Court Opinion

ID: 4108323
Source: CourtListenerOpinion
Date Created: 2016-12-19 08:18:56.173979+00
Date Added: 2024-06-11T12:21:34.235699
License: Public Domain

Fourth Court of Appeals
                                       San Antonio, Texas
                                               OPINION
                                           No. 04-16-00078-CV

                                           CODY TEXAS, L.P.,
                                              Appellant

                                                    v.

                                     BPL EXPLORATION, LTD.,
                                             Appellee

                      From the 49th Judicial District Court, Zapata County, Texas
                                        Trial Court No. 8,665
                              Honorable Jose A. Lopez, Judge Presiding

Opinion by:       Jason Pulliam, Justice

Sitting:          Patricia O. Alvarez, Justice
                  Luz Elena D. Chapa, Justice
                  Jason Pulliam, Justice

Delivered and Filed: December 14, 2016

REVERSED AND RENDERED; REMANDED FOR FURTHER PROCEEDINGS

                                             INTRODUCTION

           Cody Texas L.P. (Cody Texas) filed a petition for bill of review seeking to set aside a final

judgment entered following a bench trial. In this proceeding, Cody Texas asserted it did not

receive notice of the final judgment until the trial court’s plenary power expired, and therefore,

was not afforded the opportunity to appeal. The parties filed cross motions for summary judgment.

The trial court denied Cody Texas’s petition for bill of review through rendition of summary

judgment in favor of appellee, BPL Exploration, Ltd. (BPL) and denial of Cody Texas’s cross
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motion for summary judgment. In two points of error, Cody Texas contends: (1) the trial court

erred by issuing summary judgment based upon a finding that Cody Texas was negligent in failing

to learn of the May 31, 2013 final judgment; and (2) the trial court erred by issuing summary

judgment based upon a finding that Cody Texas failed to prove a meritorious ground of appeal that

the statute of limitations had expired on both of BPL’s causes of action prior to the time BPL filed

suit, and this accrual was not deferred by the discovery rule or fraudulent concealment.

       Because we conclude the undisputed facts indicate that neither the discovery rule or the

fraudulent concealment doctrine deferred accrual of BPL’s breach of contract and fraud causes of

action, Cody Texas had a meritorious ground for appeal of expiration of the applicable statute of

limitations as a matter of law. We also conclude the undisputed facts establish Cody Texas’s

failure to receive notice of the trial court’s May 31 final judgment was not mixed with any

negligence of its own and Cody Texas’s failure to file a timely notice of appeal was caused by the

official mistake of the trial court clerk’s failure to provide notice of the May 31 final judgment.

Therefore, the trial court erred by granting BPL’s motion for summary judgment, erred by denying

Cody Texas’s motion for summary judgment and erred by denying Cody Texas’s bill of review.

                                          BACKGROUND

       As the plaintiff in the original, underlying lawsuit, BPL asserted causes of action of fraud

and breach of contract against Cody Texas stemming from alleged violations of a preferential right

to purchase provision in a joint operating agreement. The underlying suit was filed in November

2005 and tried to the bench in February 2009. On May 31, 2013, the trial court signed a “Final

Judgment” in favor of BPL and disposing “of all parties and all claims”. On the same day and

without knowledge of the final judgement, Cody Texas filed a request for additional and amended

findings of fact and conclusions of law as well as its objections to the proposed judgment that had

previously been submitted. The district clerk of the court entered the final judgment on the trial
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court docket sheet six days later on June 6, 2013, but failed to give the parties or their attorneys

notice of this judgment. Cody Texas filed an “Amended Request for Additional and Amended

Findings of Fact and Conclusions of Law” on August 21, 2013, and indicated therein that “as of

the date of this Request the docket sheet still did not show that a final judgment had been entered.”

       The parties do not dispute that counsel for Cody Texas did not learn the original “Final

Judgment” had been entered until, at the earliest, October 9, 2013, when the trial court signed

another “Final Judgment”, and the district clerk sent copies of this judgment to the parties’ counsel.

Cody Texas subsequently filed a motion for new trial, and then, on January 2, 2014, filed a notice

of appeal. This court dismissed that appeal for lack of jurisdiction concluding the second “Final

Judgment” was void as a matter of law because the trial court had lost plenary power when it

signed the October 9, 2013 judgment. Cody Texas, L.P. v. BPL Expl., Ltd., 04-14-00087-CV, 2014

WL 1722126, at *1 (Tex. App.—San Antonio Apr. 30, 2014, no pet.). Consequently, the May 31,

2013 judgment was the live, valid judgment, and the appeal was untimely. Id.

       Cody Texas then filed the underlying petition for bill of review in the trial court. Both

parties filed motions for summary judgment. Following a summary judgment hearing, the trial

court denied Cody Texas’s bill of review by granting BPL’s motion for summary judgment and

denying Cody Texas’s motion. Cody Texas perfected this appeal.

                                             ANALYSIS

                               Summary Judgment Burden of Proof

       To prevail on a summary judgment motion, a movant has the burden of proving that there

is no genuine issue of material fact, and it is entitled to judgment as a matter of law. TEX. R. CIV.

P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). When a defendant moves for

summary judgment, it must disprove at least one essential element of the plaintiff’s cause of action.

Cathey, 900 S.W.2d at 341. When a plaintiff moves for summary judgment on its own theory of
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recovery, the plaintiff must prove it is entitled to summary judgment by establishing each element

of its claim as a matter of law based upon undisputed or conclusive facts. City of Houston v. Clear

Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979); Nelson v. Regions Mortg., Inc., 170

S.W.3d 858, 864 (Tex. App.—Dallas 2005, no pet.).

       When, as here, parties file cross motions for summary judgment, each party in support of

its own motion necessarily takes the position, and must so prove, that there is no genuine issue of

material fact in the case, and it is entitled to judgment as a matter of law. Ackermann v.

Vordenbaum, 403 S.W.2d 362, 364 (Tex. 1966); Lambrecht & Assocs., Inc. v. State Farm Lloyds,

119 S.W.3d 16, 20 (Tex. App.—Tyler 2003, no pet.). If one motion is granted and the other denied,

we must review the summary judgment evidence presented by both sides and determine all

questions presented. Comm’rs Court of Titus Cnty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).

                                 Bill of Review Burden of Proof

       A bill of review is an equitable, independent action brought by a party who seeks to set

aside a judgment that is no longer subject to challenge by a motion for new trial or appeal.

Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004); Baker v. Goldsmith, 582 S.W.2d 404, 406

(Tex. 1979). To succeed upon a bill of review, a petitioner who participated in the trial court

proceedings that resulted in the challenged judgment must plead and prove: (1) a meritorious

ground of appeal exists; (2) which the party was prevented from presenting in a motion for new

trial or an ordinary appeal by the fraud, accident, or wrongful act of the opposing party, or by an

official mistake or misinformation; (3) unmixed with any fault or negligence of its own. Petro–

Chem. Transp., Inc. v. Carroll, 514 S.W.2d 240, 245–46 (Tex. 1974); McDaniel v. Hale, 893

S.W.2d 652, 660, 662–63 (Tex. App.—Amarillo 1994, writ denied). The primary inquiry is

whether the petitioner made a prima facie showing of a meritorious ground of appeal. Petro-

Chem., 514 S.W.2d at 245–46. A meritorious ground of appeal is one that probably would have
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caused the judgment to be reversed had it been presented to the appellate court. Petro–Chem., 514

S.W.2d at 245–46; McDaniel, 893 S.W.2d at 666–67. Thus, “[a] meritorious ground of appeal

means a claim that would likely be a successful point of error in the court of appeals.” McDaniel,

893 S.W.2d at 672.

       In sum, to be entitled to summary judgment, a bill-of-review plaintiff must conclusively

prove no genuine issue of material fact exists as to each element of its bill-of-review action, and it

is entitled to a bill of review as a matter of law. See Comm’rs Court of Titus Cnty., 940 S.W.2d at

81; Cathey, 900 S.W.2d at 341; Wuxi Taihu Tractor Co., Ltd. v. York Group, Inc., 01-13-00016-

CV, 2014 WL 6792019, at *4 (Tex. App.—Houston [1st Dist.] Dec. 2, 2014, pet. denied) (mem.

op.). A bill-of-review defendant moving for summary judgment must disprove at least one

essential element of the plaintiff’s bill of review by conclusively establishing no genuine issue of

material fact exists and the plaintiff’s assertion with regard to the element fails as a matter of law.

See Comm’rs Court of Titus Cnty., 940 S.W.2d at 81; Cathey, 900 S.W.2d at 341; Wuxi Taihu

Tractor Co., Ltd., 2014 WL 6792019, at *4.

                              Summary Judgment Standard of Review

       When a trial court grants summary judgment on a bill of review, the summary judgment

standard of review applies upon appeal. See Boaz v. Boaz, 221 S.W.3d 126, 131 (Tex. App.—

Houston [1st Dist.] 2006, no pet.). When cross motions for summary judgment are filed, we review

the trial court’s grant and, if necessary, denial of summary judgment on a bill of review de novo

and must review the summary judgment evidence presented by both sides and examine all issues

presented. Comm’rs Court of Titus Cnty., 940 S.W.2d at 81; Boaz, 221 S.W.3d at 131. In so

doing, we first review the order granting summary judgment. Lambrecht & Assocs., 119 S.W.3d

at 20. Only if we determine the order granting summary judgment was erroneous do we review

the trial court’s action in overruling the denied motion. Id.
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       If the issue raised in a motion for summary judgment is based upon undisputed and

unambiguous facts, the appellate court must determine the question presented as a matter of law.

Gramercy Ins. Co. v. MRD Investments, Inc., 47 S.W.3d 721, 725 (Tex. App.—Houston [14th

Dist.] 2001, pet. denied); McCreight v. City of Cleburne, 940 S.W.2d 285, 287–88 (Tex. App.—

Waco 1997, writ denied). In this situation, the appellate court will either affirm the judgment or

reverse and render the correct judgment. Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988);

McCreight, 940 S.W.2d at 287–88. However, if determination of the issue presented lies in

disputed or ambiguous facts, summary judgment is inappropriate, and the appellate court must

reverse and remand. See Coker v. Coker, 650 S.W.2d 391, 394–95 (Tex. 1983); McCreight, 940

S.W.2d at 287–88.

       Thus, in the context of this appeal from the denial of a bill of review arising out of cross

motions for summary judgment, we review first the propriety of the trial court’s summary

judgment in favor of BPL, and, if necessary, will then review the propriety of the trial court’s

denial of Cody Texas’s motion for summary judgment. As the successful summary-judgment

movant, BPL was required to establish no genuine issue of material fact exists regarding at least

one of the three required bill-of-review elements, and it is entitled to judgment denying the bill of

review as a matter of law.

       BPL challenged two of the three bill of review elements: meritorious ground of appeal and

whether Cody Texas’s inability to appeal was mixed with its own negligence. We must address

first the meritorious-ground-of-appeal element and determine whether the trial court erred by

finding Cody Texas does not have a meritorious ground of appeal as a matter of law, and no

genuine issue of material fact exists on this element. If we conclude that the trial court erred and

conclude Cody Texas had a meritorious ground of appeal, we must then similarly examine the

second challenged bill-of-review element: whether Cody Texas was negligent by failing to
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discover the trial court entered a final judgment prior to the time the trial court’s plenary power

expired.

                                                    Application

    I.       First Element: Meritorious Ground of Appeal

         In its petition for bill of review and on appeal, Cody Texas argued it held and presented

prima facie evidence of a meritorious ground of appeal that the statute of limitations expired on

BPL’s fraud and breach of contract causes of action, thereby barring adjudication of each. 1

                                         Undisputed Underlying Facts

         De novo review of the record and arguments reveal the underlying facts necessary to

analyze and determine the statute-of-limitations issue, that is, the accrual date of BPL’s causes of

action, are undisputed. Therefore, the trial court’s summary judgment was based upon undisputed

facts, and it determined the statute of limitations issue as a matter of law.

         In 1994, BPL and Mustang Oil & Gas Corp. (“Mustang”) acquired nine wells on four

different leases in Zapata County, Texas and 100% of the working interests in the wells. BPL and

Mustang entered into a Joint Operating Agreement (the “JOA”), under which Mustang acted as

the operator with an 80% interest, and BPL held a 20% interest. The JOA contained the following

“preferential right to purchase” provision:

         Should any party desire to sell all or any part of its interests under this agreement,
         or its rights and interests in the Contract Area, it shall promptly give written notice
         to the other parties, with full information concerning its proposed disposition,
         which shall include the name and address of the prospective transferee (who must
         be ready, willing and able to purchase), the purchase price, a legal description
         sufficient to identify the property, and all other terms of the offer. The other parties
         shall then have an optional prior right, for a period of ten (10) days after the notice

1
 In its petition for bill of review, Cody Texas argued it had three meritorious grounds of appeal. However, on appeal,
Cody Texas challenges the trial court’s summary judgment with regard to the statute-of-limitations ground, only.
Therefore, this court will only analyze the propriety of the trial court’s summary judgment with regard to the statute-
of-limitations ground of appeal.

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       is delivered, to purchase for the stated consideration on the same terms and
       conditions the interest which the other party proposes to sell. . . .

The JOA provides that its terms, including the preferential right provision, run with the land and

are binding on the parties and their successors and assigns.

       In 1997, Mustang filed a bankruptcy proceeding, through which Choctaw Corporation

(“Choctaw”) acquired all of Mustang’s 80% working interest in the JOA Properties. In the same

bankruptcy proceeding, Queen Sand Resources (“QSR”) acquired overriding royalty interests

attached to a portion of Mustang’s interests in non-JOA properties.

       On April 18, 2000, Cody Texas sent a “letter of intent” to Choctaw and QSR offering to

purchase all of each party’s interests in various properties, which included Choctaw’s 80% interest

in the JOA Properties. Cody and QSR entered into a separate letter agreement on April 20, 2000,

under which Cody agreed to transfer to QSR 25% of its interest in all of the properties (JOA and

non-JOA properties) received under the April 18 letter of intent. On April 24, 2000, Choctaw and

QSR entered into a letter agreement providing that: (1) QSR would accept Cody’s April 18 offer;

and (2) Choctaw would receive $777,000 of the proceeds from the transaction for its interests in

the JOA Properties. An exhibit attached to the letter agreement explained how Choctaw and QSR

would split the $16,275,000 Cody was paying for the entire property package. Choctaw would

receive $777,000 “off the top” for the JOA Properties, because QSR had no interest in those

properties to sell. The remainder would be split based on Choctaw’s and QSR’s respective

interests in the other properties being sold.

       On June 7, 2000, Cody, Choctaw, and QSR executed a “Purchase and Sale Agreement”

(“PSA”) with an allocation provision providing that each property would have two values:

       (c) Allocation of the Purchase Price. Purchaser [Cody] shall allocate the Purchase
       Price (“Allocated Value”) among the Property as set forth in Exhibit “B” hereto
       and which shall be acceptable to Seller…. The Allocated Value set out in Exhibit
       “B” reflects the working interest and net revenue interests in each Well and in
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        reserves … associated with those Wells, as set out in Exhibit “A”. Choctaw and
        Queen Sand agree to apportion the Allocated Value of each Property between the
        Choctaw Interest and the Queen Sand Interest without Purchaser’s Involvement and
        in accord with that certain letter agreement between Choctaw and Queen Sand
        dated April 24, 2000.

It is undisputed that pursuant to the above provision, Cody assigned an “Allocated Value” to each

of the JOA properties for a total of $947,000. Pursuant to their letter agreement, Choctaw and

QSR agreed to apportion this allocated value, entitling Choctaw to receive $777,000 before the

remainder was split with QSR based on each party’s respective interests. Also pursuant to the

PSA and the letter agreements, the sale or transfer of all of the properties between Choctaw, Cody

Texas and QSR was to be considered effective January 1, 2000, thereby granting Cody Texas the

right to proceeds from any operations on the JOA Properties beginning January 1, 2000. Cody

Texas agreed to “assume and pay, perform, fulfill and discharge of [sic] all claims, costs, expenses,

liabilities and obligations attributable to the period of time after the Effective Date accruing or

relating to . . . owning, developing, exploring, operating or maintaining the Property . . . .” effective

January 1, 2000.

        On June 9, 2000, Choctaw sent BPL a letter informing BPL of the potential sale. In this

notice, Choctaw stated that it planned to sell its interests in the JOA Properties to Cody Texas, as

well as the allocated price of $947,000. The letter did not reveal any other terms of the sale, such

as the retroactive effective date, and did not disclose that Choctaw actually would receive $777,000

for its interests in the JOA Properties and split the remainder with QSR pursuant to their respective

interests in all of the properties sold. The letter did not inform BPL about Cody Texas’s agreement

to transfer to QSR 25% of its interests in all of the properties it was purchasing.

        Upon receipt of the letter, Bill Baker, BPL’s Manager, immediately contacted Choctaw

and requested additional information, including the PSA, the allocation facts, and confirmation of

the price.   Choctaw refused to provide any documents or further information, claiming a
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confidentiality clause in the PSA precluded such disclosure. On June 12, 2000, Bill Baker, as

representative of BPL, executed and returned the notice letter indicating BPL waived its

preferential right to purchase the JOA properties that were the subject of the impending sale.

       On June 30, 2000, Choctaw, Cody Texas and QSR executed the documents necessary to

fulfill the terms of the PSA. Choctaw conveyed its interests in the JOA Properties to Cody Texas

by assignment, effective January 1, 2000. Cody Texas conveyed to QSR by assignment an

undivided 25% of its interests in all of the properties, effective January 1, 2000. All parties filed

the documents of transfer in the public records of Zapata County on July 11, 2000.

       On October 22, 2004, BPL learned of Cody Texas’s transfer of its 25% interest in the JOA

properties to QSR. Following failed discussions, BPL filed suit against Choctaw, Cody Texas and

others on November 28, 2005 alleging breach of contract (the JOA Agreement). BPL alleged the

defendant parties violated the preferential right provision with regard to the sale of the JOA

properties by Choctaw to Cody Texas. BPL asserted that Cody Texas incurred any liability for

Choctaw’s breach of contract because the effective date of the transfer of the JOA properties was

backdated to January 1, 2000.

       During discovery in the ongoing litigation, BPL learned of the PSA and letter agreements

between the parties which disclosed the transfer of interest by Cody Texas to QSR. BPL then

amended its pleading to add fraud and breach of contract causes of action with regard to the Cody

Texas/QSR transaction, asserting Cody Texas breached the JOA preferential-right-to-purchase

provision by failing to provide BPL notice of Cody Texas’s transfer of its 25% interest to QSR

before it occurred, again based upon the backdate to January 1, 2000.

                        Determination of Accrual of the Causes of Action

       The purpose of statutes of limitations is to compel the assertion of claims within a

reasonable period while the evidence is fresh in the minds of the parties and witnesses. Computer
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Assocs. Intern., Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). To ensure prompt assertion

of claims, the Texas statute of limitations requires that any suit alleging breach of contract or fraud

must be filed within four years of the date the cause of action accrued. See TEX. CIV. PRAC. &

REM. CODE ANN. § 16.004, 16.051 (West 2002); Via Net v. TIG Ins. Co., 211 S.W.3d 310, 315

(Tex. 2006).

       A cause of action accrues when a wrongful act causes some legal injury, even if the fact of

injury is not discovered until later and even if all resulting damages have not yet occurred. S.V. v.

R.V., 933 S.W.2d 1, 4 (Tex. 1996); Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex.

1990). Thus, for a cause of action to begin to accrue, a party need only be aware of enough facts

to apprise him of his right to seek judicial remedy. Moreno, 787 S.W.2d at 351; Booker v. Real

Homes, Inc., 103 S.W.3d 487, 491–92 (Tex. App.—San Antonio 2003, pet. denied).

       Accrual of a cause of action is deferred in two types of cases: those involving fraud, in

which the fraudulent concealment doctrine would apply, and all others, in which the discovery-

rule exception would apply. S.V., 933 S.W.2d at 6. First, when fraudulent concealment is alleged,

“accrual is deferred because a person cannot be permitted to avoid liability for his actions by

deceitfully concealing wrongdoing until limitations has run.” Computer Assocs. Intern., Inc., 918

S.W.2d at 456. Fraud, “in and of itself prevents running of the statute of limitations.” Id. In all

other cases, accrual can be deferred if the discovery rule applies. Id.

       Because BPL asserted both fraudulent concealment and discovery rule exceptions to the

strictly enforced statute of limitations, and each exception must be analyzed differently to

determine its applicability, each will be discussed separately. See id.

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    1. Breach of Contract Cause of Action and Discovery Rule Exception to the Statute of
       Limitations

         A breach of contract claim accrues when the contract is breached. Cosgrove v. Cade, 468

S.W.3d 32, 39 (Tex. 2015); B. Mahler Interests, L.P. v. DMAC Constr., Inc., 14-15-00061-CV,

2016 WL 4922775, at *3 (Tex. App.—Houston [14th Dist.] Sept. 15, 2016, no. pet. h.). A breach

of contract occurs when a party fails or refuses to do something he is contractually obligated to do.

Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 227 (Tex. App.—Houston [14th Dist.] 2008, no

pet.).

         Because it compromises the purpose of statutes of limitations, the discovery rule is a very

limited exception to the general rule of accrual and determination must be made, first, whether the

discovery rule applies under the circumstances and facts in any given case. Computer Assocs.

Intern., Inc., 918 S.W.2d at 455. “The discovery rule may apply to a breach of contract claim, but

‘those cases should be rare, as diligent contracting parties should generally discover any breach

during the relatively long four-year limitations period provided for such claims.’” Via Net, 211

S.W.3d at 315; Clear Lake Ctr., L.P. v. Garden Ridge, L.P., 416 S.W.3d 527, 543 (Tex. App.—

Houston [14th Dist.] 2013, no pet.).

         In cases other than those involving fraud, the discovery rule may apply to defer the accrual

of a cause of action when “the alleged wrongful act and resulting injury were inherently

undiscoverable at the time they occurred but may be objectively verified.” S.V., 933 S.W.2d at 6.

These two elements balance the conflicting policies in statutes of limitations: the benefits of

precluding stale or spurious claims versus the risks of precluding meritorious claims that happen

to fall outside an arbitrarily set period.      S.V., 933 S.W.2d at 6.       The term “inherently

undiscoverable” does not mean that the injury is absolutely impossible to discover. S.V., 933

S.W.2d at 7. “[D]iscovery of a particular injury is dependent not solely on the nature of the injury

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but on the circumstances in which it occurred and plaintiff’s diligence as well.” Id. Thus, an injury

is “inherently undiscoverable if it is by nature unlikely to be discovered within the prescribed

limitations period despite due diligence.” Id. (citing Computer Assocs., 918 S.W.2d at 456); see

Bayou Bend Towers Council of Co-Owners v. Manhattan Construction Co., 866 S.W.2d 740, 742–

743 (Tex. App.—Houston [14th Dist.] 1993, writ denied). Reference to “injury” refers to the facts

giving rise to a cause of action, and does not refer to the extent of any damages that may result

from a wrongful act. S.V., 933 S.W.2d at 7.

       If it is determined the plaintiff’s injury is inherently undiscoverable and injury is

objectively verifiable, the discovery rule applies to defer the accrual of a cause of action until the

plaintiff discovers or, through the exercise of reasonable care and diligence, should have

discovered the facts establishing a cause of action. Via Net, 211 S.W.3d at 313-14; Booker, 103

S.W.3d at 491–92. Therefore, a cause of action does not accrue when the first damage is observed

or when the full extent of the damage is known, but rather when the injured party knew or should

have known of the facts giving rise to the cause of action. Via Net, 211 S.W.3d at 313-14; Booker,

103 S.W.3d at 491–92.

       The discovery rule imposes a duty on the plaintiff to exercise reasonable diligence to

discover the facts giving rise to a cause of action. Via Net, 211 S.W.3d at 314; Bayou Bend, 866

S.W.2d at 743. Because contracting parties generally are not fiduciaries, due diligence requires

that each party protect its own interests. Via Net, 211 S.W.3d at 314; B. Mahler Interests, 2016

WL 4922775, at *4. “Due diligence may include asking a contract partner for information needed

to verify contractual performance. If a contracting party responds to such a request with false

information, accrual may be delayed for fraudulent concealment. But failing to even ask for such

information is not due diligence.” Via Net, 211 S.W.3d at 314 (citations omitted); see also

Seureau, 274 S.W.3d at 229.
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       Following this analytical framework, when the statute of limitations and the discovery rule

exception are asserted, the first issue to be determined is whether the discovery rule applies. If the

facts giving rise to the cause of action are inherently undiscoverable and any injury is objectively

verifiable, then the discovery rule applies. If this occurs, the second issue to be determined is when

the cause of action accrued. This is determined by when the plaintiff knew, or in the exercise of

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

Via Net, 211 S.W.3d at 314; B. Mahler Interests, 2016 WL 4922775, at *4.

       In cases such as this, when the parties file cross motions for summary judgment on the

affirmative defense of statute of limitations and the discovery-rule exception is asserted, each party

has the burden to establish conclusively its position whether the discovery rule applies. See KPMG

Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999); Lambrecht

& Assocs., 119 S.W.3d at 20; Clear Lake Ctr., 416 S.W.3d at 543. If the discovery rule does apply,

each party has the burden to establish conclusively its position on when the cause of action accrued

by proving there is no genuine issue of material fact about when the plaintiff discovered, or in the

exercise of reasonable diligence should have discovered, the nature of its injury, and the party is

entitled to summary judgment as a matter of law. Lambrecht & Assocs., 119 S.W.3d at 20.

       In this case, Cody Texas argues, first, the trial court erred by granting summary judgment

because, based upon the undisputed facts, the discovery rule does not apply and the statute of

limitations bars BPL’s breach of contract cause of action. Even if the discovery rule does apply,

Cody Texas asserts BPL knew or should have known of the facts giving rise to its cause of action

against Cody Texas when Choctaw provided notice of the impending sale on June 9, 2000. Cody

Texas also contends BPL had constructive notice as a matter of law when the transaction

documents were filed in Zapata County.

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         BPL responds that the trial court did not err by granting summary judgment because the

discovery rule does apply to defer accrual of its breach of contract causes of action. BPL contends

Cody Texas is liable for Choctaw’s breach of contract because the PSA backdated all transfers to

January 1, 2000. BPL also argues it first gained access to the PSA through discovery in the

litigation. Thereby, with regard to the Cody Texas/QSR transfer of interest, BPL asserts it first

learned of the facts supporting its breach of contract and fraud causes of action against Cody Texas

during this litigation.

         As stated, the facts necessary to determine whether the discovery rule applies, and if so,

the accrual date of the breach-of-contract cause of action are undisputed. These undisputed facts

establish that, as required by the preferential right to purchase provision, on June 9, 2000, Choctaw

sent BPL notice of its impending sale of the JOA properties to Cody Texas. Because the notice

letter did not disclose all of the information required by the preferential right to purchase provision

in the JOA, BPL’s Manager Bill Baker responded requesting this information. When Choctaw

refused disclosure of the required information, Baker responded by waiving BPL’s preferential

right to purchase the JOA properties.

         a) Choctaw/Cody Texas Transaction 2:

         To the extent BPL’s breach of contract cause of action is based upon Cody Texas’s

assumption of liability for Choctaw’s breach, based upon this undisputed evidence, the facts giving

rise to BPL’s breach of contract cause of action were not inherently undiscoverable. This

undisputed evidence establishes that in June 2000 BPL was aware of Choctaw’s potential breach

2
  Cody Texas was not a party to the JOA between BPL and Choctaw. Therefore, with regard to the Choctaw/Cody
Texas transfer, BPL’s breach of contract cause of action against Cody Texas is based upon BPL’s assertion that Cody
Texas assumed liability for Choctaw’s breach of contract due to the backdating of the PSA agreement to January 1,
2000, and in which Cody Texas agreed to “assume and pay, perform, fulfill and discharge of [sic] all claims, costs,
expenses, liabilities and obligations attributable to the period of time after the Effective Date accruing or relating to
. . . owning, developing, exploring, operating or maintaining the Property . . . .”

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                                                                                       04-16-00078-CV

of the preferential rights provision in the JOA or was aware of sufficient facts to impose an

obligation to exercise reasonable diligence to protect its own interest. When Choctaw refused to

disclose the information required by the preferential rights provision of the JOA, BPL knew of the

circumstances and facts that gave rise to its breach of contract action, and, in fact, acted by waiving

its right to preferential purchase rather than pursue the full disclosure of information required.

Because under these undisputed facts, BPL knew of the facts and circumstances giving rise to its

breach of contract cause of action, its cause of action was not inherently undiscoverable as a matter

of law. See Via Net, 211 S.W.3d at 314; B. Mahler Interests, 2016 WL 4922775, at *6. To the

contrary, the facts and circumstances giving rise to its cause of action were known, and given that,

BPL was aware of the impending sale to Cody Texas, due diligence required BPL to protect its

own interests. See Via Net, 211 S.W.3d at 314; B. Mahler Interests, 2016 WL 4922775, at *6;

Seureau, 274 S.W.3d at 229.

       Because the facts and circumstances giving rise to BPL’s breach-of-contract cause of

action against Choctaw were not inherently undiscoverable, the discovery rule does not apply to

defer accrual of this cause of action as a matter of law. See Via Net, 211 S.W.3d at 314; B. Mahler

Interests, 2016 WL 4922775, at *6. These undisputed facts do not present one of those “rare”

circumstances in which a contracting party exercising reasonable diligence could not discover the

breach during the “relatively long four-year limitations period.” See Via Net, 211 S.W.3d at 315;

B. Mahler Interests, 2016 WL 4922775, at *6.

       Thus, BPL’s breach of contract causes of action against Cody Texas accrued in June 2000

when Choctaw sent the notice letter to BPL and subsequently refused BPL’s request for

information in compliance with the preferential right to purchase provision in the JOA. BPL filed

its breach of contract actions against Choctaw and Cody Texas on November 28, 2005, outside of

the four-year statute of limitations. Therefore, BPL’s breach of contract causes of action against
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                                                                                      04-16-00078-CV

Cody Texas are barred by the four-year statute of limitations. For this reason, Cody Texas

presented prima facie proof of a meritorious ground of appeal on BPL’s breach of contract cause

of action with regard to the Choctaw/Cody Texas transfer.

       b) Cody Texas/QSR Transaction:

       To the extent BPL’s breach of contract action is based upon Cody Texas’s failure to notify

it of Cody Texas’s transfer of 25% interest in the JOA properties to QSR, the facts giving rise to

this cause of action were not inherently undiscoverable, thereby precluding application of the

discovery rule. As with the Choctaw/Cody Texas transfer, BPL had sufficient information and

facts to discover the information required to be disclosed in the JOA before Cody Texas’s transfer

to QSR. S.V., 933 S.W.2d at 6; Computer Assocs., 918 S.W.2d at 456. The Choctaw/Cody Texas

transfer and the Cody Texas/QSR transfer occurred simultaneously as part of the same negotiated

sale of properties. Consequently, any disclosure of the sale price of the JOA properties would

have necessarily included disclosure of the Cody Texas/QSR transfer of interest. The Cody

Texas/QSR transfer did not create any injury of the nature that was “unlikely to be discovered”.

Although subject to a confidentiality provision, the fact of the transfer itself was discoverable and

any obligation by Choctaw to disclose the full terms of the sale of the JOA properties was known

to be compelled by the JOA. Therefore, under these circumstances, any injury by BPL was not

“by nature unlikely to be discovered within the prescribed limitations period despite due diligence.”

S.V., 933 S.W.2d at 6; Computer Assocs., 918 S.W.2d at 456.

       Further, Cody Texas could not have incurred any contractual obligation to notify BPL of

its transfer to QSR until June 30, 2000, the day the transfers occurred. Although the PSA

backdated the transfers to January 1, 2000, as a non-party to the JOA, Cody Texas could not have

incurred any contractual obligation under the JOA until Cody Texas received the JOA properties

from Choctaw on June 30, 2000. Therefore, although the transfer of the property was backdated,
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                                                                                      04-16-00078-CV

any contractual obligation compelling Cody Texas to provide notice under the preferential rights

provision could not have been incurred until the actual transfer on June 30, 2000.

       We conclude that the facts giving rise to BPL’s breach of contract cause of action against

Cody Texas were not inherently undiscoverable. Accordingly, the discovery rule did not apply to

defer the accrual of BPL’s breach of contract cause of action against Cody Texas with regard to

the Cody Texas/QSR transfer of interest.

       Thus, BPL’s breach of contract cause of action against Cody Texas with regard to the Cody

Texas/QSR transfer accrued in June 2000 when Choctaw sent the notice letter to BPL and

subsequently refused BPL’s request for information in compliance with the preferential right to

purchase provision in the JOA. BPL filed its breach of contract actions against Cody Texas on

November 28, 2005, outside of the four-year statute of limitations. Therefore, BPL’s breach of

contract cause of action against Cody Texas is barred by the four-year statute of limitations. For

this reason, Cody Texas presented prima facie proof of a meritorious ground of appeal on BPL’s

breach of contract cause of action with regard to the Cody Texas/QSR transfer.

       Because we conclude the summary judgment record and the undisputed facts reveal Cody

Texas held a meritorious ground of appeal, we sustain Cody Texas’s second issue on appeal with

regard to BPL’s breach of contract causes of action.

   2. Fraud Cause of Action and Fraudulent Concealment Exception to Statute of
      Limitations

       A fraud claim begins to accrue when a reasonably prudent person would suspect he has

been a victim of fraud and becomes aware of sufficient facts to provide cause to investigate. Little

v. Smith, 943 S.W.2d 414, 420 (1997). Fraudulent concealment is a fact-specific doctrine based

upon the principles of equitable estoppel and acts to toll the statute of limitations after the cause

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                                                                                                   04-16-00078-CV

of action accrues. 3 BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 67 (Tex. 2011); Borderlon v.

Peck, 661 S.W.2d 907, 908 (Tex. 1983). Fraudulent concealment estops a defendant to rely on the

statute of limitations as an affirmative defense when the defendant owes a duty to disclose but

fraudulently conceals the existence of a cause of action. Borderlon, 661 S.W.2d at 908; B. Mahler

Interests, 2016 WL 4922775, at *8. Thereby, the doctrine of fraudulent concealment acts to toll

the running of the limitations period until the fraud is discovered or could have been discovered

with reasonable diligence “‘because a person cannot be permitted to avoid liability for his actions

by deceitfully concealing wrongdoing until limitations has run.’” Shell Oil Co. v. Ross, 356 S.W.3d

924, 927 (Tex. 2011) (quoting S.V., 933 S.W.2d at 6); see also Marshall, 342 S.W.3d at 67

         The fraudulent concealment doctrine requires that BPL prove Choctaw, or Cody Texas,

“‘actually knew a wrong occurred, had a fixed purpose to conceal the wrong, and did conceal the

wrong.’” Shell Oil Co., 356 S.W.3d at 927 (quoting Shah v. Moss, 67 S.W.3d 836, 841 (Tex.

2001)). However, it is only concealment of the cause of action that serves to toll the statute of

limitations. See Marshall, 342 S.W.3d at 67; Baxter v. Gardere Wynne Sewell LLP, 182 S.W.3d

460, 464 (Tex. App.—Dallas 2006, pet. denied). If, as in this case, fraudulent concealment is

based on a fraudulent representation by the defendant, the plaintiff must demonstrate that reliance

on that representation was reasonable. Marshall, 342 S.W.3d at 68; B. Mahler Interests, 2016 WL

4922775, at *8. Reliance on a fraudulent representation “is not reasonable when information

revealing the truth could have been discovered within the limitations period.” Marshall, 342

S.W.3d at 68; B. Mahler Interests, 2016 WL 4922775, at *8.

3
  Often confused with the discovery rule, the two doctrines are distinct, and “each is characterized by different
substantive and procedural rules.” S.V., 933 S.W.2d at 4; Marshall, 342 S.W.3d at 62. While each serves to extend
the statute of limitations, the doctrine of fraudulent concealment concerns whether, and for how long, the statute of
limitations is tolled while the discovery rule determines when a cause of action accrues. Shell Oil Co. v. Ross, 356
S.W.3d 924, 928 (Tex. 2011).

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                                                                                            04-16-00078-CV

        A party asserting fraudulent concealment as an avoidance or exception to the statute of

limitations has the burden to raise it in response to the summary judgment motion and to come

forward with summary judgment evidence raising a fact issue on each element of the fraudulent

concealment defense. KPMG Peat Marwick, 988 S.W.2d at 749–50; Mellon Serv. Co. v. Touche

Ross & Co., 17 S.W.3d 432, 436 (Tex. App.—Houston [1st Dist.] 2000, no pet.). 4

        We already have determined based upon the undisputed facts that Choctaw informed BPL

of its intention to sell the JOA properties to Cody Texas. By receiving such notice, BPL became

aware of sufficient facts to know Choctaw intended to sell the JOA properties to Cody Texas.

When BPL requested the full information pertaining to the sale as required by the preferential

rights provision in the JOA, Choctaw refused, citing a confidentiality provision. By openly

refusing to provide the information requested by BPL, Choctaw could not have committed an

underlying tort of fraud nor could it have fraudulently concealed the existence of a cause of action

based upon its failure to provide information pertaining to the sale of the JOA properties. By its

nature, the doctrine of fraudulent concealment will not toll limitations unless the wrongdoer

fraudulently conceals the plaintiff’s cause of action. Otis v. Scientific Atlanta, 612 S.W.2d 665,

667 (Tex. App.—Dallas 1981,); see also Burns v. Thomas, 790 S.W.2d 1, 2 (Tex. App.—Amarillo

1988), rev’d on other grounds, 786 S.W.2d 266 (Tex. 1990). Therefore, concealment of any

information required to be provided by the JOA does not toll the statute of limitations when BPL

knew, or reasonably should know, it had a cause of action. Here, although BPL was unaware of

all potential defendants or potential damages, it was aware of its potential cause of action in June

4
  BPL contends on appeal that Cody Texas failed to contest and present controverting evidence on the lack of
fraudulent concealment in its motion for summary judgment, and thereby waived any argument pertaining to its
application. However, within the context of cross motions for summary judgment and because BPL asserted
fraudulent concealment to avoid the statute of limitations, BPL held the burden to come forward with summary
judgment evidence compelling its application.

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                                                                                    04-16-00078-CV

of 2000. Consequently, the doctrine of fraudulent concealment does not apply. See Baxter, 182

S.W.3d at 464; Otis, 612 S.W.2d at 667.

       In addition, any reliance on any misrepresentation could not have been reasonable because

BPL could have discovered information revealing the truth within the limitations period.

Marshall, 342 S.W.3d at 68; B. Mahler Interests, 2016 WL 4922775, at *8-*11. As in Marshall,

BPL was obliged to perform additional investigation to protect its interests upon receipt of

incomplete information and Choctaw’s refusal to provide the information required by the JOA. If

BPL could have discovered Choctaw’s wrongdoing by reviewing information available in the

public record, or through means other than Choctaw’s representations before limitations expired,

it did not exercise reasonable diligence in relying on Choctaw’s representations. Marshall, 342

S.W.3d at 67–68.

       In light of Choctaw’s notice to BPL concerning the impending sale, BPL’s knowledge that

Choctaw provided incomplete information and knowledge of Choctaw’s apparent refusal to

provide full information required by the preferential rights provision, BPL cannot prove or present

evidence raising a fact issue that Choctaw acted with a fixed purpose to conceal any wrong or that

it misrepresented the sale terms. Therefore, under these circumstances, the doctrine of fraudulent

concealment will not toll the running of the statute of limitations. See Marshall, 342 S.W.3d at

68; Baxter, 182 S.W.3d at 464; Burns, 790 S.W.2d at 2.

       Because BPL cannot establish fraudulent concealment as a matter of law, the fraudulent

concealment doctrine did not toll the running of the statute of limitations on BPL’s fraud cause of

action. See Marshall, 342 S.W.3d at 68; B. Mahler Interests, 2016 WL 4922775, at *11.

Accordingly, as previously determined with the breach of contract cause of action, any potential

fraud cause of action accrued in June 2000 when Choctaw sent the notice letter to BPL and

subsequently refused BPL’s request for information in compliance with the preferential right to
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purchase provision in the JOA. BPL filed its action against Cody Texas on November 28, 2005,

outside of the four-year statute of limitations. Therefore, BPL’s fraud cause of action against Cody

Texas is barred by the four-year statute of limitations. For this reason, Cody Texas presented

prima facie proof of a meritorious ground of appeal on BPL’s fraud cause of action.

       Having concluded that the doctrine of fraudulent concealment did not apply to toll the

running of the statute of limitations on BPL’s fraud claim, and BPL’s fraud cause of action against

Cody Texas is barred by the four-year statute of limitations, we sustain Cody Texas’s second issue

with regard to BPL’s fraud cause of action.

II.    Second Element: No Negligence of Its Own

       To obtain a bill of review, a plaintiff must establish that its failure to file a motion for new

trial or appeal was not due to any fault or negligence of its own. Petro-Chem., 514 S.W.2d at 246;

Saint v. Bledsoe, 416 S.W.3d 98, 102 (Tex. App.—Texarkana 2013, no pet.). To dispute this

required element in its motion for summary judgment and establish Cody Texas was not entitled

to a bill of review as a matter of law, BPL argued Cody Texas’s counsel, Brooke Farnsworth, was

negligent by calling the trial judge’s court coordinator rather than the district clerk to discover

whether the trial court had entered a final judgment.

       It is undisputed that on May 20, 2013, the parties received notice that the trial court entered

findings of fact and conclusions of law dated March 13, 2013. On that day, after receiving the

findings, Mr. Farnsworth’s staff member called the district clerk to inquire whether a judgment

had been entered and was told one had not. This information was true, as the trial court did not

sign the final judgment until May 31, 2000, and it was not entered until June 6, 2000. On August

2, 2013 and August 20, 2013, the same staff member called the trial judge’s court coordinator to

inquire whether the trial court had signed a final judgment. On each occasion, the staff member

was told no final judgment had been signed. Mr. Farnsworth relied upon this information.
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                                                                                         04-16-00078-CV

       BPL argued that Cody Texas’s failure to discover that the trial court’s final judgment was

signed on May 31, 2013 was caused in part by the negligence of Mr. Farnsworth. Although Mr.

Farnsworth’s staff member called the district clerk on May 20, 2013, BPL argued the staff member

should have called the district clerk, not the trial judge’s court coordinator on August 2, 2013 and

August 20, 2013 to inquire whether a final judgment had been signed or entered. Had the staff

member called the district clerk, not the trial judge’s court coordinator, BPL argues Cody Texas

would have discovered a final judgment had been signed and entered.

       To support this position that Cody Texas’s inability to file a timely appeal was due, in part,

to its own negligence, BPL presented summary judgment evidence which consisted of an affidavit

of an expert witness, Dan Pozza. In his affidavit, Mr. Pozza evaluated Mr. Farnsworth’s actions

and opined that:

       [i]f a lawyer undertakes to determine whether a final judgment has been entered in
       a particular case, a lawyer of ordinary prudence will know the distinction and will
       contact the district clerk, not the court coordinator. That is the standard of care. . . .
       To contact the court coordinator, rather than the district clerk, is a failure to use
       ordinary care, that is, it is a failure to do that which an attorney of ordinary prudence
       would do under these circumstances.

       Although BPL presented summary judgment evidence to support its position, its argument

fails under these facts as a matter of law. When a final judgment is signed, the district clerk of the

court shall immediately give such notice to the parties or their attorneys. TEX. R. CIV. P. 306a(3).

Generally, a trial court retains plenary power to grant a new trial or to vacate, modify, correct, or

reform the judgment for thirty days after its judgment is signed. TEX. R. CIV. P. 329b(d). If a

timely motion for new trial or motion to modify, correct, or reform the judgment is filed, the trial

court’s plenary power is extended until thirty days after all such timely-filed motions are overruled.

TEX. R. CIV. P. 329b(e),(g).

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                                                                                                      04-16-00078-CV

         Here, the trial court signed the final judgment on May 31, 2013. It is undisputed the district

clerk failed to provide timely notice of this final judgment as required by the Texas Rules of Civil

Procedure. Because Cody Texas was not aware the final judgment had been signed, it did not file,

and could not have filed, a post-judgment motion for new trial or motion to modify the final

judgment. 5 Therefore, the trial court’s plenary power to change, modify or reform its final

judgment expired thirty days later on June 30, 2013. See TEX. R. CIV. P. 329b (d),(e),(g).

         Even if, as Mr. Pozza opined, Mr. Farnsworth had violated the standard of care by calling

the court coordinator rather than the district clerk on August 2, 2013 and August 20, 2013, any

such negligence would have been inconsequential, as the trial court’s plenary power had expired

when the staff member made these inquiries. Even if Cody Texas had discovered on August 2,

2013 that the trial court signed the final judgment on May 31, 2013, Cody Texas still would not

have been able to file a timely post-judgment motion or notice of appeal. Thus, while Mr. Pozza

posits that Mr. Farnsworth was negligent on August 2nd and August 20th, Mr. Pozza does not

present an opinion, nor does BPL present other summary judgment evidence, on the issue whether

Mr. Farnsworth was negligent by failing to discover that the trial court signed the final judgment

prior to expiration of the trial court’s plenary power. In fact, Mr. Farnsworth’s staff member did

act in accordance with the ordinary prudence and the standard of care discussed by Mr. Pozza

5
  In a previous opinion, this court concluded the trial court had lost plenary power when it signed the October 9, 2013
judgment. Cody Texas, L.P. v. BPL Expl., LTD., 2014 WL 1722126, at *1. In drawing this conclusion, this court
allowed for the longest possible extension of the trial court’s plenary power by construing, without deciding, that Cody
Texas’s objections to BPL’s proposed judgment, filed on May 31, 2013, to be a motion to modify, correct, or reform
the May 31, 2013 judgment. Id. (stating, “If we construe Cody Texas’s Objections to Plaintiff’s Proposed Judgment
as a motion to modify, correct, or reform the May 31 judgment. . .”). Id. However, upon this present review, this
construction is not possible. Here, the parties do not dispute that Cody Texas learned of the trial court’s May 31 final
judgment at the very earliest on October 9, 2013. Based upon this undisputed fact, Cody Texas could not have filed
a motion that can be construed as a post-judgment motion for new trial or motion to modify the judgment until that
date, October 9, 2013. This liberal construction made in the previous opinion for the sake of determining potential
appellate jurisdiction was not a conclusive determination that Cody Texas did so file a timely post-judgment motion
or a conclusive determination of the date certain that the trial court’s plenary power expired. See id.

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                                                                                       04-16-00078-CV

when she called the district clerk on May 20, 2013 to inquire whether a final judgment had been

signed.

          Consequently, BPL failed to present summary judgment evidence to establish conclusively

or to even raise a fact issue whether Cody Texas’s failure to discover or receive notice that the trial

court signed the final judgment on May 31, 2013 was mixed with negligence of its own. Because

BPL failed to satisfy this summary judgment burden of proof, and the facts and circumstances in

this case establish conclusively that Cody Texas’s failure to receive notice of the trial court’s final

judgment was not due to any fault or negligence of its own, the trial court erred by so finding.

          Cody Texas’s first issue is sustained.

                                             CONCLUSION

          We conclude that the undisputed facts indicate that neither the discovery rule or the

fraudulent concealment doctrine deferred accrual of BPL’s breach of contract and fraud causes of

action. Accordingly, Cody Texas had a meritorious ground for appeal of expiration of the

applicable statute of limitations as a matter of law. We also conclude the undisputed facts establish

Cody Texas’s failure to receive notice of the trial court’s final judgment dated May 31, 2013 was

not mixed with any negligence of its own. It is undisputed that Cody Texas’s failure to file a

timely notice of appeal was caused by the official mistake of the trial court clerk’s failure to

provide notice of the final judgment dated May 31, 2013. Because the summary judgment record

establishes conclusively all three bill-of-review elements, the trial court erred by granting BPL’s

motion for summary judgment, erred by denying Cody Texas’s motion for summary judgment and

erred by denying Cody Texas’s bill of review. We therefore, reverse the trial court’s summary

judgment. We render judgment denying BPL’s motion for summary judgment and granting Cody

                                                   - 25 -
                                                                            04-16-00078-CV

Texas’s motion for summary judgment. In so doing, we render judgment granting Cody Texas’s

bill of review and remand for proceedings consistent with this opinion.

                                                 Jason Pulliam, Justice

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