Elvia Martinez De Villagomez and Claudia E. Gonzalez v. First National Bank-Edinburg ( 2005 )

                                    NUMBER 13-04-367-CV

                                 COURT OF APPEALS

                     THIRTEENTH DISTRICT OF TEXAS

                         CORPUS CHRISTI B EDINBURG

ELVIA MARTINEZ DE VILLAGOMEZ AND

CLAUDIA GONZALEZ,                                                                    Appellants,

                                                             v.

FIRST NATIONAL BANK- EDINBURG, ET AL.,                             Appellees.

                     On appeal from the 93^rd District Court

                                        of Hidalgo County, Texas.

                                M E M O R A N D U M   O P I N I O N

     Before Chief Justice Valdez and Justices Hinojosa and Yanez

      Opinion by Chief Justice Valdez  

Appellants, Elvia Martinez de Villagomez and Claudia E. Gonzalez (collectively AVillagomez@), appeal from the trial court=s decision to grant summary judgment in favor of appellees, First National BankBEdinburg, Aurelio Garza and Liana Rodriguez.  Because we find no evidence of fraud or trickery on the part of appellees, we affirm.

I. Background

Villagomez is a Mexican businesswoman who neither reads nor speaks English.  She had been regularly traveling from Mexico to conduct her banking and investing at several different U.S. financial institutions following the devaluation of the Mexican peso.  In 1996, Villagomez invested in a certificate of deposit (ACD@) with First National BankBEdinburg (AFNB@) upon the recommendation of Roberto Zuniga, a family friend.  While purchasing the CD from FNB, Villagomez also signed bank loan documents which pledged her CD as collateral for a loan obtained from FNB by Zuniga.  Villagomez was assisted at the bank by two Spanish-speaking FNB employees, appellees Garza and Rodriguez, and was accompanied by Zuniga. 

In 1997, Zuniga failed to repay his loan and FNB appropriated the funds from Villagomez=s CD. Villagomez and her daughter then sued FNB and its employees, alleging that they committed fraud when they allowed Villagomez to sign the documents pledging her CD as collateral for Zuniga=s loan. Villagomez claimed that she had not known what the documents said, as they were in English, which she does not read, and she was unaware that her CD was being used as collateral for Zuniga=s loan because Zuniga=s name had not been on the documents she signed.

Appellees moved for summary judgment, arguing that there was no proof of fraud or any other misconduct on their part.  With their motion, appellees submitted several loan documents signed by Villagomez clearly indicating that she was pledging her CD as collateral for a loan to ARoberto Zuniga d/b/a Zuniga=s Auto Sales,@ including a special Anotice to cosigner@ signed by Villagomez and ostensibly alerting her to the fact that she has guaranteed the debt of AZuniga d/b/a Zuniga=s.@  All these documents were filled out by Villagomez in the presence and with the assistance of Spanish-speaking FNB employees.  The trial court granted appellees= motion and entered judgment against Villagomez.  Now on appeal, Villagomez alleges that the trial court erred in granting summary judgment in favor of appellees because FNB was either fraudulent or negligent when it allowed Villagomez to pledge her CD as collateral.

II.  Analysis

The movant in a traditional motion for summary judgment has the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law.  See Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985).  In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. See id. at 548‑49.

A person who signs a contract is presumed as a matter of law to know its terms.  D. Wilson Constr. Co. v. McAllen Indep. Sch. Dist., 848 S.W.2d 226, 230 (Tex. App.BCorpus Christi 1992, writ dism'd w.o.j.); see also Thigpen v. Locke, 363 S.W.2d 247, 251 (Tex. 1962) (charging parties to an arm's‑length transaction with a duty to read what they sign).  The failure by a party to read a document, without a showing of fraud, is generally not a defense to its enforcement.  Estes v. Republic Nat'l Bank, 462 S.W.2d 273, 276 (Tex. 1970); Peters v. Gifford‑Hill & Co., 794 S.W.2d 856, 861 (Tex. App.BDallas 1990, writ denied).  In the absence of fraud, a party's failure to read an instrument before signing it is not a ground for avoiding it.  Estes, 462 S.W.2d at 276; Peters, 794 S.W.2d at 861. This is true even in the case of illiteracy or an inability to read English.  See Vera v. N. Star Dodge Sales, Inc., 989 S.W.2d 13, 17-18 (Tex. App.BSan Antonio 1998, no pet.); see also de Tamez v. Southwestern Motor Transp., Inc., 155 S.W.3d 564, 570 (Tex. App.BSan Antonio 2004, no pet.) (A[E]ven though English was not his first language, we must presume, as a matter of law, that [appellant] read and understood the contract, unless he was prevented from doing so by trick or artifice.@).

Villagomez admits that she failed to read the documents before signing them.  However, she attempts to invoke the fraud exception to the general rule by arguing that FNB made material representations to her which wrongfully and falsely led her to believe that she was simply investing her money with FNB, not that she was pledging the money as collateral.  Fraud is found when there has been (1) a material misrepresentation (2) which was false, (3) which was known to be false when made or was made recklessly as a positive assertion without knowledge of its truth, (4) which was intended to be acted upon, (5) which was relied upon, and (6) which caused injury.  Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998).

 We have reviewed the relevant evidence submitted, including Villagomez=s deposition testimony, and conclude that she has failed to show that any material misrepresentation was made to her by appellees. In her deposition, which was submitted as summary judgment evidence, Villagomez testified that FNB employees gave her the forms to fill out and provided her with assistance.  She did not report having any problems communicating with or understanding the FNB employees, who were both bilingual.  Villagomez stated that she did not ask what the documents were or request a translation of their contents.  Furthermore, she said that she had not seen Zuniga=s name on any of the documents she signed; however, she also admitted to signing the documents without reading them.  Villagomez failed to report any fraudulent or misleading material misrepresentation made to her by FNB or its employees, nor did she provide any evidence that would tend to show trickery or deception.

Villagomez also alleges in her petition that appellees made a Apartial disclosure.@  Courts will impose a duty to disclose information in arm's‑length business transactions if a party makes a partial disclosure that, although true, conveys a false impression. Anderson, Greenwood & Co. v. Martin, 44 S.W.3d 200, 213 (Tex. App.BHouston [14th Dist.] 2001, pet. denied).  Villagomez alleges that this partial disclosure occurred when an FNB employee asked her in Spanish what term of years she would like for her CD.  We conclude, however, that this was merely a question, not a material representation, unrelated to Zuniga=s loan, and we decline to characterize this question as a partial disclosure conveying the false impression that the CD would not be used as collateral for a loan.  See Fleming v. Tex. Coastal Bank of Pasadena, 67 S.W.3d 459, 462 (Tex. App.BHouston [14th Dist.] 2002, pet. denied). 

Finally, Villagomez alleges that FNB had a duty to warn her about or otherwise disclose the nature of the documents she was signing and was therefore negligent in fulfilling this duty.  Non-disclosure is neither fraudulent nor negligent unless there is a duty to disclose. See Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001).  Fiduciary duties arise as a matter of law in certain formal relationships, including attorney‑client, partnership, and trustee relationships.  Ins. Co. of N. Am., 981 S.W.2d at 674; see Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 177 (Tex. 1997) ("Mere subjective trust does not, as a matter of law, transform arm's length dealing into a fiduciary relationship.").  The relationship between a bank and its customer is generally not a fiduciary one.  See Fleming, 67 S.W.3d at 462;  Bank One, Texas, N.A. v. Stewart, 967 S.W.2d 419, 442 (Tex. App.BHouston [14th Dist.] 1998, pet. denied).  Inability to read English has not been found sufficient to transform the normally arm=s length relationship between a bank and its client into a fiduciary relationship; this Court has held that Athe fact that appellants may not be fluent in English did not of itself create such a confidential relationship as to relieve them from their duty to read the contract documents.@  Salinas v. Beaudrie, 960 S.W.2d 314, 320 (Tex. App.BCorpus Christi 1997, no writ).  We find no Texas case law supporting the enforcement of a fiduciary relationship between a bank and its client based solely on the fact that the client did not speak English and therefore could not read the English documents being signed.  It would seem especially drastic for this Court to impose for the first time such a fiduciary duty here, given that Spanish-speaking employees were on hand to assist Villagomez and answer any questions, and that Villagomez had previous experience with U.S. banking institutions.   

Villagomez does point to First State Bank of Miami v. Fatheree, 847 S.W.2d 391, 396 (Tex. App.BAmarillo 1993, writ denied) and Corpus Christi Teachers Credit Union v. Hernandez, 814 S.W.2d 195, 202 (Tex. App.BSan Antonio 1991, no writ) to support her argument that financial institutions have been liable under fact situations substantially similar to those present in this case.  In Fatheree, however, it was found that the bank involved was an active and knowing partner of the principal wrongdoer in a scheme to defraud, see Fatheree, 847 S.W.2d at 396-97, and in Hernandez, the bank was involved in or aware of a plan to fraudulently alter loan agreements.  See Hernandez, 814 S.W.2d at 199-200.  In both these situations, a scheme to defraud was conceived and a representative from the bank willingly abused the bank=s services in order to further the scheme.  Here, there was no evidence of any pre-conceived plan to defraud Villagomez; instead the evidence shows that FNB fully performed its required duties under the law and did not cheat, lie, make any misrepresentations to Villagomez regarding her loan or otherwise abuse or misuse bank services.

III. Conclusion

   We conclude that the trial court did not err in granting appellees= motion for summary judgment. We overrule Villagomez=s lone issue on appeal and affirm the judgment of the trial court.              

Rogelio Valdez,

Chief Justice

Memorandum Opinion delivered and filed

this 4^th day of August, 2005.