HBA Appellate Practice Section
June 18, 2009
SELECTED CASE SUMMARIES
May 22, 2009 – June 18, 2009
J. Shannon Gatlin
Briefing Attorney to the Hon. William J. Boyce
Texas Fourteenth Court of Appeals
SUPREME COURT OF TEXAS
Harrell v. State, No. 07-0806 (June 5, 2009) (Willett, J.).
Significance: Proceedings under Texas Government Code section 501.014(e) to recover court fees and costs assessed against inmates are civil in nature and not part of the underlying criminal case; abrogating Gross v. State, 279 S.W.3d 791 (Tex. App.—Amarillo 2007, no pet.), and Zink v. State, 244 S.W.3d 508 (Tex. App.—Waco 2007, no pet.).
Holding: Where the issue presented involves a trial court’s ability to seize an inmate’s funds post-judgment pursuant to a civil statute, withdrawal orders issued under that statute are more substantively civil than criminal.
Relevant Facts: Harrell pled guilty to drug charges in 1997 and 2003. In 2006, the convicting trial court issued orders pursuant to Texas Government Code section 501.014(e), directing $748 be withdrawn from his inmate trust account to pay court costs and appointed-counsel fees. Harrell moved to rescind these orders on due process grounds, which the trial court denied. The Amarillo Court of Appeals dismissed Harrell’s appeal for want of jurisdiction, citing its earlier decision in Gross that no statutory mechanism to appeal such orders existed. The supreme court granted review to resolve a split of opinion between the Waco and Amarillo Courts of Appeals—which deemed section 501.014(e) orders to be criminal in nature—and the San Antonio and Texarkana Courts of Appeals—which deemed such orders to be civil in nature. The supreme court concluding that section 501.014(e) orders are indeed civil in nature. After holding that section 501.014(e) orders are civil post-judgment collections, akin to garnishment actions or actions to obtain a turnover order, the court held a prisoner is afforded due process when given notice and an opportunity to be heard after funds are withdrawn. Because Harrell was afforded sufficient due process, the court affirmed the trial court’s orders
Ditta v. Conte, No. 07-1026 (June 5, 2009) (Willett, J.).
Significance: A court has discretion to remove a trustee at any time.
Holding: The statute of limitations period applicable to suits seeking damages for breach of fiduciary duty does not apply to suits seeking removal of a trustee rather than recovery of damages.
Relevant Facts: Following her husband’s death in 1993, Doris Conte and her children, Susan and Joseph, served as cotrustees of a family trust. After two years, Susan and Doris discovered that Joseph was not administering the trust in accordance with its terms. Subsequently, Doris was declared mentally incapacitated and removed as cotrustee. Attorney Louis Ditta was named guardian of Doris’s estate. An accounting revealed that both Susan and Joseph misused trust funds for personal expenses and owed approximately $400,000 each to the trust. Joseph was removed as trustee, and Ditta filed suit seeking Susan’s removal as trustee. The probate court removed Susan as trustee following a bench trial. The First Court of Appeals reversed, holding that Ditta’s removal action was barred by the four-year statute of limitations governing claims for breach of fiduciary duty. The supreme court reversed and remanded to the court of appeals. The court noted that the probate court gave multiple reasons for removing Susan that extended beyond discrete breaches of fiduciary duty, describing the position of trustee as a status, like marriage, and recognizing that no statutory limitations period applies to a divorce action. The court also analogized a trustee removal action to an action to remove cloud on title to real property, which is available as long as the injury clouding the title exists. The court expressly left open the question of whether equitable defenses, such as laches or estoppel, apply to removal actions.
FIRST COURT OF APPEALS
City of Houston v. Davis, No. 01-09-00023-CV (May 28, 2009) (Alcala, J.).
Significance: Where a live animal’s purpose is assisting a police officer in carrying out his law enforcement duties on behalf of the government, the government “used” the animal for purposes of determining waiver of sovereign immunity.
Holding: Injuries inflicted by a police dog due to alleged negligence by an on-duty police officer give rise to a waiver of sovereign immunity.
Facts: Davis flagged down a Houston Police Officer to report a vehicle driving dangerously. The officer stopped the driver Davis reported, and Davis pulled his car behind the officer’s patrol car. As Davis approached the officer, the officer’s police dog leapt from the open door of the patrol car and bit Davis. Davis sued the city for damages under negligence and other theories, asserting that the officer’s negligence in handling the dog waived sovereign immunity. The city filed a plea to the jurisdiction based upon sovereign immunity, which the trial court denied. The First Court of Appeals affirmed. The court framed the issue as whether the officer was “using” the dog when it bit Davis because waiver of immunity based upon the use of tangible property requires that the property’s “use” proximately cause the plaintiff’s personal injury. The fact that the officer did not verbally command or physically lead the dog to attack Davis was irrelevant. The court of appeals instead focused on the police dog’s purpose, which was to assist the officer in performing his police duties—duties that he was carrying out when Davis was injured. Because the dog directly caused Davis’s injury and the city—through the officer—was “using” the dog at the time, Davis’s pleadings alleged a valid waiver of sovereign immunity.
FOURTEENTH COURT OF APPEALS
Hadley v. Wyeth Laboratories, Inc., No. 14-07-01055-CV (May 28, 2009) (Yates, J.).
Significance: Chapter 82 of the Texas Civil Practice and Remedies Code does not broaden the common law definition of “seller” to include doctors who prescribe pharmaceuticals while providing medical services.
Holding: A doctor who prescribes drugs during the provision of medical services to patients is not a “seller” entitled to indemnity under Texas Civil Practice and Remedies Code section 82.002(a).
Relevant Facts: Patricia Emig took two diet drugs and later suffered personal injuries. Emig sued Wyeth, the drugs’ manufacturer, and Dr. Hadley, the prescribing physician. Dr. Hadley filed a cross-claim against Wyeth, seeking indemnity as an innocent “seller” under chapter 82. Each party moved for summary judgment, and the trial court granted Wyeth’s motion while denying Dr. Hadley’s. The Fourteenth Court of Appeals affirmed. The court explained that the common law defines a “seller” as someone “engaged in the business of selling” products, and that courts have held routinely that doctors instead engage in providing medical services, notwithstanding their use of products or prescription drugs during this practice. Dr. Hadley urged the court to conclude that chapter 82 broadened the scope of who qualifies as a seller based upon its requirement that a “seller” be “engaged in the business of distributing or otherwise placing” a product into the stream of commerce. He argued that the court should look for guidance to the definition of the term “vendor” found in Texas Insurance Code section 1902.002, which explicitly includes physicians and healthcare providers. Because the legislature presumably was aware of the common law when it passed chapter 82, the court of appeals determined that it easily could have changed the definition of “seller” if that were its intention.
Bailey v. Barnhart Interest, Inc., L. Irvin Barnhart, and Paul F. Barnhart, Jr., No. 14-08-00160-CV (June 16, 2009) (Boyce, J.).
Significance: Judicial estoppel is inapplicable when a bankruptcy trustee moves to reopen a bankruptcy estate to administer previously undisclosed assets for the benefit of the estate’s creditors.
Holding: The bankruptcy trustee may pursue the debtor’s claims against the defendants on behalf of the bankruptcy estate’s creditors even if the debtor would have been judicially estopped from pursuing them herself.
Facts: Sheryl English filed a personal injury suit against the defendants (collectively, “the Barnharts”) in May 2003. English filed for bankruptcy in November 2004. When English filed her bankruptcy schedules and statement of financial affairs, she failed to list her pending suit against the Barnharts as an asset of the bankruptcy estate. English died in January 2005, while her bankruptcy and suit against the Barnharts were still pending. Bankruptcy trustee Joseph Hill filed a no-asset report with the bankruptcy court on February 2, 2005, and the bankruptcy estate was closed. Hill subsequently learned of English’s pending action against the Barnharts and moved to withdraw his no-asset report and reopen the bankruptcy estate on February 22, 2005. The bankruptcy court granted Hill’s motion and reopened the bankruptcy estate on February 23, 2005. On March 21, 2006, the bankruptcy court granted Hill’s motion authorizing him to pursue English’s suit against the Barnharts. Reginald Bailey, as administrator of English’s probate estate, was added later as a plaintiff. The Barnharts moved for summary judgment against Hill and Bailey on grounds of judicial estoppel, asserting that English’s failure to list the suit in her bankruptcy filings foreclosed any party standing in her shoes from subsequently pursuing the suit. The trial court granted the Barnharts’ summary judgment motion. The Fourteenth Court of Appeals reversed and remanded with respect to bankruptcy trustee Hill and reversed, rendered, and dismissed with respect to administrator Bailey. Acknowledging that Hill, as bankruptcy trustee, became the real party in interest upon English’s filing of the bankruptcy petition, the court of appeals analyzed the role of the bankruptcy trustee and his continuing duty to disclose all potential and pending claims. The court determined that Hill had not abandoned the asset in question—English’s suit against the Barnharts—and had followed the required procedures of the Bankruptcy Code upon learning of the asset’s existence. While federal case law at the time the trial court granted summary judgment indicated that a bankruptcy trustee was judicially estopped from pursuing claims which the debtors themselves were judicially estopped from pursuing, the court noted that the federal courts subsequently narrowed this holding so that judicial estoppel would not apply to a bankruptcy trustee who pursues claims for the benefit of the bankruptcy creditors rather than for the debtor’s benefit.