Ann Marie Gilmore, Michael Paul Rotan, and Harry Don Rotan v. Arvel Dean Rotan and Gary Wayne Rotan ( 2018 )

Opinion filed September 20, 2018
In The
Eleventh Court of Appeals
__________
No. 11-16-00253-CV
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ANN MARIE GILMORE, MICHAEL PAUL ROTAN, AND
HARRY DON ROTAN, Appellants
V.
ARVEL DEAN ROTAN AND GARY WAYNE ROTAN, Appellees
On Appeal from the 32nd District Court
Nolan County, Texas
Trial Court Cause No. 19,585
MEMORANDUM OPINION
This is an appeal from a summary judgment. Appellees, Arvel Dean Rotan
and Gary Wayne Rotan, sought summary judgment on both traditional and no-
evidence grounds. After conducting a hearing on the motion, the trial court entered
an “Order Granting Defendants’ Motion for Traditional and No Evidence Summary
Judgment.” This order did not specify the grounds upon which the motion for
summary judgment was granted. Appellants, Ann Marie Gilmore, Michael Paul
Rotan, and Harry Don Rotan, challenge the summary judgment in a single issue. In
their sole issue, Appellants only challenge one of the grounds upon which Appellees
sought summary judgment. We affirm the judgment of the trial court.
Background Facts
Appellants filed the underlying action on April 2, 2015. They asserted a cause
of action for breach of fiduciary duty against Appellees. Appellants asserted that
they were residual, contingent beneficiaries of testamentary trusts created by the will
of Harry Dean Rotan that he executed in 1990. The primary beneficiary of the trusts
was Mildred Marie Rotan, Harry Dean Rotan’s surviving wife. Appellants asserted
that Appellees were trustees of the testamentary trusts that came into existence when
Harry Dean Rotan died in 2002 and that Appellees allegedly engaged in self-dealing
when they transferred real property belonging to the trusts.
Mildred Marie Rotan died in 2014. Appellants alleged in their petition that,
following her death, they learned of the conveyance of the real property that is the
subject of the underlying suit. The deed of conveyance was filed in the public deed
records on March 22, 2010. The deed reflects that the conveyance occurred in 2003.
Appellants acknowledged that they each received $76,693.55 from the Estate of
Mildred Marie Rotan after her death. However, they asserted that the conveyance
of real property depleted the assets of the testamentary trusts.
Analysis
In a single issue on appeal, Appellants assert that the trial court erred in
granting Appellees’ motion for summary judgment on the basis of limitations.
Appellees filed a motion for summary judgment on both traditional and no-evidence
grounds. Appellees sought a traditional summary judgment on the basis that
Appellants’ claim was barred by limitations. Appellees sought a no-evidence
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summary judgment based on the contention that Appellants had no evidence of
damages. Appellants contend that they are permitted to challenge only one of the
summary judgment grounds asserted by Appellees because the trial court only
granted summary judgment on the basis of limitations. Appellants base this
assertion on a statement made by the trial court at the hearing on the motion for
summary judgment. We disagree with Appellants’ analysis.
As noted previously, the trial court’s written order granting summary
judgment did not specify the grounds upon which it was granted. Thus, the oral
statements made by the trial court at the hearing on the motion for summary
judgment do not control.1 In the civil context, a written order controls over a trial
court’s oral pronouncement. See Rapaglia v. Lugo, 372 S.W.3d 286, 290 n.3 (Tex.
App.—Dallas 2012, no pet.); In re JDN Real Estate–McKinney L.P., 211 S.W.3d
907, 914 n.3 (Tex. App.—Dallas 2006, orig. proceeding [mand. denied]) (“Any time
there is a conflict between oral pronouncements made by a trial judge and his written
order, the matters set forth in the written order control.”). Accordingly, the trial
court’s basis for granting Appellees’ motion for summary judgment is not restricted
to only limitations because the written order did not specify the grounds upon which
the summary judgment was based.
“When there are multiple grounds for summary judgment and the order does
not specify the ground on which the summary judgment was rendered, the appealing
party must negate all grounds on appeal.” Ellis v. Precision Engine Rebuilders, Inc.,
68 S.W.3d 894, 898 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (citing State
Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex. 1993)). “If summary
judgment may have been rendered, properly or improperly, on a ground not
1
As noted by the Texas Supreme Court in City of Houston v. Clear Creek Basin Authority, 589
S.W.2d 671, 677 (Tex. 1979), the practice of requesting a court reporter to record a summary judgment
hearing is “a practice neither necessary nor appropriate to the purposes of such a hearing.”
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challenged, the judgment must be affirmed.” Id. (citing Holloway v. Starnes, 840
S.W.2d 14, 23 (Tex. App.—Dallas 1992, writ denied)). Appellants do not challenge
the no-evidence ground for summary judgment. Because summary judgment may
have been rendered on a ground not challenged on appeal, we uphold the summary
judgment, whether it may have been rendered properly or improperly. See Ellis, 68
S.W.3d at 898.
Moreover, we conclude that the summary judgment evidence establishes as a
matter of law that Appellants did not comply with the applicable statute of
limitations. A claim for breach of fiduciary duty is subject to a four-year statute of
limitations. TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(5) (West 2002). “A
defendant moving for summary judgment on the affirmative defense of limitations
has the burden to conclusively establish that defense.” KPMG Peat Marwick v.
Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Accordingly,
Appellees were entitled to summary judgment on limitations if they (1) conclusively
established that the cause of action accrued before the commencement of the statute
of limitations period and (2) negate the discovery rule, if it applies, by proving as a
matter of law that there is no genuine issue of material fact about when Appellees
discovered, or in the exercise of reasonable diligence should have discovered, the
nature of their injury. Id. If the movant establishes that the statute of limitations
bars the action, the respondent must then adduce summary judgment evidence
raising a fact issue in avoidance of the statute of limitations. Id.
Generally, when a cause of action accrues is a question of law. Provident
Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003). “[A] cause of
action accrues and the statute of limitations begins to run when facts come into
existence that authorize a party to seek a judicial remedy.” Id. “In most cases, a
cause of action accrues when a wrongful act causes a legal injury, regardless of when
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the plaintiff learns of that injury or if all resulting damages have yet to occur.” Id.
“[T]he commencement of the limitations period may be determined as a matter of
law if reasonable minds could not differ about the conclusion to be drawn from the
facts in the record.” Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex. 1998).
The discovery rule is an exception that may defer accrual of a claim. See
Friddle v. Fisher, 378 S.W.3d 475, 483 (Tex. App.—Texarkana 2012, pet. denied).
The discovery rule has been applied in limited categories of cases to defer accrual
of a cause of action until the plaintiff knew or, in the exercise of reasonable diligence,
should have known of the facts giving rise to a cause of action. Computer Assocs.
Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). The discovery rule
operates as a “very limited exception” to limitations, deferring accrual in cases in
which the plaintiff’s injury was “both inherently undiscoverable and objectively
verifiable.” Shell Oil Co. v. Ross, 356 S.W.3d 924, 929–30 (Tex. 2011) (first quoting
Computer Assocs., 918 S.W.2d at 455; then quoting Wagner & Brown, Ltd. v.
Horwood, 58 S.W.3d 732, 734 (Tex. 2001)).
The discovery rule has often been applied to a claim for a breach of fiduciary
duty. 2 See HECI Exploration Co. v. Neel, 982 S.W.2d 881, 888 (Tex. 1998). In
explaining why the discovery rule applies to a claim for breach of fiduciary duty, the
Texas Supreme Court noted that “a person to whom a fiduciary duty is owed is either
unable to inquire into the fiduciary’s actions or unaware of the need to do so.” S.V. v.
R.V., 933 S.W.2d 1, 8 (Tex. 1996). Thus, “a person to whom a fiduciary duty is
owed is relieved of the responsibility of diligent inquiry into the fiduciary’s conduct,
so long as that relationship exists.” Id.; see also West v. Proctor, 353 S.W.3d 558,
2
Trustees owe beneficiaries a fiduciary duty. See Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex.
1996). “The elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship between the
plaintiff and defendant; (2) the defendant must have breached his fiduciary duty to the plaintiff; and (3) the
defendant’s breach must result in injury to the plaintiff or benefit to the defendant.” Jones v. Blume, 196
S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet. denied).
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566–67 (Tex. App.—Amarillo 2011, pet. denied). However, once “the fact of
misconduct becomes apparent it can no longer be ignored, regardless of the nature
of the relationship.” S.V., 933 S.W.2d at 8. Thus, claims for breach of fiduciary
duty generally accrue when the claimant knows or in the exercise of ordinary
diligence should know of the wrongful act and resulting injury. Villarreal v. Wells
Fargo Brokerage Servs., LLC, 315 S.W.3d 109, 119 (Tex. App.—Houston [1st
Dist.] 2010, no pet.); see also Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex.
1997).
Appellees assert that Appellants had both constructive notice and actual notice
of the conveyance that is the subject of Appellees’ claim when the deed was filed in
2010. Appellees base their assertion of actual notice on an excerpt of the deposition
of Appellant Harry Don Rotan that Appellees included as part of their summary
judgment evidence. Specifically, he testified that he had checked the land records
in 2010, that he knew in 2010 that the challenged deed had been recorded, and that
he told the other Appellants about it in 2010. Thus, the summary judgment evidence
offered by Appellees shows that Appellants had actual knowledge of the conveyance
in 2010.
Appellants attempted to controvert Appellees’ summary judgment evidence
of actual notice by relying on Appellants’ own interrogatory answers as summary
judgment evidence. In each of these interrogatory answers, Appellants asserted that
they learned of the challenged conveyance after Mildred Marie Rotan’s death.
However, a party cannot rely on its own answer to an interrogatory as summary
judgment evidence. Yates v. Fisher, 988 S.W.2d 730, 731 (Tex. 1998) (noting in
per curiam opinion that court of appeals erroneously used interrogatory responses in
favor of the answering party by relying on them to defeat summary judgment); see
Maxwell v. Willis, 316 S.W.3d 680, 685–86 (Tex. App.—Eastland 2010, no pet.)
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(citing TEX. R. CIV. P. 197.3 for the proposition that interrogatory answers may only
be used against the responding party). Additionally, allegations contained in
pleadings and motions are not summary judgment evidence. CHRISTUS Health
Gulf Coast v. Carswell, 505 S.W.3d 528, 540 (Tex. 2016). Accordingly, Appellants
did not provide competent summary judgment evidence to raise a fact question
showing that they learned of the conveyance after 2010.
Appellants additionally assert that “the deed itself does not demonstrate an
inherently discoverable injury.” They further contend that “the injury to Appellants
was not inherently discoverable merely because the deed was filed on March 22,
2010.” However, Appellants base these assertions on their interrogatory answers
stating that they did not learn of their alleged injury until after Mildred Marie Rotan’s
death in 2014. As we have noted, Appellants cannot rely on their own interrogatory
answers as summary judgment evidence. Accordingly, Appellants did not raise a
genuine issue of fact that they learned of their alleged injury at a later time.
To the extent that Appellants may be asserting that they did not realize in 2010
that the conveyance affected an interest they owned, their beneficial interest arose
from the will of Harry Dean Rotan. “Persons interested in an estate admitted to
probate are charged with notice of the contents of the probate records.” Mooney v.
Harlin, 622 S.W.2d 83, 85 (Tex. 1981). Thus, Appellants had constructive notice
of their beneficial interest in the real property when Harry Dean Rotan’s will was
admitted to probate. 3 Id. Constructive notice creates an irrebuttable presumption of
actual notice. Id. Accordingly, the summary judgment evidence establishes that
Appellants had notice of their alleged injury in 2010. Since the applicable statute of
3
In citing Mooney, we are only holding that Appellants’ had constructive notice of the contents of
Harry Dean Rotan’s probate filings. We are not holding that Appellants had constructive notice of the deed
by virtue of their status as persons interested in the estate. While Appellees assert that Appellants had
constructive notice of the deed, we do not reach that contention because the summary judgment evidence
establishes that Appellants had actual notice of the deed at or near the time that it was filed.
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limitations is four years for a claim for breach of fiduciary duty, Appellants’ suit
filed in 2015 was not timely. We overrule Appellants’ sole issue on appeal.
This Court’s Ruling
We affirm the judgment of the trial court.
JOHN M. BAILEY
CHIEF JUSTICE
September 20, 2018
Panel consists of: Bailey, C.J.,
Willson, J., and Wright, S.C.J.4
Willson, J., not participating.
4
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.
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