Rawhide Mesa-Partners, Ltd. v. Brown McCarroll, L.L.P.
344 S.W.3d 56
Tex. App.2011Background
- Rawhide owns a shopping center in Austin, Texas; Stern handles negotiations for Rawhide.
- CR Bagels, represented by Brown McCarroll, sought to negotiate a lease with Rawhide.
- Meade of Brown McCarroll contacted Stern to clear representation; emails show prior relationship and expectations before legal work began.
- Brown McCarroll filed CR Bagels' bankruptcy petition on March 8, 2006; Rawhide was not informed.
- CR Bagels and Rawhide entered into a lease on April 11, 2006; Brown McCarroll later filed to assume the lease in June 2006; Rawhide received no notice.
- CR Bagels defaulted in September; Butler represented CR Bagels; Rawhide locked out in November, later discovering the bankruptcy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to disclose existence of bankruptcy | Rawhide contends the lawyers had a disclosure duty. | Lawyers argue no such duty; no fiduciary or duty to inform Rawhide. | No duty to disclose; summary judgment affirmed. |
| Existence of fiduciary duty between lawyers and Rawhide | Rawhide alleges fiduciary relationship through attorney-client or informal trust. | No formal or adequate fiduciary relationship; adversarial posture negates fiduciary duty. | No fiduciary duty found between lawyers and Rawhide. |
| Creation of a false impression about CR Bagels' ability to pay | Lawyers' nondisclosure created impression CR Bagels could pay rent. | No statements or misrepresentations by lawyers; no duty to disclose. | No duty to disclose; no false-impression claim viable. |
| Stern's knowledge and whether lawyers owed Rawhide notice | Lawyers knew Rawhide was ignorant and should have disclosed. | Bankruptcy filing public; lawyers not obligated to confirm Rawhide's knowledge; potential conflict. | No duty to advise of bankruptcy; no constructive notice requirement breached. |
Key Cases Cited
- Bradford v. Vento, 48 S.W.3d 749 (Tex. 2001) (duty to disclose under fraud by nondisclosure framework)
- Toles v. Toles, 113 S.W.3d 899 (Tex.App.-Dallas 2003) (lawyer liability limits; immunity not universal)
- IBP, Inc. v. Klumpe, 101 S.W.3d 461 (Tex.App.-Amarillo 2001) (lawyer immunity; boundaries of ethical duties)
- Gamboa v. Shaw, 956 S.W.2d 662 (Tex.App.-San Antonio 1997) (no privity between attorney and shareholders; conflict with representation)
- Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398 (Tex.App.-Houston [1st Dist.] 2005) (privity and liability in bar against broad attorney immunity)