Israel Garcia v. Richard Garza, in His Capacity as Independent for the Estate of Homer E. Dean, Jr. ( 2010 )

i i i i i i
OPINION
No. 04-09-00163-CV
Israel GARCIA, et al.,
Appellants
v.
Richard GARZA, as Independent Executor of the Estate of Homer Dean, Jr., Deceased;
Dean Partners, Ltd.; and B.J. Shepherd,
Appellees
From the 79th Judicial District Court, Brooks County, Texas
Trial Court No. 09-03-14999-CV
Honorable Richard C. Terrell, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Catherine Stone, Chief Justice
Karen Angelini, Justice
Marialyn Barnard, Justice
Delivered and Filed: February 3, 2010
AFFIRMED
In March 2008, Israel Garcia and other members of the Garcia family filed suit against
Homer E. Dean Jr.; Dean Partners, Ltd.;1 and B.J. Shepherd, (hereinafter “Dean and Shepherd”)
concerning mineral interests conveyed to Dean and Shepherd by members of the Garcia family as
attorneys’ fees in 1975. Dean and Shepherd moved for summary judgment on grounds of limitations,
1
… A partnership in which Homer E. Dean Jr. was a general partner.
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lack of privity, lack of standing, and laches. The trial court granted the summary judgment motion
and signed a take-nothing judgment against the Garcias. The Garcias appeal from this judgment. We
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The 1975 Partition Suit
In April 1975, attorneys Dean and Shepherd began representation of twelve members of the
Garcia family in a suit to partition land in Brooks County, Texas, known as Rancho Nuevo and
Rancho Salado. Even though they had no written fee agreement with the Garcias, Dean and Shepherd
filed the partition suit and reached a settlement agreement with the opposing parties in the case. The
settlement agreement partitioned the surface estate but did not partition the mineral estate. On
December 8, 1975, Dean and Shepherd presented the settlement agreement to the trial court. On
December 19, 1975, the trial court signed a final judgment in the partition suit.
On December 16, 1975, after the settlement agreement was presented to the trial court but
before the final judgment was signed, the Garcias went to Dean’s office, where they were asked to
sign various documents. One of these documents was a written fee agreement. All but two of the
Garcias, Oscar and Viola Garcia, signed the fee agreement, which stated, in relevant part,
It is hereby agreed by and between Homer E. Dean, Jr., and B.J. Shepherd, as
attorneys, and . . . [the] clients of said attorneys, that the following will be the total
amount of attorneys’ fees to be paid to said attorneys for their services in cause No.
2423 [sic] in the District Court of Brooks County, Texas, styled Jose A. Gonzales et
al. vs. Tomasa G. Figueroa et al.:
Total attorneys’ fees $5,000.00 to be paid in cash and clients furthermore agree to
execute to said attorneys a mineral deed deeding to said attorneys one-half (1/2) of
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the mineral interest acquired by each of said plaintiffs in a partition of the property
in the above entitled and numbered cause . . . .
(emphasis added).
All of the Garcias, including Oscar and Viola Garcia, then signed a mineral deed conveying
to Dean and Shepherd one-half of the mineral interests in the land in question. This mineral deed,
dated December 16, 1975, was recorded in the Brooks County deed records on December 23, 1975.
2. The Present Suit
More than thirty-two years later, in March 2008, members of the Garcia family filed suit
against Dean and Shepherd, seeking to recover the mineral interests conveyed to Dean and Shepherd
in 1975. The plaintiffs in the present suit included five members of the Garcia family who were
represented by Dean and Shepherd in the1975 partition suit—Tomasita Ramos, Maria Garcia, Gloria
Garcia, Oscar Garcia, and Viola Garcia. The plaintiffs in the present suit also included the heirs of
other Garcia family members who were represented by Dean and Shepherd in the 1975 partition suit,
but died by the time the present suit was filed.
Initially, the Garcias’ petition alleged six causes of action: (1) a quiet title action; (2) a
slander of title action; (3) a trespass to try title action; (4) an accounting action; (5) a constructive
trust action; and (6) a declaratory judgment action. Later, the petition was amended to add causes
of action for breach of fiduciary duty and fraud. The breach of fiduciary duty and fraud claims,
however, were brought only by the plaintiffs who had had an attorney-client relationship with Dean
and Shepherd and had signed the mineral deed in 1975.
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The Garcias’ claims were based on factual allegations that Dean and Shepherd:
-forced their clients to execute a mineral deed in Dean’s and Shepherd’s favor
without making full disclosure of their conflicts of interest;
-impaired the interests of their clients in the underlying litigation because the
mineral interests should have been partitioned along with the surface estate;
-preferred their own improper financial interest by keeping the mineral estate
undivided in the partition suit, and thus, did not fulfill their duties to their
clients and protect their mineral interests;
-misrepresented to their clients in December 1975 that the mineral deed was
necessary to complete the partition of the property;
-failed to inform the trial court of the grant of mineral interests to them;
-altered the partition deed after it was executed by their clients and then
misrepresented to their clients the reasons for doing so;
-failed to disclose the value of the mineral estate they wrongfully obtained
from their clients.
The Garcias’ petition alleged the discovery rule applied to defer the accrual of all of their
causes of action. Additionally, the petition alleged that the Garcias exercised reasonable diligence
but did not discover the breaches of fiduciary duty and other wrongs against them until November
2007.
Dean and Shepherd answered the suit, denying the allegations in the petition. Shortly after
the suit was filed, Dean died and the personal representative of his estate—Richard Garza—was
substituted in Dean’s place.
3. The Summary Judgment Proceedings
On October 8, 2008, Dean and Shepherd filed a motion for summary judgment arguing,
among other things, that all of the Garcias’ claims were barred by the four-year statute of limitations.
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Dean and Shepherd further argued the discovery rule did not operate to defer the statute of limitations
because the deed was recorded in the deed records and “[b]ecause the . . . [m]ineral [d]eed is a public
record and constitutes public notice to the Plaintiffs, the Plaintiffs’ claims, categorically, were not
‘inherently undiscoverable.’”
On October 31, 2008, the Garcias amended their petition to include claims for breach of
fiduciary duty and fraud.2 On the same day, the Garcias filed a response to the summary judgment
motion. In the response, the Garcias argued their trespass to try title and quiet title claims were not
subject to any statute of limitations because the mineral deed was void ab initio. The Garcias also
argued the statute of limitations did not bar their breach of fiduciary duty claim because the
discovery rule deferred the accrual of their causes of action. In support of this argument, the Garcias
argued that the family members who signed the fee agreement and deed in 1975 did so only because
the nature of these documents was misrepresented to them.
On November 20, 2008, Dean and Shepherd filed a supplemental motion for summary
judgment, arguing laches barred the Garcias’ claims for breach of fiduciary duty and fraud.
On November 25, 2008, Dean and Shepherd filed a reply to the Garcias’ response, arguing:
(1) summary judgment should be granted on the Garcias’ title actions, accounting action,
constructive trust action, and declaratory judgment action because limitations had expired; and (2)
the Garcias did not create a genuine issue of material fact with respect to their breach of fiduciary
duty and fraud claims because the Garcias had notice of Dean’s and Shepherd’s claims to the mineral
2
… The fraud allegations were against Dean only.
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interests in 1975 when the mineral deed was signed, as well as in 1980 when a mineral lease listing
Dean and Shepherd as co-owners was signed.
On December 1, 2008, the trial court held a hearing on the motion for summary judgment.
At the hearing, the Garcias complained they had not received a copy of Dean’s and Shepherd’s reply
brief and any accompanying proof and they had not received the required twenty-one days’ notice
of these documents and the supplemental summary judgment motion. The trial court then gave the
Garcias two weeks to file their response and deferred ruling on the summary judgment motions until
after the Garcias had filed their response.
On December 15, 2008, the Garcias filed a response, in which they “object[ed] to
Defendants’ Supplemental Motion for Summary Judgment and Reply Brief to the extent that they
refer to and/or attach evidence not submitted to the Court at least twenty-one days prior to the
December 1, 2008 hearing on Defendants’ Motion for Summary Judgment, as required by Rule
166a(c) of the Texas Rules of Civil Procedure.” Additionally, the Garcias complained that by
arguing the discovery rule applied but did not defer the accrual of the causes of action, Dean and
Shepherd impermissibly presented a new and independent ground for summary judgment in their
reply. Finally, the Garcias argued summary judgment could not be granted on the ground of laches
because (1) as to the legal claims of breach of fiduciary duty and fraud, laches did not apply, and (2)
as to the equitable claims of constructive trust and accounting, controverting evidence created a fact
issue as to whether the Garcias unreasonably delayed in asserting their rights, and therefore, laches
was not established.
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On December 18, 2008, the trial court signed an order granting summary judgment in favor
of Dean and Shepherd as to all claims. The order expressly grants Dean and Shepherd “leave from
the twenty[-]one day service requirement in TEX . R. CIV . P. 166a(c).” The order does not specify the
ground or grounds upon which summary judgment was granted.
ISSUES PRESENTED
In seven issues, the Garcias argue the summary judgment is insupportable on the grounds
asserted and must, therefore, be reversed and remanded for trial. First, the Garcias argue the
summary judgment was procedurally defective. Second, the Garcias argue Dean and Shepherd did
not discharge their burden to negate the discovery rule’s application as a matter of law with respect
to their breach of fiduciary duty and fraud claims. Third, the Garcias argue the summary judgment
evidence was conflicting as to when the Garcias knew or should have known of their legal injury
with respect to their breach of fiduciary duty and fraud claims. Fourth, the Garcias argue the defense
of laches was inapplicable to their breach of fiduciary duty and fraud claims. Fifth, the Garcias argue
the defense of limitations was inapplicable to their trespass to try title and suit to quiet title claims
because the perpetual mineral deed was void ab initio. Sixth, the Garcias argue the summary
judgment was insupportable on the ground of lack of privity because privity was not required for
their claims. Finally, the Garcias argue the summary judgment was insupportable on the ground of
lack of standing because the breach of fiduciary duty and fraud claims were brought only by former
clients and they have standing to bring suit.
In response to the issues presented on appeal, Dean and Shepherd make three categories of
arguments. First, Dean and Shepherd argue the summary judgment was properly granted on the
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ground of limitations as to the causes of action for (1) suit to quiet title, (2) slander of title, (3)
trespass to try title, (4) accounting, (5) constructive trust, and (6) declaratory judgment. In support
of this argument, Dean and Shepherd assert they established their limitations defense because the
mineral deed was not void ab initio, but merely voidable. Second, Dean and Shepherd argue the
summary judgment was properly granted on the ground of laches as to their breach of fiduciary duty
and fraud claims. In support of this argument, Dean and Shepherd assert the breach of fiduciary duty
and fraud claims, as presented in this case, are not purely legal claims. Finally, Dean and Shepherd
argue the summary judgment was properly granted on the grounds of limitations and laches, and
therefore, the standing and privity issues are unnecessary to the disposition of this appeal.
SUMMARY JUDGMENT STANDARDS
To prevail on a motion for summary judgment, the movants must establish that there is no
genuine issue as to any material fact and that they are entitled to judgment as a matter of law. TEX .
R. CIV . P. 166a(c); Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex.1995). A
defendant who conclusively negates at least one of the essential elements of a cause of action is
entitled to summary judgment as to that cause of action. Randall’s, 891 S.W.2d at 644; Wornick Co.
v. Casas, 856 S.W.2d 732, 733 (Tex.1993). Similarly, a defendant who conclusively establishes each
element of an affirmative defense is entitled to summary judgment. Randall’s, 891 S.W.2d at 644.
Summary judgment motions must stand or fall on their own merits. McConnell v. Southside
Indep. School Dist., 858 S.W.2d 337, 343 (Tex. 1993); City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671, 678 (Tex. 1979). However, once the movant establishes his right to summary
judgment as a matter of law, the burden then shifts to the non-movant to present issues which
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preclude summary judgment. Romo v. Texas Dept. of Transp., 48 S.W.3d 265, 269 (Tex. App.—San
Antonio 2001, no pet.) (citing Clear Creek, 589 S.W.2d at 678). The non-movant must expressly
present to the trial court by written answer or response any issues defeating the movant’s entitlement
to summary judgment. McConnell, 858 S.W.2d at 343; Clear Creek, 589 S.W.2d at 677 (“[B]oth the
reasons for the summary judgment and the objections to it must be in writing and before the trial
judge at the hearing.”).
In reviewing a summary judgment, the appellate court must accept as true evidence in favor
of the non-movant, indulging every reasonable inference and resolving all doubts in his or her favor.
El Chico Corp. v. Poole, 732 S.W.2d 306, 315 (Tex. 1987). When the order granting summary
judgment does not specify the particular grounds the trial court sustained, the appellate court must
uphold the summary judgment on any ground asserted by the movant that is supported by the
evidence and pleadings. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
“UNTIMELY ” REPLY AND SUMMARY JUDGMENT PROOF
In their first issue, the Garcias argue the summary judgment “on Appellants’ breach of
fiduciary duty and fraud claims simply cannot be sustained based on untimely, improperly-asserted
arguments about the discovery rule in the Appellees’ Reply Brief.” In particular, the Garcias argue
the summary judgment is procedurally defective because the trial judge allowed Dean and Shepherd
to raise a new summary judgment ground in their reply brief and to file summary judgment evidence
after the deadline under the procedural rules.
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1. Applicable Law
Texas Rule of Civil Procedure 166a, which governs summary judgments, does not set a
deadline for a movant to file a reply to a non-movant’s response. TEX . R. CIV . P. 166a; Cmty.
Initiatives, Inc. v. Chase Bank of Texas, 153 S.W.3d 270, 280 (Tex. App.—El Paso 2004, no pet.).
According to case law, the movant is entitled to file its reply until the date of the summary judgment
hearing. Chase Bank, 153 S.W.3d at 280. The movant, however, is not entitled to use its reply to
amend its motion for summary judgment or to raise new and independent summary judgment
grounds. Callaghan Ranch, Ltd. v. Killam, 53 S.W.3d 1, 4 (Tex. App.—San Antonio 2000, pet.
denied); Sanders v. Capitol Area Council, Boy Scouts of Am., 930 S.W.2d 905, 911 (Tex.
App.—Austin 1996, no writ).
Texas Rule of Civil Procedure 166a(c) permits the late filing of summary judgment proof
with leave of court. See TEX . R. CIV . P. 166a(c) (“Except on leave of court, with notice to opposing
counsel, the motion and any supporting affidavits shall be filed and served at least twenty-one days
before the time specified for hearing.”); Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex.
1996); Valores Corporativos, S.A. de C.V. v. McLane Co., Inc., 945 S.W.2d 160, 162 (Tex.
App.—San Antonio 1997, writ denied). The trial court has the discretion to control late filings in
summary judgment proceedings. Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 685
(Tex. 2002). It is appropriate for the trial court to grant leave for the late filing of summary judgment
proof when the summary judgment movant is attempting to counter arguments presented in the non-
movant’s response. See Lawler v. Dallas Statler-Hilton Joint Venture, 793 S.W.2d 27, 29-30 (Tex.
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App.—Dallas 1990, writ denied) (holding the trial court did not err in granting leave to file
supplemental affidavits less than twenty-one days before the summary judgment hearing).
2. Analysis
First, the Garcias contend the summary judgment was procedurally defective because Dean
and Shepherd raised a new and independent ground—the application of the discovery rule—in their
reply brief. In their summary judgment motion, Dean and Shepherd argued (1) the discovery rule did
not apply to defer the Garcias’ claims because their injury was not “inherently undiscoverable,” and
(2) the Garcias had constructive notice of any injury because the mineral deed was recorded in the
public deed records. In their response, the Garcias argued they could not have had constructive notice
of their injury based on the public deed records. In their reply, Dean and Shepherd then countered
that even if the discovery rule did apply, it did not defer the accrual of the Garcias’ claims because
the Garcias knew or should have known of the facts underlying their claims in 1975 or, at the latest,
in 1980. Given the progression of the arguments in this case, the discovery rule argument made in
Dean’s and Shepherd’s reply brief—that the Garcias knew or should have known of the facts
forming the basis of their injury in 1975 or 1980—was not a new and independent ground for
summary judgment. We conclude Dean and Shepherd did not impermissibly raise a new and
independent summary judgment ground in their reply brief.
Second, the Garcias contend the summary judgment proof attached to Dean’s and Shepherd’s
reply brief could not have been considered in support of the summary judgment because it was not
served at least twenty-one days before the hearing, and the trial court’s order granted leave only as
to the supplemental motion and not the proof attached to the reply brief. We disagree. The record
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shows the Garcias objected to the evidence attached to the supplemental summary judgment motion
and the reply brief based on non-compliance with the twenty-one day service requirement. In its
summary judgment order, the trial court granted Dean and Shepherd leave from the twenty-one day
service requirement. The order states, “IT IS, THEREFORE, ORDERED that Defendants are granted
leave from the twenty[-]one day service requirement in TEX . R. CIV . P. 166a(c) and are entitled to
proceed forward and argue the summary judgment grounds in Defendants’ Supplemental Motion for
Summary Judgment.” This order does not limit the granting of leave to the proof attached to the
supplemental summary judgment motion.
Additionally, the record shows the Garcias’ attorney agreed to the summary judgment
procedure employed by the trial court. At the summary judgment hearing, the following exchange
took place between the Garcias’ attorney, Mr. Sarles; the trial court; and Dean’s and Shepherd’s
attorney, Mr. Watson:
Mr. Sarles: First of all, Your Honor, . . . I think I have an objection, but I’m not
sure. Apparently, counsel’s referring to a reply brief that was filed
with the Court that has not been served on me. . . . If it was served
within the last week, it obviously wasn’t served 21 days before the
hearing.
The Court: Reply brief, Counsel?
Mr. Watson: Yes, Judge. I mentioned my reply. That was filed last Tuesday. Now,
there—I don’t believe there’s a rule on a reply to a response . . . in
fact, I’m certain there’s not.
Mr. Sarles: Well, I’m certain there is, Your Honor, and that is this: If they’ve
attached evidence to that reply, exhibits to that, those documents had
to be filed 21 days before today’s hearing. They can file a reply, they
can argue the law, they can show up with the law and argue the law,
obviously, but what—
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The Court: Well, you—
Mr. Sarles: —they can’t do is put it in evidence.
The Court: Well, the reply brief is simply briefing of the law.
Mr. Watson: That’s correct.
The Court: Is it anything more than that, counsel?
Mr. Watson: Well, contained in the reply is also directions to why we believe
they’re sham affidavits and we object to them. But . . . we can urge
an objection to something in the response through the reply.
The Court: Yeah. That wouldn’t be part of the summary judgment proof is what
you’re seeking [sic]; is that correct?
Mr. Sarles: That’s correct, Your Honor. My point was I heard from counsel that
there was an Exhibit E to the reply, and if there are exhibits attached
to the reply, we object to it. We’re entitled to 21 days’ notice on it.
On the Supplemental Motion the same thing, Your Honor. The laches
issue has been raised here at the eleventh hour. The Court moved this
hearing actually—
The Court: Well—well, let me tell you . . . my inclination is, because what
we’re doing here certainly is not evidentiary, it’s simply argument.
I’ve got to consider . . . the motions and the responses and . . . the
appropriate . . . summary . . . judgment proof attached to those. But
as far as the Supplemental Motion for Summary Judgment, I don’t
want to bring everybody back down here. How long will it take for
you to provide a response to that and I’ll just take it on submission?
Mr. Sarles: I would think, Your Honor, if we have a couple of weeks to respond
to it.
The Court: Fourteen days?
Mr. Sarles: That would be more than sufficient.
The Court: I won’t make any ruling on the . . . Supplemental Motion for Summary
Judgment, and I’ll allow you 14 days to file a response from today’s
date, December 15, to get that filed.
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Mr. Sarles: Fine.
The Court: On or before December 15th then.
Mr. Sarles: That’ll be fine, Your Honor.
(emphasis added).
Given that the Garcias acquiesced to the procedure employed by the trial court, they are in
no position to complain about it on appeal. “A party cannot encourage the court to take a particular
action and then complain on appeal that the trial court erred by taking it.” Doucet v. Owens-Corning
Fiberglas Corp., 966 S.W.2d 161, 165 (Tex. App.—Beaumont 1998, pet. denied); see also Everest
Exploration, Inc. v. URI, Inc., 131 S.W.3d 138, 142 n. 1 (Tex. App.—San Antonio 2004, no pet.)
(holding affidavits were part of summary judgment record and would not be disregarded on appeal
when the affidavits were filed pursuant to procedures set forth in an agreed order). And, as shown
above, the trial court not only allowed Dean and Shepherd to file their supplemental summary
judgment motion, reply brief, and accompanying proof, it also gave the Garcias an opportunity to
respond to these documents.
We conclude the summary judgment is not procedurally defective and overrule the Garcias’
first issue.
BREACH OF FIDUCIARY DUTY AND FRAUD CLAIMS
1. Limitations
a. Applicable Law
In their motion for summary judgment, Dean and Shepherd argued the Garcias’ claims were
barred by the four-year statute of limitations. See TEX . CIV . PRAC. & REM . CODE ANN . § 16.051
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(Vernon 2008). “[T]he primary purpose of . . . all limitation statutes[] is to compel the exercise of
a right of action within a reasonable time so that the opposing party has a fair opportunity to defend
while witnesses are available.” Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex.1990); see
Sanchez v. Archdiocese of San Antonio, 873 S.W.2d 87, 90 (Tex. App.—San Antonio 1994, writ
denied). “It is in society’s best interest to grant repose by requiring that disputes be settled or barred
within a reasonable time.” Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001).
The discovery rule is a very limited exception to statutes of limitation and applies only in
those cases in which the nature of the injury is both inherently undiscoverable and objectively
verifiable. Id. The discovery rule exception operates to defer the accrual of a cause of action until
the plaintiff knows, or in the exercise of reasonable diligence, should know of the facts giving rise
to the claim. Id. Generally, the discovery rule applies to breach of fiduciary duty claims. See S.V. v.
R.V., 933 S.W.2d 1, 8 (Tex. 1996). However, even in the context of a fiduciary relationship, the
plaintiff must still exercise reasonable diligence in discovering the nature of the injury. See id.
(“While a person to whom a fiduciary duty is owed is relieved of the responsibility of diligent
inquiry into the fiduciary’s conduct, so long as that relationship exists, when the fact of misconduct
becomes apparent it can no longer be ignored, regardless of the nature of the relationship.”).
A defendant moving for summary judgment on the affirmative defense of limitations has the
burden to conclusively establish that defense. KPMG Peat Marwick v. Harrison County Hous. Fin.
Corp., 988 S.W.2d 746, 748 (Tex.1999). When the plaintiff pleads the discovery rule as an exception
to limitations, the defendant must negate that exception as well. Rhone-Poulenc, Inc. v. Steel, 997
S.W.2d 217, 223 (Tex.1999). The defendant must (1) conclusively prove when the cause of action
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accrued, and (2) prove as a matter of law that there is no genuine issue of material fact about when
the plaintiff discovered or, in the exercise of reasonable diligence, should have discovered the nature
of its injury. KPMG Peat Marwick, 988 S.W.2d at 748. If the defendant establishes that the statute
of limitations bars the action, the plaintiff must then produce summary judgment proof raising a fact
issue in avoidance of the statute of limitations. Id.
b. Issues Presented
In their second issue, the Garcias argue the summary judgment was improper as to the breach
of fiduciary duty and fraud claims because Dean and Shepherd did not discharge their burden to
negate the discovery rule as a matter of law. In their third issue, the Garcias argue the trial court’s
grant of summary judgment was improper because there was conflicting evidence on the issue of the
Garcias’ “knowledge” of the fraud and breach of fiduciary duty. Thus, the Garcias contend Dean and
Shepherd failed to prove as a matter of law that there was no genuine issue of material fact about
when the Garcias discovered or, in the exercise of reasonable diligence, should have discovered the
nature of their injury. In response, Dean and Shepherd argue if the summary judgment was proper
on the ground of laches, this court need not address whether Dean and Shepherd met their burden
to negate the discovery rule as to the breach of fiduciary duty and fraud claims. We agree, and
therefore, turn to the issue of whether summary judgment was proper on the ground of laches.
2. Laches
a. Applicable Law
Generally, in order to establish a laches defense, the defendants must show (1) the plaintiffs
unreasonably delayed in asserting their claim, and (2) the defendants have detrimentally changed
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their position because of the delay. Wayne v. A.V.A. Vending, Inc., 52 S.W.3d 412, 415 (Tex.
App.—Corpus Christi 2001, pet. denied); Green v. Parrack, 974 S.W.2d 200, 203-04 (Tex.
App.—San Antonio 1998, no writ). The contours of the defense of laches have been described as
follows:
The application of laches, however, is usually limited to cases arising out of equity
or actions at law that are essentially equitable in character. Furthermore, this Court
has held “laches . . . [is] peculiarly available against the assertion of equitable rights,
and may not be invoked to resist the enforcement of a purely legal right.” The present
case is a claim for breach of contract, a legal right. Appellant has a complete,
adequate, legal remedy in a suit for damages for the alleged breach of the lease
agreement. Appellant seeks a legal remedy, money damages for back rent and
appellee’s alleged failure to maintain the property. This is a claim based in law, no
specific performance or injunctive relief is requested . . . . We conclude that the
defense of laches does not apply in this case.
Wayne, 52 S.W.3d at 415 (citations omitted) (emphasis added).
Equitable remedies are available for breach of fiduciary duty. Int’l Bankers Life Ins. Co. v.
Holloway, 368 S.W.2d 567, 584 (Tex. 1963) (holding the trial court properly imposed punitive
damages as an equitable remedy for breach of fiduciary duty); In re Kerr, 293 S.W.3d 353, 358 (Tex.
App.—Beaumont 2009, orig. proceeding [mand. denied]) (noting equitable remedies of constructive
trust and profit disgorgement are available for breach of fiduciary duty). A constructive trust is an
equitable remedy created by the courts to prevent unjust enrichment. Medford v. Medford, 68 S.W.3d
242, 248 (Tex. App.—Fort Worth 2002, no pet.). Actual fraud or breach of a confidential
relationship must be present to justify the imposition of a constructive trust. Meadows v.
Bierschwale, 516 S.W.2d 125, 128 (Tex. 1974). A suit for an accounting is generally founded in
equity. Southwest Livestock & Trucking Co. v. Dooley, 884 S.W.2d 805, 809 (Tex. App.—San
Antonio 1994, writ denied).
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b. Issues Presented
In their fourth issue, the Garcias argue the summary judgment was insupportable on the
ground of laches as to their claims of breach of fiduciary duty and fraud. The Garcias do not argue
Dean and Shepherd failed to establish the elements of laches. Instead, the Garcias argue laches does
not apply to their breach of fiduciary duty and fraud claims because these claims are purely legal, not
equitable, in character. To support this argument, the Garcias cite cases holding the defense of laches
did not apply to claims involving the enforcement of purely statutory rights. See, e.g., Tex. Attorney
General v. Daurbigny, 702 S.W.2d 298, 300-01 (Tex. App—Houston [1st Dist.] 1985, no writ)
(holding laches was unavailable as a defense to a suit enforcing the statutory duty of a parent to
support his children); Ex parte Payne, 598 S.W.2d 312, 318 (Tex. Civ. App.—Texarkana 1980, orig.
proceeding) (holding defense of laches did not apply when the petitioner sought to enforce a purely
statutory right—child support contempt proceedings under the Texas Family Code) disapproved on
other grounds by Huff v. Huff, 648 S.W.2d 286, 290 (Tex. 1983).
Dean and Shepherd counter the summary judgment was supportable on the ground of laches
because the Garcias’ breach of fiduciary duty and fraud claims were essentially equitable in
character. Dean and Shepherd also argue the Garcias’ suit is essentially a fee forfeiture case, which
is equitable in character. See Burrow v. Arce, 997 S.W.2d 229, 245-46 (Tex. 1999) (stating“[i]n a
[fee] forfeiture case the value of the legal services rendered does not, as we have explained, dictate
either the availability of the remedy or amount of the forfeiture. Both decisions are inherently
equitable and must thus be made by the court.”) (emphasis added).
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c. Analysis
An examination of the petition in this case shows the Garcias’ claims and theories of
recovery are largely intertwined. For example, the Garcias’ trespass to try title and quiet title
allegations are predicated on their breach of fiduciary duty and fraud allegations. Additionally, the
Garcias seek substantial equitable relief in their petition. The Garcias’ live pleading—their third
amended petition—states: “Plaintiffs bring this action to redress the substantial wrong done to them
by their attorneys and their family members, through fraud, breach of fiduciary obligations, and
slander of title by quieting title to the subject property. Plaintiffs seek actual damages, punitive
damages, an order quieting title, an accounting, and the imposition of a constructive trust.” And, the
prayer of the petition states,
WHEREFORE, Plaintiffs request that Defendants be cited to appear and answer and
that on final trial Plaintiffs have:
1. For each and every legal cause of action set forth above, actual damages in excess
of the jurisdictional limits of this Court in recompense for the losses described above;
2. For each and every legal cause of action set forth above in which punitive damages
are requested, punitive damages against Dean and Shepherd in an amount equal to
the maximum amount allowable under Texas law;
3. An Order of this Court requiring a full accounting of all books, records, revenues,
expenses, transfers, gifts, trusts and assignments of interest in the Rancho Nuevo and
Salado Ranch properties as requested above;
4. A Judgment decreeing a constructive trust on the property described in this
petition, with the defendant as constructive trustee for the benefit of the Plaintiffs;
5. A Judgment ordering Defendants, as constructive trustees, to convey the property
described in this petition to Plaintiffs . . . .
(emphasis added).
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At oral argument, the Garcias cited several paragraphs in their petition which they contend
show that they seek to recover monetary damages—a legal remedy—for their breach of fiduciary
duty and fraud claims. An examination of these paragraphs, however, shows that monetary damages
are not requested as an independent, alternative remedy, but rather are requested in conjunction with
the equitable remedies requested.
As presented in their petition, the Garcias’ breach of fiduciary duty and fraud claims are not
purely legal claims. We, therefore, hold the defense of laches was available as to the Garcias’ breach
of fiduciary duty and fraud claims, and the summary judgment must be upheld on this ground. We
overrule the Garcias’ second, third, and fourth issues.
TRESPASS TO TRY TITLE AND QUIET TITLE CLAIMS
In their fifth issue, the Garcias argue the summary judgment cannot be sustained as to their
trespass to try title and quiet title claims because the mineral deed was void ab initio. In their
responses to the motion for summary judgment, the Garcias argued the statute of limitations did not
apply to them because the mineral deed was void ab initio. The cornerstone of this argument is a case
in which the Texas Supreme Court concluded a trustee’s deed was “absolutely void” because there
was no default by the debtor and the deed of trust authorized the sale only upon default by the debtor.
Slaughter v. Qualls,162 S.W.2d 671, 675 (Tex. 1942). After concluding the deed was absolutely void
because the trustee had no authority to convey the land, the supreme court held the trespass to try
title suit was not barred by limitations. Id. As explained in Slaughter:
The rule has long been . . . that where a deed is absolutely void, a suit at law in
trespass to try title may be maintained to recover the land without setting the deed
aside, and the statutes of limitation governing actions for the recovery of land apply.
On the other hand, where a deed is merely voidable and the equity powers of the
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court must first be invoked to cancel the deed before a suit can be maintained at law
to recover the land, then the four-year statute . . . controls. Therefore, it is necessary
for us to decide whether the trustee’s deed was void or merely voidable in order to
determine whether or not the suit was barred by limitation.
The question of whether the trustee’s deed is void or voidable depends on its effect
upon the title at the time it was executed and delivered. If it was a mere nullity,
passing no title and conferring no rights whatsoever, it was absolutely void, but if
it passed title to Mrs. Slaughter, the purchaser, subject only to the right of Qualls to
have it set aside upon proof that the sale was improperly made, then it was merely
voidable.
Id. at 674 (emphasis added). The supreme court further explained, “[t]hat which is void is without
vitality or legal effect. That which is voidable operates to accomplish the thing sought to be
accomplished, until the fatal vice in the transaction has been judicially ascertained and declared.”
Id. at 676 (citation omitted).
Here, the Garcias argue the mineral deed was void ab initio because in obtaining the deed
Dean and Shepherd violated two of the Texas disciplinary rules in effect at the time the deed was
executed. The two disciplinary rules in question are former DR 5-103 and DR 5-104. In 1975, DR
5-103, entitled “Avoiding Acquisition of Interest in Litigation,” stated:
(A) A lawyer shall not acquire a proprietary interest in the cause of action or
the subject matter of litigation he is conducting for a client, except that he
may:
(1) Acquire a lien granted by law to secure his fee or expenses.
(2) Contract with a client for a reasonable contingent fee in a civil case.
STATE BAR OF TEXAS, RULES AND CODE OF PROFESSIONAL RESPONSIBILITY , DR 5-103, 34 TEX . B.J.
757, 766 (1971, superseded 1990) (current version at TEX . DISCIPLINARY R. PROF’L CONDUCT
1.08(h), reprinted in TEX . GOV ’T CODE ANN ., tit.2, subtit. G app. A (Vernon 2005) (TEX . STATE BAR
RULE art. X, § 9)).
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In 1975, DR5-104, entitled “Limiting Business Relations with a Client,” stated in relevant
part:
(A) A lawyer shall not enter into a business transaction with a client if they have
differing interests therein and if the client expects the lawyer to exercise his
professional judgment therein for the protection of the client, unless the
client has consented after full disclosure.
STATE BAR OF TEXAS, RULES AND CODE OF PROFESSIONAL RESPONSIBILITY, DR 5-104, 34 TEX . B.J.
757, 766-67 (1971, superseded 1990) (current version at TEX . DISCIPLINARY R. PROF’L CONDUCT
1.08(a), reprinted in TEX . GOV ’T CODE ANN ., tit.2, subtit. G app. A (Vernon 2005) (TEX . STATE BAR
RULE art. X, § 9)).
In response, Dean and Shepherd contend there was no violation of the disciplinary rules.
Specifically, Dean and Shepherd contend they did not violate these rules because by the time the
deed was signed by the Garcias, the partition suit had been settled and Dean and Shepherd were no
longer “conducting litigation.” We find it unnecessary to address the merits of this contention.
The Garcias argue the mineral deed is “categorically ‘void’ rather than ‘voidable[]’ because
it was procured as the result of violations of two applicable disciplinary rules for Texas attorneys,
DR 5-103 and DR 5-104.” The Garcias further argue “[a]ny contract that violates public policy is
void and in 1975 the Texas Disciplinary Rules constituted the ‘public policy’ of the State of Texas.”
We are unpersuaded by the Garcias’ premise that a violation of DR 5-103 or DR 5-104 would have
automatically rendered the mineral deed in this case void ab initio. For the following reasons, we
conclude the mineral deed in this case was not void ab initio as argued by the Garcias.3
3
… During oral argument, Dean’s and Shepherd’s counsel remarked that if a disciplinary rule had been violated,
then the mineral deed would “arguably” be void and limitations would not apply. This remark has no effect on our
disposition of this issue. First, counsel stated the mineral deed would “arguably” be void, and therefore, the remark was
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First, the preamble to the current Rules of Professional Conduct states “[t]hese rules do not
undertake to define standards of civil liability of lawyers for professional conduct. Violation of a rule
does not give rise to a private cause of action nor does it create any presumption that a legal duty to
a client has been breached.” TEX . DISCIPLINARY RULE PROF’L CONDUCT preamble ¶ 15, reprinted
in TEX . GOV ’T CODE ANN ., tit.2, subtit. G app. A (Vernon 2005) (Tex. State Bar Rule art. X, § 9).
As recognized by the Fourteenth Court of Appeals:
The Texas Disciplinary Rules of Professional Conduct do not define standards for
civil liability and do not give rise to private claims. Nonetheless, a court may deem
these rules to be an expression of public policy, so that a contract violating them is
unenforceable as against public policy. Although courts may, and often have, used
these rules as a measure of public policy, they are not required to do so.
Dardas v. Fleming, Hovenkamp & Grayson, P.C., 194 S.W.3d 603, 613 (Tex. App.—Houston [14th
Dist.] 2006, pet. denied) (citations omitted) (emphasis added); see also Wright v. Sydow, 173 S.W.3d
534, 549 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (holding that a settlement agreement
would be enforced even if it were executed in violation of a Texas Disciplinary Rule of Professional
Conduct and stating that a violation of one of these rules does not necessarily void a contract);
Primrose Operating Co., Inc. v. Jones, 102 S.W.3d 188, 193 (Tex. App.—Amarillo 2003, pet.
denied) (stating that disciplinary rules govern non-disciplinary proceedings only to the extent that
they manifest public policy).
Second, the Garcias direct our attention to several cases in which Texas courts have
concluded that agreements violating other disciplinary rules were unenforceable and void as against
public policy. See, e.g., Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 205 (Tex. 2002) (“A
qualified. Second, under our analysis we do not reach the issue of whether any disciplinary rule was violated.
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fee sharing agreement between lawyers who are not in the same firm violates public policy and is
unenforceable unless the client is advised of and consents to the sharing arrangement.”); Lemond v.
Jamail, 763 S.W.2d 910, 914 (Tex. App.—Houston [1st Dist.] 1988, writ denied) (“In substance,
the trial judge . . . found . . . that the referral agreement is void and unenforceable as being against
public policy because . . . the client . . . was never informed of the fee-splitting agreement . . . .”);
Quintero v. Jim Walter Homes, Inc., 709 S.W.2d 225, 229-30 (Tex. App.—Corpus Christi 1986, writ
ref’d n.r.e.) (holding a settlement agreement was void and unenforceable because the clients were
not informed of the nature and amounts of all the claims involved in the aggregate settlement as
required by DR 5-106); Fleming v. Campbell, 537 S.W.2d 118, 119 (Tex. Civ. App.—Houston [14th
Dist.] 1976, writ ref’d n.r.e.) (holding an attorney’s referral fee contract was void because it was
against the public policy expressed in DR 2-107); but see Baron v. Mullinax, Wells, Mauzy & Baab,
Inc., 623 S.W.2d 457, 461 (Tex. App.—Texarkana 1981, writ ref’d n.r.e.) (recognizing “[t]he public
policy behind this disciplinary rule [DR 2-107] is that persons represented by lawyers in this State
should be able to choose who finally represents them and the type of legal fees to be charged,” but
holding the contract in question was valid). However, the Garcias do not direct us to any cases
holding agreements violating DR 5-103 and DR 5-104 were unenforceable and void as against public
policy, and we have found none.
Finally, deeds are void ab initio under very limited circumstances. Forged deeds are void ab
initio; however, deeds obtained by fraud, fraudulent misrepresentation, undue influence, or mutual
mistake are not void, but voidable. 5 Alyosius A. Leopold, TEXAS PRACTICE : LAND TITLES AND
TITLE EXAMINATION §§ 27.3—27.17 (3d ed. 2005 & Supp. 2009); see also Dwairy v. Lopez, 243
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S.W.3d 710, 712 (Tex. App.—San Antonio 2007, no pet.) (“[A] forged deed passes no title.”). Here,
there are no allegations of forgery. Additionally, there are no allegations the Garcias did not have the
authority to sign the mineral deed and convey the mineral interests in question.
The Garcias also suggest in their brief that even if the mineral deed was not void ab initio
because it violated the disciplinary rules, the mineral deed was void because the Garcias were
fraudulently induced to sign it. This argument, however, was not presented to the trial court. “Issues
not expressly presented to the trial court by written motion, answer or other response” to the motion
for summary judgment “shall not be considered on appeal as grounds for reversal.” TEX . R. CIV . P.
166a(c). A party cannot raise new reasons why a summary judgment should have been denied for
the first time on appeal. Clear Creek, 589 S.W.2d at 678-79. Because this argument was not
presented to the trial court, we are precluded from reaching its merits.
Here, the summary judgment record, viewed in the light most favorable to the Garcias, shows
the mineral deed was not void, but voidable. When a deed is merely voidable, then the four-year
statute of limitations controls. Slaughter, 162 S.W.2d at 674. Because the mineral deed in this case
was voidable, the four-year statute of limitations applied to the trespass to try title and quiet title
actions and barred these claims. We, therefore, must uphold the summary judgment as to the trespass
to try title and quiet title claims.
REMAINING CLAIMS
The Garcias present no specific issues challenging the summary judgment as to their slander
of title, constructive trust, accounting, and declaratory judgment claims on the ground of limitations.
Additionally, the Garcias present no general issues challenging the summary judgment. When, as
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here, an appellant fails to specifically challenge every ground raised in the motion for summary
judgment, and fails to raise a general issue contending the trial court erred in granting summary
judgment, the summary judgment must be upheld. Gamboa v. Shaw, 956 S.W.2d 662, 665- 66 (Tex.
App.—San Antonio 1997, no writ) (citing Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121
(Tex.1970)). We, therefore, must uphold the summary judgment on the Garcias’ remaining claims.
CONCLUSION
Having concluded the summary judgment must be upheld on the grounds of limitations and
laches, we need not address the Garcias’ issues challenging the summary judgment on grounds of
lack of privity and lack of standing. See TEX . R. APP . P. 47.1. The judgment of the trial court is
affirmed.
Karen Angelini, Justice
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