Wednesday, July 15, 2015

The Asset-rich Anna Nicole Smith Saga: Houston Court of Appeals writes one more chapter - Will it be the last? [Stern v Marshall Family appeal decided]

HOWARD STERN AS EXECUTOR OF THE ESTATE OF VICKIE LYNN MARSHALL, V. ELAINE MARSHALL AS INDEPENDENT EXECUTRIX OF THE ESTATE OF E. PIERCE MARSHALL, NO. 01-02-00114-CV (Tex.App. - Houston [1st Dist.] July 14, 2015, no pet h.) (hyperlink to appellate docket)
 
Opinions issued by Texas Courts of Appeals  typically do not attract much public attention, nor does even the Texas Supreme Court receive much media coverage; -- at least not on a regular basis. But there are exceptions, such as when same-sex marriage is on the agenda, or when a prominent person with large assets, or -- as in this case -- a fight over what is left worth fighting over in the aftermath of their demise, occasions litigation that ends up in the courts of appeals; -- not to mention multiple courts of appeals; -- not to mention a couple of trips to the U.S. Supreme Court. Not to mention when what's at stake involves millions of dollars, and attorney's fees in the six-figure range. 


And so it was with Vickie Lynn Marshall (a/k/a Anna Nicole Smith) and the fight over the fortunes of her husband, who preceded her in death, but not by much, despite the huge age difference between the former playmate and the asset-rich old man with a weak spot for the erstwhile Texas store clerk and subsequent playmate -- rich in assets too -- albeit assets of a different sort. 

Judgment - HOWARD STERN AS EXECUTOR OF THE ESTATE OF VICKIE LYNN MARSHALL, V. ELAINE MARSHALL AS INDEPENDENT EXECUTRIX OF THE ESTATE OF E. PIERCE MARSHALL, NO. 01-02-00114-CV (Tex.App. - Houston [1st Dist.] July 14, 2015, no pet h.)
Judgment issued contemporaneously with
opinion in Stern v Marshall Family  

Yesterday, the First Court of Appeals wrote another chapter in the saga, and it has already attracted the attention of Forbes Magazine: "Court Ruling Likely Ends Anna Nicole Smith Estate's Fight For Marshall Family Millions"; -- with more than 3,000 pageviews within 24 hours of posting. 

The opinion, written by Chief Justice Radack, runs sixty pages and covers a number of procedural issues relating to propriety and viability of declaratory judgment claims, effect of nonsuit, and compulsory counterclaims, that were implicated in the proceeding that played out in Harris County probate court, in a protracted legal fight that also involved courts elsewhere, most notably a bankruptcy court in California. 
  
Most importantly, however, the Houston appeals court threw out the attorneys fees awarded to Pierce Marshall against the Estate of Anna Nicole in the probate court's judgment, -- also for procedural reasons. The issue of attorney's fees against Anna Nicole -- for defending against her claims -- had not been submitted to the jury, nor had any been awarded by the trial court judge based on a motion made to the court independent of the jury trial. Therefore, the award of attorneys' fees in the final judgment of the probate court - in the six-figure range -- did not have a proper basis. 
  
Writes Radack: "We agree with Stern that Pierce waived recovery of attorneys’ fees from Vickie by failing to request submission of that issue to the jury." 

Bottom line: The Houston Court of Appeals affirms the adverse ruling against Vickie (with minor modifications), but reverses the attorneys’ fees awarded to Pierce from Vickie and renders judgment that Pierce take nothing on that claim. 




THE MATTER OF PRECLUSION 
IN THE CONTEXT OF PARALLEL LITIGATION
IN DIFFERENT COURTS IN DIFFERENT STATES

The issues on appeal, however, were not as straightforward as one might think. They hinged on matters of Texas procedural law, including the viability of declaratory judgment claims covering the same issues when the opponent had dropped its claim involving those issues, and the interplay of what happened in the Texas court with what happened in Vickie's bankruptcy in California, not mention matters such as scope of bankruptcy stay and  jurisdiction. 
   In the Harris County probate case, Vickie had actually dropped (nonsuited) her claims, but the Marshall Family Defendants asserted their own claims against her and did not let her out of the case. The jury and court in the end rejected the challenges to the validity of Marshall's will and estate plan (most of his assets were transferred via a living trust), and also passed on the merits of Vickie's claims because they were closely tied to the will contest brought by  J. Howard Marshall, III, and because Vickie's opponents invoked the Declaratory Judgments Act as a basis for their counterclaim. 
  
As the surviving spouse, Vickie would have had a claim to part of the estate as an heir-at-law under the intestacy statute, had the will and estate plan documents been set aside for lack of testamentary capacity or duress. Therefore, she was deemed a necessary party, and was not permitted to get out of the case.  
     
Vickie only non-suited her claims in Texas after she obtained a favorable multi-million dollar judgment against E. Pierce Marshal in her bankruptcy case in California, in which she asserted that Pierce tortiously interfered with an intended gift from her late husband. But that legal victory was later undone based on the final judgment rendered by the Harris County Probate Court after a drawn-out jury trial, which finally adjudicated the validity of the will and living trust, subject to review by the Texas courts of appeals, of course.  
   
The principal purpose of the appeal by Howard Stern (as representative of Vickie's estate) in Houston was therefore to reverse the judgment of the probate court and thereby remove the bar to the claims Vickie had successfully pursued (initially) in California. 
  
But the reversal of attorneys fees constitutes at least a partial victory for her estate, and -- while small compared to the one-time award in California that she did not get to keep -- not exactly in a trivial amount: $541,000 for services rendered through the trial and $100,000 each for appeals to the court of appeals and the Texas Supreme Court, respectively. And as for court costs run up for the first level of appeal, the Houston Court of Appeals split them 50-50.  
    


No need for her to turn in her grave. The supreme court has not yet had a chance to weigh in on the latest issues. The story of Anna Nicole's rise, fall, and aftermath may yet grow by a few more chapters, perhaps enough for a full feature-long sequel. 


Editorial note: This blog post on the First Court of Appeal's July 14, 2015 decision in Stern v Marshall was updated and expanded on 7/16/2015) 


Click appellate cause number to link to court of appeals' docket for this case 


Opinion issued July 14, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
———————————
HOWARD STERN AS EXECUTOR OF THE ESTATE OF VICKIE LYNN
MARSHALL, Appellant
V.
ELAINE MARSHALL AS INDEPENDENT EXECUTRIX OF THE ESTATE
OF E. PIERCE MARSHALL, ROBERT MCINTYRE AS TEMPORARY
ADMINISTRATOR OF THE ESTATE OF J. HOWARD MARSHALL, II,
APPLICATION TO APPOINT ELAINE MARSHALL PENDING, IV
ELAINE MARSHALL AS TRUSTEE OF THE MARSHALL
GRANDCHILDREN’S TRUST FOR THE BENEFIT OF E. PIERCE
MARSHALL, JR., ELAINE MARSHALL AS TRUSTEE OF THE
MARSHALL GRANDCHILDREN’S TRUST FOR THE BENEFIT OF
PRESTON MARSHALL, E. PIERCE MARSHALL, JR., ELAINE
MARSHALL, AND PRESTON MARSHALL AS TRUSTEES OF THE
MARSHALL PETROLEUM, INC. STOCK HOLDING TRUST, E. PIERCE
MARSHALL, JR., ELAINE MARSHALL, AND PRESTON MARSHALL AS
TRUSTEES OF THE MARSHALL HERITAGE FOUNDATION AND THE
MARSHALL LEGACY FOUNDATION, ELAINE MARSHALL AS
TRUSTEE OF THE BETTYE B. MARSHALL LIVING TRUST, ELAINE
MARSHALL AS TRUSTEE OF THE J. HOWARD MARSHALL, II,
MARITAL TRUST NUMBER TWO, ELAINE MARSHALL AS TRUSTEE 
2
OF THE E. PIERCE MARSHALL FAMILY TRUST CREATED UNDER
THE BETTYE B. MARSHALL LIVING TRUST INDENTURE DATED
OCTOBER 30, 1990, ELAINE MARSHALL INDIVIDUALLY
ELAINE MARSHALL AS TRUSTEE OF THE MARSHALL
GRANDCHILDREN’S TRUST FOR THE BENEFIT OF E. PIERCE
MARSHALL, JR., ELAINE MARSHALL AS TRUSTEE OF THE
MARSHALL GRANDCHILDREN’ TRUST FOR THE BENEFIT OF
PRESTON MARSHALL, E. PIERCE MARSHALL, JR., PRESTON
MARSHALL, TROF, INC., FINLEY HILLIARD, ELAINE MARSHALL
AND STEPHEN COOK AS TRUSTEES OF THE J. HOWARD
MARSHALL, II LIVING TRUST, E. PIERCE MARSHALL, JR., ELAINE
MARSHALL AND PRESTON MARSHALL AS TRUSTEES OF
THE MARSHALL PETROLEUM, INC. STOCK HOLDING TRUST,
Appellees
On Appeal from the Probate Court No. 2
Harris County, Texas
Trial Court Case No. 276815402

O P I N I O N

This is an appeal from a probate court judgment. We reverse the attorneys’ fees awarded in favor of one of the appellees and render judgment that appellee take nothing on that claim. We additionally modify the trial court’s judgment and affirm the judgment as modified.



Thursday, July 9, 2015

Simien v Unifund's shaky premise - U.S. Comptroller of the Currency (OCC) enforcement action against Chase Bank punctures presumption of trustworthiness of credit card debt records established by Houston Court of Appeals in 2010


The Comptroller of the Currency has now fined Chase Bank $30 million dollars for robosigning and other less than kosher debt collection practices that have been known for years. See July 8, 2015 Press release here. Consent Order for the Assessment of a Civil Money Penalty here.

But meanwhile our local courts of appeals have gone out of their way to accommodate and legitimize wrongful collection conduct, and other intermediate courts around Texas (but not all) have followed their lead. In light to the regulatory actions involving robosigning, including the most recent consent order against a major bank, the time seems ripe to revisit Simien v. Unifund CCR Partners321 S.W.3d 235 (Tex. App.-Houston [1st Dist.] 2010, no pet.)(overruling objections to admissiblity of credit card bank records sought to be admitted through an employee testifying for debt buyer).

THE LOWERING OF EVIDENTIARY STANDARDS IN COLLECTION CASES 

This is how the issue was handled in Texas when assignees of credit card debt used dubious affidavits and documentation in credit card debt collection cases: Rather than holding debt collection plaintiffs and their attorneys to the same evidentiary standards that others have to live by, the Houston appellate courts fashioned special interest jurisprudence to accommodate debt collection firms' interest in efficient and fast-paced mass-litigation and procurement of judgments.

The First Court of Appeals (later followed by some others) simply changed the case law governing admissibility of business records to accommodate the debt collectors, and provided them with a remedy for their problems in proving their debt claims with poor documentation in the trial courts. How so? By creating new controlling precedent for admissibility of original creditor records through otherwise unqualified witnesses on the premise that the records must be trustworthy because the bank that sold the account would be violating the law -- and face penalties -- if it had not acted properly in running its business.

BANK RECORDS TRUSTWORTHY QUA BANK RECORDS

The debt buyer was therefore justified in relying on whatever documentation they had received upon purchase of portfolios of charged-off credit card accounts because those records were deemed inherently trustworthy. That exempted them from the need to actually know anything about the operations of the original creditor to put them in a position to vouch for the reliability of those records.

In other words, the Houston Court of Appeals blessed the practice of robosigning by employees of companies that bought charged-off accounts from banks such as Chase, Citibank, Capital One, GEMB, HSBC, and others. They substituted an evidentiary presumption of trustworthiness, thereby short-circuiting the safeguards for quality control that otherwise apply to use of documentary evidence in the litigation process, including authentication and hearsay.

Essentially, the justices on the court of appeals took the position that a major national bank could not possibly have done anything wrong, and that the records that the debtbuying company suing on the debt claims to have received must necessarily be trustworthy because they are business records created by a national bank. After all, if the bank were to engage in shady practices, they would face consequences.

Here is an example of a Houston appellate justice's reasoning used to affirm a judgment on a credit account sold by Chase Bank USA, N.A., citing her former colleague Elsa Alcala, who now sits on the CCA and took the lead in fashioning the precedent to lower the bar for admissibility of credit card debt records on the premise that a major bank like Citibank can do no wrong. See Simien v. Unifund CCR Partners, 321 S.W.3d 235, 240-43 (Tex. App.-Houston [1st Dist.] 2010, no pet.) (establishing alternative predicate for admissibility of business records).

Chief Justice Adele Hedges writes:

Chase's failure to keep accurate records could result in criminal or civil penalties. See Tex. Fin. Code Ann. § 392.304(a)(8) (prohibiting misrepresentations of amount of consumer debt); id. § 392.402 (providing for criminal penalties for violations of chapter 392 of Texas Finance Code); see also Fair Debt Collection Practices Act, 15 U.S.C.A. § 1692e(2)(a) (prohibiting misrepresentation of amount of debt); id. § 1692l (providing for administrative enforcement of Administrative Debt Collection Practices Act). These circumstances otherwise indicate the trustworthiness of the Chase Bank documents.[3] See Simien, 321 S.W.3d at 243-44. Accordingly, because the business-records affidavit at issue here meets the criteria for admission as business records under Texas Rule of Evidence 803(6), the trial court did not abuse its discretion in admitting these records. See id. We overrule Ainsworth's first issue.  

The OCC has now imposed penalties to the tune of $30 million on Chase Bank for practices that the Houston Court of Appeals justices simply presumed would not occur because Chase and its like would be deterred by the possibility of facing an enforcement action by regulators. And the OCC is not the only regulator whose attention Chase attracted with its dubious practices. The CFPB and a bevy of state attorneys general also took action against the bank over improper conduct.

CFPB Action against JPMorgan Chase over wrongful debt collection conduct
URL: http://www.consumerfinance.gov/blog/were-ordering-jp-morgan-chase-to-refund-50-million-and-stop-collecting-on-528000-accounts

But misconduct and illegal conduct by major financial institutions is hardly man-bites-dog news. Nor was that so when Siemien v Unifund was decided in 2009 (with a superseding opinion in 2010).

BANKS TRUSTWORTHY AS A MATTER OF LAW - EVEN FAILED ONES 

Not to mention that the FDIC had shut down and liquidated Washington Mutual Bank years ago because of unsound practices (and resulting lack of trustworthiness). Chase Bank acquired WaMu's credit card portfolio (and other assets) via the FDIC acting as receiver, which also included accounts originated by Providian Bank that had been assumed by WaMu before its demise by merger.

Yet the Houston Courts of Appeals found such records presumptively trustworthy, and instructed (through the precedent set in Simien and its progeny) the lower courts to overrule evidentiary objections made by consumers lucky enough to find a competent attorney to make evidentiary objections to offers of dubious records and shoddy affidavits by robosigners in credit card and other consumer debt collection cases.

The Texas Supreme Court was not asked to weigh in at the time; nor is it likely that it would have ruled differently. But the latest regulatory developments have again shown that the premise underlying Simien was wrong. It was wrong all along. -- An exercise not in legislating from the bench, but of handing down special-interest jurisprudence to ease the burdens of proof for a particular category of litigants at the expense of others. And that amounts to policymaking too: Policymaking by other means. On the back-end of the law.

Presumed Trustworthiness 

EXCERPT FROM AINSWORTH V. CACH, LLC
MEMORANDUM OPINION BY ADELE HEDGES, 
CHIEF JUSTICE, 14th COURT OF APPEALS 

Admissibility of the Business-Records Affidavit

Ainsworth challenged the admission of the business-records affidavit and supporting documentation on numerous grounds, including hearsay and that the supporting documents were unreliable and not trustworthy. The admission and exclusion of evidence are within the sound discretion of the trial court. Bayer Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 609 (Tex. App.-Houston [14th Dist.] 2006, pet. denied) (citing City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995)). The complaining party must show that the trial court erred and that such error probably resulted in an improper judgment, which usually requires a showing that the judgment turned on the challenged evidence. Id.; see also Tex. R. App. P. 44.1(a)(1) (requiring that before a judgment can be reversed on appeal it must be determined that the error probably caused rendition of an improper judgment or prevented the appellant from properly presenting the case on appeal).

A proponent of hearsay evidence bears the burden of showing that testimony fits within an exception to the general rule prohibiting admission of the hearsay evidence. Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 908 n. 5 (Tex. 2004); see also Tex. R. Evid. 802. Rule of Evidence 803(6) provides an exception to the hearsay rule for business records if the offering party shows (1) the records were made and kept in the regular course of business; (2) the business kept the records as part of its regular practice; (3) the records were made at or near the time of the event they contain; and (4) the person making the records or submitting the information had personal knowledge of the events being recorded. See Tex. R. Evid. 803(6). Business records may also be "admissible in evidence in any court in this state upon the affidavit of [a] person" who can satisfy the requirements of Rule 803(6). Tex. R. Evid. 902(10)(a).

Finally, third-party documents can become the business records of an organization and, consequently, admissible under rule 803(6), if the records are (1) incorporated and kept in the course of the testifying witness's business; (2) the business typically relies upon the accuracy of the contents of the documents; and (3) the circumstances otherwise indicate the trustworthiness of the documents. Simien v. Unifund CCR Partners, 321 S.W.3d 235, 240-41 (Tex. App.-Houston [1st Dist.] 2010, no pet.) (citing Bell v. State, 176 S.W.3d 90, 92 (Tex. App.-Houston [1st Dist.] 2004, pet. ref'd)).

The business-records affidavit, described above, meets these criteria. Hwang stated that she is the custodian of records for CACH and that it is CACH's "regular business practice to obtain, integrate and rely upon documents prepared by the original creditor of the account at issue." She further averred that CACH relies on the accuracy of the documents in its day-to-day business activities and that the records are made and maintained by individuals who have a duty to keep the record accurately at or near the time of the event that they record. Finally, one of the documents attached to the business-records affidavit is the "affidavit of sale," which is notarized. Such a notarized document is self-authenticating under the Texas Rules of Evidence. See Tex. R. Evid. 902(8).

In this document, described above, an authorized agent of Chase Bank, N.A., stated that Chase had acquired Ainsworth's account from Washington Mutual Bank, sold it to CACH in December 2008, and that the amount due on the account at the time of the sale was $4,567.07.

Chase's failure to keep accurate records could result in criminal or civil penalties. See Tex. Fin. Code Ann. § 392.304(a)(8) (prohibiting misrepresentations of amount of consumer debt); id. § 392.402 (providing for criminal penalties for violations of chapter 392 of Texas Finance Code); see also Fair Debt Collection Practices Act, 15 U.S.C.A. § 1692e(2)(a) (prohibiting misrepresentation of amount of debt); id. § 1692l (providing for administrative enforcement of Administrative Debt Collection Practices Act).

These circumstances otherwise indicate the trustworthiness of the Chase Bank documents.[3] See Simien, 321 S.W.3d at 243-44. Accordingly, because the business-records affidavit at issue here meets the criteria for admission as business records under Texas Rule of Evidence 803(6), the trial court did not abuse its discretion in admitting these records. See id.

We overrule Ainsworth's first issue.

RELATED LINKS:  07/08/2015: OCC Fines JPMorgan Chase $30 Million for Deficiencies in Debt Collection Practices and Servicemembers Civil Relief Act Compliance

Thursday, June 25, 2015

Massengale vs. Lehrmann: Primary-campaigner for Supreme Bench Takes Aim at Alleged Judicial Legislator


Conservativer than thou .... 
   
Challenger paints incumbent Texas Supreme Court Justice Debra Lehrmann as Liberal, not to mention as a Leftist Legislator 

On the conservative side of the political spectrum one of the worst things to say about a judge's job performance is that he or she legislates from the bench. Launching his bid for Place 3 on the Texas Supreme Court, sitting First Court of Appeals Justice Michael Massengale has done just that, promising that he will not be guilty of that offense, if elected.

But he is not taking on a wayward liberal ready to be knocked off the bench with gusto, Texas-style. The Texas Supreme Court is firmly in Republican clutches, and there are no easy pickings. The seat on the nine-member high-court he has set his eyes on is currently occupied by a fellow Republican, Debra Lehrmann, who has made it known that she loves the job and will fight to keep it.

Massengale's announcement: He does not mention Opponent
Lehrmann by name 
Massengale v Lehrmann is a judicial contest in which the Republican primary electorate will ultimately render judgment, and there won't be any findings of facts and conclusions of law to explain the outcome. Nor any appeal of the verdict. The election contest will be it, and the only thing that counts is winning. The appeals - including appeals to primary voters' preconceived notions of what makes for good and not-so-good judges -- come before the critical decision-making event, not after.

And Massengale is getting an early start.

But what does it mean to not legislate from the bench, and what is conservative justice, as a distinct genre? 

To legislate means to make law, and the specific term refers to such law-making by the legislature, one of the three branches in the separation-of-powers system. So, by definition, the Supreme Court does not legislate. Legislating from the bench is an insult meted out upon those judges whose decisions are disfavored, and who allegedly usurped the function of the legislature in making those decisions and justifying them in appellate opinions.

But that does not mean the Supreme Court is not a policymaker; does not make binding rules; does not make law.

Quite to the contrary.

The Texas Supreme Court makes law by announcing what the state's common law is, and occasionally modifying it.  And it does not just do so by press release. It does so by issuing opinions that have the force of binding precedent for the state as a whole. Case law that all lower courts have to follow, if they like it or not. And the same goes for declaring what constitutional law is and is not and how it applies, and what statutes enacted by the Texas Legislature mean, for that matter. Rather than calling it interpretation, lawyers and jurists merely use a fancier term: statutory construction.

The Supreme Court makes law through opinions it issues upon deciding the legal issues presented in cases it decides to review. That is its principal function.

The Supreme Court also promulgates, and periodically amends and revises, the rules of court, a recent example being the new Rules of Evidence. And that is not even an adjudicative function. It is a legislative function, albeit of the delegated variety. The Texas Supreme Court also oversees the State Bar and the attorney disciplinary system, and makes the rules by which it operates.

So, when Justice Massengale says he will not legislate from the bench, is he saying that he does not intend to do his job, should he be elected to the Texas Supreme Court, or that he does not understand the multiple roles the court of last resort in civil matters performs in this state's system of government?

Surely not.

Much rather, it is readily apparent that he is broadcasting buzz words to attract primary votes implying that his opponent is an out-of-control liberal. thereby hoping to counteract her incumbency advantage, and her already well-established record on the court to which Massengale now aspires.

Which just goes to show that judges are politicians, not just jurists, and that some are prone to stoop low when it comes to the exigencies of having to win an election, in this case a primary contest against an opponent deemed, for whatever reason, to be the most vulnerable of those up for re-election in the forthcoming season.

Not only are Massengale and Lehrmann both Republicans and bona-fide conservatives; they were both initially appointed to their respective appellate posts by Governor Rick Perry. So, in his rhetoric, Massengale is positioning himself to the right of Lehrmann, which puts him on a point of the ideological spectrum where he can paint her as a leftie, and as an activist judge. Massengale claims to be not merely more conservative than thou, but styles himself as the conservative choice in the primary race. Just what Republican primary voters need and deserve. What does that make Lehrmann? 

CASE-SPECIFIC CONSERVATISM: A TEST CASE - WHAT WOULD A TRUE CONSERVATIVE DO? 

So how would Massengale decide a case with a defining hot-button social values issue like same-sex divorce case disposed of by the Supremes last week?

How would Massengale tackle the issues in State v Naylor & Daly as a true conservative, and as a jurist who does not legislate from the bench? The case in which a majority of the current supreme court, in an opinion written by Justice Jeff Brown, ultimately concluded that the issue of same-sex marriage and legality of divorce could not be reached for jurisdictional reasons because the AG did not intervene in a timely manner and did not have standing to appeal?


State of Texas v. Naylor, No. 11-0114 (Tex. June 19, 2015)
("We agree with the court of appeals that the State lacks standing to appeal the trial court’s decree.").

Would Massengale hold the Attorney General to the same rules and standards that govern interventions in the trial courts that other would-be interlopers have to abide by, or would he join Justice Willett in amending the common-law to allow the Attorney General to appeal as a nonparty? Or would he join Justice Devine's dissent and address the merits of the federal constitutional arguments that Justice Willett complains the Attorney General was not even heard on?

What's a true conservative and a strict constructionist to do in such a messy case? 

Obviously, the current members did not come to a consensus, even though State of Texas v. Naylor & Daly had been lingering on the docket for years, and even though they ordered an additional round of briefing to address the implications, if any, of freshly decided federal cases.

Nor would the addition of Massengale even have made a difference. Justice Devine, whose strategy playbook for success in the Republican primaries Massengale appears to be emulating, found himself in a minority of one, and the majority of five in favor of jurisdictional dismissal would still have prevailed even if Lehrmann had participated in deciding the case, no matter how she would have voted. Unless Lehrmann -- or in her place Massengale -- could have persuaded the peers to switch their votes.

The same majority, or even a larger one, may yet reach the merits, - in one of the other two same-sex marriage cases that remain pending, assuming the U.S. Supreme Court does not take the burden of deciding them on their merits out of their hands. The case numbers in the Texas Supreme Court are 15-0139 and 15-0135 respectively. Both cases are styled In Re State of Texas because they are mandamus proceedings. 

But at least one of these pending same-sex marriage cases is procedurally messy also. The underlying lawsuit against the Travis County Clerk was nonsuited by the parties after they got their same-sex marriage license on orders of a Travis County district court judge. Goodfriend v. Debeauvoir, No. D-1-GN-15-000632 (Travis Cnty. Dist. Ct. Feb. 19, 2015).


And you can't normally appeal a nonsuited case because the nonsuit renders it moot. Not to mention mandamusing a trial judge to set aside a temporary restraining order that is no longer in effect.

So what would Massengale do were he already a member of the Texas Supreme Court? 
How would he put his credo into effect? 

Would he deny the Attorney General's petition as procedurally barred? Would he come up with a new ad hoc rule allowing the AG to attack a moot TRO citing "unique and extraordinary circumstances" (which Justice Lehrman and other thoughtful jurists might very well view as an exercise in legislating from the bench), or would he -- like Justice Devine -- simply write a dissenting opinion addressing the merits of the issue about which - as a self-declared true conservative - he presumably feels strongly: Same-sex marriage? -- Never mind mootness, jurisdiction, and procedural posture.


RELATED LINKS:

Justice Lehrmann's Official Bio and Pic on Texas Supreme Court Website
Justice Massengale's Official Bio and Pic on First Court of Appeals Website

Massengale to Challenge Lehrmann for Supreme Court Seat, by Ross Ramsey in The Texas Tribune June 16, 2015.





Sunday, June 7, 2015

Memorial Hermann seeks court-ordered deposition of local personal injury attorney over nonpayment of hospital liens resulting from treatment of accident victims


Memorial Hermann Health System does not just sue uninsured patients, as detailed in last week's Houston Press cover story written by Dianna Wray, it also goes after lawyers who represent accident victims treated in its hospitals; in search of its cut of personal injury settlement proceeds.

On Friday, June 5, 2015, MHHS brought legal action against Houston attorney Max F. Stovall in Harris County District Court to obtain information on a list of clients whom he allegedly represented in connection with car wrecks. Stovall's attorney profile page on the State Bar of Texas web site indicates that he is a member in good standing. He lists himself as a personal injury attorney. A search of Harris County Court records identifies him as attorney of record in 87 cases in district courts, but none of them recent. In the county civil courts at law Max Franklin Stovall has 132 to his name, with the last one filed in 2009. 

MHHS's petition, which was assigned to the 189th District Court, is based on Rule 202 of the Texas Rules of Civil Procedure, which allows a potential litigant to invoke the power of a court to order deposition of witnesses and production of documents in order to investigate facts for a possible lawsuit to be filed later. Such a proceeding is a vehicle to conduct what is otherwise called "discovery" without actually filing a lawsuit that seeks damages. It is also used to find out the identity of a party or parties that may be liable on a claim, but whose identity is not known or easily determined, -- in this case insurance carriers that may have made disbursements to settle Stovall's clients' claims, from which the hospital system says it was not paid its fair share. MHHS asserts statutory hospital liens for treatment it had provided and not been paid for (or not been paid for in full) ranging from a low of $219.72 to a high of $101,973.10 per accident victim. It names them in the pleading. MHHS says it requested the information on the status of these individuals' claims from Stovall to no avail. It now seeks to compel the information by court-ordered deposition and production of documents ("duces tecum").
 
Bringing a Rule 202 proceeding also allows the hospital  system to avoid directly accusing Stovall of any wrongdoing in claims settlement and disbursement, while still giving it a powerful tool to investigate Stovall's representation of claimants, assuming the judge approves its request at the required hearing.

The ten-page petition, titled "MEMORIAL HERMANN HEALTH SYSTEM'S VERIFIED PETITION TO TAKE DEPOSITION BEFORE SUIT" was filed by Sarah K. Payne, an attorney with the law firm of Sullins, Johnston, Rohrbach & Magers. This is the same lawfirm that sues uninsured patients who received treatment at Memorial Hermann hospital facilities over unpaid hospital bills, as recently reported - with in-depth case studies telling the stories of affected individuals - by the Houston Press.
  

EXCERPTS FROM MHHS' PETITION TO INVESTIGATE CLAIMS







TEXAS RULE OF CIVIL PROCEDURE 202
(AUTHORIZING PRESUIT INVESTIGATION OF POTENTIAL CLAIMS) 
TRCP 202 Petition to Investigate Claims and Perpetuate Testimony

Tex. R. Civ. P. 202 (providing for presuit depositions)






Monday, May 4, 2015

Slippery floor at hospital is not a medical condition after all - Texas Supreme Court (Comment on Ross v St Luke's Episcopal Hospital)


In 2013 a panel of the Fourteenth Court of Appeals found itself compelled to rule that injury sustained by a hospital visitor's fall on a slippery floor was a health care liability claim, and that the visitor's lawsuit had to be dismissed because the Plaintiff had not filed an expert report explaining how the wet floor constituted medical malpractice, or rather more specifically, how the wet floor departed from the applicable standard of medical care. 



Why did the panel reach the absurd conclusion that a wet floor is medical malpractice, and therefore required proof of malpractice by expert testimony under the Health Care Liability Act? It did so because it felt duty-bound to follow Texas Supreme Court precedent to the effect that a claim need not constitute a medical malpractice claim to be treated as such for purposes of a lawsuit brought against a health care provider, and therefore required a medical malpractice expert report. 

In the meantime, a doctor who owned cattle that had been allowed to wander onto a rural road causing a collision sought dismissal of the lawsuit that the injured driver brought against him because no medical-export report regarding the cow-car-collision and the applicable standard of care had been filed. The attorney for the doctor, too, was just relying on Texas Supreme Court precedent, and zealously protecting the interests of his client, who happened to be a doctor. Or so the story went. 
  
Finally, last Friday, the Supremes announced that an ordinary negligence claim is not a health care liability claim after all if it does not arise out of provision of healthcare. Therefore, the hospital visitor who slipped and fell was not required to file an expert report. Good grief. Why did it take so long for the Supremes to come to their senses and admit the obvious? Why did they only do so after the roaming-cow med-mal practice case had made the news, and exposed the level of absurdity of which tort reform, both legislative and judicial, had reached? 





But in Fourteenth Court of Appeals got reversed in the process, and told that they -- rather than the Supremes -- had gotten it wrong. 

The irony (if not absurdity): They were just following binding precedent from the Texas Supreme Court. As an intermediate court, they said, they did not have the authority to go against the Supreme Court. They were just following orders. They felt compelled to march in lock-step and become extras in a theater of the absurd. 

Perhaps the roaming cows would not have come home to roost had the underlings on the inferior court been brave enough to say that the emperors had lost their wits and had no clothes. The Supremes would have had to affirm them.

Perhaps the Fourteenth Court of Appeals should have mopped up the slippery-slope mess that med-mal litigation had become thanks to "tort reform", rather than merely griping, and -- in the case of the one justice on the panel who has since made it to the policymaking level and become one of the emperors with stare decisis powers - concur in the absurdity without writing a separate opinion. 


Affirmed and Memorandum Opinion filed March 19, 2013.

In The
Fourteenth Court of Appeals
NO. 14-12-00885-CV

LEZLEA ROSS, Appellant
V.
ST. LUKE'S EPISCOPAL HOSPITAL, Appellee

On Appeal from the 215th District Court
Harris County, Texas
Trial Court Cause No. 2010-75291

M E M O R A N D U M     O P I N I O N

Appellant Lezlea Ross appeals from the trial court’s interlocutory order dismissing her suit against appellee St. Luke’s Episcopal Hospital. The trial court dismissed the suit because Ross failed to file an expert report as required by Section 74.351 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351 (West 2011).

The sole issue on appeal is whether Ross’s claim based on a slip and fall occurring on the Hospital’s premises is a ―health care liability claim (HCLC) to which the expert-report requirement applies. Compelled by stare decisis, we hold that this claim is an HCLC, and we affirm.

BACKGROUND

Ross slipped and fell in the lobby of St. Luke’s Episcopal Hospital after visiting a patient.

Ross brought this action against the Hospital and its maintenance and training contractor, Aramark Management Services L.P.

After the Texas Supreme Court decided Texas West Oaks Hospital, LP v. Williams, 371 S.W.3d 171, 179–80 (Tex. 2012), the Hospital filed a motion to dismiss because Ross did not file an expert report explaining how the Hospital had breached a standard of care, or an expert report from a physician demonstrating how said breach caused Ross an injury. The trial court granted the Hospital’s motion, decreed that Ross’s claims against the Hospital were HCLCs subject to Chapter 74, dismissed with prejudice Ross’s claims against the Hospital, and ordered that Ross pay attorneys fees of $1,000. Ross filed a timely notice of appeal from the trial court’s interlocutory order. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(10) (West Supp. 2012).

ANALYSIS

In a single issue, Ross contends the trial court erred by granting theHospital’s motion to dismiss because her slip and fall claim is not an HCLC within the meaning of Chapter 74.

Ross was not a patient at the Hospital; she did not have a physician-patient relationship with any health care provider at the Hospital. She was a visitor, injured in the lobby of the Hospital. Yet, the Texas Supreme Court instructs that these facts are irrelevant for purposes of determining whether Ross brings an HCLC.

The Hospital, a health care provider, is the defendant. The Hospital is a defendant because of the condition of its floors in the lobby, not because of any act or omission related to health care—unless the decision to have polished floors is health care—which the Hospital does not allege here. Yet, the Texas Supreme Court instructs that a connection between the act or omission and health care is
unnecessary for purposes of determining whether Ross brings an HCLC.

Ross likely never imagined that, under the Texas Supreme Court’s construction, the plain language of the Texas Medical Liability Act would swallow her garden-variety slip and fall case. But it has. And, having failed to file an expert report as required by the Act, Ross owes the Hospital $1,000 in mandatory fees.

Ross does not contest that an allegation that the floors are slippery is a ―safety-related claim. Ross does not attempt to remove her claim from the Texas Supreme Court’s construction of the requites of the Act: A claimant (plaintiff), a defendant health care provider, and a harm or loss (safety). Ross argues simply that this court should ignore Williams because to apply it demands that we affirm.
 
Because the result in this case is absurd, Ross urges, this court should resort to TEX. GOV’T CODE ANN. § 311.021(3) (West 2005) (stating that the Legislature is presumed to have intended a ―just and reasonable result), to disregard the TexasSupreme Court decision on point. We are without such authority. See Lubbock Cnty., Tex. v. Trammel’s Lubbock Bail Bonds, 80 S.W.3d 580, 585 (Tex. 2002) (―It is not the function a court of appeals to abrogate or modify established precedent.
That function lies solely with this Court. Generally, the doctrine of stare decisis dictates that once the Supreme Court announces a proposition of law, the decision is considered binding precedent. (citations omitted)). Thus, we must overrule her sole issue.

CONCLUSION

Having overruled Ross’s sole issue on appeal, we affirm the trial court’s order.

/s/ Sharon McCally, Justice

Panel consists of Justices Brown, Christopher, and McCally. (Brown, J., concurring without opinion).

Footnotes:

Ross testified by deposition that a man was buffing the lobby floor.

See Williams, 371 S.W.3d at 188–89 (citing TEX. CIV. PRAC. & REM. CODE ANN. § 74.001(a)(13) (West Supp. 2012)). ―[A] claim need not involve a patient-physician relationship for it to be an HCLC.2 Id. at 189.3

See TEX. CIV. PRAC. & REM. CODE ANN. § 74.001(a)(2).][3 See Williams, 371 S.W.3d at 186 (allegations pertaining to safety need not be ―directly related to health care‖).

See id. at 184 (holding that ―safety in the context of the Act has the broadest meaning: ―untouched by danger; not exposed to danger; secure from danger, harm or loss‖ (quotations omitted)).

See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(b)(1) (the trial court shall enter an order that awards fees and costs). During oral argument, the Hospital withdrew its request for fees on appeal.

FOR FURTHER READING

OUCH! THE EXPANDING DEFINITION OF HEALTH CARE LIABILITY CLAIMS UNDER THE TEXAS MEDICAL LIABILITY ACT AND WHY TEXAS TOOK IT TOO FAR




Friday, May 1, 2015

The Deed was not done for just $10, and parol evidence was not barred to show that the "other valuable consideration" had not been paid


Lopez v. Rivas, 
No. 01-14-00592-CV (Tex. App. - Houston [1st Dist] Apr. 30, 2015) 

In an opinion issued April 30, 2015, a panel of the First Court holds that the parol evidence rule did not bar testimony regarding an oral promise by one sibling and his spouse to pay the other two siblings $20,000 each for their respective shares of a house valued at $60,000 that they had jointly inherited from their parents. 

The general warranty deed recited that the conveyance was done for $10 dollars and other good and valuable consideration


General Warranty Deed: Recitation of Consideration 
In a memorandum opinion written by Justice Huddle, the panel holds that the testimony about the nature of this "other" valuable consideration did not contradict the language in the deed, and further holds that evidence of want or failure of consideration would be admissible anyhow. 
   
As for the acknowledgment of receipt and sufficiency thereof recited in the deed, the court concludes that it pertained to the promise to pay the $20,000 each, rather than the actual payment thereof. Therefore, the trial court did not err in entering judgment against the sibling who took the house and did not compensate the others for their respective shares. 
  
The liability of the sibling's spouse is not discussed separately. Huddle adds in a footnote that the statute of frauds had not been invoked as an affirmative defense to enforcement of the oral agreement regarding the two $20,000 payments for the two siblings' shares of the property.

Opinion issued April 30, 2015

In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00592-CV
———————————
HUMBERTO LOPEZ, JR. AND OLGA LOPEZ, Appellants
V.
MAYRA RIVAS AND LINDA LOPEZ, Appellees
On Appeal from the 190th District Court
Harris County, Texas
Trial Court Case No. 2011-32028

MEMORANDUM OPINION

Appellees Mayra Rivas and Linda Lopez conveyed, by a general warranty
deed, their respective one-third interests in their deceased parents’ property to their
brother and sister-in-law, Appellants Humberto Lopez, Jr. and Olga Lopez. Two
years later, Mayra and Linda sued Humberto and Olga, asserting that Humberto

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and Olga orally promised to pay them each $20,000, plus interest, for their
interests in the property in addition to the consideration of $10 recited in the deed.
After a bench trial, the trial court entered a final judgment awarding Mayra and
Linda damages in the amount of $20,000 each, plus interest. In their sole issue on
appeal, Humberto and Olga contend that the judgment must be reversed because
the parol evidence rule bars the trial court from considering Mayra and Linda’s
testimony concerning Humberto and Olga’s oral promise that contradicts the
express terms of the deed. We affirm.

Background

Humberto Lopez, Sr. and Delia Lopez were married and owned a home at
7833 Dayton Street in Houston, Texas. After their death, the Dayton Street
property devolved to their three surviving children—Mayra, Linda, and Humberto.
Each of the three siblings executed an “Affidavit of Distributees” in which they
stated that they each received a one-third interest in the property, which they
valued at $60,000.

Mayra and Linda conveyed their interests in the Dayton Street property to
Humberto and Olga by general warranty deed in April 2009. The deed recites that
Mayra and Linda granted, sold, and conveyed the Dayton Street property to
Humberto and Olga “for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00) and other good and valuable consideration to the Grantor in

3

hand paid by Humberto Lopez and Olga Lopez . . . the receipt and sufficiency of
which is hereby acknowledged.”
Two years later, in May 2011, Mayra and Linda sued Humberto and Olga,
asserting breach of agreement, fraud in a real estate transaction, restitution, and
seeking attorney’s fees.1

According to Mayra and Linda, Humberto and Olga
orally agreed but failed to pay Mayra and Linda each $20,000 within one year, plus
3.5 percent interest for their respective interests in the property. Mayra and Linda
alternatively requested that in the event the trial court could not enforce their oral
agreement, the trial court restore the ownership interests they held before executing
the deed.2

The trial court conducted a bench trial at which Mayra and Linda were the
sole witnesses. They each testified that before signing the deed, Humberto and
Olga had agreed to pay Mayra and Linda each $20,000 within one year, plus 3.5
percent interest, and that they signed the deed in reliance on this promise to pay.
 1 Mayra and Linda also asserted a vendors lien under their “foreclosure” claim and
requested that the trial court (1) order Appellants to provide an inventory of all
inherited personal property and (2) “account for such personal property” that they
“took possession of after their mother’s death [and was] no longer in Defendants’
possession . . . .”
2 Mayra and Linda also requested that (1) the trial court order Humberto and Olga to
provide Mayra and Linda with an “accounting of all rental income and expenses
from the Property since June 22, 2008, and to award [Mayra and Linda] two-thirds
of the net rental income from the property” and (2) the trial court enter a
temporary injunction enjoining Humberto and Olga “from spending or using for
their own, personal benefit any of net rental income derived from the rental or
lease of the Property.” 
4
Mayra and Linda also both testified that Humberto and Olga admitted that they
were attempting to secure financing to make good on their oral promise.
Specifically, Mayra and Linda testified that they received the following letter in
which Humberto and Olga’s attorney stated:

Dear Mayra and Linda: March 2, 2011
It is my understanding that it will take several more weeks to
complete and fund the loan, as the broker is still shopping for the best
deal for them. Humberto wants to thank you for your patience and
understanding . . . . As soon as they obtain the loan, all of you will sit
down together to discuss how to amicably resolve any unresolved
issues with your mother’s estate.

The trial court admitted the letter.

On April 15, 2014, the trial court entered a final judgment in favor of Mayra
and Linda. The judgment states: “as a result of [Humberto and Olga’s] breach of
contract and fraud in a real estate transaction, [Mayra and Linda] have sustained
damages and that [Mayra and Linda] should recover damages and costs from
[Humberto and Olga] jointly and severally.” The trial court awarded Mayra and
Linda attorney’s fees and ordered Humberto and Olga, jointly and severally, to pay
Mayra and Linda $20,000 each with prejudgment interest at 3.5 percent interest
and post-judgment interest at 5 percent. Humberto and Olga filed a motion for
new trial, which was overruled by operation of law. See TEX. R. CIV. P. 329b(c).

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Discussion

In their sole issue on appeal, Humberto and Olga contend that the trial court
erred in admitting parol evidence of an oral promise to contradict or vary the terms
of the general warranty deed. They argue that this error requires reversal because
it “was the only evidence offered in support of the trial court’s judgment.”

A. Standard of Review and Applicable Law

When parties reduce an agreement to writing, the law of parol evidence
presumes, in the absence of fraud, accident, or mistake, that any prior or
contemporaneous oral or written agreements merged into the final written
agreement. See DeClaire v. G & B Mcintosh Family Ltd. P’ship, 260 S.W.3d 34,
45 (Tex. App.—Houston [1st Dist.] 2008, no pet.). Any provisions not set out in
the writing are presumed to have been abandoned before execution of the
agreement or, alternatively, they are presumed to have never been made. Id.
Likewise, the parol evidence rule provides that the terms of a written contract
cannot be contradicted by evidence of an earlier, inconsistent agreement. Baroid
Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st
Dist.] 2005, pet. denied).
The parol evidence rule is not a rule of evidence, but a rule of substantive
contract law. Jarvis v. K & E Re One, LLC, 390 S.W.3d 631, 638 (Tex. App.—
Dallas 2012, no pet.). Its applicability is a question of law that we review de novo.

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Audubon Indem. Co. v. Custom Site–Prep, Inc., 358 S.W.3d 309, 316 (Tex. App.—
Houston [1st Dist.] 2011, pet. denied).

B. Analysis

Humberto and Olga contend that the deed expressly states that the agreedupon
consideration was $10. Therefore, they argue, the parol evidence rule bars
consideration of evidence to contradict or vary that term. They contend that the
statement in the deed that the consideration’s “sufficiency . . . is hereby
acknowledged” supports their claim that the trial court could not consider evidence
of the oral promise.3

 In contrast, Mayra and Linda contend that the trial court
properly admitted parol evidence to show the amount of consideration referenced
in the deed by the words “other good and valuable consideration.” We agree with
Mayra and Linda.

The parol evidence rule does not bar evidence of a consistent collateral
agreement. Ledig v. Duke Energy Corp., 193 S.W.3d 167, 179 n.10 (Tex. App.—
Houston [1st Dist.] 2006, no pet.). Thus, parol evidence may be used to clarify or
explain the agreement. Tex. Builders v. Keller, 928 S.W.2d 479, 481 (Tex. 1996).
In addition, we may consider parol evidence “‘to show want or failure of
consideration, and to establish the real consideration given for an instrument.’”
Audubon, 358 S.W.3d at 316 (quoting DeLuca v. Munzel, 673 S.W.2d 373, 376
 3 We note that Humberto and Olga did not raise the statute of frauds as a defense in
the trial court or on appeal.

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(Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.)); see McLernon v.
Dynergy, Inc., 347 S.W.3d 315, 335 (Tex. App.—Houston [14th Dist.] 2011, no
pet.) (“[P]arol evidence is admissible to show want or failure of consideration and
establish the actual consideration given for the instrument.”). Thus, we may
consider parol evidence “to determine if consideration exists even though the
parties have reduced their agreement to a writing which appears to be a completely
integrated agreement.” Audubon, 358 S.W.3d at 316 (internal quotations and
citations omitted).

Here, we conclude that Mayra and Linda’s testimony concerning the oral
promise was admissible to show the actual consideration given for the deed
because it did not contradict or vary the deed’s terms. The deed states that, in
addition to $10, “other good and valuable consideration” was given for the deed.
Deeds ordinarily embody such recitals of nominal consideration and “other good
and valuable consideration.” See, e.g., Averyt v. Grande, Inc., 717 S.W.2d 891,
898 (Tex. 1986); Tatum v. Tatum, No. 14-11-00622-CV, 2012 WL 1795112, at
*2–3 (Tex. App.—Houston [14th Dist.] May 17, 2012, no pet.); Troxel v. Bishop,
201 S.W.3d 290, 294 (Tex. App.—Dallas 2006, no pet.). Therefore, evidence that
establishes what the “other” consideration was is admissible to establish the true
consideration given in the consistent collateral agreement and does not contradict
or vary the terms of the deed. See ERI Consulting Eng’rs, Inc. v. Swinnea, 318

8

S.W.3d 867, 875–76 (Tex. 2010) (testimony of consideration was proper under
exception to parol evidence rule because “if the parties agreed that the lease
obligation was to be additional consideration for the buyout, then such an
agreement was a consistent collateral agreement. Nothing in such an agreement
would contradict the written contracts.”); Deluca, 673 S.W.2d at 376 (parol
evidence admissible to explain provision of release concerning consideration);
Tarrant v. Schulz, 441 S.W.2d 868, 869–70 (Tex. Civ. App.—Houston [14th Dist.]
1969, writ ref’d n.r.e.) (where deed recited consideration of “$10 and other good
and valuable consideration . . . parol evidence was admissible to show the true
consideration or that there was no consideration given”).
Humberto and Olga rely on Johnson v. Driver, 198 S.W.3d 359 (Tex.
App.—Tyler 2006, no pet.), to support their contention that evidence of the oral
promise was inadmissible. In Johnson, the defendant argued that the deed, which
stated that the property was “granted, sold, and conveyed” “in consideration of ten
dollars and other valuable consideration,” evidenced a gift. Id. at 361. The court
of appeals held that the appellant could not introduce parol evidence to show that
the conveyance was a gift, rather than a sale, where appellant did not argue
ambiguity. Id. at 363–64. But, here, Mayra and Linda did not offer parol evidence
to prove that the conveyance was a gift; rather, they offered evidence to show that

9

the phrase “other consideration” in the deed referred to a consistent collateral
agreement. See id. Accordingly, Johnson does not support reversal here.
Humberto and Olga also contend that evidence of the oral promise was
inadmissible because the words “the receipt and sufficiency of which is hereby
acknowledged” “memorialize[d] the grantor’s admission that the consideration,
while not disclosed, was nevertheless satisfactory.” According to Humberto and
Olga, these words also mean that Mayra and Linda acknowledged receipt of all the
consideration they were provided and, therefore, no consideration can be
outstanding. But, as Mayra and Linda point out, the consideration that was
deemed sufficient and of which receipt was acknowledged was the promise to pay
Mayra and Linda each $20,000 plus interest for their respective interests in the
property. Therefore, we conclude that the phrase “the receipt and sufficiency of
which is hereby acknowledged” does not render evidence of the oral promise
inadmissible. We hold that the trial court did not err in admitting Mayra and
Linda’s evidence of Humberto and Olga’s oral promise.

We overrule Appellants’ sole issue.

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Conclusion

We affirm the judgment of the trial court.

Rebeca Huddle
Justice

Panel consists of Justices Jennings, Higley, and Huddle.

THE STATUTE OF FRAUDS WAS  NOT RAISED IN THE ANSWER 


CASE STYLE ON APPEAL: Humberto Lopez, Jr. and Olga Lopez v. Mayra Rivas and Linda Lopez., No. 01-14-00592-CV (Tex. App. - Houston [1st Dist] Apr. 30, 2015) (Memorandum Opinion by Justice Rebeca Huddle
TRIAL COURT CASE INFO:  Mayra Rivas and Linda Lopez vs. Humberto Lopez, Jr. and Olga Lopez; Harris County District Clerk Cause No 2011-32028; Judgment for Plaintiffs signed by Judge Patricia J. Kerrigan, presiding judge of the 190th District Court,