Justia Texas Supreme Court Opinion SummariesArticles Posted in Business Law
First United Pentecostal Church of Beaumont v. Parker
The First Pentecostal Church of Beaumont entrusted over one million dollars for safekeeping to The Lamb Law Firm, P.C., and the firm deposited the money into its trust account. In just over one year, the church’s money was gone. The church sued the law firm; Kip Lamb, the firm’s owner; and Leigh Parker, one of the firm attorneys representing the church. The trial court granted summary judgment in favor of Parker. The church appealed, challenging the court’s rulings with respect to the claims for breach of fiduciary duty, civil conspiracy, aiding and abetting, and joint venture. The court of appeals affirmed. The Supreme Court (1) affirmed the judgment on the church’s claims for civil conspiracy, aiding and abetting, and joint venture; but (2) reversed the church’s claim that it was entitled to equitable remedies as to Parker for breach of fiduciary duties he owed to the church, holding that the church did not need to prove that Parker’s breach of fiduciary duty caused actual damages as to the equitable remedies it sought, and the church did not waive its claim for equitable remedies. View "First United Pentecostal Church of Beaumont v. Parker" on Justia Law
Searcy v. Parex Resources, inc.
ERG, a Texas entity, filed suit against a Canadian entity and a Bermudian shareholder in Texas for tortious interference with its share purchase agreement. ERG also filed suit against the Bermudian owner of the Colombian oil and gas operations in Texas for fraud. The court held that when the Canadian entity sought to purchase shares of a Bermudian entity that owns Colombian assets from a Bermudian shareholder and did not intend to develop a Texas business, it did not purposefully avail itself of Texas’s jurisdiction. The court held, however, that Texas courts have specific - although not general - jurisdiction over the Bermudian owner of the Colombian oil and gas operations. In this case, the claims against the Bermudian owner turn on its Texas-based executives’ alleged misrepresentations in Texas to a Texas entity. While these claims alleging malfeasance stemming from the actions of the executives here, and of those to whom they gave marching orders, is relevant to the specific jurisdiction analysis, these contacts are insufficient to confer general jurisdiction over the Bermudian owner. Accordingly, the court affirmed the judgment. View "Searcy v. Parex Resources, inc." on Justia Law
Cornerstone Healthcare Grp. Holding v. Nautic Mgmt.
Defendants are three nonresident private-equity fund limited partnerships and their general partner. The funds invested in a newly created Texas subsidiary that purchased a chain of Texas hospitals from a Texas company. Cornerstone, a Texas company allegedly in the market to purchase the hospitals, filed suit alleging that this conduct was tortious and subjects defendants to Texas’s jurisdiction with respect to claims arising out of that conduct. The court held that the trial court has personal jurisdiction over the Funds and the General Partner where the claims arise out of defendants' Texas contacts and where exercising personal jurisdiction over defendants comports with traditional notions of fair play and substantial justice. Accordingly, the court affirmed the judgment. View "Cornerstone Healthcare Grp. Holding v. Nautic Mgmt." on Justia Law
Doctor Hosp. at Renaissance, Ltd. v. Andrade
Dr. Lozano treated Andrade during her pregnancy and delivered her daughter at Women’s Hospital at Renaissance in Edinburg. The delivery was complicated by the baby’s shoulder dystocia, and Dr. Lozano allegedly engaged in excessive twisting. Andrade sued Lozano, alleging that his negligence caused the child permanent injury, including nerve damage and permanent paralysis of one arm. Andrade later added Renaissance, a limited partnership that owned and operated the Hospital, and RGV, Renaissance’s general partner. Lozano, an independent contractor with admitting privileges at the Hospital, was a limited partner in Renaissance. The Andrades settled with Lozano and nonsuited their claims against Renaissance. RGV moved for summary judgment, arguing that they were not liable for Lozano’s conduct because he was not acting within the scope of the partnership or with partnership authority when providing obstetrical care to Andrade, Tex. Bus. Org. Code 152.303. The trial court denied the motion. The Supreme Court of Texas reversed. The ordinary course of the partnership’s business does not include a doctor’s medical treatment of a patient and that the doctor was not acting with the authority of the partnership in treating the patient; the partnership cannot be liable for the doctor’s medical negligence. View "Doctor Hosp. at Renaissance, Ltd. v. Andrade" on Justia Law
In re M-I, L.L.C.
M-I and NOV compete, providing solid-control equipment to the oil-and-gas industry, including mesh screens that filter solid matter from drilling fluid. In 2012, Russo became business development manager of M-I’s screen division and obtained in-depth knowledge of M-I’s bidding strategies, pricing, customer preferences, solid-control systems, and deployment strategies. In 2014, Russo left M-I to become NOV’s screen division global product line manager. M-I sent Russo a letter, asserting breach of a non-compete agreement he executed when he joined M-I . Russo sought a declaration that the agreement was unenforceable. M-I counterclaimed for breach of the agreement, breach of fiduciary duty, misappropriation of trade secrets, and tortious interference, and asserted third-party claims against NOV. At a hearing on M-I’s application for a temporary injunction, M-I sought to establish its trade secrets by Moore’s oral testimony, and requested that everyone, except counsel, experts, and Russo be excluded from the courtroom. The trial court denied M-I’s request. Concerned about disclosing Moore’s testimony, M-I obtained a recess to petition the court of appeals for a writ of mandamus. M-I submitted, in camera to the court of appeals, Moore's affidavit detailing her proposed testimony . Russo and NOV objected to the affidavit as an ex parte communication. The court of appeals denied their motion for access, along with M-I’s mandamus petition. The Texas Supreme Court conditionally granted mandamus relief. The trial court erred in concluding that the exclusion of NOV’s designated representative from portions of the hearing involving trade secrets would violate due process without balancing the competing interests and must, on remand, conduct that balancing. The court also abused its discretion when it ordered the Moore affidavit disclosed without reviewing it in camera. View "In re M-I, L.L.C." on Justia Law
Wal-Mart Stores, Inc. v. Forte
The Texas Optometry Act prohibits commercial retailers of ophthalmic goods from attempting to control the practice of optometry; authorizes the Optometry Board and the Attorney General to sue a violator for a civil penalty; and provides that “[a] person injured as a result of a violation . . . is entitled to the remedies. In 1992, Wal-Mart opened “Vision Centers” in its Texas retail stores, selling ophthalmic goods. Wal-Mart leased office space to optometrists. A typical lease required the optometrist to keep the office open at least 45 hours per week or pay liquidated damages. In 1995, the Board advised Wal-Mart that the requirement violated the Act. Wal-Mart dropped the requirement and changed its lease form, allowing the optometrist to insert hours of operation. In 1998, the Board opined that any commercial lease referencing an optometrist’s hours violated the Act; in 2003, the Board notified Wal-Mart that it violated the Act by informing optometrists that customers were requesting longer hours. Optometrists sued, alleging that during lease negotiations, Wal-Mart indicated what hours they should include in the lease and that they were pressured to work longer hours. They did not claim actual harm. A jury awarded civil penalties and attorney fees. The Fifth Circuit certified the question of whether such civil penalties, when sought by a private person, are exemplary damages limited by the Texas Civil Practice and Remedies Code Chapter 41. The Texas Supreme Court responded in the affirmative, noting that “the certified questions assume, perhaps incorrectly, that the Act authorizes recovery of civil penalties by a private person, rather than only by the Board or the Attorney General.” View "Wal-Mart Stores, Inc. v. Forte" on Justia Law
Posted in: Business Law, Contracts, Government & Administrative Law, Health Law, Landlord - Tenant, Real Estate & Property Law
Janvey v. Golf Channel, Inc.
The Golf Channel, Inc. entered into an agreement with Stanford International Bank Limited (Stanford) under which Golf Channel received $5.9 million in exchange for media-advertising services. It was later discovered that Stanford used a classic Ponzi-scheme artifice. At issue in this case was whether Golf Channel must return all remuneration paid for services rendered absent proof the transaction benefited Stanford’s creditors. The Fifth Circuit initially ordered Golf Channel to relinquish its compensation, concluding that media-advertising services have “no value” to a Ponzi scheme’s creditors despite the same services being potentially “quite valuable” to the creditors of a legitimate business. On rehearing, the Circuit vacated its opinion and certified a question to the Supreme Court regarding the Texas Uniform Fraudulent Transfer Act (TUFTA), under which an asset transferred with intent to defraud a creditor may be reclaimed for the benefit of the transferor’s creditors unless the transferee took the asset in good faith and for “reasonably equivalent value.” The Supreme Court held that TUFTA does not contain separate standards for assessing “value” and “reasonably equivalent value” based on whether the debtor was operating a Ponzi scheme and that value must be determined objectively at the time of the transfer and in relation to the individual exchange at hand. View "Janvey v. Golf Channel, Inc." on Justia Law
The Boeing Co. v. Paxton
One of the exceptions to the Texas Public Information Act purports to protect information that “if released, would give advantage to a competitor or bidder.” A former Boeing employee submitted a Public Information Act request to the Port Authority of San Antonio for various Boeing corporation information. Boeing provided some of the requested information and withheld other information, claiming that the information withheld was “competitively sensitive information” that would “give advantage to its competitors.” The Attorney General concluded that none of the withheld information was exempt from disclosure under the Act. The trial court agreed with the Attorney General. The court of appeals affirmed, concluding that the exception protects the purchasing interests of a governmental body when conducting competitive bidding but not those of a private party that competes in the process. The Supreme Court reversed, holding (1) a private party may assert the exception to protect its competitively sensitive information; and (2) because Boeing demonstrated that the information at issue was competitively sensitive and will give advantage to its competitors if released, Boeing’s objection to the mandatory release of this information is sustained. View "The Boeing Co. v. Paxton" on Justia Law
Posted in: Business Law
Sneed v. Webre
In this case, a shareholder of a closely held parent corporation asserted a derivative lawsuit on behalf of the corporation’s wholly owned subsidiary against one of the subsidiary’s directors and several of the subsidiary’s officers, employees, and managers for breach of fiduciary duty and fraud. The trial court concluded that the shareholder did not have standing to bring the derivative lawsuit. The court of appeals reversed, holding that the shareholder had double-derivative standing to sue and that the business judgment rule did not impose a jurisdictional barrier that the shareholder had to overcome to bring the lawsuit. The Supreme Court affirmed, holding (1) the enactment of the Texas Business Corporation Act (TBCA) did not alter the way the business judgment rule applies to the merits of derivative lawsuits alleging that the directors or officers of a closely held corporation breached their duties to the corporation; (2) to achieve standing to assert a derivative proceeding under TBCA, a shareholder plaintiff is not required to plead and prove that the board of directors acted outside the protections of the business judgment rule in deciding not to pursue the corporation’s cause of action; and (3) Texas recognizes the concept of double-derivative standing. View "Sneed v. Webre" on Justia Law
Posted in: Business Law
In re Longview Energy Co.
To suspend execution of a money judgment on appeal, a judgment debtor must post security as required by Tex. Civ. Prac. & Rem. Code 52.006 and Tex. R. App. P. 24. The security must cover compensatory damages, interest, and costs, but is subject to caps. In this case, Longview Energy Company obtained a judgment against five defendants for breach of fiduciary duty. Defendants appealed and together posted a $25 million bond as security to supersede enforcement of the judgment. The trial court applied the caps separately to each of four jointly and severally liable defendants, requiring the four defendants to post security equal to the lesser of $25 million or fifty percent of Defendants’ net worth. The court of appeals reversed the security order, concluding that Defendants were together required to post only $25 million in security to supersede the judgment as to them all. All parties petitioned the Supreme Court for relief by mandamus. The Supreme Court denied mandamus relief, holding (1) the money judgment award at issue was not for “compensatory damages,” and therefore, the Court need not consider whether the court of appeals correctly applied the caps on security; and (2) the trial court did not abuse its discretion in ordering post-judgment discovery. View "In re Longview Energy Co." on Justia Law