Thomson v. Norton, 20285

• Decision Date: 05 August 1980
• Docket Number: No. 20285,20285
• Citation: 604 S.W.2d 473
• Parties: Travis THOMSON, Appellant, v. Edwin K. NORTON, Jr. and Dallas County State Bank, Appellees.
• Court: Texas Court of Appeals

Page 473

604 S.W.2d 473

Travis THOMSON, Appellant, v. Edwin K. NORTON, Jr. and Dallas County State Bank, Appellees.

No. 20285.

Court of Civil Appeals of Texas, Dallas.

Aug. 5, 1980.

John R. Henderson, John R. Brown, Meyers, Miller, Middleton & Weiner, Dallas, for appellant.

William L. Bedard, Storey, Armstrong, Steger & Martin, Charles T. Marshall, Akin, Gump, Hauer & Feld, Dallas, for appellees.

Before GUITTARD, C. J., and AKIN and STOREY, JJ.

GUITTARD, Chief Justice.

Travis Thomson sued Edwin Norton and Dallas County State Bank for fraud and nondisclosure in connection with a real estate transaction. The bank counterclaimed for a deficiency remaining after foreclosure. The trial court rendered summary judgment denying Thomson's claim against both defendants and awarding the bank recovery on its counterclaim. Thomson appeals on the grounds that the summary judgment proof is insufficient to negate as a matter of law plaintiff's claim of a confidential relationship raising a duty of disclosure and that the defense of limitation is not established as a matter of law. He also asserts that the trial court abused its discretion in overruling his motion for continuance. We hold that the evidence is sufficient to establish as a matter of law that no confidential relationship existed and that plaintiff has failed to show reversible error because he has not attacked all the grounds stated in the motion for summary judgment. We hold also that the judge did not abuse his discretion in overruling the motion for continuance. Consequently, we affirm.

1. Confidential Relationship

Since the defendants had the burden in their motions for summary judgment to negate as a matter of law the grounds of recovery stated in the plaintiff's petition, we take the following statements of facts from that petition. In late 1973, plaintiff sought financial advice from defendant Norton, an officer and director of the bank, concerning tax problems arising from an increase in his income. Norton recommended that plaintiff purchase real estate and arrange for prepayment of the interest in connection with the financing, and he advised plaintiff that he could arrange for him to purchase certain real estate. Based on plaintiff's trust and confidence in Norton, he entered into negotiations for the purchase of certain real estate with Norton, who "represented that he had authority to act on behalf of the owner of the property." As a result of these negotiations, plaintiff signed a contract of sale which Norton presented, but which did not show the name of the seller. Norton also arranged for a loan of the total purchase price from the bank, and the sale was closed on December 31, 1973. At the time of the closing, plaintiff signed a promissory note for $177,500, payable to the bank, secured by a deed of trust on the property. In December, 1975, when the note fell into default, the bank posted the property for foreclosure and the property was sold for an amount insufficient to satisfy the note. At the time of the foreclosure, plaintiff obtained copies of the closing documents from the title company and learned that he had purchased the property from Donna, Inc., at a purchase price of $5,709.23 per acre, and that on the same date Donna, Inc. had purchased the property for $5,226.76 per acre. Afterwards plaintiff learned that Donna, Inc. was controlled by Norton and that Norton had arranged for Donna, Inc. to sell the land to plaintiff for a profit of.$482.47 per acre. Norton, individually and as an officer of the bank, failed to disclose to plaintiff certain material facts, namely, that Donna, Inc. was owned and controlled by Norton and that Norton intended to profit from the transaction by personally arranging for the purchase of the property by Donna, Inc., at a lower price than that at which Donna, Inc. had agreed to sell the property to plaintiff. At the time plaintiff entered into the contract of sale, Donna, Inc. did not have title to the property, and plaintiff could have purchased the property for $5,226.76 per acre. Norton knew or should have known that these undisclosed facts were material and, if disclosed to plaintiff, would have materially affected his decision to purchase the property and sign the note and deed of trust. At the time of the negotiations, plaintiff relied on Norton's expertise and did not conduct any independent investigation.

The petition prays for rescission of the purchase transaction and all documents and contracts entered into in connection with its financing, for judgment against Norton for the $177,500 received in connection with the purchase by plaintiff, for judgment against the bank for $18,479.45 received by the bank as interest on the loan, and for discharge of any deficiency claimed by the bank in connection with the foreclosure.

Defendant Norton excepted to the petition on the ground that its allegations failed as a matter of law to support any recovery based on any special relationship of trust and confidence. This exception was never presented for a ruling, so far as the record shows, and, therefore, was waived. Norton also pleaded a general denial and alleged that the claim was barred by the two-year statute of limitations. The bank's answer contains similar allegations and also a counterclaim for a deficiency of $53,517.10 remaining on the note after foreclosure. Defendants filed a motion for summary judgment on various grounds, including the ground that the claim was barred by limitation because the fraud is alleged to have occurred more than two years before the suit was filed and that the petition fails to allege a special relationship of trust and confidence supporting a cause of action based on alleged nondisclosure. The bank's motion also asserts that it is entitled as a matter of law to judgment for the deficiency.

Affidavits filed in support of the motion include an affidavit by Norton which contains the following averments. Before July 1973, Norton was barely acquainted with plaintiff and had no social relationship with him, their only dealings having been discussions concerning plaintiff's purchase of a house. About that time plaintiff approached him requesting that he endeavor to find plaintiff some land so that plaintiff could acquire a needed tax write-off for the year 1973. Norton, who was then chairman of the Board of the Dallas County State Bank, showed plaintiff the land in question and informed him that it was available for purchase, but he gave plaintiff no financial advice and plaintiff sought none, and this was the extent of their dealings. He heard nothing more from plaintiff until October or November. In the meantime, Donna, Inc., in which Norton was a stockholder, entered into a contract to purchase the land for $162,500, to be paid at the time of closing, no later than December 27, 1973. In October or November, plaintiff telephoned and told him that plaintiff was interested in purchasing the land, but made no inquiry concerning its ownership. In December plaintiff entered into a contract to purchase the land from Donna, Inc. at a closing before the end of that month for a price of $177,500, which was loaned to him by the Dallas County State Bank. Norton was not present at the closing, when plaintiff signed the note and deed of trust in favor of the bank.

Plaintiff filed no counter affidavit and made no other written response to the motion. On appeal he contends, however, that the trial court erred in granting summary judgment because defendants' summary-judgment proof fails to establish that defendants were entitled to judgment as a matter of law in that it fails to negate the existence of a confidential relationship.

We conclude that Norton's affidavit, in the absence of any opposing summary-judgment evidence, is sufficient to negate the existence of a confidential relationship. He states categorically that he gave plaintiff no advice and plaintiff sought none, that he had no social relationship with him, and was only "barely acquainted" as the result of earlier circumstances concerning purchase of a house. Plaintiff's only request was to help him find some land that he could purchase for the purpose of a tax write-off. He showed plaintiff the land in question and later learned that plaintiff was interested in purchasing it. Since Norton says nothing about any further negotiations with plaintiff, we accept the allegations in the petition that all negotiations for the sale took place between plaintiff and Norton, who represented "that he had the authority to act on behalf of the owner of the property," and that Norton arranged a loan from the bank for the amount of the purchase price.

In plaintiff's brief the only facts suggested as indicating a confidential relationship are that plaintiff and Norton had previously known one another, that appellant asked Norton to watch for a good real estate deal which could be structured for a tax write-off in 1973, that Norton was the chairman of the board of the bank, and that Norton showed the real estate to him. These facts, though admitted, raise no inference contrary to Norton's affidavit, which, if not true, could easily have been controverted. Norton states that his previous acquaintance with plaintiff was slight and that no advice was given or sought. According to the petition, plaintiff did not regard Norton as his own agent, but as a person with "authority to act on behalf of the owner." The fact that Norton was an officer of the bank which made a loan of the amount of the purchase price does not raise a confidential relationship. Winston v. Lake Jackson Bank, 574 S.W.2d...