Wulchin Land L.L.C., a Texas Limited Liability Company v. Sharon Marie Schulz Ellis, Individually and as Independent and Testamentary Trustee of the Estate of John T. Schulz Jr. and Independent of the Estate of Mary Deane Schulz John T. Schulz III Jeffrey E. Schulz Robert P. Schulz Paul J. Schulz Thomas R. Forehand, Individually and D/B/A Forehand Title Company Schneider & McWilliams, P.C. And Michael Satori ( 2020 )

NUMBER 13-18-00156-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
WULCHIN LAND, L.L.C., A TEXAS
LIMITED LIABILITY COMPANY, Appellant,
v.
SHARON MARIE SCHULZ ELLIS,
INDIVIDUALLY AND AS INDEPENDENT
EXECUTRIX AND TESTAMENTARY TRUSTEE
OF THE ESTATE OF JOHN T. SCHULZ JR.
AND INDEPENDENT EXECUTRIX OF THE
ESTATE OF MARY DEANE SCHULZ; JOHN
T. SCHULZ III; JEFFREY E. SCHULZ; PAUL J.
SCHULZ; THOMAS R. FOREHAND,
INDIVIDUALLY AND D/B/A FOREHAND TITLE
COMPANY; SCHNEIDER & MCWILLIAMS, P.C.;
AND MICHAEL SARTORI, Appellees.
On appeal from the 343rd District Court
of Live Oak County, Texas.
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Longoria and Perkes
Memorandum Opinion by Justice Perkes
This case primarily concerns the application of the discovery rule to various claims
arising out of two deeds executed in 2001. Appellant Wulchin Land, L.L.C., a Texas
Limited Liability Company (Wulchin Land), filed suit in 2014, alleging, among other things,
that the sellers misrepresented their mineral rights; i.e., the sellers did not own all of the
mineral interests purportedly conveyed by the deeds. The trial court granted summary
judgment in favor of appellees Sharon Marie Schulz Ellis, individually and as independent
executrix and testamentary trustee of the estate of John T. Schulz Jr. and independent
executrix of the estate of Mary Deane Schulz; John T. Schulz III; Jeffrey E. Schulz; Robert
P. Schulz; and Paul J. Schulz (collectively, the Schulz children) based on limitations.
Without specifying the basis, the trial court also granted summary judgment in favor of
appellees Thomas R. Forehand, individually and d/b/a Forehand Title Company
(Forehand); Schneider & McWilliams, P.C. (Schneider); and Michael Sartori. Each moved
for summary judgment based on limitations, the anti-fracturing rule, and no evidence of
damages.
By what we construe as six issues that we have reorganized, Wulchin Land
contends on appeal that: (1) the anti-fracturing rule does not apply to its claims against
Forehand, Schneider, and Sartori for fraud and breach of fiduciary duty; (2) Wulchin Land
is entitled to the benefit of the discovery rule on certain claims; (3) the movants failed to
conclusively establish when Wulchin Land’s breach of general warranty claim accrued;
(4) the trial court abused its discretion by denying Wulchin Land’s motions for continuance
to respond to Forehand, Schneider, and Sartori’s no-evidence motions; (5) the trial court
2
abused its discretion by denying Wulchin Land leave to add additional parties and
continue the trial; and (6) the trial court abused its discretion on various evidentiary
rulings. We affirm in part, reverse in part, and remand for further proceedings.
I. BACKGROUND
In 2001, Benita and Stephen Wulchin, residents of Colorado, contracted for the
purchase of contiguous 490-acre tracts of land in Live Oak County, Texas (Tract A and
Tract B or collectively, the Ranch). The seller of Tract A was the John T. Schulz, Jr. Family
Trusts and the sellers of Tract B were John T. Schulz Jr. and his wife Mary Deane Schulz
(collectively, the Sellers).1 In both purchase contracts and warranty deeds, the Sellers
represented that they owned and were conveying the entire surface estate; 50% of the
mineral estate, subject to a 25% nonparticipating royalty interest; and 100% of the
executive rights in the mineral estate. As Wulchin Land would come to realize more than
ten years later, the Sellers only owned 25% of the mineral estate and 50% of the executive
rights.
Prior to the conveyances, the Wulchins hired appellee Sartori, a local attorney, to
create Wulchin Land as a holding company for the Ranch. 2 Sartori also represented
Wulchin Land in the real estate transactions and received separate payments for these
services.
The Sellers were represented by Schneider, who prepared the warranty deeds
and, according to Wulchin Land, issued an opinion letter confirming that the Sellers
1 The Schulz children were not the Sellers nor in any way parties to any of the agreements.
2 The purchase contracts were between the Sellers and the Wulchins “and/or assigns,” but Wulchin
Land was the grantee in each warranty deed.
3
“own[ed]” the respective tracts, but gave “no indication that the mineral interests and
executive rights were not owned as represented by [Sellers].”
The purchase contracts provided for Border Title Company to issue the title
policies. Wulchin Land alleges in its petition, though, that the title commitments were in
fact issued by “Forehand Title Company (Stewart Title)” and these “assur[ed] clear title to
Tract A and Tract B, provided the Sellers executed the General Warranty Deeds in favor
of [Wulchin Land] in compliance with the terms of the [purchase] [c]ontracts.”3
In 2009, Pioneer Natural Resources USA, Inc. (Pioneer) approached Wulchin Land
about leasing certain mineral interests on the Ranch for oil and gas development.
According to its petition, Wulchin Land hired Schneider and Forehand, also an attorney
with Schneider,
to review its title and explain what it owned, what it meant, how it would
work, who would be entitled to share in bonus/rents and royalties under the
proposed oil and gas lease, and what percentages of the money [Wulchin
Land] would receive. Forehand represented to [Wulchin Land] that he
conducted an independent examination of title records in the County Clerk’s
office, as well as reviewing the records of Forehand Title Company, and
[Wulchin Land] owned 100% of the Executive Rights in the 980.84 acre
tract, and would receive one-half (50%) of any lease bonus and future rents,
and one-quarter (25%) of all royalties from any existing of future oil and gas
leases, in perpetuity.
Forehand and Schneider also represented Wulchin Land in negotiating and preparing the
3 According to the Texas Department of Insurance,
[t]he title commitment comes before closing; the title policy is issued after closing. The
commitment says that a title company is willing to issue title insurance under certain
conditions and if the seller fixes certain problems. The policy provides coverage for the
property. . . . The title commitment lists any potential issues, exclusions, or exceptions.
It alerts the buyer to issues that exist and could cause problems in the future. It does not
guarantee that there are no current issues or that none will arise in the future.
TEX. DEP’T OF INS., Title Insurance Frequently Asked Questions, https://www.tdi.texas.gov/title/titlefaqs.html
(last visited Mar. 9, 2020).
4
oil and gas lease with Pioneer, which Wulchin Land executed in July 2009, as if it owned
100% of the executive rights in the mineral estate.
On or about November 5, 2012, Pioneer expressed interest in extending the oil
and gas lease but informed Wulchin Land about a “title issue” with the mineral estate.
Wulchin Land again engaged Schneider and Forehand to review the lease extension and
investigate and resolve the title question. Forehand informed Wulchin Land that the issue
was a “missing signature” by one of the Sellers in the original title work and assured it
that the problem could be cured. However, before remedying the alleged issue, Schneider
and Forehand withdrew from their representation of Wulchin Land, noting that conflicts of
interest had arisen because Schneider previously represented the Sellers and Forehand
was the title agent.
Wulchin Land then hired its current attorney who, after conducting his own title
examination, determined that the Schulz children, through a series of prior conveyances,
owned 25% of the mineral estate and 50% of the executive rights. Wulchin Land filed suit
on September 3, 2014, less than two years after Pioneer notified it about the “title issues,”
asserting claims against the Schulz children 4 for declaratory judgment, reformation,
slander of title, fraud, negligent misrepresentation, breach of warranty, tortious
interference, estoppel by deed, and adverse possession, as well as claims against
4 “A suit seeking to establish the decedent’s liability on a claim and subject property of the estate
to its payment should ordinarily be instituted against the personal representative or, under appropriate
circumstances, against the heirs or beneficiaries.” Price v. Estate of Anderson, 522 S.W.2d 690, 691 (Tex.
1975). The Shulz children did not argue in their summary judgment motions that Wulchin Land’s claims fail
as to some of them because they are not properly representative of their parents’ estates. Therefore, we
offer no opinion on whether the various claims alleged by Wulchin Land can be maintained against all of
the Schulz children. See W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005) (“Because the trial court’s
order granting summary judgment does not specify the basis for the ruling, we must affirm the trial court's
judgment if any of the theories advanced are meritorious.”).
5
Sartori, Forehand, and Schneider for fraud and breach of fiduciary duty.
The Schulz children moved for summary judgment based on limitations. Sartori,
Forehand, and Schneider moved for summary judgment based on the anti-fracturing rule,
limitations, and no evidence of damages. The trial court granted appellees’ motions
without specifying the basis for its ruling, and this appeal ensued.
II. STANDARD OF REVIEW
A party moving for traditional summary judgment must establish that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX.
R. CIV. P. 166a(c). The defendant has the burden to establish its affirmative defense of
limitations. KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748
(Tex. 1999) (citing Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997)).
A defendant moving for summary judgment on a limitations defense must: (1) conclusively
prove when the cause of action accrued, and (2) negate the discovery rule, if it applies
and has been pleaded or otherwise raised, by proving 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. Id. (citing Burns v.
Thomas, 786 S.W.2d 266, 267 (Tex.1990)).
A motion for no-evidence summary judgment requires the non-movant to present
more than a scintilla of probative evidence raising a genuine issue of material fact
supporting each element contested in the motion. TEX. R. CIV. P. 166a(i); Dallas Morning
News, Inc. v. Tatum, 554 S.W.3d 614, 625 (Tex. 2018). Evidence is more than a scintilla
if it “rises to a level that would enable reasonable and fair-minded people to differ in their
conclusions.” Serv. Corp. Int’l v. Guerra, 348 S.W.3d 221, 228 (Tex. 2011).
6
“When a trial court’s order granting summary judgment does not specify the
grounds relied upon, the reviewing court must affirm summary judgment if any of the
summary judgment grounds are meritorious.” FM Props. Operating Co. v. City of Austin,
22 S.W.3d 868, 872–73 (Tex. 2000) (citing Star–Telegram, Inc. v. Doe, 915 S.W.2d 471,
473 (Tex. 1995)). We review summary judgments de novo. Rogers v. RREF II CB
Acquisitions, LLC, 533 S.W.3d 419, 425 (Tex. App.—Corpus Christi–Edinburg 2016, no
pet.) (citing Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192
(Tex. 2007)). We take as true all evidence favorable to the non-movant, indulge every
reasonable inference, and resolve any doubts in the non-movant’s favor. Id. at 426 (citing
Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002)).
III. ANTI-FRACTURING RULE
Before turning to the discovery rule’s application, we must first determine which
claims were properly before the trial court in the first instance. In addition to moving for
summary judgment on limitations grounds, Sartori, Schneider, and Forehand also argued
that Wulchin Land violated the anti-fracturing rule by miscasting its malpractice claims as
claims for fraud and breach of fiduciary duty. By its first issue, Wulchin Land contends
that its intentional tort claims were not precluded by the anti-fracturing rule.
A. Applicable Law & Standard of Review
“The anti-fracturing rule prevents plaintiffs from converting what are actually
professional negligence claims against an attorney into other claims such as fraud,
breach of contract, breach of fiduciary duty, or violations of the DTPA.” Won Pak v. Harris,
313 S.W.3d 454, 457 (Tex. App.—Dallas 2010, pet. denied) (citing Beck v. Law Offices
of Edwin J. (Ted) Terry Jr., P.C., 284 S.W.3d 416, 426–27 (Tex. App.—Austin 2009, no
7
pet.)); see also Harris & Greenwell, LLP v. Hilliard, No. 13-12-00089-CV, 2013 WL
7707847, at *2 (Tex. App.—Corpus Christi–Edinburg Aug. 1, 2013, pet. granted, judgm’t
vacated w.r.m.) (mem. op.). If the gravamen of the plaintiff’s complaint is that the attorney
failed to exercise the normal degree of care, skill, or diligence in representing the plaintiff,
then the claim sounds in negligence and the anti-fracturing rule applies. Riverwalk CY
Hotel Partners, Ltd. v. Akin Gump Strauss Hauer & Feld, LLP, 391 S.W.3d 229, 236 (Tex.
App.—San Antonio 2012, no pet.) (citing Aiken v. Hancock, 115 S.W.3d 26, 28 (Tex.
App.—San Antonio 2003, pet. denied)); see also Hilliard, 2013 WL 7707847, at *2. On
the other hand, if, for example, the claim focuses on an attorney obtaining an improper
benefit, then the claim may appropriately be classified as a breach of fiduciary duty claim.
Riverwalk CY Hotel Partners, 391 S.W.3d 229 at 236 (citing Murphy v. Gruber, 241
S.W.3d 689, 93 (Tex. App.—Dallas 2007, pet. denied)); see also Hilliard, 2013 WL
7707847, at *3.
Whether a plaintiff has accurately labeled their claims against an attorney is a
question of law. Riverwalk CY Hotel Partners, 391 S.W.3d at 236; see also Hilliard, 2013
WL 7707847, at *3. We review questions of law de novo. Riverwalk CY Hotel Partners,
391 S.W.3d at 236 (citing Gruber, 241 S.W.3d at 692–93).
B. Analysis
After reviewing the record, we conclude that Wulchin Land’s claims against its
attorneys are properly characterized as malpractice claims. Despite the labels Wulchin
Land placed on them, the company’s primary complaints are that the attorneys provided
bad legal advice and failed to disclose conflicts of interest. More specifically, Wulchin
Land complains that it engaged these attorneys to represent it in the real estate
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transactions involving the conveyance of mineral interests, but that none of them advised
Wulchin Land of the title defect in the mineral estate; i.e., Sartori failed to discover the title
defect before the Ranch was purchased in 2001, and Schneider and Forehand failed in
the same regard before Wulchin Land executed the oil and gas lease with Pioneer in
2009. In other words, the attorneys allegedly “failed to exercise the degree of care, skill,
or diligence that attorneys of ordinary skill and knowledge commonly possess.” See
Riverwalk CY Hotel Partners, 391 S.W.3d 229 at 236. As such, these allegations are
properly characterized as malpractice claims, and not as breach of fiduciary duty or fraud
claims.
Wulchin Land also complains that: Sartori failed to disclose he previously
performed work for Forehand Title Company; that Schneider failed to disclose it
represented the Sellers prior to and during the 2001 transaction; and Forehand failed to
disclose his role as the title agent.5 However, representing different clients with adverse
interests is not the type of conflict of interest that would give rise to a breach of fiduciary
duty claim; instead, such a claim arises when a lawyer has a direct pecuniary interest in
the transaction or litigation that is adverse to the client, and the attorney pursues his own
interest to the client’s detriment. Id. (citing Beck, 284 S.W.3d at 436).
5 Title insurance companies and title insurance agents play different roles in real estate
transactions.
The title insurance company insures real property titles. The title insurance agent sells
title insurance, collects the premiums, and issues or countersigns policies for the
insurance company. This agent is usually a title and abstract company which provides
assorted services to its clients, such as selling title insurance, researching the title for
that insurance, surveying the realty, and “closing” through escrow agents.
Cameron Cty. Sav. Ass'n v. Stewart Title Guar. Co., 819 S.W.2d 600, 602 (Tex. App.—Corpus Christi–
Edinburg 1991, writ denied) (internal citations omitted). Additionally, title examinations are done for the
benefit of the title company issuing the policy, not the insured. IQ Holdings, Inc. Stewart Title Guar. Co.,
451 S.W.3d 861, 871 (Tex. App.—Houston [1st Dist.] 2014, no pet.).
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It is not clear from Wulchin Land’s petition how the attorneys allegedly pursued
their own interests to the detriment of Wulchin Land. Nevertheless, to the extent Wulchin
Land argues the attorneys favored their own pecuniary interests by obtaining legal fees
from Wulchin Land instead of disclosing these potentially disqualifying conflicts, “that
interest, without more, is insufficient to allege the type of dishonesty or intentional
deception necessary to convert a negligence claim into one for breach of a fiduciary duty.”
See Pak, 313 S.W.3d at 458; see also Hilliard, 2013 WL 7707847, at *5. Thus, under the
facts alleged in this case, the failure to disclose these conflicts of interest does not
constitute a claim for breach of fiduciary duty. See Pak, 313 S.W.3d at 458; see also
Hilliard, 2013 WL 7707847, at *5.
The trial court did not err in granting summary judgment dismissing Wulchin Land’s
intentional tort claims against Sartori, Schneider, and Forehand. We overrule Wulchin
Land’s first issue.
IV. LIMITATIONS
Other than its breach of warranty claim, which we address below, Wulchin Land
acknowledges that the statute of limitations has run on all of its claims. By its second
issue, Wulchin Land contends that it was entitled to the benefit of the discovery rule on
its claims for negligent misrepresentation and fraud concerning the 2001 transactions and
its legal malpractice claims against Sartori, Schneider, and Forehand.6
6Wulchin Land did not brief the application of the discovery rule to its claims for declaratory
judgment, reformation, slander of title, tortious interference, estoppel by deed, or adverse possession.
Accordingly, these issues were not preserved for our review. See TEX. R. APP. P. 38.1(i).
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A. Applicable Law
A statute of limitations establishes a time limit for a plaintiff to file a lawsuit.7 See
Crocket Cty. v. Klassen Energy, Inc., 463 S.W.3d 908, 912 (Tex. App.—El Paso 2015, no
pet.); De Leon Torres v. Johns, 706 S.W.2d 693, 695 (Tex. App.—Corpus Christi–
Edinburg 1986, no writ). Determining when a cause of action accrued, the date on which
the action’s limitations period began to run, is generally a question of law. Hooks v.
Samson Lone Star, L.P., 457 S.W.3d 52, 57–58 (Tex. 2015). If a cause of action’s accrual
date is not defined by statute, it is determined under the common law. KPMG Peat
Marwick, 988 S.W.2d at 749. Under the legal-injury rule, “a cause of action generally
accrues when a wrongful act causes some legal injury, even if the fact of injury is not
discovered until later, and even if all resulting damages had not yet occurred.” Valdez v.
Hollenbeck, 465 S.W.3d 217, 229 (Tex. 2015) (citing Trinity River Auth. v. URS
Consultants, Inc., 889 S.W.2d 259, 262 (Tex. 1994)).
Under the discovery rule, however, the accrual date is deferred until the plaintiff
knows, or by exercising reasonable diligence should know, that it has suffered an injury
that was likely caused by the wrongful acts of another. Childs v. Haussecker, 974 S.W.2d
31, 40 (Tex. 1998). The discovery rule applies when a plaintiff pleads and proves that its
injury was inherently undiscoverable at the time it occurred but can be objectively verified.
S.V. v. R.V., 933 S.W.2d 1, 6 (Tex. 1997). “An injury is inherently undiscoverable if it is,
by its nature, unlikely to be discovered within the prescribed limitations period despite due
diligence.” Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex. 2001). “This
7
Wulchin Land’s claims for negligent misrepresentation and legal malpractice are subject to a two-
year statute of limitations, see TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a), and its claims for fraud and
breach of general warranty are subject to a four-year statute of limitations. See id. §§ 16.004(a)(4), 16.051.
11
legal question is decided on a categorical rather than case-specific basis; the focus is on
whether a type of injury rather than a particular injury was discoverable.” Via Net v. TIG
Ins., 211 S.W.3d 310, 314 (Tex. 2006) (per curiam) (citing Horwood, 58 S.W.3d at 736).
B. Misrepresentation Claims
As a matter of law, the injuries upon which Wulchin Land’s claims for negligent
misrepresentation and fraud are based were not inherently undiscoverable. At the time of
the conveyances, Wulchin Land was charged with constructive notice of the chains of title
for Tract A and Tract B in the public records. See Hooks, 457 S.W.3d at 59 (“Land title
records and probate proceedings create constructive notice, ‘an irrebuttable presumption
of actual notice,’ which prevents limitations from being delayed.” (quoting Mooney v.
Harlin, 622 S.W.2d 83, 85 (Tex. 1981))).
As a matter of law, the accrual of a fraud claim based on a title defect is not delayed
when a plaintiff has actual or constructive notice of the defect. Id.; see, e.g., Sherman v.
Sipper, 152 S.W.2d 319, 321 (Tex. 1941) (holding claim against sellers who fraudulently
misrepresented their title in mineral estate was barred by limitations because buyers were
charged with constructive notice of the chain of title in the public record). A plaintiff may
be estopped from invoking limitations when the fraud extends to the public record but
there is no allegation that the public record in this case was tainted by fraud. See Hooks,
457 S.W.3d at 59.
Pioneer discovered the title defect in 2012 and made inquiry. Wulchin Land’s
current attorney later confirmed this defect after conducting his own title examination of
the public record. Therefore, even if misrepresentations were made, Wulchin Land was
charged with “an irrebuttable presumption of actual notice” that these representations
12
were false at the time the contracts and deeds were executed. See Mooney, 622 S.W.3d
at 85. Thus, Wulchin Land’s claims for negligent misrepresentation and fraud accrued in
2001 and are barred by limitations. This sub-issue is overruled.
C. Malpractice Claims
1. Failure to Disclose Conflicts of Interest
In general, “the discovery rule applies to legal-malpractice cases, so that in such
cases, limitations does not begin to run until the client discovers or should have
discovered through the exercise of reasonable care and diligence the facts establishing
the elements of a cause of action.” Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120–21
(Tex. 2001) (citing Willis v. Maverick, 760 S.W.2d 642, 646 (Tex. 1988)). Wulchin Land’s
malpractice claims based on a failure to disclose a conflict of interest do not implicate
Wulchin Land’s constructive notice of the public record. Accordingly, we conclude the
discovery rule applies. See id.
As such, it was Sartori, Schneider, and Forehand’s burden to establish “as a matter
of law that there [wa]s no genuine issue of material fact about when [Wulchin Land]
discovered, or in the exercise of reasonable diligence should have discovered the nature
of its injury.” See KPMG Peat Marwick, 988 S.W.2d at 748 (citing Burns, 786 S.W.2d at
267). None of these appellees established the accrual date for these malpractice claims
as a matter of law; therefore, summary judgment based on limitations was improper. See
id.
2. Bad Legal Advice
We must first determine whether the discovery rule applies to legal malpractice
claims arising out of an attorney’s negligent title review. Stated differently, should a client
13
be charged with constructive notice that their attorney’s title advice is contrary to the chain
of title in the public record, thus triggering limitations to run on their legal malpractice
claim? Due to the fiduciary relationship that exists between an attorney and client, we
conclude that the answer is no—instead, the discovery rule applies.8
The fiduciary relationship that exists between an attorney and client is the primary
reason for applying the discovery rule to legal malpractice claims: “As a fiduciary, an
attorney is obligated to render a full and fair disclosure of facts material to the client’s
representation. The client must feel free to rely on his attorney’s advice. Facts which might
ordinarily require investigation likely may not excite suspicion where a fiduciary
relationship is involved.” Maverick, 760 S.W.2d at 645 (citations omitted).
In the same vein, a fiduciary relationship can except a plaintiff from constructive
notice of public records. Andretta v. West, 415 S.W.2d 638, 641–42 (Tex. 1967)
(concluding plaintiff was excepted from constructive notice of public records due to
fiduciary relationship between the parties, and therefore plaintiff’s claim was not barred
by limitations); see Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 618 (Tex. 2007)
(per curiam) (recognizing the fiduciary-relationship exception to constructive notice of
public records but rejecting its application to the case because the plaintiff failed to plead
or prove the existence of a fiduciary relationship) (citing Via Net, 211 S.W.3d at 313);
HECI Expl. Co. v. Neel, 982 S.W.2d 881, 888 (Tex. 1998) (same).
Thus, we find no principled reason to create an exception to the general rule that
legal malpractice claims are subject to the discovery rule. See Apex Towing, 41 S.W.3d
8 We presume for purposes of this discussion that conducting a title review was within the scope
of representation, a material fact disputed by Sartori, but not Forehand or Schneider.
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at 120–21 (citing Maverick, 760 S.W.2d at 646). Wulchin Land exercised due diligence
by hiring attorneys to represent it in these transactions. Like any client, Wulchin Land
must feel free to rely on its attorneys’ advice, and therefore the company had no occasion
to search the public record. See Maverick, 760 S.W.2d at 645; Andretta, 415 S.W.2d at
642. This combination of factors rendered Wulchin Land’s injuries from these legal
malpractice claims inherently undiscoverable. See Horwood, 58 S.W.3d at 734–35. We
also note that our holding will not disturb the stability and reliability of titles, the basis for
charging grantees with constructive notice of public records. See Neel, 982 S.W.2d at
887.
We conclude the discovery rule applies to Wulchin Land’s malpractice claims
against Sartori, Schneider, and Forehand based on their failure to advise Wulchin Land
of the title defect. Because the appellees did not establish the accrual date of these claims
as a matter of law, it was improper for the trial court to grant summary judgment based
on limitations. See KPMG Peat Marwick, 988 S.W.2d at 748. This malpractice sub-issue
is sustained.
D. Breach of Warranty of Title
By its third issue, Wulchin Land contends that its breach of general warranty claim
against the Schulz children is not barred by limitations because (1) such a claim does not
accrue until an actual or constructive eviction occurs, and (2) the Schulz children failed to
conclusively establish this fact. We agree.
“The rule is well established that a cause of action for breach of a covenant of
general warranty does not arise until there has been an [actual or constructive] eviction.”
Schneider v. Lipscomb Cty. Nat’l Farm Loan Ass’n, 202 S.W.2d 832, 834 (Tex. 1947);
15
Stumhoffer v. Perales, 459 S.W.3d 158, 165 (Tex. App.—Houston 2015, pet. denied);
Solares v. Solares, 232 S.W.3d 873, 879 (Tex. App.—Dallas 2007, no pet.); see Gibson
v. Turner, 294 S.W.3d 781, 787 (Tex. 1956) (“[T]here can be no breach of warranty and
no recovery of damages for breach of warranty unless and until there has been an actual
or constructive eviction of the lessee.”).
A constructive eviction occurs when paramount title has been positively asserted
against the grantee and the grantee has yielded to that assertion. Schneider, 202 S.W.2d
at 835; Perales, 459 S.W.3d at 165; Solares, 232 S.W.3d at 879. The grantee can yield
by surrendering possession to the superior titleholder or by purchasing the title, and then
resort to recovering on the warranty. Schneider, 202 S.W.2d at 835; Solares, 232 S.W.3d
at 879. Additionally,
when the true owner is in possession at the time of the conveyance and the
grantee is not, and at that time the grantee “finds the premises already in
the possession of one claiming under a paramount title, the covenant of
warranty is breached, and the [grantee] may maintain an action . . . .”
Solares, 232 S.W.3d at 879 (quoting Morrison v. Howard, 261 S.W.2d 910, 912–13 (Tex.
App.—Austin 1965, writ ref’d n.r.e.) (on reh’g per curiam)).
The Schulz children contend that the Sellers breached the general warranties
immediately upon execution of the deeds, equating those breaches to constructive
evictions. We agree that the Sellers breached the warranties at the time the deeds were
executed in 2001. See Trial v. Dragon, No. 18-0203, 2019 WL 2554130, at *7 (Tex. June
21, 2019) (concluding under similar facts that “[t]here is no question that [the grantor]
breached the general warranty at the time of execution”). We disagree, however, that a
seller’s breach is tantamount to a buyer’s constructive eviction.
Even if we assume that the Schulz children’s previously recorded title constituted
16
a positive assertion of paramount title against Wulchin Land, there is no evidence in the
record that Wulchin Land yielded to that assertion. To the contrary, it is undisputed that
Wulchin Land took possession of the Ranch in 2001 and independently executed an oil
and gas lease for the premises in 2009, accepting the entire bonus payment as the
purported owner of 100% of the executive rights. Both of these actions—executing the
lease without the Schulz children’s approval and accepting 100% of the bonus payment—
were done in contravention of the Schulz children’s 50% interest in the executive rights.
Simply put, there is no evidence in the summary judgment record that Wulchin Land has
ever yielded to an assertion of paramount title by the Schulz children.
We also note that, although the Dragon Court concluded that the grantor “breached
the general warranty at the time of execution,” the deed at issue was executed in 1992,
yet the grantees filed suit for breach of warranty against the grantor’s heirs in 2014 and
there is no discussion in the opinion about when the claim accrued or whether it was
barred by limitations. See Dragon, 2019 WL 2554130, at *1–2, 7–8. Thus, the supreme
court has expressed no clear intent to overrule Schneider, an opinion which, unlike
Dragon, specifically addressed the accrual date of a breach of general warranty claim.
Compare Schneider, 202 S.W.2d at 833 with Dragon, 2019 WL 2554130, at *7–8.
Accordingly, the Schulz children were not entitled to summary judgment on their
limitations defense because they failed to conclusively establish the accrual date of
Wulchin Land’s breach of warranty claim. See KPMG Peat Marwick, 988 S.W.2d at 748;
Schneider, 202 S.W.2d at 835. We sustain Wulchin Land’s third issue.9
9 We note that the proper measure of damages for a breach of general warranty claim is the
consideration paid for the conveyance or for whatever portion of the conveyance that was subject to a
failure of title. Sun Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987).
17
V. OTHER SUMMARY JUDGMENT GROUNDS
Sartori, Schneider, and Forehand also filed no evidence motions for summary
judgment on the element of damages. Sartori limited his no evidence motion to the
malpractice claim alleging that he failed to disclose a conflict of interest, while Schneider
and Forehand contended more broadly that Wulchin Land did not suffer “any damages
due to [their] alleged malpractice.” The trial court granted all motions for summary
judgment without comment. Wulchin Land does not contend on appeal that it produced
evidence of damages on any of these claims; instead, by its fourth issue, Wulchin Land
argues that the trial court abused its discretion when it denied Wulchin Land’s motion for
a continuance to develop the record on damages.
A. Applicable Law & Standard of Review
No-evidence summary judgment may be granted only “[a]fter adequate time for
discovery.” TEX. R. CIV. P. 166a(i). “The trial court may order a continuance of a summary
judgment hearing if it appears ‘from the affidavits of a party opposing the motion that he
cannot for reasons stated present by affidavit facts essential to justify his opposition.’” Joe
v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 161 (Tex. 2004) (quoting TEX. R. CIV.
P. 166a(g)). A trial court’s order denying a motion for continuance is reviewed for a clear
abuse of discretion on a case-by-case basis. Id. (citing BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 800 (Tex. 2000). A trial court abuses its discretion when it
acts without reference to any guiding rules or principles. In re National Lloyds Ins., 507
S.W.3d 219, 226 (Tex. 2016) (orig. proceeding) (per curiam) (citing Cire v. Cummings,
134 S.W.3d 835, 838 (Tex. 2004)). Courts consider the following nonexclusive factors
when deciding whether a trial court abused its discretion in denying a motion for
18
continuance seeking additional time to conduct discovery: the length of time the case has
been on file, the materiality and purpose of the discovery sought, and whether the party
seeking the continuance exercised due diligence to obtain the discovery sought. Joe, 145
S.W.3d at 161.
B. Analysis
On June 6, 2017, Wulchin Land filed a “Motion for Continuance of Section IV.D of
Michael Sartori’s First Amended Traditional and No-Evidence Motion for Summary
Judgment,” asking for additional time to develop the record on damages based on “the
benefit of the bargain” it would have received if the Sellers had owned all of the mineral
interests purportedly conveyed in the deeds.
On August 10, 2017, the trial court conducted a pretrial hearing. At that time, there
were a number of motions and other filings pending, including Wulchin Land’s motion to
continue Sartori’s no-evidence motion on damages. During announcements, Wulchin
Land’s counsel identified for the trial court’s consideration two other motions Wulchin
Land had filed: “I have a motion for leave to file an amended petition, along with that a
motion for continuance for the trial setting currently in September . . . .”
Before proceeding with the various hearings, the trial court announced that it had
granted the Schulz children’s motion for summary judgment based on limitations. The
following exchange then ensued between Wulchin Land’s counsel and the court:
[COUNSEL]: Your Honor—
THE COURT: Yes, sir.
[COUNSEL]: — if I might, if the Court granted the summary judgment
of the [Schulz] defendants, then I’m supposing that it
has accepted the argument that case of Cosgrove v.
Cade controls, which would mean that my Plaintiff
19
Wulchin Land Company would have had constructive
notice of the state of title back in 2001. If that’s the
Court’s opinion, then essentially that would be the
same argument that all the other defendants are
making, and it seems to me that rather than doing
anything else in this case, the summary judgments
ought to be granted as to all the defendants so that we
can have a final judgment for the purposes of
appealing that particular ruling.
THE COURT: I can’t disagree, so. . .
....
THE COURT: Will that get us to where we need to be?
[COUNSEL]: Obviously I’m not waiving my argument.
THE COURT: On, no, no. I know that.
[COUNSEL]: But in terms of disposition of the case it would make
sense to me to go ahead if that’s the Court’s thinking
to grant it as to all defendants and let’s go up on appeal
and see if the Court is right as to all—
THE COURT: Is everybody comfortable with what their summary
judgment proof looks like on all their motions?
....
[COUNSEL]: The only thing I would like to do is supplement in
response to their motion some discovery that we took.
We took Mr. Schneider’s deposition, we didn’t quite
finish it, and I would like to be able to respond to that
just for purposes of the appellate record.
THE COURT: Get it all responded to.
After counsel for the Schulz children raised a concern about supplementing the
record after the trial court had already granted summary judgment for his clients, Wulchin
Land’s counsel clarified that he would only be supplementing the record “to respond to
[Schneider’s] motion [for summary judgment].” The trial court agreed, and instructed
Schneider’s counsel not to file a proposed order until Wulchin Land had filed its
20
supplemental response. However, the hearing concluded without any discussion of
Wulchin Land’s motion to continue Sartori’s no-evidence motion for summary judgment
and the trial court granted Sartori’s motion thirteen days later by submission.
Approximately a month after the hearing, on September 18, 2017, Wulchin Land
filed a joint response to Forehand and Schneider’s motions for summary judgment,
attaching 521 pages of evidence. Later that same day, Wulchin Land filed a verified
“Motion for Continuance on No-Evidence Motion for Summary Judgment of Schneider &
McWilliams and Thomas Forehand as to Damages,” mirroring the arguments raised in its
prior motion to continue Sartori’s no-evidence motion. There is no indication in the record
that this motion was set for a hearing. Twenty-four days later, on October 12, 2017, the
trial court granted Forehand and Schneider’s summary judgment motions by submission.
In order to preserve a complaint for appellate review, the record must show that
the complaint was made to the trial court by a timely motion with sufficient specificity and
the trial court expressly or implicitly ruled on the motion or refused to rule on the motion,
and the complaining party objected to the refusal. TEX. R. APP. P. 33.1(a). Wulchin Land
argues that both motions were implicitly overruled when the trial court granted Sartori,
Schneider, and Forehand’s motions for summary judgment. See Williams v. Bank One,
Tex., N.A., 15 S.W.3d 110, 114–15 (Tex. App.—Waco 1999, no pet.) (holding that trial
court implicitly overruled motion for continuance filed two days before summary judgment
hearing by granting summary judgment); but see Hightower v. Baylor Univ. Med. Ctr., 251
S.W.3d 218, 224–25 (Tex. App.—Dallas 2008, pet. struck) (holding that appellant did not
preserve error because he failed to obtain an explicit ruling on motion for continuance);
Dart v. Balaam, 953 S.W.2d 478, 483 (Tex. App.—Fort Worth 1997, no pet.) (same).
21
Merely filing a motion is not sufficient to preserve an error; the movant must bring
the motion to the trial court’s attention, thereby giving the court an opportunity to rule on
the motion. In re Purported Lien or Claim Against Collin Cty. Clerk Taylor, 219 S.W.3d
620, 623 (Tex. App.—Dallas 2007, pet. denied); In re Davidson, 153 S.W.3d 490, 491
(Tex. App.—Amarillo 2004, orig. proceeding); Metzger v. Sebeck, 892 S.W.2d 20, 49
(Tex. App.—Houston [1st Dist.] 1994, writ denied). It is self-evident that a trial court cannot
abuse its discretion if it was not called upon to exercise its discretion in the first instance.
We disagree that Wulchin Land’s motions to continue were implicitly overruled in
this case because there is no indication from the record that the trial court was aware of
their existence. See In re Purported Lien, 219 S.W.3d at 623; In re Davidson, 153 S.W.3d
at 491; Sebeck, 892 S.W.2d at 49. It is always incumbent upon a movant to bring its
motions to the trial court’s attention or risk waiving error, but that is especially true in a
case like this with numerous parties and filings. Having failed to do so, Wulchin Land’s
fourth issue was not preserved for our review.
Accordingly, Wulchin Land’s fourth issue is overruled. Considering Wulchin Land’s
failure to produce any evidence of damages, we affirm the no-evidence summary
judgments rendered on three out of four of its legal malpractice claims. See TEX. R. CIV.
P. 166a(i).
VI. ADDITIONAL PARTIES
By its fifth issue, Wulchin Land complains that the trial court abused its discretion
when it denied Wulchin Land’s motion for leave to add additional parties and to continue
the trial.
22
A. Applicable Law & Standard of Review
When a party seeks to amend its pleading after the date established by a
scheduling order, the movant must seek leave from the court. TEX. R. CIV. P. 63. Under
Rule 63, “a trial court has no discretion to refuse an amendment unless: (1) the opposing
party presents evidence of surprise or prejudice; or (2) the amendment asserts a new
cause of action or defense, and thus is prejudicial on its face, and the opposing party
objects to the amendment.” Grennhalgh v. Serv. Lloyds Ins. Co., 787 S.W.2d 938, 939
(Tex. 1990) (citations omitted).
An amendment that is prejudicial on its face has three defining characteristics:
(1) it asserts a new substantive matter that reshapes the nature of trial itself; (2) the
opposing party could not have anticipated the new matter in light of the development of
the case up to the time the amendment was requested; and (3) the amendment would
detrimentally affect the opposing party’s presentation of its case. Halmos v. Bombardier
Aerospace Corp. 314 S.W.3d 606, 623 (Tex. App.—Dallas 2010, no pet.) (citing Smith
Detective Agency & Nightwatch Serv., Inc. v. Stanley Smith Sec., Inc., 938 S.W.2d 743,
749 (Tex. App.—Dallas 1996, writ denied)).
A trial continuance shall not be granted “except for sufficient cause supported by
affidavit, or by consent of the parties, or by operation of law.” TEX. R. CIV. P. 251. The
grant or denial of a motion for continuance is within the sound discretion of the trial court.
Tenneco, Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996); Villegas v. Carter,
711 S.W.2d 624, 626 (Tex. 1986). The trial court's ruling will not be disturbed unless the
record shows a clear abuse of discretion. Villegas, 711 S.W.2d at 626. A trial court abuses
its discretion when it acts without reference to any guiding rules or principles. In re Nat’l
23
Lloyds Ins., 507 S.W.3d at 226 (citing Cire, 134 S.W.3d at 838).
B. Analysis
On September 3, 2014, Wulchin Land filed its original petition. On February 6,
2017, the trial court entered an agreed scheduling order establishing: a March 1, 2017
deadline to join parties; an April 19, 2017 deadline for Wulchin Land to amend and
supplement its petition; a May 12, 2017 deadline for appellees to amend and supplement
their answers; and a September 25, 2017 trial setting. On May 12, 2017, Schneider and
Forehand both filed amended answers that contained pleas in abatement, identifying the
following as necessary parties: Border Title Group as the designated title company in the
earnest money contracts; Stewart Title Guaranty Company as the underwriter; and HMW
Title Research d/b/a/ Forehand Title Company as the owner of the title plant and title
insurance agent. The pleas requested “that this case be abated pending [their] joinder.”
There is no indication in the record that these pleas were set for hearing or granted by
the trial court.
On July 13, 2017, Wulchin Land filed a “Motion for Leave to File Third Amended
Petition and for Continuance,” citing the pleas as the basis to join the additional parties,
to continue the trial setting, and to enter a new scheduling order that allowed Wulchin
Land to obtain discovery from these new parties. Six days later, without leave from the
trial court, Wulchin Land filed its “Third Amended Original Petition,” adding the three
additional parties and bringing claims against them for fraud and negligent
misrepresentation, both allegedly arising out of the 2001 transactions, and for breaching
the terms of the title policy.
The Schulz children and Sartori objected to Wulchin Land’s motion and late-filed
24
petition, arguing the late addition of these parties was a dilatory tactic because Wulchin
Land had been aware of these parties and their potential liability since filing suit. For
example, they pointed out that Wulchin Land identified Stewart Title Guarantee Company
as a potential party in its original petition as follows:
In the event Stewart Title Company does not elect to defend [Wulchin Land]
against the cloud placed on its’ [sic] title to the property, [Wulchin Land]
intends to join the insurer as an additional party defendant in the action and
seek a declaratory judgment to establish the insurer’s obligation to litigate
that action and/or indemnify the insured for any losses sustained.
Likewise, Border Title Group was identified as the title company issuing the title policy in
the earnest money contracts attached to Wulchin Land’s original petition. Thus, the
Schulz children and Sartori argued that Schneider and Forehand’s pleas could not
constitute “notice” to Wulchin Land that these parties were necessary to the suit. They
also submitted that continuing the trial would prejudice them by causing unnecessary
delay and expense that were attributable solely to Wulchin Land’s failure to exercise due
diligence in prosecuting its claims.
The trial court struck Wulchin Land’s amended petition during the August 10, 2017
hearing. Nevertheless, on November 13, 2017, after the trial court had granted all of the
appellees’ motions for summary judgment and without requesting leave, Wulchin Land
filed its “First Supplemental Petition,” identifying the same three additional parties, as well
as Stewart Information Services Corporation, but only alleging claims for fraud and breach
of the title policy. At a subsequent hearing, the trial court also struck this petition, deeming
it a “nullity.”
We conclude the trial court did not abuse its discretion when it denied Wulchin
Land’s motion for leave because allowing the amendments—particularly, the claims
25
under the title policies—would have reshaped the cause of action, prejudicing appellees
by unnecessarily delaying the trial. See Grennhalgh, 787 S.W.2d at 940. And as we
discussed above, Wulchin Land’s claims for fraud and negligent misrepresentation arising
out of the 2001 transactions are barred by limitations; therefore, allowing Wulchin Land
to bring these time-barred claims against additional parties would have been pointless.
Moreover, as the Schulz children and Sartori demonstrated in their objections, Wulchin
Land had actual notice of its potential claims under the title policies from the inception of
the suit. It would have been reasonable for the trial court to conclude that Wulchin Land’s
late filing was the result of Wulchin Land’s failure to exercise due diligence in the
prosecution of its claims, and therefore sufficient cause did not exist to continue the trial.
See TEX. R. CIV. P. 251. We overrule Wulchin Land’s fifth issue.10
VII. CONCLUSION
The appellees were entitled to summary judgment on all of Wulchin Land’s claims
other than (1) its legal malpractice claim against Sartori based on his alleged failure to
advise Wulchin Land about the title defect, and (2) its breach of general warranty claim
against the Schulz children. We reverse the summary judgment as to those claims and
remand for further proceedings consistent with this opinion. We affirm the remainder of
the trial court’s judgment.
GREGORY T. PERKES
Justice
Delivered and filed the
19th day of March, 2020.
10 Because these first five issues are dispositive, we do not reach Wulchin Land’s sixth issue
concerning evidentiary rulings. See TEX. R. APP. P. 47.1.
26