Sunday, December 23, 2007

2007-12-21 Texas Supreme Court Opinions

December 21, 2007 - Supreme Court decides three cases with opinions, including one attorney disciplinary matter:

In the Matter of Eugene X. Mercier, No. 06-1008 (Tex. Dec. 21, 2007)(per curiam)(attorney discipline, suspension, disbarment)
IN THE MATTER OF EUGENE X. MERCIER The Court, without hearing oral argument, reverses in part and affirms in part the Board's order regarding disbarment without prejudice to refiling. See Tex. R. Disciplinary P. 7.11.

Upon conviction of certain crimes, an attorney’s license must be suspended pending appeal. The Board of Disciplinary Appeals did so here, but also provided in the order that the attorney “shall be disbarred” if the conviction was affirmed. The petitioner appeals on various grounds from the latter part of the order. Because we agree the Board’s order of disbarment is premature, we reverse that portion of the order and affirm the rest.

Ford Motor Co. v. Ledesma, No. 05-0895 (Tex. Dec. 21, 2007)(Willett)(PI-auto, products liability, manufacturing defect, expert testimony, causation, jury charge error)

FORD MOTOR COMPANY v. TIBURCIO LEDESMA, JR.; from Bastrop County; 3rd district (03-03-00634-CV, 173 S.W.3d 78, 05/05/2005) The Court reverses the court of appeals' judgment and remands the case to the trial court. Justice Willett delivered the opinion of the Court.

("In this products liability case, Ford Motor Co. argues that the trial court reversibly erred in charging the jury by giving an incomplete definition of “manufacturing defect.” We agree. Additionally, we hold that a frequently submitted definition of “producing cause” should no longer be used. We remand the case for a new trial under a jury charge that reflects our applicable caselaw, including our decision today." * * * "Defining producing cause as being a substantial factor in bringing about an injury, and without which the injury would not have occurred, is easily understood and conveys the essential components of producing cause that (1) the cause must be a substantial cause of the event in issue and (2) it must be a but-for cause, namely one without which the event would not have occurred. This is the definition that should be given in the jury charge.")

Lasalle Bank Nat'l Assn. v. White, No. 06-1016 (Tex. Dec. 21, 2007)(per curiam)(agricultural homestead, home-equity loan, lien validity)
LASALLE BANK NATIONAL ASSOCIATION, A/K/A LASALLE NATIONAL BANK, AS TRUSTEE AND LASALLE NATIONAL BANK, AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 1999, SERIES 1999-2 v. LORAE WHITE AND GERALD GEISTWEIDT; from Mason County; 4th district (04-05-00548-CV, ___ S.W.3d ___, 05/03/2006) Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petitions for review and without hearing oral argument, the Court affirms in part and reverses in part the court of appeals' judgment and remands the case to the trial court.

("The Texas Constitution prohibits homestead property designated for agricultural use from being pledged to secure a home-equity loan, and mandates forfeiture of all principal and interest for loans so secured. In this case, a borrower obtained a home-equity loan secured by agricultural homestead property, disbursed a portion of the proceeds at closing to pay off constitutionally permissible purchase-money and tax liens (the “refinance portion”), and kept the remaining balance (the “cash-out portion”). The debtor defaulted on the note, and the trial court declared the entire debt, and the bank’s lien, invalid. A divided court of appeals affirmed. 217 S.W.3d 573, 579. We hold that the forfeiture penalty does not preclude the lender’s recovery of the refinance portion of the loan proceeds that were used to pay the debtor’s constitutionally permissible pre-existing debt because the lender was equitably subrogated to the prior lienholders’ interests. Accordingly, we affirm in part, and reverse in part, the court of appeals’ judgment." * * * ("Invalidation of a contractual lien does not preclude equitable subrogation. In Texas Land & Loan Co. v. Blalock, we held that, although a home-equity loan was invalid under the Texas Constitution, the lender was entitled to equitable subrogation to the extent of the prior valid purchase-money lien that the loan had been used to discharge. 13 S.W. 12, 13–14 (Tex. 1890). In Faires, too, we stated that “[o]ne who discharges the vendor’s lien upon lands, even the homestead, either by paying as surety, or at the request of the debtor, or at a judicial sale, which, for irregularities in the process, fails to convey the title, is entitled to be subrogated to the lien of the creditor to the extent of the payment so made.” 31 S.W. at 194 (emphasis added). And again in Martin, we reiterated that the refinancing lender which discharged a valid mechanic’s lien was entitled to equitable subrogation, even though such a lien on the homestead would otherwise violate the constitution. Martin, 88 S.W.2d at 469–70. Throughout our jurisprudence, we have stressed that the doctrine of equitable subrogation works to protect homestead property. Without equitable subrogation, lenders would be hesitant to refinance homestead property due to increased risk that they might be forced to forfeit their liens. The ability to refinance provides homeowners the flexibility to rearrange debt and avoid foreclosure. Benchmark, 919 S.W.2d at 661; Machicek, 170 S.W.2d at 717. Article XVI, section 50(e) does not abrogate this longstanding common law principle or preclude LaSalle Bank’s entitlement to equitable subrogation for the refinance portion of the loan proceeds that were used to extinguish White’s constitutionally permissible purchase-money and property-tax liens.")

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