Lesikar v. Rappeport
| Decision Date | 12 September 2000 |
| Docket Number | No. 06-98-00126-CV,06-98-00126-CV |
| Citation | 33 S.W.3d 282 |
| Parties | (Tex.App.-Texarkana 2000) LYNWOOD LESIKAR AND HARRIET LEWIS LESIKAR, Appellants v. JENNY LOU LEWIS RAPPEPORT, ET AL., Appellees |
| Court | Texas Court of Appeals |
Page 282
v.
JENNY LOU LEWIS RAPPEPORT, ET AL., Appellees
Decided September 12, 2000
Opinion Granting Appellee's Motion for Rehearing and Overruling Appellant's Motion for Rehearing December 6, 2000.
On Appeal from the 188th Judicial District Court Gregg County, Texas Trial Court Nos. 92-2292-A-1 and 94-2369-A
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Before Cornelius, C.J., Grant and Ross, JJ.
O P I N I O N
Opinion by Chief Justice Cornelius.
Lynwood and Harriet Lesikar appeal from an adverse judgment in Jenny Rappeport's suit against them to impose a constructive trust and recover damages for fraud and breach of fiduciary relationship.
In 1935, H. G. Lewis bought the working interest in the T. W. Lee oil lease located in Longview, Texas, and assigned half of the interest to J. C. Robbins. Lewis operated the entire lease under the name L & G Oil Company until his death in 1980. In 1964, Lewis and Robbins each assigned to the Clark, Thomas, Winters & Shapiro law firm of Austin, Texas (Clark, Thomas), a 1/12 working interest in oil wells 2 and 5 on the lease, or collectively a 1/6 interest. In the early 1970s, Lewis drilled two new wells on the lease, wells 3A and 7A. Thereafter, although the 1964 assignment to Clark, Thomas explicitly covered only wells 2 and 5, Lewis paid Clark, Thomas for oil produced and billed the firm for operating expenses as though it owned a 1/6 working interest not only in wells 2 and 5, but also in wells 3A and 7A.
In 1980, Lewis died leaving a will that named his two daughters, Jenny Rappeport and Harriet Lesikar, co-independent executrices of his estate. In his will, Lewis gave Jenny and Harriet each an undivided fifty percent interest in his estate for life with remainders to their children. Among Lewis's assets at his death was his
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one-half interest in the T. W. Lee lease, which the estate, through Jenny and Lewis's widow, Fay Lewis, continued to operate under the name L & G Oil Company. In 1985, Clark, Thomas determined that it had no assignment to it of an interest in wells 3A and 7A and notified L & G Oil Company of that fact. An L & G employee wrote Clark, Thomas stating that she searched L & G's files for an assignment concerning wells 3A and 7A, but found none. Nevertheless, L & G continued to bill Clark, Thomas for operating expenses associated with wells 3A and 7A, and continued to pay the firm as though it owned an interest in those wells.
In 1992, Harriet and her husband Lynwood (Lyn) Lesikar sued Jenny, Fay, and others seeking a declaratory judgment as to each party's ownership in the Lewis estate and an accounting. In 1993, the Lesikars added Clark, Thomas as a defendant, seeking to recover under a theory of unjust enrichment, the "overpayment" the estate had made on wells 3A and 7A. In response, a Clark, Thomas attorney, Barry Bishop, contacted the Lesikars' attorney, Gary Werley. According to Bishop's testimony, he and Werley agreed that Clark, Thomas would disclaim its interest in wells 2 and 5 if Werley would drop Clark, Thomas from the lawsuit and not seek to recover the overpayment. Bishop wrote a letter to Werley describing their understanding, referred to by the parties as the "Rule 11 agreement," but Werley did not sign and return it at that time. The agreement stated only that Clark, Thomas would disclaim any interest it might have in wells 3A and 7A in exchange for the "plaintiffs," Harriet and Lyn, not pursuing their overpayment claim against the firm.
On April 14, 1994, the trial court ordered the Lewis estate closed. On July 13, 1994, Werley sent a letter to Bishop claiming Clark, Thomas owed the estate for the overpayment the estate had made on wells 3A and 7A. The next day, Werley sent Bishop a letter with a proposed assignment attached whereby Clark, Thomas would assign its interest in wells 2 and 5 to Harriet's husband Lyn alone; the letter stated that Lyn would be calling Bishop concerning a "settlement offer." On July 18, Bishop notified Jenny's attorney, Jerry Harris, about the proposed assignment, who agreed that the estate would be willing to completely settle the overpayment claim in exchange for Clark, Thomas's interest in wells 2 and 5. Despite Jenny's interest, Bishop later agreed with Werley that because the court had ordered the estate closed, the estate would be unable to settle the overpayment claim in exchange for Clark, Thomas's interest in wells 2 and 5 because that would subject the estate to ongoing liability for any third-party claims against the Clark, Thomas interest. They agreed that Lyn's settling the litigation in exchange for Clark, Thomas's interest in wells 2 and 5 would be acceptable.
In preparation for trial, Harris, on July 19, 1994, deposed the Lesikars. Lyn stated at his deposition that he had spoken to Clark, Thomas about acquiring the firm's interest in wells 2 and 5. After the deposition, Harris wrote Werley and Bishop advising them not to enter into an agreement unless Jenny was made a party to it. On August 3, Bishop amended the assignment to add provisions that, among other provisions, Lyn would indemnify Clark, Thomas not only for the overpayment but for all claims connected with wells 2 and 5, and also with wells 3A and 7A, and he sent a copy of the assignment to Werley. That same day, Werley agreed to the assignment and returned it to Bishop. A few days later, Werley signed and returned to Bishop the Rule 11 agreement that Bishop still required, and pursuant to that agreement, Werley dropped Clark, Thomas from the lawsuit. On August 9, Clark, Thomas signed the assignment and returned it to Lyn. On August 14, the trial to close the Lewis estate began, and the overpayment claim against Clark, Thomas was severed into its own suit.
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On August 17, 1994, Lyn recorded the assignment from Clark, Thomas. Later that same day, the parties met to negotiate a settlement of the litigation. At the meeting, Lyn indicated he did not wish to discuss the Clark, Thomas negotiations, and Harriet stated she did not know anything about the assignment. The discussions resulted in a settlement of the litigation concerning the Lewis estate. On October 17, at Harriet's request, the overpayment claim against Clark, Thomas was dismissed without prejudice. A final judgment was signed on October 18. Attached to it was a mutual release in which each party released the other from liability; however, the release contained a clause which provided that neither party was released from liability concerning the overpayment.
In early October 1994, Jenny learned that Lyn had gotten permission from the Railroad Commission to replace L & G as operator of the lease. On October 31, Jenny, individually and on behalf of L & G Oil Company and as "co-trustee of the testamentary trust pursuant to Lewis's will" and several working interest owners, brought suit against the Lesikars for the overpayment and for an injunction, alleging that the Lesikars had taken and converted to their own use income from estate property. On November 18, Jenny brought suit in the same capacity against the Lesikars for breach of fiduciary duty and fraud. The court granted a temporary restraining order that allowed Jenny to re-enter the lease and operate it as L & G. The suits were joined, and together they form the suit from which the Lesikars bring this appeal.
The trial court submitted special questions to the jury on all theories of recovery and defense. We omit the instructions and definitions. The jury answered as follows:
QUESTION NO. 1
Did Harriet Lewis Lesikar breach her fiduciary duty to Jenny Lou Lewis Rappeport in any of the following respects:
. . . .
Answer "Yes" or "No" to each of the following:YESNO
a.)Failing to disclose to Jenny Lou Lewis Rappeport
and Fay Jeter Lewis on or before August 17, 1994
that her husband had acquired the Clark, Thomas
interest in the T. W. Lee Lease? Yes
b.)Failing to disclose to Jenny Lou Lewis Rappeport
and Fay Jeter Lewis on or before August 17, 1994
that the assignment of the Clark, Thomas law firm
was recorded in the deed records of Gregg County,
Texas at approximately 8:30 a.m. on the morning of
August 17, 1994? Yes
c.)In settling the Clark[,] Thomas overpayment litigation
by allowing the Clark[,] Thomas interest to be assigned
to her husband and then dismissing the overpayment
litigation after her husband acquired the Clark[,] Thomas
interest in the T. W. Lee Lease? Yes
d.)By her husband acquiring the Clark[,] Thomas interest
which had been offered to the Estate of H. G. Lewis Jr.? Yes
e.)In spending funds deposited with her agent in trust for
payment of professional accounting costs of the estate?Yes
f.)Transferring the operating interest in the T. W. Lee Lease
to her husband without payment of any consideration?Yes
g.)Transferring the operating interest in the T. W. Lee Lease
to her husband without previously disclosing to all
beneficiaries her intention to do so? Yes
h.)Secreting the transfer of the operating interest in the T. W.
Lee lease to her husband until such time as the
beneficiaries could not challenge such transfer with the
Texas Railroad Commission?Yes
QUESTION [NO.] 2
Did Lynwood Lesikar commit fraud against Jenny Lou Lewis Rappeport?
. . . .
Answer "Yes" or "No"
ANSWER: Yes
QUESTION [NO.] 3
Did Harriet Lesikar commit fraud against Jenny Lou Lewis Rappeport?
. . . .
Answer "Yes" or "No"
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ANSWER: Yes
QUESTION [NO.] 4
Do you find that any of the following parties were part of a conspiracy that damaged Jenny Lou Lewis...
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