Kiger v. Balestri

• Decision Date: 03 August 2012
• Docket Number: No. 05-10-01308-CV,05-10-01308-CV
• Citation: Kiger v. Balestri, No. 05-10-01308-CV (Tex. App. Aug 03, 2012)
• Parties: DAVID KIGER, Appellant v. RAY A. BALESTRI, Appellee
• Court: Texas Court of Appeals

DAVID KIGER, Appellant

v.RAY A. BALESTRI, Appellee

No. 05-10-01308-CV

Court of Appeals Fifth District of Texas at Dallas

Dated: August 3, 2012

AFFIRM; Opinion Filed August 3, 2012.

On Appeal from the 116th Judicial District Court

Dallas County, Texas

Trial Court Cause No. 09-12251-F

OPINION

Before Justices O'Neill, Richter, and Myers

Opinion By Justice Myers

This is an appeal brought by appellant David Kiger (Kiger) from a summary judgment granted in favor of appellee Ray A. Balestri (Balestri). In three issues, Kiger contends the trial court erred by granting summary judgment on his breach of fiduciary duty claim. We affirm the court's judgment.

Background and Procedural History

Balestri is a licensed transactional attorney. From 1985 until February of 1992, he practiced law at the firm of Akin, Gump, Strauss, Hauer & Feld, in Dallas, Texas. From March of 1992 until March of 2000, he practiced law at a firm he co-founded with Steven R. Block (Block), Block & Balestri, after which Balestri quit the practice of law to work as Chief Financial Officer of Attenza.com, Inc. When he left the practice of law, Balestri's clients were transferred to Block, who joined another law firm.

Balestri and Kiger have known each other for many years. At the heart of their dispute is Kiger's contention that, in 2001, he conceived of a "novel idea" to start a company that would sell electricity through multi-level marketing. Kiger planned to use the experience and business contacts of former executives and employees of Excel Communications, a defunct company that sold long distance telephone services through multi-level marketing, to build his business. Kiger, however, did not know any former Excel employees.

On June 27, 2001, Kiger sent Balestri an e-mail with the subject line "Question," which asked, "Do you know anyone who has worked at Excel Communication at a high level." Balestri replied, "Currently works there or used to work there?" Kiger e-mailed, "Used to would be best." Balestri responded, "Nick Merrick, who used to be their CFO and Chris Dance, who used to be their General Counsel. Do you want their contact info." Kiger replied, "Yes[,] please." Then, on June 28, Balestri and Kiger exchanged the following e-mails:

Balestri: Cool. I'll let them know that you'll be calling. (I'll get you their contact info later today.) What should I tell them that you want to contact them about?

Kiger: A reseller based power deal. We will be utilizing all existing systems at Worldwide Express but will shift distribution to the Excel Model. $220 Bil commercial and residential market opportunity (10x bigger than LD). Tentative name for the company is EnergyOne.

The e-mails were followed by a telephone call between the parties, where they discussed these issues in more detail.

Kiger did not pursue his business idea. There is no indication in the record he formed a multi-level marketing company to sell electricity, obtained a license to sell electricity, hired employees, or solicited customers. In mid-2002, meanwhile, Balestri left Attenza and returned to the practice of law. Then, in February of 2004, Robert Snyder, an entrepreneur with whom Balestri had invested in other ventures, contacted Balestri to introduce him to a group that needed investors for a business that would aggregate electricity in the commercial and industrial market. Balestri attended two meetings to hear sales pitches but, as he noted in his summary judgment affidavit, he "came away from the meetings 'underwhelmed.'"

Neither Balestri nor Snyder invested in the electricity aggregation idea. Over the next few months, Snyder decided to start his own retail electricity provider. In August of 2004, Snyder hired Balestri's law firm to incorporate this electricity provider, which was called Stream Energy, with the Texas Secretary of State. In January of 2005, the Texas Public Utility Commission granted Stream Energy a license to sell electricity. In June, Balestri became an investor in Stream Energy.

In September of 2005, Balestri, Kiger, and another individual met at a restaurant for dinner to celebrate Kiger's birthday. At the dinner, Balestri mentioned his recent investment in Stream Energy to Kiger and suggested he consider investing, at which point, according to Balestri's summary judgment affidavit, Kiger "acted upset over my investment." Balestri said he was "baffled by Kiger's reaction." Later, at Kiger's request, Balestri "set up a meeting between Kiger and Snyder so Kiger could explore the possibility of investing in Stream Energy." Kiger told Balestri, according to Balestri's affidavit, "he was not interested in investing in Stream Energy" because "the valuation was too high" and he "wanted to have invested in the ground floor," as Balestri "had done."

Kiger sued Balestri for breach of fiduciary duty, alleging an attorney-client relationship existed between them and Balestri breached his fiduciary relationship with Kiger by revealing confidential and trade secret information to Stream Energy for the purpose of implementing Kiger's business idea. ¹ Balestri filed both traditional and no-evidence summary judgment motions as to this claim. In the traditional summary judgment motion, Balestri argued Kiger could not prevail, as a matter of law, on the breach of fiduciary duty claim because (1) Balestri did not owe a fiduciary duty to Kiger; (2) there was no evidence to show Balestri owed a fiduciary duty to Kiger; (3) Balestri did not breach a fiduciary duty owed to Kiger; (4) there was no evidence to show Balestri breached a fiduciary duty owed to Kiger; and (5) there was no evidence to show Balestri profited from breaching a fiduciary duty owed to Kiger. In his no-evidence summary judgment motion, Balestri argued there was no evidence (1) Kiger suffered damages or that Balestri profited from the alleged breach of fiduciary duty, (2) Balestri owed a fiduciary duty to Kiger, or (3) that Balestri breached a fiduciary duty to Kiger. The trial court granted both of Balestri's motions, dismissing Kiger's claims with prejudice and ordering he take nothing from Balestri.

Discussion

Kiger raises several related and overlapping issues. He argues the trial court erred, as a matter of law, by granting traditional summary judgment on his breach of fiduciary duty claim because Balestri did not conclusively establish (1) the lack of a fiduciary duty and (2) that there was no breach of a fiduciary duty. In his third issue, Kiger alleges the trial court erred by granting a no- evidence summary judgment on the breach of fiduciary duty claim because Kiger presented sufficient evidence of each element to raise a genuine issue of material fact regarding each element.

The standard of review for both a traditional and a no-evidence summary judgment is well known. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985); Gen. Mills Rests., Inc. v. Texas Wings, Inc., 12 S.W.3d 827, 832-33 (Tex. App.--Dallas 2000, no pet.); Neary v. Mikob Properties, Inc., 340 S.W.3d 578, 583 (Tex. App.--Dallas 2011, no pet.). Regarding the traditional motion for summary judgment, Balestri had the burden to demonstrate that no genuine issues of material fact existed and he was entitled to judgment as a matter of law. See Nixon, 690 S.W.2d at 548-49. To defeat the no-evidence summary judgment, Kiger was required to present sufficient evidence to raise a genuine issue of fact on each challenged element of his claim. See Gen. Mills, 12 S.W.3d at 832-33; Neary, 340 S.W.3d at 583.

We review the no-evidence motion for summary judgment under the same legal sufficiency standard used to review a directed verdict. Gen. Mills, 12 S.W.3d at 832-33. Thus, we determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Id. at 833. "Less than a scintilla of evidence exists when the evidence is 'so weak as to do no more than create a mere surmise or suspicion' of fact." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (1983)).

When analyzing both traditional and no-evidence summary judgments, we consider the evidence in the light most favorable to the nonmovant. Nixon, 690 S.W.2d at 549; Gen. Mills, 12 S.W.3d at 833; Drake v. Wilson N. Jones Med. Ctr., 259 S.W.3d 386, 388 (Tex. App.--Dallas 2008, pet. denied). When, as in this case, the trial court does not state the basis for granting summary judgment, the appellant must show on appeal that each independent ground alleged is insufficient to support the summary judgment granted. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Adams v. First Nat'l Bank of Bells/Savoy, 154 S.W.3d 859, 875 (Tex. App.--Dallas 2005, no pet.); Juarez v. Longoria, 303 S.W.3d 329, 330 (Tex. App.--El Paso 2009, no pet.).

Whether a fiduciary duty exists is a question of law. Nat'l Plan Adm'rs, Inc. v. Nat'l Health Ins. Co., 235 S.W.3d 695, 700 (Tex. 2007). Fiduciary duties are imposed on parties to certain relationships based on the special nature of those relationships. Id. A fiduciary relationship exists, for example, between attorneys and clients as a matter of law. Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, 105 S.W.3d 244, 253 (Tex. App.-Houston [14th Dist.] 2003, pet. denied). However, an attorney-client relationship must exist before a fiduciary duty arises. See id. at 254.

The attorney-client relationship is a contractual relationship that arises from a lawyer's agreement to render professional services to a client. Kennedy v. Gulf Coast Cancer & Diagnostic Ctr., 326 S.W.3d 352, 357 (Tex. App.--Houston [1st Dist.] 2010, no pet.); Greene's Pressure Treating & Rentals, Inc. v. Fulbright & Jaworski, L.L.P., 178 S.W.3d 40, 43 (Tex. App.-Houston [1st Dist.] 2005, no pet.). The parties should clearly and expressly agree to the nature of the work to be done and the compensation to be paid. Valls v. Johanson & Fairless,...