Helping Trial Lawyers Navigate the Appellate System

Supreme Court Ends Summer Recess

The Texas Supreme Court ended its summer recess with a bang by issuing seven opinions today.

In In re H&R Block Financial Advisors, Inc., the per curiam Court conditionally granted mandamus relief from a trial court’s order refusing to stay the plaintiffs’ lawsuit in light of an arbitration clause.  The Court rejected the plaintiffs’ attempts to avoid arbitration with their investment advisor and his firm over Enron-related losses because the firm had changed its name and because the advisor did not sign the investment agreements in his personal capacity.

In In re Merrill Lynch Trust Co., the Court conditionally granted mandamus relief and compelled arbitration against employees of the entity with whom plaintiffs agreed to arbitrate, but not affiliates of that entity.  With respect to the employee, the Court reasoned that the substance of plaintiffs’ lawsuit was against the signatory, even though it was not named as a party, and that the signatory would be liable for the employee’s torts.  Regarding the affiliates, the Court rejected “an estoppel theory based on substantially interdependent and concerted misconduct” as a basis for imposing an obligation to arbitrate upon a nonsignatory, even though the case was governed by the Federal Arbitration Act and the Fifth Circuit has recognized such a theory.  Justice Hecht (joined by Justice Medina and in part by Justice O’Neill) and Justice Johnson (joined by Justice Wainwright) each issued opinions concurring and dissenting.

In Energy Service Co. v. Superior Snubbing Services, Inc., the Court held that a Worker’s Compensation-subscribing employer’s agreement to indemnify a person and that person’s contractors was an agreement with the contractors for purposes of the Worker’s Compensation Act, as amended in 1989.  Justice Johnson (joined by Justices Wainwright, Green, and Willet) dissented.

In Fort Worth Independent School District v. Service Employment Redevelopment, the per curiam Court continued the trend of remanding breach-of-contract cases against governmental entities to allow plaintiffs to argue that the legislature waived sovereign immunity under new Sections 271.151-.160 of the Local Government Code.

In Gaines v. Kelly, a no-evidence summary judgment case, the Court held that the borrower/plaintiff presented no evidence that a mortgage broker had apparent authority to bind a lender and therefore rendered judgment that the plaintiff take nothing on the borrower’s claim against the lender based on the mortgage broker’s alleged misrepresentations.

In In re Kaplan Higher Education Corp., the per curiam Court conditionally granted mandamus relief from a trial court’s order refusing to compel arbitration under an agreement between a vocational college and 45 of its students, even though the students had dropped their direct claims against the college and were asserting claims against only the president and admissions director, because the substance of the action was fraudulent inducement and because the college would have been liable for the judgment under the Education Code and common law.

The following statement from Elledge v. Friberg-Cooper Water Supply Corp. (per curiam) says it all:  “We reject the court of appeals’ ‘obiter dictum‘ label.  Our statements that the two-year statute [of limitations, rather than the four-year statute] applies to unjust enrichment claims, though not essential to the outcomes in HECI [Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998)] and Wagner & Brown, [Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001)], should have been followed.”


D. Todd Smith
About the Author

D. Todd Smith is an Austin-based civil appellate specialist who works with trial teams from the earliest stages of litigation. In trial courts, he takes the lead on strategic analysis and briefing, jury charges, and potentially dispositive motions, all with a focus on preserving error and positioning cases for appellate review.

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