Justia Texas Supreme Court Opinion Summaries

Petitioner filed suit against respondent for breach of contract and breach of fiduciary duty. Respondent had been employed by petitioner since 1983 and rose to become a managing director. In 2005, respondent signed a Non-Solicitation Agreement and notice form stating that he wanted to exercise a stock option to acquire 3000 shares of stock of petitioner's parent company. At issue was whether a covenant not to compete signed by a valued employee in consideration for stock options, designed to give the employee a greater stake in the company's performance, was unenforceable as a matter of law because the stock options did not give rise to an interest in restraining competition. The court held that, under the terms of the Covenants Not to Compete Act (Act), Tex. Bus. & Com. Code 15.50, 52, the consideration for the noncompete agreement (stock options) was reasonably related to the company's interest in protecting its goodwill, a business interest the Act recognized as worthy of protection. Therefore, the noncompete was not unenforceable on that basis. Accordingly, the court reversed the court of appeal's judgment and remanded to the trial court for further proceedings. View "Marsh USA Inc., et al. v. Cook" on Justia Law

LTTS Charter School ("LTTS") was an open-enrollment school that retained C2 Construction, Inc. ("C2") to build school facilities at a site Universal Academy had leased. C2 filed a breach of contract suit and Universal Academy filed a plea to the jurisdiction claiming immunity from suit. The trial court denied the plea and Universal Academy brought an interlocutory appeal under Section 51.014(a)(8) of the Civil Practice and Remedies Code. In the court of appeals, C2 moved to dismiss the interlocutory appeal, arguing that Universal Academy was note entitled to one because it was not a governmental unit under the Torts Claims Act ("Act"), Tex. Civ. Prac. & Rem. Code 101.001(3)(D). At issue was whether an open-enrollment charter school was a governmental unit as defined by Section 101.001(3)(D) and thus, able to take an interlocutory appeal from a trial court's denial of its plea to the jurisdiction. The court held that open-enrollment charter schools were governmental units for the Act purposes because the Act defined government unit broadly to include any other institution, agency, or organ of government derived from state law; the Education Code defined open-enrollment charters schools as part of the public school system, which were created in accordance with the laws of the state, subject to state laws and rules governing public schools and, together with governmental traditional public schools, have the primary responsibility for implementing the state's system of public education; and the Legislature considered open-enrollment charter schools to be governmental entities under a host of other laws outside the Education Code. Accordingly, because Universal Academy was a governmental unit under the Act, the court of appeals had jurisdiction to hear its interlocutory appeal under Section 51.014(a)(8). View "LTTS Charter School, Inc. v. C2 Construction, Inc." on Justia Law

Grubbs Infinity ("Grubbs"), the insured, sued Universal Underwriters of Texas Insurance Company ("Universal") for underpayment of its insurance policy claim after Grubbs suffered hail damage to buildings on its property. At issue was whether the party demanding appraisal had waived its right to insist on the contractual procedure when the parties disagreed, but neither sought appraisal until one had filed suit. The court conditionally granted Universal's petition for writ of mandamus and directed the trial court to grant Universal's motion to compel appraisal where Universal had not waived its appraisal right and where Grubbs failed to demonstrate a showing of prejudice.

This case returns from the Fifth Circuit to answer one of three certified questions. Appellee Barnes sought to enforce a Working Interest Unit Agreement (WIUA) and Joint Operating Agreement (JOA) for unpaid royalties as a third-party beneficiary or through privity of estate. Doris Barnes sued individually and as the executrix of the estate of her husband, who was an original signatory to a lease that was later assigned to an oil exploration company. The company created a joint venture to begin drilling on lands covered by Barnes’ lease; partner to this joint venture included Appellant Tawes. When the joint venture went bankrupt, Barnes settled her unpaid royalties with the venture. Tawes did not join in the settlement, which gives rise to Barnes’ current claim for the balance of the unpaid royalties. Arguing that because the Bankruptcy Court and Federal District Court concluded that Barnes was a third-party beneficiary to the JOA’s Royalty Provision, Barnes brought suit to enforce, and Tawes appealed. On certification from the Fifth Circuit, the Supreme Court concluded that Barnes had no right to enforce agreements that gave rise to this suit, finding that the original lease assignment to the exploration company did not extend to Tawes. Finding no theory of recovery, the Court did not address the remaining certified questions. View "Tawes v. Barnes" on Justia Law

The Court was asked to consider whether state law allows a sophisticated party in a commercial transaction, represented by counsel, with full knowledge of all the circumstances, without mistake or duress of any kind, to include in a contract a disclaimer, and later disavow that disclaimer as having been false at the time it was made. Petitioner Italian Cowboy Partners entered into a lease agreement with Respondents to open a new restaurant. Petitioners had been in the restaurant business for twenty-five years. The lease Petitioners signed contained a disclaimer against representations or promises with respect to the leased site. But Petitioners sued claiming Respondents misled them regarding the suitability of the chosen rental space for a new restaurant. The Court held that the lower court erred in granting Petitioners damages and attorneys fees based on its interpretation of the disclaimer in the lease, and remanded the case for an additional hearing.