*1 cross-appellants’ points other of error GAS, L.P., TEXAS cross-points or directed to Phase I. STANDARD OIL & BSTs Energy Co., Petroval, Grimes Inc, Appellants Conclusion portion We affirm the of the trial court’s v.
judgment disregarding jury findings ENERGY, FRANKEL OFFSHORE II, Phase I. As to we act as Phase follows. INC., Appellee. portion judgment We reverse the No. 14-11-00125-CV. $1,600,000 as awarding actual and DTPA damages Christina Viesca and Hector Texas, Appeals Court Viesca, Jr. and judgment render that (14th Dist.). Houston Viesca, Christina Viesca Hector Jr. 28, Dec. $605,000 recover BSI. from We portion reverse the trial judgment awarding
court’s ad- Viescas damages
ditional in the amount of
$3,200,000 jury’s finding based on the that
BSI intentionally knowingly violated the
DTPA judgment and render that the Vies- nothing
cas take on this DTPA claim. portion judgment
We reverse the
awarding damages Wiley economic $1,223,270
Lease Co. amount judgment Wiley
render Lease Co. $1,052,000
recover from BSI.
We reverse the portion of trial judgment awarding
court’s additional dam-
ages Wiley Lease Co. the amount of
$2,446,540and render judgment Wiley $2,104,000 take
Lease Co. from BSI.
We affirm the remainder of the trial judgment.
court’s further We conclude good apportion there is cause to costs appeal equally against appel
lant/cross-appellee and the appellees/eross- Tex.R.App. 43.4;
appellants. See P. Dar
das v. Fleming, Hovenkamp Grayson, &
P.C., 621 (Tex.App.-Hous denied).
ton pet. [14th Dist.]
MAJORITY OPINION SEYMORE, CHARLES W. Justice. Gas, Oil Appellants, Texas Standard & (“Texas Standard”), Energy L.P. Grimes (“Petro- (“Grimes”), PetroVal, Inc. Co. Val”) “GTP”],1 [collectively appeal judg- Energy, of Frankel Offshore ment in favor *4 (“Frankel”) arising Inc. in this suit out parties’ development venture for failed gas prospects. oil damages for seeking Frankel sued GTP claims, including breach of fiducia- various duties, ry of a settlement rescission agreement previously by par- executed ties in which Frankel all of its released claims. GTP counterclaimed for Frankel’s alleged agree- the settlement breach of a verdict jury ment. After returned in no award of which would have resulted claims, damages to Frankel on includ- duties, fiduciary ing the trial breach court that Frankel recover ordered $4,010,175.06 disgorgement equitable for alleged based GTP’s breach (1) duties. The trial court also ordered agreement of the settlement rescission jury’s finding based on the fraudulently to induced Frankel execute (2) agreement that a concluded release claims in of fraudulent-inducement agreement the settlement was unenforcea- parties ble because the were fiduciaries. issues, appellate contends three Sharman, Bellaire, A. Robert M. Charles (1) by rescinding the trial court erred Roach, Jr., TX, Kim, Houston, John for (2) agreement, trial settlement Appellants. concluding parties were fidu- erred Harrison, Ma- Geoffrey Lloyd Ashish (3) ciaries, equitable-disgorgement hendru, Houston, TX, Appellee. procedural award violated various and sub- FROST, to principles. stantive GTP not seeks Panel consists Justices SEYMORE, reverse the order of rescission and BOYCE. legal except necessary refer an entity but is ence when "GTP" not a used appellants as a reference collective- appellant separately. ly. consistency, For we will use this refer- award, also equitable-disgorgement Participation Agreement, but each party was damages in its favor quests required an award of to immediately notify other jury finding based on additional presentation of a prospect to agree- settlement Frankel breached the FGP and furnish associated information. ment. Participation also con- covenants, tained non-compete mutual we precluded
Because hold during which were in effect the term of the all of Frankel’s agreement years and an additional two supported by claims that were the evi- after all parties’ interests a prospect dence, portion we reverse that trial had terminated. ordering judgment court’s rescission judg- settlement and render Frankel, According it offered Grimes denying request for rescis- and Texas Standard opportunity Therefore, por- sion. also we reverse join experience FGP of their equitable the judgment ordering tion of marketing gas oil and prospects. In the *5 disgorgement judgment render and Participation Agreement, the parties refer- nothing request Frankel take on its for enced experience and recited Grimes equitable disgorgement. We affirm the and Texas Standard would use their “best judgment, including remainder efforts” to market such prospects. nothing order that GTP take on its claim The evidence indicates that PetroVal’s for agreement, breach the settlement expertise relative to its in- contribution a albeit for different reason than described geo- volved services related to seismic and by the trial to court—GTP has failed show logic generation data for and development recovery it is entitled to on this claim even of prospects. Contemporaneously with ex- agreement. under a valid settlement ecution of Participation Agreement, FGP and signed “Consulting PetroVal Background I. (“the Agreement” Services Retainer Re- Background A. Factual Agreement”) tainer in which PetroVal July In Frankel and GTP formed agreed provide to such services use and FGP, (“FGP”), LLC a Delaware limited exclusively performance data in for FGP liability company, purposes holding for Agreement the Participation and hold data seismic data to be used for devel- licenses in confidence. and oping gas prospects. oil FGP filed a Participation The Agreement contained in Certificate Formation the State of provision requiring pay to managing Delaware. Frankel was the calls,” “cash prescribing procedures in the share, FGP, member of with a 50% and calls, event of default on cash and essen- Grimes, PetroVal, and Texas Standard tially providing party that a who failed to were percentage members with various timely pay three cash calls all forfeited the remaining shares of 50%. rights participate prospects generat- to in GTP, Frankel, day, On the same and by ed the data for which the cash calls FGP “Participation Agree- entered into a required. sepa- FGP were entered into a rights, responsibilities ment” to “define the agreement rate for company another participation and by Parties in oil and licenses, seismic-data which also required gas prospects ... presented to FGP and of cash calls. payment to promote prospects gas to the oil and industry formation, develop the for After prospects acquired FGP inter- and/or the Parties’ own through accounts....” ests certain prospects Under offshore In Oc- was un- Agreement or farmout. Frankel entitled assignment,
purchase, that it compensation Frankel rela- GTP notified der for tober multi- failing satisfy for prospects. tive to several default Frankel, According to cash calls. ple 31, 2008, On March GTP and Frankel a subter- Frankel’s default as GTP used “Settlement executed a out of FGP for Frankel fuge pushing (“the Release of All Claims” development from excluding Agreement”). The Settlement Frankel, informing prospects. Without parties’ relationship as to terminated already discussions engaged GTP had existing except continuing FGP for hold Energy Broussard of Cutter with Scott Agree- licenses. seismic for Frankel. GTP replacement ment, $135,000, agreed pay eventually formed a new Energy Cutter interests, assign to Frankel. certain (“Tri- Gas,& LLC company, Trifecta Oil GTP, assign agreed would fecta”). that, Trifecta, via Frankel claims in, relinquish its certain FGP interest develop prospects sought prospects. FGP, pursue pros- acquired had been provi- mutual release also contained broad would have been which otherwise pects claims, including sions relative to various FGP, data and utilize seismic pursued “fraud of this used promot- have been which should ment.” FGP ing prospects. *6 it essentially approached maintains GTP Agreement the Settlement When liquidity to seek Broussard executed, already engaged, GTP was via misrep- provide, Frankel Frankel failed Trifecta, negotiations to certain in sell ability its share of resented its to shoulder Ltd. to Probe Resources prospects U.S. burdens, and Frankel hid FGP’s financial (“Probe”), presi- which Broussard was contrast, In Frankel from GTP. cash calls in- potential sale dent and CEO. The that, parties’ into year over a asserts which, according volved prospects and Standard relationship, Grimes Texas Frankel, have acquired by were should attempted pros- to market had FGP, including pursued been on behalf of FGP, through which caused pects acquired in Frankel relin- prospects some continuing to con- Frankel concern about in the quished its interest Settlement op- funding for FGP’s tribute its share GTP used its Frankel claims erations. bankruptcy proceeding intervention in the to relin- pressuring as a tool for Frankel event, in another
In December its so that quish prospects interest these involuntary bankruptcy company filed title effectuate GTP could obtain clean and against Frankel an unrelat- proceeding is undisputed transaction. It Probe bank- ed matter. GTP intervened in the that, of the Settlement Frankel, before execution ruptcy proceeding creditors of as po- to disclose the Agreement, failed claiming seismic it was liable various tential Probe transaction to Frankel based charges prospects acquired by par- on on concern Frankel would execute the and cash In ties defaulted on calls. if it about the Agreement knew sponse, Frankel GTP’s claims and disputed sale, not otherwise aware and Frankel was Participation GTP breached the contended containing entire 2. We to Frankel’s release of it from the "release” hereinafter refer provision. claims for fraudulent "the distinguish release” to owned, Approximately ability assign two months and had the sale. Agree- Frankel, after of the Settlement execution certain interest a prospect— ment, prospects Trifecta sold six to Probe High Island Block purportedly A-96—as in a multi-million dollar transaction. promised therein. Frankel pleaded also fraudulently that GTP induced Frankel to used Frankel some assets execute the Settlement via pursuant to the received latter these two actions or omissions. Agreement to settle the mat- bankruptcy However, ter with its unrelated creditor. Frankel further alleged that GTP en- parties presented pay- both evidence gaged in a conspiracy to commit the above- required purportedly ments or transfers described conduct. under sought rescission the Settle- untimely. were not effected or were ment damages, punitive actual damages, imposition of a constructive B. The Suit funds, profits, proceeds, trust on all GTP, asserting Frankel sued property obtained alleged GTP via its essentially various causes of action and breach of duties.3 seeking profits to recover lost to its due defenses, Among other affirmative nonparticipation the Probe transaction. pleaded that Frankel released all alleged that GTP and PetroVal counterclaim, claims. GTP also filed a al- breached, respectively, Participation leging Frankel breached the Settlement Agreement and the Retainer Agreement or, Agreement; alternatively, if the Settle- (1) failing to utilize seismic data rescinded, request- were their prospects best efforts to market ing declaratory judgment that Frankel (2) FGP, Trifecta, forming behalf of prospects forfeited its interests in sold (3) utilizing marketing seismic data Probe. GTP filed a claim third-party *7 benefit, prospects FGP’s for GTP’s own Frankel, against Frankel’s principal, Scott Trifecta, through to the exclusion of asserting alter-ego he hable under an Frankel. theory for Frankel’s obligations. alleged GTP Frankel that breached fidu- (1) ciary using to duties Frankel FGP’s Jury Findings The C. confidential own information GTP’s jury A during heard extensive evidence benefit, the of to exclusion and detriment jury con- charge a two-week trial and the (2) Frankel, concealing that GTP had twenty-five questions.4 sisted formed Trifecta negotiating and was the (8) Probe, sale misrepresenting jury findings to The made the following Agreement the Settlement that GTP relative to Frankel’s various claims: Broussard, Probe, legal 3. Frankel also sued War- 4. Because some remained out- issues Pincus, LLC, submitted, burg principals and the of GTP. standing charge when the was the principals only GTP and its were the remain- predicating trial court refrained from the trial, ing defendants at the time of but no jury's questions answers to on its an- some against recovery principals. was ordered the instead, questions; swers trial to other the Resources, Further, LLC, was named inquiries all submitted relevant factual plaintiff, only as a but Ener- Frankel Offshore legal it to would need later resolve the issues. gy, party judgment. the Inc. is to There- fore, we will discuss the of action causes Energy, GTP between and Frankel Offshore Inc., entity we refer to as "Frankel." Agree- Conspiracy Participation Breach of the of the GTP jury The found that none entity breach- jury each GTP The found conspiracy that part entities were Participation Agreement and as- ed damaged Frankel. $342,717, damages repre- sessed total Damages Punitive of the interest Frankel senting the value damages no jury Because assessed in the Probe to receive
was entitled fiduciary duty and did not for breach any expenses less would transaction it did not answer the conspiracy, find a with the have connection incurred harm whether the question inquiring However, jury also transaction. Frankel from GTP’s breach of was GTP’s breach excused found from duty conspiracy resulted and/or breach, which prior material part. “malice or fraud” on GTP’s was excused. Fraudulent Inducement Agreement Breach the Retainer jury trial court instructed the The jury found that PetroVal breached The release did the fraudulent-inducement Agreement but declined the Retainer not bar Frankel’s damages, catego- the same assess jury The found that at least one claim. rela- ry jury submitted to was entity fraudulently Frank- induced Participation tive to breach signing el into of the interest value —the ment. receive was entitled counterclaim, respect GTP’s With any expenses it Probe transaction less materially jury entity found that each GTP have incurred in connection would but breached the transaction. excused, Frankel material- breach was ofFiduciarg Duty Breach ly but breached jury The trial court instructed excused, its and GTP breached breach fiduciary duty. Frankel a GTP owed The assessed jury first. entity jury found that each $18,000 in for Frankel’s breach.5 damages fiduciary duty, Frankel had breached claim, third-party respect With to GTP’s hands,” entity each GTP “unclean “respon- found Frankel was jury Scott “knowingly” in the participate did which, conduct, for Frankel’s based sible” *8 jury breach. The declined assess that, instructions, on meant accompanying fiduciary duty in damages for breach of elements, Frankel among other Scott categories the two that were submitted pur- be for the “caused to used [Frankel] (1) the of the interest jury: to the value perpetuate and did an pose perpetuating of Frankel to receive in the was entitled for primarily fraud on FGP actual any expenses Probe transaction minus benefit of Scott Frankel.” personal direct Frankel would have incurred connec- (2) transaction; amount Finally, jury and “the found the same tion with that each attorneys’ if of fees for any, amount obtained reasonable profit, $1,000,000 trial; and for with” its Frankel GTP: Defendant connection breach $250,000 appeals; duty. appeal for to court fiduciary Rather, to contract pleaded relative GTP breached the for rescission. claims, 5. Frankel also that jury solely jury proceeded to the question no Frankel Settlement but Participation alleged damages, jury assess on the breaches was submitted for Agreement. Agreement and request the Retainer apparently consistent with Frankel's $50,000 appeal Supreme to the transaction. The and for trial court further con- cluded that a of Texas. fraudulent-inducement Court
lease between fiduciaries is enforceable Judg- Proceedings and D. Post-Trial they contractually first disavow ment respective their fiduciary duties. The trial rejected court also other grounds GTP’s If been judgment had rendered con- for opposing rescission. Accordingly, the verdict, formity jury’s with the trial court ordered rescission of the Settle- would not have been entitled mone- ment and required party each tary recovery no jury because the found payments return and interests received damages, or liability, declined assess pursuant Agreement. to the Settlement prevailed found that GTP on an affirmative defense, Equitable disgorgement on all claims for Frankel’s dam- However, ages. post-trial Frankel filed The trial court recited that had discre- asking motion the trial court to rescind the grant tion to Frankel’s for request equita- Settlement on the jury’s based disgorgement profits ble of GTP’s result- it was induced finding fraudulently and ing fiduciary from its breach of duties but more equitable award than million for $8 awarded less than the requested amount on disgorgement jury’s finding based on jury’s finding based that Frankel fiduciary GTP breached duties. had unclean hands. The also noted response post-trial its own mo- jury’s “no” to questions answers tion, argued rescission asking whether GTP acted with or malice improper fraud, be- knowingly breached cause, among grounds, duties, other Frankel re- bearing” had “no on the decision to equitable leased claim. disgorgement. award The trial $18,000 requested judgment plus court ordered that Frankel recover a total attorneys’ $4,010,175.06 fees in its favor on based for equitable disgorge- finding ment, that Frankel $1,859,643.55 breached Settle- allocated follows: Grimes; $1,970,959.78 PetroVal; GTP also advanced var- from from grounds opposition $679,571.78 ious Frankel’s from Texas Standard. request equitable disgorgement. post-judg- The trial court also awarded recovery. ment interest on this 8, 2010,
On December the trial court Take-nothing orders signed Judgment,6 Amended Final granting requests for rescission The trial court ordered equitable disgorgement, rendering all nothing take on of its other claims take-nothing other claims judgment all jury findings, consistent with the as recit- counterclaims, explaining its rul- ed above. ings: Having rescinded *9 Agreement of Rescission Agreement, trial disregarded the court
The trial court concluded the fraudulent- jury findings the breach of the regarding inducement was Agreement release unenforceable be- Settlement ordered that parties pursuant cause the were on nothing fiduciaries GTP take its counterclaim for law; therefore, to Delaware the Settle- Frankel’s breach. The court or- trial also ment length nothing was not an arm’s that GTP take on dered (the originally signed judg- 6. The trial a Judgment operative judgment) solely court final signed party’s ment but then the Amended Final correct a name.
762 declaratory second and third are alterna- judgment. Be- GTP’s issues a quest for trial rulings, prevailing the court tive because cause these contentions finding the Scott or more these contentions would stated that one Frankel was irrelevant. ego equitable- GTP reversal of the an alter entitle necessarily award but not disgorgement parties’ all court denied Finally, the trial the order of rescission. fees no attorneys’ par- because request for damages on a claim for ty awarded below, For the set forth we hold reasons are recoverable. attorneys’ fees which by rescinding the trial court erred motion, re- post-judgment filed a the fraudu- Settlement rule whether the trial court to questing precluded release all lent-inducement punitive award is disgorgement claims the char- in nature because compensatory by are the evidence. We supported that applicability of affected settle- acterization reasoning our for this will first set forth amount of GTP’s su- ment credits and the to ad- holding apply holding and then our signed an The trial court persedeas bond. requested by dress the relief appellate disgorgement award is stating order GTP. timely a filed
“punitive in nature.”
modify
judgment or alterna-
motion to
Applicable
A.
Law
trial,
the trial
tively
for new
motion
v.
Schlumberger Technology Corp.
by
order.
court
written
denied
Swanson,
(Tex.1997), For-
II. Partners, (Tex.2008), Cowboy and Italian (1) issues, In GTP contends three Ltd. v. Prudential Insurance Co. Amer- rescinding the Settle- trial erred court (Tex.2011) ica, are the because the fraudulent- enforceability of a dis- seminal cases on was enforceable even inducement release in a provision claimer of reliance or other (2) fiduciaries, the trial were waiving fraudu- settlement a concluding parties had erred Schlumberger, claim. lent-inducement (3) equita- fiduciary relationship, emphasized principle the court award violated various ble-disgorgement fraud recognizing in earlier recited cases procedural principles. and substantive weighed be vitiates contract must issue, challenging first GTP advances its against competing concern that Agreement, rescission of fully finally resolve should be able to requests on support the full relief GTP by bargaining for and exe- disputes their (1) of the rescission order appeal: reversal dis- cuting barring all further release par- requirement and concomitant putes. Citing at 179. S.W.2d under ties received return benefits held, concern, latter the court “a (2) reversal of the Agreement; clearly parties’ intent expresses equitable-disgorgement against award claims, or waive fraudulent that, in the Settlement ground GTP on the representa- reliance on one disclaims underly- Frankel released can dispute, matters in specific tions about duties; ing claim breach preclude a of fraudulent induce- claim (3) judgment in GTP’s favor for *10 ment.” Id. at 181. $18,000, fees, based on the plus attorneys’ that a dis- the The court further remarked jury’s finding that Frankel breached always a fraudu- Apparently, preclude claimer will not Settlement Agreement.
763
However,
“(1)
lent-indueement claim.
Id.
on of reliance:
the terms of the contract
Schlwmberger record,
particular
negotiated,
the
the were
rather
than boilerplate,
conclusively negated
during
disclaimer
the reli-
and
negotiations
parties specifi
the
cally
ance element of the claim. Id. In
discussed the
support,
issue which has become
(2)
the
of
topic
subsequent
the
the
language
dispute;
court considered the’
of the
the complaining party was represented by
disclaimer under well-established
of
rules
counsel; (3)
parties
the
dealt
each
contract construction and circumstances
transaction;
(4)
length
other in
arm’s
its formation.
Id. at
surrounding
179-80.
parties
were knowledgeable in
plaintiffs clearly
The
busi
disclaimed reliance
matters;
(5)
ness
language
representations by
the defendant about
was clear.” Id. The court also observed
the subject
agreement
matter of the
con-
that, if the parties, like those in Schlum
at
taining the disclaimer.
Id.
180. Other
are
berger,
a
effecting
“once and for all”
pertinent
factors were that
exe-
claims,
may
settlement
such fact
also
cuted
agreement
to end their “deal”
support enforcement of a fraudulent-in
dispute
regarding
pro-
resolve a
ducement release.
Id. at 58.
issue,
represented by
at
both
ject
were
counsel,
highly competent legal
the parties
Subsequently,
Cowboy,
Italian
dealt at
length,
arm’s
and both were
highlighted
court
what the Forest Oil
“knowledgeable
sophisticated
business
court had enumerated as the fifth “factor”
players.” Id.
and stated that whether the
ex
Later,
Oil,
in Forest
court
upheld
pressed
a “clear
unequivocal”
intent to
disclaimer of reliance in
settlement
representations
disclaim reliance on
or to
that was intended to resolve waive fraudulent-inducement claims is a
past
both
future
requirement
claims. 268 S.W.3d threshold
which
be
must
sat
58-54,
at
56-58.
court reaffirmed
isfied before consideration of
circum
showing
may
that facts
exist
such a provi
surrounding
stances
contract
formation
“
(the
factors).
sion
‘the requisite
lacks
clear and un
other Forest Oil
See Italian
equivocal expression of
necessary
4,
8;
intent
341
at
Cowboy,
331-37 & n.
n.
S.W.3d
”
disclaim reliance’ but stated a court must
see also Allen v.
Energy Holdings,
Devon
always
L.L.C.,
examine the
totality
contract and
(Tex.App.
S.W.3d
filed)
circumstances
determine
the dis
pet.
(citing
[1st
Houston
Dist.]
binding.
claimer is
at 60 (quoting
Id.
Cowboy
Italian
stating
clarity
when
179).
Schlumberger, 959
at
requirement
S.W.2d
Be
is threshold
hurdle
cause
appeals
passed
courts of
had seemingly dis must be
for
enforcement
dis
agreed
Schlwmberger
since
on which
provision
fac
claimer and
lacking clear and
relevant,
tors
were most
unequivocal
preclude
Forest Oil
disclaimer will not
following
court
guide
held that
should
fraudulent inducement claim
regardless
circumstances).7
a decision on
of a
enforceability
disclaimer
surrounding
Cowboy
specify
pass
7. The Italian
did
the threshold hurdle is otherwise en-
consideration,
clarity
Allen,
whether the
in addition
See
forceable.
765 listed, incorrectly, on fraud not preclude the Settlement would albeit Frankel’s fraudu- Agreement. petition, Frankel as- lent-inducement claim based on GTP’s al- Energy” “Grimes signed the moniker leged misrepresentations within Settle- petition, in both entities. Later obligation about Energy ... alleged Frankel that “Grimes thereunder. We consider these issues to- signed Agreement]....” Settlement [the gether we conclude that Frankel allegation judicial We construe this as a clearly unequivocally released fraudu- Co.,” Energy that “Grimes admission lent-inducement claims based on extra-con- case, party party present to the was a fraud, tractual but not fraudulent-induce- Agreement. Settlement See Hori- ment misrepresentations claims based on Auld, Corp. Healthcare v. 34 zon/CMS Agreement. within the Settlement How- (Tex.2000) (stating, “judi- S.W.3d ever, conclusively evidence establishes clear, deliberate, cial admission must be there no such misrepresentations were in ... unequivocal statement and occurs itself. when fact conclusively an assertion of is a. Release of fraudulent-inducement in established live Ac- pleadings_”). claims on based extra-contractual fraud8 cordingly, Energy enjoys “Grimes Co.” any benefit of enforceable release of language relevant the release “Grimes” contained provides: release, hereby ... does [Frankel] ac- language
2.
“the release
Whether
Grimes,
quit
discharge
and forever
Tex-
unequivocal”
clear and
and enforceabili-
as Standard and
...
PetroVal
from all
ty
alleged misrepresentations
relative to
future,
existing,
known and unknown
within the Settlement
claims, demands and causes of action for
future,
existing,
all
known and unknown
the trial court refused to en-
Although
remedies,
damages and
which have ac-
force the fraudulent-inducement
release
may
crued or
ever accrue to [Frankel]
length
based on
“arm’s
transaction”
(i)
...
on
for or
account
the claims
factor,
parties’
we first consider the
dis-
Bankruptcy
made
it in the
Proceed-
pute regarding
clearly
whether Frankel
(ii)
ing,
any and
might
all claims which
unequivocally
released fraudulent-in-
(iii)
claims,
any way
any
relate in
to such
actually
ducement claims because this is
brought
and all claims which were
or
requirement.
threshold
See Italian Cow-
have
8;
brought
could
been
boy,
demands, any of action of “fraud inducement and causes tort, nature, in or in or Frankel language, contract ment.” Based on this whether by any in arising or virtue statute a claim for “fraud under contends released recognized now regulation, Agreement” only are the or inducement of this or may recog- created by law or that be fell one or the claim within more manner, any in- by nized in the future did categories but Frankel’s claim three limitation, statute, by cluding without any categories. not into fall decision, judicial past, regulation or (i), Frankel respect category With future, unknown in- personal and known claim argues its fraudulent-inducement and damages, all other juries, property by in was not a made “claim[] [Frankel] losses, any or kind damages remedies Proceeding.” Bankruptcy the law recognized by or that that are now recognized or in the may be created (ii), Frankel respect category With future, manner, including any without by claim argues its fraudulent-inducement limitation, statute, by regulation judi- or any way to claims does not “relate in such decision, not limited to including, cial but Bankruptcy Proceeding]” be- in [made damages, exemplary all and all actual Bankruptcy in the Frankel’s claims cause statutory damages, all interest punitive Proceeding exclusively its dis- involved kind, any fraud penalties of in or filed putes with the unrelated creditor who inducement this the proceeding. any judgment interest of pre- post (iii), Frankel respect category With claims, excepting and all such claim argues its fraudulent-inducement may claims arise in the future out of have or which could “brought not one Agreement.9 obligations under this brought Bankruptcy Proceed- been added). (emphasis (1) ing litigation” or in other why advances several reasons the fraud after Frankel discovered provision this does not contain clear dismissed, Proceeding was Bankruptcy unequivocal release of fraudulent-induce- (2) necessarily quoted language
ment claims. accruing be- past means the tense —claims First, suggests above-em- execution of the fore in the phasized “fraud inducement phrase ment —but considered Agreement,” when execu- claim could have accrued until the entire provision, context of does Agreement, at tion of the Settlement clearly its intent to release fraudu- express earliest, and, fact, not accrue until did claims. As Frankel as- lent-inducement the fraud. Frankel later discovered serts, all “for it released claims or on conclude that fraudulent- categories account three of claims enu- We of’ (iii). in, (i), (ii), at encompassed After claim merated as identi- inducement least, (ii) “any claims provision category and all fying categories, the three — “the states, any way to” might shall include which relate foregoing “all of the Bankrupt by made in the description [Frankel] ...” of various claims followed claims, remedies, including cy Proceeding.” damages, or no involv- agents, there is issue construing portions 9. For of the re- etc. because ease in issues, pertinent present persons have enti- ing lease to the we other release of such language stating omitted encom- ties. affiliates, officers, passed assigns, parties' First, reject sug we of the Settlement Agreement gestion “the made in any way [Frankel] claims to” Frankel’s “relate[s] claims Bankruptcy Proceeding” against in the GTP in Bankruptcy involved Proceed- fact, exclusively dispute ing. "with the unrelated In Frankel does not contend contract, construing creditor. we pre fraudulent-inducement claim fails *14 (ii) (i) parties every satisfy sume the intended clause to to category category in- Res., Heritage have some effect. Inc. v. against cludes Frankel’s claims in the NationsBank, (Tex. Bankruptcy 939 121 Proceeding. merely S.W.2d 1996); (ii) Schlumberger, see 959 at that category S.W.2d asserts cannot apply be- (i) (stating 179 that of category well-established rules cause only means Frankel’s contract governed against construction whether claims the unrelated creditor. Be- un provision expressed requisite clear and cause have rejected we proposed Frankel’s reliance). (i), equivocal intent to disclaim We of category reject construction we also writing (ii). reasoning consider the entire and to its to attempt category relative give provisions harmonize and effect to all Moreover, we no pur- can conceive of by analyzing provisions the with reference pose the parties for to include a of release agreement. to the whole Frost Nat’l for claims “fraud in the inducement of this Bank, S.W.3d at 312. Agreement” other purpose than sole in plain language. denoted this lan- If “the claims made in [Frankel] if, is guage meaningless only posited by meant as Bankruptcy Proceeding” Frankel, a claim for fraudulent dispute inducement Frankel’s with the unrelated credi- tor, particular of this Settlement then there was no reason for Frankel Instead, was released fit if it within one of the release GTP for those claims. categories three clearly pos- a but could not have parties intended to effect GTP, sibly fit within of categories. one against release of Frankel’s claims Rather, we the parties conclude included party to the Settlement language express In a clear and un- preamble ment, equivocal intent to release a claim for recited the basis for their against fraudulent each respective claims other and essentially and such a they executed the re- defined fact, claim within encompassed
solve all the enumer- of those claims. Frank- categories. ated el’s release contained in section of the entitled “MUTUAL Additionally, Frankel asserts that Therefore, RELEASES.” Frankel’s phrase “fraud the inducement this lease of GTP for “the claims made Agreement” is within list of included Proceeding” in the Bankruptcy [Frankel] damages expressly and did thus he ” encompassed against claims “claim fraudulent induce- for GTP. portion ment. Frankel refers (ii) provision categories the three follows Category is broad: Frankel released of released claims: “any GTP for and which might all claims any way relate in include, to” Frankel’s claims all of the shall but not foregoing against Bankruptcy to, GTP in the past, Proceed- be limited all claims ... for future, ing. Because executed the Set- known unknown in- personal and tlement Agreement to resolve Frankel’s juries, property damages, and all other losses, against claims GTP in the Bankruptcy damages any or remedies of kind Proceeding, including, Frankel’s claim fraudulent ... but not limited to all actu- hereby. relying Each of us is exemplary punitive released damages, al all or judgment.... on his her own or statutory penal- interest all damages, kind, fraud in the induce- Schlumberger, 959 S.W.2d at ties Agreement, pre- of this Each of the Plaintiffs and Intervenors and all represents interest post judgment expressly warrants and no represent hereby does state claims.... here- or is not promise agreement which added). (emphasis her, him, expressed has been made executing it in releases contained phrase “fraud acknowledge We and that none Agreement” is inducement of this *15 or relying upon any them is statement description in of directly included the agent any representation any of of released, is but instead type of claims hereby. Each of being released parties descrip- specific within the more included relying Plaintiffs and Intervenors is “losses, type of tion that follows his, her, judgment.... on or own for are or remedies” which claims damages Oil, at 54 n. Forest 268 S.W.3d intermingled among a and then released Although lan the disclaimer-of-reliance damages. of Howev- types list of various Schlumberger in and Forest Oil guage er, again presume we must to release the fraudulent-in was sufficient phrase in the induce- intended “fraud cases, in the Texas ducement claims those to have some Agreement” ment of this imposed has a re Supreme Court Inc., Res., Heritage See 939 effect. quirement of effective release in- at 121. Because fraudulent S.W.2d con fraudulent-inducement claims must ], damages type is of “loss[ ducement not a See language. tain disclaimer-of-reliance remed[y],” only possible reason for or 323; generally Cowboy, Italian 341 S.W.3d including phrase parties’ is the intent Oil, 51; Schlumberger, 268 S.W.3d Forest “losses, damages claim release S.W.2d 171. Rather the Schlumber 959 in in- on “fraud or remedies” based stated, ger clearly “a court release in- Agreement,” of this ducement parties’ intent to waive expresses of remedy cludes the rescission. claims, or one that fraudulent inducement representations disclaims reliance Next, there no Frankel contends is dispute, pre in can specific about matters release of fraudu- unequivocal clear and a claim of fraudulent inducement.” clude because, claims unlike the lent-inducement Schlumberger, (empha at 181 959 S.W.2d following Schlumberger and Oil Forest added); Cowboy, 341 sis accord Italian expressly or provisions, Frankel did not fact, 332 4. In S.W.3d at n. release implicitly reliance on GTP’s mis- disclaim is than a dis present case broader representations: of reliance because reliance is claimer us a expressly ... warrants one element of fraudulent-inducement [E]ach Corp. See USA claim. Formosa Plastics ... represents hereby does state Inc., Contractors, Eng’rs v. & Presidio represent promise ... that no or (Tex.1998). 41, 47-48 expressed agreement which is not herein him has been made to or her execut- there was no Finally, suggests release, is ing this and that none of us effective fraudulent-inducement represen- relying upon any statement or lacked the Settlement In Italian being merger integration clause. agent tation of merger may that a Cowboy, the court held arise the future out the obli- alone was insufficient to constitute a clause gations Agreement.” under this par- of reliance thus did not bar disclaimer ties did not clearly confine this exception claims. 841 S.W.3d to claims for breach However, at 331-37. the court did not Agreement. Rather, preser- the broader hold that an must contain both vation “aris[ing] of claims ... out of the merger express clause and either an obligations” under the waiver fraudulent-inducement claims or ment can be construed as encompassing disclaimer reliance in order to effect a even a claim for fraudulent release of fraudulent-inducement claims. based on a misrepresentation within the fact, Cowboy See id. Italian agreement regarding a party’s obligations supreme earlier reiterated court’s thereunder. Schlumberger statement either of provision Frankel relies on in the Set- the latter two provisions effective tlement making following release fraudulent-inducement claims. disposition of High Island Block A-96 (citing at n. 4 Schlumberger, S.W.3d 332 & Island”): (“High 179, 181). 959 S.W.2d at *16 GTP shall hold in High its interests ... summary, Agree- in the Settlement Block Island A-96 in trust for the bene- ment, parties clearly unequivocally and fit of [Frankel] until November expressed their intent release fraudu- to 1, 2009, At time to prior November lent-inducement claims based on extra-con- upon request, GTP shall im- [Frankel’s] tractual fraud. (or mediately assign to be as- cause b. Release of fraudulent-inducement signed) to all their right, [Frankel] alleged misrepresenta- based on claims title and in High interest and to Island Agreement tions within the Settlement (being seventy- Block A-96 an undivided Frankel asserts that no Texas au interest).... percent five has that thority held a fraudulent-induce GTP misrepresented contends ment release or disclaimer of reliance is interest, ownership ability its assign to if a alleged enforceable fraud was mis interest, that in High Island because rec- representation in the containing contract ord title to 60% of referenced 75% or release disclaimer. Frankel also by interest was owned Texas Standard Oil suggests specific language of the (“TSO”), Company & Gas but a related precludes application misrepre to separate entity & from Texas Standard Oil Agree sentations within the Settlement (the Gas, party L.P. to the Settlement ment. We need not decide whether a case) Agreement present and the and GTP or fraudulent-inducement release disclaim knew that TSO was in bankruptcy er generally is enforceable when the al unable to transfer title to Frankel without leged misrepresentation fraud is a within approval bankruptcy court. agree the contract because we the parties present express case did not responds that it did not make a clear and un misrepresentations it a such held equivocal preclude intent to fraudulent-in High beneficial interest Island at the misrep ducement claims based on such a time the Settlement was exe resentation. cuted had be ability to “cause to following The its phrase assigned” is at end interest. We construe GTP’s “excepting only argument challenge legal release: such claims as as a to sufficien- disagree. title to Frankel. We jury’s 75% record supporting of the evidence cy trial, both principals At Grimes misrepre- finding that GTP made implicit acknowledged indeed Texas Standard within the sentations High to owned record title 15% of ment.10 to the other 60% Island but record title reviewing legal-suffi When in the Set- the 75% “interest” referenced contention, review the evidence ciency we by owned TSO. tlement chal most favorable light in the However, according tes- undisputed indulge every reason lenged finding Standard, timony Grimes and Texas City support it. inference would able interest in the 60% GTP held a beneficial Wilson, Keller v. agreement. a nominee pursuant (Tex.2005). favorable evidence We credit representation testified that GTP’s Grimes fact disre finder could and reasonable Agreement regarding in the Settlement contrary evidence unless a reasonable gard true, High explain- interest Island was Id. at 827. fact finder could not. title” held “bear record ing [sic] TSO would legally is sufficient if it evidence GTP owned a comprising but the entities per enable a reasonable and fair-minded title interest: “There’s record beneficial Id. under to reach the verdict review. son title, equitable or and there’s a beneficial insuffi legally “no evidence” or There is that, being it you call but was whatever (a) complete when there is a cient evidence benefit of other held (b) fact, a vital of evidence of absence [TSO], authority assign had full and it of law evidence barred rules Roberson, Timothy parties.” out those *17 weight evidence giving from to concurred, tes- principal, Texas Standard’s fact, (c) evi a vital prove offered to tifying Texas Standard held beneficial that no prove to a vital fact is dence offered to Island. High title (d) scintilla, or more than a mere that In the evidence shows support, oppo establishes the conclusively evidence At the High was federal lease. Island 810; Mer vital fact. See id. at site bids government accepted time the federal Havner, Pharms., rell Inc. v. 953 Dow Island, was not High Texas Standard (Tex.1997). 706, S.W.2d 711 We hold purchase to federal leases. qualified GTP did conclusively evidence establishes Hence, TSO, entered qualified, which was alleged misrepresentation not make the Texas agreement into a nominee Frankel. 2007, in TSO August which Standard behalf, the lease on complaint agreed purchase The Frankel’s is that to gist of nominee, In 75% as of Texas Standard. GTP it owned misrepresented that, High agreement, agreed mis- TSO record title in Island and thus the nominee lease, it assign High if it Island represented ability it had the to were awarded brief, specific ground original on which the trial appellate GTP did not its specifically alleged misrepresenta- address refused enforce the fraudulent-inducement to Agreement. spe- tions in the Settlement GTP argued release—the status. GTP brief, cifically reply issue in addressed this errone- court’s conclusion was the trial respond argument appel- to an in Frankel’s under, ap- enforceable ous and the that, suggests late brief. Frankel GTP’s suggested GTP plicable law. also brief, challenge opening required was probably rendition error caused trial court’s legal sufficiency supporting of the evidence judgment. Accordingly, GTP improper anof jury’s implied finding misrepresenta- original required of GTP in its met burden tions We dis- in the Settlement brief. brief, agree. original challenged In its GTP Williams, (Tex. assign would the lease to Texas v. promptly 353 S.W.3d 2011) (“[T]he Standard, agreed to doctrine of quali- become inclusio unius leases, ... is the although presumption purposeful fied to hold federal TSO inclusion of specific terms in assigned writing yet had not the lease Texas implies purposeful exclusion terms Standard when that do not appear”). parties did not was executed. include any words in the Settlement Accordingly, undisputed evidence Agreement modifying or speci “interest” shows that GTP did not 75% record hold fying type what seventy-five “undivided title to at the the Settle- High Island time “Interest,” percent interest” GTP held. ment but did executed by itself, is a term encompasses broad hold at least 75% beneficial interest. a multitude of property rights, including However, contrary sugges- to Frankel’s “beneficial interest.” See v. Milner Mil tion, represent GTP did not in the Settle- ner, (Tex.2012) 620-21 that it 75% record held (explaining “‘beneficial profit, interest’ is Instead, to, title. GTP promised upon advantage benefit or resulting from con (or “immediately request, assign or ownership tract of estate as distinct cause ... assigned) to be all of [GTP’s] control”); legal ownership from or Black’s right, High title and interest in and to (9th ed.2009) Law Dictionary 885 (defining (being Island Block A-96 an undivided sev- “beneficial interest” as right expec “[a] ” interest) enty-five .... percent This (such tancy in something as a trust or an promise repre- cannot be as a construed estate), opposed legal title to that GTP sentation that held record title 75% thing.”). Because owned a 75% bene but “immediately rather an interest, any ficial representation in the (or assign assigned)” to be whatever cause Settlement Agreement that GTP owned held, “right, title interest” which “an seventy-five percent undivided inter GTP then defined as “an undivided seven- est” was not false. ty-five percent (emphasis interest.” add- misrepre- Frankel’s contention that GTP ed). *18 sented the Settlement Agreement its We afford words used a con ability assign to 75% to High record title ordinary, tract their plain, generally hinges Island on Frankel’s contention that accepted meaning unless the contract misrepresented GTP that it owned 75% shows the words were used in a different repre- record title. Because GTP not did Res., Inc., sense. Heritage 939 S.W.2d at title, it it sent owned 75% record did not 121; Moon, see Lesikar v. misrepresent that it “immediately could 367 (Tex.App.-Houston assign, assigned” [14th or cause be 75% rec- Dist.] pet. denied); title, also See City see Houston ord as suggested Frankel.11 Standard, interest; i.e., acknowledge 11. We that Texas entities relative to their entities, (albeit party not the GTP complains incorrectly) other two was a that TSO, although represented Agree- the nominee entities in the Settlement held, paid they "immediately ment Grimes testified that GTP for the would as- record However, (or sign assigned),” be title held cause to title to appeal, TSO. Frank- record Frankel, argue irrespective particular el does of which not that the other two GTP entity allegedly held the title and misrepresentation entities record made would effect they the transfer. any lacked interest in of the refer- 60% Instead, Further, enced the focus Frankel's promised 75%. if GTP to "im- even had (or complaint aspect mediately assigned)” assign is the "record tide” of his cause to be contention, Frankel, complains not distinction between GTP record title to transaction” fac- conclusively length tion of the “arm’s summary, the evidence tor. fraudulently GTP did not establishes Settlement execute the induce Frankel nothing boilerplate about the There is any misrepresenta-
Agreement based on
contract
Agreement;
Accordingly, we
agreement.
tion
relationship
unique
parties’
to the
clearly
that the fraud-
reject
contention
Indeed, Frankel does not
dispute.
pre-
release does not
ulent-inducement
the Settlement
contest
Frankel’s fraudulent-induce-
all of
clude
Rather, Frankel contends
negotiated.
was
committed a
because GTP
claims
ment
that, during
parties did
negotiations, the
encompassed
which was not
form of fraud
“specifically
not
the issue
]
discussf
within the release.
topic
present dis-
has become the
of’ the
is the Probe trans-
pute
topic
because such
Extrinsic Forest Oil factors
information
precisely
action and it is
Having
the Settlement
concluded
order
that GTP concealed from Frankel in
unequivocal
satisfies
“clear
to induce the Settlement
relative
extra-con-
requirement
intent”
acknowledge
case
present
We
that the
was no mis-
tractual fraud and that there
be-
present
atypical
seems to
situation
representation within
concealments
cause the extra-contractual
we turn to the extrinsic Forest
fraudu-
forming
grounds for Frankel’s
dispute
it
Oil
Frankel does
factors.
are
con-
lent-inducement claim
the same
negoti-
during
counsel
represented by
forming,
part,
grounds
cealments
of the Settlement
ation
execution
Thus,
claim.
breach-of-fiduciary-duties
knowledge-
Agreement and Frankel was
had discussed the exact
However,
business matters.
able about
pres-
grounds on which Frankel based its
en-
release does not
Frankel contends the
claim, there
breach-of-fiduciary-duties
ent
nego-
tirely satisfy
pertaining
the factor
likely would not have been
fraudulent
tiation of the Settlement
Frankel would
inducement because
fur-
factor and
length
“arm’s
transaction”
have
executed
argues that
all factors
application
ther
transaction or
if had known of the Probe
against enforcement.
weighs
concealing material
at least that GTP was
However,
information.
the Forest Oil
of the con-
a. Whether “the terms
must
opine
court did not
negotiated,
rather
than boil-
tract were
grounds
the exact
have discussed
during negotiations
par-
erplate, and
*19
dispute,
subsequent
form the
basis
specifically
discussed the
issue
ties
satisfy
gener-
in
this factor. See
order
topic of
become the
the sub-
which has
fact,
ally, 268
at 58.
In
S.W.3d
sequent dispute”
all
unknown” claims
released
“known and
may
this factor next
“which have accrued or
ever accrue
We will consider
[Frankel],...”
applica-
it
to our
pertinent
because
is also
Thus,
ability
Agreement.
could
misrepresented
GTP
GTP
its
to make
that
ability
assignment
only
misrepresented
to “imme-
did
not have
the
because not
TSO
(or
(rather
GTP)
assigned)”
diately
be
rec-
assign
title
cause to
own record
but also
than
High
in
Island
such interest
bankruptcy and
effect a
ord title
TSO was in
could not
proceeding.
bankruptcy
up
bankruptcy
approval
the
was tied
in
transfer without
However,
Nonetheless,
contrary
sug-
promise to "imme-
GTP did not
court.
to Frankel's
(or
assigned)”
be
rec-
bankruptcy
diately assign
gestion,
petition was filed
cause
TSO's
June
after execution of
ord tide.
in
2008—three months
unaware
Although Frankel was
The trial court concluded that
that
fraudulent-inducement
Probe
when it
release was unen-
transaction
executed
forceable as a matter of law because the
Agreement,
“issue” in
Settlement
an
both
parties were fiduciaries and thus did not
present disputes
the earlier and
is whether
with each
in
length
other
an arm’s
]
“dealt
an
in
Frankel had
interest
various pros-
transaction.” The trial court concluded
in-
pects. Specifically, the earlier dispute
provision
such a
is enforceable
if the
claim
volved GTP’s
that Frankel defaulted
parties
contractually
first
disavow a fidu-
on
charges
various
or cash calls and thus
ciary relationship.
in certain prospects
forfeited its interest
default,
versus Frankel’s denial it was in
parties
dispute
they
whether
claim
prospects,
to an interest
in certain
fiduciary
ever had a
in
relationship
assume,
place.
and claim
GTP
first
We will
solely
breached the Partic-
ipation
purposes
deciding enforceability of the
Agreement.
resolving this
When
release,
dispute,
parties, among
other agree-
parties
fiduciary
had a
relationship relative
ments,
terminated
relationship
their
operation
to their
of FGP
performance
FGP
Frankel relinquished
its interest
Participation Agreement.12
But the
in
prospects
certain
associated
parties also dispute
they
whether
still
claims. Frankel
an
now claims
interest
owed each other any fiduciary duties dur
prospects
subsequently sold to Probe
ing negotiation and execution of the Settle
purportedly
prospects
which
were FGP
and thus
whether was
should
been
on
pursued
have
behalf
length
an arm’s
transaction.
FGP, including some in
Frankel re-
suggests
parties
longer
no
linquished its
interest
any fiduciary
owed each other
duties be
Agreement. Accordingly, the fact that the
they
cause
had become
litigants
adverse
an
central
discussed
issue
to both
(via
bankruptcy
GTP’s intervention
present disputes supports
earlier and
proceeding)
they
when
executed
Set
conclusion that
contrast,
tlement
including
its release
future claims
authority
cites Delaware and Texas
for the
inducement,
freely
fraudulent
negoti-
was
proposition that
fiduciaries continue
owe
ated.
each other duties
when
even
their relation
b. Whether
“the
dealt with
ship has become
or litigious.
adverse
See
length
each
other
an arm’s
Paige Capital Mgrnt., LLC v.
Mas
transac-
Lerner
Fund, LLC,
5502-CS,
ter
Action
tion”
Civil
No.
Frankel,
According
fiduciary relationship
Delaware
im-
law
disclaim the default
be-
poses
relationship
Participation
a default
cause
relationship
operating
members of
LLC unless
for the LLC and this
affirmatively
language
disclaimed
members.
was not an affirmative disclaimer.
disagrees
Under a section entitled “Administration
with Frankel’s characterization
*20
Agreement."
Participation
this
alternatively
of Delaware law but
contends
provision
language
ment
a
Fi-
contained
entitled “No
this
was sufficient to disclaim
stated,
duciary
fiduciary
Relationship,” which
"Noth-
duties. We need not decide whether
ing
parties
fiduciary relationship
intended
a
this
is
to create
had a
rela-
venture,
joint
partnership,
agency,
operation
perform-
or
their
other
tive to
of FGP and
relationship creating fiduciary
quasi-fidu-
Participation Agreement
or
ance of the
because
ciary
or
relationship
duties
similar duties and
of
obli-
we conclude existence
such a
”
reasons,
gations
Among
preclude
....
other
Frankel
did not
enforcement of the fraudu-
provision
contends this
was insufficient
lent-inducement release.
(Del.Ch.
8,
facts
invite
the law—under these
would
Aug.
at *31
2011 WL
2011) (“As
everyday
law,
consequences
unfortunate
for
matter of
it is
a
settled
and the efficient
a conflict does
business transactions
that the existence of
clear
disputes.
After-the-fact
fiduciary of re
settlement
governing
absolve a
not
easily
are
acting
protests misrepresentation
self-inter
for
in its own
sponsibility
contractually
est.”);
parties
and
who
Schlumberger,
lodged,
at 175
959 S.W.2d
Peckham,
promise
rely
not to
v.
extra-contractual
(recognizing that
Johnson
that,
(1938),
promise
than
court
statements —more
132 Tex.
S.W.2d 786
upon
not
they
to anoth
that
have in
relied
“partner selling his interest
held
fact
be
to their
duty
such statements —should
held
fiduciary
requiring
has a
partner
er
can-
If
of reliance
all
information
word....
disclaimers
important
full disclosure of
finality
preclude postdeal
ensure
and
of the interest
... even
about the value
inducement,
then
relations
claims
fraudulent
though
partners had strained
contract,
among
even
had
an account
freedom of
partner
one
sued for
knowledgeable parties advised
partnership”);
most
ing
dissolution
(“If
counsel,
Johnson,
knowledgeable legal
the most
is
at 788
the exis
grievously impaired.
of strained relations should be suf
tence
exception,
design
then a
fered work an
(cita-
Id.
(emphasis
original)
at 60-61
bring
easily
could
about such
ing
omitted).
fiduciaries,
Axiomatically,
tions
for a
stage
sharp
relations to set
bar
associates, might
like
other
business
Therefore,
maintains
Frankel
gain.”).
finality
disputes.
wish
ensure
to their
that,
negotiation
during
Thus,
fi-
expressed
their
intent to ensure
duty
owed Frankel
via a
nality,
fraudulent-inducement
transaction.
potential
disclose the
Probe
reliance,
their
well as
disclaimer
that
existence of
suggests
Frankel
mere
contract,
should
accorded
freedom
be
duty
automatically vitiated
to disclose
other
respect
the same
as the intent of
any fraudulent-inducement
release. We parties. See id.
Rather,
that,
disagree.
we conclude
even
Further,
authority
cites no
from
if execution of the Settlement
Supreme
the Texas
Court or our court
entirely
length
was not
an arm’s
transac
that a
holding
tion
GTP still owed Frankel some
in a settle-
lease or disclaimer of reliance
disclose,
fiduciary duty to
existence of such
per
agreement
between fiduciaries
fiduciary relationship
automatically
did not
se unenforceable.
trial
vitiate
fraudulent-inducement release.13
Schlumberger
suggest
First,
ratio
general
based on the
proposition.
stand for such a
Forest Oil
upholding
nale for
fraudulent-induce
Schlumberger,
indeed ad-
the court
reliance, we
ment release or disclaimer of
enforceability of a
dressed
disclaimer
adopt
refuse to
a blanket rule
such
concluding
after
reliance
agreement be
provision in a settlement
were not fiduciaries
thus dealt
tween fiduciaries is unenforceable. As the
length
each other in an arm’s
transaction.
emphasized:
Forest Oil court
court first
See
775 enforceability of the guided reasoning Schlumberger issue relevant to our [in ]” disclaimer; party urging the enforcement ... present Schlumberger “factors the arm’s emphasized transaction was Forest Oil [in ]” elements that all —not length. See id. at 175-81. The court did enforceability must be established for of a directly have state whether would disclaimer. Id. at 60. Although, as men- fiduciary above, issue neither addressed tioned court Cowboy Italian However, id. party had raised it. See expressed subsequently that a “clear and court later that lack of a fiducia- indicated unequivocal” expression of in parties’ ry integral relationship was to the court’s representations tent disclaim reliance on uphold decision to the disclaimer. See id. or to waive fraudulent-inducement claims (“As at no of a there is evidence is an requirement, initial see 341 at S.W.3d relationship, or confidential 336, 8, 337 n. the other extrinsic consider correctly trial rendered a judgment court regarding ations sur circumstances ... against plaintiffs] on their claims [the rounding contract “fac- formation are fiduciary duty fraudulent breach requisites enforceability tors”—not for of a inducement.”). event, In the court did disclaimer. See Cowboy, Italian expressly hold that a disclaimer be- 336, 8; S.W.3d at 337 n. McLernon v. tween fiduciaries is se unenforceable. per Inc., (Tex. 315, Dynegy, 332-33 See id. at 175-81. App.-Houston pet.) [14th Dist.] no (enforcing disclaimer-of-reliance clause
Nonetheless, when
Forest
court
Oil
only
ex
regarding
“scant” evidence
clearly
subsequently more
defined exis-
of complaining party’s representation
tent
length
tence of an arm’s
transaction as a
by counsel when all other
con
consideration,
Forest Oil
relevant
the court did not
stating
siderations were
satisfied
expressly hold that a
enforce-
disclaimer is
if complaining party
repre-
even
was not
agreement
able
if the settlement
counsel,
sented
Forest Oil consider-
length
sulted from arm’s
transaction or
elements);
ations are factors rather than
hold that
disclaimer between
otherwise
Allen,
(stating
Moreover, dispute. These topic present the Forest as negate any “one-di- facts notion that Frankel was prescribe Oil court did its dependent for the somehow on GTP as fiducia- “arm’s requirement mensional” by ry explain the fraudulent-inducement transaction” factor length advocated ability trial release or Frankel’s under- Specifically, Frankel and the court. stand the release was inhibited due to possibility did not foreclose court circumstances, Likewise, ne- these that, fiduciary relationship. considering all the that, irrespective facts demonstrate gotiation of a fraudulent-inducement voluntarily might fiduciary relationship, bear as- Frankel lease between fiduciaries to the fraudulent-inducement re- pects length an arm’s transaction. See assented Oil, at lease. generally Forest factors,
Accordingly, Relative to these we also consid- disagree we Frankel’s that, was significant although er it Frankel suggestion that a fraudulent-inducement per during negotiations is unen- unaware release between fiduciaries se settlement fraud, the they parties GTP’s extra-contractual simply generally forceable subject about duty obviously each other a to disclose. Even discussed the owed duty which GTP information—FGP GTP still Frankel some concealed owed disclose, prospects of the fraudu- purpose whole —because parties’ dispute was ment recited the over lent-inducement Frankel had an interest in certain waiver of claim that GTP violated that whether Thus, duty. reasoning prospects, relinquished our Frankel interest consistent with en- termi- prospects, parties should be allowed to certain that fiduciaries finality perti- relationship nated their FGP. disputes, sure to their Consid- fact, whether, ering together all the with Frankel’s inquiry considering nent is circumstances, representation existence of business acumen and counsel, relationship opportu- vitiates a conclusion that Frankel was afforded nity question its for itself GTP’s motives bindingly Frankel waived claim that duty wishing pros- GTP violated to terminate FGP and own to disclose. pects free clear Frankel wheth- Settle Even if execution of the concealing er GTP was information re- considered en cannot be garding plans yet, prospects; tirely length an arm’s transaction because chose to execute the fraudulent- fiduciaries, the still the Forest were (recog- at 58 inducement release. See id. support enforceability Oil factors nizing, knowledgeable parties “when ex- release. As we con- pressly during discuss material issues discussed, have the fraudulent-inducement negotiations tract but elect to nevertheless unequivocal, release is clear and include waiver-of-reliance and release-of- counsel, represented was its own provisions, generally claims the Court will sophisticated Frankel was about business contract”). uphold the matters, Moreover, negotiated, parties specifi although freely expressly Oil, the cally the issue which has become listed as a factor in Forest fact the discussed length proposition the effect of a dis- dealt at arm’s rela- for the factor determined "un- claimer reliance should be tive to enforcement of disclaimer fraudu- particular presented.” Oil, facts Id. Addi- der the lent-inducement release. See Forest Oil, tionally, pre-Forest was decided Harris S.W.3d at 60. expressed which the that whether the
777 litigants parties they relationship prevent were adverse when their further dis- putes. also executed enforcement the fraudulent- supports summary, In considering all the For- posture, again This inducement release. factors, est we Oil conclude that that evi- together considered with Frankel’s busi- negates any GTP, dence by notion that by representation ness acumen and coun- fiduciary relationship, virtue foisted sel, indicates Frankel understood that a fraudulent-inducement on an un- by protecting was its own interests Instead, witting Frankel. the factors dem- a negotiating inclusion of fraudulent-in- that, onstrate despite fiduciary rela- release, ducement not could rea- tionship, sophisticated parties, represented sonably rely protect on GTP to counsel, by negotiated their own and vol- provision, interests relative to this and untarily agreed unequivocal, clear and Frankel needed to evaluate for itself provisions releasing any mutual for claims
whether the provision was its best inter- fraudulent-inducement their Settlement est.15 Further, the fact the Settlement Finally, reject we the trial court’s rea- ment contains mutual fraudulent-induce- soning parties required were a supports ment releases conclusion that contractually any fiduciary disavow duties party party pro- each knew the other was in order to execute an enforceable fraudu- Obviously, tecting own interests. when lent-inducement particular, release. we executed, the Settlement reject the proposition that Frankel needed Frankel did not believe that existence of engage in such formal exercise to know fiduciary relationship vitiated a fraud- GTP was protecting by its own interests ulent-inducement release because also requesting a release of fraudulent-induce- provision. accepted the benefit of such a claims, understand the effect of the provision, factor additional mentioned For- and realize Frankel was not present est also is in the to accept provision. Oil satisfied case: forced We also agree prescribing terminated the with a GTP that such consideration, parties’ relationship. This could requirement create additional diffi- parties might finality combined with the fact the execut- culties which defeat releases, ed mutual to be via a sought fraudulent-inducement achieved enforcement of that, release; provisions, they shows via these de- exam- liberately finality ple, releasing might intended to ensure claim party it was heavily parties party 15. GTP relies the fact the other before his own is often litigants they Nonetheless, were adverse fiduciary when executed the duty). a attributed to Agreement, arguing, Settlement above, as mentioned what, parse any, need we out duties posture, they virtue of this may still when exist even fiduciaries have fiduciary owed each other no duties. We parties litigation. do become adverse We that, generally acknowledge very na- that, possibility under cer- foreclose litigation, litigants ture of adverse cannot be circumstances, tain existence of a might ordinarily saddled all duties which might relationship vitiate fraudulent-induce- accompany fiduciary relationship because it ment release even if the have become place litigant is axiomatic that a cannot that, litigants. merely adverse We conclude litigant's other own interests above its in all case, present under the circumstances respects. See Crim Truck & Tractor Co. v. litigants sup- fact were adverse Corp., Transp. Int'l Navistar ports enforceability fraudulent-induce- (Tex.1992) (recognizing the onerous bur- ment release. requires party place den that the interest Frankel) *24 were fiduciary exclusion detriment to disavow fraudulently induced ... relate in “claims which “unknown” cycle of dis- duties, perpetuating thus made way” by the “claims [Frankel] to instead should focus Again, a court putes. i.e., Bankruptcy Proceeding”; Frank- the fraudulent- determining whether Proceeding Bankruptcy el’s claim the enforceable, despite is inducement release not in default and indeed had that was fiduciary based relationship, aof existence prospects an interest some these circumstances. on all the Participation Agree- GTP breached re- by Accordingly, the trial court erred by failing ment to use its best efforts Agreement be- scinding prospects market on behalf of FGP. Cate- the fraudulent-inducement cause (iii) broader; Frankel’s gory is even GTP’s first was We sustain enforceable. fidu- grounds alleging for breached issue. “claims ciary were “unknown” duties have in ... brought ... could been Holding of Our Application C. litigation.” Accordingly, the trial other Relief Requested GTP’s by awarding equitable dis- erred 1. rescission Order of gorgement.16 first disposition of GTP’s light In our claim for breach of the Set- 3.GTP’s issue, trial or- will reverse the court’s we tlement rescission, rul- with the concomitant der of $18,000, plus GTP also seeks to recover al- return benefits ings $1,300,000 fees, attorney’s based on the pursuant to ready received jury’s finding that Frankel breached Agreement. Agreement. We conclude GTP Equitable-disgorgement 2. award it is entitled to such has not demonstrated recovery. is Because the Settlement rescinded, separate questions, provision response not the entire release In to six findings rela- jury following is bars Frankel’s breach-of- made the effective and equita- parties’ on which the tive to breaches of Settle- fiduciary-duties claim ment Agreement: award was based. We ble-disgorgement argue not note Frankel does Question entity 8: Each GTP committed enforceable, lease, is to its inapplicable breach. material In- fiduciary duties. claim for breach Question 9: GTP’s material breach was deed, sought apparently rescission by prior material excused Frankel’s recovery on various pave way for breach. claims. Question 10: Frankel committed a mate- rial breach.
Nevertheless, we note that the breach-
Question 11:
material
encompassed
breach
of-fiduciary-duties claim
(ii)
(iii)
by one or more of the
categories
of released
was excused
within
(1)
(ii),
following
prior
actions
GTP:
respect
category
With
claims.
(2)
fraud;
breach;
general
it had
material
Frankel’s claims that GTP concealed
(3)
duties;
(4)
a sale
breach of
negotiating
Trifecta and was
formed
of the Settle-
to Probe
used
fraudulent
prospects
of FGP
grounds
These
information to market
FGP’s confidential
(to
question gener-
submitted in one
for GTP’s
benefit
were
prospects
own
conclusion,
second and third issues.
light
we need not
address GTP’s
of this
asking if Frankel’s breach was
but
ally
limiting
excused
grounds
excused,
sepa-
rather than itemized as
to any prior
excuse
material breach
inquiries,
GTP)
jury
rate
specify
par-
instructed to
which of
Therefore, GTP contends that it is enti-
ground(s)
sup-
ticular
alternative
$18,000
tled
recover
in damages because
ported the finding.
committed the first material
*25
Question 12: GTP committed the first
breach which was not excused by any prior
breach.
material breach of GTP. GTP cites Mus-
$18,000
Question
fairly
13:
would
Co.,
tang
v.
Pipeline
Pipeline
Inc. Driver
reasonably compensate GTP for dam- Co., Inc.,
(Tex.2004),
Question than different action its Agree- lent inducement of the Settlement —a (hence, earlier immaterial breach plead expressly and Frankel did not 12) Question separate any separate basis for fraud. Neverthe- (cid:127) less, argue GTP not general Frankel’s breach does was first materi- improperly fraud was (per Question
al breach submitted to finding jury, support GTP’s material breach was the evidence is insufficient excused breach, prior finding, general Frankel’s material con- such was fraud together ground Question excusing sidered not for mate- Frankel’s finding Frankel’s material breach rial GTP breach. does advance argues reconciling jury's 17. Frankel cause we GTP conclude has failed to show findings demonstrates committed the damages is entitled recover even under first We material breach. need decide interpretation jury’s answers. party's construction is accurate be- (b) finding ordered that gen- to how a argument relative $1,359,643.55 Grimes, from fraud be considered context cover eral should PetroVal, findings regarding $1,970,959.73 breaches jury all the from Agreement or GTP’s $679,571.78 of the Settlement for their from Texas Standard (c) timeline regarding duties, the breaches. proposed award- breaches of circumstances, proper no ba- Under these this recov- ed interest on post-judgment disregarding has been established for ery.18 sis Question jury’s finding answer judgment denying render We of the Set- that Frankel’s material breach request for of the Settlement rescission light tlement was excused. ordering that Frankel take finding, may not recover on its of this dis- equitable on its for nothing request claim breach gorgement. *26 ment. judg- We affirm the remainder Accordingly, although ment. valid, uphold we the trial take-nothing judgment GTP’s
court’s FROST, J., concurring. contract, for this albeit for claim breach of than described the a different reason Justice, FROST, KEM THOMPSON trial court. concurring. presents what to be appears This case III. Conclusion impression of under Texas issue first portion Paragraph the of We reverse general should be a law—whether there the trial judgment D.l. of the in which prohibition on the enforcement of releases court ordered rescission of the Settlement of claims based upon contained alleged misrepresentations portion Paragraph of We reverse the reasons ex- in same contract. For the D.4. of in which the trial judgment the below, impose plained Texas courts should court that Frankel recover ordered unambigu- prohibition. no such Under the $1,359,643.55 Grimes, $1,970,959.73 from in language ous of the release at issue this PetroVal, $679,571.78 from and from Texas waived all appeal, releasing party the Standard, disgorgement for equitable as for fraud in claims their duties. breaches of release, regardless containing contract ex- alleged of fraud was entirety Paragraph in its whether
We reverse in the Because re- pressed of the trial contract. judgment, D.6. law, (a) enforceable under Texas court Settle- lease is ordered rescission it, refusing to enforce Agreement, to trial court erred ordered may appellant’s and this court sustain first payments already return and interests re- addressing legal suffi- without ceived under the Settlement issue supporting finding ciency relieved of evidence pronounced and Frankel is upon based further of fraudulent-inducement obligations under rescission, equi- ing judgment for paragraphs and D.4. for Frankel Most of D.l. contain reasoning grant- disgorgement, post-judgment the trial for the relief inter- court's table However, actually ed. the trial court orders portions Accordingly, we reverse all est. disgorgement equitable and awards rescission judgment in which trial orders paragraphs. respective at the end of these this actual relief. "CONCLUSION,” Paragraph D.6. is a render- (“Release”), misrepresentation the con- Frankel purported clearly unequivo- cally tract. agreed to waive all of its claims for fraud in the inducement of the argues that Frankel released all (“Fraudulent-Inducement Release”); and fraudulent-inducement claims. (2) law, under Texas this release is an Gas, Texas Standard Oil & Appellants L. enforceable waiver fraudulent-induce- P., Co., PetroVal, Energy Grimes Inc. ment claims that bars Frankel’s entire “GTP”) (collectively, judgment in appeal a fraudulent-inducement claim as a matter of Energy, favor of Frankel Offshore Inc. law. (“Frankel”) arising this suit out unambiguously unequivo- parties’ failed venture for development of cally all released claims for fraud in the gas oil prospects. inducement of the Settlement GTP seeking damages sued ment. claims, including various breach of fiducia- The Release in pertinent part reads ry duty. sought Frankel also rescission follows: agreement previously settlement execut- ed by in which Frankel hereby release, ... [Frankel] does ac- claims, all of its except leased claims aris- quit Grimes, and forever discharge Tex- *27 ing in the future out of obligations as Standard and PetroVal ... from all (“Settlement under the future, existing, known and unknown ment”). GTP upon counterclaimed based claims, demands and causes of action for alleged breach of the Settlement future, existing, all known and unknown Agreement. jury a a After returned ver- remedies, damages and ac- have dict which would have resulted in no award or may crued ever accrue to [Frankel] claims, of damages to Frankel on in- any (i) ... or for on account of claims the. cluding duty, breach of the trial by made Bankruptcy in the Proceed- equita- court ordered that Frankel recover (ii) ing, any and all claims which might ble-disgorgement totaling awards claims, (iii) any way any relate in to such $4,010,175.06 alleged based upon GTP’s brought and all claims which were or fiduciary duty. breaches of The trial court brought which could have been in the (1) also ordered rescission of the Settle- Bankruptcy Proceeding any or in other ment on jury’s based find- litigation; all of the shall in- foregoing ing fraudulently that GTP induced Frankel clude, to, claims, but not be limited all (2) agreement; execute the conclud- demands, and any causes of action of ed that a release of fraudulent-inducement nature, tort, whether in contract or in or claims in the settlement agreement be- arising by any under or virtue statute tween the was unenforceable be- regulation, recognized or that are now cause the were fiduciaries. by or may recog- law that be created or manner, appeal, argues by any On nized in the in- that this court future limitation, statute, cluding should by reverse trial court’s order of without regulation judicial decision, equitable-disgorgement past, rescission and the or for awards, requests future, but personal also an known and award unknown in- damages in its juries, property damages, favor based an additional and all other losses, jury finding that Frankel damages any breached the or remedies of kind Agreement. by Settlement its first recognized Under is- that are now law or that sue, (1) may GTP asserts that in a recognized be created or future, manner, provision by in the any including without Agreement itself. The Release does limitation, statute, regulation judi- ment or decision, but not limited including, exception an that includes claims cial contain exemplary all damages, all actual Agreement. for of the Settlement breach statutory interest all damages, punitive Frankel, party, knowledge- a sophisticated kind, any fraud in penalties represented able in business matters and Agreement, and inducement of this counsel, voluntarily negotiated and post judgment interest on pre- and a under which it unam- agreed to contract claims, excepting such all biguously released all fraudulent-induce- in the future out of may as arise claims claims, including any upon al- based Agreement.1 obligations under this in the contract. leged misrepresentations unambiguous of this language Under the Settlement Under unequivocally released provision substantially a similar re- agreed also for fraud in all claims lease, in which GTP released all fraudu- ex sole claims, including any lent-inducement claims the Release covers “such ception to upon alleged misrepresentation based out may arise in the future agreement. provisions These are Agreement.” obligations under parties to the strong evidence that contracting party was fraud Claims not want did ulently to enter into contract induced right sue for fraud in the inducement to imposed by general obligations arise from option party remain viable law; do not such claims arise from might later become unsatisfied with the Plastics question. See Formosa contract agreement. outcome their Engineers v. Presidio and Con orp. C (Tex.1998) tractors, 960 S.W.2d *28 law, contracting
(stating that “it is well-established that Under Texas fraudulently procure a legal duty not to mag disclaim fraudulent inducement from separate independent contract is certain claims under circumstances. it by the contract the duties established use contractual lan- Parties sometimes self’). by Any claim Frankel that it was as a mat- guage attempt in an disclaim enter into the Set fraudulently induced to contracting party law claims a ter of arise “in the tlement does not fraudulently party was induced future the execution of Settle [after into contract. In three eases enter Agreement] obligations ment out years, the last fifteen decided over Agreement].” See under [the Supreme of Texas has addressed Court id. language effected whether contractual interpretation The reasonable Cowboy See Italian such a disclaimer. Release is the Fraudulent-Inducement Partners, v. Co. Ltd. Prudential Ins. releases and disclaims all that Frankel (Tex.2011); Am., 341 S.W.3d 331-36 fraudulently induced claims that GTP McAllen, Corp. v. 268 S.W.3d Forest Oil into the to enter (Tex.2008); Schlumberger Tech. 56-61 of the Agreement, regardless the nature Swanson, 171, 177-81 Corp. v. regardless alleged fraudulent conduct and (Tex.1997). appeal The in this main issue alleged fraud is a failure of whether the Release, whether, in the Frankel dis- misrepresentation allegedly a disclose or it as matter of law all claims that the Settle- claimed a language contained added) (emphasis 1.
783
fraudulently
had
induced to ment was
by language
satisfied
in
unambiguous
cluded an
execute
waiver of reliance
representation
statement or
The
requirement
threshold
for an effec-
opposing parties. See
Corp.,
Forest Oil
tive disclaimer of fraudulent-inducement
4, 56-60;
784
Partners,
(1)
341 S.W.3d
Cowboy
See Italian
eluding
whether the terms of
con-
(2)
negotiated
4;
boilerplate,
Schlumberger
Corp.,
or
n.
Tech.
959
tract were
at 332
negotiations
parties
during
whether
at 181.
S.W.2d
the issue which be-
specifically discussed
today’s
case is broader
The release
dispute,
topic
subsequent
came the
reliance
reli-
than a disclaimer of
(3)
complaining party
whether
ance is
one element of
fraudulent-
(4)
counsel,
by
whether
represented
inducement claim. See Formosa Plastics
with each other at arm’s
dealt
parties
USA,
A
960
at 47-48.
clause
Corp.
S.W.2d
(5)
whether the
were
length,
specifically
waives
claim for
knowledgeable in business matters. See
clearer than a
fraudulent
is
Partners,
Cowboy
341 S.W.3d at
Italian
while the
waiver-of-reliance clause because
8;
at
Corp.,
n.
Forest Oil
268 S.W.3d
337
is to
purpose of a waiver-of-reliance clause
“once for
If the situation involves a
60-61.
fraud, such a clause
head off a suit for
claims,
may
settlement of
consti-
all”
say
expressly
so
but instead uses
does
an additional factor
favor
enforc-
tute
“reliance,”
signifi-
the innocuous term
Cowboy
Italian
ing
disclaimer. See
may
of which
not be understood or
cance
Partners,
8;
337
341 S.W.3d at
n.
Forest
disclaiming
appreciated
party.
See
essarily
presuming that
preclude
enforcement of
completely
Fraudulent-Inducement Release.2
was not
an arm’s
Parties
owing
may length
each other a
duty
transaction because the
Thus,
finally
wish to
disputes.
end their
were still
when they negotiated
fiduciaries
*31
their expressed
by
intent
and
finality
agreement,
to ensure
executed the
the relevant
means of a
support
fraudulent-inducement release
factors
enforceability
the
appeal
2. There
is no need in
to
this
address
at
time.
duty
fiduciary
whether
owed
a
Frankel
the
in
inducement of
The Frankel for fraud
the
Release.
Fraudulent-Inducement
And,
Agreement.
significantly,
Agreement were
Settlement
Settlement
terms of the
the
boilerplate.
Agreement terminated
were not
freely
negotiated
Cowboy
relationship.
sophisticated
these
See Italian
parties’
During negotiations
8;
le- Partners,
their
Forest
by
respective
787
upon
what balance should be struck between
a purported misrepresentation alleg
public policy against
Texas’s
fraud and edly made
knowledge
falsity.
of its
public policy
Overdrive,
fundamental
in favor
Texas’s
See
Inc. v. Baker & Taylor,
of a broad freedom contract. See
Inc.,
5835-CC,
2448209,
No.
2011 WL
*6at
Nafta
Traders,
Quinn,
84,
Inc. v.
339
95 (Del.Ch.
S.W.3d
17, 2011);
Partners,
Abry
Jun.
(Tex.2011)
a
that
(stating
fundamen
“[a]s
L.P.,
But,
resentation contained prohibit enforce-
Texas courts should agreements
ment of all such under the rather, law;
common Texas courts should they mus- pass such
enforce disclaimers analysis general
ter for such under the disclaimers, Doing above. so as discussed SANDONE, Appellant Gloria promotes freedom-of-contract values.
v.
Conclusion impose gener- Texas, Texas courts should not of The STATE State. of al on the enforcement releases of ban No. 02-12-00033-CR. claims that are alleged misrepresentation upon an based Texas, Appeals of of Court Sophisti- contained the same contract. Fort Worth. free to define their cated should be rights and risks of busi- to allocate their Jan. 2013. By enforcing clear and ness transactions. unequivocal disclaimers fraudulent-in- claims, including
ducement those based
upon alleged misrepresentations contained contract, Texas courts hon-
or important princi- freedom-of-contract
ples certainty but also enhance the
predictability vital to so contractual
relationships. unambiguous language
Under Release,
Fraudulent-Inducement
unequivocally waived all claims for fraud in the Settlement
ment, regardless alleged whether Be- expressed
fraud was in the contract.4
cause this release is enforceable under the Oil,
Schlumberger, Cowboy Forest Italian cases, the
trilogy of trial court erred in granting
refusing to enforce
scission
which contained a release of Frankel’s claim. Accord-
breach-of-fiduciary-duty Therefore, upon misrepresenta- necessary purported it is not for this court based legal sufficiency allegedly address the evidence tion contained in the Settlement finding supporting a of fraudulent-induce-