Joan DeYoung, Stephen DeYoung, M.D., and David DeYoung v. William L. Maynard, Individually and as of the Estate of Judy Page Maynard, and Maynard Properties, L.P.

ACCEPTED

01-15-00260

FIRST COURT OF APPEALS

HOUSTON, TEXAS

8/17/2015 8:29:47 PM

CHRISTOPHER PRINE

CLERK

NO. 01-15-00260-CV

In The FILED IN

1st COURT OF APPEALS

First Court of Appeals

HOUSTON, TEXAS

8/17/2015 8:29:47 PM

CHRISTOPHER A. PRINE

Houston, Texas Clerk

Joan DeYoung, Stephen DeYoung, M.D., and David DeYoung

Appellants,

v.

Judy Page Maynard, William L. Maynard, and Maynard Properties, L.P.

Appellees.

On Appeal from the 270th Judicial District Court

of Harris County, Texas

Trial Court Cause No. 2011-18770

BRIEF OF APPELLANTS

Daniel W. Jackson, SBN 00796817

Scott K. Vastine, SBN 24056469

Jennifer H. Frank, SBN 24087537

The Jackson Law Firm

3900 Essex Lane, Suite 1116

Houston, Texas 77027

(713) 522-4435

(713) 527-8850 – fax

Counsel for Appellants

ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL

Appellants/Plaintiffs Joan DeYoung

Stephen DeYoung, M.D.

David DeYoung

Counsel for Appellants Daniel W. Jackson

Scott K. Vastine

Jennifer H. Frank

The Jackson Law Firm

3900 Essex Lane, Suite 1116

Houston, Texas 77027

(713) 522-4435

(713) 527-8850 – fax

Appellees/Defendants William L. Maynard, as Independent

Executor of the Estate of Judy Page

Maynard

William L. Maynard

Maynard Properties, L.P.

Counsel for Appellees Gregory N. Jones

Law Office of Gregory N. Jones

2323 S. Shepherd, 14th Floor

Houston, Texas 77019

(713) 979-4691

(713) 979-4440 – fax

Counsel for Appellee William L.

Maynard as Independent Executor of

the Estate of Judy Page Maynard

William L. Maynard

1300 Post Oak Blvd., Suite 2500

Houston, Texas 77056

(713) 623-0887

(713) 960-1527 – fax

Counsel for Appellees William L.

Maynard and Maynard Properties, L.P.

ii

TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ................................................... ii

INDEX OF AUTHORITIES ........................................................................... v

STATEMENT OF THE CASE .................................................................... vii

STATEMENT REGARDING ORAL ARGUMENT .................................... viii

ISSUE PRESENTED ................................................................................ viii

PROCEDURAL BACKGROUND................................................................. 1

STATEMENT OF FACTS ............................................................................ 2

Without notice, an appraisal, or compensation, Appellee William

L. Maynard stripped the Partnership of its property. ........................... 3

Judy and Bill Maynard owed the DeYoungs a fiduciary duty. ............. 5

Bill Maynard also purchased substantial property surrounding

the Partnershipʼs property................................................................... 7

STANDARD OF REVIEW ............................................................................ 8

ARGUMENT AND AUTHORITIES .............................................................. 8

I.     The trial court erred in granting final summary judgment

because Appellees did not move on all causes of action

asserted by the DeYoungs. ....................................................... 9

A.   Even though the trial court committed reversible

error by granting more relief than requested, the

Court should treat the summary judgment as a final

judgment and consider all issues raised in this

appeal............................................................................. 11

iii

II.     The trial court erred in granting final summary judgment

because Appellees failed to specify the elements as to

which the DeYoungs purportedly had no evidence. ................ 12

III.     The trial court erred in granting final summary judgment

because Appellees improperly used a no-evidence motion

to shift the burden of proof back to the DeYoungs on their

self-dealing allegation. ............................................................. 15

IV.     The trial court erred in granting final summary judgment

because the DeYoungs submitted competent summary

judgment evidence establishing each element of their

causes of action....................................................................... 16

PRAYER .................................................................................................... 19

CERTIFICATE OF COMPLIANCE ............................................................ 22

CERTIFICATE OF SERVICE..................................................................... 22

APPENDICES

Appendix 1: Defendantsʼ motions for no-evidence and traditional

summary judgment (exhibits omitted)

Appendix 2: Trial courtʼs February 17, 2015 order

Appendix 3: Text of applicable rules and statutes

Appendix 4: Cases

iv

INDEX OF AUTHORITIES

Texas Supreme Court Cases

Chessher v. Sw. Bell Telephone Co.,

658 S.W.2d 563 (Tex. 1983) ............................................................... 9

Farm Bureau Cty. Mut. Ins. Co. v. Rogers,

455 S.W.3d 161 (Tex. 2015) ............................................................. 11

Forbes, Inc. v. Granada Biosciences, Inc.,

124 S.W.3d 167 (Tex. 2003) ............................................................. 17

Ford Motor Co. v. Ridgway,

135 S.W.3d 598 (Tex. 2004) ............................................................. 17

G & H Towing Co. v. Magee,

347 S.W.3d 293 (Tex. 2011) ......................................................... 9, 11

Joe v. Two Thirty Nine Joint Venture,

145 S.W.3d 150 (Tex. 2004) ............................................................... 8

Kinzbach Tool Co. v. Corbett-Wallace Corp.,

160 S.W.2d 509 (Tex. 1942) ....................................................... 14, 17

Lehmann v. Har-Con Corp.,

39 S.W.3d 191 (Tex. 2001) ............................................................... 11

M.R. Champion, Inc. v. Mizell,

904 S.W.2d 617 (Tex. 1994) ............................................................... 6

Texas Court of Appeals Cases

Cluck v. Mecom,

401 S.W.3d 110

(Tex. App.—Houston [14th Dist.] 2011, pet. denied) ........................ 15

Jose Fuentes Co., Inc. v. Alfaro,

418 S.W.3d 280 (Tex. App.––Dallas 2013, pet. denied)............. 12, 13

v

Garcia v. State Farm Lloyds,

287 S.W.3d 809

(Tex. App.––Corpus Christi-Edinburg 2009, pet. denied) ................. 13

Harvey v. Casebeer,

531 S.W.2d 206 (Tex. Civ. App.—Tyler 1975, no writ) ............... 14, 17

In re Estate of Coleman,

360 S.W.3d 606 (Tex. App.––El Paso 2011, no pet.) ....................... 15

Mathis v. Restoration Builders, Inc.,

231 S.W.3d 47 (Tex. App.—Houston [14th Dist.] 2007, no pet.) ........ 8

Rose v. Kober Fin. Corp.,

874 S.W.2d 358 (Tex. App.––Houston [14th Dist.] 1994, no writ) .... 10

Statutory Provisions

Tex. Bus. Orgs. Code § 152.205.................................................................. 9

Tex. Bus. Orgs. Code § 152.206.................................................................. 9

Rules

Tex. R. Civ. P. 166a(i) .................................................................... 12, 14, 16

Tex. R. Civ. P. 166a(i) (cmt. 1997)............................................................. 14

vi

TO THE HONORABLE FIRST COURT OF APPEALS:

COME NOW appellants Joan DeYoung, Stephen DeYoung, M.D.,

and David DeYoung and respectfully present their brief on the merits in the

above-named cause, pursuant to the Texas Rules of Appellate Procedure.

STATEMENT OF THE CASE

Nature of the Case Judy Page Maynard was trustee of a Texas

general partnership, Russell, Page &

Partners. Throughout the course of her

tenure, the partnership property was

transferred to her husband, William L.

Maynard, as well as Maynard Properties,

L.P., without notice or compensation to the

other partners.

The DeYoungs sued the Maynard

defendants for breach of fiduciary duty (all

defendants), breach of duty of loyalty and

care (Judy Maynard), conversion (Bill and

Judy Maynard), and breach of contract

(Judy Maynard).

Trial Court The Honorable Brent Gamble, 270th

Judicial District Court, Harris County, Texas

Trial Court The trial court granted defendantsʼ no-

Disposition evidence motion for summary judgment,

which was treated as a final judgment even

though defendants did not move on all of

plaintiffsʼ causes of action.

vii

STATEMENT REGARDING ORAL ARGUMENT

Appellants request oral argument. This appeal involves questions of

law that should be evaluated in the context of the specific facts in this case.

Oral argument will aid the Court in making a decision because the parties

will be able to assist with the record.

ISSUE PRESENTED

Whether the trial court erred in granting Appelleesʼ no-evidence

motion for summary judgment when:

(I) Appellees did not move on all causes of action asserted

by the DeYoungs;

(II) Appellees failed to specify the elements as to which the

DeYoungs purportedly had no evidence;

(III) Appellees used a no-evidence motion to improperly shift

the burden of proof back to the DeYoungs as to the

DeYoungsʼ breach of fiduciary duty cause of action; and

(IV) The DeYoungs presented more than a scintilla of

evidence in response to Appelleesʼ defective no-evidence

motion.

viii

PROCEDURAL BACKGROUND

On October 23, 2014, defendants Judy Page Maynard, William L.

Maynard, and Maynard Properties, L.P. (collectively “the Maynards” or

“Appellees”) filed their motions for no-evidence and traditional summary

judgment. C.R. 161–227; App. 1.

On January 9, 2015, plaintiffs Joan DeYoung, Stephen DeYoung,

M.D., and David DeYoung (collectively “the DeYoungs” or “Appellants”)

filed plaintiffsʼ response to defendantsʼ no-evidence and traditional motions

for summary judgment, C.R. 233–47, the declaration of Stephen DeYoung,

M.D., C.R. 248–50, and the declaration of Daniel W. Jackson. C.R. 251–

57; Suppl. C.R. 3–218.

On February 17, 2015, the trial court granted the Maynardsʼ no-

evidence motion for summary judgment, C.R. 276–77 and App. 2, which,

as indicated on the trial courtʼs activity inquiry sheets and electronic docket

sheet, was interlocutory because the Maynards did not move for summary

judgment on all of the DeYoungsʼ causes of action. C.R. 284, 292.

On March 9, 2015, the trial court entered a second order granting the

Maynardsʼ no-evidence motion for summary judgment, C.R. 278–79, which

1

was identical to the order entered on February 17, 2015, yet designated as

a final judgment. C.R. 292.

On March 13, 2015, as reflected on the trial courtʼs electronic docket

sheet, the parties were informed that “The Courtʼs order of 2/17/15 was

intended to be a final J disposing of all parties and all claims. Request

parties submit final J in appropriate form.” C.R. 292.

Although the Maynards submitted a proposed final judgment on

March 16, 2015, C.R. 280–81, and the DeYoungs submitted a proposed

final judgment1 on March 19, 2015, C.R. 282–83, the trial court did not

enter either order.

STATEMENT OF FACTS

In April 1966, the DeYoungs2 each purchased a 3.596% ownership

interest in Russell, Page & Partners (the “Partnership”), a Texas general

partnership formed to invest in real estate in Liberty County, Texas.

C.R. 248, ¶¶ 2–3.

The Partnershipʼs property consisted of hundreds of acres of real

property, primarily located in the M.G. White survey on the east side of the

1

Which was approved as to form only.

2

The ownership interests were actually purchased for the DeYoungs by their

parents, as they were minors at the time.

2

Trinity River, which was initially held in the name of “Maurice Page,

Trustee.” Maurice Page is Appellee Judy Page Maynardʼs mother.

C.R. 248, ¶¶ 2–4.

Without notice, an appraisal, or compensation, Appellee

William L. Maynard stripped the Partnership of its property.

On January 28, 1991, Maurice Page transferred 20.1449 acres of

Partnership property to her son-in-law, Appellee William L. Maynard (“Bill

Maynard”) without providing notice to the DeYoungs. C.R. 248, ¶ 5; Suppl.

C.R. 3–5. The 20.1449 acres was not appraised prior to its transfer to Bill

Maynard, and Bill Maynard did not pay the Partnership for the property.

C.R. 255, ¶¶ 35–37, 42; Suppl. C.R. 209–18.

In April 1994, Maurice Page resigned as the Partnershipʼs trustee and

appointed her daughter, Appellee Judy Maynard, as substitute trustee.

Suppl. C.R. 6–9. Bill Maynard prepared the documents to transfer the

property to Judy Page Maynard and to appoint her as substitute trustee.

Suppl. C.R. 6–9. As part of this transition, on May 11, 1994, Maurice Page,

Trustee, transferred approximately 755 acres of Partnership property to

Judy Maynard as trustee. Suppl. C.R. 10–15. The general warranty deed

transferring the partnership property to Judy Maynard was prepared and

filed by Bill Maynard. Suppl. C.R. 10–16.

3

In December 1994, just seven months after she took over the

Partnershipʼs operations, Judy Maynard transferred 629 acres of the

Partnershipʼs property to Bill Maynard, again without notice to the partners

or an appraisal of the property. Suppl. C.R. 17–20; C.R. 249, ¶ 6; C.R.

255–56, ¶¶ 35, 38, 39; Suppl. C.R. 209–18. Although Bill Maynard

produced a 10-year promissory note for $28,305 plus 7% interest,3 thus

revealing the nature of this transaction as an “unsecured, seller financed

transaction,” Suppl. C.R. 21–24, Bill Maynard has been unable to produce

a single document evidencing any payments to the Partnership toward

satisfaction of the promissory note.4 C.R. 255–56, ¶¶ 35, 38, 39, 42; Suppl.

C.R. 209–18.

On April 20, 2010, Judy Maynard transferred another 47.49 acres of

Partnership property to Appellee Maynard Properties, L.P., a company

owned by Bill Maynard, without notice to the partners, an appraisal, or

compensation. Suppl. C.R. 25–28; C.R. 249, ¶ 7; C.R. 255–56, ¶¶ 35, 40–

42; Suppl. C.R. 209–18.

3

The prime interest rate in December 1994 was 8.5%.

4

Although no amounts were actually paid for the 629 acres, the “negotiated price”

of $45 per acre is significantly less than the $193.17 per acre Bill Maynard

agreed to pay Exxon in October 1989. Suppl. C.R. 62–66, 68–80.

4

Finally, on May 21, 2010, $42,170.34 was transferred out of the

Partnershipʼs Wells Fargo account, which was controlled by Judy Maynard.

C.R. 255, ¶ 32; Suppl. C.R. 197–202. The DeYoungs did not receive notice

that the $42,170.34 was being withdrawn from the Partnershipʼs bank

account, have not received an explanation for this withdrawal, and have not

received any of the funds from this unexplained withdrawal. C.R. 249,

¶ 10.

Judy and Bill Maynard owed the DeYoungs a fiduciary duty.

There is no legitimate dispute that Bill and Judy Maynard owed the

DeYoungs a fiduciary duty. In April 1994, Judy Maynard was appointed

“Trustee for Russell Page & Partners” and accepted the attendant duties

and obligations. Suppl. C.R. 6–7. In fact, Judy Maynard held the

Partnershipʼs property as trustee and prepared and signed the

Partnershipʼs tax returns. Suppl. C.R. 10–15, 29; C.R. 180, 191, 194.

In May 2000, Bill Maynard bought Frankie West-Davidʼs six percent

(6%) interest in the Partnership, Suppl. C.R. 37–38, and, in June 2001,

purchased a five percent (5%) interest from the estate of H.B. Canter.

Suppl. C.R. 39–42. As a result, Bill Maynard was a general partner in the

Partnership, and owed his partners, including the DeYoungs, the attendant

5

fiduciary duties. M.R. Champion, Inc. v. Mizell, 904 S.W.2d 617, 618 (Tex.

1994).

Although Bill Maynard contends that he wanted to close out the

Partnership because of “its dire financial condition,” C.R. 165, between

1999 and 2006, Bill Maynard attempted to purchase all remaining

partnership interests, Suppl. C.R. 31–60. In fact, in May 2006, Maynard

offered to pay the DeYoungs, Claudia West, and the Nelson Trust $53,157

for their partnership interests. Suppl. C.R. 47–58. Not only was Bill

Maynard willing to pay substantial sums of money to purchase a

partnership in “dire financial condition,” Maynard was even willing to

mislead his partners to do so.

Specifically, on May 1, 2000, Bill Maynard offered to purchase

Frankie West-Davidʼs six percent (6%) partnership interest for $2,500,

which Maynard represented was “slightly less than [Frankieʼs] current

capital account.” Suppl. C.R. 37 (emphasis added). However, less than

a year later, when attempting to purchase Carla Nelsonʼs partnership

interest, Maynard represented to his partner that “Frankie sold Phillips

Estateʼs interest for approximately 50% of capital account value.”

Suppl. C.R. 44 (emphasis added).

6

In addition to being a general partner, Bill Maynard “assisted Judy

with the preparation of the partnership tax returns” since 1994:

Suppl. C.R. 29.

Likewise, Bill Maynard was responsible for transmitting the

Partnershipʼs tax returns to the Internal Revenue Service. Suppl. C.R. 30,

35–37.

Bill Maynard also purchased substantial

property surrounding the Partnershipʼs property.

Although Bill Maynard now contends that the Partnership property

had little value due to its locale and being “used as a land dump,” thus

incurring “damages as a result of oil spills” that were expensive to clean-up,

C.R. 164, n.3, from 1989 through 2010, Bill Maynard, individually and

through Maynard Properties, purchased over 2,200 acres in the same area,

some of which adjoined the Partnershipʼs property. C.R. 253–54, ¶¶ 15–

27; Suppl. C.R. 61–196.

7

STANDARD OF REVIEW

An appellate court reviews a no-evidence motion for summary

judgment de novo. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150,

156 (Tex. 2004).

When reviewing a no-evidence summary judgment, the Court must

“review the entire record in the light most favorable to the nonmovant,

indulging every reasonable inference and resolving any doubts against the

motion. Mathis v. Restoration Builders, Inc., 231 S.W.3d 47, 50 (Tex.

App.—Houston [14th Dist.] 2007, no pet.) (emphasis added).

ARGUMENT AND AUTHORITIES

The trial court committed reversible error in granting final summary

judgment on Appelleesʼ no-evidence motion because: (I) Appellees did not

move on all causes of action asserted by the DeYoungs; (II) Appellees

failed to articulate the elements on which the DeYoungs purportedly have

no evidence; (III) Appellees improperly used the no-evidence motion to shift

the burden of proof back to the DeYoungs to prove self-dealing; and

(IV) the DeYoungs nevertheless provided more than a scintilla of evidence

in response.

8

I. The trial court erred in granting final summary judgment

because Appellees did not move on all causes of action

asserted by the DeYoungs.

“It is axiomatic that one may not be granted judgment as a matter of

law on a cause of action not addressed in a summary judgment

proceeding.” Chessher v. Sw. Bell Telephone Co., 658 S.W.2d 563, 564

(Tex. 1983). Summary judgments “may only be granted upon grounds

expressly asserted in the summary judgment motion.” G & H Towing Co. v.

Magee, 347 S.W.3d 293, 297 (Tex. 2011).

Because Appellees did not move for summary judgment on all

causes of action asserted by the DeYoungs, the trial court erroneously

granted Appellees more relief than they were entitled to. Therefore, the

Court should remand this matter at least with respect to the unaddressed

cause of action.

On October 10, 2012, the DeYoungs filed their second amended

petition, asserting the following causes of action:

1. breach of fiduciary duty (against all Appellees) C.R. 115–

16;

2. breach of the duty of loyalty and care under Texas

Business Organizations Code §§ 152.205, 152.206

(against Judy Maynard) C.R. 117;

3. conversion (against Bill and Judy Maynard) C.R. 117; and

4. breach of contract (against Judy Maynard) C.R. 117.

9

In their no-evidence motion for summary judgment, Appellees moved

for summary judgment on three of the DeYoungsʼ four causes of action:

“Plaintiffs can produce no evidence to support a cause of action for breach

of fiduciary duty, breach of contract, and conversion against Defendants.”

C.R. 163; App. 1 at 3. Defendants did not move for summary judgment on

the DeYoungsʼ cause of action for breach of the duty of loyalty and care,

much less specify the elements upon which they believed the DeYoungs

had no evidence. C.R. 161–64; App. 1 at 1–4.

Under factually similar circumstances, the Fourteenth Court of

Appeals remanded a case where the trial court granted final summary

judgment even though the defendant had not expressly set forth the causes

of action in plaintiffsʼ supplemental petition. Rose v. Kober Fin. Corp., 874

S.W.2d 358, 362 (Tex. App.––Houston [14th Dist.] 1994, no writ). The

defendant in Rose argued on appeal that the final summary judgment

should be upheld because it negated the damage element on all of

plaintiffʼs causes of action.

The Fourteenth Court of Appeals disagreed, reversing and remanding

the case because the summary judgment purported to “grant more relief

than requested.” Id. Accordingly, any argument by Appellees in the instant

10

case that their no-evidence motion was properly granted because they

negated the damage element on each of the DeYoungsʼ causes of action

should, likewise, be rejected by this Court.

As such, the trial courtʼs final judgment should be reversed and

remanded with respect to the DeYoungsʼ claim for breach of duty of loyalty

and care.

A. Even though the trial court committed reversible error by

granting more relief than requested, the Court should treat

the summary judgment as a final judgment and consider

all issues raised in this appeal.

“When a trial court grants more relief than requested and, therefore,

makes an otherwise partial summary judgment final, that judgment,

although erroneous, is final and appealable.” G & H Towing Co., 347

S.W.3d at 298. “The court of appeals should treat such a summary

judgment as any other final judgment, considering all matters raised and

reversing only those portions of the judgment based on harmful error. Id.5

5

Lehmann v. Har-Con Corp., 39 S.W.3d 191, 206 (Tex. 2001) (“The record may

help illumine whether an order is made final by its own language, so that an order

that all parties appear to have treated as final may be final despite some

vagueness in the order itself …”); Farm Bureau Cty. Mut. Ins. Co. v. Rogers, 455

S.W.3d 161, 163–64 (Tex. 2015) (dismissing a case for want of jurisdiction where

the language of the order did not disposed of all parties and claims, but where

there was no other evidence of the trial courtʼs intent with respect to the finality of

the order).

11

Therefore, the trial courtʼs judgment should be reversed and the case

remanded for further proceedings with respect to the DeYoungsʼ breach of

duty of loyalty and due care claim, and this Court should consider the

merits of the DeYoungsʼ remaining points of error.

II. The trial court erred in granting final summary judgment

because Appellees failed to specify the elements as to which

the DeYoungs purportedly had no evidence.

Appelleesʼ one-paragraph argument in support of its no-evidence

motion for summary judgment belies Rule 166a(i)ʼs requirement that “[t]he

motion must state the elements as to which there is no evidence.” In

particular, “a no-evidence motion that only generally challenges the

sufficiency of the non-movantʼs case and fails to state the specific elements

that the movant contends lack supporting evidence is fundamentally

defective and cannot support summary judgment as a matter of law.” Jose

Fuentes Co., Inc. v. Alfaro, 418 S.W.3d 280, 283 (Tex. App.––Dallas 2013,

pet. denied).

In Alfaro, the movant listed each of the causes of action asserted and

listed the elements of each claim, but argued only that the plaintiffs had no

evidence to support “one or more” of the elements of the claim, without any

further discussion. Id. at 284. The Dallas Court of Appeals remanded the

12

case, finding the no-evidence motion to be legally insufficient as a matter of

law. Id. at 288.

Similarly, in Garcia v. State Farm Lloyds, State Farm moved for no-

evidence summary judgment on the following grounds:

(1) there was no evidence that it owed the Garcias more than it

already paid; (2) there was no evidence that the Garcias had

any complaint with the way State Farm handled their claims,

other than that State Farm did not pay enough; and (3) there

was no evidence of any misrepresentations by State Farm.

287 S.W.3d 809, 818–19 (Tex. App.––Corpus Christi-Edinburg 2009, pet.

denied). The Corpus Christi Court of Appeals likewise found State Farmʼs

no-evidence motion to be insufficient for “only generally attack[ing] a factual

theory, without specifying the elements of the claims being attacked,” and

treated the motion like a traditional motion for summary judgment. Id. at

819.

In the instant case, Appellees moved for no-evidence summary

judgment on the DeYoungsʼ claims for breach of fiduciary duty, breach of

contract, and conversion. C.R. 163; App. 1 at 3. In their motion, Appellees

first stated that the DeYoungs do not have evidence on one or more

elements of their claims, just as in the Alfaro case. Then, Appellees made

a general attack, as in the Garcia case, merely noting that:

13

Plaintiff cannot show any evidence that Defendants wrongfully

engaged in any transactions that injured Plaintiffs or that

Defendants received any personal benefit as a result of

transactions related to the sale of partnership property.

C.R. 163; App. 1 at 3. Appelleesʼ conclusory statement fails to identify the

specific elements of the claims as to which they allege the DeYoungs have

no evidence, as required by Rule 166a(i).6

Moreover, Appelleesʼ conclusory statement further fails because,

even if it had complied with Rule 166a(i), in the context of self-dealing and

breach of fiduciary duty, an injury need not be shown. Kinzbach Tool Co. v.

Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942) (“It would be

dangerous precedent for us to say that unless some affirmative loss can be

shown, the person who has violated his fiduciary relationship with another

may hold on to any secret gain or benefit he may have thereby acquired.”);

Harvey v. Casebeer, 531 S.W.2d 206, 207 (Tex. Civ. App.—Tyler 1975, no

writ) (“Self-dealing transactions may be attacked by the beneficiary even

though he has suffered no damages …”).

6

A no-evidence motion “must be specific in challenging the evidentiary support for

an element of a claim or defense; [Rule 166a](i) does not authorize conclusory

motions or general no-evidence challenges to an opponent's case.” Tex. R. Civ.

P. 166a(i) (cmt. 1997).

14

Therefore, the trial courtʼs judgment should be reversed and this case

remanded for further proceedings with respect to the DeYoungsʼ causes of

action for breach of fiduciary duty, breach of contract, and conversion.

III. The trial court erred in granting final summary judgment

because Appellees improperly used a no-evidence motion to

shift the burden of proof back to the DeYoungs on their self-

dealing allegation.

“[W]hen a plaintiff alleges self-dealing by the fiduciary as part of a

breach-of-fiduciary-duty claim, a presumption of unfairness automatically

arises, which the fiduciary bears the burden to rebut.” Cluck v. Mecom,

401 S.W.3d 110, 114 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).

A party with the burden of proof on an issue cannot shift the burden of proof

through a no-evidence motion for summary judgment. In fact, “[i]t is error

for a trial court to grant a no-evidence summary judgment on a claim for

which the moving party bears the burden of proof.” In re Estate of

Coleman, 360 S.W.3d 606, 610 (Tex. App.––El Paso 2011, no pet.).

It is undisputed that the DeYoungs alleged self-dealing in connection

with their breach of fiduciary duty claim against Appellees. C.R. 116, ¶ 37.

Therefore, Appellees “bear[] the burden to fully disclose [their] activities as

fiduciar[ies] and prove the fairness of [their] personal transactions with the

[Partnership].” Cluck, 401 S.W.3d at 114.

15

In connection with the DeYoungsʼ breach of fiduciary duty claim, the

trial court improperly allowed Appellees to shift the burden of proof to the

DeYoungs by improvidently granting their no-evidence motion for summary

judgment.

Because the trial court committed reversible error by granting

Appelleesʼ no-evidence motion for summary judgment on the DeYoungsʼ

breach of fiduciary duty claim, the trial courtʼs judgment should be reversed

and this case remanded for further proceedings with respect to the

DeYoungsʼ breach of fiduciary duty claim

IV. The trial court erred in granting final summary judgment

because the DeYoungs submitted competent summary

judgment evidence establishing each element of their causes of

action.

The DeYoungs presented sufficient – actually, abundant – evidence

to defeat Appelleesʼ no-evidence motion.

Again, even if this Court considers Appelleesʼ no-evidence motion to

be in compliance with Rule 166a(i) of the Texas Rules of Civil Procedure,

the only element Appellees challenged was that the DeYoungs did not have

any evidence of an injury. Notwithstanding the fact that the DeYoungs

need not prove injury in connection with their breach of fiduciary duty and

16

breach of the duty of loyalty and care causes of action,7 the DeYoungs

presented ample evidence to defeat Appelleesʼ no-evidence motion for

summary judgment.

“[I]f the nonmovant presents more than a scintilla of evidence

supporting the disputed issue, summary judgment is improper.” Forbes,

Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). In

other words, “[a] no-evidence summary judgment is improper if the

respondent brings forth more than a scintilla of probative evidence to raise

a genuine issue of material fact.” Id.

When determining if more than a scintilla of evidence has been

produced in response to a Rule 166a(i) motion for summary

judgment, the evidence must be viewed in the light most

favorable to the non-movant. We have repeatedly held that

more than a scintilla of evidence exists if the evidence “rises to

a level that would enable reasonable and fair-minded people to

differ in their conclusions.”

***

Both direct and circumstantial evidence may be used to

establish any material fact.

Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004).

7

Kinzbach Tool Co., 160 S.W.2d at 514 (“It would be dangerous precedent for us

to say that unless some affirmative loss can be shown, the person who has

violated his fiduciary relationship with another may hold on to any secret gain or

benefit he may have thereby acquired.”); Harvey, 531 S.W.2d at 207 (“Self-

dealing transactions may be attacked by the beneficiary even though he has

suffered no damages …”).

17

The DeYoungs attached exhibits to their summary judgment

response demonstrating that, from January 1991 through April 2010,

Appellees transferred 696.6349 acres of Partnership property to Bill

Maynard and Maynard Properties, without notice to the DeYoungs or

compensation to the Partnership. C.R. 248, ¶ 5; Suppl. C.R. 3–5; C.R. 255,

¶¶ 35–37, 42; Suppl. C.R. 209–18; CR 249, ¶ 6; C.R. 255–56, ¶¶ 35, 38,

39; Suppl. C.R. 17–20; CR 255–56, ¶¶ 35, 38, 39, 42; Suppl. C.R. 209–18;

C.R. 249, ¶ 7; Suppl. 25–28; C.R. 255–56, ¶ 35, 40, 41; Suppl. C.R. 209–

18.

Although worth much more, Appellees admitted that the property they

stole was worth at least $45 per acre,8 which Bill Maynard never actually

paid to the Partnership. Suppl. C.R. 17–24; C.R. 255–56, ¶¶ 35, 38, 39,

42; Suppl. C.R. 209–18.

In other words, the DeYoungs suffered damages because: (1) they

were deprived of the value of each of their 3.596% interests in the

partnership as a result of Appellees withdrawing $42,170.34 from the

Partnershipʼs Wells Fargo account, without notice to the DeYoungs or an

8

On December 5, 1994, in connection with his “purchase” of 629 partnership

acres, Bill Maynard signed a promissory note for $28,305, which is $45 per acre.

C.R. 252, ¶ 10; Suppl. C.R. 17–24.

18

explanation, C.R. 255, ¶ 32; Suppl. C.R. 197–202; C.R. 249, ¶ 10; and (2)

the Partnershipʼs real property was transferred to Bill Maynard and

Maynard Properties, without notice or compensation. C.R. 248, ¶ 5; Suppl.

C.R. 3–5; C.R. 255, ¶¶ 35–37, 42; Suppl. C.R. 209–18; C.R. 249, ¶ 6; C.R.

255–56, ¶¶ 35, 38, 39; Suppl. C.R. 17–20; C.R. 255–56, ¶¶ 35, 38, 39, 42;

Suppl. C.R. 209–18; C.R. 249, ¶ 7; Suppl. C.R. 25–28; C.R. 255–56, ¶ 35,

40, 41; Suppl. C.R. 209–18. In short, the Partnershipʼs assets were

depleted without notice or explanation, much less consideration or

compensation.

When self-dealing by a fiduciary is alleged, it is the fiduciaryʼs burden

to demonstrate the fairness of the transactions at issue, and the plaintiff

need not prove injury. Nevertheless, the DeYoungs presented more than a

scintilla of evidence establishing that the DeYoungs suffered injury as a

result of Appelleesʼ depletion of the Partnershipʼs assets. Therefore, the

trial court committed reversible error and this matter should be remanded

for trial.

PRAYER

Appelleesʼ no-evidence motion for summary judgment was

improvidently granted as a final judgment.

19

It is well settled under Texas law that a party may not be granted

more relief than requested. However, Appellees were granted final

judgment even though they did not move on all causes of action asserted

by the DeYoungs.

Texas law undeniably requires that a party moving for summary

judgment on no evidence grounds must specify the elements as to which

the opposing party has no evidence. Appellees failed to adhere to this

requirement, yet obtained final judgment in their favor nonetheless.

Texas precedent explicitly dictates that when self-dealing is alleged

against a defendant, the defendant has the burden to establish the fairness

of the transactions and cannot use a no-evidence motion to shift the burden

of proof back to the plaintiff. Appellees did just that, but were nevertheless

granted final judgment.

Texas law demands that any evidence submitted in response to a no-

evidence motion for summary judgment be viewed in a light most favorable

to the non-movant and even allows circumstantial evidence to establish

material facts. The DeYoungs submitted ample evidence that, at the very

least, allow reasonable minds to differ in their conclusions about the

propriety of Bill Maynardʼs actions in “purchasing” Partnership property.

20

Despite the evidence presented by the DeYoungs, the trial court

erroneously granted Appelleesʼ no-evidence motion.

For these reasons, the trial courtʼs final judgment should be reversed

and this matter should be remanded for trial on each of the DeYoungsʼ

causes of action.

Respectfully submitted,

/s/ Daniel W. Jackson

Daniel W. Jackson, SBN 00796817

Scott K. Vastine, SBN 24056469

Jennifer H. Frank, SBN 24087537

3900 Essex Lane, Suite 1116

Houston, Texas 77027

(713) 522-4435

(713) 527-8850 – fax

daniel@jacksonlaw-tx.com

scott@jacksonlaw-tx.com

jennifer@jacksonlaw-tx.com

Counsel for Appellants

21

CERTIFICATE OF COMPLIANCE

Pursuant to Rule 9.4(i)(1) of the Texas Rules of Appellate Procedure,

I hereby certify that the content to be included in calculating the length of a

document contains 4,217 words.

/s/ Daniel W. Jackson

Daniel W. Jackson, SBN 00796817

CERTIFICATE OF SERVICE

I certify that a copy of the foregoing document has been served on all

counsel of record, via ProDocs and email, on August 17, 2015:

Gregory N. Jones William L. Maynard

Law Office of Gregory N. Jones 1300 Post Oak Blvd, Suite 2500

2323 S. Shepherd, 14th Floor Houston, Texas 77056

Houston, Texas 77019

wmaynard@bmpllp.com

gjones@gnjlaw.net

/s/ Daniel W. Jackson

Daniel W. Jackson

22

10/23/2014 3:02:16 PM

Chris Daniel - District Clerk Harris County

Envelope No. 2935065

By: SHELLEY BOONE

Filed: 10/23/2014 3:02:16 PM

NO. 2011-18770

JOAN DEYOUNG, STEPHEN DEYOUNG, M.D., §

AND DAVID DEYOUNG, §

§ IN THE DISTRICT COURT OF

Plaintiffs, §

v. §

§ HARRIS COUNTY, TEXAS

JUDY PAGE MAYNARD, WILLIAM L.

§

MAYNARD, MAYNARD PROPERTIES, L.P.,

§

AND BEIRNE, MAYNARD & PARSONS,

§

L.L.P., 270TH JUDICIAL DISTRICT

§

Defendants. §

DEFENDANTS' MOTIONS FOR NO EVIDENCE

AND TRADITIONAL SUMMARY JUDGMENT

COME NOW, Defendants Judy Paige Maynard, 1 William L. Maynard and

Maynard Properties, L.P., 2 and file this their Motions for No Evidence Summary

Judgment and Traditional Summary Judgment. In support thereof, Defendants

would show unto the Court the following:

I. FACTUAL SUMMARY

Plaintiffs' suit is based on the allegation that Defendants breached duties

owed to a family partnership, Russell, Page & Partners, of which Plaintiffs held a

total interest of 10.788%. To summarize, Plaintiffs have alleged that Defendants

wrongfully transferred land tracts to themselves without paying a fair price for the

land and without notifying Plaintiffs. Plaintiffs cannot present credible evidence to

support their claims. Indeed, the summary judgment evidence as set forth in this

1 Defendant Judy Paige Maynard died in 2013. Accordingly, she is now appearing by and

through her husband, Defendant William L. Maynard.

2Defendant Beirne, Maynard & Parsons, L.L.P.'s motion for summary judgment was granted

by Order of this Court on September 26, 2012. Ex. 1, attached hereto. Thus, Beirne

Maynard is no longer a party to this case.

1 I Appendix 1

I

motion clearly establishes that Plaintiffs knew or, at a minimum, should have known

of the transfers of real estate from the partnership to Defendants at or near the time

they occurred, which was many years before Plaintiffs filed this suit on March 28,

2011.

II. NO EVIDENCE SUMMARY JUDGMENT STANDARD

A court may grant a no evidence motion for summary judgment if the movant can

show that adequate time for discovery has passed and the non-movant has no evidence to

support one or more essential elements of its claim or defense. Tex. R. Civ. P. 166a(i).

Defendants contend that a "no-evidence" motion for summary judgment should be

granted pursuant to Texas Rule of Civil Procedure 166a (i). Under the no-evidence

summary judgment standard, "the party with the burden of proof at trial will have the

same burden of proof in a summary judgment proceeding." Galveston Newspapers, Inc.

v. Norris, 981 S. W.2d 797,799 (Tex. App.-Houston [1st Dist.] 1998, pet. denied), citing

Esco Oil & Gas, Inc. v. Sooner Pipe & Supply Cmp., 962 S.W.2d 193,197 n. 3 (Tex.

App.-Houston [1st Dist.] 1997, pet. denied) (commenting that under Rule 166a(i), "the

plaintiff as the non-movant [has] the burden to raise a triable issue on each element

essential to the plaintiffs case against each defendant"). Here, Plaintiffs' claims against

Defendants for breach of fiduciary duty, breach of contract, and conversion must fail

because there is no evidence that Defendants were in any way engaged in the wrongful

conduct that was detrimental to Plaintiffs.

III. ADEQUATE TIME FOR DISCOVERY

Under Rule 166a(i), a no evidence motion for summary judgment is proper if,

after an adequate time for discovery, there is a complete absence of evidence of one or

2

more essential element of a claim or defense on which an adverse party has the burden of

proof at trial. In this case, Plaintiffs have had an adequate time to conduct discovery. This

case has been pending for more than three (3) years. Discovery is substantially complete.

The parties have exchanged extensive written discovery, inspected relevant documents,

and designated expert witnesses. This case is set for trial on December 1, 2014. Plaintiffs

have had more than ample opportunity to gather the evidence necessary to support its

allegations against the Defendants.

IV. NO EVIDENCE SUMMARY JUDGMENT GROUNDS

After adequate time for discovery, Plaintiffs can produce no evidence to support a

cause of action for breach of fiduciary duty, breach of contract, and conversion

against Defendants. Accordingly, pursuant to Rule 166a(i) of the Texas Rules of Civil

Procedure, Defendants seek summary judgment on the ground that Plaintiff has failed to

adduce any evidence to support one or more essential elements of its claims.

V. ARGUMENTS AND AUTHORITIES

Defendants contend that entry of a no evidence summary judgment is proper

based on the following:

There is No Evidence that Defendants Judy Page Maynard, William L.

Maynard or Maynard Properties, L.P. Engaged in any Conduct Harmful to

Plaintiffs or to Their own Benefit.

Plaintiff cannot show any evidence that Defendants wrongfully engaged in any

transactions that injured Plaintiffs or that Defendants received any personal benefit as a

result of transactions related to the sale of partnership property. Proving these claims are

obviously essential to Plaintiffs' assertions. There are no depositions, answers to

interrogatories, admissions on file, or any other admissible evidence to support the

3

Plaintiffs' claims. In the absence of such evidence, Plaintiffs cannot establish any

evidence sufficient to sustain their case against Defendants. Thus, Defendant's motion

for summary judgment should be granted.

VI. DEFENDANTS' TRADITIONAL MOTION FOR SUMMARY JUDGMENT

Plaintiffs' claims are barred by the statute of limitations. Tex. Civ. Prac. &

Rem. Code §16.004(a)(S). While Plaintiffs' petition admits that Maurice Page

decided in 1994 to retire as Trustee for the partnership and appoint Defendant Judy

Page Maynard as her successor to handle the partnership's business affairs, they do

not contend they were unaware of Ms. Page's transfer to Defendant Judy Page

Maynard. Plaintiffs' Second Amended Petition, ~~ 19-20. In fact, notice of the

transfer was provided to each of the partners, including the Plaintiffs, in the spring

of 1994. Ex. 2, attached hereto and incorporated herein. Moreover, Plaintiffs have

judicially admitted that they knew the value of the partnerships assets were

declining from 1968-1970. Plaintiffs' Second Amended Petition, ~15. Partnership

tax returns mailed to all partners, including Plaintiffs and, as result, they were also

informed that value of the partnership continued to be reduced as a result of sales of

property owned by the partnership. Ex. 3, attached hereto and incorporated herein.

Because the property owned by the partnership did not generate any revenue,

property had to be sold to generate cash for ad valorem taxes and clean-up

expenses. 3 In addition, much of the property did not have clear title and were

encumbered with right-of-way easements. Thus, the appraised valued of the

3 Much of the property owned by the partnership, which was all located in Liberty County,

Texas, was used as a land dump and had incurred damage as a result of oil spills. Needless

to say, clean-up has been expensive.

4

property was not anywhere near $2,500,000, as alleged by Plaintiffs, but was at or

near the prices paid by Defendant William Maynard for the property. See Ex. 4,

attached hereto and incorporated herein.

VII.

As established by the evidence, Plaintiffs were aware of the partnership's

distressed financial condition. Ex. 3. In the spring of 2000, Defendant William

Maynard directly notified Plaintiffs ofthe impending close-out of the partnership as

a result of its dire financial condition and offered to purchase their interests. 4

Moreover, he again offered to purchase each of their remaining interests in the

partnership for $2,127.00. Ex. 5, attached hereto and incorporated herein. Plaintiffs

did not respond to the correspondence in any fashion. If Plaintiffs had merely called

Defendants or checked the public deed records of Liberty County, Texas they would

have known that sales from the partnership to Defendant William L. Maynard had

occurred as early as 1991, when under control of the predecessor Trustee Maurice

R. Page, and continued thereafter in 1994, 1996, and 2010, when Defendant Judy

Page Maynard had become Trustee. See Exs. 1, 4, 5, 7, & 8 attached to Plaintiffs'

Second Amended Petition and incorporated herein by reference.

VIII. ARGUMENT AND AUTHORITIES

Plaintiffs filed this suit on March 28, 2011, over ten (10) years after

Defendant William L. Maynard's first letter advising Plaintiffs of the partnership

Trustee's decision to "close out" the partnership and over fifteen years after Trustee

4It cannot be disputed that Plaintiffs received the letters from Mr. Maynard. In addition to

his affidavit confirming that they were mailed, the documents contain "De Young" bates

numbers indicating that they came from their files.

5

Maurice Page advised Plaintiffs of her appointment of Defendant Judy Page Maynard

as her successor and her instructions to "direct any further inquiries ... to Judy

Maynard .... " Ex. 2, attached hereto. This notice, when combined with tax returns

and other communications related to the dire financial condition of the partnership,

clearly give rise to the conclusion that Plaintiffs knew, or should have known, that

the partnership was being liquidated and would be closed down.

Statutes of limitation "operate to prevent the litigation of stale claims; they

'afford plaintiffs what the legislature deems a reasonable time to present their

claims and protect defendants and the courts from having to deal with cases in

which the search of truth may be seriously impaired by the loss of evidence,

whether by death ... or otherwise." Kerlin v. Sauceda, 263 S.W.3d 920, 925 (Tex.

2008). Not only do limitations "preclude claimants from sleeping on their rights,"

they provide both stability and security in personal affairs. Little v. Smith, 943

S.W.2d 414,418 (Tex. 1997). The objective of statutes of limitations is to compel the

assertion of claims within a reasonable period of time, while the evidence is fresh in

the minds of the parties and witnesses. Computer Assoc. Inn Inc. v. Altai, Inc., 918

S.W.2d 453, 455 (Tex 1996).

Limitations generally begin to run when facts come into existence which

authorize a claimant to seek judicial remedy. Apex Towing Co. v. Tolin 41 S.W.3d

118, 120 (Tex. 2001); see also, Bayou Bend Towers Council of Co-Owners, 866 S.W.2d

740,743-44 (Tex. App.-Houston [14th Dist.] 1993, writ denied). A party need only

be aware of enough facts to be apprised of the right to seek a judicial remedy.

Robinson v. Weaver, 550 S.W.2d 18, 19 (Tex.1977).

6

The discovery rule operates to toll the limitations period until a plaintiff

discovers or, through the exercise of reasonable care and diligence, should have

discovered the nature of his loss. Moreno v. Sterling Drug, Inc., 787 S.W.2d 348,351

(Tex. 1990). Limitations begin to run- even against a person to whom a fiduciary

duty is owed - when such person "learns of facts or circumstances that would lead a

reasonably prudent person to inquire and therefore discover the concealed cause of

action." Wright v. Greenberg, 2 S.W.3d 666, 675 (Tex. App.-Houston [14th Dist.]

1999, pet. denied). It is this knowledge that triggers the period of time within which

the plaintiff must investigate and determine whether to file suit. Bell v. Showa Denko

KK, 899 S.W.2d 7 49, 754 (Tex. App.-Amarillo 1995, writ denied); Arabian Shield

Dev. Co. v. Hunt, 808 S.W.2d 577,583 (Tex. App.-Dallas 1991, writ denied). The

discovery rule measures "what the [claimant] should have known based on a

reasonable person standard- an objective standard." Trousdale v. Henry, 261

S.W.3d 221, 234-37 (Tex. App.-Houston [14th Dist.] 2008, pet. denied). While a

fiduciary relationship is one of many circumstances to be considered in determining

whether a breach of duty might have been discovered as a result of reasonable

diligence, it does not change the rule that diligence in discovering the breach of

fiduciary duty is required. Courseview, Inc. v. Phillips Petroleum Co., 312 S.W.2d 197,

205 (Tex. 1957).

The summary judgment evidence in this case clearly establishes that

Defendants did not attempt to conceal anything from Plaintiffs. Indeed, Plaintiffs

were aware that Plaintiff Judy Page Maynard had become Trustee in 1994. Tax

returns were mailed annually to Plaintiffs that revealed the declining value of the

7

partnership's value. Correspondence was sent to Plaintiffs and other family-

member partners that clearly related to the monetary issues faced by the

partnership and its Trustee. Defendant Judy Page Maynard. Exs. 5 & 6, attached

hereto and incorporated herein. With all of this knowledge, Plaintiffs did nothing,

including simply calling Defendants, to inquire about the status of events. Given that

Defendants fully responded to inquiries from other family-member partners, it

should be clear that Defendants would not have withheld any information. Ex. 6,

attached hereto. This is true particularly given the fact that the land sales to Mr.

Maynard were made a matter of public record that anyone could access. Summary

judgment in favor of the Defendants, therefore, is appropriate.

WHEREFORE, PREMISES CONSIDERED, Defendants Judy Page Maynard,

William L. Maynard, and Maynard Properties, L.P. respectfully request that the Court

GRANT this Motion for No Evidence Summary Judgment and sign an order for final

summary judgment and/or such other relief to which Defendants may be justly entitled.

Respectfully submitted,

LAW OFFICE OF GREGORY N. JONES

By: Gregory N. ones

Gregory N. Jones

State Bar No. 10889450

2323 S. Shepherd, 14th Floor

Houston, Texas 77019

(713) 979-4691 (telephone)

(713) 979-4440 (facsimile)

ATTORNEY FOR DEFENDANTS

8

CERTIFICATE OF SERVICE

I certify that a copy of the foregoing document has been served on all counsel of

record via electronic mail on October 23, 2014:

Daniel W. Jackson, SBN 00796817 William L. Maynard

Scott K. Vastine, SBN 24056469 1300 Post Oak Blvd, Suite 2500

3900 Essex Lane, Suite 1116 Houston, Texas 77056

Houston, Texas 77027 Fax: (713) 960-1527

(713) 522-4435

(713) 527-8850- fax

daniel@jacksonlaw-tx.com

scott@jacksonlaw-tx.com

By: Gregory N. Tones

Gregory N. Jones

9

.

\

RE~ORDER'S MEMORANDUM \ 219/2015 1:22:12 PM

ThiS Instrument is or poor qualrly Chris Daniel - District Clerk Harris County

at the time or rmagrng Envelope No. 4073073

By: SHELLEY BOONE

Filed: 219/20151:22:12 PM

NO. 2011-18770

§

JOAN DEYOUNG, STEPHEN DEYOUNG,

§

M.D., AND DAVID DEYOUNG,

v.

Plaintiffs,

JUDY PAGE MAYNARD, WILLIAM L.

§

§

~

. *

IN THE DISTRICT COURT OF

HARRISCO+

MAYNARD, MAYNARD PROPERTIES, L.P.,

AND BEIRNE, MAYNARD & PARSONS, § ~

L.L.P., §

§

T~~«:J

270TH JUD~.IU.I DISTRICT

Defendants.

§ ~

\

Appendix 2

;

Submitted by:

LAW OFFICE OF GREGORY N. JONES

By: Is/ Gregory N. Jones

TSB 10889450

2323 S. Shepherd, 1~~1oor

Houston, TX 7701~~

Tele. (113) 97~

. Fax (713) 979 '

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Rule 166a. Summary Judgment, TX R RCP Rule 166a

 

  

   

   

   !" #

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(a) For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment

may, at any time after the adverse party has appeared or answered, move with or without supporting affidavits for a summary

judgment in his favor upon all or any part thereof. A summary judgment, interlocutory in character, may be rendered on the

issue of liability alone although there is a genuine issue as to amount of damages.

(b) For Defending Party. A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment

is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any

part thereof.

(c) Motion and Proceedings Thereon. The motion for summary judgment shall state the specific grounds therefor. Except

on leave of court, with notice to opposing counsel, the motion and any supporting affidavits shall be filed and served at least

twenty-one days before the time specified for hearing. Except on leave of court, the adverse party, not later than seven days

prior to the day of hearing may file and serve opposing affidavits or other written response. No oral testimony shall be received

at the hearing. The judgment sought shall be rendered forthwith if (i) the deposition transcripts, interrogatory answers, and other

discovery responses referenced or set forth in the motion or response, and (ii) the pleadings, admissions, affidavits, stipulations

of the parties, and authenticated or certified public records, if any, on file at the time of the hearing, or filed thereafter and

before judgment with permission of the court, show that, except as to the amount of damages, there is no genuine issue as to any

material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or in an

answer or any other response. Issues not expressly presented to the trial court by written motion, answer or other response shall

not be considered on appeal as grounds for reversal. A summary judgment may be based on uncontroverted testimonial evidence

of an interested witness, or of an expert witness as to subject matter concerning which the trier of fact must be guided solely by

the opinion testimony of experts, if the evidence is clear, positive and direct, otherwise credible and free from contradictions

and inconsistencies, and could have been readily controverted.

(d) Appendices, References and Other Use of Discovery Not Otherwise on File. Discovery products not on file with the

clerk may be used as summary judgment evidence if copies of the material, appendices containing the evidence, or a notice

containing specific references to the discovery or specific references to other instruments, are filed and served on all parties

together with a statement of intent to use the specified discovery as summary judgment proofs: (i) at least twenty-one days

before the hearing if such proofs are to be used to support the summary judgment; or (ii) at least seven days before the hearing

if such proofs are to be used to oppose the summary judgment.

(e) Case not Fully Adjudicated on Motion. If summary judgment is not rendered upon the whole case or for all the relief

asked and a trial is necessary, the judge may at the hearing examine the pleadings and the evidence on file, interrogate counsel,

Appendix 3

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Rule 166a. Summary Judgment, TX R RCP Rule 166a

ascertain what material fact issues exist and make an order specifying the facts that are established as a matter of law, and

directing such further proceedings in the action as are just.

(f) Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall be made on personal knowledge, shall

set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the

matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto

or served therewith. The court may permit affidavits to be supplemented or opposed by depositions or by further affidavits.

Defects in the form of affidavits or attachments will not be grounds for reversal unless specifically pointed out by objection by

an opposing party with opportunity, but refusal, to amend.

(g) When Affidavits Are Unavailable. Should it appear from the affidavits of a party opposing the motion that he cannot for

reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment

or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make

such other order as is just.

(h) Affidavits Made in Bad Faith. Should it appear to the satisfaction of the court at any time that any of the affidavits

presented pursuant to this rule are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the

party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused

him to incur, including reasonable attorney's fees, and any offending party or attorney may be adjudged guilty of contempt.

(i) No-Evidence Motion. After adequate time for discovery, a party without presenting summary judgment evidence may move

for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which

an adverse party would have the burden of proof at trial. The motion must state the elements as to which there is no evidence. The

court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact.

Credits

Oct. 12, 1949, eff. March 1, 1950. Amended by orders of Oct. 1, 1951, eff. March 1, 1952; July 20, 1966, eff. Jan. 1, 1967; July

21, 1970, eff. Jan. 1, 1971; July 11, 1977, eff. Jan. 1, 1978; June 10, 1980, eff. Jan. 1, 1981; Dec. 5, 1983, eff. April 1, 1984;

July 15, 1987, eff. Jan. 1, 1988; April 24, 1990, eff. Sept. 1, 1990; Aug. 15, 1997, eff. Sept. 1, 1997.

Notes of Decisions (8176)

Vernon's Ann. Texas Rules Civ. Proc., Rule 166a, TX R RCP Rule 166a

Current with amendments received through 6/1/2015

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Chessher v. Southwestern Bell Telephone Co., 658 S.W.2d 563 (1983)

215 Cases that cite this headnote







[2] Judgment

  !""#! Partial Summary Judgment

$ Plaintiff, who sought to recover damages against

%&

 '()) defendant telephone utility for alleged breach of

)%'%*+',! ## employment contract, wrongful discharge, fraud,

and misrepresentation, did not waive his tort

' - . / %0 !12 claims by failing to raise them in his response to

/ 3"#45#"'$ 2!12 defendant's motion for summary judgment based

on the statute of frauds, and since the defendant

Suit was instituted against telephone utility to recover

moved for summary judgment on only one of

damages for alleged breach of employment contract,

the plaintiff's four causes of action, summary

wrongful discharge, fraud, and misrepresentation. The 189th

judgment rendered in favor of defendant on basis

District Court, Harris County, Hughes, J., rendered summary

of the statute of frauds was improper insofar as it

judgment in favor of defendant, and plaintiff appealed. The

disposed of all four of the causes. V.T.C.A., Bus.

Houston Court of Civil Appeals, Fourteenth Supreme Judicial

& C. § 26.01(b)(6); Vernon's Ann.Texas Rules

District Court, Murphy, J., affirmed in an unpublished

Civ.Proc., Rule 452.

opinion and plaintiff brought error. The Supreme Court held

that plaintiff did not waive his tort claims by failing to raise 175 Cases that cite this headnote

them in his response to defendant's motion for summary

judgment based on the statute of frauds, and since the

defendant moved for summary judgment on only one of the

plaintiff's four causes of action, summary judgment rendered Attorneys and Law Firms

in favor of defendant was improper insofar as it disposed of

all four of the causes. *564 Wheat & Rickard, Robert W. Rickard, Houston, for

petitioner.

Reversed and remanded.

Fulbright & Jaworski, Roger Townsend, Houston, for

respondent.

West Headnotes (2) Opinion

PER CURIAM.

[1] Judgment

Actions in Which Summary Judgment Is Paul G. Chessher instituted this suit against Southwestern

Authorized Bell Telephone Company seeking damages for breach

of employment contract, wrongful discharge, fraud, and

Judgment

misrepresentation. Summary judgment was rendered in favor

Weight and Sufficiency

of Southwestern Bell on the basis of the Statute of Frauds,

A movant may not be granted judgment as a Tex.Bus. & Comm.Code Ann. art. 26.01(b)(6) (1977), and

matter of law on a cause of action not addressed the court of appeals affirmed in an unpublished opinion.

in a summary judgment proceeding; rather, he Tex.R.Civ.P. 452. We reverse the judgments of the courts

must establish his entitlement to a summary below and remand the cause to the trial court.

judgment on issues expressly presented to trial

court by conclusively proving all essential The record discloses that the sole ground upon which

elements of his cause of action or defense as a Southwestern Bell sought summary judgment was the Statute

matter of law. of Frauds; no defense was raised as to the tort allegations

set forth in Chessher's petition. The trial court's judgment,

Appendix 4

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Chessher v. Southwestern Bell Telephone Co., 658 S.W.2d 563 (1983)

[2] Because Southwestern Bell moved for summary

however, disposed of all four of Chessher's causes of action.

judgment on only one of Chessher's four causes of action, the

The court of appeals concluded that Chessher had waived

court of appeals' affirmation of this judgment was improper

his tort claims by failing to raise them in his response to

as to the other causes of action alleged by Chessher. Griffin

the motion for summary judgment. In so holding, the court

v. Rowden, 654 S.W.2d 435 (Tex.1983); Puga v. Donna Fruit

committed reversible error.

Co., Inc., 634 S.W.2d 677 (Tex.1982); Missouri-Kan.-Tex.

R.R. Co. v. City of Dallas, 623 S.W.2d 296 (Tex.1981).

[1] It is axiomatic that one may not be granted judgment

as a matter of law on a cause of action not addressed in a

Pursuant to Tex.R.Civ.P. 483, the application for writ of error

summary judgment proceeding. In City of Houston v. Clear

is granted, and without hearing oral argument, the judgments

Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979), we

of the courts below are reversed and the cause is remanded

wrote, “The movant ... must establish his entitlement to a

to the trial court.

summary judgment on the issues expressly presented to the

trial court by conclusively proving all essential elements of

his cause of action or defense as a matter of law.” (emphasis

All Citations

added).

658 S.W.2d 563

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Farm Bureau County Mutual Insurance Company v. Rogers, 455 S.W.3d 161 (2015)

58 Tex. Sup. Ct. J. 270

was not expressly granted herein was denied,

where order did not resolve parties' competing

 



requests for attorney fees.



2 Cases that cite this headnote



!"#$%%#

& [2] Appeal and Error

%% '(#' Finality as to All Parties

Appeal and Error

)*+,-./ 0 *$!)!*) Determination of Controversy

123!42'2156

,#-, The language of an order or judgment can make

it final for appellate purposes, even though it

Synopsis

should have been interlocutory, if that language

Background: Automobile insurer brought declaratory-

expressly disposes of all claims and all parties.

judgment action against insured, seeking declaration that

it was not obligated to defend or indemnify insured and 2 Cases that cite this headnote

seeking award of court costs and attorney fees under Uniform

Declaratory Judgments Act (UDJA). Insured sought recovery

of court costs and attorney fees under Texas Deceptive Trade [3] Appeal and Error

Practices Act (DTPA). The County Court at Law, Lamar Nature and Scope of Decision

County, William H. Harris, J., denied insurer's motion for If a trial court's intent to enter a final judgment

summary judgment. Insurer appealed. The Texarkana Court is clear from the order, then the order is final

of Appeals, 2014 WL 786455, dismissed appeal. Insurer filed and appealable, even though the record does

petition for review. not provide an adequate basis for rendition

of judgment; in that case, the judgment is

erroneous, but final.

[Holding:] The Supreme Court held that order denying 2 Cases that cite this headnote

motion for summary judgment did not constitute final,

appealable order.

[4] Appeal and Error

Determination of Controversy

Judgment of Court of Appeals affirmed. In determining whether an order denying a

motion for summary is final for appellate

purposes, there must be evidence in the record

West Headnotes (4) to prove the trial court's intent to dispose of any

remaining issues when it includes in the order

a Mother Hubbard clause, which essentially

[1] Declaratory Judgment provides that all relief not granted is denied,

Appeal and Error given that Mother Hubbard clauses do not,

Trial court's order denying automobile insurer's on their face, implicitly dispose of claims not

motion for summary judgment did not dispose of expressly mentioned in the order, including

all parties and claims and thus did not constitute claims for attorney fees.

final, appealable order in insurer's declaratory-

1 Cases that cite this headnote

judgment action regarding insurance coverage,

although order decreed that insurer was required

to defend and indemnify insured, provided that

all court costs were taxed against party incurring

same, and contained Mother Hubbard clause ON PETITION FOR REVIEW FROM THE COURT OF

providing that any and all relief sought which APPEALS FOR THE SIXTH DISTRICT OF TEXAS

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Farm Bureau County Mutual Insurance Company v. Rogers, 455 S.W.3d 161 (2015)

58 Tex. Sup. Ct. J. 270

Farm Bureau later moved for summary judgment. Rogers

Attorneys and Law Firms opposed the motion but did not file a cross-motion seeking

summary judgment in her favor. After a hearing on Farm

Gregory R. Ave, Walters, Balido & Crain, L.L.P., Dallas TX,

Bureau's motion, the trial court entered an “Order Denying

for Petitioner.

Plaintiff Farm Bureau['s] ... Motion for Summary Judgment.”

George L. Preston, George L. Preston & Associates, Paris, The order decreed that (1) Farm Bureau “has a duty to defend

TX, for Respondent. [Rogers] in or as to” the Dominguez suit; (2) Farm Bureau

“has a duty to indemnify [Rogers] in or as to” the Dominguez

Opinion suit; (3) “[a]ll court costs are taxed against the party incurring

same”; and (4) “[a]ny and all relief sought in this cause which

PER CURIAM is not expressly granted herein is DENIED.” The order did

not expressly address the parties' claims for attorney's fees.

This case presents the familiar issue of whether a trial court's

order, issued without a full trial and containing a Mother

The court of appeals dismissed Farm Bureau's appeal for want

*162 Hubbard clause, is final for purposes of appeal. In this

of jurisdiction, holding that an order denying a motion for

declaratory judgment action involving insurance coverage,

summary judgment cannot be final and appealable unless the

the court of appeals held that the trial court's order denying the

opposing party filed a cross-motion for summary judgment.

insurer's motion for summary judgment is not final because

Farm Bureau petitioned for this Court's review. Relying on

the insured did not file a cross-motion for summary judgment.

our decision in Lehmann v. Har–Con Corp., 39 S.W.3d 191

We agree that the order is not final, but for a different reason:

(Tex. 2001), Farm Bureau argues that the trial court's order

it did not resolve the parties' competing requests for attorney's

is a final and appealable judgment because it disposed of all

fees. We therefore affirm the court of appeals' dismissal of

parties and claims, even though Rogers did not file a cross-

this appeal.

motion for summary judgment seeking that relief. Rogers

responds by arguing that the order is not a final judgment

Farm Bureau County Mutual Insurance Company filed

because it did not dispose of the parties' competing claims

this declaratory judgment action against its insured, Cristil

for attorney's fees. In reply, Farm Bureau argues that Rogers'

Rogers, seeking a declaration that it had no duty to defend

request for attorney's fees under the DTPA was defective

or indemnify her in an underlying tort action (the Dominguez

and the trial court implicitly denied both parties' requests for

suit) 1 and requesting an award of court costs and attorney's

attorney's fees by expressly taxing court costs to each party

fees under the Uniform Declaratory Judgments Act (UDJA).

and denying “[a]ny and all relief ... which is not expressly

See TEX. CIV. PRAC. & REM. CODE § 37.009 (authorizing

granted herein.” 2

courts in a declaratory judgment action to award “costs and

reasonable and necessary attorney's fees as are equitable and

just”). Rogers answered the suit and prayed for recovery of 2 We need not consider Farm Bureau's argument that

her court costs and attorney's fees under the Texas Deceptive Rogers' claim for attorney's fees is defective because,

Trade Practices Act (DTPA), even though she asserted no even if it is, Farm Bureau's own claim for attorney's

claims for relief under the DTPA. fees remains pending. See Barshop v. Medina Cnty.

Underground Water Conserv. Dist., 925 S.W.2d 618,

637–38 (Tex. 1996) (holding that failure to “substantially

1 The plaintiffs in the Dominguez suit sought damages prevail[ ]” on a declaratory judgment claim does not

for injuries they sustained when they were thrown from preclude recovery of attorney's fees under the UDJA).

their horses while riding along FM 906 in Lamar County,

Texas. Their petition alleged that, as Rogers drove past

[1] [2] [3] *163 We agree with Farm Bureau that the

them in a pickup truck, a dog leaped from the bed of fact that Rogers did not file a cross-motion for summary

the truck and charged at the horses, causing them to judgment did not preclude the trial court from entering a

buck and throw the plaintiffs. The plaintiffs alleged that “final” judgment. As we explained in Lehmann, “the language

Rogers proximately caused their injuries by negligently of an order or judgment can make it final, even though it

failing to secure her dog. Rogers sought coverage of should have been interlocutory, if that language expressly

these claims under her automobile insurance policy with disposes of all claims and all parties.” Lehmann, 39 S.W.3d

Farm Bureau. at 200. If the trial court's intent to enter a final judgment is

“clear from the order, then the order is final and appealable,

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Farm Bureau County Mutual Insurance Company v. Rogers, 455 S.W.3d 161 (2015)

58 Tex. Sup. Ct. J. 270

even though the record does not provide an adequate basis the judgment final.” Id. Consistent with our statement in

for rendition of judgment.” Id. In that case, “the judgment is Lehmann, we held that the resolution of a claim for court costs

final—erroneous, but final.” Id. But we agree with Rogers did not dispose of a claim for attorney's fees and did not serve

that the order at issue here did not dispose of all parties and *164 as an indicium of finality. See id.; Lehmann, 39 S.W.3d

claims, because neither the language taxing court costs nor at 205.

the Mother Hubbard clause disposed of the parties' claims for

attorney's fees. [4] This case is slightly different from McNally because,

although Farm Bureau failed to expressly request attorney's

In Lehmann, we held that “a judgment issued without a fees in its motion for summary judgment, it argues that the

conventional trial is final for purposes of appeal if and only Mother Hubbard clause, not just the disposition of court costs,

if either [1] it actually disposes of all claims and parties effectively denied the claim for attorney's fees. However,

then before the court, regardless of its language, or [2] it the reasoning of Lehmann and McNally control our decision

states with unmistakable clarity that it is a final judgment as here. Interpreting Mother Hubbard clauses in the manner

to all claims and all parties.” Lehmann, 39 S.W.3d at 192– Farm Bureau urges would necessarily run afoul of Lehmann

93. We explained that “[a]n order does not dispose of all because it would allow such clauses to serve as indicia

claims and all parties merely because it is entitled ‘final’, or of finality for purposes of appeal—the very function we

because the word ‘final’ appears elsewhere in the order, or prohibited in Lehmann. Thus, Mother Hubbard clauses do

even because it awards costs.” Id. at 205 (emphasis added). not, on their face, implicitly dispose of claims not expressly

“Rather, there must be some other clear indication that the mentioned in the order, including claims for attorney's fees.

trial court intended the order to completely dispose of the Instead, there must be evidence in the record to prove the

entire case.” Id. Attempting to resolve decades of confusion, trial court's intent to dispose of any remaining issues when

we held that “the inclusion of a Mother Hubbard clause— it includes a Mother Hubbard clause in an order denying

by which we mean the statement, ‘all relief not granted is summary judgment. See Lehmann, 39 S.W.3d at 205–06;

denied’, or essentially those words—does not indicate that McNally, 52 S.W.3d at 196. To hold otherwise would simply

a judgment rendered without a conventional trial is final for resurrect the issues we put to rest in Lehmann and McNally,

purposes of appeal.” Id. at 203–04. Mother Hubbard clauses albeit in a slightly different form.

are problematic because they are open to interpretation. Id.

at 204. Sometimes a Mother Hubbard clause “mean[s] only Like the movant in McNally, Farm Bureau failed to request an

that the relief requested in the motion—not all the relief award of attorney's fees in its motion for summary judgment

requested by anyone in the case—and not granted by the order or to attach evidence supporting its claim for fees. Thus,

is denied,” and sometimes it “may also have no intended as in McNally, there is no reason to presume that the trial

meaning at all, having been inserted for no other reason than court considered the issue when ruling on Farm Bureau's

that it appears in a form book or resides on a word processor.” motion. The order's language taxing court costs is of no

Id. We thus rejected the notion that a Mother Hubbard clause import because our decision in McNally established that such

gives “any indicia of finality in any order not issued after a language does not, alone, evince a trial court's intent to

conventional trial.” Id. dispose of attorney's fees. And most importantly, the parties

presented no evidence from the record suggesting that the trial

After Lehmann, we confirmed that the disposition of a claim court intended the Mother Hubbard clause to deny attorney's

for court costs does not dispose of a claim for attorney's fees to either party. 3 In the absence of evidence of the trial

fees, even when doing so would also dispose of all parties court's intent with respect to the parties' claims for attorney's

and claims. See McNally v. Guevara, 52 S.W.3d 195, 196 fees, we find that the trial court's order did not dispose of all

(Tex. 2001). In McNally, the defendants filed a motion for parties and claims.

summary judgment but failed to request summary judgment

on their counterclaim for attorney's fees. Although the trial 3 As noted above, Farm Bureau did not need to

court's order granted the motion and taxed court costs against

“substantially prevail[ ]” in a suit under the UDJA to

the plaintiff, we concluded that “[n]othing in the trial court's

receive attorney's fees. See Barshop, 925 S.W.2d at 637–

judgment, other than its award of costs to the defendants, 38. Thus, the trial court did not dispose of the issue

suggests that it intended to deny the defendants' claim for simply by ruling against Farm Bureau with respect to its

attorney fees. The award of costs, by itself, does not make duty to defend and indemnify Rogers.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Farm Bureau County Mutual Insurance Company v. Rogers, 455 S.W.3d 161 (2015)

58 Tex. Sup. Ct. J. 270

Accordingly, without hearing oral argument, we affirm the

All Citations

court of appeals' judgment dismissing the appeal for want of

jurisdiction. TEX. R. APP. P. 59.1. 455 S.W.3d 161, 58 Tex. Sup. Ct. J. 270

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162



  West Headnotes (14)



 !" #

$%%$&  [1] Libel and Slander

' Actionable words or conduct relating to

()")*)!! " +!" quality or value

#(#$# To prevail on a business disparagement claim,

a plaintiff must establish that (1) the defendant

" ,-,.. / )0#1# published false and disparaging information

2+,, / *3$*3 4+,, about it, (2) with malice, (3) without privilege,

(4) that resulted in special damages to the

Synopsis plaintiff.

Background: Related corporations brought business

disparagement claims, and company executives brought 41 Cases that cite this headnote

defamation and intentional infliction of emotional distress

claims, against magazine publisher, author of article

[2] Libel and Slander

appearing in magazine, and source for article. The 190th

Actionable words or conduct relating to

District Court, Harris County, John P. Devine, J., granted

quality or value

summary judgment for defendants, and plaintiffs appealed.

The Amarillo Court of Appeals, 958 S.W.2d 215, reversed The tort of business disparagement differs from

the summary judgment order insofar as it affected plaintiff defamation in that defamation actions chiefly

companies' business disparagement claims, but affirmed serve to protect the personal reputation of an

the remainder of the judgment. On remand, the District injured party, while a business disparagement

Court, John P. Devine, J., granted summary judgment claim protects economic interests.

for defendants on the business disparagement claims, and

32 Cases that cite this headnote

plaintiffs appealed. On overruling of rehearing, the Houston

Court of Appeals, Fourteenth District, Maurice Amidei,

Justice, sitting by assignment, 49 S.W.3d 610, reversed and [3] Libel and Slander

remanded. Review was granted. Criticism and comment on public matters

and publication of news

Public figures cannot recover for damaging

Holdings: The Supreme Court, O'Neill, J., held that: statements made about them absent proof of

actual malice.

[1] author's statements after article was printed and in

3 Cases that cite this headnote

distribution could not be evidence of actual malice at time of

publication, and

[4] Libel and Slander

[2] generic statements about organization of related Criticism and comment on public matters

businesses were not made with actual malice and were not and publication of news

business disparagement as to two corporate subsidiaries, even “Actual malice” that a public figure plaintiff

if untrue as to them. must show in a defamation action requires

proof that the defendant made a statement with

knowledge that it was false or with reckless

Reversed and rendered.

disregard of whether it was true or not.

9 Cases that cite this headnote

[5] Libel and Slander

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

Criticism and comment on public matters In reviewing a no-evidence summary judgment

and publication of news motion, the Supreme Court examines the record

To establish reckless disregard, a public-figure in the light most favorable to the non-movant; if

plaintiff must prove in a defamation suit that the the non-movant presents more than a scintilla of

defendant entertained serious doubts as to the evidence supporting the disputed issue, summary

truth of his publication or had a high degree of judgment is improper. Vernon's Ann.Texas

awareness of the probable falsity of the published Rules Civ.Proc., Rule 166a(i).

information; reckless disregard is a subjective

86 Cases that cite this headnote

standard focusing on the defendant's state of

mind, and mere negligence is not enough.

[10] Judgment

6 Cases that cite this headnote Weight and sufficiency

A no-evidence summary judgment is improper

[6] Libel and Slander if the respondent brings forth more than a

Criticism and comment on public matters scintilla of probative evidence to raise a genuine

and publication of news issue of material fact. Vernon's Ann.Texas Rules

Constitutional malice necessary for defamation Civ.Proc., Rule 166a(i).

action by public-figure plaintiff generally

105 Cases that cite this headnote

consists of calculated falsehood. U.S.C.A.

Const.Amend. 1.

[11] Judgment

Cases that cite this headnote Weight and sufficiency

Less than a scintilla of evidence exists in

[7] Libel and Slander opposition to no-evidence summary judgment

Criticism and comment on public matters motion when the evidence is so weak as to do

and publication of news no more than create a mere surmise or suspicion

When the defendant's words lend themselves of a fact; more than a scintilla of evidence exists

to more than one interpretation, a public-figure if it would allow reasonable and fair-minded

plaintiff must establish either that the defendant people to differ in their conclusions. Vernon's

knew that the words would convey a defamatory Ann.Texas Rules Civ.Proc., Rule 166a(i).

message or had reckless disregard for their effect.

134 Cases that cite this headnote

1 Cases that cite this headnote

[12] Libel and Slander

[8] Libel and Slander Defenses

Intent, malice, or good faith Statements by author after magazine article was

Actual malice must be proved by clear and printed and in distribution could not be evidence

convincing evidence at trial in defamation of actual malice at time of publication of article

action. allegedly resulting in business disparagement.

3 Cases that cite this headnote 7 Cases that cite this headnote

[9] Appeal and Error [13] Libel and Slander

Judgment Criticism and comment on public matters

and publication of news

Judgment

Weight and sufficiency The actual malice inquiry in a defamation

action by a public-figure plaintiff focuses on

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

the defendant's state of mind at the time of judgment because the plaintiffs produced no evidence that

publication. Forbes and Barrett acted with actual malice in publishing the

article that is the subject of this controversy. Accordingly, we

2 Cases that cite this headnote reverse the court of appeals' judgment and render judgment

for Forbes and Barrett.

[14] Libel and Slander

Defenses

Statements in magazine article about I

organization of related businesses were not

made with actual malice and were not business In its issue dated November 11, 1991, Forbes published an

disparagement as to two corporate subsidiaries, article entitled “The Incredible Shrinking Empire.” 1 The

even though the author stated that certain generic article, authored by Barrett, focused on the financial condition

references to the organization were not intended of the Granada Corp., a privately held company, and on

to apply to the subsidiaries; the author was its chairman, David Eller. Granada Corp. was the parent

charged with the task of producing a readable of a number of other private and public entities. While the

article about an extremely complicated network Granada organization consisted of dozens of entities, the

of business entities and was at most guilty of article only named two of the public entities, Granada Foods

using imprecise language, and while it would Corp. (GFC) and Granada Biosciences, Inc. (GBI). In general,

have been more accurate for the author to the Granada entities were engaged in developing and applying

identify the precise entities, the careless use of advanced technology in the area of agriculture, primarily

the generic term was no evidence of serious cattle production. The article noted that the Wall Street

doubts as to the truth or a high degree of Journal had described Granada Corp. as a “corporate star[ ]

awareness of falsity. of the future” in 1989, and that the organization, under Eller's

stewardship, had garnered much favorable publicity. But, the

5 Cases that cite this headnote article said, “there is less to Granada than meets the eye.

Actually, its total revenues, $1 billion as recently as 1988, will

scarcely be $200 million for 1991. Profits: zilch. Granada's

work force has shrunk to below 900 from 2,200; its cattle herd

Attorneys and Law Firms has dwindled to 25,000 from 1 million.” The article identified

GFC and GBI as the two publicly traded stock companies

*169 Peter D. Kennedy, David H. Donaldson Jr., George &

within the Granada organization, and said that they were “so

Donaldson, L.L.P., Austin, for petitioner.

broke they haven't been able to publish their 1990 annual

Michael D. Sydow, Ralph S. Carrigan, Sydow, Kormanik, reports.” It went on to say that “Granada is beset with a

Carrigan & Eckerson, L.L.P., Houston, for respondent. series of serious shareholder lawsuits,” including one filed by

“Fort Worth near-billionaire Edward Bass.” It is undisputed

Thomas S. Leatherbury, Vinson & Ekins, L.L.P., Dallas, for that, while a person with that name had sued one of the

amicus curiae. Granada entities, it was not the “Fort Worth near-billionaire.”

Furthermore, the article described a number of other signs of

serious financial trouble: “Possibly anticipating a bankruptcy

Justice O'NEILL delivered the opinion of the Court, in

filing, former Granada employees say officials in recent

which Chief Justice PHILLIPS, Justice HECHT, Justice

months have moved some farm equipment and vehicles off

OWEN, Justice JEFFERSON, Justice SMITH, Justice

Granada books and gotten rid of backup documentation.”

WAINWRIGHT, and Justice BRISTER joined.

Granada Biosciences, Inc. and Granada Foods Corporation 1 The article is attached as an Appendix to this opinion.

sued Forbes, Inc., publisher of Forbes magazine, and writer According to Barrett's affidavit, he used the term “Granada”

William P. Barrett for business disparagement. The trial court in a generic sense to describe the various entities controlled by

rendered summary judgment for Forbes and Barrett, and the Eller, and when he “intended to specifically address Granada

court of appeals reversed. 49 S.W.3d 610. We hold that the Biosciences, Inc. or Granada Food Corporation, [he] did so

court of appeals erred in reversing the trial court's summary

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

by *170 name.” The day the article was released, the shares similar in many respects to a defamation action. Id. The

of GBI and GFC dropped precipitously, and trading was two torts differ in that defamation actions chiefly serve to

permanently suspended in early 1992. protect the personal reputation of an injured party, while a

business disparagement claim protects economic interests. Id.

GBI, GFC, Eller, and his wife, Linda, sued Barrett, Forbes, In Hurlbut, a suit brought by an insurance agent against his

Inc., and Cheryl Munke, an employee of a former Granada former employer, we noted that a business disparagement

affiliate, for damages allegedly caused by the article's defendant may be held liable “only if he knew of the falsity

publication. Forbes and Barrett (collectively “Forbes”) filed or acted with reckless disregard concerning it, or if he acted

joint motions for summary judgment, which the trial with ill will or intended to interfere in the economic interest of

court granted. On appeal, the Seventh District court of the plaintiff in an unprivileged fashion.” Id. (emphasis added)

appeals, to which the case was transferred, reversed, holding (quoting RESTATEMENT (SECOND) OF TORTS § 623A,

that Forbes's summary judgment motion did not address cmt. g (1977)).

the plaintiffs' business disparagement claims. Granada

Biosciences, Inc. v. Barrett, 958 S.W.2d 215, 221 (Tex.App.- The court of appeals noted in this case that GBI and GFC

2

Amarillo 1997, pet. denied). On remand, Forbes filed did not dispute Forbes's contention that they were “public

a renewed and supplemental summary judgment motion figures for the purpose of discussing their respective financial

under Rule 166a(c) and(i), which specifically addressed the statuses,” a conclusion that GBI and GFC do not challenge

plaintiffs' business disparagement claims. The trial court here. 49 S.W.3d at 615 n. 2. The court then held that

again granted summary judgment in Forbes's favor, but the ill will or intent to interfere with the plaintiff's economic

Fourteenth District court of appeals reversed, concluding that interest will not suffice to establish malice in a business

several fact issues precluded summary judgment. The court disparagement claim brought by a public figure *171 against

determined that there were fact issues concerning whether a media defendant. Id. at 618. Instead, the court held that

the article as a whole and several specific passages in the the constitutional interests at stake—“the conflict between

article were false and disparaging. 49 S.W.3d at 621–22. constitutionally-protected free expression and a state's power

The court agreed with Forbes's contention that, to recover to award damages based on a defendant's statements”—

on their business disparagement claims, the plaintiffs were require proof of actual malice under the standard the United

required to satisfy the constitutional actual-malice standard States Supreme Court articulated in New York Times. Id. at

the United States Supreme Court established in New York 618. Accordingly, the court held that GFC and GBI must

Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d establish that Forbes published the article with knowledge

686 (1964), but held that a fact issue on Forbes's state of that it made false statements about them, or with reckless

mind at the time of publication precluded summary judgment. disregard as to the statements' truth. Id. In this Court, GBI

We hold that GBI and GFC presented no evidence of actual and GFC do not challenge the court of appeals' application of

malice under the New York Times standard, and thus reverse the constitutional malice standard. We thus assume without

the court of appeals' judgment. deciding that the New York Times actual-malice standard

applies in a public figure's business disparagement suit

2 The Amarillo court affirmed the summary judgment as against a media defendant. 3

to all claims against Munke, and she is no longer a party.

Granada Biosciences, Inc., 958 S.W.2d at 222. It also 3 We note, however, that the United States Supreme Court

affirmed the summary judgments as to the Ellers' claims. has applied the New York Times standard in contexts

Id. at 222–25. other than defamation, applying it to an intentional

infliction of emotional distress claim, Hustler Magazine

v. Falwell, 485 U.S. 46, 56, 108 S.Ct. 876, 99 L.Ed.2d

II 41 (1988), and to a product disparagement claim, Bose

Corp. v. Consumers Union of United States, Inc., 466

[1] [2] To prevail on a business disparagement claim, U.S. 485, 511–14, 104 S.Ct. 1949, 80 L.Ed.2d 502

a plaintiff must establish that (1) the defendant published (1984).

false and disparaging information about it, (2) with malice,

(3) without privilege, (4) that resulted in special damages to

the plaintiff. Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d III

762, 766 (Tex.1987). A business disparagement claim is

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

[3] The actual malice standard articulated in New York [8] Actual malice must be proved by clear and convincing

Times fortifies our Constitution's guarantees of free speech evidence at trial. Huckabee, 19 S.W.3d at 420. However, we

and a free press. New York Times, 376 U.S. at 254, 84 S.Ct. have declined to adopt the clear-and-convincing standard for

710. The relatively demanding standard honors our “profound summary judgment purposes, because its application would

national commitment to the principle that debate on public “suggest[ ] that the trial court must weigh the evidence.”

issues should be uninhibited, robust, and wide-open, and Id. at 421–22. Accordingly, Forbes was entitled to summary

that it may well include vehement, caustic, and sometimes judgment unless the record reveals a fact issue as to actual

unpleasantly sharp attacks” on public figures. New York malice.

Times, 376 U.S. at 270, 84 S.Ct. 710. The standard recognizes

that “erroneous statement is inevitable in free debate, and ...

it must be protected if the freedoms of expression are to have

IV

the ‘breathing space’ that they ‘need ... to survive.’ ” Id. at

271, 84 S.Ct. 710 (quoting N.A.A.C.P. v. Button, 371 U.S. [9] [10] [11] In its no-evidence summary judgment

415, 433, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963)). Thus, public motion, Forbes asserted that there was no evidence of actual

figures cannot recover for damaging statements made about malice to support the plaintiffs' claims. See TEX.R. CIV.

them absent proof of actual malice. New York Times, 376 U.S. P. 166a(i). In reviewing a no-evidence summary judgment

at 279–80, 84 S.Ct. 710; WFAA–TV, Inc. v. McLemore, 978 motion, we examine the record in the light most favorable

S.W.2d 568, 571 (Tex.1998). to the nonmovant; if the nonmovant presents more than a

scintilla of evidence supporting the disputed issue, summary

[4] [5] [6] [7] Actual malice, in this context, “is a termjudgment is improper. King Ranch v. Chapman, 118 S.W.3d

of art.” It is not ill will, spite, or evil motive. Huckabee v. 742, 750 (Tex.2003); Wal–Mart Stores, Inc. v. Rodriguez,

Time Warner, 19 S.W.3d 413, 420 (Tex.2000) (citing Casso 92 S.W.3d 502, 506 (Tex.2002). A no-evidence summary

v. Brand, 776 S.W.2d 551, 558 (Tex.1989)). Instead, “actual judgment is improper if the respondent brings forth more

malice” requires proof that the defendant made a statement “ than a scintilla of probative evidence to raise a genuine

‘with knowledge that it was false or with reckless disregard issue of material fact. TEX.R. CIV. P. 166a(i); Wal–Mart,

of whether it was true or not.’ ” Huckabee, 19 S.W.3d at 92 S.W.3d at 506. “Less than a scintilla of evidence exists

420 (quoting New York Times, 376 U.S. at 279–80, 84 S.Ct. when the evidence is ‘so weak as to do no more than create

710). To establish reckless disregard, a public-figure plaintiff a mere surmise or suspicion’ of a fact.” King Ranch, 118

must prove that the defendant “ ‘entertained serious doubts S.W.3d at 751 (quoting Kindred v. Con/Chem, Inc., 650

as to the truth of his publication.’ ” Huckabee, 19 S.W.3d S.W.2d 61, 63 (Tex.1983)). More than a scintilla of evidence

at 420 (quoting St. Amant v. Thompson, 390 U.S. 727, 731, exists if it would allow reasonable and fair-minded people to

88 S.Ct. 1323, 20 L.Ed.2d 262 (1968)). Reckless disregard differ in their conclusions. King Ranch, 118 S.W.3d. at 751

is a subjective standard, focusing on the defendant's state of (citing Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d

mind. Bentley v. Bunton, 94 S.W.3d 561, 591 (Tex.2002). 706, 711 (Tex.1997)). Thus, if GBI and GFC presented

Mere negligence is not enough. Id. Rather, the plaintiff must evidence creating more than a surmise or suspicion that

establish “ ‘that the defendant in fact entertained serious Forbes published the article with actual malice, summary

doubts as to the truth of his publication,’ ” or had a “ ‘high judgment is improper. The court of appeals concluded that

degree of awareness of ... [the] probable falsity’ ” of the fact issues about Forbes's state of mind at the time of

published information. Id. (quoting Harte–Hanks Comm., publication precluded summary judgment. 49 S.W.3d at 627.

Inc. v. Connaughton, 491 U.S. 657, 688, 109 S.Ct. 2678, 105 We disagree.

L.Ed.2d 562 (1989)). Constitutional malice generally consists

of “ ‘[c]alculated falsehood.’ ” Bunton, 94 S.W.3d at 591

(quoting *172 Garrison v. Louisiana, 379 U.S. 64, 75, 85

S.Ct. 209, 13 L.Ed.2d 125 (1964)). When the defendant's A

words lend themselves to more than one interpretation, the

[12] The court of appeals rested its decision, in large part, on

plaintiff must establish either that the defendant knew that the

evidence suggesting that Barrett misled Eller into believing

words would convey a defamatory message, or had reckless

that he would have an opportunity to review the article for

disregard for their effect. See Bunton, 94 S.W.3d at 603.

accuracy before its publication. 49 S.W.3d at 626. In his

affidavit, Eller stated that when Barrett first contacted him

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

about writing the article, Barrett agreed to let him review it 1977. Plaintiff filed suit on February 22, 1978. In response

before it was published. On Friday, October 25, 1991, Eller to the defendant's assertion of limitations, the plaintiff relied

received a copy of “what [Barrett] said was a draft of the on the “multiple-publication rule,” which recognizes a new

article.” According to Eller, he read the article that day and cause of action each time a copy of the allegedly libelous

telephoned Barrett, telling him that the article “contained publication is sold. Noting that such a rule would allow stale

innumerable false statements and clearly misleading and false claims, encourage multiple suits, and create a number of other

innuendos.” Eller's affidavit maintains that he was misled problems, and recognizing that mass publication of a single

in the conversation into believing that the article could still defamatory statement constitutes, in effect, a single wrong,

be corrected, and that he told Barrett he would send him the court adopted what it referred to as the “single-publication

a letter identifying the purported inaccuracies as quickly as rule.” Id. at 691. Under the court of appeals' articulation of

possible. Eller transmitted the letter to a courier for delivery that rule, publication is complete “on the last day of the mass

by late the next day. According to the court of appeals, this distribution of copies of the printed matter” because “[i]t is

evidence “creates a fact question as to Barrett's state of mind that day when the publisher, editors and authors have done

at the time of publication, provided that the article was not all they can to relinquish all right of control, title and interest

published until after Barrett's *173 representation.” Id. at in the printed matter.” Id. at 692. The court emphasized that

625 (emphasis added). defining publication in this manner “provides ample time for

a diligent plaintiff to pursue a cause of action for libel and

[13] The actual malice inquiry focuses on the defendant's also allows full recovery for any damages suffered.” Id.

state of mind at the time of publication. See Bose Corp. v.

Consumers Union of United States, Inc., 466 U.S. 485, 512, The single-publication rule's definition of the publication

104 S.Ct. 1949, 80 L.Ed.2d 502 (1984). It is undisputed, date for limitations purposes is clearly designed to protect

however, that the article had been “locked up”—printed publishers from repeated liability based on old publications

and mailed to subscribers—on October 21st, before Barrett's that might be reprinted or back ordered. See ROBERT D.

October 25th conversation with Eller and before Forbes SACK, SACK ON DEFAMATION: LIBEL, SLANDER,

received Eller's letter. Nevertheless, the court of appeals held AND RELATED PROBLEMS § 7.2 (2003). It has nothing

that the record presented a fact issue on malice “[b]ecause to do with determining the publisher's state of mind at

the summary judgment proof raises a question as to whether the time of publication. Applying the single-publication

the October 25 conversation took place before the article was rule in this context could lead to virtually uncontrollable

published.” 49 S.W.3d at 627 (emphasis added). The court liability and potentially absurd results. For example, a media

concluded that the conversation may have taken place before defendant could be held liable for knowingly publishing

the article was published based on authority holding that, for false information even if it did not become aware of the

limitations purposes, “ ‘publication is complete on the last error until the article has *174 been printed and mailed

day of the mass distribution of copies of the printed matter.’ ” to subscribers or otherwise distributed. Such a result would

Id. at 626 (quoting Holloway v. Butler, 662 S.W.2d 688, 692 have an impermissible “ ‘chilling’ effect ... antithetical to

(Tex.App.-Houston [14th Dist.] 1983, writ ref'd n.r.e.)). the First Amendment's protection of true speech on matters

of public concern.” Philadelphia Newspapers, Inc. v. Hepps,

The court of appeals erred in applying the Holloway 475 U.S. 767, 778, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986)

limitations standard in this context. Determining the date (holding that application of state law that did not require

of an article's publication for limitations purposes involves private media defamation defendant to prove falsity violated

considerations entirely different from those that apply First Amendment). Moreover, the focus of the actual-malice

when gauging whether actual malice exists at the time of inquiry is the defendant's state of mind during the editorial

publication. In Holloway, the plaintiff sued for libel based process. See Herbert v. Lando, 441 U.S. 153, 99 S.Ct. 1635,

upon an article that appeared in Texas Monthly magazine. 60 L.Ed.2d 115 (1979). Evidence concerning events after

662 S.W.2d at 690. Like most mass-media publishers, the an article has been printed and distributed, has little, if any,

defendant distributed its magazine through the mail and by bearing on that issue. Because the Forbes article was printed

private delivery in the month prior to the month indicated and in distribution before Eller's October 25th conversation

on the issue cover. Accordingly, distribution of the March with Barrett, the conversation cannot constitute evidence of

1977 issue occurred on February 17 and 18, 1977. By special actual malice at the time of publication.

order, though, some back issues were sold after February 22,

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

In Turner v. KTRK Television, Inc., 38 S.W.3d 103

(Tex.2000), for example, we considered a political

B

candidate's contention that a television news story suggesting

During Barrett's October 25th conversation with Eller, he that he had participated in a multi-million dollar insurance

acknowledged that he had that day become aware that he scam defamed him. *175 Turner had drafted a will for

had misidentified the Edward Bass that had sued one of the a man named Foster shortly before Foster disappeared

under suspicious circumstances. Foster, the target of several

Granada entities. 4 GBI and GFC argue that this constitutes

criminal investigations, signed the will three days before he

some evidence of actual malice. For the same reason that

was reported to have drowned. Foster's life had been insured

any misleading statements Barrett may have made in the

for more than $1.7 million, and American authorities learned

October 25th conversation are no evidence of malice, his

some time later that he was alive in a Spanish prison. KTRK,

acknowledgment that he had become aware of the Bass error

a Houston television station, broadcast a story about the

that day is no evidence of actual malice.

connection between Turner and Foster in the midst of Turner's

campaign for mayor of Houston. The story omitted several

4 The error was corrected in a later issue of the magazine. critical contextual facts and juxtaposed others in a misleading

manner in the course of suggesting that Turner had engaged

in unethical conduct. We therefore held that the broadcast as

C

a whole conveyed a false and defamatory message. Id. at 119.

[14] Finally, the plaintiffs contend that the article made But we rejected Turner's contention that the story's discussion

a number of negative statements about “Granada” that of the timing of his work on the will was evidence of actual

Forbes was aware were untrue as to GFC and GBI. By malice. Id. at 121. We agreed that a reasonable viewer could

failing to specifically distinguish the public corporations from take the segment to mean that “Turner ‘drew up’ the will three

other entities within the Granada group, they argue, Forbes days before Foster disappeared.” Id. But we concluded that

knowingly or recklessly juxtaposed true statements to create even obviously misleading statements, without more, were

the misleading impression that they applied to GFC and not enough to constitute clear and convincing evidence of

GBI. They argue that Barrett's affidavit itself provides some actual malice:

evidence of malice because he testified that he used the

We agree that there was a discrepancy

term “Granada” to describe “the organization of subsidiaries,

in the segment's language and that it

affiliates, limited partnerships, joint ventures and other

is possible that [the reporter] cleverly

business organizations that were managed or otherwise under

manipulated this language to deceive

the direction and control of David Eller,” a group that

viewers. But it is equally possible that

includes GFC and GBI. Because Barrett also testified that

[the reporter] simply failed to choose

certain of the generic Granada references were not intended

his words with proper precision, that

to apply to GBI or GFC, the plaintiffs maintain that the

is, by stating that Foster “drew up”

article is admittedly false with respect to those statements.

rather than “signed” the will (outside

In essence, the plaintiffs contend that Forbes should have

of Turner's presence) three days before

included qualifying language specifically excluding GBI and

he disappeared. Because there is no

GFC whenever the article referred to “Granada.”

other evidence that [the reporter]

knew or strongly suspected that this

Read fairly, Barrett's affidavit establishes, at most, that Forbes

segment would mislead viewers, its

was “ ‘guilty of using imprecise language in the article—

lack of clarity alone is not clear and

perhaps resulting from an attempt to produce a readable

convincing evidence of actual malice.

article.’ ” Bose, 466 U.S. at 492, 104 S.Ct. 1949 (quoting

Bose Corp. v. Consumers Union of United States, Inc., 692 Id. at 121–22.

F.2d 189, 197 (1st Cir.1982)). Both we and the United States

Supreme Court have repeatedly held that a media defendant's In Huckabee, we affirmed summary judgment granted to a

poor choice of words or content, without more, does not media defamation defendant that had been sued for statements

amount to actual malice. in a documentary about four southeast Texas cases in which

family courts granted custody of a child to the father after the

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

mother accused him of child abuse. Huckabee, 19 S.W.3d at though reflecting a misconception, does not place the

417. One of the judges who presided over two of the custody speech beyond the outer limits of the First Amendment's

disputes sued Time–Warner, alleging that the documentary broad protective umbrella.... The statement in this case

omitted key information in an effort to depict him as biased represents the sort of inaccuracy that is commonplace in the

or corrupt. We acknowledged that a publisher might present forum of robust debate to which the New York Times rule

such an incomplete or unbalanced picture of the facts as to applies.... “Realistically, ... some error is inevitable; and

constitute evidence of actual malice. Id. at 426. On the facts the difficulties of separating fact from fiction convinced the

of that case, however, we held that the record presented no Court in New York Times [and other cases] to limit liability

evidence of actual malice, even though the story might have to instances where some degree of culpability is present in

been misleading: order to eliminate the risk of undue self-censorship and the

suppression of truthful material.”

Although the facts omitted might

or might not have led a reasonable Id. at 513, 104 S.Ct. 1949 (citations omitted).

viewer to suspend judgment or even

to reach an opposite conclusion Here, Barrett was charged with the task of producing a

regarding Judge Huckabee's order, readable article about an extremely complicated network of

their omission did not grossly distort business entities related to the Granada Corp. While it would

the story. At most, HBO's failure to have been more accurate for Forbes to identify the precise

capture accurately all the story's details entities within that group to which it was referring, Forbes's

suggests an error in judgment, which is careless use of the generic “Granada” is no evidence that

no evidence of actual malice. Forbes entertained serious doubts as to the statements' truth

or had a high degree of awareness of their falsity. See Turner,

Id.

38 S.W.3d at 121.

Similarly, in Bose, the Supreme Court considered a

manufacturer's claim that a Consumer Reports article

describing a new Bose speaker system disparaged the V

product. The district court had ruled that the article falsely

stated as fact that “instruments heard through the Bose system The record before us presents no evidence that Forbes

‘tended to wander about the room,’ ” and rendered judgment published defamatory statements about GBI and GFC with

for Bose, the manufacturer. Bose, 466 U.S. at 488, 104 actual malice. Accordingly, we reverse the court of appeals'

S.Ct. 1949. Applying the New York Times' actual-malice judgment and render judgment that the plaintiffs take nothing.

standard, the Supreme Court *176 rendered judgment for

the publisher. The Court observed that the circuit court

correctly concluded “that there is a significant difference Justice SCHNEIDER did not participate in the decision.

between proof of actual malice and mere proof of falsity.”

Id. at 511, 104 S.Ct.1949 (citations omitted). The district

court had found that the writer's actual perception was that *177 APPENDIX

sound moved “along the wall” rather than “about the room.”

Id. Nevertheless, the Court held that the writer's choice of

language,

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

APPI:NDIX: Forbes article

Houston's Granada Corp. talks ol l991 revenues :;:~;/;;.: ~~-=.,~~o~~

or $2 billion. Try $200 million. This much-touted c:Ns whiz ·b""• cW.,oto;rr""«~ •o

high-tech food concem is near collapse. be "' « pc•,;,., du• ol<i-fwvoncd

QtU, Orcc.<tin$ tcchruqv<U, illdud.int

an)f,c\.U inscmin:~ Oon , W(rt J lot

The incredible c::~p~. Gnn~cb ' J o_.tth~d '-'U ~.ho

fiu;'c hi~. ''We. goc K.icncc con·

qucr~;d, b\JI our dficlcncia • 'etc ""'Y

,aot." [U4:.r concc:dcs.

shrinldng empire CN):ad.aiOil 1n c:.:n:)m:u cd $30 mit·

Lio., speC'\I.Iacint: \n unlc com.rnod·

~Ocs, \hrn <ouJcin' r •<U oR' iu o"'n

node J)tO~ubl~·· J'b..ru to ict up 1

"'<l'tical.1r intc.~u:d opc.ndof'o ii\C lu.d·

in£, (:ilot c.ricl lAd ICtAiJ ~tOIQ (o.u..,.

4-c rt.d . Md • J_,-~c. .uncN.ru of~

1,. t9S9 nu w.u 5""' ,,.....,,.,. "-v drain.cd oft' ~o the tlkr h.mfl•

dud<d Gnn><l> Co-p. """"'S· iu ~ RUJ\2f.et'M.nC: Ceo vu$ "";.

.. corpon.,i: san o{ the foNt c. .. 'The :a<Ccn.s "16'\c,h c.nu:rpriJ<J i1 coavoUc.C:.~

ftCWSp>pd Ol<d ell< roc.vcl> by Wo The bi ~ 19S6 <lwl~u in II<< w h•>

Hou.ncm-buc.d SW'UI~ of 'Sc"'JJC:t"d pub~ cu1 o8' the. nO¥· o( new t\at!d.t. inco c1K

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adc.nQ.u.J and hrp.el)• :uccc:ufuJ quc::c Yc1: C"'t'CJ'I '11.'1\ilc. ia :a1Nn wet< d<'< ·

for publicicy b)• D:avid EJJa, Gr:ltU .. riond.n&, Gnt~'3ch ~lt\att.cl ro hi<lc

~·, u. ~ J.:) ~cS m;cJ o«U~ ch~ f.acu from the ouui.ck """'ckl.

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d,a', p~ asa")a teilJ h:and ouc:.. all ta'\lcrutt, which invo,•W ' score. ol

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••

*178

Westlaw Next © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9

Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (2003)

32 Media L. Rep. 1498, 47 Tex. Sup. Ct. J. 162

All Citations

124 S.W.3d 167, 32 Media L. Rep. 1498, 47 Tex. Sup. Ct.

J. 162

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 10

Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (2004)

Prod.Liab.Rep. (CCH) P 16,878, 47 Tex. Sup. Ct. J. 266

344 Cases that cite this headnote







[2] Judgment

 !"#$ Weight and Sufficiency

% For purposes of motion for summary judgment, a

&'()*

!#+,-+-./0 genuine issue of material fact exists if more than

a scintilla of evidence establishing the existence

" 12312 4 !. 1$ of the challenged element is produced. Vernon's

211 4 '-5 6$2117 Ann.Texas Rules Civ.Proc., Rule 166a(i).

4 8-+.+-&+2$2117

349 Cases that cite this headnote

Synopsis

Background: Injured motorist brought action against

[3] Products Liability

automobile manufacturer for products liability and

Manufacturing Defect

negligence. The 131st District Court, Bexar County, Phylis

J. Speedlin, J., granted summary judgment in favor of the A “manufacturing defect” exists when a product

manufacturer. Motorist appealed. The Court of Appeals, 82 deviates, in its construction or quality, from the

S.W.3d 26, affirmed in part, reversed and remanded in part. specifications or planned output in a manner that

renders it unreasonably dangerous.

33 Cases that cite this headnote

Holdings: On grant of manufacturer's petition for review, the

Supreme Court, Phillips, C.J., held that

[4] Products Liability

Manufacturing Defect

[1] expert's affidavit failed to identify any defect at time

motorist's pick-up truck left the manufacturer and Products Liability

Proximate Cause

[2] the manufacturer was not liable for causing the fire. A plaintiff must prove that a manufacturing

defect was defective when it left the hands of the

manufacturer and that the defect was a producing

Reversed. cause of the plaintiff's injuries.

Hecht, J., filed a concurring opinion, in which Owen, J., 23 Cases that cite this headnote

joined.

[5] Judgment

Torts

West Headnotes (11) Summary judgment affidavit of motorist's expert

failed to identify a defect in motorist's pick-

up truck at time it left the manufacturer, and

[1] Judgment

thus, affidavit was insufficient to show that

Presumptions and Burden of Proof

manufacturer was liable for product defect for

The non-movants on no-evidence motion for fire that the expert “suspected” was caused by

summary judgment must produce summary truck's electrical system. Vernon's Ann.Texas

judgment evidence raising a genuine issue of Rules Civ.Proc., Rule 166a(i).

material fact to defeat summary judgment.

Vernon's Ann.Texas Rules Civ.Proc., Rule 8 Cases that cite this headnote

166a(i).

[6] Judgment

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (2004)

Prod.Liab.Rep. (CCH) P 16,878, 47 Tex. Sup. Ct. J. 266

Presumptions and Burden of Proof Motorist, the third owner of pick-up truck,

When determining if more than a scintilla of produced no direct evidence of cause of fire in

evidence has been produced in response to truck, in which fuel system had been previously

no-evidence motion for summary judgment, repaired by second owner to improve truck's poor

evidence must be viewed in light most favorable gas mileage, and only circumstantial evidence

to non-movant. Vernon's Ann.Texas Rules that a manufacturing defect existed in truck when

Civ.Proc., Rule 166a(i). it left manufacturer, and thus, manufacturer was

not liable for causing fire as result of a product

305 Cases that cite this headnote defect.

15 Cases that cite this headnote

[7] Judgment

Weight and Sufficiency

[11] Products Liability

When evidence offered to prove a vital fact in

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