Justia Texas Supreme Court Opinion Summaries

Needy children in Texas receive orthodontic care through Medicaid, which is administered by the Texas Health and Human Services Commission (HHSC). HHSC contracted with Conduent State Healthcare, LLC (formerly known as Xerox Corporation and ACS State Healthcare, LLC) to review and approve prior-authorization requests for these services. After Conduent allegedly approved requests without adequately assessing medical necessity, legal disputes arose. The State of Texas pursued civil penalties against Conduent for violating Medicaid policy, resulting in a settlement. Separately, dentists, including Diana Malone, DDS; Scott Malone, DDS; and M&M Orthodontics, PA, settled Medicaid-fraud claims by paying $2 million. Subsequently, these dentists sued Conduent and the State, alleging tortious conduct by Conduent in approving requests without proper review.In Travis County District Court, the State’s plea to the jurisdiction based on sovereign immunity was granted, dismissing it from the case. Conduent’s plea to the jurisdiction, which invoked derivative sovereign immunity and the election-of-remedies provision in the Texas Tort Claims Act, was denied. Conduent appealed this interlocutory order. The Court of Appeals for the Third District of Texas affirmed the district court’s denial of Conduent’s plea, addressing Conduent’s immunity arguments on the merits. A dissenting justice argued that the appeal should have been dismissed for lack of appellate jurisdiction.The Supreme Court of Texas reviewed whether the court of appeals had jurisdiction to hear Conduent’s interlocutory appeal. It held that Conduent, as a private contractor, is not a “governmental unit” under the relevant statutory definitions, and thus cannot utilize Section 51.014(a)(8) or Section 51.014(a)(5) to appeal the denial of its jurisdictional plea. The Supreme Court vacated the court of appeals’ opinion and judgment and remanded the case to the district court. View "CONDUENT STATE HEALTHCARE, LLC v. M&M ORTHODONTICS, PA" on Justia Law

A public utility owned by a municipality owned poles used for distributing electric power. Other companies, such as telephone and cable providers, attached their equipment to these poles under agreements with the utility. In 1984, one such agreement allowed a cable company’s predecessor to attach equipment in exchange for an annual fee, with an escalator clause for potential increases. The contract required both parties to comply with all applicable laws that affected their rights and obligations. Over time, the cable company (later known as Spectrum) paid increasing rates, while another company (AT&T) continued to pay the original rate. After changes to state law in 2005 prohibited discrimination in pole-attachment rates and capped those rates at a federal maximum, the utility began invoicing both companies at the higher rate. Spectrum paid the higher invoices, but AT&T continued to pay the older, lower rate.Legal disputes ensued. Spectrum sued the utility, arguing the utility had breached the contract and violated statutory requirements by charging discriminatory rates. After initial proceedings before the Public Utility Commission and the trial court, the Third Court of Appeals held that the utility had not violated the statute because it had invoiced both companies at the same rate, and the Thirteenth Court of Appeals later ruled that the contract did not incorporate new statutory requirements arising after the agreement’s formation.The Supreme Court of Texas reviewed the case. It determined that the parties’ contract, by its express language, incorporated future changes in law affecting the parties’ rights and obligations. The court held that the relevant statutory provisions applied to the agreement and that Spectrum could pursue its breach-of-contract claim based on the utility’s alleged failure to comply with these laws. The Supreme Court of Texas reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "SPECTRUM GULF COAST, LLC v. CITY OF SAN ANTONIO" on Justia Law

A man was charged with several serious crimes and, at trial, was represented by attorneys from a law firm. His mother paid $300,000 in legal fees to the firm, based on representations made by his defense counsel about the services to be provided. The man was convicted of some charges and sentenced to prison. After an unsuccessful appeal, he and his mother sued the defense attorneys and their firm for professional negligence, breach of fiduciary duty, breach of contract, negligent misrepresentation, and fraud. They claimed that the attorneys had provided ineffective representation, failed to deliver on promises related to legal services and use of retainer funds, overcharged, failed to account for fees, and did not return unearned funds.The trial court dismissed all claims with prejudice under Texas Rule of Civil Procedure 91a, finding that the mother had no standing to sue because she was not a client, and that the Peeler doctrine barred all of the son’s claims because he had not been exonerated. The Court of Appeals for the Third District of Texas affirmed, holding that the mother lacked standing and that the Peeler doctrine categorically barred all of the son’s claims, including those about excessive fees and failure to account.The Supreme Court of Texas clarified that Peeler v. Hughes & Luce bars a convicted criminal defendant from suing defense counsel for legal malpractice unless exonerated, but does not categorically bar contract or fraud claims unrelated to the conviction. The court held that the mother had standing to bring claims for her own direct economic losses, such as overpayment or failure to return unearned fees, but could not bring claims based on an attorney-client relationship. The court affirmed the dismissal of some claims, reversed as to others, and remanded to the court of appeals to consider additional issues, including whether some claims are really fractured malpractice claims and statute of limitations defenses. View "CARDEN v. MINTON, BASSETT, FLORES & CARSEY, P.C." on Justia Law

A grocery store operated by the petitioner leased space in a shopping center owned by the respondent. As the lease’s expiration approached, the store attempted to renew but was unsuccessful in reaching terms. During negotiations, a representative of the store became suspicious that a competitor, El Rancho, might be taking over the location after hearing about a possible “big surprise” involving El Rancho. Despite these suspicions, the store did not ask the landlord if other negotiations were underway. The landlord had in fact already agreed to lease the space to the competitor, but continued to negotiate with the store. When the store eventually discovered the new lease, it was unable to secure an alternate location and ultimately ceased operations.A jury found for the store on its fraud claims, and the trial court awarded substantial damages. The trial court also found for the landlord on a counterclaim for breach of contract. On appeal, the Court of Appeals for the Fifth District of Texas reversed the trial court’s judgment in favor of the store, holding that the store’s reliance on the landlord’s representations was not justified as a matter of law because the existence of “red flags” negated justifiable reliance. The appellate court also held there was sufficient evidence to support the landlord’s counterclaim and remanded for a new judgment in the landlord’s favor.The Supreme Court of Texas granted review and affirmed the judgment of the court of appeals. The Supreme Court held that the store’s reliance on the landlord’s representations was unjustifiable as a matter of law because, despite being a sophisticated party and having reason to be suspicious, the store failed to exercise reasonable diligence by not inquiring further when it suspected the property might not be available. The case was remanded for entry of judgment favoring the landlord on its counterclaim. View "MAYA WALNUT LLC v. LY" on Justia Law

A commercial meat supplier delivered frozen meat products to a distributor over a series of transactions, each accompanied by an invoice. The distributor did not pay all of the invoices, claiming that some of the meat was spoiled, while the supplier insisted that the distributor simply failed to pay what was owed and invented the spoiled-meat justification later. The supplier sued for breach of contract and, alternatively, for quantum meruit (an equitable claim for the value of goods or services provided), seeking payment for the unpaid invoices. The distributor counterclaimed for breach of contract, alleging damages from the spoiled meat.At trial in a Texas district court, the jury was asked whether the distributor failed to comply with the agreements to pay for the meat and answered no. However, the jury found in favor of the supplier on its quantum meruit claim and awarded damages. The jury found that a reasonable attorney’s fee for the supplier’s attorneys was $0. The trial court entered judgment for the supplier on the quantum meruit claim and awarded the supplier its requested attorney’s fees, disregarding the jury’s finding. The Fourth Court of Appeals affirmed the trial court’s judgment on both quantum meruit and attorney’s fees.The Supreme Court of Texas concluded that the supplier’s provision of meat was covered by express agreements between the parties and, as a matter of law, quantum meruit recovery is barred when a valid contract governs the subject matter. Because the supplier was not entitled to recover in quantum meruit, it also could not recover attorney’s fees. The Supreme Court of Texas reversed the relevant portions of the court of appeals’ judgment and rendered a take-nothing judgment in favor of the distributor. View "CHAMPION FOOD SERVICE, INC. v. PROALAMO FOODS, L.L.C." on Justia Law

A Texas city created a local government corporation to finance public improvements in a designated district. The corporation borrowed $17.4 million from a Wisconsin bond issuer, which funded the construction of improvements, with the city agreeing to purchase those improvements over time using assessments levied within the district. The financing structure involved a promissory note and other contracts, but the corporation did not submit these documents to the Texas Attorney General for required examination and approval. After a change in city leadership and financial difficulties, the city and corporation sued the bondholder and related parties, arguing that the failure to obtain Attorney General approval rendered the transaction void and that the financing arrangement violated provisions of the Public Improvement District (PID) Act.The trial court (District Court of Williamson County) granted summary judgment for the bondholder and other defendants, holding that while submission to the Attorney General was required, failure to do so did not void the transaction. The court also determined that the PID Act had not been violated, and it rejected challenges to certain evidence and to the award of attorney’s fees. The Court of Appeals for the Third District of Texas affirmed, agreeing that the note and contracts were not void and that statutory requirements regarding bond issuance did not apply to the transaction.The Supreme Court of Texas reviewed the case and affirmed the judgment of the court of appeals. The court held that failing to submit the promissory note and supporting contracts to the Attorney General removes the statutory defense of incontestability but does not render the transaction void or unenforceable. It further held that the transaction did not violate the PID Act because the relevant restrictions applied only to bonds issued by the city or its corporation, which was not the case here. The court also found no reversible error regarding evidentiary rulings or the award of attorney’s fees. View "RIVER CREEK DEVELOPMENT CORPORATION v. PRESTON HOLLOW CAPITAL, LLC" on Justia Law

An Oklahoma company, formed to acquire mineral rights in Appalachia, alleged that two Texas parties failed to convey certain West Virginia mineral interests as contractually agreed. The Oklahoma company, which included non-Texas owners and participants, had funded the purchase of these rights, but a number of mineral deeds were recorded in the name of the Texas seller rather than the buyer. As a result, royalties from those mineral rights were paid to the seller. The Oklahoma plaintiff sought to compel the Texas defendants to reform the deeds, perform their contractual obligations, declare the plaintiff’s entitlement to the royalties, and enjoin the defendants from transferring the disputed interests.The 141st District Court in Tarrant County, Texas, denied the defendants’ plea to the jurisdiction and ultimately granted summary judgment for the plaintiff, awarding specific performance, deed reformation, declaratory relief, an injunction, and monetary relief. The court found it had jurisdiction over the parties and the contract, even though the mineral rights were located in West Virginia. On appeal, the Court of Appeals for the Second District of Texas reversed, holding that Texas courts lacked subject-matter jurisdiction because the suit’s gravamen was the adjudication of title to foreign (West Virginia) real property.The Supreme Court of Texas reviewed the matter and disagreed with the appellate court’s application of the so-called “gist” rule. The Supreme Court held that Texas courts with personal jurisdiction over the parties may issue in personam judgments concerning contractual obligations to convey out-of-state real property, as long as the judgment binds only the parties and does not purport to establish or alter title to the property by the court’s own force. The Supreme Court reversed the appellate court’s judgment and remanded for consideration of remaining issues. View "BRAXTON MINERALS III, LLC v. BAUER" on Justia Law

The case involves disputes among the descendants of Roy and Grace Whittenburg, who were beneficiaries of separate trusts holding interests in a large ranch spanning New Mexico and Colorado. After years of litigation over the ranch’s ownership, the parties signed two settlement agreements: a Partial Settlement Agreement (PSA) and a later Compromise Settlement Agreement (CSA). These agreements were intended to resolve their disputes, with provisions for partitioning the ranch and a clause designating Texas as the forum for enforcement. When the parties could not agree on partitioning, a group led by Angela Kate initiated partition proceedings in New Mexico, as allowed by the agreements. Another group, led by John Burk, opposed the partition, resulting in protracted litigation and additional attorney’s fees.The 251st District Court of Randall County, Texas, after a bench trial, found John Burk had breached the settlement agreements by opposing the partition in the New Mexico litigation, causing Angela Kate to incur $216,112 in extra attorney’s fees. Despite these findings, the trial court entered a take-nothing judgment, holding that the attorney’s fees from the New Mexico litigation were not recoverable as damages. The Court of Appeals for the Seventh District of Texas affirmed, reasoning that the American Rule barred recovery of such fees as damages for breach of contract.The Supreme Court of Texas reversed the Court of Appeals. It held that the American Rule does not bar recovery of attorney’s fees incurred in prior litigation as damages for breach of a settlement agreement, provided the breach was not itself the basis for that prior litigation. Because the fees at issue resulted from litigation initiated before John Burk’s breach, Angela Kate was entitled to recover those excess fees as actual damages. The Court also held she could seek reasonable attorney’s fees for the Texas suit, remanding for reconsideration of the appropriate amount. View "WANG v. WHITTENBURG" on Justia Law

A company providing paratransit and microtransit services under contract with a regional public transportation authority subcontracted another company to supply vehicles and drivers. After several months, the subcontractor terminated the agreement and brought suit against the transportation company and the authority, asserting claims including breach of contract, quantum meruit, tortious interference, fraud, and negligent misrepresentation. The fraud claim centered on alleged false representations made to induce the subcontract.The trial court (Texas District Court) ruled on a motion to dismiss under Texas Rule of Civil Procedure 91a, which allows dismissal if pleadings show no legal or factual basis for relief. The court dismissed the fraud and other tort claims against all defendants, as well as the breach of contract claim against the transportation authority and its primary contractor. It limited potential contract damages as to the contractor’s subsidiary and severed and abated remaining claims. The subcontractor appealed the dismissal of its claims against the main transportation company.The Court of Appeals for the Fifth District of Texas reversed in part, finding that the breach of contract and fraud claims against the main transportation company had a basis in law and that its statutory immunity under Texas Transportation Code § 452.056(d) was not conclusively established. The Supreme Court of Texas, reviewing only the fraud claim, held that the statutory immunity did apply. Because the pleadings showed the transportation company was contractually performing the authority’s function, and the authority itself would be immune from a fraud claim (an intentional tort), the company was likewise immune from liability for fraud. Accordingly, the Supreme Court of Texas reversed the Court of Appeals’ judgment and reinstated the trial court’s dismissal of the fraud claim. The case was remanded for further proceedings on any remaining claims. View "MV TRANSPORTATION, INC. v. GDS TRANSPORT, LLC" on Justia Law

The case centers on an economic development agreement between a city and county in Texas and a private foundation, aimed at fostering the construction of a retail shopping center anchored by a Gander Mountain store. The city and county pledged portions of future sales-tax revenues to the foundation, which used the funds to secure a construction loan for the facility. The agreements required that the tax proceeds be used solely to repay the construction debt. Gander Mountain operated for eleven years before closing its store, but the shopping center continued to generate significant economic activity and tax revenue, with the former anchor tenant’s space later occupied by another retailer.After Gander Mountain’s closure in 2015, the city and county ceased payments, claiming the public purpose of the grants had ended. They sought declaratory relief in the District Court of Navarro County, arguing that continued payments would be unconstitutional under the Texas Constitution’s Gift Clauses. The district court granted summary judgment to the city and county, ruling that the closure ended the public purpose and that the agreements lacked sufficient controls to ensure public purposes were met. The Court of Appeals for the Tenth District of Texas affirmed, holding that the economic development grants remained subject to the Gift Clauses and that the agreements failed to satisfy their requirements.The Supreme Court of Texas reviewed the case and held that economic-development grants authorized by article III, section 52-a of the Texas Constitution remain subject to the Gift Clauses. The Court determined that the lower courts erred by focusing narrowly on the operation of a specific store rather than the broader public purpose of economic development. It held that the agreements likely satisfied the constitutional requirements of public purpose, consideration, and adequate controls, and that summary judgment was improper. The Supreme Court of Texas reversed the lower courts’ judgments and remanded the case for further proceedings. View "JPMORGAN CHASE BANK, N.A. v. CITY OF CORSICANA AND NAVARRO COUNTY" on Justia Law