Error Preservation in Texas Civil Cases, June 24, 2020

June 24, 2020

Dear All:

The good news is that–per Blake Hawthorne–the Supreme Court’s case management system is reconnected to the efiling system; now SCOTX will have to procees about 2,000 post-May 6 filings into its case management system.  But at least it can start moving forward.

On to error preservation. This last week, I found error preservation opinions from (in numerical order) the Houston First, Dallas, Eastland, Tyler, Corpus Christi-Edinburg, and Houston Fourteenth hit Lexis this week. Last week, I only found error preservation decisions from the Dallas Court, but they all held that the pertinent complaint had not been raised in the trial court, as I recall.

Table of Contents

The Supreme Court held that a complaint to an expert’s methodology is waived if not raised by objecting to his testimony at trial–and pointed out that “a challenge to an expert’s underlying methodology necessarily requires a court to look beyond what the expert said to evaluate the reliability of his opinion,” such as a complaint about an expert’s “failure to deduct certain costs,” which is a “challenge to the formula he used”

The Supreme Court also pointed out that a complaint about an expert’s conclusory testimony did not have to be raised as an admissibility objection, but could be preserved through a legal sufficiency complaint

The Supreme Court also weighed in on whether “the authority of a partner to recover for an alleged injury to the value of its interest in the partnership” is “a matter of constitutional standing that implicates subject-matter jurisdiction” –and held that it was not. Therefore, this authority was a matter of capacity–and a challenge to that capacity was waived by the failure to file a verified plea challenging capacity–a holding with which Justice Bland disagreed

The Dallas Court held that the Supreme Court’s decision in Seim allows for the granting of a summary judgment motion to act as an implied ruling on objections to summary judgment evidence. Do not run this risk. Get an express ruling on your summary judgment evidentiary objections

Complaints about the sufficiency of the evidence–like an arithmetic miscalculation of the trial court–may first be raised on appeal in a bench trial

You have to make a record

Your complaint must be timely–but an amended answer may be timely enough to assert an affirmative defense

Affirmative Defenses (maritime law)

The Blurbs

The Supreme Court held that a complaint to an expert’s methodology is waived if not raised by objecting to his testimony at trial–and pointed out that “a challenge to an expert’s underlying methodology necessarily requires a court to look beyond what the expert said to evaluate the reliability of his opinion,” such as a complaint about an expert’s “failure to deduct certain costs,” which is a “challenge to the formula he used”:

Expert: “When a party wishes to complain that expert testimony is legally insufficient to support the judgment because the basis offered for it is unreliable, it should challenge the admission of the testimony before trial or object when it is offered. See City of San Antonio v. Pollock, 284 S.W.3d 809, 816-17 (Tex. 2009). But a party need not object in order to challenge the expert testimony as conclusory or speculative on its face; it need only preserve a challenge to the legal sufficiency of the evidence, which it may do post-verdict. See id. As we have explained:

When the expert’s [*41] underlying methodology is challenged, the court “necessarily looks beyond what the expert said” to evaluate the reliability of the expert’s opinion. When the testimony is challenged as conclusory or speculative and therefore non-probative on its face, however, there is no need to go beyond the face of the record to test its reliability. We therefore conclude that when a reliability challenge requires the court to evaluate the underlying methodology, technique, or foundational data used by the expert, an objection must be timely made so that the trial court has the opportunity to conduct this analysis. However, when the challenge is restricted to the face of the record—for example, when expert testimony is speculative or conclusory on its face—then a party may challenge the legal sufficiency of the evidence even in the absence of any objection to its admissibility.

Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004) (citations omitted).

Requiring an admissibility objection to the reliability of expert testimony gives the proponent a fair opportunity to cure any deficiencies and prevents trial and appeal by ambush. Pollock, 284 S.W.3d at 817. Thus, when an expert opinion “is admitted in evidence without objection, it may be considered probative evidence even if [*42] the basis of the opinion is unreliable.” Id. at 818. But conclusory or speculative opinion testimony is not relevant evidence because it does not make the existence of a material fact more or less probable. Coastal Transp. Co., 136 S.W.3d at 232 (citing Tex. R. Evid. 401). Evidence that lacks probative value will not support a jury finding even if admitted without objection. Id.; see Pollock, 284 S.W.3d at 816 (“Bare, baseless opinions will not support a judgment even if there is no objection to their admission in evidence.”).

The EMC plaintiffs contend that a party may challenge the legal sufficiency of expert testimony without objecting to its admission only if the challenge is based on a complete lack of supporting evidence. We disagree. Although expert testimony is conclusory (and an objection unnecessary) “if no basis for the opinion is offered,” it is likewise conclusory if “the basis offered provides no support” for the opinion. Pollock, 284 S.W.3d at 818; accord Burrow v. Arce, 997 S.W.2d 229, 236 (Tex. 1999) (holding affidavit conclusory and explaining that qualified expert “cannot simply say, ‘Take my word for it, I know'” because credentials do not supply a basis for opinion). We address below whether defendants needed to make an admissibility objection to preserve each of their challenges to the experts’ testimony.
. . . .

Defendants’ first challenge to Lygren’s 2011 base projection concerns his failure to deduct certain operational costs when calculating EBITDA. The EMC plaintiffs respond that this complaint is [*44] waived because it concerns Lygren’s underlying methodology and technique, and therefore it is a reliability challenge that had to be raised by objecting to his testimony at trial. We agree with the EMC plaintiffs.

As noted above, a challenge to an expert’s underlying methodology necessarily requires a court to look beyond what the expert said to evaluate the reliability of his opinion. Coastal Transp. Co., 136 S.W.3d at 233. A methodology challenge must be timely so there is an opportunity for the parties to develop the record and the trial court to conduct a reliability evaluation in its role as gatekeeper; it is not an analysis to be undertaken for the first time on appeal. See id.

Defendants’ challenge to Lygren’s failure to deduct certain costs is a challenge to the formula he used to determine EBITDA. Indeed, VHSC and Pike expressly assert that Lygren failed to follow “[t]he proper method for calculating EBITDA.” This challenge would require us to look beyond Lygren’s testimony and evaluate his underlying methodology and technique. Because defendants neither objected at trial nor developed the record regarding the proper method for calculating EBITDA, we do not address that question. See id.Pike v. Texas EMC, No. 17-0557, 2020 Tex. LEXIS 568, at *41, 43-44 (June 19, 2020)

The Supreme Court also pointed out that a complaint about an expert’s conclusory testimony did not have to be raised as an admissibility objection, but could be preserved through a legal sufficiency complaint:

Expert: “Defendants next complain that Lygren’s 2011 EBITDA base calculation is conclusory because his assumed sales price per ton has no basis in fact and was not validated through any market analysis or study. This argument challenges whether the factual basis Lygren offered supports his sales price assumption, so defendants were not required to raise it in an admissibility objection. See Pollock, 284 S.W.3d at 818.
. . . .
Defendants also complain that all of Lygren’s EBITDA testimony was conclusory because his projections for years after 2011 were based on unfounded assumptions about the Partnership’s sales increases. Defendants’ legal sufficiency challenge was likewise sufficient to preserve this complaint for appellate review. See id. at 818.” Pike v. Texas EMC, No. 17-0557, 2020 Tex. LEXIS 568, at *44 (June 19, 2020)

The Supreme Court also weighed in on whether “the authority of a partner to recover for an alleged injury to the value of its interest in the partnership” is “a matter of constitutional standing that implicates subject-matter jurisdiction” –and held that it was not. Therefore, this authority was a matter of capacity–and a challenge to that capacity was waived by the failure to file a verified plea challenging capacity–a holding with which Justice Bland disagreed:

Capacity: “In this Court, Walker argues the court of appeals erred in holding that a challenge to a partner’s ability to sue individually for injury to the partnership is an issue of capacity requiring special preservation, and he cites various cases referring to such a challenge as raising an issue of “standing.” We conclude, however, that the authority of a partner to recover for an alleged injury to the value of its interest in the partnership is not a matter of constitutional standing that implicates subject-matter jurisdiction. [*17]

Both capacity and standing are necessary to bring a lawsuit. See Coastal Liquids Transp., L.P. v. Harris Cty. Appraisal Dist., 46 S.W.3d 880, 884 (Tex. 2001). “A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.” Id. (quoting Nootsie, Ltd. v. Williamson Cty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996)). A plaintiff lacks capacity when, as pertinent here, he “is not entitled to recover in the capacity in which he sues.” Tex. R. Civ. P. 93(2).
. . . .
Having concluded that Walker’s challenge to EMC Cement BV’s “standing” does not concern subject-matter jurisdiction, we next consider whether it raises an issue of capacity requiring special preservation. In the court of appeals’ view, Walker is challenging EMC Cement BV’s authority to recover its loss in its capacity as a limited partner, [*23] and he waived this issue by failing to file a verified plea under Rule 93(2). We agree with the court of appeals that, by challenging EMC Cement BV’s ability to recover the lost value of its interest in the Partnership, Walker was challenging EMC Cement BV’s capacity. We need not decide whether EMC Cement BV lacked capacity to recover, however, because we conclude there is insufficient evidentiary support for EMC Cement BV’s damages even if it had capacity.” Pike v. Texas EMC, No. 17-0557, 2020 Tex. LEXIS 568, at *16-17 (June 19, 2020)

Dissent: “Because EMC Cement claimed an injury based on lost value of the partnership, we should dismiss its claim for lack of standing. As a limited partner, it lacked standing to recover the partnership’s lost profits. Because standing implicates subject-matter jurisdiction, the court of appeals erred in concluding that the defendant partners waived a challenge to this direct recovery. This Court compounds that error by disregarding a partnership’s status as an independent entity in concluding that derivative standing [*82] requirements may be waived—and a partnership’s recovery taken—in a limited partner’s enforceable judgment, in contravention of the limited partnership’s governing documents.

We instead should hold that EMC Cement, as a limited partner, has no legal standing to sue for an injury to EMC Production LP, the partnership, and dismiss EMC Cement’s recovery on that claim for lack of jurisdiction. Because we do not, I respectfully dissent to all but Part IV of the Court’s opinion and judgment.” Pike v. Texas EMC, No. 17-0557, 2020 Tex. LEXIS 568, at *81-82 (June 19, 2020) (Bland, J., dissenting)

Here is one in which the Dallas Court holds that the Supreme Court’s decision in Seim allows for the granting of a summary judgment motion to act as an implied ruling on objections to summary judgment evidence. Do not run this risk. Get an express ruling on your summary judgment evidentiary objections.

Summary Judgment Evidence: “MidFirst first contends appellants did not preserve error by obtaining an express ruling from the trial court on their objections. [*5] See Tex. R. App. P. 33.1(a).  In general, merely granting a motion for summary judgment does not indicate a ruling on objections to summary judgment evidence. See Seim v. Allstate Tex. Lloyds, 551 S.W.3d 161, 165 (Tex. 2018) (per curiam); Hogan v. J. Higgins Trucking, Inc., 197 S.W.3d 879, 883 (Tex. App.—Dallas 2006, no pet.) (implicit ruling requires some indication in record that trial court ruled on objections “other than the mere granting of the summary judgment”). However, the summary judgment here was clearly based on the affidavits and the documents attached to them. Because the trial court could not have reached its rulings without considering the evidence in the affidavits and the documents, we will assume without deciding the record is sufficiently clear that the trial court implicitly ruled the affidavits were admissible. See Seim, 551 S.W.3d at 166 (noting implicit ruling may be sufficient to preserve error where implication is clear). Accordingly, we will evaluate the merits of the objections asserted.” Botello v. MidFirst Bank, No. 05-19-00461-CV, 2020 Tex. App. LEXIS 4515, at *4-5 (Tex. App.—Dallas June 17, 2020)

Complaints about the sufficiency of the evidence–like an arithmetic miscalculation of the trial court–may first be raised on appeal in a bench trial.

Legal Sufficiency: “In his sole issue, Father argues the trial court made a mathematical error in determining the amount of the arrearages. He argues that correct calculations show he actually overpaid the amounts due under the trial court’s original divorce decree. Mother argues that Father has waived his complaint by failing to raise the issue in a motion for new trial. But Father’s complaint is that the trial court abused its discretion because the evidence does not support the amount of the arrearages in the findings and judgment. Complaints about the sufficiency of the evidence may be made for the first time on appeal in a civil nonjury case. Tex. R. App. P. 33.1(d).” In re N.E.C., No. 05-18-01350-CV, 2020 Tex. App. LEXIS 4549, at *6 (Tex. App.—Dallas June 18, 2020)

You have to make a record:

Record: “In a fourth issue, he complains that a record of the December 17 hearing was not made and thus is “not available so that it can be tendered as evidence.” We address Opoku-Pong’s last issue first because it is dispositive of this appeal. Opoku-Pong has not provided a reporter’s record of the December 17 proceeding. He complains that a record was not made. However, a complaint such as his must be preserved in the trial court by request or objection before it may [*4] be raised on appeal. Tex. R. App. P. 33.1(a); . . . Nothing in our record indicates that Opoku-Pong either requested a record be made or objected to the reporter’s failure to make a record. Tex. R. App. P. 33.1(a); . . . . Thus, we conclude that Opoku-Pong failed to preserve his fourth issue, and we overrule it.” Opoku-Pong v. Boahemaa, No. 14-19-00070-CV, 2020 Tex. App. LEXIS 4471, at *3-4 (Tex. App.—Houston [14th Dist.] June 16, 2020)

Your complaint must be timely–but an amended answer may be timely enough to assert an affirmative defense:

Affirmative Defenses (maritime law): “Appellants argue in their first issue that JCI waived the application of federal maritime law in this case because JCI did not plead preemption in its original answer. Then, recognizing that JCI added preemption in an amended answer, appellants argue that the trial court abused its discretion when it allowed JCI to add the defense. JCI responds that it did not waive the application of maritime law because it timely filed its amended answer. It further responds that the trial court did not abuse its discretion because appellants cannot show they were prejudiced by the amended answer. We agree with JCI.

A party may waive the defense that a claim is preempted by federal law. See Hollis v. Acclaim Physician Grp., Inc., No. 02-19-00062-CV, 2019 Tex. App. LEXIS 6414, 2019 WL 3334617, at *4 (Tex. App.—Fort Worth July 25, 2019, no pet.) (mem. [*6] op.) (holding party waived choice-of-law preemption argument by failing to raise it in the trial court). Waiver is defined as an intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right. Sun Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987). Waiver is largely a matter of intent, and for implied waiver to be found through a party’s actions, intent must be clearly demonstrated by the surrounding facts and circumstances. Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003). “There can be no waiver of a right if the person sought to be charged with waiver says or does nothing inconsistent with an intent to rely upon such right.” Id.

The general rule regarding pleading amendments is that the parties may freely amend if the amended pleading is filed at least seven days before trial. See Tex. R. Civ. P. 63; Sosa v. Cent. Power & Light, 909 S.W.2d 893, 895 (Tex. 1995) (per curiam). The amended pleading may not, however, act as a surprise to the other party. See Tex. R. Civ. P. 63. A trial court may strike an amended pleading if the opposite party objects and shows surprise. See Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990) (stating burden for showing surprise is on party opposing the amendment).

We turn first to appellants’ contention that JCI’s failure to include maritime law in its original answer waived the application of maritime law in this case. Appellants have cited no authority [*7] supporting their contention that preemption must be pleaded in a defendant’s original answer or it is waived. See PHI, Inc. v. LeBlanc, No. 13-14-00097-CV, 2016 Tex. App. LEXIS 1899, 2016 WL 747930, at *9 (Tex. App.—Corpus Christi Feb. 25, 2016, pet. denied) (mem. op.) (“Thus, in the absence of any authority supporting a conclusion that under these circumstances a party waives the application of maritime law, we cannot conclude that the trial court abused its discretion by determining that LeBlanc had not waived it.”). We therefore reject appellants’ contention that JCI’s failure to include maritime law as a defense in its original answer, standing alone, demonstrates JCI waived maritime law as a defense.

Appellants next argue that JCI’s delay in adding the preemption defense demonstrates waiver. In this situation appellants must show that this delay by JCI clearly demonstrates an intent to not rely upon maritime law. Jernigan, 111 S.W.3d at 156. In an effort to make this showing appellants point out that JCI (1) specifically mentioned Virginia and Alabama law, but not maritime law, in its original answer; (2) invoked Texas law in both its original and first amended answers; and (3) delayed until after it filed a motion for summary judgment and motion to exclude experts under Texas law to add maritime [*8] law as a defense in its second amended answer. We conclude that none of these actions clearly demonstrates JCI’s intent to not rely upon maritime law. See id. at 157-58 (stating that waiting more than 600 days after receiving medical expert report to file motion to dismiss was insufficient to establish waiver even though doctor engaged in discovery, filed a motion for summary judgment on other grounds, and filed an amended answer during that time period); Niche Oilfield Servs., LLC v. Carter, 331 S.W.3d 563, 577 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (holding plaintiff adequately raised application of maritime law in his first amended petition); cf. Hollis, 2019 Tex. App. LEXIS 6414, 2019 WL 3334617 at *4 (holding appellant waived preemption argument by failing to raise it in the trial court). Our conclusion is reinforced by the fact that JCI included maritime law arguments in its motion for summary judgment, which demonstrates JCI did not intend to waive reliance on maritime law as a defense.” Andrews v. John Crane, Inc., No. 14-18-00573-CV, 2020 Tex. App. LEXIS 4535, at *5-8 (Tex. App.—Houston [14th Dist.] June 18, 2020)

There were then several cases which held that complaints were not preserved because they were not raised in the trial court.

Y’all be safe and well.

Yours, Steve Hayes

shayes@stevehayeslaw.com; 817/371-8759; www.stevehayeslaw.com

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