Dallas Appeals Court Orders Jury Verdict Reinstated in High-Stakes Fraud Case

Appellate panel says alleged courtroom misconduct was not severe enough to erase a jury’s decision

DALLAS–(BUSINESS WIRE)–The Texas 5th Court of Appeals has ordered a Dallas trial court to vacate its order granting a new trial and to reinstate a jury verdict in a long-running, fraudulent-transfer dispute, concluding that the trial court abused its discretion by setting aside the verdict based on alleged incurable jury argument.

The ruling directs the trial court to vacate its prior new-trial order and restore the verdict, reaffirming the constitutional role of juries and clarifying the narrow circumstances under which alleged attorney misconduct can justify a do-over.

“This opinion reinforces a critical guardrail in Texas civil practice,” said Chad Baruch, managing shareholder of Johnston Tobey Baruch and lead appellate counsel. “Trial courts have broad discretion, but that discretion stops short of erasing a jury’s work absent truly extreme and incurable conduct. The court made clear that the standard is demanding by design, and for good reason.”

The case arose against the backdrop of related federal litigation involving some of the same parties and trial counsel, including the widely noted decision by the U.S. Court of Appeals for the 5th Circuit in Clapper v. American Realty Investors, which ordered a new trial based on attorney misconduct. In this state court proceeding, however, the three-judge Dallas appeals court panel concluded that the record did not support extending those findings to justify setting aside a jury verdict under Texas law.

“This ruling protects the integrity of the jury system while still condemning unprofessional conduct,” said shareholder Robert Tobey. “The decision draws a clear line between advocacy that can be addressed in real time and the extraordinary step of setting aside a verdict altogether.”

The case is In re Pillar Income Asset Management, Inc., et al., No. 05-25-00205-CV at the Fifth Court of Appeals of Texas at Dallas.

About Johnston Tobey Baruch

Johnston Tobey Baruch is a dynamic law practice based in Dallas. Its trial and appellate attorneys have a broad range of litigation, arbitration and appellate experience. They are pioneers in the handling of legal and accounting malpractice, investment fraud and business disputes. They also have an enviable track record with insurance bad faith matters, commercial litigation and fiduciary litigation, and civil, family and criminal appeals for many prominent Texas companies and individuals.

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