Hays McConn Articles RSS Feed

Hays McConn: Official Sponsor of Cristo Rey Jesuit

Gentry Burke — Tue, 10 Aug 2010 14:00:00 GMT

10-Aug-10 9:00 AM

Saving The Past

Gentry Burke — Mon, 01 Mar 2010 06:00:00 GMT

1-Mar-10 0:00 AM

Hays, McConn, Rice & Pickering, P.C. Honored for Its Service Efforts

Gentry Burke — Mon, 16 Nov 2009 16:00:00 GMT

The Houston-based law firm of Hays, McConn, Rice & Pickering, P.C. has recently been honored for the second year by South Texas College of Law for meeting the school’s Law Firm Challenge. Each of the firm’s attorneys who graduated from the downtown Houston law school donated to the school’s Annual Fund to support scholarships for deserving law students. Hays McConn instituted the Law Firm Challenge in 2008 by being the first law firm to donate to the Annual Fund at a 100% alumni level. The law firm’s efforts were featured in the law school’s recent Annual Report to Donors for 2008-2009.

In addition to the Law Firm Challenge, Hays McConn has been listed as an Equal Access to Justice Champion by the Houston Bar Association for the past three years for supporting the Association’s efforts to meet the legal needs of the poor in Houston and Harris County.

“Serving the profession and the public at large should be a goal of any law firm, and we are no different”, says shareholder David V. Wilson II.

Hays, McConn, Rice & Pickering, P.C. was founded in 1982 and serves clients’ general civil litigation and transactional needs from its offices in Houston, Texas and Las Vegas, Nevada.

STCL Dean, Donald Guter, and HMRP South Texas graduates.

16-Nov-09 10:00 AM

And The Defense Wins

Gentry Burke — Wed, 06 May 2009 16:00:00 GMT

The plaintiffs, Dudley James Stringer and Gildete M. Stringer, sued Rueby Custom Homes, who built and sold a home to them in Kingwood, Texas. The plaintiffs claimed that they should recover damages for breach of warranty, breach of contract and negligence. They sought damages for foundation repair, repair to their house and diminution in value. They contended that they should receive approximately $350,000 in damages. Rueby was successfully represented at trial by DRI members David V. Wilson, II (lead) and Michael M. Gallagher of Hays, McConn, Rice & Pickering in Houston, Texas. Rueby named R-Mac Engineering Company, Inc., the engineer, and Lakeside Plumbing Co., who provided plumbing services, as third-party defendants.

The case proceeded to trial on April 15, 2009. After the second day of trial, the judge granted a directed verdict in Rueby's favor as to all claims. Plaintiffs were represented by the Law Office of Michael A. Hirsch; R-Mac was represented by the Law Offices of Eric Yollick; Lakeside was represented by Kroger Frisby in Houston.

Rueby contended at trial that the plaintiffs had not established foundation damage attributable to the construction and installation of the home. Rueby also argued that activities after the house's construction, such as landscaping and the installation of a pool, caused or contributed to cause the plaintiffs' alleged damages. Plaintiffs' liability expert, Weldon Knight, acknowledged he could not testify regarding the building code applicable to the plaintiffs' residence. Further, following the arguments of counsel, the court excluded the plaintiffs' claim for diminution in value, based on the plaintiffs' untimely disclosure of their appraiser's opinions.

After Plaintiffs rested their case, Rueby then dismissed its claims against R-Mac, the engineer. Rueby and Lakeside Plumbing Co. then both moved for a directed verdict. The court granted the motions for directed verdict on April 16, 2009. The plaintiffs took nothing.

6-May-09 11:00 AM

Texas Lets Insurers Cover Punitive Damages

Gentry Burke — Sun, 01 Jun 2008 17:00:00 GMT

By Ruth E. Piller, Litigation News Associate Editor

In a unanimous but somewhat confined decision, the Texas Supreme Court has held that its state’s public policy does not prohibit insurance coverage of punitive damage awards for gross negligence in the workers’ compensation context. Fairfield Ins. Co. v. Stephens Martin Paving, LP.

In Stephens Martin, the state’s high court answered a certified question that had been referred to it by the U.S. Court of Appeals for the Fifth Circuit: Does Texas public policy prohibit a liability insurance provider from indemnifying an award for punitive damages imposed on its insured because of gross negligence?

The Texas Supreme Court answered in the negative, holding that public policy favors the freedom of contract. The court, however, limited its opinion to the workers’ compensation context.

Stephens Martin was brought by the survivors of an employee who was killed on the job. The defendant insurer issued the employer’s workers’ compensation policy, which included customary employer’s liability provisions. After winning workers’ compensation benefits, the employee’s survivors sued the employer for gross negligence, but sought only punitive damages.

The insurer brought a declaratory judgment action in federal court, asserting that it had no duty to defend or indemnify the employer because Texas public policy precludes insurance coverage for punitive damage awards.

After the district court denied the insurer’s summary judgment motion, the insurer appealed to the U.S. Court of Appeals for the Fifth Circuit, which certified the question to the Texas Supreme Court. That court, in turn, unanimously held that the state’s public policy does not preclude insurance coverage of punitive damages in the workers’ compensation context.

Coverage attorneys say Stephens Martin does not necessarily signal a major change in the way insurance policies will be underwritten or interpreted. Rather, they maintain that the decision is only the latest contribution to a decades-old body of law that has split over whether insuring punitive damage awards should be against public policy.

“The insurance coverage issue of whether or not a policy holder can be covered as a matter of public policy for punitive damages has been kicking around for a number of years,” says John E. James, Wilmington, DE, cochair of the Section of Litigation’s Insurance Coverage Litigation Committee. Most states have actually resolved the issue, he says, in favor of coverage in limited circumstances, although the states are not unanimous in their approach.

Indeed, in an extensive survey of the law, the Texas Supreme Court summarized the public policy of practically every jurisdiction that has addressed the insurability of punitive damages, finding that 45 states’ highest courts or legislatures have spoken to the issue. Of those jurisdictions:

25 states have generally indicated their public policy does not prohibit coverage for punitive damages;
Eight states prohibit coverage for exemplary damages;
Seven states permit coverage for such damages, but only when the insured’s liability is vicarious;
Three states allow insurance coverage of punitive damages in the uninsured motorist context but have not addressed the issue under other circumstances; and
Two states prohibit insurance coverage of punitive damages in the context of uninsured motorists but have not addressed the issue with respect to other forms of coverage.

Of the five remaining jurisdictions, four of them (which until Stephens Martin included Texas) have yet to address the insurability of punitive damages, and one state (Nebraska) prohibits the imposition of punitive damages.

In Stephens Martin, the supreme court observed that in light of the foregoing statistics, “the majority of states that have considered whether public policy prohibits insurance coverage of exemplary damages for gross negligence, either by legislation or under the common law, have decided that it does not.”

Christopher W. Martin, Houston, a member of the Section’s Insurance Coverage Litigation Committee, cautions that Stephens Martin should not be interpreted as a signal as to how the court would rule on the insurability of punitive damage awards outside the workers’ compensation context. The court’s “opinion does not signal a national trend in insurance coverage. If anything, it is the exact opposite.”

Those who say punitive damage awards should not be covered by insurance point to the policy considerations of punishing the wrongdoer, which is obviously diluted when the wrongdoer’s insurer is required to pay the damage award instead of the wrongdoer itself. However, as the Texas Supreme Court observed in Stephens Martin, there are competing policy considerations, such as the freedom to enter into a contract.

“I think to some extent the philosophy of the court is affected by the fact that our society has become more litigious and that punitives are often excessively awarded in situations even of gross negligence,” James says. “At least the majority of states think it is appropriate to protect a company by permitting it to buy insurance [to cover punitive damages] for a case in which there is a runaway jury.”

1-Jun-08 12:00 PM

Employee Emails Not Protected

Gentry Burke — Sun, 01 Jun 2008 14:00:00 GMT

By Ruth E. Piller, Litigation News Associate Editor

http://www.abanet.org/litigation/litigationnews/2008/june/0608_article_email.html

Employees who believe their email communications with their attorneys are privileged may actually be waiving the attorney-client privilege each time they send or receive email via computers owned by their employer, according to a growing body of law.

For example, in Scott v. Beth Israel Medical Center, a New York trial court recently held that emails that a physician sent to his personal attorney via a computer system owned by his employer were not protected by the attorney-client privilege. The physician was employed by the defendant hospital, which had an email policy mandating that computer and email systems could be used solely for business purposes and warning that employees had no expectation of privacy in any communication that was created, received, saved, or sent using the hospital's computers.

The physician argued the emails were privileged because they pertained to ongoing litigation between him and the defendant hospital. However, in rejecting the physician’s privilege claim, the court stated that the “effect of an employer email policy, such as that of [Beth Israel], is to have the employer looking over your shoulder each time you send an email. In other words, the otherwise privileged communication between [the plaintiff and his personal counsel] would not have been made in confidence because of the [Beth Israel] policy.” The court added that the physician had no reasonable expectation of confidentiality because the hospital had published a “no personal use” email policy, the hospital reserved the right to monitor all emails, and the physician knew of these policies.

Former Section Chair Gregory P. Joseph, New York City, warns that although lay people might perceive such a rule as unfair, attorneys should know otherwise. “When you’re at work, it’s not your computer,” he says. “If it’s clearly set out that employers have to be able to monitor what employees do . . . then it’s only logical that there is nothing confidential regarding what employees do using electronic communications at work.”

Many employers maintain access to their employees’ workplace electronic communications because they know they can be held liable for any wrongdoing by the employee in the workplace, Joseph notes. “Once the access is granted, the confidentiality is gone.”

Daniel J. Capra, New York City, reporter to the Judicial Conference Advisory Committee on Evidence Rules, says that in determining whether an expectation of privacy exists, a key concern is whether the employee had reason to know that his employer could review his emails. “I would think in most cases, the answer is ‘yes.’ If it’s a published policy, you are deemed to reasonably know there could be this oversight by employers.”

Capra says the legal principle espoused in the attorney-client privilege email cases is based on the same reasoning used by courts in determining that employees’ Fourth Amendment rights were not violated by employers who monitored their employee’s computer usage pursuant to published company policy.

By analogy, Capra says, emails sent to an attorney by a client whose employer has a no-personal-use policy for office emails and computers are tantamount to spoken conversations between the client and attorney that occur as if the employer were in the room. In such a case, there is no expectation of privacy because the attorney-client privilege would have been waived by the presence of a third-party (the employer), Capra says.

1-Jun-08 9:00 AM

Going Through the Motions: Steps to Consider Before Your Notice of Appeal

David Wilson — Fri, 16 Nov 2007 18:00:00 GMT

After an adverse verdict or ruling, the thoughts of clients and their counsel naturally turn to the court of appeals and the potential for relief in that forum. Hollywood movies and television will occasionally even show lawyers taking a verbal "notice of appeal" just after the jury verdict is announced. However, in the real world, careful thought should be given to filing a formal notice of appeal.

This is true for two reasons. First, trial courts often let issues which likely should be resolved as a matter of law go to the jury in hopes that the jury will "sort it out". In the logic of many trial judges, it is easier to justify denying relief as a matter of law after both parties have had their "day in court" than via summary judgment or directed verdict. Thus, a post-verdict motion will allow the trial court one last chance to grant relief on issues that could have been disposed of before trial but were not. Certainly, a motion to the trial court is a less time-consuming and less expensive means of prevailing than paying for a record and preparing a brief to the appellate court.

More importantly, however, is that in most jurisdictions, certain (if not all) appellate claims must be presented to the trial court after the verdict or judgment to be preserved for appellate review. For example, most Federal circuit courts have ruled that a party that did not file a renewed motion for judgment as a matter of law (formerly called a motion for judgment notwithstanding the verdict), waives claims of insufficiency of the evidence on appeal. Another important effect of some post-verdict or post-judgment motions is that they extend th deadline in which to file a notice of appeal. Under Federal Rule of Appellate Procedure 4(a)(4)(A)(v), a timely motion for new trial tolls the deadline to file a notice of appeal until after an order is entered disposing of the motion. Most state appellate systems also provide that certain post-judgment motions alter the deadline for notice of appeal.

In this regard, care must be taken as to the timing of the motion. Some circuit courts have help that filing a post-judgment motion after the verdict but before the entry of final judgment does not extend the deadline to file a notice of appeal. See e.g. Mosier v. Federal Reserve Bank, 132 F.2d 710, 712 (2d Cir. 1942). The logic of these circuits is that the entry of judgment as a matter of law or motion for new trial. Motions for new trial have another important role, because they are usual vehicles to bring matters to the attention of the trial court (and, eventually, the appellate court) that are outside the record, such as allegations of jury misconduct or newly discovered evidence.

Whether in state or federal court, a party who is considering seeking review of a verdict of judgment should first consult the applicable rules for post-verdict motions. Care should be taken to ascertain the deadline for such motions, as they are often different from the deadline to file a notice of appeal. A party is required be just as vigilante in urging these motions in a timely manner after the trial as it was in making objections during the trial.

16-Nov-07 12:00 PM

Limits on Discovery to Arbitrators and Dispute Resolution Providers

David Wilson — Fri, 16 Nov 2007 16:00:00 GMT

Everyone involved in the handling or defense of construction defect claims is aware that arbitration is a common method of "resolution" of such claims. However, their is an all too common sequel to the hard-fought arbitration hearing when it becomes time to confirm or enforce the award at the courthouse. Unhappy parties to the arbitration, in an attempt to fish for evidence of one of the few reasons an award can be disturbed, may attempt to serve discovery in the trial court to the arbitrator, the members of the arbitration panel, or the dispute resolution provider itself. The common target of this discovery is evidence of an allegedly undisclosed conflict of interest on the part of the arbitrator. When this happens, counsel for the successful party should be familiar with the wide-range of legal authority which indicates such discovery is improper.

For example, Courts have refused to allow the parties to an arbitration proceeding to call an arbitrator as a witness to testify by deposition or at trial. Courts have repeatedly condemned compelling arbitrators to testify, even though it may be difficult to prove actual bias or a lack thereof without their testimony. Woods v. Saturn Distribution Corp., 78 F.3d 424 (9th Cir.), cert. dism., 518 U.S. 1051 (1996); O.R. Securities, Inc. v. Professional Planning Assocs., Inc., 857 F.2d 742, 748 (11th Cir. 1988). In Lyeth v. Chrysler Corp., 929 F.2d 891, 898-99 (2d Cir. 1991), the Court stated that without clear evidence of impropriety, the losing party to an arbitration was simply engaging in a fishing expedition by requesting to depose the arbitrator to determine if there was some basis to pursue a claim of bias. See also in Re National Risk Underwriters, Inc., 884 F.2d 1389, 1989 WL 100649 (4th Cir. 1989) (stating that the losing party to an arbitrator absent can not depose the arbitrator absent an objective showing of fraud, misconduct or bias); Doctor's Associates, Inc. v. Qasim, 2000 U.S. App. LEXIS 22197 *6-7 (2nd Cir. 2000); Gearhardt v. Cadillac Plastics Group, Inc., 140 F.R.D. 349 (S.D> Ohio 1992);United Food & Commercial Workers International Union, AFL-CIO v. SIPCO, Inc.,1990 U.S. Dist. LEXIS 20210 (S.D. Iowa 1990).

Thus, in the absence of clear evidence of impropriety, a party is not entitled to discovery by way of deposing an arbitrator. Andros Compania Maritima, S.A. v. Marc Rich & Co., 1978); Nationwide Mut. Ins. Co. v. Home Ins. Co., 90 F. Supp.2d 893, 899 (S.D. Ohio 2000). Further party must use due diligence and cannot raise questions of bias or fraud only after the rendition of a decision by the arbitrator. Woods v. Saturn Distribution Corp., 78 F.3d at 430; Nationwide Mut. Ins. Co. v. Home Ins. Co., supra.

Arbitral immunity protects all acts of the arbitrator within the scope of the arbitral process. Olson v. National Assoc. of Securities Dealers, 85 F.3d 381, 383 (8th Cir. 1996). Arbitral immunity extends to the process of selecting arbitrators and to the actual arbitration proceeding. Id. See also Austin Mun. Securities v. Nat. Assoc. of Securities Dealers, 575 F.2d 676, 689-91 (5th Cir. 1985); Austern v. Chicago Board Options Exchange, Inc., 898 F.2d 882, 886 (2nd Cir.) cert. denied, 498 U.S. 850 (1990); Cort v. American Arbitration Ass'n, 795 F. supp. 970 (N.D. Cal. 1992).

There are strong policy reasons why the law recognizes a privilege that in effect relieves an arbitrator of the duty to testify. Because the parties involved in an arbitration are bound by the decision, there is a strong temptation by the loser to sue the arbitrator. The potential for undue influence of an arbitration are bound by the decision, there is a strong temptation by the loser to sue the arbitrator. The potential for undue influence of an arbitrator by a disgruntled litigant weakness the integrity of the arbirtal process - parties are less certain that a decision will be final and fair. Furthermore, exposing arbitrators to litigation because of acts committed in their official capacity could discourage other individuals from serving as neutral arbitrators. Exposing an arbitrator to discovery or requiring an arbitrator to appear in court to testify pursuant to a subpoena invites a fishing expedition that could unravel an arbitration decision.

In addition, responding to a subpoena imposes financial costs on the arbitrator in terms of producing documents and hiring attorneys to respond. Thus the policy behind arbitral immunity extends to discovery seeking the production of documents.

See Eder Brothers, Inc. v. Int'l. Brotherhood of Teamsters, Local 1040, et al., 416 A.2d 702 (Conn.Super.Ct. 1980)(subpoena duces tecum to chairman of arbitration panel quashed); see also Harter v. Iowa Grain Co., 1998 U.S. Dist. LEXIS 22855 (D.C.Dist. 1998) vacated on other grounds, 1998 U.S. App. LEXIS 2891 (D.C. Cir. 1998)(subpoena requesting documents from arbitration provider quashed and motion to compel production of those documents denied).

The purpose of arbitration is to provide an expeditious resolution to a dispute. Allowing challenges to the deliberation process would override all limitations on the review of arbitration awards. Arbitration would be transformed from a method of dispute resolution into another pretrial formality. For this reason, as a general rule, an arbitrator's testimony cannot be used to impeach an arbitration award. See Annotation, "Admissibility of Affidavit or Testimony of Arbitrator to Impeach or Explain Award," 80 A.L.R.3d 155 (1997). Frankly, this is the same policy behind Federal Rule of Evidence 606(b), which makes a juror incompetent to testify in order to impeach the jury's verdict. Participants in an arbitration are entitled to the same finality and certainty that parties to a jury verdict seek. Indeed, by contracting for arbitration in the first place, the parties manifested their intent to bargain for more finality and certainty than litigants in a jury trial. Thus, arbitrators should just be as protected from inquiry and discovery into their mental processes as jurors receive from Rule 606. Fortunately, most courts give them that protection and more.

16-Nov-07 10:00 AM