355 S.W.3d 223
Tex. App.2011Background
- Kelly joined Gregan’s law firm in 2002; in 2004 Kelly’s name was added to the firm, which remained owned by Gregan.
- In March 2006 the parties executed an employment agreement listing Kelly as a profit-sharing partner (non-owner) with a 20% share of net profits and a right of first refusal to ownership.
- In September 2006 Gregan terminated Kelly; Kelly sued in 2007 alleging breach of contract, statutory fraud, and breach of fiduciary duty.
- During trial Gregan stated she believed she owed fiduciary duties to the firm and employees; corrections were later made on an errata sheet related to fiduciary duties.
- The jury found (among other things) a fiduciary relationship existed based on trust and confidence, but the court recognized the at-will nature of the relationship; the court ultimately reversed on the fiduciary-duty issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary relationship existed between Gregan and Kelly | Kelly asserts an informal fiduciary duty due to trust and confidence. | Gregan contends there was no informal fiduciary relationship; at-will employment/partnership does not create such duty. | No fiduciary relationship; Kelly failed to prove duty. |
Key Cases Cited
- Meyer v. Cathey, 167 S.W.3d 327 (Tex. 2005) (duty first requires existence of fiduciary relationship; two-part analysis)
- Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 S.W.2d 591 (Tex. 1992) (trust and confidence in contracts does not by itself create fiduciary duties)
- Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) (informal fiduciary relationship requires more than high trust)
- Thigpen v. Locke, 363 S.W.2d 247 (Tex. 1962) (fiduciary relationship determined by actualities of the relationship)
- Bohatch v. Butler & Binion, 977 S.W.2d 543 (Tex. 1998) (at-will nature of partnerships; no duty to remain partners; limits on good-faith exceptions)
- Bohatch I, 905 S.W.2d 597 (Tex. App.—Hou. [14th Dist.] 1995) (initial recognition of fiduciary duty not to terminate in bad faith; later narrowed)
- Am. Med. Int’l, Inc. v. Giurintano, 821 S.W.2d 331 (Tex. App.—Hou. [14th Dist.] 1991) (considerations on duration and nature of relationship in fiduciary analysis)
- Priddy v. Rawson, 282 S.W.3d 588 (Tex. App.—Hou. [14th Dist.] 2009) (identifies elements of fiduciary duty claim in Texas appellate context)