Justia Business Law Opinion Summaries

In this case, Bay, Ltd., a construction company, filed suit against The Most Reverend Wm. Michael Mulvey, Bishop of the Diocese of Corpus Christi, seeking to recover the value of unauthorized improvements made to a ranch leased from the Bishop by Michael Mendietta, a former Bay employee. Mendietta had used Bay's resources for these improvements without the company's consent. Bay also filed a separate lawsuit against Mendietta for damages related to his unauthorized actions, including the improvements to the ranch.Six years later, Bay and Mendietta entered into an agreement settling their claims. This agreement required Mendietta to pay Bay $750 per month to avoid a $1.9 million final judgment. The agreement allocated $175,000 of the settlement amount to Mendietta's homestead, but did not allocate specific values to the other injuries suffered by Bay, including the improvements to the ranch.After Bay dropped its claims against Mendietta and proceeded to trial against the Bishop alone, the jury awarded damages to Bay. However, the Bishop requested a settlement credit of $1.725 million (the total settlement amount minus the $175,000 allocated to Mendietta's homestead). The lower court denied this request, but the appellate court reversed, concluding that the unallocated amount of the settlement exceeded the jury's award to Bay.The Supreme Court of Texas affirmed the appellate court's decision, holding that the agreement between Bay and Mendietta constituted a $1.9 million settlement agreement. Because the agreement allocated $175,000 to an injury other than the one Bay sought to recover from the Bishop, the remaining $1.725 million was credited against the jury's verdict, resulting in a take-nothing judgment for Bay. View "BAY, LTD. v. MULVEY" on Justia Law

Cobalt International Energy partnered with three Angolan companies to explore and produce oil and gas off the coast of West Africa. Later, the federal Securities and Exchange Commission announced it was investigating Cobalt for allegations of illegal payments to Angolan government officials and misrepresentation of the oil content of two of its exploratory wells. This led to a significant drop in Cobalt’s stock price and prompted a class action lawsuit from Cobalt's investors, led by GAMCO, a collection of investment funds that held Cobalt shares. Prior to these events, Cobalt had purchased multiple layers of liability insurance from a number of insurance companies, collectively referred to as the Insurers in this case. When the allegations surfaced, Cobalt notified the Insurers, who denied coverage on the grounds that Cobalt's notice was untimely and certain policy provisions excluded the claims from coverage.In 2017, Cobalt filed for bankruptcy and began settlement negotiations with GAMCO. Eventually, a settlement agreement was reached, which stipulated that Cobalt would pay a settlement amount of $220 million to GAMCO, but only from any insurance proceeds that might be recovered. Cobalt and GAMCO then jointly sought approval of the settlement from the federal court and the bankruptcy court, both of which granted approval.The Insurers then filed a petition for a writ of mandamus, arguing that the settlement agreement was not binding or admissible in the coverage litigation, that Cobalt had not suffered a "loss" under the policies, and that GAMCO could not sue the Insurers directly.The Supreme Court of Texas held that (1) Cobalt had suffered a “loss” under the policies because it was legally obligated to pay any recoverable insurance benefits to GAMCO, (2) GAMCO could assert claims directly against the Insurers, and (3) the settlement agreement was not binding or admissible in the coverage litigation to establish coverage or the amount of Cobalt’s loss. The court reasoned that the settlement was not the result of a "fully adversarial proceeding," as Cobalt bore no actual risk of liability for the damages agreed upon in the settlement. The court conditionally granted the Insurers' petition for a writ of mandamus in part, ordering the trial court to vacate its previous orders to the extent they relied on the holding that the settlement agreement was admissible and binding to establish coverage under the policies and the amount of any covered loss. View "IN RE ILLINOIS NATIONAL INSURANCE COMPANY" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court in this declaratory judgment suit, holding that a corporate resolution did not authorize the law firm to redeem a departing shareholder's shares on terms unilaterally set by the firm's founders.Under Tex. Bus. Orgs. Code 21.801 , a professional corporation may redeem corporate shares, which are personal property, if one of three conditions is met. After the firm in this case terminated a shareholder's employment the founders purported to redeem his shares at no cost. The trial court concluded that a resolution generally authorizing the founders to take affirmative action on behalf of the firm unambiguously encompassed redemption. The court of appeals affirmed. The Supreme Court reversed, holding that the resolution did not authorize redemption of the departing shareholder's shares on terms dictated by the founders. View "Skeels v. Suder" on Justia Law

In this tort and breach-of-contract lawsuit, the Supreme Court affirmed in part and reversed in part the trial court's take-nothing summary judgment entered on the claim brought by several affiliated retailers (the Retailers), holding that the trial court erred in part.The Retailers in this case sought to recoup millions of dollars in disallowed reimbursements for purchases their customers made under the federally-funded Supplemental Nutrition Assistance Program (SNAP) after a lengthy outage in a third-party contractor's Electronic Benefit Transfer (EBT) system. The Retailers had permitted their SNAP customers to make purchases during the system outage, as authorized by a federal regulation, but held the EBT transactions in abeyance until they could be submitted and the Retailers reimbursed. The EBT contractor, however, later declined reimbursement for nearly 90,000 transactions. The trial court rendered a final take-nothing judgment against the Retailers, and the court of appeals affirmed. The Supreme Court affirmed the judgment on the Retailers' breach of contract claim but reversed the judgment as to losses from certain transactions and the Retailers' tort claims, holding that the court relied on an erroneous construction of 7 C.F.R. 274.8(e)(1). View "Wal-Mart Stores, Inc. v. Xerox State & Local Solutions, Inc." on Justia Law

The Supreme Court affirmed in part and reversed in part the judgments of the court of appeals in these companion cases brought by advocacy groups supporting legalized abortion against Defendant, who publicly advocated against legalized abortion, holding that the court of appeals properly dismissed the defamation suit but erred in permitting the companion suit to advance.Plaintiffs claimed that Defendant legally defamed them by making statements that equated abortion to murder and by characterizing plaintiffs as criminal. One court of appeals concluded that Defendant's statements were political opinions that voiced disagreement with legal protections afforded to abortion providers and dismissed the suit. The other court of appeals concluded that the statements were inconsistent with the Penal Code and permitted that defamation suit to continue. The Supreme Court reversed in part, holding that Defendant properly invoked the Texas Citizens Participation Act and that Plaintiffs failed to adduce evidence of defamation in response. View "Dickson v. Afiya Center" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's dismissal of the complaint and reinstated the judgment of the trial court dismissing all of Petitioner's claims against Respondents for breach of contract, fraud, and related torts, holding that the discovery rule did not defer accrual of Petitioner's cause of action until it knew that Respondents caused its injury.The trial court granted summary judgment in favor of Petitioner on the grounds that Respondents' claims were time-barred. The appellate court reversed, concluding that the discovery rule deferred accrual of Respondents' cause of action until it knew that Petitioner caused its injury. The Supreme Court reversed and reinstated the dismissal of all claims, holding that summary judgment was appropriate because, at the time of the breach of contract at issue, Respondent learned of facts that, if pursued, would have led to the discovery of Petitioner's alleged misrepresentations. View "Marcus & Millichap Real Estate Investment Services of Nev. v. Triex Texas Holdings, LLC" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court for a pioneering cardiovascular surgeon in this dispute between the surgeon and the hospital where he formerly worked, holding that the evidence was not legally sufficient to support the jury's award.Plaintiff and his professional association sued Defendant for engaging in a retaliatory "whisper campaign" against him after he left Defendant for a new rival hospital, alleging illegal restraint of trade (anticompetition claims), tortious interference with prospective business relations, defamation, and business disparagement. The jury rejected Plaintiff's anticompetition claims but found that Defendant had defamed Plaintiff and disparaged his professional association. Defendant appealed, arguing that no evidence supported the jury's defamation and disparagement findings. The court of appeals affirmed based on its interpretation of the jury charge. The Supreme Court reversed and rendered a take-nothing judgment for Defendant, holding that no evidence supported the jury's award in this case. View "Memorial Hermann Health System v. Gomez" on Justia Law

The Supreme Court answered certified questions asking whether Tex. Alco. Bev. Code 22.16(f) continues to exempt a public corporation if that corporation sells some or all of its shares to a non-exempt corporation and, if so, whether the exempt corporation can acquire additional package store permits, holding that the answer to those questions is yes.In 1995, the legislature prohibited public corporations from owning or holding an interest in package store permit and, at the same time, exempted from this prohibition any public corporation that, as of April of that year, already had permits or had permit applications pending. The Court of Appeals of the Fifth Circuit certified questions about the scope of the exemption. The Supreme Court answered both questions in the affirmative, holding that an exempt corporation in which a non-exempt corporation has an interest cannot hold a package store permit. View "Gabriel Investment Group, Inc. Texas Alcoholic Beverage Commission" on Justia Law

In this challenge to a share issuance the Supreme Court held that the probate court improperly submitted an invalid theory of liability to the jury and that the trial court's charge error probably caused the rendition of an improper judgment.In the weeks before he died, Dick Poe, the sole director of Poe Management, Inc. (PMI), authorized the corporation to issue new shares and then bought the new shares for $3.2 million, making him the majority owner of PMI. Dick's death vested control of the family-owned car-dealership enterprise in the two co-executors of Dick's estate. Richard, Dick's son and PMI's only other shareholder, brought this action challenging the share issuance as a breach of Dick's fiduciary duty. The trial court rendered judgment in favor Richard. The Supreme Court reversed and remanded the case for a new trial, holding that the probate court erred in charging the jury in two respects and that the errors were harmful. View "In re Estate of Poe" on Justia Law