Even in the absence of entitlement to attorneys’ fees under the contract, a party in a Texas case can still recover attorneys’ fees as a prevailing party under the Texas Civil Practice and Remedy Code.
Section 38.001 of the Texas Civil Practice and Remedy Code provides that a person may recover reasonable attorney’s fees, in addition to the amount of a valid claim and costs, if the claim is for rendered services, performed labor, furnished materials, a suit on a sworn account or . . . an oral or written contract.” Tex. Civ. Prac. & Rem. Code 38.001. It is significant that the claim must be a valid one.
A party must (1) prevail on a cause of action for which attorney’s fees are recoverable, and (2) recover damages. Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997).
The claimant must present the claim to the opposing party or to a duly authorized agent of the opposing party and payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented. See Tex. Civ. Prac. & Rem. Code Ann. 38.002.
The prevailing party is the one “vindicated” by the judgment rendered. See Taylor Elec. Servs., Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 532 (Tex. App.-Fort Worth 2005, no pet.). In determining the prevailing party, the focus is on the successful party on the merits of the case. Id. A party can be the prevailing party and thus entitled to attorney’s fees even where the amount recovered is offset by an amount awarded to the opposing party. Id. at 533 (citing Blizzard v. Nationwide Mut. Fire Ins. Co., 756 S.W.2d 801, 806 (Tex. App.-Dallas 1988, no writ)).
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
The Existence of Trade Secrets under Texas Law
To determine whether a trade secret exists under Texas law, the Texas Supreme Court has adopted the following nonexclusive, six-factor test, which is largely a set of factors obtained from §757 of the Restatement of Torts:
(1) the extent to which the information is known outside of his business;
(2) the extent to which it is known by employees and
others involved in his business;
(3) the extent of the measures taken by him to guard the secrecy of the information;
(4) the value of the information to him and to his competitors;
(5) the amount of effort or
money expended by him in developing the information;
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
In the application of this test, Texas courts have recognized a wide variety of proprietary information as worthy of protection. Some examples include pricing data, design of a product, business procedures, customer lists, computer programs, manufacturing information, marketing strategy, technical information and data, and vendor lists.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
Tutle Trucking v EOG Resources, Inc.Court of Appeals of Texas, Waco.Opinion delivered and filed November 15, 2012
From the 18th District Court Johnson County, Texas Trial Court No. C2010–0679
Before Chief Justice Gray, Justice Davis, and Justice Scoggins
(Chief Justice Gray dissenting)
REX D. DAVIS Justice
O P I N I O N
In one issue, Appellant Tutle & Tutle Trucking, Inc. complains about a summary judgment granted in favor of Appellee EOG Resources, Inc. In its summary-judgment order, the trial court concluded that, based on language contained in a Master Services Contract (MSC) between Tutle and EOG, Tutle owes duties to defend and indemnify EOG and its contractor, Frac Source Services, Inc., in the underlying personal-injury lawsuit. We will affirm.
I. BACKGROUND
This dispute arose after Archie Henderson, a Tutle employee, sued Tutle and Frac Source to recover damages for injuries that he allegedly sustained on the job. FN1 Henderson alleged:
FN1. In its summary-judgment motion, Tutle acknowledged that Henderson works for Tutle and that the injuries were suffered while working on the project as an employee for Tutle, though the project was supervised by EOG.
On or about September 5, 2007, Plaintiff ARCHIE HENDERSON, an employee of Defendant TUTLE & TUTLE, was, in the course and scope of his employment, assisting FRAC SOURCE personal [sic] unloading sand from a FRAC SOURCE “Sand King” to a truck. The Sand King being used as [sic] the time of the incident was owned, operated, and controlled by Defendant FRAC SOURCE. As Plaintiff was assisting with unloading sand from the Sand King and as FRAC SOURCE personnel operated the Sand King, Plaintiff HENDERSON was struck by a falling conveyor that was part of the Sand King. This incident caused Plaintiff HENDERSON to suffer severe and permanent head, shoulder, and back injuries. Upon information and belief, Defendant FRAC SOURCE had modified or removed a safety device from the Sand King, thus rendering the equipment unreasonably dangerous. In addition, Defendant FRAC SOURCE employees failed to properly utilize the Sand King conveyor’s secondary safety system.
After learning that it was sued in the Henderson suit, Frac Source made a demand on EOG to defend and indemnify it under a separate master service contract between EOG and Frac Source. EOG then made a demand on Tutle for defense and indemnity in the Henderson suit, even though Henderson did not sue EOG.
In asserting that Tutle has a duty to defend and indemnify it, EOG relied on several provisions contained in the MSC. Those relevant provisions are:
6A. CONTRACTOR [Tutle] AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD COMPANY [EOG], ITS PARENT, SUBSIDIARY AND AFFILIATED COMPANIES AND ITS AND THEIR CO–LESSEES, PARTNERS, JOINT VENTURERS, CO–OWNERS, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES (HEREINAFTER COLLECTIVELY REFERRED TO AS “COMPANY GROUP”) HARMLESS FROM AND AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING BUT NOT LIMITED TO STRICT LIABILITY OR THE UNSEAWORTHINESS OR UNAIRWORTHINESS OF ANY VESSEL OR CRAFT, OR THE NEGLIGENCE OF ANY PARTY, INCLUDING BUT NOT LIMITED TO THE SOLE OR CONCURRENT NEGLIGENCE OF THE COMPANY GROUP, ARISING IN CONNECTION HEREWITH IN FAVOR OF CONTRACTOR’S AGENTS, INVITEES AND EMPLOYEES, AND CONTRACTOR’S SUBCONTRACTORS AND THEIR AGENTS, INVITEES AND EMPLOYEES ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR ON ACCOUNT OF BODILY INJURY OR DEATH.
6B. COMPANY AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD CONTRACTOR, ITS AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES (HEREINAFTER COLLECTIVELY REFERRED TO AS “CONTRACTOR GROUP”) HARMLESS FROM AND AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING BUT NOT LIMITED TO STRICT LIABILITY OR THE UNSEAWORTHINESS OR UNAIRWORTHINESS OF ANY VESSEL OR CRAFT, OR THE NELIGENCE OF ANY PARTY, INCLUDING BUT NOT LIMITED TO THE SOLE OR CONCURRENT NEGLIGENCE OF THE CONTRACTOR GROUP, ARISING IN CONNECTION HEREWITH IN FAVOR OF COMPANY’S AGENTS, INVITEES AND EMPLOYEES, COMPANY’S CONTRACTORS (OTHER THAN CONTRACTOR) AND THEIR AGENTS, INVITEES AND EMPLOYEES, AND SUCH CONTRACTORS’ SUBCONTRACTORS, OR THEIR AGENTS, INVITEES OR EMPLOYEES ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR ON ACCOUNT OF BODILY INJURY OR DEATH.
The language contained in paragraphs 6A and 6B of the MSC between EOG and Tutle is set forth in all capital letters and in an apparently slightly larger font than the rest of the contract. Another relevant provision of the MSC—paragraph 6E—was not capitalized or differentiated using an apparently larger font. Paragraph 6E provides:
6E. The terms and provisions of this Paragraph 6 shall have no application to claims or causes of action asserted against Company or Contractor by reason of any agreement of indemnity with a person or entity not a party to this Agreement in those instances where such contractual indemnities are not related to or ancillary to the performance of the work contemplated under the Agreement or are indemnities uncommon to the industry. The terms and provisions of this Paragraph 6 shall expressly apply to claims or causes of action asserted against Company or Contractor by reason of any agreement of indemnity with a person or entity not a party to this Contract where such contractual indemnities are related to or ancillary to the performance of the work contemplated under the Agreement and or Company’s project and are indemnities not uncommon in the industry.
When demanding that Tutle defend and indemnify it in the Henderson suit, EOG relied on paragraphs 6A and 6E of the MSC.
After receiving EOG’s demands for defense and indemnity, Tutle filed a declaratory-judgment action against EOG, Frac Source, and Tutle’s insurer, Carolina Casualty Company, seeking a declaration that Tutle owed no defense or indemnity obligation to EOG in the Henderson suit. In the alternative, Tutle sought a declaration that Tutle’s insurance policy with Carolina covered any indemnity obligation that Tutle owed to EOG as an “insured contract.” EOG counterclaimed for a declaratory judgment that it was entitled to defense and indemnity from Tutle in the Henderson suit based on the MSC and because Henderson was an employee of Tutle who was furnishing services to EOG at the time of the accident. EOG also made a demand upon Tutle for indemnity that EOG owes to Frac Source under the “pass through” provision (paragraph 6E) of the MSC. In addition, EOG sought a declaration that Carolina owed a duty to EOG as its primary liability policy as a matter of law.
EOG moved for partial summary judgment, arguing that: (1) Tutle breached its contract with EOG; (2) Carolina had a contractual obligation to provide a defense and indemnity to EOG and Frac Source with regard to the claims asserted in the Henderson suit; (3) Tutle had a contractual obligation to provide a defense and indemnify EOG and Frac Source with regard to the claims asserted in the Henderson suit; and (4) Tutle and/or Carolina have a contractual obligation “to pay all costs, expenses, and reasonable attorney’s fees incurred by or on behalf of EOG/Frac Source in the defense of the Underlying Lawsuit from at least April 2, 2008 through the present date and for all such future costs, expenses, and attorney’s fees.”
Tutle filed its own motion for summary judgment, asserting that, as a matter of law, it owed no contractual duty to defend or indemnify Frac Source under the MSC because the applicable provisions did not satisfy Texas law’s “fair-notice” requirements—the express-negligence test and conspicuousness. Tutle also contended that it did not owe a duty to defend or indemnify EOG under the MSC for obligations that EOG owed to Frac Source in the Henderson suit.
The trial court denied Tutle’s motion and granted EOG’s motion. In granting EOG’s motion, the trial court specifically declared that Tutle: (1) breached the MSC it had with EOG; (2) has a contractual duty to defend and to indemnify EOG and Frac Source in the underlying Henderson suit; and (3) owes EOG reimbursement for all defense costs, expenses, and indemnity incurred in the Henderson suit. Thereafter, the trial court granted EOG’s motion to sever all claims brought against EOG into a separate cause number, and this appeal followed.
II. STANDARD OF REVIEW
We review the grant or denial of a traditional motion for summary judgment de novo. See Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 816 n.7 (Tex.2005). To be entitled to summary judgment, the movant must demonstrate that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. See TEX.R. CIV. P. 166a(c); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997). When both parties move for summary judgment and the trial court grants one motion and denies the other, we review the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment the trial court should have rendered. Tex. Workers’ Compensation Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex.2004).
III. THE FAIR–NOTICE DOCTRINE
In its sole issue, Tutle contends that the trial court erred in granting summary judgment in favor of EOG because the provisions in the MSC that EOG relies on do not meet the fair-notice requirements established by the Texas Supreme Court for interpreting the validity and enforceability of a contractual-indemnity obligation. And, because the MSC provisions allegedly do not meet the fair-notice requirements, Tutle asserts that the trial court erred in concluding that Tutle breached the contract and owes EOG and Frac Source duties to defend and indemnify them in the underlying Henderson suit. EOG counters that the provisions meet the fair-notice requirements and that Tutle judicially admitted that they did in the trial court.
Indemnity provisions are valid and enforceable if they satisfy two fair-notice requirements. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993); see Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex.2003). One fair-notice requirement, the express-negligence doctrine, requires that the intent of the parties be specifically stated within the four corners of the document. Reyes, 134 S.W.3d at 192; see Dresser, 853 S.W.2d at 508 (noting that, under express-negligence doctrine, a party’s intent to be released from all liability caused by its own future negligence must be expressed in unambiguous terms within contract’s four corners).
The other requirement, conspicuousness, requires that something appear on the face of the contract to attract the attention of the person looking at it. Reyes, 134 S.W.3d at 192. Language may satisfy the conspicuousness requirement by appearing in larger type, contrasting colors, or otherwise calling attention to itself. Id. The purpose of the conspicuousness requirement is to protect the buyer from surprise and an unknowing waiver of his or her rights. Littlefield v. Schaefer, 955 S.W.2d 272, 275 (Tex.1997). Whether an agreement meets the conspicuousness requirement is a question of law. Dresser, 853 S.W.2d at 509.
Indemnity agreements are construed under the normal rules of contract construction. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex.2000). The primary goal is to determine the parties’ intent. Id.
A. Conspicuousness
On appeal, Tutle complains that paragraph 6—the section of the MSC at issue in this case—is not conspicuous as a matter of law. To analyze this complaint, we must examine the entire MSC. It provides that Tutle was a contractor on EOG’s project. Paragraphs 6A and 6B, as shown above, outline the parties’ duties to defend and indemnify “AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH….” Compared to the remainder of the MSC, the language in paragraphs 6A and 6B is capitalized and appears to be a larger font size. Paragraph 6, however, contains three additional sections that further clarify the indemnity provisions. In demanding that Tutle defend and indemnify EOG regarding Frac Source’s alleged liability, EOG relies heavily on paragraph 6E. This paragraph is not capitalized, and the font size is similar to the remainder of the MSC, though the numbering for it—6E—and its location in the MSC indicate that its purpose is to clarify the duties outlined in paragraph 6. Tutle admits that paragraphs 6A and 6B are conspicuous, but it argues that paragraph 6E, the “pass through” provision, is not conspicuous. FN2
FN2. EOG asserts that Tutle waived its conspicuousness argument with respect to paragraph 6E. We disagree. A review of Tutle’s motion for summary judgment shows that Tutle argued that paragraph is inconspicuous because the font is not bolded, capitalized, or otherwise written in such a way “that would capture the attention of a reasonable person.”
Although the Business and Commerce Code defines “conspicuous” to include language in which both the heading and text are in larger or contrasting type, it does not require both the heading and the text to be in larger or contrasting type. See TEX. BUS. & COMM.CODE ANN. § 1.201(10) (West 2009). Further, the Business and Commerce Code specifically provides that a contractual provision is “conspicuous” if it is written, displayed, or presented in such a way that a reasonable person ought to have noticed it. See id. Case law echoes that statute. See Reyes, 134 S.W.3d at 192; Dresser, 853 S.W.2d at 509, 511; see also Sydlik v. REEIII, Inc., 195 S.W.3d 329, 332–33 (Tex.App.—Houston [14th Dist.] 2006, no pet.).
We conclude that paragraph 6E is sufficiently conspicuous to provide fair notice. The numbering for the “pass through” provision is capitalized and is different from other provisions in the MSC. And, perhaps more importantly, the location of paragraph 6E, being numerically linked to paragraphs 6A and 6B, is such that a reasonable person ought to have noticed it. Paragraph 6E is not buried within the contract or located away from paragraphs 6A and 6B, which establish the defense and indemnification duties. In fact, paragraph 6E is on the same page as the last couple of lines of paragraph 6B, which, as stated earlier, is written in all-capital letters and in apparently slightly larger font. It is not the case that the complained-of language appeared in small, light type on the back of a form and was surrounded by unrelated terms. See, e.g., Dana Corp. v. Microtherm, Inc., No. 13–05–00281–CV, 2010 WL 196939, at *6–7 (Tex.App.—Corpus Christi Jan. 21, 2010, pet. granted, judgm’t vacated w.r.m.) (mem.op.) (concluding that liability-limiting provision was inconspicuous because statement on front of document, “REFER TO REVERSE SIDE FOR TERMS AND CONDITIONS OF SALE,” does not suggest liability-limiting provision was on reverse side); Am. Home Shield Corp. v. Lahorgue, 201 S.W.3d 181, 185 (Tex.App.—Dallas 2006, pet. denied) (concluding that indemnity provision was not conspicuous because it appeared “on the back of the contract in a series of numbered, uniformly printed and spaced paragraphs without headings or contrasting type”); Safway Scaffold Co. v. Safway Steel Prod., Inc., 570 S.W.2d 225, 228 (Tex.Civ.App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.) (determining that indemnity provisions were not conspicuous because they were located on back of document among series of numbered paragraphs without headings or contrasting type and not specifically identified as indemnity provisions on front of document); see also Enserch Corp. v. Parker, 794 S.W.2d 2, 9 (Tex.1990) (concluding that indemnity provision was sufficiently conspicuous to afford fair notice of its existence when entire contract appeared on one page and language was on front side of contract, not hidden under separate heading or surrounded by unrelated terms). Accordingly, we reject Tutle’s assertion that paragraphs 6A–6E do not satisfy the conspicuousness requirement.
B. The Express–Negligence Doctrine
Tutle also argues that paragraphs 6A and 6E fail to meet the express-negligence test and thus do not obligate Tutle to indemnify EOG for EOG’s contractual obligation to indemnify Frac Source. Specifically, Tutle asserts that paragraph 6E “is vague, ambiguous, and if enforced, violates the express [-]negligence test where there is nothing within [p]aragraph 6E that indicates that Frac Source is seeking to be indemnified by Tutle from the consequences of its own negligence.” EOG counters that the express-negligence doctrine does not apply when an indemnitee does not seek indemnity for its own negligence and that the “pass through” indemnity provision in paragraph 6E is neither vague nor ambiguous.
As stated earlier, the express-negligence test states that if a party intends to be released from its own future negligence, it must express that intent in clear, unambiguous terms within the four corners of the contract. Reyes, 134 S.W.3d at 192; Sydlik, 195 S.W.3d at 333. The purpose of “the express [-]negligence rule is to require scriveners to make it clear when the intent of the parties is to exculpate” a party for that party’s own negligence. Quintana v. Crossfit Dallas, L.L.C., 347 S.W.3d 445, 450 (Tex.App.—Dallas 2011, no pet.) (quoting Atl. Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724, 726 (Tex.1989)).
Several courts, however, have stated that the express-negligence doctrine does not apply when an indemnitee, such as EOG here, does not seek indemnity for its own negligence. See Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d 876, 889 (Tex.App.—Dallas 2007, no pet.) (citing MAN GHH Logistics GMBH v. Emscor, Inc., 858 S.W.2d 41, 43 (Tex.App.—Houston [14th Dist.] 1993, no writ)); Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 669 (Tex.App.—Houston [1st Dist.] 2000, pet. denied). FN3 In this case, EOG seeks indemnity from Tutle for Frac Source’s alleged negligence. Thus, EOG argues that the express-negligence doctrine does not apply in this case.
FN3. In Transcontinental Gas Pipeline Corp. v. Texaco, Inc., the First Court of Appeals noted the following with respect to the express-negligence doctrine:
Transco asks this Court to expand the express[-]negligence doctrine to cover any indemnity provision that is ambiguous, despite the obvious refusal of our sister courts to expand the doctrine. The Texas Supreme Court declined to extend the express[-]negligence doctrine to an insurance-shifting provision. Getty Oil Co. v. Insurance Co. of N. Am., 845 S.W.2d 794, 806 (Tex.1992). More recently, the Texas Supreme Court held that the express-negligence doctrine applies to releases that relieve a party of its own negligence, but the court expressly limited its holding. Dresser Indust., Inc., 853 S.W.2d at 509. “It is important to note that our discussion … is limited solely to those types of releases which relieve a party in advance of liability for its own negligence.” Id. at 507. Furthermore, it is not extraordinary or unjust to shift the risk of economic damages resulting from a breach of contract, particularly when both parties are experienced contractors and familiar with industry customs regarding risk shifting. Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 387 (Tex.1997).
Tutle responds that paragraph 6E constitutes an extraordinary transfer of risk to which the express-negligence doctrine applies. See, e.g., Reyes, 134 S.W.3d at 193; Green Int’l v. Solis, 951 S.W.2d 384, 386 (Tex.1997) (“We held that such extraordinary risk-shifting clauses must meet certain fair notice requirements.”). Both parties acknowledge that there is scant Texas case law addressing the fair-notice requirements as it relates to a “pass through” provision such as the one in this case. Nevertheless, assuming that Tutle is correct, we do not believe that the language of the provision is vague and ambiguous as to violate the express-negligence doctrine.
In arguing that paragraph 6E is neither vague nor ambiguous, EOG relies heavily on EOG Resources, Inc. v. Badlands Power Fuels, L.L.C., 677 F.Supp.2d 1143 (D.N.D.2009). In this case, the North Dakota federal district court analyzed a “pass through” identical to the one in this case. Id. at 1146. Also, the facts in Badland Power Fuels are substantially similar.
EOG, the owner and operator of the Zacher Oil Well in Mountrail County, North Dakota, entered into identical master service contracts with its contractors, Petroleum Experience, B.O.S. Roustabout & Backhoe Service, Inc., and Badlands Power Fuels. Id. at 1145. The federal court included the relevant language of the master service contracts in its opinion, and the contracts are virtually identical to the MSC in this case. Id. at 1145–46. EOG’s contractors were performing a flow-back operation on the Zacher Oil Well. Id. at 1145. During this operation, a fire occurred and injured Badlands Power Fuels employee Ted Seidler and employees of another contractor. Id. Seidler sued, and Petroleum Experience and B.O.S. tendered their defenses and requested indemnification from EOG. Id. at 1146–47. Similar to the case at hand, EOG tendered its defense and request for indemnification to Badlands Power Fuels, the employer of the injured employee, arguing that the “pass through” provision in the master service contract (also paragraph 6E) required that Badlands Power Fuels defend and indemnify EOG in the Seidler suit. Id. After applying Texas law, the federal court granted EOG’s summary-judgment motion and held that “Badlands Power Fuels must also defend and indemnify EOG under paragraph 6E of its master service contract from claims that Petroleum Experience and BOS have made against EOG for the claims that Ted Seidler has made against them.” FN4 Id. at 1155.
FN4. We recognize that the federal court in Badlands Power Fuels did not analyze the “pass through” provision under the Texas fair-notice doctrine, but we are persuaded by the fact that the federal court, by granting summary judgment in favor of EOG and concluding that Badlands Power Fuels has a duty to defend and indemnify EOG under the “pass through” provision, implicitly concluded that the “pass through” provision was not vague or ambiguous. See 677 F.Supp.2d at 1155. Furthermore, the federal court’s ruling indicates that such a “pass through” provision is not uncommon in the oil and gas industry. See id.
Thus, at least one court has approved the “pass through” provision at issue. See id. Furthermore, we do not believe that the “pass through” indemnity provision of the MSC was required to have the specificity that Tutle suggests or else run the risk of being deemed vague and ambiguous. Tutle and EOG, both sophisticated business entities, entered into a contract in which Tutle agreed to defend and indemnify EOG under paragraph 6E, which required the duties of defense and indemnification with regard to non-parties to the MSC for claims or causes of action “related to or ancillary to the performance of the work contemplated under the Agreement and[/]or Company’s project and are indemnities not uncommon in the industry.” We conclude that the language of paragraph 6E is neither vague nor ambiguous.
As a final argument, Tutle asserts that EOG did not tender sufficient evidence demonstrating that the MSC is applicable to the facts of the Henderson suit. In particular, Tutle contends that the record contains no evidence indicating that Henderson was injured while “transporting dry bulk commodity,” as stated in the MSC. For several reasons, we disagree with Tutle’s interpretation.
First, the MSC states in paragraph 1:
This Agreement shall control and govern all work performed by Contractor for the Company, under subsequent verbal and/or regular work orders, and any agreements or stipulations in any such work order, delivery ticket, or other instrument used by Contractor not in conformity with the terms and provisions hereof shall be null and void.
Tutle judicially admitted in its summary-judgment motion that Henderson was injured while working for Tutle on EOG’s project.
Second, in making its argument that the MSC does not apply to Henderson’s injuries, Tutle relies on the recital in the MSC stating that Tutle is in the business of “transporting dry bulk commodity.” Texas courts have held that recitals in a contract will not control the operative clauses thereof unless the latter are ambiguous. See City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex.App.—Fort Worth 2008, pet. dism’d); see also Beckham Res., Inc. v. Mantle Res., L.L.C., No. 13–09–00083–CV, 2010 WL 672880, at *9 (Tex.App.—Corpus Christi Feb. 25, 2010, pet. denied) (mem.op.). Paragraph 1 is an operative clause describing the extent of the agreement, while the provision relied upon by Tutle merely describes Tutle’s business and its intent to work as an independent contractor for EOG from time to time. See, e.g., Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex.2004) ( “Although we recognize that in certain cases, courts may consider the title of a contract provision or section to interpret a contract, ‘the greater weight must be given to the operative contractual clauses of the agreement.’ ”) (quoting Neece v. A.A.A. Realty Co., 159 Tex. 403, 322 S.W.2d 597, 600 (1959). Based on the record, we conclude that Henderson’s injuries are within the scope of the MSC.
Based on the foregoing, we conclude that the trial court did not err in declaring that the MSC covers the injuries sustained by Henderson. Furthermore, we hold that the MSC satisfies the fair-notice doctrine. The trial court did not err in granting EOG’s summary-judgment motion. Accordingly, we overrule Tutle’s sole issue and affirm the judgment of the trial court.
[CV06]
No. 10–11–00062–CV
TUTLE & TUTLE TRUCKING, INC., Appellant
v.
EOG RESOURCES, INC., Appellee
From the 18th District Court Johnson County, Texas Trial Court No. C2010–0679
TOM GRAY Chief Justice
Dissenting opinion delivered and filed November 15, 2012
DISSENTING OPINION
After studying this several different times, I have concluded that, based on what is briefed, I would have to reverse due to lack of evidence to conclusively establish the second predicate fact, that the indemnity agreement is common to the industry (which may include which industry, oil and gas, or sand and gravel). The only basis the Court relies upon to support this factual determination is that the provision appears in one other reported case, a federal case from North Dakota (see Maj. Op. footnote 4). But that case involved the same party, EOG. Contrary to the Court’s conclusion, I think the fact that this type provision shows up nationally in only one other case and that case involved the same company is a clear indication the provision is not widely used in the industry.
I also think EOG, and the Court, has misapplied the concept of a judicial admission to the other predicate fact needed for the concept to apply. A statement in a pleading is an admission, but it can be controverted. It is a binding judicial admission only if it is a factual allegation in a live pleading and there is no unobjected-to evidence contrary to the allegation in the summary judgment record.
In any event, it appears that conflicting evidence may have been offered on the issue of whether the employee was injured in the process of transporting bulk dry material.
For either of these reasons, the result would at least be a reverse and remand for fact development.
But I have some issue with paragraph 6E, the pass through provision, as well. I think the issue here is very wide open, especially in Texas. If 6E has to meet the Express Negligence or the fair notice doctrine – it fails; particularly since the pass through provision EOG is relying upon is buried at the end of a provision that does nothing to highlight it and addresses another topic as well.
Further it seems to be a very unusual provision in that it essentially provides “you agree to indemnify me for anything I have agreed with another contractor for which to indemnify them.” You probably cannot bury another company’s agreement to indemnify for an act of negligence much deeper than that.
But I am not at all sure that the doctrine applies, because it is an indemnity of contractual indemnity, which may include a negligence claim but at the pass through level is only a contract claim.
This case also seems to potentially have some huge policy implications in it that I do not understand. Specifically, how workers compensation coverage and limits on recovery will be implicated, if at all. Does this now pit a workers compensation carrier against a general liability carrier?
For the foregoing reasons, I respectfully dissent to the judgment of the Court to the extent it does not reverse the trial court’s judgment and remand the proceeding to the trial court for further development. FN1
FN1. Recognizing that I have not garnered a second vote for my position, I have provided this quite informal dissent rather than delay the ultimate disposition of this proceeding. See In the Interest of S.A.P., 135 S.W.3d 165, 177 (Tex.App.—Waco 2004) (Gray, C.J., dissenting), rev’d and remanded, 156 S.W.3d 574 (Tex.2005)
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(a) False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful and are subject to action by the consumer protection division under Sections 17.47, 17.58, 17.60, and 17.61 of this code.(b) Except as provided in Subsection (d) of this section, the term “false, misleading, or deceptive acts or practices” includes, but is not limited to, the following acts:(1) passing off goods or services as those of another;(2) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;(3) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;(4) using deceptive representations or designations of geographic origin in connection with goods or services;(5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;(6) representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand;(7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;(8) disparaging the goods, services, or business of another by false or misleading representation of facts;(9) advertising goods or services with intent not to sell them as advertised;(10) advertising goods or services with intent not to supply a reasonable expectable public demand, unless the advertisements disclosed a limitation of quantity;(11) making false or misleading statements of fact concerning the reasons for, existence of, or amount of price reductions;(12) representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law;(13) knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service;(14) misrepresenting the authority of a salesman, representative or agent to negotiate the final terms of a consumer transaction;(15) basing a charge for the repair of any item in whole or in part on a guaranty or warranty instead of on the value of the actual repairs made or work to be performed on the item without stating separately the charges for the work and the charge for the warranty or guaranty, if any;(16) disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge;(17) advertising of any sale by fraudulently representing that a person is going out of business;(18) advertising, selling, or distributing a card which purports to be a prescription drug identification card issued under Section 4151.152, Insurance Code, in accordance with rules adopted by the commissioner of insurance, which offers a discount on the purchase of health care goods or services from a third party provider, and which is not evidence of insurance coverage, unless:(A) the discount is authorized under an agreement between the seller of the card and the provider of those goods and services or the discount or card is offered to members of the seller;(B) the seller does not represent that the card provides insurance coverage of any kind; and(C) the discount is not false, misleading, or deceptive;(19) using or employing a chain referral sales plan in connection with the sale or offer to sell of goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in connection with the purchase receives the seller’s promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers if receipt of the compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchases the merchandise or goods;(20) representing that a guarantee or warranty confers or involves rights or remedies which it does not have or involve, provided, however, that nothing in this subchapter shall be construed to expand the implied warranty of merchantability as defined in Sections 2.314 through 2.318 and Sections 2A.212 through 2A.216 to involve obligations in excess of those which are appropriate to the goods;(21) promoting a pyramid promotional scheme, as defined by Section 17.461;(22) representing that work or services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced;(23) filing suit founded upon a written contractual obligation of and signed by the defendant to pay money arising out of or based on a consumer transaction for goods, services, loans, or extensions of credit intended primarily for personal, family, household, or agricultural use in any county other than in the county in which the defendant resides at the time of the commencement of the action or in the county in which the defendant in fact signed the contract; provided, however, that a violation of this subsection shall not occur where it is shown by the person filing such suit he neither knew or had reason to know that the county in which such suit was filed was neither the county in which the defendant resides at the commencement of the suit nor the county in which the defendant in fact signed the contract;(24) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed;(25) using the term “corporation,” “incorporated,” or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction;(26) selling, offering to sell, or illegally promoting an annuity contract under Chapter 22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon’s Texas Civil Statutes), with the intent that the annuity contract will be the subject of a salary reduction agreement, as defined by that Act, if the annuity contract is not an eligible qualified investment under that Act or is not registered with the Teacher Retirement System of Texas as required by Section 8A of that Act; or(27) taking advantage of a disaster declared by the governor under Chapter 418, Government Code, by:(A) selling or leasing fuel, food, medicine, or another necessity at an exorbitant or excessive price; or(B) demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, or another necessity.(c)(1) It is the intent of the legislature that in construing Subsection (a) of this section in suits brought under Section 17.47 of this subchapter the courts to the extent possible will be guided by Subsection (b) of this section and the interpretations given by the Federal Trade Commission and federal courts to Section 5(a)(1) of the Federal Trade Commission Act [15 U.S.C.A. Sec. 45(a)(1)].(2) In construing this subchapter the court shall not be prohibited from considering relevant and pertinent decisions of courts in other jurisdictions.(d) For the purposes of the relief authorized in Subdivision (1) of Subsection (a) of Section 17.50 of this subchapter, the term “false, misleading, or deceptive acts or practices” is limited to the acts enumerated in specific subdivisions of Subsection (b) of this section.Added by Acts 1973, 63rd Leg., p. 322, ch. 143, Sec. 1, eff. May 21, 1973. Amended by Acts 1977, 65th Leg., p. 601, ch. 216, Sec. 2, 3, eff. May 23, 1977; Acts 1977, 65th Leg., p. 892, ch. 336, Sec. 1, eff. Aug. 29, 1977; Acts 1979, 66th Leg., p. 1327, ch. 603, Sec. 3, eff. Aug. 27, 1979; Acts 1987, 70th Leg., ch. 280, Sec. 1, eff. Sept. 1, 1987; Acts 1993, 73rd Leg., ch. 570, Sec. 6, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 414, Sec. 3, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 463, Sec. 1, eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 962, Sec. 1, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1229, Sec. 27, eff. June 1, 2002; Acts 2003, 78th Leg., ch. 1276, Sec. 4.001(a), eff. Sept. 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. <a target=”new” href=”http://www.legis.state.tx.us/tlodocs/79R/billtext/html/HB02018F.HTM”>728</a>, Sec. 11.101, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. <a target=”new” href=”http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB02427F.HTM”>1230</a>, Sec. 26, eff. September 1, 2007. – See more at: http://codes.lp.findlaw.com/txstatutes/BC/2/17/E/17.46#sthash.VeJ9xYEm.dpuf
– See more at: http://codes.lp.findlaw.com/txstatutes/BC/2/17/E/17.46#sthash.VeJ9xYEm.dpuf
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IN THE SUPREME COURT OF TEXAS
════════════
NO. 14-0279
════════════
FARM BUREAU COUNTY MUTUAL INSURANCE COMPANY,
PETITIONER,
v.
CRISTIL ROGERS, RESPONDENT
════════════════════════════════════════════════════
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE SIXTH DISTRICT OF TEXAS
════════════════════════════════════════════════════
PER CURIAM
This case presents the familiar issue of whether a trial court’s order, issued without a full trial and containing a Mother Hubbard clause, is final for purposes of appeal. In this declaratory judgment action involving insurance coverage, the court of appeals held that the trial court’s order denying the insurer’s motion for summary judgment is not final because the insured did not file a cross-motion for summary judgment. We agree that the order is not final, but for a different reason: it did not resolve the parties’ competing requests for attorney’s fees. We therefore affirm the court of appeals’ dismissal of this appeal.
Farm Bureau County Mutual Insurance Company filed this declaratory judgment action against its insured, Cristil Rogers, seeking a declaration that it had no duty to defend or indemnify her in an underlying tort action (the Dominguez suit)1 and requesting an award of court costs and
1 The plaintiffs in the Dominguez suit sought damages for injuries they sustained when they were thrown from their horses while riding along FM 906 in Lamar County, Texas. Their petition alleged that, as Rogers drove past them in a pickup truck, a dog leaped from the bed of the truck and charged at the horses, causing them to buck and throw the plaintiffs. The plaintiffs alleged that Rogers proximately caused their injuries by negligently failing to secure her dog. Rogers sought coverage of these claims under her automobile insurance policy with Farm Bureau.
2
attorney’s fees under the Uniform Declaratory Judgments Act (UDJA). See TEX. CIV. PRAC. & REM. CODE § 37.009 (authorizing courts in a declaratory judgment action to award “costs and reasonable and necessary attorney’s fees as are equitable and just”). Rogers answered the suit and prayed for recovery of her court costs and attorney’s fees under the Texas Deceptive Trade Practices Act (DTPA), even though she asserted no claims for relief under the DTPA.
Farm Bureau later moved for summary judgment. Rogers opposed the motion but did not file a cross-motion seeking summary judgment in her favor. After a hearing on Farm Bureau’s motion, the trial court entered an “Order Denying Plaintiff Farm Bureau[’s] . . . Motion for Summary Judgment.” The order decreed that (1) Farm Bureau “has a duty to defend [Rogers] in or as to” the Dominguez suit; (2) Farm Bureau “has a duty to indemnify [Rogers] in or as to” the Dominguez suit; (3) “[a]ll court costs are taxed against the party incurring same”; and (4) “[a]ny and all relief sought in this cause which is not expressly granted herein is DENIED.” The order did not expressly address the parties’ claims for attorney’s fees.
The court of appeals dismissed Farm Bureau’s appeal for want of jurisdiction, holding that an order denying a motion for summary judgment cannot be final and appealable unless the opposing party filed a cross-motion for summary judgment. Farm Bureau petitioned for this Court’s review. Relying on our decision in Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001), Farm Bureau argues that the trial court’s order is a final and appealable judgment because it disposed of all parties and claims, even though Rogers did not file a cross-motion for summary judgment seeking that relief. Rogers responds by arguing that the order is not a final judgment because it did not dispose of the parties’ competing claims for attorney’s fees. In reply, Farm Bureau argues that Rogers’ request for attorney’s fees under the DTPA was defective and the trial
3
court implicitly denied both parties’ requests for attorney’s fees by expressly taxing court costs to each party and denying “[a]ny and all relief . . . which is not expressly granted herein.”2
We agree with Farm Bureau that the fact that Rogers did not file a cross-motion for summary judgment did not preclude the trial court from entering a “final” judgment. As we explained in Lehmann, “the language of an order or judgment can make it final, even though it should have been interlocutory, if that language expressly disposes of all claims and all parties.” Lehmann, 39 S.W.3d at 200. If the trial court’s intent to enter a final judgment is “clear from the order, then the order is final and appealable, even though the record does not provide an adequate basis for rendition of judgment.” Id. In that case, “the judgment is final—erroneous, but final.” Id. But we agree with Rogers that the order at issue here did not dispose of all parties and claims, because neither the language taxing court costs nor the Mother Hubbard clause disposed of the parties’ claims for attorney’s fees.
In Lehmann, we held that “a judgment issued without a conventional trial is final for purposes of appeal if and only if either [1] it actually disposes of all claims and parties then before the court, regardless of its language, or [2] it states with unmistakable clarity that it is a final judgment as to all claims and all parties.” Lehmann, 39 S.W.3d at 192–93. We explained that “[a]n order does not dispose of all claims and all parties merely because it is entitled ‘final’, or because the word ‘final’ appears elsewhere in the order, or even because it awards costs.” Id. at 205 (emphasis added). “Rather, there must be some other clear indication that the trial court intended the order to completely dispose of the entire case.” Id. Attempting to resolve decades of confusion,
2 We need not consider Farm Bureau’s argument that Rogers’ claim for attorney’s fees is defective because, even if it is, Farm Bureau’s own claim for attorney’s fees remains pending. See Barshop v. Medina Cnty. Underground Water Conserv. Dist., 925 S.W.2d 618, 637–38 (Tex. 1996) (holding that failure to “substantially prevail[ ]” on a declaratory judgment claim does not preclude recovery of attorney’s fees under the UDJA).
4
we held that “the inclusion of a Mother Hubbard clause—by which we mean the statement, ‘all relief not granted is denied’, or essentially those words—does not indicate that a judgment rendered without a conventional trial is final for purposes of appeal.” Id. at 203–04. Mother Hubbard clauses are problematic because they are open to interpretation. Id. at 204. Sometimes a Mother Hubbard clause “mean[s] only that the relief requested in the motion—not all the relief requested by anyone in the case—and not granted by the order is denied,” and sometimes it “may also have no intended meaning at all, having been inserted for no other reason than that it appears in a form book or resides on a word processor.” Id. We thus rejected the notion that a Mother Hubbard clause gives “any indicia of finality in any order not issued after a conventional trial.” Id.
After Lehmann, we confirmed that the disposition of a claim for court costs does not dispose of a claim for attorney’s fees, even when doing so would also dispose of all parties and claims. See McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001). In McNally, the defendants filed a motion for summary judgment but failed to request summary judgment on their counterclaim for attorney’s fees. Although the trial court’s order granted the motion and taxed court costs against the plaintiff, we concluded that “[n]othing in the trial court’s judgment, other than its award of costs to the defendants, suggests that it intended to deny the defendants’ claim for attorney fees. The award of costs, by itself, does not make the judgment final.” Id. Consistent with our statement in Lehmann, we held that the resolution of a claim for court costs did not dispose of a claim for attorney’s fees and did not serve as an indicium of finality. See id.; Lehmann, 39 S.W.3d at 205.
This case is slightly different from McNally because, although Farm Bureau failed to expressly request attorney’s fees in its motion for summary judgment, it argues that the Mother Hubbard clause, not just the disposition of court costs, effectively denied the claim for attorney’s
5
fees. However, the reasoning of Lehmann and McNally control our decision here. Interpreting Mother Hubbard clauses in the manner Farm Bureau urges would necessarily run afoul of Lehmann because it would allow such clauses to serve as indicia of finality for purposes of appeal—the very function we prohibited in Lehmann. Thus, Mother Hubbard clauses do not, on their face, implicitly dispose of claims not expressly mentioned in the order, including claims for attorney’s fees. Instead, there must be evidence in the record to prove the trial court’s intent to dispose of any remaining issues when it includes a Mother Hubbard clause in an order denying summary judgment. See Lehmann, 39 S.W.3d at 205–06; McNally, 52 S.W.3d at 196. To hold otherwise would simply resurrect the issues we put to rest in Lehmann and McNally, albeit in a slightly different form.
Like the movant in McNally, Farm Bureau failed to request an award of attorney’s fees in its motion for summary judgment or to attach evidence supporting its claim for fees. Thus, as in McNally, there is no reason to presume that the trial court considered the issue when ruling on Farm Bureau’s motion. The order’s language taxing court costs is of no import because our decision in McNally established that such language does not, alone, evince a trial court’s intent to dispose of attorney’s fees. And most importantly, the parties presented no evidence from the record suggesting that the trial court intended the Mother Hubbard clause to deny attorney’s fees to either party.3 In the absence of evidence of the trial court’s intent with respect to the parties’ claims for attorney’s fees, we find that the trial court’s order did not dispose of all parties and claims.
3 As noted above, Farm Bureau did not need to “substantially prevail[ ]” in a suit under the UDJA to receive attorney’s fees. See Barshop, 925 S.W.2d at 637–38. Thus, the trial court did not dispose of the issue simply by ruling against Farm Bureau with respect to its duty to defend and indemnify Rogers.
6
Accordingly, without hearing oral argument, we affirm the court of appeals’ judgment dismissing the appeal for want of jurisdiction. TEX. R. APP. P. 59.1.
OPINION DELIVERED: January 30, 2015
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IN RE BRIDGESTONE AMERICAS TIRE OPERATIONS, LLC, RELATOR
ON PETITION FOR WRIT OF MANDAMUS
Argued November 5, 2014
JUSTICE LEHRMANN delivered the opinion of the Court.
Before us once again is the Texas-resident exception to the forum-non-conveniens statute.
We consider whether the exception—which allows a plaintiff residing in Texas to maintain a lawsuit
here even when the suit would otherwise be subject to dismissal for forum non conveniens—applies
in a case in which two nonresident minors sue by a next friend who is a Texas resident. The minors
themselves reside in Mexico with their grandparents, who are the minors’ legal guardians under
Mexican law. We hold that the Texas-resident exception does not apply and that the trial court
abused its discretion in refusing to dismiss the case on forum-non-conveniens grounds. Accordingly,
we conditionally grant mandamus relief.
I. Background
This case arises from a June 2009 car accident in Mexico. Armando Alvarado was driving
a 1996 Ford Explorer on a highway near Monterrey in the State of Nuevo Leon. His wife, Maria
Isabel Rodriguez, and their two minor children were passengers. The Explorer’s left rear tire
allegedly failed, causing a rollover that killed Armando and Maria and injured the children. At the
time of the accident, the family resided in Nuevo Leon. The children’s maternal grandparents
became the children’s legal guardians by operation of Mexican law and took custody of the children
in Nuevo Leon.
Gilberto Rodriguez, a Texas resident who is the children’s maternal uncle, filed a wrongfuldeath
lawsuit “as next friend” of the children in Texas against Bridgestone Americas Tire
Operations, LLC (Bridgestone), a Delaware company that manufactured the allegedly defective tire.
Other defendants included Gutierrez Brothers, Inc., doing business as Gutierrez Auto Sales, and that
company’s individual owners, brothers Juan, Jaime, and Manuel Gutierrez.1 Gutierrez Auto Sales,
which is in Hidalgo County, Texas, had purchased the used Explorer from a New Jersey Acura
dealership through a New Jersey auction house on July 12, 2007.2 Approximately two weeks later,
Gutierrez Auto Sales sold the Explorer to wholesaler Librado Leal, a company based in Nuevo Leon,
“For Export Only.” The accident occurred almost two years later. The record does not reflect when
or where the tire at issue was put on the Explorer, and nothing in the record suggests that the tire was
manufactured in Texas.
Bridgestone filed a motion to dismiss for forum non conveniens, arguing that the case
belonged in Mexico, not Texas. The trial court denied the motion, and Bridgestone filed a petition
1 The original petition named only Bridgestone and Jaime Gutierrez d/b/a Gutierrez Auto Sales as defendants.
The operative Third Amended Petition names Gutierrez Brothers, Inc., and all three Gutierrez brothers.
2 The Explorer’s first two owners were New Jersey residents.
2
for writ of mandamus in the court of appeals. In denying relief, the court of appeals held that the
case may not be dismissed on forum-non-conveniens grounds because the plaintiff, next-friend
Rodriguez, is a Texas resident. 387 S.W.3d 840, 848 (Tex. App.—Beaumont 2012). Bridgestone
now seeks mandamus relief in this Court, arguing that the trial court abused its discretion in denying
Bridgestone’s motion to dismiss.
II. Analysis
The doctrine of forum non conveniens, which originated in the common law and is now
codified in Texas, “comes into play when there are sufficient contacts between the defendant and the
forum state to confer personal jurisdiction upon the trial court, but the case itself has no significant
connection to the forum.” In re Pirelli Tire, LLC, 247 S.W.3d 670, 675–76 (Tex. 2007). Texas’s
forum-non-conveniens statute provides:
If a court of this state, on written motion of a party, finds that in the interest of justice
and for the convenience of the parties a claim or action to which this section applies
would be more properly heard in a forum outside this state, the court shall decline to
exercise jurisdiction under the doctrine of forum non conveniens and shall stay or
dismiss the claim or action.
TEX. CIV. PRAC. & REM. CODE § 71.051(b).3 Notwithstanding this mandatory language, courts “may
not stay or dismiss a plaintiff’s claim [on forum-non-conveniens grounds] if the plaintiff is a legal
resident of this state.” Id.§ 71.051(e). This so-called Texas-resident exception “ensure[s] access to
Texas courts for Texas plaintiffs.” In re Ford Motor Co., 442 S.W.3d 265, 269 (Tex. 2014).
3 The statute applies to actions for personal injuries or wrongful death. TEX. CIV. PRAC. & REM. CODE
§ 71.051(i).
3
We have held that a trial court’s erroneous denial of a forum-non-conveniens motion cannot
be adequately remedied on appeal and therefore warrants mandamus relief. In re Gen. Elec. Co., 271
S.W.3d 681, 685 (Tex. 2008). We review the trial court’s forum-non-conveniens ruling for an abuse
of discretion. Id.
A. Application of the Texas-Resident Exception
When the Texas-resident exception outlined in subsection 71.051(e) applies, a case may not
be dismissed on forum-non-conveniens grounds no matter how tenuous its connection to Texas. In
this case, as discussed above, Texas-resident Rodriguez brought a wrongful-death suit on behalf of
two nonresident minors to recover damages for their parents’ deaths. Rodriguez may not assert a
personal cause of action under Texas’s wrongful-death statute and has sued solely in his capacity as
next friend of his nephews. See TEX. CIV. PRAC. & REM. CODE § 71.004(a) (“An action to recover
damages as provided by [the wrongful-death statute] is for the exclusive benefit of the surviving
spouse, children, and parents of the deceased.”). Bridgestone argues that Rodriguez’s Texas
residency does not foreclose dismissal for two reasons: (1) Rodriguez lacked authority to sue as the
children’s next friend because they had a legal guardian, and (2) even if the children could sue by
next friend, a next friend is not a “plaintiff” whose residency may trigger the exception. We address
these contentions in turn.
1. Next-Friend Representation
We first address whether Texas Rule of Civil Procedure 44 allowed the children to sue
through a next friend. When we analyze Texas’s procedural rules, we apply the same rules of
construction that govern the interpretation of statutes. Ford Motor Co. v. Garcia, 363 S.W.3d 573,
4
579 (Tex. 2012). That is, we look first to the rule’s language and construe it according to its plain
meaning. In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434, 437 (Tex. 2007). At the same time,
we bear in mind that the rules are given a liberal construction in order to obtain “a just, fair, equitable
and impartial adjudication of the rights of litigants under established principles of substantive law.”
TEX. R. CIV. P. 1.
Rule 44, which is derived from a statute that was originally enacted in 1893,4 governs the
institution of suit by next friend and provides:
Minors . . . who have no legal guardian may sue and be represented by “next
friend” under the following rules:
(1) Such next friend shall have the same rights concerning such suits as
guardians have, but shall give security for costs, or affidavits in lieu thereof, when
required.
(2) Such next friend or his attorney of record may with the approval of the
court compromise suits and agree to judgments, and such judgments, agreements and
compromises, when approved by the court, shall be forever binding and conclusive
upon the party plaintiff in such suit.
TEX. R. CIV. P. 44.5 The only other procedural rule to mention next friends is Rule 173, which
requires the court to appoint a guardian ad litem for a party represented by a next friend or guardian
if “the next friend or guardian appears to the court to have an interest adverse to the party” or if the
parties agree. TEX. R. CIV. P. 173.2(a). Bridgestone argues that Rule 44’s plain language allows suit
4 Act approved Feb. 11, 1893, 23d Leg., R.S., ch. 6, § 1, 1893 Tex. Gen. Laws 433 (former TEX. REV. CIV.
STAT. art. 3498u) (repealed) (“[A]ny minor having a sufficient cause of action, and who has no legal guardian, can bring
suit in any of the courts of this State by next friend.”).
5 The federal rule governing next-friend representation uses similar but not identical language: “A minor or
incompetent person who does not have a duly appointed representative [which includes a general guardian, a committee,
a conservator, and a like fiduciary] may sue by a next friend or by a guardian ad litem.” FED. R. CIV. P. 17(c).
5
by a next friend only when the minor has “no legal guardian” and that the minor plaintiffs in this case
have legal guardians: their grandparents.
The parties do not dispute that, under the law of the State of Nuevo Leon where the children
reside, the children’s grandparents automatically became the children’s legal guardians upon the
death of their parents.6 However, the court of appeals concluded that, because no Texas court had
accepted the grandparents’ guardianship established in Mexico, “the minors had no legal guardian
in Texas,” and next-friend representation was appropriate under Rule 44. 387 S.W.3d at 846.
Bridgestone contends that this interpretation improperly adds words to the rule and that “no legal
guardian” means just that: “no legal guardian.”
Bridgestone’s argument has appeal, but it leaves out a very important inquiry. The
significance of a minor’s having a legal guardian in the context of Rule 44 is that, when a minor
already has a guardian who may sue on his behalf, the minor does not need next-friend representation
in order to litigate his claims. For Rule 44 to make sense, it must be construed to enable minors to
prosecute their claims—through a next friend—when they otherwise could not through a legal
guardian. It follows that, if a legal guardian has been appointed or recognized in another jurisdiction,
6 At oral argument, Rodriguez’s attorney asserted that the grandparents had executed an affidavit renouncing
their status as guardians for health reasons. That affidavit was executed on December 12, 2011—seven months after the
underlying lawsuit was filed—and is a bit unclear. The grandparents aver that they have custody of the children and
“have provided them with all care required for the welfare of the children,” but also that they “are in total agreement”
that Rodriguez “take charge” of the children. Nothing in the record suggests that the children have ever lived with
Rodriguez or that Rodriguez has petitioned any court for guardianship. Further, Bridgestone’s Mexican-law expert
testified without opposition that the grandparents would be required to petition a competent court to be excused from
their guardianship duties, and the record does not reflect that such action was taken. Finally, we note that Rodriguez
submitted, with a post-submission brief, copies of two federal tax returns purporting to show that he claimed the children
as dependents in 2009 and 2010. We grant Bridgestone’s motion to strike this evidence, which is not in the mandamus
record.
6
but that guardian lacks authority to sue on the minor’s behalf in Texas and has no legal basis for
obtaining such authority, the minor may sue by next friend under Rule 44.7 In this case, then,
whether the children could sue by next friend turns on whether their grandparents could have filed
suit in Texas on the children’s behalf as their guardians. If they could not, Rule 44 steps in.
Bridgestone summarily argues that the grandparents’ guardian status entitled them (and only
them) to bring the underlying suit, but Bridgestone fails to address the potential limitations on a
guardian’s authority outside the jurisdiction in which he was appointed or otherwise designated. The
U.S. Supreme Court recognized long ago that “[t]he authority of a guardian, like that of an executor
or administrator, appointed by a court of one state, is limited to that state, and he cannot sue in a
court . . . held within any other state, except so far as authorized to do so by its laws.” Morgan v.
Potter, 157 U.S. 195, 197 (1895) (noting that “[t]he statutes of Kansas do authorize executors or
administrators appointed in another state to sue and be sued as such in Kansas,” but “they confer no
such general authority upon guardians appointed in another state”); cf. Faulkner v. Reed, 241 S.W.
1002, 1007 (Tex. Comm’n App. 1922, holding approved) (“An administrator, appointed by the
courts of Ohio, could not, by virtue of said appointment sue or be sued in the courts of Texas, or in
any way act as a legal representative of said estate in Texas. An administrator is the agent solely of
the court appointing him, clothed with authority to administer only such assets as are within the
jurisdiction of the court making such appointment.”).
7 Nothing in the rule prevents the foreign guardian and the next friend from being the same person.
7
Our courts of appeals have recognized this principle over the years in addressing challenges
to next-friend representation, starting with Bonner v. Ogilvie, 58 S.W. 1027 (Dallas 1900, no writ).
In that case, a child’s mother appointed as his legal guardian in Louisiana sued on his behalf in her
capacity as guardian. Id. at 1028. The court held that the mother’s appointment as guardian in
Louisiana “would not give her authority to sue as such guardian in Texas, but it would not deprive
her of the power to sue in this state as next friend.” Id.
As Bridgestone points out, Bonner was decided before this Court adopted the Texas Rules
of Civil Procedure. However, Rule 44’s “no legal guardian” language tracks the 1893 statute from
which the rule is derived, and courts have relied on Bonner to interpret Rule 44. In Henderson v.
Shell Oil Co., for example, a guardian appointed by a Missouri court sued in Texas on behalf of his
ward, also a Missouri resident, regarding a tract of land in Texas that the ward owned. 179 S.W.2d
386, 386 (Tex. Civ. App.—Fort Worth), rev’d on other grounds and dismissed for want of
jurisdiction, 182 S.W.2d 994 (Tex. 1944). The court noted that “the only capacity in which [the
Missouri guardian] could be recognized as having the right to bring the suit is that of ‘next friend.’”
Id. at 388. This conclusion was reiterated in Herrin v. Falcon, in which the court of appeals held
that a father appointed by a Louisiana court to be his minor son’s guardian properly brought suit in
Texas “as next friend” where no ancillary or original guardianship proceeding had been brought in
Texas. 198 S.W.2d 117, 122 (Tex. Civ. App.—Beaumont 1946, writ ref’d n.r.e.).
8
Evaluating these decisions requires an examination of the Texas Guardianship Code, which
includes provisions governing guardians’ authority to file suit on behalf of their wards.8 In Texas,
the term “guardian” encompasses both a “guardian of the person” and a “guardian of the estate” of
a minor or other incapacitated person. TEX. EST. & G’SHIP CODE § 1002.012(b). “A guardian of the
estate of a ward appointed in this state” has authority to sue for damages on the minor’s behalf. Id.
§ 1151.104(a)(1) (emphasis added). However, like the Kansas statute at issue in Morgan, Texas’s
guardianship statutes confer no such general authority on guardians appointed or recognized in other
jurisdictions. In limited circumstances in which a nonresident ward owns property in Texas, the
Code provides a mechanism by which a guardian appointed in another jurisdiction may “be
appointed and qualified as guardian or coguardian” of the ward’s estate located here. Id.
§§ 1252.051–.053. But a nonresident guardian of a nonresident ward with no connection to Texas
beyond a possible lawsuit simply has no authority to sue on behalf of the ward in Texas in his
capacity as guardian.9
8 The Legislature recently amended and recodified Texas’s guardianship statutes, which were formerly housed
in the Probate Code but, effective January 1, 2014, are now contained in the Estates and Guardianships Code. Act of
June 17, 2011, 82d Leg., R.S., ch. 823, § 1.02, 2011 Tex. Gen. Laws 1917. Because the amendments do not affect our
analysis, we will cite the current versions of the statutes in this opinion.
9 We note that we disagree with Bonner and Herrin to the extent they hold that a child’s parent is not a legal
guardian qualified to sue on his child’s behalf in that capacity. Under Texas law, a parent has the right to represent his
child in legal proceedings and the duty to manage the child’s estate unless a guardian of the estate has been appointed.
TEX. FAM. CODE § 151.001(a)(4), (7). A parent thus typically qualifies as a legal guardian for purposes of Rule 44, and
his minor child may not sue by next friend. See In re KC Greenhouse Patio Apartments LP, 445 S.W.3d 168, 172 (Tex.
App.—Houston [1st Dist.] 2012, orig. proceeding); see also R.H. v. Smith, 339 S.W.3d 756, 759, 764 (Tex.
App.—Dallas 2011, no pet.) (holding that a father had no right to represent his minor child in a lawsuit when the child’s
grandparents had been appointed the minor’s managing conservators).
9
Accordingly, in this case, although the children’s grandparents are recognized as the
children’s guardians under the law of Nuevo Leon where they reside, they have no authority to sue
in that capacity on the children’s behalf in Texas. To avoid depriving the children of the ability to
pursue their claims before they turn eighteen, Rule 44 allows them to do so by next friend.
Accordingly, we agree with the court of appeals that, for purposes of Rule 44, the children could sue
by next friend. We therefore turn to whether Rodriguez, as a next friend, qualifies as a “plaintiff”
who may take advantage of the forum-non-conveniens statute’s Texas-resident exception.
2. Status of Next Friend
As noted above, a plaintiff’s claim may not be stayed or dismissed on forum-non-conveniens
grounds if the plaintiff is a legal resident of Texas. TEX. CIV. PRAC. & REM. CODE § 71.051(e). In
determining whether Rodriguez is a plaintiff for purposes of this provision, we focus on the specific
statutory definition of “plaintiff,” but we also consider that definition in the context of the entire
forum-non-conveniens statute and chapter 71 as a whole. See CHCA Woman’s Hosp. v. Lidji, 403
S.W.3d 228, 232 (Tex. 2013) (“We analyze statutory language in context, considering the specific
section at issue as well as the statute as a whole.”). We presume the Legislature enacted the statute
“with complete knowledge of the existing law and with reference to it.” Acker v. Tex. Water
Comm’n, 790 S.W.2d 299, 301 (Tex. 1990).
The forum-non-conveniens statute defines the term “plaintiff” as follows:
“Plaintiff” means a party seeking recovery of damages for personal injury or
wrongful death. In a cause of action in which a party seeks recovery of damages for
personal injury to or the wrongful death of another person, “plaintiff” includes both
that other person and the party seeking such recovery. The term does not include a
counterclaimant, cross-claimant, or third-party plaintiff or a person who is assigned
10
a cause of action for personal injury, or who accepts an appointment as a personal
representative in a wrongful death action, in bad faith for purposes of affecting in any
way the application of this section.
TEX. CIV. PRAC. & REM. CODE § 71.051(h)(2). In the context of this case, we consider whether
Rodriguez, as a next friend, qualifies as “a party seeking recovery of damages for personal injuries
or wrongful death.” We hold that he does not.
The status of a next friend under Texas law is well settled. “In a suit by a ‘next friend,’ the
real party plaintiff is the child and not the next friend.” Gracia v. RC Cola–7-Up Bottling Co., 667
S.W.2d 517, 519 (Tex. 1984); accord Safeway Stores of Tex. v. Rutherford, 111 S.W.2d 688, 689
(Tex. 1938). Indeed, we long ago stated that “the next friend is not a party to the suit instituted by
a minor by his aid.” Martin v. Weyman, 26 Tex. 460, 468 (1863) (citation omitted); see also Gulf,
C. & S. F. Ry. Co., 1 S.W. 161, 163 (Tex. 1886) (“When it appears with certainty . . . that the action
[by next friend] is based on the right of the minor; that the relief sought is such as the minor alone
would be entitled to on the facts pleaded, and that this is sought for the use and benefit of the minor;
then we are of the opinion that the minor is the real plaintiff, whatsoever may be the formula used.”).
The U.S. Supreme Court has similarly stated:
It is the infant, and not the next friend, who is the real and proper party. The next
friend, by whom the suit is brought on behalf of the infant, is neither technically nor
substantially the party, but resembles an attorney, or a guardian ad litem, by whom
a suit is brought or defended in behalf of another.
Morgan, 157 U.S. at 198. This is consistent with our longstanding recognition that a minor’s lack
of capacity to sue, unlike standing, is not a jurisdictional defect and that a challenge to capacity may
be waived. Austin Nursing Ctr. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005).
11
In light of this well-settled law, we cannot conclude that a next friend is “a party seeking
recovery of damages for personal injury or wrongful death.” TEX. CIV. PRAC. & REM. CODE
§ 71.051(h)(2). That description fits the persons who are authorized to bring a wrongful-death action
under section 71.004, but not the person serving as a conduit when the ones authorized to bring the
action are minors. As such, a next friend’s legal residency in Texas does not trigger the forum-nonconveniens
statute’s Texas-resident exception. So interpreted, the statute’s plain language serves
its purpose of “ensur[ing] access to Texas courts for Texas plaintiffs.” In re Ford Motor Co., 442
S.W.3d at 269. Texas courts have no responsibility to protect the interests of next friends, who
themselves must protect and advance the interests of the minors suing through them. That is, next
friends have no interest in keeping a case in Texas beyond the interests of the minors they represent.
If the minors whose wrongful-death claims are being prosecuted are not Texas residents, their right
to access Texas courts does not trump a defendant’s right to dismissal for forum non conveniens.
The court of appeals interpreted the statute differently, relying principally on the language
excluding personal representatives appointed in bad faith from qualifying as plaintiffs. The specific
language at issue states: “The term [plaintiff] does not include . . . a person . . . who accepts an
appointment as a personal representative in a wrongful death action, in bad faith for purposes of
affecting in any way the application of this section.” TEX. CIV. PRAC. & REM. CODE § 71.051(h)(2).
The court concluded, and Rodriguez argues, that this exclusion demonstrates that the Legislature
intended a next friend to qualify as a plaintiff for purposes of the Texas-resident exception unless
the defendant shows the next friend was appointed in bad faith. We disagree.
12
Considering this language in the context of chapter 71 as a whole, as we must, we read this
exclusion to apply to the prosecution of a wrongful-death action by an executor or administrator
under subsection 71.004(c). Section 71.004 provides:
(a) An action to recover damages [for wrongful death] is for the exclusive benefit of
the surviving spouse, children, and parents of the deceased.
(b) The surviving spouse, children, and parents of the deceased may bring the action
or one or more of those individuals may bring the action for the benefit of all.
(c) If none of the individuals entitled to bring an action have begun the action within
three calendar months after the death of the injured individual, his executor or
administrator shall bring and prosecute the action unless requested not to by all those
individuals.
An executor or administrator thus has express statutory authority to bring an action that wrongfuldeath
beneficiaries could have brought but chose not to. When that happens, the executor or
administrator—i.e., the personal representative—is the only possible party plaintiff.10 See In re Ford
Motor Co., 442 S.W.3d at 281 (noting that a personal representative qualifies as a party “seek[ing]
recovery of damages for personal injury to or the wrongful death of another person” (quoting TEX.
CIV. PRAC. & REM. CODE § 71.051(h)(2))). In turn, the bad-faith exclusion precludes such a plaintiff
from taking advantage of the Texas-resident exception when he accepted the appointment “in bad
faith for purposes of affecting in any way the application of this section.” Id. § 71.051(h)(2).
10 Section 71.012 is also instructive. Entitled “Qualification of Foreign Personal Representative,” section 71.012
provides that, when an executor or administrator of a nonresident’s estate “is the plaintiff” in a wrongful-death action,
that “foreign personal representative” need not apply for letters testamentary “to bring and prosecute the action” so long
as he has complied with the statutory requirements for the probate of a foreign will. TEX. CIV. PRAC. & REM. CODE
§ 71.012. This lends further support to our interpretation of “personal representative,” as used in the Texas-resident
exception, to apply to executors or administrators exercising their authority to sue under subsection 71.004(c). See also
TEX. EST. & G’SHIP CODE § 22.031(a) (defining “personal representative” to include: an executor and independent
executor; an administrator, independent administrator, and temporary administrator; and their successors).
13
The court of appeals’ overly broad reading of the bad-faith exclusion stretches the definition
of plaintiff beyond the breaking point. If the term “personal representative” as used in section
71.051 were broad enough to include a next friend, we see no principled reason why it would not
also include a guardian ad litem, an attorney ad litem, or an amicus attorney.11 See Morgan, 157 U.S.
at 198 (noting that a next friend resembles a guardian ad litem). Yet it would be absurd to classify
a guardian ad litem as a plaintiff, and, for the reasons discussed above, it makes no more sense to
so classify a next friend. We note that, had the children at issue been adults when suit was filed, the
Texas-resident exception clearly would not have applied. Allowing them to take advantage of the
exception and maintain a suit in Texas merely because they are minors who lack capacity to
represent themselves in litigation defies logic as well as the statute’s plain language and purpose.
In sum, we hold that the Texas-resident exception does not foreclose dismissal of this action
for forum non conveniens. Accordingly, we turn to whether the forum-non-conveniens factors
mandate dismissal.
B. Application of Forum-Non-Conveniens Factors
As noted above, the forum-non-conveniens statute mandates the stay or dismissal of a
personal-injury or wrongful-death action when the court “finds that in the interest of justice and for
the convenience of the parties [the action] would be more properly heard in a forum outside this
state.” TEX. CIV. PRAC. & REM. CODE § 71.051(b). In short, the statute requires dismissal of a case
11 Next friends generally are not appointed. They simply act on behalf of the minor unless and until the court
steps in to protect the minor in the event of a conflict of interest. TEX. R. CIV. P. 44, 173; see also Saldarriaga v.
Saldarriaga, 121 S.W.3d 493, 498 (Tex. App.—Austin 2003, no pet.) (noting that Rule 44 “does not provide for any
kind of procedure for the appointment of a next friend,” but “merely gives minors and incapacitated persons the ability
to sue and appear by a representative”).
14
that “has no significant connection to the forum.” In re Pirelli Tire, LLC, 247 S.W.3d 670, 675–76
(Tex. 2007).
The statute lists six factors for consideration in evaluating a forum-non-conveniens motion.
Specifically, the court must consider whether:
(1) an alternate forum exists in which the claim or action may be tried;
(2) the alternate forum provides an adequate remedy;
(3) maintenance of the claim or action in the courts of this state would work
a substantial injustice to the moving party;
(4) the alternate forum, as a result of the submission of the parties or
otherwise, can exercise jurisdiction over all the defendants properly joined to the
plaintiff’s claim;
(5) the balance of the private interests of the parties and the public interest of
the state predominate in favor of the claim or action being brought in an alternate
forum, which shall include consideration of the extent to which an injury or death
resulted from acts or omissions that occurred in this state; and
(6) the stay or dismissal would not result in unreasonable duplication or
proliferation of litigation.
Id. § 71.051(b)(1)–(6). Our decision in Pirelli Tire guides the application of these factors to this
case.
The facts of the two cases are strikingly similar. Pirelli Tire involved an alleged tire failure
leading to a rollover accident in Mexico that caused the death of a Mexican resident who was in the
truck at the time of the accident. 247 S.W.3d at 673. Two years before the accident, a Texas
dealership had purchased the truck at an auction in another state and sold it eleven days later to a
Mexican citizen who imported it into Mexico the same day, where it was used and serviced until the
15
accident. Id. The tire was not manufactured in Texas, and the tire’s manufacturer, Pirelli Tire, was
not formed in Texas, nor did it maintain its principal place of business here. Id. The decedent’s
family sued Pirelli Tire for negligence and strict liability in designing and manufacturing the tire.
Id. Pirelli Tire filed a motion to dismiss for forum non conveniens, which the trial court denied. Id.
Applying the factors listed above, we granted Pirelli Tire’s petition for writ of mandamus.
We held that Pirelli Tire had demonstrated the availability of an adequate forum by stipulating that
it would submit to personal jurisdiction in Mexico and would not assert a statute-of-limitations
defense, and that Mexico was not rendered an inadequate forum merely because its laws may have
been “less favorable” to the plaintiffs. Id. at 677–78. We also held that private-interest factors
favored a Mexican forum, noting that “key evidence and witnesses concerning damages [were] in
Mexico,” including a witness to the accident, the accident investigators and medical personnel,
witnesses most likely to be familiar with the condition and maintenance of the truck and the tire, the
truck’s owner, and the accident scene itself. Id. at 678–79. We also noted that evidence concerning
the tire’s design and manufacture was in Georgia or Iowa, not Texas. Id. at 679. Finally, we held
that the public interests involved “strongly favor[ed] Mexico,” as Mexico has a “paramount” interest
in seeing that its citizens are compensated for their injuries as well as interests in the safety of
Mexican highways and products within its borders. Id. We concluded that “it is unfair to impose
upon the citizens of [the Texas forum county] the cost and administrative burden of a complex
products-liability suit with no significant connection to Texas.” Id.
Like Pirelli Tire, this case involves: Mexican citizens and residents involved in a car accident
in Mexico; an alleged failure of a tire manufactured in the United States, but not in Texas; and brief
16
ownership of the subject vehicle by a Texas dealership approximately two years before the accident,
followed by ownership and maintenance of the vehicle in Mexico. Also like Pirelli Tire, key
evidence and witnesses relating to the accident, the vehicle, the tire, and damages are in Mexico, and
the evidence concerning the tire’s design and manufacture may be in the United States, but it is not
in Texas. These similarities would seem to render Pirelli Tire dispositive of the forum-nonconveniens
analysis.12 However, Rodriguez argues that this case is distinguishable from Pirelli Tire
because of the presence of Texas defendants in the suit. As noted above, in addition to Bridgestone,
the plaintiffs sued the Texas dealership—and its individual owners—that had owned the Explorer
for two weeks in 2007 before selling it to a wholesaler for export to Mexico.13 The petition alleged
that the dealership was liable for selling the vehicle with a recalled tire.
Rodriguez asserts that Mexico’s courts lack personal jurisdiction over these defendants—one
of whom has affirmatively stated that he will not submit to such jurisdiction—rendering Mexico an
inadequate alternate forum. See TEX. CIV. PRAC. & REM. CODE § 71.051(b)(4) (requiring
consideration of whether “the alternate forum, as a result of the submission of the parties or
otherwise, can exercise jurisdiction over all the defendants properly joined to the plaintiff’s claim”).
We need not address whether a showing that the Mexico courts lack jurisdiction over the Gutierrez
12 We found that the trial court had abused its discretion in Pirelli Tire even though the applicable version of
the forum-non-conveniens statute permitted, but did not require, the trial court to dismiss for forum non conveniens when
it found no significant connection to Texas under the enumerated factors. See Act of May 27, 1997, 75th Leg., R.S., ch.
424, § 1, sec. 71.051, 1997 Tex. Gen. Laws 1680, 1680, amended by Act of June 2, 2003, 78th Leg., R.S., ch. 204,
§ 3.04, sec. 71.051, 2003 Tex. Gen. Laws 847, 854. As amended in 2003, the current version of the statute requires
dismissal upon such a finding. TEX. CIV. PRAC. & REM. CODE § 71.051(b).
13 The plaintiffs in Pirelli Tire initially sued both Pirelli and the Texas dealership that had briefly owned the
vehicle. 247 S.W.3d at 673 n.1. However, the plaintiffs nonsuited the dealer in exchange for Pirelli Tire’s agreement
not to remove the case to federal court. Id. The dealer thus played no role in our forum-non-conveniens analysis.
17
defendants would be dispositive of the forum-non-conveniens analysis because the only record
evidence on the subject is that such jurisdiction exists.14 Bridgestone’s Mexican-law expert testified
that the Mexico courts would have jurisdiction over all defendants, both because Bridgestone had
agreed to submit to Mexico’s jurisdiction and because the “denial of justice” doctrine allows a
Mexico court to “seize jurisdiction” if a foreign court has rejected a case on forum-non-conveniens
grounds. Rodriguez did not designate an expert to counter these conclusions and thus presented no
evidence to support his interpretation of Mexican law. Accordingly, the presence of the Texas
defendants does not meaningfully distinguish this case from Pirelli Tire for purposes of evaluating
the adequacy of the alternate forum as part of the forum-non-conveniens analysis.15
As they did in Pirelli Tire, the forum-non-conveniens factors “clearly and overwhelmingly
favor a Mexican forum for resolution of this dispute.” 247 S.W.3d at 679. Accordingly, we hold
that the trial court abused its discretion in denying Bridgestone’s motion to dismiss.
14 Factually, Rodriguez’s inclusion of claims against the dealership does not provide much of a distinction from
Pirelli Tire. Notably, neither the New Jersey dealer that sold the Explorer to the Texas dealership nor the wholesaler
that imported the car to Mexico were sued, even though it is unclear when the tire at issue was put on the Explorer. The
principal claims in the case involve the allegedly defective design and manufacture of the failed tire. As in Pirelli Tire,
“[t]he happenstance that the truck was in Texas for [less than a month] before it was sold and imported to Mexico is
simply insufficient to provide Texas with any interest in this case.” Id. at 679.
15 To the extent Rodriguez claims Mexico is an inadequate forum because the defendants have not waived any
limitations defenses, we agree with Bridgestone that the record does not support this assertion. Leaving aside that
Rodriguez did not make this argument in the trial court, nothing in the record suggests that Mexican law differs from
Texas law on the running of limitations on a minor’s claim. TEX. CIV. PRAC. & REM. CODE § 16.001(a)(1), (b) (stating
that the statute of limitations on a minor’s claims does not begin to run until the minor turns eighteen). While we do not
necessarily presume that the laws of Mexico and Texas are identical, at best the absence of evidence in the record renders
us unable to evaluate Rodriguez’s implied assertion that statute-of-limitations issues affect the forum-non-conveniens
analysis.
18
III. Conclusion
We hold that Texas law allows minors to sue by next friend when they have a legal guardian
who is not authorized to sue in Texas in that capacity. We also hold that a next friend is not a
plaintiff for purposes of the forum-non-conveniens statute’s Texas-resident exception. Finally, we
hold that application of the forum-non-conveniens factors mandates dismissal of this case as a matter
of law. Accordingly, we conditionally grant Bridgestone’s petition for writ of mandamus and order
the trial court to vacate its order denying Bridgestone’s motion to dismiss. We further order the trial
court to “set terms and conditions for . . . dismissing [this] action . . . as the interests of justice may
require, giving due regard to the rights of the parties to the claim or action,” in a manner that is
consistent with this opinion. TEX. CIV. PRAC. & REM. CODE § 71.051(c). The writ will issue only
if the trial court fails to comply.
_________________________________
Debra H. Lehrmann
Justice
OPINION DELIVERED: April 24, 2015
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
Reversed and Remanded and Opinion Filed January 28, 2015
In The Court of Appeals Fifth District of Texas at Dallas No. 05-13-01285-CV CREST INFINITI II, LP, Appellant V. TEXAS RV OUTLET AND TURN KEY RECOVERY, Appellees On Appeal from the County Court at Law No. 1 Collin County, Texas Trial Court Cause No. 1-860-2012
MEMORANDUM OPINION Before Justices Francis, Evans, and Stoddart Opinion by Justice Francis Crest Infiniti II, LP appeals the trial court’s take-nothing judgment in favor of Texas RV Outlet and Turn Key Recovery.
In two issues, Crest claims the evidence established as a matter of law Crest was entitled to judgment on its tortious interference with a contract and conversion claims, or alternatively, the trial court’s conclusion to the contrary is against the great weight and preponderance of the evidence. Crest also contends it was entitled to attorney’s fees. Appellees did not file a brief. We reverse the trial court’s judgment and remand for further proceedings consistent with this opinion. Billy Whitaker bought an Infiniti M45 from Texas RV Outlet, financing the purchase through Texas RV Outlet’s finance company. In November 2011, Whitaker took his car to Crest for maintenance and repair work. After receiving an estimate of the cost, Whitaker approved the –2– work. Although a Crest employee contacted Whitaker when the work was completed, Whitaker did not pay for the work or pick up his car. Nearly three weeks later, at the request of Texas RV Outlet, Turn Key Recovery repossessed Whitaker’s car for nonpayment, removed it from the Crest lot, and towed it to Texas RV Outlet. When Texas RV Outlet refused to return the vehicle, and ultimately sold it, Crest sued for tortious interference with a contract and conversion and sought attorney’s fees. The trial court ordered Crest take nothing and filed findings of fact and conclusions of law, including that appellees did not convert property owned by Crest, Crest did not have a lien on the car, and Crest did not sustain any actual damages. In its first issue, Crest contends the trial court’s judgment was contrary to the law and manifestly wrong and unjust because the undisputed evidence shows Crest had a lien under section 70.001 of the property code, Crest’s lien had priority over that held by Texas RV Outlet, Crest had possession of the car and appellees converted the car when they towed it from Crest’s car lot without permission. We review a trial court’s findings of fact under the same legal and factual sufficiency of the evidence standards used when determining if sufficient evidence exists to support an answer to a jury question. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
When the appellate record contains a reporter’s record, as it does in this case, findings of fact are not conclusive on appeal if the contrary is established as a matter of law or if there is no evidence to support the findings. Ramsey v. Davis, 261 S.W.3d 811, 815 (Tex. App.―Dallas 2008, pet. denied). A party challenging the sufficiency of the evidence supporting an adverse finding on which the appealing party had the burden of proof must show the matter was established as a matter of law, or the trial court’s failure to make the finding was against the great weight and preponderance of the evidence. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). –3– Conversion is the unauthorized and wrongful assumption and exercise of dominion and control over the owner’s or possessor’s property to the exclusion of, or inconsistent with, the owner/possessor’s rights. See Waisath v. Lack’s Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971); see French v. Moore, 169 S.W.3d 1, 14 (Tex. App.―Houston [1st Dist.] 2004, no pet.) (conversion not restricted to owners of property but may also be brought by aggrieved party possessing or having right of immediate possession of property). Conversion is designed to protect against interference with a person’s possessory interest in personal property. Zapata v. Ford Motor Credit Co., 615 S.W.2d 198, 201 (Tex. 1981); see also Killian v. Trans Union Leasing Corp., 657 S.W.2d 189, 192 (Tex. App.―San Antonio 1983, writ ref’d n.r.e.) (conversion “is concerned with possession, not title”). To establish a claim for conversion of personal property, a plaintiff must prove: (1) it owned or had legal possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with, the plaintiff’s rights; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. Khorshid, Inc. v. Christian, 257 S.W.3d 748, 758−59 (Tex. App.―Dallas 2008, no pet.). Chapter 70 of the Texas Property Code provides that a worker “who by labor repairs a vehicle” has a lien on the vehicle and may retain possession of the vehicle pending payment of the amount due under a contract for the repairs. TEX. PROP. CODE ANN. § 70.001 (West 2014).
A possessory mechanic’s lien has priority over a seller’s perfected security interest in an automobile. Gulf Coast State Bank v. Nelms, 525 S.W.2d 866, 869−70 (Tex. 1975). At trial, Chance Simpson, a Crest service advisor, said Whitaker brought his car in for service, and Simpson completed a work order detailing the problems Whitaker was experiencing. Whitaker also presented a warranty to cover the work, but Simpson said it was an “after market” –4– warranty (not issued by Crest or the factory) and did not cover the repairs. James Saliva, the service manager at Crest, spoke with Whitaker before the repairs were made and offered him a 10% discount; he also offered to trade in the Infiniti on a newer model. Whitaker approved the work order, and on December 2, Crest completed the work, which totaled $5,925.81. When Crest offered the exhibit with the work estimate and the actual repair amount, appellees did not object. Simpson said they called Whitaker, but he did not pay for the repairs nor did he claim his vehicle. On December 21, 2011, a Crest technician called Saliva and told him a tow company was taking Whitaker’s car. Saliva went to the area on Crest’s property where all the completed cars are placed awaiting customer pick up and saw the Turn Key Recovery tow truck with Whitaker’s car leaving the property. Saliva got in his car and tried to chase the truck but due to traffic was unable to stop it; he also “tried calling them with my cellphone as I was driving.” When he returned to Crest, he called Turn Key Recovery and Texas RV Outlet and demanded the return of the car; however, neither company returned the car or paid for the repairs. Saliva described the Crest lot where Whitaker’s car was as the staging area holding “all of the completed cars for customers to pick up.” The lot is not public property but is Crest private property. Saliva stated that the lot was not locked during hours of operation in order to allow customers to easily retrieve their cars and to comply with fire code regulations. But “the whole property is locked down and guarded by security after hours.” Saliva also said the property had “No Trespass” signs posted on the wall that were visible to all. Lenny Zak, the owner of Texas RV Outlet, said Whitaker bought the car and, after making only one payment, defaulted on the remainder of the payments. Turn Key Recovery repossessed Whitaker’s car at Zak’s request. Zak said he did not believe they had broken the law because Texas RV Outlet had the lien on the car title. He conceded Turn Key Recovery was –5– acting as Texas RV Outlet’s agent. When asked if he knew about mechanic’s liens and the right of a dealership or auto shop to retain possession of a vehicle until payment for work is made, he replied, “I don’t know about that.” This evidence shows Crest performed $5,925.81 worth of repairs and maintenance on Whitaker’s car at Whitaker’s request and authorization; as a result, Crest had a possessory mechanic’s lien in that amount for the work performed on the car; Turn Key Recovery, acting as Texas RV Outlet’s agent, took control over the car to the exclusion of Crest without Crest’s permission or authorization; Crest demanded return of the property; and Texas RV Outlet refused and sold the car. Given this undisputed evidence, the trial court erred by concluding Crest did not have a lien on the car, appellees did not convert the car which Crest possessed at the time, and Crest did not sustain $5,925.81 in actual damages. See Gulf Coast State Bank, 525 S.W.2d at 869. Appellees spent considerable time at trial discussing Crest’s security, including why the lot remained unlocked during regular business hours, and even suggested addition measures Crest could have taken to protect its property from appellees.
In short, Crest was faulted for failing to prevent appellee Turn Key Recovery from entering its lot and “peaceably” towing the car. While a possessory lien held by a mechanic or repairman may be lost upon the voluntary delivery of the vehicle to the owner, we conclude it was not lost when appellees trespassed and took the car from Crest’s private lot without permission or authority. We sustain Crest’s first issue. In its second issue, Crest contends it was entitled to attorney’s fees under Chapter 70 of the property code and asks this Court to award the same. Section 70.008 of the property code provides, in relevant part, “The court in a suit concerning possession of a motor vehicle . . . and a debt due on it may award reasonable attorney’s fees to the prevailing party.” TEX. PROP. CODE –6– ANN. § 70.008 (West 2014). The statute does not restrict the award of attorney’s fees to one suing on a debt who wishes to retain possession of a vehicle. Elite Towing v. LSI Fin. Grp., 985 S.W.2d 635, 645 (Tex. App.―Austin 1999, no pet.); Kollision King, Inc. v. Calderon, 968 S.W.2d 20, 24 (Tex. App.―Corpus Christi 1998, no pet.). Crest’s right of possession of the vehicle and the debt secured by the possessory lien were at issue in this case. And because Crest established as a matter of law that Texas RV Outlet and Turn Key Recovery, as its agent, converted the vehicle, Crest is the prevailing party.
We sustain Crest’s second issue to the extent it seeks a determination of whether attorney’s fees may be awarded to Crest in this case. See Elite Towing, 985 S.W.2d at 645 (prevailing party entitled to attorney’s fees); Kollision King, Inc., 968 S.W.2d at 24 (same); Seureau v. Mudd, 515 S.W.2d 746, 749 (Tex. Civ. App.—Houston [14th Dist.] 1974, writ ref’d, n.r.e.) (within trial court’s discretion to award attorney’s fees to prevailing party). We reverse the trial court’s judgment that Crest take nothing and remand this case to the trial court to (1) render judgment in favor of Crest in the amount of $5,925.81 on its claim for conversion and (2) determine the amount of attorney’s fees, if any, to be awarded to Crest as the prevailing party.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
This section was amended by the 84th Legislature. Pending publication of the current statutes, see S.B. 735, 84th Legislature, Regular Session, for amendments affecting this section.
Sec. 41.001. DEFINITIONS. In this chapter:
(1) “Claimant” means a party, including a plaintiff, counterclaimant, cross-claimant, or third-party plaintiff, seeking recovery of damages. In a cause of action in which a party seeks recovery of damages related to injury to another person, damage to the property of another person, death of another person, or other harm to another person, “claimant” includes both that other person and the party seeking recovery of damages.
(2) “Clear and convincing” means the measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.
(3) “Defendant” means a party, including a counterdefendant, cross-defendant, or third-party defendant, from whom a claimant seeks relief.
(4) “Economic damages” means compensatory damages intended to compensate a claimant for actual economic or pecuniary loss; the term does not include exemplary damages or noneconomic damages.
(5) “Exemplary damages” means any damages awarded as a penalty or by way of punishment but not for compensatory purposes. Exemplary damages are neither economic nor noneconomic damages. ‘Exemplary damages’ includes punitive damages.
(6) “Fraud” means fraud other than constructive fraud.
(7) “Malice” means a specific intent by the defendant to cause substantial injury or harm to the claimant.
(8) “Compensatory damages” means economic and noneconomic damages. The term does not include exemplary damages.
(9) “Future damages” means damages that are incurred after the date of the judgment. Future damages do not include exemplary damages.
(10) “Future loss of earnings” means a pecuniary loss incurred after the date of the judgment, including:
(A) loss of income, wages, or earning capacity; and
(B) loss of inheritance.
(11) “Gross negligence” means an act or omission:
(A) which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and
(B) of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.
(12) “Noneconomic damages” means damages awarded for the purpose of compensating a claimant for physical pain and suffering, mental or emotional pain or anguish, loss of consortium, disfigurement, physical impairment, loss of companionship and society, inconvenience, loss of enjoyment of life, injury to reputation, and all other nonpecuniary losses of any kind other than exemplary damages.
(13) “Periodic payments” means the payment of money or its equivalent to the recipient of future damages at defined intervals.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 13.02, eff. Sept. 1, 2003.
Sec. 41.002. APPLICABILITY. (a) This chapter applies to any action in which a claimant seeks damages relating to a cause of action.
(b) This chapter establishes the maximum damages that may be awarded in an action subject to this chapter, including an action for which damages are awarded under another law of this state. This chapter does not apply to the extent another law establishes a lower maximum amount of damages for a particular claim.
(c) Except as provided by Subsections (b) and (d), in an action to which this chapter applies, the provisions of this chapter prevail over all other law to the extent of any conflict.
(d) Notwithstanding any provision to the contrary, this chapter does not apply to:
(1) Section 15.21, Business & Commerce Code (Texas Free Enterprise and Antitrust Act of 1983);
(2) an action brought under the Deceptive Trade Practices-Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code) except as specifically provided in Section 17.50 of that Act;
(3) an action brought under Chapter 36, Human Resources Code; or
(4) an action brought under Chapter 21, Insurance Code.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Amended by Acts 1989, 71st Leg., ch. 380, Sec. 5, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1129, Sec. 16, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 260, Sec. 9, eff. May 30, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 4.01, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 204, Sec. 13.03, eff. Sept. 1, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. 806 (S.B. 563), Sec. 18, eff. September 1, 2005.
Sec. 41.003. STANDARDS FOR RECOVERY OF EXEMPLARY DAMAGES. (a) Except as provided by Subsection (c), exemplary damages may be awarded only if the claimant proves by clear and convincing evidence that the harm with respect to which the claimant seeks recovery of exemplary damages results from:
(1) fraud;
(2) malice; or
(3) gross negligence.
(b) The claimant must prove by clear and convincing evidence the elements of exemplary damages as provided by this section. This burden of proof may not be shifted to the defendant or satisfied by evidence of ordinary negligence, bad faith, or a deceptive trade practice.
(c) If the claimant relies on a statute establishing a cause of action and authorizing exemplary damages in specified circumstances or in conjunction with a specified culpable mental state, exemplary damages may be awarded only if the claimant proves by clear and convincing evidence that the damages result from the specified circumstances or culpable mental state.
(d) Exemplary damages may be awarded only if the jury was unanimous in regard to finding liability for and the amount of exemplary damages.
(e) In all cases where the issue of exemplary damages is submitted to the jury, the following instruction shall be included in the charge of the court:
“You are instructed that, in order for you to find exemplary damages, your answer to the question regarding the amount of such damages must be unanimous.”
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 13.04, eff. Sept. 1, 2003.
Sec. 41.004. FACTORS PRECLUDING RECOVERY. (a) Except as provided by Subsection (b), exemplary damages may be awarded only if damages other than nominal damages are awarded.
(b) Exemplary damages may not be awarded to a claimant who elects to have his recovery multiplied under another statute.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 13.05, eff. Sept. 1, 2003.
Sec. 41.005. HARM RESULTING FROM CRIMINAL ACT. (a) In an action arising from harm resulting from an assault, theft, or other criminal act, a court may not award exemplary damages against a defendant because of the criminal act of another.
(b) The exemption provided by Subsection (a) does not apply if:
(1) the criminal act was committed by an employee of the defendant;
(2) the defendant is criminally responsible as a party to the criminal act under the provisions of Chapter 7, Penal Code;
(3) the criminal act occurred at a location where, at the time of the criminal act, the defendant was maintaining a common nuisance under the provisions of Chapter 125, Civil Practice and Remedies Code, and had not made reasonable attempts to abate the nuisance; or
(4) the criminal act resulted from the defendant’s intentional or knowing violation of a statutory duty under Subchapter D, Chapter 92, Property Code, and the criminal act occurred after the statutory deadline for compliance with that duty.
(c) In an action arising out of a criminal act committed by an employee, the employer may be liable for punitive damages but only if:
(1) the principal authorized the doing and the manner of the act;
(2) the agent was unfit and the principal acted with malice in employing or retaining him;
(3) the agent was employed in a managerial capacity and was acting in the scope of employment; or
(4) the employer or a manager of the employer ratified or approved the act.
Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.006. AWARD SPECIFIC TO DEFENDANT. In any action in which there are two or more defendants, an award of exemplary damages must be specific as to a defendant, and each defendant is liable only for the amount of the award made against that defendant.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Renumbered from Civil Practice & Remedies Code Sec. 41.005 by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.007. PREJUDGMENT INTEREST. Prejudgment interest may not be assessed or recovered on an award of exemplary damages.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Renumbered from Civil Practice & Remedies Code Sec. 41.006 by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.008. LIMITATION ON AMOUNT OF RECOVERY. (a) In an action in which a claimant seeks recovery of damages, the trier of fact shall determine the amount of economic damages separately from the amount of other compensatory damages.
(b) Exemplary damages awarded against a defendant may not exceed an amount equal to the greater of:
(1)(A) two times the amount of economic damages; plus
(B) an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or
(2) $200,000.
(c) This section does not apply to a cause of action against a defendant from whom a plaintiff seeks recovery of exemplary damages based on conduct described as a felony in the following sections of the Penal Code if, except for Sections 49.07 and 49.08, the conduct was committed knowingly or intentionally:
(1) Section 19.02 (murder);
(2) Section 19.03 (capital murder);
(3) Section 20.04 (aggravated kidnapping);
(4) Section 22.02 (aggravated assault);
(5) Section 22.011 (sexual assault);
(6) Section 22.021 (aggravated sexual assault);
(7) Section 22.04 (injury to a child, elderly individual, or disabled individual, but not if the conduct occurred while providing health care as defined by Section 74.001);
(8) Section 32.21 (forgery);
(9) Section 32.43 (commercial bribery);
(10) Section 32.45 (misapplication of fiduciary property or property of financial institution);
(11) Section 32.46 (securing execution of document by deception);
(12) Section 32.47 (fraudulent destruction, removal, or concealment of writing);
(13) Chapter 31 (theft) the punishment level for which is a felony of the third degree or higher;
(14) Section 49.07 (intoxication assault);
(15) Section 49.08 (intoxication manslaughter);
(16) Section 21.02 (continuous sexual abuse of young child or children); or
(17) Chapter 20A (trafficking of persons).
(d) In this section, “intentionally” and “knowingly” have the same meanings assigned those terms in Sections 6.03(a) and (b), Penal Code.
(e) The provisions of this section may not be made known to a jury by any means, including voir dire, introduction into evidence, argument, or instruction.
(f) This section does not apply to a cause of action for damages arising from the manufacture of methamphetamine as described by Chapter 99.
Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.12, eff. Sept. 2, 1987. Renumbered from Civil Practice & Remedies Code Sec. 41.007 and amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 2001, 77th Leg., ch. 643, Sec. 3, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 204, Sec. 13.06, eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 593 (H.B. 8), Sec. 3.03, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch. 309 (H.B. 533), Sec. 2, eff. June 19, 2009.
Sec. 41.009. BIFURCATED TRIAL. (a) On motion by a defendant, the court shall provide for a bifurcated trial under this section. A motion under this subsection shall be made prior to voir dire examination of the jury or at a time specified by a pretrial court order issued under Rule 166, Texas Rules of Civil Procedure.
(b) In an action with more than one defendant, the court shall provide for a bifurcated trial on motion of any defendant.
(c) In the first phase of a bifurcated trial, the trier of fact shall determine:
(1) liability for compensatory and exemplary damages; and
(2) the amount of compensatory damages.
(d) If liability for exemplary damages is established during the first phase of a bifurcated trial, the trier of fact shall, in the second phase of the trial, determine the amount of exemplary damages to be awarded, if any.
Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.010. CONSIDERATIONS IN MAKING AWARD. (a) Before making an award of exemplary damages, the trier of fact shall consider the definition and purposes of exemplary damages as provided by Section 41.001.
(b) Subject to Section 41.008, the determination of whether to award exemplary damages and the amount of exemplary damages to be awarded is within the discretion of the trier of fact.
Added by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 204, Sec. 13.07, eff. Sept. 1, 2003.
Sec. 41.0105. EVIDENCE RELATING TO AMOUNT OF ECONOMIC DAMAGES. In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 13.08, eff. Sept. 1, 2003.
Sec. 41.011. EVIDENCE RELATING TO AMOUNT OF EXEMPLARY DAMAGES. (a) In determining the amount of exemplary damages, the trier of fact shall consider evidence, if any, relating to:
(1) the nature of the wrong;
(2) the character of the conduct involved;
(3) the degree of culpability of the wrongdoer;
(4) the situation and sensibilities of the parties concerned;
(5) the extent to which such conduct offends a public sense of justice and propriety; and
(6) the net worth of the defendant.
(b) Evidence that is relevant only to the amount of exemplary damages that may be awarded is not admissible during the first phase of a bifurcated trial.
Added by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.012. JURY INSTRUCTIONS. In a trial to a jury, the court shall instruct the jury with regard to Sections 41.001, 41.003, 41.010, and 41.011.
Added by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.013. JUDICIAL REVIEW OF AWARD. (a) Except as provided for in Subsection (b), an appellate court that reviews the evidence with respect to a finding by a trier of fact concerning liability for exemplary damages or with respect to the amount of exemplary damages awarded shall state, in a written opinion, the court’s reasons for upholding or disturbing the finding or award. The written opinion shall address the evidence or lack of evidence with specificity, as it relates to the liability for or amount of exemplary damages, in light of the requirements of this chapter.
(b) This section does not apply to the supreme court with respect to its consideration of an application for writ of error.
Added by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
Sec. 41.014. INTEREST ON DAMAGES SUBJECT TO MEDICARE SUBROGATION. (a) Subject to this section, postjudgment interest does not accrue on the unpaid balance of an award of damages to a plaintiff attributable to any portion of the award to which the United States has a subrogation right under 42 U.S.C. Section 1395y(b)(2)(B) before the defendant receives a recovery demand letter issued by the Centers for Medicare and Medicaid Services or a designated contractor under 42 C.F.R. Section 411.22.
(b) Postjudgment interest under this section does not accrue if the defendant pays the unpaid balance before the 31st day after the date the defendant receives the recovery demand letter.
(c) If the defendant appeals the award of damages, this section does not apply.
(d) This section does not prevent the accrual of postjudgment interest on any portion of an award to which the United States does not have a subrogation right under 42 U.S.C. Section 1395y(b)(2)(B).
Added by Acts 2013, 83rd Leg., R.S., Ch. 870 (H.B. 658), Sec. 1, eff. September 1, 2013.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
As a general rule, parties form a binding contract when the following elements are
present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the
minds, (4) each party’s consent to the terms, and (5) execution and delivery of the contract with the intent
that it be mutual and binding. Id. at 555-56.
The material terms of a contract must be agreed upon before a court can enforce a contract. See Williams v.
Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 235 (Tex. App.-Houston [1st. Dist] 2008, no
pet.); see also T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The interest rate
is a material term. See Williams, 264 S.W.3d at 235; T.O. Stanley Boot Co., 847 S.W.2d at 221.
“Meeting of the minds” describes the mutual understanding and assent to the agreement regarding the
subject matter and the essential terms of the contract. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.
App.- Dallas 1999, pet. denied). Mutual assent, concerning material, essential terms, is a prerequisite to
formation of a binding, enforceable contract. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221
(Tex. 1992). In determining the existence of an oral contract, the court looks to the communications between
the parties and to the acts and circumstances surrounding these communications. Palestine Water Well
Servs., Inc. v. Vance Sand & Rock, Inc., 188 S.W.3d 321, 325 (Tex. App.- Tyler 2006, no pet.).
The elements required for establishing the existence of written and oral contracts are usually the same.
See Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.- Houston [14th Dist.] 2002, no pet.).
SOME TEXAS APPELLATE CASE LAW
08-0586 PATRICK REINHARDT v. JOE WALKER; from Brazoria County; 14th district (14‑07‑00304‑CV, ___ SW3d
___, 06‑12‑08)(Proof of Agreement, limitations, damages, reasonable cost of repairs.)
08-0609 BRENDA MITCHELL v. BETTY DOMINGO; from Lubbock County; 7th district (07‑07‑00038‑CV, 257 SW3d
34, 05‑21‑08, pet denied Dec 2008)(contract formation)(we conclude she presented more than a scintilla of
evidence to raise a genuine issue of material fact on whether the parties entered into a valid oral contract
and whether Mitchell breached the contract, thereby defeating Mitchell’s no-evidence summary judgment.
Simultaneously, accepting as true the evidence favorable to Domingo and indulging every reasonable
inference in her favor, we conclude the summary judgment evidence raised a genuine issue of material fact
defeating Mitchell’s entitlement to summary judgment as a matter of law. We hold that the summary judgment
in favor of Mitchell based on Domingo’s breach of contract claim was improvidently granted. Resultantly, we
sustain issues one and two.
Accordingly, the trial court’s judgment is reversed and the cause is remanded to the trial court for further
proceedings.
OPINION
Presenting two issues, Appellant, Betty Domingo, challenges the trial court’s order granting summary
judgment in favor of Appellee, Brenda Mitchell. Specifically, by her first issue, she maintains the trial court
erred in granting Mitchell’s no-evidence summary judgment because she presented more than a scintilla of
competent evidence in support of every element of her breach of contract claim. By issue two, she contends
the trial court erred in granting Mitchell’s traditional motion for summary judgment because genuine issues of
material fact exist. We reverse and remand.
Background Facts
According to the summary judgment evidence, beginning in 2004, Domingo and Mitchell, who were co-
workers and friends, played the Texas Lottery on numerous occasions. Their arrangement included an
agreement to pool their money to purchase tickets and split all winnings equally. At times, Mitchell would
purchase the tickets without requiring advance payment from Domingo and Domingo would promptly
reimburse Mitchell, win or lose.
On March 9, 2006, Cindy Skidmore sent an e-mail to Mitchell asking if she was interested in joining a lottery
group. After enlisting a select group of friends and co-workers, including Mitchell, Skidmore formed LGroup,
a Texas Limited Partnership, for the purpose of pooling money to play the lottery. On March 23rd, she sent a
follow-up e-mail to members of the group notifying them of a meeting on March 30th at a local restaurant to
pay and select numbers for the April 2006 drawings. The e-mail also provided, “[i]f there is someone else you
want to invite (& you feel pretty sure they won’t drop out) let me know.” Mitchell did not ask Skidmore if
Domingo could participate in the April 2006 drawings.
Domingo alleges that sometime after the March 23rd e-mail, Mitchell invited her and Cindy Ruff, another co-
worker, to participate in the lottery group for April 2006, specifically, Lotto Texas and Mega Millions. Ruff
declined the offer due to insufficient funds. When Domingo inquired about how much her contribution would
be, Mitchell offered to cover for her and be reimbursed at a later time.
On March 30th, Mitchell and other members of the group met at a restaurant to pay their share for the April
2006 tickets and contribute their numbers. Domingo was not present at this meeting. It was determined that
each member of the group owed $17. Mitchell paid her contribution, but did not contribute for Domingo’s
share. According to Mitchell’s deposition testimony, she did not have enough money with her to pay for her
share and also advance $17 for Domingo to participate. Footnote
On April 29, 2006, one of the tickets purchased by the group won. After choosing the cash value option, the
winnings totaled $20,925,315.23. Domingo’s exclusion from a share of the winnings eventually prompted her
to consult an attorney because Mitchell had told her she would cover her share of the tickets. She filed suit
against Mitchell and the LGroup for breach of contract and also alleged violations of the Texas Revised
Partnership Act. Footnote Mitchell filed a combination no-evidence and traditional motion for summary
judgment and without specifying a ground, the trial court granted summary judgment in favor of Mitchell.
By her no-evidence motion, Mitchell alleged there was no evidence of a valid contract because:
(1) she never made a valid offer to Domingo;
(2) Domingo never tendered a valid acceptance;
(3) she and Domingo never reached a “meeting of the minds” regarding the essential terms of the contract;
and
(4) Domingo never tendered sufficient consideration.
Domingo responded to the no-evidence motion by asserting there was sufficient evidence of an offer,
acceptance, meeting of the minds, and consideration to defeat the motion.
By her traditional motion, Mitchell alleged she was entitled to summary judgment as a matter of law on the
breach of contract claim because Domingo did not present evidence of a valid, enforceable contract.
Specifically, she contended the summary judgment evidence disproved:
(1) she made a valid offer to Domingo;
(2) Domingo tendered a valid acceptance; and
(3) they reached a “meeting of the minds.”
Mitchell also alleged that any oral agreement violated the Statue of Frauds because Domingo was seeking to
enforce a promise to answer for the debt of another. Domingo responded that Mitchell did not conclusively
establish the absence of a genuine issue of material fact regarding the elements of a contract. She also
asserted that the agreement was not a promise to answer for the debt of another and thus, did not violate
the Statute of Frauds.
By two issues, Domingo challenges the no-evidence and traditional summary judgment motions that resulted
in summary judgment being rendered against her. In reviewing the issues, we apply the following standards
of review.
No-Evidence Motion for Summary Judgment
In a no-evidence summary judgment motion, the movant contends that there is no evidence of one or more
essential elements of the claims for which the non-movant would bear the burden of proof at trial. Tex. R. Civ.
P. 166a(i). The trial court must grant the motion unless the non-movant produces competent summary
judgment evidence raising a genuine issue of material fact on the challenged elements. Id. See Hamilton v.
Wilson, __ S.W.3d __, No. 07-0164, 2008 WL 820717, at *1 (Tex. March 28, 2008); Morgan v. Anthony, 27 S.
W.3d 928, 929 (Tex. 2000). The non-moving party is “not required to marshal its proof; its response need
only point out evidence that raises a fact issue on the challenged elements.” Tex. R. Civ. P. 166a(i), Notes
and Comments (1997). We review the summary judgment evidence in the light most favorable to the party
against whom summary judgment was rendered, crediting evidence favorable to that party if reasonable
jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Mack Trucks, Inc.
v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). See
also Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
Traditional Motion for Summary Judgment
In reviewing a traditional motion for summary judgment, this Court applies these well established rules:
1. The movant for summary judgment has the burden of showing that there is no genuine issue of material
fact and that it is entitled to judgment as a matter of law.
2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence
favorable to the non-movant will be taken as true.
3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its
favor.
See American Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997), citing Nixon v. Mr. Property
Management, 690 S.W.2d 546, 548-49 (Tex. 1985).
For a party to prevail on a traditional motion for summary judgment, he must conclusively establish the
absence of any genuine question of material fact and that he is entitled to judgment as a matter of law. Tex.
R. Civ. P. 166a(c). Summary judgment is proper if the movant disproves at least one element of each of the
non-movant’s claims or establishes every element of an affirmative defense to each claim. American
Tobacco, 951 S.W.2d at 425; Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).
Once the movant has established a right to summary judgment, the non-movant has the burden to respond
to the motion for summary judgment and present to the trial court any issues that would preclude summary
judgment. Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989); City of Houston v. Clear Creek Basin Authority,
589 S.W.2d 671, 678 (Tex. 1979); Barbouti v. Hearst Corp., 927 S.W.2d 37, 64 (Tex.App.–Houston [1st
Dist.] 1996, writ denied). Issues that the non-movant contends preclude the granting of a summary judgment
must be expressly presented to the trial court by written answer or other written response to the motion and
not by mere reference to summary judgment evidence. McConnell v. Southside School Dist., 858 S.W.2d
337, 341 (Tex. 1993)
Where, as here, a party files a combination traditional and no-evidence motion for summary judgment, we
first review the trial court’s judgment under the more stringent “no-evidence” standard of Rule 166a(i). See
Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); East Hill Marine, Inc. v. Rinker Boat Co., Inc.,
229 S.W.3d 813, 816 (Tex.App.–Fort Worth 2007, pet. denied). If the non-movant fails to produce more than
a scintilla of evidence under that burden, then we need not analyze whether the non-movant’s proof satisfied
the burden under a traditional summary judgment review pursuant to Rule 166a(c). Ridgway, 135 S.W.3d at
600.
I. Analysis of Elements of a Contract
Domingo sued Mitchell for breach of contract. The basis for Mitchell’s no-evidence motion was that there
was no evidence of the elements of a valid contract between herself and Domingo. The burden then shifted
to Domingo to present more than a scintilla of evidence to raise a fact issue on whether the parties formed a
contract. The grounds for Mitchell’s traditional motion was that there was no disputed material fact issue
regarding the elements of offer, acceptance, and meeting of the minds, and there was no writing to indicate
the existence of an agreement, in violation of the Statute of Frauds.
A. Contract
The threshold question is whether Mitchell and Domingo entered into a contract. For a contract to exist,
there must be an offer, acceptance, and consideration. See Harco Energy, Inc. v. Re-Entry People, Inc., 23 S.
W.3d 389, 392 (Tex.App.–Amarillo 2000, no pet.). The existence of an oral contract may be proved by
circumstantial evidence as well as direct evidence. Harris v. Balderas, 27 S.W.3d 71, 77 (Tex.App.–San
Antonio 2000, pet. denied). In determining the existence of an oral contract, courts look at the
communications between the parties and the acts and circumstances surrounding those communications.
Palestine Water Well Services, Inc. v. Vance Sand and Rock, Inc., 188 S.W.3d 321, 325 (Tex.App.–Tyler
2006, no pet.). To determine whether there was an offer and acceptance, and therefore a “meeting of the
minds,” courts use an objective standard, considering what the parties did and said, not their subjective
states of mind. See Komet v. Graves, 40 S.W.3d 596, 601 (Tex.App.–San Antonio 2001, no pet.).
B. Breach of Contract
The elements of a breach of contract claim are (1) the existence of a valid contract; (2) performance or
tendered performance by the plaintiff; (3) breach by the defendant; and (4) damages sustained by the
plaintiff as a result of that breach. Southwell v. University of Incarnate Word, 974 S.W.351, 354-55 (Tex.App.–
San Antonio 1998, pet. denied).
C. Offer
To prove that an offer was made, a party must show (1) the offeror intended to make an offer, (2) the terms
of the offer were clear and definite, and (3) the offeror communicated the essential terms of the offer to the
offeree. KW Const. v. Stephens & Sons Concrete Contractors, Inc., 165 S.W.3d 874, 883 (Tex.App.–
Texarkana 2005, pet. denied).
D. Acceptance
An acceptance must be identical to the offer; otherwise, there is no binding contract. Long Trusts v. Griffin,
144 S.W.3d 99, 111-12 (Tex.App.–Texarkana 2004, pet. denied).
E. Meeting of the Minds
A “meeting of the minds” is not an independent element of a valid contract. It is merely a mutuality subpart of
the offer and acceptance elements. A “meeting of the minds” is a mutual understanding and assent to the
expression of the parties’ agreement. See Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.App.–Dallas
1999, pet. denied). If evidence of the parties’ mutual agreement consists of their conduct and course of
dealing with one another, their mutual agreement may be inferred from the circumstances, in which case the
contract is “implied” as opposed to “express.” Double Diamond, Inc. v. Hilco Elec. Co-op., Inc., 127 S.W.3d
260, 267 (Tex.App.–Waco 2003, no pet.). An implied contract involves an inference from circumstantial
evidence and is a question of fact. Id.
F. Consideration
A contract must be based on valid consideration. See Texas Gas Utilities Co. v. Barrett, 460 S.W.2d 409,
412 (Tex. 1970). Consideration is a bargained for exchange of promises that consists of benefits and
detriments to the contracting parties. Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991). “It
is quite elementary that the promise of one party is a valid consideration for the promise of the other party.”
See Texas Farm Bureau Cotton Ass’n v. Stovall, 113 Tex. 273, 253 S.W. 1101, 1105 (1923). A contract that
lacks consideration lacks mutuality of obligation and is unenforceable. Fed. Sign v. Tex. So. Univ., 951 S.W.
2d 401, 409 (Tex. 1997); Belew v. Rector, 202 S.W.3d 849, 854 n.4 (Tex.App.–Eastland 2006, no pet.).
Mutual promissory obligations by the parties to the agreement furnishes sufficient consideration to constitute
a binding contract. Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex.App.–Houston [1st Dist.] 2000, no pet.).
II. Analysis of Elements of the Contract as Between Mitchell and Domingo
Mitchell alleges she did not make an offer to Domingo, but if she did, some of the material terms of the offer
were lacking, making the contract invalid. She argues that price had not been agreed to and that Domingo
failed to submit numbers for the drawings, which was an essential element of the agreement. In response,
Domingo asserts that a reasonable price can be implied. She also asserts that submitting numbers was not
an essential term of the agreement. We agree with Domingo.
When all other elements of a contract have been met, a court may imply a reasonable price. See Buxani v.
Nussbaum, 940 S.W.2d 350, 353 (Tex.App.–San Antonio 1997, no writ), citing Bendalin v. Delgado, 406 S.W.
2d 897, 900 (Tex. 1966). According to Domingo’s affidavit, she was an experienced lottery player and
estimated that playing Lotto Texas and Mega Millions for the month of April 2006 would have cost
approximately $20 to $25. According to the evidence, Mega Millions was played every Tuesday and Friday
and Lotto Texas was played every Wednesday and Saturday. Looking at a calendar for April 2006 at $1 per
ticket, there were eight drawings for Mega Millions and nine drawings for Lotto Texas, for a total cost of $17
per participant. Thus, a reasonable price could have been implied.
Whether a term forms an essential element of a contract depends primarily upon the intent of the parties.
Potcinske v. McDonald Property Investments, Ltd., 245 S.W.3d 526, 531 (Tex.App.–Houston [1st Dist.] 2007,
no pet.), citing Neeley v. Bankers Trust Co. of Texas, 757 F.2d 621, 628 (5th Cir. 1985). The question is
whether the parties regarded the term as a vitally important ingredient of their bargain. Id.
Mitchell contends that submitting numbers was an essential term of the agreement and that without Domingo
complying, there was no valid contract. However, the evidence suggests that submitting numbers for the April
drawings was not an essential element of the contract. Copies of e-mails established that different numbers
were selected on the day after the LGroup met for dinner to decide on a price and submit numbers. Members
of the LGroup were also notified by e-mail and given a deadline of noon on April 1st in which to pick different
numbers. Thus, any numbers submitted at the meeting on March 30th were an uncertainty as they were
subject to being changed and thus, could not have been regarded by the parties as an essential element of
the contract.
According to Domingo, she and Mitchell frequently participated in lottery pools with co-workers. They
occasionally covered for each other and when Mitchell would advance Domingo’s share, Domingo would
promptly reimburse her. Shondra Stewart and Ellen Clemons, co-workers of Domingo and Mitchell, both gave
deposition testimony that Cindy Ruff, another co-worker, claimed she was present when Mitchell agreed to
cover for Domingo’s share of the April 2006 lottery tickets.
Mitchell testified that while she and Ruff were involved in a conversation about the lottery pool on the day
after the LGroup met to discuss the April drawings, Domingo entered and asked Mitchell “why didn’t you pay
my – did you pay my money?” Mitchell responded, “no, I didn’t have enough money last night.” Although she
did not tell Domingo she was excluded because she had not been invited to play with the LGroup, she did
testify that she did not cover for Domingo because she had not been invited to play for the April drawings.
Ruff testified that she recalled Domingo asking Mitchell why she did not cover her for the April drawings.
Domingo testified that she asked Mitchell “when do we need to pay our money for the April drawing?”
Mitchell then informed her that she did not put in for her because she did not have enough money to pay for
both of them. Mitchell added that the group was already set for April and instead invited Domingo to play for
the May 2006 drawings.
This summary judgment evidence, coupled with Mitchell and Domingo’s conduct and course of prior dealings
with one another, is sufficient to raise a genuine issue of material fact concerning the offer and acceptance
elements of the alleged contract between Mitchell and Domingo.
Regarding the element of consideration, the evidence shows that Mitchell agreed to advance Domingo’s
share of the lottery tickets and Domingo agreed to reimburse Mitchell. This exchange of promises is sufficient
consideration to create a binding contract. See Iacono, 16 S.W.3d at 94.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
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