Error Preservation in Texas Civil Cases, August 25, 2018

August 25, 2018

Dear All:

The cases covered in this blog entry include:

A case in which the court held that the complaint was not sufficiently specific to bring it to the trial court’s attention, and another case where the complaining party did not tell the trial court why she was entitled to the discovery she sought

Ambiguity
Discovery

When the collective agreement governing the complaint made in the administrative process does not place the issue in the purview of the agency, and that issue may be first raised on the appeal to the trial court

Administrative Law

Your complaint on appeal must comport with the complaint raised in the trial court

Constitution

The record must reflect that you made your complaint in the trial court

Notice

Not often do courts of appeals analyze an error preservation challenge based on the specificity requirement of Rule 33.1. Here is a case in which the court held that the complaint was not sufficiently specific to bring it to the trial court’s attention, and another where the complaining party did not tell the trial court why she was entitled to the discovery she sought:

Ambiguity: “ We discern no contract formation challenge on this record, and we do not believe that we are within our power to address the effect of the ambiguities for two reasons. First, counsel never actually challenged the arbitration agreement on formation grounds in the trial court, and even under a liberal view of the record, counsel’s stray references to ambiguity in pleadings and oral argument at the hearing cannot be expanded to embrace a formation challenge that is cognizable on appeal.
i. Double Eagle’s Appellate Argument Does Not Comport with Its Argument in the Trial Court
. . . . we [*27] can only affirm the trial court’s judgment on a contract malformation ground if Double Eagle actually advanced a contract malformation ground in resisting arbitration in the trial court. Bray, 499 S.W.3d at 102 (affirmation of denial appropriate only on those grounds advanced in the trial court).

This dissent next maintains that even if the burden was on Double Eagle, this Court can entertain appellate argument related to contract malformation because Double Eagle “indirectly” alerted the trial court to the contract malformation issue by referring to the arbitration clause’s ambiguous and conflicting terms in its pleadings and at the motion to compel hearing. We do not find Double Eagle’s fleeting references to the ambiguity to be enough to place the issue of contract malformation before the trial court. . . . . None of these three defensive grounds asserted by Double Eagle in the trial court ever raised any formation issues; rather, they raised only affirmative defenses to enforcement (ground one and two) and interpretational issues (ground three). And while we look to the content of the argument in a pleading and not just the subject headings in deciding what issues were before the trial court, Double Eagle only mentioned the ambiguity in passing twice.

First, Double Eagle mentioned the ambiguity in the Background portion of factual recitals when it characterized the arbitration clause as being “ambiguous, onerous, and internally inconsistent[.]” The ambiguity is also mentioned in passing in Double Eagle’s response as part of an argument Double Eagle makes about Ridge having waived the right to arbitrate by substantially invoking the judicial process. . . .

Although Double Eagle mentioned the ambiguity, Double Eagle never once argued in its pleading that the ambiguity dealt with material terms or that the conflicting provisions otherwise invalidated the arbitration agreement. The reference to ambiguity occurred in a discussion of prejudice resulting from a purported waiver of the right to arbitrate, and even then, it appeared only in the context of a general complaint about how the arbitration rules would not provide Double Eagle with as much discovery as the Texas Rules of Civil Procedure. The gulf between this argument and the argument advanced on appeal regarding contract malformation based on a lack of a meeting of the minds is too wide to be bridged. The conceptual connection between the trial argument and the appellate argument is simply not there.

Counsel’s arguments during the Tipps hearing were also not enough to alert the trial court about any potential contract malformation issues. At the hearing, counsel for Double Eagle focused his argument heavily on the subjects of fraudulent inducement and [*31] unconscionability . . . .[But b]eyond this comment that the ambiguity was “interesting,” counsel never again returned to the issue of the arbitrator’s identity. Apart from using the poor draftsmanship of the arbitration agreement to make a brief rhetorical point to the trial court, the legal effect of these conflicting provisions was never discussed at all. Instead, Double Eagle focused its argument on the inherent unfairness of the transaction as a whole from a substantive and procedural standpoint, repeatedly arguing that the McDaniels transaction was a “scam” and a “bait and switch” that resulted in the transfer of an oil-and-gas interest for below-market value. While that argument does embrace fraud-based or unconscionability-type challenges to the arbitration agreement, it does not subsume a meeting-of-the-minds or formation argument.

. . . .

Legal argument is needed to determine whether this ambiguity is fatal to the entire contract or an interpretational bump in the road. Legal argument related to that distinction is what is lacking on this record. And the lack of legal argument in the trial court on that specific point ties our hands on appeal and prevents us from addressing the merits of this specific controversy. A complaint must be made with sufficient specificity before it is considered to be before the trial court. Tex.R.App.P. 33.1. We cannot conclude that Double Eagle raised the issue of contract malformation based on a meeting-of-the-minds failure with sufficient specificity so as to alert the trial court and opposing counsel that this was a basis for resisting arbitration. Consequently, we cannot entertain Double Eagle’s arguments related to formation problems on appeal because formation arguments were never advanced [*34] by Double Eagle in the trial court as a basis for denying a motion to compel arbitration. The appellate argument does not comport with the trial argument.” Ridge Nat. Res. v. Double Eagle, No. 08-17-00227-CV, 2018 Tex. App. LEXIS 6781, at *23-34 (App.—El Paso Aug. 24, 2018)

Discovery: “As to the sub-issue concerning discovery, Kelly has [*11] failed to preserve any error. First, as an appellant, Kelly has failed to bring before this court the record of any hearing before the trial court. Secondly, the only record reference cited in Kelly’s brief is a reference to a Motion to Reconsider Letter Ruling of July 5, 2016, wherein Kelly asked the trial court to reconsider its decision to delay “formal discovery” until after she was given the opportunity to replead and respond to the defendant’s motion to dismiss. No where does Kelly present any manner of offer of proof or bill of exceptions to enlighten the court as to just what discovery was reasonable and necessary.HN8 In an appeal from a discovery or evidentiary ruling, the appellant must preserve error by presenting a “timely request, objection, or motion,” setting forth the basis of the objection and obtaining a ruling from the trial court. Tex. R. App. P. 33.1. In the absence of such a request and ruling, Kelly has waived any argument pertaining to the denial of discovery.” O’Shea v. O’Shea, No. 07-16-00321-CV, 2018 Tex. App. LEXIS 6530, at *10-11 (App.—Amarillo Aug. 17, 2018)

Sometimes, courts have held that a party appealing from an administrative agency’s ruling has waived an issue by not raising it before the agency. But keep in mind that when the collective agreement governing the complaint made in the administrative process does not place the issue in the purview of the agency, and that issue may be first raised on the appeal to the trial court:

Administrative Law: “The Commissioner’s argument conflates concepts of waiver with concepts of jurisdiction. [*22] It may be the case that a party who fails to raise a particular complaint with a school district in accordance with an applicable local grievance policy will not have a record to present to the Commissioner that can support the complaint. While the party may be found to have waived that complaint or failed to preserve it for a subsequent appeal to the Commissioner, it does not follow that the Commissioner lacks jurisdiction over the appeal itself. In fact, in his brief in this appeal, the Commissioner cites Texas Rule of Appellate Procedure 33.1, which addresses preservation of error, as support for the proposition that Solis was required to “first present her claim to the school district (the initial decision-maker) before raising it on appeal to the Commissioner.” See Tex. R. App. P. 33.1 (preservation of appellate complaints). The Commissioner’s brief also states that Solis “failed to preserve her claim and the Commissioner properly dismissed it.” We will, therefore, consider whether Solis was required to seek relief from the board of trustees in order to preserve for Commissioner review her claim that she was aggrieved by MCISD’s decision to discontinue her employment despite it having failed to give her notice of proposed nonrenewal [*23] of a term contract governed by the TCNA. See HN14 Tex. Educ. Code § 21.206(c) (failure to give notice within time specified constitutes election to employ teacher in same professional capacity for following school year). . . . the Commissioner is correct that an employee filing a “complaint” must comply with the requirement that the complaint identify the policy, statutory provisions, or administrative [*25] regulations alleged to have been violated. However, DGBA (Local) specifically excludes from its purview certain categories of employee complaints that are to be submitted in accordance with other district policies, including “[c]omplaints concerning the proposed nonrenewal of a term contract issued under Chapter 21 of the Education Code, which shall be submitted in accordance with DFBB.” Thus, while Solis’s complaint that her reassignment from an executive director position to an assistant principal position was retaliation based was subject to the requirements in grievance policy DGBA (Local), her complaint regarding MCISD’s nonrenewal of what she alleged to be a term contract was not.” Tex. Comm’r of Educ. v. Solis, No. 03-18-00245-CV, 2018 Tex. App. LEXIS 6636, at *21-25 (App.—Austin Aug. 22, 2018)

Your complaint on appeal must comport with the complaint raised in the trial court:

Constitutional: “In his first issue, Cody argues that the trial court violated his rights under the U.S. Constitution by denying his request for a mistrial because he was not allowed to participate beyond the first morning of jury selection. . . . While Cody’s counsel moved for mistrial, at no time during the trial did counsel move for mistrial or object to proceeding with trial specifically on constitutional grounds nor was a constitutional argument raised in a motion for new trial. Accordingly, Cody has failed to preserve his alleged constitutional violation for appellate review.” In the Interest of P.L., No. 07-18-00157-CV, 2018 Tex. App. LEXIS 6770, at *4-8 (App.—Amarillo Aug. 23, 2018)

The record must reflect that you made your complaint in the trial court:

Notice: “A party who receives late notice of a hearing must preserve the complaint in the trial court by bringing the inadequate notice to the trial court’s attention by objecting to the hearing going forward or by moving for a continuance. See Low v. Henry, 221 S.W.3d 609, 618 (Tex. 2007). Elijah asserts on appeal that he “objected in open court” that he had not had adequate time to gather information, but we have no reporter’s record of the summary-judgment hearing, and the clerk’s record [*10] does not show that the Nelsons objected to the hearing or sought a continuance.” Nelson v. Go Green, LLC, No. 14-17-00571-CV, 2018 Tex. App. LEXIS 6709, at *9 (App.—Houston [14th Dist.] Aug. 23, 2018)

That’s all for now.  I hope this helps.

Yours,

Steve Hayes

shayes@stevehayeslaw.comwww.stevehayeslaw.com

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