On Friday, May 16, 2014, the Supreme Court of Texas issued four opinions. The Court also granted one petition for review. Access the full order list here.

The Court issued the following opinions:

  • No. 12-0983McAllen Hospitals, LP v. State Farm County Mutual Insurance Company of Texas - The Court addressed some of the mechanics of Hospital Lien Statute (Texas Civil Practice and Remedies Code chapter 55). State Farm had notice of the hospital's lien, made the settlement check jointly payable to the claimants and the hospital, and then sent the checks to the claimants without notifying the hospital. The claimants deposited the checks without the hospital's endorsement and the checks were negotiated. The issue was whether State Farm's actions constituted payment of the hospital's lien. The Supreme Court (in a unanimous opinion by Justice Lehrmann) held that it did not. To determine whether the checks constituted payment, the Court looked to the UCC sections regarding negotiable instruments. The Court held that delivery of a check to one nonalternative copayee constitutes constructive delivery to all copayees. But when one of those copayees is paid on the check without the endorsement of the other copayee, it is not payment to a "holder" of the check, and therefore does not discharge the drawer (here, State Farm) of its liability on the instrument or the underlying obligation. Therefore, the Court held that the hospital had not been "paid" and its lien had not been satisfied. Because the parties did not address the proper remedy in either the trial court or the court of appeals, the Supreme Court remanded the case to the trial court for further proceedings. Access the full opinion here.
  • No. 13-0321Kennedy Hodges, LLP v. Gobellan - In a per curiam opinion, the Court considered whether a law firm waived its right to arbitrate disputes with a former client. An associate of the firm left the firm and took several clients with him. The firm sued the former associate over contingency fees, but could not seek to compel arbitration because it did not have an arbitration agreement with the former associate. The firm also sued the clients who left with the former associate (again to recover the contingency fees associated with the clients' cases) and moved to compel arbitration under a provision of the fee agreement. The trial court and the court of appeals held that the firm waived its right to arbitration by litigating with the former associate. The Supreme Court held that litigating in a different suit against a different defendant with whom the firm did not have an arbitration agreement did not waive its right to compel arbitration with the former clients. The opinion is here.
  • No. 13-0638Sims v. Carrington Mortgage Services, LLC - In a unanimous opinion by Justice Hecht, the Court answered a series of certified questions from the United States Court of Appeals for the Fifth Circuit about whether mortgage restructuring loans that make use of the borrower's equity are home-equity loans subject to the requirements of Article XVI, Section 50 of the Texas Constitution. The Court held that "as long as the original note is not satisfied and replaced, and there is no additional extension of credit, as we define it, the restructuring is valid and need not meet the constitutional requirements for a new loan." Read the whole opinion here
  • No. 13-0749In re A.B. and H.B. - This is a parental-termination case argued less than a month ago. The speed with which this opinion was issued is a good indication of the Court's commitment to moving these kinds of cases along as quickly as possible because of the impact on the children involved. The issue is the required scope of an appellate court's opinion when the court affirms a judgment terminating parental rights. The Court has previously held that when an appellate court reviews an order terminating parental rights, it must review the entire record to determine whether the evidence is factually sufficient. The Court has also previously held that when the appellate court reverses the factfinder's decision, it must detail the relevant evidence and explain why the evidence is insufficient. Here, the Court declined to extend that rule to situations where the appellate court affirms the factfinder's decision. The Court determined that the fundamental issues at stake are protected by the requirement that the court review the entire record and held that any requirement to detail the evidence that supports the factfinder's decision would be unnecessary. See the entire opinion here.

The Court also granted the petition for review in No. 13-0053State v. Clear Channel Outdoor, Inc. The case arises from the expansion of the Katy Freeway near downtown Houston and involves the compensation owed to the owner of two billboards. The issues are: (1) whether the billboards are personal property or part of the realty; and (2) whether the trial court erred in determining the compensation owed to the billboards' owners. This case has drawn some interest from amici on both sides. The date for oral argument has not yet been set.

[Apologies for the delayed post. I was out of town on Friday, and Typepad was hit by another DDOS attack yesterday, which prevented access to the blog.]

 

 

On Friday, May 16, 2014, the Supreme Court of Texas issued four opinions. The Court also granted one petition for review. Access the full order list here.

The Court issued the following opinions:

  • No. 12-0983McAllen Hospitals, LP v. State Farm County Mutual Insurance Company of Texas - The Court addressed some of the mechanics of Hospital Lien Statute (Texas Civil Practice and Remedies Code chapter 55). State Farm had notice of the hospital's lien, made the settlement check jointly payable to the claimants and the hospital, and then sent the checks to the claimants without notifying the hospital. The claimants deposited the checks without the hospital's endorsement and the checks were negotiated. The issue was whether State Farm's actions constituted payment of the hospital's lien. The Supreme Court (in a unanimous opinion by Justice Lehrmann) held that it did not. To determine whether the checks constituted payment, the Court looked to the UCC sections regarding negotiable instruments. The Court held that delivery of a check to one nonalternative copayee constitutes constructive delivery to all copayees. But when one of those copayees is paid on the check without the endorsement of the other copayee, it is not payment to a "holder" of the check, and therefore does not discharge the drawer (here, State Farm) of its liability on the instrument or the underlying obligation. Therefore, the Court held that the hospital had not been "paid" and its lien had not been satisfied. Because the parties did not address the proper remedy in either the trial court or the court of appeals, the Supreme Court remanded the case to the trial court for further proceedings. Access the full opinion here.
  • No. 13-0321Kennedy Hodges, LLP v. Gobellan - In a per curiam opinion, the Court considered whether a law firm waived its right to arbitrate disputes with a former client. An associate of the firm left the firm and took several clients with him. The firm sued the former associate over contingency fees, but could not seek to compel arbitration because it did not have an arbitration agreement with the former associate. The firm also sued the clients who left with the former associate (again to recover the contingency fees associated with the clients' cases) and moved to compel arbitration under a provision of the fee agreement. The trial court and the court of appeals held that the firm waived its right to arbitration by litigating with the former associate. The Supreme Court held that litigating in a different suit against a different defendant with whom the firm did not have an arbitration agreement did not waive its right to compel arbitration with the former clients. The opinion is here.
  • No. 13-0638Sims v. Carrington Mortgage Services, LLC - In a unanimous opinion by Justice Hecht, the Court answered a series of certified questions from the United States Court of Appeals for the Fifth Circuit about whether mortgage restructuring loans that make use of the borrower's equity are home-equity loans subject to the requirements of Article XVI, Section 50 of the Texas Constitution. The Court held that "as long as the original note is not satisfied and replaced, and there is no additional extension of credit, as we define it, the restructuring is valid and need not meet the constitutional requirements for a new loan." Read the whole opinion here
  • No. 13-0749In re A.B. and H.B. - This is a parental-termination case argued less than a month ago. The speed with which this opinion was issued is a good indication of the Court's commitment to moving these kinds of cases along as quickly as possible because of the impact on the children involved. The issue is the required scope of an appellate court's opinion when the court affirms a judgment terminating parental rights. The Court has previously held that when an appellate court reviews an order terminating parental rights, it must review the entire record to determine whether the evidence is factually sufficient. The Court has also previously held that when the appellate court reverses the factfinder's decision, it must detail the relevant evidence and explain why the evidence is insufficient. Here, the Court declined to extend that rule to situations where the appellate court affirms the factfinder's decision. The Court determined that the fundamental issues at stake are protected by the requirement that the court review the entire record and held that any requirement to detail the evidence that supports the factfinder's decision would be unnecessary. See the entire opinion here.

The Court also granted the petition for review in No. 13-0053State v. Clear Channel Outdoor, Inc. The case arises from the expansion of the Katy Freeway near downtown Houston and involves the compensation owed to the owner of two billboards. The issues are: (1) whether the billboards are personal property or part of the realty; and (2) whether the trial court erred in determining the compensation owed to the billboards' owners. This case has drawn some interest from amici on both sides. The date for oral argument has not yet been set.

[Apologies for the delayed post. I was out of town on Friday, and Typepad was hit by another DDOS attack yesterday, which prevented access to the blog.]

- Rich Phillips, Thompson & Knight

- See more at: http://www.texasappellatewatch.com/2014/05/texas-supreme-court-opinions-and-orders-51614.html#sthash.hTLf3QNJ.dpuf

 

Topics:  Arbitration Agreements, Evidence, Home Equity Line of Credit, Hospital Lien Statutes, Mortgages, Motion to Compel, Parental Rights, Parental Termination, Waivers

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, Family Law Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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