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Texas Supreme Court Weekly Update June 25, 2018

On Behalf of | Jun 25, 2018 | Texas Supreme Court Weekly Update

On June 22, 2018, The Supreme Court of Texas released various opinions. Three opinions are of particular interest.

First, In Re Melissa Dawson deals an appellant seeking a writ of mandamus following a dispute in the designation of a third party. Melissa Dawson was injured at a bar and restaurant, and subsequently filed a lawsuit against the establishment and the operator, Two for Freedom, LLC. Dawson served her original petition with discovery directed at Two for Freedom.

In Two for Freedom’s initial Responses to Requests for Disclosure, it did not identify any other potential parties to the lawsuit, but it did state that it will supplement any third party responsible. In the same initial discovery requests, Dawson propounded an interrogatory seeking the name of the person who had installed the faulty television that had caused her injury. Two for Freedom identified an individual named Michael Graciano in response. Two for Freedom later amended its disclosures and sought to designate Graciano as a responsible third party; however, it did so two weeks after the statute of limitations expired. The trial court granted leave to Two for Freedom to designate Graciano as a Responsible Third Party.

The Supreme Court held that Two for Freedom’s initial responses did not satisfy the obligation to give Dawson notice of whom it intended to designate as a responsible third party. The Court held that the statute requires that Two for Freedom disclose who the designated responsible third party is upon request. Here, Two for Freedom did not accomplish that disclosure by mentioning Graciano’s name in an interrogatory while failing to list him as an individual who may be designated as a Responsible Third Party. The Supreme Court held that the trial court erroneously granted Two for Freedom leave to designate, and therefore Dawson’s writ of mandamus is granted.

In Stephen Morale d/b/a Action Collision Repair and Kimberly Morale v. The State of Texas, the Supreme Court deals with the admission and exclusion of evidence at a trial. In this case, The State of Texas was improving a road and planned to condemn a portion of a property containing the Morales’ vehicle repair business. The State’s appraiser classified the Morales’ property as displaced. The State’s land planner came up with another plan to reconfigure the plans so that the Morales could continue residing on the property. The special commissioner awarded the Morales $49,000 in damages for the takings, and the Morales objected and demanded a jury trial. Subsequently, the Morales’ displaced status was revoked.

The Morales hired their own appraisal and land planner to come up with multiple cure plans. At trial the State moved to excluded evidence related to the Morales’ displaced status, which the trial court denied. Additionally, the trial court excluded testimony of two experts regarding city’s zoning regulation and the effect it would have on the property’s condemnation. The jury awarded the Morales’ over one million dollars based on the cure plan of their experts.

The appeals court held that the admittance of evidence of displacement and that the exclusion of the two zoning experts’ testimony was erroneous, and that the Morales expert’s testimony was irrelevant and inadmissible because it relied on various assumptions.

First, the Court held displaced classification was relevant to the property’s highest and best use and its corresponding market value after the property’s taking. Further, the court held that while Morales’ expert testimony assumed various facts relating to the relocation of the Morales’ business, an expert may assume a fact if that fact is established by legally sufficient evidence. Finally, the Supreme Court holds that the exclusion of the testimony of the zoning experts was not erroneous because the testimony did not address the Morales’ specific property. The Supreme Court therefore reversed the appellate court and held that the trial court’s rulings did not constitute an abuse of discretion.

Finally, In Andrew Anderson v. Jerry V. Durant, et al., the Texas Supreme Court ruled on a case involving fraud and defamation claims by a former employee against his employer at a car dealership. Andrew Anderson was offered an opportunity to “buy in” to Jerry Durant Auto Group by the owner Jerry Durant. Anderson accepted this oral offer but the offer was never put into writing. Shortly after accepting this deal, Anderson was accused of accepting illegal kickbacks on car acquisitions and was fired. Anderson was unable to find another job in the car sales market after the rumors of his illegal activities spread.

In the jury trial, Anderson was awarded $2.2 million in defamation damages and $383,150 in fraud damages based on a ten percent ownership interest that was a part of the oral contract. However, the court of appeals denied the benefit of the bargain damages because Anderson did not receive a jury finding of an enforceable agreement.

The issues the Supreme Court heard are (1) whether the jury’s failure to find that the parties agreed to the specific contract terms submitted in the contract question precludes Anderson from recovering the value of the disputed dealership interests as benefit-of-the bargain damages under a fraud theory that requires proof of an enforceable contract and (2) whether the evidence is legally sufficient to support the defamation damages the jury awarded. The Supreme Court held that the jury findings are sufficient to support the award of fraud damages because the jury’s submission encompassed the required elements of a contract, sufficient evidence supports the jury’s findings, and no jury findings render the promise unenforceable. This holding was based on the Zorrilla case that the court has previously ruled on.

The court upheld the appellate court’s ruling reversing the award of future mental-anguish damages because the record did not include evidence that Anderson will continue to suffer in the future from these events. The Supreme Court upheld the trial courts damages for past loss of reputation but upheld the appellate courts reversal of any award for future loss of reputation. The Court noted that the evidence clearly showed that Anderson did not receive past jobs because of the harm to his reputation but nothing shows that Anderson’s reputation will remain tarnished and result in the need for future damages. Further, the Court held that Anderson will not receive damages for future lost income because he there was no legally sufficient evidence of proximate causation relative to the defamation. As an at-will employee, Anderson could be terminated at any time for any reason. The Court held that Anderson would need to have proven that the defamation, not his termination, was the proximate cause of his lost future income.


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