Commercial Litigation and Arbitration

Prelitigation Email from Counsel Admissible against Client as Admission

From Cleveland Regional Med. Ctr., LP v. Celtic Props., L.C., 2010 Tex. App. LEXIS 7942 (Tex. App. Sept. 30, 2010):

In issue three, appellants assert that the trial court erred by improperly excluding an alleged admission by Celtic that the Master Lease was in "full force and effect." Specifically, appellants argue that the trial court erred in excluding a string of emails between Celtic's prior counsel and CRMC's counsel, dated prior to the filing of the underlying lawsuit.

On March 17, 2005, counsel for Celtic sent a letter to Steve Courtier concerning the rights and obligations of the parties with respect to two separate properties owned by Celtic and leased by CRMC, "The East Dallas Lease" 2 and "The Sleepy Hollow Lease." With respect to the Sleepy Hollow Property, Celtic's counsel asserted that the initial term of the lease had expired, but made no reference to the May 14, 1999 Letter Agreement. CRMC's counsel responded to Celtic's letter by email dated May 24, 2005, indicating CRMC's position with regard to the two leases. CRMC's counsel asserted, among other things, that the Master Lease term automatically renewed, extending the Master Lease on the Sleepy Hollow Property until June 30, 2008. Counsel further stated as to the Master Lease, "[c]ontrary to your assertion in your letter, the lease is fully current, in full force and effect and there is no holdover occurring."

Celtic's counsel responded via email and asked for additional time to examine the leases in light of CRMC's analysis. After receiving no response from Celtic's counsel, CRMC's counsel sent another email regarding "Lease Issues with Cleveland Regional Medical Center" asking Celtic to advise CRMC of Celtic's position. In a response dated October 6, 2005, Celtic's counsel stated:

Sorry this drug out so long. I agree with your analysis in your May 24th e-mail. Please calculate the adjustment on the East Dallas lease for payment and I will do the same. I look forward to hearing from you.


Appellants contend that Celtic's counsel's statement in the email, "I agree with your analysis in your May 24th email," constituted an admission by a party opponent and equated to a concession by Celtic "that the parties' contractual relationship was defined by the Master Lease" as opposed to the Letter Agreement. ***

[W]e conclude the emails were admissible. While the attorney's statement was in the nature of an opinion rather than a declaration of fact, as long as the agent's statement is made during the existence of the employment relationship and concerns a matter within the scope of that employment, it is admissible against the principal, even if the employee had no authority to speak for the principal. See TEX. R. EVID. 801(e)(2)(D) [identical to Fed.R.Evid. 801(d)(2)(D)]***. Thus, the attorney's statement was admissible against his client, Celtic.

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