Texas Supreme Court Decides Email is Here to Stay, Amends Rules of Civil Procedure Accordingly

emailWhen it comes to civil courts in Texas, the theme for 2013 was “fast-tracking.” The Texas Rules of Civil Procedure saw a number of changes related to triaging and expediting low-dollar controversies and eliminating “frivolous” cases early in the litigation process. While limiting requests for production and depositions in cases under $100,000 is all well and good, civil courts in Texas face much greater problems on a day-to-day basis.

One such problem is the underutilization of technology. Before 2014, email didn’t exist as far as the Texas Rules of Civil Procedure were concerned, electronic filing by fax was the equivalent of placing an envelope in the mail, and FedEx was a great way to send birthday gifts, but an unacceptable way to send discovery requests. But a new day has dawned, and 2014 is upon us…

The theme for Texas courts in 2014 is “upgrading”—bringing the courts into the 21st century through judicial mandate. The rules go into effect January 1, and they will impact your practice immediately. So without further ado, let’s take a look at the new rules (the order adopting the amendments can be found here):

Three-Day Response Extension Only Applies to Mailed Documents

Under the new rules, the three-day extension for response deadlines under Rule 4 only applies to mailed documents. It does not apply to documents served by fax anymore. It also does not apply to documents sent by UPS, FedEx, or another commercial delivery service. So, for example, motions for summary judgment served by fax (before 5:00 p.m.) or FedEx can be sent 21 days before the hearing, instead of 24.

Service by Email and Commercial Delivery Service

New Rule 21a allows parties to serve documents by email and commercial delivery service (e.g., FedEx and UPS). Documents served by commercial delivery service are deemed served upon deposit with the delivery service. The Rule doesn’t say when service by email is complete.

Email Addresses in Signature Blocks

Under new Rules 21(f)(2) and 57, pleadings and documents that are electronically filed must contain the attorney’s email address.

Redaction of Home Addresses and Other Sensitive Data

Under new Rule 21c, a party cannot file a document without redacting any sensitive data, unless the sensitive data must be included by statute, court rule, or administrative regulation. “Sensitive data” includes driver’s license numbers, social security numbers, birth dates, and home addresses (among other things).

While these Rules seem straightforward, there are pitfalls awaiting unsuspecting litigators. For example, in 2013, you had 33 days to respond to discovery requests sent by fax. Now, in 2014, you have 30, and if you inadvertently calendar the old response deadline, you waive your objections or deem the admissions. Same for discovery received via FedEx. Very troublesome indeed…

But fortunately for you, you began your 2014 with a quick read of these revised rules, and now you won’t begin the New Year with deemed admissions because you miscalendared a deadline. Happy New Year from TexAppBlog!!

TRCP 270: A Post-Trial Evidentiary Mulligan

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In golf, a mulligan is a stroke that is replayed from the spot of the previous stroke without penalty, due to an errant shot made on the previous stroke. The result is, as the hole is played and scored, as if the first errant shot had never been made. Mulligans are disallowed entirely by the rules of golf and players who attempt it or agree to let it happen may be disqualified from sanctioned competitions.

Unlike the rules of golf, the Texas Rules of Civil Procedure allow for attorneys to introduce evidence that was not originally introduced at trial before a judgment is rendered—a post-trial evidentiary mulligan. Under Texas Rule of Civil Procedure 270, “[w]hen it clearly appears to be necessary to the due administration of justice, the court may permit additional evidence to be offered at any time; provided that in a jury case no evidence on a controversial matter shall be received after the verdict of the jury.” Tex. R. Civ. P. 270.

Such an evidentiary mulligan was at issue in the recent 14th Court of Appeals case, Harvest Life Foundation v. Harris County Appraisal Dist., 2013 WL 2456867 (Tex. App.—Hous. [14th Dist.] 2013). Harvest Life applied for exemptions for two tracts of property for tax years 2007–2009 and seven tracts for tax years 2008–2009 on the ground that the properties were used for charitable purposes. At the close of evidence, HCAD argued that Harvest Life failed to present evidence that any of the properties were certified as a halfway house by the pardons and paroles division of TDCJ—the exemption for which Harvest Life applied—and HCAD had presented a page from the TDCJ’s website showing Harvest Life was not one of seven certified halfway houses in Texas.

Due to a dispute over the scope of a pre-trial stipulation, and given the motion for directed verdict, the trial court re-opened the evidence to review Harvest Life’s applications, which had not been offered. Subsequently, HCAD filed supplemental exhibits, consisting of the complete applications for tax years 2007–2009, and additional briefing. In its responses, Harvest Life objected to the filing of supplemental evidence. On August 19, 2011, the trial court conducted another hearing and admitted the supplemental evidence. The Court ultimately ruled, based in large part on the supplemental evidence, that Harvest Life failed to qualify for an exemption for all but one tract of land.

This rule is certainly not new. In Texas Emp. Ins. Ass’n v. Elder, 282 S.W.2d 371, 375–76 (Tex. 1955), the Texas Supreme Court opined that evidence may be entered at any time before the Court of Appeals disposes of the appeal of the trial court judgment:

“It will be observed that at the time that motion was filed in the trial court the case had already been affirmed by the Court of Civil Appeals. The trial court did not err in refusing to consider that evidence, for it had lost jurisdiction of the case. While the rule does provide that the court may permit additional evidence to be offered ‘at any time,’ that language should not be construed to mean that new evidence should be considered by the trial court after a case has been affirmed by the Court of Civil Appeals.”

The rule is not an absolute guarantee that the trial court will allow additional evidence. The decision to reopen the evidence is within the sound discretion of the trial court. In re Hawk, 5 S.W.3d 874, 876–77 (Tex. App.—Houston [14th Dist.] 1999, no pet.). In deciding whether to exercise this discretion, the court may consider a number of factors, including (1) the diligence of a party in presenting its evidence, (2) whether reopening the evidence will cause undue delay, (3) whether reopening the evidence “will do an injustice,” and (4) whether the evidence to be introduced is decisive. Id. at 877. The trial court should exercise its discretion liberally “in the interest of permitting both sides to fully develop the case in the interest of justice.” Id.

Given the standard above, Rule 270 mulligans, like mulligans in golf, should be used rarely, if at all, and only when absolutely necessary to ensure a full and fair trial court proceeding. However, one should be aware of this underutilized and oft-forgotten rule, if only for those times when your first (evidentiary) shot finds the water, the trees, or the backyard of a home adjacent to the golf course.

TRCP 47: The Overlooked Rule That Can Ruin Your Discovery Plan

prohibitedMuch ado is being made about the recent changes to the Texas Rules of Civil Procedure, especially the new dismissal rule (TRCP 91a, for more information see https://texappblog.com/2013/05/07/trcp-91a-a-state-court-12b6/) and the expedited action rule (TRCP 169). But one often overlooked procedural rule implemented with the dismissal and expedited action rules has some attorneys wondering why their discovery is not being answered.

Texas Rule of Civil Procedure 47, entitled (innocuously enough) “Claims for Relief,” was revised as part of an implementation package to allow courts to triage cases into expedited and non-expedited actions:

Rule 47. Claims for Relief

An original pleading which sets forth a claim for relief, whether an original petition, counterclaim, cross-claim, or third-party claim, shall contain:

(a) a short statement of the cause of action sufficient to give fair notice of the claim involved;

(b) a statement that the damages sought are within the jurisdictional limits of the court;

(c) except in suits governed by the Family Code, a statement that the party seeks:

(1) only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees; or

(2) monetary relief of $100,000 or less and non-monetary relief; or

(3) monetary relief over $100,000 but not more than $200,000; or

(4) monetary relief over $200,000 but not more than $1,000,000; or

(5) monetary relief over $1,000,000; and

(d) a demand for judgment for all the other relief to which the party deems himself entitled.

With the exception of subsection (c)—the procedural rule for implementing the expedited action rule—this should all sound very familiar to Texas practitioners. However, it is the text after the rule that carries the “bite”:

. . . A party that fails to comply with (c) may not conduct discovery until the party’s pleading is amended to comply.

You read that correctly. No discovery until your pleading (filed after March 1, 2013) is brought into compliance with the new rule. More than a few attorneys have been confounded in recent months by the objection “Discovery is not permitted at this time in accordance with the Texas Rules of Civil Procedure.” Thankfully, you will not be among them.

The full text of the rule can be found here: http://www.supreme.courts.state.tx.us/miscdocket/13/13902200.pdf

TRCP 91a: A State Court 12(b)(6)?

frivilousAttorneys in Texas have a new weapon in the ever-constant battle against “frivolous” lawsuits. The only question that remains is whether that weapon will ever see the battlefield, or, like the often-touted (but almost never used) “loser-pays” offer of settlement, will the rule remain locked within the pages of the Texas statutes—never to see the light of a Texas courtroom?

The new dismissal rule, Texas Rule of Civil Procedure 91a, began as a bright idea within the hallowed halls of the Texas legislature. “The Legislature . . . directed that a more determined effort be made to reduce the expense and delay of litigation, while maintaining fairness to litigants.”

While certainly anyone who has had the misfortune of dealing with a vexatious litigant can sympathize with the desire to fast-track dismissals of frivolous lawsuits, as Milton Friedman once observed, “The government solution to a problem is usually as bad as the problem.”

In response to the perceived wide-spread problem, the legislature passed HB 274. HB 274 added Government Code § 22.004(g), which calls for rules “for the dismissal of causes of action that have no basis in law or fact on motion and without evidence . . . [to be] granted or denied within 45 days of the filing of the motion to dismiss.”

The Texas Supreme Court, in complying with the mandate of § 22.004(g), promulgated the new Texas Rule of Civil Procedure 91a, entitled “Dismissal of Baseless Causes of Action.”

The new rule provides: “Except in a case brought under the Family Code or a case governed by Chapter 14 of the Texas Civil Practice and Remedies Code, a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.”

Anyone who has stepped foot in a federal court or a law school civil procedure course should have at least some familiarity with the language of the new Rule 91a, as the language tracks Federal Rule of Civil Procedure 12(b)(6) (as interpreted post-Twombly):

Legal Insufficiency

FRCP 12(b)(6) – “Failure to state a claim upon which relief can be granted”

TRCP 91a – “[A]llegations . . . do not entitle the claimant to the relief sought.”

Factual Insufficiency

FRCP 12(b)(6) – Must cross “the line between possibility and plausibility of entitlement to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

TRCP 91a – “[N]o reasonable person could believe the facts pleaded.”

While the prospect of a state court 12(b)(6) sounds encouraging at first, the problems with the new rule become apparent as you continue reading. According to the rule, “the court must award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court. The court must consider evidence regarding costs and fees in determining the award.”

That’s right, you read that correctly: mandatory attorney’s fees. If the bells and whistles in your risk-adverse mind are not going off, you just might be one of the few who has invoked the “loser-pays” offer of settlement under HB4.

It remains to be seen if attorneys will use the new dismissal rule to pare-down or eliminate groundless lawsuits, or equally important, whether judges will grant these new motions to dismiss in appropriate cases. Until some data is available, I suspect the “bite” of mandatory attorney’s fees will serve as a sufficient deterrent to widespread use.

The new rule can be found at: http://www.supreme.courts.state.tx.us/miscdocket/13/13902200.pdf

Defending Mr. Ed (A Horse Law Update)

horse 2The title is a bit of a misnomer. Mr. Ed, the talking horse of television fame, would not need a legal defense team. Mr. Ed could talk. Jasper the horse, however, can not talk.  So when Jasper (or rather his owner) was sued by a former caretaker who alleged Jasper was a dangerous horse who attacked his caretaker unprovoked, Jasper needed lawyers. Fortunately for Jasper, he lived in Texas—and in Texas, according to a recent opinion from the Houston 14th Court of Appeals, mere “horse” play (bad pun intended) is not actionable thanks to the Texas Equine Act.

Jasper, in his early life, had been malnourished and presumably abused by a previous owner before the SPCA removed Jasper and brought him back to good health. In August of 2009, Jasper was rescued by Tisa McKim and brought to her stables.

Brenda Young often cared for horses at Jasper’s stable, and upon seeing an advertising flyer posted at the stable, Tisa agreed to pay Brenda each time she fed Jasper or cleaned his stall—$2.50 for the former, $3.00 for the latter. Brenda was given wide discretion in Jasper’s care. Tisa specified feeding instructions considering Jasper’s prior malnourishment, but other decisions were left to Brenda. On January 3rd, 2010, after caring for Jasper for three months, Brenda led Jasper to the paddock to feed him.  During the walk, Brenda stopped to chat with another horse owner. Jasper grazed beside Brenda for a while—then suddenly and without warning, Jasper turned and kicked her.

Brenda sued Tisa for negligence. Tisa moved for summary judgment, arguing the Equine Act, Chapter 87 of the Texas Civil Practice and Remedies Code, shielded her from liability. The Act provides immunity for horse owners against all participants of equine activities due to the inherent risk of equine activities. The trial court agreed that Tisa was immune under the Act and granted her summary judgment motion. Brenda appealed.

On appeal, Brenda claimed the Equine Act only shielded equine sponsors of tourists and other consumers of equine activities from liability. The 14th Court of Appeals did not agree. The Court reasoned that the statute applied to all participants of equine activities, and that leading a horse to a paddock for feeding is an equine activity. Accordingly, Tisa was not liable for Brenda’s injuries resulting from her participation in an equine activity.

Brenda argued alternatively that because Tisa did not warn her that Jasper was an adopted, previously mistreated animal, Tisa willfully disregarded Brenda’s safety and the Equine Act did not offer immunity. Summary judgment evidence showed that mistreated horses may experience “flashbacks” of their mistreatment and may act unpredictable. But the Court held that the evidence was insufficient to create a fact issue because there was no explanation as to what exactly a “horse flashback” is. Nor was there an explanation why someone who held themselves out as qualified to care for horses needed warning of previous malnourishment or the danger of standing behind a horse. Finally, evidence showed Jasper to be well-behaved and “gentlemanly.” The Court held that immunity under the Equine Act still applied, even to rescue horses.

Fortunately for “Gentlemanly” Jasper, the Equine Act continues to provide horse owners with a shield from liability, ensuring that people like Tisa McKim will not be punished for rescuing and caring for abandoned and mistreated animals like Jasper. And for caretakers of horses, one would be wise to remember the immortal words of Christopher Stone: “Horses are uncomfortable in the middle and dangerous at both ends.”

The full opinion can be found at Young v. McKim, 373 S.W.3d 776 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).