Matis v. Golden

certainly something is that could be required, long but as as the defendant has trial, right to confrontation at which relitigate defendant can suppres- finder, ruling

sion front of the fact like

many other constraints when consti- guarantees available,

tutional are I do not right

believe that of confrontation is

constitutionally at a required suppression

hearing. I regard, agree In this with the

thoughtful opinion and well-reasoned of re- (the Lagarde panel

tired Justice Sue also

included Justices Francis and Lang) in State, (Tex. v.

Vanmeter 165 S.W.3d 68 refd).

App.-Dallas pet. While the

majority’s purported holding in appeal this dicta, it is in direct conflict with Vanme I join

ter. do not opinion the Court’s above,

noted but concur the Court’s

judgment. Gary

Tom Sorenson, MATIS and

Appellants, GOLDEN,

Mark Brian Appellees. Deming,

Jonathan

No. 10-05-00311-CV. Texas, Appeals

Court of

Waco.

May Nelson, Henderson, Paul appel- J. for AND FACTUAL LEGAL lants. SUFFICIENCY two, point Sorensen chal- Adams, Bill Youngkin, Bryan, E.V. lenge sufficiency and factual legal appellees. the evidence to the court’s committed fraud. GRAY, Before Chief Justice Justice VANCE, and Justice REYNA. legal sufficiency challenge re quires consideration of “whether the evi

OPINION dence at trial would enable reasonable people fair-minded to reach the verdict REYNA, FELIPE Justice. Wilson, under review.” Keller Mark Brian and Jon- We “must athan judgment recovered a ju credit favorable evidence if reаsonable against Gary Tom Matis and Sorensen for could, disregard contrary rors evi fraud. and Matis Sorensen on the appeal jurors dence unless reasonable could not.” (1) following grounds: by the court erred applies Id. This a standard also court’s denying special appearance; Matis’s and findings in a made bench trial. See Bank (2) the legally factually evidence is and Hubler, 859, Am. v. 211 S.W.3d 862 insufficient support judg- the court’s 2006, (Tex.App.-Waco granted, pet. ment. We affirm. w.r.m.); judgm’t Ludwig vacated see also Med., L.P., 285, v. Encore 191 294 2006, denied); (Tex.App.-Austin pet. JURISDICTION Cata Blasdel, (Tex. 295, v. lina 881 297 one, In point Matis contends that 1994). the court erred his denying special ‍​​‌​‌​‌​​​‌‌​​‌​​​​‌‌‌​‌‌‌​‌​‌​​‌‌‌‌​‌‌‌‌‌​‌‌‌‌​‍appearance. The signed court the order sufficiency challenge factual denying special Matis’s appearance on on appellant issues which the did not bear 27, June 2003. Matis did not file a notice proof requires the burden of tous “consid of appеal until August 2005. An appeal of weigh er and all of the evidence.” Checker an order granting or a denying special Bag Washington, 625, Co. v. 27 S.W.3d appearance an interlocutory is appeal denied). 2000, (Tex.App.-Waco pet. We perfected which must by filing be a notice will reverse the if it only “verdict is so of appeal twenty days within after the contrary weight to the overwhelming ruling. See Tex. Civ. Prac. & Rem.Code clearly the evidence the verdict is 51.014(a)(7) (Vernon § Supp.2006); Ann. wrong unjust.” and Id. On issues where 26.1(b); Tex.R.App. see also In re P. appellant proof,” “bears the burden of K.A.F., 923, (Tex.2005); 160 S.W.3d only if, we “considering will reverse all the Huther, County 665, Denton v. 43 S.W.3d evidence, contrary so to the (Tex.App.-Fort 2001, 666-67 Worth no great weight and preponderance of the pet.). Matis’s attempted appeal from the manifestly unjust.” evidence as to be Id. denial of his special appearance is untime ly, and jurisdiction we do not hаve A fraud claim is comprised of the address it. Accordingly, we dismiss Ma- following elements: tis’s first point jurisdiction. want of S.R.O., (1) 237, In re made; a representation 143 S.W.3d was material (2) (Tex.App.-Waco 2004, (3) pet.). false; the representation was made, any soglow, Deming receive representation when the was pro- it Only Kosoglow or made returns or refunds. speaker knew it was false recklessly any testimony without live trial.1 Because vided (4) assertion; positive out of state and truth and as Golden and trial, representation with speaker appear testify made unable party the intent that the other should contend that Golden and (5) it; in reli- party act acted for fraud. Deming cannot recover (6) the representation; ance has Supreme spe The Texas Court injury. party thereby suffered requires cifically considered whether fraud Pritchard, P.C., 73 v. Johnson Brewer & relationship alleged between the “direct (Tex.2002) 193, (quoting 211 n. 45 person— and a known specific fraudfeasor Bank, N.A., In re FirstMerit commonly to in this context as referred (Tex.2001) 749, (orig. proceeding)); ” privi ‘privity,’ and determined such (Tex. Tanner, 752, Long v. Young, Ernst L.L.P. ty required. is not & denied). 2005, pet. App.-Waco Co., Ins. Pac. Mut. Life legal factual of their Fraud “exists where sufficiency challenges, Matis and Sorensen with the representation the false was made (1) cannot argue that: Golden reaching deceiving a third intent they learned of recover for fraud because par thereby caused that third person Kosoglow and nei- through the investment ty injury; required is not between privity (2) trial; nor appeared ther person trying is the fraudfeasor and the not of the evidence does Sec., Corp. to In re Enron 388 influence.” recklessness, materiality, falsity and/or (S.D.Tex.2005) 780, (citing 784 F.Supp.2d intent, fraudulent or reliance. 578-80). Young, & 51 S.W.3d Ernst a direct Accordingly, it is immaterial that Appear Testify Failure to relationship not exist between Gоld does record, to the According id.; en, Matis, See Deming, and Sorenson. through his first learned of investment Young, S.W.3d at 578- see also Ernst & in The investment friend Ron Weaver. known as Waste Tech. company volved a Furthermore, it makes sense that regarding investment Information rely Deming could on Koso- Golden and initially from Matis Soren- passed then testimony sen, glow’s as circumstantial evi and from from Sorensen to their fraud claims. supporting dence own Kosoglow Deming. The Goldеn usually by discernible direct conveyed “Fraud is not was that the specific information usually so or attend is covert yield monthly returns or evidence and investment would attempts such at concealment Koso- ant with would be refunded. invested funds by than proof other incapable to be each invested glow, v. evidence.” Cotten $25,000 Invested funds circumstantial in the investment. Bancshares, Inc., Holding wired to the Emerald Noble were Weatherford 2006, 687, pet. (Tex.App.-Fort Worth eventually to Don Trust and transferred denied). testify Richards, properly re could attorney a California ald representations. Sorensen’s to Matis’s and the investment sponsible preparing 801(e)(2). He could also However, Ko- See at no time did documents. Tex.R. Evid. Deming relied on Matis’s whether Golden and Matis’s and Sorensen’s 1. The court sustained representations. testimony regarding Sorensen's objection Kosoglow’s testify Ratcliff, to the facts of the v. case. Additional- the future.” Trenholm 927, (Tex.1983). ly, deposition testimony Golden’s ad- S.W.2d “When a was 930-31 speaker purports special mitted at trial and the record contains have knowl- facts, documentary edge superior of the or does pertaining evidence Gold- have Therefore, Deming’s example, en and the facts—for when claims. we are underlying opinion cannot facts not agree are Golden equally parties party available to both bеing entitled recover virtue of —a may maintain a fraud action.” Pauli v. appear testify unable to at trial. Inc., 214,

Capital Mgmt., Res. Materiality denied). 1999, 219 (Tex.App.-Austin pet. Actionable appears from the record that facts, must involve material opin not mere specifically represent Matis and Sorensen puffery. ion or See Prudential Co. Ins. (1) refundable; ed that invested were funds Assocs., 156, Am. (2) Jefferson paid monthly, returns would be representation “A ‘ma beginning shortly after the initial invest terial’ if is important it the party to ment, percent and amount to one hundred it making whom is made in a decision doubt, for ten given months. There is no regarding the ‍​​‌​‌​‌​​​‌‌​​‌​​​​‌‌‌​‌‌‌​‌​‌​​‌‌‌‌​‌‌‌‌‌​‌‌‌‌​‍particular transaction.” that no returns or refunds have been real Burleson State Bank v. 27 ized, that these were false. 605, 2000, (Tex.App.-Waco pet. Yet, Matis and Sorensen contend that “ denied). ‘Material means reasonable merely relaying information person would attach importance to and mere are statements would be induced to act on the information opinion. disagree. We in determining his choice of in the actions type These are not the of representa- in question.’” transaction (quoting Id. generally tions puf- amount to mere Porras, Pers. Servs. v. Beneficial Pauli, fery opinion. or 987 S.W.2d at 186 (Tex.App.-El Paso (statements 218-19 that an investment was w.r.m.)). granted, writ judgm’t vacated “produce large “low risk” and would reve- “ a long merely ‘puff- nues for time” are a “Whether statement an ac ing,’ talk”); Faircloth, or ‘dealers’ see also tionable statement merely of ‘fact’ or one (representing settle- ‘opinion’ depends often on the circum “top opinion); ment dollar” as is mere stances in which a statement is made.” Prudential, (“superb,” 896 S.W.2d at 163 Transport Faircloth, Ins. Co. v. fine,” “super and “one of the finest little 269, 276 cir Relevant properties in the of Austin” are not speci cumstances include “the statement’s statements). they actionable Nor were ficity, speaker’s knowledge, com presented as predictions or results contin- parative speaker’s levels of the and the gent on the happening some other knowledge, hearer’s and whether event. specific These were statements of present statement relates to the or the regarding existing material fact terms opinion may future.” Id. Even an ac be Faircloth, of thе investment. See (1) tionable if: it is with “intertwined” S.W.2d at 276. facts;” representations “direct present (2) Moreover, speaker knowledge “the falsi has its the record Ma- indicates that (3) ty;”’ it is or past present merely “based tis and were relaying Sorensen not (4) facts;” speaker information, or “special has but their occur special knowledge. of facts that will or exist Al- were made with response to acting solely provided to was in this though testified Sorensen Sоrensen Golden, investment, liaison, Following the initial Kosoglow, and Dem- interest. providing continued ing dependent on Matis and Soren- Matis and Sorensen record contains regarding for information the invest- information. The several son whereby and that emails from Sorensen he Ma- ment. Matis reports provided presented well status appeared pro- Sorensen informed tis point, obtaining detail about the ideas for refunds. At one vided considerable invest- mеnt, to including workings, responded questions lodged what its inner by Deming’s funds and where father. Matis and Sorensen happened to invested transferred, telephone via they were manner also met with Weaver refunds, ways obtain potential which returns received. Matis discuss would be Golden, pointed Kosoglow, some of involved Matis’s and Soren- and Sorensen which specific participation. Accordingly, the rec- Deming in the direction of a sen’s open financial where could ord reflects Matis Sorensen were institution information, relaying pos- merely When but receiving an account returns. returns, unique information re- yielded no sessed access to the investment to which garding process that all the re- the investment explained and Sorensen did not funding Kosoglow, received in Golden quired had not been Pauli, equal They to make the initial trade. then have access. order case, Golden, if 219. In such a even Matis’s and infоrmed amounted to of a second trade. Sorensen’s available opinions, they mere are actionable. See Sorensen, all information According id. higher up the chain of came from those Furthermore, However, Kosoglow testified that Matis and Sorensen command. profitable made him want to One such the returns had access these individuals. Weaver, would not have person, probably with invest and Ron communicated He represеntations. and invested absent the both Matis and Sorensen. Weaver investing testified to and Golden both Sorensen testified Matis was involved and that move based on these financing the invest- raising an a refund was im- being knew that Matis able obtain ment forward. Weaver investors, portant influencing the decision contacting includ- factor potential was Deming. When invest. See ing Kosoglow, in the record in- Kosoglow, transfers contained and Sorensen referred Wire Golden, Wеaver, dicate that all three men contributed sub- and to Weaver money to the with Ma- stantial sums of their own them to communicate instructed person Any reasonable would “jeop- alone as to investment. tis and so not Sorensen that importance confirmed what attach ardize the trade.” Weaver monetary re- produce an would previously had ex- investment Matis and Sorensen loss, sults, no financial apparent with plained. on formulate a decision based likely would that he had never testified representations. nothing and knew previously invested light informa- In evidence contained other than about the investment record, reasonably court con- In could provided by Matis and Sorensen. tion made ac- fact, Kosoglow, knew clude that Matis Sorensen Matis and Sorensen representations of fact Golden, in the material Deming were interested tionable Golden, regarding Kosoglоw, information Matis and investment. The the terms of the all that someone named investment. See Weaver Keller, verbally at had S.W.3d 827. Alice Brooks indicated that money. At no guarantee she would Falsity Recklessness and/or any guarantees placed were in writ- time Moreover, ing. wiring money not the “A statement is not fraudulent was speaker receiving it only prerequisite unless knew was false when returns. speaker recklessly made or the made had money it total amount of to be collected Plunkett, knowledge without of its truth.” in order for the investment move for- Prudential, at (citing S.W.3d produce returns. ward 163). at Representations are also whether, The record unclear as to if reckless made without “sufficient infor made, the time the were mation or basis to support them.” Tren Matis and Sorensen were aware that mak- holm, unqualified 933. “An ing receiving trade returns was exists, statement that a fact made for the contingent obtaining аll required fund- it, purpose inducing upon another to act ing. They may also have been unaware that implies the one who it it makes knows that there guarantees were written or speaks be true and from such knowl any guarantees that such uncertain. were Concrete, edge.” Baber v. Pioneer case, they apparently either left the 664, 667 (Tex.App.-Fort Worth possessed impression they personal that dism’d). 1995,writ represent “If the facts knowledge of details of the investment exist, ed not person do and the states of that represented the facts as do, his they own and in Baber, true. See 919 S.W.2d at 667. statement, another to duces act his appears pos that Matis and Sorensen the law imputes him pur fraudulent sessed insufficient information on which to pose.” Id. may proved Recklessness be representations. base their See Tren “direct or circumstantial evidence.” holm, 646 S.W.2d at 933. The court could Plunkett, 27 S.W.3d at 613. reasonably conclude that did not un-

Although invested, process derstand the investment’s Matis also he recklessly by misinforming received no therefore acted returns or refunds. He testi Deming regarding fied that he believed the investment would place represented take the investment’s terms. See and would not have invested had he known that there

would be money no returns or that his argue Matis and re- this would be refunded. He also testified imposes upon sult duty them investi- that, in hindsight, “probably have would gate prior making any investment been a little bit more Whilе cautious.” representations. They in- contend Matis’s and Sorensen’s degree vestments “involve a certain necessarily were not made with knowledge thus, risk;” “any college graduate, such as of falsity, their the record contain does be, Appellees the were shown to would representations evidence that their were at know this and should have known that an recklessly. least made of return in of expected rate excess 1200 record, Aсcording per per year the and a high to Matis Sor- cent would involve However, personally guarantee any ensen did not of degree risk.” because Matis’s money guaran- positive and no there were written and Sorensen’s risk,” place representa- negated any “degree tees in at the time the we perceived of Matis, Sorensen, Golden, say Kosoglow, were made. tions cannot that no from the transaction. any in of facts rived bеnefit Deming possession no They they the that “had control question have led them to contend that would Moreover, no relation- representations made. whether over the investment and had duty a to possessed ship company principles the or there- Matis Sorensen with “ The proper inquiry. However, participate not are investigate is the of.” ‘all who made representation a is fraud, irrespective issue is whether ... liable for Plunkett, 27 fаlsely recklessly. or in for profits, that shared proof Prudential, 613; at see also action to injury of the is gravamen ” at record contains evi- 163. The to plaintiff not benefit defendant.’ finding the court’s that supporting dence Area Corpus Christi Teachers Credit Un Hernandez, 195, Matis’s and Sorensen’s 814 S.W.2d ion v. any writ) knowl- recklessly without were made 1991, Antonio no (Tex.App.-San Keller, 168 edge of their truth. See (quoting Crisp v. Southwest Bancshares at (Tex.Civ. 827. Co., 610, Leasing 586 S.W.2d n.r.e.)) (em 1979, ref 'd App.-Amarillo writ Intent Ancira, added); v. phasis see Crawford in representation A must be 04-96-00078-CV, Tex.App. Lexis No. Plunkett, 27 (Tex. to “induce action.” tended ‍​​‌​‌​‌​​​‌‌​​‌​​​​‌‌‌​‌‌‌​‌​‌​​‌‌‌‌​‌‌‌‌‌​‌‌‌‌​‍2263, *8, 214835, *3 at at 1997 WL at at 613. Intent “is determined 30, 1997, no pet.) App.-San April Antonio representa party time the made the (not designated publication). plain sub “may tion” and also be inferred from that the defendant de prove tiff need ques a Id. “Intent is fact sequent acts.” to a fraud rived a in order maintain benefit trier uniquely tion within the realm the Tex.App. Lеxis Crawford, 1997 claim. See depends of fact because it so 2263, 214835, *8-9, *3. at WL credibility weight the witnesses and the fi- raising in Given Matis’s involvement given testimony.” Spoljaric to their be forward, it the investment nancing move Tours, 432, Inc., 708 S.W.2d Percival any intent is that he had other doubtful Golden, Kosoglow, that but re Although the entirely The record is not clear invest. developed, garding investment never assisted directly to whether Sorensen their contend Matis Sorensen he efforts, although es perform fаilure to cannot subsequent to raise ways and Matis had discussed It “failure is correct that tablish intent. Nev- for certain business ventures. funds alone, standing cannot establish perform, ertheless, least participated Sorensen at intent.” fraudulent Columbia/HCA Golden, Deming’s obtaining Kosoglow, Cottey, Corp. v. Healthcare He and Matis told investment. (empha pet.) no (Tex.App.-Waco be must that funds added); Spoljaric, sis see join certain date in order invested Howеver, evi “slight circumstantial admitted Sorensen investment. fraud, considered with dence of when When the a tactic of scams. this is often perform, suffi promise breach of a returns, yielded investment of fraudulent cient to ob- expeditiously act did not 745; see Cottey, 72 S.W.3d intent.” attempted appears they tain refunds. at 435. Spoljaric, 708 S.W.2d why the stall, reasons offering multiple making yielded returns investment place also Matis and Sorensen refunds, obtaining none de- propоsals that emphasis on the fact some

3H 2000, developed. ever in App.-Houston pet. which Almost an effort de [14th Dist.] nied). Golden, persuade Kosoglow, and Dem- ing investment, to remain in the Matis and injured rule that person is not the continuously that by representa- asserted and false fraudulent investment generate would results tions of another is held to the exercise of questioned why Golden, diligence suspect and discover the Kosoglow, falsity of Deming such statemеnts. ab- wanted refund when the invest- knowledge contrary, sence of to the produce. ment was about to In light of right rely upon would have a and act prior Matis’s and Sorensen’s and subse- statements, such certainly actions, quent the record contains evidence wrongdoer such a case cannot be of intent. complain heard to that other should The trial court could have inferred that have disbelieved his solemn statements. Matis’s and representations Sorensen’s Indus, Koral v. Sec.-Connecticut Ins. Life were made with the intent to induce Koso Co., (Tex.1990)2 650, 802 651 (quot- S.W.2d Golden, glow, Deming invest. ing Cottage Organ W. Piano & Co. v. 434; Spoljaric, 708 S.W.2d at see also Anderson, 513, 45 101 Tex.Civ.App. S.W. Plunkett, 613; City Keller, 1061, 1907, (Tex.Civ.App.-Fort Worth 168 S.W.3d at 827. denied)). writ Assuming without deciding this con- Reliance undertaking versation amounts to an in- vestigation, there is no indication that Ko- plaintiff must “demonstrate Golden, soglow, Deming placed were that he upon relied misrep fraudulent falsity оn any representa- notice of the resentation to his detriment.” Koral, 146; tions. See see 614; 27 S.W.3d at see Young, Ernst & also Mayes, 11 S.W.3d at 451. Weaver S.W.3d at 577. by Reliance is established merely repeated previous- the information showing that the defendant’s actions and ly conveyed Matis and Sorensen. representations plaintiff induced “to There is no suggest- evidence the record act or to refrain from action.” Ernst & ing Kosoglow, that the conversation Gold- Young, 51 en, and had with Dеming gave any Weaver indication Matis’s rep- and Sorensen’s Prior to investing, Kosoglow, resentations were false. such Golden, Absent ac- Deming spoke with Weaver. Golden, tual knowledge, Kosoglow, Matis and Sorensen contend this conversa rely were entitled to Matis’s tion amounts to conducting investiga an and Sorensen’s and were tion. Actual represen of false required “suspect any and discover” tations is “inconsistent with the claim that Koral, falsities. 802 S.W.2d at 651. аllegedly party defrauded has been deceived, negatives and it the essential Moreover, the record establishes ‍​​‌​‌​‌​​​‌‌​​‌​​​​‌‌‌​‌‌‌​‌​‌​​‌‌‌‌​‌‌‌‌‌​‌‌‌‌​‍element reliance the truth of the these caused Indus, representations.” Koral v. Sec.- invest. Co., 136,

Connecticut Ins. testified that these Life 1990, (Tex.App.-Dallas denied); important decision, writ his he relied on Stewart, (Tex Mayes 440, representations, and he would not Co., Supreme per ty-Connecticut 2. This is the Court’s curiam Ins. Life Indus, opinion deniеd). denying writ (Tex.App.-Dallas in Koral v. Securi writ the representa- appeal ap- notice of accelerated have invested but for these Tex.R.App. 26.1(b), peal. See P. 28.1. relying also tions. Golden representations. Kosoglow, $25,000 to Deming each the wired join pro- location order to the required

ject. this It is doubtful that decision was way the of by possibility influenced

receiving returns and the as- substantial of should the obtaining

surance a refund Accordingly, investment fail. the record A.T., T.T., In of the Interest supporting contains evidence of D.D., A.D. and A.D. 614; at reliance. See 14-06-00552-CV, Nos. 14-06-00555-CV. 577; Young, see at also Ernst & Keller, City 827. of Texas, of Appeals Court of (14th Dist.). Houston in the summary, there is evidence whereby reasonably record could court May 2007. commit- conclude that Matis and Sorensen Keller, ted fraud. of judgment contrary is not “so 827. The overwhelming weight

to the of evi- clearly wrong

dence the verdict is

unjust.” Bag, Checker legally and factu-

Because the evidence is

ally sufficient to the trial court’s

findings, point error num- we overrule of

ber two. judgment is affirmed.

The concurring.

Chief Justice GRAY GRAY, concurring.

TOM Chief Justice importance

I cannot let the dis- go of the first in the under-

missal issue majority opinion.

stated manner holding is that if a importance

The denied, special appearance motion is

120a remedy an immediate exclusive ‍​​‌​‌​‌​​​‌‌​​‌​​​​‌‌‌​‌‌‌​‌​‌​​‌‌‌‌​‌‌‌‌‌​‌‌‌‌​‍or- appeal interlocutory

accelerated of the

der under Texas Civil Practice Reme 51.014(a)(7). Tex. Civ.

dies Code section 51.014(a)(7)(Ver § & Ann.

Prac. Rem.Code holding

non That means Supp.2006). the end of

losing party cannot wait until appeal and then denial proceeding but must instead special appearance,

of the timely filing

comply requisites with the

Case Details

Case Name: Matis v. Golden

Court Name: Court of Appeals of Texas

Date Published: May 16, 2007

Citation: 228 S.W.3d 301

Docket Number: 10-05-00311-CV

Court Abbreviation: Tex. App.