Hux v. S. Methodist Univ., 15–10654.

• Decision Date: 22 April 2016
• Docket Number: No. 15–10654.,15–10654.
• Citation: 819 F.3d 776
• Parties: Daniel HUX, Plaintiff–Appellant, v. SOUTHERN METHODIST UNIVERSITY, a Texas Not–for–Profit Corporation; Richard A. Shafer, SMU Police Chief; Lisa Webb ; Steve Logan, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

819 F.3d 776

Daniel HUX, Plaintiff–Appellant,

v.SOUTHERN METHODIST UNIVERSITY, a Texas Not–for–Profit Corporation; Richard A. Shafer, SMU Police Chief; Lisa Webb ; Steve Logan, Defendants–Appellees.

No. 15–10654.

United States Court of Appeals, Fifth Circuit.

April 22, 2016.

Timothy Derek Carson (argued), Cantey Hanger, L.L.P., Fort Worth, TX, Michael Patrick Kelly, Attorney, Darrell Gerard–Marc Noga, Cantey Hanger, L.L.P., Dallas, TX, for Plaintiff–Appellant.

Kimberly F. Williams, Esq. (argued), Taylor Freytag Brinkman, Locke Lord, L.L.P., Dallas, TX, for Defendants–Appellees.

Before DAVIS, SMITH, and HIGGINSON, Circuit Judges.

JERRY E. SMITH

, Circuit Judge:

Daniel Hux, a former student at Southern Methodist University ("SMU"), appeals the Federal Rule of Civil Procedure 12(b)(6)

dismissal of his Texas tort claim for alleged breach of the duty of good faith and fair dealing. Because Texas law does not impose a duty of good faith and fair dealing in the student-university relationship, we affirm.

I.

Hux was an undergraduate student and community advisor ("CA")¹ at SMU during the 2010–2011 academic year.² His troubles began in 2011, when he had a series of encounters with SMU staff members and an SMU student that eventually resulted in his dismissal as a CA.

In January 2011, Stephanie Howeth (a full-time SMU staff member who lived on campus and supervised some of the CAs) requested that Hux meet with her in person to discuss "student/staff relationships" and "clear up some boundaries." During their meeting, Howeth explained that three interactions with Hux had left her with the impression that he was making romantic overtures to her that had made her feel uncomfortable. Hux replied that Howeth had misinterpreted his actions. "Being careful not to hurt her feelings," Hux "carefully explained to Howeth that he had no interest in her whatsoever." Hux apologized and thought the matter resolved. Howeth, though, had already informed her supervisors of the conduct and the planned meeting.

The next day, Dorothea Mack (Howeth's supervisor) requested that Hux meet with her. At this meeting, Mack indicated that she was not recommending Hux for reappointment to his CA position the next year, because "Howeth was uncomfortable with Hux and ... he was in denial about his very troubling [ ] remarks to Howeth." Hux had several additional meetings, regarding his conduct, with Mack and Mack's supervisor, Adrienne Patmythes, the Assistant Director for Training and Development in the SMU housing department, in January and into February 2011. The meetings sometimes became heated. In addition to those tangles with the administration, Hux had a run-in with another student—a fellow CA—"about a trash problem[.]" Administrators accused Hux of speaking aggressively and inappropriately in the course of a phone conversation with his colleague regarding the situation.

Things came to a head on February 10. Mack fired Hux from his CA position, effectively immediately; Mack cited Hux's "inappropriate behavior and comments" and referred to the incidents with Howeth and the trash incident with the other CA. Hux appealed his termination to Steve Logan, SMU's Executive Director of Resident Life and Student Housing. Before his hearing on the appeal, Hux met with Betty McHone, an Assistant Chaplain at SMU, to go over the events that led to his termination. On February 18, Hux met in person with Logan to discuss his appeal; also present were three SMU police officers, including Chief Richard Shafer. The attendees discussed Hux's behavior and SMU's concerns. Shafer told Hux that he needed to visit with a doctor to prove that he was not crazy. At the end of the meeting, Shafer escorted Hux to SMU's mental health facility for an evaluation; Hux left, however, without being evaluated.

Logan denied Hux's appeal by a letter dated February 21 that indicated that Hux had made certain staff members fear for their safety. Though Hux was allowed to remain enrolled as a student, he was prohibited from contacting those involved in the incidents and was told to stay away from certain dormitories. In the course of the next week, Hux met with Dean of Student Life Lisa Webb and Assistance Vice President of Student Affairs Troy Behrens; both discussed Hux's behavior and asked what they could do to help. Hux also met with unidentified persons from the Chaplain's office during the next month.

On March 20, Hux attended a meeting for students interested in student government positions. That meeting was held in a dormitory that Hux, under the terms of the letter from Steve Logan terminating his CA employment, was under orders to avoid. After the meeting, several SMU police officers approached Hux, told him there was a protective order prohibiting him from being at the building, and searched Hux's person. One of Hux's relatives was waiting in a car to pick him up; officers also searched the car and found a handgun. The officers handcuffed Hux and put him into a police car. Twenty-five minutes later, they removed the handcuffs, returned the gun, and instructed Hux not to bring the gun to school or have it in his car. Hux left campus.

The next day, two officers met Hux outside one of his classes and drove him to the SMU police department. There, Shafer and Webb told him that he was being placed on a mandatory administrative withdrawal from the university, citing his "continued inappropriate behavior and attempts to intimidate and threaten [housing department staff] members." Hux was given a letter memorializing the conversation. After Hux was forced to withdraw from the university, Shafer stated in an interview that Hux was no longer a student and indicated that Hux had violated university policy. Further, SMU administrators circulated a picture of Hux coupled with a notice that community members should be on the lookout for him.

II.

Hux sued, alleging about nineteen causes of action. The district court granted the defendants' Rule 12(b)(6)

motion to dismiss on most of the claims and granted summary judgment for defendants on the rest of the claims after discovery. The only claim in issue on this appeal—the notion that SMU breached a duty of good faith and fair dealing—was among those dismissed before discovery for failure to state a claim. Analyzing Texas law, the court explained that Hux had not alleged facts that, taken as true, would give rise to the type of special relationship that creates a duty of good faith and fair dealing under Texas law. We agree and therefore affirm.

III.

We review a Rule 12(b)(6)

dismissal de novo, "accepting all well-pleaded facts as true and viewing these facts in the light most favorable to the plaintiff."³ Under Texas law, the question whether there is a tort duty of good faith and fair dealing in a particular circumstance is initially a question of law.⁴ The court first must decide whether the plaintiff has alleged facts that, if taken as true, would show that a special relationship even existed. Only when such a relationship could in principle exist on the facts alleged does proof of the special relationship become a question of fact.

IV.

In applying Texas law, we look first to the decisions of the Texas Supreme Court. See Howe ex rel. Howe v. Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir.2000)

. If that court has not ruled on the issue, we make an Erie⁵ guess, predicting what it would do if faced with the facts before us. Id. Typically, we treat state intermediate courts' decisions as the strongest indicator of what a state supreme court would do, absent a compelling reason to believe that the state supreme court would reject the lower courts' reasoning. Id.

Texas law does not impose a generalized contractual duty of good faith and fair dealing and, in fact, rejects it in almost all circumstances. See English v. Fischer, 660 S.W.2d 521, 522 (Tex.1983)

. But in an extremely narrow class of cases, the Texas courts have determined that a special relationship may give rise to a tort duty of good faith and fair dealing. See Arnold v. Nat'l Cty. Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987).

A duty of good faith and fair dealing may arise in two contexts. The first, not pertinent here, is when the parties are in a formal fiduciary relationship (e.g., principal-agent, attorney-client, or trustee-beneficiary); in such situations, the ordinary bundle of duties incumbent on a fiduciary includes a duty of good faith and fair dealing. See Crim Truck, 823 S.W.2d at 593–94 (Tex.1992)

. The second context, relevant here, is when the parties are not formal fiduciaries but are nonetheless in a special or confidential relationship. Id. If they are, Texas law imposes a duty of good faith and fair dealing (but not the whole bundle of associated fiduciary duties). Id. at 594.

Texas courts usually describe this special relationship in broad terms. The duty arises in "discrete, special relationships, earmarked by specific characteristics including: long standing relations, an imbalance of bargaining power, and significant trust and confidence shared by the parties." Caton v. Leach Corp., 896 F.2d 939, 948 (5th Cir.1990)

. The relationship must exist before and apart from the contract or agreement that forms the basis of the controversy. Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269, 280 (Tex.1995). A party's unilateral, subjective sense of trust and confidence in the opposing party is not sufficient to give rise to a special relationship and the attendant duty. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 177 (Tex.1997). Because the Texas Supreme Court has not specifically addressed the special-relationship doctrine in the student-university context, we turn to the decisions of the intermediate courts.

The Texas Courts of Appeals have restricted the special-relationship doctrine to narrow and carefully circumscribed situations. Indeed, those courts recognize only one special relationship—that between an insurer and an insured.⁶ Texas courts have refused to impose a...