Texas Supreme Court Orders and Opinions (5/13/16)

Posted by Rich PhillipsOn May 13, 2016, the Supreme Court of Texas issued opinions in three cases, including the long-awaited school-finance opinion (No. 14-0776):No. 14-0086, Philadelphia Indemnity Insurance Co. v. White — This landlord/tenant dispute arose from damages to the apartment complex allegedly caused by a clothes dryer owned by the tenant. The agreement between the tenant and the landlord made the tenant responsible for damage resulting from any other cause not due to [the landlord’s] negligence or fault.” After a fire started in a tenant-owned clothes dryer, the jury found that the tenant was not negligent in causing the fire, but nonetheless held the tenant contractually liable under the lease agreement. On appeal, the Supreme Court was asked to decide whether this lease provision is void as against public policy embodied in the Texas Property Code and, if the provision is valid, whether the tenant is liable for damages absent a jury finding that she was negligent in causing the fire. Justice Guzman, writing for a slim majority, held that the lease provision is not void or unenforceable, largely based on Texas’s strong public policy favoring freedom of contract. The majority also held that the tenant bears the burden of proving facts to avoid liability under the contract, and could not rely on the negative finding as to her negligence to escape liability under the lease provision. Justice Boyd, joined by Justices Willett, Lehrmann, and Devine, dissented, arguing that the landlord had the burden to prove that the tenant did not cause the fire in order to recover under the terms of the lease. The dissenters, however, agreed with the majority that the lease provision is not unenforceable as a matter of law. Justice Devine filed his own dissent, arguing that a plaintiff cannot prevail on a breach of contract claim without an affirmative jury finding that the defendant breached an enforceable promise. Because there was no such finding in this case, he dissented. No. 14-0776, Morath v. The Texas Taxpayer and Student Fairness Coalition — This case is the latest round of a long-running series of cases challenging the state’s school-finance system. The majority opinion by Justice Willett is an even 100 pages long. Any attempt to summarize the Court’s reasoning would make this post too long. The Court rejected the state’s arguments that the case should be dismissed on jusiticiability, standing, and ripeness grounds. The Court reversed trial court’s findings that the funding system is constitutionally inadequate, unsuitable, and inefficient. The Court affirmed the trial court’s rejection of claims that the system is unconstitutional because of structural inefficiencies. The Court rejected claims by charter schools that funding for those schools is inadequate. The Court also reversed the trial court’s finding that the current system is an unconstitutional statewide ad valorem tax.The Court remanded the case to the trial court for a re-determination of attorneys’ fees. Finally, the Court reversed the trial court’s attempt to retain continuing jurisdiction over the case beyond the typical jurisdiction to enforce judgments.Although the Court found that the current system meets minimum constitutional requirements, the justices went out of their way to point out that the Court’s holding should not be construed as an endorsement of the system. Justice Willett opined that, “Texas’s more than five million school children deserve better than serial litigation over an increasingly Daedalean ‘system.’ They deserve transformational, top-to-bottom reforms that amount to more than Band-Aid on top of Band-Aid. They deserve a revamped, nonsclerotic system fit for the 21st century.”Justice Guzman filed a concurring opinion (joined by Justice Lehrmann), “to further emphasize that there is much more work to be done, particularly with respect to the population that represents the majority of the student base—economically disadvantaged students.” Justice Boyd also filed a concurring opinion (joined by Justices Lehrmann and Devine), in which he emphasizes that it is the Legislature’s duty to design the school-finance system and that the Court’s holding should not be read as “an expression of personal opinions on how Texas should fund and operate its public school system.”No. 14-0797, In re Phillips — In this mandamus proceeding, the Supreme Court was asked to determine whether the Comptroller has exclusive authority to determine the compensation owed to someone who was wrongfully imprisoned, or whether the Comptroller is bound by a court’s related judgment in a child-support enforcement proceeding. The relator Steven Phillips was convicted of sexual assault in 1982 but eventually proved his innocence through DNA testing of evidence that was unavailable when he was tried. After his release, he applied to the Comptroller for compensation under the Tim Cole Act, which provides compensation for the time a person is wrongfully imprisoned and for child support owed but not paid by the person, plus interest. The Comptroller calculated the amount of child support due to Phillips’s ex-wife at approximately $25,000, but the ex-wife secured a judgment from family district court that she was entitled to over $300,000 under Arkansas law. The Comptroller refused to pay more than his $25,000 estimation, and claimed exclusive authority to determine compensation under the Act. Upon review, the Court agreed with the Comptroller, holding that his authority to determine “compensation for child support arrearages” is exclusive. Thus, the Court reasoned, Phillips may owe his ex-wife over $300,000 in unpaid child support, but the State of Texas owes her only $25,000.Access the complete order list here.