Texas Supreme Court Orders and Opinions 6/12/15 (Part 1)

Posted by Rich PhillipsIn its weekly order list for June 12, 2015, the Supreme Court of Texas issued nine opinions and granted four petitions for review. I will cover four of the opinions and the four granted petitions in this post. Scott will cover the other five opinions in another post.OpinionsNo. 13-0047, Dacus v. Parker – Several voters in the City of Houston challenged the adequacy of ballot language regarding a proposition to amend the City’s charter to allow the City to create a drainage utility and impose drainage fees on the owners of benefited properties. The challengers contended that the ballot language did not adequately describe the proposed charter amendment because it did not make clear that charges would be imposed on landowners. In an opinion by Justice Devine, the Court clarified the standard for ballot language. The Court held that the ability to impose drainage charges was a “chief” feature of the measure, and therefore should have been included in the ballot language. In so holding, the Court disapproved cases that have held that ballot language is adequate if it merely gives enough information to distinguish the proposition from others on the ballot. Justice Guzman filed a short concurrence (joined by Justice Willett), in which she emphasized the importance of ensuring that ballot measures do not mislead voters, particularly when revenue-raising measures are at issue.No. 13-0596, Kachina Pipeline Co. v. Lillis – This case arose from a contract between a natural gas producer and a pipeline operator. The operator argued that the contract allowed it to deduct the cost of compression after delivery to the operator from its payments to the producer and that the contract gave the operator the option to extend the agreement for a five-year term. In an opinion by Justice Brown (joined by Justices Johnson, Willett, Guzman, Lehrmann, and Boyd), the Court held that the agreement did not allow deduction of compression costs incurred after the gas was transferred to the pipeline operator. The Court also held that the language of the agreement did not allow the operator to renew the agreement for a five-year term. Chief Justice Hecht (joined by Justices Green and Devine) concurred in part and dissented in part. The dissenters agreed that the operator could not renew the contract for a new five-year term. But they would have held that the operator was permitted to deduct the compression costs from payments to the producer.No. 13-0597, Plains Exploration & Production Co. v. Torch Energy Advisors, Inc. – This is another oil-and-gas contract construction case, but it is complicated by the “complex regulatory regime governing exploration and development of oil and gas reserves in lands under federal waters.” Torch sold its interest in an undeveloped field in federal waters off the coast of California. The conveyance excluded certain tangible and non-tangible assets. More than 10 years later, a federal court held that the leases had been repudiated because a law passed before the conveyance by Torch had later been interpreted to prevent development in the field. The federal court ordered that the then-current owner of the leases was entitled to restitution of the lease-bonus payments that Torch’s predecessor had paid when the leases were signed. Torch then sued, claiming that ownership of the restitution payments was excluded from the conveyance. In an opinion by Justice Guzman (joined by Chief Justice Hecht, and Justices Green, Willett, Lerhmann, Boyd, Devine, and Brown), the Court held that the retained asset provision was unambiguous and did not cover the restitution payments. Justice Johnson dissented and would have held that the agreement is ambiguous and remanded to the trial court for the jury to decide whether it included the restitution payments.No. 14-0067, Zorilla v. Aypco Construction II, Ltd. – The primary issue in this residential-construction dispute is whether the statutory cap on exemplary damages must be pleaded as an affirmative defense or avoidance under Texas Rule of Civil Procedure 94. The courts of appeals have been split on the question. In a unanimous opinion by Justice Guzman, the Court held that the cap is not an affirmative defense or avoidance and that it need not be pleaded to apply. The Court examined the historical meaning of the term “plea of avoidance” and concluded that the application of the statutory cap is not an avoidance. The Court reasoned that the cap automatically applies when invoked, without the need of any additional evidence. Therefore, even though the defendant did not assert applicability of the cap until her motion for new trial, the Court found that the cap was not waived.Petitions GrantedNo. 14-0193, Caffe Ribs, Inc. v. State – In this condemnation suit, the issue is whether the trial court properly allowed evidence of environmental remediation issues that the State argued affected the value of the property while excluding evidence that the issues had not been addressed because of the State’s project. No. 14-0362, Christus Health Gulf Coast v. Carswell – This case arises from a dispute between a hospital and the survivors of a patient who died at the hospital. The issue is whether a claim that the hospital fraudulently obtained consent from the decedent’s widow for an autopsy. The hospital contends that the fraud claim is an improperly recast healthcare-liability claim that is governed by the Texas Medical Liability Act. In a cross-petition for review, the decedent’s survivors complain about the court of appeals’ reversal of a monetary sanction against the hospital for spoliation of evidence and about the calculation of prejudgment interest.No. 14-0534, Railroad Commission of Texas v. Gulf Energy Exploration Corp. – After obtaining legislative consent to sue, Gulf Energy obtained a $2.5 million judgment against the State arising from the plugging of an offshore well. The State complains that the trial court refused to submit a jury question about whether the State was acting in good faith when it plugged the well. The court of appeals found that this complaint was waived because it did not request a transcript of the informal charge conference in which the trial court refused the submission. The court of appeals also found that the State waived other complaints about the charge. Interestingly, the Court initially denied the petition for review, but then granted rehearing and requested briefs on the merits.No. 14-0593, Hebner v. Reddy – This healthcare-liability case addresses yet another aspect of the expert-report requirement. The plaintiffs served an expert report with their presuit notice required by Chapter 74. When they filed suit and served expert reports again, they claim that they inadvertently attached the wrong expert report. The trial court denied the defendants’ motion to dismiss and the court of appeals reversed. The issue is whether the presuit delivery of the correct report can excuse the failure to serve the correct report after suit was filed.