Michael Curry, Attorney-Mediator Newsletter
September 2008
Recent Opinions

Medical Malpractice. In this wrongful death case, the survivors argued that the hospital failed to provide echo-cardiogram services on a timely basis to diagnose the decedent's condition. The hospital argued that the decedent's non-disclosure of his diagnosed heart murmur constituted contributory negligence. The trial court submitted the contributory negligence question in a separate (third) phase of the trial rather than in the liability (first) phase of the trial. The Court, while disapproving of the three-phase procedure, held that the hospital was not entitled to a contributory negligence question because there was no evidence that, in reasonable medical probability, the nondisclosure of the heart murmur changed the course of treatment or contributed to the decedent's death. The Court also held that there was legally sufficient evidence to support the gross negligence finding: the hospital knew of the "obvious" necessity for "stat" echo capabilities but failed to provide them, failed to advise the medical staff of that limitation, and failed to provide an effective procedure to respond to the life-threatening situation. Columbia Medical Center of Las Colinas, Inc v. Athena Hogue et. al. ,__S.W.3rd__ (Tex. 8/29/08).

Damages. In this wrongful death case the Court holds that there was no evidence to support the jury's award of damages for loss of inheritance. Evidence that the surviving wife is younger in age and, as projected by the life expectancy tables, would have outlived the decedent had he died a natural death was insufficient without evidence as to the wife's health. Further, the plaintiff could not rely upon the work-life expectancy table alone to calculate the decedent's future work-life because the calculation did not take into account the decedent's health condition in the future. Columbia Medical Center of Las Colinas, Inc v. Athena Hogue et al, , __S.W.3rd__ (Tex. 8/29/08).

Insurance. The "claims made" policy in this case covers claims made against, and reported by, the insured during policy period. A claim was made but not reported during the policy period. The insured asserts entitlement to defense costs by virtue of insurer's waiver and estoppel. Court limits Wilkinson exception by holding that that insurer cannot waive non-coverage or enlarge policy to cover non-covered risks through estoppel. However, if the insurer's actions prejudice the insured, the lack of coverage does not preclude the insured from asserting an estoppel theory to recover the damages (e.g. non-payment of policy benefits) it sustains because of the insurer's actions. Ulico Casualty Co. v. Allied Pilots Association, __S.W.3rd__ (Tex. 8/29/08).

Insurance. Insured was sued for defective siding system which permitted moisture to enter and damage interior wall components. Court holds that property damage "occurs" for purposes of the occurrence-based CGL policy at issue when the actual physical damage to the property occurred, not when it was or should have been discovered. Accordingly, insurer's duty to defend was triggered by allegations that damage occurred during the policy period even though it was inherently undiscoverable until after the policy expired. Don's Building Supply, Inc. v. OneBeacon Ins. Co., __S.W.3rd__ (Tex. 8/29/08).

Insurance. A lawsuit against a cell phone manufacturer alleging that radiation emitted by the phones caused "biological injury" to users triggered a duty to defend under an insurance policy covering "damages because of bodily injury." Zurich Am. Ins. Co. et al v. Nokia, Inc., __S.W.3rd __ (Tex. 8/29/08).

Personal Injury. Employer has no duty to warn an employee of risks commonly known or already appreciated by employee. Brookshire Grocery Co. v. Goss, __S.W.3rd__(Tex. 8/29/08).

Personal Injury. The Court holds that, as a matter of law, a landowner had no duty to protect the decedent invitee from a criminal assault on landowner's property because the ten violent crimes on the premises over the previous 23 month period were not sufficiently frequent and similar to make the murder in question reasonably foreseeable. Trammel Crow Central Texas, Ltd., v. Guitierrez et al, __S.W.3rd__(Tex. 8/29/08)

Personal Injury. Plaintiff, the employee of an independent contractor, was injured when he fell off of a loading dock ramp -- which he had previously used on numerous occasions -- when securing the load on his truck. The Court holds that the absence of rails on the ramp was open and obvious and, thus, as a matter of law the landowner had no duty to warn of the condition. General Electric Co. v. Moritz, __S.W.3rd. __ (Tex. 6/13/08).

Arbitration/Employment. In this retaliatory- discharge case, the Court construes an arbitration agreement which limits the employee's substantive and procedural rights under the Worker's Compensation Statute. The Court holds that the agreement's provisions precluding an award of punitive, exemplary, or liquidated damages or an order reinstating employment were substantively unconscionable and void. A provision requiring all fees related to arbitration to be split equally between the parties (with the employee's contribution capped) was not unconscionable per se but required the arbitrator to assess whether the fee-splitting provisions would prohibit the employee from fully and effectively vindicating statutory rights. Similarly, discovery limitations in the agreement were not unconscionable per se; the arbitrator must determine whether the provisions would prevent vindication of non-waivable rights or would deprive the employee of a fair opportunity to present his claims. The invalid provisions were severable from the agreement to arbitrate which was otherwise enforceable. In re Poly-America LP et. al., __S.W.3rd__(Tex. 8/29/08).

Arbitration. Limits on discovery, applicable to both parties, does not make arbitration unconscionable. Discussing a potential trial setting and sending limited discovery before moving to compel arbitration was not a waiver of same. In re Fleetwood Homes of Texas, L.P., __S.W.3rd__ (Tex. 6/20/08).

Civil Rights. Police officer responds to a call that Plaintiff had sprayed her neighbors with water. Plaintiff produces evidence that when she gave her name but not her date of birth to the officer that she was forcibly arrested resulting in personal injuries. Court holds that no reasonable officer could have believed that the failure to provide a date of birth constituted probable cause to arrest Plaintiff, thereby raising a fact issue on officer's qualified immunity defense. Court also holds that there was evidence that it would have been clear to a reasonable officer at the scene that the force used was excessive to the need and objectively unreasonable under the circumstances. As such, a fact issue was raised on the officer's qualified immunity defense to the claim of excessive force. Dutton v. Hayes- Pupko, __S.W.3rd __ (Tex. App. Austin 8/7/08).

Personal Injury/Governmental Immunity. Firetruck responding to an alarm collides with Plaintiff's vehicle resulting in serious injuries. Court holds that evidence that firefighter failed to wear corrective lenses, activate the siren, and slow as necessary for safe operation before entering the intersection supported trial court's findings that the firefighter did not act in good faith, defeating the defense of qualified immunity and, further, acted recklessly. The defendant was not entitled to the statutory cap on damages under TCPRC § 108.002 because he did not have insurance for the first $100,000 -- his $100,000 insurance policy had a self- insured retention of equal amount; and, the City had no duty to indemnify him because he was grossly negligent. Green v. Dwainia Alford, (Tex. App. -- Houston [14th] 7/15/08).

Subrogation. Subcontractor agrees to indemnify general contractor or property owner for any damage subcontractor causes in the performance of its work. The owner's property sustains water damage as the result of subcontractor's work installing a valve. Subcontractor's insurer pays owner for the damage and insurer brings this subrogation action in the name of the subcontractor to recoup the loss from the valve manufacturer. The Court holds that the subcontractor has standing to bring an equitable subrogation claim because 1) there was evidence that the damages (debt) were primarily owed by another (the manufacturer), 2) the payment was involuntary in that the subcontractor was contractually obligated to pay, and 3) the manufacturer would be unjustly enriched if it was allowed to avoid responsibility. The Court defers the questions of whether the subcontractor's own negligence caused the damages and whether, as such, the subcontractor should be barred from, in effect, pursuing contribution from the manufacturer or the owner's claims against the manufacturer, two actions a tortfeasor is ordinarily not permitted to do. The Court holds that it is only addressing the subcontractor's standing to bring the subgrogation claim, not the merits. Frymire Engineering Company Inc. v. Jomar International, Ltd, __ S.W.3rd __ (Tex. 6/13/08).

Recent Opinions Contd Next Column

Hurrican Ike

The State Bar has created a page for those affected by Ike and for those willing to assist. Click here to get information or to extend an hand.

The Austin Bar Foundation has decided to get the ball rolling by donating $1,000 for needs such as office space, housing, and office supplies and equipment. If you can offer to help in any of these areas, please email ikeresponse@texasbar.com and the State Bar of Texas will match your offer with a request for help from an attorney in need.

Mediation Calendar

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There are no travel or additional charges for mediations within 100 miles of Austin.

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Recent Opinions Contd

Arbitration. A fraudulent-inducement claim advanced to avoid an arbitration provision in a settlement agreement is contractually barred when the arms length agreement between sophisticated parties represented by counsel contained a negotiated unambiguous waiver-of-reliance provision. The provision conclusively negated the element of reliance needed to support the fraudulent-inducement claim. Forest Oil Corp. et al v. McAllen et al, __ S.W.3rd__ (Tex. 8/29/08).

Limitations. The Court holds that fraudulent concealment of wrongdoing will not toll the statute of limitations when, notwithstanding such concealment, the Plaintiff could have discovered the existence of a claim through the exercise of reasonable diligence. Also, although "[t]he absence from this state of a person against whom a cause of action may be maintained suspends the running of the applicable statute of limitations for the period of the person's absence" a person who is not physically present in the state will not be considered absent when he has sufficient contacts with the State to afford personal jurisdiction under the longarm statute. Kerlin, et al v. Sauceda, et al, __S.W.3rd__ (Tex. 8/29/08).

Contracts. Seller agreed to provide backup information for construction and engineering costs three weeks before the proposed closing date. Seller was late in providing the information and Buyer terminated the contract. The Court of Appeals holds that the breach was not material notwithstanding a boilerplate "time is of the essence" clause. The surrounding circumstances indicate that the parties did not intend that a failure to meet this particular deadline would constitute a material breach justifying termination of the contract. MHI Partnership Ltd v. DH Real Estate Investment Company, __S.W.3rd __ (Tex. Civ. App. -- Austin 8/20/08).

Contracts/Attorney's Fees. Attorney engagement letter which described the work to be performed, set forth an hourly rate for fees, and specified a retainer amount was not ambiguous; the client's testimony that there was an agreed cap on fees was barred under the parole evidence rule. David J. Sacks P.C. v. Haden et al, __S.W.3rd__(Tex. 7/11/08).

Partnership. A limited partnership was sued and service was effected on the general partner. The Court states that in a suit against a partner, citation served on that partner authorizes judgment against the partnership as well. But the Court holds that this suit was against the partnership and service on a partner does not authorize a a default judgment against him when he had not been named as a defendant. Kao Holdings, LP v. Young, __S.W.3rd __ (Tex. 6/13/08).

Medical Malpractice. Medical malpractice claim contending that medical errors resulted in permanent loss of brain function. Plaintiffs timely filed medical reports but trial court sustained Defendants' objections thereto and granted Plaintiffs a 30 day grace period to amend. Defendants brought this mandamus action seeking relief from the 30 day extension order. After 4 years on appeal, the Court holds that mandamus should not properly issue and the plaintiffs should be given their 30 day extension. In Re Susan Roberts, __S.W.3rd__(Tex. 6/6/08).

Asbestos Litigation/Retroactive Law. Court of Appeals holds that Texas statute limiting asbestos litigation recoveries was an unconstitutional retroactive law as applied to the plaintiff's pending lawsuit because it impaired the plaintiff's vested rights without giving her an opportunity to preserve them. Satterfield v. Crown Cork & Seal Company, __ S.W.3rd __ (Tex App. -- Austin (8/29/08).

Employment. Fired employee brings Whistleblower suit alleging that he was was fired in retaliation for filing a grievance claiming age and race discrimination. Court grants plea to the jurisdiction holding that claim should have been brought under the the Commission on Human Rights Act: The CHRA provides the exclusive state statutory remedy for public employees alleging retaliation arising from activities protected under the Act. A public employee pursuing a state statutory remedy for retaliation arising from the employee's opposition to conduct made unlawful under the Act may only recover if he satisfies the requirements of the Act. City of Waco v. Lopez, __S.W.3rd__ (Tex. 7/11/08).

Employment. Non-compete agreement signed by employee after he had been employed for some years and after he had received confidential information and training was unsupported by consideration and, therefore, unenforceable. Powerhouse Productions Inc, v. Scott, __ S.W.3rd __ (Tex. App. -- Dallas 8/8/08).

Evidence. Trial court abused its discretion in permitting fact witness to be cross-examined using her ongoing treatment for depression and panic attacks. Absent evidence that the illness or its treatment affected her perception or memory of events it was improper to admit her mental health information for impeachment purposes. Torres v. Danny's Service Company, __ S.W.3rd __ (Tex. App. -- Eastland 7/17/08).

Oil and Gas. Plaintiffs, the owners of mineral interests, sued the owner/operator of adjoining tract ( who was also the operator of Plaintiff's tract) alleging that Defendant had illegally drained gas from Plaintiff's tract. The Court holds that while a lessor with a reversionary interest has standing to bring suit for a subsurface trespass, damages for drainage by hydraulic fracturing are precluded by the rule of capture. The Court also holds that the proper measure of damages for an operator's breach of it's duty to act prudently to protect against drainage is the value of the royalty lost to the lessor because of the lessee's failure to act as a reasonably prudent operator. Coastal Oil and Gas Corp. v. Garza Energy Trust, __S.W.3rd__ (Tex. 8/29/08).

Comparative Responsibility. The Court holds that a party who seeks damages for death or personal injury under a UCC Article 2 breach of implied warranty claim seeks damages in tort and is therefore subject to the proportionate responsibility scheme in Chapter 33 (1995) including the bar to recovery if he is found to be more than 50% responsible. JCW Electronics, Inc. v. Garza et al, __S.W.3rd__ (Tex.6/27/08).


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