June 26, 2015

The Supreme Court released eight opinions this week, seven of which we review in this week's edition of the Texas Supreme Court Update.

Patel v. Tex. Dept. of Licensing and Regulation, Case 12-0657: http://www.txcourts.gov/media/1008501/120657.pdf

In a declaratory judgment action, the Court held that certain Texas licensing statutes and regulations violated the Texas Constitution's due course of law provision. In particular, the regulations at issue required those who practice a form of eyebrow hair removal called "threading" to take 750 hours of training in order to be licensed. The trial court and court of appeals agreed with the State that the licensing requirements were constitutional, even though 40% of the required hours were unrelated to health and safety. The Supreme Court disagreed. The Court noted that the 750 hours was an oppressive requirement, especially since many of the hours were not arguably related to threading, those hours would have been paid by the Petitioners out-of-pocket, and the Petitioners would have to delay their employment during the entire training process.

Greater Houston P'ship v. Paxton, Case 13-0745: http://www.txcourts.gov/media/1008506/130745.pdf

In this case, the Court considered whether Greater Houston Partnership constituted a "governmental body" for the purposes of the Texas Public Information Act. Greater Houston Partnership is a nonprofit corporation that provides services to the City and other clients via quid pro quo contracts. While the Attorney General and lower courts held that the corporation was a "governmental body," the Court reversed and remanded, stressing that the corporation was not wholly or partially sustained by public funds.

Hanger v. Byrd, Case 13-0861: http://www.txcourts.gov/media/1008508/130861.pdf

Philip Byrd along with several others sued Cantey Hanger, LLP when Hanger allegedly conspired with his client Nancy Simenstad whom he represented in divorce proceedings. Byrd alleged that-after he and Simenstad divorced-Hanger and Simenstad falsified a bill of sale transferring an airplane to a third party in a manner that shifted tax liabilities back to Byrd. Hanger's law firm moved for summary judgment, contending that it was immune from liability to a non-client while in the scope of its representation to Simenstad. While the court of appeals held against Hanger, the Supreme Court reversed, granting the affirmative defense of attorney immunity as a matter of law. The Court pointed out that Byrd's remedy was against his former wife, not against her attorney.

Beeman v. Livingston, Case 13-0867: http://www.txcourts.gov/media/1008510/130867.pdf

Deaf inmates who were housed in a unit of the Texas Department of Criminal Justice sued the TDCJ's Executive Director. The inmates claimed that the Director Executor did not reasonably accommodate their impairment. However, the Court affirmed the court of appeals' decision, holding that the Petitioners failed to show that the Director acted ultra vires and that they did not plead that his sovereign immunity had been waived.

Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, Cases 13-1026 and 14-0109:

http://www.txcourts.gov/media/1008511/131026.pdf

In these consolidated cases, the Court considered whether an arbitration provision in an attorney-client retainer agreement was enforceable. The Petitioners represented Lopez in a lawsuit arising from the divorce of his alleged common-law wife who won $ 11 million in the lottery. The provision at issue stated that the client and firm would arbitrate all disputes between them, except claims by the firm for recovering fees. The Court reversed the court of appeals' decision, holding that the arbitration provision was enforceable because both the law firm and its client could not seek litigation as a form of dispute resolution. Thus, the provision was not unconscionable.

Cosgrove v. Cade, Case 14-0346: http://www.txcourts.gov/media/1008513/140346.pdf

This case addressed whether an accidental omission in a warranty deed constitutes an injury that might trigger the "discovery rule," a widely known exception to the statute of limitations. The Court held that such an omission does not. Instead, the Court ruled that a grantor who signs an unambiguous deed is presumed to have knowledge of what that deed contains, including that of material omissions.

McGinnes Indus. Maint. Corp. v. The Phoenix Ins. Co., Case 14-0465: http://www.txcourts.gov/media/1008515/140465.pdf

This case involved certain standard-form commercial general liability ("CGL") insurance policies that gave the insurer "the right and duty to defend any suit against the insured seeking damages." The Court considered whether "suit" included lawsuits initiated by the Environmental Protection Agency pursuant to CERCLA. The Court held that those lawsuits are covered under the CGL policy. The Court stressed most state high courts (thirteen out of sixteen) have decided that insureds should have coverage.

Conclusion:

Make sure to check back with The Bassett Firm's weekly Texas Supreme Court Update to see if the Court releases any opinions next Friday. In the meantime, we hope this analysis of the Court's opinions and orders was useful to your practice.

Best Regards,

The Bassett Firm