honors wednesday beverly i represent the appellant chris carter to any issues that i would like to address time permitting first did the trial court err in granting summary judgment against mr harder when there were multiple fact issues including conflicting evidence on the main fact issue of whether mr hart mr morgan approved mr ar salary in the years two thousand and nine and two thousand and ten and a lot of other related fact issues regarding the course of dealings between mr carter and legacy and second were  judgment claim for legacy we believe that the district court failed to apply the correct summary judgment standard of review determined the contested fact issues made a credibility determination  essentially decided who should win when there clearly were contested issues of genuine fact and the summary judgment in favor of legacy should be reversed on the limitations issue the injuries were not inherently undiscoverable not or or objective li verifiable as required by the texas rule discovery rule and the existence of the alleged to do share relationship here is not enough to save legacies claims under the facts of this case and we believe the court should reverse and render on the limitations question with respect to the fact issues that precluded s on legacies claim and in reviewing legacy relying on harker's your client's affidavit primarily to create a fact issue on liability or act how does it end you can't just have self serving conclusory affidavit what explanation does he give for why what he claims was authorized increases in salary why those occurred only during the relatively narrow window of time when he was in charge of the books that was explained by the fact that the workload that he was under was increasing during that period of time he looked at what was going on during that period of time and i believe september of two thousand the getting in two thousand nine into two thousand and ten and legacy was expanding their restaurant brand they were as is the evidence shows they have a name for this brand and the original antony's brand they were expanding that brand into other scottsdale arizona and then another to bernie and beverly hills and april of two thousand and eleven so that's that's three new restaurants not only in different cities but in different states within a period of eight months that is a major increase in his workload during that period he also tested his declaration disease looking right at is that is actually up to an eight and to zero nine and in the in the statements that they were required to give to the court regarding what work justified his salary well what explanation does he give for why the increases were so random and get an increase and then it stopped and i mean for the randomness of increases but what he says is that he discussed all of those with mr morgan the the mr morgan approved those on an as needed basis and that  mr herder is not a sophisticated financial guy who went to college did not graduate from college and that every one of those was discussed and every one of those was approved by mr morgan and then when he did not need the additional but why would they done in that manner is to give a reason for why they were so random now and not can usually get a salary bump your salary continues at that new level or you get a bonus it's at a certain time period every year when this is the other side isn't a good job of explaining how random this all was does look random i've only green with that but what mr herder is unequivocal about is that every one of these was approved and he discussed each one of them mr harder this is a small company keep in mind this is a small company they have five or six employees they may not do things according to standard business practices that that larger companies would do but the holding company itself that obviously the restaurant companies below employ a lot of folks explanation is the increased workload and also his as he said his family's financial obligations and also the fact that he was being required to commute from houston to various other places during this time period that spans i believe from the first go around the first or second quarter of two thousand and nine to the end of two thousand and ten the explanation for why it stops in two thousand and eleven as mr carter tells  mr morgan that he's going to leave the company in january of two thousand and eleven mr morgan bring someone else and then a two year spread i doubt i'd i'm not sure i've got that the bookend to that tom it's slightly less than two years yes but in two thousand and eleven he tells him i'm going to leave the company at that point he ceases asking for and could be expected ceases asking for any but there was a significant amount of time when he was there and i think at one point the accounting firm was handling this and other points others are just it's just coincidence that he the only times when he had financial troubles at home where he had this extra work at the office was when he happened to be in control of the books yes that's his story that is his story with respect to the fact issues regarding that i mean that the essential fact issue is did legacy approve his salary and did mr harder and legacy continue to operate under the letter of intent which by its own terms expired in november of two thousand and seven and which by its own terms contemplate salary and does not say that that salary is going to be the salary for all time and also are there any details and when i look at his discussion just he says morgan acknowledged to me that he knew of my additional compensation mor acknowledged you know when there's no details about where they met what was said there are two divorce there's no paper documentation proving any of this that is correct we were very limited in what discovery we c there are numerous fact issues which we've detailed in our reply brief their basic context their basic argument is that it makes no economic sense which is you know what you're getting out of the record show regard to the what the documentation if any with regard to the authorization i thought all wrong is all or all it's like as i said it's a small company and you know which they don't have strict operating procedures or anything like there come down to what he what he would do was he would temporarily increase the amount of what it registered in quick books i think this just shows his lack of sophistication on financial matters but wouldn't temporarily increase the amount of his salary and quit goods which would generate an extra payment and then decrease it back when he did not need the extra money  says i need an extra one thousand two hundred forty two dollars and twenty four soon kind of iteration in you saying that's the way the approval of her i don't think that's just specifically the way the approval occurred whatever the approval occurred was that i'm going to take some extra money it's going to be reflected in the books clearly mr morgan had access to all the records he could see what was thing that struck me as the amount of money i saw with one hundred twenty three thousand five hundred fifty seven dollars fifty eight cents  the record basically the record is that this you know they had a close working relationship that you know the offices were right next door all this information was shared there was nothing hidden everything was open and obvious testimony is that they they were they had separate addresses but the they show that they shared a common courtyard so that the offices more essentially side by side there so there's not this great separation during the entire period  regular basis there's no indication that mr morgan was the absentee type of owner that claims he was that goes to only a few minutes left here few seconds actually  in the misconduct is inherently undiscoverable and then the only question becomes when when the misconduct becomes apparent i think if you go back to the are the kind of the seminal case on this which is the course of the  petroleum case there's a texas supreme court has a different take on that which is not reversed or challenged in any way in the s p case middle of terrible facts but in the course of u k years that the case which which then it kicks in the discovery but what they said of course view was that some intermediary intermediate courts of said yeah fiduciary rule that said you don't have to look any further and others have said no you look differently but what they say   course of you is it's a more accurate to say that the existence of a relationship of trust and confidence does not change the rule that diligence in discovering the fraud is required but does not but does affect the application of the rule and that they're not prepared to say that one in a relationship of trust and confidence is always justified as a matter of law in the collecting every precaution until something occurs if you maintain that you are should have known  twenty ten red based on all of the documentation which is in the record showing that the amount of compensation that mr harper was receiving was clearly clearly all involved there's the i'm not sure it's before or after s b but there's the computer associates the altai case that's actually ninety four so i guess before but in that case the supreme court talks about the rationale for the  role and the rationale being that the fiduciary is presumed to have more knowledge than the party that is owed the fiduciary duty and they talk about that's a presumption but not a hard and fast rule fiduciary duty does have some responsibility to look into these matters and when you look at the cases where it seems to be more hard and fast rule you're talking about like an s p the parent child case the attorney client relationship or a trustee beneficiary relationship where there really is this kind of unequal knowledge and equal power and i don't think you have that in the context of this of the argument that there was a fiduciary relationship here but i think you have to you can't just say fiduciary relationship that's the end of that's the end of it they don't have to do anything they can sit back and wait till they have actual knowledge no you have to look at the facts context of each situation i don't think you can just say fiduciary relationship i mean are you saying that yes you certainly have to do that to determine if there is a producer and i ship the on that one is beyond that i'm saying that if there is a fiduciary relationship you have to look at the facts and circumstances of each case to determine whether the benefit in parties should have known whether there was information that came to the light that they should have known and  associates case it's not a strict actual knowledge standard in the reasons for that are based on each looking at each individual's situation going to look at the facts here  mr herder's testimony is pretty clear on how involved mr morgan was in this company that he was involved in pretty much all of the decision making that there was may in fact even when you look at what he says  about how he allegedly discovered this in october of two thousand and eleven is he was having a cell he was having his controller do a salary review a payroll review so he could determine what salary increases were going to be so that's how involved he was he made most all of the decision to maintain a button that would be a jury question rec how odd how fishy they look how bereft of any reasonable explanation other than embezzlement there would be but i will address a couple of things that were said by mr beverly in the opening argument he says that the explanation for these things was that he had an increased workload and had to begin commuting there's two problems with this explanation first it does not explain the fishing is of the pain and it explains why he wanted more money and secondly own stock to me that you many cases the fact that somebody says no that's not true creates a fact question what matz ishita teaches though is you don't take the the testimony at face value you take it in light of the full context  sense the things were matzoh she to says you must come forward with more persuasive evidence to support their claim than would otherwise be necessary in light of that you have to ask can a jury reasonably believe that on twenty get cations soley during the time when he had absolute control over the payroll system he went to mr morgan and said i need some extra money may i please alter the base salary calculation in quick books so that i get an extra thirty eight hundred forty six dollars and sixteen cents or i know that you have given me over three hundred thousand dollars in documented loans i made more money can i just give myself an extra paycheck this month and i promise i won't do this again once you have somebody else watching the payroll system that is what must be weighed under the summary judgment standard and frankly i don't think the district judge heard by saying that cannot be believed by a jury of six reasonable citizens years ever give up and i think once it comes down to that and i truly is the central question of this case it truly does resolve the merits of legacies claims against carter and it is the explanation for why limitations as to be analyzed the way that it is you know i guess the enigma for me is not disputing a thing that you've said but just having seen my share of cases that have a way of changing the landscape and get on with it and that's also the shortest distance between then if i may let me give an impassioned defense of the summary judgment rule i think in this case in retrospect i think there was always going to be an appeal to the fifth circuit so that's at some cost and i think the panel agrees that it makes sense for us to file a summary judgment motion because as we try this case the chief was in a day and a half he would have maybe tried an affidavit and i know he put serious limits on trial so it but your honor knows that judge hughes also is a fan of not letting things get out of hand and applying the judgment rule absolutely as written without bending it one iota to the three his docket of nonsense and i don't mean to be inflammatory to mr beverley i think he has done an outstanding job defending what i believe to genuinely be indefensible i don't fault judge hughes for taking a look at this motion and saying i believe i have something better to do with six people's time and my own time and the attorney's fees paid by both sides to go down and get ready for this case and to try it and what have i think that is a valid goal for the court i think it is entirely reasonable there is a way to say to the fact we're construed in the light most favorable to the movement and still get to where you want to be i think the way that you write that opinion is to say shita we are instructed we do not construe mr harper's bear testimony in the light most favorable we construe all of the undisputed facts in the light most favorable we will construe these odd furtive payments of thirty eight hundred forty six dollars and sixteen cents in mr herder's favor we will construe the fact that this never happened when anyone else had their eyes on the payroll system in his favor and still we cannot believe that a juror would say you know want i think that's actually what happened and that's how the opinion is written if i could i'd like to move on to the to the limitations be inherently undiscoverable the reason underlying both decisions is that a person to whom a fiduciary duty is owed is either unable to inquire into the fiduciary is actions or unaware of the need to do so relying not in the course  that is cited in this city on the other hand and i hope i get the pronunciations right here limitation does not begin to run in favor of a trustee and it gets to the cess tweet until the letter has a notice of a repudiation of the trust and there is no duty to investigate at least until the system has knowledge of facts sufficient to excite inquiry it is the same principle and i cannot fathom a circumstance in which you would make the determination which is conceive it here a y once you have established that this is texas law and that there is no exception to it there is no factual way of avoiding it and i believe this court must that wraps up the limitations argument very title there is a tremendous amount of argument that there were these documents from which legacy might have ascertained that he was paying himself too much the problem here is first of all under s v under course q under any of these cases there is no obligation to go ferret out what your fiduciary is doing and secondly for legacy to have had the actual knowledge that the right in front of its face necessary to create limitations beginning it has to have also been by somebody that knew what harder was supposed to be paid and it is undisputed that the only people that knew that were morgan and harder the rest of the people employed by legacy did not know what the boss made so had down and seen an extra paycheck or a paycheck that was for more than one fifty second of two hundred seventy five thousand dollars they would not have known that the first time they have anything that even arguably creates a question on that is a tax form that was signed by mr morgan within the limitations period they have also cited that there were some texas workforce commission filings even harder himself does not testify that morgan saw them and we have given the explanation why he generated these reports they were filed by quick books and then the resulting reports were sent back to mr harder now the fact that he was in one building mr morgan is in another building that is not actual knowledge that  access to knowledge the same thing that is insufficient under us based on these principles we think that this court should affirm i understand that if you were to of having been accused of not following that summary judgment standard i would be careful and say it is alleged that we should have known based on this tax form that was signed on january twentieth two thousand and ten is mr morgan's testimony that it came to light after mr harder left the company months past and because they were going to re evaluate salaries instructed the controller to make a list of what had been paid to various employees she generated that list mr morgan looked at it and said why on earth is mr arthur being paid in this way that's extraordinary this was many months after mr herder already  considering whether he needed to go through and increase our ease to keep them in place with the market presumably and that that was what spurred him to say i want to make sure i know who is making what in the legacy company that was the first time he the company before before that date he was the sole shareholder of the company going back if this was the outright that your client on the district judge saw it as was there a criminal referral in this matter i don't believe they're ones they'll be very brief with respect to the mets a sheet a case that is a antitrust case in which the economic sense rule as it is termed by mr because it did not make economic sense for them to predatory only price in the us market that rule definitely applies in an antitrust case and i think it's been rather loosely used by some other chords just kind of taking the words economic sense out of out of place and plugging it and in saying something most make economic sense so contact oxymoron that's that is what professor grubbs the university of texas may have taught me in my macro economics course but what you're saying with respect to just plucking out those words economic sense and putting them down into this case i don't agree that that's a correct analysis necessarily but i do it i do believe that mr harder did provide an explanation of why he was getting these extra payments with respect to the idea that only actual knowledge suffices i do not believe that is the rule with respect to the intersection of the do sherry duty and the discovery rule numerous cases say that it's still a no no or should have known standard based on the facts and circumstances of those cases if you're in the attorney client situation if you're in the parent child situation if you're in the trustee beneficiary situation perhaps a different rule perhaps the actual knowledge rule should apply but when you're sitting here it's apparent knowledge that that's to be it doesn't say actual it says it has to become a parent the parent and yes everything here was a parent there was absolutely no attempt to hide anything just cost as you pointed out if they claim he's a thief he's got to be the most incompetent the fair is around because a lot of those you know well there are but generally they're not not running companies companies like this everything that showed the exact amount of what he was paid was there in the records there was absolutely nothing that they make no claim of fraudulent concealment and when you look at the evidence of mr morgan's involvement in this company i think it is unreasonable to say that he can just sit back put his head in the sand not worry about anything and then after limitations runs apparently easily discover what the actual what he claims is the actual injury here and there was all he had to do was ask another employee to go run a quick books report and there was the evidence of the injury right in front of him so under those circumstances i think know or should have known standard should apply in the context of discovery rule the reasoning of a producer in the financial context is you trust that person with the books and that's what if that's the whole point of the producer you're in trusting them with the books therefore you shouldn't have to worry about it but that's not what the evidence the evidence shows that that is not the tire extent of the relationship here the evidence that it was to me you're sort of saying within fiduciary is there's a sliding scale of how consideration of whether the injury is or is not inherently undiscoverable and i think if you're going to take the fiduciary relationship into account you have to look at the nature of the particular fiduciary relationship is that one where you're just totally entrusting everything to somebody else or is it a situation like this where that clearly is not happening where mr morgan clearly is still going to be sort of a fiduciary is what you're saying sort of a fiduciary not maybe a way to put it