Texas Supreme Court 2007 Case Notes

What Qualifies as a Rule 11 Agreement ?

Knapp Medical Center v. De La Garza, No 06-0575
(Tex. Nov. 06-0575) (per curiam)

This short per curiam opinion serves as a useful
reminder that the requisites of Rule 11 must be
complied with the assure enforceabilty. An
attorney's unilateral  "understanding" of what was
supposedly agreed to won't do - even if stated on
the record.

In an even shorter per curiam opinion, the Supreme
Court remands for retrial of attorneys' fees
following reduction of damages on appeal, as it had
done in an earlier case decided in 2006.
Chrysler-Dodge II, Inc. v. Rauschenberg, No.
06-0874 (Tex. Nov. 2, 2007)(per curiam)(remand
for determination of
attorneys fees). Under different
circumstances, one trial will do.

Another Sovereign Immunity Case Is
Remanded for Reconsideration in Light of a
Change in Law

State of Texas v. Precision Solar Controls, Inc.,
No. 06-0348 (Tex. Apr. 5, 2007)(per curiam)(prior
denial withdrawn upon motion for rehearing)

In a one-page per curiam opinion released on
Good Friday, the Supreme Court vacated the
Austin Court of Appeals' judgment and remanded
to the trial court of reconsideration in light of
changed precedent. The lower appeals court had
relied on the Supreme Court's first opinion in Reata
Construction Corp. v. City of Dallas, which the
Supreme Court later withdrew. Interestingly, the
Court had previously denied the State's petition for
review in this case.
The central holding in
Reata v. City of Dallas (Tex.
2006) ("Reata II") recognizes a governmental
entity's waiver of sovereign immunity when it
appears as a plaintiff, at least for the opposing
parties' claims that are germane to the claim the
entity seeks to recover on. Whether a public entity
can waive its immunity by other conduct is an
unresolved question likely to be revisited by the
Supremes in the near future.

May 3, 2007 - Supreme Court applies Reata
holding in case where TxDoT brought suit to collect
on construction bond. Court makes clear that a
court must both specify the claims that arise from
State's suit and limit recovery on the counterclaim
to offset.
State of Texas v. Fidelity and Deposit Co.
of Maryland, No. 04-0180 (Tex. May 4, 2007)(per


Court Grants Mandamus Relief to Enforce
Mandatory Venue Provision

In Re Texas Department of Transportation (TxDoT),
No. 06-0289 (Tex. Mar. 9, 2007)(per curiam)
venue statutes, motion to transfer venue)

March 9, 2007 - Parents brought suit against the
Department of Transportation and Gillespie County
over the drowning death of their daughter resulting
from a car accident in which the vehicle went
through a gap in the guardrail on a bridge and fell
into the water. The parents sued in Travis County
because the TxDoT has offices there, alleging its
employees negligently performed their duties there,
resulting in the defective roadway and approach to
the bridge where the accident occurred. The trial
court denied the Defendants' motion to transfer

The Supreme Court holds that venue is controlled
by the nature of the pleaded cause of action
(premise and special defect under the Texas Tort
Claims Act), and that the TTCA requires that such
claims be brought in the county in which all or a
part of the cause of action arose. The court finds
that TxDOT's employees' knowledge, decisions, or
failure to make decisions in Travis County
regarding the condition of the roadway and bridge
in Gillespie County do not allege or constitute prima
facie evidence that part of the cause of action
arose in Travis County.

The Court grants mandamus relief to give effect to
the mandatory venue provision of the TTCA.

In Re Texas Department of Transportation (TxDoT), No.
06-0289 (Tex. Mar. 9, 2007)(per curiam)(mandamus
granted to enforce mandatory venue under TTCA)

Case law terms:
venue, mandatory vs. permissive venue,
motion to transfer venue (MTV), mandamus relief,
Texas Tort Claims Act (TTCA),
premises defect vs. negligent activity  

Attorneys Fees Segregation Required, But Not
Where Counterclaim Rest On the Same
Underlying Factual Dispute

Varner v. Cardenas, No. 06-0212
(Tex. Mar. 2, 2007)(
segregation of attorney's fees)

In this appeal from a suit on a note arising from a
real estate transaction and a counterclaim by the
buyer alleging  shortfall in acreage of the property,
which also included claims against the title insurer
and its agent, that Supreme Court agreed with the
appellate court below that fee segregation as to
different parties was required, but nevertheless
corrected the judgment to exempt the fees incurred
in defending the counterclaim from the segregation

The court also uses the occasion to make clear
that post-judgment attorneys fees should be
proven up at the time of trial, rather than upon
remand from the court of appeals. It expressly
declines the invitation to "allow two trials on
attorney's fees when one will do."  

Key case cited: Tony Gullo Motors v. Chapa, No. 04-0961
(Tex. Dec. 22, 2006)(Justice Brister)(party must segregate
recoverable from unrecoverable attorney's fees in all cases)
Supreme Court Orders Arbitration,
Finding That Bank Signature Card Validly
Incorporated by Reference
Agreement to Arbitrate Under the FAA

In Re Bank One, N.A. No. 06-0093 (Tex. Feb. 23,
arbitration mandamus)

The Supreme Court uses its mandamus power
sparingly. Here it does so to give effect to the
Bank's insistence on arbitration, finding that the
arbitration clause was controlled by the Federal
Arbitration Act (FAA) and that mandamus relief was
appropriate. The arbitration agreement at issue in
this case was incorporated by reference in the
account signature card. The Supreme Court holds
that the dispute fell within the scope of the
agreement, and that the Bank did not waive its right
to arbitrate by invoking the judicial process to set
aside default judgment against it, and by moving for
a new trial. Finding that the court below abused its
discretion in denying the Bank's motion to compel
arbitration, the high court directs the trial court to
enter a new order compelling arbitration. As is
customary, writ of mandamus will only issue if the
court below fails to comply.

Key cases cited: In re Weekley Homes, L.P.,
180 S.W.3d 127 (Tex. 2005)
In re AdvancePCS Health L.P., 172 S.W.3d 603 (Tex. 2005)

Battle of the "Sovereigns" - Texas Supreme
Court Decides Whether City Can Assert
Governmental Immunity When Sued By the
State - But Not With Dissent

Galveston v. State of Texas, No. 04-0890, (Tex.
Mar. 2, 2007)
governmental entities, sovereign immunity)

March 2, 2007 - After deciding a slew of sovereign
immunity appeals just before it summer recess last
year, and overruling a decades-old precedent that
allowed individuals to sue some governmental
entities whose charter or enabling legislation gave
them the power to "sue and be sued," the Texas
Supreme Court on March 2, 2007 added a new
twist to its evolving sovereign immunity
jurisprudence by tackling a novel question: Can a
city, whose immunity to suit is itself derived from the
State, assert that immunity in the rare event where
the it is sued for money damages by the State? A
narrow majority answered in the affirmative and
dismissed the State's suit, holding that there was
no reason the Attorney General could not have
sought permission to sue from the Legislature,
which has to power to waive immunity by statute or

City of Galveston v. State of Texas,
No. 04-0890, (Tex. 2007)(majority opinion by Brister);
Dissenting opinion by Justice Willett

Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (city
immune to breach of contract suit to the extent claim not
covered by newly enacted limited statutory waiver);

Fed. Sign v. Texas S. Univ., 951 S.W.2d 401 (Tex. 1997).


Texas Supreme Court Grants Mandamus
Relief to Stop Execution of Judgment
Voided for Defect of Service

In Re Discount Rental, Inc., No. 05-0249 (Tex. Mar.
2, 2007)(per curiam)(mandamus proceeding)
default judgments, remedies, restricted appeal)

While pursuing a restricted appeal from a default
judgment entered against it, Discount Rental, Inc.
did not supersede the judgment. Plaintiffs obtained
a writ of execution. The court of appeals reversed
the default judgment before the constable sale was
to take place, and Discount Rental moved for
return of its property. The Supreme Court grants
mandamus relief to set aside the post-judgment
orders and to direct the trial court to return the
seized property. The Court holds that the trial court
did not have the power to order the sale of the
property because the underlying default judgment
was void for lack of proper service of citation, and
the debtor did not waive its rights under that statute
that allows a judgment debtor to recover property
seized, but not yet sold, when the judgment is set
aside. The Court rejects that argument that the
parties' agreement on the terms of the sale is
binding because the agreement was based on the
incorrect premise that the trial court had the
authority to order the sale.

Opinion below: Discount Rental, Inc. v. Carter, No.
10-03-00276-CV (Tex.App.- Waco May 5, 2004, pet.
denied)(mem. op.)(judgment void, defect of service)

Key case: Smith v. Commercial Equip. Leasing Co., 678
S.W.2d 917 (Tex. 1984)(default judgment void for want of
proper service)

Restricted appeal, default judgment, insufficient
defective service of process, execution of judgment, waiver
of statutory rights, contractual waiver


Supreme Court Sides with Officer in Police
Chase Case Leading to Injury of Bystander

City of San Antonio v. Ytuarte, No. 05-0991
(Tex. May 4, 2007)(per curiam)(official immunity)

In this personal injury suit resulting from a car
crash caused by a fleeing suspect, the Supreme
Court disagrees with the court of appeals in the
review of the city's summary judgment evidence
regarding the good faith element of the officer's
official immunity defense, and renders judgment
for the defendant officer.

Supreme Court Reverses Dismissal of
Pro-Se Appeal For Failure to Pay Filing Fee

Hood v. Wal-Mart Stores, Inc.
(Tex. Feb. 23, 2007)(per curiam)

Pro se litigant in suit against retailer filed
affidavit of indigence within ten days granted by
court of appeals to pay the filing fee. Court of
Appeals did not reach merits of appeal, but
instead dismissed appeal for want of
prosecution. Supreme Court holds that pro se
appellant met filing fee requirement by filing
affidavit of indigence to which a contest was not
sustained. In a per curiam opinion the Supreme
Court reverses the Fifth Court of Appeals and
remands for further proceedings.

Key cases:
Higgins v. Randall Sheriff's Office,
193 S.W.3d 898 (Tex. 2006)

Terms: pro se suit, pro se appeal, filing fee,
affidavit of indigence

Supreme Court Holds That Court of Appeals
Granted More Relief Than Requested

Candelario Ontiveros v. Juan Flores,
No. 06-0607 (Tex. Mar. 2, 2007)(per curiam)

In this appeal of a summary judgment, the
Supreme Court takes issue with the Court of
Appeals' reversal as to all causes of action on
which the trial court granted judgment for the
Defendants. Plaintiff had not complained about
the trial court's summary judgment on all of his
claims in the court of appeals, and thus waived
error regarding them. In a brief per curiam
opinion, the high court reduces the scope of
relief obtained on appeal, and remands for
further proceedings on those claims on which
the Thirteenth Court of Appeal properly
reversed the summary judgment.

Terms: appellate procedure, waiver of error on
appeal, scope of relief on appeal

Texas Supreme Court Decides Two More
Firefighter Appeals

March 9, 2007 - Supreme Court hands down
two more opinions in appeals from
suits by city
fire fighters over compensation. The unifying
theme in these cases is whether cities are
immune from such suits.

City of Dallas v. Dora Saucedo-Falls, et al.,
No. 05-0973 (Tex. Mar. 9, 2007)(per curiam)
City of Sweetwater, Texas v. Waddell, et al,
No. 05-1033 (Tex. Mar. 9, 2007)(per curiam)

City of Dallas v. Saucedo-Falls, the City had
asserted a counterclaim for declaratory
judgment and attorneys fees against the
plaintiffs' suit complaining about denial of a pay
raise, but had later filed a plea to the jurisdiction,
and sought dismissal. Plaintiffs successfully
argued in the trial court and on appeal that the
city had waived its immunity by its conduct. In
deciding the City's interlocutory appeal in a per
curiam opinion, the Supreme Court did not
announce any new precedent, but remanded the
case to the trial court to allow the plaintiffs to
argue any viable immunity waiver in the wake of
the Legislature's enactment of a limited statutory
waiver of local government immunity, which
occurred while the case was pending, and its
recent sovereign immunity decisions, specifically
its holdings in
Tooke v. Mexia, and its second
opinion in an earlier case involving the City of
Dallas, in which it found that the city had waived
immunity by filing a claim for affirmative relief of
its own. See
Reata Constr. Corp. v. City of
Dallas, 197 S.W.3d 371 (Tex. 2006); Tooke v.
City of Mexia, 197 S.W.3d 325, 343 (Tex. 2006);
Loc. Gov't Code §§271.151-.160.

In the Sweetwater case, which was factually
similar, the trial court granted the city's
jurisdictional plea to the firefighters' claims and
dismissed their suit with prejudice. On appeal,
the plaintiffs were successful in arguing that the
"sue and be sued" language in the city' charter
waived its immunity. [The Eastland Court of
appeals also found that the Sweetwater
Professional Fire Assn. had standing to sue in
addition to the named plaintiff.] The Supreme
Court, however, had reversed long-standing
precedent for that proposition when it decided
Tooke v. City of Mexia and a batch of companion
cases at the end of June last year. Following its
newly established precedent, the Court thus
reversed the Eastland Court of Appeal's
judgment and sent the case back to the trial
court to determine whether the plaintiffs could
proceed under the newly enacted legislation
authorizing suits against local governments
subject to certain limitations.

Cases cited: Tex. Educ. Agency v. Leeper, 893 S.W.2d
432, 446 (Tex.1994) (holding, in an action construing the
compulsory school attendance law, that the Declaratory
Judgments Act, by authorizing actions to construe
legislative enactments and attorney fee awards,
"necessarily waives governmental immunity for such
City of Irving v. Inform Constr., Inc., 201 S.W.3d 693 (Tex.
Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006)
Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 408 n.1) (Tex.
1997)(waiver by conduct)
Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371
(Tex. 2006)


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