Justia Contracts Opinion Summaries

Cheryl Butler was hired as an assistant law professor at Southern Methodist University (SMU) in 2011. After a mandatory third-year performance review, her contract was renewed, and she became eligible for tenure consideration in the fall semester of 2015. Due to illness, Butler requested an extension of the tenure vote, which was denied, but she was later granted leave under the Family Medical Leave Act (FMLA) for the spring semester of 2016. Her tenure committee, chaired by Professor Roy Anderson, concluded that Butler met tenure standards for scholarship and service but not teaching. Consequently, the law faculty voted not to recommend tenure, and Butler's appeals to the SMU Law School Dean and the Provost were unsuccessful. Butler completed the 2016-2017 academic year without teaching any classes.Butler filed a lawsuit against SMU and several of its employees, alleging racially discriminatory tenure standards and processes, and retaliation for her internal complaints about race, disability, and FMLA discrimination. She brought federal statutory claims under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, the Rehabilitation Act of 1973, the Americans with Disabilities Act, Title IX, and the FMLA. Additionally, she asserted state-law discrimination and retaliation claims under Texas Labor Code Chapter 21, along with state common law claims for breach of contract and negligent supervision. Against the employee defendants, she claimed defamation, conspiracy to defame, and fraud.The United States District Court for the Northern District of Texas dismissed Butler's defamation and fraud claims against the employee defendants, citing preemption by Chapter 21 of the Texas Labor Code. The court held that the gravamen of these claims was unlawful employment discrimination and retaliation, which Chapter 21 specifically addresses. Butler appealed, and the United States Court of Appeals for the Fifth Circuit certified a question to the Supreme Court of Texas regarding whether Chapter 21 preempts common law defamation and fraud claims against employees based on the same conduct as discrimination claims against the employer.The Supreme Court of Texas held that Chapter 21 does not preempt common law defamation and fraud claims against employees. The court reasoned that Chapter 21 subjects only employers to liability for discriminatory and retaliatory conduct and does not immunize individuals from liability for their own tortious actions. Therefore, Butler's defamation and fraud claims against the employee defendants are not foreclosed by Chapter 21. View "BUTLER v. COLLINS" on Justia Law

This case involves a dispute between American Midstream (Alabama Intrastate), LLC (AMID) and Rainbow Energy Marketing Corporation (Rainbow) over a contract (MAG-0005) for the transportation and balancing of natural gas. Rainbow had contracts to transport gas through two interconnected pipelines, the Transco and the Magnolia, and used the MAG-0005 to leverage AMID’s balancing flexibility. The contract allowed Rainbow to run imbalances, withdrawing gas without simultaneously supplying an equal amount, provided they resupplied by the end of each month. Disputes arose when Transco began limiting imbalances more strictly, leading to AMID curtailing Rainbow’s nominations on several occasions.The trial court found in favor of Rainbow on all its claims, including breach of contract, repudiation, fraud, fraudulent inducement, and negligent misrepresentation, awarding over $6 million in lost profits. The court interpreted Section 9.1 of the MAG-0005 as excusing AMID’s performance only under specific conditions involving scheduled and physical imbalances. The Court of Appeals for the First District of Texas affirmed the trial court’s decision, agreeing with its interpretation of the contract and the award of damages.The Supreme Court of Texas reviewed the case and held that the trial court had erroneously inserted language into Section 9.1 of the MAG-0005. The correct interpretation of Section 9.1 excused AMID from providing balancing services on any day that Transco required AMID or Rainbow to limit imbalances attributable to Rainbow, without distinguishing between types of imbalances. The Supreme Court reversed the lower courts' decisions, rendered judgment for AMID on Rainbow’s contract-repudiation and tort claims, and remanded for a new trial on the breach-of-contract claims to determine if Transco mandates excused AMID’s performance on the days in question. View "AMERICAN MIDSTREAM (ALABAMA INTRASTATE), LLC v. RAINBOW ENERGY MARKETING CORPORATION" on Justia Law

Myers-Woodward, LLC (Myers) owns 160 acres in Matagorda County, Texas. In 1947, Myers’s predecessors retained the surface estate but transferred the mineral estate to the predecessor of Underground Services Markham, LLC and United Brine Pipeline Company, LLC (collectively, USM). The mineral deed granted USM’s predecessor an interest in all oil, gas, and other minerals on the land, along with rights necessary for mining and transporting these minerals. In 2008, USM acquired all of Texas Brine Company’s interest in the salt on the property. Disputes arose over the ownership of caverns created by salt mining and the calculation of royalties owed to Myers.The district court ruled that USM owned the subsurface caverns created by its salt mining activities but denied USM’s request to use the caverns for storing hydrocarbons produced off-site. The court agreed with Myers that USM could only use the land for purposes specified in the 1947 deed. Regarding royalties, the district court ruled that Myers was entitled to a one-eighth royalty based on the market value of the salt at the point of production, which amounted to $258,850.41. Myers appealed, challenging the royalty calculation and the ownership of the caverns. USM cross-appealed, contesting the limitation on its use of the caverns.The Supreme Court of Texas reviewed the case. The court affirmed the lower court’s decision that Myers, as the surface estate owner, retains ownership of the empty spaces within the salt formations. The court held that the mineral estate does not include ownership of the empty spaces created by salt mining. However, the court reversed the lower courts’ calculation of Myers’s royalty payments, ruling that Myers is entitled to an in-kind royalty of one-eighth of the net proceeds from the sale of the salt. The case was remanded to the district court for further proceedings consistent with this opinion. View "MYERS-WOODWARD, LLC v. UNDERGROUND SERVICES MARKHAM, LLC" on Justia Law

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