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IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS 

SAN ANTONIO DIVISION 

JONATHAN VILLARREAL, 

Individually and derivatively on behalf 

Of ZROBLACK, LLC 

 Plaintiffs, 

v. 

JOHN SAENZ, et al., 

 Defendants. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

 CASE NO. 20-00571-OLG 

 

 

DEFENDANTS REPLY TO “PLAINTIFFS’ RESPONSE TO DEFENDANTS GUNN, LEE & CAVE, P.C.’S 

AND MIGUEL VILLARREAL, JR.’S RULE 12(B)(6) MOTION TO DISMISS” 

TO THE HONORABLE ORLANDO L. GARCIA, UNITED STATES CHIEF DISTRICT JUDGE: 

1. Plaintiffs insist in their Response (Dkt. 15) that their nearly 40-page Complaint 

satisfies the pleading requirements under Twombly and Iqbal. Plaintiffs rely on fabricated, 

unsupported allegations that (1) Defendants had a pre-existing relationship with co-Defendant 

Saenz not disclosed to Plaintiff (Response, ¶ 22), and (2) Defendants charged Plaintiffs more for 

their representation compared to that of Saenz (id., ¶ 23). Plaintiffs’ legal arguments are not 

sufficient to make up for the deficiencies shown in Plaintiffs’ Complaint. Respectfully, Plaintiffs 

have not met their burden of showing plausible claims for relief against the Gunn Lee 

Defendants.1 

2. Plaintiffs’ lack of any plausible allegation of causation—a critical element 

required to obtain relief—is fatal to Plaintiffs’ claim for negligence (Count 6). Plaintiffs’ claim 

for breach of fiduciary duty (Count 7) is barred under Texas law by the anti-fracturing rule. 

Amendment of Plaintiffs’ Complaint will not cure these fatal defects. Dismissal of counts 6 and 

7 with prejudice is warranted. 

1

 Capitalized terms not defined herein shall be given the same meaning assigned to them in the Motion to Dismiss. 

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I. PLAINTIFFS CANNOT STATE A PLAUSIBLE CLAIM OF ATTORNEY 

NEGLIGENCE UNDER TEXAS LAW 

A. Plaintiffs cannot plausibly plead causation, a necessary element of a negligence 

claim. 

3. Texas law of attorney negligence requires the plaintiff to prove a case within a 

case. To prevail on a claim of professional negligence against an attorney, the plaintiff must 

show, among other elements, that the outcome of the prior representation would have been 

different if the attorney had acted differently. Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l 

Dev. & Research Corp., 299 S.W.3d 106, 112 (Tex. 2009); Rogers v. Zanetti, 518 S.W.3d 394, 

404 (Tex. 2017). In this instance, that requires Plaintiffs to plausibly plead if the Gunn Lee 

Defendants had acted differently, such as inserting terms into the Release requiring Saenz to 

return $740,000 and other tangible and intangible property (the “Disputed Property”) to 

Plaintiffs, that Saenz would have (a) agreed to those terms, and (b) complied with those terms. 

4. Plaintiffs’ Complaint is fatally defective in that respect. Plaintiffs’ application of 

Akin Gump in the Response does not refute the salient point. See Response ¶ 9-10. As set forth 

in the Motion to Dismiss, Plaintiffs cannot plausibly plead that Saenz would have agreed to 

return the Disputed Property, especially as it relates to the $740,000. The well-pleaded facts of 

the Complaint, and the reasonable inferences drawn therefrom, allege that Saenz had spent the 

money on home renovations or invested it in the stock market, i.e., it was no longer in Saenz’ 

possession. Similarly, given Plaintiffs’ recitation of factual allegations that Saenz has refused to 

return or turnover a laptop, Plaintiffs’ intellectual property, and other intangible property even 

after several demands from Plaintiffs belies the possibility that Saenz would have entered into 

the Release if it had contained those terms. 

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5. In short, the Release contains the terms to which the Parties agreed. There is no 

plausible allegation in the Complaint that, if taken as true, could support a finding that if the 

Gunn Lee Defendants had acted differently, e.g., by insisting that the Release include express 

provisions mandating that Saenz return the Disputed Property, that Saenz would have agreed or 

complied with such a provision. 

6. To the contrary, based on the factual allegations of the Complaint, the only 

reasonable inference is that Saenz would not have agreed to such terms and/or would not or 

could not have returned the Disputed Property even if it were required of him under the Release. 

Hence, amending the Complaint would be futile. The claim should be dismissed with prejudice. 

B. Plaintiffs cannot plausibly plead causation because the Complaint alleges a 

superseding cause of Plaintiffs’ alleged injuries. 

7. The Gunn Lee Defendants argued that the Complaint, on its face, established a 

superseding cause that precludes finding the Gunn Lee Defendants liable for Plaintiffs’ alleged 

injuries. In Response, Plaintiffs rely on factual allegations and “evidence” outside the Complaint 

or any documents that can be construed as part of the Complaint. See, e.g., Response ¶¶ 11-15. 

To the extent that Plaintiffs rely on anything outside of the Complaint, documents that can be 

construed as part of the Complaint, or reasonable inferences drawn therefrom, their arguments 

should be disregarded. 

8. Plaintiffs argue it is not reasonable to infer that Saenz refused to return the laptop 

and intangible property because J. Villarreal refused to characterize the $740,000 as a “gift”. 

This ignores the numerous instances where Saenz’ insistence that the money be characterized as 

a gift is referred to in the Complaint. See e.g., Complaint ¶¶ 34, 39. It also ignores the 

reasonable inference that Saenz was so insistent on this point because the money had been spent 

or invested, see id. ¶ 27, and Saenz did not have sufficient funds on hand to pay income taxes 

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owed on the $740,000 if it was characterized as salary. Instead, Plaintiffs insist that the only 

reason Saenz did not return the money (and other Disputed Property) is because the Release did 

not expressly require him to do so and, therefore, the Gunn Lee Defendants created the 

circumstance in which it was foreseeable that Saenz would not comply with the requirement to 

return the laptop and intangible property. See Response ¶ 16. 

9. Respectfully, Plaintiffs confuse and conflate their alternative theories of 

liabilities. The lack of precision in paragraph 16 of the Response, treating the analysis of the 

$740,000 and the laptop/intangible property, illuminates this confusion. As to the $740,000, the 

Gunn Lee Defendants assert that the well-pleaded facts of the Complaint and the reasonable 

inferences drawn therefrom show that Plaintiffs cannot establish negligence. As discussed at 

length in the Motion to Dismiss and above, the facts of the Complaint if taken as true, support a 

conclusion that Saenz did not return the money – and would not have agreed to or complied with 

the Release if it required him to return the money – because it was no longer in his possession. 

10. In contrast, Plaintiffs contend that Saenz’ alleged refusal to return the laptop and 

intangible property is a breach of the Release. See Complaint, Count 1, ¶ 58 & Count 6, ¶ 72. 

Under this theory, the Release required the return of the laptop and intangible property, but 

Saenz has breached that obligation (ostensibly because J. Villarreal refuses to characterize the 

$740,000 as a “gift”). Saenz’ alleged actions are independent and are the result of the ongoing 

dispute over how to treat the $740,000 –a situation the Gunn Lee Defendants did not create. 

11. The well pleaded facts of the Complaint and the reasonable inferences drawn 

therefrom support a finding that Saenz’ actions constitute a superseding cause that make it 

impossible for Plaintiffs to credibly plead that the Gunn Lee Defendants’ acts or omissions are 

the proximate cause of Plaintiffs’ alleged injuries. Plaintiffs cannot make a facially plausible 

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showing of this essential element of their negligence claim. This claim fails and should be 

dismissed with prejudice. 

C. Plaintiffs cannot plausibly plead a separate claim for breach of fiduciary duty. 

12. Plaintiffs acknowledge that under Texas law, a separate claim for breach of 

fiduciary duty only arises under certain conditions, generally speaking when an attorney has 

pursued his or her own interests to the detriment of the client’s interest. 

13. Plaintiffs rely on two allegations in their attempt to establish independent cause 

for a breach of fiduciary duty: that the Gunn Lee Defendants (a) had a preexisting relationship 

with Saenz that was not disclosed and (b) gave discounts to Saenz but not to Plaintiffs. From 

fabricated allegations, Plaintiffs then extrapolate the accusation that the Gunn Lee Defendants 

favored Saenz to protect the Firm’s financial interest in an ongoing relationship with Saenz. 

14. These allegations are false, and for purposes of the Motion to Dismiss, they are 

not “well-pleaded” facts that the Court must accept as true. Furthermore, even if those 

allegations are taken as true, they do not constitute the basis for permitting a separate breach of 

fiduciary duty claim to proceed against the Gunn Lee Defendants. 

15. While the Court must accept “well-pleaded” facts in the Complaint as true, it does 

not “strain to find inferences favorable to the plaintiff” and therefore, “to avoid a dismissal for 

failure to state a claim, a plaintiff must plead specific facts.” Greater Houston Transp. Co. v. 

Uber Techs., Inc., 155 F. Supp. 3d 670, 681 (S.D. Tex. 2015). To meet this burden, “the plaintiff 

must plead specific facts, not merely conclusory allegations[.]” Brown v. Bilek, CIV.A. H-09-

2193, 2009 WL 2601615, at *1 (S.D. Tex. Aug. 20, 2009). 

16. Here, the pertinent allegations are simply conclusory. Plaintiffs’ incorrect 

conclusions are wholly unsupported by any other well-pleaded facts in the Complaint. There are 

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no specific allegations, for example, that the Gunn Lee Defendants had previously represented 

Saenz in a particular matter or that Saenz recommended the Gunn Lee Defendants because he 

had worked with them previously. Moreover, the Engagement Letter (Dkt. 11, Exhibit A) sets 

out that ZroBlack was the original client. And, the Conflict Waiver (Id., Exhibit C) notes that 

Plaintiffs and Saenz together requested the assistance of the Gunn Lee Defendants in resolving 

issues between them provided the appropriate safeguard, e.g., waiver of conflict, was in place. 

In other words, the incorrect assumption that the Gunn Lee Defendants had a prior relationship 

with Saenz that caused them to favor Saenz in connection with the Release is a naked conclusion 

not supported by any well-pleaded facts. Therefore, the Court should not accept it is as true for 

purposes of adjudicating the Motion to Dismiss. 

17. Similarly, Plaintiffs have no direct knowledge of the Gunn Lee Defendants’ 

billing practices. The allegation that the Gunn Lee Defendants charged Saenz less than they 

charged Plaintiffs is not based on any other evidence or specific allegations. It is an untrue, bare 

conclusion that the Court does not need to accept as true for purposes of the Motion to Dismiss. 

Moreover, the Engagement Letter (Dkt. 11, Exhibit A) illustrates the falsity (implausibility) of 

this allegation as any invoices for service performed were sent to the client, i.e., ZroBlack, 

named in the Engagement Letter. How ZroBlack decided to pay the invoices or allocate the 

obligation amongst its members was beyond the control of the Gunn Lee Defendants. 

18. Furthermore, even if the Court did accept as true the unfounded allegations in the 

Complaint that the Gunn Lee Defendants had an undisclosed pre-existing relationship with Saenz 

and/or that the Gunn Lee Defendants billed Saenz less, those allegations are insufficient to 

support a plausible claim for a discrete breach of fiduciary duty claim under Texas law. 

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19. Plaintiffs assert the Gunn Lee Defendants pursued their own financial interest (in 

the form of a continued business relationship with Saenz), and they further argue that such 

behavior constitutes an independent breach of fiduciary duty. The Dallas Court of Appeals 

succinctly summarized the various decisions addressing the parameters for permissible 

independent breach of fiduciary claims against lawyers: when the “allegations complain about 

the quality of the Lawyers’ representation, specifically, the Lawyers’ failure to properly advise, 

inform, and communicate with the [clients] about the case,” such claims are categorized as 

“professional negligence”, not breach of fiduciary duty. Murphy v. Gruber, 241 S.W.3d 689, 

698 (Tex. App.—Dallas 2007, pet. denied); see also Beck v. Law Offices of Edwin J. (Ted) Terry, 

Jr., P.C., 284 S.W.3d 416, 436 (Tex. App.—Austin 2009, no pet.) (listing cases in which 

attorneys were found to have direct financial conflicts with the clients, which the attorneys did 

not disclose, such that independent claims for breach of fiduciary duty could proceed). Based on 

the face of the Complaint, it is apparent that Plaintiffs’ claim denominated as “breach of 

fiduciary duty” is, in substance, an allegation that the Gunn Lee Defendants failed to properly 

advise and inform the Plaintiffs in connection with the Release. See, e.g., Complaint ¶32. Under 

Texas law, that claim is a claim for professional negligence, not breach of fiduciary duty. 

20. Plaintiffs’ argument stretches the bounds of an independent breach of fiduciary 

duty far beyond any independent claims that have been recognized by the Texas Courts. For 

example, in the Riverwalk CY Hotels case, the Fourth Court of Appeals reversed a summary 

judgment ruling in favor of Akin Gump, holding that the law firm’s failure to tender a claim to 

its client’s insurer was a “deceptive practice” rather than a merely negligent one, where the client 

contended that Akin Gump failed to tender the claim because it wanted to maintain a lucrative 

hourly billing arrangement with the client. Riverwalk CY Hotel Partners, Ltd. v. Akin Gump 

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Strauss Hauer & Feld, LLP, 391 S.W.3d 229, 238 (Tex. App.—San Antonio 2012, no pet.); see 

also Archer v. Med. Protective Co. of Fort Wayne, Indiana, 197 S.W.3d 422, 428 (Tex. App.—

Amarillo 2006, pet. denied) (reversing summary judgment where plaintiff plausibly alleged that 

her counsel did not inform or advise her about a pretrial settlement offer because counsel 

promoted his interest in maintaining a relationship with the carrier above the plaintiff’s interests). 

Riverwalk CY Hotels does not support Plaintiffs’ position. 

21. Plaintiffs’ reliance on the Deutsch opinion is similarly misplaced. In that case, 

the appellate court reversed a directed verdict in favor of the law firm because, after the close of 

evidence, there was at least some evidence that supported a separate breach of fiduciary claim 

based on the firm’s alleged failure to advise its clients of potential conflicts of interest. See 

Deutsch v. Hoover, Bax & Slovacek, L.L.P, 97 S.W.3d 179, 190 (Tex. App.—Houston [14th 

Dist.] 2002, no pet.). In contrast, here, the Plaintiffs cannot even plausibly plead that potential 

conflicts were not disclosed to them and that they were not advised that they could retain 

separate counsel. See Waiver of Conflict, Dkt. 11, Exhibit C. 

22. The Gunn Lee Defendants did not engage in any deceptive practices to protect 

their potential fees, nor did they disadvantage Plaintiffs in any arrangement. The Complaint does 

not plausibly plead otherwise. 

23. The Gunn Lee Defendants’ conformance with Disciplinary Rule 1.07 underscores 

the weakness of Plaintiffs’ blanket assertion that assisting the parties in connection with the 

Release presented an unwaivable conflict of interest that unequivocally precluded the joint 

representation. “Conflict of interest” is not a talisman that automatically converts a negligence 

claim to a breach of fiduciary duty claim. At its core, Plaintiffs’ allegation that the Gunn Lee 

Defendants favored Saenz over J. Villarreal in connection with the Release is a contention about 

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the quality of the representation. Calling it a “conflict of interest” does not convert the claim or 

bring it into the exception to the anti-fracturing rule. 

24. Plaintiffs further contend that they have alleged billing fraud as an exception to 

the anti-fracturing rule. See Response ¶ 23. The only factual allegation in the Complaint related 

to this claim is the unfounded, false allegation that in connection with the joint representation, 

the Gunn Lee Defendants charged Saenz less than they did J. Villarreal. See id. The 

Engagement Letter (Dkt. 11, Exhibit A) evidences the entity that received the invoices and that 

determined how and when same were to be paid. Further, as discussed above, this is not a “wellpleaded” allegation that must be taken as true. Even if the Court does accept that allegation as 

true, it does not support a billing fraud claim that would constitute an exception to the antifracturing rule. The types of billing fraud that will give rise to a separate breach of fiduciary 

duty claim include “charg[ing] excessive time on certain legal matters and bill[ing] for work that 

was unnecessary.” Riverwalk CY, 391 S.W.3d at 238 (citing Sullivan v. Bickel & Brewer, 943 

S.W.2d 477, 481–82 (Tex.App.-Dallas 1995, writ denied)). Plaintiffs alleged neither. 

25. The “integrity of billing practices” attacked in the petition against Akin Gump 

was that the firm “grossly overworked [the] file” and “charged ... excessive fees, billed ... for 

work that was not necessary, [and] provided legal services in a manner intended to unnecessarily 

increase the scope of litigation and related activities to increase its billings.” Id. Similarly, in 

Sullivan, the client alleged that the firm billed for work that was not necessary or that was not 

actually performed, and charged the client for expenses that were not necessary or not properly 

attributable to that client. See Sullivan, 943 S.W.2d at 481–82. Those allegations are not at all 

similar to the allegation in the instant Complaint. 

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26. Finally, Plaintiffs claim that they have sufficiently plead an independent breach of 

fiduciary duty claim because the Complaint alleges that the Gunn Lee Defendants misused client 

confidences, specifically by “pressuring” J. Villarreal to settle with Saenz “’for the sake of the 

family’ based on [J. Villarreal’s] anxiety and mental health concerns.” Response ¶ 25. In 

essence, Plaintiffs are claiming that it was a misuse of so-called “client confidences” to 

emphasize the social, familial, and emotional benefits of settling a dispute. Plaintiffs cite no 

Texas opinion expanding on what constitutes improper use of client confidences for purposes of 

avoiding the anti-fracturing rule, and a diligent search has uncovered no such guidance. But 

surely, the Texas Courts would not find it improper for an attorney to explain to his or her client 

that a consensual resolution would facilitate family harmony and eliminate the stress and discord 

that would ensue from litigation between family members. 

27. Plaintiffs have not – and cannot – plausibly plead the type of conduct that gives 

rise to a separate claim of breach of fiduciary duty against the Gunn Lee Defendants. At its crux, 

Plaintiffs’ so-called breach of fiduciary claim is really about the quality of the representation. 

Under Texas law, such a claim is squarely within the realm of professional negligence, cannot be 

fractured and is barred under Texas law. Any amendment would not cure this defect and thus be 

futile. Accordingly, the breach of fiduciary duty claim should be dismissed with prejudice. 

II. PRAYER 

WHEREFORE, PREMISES CONSIDERED, the Gunn Lee Defendants pray that the 

Court enter an order dismissing with prejudice Counts 6 and 7 of the Complaint, and for such 

other relief to which they may be entitled at law or equity. 

 

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Dated August 10, 2020. 

Respectfully submitted, 

/s/ Natalie F. Wilson 

LANGLEY & BANACK, INCORPORATED 

745 E. Mulberry, Suite 700 

San Antonio, Texas 78212 

(210) 736-6600 Telephone 

(210) 735-6889 Telecopier 

Email: nwilson@langleybanack.com 

GEORGE H. SPENCER, JR. 

State Bar No. 18921001 

NATALIE F. WILSON 

State Bar No. 24067769 

COUNSEL TO MIGUEL VILLARREAL, JR., and 

GUNN, LEE & CAVE, PC 

CERTIFICATE OF SERVICE 

 I hereby certify that on August 10, 2020, a true and correct copy of the above and foregoing 

instrument was served via the Court’s electronic transmission facilities and served via first class 

mail, postage prepaid on: 

Steven A. Castello 

Joseph L. Lanza 

Charles M.R. Vethan

VETHAN LAW FIRM

11459 Huebner Road, Suite 101 

San Antonio, TX 78230 

210-824-2220 

Fax: 713-526-2230 

Counsel to Plaintiffs 

David A. Vanderhider 

Ryan J. Sullivan 

DYKEMA COX SMITH

112 E. Pecan Street - Suite 1800 

San Antonio, TX 78205 

210-554-5484 

Fax: 210-226-8395 

Counsel to Defendant John Saenz 

 /s/ Natalie F. Wilson 

 NATALIE F. WILSON 

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