Justia Texas Supreme Court Opinion Summaries

This appeal arose from a franchise tax dispute involving the apportionment of receipts from the licensing of geophysical and seismic data to customers in Texas. Petitioner, a taxpayer, complained that respondent mischaracterized these receipts as Texas business and thereby had erroneously increased its franchise tax burden. At issue was whether these receipts should be categorized as receipts from the use of a license or as receipts from the sale of an intangible asset. The court held that the court of appeals erred in upholding respondent's franchise tax assessment because petitioner's receipts from licensing its seismic data were not receipts from the use of a license in the state within Tex. Tax Code 171.103(a)(4)'s meaning. Receipts from this intangible asset was not allocated according to its place of use under subsection (4) but rather, were included under subsection (6)'s catch-all provision as a limited sale of an intangible and allocated under the location of the payor rule. Accordingly, the court reversed the judgment and remanded for further proceedings.

Respondent filed a sex discrimination suit against petitioner alleging violations of the Texas Commission on Human Rights Act, Tex. Lab. Code 21.001-.556, where petitioner terminated its employment of respondent citing as the basis for its decision a reduction in force due to worsening business conditions. The parties sought arbitration and petitioner appealed the arbitrator's reward. At issue was whether the Texas General Arbitration Act ("TAA"), Tex. Civ. Prac. & Rem. Code 171.001-.098, precluded an agreement for judicial review of an arbitration award for reversible error, and if not, whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 1-16, preempted enforcement of such an agreement. The court held that the TAA presented no impediment to an agreement that limited the authority of an arbitrator in deciding a matter and thus allowed for judicial review of an arbitration award for reversible error. The court also held that the FAA did not preempt enforcement of an agreement to expanded judicial review of an arbitration award enforceable under the TAA. The court further held that, on remand, the court of appeals must determine whether the record was sufficient to review petitioner's complaints. Therefore, the judgment of the court of appeals must be reversed and the case remanded to that court for consideration of the merits of petitioner's challenges to the arbitration award.

This case involved two related oil and gas mineral lease disputes that were jointly tried. One of the disputes was between petitioners, BP American Production Co., Atlantic Richfield Co., and Vastar Resources, Inc. (collectively, "BP"), the lessee and operator, and respondents, the Marshall family, the lessors. The other dispute was between BP's successors-in-interest, Wagner Oil Co. (collectively, "Wagner"), and another lessor, respondents Vaquillas Ranch Co. Ltd. ("Vaquillas"). At issue was whether limitations barred the Marshall family's fraud claim against BP and whether Vaquillas lost title by adverse possession after Wagner succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that, because the Marshall family injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations and therefore, the Marshall family's fraud claims against BP were time barred. The court also held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession.

Respondents, owners of a vendors lien on each of four tracts of land, sued to have their liens declared superior to petitioner's liens. At issue was whether petitioner's liens were not unenforceable pursuant to section 32.06 of the Texas Tax Code's requirements for transfer. The court held that petitioner's tax liens were not unenforceable when verified copies were recorded in lieu of originals; when the procedure wherein the tax collector made the required certification before a notary, sealed with a notarial seal, in lieu of a seal of his own, complied with section 32.06(d); and when the tax collector's record-keeping and receipts were irrelevant to the enforceability of petitioner's liens.

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

Petitioner Allen Keller Company, a general contractor, was working under contract to the local government to construct a portion of roadway. The contract required strict compliance with its terms, and the company had no discretion to vary any terms. Respondents brought suit against the county, engineers and driver of the car for the wrongful death of their daughter when the car she rode in slid on the rain-slick portion of road completed by the Petitioner several months earlier. The car rolled into a river, and the daughter was caught inside. Since the accident, guard rail was installed on the portion of road completed by Petitioner. Respondents maintained their claims against Petitioner, but settled with all other parties. The trial court granted Petitioner summary judgment, but the appellate court reversed, holding that Petitioner did not prove it had not proximately cause the accident that lead to the daughter's death. On review, the Supreme Court found Petitioner owed Respondents no duty to warn of the dangerous conditions in the design of the road because Petitioner had no discretion in altering terms of road's design specifications. On review, this Court reversed the appellate court's decision in favor of Petitioner.

While married, Petitioner James Iliff was the principal breadwinner for his family of five, and earned approximately $100,000 in salary. He held a Bachelor's Degree in chemistry, and a Masters in Business Administration. In January, 2006, Petitioner voluntarily quit his job, moved in with his mother, and worked intermittently, earning approximately $200 per month. In June, Respondent Jerilyn Iliff filed for divorce. Determining that Petitioner's gross earning potential was not less than $5,000 per month, the divorce court ordered him to pay $1,295 in monthly child support. Petitioner appealed the support order, arguing that under state law, the trial court was required to determine whether his unemployment or underemployment was used primarily to avoid paying child support. The Supreme Court granted Respondent's petition to resolve a split among state courts of appeal on interpretation of state law and the issue of avoiding child support. On review of the underlying cases, the Supreme Court found no requirement that a person owing child support be intentionally unemployed or underemployed to avoid child support, and affirmed the lower courts' decisions against Petitioner.

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.