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Under the Texas homeowners association laws passed several years ago, HOAs are required to make the meetings of their respective boards “open.”  But open to who?  The public?  Can just anyone attend?  Can I bring a lawyer?  A local news crew?

            The answer is, just the owners (the persons who hold legal title to property within the residential subdivision) and their personal representatives are entitled to attend.   That’s it.  Regular and special board meetings must be open to all owners, subject to the right of the board to adjourn and reconvene in a closed section.   So if you’re an owner or the owner’s personal representative, you can attend the regular meeting, but if the board goes into a closed session, you’re not allowed in.

            What matters are appropriate for a closed, executive session?  Actions involving personnel, pending or threatened litigation, contract negotiations, enforcement actions, confidential communications with the HOA’s attorney, matters involving the invasion of privacy of individual owners, and matters that are to remain confidential by request of the affected parties and agreement of the board.  Everything else is fair game for a regular or special meeting.

            The new laws now also require that owners be given advance notice of any regular or special board meetings.  The date, hour, place and general subject matter have to be disclosed in the notice, along with a general description of any matter to be brought up in executive session.  The notice can be given in several ways.  It can be mailed, but the mailing must occur at least ten days before the meeting, but not more than sixty days before the meeting.  Alternatively the notice can be e-mailed to owners who have registered an email address with the HOA, or it can be posted on the HOA’s website.  These electronic forms of notice must be given at least 72 hours before the meeting.  An HOA can also provide notice by posting it in a conspicuous manner in a common area at least 72 hours before the meeting.

            Can any board meetings be held without the required notice to owners?  Yes, in limited circumstances.  Boards can meet, even by telephone or other electronic means, without prior notice, if each director may hear and be heard by every other director, or the board may take action by unanimous written consent to consider routine and administrative matters or a reasonably unforeseen emergency or urgent necessity that requires immediate board action.   But any  action taken without notice to the owners must be summarized orally  and documented in the minutes of the next regular or special board meeting.

If the board is going to consider or vote on certain issues, the board cannot hold the meeting without giving the required notice to the owners.  These issues include the imposition of fines, damage assessments, initiation of foreclosure or enforcement actions (except TROs or violations involving a threat to health or safety), increases in assessments or levying special assessments, appeals from denials of architectural control approval, and suspending a right of an owner before the owner has had the opportunity to attend a board meeting and present the owner’s position.  Since this list is mostly what HOAs do anyway, it’s obvious that in passing these laws the Texas legislature intended for all owners to have sufficient notice of board meetings where the owners’ important rights might be at stake.

What will become of my digital music, movies and books when I die?  I am getting ready for a trip.  Part of planning for the trip was deciding what audiobooks to download from Audible.com, what eBooks to download from Amazon, and what movies to download from iTunes.  While making these hard decisions, I paused briefly to reflect on how amazing it is that I can store all of these things in the cloud or directly on my iPad or iPhone.  I can now keep in my pocket a vast library of music, books and videos that would have taken up all of my cabinets and shelves in home only a few years ago.  (Speaking of which, the cabinets in my built-in entertainment nook are completely empty and have been for years.  My wife has considered storing the kids’ artwork in them).  While I was gazing into the half-distance, reflecting on the digital age, it suddenly occurred to me that I have not updated my will since my third son was born.  As my mind tried to cope with the sudden turn, the two thoughts collided and resulted in, “How will my boys divide up my digital library when I am dead?”  I am the holder of the password (I don’t think my wife knows it), and there are hundreds, if not thousands, of dollars in family entertainment locked in the cloud.

            Having discovered a gap in my legal knowledge, I did what any well-educated professional does when faced with a unique question, I googled it.  The majority of my search results were articles from 2012.  Each of the articles pointed out that the purveyors of digital entertainment have airtight user agreements that very clearly state that they are selling a non-transferable license.  If you cannot transfer it, then you cannot bequeath it.  My iTunes library is going to disappear when I die!  This cannot be right!  It’s not fair!

            The first page of my search results contained some interesting information.  Apparently, in September of 2012, there was a rumor that Bruce Willis was planning to sue iTunes for the right to transfer his iTunes library to his kids upon his death.  There were also quite a few articles pointing out that Bruce Willis denied the rumors.  I did get one result from 2014, an article on Slate.com by Ariel Bogle.  Ms. Bogle does an excellent job covering this topic.

            Ms. Bogle’s article, as well as others I found, point out that there are creative ways to get around this particular problem.  One such way, although a bit ridiculous from a practical standpoint, is to create a trust or corporate entity with which to buy digital entertainment.  Keep in mind, you could not transfer anything into the trust or corporation; you would have to create it, provide it with the capital, create online accounts, then purchase the digital materials in the name of the trust/corporation.  What fun!  The low-tech solution, though technically a breach of the user agreement, is to make sure that your heirs have your current username and password.  “To my first son of my only marriage, I do hereby bequeath ‘CowboysChamps1996’ and all of the rights, privileges and responsibilities connected therewith.”  I cannot wait to add something like that to the next will I draft.

            The only permanent solution to this problem will be through the enactment of legislation.  The iPod was first released in 2001.  I was 23 at the time and did not purchase an iPod for another six years.  My iTunes library has been increasing at an exponential rate over the past six years and is likely valued at well over $1,000.  That does not include the apps on my iPhone and iPad, nor does it include my eBook collection on my Kindle.  It should be safe to say that by the time I am in my 80’s, I will have over $10,000 worth of digital content.  That is a lot of money.  I and other old men who vote will have to become more politically active in our old age.  I will make it my personal mission to ensure that my iTunes library will carry on after I am dead.  I suspect that the laws will change before I die.  I would rather put my efforts behind introducing legislation rather than incorporate “Jacob’s iTune Library, Inc.”  Rock the vote!!!

A man walked into a lawyer’s office and inquired about the lawyer’s rates.  “$50 for 3 questions,” replied the lawyer.  “Isn’t that awfully steep?” asked the man.  “Yes,” the lawyer replied.  “And what was your third question?”

            Lawyers generally have a negative reputation in society.  Unfortunately, many people believe lawyers are all about the money.  While that certainly might be true for some lawyers, most of us never pursued a legal career to chase the almighty buck.  It’s like my father used to say about money and marriage.  “Son, there are two ways to make money in this world.  You can marry it or you can earn it; and if you marry it, you more than earn it.”  Sage advice, and it applies to lawyering as well.  Lawyers who are in it only for the money are usually unhappy and most of them don’t last very long.

            But we lawyers do have to make a living, and that means we have to get paid by someone.  That someone is usually the client.  But unfortunately in many instances the nature of the matter is such that it simply makes no sense to hire a lawyer, especially if the benefit to be gained does not outweigh the cost of obtaining it.  Why hire a lawyer to pursue a negligence claim that might be worth only $5,000, if it will cost $10,000 or more in fees to get a judgment?  I was liberal arts major in college, but even I can do that math.

            Fortunately in most actions involving homeowners associations, there exist mechanisms in the law to recover attorney’s fees from the losing party, whether that party be the HOA or the homeowner.   This often makes it worth the fight to pursue a claim that might not otherwise justify the hiring of a lawyer.

            One means of obtaining an award of fees against the opposing party is by requesting a declaratory judgment from the court.  Under the Texas Uniform Declaratory Judgments Act, a court is authorized to award reasonable and necessary attorney’s fees as are “equitable and just.” Under this Act, a court is not required to award fees, but it has the discretion to do so.  You often can enhance your chances of obtaining such an award if you can show that your client attempted to resolve the issue without having to file suit.

            Another method for obtaining fees can be found in the Texas Property Code.  In an action based on breach of a restrictive covenant pertaining to real property, the court “shall” allow to a “prevailing party” who asserted the action reasonable attorney’s fees.  The code’s use of the word “shall” means that an award of fees is mandatory.  The factors a court considers in determining the reasonableness of the fee include (1) the time and labor required, (2) the novelty and difficulty of the questions, (3) the expertise, reputation, and ability of the attorney, and (4) any other factor.

            Restrictive covenants are considered contracts, and as such they often contain provisions which authorize recovery of fees (at least for the HOA).  But even as to homeowners, fees can be awarded pursuant to Section 38.001(8) of the Texas Civil Practice and Remedies Code, which authorizes recovery of fees in actions founded on oral or written contracts.

            There exist other mechanisms in the law for recovering attorney’s fees, but those mentioned above are the ones most often relied upon by litigants in HOA matters.   If you’ve ever been successful in obtaining a fee award in an HOA matter using some other mechanism, I hope you will share it with me (the method, not the fee).  I’ll save for another day my thoughts on fee splitting among lawyers.

I have prepared a number of voir dires, opening statements and closing arguments.  During my preparations, I always have a moment when I stop and say to myself, “What are the rules?  What might I say in passing that would create reversible error?”  I outline my voir dire, opening statement, and closing argument, I rarely write down a complete sentence.  Half the time, I do not know the specifics of what I am going to say until it comes pouring out of my mouth.  As a result of my presentation style, I leave myself open to making a mistake if I do not, as part of my preparation, go back and refresh my memory as to the dos and don’ts of talking to the jury.  The following is an outline of my dos and mostly don’ts for speaking to a jury.  Please feel free to add to the list in the comments below.

DO:

• ask any question that is reasonably calculated to identify a bias, prejudice, or any other statutory disqualification from jury service.
• argue on your analysis of the evidence, and other permissible considerations, for any position or conclusion with respect to the matters stated.[1]
• use hypothetical facts to discover bias.
• ask a juror to commit to a position that is required by law.

DON’T:

• ask a question the answer to which may show that the prospective juror has been convicted of an offense which disqualifies him, or that he stands charged by some legal accusation with theft or any felony.[2]
  • I am fairly sure I have never done this because I simply do not know what it means. Best not embarrass a juror by asking about their personal criminal background.
• state or allude to any matter that you do not reasonably believe is relevant to the proceeding or that will not be supported by admissible evidence.[3]
• assert personal knowledge of facts in issue except when testifying as a witness.[4]
• state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused.[5]
• ask any question intended to degrade a witness or other person except where you reasonably believes that the question will lead to relevant and admissible evidence.[6]
• engage in conduct intended to disrupt the proceedings.[7]
• attempt to bind or commit a prospective juror to a verdict based on a hypothetical set of facts.
• isolate one specific fact of the case and ask whether the panelist could be fair, regardless of the other evidence, based on that specific fact.[8]
• ask the panelist if one party is starting out ahead after the panelist heard a summary of the facts of the case.[9]
• if you are representing the plaintiff, tell the panel that the defendant has insurance or the plaintiff has no insurance; if you are representing the defendant, tell the panel that the plaintiff has insurance.[10]
• ask a question for which the prejudicial effect outweighs the probative value.[11]
• advise the panel of the effect of their answers.[12]
• discuss evidence that will be inadmissible at trial.[13]

I must admit, my list is a combination of my notes from Practice Court, 2003, combined with O’Connor’s Texas Rules – Civil Trials.[14]  However, not much has changed since I originally put these two sources together.  Please share any additional Dos and Don’ts you might have in the comments below.

[1] Tex. Rules of Prof’l Conduct 1 3.04(c)(3).

[2] Tex. R. Civ. P. 230.

[3] Tex. Rules of Prof’l Conduct 3.04(c)(2).

[4] Id.

[5] Tex. Rules of Prof’l Conduct 3.04(c)(3).

[6] Tex. Rules of Prof’l Conduct 3.04(c)(4).

[7] Tex. Rules of Prof’l Conduct 3.04(c)(5).

[8] Hyundai Motor Co. v. Vasquez, 189 S.W.3d 743, 756-57 (Tex. 2006).

[9] Cortez v. HCCI-San Antonio, Inc., 159 S.W.3d 87, 94 (Tex. 2005).

[10] Ford v. Carpenter, 216 S.W.2d 558, 559 (Tex. 1949).

[11] Gulf States Utils. Co. v. Reed, 659 S.W.2d 849, 855-56 (Tex.App. – Houston [14^th Dist.] 1983, writ ref’d n.r.e.).

[12] Texas Empls. Ins. v. Loesch, 538 S.W.2d 435, 442 (Tex.App. – Waco 1976, writ ref’d n.r.e.).

[13] See, e.g., Travelers Ins. v. DeLeon, 456 S.W.2d 544, 545 (Tex.App. – Amarillo 1970, writ ref’d n.r.e.).

[14] O’Connor’s Texas Rules * Civil Trials (2015), pg. 733

Most liability insurance policies – whether they be commercial general liability, business owners, errors and omissions, homeowners or auto – require the insurance company to defend the policyholder against lawsuits where the plaintiff is seeking damages potentially covered by the insurance policy.

When the lawsuit gets filed, and the policyholder is served with suit papers, the policyholder is required to tender those suit papers to the insurance company and request a defense if it desires one.  When the insurance company receives such a request, it will often agree to provide the policyholder with a defense to the lawsuit through the attorney it hires (often referred to as panel counsel) while at the same time “reserving its rights.”  The insurance company can reserve its rights for a number of reasons, but it is usually because the insurance company has determined that one or more of the claims asserted in the lawsuit may not be covered by the insurance policy.  What the insurance company is actually doing is preserving its right to ultimately deny any responsibility to pay any judgment or settlement for damages that are not covered by the policy.

      As a lawyer who has practiced in the insurance arena for many years, I am often asked by policyholders whether they are required to accept the panel counsel offered by the insurance company that is reserving its rights. The answer I give is one that you will often hear lawyers give in a variety of circumstances:  it depends.  You see, when an insurer provides a defense under a reservation of rights, it creates a potential conflict of interest.  The potential conflict arises from the fact that the attorney hired to defend the policyholder owes an unqualified duty of loyalty to the policyholder, yet is getting his fees paid by the insurance company.  Consequently, the existence of this potential conflict will sometimes prevent the insurance company from providing a defense through its panel counsel and will give the policyholder the right to select its own attorney to defend it in the lawsuit, with the insurance company to pick up the tab.

            The Texas Supreme Court explained when such a right arises in a case called Northern County Mutual Ins. Co. v. Davalos, 140 S.W.3d 685 (Tex. 2004):

In the typical coverage dispute, an insurer will issue a reservation of rights letter, which creates a potential conflict of interest. And when the facts to be adjudicated in the liability lawsuit are the same facts upon which coverage depends, the conflict of interest will prevent the insurer from conducting the defense.

            In a subsequent case, the U.S. 5^th Circuit Court of Appeals clarified what it believed the Supreme Court meant when it used the words “facts to be adjudicated.”  See Downhole Navigator, LLC v. Nautilus Ins. Co., 686 F.3d 325 (5^th Cir. 2012). The Court held that the term “adjudicate” plainly means “to rule upon judicially.”  Accordingly,  a policyholder will have the right to select independent counsel to represent it in a lawsuit – at the insurance company’s expense – when the court or jury in the underlying suit will be required to decide the same facts upon which coverage depends.

            When might this occur? The court in Downhole Navigator provided a few examples. One is where the lawsuit alleges intentional wrongdoing and the policy contains an exclusion for intentional conduct.  Another example is where the underlying lawsuit raises a claim for breach of contract, and the insurer reserves the right to deny coverage based upon a breach of contact exclusion in the policy. Yet another example is where the insurer reserves the right deny coverage for damages taking place outside the contract period and the underlying lawsuit involves the issue of when damages took place. These were just some of the examples provided by the court in Downhill Navigator; there obviously may be others depending on the terms of the particular policy at issue and the factual allegations of the particular lawsuit.

            The right to select independent counsel can be a valuable right, especially when the policyholder already has competent counsel which it knows and trusts.  Therefore, whenever a policyholder is sued and the insurance company offers a defense to the lawsuit under a reservation of rights, it behooves the policyholder to carefully analyze whether it might be entitled to select independent counsel to represent it due to the existence of the potential conflict.  Case law in this area demonstrates that it is not always easy to determine whether the same facts to be adjudicated in the liability suit are the same facts upon which coverage hinges.  Consequently, it is always best to have an attorney well-versed in insurance matters conduct this analysis.