Court Opinion

ID: 2955590
Source: CourtListenerOpinion
Date Created: 2015-09-17 00:40:45.601859+00
Date Added: 2024-06-11T11:37:00.922375
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03- 10 -00 126 -CV

Brian Edward Vodicka and Steven Benton Aubrey , Appellants

v.

Gregory H. Lahr a/k/a Greg Lahr, both Individually and d/b/a Capital Advantage;
Peter Barlin; Sandra Gunn; CFS Associates, Inc. d/b/a Creative Financial Solutions ,
Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT
NO. D-1-GN-08-004312 , HONORABLE LORA J. LIVINGSTON , JUDGE PRESIDING

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

 Brian Edward Vodicka and Steven Benton Aubrey appeal from a summary judgment entered in
favor of appellees Gregory H. Lahr a/k/a Greg Lahr, both individually and d/b/a Capital
Advantage; Peter Barlin; Sandra Gunn; CFS Associates, Inc. d/b/a Creative Financial Solutions
(the "brokerage appellees"). We will affirm.

BACKGROUND
 This suit arises out of financial losses Vodicka and Aubrey allegedly suffered as a result of their
investments in real-estate-backed loans that they contend were marketed to them as part of a
Ponzi scheme. In 2005, Vodicka contacted his acquaintance, Peter Barlin, and inquired about
where Vodicka and Aubrey, private investors, could invest some of their money. Barlin referred
Vodicka to Gregory Lahr, who lived in a garage apartment on Barlin's property and worked as a
mortgage broker for CFS Associates, Inc. d/b/a Creative Financial Solutions ("CFS"). According
to Vodicka and Aubrey, Barlin "was very laudatory of Lahr and his program," but failed to
disclose that Barlin would receive money from Lahr if Vodicka and Aubrey invested with CFS
and that Lahr had a "shady past" in the private mortgage business. On Barlin's recommendation,
Vodicka and Aubrey met with Barlin and Lahr. Lahr told them that, through CFS, they could
invest in "hard money" loans, which are short-term, high-interest-rate loans to real-estate
investors for which the real estate itself is offered as collateral (i.e., short-term private
mortgages). Lahr also told them that they would be represented by attorney Michael Savrick, who
prepared some of the documents relating to the investments and who may have simultaneously
represented both CFS and some of its investors.
 Over the next two years, Vodicka and Aubrey invested their money in multiple loans with CFS,
three of which are at issue here: (1) a $120,000 investment purportedly secured by a second lien
position against an apartment complex in Temple, Texas; (2) a $915,000 investment secured by
junior liens against two tracts of land in Manor, Texas; and (3) a $140,000 investment secured by
a junior lien against rental property in Long Beach, California. (1) In 2007, the borrower of the
$120,000 for the apartments in Temple defaulted on that loan. A few months later, Barlin
allegedly left Vodicka a voicemail stating that Lahr was "not necessarily in many ways the person
that I would do business with" because "I've decided to run my business life in a different way,
which is in a more simple, sort of more straightforward, honest pattern." Vodicka and Aubrey
assert that, after investing with CFS, they learned that the properties that served as collateral for
some of the three loans were worth only a fraction of the value reflected in Lahr's appraisals.
They further learned that the borrower of the $915,000 for land in Manor, instead of purchasing
the tracts of land he had specified, had used some of the loan proceeds to purchase a wholly
different tract of land, in which Vodicka and Aubrey had no security interest.
 Ultimately, after allegedly losing at least $1,040,961.00 in these three investments, Vodicka and
Aubrey sued Barlin, CFS, and CFS's alleged principals or agents, Lahr and Gunn, for gross
negligence, breach of fiduciary duty, common-law fraud, civil conspiracy, and violations of the
Texas Securities Act. See Tex. Rev. Civ. Stat. arts. 581-33(A)(1)-(2) & (F), -33-1(A) (West
2010). (2) The brokerage appellees moved for partial no-evidence and traditional summary
judgment on Vodicka and Aubrey's "negligence-based causes of action," i.e., the
gross-negligence claim, asserting that the brokerage appellees owed no duty to Vodicka and
Aubrey and that no duty should be imposed in light of the "Texas and federal regimes" already in
place to regulate securities. The district court granted the motion.
 Vodicka and Aubrey also sued Savrick and his law firm (the attorney defendants) for the same
causes of action as the brokerage defendants, and also added, in two separate allegations, that the
attorney defendants had committed both "legal malpractice in their representation of
[appellants]" and "professional negligence in their representation of [appellants]." The attorney
defendants moved for partial summary judgment, contending that the claims for fraud, breach of
fiduciary duty, violations of the securities act, and civil conspiracy should be dismissed because
the "real claim" against the attorney defendants was for legal malpractice, and allowing these
other claims would result in impermissible fracturing of claims. See Beck v. Law Offices of
Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 426-27 (Tex. App.--Austin 2009, no pet.). The
attorney defendants also filed a plea to the jurisdiction against Aubrey, asserting that he had no
attorney-client relationship with Savrick or Savrick's firm. The district court granted both of the
attorney defendants' motions.
 In January 2010, roughly one month before the case was set for trial, Vodicka and Aubrey
nonsuited their remaining claims (the claims against the brokerage appellees for breach of
fiduciary duty, common-law fraud, civil conspiracy, and violations of the Texas Securities Act).
(3)The district court therefore signed a final judgment reflecting that the negligence claims against
the brokerage appellees and the non-negligence claims against the attorney defendants that had
been the subject of the court's orders on partial summary judgments were dismissed with
prejudice, while all other claims were dismissed without prejudice based on Vodicka and
Aubrey's nonsuits. (4)See Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (per
curiam) ("A nonsuit sought after [a partial summary judgment] results in a dismissal with
prejudice as to the issues pronounced in favor of the defendant."). Vodicka and Aubrey appealed,
asserting that the district court (1) erred in granting partial summary judgment in favor of the
attorney defendants, (2) erred in granting the attorney defendants' plea to the jurisdiction against
Aubrey "to the extent that the order granting the [plea to the jurisdiction] could have the effect of
extending to non-negligence claims against those defendants," and (3) "erred in summarily
disposing of Appellants' negligence claims against the [brokerage appellees] based on a no-duty
finding." After oral argument, Vodicka and Aubrey filed an unopposed motion to dismiss their
appeal as to the attorney defendants, explaining that they have settled their claims against Savrick
and his firm. We granted that motion to dismiss. See 2012 Tex. App. LEXIS 4029, at *1-2 (Tex.
App.--Austin May 17, 2012, order). Therefore, the sole remaining issue on appeal is whether the
district court erred in granting summary judgment in favor of the brokerage appellees on Vodicka
and Aubrey's negligence claims.

STANDARD OF REVIEW
 The brokerage appellees moved for summary judgment on both no-evidence and traditional
grounds under subsections (i) and (c) of rule 166a. When reviewing judgments that might have
been granted under either rule 166a(i) or 166a(c), we first review the district court's summary
judgment under the no-evidence standards of rule 166a(i). Ford Motor Co. v. Ridgway, 135
S.W.3d 598, 600 (Tex. 2004). A movant's no-evidence summary-judgment motion must assert
that the nonmovant has produced no evidence of one or more essential elements of its
claim.Duvall v. Texas Dep't of Human Servs., 82 S.W.3d 474, 477 (Tex. App.--Austin 2002, no
pet.);see Tex. R. Civ. P. 166a(i). Once the movant specifies the elements on which there is no
evidence, the burden shifts to the nonmovant to produce summary-judgment evidence raising a
genuine issue of material fact on the challenged elements. Trilogy Software, Inc. v. Callidus
Software, Inc., 143 S.W.3d 452, 459 (Tex. App.--Austin 2004, pet. denied) (citing Tex. R. Civ.
P. 166a(i)). To raise a genuine issue of material fact, the nonmovant must set forth more than a
scintilla of probative evidence as to the essential element of the nonmovant's claim on which the
nonmovant would have the burden of proof at trial. Merrell Dow Pharms., Inc. v. Havner, 953
S.W.2d 706, 711 (Tex. 1997). If the evidence supporting a finding rises to a level that would
enable reasonable, fair-minded persons to differ in their conclusions, then more than a scintilla of
evidence exists. Id.Less than a scintilla of evidence exists when the evidence is "so weak as to do
no more than create a mere surmise or suspicion" of fact, and the legal effect is that there is no
evidence. Jackson v. Fiesta Mart, 979 S.W.2d 68, 70 (Tex. App.--Austin 1998, no pet.) (quoting
Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). If the plaintiff fails to produce more
than a scintilla of evidence of the challenged fact, the motion must be granted, and there is no
need to analyze whether the defendant's proof satisfied the rule 166a(c) burden. Ridgway, 135
S.W.3d at 600.
 To prevail on a motion for traditional summary judgment, a party must show that there are no
genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ.
P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When reviewing a
summary judgment, we take as true all evidence favorable to the nonmovant, indulging every
reasonable inference and resolving any doubts in the nonmovant's favor. Valence Operating Co.,
164 S.W.3d at 661. A defendant who moves for summary judgment must disprove at least one
essential element of the plaintiff's causes of action. Duvall, 82 S.W.3d at 477.
 The district court did not state the basis on which it granted the brokerage appellees' summary
judgment. Therefore, we must affirm if any of the movants' theories has merit. Texas Workers'
Comp. Comm'n v. Patient Advocates, 136 S.W.3d 643, 648 (Tex. 2004). Because the propriety of
a summary judgment is a question of law, we review the trial court's decision de novo.Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

DISCUSSION
 Vodicka and Aubrey assert that the district court erred in granting summary judgment in favor of
the brokerage appellees for two reasons. First, they assert that the brokerage appellees'
no-evidence motion was "procedurally inadequate" because it "is wholly conclusory and
non-specific, and fails to adequately challenge a specific element of Vodicka and Aubrey's
negligence claims." Second, they assert that the brokerage appellees "cannot establish the
absence of a negligence duty under the traditional summary judgment standard."

Specificity of no-evidence motion for summary judgment
 Under rule 166a(i), a motion for no-evidence summary judgment "must state the elements [of a
claim] as to which there is no evidence." Tex. R. Civ. P. 166a(i). As the Texas Supreme Court
has explained, the "'motion must be specific in challenging the evidentiary support for an element
of a claim or defense; paragraph (i) does not authorize conclusory motions or general
no-evidence challenges to an opponent's case.'" Timpte Indus. v. Gish, 286 S.W.3d 306, 310
(Tex. 2009) (quoting Tex. R. Civ. P. 166a(i) Comment--1997). "The underlying purpose of this
requirement 'is to provide the opposing party with adequate information for opposing the motion,
and to define the issues for the purpose of summary judgment.'" Id. at 311 (quoting Westchester
Fire Ins. Co. v. Alvarez, 576 S.W.2d 771, 772 (Tex. 1978)). This purpose is analogous to that of
the "fair notice" pleading requirements of Rules 45(b) and 47(a). Id.; see Tex. R. Civ. P. 45(b)
(requiring party's pleadings to give "fair notice" to opponent); Tex. R. Civ. P. 47(a) (requiring
plaintiff's pleadings to give "fair notice of the claim involved").
 To attack a summary-judgment motion on specificity grounds, the nonmovant must specially
except. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993) ("An
exception is required should a non-movant wish to complain on appeal that the grounds relied on
by the movant were unclear or ambiguous."). The excepting party must obtain a ruling on the
special exception to preserve the issue for appeal. Id. at 343 n.7; see Tex. R. App. P. 33.1(a).
 In their response to the brokerage appellees' motion for summary judgment, Vodicka and Aubrey
included special exceptions challenging the specificity of the no-evidence motion. However, the
record contains no ruling on these special exceptions. Assuming that the trial court should be
considered to have denied the special exceptions when it granted summary judgment, we
conclude that the motion was sufficiently specific to satisfy rule 166a(i).
 The brokerage appellees' motion states, in a section entitled "NO NEGLIGENCE DUTY":

This motion for summary judgment is narrowly focused, and addresses only Plaintiff's claim for
relief against Movants under a negligence theory (in fact, Plaintiffs' negligence claims against
Movants are all labeled "gross negligence").The sole basis for this motion, in turn, is the fact
that under the circumstances of this case, no negligence duties were owed by Movants to
Plaintiffs. The existence of a duty is a question of law for the Court to decide from the facts
surrounding the circumstances in question. Movants contend that when this Court considers the
relevant factors, including the risk, foreseeability, and likelihood of injury weighed against the
social utility of Movants' conduct, no negligence duties arise here. Taking into account the
comprehensive Texas and federal regimes regulating securities sales, and the risks inherent in the
securities market, negligence liability is inapplicable to this situation. This motion is asserted
both as a traditional motion for summary judgment (which assumes for purposes hereof that the
facts and circumstances alleged in Plaintiffs' petition are true) and as a no evidence motion for
summary judgment, which asserts that Plaintiffs cannot establish facts which warrant the
extension of a negligence duty to Movants.

(Emphases added). As the brokerage appellees indicate, the negligence theory asserted by
Vodicka and Aubrey is one for "gross negligence," which "is the breach of duty involving an
extreme degree of risk, considering the probability and magnitude of the potential harm to others
(an objective element) when the actor has actual awareness of the risk involved but nevertheless
proceeds in conscious indifference to the rights, safety, or welfare of others (a subjective
element)." General Motors Corp. v. Sanchez, 997 S.W.2d 584, 595 (Tex. 1999). The assertion
that "no negligence duties were owed" by the brokerage appellees to Vodicka and Aubrey
unambiguously attacks the essential "duty" element of a claim for gross negligence. See City of
Waco v. Kirwan, 298 S.W.3d 618, 623 (Tex. 2009) ("As with negligence actions . . . a defendant
may be liable for gross negligence only to the extent that it owed the plaintiff a legal duty"); cf.
Timpte Indus., 286 S.W.3d at 311 (concluding that no-evidence motion for summary judgment
gave fair notice that it challenged elements of "unreasonable danger" and "producing cause"
where motion stated "Plaintiff has presented no evidence of a design defect which was a
producing cause of his personal injury" and "There is no evidence of the product being defective
or unreasonably dangerous, and there is no evidence the trailer was the proximate or producing
cause of the Plaintiff's injuries");In re Mohawk Rubber Co., 982 S.W.2d 494, 497-98 (Tex.
App.--Texarkana 1998, orig. proceeding) (holding that motion asserting no-evidence of
"causation" satisfied rule 166a(i) because "[c]ausation is a specific element of tort liability").
 Vodicka and Aubrey responded to the no-evidence portion of the motion only by specially
excepting and objecting, asking that the no-evidence motion be stricken as "utterly conclusory."
On appeal, Vodicka and Aubrey similarly challenge the no-evidence summary judgment only on
the ground that it failed to satisfy rule 166a(i)'s specificity requirement. Because we have
determined that the no-evidence motion satisfied rule 166a(i), we could overrule appellants' first
issue without further explanation, as they have not challenged the no-evidence motion's assertion
that there is no evidence of a duty owed by the brokerage defendants. See Patient Advocates, 136
S.W.3d at 648. However, because Vodicka and Aubrey asserted in response to the traditional
motion for summary judgment that the brokerage appellees owed them duties in negligence, we
will address these assertions on the assumption that the portions of Vodicka and Aubrey's
summary-judgment response and appellate brief that identify duties owed by the brokerage
defendants can be construed as responding to the no-evidence motion for summary judgment. See
Tex R. Civ. P. 45; Tex. R. App. P. 38.9.

Alleged negligence duties owed by brokerage appellees
 Vodicka and Aubrey respond to the brokerage appellees' traditional motion for summary
judgment (5) by contending that the evidence attached to their response "clearly establishes that
the Defendants provided various services to the Plaintiffs and owed the Plaintiffs numerous
duties." In their brief on appeal, they identify, again in response only to the traditional motion for
summary judgment, three duties that they contend the brokerage defendants owed them. Even
assuming that these contentions respond to the no-evidence motion, we nonetheless conclude that
the no-evidence summary judgment should be affirmed because Vodicka and Aubrey have
presented no evidence that the brokerage defendants owed them a duty in ordinary negligence.
 "Whether a duty exists is a question of law for the court to decide under the facts surrounding
the occurrence in question." Lefmark Mgmt. Co. v. Old, 946 S.W.2d 52, 59 (Tex. 1997). To
determine whether a defendant owes a plaintiff a duty, courts balance "several interrelated
factors, including the risk, foreseeability, and likelihood of injury weighed against the social
utility of the actor's conduct, the magnitude of the burden of guarding against the injury, and the
consequences of placing the burden on the defendant." Kirwan, 298 S.W.3d at 623-24 (internal
quotation marks omitted).
 On appeal, Vodicka and Aubrey assert that three duties in negligence are owed to them by
various brokerage appellees: (1) CFS, Lahr, and Gunn "owed a duty of reasonable care in their
provision of professional services to Vodicka and Aubrey," (2) all the brokerage appellees "had a
duty to refrain from negligent misrepresentations," and (3) "Barlin had a duty to exercise
reasonable care in recommending Lahr to Vodicka and Aubrey."
 As to the first alleged duty, Vodicka and Aubrey assert that there was an "implied" contract
between appellants and CFS and that CFS, Lahr, and Gunn were "required, apart from any
express contractual obligation, to exercise a reasonable degree of care and competence in the
performance of professional services." They then assert that because CFS, Lahr, and Gunn 

undertook an affirmative course of action for the benefit of Vodicka and Aubrey, they impliedly
promised to perform each of those services in a skilled and acceptable manner and, thus, had a
duty to exercise reasonable care that Vodicka and Aubrey would not be harmed in the course of
those services.

Vodicka and Aubrey cite Anton v. Merrill Lynch, 36 S.W.3d 251, 257-58 (Tex. App.--Austin
2001, pet. denied), and Hand v. Dean Witter Reynolds Inc., 889 S.W.2d 438, 491 (Tex.
App.--Houston [14th Dist.] 1994, writ denied), for the proposition that a claim for negligence in
the provision of professional services may be brought against securities brokers and agents. The
Anton opinion does not mention negligence; it discusses duties that federal district courts have
concluded are owed under theories of fiduciary duty and concludes that the plaintiff's alleged
breaches of fiduciary duty failed to survive summary judgment. 36 S.W.3d at 257-58. In Hand,
the plaintiff alleged that her stock broker's failure to purchase certain commodity option contracts
after she requested that he do so constituted breach of a duty such that the broker's action
constituted negligence. Hand, 889 S.W.2d at 490-91. The question before the court was whether
the broker had a "duty to purchase the options or take necessary steps to purchase the options,"
because that was the only act of negligence alleged by the appellant. Id. at 490 (internal quotation
marks omitted). The court concluded that no such duty existed. Id. at 495. Neither case directly
speaks to whether brokers may be liable for negligently performing professional services. More
importantly, neither of these cases supports appellants' proposition that CFS, Lahr, and Gunn had
a "duty to exercise reasonable care that Vodicka and Aubrey would not be harmed" in the course
of the brokerage appellees' performance of professional services. In fact, Vodicka and Aubrey
cite no case, nor have we identified one, that stands for the proposition that brokers owe a duty in
common-law negligence to avoid financial harm to their clients. Nonetheless, Vodicka and
Aubrey urge that the supreme court has recognized that "a duty to use reasonable care may arise
when a person undertakes to provide services to another."Torrington Co. v. Stutzman, 46 S.W.3d
829, 837 (Tex. 2001). Although the supreme court has acknowledged that such a duty "may
arise," they have done so in the context of claims for negligentundertaking, a theory under which
plaintiffs may recover for "physical harm" resulting from failure to exercise reasonable care in
rendering services to another. Id.; see Restatement (Second) of Torts § 323 (1965). As Vodicka
and Aubrey have alleged only economic damages, they cannot recover for a negligent
undertaking under Torrington Co. See 46 S.W.3d at 837.
 Vodicka and Aubrey further urge that CFS, Lahr, and Gunn owe a duty because "[a] party
contracting to supply services owes a common-law duty to perform the services with reasonable
care, skill, expedience, and faithfulness." Zidell v. Bird, 692 S.W.2d 550, 553 (Tex. App.--Austin
1985, no writ) (citing Montgomery Ward & Co. v. Scharrenbeck, 204 S.W.2d 508, 510 (1947)).
Vodicka and Aubrey's live petition did not assert any duty owed by the brokerage defendants, but
their response to the traditional motion for summary judgment essentially asserts that (1) the
brokerage appellees agreed to exercise due diligence in investing appellants' money, and (2) the
brokerage appellees failed to perform adequate due diligence, resulting in appellants' financial
losses. Taking as true appellants' assertions that CFS, Lahr, and Gunn agreed to perform due
diligence regarding appellants' investments, CFS, Lahr and Gunn could be held liable in
negligence only if any alleged breach of their duty to perform due diligence "would give rise to
liability independent of the fact that a contract exists between the parties." Southwestern Bell Tel.
Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991); id. at 495 ("When the injury is only the
economic loss to the subject of a contract itself the action sounds in contract alone.").
Conversely, where failure to perform due diligence gives rise to liability because the failure to
perform violates an agreement between the parties, then the plaintiffs' action sounds in contract
alone unless the breach has resulted in physical harm to persons and tangible things. Id. at 494-95
& n.2. Because Vodicka and Aubrey identify no due-diligence duty that CFS, Lahr, and Gunn
would have owed to them in the absence of the alleged "implied contract," and because the sole
harm was economic loss resulting from the investments that were the subject of that contract,
appellants cannot recover in negligence for a breach of this duty. (6)
 Similarly, the second duty alleged by Vodicka and Aubrey--that all of the brokerage defendants
owed them a "duty to refrain from negligent misrepresentations"--does not fall within the
parameters of an ordinary negligence claim; instead, this alleged duty impermissibly recasts a
possible negligent misrepresentation claim under a different appellation. Vodicka and Aubrey
state on appeal that they "pled the elements of negligent misrepresentation," and that their alleged
facts, taken as true, establish that those elements were met. See Restatement (Second) of Torts §
552 (1977) (defining negligent misrepresentation). (7) They then conclude that they therefore
established the existence of a "negligence duty."
 The brokerage appellees respond that Vodicka and Aubrey did not, in fact, assert a claim for
negligent misrepresentation against any defendant in the district court, (8) and have consequently
waived this argument. We agree. We acknowledge that the first 48 pages of the petition allege
numerous facts, some of which might support elements of a claim for negligent
misrepresentation. But nowhere in the facts or in the following eleven pages in which appellants
list seven causes of action, their damages, and their prayer for relief, do they assert a claim for
negligent misrepresentation "in plain and concise language" or in a manner that would give "fair
notice of the claim involved." See Tex. R. Civ. P. 45, 47. Nor does Vodicka and Aubrey's
response to the brokerage appellees' motion for summary judgment articulate that appellants had
intended to plead negligent misrepresentation. Instead, that response summarizes evidence that is
attached to the motion and concludes that the evidence established "numerous duties," then
appears to assert only that the brokerage appellees breached a duty to perform "due diligence" to
prevent injury to appellants and that Barlin breached a duty by referring the appellants to Lahr.
As far as we can discern from the record, the first mention of "negligent
misrepresentation"--either as a separate cause of action or as an alleged duty owed in ordinary
negligence--occurred on appeal. We therefore decline to address appellants' theory that claims for
negligent misrepresentation constitute a negligence duty.See 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.").
 Finally, Vodicka and Aubrey allege that Barlin had a duty to use reasonable care in
recommending Lahr because Barlin "knew or should have known" that Lahr was likely to
commit intentional misconduct. In asserting the existence of this duty, Vodicka and Aubrey do
not address the balancing test espoused by the supreme court. See Kirwan, 298 S.W.3d at 623-24
. Instead, they rely on the general argument that the facts of this case "clearly indicate that the
Brokerage Defendants had some duty to prevent the harm that befell Vodicka and Aubrey,
whether under the state and federal securities regimes as the motion alludes, or under the
common law governing fraud, fiduciary duty, or reasonable care." Vodicka and Aubrey premise
all of their arguments regarding alleged duties on the assertion that the brokerage appellees were
"deliberately fraudulent and/or disloyal" or "at least" negligent, but appellants do not explain why
the duties they have alleged should be recognized as duties in negligence with reference to the
factors that we consider. Barlin responds that he owed no duty to Vodicka and Aubrey in
negligence and that no duty should be imposed because the investments at issue in this case are
securities that are regulated by "a pervasive statutory scheme." See Tex. Rev. Civ. Stat. art. 581-1
et seq. (West 2010 & Supp. 2011); Frank v. Bear, Stearns & Co.,11 S.W.3d 380, 386 (Tex.
App.--Houston [14th Dist.] 2000, pet. denied) (declining to create negligence cause of action
where plaintiffs sued for violations of the Texas Securities Act because (1) "there is a
comprehensive regime regulating the issuance and sale of securities, which argues against the
need to extend tort liability to these situations"; (2) "the application of tort liability is ill-suited to
an arena where downside risk is a feature inherent in the concept of the securities market"; and
(3) "adopting this suggested 'strict liability' approach would be destructive to this area of
commerce"); see also Timberwalk Apartments, Partners, Inc. v. Cain, 972 S.W.2d 749, 756
(Tex. 1998) (stating that absent special relationship, there is generally no duty to protect
individual from criminal acts by third party); San Benito Bank & Trust Co. v. Landair Travels, 31
S.W.3d 312, 318-19 (Tex. App.--Corpus Christi 2000, no pet.) (discussing "general rule of no
duty" and exceptions).
 Vodicka and Aubrey cite Golden Spread Council, Inc. v. Akins to support their assertion that
Barlin's alleged "duty to exercise reasonable care in recommending Lahr to Vodicka and Aubrey"
already exists. 926 S.W.2d 287, 290-91 (Tex. 1996). Rather than adopting a general rule that
there exists a "duty to use reasonable care before recommending a person" who is particularly
likely to commit intentional misconduct, the supreme court in Akins weighed "the risk,
foreseeability, and likelihood of injury against the social utility of the actor's conduct, the
magnitude of the burden of guarding against the injury, and the consequences of placing the
burden on the defendant." Id. After balancing those factors, the supreme court recognized that a
defendant organization had a limited duty to use ordinary care in referring a person to a Boy
Scout troop that was seeking a new scout master when the referring organization was aware that
the person had allegedly molested boys in the past. Id. Notably, Akins involved potential contact
with particularly vulnerable individuals, and the determination that a duty existed was based, in
part, on "a strong policy to protect children from abuse." 926 S.W.2d at 291; cf. Read v. Scott
Fetzer Co., 990 S.W.2d 732 (Tex. 1998) (imposing duty on vacuum manufacturer to check
background of contractor it hired to demonstrate products in potential customers' private homes);
Porter v. Nemir, 900 S.W.2d 376 (Tex. App.--Austin 1995, no writ) (imposing duty where a
psychologically fragile victim was sexually assaulted by a drug counselor). Vodicka and Aubrey
do not explain why courts should create a duty in ordinary negligence to protect adults who are
not members of a vulnerable class from economic harm. (9) And, the sole evidence they presented
with their summary-judgment motion as to how or why Barlin "knew or should have known" that
Lahr was likely to commit intentional misconduct was their counsel's assertion in a deposition
that Barlin left Vodicka a voicemail stating that Lahr was "not necessarily in many ways the
person that I would do business with" because "I've decided to run my business life in a different
way, which is in a more simple, sort of more straightforward, honest pattern." (10) Barlin
responded to that assertion by stating "I think I'm saying that the hard money lending business is
a tough business. . . . when you lend people in the hard money business, it's assumed that things
are going to go bad, that you're going to have to take people's properties from them, that there's
going to be lawsuits." In the remainder of his response to counsel's assertion and in response to
follow-up questions, there was no testimony regarding his knowledge of any of Lahr's past acts.
Nor is there any mention of Barlin's knowledge of Lahr's past misconduct or any evidence that he
should have had such knowledge in the remaining summary-judgment evidence. Vodicka and
Aubrey's assertions regarding the meaning of Barlin's alleged comments in a voicemail do no
more than create a mere surmise or suspicion; these assertions do not constitute "more than a
scintilla of probative evidence," and, as such, they are no evidence.See Jackson, 979 S.W.2d at
70. Because Vodicka and Aubrey have presented no arguments in the district court or on appeal
as to how the risk, foreseeability, and likelihood of injury to them outweigh the social utility of
obtaining recommendations for brokers, the magnitude of the burden of guarding against the
injury, and the consequences of placing the burden on Barlin, we decline to create a new
common-law duty of reasonable care in recommending brokers to potential investors where there
is no evidence that the recommender knew or should have known of alleged past misconduct. See
J.P. Morgan Chase Bank v. Texas Contract Carpet, Inc., 302 S.W.3d 515, 535 (Tex.
App.--Austin 2009, no pet.) (stating that intermediate appellate courts should be reluctant to
recognize new common-law duty (citing Lubbock County v. Trammel's Lubbock Bail Bonds, 80
S.W.3d 580, 585 (Tex. 2002))). "The nonexistence of a duty ends the inquiry into whether
negligence liability may be imposed." Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998).
Accordingly, we overrule appellants' issue.

CONCLUSION
 Having overruled the sole remaining issue on appeal, we affirm the district court's summary
judgment.

 __________________________________________
 David Puryear, Justice
Before Justices Puryear, Pemberton and Goodwin
Affirmed
Filed: June 6, 2012
1. The three investments that are the subject of this appeal were all documented in Vodicka's
name, but it is undisputed that Vodicka and Aubrey funded these investments jointly and each
own an undivided one-half interest in them.
2. Vodicka and Aubrey had initially also sued Lisa Caufmann, Mark E. Schiffgens, and Creative
Lending Concepts, LLC f/k/a Creative Lending Financial Concepts, LLC, but they nonsuited
their claims against these parties.
3. See 2010 Tex. App. LEXIS 6672, at *1-4 (Tex. App.--Austin, Aug. 13, 2010, order) (denying
attorney defendants' motion to dismiss and discussing the effect of Vodicka and Aubrey's
nonsuit).
4. After nonsuiting their claims in the district court, Vodicka and Aubrey filed suit against Barlin,
Lahr, Gunn, Schiffgens, Savrick, and Savrick Schumann Johnson McGarr Kaminski & Shirey,
LLP, in the United States District Court for the Western District of Texas. See Case No.
A-10-CA-076-SS.
5. Like the brokerage appellees' hybrid motion for summary judgment, the appellants' response is
contained in one document, but the response is divided into discrete sections that respond
separately to the no-evidence and traditional portions of the motion. 
6. Appellants' brief goes on to assert that CFS and Lahr made various false representations to
appellants, such that they should be "held to the higher fiduciary standard," but, "at the very
least" owed Vodicka and Aubrey "a duty of ordinary care." The brief provides no authority for
the assertion that these false representations support a claim for ordinary negligence. We
determine that appellants are attempting to recast possible claims for fraud, breach of fiduciary
duty, or negligent misrepresentation as claims for (or duties arising in) ordinary negligence.
Because appellants did not argue at the district court that these claims precluded summary
judgment, they have waived these arguments. See Tex. R. Civ. P. 166a(c).
7. Section 552 states:

(1) One who, in the course of his business, profession or employment, or in any other transaction
in which he has a pecuniary interest, supplies false information for the guidance of others in their
business transactions, is subject to liability for pecuniary loss caused to them by their justifiable
reliance upon the information, if he fails to exercise reasonable care or competence in obtaining
or communicating the information.

(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss
suffered

 (a) by the person or one of a limited group of persons for whose benefit and guidance he intends
to supply the information or knows that the recipient intends to supply it; and

 (b) through reliance upon it in a transaction that he intends the information to influence or
knows that the recipient so intends or in a substantially similar transaction.

(3) The liability of one who is under a public duty to give the information extends to loss
suffered by any of the class of persons for whose benefit the duty is created, in any of the
transactions in which it is intended to protect them.
8. As noted above, Vodicka and Aubrey asserted an ordinary negligence claim against the
attorney defendants (but not the brokerage appellees), and they asserted a gross negligence claim
against all "Defendants."
9. The summary-judgment evidence reflects that Vodicka was or had been a CPA and attorney.
10. In their brief, Vodicka and Aubrey describe Lahr's past companies, which, they allege, were
also "Ponzi-esque," but they introduced no evidence showing that Barlin knew or should have
known about any of Lahr's former companies or business practices, nor do they even argue that
Barlin was aware of any particular past activities of Lahr. Instead, they argue that Barlin knew of
Lahr's "proclivities to swindle investors" and the "imminent risk that Lahr would ply his
investment scams on Vodicka and Aubrey," without identifying the basis for these assertions. In
the statement of facts contained in their brief, they assert that Barlin began to "warn" Vodicka
and Aubrey about Lahr in 2008, three years after introducing them to Lahr. They base this
statement on allegations in their second amended petition, which was filed after the summary
judgment was granted, but before Vodicka and Aubrey nonsuited their remaining claims. These
allegations do not constitute legally sufficient evidence to survive the brokerage appellees'
no-evidence motion for summary judgment. We note that these same allegations appear in
exhibit 37 to the live petition. However, exhibit 37 is a twelve-page document authored by
Vodicka and Aubrey in response to Barlin's interrogatories. As such, it cannot be used against
Barlin. See Tex. R. Civ. P. 197.3 ("Answers to interrogatories may be used only against the
responding party.").