Contact: Osler McCarthy,
Staff Attorney for Public Information
(512) 463.1441 or
click for email
The first argument begins at 9 a.m. in the courtroom in Austin. Each side will have 20 minutes for argument.
This advisory serves only as an abbreviated guide to oral argument. Summaries are prepared by the Court’s staff attorney for public information and reflect his judgment alone on facts and legal issues and in no way represent the Court’s opinion about case merits.
06-0598
Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Co.
from Dallas County and the Fifth District Court of Appeals, Dallas
For petitioner: Werner A. Powers and Charles C. Keeble Jr., Dallas
For respondent: Joseph J. Borders, Chicago
The Supreme Court will hear arguments of whether prejudice required to deny coverage under ‘claims-made’ policy with prompt-notice provision. A principal issue is whether under a “claims-made” insurance policy covering company directors and officers the insurer must show prejudice to deny coverage because of the insured’s failure to notify the company promptly that a suit had been filed. The policy provision required notice “as soon as practicable” during the policy period, but not later than 90 days after the policy period or discovery period expires. Notice was given 11 months after the suit but before the 90-day period expired.
Briefs
Court of appeals opinion
Webcast
07-1059
Financial Industries Corp. v. XL Specialty Insurance Co.
certified question from the Fifth Circuit U.S. Court of Appeals
For appellant: Bart Wulff, Dallas
For appellee: Gabriela Richeimer, Washington, D.C., and Elizabeth Bloch, Austin
The Supreme Court will hear arguments of whether, in certified question, prejudice was required in ‘claims-made’ policy when policy stipulated notice as condition precedent to policy payment. Certified question: Must an insurer show prejudice to deny payment on a claims-made policy when the denial is based upon the insurer’s breach of the policy’s prompt-notice provision, but the notice is nevertheless given within the policy’s coverage period? XL Specialty’s policy required Financial Industries to notify it of any claim “as soon as practicable” and labeled the provision as a condition precedent to payment under the policy. Financial Industries gave notice of a lawsuit against it seven months after the suit was filed, but within the coverage period.
Briefs
Certified Question
Webcast
06-0911
Edwards Aquifer Authority, et al. v. Chemical Lime Ltd.
from Comal County and the Third District Court of Appeals, Austin
For petitioners: Mike Hatchell, Austin
For respondent: Robert B. Gilbreath, Dallas
The Supreme Court will hear arguments of whether act declared constitutional became effective when opinion was issued or when mandate was. The principal issue is whether the Edwards Aquifer Act became effective when the Court issued its 1996 opinion declaring the act constitutional in Barshop v. Medina County Underground Water Conservation District or when it issued the Barshop mandate. Chemical Lime challenged the authority’s denial of Chemical Lime’s water permit as an existing user after the authority ruled the application had been submitted too late. Alternatively, Chemical Lime argues, if it missed the deadline to file, it substantially complied with the deadline. In this case the Edwards Aquifer Authority rejected the company’s historical water use four years after the company filed it. The company filed its application 18 days after a deadline the authority set after the Court’s Barshop decision. The trial court determined the December 30, 1996, deadline was invalid and corrected it to mid-February 1997. The Austin Court of Appeals in this case held that the Edwards Aquifer Act became effective six months after the mandate issued, not six months after the Barshop opinion. The San Antonio Court of Appeals held in a separate case that the deadline properly was set from when the opinion issued.
Briefs
Court of appeals opinion
Webcast
07-0485
City of Waco v. Larry Kelley
from McLennan County and the 10th District Court of Appeals, Waco
For petitioner: David W. Holman, Houston
For respondent: LaNelle L. McNamara, Waco, and Richard W. Carter, Fort Worth
The Supreme Court will hear arguments of whether hearing examiner exceeded his authority by ordering a fired police officer to be reinstated at reduced rank. A principal issue is whether state law allows a hearing examiner to order temporary suspension and reduction in rank of an assistant police chief indefinitely suspended after a drunken-driving arrest. In this case Kelley had been indefinitely suspended after his arrest in 2001. Waco argues that the hearing examiner reviewing the assistant police chief’s discipline violated Texas Local Government Code section 143.053(e) because the examiner was limited, after finding the allegation to be true, to upholding Kelley’s firing. Section 143.053(e) gives hearing examiners three options in reviewing a police officer’s suspension: dismissal, temporary suspension or restoring the officer to previous rank. The trial court upheld the examiner’s decision to suspend Kelley temporarily and to reinstate him as a sergeant. In a split decision, the appeals court reinstated Kelley as a commander, a higher rank than the examiner decided, but a rank lower than assistant chief.
Briefs
Court of appeals opinion
Dissent (Gray)
Webcast
07-0581
In re Harold R. Schmitz, et al.
from Bexar County and the Fourth District Court of Appeals, San Antonio
For relators: Debra J. McComas, Dallas
For real party in interest: Kevin K. Green, San Diego
The Supreme Court will hear arguments of whether a lawyer’s letter challenging a proposed merger was sufficient as a pre-suit demand before a derivative-shareholder lawsuit. Principal issues are (1) whether a letter objecting to a merger agreement constituted a proper demand letter required to file a shareholder-derivative suit under Texas law; (2) whether irreparable injury was established that justified waiver of the 90-day waiting period before suit; and (3) whether an adequate remedy by appeal existed. In this case a shareholder sued Lancer Corp. board members after the board accepted a merger offer valued at $1 a share less than another offer, citing what the board considered to be more favorable sales conditions. Two months after the proposed merger’s announcement, an attorney faxed the company a letter attacking the merger. Three days later a shareholder sued to stop the merger and to declare board members breached their fiduciary duties by selling at an alleged inadequate and unfair price. Lancer shareholders later approved the merger. Board members then moved to dismiss the suit, arguing that Dillingham, the shareholder who challenged the merger, had not satisfied a statutory requirement under the Texas Business and Corporation Act article 5.14 to present her demands before filing her suit. The trial court denied the dismissal motion. On a petition for mandamus relief, to order the trial court to dismiss, the court of appeals rejected the petition.
Briefs
Court of appeals opinion
Webcast
07-0484
In the Matter of Rolando Caballero
from the Board of Disciplinary Appeals
For appellant: Royal K. Griffin, San Antonio
For appellee: Linda A. Acevedo, Austin
The Supreme Court will hear arguments of whether a fully probated felony conviction requires suspension of a lawyer’s license during the probation instead of disbarment. The issue is whether an attorney may be disbarred for a federal mail-fraud conviction when his sentence was fully probated. Under Rule of Disciplinary Procedure 8.05, an attorney convicted of an intentional crime that has become final must be disbarred unless, under Rule 8.06, the board suspends a lawyer for conviction of a serious crime for the length of his probation. Caballero argues that Rule 8.06 is mandatory in a case, like his, of a fully probated sentence.
Briefs
Rule of Disciplinary Procedure 8.05
Rule 8.06
BODA Decision
Webcast
05-0653
Gilbert Kerlin, et al. v. Conception Sauceda, et al.
from Cameron County and the 13th District Court of Appeals, Corpus Christi/Edinburg
For petitioners: Claudia Wilson Frost and Jeremy Gaston, Houston
For respondents: Jules L. Laird Jr., Houston
The Supreme Court will hear arguments of limitations issue in heirs’ claim to Padre Island land. In this case, a lawsuit by descendants of an original land-grant owner of Padre Island claiming interest in thousands of acres of the island, principal issues include (1) whether the statute of limitations was tolled by Kerlin’s absence from the state and (2) whether equity should bar the claim. Descendants of Juan Jose Balli — whose uncle was Padre Island’s namesake — sued Kerlin, claiming breach of contract, fraud and breach of fiduciary duty arising originally from Kerlin’s purchase from the Balli heirs of any Padre Island interests by quitclaim deed in the 1930s. The Balli claimants also sued two of Kerlin’s companies. Kerlin’s purchase reserved to the Balli heirs a fraction of gas and oil royalties, if any such royalty interest existed. Kerlin bought the interests by quitclaim deed based on the prospect that the Balli heirs might still have legal title, based on a rescinded sale of the land in 1830. Kerlin and his companies argue that the statute of limitations in this case cannot be halted because, though he was out of state since the quitclaim deeds were bought, his companies were Texas-based. And even if limitations were tolled, they argue, the heirs should be barred by laches from bringing the lawsuit because they waited too long to sue, to the point when almost all witnesses to the half-century-old dealings were dead. A jury awarded damages to the Balli heirs. The court of appeals affirmed.
Briefs
Court of appeals opinion
Webcast
07-0522
Benny P. Phillips, M.D. v. Dale Bramlett
from Lubbock County and the Seventh District Court of Appeals, Amarillo
For petitioner: Jim Hund, Lubbock
For respondents: John Smithee, Amarillo
The Supreme Court will hear arguments of whether Stowers doctrine applies to avoid statutory damages cap in med-mal award. The principal issue is whether medical-malpractice damages are capped under the Medical Liability Insurance Improvement Act when the doctor’s liability insurer may be liable on a bad-faith claim. In this case the trial court ruled that the insurance company’s refusal to settle the case brought it under an exception to the statutory damages limit. Phillips also contends that the plaintiff’s jury argument – that they should send a message and “buck the liberal treatment” of doctors by previous med-mal juries – was incurable. In his lawsuit Bramlett claimed his wife died after a hysterectomy because her surgeon did not check on her before leaving the hospital and did not check his voice mail to learn early enough that she suffered from internal bleeding after her operation. Phillips argues that the jury’s multi-million verdict should have been capped by the medical-malpractice statute because the exception to those limits for an insurer that imprudently rejects a settlement offer – the basis of the Stowers doctrine – would not apply because the judgment was against the doctor, not the insurance company. Even if it does apply to the insurer, he contends, Bramlett did not prove the insurer refused an offer an “ordinary prudent insurer” should have accepted. The trial court refused to cap the damages and the court of appeals affirmed.
Briefs
Court of appeals opinion
Dissent (Campbell)
Webcast