FANNING, HARPER & MARTINSON, P.C.

FEBRUARY 2002 NEWSLETTER

As a continuing service to our clients, we have summarized recent cases for you. Legal topics include:

INSURANCE COVERAGE & BAD FAITH UPDATE,

MUNICIPAL LAW UPDATE,

PREMISES LIABILITY UPDATE,

CLASS ACTIONS UPDATE,

PRODUCTS LIABILITY UPDATE, and

EMPLOYMENT LAW UPDATE.

For convenience, each of these topics is presented as a separate category. These abbreviated summaries are provided for information only, and are not intended as legal advice.

At Fanning, Harper, & Martinson, P.C., we handle a broad range of legal matters for our clients in courts throughout Texas. As always, we appreciate the business you send!

We use every method available to achieve success for our clients. Of course, this includes winning jury trials. Success also comes by successfully pursuing summary judgment motions, dismissals in federal court, and by appealing judgments that we believe were wrongfully entered. Some of our recent victories are summarized below.

If you prefer not to receive this newsletter, please reply with the term "unsubscribe".

RECENT SUCCESSES

STEPHEN D. HENNINGER obtained a DEFENSE VERDICT in a jury trial in Tereso Rojas and Jose Rojas v. Robert Craig Dennie and Dallas Independent School District, In the Dallas County Court at Law Number Four; Cause No. CC-00-03952-D. Plaintiff sued Dallas Independent School District and a school district employee for injuries sustained when the school district employee rear ended Plaintiff in an automobile collision. FHM successfully defended the school district and the driver. The jury found no negligence on the part of either the school district or the driver.

LESLIE PITTS obtained a SUMMARY JUDGMENT in Royal Insurance Co. v. Matthew Cotter, 345th District Court, before Judge McCown, TRAVIS COUNTY. The Trial Court agreed with F.M. that the insurer had no duty to defend or indemnify a fraternity member for a hazing incident which occurred at the University of Texas. The Court ruled the sexual harassment exclusion applied even in the face of negligence allegations by the underlying plaintiff.

THOMAS P. BRANDT and STEPHEN D. HENNINGER obtained a SUMMARY JUDGMENT in Kenneth C. and Schuyler J. Cunningham v. Choctaw Properties, LLC, Everett B. Frazier and Jerry W. Campbell v. Aledo Independent School District, Allen Norman and Beau Duncan; In the 249^th Judicial District Court of Johnson County, Texas; Cause No 249-120-98. FHM represented Aledo Independent School District and its superintendent Allen Norman who, among others were sued by Plaintiff over a school district boundary dispute. Plaintiffs were seeking to declare that their home was within Aledo ISD’s school boundaries. Summary Judgment was granted as to all of Plaintiff’s claims against the school district and its superintendent.

THOMAS P. BRANDT and STEPHEN D. HENNINGER obtained a SUMMARY JUDGMENT in Jerry Pannell, Jr. v. Judge Joe M. Leonard, Hunt County District Attorney, Hunt County Assistant District Attorney and Russell Pryor Brooks; In the 354^th Judicial District Court of Hunt County Texas; Cause No. 63,495. FHM represented two district attorneys who were sued by Plaintiffs for allegedly conspiring to wrongfully violate a plea bargain. Summary Judgment was granted as to all of Plaintiff’s claims against both district attorneys.

THOMAS P. BRANDT and NELLIE G. HOOPER obtained a SUMMARY JUDGMENT in Samuel Bishop v. Denton Independent School District; In the United States District Court for the Northern District of Texas, Sherman Division; Cause No. 4:00CV197. Plaintiff sued the school district alleging employment discrimination under the ADA. Summary Judgment was granted as to all of Plaintiff’s claims against the school district.

STEPHEN D. HENNINGER obtained a SUMMARY JUDGMENT in Richard San Miguel v. Bamkinellie’s Youth Ranch, Roxann Staff, President of School Board, Martin Riojas, Principal of Thomas J. Rusk Middle School, and Dallas ISD; In the 44^th Judicial District Court of Dallas County, Texas; Cause No. 00-07510-B. FHM represented Dallas ISD and the President of the DISD School Board, who were sued by Plaintiff after a student was injured in a school sponsored field trip. Summary Judgment was granted as to all of Plaintiff’s claims against the school district and the president of the school board.

THOMAS P. BRANDT and STEPHEN D. HENNINGER obtained an APPELLATE VICTORY in Elnor Maxine Poyner, Individually and as Independent Executor of the Estate of William Euell Poyner and as Sole Heir of William Euell Poyner v. County of Eastland and Wayne Bradford, Sheriff Eastland County, Deputy Gerald Cozart, City of Gorman and Ken Wheeler, Chief of Police, Officer Coffey; In the 91^st Judicial District Court of Eastland County; Cause No. 37,385. FHM represented Eastland County, the Sheriff of Eastland County and a Sheriff’s deputy who were sued by Plaintiff for allegations of excessive force and wrongful death. After the trial court denied the county, sheriff and deputy’s motion for summary judgment, the Eastland Court of Appeals REVERSED the trial court’s denial of a summary judgment. The Court of Appeals RENDERED summary judgment in favor of Eastland County and the Sheriff on all claims. In addition, the Court of Appeals RENDERED summary judgment in favor of the Deputy on all federal causes of action.

THOMAS P. BRANDT and STEPHEN D. HENNINGER obtained an APPELLATE VICTORY in Willie O. Thomas v. Ricky Murray, Leslie Cotton and Navarro County. In this civil rights case, Plaintiff sued Navarro County, the Sheriff and a deputy in the U.S. District Court for the Northern District of Texas, Dallas Division, alleging excessive force. After the trial court granted summary judgment as to all of Plaintiff’s claims against Navarro County, the Sheriff and the deputy, the U.S. Court of Appeals for the Fifth District AFFIRMED SUMMARY JUDGMENT.

THOMAS P. BRANDT obtained an APPELLATE VICTORY in Gina Palmer v. Wilkinson Pontiac. In this employment discrimination against a car dealership, Plaintiff alleged sexual discrimination in the workplace. After the U.S. District court for the Southern District of Texas, Victoria Division, granted SUMMARY JUDGMENT in favor to the car dealership, the U.S. Court of Appeal for the Fifth Circuit, following oral argument, AFFIRMED the trial court’s grant of summary judgment.

THOMAS P. BRANDT presented a paper entitled "Immunity For Individuals" at the July, 26-27, 2001 "Suing and Defending Governmental Entities" State Bar of Texas CLE in San Antonio, Texas.

STEPHEN D. HENNINGER presented a paper entitled "The Fair Housing Act" at the July, 26-27, 2001 "Suing and Defending Governmental Entities" State Bar of Texas CLE in San Antonio, Texas.

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INSURANCE BAD FAITH - CASE LAW UPDATE

1. Schaefer v. American Manufacturers Mutual Ins. Co., 2001 WL 1692240 (Tex. App.--Beaumont 2001, n.w.h.) (Note: currently unpublished opinion, subject to revision or withdrawal.)

Insured was entitled to claim diminution of value damages under its personal automobile policy, which would be available if the repairs following a collision did not restore the automobile to substantially the same condition and value it had before the injury.

It was an issue of fact, to be decided by a jury, as to whether repairs did (or could) restore the automobile to substantially the same condition and value it had before the injury. If not, damages for diminution of value are appropriate. The actual market value of the vehicle before injury may be considerably less than the cost of repairs plus the loss of market value; or the actual market value may be more than the cost of repairs plus the loss of market value. Accordingly, the appellate court held that the trial court erred in granting summary judgment on the basis that as a matter of law the insured could not recover for diminished value. Reversed and remanded to the trial court.

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2. Westchester Fire Ins. Co. v. Gulf Coast Rod, Reel & Gun Club, 2001 WL 1632300, (Tex. App.--Houston [1st Dist.] 2001, n.w.h.) (Note: currently unpublished opinion, subject to revision or withdrawal.)

Beach erosion constituted an "occurrence" under a CGL policy, despite intentional offshore dredging activities.

Adjacent landowners' petitions against an insured gun club alleging property damage due to beach erosion over a period of time did allege an "occurrence" within the meaning of the gun club's CGL policy. Thus the insurer was obligated to defend the gun club against the landowners' lawsuits. The policy defined "occurrence" as an accident, including continuous exposure to conditions that resulted in property damage neither expected or intended from standpoint of insured. The beach erosion, related to the gun club's dredging activities, was neither expected or intended from standpoint of gun club, even though the dredging activity itself was intentional. The dredging led to altered water currents impacting the beach, which in turn led to the beach erosion.

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3. Baker v. Argonaut Ins. Co., 36 S.W.3d 587 (Tex. App.--Dallas 2000, review granted)

Writ has been granted by the Texas Supreme Court on this case involving an issue of first impression in Texas concerning a workers compensation carrier's right of reimbursement for sums paid.

The appellate court held that the workers’ compensation insurance carrier was not entitled to reimbursement of the full workers compensation benefits paid to an employee injured in a vehicle accident that occurred while the employee was riding in a vehicle in the course and scope of his employment, from the settlement the injured employee received in a negligence action against the driver of other vehicle and the driver's employers. Rather, the workers compensation carrier was only entitled to reimbursement of the amount paid over the deductible amount, where the workers compensation was paid under a deductible plan insurance policy, under which the employer of injured employee had to pay a $250,000 deductible.

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4. Hartrick v. Great American Lloyds Ins. Co., 62 S.W.3d 270 (Tex. App.--Houston [1st Dist.] 2001, n.w.h.).

Builder's breach of implied warranty was not an "accident" and, therefore, was not an "occurrence," thus policy provided no coverage.

As determined in the underlying case, the builder's voluntary and intentional conduct was its failure to comply with the implied promises imposed on it a matter of law as a home builder, by not preparing the soil properly and not constructing the foundation properly. The injury to the home in question was the pitching and heaving of the foundation and resulting damage to the house and loss of market value. These injuries were the reasonably foreseeable results that would ordinarily flow from the builder's failure to comply with its implied warranties to (1) prepare the soil and clear the land properly and (2) build a house on a foundation strong enough and thick enough to support the house. Because the builder was responsible for the damages to the home and could have reasonably foreseen those damages, the builder's obligation to pay damages was not the result of an accident. Thus, there was no "occurrence," and the carrier had no duty to indemnify the builder for the judgment in the underlying case.

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5. Jones v. Ray Ins. Agency, 59 S.W.3d 739 (Tex. App.--Corpus Christi 2001, petition for review filed)

Insured brought action against automobile insurer and agent to recover for breach of contract, fraud, and violation of the Deceptive Trade Practices-Consumer Protection Act (DTPA) and the Insurance Code in connection with cancellation of policy.

Appellate court held that: (1) cancellation of the policy on the grounds that it did not exclude the named insured's sister as a driver and that the named insured failed to provide copy of driver's license was illegal and void; (2) the notice of cancellation was void; (3) the insurer's acts of simultaneously retaining the premiums and denying coverage based on the alleged cancellation was unconscionable; and (4) the insured's proof created factual issues precluding summary judgment on claims of fraud, fraudulent inducement, and violation of the DTPA and the Insurance Code.

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6. Ace Ins. Co. v. Zurich American Ins. Co., 59 S.W.3d 424 (Tex. App.--Houston [1st Dist.] 2001, petition for review filed)

Insurance policy's service-of-suit clause operated as a consent to personal jurisdiction.

Belgian property and casualty insurer requested special appearance arguing that it did not consent to personal jurisdiction in Texas. However, the appellate court held that the Belgian insurer, which issued a reinsurance policy incorporating a service-of-suit clause in a policy originally issued by a Swiss insurer, consented to the jurisdiction of the Swiss insurer's choice by waiving personal jurisdiction. "Court of competent jurisdiction" as used in the service-of-suit clause referred to a court that had subject-matter jurisdiction, and the service-of-suit clause then operated as a consent to personal jurisdiction.

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7. In re Senior Living Properties, L.L.C., 63 S.W.3d 594 (Tex. App.--Tyler 2002, application for mandamus filed)

TRCP 192.3(f) does not preclude the requested discovery on insurance issues.

Beyond production of copies of applicable insurance policies, plaintiff sought to compel the deposition of a corporate representative with knowledge of the extent to which insurance had been eroded or compromised, the number of competing claims, etc. Defendants argued that, pursuant to Texas Rule of Civil Procedure 192.3(f), Plaintiff was entitled to discover only the existence and contents of insurance policies. However, the court held that the rule does not preclude further discovery on insurance issues should the facts of a particular case warrant such discovery.

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8. Wellisch v United Services Automobile Assoc., 2002 WL 83735 (Tex. App.–San Antonio, n.w.h.) (Note: currently unpublished opinion, subject to revision or withdrawal.)

Insurer did not violate the Insurance Code's prompt pay provision.

Plaintiffs in an auto accident case sought to recover under carrier's uninsured/underinsured motorist coverage, the recovery limits of which were $300,000. The carrier denied the claim. Plaintiffs sued, and obtained partial summary judgment, establishing that other driver's negligence caused the accident. A jury trial on damages followed, with a verdict favorable to Plaintiffs in the amount of $6 million. On 05/02/00, the trial court entered judgment; on that same day, carrier paid Plaintiffs their policy limits of $300,000. No appeal from that judgment ensued. Plaintiffs then proceeded with extracontractual claims against carrier, which were denied. On appeal, Plaintiffs argued that the carrier's denial of their claim on 11/25/98 had violated the Insurance Code's prompt pay provisions. However, the court held that the carrier's liability did not arise on the date of the accident, but on the date the trial court entered final judgment following a determination that the other driver's negligence had caused the accident and a jury returned a verdict favorable to the Plaintiffs.

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MUNICIPAL LAW UPDATE

UNITED STATES SUPREME COURT

1. Buckhannon Board & Care Home v. West Virginia Dep’t of Health & Human Resources, ___ U.S. ___ , 121 S.Ct. 1835 (2001).

The fact that a federal civil rights lawsuit caused the Defendant to alter its conduct does not render the Plaintiff a "prevailing party" under the federal fee-shifting statute.

2. Thomas v. Chicago Park Dist., No. 00-1249 (U.S.S.C January 15, 2002).

A content-neutral permit scheme regulating uses of a public forum need not have procedural safeguards required for subject matter speech regulations.

3. United States v. Arvizu, No. 00-1519 (U.S.S.C January 15, 2002).

Under the "totality of the circumstances" test for investigatory stops, an officer may rely on combination of otherwise innocent observations to briefly pull over a suspect vehicle.

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TEXAS SUPREME COURT

In re de la Garza, No. 01-0398, (Tex. Nov. 15, 2001)

4. City commissioners acting in legislative capacity may not be compelled to testify.

The City Commission failed to approve a razoring request by Obra Homes, Inc. In this civil action, Obra now seeks to subpoena the relators, the mayor, and four city commissioners, who are not parties to the action. The trial court ruled that the relators were acting in a legislative capacity when they were considering Obra’s proposal, but refused to quash the subpoenas. Held: Writ of mandamus is denied, to give the trial court an opportunity to reconsider its ruling in light of the recent decision in In re Perry, ___ S.W.3d ___, (Tex. 2001) (holding that persons acting in a legislative capacity generally may not be compelled to testify about their legislative activities).

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The Texas Tort Claims Act, chs. 101 to 109 of the Texas Civil Practices & Remedies Code, controls governmental immunity and related issues of who may sue which governmental entities under what circumstances. The following three Texas Supreme Court cases interpret this Act.

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5. Texas Dep't of Criminal Justice v. Miller, 44 Tex. Sup. Ct. J. 963, June 21, 2001.

State jail inmate died of meningitis while incarcerated. His family sued the TDCJ and the medical providers for medical malpractice in failing to evaluate and properly diagnose the inmate's condition. The court reversed the trial and appellate court and found the TDCJ entitled to immunity because failing to use medical equipment and medicine is not "use" of tangible personal property enough to find a waiver of immunity.

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6. Texas Natural Resource Conversation Comm'n v. White, 46 S.W.3d 864, April 26, 2001.

TNRCC removed a pump they had been using to dissipate underground gas, permitting gas fumes to escape into a neighboring business and cause a fire. The court held the stationary pump was "motor-driven equipment," but there was no "operation or use" of the equipment enough to waive state immunity. The government commission was consequently entitled to immunity from the lawsuit.

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7. Texas Dep't of Public Safety v. Petta, 44 S.W.3d 575, April 12, 2001

A driver filed suit against the DPS and a patrol officer for allegedly threatening her, engaging in a high-speed chase, and firing his gun at her while trying to apprehend and subdue her. The trial court found that since the suspect raised the same issues of the necessity of the officer's force used and her response as a defense in the criminal case, the conviction for fleeing and attempting to elude an officer collaterally estopped the civil assault claim against the officer on the same issues regarding the amount of necessary force. The claims against the DPS and the officer were barred by sovereign immunity. The Court further found that the officer, since he was sued in his official capacity, was not a "person" within the meaning of section 1983, and he therefore did not violate the suspect's civil rights.

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8. Whitley v Dallas Area Rapid Transit, No.05-00-01167-CV (Tex. App.–Dallas Dec. 18, 2001).

Immunity. Fact issue exists regarding waiver of immunity where bus driver dropped off passenger who as in danger & failed to return.

Plaintiff has cerebral palsy and is a regular Dallas Area Rapid Transit (DART) bus passenger; he carries a special pass that identifies him as disabled. While a passenger sitting directly behind the driver, Plaintiff was harassed by a woman who boarded after him. She pulled out a razor box cutter from her purse and threatened him with it. In an attempt to defuse the situation, the bus driver ordered Plaintiff off the bus far from his stop, in an area unfamiliar to him. The driver promised he would return in a few minutes. When Plaintiff got off, the woman loudly claimed, "I’m fixing to get off, I’m going to kill that motherf****er." About 2 blocks later, she got off the bus, still loudly announcing her intent to kill Plaintiff. The bus driver chose not to return for Plaintiff as promised. The woman gathered her son and a number of his friends, who found Plaintiff where he was still waiting for the bus to return & severely beat him with iron pipes, boards, & ropes, leaving him for dead. The attack left Plaintiff with multiple injuries, including facial fractures. He required several surgeries. The trial court granted DART’s plea to the jurisdiction, dismissing Plaintiff’s claim in its entirety. The Dallas Court of Appeals reversed and remanded, holding a fact issue as to whether the bus driver took affirmative action involving the use of the bus that contributed to Plaintiff’s injuries.

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9. Chambers County v TSP Development, Ltd., No.14-00-00909-CV (Tex. App.–Houston [14^th Dist.] November 29, 2001.

Solid Waste Disposal. Plaintiff did not have standing to bring suit against county.

Plaintiff sought a declaratory judgment and an injunction against a county ordinance prohibiting the disposal of solid waste in certain areas of the county. On appeal, the County argued that the trial court erred in holding that Plaintiff had standing to file the lawsuit. The Houston Court of Appeals reversed & rendered that all claims be dismissed for lack of jurisdiction. The trial court erred in finding that Plaintiff held a contract for sale of property within the county. Plaintiff held merely an option contract to buy the land and, thus, did not have standing to contest the county ordinance.

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10. City of San Antonio v Hardee, No. 04-01-00231-CV (Tex. App.–San Antonio, Dec. 5, 2001).

Annexation. Plaintiffs lacked standing to challenge annexation.

Plaintiffs (landowners) sued Defendant (city) before the effective date annexing their land to the City, claiming Defendant failed to comply with various statutory provisions. The Court of Appeals found that Plaintiffs lacked standing to pursue the challenge to annexation based on Plaintiffs’ procedural violations of Tex. Loc. Gov. Code sec. 43.052, the City Charter, and the City Code. The San Antonio Court of Appeals therefore remanded for further proceedings only on Plaintiffs’ Open Meetings violation claim.

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11. Hughes v Massey, No. 09-01-229-CV (Tex. App.–Beaumont, Nov. 29, 2001).

Inmate’s suit was improperly dismissed "with prejudice."

Plaintiff (inmate) filed this civil rights action alleging that Defendant authorized the removal of the door to the restroom in the unit’s kitchen. When Plaintiff used the facility, he was exposed to female officers in violation of his 1st Amendment right to Christian modesty. Before service of process, the trial court dismissed Plaintiff’s petition for failure to file a trust account statement with his petition. On appeal, Plaintiff argued that the trial court erred in dismissing his suit "with prejudice." The Beaumont Court of Appeals reformed the judgment to provide the cause is dismissed without prejudice. A dismissal for failure to comply with the rules governing the filing of in forma pauperis suits is not a ruling on the merits; accordingly, it is error to dismiss the suit with prejudice if the inmate was not first provided with an opportunity to amend his pleadings.

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12. Powell v Foxall, No. 09-01-279-CV (Tex. App.–Beaumont, Nov. 29, 2001).

Immunity protected counselors’ licensing board member from suit regarding

an error in the board’s newsletter.

There are 11 independent boards administratively attached to the Texas Dept. of Health that license health care professionals. All post information of interest to their licensees, including recent disciplinary actions by their board, on the internet. Eight, including the Texas State Board of Examiners of Professional Counselors (the Board) mail a newsletter to its licensees containing recent disciplinary actions taken by their respective boards. Plaintiff counselor sued Defendant’s board members for defamation & intentional infliction of emotional distress (IIED) after mistakes were made in the board’s newsletter concerning a disciplinary action taken against him. Defendants filed a motion for summary judgment on the grounds of qualified privilege, official immunity, sovereign immunity, and insufficient evidence. The trial court granted the motion as to Plaintiff’s IIED claim but otherwise denied relief. The Beaumont Court of Appeals reversed and rendered in favor of Defendants. Defendants were performing a discretionary function within the scope of their authority. And Defendants’ evidence further established the reliance placed upon the accuracy of the report was reasonable. Plaintiff failed to raise a fact issue precluding summary judgment.

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13. City of Glenn Heights v Sheffield Development Co., Inc., No. 10-99-232-CV (Tex. App.–Waco, Oct. 24, 2001).

Regulatory Takings Case. City was liable to landowner for the adverse effect that a development moratorium and downzoning had on the value of the property.

The City was required to pay the landowner for the adverse effect of zoning regulations, including a temporary moratorium.

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14. Eastland County, et al. v. Poyner, Nos. 11-00-00184-CV & 11-00-00284-CV (Tex. App.–Eastland, Oct. 25, 2001.

Immunity. Officers were not entitled to immunity from claims brought against them in their individual capacities.

Defendants (police officers) shot & killed an elderly man while responding to a 911 call placed by his wife. The man was suffering from the delusion that passing vehicles were Plaintiff’s boyfriends, signaling her to come out. He took his shotgun outside and said that he was going to put an end to it. In reality, the passing cars were teenagers leaving a school dance. Defendant Officers failed to establish their good faith &, thus, entitlement to summary judgment based on official immunity.

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15. Obadele v Johnson, No. 14-00-01256-CV (Tex. App.–Houston [14th Dist.] Nov. 1, 2001.

Inmate’s suit was properly dismissed.

The trial court properly dismissed Plaintiff’s pro se in forma pauperis case (that alleged destruction of his personal and legal property) because he failed to comply with the requirement that he list previous lawsuits. Plaintiff’s argument, that he was unable to provide copies of the grievances because he was indigent and the unit did not make photocopies for indigent prisoners engaged in litigation, failed.

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16. City of Houston v. Precast Structures, Inc., (Tex. App.–Houston [14th Dist.], Oct. 25, 2001).

Condemnation. More than $1 million awarded for damage to remainder of property caused by condemnation of 1,514 square feet.

Damages are to be determined by ascertaining the difference between the market value of the remainder of the tract immediately before the taking and the market value of the remainder of the tract immediately after the appropriation, taking into consideration the nature of the improvements, and the use to which the land taken is to be put. As a general rule, a landowner may not recover severance damages if the diminution in value of the remainder is caused by the acquisition and use of adjoining lands of others for the same undertaking. Diminution in value of property resulting from a loss of access constitutes damage. The method for measuring damages resulting from impaired access is the same as for severance damages – diminished in the value of the landowner’s property.

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17. Eller Media Co. v. City of Houston (Tex. App.–Houston [1^st Court]).

Sign code established by this municipality is valid.

Plaintiff’s outdoor advertisers sued Defendant City of Houston, challenging the validity of the amended Houston Sign Code. Plaintiffs alleged a taking without compensation in violation of the Texas and United States Constitutions, violation of the right of free speech under the First Amendment, and a violation of state law governing the regulation of billboards. The judgment for Defendant was affirmed. Defendant met its burden of establishing that the Sign Code directly advances Houston’s interests in reducing traffic accidents and improving the appearance of Houston. Cities may make different regulations for off-premise and on-premise signs (which serve important functions, including identifying the occupants of the premises and the nature of their businesses or services), including prohibiting off-premise signs while permitting on-premise signs.

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18. Texas Department of Mental Health & Mental Retardation v. Olofsson (Tex. App.–Austin, Oct. 25, 2001).

Whistleblower Case. Limitations could be asserted as an affirmative defense but was not grounds for a plea to the jurisdiction.

Interlocutory appeal from the denial of a plea to the jurisdiction. Plaintiff was a physician at Terrell State Hospital. She alleged that Defendant retaliated against her for her report that a fellow physician had boasted of physically attacking a patient. She alleged that retaliatory actions resulted in her emotional breakdown and ingestion of a drug overdose, suspension from employment, and constructive discharge. She filed this Whistleblower Act claim, and defendants (hospital & Texas Dept. of Mental Health & Mental Retardation) filed a plea to the jurisdiction, alleging that Plaintiff failed to sue within 90 days after the alleged violation. The trial court denied the plea. The Austin Court of Appeals affirmed. Noncompliance with this limitation period gives rise to the affirmative defense of limitations, but is not grounds for a plea to the jurisdiction.

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PREMISES LIABILITY - CASE LAW UPDATE

1. American Industries Life Insurance Co. v. Ruvalcaba, No. 14-99-00077-CV, 2001 WL 1098171 (Tex.App.--Houston [14th Dist.] 2001, n.w.h) (Not yet released for publication).

Employee’s visitor (family member) held not to be a business invitee of building owner or tenant.

A mother and her son went to the visit their father/husband at his office and to invite him to lunch. Since the man was not quite ready to leave, the woman and child left the office to wait. On the way out of the office, the child fell off an open staircase and was injured. The trial court (bench) entered judgment for the plaintiff against the building owner, and the owner appealed. The Houston Court of Appeals ruled that the child was not an invitee because there was no evidence that the child was there as a guest of the building owner or tenant. In spite of the fact that the staircase was in violation of municipal code, the Court of Appeals further found that there was no evidence that the building owner had actual knowledge of a dangerous condition, which was needed to prove that the owner violated his duty of care to the child, presumptively a licensee. The Court of Appeals reversed the trial court and rendered a take-nothing judgment.

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2. Mass Marketing, Inc. v. Gaines, No. 04-00-00578-CV, 2001 WL 1643855 (Tex.App.--San Antonio 2001, n.w.h.) (Not yet released for publication).

Fresh grapes on grocery store floor for "a few brief moments" was sufficient to charge the store with notice of the condition when store manager and checker saw child eating grapes in the area.

Customer brought slip and fall action against grocery store when she slipped on "green and undamaged" grapes. Prior to the customer falling, a child in front of the customer had been eating grapes out of the bag, an event witnessed by both the checker and the manager. The manager "glanced" at the floor three times to see if any grapes had fallen and he saw none. A jury entered judgment in favor of the customer, and the San Antonio Court of Appeals held that grapes being on the floor "a few brief moments" is sufficient to charge the store with notice of the condition, and that the jury was free to find that the manager's cursory look at the floor was insufficient.

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3. Torres v. Belleau, 40 S.W.3d 662 (Tex.App. --Waco 2001, pet. granted).

Softball does not fall within the definition of "recreation" in the recreational-use statute.

Softball player who's team was eliminated from competition was sitting on a swing, owned by the local municipality, watching the championship game. The swing broke, and the player was injured. She sued the City to recover her damages. The City was granted summary judgment on the grounds that the city invited the woman onto their property to engage in recreation, and per statute only owes the woman the duty of care it would owe a trespasser. The Court of Appeals held that competitive sports such as softball did not fall within the definition of "recreation" as intended by the statute, Tex.Civ.Prac.Rem.Code S 75.001(3), as it existed in 1996. Therefore, the Court of Appeals reversed the summary judgment and remanded the case for trial.

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CLASS ACTION - CASE LAW UPDATE

1. Stirman v. Exxon Corp., No. 01-50632, 2002 WL 63398 (5th Cir. Feb. 1, 2002).

District court certified class action and Fifth Circuit reversed. The Fifth Circuit held the district court did not conduct a rigorous analysis of the Rule 23 requirements. Id. at *7.

Owners of royalty interests under natural gas leases brought a class action against the lessee, Exxon Corporation. The class alleged that Exxon breached its implied covenant to market the natural gas and obtain the highest price possible for the class. The district court granted class certification; however, the Fifth Circuit found that the class did not meet several FRCP rule 23 requirements. Specifically, typicality was not satisfied given the differences among state laws with regard to laws stating the implied covenant to market gas. Moreover, the court found that the district court failed to address whether the named class representative was an adequate representative. The court noted that the class representative’s agreement to abide by the Texas statute of limitations might cause other class members in other states to lose some of their claims because other states might have a longer statute of limitations. Therefore, this cut against the class representative being an adequate representative for the rest of the class.

The district court did consider variations in state law but the Fifth Circuit noted that its analysis did not take into account significant variations in state law that also defeated the predominance requirement. Finally, the Fifth Circuit noted that the district court never considered whether a class action was a superior method for adjudicating the controversy and therefore failed to conduct a rigorous analysis of Rule 23 requirements and found that therefore it was an abuse of discretion for the district court to certify the class.

In an interesting footnote, the court found that even if Exxon had stipulated to class certification, the court was bound to conduct its own thorough inquiry into class merits to protect unnamed potential class members. This suggests that even if class opponents do not raise certain points of error that those points will not be waived on appeal due to the trial court’s obligation to conduct its own thorough inquiry on all class requirements.

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2. Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002).

Louisiana statute allowed aggregation of attorney’s fees such that case was removable from state to federal court.

In this class action against an automobile insurer, the class brought suit in Louisiana state court claiming compensation for post-repair diminished value of their damaged vehicles. Specifically the class claimed that their insurance company should have compensated them for the diminished value of their vehicles. The case was then removed to federal court on diversity grounds and this opinion held that the amount in controversy requirement for removal was satisfied because the attorney’s fees of the class could be aggregated for the entire class pursuant to Louisiana Code of Civil Procedure Art. 595. In other words, if the class representative’s claim, including the aggregated attorney’s fees, exceeds the jurisdictional minimum then the district court may exercise supplemental jurisdiction over the claims of all the class members. The court also stated that it was probably unethical for the class representative to unilaterally waive the rights of the potential class members to attorney’s fees without their authorization. Id. (citing DeAguilar v. Boeing Co., 47 F.3d 1404, 1413 (5th Cir. 1995)).

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PRODUCTS LIABILITY - CASE LAW UPDATE

1. Taylor Machine Works v. Shippers Stevedoring Co., 2001 WL 1665388 (Tex. App.–Houston [1st Dist.], December 27, 2001)

Self insured employer under the LHWCA, it was not liable for third party claims of contribution or indemnity.

On February 22, 1999, an employee of Shippers Stevedoring Co. ("Shippers") was injured when the hood of the engine compartment on a forklift fell and struck him. The employee sued Taylor Machine Works ("Taylor"), the forklift manufacturer. Taylor then sued Shippers, a self-insured employer under the Longshore and Harbor Worker's Compensation Act ("LHWCA") and a subscriber under the Texas Worker's Compensation Act ("TWCA"). Shippers filed a motion for summary judgment on the grounds that as a self insured employer under the LHWCA, it was not liable for third party claims of contribution or indemnity. The court granted the motion.

On appeal, Taylor conceded that it had no right to contribution or indemnity but reasserted its claim that it had independent causes of action based on Shippers' failure to install hood locks provided by Taylor (upon Shippers' request). The court of appeals affirmed the trial court, finding that Taylor failed to establish a breach of contractual relationship or negligent performance of assumed duty and negligent misrepresentation independent of the employee's injuries.

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2. Daimler Chrysler v. Brannon, 2001 WL 1531207 (Tex. App.- Texarkana 2001, pet. denied)

Award of $35,000 to ad litem for 24 to 25 hours work on a settled case was an abuse of discretion.

Daimler Chrysler appealed a $35,000.00 ad litem fee awarded by the trial court in a settled case. The trial court awarded and found that sum reasonable based on the ad litem spending 24 to 25 hours on the case, incurring certain expenses and being subject to defending potential liability suits for a claimed period of 30 years. The ad litem also reviewed the settlement agreement but did not participate in negotiations for the agreement. The court of appeals found that the trial court abused its discretion by awarding the ad litem $35,000.00 in fees without further evidence to support the award and remanded the case for rehearing.

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EMPLOYMENT LAW - CASE UPDATE

UNITED STATES SUPREME COURT

1. EEOC v. Waffle House, Cause No. 99-1823 (U.S. Supreme Court) January 15, 2002.

Arbitration agreement between employer and employee for employment related disputes does not preclude the EEOC from seeking judicial relief on behalf of the employee.

Waffle House employee was required to sign agreement requiring employment disputes to be settled by binding arbitration. The employee suffered a seizure and was subsequently fired by Waffle House. Employee filed with the EEOC who subsequently filed this enforcement suit. Employee was not a party to the suit. The Supreme Court held that the EEOC was not a party to the contract and it has independent statutory authority to bring suit.

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2. Toyota Motor Mfg. v. Williams, Cause No. 00-1089 (U.S. Supreme Court) January 8, 2002.

To be "substantially limited in a major life activity" under the Americans with Disabilities Act, an individual must have an impairment that prevents or severely restricts activities that are of central importance to most people’s daily lives rather than just to a particular job.

Employee who claimed to be disabled by carpal tunnel syndrome sued her former employer for failing to provide her with a reasonable accommodation as required by the ADA. The district court held employee impairment did not qualify as a disability under the ADA. On appeal the Sixth Circuit found that the employee’s impairment substantially limited employee in the major life activity of performing manual tasks. The Supreme Court held that the Sixth Circuit did not apply the proper standard in determining whether employee was disabled under the ADA because it analyzed only a limited class of manual tasks and failed to ask whether employee’s impairments prevented or restricted employee from performing tasks that are of central importance to most peoples’ daily lives.

In reaching its decision the Supreme Court held that "major" in the term major life activities means "important." Thus, activities of central importance to daily life. In addition, the Court concluded that the impairment impacts must also be permanent or long-term.

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FIFTH CIRCUIT

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3. Juan Vella v. Daley, Cause No. 00-20770, 5th Circuit (January 18, 2002).

Paramedics and emergency medical technicians do not fall within the "learned professional" exemption of the Fair Labor Standards Act (FLSA) thus the City of Houston was liable to them for overtime compensation.

Paramedics and emergency medical technicians employed by the City of Houston Fire Dept. sued the City of Houston for overtime compensation pursuant to the Fair Labor Standards Act. The court held the paramedics and emergency medical technicians did not fall into the exception of the FLSA and were entitled to overtime compensation. Specifically, the court held that the Plaintiffs did not fall into the learned professional exemption because they did not have sufficient education requirements; lacked sufficient discretion in their job duties to file under the learned professional exemption; and did not fall within the executive or administrative exemption. There was no evidence or insufficient evidence that their jobs entailed management and/or discretionary duties. The court reversed the district court’s grant of summary judgment in favor of the city and remanded to the trial court for entry of judgment in favor of the Plaintiffs, following a determination in the amount of overtime compensation owed by the city to the Plaintiffs.

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4. Montemayor v. City of San Antonio, Cause No. 00-50681; Fifth Circuit (Dec. 19, 2001).

Hispanic female applicant for firefighter position prevailed on her claim of discrimination because she was able to prove that other applicants that were not rejected had blemishes on their record far worse than hers.

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5. Hunt v. Rapides Healthcare System; Cause No. 00-31260, Fifth Circuit Dec. 26, 2001.

A day-shift nurse took FMLA (Family Medical Leave Act) leave and was offered a night-shift position upon her return. The Fifth Circuit held day shift and the night shift are not equivalent positions for the purpose of the duty to reinstate under the FMLA. But a shift change, without more, is not an adverse employment action for purposes of establishing a prima facie case under the FMLA.

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6. Branton v. City of Dallas, ___F.3d ___, 2001 WL 1398532 (5th Cir. 2001)

First Amendment Retaliation: exposure of official misconduct is a matter of public concern.

Plaintiff, a police officer, suspected that another police officer had lied under oath during a police disciplinary hearing. Plaintiff expressed her concern to the hearing officer after the proceeding ended. As a result of this "ex parte" communication, the department disciplined her. The Fifth Circuit held (1) Plaintiff’s communication involved a matter of public concern--exposure of official misconduct and (2) the case should proceed to trial.

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STATE COURT’S OF APPEAL

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7. City of University Park v Van Doren, No. 05-98-00887-CV (Tex. App. – Dallas, Nov. 27, 2001).

Workers’ Compensation Discrimination Case.

Officer was reinstated. Plaintiff, who had worked for the City’s police department since 1984 and was terminated after an on-the-job injury necessitated two surgeries (the claim was initially labeled "suspect" and denied). During disputes with the Defendant City over workers’ compensation and salary continuation benefits, Plaintiff continued to work, and the condition of his injured ankle worsened. Eventually, the Department decided to eliminate Plaintiff’s position. Throughout the trial, considerable time was devoted to evidence of whether Plaintiff’s former position of assistant police chief was purely administrative or whether the post required the ability to perform police patrol work, and the parties continue to disagree on this issue. Plaintiff asserts that patrol is not part of the essential job function. A jury found that Defendant eliminated Plaintiff’s position in retaliation for his filing a workers’ compensation claim in good faith, and it found that Plaintiff’s disability, if any, was not a motivating factor in the elimination of his position. The trial court rendered judgment for Plaintiff against Defendant for $250,000, which is the maximum damages recovery authorized by the Texas Tort Claims Act. The trial court denied Plaintiff’s request for reinstatement to the position of assistant police chief. The Dallas Court of Appeals reversed and rendered that Plaintiff be reinstated; the damages award was affirmed.

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8. Davis v Education Service Center, Region VIII, No. 06-01-00036-CV (Tex. App.–Texarkana, Dec. 6, 2001).

Retaliation Claim. Plaintiff failed to exhaust administrative remedies.

Plaintiff was employed by Education Service Center, Region VIII. She sued Defendants (Region VIII & her supervisor) for retaliation under Tex. Lab. Code sec. 21.055 and for intentional infliction of emotional distress. She also sued Region VIII for negligent hiring or retention of X. Ds moved for summary judgment, which the court granted, dismissing all of Plaintiff’s claims. On appeal, she argued that the trial court incorrectly granted summary judgment on her claim for retaliation. The Texarkana Court of Appeals affirmed. The trial court did not have subject matter jurisdiction over Plaintiff’s retaliation claim because she did not exhaust her administrative remedies on this claim as required by Labor Code sections 21.201(a) & 21.202(a).

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9. Rouch v Continental Airlines, Inc., No. 04-00-00280-CV (Nov. 7, 2001).

Defamation. Plaintiff consented to publication of the defamatory matters concerning her.

This appeal arose out of Plaintiff’s wrongful termination and defamation action against Defendant Continental Airlines. Plaintiff worked for Defendant as an airport sales agent, and defendant paid to have Plaintiff commissioned as a notary public. She signed a memo, which stated that it was Defendant’s policy not to charge anyone a notary’s fee. She was terminated after she was observed collecting a fee for her services. Plaintiff appealed her termination through Defendant’s internal appeal procedure. As grounds for Plaintiff’s termination, a senior official cited Plaintiff’s misuse of pass privileges and company property, time sheet alterations, clocking in and then parking her car before reporting to work, and collecting notary fees. He also alleged that Plaintiff engaged in an inappropriate relationship with a supervisor and Plaintiff was untrustworthy as a supervisor. The official used the above information and additional statements he obtained from various airline employees. Some characterized her as vindictive and intimidating. Plaintiff lost the appeal, then brought suit against Defendant, alleging it libeled and slandered her during the internal appeal hearings. The jury found in Defendant’s favor on the wrongful discharge claim but found in favor of Plaintiff on the slander claim, awarding $848,250 in compensatory damages and $1,000,000 in exemplary damages. The trial court granted judgment n.o.v. on the grounds that Plaintiff consented to the defamatory statements. Plaintiff appealed the take-nothing judgment. The Court of Appeals affirmed. A party who submits his or her conduct to investigation, knowing the results of the investigation will be published, consents to that publication.

An EEOC right to sue letter does not trigger the running of the sixty-day time limit for filing a judicial action under the TCHRA. See also Vielma v. Eureka Co., 218 F.3d 458 (5th Cir. 2000).

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