Hall v. Douglas
2012 Tex. App. LEXIS 7281
Tex. App.2012Background
- Hall and Trustee formed DHL with Douglas Properties, Inc. as general partner and Hall and Douglas as limited partners to develop the Hall Tract owned by the Trustee.
- Trustee sold the Hall Tract to DHL in 2003; DHL signed a note to the Trustee and Graham secured another note; Trustee deed of trust gave Graham a prior lien.
- DHL later borrowed 2005 and 2006 loans from Graham, with the Trustee signing lien subordination agreements subordinating her lien to Graham; both loan documents allowed advances for development of the Hall Tract.
- Development represented as a stated purpose in the loan documents, but the record shows advances for paying costs related to ownership, operation, and development of the Hall Tract; Trustee’s involvement became central to alleged misrepresentations.
- In 2008, appellants sued for fraud and related claims; Graham and Douglas Appellees sought summary judgments which the trial court granted; the appellate court affirmed.
- Hall challenges the standing to pursue claims individually and as a beneficiary, and the court addressed whether the alleged fraud and related claims could proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud elements against Graham | Trustee relied on Graham's misrepresentations | No evidence of reliance or falsity | Summary judgment upheld; lack of reliance and 2003 loan issue |
| Fraud claims against Douglas Appellees | Subordination and development representations fraudulently induced Trustee | No evidence of reliance; statements not proven false | Summary judgment upheld on Trustee’s fraud claims against Douglas Appellees |
| Hall’s standing to sue | Hall has direct injury as a beneficiary/partner | Damages to DHL, not Hall personally; no standing | Hall lacked standing to sue individually or as beneficiary; claims dismissed |
| Remaining claims against Graham after prior judgments | Conspiracy and fiduciary-duty claims survive underlying fraud | Derivative nature; proper to grant summary judgment | Court affirmed summary judgment on remaining claims; derivative nature precluded liability |
Key Cases Cited
- Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768 (Tex. 2009) (elements of fraud clarified; reliance needed as an element)
- Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41 (Tex. 1996) (promises of future performance require intent not to perform at time of promise)
- Gen. Mills Rests., Inc. v. Texas Wings, Inc., 12 S.W.3d 827 (Tex.App.-Dallas 2000) (no-evidence standard; burden on movant; review of evidence in light favorable to nonmovant)