Avary v. Bank of America, N.A.

• Court: Texas Court of Appeals
• Writing for the Court: Whittington
• Citation: Avary v. Bank of America, N.A., 72 S.W.3d 779 (Tex. App. 2002)
• Decision Date: 22 March 2002
• Docket Number: No. 05-00-00918-CV.,05-00-00918-CV.
• Petition History: pet. denied
• Parties: Rhonda AVARY, Guardian of the Estates of Brett Joseph Bourgeois and Timothy James Bourgeois, Minor Children, Appellant, v. BANK OF AMERICA, N.A., Appellee.

72 S.W.3d 779

Rhonda AVARY, Guardian of the Estates of Brett Joseph Bourgeois and Timothy James Bourgeois, Minor Children, Appellant, v. BANK OF AMERICA, N.A., Appellee.

No. 05-00-00918-CV.

Court of Appeals of Texas, Dallas.

March 22, 2002.

Rehearing Overruled May 6, 2002.

Charles W. McGarry, Thurman & Andres, P.C., Dallas, for appellant.

Talmage Boston, Winstead, Secrest & Minick, P.C., Dallas, for appellee.

Before Justices MORRIS, WHITTINGTON, and O'NEILL.

OPINION

Opinion By Justice WHITTINGTON.

Rhonda Avary, guardian of the estates of Brett Joseph Bourgeois and Timothy James Bourgeois, minor children (Avary), sued Bank of America, N.A. (Bank) for breach of fiduciary duty, negligence, fraud, and conspiracy. The alleged wrongful conduct occurred during the court-ordered mediation of a now-concluded lawsuit. The Bank moved for summary judgment on the ground that Avary had no evidence to support her claims because all communications made at the mediation were confidential under section 154.073 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM.CODE ANN. § 154.073 (Vernon Supp.2002). The Bank's motion also raised the affirmative defenses of accord and satisfaction, ratification, waiver, and estoppel. After permitting limited discovery, the trial judge granted the Bank's motion. In three issues, Avary complains the trial judge erred in granting the Bank's motion for summary judgment and abused his discretion in prohibiting certain discovery relating to the mediation session. Because we find more than a scintilla of evidence to support Avary's claims, and because the trial judge abused his discretion in restricting discovery regarding the new and independent tort alleged to have occurred during the mediation, we reverse the trial court's judgment and remand this case for further proceedings.

FACTUAL BACKGROUND

Joseph Bourgeois was killed when a tractor rolled over on him. He was survived by his parents, his wife Nursen Bourgeois, and three sons, one by his marriage to Nursen and two by a previous marriage to Rhonda Avary. The Bank is the independent executor of Bourgeois's estate.

Bourgeois's wife, parents, sons, and estate filed wrongful death and survival claims against the manufacturer of the tractor and other parties in a lawsuit styled Nursen Bourgeois, et al. v. Yanmar Diesel Engine Co., Ltd., et al., Cause Number 219-232-98 in the 219th Judicial District Court of Collin County, Texas (the Yanmar Diesel lawsuit). The parties to the Yanmar Diesel lawsuit participated in a court-ordered mediation.

In the course of the mediation, the parties were divided into three groups. The defendants, including the tractor manufacturer, were in one room. Avary, as guardian of the estates of Brett and Timothy, was in a second room with her counsel. All other plaintiffs, including the Bank as executor, were in a third room with their counsel. Avary was represented at the mediation by Thomas M. McCrory, III and Shirley Sutherland. The remaining plaintiffs, including the Bank as executor of the estate, were represented by Marty L. Matthews and Steve Cowan. Eileen Kirchner, a trust officer, participated in the mediation as the Bank's representative. The defendants were represented by R. Douglas Noah, Jr.

The Yanmar Diesel lawsuit was settled at the mediation. There were two subsequent hearings to approve the settlement, one in the county court where Bourgeois's estate was pending, and one in the district court where the Yanmar Diesel lawsuit was filed. Both courts approved the settlement. Avary, with her counsel, appeared and testified at the district court hearing. Although provided notice, neither Avary nor her counsel appeared at the county court hearing. At neither hearing did Avary offer any objection to the settlement. Avary does not allege that she did not receive her designated portion of the settlement funds.

In this lawsuit, Avary contends that at the mediation, the defendants in the Yanmar Diesel lawsuit made a settlement offer of $450,000 to Bourgeois's estate. This offer was allegedly made to the estate alone, separate from the other plaintiffs. Kirchner, the Bank's representative, allegedly left the mediation before the $450,000 offer was made; the parties hotly dispute whether Kirchner delegated to the estate's attorneys the Bank's responsibility to represent the estate. Avary further contends the Bank (representing the estate) rejected this offer, "but offered instead to accept the money ... as part of a larger aggregate (lump-sum)" for all of the plaintiffs except Avary, to be allocated among those plaintiffs as they so decided. Avary alleges the Bourgeois estate actually received $75,000 in the settlement as a result of this allocation among the other plaintiffs. The estate's tax liability was over $185,000, which allegedly had to be paid from proceeds of life insurance policies of which Bourgeois's sons were the beneficiaries. Avary claims the rejection of the $450,000 offer and the acceptance of a smaller allocation was a breach of the Bank's fiduciary duty as executor of the estate.

After filing the lawsuit, Avary proceeded to serve discovery requests on the Bank. The Bank objected to many of these requests, and the parties filed various motions to compel and for protective orders. The trial judge issued four orders on these motions.

The first order required the Bank to respond to two of Avary's requests for admission regarding whether or not the parties were in separate rooms at the mediation. The Bank was not required, however, to respond to requests for admission directed to the settlement offers made, the presence or absence of Kirchner at the mediation, and Kirchner's alleged delegation of authority at the mediation.

The second order denied Avary's request to depose and obtain documents from Noah, the defense attorney in the wrongful death lawsuit, regarding matters occurring during mediation.

The third order, regarding Kirchner's deposition, was issued after the trial judge heard testimony from Kirchner in camera. The trial judge ordered that Kirchner's in camera testimony should be disclosed to Avary, "and that no objection based upon confidentiality or privilege under Civil Practice & Remedies Code § 154.073 is proper so as to prevent the admissibility of such testimony upon trial or hearing in this cause."

The fourth order denied Avary's request to depose Sutherland, one of the attorneys representing Avary at the mediation. The trial judge also ordered "that Plaintiff not attempt to obtain discovery from any persons (other than Defendant's representative Eileen Kirchner) regarding what occurred" at the mediation. (Emphasis added).

All the trial judge's orders appear to be founded upon the confidentiality provisions of section 154.073. The fourth order expressly cites the statute. The second and third orders explicitly deny discovery of "communications or conduct" which took place at the mediation. The first order does not specify a basis for the trial judge's ruling, but the Bank objected to the requested discovery of mediation communications on the grounds that Avary sought "privileged and confidential information."

The Bank moved for summary judgment on all of Avary's claims, claiming (i) there was no evidence of breach of fiduciary duty, negligence, or conspiracy to defraud, because each claim arose "out of confidential and inadmissible statements purportedly made at Mediation;" and (ii) the Bank established its affirmative defenses of accord and satisfaction, ratification, waiver, and estoppel. The trial judge granted the Bank's motion without specifying the grounds.

Avary now appeals the grant of summary judgment. In three issues, Avary argues the trial judge erred in (i) granting summary judgment; (ii) ordering witnesses not to testify about what occurred in the mediation; and (iii) denying Avary's request for discovery about what occurred during the mediation.

STANDARD OF REVIEW

The standard of review in summary judgment is well-established. See TEX.R. CIV. P. 166a(c); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex.1990). In reviewing a summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). Every reasonable inference in favor of the nonmovant is allowed, and all doubts are resolved in his favor. Nixon, 690 S.W.2d at 548-49.

To prevail on summary judgment, a defendant as movant must either disprove at least one element of each of the plaintiff's theories of recovery or plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979); Hoover v. Gregory, 835 S.W.2d 668, 671 (Tex.App.-Dallas 1992, writ denied). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. See Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982).

Although not so designated, the parties treat the Bank's request for summary judgment on Avary's affirmative claims as a "no-evidence" motion under rule 166a(i) of the Texas Rules of Civil Procedure. A no-evidence summary judgment motion may be urged on the ground that there is no evidence of one or more essential elements of a claim or defense on which the adverse party would have the burden of proof at trial. See Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675, 682-83 (Tex.App.-Dallas 2000, no pet.). A no-evidence motion for summary judgment places the burden on the nonmovant to present summary judgment evidence raising a genuine fact issue. See Espalin, 27 S.W.3d at 683.

We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832-33 (Tex.App.-Dall...