HBA Appellate Practice Section
March 12, 2009
SELECTED CASE SUMMARIES
February 19, 2009 – March 12, 2009
J. Shannon Gatlin
Briefing Attorney to the Hon. William J. Boyce
Texas Fourteenth Court of Appeals
SUPREME COURT OF TEXAS
Adequate Warning to Invitee as a Matter of Law
TXI Operations, L.P. v. Perry, No. 05-0030 (Feb. 27, 2009) (Justice Green).
Significance: The duty to warn invitees of a known dangerous condition on the defendant’s premises is not necessarily satisfied by posting a general instruction or notice.
Holding: A “be careful” warning might provide some evidence that a premises owner is not negligent, but it is inconclusive if the warning serves only as a general instruction, neither informing of known hazards overall nor identifying the particular known hazard that caused harm.
Relevant Facts: Plaintiff regularly drove an 18-wheel truck down an unpaved road maintained by TXI. One of these times, Plaintiff’s truck struck a hole and he was injured when thrown into the roof of the truck cab. Plaintiff admitted he knew the hole was there and that he was aware of a 15 m.p.h. speed limit sign TXI had posted near the hole. Plaintiff nonetheless sued TXI for negligence based upon its failure to warn of a known dangerous condition on its premises. A jury found TXI and Perry equally negligent; the trial court entered judgment for Perry, reducing the jury’s damage award by his percentage of fault. The court of appeals affirmed. On appeal to the supreme court, TXI did not contest that it owed a duty; rather it argued that the speed limit sign was an adequate warning of the dangerous road condition as a matter of law. The supreme court disagreed and affirmed the trial court judgment. In a dissenting opinion joined by Justice Medina and Justice Willett, Justice Hecht opined that the 15 m.p.h. speed limit sign was adequate as a matter of law to discharge any duty TXI may have had to warn invitees of rough conditions on its unpaved road. The dissent further asserted that TXI owed no duty to warn because the potholes were an open and obvious danger.
Retamco Operating, Inc. v. Republic Drilling Co., No. 07-0599 (Feb. 27, 2009) (Justice Green).
Significance: A nonresident company accused of violating the Uniform Fraudulent Transfer Act (UFTA) by acting as transferee of Texas oil and gas interests may be subject to specific jurisdiction of Texas courts.
Holding: Purchases of oil and gas interests located in Texas by a nonresident—even if the nonresident has never entered Texas—as purchases of real property, are sufficient to demonstrate purposeful availment of the privilege of conducting business in Texas, and the alleged receipt of Texas real property for the purpose of defrauding a Texas resident is sufficient to demonstrate that at least part of the alleged tort occurred in Texas.
Relevant Facts: Retamco, a Texas corporation, sued Paradigm Oil, Inc., a Texas corporation, for unpaid royalties related to oil and gas interests in several Texas counties. Following an interlocutory default judgment against Paradigm, Retamco amended its petition to include a claim against Republic, a California corporation, under UFTA. Retamco claimed that during the pendency of the case, Paradigm assigned to Republic a 72% interest in certain of Paradigm’s wells and leases and an option to acquire a 72% interest in a lease held by Paradigm. Retamco alleged that these transfers were fraudulent, and that they led to Paradigm’s insolvency, rendering it unable to satisfy Retamco’s claims. Republic filed a special appearance, arguing that it did not have minimum contacts with Texas and even if it did, Retamco’s cause of action did not arise from or relate to those contacts. Republic specifically argued that Texas courts could not exercise personal jurisdiction over it because the allegedly fraudulent assignment of the leases occurred entirely in California. The trial court denied Republic’s special appearance, and it filed an interlocutory appeal. The court of appeals reversed and held that Republic was not subject to personal jurisdiction in Texas. The supreme court reversed the court of appeals’ judgment and remanded to the trial court.
FIRST COURT OF APPEALS
Sims v. Fitzpatrick, No. 01-07-00868-CV (Feb. 26, 2009) (Justice Jennings).
Significance: A jury demand filed more than 30 days before the scheduled trial date is presumed to be timely even if the entry of “death penalty” sanctions against the requesting party establishes liability and a hearing to the bench on damages is held within 30 days after filing of the jury demand.
Holding: The trial court abused its discretion in denying Defendants’ September 25 jury demand for a trial originally scheduled for November 5, notwithstanding the court’s entry of judgment regarding liability on September 14 and 25 and a subsequent hearing on damages tried before the court on October 3.
Facts: Plaintiffs’ lawsuits against Defendants were consolidated and set for trial on November 5, 2007. On September 10, 2007 and September 14, 2007, Plaintiffs filed motions for death penalty sanctions alleging primarily discovery abuses. The trial court granted the motions, striking appellants’ pleadings and entering judgment against appellants with regard to liability. Defendants filed a jury demand with the trial court on the same day that the court granted the last motion for sanctions, which was more than 30 days before the scheduled November 5 trial date. But on September 25, the trial court also set a hearing on damages for October 3, 2007, which rendered the jury demand untimely. The trial court denied Defendants’ motion for continuance and decided the issue of damages without a jury. The court of appeals reversed and remanded for a jury trial on damages.
Stoll v. Henderson, No. 01-07-00733-CV (Feb. 26, 2009) (Justice Sharp).
Significance: The offer of a will solely as an instrument of revocation of a probated will is a will contest that is subject to the two-year statute of limitations in Texas Probate Code § 93.
Holding: The application to probate a will solely for the purpose of revoking another will constituted an untimely will contest barred by the two-year statute of limitations, regardless of the fact that the will was not being offered for probate.
Relevant Facts: Decedent executed a will on November 5, 1993, transferring nearly all of her assets into a family trust, and executed a codicil on June 8, 1994. On July 21, 1994, she executed a new will that purported to revoke all prior wills and codicils and bequeath all assets to two individuals. Subsequently, she signed a note before two witnesses purporting to revoke the July 21, 1994 will. Decedent died on March 5, 2004. The November 1993 will and June 1994 codicil were admitted to probate on May 3, 2004. On November 8, 2006, applicants Stoll and Evans filed an application to set aside the probate of the 1993 will due to its revocation by the July 1994 will. All parties stipulated that the July 1994 will was duly executed and contained a revocation clause, later revoked, and not being offered for probate. The trial court concluded that the offer of the July 1994 will to establish revocation of the probated 1993 will constituted a will contest subject to the two-year statute of limitations set out in Texas Probate Code § 93 and that applicants were therefore time-barred from pursuing their action to set aside the 1993 will. The court of appeals affirmed.
FOURTEENTH COURT OF APPEALS
Determining Status for Premises Liability Actions
Mayer v. Willowbrook Plaza Limited Partnership, No. 14-07-00358-CV (Feb. 19, 2009) (Justice Boyce).
Significance: For purposes of determining duty owed by a landowner under a premises liability theory, a person can lose “invitee” status by leaving the premises and then returning later without having any present business of mutual benefit at the time of return.
Holding: As a matter of law, the decedents who left their cars in a shopping center parking lot for two or three hours to go elsewhere and then returned after the shopping center had closed to retrieve their cars were not invitees at the time they returned.
Facts: Four restaurant customers left together shortly before 2:00 a.m. to attend a party at a nearby hotel. The group took one car to the party, leaving two cars behind in the parking lot. The group returned between 4:00 a.m. and 5:00 a.m. to retrieve the cars—long after closing time. The group discovered one teenager attempting to hotwire one of the cars left behind and another teenager sitting in a nearby car. After an altercation, the teenagers left and quickly returned with a gun. Two members of the group were shot and killed, and their families sued numerous defendants under theories of negligent activity and premises liability. The trial court granted summary judgment for the defendants, and the court of appeals affirmed.
XTO Energy, Inc. v. Smith Production, Inc., No. 14-07-00069-CV (Feb. 24, 2009) (Justice Frost)
Significance: A party to a joint operating agreement (JOA) may not change its initial election to participate or not participate in the cost of a proposed new operation, even if it purports to make such a change within the time period specified for making its election, unless a change is unambiguously allowed under the JOA.
Holding: Under the unambiguous language of the JOAs at issue, Chevron was not allowed to change its initial election not to participate in the cost of a proposed new operation after it had received proper notice of the operation.
Relevant Facts: Smith was an operator under two JOAs governing exploration and production on an oil and gas lease. Chevron was one of four non-operating interest owners who were also parties to the JOAs. In May 2004, Chevron contracted to sell its working interest in the oil and gas lease to XTO. In May and June of 2004, Smith gave written notice to the non-operating interest owners of its proposal to drill four more wells on the lease. Under the JOAs, these owners had 30 days after receipt of the notice to notify Smith whether they would participate in the cost of the proposed operations. Chevron did not consult with XTO in deciding not to participate in the cost of the four proposed wells and notified Smith of its election within the 30-day period. Chevron then, also within the 30 days, sent Smith a letter attempting to revoke its earlier notification and to elect to participate in the cost of the wells. Smith asserted that Chevron could not revoke its prior notification and would be treated as a “non-consenting party” under the JOAs. XTO subsequently sued Smith for breach of contract based upon Smith’s refusal to accept Chevron’s purported election change and sought specific performance. The trial court granted summary judgment in favor of Smith. The court of affirmed. Justice Guzman dissented, arguing that the language of the JOAs was ambiguous and that the case should be reversed and remanded for further proceedings.