Courtney Sanders, Individually and as Dependent Administrator of the Estate of William Paul Brown v. Charlotte Hathaway ( 2019 )

Opinion issued July 9, 2019
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-18-00661-CV
———————————
COURTNEY SANDERS, INDIVIDUALLY, AND AS DEPENDENT
ADMINISTRATOR OF THE ESTATE OF WILLIAM PAUL BROWN,
Appellant
V.
CHARLOTTE HATHAWAY, Appellee
On Appeal from the 239th District Court
Brazoria County, Texas
Trial Court Case No. 87060-CV
MEMORANDUM OPINION
Appellant Courtney Sanders, Individually, and as Dependent Administrator
of the Estate of William Paul Brown, appeals from the trial court’s order granting
summary judgment in favor of appellee, Charlotte Hathaway, on Sanders’s causes
of action for common law fraud, fraudulent inducement, breach of fiduciary duty,
and to set aside contracts. In two issues, Sanders contends that the trial court erred
in granting summary judgment on her claims because (1) a fact issue exists with
regard to her claims of lack of mental capacity and undue influence and (2) the
discovery rule and fraudulent concealment doctrine tolled the accrual of her causes
of action. We affirm.
Background
Sanders and Hathaway are sisters and the daughters of William Paul Brown.
Brown died on September 10, 2010.
On June 10, 2016, Sanders filed suit against Hathaway asserting causes of
action for conversion, tortious interference with inheritance rights, fraudulent
inducement, common law fraud, breach of fiduciary duty. Sanders also sought to
set aside any distributions or transfers of, or change of beneficiary designations
regarding, real or personal property owned by Brown after January 2009 based on
Brown’s alleged lack of mental capacity to contract and undue influence exerted
over him by Hathaway. On November 16, 2016, Sanders filed her first amended
petition, omitting her conversion claim.
2
On November 3, 2017, Hathaway filed her first no-evidence motion for
summary judgment and second traditional motion for summary judgment.1 Sanders
filed her response to the motions on November 21, 2017. The summary judgment
evidence before the trial court, which included the transcripts of Sanders’s and
Hathaway’s depositions, Hathaway’s affidavit, certified copies of the deeds, and
Brown’s medical records, showed the following:
• Prior to his death, Brown lived alone in a trailer on his property.
Hathaway lived in a nearby mobile home on Brown’s property and
Sanders lived more than 300 miles away.
• Brown had a long history of heavy alcohol use and suffered from
jaundice and cirrhosis of the liver. In addition to taking the pain
medication, Darvon, Brown took Oxycontin during a two-week period
in April or May 2010. When the Oxycontin caused him to hallucinate,
Brown stopped taking the medication.
• On March 17, 2010, approximately six months before he died, Brown
changed the beneficiary designations on three of his four insurance
policies, naming Hathaway as sole beneficiary (“beneficiary changes”).
On his fourth policy, Sanders and Hathaway remained co-beneficiaries.
• On March 17, 2010, Brown also executed four warranty deeds
transferring his real property to Hathaway (“deeds”). The deeds, which
were signed and notarized, were recorded in the property records of
Brazoria County.
• Five days later, on March 22, 2010, Brown executed documents at his
financial institution, the Associated Credit Union, making his checking,
savings, and share certificates accounts payable on death to Hathaway
1
Hathaway previously filed a traditional motion for summary judgment which was
denied on January 24, 2017.
3
(“payable on death accounts”). The beneficiary changes, deeds, and
payable on death accounts disposed of all of Brown’s property except
for household furnishings and personal effects.
• Sanders typically visited Brown four times a year and, in 2010, visited
him twice. According to Sanders, Brown was able to care for himself,
including feeding and dressing himself.
• In 2010, Hathaway visited Brown every day for approximately two
hours, ensured that he took his medication, accompanied him to his
doctor visits, made sure he had groceries, and occasionally cooked for
him.
• When several of his friends passed away, Brown told Hathaway that he
wanted to get his legal affairs in order. Brown, who could not type, sat
next to Hathaway and gave her instructions while she created a
declaration of trust and durable power of attorney using a will maker
computer program. It is undisputed that the trust was never funded.
• On September 10, 2010, Brown died. On September 11, 2010,
Hathaway told Sanders that their father had passed away.
• On September 12, 2010, two days after Brown’s death, Hathaway told
Sanders that Brown did not have much when he passed away, and that
what little remained he left to Hathaway in a trust.
• Sanders knew that she and Hathaway were to receive $10,000 each in
life insurance proceeds but she did not know anything about Brown’s
financial situation. Sanders also knew prior to Brown’s death that he
had some property, but she did not know the nature and extent of it.
• In March 2014, Sanders learned from her uncle that Brown had assets
worth approximately $1,000,000 before he died.
• On June 6, 2014, Sander’s attorney sent a letter to Hathaway requesting
documentation concerning Brown’s deed transfers, beneficiary
designations on his life insurance policies, and bank accounts.
4
• On September 9, 2014, Sanders applied for the administration of
Brown’s estate.
Following a hearing, the trial court granted Hathaway’s no-evidence and
traditional summary judgment motions on June 26, 2018. On July 25, 2018, Sanders
filed a motion for new trial which was overruled by operation of law. This appeal
followed.
Discussion
On appeal, Sanders contends that the trial court erred in granting summary
judgment on her claims because (1) a fact issue exists with regard to her claims of
lack of mental capacity and undue influence, (2) the discovery rule and doctrine of
fraudulent concealment tolled the accrual of her causes of action, and (3) the
evidence is sufficient to create a fact issue on her claims of common law fraud and
breach of fiduciary duty.
A. Standard of Review
We review a trial court’s grant of summary judgment de novo. Travelers Ins.
Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When reviewing a summary
judgment motion, we must (1) take as true all evidence favorable to the nonmovant
and (2) indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.
2005) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
2003)). If a trial court grants summary judgment without specifying the grounds for
5
granting the motion, we must uphold the trial court’s judgment if any one of the
grounds in the motion is meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d
145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).
In a traditional summary judgment motion, the movant has the burden to show
that no genuine issue of material fact exists and that the trial court should grant
judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v.
Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A defendant
moving for traditional summary judgment must conclusively negate at least one
essential element of each of the plaintiff’s causes of action or conclusively establish
each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d
910, 911 (Tex. 1997).
In a no-evidence motion for summary judgment, the movant asserts that there
is no evidence to support an essential element of the nonmovant’s claim on which
the nonmovant would have the burden of proof at trial. See TEX. R. CIV. P. 166a(i);
Hahn v. Love, 321 S.W.3d 517, 523–24 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied). The burden then shifts to the nonmovant to present evidence raising a
genuine issue of material fact as to each of the elements specified in the motion.
Hahn, 321 S.W.3d at 524; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex.
2006).
6
Where, as here, a trial court grants a summary judgment involving both
no-evidence and traditional grounds, we ordinarily address the no-evidence grounds
first. See PAS, Inc. v. Engel, 350 S.W.3d 602, 607 (Tex. App.—Houston [14th Dist.]
2011, no pet.). However, if we conclude that we must affirm the trial court’s
summary judgment ruling on traditional grounds, we need not review the
no-evidence grounds. Davis-Lynch, Inc. v. Asgard Techs., LLC, 472 S.W.3d 50, 59
(Tex. App.—Houston [14th Dist.] 2015, no pet.); Wilkinson v. USAA Fed. Sav. Bank
Trust Servs., No. 14–13–00111–CV, 2014 WL 3002400, at *5 (Tex. App.—Houston
[14th Dist.] July 1, 2014, pet. denied) (mem. op.) (affirming summary judgment on
traditional grounds, without considering alternative no-evidence grounds, where
evidence conclusively proved defendants were entitled to judgment as matter of
law).
“A defendant moving for summary judgment on the affirmative defense of
limitations bears the burden of conclusively establishing the elements of that
defense.” Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833–34 (Tex. 2018)
(citing KPMG Peat Marwick, 988 S.W.2d at 748). “This includes conclusively
establishing when the cause of action accrued.” Id. “In cases in which the plaintiff
pleads the discovery rule, the defendant moving for summary judgment on
limitations bears the additional burden of negating the rule.” Id. at 834; Childs v.
Haussecker, 974 S.W.2d 31, 44 (Tex. 1998). Defendants may do this by either
7
conclusively establishing that (1) the discovery rule does not apply, or (2) if the rule
applies, the summary judgment evidence negates it. KPMG Peat Marwick, 988
S.W.2d at 748; Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223–24 (Tex. 1999).
B. Sanders’s Claim to Set Aside the Documents
In her first amended petition, Sanders sought to set aside (1) the March 17,
2010 changes to the beneficiary designations on three of Brown’s four insurance
policies naming Hathaway as sole beneficiary; (2) the March 17, 2010 execution of
four warranty deeds transferring his real property to Hathaway; and (3) the March
22, 2010 execution of documents making Brown’s checking, savings, and share
certificates accounts payable on death to Hathaway. Sanders argues that these
documents are invalid because (1) Brown lacked mental capacity at the time he
executed the documents and (2) Hathaway exerted undue influence over Brown.
In her summary judgment motion, Hathaway argued that (1) there was no
evidence that Brown lacked the mental capacity to execute the documents, and that
the evidence conclusively established as a matter of law that he did not lack the
mental capacity to do so, and (2) there was no evidence that she exerted undue
influence over Brown at the time he executed the documents. Hathaway further
argued that Sanders’s claims of mental incapacity and undue influence were barred
by the applicable statute of limitations, and that neither the discovery rule nor a claim
of fraudulent concealment tolled limitations on her claim to set aside the contracts.
8
In her summary judgment response, Sanders argued that there is sufficient
evidence to create a fact issue regarding whether Brown lacked the mental capacity
to execute the documents and whether Hathaway exerted undue influence at the time
of execution. She also argued that her claim seeking to set aside the documents
based on lack of mental incapacity and undue influence is not barred by the statute
of limitations because the discovery rule and fraudulent concealment doctrine tolled
their accrual. We address the limitations argument first.
1. Statute of Limitations
“It is settled law in Texas that a contract executed by a person who lacks
mental capacity is voidable, not void.” Cole v. McWillie, 464 S.W.3d 896, 900 (Tex.
App.—Eastland 2015, pet. denied) (citing Williams v. Sapieha, 61 S.W. 115, 116
(1901)); see also Kinsel v. Lindsey, 526 S.W.3d 411, 419 (Tex. 2017) (“Documents
executed by one who lacks sufficient legal or mental capacity may be avoided.”). A
cause of action to void a contract is personal and belongs to the parties to a contract.
See Wells v. Dotson, 261 S.W.3d 275, 284 (Tex. App.—Tyler 2008, no pet.). The
right to disaffirm a contract survives the death of an incompetent person and
descends to his heirs or his personal representative. See McWillie, 464 S.W.3d at
899–900 (citing Bennett v. Romos, 252 S.W.2d 442, 448–49 (1952)).
The right to disaffirm is subject to a four-year statute of limitations. TEX. CIV.
PRAC. & REM. CODE § 16.051; McWillie, 464 S.W.3d at 900; Dyer v. Dyer, 616
9
S.W.2d 663, 665 (Tex. App.—Corpus Christi 1981, writ dism’d) (“[T]he four-year
statute of limitations governs voidable deeds.”). Texas Civil Practice and Remedies
Code section 16.062 suspends the running of an applicable limitations period for
twelve months after the death of a person against whom or in whose favor there may
be a cause of action. See TEX. CIV. PRAC. & REM. CODE § 16.062(a). Thus, Sanders
had to bring her cause of action to set aside the contracts executed by Brown no later
than five years from the date of their execution.
Here, even if the beneficiary designation changes, deed transfers, and
accounts payable on death were voidable because Brown lacked the mental capacity
to execute them or was subjected to undue influence, the right to disaffirm those
contracts ran on March 17, 2015 and March 22, 2015—five years from the March
17, 2010 and March 22, 2010 execution dates. Sanders did not file her lawsuit until
June 10, 2016.
2. Discovery Rule
Sanders argues that her claim to set aside the contracts is not barred because
the discovery rule applies and deferred accrual of her claim.
Ordinarily, a cause of action accrues when “a wrongful act causes a legal
injury, even if the fact of injury is not discovered until later, and even if all resulting
damages have not yet occurred.” Sw. Energy Prod. Co. v. Berry–Helfand, 491
S.W.3d 699, 721 (Tex. 2016). Absent some exception, injuries that arise or develop
10
after the legal injury are still deemed to have accrued on the same date as the legal
injury that caused them. See Pasko, 544 S.W.3d at 834.
The discovery rule is a very limited exception to statutes of limitations. See
Computer Assocs. Int’l Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). If the
discovery rule applies, it only defers accrual of a cause of action until the plaintiff
knew or in the exercise of reasonable diligence should have known of the wrongful
act and resulting injury, not when the plaintiff knows the specific nature of each
wrongful act that may have caused the injury. Pasko, 544 S.W.3d at 834; KPMG
Peat Marwick, 988 S.W.2d at 749; see also ExxonMobil Corp. v. Lazy R Ranch, LP,
511 S.W.3d 538, 542–43 (Tex. 2017) (“[A] claim accrues when injury occurs, not
afterward when the full extent of the injury is known.”). A plaintiff need not need
to know that she has a cause of action; rather, she must only know “the facts giving
rise to the cause of action.” Computer Assocs. Int’l, 918 S.W.2d at 457.
The rule applies to classes of claims in which the alleged wrongful act and
resulting injury were both inherently undiscoverable at the time they occurred and
may be objectively verified. See S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996). An
injury is inherently undiscoverable if it is the type of injury that is not generally
discoverable by the exercise of reasonable diligence. HECI Expl. Co. v. Neel, 982
S.W.2d 881, 886 (Tex. 1998). That is, an injury is not inherently undiscoverable if
it could be discovered through the exercise of reasonable diligence. See BP Am.
11
Prod. Co. v. Marshall, 342 S.W.3d 59, 66 (Tex. 2011). To be objectively verifiable,
a claim must be subject to demonstration by direct, physical evidence. See S.V., 933
S.W.2d at 7.
In her summary judgment motion, Hathaway argued that Sanders, by her own
admission, knew all of the facts that gave rise to her cause of action to set aside the
beneficiary designation changes, deed transfers, and accounts made payable on death
by September 12, 2010. In support of her argument, Hathaway pointed to Sanders’s
testimony that she knew, prior to Brown’s death, that he owned some property, he
was sick, he was an alcoholic that drank every day, he was taking pain medication,
he had experienced hallucinations in the months before he died, and that Hathaway
was his primary caretaker in the year before he died. Sanders also testified that, two
days after Brown’s death, she learned from Hathaway that their father did not have
much when he passed away, and that other than fifty percent of one life insurance
policy, he left what remained of his assets to Hathaway.
In her summary judgment response and on appeal, Sanders admits that she
knew Brown had property but that she “had absolutely no idea of the nature and
extent of such property.” She argues that she “did not know and could not have
known exactly when the beneficiary designations and bank accounts were changed,
or when the property was transferred.” However, the summary judgment evidence
demonstrates that Sanders only began investigating the extent and nature of Brown’s
12
assets and later filed suit after she learned from an uncle that Brown had assets worth
approximately $1,000,000 before he died. Sanders knew of her alleged injury, i.e.,
that Brown gave almost all of his property to Hathaway and left her virtually nothing,
on September 12, 2010, two days after Brown died. It is the fact of the alleged
injury—that Hathaway kept property that Sanders may have been entitled to—that
started the running of the statute of limitations. See, e.g., Johnson v. Walker, 824
S.W.2d 184, 187 (Tex. App.—Fort Worth 1991, writ denied) (“The fact that a party
may not immediately be able to determine the total amount of damages it may suffer
does not toll the statute of limitations.”). Once Sanders knew of facts that might
constitute some injury, the statute of limitations began to run even if she did not yet
know “the specific cause of the injury; the party responsible for it; the full extent of
it; or the chances of avoiding it.” Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d
194, 207 (Tex. 2010). That Sanders did not know the extent of her alleged injury,
i.e., the dollar value of Brown’s assets, is irrelevant to determining when the statute
of limitations began to run. Yalamanchili v. Mousa, 316 S.W.3d 33, 38 (Tex. App.—
Houston [14th Dist.] 2010, pet. denied) (“[A]ccrual occurs upon notice of injury,
even if the claimant does not yet know the full extent of damages.”) (quoting
Schneider Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 270 (Tex. 2004)). Thus,
applying the discovery rule, the four-year statute of limitations (plus the additional
year due to Brown’s death) began to run from the date Sanders knew of her legal
13
injury, i.e. September 12, 2010. The statute of limitations ran by September 12,
2015, nine months before Sanders filed her suit on June 10, 2016.
3. Fraudulent Concealment
Sanders also argues the doctrine of fraudulent concealment tolled the statute
of limitations on her cause of action to set aside the documents.
The doctrine of fraudulent concealment is based on the doctrine of equitable
estoppel. Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1981). Fraudulent
concealment estops a defendant from relying on the statute of limitations as an
affirmative defense when the defendant owes a duty to disclose but fraudulently
conceals the existence of a cause of action. Id. “A party asserting fraudulent
concealment must establish an underlying wrong, and that ‘the defendant actually
knew the plaintiff was in fact wronged, and concealed that fact to deceive the
plaintiff.’” BP Am. Prod. Co., 342 S.W.3d at 67 (quoting Earle v. Ratliff, 998
S.W.2d 882, 888 (Tex. 1999); Weaver v. Witt, 561 S.W.2d 792, 793 (Tex. 1977) (per
curiam)); see Lilly v. Tex. Dep’t of Crim. Justice, 472 S.W.3d 411, 420 (Tex. App.—
Houston [14th Dist.] 2015, no pet.) (“The elements of fraudulent concealment are:
(1) existence of an underlying tort; (2) the defendant’s knowledge of the tort; (3) the
defendant’s use of deception to conceal the tort; and (4) the plaintiff’s reasonable
reliance on the deception.”). A party asserting fraudulent concealment as an
affirmative defense to the statute of limitations bears the burden to raise it in
14
response to the summary judgment motion and to come forward with summary
judgment evidence raising a fact issue on each element of the defense. KPMG Peat
Marwick, 988 S.W.2d at 749.
“Fraudulent concealment only tolls the running of limitations until the fraud
is discovered or could have been discovered with reasonable diligence.” BP Am.
Prod., 342 S.W.3d at 67. If the fraudulent concealment is based on a fraudulent
representation by the defendant, the plaintiff must demonstrate that reliance on that
representation was reasonable. See id. at 68. Reliance on a fraudulent representation
“is not reasonable when information revealing the truth could have been discovered
within the limitations period.” Id.
In her summary judgment response, Sanders argued that there was sufficient
evidence of each element of fraudulent concealment because (1) Hathaway told her
facts that were not true two days after their father died, (2) when Sanders began
investigating a potential cause of action against Hathaway, Hathaway knowingly and
intentionally refused to provide any information, (3) and Hathaway did so with a
fixed purpose of concealing the wrongs she committed before their father’s death.
Taking Sanders’s factual allegations as true, see Valence Operating Co., 164 S.W.3d
at 661, they do not raise a fact issue as to the existence of an underlying wrong.
Sanders’s assertions that Hathaway told her facts that were not true, refused to
provide her with information, and did so with the purpose of concealing her alleged
15
wrongdoing might provide the element of deception, but they are not evidence of an
underlying wrong. See Lazy R Ranch, 511 S.W.3d at 544 (concluding fraudulent
concealment doctrine did not toll limitations period on ranch owners’ claim of
surface contamination against petroleum company where there was no evidence of,
among other things, misconduct on company’s part with respect to spills on property
or at abandoned sites).
In sum, Sanders’s cause of action to set aside Brown’s beneficiary designation
changes, deed transfers, and making of accounts payable on death ran on March 17,
2015 and March 22, 2015—five years from the March 17, 2010 and March 22, 2010
execution dates. Applying the discovery rule, Sanders’s claim began to run from the
date Sanders knew of her legal injury, i.e. September 12, 2010, and, under the
applicable four-year statute of limitations plus the additional year due to Brown’s
death, her claim ran by September 12, 2015. Finally, the doctrine of fraudulent
concealment did not toll limitations on Sanders’s claim because there is no evidence
in the record that Brown’s actions in transferring assets to Hathaway were the result
of wrongful conduct on Hathaway’s part. We conclude that the trial court did not
err in granting summary judgment on Sanders’s claim to set aside the documents.
C. Sanders’s Fraud Claim
Sanders contends that the trial court erred in granting summary judgment on
her claim of common law fraud because the evidence is sufficient to raise a fact issue
16
on all of the elements of her claim. Hathaway argues that Sanders has presented no
evidence to support her fraud claim.
To prove fraud, Sanders must establish that (1) a material misrepresentation
was made; (2) the representation was false; (3) when the representation was made,
the speaker either knew it was false or made the statement without knowledge of the
truth; (4) the speaker intended the representation to be acted upon; (5) the party acted
in reliance upon the representation; and (5) the party suffered injury. Zorrilla v.
Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (quoting Formosa Plastics
Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)).
In her summary judgment response, Sanders argued that the evidence showed that
(1) Hathaway told Sanders that Brown had left his entire estate to Hathaway in a
trust but then failed and refused to disclose the trust documents to her; (2)
Hathaway’s representation was false because the purported trust was never funded;
(3) Hathaway intended Sanders to rely on the representation and not take action
regarding Brown’s estate; (4) Sanders justifiably relied on Hathaway’s
representation and did not take action until much later; and (5) Sanders suffered
injury because she did not obtain any part of her father’s estate to which she is justly
entitled.
A material representation is one which “a reasonable person would attach
importance to and would be induced to act on . . . in determining his choice of actions
17
in the transaction in question.” Italian Cowboy Partners, Ltd. v. Prudential Ins. Co.
of Am., 341 S.W.3d 323, 337 (Tex. 2011) (quoting Smith v. KNC Optical, Inc., 296
S.W.3d 807, 812 (Tex. App.—Dallas 2009, no pet.)); Samson Lone Star Ltd. P’ship
v. Hooks, 497 S.W.3d 1, 13–14 (Tex. App.—Houston [1st Dist.] 2016, pet. denied).
Hathaway’s representation to Sanders—that Brown conveyed his entire estate to
Hathaway through a trust rather than through beneficiary designations changes to
his insurance policy, deed transfers, and making his accounts payable on death—is
not a material misrepresentation. It is undisputed that Brown conveyed his property
to Hathaway—that he did so through beneficiary changes, deed transfers, and
making his accounts payable on death, rather than through the instrument of a trust,
is immaterial. Further, Sanders has not shown how she was injured as a result of the
representation. Her alleged injury, i.e., that she did not obtain any part of her father’s
estate to which she is justly entitled, was not caused by Hathaway’s representation
that Brown conveyed his estate to her through a trust. Rather, it is the fact that
Brown left his property to Hathaway in the first place that caused her injury, if any.
Because there is no evidence of a material representation or injury, we
conclude that the trial court did not err in granting summary judgment on Sanders’s
common law fraud claim.
18
D. Sanders’s Fraudulent Inducement Claim
In her brief, Sanders states that Hathaway did not challenge Sanders’s claim
for fraudulent inducement. In her summary judgment motion, Hathaway argued that
Sanders’s cause of action for fraudulent inducement failed as a matter of law because
Sanders and Hathaway did not enter into a contract together and no cause of action
exists for general fraudulent inducement.
Fraudulent inducement is a distinct category of common-law fraud that shares
the same elements but involves a promise of future performance made with no
intention of performing at the time it was made. Zorrilla, 469 S.W.3d at 153. To
prevail in a fraudulent inducement claim, the plaintiff not only must establish all of
the elements of a fraud claim, but must establish those elements “as they relate to an
agreement between the parties.” Haase v. Glazner, 62 S.W.3d 795, 798–99 (Tex.
2001). Because we conclude that Sanders did not establish all of the elements of her
fraud claim, much less as they relate to an agreement with Hathaway, the trial court
properly granted summary judgment on this claim.
E. Sanders’s Breach of Fiduciary Duty Claim
Sanders contends that the trial court erred in granting summary judgment on
her claim of breach of fiduciary duty because the evidence is sufficient to raise a fact
issue on the elements of her claim.
19
To prove breach of fiduciary duty, Sanders must establish that (1) a fiduciary
relationship existed between the plaintiff and the defendant; (2) the defendant
breached her fiduciary duty; and (3) the breach resulted in injury to the plaintiff or
benefit to the defendant. Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied). In her summary judgment response,
Sanders argued that the evidence showed that (1) an informal fiduciary duty existed
between Brown and Hathaway; (2) Hathaway breached her fiduciary duty to Brown
by transferring the entirety of Brown’s estate to herself; and (3) Hathaway’s breach
was detrimental to Brown and Sanders.
Contrary to Sanders’s assertion, there is no evidence that Hathaway
“transferred the entirety of Brown’s estate to herself.” The evidence shows that, on
March 17, 2010, Brown changed the beneficiary designations on three of his four
insurance policies to Hathaway but left Sanders and Hathaway as co-beneficiaries
under one of his policies. That same day, Brown also executed four warranty deeds
transferring his real property to Hathaway, and the deeds were signed and notarized
before a notary public. Five days later, on March 22, 2010, Brown went to his credit
union and executed documents in front of credit union employees to make his
checking, savings, and share certificated accounts payable on death to Hathaway.
This evidence shows that Brown, not Hathaway, distributed his property to
Hathaway.
20
Because Sanders has not produced any evidence showing that Hathaway
breached a fiduciary duty to Brown, summary judgment on her breach of fiduciary
duty claim was proper. 2 Accordingly, we overrule Sanders’s first and second issues.
Conclusion
We affirm the trial court’s judgment.
Russell Lloyd
Justice
Panel consists of Justices Lloyd, Kelly, and Hightower.
2
The trial court granted summary judgment on Sanders’s claim of tortious
interference with inheritance. The Texas Supreme Court recently held that
“[b]ecause existing law affords adequate remedies for the wrongs [tortious
interference with inheritance] would redress, and because the tort would conflict
with Texas probate law, we hold that there is no cause of action in Texas for
intentional interference with inheritance.” Archer v. Anderson, 556 S.W.3d 228,
229 (Tex. 2018). Presumably in light of Archer, on appeal Sanders does not
challenge the trial court’s grant of summary judgment on her tortious interference
with inheritance claim.
21