Introduction. Family estate disputes over trusts and wills often bring out the worst in the parties as was exemplified in the recent case of ESTATE OF FELIPE A. RADELAT, DECEASED, 02-17-00264-CV, 2019 WL 5792652, at *1 (Tex. App.—Fort Worth Nov. 7, 2019, no pet. h.). In this case, Lourdes Radelat sued her mother and brother, appellants Ana and Andrew Radelat, over their handling of an estate matter. The appellants’ defenses to the suit included that the alleged claims were barred by the statute of limitations. In other words, Lourdes waited too long to file the lawsuit. However, Lourdes countered this defense with the fraudulent concealment doctrine. That is, appellants’ fraudulent concealment tolled the running of the statute of limitations. According to the record, after the lawsuit was filed, the appellants engaged in a series of actions that violated the court’s orders and abused the discovery process. The trial court struck the appellants’ defenses and rendered what is known as death-penalty sanctions and entered judgment against the appellants who then appealed.

Background. Lourdes filed her lawsuit in 2012 pertaining to the estate of her father Felipe Radelat, the decedent, who died in 1994. The decedent created two testamentary trusts in his will which provided that upon his death the bulk of his estate was to be transferred to these two trusts. The will named decedent’s wife Anna as the executor of the estate. The will named Lourdes, Ana, and Andrew as co-trustees of the trusts. Ana, as executor, did not fund the trusts.

Apparently, Lourdes did not find out about the trusts and the fact that she was supposed to be a co-trustee until 2012, when appellants attempted to sell real estate that belonged to one of the trusts. According to Lourdes, “appellants had withheld the will from her and misled her about its content. Lourdes alleged that appellants  breached their fiduciary duties by concealing Felipe’s estate plan, failing to properly fund the trusts, and self-dealing with trust property, among other misdeeds. Lourdes demanded a statutory accounting for the trusts.” Id. at 1.

Appellant’s filed an answer to the lawsuit that included the statute of limitations defense. Further, appellants filed counterclaims to the lawsuit. Lourdes responded that limitations were tolled by appellants’ fraudulent concealment.

After the lawsuit was filed, the trial court granted a temporary injunction that restrained appellants from using funds belonging to the trust among other restrictions. During the course of the litigation, the trial court also ordered the appellants to provide an accounting to Lourdes. Further, the parties engaged in discovery including the taking of depositions.

Apparently, appellants engaged in a pattern of misconduct during the course of the proceedings. They violated the temporary injunction order by collecting rent for property that belonged to one of the trusts, submitted a false accounting to the court, failed to provide a statutory accounting for the trusts, failed to produce documents despite an order compelling production, and failed to cooperate in giving their depositions.

On January 11, 2017, after numerous hearings on these issues, the trial court ordered death-penalty sanctions against appellants for contempt of court. The court struck appellants’ answer including the statute of limitations defense.

“After a hearing to prove damages, the trial court rendered a final judgment awarding Lourdes $1,145,401 in damages and $173,467 in attorney’s fees and ordering that all remaining trust assets be distributed to Lourdes. This appeal followed.” Id. at 3.

Holding by Court of Appeals. On appeal, the appellants contended that: “as a general rule, before death-penalty sanctions may issue, the misconduct should justify the presumption that the claim or defense lacks merit.” Id. at 4.

In affirming the trial court’s decision against appellants ,the court of appeals stated (Id. at 6):

In its order, the trial court found that each of these forms of misconduct—discovery abuses,4 refusal to cooperate, violations of a temporary injunction meant to protect trust property, and deception of the court—had occurred, along with failure to produce an accounting and other misconduct. Each of these forms of misconduct generally favors the notion that appellants’ defenses lack merit.

The court of appeals also stated (Id. at 6):

But beyond this general connection, we think appellants’ misconduct speaks to the merits directly. Appellants’ primary defense was limitations. To this, Lourdes pleaded fraudulent concealment, alleging that limitations should be tolled because appellants deceived her and hid the true nature of the will and the trusts from her. See Valdez v. Hollenbeck, 465 S.W.3d 217, 230 (Tex. 2015). The nature of appellants’ misconduct—a borderline fraud on the court—could have rationally persuaded the trial court that appellants also fraudulently concealed the truth from Lourdes. Appellants’ misconduct might have convinced the judge that just as appellants provided the court with false information, they also provided Lourdes with false information concerning the nature of the will; that just as appellants withheld bank records, they likewise withheld the will from Lourdes; and that just as Ana acted with “guile and artifice” in pretending not to understand the litigation process in order to obstruct it, she acted with a similar intent in pretending not to understand her responsibilities under Felipe’s estate plan. Under this view, appellants’ misconduct could have convinced the trial court that appellants fraudulently concealed the truth from Lourdes and, therefore, that appellants’ limitations defense lacked merit. 

The court of appeals held that the trial court did not abuse its discretion and overruled the issue raised by appellants on appeal. The trial court’s judgment was affirmed.

The Texas Citizens Participation Act (TCPA), our state’s version of an anti-SLAPP (Strategic Lawsuits Against Public Participation) statute has been amended in an attempt to narrow its scope. It was originally enacted to protect free speech such as a Facebook posting by a concerned citizen about a company polluting the environment, which might trigger the filing of a lawsuit by the polluter to silence the citizen expressing their concerns. In that situation, the TCPA provided for a procedure to request the court to dismiss the lawsuit in its early stages, limit the defense costs to the citizen and provide for the citizen to recover attorney fees.

Unfortunately, due to the vague wording of the TCPA as originally enacted, it was being applied to causes of action in ways never intended by the Act. For example it has been applied to causes of action involving theft of trade secrets and violations of employment non-compete agreements.

Thus, effective as of September 1, 2019 the statute has been amended in an attempt to narrow its scope. Key amendments to the statute include:

  • Clarification that the Act does not apply to arbitration proceedings.
  • Modification of the definition of the terms “exercise of the right of association” to mean “to join together to collectively express, promote, pursue, or defend common interests relating to a governmental proceeding or a matter of public concern.”
  • Modification of the definition for the terms “matter of public concern” to mean “ a statement or activity regarding (a) public official, public figure, or other person who has drawn substantial public attention due to the person’s official acts, theme, notoriety, or celebrity; (b) a matter of political, social, or other interest to the community; or (C) a subject of concern to the public.”
  • Requirement that the movant provide written notice of the date and time of the TCPA hearing not later than 21 days before the date of the dismissal hearing.
  • Requirement that the respondent file a response to the motion no later than 7 days before the date of the dismissal hearing.
  • Making a court award of sanctions discretionary rather than mandatory.
  • Expanding the list of specified claims excluded from the Act to include actions for misappropriation of trade secrets, enforcement of covenants not to compete, Deceptive Trade Practices Act violations, and common law fraud.

Hopefully, the courts will find that the TCPA only applies to the type of protected free speech to which it was intended to apply. Only time will tell how the courts will interpret the amendments. Stay tuned for further developments.

It can be tricky to preserve your rights to recover damages for breach of warranty involving goods, including expensive commercial equipment, as exemplified in a recent Houston Court of Appeals case. Equistar Chemicals, LP v. ClydeUnion DB, Ltd., 579 S.W.3d 505, 509 (Tex. App.—Houston [14th Dist.] 2019, pet. filed).

In this case, Equistar Chemicals, LP purchased pumps from ClydeUnion DB, Limited used for transporting ethane from one location to another. However, the pumps were defective and Equistar eventually had them repaired by another company. Equistar sued ClydeUnion for breach of warranty and ClydeUnion counter-sued for Equistar’s failure to pay the full purchase price for the pumps.  “The jury awarded Equistar $391,694 in damages on the breach of warranty claim. The jury also found that Equistar failed to comply with the agreement to pay the full price for the pumps, and the jury awarded ClydeUnion $150,781.06 for the breach of contract claim. After considering the parties’ post-verdict motions, the trial court rendered a judgment for ClydeUnion in the amount of $150,781.06.” Id at 510. Apparently, the reason the trial court awarded this amount to ClydeUnion was because the jury found that Equistar failed to give ClydeUnion a reasonable opportunity to cure the breaches of warranties, and thus, the trial court found that Equistar was barred from recovering damages from ClydeUnion.

The issues on appeal included whether the expert testimony presented by ClydeUnion was sufficient to limit Equistar’s damages for lost profits, whether Equistar was required to give ClydeUnion the opportunity to cure in order to recover damages for breach of warranty, and the amount  which ClydeUnion was entitled to recover as an offset for its litigation costs.

The court of appeals found that the testimony from ClydeUnion’s damages expert rebutting the testimony from Equistar’s damages expert was sufficiently reliable for the jury to consider in determining the amount of lost profits sustained by Equistar.

In regard to whether Equistar was required to give ClydeUnion a reasonable opportunity to cure the defective pumps, the court of appeals  found that this was not required. This dispute was governed by the Uniform Commercial Code (UCC). When a buyer such as Equistar accepts noncomforming goods, the buyer only has to give the seller notice within a reasonable time after the defects are discovered. According to the court of appeals, the purpose of the notice is to open the door for settlement negotiations. Equistar timely notified ClydeUnion of the defects and did not have to give ClydeUnion the opportunity to cure.

Lastly in determining the amount of litigation costs that ClydeUnion was entitled to recover, the Court discussed Chapter 42 of the Texas Civil Practice  & Remedies Code. If a defendant makes a settlement offer under this statute and the ultimate award by the fact-finder at trial is less than 80% of the rejected offer, then the defendant is entitled to recover its litigation costs including attorney fees up to the total amount of plaintiff’s recovery. ClydeUnion apparently made an offer of settlement under the statute entitling it to recover litigation costs from Equistar. The court of appeals found that the statute limits the defendant’s recovery of litigation costs to plaintiff’s net recovery from the defendant, before making adjustments for defendant’s litigation costs. Since ClydeUnion’s litigation costs exceeded Equistar’s net recovery, then neither party was entitled to recover anything from the other.

In conclusion, this appears to be a case where there were no winners. Reading between the lines, Equistar had an opportunity to settle for terms that would have been more favorable than the take nothing judgment rendered and ClydeUnion incurred attorney fees and other litigation costs that greatly exceeded the amount it was owed for the equipment.

The El Paso Court of Appeals has held that the project manager of a commercial construction project was not liable for the injuries sustained by another contractor’s employee. Diaz v. R & A Consultants, 579 S.W.3d 460, 464 (Tex. App.—El Paso 2019, no pet. h.).

In this construction accident case, the court was asked to decide, in essence, whether one contractor owed a duty to another contractor’s employes. The construction project involved the abatement of asbestos and the injured employee worked for the asbestos abatement contractor. The project manager who the injured employee sued had been hired by the owner of the project to provide project design and air monitoring services. During the course of performing his work, the injured employee fell approximately 17’ to the ground sustaining serious injuries. He alleged that his injuries resulted from an inadequate fall protection system.

The Court stated that, as a general rule, the project manager, like a general contractor, “does not owe a duty to ensure that an independent contractor performs its work in a safe manner.” Exceptions to this rule include when a general contractor retains some control over how the independent contractor performs his work. In that instance, the general contractor must exercise that control in a reasonable manner. Id at 466.

“Traditionally, a party can prove the right to control in two ways: (1) by evidence of a contractual agreement that explicitly assigns a right to control or (2) in the absence of such a contractual agreement, by evidence of the actual exercise of control.” Id. at 467.

There were no contractual obligations that gave the project manager control over the other contractor’s fall protection system. Further, the  project manager did not exercise any control over the alleged injury causing event — the fall projection system. Thus, the project manager did not owe a duty to ensure that an adequate fall protection system was provided to the independent contractor’s injured employee and therefore was not liable for the injuries. 

The San Antonio Court of Appeals recently held that an automobile insurer can be held liable to its policyholder for attorney fees and extracontractual damages if it breaches its duty of good faith in failing to reasonably investigate or timely pay an uninsured motorist claim. State Farm Mut. Auto. Ass’n v. Cook, 04-18-00729-CV, 2019 WL 4453763 (Tex. App.—San Antonio Sept. 18, 2019, no pet. h.).

In Texas, an automobile insurance carrier must offer a policyholder uninsured/underinsured motorist (UM) coverage unless the policyholder rejects this coverage in writing. Let’s face it, all too often there are drivers operating vehicles who either have no or insufficient liability insurance coverage to pay all the damages they negligently cause to others. That’s where UM coverage comes into play. If you are injured in a car accident caused by a negligent driver who has insufficient liability insurance coverage, then your UM coverage will fill in the gap by covering damages you sustain in excess of the liability insurance policy limits.

So, assume you are injured in a car accident caused by a negligent driver who only has minimal liability coverage limits of $30,000. You need surgery and sustain a total of $100,000 in damages. Assume further that you have $100,000 in UM coverage for bodily injury. In that event, the liability insurance carrier should pay you the $30,000 in liability insurance coverage and your UM motorist carrier should pay you $70,000 in underinsured motorist proceeds, so that your total recovery is $100,000.

But when is your UM insurer contractually required to pay you the UM proceeds? The Texas Supreme Court has held that the UM carrier has no contractual duty to pay these proceeds to you until you go to court and get a judgment establishing the liability and underinsured status of the driver at fault. See Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006). The result of this decision is that you are not entitled to recover attorney fees from the UM insurer under a breach of contract theory, unless the insurer fails to pay the amounts owed to you within 30 days of obtaining the judgment. This is all that the insurer is required to do under the terms of the automobile insurance policy. It makes one wonder whether you should even bother with obtaining this type of coverage. After all, isn’t the point of obtaining insurance to be able to responsibly and timely cover your losses in the event of an unexpected event?

However, the recent decision of the  San Antonio Court of Appeals provides some relief for the insured consumer. In the Cook decision, the Court essentially held that a UM insurer has a statutory and common law duty of good faith to reasonably investigate and timely pay a UM claim once the insurer’s liability becomes reasonably clear. Thus, if a UM carrier withholds payment of UM proceeds until a judgment is obtained, even though a reasonably investigation by the insurer would have shown that the UM insurer’s liability for payment of the UM proceeds was reasonably clear, the insured consumer can hold the insurer accountable for attorney fees and extra-contractual damages.

Introduction. In Ivy v. Garcia, Buyer sued Sellers for fraudulently inducing Buyer into entering a contract and buying Sellers’ defective home. 03-18-00545-CV, 2019 WL 3756483 (Tex. App.—Austin Aug. 9, 2019, no pet. h.). Sellers filed a motion for summary judgment on the basis that the as-is clause in the purchase contact barred Buyer’s claims as a matter of law. The trial court granted the motion for summary judgment and the Austin Court of Appeals reversed.

Background. On July 26, 2015, Buyer entered into a purchase agreement to buy Sellers’ home using a standard contract promulgated by the Texas Real Estate Commission. The contract contained a clause that the Buyer accepted the home “As Is” defined as “the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract.”

On August 17, 2017, two years after purchasing the house, Buyer sued Sellers alleging Sellers failed to disclose defects in the home. Buyer alleged causes of action including for deceptive trade and fraudulent inducement to enter a contract. Sellers stated in the disclosure notice that they were not aware of any fires. As part of the Buyer’s response to the Seller’s motion for summary judgment, Buyer attached a report from the local fire department report documenting that the home had been struck by lightning and that it caused a small fire in the home.

Court’s holding. The Austin Court of Appeals found that under Texas law, a buyer is not bound to an as-is agreement, “if the agreement is a product of a fraudulent representation or concealment of information by the seller.” Prudential Ins. Co. of Am. v. Jefferson Associates, Ltd., 896 S.W.2d 156, 162 (Tex. 1995). The court went onto hold that the report presented by the Buyer from the local fire department presented an issue of fact as to the Buyer’s fraudulent inducement claim. The Court of Appeals reversed the Trial Court’s dismissal of Buyer’s claims and remanded the case to the Trial Court for further proceedings.

Lessons learned. A seller in a real estate transaction should ensure that the seller makes full and adequate disclosures in any required disclosure statement. The seller’s attorney will also want to make sure that an “as-is” provision in the sale agreement is coupled with a disclaimer clause stating that the buyer is not relying upon any representations not included in the sale agreement including as to the condition of the property being sold. This should help the seller to defeat a fraudulent inducement claim by a buyer attempting to avoid enforcement of an “as-is” clause.

Introduction. The failure of the plaintiff in a construction lawsuit to properly address the unique procedural and evidentiary issues involved may result in the dismissal of the plaintiff’s claims. This is exactly what happened to the plaintiff in a recent case filed in San Antonio, Texas against an architectural firm when the plaintiff failed to attach an affidavit known as a certificate of merit to the lawsuit. Studio E Architecture and Interiors, Inc., Appellant v. Emily Lehmberg, 04-19-00026-CV, 2019 WL 3229194, at *1 (Tex. App.—San Antonio Apr. 17, 2019, no pet.).

Background. The Plaintiff, Emily Lehmberg, filed a lawsuit including claims for fraud and deceptive trade against two licensed architects, the Escamillas, and their architectural firm, Studio E, who were involved in the administration of the construction project in dispute. Lehmberg did not attach to her lawsuit a certificate of merit from a qualified expert in support of these claims.

The record from the opinion states:

“In 2012, appellee Emily Lehmberg (“Lehmberg”) hired Projekt Construction, Inc. (“Projekt”) to perform construction on residential real property located in San Antonio. Lehmberg alleges Joaquin and Aimee Escamilla (“the Escamillas”) initially represented that Projekt was a partnership between themselves and another individual. Projekt shared office space with Studio E—a separate company also owned by the Escamillas. Lehmberg contends Projekt’s construction permit for the property was revoked, and the Escamillas subsequently began representing that the construction project belonged to Studio E. According to Lehmberg’s pleading, Studio E was “the de facto General Contractor at the Property” and ultimately “conducted construction management and oversaw the project at the Property.” Id. at p. 1.

In her lawsuit filed in 2016, Lehmberg alleged that “the Escamillas as representatives of Studio E, “manipulated, forged, and double paid on multiple invoices which greatly increased the cost of construction.” Against Studio E specifically, Lehmberg asserted claims for violations of the Texas Deceptive Trade Practices Act (DTPA), common law fraud, money had and received, and breach of fiduciary duty. Lehmberg claimed Studio E and the other defendants “committed fraud by making material misrepresentations regarding pricing and invoicing,” “purposefully manipulated documents to hide their wrongful payments to contractors, double payments to contractors, and payments to themselves,” and “misappropriated and misapplied proceeds from [Lehmberg’s] construction trust fund.”” Id. at p. 1.

Plaintiff denied that she was asserting any claims arising from these defendant’s providing professional architectural services.

Studio E filed a motion to dismiss the claims against it on the grounds that Lehmberg failed to comply with the Texas Civil Practices & Remedies § 150.002 (the Certificate of Merit Statute) by failing to attach a certificate of merit  to the lawsuit. The trial court denied the motion to dismiss. Unfortunately for Lehmberg on appeal, the San Antonio Court of Appeals reversed the trial court’s decision and found that the claims against Studio E should be dismissed.

The Court of Appeals found that even a claim for an intentional tort such as fraud alleged against design professionals may fall within the scope of the Certificate of Merit Statute. The court stated:

Here, too, by alleging Studio E “conducted construction management and oversaw the project at the Property,” Lehmberg alleges conduct involving “observing the construction, modification, or alteration of work to evaluate conformance with architectural plans and specifications.” See TEX. OCC. CODE ANN. § 1051.001(7)(C). And, while Lehmberg does not assert Studio E was negligent in doing so, Studio E’s alleged misconduct necessarily took place in the context of that activity.

Id. at p. 4.

The court went on to conclude that Lehmberg was seeking damages “arising out of the provision of professional services by a licensed or registered professional.” Thus, Lehmberg’s claims against Studio E were covered by the Certificate of Merit Statute requiring Lehmberg to attach a certificate of merit from a qualified expert to her lawsuit. Since, Lehmerberg failed to do so, the trial court erred in not dismissing the claims against Studio E. The Court of Appeals reversed the trial court’s order and remanded the case to the trial court to determine whether the dismissal should be with or without prejudice to refiling.

Conclusion. Lately, there have been a series of Texas cases dismissing the plaintiff’s claims against architects and engineers because the plaintiff failed to comply with the Certificate of Merit Statute. See previous blog article on this topic. The bottom line is that a plaintiff pursuing construction-related claims against an architect or engineer should retain an expert prior to filing suit who can provide the necessary affidavit in support of the lawsuit. This will not only help ensure that the lawsuit will withstand a motion to dismiss but it will also provide necessary expert testimony to support the claims for the duration of the lawsuit.  Alternatively, if a competent expert determines that the design professionals were not at fault, this will save the plaintiff and the potential defendants the costs of fighting a meritless lawsuit.

Introduction. The Texas Supreme Court reversed a judgment rendered against IBM originally in the amount of $21 million because Lufkin Industries disclaimed its reliance upon IBM’s misrepresentations in the written contract between the parties. Int’l Bus. Machines Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224 (Tex. 2019), reh’g denied (May 31, 2019).

Background. Lufkin manufactures machinery and equipment used in the energy industry. It needed to upgrade its business-operations computer-software system. After several meetings with IBM representatives, Lufkin purchased a new system from IBM. Lufkin apparently met with IBM representatives over a period of months to discuss Lufkin’s needs and the appropriate computer software system to meet those needs. After multiple meetings and discussions with IBM representatives, Lufkin signed a contract with IBM–the “Statement of Work” (SOW)–regarding the purchase and implementation of the new system. The SOW contained a disclaimer clause stating that Lufkin was not relying upon any representations by IBM not contained in the SOW.

Allegedly, the implementation of the system did not go well and the system failed numerous tests. Lufkin contended that IBM made numerous representations that the system would work and IBM would fix the problems. However,  when the system went live, it failed and “crippled Lufkin’s business.” Id. at p. 227.

Lufkin filed suit against IBM including for fraud and breach of contract. The jury found that IBM committed fraud resulting in $21million in damages to Lufkin. The jury also found that IBM breached its contract with Lufkin but oddly that Lufkin sustained no damages as a result of the breach. The trial court entered a judgment for $21 million based upon the jury’s fraud findings. The Court of appeals upheld the portion of the judgment based upon fraudulent inducement but suggested a $3.5 million reduction in the damages awarded and Lufkin agreed to the reduction. IBM filed a petition for writ of review with the Texas Supreme Court.

Court’s holding. The Texas Supreme Court discussed the elements of a fraudulent inducement claim. One of the elements that must be proven is that the plaintiff relied upon the fraudulent misrepresentations. In that regard, the Court held that the following disclaimer clause in the SOW (contract) barred Lufkin from recovering on its fraud claim:

In entering into this SOW, Lufkin Industries is not relying upon any representation made by or on behalf of IBM that is not specified in the Agreement or this SOW, including, without limitation, the actual or estimated completion date, amount of hours to provide any of the Services, charges to be paid, or the results of any of the Services to be provided under this SOW. This SOW, its Appendices, and the Agreement represent the entire agreement between the parties regarding the subject matter and replace any prior oral or written communications.

Id.at p. 228.

In reaching its decision the court stated:

We have held that a merger clause, standing alone, does not prevent a party from suing for fraudulent inducement. [citation omitted] And similarly, a clause that merely recites that the parties have not made any representations other than those contained within the written contract is not effective to bar a fraudulent-inducement claim…But a clause that clearly and unequivocally expresses the party’s intent to disclaim reliance on the specific misrepresentations at issue can preclude a fraudulent-inducement claim.  [Citations omitted]. Not every such disclaimer is effective, and courts “must always examine the contract itself and the totality of the surrounding circumstances when determining if a waiver-of-reliance provision is binding.” [citation omitted]. Specifically, courts must consider such factors as whether (1) the terms of the contract were negotiated, rather than boilerplate, and during negotiations the parties specifically discussed the issue which has become the topic of the subsequent dispute; (2) the complaining party was represented by counsel; (3) the parties dealt with each other at arm’s length; (4) the parties were knowledgeable in business matters; and (5) the release language was clear.

Int’l Bus. Machines Corp. v. Lufkin Indus., LLC, supra, at p. 229.

The court found that the disclaimer clause in the SOW barred Lufkin from recovering on its fraud claims. This was true even though some of the alleged misrepresentations were made after the SOW was initially signed. The parties signed a series of subsequent amendments to the project after signing the SOW and each amendment incorporated the terms of the SOW including the disclaimer. Thus, the alleged post-contractual misrepresentations were also barred by the disclaimer.

However, all may not be lost for Lufkin. The court found that, contrary to the jury’s findings that IBM’s breach of contract resulted in zero damages to Lufkin, the evidence conclusively established that IBM’s breach caused some damages to Lufkin. Thus, the court remanded the case back to the trial court for a new trial on the breach of contract claim. Stay tuned.

Lessons learned. The Texas Supreme Court has handed down a series of recent decisions finding that contractual provisions barred the plaintiffs’ fraudulent inducement claims. When reviewing and revising a contract, the buyer should beware of clauses that bar the buyer from recovery for the seller’s fraud or that limit the types of damages that the buyer can recover. Further, a buyer who has sustained damages as a result of misrepresentations and breach of contract by the seller, should consider whether it might be strategically advantageous to forego suing for fraud and only sue for breach of contract, especially if the underlying contract contains language that would bar the seller from recovering for fraud. This will make a simpler case for the jury to decide, avoid the situation where the jury becomes confused in awarding damages for multiple theories of liability, and increase the odds that a judgment favorable to the plaintiff will be affirmed on appeal.

In Texas, handwritten wills are enforceable if they meet certain criteria. To be valid, a holographic will “must be signed by the testator and wholly in the testator’s handwriting.” Ajudani v. Walker, 177 S.W.3d 415, 418 (Tex. App.—Houston [1st Dist.] 2005, no pet.). Of course, many interesting issues arise in determining whether a handwritten instrument is truly a valid will. For example, in the recent case of Estate of Silverman of the Houston Court of Appeals held that fact issues existed as to whether the handwritten instrument was in fact a will disposing of the decedent’s property after death. 14-18-00256-CV, 2019 WL 2352457 (Tex. App.—Houston [14th Dist.] June 4, 2019, no pet. h.). As a result, the Court reversed the trial court’s summary judgment rendered in favor of the contestants of the hand-written will.

In the Estate of Silverman, “Seth Warren Silverman wrote the following on a piece of paper, entirely in his handwriting on October 26, 2015:

10/26/15

Karen Grenrood is my executor, administrator, [and] has all legal rights to my estate in the case of my untimely or timely death.

Very truly yours,

[signature]

Jerry VanDaveer [witness]

Karen Grenrood [witness]”

The contestants of the handwritten instrument filed a motion for summary judgment on the grounds that the instrument did not convey property but merely appointed Grenrood as executor. Therefore, it lacked testamentary intent and should not be admitted as a will to probate.

The court held that fact issues existed as to whether this was in fact a valid will disposing of the Decedent’s property after death. On one hand, a reasonable interpretation of the handwritten instrument is that it merely appointed Grenrood to be the executor of Silverman’s estate but did not make any disposition of Silverman’s property after death. On the other hand, by stating that Greenrood has all “legal rights” to my estate, a reasonable interpretation is that Silverman intended to give all of his property to Greenrood. This ambiguity creates an issue of fact for the court or jury to decide.

(Note: the court also indicated that even if the instrument did not make a disposition of property, it still would be improper for the court to deny admitting it to probate. Since it appoints an executor, then it should be admitted for the purpose of appointing this executor to administer the estate.)

The Court reversed the trial court’s summary judgment because the contestants failed to show as a matter of law that the handwritten instrument was not a valid will entitled to admission to probate. If this case doesn’t settle, it looks like one for the jury to decide.

Introduction. Another Texas construction design defect case was recently dismissed under the Texas Certificate of Merit statute because the plaintiff failed to file a proper affidavit by a qualified design professional in support of the lawsuit. Kayne Anderson Capital Advisors, L.P. v. Hill & Frank, Inc., 570 S.W.3d 884 (Tex. App.—Houston [1st Dist.] 2018, no pet.).

Background. Kayne Anderson hired Hill & Frank to be the designer and architect on a project that included the design of a swimming pool on top of a parking garage. A dispute arose after the construction of the pool and Kayne Anderson sued Hill & Frank and the swimming pool contractor.

Kayne Anderson attached an affidavit by a licensed engineer to its lawsuit in support of its claims against Hill & Frank, a registered architectural firm, in an attempt to comply with the Texas Certificate of Merit statute. This statute requires the plaintiff “in any action or arbitration proceeding for damages arising out of the provision of professional services by a licensed or registered professional” to file with the lawsuit an affidavit by a qualified design expert. Tex. Civ. Prac. & Rem. Code (CPRC) §150.002. The statute requires that the affidavit must be by an expert who “holds the same professional license or registration as the defendant.” CPRC §150.002(a)(2).

Hill & Frank filed a motion to dismiss the lawsuit on the grounds that since the affidavit attached to the lawsuit was given by a licensed engineer rather than a licensed architect then it failed to comply with the certificate of merit statute. The trial court agreed. Since the defendant Hill Frank was a registered architectural firm, then the plaintiff Kayne Anderson had to provide an affidavit by a licensed architect. The trial court dismissed the lawsuit and the Houston Court of Appeals affirmed the decision.

Lessons learned. The plaintiff in a construction design defect case should always perform a diligent pre-suit investigation before filing suit and make sure to retain a qualified design professional expert who holds the same license as the defendant design professional. The expert will need to provide a detailed affidavit supporting the allegations against the defendant, to be filed with the lawsuit. Otherwise, the plaintiff’s lawsuit will be dismissed.