Martinez Tapia v. Chase Manhattan Bank, N.A. , 149 F.3d 404 ( 1998 )


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  •                          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.
    19
    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.
    20