Articles Posted in Texas Supreme Court

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Mark Fisher and Reece Boudreaux were limited partners of Nighthawk Oilfield Services, Ltd. (“Nighthawk”), which acquired Richey Oilfield Construction, Inc. (“Richey Oil”) from Mike Richey. The business did not go well, and Nighthawk and Richey Oil filed for bankruptcy. Richey sued Fisher and Boudreaux in Wise County where Richey resided, alleging claims for, inter alia, breach of fiduciary duty, common law fraud, statutory fraud and violations of the Texas Security Act. Fisher and Boudreaux responded by moving to transfer venue to Tarrant County or dismiss the suit pursuant to the mandatory venue selection clauses in the acquisition documents. The trial court denied the motions. Fisher and Boudreaux sought mandamus relief from the court of appeals, which denied relief. The Supreme Court conditionally granted relief, holding that the trial court abused its discretion by failing to enforce the venue selection clauses in the acquisition documents. View "In re Fisher" on Justia Law

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Mike Richey sold his interest in Richey Oilfield Construction, Inc. to Nighthawk Oilfield Services, Ltd. Richey remained employed as president of Richey Oil and became a limited partner in Nighthawk. The primary agreements regarding the transaction were a stock purchase agreement, an agreement for the purchase of Richey Oil’s goodwill, and a promissory note. Each of the acquisition agreements contained a forum selection clause naming Tarrant County as the venue for state court actions. When the business did not go as well as the parties had hoped, Richey filed suit in Wise County, where Richey resided, against two Nighthawk executives (together, Relators) for, among other claims, breach of fiduciary duty, common law fraud, statutory fraud, and violations of the Texas Securities Act. Relators responded by unsuccessfully moving the trial court to transfer venue to Tarrant County or dismiss the suit pursuant to the mandatory venue selection clauses in the acquisition agreements. Relators subsequently sought mandamus relief. The Supreme Court conditionally granted relief, holding that the trial court abused its discretion by failing to enforce the forum selection clauses in the acquisition agreements. View "In re Fisher" on Justia Law

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Stephen filed suit against a former business partner, Evan, in Nevada and prevailed on his claims. To collect on the judgment, Stephen filed another suit in Nevada against both Evan and Marc, alleging that Evan had fraudulently transferred assets to Marc in violation of the Nevada Uniform Fraudulent Transfer Act (Nevada UFTA). The Nevada court dismissed Stephen's claims, concluding that it lacked personal jurisdiction over Marc. Stephen then filed the present suit in a Texas court under the Texas UFTA (TUFTA), alleging that Evan had fraudulently transferred assets to Marc. The trial court granted summary judgment for Marc, concluding that TUFTA's four-year statute of repose extinguished Stephen's claim. The court of appeals reversed, holding that Tex. Civ. Prac. & Rem. Code 16.064(a) suspended the expiration of TUFTA's statute of repose and allowed Stephen to file this suit within sixty days after the Nevada court dismissed the second Nevada suit for lack of personal jurisdiction. The Supreme Court reversed, holding that because the TUFTA provision that extinguished Stephen's claim was a statute of repose, and section 16.064 applies only to statutes of limitations, section 16.064 did not save or revive Stephen's claim. View "Nathan v. Wittington" on Justia Law

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Title to property of a local church (the Good Shepherd) was held by a Texas non-profit corporation (Corporation). The Corporation was formed as a condition of Good Shepherd's congregation being accepted into union with the Episcopal Diocese of Northwest Texas (Diocese). After members of Good Shepherd's parishioners began to disagree with doctrinal positions adopted by The Episcopal Church of the United States (TEC), a majority of the congregation voted to amend Good Shepherd's articles of incorporation and bylaws to withdraw God Shepherd from communion with TEC and the Diocese. The Corporation and the withdrawing faction maintained possession of the property. The Diocese and leaders of the portion of the congregation loyal to TEC and the Diocese filed suit seeking possession of the property. The trial court granted summary judgment for the loyal faction, and the court of appeals affirmed. The Supreme Court reversed, holding (1) the legal methodology called "neutral principles of law," rather than "deference," should be applied in this case; and (2) applying neutral principles of law to the record, the trial court erred by granting summary judgment. Remanded. View "Masterson v. Diocese of Northwest Texas" on Justia Law

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The Fort Worth Diocese was formed in 1982 and was admitted into union with The Episcopal Church (TEC). The Fort Worth Corporation was formed the next year. After a doctrinal controversy arose within the TEC, the Forth Worth Corporation filed amendments to its articles of incorporation to remove all references to TEC. The Fort Worth Diocese then voted to withdraw from TEC. TEC later filed suit against the Fort Worth Diocese, the Fort Worth Corporation, the former Bishop, and other former TEC members (the Diocese) seeking possession of the property held in the name of the Diocese and the Fort Worth Corporation. The parties disagreed whether the "deference" or "neutral principles of law" methodology should be applied to resolve the property issue. The trial court agreed with TEC that deference principles should apply, and after applying deference principles, granted summary judgment for TEC. The Supreme Court reversed, holding (1) based on the Court's decision in Masterson v. Diocese of Northwest Texas, the trial court erred by granting summary judgment to TEC on the basis of deference principles; and (2) the case must be remanded for further proceedings under neutral principles. Remanded. View "Episcopal Diocese of Fort Worth v. Episcopal Church" on Justia Law

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Several hospitals (Hospitals) sued Aetna, Inc. and Aetna Health, Inc. (collectively Aetna) for allegedly violating the Prompt Pay Statute. Aetna provided a Medicare plan (Plan) through an HMO called NYLCare. It delegated the administration of its Plan to North American Medical Management of Texas (NAMM), a third-party administrator. IPA Management Services (Management Services) provided medical services to Plan enrollees. Management Services entered into contracts with the Hospitals to secure hospital services for the Plan employees. Aetna was not a party to these contracts. The Hospitals submitted hospital bills to NAMM for payment. After NAMM and Management Services became insolvent, Aetna de-delegated NAMM and assumed responsibility for processing and paying claims. However, Aetna instructed the Hospitals to continue submitting their bills to NAMM. The Hospitals argued that Aetna was liable for NAMM's failure to timely pay claims and was responsible for $13 million in outstanding bills. The trial court granted summary judgment for Aetna. The court of appeals affirmed, concluding that because the Hospitals entered into contracts with Management Services and not with Aetna directly, the Hospitals had no viable prompt-pay claim. The Supreme Court affirmed, holding that the lack of privity between the Hospitals and Aetna precluded the Hospitals' suit. View "Christus Health Gulf Coast v. Aetna, Inc." on Justia Law

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This case was before the Supreme Court a second time and concerned a business dispute between Rancho La Valencia, Inc. and Aquaplex, Inc. In the earlier appeal, the Court held that the evidence of fraudulent intent by Rancho in connection with the execution of a memorandum of settlement agreement was legally sufficient but that the evidence did not support damages to the level awarded by the trial court. On remand, the court of appeals remanded the case to the trial court for a new trial on the issue of damages. Rancho appealed, complaining that the court of appeals should have remanded the case for a new trial on both liability and damages, as Rancho requested in a motion for rehearing to the court of appeals. The Supreme Court agreed, holding that Tex. R. App. P. 44.1 required the court of appeals to remand for a new trial on both liability and damages. Remanded. View "Rancho La Valencia, Inc. v. Aquaplex, Inc." on Justia Law

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A corporation (Infodisc) and one of its subsidiaries (M-TX) defaulted on a loan from a bank. A California court placed the borrowers in receivership to liquidate their assets securing the loan, and an ancillary receivership was opened in Texas. Meanwhile, another Infodisc subsidiary, a California corporation (M-CA), declared bankruptcy. The receiver claimed and sold property in a Texas warehouse that the Landlord alleged was not leased to Infodisc or M-TX but to M-CA. The parties disputed who the tenant was and who owned the property and fixtures in the warehouse. After the trial court rejected almost all of the Landlord's claims, the Landlord appealed. The court vacated the trial court's judgment and dismissed the case, holding that the proceedings violated the automatic stay even though M-CA was not a party to the case. The Supreme Court granted review and reversed, holding that the court of appeals should have abated the appeal to allow the application of the automatic stay to be determined by the trial court in the first instance. Remanded. View "Evans v. Unit 82 Joint Venture" on Justia Law

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At issue in this case was whether mere statements of intent to discontinue a joint venture cause automatic dissolution of the venture as a matter of law. Plaintiff sued Defendant for breach of an oral agreement, alleging that Defendant promised to transfer his interest in the venture to Plaintiff. Defendant denied the existence of this contract. The trial court granted summary judgment in favor of Plaintiff. The court of appeals affirmed, reasoning that Defendant's communications to Plaintiff were conclusive evidence of dissolution of the joint venture and warranted summary judgment on the basis that Defendant lacked standing to assert any claims to the venture. The Supreme Court reversed, holding that because Defendant produced evidence creating a genuine issue of material fact as to his intent to dissolve the partnership, the court of appeals erred in affirming summary judgment on that basis. Remanded. View "Buck v. Palmer" on Justia Law

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In this original proceeding Allcat, a limited partnership, and one of its limited partners sought an order directing the Comptroller to refund franchise taxes Allcat paid that were attributable to partnership income allocated, but not distributed, to its natural-person partners. Allcat claimed it was entitled to a refund for two reasons. First, the tax facially violated Article VIII, Section 24 of the Texas Constitution because it was a tax on the net incomes of its natural-person partners that was not approved in a statewide referendum. Second, as applied by the Comptroller, to Allcat and its partners, the franchise tax violated Article VIII, Section 1(a) of the Constitution, which required taxation to be equal and uniform. The court held that: (1) the tax was not a tax imposed on the net incomes of the individual partners, thus it did not facially violated Article VIII, Section 24; and (2) the court did not have jurisdiction to consider the equal and uniform challenge.