Texas Supreme Court Opinions – May 10, 2019
Posted by Rich Phillips, Melissa Davis, andEmily Fitzgerald
On Friday, May 10, 2019, the Supreme Court issued opinions in four argued cases (two of which were consolidated, so there is only one opinion for those two cases). This leaves the Court with 20 argued cases left to be decided before the summer recess.
This opinions issued today are:
No. 17-0365, Chambers-Liberty Counties Navigation Dist. v. State of Texas consolidated with No. 17-0404, In re Sustainable Texas Oyster Res. Mgmt., LLC — These consolidated cases arose from a dispute about whether the Texas Department of Parks and Wildlife has the exclusive authority to allow oyster cultivation on certain submerged land in and around Galveston Bay. The Chambers-Liberty Counties Navigation District leased the land to Sustainable Texas Oyster Resource Management, L.L.C. ("STORM"), and the State sued the District, its officers, and STORM, seeking both to invalidate the lease and to recover money damages under two provisions of the Natural Resources Code. The District filed a plea to the jurisdiction, arguing that the State's claims were barred by the District's governmental immunity. The trial court denied the plea, and the State appealed. STORM was not a party to the appeal in the court of appeals. The court of appeals reversed as to both the claim for damages and the claim to invalidate the lease. When the District sought review in the Supreme Court, STORM also filed a petition for review (in the same cause number) and filed a separate petition for a writ of mandamus.
In a unanimous opinion by Justice Blacklock (Justice Busby did not participate), the Supreme Court first held that the State's claim for money damages is barred by the District's governmental immunity. The Court rejected the State's argument that the only reasonable construction of the Natural Resources Code sections at issue is that the Legislature waived the District's immunity. The Court then analyzed the District's authority and the authority granted to the Parks and Wildlife Department and held that the State had pleaded a viable claim that the District's officers acted ultra vires in entering into the lease.
In addressing arguments raised by STORM, the Court first rejected STORM's request to be granted party status in the Supreme Court. The Court noted that STORM had not explained why the District did not adequately represent its interests or why STORM's arguments could not be adequately considered if they were made as an amicus curiae, rather than as a party. The Court also noted that STORM did not seek to be granted party status in the court of appeals. The Court also rejected STORM's mandamus petition because STORM had not sought any mandamus relief in the court of appeals first.
No. 17-0637, The Dallas Morning News v. Hall — Justice Brown wrote the opinion for the unanimous Court (Justice Busby did not participate) in yet another Texas Citizens Participation Act appeal, finding that this defamation case should be dismissed and remanding to the trial court for an award of fees. The Halls sued The Dallas Morning News after it published a series of articles about allegations of questionable practices in the compounding-pharmacy (“designer drug”) industry, several of which featured allegations relating to the Halls’ compounding-pharmacy business, RXpress. The articles related allegations made against RXpress in several lawsuits and stated that federal authorities were investigating RXpress regarding doctor kickbacks. The articles also reported an indictment and large-scale criminal investigation into compounding pharmacies generally. The Halls attributed two defamatory meanings to the articles: (1) RXpress was under investigation and (2) RXpress was guilty of committing a crime.
With respect to the first defamatory meaning, the Court determined that the Halls failed to present prima facie evidence that the articles’ contention that RXpress was under investigation was false. That allegation was based on a Department of Defense warrant to search the home of a pharmaceutical maker for, among other things, communications with the Halls or relating to RXpress. The Court rejected the Halls’ contention that the search warrant itself was evidence of the absence of an investigation. It also rejected their reliance on Hall’s affidavit stating that RXpress was not under investigation, that he’d not heard anything about an investigation, and that he’d inquired with law-enforcement officers and been told there was not an investigation. The Court stated that the fact that Hall was not aware of an ongoing investigation did not mean there was not one, and Hall could not rely on hearsay statements of law enforcement officers to establish personal knowledge. Finally, the Court rejected the Halls’ reliance on expert evidence of falsity, determining that no expertise was needed to understand the falsity evidence.
With respect to the second defamatory meaning, the Court held that the statements were statutorily privileged because the article conveyed allegations made in legal proceedings without juxtaposing them in a way that created a strong implication that the allegations were likely true.
No. 18-0071, Godoy v. Wells Fargo Bank, N.A. — In this debt-collection action, the Court reaffirmed that contractual waivers of statutes of limitations must be sufficiently specific to not be void as against public policy. GDG Mortgage, Inc. borrowed $250,000 from Wells Fargo’s predecessor Wachovia Bank, which was guaranteed by Gerald Godoy. The guaranty included a waiver of statutes of limitations and other defenses. GDG defaulted, and Wells Fargo foreclosed on the property. Wells Fargo purchased the property at the foreclosure sale in November 2011, but the purchase price was insufficient to satisfy GDG’s unpaid balance. In June 2015, Wells Fargo sued Godoy to recover the deficiency. Godoy moved for summary judgment, arguing that Wells Fargo’s debt-deficiency claim was barred by a two-year statute of limitations. Wells Fargo cross-moved for summary judgment, arguing that Godoy waived the two-year statute of limitations in the guaranty agreement. The trial court granted Wells Fargo’s motion. Godoy appealed, arguing that the waiver was void as against public policy. The court of appeals held that the guaranty waived the statute of limitations and Godoy failed to affirmatively plead his public-policy argument as a “matter constituting avoidance” under Texas Rule of Civil Procedure 94.
In a unanimous opinion by Justice Blacklock (Justice Busby did not participate), the Supreme Court held that the guaranty waived the two-year statute of limitations for the debt-deficiency claim because the waiver was sufficiently “specific” and tailored to “a reasonable time.” However, the Court held that other limitations waivers in the guaranty were unenforceable because they purported to completely waive all limitations periods. The Court clarified that blanket pre-dispute waivers of all statutes of limitation are unenforceable, but waivers of a particular limitations period for a defined and reasonable amount of time may be enforced. The Court addressed the Rule 94 issue, and noted that requiring a party to amend its answer just to make a purely legal argument during summary judgment briefing in support of an already-pleaded affirmative defense does not serve the purpose of the Rules of Civil Procedure. The Court ultimately did not decide whether Godoy was required to plead his public-policy argument under Rule 94 because Wells Fargo waived the alleged pleading error by not raising it in the trial court.