which were
consistent with his opinions, then concluded that the fire began with diesel fuel from the tractor.
The reliability inquiry as to expert testimony does not ask whether the expert's conclusions
appear to be correct; it asks whether the methodology and analysis used to reach those
conclusions is reliable. The trial court was not required to accept his opinions at face value just
because Elwell was experienced in examining post-collision fuel-fed fires. The E.!. du Pont de
Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) factors may not apply when testimony
is not scientific, but, rather, involves technical or other specialized knowledge. Even then,
however, there must be some basis for the opinion to show its reliability. An expert's bare
opinion will not suffice. And, there cannot be too great an analytical gap between the data and
the opinion proffered.
Expert Opinion. Robinson Factors Should Be Considered, When Helpful, Whether
Testimony Is Scientific Or Experience-Based.
A trial court should consider the factors mentioned in Robinson when doing so will be helpful in
determining reliability of an expert's testimony, regardless of whether the testimony is scientific
in nature or experience-based.
No-Evidence Summary Judgment Is A Motion For A Pretrial Directed Verdict.
A summary judgment motion pursuant to Tex. R. Civ. P. 166a(i) is essentially a motion for a
pretrial directed verdict. Once such a motion is filed, the burden shifts to the nonmoving party to
present evidence raising an issue of material fact as to the elements specified in the motion. The
evidence presented by the motion and response is reviewed in the light most favorable to the
party against whom the summary judgment was rendered, crediting evidence favorable to that
party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors
could not.
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Causation.
Expert Testimony Required When Proof Is Beyond A Lay Person's
Understanding.
Proof, other than expert testimony, will constitute some evidence of causation only when a
layperson's general experience and common understanding would enable the layperson to
determine from the evidence, with reasonable probability, the causal relationship between the
event and the condition. Expert testimony is required when an issue involves matters beyond
jurors' common understanding. Whether expert testimony is necessary to prove a matter or
theory is a question of law. A lay juror's general experience and common knowledge do not
extend to whether design defects, such as those alleged in this case, caused releases of diesel fuel
during a rollover accident. Nor would a lay juror's general experience and common knowledge
extend to determining which of the fire triangle's fuel sources, diesel from the tractor or crude
from the tanker, would have first ignited, or the source for the first ignition.
Preservation Of Error. Fundamental Error Defined.
Fundamental error exists in those instances in which error directly and adversely affects the
interest of the public generally, as that interest is declared by the statutes or Constitution of
Texas, or instances in which the record affirmatively and conclusively shows that the court
rendering the judgment was without jurisdiction of the subject matter.

**********************
In re Graco Children's Products, Inc., 210 S.W.3d 598
05-0479
10/27/2006
Per Curiam
Mandamus Will Issue To Limit Overly Broad Discovery Request.
This is an original mandamus proceeding. Galnares's five-week-old son was killed in a roll over
accident. Galnares sued Graco, alleging that defects in the harness clip of the baby's car seat
failed to restrain him in the rollover. Before trial , the Consumer Products Safety Commission
announced a provisional settlement with Graco imposing a $4 million civil penalty for failing to
report defects in more than a dozen products, including high chairs, swings, strollers, toddler
beds, and infant carriers. None of the products had five-point harnesses, such as the one involved
in this case. None mentioned defective harness buckles. Nevertheless, Galnares's attorneys
sought to discover 20 categories of documents, including anything that mentioned or referred to
any of the defects, products, complaints, or people who might have been involved with those
products or the investigation. The trial court ordered Graco to produce two representatives for
deposition as well as all the documents Galnares requested. Held: Writ of mandamus will issue.
In this case, there is no apparent connection between the alleged defect and the discovery
ordered. Generally, the scope of discovery is within the trial court's discretion," but "the trial
court must make an effort to impose reasonable discovery limits. An order that compels overly
broad discovery well outside the bounds of proper discovery is an abuse of discretion for which
mandamus is the proper remedy.

**********************
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Western Steel Co. v. Altenburg, 206 S.W.3d 121
05-0630
10/27/2006
Per Curiam
Appellate Review. Court Of Appeals May Not Disregard Undisputed Fact.
The principal issue in this case concerns the sufficiency of the evidence to support the jury's
finding that a worker injured at a steel company was not the employee, or borrowed employee, of
that company and, thus, was not subject to the company's affirmative defense under the Texas
Workers' Compensation Act. In affirming the trial court's judgment, a divided court of appeals
did not reach the sufficiency issue, concluding instead that the steel company was not entitled to
the affirmative defense because it failed to prove that it had workers' compensation insurance.
169 S.W.3d 347, 353. Held: Reversed and remanded to the court of appeals for further
proceedings. The existence of the steel company's workers' compensation policy was
undisputed. Here, Western raised its workers' compensation insurance as a defense and therefore
bore the burden of proving that it was Altenburg's employer, and that it had coverage at the time
of his injury. The latter issue, however, was not disputed as Altenburg's counsel agreed that
Western had workers' compensation insurance, and even attempted to put that policy in evidence
as plaintiff's exhibit 14B. Moreover, Western asserted, in its appellate brief, that it had workers'
compensation insurance at tbe time of Altenburg's injury, and Altenburg did not dispute that
fact. Despite this, the court of appeals put the matter in issue, affirming tbe trial court's judgment
without reaching the merits of the issues actually raised on appeal. The court of appeals erred in
creating a fact issue where none existed.

**********************
Parker v. Barefield, 206 S.W.3d 119
06-020 1
10/2 7/2006
Per Curiam
Preservation Of Error. Preserve Error When Opportunity To Amend Pleadings Denied.
Motion For New Trial Not Required In This Case.
Special exceptions are appropriate to challenge a plaintiff's failure to state a cause of action. But
once the trial court sustains the special exceptions, if the defect is curable, it must allow the
pleader an opportunity to amend. If the trial court fails to provide this opportunity, the a ggrieved
party must prove that the opportunity to replead was requested and denied to preserYe the error
for review. The record here reflects that the parents not only requested leave to amend, but also
fil ed amended pleadings before the trial com1 dismissed their case. Their request was effectively
denied when the trial court granted special exceptions and dismissed the case. Under these
circumstances, an additional request to amend in a motion for new trial was not necessary to
preserve error.

**********************
Evanston Insurance Co. v. ATOFINA Petrochemicals, Inc., 2006 Tex. LEXIS 439; 49 Tex.
Sup.J. 589
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03-0647
10/27/2006
Justice Green {On Rehearing. Original Opinion rendered on 5/5/2006).
Insurance; Excess. Additional Insurance Provision Of Excess Policy Was Not Broad
Enough To Indemnify The Third Party's Own Negligence.
ATOFINA Petrochemicals, Inc. hired TripleS Industrial Corporation as an independent
contractor to perform maintenance and construction work at ATOFINA's Port Arthur oil
refinery. A Triple S employee was killed at the ATOFINA facility while performing work
pursuant to the independent contractor agreement between ATOFINA and TripleS. The
employee's relatives sued ATOFINA for wrongful death, and received a favorable settlement.
ATOFINA seeks indemnification for its share of the settlement from one of TripleS's insurers,
Evanston Insurance Company. Held: The additional insured provisions of the excess insurance
policy in question [set forth in the opinion] are not broad enough to indemnify the third-party' s
own acts of negligence. The policy language excludes coverage for the additional insured's sole
negligence and, for that reason, it is unnecessary to reach the second question. The case is
remanded for a detem1ination of the underlying liability issues.

**********************
Texas Special Court of Review, Appointed by the Supreme Court.
In re HECHT, 213 S.W.3d 547
A-2006-1.
10/20/2006
Before Justices Fitzgerald, joined by Justice Mazzant. Concurring opinion by Justice McClure
Statements By Justice Hecht In Support Of The Nomination Of Harriet Miers To The U.S.
Supreme Court Did Not Violate The Code Of Judicial Conduct.
Statements made by Justice Hecht of the Texas Supreme Court, supporting the nomination of
Harriet Miers to tl1e Supreme Court of the United States, did not violate the Texas Code of
Judicial Conduct, specifically Canons 28 and 5(2). The majority does not reach the issue of
whether the Texas Code abridges the Petitioner's freedom of speech guaranteed by the First
Amendment to the United States Constitution, because of the conclusion that Justice Hecht did
not violate the Canons.
Judicial Conduct Commission. Burden Of Proof Upon Appeal.
The State Commission on Judicial Conduct determined Petitioner, Justice Hecht, violated
Canons 28 ("A judge shall not lend the prestige of judicial office to advance the private interests
of the judge or others ....") & Canon 5(2) ("A judge shall not authorize the public use of his or her
name endorsing another candidate for any public office .... ") of the Texas Code ofJudicial
Conduct._Petitioner requested de novo review of the public admonition rendered by the
commission. Held: In determining a de novo review of an action by the State Commission on
Judicial Conduct, the commission has the burden of proof and that the standard is by a
preponderance of the evidence, as is applicable to the trial of civil actions generally. Thus , the
commission is required to prove each element of a charge by a preponderance of the evidence.

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Judge's Statement Of Support For Federal Court Nomination Did Not Constitute The
Authorization Of The Use Of His Name To Endorse The Candidate.
The commission's first charge alleges that Petitioner, Justice Hecht, violated Tex. Code Jud.
Conduct Canon 5(2) when he "authorized the public use of his name and title to endorse his
close friend, Harriet Miers, a candidate for public office." Canon 5(2) and provides in part: "A
judge or judicial candidate shall not authorize the public use of his or her name endorsing
another candidate for any public office, except that either may indicate support for a political
party." Held: The commission did not carry its burden to prove by a preponderance of the
evidence that Petitioner authorized the public use of his name endorsing Miers. By using the
word "authorize", the Texas Supreme Court, in adopting Canon 5(2), intended to confine the
restriction of Canon 5(2) to a prohibition of a _judge's authorization of the public use of his or her
name endorsing a candidate. There is no evidence that Justice Hecht "authorized" the media to
use his name publicly endorsing Miers.

Judge's Statement Of Support For Nominee Was Not A Prohibited "Endorsement" Of The
Candidate.
The commission highlights statements by Petitioner that Harriet Miers "would make a good
justice," has a "sterling" character," and her nomination was "good" and "solid." These and other
statements reflect that Petitioner provided descriptions of Miers' background, his perception of
her personal views on various subjects, and his favorable opinions about Miers' nomination to
the bench. Held: Petitioner is not guilty of violating Canon 5(2). The statements by Justice
Hecht do not constitute "endorsing", in that they are no more than support or praise, and they do
not constitute a request or appeal for others to support her nomination. "Endorsing", under the
circumstances of this case means more than support, that is, more than spoken praise.

Judicial Conduct. Advancement Of Private Interests Must Be For A Personal Or
Individual Advantage Or Benefit Gained By Use Of Judicial Office.
The commission's second charge alleges: "[Petitioner] lent the prestige of his judicial office to
advance the private interests of his close friend, Harriet Miers in violation of Canon 2B of the
Texas Code of Judicial Conduct." Canon 2B provides, in relevant part: "A judge shall not lend
the prestige of judicial office to advance the private interests of the judge or others .... " Held:
Petitioner is not guilty of the charge of violating Canon 2B, by lending the prestige of his judicial
office to advance Miers' private interests. Canon 2B is inapplicable to the conduct at issue. The
second charge was limited to the private interests of "others," namely, Miers. A private interest,
pursuant to Canon 2B, is a personal or individual advantage or benefit gained by use of judicial
office. Canon 2B prohibits a judge from using the prestige of judicial office to pursue "private
interests" such as using the position of judge to extort a financial benefit, to retaliate against
another, or to obtain preferential treatment for the judge or another person. Such conduct is
generally perpetrated in secret or in a clandestine manner. The conduct at issue, however, is the
public dissemination of information about Miers in a political context. The record does not even
intimate that Petitioner engaged in any surreptitious conduct. Canon 2B was not intended to
apply and does not apply to the conduct at issue in the political environment described. Under
these circumstances, Petitioner's public statements would not have constituted an advancement
of Miers' "private interests."

**********************

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SIGNIFICANT DECISION
F.F.P. Operating Partners v. Duenez,--- S.W.3d ----, 2006 WL 3110426
02-0381
11/03/2006
Justice Wainwright; Chief Justice Jefferson filed a dissenting opinion. Justice O'Neill filed a
dissenting opinion. [On Motion for Rehearing. The prior opinion of 9/3/2004 is
withdrawn.]

Severance One Alleged To Be Responsible Is Improper. Proportionate Responsibility.
After spending the day cutting firewood, while consuming a case and a half of beer, Ruiz drove
his truck to a convenience store owned by F.F.P. and purchased a twelve-pack of beer. Ruiz then
drove onto a nearby highway, swerved across the center line, hitting the Duenezes' car head-on.
The Duenezes sued F.F.P. and Ruiz. F.F.P. filed a cross-action against Ruiz, naming him as a
responsible third-party and a contribution defendant. The trial court severed F .F .P. 's crossaction against Ruiz. In charging the jury, the court failed to submit questions on the
proportionate responsibility ofRuiz and F.F.P. Held: Reversed and remanded. The trial court
abused its discretion in severing F.F.P.'s claim against Ruiz. The Dram Shop Act does not make
a provider vicariously liable for the conduct of an intoxicated patron. F.F.P. 's claim against Ruiz
is not one for indemnification that could be properly severed; it is one of contribution for Ruiz'a
proportionate share of the damages for which he is responsible. F.F.P.'s claim against Ruiz is
"interwoven with the remaining action": it involves the same facts and issues to be litigated in
the Duenezes' action against F.F.P. Chapter 33 of the Tex. Civ. Prac. & Rem. Code, requires
"[t]he trier of fact, as to each cause of action asserted, [to] determine the percentage of
responsibility ... for [each claimant, defendant, settling person, and responsible third party who
has been joined under Section 33.004] with respect to each person's causing or contributing
cause in any way the harm for which recovery of damages is sought . . . ." This statutory
mandate is not discretionary. Therefore, F.F.P. was entitled to a charge that included a question
to allow the trier of fact in a single trial to determine Ruiz's propmiionate share of responsibility.
Proportionate Responsibility Statute Includes Claims Under The Dram Shop Act.
Smith v. Sewell, 858 S.W.2d 350 (Tex. 1993), holding that the proportionate responsibility
scheme of chapter 33 of the Texas Civil Practice and Remedies Code requires an appmiionment
of responsibility under the Dram Shop Act, chapter 2 of the Alcoholic Beverage Code. Neither
the purpose nor the language of the Act makes a dram shop automatically responsible for all of
the damages caused by an intoxicated patron, regardless of a jury's determination of the dram
shop's propmiion of responsibility. Instead, pursuant to Chapter 33, a dram shop is responsible
for its proportionate share of the damages as determined by a jury. Imposing vicarious liability in
dram-shop cases conflicts with the Proportionate Responsibility Act. By enacting Chapter 33, the
Legislature made the policy decision that an innocent third party, suing the intoxicated patron
and the dram shop, could be burdened with the risk of a joint tortfeasor's insolvency. A
tortfeasor who was found Jess than fifty-one percent responsible does not have to pay the entire
amount of damages, only his or her proportionate share.
Dram Shop Act Effect Upon Poole Decision. Licensee's Negligent Conduct Must Cause P's
Injuries.
In 1987. the Court in El Chico Corp. v. Poole, 732 S.W.2d 306, 314 (Tex. 1987) discarded the
"absolute rule of no liability", and imposed a duty on a dram shop not to serve alcoholic
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beverages to a person it knows, or should know, is intoxicated. The Legislature acted a week
after this Court issued Poole, by enacting the Dram Shop Act. The Act narrowed potential
liability from Poole in several ways. First, it made the Act the exclusive means of pursuing a
dram shop for damages for intoxication. Second, as an element of liability, the patron must be
"obviously intoxicated," not just intoxicated, when the dram shop serves him alcohol. Nowhere
in the legislation was the common law requirement that the claimant prove that the dram shop
proximately caused the injuries eliminated. As under the common law, a dram shop claimant
"must establish that the liquor licensee's negligent conduct proximately caused his injuries."
The Legislature did not abolish the element of proximate cause for a third party to recover from a
dram shop and did not replace it with a form of vicarious liability.
Severance Requirements And Purposes.
A claim is properly severable if (1) the controversy involves more than one cause of action, (2)
the severed claim is one that would be the proper subject of a lawsuit if independently asserted,
and (3) the severed claim is not so interwoven with the remaining action that they involve the
same facts and issues. A voiding prejudice, doing justice, and increasing convenience are the
controlling reasons to allow a severance. See id

**********************
Hoover Slovacek LLP v. Walton, 206 S.W.3d 557
04-1004
11 /3/2006
Chief Justice Jefferson delivered the opinion of the Court. Justice Hecht filed a dissenting
opinion, joined by Justices Medina and Willett. [On Motion for Rehearing. The prior
opinion of 6/30/2006, is withdrawn]
Attorney Hired On A Contingent-Fee Basis May Not Require Present Value Payment If
Discharged Before The Case Is Over.
An attorney hired on a contingent-fee basis may not include in the fee agreement a provision
stating that, in the event the attomey is discharged before completing the representation, the
client must immediately pay a fee equal to the present value of the attorney's interest in the
client's claim. Here, such a termination fee provision penalized the client (Walton) for changing
counsel, granted the attorney (Hoover) an impermissible proprietary interest in Walton's claims,
shifted the risks of the representation almost entirely to Walton's detriment, and subverted
several policies underlying the use of contingent fees . This provision is unconscionable, as a
matter of Jaw, and therefore, unenforceable. The Court remands the case to the trial court to
allow Hoover Slovacek to recover its contingent fee in the interest of justice.

**********************
SIGNIFICANT DECISION
Brookshire Grocery Co. v. Taylor,--- S.W.3d ----, 2006 WL 3456559
03-0408
12/ 112006
Justice Hecht; Concurring Opinion by Justice Johnson; Justice O'Neill filed a dissenting opinion,
in which Justice Medina joined.
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Premises Liability. Proof Of Antecedent Condition That Caused Injury Is Insufficient For
Liability.
This is a slip and fall case. Taylor sued Brookshire Grocery Co. for injuries she suffered to her
knee when she slipped and fell on a piece of partially melted ice on a tile floor in front of a selfservice soft drink dispenser in petitioner's grocery store. A Brookshire employee testified that ice
fell to the floor from the soft drink dispenser on a daily basis, that users were prone to spill ice
from time to time, and that ice on the floor was a hazard to customers and had to be cleaned up
regularly. There were three mats around the front of the dispenser, but they did not completely
cover the tile fl oor, and Taylor slipped where the floor was bare. The Brookshire employee
admitted that more mats could have been used and warning signs posted. The trial court denied
Brookshire's motion for summary judgment, granted partial summary judgment for Taylor on
premises liability, and rendered judgment for Taylor for damages found by the jury. The court of
appeals affirmed. 102 S.W.3d 816 (Tex. App.-Texarkana 2003). Held: Reversed and rendered
for Brookshire. Ordinarily, an unreasonably dangerous condition for which a premises owner
may be liable is the condition at the time and place injury occurs, not some antecedent situation
that produced the condition. The only unreasonably dangerous condition in this case was the ice
on the floor. Brookshire did not have actual knowledge of the ice on which Taylor slipped, and
there is no evidence that the condition had existed long enough, the ice not having fully m elted,
for Brookshire to have constructive notice. No evidence suggests that the soft drink dispenser
was set up in such a way that ice on the floor was a greater danger than one would ordinarily
encounter with such dispensers, or that customers, though prone to spills, were any more prone
around this dispenser. A condition is not unreasonably dangerous simply because it is not
foo lproof.
Alternative: Ordinarily, an unreasonably dangerous condition for which a premises owner
may be liable is the condition at the time and place injury occurs, not some antecedent
situation that produced the condition.

**********************
Bulanek v. WesTTex 66 Pipeline Co., 209 S.W.3d 98
04-00 11
12/01/2006
Per Curiam
Appellate Judgment Remand When Law Changes
In Exxon Pipeline Co. v. Zwahr, 88 S.W.3d 623, 630-3 1 (Tex. 2002), the Supreme Comi
reversed a condenmation award, holding that the testimony of the landowners' expert, Kangieser,
was irrelevant and inadmissible, because he "relied on [the] condemnation in establishing a
separate economic w1it and in assigning a value to that unit," and "failed to apply the before-andafter valuation method, which would have required him to evaluate the [easement] as a
proportionate part of the entire [tract]." Following Zwahr, the court of appeals reversed the
condemnation award in this case, which was partly based on similar valuation testimony by the
same expert, Kangieser, and rendered judgment, based on the valuation evidence offered by the
condemnor. _
S.W.3d _(Tex . App.-Houston [1st Dist.] 2003) (mem. op.). Held: The
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court of appeals judgment 1s modified to remand this case to the trial court for further
proceedings.
Alternative: The most compelling case for a remand in the interest of justice is, as here,
where the Supreme Court overrules existing precedents on which the losing party relied at
trial.

**********************
SIGNIFICANT DECISION
Barker v. Eckman, 213 S.W.3d 306
04-0194
12/1 /2006
Justice Johnson
Bailment. Breach Of Agreement. Accrual Of Cause Of Action Occurs At Time Of Injury.
Limitations.
A cause of action for breach of a bailment agreement can accrue when the agreement is breached
by the bailee's refusal to comply with the bailor's rightful demand for return or disposition ofthe
bailed property, or when the bailee takes action clearly inconsistent with the bailor's contractual
rights. But, the rule that a cause of action may accrue upon such types of breach does not
preclude accrual of a cause of action at an earlier time if the bailee at an earlier time breaches the
agreement. A cause of action accrues when a party has been injured by actions or omissions of
another. Limitations begin to run upon accrual of the cause of action. Bailment contracts do not
differ from contracts in general, to the extent that the rule as to when a party has the right to sue
for breach of an agreement should be altered for them. Thus, a cause of action accrues when a
bailment agreement is breached. The non-breaching party has the right to sue at the time the
agreement is breached and limitations begin to run at that time.
Damage Reduction Requires Remand On Attorney's Fees, If There is Harm.
Subject to harmless error analysis, a reduction in actual damages requires the case to be
remanded for a new trial on attorney's fees. Not every appellate adjustment to the damages
which a jury considered as "results obtained" when making attorney's fees findings will require
reversal. In this case, however, considering both the absolute value of the difference between the
erroneous and correct amounts of damages, and the fact that the correct damages were oneseventh of the erroneous damages, we are not reasonably certain that the jury was not
significantly affected by the error. Accordingly, the trial court's error was harmful. That part of
the judgment awarding attorney's fees to Eckman must be reversed.
Limitations. Discovery Rule. Independent Ground Of Defense. Jury Finding Required.
In some types of cases, the discovery rule may defer accrual of a cause of action until the
plaintiff knew or, by exercising reasonable diligence, should have known of the facts giving rise
to a cause of action. In order for the discovery rule to apply, the nature of the injury must be
inherently undiscoverable and the injury itself must be objectively verifiable. The discovery rule
is an independent ground of defense. A pru1y seeking to benefit from the discovery rule has the
burden of obtaining findings to supp011 its application. Although P-Eckman pleaded the
discovery rule and points to evidence to support his position, he did not request a jury question
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on the issue and did not object to omission of such a question from the charge. In this case, the
trial court was precluded from applying the discovery rule to delay accrual of Eckman's causes
of action absent jury findings because the evidence was not conclusive as to those matters.

**********************
Lexington Insurance Company v. Strayhorn, 209 S.W.3d 83
04-0429
] 2/112006
Justice Brister. Chief Justice Jefferson did not participate in the decision.
Insurance. Surplus Line Carriers Not Acting Through A Surplus Line Agent Must Pay
Tax.
The Comptroller assessed almost $7 million in premium taxes against the insurers for policies
issued in the early 1990s. After the insurers proved that most of their policies were procured
through surplus lines agents licensed in Texas, the Comptroller dropped 70 percent of h er claim,
recognizing that in such cases, the agent, rather than the carrier, was li able for the taxes. But
because the insurers could not prove the same as to the rest of their policies, they paid almost $2
million in premium taxes under protest and sought a refund. Held: The Comptroller is correct.
If a policy is procured from an eligible surplus lines carrier without a licensed surplus lines
agent, the premium tax applicable to unauthorized insurance policies may be collected from the
insurer. This holding is limited to the two conditions stated in the particular exception of Tex.
Ins. Code art. 1.14-1, § 11 (a) (repealed 1999 (i.e., eli gible carrier and licensed agent). As this
provision states that it applies except when those two conditions are met, it clearly does not
apply if they are. While many other violations of the surplus lines statute might occur beyond an
eligible carriers' knowledge or control, the only two it must confirm to avoid the unauthorized
insurance premium tax are its own eligibility and issuance through a li censed agent.
Surplus Line Policy Compliance Is Largely Out Of The Hands Of The Insurer.
It is recognize that whether a surplus lines policy complies with the Code is largely out of a
surplus carrier's hands. Surplus lines policies are initiated by insureds or local agents when they
cannot procure coverage from Texas-licensed insurers. Agents are responsible for getting their
own licenses, as well as properly placing, reporting, and keeping records of all transactions.
Agents are responsible for paying the premium tax after collecting it from insureds. As a result,
surplus lines carriers often will not know whether insurance was available from a licensed
insurer, whether the policy was properly reported, whether proper records were kept, or whether
the premium tax was paid. It is also recognized that the consequences of treating a policy as
unauthorized insurance can be severe. But the difficult fair notice, due process, and business
impact problems are not implicated by this decision.

****** **** ************
Tran v. Macha, --- S.W.3d ----, 2006 WL 3456550
04-1107
12/1/2006
Per Curiam
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Adverse Possession; Joint Use Insufficient. Visible Appropriation Required.
Neighboring relatives shared the use of a driveway for many years, thinking it belonged to one of
them, when in fact it belonged to the other. The court of appeals held this mutual mistake and
mutual use transferred title by adverse possession. 176 S.W.3d 128. Held: The Supreme Court
disagrees with the court of appeals, and reverses and renders judgment for the defendants. Under
Tex. Civ. Prac. & Rem. Code § 16.021(1), adverse possession requires "an actual and visible
appropriation of real property, commenced and continued under a claim of right that is
inconsistent with and is hostile to the claim of another person." The statute requires visible
appropriation; mistaken beliefs about ownership do not transfer title until someone acts on them.
Thus, there must be adverse possession, not just adverse beliefs. The statute requires that such
possession be "inconsistent with" and "hostile to" the claims of all others. Joint use is not
enough, because "possession must be of such character as to indicate unmistakably an assertion
of a claim of exclusive ownership in the occupant." While it is true that "hostile" use does not
require an intention to dispossess the rightful owner, or even know that there is one, there must
be an intention to claim property as one's own to the exclusion of all others. Mere occupancy of
land without any intention to appropriate it will not support the statute of limitations."

**********************
Texas Department of Public Safety v. Alford, 209 S.W.3d 101
05-0164
12/1/2006
Per Curiam
DWI License Suspension Enhanced By Prior Alcohol-Related Enforcement Contact Valid.
This is a driver's license suspension case. Alford held a commercial driver's license but was
driving a non-commercial vehicle when he was arrested for driving while intoxicated. He refused
a breath test. Because he had had an "alcohol-related enforcement contact" (defined in Transp.
Code section 524.001 (3)) two years earlier, his license was administratively suspended for two
years. The trial court reversed the suspension, and the court of appeals affirmed, holding that no
factual basis existed for the suspension. 154 S.W.3d 133 (Tex. App.-Waco 2004). Held:
Reversed and rendered in favor of the Texas Department of Public Safety. A statute allowing
consideration of prior offenses is not an invalid ex post facto law.
DWI. Refusal Of Breath Test. \Varning Required When Not Driving A Commercial
Vehicle, But Holding A Commercial License That Will Be Suspended.
At the time he was stopped for driving while intoxicated, Alford refused a breath test. Although
he was told that refusal to give a breath sample would result in the suspension of a driver's
license, he contends that he should also have been warned that his refusal to give a breath sample
would result in the suspension of his commercial driver's license with no provision for operating
a commercial vehicle for occupational purposes. Held:
This basis for challenging the
suspension is without merit. Transportation Code Section 522.103 requires an officer to warn a
commercial driver of the consequences of refusing to give a breath, blood, or urine specimen, but
section 522.1 02(c) limits the requirement to a driver stopped while driving a commercial vehicle.
Otherwise, the only other warning required is prescribed by section 724.015, which Alford was
g1ven.
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City of Dallas v. Thompson, 210 S.W.3d 601
05-0787
12/1/2006
Per Curiam
Premises Liability. City Cannot Be Liable For Material That Might Deteriorate. Actual
Knowledge of Dangerous Condition Is Required.
Thompson sued the City of Dallas, alleging that while walking through the lobby of Dallas Love
Field airport she tripped on the lip of an improperly secured, metal, expansion-joint coverplate
protruding up from the floor and fell, fracturing her shoulder. The trial court sustained the City's
plea to the jurisdiction based on governmental immunity, concluding that there was no evidence
the City actually knew of the alleged protruding coverplate. The court of appeals reversed. 167
S.W.3d 571 (Tex. App.-Dallas 2005). Held: The judgment ofthe court of appeals is reversed,
and the judgment of the trial court is affinned. Under Tex. Civ. Prac. & Rem. Code § 101.021
the City is immune from suit unless there is eYidence that it actually knew of the alleged
protruding coverplate. The City knew that the coverplate could become loose and raise suddenly,
or over time with ordinary wear and tear, and when it did, City employees would tighten it. After
Thompson fell, the City added a screw to the end of the coverplate where it was protruding. But
the fact that materials deteriorate over time and may become dangerous does not itself create a
dangerous condition, and the actual knowledge required for liability is of the dangerous
condition at the time of the accident, not merely of the possibility that a dangerous condition can
develop over time. Additionally, without evidence showing how long the alleged protrusion had
existed, the proximity of the City employees to the plate is no evidence of actual knowledge.

**********************
Chisholm v. Chisholm, 209 S.W.3d 96
05-0996
12/1/2006
Per Curiam
Agreed Judgment. Consent Must Exist At The Time Of Entry.
In this divorce case, the attorney for the husband offered an alleged agreement of the parti es into
evidence. The wife, Ms. Chisholm, whose ability to speak and und erstand English is disputed,
stated that she didn't understand what had been read into the record. Testifying with the
occasional aid of an interpreter, Ms. Chisholm acknowledged that she and Mr. Chisholm had
reached an agreement on custody, but said they had only discussed, not decided, everything else.
She appeared to assent to the sale of the marital residence, but when asked if she understood the
agreement, still maintained she did not. Ms. Chisholm was never asked whether she understood
or consented to the agreement as a whole. No other evidence was admitted. The trial court
rendered a judgment containing most, but not all, of the recited terms, as well as additional terms
never discussed at trial, such as the division of tax liability. The court of appeals affim1ed. Held:
Reversed and remanded. Even if Ms. Chisholm consented to the custody aiTangements and the
sale of the marital residence, nothing in the record shows she consented to the property division.
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A court cannot render a valid agreed judgment absent consent at the time it is rendered.
Moreover, the judgment was not "in strict or literal compliance" with the terms recited into the
record; the judgment improperly removed and added material terms. When a consent judgment is
rendered without consent or is not in strict compliance with the terms of the agreement, the
judgment must be set aside.

**********************
In the Interest ofH.R.M., 209 S.W.3d 105
06-0270
12/1/2006
Per Curiam
Standard Of Review. Termination Of Parental Rights.
In reviewing tem1ination findings for factual sufficiency, a court of appeals must give due
deference to a jury's factfindings, and should not supplant the jury's judgment with its own. The
court should inquire whether the evidence is such that a factfinder could reasonably form a firm
belief or conviction about the truth of the allegations. If, in light of the entire record, the
disputed evidence that a reasonable factfinder could not have credited in favor of the finding is
so significant that a factfinder could not reasonably have formed a firm belief or conviction, then
the evidence is factually insufficient. In applying this standard, an appellate court' s review must
not be so rigorous that the only factfindings that could withstand review are those established
beyond a reasonable doubt.
Termination Of Parental Rights Because Of Imprisonment.
Effect Of Testimony
Concerning Parole.
Keith was named possessory conservator of his child, H. R. M., with the right to supervised
visitation. Since 112002, Keith has been incarcerated in the Texas Department of Criminal
Justice, serving concurrent sentences for robbery and enticing a child. The jury found that
Keith's parental rights to a child should be terminated. The court of appeals reversed,
concluding that the jury could not have reasonably formed a firm belief that Keith would remain
imprisoned or confined on 7/6/2006 (when the petition to tenninate was filed), because Keith
testified that he would be up for parole each year and that he was participating in a pre-release
program available to inmates within two years of parole. Held: Reversed and remanded to the
court of appeals to consider Keith's factual sufficiency points under the proper standard of
review. Section 161.001(1)(Q) of the Texas Family Code provides that parental rights may be
terminated if the parent has "knowingly engaged in criminal conduct that has resulted in the
parent's: (i) conviction of an offense; and (ii) confinement or imprismm1ent and inability to care
for the child for not less than two years from the date of filing the petition." Evidence of the
availability of parole is relevant to determine whether the parent will be released within two
years. Mere introduction of parole-related evidence, however, does not prevent a factfinder from
forming a firm conviction or belief that the parent will remain incarcerated for at least two years.
The jury was free to disregard Keith's testimony, which was barely more than conjecture. By
basing its decision on Keith's testimony that he had a possibility of parole, the court of appeals
focused on one factor pertinent to deciding whether Keith would remain imprisoned. Rather than
weighing all of the evidence, the court of appeals balanced Keith's testimony against evidence of
two of Keith's convictions and the time remaining on one of his sentences. In so doing, the court
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did not fully account for evidence that supported the jury's verdict, nor did it give due deference
to the jury's factfindings; instead, it merely substituted its judgment for that of the jury.
Attorneys. Standard For Determining Whether Counsel Was Ineffective.
Keith also asserts that he was deprived of effective assistance of counsel in defending against the
motion to terminate his parental rights to H.R.M .. Held: Assuming Keith has a right to effective
assistance of counsel, he has not shown that his counsel was ineffective. Proving ineffective
assistance of counsel requires a showing that ( 1) counsel made errors so serious that counsel was
not functioning as "counsel" guaranteed by the Sixth Amendment, and (2) the deficient
performance prejudiced the defense, which requires showing that counsel's errors were so
serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Taking into
account all of the circumstances surrounding the case, the courts must primarily focus on
whether counsel performed in a reasonably effective manner. Great deference is given to
counsel ' s performance, indulging a strong presumption that counsel's conduct falls within the
wide range of reasonable professional assistance, including the possibility that counsel's actions·
are strategic. Challenged conduct constitutes ineffective assistance only when it is "so
outrageous that no competent attorney would have engaged in it.

**********************
In the Interest of R.R., 209 S. W.3d 112
06-0460
12/112006
Per Curiam
Default Judgment. Conscious Indifference Not Shown By Failure To Answer When
Defendant Believed She Would Be Appointed Counsel.
Rodgers appeals from the termination of her parental rights to her children, R.R. and S.J.S.
Although served with process in jail, Rodgers did not answer, because she believed that she
would be provided with court appointed counsel. Held: Reversed and remanded. The trial court
abused its discretion in refusing to set aside a default judgment and grant her motion for new
trial. Rodgers' failure to answer was not intentional or the result of conscious indifference.
Failing to file an answer intentionally or due to conscious indifference means the defendant knew
it was sued but did not care. Not understanding a citation and then doing nothing following
service does not constitute a mistake of law that is sufficient to meet the Craddock requirements.
But, Rodgers' s affidavit and testimony were not to the effect that her failure to file an answer
was only because she lacked an understanding of the citation. They were to the effect that based
on her prior experiences with the court system and her contacts with CPS, she believed no action
on her part was necessary for her interests to be protected and for an attorney to be appointed for
her without further action on her part. Those experiences, and Rodgers's stated beliefs based on
those experiences, together with the uncontroverted facts as to actions Rodgers took-staying in
regular contact with the caseworker about the progress of the case, writing her children, inquiring
regularly about the children-when taken as true, negate the element of conscious indifference to
proceedings designed to tem1inate the parent-child relationship between Rodgers and her
children.
Default Judgment. Failure To Offer To Reimburse. Indigency.
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If a defendant alleges that granting a new trial will not injure the plaintiff, the burden then shifts
to the plaintiff to present proof of injury. Here, although Rodgers did not offer to reimburse CPS
for its expenses in taking the default judgment, she offered uncontroverted evidence that she was
indigent. CPS presented no evidence that it, or the children, would be injured by any delay
inherent in granting Rodgers a new trial. Nor did CPS offer evidence of expenses it incurred or
evidence that it would be harmed by Rodgers's inability to reimburse any such expenses. In any
event, there would be no equity under these circumstances of allowing Rodgers's failure to offer
to reimburse expenses to the State to preclude the granting of a new trial. Rodgers met the third
Craddock requirement.

**********************
City of Waco, Texas v. Abbott, 209 S.W.3d 104
06-0545
12/1/2006
Per Curiam. Justice Willett did not participate in the decision.
Confidentiality Of Arrest-Warrant Affidavits. Issue Of Whether Warrants May Be
Redacted To Protect The Identities Of Sexual Assault Victims Mooted.
The City of Waco asked the Attorney General whether arrest-warrant affidavits produced
pursuant to Texas Code of Criminal Procedure article 15 .26 may be redacted as confidential,
based on Family Code section 261.201, so that the identities of sexual assault victims remain
classified. The Attorney General issued an opinion concluding that "article 15.26 more
specifically governs the public availability of the submitted arrest warrant affidavits and prevails
over the more general confidentiality provisions in section 261.201," and directing the City to
release the submitted arrest-warrant affidavits in their entirety. Op. Tex. Att'y Gen. N o. GA5059 (2004). The City disagreed with the Attorney General's conclusion and filed a suit for
declaratory judgment and writ of mandamus. The trial court signed a final judgment providing
that "arrest warrant affidavits ... are not confidential under Family Code§ 261.201 because the
affidavits do not constitute documents created pursuant to Family Code ch. 261." The City
appealed, and the court of appeals affirmed the trial court's judgment. Held: The case is
dismissed as moot. The City and the State have now jointly moved to dismiss the case as moot
and settled, and they also ask that we reverse and vacate the court of appeals' judgment and
opinion. Citing article 57.02(h) of the Code of Criminal Procedure, the parties now agree that
"the identities of child victims of sexual assault should be redacted from search-warrant
affidavits released to a requestor under the Public Information Act." The Court expresses no
opinion either on the correctness of the court of appeals' opinion or on whether article 57.02 of
the Texas Code of Criminal Procedure prohibits the disclosure of the identities of child sexual
assault victims in search-warrant affidavits released to a requestor pursuant to the Public
Infonnation Act, Texas Government Code chapter 552.

**********************
Long Trusts v. Griffin,--- S.W.3d ----, 2006 WL 3524376
04-0825
12/8/2006
Per Curiam
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Contracts. Breach By One Party Excuses Performance By Other, Unless Contract
Treated As Continuing.
When one party to a contract commits a material breach of that contract, the other party is
discharged, or excused, from any obligation to perfonn. However, if the non-breaching party
treats the contract as continuing that party is no longer excused from performance.
Oil & Gas Lease Does Not Satisfy The Statute Of Frauds When It Refers Only To The
Lessor's Name, The Survey Name & The Net Acreage.
Oil and gas interests are real property, and thus contracts for the transfer or assignment of oil and
gas interests are subject to the Statute of Frauds. To satisfy the Statute of Frauds, a contract must
furnish within itself, or by reference to some other existing writing, the means or data by which
the property to be conveyed may be identified with reasonable certainty. Extrinsic evidence may
be used only for the purpose of identifying the property with reasonable certainty from the data
contained in the contract, not for the purpose of supplying the location or description of the
property. Providing the lessor's name, the survey name, the term, and the net acreage for each
lease at issue, is insufficient to identify the exact location of a lease with reasonable certainty,
and makes the agreement unenforceable under the Statute of Frauds.

**********************
Land Rover U.K., Ltd. v. Hinojosa, 210 S.W.3d 604
04-0794
12/15/2006
Per Curiam
Guardian Ad Litem May Not Be Compensated For Work Duplicating Work Done By
Plaintiff's Attorney.
A guardian ad litem is not an attorney for the child but an officer appointed by the comi to assist
in protecting the child 's interests when a conflict of interest arises between the child and the
child's guardian or next fri end. As the personal representative of a minor, a guardian ad litem is
required to participate in the case only to the extent necessary to protect the minor's interest and
should not duplicate the work perfonned by the plaintiff' s attorney. lf a guardian ad litem
performs work beyond the scope of this role, such as advising the plaintiff's attorney (e.g., on
trial strategy), such work is non-compensable.
Guardian Ad Litem. Determining Fee. Hourly Fee Should Not Be Enhanced.
An appointed guardian ad litem may request a reasonable fee for services perfonned. The
amount of the guardian ad litem' s fee is left to the trial court's discretion and will not be
overturned absent evidence that the trial court abused its discretion. To determine a reasonable
fee for a guardian ad litem's services, a trial court applies the factors used to determine the
reasonableness of attorney's fees, using factors set out in Tex. Disciplinary R. Prof'l Conduct
1.04(b), reprinted in Tex. Gov' t Code, tit. 2, subtit. G app. A (Tex. State Bar R. ari. X, § 9). A
reasonable hourly rate multiplied by the number of hours spent performing necessary services
within the guardian ad litem's role yields a reasonable fee. Additional sums are rarely
appropriate. Absent exceptional circumstances not present here, a court should not enhance the
fee calculated by multiplying necessary number of hours expended by a reasonable hourly rate.
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In re Texas Department of Family and Protective Services, 210 S.W.3d 609
04-1043
12/15/2006
Justice Wainwright; Dissenting Opinion by Justice O'Neill
Per Curiam (On Motion for Rehearing. The prior opinion of 9/22/2006 is withdrawn).
Mandamus. Accelerated Appeal Adequate Remedy To Challenge Trial Court's Failure to
Timely Decide SAPCR Case.
This is an original mandamus proceeding. Section 263.401 of the Texas Family Code establishes
a deadline for rendition of a final order in suits affecting the parent-child relationship (SAPCRs)
brought by the Texas Department of Family and Protective Services. The court of appeals
granted mandamus relief and ordered the trial court to dismiss the Department's case, because
that deadline had not been observed. .Held: Writ of mandanms is denied. Although the trial
court abused its discretion in failing to dismiss the Department' s case, the parties challenging the
trial court's denial of a motion to dismiss under section 263.401 had an adequate remedy by
accelerated appeal.
Mandamus Will Not Issue When There Is Another Plain, Adequate & Complete Remedy.
Mandamus will not issue when the complaining party has an adequate remedy by appeal.
Although the standard's operative word, "adequate", has no comprehensive definition and
demands a careful balance of jurisprudential considerations that determine when appellate courts
will use original mandamus proceedings to review the actions of lower courts, mandamus will
not issue when the law provides another plain, adequate, and complete remedy.

**********************
SIGNIFICANT DECISION
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299
04-0961
12/22/2006
Justice Brister. Justice Johnson filed a concurring opinion, joining the majority, except for pari
III.B. Justice O' Neill filed a dissenting opinion. Justice Medina did not participate in the
decision.
Fraud Recovery Allowed Even Though Based On Breach Of Contract When Contract
Procured By Fraud.
Chapa bought a Toyota Highlander from Tony Gullo Motors for $30,207.38; they disagree what
model of the car was involved. Chapa sought recovery for breach of contract, fraud, and
violations of the DTPA, but alleged only one injury - delivery of a base-model Highlander,
rather than a Highlander Limited. The jury found in favor of Chapa on breach of contract, fraud,
and the DTP A. They also found a difference in value of the two models of $7,213, mental
anguish damages of $2 1,639, exemplary dan1ages of $250,000, and attorney's fees of $20,000.
The trial court disregarded the mental anguish and exemplary awards, on the ground that
Chapa's only claim was for breach of contract, and disregarded the fee award because Chapa had
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not segregated fees attributable to that claim alone. The court of appeals disagreed with both
conclusions, reinstating all of the awards but reducing exemplary damages to $125,000. Held:
Reversed and remanded to the court of appeals for further proceedings. While Chapa could
certainly plead more than one theory of liability, she could not recover on more than one. Chapa
alleged more than a mere breach of contract; her complaint was not just that Gullo Motors failed
to deliver a Highlander Limited, but that it never intended to do so. A contractual promise made
with no intention of performing may give rise to an action for fraudulent inducement. The duty
not to fraudulently procure a contract arises from the general obligations of law rather than the
contract itself, and may be asserted in tort even if the only damages are economic. Similarly,
while the failure to deliver a Highlander Limited would not alone violate the DTPA, Chapa's
claim was that Gullo Motors represented she would get one model when in fact she was going to
get another. While failure to comply would violate only the contract, the initial misrepresentation
violates the DTP A.
Damages For Breach Of Contract.
For breach of contract, a plaintiff can recover economic damages and attorney's fees , but not
mental anguish or exemplary damages.
Damages For Fraud.
For fraud, a plaintiff can recover economic damages, mental anguish, and exemplary damages,
but not attorney's fees.
Damages For A DTPA Violation.
For a DTPA violation, a plaintiff can recover economic damages, mental anguish, and attorney's
fees, but not additional damages that are beyond three times her economic damages.
Judgment For Most Favorable Theory Supported By Pleadings, Evidence, And Verdict.
Election Of Remedies. One Satisfaction.
When multiple theories of recovery are alleged, a prevailing party is entitled to judgment on the
most favorabl e theory, supported by the pleadings, evidence, and verdict. But, under the "one
satisfaction rule" there can be but one recovery for one injury, and the fact that there may be
more than one theory of liability does not modify this rule.
Fraud; Proof Of Fraudulent Intent. Spoliation And Forgery.
In proving her fraud claim, Chapa testified that she signed a contract listing a Highlander
Limited, but that Gullo Motors personnel "snatched" the contract from her after she signed it,
and must have destroyed it later. She also testified that the signatures on at least four documents
were forged, and that some were forgeries of her deceased husband's signature rather than her
own. Held: In light of the favorable verdict, it must be assumed the jury credited this testimony.
Thus, there was evidence to support a recovery for fraud. Proving that a party had no intention of
perfonning at the time a contract was made is not easy, as intent to defraud is not usually
susceptible to direct proof. Breach alone is no evidence that breach was intended when the
contract was originally made. Similarly, denying that an alleged promise was ever made is not
legally sufficient evidence of fraudulent inducement. Usually, successful claims of fraudulent
inducement have involved confessions by the defendant, or its agents, of the requisite intent. But
while breach alone is no evidence of fraudulent intent, breach combined with "slight
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circumstantial evidence" of fraud 1s enough to support a verdict for fraudulent inducement.
Chapa met that standard here.

Spoliation Of Evidence Some Evidence Of Fraud In Original Contracting Process.
Spoliation of evidence normally supports an inference only that the evidence was unfavorable,
not that it was created ab initio with fraudulent intent. But, as the evidence here was part of the
original contracting process, it provides some circumstantial evidence of fraud in that process.
Supreme Court Jurisdiction Exists To Review Whether Exemplary Damages Are
Constitutionally Excessive.
The Texas Supreme Court has jurisdiction to consider whether exemplary damages are
constitutionally excessive. While the excessiveness of damages, as a factual matter, is final in the
Texas courts of appeals, the constitutionality of exemplary damages is a legal question for the
court. Moreover, the Supreme Court of the United States has found unconstitutional a state
constitutional provision limiting appellate scrutiny of exemplary damages to no-evidence review.
Only by adhering to the practice of reviewing exemplary damages for constitutional (rather than
factual) excessiveness can the Court avoid a similar constitutional conflict. The scope of review
is not whether the exemplary damage award is exorbitant, but whether it is constitutional. In
reviewing the amount of an exemplary damage award for constitutionality, the Court considers
three "guideposts": ( 1) the nature of the defendant' s conduct, (2) the ratio between exemplary
and compensatory dan1ages (few awards exceeding a single-digit ratio will satisfy due process;
four times the amount of compensatory damages might be close to the line of constitutional
impropriety), and (3) the size of civil penalties in comparable cases.
Exemplary Damages Within Legislative Limits May Be Excessive.
By authorizing up to $200,000 in exemplary damages, the Legislature did not necessarily render
that amount constitutionally permissible. While state law governs the amount properl y awarded
as pw1itive damages, that amount is still subj ect to an ultimate fed eral constitutional ch eck for
exorbitancy.
Exemplary Damages May Be Excessive, Even T hrough Procedural Requirement Of T he
Due Process Clause Are Met.
A plaintiff is not entitled to the jury's entire exemplary damage award simply because the tri al
court compli ed with the procedural protections required by the Due Process Clause. The
constitutional limitations on such awards are substantive as well as procedural. Even if the
procedural processes were perfect, to the extent an award is grossly excessive, it furthers no
legitimate purpose and constitutes an arbitrary deprivation of property.
Exemplary Damages. Five E lements To Consider In Determining Reprehensibility Of D's
Conduct. One Factor Insufficient To Support An Award.
[Part III B]. The reprehensibility of Gullo Motors' conduct (the most important ofthe guid eposts
to be considered in determining whether exemplary damages are constitutionally excessive)
depends in turn on five more factors, all but one of which weigh against exemplary damages
here. Gullo Motors' actions did not cause physical rather than economic harm, did not threaten
the health or safety of others, and did not involve repeated acts rather than an isolated incident.
Chapa claims she was financially vulnerable, but the only harm she alleged (that her SUV did
not have Michelin tires and lumbar-support seats) did not threaten financial ruin. Only the last
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factor, that the conduct at issue was deceitful rather than accidental, points in Chapa's favor. The
existence of a single factor "may not be sufficient to sustain a punitive damages award."
Exemplary Damages Exceeding Four Times Compensatory Award Is Excessive
[Part III B] Both parties challenge the court of appeals' judgment reinstating exemplary
damages awarded based on fraud but reducing them to $125,000 -Gullo Motors because the
reinstatement went too far, and Chapa because it did not go far enough. Although the jury
assessed exemplary damages for both fraud and deceptive acts at $250,000, under Tex. Bus. &
Com. Code § 17.50(b)(l) the DTPA caps those damages at $21 ,639 (three times Chapa' s
economic loss of $7,213) (Chapa only requested a jury finding whether Gullo Motors'
committed deceptive acts knowingly, and did not inquire whether Gullo Motors' acted
intentionally) while under Tex. Civ. Prac. & Rem. Code § 41.008(b), the fraud award is capped
at $200,000. Held: The exemplary damages are excessive. The court of appeals' award exceeds
four times Chapa's total compensatory award, and is more than 17 times her economic damages.
Further, the jury's award of precisely $21,639 for mental anguish - exactly three times her
economic damages of $7,213 - supports the U.S. Supreme Court's observation that emotional
damages themselves often include a punitive element. Exemplary damages are not susceptible to
precise calculation, but this is still five to ten times more than comparable civil penalties, or what
Chapa could recover under the consumer-friendly DTPA. Pushing exemplary dan1ages to the
absolute constitutional limit in a case like this leaves no room for greater punishment in cases
involving death, grievous physical injury, financial ruin, or actions that endanger a large segment
of the public. On this record, Gullo Motors' conduct merited exemplary damages, but the amount
assessed by the court of appeals exceeds constitutional limits.
Remititur Can Be Suggested By Court Of Appeals, But Not By The Texas Supreme Court.
The Texas Rules of Appellate Procedure provide for remittitur orders by the courts of appeals,
but make no similar provision for this Court. While this Court may review the constitutionality
of an exemplary damages award, the amount of a suggested remittitur is in the first instance a
matter for the courts of appeals. Accordingly, having found that the amount awarded by the court
of appe als exceeds the constitutional limitations on exemplary damages, this case is remanded to
the court of appeals for a determination of a constitutionally permissible remittitur.
Attorney's Fees Must Be Segregated. Sterling Modified.
Plaintiff sought recovery for breach of contract, fraud, and violation of the DTPA. The jury
found a reasonable and necessary attorney' s fee "in this case" was $20,000. Held: Reversed and
remanded as to attorney's fees. Attorney's fees were not recoverable for Chapa' s fraud claim,
and thus had to be excluded. Absent a contract or statute, trial courts do not have inherent
authority to require a losing party to pay the prevailing party's fees . As a result, fee claimants
have always been required to segregate fees between claims for which they are recoverable and
claims for which they are not. In Stewart Title Guaranty Co. v. Sterling, 822 S.W.2d 1, 8 (Tex.
1991 ), while affirming the general rule: "the plaintiff is required to show that [attorney's] fees
were incurred while suing the defendant sought to be charged with the fees on a claim which
allows recovery of such fees," the Court recognized an "exception to this duty to segregate arises
when the attorney' s fees rendered are in connection with claims arising out of the same
transaction and are so inte1Telated that their "prosecution or defense entails proof or denial of
essentially the same facts." Therefore, when the causes of action involved in the suit are
dependent upon the same set of facts or circumstances and thus are "intertwined to the point of
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being inseparable," the party suing for attorney's fees may recover the entire amount covering all
claims. Sterling is modified to the extent that if any attorney's fees relate solely to a claim for
which such fees are unrecoverable, a claimant must segregate recoverable from unrecoverable
fees . Intertwined facts do not make tort fees recoverable; it is only when discrete legal services
advance both a recoverable and unrecoverable claim that they are so intertwined that they need
not be segregated. This standard does not require more precise proof for attorney's fees than for
any other claims or expenses. Here, Chapa's attorneys did not have to keep separate time records
when they drafted the fraud, contract, or DTP A paragraphs of her petition; an opinion would
have sufficed stating that, for example, 95-percent of their drafting time would have been
necessary even if there had been no fraud claim. The court of appeals could then have applied
standard factual and legal sufficiency review to the jury's verdict based on that evidence.
,

Appellate Judgment When Attorneys Fees Are Not Segregated.
Unsegregated attorney's fees for the entire case are some evidence of what the segregated
an1ount should be; thus, in such a case, the cause must be remanded.

**********************
SIGNIFICANT DECISION
Brainard v. Trinity Universal Insurance Co.,--- S.W.3d ----, 2006 WL 3 751572
04-0537
12/22/2006
Chief Justice Jefferson. Justice O'Neill and Justice Johnson did not participate in the decision.
Insurance; Uninsured/Underinsured Motorist Covers Prejudgment Interest.
Uninsured/underinsured motorist (UIM) insurance covers prejudgment interest that the
w1derinsured motorist would owe the insured in tort liability.
Insurance; Uninsured/Underinsured Motorist Applying Settlement And PIP Credits.
Under the "declining principal" formula, each credit for settlement and personal injury protection
(PIP) credits is applied to the interest calculation according to the date on which it was received.
Insurance: Uninsured/Underinsured; Recovery Of Attorney's Fees.
The insured may recover attorney's fees in an action for uninsured/underinsured insurance
coverage, under Tex. Civ. Prac. & Rem. Code Chapter 38, only if the insurer does not tender
UIM benefits within thirty days after the trial court signs a judgment establishing the liability and
underinsured status of the other motorist.

**********************
State Farm Mutual Automobile Insurance Co. v, Nickerson,--- S.W.3d ----, 2006 WL
3754824
04-0427
12/22/2006
Chief Justice Jefferson; Justice O'Neill.

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Insurance; Underinsured. Attorneys Fees Recoverable Unless UIM Benefits Tendered
Within 30 Days Of Judgment, Establishing Liability For UIM Benefits.
The only is sue on appeal to this Court is whether the attorney's fee award was proper. As in
Brainard v. Trinity Universal Insurance Company, also issued today, the Court held that an
insured may recover attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.002(3), only if the
insurer does not tender the UIM benefits within thirty days after the trial court signs a judgment
establishing liability and underinsured status of the other motorist. In this case, State Farm had
no contractual duty to pay benefits until the trial court rendered judgment for Nickerson.

**********************
State Farm Mutual Automobile Insurance Co. v. Norris,--- S.W.3d ----,2006 WL 375158
04-0514
12/22/2006
Chief Justice Jefferson. Justice O'Neill did not participate in the decision.
Insurance; Underinsured. Prejudgment Interest Is Recoverable; Attorney's Fees Are Not.
Calculation Of Prejudgment Interest.
In this action on an underinsured motorist (UIM) the trial court refused to award prejudgment
interest or attorney's fees to the prevailing plaintiff-insured. The court of appeals reversed on
both issues. Held: Reversed and rendered as to attorney's fees, and reversed and remanded as to
prejudgment interest. The UIM policy allows an insured to recover the difference between the
negligent driver's insurance policy limit and the full amount of damages, including prejudgment
interest, determined at trial, but not attorney's fees. The "declining principal" formula is used to
calculate prejudgment interest in a UIM case. Under this approach, the trial court considers the
date on which the insured received each payment. However, the record in this case does not
reflect the dates of either the PIP or the settlement payments. Because prejudgment interest
cannot be calculated until those dates are established, the case is remanded to the trial court for
that purpose.

******* ***************
Meyer v. WMCO-GP, LLC, 211 S.W.3d 302
04-0252
12/22/2006
Justice Hecht. Justice O'Neill filed a dissenting opinion.
Arbitration May Be Required Of Person In Related Disputes. Equitable Estoppel.
A motor vehicle manufacturer exercised its right of first refusal to acquire its dealer's business
and transferred th~right to its assignee, preempting the dealer's agreement to sell the business to
another. The jilted buyer sued the manufacturer and its assignee for interfering with the proposed
contract of sale. Although the defendants had no contract with the jilted buyer, they demanded
arbitration based on the buyer's agreement to arbitrate disputes with the dealer. The trial court
refused to compel arbitration, and the court of appeals affirmed. 126 S.W.3d 313, 320 (Tex.
App.-Beaumont 2004). Held: Reversed and remanded. A person who has agreed to arbitrate
disputes with one party may in some cases be required to arbitrate related disputes with others.
This suit by a signatory to an arbitration agreement against a non-signatory is such a case. A
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person who seeks by his claim to derive a direct benefit from the contract containing the
arbitration provision may be equitably estopped from refusing arbitration. When a party's right
to recover and its damages depend on the agreement containing the arbitration provision, the
party is relying on the agreement for its claims.

Arbitration. Trial Court Has No Discretion On Application of Doctrine Of Equitable
Estoppel.
A trial court does not have discretion to refuse to apply equitable estoppel to compel arbitration.
A trial court has no 'discretion' in determining what the law is or applying the law to the facts.

**********************
In re Ford Motor Company, 211 S.W.3d 295
05-0696
12/22/2006
Per Curiam
Protective Order E nforced Even Though Information Was Disclosed By Another Court.
This is an original mandamus proceeding. Relator Ford Motor Company and intervenor Volvo
Car Corporation seek a writ of mandamus to vacate a trial court order that declared certain Volvo
documents non-confidential, under a provision in a stipulated protective order. The protective
order (which closely tracks the language of Federal Rule of Civil Procedure 26(c)(7)), however,
excluded certain documents from its scope, including "documents that have been submitted to
any government entity without request for confidential treatment." The documents in question
were inadvertently disclosed by the clerk of a court in another case, in Florida, and were found
by an expert for the plaintiff in this case. With this level of public disclosure, the Plaintiffs, the
Marroquins. asserted that Ford could not plausibly assert trade secrecy. The Texas trial court
Held:
granted the Marroquins' Motion to Deem Certain Documents Non-Confidential.
Mandamus will issue, because the trial court's order permitting di sclo sure contradicted the plain
meaning of the parties' agreement. It was not enough that someone submitted these documents
to the government, which published them. Either Ford or Volvo (or their agents) must submit
the documents to a government agency without requesting confidential treatment for the
exception to apply. They did not. Also, it is immaterial whether the information contained in the
documents constituted trade secrets. By its terms, the agreed protective order covers Volvo
documents "which contain trade secrets and other confidential research, development and
commercial information." Finally, the disclosure by the court clerk did not destroy the right to
confidentiality. The priYilege to maintain a document's confidentiality belongs to the document
owner, not to the trial court. Under Texas law, discovery privileges are wai\'ed by voluntary
disclosure by the holder of the privilege. Mistaken document production by a court employee in
violation of a court-signed protective order cannot constitute a party 's voluntary waiver of
confidentiality.

****** *************** *
Via Net v. TIG Insurance Co., 21 1 S.W.3d 310
05-0785
12/22/2006
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Per Curiam
Limitations. Discovery Rule Inapplicable To Action For Failure To Provide Insurance
Coverage. Contracts.
Nine months after being assured it had been added as an additional insured to a vendor's
insurance policy, Safety Lights was denied coverage. After an unsuccessful suit on the policy,
Safety Lights sued its vendor for breaching the promise to provide additional-insured coverage.
That suit was filed less than four years after coverage was denied, but more than four years after
the promise to provide coverage was breached. The trial court held the claim was barred, but the
court of appeals reversed. Held: Reversed and rendered. The discovery rule is inapplicable to
defer accrual of the claim asserted here. Normally a cause of action accrues when a wrongful act
causes some legal injury. But accrual may be deferred if the nature of the injury incurred is
inherently undiscoverable and the evidence of injury is objectively verifiable. A failure to add a
third pm1y as an additional insured is objectively verifiable. Whether the failure to add is
inherently undiscoverable is a legal question to be decided on a categorical rather than casespecific basis; the focus is on whether a type of injury, rather than a particular injury, was
discoverable. It is well-settled law that a breach of contract claim accrues when the contract is
breached. The Court does not hold that the discovery rule can never apply to breach of contract
claims. The Court's focus is on types of injury, not causes of action. Some contract breaches may
be inherently undiscoverable and objectively verifiable. But those cases should be rare, as
diligent contracting parties should generally discover any breach during the relatively long fouryear limitations period provided for such claims.
Summary Judgment Motion, Based On Limitations, Need Not Negate Discovery Rule
Unless The Plaintiff Has Pleaded It.
A defendant's motion for summary judgment, based on limitations, need not negate the
discovery rule unless the plaintiff has pleaded it. Defendants are not required to guess what
unpleaded claims might apply and negate them.
Summary Judgment. Issue Raised For The First Time In The Response. Options.
When Safety Lights, the plaintiff (non-movant) asserted the discovery rule for the first time in its
summary judgment response, Via Net (the movant) bad two choices: it could object that the
discovery rule had not been pleaded, or it could respond on the merits and try the issue by
consent. By choosing the latter course, the discovery rule's applicability was placed squarely
before the trial and appellate courts.

**********************
Hernandez v. National Restoration Technologies, L.L.C., 211 S.W.3d 309
06-0454
12/22/2006
Per Curiam
Notices Of Appeal. When And Where They Are To Be Filed.
Under Tex. R. App. P. 25.1 (a) an appeal is perfected when written notice is filed with the trial
court clerk. Under Tex. R. App. P. 25.1 (e) notice is also to be filed with the appropriate court of
appeals. When a motion for new trial has been filed, as here, Tex. R. App. P. 26.1 (a)(l) requires
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that a notice of appeal must be filed with the trial court clerk within ninety days of the signing of
the judgment.. When a filing deadline falls on a holiday or a day in which the district clerk's
office is closed or inaccessible, the filing deadline is automatically extended until the end of the
next day when the district clerk's office is open and accessible.

**** ******************
Hallco Texas, Inc. v. McMullen County,--- S.W.3d ----, 2006 WL 3825298
02-1176
12/29/2006
Justice O'Neill. Justice Hecht delivered a dissenting opinion, joined by Justice Medina and
Justice Willett. Justice Green did not participate in the decision.
Res Judicata Bars Second Suit On Claims That Could Have Been Litigated In Prior
Action.
Hallco Texas, Inc. contends McMullen County's denial of a variance from an ordinance
prohibiting the location of landfills within three miles of a water-supply reservoir effected an
unconstitutional taking of property. Hal leo purchased the land in 199 1, with the intent to operate
a Class I nonhazardous industrial waste landfill, a use requiring a permit from the Texas
Commission on Environmental Quality. In June 1993, the County enacted the ordinance at issue
here, pursuant to section 364.012 ofthe Health and Safety Code. McMullen County's ordinance
prohibits the disposal of solid waste within three miles of Choke Canyon Lake, but allows
disposal in any other area of the county so long as applicable state requirements are met. In June
1995, Hallco challenged the County's ordinance by filing suit in the federal district court; it also
filed a parallel proceeding in state court. The federal court dismissed Halko' s substantive dueprocess and equal-protection claims with prejudice, holding that the ordinance was rationally
related to a legitimate govenm1ental purpose. The court dismissed without prejudice Hallco ' s
claim alleging an unconstitutional taking in viola6on of the Fifth Amendment to the United
States Constitution, holding that to ripen its federal takings claim Hallco first had to seek
compensation through procedures the state had established. A week after the federal court's
dismissal, the County moved for summary judgment in the state court action. The trial court
granted the County's motion as to all claims without specifying the grounds. ("Hallco f'). The
comi of appeals affirmed the trial court's judgment, holding that "Hallco 's takings claim must
fail because [Hal leo] did not have a cognizable property interest of which the government could
deprive [it]." More than two years after the court of appeals' judgment and nearly six years after
the ordinance was enacted, Hallco submitted a request for a variance to the McMullen County
Commissioners Comi. Hallco offered no changes to its proposed landfill. The County took no
action on Halko's request. Hallco filed the lawsuit underlying this appeal. Hallco expressly
disavowed any challenge to the ordinance's validity. Instead, Hallco alleged that by denying its
variance request the County had taken, damaged, or destroyed Hallco's properiy for public use in
violation of article I, section 17 of the Texas Constitution. Hallco also alleged that the County
had taken its property without just compensation in violation of the Fifth Amendment to the
United States Constitution. Hallco purported to reserve the federal takings claim for prosecution
in the federal courts. The trial court again granted the County's motion for summary judgment,
and the court of appeals affirmed. 94 S.W.3d 735 (" Hallco IF'). Held: Affirmed. The doctrine
of res judicata, or claim preclusion, bars a second action by parties and their privies on matters
actually litigated in a previous suit, as well as claims which, through the exercise of diligence,
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could have been litigated in a prior suit. The transactional approach is applied to res judicata,
which requires claims arising out of the same subject matter to be litigated in a single lawsuit.
The facts relevant to Hallco's present takings claim - the County ordinance's wholesale
prohibition, the manner in which it would be applied, and the nature of the damage suffered were all evident in the prior suit, and Hal leo's requested variance proposed no new or different
application. There was nothing to prevent Hallco from asserting in the prior litigation that the
County targeted its property unlawfully, and the final judgment in Hal/co I bars that claim here.
Ripeness. State Claim May Be Ripe Even Though Federal Claim Is Not.
The ripeness of the state claim for inverse condemnation cannot be measured by the ripeness of
Hallco's federal claim since a federal claim is not ripe until state court proceedings have been
concluded; if federal and state claims ripen at the same time, then neither could ever get started.

**********************
SIGNFICANT DECISION
Bed, Bath & Beyond, Inc. v. Urista, 211 S.W.3d 753
04-0332
12/29/2006
Justice Green. Justice Brister filed a concurring opinion, in which Justice Hecht and Justice
Willett joined. Justice Medina filed a dissenting opinion, in which Chief Justice Jefferson
joined.
Appellate Review. Jury Charge. Harm Not Presumed When Erroneous Instruction On
Unavoidable Accident Submitted With Single Liability Issue.
While shopping at a Bed, Bath & Beyond, Inc. ("BBB") store, Urista claims he was hit on the
head and knocked unconscious by plastic trash cans that fell from a twelve-foot-high shelf.
According to Urista's wife, a BBB employee on a ladder in the adjacent aisle on the other side of
the shelf was attempting to retri.eve merchandise with a broom when the trash cans fell. The trial
court submitted the case to the jury in a broad-fonn charge. The liability question asked: "Did
the negligence, if any, of Bed, Bath, and Beyond, Inc. proximately cause the occurrence in
question?" Over Urista's objection, the trial court also included an "unavoidable accident"
instruction: BBB concedes that this instruction should not have been submitted. In a ten-to-two
verdict, the jury answered "NO" to the liability question. The trial court rendered a take-nothing
judgment in favor of BBB. Relying on Crown L{fe Ins. Co. v. Casteel, 22 S.W.3 d 378, 390 (Tex.
2000), the court of appeals reversed and remanded, 132 S.W.3d 517, 523. Held: Reversed and
remanded to the comi of appeals for consideration of additional points. Assuming, as conceded
by BBB, the unavoidable accident instruction should not have been submitted, the Supreme
Court finds that submitting the instruction did not constitute harmful error. When, as here, the
broad-form questions submitted a single liability theory (negligence) to the jury, Casteel's
multiple-liability-theory analysis does not apply. Moreover, when a defensive theory is
submitted through an inferential rebuttal instruction, Casteel 's solution of departing from broadform submission and instead employing granulated submission cannot apply. Unlike alternate
theories of liability and damage elements, inferential rebuttal issues cannot be submitted in the
jury charge as separate questions and instead must be presented through jury instructions.
Therefore, although harm can be presumed when meaningful appellate review is precluded
because valid and invalid liability theories or dan1age elements are commingled, the Court is not
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persuaded that harm must likewise be presumed when proper jury questions are submitted along
with improper inferential rebuttal instructions. An incorrect jury instruction requires reversal
only if it was reasonably calculated to and probably did cause the rendition of an improper
judgment. To determine whether the instruction probably caused an improper judgment, the
Court examines the entire record. A review of the record in this case reveals at least two reasons
why the Court cannot conclude that the unavoidable accident instruction probably resulted in an
improper judgment. First, the inclusion of an improper unavoidable accident instruction is
ordinarily harmless and indeed can serve an explanatory role. Second, it is reasonable to
conclude that Urista failed to carry his burden of proof.
Harmless Error. Cross-Examination, If Sufficient To Discredit The Plaintiffs Claims,
May Provide Basis For Finding Error To Be Harmless.
When, as here, the defendant's cross-examination provides a sufficient basis for discrediting the
plaintiffs claims, supporting the jury's verdict in its favor, we cannot conclude that the
instruction probably caused the jury to render an improper verdict. Nor is the lack of a
unanimous verdict in a case with an erroneously submitted instruction always an indicator of
harmful error, although it might be in another case.

**********************
Ben Bolt-Palito Blanco Consolidated lSD v. Texas Political Subdivisions Property/Casualty
Joint Self-Insurance Fund, 212 S.W.3d 320
05-0340
12/29/2006
Justice O'Neill. Justice Willett delivered an opinion, joined by Justice Hecht. Justice Green did
not participate in the decision.
Limited Exception To Governmental Immunity Allows Suit Against Political Subdivision
Fund.
In the suit underlying this appeal, fund member Ben Bolt-Palito Blanco Consolidated
Independent School District ("Ben Bolt") sued the Texas Political Subdivisions
Property/Casualty Joint Self-Insurance Fund (the "Fund") after the Fund denied a claim for
benefits under its policy. The Fund asserted immunity in a plea to the jurisdiction, which the trial
court denied. The court of appeals reversed, concluding that the Fund is immune from suit. 163
S.W.3d 172, 176-77. Held: Reversed and remanded. While the Fund possesses governmental
immunity, after the court of appeals rendered its judgment, the Legislature enacted Tex Loc.
Gov't Code §§ 271.151-.160, creating a limited immunity wai ver for breach of contract claims
against governmental entities. The statutory waiver applies to this insurance-coverage dispute.

**********************
United Services Automobile Association v. Brite,--- S.W.3d ----, 2007 WL 283826
05-0132
2/2/2007
Justice Medina; Justice Green did not participate in the decision.
Jurisdiction Of County Courts At Law.
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County courts at law are courts of limited jurisdiction and many, including the county court at
law in this case, lack jurisdiction over a "matter in controversy" that exceeds $100,000. The
jurisdictional statute for county courts at law values the matter in controversy on the amount of
damages "alleged" by the plaintiff, not on the amount the plaintiff is likely to recover.

Jurisdiction; Amount In Controversy Includes The Damages Plaintiff Seeks To Recover.
Plaintiff-Brite was employed by Defendant-United Services Automobile Association (USAA)
from 1977 to 2001. In 2001, USAA undertook a reduction in force and terminated Brite's
employment. Brite subsequently filed an age-discrimination lawsuit against USAA, alleging that
he was selected for a layoff because of his age. Brite filed his suit in the Bexar County Court at
Law No.7, which has, under Tex. Gov't Code§ 25.0003(c)(l), jurisdiction concurrent with that
of the district court in "civil cases in which the matter in controversy exceeds $500 but does not
exceed $100,000, excluding interest, statutory or punitive damages and penalties, and attorney's
fees and costs, as alleged on the face of the petition ...."In his original petition, Brite pleaded
that his damages exceeded the statutory minimum of $500, but he did not plead that his damages
were below the $100,000 maximum limits. Although he did not specify amounts, his pleadings
did seek the recovery of back pay, front pay, punitive damages, and attorney's fees.
Subsequently, Brite amended his petition to state that he sought damages of $1.6 million. He did
not specify how much of that amount consisted of punitive damages or attorney's fees, but in a
later discovery response, Brite admitted that "his lost wages and benefits in the future, until age
65, total approximately $1 ,000,000.00." USAA filed a plea to the jurisdiction, asserting that the
county court at law lacked jurisdiction because Brite sought damages greater than $100,000. The
trial court denied the plea, and, after a jury trial , the court ultimately awarded Brite an amount in
excess of $100,000. The court of appeals affirmed the trial court's judgment. 161 S.W.3d 566.
Held: Reversed and dismissed for want of jurisdiction, because the amount in controversy at the
time Brite filed suit exceeded $100,000, thus depriving the county court at law of jurisdiction
over the matter. We agree. The value of this case at filing (commonly refened to as the amount
in controversy) exceeded the court's $100,000 jurisdictional limit. The amount in controversy
includes the total amount of the damages the plaintiff seeks to recover, and does not exclude
damages that are uncetiain in duration or amount. For purposes of determining the "amount in
controversy," the question is not what a plaintiff will recover or is likely to recover; it is what the
plaintiff seeks to recover."
Jurisdiction. Plead Or Prove Case Within Jurisdiction Of The Court.
Texas Rule of Civil Procedure 47(b) requires that an original pleading "contain ... the statement
that damages sought are within the jurisdictional limits of the court." The general rule is that the
allegations of the plaintiffs petition must state facts which affirmatively show the jurisdiction of
the court in which the action is brought." Plaintiffs petition did not comply with these
authorities, because it fai.led to assert that the matter in controversy was within the monetary
limitations of the county court at law's jurisdiction. His petition was therefore defective. He
could have remedied this defect, however, by proving jurisdiction in the trial court, as his
original petition did not affim1atively demonstrate an absence of jurisdiction. Even if the
jurisdictional amount is never established by pleading, in fact, a plaintiff may recover if
jurisdiction is proved at trial..
Jurisdiction Of County Courts At Law. Amount In Controversy Includes The Damages
Plaintiff Seeks To Recover.
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County courts at law are courts oflimited jurisdiction and many, including the county court at
law in this case, lack jurisdiction over a "matter in controversy" that exceeds $100,000. The
jurisdictional statute for county courts at law values the matter in controversy on the amount of
damages "alleged" by the plaintiff, not on the amount the plaintiff is likely to recover. The
amount in controversy does not exclude damages that are uncertain in duration or amount. For
purposes of determining the "amount in controversy," the question is not what a plaintiff will
recover or is likely to recover; it is what the plaintiff seeks to recover.
Jurisdiction. Plead Or Prove Case Within Jurisdiction Of The Court.
Texas Rule of Civil Procedure 47(b) requires that an original pleading "contain ... the statement
that damages sought are within the jurisdictional limits of the court." The general rule is that the
allegations of the plaintiffs petition must state facts which affirmatively show the jurisdiction of
the court in which the action is brought." In this case, Plaintiffs petition did not comply with
these authorities, because it failed to assert that the matter in controversy was within the
monetary limitations of the county court at Jaw' s jurisdiction. His petition was therefore
defective. He could have remedied this defect, however, by proving jurisdiction in the trial court,
as his original petition did not affirmatively demonstrate an absence of jurisdiction. Even if the
jurisdictional amount is never established by pleading, in fact, a plaintiff may recover if
jurisdiction is proved at trial.

**********************
City of San Antonio v. TPLP Office Park Properties,--- S.W.3d ----, 2007 WL 431048.
04-1130
2/9/2007
Per Curiam. Justice Green did not participate in the decision.
Streets. City Decision To Block Access From Private Driveway Upheld.
In 1999, the City of San Antonio began taking action to block access from a private business
driveway to a city street. The owner of the private driveway filed suit seeking a declaratory
judgment and injunction preventing the City from blocking the driveway's access to the street.
The trial court granted relief and the comi of appeals affirmed. Held: Reversed and remanded.
the City's decision and actions to close access between the private driveway and the street
constituted a proper exercise of the City's police power; the City is not estopped from closing the
access, and closing the access would not constitute a compensable taking.
Standard Of Review When City Limits Access Is Rational Relationship To Proper Exercise
Of Police Power.
The standard of review applicable to the City's ordinances and other actions in limiting, or
seeking to limit, vehicular access to Freiling Drive via the driveway is whether the actions
rationally could have been related to a proper exercise of its police power. Under the rational
relationship standard, the City's decisions must be upheld if evidence in the record shows it to be
at least fairly debatable that the decisions were rationally related to a legitimate governmental
interest. Whether TPLP ' s suit is labeled a challenge to the ordinance, or to the City's past and
future actions in attempting to close the access to Freiling as an exercise of its police power, the
standard that should be used by courts to determine the claims is the same: deferential review.
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Diminished Access To A Driveway Is Not A Compensable Taking.
Diminished access to property, because of the closing of a driveway, is not compensable if
suitable access remains. Closing an access point and merely causing diversion of traffic or
circuity of travel does not result in a compensable taking. A reduction in lease rates that results
merely from traffic being required to travel a more circuitous route to access Park Ten is not
compensable. That a new road configuration that was more hazardous and resulted in increased
traffic that made tuming more difficult is evidence of inconvenience, but did not constitute
material and substantial impairment of access.

**********************
CASE OF FIRST IMPRESSION
Norris v. Thomas,--- S.W.3d ----, 2007 WL 428075
05-0476
2/0/2007
Justice Willett. Dissenting opinion by Justice O'Neill, joined by Justice Wainwright, Justice
Brister, and Justice Medina.
Motorized Water Vessel Not Attached To Land Cannot Be A Homestead.
This case is presented as a certified question from the U. S. Court of Appeals for the Fifth
Circuit. Held: Under the facts presented in this case, and given the Constitution's explicit realtybased language, a motorized waterborne vessel, used as a primary residence, and otherwise
fulfilling all of the requirements of a homestead, except attachment to land, does not qualify for
the homestead exemption under A1iicle 16, §§ 50 and 51 of the Texas Constitution." The proper
test for whether a residence attains homestead status is whether the attachment to land is
sufficient to make the personal property a permanent part of the realty. Significantly, both the
Constitution and the Property Code use the word "thereon" when describing any protected
homestead improvements; the Constitution also stipulates "on the land," which is plainly not the
same as "in the water."
Homestead. Requirements for Qualification.
In order to qualify as a homestead, a residence must rest on the land and have a requisite degree
of physical permanency, immobility, and attachment to fi xed realty. A dock-based umbilical
cord providing water, electricity, and phone service may help make a boat habitable, but the
attachment to land is too slight to warrant homestead protection.
Homestead. A House Can Be A Homestead As In Improvement To Unowned Land.
A house can be a homestead even if the owner has no ownership interest in the land. The term
"improvements" as protected by mi icle XVI, section 51 includes the residence itself. The term
"improvements" to real property is distinguished from mere personalty. Personalty does not
constitute an improvement until it is mmexed to realty. There can be no improvement without
annexation to realty, and until personalty is annexed to realty, it by definition emmet be an
improvement. Not only that, but the annexed object cannot be deemed an improvement to land
unless it is intended to be a permanent addition to the realty. Homestead protection turns not on
who owns the underlying land, but on the degree to which the residence "thereon" or "on the
land" is attached to it.
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**********************
State Farm Life Insurance Co. v. Martinez,--- S.W.3d ----,2007 WL 431043
05-0812
2/9/2007
Justice Brister
Interpleader Filed Late Allows Recovery Of Penalties For Late Period, But Not After
Interpleader Is Filed.
In this dispute over life insurance proceeds, involving competing claims to the proceeds, the
insurer interplead the proceeds of the policy, but did so 12 days after the time required by the
"prompt payment statute" {current version at Tex. Ins. Code §§ 542.051-.061). Held: Once
State Farm interpleaded the entire policy proceeds, it owed nothing more on the policy. Thus, the
courts below erred in awarding penalty interest and attorney's fees for more than those 12 days.
When insurers receive notice of adverse bona fide claims, Texas law does not require them to act
as judge and jury, or to pay one claim and risk liability on the other. Instead, if a reasonable
doubt exists in law or fact as to whom the proceeds belong, an insurer should interplead them
and let the courts decide. Every reasonable doubt should be resolved in favor of the stakeholder's
right to interplead. If an insurer promptly interpleads policy proceeds, it crumot be subjected to
statutory penalties for delayed payment, even if it missed the statutory deadlines. But in 1991,
the Legislature changed the prompt payment statute, raising the penalty interest to 18 percent a11d
the deadline for payment (in most cases) to 60 days. The Legislature's 1991 changes to the
Insurance Code suggest the courts should not continue imposing a different deadline. But
nothing in those changes suggests that statutory penalties should apply after interpleader occurs.
Assessing penalty interest and attorney's fees after an interpleader is filed would punish insurers
for doing what Texas law encourages. Indeed, the more difficult and protracted the dispute
between rival claimants (and thus the more justified the interpleader), the larger those penalties
would grow.
Interpleader Halts Prejudgment Interest.
The interpleader of funds, by depositing those funds with the registry of the court, halts
prejudgment interest. Once funds are deposited into the registry, they are held in trust for the
litigru1t who establishes his right thereto, and interest accrues to its ultimate owner. Allowing the
prevailing beneficiary to recover interest on proceeds in the registry and interest from State Farm
at the same time would constitute a double recovery. Accordingly, the trial com1 erred in
assessing prejudgment interest against State Farm after the interpleader.

**********************
Wachovia Bank of Delaware v. Gilliam,--- S.W.3d ----, 2007 WL 427977
05 -0903
2/09/2007
Per Curiam
Substituted Service Of Citation In Default Judgment, Appealed By Restricted Appeal,
Must Show, On Face Of Record Service Forwarded.

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In a restricted appeal from a default judgment, based on substituted service, the face of the record
must show that service was forwarded to a statutorily required address. No presumptions are
made in favor of valid service in a restricted appeal from a default judgment. Thus, for a default
judgment to survive a restricted appeal, the face of the record must reflect that service was
forwarded to the address required by statute.

**********************
Jack in the Box, Inc. v. Skiles,--- S.W.3d ----, 2007 WL 431045
05-0911
2/9/2007
Per Curiam
Employer Owes No duty To Warn Employee Of Danger Known To Employee.
This is a negligence action by an employee against an employer not covered by worker's
compensation insurance. Skiles was employed by Jack in the Box as a tractor-trailer driver to
transport and deliver food product to various Jack in the Box restaurants. The company trailers
are equipped with automatic lift gates that assist drivers in loading and unloading food product.
The drivers are instructed that if they encounter any problems with the lift gate, they should call
the company's independent service center and report the malfunction. A maintenance person is
then sent to make repairs. Skiles arrived for a delivery at a Jack in the Box restaurant and
attempted to lower the lift gate, but the gate would not operate. Skiles told the restaurant
manager about the problem, but the manager responded that the restaurant was out of hamburger
meat and it was the "lunch rush." Skiles reported the problem to a supervisor. Skiles obtained the
ladder from the restaurant and used it to climb over the lift gate and jump into the back of the
trailer. Skiles said that when he landed on the floor of the trailer, both of his knees "popped" and
were injured. The trial court entered summary judgment for Jack in the Box. The court of
appeals reversed and remanded. Held: Reversed and rendered. While the duty of ordinary care
generally requires an employer to warn an employee of the hazards of employment and provide
needed safety or equipment or assistance, the employer owes no duty to warn of hazards that are
commonly known or already appreciated by the employee. In this case, any dangers associated
with using a ladder to jump over a lift gate were obvious to Skiles.

**********************
SIGNIFICANT DECISION
County of Dallas v. Wiland,--- S.W.3d ----, 2007 WL 489983
04-0247
2116/2007
Justice Hecht. Justice Brister, joined by Chief Justice Jefferson, Justice O'Neill, and Justice
Medina, concurring in part and dissenting in part.

Employment. Deputy Constables Covered By Civil Service Manual Have A Property
Interest In Continued Employment And A Right To Procedural Due Process.
Three deputy constables covered by Dallas County's civil service system contend that the
County tem1inated their employment without just cause and without a hearing, thereby denying
them substantive and procedural due process in violation of the Fourteenth Amendment to the
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United States Constitution, and entitling them to actual damages under the Civil Rights Act of
1871 (referred as "section 1983"). The Dallas Commissioners Court established a civil service
system on July 17, 2001 - and therefore for purposes of this case - the system was set out in
the Dallas County Administrative Policies and Procedures Manual ("the Manual"). From 1990
to 2003, deputy constables were Category "C" employees covered by the system under section
2.00. Section 1.00 of the Manual states that the Dallas County civil service system "is a
systematic method of appointing employees to office and promoting them for competency and
performance." On the inside of the cover page is the following statement: "Nothing in the
[Manual] is to be construed as a contract of employment or a provision guaranteeing the specific
term or tenure of employment." The rules governing dismissal state in pertinent part: "4.21 An
employee may be dismissed from the County without prior notice for just cause including, but
not limited to [The rules here list no ground for dismissal other than for just causes.] The trial
court granted partial summary judgment for the deputies on liability issues and rendered
judgment on the jury' s findings of actual damages, and the court of appeals affirmed. 124
S.W.3d 390 Held: Reversed and remanded to the trial court. Because the trial court erred in
holding that the absence of just cause had been established as a matter of law, the deputies' claim
for denial of procedural due process must be remanded for further proceedings. The system's
covered employees cannot be discharged without just cause, and thus they have a property
interest in continued employment. The deputies were discharged without the hearing before the
civil service commission promised by system rules to determine whether just cause existed, and
thus they were denied procedural due process.
Civil Service System Procedure Does Not Create A Property Right Interest And Does Not
Alter The Employee's "At-Will" Status.
The County's civil service system clearly provides covered employees important procedures for
hearing and deciding grievances, but the entitlement to procedure alone does not create a
property interest; moreover, the entitlement to such procedures, without more, does not alter an
employee's at-will status, thereby creating a property interest in continued employment. The
County can rightly be faulted for not being clearer on the subject in the Manual. But, a limitation
on at-will employment cannot simply be inferred. On balance, such a limitation in the Manual is
more than an inference, and the fair import of the Manual's provisions, taken as a whole, is that
covered employees are not to be discharged without being given a reason they can contest. This
expectation in continued employment except for just cause, whil e not a contract right, as the
Manual expressly disavows, is nevertheless a property interest of which employees may n ot be
deprived without due process.
Due Process Denial Remedy Is Due Process. Damages Follow Only If Dismissal Was
Without Cause.
The deputies were entitled under the Manual to have a hearing on their grievances, and since
they were denied such a hearing, they were denied procedural due process. In general the remedy
for a denial of due process is due process. For having been denied procedural due process, the
deputies could recover damages for injuries resulting from the loss of their employment, as they
requested, only if just cause did not exist for their termination. Whether there was cause to
dismiss the deputies has never been established, because the County has taken the position
throughout that the deputies were never dismissed at all. The County has consistently contended
that the deputies' terms of employment automatically expired when Constable Dupree took
office, and he refused to administer the oath of office to them. If just cause existed for the
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deputies' dismissal, the County's refusal to give them a hearing on the issue could not have
caused damages "resulting from ... dismissal from ... employment". The existence of just cause
has never been established. The deputies' recovery of damages " resulting from ... dismissal
from ... employment" must therefore be reversed because it has not been shown on this record
that these damages were caused by the County's denial of procedural due process. But the case
must be remanded for the deputies to advance that contention if they choose to do so. If there
was just cause to dismiss the deputies, the deputies can recover only damages directly resulting
from the denial of a hearing, if any can be proved, or, absent such proof, nominal damages. Only
if there was no just cause to dismiss the deputies can they recover the damages resulting from the
dismissal. The Court expresses no opinion on how the burden of proof of just cause for dismissal
should be assigned.
Continued Employment Of Government Employees Not Protected By Substantive Due
Process.
A government employee's interest in continued employment is not protected by substantive due
process, and even if it were, the County's decision to discharge the constables was not arbitrary
and capricious so as to violate substantive due process. When a plaintiff challenges the validity
of a legislative act, substantive due process typically demands that the act be rationally related to
some legitimate government purpose. In contrast, when a plaintiff challenges a non-legislative
state action (such as an adverse employment decision), the courts .look, as a threshold matter, to
whether the property interest being deprived is "fundamental" under the Constitution. If it is,
then substantive due process protects the plaintiff from arbitrary or irrational deprivation,
regardless of the adequacy ofprocedures used. Ifthe interest is not "fundamental," however, the
governmental action is entirely outside the ambit of substantive process and will be upheld, so
long as the state satisfies the requirements of procedural due process. The deputies have no
interest in continued employment protected by substantive due process. Even if such an interest
were protected, the United States Supreme Court has firmly held that executive actions- which
individual employment decisions are- violate substantive due process, only if they are wholly
arbitrary. The County believed, based on legal advice and the court of appeals' opinion in
Arrington v. County of Dallas, 792 S.W.2d 468, 471 (Tex. App.-Dallas 1990, writ denied), that
the deputies' terms had automatically expired. The County was in error about the legal effect of
the expiration of a constable's term of office, but its decisions were nevertheless reasoned and
reasonable. They were certainly not arbitrary, nor did they remotely approach the conscienceshocking required for a substantive due process violation.

**********************
County of DaiJas v. Walton,--- S.W.3d ----, 2007 WL 490032
04-0631
2116/2007
Justice Hecht. Justice Brister, joined by Chief Justice Jefferson, Justice O'Neill, and Justice
Medina, concurring.
Civil Service Status Cannot Be Changed Unilaterally By H iring Contract.
This is a companion case to County of Dallas v. Wiland, summarized today, which involved the
same claims by three other Dallas County deputy constables. Unlike the deputy constables in
Wiland, Walton was required to sign the following statement when sworn in by the hiring
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constable: "I acknowledge, by accepting appointment as a Deputy Constable under Constable
Burl Jernigan, that my appointment is at the will and pleasure of the Constable, and may be
rescinded at any time. I further acknowledge that the term of my appointment is concurrent with
that of the Constable, and if not rescinded will expire automatically at the expiration of the
Constable's term of office." Held: The civil service statute does not contemplate that individual
constables can unilaterally remove otherwise-covered deputies from the civil service system. The
statement was, thus, of no effect. Walton makes the identical substantive due process claim as
the deputies in Wiland, and for the reasons there explained, that claim fails. But his procedural
due process claim is valid because, like the deputies in Wiland, he was denied a hearing before
the civil service commission on his grievance.

**********************
Hood v. Wal-Mart Stores, Inc.,--- S.W.3d ----, 2007 WL
05-0902
2/23/2007
Per Curiam

54974~

Appeal Notice. Affidavit Of Indigence. No Dismissal For Formal Defect. Contest Must Be
Sustained Before Dismissal.
Hood, appearing pro se, filed an assault and battery action against Wal-Mrui. The trial couti
entered summary judgment for the defendants. When Hood filed his timely notice of appeal in
the court of appeals, he failed to pay the filing fee, and had not yet filed an affidavit of indigence.
The court of appeals granted an additional ten days to pay. Hood did not pay the fee, but he filed
his affidavit of indigence with the court of appeals within the ten day window. Ultimately, the
court of appeals denied Hood's motion to proceed in forma pauperis under Texas Rule of
Appellate Procedure 20.1 (c) (1 ), which requires the petitioner to file an affidavit of indigence
with or before his notice of appeal. The court of appeals dismissed Hood's action. Held:
Reversed and remanded. Under Texas Rule of Appellate Procedure 44.3, a court of appeals may
not dismiss an action due to a formal defect or irregul arity without first allowing the petitioner
reasonable time to cure the error. Hood's affidavit discharged the filing fee requirement unless a
contest to it is sustained.

**********************
In re Bank One, N. A.,--- S.W.3d ----, 2007 WL 549744
06-0093
2/23/2007
Per Curian1
Mandamus Available When Arbitration Is Denied In Action Governed By Federal
Arbitration Act.
When a trial court denies a motion to compel arbitration ru1d the underlying contract is govemed
by the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, mandamus relief is appropriate.
Arbitration Agreement Incorporated By Reference On Account Signature Card.
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The arbitration agreement in this case was incorporated by reference on the account signature
card signed by J&S Air's representatives. Signature cards are valid contracts under Texas law.
Documents incorporated by reference in the signature card are part of the contract. The signature
card here incorporated by reference the arbitration agreement, stating "[t]he Customer
acknowledges receipt of the Bank's Account Rules and Regulations including all applicable
inserts and agrees to be bound by the agreements and terms contained therein." It is presumed
that a party who signs a contract knows its contents. Therefore, the arbitration agreement is
valid.
Arbitration Required In Dispute Over Bank's Cashing Of Forged Checks.
All doubts are resolved as to scope of an arbitration case, in favor of finding coverage. The
agreement between Bank One and J &S Air covered disputes "arising from or relating in any way
to this Agreement or [the Customer' s] Account." The dispute between Bank One and J&S Air
arose from checks that were allegedly forged and cashed from J&S Air's accounts. Therefore,
the dispute falls within the scope of the arbitration agreement.
Arbitration Not Waived By Moving To Set Aside A Default Judgment.
Bank One did not waive its right to arbitration by moving to set aside a default judgment. There
is a strong presumption against waiver, and where it exists, waiver must be intentional. A party
waives an arbitration clause when it substantially invokes the judicial process to the other party's
detriment. Bank One's motion to set aside the default judgment and request a new trial did not
substantially invoke the judicial process. "This Court has repeatedly rejected waiver when parties
participated much more extensively than Bank One in judicial proceedings. * * * Bank One's
actions do not counter the strong presumption against waiver."

**********************
City of Houston v. Williams,--- S.W.3d ----, 2007 WL 549745
06-0159
2/23/2007
Per Curiam (Justice O'Neill did not pmiicipate in the decision).
Standing. Firefighters Have No Standing To Seek A Declaratory Judgment Against City
Concerning Back Pay.
A group of 321 retired firefighters sued the City of Houston to recover amounts deducted from
payments they received upon termination of employment. State Jaw requires that Houston
firefighters receive Jump-sum payments of accumulated vacation and sick leave upon
termination. The firefighters allege the City improperly calculated these payments, and also
improperly deducted alleged overpayments of overtime, and seek a declaratory judgment. The
trial court denied the City ' s jurisdictional plea asserting governmental immunity, and the court of
appeals affirmed. 183 S.W.3d 409, 414 (Tex. App.- Houston [14th Dist.] 2005). Held: Reversed
and remanded. The court of appeals held the City had no immunity from the firefighters' request
for declaratory relief. But private parties cannot circumvent the State's sovereign immunity from
suit by characterizing a suit for money damages, such as a contract dispute, as a declaratoryjudgment claim. The only injury the retired firefighters allege has already occurred, leaving them
with only one plausible remedy - an award of money damages. As they assert no right to
payments from the City in the future, they lack standing to seek a statutory interpretation on
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behalf of those currently employed. During the pendency of this appeal, the Legislature enacted
sections 271.151-.160 of the Local Government Code, waiving immunity from suit for certain
claims against cities and other governmental entities. The firefighters assert their claims fall
within these provisions. Therefore, it is preferable to remand this claim to the trial court to
consider in the first instance.

**********************
SIGNIFICANT DECISION
Citizens Insurance Company of America v. Daccach, --- S.W.3d ----, 2007 WL 623799
03-0505
3/22/2007
Justice Wainwright delivered the opinion of a unanimous Court as to sections I-III and V -VIII;
the opinion of the Court as to sections IV -A, IV -C, and IV -D, joined by Justices Hecht,
O'Neill, Green, Johnson, and Willett; and a concurring opinion as to section IV -B, joined by
Justice Johnson. Chief Justice Jefferson filed a concurring opinion, joined by Justices Brister
and Medina.
Class Actions. State Security Law Controls Violation Under Any Conflict Of Law
Principle.
[Section IV]. This is an interlocutory appeal. Daccach, the class's representative, alleges that
Citizens sold securities from Texas to nonresidents without complying with the registration
requirements of the Texas Securities Act. The trial court certified the class. The court of appeals
modified the class definition, and affirmed the trial court's certification of the class. 105 S.W.3d
712. Held: Reversed and remanded. A claim based on the failure to register with the Texas
Securities Board before offering or selling securiti es from Texas does not present a classic
conflict of laws problem. The trial court cmTectly concluded that the Texas Securities Act
applies to this suit. Because the class lawsuit only alleges Citizens' failure to register with the
Texas Securities Board before allegedly offering and selling securities from Texas, Section 12
governs under any conflict of law principles that might apply. Daccach pleads a single cause of
action on behalf of the class: Citizens violated section 12 of Tex. Civ. Stat. arts. 581-12A, 58133A(l ), the Texas Securities Act, that requires dealers in Texas who offer or sell securities to
register with the Texas Securities Board. The Texas Securities Act directs the application of
Texas law notwithstanding the presumed interests of the forums in which the plaintiffs reside.
Citizens was doing business in Texas and physically present in Texas when it sold the CICA
policies to class members. Absent unique statutory circumstances, trial courts must conduct the
extensive choice of law analysis described in Compaq Computer Corp. v. Lapray, 135 S.W.3d
657, 672 (Tex. 2004), before making a certificati on decision. However, a claimed failure to
register as a dealer before offering or selling securities is different. Securities offered or sold in
multiple states may be subject to the registration requirements of each state in which an offer or
sale is made. The Court recognizes that violations of other securities laws, such as those based on
misrepresentation, may well be subject to a different analysis.
Class Actions. Fail Safe Class Binds Only The Defendant.
[Section II] A fail-safe class is a class bound only by a judgment for the plaintiffs. In such a case,
a determination that the defendant is not liable obviates the class, thereby precluding the

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proposed class members from being bound by the judgment. That outcome was rejected, because
Tex. R. Civ. P. 42(b) was never intended to be an exception to res judicata.

Class Actions. State Security Law Controls Violation Under The Restatement Approach.
[Section IV (B)-Concurring opinion]. In the alternative, the registration requirement in the
Texas Securities Act contains a statutory directive compelling the application of Texas law. The
first question is whether the particular substantive law is subject to a clear choice of law
determination by the Legislature of the forum state. If there is such a directive, a court examines
the directive in light of constitutional limitations that might preclude application of the local law.
If answering the first two inquiries does not resolve the issue, a court can apply the forum law if
it does not conflict with the laws of other interested jurisdictions. If variation in the laws of
several interested jurisdictions creates a conflict, then courts will apply the significant
relationship guidelines of Section 6(2) and any other specific sections applicable to the
substantive law at issue. Under this hierarchy, the factors in section 6(2) of the Restatement do
not come into play if there is statutory guidance that the law is intended to govern the
transaction. Here, the Texas Legislature intended section 12 of the Texas Securities Act to
prohibit the unregistered sale of securities from Texas, even when the purchasers are
nonresidents.
Class Actions. State Security Law Does Not Violate Constitutional Limitations on State
Regulation of Extraterritorial Conduct
[Section IV (C)]. In certifying this class action suit, in which it was alleged that Ds sold
securities from Texas to nonresidents, without complying with the registration requirements of
the Texas Securities Act, the courts must determine whether the Texas statute meets
constitutional requirements before it is applied to extraterritorial conduct. Due process requires
that the application of Texas law be neither arbitrary nor fundamentally unfair. Held: The trial
comt did not abuse its discretion in determining that there was a significant aggregation of
contacts with Texas to apply Article 581-33(A) constitutionally. Because Texas has a significant
aggregation of contacts to the business activities alleged to have occurred within the state, the
application of Section 12 to this lawsuit falls comfortably within the constitutional constraints on
the extraterritorial application of Texas laws. Making this determination does not resolve
whether Citizens actually "sold" a "security" from Texas within the meaning of the Texas
Securities Act; that is a matter to be determined on tl1e merits.
Class Actions. Adequacy Of Representation. Potential Conflict With Other Jurisdictions.
Claim Abandonment.
[Section IV (D)]. The comis must ensure that the class representative is adequately representing
the rights of absent class members in all aspects of the class litigation. The class representative's
burden in this regard stems from the Due Process Clause, which demands that the named
plaintiff at all times adequately represent the interests of the absent class members. In a
worldwide case like this, where a class representative abandons, or chooses not to allege certain
claims, including claims that may exist in other jurisdictions, the potential effect of claim
preclusion on absent class members raises concerns about the prerequisites of predominance,
superiority, typicality, and adequacy. If other jurisdictions' laws could apply to the transaction,
even though only a Texas violation is alleged, the class members who could assert those causes
of action may be baned from later pursuing them in a different lawsuit. The laws of other
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interested jurisdictions may provide certain class members more beneficial remedies or causes of
action arising from the same subject matter of the lawsuit.

Class Actions. Which Jurisdiction's Substantive Law Governs Is A Question Of Law.
[Section IV]. In passing on the certification of a class action involving parties in other states, a
court may not accept "on faith" a party's assertion that no variations in other jurisdictions laws
exist. The court must determine which substantive law governs the case. Which jurisdiction's
substantive law governs is ultimately a question of law for the court.
Res Judicata Precludes Litigation Of Claims That Could Have Been Litigated In A Prior
Suit.
[Section V(A)). Generally, res judicata prevents a plaintiff from abandoning claims and
subsequently asserting them when the claims could have been litigated in the prior suit. For res
judicata to apply, there must be: (1) a prior final judgment on the merits by a court of competent
jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on
the same claims that were raised or could have been raised in the first action. The doctrine seeks
to bring an end to litigation, prevent vexatious litigation, maintain stability of court decisions,
promote judicial economy, and prevent double recovery. Under the transactional approach
followed in Texas, a subsequent suit is barred if it arises out of the same subject matter as the
prior suit, and that subject matter could have been litigated in the prior suit. A final judgment on
an action extinguishes the right to bring suit on the transaction, or series of connected
transactions, out of which the action arose." Determining the scope of the "subject matter" or
"transaction" of the prior suit requires an analysis of the factual matters that make up the gist of
the complaint, without regard to the form of action. This should be done pragmatically, giving
weight to such considerations as whether the facts are related in time, space, origin, or
motivation, whether they form a convenient trial w1it, and whether their treatment as a trial unit
conforms to the parties' expectations or business understanding or usage. Any cause of action
which arises out of those same facts should, if practicable, be litigated in the same lawsuit.
Res Judicata Applies To Class Actions.
[Section V(B)]. Class certification under Rule 42 was never meant to be an exception to res
judicata, or to exist in some sort of alternative universe outside the normal jurisprudence of
Texas. Basic principles of res judicata apply to class actions just as they do to any other form of
litigation. Accordingly, claims not pursued, or abandoned, in a class suit seeking damages that
proceeds to final judgment on other claims arising from the same subject matter are subject to
preclusion from relitigation by the principles of res judicata. Having given putative class
members the opportunity to choose, however, the courts will ordinarily hold class actions to the
san1e res judicata standards as other forms of liti gation, including enforcing the preclusion on
abandoned claims which could have been litigated in the suit.
Res Judicata Principles Apply In Class Actions, Barring Abandoned Claims.
[Section V(C)]. While Tex. R. Civ. P. 42(d) allows a trial court to consider cetiifying a class
whose representative has abandoned or split claims, this does not except a final judgment in such
a class action from the principles of res judicata. Class members may be precluded from
asserting those claims in subsequent individual litigation if they arose from the same transaction
or subject matter and could have been litigated in the prior suit. Aggregation of claims in an
appropriate class action is a more efficient ·way to resolve numerous disputes at once. However,
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efficiency is defeated if the tactfully structured dispute that is finally resolved in class suits may
be relitigated in the same or other forums. Any restrictions that class action requirements place
on a trial court's ability to entertain specific theories of recovery in a class suit arise solely
because of the choice to seek class certification. By this choice class members may put at risk
their ability to litigate certain other claims not suitable for class treatment. The Court cautions
that Rule 42(d) cannot be used to manufacture compliance with the certification prerequisites.
Additionally, the splitting or abandoning of certain claims may affect certification of the class in
other ways.
Class Actions. Res Judicata. Notice Requirements. Effects On Certification.
[Section V(D)].To have preclusive effect a prior judgment cannot be "constitutionally infirm."
Due process requires that the named plaintiff at all times adequately represent the interests of the
absent class members, as well as notice plus an opportunity to be heard and participate in the
litigation. Due process may require that class members be given notice of the class action and an
opportunity to opt out and preserve claims that a class representative has abandoned. Thus, Tex.
R. Civ. P. 42 requires the trial court, as part of its rigorous analysis, to consider the risk that a
judgment in the class action may preclude subsequent litigation of claims not alleged,
abandoned, or split from the class action. The trial court abuses its discretion if it fails to
consider the preclusive effect of a judgment on abandoned claims, as res judicata could
undermine the adequacy of representation requirement.
Class Action Certification Must Not Allow Post-Judgment Exclusion.
[Section VI]. In certifying this class action, the trial court specificall y excluded from the
Class "all persons who, within the time period establi shed by the judgment, do not
surrender their CICA Policies and take the other actions required to obtain the relief
awarded by the Court." Held; Because the exclusionary language of the trial court's
class definition partially defined the class by actions taken after the judgment, it failed to
create a class that could be objectively ascertained before judgment. Although the
contours of the class did not rest on whether the CICA policies qualify as securities or
whether the poli cies were in fact sold or offered for sale from Texas, and thus was not
invalid as a traditional "fail-safe" class, it did however allow putative class members to
essentially opt out of the suit after the judgment and thus escape the binding effect of the
judgment. This class definition was improper. However, the court of appeals revised the
definition, substituting the word "remedy" for the word "Class" in the definition's last
sentence. Specifically excluded from the remedy are all persons who, within the time
period established by the judgment, do not surrender their CICA Policies and take the
other actions required to obtain the relief awarded by the Court. This corrects the
defective class definition. This sentence simply states what is true is any case: a litigant,
or in this case, a class member, may elect not to exercise a right to a remedy rendered in a
judgment. Instead, it reiterates the obvious fact that even in the event of a favorable
judgment, a class member may elect to keep his or her policy and decline the remedy.
Regardless, the class member would still be bound by the judgment.

**********************
SIGNIFICANT DECISION
Moki Mac River Expeditions v. Drugg, --- S.W.3d ----, 2007 WL 623805
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04-0432
3/2/2007
Justice O'Neill. Justice Johnson filed a dissenting opinion, in which Justice Medina joined.
Specific Personal Jurisdiction. Liability Must Arise From, Or Relate To, The Forum
Contacts.
P-Betsy Drugg alleges she was induced to send Andy on the rafting trip in Arizona by Moki
Mac's direct solicitation, which included statements made in Moki Mac's brochures and in the
release it sent to the Druggs. Andy was killed while on the trip. The trial court denied the special
appearance of Moki Mac, Utah-based river-rafting outfitter. The court of appeals affirmed.
Held: Reversed and remanded to the court of appeals to consider Ps' general jurisdiction claim.
Claims arising out of personal injury that occurs outside the forum do not arise from or relate to a
defendant's forum advertising. The plaintiffs death on a Grand Canyon hiking trail did not arise
from or relate to its in-state commercial activities so as to establish specific jurisdiction over it in
Texas. Purposeful availment alone will not support an exercise of specific jurisdiction. Specificjurisdiction analysis has two co-equal components. For specific-jurisdiction purposes, purposeful
availment has no jurisdictional relevance, unless the defendant's liability arises from or relates to
the forum contacts. For a nonresident defendant's forum contacts to support an exercise of
specific jurisdiction, there must be a "substantial connection" between those contacts and the
operative facts of the litigation. The operative facts of the Druggs' suit concern principally the
guides' conduct of the hiking expedition and whether they exercised reasonable care in
supervising Andy. The events on the trail and the guides' supervision of the hike will be the
focus of the trial. In sum, the alleged misrepresentation is not the subject matter of the case nor is
it related to the operative facts of the negligence action.
Long-Arm Jurisdiction. Burden Of Pleading; Burden Of Negating.
The plaintiff bears the initial burden of pleading sufficient allegations to invoke jurisd iction
under the Texas long-arm statute. The nonresident defendant then assumes the burden of
negating all bases of jurisdiction in tho se allegations. Because the question of a court's exercise
of personal jurisdiction over a nonresident defendant is one of law, a trial court's detennination
of a special appearance is reviewed de novo, on appeal..
Long-Arm Statute Requires Purposeful Availment Of State. Three Part Test.
The Texas long-arm statute's broad doing-business language allows the statute to reach as far as
the federal constitutional requirements of due process will allow. Thus, the requirements of the
Texas long-arm statute are satisfied if an assertion of jurisdiction accords with federal dueprocess limitations. Federal due-process requirements limit a state's power to assert personal
jurisdiction over a nonresident defendant. Personal jurisdiction is proper when the nonresident
defendant has established minimum contacts with the forum state, and the exercise of jurisdiction
comports with traditional notions of fair play and substantial justice. Minimum contacts are
sufficient for personal jurisdiction when the nonresident defendant "purposefully avails" itself of
the privilege of conducting activities within the forum State, thus invoking the benefits and
protections of its laws. There are three parts to a "purposeful availment" inquiry. First, only the
defendant's contacts with the forum are relevant, not the unilateral activity of another party or a
third person. Second, the contacts relied upon must be purposeful rather than random, fortuitous,
or attenuated. Thus, sellers who 'reach out beyond one state and create continuing relationships
and obligations with citizens 'Of another state' are subject to the jurisdiction of the latter in suits
Tex. Sup. Ct .Summaries- © L. Wayne Scott - St. Mary's Alumni Reunion Program 2007
Page 101 of 118- 3/27/2007

based on their activities. Finally, the defendant must seek some benefit, advantage or profit by
'availing' itself of the jurisdiction. In contrast, a defendant may purposefully avoid a particular
forum by structuring its transactions in such a way as to neither profit from the forum's laws nor
subject itself to jurisdiction there.
Long-Arm Statute. Forum-State Contacts. General or Specific Jurisdiction.
A nonresident defendant's forum-state contacts may give rise to two types of personal
jurisdiction. If the defendant has made continuous and systematic contacts with the forum,
general jurisdiction is established whether or not the defendant's alleged liability arises from
those contacts. In contrast, when specific jurisdiction is alleged, the courts focus the minimumcontacts analysis on the relationship among the defendant, the forum, and the litigation. Specific
jurisdiction is established if the defendant's alleged liability arises out of or is related to an
activity conducted within the forum.
Purposeful Availment Shown By Marketing and
Specific Personal Jurisdiction.
Advertising Activities.
This is an interlocutory appeal from the trial court's denial of the D-Moki Mac's special
appearance. The court of appeals affirmed. Ps' son was killed while on a trip through the Grand
Canyon. Moki Mac knowingly sells rafting trips to Texas residents and purposefully directs
marketing efforts to Texas with the intent to solicit business from this state. Held: Under the
evidence (detailed in the opinion) Moki Mac's business with Texas residents stems from its.
marketing and advertising activities purposefully directed at gaining Texas customers, and it thus
availed itself of doing business here.

**********************
CASE OF FIRST IMPRESSION
City of Galveston v. State of Texas, --- S.W.3d ----,2007 WL 624076
04-0890
3112/2007
Justice Brister. Justice Willett filed a dissenting opinion, in which Chief Justice Jefferson,
Justices Hecht, and Wainwright joined.
State Cannot Sue A City.
As part of a 1982 agreement with the Texas Department of Transportation for construction of
State Highway 275, the City of Galveston agreed to move and maintain nearby utilities. One of
those utilities, a City water line, ruptured in 2001 and allegedly caused $180,872.53 in damages
to the highway. The Attorney General filed suit in the name of the State of Texas to recover
damages for the City's "negligent installation, maintenance, and upkeep" of its water line and the
resulting damage to state property. The City filed a plea to the jurisdiction, special exceptions,
and a motion for swnmary judgment asserting governmental immunity; the trial court granted the
jurisdictional plea. A divided court of appeals reversed, holding that cities have no immunity
from suit by the State. Held: Reversed and the State's claim against the City is dismissed. The
City is immune from suit by the State. Generally, a governmental unit is immune from tort
liability, unless the Legislature has waived immunity. Given the novelty of this suit, the political
nature of all the parties, and the sensitivity of these intergovernmental issues, the decision as to
who should bear responsibility for governmental employees' misconduct should be made by the
Tex. Sup. Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 102 of 118- 3/27/2007

peoples' representatives. The Court does not defer to the Legislature to decide whether
immunity exists; it is a common-law, court-created doctrine. Rather, the Court decides to defer
to the Legislature, to decide whether and to what extent that i1mnunity should be waived.
Political Subdivisions Enjoy Immunity, When Performing Governmental Functions.
Political subdivisions in Texas have long enjoyed immunity from suit when perfom1ing
governmental functions like that involved here. While this immunity can be waived, the courts
ha\'e consistently deferred to the Legislature to do so; indeed, the Supreme Court has said
immunity from liability "depends entirely upon statute. For its part, the Legislature has, in Tex.
Gov't Code § 311.034, mandated that no statute should be construed to waive immunity absent
"clear and unambiguous language."ill The State asserts no such statute here.
Home Rule Cities Have All The Powers Of The State.
Home-rule cities, like Galveston, derive their powers from the Texas Constitution, not the
Legislature. They have all the powers of the state not inconsistent with the Constitution, the
general laws, or the city's charter. Among those powers is immunity from suit for governmental
functions. The State has the power to waive immunity from suit for cities, but no authority to do
so without the Legislature's clear and unambiguous consent. There is no such authority here.
Governmental Immunity Created By Courts & Not Legislature.
Cities are not created by the State, but by the Constitution and the consent of their inhabitants.
Immunity was not bestowed by legislative or executive act; it arose as a common-law creation of
the judiciary. The same policies that Jed courts to recognize immunity in the first place still
apply when the plaintiff is the State. The Legislature, of course, may change the common law,
and has broad power to say whether cities are immune from suit. But until it does so, the same
logic that created governmental inununity for cities protects them from suits by the State for
money damages.

*********** ** *********
In reDiscount Rental, Inc., --- S.W.3d ----, 2007 WL 624075
05-0249
3/2/2007
Per Curiam
Property Sold At Execution Sale After Default Must Be Returned When Default Is Set
Aside For Lack Of Service.
In a restricted appeal, the court of appeals reversed a default judgment against relator Discount
Rental, Inc., because service was improper. Discount Rental did not supersede the judgment, so
while the appeal was pending, the plaintiffs obtained a writ of execution on Discount Rental's
property. The constable seized Discount Rental' s property, and at a hearing on the Carters'
motion to sell the property, the parties reached agreement on how the prope1ty should be sold.
The trial court signed an order reflecting the parties' agreement, but the court of appeals reversed
the default judgment before the sale occurred. Discount Rental moved for the return of its
prope1ty under section 34.021 ofthe Texas Civil Practice and Remedies Code, which states: "A
person is entitled to recover his property that has been seized through execution of a writ issued
by a court if the judgment on which execution is issued is reversed or set aside and the property
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Page J03 of 118 - 3/27/2007

has not been sold at execution." The trial court denied the motion, and directed that the sale take
place. Held: Writ of mandamus will issue. The trial court is directed to vacate its orders for
sale, and directed to return the property to Discount Rental. Even assuming that Discount Rental
could waive these statutory rights, Discount Rental's agreement was premised on the trial court' s
authority to force a sale of its property. Because the default judgment was taken without proper
service, it was void, and "any attempt, by process based upon the void judgment to reach
Discount Rental's property is devoid of lawful authority." Mandamus will lie to correct the error.

**********************
Varner v. Cardenas,--- S.W.3d ----, 2007 WL 624074
06-0212
3/2/2007
Per Curiam
Attorney's Fees. Prevailing Party Not Required To Segregate Amount Required To
Defend Counterclaims.
It was recently held in Tony Gullo Motors I, L.P. v. Chapa that a prevailing party must segregate
recoverable from unrecoverable attorney's fees in all cases. _ S.W.3d ___, _(Tex. 2006).
The court of appeals here correctly reversed and remanded for segregation; but as it defined
recoverable fees too narrowly, to the extent it required segregation of fees the Varners incurred
defending against the Cardenases' counterclaim.
Attorney's Fees For Post-Judgment Foreclosure Or Appeal Must Be Established At The
Original Trial. The trial court denied any attorney's fees for post-judgment foreclosure or
appeal, and the court of appeals affirmed because no evidence was offered regarding a
reasonable fee for those services. 182 S.W.3d at 383 . The Varners cite no such evidence, but ask
us to change Texas procedure to allow post-judgment fees to be determined after appeal by
remand to the trial court. Held: "We decline the invitation to allow two trials on attorney's fees
when one wi ll do."

**********************
Ontiveros v. Flores, --- S.W.3d ----, 2007 WL 624079
06-0607
3/2/2007
Per Curiam
Error Must Be Assigned In Court Of Appeals Before That Court Can Reverse And
Remand.
Flores sued Ontiveros for fraudulent transfer, breach of fiduciary duty, tortious interference with
a contract, conspiracy, conversion, and fraud. The trial court granted Ontiveros's motion for
summary judgment as to all causes of action. Flores appealed. In the court of appeals, Flores
complained only about the summary judgment granted on his claims for fraudulent transfer and
breach of fiduciary duty. The court of appeals reversed and remanded as to all claims. _
S.W.3d _.Held: That part of the court of appeals' judgment reversing and remanding Flores's
claims for tortious interference with a contract, conspiracy, conversion, and fraud claims 1s
Tex. Sup. Ct .Summaries- © L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 104 of 118- 3/27/2007

reversed. The trial court judgment that Flores takes nothing on those claims is affirmed. The
court of appeals erred by reversing as to causes of action that Flores did not complain about.

**********************
Zipp v. Wuemling, --- S.W.3d ----, 2007 WL 704581
05-0731
3/9/2007
Per Curiam
Appeal Not Mooted By Death Of Ward Where Propriety Of Removal Of Guardian
Remains An Issue.
The trial court removed Zipp for cause, as guardian of the person and estate of Keller, and
replaced Zipp with Wuemling. Zipp appealed her removal to the court of appeals. During the
pendency of that appeal, Keller died of natural causes. The court of appeals concluded that
Keller's death rendered Zipp's complaint moot, and dismissed the appeal. 171 S.W.3d 498, 502
(Tex. App.-Waco 2005, pet. granted). Held: Reversed and remanded to the court of appeal s.
With the death of the ward, the guardianship ofthe person must end. But the estate must still be
settled. When there is a dispute, as to who shall settle the estate, a justiciable controversy exists.
In this case, two of Zipp' s issues remain in controversy: (1) whether the district court properly
removed Zipp as guardian, and (2) whether Zipp has a legally cognizable interest in fees and
costs.
Appeal Moot When Court Action Cannot Affect The Rights Of The Parties.
An appeal is moot when a court's action on the merits cannot affect the ri ghts of the parties.
Thus, the death of a party can, under certain circumstances, render an appeal moot. But neither
party to this controversy has died. Instead, though Keller died, the repercussions of the
controversy between Zipp and Wuemling continue. Someone, whether Zipp, Wuemling, or
someone else, will ultimately be required to present a final accounting of the guardianship estate
to the district court. The trial court found Zipp was disqualified from doing so, and appointed
Wuemling. Zipp has a right to appeal that decision.

**********************
City of Dallas v. Saucedo-Falls, --- S.W.3d ----, 2007 WL 704921
05-0973
3/9/2007
Per Curiam.
Governmental Immunity. Remanded For Reconsideration In Light Of Rehearing In R eata
Construction.
Several police officers and firefighters sued the City of Dallas, alleging that they were entitled to
a pay raise. They sued for back pay, interest, and attorney's fees, and alternatively for
declaratory relief. The City filed a plea to the jurisdiction asserting that plaintiffs had not
affirmatively demonstrated a waiver of the City's governmental immunity from suit. The trial
court denied the City's plea, and on interlocutory appeal, the court of appeals affirmed. 172
S.W.3d 703 (Tex. App.-Dallas 2005). The court of appeals relied on the first opinion in Reata
Tex. S up. Ct .Sum maries -© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 105 of 118 - 3/27/2007

Construction Corp. v. City of Dallas, which we have since withdrawn and replaced. See Reata
Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006). Held: Reversed and remanded to
the trial court. The Supreme Court does not reach whether a counterclaim for declaratory relief
and attorney's fees, under the Declaratory Judgments Act waives immunity from suit for claims
for money damages not otherwise allowed under that Act. On remand, the plaintiffs should have
the opportunity to argue any grounds for waiver remaining under this Court's decisions,
including whether the City's immunity·from suit is waived by sections 271.151-.160 of the Local
Government Code, enacted while this case has been pending on appeal.

**********************
City of Sweetwater v. Waddell,--- S.W.3d ----, 2007 WL 704927
05-1033
3/9/2007
Per Curiam
Governmental Immunity. Reconsider Case In Light Of Tooke.
Several firefighters and the Sweetwater Professional Fire Fighters Association sued the City of
Sweetwater, alleging that the City failed to promote firefighter Allan Waddell to the position of
fire marshal, as required by section 143.036 ofthe Texas Local Government Code, and failed to
pay each firefighter the same base salary as required by section 143.041 of that code. The trial
court granted the plea, without stating the grounds for its ruling, and dismissed the case with
prejudice. The court of appeals reversed and remanded, holding that the City's immunity from
suit was waived by a "sue and be sued" clause in its charter and that the plaintiffs all had
standing to sue._ S.W.3d _(Tex. App.-Eastland 2005). Held: This case is reversed and
remanded for reconsideration, in the light of the decision in Tooke v. City o[Mexia, 197 S.W.3d
325 (Tex. 2006) (holding that the City's immunity from suit on the Plaintiff-Tookes' breach of
contract claim was not waived by Tex. Loc. Gov't Code§ 51.075, and that the words in the City
Charter that the City may "sue and be sued" and "implead and be impleaded," do not waive the
City's immunity from suit).

**********************
In re Texas Department of Transportation and In re Gillespie County,--- S.W.3d ----, 2007
WL 704584
06-0289 and 06-0302 [One Opinion].
3/9/2007
Per Curiam
Venue. Tort Claim Act. Cause Of Action Must Be One On Which Claims Of Sovereign
Immunity Is Waived.. Wilson Not Controlling.
This is an original mandamus proceeding. Ps' son, while riding as a passenger in a car, was
killed in Gillespie County, when the car slid off a roadway, through a gap between the guardrail
of a bridge over the Pedernales River and the adjacent embankment, and into the river. Ps sued
TxDOT and the County in Travis County probate court, pursuant to the Texas Tort Claims Act,
Tex. Civ. Prac. & Rem. Code§§ 101.001-.109. (TTCA). The Ps classify their claims as falling
into four categories: negligence, gross negligence, premises defect, and special defect or injuryTex. Sup. Ct .Summaries - © L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
Page 106 of 118- 3/27/2007

by-traffic-control-device. Venue is alleged to be proper in Travis County as to TxDOT, pursuant
to section 101.1 02(a) of the TTCA because part of the cause of action arose in Travis County,
and as to Gillespie County under section 15.005 of the Civil Practice and Remedies Code,
because venue is proper in Travis County as to TxDOT. It was alleged that the cause of action
arose in Travis County, because TxDOT maintained offices in Travis County and entered into
and negligently performed, at least in part, their contract and job duties in Travis County, which
resulted in the defective roadway and approach to the bridge, where the accident occurred.
TxDOT and the County filed motions to transfer venue to Gillespie County, where the accident
occurred. The motions were denied. The court of appeals denied mandamus relief. Held:
Mandamus will issue. For venue to be proper in Travis County, one of the Ps' claims, under the
TTCA, must have arisen at least in part in Travis County. The only claims which can be
"properly pled" against TxDOT are claims for which sovereign immunity is waived by the
TTCA, which in this instance are premises defect and special defect claims. The Ps allege that
TxDOT failed to use ordinary care in designing, inspecting, maintaining, and employing others
to inspect and maintain the bridge and surrounding roadway. But, they do not allege that such
activities were actively ongoing, at the time of the accident. Because any actions taken and
decisions made by its employees antecedent to the accident are not part of such causes of action,
there is no "properly pled cause of action," part of which took place in Travis County. Because
the Court did not address the question presented by this case in Wilson v. Texas Parks & Wildlife
Department, 886 S.W.2d 259 (Tex. 1994), the Court does not consider Wilson controlling.
Venue; Mandatory. Tort Claim Actions.
Tex. Civ. Prac. & Rem. Code Section 15.016 provides that, if an action is governed by a separate
mandatory venue provision, then the action shall be brought in the county required by the
separate venue provision. Section 101.1 02( a) is such a mandatory provision. It requires that
claims made pursuant to the TTCA be brought in the county in which all, or a part of, the cause
of action arose.
Mandamus To Enforce Mandatory Venue Provision. No Need To Show Lack Of Appellate
Remedy.
Tex. Civ. Prac. & Rem. Code§ 15.0642 authorizes parties to seek mandamus relief to enforce its
mandatory venue provisions. In seeking mandamus under section 15.0642, a party need not
prove the lack of an adequate appellate remedy, but need only show that the trial court abused its
discretion, by failing to transfer the case.
Tort Claims Act. Negligent Activities And Premise Defects Distinguished.
A negligent activity claim arises from activity contemporaneous with the occurrence, whereas a
premises defect claim is based on the property itself being unsafe.
Tort Claim. Injury By Traffic Device Is Part Of Premises Defect Cause Of Action.
The Ps' alleged an "injury by traffic control device" under Tex. Civ. Prac. & Rem. Code §
101.060. However, section 101.060 acts only as a limitation on the government's waiver of
immunity in some situations involving the absence, condition, malfunction or removal of a
traffic control device. The section does not create a cause of action separate and apari from a
premises defect cause of action.
Tort Claim. Joint Enterprise.
Tex. Sup. Ct .Summaries-© L. Wayne Scott- St. Mary's Alumni Reunion Program 2007
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The Ps' claim that TxDOT is liable pursuant to a "joint enterprise" with other defendants,
because of a joint agreement to design, plan, construct, and inspect the roadway and bridge at
issue. Held: Joint enterprise is a theory involving derivative liability whereby one enterprise
participant may be held responsible for a cause of action proven against another participant. Such
allegations do not "properly plead" a negligent activity cause of action. The allegations address
actions antecedent to the accident, but do not change the nature of the Ps' cause of action from
claims for premises or special defects liability. Such pleadings, taken as true, do not make Travis
County a proper county for venue of the action.

**********************
Doe 1 v. Pilgrim Rest Baptist Church,--- S.W.3d ----, 2007 WL 704941
06-0686
3/9/2007
Per Curiam
Severance May Be Conditioned Upon Future-Certain Events, Such As Payment Of Filing
Fees.
Petitioner Jane Doe 1, individually and as the next friend of minor child Jane Doe 2, sued
Pilgrim Rest Baptist Church. The trial court granted summary judgment for the Church, and
petitioner timely filed a motion for new trial. To make the judgment final and appealable, the
trial court later ordered: "that all claims against [the Church] are severed from this cause into
cause number to be assigned [and restyled] on the docket of this Court upon compliance with the
District Clerk's procedure." The parties agree that the procedure required payment of a filing
fee. Doe paid the fee 123 days after the order was signed and filed her notice of appeal a week
later. The court of appeals dismissed the appeal for want of jurisdiction because the notice of
appeal was filed more than ninety days after the severance order was signed. Held: Reversed
and remanded to the trial court. The appeal was timely perfected. As a rule, the severance of an
interlocutory judgment into a separate cause makes it final. A court can, however, condition the
effectiveness of the severance on a future-certain event, such as payment of fees associated with
the severance by the party requesting it.

**********************
In re Derzapf, 2007 WL 867013, (Tex. 2007)
Standing. Grandparents Access Denied T o Non-Biological, Non-Adoptive Grandparents.
In this action for access to a child, the grandmother (Connie), and the step-grandfather (Randy)
sought access to their grandchildren after the mother's death. They cared for the children for a
period after the mother's death. Later the children were the returned to the father. The trial court
granted visitation rights. Held: Writ of mandamus will issue. The trial court abused its
discretion in awarding access here, because the step-grandfather is neither a biological nor an
adoptive grandparent, and the grandmother did not overcome the statutory presumption favoring
the children's father. The grandparent access statute, codified at Tex. Fam. Code§§ 153.432-34,
as amended in 2005, now includes a presumption that a parent acts in his child's best interest,
and it pennits biological or adoptive grandparents to obtain court-ordered access to a grandchild,
only if they show that denial of access will "significantly impair the child's physical health or
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Page 108 of 118- 3/27/2007

emotional well-being." The grandfather does not have a justifiable interest in the controversy
sufficient to override the statutory text permitting only biological or adoptive grandparents to
seek access pursuant to the standards set forth in section 153.433.

Grandparent Access. Natural Grandmother Had To Overcome Statutory Presumption
That Denying Access To Her Would Impair The Children.
Under Tex. Fam. Code§ 153.433, a trial court must presume that a fit parent acts in his or her
child's best interest. So long as a parent adequately cares for his or her children (i.e., is fit) , there
will normally be no reason for the State to inject itself into the private realm of the family.
Section 153.433(2) requires that a grandparent, seekin g court-ordered access, overcome the
presumption that a parent acts in his or her child's best interest, by proving by a preponderance
of the evidence that "denial ... of access to the child would significantly impair the child's
physical health or emotional well-being." To succeed on her claim then, the grandmother
(Connie) had to, and failed to, overcome the statutory presumption that denying the children
access to her in particular- not Connie and Randy jointly, or the Johnson family as a whole,
would significantly impair the children's physical health or emotional well-being.
Grandparent's Rights Of Access Subordinate To A Parent's.
A grandparent's rights are generally subordinate to a parent's. Statutory rights extended to
grandparents and other relatives can create a substantial burden on a parent's traditional role in a
child's upbringing). The interest of parents in the care, custody, and control of their children is,
perhaps, the oldest of the fundamental liberty interests recognized by the Supreme Court of the
United States.

Tex. Sup. Ct .Sum maries -© L. Wayne Scott - St. Mary's Alumni Reunion Program 2007
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Appendix A

Tex. Sup. Ct .Summaries- © L. Wayne Scott- St. Mary' s Alumni Reunion Program 2007
Page 110 of 118 - 3/27/2007

St. Mary's University
School ofLaw Reunion- 2007
T exas Supreme Court Update

By
Prof. L. Wayne Scott

Minnes ota L ife Ins urance Compan y v. Vasquez, 192
S.W.3d 774 (Tex. 2006) - P. 5.

• When insurers are negligent, the Texas
Ins urance
Code
does
not
grant
policyholders extra-contractual damages.
Instead, such damages are reserved for
cases in which an insurer kn ew its actions
were false, deceptive, or unfa ir. T here is no
such evidence here. Claims for extracontractual dam ages should not be a routine
addition to every breach-of-policy case.

Be lt v. O ppenheim er , Blend, Ha r ri son & T ate, Inc.,
.
192 S. W.3d 780 (Tex. 2006). P. 15.

• A decedent's estate has a justi cia ble interest
in ma intaining a action for the malpra ctice
of attorn ey who planned the decedent's
estate. In -other-words, t he esta te of the
decedent has standin g to s ue the attorney
who planned the decedent's estate.

1

In re Palm Harbor Homes, Inc., 195 S.W.3d 672
(Tex. 2006). P. 28.
• The manu facturer's opt-out right did not render
the arbitration agreement unenforceable.
• An arbitration agreement may he illusory if a
party can unilaterally avoid the agreement to
a rbitrate.
However, in
this
matter
the
manufacturer wa s a third-party beneficiary, not a
direct party promisor. Thus, the agreement was
not illusory as to the manufacturer.

In re Palm Harbor Homes, Inc., 195 S.W.3d
672 (Tex. 2006). P. 28.
• Absent fraud , misrepresentation, or deceit,
parties to an arbitration agreement are
bound by the term s of the co ntract they
signed, regardless of whether they read it.
• When an arbitration clause is part of a
larger, underlying contract, the remainder
of the contract may suffice as consideration
for the arbitration clause.

In re Palm Harbor Homes, Inc., 195 S.W.3d
672 (Tex. 2006). P. 28.
• A third-party heneficiary may enforce a
co ntract to which it is not a party if the
parties to the contract intended to secure a
benefit to that third party and entered into
the contract directly for the third party's
benefit.

2

In re Palm Harbor Homes, Inc., 195 S.W.3d
672 (Tex. 2006). P. 28.

• The arbitration agreement in question is not
substantively unconscionable, because it
binds the buyers to arbitrate with the
manufacturer, but does not bind the
manufacturer to arbitrate with them.

In re Palm Harbor Homes, Inc., 195 S.W.3d
672 (Tex. 2006). P. 28.
• The a greement requiring t he purchaser to
arbitrate is not substantively uncon scionable,
because the buyers would not have been able to
buy the manufactured home, unless they signed
the arbitration agreement.
• Furthermore, a ssuming arguendo that the
agreement constituted a con tract of adhesion ,
adhesion contracts arc not per se un conscionable
or void.

Tnokc v. City of Mexia, 197 S.W.Jd 325 (Tex. 2007).
P. 41.
• Th is case involves a suit again st a home rule city
for brea ch of contract. Held: T he C ity' s
immunity from suit on the Plaintiff-Tookes '
breach of contract claim was not waived by th e
Ia nguage of section 51.075 of the Local
Government Code, wh ich provides that a hom erule municipality " may plead and be imp leaded in
any court." T he words "sue and be sued" d o not
necessarily mean that the sovereign immuni ty of
the gove r nmental entity is waived.

3

Tooke v. C ity of Mexia, 197 S.W.3d 325 (Tex. 2007).
P. 4 1.

• Missouri Pacific Railroad Co. v. Brownsville
Navigation District, 453 S.W.2d 812 (Tex.
1970), must be, and now is, overruled. The
effect of a "sue and be sued" clause in an
organic statute depends on the context in
which it is used. The words can mean that
immunity is waived, but they can also mean
only that a governmental entity, like others,
has the capacity to sue and be sued in its
own name.

Fifth Club, In c. v. Ramirez, 196 S.W.3d 788 (Tex.
2006). P. 44.

• The Supreme Court declines to recognize a
personal character exception to the rule that
an employer is generally in sulated from
liability for the tortious acts of its
independent contractors.

Loram Maintenance of Way, Inc., v. Ianni,
210 S.W.3d 593 (Tex. 2006). P. 46.
• Simply knowing that an employee is
intoxicated or incapacitated is not enough
for a duty to arise. Rather, the employer
must affirmatively exercise control over the
incapacitated employee.

4

Loram Maintenance of Way , Inc., v. Ianni, 210
S.W.3d 593 (Tex. 2006). P. 46.

• Thus, while an employer owes no duty to act
to control the conduct of an impaired offduty employee, if the employer does decide
to act, its duty is to avoid any affirmative
act which might worsen the situation.
• Otis Eng'g Corp. v. Clark, 668 S.W.2d 307,
309, 311 (Tex.l983) exercised control, which
caused the harm. It is not overruled.

Fiess v. State Farm Lloyds, 202 S.W.3d 744
(Tex. 2006). P. 53.

• Homeowner's [Form B (HO-B)] policy does
not provide coverage for mold
contamination caused by water damage
that is otherwise covered by the policy.

Coca-Cola Company v. llarmar Bot! ling Co.--S. W.3d ----, 2006 WL 2997436- p.61

Texas courts ca nnot adjudicate and
remedy an anti-competitive injury
occurring in another state, either
under the Texas Free Enterprise
and
An titrust
Act of 1983
(TFEAA), or the law of that state.
The TFEAA will not support
extraterritorial relief in the absen ce
of a s howing that such relief
promotes competition in Texas or
benefits Texas consumers.

5

Alex Sheshunoff Management Services, L.P.
v. Johnson , 209 S.W.3d 644 (Tex. 2006). P. 62.
• The Covenants Not to Compete Act does not
require that the agreement containing the
covenant to be enforceable the instant the
agreement is made. The covenant need only
be "ancillary to or part or' the agreement at
the time the agreement is made. Thus, a
unilateral contract formed when the
employer performs a promise that was
illusory when made can satisfy the
requirements of the Act.

Texas Special Court of Review,
In re HECHT, 2 13 S.W.3 d 547 (Tex. 2006). P. 67.
• Statements made by Justice Hecht of the
Texas Supreme Court, supporting the
nomination of Harriet Miers to the Supreme
Court of the United States, did not violate
the Texas Code of Judicial Conduct.
• There is no ev idence that Justice Hecht
"authorized" the media to use his name
publicly endorsing Miers.

Texas Special Court of Review,
In r c HECHT, 213 S.W.3d 547 (Tex. 2006).

• The statements by Justice Hecht do not
constitute "endorsing" , in that they are
no more than support or praise, and they
do not constitute a request or appeal for
others to support her nomination.
"Endorsing", under the circumstances of
this case means more than support, that
is, more than spoken praise.

6

Texas Special Coun of Review,
In re HECHT, 213 S.W.3d 547 (Tex. 2006).

• To be judicial conduct for the
advancement of private interests in
violation of Canon 2B of the Texa s Code of
Judicial Conduct, the actions of the judge
must be for a personal or an individual
advantage or benefit gained by use of
judicial office.

F.F.P. Operating Partners v. Duenez,--- S.W.3d ----,
2006 WL 3110426 - P. 69.

• The Dram Shop Act does not make a
provider vicariously liable for the conduct
of an intoxicated patron. The provider' s
claim against the intoxicated patron for the
injuries caused by the patron is not one for
indemnification that could be properly
severed; it is one of contribution for the
patron' s proportionate share of the
damages for which he is responsible.

F.F.I'. Operllting Partners v. Duen ez,--- S.W.3d ----,
2006 WL 31 10426 - P 69.

• As under the common law, a dram shop
claimant " must establish that the liquor
licensee's negligent conduct proximately
caused his injuries." The Legislature did
not abolish the element of proximate cause
for a third party to recover from a dram
shop and did not replace it with a form of
vicarious liability.

7

Brookshire Grocery Co. v. Taylor , S.W.3d, 2006
WL 3456559 - P. 71.

• Ordinarily, an unreasonably dangerous
condition for which a premises owner may
be liable is the condition at the time an d
place injury occurs, not so me antecedent
situation that produced the condition.

Hoover Slovacek LLI' v. Walton, 206 S.W.3d 557
(Tex. 2006). P. 71.

• An attorney hired on a contingent-fee basis
may not in<.:lude in the fee agreement a
provision stating that, in the event the attorney
is discharged before completing the
representation, the client must immediately
pay a fee equal to lhc present value of the
attorney"s interest in the dicnt's claim.

Barker v . Eckman, 213 S.W.3d 306 (Tex. 2006)
- P. 73.
• A cause of action for breach of a bailment
agreement can accrue when the agreement is
breached by the bailee's refusal to comply with
the bailor's rightful demand for return or
disposition of the bailed property, or when the
bailee takes action clearly inconsistent with the
bailor's contractual rights. But, the rule that a
cause of action may accrue upon such types of
breach does not preclude accrual of a cause of
act1on at an earlier time if the bailee at an
earlier time breaches the agreement.

8

Barker v. Eckman, 213 S.W.3d 306 (Tex. 2006)
- P. 73.

• A cause of action accrues when a party
has been injured by actions or omissions
of another. Limitations begin to run upon
accrual of the cause of action.
• The discovery rule is an independent
ground of defense. A party seeking to
benefit from the discovery rule has the
burden of obtaining findings to support its
application.

Brainard v. Trinity Universal Ins, Co., --S.W.3d ---, 2006 WL 3751572 (Tex. 2006)- P. 86

• Under the "declining principal" formula,
each credit for settlement and personal
injury protection (PIP) credits is applied to
the interest calculation according to the
date on which it was received.

fin1inard v. Trinity llnivcrsallns, Co., --- S. W.Jd ---,
2006 WL 375 1572 (Tex. 2006) - P. 86.

• The insured may recover attorney's fees in
an action for uninsured/underinsured
insurance coverage, under Tex. Civ. Prac. &
Rem. Code Chapter 38, only if the insurer
does not tender UIM benefits within thirty
days after the trial court signs a judgment
establishing the liability and underinsured
s tatus of the other motorist.

9

Bed, Bath & Beyond, Inc. v. tlrista, 211 S.W.Jd 753
(Tex. 2006)- P. 92.

• Assuming
the
unavoidable
accident
instruction should not have been submitted,
the Supreme Court finds that submitting
the instruction did not constitute harmful
error. The Court is not persuaded that
harm must be presumed when proper jury
questions are submitted along with
improper inferential rebuttal instructions.

Norris v. Thomas,--- S.W.3d ----, 2007 WL 428075
(Tex. 2007). P. 96.

• A motorized waterborne vessel, used as a
primary residence, and otherwise fulfilling
all of the requirements of a homestead,
except attachment to land, docs not qualify
for the homestead exemption under Article
16, §§ 50 and 51 of the Texas Constitution.

County of Dallas v. Wiland,--- S.W. 3d ----, 2007 WL
489983 (Tex. 2007). P. 99.

• Dallas deputy constables, covered by a civil
s ervice manual, have a property interest in
continued employment, and a right to
procedural due process.

10

County of Dallas v. Wiland, --- S.W.3d ----,
2007 WL 489983 (Tex. 2007). P. 99.
• )As to the d epu ties not covered by the manual:)
When a plaintiff challenges a non-l egislati ve state
action (such as an adverse employment decision),
the courts loo k, as a threshold matter, to whether
the property
interest being deprived is
"fundamental" under the Constitution. If the
interest is not " fundamental," however, the
governmental action is entirely outside the ambit
of substantive p rocess and will be upheld, so long
as the state satisfies the requirements of
procedural du e process.

Citizens Ins. Co. of America v. Daccach, --S.W.3d ----, 2007 WL 623799. P. 104.
• A claim based on the failure to register with the
Texas Securities Board before offering or selling
securities from Texas does not present a classic
connie! of laws problem. T he trial court correctly
concluded th at the Texas Securities Act applies to
this suit. Because the class laws uit only alleges
C itizens' failure to register w ith the Texas
Securiti es Board before a llegedly offering and
selling securities from Texas, Section 12 governs
under any conflict of law principles that mi ght
apply.

Citizens Ins. Co. of America v. Oaccach, --S.WJd ----, 2007 WL 623799. P. 104.
• While Tex. R. C iv. P. 42(d) allows a tri al court to
consider certi fyi ng a class whose representati ve
has abandoned or split claims, th is d ocs not except
a final j udg me nt in such a class action fro m the
principles of res judicata. Class members may be
preclud ed from asserting those claims in
subseq uent individual litigation if they arose from
th e sa me tra nsaction or subject matter and co uld
have been litiga ted in th e prior suit.

11

Moki Mac River Expeditions v. Drugg, -·- S. W.Jd ---,
2007 WL 623805 (Tex. 2007). P. I 08 .

• For purposes of personal jurisdiction, there
must be a nexus between the forum, the
litigation, and the defendant. Thus, in a
personal injury action, the liability ass erted
must arise from, or relate to, the forum
contact.

City of Galveston v. State of Texas,--· S.W.3d ---·,
2007 WL 624076 (Tex. 2007). P. II 0.

• The City is immune from suit by the State,
unless the legislature provides otherwise.
The Court does not defer to the Legislature
to decide whether immunity exists; it is a
common-law,
court-created
doctrine.
Rather, the Court decides to defer to the
Legislature, to decide whether and to what
extent that immunity should be waived.

In rc Dcrzapf, S.W. 3d , 2007 WL 867013, (Tex.
2007).

• The grandparent access statute, codified at
Tex. Fam. Code §§ 153.432-34, as amended
in 2005, now includes a presumption that a
parent acts in his child's best interest, and it
permits biological or adoptive grandparents
to obtain court-ordered access to a
grandchild, only if they show that denial of
access will "significantly impair the child's
physical health or emotional well-being."

12

In rc Dcrzapf, S.W. 3d , 2007 WL 867013, (Tex.
2007).

• The non-adoptive step-grandfather does not
have a
justiciable interest in
the
controversy, sufficient to override the
statutory text permitting only biological or
adoptive grandparents to seek access
pursuant to the standards set forth in
section 153.433.

In re Dcn..apf, S.W. 3d , 2007 WL 867013, (Tex.
2007). P. 117.

• To succeed on her request for access to her
grandchildren, the grandmother (Connie)
had to, and failed to, overcome the statutory
presumption that denyin g the children
access to her in particular case-not Connie
and Randy (the step-grandparent) jointly,
or the Johnson family as a whole, would
significantly impair the children's physical
health or emotional well-being.

13

Files

Collection

Citation

L. Wayne Scott, “CLE: 2007: Texas Supreme Court: Update and Trends,” St. Mary's Law Digital Repository, accessed February 22, 2017, http://lawspace.stmarytx.edu/item/STMU_HomecomingCLE2007Scott.

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