First, a defendant may not designate a person as a RTP, after the statute of limitation has expired as to the cause of action to the RTP, if the defendant “failed to comply with its obligations, if any to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.”  Tex. Civ. Prac. & Rem. Code § 33.004(d).  Although defendant’s “obligations” to “timely” disclose a RTP is not defined in that statute and has yet to be interpreted by the courts, a prudent course in the interim would be to disclose a RTP in response to a Rule 194 request for disclosure, or at the earliest time the RTP is known.

Second, the Legislature eliminated the end- around of the statute of limitation for a RTP that was previously allowed and utilized by Plaintiffs.  Now, a plaintiff will no longer be able to avoid the statute of limitations defense when a defendant designates someone as a RTP and the statute of limitations has run on the RTP.

A well-drafted Letter of Intent (“LOI”) is effective in streamlining the negotiation process by creating the initial framework for the transaction, reduce misunderstandings, allocating interim responsibilities, and, perhaps, creating a moral or psychological commitment to the deal.  However, if the transaction is complex and would require a long, complex LOI to cover all the material terms, it might be best to proceed directly to negotiation of the final agreement.  

A poorly drafted LOI can expose the parties to unintended liabilities or obligations. There seems to be a trend among some courts to find that certain letters of intent constitute binding obligations with respect to material terms, even where the LOI states that it is subject to the execution of a subsequent agreement. Likewise, an LOI lacking the material terms otherwise required to support a binding contract could still bind the parties with a duty to continue negotiating in good faith, thus giving rise to a potential claim for damages when one party terminates the negotiation.

It is imperative that the LOI include proper non-binding language with respect to the underlying transaction, but should also specifically identify those provisions, if any, which are intended to be binding among the parties. For example, the negotiations may include a confidentiality requirement, reimbursement of expenses, or standstill/no-shop clause, which, by their very nature, are intended to be binding regardless of the consummation of the underlying transaction.

Ultimately, the LOI should state the goals and key terms of the transaction in clear, unambiguous language and avoid unintended consequences. Parties are well-advised to consult with experienced legal counsel for the drafting (or at least review) of any letter of intent.

Texas courts of appeals have held that under a plain reading of this provision, the defendant prevails when he succeeds in defending against the plaintiff’s claims by obtaining a take-nothing judgment.  See, e.g., Fitzgerald v. Schroeder Ventures II, LLC, No. 04-10-00371-CV, 2011 WL 1303276 (Tex. App.—San Antonio Apr. 6, 2011, no pet.).  But courts hold plaintiffs to a different standard of “prevailing.”  The plaintiff “must prove compensable injury and secure an enforceable judgment in the form of damages or equitable relief.”  The Supreme Court of Texas recently acknowledged different measurements of “prevailing” for plaintiffs and defendants under this type of contract provision.  See Epps v. Fowler, No. 10-0283, 2011 WL 3796618 (Tex. Aug. 26, 2011).  The question at issue was narrower, but the Supreme Court’s holding recognized that plaintiffs and defendants stand on different footing when seeking fees.

Courts have been left to interpret this provision because, as mentioned, the TREC form contracts do not define “prevailing party.”  But parties can decide for themselves what it means to prevail under a particular contract.  To do so, they should simply add language to the agreement specifically defining this term as to both plaintiffs and defendants.

The law is well established that vested rights occur when a property owner has invested a significant amount of money into a property with a view to completing a development of a recognizable scope, resulting in the property owner having “investment backed expectations”, which the courts recognize and protect from subsequent changing governmental regulation.  Once vested rights are established for a project, then the developer/property owner should be able to rely in good faith on the laws affecting and controlling development in existence at the time the developer/property owner incurs significant expenses or liabilities in proceeding with that development on that property.

The vested rights are created or established by the conduct of the property owner, not be any state or local legislation.  Legislation, such as Section 245 of the Texas Local Government Code or a City’s development rights or vested rights permitting processes, are legislative efforts to establish more certainty in recognizing existing vested rights; they do not create the rights.  As stated by the Texas Supreme Court in City of Austin v. Quirk [7 S.W.3d 109, 132 (Texas 1998)], the purpose of these governmental efforts are to establish requirements “relating to processing and issuance of permits and approval by governmental agencies in order to alleviate bureaucratic obstacles to economic development.”

Too often, overzealous elected officials and governmental employees use these governmental requirements to bully developer/property owners to accepting current regulations, irrespective of when the development rights vested for a particular project.   The delay that City development staff can cause by challenging vesting dates can be costly to a developer.  Nevertheless, developer/property owners should carefully evaluate when vested rights were in fact established for a project before accepting governmental regulation.  A developer/property owner may be able to establish a basis for earlier vested rights and may even be able to enter into a Consent Agreement accordingly with the City.  It will be time and expense well spent.

Say that you invoke the Texas offer-of-settlement statute.  The opposing party may be forced to pay some of your litigation costs.  This can happen if he rejects your settlement offer and then receives a judgment “significantly less favorable” (as statutorily defined) than your offer.  Tex. Civ. Prac. & Rem. Code Ann. Chapter 42 (Vernon 2008); Tex. R. Civ. P. 167. And say that after rejecting your offer, the other party runs up sizable legal bills that could make all the difference in whether a judgment is “significantly less favorable” than your offer so as to require cost-shifting.  Should the other guy’s run-up in fees tip the balance?

The statute does not directly say, but the answer seems to be “no,” according to the slim amount of appellate case law on this question. Of three Texas appellate cases addressing whether attorney’s fees factor into the comparison of the judgment amount against the offer amount, two cases ignored attorney’s fees.  Orix Capital Markets, LLC v. La Villita Motor Inns, 329 S.W.3d 30, 49-50 (Tex. App.—San Antonio 2010, pet. filed); Weeks Marine, Inc. v. Garza, No. 04-08-00660-CV, 2010 WL 1609694, at *1, 8 (Tex. App.—San Antonio April 21, 2010, pet. filed) (mem. op.). The third case, however, appears to have included attorney’s fees in both the judgment and offer amounts for comparison purposes.  See Nayyer v. Greenbriar Place Maint. Ass’n, No. 01-06-00566-CV, 2008 WL 183723, at *5 (Tex. App.—Houston [1st Dist.] Jan. 17, 2008, no pet.).

Texas procedural guru Elaine Carlson endorses the former approach. To make a true “apples-to-apples” comparison to determine whether, under the statute, a judgment is “significantly less favorable” than the offer so as to mandate cost-shifting, Carlson says the court should compare, without regard to attorney’s fees and costs:

1. the part of the offer covering monetary claims, and
2. the amount of the judgment for those monetary claims.

The new “Loser Pays” system in Texas will affect many civil lawsuits, but this legislation still will not clear up the attorney’s fees question.

In some instances, however, the insurance carrier sends out a very different letter to the newly made defendant that is even more disheartening than receiving the original lawsuit.  This letter is known as the Coverage Denial Letter, wherein the insurance carrier advises the defendant that there is no coverage under the insurance policy issued to the defendant for the claims asserted against it in the lawsuit and thus, No Duty to Defend, leaving the defendant to tread into lawsuit oblivion on its own.

Facing the depths of lawsuit oblivion with barely a paddle, the defendant is left with little hope.  However, not all hope is lost.  In many instances, insurance carriers issue denial letters refusing to undertake their duty to defend in contravention to the long-established rule known as the eight-corners rule.

Pursuant to this rule, an insurance carrier is to evaluate its duty to defend based solely on the allegations contained within the four-corners of the plaintiff’s petition compared to the language contained within the four-corners of the insurance policy. If the allegations in the petition come within the language of the insurance policy then the insurance company must defend.  In other words, the insurance company should not consider facts outside of these two documents when making its decision to defend a defendant in a newly filed lawsuit.

All too often, however, insurance companies rush to judgment and consider extraneous facts when making their coverage determinations.  Thus, when faced with a Coverage Denial Letter, one can’t rely on the insurance company’s ruling. Instead:

• Have counsel evaluate the plaintiff’s petition and your insurance policy to conduct an evaluation of your insurance company’s position.
• In some instances, you may find that such an evaluation may reveal that the insurance company has over-stepped its bounds in its initial coverage analysis by considering extraneous evidence as part of the process.
• A polite letter to the insurance carrier in those instances usually results in the carrier reconsidering its position and agreeing to at least defend the new defendant under a Reservation of Rights, saving the defendant from going into lawsuit oblivion on its own.

Thus, when faced with trying circumstances, try try again.

El Acto generalmente require que una persona otorga permiso por escrito antes que una agencia federal pueda divulgar archivos sobre esa persona.  Vea 5 U.S.C. § 552a(b) (2006).  Generalmente, uno no puede ir a la FBI, pedir archivos sobre una persona en particular, y tener esperanzas que la FBI solamente le proporcione esos archivos.  Al contrario, una persona esta permitada acceso solamente a archivos o informacion que le pertenescan a esa misma persona.  Id. § 552a(d)(1).  Para obtener informacion sobre otra persona, la persona haciendo la busqueda o tiene que dar prueba de permiso por escrito de la persona o tener prueba que la otra persona este muerta.  Vea Federal Bureau of Investigation, http://www.fbi.gov/foia/requesting-fbi-records; Get Grandpa’s FBI File, http://www.getgrandpasfbifile.com/; vea tambien 28 C.F.R. § 16.3(a).

Aparte de el Acto de Privacidad, el Freedom of Information Act (FOIA) y las reglas de el Departamento de Justicia que lo acompañan limitan divulgar cierta informacion mantenida por el Departamento de Justicia y sus agencias y entidades.  Id. § 552(b).  La FOIA prohibe proporcionar “archivos o informacion juntado para en el proceso de procedimientos legales” que, si divulgada,

• Razonablemente podria impedir procedimientos legales;
• Podria prevenir a una persona el derecho a una adjudicacion justa o imparcial;
• Razonablemente podria ser una invasion de privacidad personal indeseable;
• Presentaria tecnicas, procesos y guias de ejecucacion de ley; investigaciones o acciones penales; o
• Razonablemente podria dañar la vida o seguridad de una persona.  Id. § 552(b)(7).

Tal, podria alegar que cualquier archivo de la FBI que le pertenecen a su cliente buscados por su oponente bajo FOIA le quitarian a su cliente su derecho a un juicio justo o adjudicacion imparcial de su caso y seria un invasion indeseable a la privacidad de su cliente.  Vea id.  Podria alegar tambien que la busqueda de su oponente implica los intereses de la misma FBI en protejer procedimientos legales, tecnicas, y procesos.  See id.

The Act generally requires an individual to give his or her written consent before a federal agency may disclose any records on that person.  See 5 U.S.C. § 552a(b) (2006).  Generally, you cannot go to the FBI, ask for records on a particular person, and expect the FBI to just hand over those records. Rather, an individual is permitted to access only records or information pertaining to himself.  Id. § 552a(d)(1).  To obtain info about another person, the requestor either must have that other person’s written consent or prove that the other person is dead. See Federal Bureau of Investigation, http://www.fbi.gov/foia/requesting-fbi-records; Get Grandpa’s FBI File, http://www.getgrandpasfbifile.com/;  see also 28 C.F.R. § 16.3(a).

In addition to the Privacy Act, the Freedom of Information Act (FOIA) and its accompanying Department of Justice regulations restrict disclosure of some information held by the DOJ and its component agencies and bureaus. Id. § 552(b).  The FOIA bars the release of “records or information compiled for law enforcement purposes” that, if disclosed,

• Reasonably could be expected to interfere with law enforcement proceedings;
• Would deprive a person of a right to a fair trial or an impartial adjudication;
• Reasonably could be expected to be an unwarranted invasion of personal privacy;
• Would disclose techniques, procedures, and guidelines for law enforcement; investigations or prosecutions; or
• Reasonably could be expected to endanger the life or safety of an individual. Id. § 552(b)(7).

Thus, you can argue that any FBI records pertaining to your client sought by your opponent under the FOIA would deprive your client of his right to a fair trial or impartial adjudication of the case and would be an unwarranted invasion of your client’s personal privacy.  See id.  You can also argue that your opponent’s request implicates the FBI’s own interests in protecting law enforcement proceedings, techniques, and procedures.  See id.

Examples of the different types of merger clauses are:

• Ineffective Merger Clause: ”The parties acknowledge that neither party nor their respective agents, employees or contractors have made any representations or promises in executing this agreement except as expressly set forth herein.”

• Effective Merger Clause with Disclaimer Language: “The parties acknowledge that neither party nor their respective agents, employees or contractors have made any representations or promises, and no party is relying upon any such representations or promises, in entering this agreement except as expressly set forth herein.  Each party relies exclusively upon his or her own judgment.

It may be difficult to rationalize how a party can agree that no extra-contractual promises or representations were made and still sue the other party for the breach or falsity of those non-existent promises.  Nevertheless, that has long been the law of Texas to prevent the nefarious from taking advantage of the gullible or trusting. See e.g. Dallas Farm Mach. Co. v. Reaves, 307 S.W.2d 233 (Tex. 1957).

The Court restates its prior conclusion from Forest Oil that a disclaimer of reliance in a merger clause does not automatically preclude a fraudulent inducement claim; however, the Court’s opinion in Italian Cowboy suggests that without the disclaimer of reliance language, the fraudulent inducement claim is more difficult to avoid as a matter of law.

As a result, all contracts – whether for pharmaceutical-medical sales, for real estate transactions or for any other purpose – should apply the belt-and-suspenders approach by including the disclaimer of representations as well as a disclaimer of reliance.

La garantia de buena construccion laboral y manual se enfoca en la conducta de el contratista la cual requiere que construyan competentemente y de acuerdo con los requisitos de la industria.  Esto cubre los defectos de plomeria, alambrado y cimientos, por ejemplo, los cuales no son visiblemente aparentes de inmediato.  Esta garantia es un ajuste y se aplica si el contratista y comprador no estan de acuerdo expresamente en como el contratista o la casa van a funcionar.

La garantia de habitabilidad, de otra manera, se enfoca en el producto terminado, requiriendo que casas completas sean seguras, sanitarias y de otra manera adecuadas para habitacion humana.  Esto cubre defectos tales como cuarteaduras serias y derrames de agua que hacen inhabitable las partes de la casa en la que se vive actualmente.  Por razon de que esta garantia es considerada una parte esencial de la venta de una casa, es dificil renunciar a un derecho, negar responsabilidad, o de otra manera limitar su aplicabilidad.

Dependiendo en la fecha que la construccion comienza en cierta casa, el contratista y dueño de casa deben trabajar con cualquiera de las garantias de ley comun o garantias emanadas de fuentes legislativas.

• En 2003, la Legislatura decreto la Texas Residential Construction Commission Act.  Este incluye especifica, esclusiva y garantias limitadas para nuevos hogares construidos durante un periodo particular.
• Pero en 2009, la Legislatura permitio que ambos, la Comision y el Acto terminaran.  Estas fueron abolidas en Septiembre 1, 2009, sin embargo la agencia continuo manejando quejas de proprietarios hasta Agosto 31, 2010.

Ahora, las garantias de ley comun una vez mas se aplican a las nuevas construcciones residenciales.