Legal Document: DYNESIC TECHNOLOGIES, INC., vs. ALI MUTLU, et al

On August 10, 2017 a Letter Brief to Judge Hoffman Re RTP (Signed) (2-26-2019) - BRIEF FILED was filed involving a dispute between Dynesic Technologies, Inc.,, and Mutlu, Ali, Resinventures, Inc, Restech Environmental Products, Llc, Wheaton;, Arthur Whitney, for CNTR CNSMR COM DEBT in the District Court of Dallas County.

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FILED
DALLAS COUNTY
2/26/2019 4:46 PM
FELICIA PITRE
DISTRICT CLERK

CAROLYN SELLERS

SCHNEIDER MILLER REYNOLDS, P.C.
ATTORNEYS AT LAW
300 N. COIT ROAD, SUITE l 125
RICHARDSON, TEXAS 75080

Stualt M. Reynolds, Jr. Telephone (972) 479—1 1 12
E—mail: stuart@schneidlaw.com Facsimile (972) 479-1 113
February 26, 2019

Via E-File and Via Email rhonda.ninson@dallascountvmrg
Hon. Martin Hoffman
68th Judicial District Court
George L. Allen, Sr. Courts Building

600 Commerce Street
Dallas, TX 75202

Re: Dynesic Technologies, Inc. v. Ali Mut‘lu, Arthur Whitney Wheaton, Restech
Environmental Products, LLC and Resinventures, Ina; Cause No. DC-17-09789
in the 68th Judicial District of Dallas County, Texas

Your Honor:

At the hearing 0n February 25, 2019 on Plaintiff’s Motion t0 Strike the Designation of
Responsible Third Party, Your Honor asked the parties to submit letter briefs 0n an issue raised
at that hearing. Plaintiff has taken the position that the proportionate responsibility scheme of
Chapter 33 does not apply, contending that defendants are jointly and severally liable and
defendants seek only to have the responsible third party found liable for aiding and abetting the
defendants. First, it is important to note that Defendants have designated Scott Phillips as a
responsible third party With respect t0 every claim asserted by Plaintiff, because he isresponsible
for his percentage of harm, if any, for which recovery of damages is sought, under any theory, by
this Plaintiff. Defendants’ Motion for Leave to Designate Responsible Third Party pleaded that
“If Defendants engaged in any actionable wrong as alleged in the Petition, which is denied,
Phillips conduct is inextricably intertwined.” The responsible third party designation is not
limited t0 only Plaintiﬁ'k claimfor aiding and abetting. Thus, the inquiry under Chapter 33 0f
the CPRC is whether there is evidence for the juxy t0 assess (i) the liability of Phillips along with
the liability, if any, of Defendants for each claim, and (ii)whether a proportionate responsibility
question or questions should include Phillips for each claim. The Supreme Court of Texas has
unequivocally answered these questions “yes” as to all claims, including intentional torts.

In JCW Electronics, Inc. v. Garza, 257 S.W.3d 701 (Tex. 2008), the Supreme Court
examined the scope and application of Chapter 33. The Supreme Court noted, among other
things, that after 1995, the statute “deleted mention of speciﬁc theories 0f liability, providing
instead that the chapter should apply ‘to any cause ofaction based 0n tort in Which a defendant,
settling person, or responsible third party is found responsible for a percentage of the harm for
which relief is sought’.” Id. at 704 (emphasis added). Elaborating further, the Court noted that
“[w]hereas the 1987 version had expressly excluded intentional torts, the 1995 amendments
removed that exclusion.” Id. There is no question that Chapter 33’s scheme of proportionate
Hon. Martin Hoffman
February 26, 2019
Page 2

responsibility applies t0 all 0f the claims in this case, and similarly 110 question that Chapter 33
mandates that the jury examine the responsibility 0f a designated third party even if the plaintiff
did not assert a claim against him. See, e.g Villarreal v. Wells Fargo Brokerage Services, LLC,
315 S.W.3d 109, 124 11.6 (Tex. App.—H0uston [13‘ Dist] 2010, n0 pet); [macs v. Bishop, Inc.

Garza, 176 S.W.3d 618, 626 & 11.3 (Tex. App.—C01pus Christi 2005), r'ev’d 0n ofher grozmds,
257 S.W.3d 701 (Tex. 2008). Chapter 33 is inapplicabEe only Where a separate statutory scheme
applies. See, e‘gq Sozvllhwesl Bank v. Infbrmaiz'on Suppor/ Concepts, Ina, 149 S.W.3d 104, 110-
11 (Tex. 2004).

The Texas Pattern Jury Charges cite two cases for the proposition that fraud is not
included in the proportionate responsibility scheme. See, Mayes v. Stewart, 11 S.W.3d 440, 451—
52 (Tex. App.—H0ust0n [14th Dist] 2000, pet. denied) and Davis v. Estridge, 85 S.W. 3d 308,
311-12 (Tex. App.-Tyler 2002, pet. denied). Mayes and Davis were both decided before the
Supreme Court opinion in JCWcited above. Further, courts have easily distinguished these two
cases as they d0 not deal with proportionate responsibility but examine the actual knowledge
aspect 0f fraud in a contributory negligence setting. See, Isaacs, 239 S.W.3d 116—17.

Secondary sources note the strategy behind Chapter 33. “By designating an RTP who
shares the blame for the injury, the defendant can reduce its own percentage ofresponsibility. If
the RTP is joined by the plaintiff, the RTP becomes a defendant and can be liable t0 the
plaintiff.” O Connor’s Texas Rules Civil Trials 2018, p. 276 (citations omitted) In sum, Plaintiff
could join Phillips, but there is 110 need for Defendants t0 join Phillips as a party. Designating
Phillips as a responsible third party places his responsibility before the jury.

At the hearing the Couﬁ also inquired about a pattern jury charges for aiding and
abetting. We are not aware 0f a speciﬁc pattern jury charge for aiding and abetting. We d0 not,
however, seek a jury charge regarding aiding and abetting. That is Plaintiff’s burden as Plaintiff
has asserted a cause 0f action for aiding and abetting (but not against Phillips). We seek t0 have
the liability 0f a designated responsible third party submitted t0 the jury 0n each claim (including
the Plaintiff‘s claim 0f aiding and abetting) as allowed under Chapter 33 and we seek t0 have
Phillips’s proportionate responsibility placed before the quy for each claim where the evidence
supports that he may have caused “the harm for which recovery 0f damages is sought.” Joint and
several liability of Defendants does not change the analysis. Ifjoint and several liability is found
against Defendants, itwill only be joint and severai liabilityfor {harpercenfage eresponsibiliw
applicable f0 the Defendanfs, as found by the jury 0n each claim.

For the Court’s reference, we have attached PJC 115.36 which shows the standard
proportionate responsibility claim t0 be submitted after each liability question. PJC 115,36
speciﬁcally includes “Responsible Ray” who is not a defendant but a designated responsible
third party. Further, we commend t0 the Court the commentary presented with PJC 115.36.
PJC 115.36 DAMAGES

PJC 115.36 Proportionate Responsibility

If you answered “Yes” t0 Questions and [(mplz‘cable ques~
Zions] for more than one 0f those named below) then answer the following
question. Otherwise, d0 not answer the following question.

Assign percentages 0f responsibility only t0 those you found caused 01’ con-
tributed t0 cause the [harm] [damages]. The percentages you ﬁnd must total

100 percent. The percentages must be expressed in whole numbers. The per-
centage 0f responsibility attributable t0 any one is not necessarily measured by
the number 0f acts 01‘ omissions found.

QUESTION

For each person you found caused 0r contributed t0 cause the [harm] [dam—
ages] t0 Paul Payne, ﬁnd the percentage 0f responsibility attributable t0 each:

1. Don Davis %
2. Paul Payne %
3. Sam Setilor %
4. Responsible Ray %
Total 100 %

COMMENT
When t0 use. Tex. R. Civ. P. 277'requires a percentage question “[i]n any cause in
which the jmy is required t0 apportion the loss among the parties.” For causes 0f
action based 0n tort accruing 011 01‘after September 1, 1995, and in allsuch suits ﬁled
0n 0r after September 1, 1996, the trier 0f fact must determine the percentage 0f
responsibility 0f each defendant, ciaimant, settling person, 01‘responsible third party
with respect t0 each person’s causing 01‘contributing to cause the harm for which dam-
ages are sought. Tex. Civ. Prac. & Rem, Code § 33.003. The responsibility t0 be deter—
mined must arise from a negligent act 0r omission, a defective 0r unreasonably
dangerous product, or other conduct 0r activity that violates an applicable legai stan-
dard. Tex. Civ. Prac. & Rem. Code § 33.003.
Connnon-law claims based 011 tort. PJC 115.36 should be used if the case
involves “any cause 0f action based 011 tort”01'any action brought under the DTPA.
Tex. Civ. Prac. & Rem. Code §33.002(a). Chapter 33 has been applied t0 claims 0f
negligent misrepresentation, GaZZe, Inc. v. Pool, 262 S.W.3d S64, 571—72 (Tex.
App.—Austin 2008, pet. denied), and claims for intentional torts, Arceneaux v. Pinna-

498
DAMAGES PJC 115.36

ale Entertainmem, Ina, 523 SW3d 746, 749 (Tex. App.—H0ust0n [14th Dist] 2017,
110 pet.)(applies t0 intentional torts including assault).

COUHS ofappeals have differed 011 the circumstances under which fraud is subject

t0 appomonment. Compare Villarreal v. Wells Fargo Brokerage Services, LLC, 3 15

S.W.3d 109, 124 11.6 (Tex. Appr~Houst0n [Est Dist] 2010, no pet), [macs v. Bishop,
249 S.W.3d 100, 11647 (Tex. App.—Texarkana 2008, pet. denied), JCWElecﬂ'onics,
Inc. v.Garza, 176 S.W.3d 618, 626 & 11.3 (Tex. App.—C0rpus Christi 2005), rev’d 012
ofiier grounds, 257 S.W.3d 70} (Tex. 2008), (deHC Vénlures, LR v.Fast Trzrlclcing,
Inca, 94 S.W.3d 762, 773—74 (Tex. App.—San Antonio 2002, no pet), wirh Mayes v.

Stewart, 11 S.W.3d 440, 451—52 (Tex. App.—H0uston [14th Dist] 2000, pet. denied)
(holding that only actual knowledge 0f fraud—not “should have lmown” negligence
standaI‘d—wiil defeat claim for fraud), mid Davis v. Estria’ge, 85 S.W.3d 308, 3H—E2
(Tex‘ App.—~—Tyler 2002, pet. denied) (“Traditionally, negligence has never been a
defense t0 fraud”). Before the 1995 changes to the proportionate responsibility stat—

ute, intentional tort claims, including fraud, were not subject t0 apportiomnent. See
Stewart TirleGuaranty C0. v.Sterling, 822 SW2d 1,6 [1.7 (Tex. 1991), overruled in
purl 0n other grounds by Tony Gzrllo Motors I, LP. v.Chapa, 212 S.W.3d 299 (Tex.
2006); Trenholm v.Ralclsz; 646 S.W.2d 927, 933 (Tex. 1983). The current version 0f
the proportionate responsibility statute has done away with this statutory exciusion.

Statutory claims. Whether the chapter 33 proportionate responsibility question in
PIC 115.36 should be used in connection with a statutory claim depends on whether
the statute contains a separate and conﬂicting fault~3liocation scheme. In re Xerox

Corp, N0. 16-0671, 2018 WL 3077704, at *4 (Tex. June 22, 2018) (Texas Medicaid
Fraud Prevention Act not subject to chapter 33 apportiomnent). The supreme court has
found that chapter 33 does not apply t0 conversion claims under article 3of the UCC.
Sozlﬂrwesr Bank u Iiy’ormation Support Concepts, 1120., 149 S.W.3d 104, 110411 (Tex.
2004). The supreme court has found that chapter 33 does apply to breach 0f implied
warranty claims under article 2 Ofthe UCC. JCW Electronics, Ina, 257 S.W.3d at 702.

Intermediate appellate court cases state that chapter 33 applies t0 Texas Securities

Act cases. Villarreal, 315 S.W.3d at124 11.6. Intermediate cases state that chapter 33
does not apply t0 Texas Uniform Fraudulent Transfers Act cases. Challenger Gaming
Solzvztfons, Inc.
v.Earp, 402 SW3d 290, 299 (Tex. App.——Dalias 2013, 110 pet).

Use 0f “harm” 01' “damages.” Depending 0n the type 0f cause submitted t0 the
jury, the term “harm” 0r “damages” shouid be used as appropriate. See also the current
editions 0f State Bar 0f Texas, Texas Pattern Jury Chm'geS—General Negligence,
Intentional Personal Torts & Workers’ Compensation and Texas Pattern me
Cl?a;g33—-A/[011)1‘actice, Premises & Products for instances in which “injury” or
“occurrence” may be appropriate.

499
PJC l15.36 DAMAGES

Conditioned 0n I‘esponsibiiity 0f more than one person. PJC 115.36 is condi—

tioned 0n ﬁndings that the acts 01‘ omissions of more fhan one person caused the dam-

ages 0r injury, because otherwise no comparison is possible.

Multiple liability theories. When multiple liabiiity theories are submitted and
the parties dispute whether one theory is legally valid 0r supported by legally sufﬁ-
cient evidence, it may not be feasible t0 submit a single proponionate responsibiiity
question predicated 0n all See Romero
iiability theories. v. KPH Consolidazion, 1116,,

166 S.W,3d 2E2, 215, 225—28 (Tex. 2005) (reversible error t0 allow jury, in apportion—
ing responsibility, t0 consider claim 011 which there was no evidence).

Plaintiff submitted only if plaintiff violated legal standard. The plaintiff (Paul

Payne) should be submitted in this question only if the law governing the cause 0f
action provides an “applicable legal standard” by which the plaintiff’s conduct is mea-
sured and the jury is asked in a predicate question whether P(ml Payne violated that
standard. Tex. Civ. Prac. & Rem. Code § 33.003. Othelwise, the question should not
include the plaintiff.

If there ismore than one responsible person. If more than one responsible per-
son has been found liable in a liability question, separate percentage answers should be
sought for each person. For example:

1. Don Davis %'

2. Paul Payne %
3. Sam Senior %
4. Responsible Ray %
Settling persons. The proportionate responsibility statute requires the responsi-
bility 0f a settlingperson (Sam Senior) t0 be deteun'med by the trier of fact. Tex. Civ.
Prac. & Rem. Code §§ 33.003, 33.01 1. “Settling person” is deﬁned as a person—
who has, at any time, paid or promised to pay money or anything of 1110116—
tal'yvalue t0 a claimant in consideration 0f potential liabilitywith respect t0
the personal injury, property damage, death, 01'other harm for which recov—
ery 0f damages is sought.

Tex. Civ. Prac. & Rem. Code § 33.011(5). T0 include a settling person, that person’s
name must be included in a basic liability question.

ReSponsibIe third parties—causes 0f action ﬁled before July l, 2003. The lia-
bilityof a “responsible third party” (Responsible Ray) should be inquired into only if
that party is joined under former Tex. Civ. Prao, & Rem. Code § 33.004. Acts 1995,
74th Leg, R483 ch. 136, § 1 (SB. 28), eff. Sept. 1,1995. A“1‘esponsible third paﬂy” is
deﬁned in former Tex. Civ. Prac. & Rem. Code §33.011(6)V Acts 1985, 69th Leg,
R.S., ch. 959, §1 (SB. 797), eff.Sapt. l,1985, amended byActs 1987, 70th Leg, Ist

C.S., ch. 2, §2.07 (SB. 5), eff.Sept. 2, 1987;Acts 1995, 74th Leg, R.S., ch. 136, § 1

500
DAMAGES PJC 115.36

(SB. 28), eff. Sept I, 1995. Under fermer Tex. Civ. Prac. & Rem. Code § 33.003, ifa
responsible third party issubmitted in a basic liability question, the responsible third
party should also be submitted in the proportionate responsibility question. Acts 1987,
70th Leg, Est C.S., ch. 2, §2.06 (SB. 5); eff.Sept. 2, 1987, amended by Acts 1995,
74th Leg, R.S., ch. 136, § l (SB. 28), eff. Sept; i,1995.

Responsible third partieS—causes 0f action ﬁled 0n 0r after July 1, 2003. In
2003 the legislature changed responsible third party practice from one ijoinder t0
one 0f designation. Tex. Civ. Prac. & Rem. Code §33.004. The legislature aiso
expanded the category 0f responsible third parties. Tex. Civ. Prac. & Rem. Code
§§ 33.004, 33.011(6). “Responsible third palty’ means any person who isalleged t0
have caused 01‘contributed t0 causing in any way the harm forwhich recovery 0f dam-
ages is sought, whether by negligent act omission, by any defective
01' 01'unreasonably
dangerous product, by other conduct 01‘ activity that Vioiates an applicable legal stan—
dard, 0r by any combination 0f these.” Tex. CiV. Prac. 8c Rem. Code § 33.011(6). Sec-
tion 33.003(b) provides that a question regarding conduct by any person may not be
submitted t0 the jury without evidence t0 support the submission Tex. Civ. Prac. &
Rem. Code § 330030)).

Contribution defendants.

Inclusion in liability question. If there is a contribution defendant (Connie Con—
should be determined
tributor), that party’s liability £11a separate liabiiity question. See
Tex. Civ. Prac. & Rem. Code §§ 33.003, 33.01 1, 33.016. “Contribution defendant” is

deﬁned as “any defendant, countel‘defendant, 01‘third-party defendant from whom any
party seeks contribution with respect t0 any portion 0fdamages for which that party

may be liable, but from Whom the ciaimant seeks 110relief at the time 0f submission.”
Tex. Civ. Prac. & Rem. Code § 8.016(3).

Separate comparalive question necessary The responsibility 0f the contribution
defendant shouid nor be included in the question comparing the responsibility 0f the
plaintiff with that0f the other defendants. Tex. Civ. Prao. & Rem. Code § 33.016(c). A
separate comparative question isnecessaly. An example 0f a question 011comparative
responsibility of a contribution defendant is as follows:

If you answered “Yes” t0 Questions and [cmph‘ca—
ble questions] for more than one 0f those named below, then answer
the following question. Otherwise, d0 not answer the following ques-
tion.

Assign percentages only t0 those you found caused 01' contributed
t0 cause the [harm]. The percentages you ﬁnd must total 100 percent.
The percentages must be expressed in Whole numbers. The percent-
age 0f responsibility attributable t0 any 0116 named below is not nec-

essarily measured by the number 0f acts or omissions found.

501

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HOFFMAN, MARTIN Track Judge’s New Case

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February 26, 2019

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August 10, 2017

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