Standing to Challenge Zoning Decisions

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City of Dallas v. Homan

Dallas Court of Appeals, No. 05-20-01111-CV (March 31, 2022)
Justices Carlyle, Smith, and Garcia (Opinion available here)

Katherine Homan filed a declaratory judgment action claiming that an amended zoning ordinance was invalid. The City of Dallas filed a plea to the jurisdiction, arguing Homan had no standing to challenge the ordinance. The trial court disagreed, denied the plea to the jurisdiction, and granted summary judgment in favor of Homan on her declaratory judgment claim that the ordinance is invalid. The City appealed.

The Dallas Court of Appeals agreed Homan had standing to contest the ordinance. Standing to challenge a government action requires a showing that the plaintiff suffered a particularized injury apart from the general public. So, in the context of a zoning decision, a plaintiff has standing “when the zoning affects the plaintiff differently than other members of the general public.” The Court noted that the Texas Legislature has created a mechanism for parties living within 200 feet of a proposed zoning change to receive notice and have the opportunity to protest the change. The Court found this to be a recognition that property owners within 200 feet of a proposed zoning change face a greater risk of injury to the use, enjoyment, and value of their property than the general public. This is a sufficient interest in the process to confer standing.

Must-Read Opinion Regarding Return-of-Service Affidavits

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Mesa SW Management, LP v. BBVA USA

Dallas Court of Appeals, No. 05-20-01091-CV (February 24, 2022)
Justices Myers, Osborne, and Nowell (Opinion available here)

Hanging on to a no-answer default judgment is hard. And it may have just gotten harder. In this restricted appeal, the appellants sought reversal of the default judgments against them, arguing BBVA failed to strictly comply with multiple requirements governing service of process. The Dallas Court of Appeals agreed. In particular, the Court took issue with the Affidavit of Service regarding each appellant. The affidavits provided in relevant part:

The Court held the affidavits failed to comply with Rule 105, which states: “The officer or authorized person to whom process is delivered shall endorse thereon the day and hour on which he received it, and shall execute and return the same without delay.” By its language, the rule requires the same person to whom process is delivered to then execute and return the process without delay. Because the affidavits indicated that Austin Process LLC received the process and Roger Bigony served it, the affidavits did not strictly comply with Rule 105. Failure to show strict compliance with Rule 105 renders attempted service invalid and of no effect. So the default judgments were reversed, and the case was remanded back to the trial court. The Court did not reach appellants’ other complaints about service, including whether an entity such as Austin Process LLC is an “authorized person” to receive the process under the rules.

Post-Petition Developments Derail Mandamus

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In re Am Re Syndicate, Inc.

Dallas Court of Appeals, No. 05-21-00358-CV (February 23, 2022)
Justices Myers (Opinion, linked here), Partida-Kipness, and Carlyle

Ordinarily, an appeal or mandamus is decided on the basis of the record before the trial court at the time it issued the order challenged in the appellate court. But not always.

Plaintiff TEXCAZ sued Am Re and its CEO, Barder, alleging breach of contract, fraud (for entering into a contract they didn’t intend to perform), tortious interference, and conspiracy. Am Re and Barder moved to dismiss, because the contract at issue specified that the forum for determining “any controversy arising out of this Agreement, or any breach thereof, shall be in Oklahoma County, Oklahoma.” Am Re and Barder were not parties to that contract—Am Re’s principal, GIC, was—but Am Re and Barder contended TEXCAZ was estopped to deny it was bound by the Oklahoma forum-selection clause by virtue of its claims of breach of the contract containing that provision and fraud regarding the lack of intent to perform that contract. The trial court denied the motion to dismiss. Am Re and Barder sought mandamus to enforce the forum-selection clause.
Several months after Am Re and Barder filed their mandamus petition, TEXCAZ amended its petition in the trial court to drop its claims for breach of contract and fraud. In addition, GIC revoked Am Re’s agency authority. Based on these post-petition developments, the Dallas Court of Appeals concluded “that the controversy does not arise out of the contract and that relators lack capacity and standing to assert the forum- or venue-selection clause.” It therefore denied mandamus.

Court-Ordered Mediation on Appeal

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Newsom, Terry & Newsom, LLP v. Henry S. Miller Commercial Co.

Dallas Court of Appeals, No. 05-20-00379-CV (February 22, 2022)
Justice Carlyle (Order, linked here)

In the U.S. Court of Appeals for the Fifth Circuit, it’s not unusual to get a notice that a case has been referred to the Circuit Mediation Program. When the circuit mediator has selected a case for the program, any party may opt out, which concludes mediation proceedings (at least as to that party). When the Court has referred a case to the program, the Court has discretion to grant or deny an opt-out request. Similarly, some Texas courts of appeals, like the First Court in Houston, have appellate mediation programs under which the court can order the parties to mediation.

The resources on the Fifth Court of Appeals website do not mention a formal mediation program. (One appears to have existed under a prior version of the Court’s local rules.) The Court’s current Internal Operating Procedures state that if “both parties notify the Court that they have agreed to a mediator, the Court will refer the case to mediation,” but do not speak to the Court’s ordering mediation without a request from the parties. Nonetheless, the Fifth Court has the power to order the parties to mediate under Chapter 154 of the Civil Practice and Remedies Code. The Court doesn’t frequently order parties to mediate without a request. But it just did so in Newsom, a legal malpractice case argued in November 2021.

Squashed: Probate Exception Does Not Provide Jurisdiction over Roach’s Appeal

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John H. Roach. v. Patricia S. Roach

Dallas Court of Appeals, No. 05-21-00754-CV (February 15, 2022)
Justices Molberg, Goldstein (Opinion, linked here), and Smith

Generally, Texas law allows an appeal only from final judgments and from interlocutory orders made appealable by statute. But an exception exists for interlocutory orders in a probate proceeding if an order disposes of all parties and issues for which a particular part of a probate proceeding was brought—sometimes described as allowing “multiple” final judgments in probate. To determine whether the probate exception applies, a court may consider whether the matter disposed of in the interlocutory order could properly be severed.

John Roach filed an ancillary proceeding in a probate case against Patricia Roach and Patricia Roach Tacker alleging breach of fiduciary duty, breach of a family partnership agreement, and negligence. John also sought a declaration that the Patricias, along with the decedent’s attorney, manipulated the decedent into modifying two codicils while the decedent was cognitively impaired. The Patricias filed a motion for summary judgment alleging John’s challenge to the codicils was barred by the two-year statute of limitations applicable to will contests. The trial court granted the motion, and John appealed.
The Court of Appeals applied the severability analysis and held it lacked jurisdiction over the interlocutory order dismissing John’s declaratory judgment action. Among other things, to be severable, a claim cannot be “so interwoven” with the remaining claims “that they involve the same facts and issues.” Because the alleged scheme between the Patricias and the decedent’s attorney at the heart of the declaratory action was also significant to the remaining claims for breach of fiduciary duty, breach of the partnership agreement, and negligence, the Court concluded the declaratory action was not subject to severance and the interlocutory order dismissing the single claim was not appealable.
The Court of Appeals suggested it disagreed with In re Estate of Florence, 307 S.W.3d 887, 889 (Tex. App.—Fort Worth 2010, no pet.), a “somewhat factually similar case.” The Dallas Court explained that Florence only briefly addressed jurisdiction over the interlocutory order in a footnote without providing meaningful analysis.

Don’t Sleep on Mandamus in Dallas

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In re Ruff, No. 05-21-00886-CV (Tex. App.—Dallas February 15, 2022) Justices Molberg, Reichek (Opinion, linked here), and Garcia

In re Perez-Merino, No. 05-22-00082-CV (Tex. App.—Dallas February 14, 2022) Justices Schenck, Reichek (Opinion, linked here), and Carlyle
In re Tekin & Associates, LLC, No. 05-21-00219-CV (Tex. App.—Dallas February 9, 2022) Justices Osborne, Pedersen, III (Opinion, linked here), and Goldstein

There is no hard and fast deadline for filing a mandamus petition. But, although mandamus is not technically “an equitable remedy,” it is guided by principles of equity—including laches. And in the last week alone, the Dallas Court of Appeals has summarily denied three mandamus petitions for what it deemed to be excessive delays in filing. In each opinion the Court said, “[A]n unexplained delay of four months or more can constitute laches and result in denial of mandamus relief,” citing Rivercenter Associates v. Rivera, 858 S.W.2d 366 (Tex. 1993) (orig. proceeding), and decisions from the Dallas Court of Appeals and others to the same effect. With these three short, substantially identical opinions in a single week, the Court would seem to be signaling that, absent a good explanation, a delay of four months in filing for mandamus relief can (will?) trigger denial of a petition irrespective of the merits. Moral of the story: if you’re considering filing a mandamus in the Dallas Court of Appeals, get on with it.

Party Has No Standing to Appeal Sanctions Against Its Attorneys

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On Deck Capital, Inc. v. CWO Designer Landscapes LLC

Dallas Court of Appeals, No. 05-20-00471-CV (February 10, 2022)
Justices Reichek (opinion available here), Nowell, and Carlyle

When the day of trial arrived, the plaintiff had not timely responded to or supplemented its discovery responses. It became clear that, if trial proceeded, the court would exclude much of plaintiff’s anticipated evidence because of that failure to respond or supplement. When the trial court refused the plaintiff’s request for a continuance in order to supplement its discovery, the plaintiff filed a motion for non-suit. The parties disagreed about whether the non-suit should be with or without prejudice and whether discovery sanctions should be issued. Ultimately, the trial court dismissed the case without prejudice, but ordered discovery sanctions against the plaintiff’s law firm, “not the client.” The plaintiff appealed.

The Court of Appeals dismissed for lack of jurisdiction, holding that the plaintiff/appellant had no standing to appeal the sanctions order because the sanctions were imposed against the law firm, not the plaintiff. “An appellant is not harmed when sanctions are imposed solely against the appellant’s attorney” the Court explained, “and does not have standing to challenge an order imposing sanctions solely upon his attorney.”

Evidence Required at the Threshold for Direct Access to Opponent’s Electronic Device

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In re Cooley

Dallas Court of Appeals, No. 05-21-00445-CV (February 2, 2022)
Justices Schenck (Opinion, linked here), Nowell, and Garcia

Cooley sued Methodist Richardson Medical Center, alleging she was injured while a patient there. Cooley and her housemate took photos of her injuries. Methodist sought production of the photos and the associated metadata. Cooley produced a CD with the photos and what she contended was all metadata. Methodist disagreed that all metadata had been produced, and sought direct access to the electronic devices on which the photos were taken to pursue the metadata it contended was missing. After a non-evidentiary hearing, the trial court granted Methodist’s motion to compel the requested direct access.

Applying the Supreme Court’s decision in In re Weekley Homes, L.P., 295 S.W.3d 309 (Tex. 2009), the Dallas Court of Appeals granted mandamus and ordered the trial court to vacate its order that Cooley gave Methodist direct access to her electronic devices. The Dallas Court noted the admonition in Weekley that “ordering examination of a party’s electronic storage device is particularly intrusive and should be generally discouraged.” To justify direct access to an opponent’s electronic device, the Court said, “[t]he procedural protections identified in Weekley Homes require that the requesting party show that the responding party has defaulted in its obligation to search its records and produce the requested data, that the responding party’s production has been inadequate, and that a search of the opponent’s electronic device could recover relevant materials.” What’s more, this is a “threshold” evidentiary requirement. Where, as here, the requesting party does not put forth the required evidence, its request for direct access must be denied—or, in this case, vacated on mandamus.

Whose Card Is It Anyway?

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American Express National Bank v. Sherwood

Dallas Court of Appeals, No. 05-20-00153-CV (January 27, 2022)
Justices Osborne (opinion available here), Reichek, and Carlyle

American Express brought suit against Christopher Sherwood to collect amounts it alleged were due on two credit card accounts. The trial court entered a take-nothing judgment against American Express, finding the bank had failed to prove it owned the accounts at issue. American Express appealed.

The Dallas Court of Appeals carefully reviewed the evidence presented by American Express to determine whether it conclusively proved its right to recover on the two accounts. Although American Express put on testimony from a custodian of records that the outstanding account balances were owed on accounts opened by Sherwood and owned by American Express, many questions remained. For example, there was no evidence explaining why the account number on one of the cards changed from one ending in 62009 to one ending in 61001. Despite the bank witness’s testimony that he was “one hundred percent” confident the two accounts were for the same card, there was no documentation showing the reason for the change in account numbers. The other card had originated with Citibank. The bank witness testified that American Express “took over the Citibank Hilton portfolio,” but there was no documentation of any transfer or assignment of the account at issue. In addition, there was a balance due when the account was allegedly transferred from Citibank to American Express, and American Express did not have any documentation of the Citibank charges that resulted in that balance. Even though Sherwood testified at trial and did not deny those charges were his, the Court held “Sherwood’s silence does not provide affirmative evidence that was otherwise lacking.”
In the end, American Express could not connect all the dots proving its right to collect on either card, and the take-nothing judgment was affirmed.

Two Practice Pointers: Redacting Fee Statements and Post-Judgment Interest Rates

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THB Construction, LLC v. Holt Texas, Ltd.

Dallas Court of Appeals, No. 05-20-00020-CV (January 13, 2022)
Justices Myers, Partida-Kipness (Opinion, linked here), and Carlyle

The opinion of the Dallas Court of Appeals in THB Construction included two important reminders, the first for those practitioners proving up attorney’s fees, and the second for those seeking the maximum post-judgment interest allowed by law:

First, when seeking attorney’s fees, don’t go overboard in redacting the fee statements you submit to prove up those fees. Redactions are customary and necessary to avoid revealing confidential information protected by privilege or to eliminate time and expenses for tasks not covered by the fee request. But in THB Construction, the Court found the plaintiff’s redactions to be so extensive for one period of time that those billing records did not constitute “evidence identifying the specific tasks performed, the individual who performed the tasks, and the time each task took,” as required under Rohrmoos. That led to the reversal or remittitur of a significant portion of the fees awarded by the trial court. So, redact as necessary, but be careful and don’t overdo it. And supplement with other evidence if need be.
Second, remember that the Finance Code sets different levels of maximum post-judgment interest, depending on the basis for the judgment. In most circumstances, the post-judgment interest rate is 5%, unless the prime rate is higher. Tex. Fin. Code § 304.003. If the judgment is based on a contract “that provides for interest or time price differential,” however, post-judgment interest accrues at the “rate specified in the contract,” as one would expect. Tex. Fin. Code § 304.002. But, if the contract provides for interest but doesn’t specify a rate, then the court should order post-judgment interest at “18 percent a year.” Id.