Reversed and Rendered in part, and Affirm ed in part, Opinion Filed September 17, 2013 

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In The Court of Appeals Fifth District of Texas at Dallas No. 05-11-00617-CV K.A.WEST, LLC & DANNY KATAVE, Appellant V. GK INVESTMENTS, INC., MICHA EL BAREKET, ET AL, Appellee On Appeal from the 298th Judicial District Court Dallas County, Texas Trial Court Cause No. 06-08847 MEMORANDUM OPINION Before Justices Bridges, Lang, and Richter 1 Opinion by Justice Bridges Appellant Danny Katave 2 appeals from a judgment entered in favor of the Outside Investors (appellees) in the amount of $466,226, plus in terest and attorney’s fees. In four issues, Katave argues the trial court erred in entering judgment against him when: (1) the parties did not stipulate as to the measure of damages to be used as to the fraud claim or stipulate that the trial court decide; (2) the evidence was legally and fact ually insufficient to su pport the jury’s findings against him on fraud; (3) the Outside Investors di d not testify at trial; and (4) the trial court entered judgment against him for attorney’s fees based upon the jury’s verdict of fraud. We affirm in part, and reverse in part.

1 The Hon. Martin Richter, Justice, Assigned 2 Although both Katave and K.A. West filed a notice of a ppeal, only Katave appeals the judgment against him.–2– Background Appellant Katave is the manager of K.A. West. Katave and his c ousin, Juda Katav, and Avi Goldberg are referred to as the “Promo tion Group.” The Promotion Group wished to propose real estate ventures to prospective inve stors, and eventually formed Economy Business Park, Ltd. (“Partnership”) with th e Outside Investors. The Partne rship was formed to purchase, own, manage and sell a piece of commercial real esta te. The Outside Investors, all residents of the State of Israel, are nine of the limited partners in the Partnership. K.A. West is the general partner of the Partnership. Prior to the formation of the Partnership, Katave and the Outside Investors met in Israel to discuss the potential real estate venture. The primary matter left unr esolved at that first meeting was the percentage, referred to as a “suc cess fee,” to be paid Katave when the property sold, or was refinanced, and certain cumulative returns were achieved. Following the meeting, Goldberg prepared a document, written in Hebr ew, styled “Clarification Agreement.” The Clarification Agreement was distributed to the pot ential parties to the transaction. Goldberg testified the Clarification Ag reement was what he understood the Promotion Group was willing to agree to. All negotiations were conducted in Israel a nd spoken in Hebrew. The Outside Investors requested the negotiated terms be reduced to writing in Hebrew. Ofer Bartal, one of the Outside Investors, testified, “we didn’t wa nt a very complicated contract in English,” but wanted “the Hebrew version of the agreement [to] rule.” Ka tave informed the Outside Investors that they must have a written partnership agreement that conformed to Texas law, and the bank financing a portion of the property purchas e required a copy of the fully executed and final partnership agreement. Bartal explained the Outside Investor s “all wanted to be sure that the Partnership Agreement in English will say exactly what we agreed upon in the Hebrew language.”–3– The Promotion Group, except for Katave, me t again with the Outside Investors. Although he was not present at the second m eeting, the Promotion Group indicated they represented Katave as well. Further negotiations regarding the success fee took place. At the second meeting, the parties agreed to a success fe e of an additional 10% of all amounts by which the sale or refinancing proceeds exceeded a 22% annual return. Goldberg then reduced the terms agreed upon at that s econd meeting into a Hebrew document (“Hebrew Agreement”). Goldberg testif ied that, during this ti me, he was in almost daily contact with Katave. He stated he told Katave the investors had agreed to a sale or refinance success fee of 10% for Katave, which was reflected in the Hebrew Agreement. Goldberg testified the Hebrew Agreement contai ned the terms agreed to by both the Promotion Group and the Outside Investors. Goldberg furt her stated he expected the English language partnership agreement (“English Agreement”) to contain provisions iden tical to the Hebrew Agreement. By October 2001, Katave told Goldberg he needed the Outside Investors’ signature pages for the English Agreement, so the bank would finance the tr ansaction. The English Agreement was not produced to Goldberg until after the property had been purchased. On October 15, 2001, Katave’s assistant faxed the English Agreement to the title company. The English Agreement that contai ned the fax signature pages of the Outside Investors provided for a success fee of 20% to K.A. West, the general partner, as well as 64% of the remaining 80% to Katave Family L.P., an entity owned by Katave. The purchase of the property closed on October 17, 2001. In 2005, the Partnership refinanced its debt, borrowing $487,736.63. In the spring of 2006, the Partnership sold the property at i ssue for $7.23 million. After the property sold, Goldberg met with Katave and his accountant. Goldberg testified Kata ve then presented him with a chart of distributions th at varied from what Goldberg expected. Katave stated it was–4– based on the English Agreement, but Goldberg insisted the Hebrew Agreement was the controlling agreement. On August 21, 2006, the Outside Investors made demand on Katave for proper payment. K.A. West and Katave commenced the underlying suit as a decl aratory judgment action against the limited partners of the Partnership, seeki ng a declaration that the proceeds from the Partnership had been appropriately and correc tly distributed to the Outside Investors in accordance with the terms of the Partnership Agr eement. The Outside Investors counterclaimed against Katave for fraud and against K.A. West for breach of fiduciary duty and other business torts. In the underlying case, Katave conten ded the Partnership was governed by the English Agreement, whereas the Outside Investors co ntended the Partnershi p was governed by the Hebrew Agreement. On May 22, 2009, Katave nonsuited his claim fo r declaratory relief. The parties agreed to try liability issues to a jury. The parties al so agreed to try the remaining issues—the manner in which to calculate distributions and attorney’s fees—to the trial court. The parties stipulated that, if the jury’s answers to liability questions favored the Outside Investors, the parties would try the proper way to calculate th e distribution under the terms of the Hebrew Agreement, as well as issues relating to the award of attorney’s fees, to the tria l court. The jury found Katave committed fraud against the Outside Investors. The jury also ultimately found the Hebrew document controlled, and Katave does not challe nge this finding on appe al, conceding in his brief that “some evidence was presente d which would support this finding.” A bench trial regarding damages and atto rney’s fees took place on October 16, 2009. At the conclusion of the bench trial, the trial court awarded the Outside Investors an aggregate amount of $466,226.00 to be apportioned among the Outside Investors in accordance with a–5– Damages Allocation Table. The trial court furt her awarded attorney’s fees to the Outside Investors, also to be apportioned among them. Analysis Fraud We begin our analysis with Ka tave’s second issue, in which he conten ds the trial court erred in entering judgment against him when the evidence was legally and factually insufficient to support the jury’s finding of fraud. In a legal sufficiency review, we consider the evidence in the light most favorable to the verdict and indul ge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We ask whether the evidence— crediting favorable evidence if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not—would permit reas onable and fair-minded people to reach the verdict under review. Id. at 827. In our factual sufficiency re view, we consider all the evidence; we will set aside the finding only if the evidence supporting the finding is so weak or so against the overwhelming weight of th e evidence that the finding is clearly wrong and unjust. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). In the case before us, the jury determined Katave committed fraud by nondisclosure against the Outside Investors. Katave argues th e evidence was insufficient to show he owed a duty of disclosure. We disagree. Fraud by omission is a subcategory of fraud because the omission or nondisclosure may be as misleading as a positive misrepresentation of fact where a party has a duty to disclose. Myre v. Meletio , 307 S.W.3d 839, 843 (Tex. App.—Dalla s 2010, pet. denied) (citing Four Bros. Boat Works, Inc. v. Tesoro Petroleum Cos., Inc., 217 S.W.3d 653, 670 (Tex. App.—Houston [14th Dist.] 2006, pet. denied)). Thus, silence may be equivalent to a false representation when the circumstances impose a duty to speak on the party, and the party delib erately remains silent.–6– Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001). In the absence of a duty to disclose, however, a failure to disclose does not constitute fraud. See Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998); Marshall v. Kusch, 84 S.W.3d 781, 786 (Tex. App.—Dallas 2002, pet. denied). A duty to disclose may arise in certain situations involving partial disclosure or when the parties have a confiden tial or fiduciary relationship. See Solutioneers C onsulting, Ltd. v. Gulf Greyhound Partners, Ltd., 237 S.W.3d 379, 385 (Tex. A pp.—Houston [14th Dist.] 2007, no pet.). Whether such a duty ex ists is a question of law. Marshall, 84 S.W.3d at 786. Katave argues he had no duty to disclose th at he “intended to make distributions under the English [Agreement].” However, the Outs ide Investors did not complain of Katave’s undisclosed intention to distribut e under the English Agreement. Rather, the Outside Investors complained Katave represented the English Ag reement contained terms “consistent with” the Hebrew Agreement. Goldberg testified the Hebr ew Agreement contained the terms agreed to by both the Promotion Group and the Outside Investors. Goldberg also expl ained he expected the English Agreement to contain the same terms as the Hebrew Agreement (as well as tax and administrative provisions that did not vary the te rms). Bartal explaine d the Outside Investors “all wanted to be sure that the Partnership Agreem ent in English will say exactly what we agreed upon in the Hebrew language.” On appeal, Katave does not dispute the Outside Investors’ assertion th at the terms of the English Agreement vary from the terms of the Hebrew Agreement. Our review of the two documents demonstrates the terms do, in fact, vary between the English Agreement and the translated version of the Hebrew Agreement. Ye t, Katave did not produce a copy of the English Agreement to Goldberg, a fellow member of th e Promotion Group, until after the property had been purchased. Goldberg testified he was not aware the terms varied between the Hebrew Agreement and the English Agreement until the property in question sold.–7– Katave argues, because there was no “confid ential or fiduciary relationship” between himself and the Outside Investors, he had no dut y of disclosure. However, a confidential or fiduciary relationship is only one of the settings in which the duty to disclose may arise. See Solutioneers , 237 S.W.3d at 385. The duty to disclose may also arise (1) when one party voluntarily discloses information, which gives rise to the duty to disclose the whole truth, (2) when one party makes a representation, which gives rise to the duty to disclose new information that the party is aware makes the earlier representation misl eading or untrue, or (3) when one party makes a partial disclosure and conveys a fa lse impression, which give s rise to the duty to speak. See id. (citing Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998); Four Bros. Boat Works, Inc. v. Tesoro Petroleum Cos., 217 S.W.3d 653, 670-71 (T ex. App.—Houston [14th Dist.] 2006, pet. denied). Based on our review of the record, we conclu de Katave’s failure to correct the Outside Investors’ false impression that the terms of the Hebrew Agreement and English Agreement were consistent constitu ted fraud by nondisclosure. See Solutioneers , 237 S.W.3d at 385. We, therefore, conclude the evidence is both legally and factually sufficient to support the jury’s finding of fraud as to Katave. See City of Keller, 168 S.W.3d at 822; Dow, 46 S.W.3d at 242. We overrule Katave’s second issue. Measure of Damages In his first issue, Katave alleges the tria l court erred in entering judgment against him “given that the parties did not stipulate as to th e measure of damages to be used as to the fraud claim or that the Trial Court could de cide upon that measure of damages.” We first note Katave does not contest on a ppeal the amount of da mages actually awarded to the Outside Investors, but argues the trial court should have never determined what those damages were in the first place. Specifically, Katave contends the parties “did not stipulate–8– generally that the trial court would determine da mages.” Katave further asserts the stipulation was “limited only as to the calculation of the di fference between what the Outside Investors were paid under the English [Agreement] and what th ey should have rece ived under the Hebrew [Agreement].” Stipulations between parties amount to a contract between the parties, and they are subject to judicial interpretation and construction. See Fourticq v. Fireman’s Fund Ins. Co. , 679 S.W.2d 562, 566 (Tex. App.—Dallas 1984, no writ). In construing a sti pulation, a court must determine the intent of the parties from the language used in the entire agreement, examining the surrounding circumstances, including the state of the pleadings, th e allegations made therein, and the attitude of the parties with respect to the issue. In re C.C.J. , 244 S.W.3d 911, 921 (Tex. App.—Dallas 2008, no pet.). At the close of the evidence, counsel fo r the Outside Investors announced a joint stipulation “that the parties will su bmit all issues of damages and attorneys’ fees to the Court.” Counsel for Katave then responded to the st ipulation, in pertinent part, as follows: As far as damages , what we are submitting to the Court is the–is how much– we’ve stipulated to what the calculation was and what the actual distribution was under the English document. What we would submit to the Court woul d be, if it becomes necessary, the proper way to calculate the distribution under th e Hebrew document. I don’t know what other issues of damages there would be other than that and what was stipulated to and then the attorney fees, but that is the stipulations limited to that. (Emphasis added). Counsel for the Outside Investors then responded: There are no other actual damages that I believe we are seeking, other than the attorneys’ fees and rec oupment of this money that was–we contend was improperly distributed

. (Emphasis added). This statement is immediatel y followed by the trial judge’s question: “So we have an agreement on that?” The record reflects both parties responded, “Yes.”–9– A reasonable interpretation of the record demonstrates the parties agreed to submit a determination of damages (the proper amount of the distributions) to the trial court. See In re C.C.J. , 244 S.W.3d at 921. The partie s further agreed there were “no other actual damages” beyond the attorney’s fees and distributions. Stipul ated facts are binding on the parties, the trial court, and the reviewing court. Wells Fargo Bank Northwest, N.A. v. RPK Capital XVI, L.L.C. , 360 S.W.3d 691, 698 (Tex. App.—Dallas 2012, no pet.). Therefore, we conclude, on the record before us, the trial court properl y made an award of damages. See id.; In re C.C.J. , 244 S.W.3d at 921. Katave further argues the trial court “went beyond the parties’ stipulation and chose to apply the ‘benefit-of-the-bargain ’ measure over the ‘out-of-pocket’ measure of damages.” We conclude this argument is also without merit. Katave does not dispute that the two measures of direct damages for fraud are the out-ofpocket measure and the benefit- of-the-bargain measure. See Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998). The out-of-pocket measure is the difference between the value paid and the value received, and the benefit-of-thebargain measure is the difference between the value as represented and the value received. Id. ; see also Highland Capital Mgmt., L.P. v. Ryder Scott Co. , 402 S.W.3d 719, 728 (Tex. App.— Houston [1st Dist.] 2012, no pet.). Because the record before us demonstrates th e Outside Investors recovered their original investment, the out-of-pocket measure would not apply. See Formosa , 960 S.W.2d at 49. Rather, the Outside Investors so ught to recover the benefit of their bargain (the difference between the distributions under the Hebrew Agreem ent and the English argument) from Katave. The jury found the Outside Investors suffered “inj ury as a result of actin g without knowledge of the undisclosed fact.” We have already determ ined the evidence was sufficient to find Katave–10– committed fraud by nondisclosure against the Outsid e Investors. Therefore, we conclude the trial court properly used benefit-of-the-b argain as the measure of damages. See id. We overrule Katave’s first issue. Judgment In Favor Of Non-Testifying Witnesses Katave next argues the trial co urt erred in entering judgment against Katave “as to those Outside Investors who did not testif y at trial given that there was a legal and factual insufficiency of the evidence to support the jury’s findings.” Only three of the Outside Investors testified at trial (Bartel, Greenstein, and Grunhaus). Katave, therefore, argues there was no evidence the non-testifyi ng Outside Investors relied upon any statement or omission. We disagree. Our sister court has already addressed a similar situation in which not all investors testified. See Matis v. Golden , 228 S.W.3d 301 (Tex. App.—Waco 2007, no pet.). Like in
Matis , the investors who did appear at trial in this case testified as to their reliance. For example, Bartal explained the Outside Invest ors “all wanted to be sure that the Partnership Agreement in English will say exactly what we agreed upon in the Hebrew language.” Greenstein testified “ we relied on [Katave]” when it came to the English Agreement. (emphasis added). Grunhaus testified he wired his money to Katave, unde rstanding the Hebrew Agreement governed the transaction. We conclude, therefor e, that the non-testifying invest ors were entitled to recover for fraud, even though they did not appear and testify at trial. See id. at 306. Further, like in Matis , we conclude that evidence of the Outside In vestors funding the investment was sufficient evidence of thei r reliance. See id. at 311-12. We overrule Katave’s third issue. Attorney’s Fees In his fourth issue, Katave argues the tria l court erred in entering judgment against him for attorney’s fees based upon the jury ’s verdict of fr aud. We agree.–11– An appellate court reviews a trial court’s deci sion to award or not award attorney’s fees under an abuse of discreti on standard of review. Ridge Oil Co. v. Guinn Invs., Inc., 148 S.W.3d 143, 163 (Tex. 2004). A trial court abuses its disc retion when it acts in an arbitrary and unreasonable manner, or when it acts without re ference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). It has long been the rule in Texas that at torney’s fees paid to prosecute or defend a lawsuit cannot be recovered in that suit absent a stat ute or contract that allows for their recovery. See Akin, Gump, Strauss, Hauer & Feld, L.L. P. v. Nat’l Development & Research Corp. , 299 S.W.3d 106, 120 (Tex. 2009) (citing Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310– 11 (Tex. 2006) (“Absent a contract or statute, trial courts do not have inherent authority to require a losing party to pay th e prevailing party’s fees.”); Wm. Cameron & Co. v. Am. Sur. Co. of N.Y., 55 S.W.2d 1032, 1035 (Tex. Comm’n App. 1932, judg m’t adopted) (“It is settled law in this state that, unless provided for by statute or by contract between the pa rties, attorneys’ fees incurred by a party to litigation are not recoverable against his a dversary either in an action in tort or a suit upon a contract.”); Sherrick v. Wyland, 37 S.W. 345, 345 (Tex. Civ. App. 1896) (“It has often been ruled, in this st ate and elsewhere, that fees of counsel, incurred in prosecuting a suit for or defending against a wrong, are not ordi narily recoverable as actual damages, because they are not considered proxima te results of such wrong.”)). In their original and supplemental briefing, the Outside Investors ar gue they are entitled to the awarded fees against Katave, because th ey sought such fees pursuant to chapter 38. See
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. §38.001. Chapter 38 provides a list of claims eligible for an award of such fees, and the Outside Investors allege their claim against Katave falls within the “contract-based” provision. See T EX
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. §38.001 (8). However, the Outside Investors plead and prevai led against Katave on the basi s of their fraud claim, not a–12– claim for contract. When prevailing on a claim for fraud, a party may not recover attorney’s fees. See Tony Gullo Motors, L.L.P. v. Chapa , 212 S.W.3d 299, 304 (Te x. 2006) (stating for fraud, a party may recover economic damages, me ntal anguish, and exemplary damages, but not attorney’s fees). Still, the Outside Investors request this court to afford a liberal construction to chapter 38 and affirm the award of fees. See id. at §38.005. However, in our efforts to afford a liberal construction, we cannot obliterate the basic re quirement for a party to plead its right to affirmative relief. See Mullen v. Roberts, 423 S.W.2d 576, 579 (Tex. 1968) (stating a party is not entitled to obtain relief on a cause of action, whic h it failed to sufficiently plead). Furthermore, we cannot ignore precedent, which requires this Court to award attorney’s fees only when a statute or contract allo ws for their recovery. See Akin, Gump , 299 S.W.3d at 120. Because the Outside Investors plead and preva iled against Katave only as to their claim of fraud, we conclude the trial court abused its discretion in aw arding attorney’s fees against him. See Ridge Oil , 148 S.W.3d at 163. We sust ain Katave’s fourth issue. Conclusion Having overruled Katave’s first three issues and having sustained his fourth issue, we reverse the trial court’s judgment in part and j udgment is rendered the Outside Investors take nothing on their claim for attorney’s fees against Katave. The trial court’ s judgment is affirmed against Katave in al l other respects.

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/David L. Bridges/ DAVID L. BRIDGES JUSTICE–13– 

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Court of Appeals Fifth District of Texas at Dallas JUDGMENT

K.A.WEST, LLC & DANNY KATAVE, Appellants No. 05-11-00617-CV V. GK INVESTMENTS, INC., MICHAEL BAREKET, ET AL, Appellees On Appeal from the 298th Judicial District Court, Dallas County, Texas Trial Court Cause No. 06-08847. Opinion delivered by Justice Bridges. Justices Lang and Richter participating.

In accordance with this Court’s opinion of this date, we REVERSE the trial court’s judgment in part and judgment is RENDERED the Outside Investors take nothing on their claim for attorney’s fees against Katave . The trial cour t’s judgment is AFFIRMED against Katave in all other respects. It is ORDERED that each party pay their own costs of this appeal. Judgment entered September 17, 2013

/David L. Bridges/ DAVID L. BRIDGES JUSTICE