Court Opinion

ID: 2989566
Source: CourtListenerOpinion
Date Created: 2015-09-23 02:47:19.669162+00
Date Added: 2024-06-11T15:02:12.683311
License: Public Domain

Affirmed and Majority and Dissenting Opinions filed June 12, 2012.

                                                    In The

                                 Fourteenth Court of Appeals
                                         ___________________

                                          NO. 14-10-01224-CV
                                         ___________________

                                    ANDREW HAUT, Appellant,

                                                      V.

GREEN CAFE MANAGEMENT, INC. AND ALABAMA GREEN, LLC, Appellees.

                             On Appeal from the 270th District Court
                                         Harris County
                               Trial Court Cause No. 2009-63168

                                  DISSENTING OPINION

       I respectfully dissent, in part,1 because the majority invokes a presumption of an
incomplete record against Haut when (1) there is nothing to suggest that the evidentiary
record is incomplete; (2) appellees have not urged this court, by their brief or in a motion,
to make such a presumption; and (3) because we have an incomplete clerk’s record, we do
not know what portions of the trial record were requested. In addition, I would hold that
Haut has no fiduciary duty as a matter of law.

       1
           I agree with majority’s opinion as to standing and the failure to file findings of fact.
1.      The evidentiary record appears complete.

        In Part II. B. of its opinion, the majority states, “As GCM and Alabama Green point
out, Haut filed only a partial reporter’s record in this court.” While this is true, GCM and
Alabama Green only note that the record did not include the charge conference. GMC and
Alabama Green go on to state that “when the appellant files a partial reporter’s record, the
appellate court must presume the partial record is the entire record for purposes of
reviewing the appellant’s designated issues.”                   GCM and Alabama Green never
complained that they did not receive a statement of points or issues under Texas Rule of
Appellate Procedure 34.6(c)(1).

        Our court has not required a statement of points under rule 34.6(c)(1) when the only
part of the record that is missing is non-evidentiary. See W & F Transp., Inc. v. Wilhelm,
208 S.W.3d 32, 40–41 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (omission of
closing argument). What is missing in this case—voir dire, opening statement, objections
to the charge, and closing arguments—are all part of the non-evidentiary record in the case.
Under our own precedent, we should not apply rule 34.6(c)(1).

        The majority strains to find the evidentiary record incomplete. The majority first
relies on the court reporter’s certification that she provided “a true and correct transcription
of all portions of evidence and other proceedings requested in writing by counsel for the
parties” 2 (emphasis added). Next the majority notes that the record ends when the
defense rested, and then proceeds to wonder whether there might have been rebuttal or
surrebuttal 3 evidence.       This is a complete guess bolstered by a computer generated
docket-sheet entry, which constitutes no evidence at all. See Rush v. Barrios, 56 S.W.3d
88, 95 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (an appellate court may not

        2
          The requests are not in the record. See TEX. R. APP. P. 34.5(a)(9) (unless the parties designate
the appellate record by agreement, the trial court clerk must include in the clerk’s record any request for a
reporter’s record).
        3
          The majority has to reach to surrebuttal evidence in order to find that there could be missing
evidence favorable to appellees.
                                                     2
consider docket entries since they are only made for the clerk’s convenience and are
usually unreliable). What we do have is a reporter’s record that starts with the judge
requesting that Haut call his first witness and ends with “the defense rests.” GCM and
Alabama Green never state that any evidence is missing. While it is true that we do not
have opening statements, objections to the charge, or closing arguments, we have a
complete evidentiary record. In the absence of a complaint by GCM and Alabama Green
as to the evidence, I would not presume that there is any missing evidence that supports the
trial court’s judgment.

       The cases on which the majority relies do not support its holding. In Bennett v.
Cochran, 96 S.W.3d 227, 229–30 (Tex. 2002) (per curiam), the Texas Supreme Court
reversed our own court for applying Rule 34.6(c)(1) when an appellant did not timely file
his statement of points or issues on appeal. The court noted that the appellee did not allege
that he was deprived of an opportunity to designate additional portions of the record or that
the delay prejudiced his preparation or presentation of the case. In the present case, the
appellees have made no complaint at all, let alone a showing of prejudice. And the court
reporter has certified that the record includes all evidence requested by the parties (which
presumably includes any request by GCM and Alabama Green).

       In Mason v. Our Lady Star of the Sea Catholic Church, 154 S.W.3d 816, 819 (Tex.
App.—Houston [14th Dist.] 2005, no pet.), the appellant only requested that the court
reporter transcribe objections to the charge and closing arguments. She did not request
any evidence at all. The court held that in order to evaluate appellant’s claims for charge
error and improper jury argument that it needed to review the evidentiary record. This is a
proper application of the presumption—without any evidence, it was impossible for the
court to review the issues before it.

2.     GMC and Alabama Green have not argued that any evidence is missing.

       GMC and Alabama Green have not argued that any evidence is missing. GCM and
Alabama Green never complained that they did not receive a statement of points or issues
                                             3
under Texas Rule of Appellate Procedure 34.6(c)(1), nor do they argue that we must
presume the missing material supports the trial court’s judgment. Instead they argued only
that Haut’s evidentiary argument on breach of fiduciary duty must be governed by the
charge as given, because Haut did not include objections to the court’s charge in the record.
We should not impose an unasked-for presumption in this case.

3.     The clerk’s record is incomplete.

       Unless the parties are proceeding on an agreed record, it is mandatory that the clerk
of the trial court include “any request for a reporter’s record, including any statement of
points or issues under Rule 34.6(c),” even if the appellant did not ask that it be included in
the record. See TEX. R. APP. P. 34.5(a)(9). If an omitted item is relevant, the appellate court
should direct the trial court clerk to supplement the record. See TEX. R. APP. P. 34.5(c)(1).
This is not an appeal on an agreed record. Nevertheless, the majority is treating the omitted
material as relevant under Rule 34.6(c), even though the court has not ordered the clerk’s
record supplemented as per Rule 34.5(c)(1). The omitted request for the reporter’s record
might contain a statement of issues, or the record might have been designated by both
parties (as the court reporter’s certificate seems to imply) so that we must presume that it
contains all relevant evidence. See TEX. R. APP. P. 34.6(c)(4). We simply cannot know,
because we have not directed the trial court clerk to file a supplement containing all
requests for all or part of the reporter’s record to be included in the record in this appeal.
See TEX. R. APP. P. 34.5(d) (“If the clerk’s record is defective or inaccurate, the appellate
clerk must inform the trial court clerk of the defect or inaccuracy and instruct the clerk to
make the correction.”) (emphasis added). We should not imply a presumption in the face of
an incomplete clerk’s record.

4.     Haut has no fiduciary duty as a matter of law.

       Haut contends that as a matter of law he does not owe either a formal or an informal
fiduciary duty to either company and there is no evidence to support the imposition of any
fiduciary duty. Haut points out that it is undisputed that he was not a director, officer, or
                                              4
manager of either GCM or Alabama Green. Nor was he an accountant or attorney for either
company. Haut contends he was merely a co-founder and minority-interest holder in both
companies and therefore owed no formal fiduciary duty to the companies. He also argues
that no informal fiduciary duty was created because there was no preexisting relationship
of trust and confidence between himself and the companies.

       Fiduciary duties arise either from certain formal relationships or from the existence
of an informal or confidential relationship between the parties. See Meyer v. Cathey, 167
S.W.3d 327, 330 (Tex. 2005); Ins. Co. of N. Am v. Morris, 981 S.W.2d 667, 674 (Tex.
1998). Fiduciary duties arise as a matter of law in certain formal relationships such as that
of attorney and client. Meyer, 167 S.W.3d at 330. In contrast, an informal fiduciary duty
may arise from a moral, social, domestic, or purely personal relationship of trust and
confidence. Id.; Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 287
(Tex. 1998). But courts “do not create such a relationship lightly.” Schlumberger Tech.
Corp. v Swanson, 959 S.W.2d 171, 177 (Tex. 1997).

       It is well settled that “not every relationship involving a high degree of trust and
confidence rises to the stature of a fiduciary relationship.” Meyer, 167 S.W.3d at 330. Mere
subjective trust does not, as a matter of law, transform arm’s-length dealing into a fiduciary
relationship. Schlumberger Tech. Corp., 959 S.W.2d at 177. Further, to impose an informal
fiduciary duty in a business transaction, the special relationship of trust and confidence
must exist before and apart from the agreement made the basis of the suit. Willis v.
Donnelly, 199 S.W.3d 262, 277 (Tex. 2006); Meyer, 167 S.W.3d at 331; Associated Indem.
Corp., 964 S.W.2d at 288.

       When the evidence is disputed, the existence of an informal confidential
relationship is a question of fact. Lee v. Hasson, 286 S.W.3d 1, 14 (Tex. App.—Houston
[14th Dist.] 2007, pet. denied). But when the underlying facts are undisputed,
determination of the existence, and breach, of fiduciary duties are questions of law,
exclusively within the province of the court. Meyer, 167 S.W.3d at 330.

                                              5
        (a)      Haut preserved this point of error.

        As an initial matter, GCM and Alabama Green suggest that Haut has waived his
issue because there is no evidence he objected to the jury charge on fiduciary duty and he
did not include the charge conference as part of the reporter’s record on appeal.

        Concerning the existence of a fiduciary duty, the jury was asked the following:

               Did a relationship of trust and confidence exist between Andrew Haut
        and either of the parties below?

               A relationship of trust and confidence existed if Alabama Green, LLC
        or Green Café Management, Inc. justifiably placed trust and confidence in
        Andrew Haut to act in their best interest. Alabama Green, LLC and Green
        Café Management, Inc.’s subjective trust and feelings alone do not justify
        transforming arm’s length dealings into a relationship of trust and
        confidence.

The jury answered affirmatively as to both GCM and Alabama Green.

        Significantly, the trial court did not instruct the jury that a preexisting relationship
of trust and confidence must exist before an informal fiduciary duty may arise. See Willis,
199 S.W.3d at 277; Meyer, 167 S.W.3d at 331.

        Generally, the sufficiency of the evidence must be measured by the jury charge
when there has been no objection to it. Romero v. KPH Consol., Inc., 166 S.W.3d 212, 221
(Tex. 2003); Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2005). GCM and Alabama Green
are correct that Haut did not include the charge conference in the appellate record. The
clerk’s record, however, contains a proposed instruction on fiduciary duty that includes an
instruction concerning the requirement of a pre-existing special relationship of trust and
confidence.4 The record reflects that the trial court rejected the proposed instruction. Even
rejecting that record, as the majority does because we do not know when the trial court
signed that rejection, Haut still preserved error.
        4
          The proposed instruction on fiduciary duty provides in relevant part: “To impose an informal
fiduciary duty in a business transaction, the special relationship of trust and confidence must exist prior to,
and apart from the agreement made the basis of the suit.”
                                                      6
       Haut moved for a judgment notwithstanding the verdict arguing that GCM and
Alabama Green had presented no evidence that Haut owed them either a formal or an
informal fiduciary duty. As part of this complaint, Haut cited authority for the proposition
that a preexisting relationship of trust and confidence is required when the claims arise
from a business transaction, and he argued that he “owed no informal fiduciary duty to
Defendants because there was no prior special relationship of trust and confidence.”

       Haut’s proposed instruction and motion for JNOV were sufficient to make the trial
court aware of his complaint that as a matter of law he owed no fiduciary duty to GCM and
Alabama Green. This court has previously held that a party may preserve a no-duty
challenge by one or more of the following methods: (1) a motion for directed verdict, (2) a
motion for judgment notwithstanding the verdict, (3) an objection to the submission of the
question to the jury, (4) a motion to disregard the jury’s answer to a vital fact question, or
(5) a motion for new trial. Battaglia v. Alexander, 93 S.W.3d 132, 140 (Tex.
App.—Houston [14th Dist.] 2002), rev’d on other grounds, 177 S.W.3d 893 (Tex. 2005);
see also Cecil v. Smith, 804 S.W.2d 509, 510–11 (Tex. 1991) (listing methods for
preserving “no evidence” challenge). Accordingly, I would hold that Haut has adequately
preserved his argument that there is no evidence to support the imposition of an informal
fiduciary duty on him.

       (b)    He has no duty as a matter of law.

       As noted above, Haut contends there was no evidence that he had any special
relationship of trust and confidence with GCM and Alabama Green before, and apart from,
the agreements made the basis of the suit. See Willis, 199 S.W.3d at 277; Meyer, 167
S.W.3d at 331. GCM and Alabama Green argue that Haut, a law student, represented that
he was competent and qualified to draft operative legal documents and give legal advice
for and on behalf of the companies. The companies point to evidence that Haut advised
them and drafted legal documents for them in exchange for compensation in the form of
equity—despite his lack of experience and despite the fact that he was not licensed to

                                              7
practice law at the time the companies were formed. They also point to evidence that GCM
was set up as a franchisor and Alabama Green was set up as a franchisee based on Haut’s
“unlicensed advice” even though the original three founders—Molzan, Marques, and
Guillerman—only wanted to set up a prototype store. Further, GCM and Alabama Green
contend that Haut took on the obligation to draft complicated legal documents on behalf of
the companies “and was entrusted to do so.” They point out that Haut testified he had a
history of working with Marques and he “indicated that the parties acted as a group of
friends.” Consequently, they argue, Haut’s role extended “well beyond” a simple
arm’s-length business transaction.

       To reinforce this contention on appeal, GCM and Alabama Green assert that Haut’s
alleged actions constitute the unauthorized practice of law. See TEX. GOV’T CODE § 81.101
(defining the “practice of law” and generally prohibiting persons not members of the state
bar from practicing law in Texas). They note that if Haut had been the companies’ attorney,
a formal fiduciary duty would have existed as a matter of law. See Meyer, 167 S.W.3d at
330. The companies appear to suggest, without citing any authority, that Haut’s alleged
unauthorized practice of law imposed an informal fiduciary duty on him.

       The jury, however, was not instructed that Haut engaged in the unauthorized
practice of law, and no evidence was presented showing that Haut’s allegedly wrongful
conduct had been determined to constitute the unauthorized practice of law in an earlier
civil or criminal proceeding. The subject was touched on only briefly during Marques’s
testimony, and he admitted that he was not qualified to opine on what constitutes the
unauthorized practice of law. In any event, the allegation does not dispense with the
requirement that the companies demonstrate Haut owed them a duty based on the existence
of a relationship prior to, and apart from, the agreements made the basis of the suit.

       Although there was testimony that Marques and Haut had been friends and business
acquaintances for several years and that Marques had shared other business plans with
Haut in the past, there was no evidence suggesting that a relationship of trust and
                                             8
confidence existed before Marques approached Haut about the green-restaurant concept.
And Haut did not even know Molzan and Guillerman before he became involved in the
business plan for the restaurant. Further, Marques and Molzan acknowledged that they
knew Haut was not a lawyer and he did not claim to be a lawyer at the time he participated
in the formation of the companies. Testimony regarding the subjective beliefs of Marques
and Molzan is not sufficient to impose a duty on Haut on these facts. See Meyer, 167
S.W.3d at 331 (refusing to impose fiduciary duty when parties to business project had been
friends and frequent dining partners for four years as well as participants in earlier
projects); Schlumberger, 959 S.W.2d at 177 (“Again, the fact that the parties to a
transaction trust one another will not, in and of itself, establish a finding of a confidential
relationship.”).

       I would hold that on this record there is no evidence Haut owed GCM and Alabama
Green an informal fiduciary duty based on a relationship of trust and confidence.

       Accordingly, I dissent.

                                           /s/       Tracy Christopher
                                                     Justice

Panel consists of Justices Frost, Brown, and Christopher (Brown, J., majority).

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