Error Preservation in Texas Civil Cases, April 6, 2020

April 5, 2020

Dear All:

I hope everyone is doing well and staying safe.  The courts have certainly stayed busy over the last week or so, as this Table of Contents reveals:

Table of Contents

The Supreme Court weighed in on when a legal sufficiency complaint would preserve a complaint that a hearing commissioner relied on the wrong standard to review a board’s decision

We have a case which held that a party did not waive the right to a jury trial, but the opinion’s real value lies in the extensive discussion of the two lines of cases concerning jury trial waiver.  That discussion is too long to include here

We also have a case that emphasizes the need for a written order concerning an objection to summary judgment evidence, even if the trial court orally “sustain[s your] objection and [strikes] the report from the summary judgment evidence.”

We also have one of those rare cases in which the Court confirmed that an attorney had made an evidentiary objection in such a fashion and at such a time that it was sufficient to make the trial court aware of the complaint, and where the court of appeals reversed the trial court’s judgment based on an evidentiary objection

One case held that a party preserved a complaint about the economic loss doctrine

Your complaint must be timely

Contract

The complaint you make on appeal must comport with the complaint you made at trial

Jury Findings

You have to comply with other pertinent rules

Evidence

The Blurbs

The Supreme Court weighed in on when a legal sufficiency complaint would preserve a complaint that a hearing commissioner relied on the wrong standard to review a board’s decision:

Legal Sufficiency: “In this Court, the district and the Commissioner contend that the evidence supports the board’s decision. In addition, as a threshold matter, they contend that Riou failed to challenge the application of a good cause per se exception at the local level, and thus she failed to preserve her complaint for judicial review.

We hold that Riou preserved her complaint. Riou challenged the sufficiency of the evidence supporting good cause to end her contract before the school board and the Commissioner. Riou’s argument that the Commissioner excused this lack of evidence by relying on an improper “per se” standard [*4] falls within this challenge.
. . . .
Riou acknowledges that she “did not expressly specify that the good cause per se standard was the wrong legal standard” before the school board. But she maintains she nonetheless “argued against the sufficiency of the evidence used to support the [hearing examiner’s] recommendation.” And, “she has continuously argued that [the district] failed to meet [*19] its burden of proof to terminate her continuing contract.”

The district and the Commissioner characterize Riou’s argument regarding the “good cause per se” exception as an unraised issue. But this argument supports Riou’s larger position that the Commissioner’s decision lacks substantial evidence—a position she has maintained at every stage. Riou argues that the board’s decision lacks evidence to support it under the correct legal standard, using the proper statutory definition. While section 21.301(c) confines the Commissioner’s review to the “local record,” implementation of a per se standard is in the local record in this case; the examiner relied on it to find good cause.

Riou’s consistent position is that the district lacked good cause to end her contract, and that the board’s decision is unsupported by the evidence. That argument fairly includes the examiner’s application of an exception that relieved the district from its statutory burden to show that Riou failed to meet professional standards “generally recognized and applied in similarly situated school districts.” Riou argued extensively at the school board meeting that the district failed to carry its burden to show good cause, a position [*20] she maintained on appeal to the Commissioner. Because her challenge to a “good cause per se” exception falls within the scope of her challenge to the sufficiency of the evidence, we agree with the court of appeals that Riou preserved her challenge to the examiner’s use of “good cause per se” in ruling in favor of the district.” N. E. Indep. Sch. Dist. v. Riou, No. 18-0986, 63 Tex. Sup. Ct. J. 661, 2020 Tex. LEXIS 257, at *3-4, 18-20 (Mar. 27, 2020).

While I’ve omitted the footnotes from the foregoing discussion, I do think it worth mentioning that the Supreme Court did point out that “while we do not consider unraised issues, ‘parties are free to construct new arguments in support of issues properly before the Court,’” quoting its opinion in Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 764, n. 4 (Tex. 2014).

Here is a case which held that a party did not waive the right to a jury trial, but its real value lies in the extensive discussion of the two lines of cases concerning jury trial waiver. That discussion is too long to include here:

Jury Trial: “Here, consistent with McKern and Coleman, J.S.C.’s counsel expressed the intention to rely on T.M.’s jury demand, the trial court struck the demand, and counsel objected to the trial court’s striking of the jury demand. Thus, he obtained an adverse ruling from the trial court on the jury demand on which he was entitled to rely. See McKern, 675 S.W.2d at 223-24; Coleman, 608 S.W.2d at 346-47; Rhyne, 925 S.W.2d at 666. The adverse ruling removed the possibility of a jury trial and left J.S.C. with no choice but to proceed with the [*25] bench trial. See E.E., 2020 Tex. App. LEXIS 1713, 2020 WL 962400, at *5. Although J.S.C. did not further object on the day of the bench trial, the record also does not show that he otherwise knowingly waived his right to a jury trial. See Brubaker, 2019 Tex. App. LEXIS 10062, 2019 WL 6205518, at *3. Accordingly, we conclude that J.S.C. did not waive his right to a jury trial by participating in the bench trial.” In the Interest of J.M., No. 12-19-00353-CV, 2020 Tex. App. LEXIS 2666, at *24-25 (Tex. App.—Tyler Mar. 31, 2020)

Here’s one that emphasizes the need for a written order concerning an objection to summary judgment evidence, even if the trial court orally “sustain[s your] objection and [strikes] the report from the summary judgment evidence.” I could get into a discussion here about whether the Texarkana Court should have relied on Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572 (Tex. 2017), instead of Seim and whether Seim at least impliedly approved an oral ruling. But the point here is: get a written ruling on your objections to summary judgment evidence, especially if the trial court sustains those objections:

Summary Judgment: “Even if a trial [*19] court sustains a party’s objection to an opponent’s summary-judgment evidence, the objected-to evidence remains a part of the summary-judgment proof unless the trial court’s order is reduced to writing, signed by the trial court, and entered of record.  See Seim v. Allstate Tex. Lloyds, 551 S.W.3d 161, 166 (Tex. 2018) . . . .  Here, even though the trial court granted Altech’s objection to Pleasant Grove’s G-Max report, the court’s order was not reduced to writing, signed, and entered of record. Accordingly, the report remains a part of the summary-judgment proof. See Seim, 551 S.W.3d at 166. The results of the report indicate that the field’s individual and average G-Max ratings exceeded those required by the specifications, which creates a dispute regarding a material fact. Therefore, the trial court erred in granting Altech’s no-evidence and traditional motions for summary judgment as to the G-Max testing. Accordingly, we reverse the trial court’s order and remand the case for further proceedings consistent with this opinion.” Pleasant Grove Indep. Sch. Dist. v. FieldTurf USA, Inc., No. 06-19-00022-CV, 2020 Tex. App. LEXIS 2778, at *18-19 (Tex. App.—Texarkana Apr. 3, 2020)

Here is one of those rare cases in which the court confirmed that an attorney had made an objection in such a fashion and at such a time that it was sufficient to make the trial court aware of the complaint, and where the court of appeals reversed the trial court’s judgment based on an evidentiary objection:

Evidence: “ For appellant’s objection to have been sufficient, it must have been sufficiently specific “to make the trial court aware of the complaint.” TEX. R. APP. P. 33.1(a)(1)(A). During the discussion of appellant’s motion in limine, the prosecutor said the report would be offered as a business record, and appellant’s counsel said the report was prepared in anticipation of litigation. Even though the admissibility [*12] of the report was not the precise matter before the trial court when appellant made the objection, it was relevant to the discussion of the motion in limine. It appears from the record that appellant made his objection to the exhibit a short time later. Appellant’s objection renewing his previous objection should have been close enough in time for the trial court to be aware that appellant was objecting to the admission of the report as a business record on the ground that it had been prepared in anticipation of litigation. Accordingly, we conclude this objection was preserved for appellate review.” In re Commitment of Mumford, No. 05-19-00186-CV, 2020 Tex. App. LEXIS 2836, at *11-12 (Tex. App.—Dallas Mar. 31, 2020)

Here is one in which a party preserved a complaint about the economic loss doctrine :

Economic Loss Doctrine: “Dixie cites Equistar Chems. L.P. v. Dresser-Rand Co., 240 S.W.3d 864, 868 (Tex. 2007) to argue that Riverdale waived the economic loss rule by not pleading it as an affirmative defense or objecting to the charge. We disagree because that rule is not an affirmative defense and Riverdale (twice) opposed Dixie’s effort to obtain a conversion judgment because of the economic loss rule.

First, the economic loss rule is not an affirmative defense. Id.; see also 64 Baylor L. Rev. 204, 208 (2012) (the economic loss rule is not an affirmative defense that must be pled but instead refers to what is to be considered as the proper measure of damages in a case to which it applies).

Second, Riverdale opposed Dixie’s post-remand motion for judgment based on conversion by arguing that the economic loss rule prevented that tort recovery.

Accordingly, Riverdale preserved its argument that the economic loss rule precludes a Dixie judgment based on conversion (and its attendant potential ability to also [*28] recover the punitive damages that the jury found). See Tex. R. App. P. 33.1.” Dixie Carpet Installations, Inc. v. Residences at Riverdale, LP, No. 05-18-01479-CV, 2020 Tex. App. LEXIS 2734, at *27-28 (Tex. App.—Dallas Apr. 1, 2020)

Your complaint must be timely:

Contract: “When a trial court [*10] denies a motion for summary judgment and the case is tried on the merits, the order denying the summary judgment cannot be reviewed on appeal. United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914, 916 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). The party’s remedy is to assign error to the trial court’s judgment ultimately rendered following the trial on the merits. Id. To preserve error for a “matter of law” challenge to the trial court’s judgment following a jury trial, an appellant must raise the issue through one of the following means: (1) a motion for directed verdict; (2) a motion for judgment notwithstanding the verdict; (3) an objection to the submission of the question to the jury; (4) a motion to disregard the jury’s answer to a vital fact question; or (5) a motion for new trial. See, e.g., Ginn v. Pierce, No. 14-17-00742-CV, 2019 Tex. App. LEXIS 8459, 2019 WL 4511328, at *1 (Tex. App.—Houston [14th Dist.] Sept. 19, 2019, no pet. h.); Tasdemiroglu, 25 S.W.3d at 916.

Although Interoil raised its contractual-interpretation issues in a motion for summary judgment, Interoil did not request a directed verdict at trial, nor did it raise this issue in its motion for judgment notwithstanding the verdict. Interoil did not object to the submission of Question No. 1, move to disregard the jury’s answer, or move for a new trial. Accordingly, Interoil failed to preserve error for its “matter of law” issues regarding whether the Schahin transactions were “CFI [*11] Sales” under the 2009 services agreement.” C&F Int’l, Inc. v. Interoil Servs., LLC, No. 14-18-00698-CV, 2020 Tex. App. LEXIS 2751, at *9 (Tex. App.—Houston [14th Dist.] Apr. 2, 2020)

The complaint you make on appeal must comport with the complaint you made at trial:

Jury Findings: “As explained, we do not consider unpreserved issues on appeal. See Fed. Deposit Ins. Corp., 361 S.W.3d at 604; see also Allright, Inc., 735 S.W.2d at 240 (“A point of error not preserved, is not before the appellate court for review.”). And to preserve a complaint for appellate review, the complaining party must present the complaint to the trial court by timely request, objection, or motion. TEX. R. APP. P. 33.1(a). A party’s argument on appeal must comport with the complaint made in the trial court. See Hussain, 485 S.W.3d at 174. The complaint raised in the trial court must state the grounds for the ruling sought “with sufficient specificity to make the trial court aware of the complaint.” TEX. R. APP. P. 33.1(a); see also Hussain, 485 S.W.3d at 174; Chappell Hill Bank, 38 S.W.3d at 246-47.

Although appellants did, in their second motion to disregard jury findings and for JNOV, assert that the trial court should disregard the jury’s findings on its counterclaim against Ashby LLP for breach of fiduciary [*50] duty and enter judgment in their favor on the counterclaim, appellants did not argue that Ashby LLP breached its fiduciary duty as a matter of law by not making disclosures to the bankruptcy court required by 11 U.S.C. § 329 and Federal Rule of Bankruptcy Procedure 2016(b) and by misleading the bankruptcy court “to believe it was no longer seeking a 40% contingency (worth $ 480,000) in connection with the controversy.” Instead, appellants argued that the trial court should disregard the jury’s findings and enter judgment in their favor on their breach-of-fiduciary-duty counterclaim because the evidence conclusively established that Ashby LLP obtained a benefit from Amerjin and Ashby LLP breached its fiduciary duty to Amerjin by misrepresenting Contract 4, by not informing Amerjin and Zhu that Ashby LLP would “be paid by the hour,” yet also “intend[ing] to take a contingency fee,” engaging in self-dealing, taking advantage of appellants’ trust, and not disclosing “conflicts of interest.”” Amerjin Co., LLC v. Ashby LLP, No. 01-18-00231-CV, 2020 Tex. App. LEXIS 2651, at *49-50 (Tex. App.—Houston [1st Dist.] Mar. 31, 2020)

You have to comply with other pertinent rules:

Evidence: “Here, Mother’s counsel requested that she be allowed “to present new testimony and new evidence” at the de novo hearing. The trial court denied that request. Mother, however, did not submit an offer of proof or make a bill of exception with respect to the excluded evidence, and we [*22] are left to guess as to its substance and what it might prove. Thus, Mother has waived her third issue by failing to preserve in the record the substance of the evidence that the trial court excluded. See Tex. R. Evid. 103; Tex. R. App. P. 33.1(a)(1)(B), 33.2; Dillard, 2019 Tex. App. LEXIS 9039, 2019 WL 5089759, at *2. We overrule Mother’s third issue.” In the Interest of J.V., No. 02-19-00392-CV, 2020 Tex. App. LEXIS 2678, at *21-22 (Tex. App.—Fort Worth Apr. 1, 2020)

We then had several opinions in which the parties failed to raise their complaints in the trial court.

I hope this helps.  Stay safe and well.

Yours, Steve Hayes.

shayes@stevehayeslaw.com; www.stevehayeslaw.com

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