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Texas Construction Contracts: Pay-When-Paid or Pay-If-Paid?

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There is a big difference between so-called “pay-when-paid” clauses and “pay-if-paid” clauses. Pay When Paid A “pay-when-paid” clause relates to the timing of payment, such that the subcontractor gets paid when the general contractor gets paid. The general contractor remains obligated to pay a subcontractor regardless of whether the general contractor is ultimately paid by the owner. If payment by …

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Texas Franchise Tax Challenged

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The Texas Supreme Court heard arguments this week in a case that could have significant implications on the Texas franchise tax. Nestle USA and two Texas-based companies, Switchplace LLC and NSMBA Relators, sued the State of Texas arguing the Texas franchise tax is unconstitutional.  The franchise tax charges one-half of one percent to wholesalers, but a full one percent to …

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Supreme Court of Texas to Issue Decision on Spoliation of Evidence

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The Surpreme Court of Texas heard argument in September 2012, in Brookshire Bros., Ltd. v. Aldridge, No. 12-08-00368-CV, 2010 WL 2982902 (Tex. App.—Tyler July 30, 2010, pet. granted) (mem. op.). The issues presented involve whether the trial court erred by admitting evidence of spoliation and including a spoliation instruction in the jury charge of a slip-and-fall case.   Aldridge slipped and …

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Texas Supreme Court Enforces “Differing Site Conditions” Clause

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In El Paso Field Services, LP v. MasTec North America, Inc., No. 10-0648, 2012 WL 6634023 (Tex. Dec. 21, 2012), MasTec entered into a lump sum contract with El Paso to construct a $ 3.6 million butane pipeline for El Paso.  The contract contained a “differing site conditions” clause, which shifted the risk for unanticipated conditions to MasTec. MasTec also …

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Texas Supreme Court Holds Chiropractor Had a Duty to Disclose

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In Felton v. Lovett, No. 11-0252, 2012 WL 5971207 (Tex. 2012), a patient, who suffered vertebral arterial dissection and stroke as a result of a neck manipulation, brought an action against a chiropractor, alleging that he failed to disclose risks associated with the neck manipulation procedure.  The jury found in favor of the patient and awarded damages against the chiropractor.  …

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Texas Supreme Court to Determine if Arbitration Clause in Trust is Enforceable

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  In Rachal v. Reitz, 347 S.W.3d 305 (Tex. App.–Dallas 2011, pet. filed), a beneficiary of a trust (the “Beneficiary”) sued the trustee (the “Trustee”), alleging failure to provide an accounting and breach of fiduciary duties.  The Trustee filed a motion to compel arbitration and to stay litigation, arguing that the Beneficiary must arbitrate his claims against the Trustee pursuant …

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A Primer on Expedited Actions Under Texas Rule of Civil Procedure 169

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In 2011, the Texas Legislature passed House Bill 274, which called upon the Supreme Court of Texas to promulgate procedural rules and amendments for expedited civil actions. The Supreme Court formed a task force to answer the legislature’s call, and the task force proposed several modifications to the Texas Rules of Civil Procedure. On November 13, 2012, the Supreme Court …

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Supreme Court of Texas Continues to Interpret Craddock in Favor of Defaulting Party

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On October 26, 2012, the Supreme Court of Texas released a per curiam opinion in Milestone Operating, Inc. v. ExxonMobil Corporation, No. 11-0647. ExxonMobil sued Milestone Operating, Inc. (“Milestone”) for breach of contract related to an oil and gas agreement. Milestone failed to appear and ExxonMobil took a default judgment against Milestone.   Milestone filed a motion for new trial challenging the service …

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Texas Supreme Court Rules Franchise Tax is Constitutional

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On October 19, 2012, the Texas Supreme Court held that the Texas franchise tax does not violate the Texas Constitution.  Nestle USA and two Texas-based companies, Switchplace, LLC and NSMBA Relators, sued the State of Texas arguing the Texas franchise tax is unconstitutional.  The franchise tax charges one-half of one percent to wholesalers, but a full one percent to businesses …

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Court Upholds Texas Open Meetings Law

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  On September 25, 2012, a federal appeals court ruled that the Texas Open Meetings Act is constitutional and that it encourages free speech and government transparency in Asgeirsson v. Abbott. The case began in 2005, when Alpine city council members were prosecuted for discussing city business in private emails. They sued saying the law was unconstitutionally vague and discouraged …