Linda Jurek v. Gary E. Kivell

Opinion issued April 21, 2011

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-10-00040-CV

———————————

LINDA JUREK , Appellant

V.

GARY KIVELL , Appellee

On Appeal from the Probate Court

Galveston County, Texas

Trial Court Case No. 65790B

MEMORANDUM OPINION

This appeal arises out of a

long-running family dispute in which Linda Jurek fought over ownership of a

home with her father, Joseph Forrest, in three separate lawsuits. In the first suit, Jurek entered into a

mediation agreement with Forrest in which she agreed to a settle her

claims. Jurek later brought this suit

alleging that Forrest and his lawyer, Gary Kivell, fraudulently induced her to

sign the mediation agreement by failing to disclose Forrest’s existing

will. The trial court granted Kivell’s

summary-judgment motion and severed the claims against him. In three issues, Jurek contends that the trial

court erred in granting summary judgment because she presented a scintilla of

evidence to support her fraud claim, Kivell did not meet his burden of proof on

his affirmative defenses, and res judicata does not bar the action.

We affirm.

Background

Joseph Forrest conveyed a home to

his daughter, Linda Jurek, several decades ago, but the parties later disputed

the conveyance. Forrest sued Jurek over

ownership of the home and the court ordered them to mediation. Forrest attended the mediation in 1999 along

with his attorney, Gary Kivell. At the

mediation, Jurek agreed to surrender fee simple in the home and pay for the

maintanence and property taxes in return for a life estate on the

property. The mediation agreement also

included a promise by Forrest to give Jurek a one-fourth future interest in the

home upon his death. The mediation

agreement did not require Forrest to provide any proof that a will existed or

would be prepared conveying a one-fourth future interest in the home to Jurek

upon his death. The trial court entered

a “Final Decree” incorporating the terms of the mediation into a judgment and

declaring that the mediation agreement was “binding upon the parties.”

Forrest subsequently sued Jurek a

second time seeking reimbursement of insurance he paid on the home and

contending that she had not properly maintained the property as a life tenant

and had forfeited her right to her life estate in the property. Based on the final judgment, it appears that

Jurek filed a counterclaim in which she alleged that she was fraudulently

induced to enter into the 1999 mediation settlement agreement. The case was tried to the court. The court found for Jurek on all of Forrest’s

claims, including that she had not forfeited her life estate, and awarded her

attorneys’ fees. The court also found

that Jurek was not fraudulently induced to enter into the mediated settlement

agreement.

In 2005, Jurek filed this third lawsuit against her two sisters, both in

their individual capacity and as guardians of their father who had been

declared incapacitated. She alleged that

Forrest and her sisters had conveyed the home to one of the sisters in

violation of the mediation agreement and that such actions constituted fraud

and breach of contract. When Forrest

died in 2008, Jurek learned that Kivell had prepared a will approximately one

year before the mediation that left the entire remainder of the estate to her

sisters without providing for her one-fourth future interest in the home as mandated

by the mediation agreement. She amended

her lawsuit to assert that the mediated settlement agreement superseded and

invalidated the will, or alternatively that Forrest intentionally made a false

promise to induce her to sign the agreement without any intent to keep his

promise to convey her a one-fourth future interest. She also sued Kivell claiming that he had not

disclosed the existence or contents of the will during the mediation.

Kivell moved for summary judgment

on both traditional and no-evidence grounds including standing, res judicata,

statute of limitations, no duty to disclose, and no evidence of fraudulent

inducement, causation, or damages. As

summary-judgment evidence, Kivell attached his own affidavit and the final

decree and judgment from the prior two lawsuits between Jurek and Forrest. In his affidavit, Kivell stated that he was

not authorized at the mediation to disclose anything about his client’s

will. At the time he also had no memory

of the will’s contents or any knowledge of whether Forrest had revoked his will

or intended to revoke his will in the future.

In response, Jurek argued that Kivell failed to disclose that

Forrest’s will did not leave her the promised one-fourth future interest in the

estate, making Forrest’s promise at the mediation to convey her an interest

false at the time it was made. She also

claimed that because Kivell prepared the will, he knew that his client’s

promise to make the conveyance to her was fraudulent. Jurek

filed an affidavit in which she stated that she did not know of her father’s

will before the mediation, that Kivell concealed the will during the mediation,

and that her father went to the mediation “with intent not to negotiate

honestly.” She also filed an affidavit

from her lawyer who attended the mediation stating that the terms of Forrest’s

will were a “stumbling block to settlement unless the settlement specifically

provided for [Forrest] to make a will guaranteeing Mrs. Jurek’s springing

one-fourth interest.” Jurek’s attorney also stated that Kivell never disclosed

the existence of the will during the mediation.

The court granted summary judgment

without specifying whether it was granting the no-evidence motion or the

traditional summary-judgment motion.

Jurek filed a motion for new trial, which was overruled by operation of

law. The court subsequently severed Jurek’s

claims against Kivell, making the summary judgment final. Jurek timely filed a notice of appeal.

Summary Judgment Standard of Review

We review a trial court’s summary judgment de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005); Provident

Life Accid. Ins. Co. v. Knott ,

128 S.W.3d 211, 215 (Tex. 2003). If a

trial court grants summary judgment without specifying the grounds for granting

the motion, we must uphold the trial court’s judgment if any of the grounds are

meritorious. Beverick v. Koch Power, Inc. , 186 S.W.3d 145, 148 (Tex.

App.—Houston [1st Dist.] 2005, pet. denied).

A party seeking summary judgment may combine in a single motion a request

for summary judgment under the no-evidence standard with a request under the

traditional summary judgment standard. Binur v. Jacobo , 135 S.W.3d 646, 650

(Tex. 2004). When

a party has filed both a traditional and no-evidence summary-judgment motion

and the order does not specify which motion was granted, we first review the propriety

of the summary judgment under the no-evidence standard. See Tex. R. Civ. P. 166a(i) ; s ee

Ford Motor Co. v. Ridgway , 135 S.W.3d 598, 600 (Tex. 2004) . If the no-evidence summary judgment was

properly granted, we need not reach arguments under the traditional

motion for summary judgment. See Ford

Motor , 135 S.W.3d at 600 .

While it is not a model of clarity, we conclude

that Kivell’s motion was both a no-evidence and a traditional summary-judgment

motion because it relies on evidence attached to the motion, seeks summary

judgment based on a number of affirmative defenses, and broadly states that it

is seeking summary judgment under Texas Rule of Civil Procedure 166a, “ including 166a(i).” (emphasis added); see Lewis

v. Nolan , No. 01-04-00865-CV, 2007 WL 926659 , at * 3 (Tex. App.—Houston

[1st Dist.] Mar. 29, 2007, no pet.) (concluding that summary-judgment motion

was both no-evidence summary-judgment motion and traditional summary-judgment

motion). [1]

To prevail on a no-evidence motion for summary judgment, the

movant must establish that there is no evidence to support an essential element

of the nonmovant’s claim on which the nonmovant would have the burden of proof

at trial. See Tex. R. Civ. P.

166a(i); Hahn v. Love , 321 S.W.3d

517 , 523–24 (Tex. App.—Houston [1 st Dist.] 2009, pet. denied). The burden then shifts to the nonmovant to

present evidence raising a genuine issue of material fact as to each of the

elements specified in the motion. Mack

Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006); Hahn , 321 S.W.3d at 524 .

In a traditional summary-judgment motion, the movant has the burden to show that no

genuine issue of material fact exists and that the trial court should grant

judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat

Marwick v. Harrison Cnty. Hous. Fin. Corp. , 988 S.W.2d 746, 748 (Tex. 1999). A defendant moving for traditional summary

judgment must conclusively negate at least one essential element of each of the

plaintiff’s causes of action or conclusively establish each element of an

affirmative defense. Sci. Spectrum,

Inc. v. Martinez , 941

S.W.2d 910, 911 (Tex. 1997). The motion

must state the specific grounds relied upon for summary judgment. Tex.

R. Civ. P. 166a(c) . When reviewing a summary-judgment

motion, we take as true all evidence favorable to the nonmovant, and indulge

every reasonable inference and resolve any doubts in the nonmovant’s

favor. Valence Operating , 164 S.W.3d at 661 ; Provident

Life Accid. Ins. , 128

S.W.3d at 215 . If

a trial court grants summary judgment without specifying the grounds for

granting the motion, we must uphold the trial court’s judgment if any of the

grounds are meritorious. Beverick v. Koch Power, Inc. , 186 S.W.3d

145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

Fraud by Nondisclosure

In

her first issue, Jurek claims that the trial court erred in granting summary

judgment on her fraud claim because she presented sufficient evidence to raise

a fact issue on each of the elements of fraud by nondisclosure.

The

elements of fraud by nondisclosure, or fraud by omission, are (1) the defendant

failed to disclose facts to the plaintiff when the defendant had a duty to

disclose such facts; (2) the facts were material; (3) the defendant knew of the

facts; (4) the defendant knew that the plaintiff was ignorant of the facts and

did not have an equal opportunity to discover the truth; (5) the defendant was

deliberately silent and failed to disclose the facts with the intent to induce

the plaintiff to take some action; and (6) the plaintiff suffered injury as a

result of acting without knowledge of the undisclosed facts. See Horizon Shipbuilding, Inc. v. Blyn II

Holding, LLC , 324 S.W.3d 840, 850 (Tex. App.—Houston [14th Dist.] 2010, no

pet.); BP Am. Prod. Co. v. Marshall , 288 S.W.3d 430, 441 (Tex. App.—San

Antonio 2008, pet. granted). In

addition, the plaintiff must prove that the plaintiff relied on the omission or

concealment. See Schlumberger Tech. Corp. v. Swanson , 959 S.W.2d 171, 181

(Tex. 1997); Horizon Shipbuilding, Inc. , 324 S.W.3d at 850 ; Worldwide

Asset Purchasing, L.L.C. v. Rent-A-Ctr. E., Inc. , 290 S.W.3d 554, 566 (Tex.

App.—Dallas 2009, no pet.).

Kivell’s

no-evidence motion challenged specific elements of Jurek’s fraud by

nondisclosure claim by asserting that he had no duty to disclose the existence

and contents of the will, and there was no evidence that his conduct

fraudulently induced her to settle or that his conduct caused her any damages.

Duty to Disclose

Jurek argues that Kivell had a duty to disclose the existence

and contents of the will under the common law cause of action for fraud by

nondisclosure and the state bar’s disciplinary rules for professional

conduct. Kivell responds that he had no

duty to disclose, that any knowledge he had of the will was privileged, and he

did not have his client’s consent to disclose the will’s existence or terms.

To recover on her fraudulent non-disclosure claim, Jurek must

show that Kivell owed a duty to speak or disclose information. Whether a duty to disclose exists is a

question of law. Bradford v. Vento , 48 S.W.3d 749, 755 (Tex. 2001). “When the particular circumstances impose on a person a duty to speak and

he deliberately remains silent, his silence is equivalent to a false representation.” Spoljaric v. Percival Tours, Inc. , 708

S.W.2d 432, 435 (Tex. 1986); see also McCarthy v. Wani Venture, A.S. , 251 S.W.3d 573, 585 (Tex. App.—Houston

[1st Dist.] 2007, pet. denied).

A. Third Party Suits Against

Attorneys

Generally, the duties that arise from the attorney-client

relationship are owed solely to the client and those in privity with the attorney,

not to third persons such as adverse parties. [2] See Brown v. Green , 302 S.W.3d 1, 16

(Tex. App.—Houston [14th Dist.] 2009, no pet.) (stating that “[a]n attorney

only owes a duty of care to his clients and not to third parties, even if they

may have been damaged by the attorney’s representation of the client”); White

v. Bayless , 32 S.W.3d 271 , 275–76 (Tex. App.—San Antonio 2000, pet. denied)

(affirming summary judgment because attorney owed no duty to adverse party); Mitchell v. Chapman , 10 S.W.3d 810, 811

(Tex. App.—Dallas 2000, pet. denied ) (affirming summary judgment in

favor of defendant in “a suit filed by an unsuccessful litigant against an

opposing attorney,” on grounds that relationship between lawyer and third party

“was clearly adversarial” and lawyer “owed no legal duty” to the third party). More specifically,

“[u]nder Texas law, attorneys cannot be held liable for wrongful litigation

conduct” toward third parties. Renfroe v. Jones & Assocs. , 947 S.W.2d 285, 288 (Tex. App.—Fort

Worth 1997, writ denied) ; s ee also Chu v. Hong ,

249 S.W.3d 441 , 444 & n.19 (Tex. 2008) (stating that court was “ especially reticent to open the door” to claims against

an opposing party’s attorney and that “ fraud actions cannot be brought against an

opposing attorney in litigation as reliance in those circumstances is

unreasonable”); Alpert

v. Crain, Caton & James, P.C. , 178 S.W.3d 398, 405

(Tex. App.—Houston [1st Dist.] 2005, pet. denied) (attorney qualified immunity bars lawsuits

against opposing counsel “even if the conduct is wrongful in the context of the

underlying lawsuit”) .

This rule of attorney protection exists because the third party has not

retained the attorney, the attorney’s services were not rendered to the third

party, no privity of contract exists between the third party and the attorney,

and the attorney’s duties are owed only to the client. Aplert , 178 S.W.3d at 405 ; White , 32 S.W.3d at 275–76. Allowing claims against opposing counsel for

litigation misconduct undercuts an attorney’s duty to zealously represent his

clients within the bounds of the law. Alpert , 178 S.W.3d at 405 ; see also Bradt v. West , 892 S.W.2d 56 ,

71–72 (Tex. App.—Houston [1st Dist.] 1994, writ denied) (stating that public

has interest in “loyal, faithful and aggressive representation by the legal

profession”). In fulfilling this duty,

an attorney has the right to pursue legal rights that he deems necessary and

proper, without being subject to liability.

Bradt , 892 S.W.2d at 71 . If attorneys could be held liable to opposing

parties for statements made or actions taken in the course of representing

their clients, they would be forced to balance their own potential exposure against

their clients’ best interests. Id. ; see

also Chapman Children’s Trust v. Porter & Hedges, L.L.P. , 32 S.W.3d

429, 440 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (noting that

attorney’s concern of being sued “would favor tentative rather than zealous

representation of the clients” and allowing such lawsuits “would dilute the

vigor with which Texas attorneys represents their clients and would not be in

the best interests of justice.”).

Another

reason that a non-client generally has no claim against an opposing lawyer for

fraud during litigation is because a party cannot justifiably rely on the

opposing party’s lawyer representations or silence as a matter of law. See

McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests , 991

S.W.2d 787, 794 (Tex. 1999) .

Generally speaking, reliance is not justified when the representation or

non-disclosure takes place in an adversarial context. Id .

As a result of these policy concerns, “[A]n

attorney’s conduct is not independently actionable by an opposing party to the

suit if the conduct is part of the discharge of the lawyer’s duties in

representing his or her client.” Alpert , 178 S.W.3d at 406 ; see also Chapman Children’s Trust , 32

S.W.3d at 441 (affirming summary judgment on fraud and conspiracy claims by

opposing party because law firm’s actions were undertaken in discharge of its

duties to its client); Mitchell , 10

S.W.3d at 811–12. [3]

1. Exceptions to Attorney

Immunity

Attorney immunity is

by no means absolute. Attorneys can be

held liable for knowingly committing a fraudulent act outside the scope of

their legal representation of the client.

Alpert , 178 S.W.3d at 406 . A n attorney may also be liable, under some circumstances, for

negligent misrepresentations made to a non-client. See

McCamish , 991 S.W.2d at 793–94 (noting that in some circumstances

non-clients rely on attorney’s representations and attorney intends such

reliance). Additionally, the attorney

immunity doctrine does not affect any duty by the client to disclose the

information. See Renfroe , 947 S.W.2d at 287 .

Finally,

the offending attorney can still be punished for wrongful litigation

conduct by the court in which the conduct occurred under the Texas Rules of

Civil Procedure. Bradt , 892 S.W.2d at 72 . But a party does not have an independent

right of recovery, “ under any cause of

action ,” against the attorney of an opposing party arising from conduct the

attorney engaged in as part of the discharge of his duties in representing an

opposing party in a lawsuit. Id. (emphasis added). “[T]h e

remedy is public, not private.” White ,

32 S.W.3d at 276 .

2. Kivell’s Alleged Conduct

Jurek

was not Kivell’s client or in contractual privity with him so the general rule

of attorney qualified immunity applies.

We note that the attorney immunity rule focuses on the kind of conduct

engaged in, not on whether the conduct was wrongful in the context of the

underlying lawsuit. Alpert , 178

S.W.3d at 406 ; Chapman Children’s Trust ,

32 S.W.3d at 440; White , 32 S.W.3d at 276 . Thus, the key issue here is whether the

attorney engaged in the alleged mis conduct as part

of the discharge of his duties in representing a party in a lawsuit. Alpert ,

178 S.W.3d at 406 . Jurek did not

present any argument here or evidence below that Kivell failed to disclose

information to her independent of his participation in the mediation in the

lawsuit. Instead, she merely asserts

that Kivell had knowledge of the will. Jurek

failed to raise a fact issue indicating Kivell’s conduct went beyond his

representation of Forrest.

None

of the other exceptions to the attorney immunity rule apply to Kivell. She did not raise a claim for negligent

misrepresentation. Additionally, even if

Forrest fraudulently induced Jurek to sign the agreement, Kivell would be

liable only for his own conduct and not that of his client. Jurek cannot overcome the attorney immunity

rule and the lack of a duty between an attorney and an adversarial third

party. She, therefore, failed to raise a

fact issue on the element of duty to disclose on this general ground.

B. Liability Under Disciplinary

Rules

Finally,

Jurek contends that a duty to disclose exists under the Texas Rules of

Disciplinary Conduct. Specifically, she

cites Rule 1.02(c) prohibiting a lawyer from assisting a client in engaging in

fraudulent conduct, and Rule 1.02(d) requiring a lawyer to “promptly make

reasonable efforts . . . to dissuade a client” from committing fraud when the lawyer

“has confidential information clearly establishing that a client is likely to

commit a . . . fraudulent act that is like to result in substantial injury to

the financial interests or property of another.” Tex.

Disciplinary Rules Prof’l Conduct R. 1.02(c), (d), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G, app. A ( West

2005 ). She further asserts that a duty

is created by Rule 4.01(b) which provides that a lawyer shall not knowingly

“fail to disclose a material fact to a third person when disclosure is

necessary to avoid … knowingly assisting a fraudulent act perpetrated by the

client.” Tex. Disciplinary Rules Prof’l Conduct R. 4.01( b), reprinted in Tex. Gov’t Code Ann., tit.

2, subtit. G, app. A ( West 2005 ).

The

preamble to the disciplinary rules, however, states that the rules do not in

themselves create any legal duty nor create a private cause of action. [4] Tex.

Disciplinary Rules Prof’l Conduct preamble ¶ 15, reprinted in Tex. Gov’t Code Ann., tit.

2, subtit. G, app. A ( West 2005 ). The

rules are helpful guidelines for determining the standards of conduct for

lawyers but do not create a private cause of action. See Cruse v. O’Quinn , 273 S.W.3d 766,

775 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) (rules do not establish negligence

per se case or private cause of action, but may be considered in determining

public policy); McGuire, Craddock, Strother & Hale, P.C. v. Transcon.

Realty Investors, Inc. , 251 S.W.3d 890, 896 (Tex. App.—Dallas 2008, pet.

denied) (stating that disciplinary rules do not create private cause of action

and rules establish appropriate conduct

of lawyers “solely for the purpose of discipline within the profession”); Brown ,

302 S.W.3d at 16 n.17 (following McGuire

and holding that there is no legal authority that attorney can be liable based

solely on violation of disciplinary rules);

Judwin Properties, Inc. v. Griggs & Harrison, P.C. , 981 S.W.2d

868, 870 (Tex. App.—Houston [1st Dist.] 1998, no pet.) (holding that

disciplinary rules are “not enforceable” through negligence claim). Based on these cases and the language in the

preamble that a violation of the Disciplinary Rules does not create presumption

that a legal duty to a client has been breached, let alone a duty to a

non-client, we decline to create a duty to speak for the tort of fraudulent

nondisclosure based solely on the Rules.

Jurek failed to raise a fact issue as to Kivell’s duty to

disclose the existence of Forrest’s will. The trial court, therefore, properly

granted Kivell’s motion for summary judgment.

We overrule Jurek’s first issue. Because

this is dispositive of the issues presented, we need not address whether

summary judgment based on the remaining grounds was proper. See

Ford Motor , 135 S.W.3d at 600 .

Conclusion

We

affirm the judgment of the trial court.

Harvey

Brown

Justice

Panel consists

of Justices Higley, Brown, and Bennett. [5]

[1]

As part of her second issue,

Jurek argues that the trial court improperly shifted the burden for summary

judgment on Kivell’s affirmative defenses onto her because Kivell only filed a

no-evidence motion. We reject this

argument because we read Kivell’s motion as both a traditional and a

no-evidence summary judgment motion.

[2] We describe the protection provided to attorneys from

claims by their adversaries as “qualified immunity” from civil liability

because it only applies to claims by non-clients for actions taken in

connection with representing a client in litigation. Alpert

v. Crain, Caton & James, P.C. , 178 S.W.3d 398, 405 (Tex. App.—Houston

[1st Dist.] 2005, pet. denied); Dixon

Fin. Servcs., Ltd. v. Greenberg, Peden, Siegmeyer & Oshman, P.C. , No.

01-06-00696-CV, 2008 WL 746548 , at *7 (Tex. App.—Houston [1st Dist.] Mar. 20,

2008, pet. denied) (mem. op.). This

principle is also described as the “attorney immunity doctrine.” Reagan Nat’l Adver. of Austin, Inc. v.

Hazen , No. 03-05-00699-CV, 2008 WL 2938823 , at *2 (Tex. App.—Austin July

29, 2008, no pet.).

[3] This

court has repeatedly held that a fraud action against an opposing attorney is

not actionable when the attorney’s alleged conduct is part of the discharge of

the attorney’s duties in representing his client: Bosch

v. Armstrong , No. 01-08-00847-CV, 2009 WL 1635318 , at *3–4 (Tex.

App.—Houston [1st Dist.] June 11, 2009, no pet.) (upholding summary judgment on claims for

malicious prosecution, defamation, fraud, and abuse of process by plaintiff

against opposing counsel in underlying litigation); Dixon Fin. Servs., Ltd. v. Greenberg , No. 01-06-00696-CV, 2008 WL

746548 , at *9 (Tex. App.—Houston [1st Dist.] Mar. 20, 2008, no pet.) (upholding summary judgment on claims for conversion,

abuse of process, fraud and conspiracy to defraud by plaintiff against opposing

counsel in underlying litigation, noting plaintiff cannot “salvage an otherwise

untenable claim merely by characterizing it as tortious”); Alexander v. Malek , No. 01-06-01156-CV, 2008 WL 597652 , at *3 (Tex.

App.—Houston [1st Dist.] Mar. 6, 2008, no pet.) (mem. op.) (affirming summary judgment on claims based on

attorney’s representations to opposing party regarding trial date).

[4] The preamble

states: “Violation of the Texas Disciplinary Rules of

Professional Conduct 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 . . . . Accordingly,

nothing in the rules should be deemed to augment any substantive legal duty of

lawyers or the extra-disciplinary consequences of violating such a duty.” Tex.

Disciplinary R. Prof’s Conduct preamble ¶ 15, reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G,

app. A ( West 2005 ).

[5]

The Honorable Alfred H. Bennett,

Judge of the 61st District Court of Harris County, participating by assignment.