Justia Contracts Opinion Summaries

Two Texas lawyers, Michael A. Pohl and Robert Ammons, represented out-of-state clients in personal injury cases filed outside Texas. The clients, from Louisiana and Arkansas, alleged that they were solicited by individuals on behalf of the lawyers, which led to the signing of legal-services contracts. The clients later sued the lawyers in Texas, seeking to void the contracts under Texas Government Code Section 82.0651(a), which allows clients to void contracts procured through barratry, and to recover fees and penalties.The trial court dismissed all claims, granting summary judgment in favor of the lawyers. The clients appealed, and the Court of Appeals for the First District of Texas reversed the trial court's decision, concluding that Section 82.0651(a) applied because part of the lawyers' conduct occurred in Texas. The court also rejected the lawyers' arguments regarding limitations and res judicata and allowed Reese's intervention in the case.The Supreme Court of Texas reviewed the case and held that Section 82.0651(a) does not extend to the nonresident clients' claims because the core conduct targeted by the statute—solicitation of a legal-services contract through barratry—occurred outside Texas. The court reversed the Court of Appeals' judgment to the extent it allowed the clients to proceed with their claims under Section 82.0651(a) and rendered judgment that they take nothing on those claims. However, the court affirmed the Court of Appeals' judgment regarding the breach of fiduciary duty claims and remanded those claims to the trial court for further proceedings. View "POHL v. CHEATHAM" on Justia Law

Rudolph Rivas, a home builder and real estate developer, engaged the accounting firm Pitts & Pitts, operated by Brandon and Linda Pitts, for various accounting services from 2007 to 2017. The services included preparing quarterly financial statement compilations and tax returns. In 2016, errors were discovered in the financial statements prepared by the Accountants, leading to financial difficulties for Rivas, including overpayment of taxes and loss of credit, which allegedly forced his business into bankruptcy. Rivas sued the Accountants in August 2020, claiming negligence, fraud, breach of fiduciary duty, and breach of contract.The district court granted summary judgment for the Accountants on all claims. The Court of Appeals for the Fifth District of Texas affirmed the summary judgment on the negligence and breach of contract claims but reversed it on the fraud and breach of fiduciary duty claims, holding that these claims were not barred by the anti-fracturing rule and had sufficient evidence to survive summary judgment.The Supreme Court of Texas reviewed the case and held that the anti-fracturing rule barred Rivas's fraud claim because the gravamen of the claim was professional negligence. The Court also held that no fiduciary duty existed as a matter of law under the undisputed facts, thus the breach of fiduciary duty claim failed. Consequently, the Supreme Court of Texas reversed the judgment of the court of appeals and rendered judgment for the defendants on all claims. View "Pitts v. Rivas" on Justia Law

This case involves a dispute over an unrecorded parking agreement related to an office building, hotel, and parking garage in downtown San Antonio. The agreement, executed in 2005, reserved parking spaces in the garage for the office building's occupants and was intended to run with the land. However, it was not recorded in the county's real property records. In 2006, HEI San Antonio Hotel, LP purchased the garage and hotel, financing the purchase through a loan from Merrill Lynch, which was aware of the parking agreement. In 2008, Cypress Real Estate Advisors, through its entity CRVI Crowne Plaza, purchased a note from Merrill Lynch but did not inquire about the parking agreement despite having access to relevant documents.The trial court ruled that the parking agreement was an enforceable easement and rejected the lender's and its affiliate's bona fide purchaser defenses. The Court of Appeals for the Fourth District of Texas agreed that the agreement was an easement but concluded that the lender took the loan without notice of the easement, thus sheltering its affiliate from enforcement.The Supreme Court of Texas reviewed the case and agreed with both lower courts that the parking agreement is an easement. However, it disagreed with the Court of Appeals regarding the notice issue. The Supreme Court concluded that both the lender and its affiliated owner had sufficient notice to remove any bona fide purchaser protection. Therefore, the easement was enforceable against the affiliated owner.The Supreme Court of Texas reversed the judgment of the Court of Appeals and remanded the case to the trial court for further proceedings consistent with its opinion. View "425 SOLEDAD, LTD. v. CRVI RIVERWALK HOSPITALITY, LLC" on Justia Law

In two consolidated property tax disputes, Oncor Electric Delivery Company NTU, LLC sought a multimillion-dollar reduction in the total values of certain electric transmission lines in the 2019 certified appraisal rolls for the Wilbarger County Appraisal District and Mills Central Appraisal District. Oncor’s predecessor had agreed to the lines’ value in each county to settle its protests of the Districts’ initial appraised values, but Oncor now contends that these agreements are void due to mutual mistake.Previously, Oncor filed unsuccessful motions for correction of the appraisal rolls with each County Appraisal Review Board (ARB) and then sued in district court in Wilbarger and Mills Counties. The trial and appellate courts below provided conflicting answers on whether questions regarding the effect of a Section 1.111(e) agreement—such as its validity and scope—are relevant to a trial court’s subject-matter jurisdiction over a suit for judicial review under Section 42.01 of the Tax Code.The Supreme Court of Texas held that the resolution of such questions does not implicate jurisdiction and remanded the cases to the trial courts for further proceedings. The court did not reach the merits of the parties’ disputes about whether Oncor has identified errors eligible for correction under Sections 25.25(c) or (d) of the Tax Code, whether any such errors fall within the scope of the parties’ Section 1.111(e) settlement agreements, and whether the doctrine of mutual mistake is an available defense to such agreements. View "MILLS CENTRAL APPRAISAL DISTRICT v. ONCOR ELECTRIC DELIVERY COMPANY NTU LLC" on Justia Law

The case involves Image API, LLC, a company that provided services to the Texas Health and Human Services Commission (HHSC) from 2009 to 2015. Image's job was to manage a processing center for incoming mail related to Medicaid and other benefits programs. The agreement between the parties stated that HHSC would compensate Image using its “retrospective cost settlement model”. In 2016, HHSC notified Image that an independent external firm would conduct an audit of Image’s performance and billing for the years 2010 and 2011. The audit concluded that HHSC had overpaid Image approximately $440,000 in costs relating to bonuses, holiday pay, overtime, and other unauthorized labor expenses. HHSC then sought to recoup the overpayments by deducting from payments on Image’s invoices.The trial court granted HHSC’s motion for summary judgment and signed a final judgment for the commissioner. The court of appeals reversed the trial court’s judgment and dismissed Image’s entire suit for want of jurisdiction. Image sought review.The Supreme Court of Texas held that Image is a Medicaid contractor under Section 32.0705(a), and that the deadline in Section 32.0705(d) for auditing HHSC’s Medicaid contractors is mandatory. However, the court ruled that HHSC’s failure to meet the deadline does not preclude it from using the result of the audit or pursuing recoupment of overcharges found in the audit. The court affirmed the part of the court of appeals’ judgment dismissing Image’s claims arising from the 2016 audit for lack of jurisdiction, reversed the part of the judgment dismissing the remainder of Image’s suit, and remanded to the trial court for further proceedings. View "IMAGE API, LLC v. YOUNG" on Justia Law

The case revolves around a dispute between the Board of Regents of the University of Texas System and IDEXX Laboratories, Inc. over the interpretation of a patent licensing agreement. The agreement, signed in 2000, pertained to a peptide used to test for Lyme disease in dogs. The agreement stipulated different royalty rates for different types of products, depending on what tests were included. The dispute arose over the interpretation of two royalty provisions, one for 1% and the other for 2.5%, which could both be read to apply to the same sales of goods. IDEXX Laboratories had been paying the lower royalty rate, but the University argued that the higher rate should have been applied.The trial court ruled in favor of the University, concluding that the licensing agreement was clear and unambiguous and that the University was entitled to recover the unpaid royalties claimed plus accrued interest. On appeal, IDEXX Laboratories argued for the first time that the licensing agreement was ambiguous. The court of appeals agreed, concluding that both interpretations of the royalty provisions were reasonable and conflicting, and therefore the agreement was ambiguous. It reversed the trial court's decision and remanded the case.The Supreme Court of Texas disagreed with the court of appeals. It found that the royalty provisions were not ambiguous when read in the context of the licensing agreement itself and the objective circumstances in which the agreement was produced. The court concluded that the provisions were most reasonably interpreted to require royalties on IDEXX Laboratories' products at the higher rate stipulated in the agreement. The court reversed the court of appeals' judgment and remanded the case to that court for further proceedings. View "Board of Regents of the University of Texas System v. IDEXX Laboratories, Inc." on Justia Law

The Supreme Court of Texas reviewed a case involving Samson Exploration, LLC and several families, including the Bordages, from whom Samson held oil-and-gas leases. The families sued Samson for unpaid royalties under those leases. The Bordages claimed that they were entitled to late charges on the late charges, arguing that the leases' Late Charge Provision imposed late charges on late charges, compounding them each month. Samson disagreed, asserting that the late charges were not compounded.Previously, the trial court found Samson liable for breach of contract and awarded the Bordages $12,955,919 in contract damages, based on the interpretation of the Late Charge Provision. The Bordages argued that collateral estoppel prevented the Supreme Court from deciding whether the Late Charge Provision calls for simple or compound interest because that issue was previously resolved in another case involving Samson and a different lessor, the Hooks case.The Supreme Court of Texas held that Texas law disfavors compound interest, and an agreement for interest on unpaid amounts is an agreement for simple interest absent an express, clear, and specific provision for compound interest. The court also held that Samson’s prior litigation of the issue does not collaterally estop it from asserting its claims here. The court reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "SAMSON EXPLORATION, LLC v. BORDAGES" on Justia Law

The case revolves around a dispute between Anne Carl and related parties (the royalty holders) and Hilcorp Energy Company (the producer) over the calculation of royalties from a mineral lease. The lease stipulates that royalties are to be calculated based on the market value of the minerals "at the well," meaning before any post-production efforts have increased their value. However, the minerals are often not sold until after these efforts have taken place, resulting in a higher sale price. To account for this disparity, the producer deducted the proportionate share of post-production costs from the royalty payment, a method known as the "workback method." The royalty holders were dissatisfied with this reduced payment and sued, arguing that the lease required payment of a royalty on all gas produced from the well.The case was initially heard in a federal district court, which sided with the producer. The court found that the lease did indeed convey an "at-the-well" royalty, meaning the royalty holders were obligated to share proportionately in the post-production costs. The court also found no fault with the producer's method of accounting for these costs, which involved using some of the gas produced from the well to power post-production activities conducted off the lease. The value of this gas was considered a post-production cost and was therefore deducted from the total volume of gas used to calculate the royalty.The case was then certified to the Supreme Court of Texas, which affirmed the lower court's decision. The court agreed with the producer's interpretation of the lease and found that the royalty holders, as holders of an "at-the-well" royalty, were indeed obligated to bear their usual share of post-production costs. The court also found that the producer's method of accounting for these costs was permissible. The court concluded that the royalty holders were not shortchanged and that the producer's calculation was one acceptable way to convert the downstream sales price into an at-the-well market value on which to pay the royalty, as required by the lease. View "CARL v. HILCORP ENERGY COMPANY" on Justia Law

This case involves a dispute over the interpretation of an assignment of mineral rights. In 1987, Shell Western E&P, Inc. sold a large bundle of Texas oil-and-gas properties to the predecessor of Citation 2002 Investment LLC. The assignment included an exhibit that listed the properties being transferred, some of which included depth specifications. In 1997, Shell purported to assign all its interests in the same leases to Occidental Permian’s predecessor. Occidental claimed that Shell had reserved to itself interests beyond the depth specifications of the 1987 assignment. Citation, however, claimed that it received the entirety of Shell’s leasehold interests in the 1987 assignment.The trial court granted Occidental’s motion for summary judgment, concluding that the depth-specified tracts listed in the exhibit reserved to Shell the mineral-estate depths beyond the notations. Citation appealed, and the court of appeals reversed, holding that the 1987 assignment unambiguously conveyed the entirety of Shell’s interests in the leasehold estates without reserving portions of those interests to Shell.The Supreme Court of Texas affirmed the court of appeals' decision. The court held that the disputed assignment unambiguously conveyed all right, title, and interest that Shell owned in the leasehold estates listed in the exhibit, without reserving portions of those interests to itself through further notations about specific tracts within those estates. The court reasoned that the assignment's broad granting language, coupled with the absence of explicit reservation language, indicated that the entirety of the leasehold interests were conveyed. The court also noted that the depth specifications in the exhibit served a concrete purpose of providing notice of depth-specific third-party interests that continue after the leasehold estates are assigned. View "OCCIDENTAL PERMIAN, LTD. v. CITATION 2002 INVESTMENT LLC" on Justia Law

Westwood Motorcars, LLC leased commercial property in Dallas to operate an automobile dealership. The lease was set to expire in 2013, but an addendum allowed Westwood to extend the lease for two additional 24-month terms. In 2015, ownership of the property changed hands and Virtuolotry, LLC became the new landlord. Westwood sought to exercise its option to extend the lease for the second additional term, but Virtuolotry’s lawyers refused, asserting that Westwood had breached the lease in numerous ways. Amidst this dispute, Westwood claimed that Virtuolotry and its manager, Richard Boyd, harassed Westwood at the premises, interfering with its business operations. Westwood sued Virtuolotry in district court, seeking a declaratory judgment that it had not breached the lease and that it had properly extended the lease for another two years. Virtuolotry sued in justice court to evict Westwood for unpaid rent, lease violations, and holding over unlawfully.The justice court ruled in favor of Virtuolotry, awarding it "possession only." Westwood appealed the judgment to the county court at law. However, a few weeks before the trial date, Westwood formally withdrew its appeal in county court, and the county court entered a “stipulate[d] and agree[d]” judgment ordering “that possession of the Premises is awarded” to Virtuolotry. Westwood fully vacated the property, but continued its pending suit in district court, adding claims for breach of contract (against Virtuolotry) and constructive eviction (against Virtuolotry and Boyd). The district court ruled in favor of Westwood, awarding damages and attorney’s fees.Virtuolotry and Boyd appealed, and the court of appeals reversed the district court's decision, ruling that by agreeing to the eviction-suit judgment in county court, Westwood “voluntarily abandoned the premises” and thus “extinguish[ed] any claim for damages.” Westwood then petitioned the Supreme Court of Texas for review.The Supreme Court of Texas reversed the court of appeals' decision, ruling that the court of appeals erred by giving a judgment of possession from a court of limited jurisdiction preclusive effect over Westwood’s claim for damages in district court. The Supreme Court of Texas held that Westwood’s agreement to entry of the county-court judgment cannot reflect assent to anything more than what that judgment resolves—i.e., who receives immediate possession of the property. The court remanded the case to the court of appeals for further proceedings. View "WESTWOOD MOTORCARS, LLC v. VIRTUOLOTRY, LLC" on Justia Law