In this edition of Litigation Roundup, we have the details on a $60.6 million Tarrant County jury award, Oncor beats back a $10 million jury award on appeal in Dallas and the Department of Justice accuses an Austin man who founded a beverage company of swindling investors.
The Litigation Roundup is a weekly feature highlighting the work Texas lawyers are doing inside and outside the state. Have a development we should include next week? Please let us know at tlblitigation@texaslawbook.net.
Fort Bend County District Court
Ex-Superintendent Says Trustees Violated Nondisparagement Clause
The former superintendent of Fort Bend County Independent School District, Christie Whitbeck, has filed a lawsuit against the district and three of its trustees, alleging they violated a nondisparagement clause contained within the voluntary retirement agreement she signed.
The individual defendants named in Whitbeck’s lawsuit, which was filed Dec. 4 and brings claims for defamation and breach of contract, are Sonya Jones, David Hamilton and Judy Dae. Whitbeck alleges the retirement agreement required the district and trustees issue a unified statement about her retirement and refrain from disparaging her.
She alleges each of the trustees violated the agreement by making public comments about her that were reported in the media, including that if the details of what led to her voluntary retirement were made public, she wouldn’t be able to work in education again.
Ron Rainey of Tritico Rainey, who represents Whitbeck, issued a statement in support of his client’s professional reputation.
“Her performance was never the question,” he said. “Her record speaks for itself. This was about a small faction of the board putting their preferences ahead of the community Dr. Whitbeck served.”
According to court documents, Whitbeck signed a contract to serve as superintendent from September 2021 through September 2024. In July 2023, the board voted 7-0 to extend her contract through December 2026 and to raise her salary.
She entered the voluntary retirement agreement with the district Dec. 4, 2023.
The case has been assigned to Fort Bend County District Judge J. Christian Becerra.
Whitbeck is also represented by Christopher L. Tritico of Tritico Rainey.
Counsel information for the defendants wasn’t available Monday.
The case number is 24-DCV-323799.
Tarrant County District Court
Jury Awards $60.6M to Man Assaulted at Bar
A jury in Tarrant County recently determined Abel Rodriguez, who alleged he was assaulted by a bouncer at a bar in Arlington in September 2018, is entitled to about $60 million in damages — an award that included $55.5 million in punitive damages.
Rodriguez filed suit in August 2020 against bouncer Hasan Perryman, his employer Inner-Parish Security Corporation, Arlington Pavillion, which does business as Texas Live! and others. He accused Perryman of throwing him to the ground and slamming a glass container against the back of his head, causing him “severe physical and neurological injuries.”
The jury returned its verdict Nov. 27 and found Inner-Parish Security was 30 percent responsible and that Texas Live! was 70 percent responsible for the assault on Rodriguez. The panel awarded Rodriguez $5.1 million in compensatory damages.
Tarrant County District Judge J. Patrick Gallagher presided over the case.
Rodriguez is represented by Brian Butcher, Edward S. Gaytan and Charles M. Noteboom of Noteboom — The Law Firm in Hurst, Texas.
Arlington Pavilion is represented by Cynthia K. Hall of Law Offices of Gabriel S. Hendrickson. Inner-Parish Security and Perryman are represented by C. Timothy Reynolds and Jordan Fontenot of Steed Dunnill Reynolds Bailey Stephenson.
The case number is 096-319113-20.
Eastern District of Texas
Three Dallas-Area Women Indicted for Mortgage Fraud
The Department of Justice has accused three women of running a mortgage fraud scheme in the Eastern District of Texas that involved 88 properties and netted $8 million in sales.
Nicole Espinosa, 35, of Plano; Stephanie Smith, 44, of Midlothian; and Selena Baltazar-Hill, 28, of Dallas, have been indicted on charges of wire fraud and conspiracy to commit wire fraud affecting a financial institution. The charges carry a maximum sentence of 30 years in prison.
Espinosa, whom prosecutors allege also goes by the nickname “The Short Sale Queen,” is accused of working with Smith and Baltazar-Hill to identify properties that were in the pre-foreclosure short sale process and approaching the owners about listing the properties for sale.
Once that agreement had been signed, the government alleges the trio would submit fraudulent documents to various entities, including documents from purported buyers, to freeze the foreclosure process while they worked to find a legitimate buyer. According to court documents, the trio received about $390,000 in commissions and caused about $2.5 million in losses to the financial institutions involved.
The case has been assigned to U.S. District Judge Amos L. Mazzant.
Espinosa is represented by Michael Uhl of Dallas. Baltazar is represented by Aubrey Noonan of Rosenthal Kalabus & Therrian in McKinney. Smith is represented by Kevin Ross of Dallas.
Assistant U.S. Attorney Anand Varadarajan is prosecuting the case.
The case number is 4:24-cr-00251.
Western District of Texas
Judge Albright Sides with New Braunfels, Tosses Short-Term Rental Challenge
U.S. District Judge Alan Albright on Thursday once again sided with the city of New Braunfels, tossing a challenge brought by residents opposed to the city’s ban on short-term rental properties.
The first time Judge Albright granted New Braunfels a summary judgment win was in 2022. The lead plaintiffs — Rafael Marfil and Verge Productions — appealed to the Fifth Circuit, which issued a 2-1 ruling reviving the lawsuit in June 2023.
“The district court ordered dismissal by approving a few conclusory paragraphs in a magistrate judge’s recommendation,” the Fifth Circuit wrote. “This court’s relevant case law, however, indicates that some factual development may often occur in these cases, and that summary judgment may often follow. We make no prediction on the future course of this case, but based on the complaint’s well-pled allegations, plaintiffs are entitled to engage in discovery in an attempt to surmount the currently high bar for challenging local zoning ordinances under the Constitution.”
Judge Albright’s Thursday ruling came the same day he heard oral arguments on cross motions for summary judgment. A written order explaining the court’s decision had not been filed as of Monday afternoon.
The city has banned short-term rentals of homes that are zoned as single-family and two-family residential properties. In its motion for summary judgment, New Braunfels argued “municipal zoning should seldom be the concern of federal courts.”
“[M]unicipalities have great deference in making zoning decisions within their city limits,” the motion reads. “Short-term rentals — typically made to tourists and sometimes to partiers — can be rationally viewed as more likely to erode the residential character of a neighborhood, to increase crowds, traffic, trash, and noise, and to have other detrimental effects on the community.”
New Braunfels is represented by Greg Alan Waldrop and Ryan D.V. Greene of Terrill & Waldrop.
The plaintiffs are represented by J. Patrick Sutton of Austin and Chance Weldon, Robert E. Henneke, Christian G. Townsend and Clayton Calvin of the Texas Public Policy Foundation.
The case number is 6:20-cv-00248.
U.S. District Court of New Jersey
Austin Founder of Beverage Company Charged with Fraud
The Department of Justice on Thursday announced it was bringing a wire fraud lawsuit against an Austin man who founded the beverage company Wanu Water.
Todd O’Gara, 44, is accused of lying about his education and credentials as well as the size of purchase orders he received from retailers and about “major investments” from private equity firms in order to solicit $3.4 million in investments in his company. The criminal complaint against O’Gara alleges he began the fraud in August 2019, when his company was projecting about $3.77 million in losses, and continued through October of this year.
Prosecutors allege Gara doctored emails and term sheets in furtherance of the scheme. Wire fraud carries a maximum sentence of 20 years in prison.
Assistant U.S. attorneys Aaron L. Webman and Carolyn Silane in Newark are prosecuting the case. The case is being prosecuted in New Jersey, but court records indicate O’Gara was arrested in the Western District of Texas Thursday and made his initial appearance there before U.S. Magistrate Judge Dustin M. Howell.
Counsel information for O’Gara was not available Monday.
The case number is 24-8293.
Fifth Court of Appeals, Dallas
Panel Wipes Out $10M Award, Sides with Oncor
A tree trimmer who was awarded $10.8 million by a Dallas County jury in November 2022 that determined Oncor Electric Delivery Co. was mostly responsible for an electric shock that burned him and required amputation of his left hand won’t get to keep the award, an appellate panel recently determined.
“We conclude, based on the source of [Robert Louis] Hawkins [Jr.]’s injury, his pleadings and allegations, and the evidence presented at trial, that his case sounds in premises liability,” the panel wrote in rendering a take-nothing judgment in Oncor’s favor. “We further conclude that the theory of recovery submitted to the jury did not reflect the claim that was raised by the pleadings and the evidence. Because this claim was submitted to the jury under a general-negligence theory of recovery only, without elements of premises liability, the verdict cannot support a recovery in a premises defect case.”
Justices Nancy Kennedy, Ken Molberg and Maricela Moore Breedlove sat on the panel that issued the Dec. 3 ruling.
Anne Johnson of Tillotson Johnson & Patton, who represented Oncor in the appeal, issued a statement that she and her client are “gratified by this result.”
“There were multiple, independent reasons to reverse this judgment, including that it was submitted to the jury under the wrong theory,” she said.
A Dallas County jury had sided with Harkins 11-1, finding he was 20 percent liable for his injuries and that Oncor was 80 percent liable.
Oncor is also represented by Kelli Bills, who argued the appeal, and Megan Coker of Tillotson Johnson & Patton, Thomas S. Leatherbury of Thomas S. Leatherbury Law and Thomas F. Lillard and Robert K. Wise of Lillard Wright Szygenda Russell Wright.
Hawkins is represented by Steven R. Samples and James R. Ames III of Samples Ames in Hurst, Texas.
The case number is 05-23-00790-CV.