Court Opinion

ID: 3089504
Source: CourtListenerOpinion
Date Created: 2015-10-16 03:42:59.034589+00
Date Added: 2024-06-11T11:19:32.770257
License: Public Domain

NUMBER 13-12-00096-CV

                            COURT OF APPEALS

                 THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI – EDINBURG

RAMIRO HERNANDEZ                                                  Appellant,

                                           v.

JAIME GARCIA, MIS TRES
PROPERTIES, LLC. AND STEVE DECK,                                  Appellee.

               On appeal from the County Court at Law No. 7
                        of Hidalgo County, Texas.

                         MEMORANDUM OPINION

  Before Chief Justice Valdez and Justices Benavides and Longoria
             Memorandum Opinion by Justice Longoria
      Appellant, Ramiro Hernandez, appeals a final summary judgment granted in

favor of appellees, Jaime Garica, Mis Tres Properties, LLC, and Steve Deck. We

reverse and remand in part and affirm in part.
                                            I. BACKGROUND

       This case arises out of a 2003 sale of real estate in Starr County, Texas. Mis

Tres Properties, a limited liability company, owned by appellee Garcia, executed a

$70,000 promissory note and deed of trust (separate documents executed on the same

day) in favor of appellant in exchange for appellant’s removal of a lien he held against

certain real property Mis Tres was attempting to sell to a third party. The note was to be

paid out of the proceeds of the sale. The Law Office of John King (“King”) drew up the

paperwork.      The deed of trust listed Steve Deck, an employee of both King and

Qualified Intermediary (“Qualified”), as trustee.

       In 2009, following his release from federal prison, appellant filed suit against

Garcia, Mis Tres Properties, King, Qualified and Deck for assumpsit, conversion, and

fraud after he did not receive the $70,000 after the sale closed. In addition, appellant

alleged a cause of action against Garcia and Mis Tres for breach of contract. Appellant

also alleged a cause of action against Deck for breach of fiduciary duty. Appellant

further alleged that King and Qualified were vicariously liable for Deck’s actions.1

Appellant pleaded the discovery rule as grounds for bringing the suit despite the statute

of limitations.    King, Qualified, Deck, and Garcia filed joint motions for summary

judgment. The trial court granted both motions and subsequently granted Garcia and

Deck’s motion for severance.2 This appeal followed.

       1
             The specific claims asserted against each defendant changed somewhat during the course of
the litigation. We take this list of claims from appellant’s Third Amended Petition, his live petition.
       2
        We decide the issues related to King and Qualified’s motion for summary judgment today in a
companion case, Hernandez v. King, No. 13-12-095-CV.

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                                        II. ANALYSIS

   A. Standard of Review

      We review the trial court’s grant of summary judgment de novo. Provident Life &

Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); Alejandro v. Bell, 84
S.W.3d 383, 390 (Tex. App.—Corpus Christi 2002, no pet.).          We take as true all

evidence that is favorable to the nonmovant and indulge every reasonable inference

and resolve all doubts in favor of the non-moving party. Provident, 128 S.W.3d at 215;

Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The moving

party has the burden to show that no genuine issues of material fact exist and that it is

entitled to summary judgment as a matter of law. TEX. R. CIV. P. 166a; Ortega v. City

Nat’l Bank, 97 S.W.3d 765, 772 (Tex. App.—Corpus Christi 2003, no pet.). Summary

judgment is proper if the movant disproves at least one element of each of plaintiff’s

claims or affirmatively establishes each element of an affirmative defense. Ortega, 97
S.W.3d at 772 (citing Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997)).

      In a no-evidence summary judgment motion, the moving party contends that the

nonmovant has produced no evidence to support at least one element of a particular

claim for which the nonmovant would have the burden of proof at trial. TEX. R. CIV. P.

166a(i); See Ortega, 97 S.W.3d at 772. Unlike with a traditional motion, the adverse

party must respond with evidence, but it is not required to “marshal its proof; its

response need only point out evidence that raises a fact issue on the challenged

elements.” TEX. R. CIV. P. 166a(i) cmt. We review “the evidence in the light most

favorable to the non-movant, disregarding all contrary evidence and inferences.” King

Ranch v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003); Merrell Dow Pharms. Inc. v.
                                           3
Havner, 953 S.W.2d 706, 711 (Tex. 1997). A no-evidence summary judgment motion

must be reversed if the non-movant brought forth “more than a scintilla of probative

evidence on each challenged element of his claim.” Midwest v. Harpole, 293 S.W.3d
770, 775 (Tex. App.—San Antonio 2009, no pet.). More than a scintilla of evidence

exists where there is enough evidence to “enable reasonable and fair minded people to

differ in their conclusions.” King Ranch, 118 S.W.3d at 751; Zapata v. Children’s Clinic,

997 S.W.2d 745, 747 (Tex. App.—Corpus Christi 1999, no pet.). Less than a scintilla

creates only a surmise or suspicion of the existence of a fact. King Ranch, 118 S.W.3d

at 751 (citing Merrell Dow Pharms., 953 S.W.2d at 711); In re Estate of Schiwetz, 102
S.W.3d 355, 361–62 (Tex. App.—Corpus Christi 2003, pet. denied). When the trial

court’s order granting summary judgment does not specify the grounds, summary

judgment will be affirmed on any meritorious grounds contained in the moving party’s

petition. Alejandro, 84 S.W.3d at 390.

   B. Applicable Law
       When a defendant moves for traditional summary judgment on the basis of the

affirmative defense of statute of limitations, the movant bears the burden to conclusively

establish that the statute is applicable, including the date on which the statute began to

run, which is the date the cause of action accrued. Diversicare Gen. Partner, Inc. v.

Rubio, 185 S.W.3d 842, 846 (Tex. 2005); Provident, 128 S.W.3d at 220. Determining

when a cause of action accrued is a question of law. Provident, 128 S.W.3d at 221. A

cause of action accrues, and the statute begins to run, “when a wrongful act causes a

legal injury, regardless of when the plaintiff learns of that injury or if all resulting

damages have yet to occur.” Id. (citing S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996)). The

statute begins to run on the accrual date even if the injury is not discovered until later or

                                             4
all damage resulting from the injury has not yet occurred. Id. In certain narrow cases,

however, the discovery rule defers accrual until a plaintiff “knew or, exercising

reasonable diligence, should have known of the facts giving rise to a cause of action.”

HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998). The supreme court

has ruled that the discovery rule applies where both “the nature of the injury incurred is

inherently undiscoverable and the evidence of injury is objectively verifiable.” S.V., 933
S.W.2d at 6 (quoting Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.3d 453, 456

(Tex. 1996)). The party moving for summary judgment on the basis of limitations must

negate the discovery rule if it applies and has been pleaded by the nonmoving party.

Envtl. Procedures, Inc. v. Guirdy, 282 S.W.3d 602, 622 (Tex. App.—Houston [14th Dist.]

2009, pet. denied) (op. on rehr’g). A defendant moving for summary judgment on the

basis of the statute of limitations where the non-movant has pleaded the rule negates

the discovery rule by proving as a matter of law that there is no question of material fact

“about when plaintiff discovered, or in the exercise of reasonable diligence should have

discovered the nature of its injury.” KPMG Peat Marwick v. Harrison County Hous. Fin.

Corp., 988 S.W.2d 746, 749 (Tex. 1999).

   C. Deck’s Motion For Summary Judgment
       Deck filed a combined motion for summary judgment, seeking a traditional

summary judgment on appellant’s claims for assumpsit, conversion, and fraud based on

the statute of limitations and a no-evidence summary judgment on appellant’s claim for

breach of fiduciary duty.

       1. Claim for Assumpsit
       Deck’s motion recites the following: appellant claims he did not get paid on the

transactions that occurred “on our around May 2003,” the statute of limitations to bring

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an action for assumpsit is either two or four years, and appellant filed suit in August

2009. Because 2009 is more than four years since “the transaction complained of,”

Deck argues that the statute of limitations has therefore run on appellant’s cause of

action.

          A cause of action for money had and received accrues when the defendant

obtains money that “in good conscience belongs to the plaintiff.” Amoco Production Co.

v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no pet.); see also H.E.B.,

L.L.C. v. Ardinger, 369 S.W.3d 496, 507 (Tex. App.—Fort Worth 2012, no pet). Deck

appears to argue that the cause of action accrued on the date of the transaction, when

he began to hold money for appellant, but this argument is contradicted by the record.

In a letter to appellant, Deck represented that the sale had closed and that “Mis Tres

Properties, L.L.C. is now holding the monies owed to you pursuant to that note” and that

appellant should come to King’s office with a copy of the note and the original deed of

trust to obtain his funds. There is no dispute that Deck was holding the funds appellant

was due after the sale closed. Instead, appellant alleges that Deck misappropriated the

money Deck was holding for appellant sometime after the sale closed. Deck’s motion

does not address this claim and therefore does not establish the date on which

appellant’s cause of action would have accrued.

          As the moving party, Deck was also required to negate the discovery rule in

order to conclusively establish his affirmative defense, or explain why it does not apply.

Deck’s motion on this claim fails to address the rule at all. Deck now makes several

arguments on appeal as to why there is no question of fact regarding when plaintiff

knew or should have known of his claim, but this Court may not uphold summary

                                            6
judgment on a ground that is not expressly presented in the motion to the trial court.

See TEX. R. CIV. P. 166a(c); Garza v. CTZ Mortg. Co. LLC, 285 S.W.3d 919, 923 (Tex.

App.—Dallas 2009, no pet).         Because Deck did not conclusively establish the

affirmative defense of the statute of limitations and did not address the discovery rule,

we conclude that the trial court erred in granting summary judgment. We accordingly

reverse summary judgment on this claim.

      2. Claim for Conversion
      Deck’s motion for summary judgment on this claim recites that the claim is

repetitive of appellant’s claim for assumpsit, states that the statute of limitations on

conversion is two years, and argues that the statute of limitations has therefore run.

      The statute of limitations in conversion cases generally begins to run at the time

of the unlawful taking. Burns v. Rochon, 190 S.W.3d 263, 271 (Tex. App.—Houston

2006, no pet.). The discovery rule can apply to conversion cases, including cases

where, as here, possession of the property “is initially lawful.” Id. (citing Hofland v.

Elgin-Butler Brick Co., 834 S.W.2d 409, 414 (Tex. App.—Corpus Christi 1992, no writ)).

Deck’s motion suffers from the same defects as his motion on the assumpsit claim;

Deck does not establish, or even discuss, the date on which the cause of action would

have accrued.    Deck also does not address the discovery rule even though it was

affirmatively plead by appellant. As the moving party, Deck had the burden both to

establish that the statute is applicable, including the date on which the statute began to

run, and to negate the discovery rule. Guirdy, 282 S.W.3d at 622. Because Deck’s

motion on this claim did neither, we conclude that the court erred in granting summary

judgment. We reverse summary judgment on this claim.

                                            7
       3. Claim for Fraud
       Deck’s motion for summary judgment on appellant’s claim for common-law fraud

recites that the statute of limitation is four years, that more than four years passed

between “the transaction” and the time appellant filed suit, and argues that the statute of

limitations has therefore run. The elements of common-law fraud are: (1) a material

representation, (2) that was false, (3) when the speaker made the representation he

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

assertion, (4) speaker made the representation intending to induce the other party to act

on it, (5) the party acted in reasonable reliance on the representation, and (6) the party

relying on the representation suffered injury. In re First Merit Bank, N.A., 52 S.W.3d
749, 758 (Tex. 2001). In general, an action for common-law fraud accrues on the date

appellant made the allegedly false representations. Seureau v. ExxonMobil Corp., 274
S.W.3d 206, 226 (Tex. App.—Houston [14th Dist.] 2008, no pet).

       Deck’s motion does not address the representations that he allegedly made to

appellant or address the application of the discovery rule in this case. As the party

moving for traditional summary judgment, it was Deck’s burden to establish both the

date on which the statute began to run and to either negate the discovery rule or explain

why it is inapplicable.    Deck’s motion thus did not establish the date on which

appellant’s cause of action would have accrued. Because Deck’s motion on this claim

does not fulfill either of these requirements, we find that he did not conclusively

establish the statute of limitations as his affirmative defense. We reverse summary

judgment on this claim.

                                            8
        4. Claim for Breach of Fiduciary Duty
        Deck sought a no-evidence summary judgment on appellant’s claim on the basis

that there is no evidence that he owed appellant a fiduciary duty. Appellant argued that

Deck, as trustee, owed appellant a fiduciary duty as the named beneficiary.                         Deck

argued that Texas law is clear that the named trustee of a deed of trust does not owe a

fiduciary duty to the beneficiary. See Powell v. Stacey, 117 S.W.3d 70, 74 (Tex. App.—

Fort Worth 2003, no pet.) (“A trustee’s duties are fulfilled by strictly complying with the

terms of the deed of trust.”). Deck also argued that he had no other dealings with

appellant that were sufficient to create a fiduciary relationship. Appellant attached the

promissory note and deed of trust to his amended response to Deck’s summary

judgment motion. However, appellant did not discuss how those documents raise the

scintilla of evidence necessary to defeat no-evidence summary judgment; accordingly,

appellant failed to meet his burden. TEX. R. CIV. P. 166a(c) (“Issues not expressly

presented to the trial court by written motion, answer, or other response shall not be

considered on appeal as grounds for reversal.”); see also Morris v. Enron Oil & Gas

Co., 948 S.W.3d 858, 867 (Tex. App.—San Antonio 1997, no pet.).3                              Therefore,

appellant has failed to meet his burden.                The trial court properly granted summary

judgment on this claim.

        3
           Even if appellant had argued this point in his response, we do not see how he could raise a fact
issue on a breach of fiduciary relationship relating to the deed of trust. Although a trustee who exercises
a power granted in the deed becomes the “special agent” of both parties and must “act with absolute
impartiality and with fairness to all concerned,” appellant did not bring forth any evidence that Deck
exercised any of his powers as trustee. Powell v. Stacey, 117 S.W.3d 70, 73 (Tex. App.—Fort Worth
2003, no pet.).

                                                    9
   D. Garcia’s Motion for Summary Judgment
       Garcia’s motion as to appellant’s claims for breach of contract, assumpsit, and

conversion is a traditional motion for summary judgment and a no-evidence motion as

to the claim of fraud.

   1. Claims for Assumpsit and Conversion
       Garcia’s motion for traditional summary judgment on appellant’s claims for

assumpsit and conversion is materially identical to Deck’s motion and suffers from the

same defects. We accordingly reverse the grant of summary judgment on those claims

for the reasons discussed above.

   2. Claim for Breach of Contract
       Garcia’s motion on the claim for breach of contract recites the time period in

which the sale closed, the date appellant filed suit, and recites that the cause of action

is therefore barred by limitations. In Texas, a breach of contract claim “accrues when

the contract is breached.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006).

The supreme court has recognized that the discovery rule can apply to breach of

contract actions, but observed that such instances “should be rare, as diligent

contracting parties should generally discover any breach during the relatively long four-

year limitations period provided for such claims.” Id. at 315. Garcia’s motion on this

claim does not mention the Texas statute of limitations for breach of contract claims or

discuss the date on which the statute would have begun to run on appellant’s claim.

Garcia’s motion also does not address the discovery rule. As the party moving for

summary judgment, Garcia had the burden to conclusively establish that the statute is

applicable, including the date on which the statute began to run, and to either negate

the discovery rule or explain why it is inapplicable. Because Garcia’s motion does not

                                           10
meet either of these requirements, we conclude that Garcia did not conclusively

establish his affirmative defense of limitations.   We accordingly reverse summary

judgment on this claim.

   3. Claim for Fraud
      In the no-evidence portion of his motion, Garcia argued that appellant could not

provide evidence proving two of the elements of fraud. The elements of common-law

fraud are: (1) a material representation, (2) that was false, (3) when the speaker made

the representation he knew it was false or made it recklessly without knowledge of the

truth and as a positive assertion, (4) the speaker made the representation intending to

induce the other party to act on it, (5) the party acted in reasonable reliance on the

representation, (6) the party relying on the representation suffered injury. In re First

Merit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Garcia argued in his motion that

appellant could not produce any evidence of the last two elements of fraud, reliance and

damages.

      Garcia appears to have moved for summary judgment on a claim that appellant

did not make against him. Appellant alleges that Garcia represented to appellant that

the funds had been seized by the federal government. Appellant does not allege that

Garcia ever represented to appellant that he would release the funds to appellant if

appellant appeared in person. Garcia, however, moved for summary judgment on the

fraud claim on the basis that plaintiff has produced no proof of his reliance “on the

alleged representation that the funds were available to him once he personally

presented himself to collect them.” Because Garcia’s motion does not track appellant’s

live pleading, we reverse the grant of summary judgment on this issue.

                                          11
                                       III. CONCLUSION
       Having reversed the grant of summary judgment as to all of appellant’s claims

against all defendants except for the claim against Deck for breach of fiduciary duty, we

remand to the trial court for further proceedings consistent with this opinion.

                                                 _______________________
                                                 NORA L. LONGORIA
                                                 Justice

Delivered and filed the
4th day of April, 2013.

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