Justia Texas Supreme Court Opinion Summaries

American Pearl Group, L.L.C., John Sarkissian, and Andrei Wirth (collectively, “Pearl”) and National Payment Systems, L.L.C. (“NPS”) operate in the credit-card-payment-processing industry. In May 2019, NPS loaned $375,100.85 to Pearl, to be repaid with interest over forty-two months. The Loan Agreement required Pearl to pay back $684,966.76, with a schedule allocating each month’s payment between principal and interest. Pearl sued NPS in March 2022, seeking a declaration that the Loan and Option Agreement violated Texas usury law.The U.S. District Court for the Northern District of Texas granted NPS’s motion to dismiss, concluding that the scheduled interest payments were not usurious under the “spreading doctrine,” the purchase option’s value was too uncertain to constitute interest, and Pearl had not adequately alleged a scheme to conceal usury. The district court calculated the interest by spreading it over the term of the loan in equal parts, finding no usury violation. Pearl appealed to the U.S. Court of Appeals for the Fifth Circuit, arguing that the district court erred by applying the “equal parts” method instead of the actuarial method required by Section 306.004(a) of the Texas Finance Code.The Supreme Court of Texas reviewed the case and held that Section 306.004(a) requires courts to calculate the maximum permissible interest based on the declining principal balance for each payment period, using the actuarial method. The court emphasized that the Legislature’s deliberate choice of words in the statute matters, and the actuarial method calls for interest amounts to be calculated for each payment period based on the declining principal balance. The court answered the Fifth Circuit’s certified question affirmatively, clarifying that the interest calculations must be based on the declining principal balance when periodic principal payments are provided during the loan term. View "AMERICAN PEARL GROUP, L.L.C. v. NATIONAL PAYMENT SYSTEMS, L.L.C." on Justia Law

Abigail Cerna and her child visited Urban Air Trampoline and Adventure Park in Pearland, Texas, on August 30, 2020. Upon entry, Cerna signed a release agreement that included a broadly worded arbitration clause covering disputes related to the scope, validity, and arbitrability of the agreement. The agreement did not specify its duration. On November 21, 2020, Cerna and her child returned to the park without signing another release. During this visit, Cerna's child was injured, and Cerna subsequently filed a lawsuit against Urban Air.The trial court denied Urban Air's motion to compel arbitration, arguing that the August agreement did not apply to the November visit. The Court of Appeals for the Fourteenth District of Texas reversed the trial court's decision. The appellate court held that the issue of whether the arbitration agreement extended to the second visit was a matter of scope, not existence. Since the parties had agreed to delegate scope-related issues to an arbitrator, the appellate court concluded that the trial court erred in not compelling arbitration.The Supreme Court of Texas reviewed the case and agreed with the appellate court's decision. The Supreme Court held that the question of the agreement's duration is a matter of scope, which the parties had delegated to an arbitrator. Since Cerna did not dispute the validity of the August agreement but only its applicability to the November visit, the Supreme Court affirmed the appellate court's judgment. The case was remanded to the trial court to issue an order compelling arbitration. View "CERNA v. PEARLAND URBAN AIR, LLC" on Justia Law

Hurricane Harvey caused significant flooding in Texas in 2017. Homeowners in Matagorda County sued Tenaris Bay City Inc., a nearby pipeline manufacturing company, alleging that design defects at its facility caused flood damage to their homes. The plaintiffs claimed negligence, gross negligence, negligence per se, and negligent nuisance. The district court ruled in favor of the plaintiffs, and the court of appeals affirmed the decision.The district court directed a verdict on gross negligence in favor of Tenaris but submitted the other negligence theories to the jury. The jury found Tenaris liable on all three negligence theories, and the district court rendered judgment for $2.8 million plus interest. Tenaris appealed, and the court of appeals affirmed the judgment.The Supreme Court of Texas reviewed the case, focusing on whether the plaintiffs proved that Tenaris's negligence was the cause of the flooding. The court concluded that there was legally insufficient evidence to show that the plaintiffs' homes would not have flooded but for Tenaris's actions. The plaintiffs' expert witness admitted he had not conducted the necessary scientific analysis to determine the cause of the flooding at the specific properties. The court emphasized that in cases of catastrophic rainfall, proving causation requires reliable evidence that the defendant's actions were the but-for cause of the damage.The Supreme Court of Texas reversed the judgments of the lower courts and rendered judgment for Tenaris, holding that the plaintiffs failed to prove that their flood damage would not have occurred without Tenaris's alleged negligence. View "TENARIS BAY CITY INC. v. ELLISOR" on Justia Law

David W. Cromwell and Anadarko E&P Onshore, LLC are co-tenants in an oil-and-gas lease on land in Loving County, Texas. Cromwell obtained his interests in 2009 through two leases, one with Carmen Ferrer and one with the Tantalo Trust. Both leases contained habendum clauses that extended the lease terms as long as minerals were produced from the land. Anadarko, which already had a working interest and had drilled wells on the land, continued to produce minerals. Cromwell repeatedly sought to participate in production and enter a joint operating agreement with Anadarko, but Anadarko did not respond. Despite this, Anadarko sent Cromwell joint interest invoices and treated him as a working interest owner.The trial court granted summary judgment in favor of Anadarko, ruling that Cromwell's leases terminated at the end of their primary terms because he did not personally cause production. The Court of Appeals for the Eighth District of Texas affirmed, holding that Cromwell was required to take action to cause production to keep his leases alive, based on the court's previous decision in Cimarex Energy Co. v. Anadarko Petroleum Corp.The Supreme Court of Texas reviewed the case and held that the plain language of the habendum clauses did not require Cromwell to personally produce minerals to maintain his interests. The court emphasized that the leases did not specify who must produce the minerals and that production in commercial paying quantities had continuously occurred on the land. Therefore, Cromwell's leases did not terminate. The court disapproved of previous decisions that required lessees to personally produce minerals when the lease language did not explicitly state such a requirement. The judgment of the court of appeals was reversed, and the case was remanded to the trial court to address the parties' remaining arguments. View "CROMWELL v. ANADARKO E&P ONSHORE, LLC" on Justia Law

Renaissance Medical Foundation (the Practice) is a nonprofit health organization certified by the Texas Medical Board. The Practice employed Dr. Michael Burke, a neurosurgeon, to provide medical services to its patients. Rebecca Lugo brought her daughter to Doctors Hospital at Renaissance for brain surgery performed by Dr. Burke. The surgery resulted in permanent neurological damage to Lugo’s daughter. Dr. Burke later expressed that a retractor used during the procedure migrated into the child’s brainstem, causing the injury. Lugo filed a lawsuit alleging negligence by Dr. Burke and sought to hold the Practice vicariously liable for his actions.The trial court denied the Practice’s motion for summary judgment, which argued that it could not be held vicariously liable for Dr. Burke’s negligence because it did not control the manner in which he provided medical care and that Dr. Burke was an independent contractor. The court concluded that Dr. Burke’s employment agreement granted the Practice sufficient control over him to trigger vicarious liability. The court authorized a permissive interlocutory appeal of the ruling.The Court of Appeals for the Thirteenth District of Texas affirmed the trial court’s decision, holding that Dr. Burke was an employee of the Practice under traditional common-law factors and was acting within the scope of his employment when the alleged negligence occurred. The Practice then filed a petition for review with the Supreme Court of Texas.The Supreme Court of Texas held that a nonprofit health organization may not be held vicariously liable if exercising its right of control regarding the alleged negligence would interfere with its employee physician’s exercise of independent medical judgment. The court concluded that the Practice did not conclusively demonstrate such interference and affirmed the denial of the Practice’s motion for summary judgment, remanding the case for further proceedings. View "RENAISSANCE MEDICAL FOUNDATION v. LUGO" on Justia Law

Ireille Williams-Bush, a 35-year-old woman, was taken to Medical City Arlington Hospital with symptoms indicative of a pulmonary embolism. However, she was diagnosed with a non-ST-elevated myocardial infarction and admitted under that diagnosis. The consulting cardiologist did not screen her for a pulmonary embolism. She was discharged in stable condition but died three days later from clotting in her heart and lungs. Her husband, Jared Bush, sued the hospital and associated physicians for negligence, focusing on the hospital's failure to have adequate protocols to ensure proper diagnosis and treatment.The trial court initially found the expert report by Dr. Cam Patterson, which supported Bush's claims, to be adequate. However, the Court of Appeals for the Second District of Texas reversed this decision, deeming the report conclusory regarding causation and dismissing the claims against the hospital with prejudice. The appellate court held that the expert's opinions did not sufficiently explain how the hospital's policies could have influenced the medical decisions made by the physicians.The Supreme Court of Texas reviewed the case and held that the trial court did not abuse its discretion in finding the expert report adequate. The court concluded that Dr. Patterson's report provided a fair summary of the standard of care, the hospital's breach, and the causal relationship between the breach and Williams-Bush's death. The Supreme Court reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "BUSH v. COLUMBIA MEDICAL CENTER OF ARLINGTON SUBSIDIARY, L.P." on Justia Law

This case involves a dispute between American Midstream (Alabama Intrastate), LLC (AMID) and Rainbow Energy Marketing Corporation (Rainbow) over a contract (MAG-0005) for the transportation and balancing of natural gas. Rainbow had contracts to transport gas through two interconnected pipelines, the Transco and the Magnolia, and used the MAG-0005 to leverage AMID’s balancing flexibility. The contract allowed Rainbow to run imbalances, withdrawing gas without simultaneously supplying an equal amount, provided they resupplied by the end of each month. Disputes arose when Transco began limiting imbalances more strictly, leading to AMID curtailing Rainbow’s nominations on several occasions.The trial court found in favor of Rainbow on all its claims, including breach of contract, repudiation, fraud, fraudulent inducement, and negligent misrepresentation, awarding over $6 million in lost profits. The court interpreted Section 9.1 of the MAG-0005 as excusing AMID’s performance only under specific conditions involving scheduled and physical imbalances. The Court of Appeals for the First District of Texas affirmed the trial court’s decision, agreeing with its interpretation of the contract and the award of damages.The Supreme Court of Texas reviewed the case and held that the trial court had erroneously inserted language into Section 9.1 of the MAG-0005. The correct interpretation of Section 9.1 excused AMID from providing balancing services on any day that Transco required AMID or Rainbow to limit imbalances attributable to Rainbow, without distinguishing between types of imbalances. The Supreme Court reversed the lower courts' decisions, rendered judgment for AMID on Rainbow’s contract-repudiation and tort claims, and remanded for a new trial on the breach-of-contract claims to determine if Transco mandates excused AMID’s performance on the days in question. View "AMERICAN MIDSTREAM (ALABAMA INTRASTATE), LLC v. RAINBOW ENERGY MARKETING CORPORATION" on Justia Law

Oljine Noguez and Manuel Zepeda Mendoza were investigated for their alleged involvement in an opioid trafficking operation. Following the investigation, the State of Texas seized their bank accounts and cash, initiating four civil-forfeiture actions. The State alleged that the funds were contraband related to the trafficking operation, attaching a sworn declaration and affidavit from the investigating officer, Bryan Bacon, to each notice of seizure. Nearly two years later, the Claimants filed a no-evidence motion for summary judgment, arguing that the State had no evidence to support its claims. The State responded but did not attach any exhibits, instead referencing Officer Bacon’s affidavit.The trial court considered the motion and granted summary judgment for the Claimants, noting that the State did not attach the affidavit to its response. The State then filed a motion for leave to file a response with the affidavit attached, which the trial court denied, finalizing its order granting summary judgment to the Claimants. The State appealed, and the Court of Appeals for the Seventh District of Texas affirmed the trial court’s decision, holding that the State failed to meet its burden by not attaching the affidavit and not sufficiently directing the trial court to specific portions of the affidavit.The Supreme Court of Texas reviewed the case and held that Texas Rule of Civil Procedure 166a(i) does not require the attachment of previously filed summary judgment evidence. The Court found that the State’s response sufficiently pointed out and discussed the evidence, reversing the Court of Appeals’ judgment. The Supreme Court remanded the case to the trial court for further proceedings, instructing the trial court to reconsider the no-evidence motion in light of the opinion that previously filed evidence referenced in a response can be considered without being attached. View "THE STATE OF TEXAS v. THREE THOUSAND, SEVEN HUNDRED SEVENTY-FOUR DOLLARS AND TWENTY-EIGHT CENTS U.S. CURRENCY ($3,774.28)" on Justia Law

Pamela McKenzie was shopping at a Walgreens in Houston in 2019 when she was detained on suspicion of shoplifting. A Walgreens employee called the police, suspecting McKenzie was the same person who had stolen from the store earlier that day. After reviewing surveillance footage, the police determined McKenzie was not the thief and released her. McKenzie claimed that other Walgreens employees had agreed she was not the thief, but the employee called the police anyway. She sued Walgreens for intentional infliction of emotional distress, negligence, gross negligence, respondeat superior liability for employee negligence, and negligent hiring, training, and supervision (NHTS).The trial court denied Walgreens' motion to dismiss under the Texas Citizens Participation Act (TCPA), which allows for early dismissal of legal actions based on the exercise of free speech. A divided Court of Appeals for the Fourteenth District of Texas affirmed in part and reversed in part. The court held that the trial court erred by not dismissing McKenzie’s claims of intentional infliction of emotional distress, negligence, gross negligence, and vicarious liability for employee negligence. However, it held that the NHTS claim was not subject to dismissal under the TCPA because it was not entirely based on the employee’s exercise of free speech rights.The Supreme Court of Texas reviewed the case and held that the TCPA does apply to McKenzie’s NHTS claim. The court concluded that McKenzie failed to meet her evidentiary burden to avoid dismissal, as she did not provide clear and specific evidence for each essential element of her NHTS claim. Consequently, the court reversed the Court of Appeals' judgment in part and remanded the case to the trial court for further proceedings, specifically for the dismissal of McKenzie’s NHTS claim. The remainder of the Court of Appeals' judgment was left undisturbed. View "WALGREENS v. MCKENZIE" on Justia Law

Myers-Woodward, LLC (Myers) owns 160 acres in Matagorda County, Texas. In 1947, Myers’s predecessors retained the surface estate but transferred the mineral estate to the predecessor of Underground Services Markham, LLC and United Brine Pipeline Company, LLC (collectively, USM). The mineral deed granted USM’s predecessor an interest in all oil, gas, and other minerals on the land, along with rights necessary for mining and transporting these minerals. In 2008, USM acquired all of Texas Brine Company’s interest in the salt on the property. Disputes arose over the ownership of caverns created by salt mining and the calculation of royalties owed to Myers.The district court ruled that USM owned the subsurface caverns created by its salt mining activities but denied USM’s request to use the caverns for storing hydrocarbons produced off-site. The court agreed with Myers that USM could only use the land for purposes specified in the 1947 deed. Regarding royalties, the district court ruled that Myers was entitled to a one-eighth royalty based on the market value of the salt at the point of production, which amounted to $258,850.41. Myers appealed, challenging the royalty calculation and the ownership of the caverns. USM cross-appealed, contesting the limitation on its use of the caverns.The Supreme Court of Texas reviewed the case. The court affirmed the lower court’s decision that Myers, as the surface estate owner, retains ownership of the empty spaces within the salt formations. The court held that the mineral estate does not include ownership of the empty spaces created by salt mining. However, the court reversed the lower courts’ calculation of Myers’s royalty payments, ruling that Myers is entitled to an in-kind royalty of one-eighth of the net proceeds from the sale of the salt. The case was remanded to the district court for further proceedings consistent with this opinion. View "MYERS-WOODWARD, LLC v. UNDERGROUND SERVICES MARKHAM, LLC" on Justia Law