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Introduction. The Texas Supreme Court has now held that contractual limitation of liability clauses barring  a party’s right to recover punitive damages are enforceable, even if one of the parties to the contract commits fraud.  Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, 17-0578, 2019 WL 406075, at *8 (Tex. Feb. 1, 2019) Background. In the Bombardier case, the plaintiffs sued defendant for breach of contract, breach of warranty, and fraud. In 2010, plaintiffs purchased…
The Texas Supreme Court has finally put to rest the question of whether the implied warranty to repair or modify tangible goods or property in a good and workmanlike manner can only be brought by a consumer under the Texas Deceptive Trade Practices Act (DTPA) or whether it can be brought under the common law as well. The Court held it could in fact be brought under both, in Nghiem v. Sajib, 2019 WL 406123…
The equitable constructive trust. In Texas, a court acting in equity may impose a constructive trust upon property held by a party to a transaction that belongs to another. The Austin Court of Appeals recently used this remedy to impose a constructive trust upon life insurance proceeds that, under a divorce decree, should have passed to the decedent’s minor children. Factual background. “Kristi and Hugh divorced in February of 2013. The agreed final decree of…
If the Texas recreational-use statute applies, then a landowner’s liability is limited when a guest is injured on the owner’s property while engaged in recreation. (See Chapter 75 of the Texas Civil Practice & Remedies Code). In the recent case of Meredith  v. Chezem , 03-18-00256-CV, 2018 WL 6425017 (Tex. App.—Austin Dec. 7, 2018, no pet. h.), the Austin Court of Appeals overturned a judgment based upon a jury verdict finding that a landowner’s negligence proximately…
In 2011, the Texas Legislature passed the Texas Citizens Participation Act (TCPA) also characterized as an anti-SLAPP statute (Strategic Lawsuit Against Public Participation). “The purpose of this [Act] is to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.” Tex. Civ. Prac.…
The constructive trust is a powerful weapon that plaintiffs can use against defendants who have breached their fiduciary duties or committed fraud. In one Texas case, the court of appeals actually affirmed the trial court’s award to the plaintiffs of all the assets in the business owned by the defendant who breached his fiduciary duties and committed fraud. Bright v. Addison, 171 S.W.3d 588, 595 (Tex. App.—Dallas 2005, pet. denied) . In the Bright case, supra,…
Texas Corporate directors and officers owe fiduciary duties of obedience, loyalty and due care to the corporation.  Gearhart Indus., Inc. v. Smith Intern., Inc., 741 F.2d 707, 719 (5th Cir. 1984); Loy v. Harter, 128 S.W.3d 397, 407 (Tex. App.—Texarkana 2004, pet. denied). In this context, directors and officers are probably most often found liable for violating the fiduciary duty of loyalty. “The duty of loyalty dictates that a corporate officer or director must act…
Family estate planning issues arise far too often when a child takes financial advantage of a parent who is mentally incompetent because of dementia or other mental infirmities. This is why it is so important to plan our estates while we still have our mental faculties and to put trustworthy people in charge who have the necessary skills to manage our estates after we are gone.This can be seen from a recent 2018 opinion by…
Introduction. In Texas, officers and directors of a corporation owe fiduciary duties to the corporation. “Three broad duties stem from the fiduciary status of corporate directors; namely, the duties of obedience, loyalty, and due care. Ubelaker at 781–82. The duty of obedience requires a director to avoid committing ultra vires acts, i.e., acts beyond the scope of the powers of a corporation as defined by its charter or the laws of the state of incorporation.”…
Introduction. In Lyda Swinerton Builders, Inc. v. Oklahoma Sur. Co., 16-20195, 2018 WL 4113795 (5th Cir. Aug. 29, 2018), the United States Firth Circuit Court of Appeals had to decide whether a subcontractor’s commercial general liability (“CGL”) insurance policy covered the defense of the general contractor named as an additional insured under the policy. Background. Lyda Swinerton Builders, Inc. (“Lyda”) was hired as the general contractor to build a 10 story building in College Station,…