Valueless damage evidence

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In Pike v. Texas EMC Mangagment LLC,”‘Value’ was defined in the jury charge as ‘”Market Value,”’ the amount that would be paid in cash by a willing buyer who desires to buy, but is not required to buy, to a willing seller who desires to sell, but is under no necessity of selling.’”

Expert testimony sought to establish a $4.1 million value for the relevant plant and equipment, which the Texas Supreme Court rejected for three reasons:

“First, … [e]vidence of the purchase price of the Partnership’s property is insufficient under that measure because it does not establish the fair market value of the property at a different time.”

The Court also rejected efforts to corroborate the expert’s testimony with lay-opinion testimony by an owner, because that testimony was based on book rather than actual value. Foreclosure-sale price was similarly irrelevant. No. 17-0557 (June 19, 2020).

“Second, …[c]ourts employing an actual-value measure have held that ‘[f]rom that starting point, adjustments are made for wear and tear, depreciation, and other pertinent factors.’ Having examined the record, we disagree with the plaintiffs that [the expert] took anything other than purchase price—and a 20% escalation factor—into account in opining about the value of the plant and equipment.”

“Third, [the expert] did not attempt to tie the value of the plant to the market value of the
Partnership, which was the only measure of damages in the jury charge. He did not address whether any debt encumbered the plant, for example, or otherwise testify regarding how loss of the plant and equipment impacted the value of the Partnership as a whole.” (emphasis added, citations omitted).

The Court also rejected efforts to corroborate the expert’s testimony with lay-opinion testimony by an owner, because that testimony was based on book rather than actual value. Foreclosure-sale price was similarly irrelevant. No. 17-0557 (June 19, 2020).

Title?

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“According to the special warranty clause at issue here, Cochran assumed the risk for a failure or defect of title that resulted from an individual claiming the property by, through, and under Cochran, but not otherwise. So while we recognize that the covenant of seisin and a warranty of title are conceptually distinct obligations, at bottom the deed’s language expressly limits liability for a failure of title, regardless of whether that failure of title falls within the scope of the covenant of seisin. Thus, reading the deed as a whole, we hold that it contains a qualifying expression that limits the scope of Cochran’s liability for a failure of title—including in the form of a breach of the covenant of seisin.” Chicago Title v. Cochrane Investments, No. 18-0676 (June 19, 2020).

Statutes and Ranches

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The question in Waak v. Amparo was whether the Texas Farm Liability Act applies to ranch hands. The 6-Justice majority opinion, written by Chief Justice Hecht, reviewed the history of the Act and concluded that it did not:

“Ranch hands do not work as amateurs or professionals, they certainly do not pay to do their work, and they ordinarily do not work for free. Ranch hands have none of the characteristics the Farm Animal Act lists for ‘participants’. Ranchers, as such, are not farm animal activity organizers, facilities providers, trainers, equipment renters, and showmen. They have none of the qualities the Act lists for those it protects. Thus, we conclude that the Farm Animal Act does not cover ranchers and ranch hands . . .“

Justice Blacklock, joined by Justice Boyd, dissented: “If the Legislature wants the Act to have a narrower scope, it can amend the law. We should not attempt to remedy a perceived disconnect between a broadly worded statute and the narrow concerns presumed to have motivated its enactment. That is a legislative function. We should apply the words of the law exactly as written.” No. 19-0167 (June 12, 2020). Justice Bland did not participate in the case.

Separate Agreements

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Rieder v. Woods, a case about an unusual aspect of enforcing forum-selection clauses, also addresses the basic contract-law issue of whether two documents should be construed together. Here, the supreme court found that the two relevant documents should not be read together, analyzing: (1) “the terms and obligations of the agreements,” (2) the merger clauses in the two agreements, (3) the “well-established legal principle that limited liability companies and their obligations are legally distinct from their members and manager,” and (4) the role of the “board exculpation” provision in one of the agreements. No. 19-0077 (Jan. 28, 2020).

A charge case to know . . .

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It’s not a Texas Supreme Court case, but Title Source Inc. v. HouseCanary Inc. is a jury charge case worth reviewing. In it, the San Antonio Court of Appeals reversed a $700+ million judgment based in part on a classic Casteel issue. In reviewing the jury instruction about the plaintiff’s claim for theft of trade secrets, the Court observed:

“[T]he jury was also instructed that ‘improper means’ includes bribery, espionage, and ‘breach or inducement of a breach of a duty to maintain secrecy, to limit use, or to prohibit discovery of a trade secret.’ This instruction tracks TUTSA’s definition of ‘improper means’ and is therefore a correct statement of law. But HouseCanary conceded at oral argument that there is no evidence TSI acquired the trade secrets through bribery, and our review of the record reveals no evidence that TSI acquired the trade secrets through espionage. Because those theories are not supported by the evidence, they should have been omitted from the ‘improper means’ definition that was submitted to the jury.“

(emphasis added, citations omitted). The Court went on to cite Texas Supreme Court authority stating that while “a jury charge submitting liability under a statute should track the statutory language as closely as possible,” the statutory language “may be slightly altered to conform the issue to the evidence presented,” and that “[a] broad-form question cannot be used to put before the jury issues that have no basis in the law or the evidence.”

Covid, federalism, and decentralization

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Recent orders about conducting trials during the pandemic highlight the different procedural structures of the state and federal courts.

In the state system, the Texas Supreme Court recently released its seventeenth emergency order about when and how jury trials may resume. (An order, incidentally, that I got from the txcourts.gov website, which shows progress in returning that site to normal after the recent hacker attack.)

In the federal system, the recent order in In re Tanner reminds of the considerable district court discretion about such matters: “[T]he district court has given great consideration to the COVID-19 issues addressed by Tanner. . . . [W]hatever each of us as judges might have done in the same circumstance is not the question. Instead, as cited below, the standards are much higher for evaluating the district court’s decision” for purposes of a writ of mandamus or prohibition. No. 20-10510 (May 29, 2020).

COVID-19 and mail-in ballots

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The Texas Supreme Court’s majority opinion in In re: State of Texas, No. 20-0394 (May 27, 2020), which addresses whether a lack of COVID-19 immunity can be a “disability” under the Election Code provision allowing a mail-in ballot, has these main points:

  • Mandamus relief, availability. It may be appropriate when the parties “agree[] . . . that because of imminence of the July elections, filing first in this Court is justified,” and when “th[e] case also presents questions of state-wide importance.”
  • Statutory interpretation. A lack of COVID-19 immunity is not a qualifying disability: “[I]f ‘physical condition’ as used in § 82.002(a) meant ‘physical state of being’, it would swallow the other categories of voters eligible for mail-in voting.” (This holding resolves the main legal issue in other cases statewide involving various county clerk’s offices.)
  • Mandamus relief, issuance. “The elected officials have placed in the hands of the voter the determination of whether in-person voting will cause a likelihood of injury due to a physical condition. The respondents do not have a ministerial duty, reviewable by mandamus, to look beyond the application to vote by mail.”
  • Going forward. “The Clerks have assured us that they will fully discharge their duty to follow the law. We are confident that they will follow the guidance we have provided here.”

Are these things Caesar’s?

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“Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” Matthew 20:21. “But the ‘conflicting pressures’ exerted by the First Amendment’s free exercise and establishment clauses require courts to walk a fine, and often indistinct, line in adjudicating ownership of church property when hierarchical entities disassociate.” Episcopal Diocese of Fort Worth v. The Episcopal Church, No. 18-0438. In this case, which arose from the withdrawal of the Fort Worth Diocese from the national Episcopal organization, the matters at issue were resolved by the laws of Caesar:

“[The Episcopal Church]’s determinations as to which faction is the true diocese loyal to the church and which congregants are in good standing are ecclesiastical determinations to which the courts must defer. But applying neutral principles to the organizational documents, the question of property ownership is not entwined with or settled by those determinations. The Fort Worth Diocese’s identity depends on what its documents say. To that end, the Diocesan Constitution and Canons provided who could make amendments and under what circumstances; none of those circumstances incorporate or rely on an ecclesiastical determination by the national church; and nothing in the diocese’s or national church’s documents precluded amendments rescinding an accession to or affiliation with TEC.”

No. 18-0438 (May 22, 2020).