Justia Contracts Opinion Summaries

In these two consolidated cases involving claims brought against the Electric Reliability Council of Texas, Inc. (ERCOT) the Supreme Court answered, among other questions, that ERCOT is a governmental unit as defined in the Texas Tort Claims Act and is thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction.CPS Energy sued ERCOT and several of its officers for, inter alia, breach of contract. The trial court denied ERCOT'S plea to the jurisdiction. Ultimately, the court of appeals held that ERCOT was a governmental unit entitled to take an interlocutory appeal. In the second case, Panda sued ERCOT for, inter alia, fraud. The trial court denied ERCOT's pleas to the jurisdiction. The court of appeals ultimately held that ERCOT was not entitled to sovereign immunity. The Supreme Court affirmed in the first case and reversed in the other, holding (1) ERCOT was entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction; (2) the Public Utility Commission of Texas has exclusive jurisdiction over the parties' claims against ERCOT; and (3) ERCOT was entitled to sovereign immunity. View "CPS Energy v. Electric Reliability Council of Texas" on Justia Law

In this case alleging defective design and development of a commercial property the Supreme Court reversed the judgment of the court of appeals concluding that the running of limitations was equitably tolled while the suit was on appeal, holding that there was no tolling.The suit in this breach of contract and negligence action was eventually dismissed for failure to file a certificate of merit. Plaintiff nonsuited its claims and refiled. The court of appeals held that the certificate of merit was deficient as to the breach of contract claim but complied with the statute with respect to the negligence claim. The Supreme Court reversed in part, holding that the certificate of merit failed to satisfy Tex. Civ. Prac. & Rem. Code 150.002 as to Plaintiff's negligence claim. The Supreme Court remanded the case for a determination of whether the dismissal should be with or without prejudice. Thereafter, Plaintiff filed a new suit against Defendant that included a new certificate of merit. The trial court granted summary judgment for Defendant on the grounds that Plaintiff's claims were time-barred. The court of appeals reversed, concluding that Plaintiff was entitled to equitable tolling. The Supreme Court reversed, holding that there was no tolling during the appeal of the earlier-filed lawsuit. View "Levinson Alcoser Associates, LP v. El Pistolon II, Ltd." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay arbitration before the American Arbitration Association (AAA) and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties' contracts required them to resolve their controversies through arbitration.In the underlying dispute involving oil and gas leases Total E&P filed this suit seeking a declaratory construing the parties' cost sharing agreement. Thereafter, MP Gulf initiated an arbitration proceeding asserting that Total E&P breached the agreement. At issue was whether the parties clearly and unmistakably delegated arbitrability issues to the arbitrator by agreeing to arbitrate their controversies in accordance with the AAA Commercial Rules. The trial court granted Total E&P's motion to stay the AAA arbitration and denied MP Gulf's motion to compel that arbitration. The court of appeals reversed and compelled AAA arbitration. The Supreme Court reversed, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals concluding that governmental immunity does not protect a city against a breach of contract claim because the city was acting in its proprietary capacity when it entered into the contract, holding that the court of appeals did not err.In this dispute involving an "Economic Development Incentives Grant Agreement" under Tex. Loc. Gov't Code 373.002(b) Plaintiff alleged that the City of League City breached its agreement to reimburse Plaintiff for certain fees and costs in connection with Plaintiff's construction of a restaurant facility in the City. The City filed a plea to the jurisdiction arguing that governmental immunity barred the claim. The trial court denied the plea. The court of appeals affirmed, concluding that governmental immunity did not apply to the claim. The Supreme Court affirmed, holding that the court of appeals correctly determined that the City engaged in a proprietary function when it entered into the agreement with Plaintiff. View "City of League City v. Jimmy Changas, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this employment discrimination suit ruling that an arbitration agreement was unconscionable and affirming the order of the trial court denying the employer's motion to compel arbitration, holding that the court of appeals erred in ruling that the evidence supported the trial court's finding that the arbitration agreement was unconscionable.After Petitioner terminated Respondent's employment Respondent sued for race discrimination and retaliation under federal and state law. Petitioner moved to compel arbitration based on the arbitration agreement signed by Respondent when he was hired. Respondent opposed the motion, arguing that the agreement was unconscionable. The trial court denied the motion to compel, and the court of appeals affirmed. The Supreme Court reversed, holding that there was insufficient evidence to prove that the agreement was unconscionable. View "Houston AN USA, LLC v. Shattenkirk" on Justia Law

The Supreme Court reversed the opinion of the court of appeals reversing the trial court's holding that, as a matter of law, a statutory "safe-harbor" provision applied and relieved an operator of oil-and-gas wells from any obligation to pay interest in the amounts withheld, holding that the safe-harbor provision applied as a matter of law.At issue was the "safe harbor" provision that permits operators to withhold payments without interest under certain circumstances. In reliance with the safe harbor provision the operator in this case withheld production payments it was contractually obligated to make to one of the wells' owners. The owner brought suit seeking to recover the payments with interest. The operator made the payments but without interest. The trial court concluded that the safe-harbor provision allowed the operator to withhold the funds. The court of appeals reversed. The Supreme Court reversed, holding that the operator established as a matter of law that it was entitled to withhold distribution of production payments without interest under the statutory safe-harbor provision of Tex. Nat. Res. Code 91.402(b)(1)(A) and (b)(1)(B)(ii). View "Freeport McMoRan Oil & Gas LLC v. 1776 Energy Partners, LLC" on Justia Law

In this interlocutory appeal involving the application of a statutory immunity waiver in a lawsuit alleging breach of a contract to construct university housing the Supreme Court reversed the decision of the court of appeals reversing the trial court's ruling that the university was not immune from suit, holding that the court of appeals erred.In 2014, Texas Southern University (TSU) executed a contract with Pepper Lawson Horizon International Group, LLC (PLH) to work as the contractor on a project to construct student housing. PLH later sued TSU for breach of contract. TSU asserted sovereign immunity to suit as a defense despite PLH's pleadings expressly invoking the immunity waiver in Tex. Civ. Prac. & Rem. Code 114.003, arguing that section 114.003 was inapplicable because PLH failed to plead a claim covered by the waiver provision. The trial court denied TSU's plea to the jurisdiction, but the court of appeals reversed. The Supreme Court reversed, holding that the court of appeals erred in concluding that PLH failed to plea a cognizable Chapter 114 claim. View "Pepper Lawson Horizon Int'l Group, LLC v. Tex. Southern University" on Justia Law

The Supreme Court reversed in part the opinion of the court of appeals in this interlocutory appeal concerning whether a subsequent purchaser (Purchaser) of a home is required to arbitrate her claims against the builder (Builder) for alleged construction defects, holding that the trial court erred in granting Purchaser's motion to vacate and denying Builder's motion to confirm.The trial court granted the motion to compel arbitration filed by Builder, which joined two subcontractors in the arbitration, asserting that they owed defense and indemnity obligations. The arbitrator issued an award in favor of Builder. The trial court vacated the award against Purchaser but made no ruling whether to vacate the award against the subcontractors. The Supreme Court rendered judgment confirming the award against Purchaser and remanded the case, holding (1) Purchaser was bound by the arbitration clause in the purchase-and-sale agreement under the doctrine of direct-benefits estoppel; and (2) because the record contained no ruling on whether to vacate the award against the subcontractors, remand was required. View "Lennar Homes of Tex. Land & Construction, Ltd. v. Whiteley" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the trial court's conclusion that contract language releasing claims against a named entity's predecessors barred the releasor's recovery against an unaffiliated and unrelated predecessor in title, holding that the court of appeals correctly rendered judgment that, as used in the release agreement, the term "predecessors" refers only to corporate predecessors.On appeal, Appellants argued that the neither the contract language nor the circumstances surrounding the execution of the release supported limiting the term "predecessors" to "corporate" predecessors and that "predecessors" naturally refers to predecessors in title. The Supreme Court affirmed, holding (1) the release was not ambiguous as to the meaning of "predecessors"; and (2) Appellees were entitled to summary judgment on the affirmative defenses of release, waiver, and third-party beneficiary. View "Finley Resources, Inc. v. Headington Royalty, Inc." on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this contract dispute, holding that the court of appeals erred by failing to apply a common-law default rule to the parties' dispute involving the sale of working interests in 109 oil-and-gas leases.According to the Court, Texas cases have long followed a default common-law rule in the circumstances that the words "from" or "after" a specific date to measure a length of time. Under the rule, courts must treat the time period as excluding the specified date (measuring date), and therefore, a period measured in years "from" or "after" a measuring date ends on the anniversary of the measuring date, not the day before. In the instant case, the parties asked the Supreme Court to resolve key issues of contract construction. Noting that the parties could have easily departed from the default rule by indicating as much within the four corners of the relevant lease, the Supreme Court held that because the parties' agreement implicated the default rule without displacing it, the default rule must be applied to the dispute. View "Apache Corp. Apollo Exploration, LLC" on Justia Law