Fiduciary Duty/Remedies. Partner A bought out Partner B. Partner A agreed to continue to employ Partner B and Partner B agreed not to compete. The trial court found that Partner B's non-disclosure that he had already set up a competing company at the time of the sale of his partnership interest was a breach of his fiduciary duty amounting to fraud in the inducement. The trial court awarded actual damages, forfeiture of consideration and punitive damages. The Texas Supreme Court held that when a partner in a business breached his fiduciary duty by fraudulently inducing the other partner to buy out his interest, the consideration received by the breaching party for his interest in the business was subject to forfeiture as a remedy for the breach, in addition to other damages that resulted from the tortious conduct. The Court also held that the amount of lost profits awarded by the trial court was not supported by the evidence; however, since there was legally sufficient evidence to prove a lesser, ascertainable amount of lost profits with reasonable certainty, the cause was remanded to consider the possibility of a remittitur or new trial on the lost profit damages. The Court held that Partner A's agreement to continue to lease a building owned by Partner B - offered as evidence of additional consideration subject to forfeiture -- was a consistent collateral agreement which did not vary or contradict the terms of the primary agreement and did not violate the parol evidence rule. ERI Consulting Engineers et al v. Swinnea et al, __ S.W.3rd __ (Tex. 5/7/10).

Premises Liability. The plaintiff brought suit against a bar after he was seriously injured in a brawl which erupted after ninety minutes of recurrent threats, cursing, and shoving by two rival groups of intoxicated bar patrons. The bar employees did not call the police or take other actions until after the brawl had broken out. A jury found the bar 51% liable for the injuries suffered by the plaintiff. The Texas Supreme Court affirmed, holding that the bar breached a duty to use reasonable care to protect the plaintiff from imminent assaultive conduct when that unreasonable risk of harm became apparent to the bar which had readily available opportunities to reduce the risk but instead took no action. The plaintiff's failure to leave the bar before the fight was a factor in his comparative fault but did not prevent recovery. Del Lago Partners Inc. et al v. Smith, __ S.W.3rd __ (Tex. 4/2/10).

Premises Liability. The plaintiff sued a hospital after he slipped and fell on ice on the hospital's driveway. The Texas Supreme Court affirmed a summary judgment for the hospital holding that as a matter of law naturally occurring ice does not pose an unreasonable risk of harm. The Court rejected the plaintiff's argument that the ice was not "naturally occurring" holding that salting, shoveling, or applying deicer to a natural ice accumulation does not transform it into an unnatural one. Scott and White Memorial Hospital et al v. Fair, __ S.W.3rd __ (Tex. May 7, 2010).

Premises Liability/Health Care Liability. The plaintiff alleged he was injured when he slipped on a gelatinous substance, used to conduct sonogram scans, dropped on the floor of his hospital room by a nurse when she shook her hands following the procedure on the way to the restroom. The hospital brought an interlocutory appeal contending this was a health care liability claim for which the plaintiff had failed to file an expert report. The Court of Appeals affirmed the trial court's denial of the hospital's motion to dismiss. The Court held that the plaintiff's claims were for negligence and premises liability because they involved no professional judgment, required no expert testimony to establish liability, and were merely incidental to his medical care. St. David's Healthcare Partnership et al v. Esparza, __ S.W.3rd __ (Tex App - Austin 5/13/10).

Personal Injury/Evidence. Four family members were killed in a collision involving a tractor trailer. The Texas Supreme Court reversed a judgment for the Plaintiffs against the trucking company. At issue on appeal was the admissibility of (1) testimony of the plaintiffs' accident reconstruction expert and (2) evidence relating to the defendant driver's status as an illegal immigrant who had been previously deported. The Court held that the plaintiff's expert's testimony was admissible since it was reliable: his observations, measurements, and calculations were tied to the physical evidence and provided support for his conclusions and theory and the testimony was not conclusory or subjective. The Court held, however, that it was reversible error to admit evidence of the driver's immigration status and his misrepresentation of same. The Court reasoned that the driver's immigration status was not relevant to the negligent entrustment or hiring claims because his status did not create a foreseeable risk that he would drive negligently. The driver's misrepresentation about his status was a collateral matter which could not be used for impeachment and was prohibited by Texas Rule of Evidence 608(b). His deportation conviction did not meet the admissibility requirements of Rule 609. The Court held that the repeated references to the driver's immigration status were an appeal to prejudice which far outweighed any probative value. TXI Transportation Company v. Hughes, __ S.W.3rd __ (Tex. 3/12/10).

Personal Injury.Two surviving sons brought a wrongful death/survival action against a nursing home and its employees who dropped the plaintiffs' mother while transferring her, resulting in head injuries leading to her death. At the beginning of the trial - the third one in the case -- the defendants stipulated to their joint and several liability for negligence proximately causing the death of the decedent. The Court of Appeals affirmed a substantial judgment for the plaintiffs, rejecting the defendants' arguments that the trial court wrongfully refused their jury instructions and that there was insufficient evidence to support the verdict. The Court held that the trial court did not improperly refuse the defendants instructions that the jury not consider the physical condition of the plaintiffs' mother's after the injury or its effect on them in awarding damages to the sons; the Court distinguished a case cited by the defendants holding that bystander mental anguish damages are unrecoverable in medical malpractice cases. The Court also rejected the claim that the trial court should have instructed the jury not to consider the nature of the conduct, acts or omissions of the defendants. The Court reasoned that the jury was correctly charged on the damage issues and the instruction was unnecessary to enable them to render a proper verdict. The Court held that the evidence was sufficient to support the awards to the mother for her pain and suffering during the time after the injury and before she lost consciousness and to her sons for their loss of companionship and society and mental anguish. Living Centers of Texas et al v. Penalver, __ S.W.3rd __ (Tex. App. - San Antonio 4/28/10).

Texas Tort Claims Act. The plaintiff brought suit under the Texas Tort Claims Act for injuries she sustained when she drove onto an excavated road that was not properly blocked. The Texas Supreme Court dismissed the suit on the grounds that the plaintiff failed to give timely notice under TCPRC § 101.101(a). The Court rejected the plaintiff's argument that the police report provided the City with actual notice that the plaintiff had been injured under TCPRC § 101.101(c) because the report merely gave the officer's description of the cause of the accident without suggesting or indicating that the City was at fault for the missing barricades. City of Dallas v. Carbajal, __ S.W.3rd __ (Tex. 5/7/10).

Sovereign Immunity. Parents of a patient brought a malpractice suit against a Baylor University resident physician at a public hospital. The trial court denied the physician's motion for summary judgment based on immunity. The physician brought an interlocutory appeal. The plaintiffs sought dismissal of the physician's interlocutory appeal on the grounds that the physician was not a state employee entitled to same. The Texas Supreme Court reversed holding that a resident physician at a private medical school is to be treated like a state employee for purposes of TCPRC § 51.014(5) when the underlying litigation arises from a residency program coordinated through a supported medical school at a public hospital. The Court concluded that the Legislature intended to treat Baylor like other governmental entities providing services at public hospitals, extending the same protection and benefits to Baylor and its residents who work at these hospitals. Klein et al v. Hernandez, __S.W.3rd __ (Tex. 5/7/10).

Medical Malpractice. The plaintiff brought suit against doctors and nurses after an unattended bandage placed below her knee resulted in necrosis and, ultimately, amputation of her leg. The defendants contended that her expert reports were untimely and inadequate. The Court of Appeals affirmed the lower court order finding the reports sufficient. The Court rejected the argument by later-added defendants that the plaintiff's expert reports were untimely because they were not filed within 120 days of the Original Petition. The Court held that the time for filing an expert report under TCPRC §74.351(a) is measured from the date the claimant files the pleading that first asserts a health care liability claim against that physician, not from the date of the Original Petition. The Court held further that the plaintiff's experts were qualified to offer opinions on the standard of care for the defendants' various medical specialties because the statute focuses not on the defendants' areas of specialty, but on the medical condition involved in the claim. The plaintiff's experts were qualified to provide expert testimony regarding the medical condition involved. Finally the Court held that the plaintiff's expert physician report constituted a good faith effort to provide a fair summary of the expert's opinions regarding causation because it provided enough information to (1) inform the defendants of the specific conduct the plaintiff called into question and (2) provided a basis for the trial court to conclude that the claims have merit. Hayes et al v. Carroll, __ S.W.3rd __ (Tex. App. - Austin 5/14/10).

Insurance. A highway truck collision resulted in multiple deaths and injuries. The plaintiffs made a Stowers Demand offering to settle in exchange for policy limits available under the insurance policies issued by primary and excess carriers. The demands were not met, the plaintiffs prevailed at trial after which the insurers settled all of the outstanding claims for the available policy limits. Two of the insured defendants brought this action claiming, among other things, that the insurers violated their Stowers duty to accept reasonable settlement offers within policy limits, which caused the insured defendants to incur additional attorney's fees and expenses that they would not have otherwise incurred. The issue on appeal was whether a settlement offer triggers an insurer's duty to settle when the plaintiffs' settlement terms require funding from multiple insurers, and no single insurer can fund the settlement within the limits that apply under its particular policy. The Court of Appeals held that it did not. The injured plaintiffs' demand, was directed toward multiple policies and all of the insurers together, in exchange for a release from multiple plaintiffs. There was no offer to release their claims against those insured under a particular policy in exchange for the limits available under that policy. Further as to the defendant excess carrier, the Court held that the carrier's Stowers duty could arise only after the primary carrier (1) received a settlement demand within the primary policy's limits and (2) acting as an ordinarily prudent insurer, it tendered the limits of that policy. That did not happen and the summary judgment in favor of the insurers was affirmed. AFTCO Enterprises Inc et al v. Acceptance Indemnity Insurance Company et al, __ S.W.3rd __ (Tex. App. - Hou [1st Dist.] 5/13/10).

Probate/Limitations. The plaintiff brought bill of review proceedings in both district and probate courts seeking to reopen the estate of a man she alleged was her father, to obtain a declaration of heirship and to set aside a prior district court judgment reciting that the decedent had no children. The district court granted a summary judgment against the plaintiff. The Texas Supreme Court affirmed the district court, holding first that the suit to declare heirship was a direct attack on the prior judgment - a matter over which the district court, and not the probate court, had jurisdiction. On the merits, the Court held that the residual four year limitations statute applied to an heirship claim such as this, that limitations had long since run and that the discovery rule did not apply to heirship and inheritance claims made by non-marital children or to bill of review claims to set aside probate judgments. Frost National Bank et al v. Fernandez, __ S.W.3rd __ (Tex. 4/16/10).

Texas State Bar Annual Meeting - June 10-11, Fort Worth. Brochure.

Mandatory Professional Liability Ins. Disclosure Not Required.

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U.S. Supreme Court on the discovery rule when scienter is an element of the cause of action.

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Limitations. Plaintiff sued his former employer, alleging that it had illegally discriminated against him based on his age, in violation of the TCHRA. In the first appeal the Texas Supreme Court reversed a judgment for the Plaintiff, holding that the amount in controversy exceeded the jurisdiction of the County Court. The Plaintiff re-filed the suit in District Court invoking the tolling provision in TCPRC § 16.064 for suits re-filed in the proper court within 60 days of dismissal for want of jurisdiction. The defendant again sought dismissal which was denied by the trial court. The Texas Supreme Court granted mandamus requiring dismissal, holding that the Plaintiff failed to carry his burden of proving under §16.064(b) that the first action was not filed "with intentional disregard of proper jurisdiction." The Court concluded that the Plaintiff's decision was a tactical one, not a good faith mistake. In re United Services Automobile Association, __ S.W.3rd __ (Tex. 3/26/10).

Forum Non Conveniums. An Australian citizen employed by an Australian company, was killed while working on a drilling rig in the territorial waters of Singapore. His wife and estate brought suit in Dallas County against the corporate owners of the drilling rig which had offices there. The Texas Supreme Court , after considering the six factors set forth in TCPRC § 71.051(b), granted mandamus holding that the trial court abused its discretion by failing to dismiss the case on forum non conveniens grounds. In Re Ensco Offshore International Company et al, __ S.W.3rd __ (Tex. 5/7/10).

Long Arm Jurisdiction. A German manufacturer created a Texas corporation to distribute its products in Texas. The plaintiff was injured by one of those products and brought suit against the German company and the Texas distributor. The Texas Supreme Court affirmed a denial of the German company's special appearance. The Court held that a manufacturer is subject to specific personal jurisdiction in Texas when it intentionally targets Texas as the marketplace for its products, even when it uses a distributor-intermediary. Spir Star AG v. Kimich, __ S.W.3rd __ (Tex. 3/12/10).

Long Arm Jurisdiction. A Mexican manufacturer transported its product to the Laredo bridge where it had arranged for a Texas company to transport it to New Mexico. Along the way, the truck overturned injuring the driver who sued the Texas company. The Texas company filed a third party action against the manufacturer for indemnity and contribution. The manufacturer filed a special appearance challenging personal jurisdiction. The court of appeals found specific jurisdiction through purposeful availment of Texas benefits, establishing minimum contacts. The Texas Supreme Court reversed holding that merchant's decision to ship its goods with a third-party shipper that will travel through Texas to a recipient outside of Texas does not, by itself, constitute purposeful availment. The exercise of jurisdiction requires that the merchant actually direct sales to the forum state, not through it. The Court did not reach the question of whether general jurisdiction based on other contacts with the State may have existed. Zinc Nacional, S.A. v. Bouche Trucking, Inc, __ S.W.3rd __ (Tex. 4/9/10).

Service/Long Arm Statute. An insurer brought a subrogation action against an out of state defendant which suffered a default judgment when it failed to answer. The defendant brought a restricted appeal contending there was error on the face of the record in that it did not affirmatively show compliance with the statute governing service on the Secretary of State. The Court of Appeals agreed. The Court held that pleading that the defendant "is a foreign corporation and may be served with citation by serving the Texas Secretary of State via the long arm statute" failed to allege the facts necessary to support service through the statutory method of service invoked. Watts Water Technologies, Inc. v. Farmers Insurance Exchange, __ S.W.3rd __ __ (Tex. App. - Austin 5/14/10).

Default Judgment. The plaintiff brought suit for sexual harassment seeking actual damages. The defendant failed to answer or appear. At the default judgment hearing the plaintiff read a "trial amendment" into the record adding a plea for punitive damages. A default judgment was rendered for actual and punitive damages. The defendant brought a restricted appeal contending there was error apparent on the face of the record because the default judgment was based on an amended pleading that had not been served. The Court of Appeals agreed holding that a non-answering defendant must be served with a more onerous amended petition in order for a default judgment to stand. Olive Tree Apartments et al v. Trevino, __ S.W.3rd __ (Tex App - San Antonio 5/5/10).

Forum Selection Clause. A purchaser of a drilling rig sued its seller in Wise County, Texas for damages. The purchase contract contained a forum selection clause reciting the purchaser's agreement that the courts in Marion County, Indiana had exclusive jurisdiction for the determination of all disputes arising under the contract (without prejudice to the seller's right to commence action in any court with proper jurisdiction). The lower courts denied the seller's motion to dismiss the lawsuit. The Texas Supreme Court granted mandamus enforcing the forum selection clause and dismissing the case. The Court held that an earlier invoice, not containing the forum selection clause, was controlled by the purchase contract and that the purchaser's brief testimony that its daily operations would "basically cease" if it were required to pursue a lawsuit in Indiana failed to show that litigating the case in Indiana would be so inconvenient as to effectively deny the company its day in court. In Re Laibe Corporation, __ S.W.3rd __ (Tex. 3/26/10).

Forum Selection Clause. A German manufacturer had a California affiliate which entered into a distribution agreement with a company from Georgia headquartered in Austin. The German company was added as a party to the distribution agreement. A "Standard Terms and Conditions" exhibit to the agreement applicable to "sales" provided that Alameda, California courts had exclusive jurisdiction and venue over any dispute arising out of the agreement. A dispute arose and the Georgia company filed suit in Austin alleging contractual and extra-contractual claims. The trial court denied the defendants motion to dismiss. The Texas Supreme Court granted mandamus requiring dismissal. The Court rejected the argument that the forum selection clause only applied to claims specifically related to "sales" and not to any other claims based on the parties' relationships. The Court reasoned that the Distribution Agreement and the exhibit were not separable and that the clause applied to all dispute arising out of the agreement and not simply those referred to in the exhibit or with the California affiliate. In Re Lisa Laser USA, Inc. et al, __ S.W.3rd __ (Tex. 4/16/10).

Jurisdiction/School Law. A teacher was terminated for administering corporal punishment to a student. The School Board adopted the hearing examiner's recommendation of termination. The teacher appealed and the Commissioner of Education reversed the School Board. The School District brought an appeal in Travis County. The Commissioner did not agree with venue outside the school district's county and sought to have the suit dismissed. The Texas Supreme Court held that under TEX. EDUC. CODE § 21.307(a) the consent of the Commissioner is not required for a judicial appeal in Travis County. Presidio ISD v. Scott, __ S.W.3rd __ (Tex. 4/23/10).

Non-Suit/Res Judicata. The plaintiff brought an underinsured motorist claim against his insurer. On the day before trial he filed a notice of non-suit dismissing his case "without prejudice." No order was entered. The trial court later dismissed the case "in full with prejudice for want of prosecution." The plaintiff contends he did not receive the courts notice that the case would be dismissed for want of prosecution or the courts order dismissing same. When he later re- filed the case, the trial court granted the insurer's motion for summary judgment based on res judicata. The Texas Supreme Court affirmed. The Court held that while the trial court's order dismissing the case "with prejudice" was erroneous, the order was not void but merely voidable. The plaintiff's failure to appeal the order directly or by bill of review (if no notice was received) made it a final judgment for purposes of res judicata. The Travelers Insurance Company v. Joachim, __ S.W.3rd __ (Tex. 5/14/10).

Arbitration. The plaintiff, a hospice worker, was injured when she fell at a patient's home in El Paso. When she sued her non-subscriber employer, the employer sought to enforce an arbitration clause in the Occupational Injury Benefit Plan it provided. The trial court found the clause to be unconscionable because it provided that the arbitration panel be composed of Dallas arbitrators. The Texas Supreme Court granted mandamus compelling arbitration. The Court rejected the plaintiff's claim that requiring the arbitration in Dallas would be too expensive because her assertions about costs relating to witnesses and medical experts were conclusory and lacking specific detail. The Court noted that the arbitrator would have the authority to modify the contract terms if the costs hindered the vindication of her rights. The Court also rejected the plaintiff's claims that the arbitration clause was invalid under the Workers Compensation Act, or violated the Tenth Amendment, or was not supported by consideration. In re Odyssey Healthcare, Inc, et al, __ S.W.3rd __ (Tex. 5/7/10).

Arbitration. An ex-employee received a favorable arbitration award against his former employer. The employer petitioned the district court to vacate, modify, or correct the award on the grounds that it was so contrary to the evidence that it was arbitrary and capricious and therefore the arbitrator must have been biased. The employee sought confirmation of the award. The court denied confirmation, vacated the arbitration award, ordered the matter be resubmitted to a new arbitrator who was instructed to decide the matter consistent with the trial courts findings of fact in favor of the employer. The employee appealed and the court of appeals reversed the trial court and confirmed the award holding that "[t]he arbitrator did not err so egregiously as to imply bad faith or a failure to exercise honest judgment". The employer appealed to the Texas Supreme Court contending that the Texas Arbitration Act did not permit an appeal where a new arbitration hearing was ordered. The Texas Supreme Court affirmed, holding that the Court of Appeals had jurisdiction under TAA §171.098(a) because the rehearing ordered was not simply to clarify the award or correct an obvious error but was a denial of confirmation of the award for which the TAA permits appeal. East Texas Salt Water Disposal Company, Inc. v. Werline, __ S.W.3rd __ (Tex. 3/12/10).