TORT LAW

FALL 2011

Italian Cowboy Partners, Ltd. v. Francesco Secchi, 341 S.W.3d 323 (Tex. 2011)

Fraud; Enforceability of Wavier of Reliance Clause as a Defense: The plaintiffs were tenants of property owned by the defendant-landlord and operated by the defendant-property manager. They became upset with persistent sewer gas odor and terminated the lease. During lease negotiations, the property manager made statements that the property was practically new and problem-free and the plaintiffs sought rescission and damages for the defendants’ fraud. The defendants contended that no fraud claim was possible because an essential element of a fraud claim was detrimental reliance upon a misrepresentation and the lease signed by the plaintiffs contained a waiver or disclaimer of reliance upon any statement outside the four corners of the lease document. The trial court ruled against the defendants and entered judgment for damages in favor of the plaintiffs. The court of appeals reversed and rendered a take-nothing judgment. Held: The Texas Supreme Court reversed the holding of the court of appeals and remanded the case for further consideration. The Court distinguished between merger clauses and disclaimer-of-reliance clauses holding that the former do not negate one’s right to sue for fraud upon later discovering a representation outside the contract was false and that it induced entry of the agreement. While the Court upheld the possibility that waiver-of-reliance clauses could be enforced, citing to its earlier decisions in Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) and Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. 2008), it found the language in this lease agreement to not be unequivocally clear enough to preclude a fraud claim. In essence, the lease language here appeared to be more like a merger clause than a waiver-of-reliance clause. Further, it found the circumstances of this case distinguishable from prior cases where such clauses had been found effective, principally because the contract here did not resolve an existing, known dispute (i.e., a settlement agreement) but was a contract that provided the inception for the parties’ relationship. The Court remanded to the court of appeals to consider the factual sufficiency arguments pertaining to the merits of the fraud claim accepted by the trial court.

Chenevert v. Springer., W.L. 2534192; LEXIS 13147 (5^th Cir. 2011)

Statute of Limitations; Sexual Molestation; Applicability of Discovery Rule: The plaintiffs sued alleging that they were sexually abused by the defendant-Roman Catholic priest ordained by a religious order of the Roman Catholic Church. The abuse occurred more than 25 years before the lawsuit was filed. The trial court, despite the “horrific abuse” alleged, granted the defendant’s summary judgment motion finding the claims to be time-barred. The plaintiff contended that the discovery rule should apply because of the repression of memories of such assaults. Held: The Fifth Circuit affirmed the grant of summary judgment finding that application of the discovery rule was inappropriate. In particular, the court noted that in the plaintiffs’ depositions, they admitted to having recalled the details of the abuse. Nevertheless, the plaintiffs proffered affidavit testimony from an expert witness who stated that losing conscious memory of traumatic events for awhile and then recovering them at a later date was a real phenomenon that should make application of the discovery rule appropriate. The court rejected this argument because the plaintiffs failed to testify that they had ever repressed memories of the events that gave rise to their suit. Note: This result is consistent with prior Texas Supreme Court precedent holding that the discovery rule should generally not be applied to cases of sexual molestation on a repressed memory theory because such claims were not both inherently undiscoverable and capable of objective proof. See S.V. v. R.V., 933 S.W.2d 1 (Tex. 1996).

Loftin v. Lee, 341 S.W.3d 352 (Tex. 2011)

Horseback Riding; Assumption of Risk Defense: The plaintiff, though an owner of horses, was an inexperienced rider. The plaintiff decided to go riding with her friend, the defendant, on one of the defendant’s horses (called “Smash”). While riding the trail chosen by the defendant through some mud, a vine hanging down from some trees touched Smash’s flank and the combination of the vine and the mud spooked the horse. Smash bolted, the plaintiff fell and fractured her vertebrae. In response to the plaintiff’s lawsuit against the defendant for negligently taking an inexperienced rider through a trail consisting of mud and vines, the trial court granted the defendant’s summary judgment finding that the risk was an inherent risk of the activity that had been assumed by the plaintiff. The court of appeals reversed. Held: The Texas Supreme Court reversed and rendered judgment for the defendant finding that the defense of implied assumption of the risk applied and precluded liability under these circumstances. The Texas Equine Activity Limitation of Liability Act, Tex. Civ. Prac. & Rem. Code § 87.0001--.005 expressly precluded liability for all inherent risks of equine activity. The non-exhaustive list provided by the statute of such inherent risks specifically included “the potential of a participant to act in a negligent manner that may contribute to injury to the participant of another.” Further, the statute declared another inherent risk to be “the unpredictability of an equine animal’s reaction to sound, a sudden movement, or an unfamiliar object, person, or other animal.” The plaintiff contended that when the particular risk was one that could have been avoided by the exercise of reasonable care, in this case choosing a different trail, the statutory protection did not apply. The Supreme Court held otherwise holding that that statutory protections should be broadly applied. If the Act only protected horseback riding sponsors who were not negligent, “[i]t would have been pointless for the Legislature to limit liability when none existed. We must presume that the Legislature intended more.”