INTERESTING CASES: April 6, 2016

INTERESTING CASES: April 6, 2016

Sallee S. Smyth

1.Miller v. Talley Dunn Gallery LLC, 2016 Tex. App. LEXIS 2280 (Tex. App. – Dallas March 3, 2016) (mem. opinion) (Cause No. 05-15-00444-CV)

H and W began dating in 1985 as teenagers. They began living together in 1994 and married in 2004. In 1999 W opened an art gallery with another individual. In 2011 this venture was dissolved and W opened her own gallery. H performed various work for the gallery maintaining phones and computers and editing gallery catalogs. In January 2012 H began accessing W’s cell phone at night while she was sleeping, taking screen shots of her text messages with an artist represented at the gallery because he believed she was having an affair. He also placed a digital recorder in her vehicle to record conversations which took place in her car and he recorded conversations between the parties which took place in their residence. H kept a log of W’s activities on his computer based on these recordings. W discovered these logs in February 2013 and filed suit for divorce against H. During the divorce proceedings W produced a General Ledger for the gallery under a confidentiality order issued by the associate judge. This ledger was to be used by H for valuation purposes in anticipation of mediation. The ledger contained confidential information regarding the gallery’s artists, clients, vendors, banking information, etc. The presiding judge later vacated the confidentiality agreement but enjoined the parties from disparaging one another. The parties reached an agreement for a division of property in mediation and the divorce was finalized in April 2014. In February 2015 W and the gallery sued H damages under Texas Uniform Trade Secrets Act (UTSA); Interception of Communications Act (ICA); Texas Theft Liability Act; Harmful Access by Computer Act (HACA); tortious interference with business relations; defamation and business disparagement; invasion of privacy and intentional infliction of emotional distress. These claims were brought because H sent letters and email to clients of the gallery, community leaders, members of the board at their daughters’ school, artists represented by the gallery, gallery employees, family members of gallery employees and a writer who reviewed gallery art gallery exhibitions. Within these communications H sent clips from the various audio recordings he made, photos of W’s texts, portions of the gallery general ledger and provided links to websites including one containing an article about female sociopathy. Within these communications H made statements alleging W had committed perjury, committed adultery, dissolved her original gallery venture without adequate compensation to her co-owner, suffered from mental health conditions and was a sociopath and psychopath, comparing W to Bernie Madoff, Bill Cosby, Ray Rice and Adrian Petersen. W sough a temporary injunction prohibiting H from using confidential information of the gallery and from interfering with her business, customers, artists and employees. H filed a motion to dismiss under CPRC Chapter 27 claiming that W and the gallery were public figures and his complaints were related to goods, product or service in the marketplace, or economic and community well-being. W responded to the motion and requested fees and sanctions under Chapter 27 claiming the motion was frivolous. The trial court denied the motion to dismiss, issued various injunctions and awarded reasonable fees. H filed an appeal from this interlocutory order alleging numerous grounds. Noteworthy to family law practitioners the COA found that nothing in the law limits the right of privacy to unmarried individuals and that a spouse’s surreptitious recording of the other spouse at a time when the other spouse believed they were in a state of privacy can support an action for invasion of privacy. H asserted that he had not violated ICA because he was a participant in the recorded conversations in the residence and thus he gave his consent, however the COA found that ICA statutes do not preclude a pure common-law claim for invasion of privacy and thus consent as a defense under the statute would not always apply. H further argued that screen shots of W’s phone did not constitute “access” as defined under HACA, however the COA found that H had to access her text messages in order to retrieve the data and then take pictures of them and that a cell phone qualified as a “computer” under the statute. H also argued that he has authority to access the information because the cell phone was community property however the COA found that owner as defined under HACA included one who had title or possession with the right to restrict access, determining that the phone was W’s, she had in the past protected it by password and H’s access to the phone at night while W was sleeping evidenced that this was her phone and he had no consent to use it. H further argued that his use of the general ledger was not protected by a confidentiality agreement at the time he disseminated the information, however the COA noted that he had worked for the gallery at one time and that employees are under a duty not to use trade secret information of their employers, which duty does not end when employment is terminated. The COA ultimately modified the injunction finding that one provision constituted an impermissible restraint on H’s freedom of speech and another which affected potential business customers was not supported by the evidence. The COA affirmed the award of fees and affirmed the balance of the injunction as modified.

2. In the Interest of M.S.C., 2016 Tex. App. LEXIS 2607 (Tex. App. – Dallas March 11, 2016) (mem. opinion) (Cause No. 05-14-01581-CV)

H & W divorced in TX in 2003 and W was given exclusive rights to establish the domicile of the parties’ children. The decree provided standard terms for health insurance coverage and obligated the parties to share in uninsured costs equally, providing language by which they could secure reimbursements from one another. In 2004 W moved to CA with the kids and H stayed in TX. W registered the decree in CA under the UCCJEA. In 2006 the TX divorce court deferred UCCJEA jurisdiction to CA but retained jurisdiction over child support issues. In 2008 the CA court modified custody of one child who had been diagnosed with autism and that child returned to live with H in TX. The CA court ordered that W was allowed to visit the child one weekend per month in TX and that F was required to pay the costs of transportation and accommodations for W to visit the child in TX three times each year. In 2012 F filed a motion to modify in TX, requesting child support from W, asking to modify the terms of visitation so that W paid for her own travel expenses associated with visitation and requesting a judgment against W for unreimbursed medical expenses around $125K. H filed a MSJ on the medical expenses, alleging that the expenses had been incurred and that there was no evidence that W had reimbursed H any amount. The trial court granted the MSJ but less than a month later held an evidentiary trial on all issues including the unreimbursed medical claim. The trial court granted H a judgment against W for almost $125K, ordered W to pay child support and ordered that W’s visits with the child in TX would be at mother’s expense. W appealed. As to the uninsured medical expense claim, W argued that she was never placed under an obligation to pay because H did not timely send her the information. The COA first noted that because H fully carried the burden of proof in an enforcement action, he had to offer establish that medical expenses had been incurred, that W’s obligation to pay had been triggered, and finally that W had not paid. Because he carried the burden, a “no-evidence” MSJ was not proper under these circumstances. Further, because H did not offer SJ evidence establishing his claim as a matter of law, the granting of SJ was improper. However, the COA noted that the error was harmless because the same claim was actually tried to the court before a final judgment was signed when evidence on the issue was admitted at trial. Thereafter the COA found that the terms of the decree were very specific regarding when W was obligated to pay and that was only if H sent her the designated documents (EOB, etc.) within the specified time (10 days). Because the evidence showed H had made demand upon W, in some cases, years later and no evidence established he had ever sent her the information within 10 days, the COA found that her obligation to make the payments was never triggered, requiring reversal of the $125K judgment. W further argued that the trial court had no jurisdiction to modify the terms of visitation relating to her travel expenses because the TX court had relinquished UCCJEA jurisdiction to CA and this jurisdiction included all matters concerning custody and visitation. The COA recognized that H’s suit to modify these expenses in TX was a collateral attack on the CA order and that such an attack may only be asserted when an order is void. In analyzing the issue the COA considered the definition of “custody determination” which excludes a decision relating to child support or “any other monetary obligation of any person.” TFC 152.102(3) Recognizing that no other appellate court had dealt with this issue under the UCCJEA, the COA considered a prior TX Supreme Court decision construing the UCCJA (In re SAV, 837 S.W.2d 80) as relevant to issues regarding visitation expenses. Noting that the obligation to pay visitation expenses is analogous to a claim for debt for which a TX court must have personal jurisdiction over the party to order it, the COA found that issues relating to W’s visitation issues was not governed by the UCCJEA and thus the CA court never had the authority to impose this obligation upon H in the first place, making the CA order void. The COA further noted that enforcing policies of comity and full faith and credit for other state’s orders was not required when the other state lacked subject matter jurisdiction to issue the order. The COA affirmed the TX order obligating W to pay her own travel expenses.

3. Mathis v. Benavides, 2016 Tex. App. LEXIS 2687 (Tex. App. – San Antonio March 16, 2016) (Cause No. 04-15-00555-CV)

H was declared legally incapacitated and Mathis was appointed his permanent guardian. Texas Community Bank brought suit against Mathis in her capacity as H’s guardian and against W and other defendants. While this suit was pending in civil district court, Mathis filed suit for divorce on H’s behalf against W in family court. Within the divorce proceedings, Mathis and W entered into a Rule 11 Agreement providing that Mathis would pay temporary spousal support to W in the amount of $12,500 per month until 30 days after the later of the final divorce or perfection of an appeal from the divorce. Sometime after entering into this agreement, Mathis ceased making the agreed payments to W. W filed a cross-claim against Mathis in the civil suit alleging breach of contract, asserting arrears of $100,000. W sought abatement of the divorce action alleging the district court had dominant jurisdiction. The divorce court denied W’s request however W obtained mandamus relief on that issue. W filed a MSJ in the civil court on her breach of K claim which was granted and thereafter severed from the remaining claims in civil court, making the breach of K judgment final. Mathis appealed from this judgment. While on appeal the District Clerk issued a writ of execution for $162,500 and Mathis filed a notice of supersedeas deposit in lieu of bond to suspend enforcement of the judgment. W filed a motion to strike claiming that the underlying obligation was for temporary spousal support which could not be suspended. The trial court granted W’s motion to strike and ordered the District Clerk to deliver the cash deposit to W in satisfaction of her judgment. Mathis filed a motion in the COA for an emergency determination regarding her ability to suspend the judgment. The COA noted several cases which have previously held that a supersedeas bond protecting against enforcement of a judgment upon divorce does not protect against enforcement of temporary orders for spousal maintenance (269 SW2 339; 550 SW2 730; 684 SW2 731). However the COA recognized that the order the subject of Mathis’ appeal was a final judgment for breach of contract damages and not an interlocutory order for spousal maintenance, noting further that the payments were based on an order rendered upon the agreement of the parties and not an order rendered under the authority of the Family Code. COA vacated order directing district clerk to deliver cash, determining Mathis had a right to suspend enforcement during appeal.

3. In the Interest of H.W.G., 2016 Tex. App. LEXIS 3109 (Tex. App. – Dallas March 25, 2016) (mem. opinion) (Cause No. 05-15-00114-CV)

F filed a suit to modify. It was undisputed that M had a history of drug abuse. The parties’ entered into an MSA which provided for a stair step approach to M’s possession and access, requiring M to accomplish four (4) steps to attaining unsupervised possession. At all times M was subject to random monthly drug testing at a specified facility and any negative test took M back to step 1 visitation. Step 1 was 3 hours supervised on specific days for 10 weeks. Step 2 was 6 hours unsupervised on specified days for 3 months. Step 3 was 9 hours unsupervised on specified days for 3 months. Step 4 provided additional possession with some overnights. M could not progress to the next step without completing the prior step. The MSA was signed in January 2014. In October the parties’ appeared for a hearing on F’s motion to enter an order. M’s counsel asserted that she had attended rehab and that she had already attained Step 2 status. F argued that M had failed to complete the drug testing as required by the MSA and thus remained at Step 1. The court signed a final order and 5 weeks later M filed a motion to enforce her visitation. At the enforcement hearing F claimed W remained at Step 1 while W claimed she was at Step 2. W admitted she had not complied with the drug testing as required by the order but that she had been tested in connection with her rehab and all testing was negative. The trial court recognized that the parties’ dispute over which Step applied created ongoing issues for the child’s visitation. The trial court denied the motion for enforcement but announced sua sponte it was entering temporary orders under TFC 157.374 (authorizing TO when serious question concerning child’s welfare exists in habeas corpus proceeding). The court declared that M was effectively in Step 4 and that she had a right to unsupervised possession under an SPO. The court signed an order to this effect, however it made no reference to TFC 157.374 and made no findings regarding the child’s welfare. F appealed and asserted that the trial court’s order impermissibly modified the MSA, granted relief neither party had requested and further that 157.374 did not apply. The COA considered the evidence supporting the trial court’s finding that M had reached Step 4 and determined that there was no such evidence. Further, the MSA requirement that M submit to random monthly drug testing was a central component of the parties’ MSA and the trial court’s order advancing M to Step 4 visitation effectively altered the terms of the parties’ MSA. The COA found an abuse of discretion and reversed the order. The COA decision did not address F’s argument re: applicability of 157.374, however the opinion states that neither party had requested the relief ultimately granted by the trial court, suggesting that if habeas corpus relief was even available and utilized to enforce possession orders, M had not requested it.