With today’s order list, the Texas Supreme Court issued opinions in three pending cases, granted rehearing in a petition that will be heard this fall, and also formally accepted the Fifth Circuit’s certified question in Severance v. Patterson case about the constitutionality of the Texas Open Beaches Act.

Sanctions in medical-malpractice suit even after nonsuit

Frances B. Crites, M.D. v. Linda Collins and Willie Collins, No. 07-0315 (per curiam) (DB)

After filing a medical-malpractice claim, the plaintiff missed the 120-day deadline for filing an expert report and then filed a voluntary nonsuit. Immediately after, the doctor filed a motion for sanctions under the statute. The trial court formally granted the nonsuit and then, later, denied the motions for sanctions after holding a hearing.

The doctor appealed the trial court’s decision to deny sanctions. The court of appeals affirmed, but did so on procedural grounds. It concluded that the nonsuit prevented the doctor from later asking for sanctions.

Today, the Texas Supreme Court reversed, holding that there was no procedural bar to a doctor asking for sanctions even after a non-suit. The Court noted that, if anything, the revisions to the statute in 2003 seemed to take away the plaintiff’s option to file a nonsuit without penalty.

The case has a few procedural wrinkles likely to interest appellate lawyers. I’ll have a short post about those later today (time permitting) or this weekend.

Damages in condemnation cases

State of Texas v. Bristol Hotel Asset Co., No. 07‑0896 (per curiam) (DB)

This condemnation case looked again at two of the categories of damages that have generally not been available — (1) temporary damages to a business caused by the inconvenience of the construction and (2) loss of property value due to diminished access to the remaining portions of a landowner’s property after part is taken.

The Court ultimately reversed the judgment and remanded for a new trial on damages, concluding that the landowner’s expert had improperly based his analysis on those improper factors.

First, the Court found that the expert had included temporary damages for the landowner’s inability to use some of its parking spaces during the construction. “We have held that lost profits or injury to a business are not compensable over and above the value of the land taken and the diminution in the value of the remainder tract.”

The expert had cleverly tried to include these temporary damages as within the “market value” of the remainder property by arguing that an immediate buyer would discount the property value to take into account the ongoing construction project. The Court rejected that attempt:

Whether treated as a separate item of temporary lost business revenues or profits, or as part of the calculation of fair market value of the remainder property, Bristol asked the jury to include in its assessment of damages the partial, temporary loss of parking spaces, a loss that is not compensable as a matter of law.

Second, the Court found that the expert had improperly included damages for diminished access to the remainder of the property. This error was more subtle. Instead of outright including an amount for these damages, the expert included this as one factor in choosing a “discount rate” for the property as a real estate investment.

The expert reasoned that the remainder of the property would be seen by potential buyers as a riskier investment, in part because of the diminished access. And, because the property would be seen as riskier, the expert concluded that “the discount or capitalization rate used in the present value calculation under the income approach should be increased to reflect a higher degree of risk that potential investors would perceive as a result of the condemnation.”

The Court held that this improper element of damages, which could not be included as a separate line item, also could not be quietly folded into the “discount rate” used in the formula.

Executors are not disqualified merely because of a good-faith dispute over their share of the estate

John Kappus v. Sandra L. Kappus, No. 08‑0136 (DB)

The opinion for a unanimous Court was written by Justice Willett. It begins:

This appeal concerns whether an independent executor’s alleged conflict of interest—here, a good-faith dispute over the executor’s percentage ownership of estate assets—requires his removal as a matter of law. Probate Code section 149C lists several grounds for removing an executor, but “conflict of interest” (either actual or potential) is not among them, and we refuse to engraft such a test onto the statute. Accordingly, as none of the conditions for removal under section 149C were met in this case, we reverse the court of appeals’ judgment and reinstate the trial court’s order denying the motion to remove.

The Court rejected arguments that an alleged conflict of interest with the executor would require their removal under Probate Code 149C(a)(2) regarding whether assets have been “misapplied or embezzled”; under Probate Code 149C(a)(5) regarding “Gross Misconduct or Gross Mismanagement”; or under Probate Code 149C(a)(6) regarding “legally incapacity.”

The opinion explains that having such a broad disqualification rule would not only depart from the statute but also “frustrate the testator’s choice of executor (particularly the common practice of appointing spouse-executors)” and would “impede the broader goal of supporting the independent administration of estates with minimal costs and court supervision.”

Certified Question Accepted

With today’s order list, the Court formally accepted the Fifth Circuit’s certified question in Severance v. Patterson, No. 09-0387 (DB). That means the case will be heard for argument after a new round of briefing is complete. (The Court’s order notes that Chief Justice Jefferson will not be sitting on this case.)

That case was discussed in more detail in this previous post.

Rehearing Granted

The Court also granted rehearing in Zachry Construction Corp. v. Texas A&M University, No. 07-1050 (DB), a case in which the Court originally denied review in January. The case asks if parties with sovereign immunity can nonetheless be treated as responsible third-parties in tort suits involving others.

No date for this argument has been set. (The Court’s order notes that Justice Willett will not be sitting on this case.)