Court Opinion

ID: 15354
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:44:16+00
Date Added: 2024-06-11T16:46:13.245115
License: Public Domain

Revised August 21, 1998

                   UNITED STATES COURT OF APPEALS
                        For the Fifth Circuit

                       ___________________________

                               No. 97-50439
                       ___________________________

  ROBERTO MARTINEZ TAPIA, individually and as a shareholder of
Tellas Limited; ROBERTO J. MARTINEZ ROCHA, individually and as a
 shareholder of Tellas Limited; ROSA DE LOURDES R. DE MARTINEZ,
   individually and as a shareholder of Tellas Limited; TELLAS
                             LIMITED

                                                 Plaintiffs-Appellants,

                                  VERSUS

THE CHASE MANHATTAN BANK, N.A.; CHASE BANK & TRUST COMPANY (C.I.)
 LIMITED; THE CHASE MANHATTAN PRIVATE BANK; THE CHASE MANHATTAN
 TRUST CORPORATION LIMITED; THE CHASE MANHATTAN UNIT TRUST; THE
                CHASE MANHATTAN REAL ESTATE FUND,

                                                   Defendants-Appellees.

       ___________________________________________________

             Appeal from the United States District Court
                   For the Western District of Texas
          ___________________________________________________
                            August 19, 1998

Before POLITZ, Chief Judge, and DAVIS and DUHÉ, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

     Plaintiffs, Roberto Martinez Tapia et al., appeal the district

court’s   grant   of   summary   judgment   to   Defendants,   The    Chase

Manhattan Bank, N.A. et al., dismissing Plaintiffs’ suit arising

out of their investment losses in a real estate unit fund.           We find

no error and affirm.

                                    I.
     Roberto Martinez Tapia is a successful Mexican businessman who

lives in Durango, Mexico. From 1986 to 1992, Martinez Tapia served

as the Secretary of Finance for the State of Durango, Mexico.

Martinez Tapia's net worth was nearly $1 billion dollars.             His

assets included hotels located in both Mexico and the United

States, hardware stores located in Mexico, various other real

estate holdings, and stock in several companies.

     In    the   early   1980s,   Martinez   Tapia   began   a   financial

relationship with Defendant Chase Manhattan Bank, N.A. (“Chase

Bank”). Martinez Tapia initially sought advice from Antonio Moreno

(“Moreno”), a Chase Bank Vice President in the Private Banking

International Division.       Over the next several years, Martinez

Tapia invested conservatively in items such as certificates of

deposit.   Eventually, Moreno persuaded Martinez Tapia to diversify

his investments to obtain higher returns.       In order to facilitate

these investments, Martinez Tapia agreed to obtain a private

investment company.      Moreno arranged for Martinez Tapia to take

over a dormant Chase-owned private investment company, Tellas

Limited (“Tellas”).      Tellas had been organized under the laws of

Jersey in the Channel Islands, and had previously been owned by

Chase Bank & Trust Company (C.I.) Limited (“Chase Jersey”), a Chase

Bank subsidiary.

     In February of 1986, Martinez Tapia and his family executed a

Company Management Services Agreement.         Under the terms of this

agreement, Chase Jersey provided nominal shareholders who held the

Tellas stock in trust for Martinez Tapia, his wife, and his son.

                                     2
Chase   Jersey      agreed    to   provide     management      and       administrative

services that Martinez Tapia might require, including maintenance

of corporate and financial records. More importantly, Chase Jersey

agreed to invest Tellas’s funds as directed by Martinez Tapia.

Martinez Tapia did not authorize Chase Jersey to invest Tellas

funds without his authorization.

      In   April     of   1987,     Martinez        Tapia    told    Moreno      he   was

disappointed in the return his investments had earned.                       Moreno and

Martinez Tapia agreed to meet in El Paso, Texas on April 13, 1987

to   discuss    other     investment      opportunities.            Manuel      Martinez

(“Martinez”), another Chase Bank employee, accompanied Moreno to

the El Paso meeting.          At this meeting, Moreno and Martinez told

Martinez Tapia that he could obtain a better return by diversifying

into more aggressive investments such as the Chase Manhattan Unit

Trust (“Unit Trust”), and, more specifically, the Chase Manhattan

Real Estate Fund (“Real Estate Fund” or “Fund”).

      During these discussions, Moreno and Martinez gave Martinez

Tapia general information about the Real Estate Fund.                        Moreno and

Martinez told Martinez Tapia that investment in the Fund was

subject    to   a   three-year      minimum        holding   period       and   required

Martinez Tapia to give one year’s advance notice to redeem the

investment.      Moreno and Martinez provided Martinez Tapia with a

sales brochure for the Real Estate Fund.                      This sales brochure

provided    that     "[t]he    offering       is    made    only    by    the   Offering

Circular, which can be obtained only from Chase offices . . . ."

Both parties concede that Martinez Tapia neither requested nor read

                                          3
either    the   Offering    Circular   or   the   Subscription   Agreement.

However, language in both documents is important to this appeal

because   the    district   court   concluded     that   knowledge   of   this

language should be imputed to Martinez Tapia.

     The Offering Circular limited each fundholder’s right to

redeem the units that the fundholder had purchased as follows:

     Units may not be redeemed at the option of the
     Unitholders for a period of three years from their date
     of issuance. Thereafter, Units may be redeemed without
     charge upon twelve months’ notice at the net asset value
     on the scheduled redemption date, which date shall be the
     first redemption date following the expiration of such
     notice period, unless postponed.     . . .   In order to
     safeguard the remaining Unitholders against the adverse
     effects of a hasty disposition of Fund assets, the Fund
     may postpone the scheduled redemption date for up to
     twelve months after the scheduled redemption date to
     complete the redemption of Units. . . . Management may
     suspend redemptions during any period when in its
     judgment conditions unduly interfere with the business or
     properties of the Fund or the equitable determination of
     net asset value.    There will be no redemption fee or
     charge.

Thus, the Offering Circular expressly granted the manager of the

Fund, Chase Manhattan Trust Corporation, Ltd. (“Chase Trust”), the

authority   to   suspend    redemptions     indefinitely.     The    Offering

Circular also discussed the restrictions on Unit redemption in a

section entitled “Risk Factors.”

     After several hours of discussion with Moreno and Martinez,

Martinez Tapia agreed to purchase $1.6 million dollars of Units in

the Real Estate Fund.          Martinez prepared a letter signed by

Martinez Tapia confirming his purchase of the Real Estate Fund

Units. The letter directed that all correspondence relating to the

investment be sent to Moreno and Martinez in New York.

                                       4
      After returning to New York, Moreno arranged the purchase of

the Units.    Following the instructions in Martinez Tapia’s letter,

Chase Jersey executed a subscription agreement for $1.6 million

dollars in Fund Units.         The officers of Chase Jersey who executed

the transaction read the Offering Circular and were aware of the

rights vested in the manager to suspend or postpone redemption

rights.      During the next several months, Moreno and Martinez

advised Martinez Tapia that his investments were performing well.

In   the   fall   of   1987,    Martinez   Tapia   agreed    to   purchase   an

additional $1 million dollars in Fund Units.                This purchase was

executed in the same manner as Martinez Tapia’s initial purchase.

      In January of 1988, Martinez left Chase Bank and went to work

with American Express International Bank (“American Express”) in

Miami, Florida.        Martinez Tapia moved his accounts to American

Express to continue dealing with Martinez.              In March of 1988,

American Express, on behalf of Martinez Tapia, began writing

letters to Chase Bank and Chase Jersey directing that Martinez

Tapia’s investments be liquidated.          In June of 1988, Chase Jersey

informed Martinez Tapia that all of Tellas’s investments had been

liquidated, except for his investment in the Real Estate Fund.               In

response to Chase Jersey’s letter, Martinez Tapia requested that

all correspondence relating to Tellas and the investment in the

Real Estate Fund be directed to American Express in Miami.

      In July of 1989, Martinez Tapia requested that Tellas’s Board

of Directors redeem the Units in the Real Estate Fund and that the

Board consider this request the one year advance notice required by

                                       5
the Offering Circular.       Racquel Brookins, Martinez’s assistant at

American Express, wrote to Chase Jersey seeking confirmation that

Martinez Tapia’s Units would be sold in 1990 and that the proceeds

would be transferred to American Express.              Chase Jersey confirmed

receipt of Martinez Tapia’s instructions and advised American

Express that the Tellas Units would be sold in October of 1990.

       On July 5, 1990, Martinez sent a letter signed by Martinez

Tapia to Chase Jersey inquiring about the status of the Real Estate

Fund and the requested redemption.            One day earlier, Chase Jersey

had written American Express a letter advising American Express

that   redemptions    of   Units   in   the    Real    Estate   Fund    had   been

suspended, and therefore, that it could not honor Martinez Tapia’s

request to redeem Tellas’s Units in the Real Estate Fund. Martinez

Tapia concedes that some time in 1990, American Express advised him

of Chase Jersey’s letter and that redemptions in the Fund had been

suspended.

       On July 23, 1990, Chase Trust issued letters to all investors

in the Real Estate Fund confirming that as of April 23, 1990, it

had suspended all redemptions of Units in the Real Estate Fund.

Chase Trust cited the declining American real estate market as the

reason    for   the     suspension.         Following    the    suspension     of

redemptions, Chase Trust formulated a proposal to reorganize the

Real   Estate   Fund.      Chase   Trust      sent    this   proposal   to    each

Unitholder along with proxy ballots.           Martinez Tapia voted against

the plan.

       In October of 1990, Chase Trust notified all Unitholders that

                                        6
the plan of reorganization had been approved.                 The plan provided

for no new subscriptions and a queue system to honor redemptions in

the order that they had been requested.                From December of 1990 to

March     of   1991,    American       Express         continued   to    exchange

communications with Chase Jersey concerning the Real Estate Fund.

Chase Jersey informed Martinez Tapia that it was awaiting his

“final decision” regarding his interests in the Real Estate Fund.

Chase Jersey did not receive any further communications regarding

Martinez Tapia’s “final decision” from either Martinez Tapia or

American Express.

      In January of 1992, Chase Trust advised the Unitholders that

the plan of reorganization was no longer feasible and that the Real

Estate Fund had been terminated as of January 14, 1992 as part of

a liquidation plan.         Under the liquidation plan, each Unitholder

would receive a distribution on a ratable basis, without regard to

any priority established under the previous plan of reorganization.

The Unitholders incurred significant losses.

      In June of 1993, Martinez Tapia, along with his wife and son,

filed suit in Texas state court against Chase Bank, Chase Jersey,

Chase Trust, The Chase Manhattan Private Bank, the Unit Trust, and

the Real Estate Fund. Plaintiffs sought recovery under theories of

breach    of   contract,     fraud    and         misrepresentation,    breach    of

fiduciary duty, breach of the duty of good faith and fair dealing,

and     violations     of    the     Racketeer        Influenced   and    Corrupt

Organizations Act (“RICO”).          The Defendants removed the action to

federal court     under     28   U.S.C.       §    1441(b).   Subsequently,      the

                                          7
district court dismissed the Unit Trust, the Real Estate Fund, and

Chase Manhattan Private Bank.         The remaining Defendants filed a

motion for summary judgment, which the district court granted,

finding that Plaintiffs’ claims were barred by the two- and four-

year statutes of limitations found in Tex. Civ. Prac. & Rem. Code

§§ 16.003(a) and 16.004(a). The district court also concluded that

none of the applicable limitations periods had been tolled by

Plaintiffs’    alleged   fiduciary        relationship   with    any    of   the

Defendants.    This appeal followed.

                                     II.

                                     A.

     We review de novo the grant or denial of summary judgment.

Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir.

1997).    The moving party bears the initial responsibility of

informing the district court of the basis for its motion and

identifying   those   portions   of       the   record   which   it    believes

demonstrate the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct 2548, 2553

(1986).     Summary judgment is proper if the evidence shows the

existence of no genuine issue of material fact and that the moving

party is entitled to a judgment as a matter of law.              Fed. R. Civ.

P. 56(c).     While we consider the evidence with all reasonable

inferences in the light most favorable to the nonmovant, Coleman,

113 F.3d at 533, the nonmoving party must come forward with

specific facts showing that there is a genuine issue for trial.

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.

                                      8
574, 587, 106 S. Ct. 1348, 1356 (1986).       If the record taken as a

whole could not lead a rational trier of fact to find for the

nonmoving party, there is no genuine issue for trial.            Szabo v.

Errisson, 68 F.3d 940, 942 (5th Cir. 1995).

                                   B.

     Plaintiffs’ arguments on appeal focus exclusively on the

district court’s conclusion that all of Plaintiffs’ claims are

time-barred.     Plaintiffs contend that (1) their claims for breach

of contract, fraud and misrepresentation, and RICO violations were

timely filed within four years of the date they first had knowledge

of any problems relating to the investment; (2) their claims for

breach of fiduciary duty and breach of the duty of good faith and

fair dealing were timely filed within two years of the time they

learned   that    Chase   Trust   possessed   the   right   to    suspend

redemptions; and (3) an alleged fiduciary and/or confidential

relationship between Martinez Tapia and certain of the Defendants

tolled the applicable statute of limitations.        We consider below

each of Plaintiffs’ arguments.

                                   1.

     Plaintiffs argue first that the district court erred in

concluding that the statute of limitations had run on the claims

for breach of contract, fraud and misrepresentation, and RICO

violations.    Specifically, Martinez Tapia argues that the statute

of limitations on these claims did not begin to run until 1990 at

the earliest, when he was notified that redemptions in the Real

Estate Fund had been suspended.     The district court concluded that

                                    9
Martinez Tapia should have known of Chase Trust’s right to suspend

redemptions when he purchased the Units in 1987, and, therefore,

the statute of limitations began to run on that date.   For reasons

to follow, we agree with the district court.

       Courts recognize that financial investment involves attendant

risks.     The investor who seeks to blame his investment loss on

fraud or misrepresentation must himself exercise due diligence to

learn the nature of his investment and the associated risks.1    As

several courts have recognized, the party claiming fraud and/or

misrepresentation must exercise due diligence to discover the

alleged fraud and cannot close his eyes and simply wait for facts

supporting such a claim to come to his attention.    This principle

applies in a variety of contexts, including the issue presented in

this case: when the applicable statutes of limitations begin to

run.

       In McGill v. Goff, 17 F.3d 729 (5th Cir. 1994), a panel of

this Court considered whether the plaintiffs’ claims for fraud and

breach of fiduciary duty were barred by the applicable statute of

limitations.     The plaintiffs invested in a real estate joint

venture.    The plaintiffs alleged, inter alia, that the defendant,

a co-manager of the joint venture, fraudulently solicited their

       1
        See, e.g., Carr v. Cigna Sec., Inc., 95 F.3d 544, 547 (7th
Cir. 1996) (“This principle is necessary to provide sellers of
goods and services, including investments, with a safe harbor
against groundless, or at least indeterminate, claims of fraud by
their customers.   . . .   Risky investments by definition often
fizzle, and an investor who loses money is a prime candidate for a
suit to recover it.”)

                                 10
participation in the joint venture by overstating the return they

would realize and misrepresenting how long the venture would hold

the property.     The district court dismissed plaintiffs’ suit as

time-barred because it was filed more than six years after the

initial investment.        On appeal, this Court affirmed, concluding

that   the   defendant’s    “summary    judgment   evidence   indisputably

establishe[d] that [the plaintiffs] were aware of the falsity of

[the defendant’s] alleged representations in the summer of 1985.”

Id. at 733.     Central to the court’s conclusion was the fact that

the plaintiffs had received and signed a copy of the joint venture

agreement, which contained terms “so contrary to [the plaintiffs’]

alleged understanding of the deal that upon review of the document,

[the plaintiffs] would have been put on notice of [the defendant’s]

alleged fraud.”    Id.

       The Seventh Circuit addressed a similar issue in Wolin v.

Smith Barney Inc., 83 F.3d 847 (7th Cir. 1996).                There, the

plaintiffs, trustees of a pension plan, brought suit against a

broker and his employer for advising the plaintiffs to make risky,

illiquid investments while assuring them that the investments were

liquid and safe.    The court of appeals found that the plaintiffs’

claims were barred and affirmed the district court’s dismissal of

the suit.    The court stated that

       the doctrine of equitable tolling requires that the
       plaintiff lack constructive as well as actual knowledge
       in order to be permitted to sue after the deadline in the
       statute of limitations has expired. The plaintiffs in
       this case, had they been diligent, would have discovered
       the fraud long before 1990--indeed, before the fraud was
       even committed.     For if diligent they would have

                                       11
     discovered it when they received, and before they signed,
     the subscription agreement for the shares in the two
     limited partnerships. A written statement available to
     the victims of fraud that reveals that a fraud has been
     committed furnishes constructive or inquiry notice of the
     fraud, and constructive notice creates a duty of diligent
     inquiry.   Eckstein v. Balcor Film Investors, 58 F.3d
     1162, 1168 (7th Cir. 1995).

Id. at 853.

     In Dodds v. Cigna Sec. Inc., 12 F.3d 346 (2d Cir. 1993), the

plaintiff,    a   forty-five   year     old      widow    with   a    tenth-grade

education, brought a securities action in which she alleged that

she was induced into investing in securities that were unsuitable.

The plaintiff alleged that contrary to the promises made to her by

the defendant and its agent, the securities were too risky and

illiquid. The plaintiff did not read the prospectus the defendants

furnished her. Plaintiff brought suit, alleging four violations of

the Securities Act and pendent state law claims for fraud, breach

of fiduciary duty, and negligent misrepresentation.                  The district

court dismissed the claims as time-barred.               On appeal, the Second

Circuit Court of Appeals concluded that warnings contained in the

prospectus    “were   sufficient   to      put    a   reasonable     investor   of

ordinary intelligence on notice of . . . the risk, and the

illiquidity of these investments.”               Id. at 351.     Therefore, the

plaintiff’s claims were time-barred.

     The Fourth Circuit considered an analogous case in Brumbaugh

v. Princeton Partners, 985 F.2d 157 (4th Cir. 1993). The defendant

marketed units in a limited partnership that owned and operated

commercial properties and also served as a tax shelter to offset

                                      12
the income of limited partners.            The defendant advertised the sale

of    the    units   through      a   document   entitled   “Private    Placement

Memorandum.”         The plaintiff purchased one unit in 1982.            Several

years later, in 1988, the Internal Revenue Service disallowed the

partnership’s tax deductions.             The plaintiff filed suit, alleging

common law fraud and violations of state and federal securities

laws.       The district court dismissed the complaint on statute of

limitations grounds.           The Fourth Circuit affirmed, noting that

“[i]nquiry notice is triggered by evidence of the possibility of

fraud, not by complete exposure of the alleged scam.”                  Id. at 162.

The    document      by   which    the   defendant   marketed   the    investment

“contained a host of prior warnings making it plain that [the

plaintiff] was purchasing, to put it mildly, a highly speculative

investment.” Id. The court therefore concluded that the plaintiff

should be charged with constructive knowledge of the contents of

the Private Placement Memorandum, which clearly disclosed the risk

that the Internal Revenue Service could disallow tax deductions.

Id.

       With this background, we now turn to the issues presented in

Martinez Tapia’s appeal. As the district court stated, the statute

of limitations on the claims of breach of contract, fraud and

misrepresentation, and RICO violations is four years.                   Tex. Civ.

Prac. & Rem. Code § 16.004(a).            In concluding that the limitations

period accrued when Martinez Tapia initially purchased the Units in

April of 1987, the district court imputed knowledge of the Offering

Circular to Martinez Tapia.              We agree with this conclusion and

                                          13
reject Martinez Tapia's argument that this was error.

      The     evidence    is   undisputed    that   Martinez       Tapia     is   a

sophisticated and successful businessman who spent several years

serving as Secretary of Finance in the State of Durango, Mexico.

It is also undisputed that Martinez Tapia invested over two and

one-half million dollars in the Real Estate Fund.                 We agree with

the district court that it was incumbent upon Martinez Tapia to do

more than simply rely on the bald assertions and promises of Moreno

and Martinez.       Before he invested over two and one-half million

dollars,    reasonable     diligence    required    him    to   read   the    only

documents that contained the details of the offer he accepted when

he purchased the Fund Units.          See, e.g., Carr v. Cigna Sec., Inc.,

95 F.3d 544, 547-48 (7th Cir. 1996); Myers v. Finkle, 950 F.2d 165,

167 (4th Cir. 1991).

      The summary judgment record makes it clear that the Defendants

did not “hide the ball” from Martinez Tapia.              Moreno and Martinez

supplied Martinez Tapia with a sales brochure outlining the Real

Estate Fund in general terms. The sales brochure acknowledged that

there were certain risks inherent in the Real Estate Fund due to

possible changes in the market.             Additionally, under a heading

entitled “What to Do Next,” the sales brochure directed the reader

to   obtain    a   copy   of   the   Offering   Circular    and    Subscription

Agreement from Chase Bank.           Rather than following this directive

and obtaining a copy of the Offering Circular, Tapia relied upon

the general assertions of Moreno and Martinez.                  As the district

court concluded, a reasonable investigation by Martinez Tapia prior

                                       14
to the purchase, consisting of reading the Offering Circular and

Subscription Agreement, would have alerted him to the right of the

Fund manager to suspend redemption, the right upon which this suit

is predicated.      Martinez Tapia is therefore charged with the

knowledge of the contents of these documents, including the Fund

manager’s right to suspend redemptions.

     It is also clear to us that Martinez Tapia should have been

aware of substantial risks associated with his investment in the

Real Estate Fund. A sophisticated investor knows that the price of

real estate can fluctuate and that the fund manager of a real

estate fund would likely reserve the right to limit or suspend

redemptions in the fund in a depressed market.          Martinez Tapia

should have known to look to the Offering Circular for the precise

contours of this likely limitation on his right to redeem his

Units.

     For the reasons stated above, we therefore agree with the

district court that the statute of limitations on the claims for

breach   of    contract,   fraud   and   misrepresentation,   and   RICO

violations began to run in 1987 when Martinez Tapia first purchased

Units in the Real Estate Fund.      A simple reading of the Offering

Circular and the Subscription Agreement at that time would have

alerted Martinez Tapia that the written terms of his investment

varied from the alleged assertions and promises of Moreno and

Martinez.     Therefore, the district court correctly concluded that

these claims were barred by the four-year statute of limitations.

                                   2.

                                   15
     Next, Martinez Tapia argues that the district court erred in

concluding that his claims for breach of fiduciary duty and breach

of the duty of good faith and fair dealing were time-barred.                    The

district      court    concluded    that    at   the   latest,   the   period   of

limitations on these claims began to run when Chase Trust informed

Martinez Tapia that redemptions in the Real Estate Fund were being

suspended in July of 1990--three years before Martinez Tapia filed

suit.       Assuming, without deciding, that a fiduciary relationship

existed among the parties, we agree with the district court.

     The district court concluded that these claims were governed

by a two-year statute of limitations.             Tex. Civ. Prac. & Rem. Code

§ 16.003(a).2         The summary judgment evidence is undisputed that

Chase Jersey advised Martinez Tapia by letter dated July 4, 1990

that redemption of Units had been suspended. Chase Jersey followed

Martinez Tapia's instructions and sent this letter to Martinez

Tapia’s representatives at American Express. Martinez Tapia argues

that the period of limitations did not begin to run until March of

1993, when he actually read the Offering Circular and discovered

that Chase Trust had the authority to suspend redemptions. We find

this argument unpersuasive.           As more fully discussed above, the

Offering Circular disclosed in plain terms the right of Chase Trust

to suspend redemptions.            The district court correctly concluded

        2
        Although there has been some debate over whether the two-
year or four-year statute of limitations applies to claims of
breach of fiduciary duty under Texas law, Kansa Reinsurance Co.,
Ltd. v. Congressional Mortgage Corp. of Texas, 20 F.3d 1362 (5th
Cir. 1994), holds that the two-year statute of limitations is the
correct limitations period for such claims. Id. at 1373-74.

                                           16
that a reasonable investor, when informed that redemption of his

investment had been suspended, would have immediately investigated

the propriety of this action.         If Martinez Tapia had undertaken

such an investigation, he would have easily discovered Chase

Trust’s right to suspend redemptions, along with any breach of

fiduciary   duty   or   breach   of    good   faith   and   fair   dealing.

Therefore, we agree with the district court that the claims of

breach of fiduciary duty and breach of good faith and fair dealing

are barred by the two-year statute of limitations.

                                      3.

     To avoid the Defendants’ arguments that his claims are time-

barred, Martinez Tapia argues throughout this appeal--as he did in

the district court--that an alleged fiduciary and/or confidential

relationship between himself, Chase Jersey, and Moreno and Martinez

lessened the degree of care he was required to exercise and tolled

the statute of limitations on his claims.             The district court

rejected the fiduciary relationship argument, noting that Martinez

Tapia had the “final word” on all investment decisions and that

none of the Defendants were to make investments without Martinez

Tapia’s authorization.      The district court concluded that any

fiduciary duty that any of the Defendants may have owed the

Plaintiffs was limited to ensuring that all investments were duly

authorized by Martinez Tapia, and that this limited duty did not

toll the statute of limitations.

     While the nature of the duty owed by a broker will vary

depending on the relationship between the broker and the investor,

                                      17
where the investor controls a nondiscretionary account and retains

the ability to make investment decisions, the scope of any duties

owed by the broker will generally be confined to executing the

investor’s order. Romano v. Merrill Lynch, Pierce, Fenner & Smith,

834 F.2d 523, 530 (5th Cir. 1987); see also Hill v. Bache Halsey

Stuart Shields Inc., 790 F.2d 817, 825 (10th Cir. 1986) (“fiduciary

duty in the context of a brokerage relationship is only an added

degree of responsibility to carry out pre-existing, agreed-upon

tasks properly”); Limbaugh v. Merrill Lynch, Pierce, Fenner &

Smith, Inc., 732 F.2d 859, 862 (11th Cir. 1984) (“duty owed by the

broker was simply to execute the order”).              Our review of the

summary   judgment    record   reveals   that   none    of   the   Defendants

possessed the authority to act without Martinez Tapia’s direction.

The Management Agreement between Martinez Tapia and Chase Jersey

provided that funds would only be invested on the advice of

Martinez Tapia.      Nothing in the summary judgment record suggests

that Martinez Tapia gave Moreno or Martinez any discretionary

investment authority. Martinez Tapia does not point to any summary

judgment evidence, other than his own subjective trust in Moreno

and Martinez, to create a genuine issue of material fact on this

point.    We therefore agree with the district court that any

fiduciary relationship between Martinez Tapia and the Defendants

was limited to making investments approved by Martinez Tapia.3            See

     3
        Martinez Tapia also argues that not only were Moreno and
Martinez agents of Chase Bank, they were also agents of Chase
Jersey and Martinez Tapia. He contends, therefore, that Moreno and
Martinez were acting in dual capacities and should be subjected to

                                    18
Hand v. Dean Witter Reynolds Inc., 889 S.W.2d 483, 492 n.5 (Tex.

App.--Houston [14th Dist.] 1994, writ denied).            This relationship,

therefore, did not serve to relieve Martinez Tapia from making a

reasonably diligent effort to inform himself about his purchase,

and did not toll the statute of limitations.         See Courseview, Inc.

v. Phillips Petroleum Co., 158 Tex. 397, 407, 312 S.W.2d 197, 205

(Tex. 1957) (“[A] failure to exercise reasonable diligence is not

excused by mere confidence in the honesty and integrity of the

other party.”).

     The district court also correctly rejected Martinez Tapia's

argument   that   his   confidential       relationship    with   Moreno   and

Martinez relieved him of the duty to protect his own interests.             As

the district court reasoned, any confidential relationship Martinez

Tapia may have had with Moreno and Martinez did not excuse Martinez

Tapia from investigating more thoroughly the terms of such a

substantial investment. As more fully discussed above, the summary

judgment   evidence     establishes    Martinez    Tapia’s    lack   of    due

diligence in protecting his investment.            As the district court

stated, Martinez Tapia “failed to take the most basic precautions

to learn of the terms governing an asset he was purchasing.”               The

summary judgment record is silent on any inquiry that Martinez

a heightened fiduciary standard. Under this standard, Martinez
Tapia argues that as “agents,” they had an obligation to inform
Chase Jersey and himself of all material facts pertaining to the
Real Estate Fund, and that failure to do so constituted a breach of
fiduciary duties.   Notwithstanding other potential obstacles to
this argument, as indicated above, the scope of any fiduciary
duties owed by Moreno and Martinez was limited to making
investments authorized by Martinez Tapia.

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Tapia directed to Moreno or Martinez regarding the possible risks

of his investment.    Relatedly, Martinez Tapia produced no summary

judgment   evidence   that   either    Moreno   or   Martinez   concealed

information relating to the risks of the investment.       We agree with

the district court that the summary judgment evidence indicates

that Martinez Tapia was “an investor who simply did not want to be

troubled with the details,” and that his focus was solely “goal-

oriented.” Martinez Tapia did not exercise reasonable diligence in

light of his relationships with the Defendants.          Thus, we agree

with the district court that any fiduciary and/or confidential

relationship between Martinez Tapia and the Defendants did not toll

the statute of limitations

                                 III.

     For the reasons stated above, we conclude that the district

court correctly determined that no genuine issues of material fact

existed with respect to when the statute of limitations began to

run on Martinez Tapia’s claims.         The district court correctly

concluded that the two- and four-year statutes of limitations

barred all of Martinez Tapia’s claims.          We therefore AFFIRM the

district court’s judgment in all respects.

     AFFIRMED.

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