LeBlanc v. Lange
365 S.W.3d 70
| Tex. App. | 2011Background
- LeBlanc and Lange's long-running business and personal association led to formation of multiple healthcare entities and a hospital partnership; Lange acted as LeBlanc's advisor and participant in management of the Hospital and Ethicus; Carlyle's later LifeCare stock sale imposed conditions (non-competition, lease extension) creating conflicts of interest; LeBlanc sought to sell LifeCare stock with Lange involved in related negotiations; Settlement Agreement drafted to resolve issues and included lease extension, non-competition, and release of LifeCare stock from Ethicus pledges; LeBlanc signed the Settlement Agreement, while Lange asserted representation of the Hospital and Ethicus, not LeBlanc personally; trial court granted summary judgment dismissing most claims and rejecting alleged fiduciary duties; on appeal, LeBlanc challenged attorney-client and fiduciary duty theories and validity of the settlement, which the court upheld
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of attorney-client relationship between Lange and LeBlanc | LeBlanc asserts Lange represented him personally | Lange represented the Hospital/Ethicus; no personal representation | No attorney-client relationship existed at the Settlement Agreement time |
| Whether a special informal fiduciary relationship existed | There was a preexisting special relationship giving rise to fiduciary duties | Relationship was arm's-length and between sophisticated business principals | No special relationship created a fiduciary duty |
| Fairness of Settlement Agreement | Lange owed fiduciary duty; settlement presumed unfair | No fiduciary duty; arm's-length settlement | Settlement not analyzed as unfair for lack of fiduciary duty; upheld as lawful |
| Breach of fiduciary duty by Lange | Lange breached duties owed to LeBlanc | No fiduciary duty owed; actions were for Hospital/Ethicus | No breach of fiduciary duty by Lange |
| Illegality, duress, unconscionability claims | Settlement illegal or obtained via duress/unconscionability | No illegality, no duress, and no unconscionability; actions within proper bounds | Claims rejected; settlement not illegal, duress not proven, unconscionability not shown |
Key Cases Cited
- Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276 (Tex. 1998) (informal fiduciary duty requires a special pre-existing relationship)
- Meyer v. Cathey, 167 S.W.3d 327 (Tex. 2005) (no fiduciary duty from long friendship where parties deal at arm's length)
- Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) (special relationship not created lightly)
- Dodson v. Kung, 717 S.W.2d 385 (Tex.App.-Houston [14th Dist.] 1986) (no fiduciary duty where parties deal at arms-length)
- Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591 (Tex.1992) (confirms that confidential relationship arises in specific contexts)
- Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667 (Tex.1998) (mere subjective trust does not create a fiduciary relationship)
- Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, LLP, 105 S.W.3d 244 (Tex. App.-Houston [14th Dist.] 2003) (objective standard governs implied attorney-client relationships)
- Vinson & Elkins v. Moran, 946 S.W.2d 381 (Tex.App.-Houston [14th Dist.] 1997) (attorney-client relationship requires intent to render professional services)
- A.H. Belo Corp. v. Corcoran, 52 S.W.3d 375 (Tex.App.-Houston [1st Dist.] 2001) (private remedies not arising from penal statutes)
- Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768 (Tex. 2010) (elements of fraud require proof of misrepresentation and reliance)