E-mail alert 1-15-03

The McTexLaw Email Alert for January 15, 2003

New on The McTexLaw Business Owner’s Resource Center:

Asset Protection: First Things First

Creditor sues Debtor, and wins. Creditor later finds out that Debtor transferred all their assets to a corporation/trust/partnership. Creditor files a “turnover” motion on these entities asking the court to force those entities to turn over the assets to the judgment creditor. Can they get away with this? Not nearly that simply. Make the creditor run the gauntlet. They must first pass “go” before they collect their $200. Two recent cases spotlight the defenses available to judgment debtors in these scenarios, and at the same time teach collecting parties how to correctly collect a judgment. Click the headline to read about the creative efforts these judgment debtors took to keep their assets out of harm’s way. Bay City Plastics, Inc., et al., v. McEntire, Case No. 01-01-00687-CV, Texas Court of Appeals–Houston [1st Dist.], December 19, 2002; Maiz, et al., v. Virani, et al., Case No. 01-10292, U. S. Court of Appeals, 5th Circuit, October 23, 2002.

The Sanity Behind (Stupid) Disclaimers

The new Porsche Cayenne SUV commercial shows an RV driver who, as he drives down the road, gets up, leaves his seat and the steering wheel, and walks to the rear of the SUV to get a better look at the “all new” Porsche. Across the bottom of the ad appears the amazingly insightful phrase “don’t try this with your RV” (or something like it), leading to the obvious question, “why not?” Is anyone really that stupid? Who knows (some would say “depends on where that guy’s from!”). All I know is lawyers don’t like for their clients to be test cases. I put a disclaimer in my November 15, 2002, Email Alert, and I have a very extensive disclaimer on my firm’s website, www.mctexlaw.com/disclaimer.asp. How did I know what to write, and what not to write? Is there any sanity behind disclaimers? Click the headline to read about a December, 2002, case that explores this issue in the context of marketing a product. Coleman, et al., v. Cintas Sales Corporation, Case No. 04-02-00116-CV, San Antonio Court of Appeals, December 18, 2002.

New on The McTexLaw Commercial Real Estate Resource Center:

Preserving Your Ability to Collect When You Buy Damaged Property

The Senns bought some land in 1997 that had been used for oil and gas production since long about 1948. The Texas Oil Co. and Humble Oil & Refining Co. were two of the original operators. It doesn’t get any more “Texas” than that. By the 1990s, the land had all sorts of surface damages related to very active oil and gas production, all of which had ceased completely by the time the Senns purchased the land. Can the Senns recover money from Texaco, Humble n/k/a Exxon, and other companies who operated on this land, for damage they caused to the land over the last 40+ years, including damage to the aquifer system? Here’s a hint: I strongly suggest you not go buy some seriously damaged land with the idea to make your profit by suing not just one, but several really big oil companies with big pockets for its legal defense, in an effort to get compensated for that damage. Click the headline to read some tall but true tales about how standard boilerplate language in deeds deprived current landowners from collecting money for prior damage to their real property, even when the damage still exists today. The money’s in the details. Exxon Corp. v. Pluff, Case No. 12-01-000009-CV, Texas Court of Appeals, Tyler, May 31, 2002; Senn, et al., v. Texaco, Inc., et al., 55 S.W.3d 222 (Tex. App.–Eastland 2001).

WHY LAWYERS LIKE DISCOVERY

Get involved in litigation of any sort, and one of the first things you will be educated about is “discovery”. This one, three syllable word describes the usually second-most expensive part of litigation, second only to the trial itself. And sometimes discovery can be even more expensive than trial. Why do lawyers like discovery so much? Well, mostly, we all hold this secret hope that the facts will win the case for us, even overcoming any shortcomings we lawyers may bring to the table. The more cynical would say it’s to run up fees. Here are a few true stories recently submitted by lawyers and reported in the American Bar Journal that illustrate just how valuable discovery can be:

1. The Delaying Insurance Co.: Wife sued insurance company for refusing to pay on deceased Husband’s life insurance policies, claiming Husband committed suicide. Wife’s lawyer asked for the Company’s entire investigative file. Whoever copied the file first made copies, then marked out selected sentences with a black marker, and mailed those blacked out docs. Turns out, when you do it this way, the reader can still read what’s been marked out. And what was marked out in this case was a sentence from the in-house counsel to the claims manager, suggesting that the Company delay payment based on a claim of suicide, “even though there’s not really evidence of it.” When brought to the Company’s attention, it paid up on the policy the very next week. Moral: when blacking out text, make a copy of the document, black out the text, copy the document with blacked out text, and send the copy. I learned this at The Firm within days of graduating from law school.

2. Determined Traffic Cop: Defendant was driving at night, and got pulled over for a defective headlight. Defense Lawyer got the radio broadcast tape of the arrest. Officer A and Officer B, in separate cars but both with a view of the Defendant’s car, had this most helpful exchange just prior to the arrest:

Officer A: “I’m going to stop him, the headlight’s out.”

Officer B: “No, it isn’t.”

Oops. Not exactly video of Rodney King, but much more effective. And less violent.

3. Star Witness: Law student intern with the San Diego Public Defender’s Office called a law enforcement agency outside San Diego to get some information on the prosecution’s “star witness.” The detective answered the phone, asked him to hold, placed the phone down on the desk without hitting the “hold” or even “mute” button, and yelled across the room to another detective to ask if Star Witness’s name was familiar. In yet another “priceless” Mastercard moment, the reply was “Oh yeah, that’s the guy who skipped town because of that murder warrant.” And Star Witness quickly became Apprehended Witness, never taking the stand for the prosecution.

4. Delete What You Delete: Defendant denied under oath three times that he had represented himself to be a CPA. So Plaintiff’s lawyer showed Mr. Bogus CPA three deleted resumes with cover letters enclosing them, all claiming he WAS a CPA. The electronic versions of these docs were found in the “deleted” files of his computer hard drive. “Delete” does not always mean “deleted.” These days this stuff is tip of the iceberg; imagine an opposing party going through all of your Emails and Internet browser history......

5. Jailhouse Rock: Plaintiff claimed extensive injuries and ongoing health problems caused by a car wreck, plus a huge amount of lost wages. He went for it all: brain damage, post-traumatic stress disorder, anxiety, panic attacks, neck injuries, and asthma. Ever known a car wreck to cause asthma? Me neither. Suspicious Defense Lawyer ran a search of county, state and federal criminal histories, and found that the Plaintiff had been doing the Jailhouse Rock in Club Fed for the last 8 years. So much for lost wages. Then, his prison medical records contained all of his complaints–except, of course, brain damage, although the records did document a long history of drug abuse. So much for any chance of recovery.

So there you have it, five fantastic stories about the value of discovery, including several which were at the expense of a lawyer. So the next time your trial lawyer mentions discovery, help them figure out what to ask for, and hope for a miraculous smoking gun. We all know there’s a fox in the hen house, you’ve just gotta catch ‘em.

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