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Texas Supreme Court Weekly Update March 15, 2019

On Behalf of | Mar 15, 2019 | Texas Supreme Court Weekly Update

Over the past couple of weeks, the Texas Supreme Court issued several important civil litigation opinions including (1) Jose Reyes v. D Magazine Partners L.P. (“magazine”) and Dallas Symphony Association Inc., in which the Court weighed in on whether an interlocutory appeal from a summary-judgment denial allows review of the entire summary-judgment order and not just that arising from First Amendment issues and (2) International Business Machines Corp. v. Lufkin Industries LLC, Lufkin Industries (“Lufkin”), in which the Court considered whether contractual disclaimers bar a buyer from recovering in tort for misrepresentations the seller made both to induce the buyer to enter into the contract and to induce the buyer to later agree to amend the contract.

In Jose Reyes v. D Magazine Partners L.P. and Dallas Symphony Association Inc., Reyes, a longtime Dallas Symphony Volunteer, sued D Magazine and the Dallas Symphony Association over an article detailing the symphony’s dismissal of him as a volunteer. The trial court granted summary judgment for D Magazine on Reyes’s defamation-per-se, intentional-emotional-distress and tortious-interference claims. However, the trial court also granted summary judgment in favor of the Dallas Symphony Association on Reyes’s defamation and emotional-distress claims but not for tortious interference or conspiracy to defame. On review, the court of appeals interpreted Section 51.014(a)(6) of the Texas Civil Practice and Remedies Code as permitting immediate appeal of claims or defenses implicating rights of free speech or free press but nothing beyond such constitutional claims or defenses.

On review, the Texas Supreme Court held that “order” as used in Section 51.014(a)(6) was broader than the court of appeals’ interpretation and means ruling on the entire motion, including nonconstitutional grounds. Ultimately, the Court concluded that the Defendants were entitled to summary judgment on all claims against them.

In International Business Machines Corp. v. Lufkin Industries LLC, Lufkin Industries sued International Business Machines Corp for fraud and fraudulent inducement after integrated management software IBM installed repeatedly failed, increasing Lufkin’s costs and causing it publicly to report that its quarterly report would be delayed because of the system’s failures.

On review, the Texas Supreme Court considered three issues: (1) whether reliance was clearly disclaimed; (2) whether fraudulent-inducement damages preclude recovery for fraud; and (3) whether Lufkin suffered damages for contract breach.

First, the Court determined that Lufkin effectively disclaimed any reliance on IBM’s misrepresentations because the parties negotiated at arm’s length, they were both knowledgeable in business matters and represented by counsel, and the two relevant clauses expressly and clearly disclaimed reliance.

Second, the Court determined that Lufkin’s string-along-fraud claim was essentially also a fraudulent inducement claim because the alleged continued misrepresentations induced Lufkin to agree to IBM’s project change requests. Therefore, the Court held that the disclaimers of reliance also barred the string-along-fraud claim.

Third, the Court concluded that Lufkin was entitled to a new trial on its contract claim in light of the Court’s reversal of the fraudulent inducement award.


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