Articles Posted in Texas Supreme Court

by
Bill Head, doing business as Bill Head Enterprises (Head), hired Petroleum Solutions, Inc. to manufacture and install an underground fuel system at the truck stop Head owned and operated. After a major diesel-fuel leak occurred, Respondents sued Petroleum Solutions for its damages. The trial rendered judgment in favor of Head and in favor of third-party defendant Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, on Titeflex’s counterclaim against Petroleum Solutions for statutory indemnity. The court of appeals affirmed. The Supreme Court (1) reversed the judgment as to Head, holding that the trial court abused its discretion in imposing the sanctions of charging the jury with a spoliation instruction and striking Petroleum Solutions’ statute-of-limitations defense, and the trial court’s abuse of discretion was harmful; and (2) affirmed the judgment as to Titeflex’s indemnity claim, holding that Titeflex was entitled to statutory indemnity from Petroleum Solutions. Remanded for further proceedings between Respondents and Petroleum Solutions. View "Petroleum Solutions, Inc. v. Head" on Justia Law

by
The Porretto family owned several acres of property between the Galveston Seawall and the Gulf of Mexico. Due to the State’s repeated recharacterization of the Porretto’s property as public property, the Porrettos had difficulty selling the property. The Porrettos sued the State, arguing that the State’s claims made it impossible for them to sell their property and therefore amounted to a compensable taking. The trial court held that the State’s actions had resulted in a compensable taking and awarded the Porrettos $5.012 million as damages for the lost market value of the property taken. The court of appeals reversed, concluding that the State’s actions did not constitute a taking. The Supreme Court agreed with the court of appeals' conclusion that the State’s conduct did not constitute a taking and affirmed. View "Porretto v. Tex. Gen. Land Office" on Justia Law

by
A mineral lessee operated two wells on two contiguous tracts of land. When one of the wells stopped producing, the lessee pooled parts of the two mineral leases. Landowners subsequently bought a tract of land that included the road the lessee used to access the producing well. The road was across the surface of the lease without production. After traffic on the road increased, the landowners filed suit against the lessee, claiming that the lessee had no legal right to use the surface of their tract of land to produce minerals from the operating well. The trial court determined that the lessee did not have the right to use the road to access the producing lease and granted declaratory and injunctive relief. The Supreme Court reversed, holding (1) once pooling occurred, the pooled parts of the two contiguous tracts no longer maintained separate identities insofar as where production from the pooled interests was located; and (2) therefore, the lessee had the right to use the road to access the pooled part of the tract of land containing the producing well. View "Key Operating & Equip., Inc. v. Hegar" on Justia Law

by
Keystone-Texas Property Holding Corporation owned the Rivercenter Mall and the ground beneath the San Antonio Marriott Riverwalk hotel. Keystone leased the hotel land to Petitioners, who owned and operated the hotel. In 2004, Keystone put the two properties up for sale. After Keystone found a prospective buyer, Petitioners informed Keystone they were interested in buying the land and were not ready to waive their rights under the lease. The deal to sell the properties fell through, and Keystone sued Petitioners for actions Keystone believed scuttled the deal. A jury found for Keystone on all issues and awarded damages for slander of title and tortious interference with a contract. The Supreme Court reversed, holding that there was no evidence Petitioners caused any damages to Keystone. View "HMC Hotel Props. II Ltd. P'ship v. Keystone-Texas Prop. Holding Corp." on Justia Law

by
Borrower borrowed $696,000 from Lenders. The note was secured by a deed of trust covering real property. Guarantor guaranteed the loan under a guaranty agreement that included a general waiver of defenses. Borrower subsequently defaulted on the loan, and Purchaser purchased the secured property in a nonjudicial foreclosure sale for $487,200. The fair market value of the property was $840,000. Purchaser sued Guarantor to recover the $266,748 balance remaining on the note after applying all credits and the proceeds from the sale. Guarantor argued that under Tex. Prop. Code Ann. 51.003 any deficiency owed should be offset by the difference between the fair market value and the foreclosure price. The trial court granted summary judgment for Guarantor. The court of appeals reversed, holding (1) section 51.003 creates an affirmative defense, and (2) by agreeing to a general waiver of defenses in the guaranty agreement Guarantor waived his right of offset. The Supreme Court affirmed, holding that Guarantor waived his statutory right to an offset. View "Mehrdad v. Interstate 35/Chisam Road, L.P." on Justia Law

by
Relators filed suit in Harris County for breach of contract and wrongful foreclosure against a Bank. The parties reached a settlement memorialized in a Rule 11 agreement. The trial court later dismissed all claims but did not incorporate the entire Rule 11 agreement. When the parties disagreed on the terms of the settlement, the Bank foreclosed on the property. Relators then filed suit in Bexar County for wrongful foreclosure. Eleven months after the Harris County lawsuit had been dismissed, Bank filed a motion to enforce the settlement agreement. Relator responded that the trial court’s plenary power expired thirty days after signing the dismissal order, and therefore, the trial court lacked jurisdiction to enforce the Rule 11 agreement. The Harris County subsequently granted the Bank’s motion to enforce the Rule 11 agreement. The Supreme Court conditionally granted Relators’ petition for writ of mandamus and directed the trial court to vacate its order granting the Bank’s motion to enforce the settlement agreement, holding that because the trial court’s plenary power had expired, the court lacked jurisdiction to enforce the agreement. View "In re Vaishangi, Inc." on Justia Law

by
Plaintiffs, the recipients of a home equity loan, reached two loan modification agreements with Defendant, which reduced the interest rate and payments. Plaintiffs subsequently brought this class action against Defendant in the United States District Court, alleging that the loan modifications violated Tex. Const. art. XVI, 50, which sets forth requirements for a new home equity loan. The district court dismissed the case for failure to state a cause of action. On appeal, the Fifth Circuit Court of Appeals asked the Supreme Court whether the requirements of Article XVI, Section 50 apply to the type of loan restructuring in this case. The Supreme Court answered that, as long as the original note is not satisfied and replaced, and there is no additional extension of credit, the Constitution does not prohibit the restructuring of a home equity loan that already meets its requirements in order to avoid foreclosure. View "Sims v. Carrington Mortgage Servs., LLC" on Justia Law

by
A commercial tenant (Tenant) remained in possession of property for over ten years after Tenant lost its lease when the property was sold through foreclosure. The new owner (Owner) continually insisted that Tenant vacate the premises, and Tenant ultimately conceded that it had become a tenant at sufferance. Owner filed suit against Tenant, alleging claims for breach of the terminated lease, for trespass and other torts, and for violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). The trial court entered summary judgment for Tenant on all claims. The court of appeals reversed and remanded in part. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) a tenant at sufferance cannot be liable for breach of a previously terminated lease agreement; (2) a tenant at sufferance is trespassing and can be liable in tort, including tortious interference with prospective business relations; (3) Tenant in this case could not be liable under the DTPA; and (4) Owner in this case could not recover attorney’s fees under the Texas Uniform Declaratory Judgments Act. View "Coinmach Corp. v. Aspenwood Apartment Corp." on Justia Law

by
A commercial tenant remained in possession of premises for six years after it lost its lease when the property was sold through foreclosure. The tenant ultimately conceded that the foreclosure terminated the lease and the tenant became a tenant at sufferance. The property owner sued the tenant for breach of the terminated lease, trespass and other torts, and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). The trial court granted summary judgment for the tenant on all claims. The court of appeals reversed and remanded in part. The Supreme Court affirmed, holding (1) a tenant at sufferance cannot be liable for breach of the previously-terminated lease agreement; (2) a tenant at sufferance is a trespasser and can be liable in tort, including, in this case, tortious interference with prospective business relations; (3) the tenant here was not liable under the DTPA because the property owner was not a consumer; and (4) the owner in this case could not recover under the attorney's fees under the Texas Uniform Declaratory Judgments Act. Remanded. View "Coinmach Corp. v. Aspenwood Apartment Corp." on Justia Law

by
The city of Laredo filed suit to condemn Respondents' property. A jury found that the City had no authorized public use for the property and awarded Respondents attorney's fees and expenses under Tex. Prop. Code 21.019(c), a fee-shifting statute that authorizes the trial court to award a property owner reasonable and necessary fees and expenses when condemnation is denied. The court of appeals reformed the award in part and, as reformed, affirmed. The City appealed, asking the Supreme Court to remand the attorney's fees award for reconsideration because of inadequacies in Respondents' proof. The Supreme Court reversed in part, holding that deficiencies remained in Respondents' proof of attorney's fees. Remanded. View "City of Laredo v. Montano" on Justia Law