Affirmed and Memorandum Opinion filed April 30, 2020.

In The

Fourteenth Court of Appeals

NO. 14-18-00336-CV

DEVON HARRISON & ROBERT HARRISON, Appellants

V.

MERITZ FIRE & MARINE INSURANCE CO., LTD, Appellee

On Appeal from the 400th District Court

Fort Bend County, Texas

Trial Court Cause No. 12-DCV-202473

MEMORANDUM OPINION

Appellee Meritz Fire & Marine Insurance Company, Limited sued Devon 

Harrison, Robert Harrison, and Northern & Western Insurance Company for fraud, 

conspiracy, and violations of the Texas Theft Liability Act.

1 Meritz obtained a 

1 Meritz filed additional claims but abandoned them at trial. Within Meritz’s fraud claim, 

Meritz pled a fraudulent inducement claim. No party argues this claim was abandoned at trial. 
2

summary judgment against Northern & Western Insurance Company.

2

 After a 

bench trial, the trial court entered a final judgment in favor of Meritz.

The Harrisons filed this appeal raising three issues. First, appellants contend 

that the statute of limitations bars all claims asserted against them, except Meritz’s 

fraudulent inducement claim. Appellants argue that the fraudulent inducement 

claim fails because reliance is not justified as a matter of law. Second, appellants 

argue that the evidence is legally and factually insufficient to support the judgment. 

Third, appellants contend that the trial court erred in failing to apportion

responsibility between appellants and Shannon Johnson, a designated responsible 

third-party. 

We conclude that appellants failed to establish reliance was not justified as a 

matter of law, and the trial court’s judgment can be affirmed on this ground.

Therefore, we do not address appellant’s first issue (regarding limitations) or their

second issue (regarding the sufficiency of the evidence).

3

Instead we address only

part of appellants’ first issue regarding justifiable reliance and appellants’ third 

issue regarding apportionment of damages between appellants and the designated 

responsible third-party. 

I. BACKGROUND

Meritz is a South Korean-based insurance company. Part of its business 

includes insuring “refund guarantees” in South Korea’s shipbuilding industry. To 

mitigate this risk, Meritz looks to a reinsurer to shift all or part of its exposure 

2 The summary judgment ruling is not at issue in this appeal.

3 Appellants’ second issue only challenges sufficiency related to the initial fraud,

conspiracy, and Theft Liability Act claims, not the fraudulent inducement claim. Like appellants’

limitations argument, we would still uphold the judgment on the fraudulent inducement claim

even if we were to conclude the evidence is insufficient to uphold the judgment on the claims for 

fraud, conspiracy, or the Theft Liability Act.
3

under the refund guarantees. Meritz used London Special Risks as its broker to 

help it locate appropriate reinsurers. Northern & Western Insurance Company

(“NWIC”) was one such reinsurer. 

At all relevant times, appellant Devon Harrison was the president, managing 

director, and sole owner of NWIC. Appellant Robert Harrison, Devon’s husband,

was a senior underwriter for NWIC. From September 2007 to September 2008, 

Meritz and NWIC entered into five reinsurance contracts totaling more than $350 

million dollars in reinsurance coverage. To assure Meritz that NWIC could insure 

such a large liability, NWIC, through Robert and Devon Harrison, represented that 

it had assets available on deposit with ABN AMRO Bank more than sufficient to 

cover the obligations and provided documentation to that effect. In exchange for 

the reinsurance obligations, Meritz paid $4,200,408.14 in premiums to NWIC.

Meritz was audited in 2008. As part of this process, Meritz needed 

additional information regarding the NWIC accounts at ABN AMRO Bank.

Unable to obtain the information that it needed from NWIC, Meritz’s broker 

requested the information from ABN AMRO Bank. As a result of this exchange, 

Meritz became concerned that the documentation provided by NWIC purporting to 

be from ABN AMRO Bank was fraudulent. 

On October 21, 2008, Meritz sent NWIC a written demand to verify the 

ABN AMRO accounts by one of two possible methods on or before October 24, 

2008. NWIC failed to satisfactorily perform the requested verification by the 

deadline or thereafter. During this period, NWIC represented to Meritz that NWIC

had plenty of assets to secure the reinsurance obligations between the parties.

Robert Harrison flew to South Korea in an effort to reassure Meritz that NWIC had 

the funds at ABN AMRO Bank and that NWIC would provide a secure bank 

communication to Meritz to confirm. Shortly thereafter, Robert sent an email 
4

indicating that the secure bank message was sent and would be received by Meritz 

shortly. No secure bank message was received from ABN AMRO Bank. 

Around this same period, Meritz received a secure bank communication 

from a bank in the Ukraine. The secure message stated that NWIC “wishes to 

confirm its full reservations of capital in support of its [reinsurance obligations]

. . . . to expiration of each unless sooner released of liability each to the benefit of 

Meritz . . . .” No account number was provided and no amounts in any such 

accounts were listed to confirm that NWIC had reserved assets for the reinsurance 

obligations. At trial, Meritz’s corporate representative testified that the secured 

message sent by NWIC was “totally different” from what Meritz requested. 

On October 27, 2008, Meritz instructed its broker to rescind or cancel the 

five reinsurance agreements with NWIC and to obtain a full refund of the

premiums. In its written instructions to its broker, Meritz stated that “[u]nder the 

current situation, we came to [a] conclusion that the [reinsurance obligations] 

provided by NWIC are false and fake and that no sufficient fund covering our 

potential claim exists under each reinsurance contract is deposited in ABN 

AMRO.” 

In November 2008, Meritz and NWIC entered into a settlement agreement. 

NWIC agreed to repay the premiums to Meritz, minus some fees paid to third 

parties, in exchange for a release. From December 2008 through March 2009, 

appellant Devon Harrison represented that the settlement payment would be made

but that NWIC was facing difficulties in paying the settlement amount for various

reasons. The settlement payment was never made. 

On November 21, 2012, Meritz filed its petition against NWIC, Devon, and 

Robert. A summary judgment was taken against NWIC and the remainder of the 

case proceeded to a bench trial. At trial, Meritz agreed to pursue only its claims of
5

fraud, civil conspiracy, and Theft Liability Act violations against the Harrisons. 

The trial court rendered judgment for Meritz against the Harrisons, jointly and 

severally, for damages in the amount of $4,200,408.00. This appeal followed. 

II. JUSTIFIABLE RELIANCE

Assuming without deciding that Meritz’s claims for fraud, civil conspiracy, 

and claims under the Theft Liability Act for the representations made in and

surrounding the reinsurance agreements are barred by limitations, there is one 

remaining claim—fraudulent inducement related to the settlement agreement 

between the parties. Appellants do not argue that the fraudulent inducement claim4

is barred by limitations, but instead assert that reliance was not justified as a matter 

of law. 

A. Applicable Law

In a bench trial in which the trial court does not file findings of fact or 

conclusions of law, we imply all findings and conclusions necessary to support the 

judgment.5 AMPD Holdings, Inc. v. Praesidium Med. Prof’l Liab. Ins. Co., 555 

S.W.3d 697, 706 (Tex. App.—Houston [1st Dist.] 2018, no pet.). Implied findings 

of fact have the same weight as a jury’s verdict. Id. The judgment must be affirmed 

if it can be upheld on any legal theory that finds support in the evidence. Wood v. 

Kennedy, 473 S.W.3d 329, 334 (Tex. App.—Houston [14th Dist.] 2014, no pet.). 

When the appellate record includes the reporter’s and clerk’s records, implied 

findings are not conclusive and may be challenged for legal and factual

sufficiency. Id. 

4 Meritz also pled a conspiracy to defraud, and specifically alleged that “[a]s part of the 

conspiracy and to further its objectives, Defendants, and each of them, further fraudulently 

induced Meritz to enter into the November 24, 2008 Agreement.”

5 Here, appellants filed a request for findings of fact and conclusions of law but did not 

file a notice of past due findings. See Tex. R. Civ. P. 297. 
6

We review the trial court’s decision for legal sufficiency of the evidence by 

the same standards applied in reviewing the evidence supporting a jury’s finding. 

Id. We review the evidence in the light most favorable to the challenged finding 

and indulge every reasonable inference that would support it. Id. (citing City of 

Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)). We credit favorable evidence

if a reasonable fact finder could and disregard contrary evidence unless a 

reasonable fact finder could not. Id.

Texas law has long imposed a duty to abstain from inducing another to enter 

into a contract through the use of fraudulent misrepresentations. Formosa Plastics 

Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998). 

A promise of future performance constitutes an actionable misrepresentation if the 

promise was made with no intention of performing at the time it was made. Id. at 

48.

In a fraudulent inducement claim, the plaintiff must show that it actually 

relied on the representation and that reliance was justifiable.6JPMorgan Chase

Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018). 

Justifiable reliance is typically a question of fact. Id. at 654. The element can be 

negated as a matter of law where reliance is not justified based on the particular 

circumstances. Id. (citing Nat’l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 

419, 424 (Tex. 2015) (per curiam)). “[A] party to a written contract cannot 

justifiably rely on oral misrepresentations regarding the contract’s unambiguous 

terms.” Id. at 658; see also Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc.,

590 S.W.3d 471, 499–500 (Tex. 2019) (same); AKB Hendrick, LP v. Musgrave

6 Appellants assert in a single footnote that Meritz did not actually rely on the 

representations related to the fraudulent inducement claim but did not cite to any authority or

portion of the record to support or further analyze this point. As a result, appellants have waived 

this issue on appeal. See Tex. R. App. P. 38.1(i).
7

Enters., Inc., 380 S.W.3d 221, 232 (Tex. App.—Dallas. 2012, no pet.) (“Generally, 

reliance on representations made in a business or commercial transaction is not 

justified when the representation takes place in an adversarial context.”). In 

determining whether justifiable reliance is negated as a matter of law, a court must 

consider the nature of the parties’ relationship and the contract. Orca Assets, 546 

S.W.3d at 653.

B. Analysis

Meritz claims that appellants fraudulently induced it to enter into the

settlement agreement by promising to pay the settlement amount when appellants 

never intended to do so. Meritz contends that it relied on these promises to its 

detriment, namely, in delaying legal action against NWIC and appellants and in the 

“total loss” of the premium payments. Meritz also provided a release to NWIC and 

its related entities and officers in exchange for the settlement payment.7

Appellants cite two cases to support its argument that, in an adversarial 

context, reliance is negated as a matter of law. In Ortiz v. Collins, the defendants 

purchased real property at a foreclosure sale. 203 S.W.3d 414, 418 (Tex. App.—

Houston [14th Dist.] 2006, no pet.). Defendants filed a forcible detainer suit to

evict plaintiff, the prior owner, from the real property but were unable to gain 

possession. Id. Defendants then hired an attorney to file a forcible detainer suit. 

Id. During the second lawsuit, the parties entered into settlement negotiations. Id.

Plaintiff alleged that defendants orally agreed to sell him the property and that 

defendants’ attorney indicated he would not execute a writ of possession unless 

plaintiff failed to perform under the settlement agreement. Id. at 418–19. 

7 At trial Meritz testified that the release provided by the settlement agreement was

conditioned on the settlement payment being made. 
8

Based on the alleged agreement, plaintiff did not defend the eviction lawsuit

which proceeded to judgment. Id. at 419. It was undisputed that there was no 

executed written agreement between the parties. See Id. Defendants and their 

attorney denied ever agreeing to sell, rejected plaintiff’s draft written settlement

agreement, and evicted plaintiff. Id. This court held that plaintiff’s reliance on 

defendants’ oral statements was not justified as a matter of law because the parties 

were in an adversarial relationship. Id. at 420–22.

In Valls v. Johanson & Fairless, L.L.P., the plaintiff sued opposing counsel 

for negligent misrepresentation. 314 S.W.3d 624, 635 (Tex. App.—Houston [14th

Dist.] 2010, no pet.). “Courts have repeatedly held a party may not justifiably rely 

on statements made by opposing counsel during settlement negotiations.” Id. at 

635–36 (emphasis added) (citing Am. Physicians Ins. Exchange v. Garcia, 876 

S.W.2d 842, 849 (Tex. 1994) (“We recognize that settlement negotiations are 

adversarial and that reasonable negotiation often involves hard bargaining by both 

sides.”)). This court concluded that because the parties had an adversarial

relationship and the negotiation process involved an arms-length transaction in 

which both sides were represented and advised by their own counsel, reliance was 

not justified as a matter of law. Id. at 636. 

Here, there is no evidence that appellants’ counsel made any

misrepresentation. Additionally, there is no evidence that Meritz was represented 

by counsel in negotiating or drafting the settlement agreement or that it relied on 

any oral statement inconsistent with the written, executed agreement between the 

parties. Meritz and NWIC executed a written agreement that is consistent with the 

representations made before and after the agreement was executed. There are no 

extra-contractual oral misrepresentations upon which Meritz relied; instead, all the 
9

representations made are contained within the contract. Thus, this case is 

distinguishable from both Valls and Ortiz. 

Appellants argue that any reliance on statements made during an adversarial 

negotiation process is unjustified and unreasonable as a matter of law. “Although 

reliance on statements made in an adversarial context is not generally justifiable 

. . . we have found [no case] holding that a party’s reliance on an opposing party’s 

statement during litigation is unjustified as a matter of law.” Anderson v. Cocheu, 

176 S.W.3d 685, 690 (Tex. App.—Dallas 2005, pet. denied). There is also no 

indication that Meritz could have discovered the fraud was an obvious lie, or that 

with a reasonable investigation the statement could have been refuted. See id.; see 

also Atl. Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 226 (Tex. App.—Houston [1st 

Dist.] 2004, pet. denied) (“[I]n the context of two opposing parties engaged in 

litigation and negotiating at arm’s length and from equal bargaining positions, one 

party cannot prevail in a subsequent action for fraud based on its ‘reliance’ on its 

opponents obvious lie or on a misrepresentation that, with reasonable diligence, 

could easily have been refuted.”). 

Other than stating that the parties’ relationship was adversarial at the time 

the settlement agreement was executed, appellants fail to argue or point to 

evidence that would support their contention that reliance was not justified as a 

matter of law. “A party may not rely justifiably on a fraudulent misrepresentation 

when ‘he knows that it is false or its falsity is obvious to him.’” Wyrick v. Bus. 

Bank of Tex., N.A., 577 S.W.3d 336, 349 (Tex. App.—Houston [14th Dist.] 2019, 

no pet.) (quoting Triesch v. Triesch, No. 03-15-00102-CV, 2016 WL 1039035, at 

*2 (Tex. App.—Austin Mar. 8, 2016, no pet.) (mem. op.)). Appellants do not direct 

us to conclusive proof establishing that Meritz knew or should have known that the 

promise to repay the premiums contained in the settlement agreement was false 
10

and that Meritz knew or should have known appellants had no intent or ability to 

perform that promise.

Our review of the record reveals at least a scintilla of evidence that Meritz 

justifiably relied on the promise to repay premiums made in the settlement 

agreement. In early November, Devon Harrison sent a letter regarding cancellation 

of the reinsurance agreements and agreed to the cancellation and refund of

premium payments to London Specialty Risks and Meritz. Devon remarked that 

Meritz “made a full informed decision . . . we are in no way obligated to consider 

this most unusual request and our decision to do so is based solely on our tenured 

relationship with London Specialty Risks Ltd. and not [Meritz’s] demands.” 

NWIC continued to dispute that it had done anything wrong throughout the 

relationships between the parties and it insisted it could honor the reinsurance 

obligations issued to Meritz. Similarly, on November 21, 2008, Devon sent a letter 

to Douglas Min, Senior Vice President of Meritz, indicating that their counsel had 

drafted the release of liability for Meritz’s review and consideration. The parties 

were not dealing with one another solely through counsel but were also 

communicating directly, attempting (before this case was filed) to resolve their 

dispute. Considering the evidence in the light most favorable to the challenged 

findings and indulging every reasonable inference that supports them, we conclude 

that there is legally sufficient evidence of justifiable reliance. 

We overrule appellants’ first issue as it relates to Meritz’s fraudulent 

inducement claim. We do not analyze the statute of limitations issue because it

would not change the result even if we decided in appellants’ favor. Tex. R. App. 

P. 47.1; see also Lance v. Robinson, 543 S.W.3d 723, 740 (Tex. 2018) (“Rule 47.1 

requires only that the court of appeals address issues necessary to dispose of the 

appeal.”). 
11

III. APPORTIONMENT OF DAMAGES

In their third issue, appellants argue that the trial court erred in failing to 

apportion responsibility between them and the designated responsible third-party,

Shannon Johnson, for their independent acts.

A. Applicable Law

Under Chapter 33 of the Texas Civil Practice and Remedies Code, the trier 

of fact must determine the percentage of responsibility to certain persons for the

harm at issue. See Tex. Civ. Prac. & Rem. Code § 33.003(a). The trier of fact is 

afforded wide latitude in determining the parties’ proportionate responsibility. See 

Jackson v. William Bros. Constr. Co., 364 S.W.3d 317, 325 (Tex. App.––Houston

[1st Dist.] 2011, pet. denied). We may set aside the fact finder’s determination of 

proportionate responsibility only if the finding is so against the great weight and 

preponderance of the evidence that it is clearly wrong and unjust. Id. Even if the 

evidence could support a different percentage allocation, an appellate court may 

not substitute its judgment for that of the fact finder. Id.; Samco Props., Inc. v. 

Cheatham, 977 S.W.2d 469, 478 (Tex. App.––Houston [14th Dist.] 1998, pet. 

denied). 

“If responsibility for the plaintiff’s injury cannot be apportioned with

reasonable certainty among the defendants and other responsible parties . . . then 

by definition the trier of fact cannot find any of them ‘responsible for a percentage 

of the harm,’ and Chapter 33 does not apply.” Lakes of Rosehill Homeowners 

Ass’n, Inc. v. Jones, 552 S.W.3d 414, 420 (Tex. App.—Houston [14th Dist.] 2018,

no pet.); see also Onyung v. Onyung, No. 01-10-00519-CV, 2013 WL 3875548, at 

*11 (Tex. App.—Houston [1st Dist.] July 25, 2013, pet. denied) (“When injuries 

resulting from the conduct of multiple tortfeasors cannot be apportioned with 

reasonable certainty, the plaintiff’s injuries are indivisible and the tortfeasors are 
12

liable for the whole.”) (citing Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 

1996)). 

B. Analysis

The trial court implicitly found that Meritz’s injury could not be apportioned 

with reasonable certainty between appellants and that the designated responsible 

third-party was not responsible for any portion of the harm. See Shields Ltd. 

P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017); AMPD Holdings, Inc., 555 

S.W.3d at 706 (“In a bench trial in which the trial court does not file findings of 

fact or conclusions of law, we imply all findings of fact necessary to support the 

judgment.”).

Appellants contend that the damages are not indivisible because appellants

made separate representations which prompted different premium payments at 

different times and that as a result, responsibility can be assigned between 

appellants. Even assuming that this is true, this argument does not take into 

consideration Meritz’s fraudulent inducement claim. Appellants make no 

argument as to how or why the injury caused by the fraudulent inducement can be 

apportioned between them in regard to this claim, and it is their burden to do so. 

See Amstadt, 919 S.W.2d at 654. 

Here, the harm inflicted as a result of the fraudulent inducement was the 

failure to pay the settlement amount in accordance with the agreement when 

Meritz performed its part of the bargain. In this case the harm resulted from a 

single, indivisible injury and joint and several liability among appellants is thus

appropriate in such a case.

8 See Onyung, 2013 WL 3875548 at *11. We disagree 

8 Appellants do not assert that there is no evidence to support the judgment, but only that 

the trial court erred in failing to apportion or implicitly finding that Chapter 33 was inapplicable 

as between appellants. 
13

with appellants that the injury itself was not indivisible. The trial court did not err 

in failing to apportion damages among appellants under Chapter 33. 

Appellants argue in this point that the trial court’s refusal to assign any 

percentage of responsibility to Johnson is against the great weight and 

preponderance of the evidence and is manifestly unjust. Appellants contend that 

Johnson defrauded NWIC and appellants in his representations regarding the 

accounts and asset availability at ABN AMRO Bank, and appellants relied on 

those representations when relaying them to Meritz. However, appellants fail to 

point to any evidence in the record that shows that Johnson was responsible for the 

fraudulent inducement damages.

In a factual sufficiency review, we must consider and weigh all of the 

evidence in a neutral light. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 

757, 761 (Tex. 2003). The evidence is factually insufficient only if we conclude 

that the verdict is so against the great weight and preponderance of the evidence as 

to be manifestly unjust. Id. The trial court is the sole judge of the credibility of the 

witnesses and the weight to be given to their testimony. Siddiqui v. Fancy Bites, 

LLC, 504 S.W.3d 349, 364 (Tex. App.––Houston [14th Dist.] 2016, pet. denied). 

We may not substitute our judgment for the fact finder merely because we reach a 

different conclusion. Id. 

“Our fraud jurisprudence has traditionally focused not on whether a 

misrepresentation is directly transmitted to a known person alleged to be in privity 

with the fraudfeasor, but on whether the misrepresentation was intended to reach a 

third person and induce reliance.” Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. 

Co., 51 S.W.3d 573, 578 (Tex. 2001). “If the false representations be made with a 

view of reaching the third person to whom it is repeated, and for the purpose of 

influencing him” then a fraud cause of action exists. Gainesville Nat’l Bank v. 
14

Bamberger, 77 Tex. 48, 13 S.W. 959 (1890); see also Ernst & Young, L.L.P., 51 

S.W.3d at 578. Where a party makes a false representation to another with the

intent that it should be repeated to a third party the third party can maintain an 

action in tort against the party making the false statement for the damages resulting

from the fraud. Am. Indem. Co. v. Ernst & Ernst, 106 S.W.2d 763, 765 (Tex. Civ. 

App.––Waco 1937, writ ref’d). 

Even taking all of appellants’ arguments regarding Johnson as true as far as 

the initial fraud in the reinsurance agreements, there is no evidence that Johnson 

had anything to do with the settlement agreement and the misrepresentations

forming the basis of the fraudulent inducement claim. Devon Harrison testified 

that she began to become suspicious about the legitimacy of the ABN AMRO bank 

accounts in the summer of 2008. Devon also testified that she had suspicion of the 

ABN AMRO accounts and funds allegedly therein when Meritz and NWIC 

reached settlement. According to Devon, she was desperately trying to repay the 

premiums and reaching out to Johnson to secure money for that purpose. In 

December 2008, NWIC filed a lawsuit against Johnson and others alleging fraud

and conspiracy, and detailing the fraud perpetuated on NWIC by Johnson and 

others relating to the fake accounts at ABN AMRO. Devon contacted the FBI with 

her attorney before filing the lawsuit against Johnson. At some point in time, she 

testified before a grand jury against Johnson and his wife. Notwithstanding the 

lawsuit against Johnson, or her participation in an FBI investigation into Johnson’s 

fraud, Devon testified that she continued to rely on Johnson’s communications 

regarding funds and their availability to repay the premiums owed under the 

settlement agreement, implying that Johnson’s continuing fraud was responsible

for the continued repayment issues.
15

The trial court weighs the evidence and is the sole judge of credibility. 

Johnson did not make any representations to Meritz to induce it into a settlement; 

the Harrisons did. Moreover, based on the evidence that Devon knew that Johnson 

was defrauding NWIC, the trial court could have reasonably concluded that 

Devon’s alleged reliance on Johnson’s continuing representations was not 

reasonable or credible. The trial court’s conclusion that Johnson was not 

responsible for the fraudulent inducement claim is not so against the great weight 

and preponderance of the evidence as to be manifestly unjust.

We overrule appellants’ third issue.

IV. CONCLUSION

Having overruled appellants’ issues on fraudulent inducement and 

apportionment, there is no need for the court to address the remaining issues raised 

by appellants. Even if appellants’ first and second issues were meritorious, the

judgment would be upheld on the fraudulent inducement claim, and there is no

cause to remand on apportionment. As a result, the judgment of the trial court is 

affirmed. 

/s/ Ken Wise

Justice

Panel consists of Justices Wise, Jewell, and Hassan.