Clifton v. Hopkins, 10-02-075-CV.

• Decision Date: 07 May 2003
• Docket Number: No. 10-02-075-CV.,10-02-075-CV.
• Citation: 107 S.W.3d 755
• Parties: Margaret Cameron Bolton CLIFTON, Appellant, v. Edward Cameron Nind HOPKINS and First National Bank of Temple, Appellees.
• Court: Texas Court of Appeals

107 S.W.3d 755

Margaret Cameron Bolton CLIFTON, Appellant, v. Edward Cameron Nind HOPKINS and First National Bank of Temple, Appellees.

No. 10-02-075-CV.

Court of Appeals of Texas, Waco.

May 7, 2003.

Aubrey R. Williams, Montez, Williams & Baird, P.C., Waco, for Appellant.

Pat Beard and David B. Kultgen, Beard & Kultgen, Artie G. Giotes and Jim Hering, Pakis, Giotes, Page & Burleson, P.C., Waco, for Appellee.

Before Chief Justice DAVIS, Justice VANCE, and Justice GRAY.

OPINION

BILL VANCE, Justice.

Margaret Clifton is the primary beneficiary of three trusts, and her son, Edward Cameron Nind Hopkins, is the contingent remainder beneficiary. The First National Bank of Temple ("Bank") was the trustee of these three trusts. There is also a fourth trust involved in this appeal, a "Qualified Personal Residence Trust" which concerns Clifton's residence ("Residence Trust"); Hopkins is the beneficiary of that trust.

Clifton filed a lawsuit in October 1997 against Hopkins and the Bank to have her rights regarding the trusts declared and to have other matters related to the trusts resolved. In June 1999, she amended her petition for the fourth time and added a claim for common-law fraud against Hopkins, alleging that he made false promises to her to induce her to set up the Residence Trust and make other gifts to him. Also in the amended petition, she added a claim against the Bank for breach of fiduciary duty regarding two of the other three trusts. For these two trusts, the Bank began in 1996 to allocate 27.5% of the proceeds from oil and gas lease bonuses and royalties to the principal of the trusts, which amount Clifton asserted should have been distributed to her as income.

Hopkins and the Bank filed motions for summary judgment as to the fraud and breach-of-fiduciary-duty claims, which the court granted.¹ Clifton appeals from the judgment on those claims.

Finding the summary judgment proper, we will affirm.

Traditional Summary Judgment Standard of Review

"Rule 166a provides a method of summarily terminating a case when it clearly appears that only a question of law is involved and that there is no genuine fact issue." Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999). The movant has the burden to prove by summary-judgment evidence that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion." Id.; Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985); TEX.R. CIV. P. 166a(c). If the movant for summary judgment is a defendant, then the movant must negate at least one of the elements of the non-movant's cause of action, or, alternatively, the movant must conclusively establish each element of an affirmative defense. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex.1995). The non-movant need not respond to the motion for summary judgment unless the movant meets its burden of proof. Rhone-Poulenc, Inc., 997 S.W.2d at 222-23. But if the movant meets its burden of proof, the non-movant must present summary-judgment evidence to raise a fact issue. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995). We review a summary judgment de novo. Rucker v. Bank One Texas, N.A., 36 S.W.3d 649, 653 (Tex.App.-Waco 2000, pet. denied). In conducting our review, we must accept as true all evidence that is favorable to the non-movant, and we must resolve all doubts and indulge every reasonable inference regarding the existence of a genuine issue of fact in favor of the non-movant. Rhone-Poulenc, Inc., 997 S.W.2d at 223; Nixon, 690 S.W.2d at 548-49.

The Fraud Claim Against Hopkins

The elements of fraud are:

(1) a material representation;

(2) which was false;

(3) which was either known to be false when made or made recklessly without knowledge of its truth;

(4) which was intended to be acted or relied upon;

(5) which was acted or relied upon; and

(6) which caused injury or damage.

E.g. Formosa Plastics v. Presidio Engineers, 960 S.W.2d 41, 47 (Tex.1998); Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434-35 (Tex.1986). If the alleged misrepresentation involves a promise to perform an act in the future, the plaintiff must prove that, when the promise was made, the defendant intended not to perform. Formosa Plastics, 960 S.W.2d at 48; Spoljaric, 708 S.W.2d at 434.

Clifton claimed that, to induce her (a) into establishing the Residence Trust² in 1991, by which ownership of her personal residence would pass to Hopkins in 2001 when the trust terminated, and (b) to make other gifts to Hopkins, such as mineral interests and a monthly allowance, he falsely promised "to accommodate [Clifton's] desire and need to remain in her residence upon termination of the [Residence Trust], and ... to accommodate [Clifton's] need for a sufficient level of income from the [other trusts] so as to maintain her customary lifestyle." Specifically, Clifton asserted that, even though the terms of the Residence Trust provide her no legal right to remain in the residence, Hopkins had promised that she could reside there if she paid a fair market rental value. She alleged he had repudiated the promised inducement and did not intend to keep the promise when the trust terminated. As for future income, Clifton asserted that Hopkins promised Clifton that it would be sufficient to maintain her lifestyle, but he broke that promise by opposing her attempt to amend the trusts to override or delete the provisions that allowed the Bank to withhold the reserves for depletion. She said the withholding was lowering her income level and thus her standard of living.

Hopkins filed three motions for summary judgment. In the third motion, a traditional one from which this appeal derives, he argued there is no evidence of several of the elements of fraud, because: (a) the Residence Trust had not yet terminated, and there was no evidence of what he might do in the future when it did terminate (no false material representation — elements 1 and 2); (b) there was no evidence that, when he allegedly made the promise about the residence in 1991, he intended to not fulfill the promise (no intent not to perform — element 3); (c) the evidence conclusively establishes that the alleged misrepresentation about future income was made in a letter long after the creation of the Residence Trust, and thus Clifton could not have relied on the misrepresentation at the time she created the Residence Trust (no reliance — element 5); (d) the evidence conclusively establishes that Hopkins never expressly promised Clifton a level of future income (no false material representation — elements 1 and 2); and (e) the evidence conclusively establishes that Clifton's level of income had not declined (no injury or damage element 6).

The summary judgment evidence relied on by the parties concerning the fraud claim consists of excerpts from a deposition and an affidavit, both given by Clifton. Hopkins relies on the deposition, and Clifton relies on the affidavit.

In a summary-judgment affidavit dated September 3, 1999, made after the fraud claims were added, Clifton stated that Hopkins "assured me he was willing to accommodate my desire and need to remain in my residence upon termination of the [Residence Trust]. [He] specifically told me that he understood and would accommodate my need for a sufficient level of income so as to maintain my customary lifestyle." She said that, only in reliance on these "statements and assurances," did she set up the Residence Trust. But later, Hopkins "proceeded to tell me ... he would not give me any assurance that I could remain in the house ..., [and] he proceeded to tell me ... that he would not agree to the elimination, or even the reduction, of the 27.5% reserve for depletion ..., unless, perhaps, I enter[ed] into a contractual will leaving everything to him."

But in a deposition on October 11, 1999, taken in part to explore the statements in the affidavit, Clifton testified: (1) Hopkins never told her that she could not continue to live in the residence and pay rent; (2) she was speculating that, when the trust terminated, Hopkins would not let her continue to live in the residence; (3) the "sole basis" for her speculation was a letter Hopkins wrote her in September 1997, a month before she filed the lawsuit, and from which "she knew that he would eventually do everything he could to take everything away from me. But it's not written anything about the house in this letter."; (4) she never discussed with Hopkins a necessity for her to have a sufficient level of income; and (5) although the 1997 letter is also the sole basis of her allegation that Hopkins promised to accommodate her need for future income, there was nothing in the letter about that.

The testimony from Clifton's deposition shows the following:

• There was no evidence that Hopkins intended, in 1991 or later, to not allow Clifton to live in the residence after the Residence Trust terminated.

• The evidence conclusively established that Hopkins did not make Clifton a promise about her future income.

• The evidence conclusively established that, if Hopkins made a misrepresentation about future income, it was made in a letter long after the creation of the Residence Trust, and so Clifton could not have relied on it when she established the trust.

Thus, based on her deposition testimony, Clifton's fraud claim fails on the elements of intent not to perform, material misrepresentation, and reliance.

Clifton, however, argues that her affidavit conflicts with her deposition testimony and creates a fact issue about these elements. A party's testimony that is in conflict with other of its testimony may create a fact issue. Thompson v. City of Corsicana Housing Auth., 57 S.W.3d 547, 557 (Tex.App.-Waco 2001, no pet.). But we do not agree with Clifton. Her affidavit states in general terms that Hopkins told Clifton she could remain in the...