Chambers USA 2022 Ranks Carrington Coleman as a Top Firm for Commercial Litigation

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Carrington Coleman is pleased to announce that its commercial litigation practice has been recognized by the highly regarded Chambers USA legal guide.

The firm was chosen for the 2022 client guide based upon its handling of a wide range of matters, including breach of contract, oil & gas, securities, employment, and construction disputes, in trials, appeals, and alternative dispute resolution.

“The firm has very smart lawyers with a lot of intellectual horsepower,” one interviewee said of the firm.

In addition to the firm’s ranking, Managing Partner Monica Latin, and Head of Litigation, Alex More earned individual recognition for their litigation work.

Mr. More is a strong performer in fiduciary duty, securities, and fraud-related disputes, according to Chambers.

Ms. Latin was acknowledged for her “breadth of skill resolving complicated business disputes at the trial and appellate levels,” as she was hailed as “a superb advocate.”

The Chambers USA guide is produced by London-based Chambers and Partners, known worldwide for its thorough guides to the legal profession. Selection is based on thousands of in-depth attorney and client interviews to identify lawyers who demonstrate top technical legal ability, professional conduct, client service, commitment, and other key qualities.

Mandamus: If Not Now, When?

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In re Holland

Dallas Court of Appeals, Nos. 05-22-00368-CV, -00369-CV, and -00378-CV (May 27, 2022)
Before Justices Myers, Nowell (Opinion), and Goldstein

In three identical rulings, the Dallas Court of Appeals rejected three identical petitions for writs of mandamus as having been filed prematurely. The petitions complained that the trial court had not ruled on motions to compel discovery in three criminal cases concerning the same incarcerated individual. The convicted defendant “filed his motions on January 7, 2022, reminded the trial court that they were pending by letter dated March 7, 2022, and filed his petition[s] seeking mandamus relief on April 20, 2022.” The Court denied all three petitions, saying the Relator had not “shown he is entitled to mandamus relief after such a short period of time.”

Although it is not clear that a hearing on the motions was ever requested or set, we now have guidance that 103 days from filing a motion without getting a ruling is not long enough to warrant mandamus relief compelling the trial court to rule.

SCOTUS Cuts Burden for Showing Waiver of Arbitration

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Morgan v. Sundance, Inc.

United States Supreme Court, No. 21-328 (May 23, 2022)
Unanimous opinion by Justice Kagan, linked here
Based on the widely acknowledged “strong federal policy favoring arbitration” under the FAA, the great majority of federal courts have for many years held that a party impliedly waives its right to compel arbitration by “substantially invok[ing] the judicial process” on matters ostensibly subject to arbitration only if in doing so it “thereby causes ‘detriment or prejudice’ to the other party.” Salas v. GE Oil & Gas, 857 F.3d 278, 281 (5th Cir. 2017) (relying on Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986)). That is no longer the law in federal court. After acknowledging that at least nine federal circuits—including the Fifth—were applying this rule, the Supreme Court in Sundance decreed that these courts were wrong to craft and impose an “arbitration-specific waiver rule demanding a showing of prejudice.” “The FAA’s ‘policy favoring arbitration,’” it said, “does not authorize federal courts to invent special, arbitration-preferring procedural rules.” Instead, “the federal policy is about treating arbitration contracts like all others, not about fostering arbitration.” Consequently, whether a party has waived its right to arbitrate by invoking or participating in the judicial process is to be judged by the same standard applied to all other contractual rights—i.e., whether that conduct amounts to “the intentional relinquishment or abandonment of a known right,” without reference to whether it has caused any prejudice to the other side.
The Supreme Court’s Sundance ruling was directed to federal courts applying the FAA. But its effect will be even more pervasive. Most state courts also now include a “prejudice” component in their tests for determining whether a party has impliedly waived arbitration. In Texas, for example, “[a] party asserting implied waiver as a defense to arbitration has the burden to prove that (1) the other party has ‘substantially invoked the judicial process,’ which is conduct inconsistent with a claimed right to compel arbitration, and (2) the inconsistent conduct has caused it to suffer detriment or prejudice.” G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 511-12 (Tex. 2015).  These state-court precedents will have to be reexamined and many likely will fall, just like the scores of federal decisions directly overruled by Sundance. Because the Court’s rationale rested in part on the absence of any support in the FAA for courts to create this arbitration-specific test, it is reasonable to assume that state courts will follow Sundance when applying the FAA. But even where state arbitration statutes are concerned, Sundance likely will force a reassessment. Again using Texas as an example, the Texas Arbitration Act is based on the Uniform Arbitration Act, as are the arbitration statutes of most other states, and the Texas Supreme Court has stressed “the importance of keeping federal and state arbitration law consistent.” Perry Homes v. Cull, 258 S.W.3d 580, 594 (Tex. 2008). Texas appeals courts have flatly said,  “The standard for determining waiver of the right to arbitration is the same under both the Texas General Arbitration Act and the Federal Arbitration Act.” E.g., Sedillo v. Campbell, 5 S.W.3d 824, 826 (Tex. App.—Houston [14th Dist.] 1999, no pet.). The change wrought by Sundance, therefore, likely will be felt not only in the federal system, but throughout the fifty states.  

No Standing for Taxpayer Challenging Removal of Statue

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Robinson v. Scripps

Dallas Court of Appeals, No. 05-21-00349-CV (May 19, 2022)
Justices Carlyle, Smith (Opinion, available here), and Garcia

        Eugene Robinson filed suit against the City of Dallas and Jennifer Scripps, its Director of the Office of Cultural Affairs, alleging the City was in the process of disassembling a Confederate War memorial even though its Certificate of Demolition (CD) had expired. The trial court denied Robinson’s application for temporary restraining order, and the Court of Appeals denied mandamus. By that time, the monument had already been removed and placed in archival storage, and the contractor had been paid for the work. The defendants therefore filed a plea to the jurisdiction on the grounds that Robinson’s case was moot. The trial court agreed and dismissed the suit. Robinson appealed.

        In order to have standing to pursue a claim, a plaintiff must allege facts that affirmatively demonstrate the court has jurisdiction to hear the case. As a general rule, a taxpayer does not have standing to contest government decision-making because “[g]overnments cannot operate if every citizen who concludes that a public official has abused his discretion is granted the right to come into court and bring such official’s public acts under judicial review.” However, a taxpayer does have standing to sue to enjoin the illegal expenditure of public funds, and that was Robinson’s hook. He claimed the City could not expend public funds for the disassembly, removal, and transfer of the monument if it did not have a valid CD. By the time the City filed its Plea, however, the work had already been done and the money had been spent. Once the government has spent the funds the taxpayer seeks to enjoin, there is no longer a case or controversy between the parties, and the case becomes moot.
        The Court of Appeals rejected Robinson’s argument that the City’s payment of storage fees created a continuing controversy between the parties, because such fees were not alleged to be “illegal” given that they were unrelated to the expired CD. It also rejected Robinson’s argument that the “capable of repetition, yet evading review” exception to the mootness doctrine applied, finding there was no evidence the City routinely demolishes or removes property without a valid CD. The Court therefore affirmed the dismissal based on lack of jurisdiction.

What's so Special for a Special Master?

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In re Alford

Dallas Court of Appeals, No. 05-22-00240-CV (May 16, 2022)
Before Justices Osborne (Opinion), Partida-Kipness, and Smith

In re Alford concerns the sua sponte appointment of a Special Master to determine a pending plea to the jurisdiction and rule on future discovery disputes. Concluding that the appointment was not supported by findings from the trial court that “good cause” existed or that the case was “exceptional” under Texas Rule of Civil Procedure 171, the Fifth Court of Appeals conditionally granted the petition for writ of mandamus.

Without a request or consent from the parties, the trial court appointed a Special Master under Rule 171. The Order required the parties to compensate the Special Master at $500 per hour, and granted him broad authority, including the ability to have ex parte communications with the court, parties, and witnesses. Although the Order stated that “good cause exists in this exceptional case” for a Special Master, it did not specify facts or circumstances in support.
The Court of Appeals determined that the appointment did not meet the requirements of Rule 171. There were no pending discovery disputes. In addition, the record did not demonstrate that the case was “unusually complicated” or required “special knowledge.” As such, without the consent of the parties, the appointment of the Special Master was a clear abuse of discretion, and mandamus relief was warranted.

Not So Fast: Trial Court Cannot Compel Discovery While Plea to Jurisdiction Attacking Pleadings Is Pending

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In re Dallas County, Texas and Dallas County Constable Bill Gipson

Dallas Court of Appeals, No. 05-21-01144 (May 10, 2022)
Justices Myers, Partida-Kipness (Opinion, linked here), and Carlyle

After Gipson was elected constable, he told deputy constables Woodard and Yarbrough that they would not be re-sworn as deputy constables after he took office. Woodard and Yarbrough sought to pursue grievances with Dallas County. But the County concluded they were not covered by the civil-service grievance system because they had been hired after August 19, 2003; it therefore denied them a grievance hearing.

Woodard and Yarbrough then sued, claiming they were denied their property rights in employment and denied equal protection because they were not allowed to access the grievance procedure available to those hired before August 19, 2003. The County and Constable Gipson answered and filed pleas to the jurisdiction based on governmental immunity. After the jurisdictional pleas were filed, Woodard and Yarbrough moved to compel discovery. The trial court ordered the County and Constable Gipson to respond to discovery requests and to appear for depositions.
The County and Constable Gipson sought mandamus relief, arguing discovery was improper while their pleas to the jurisdiction were pending.
The Court of Appeals explained that there are two types of pleas to the jurisdiction: an attack on the sufficiency of the pleadings and an evidentiary attack on the existence of jurisdictional facts. When a plea to the jurisdiction is based on evidence, a trial court has discretion to decide the plea at a preliminary hearing or later, after the case is more fully developed. If the trial court delays determination, the trial court can also allow targeted discovery on issues relevant to the plea to the jurisdiction. In contrast, when a plea to the jurisdiction is based on the pleadings alone, discovery is not proper while the plea is pending.
The Court of Appeals concluded the County’s and Constable Gipson’s pleas to the jurisdiction were based on the pleadings, so the trial court was obligated to hear and decide the pleas to the jurisdiction before compelling discovery. Further, the Court of Appeals noted that even if this were a scenario where the court could compel targeted discovery, the trial court erred by failing to confine the compelled discovery to jurisdictional issues. The Court of Appeals therefore granted mandamus relief, directing the trial court to vacate its order compelling discovery.

Splitting with Sister Courts, the Dallas Court of Appeals Holds Post-Judgment Interest Applies to Judgments Confirming Arbitration Awards

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Bluestone Resources, Inc. v. First National Capital, LLC

Dallas Court of Appeals, No. 05-20-00776-CV (April 29, 2022)
Justices Reichek (Opinion, linked here), Nowell, and Carlyle

First National secured an award in arbitration against Bluestone. When First National sought confirmation of the award, it requested post-judgment interest under the Finance Code. The trial court issued a final judgment confirming the award and ordering post-judgment interest on all sums awarded in the judgment. On appeal, Bluestone argued the trial court’s award of post-judgment interest was an impermissible modification of the arbitration award.

The Dallas Court of Appeals held chapter 304 of the Finance Code requires post-judgment interest on a judgment confirming an arbitration award. The Court cited section 304.003, which states that post-judgment interest accrues on any “money judgment of a court of this state.” Because the trial court’s judgment confirming First National’s arbitration award was a “money judgment of a court of this state,” First National was entitled to post-judgment interest.
The Court acknowledged that its decision departed from a line of cases holding that a court may award post-judgment interest only if the arbitrator awards it. The Court observed that those cases failed to differentiate between post-award interest (accruing from the date of the arbitration award) and post-judgment interest (accruing from the date of final judgment). Post-award interest ordered by a trial court but not the arbitrator amounts to an impermissible modification of an arbitration award. Post-judgment interest, on the other hand, accrues automatically under the Finance Code even if a court’s judgment does not specifically reference it. Awarding post-judgment interest in this context, therefore, is completely consistent with the general rule that courts may not modify arbitration awards, because the post-judgment interest applies to the judgment and not the award.
Given the split among the courts of appeals, and absent reconsideration en banc, the availability of post-judgment interest in arbitration confirmation proceedings appears bound for the Texas Supreme Court. Until then, Bluestone clarifies it’s available (and mandatory) in the Fifth District.

Going Paperless in a Spoliating World

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Power v. Power

Dallas Court of Appeals, No. 05-19-01557-CV (May 3, 2022)
Justices Molberg, Nowell (Opinion), and Goldstein

In Power v. Power, the Fifth Court confronted a spoliation jury instruction given after a company went paperless and destroyed a decade’s worth of invoices central to the fiduciary duty claims in the lawsuit. Finding error, the Court reversed and remanded the case for a new trial.

Brothers Craig Power and Braden Power developed real estate together. Craig operated the business, and Braden designed and oversaw the business’s construction activities. In 2013, Craig decided the company would adopt a paperless recordkeeping system and authorized the destruction of ten boxes of invoices dating back to 2003. The brothers later sued each other over finances and distributions.
At trial, the court admitted evidence that Craig gave permission for a payroll employee to shred old invoices when they converted to electronic billing. Braden’s counsel also stated in opening and closing arguments that Craig ordered the destruction of the documents and that that “alone is a breach of fiduciary duty.” The trial court subsequently instructed the jury on spoliation without naming the offending party:
Invoices and documents which would demonstrate or reflect expenses relating to Craig Power and Braden Power [sic] real estate transactions have been destroyed.
You may consider that the invoices, documents, and records destroyed would have been unfavorable to the party who destroyed the invoices, documents, and records on the issues of whether the party complied with the party’s legal duties and the failure to properly account for money under the party’s care and control.
The jury returned a verdict in favor of Braden awarding damages against Craig. This appeal followed.
The Court first addressed whether the jury charge constituted a spoliation instruction when it did not name the party responsible for the destruction of documents. It did. There was no evidence or argument that Braden had destroyed evidence, while Braden’s counsel put on testimony and made arguments that Craig had. Therefore, not naming Craig as the spoliating party was “not determinative.”
Next, the Court analyzed whether the “severe spoliation sanction” of a jury instruction was an abuse of discretion that probably caused the rendition of an improper judgment. It was and it did. To sanction a party for spoliating evidence, the trial court must, outside the presence of the jury, find that (1) the spoliating party had a duty to preserve evidence, and (2) the party intentionally or negligently breached that duty. The trial court did not do that here. Because of the closely contested nature of the issues at trial, the emphasis Braden’s counsel placed on spoliation, and the harshness of a spoliation instruction, the Court of Appeals found harm, reversing and remanding for a new trial.

Nine Carrington Coleman Partners Recognized Among “Best Lawyers in Dallas”

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Join us in congratulating the nine Carrington Coleman partners selected among D Magazine’s “Best Lawyers in Dallas.”

Earning recognition on the 2022 list are:

Cathy Altman, Construction Litigation Work;
Lance Currie, Construction Litigation Work;
David Drumm, Energy & Natural Resources;
Whitney Keltch Green, Family Law;
Kelli Hinson, Professional Nonmedical Liability Litigation;
Monica Latin, Business/Commercial Litigation;
Ashley McMillan, Probate-Trust & Estates;
Christie Newkirk, Labor & Employment;
Marisa O’Sullivan, Insurance Law.

Selection is based on peer nominations followed by extensive review by the D Magazine staff, assisted by a blue-ribbon panel of attorneys. The complete list of Best Lawyers in Dallas is featured in the May edition of D Magazine and is available at www.dmagazine.com.

PSA—Ask for Permission, Not Forgiveness!

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In re D.M.

Dallas Court of Appeals, No. 05-21-00185-CV (April 21, 2022)
Justice Goldstein (Concurring Opinion linked here)

In a public service announcement to the bar, written to “draw attention to a disturbing trend,” Justice Goldstein pleaded for Texas lawyers to file timely notices of appeal rather than wasting their time and the courts’ resources with after-the-fact motions for extension. This “pattern and practice of the legal profession to seek forgiveness rather than permission is one that cannot stand without comment and caution.” Justice Goldstein noted that a “notice of appeal is not labor intensive, extensive, or in-depth.” Nevertheless, too often, lawyers miss the deadline to file “what is essentially a rote, perfunctory notice” and then have to file a much longer motion for extension of time, which requires the Court “to consider a myriad of excuses to determine whether the motion’s rationale meets the generous latitude mandated by the Texas Supreme Court.” Justice Goldstein’s advice: “if you file a timely motion for new trial, a two-sentence notice of appeal should follow shortly thereafter.”