Harvey L. Schwartz and Kenneth C. Schwartz v. Tom W. Gregg, Jr.

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-09-00686-CV

Harvey L. Schwartz and Kenneth C. Schwartz, Appellants

v.

Tom W. Gregg, Jr., Appellee

FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 391ST JUDICIAL DISTRICT

NO. D-07-0057-C-1, HONORABLE THOMAS J. GOSSETT, JUDGE PRESIDING

M E M O R A N D U M O P I N I O N

Appellants Harvey L. Schwartz (1) and Kenneth C. Schwartz, as next friend of

Harvey L. Schwartz, (2) sued appellee Tom W. Gregg, Harvey's lawyer, for breach of fiduciary duty,

negligent misrepresentation, and statutory and common-law fraud. The suit stemmed from Gregg's

representation of Harvey, Harvey's late wife Jo, and Harvey's step-children in the drafting of a

"ratification deed" purporting to ratify Jo's prior transfer of Harvey's land to his step-children.

Gregg moved for traditional and no-evidence summary judgment on all of Schwartz's claims. The

trial court granted summary judgment without specifying its grounds. In six issues, Schwartz asserts

that the trial court erred in granting summary judgment because: (1) Gregg was not entitled to rely

on the applicable power of attorney's "hold harmless" provision because the real estate transaction

here was not within the powers included in the document; (2) the burden rested with other

defendants not parties to this appeal to prove that the real estate transaction here was fair and

equitable; (3) the court's order erroneously disposed of all claims against Gregg even though such

disposition was unsupported by the grounds of his motion; (4 & 5) the court erroneously

characterized the fiduciary-duty and negligent-misrepresentation claims against Gregg as

professional negligence claims, then erroneously found that the claims were barred by limitations

even though "Gregg did not meet his burden of proving limitations as an affirmative defense"; and

(6) the record contains more than a scintilla of probative evidence with respect to each of the

challenged elements of Schwartz's claims. Concluding that no-evidence summary judgment for

Gregg was proper, we will affirm the trial court's judgment on that basis.

FACTUAL AND PROCEDURAL BACKGROUND Harvey, a farmer by trade, had been disabled since 1986 because of severe bipolar

disorder, diabetes, and other health concerns requiring nursing care. For many years, Harvey's late

wife, Dorothy Jo (who went by "Jo"), a nurse, provided care for him at the family home. In 2002

Jo was diagnosed with pancreatic cancer. As her condition worsened, Jo needed to be hospitalized

and became unable to care for Harvey, so she found a place for him in a local nursing facility.

On her deathbed, acting under the putative authority of a durable power of attorney

by which Harvey had previously made her his attorney in fact, Jo deeded most of Harvey's real

property to Tana Sue Pyssen and Michael Taylor, her children (Harvey's step-children). Jo died the

next day. Because some question existed as to whether any consideration was exchanged for the

land--and whether the power of attorney gave Jo the power to dispose of Harvey's assets without

consideration--Pyssen and Taylor later requested that Gregg draft a "ratification deed" for Harvey

to sign to ratify the transaction.

Schwartz alleges that Pyssen and Taylor conspired with Gregg to gain ownership of

Harvey's farmland for themselves, despite knowing that Harvey intended to leave the land to his

brother Kenneth's son, Kent Schwartz. Specifically, Schwartz alleged that:

[a]fter the death of [Jo], Pyssen began exercising undue influence, dominion and

control over [Harvey] and she took complete control of the financial and domestic

affairs and bank account of [Harvey]. Pyssen at all times was acting on her behalf

and the behalf of her brother, Taylor, in a scheme to obtain the Farms from [Harvey].

Gregg, at the request and as a part of the scheme, presented the Ratification Deed to

[Harvey] on or about July 1, 2004. Pyssen, Taylor and Gregg, therefore, were acting

in concert to exercise undue influence upon [Harvey] to have him deed the Farms to

Pyssen and Taylor.

In 2006 Harvey signed a new power of attorney appointing his brother, Kenneth, as his attorney in

fact. He also revoked his old will, which left the land to Pyssen and Taylor, and executed a new will

leaving his estate to Kent.

Gregg disputes Schwartz's allegations. He asserts that Jo realized that when she died

Harvey would lose her medical benefits, which could force him to sell his assets to pay for nursing

care. Gregg asserts that Jo planned to have Harvey qualify for Medicaid, and that the deeds executed

by Jo--and the ratification deed signed by Harvey--were part of that plan. Gregg drafted all the

deeds in question and provided legal advice to Harvey about how to qualify for Medicaid and the

legal effect of signing the ratification deed. After consulting with Gregg, Harvey signed the

ratification deed.

Kenneth filed this lawsuit on Harvey's behalf seeking rescission of the deeds, the

return of the property, and damages from Pyssen, Taylor, and Jo's estate. Schwartz joined Gregg

via his first amended petition, alleging a breach of fiduciary duty, negligent misrepresentation, and

statutory and common-law fraud stemming from Gregg's representation of Harvey vis-à-vis the

ratification deed.

Gregg moved for traditional and no-evidence summary judgment, asserting that

(1) Harvey signed the ratification deed of his own free will, (2) the power of attorney had given Jo

the authority to transfer Harvey's property anyway, so the later ratification deed had no effect, (3) the

claim for breach of fiduciary duty fails because the power of attorney indemnified Gregg for

reasonably relying on Jo's actions done under the color of its authority and because Gregg did not

receive an improper benefit from his actions, (4) the negligent-misrepresentation claim was barred

by the statute of limitations, (5) insofar as Schwartz's other claims were merely "fractured

professional negligence" claims, they were barred by the two-year statute of limitations, and (6) each

of the claims fails because Schwartz failed to present more than a scintilla of evidence on the

challenged elements of his claims. The trial court granted Gregg's summary-judgment motion

without specifying the grounds therefor and severed Schwartz's claims against Gregg, making the

summary-judgment order final and appealable.

STANDARD OF REVIEW

Concluding that the trial court properly granted Gregg's no-evidence summary-

judgment motion, we limit our discussion of the standard of review accordingly.

"To prevail on a no-evidence summary-judgment motion, a movant must allege that

there is no evidence of an essential element of the adverse party's claim." Southwest Elec. Power

Co. v. Grant , 73 S.W.3d 211, 215 (Tex. 2002) (citing Tex. R. Civ. P. 166a(i)). The burden then

shifts to the nonmovant to produce more than a scintilla of probative evidence to support each

challenged element of its claims. Forbes, Inc. v. Granada Biosciences , 124 S.W.3d 167, 172 (Tex.

2003). More than a scintilla of evidence exists when reasonable and fair-minded people could differ

in their conclusions based on the evidence in the record. Id. ; see also Ford Motor Co. v. Ridgway ,

135 S.W.3d 598, 601 (Tex. 2004) ("'[W]hen the evidence offered to prove a vital fact is so weak as

to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than

a scintilla and, in legal effect, is no evidence.'" (quoting Kindred v. Con/Chem, Inc. , 650 S.W.2d 61,

63 (Tex. 1983))). "Both direct and circumstantial evidence may be used to establish any material

fact." Ford Motor Co. , 135 S.W.3d at 601 . "To raise a genuine issue of material fact, however, the

evidence must transcend mere suspicion. . . . Evidence that is so slight as to make any inference a

guess is in legal effect no evidence." Id. We review "the evidence . . . in the light most favorable

to the non-movant." Id.

DISCUSSION

In his sixth issue, Schwartz asserts that the trial court erred in granting Gregg's

no-evidence motion for summary judgment because the record contains more than a scintilla of

evidence as to each challenged element of his claims. Schwartz brought four claims against Gregg:

(1) negligent misrepresentation, (2) breach of fiduciary duty, (3) common-law fraud, and (4) fraud

in a real estate transaction, see Tex. Bus. & Com. Code Ann. § 27.01 (West 2009). We will analyze

the evidence for each claim in turn.

Negligent Misrepresentation

The elements of negligent misrepresentation are:

(1) the representation is made by a defendant in the course of his business, or in a

transaction in which he has a pecuniary interest; (2) the defendant supplies "false

information" for the guidance of others in their business; (3) the defendant did not

exercise reasonable care or competence in obtaining or communicating the

information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on

the representation.

Federal Land Bank Ass'n v. Sloane , 825 S.W.2d 439, 442 (Tex. 1991). (3)

In his no-evidence motion for summary judgment, Gregg asserted that there was no

evidence that (1) Gregg provided false information to Harvey, (2) Gregg failed to exercise reasonable

care or competence in obtaining or communicating information to Harvey, or (3) Harvey was harmed

by any alleged misrepresentation.

Schwartz asserts that Gregg provided the following allegedly false information to

Harvey: (1) "the prior Gift Deeds had been executed and were effective"; (2) "the only way to be

able to keep the farms in the family" was for Harvey to sign the ratification deed; (3) the transfer of

Harvey's land was being done for his benefit and "that it was the only way for him to continue to

receive long term care by way of Medicaid"; and (4) "the Ratification Deed was to finish a plan his

wife had put together" to ensure he would qualify for Medicaid.

As evidence in support of his allegations, Schwartz attached portions of Pyssen's,

Gregg's, and Kenneth's depositions, as well as Kenneth's affidavit. Gregg objected to several

statements in Kenneth's affidavit as hearsay. The trial court sustained Gregg's objections and struck

the complained-of portions. Schwartz does not appeal the court's evidentiary rulings; therefore, we

cannot consider the stricken portions in our no-evidence review. See Trudy's Tex. Star, Inc. v. City

of Austin , 307 S.W.3d 894 , 898 n.2 (Tex. App.--Austin 2010, no pet.) (evidence excluded by trial

court on evidentiary grounds and not appealed is not part of summary-judgment record).

As evidence for the alleged misrepresentation regarding the effectiveness of the prior

warranty deeds, Schwartz points to the following passages in Gregg's deposition transcript:

Q. Well, in the course of that conversation [with Harvey] did you tell him that

he didn't have to sign [the ratification deed]?

A. Sure, I did. I said, "If you don't want this to happen, Harvey, you don't have

to sign this."

Q. And at the same time you said it didn't make any difference if he did or

didn't?

A. No.

Q. Okay.

A. He didn't say that.

Q. No. I'm saying did you say that? Otherwise, when you told him he didn't

have to sign--

A. No. He didn't have to sign, but if he--I explained to him that the signing was

a reaffirmation of the plan to try to get him on Medicaid, which he was sure

interested in.

Q. Well, did he think that land was going to come back to him?

A. No. I explained to him that it could not come back to him as long as he was

on Medicaid.

. . . .

Q. To shorten this a little bit, did you explain to Harvey what would happen if

he didn't sign the ratification?

A. I told him that the purpose of all of this was to get him qualified for

Medicaid. What was your question?

Q. If you told him what would happen if he did not sign. Did you tell him what

would happen if he did not sign?

A. I don't know what would have happened if he did not sign it, so I probably

didn't.

. . . .

Q. But in any event, you did not tell [Harvey] what would happen if he didn't

sign?

A. I don't recall in that regard.

Gregg's testimony above amounts to no more than a scintilla of evidence that Gregg made any

representation at all--false or true--with respect to the effectiveness of the four warranty deeds. At

most, Gregg's testimony establishes that he does not remember if he told Harvey anything about the

deeds' effectiveness. Without more, such testimony would not allow a reasonable fact finder to

conclude that Gregg did, indeed, make such a statement to Harvey. Accordingly, we conclude that

there is no evidence that Gregg told Harvey that "the prior Gift Deeds had been executed and

were effective."

Next, we examine the evidence as to the second allegation--that Gregg told Harvey

or implied that "the only way to be able to keep the farms in the family" was to sign the ratification

deed. As evidence, Schwartz points to the following excerpt from Gregg's deposition in which

Gregg testified about the conversation he had with Harvey just before Harvey signed the

ratification deed:

A. I read the whole [ratification deed] to him and I said, "Now, do you

understand what Jo has done and do you agree with that or do you want to

take that back and cancel it?"

"No, I don't want to cancel it."

"All right. Do you want to sign this yourself, this ratification of what Jo did,

this approval of what Jo did, and sign it as a deed to [Taylor] and [Pyssen]?"

He thought about that a little bit and he said, "It's always been my intention

that they have that property."

And I said, "Well, what you're doing is you're just speeding that up a little

bit because it was your intention and your will--" Because I had read his will

when I did that inventory of that box.

Q. When you did what inventory?

A. The inventory of the [couple's] safety deposit box [after Jo's death].

Q. Okay.

A. I said, "I understand. I understand that, and what you are doing is you're

speeding it up now, to do it now."

And he thought about that a little bit and he said, "Well, my only concern is

that they might sell that land."

And I said, "Well, Harvey, they might have the right" -- Or they would have

the right if they owned it to sell it, "But to my knowledge no one has

ever mentioned the fact of selling that property. They want to keep it in

the family."

"Okay." So he signed it. I notarized it.

Viewed in the light most favorable to Schwartz, this testimony represents no more than a scintilla

of evidence that Gregg represented to Harvey that "the only way to be able to keep the farms in the

family" was to sign the ratification deed. In fact, this testimony supports the opposite

conclusion--that Gregg specifically told Harvey that Pyssen and Taylor could sell the land to

someone outside the family if Harvey signed the ratification deed. Consequently, there is no

evidence for the first element of the negligent-misrepresentation test as to this alleged statement.

We now consider the third alleged misrepresentation--that Gregg told Harvey that

the transfer of Harvey's land was being done for his benefit "and impliedly advis[ed] that it was the

only way for him to continue to receive long term care by way of Medicaid." Schwartz again cites

Gregg's deposition as evidence. We agree that Gregg's testimony creates, at least, a fact question

as to whether Gregg told Harvey that (1) the transfer of Harvey's land was part of a plan to qualify

him for Medicaid, and (2) to qualify for Medicaid Harvey had to divest himself of his land. There

is no evidence, however, that these representations were false.

Schwartz asserts that "there is no testimony by [Gregg] showing that he talked to

[Harvey] about any alternative way to pay for his care and this is supported by [Kenneth]'s

affidavit." He argues that this lack of testimony, coupled with Gregg's representations to Harvey

about how to qualify for Medicaid, raises a fact issue about the statement's truth. We disagree.

First, portions of Kenneth's affidavit were stricken below and, therefore, are not part the record for

our review. The non-stricken portions do provide some evidence that Harvey had alternative means

to pay for his medical care without resorting to Medicaid. That evidence, however, is not probative

of whether Gregg's statements to Harvey about how to qualify for Medicaid were false. The

remainder of the summary-judgment evidence, including Gregg's deposition, is silent as to whether

Gregg did or did not inquire about or advise Harvey on alternative ways to pay for his care. Thus,

there is no evidence on this point. Second, even assuming there was some evidence about whether

Gregg assessed Harvey's ability to pay for his medical care without Medicaid, Gregg's failure to

inquire if Harvey had other ways to pay for his long-term care does not give rise to a reasonable

inference that Gregg negligently misrepresented the conditions necessary to qualify for Medicaid or

that the transfer of Harvey's land was not part of a plan to meet those conditions. Accordingly,

there is no evidence with respect to the first element of the negligent-misrepresentation test on this

alleged misrepresentation.

Finally, we turn to the fourth alleged misrepresentation--that Gregg told Harvey that

"the Ratification Deed was to finish a plan his wife had put together" to ensure he would qualify for

Medicaid. Gregg admitted in his deposition that he told Harvey that the ratification deed was part

of a plan that Jo had initiated after consulting Laura Swann, an elder law specialist, to ensure that

Harvey became Medicaid eligible. There is no evidence, however, that this representation was false.

As evidence that this statement was false, Schwartz points to allegedly conflicting

testimony in the depositions of Pyssen and Gregg regarding whether Jo ever consulted Swann.

Schwartz alleges that "[Gregg] testifies in his deposition . . . that he told [Harvey], to get him to sign

the Ratification deed, that [Jo] talked to Laura Swann . . . and she advised [Jo] to spend down

[Harvey's] money to qualify for medicade [sic]." Schwartz claims that Jo never actually met

Laura Swann, meaning Gregg's representations to Harvey were false. He argues that

[t]he falsity of these representations by [Gregg] are shown by [Pyssen's] testimony

in her deposition . . . that she had gone to [Swann] for the first time after her mother's

death. Pyssen further testified . . . that she found [Swann] in the yellow pages on her

own and that her mother did not tell her about [Swann]. Therefore, the representation

that this was a plan of [Jo's that Harvey] should continue was false.

Pyssen indeed testified that she first sought Swann's counsel after her mother's death.

Such testimony, however, is only probative of the fact that Pyssen did not consult with Swann while

Jo was alive. It does not give rise to a reasonable inference that Jo either did or did not consult with

Swann before her death. In effect, Schwartz asks us to infer that Jo did not consult with Swann

because neither Jo nor Swann revealed to Pyssen that Jo had consulted with Swann. This is not,

however, an inference that a reasonable fact-finder could make based on the evidence presented. The

fact that Jo did not tell Pyssen about her consultation with Swann merely creates a suspicion that

such a consultation did not in fact take place. Likewise, Swann's failure to tell Pyssen that she

had previously counseled Jo about Harvey's situation gives rise only to a suspicion that

Swann had not counseled Jo, especially in light of an attorney's duty to safeguard the confidences

of her clients. See, e.g. , Tex. Disciplinary R. Prof'l Conduct 1.05(b)(1); In re Grand Jury Subpoena ,

926 F.2d 1423 , 1431 (5th Cir. 1991). We have no testimony from Swann, nor do we have any

documentary evidence--such as receipts or invoices--that show whether or not Jo was Swann's

client. Viewing the evidence as a whole and in the light most favorable to Schwartz, we conclude

that he has presented no more than a scintilla of probative evidence to support his claim that this

statement was false.

Furthermore, there is no evidence that Harvey was harmed as a result of any of the

alleged misrepresentations. The only evidence submitted by Schwartz on this point was Gregg's

testimony, which, as quoted and discussed above, tends to suggest that Harvey was made better off

and not harmed. Although Schwartz points to evidence in Kenneth's affidavit arguably showing that

Harvey was harmed, the portions of the affidavit tending to support that assertion were stricken as

hearsay. Additionally, we do not think that, as Schwartz implies, it is self-evident that Harvey

suffered harm here. Although Harvey was left with few assets after the transfer, the only evidence

before us suggests that Harvey (1) wanted to become Medicaid-eligible, (2) knew that giving away

his land would have helped him to do so, (3) gave his land to the same people who would have

inherited the land if he had died, and (4) eventually did qualify for Medicaid. That there may have

been other--perhaps better--ways to achieve the same goals does not tend to suggest that Harvey

was harmed by choosing this option.

Because we conclude that Schwartz presented no evidence that the alleged

misrepresentations either occurred or were false, or that Harvey was harmed by any of Gregg's

representations, the trial court did not err when it rendered summary judgment for Gregg on

Schwartz's negligent-misrepresentation claim.

Breach of Fiduciary Duty

We now turn to Schwartz's breach-of-fiduciary-duty claim against Gregg. The

elements of breach of fiduciary duty are: the existence of a fiduciary relationship, and a breach of

duty by the fiduciary that causes damages to the client or improper benefit to the fiduciary.

Burrow v. Arce , 997 S.W.2d 229, 237 (Tex. 1999); see also Beck v. Law Offices of

Edwin J. (Ted) Terry, Jr., P.C. , 284 S.W.3d 416, 429 (Tex. App.--Austin 2009, no pet . ); Floyd

v. Hefner , 556 F. Supp. 2d 617, 661 (S.D. Tex. 2008).

In his no-evidence motion for summary judgment, Gregg asserted that there was no

evidence as to elements two and three--i.e., that there was no evidence of breach and no evidence

either that Harvey was damaged or that Gregg was benefitted. Gregg admits he was Harvey's

attorney at the time the alleged breach of fiduciary duty occurred; thus, the first element of the test

is not in dispute. See Willis v. Maverick , 760 S.W.2d 642, 645 (Tex. 1988) ("A fiduciary

relationship exists between attorney and client.").

In his live pleading, Schwartz alleged that Gregg breached his fiduciary duty to

Harvey by acting as a co-conspirator with Pyssen and Taylor in a scheme to defraud Harvey of his

farm land. He also alleged that Gregg lied to Harvey, failed to disclose a conflict of interest, and

abused Harvey's trust to induce him to sign the ratification deed. Specifically, Schwartz alleged:

Gregg failed to adequately advise and disclose to [Harvey] his legal options

concerning said Ratification Deed. Gregg further failed to advise [Harvey] of a

conflict of interest he had in that he represented the proposed grantees, [Taylor and

Pyssen,] under the Ratification Deed and was related to them through his wife.

Gregg did not advise [Harvey] to obtain independent legal counsel. Gregg breached

his fiduciary duty by participating in the preparation of and procuring the execution

of the Ratification Deed. The execution of the Ratification Deed was to the

detriment of [Harvey] and has damaged [Harvey] by depriving him of his

entire interest in the Farms and [Schwartz] seek[s] recovery for said damages

against Gregg.

As evidence of breach, Schwartz asserts that there was an inherent, undisclosed

conflict of interest in Gregg's representing both Harvey and Pyssen. Schwartz asserts that

[t]he conflict clearly arises from the fact that [Harvey] is being asked to transfer all

of his farm property to his two stepchildren . . . and this would forever take this

property away from him. . . . A conflict clearly exists because Gregg represented two

parties on opposite sides of a deed involving a decision to transfer all of one parties'

[sic] property to the other.

Schwartz also asserts that Gregg's failure to advise Harvey to obtain independent counsel is evidence

of a conflict of interest. Schwartz argues that Harvey's concern about whether Pyssen and Taylor

could subsequently sell the land and the fact that Harvey was reluctant to sign the ratification deed

is evidence that Pyssen's and Harvey's interests were in conflict.

Even assuming that Gregg breached his fiduciary duty to Harvey, however, Schwartz

has failed to present more than a scintilla of evidence either (1) that Harvey suffered damages, or

(2) that Gregg received any improper benefit from the representation. The only evidence as to

Harvey's wishes comes from Gregg's deposition. As quoted above, Gregg's uncontroverted

testimony was that Harvey intended for Pyssen and Taylor to have his land, that Harvey wanted to

become Medicaid eligible, and that he understood that giving away his land would help to

accomplish that goal. Furthermore, Gregg testified that Harvey's will at the time named Pyssen and

Taylor as beneficiaries of Harvey's estate should Jo predecease Harvey. There is no evidence to the

contrary about Harvey's wishes. Consequently, Schwartz has not presented more than a scintilla of

evidence that Harvey was harmed by Gregg's breach, if any, of his fiduciary duty.

In support of his assertion that Harvey was harmed, Schwartz notes that Gregg

testified that Harvey was reluctant to sign the ratification deed because he was concerned that Pyssen

and Taylor would sell the land. Schwartz cites to the following testimony in Gregg's deposition:

Q. And do I interpret this same letter . . . of July 22, [2004] to [Pyssen] where

it says Harvey was somewhat reluctant to sign the deed at first--Have I

quoted that correctly?

A. Yes. Because like I said in the letter, he was concerned that perhaps [Pyssen

and Taylor] would just turn around and sell [the land].

This exchange is not probative of whether Harvey was harmed by signing the ratification deed. It

tends to establish the fact that Harvey was concerned, around July 22, 2004, about how Pyssen and

Taylor might use his land in the future if he chose to give it to them. The existence of such a

concern, however, is not enough evidence for a reasonable, fair-minded person to decide that Harvey

was harmed by later signing the ratification deed.

Schwartz also asserts that Gregg received an improper benefit from representing

Harvey because of his "family" relationship to Pyssen. Pyssen is Gregg's wife's nephew's wife.

Schwartz argues that, simply by virtue of this relationship, Gregg was improperly enriched when

Pyssen became half-owner of Harvey's land. We think that evidence of Gregg's distant relationship

to Pyssen creates no more than a suspicion that Gregg was improperly enriched here, which is no

more than a scintilla of evidence. See Ford Motor Co. , 135 S.W.3d at 601 ("'[W]hen the evidence

offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of

its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence.'" (quoting

Kindred , 650 S.W.2d at 63 )). Schwartz points to no other evidence that would tend to show that

Gregg was improperly enriched.

Having concluded that Schwartz presented no evidence with respect to the

damages/enrichment element of his fiduciary-duty claim, we hold that the trial court did not err in

granting summary judgment for Gregg on that claim.

Common-Law Fraud and Statutory Fraud in a Real Estate Transaction

Finally, we examine the evidence with respect to Schwartz's two fraud claims. The

elements of common-law fraud are: (1) a material misrepresentation, (2) which was false, (3) which

was either known to be false when made or was asserted without knowledge of its truth, (4) which

was intended to be acted upon, (5) which was relied upon, and (6) which caused injury. Formosa

Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc. , 960 S.W.2d 41, 47 (Tex. 1998). The

elements of statutory fraud in a real estate transaction are found in section 27.01 of the business and

commerce code:

(a) Fraud in a transaction involving real estate or stock in a corporation or joint

stock company consists of a

(1) false representation of a past or existing material fact, when the false

representation is

(A) made to a person for the purpose of inducing that person to

enter into a contract; and

(B) relied on by that person in entering into that contract; or

(2) false promise to do an act, when the false promise is

(A) material;

(B) made with the intention of not fulfilling it;

(C) made to a person for the purpose of inducing that person to

enter into a contract; and

(D) relied on by that person in entering into that contract.

Tex. Bus. & Com. Code Ann. § 27.01 (West 2009).

Gregg asserted in his no-evidence motion for summary judgment that there is no

evidence that (1) Gregg made any false representations or made false statements with reckless

disregard for their truth, (2) Harvey reasonably relied on the allegedly false statements, (3) there was

a conspiracy or fraudulent scheme, and (4) Harvey was harmed by any alleged false representations.

Schwartz asserts that "[t]he false representations to support a finding of a fraudulent

scheme are recited above concerning negligent misrepresentations immediately above." Because we

have held that there is no evidence that the alleged representations were made or that they were false,

we need not discuss them again here. For the reasons stated above, we hold that there is no evidence

to support Schwartz's claims for fraud. Accordingly, we overrule Schwartz's sixth issue.

Because we hold that the trial court did not err in granting Gregg's no-evidence

motion for summary judgment on all of Schwartz's claims, we need not reach his other issues

on appeal.

CONCLUSION

Having determined that the trial court did not err in granting summary judgment in

favor of Gregg, we affirm the trial court's order.

__________________________________________

J. Woodfin Jones, Chief Justice

Before Chief Justice Jones, Justices Pemberton and Waldrop

Affirmed

Filed: July 28, 2010

1. Harvey Schwartz died while this appeal was pending. His brother, Kenneth Schwartz, was

appointed temporary administrator of Harvey's estate.

2. We will use "Schwartz" to refer to the appellant, Kenneth C. Schwartz, in his roles as next

friend for Harvey and as administrator of Harvey's estate. For clarity, we will otherwise refer to

Harvey, Kenneth, and Harvey's late wife, Jo, by their first names.

3. In his traditional motion for summary judgment, Gregg argued that Schwartz's claim for

negligent misrepresentation was merely a "fractured" professional negligence claim. Schwartz

asserts that he can maintain a separate cause of action for negligent misrepresentation. Because

Gregg's alleged misrepresentations are within the scope of his professional representation of

Schwartz, it appears doubtful that Schwartz could maintain a separate negligent-misrepresentation

claim. See McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests , 991 S.W.2d 787, 792

(Tex. 1999) ("The theory of negligent misrepresentation permits plaintiffs who are not parties to a

contract for professional services to recover from the contracting professionals." (Emphasis

added.)). Because we conclude that the trial court did not err in granting Gregg's no-evidence

summary judgment on this claim, however, we need not decide whether Schwartz's

negligent-misrepresentation claim was really a claim for professional negligence.