Kevin Rand v. State ( 2013 )

NUMBER 13-12-00096-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
RAMIRO HERNANDEZ Appellant,
v.
JAIME GARCIA, MIS TRES
PROPERTIES, LLC. AND STEVE DECK, Appellee.
On appeal from the County Court at Law No. 7
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Benavides and Longoria
Memorandum Opinion by Justice Longoria
Appellant, Ramiro Hernandez, appeals a final summary judgment granted in
favor of appellees, Jaime Garica, Mis Tres Properties, LLC, and Steve Deck. We
reverse and remand in part and affirm in part.
I. BACKGROUND
This case arises out of a 2003 sale of real estate in Starr County, Texas. Mis
Tres Properties, a limited liability company, owned by appellee Garcia, executed a
$70,000 promissory note and deed of trust (separate documents executed on the same
day) in favor of appellant in exchange for appellant’s removal of a lien he held against
certain real property Mis Tres was attempting to sell to a third party. The note was to be
paid out of the proceeds of the sale. The Law Office of John King (“King”) drew up the
paperwork. The deed of trust listed Steve Deck, an employee of both King and
Qualified Intermediary (“Qualified”), as trustee.
In 2009, following his release from federal prison, appellant filed suit against
Garcia, Mis Tres Properties, King, Qualified and Deck for assumpsit, conversion, and
fraud after he did not receive the $70,000 after the sale closed. In addition, appellant
alleged a cause of action against Garcia and Mis Tres for breach of contract. Appellant
also alleged a cause of action against Deck for breach of fiduciary duty. Appellant
further alleged that King and Qualified were vicariously liable for Deck’s actions.1
Appellant pleaded the discovery rule as grounds for bringing the suit despite the statute
of limitations. King, Qualified, Deck, and Garcia filed joint motions for summary
judgment. The trial court granted both motions and subsequently granted Garcia and
Deck’s motion for severance.2 This appeal followed.
1
The specific claims asserted against each defendant changed somewhat during the course of
the litigation. We take this list of claims from appellant’s Third Amended Petition, his live petition.
2
We decide the issues related to King and Qualified’s motion for summary judgment today in a
companion case, Hernandez v. King, No. 13-12-095-CV.
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II. ANALYSIS
A. Standard of Review
We review the trial court’s grant of summary judgment de novo. Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); Alejandro v. Bell, 84
S.W.3d 383, 390 (Tex. App.—Corpus Christi 2002, no pet.). We take as true all
evidence that is favorable to the nonmovant and indulge every reasonable inference
and resolve all doubts in favor of the non-moving party. Provident, 128 S.W.3d at 215;
Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The moving
party has the burden to show that no genuine issues of material fact exist and that it is
entitled to summary judgment as a matter of law. TEX. R. CIV. P. 166a; Ortega v. City
Nat’l Bank, 97 S.W.3d 765, 772 (Tex. App.—Corpus Christi 2003, no pet.). Summary
judgment is proper if the movant disproves at least one element of each of plaintiff’s
claims or affirmatively establishes each element of an affirmative defense. Ortega, 97
S.W.3d at 772 (citing Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997)).
In a no-evidence summary judgment motion, the moving party contends that the
nonmovant has produced no evidence to support at least one element of a particular
claim for which the nonmovant would have the burden of proof at trial. TEX. R. CIV. P.
166a(i); See Ortega, 97 S.W.3d at 772. Unlike with a traditional motion, the adverse
party must respond with evidence, but it is not required to “marshal its proof; its
response need only point out evidence that raises a fact issue on the challenged
elements.” TEX. R. CIV. P. 166a(i) cmt. We review “the evidence in the light most
favorable to the non-movant, disregarding all contrary evidence and inferences.” King
Ranch v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003); Merrell Dow Pharms. Inc. v.
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Havner, 953 S.W.2d 706, 711 (Tex. 1997). A no-evidence summary judgment motion
must be reversed if the non-movant brought forth “more than a scintilla of probative
evidence on each challenged element of his claim.” Midwest v. Harpole, 293 S.W.3d
770, 775 (Tex. App.—San Antonio 2009, no pet.). More than a scintilla of evidence
exists where there is enough evidence to “enable reasonable and fair minded people to
differ in their conclusions.” King Ranch, 118 S.W.3d at 751; Zapata v. Children’s Clinic,
997 S.W.2d 745, 747 (Tex. App.—Corpus Christi 1999, no pet.). Less than a scintilla
creates only a surmise or suspicion of the existence of a fact. King Ranch, 118 S.W.3d
at 751 (citing Merrell Dow Pharms., 953 S.W.2d at 711); In re Estate of Schiwetz, 102
S.W.3d 355, 361–62 (Tex. App.—Corpus Christi 2003, pet. denied). When the trial
court’s order granting summary judgment does not specify the grounds, summary
judgment will be affirmed on any meritorious grounds contained in the moving party’s
petition. Alejandro, 84 S.W.3d at 390.
B. Applicable Law
When a defendant moves for traditional summary judgment on the basis of the
affirmative defense of statute of limitations, the movant bears the burden to conclusively
establish that the statute is applicable, including the date on which the statute began to
run, which is the date the cause of action accrued. Diversicare Gen. Partner, Inc. v.
Rubio, 185 S.W.3d 842, 846 (Tex. 2005); Provident, 128 S.W.3d at 220. Determining
when a cause of action accrued is a question of law. Provident, 128 S.W.3d at 221. A
cause of action accrues, and the statute begins to run, “when a wrongful act causes a
legal injury, regardless of when the plaintiff learns of that injury or if all resulting
damages have yet to occur.” Id. (citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)). The
statute begins to run on the accrual date even if the injury is not discovered until later or
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all damage resulting from the injury has not yet occurred. Id. In certain narrow cases,
however, the discovery rule defers accrual until a plaintiff “knew or, exercising
reasonable diligence, should have known of the facts giving rise to a cause of action.”
HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998). The supreme court
has ruled that the discovery rule applies where both “the nature of the injury incurred is
inherently undiscoverable and the evidence of injury is objectively verifiable.” S.V., 933
S.W.2d at 6 (quoting Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.3d 453, 456
(Tex. 1996)). The party moving for summary judgment on the basis of limitations must
negate the discovery rule if it applies and has been pleaded by the nonmoving party.
Envtl. Procedures, Inc. v. Guirdy, 282 S.W.3d 602, 622 (Tex. App.—Houston [14th Dist.]
2009, pet. denied) (op. on rehr’g). A defendant moving for summary judgment on the
basis of the statute of limitations where the non-movant has pleaded the rule negates
the discovery rule by proving as a matter of law that there is no question of material fact
“about when plaintiff discovered, or in the exercise of reasonable diligence should have
discovered the nature of its injury.” KPMG Peat Marwick v. Harrison County Hous. Fin.
Corp., 988 S.W.2d 746, 749 (Tex. 1999).
C. Deck’s Motion For Summary Judgment
Deck filed a combined motion for summary judgment, seeking a traditional
summary judgment on appellant’s claims for assumpsit, conversion, and fraud based on
the statute of limitations and a no-evidence summary judgment on appellant’s claim for
breach of fiduciary duty.
1. Claim for Assumpsit
Deck’s motion recites the following: appellant claims he did not get paid on the
transactions that occurred “on our around May 2003,” the statute of limitations to bring
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an action for assumpsit is either two or four years, and appellant filed suit in August
2009. Because 2009 is more than four years since “the transaction complained of,”
Deck argues that the statute of limitations has therefore run on appellant’s cause of
action.
A cause of action for money had and received accrues when the defendant
obtains money that “in good conscience belongs to the plaintiff.” Amoco Production Co.
v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no pet.); see also H.E.B.,
L.L.C. v. Ardinger, 369 S.W.3d 496, 507 (Tex. App.—Fort Worth 2012, no pet). Deck
appears to argue that the cause of action accrued on the date of the transaction, when
he began to hold money for appellant, but this argument is contradicted by the record.
In a letter to appellant, Deck represented that the sale had closed and that “Mis Tres
Properties, L.L.C. is now holding the monies owed to you pursuant to that note” and that
appellant should come to King’s office with a copy of the note and the original deed of
trust to obtain his funds. There is no dispute that Deck was holding the funds appellant
was due after the sale closed. Instead, appellant alleges that Deck misappropriated the
money Deck was holding for appellant sometime after the sale closed. Deck’s motion
does not address this claim and therefore does not establish the date on which
appellant’s cause of action would have accrued.
As the moving party, Deck was also required to negate the discovery rule in
order to conclusively establish his affirmative defense, or explain why it does not apply.
Deck’s motion on this claim fails to address the rule at all. Deck now makes several
arguments on appeal as to why there is no question of fact regarding when plaintiff
knew or should have known of his claim, but this Court may not uphold summary
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judgment on a ground that is not expressly presented in the motion to the trial court.
See TEX. R. CIV. P. 166a(c); Garza v. CTZ Mortg. Co. LLC, 285 S.W.3d 919, 923 (Tex.
App.—Dallas 2009, no pet). Because Deck did not conclusively establish the
affirmative defense of the statute of limitations and did not address the discovery rule,
we conclude that the trial court erred in granting summary judgment. We accordingly
reverse summary judgment on this claim.
2. Claim for Conversion
Deck’s motion for summary judgment on this claim recites that the claim is
repetitive of appellant’s claim for assumpsit, states that the statute of limitations on
conversion is two years, and argues that the statute of limitations has therefore run.
The statute of limitations in conversion cases generally begins to run at the time
of the unlawful taking. Burns v. Rochon, 190 S.W.3d 263, 271 (Tex. App.—Houston
2006, no pet.). The discovery rule can apply to conversion cases, including cases
where, as here, possession of the property “is initially lawful.” Id. (citing Hofland v.
Elgin-Butler Brick Co., 834 S.W.2d 409, 414 (Tex. App.—Corpus Christi 1992, no writ)).
Deck’s motion suffers from the same defects as his motion on the assumpsit claim;
Deck does not establish, or even discuss, the date on which the cause of action would
have accrued. Deck also does not address the discovery rule even though it was
affirmatively plead by appellant. As the moving party, Deck had the burden both to
establish that the statute is applicable, including the date on which the statute began to
run, and to negate the discovery rule. Guirdy, 282 S.W.3d at 622. Because Deck’s
motion on this claim did neither, we conclude that the court erred in granting summary
judgment. We reverse summary judgment on this claim.
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3. Claim for Fraud
Deck’s motion for summary judgment on appellant’s claim for common-law fraud
recites that the statute of limitation is four years, that more than four years passed
between “the transaction” and the time appellant filed suit, and argues that the statute of
limitations has therefore run. The elements of common-law fraud are: (1) a material
representation, (2) that was false, (3) when the speaker made the representation he
knew it was false or made it recklessly without knowledge of the truth and as a positive
assertion, (4) speaker made the representation intending to induce the other party to act
on it, (5) the party acted in reasonable reliance on the representation, and (6) the party
relying on the representation suffered injury. In re First Merit Bank, N.A., 52 S.W.3d
749, 758 (Tex. 2001). In general, an action for common-law fraud accrues on the date
appellant made the allegedly false representations. Seureau v. ExxonMobil Corp., 274
S.W.3d 206, 226 (Tex. App.—Houston [14th Dist.] 2008, no pet).
Deck’s motion does not address the representations that he allegedly made to
appellant or address the application of the discovery rule in this case. As the party
moving for traditional summary judgment, it was Deck’s burden to establish both the
date on which the statute began to run and to either negate the discovery rule or explain
why it is inapplicable. Deck’s motion thus did not establish the date on which
appellant’s cause of action would have accrued. Because Deck’s motion on this claim
does not fulfill either of these requirements, we find that he did not conclusively
establish the statute of limitations as his affirmative defense. We reverse summary
judgment on this claim.
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4. Claim for Breach of Fiduciary Duty
Deck sought a no-evidence summary judgment on appellant’s claim on the basis
that there is no evidence that he owed appellant a fiduciary duty. Appellant argued that
Deck, as trustee, owed appellant a fiduciary duty as the named beneficiary. Deck
argued that Texas law is clear that the named trustee of a deed of trust does not owe a
fiduciary duty to the beneficiary. See Powell v. Stacey, 117 S.W.3d 70, 74 (Tex. App.—
Fort Worth 2003, no pet.) (“A trustee’s duties are fulfilled by strictly complying with the
terms of the deed of trust.”). Deck also argued that he had no other dealings with
appellant that were sufficient to create a fiduciary relationship. Appellant attached the
promissory note and deed of trust to his amended response to Deck’s summary
judgment motion. However, appellant did not discuss how those documents raise the
scintilla of evidence necessary to defeat no-evidence summary judgment; accordingly,
appellant failed to meet his burden. TEX. R. CIV. P. 166a(c) (“Issues not expressly
presented to the trial court by written motion, answer, or other response shall not be
considered on appeal as grounds for reversal.”); see also Morris v. Enron Oil & Gas
Co., 948 S.W.3d 858, 867 (Tex. App.—San Antonio 1997, no pet.).3 Therefore,
appellant has failed to meet his burden. The trial court properly granted summary
judgment on this claim.
3
Even if appellant had argued this point in his response, we do not see how he could raise a fact
issue on a breach of fiduciary relationship relating to the deed of trust. Although a trustee who exercises
a power granted in the deed becomes the “special agent” of both parties and must “act with absolute
impartiality and with fairness to all concerned,” appellant did not bring forth any evidence that Deck
exercised any of his powers as trustee. Powell v. Stacey, 117 S.W.3d 70, 73 (Tex. App.—Fort Worth
2003, no pet.).
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D. Garcia’s Motion for Summary Judgment
Garcia’s motion as to appellant’s claims for breach of contract, assumpsit, and
conversion is a traditional motion for summary judgment and a no-evidence motion as
to the claim of fraud.
1. Claims for Assumpsit and Conversion
Garcia’s motion for traditional summary judgment on appellant’s claims for
assumpsit and conversion is materially identical to Deck’s motion and suffers from the
same defects. We accordingly reverse the grant of summary judgment on those claims
for the reasons discussed above.
2. Claim for Breach of Contract
Garcia’s motion on the claim for breach of contract recites the time period in
which the sale closed, the date appellant filed suit, and recites that the cause of action
is therefore barred by limitations. In Texas, a breach of contract claim “accrues when
the contract is breached.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006).
The supreme court has recognized that the discovery rule can apply to breach of
contract actions, but observed that such instances “should be rare, as diligent
contracting parties should generally discover any breach during the relatively long four-
year limitations period provided for such claims.” Id. at 315. Garcia’s motion on this
claim does not mention the Texas statute of limitations for breach of contract claims or
discuss the date on which the statute would have begun to run on appellant’s claim.
Garcia’s motion also does not address the discovery rule. As the party moving for
summary judgment, Garcia had the burden to conclusively establish that the statute is
applicable, including the date on which the statute began to run, and to either negate
the discovery rule or explain why it is inapplicable. Because Garcia’s motion does not
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meet either of these requirements, we conclude that Garcia did not conclusively
establish his affirmative defense of limitations. We accordingly reverse summary
judgment on this claim.
3. Claim for Fraud
In the no-evidence portion of his motion, Garcia argued that appellant could not
provide evidence proving two of the elements of fraud. The elements of common-law
fraud are: (1) a material representation, (2) that was false, (3) when the speaker made
the representation he knew it was false or made it recklessly without knowledge of the
truth and as a positive assertion, (4) the speaker made the representation intending to
induce the other party to act on it, (5) the party acted in reasonable reliance on the
representation, (6) the party relying on the representation suffered injury. In re First
Merit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Garcia argued in his motion that
appellant could not produce any evidence of the last two elements of fraud, reliance and
damages.
Garcia appears to have moved for summary judgment on a claim that appellant
did not make against him. Appellant alleges that Garcia represented to appellant that
the funds had been seized by the federal government. Appellant does not allege that
Garcia ever represented to appellant that he would release the funds to appellant if
appellant appeared in person. Garcia, however, moved for summary judgment on the
fraud claim on the basis that plaintiff has produced no proof of his reliance “on the
alleged representation that the funds were available to him once he personally
presented himself to collect them.” Because Garcia’s motion does not track appellant’s
live pleading, we reverse the grant of summary judgment on this issue.
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III. CONCLUSION
Having reversed the grant of summary judgment as to all of appellant’s claims
against all defendants except for the claim against Deck for breach of fiduciary duty, we
remand to the trial court for further proceedings consistent with this opinion.
_______________________
NORA L. LONGORIA
Justice
Delivered and filed the
4th day of April, 2013.
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