Affirmed as Modified and Memorandum Opinion filed November 6, 2014.

In The

Fourteenth Court of Appeals

NO. 14-13-00730-CV

HUA XU, Appellant

V.

DAVID K. LAM A/K/A KA PUN LAM A/K/A KA P. LAM A/K/A DAVID 

LAM A/K/A KAPUN LAM AND JIA TIAN A/K/A ANGELA TIAN, 

Appellees

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Cause No. 2010-79571

M E M O R A N D U M O P I N I O N

This is a dispute between a real estate investor and the two agents who 

managed her properties. Hua Xu (the “Investor”) sued David K. Lam and Jia Tian 

(collectively, the “Agents”), seeking damages for breach of contract, fraud, and 

breach of a fiduciary duty. After a trial by jury, the Agents moved for a directed 

verdict, which the trial court granted on the basis of limitations.
2

On appeal, the Investor raises three issues challenging whether the statute of

limitations barred her suit. In a fourth issue, the Investor disputes whether the 

Agents were properly awarded attorney’s fees. We overrule the Investor’s first 

three issues and affirm the trial court’s take-nothing judgment. We sustain the 

Investor’s fourth issue, however, because the Agents did not establish any basis for 

their award of attorney’s fees. We modify the trial court’s judgment to delete the 

award of attorney’s fees and affirm the judgment as modified.

BACKGROUND

In 2003, the Investor purchased several rental properties in her hometown of 

Tucson, Arizona. Thanks to a very strong local market, the properties more than 

doubled in value in a short span of two years. The Investor decided to sell her 

properties while prices were high, then looked to reinvest her gains in additional 

real estate.

While shopping for new properties, the Investor came across an 

advertisement in a Chinese-language newspaper, which had been promoting the 

real estate market in Houston, Texas. The advertisement had been written by the 

Agents, who were in search of new investors. The advertisement indicated that the 

Agents knew of several condos in the Houston area, which could easily provide an 

investor with a dependable source of rental income. The advertisement also 

represented that the Agents could manage these properties on behalf of an investor 

and achieve a 100% occupancy rate and a high return on investment of at least 

20%.

The Investor contacted the Agents by phone to discuss a possible 

investment. Intrigued by her prospects, the Investor flew to Houston and arranged 

to meet the Agents in person. Upon her arrival, the Agents requested that the 

Investor sign a brokerage agreement before they showed her any properties. The 
3

parties used a standard form prepared by the Texas Association of Realtors to 

execute their contract. In the agreement, the Investor granted to the Agents the 

exclusive right to represent her in all property acquisitions in Houston. The 

agreement operated for a period of one year, commencing on November 2, 2005,

and ending on November 2, 2006.

On the final page of the brokerage agreement, the parties added a special, 

handwritten clause pertaining to commissions. The clause stated as follows: 

“Buyer pays $1,000.00 for acquisition of each condo recommended by Broker. 

SFR[1] & Multi-Residential Unit commission charge on a case by case basis.”

Within five months of signing the brokerage agreement, the Investor 

purchased twenty condos and two single-family residences. After closing on each 

property, the Investor entered into a management contract with the Agents, which 

authorized them to negotiate and execute leases on the Investor’s behalf.

2

The 

management contract also gave the Agents the power to collect rents and perform 

other duties as a typical landlord. The Agents bargained for a monthly management 

fee in exchange for these services, which continued indefinitely until either party 

submitted written notice of termination.

The Investor anticipated that the Agents would use their special contacts 

with the local division of Section 8 Housing to quickly fill her properties with 

tenants. Foreseeing that her tenants would also be government-sponsored, the 

 

1

Single-Family Residence.

2

The record contains a copy of only one of the management contracts, which, like the 

brokerage agreement, is just a standard form prepared by the Texas Association of Realtors. The 

terms of the missing management contracts are not material to this case because the parties’ 

contract arguments focus exclusively on the brokerage agreement. For purposes of this appeal, 

we will assume that the same contract form was used for each of the Investor’s properties, which 

is consistent with the parties’ testimony at trial.
4

Investor believed that her properties would generate a steady stream of income, 

with a low risk of default.

The properties did not perform as expected, however. All of the properties 

required repairs, which added to the Investor’s expenses and reduced her bottom 

line. Ten condos allegedly produced no income at all, despite assurances by the 

Agents that they had been fully leased. Of the remaining twelve properties, only 

four generated rents at an acceptable rate of return.

The Investor faced a serious cash flow problem in the Spring of 2006, which 

forced her to liquidate a large portion of her assets. Between May and October of 

that year, the Investor sold eight of her condos, each at a net loss.

3 As she 

continued to lose money to taxes and other costs, the Investor elected to terminate 

her management contracts with the Agents. The termination notices were 

submitted over a two-week period at the end of January 2007.

The Investor filed this action on December 7, 2010, asserting causes of 

action for breach of contract, fraud, and breach of a fiduciary duty.

4

The Agents 

counterclaimed for defamation and declaratory relief. The Agents also asserted the 

statute of limitations as an affirmative defense.

The Investor’s contract claim focused on an oral promise that had allegedly 

been made when the parties executed their brokerage agreement. The alleged 

promise contained virtually the same terms as the Agents’ newspaper 

advertisement. According to the Investor, the Agents promised that if she ever 

 

3

There is conflicting evidence regarding the number of resold properties. The Investor 

testified that she had sold nine properties by the end of October 2006, but her records reflect only 

eight conveyances. In the end, this discrepancy has no effect on the disposition of this appeal.

4

Separate causes of action were also asserted for conversion, exemplary damages, and 

theft under the Texas Theft Liability Act, but the Investor has not appealed the trial court’s takenothing judgment as to these claims, and we do not address them.
5

purchased a property, then they would have it leased within two weeks of closing, 

and the return on investment would meet or exceed 20%.

The rate of return supposedly contained two components, and the first 

component referred to the Investor’s expected annual rental income. For each 

property purchased, the Agents allegedly promised that the Investor would recover 

at least 20% of her sales price in a year’s worth of rent.5The second component 

related to the property’s value. According to the Investor, the Agents promised that 

she could buy properties that were 20% below market value, meaning she would 

realize a huge profit if she decided to resell.

The Investor testified that the Agents made these promises in exchange for a 

$1,000 commission made payable upon the acquisition of any property. The 

Investor acknowledged that the terms of these promises had not been reduced to 

writing. Nevertheless, the Investor claimed that the promises had been negotiated 

in the parties’ brokerage agreement. The Investor essentially argued that the 

handwritten clause at the end of the brokerage agreement represented both a 

commission provision and a guaranty.

The Investor’s fraud claim largely mirrored her claim for breach of contract. 

She alleged that the Agents had wrongly induced her into signing the brokerage 

agreement by promising that she would see a 20% return on her investment not 

long after she purchased her properties.

As for her final claim, the Investor alleged that the Agents had breached a 

fiduciary duty when they stole or converted funds that belonged to her. The 

 

5

Excluding repairs and other expenses, the Investor’s total cost basis in the twenty-two 

properties was less than $480,000, with an average sales price per property of approximately 

$21,760. So, assuming there were an enforceable promise, the Investor would expect, per 

property, an average return of $4,352 each year ($21,760 × 0.20), or rents of $362.67 per month 

($4,352 / 12).
6

evidence at trial focused on a check from a local housing authority, which had been 

written in August 2006. Although the Investor was designated as the payee, the 

check had actually been delivered to the Agents in their capacity as property 

managers. According to the Investor, the Agents forged her name to the back of the 

check and cashed it for themselves. The Agents denied any forgery, claiming 

instead that the Investor’s husband was the person who had endorsed the check. 

The Agents further asserted that they cashed the check and delivered the money to 

the Investor’s husband, who was in Houston making repairs on some of the 

properties.

The Agents moved for a directed verdict as soon as the Investor rested her 

case. The motion was based on several theories, including the parol evidence rule, 

lack of evidence, and the statute of limitations. The trial court focused exclusively 

on the affirmative defense of limitations. In its final judgment, the court ruled that 

the Investor should take nothing on her causes of action because each of them was 

barred by the statute of limitations.

The Agents consented to entry of judgment without having put on any 

evidence of their counterclaims. They effectively abandoned their own claims for 

relief. Despite having received no affirmative damages, the court awarded the 

Agents $50,000 in attorney’s fees under Chapter 38 of the Texas Civil Practice and 

Remedies Code. The Investor challenged this award and the directed verdict in a 

motion for JNOV, but the trial court never ruled on the motion. A motion for new 

trial was also filed, but it was corrupted during the electronic filing process, and 

has not been included in our record.
7

ISSUES PRESENTED

In her first three issues, the Investor challenges the application of the statute 

of limitations. In her fourth issue, the Investor challenges whether the Agents are 

deserving of attorney’s fees.

Appearing pro se on appeal, the Agents respond that the trial court correctly 

determined that the Investor’s suit was time-barred. By cross-point, they argue that 

the trial court’s directed verdict can be supported by additional theories even if the 

statute of limitations does not apply. The Agents further assert the following

ancillary arguments: (1) this court lacks appellate jurisdiction, (2) the appeal 

should be dismissed because of procedural defects, (3) a third party should be held

jointly and severally liable, and (4) the Investor should be sanctioned for filing a 

frivolous appeal. We begin with the Agents’ ancillary arguments, addressing all 

but the motion for sanctions, which we reserve until after conducting our merits 

analysis on the four other issues presented by the Investor.

THE AGENTS’ ANCILLARY ARGUMENTS

A. Jurisdiction

The Agents assert that we lack jurisdiction because the Investor is allegedly 

a fugitive and an adulteress. This issue has no basis in law or fact. There is no 

evidence that the Investor is a fugitive or an adulteress, and the only authorities 

cited by the Agents are two criminal cases, which are not on point. See Estelle v. 

Dorrough, 420 U.S. 534 (1975) (per curiam) (discussing a Texas statute that 

divested jurisdiction from the Court of Criminal Appeals if the defendant escaped 

from custody during the pendency of his appeal); Smith v. United States, 94 U.S. 

97 (1876) (providing that the Supreme Court has the discretion to refuse to hear a 

criminal case if the defendant has escaped from custody).
8

B. Motion to Dismiss

In their next issue, the Agents submit an open-ended question, asking

whether the appeal should be dismissed because the Investor did not post a 

supersedeas bond. The Agents have not presented this issue in a manner that 

comports with the Rules of Appellate Procedure; their brief contains no argument 

or conclusion whatsoever. The only discussion in the Agents’ brief is a recitation 

of Rule 24.2(c), which pertains solely to the determination of a debtor’s net worth. 

See Tex. R. App. P. 24.2(c). 

Our rules allow for the involuntary dismissal of an appeal when the 

appellant has failed to comply with a court order. See Tex. R. App. P. 42.3(c). In 

this case, however, there is no indication that the Investor was ever ordered to post 

a bond, and the Agents have not cited to any authorities showing that the mere 

failure to do otherwise demands a dismissal. We overrule this issue as inadequately 

briefed. See Tex. R. App. P. 38.1(i); Tex. R. App. P. 38.2(a)(1).

In a separate issue, the Agents argue that the appeal should be dismissed 

because the Investor’s husband was not joined as an indispensable party. The 

Agents submit that joinder is required because this case involves community 

property and we, as the reviewing court, cannot afford the Investor’s husband 

complete relief unless he participates in the appeal. The Agents’ premise is flawed: 

this case has nothing to do with the community interests of the Investor’s property.

The Investor’s husband was not joined as a party at trial and there is no reason for 

requiring his participation here.

C. Joint and Several Liability

The Agents argue next that a third party, whom they identify as the man 

allegedly having an affair with the Investor, should be jointly and severally liable 
9

for damages incurred in furtherance of a civil conspiracy. This issue is completely 

irrelevant because the trial court did not award any amount of damages for civil 

conspiracy. We overrule this issue.

DIRECTED VERDICT

We now proceed to the merits of this appeal, beginning with the Investor’s 

first three issues, which challenge the trial court’s directed verdict.

A. Standard of Review

A trial court may direct a verdict in favor of the defendant if the evidence 

conclusively establishes a defense to the plaintiff’s cause of action. See Prudential 

Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). For such 

matter of law questions, our review is de novo. See JSC Neftegas-Impex v. 

Citibank, N.A., 365 S.W.3d 387, 396 (Tex. App.—Houston [1st Dist.] 2011, pet. 

denied). Under this standard, we must determine whether the record contains any 

evidence of probative value that raises a fact issue on the material questions 

presented in the suit. See Bostrom Seating, Inc. v. Crane Carrier Co., 140 S.W.3d 

681, 684 (Tex. 2004). We consider all of the evidence in the light most favorable 

to the party against whom the verdict was directed and disregard all contrary 

evidence and inferences. See Coastal Transport Co. v. Crown Cent. Petroleum 

Corp., 136 S.W.3d 227, 234 (Tex. 2004).

B. Fraud

We start with the Investor’s fraud claim because our analysis of this issue

will guide our subsequent treatment on the claim for breach of contract.

Fraud claims have a four-year statute of limitations, which begins to run as 

soon as the cause of action accrues. See Tex. Civ. Prac. & Rem. Code 

§ 16.004(a)(4). The accrual date is normally a question of law for the court to 
10

decide. See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 567 (Tex. 

2001). Generally, a cause of action accrues when a wrongful act causes a legal 

injury. See Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620, 623 (Tex. 2011) (per 

curiam). Because the statute of limitations is an affirmative defense, the Agents 

assumed the burden of proving when the Investor’s fraud claim actually accrued. 

See Tex. R. Civ. P. 94; Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990).

The Investor asserted a single claim of fraud, but her cause of action was 

actually based on three discernable promises: (1) that the Agents would locate 

properties for purchase that were 20% below market value; (2) that the Agents 

would lease any property within two weeks of closing; and (3) that each property 

would generate rental income at a 20% rate of return. The Investor would have 

suffered a distinct and actionable injury if any one of these alleged promises was 

not met. The burden accordingly fell on the Agents to show when the injuries

occurred. Cf. Haase v. Abraham, Watkins, Nichols, Sorrels, Agosto & Friend, LLP, 

404 S.W.3d 75, 89 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (where cause 

of action for legal malpractice was based on three separate factual allegations, the 

defendant had the burden of conclusively establishing when each factual allegation 

resulted in a legal injury to the plaintiff).

The evidence is undisputed that the Investor purchased all of her properties 

between December 2005 and April 2006. If the Investor suffered an injury relating 

to the Agents’ first promise, then her cause of action necessarily accrued when the 

Investor purchased a property. At the time of purchase, the Investor knew or 

should have known whether her purchase price was 20% below market value.

Similarly, if the Investor suffered an injury relating to the Agents’ second promise, 

then her cause of action must have accrued two weeks after the purchase date. By 

that time, the Investor knew or should have known whether the property was 
11

leased or vacant. Because any injury relating to the first two promises must have 

occurred more than four years before December 7, 2010, when the Investor filed 

her suit, we conclude that any fraud claims based on these promises were barred by 

the statute of limitations.

Our analysis of the third promise is somewhat more complicated. An injury 

relating to this promise would occur only if a property failed to generate rental 

income at a 20% rate of return. During the hearing on the motion for directed 

verdict, the trial court concluded that the Investor had only a single cause of action 

relating to this promise, and that it necessarily accrued in either the Spring of 2006, 

when the Investor suffered her cash flow problem, or on November 2, 2006, when 

the brokerage agreement finally expired. We perceive at least two problems with 

this reasoning.

First, the expiration of the brokerage agreement reveals nothing about when 

the Investor suffered an injury. The Investor’s right to seek judicial relief depended 

on whether a property had generated income, not on whether the Agents had the 

exclusive right to represent the Investor. If the Investor owned a property that 

consistently performed well during the operational period of the brokerage 

agreement, an injury could have occurred if the property failed to produce income 

after the agreement was no longer in effect. The Investor indicated at trial that the 

Agents’ promise was intended to continue indefinitely in this manner. Therefore, it 

was incumbent upon the Agents, as the movants below, to conclusively establish 

when the Investor suffered her injury. They failed to show that an injury occurred 

upon the simple expiration of the brokerage agreement. Cf. Atkins v. Crosland, 417 

S.W.2d 150, 152–53 (Tex. 1967) (holding that an accountant in a professional 

negligence case had not conclusively established a limitations defense where the 
12

accountant proved only the last day that he had represented the client, instead of 

the day that the client suffered his actionable tax injury).

The Agents correctly observe that an injury did occur in the Spring of 2006. 

The evidence is undisputed that, during this time period, the Investor experienced a 

cash flow problem because some of her properties were producing less income

than what she had anticipated. The fact that some properties underperformed, 

however, does not mean that the Investor suffered actionable injuries with respect 

to all of her properties. If one property was overperforming while another property 

was underperforming, a cause of action would accrue for only the property that 

resulted in injury to the Investor.

This point brings us to our second problem with the directed verdict: the trial 

court did not conduct any sort of property-by-property analysis when assessing 

whether a cause of action had accrued. The court erroneously concluded that there 

was only one injury for limitations purposes when it should have acknowledged 

that the Investor might have had a separate injury and a separate cause of action for 

each property she owned. Cf. Haase, 404 S.W.3d at 89 (plaintiff had a separate 

injury and a separate cause of action for each allegation of legal malpractice). 

Because there is no indication that either the Agents or the trial court analyzed the 

properties on an individual basis, we must now turn to the evidence to see how 

many injuries the Investor suffered and whether the dates of injury, if any, were 

conclusively established.

There was virtually no live testimony at trial regarding the specific 

performance of individual properties. The best evidence we have on this particular 

issue is a detailed spreadsheet prepared by the Investor. The spreadsheet contains 

the following information for each property: (1) when the property was purchased,

and its purchase price; (2) when the property was sold, and its sales price, if it was 
13

sold at all; (3) the expenses attributable to the property; (4) the rental income 

expected from the property, based on a 20% rate of return; and (5) the total income 

actually produced by the property over the course of the Investor’s ownership.

The spreadsheet reveals that eight properties were sold in May and October 

of 2006. In terms of performance, these properties ran the full gamut: five 

properties produced no income at all; two properties beat expectations and 

exceeded the 20% rate of return; and one property underperformed, producing less 

than 50% of what the Investor contended had originally been promised. The 

Investor suffered no injury with respect to the two properties that overperformed, 

unless there was a brief period of time in which they underperformed; the 

spreadsheet does not go into such depth. Assuming that the Investor had a cause of 

action for all eight properties, we can deduce that each cause must have accrued no 

later than the property’s date of sale. By that time, the Investor knew or should 

have known whether she had suffered an injury. Because all of the properties were 

sold more than four years before the Investor filed suit, the statute of limitations 

barred any claim arising from those properties. In this respect, the Agents were 

properly entitled to a directed verdict.

The Investor retained one of the remaining properties and sold the other 

thirteen in 2007 or later, less than four years before suit was filed. The spreadsheet 

indicates that two of the properties overperformed, producing more rental income 

than what the Investor contended had been promised. If the Investor suffered an 

injury with respect to either of these properties because of a momentary period of 

underperformance, the date of such injury is not apparent from the record. Unlike 

with the previous two overperforming properties that were sold in 2006, we cannot 

determine with any certainty that an injury regarding these properties, if any, 

necessarily occurred more than four years before the Investor filed her suit. 
14

Accordingly, the Agents did not carry their burden of conclusively establishing 

that the statute of limitations barred any claim relating to these properties.

Seven more properties produced some amount of rental income, but at less 

than a 20% rate of return. The spreadsheet does not indicate whether these 

properties consistently underperformed since the date of purchase (making the 

Investor’s injuries more than four years old at the time of suit), or whether they 

underperformed only at some later date (conceivably placing the Investor’s suit

within the limitations period). The accrual date for any cause of action relating to 

these properties was not conclusively established.

The final five properties were held for more than two years, through June 

2008, but according to the spreadsheet, they produced no income during that entire 

period of ownership. Despite this apparent failure to generate rents, a finder of fact 

could determine, based on other evidence in the record, that the properties had not 

underperformed consistently since their dates of purchase. The Investor testified

that more than $18,000 in rents had not been recorded in her spreadsheet because 

she was unable to identify the exact properties to which the rents should be 

credited. The Investor also testified that, on one occasion, the Agents had reported 

that all of her properties were fully occupied. Viewing this evidence in the light 

most favorable to the Investor, a reasonable juror could infer that one or more of 

these five remaining properties had been leased for some length of time at the rate 

promised by the Agents. A date of injury, if any, was not conclusively established.

The Agents carried their burden of showing that the statute of limitations 

barred a fraud claim arising from some of the Investor’s properties, but not all of 

them. The trial court erred to the extent it granted a directed verdict on those 

claims for which a date of injury had not been proven.
15

When a trial court makes an error of law, its judgment should not be 

reversed unless the error “probably caused the rendition of an improper judgment.” 

See Tex. R. App. P. 44.1(a)(1). An error committed in the context of a directed 

verdict does not result in the rendition of an improper judgment if the record 

supports a separate reason for granting the directed verdict. See Gomer v. Davis, 

419 S.W.3d 470, 476 (Tex. App.—Houston [1st Dist.] 2013, no pet.). On appeal, 

we may consider any theory in support of the trial court’s judgment, even if it was

not expressly stated in the motion for directed verdict. See Indus. III, Inc. v. Burns, 

No. 14-13-00386-CV, 2014 WL 4202495, at *8 (Tex. App.—Houston [14th Dist.] 

Aug. 26, 2014, no pet. h.) (mem. op.).

The Agents assert as a cross-point that a directed verdict was appropriate 

because the Investor failed to produce evidence supporting an essential element of 

her claim. A directed verdict may be granted because of insufficient evidence. See 

Exxon Mobil Corp. v. Kinder Morgan Operating L.P., 192 S.W.3d 120, 126 (Tex. 

App.—Houston [14th Dist.] 2006, no pet.). We must therefore review the evidence 

applying the legal sufficiency standard set forth in City of Keller v. Wilson, 168 

S.W.3d 802 (Tex. 2005). Under this standard, we may not sustain a challenge to 

the sufficiency of the evidence unless (1) there is a complete absence of a vital 

fact, (2) the court is barred by rules of law or of evidence from giving weight to the 

only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital 

fact is no more than a scintilla, or (4) the evidence conclusively establishes the 

opposite of the vital fact. Id. at 810.

To establish a cause of action for fraud, the plaintiff must demonstrate each 

of the following elements: (1) the defendant made a material representation; (2) the 

representation was false; (3) when the representation was made, the defendant 

knew it was false or made it recklessly without any knowledge of the truth and as a 
16

positive assertion; (4) the defendant made the representation with the intent that the 

plaintiff should act upon it; (5) the plaintiff acted in reliance on the representation; 

and (6) the plaintiff thereby suffered an injury. See Italian Cowboy Partners, Ltd. 

v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011). If the 

representation is a promise of future performance, the plaintiff must further 

demonstrate that the defendant made the promise with no intent of performing it. 

See Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768, 774 (Tex. 2009) 

(per curiam).

Assuming the existence of an enforceable promise, the Agents argue that 

there is no evidence that they made the promise while having no intent to perform

it. We agree.

A promise of future performance is actionable in fraud only if, at the time 

the promise was made, the promisor intended to deceive and had no intention of 

performing. See Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, 

Inc., 960 S.W.2d 41, 48 (Tex. 1998). Showing that a party had no intent to perform 

“is not easy,” as such matters are not usually susceptible to direct proof. See Tony 

Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 305 (Tex. 2006). The failure to 

perform, standing alone, is no evidence of intent. See Spoljaric v. Percival Tours, 

Inc., 708 S.W.2d 432, 435 (Tex. 1986). Similarly, a party’s denial that a promise 

had been made is not legally sufficient evidence of fraudulent inducement. See 

Tony Gullo, 212 S.W.3d at 305; T.O. Stanley Boot Co. v. Bank of El Paso, 847 

S.W.2d 218, 222 (Tex. 1992). The claimant must present some circumstantial 

evidence, however slight, showing an intent to deceive. See Spoljaric, 708 S.W.2d 

at 435.

In this case, the Agents’ only alleged promise as to which limitations does 

not fully bar the Investor’s fraud claim was that they would lease any property the 
17

Investor purchased at a rate that guaranteed a return on investment of at least 20%. 

The Investor has not cited, and we cannot find, any evidence that would support a 

finding that the Agents had a present intent to deceive the Investor when this 

promise was allegedly made. In fact, the evidence conclusively showed that the 

Agents partially performed the promise, despite their denial of having made it.

The evidence showed, for instance, that the Agents executed management 

contracts for each of the Investor’s properties with the express purpose of leasing 

them on the Investor’s behalf. Many, if not all, of the properties were leased, and at 

least four produced rental income that exceeded the Investor’s expectations. The 

Agents also testified that they went “the extra mile” to find tenants from a nearby 

city who had been displaced by a natural disaster. This undisputed evidence of 

partial performance negated the Investor’s claim of fraud. See Reyna v. First Nat’l 

Bank in Edinburg, 55 S.W.3d 58, 68 (Tex. App.—Corpus Christi 2001, no pet.) 

(holding that defendants’ tender of partial payment negated any claim that they had 

no intention of paying for equipment); Bank One, Tex., N.A. v. Stewart, 967 

S.W.2d 419, 446 (Tex. App.—Houston [14th Dist.] 1998, pet. denied) (holding 

there was no evidence that party made representations with intent not to perform 

on note when the party subsequently made payment for five years). Therefore, as 

to those fraud claims that could not be dismissed on the basis of limitations, the 

Agents were still entitled to a directed verdict on no-evidence grounds.

C. Breach of Contract

A breach of contract occurs when a party fails or refuses to do something 

that was promised. See Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 227 (Tex. 

App.—Houston [14th Dist.] 2008, no pet.). The cause of action accrues 

immediately upon the breach, and the statute of limitations runs for four years from 
18

the date of accrual. See Tex. Civ. Prac. & Rem. Code § 16.051; Barker v. Eckman, 

213 S.W.3d 306, 311 (Tex. 2006).

The Investor alleged in her pleadings that the Agents breached a contract in 

three ways: (1) by failing to find properties that would appreciate in value; (2) by 

failing to get tenants for her properties “for many months”; and (3) by failing to 

lease her properties at a rate that yielded a 20% return on her investment. 

Essentially, the Investor claimed that the Agents failed to perform the same three 

promises that were the focus of her claim for fraud.

The Investor did not identify in her pleadings a written contract that 

expressly contained the terms of these promises. Instead, the Investor testified at 

trial that the parties bargained for these promises when they executed their

brokerage agreement. The Investor referred specifically to the handwritten clause 

at the end of the brokerage agreement, which mentioned an additional payment of 

$1,000 upon the purchase of any condo. The Investor testified that she purchased 

the Agents’ promises as a guaranty whenever she paid this extra $1,000.

The brokerage agreement did not contain any sort of merger or integration 

clause. In the absence of such a provision, the trial court indicated that it would 

accept the Investor’s theory of contract formation, if only for argument’s sake. 

Indulging every inference in favor of the Investor, the court concluded that the 

Investor’s suit would still be time-barred. As the court explained, if the promises 

had been included in the brokerage agreement, then the Agents’ duty to perform 

those promises lapsed when the brokerage agreement expired. Therefore, any 

cause of action arising out of the brokerage agreement would have accrued no later 

than November 2, 2006, more than four years before the Investor filed her suit.
19

We agree with the trial court’s reasoning on this issue.

6

See Pagosa Oil & 

Gas, L.L.C. v. Marrs & Smith P’ship, 323 S.W.3d 203, 216–17 (Tex. App.—El 

Paso 2010, pet. denied) (breach of contract action was mature upon expiration of 

contract extension). The Investor, however, disputes that her cause of action 

accrued upon the simple expiration of the brokerage agreement. She counters that 

her claim is based on a series of continuing agreements, which included the 

purchase of her properties, the management of those properties, and the guaranty 

that those properties would be fully occupied at a 20% rate of return. Under this 

theory of the claim, the Investor asserts that her cause of action accrued in January 

2007, because that is when she terminated her contractual relationship with the 

Agents.

Assuming there were a valid continuing agreement, the Investor’s theory 

would only save a contract claim based on a breach of the third alleged promise. 

And even then, the Investor’s claim would necessarily be limited to those fourteen 

properties that had not been sold in 2006. Any cause of action arising from a 

breach of the first two alleged promises would have accrued more than four years 

before suit was filed, for the same reasons we discussed in the previous section: the 

Investor knew or should have known at the time of closing whether her purchase 

price was 20% below market value, or within two weeks of closing, whether the 

property had been leased by the Agents.

The Agents argue by cross-point that the “Four Corners Rule” would apply

even if the statute of limitations did not preclude a suit based on a continuing 

 

6

In a previous section of this opinion, we indicated that the expiration of the brokerage 

agreement would not factor into our consideration of whether the statute of limitations had 

barred a claim for fraud. That claim, however, did not depend on proof of a valid and effective 

contract. Because the expiration of a contract would affect a claim based on a breach of the 

contract, we can consider, in an analysis of this claim, when the brokerage agreement was 

operational.
20

agreement. The Agents mention this rule in their argument that the third promise

was not enforceable. They describe the rule as requiring the trial court to look only 

“at the words of the contract, not prior drafts or exchanges of letters or other 

documents or testimony to determine the intent of the parties.” This description 

invokes the parol evidence rule as an independent basis for supporting the trial 

court’s directed verdict. See Franklin Templeton Bank & Trust v. Tigert, No. 05-

09-01472-CV, 2011 WL 2507834, at *6 (Tex. App.—Dallas June 24, 2011, no 

pet.) (providing that a court construes contracts “from their four corners, by review 

of the plain language, and without regard for parol evidence”).

The parol evidence rule is a rule of substantive law, not a rule of evidence. 

See Hubacek v. Ennis State Bank, 159 Tex. 166, 169, 317 S.W.2d 30, 31 (1958). 

When parties reduce an agreement to writing, the law of parol evidence presumes, 

in the absence of fraud, accident, or mistake, that any prior or contemporaneous 

oral or written agreements merged into the final written agreement. See DeClaire 

v. G&B McIntosh Family Ltd. P’ship, 260 S.W.3d 34, 45 (Tex. App.—Houston 

[1st Dist.] 2008, no pet.). Any provisions not set out in the writing are presumed to 

have been abandoned before execution of the agreement or, alternatively, they are 

presumed to have never been made. Id.

Evidence that violates the parol evidence rule has no legal effect and 

“merely constitutes proof of facts that are immaterial and inoperative.” See Piper, 

Stiles & Ladd v. Fid. & Deposit Co. of Md., 435 S.W.2d 934, 940 (Tex. Civ. 

App.—Houston [1st Dist.] 1968, writ ref’d n.r.e.). Such evidence cannot be 

considered by the court when it construes the contract, even if the evidence is 

admitted without objection. See Johnson v. Driver, 198 S.W.3d 359, 364 (Tex. 

App.—Tyler 2006, no pet.).
21

There are exceptions, however. Parol evidence may be admitted to show

(1) that the contract was induced by fraud, accident, or mistake; (2) that an 

agreement was to become effective only upon certain contingencies; or (3) in the 

case of ambiguity, that the parties’ true intentions differ from those expressed in 

the agreement. See Gonzalez v. United Bhd. of Carpenters & Joiners of Am., Local 

551, 93 S.W.3d 208, 211 (Tex. App.—Houston [14th Dist.] 2002, no pet.). Parol 

evidence may also be admitted under an additional exception to show collateral, 

contemporaneous agreements that are consistent with the underlying written 

agreement. See DeClaire, 260 S.W.3d at 45. However, this exception does not 

permit parol evidence that varies or contradicts the express or implied terms of the 

written agreement. Id.

It is undisputed that the Agents’ third promise was never reduced to writing. 

There is also no dispute that the Investor believed she was purchasing this promise 

when she agreed to pay the Agents a $1,000 commission upon the acquisition of 

any condo. The Investor’s testimony conclusively shows that the promise was 

negotiated at the same time as the brokerage agreement:

Q. All right, but didn’t it scare you that they’re saying sign this 

English language contract; we’re not showing you any 

properties until you sign it and you felt there were holes in their 

information?

A. Because it was made very clear on the Chinese newspaper and 

they, also, promised to provide guaranty if I pay extra $1,000 

per unit.

Q. Okay. I’m sorry. I didn’t hear the translator about the Chinese 

newspaper.

THE INTERPRETER: Yeah, the Chinese newspaper made it 

very clear.

Q. What was clear about the Chinese newspaper?
22

A. What we saw on the Chinese newspaper and what was told by 

them were very clear, that is the tenant would be government 

sponsored tenant and the properties will have – would have 100 

percent occupancy rate and 20 percent return on the investment. 

If I paid extra $1,000, they would guaranty 100 percent – 100 

percent and provide one stop shopping services.

Q. Did you reach an understanding with them as to what one stop 

shopping services meant?

A. They guaranty to sell below to buy – they guaranty buy – they 

guaranteed to help me purchase the lowest priced properties 

that were 20 percent lower than those of the property, those 

properties that represented by other agents.

Q. Okay. What else?

A. They guaranteed to lease those out in two weeks, 100 percent 

occupancy rate in two weeks, 20 percent return on the 

investment.

This guaranty clearly varied the terms of the brokerage agreement. The 

handwritten clause at the end of that agreement provided only that the Agents 

would be entitled to a $1,000 commission if the Investor purchased a condo. The 

clause did not further provide that the commission would be paid in consideration 

of an additional promise that the property would generate a minimum return on 

investment of 20%, or that this promise would continue indefinitely beyond the 

express termination of the brokerage agreement.

The Investor’s testimony about the third promise qualified as parol evidence, 

meaning that it could not be considered unless an exception applied. As a matter of 

law, we conclude that no exception could have applied. There were no allegations 

of accident or mistake. Although the Investor pleaded a cause of action for fraud in 

connection with the promise, she produced no evidence of fraud, as we explained 

in the previous section. See Tex. A&M Univ.-Kingsville v. Lawson, 127 S.W.3d 

866, 872 (Tex. App.—Austin 2004, pet. denied) (fraud exception does not apply 
23

“absent pleading and proof”). Furthermore, there was no evidence of any 

contingencies, and the brokerage agreement is not ambiguous.

The third promise expanded the Agents’ obligations under the express terms 

of the brokerage agreement. Therefore, any evidence relating to the promise is of 

no legal effect. Having decided that the Investor’s evidence regarding the promise

was in violation of the parol evidence rule, we conclude that the Investor had no 

viable claim for breach of the promise. The only contract connected with the 

promise was the brokerage agreement, and there is no evidence that the Agents 

breached it. The Agents were entitled to a directed verdict on this issue.

D. Breach of Fiduciary Duty

A claim for breach of fiduciary duty has a four-year statute of limitations. 

See Tex. Civ. Prac. & Rem. Code § 16.004(a)(5). The Investor alleged only a 

single breach in her pleadings. She claimed that the Agents had misappropriated a 

rent check by forging her endorsement and keeping the funds for themselves.

The evidence is undisputed that the check was cashed in August 2006. 

Assuming there were a breach of a fiduciary duty, the Investor’s cause of action 

accrued at the moment the Agents negotiated the check. Because that date of 

accrual was more than four years before suit was filed, the Investor’s claim would 

be time-barred unless she raised a fact issue in avoidance of the statute of 

limitations.

The Investor responds that the statute of limitations should be tolled because 

of the discovery rule. The Investor asserted the discovery rule in her pleadings, 

claiming that she did not discover the Agents’ actions until April 2007. The 

pleadings are not evidence, however, and the Investor never testified at trial when 

she first learned about the misappropriated check. See Laidlaw Waste Sys. 
24

(Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995) (“Generally, 

pleadings are not competent evidence, even if sworn or verified.”).

The Agents had no burden to negate the discovery rule unless it was both 

pleaded and proved. See Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 

(Tex. 1988) (noting, outside the context of a motion for summary judgment, that 

the “party seeking to benefit from the discovery rule must also bear the burden of 

proving and securing favorable findings thereon”). Without any proof submitted in 

support of the Investor’s counter-affirmative defense, the Agents conclusively 

established that the Investor’s claim was time-barred. The trial court correctly 

granted a directed verdict on the basis of limitations.

The Investor argues that a separate claim for self-dealing survived the statute 

of limitations. The Investor specifically asserts that the Agents breached a 

fiduciary duty when they represented her in the purchase of two properties for 

which they held an undisclosed ownership interest. This theory had not been 

asserted in the pleadings, but it was discussed during the hearing on the motion for 

directed verdict, and there was some evidence in the record to support such a 

theory.

Assuming that this theory were tried by consent, we would still conclude 

that the Agents were entitled to a directed verdict, even if the statute of limitations 

did not apply. To recover on a breach of a fiduciary duty, there must be some proof 

of an injury to the plaintiff or a benefit to the defendant as a result of the 

defendant’s breach. See Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—

Houston [14th Dist.] 2008, pet. denied). Here, the Investor never testified about the 

two properties in question, their market values at the time of purchase, or whether 

the Agents had realized any gains. Accordingly, there is no evidence that the 
25

Investor was injured or that the Agents benefited from the transactions. The Agents 

were entitled to a directed verdict on no-evidence grounds.

In another attempt to expand on her pleadings, the Investor argues that the 

Agents breached their fiduciary duties in two more ways: first, by guaranteeing a 

20% return on investment, and second, by advising the Investor that she needed to 

be patient when her rental income was not being generated at the rate she expected. 

The Agents did not receive any notice that these theories would be tried, and in 

fact, they were never discussed at all during the hearing on the motion for directed 

verdict. The Investor cannot defeat a trial court’s directed verdict by attempting to 

establish new causes of action and new fact issues for the first time on appeal. See 

Tex. R. App. P. 33.1. We overrule this issue to the extent she attempts otherwise.

ATTORNEY’S FEES

In her fourth issue, the Investor challenges the award of attorney’s fees to 

the Agents, contending that the trial court erroneously granted the award on a 

theory that had not been asserted in the pleadings. In the alternative, the Investor 

argues that the award should be reversed because no trial on attorney’s fees was 

ever held and the Agents submitted no evidence in support of the award.

Under Texas law, a party may not recover attorney’s fees unless authorized 

by statute or contract. See Gulf State Utils. Co. v. Low, 79 S.W.3d 561, 567 (Tex. 

2002). The Agents pleaded for attorney’s fees on a single statutory basis, citing the 

Uniform Declaratory Judgments Act. See Tex. Civ. Prac. & Rem. Code § 37.009. 

This statute cannot support the trial court’s judgment because the Agents 

abandoned their counterclaim for declaratory relief.

The trial court recited in its judgment that the Agents were entitled to 

attorney’s fees because they had requested such fees under Chapter 38 of the Texas 
26

Civil Practice and Remedies Code. Our review of the record does not reveal any 

such request in the Agents’ pleadings. Even if we assumed that a request had been 

made, the trial court had no discretion but to deny it. Attorney’s fees may be 

awarded under Chapter 38 for presenting a contract claim, but not for defending 

against one. See Chevron Phillips Chem. Co. v. Kingwood Crossroads, L.P., 346 

S.W.3d 37, 70 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (“Section 

38.001(8) does not authorize recovery of attorney’s fees for successfully defending 

a contract claim.”). In this case, the Agents presented no contract claim of their 

own; they merely defended against the Investor’s.

The Agents argue that their award should be upheld because the Investor 

stipulated to the issue of attorney’s fees in open court. The Agents refer to a brief 

declaration at the end of the directed verdict hearing when the trial court 

encouraged the parties to reach a consensus on attorney’s fees. The Investor’s 

attorney stated as follows: “I can probably agree to the amount. I can’t agree that 

they’re owed.” This statement falls far short of a stipulation. It does not support the 

notion that the Agents incurred $50,000 in attorney’s fees, and it runs directly 

contrary to the Agents’ position that they should recover attorney’s fees from the 

Investor. Absent any other showing that the Investor agreed to pay the Agents’ 

attorney’s fees, we cannot say that there was any stipulation to the award contained 

in the trial court’s judgment.

“A trial court cannot enter judgment on a theory of recovery not sufficiently 

set forth in the pleadings or otherwise tried by consent.” Heritage Gulf Coast 

Props., Ltd. v. Sandalwood Apartments, Inc., 416 S.W.3d 642, 658 (Tex. App.—

Houston [14th Dist.] 2013, no pet.). The Agents’ pleadings did not put the Investor 

on notice of any right to recover attorney’s fees except for the Uniform Declaratory 

Judgments Act. Because that theory is inapplicable here, and because the Agents 
27

did not otherwise try the issue of attorney’s fees by consent, we conclude that the 

trial court abused its discretion by making the award of attorney’s fees. We 

accordingly modify the judgment to delete the award. See Garcia v. Nat’l 

Eligibility Express, Inc., 4 S.W.3d 887, 889 (Tex. App.—Houston [1st Dist.] 1999, 

no pet.) (op. on reh’g) (deleting award of attorney’s fees where party failed to 

show that any statute or contract authorized the award).

MOTION FOR SANCTIONS

The Agents have moved for sanctions, claiming that the Investor’s appeal is 

frivolous. If an appeal is frivolous, an appellate court may award the prevailing 

party just damages. See Tex. R. App. P. 45. To determine whether an appeal is 

frivolous, we review the record from the viewpoint of the advocate and decide 

whether there were reasonable grounds to believe the case could be reversed. See 

Glassman v. Goodfriend, 347 S.W.3d 772, 782 (Tex. App.—Houston [14th Dist.] 

2011, pet. denied) (en banc). Because we have already decided that the award of 

attorney’s fees should be deleted, we conclude that the Investor’s appeal is not 

frivolous, and we deny the motion for sanctions.

THE AGENTS’ DECORUM

On our own motion, we feel compelled to address the alarming lack of 

civility demonstrated by the Agents’ pro se filings in this court. Between their 

briefs and other motions, the Agents have made many ad hominem attacks against 

the Investor and opposing counsel. These attacks are completely inappropriate and 

ineffective. Pro se litigants, much like parties who are represented by counsel, 

should focus on legal points, not on personalities or perceived character flaws.

All participants in the legal process should treat each other with the same 

level of respect and courtesy that is owed to this court. Should the Agents decide in 
28

future dealings with this court to conduct themselves in an impolite or

unprofessional manner, their behavior may result in serious consequences, 

including contempt or other sanctions. See Gleason v. Isbell, 145 S.W.3d 354, 

355–61 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (Frost, J., concurring in 

part and dissenting in part).

CONCLUSION

We deny the motion for sanctions and, having modified the judgment to 

delete the award of attorney’s fees, we affirm the trial court’s judgment as 

modified.

/s/ Tracy Christopher

Justice

Panel consists of Justices Christopher and Busby and Visiting Judge Hinde.*

*The Honorable Dan Hinde, Judge of the 269th District Court of Harris County, 

sitting by assignment pursuant to section 74.003(h) of the Texas Government 

Code.