Opinion
5:23-CV-00402-FB-RBF
02-13-2024
CHRISTINE OLIVEROS, Plaintiff, v. DAVID RENE OLIVEROS, ROSS MOLINA OLIVEROS PC, JAMES MICHAEL OLIVEROS, Defendants.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE FRED BIERY, UNITED STATES DISTRICT JUDGE
This Report and Recommendation concerns Defendants' Motions for Summary Judgment (originally filed as Motions to Dismiss). See Dkt. Nos. 33, 34, & 35; see also Dkt. No. 47 (Order converting Motions to Dismiss to Motions for Summary Judgment). Also before the Court is Plaintiff's Motion to Set Aside Mutual Release. See Dkt. No. 58. All pretrial matters in this action have been referred for resolution, pursuant to Rules CV-72 and 1 of Appendix C to the Local Rules for the United States District Court for the Western District of Texas. See Dkt. No. 14. Authority to enter this recommendation stems from 28 U.S.C. § 636(b)(1)(B).
For the reasons set forth below, the Motions for Summary Judgment, Dkt. Nos. 33, 34, & 35, are converted back to Motions to Dismiss, and those motions to dismiss should be GRANTED IN PART and DENIED IN PART, as discussed below. The Court will take up Plaintiff's Motion to Set Aside Mutual Release by a separate order.
Factual and Procedural Background
This case centers around a divorce between Plaintiff Christine Oliveros and Defendant David Rene Oliveros. Defendant James Oliveros is David's brother. James is a partner at Defendant law firm Ross Molina Oliveros PC, and David is a non-partner attorney working at the firm.
Plaintiff Christine filed for divorce from David on March 3, 2020, in Bexar County, Texas. Dkt. No. 32, Second Amended Complaint, at 3-4 (“2d Am. Compl.”) According to Christine, she decided to end the 22-year marriage “after learning that Defendant David Oliveros had sexually assaulted her while she was ‘not cognizant' due to taking prescribed sleeping medication.” Id.
Three documents and one alleged incident are pertinent to the present motions. On March 18, 2021, while the then year-long divorce proceedings were pending, Christine, David, and James all signed and entered into a Mediated Settlement Agreement. It includes a release provision that states:
Mutual Release by all parties and Jim Oliveros as to all claims that are known or reasonably could have been known.
Dkt. No. 33, Exhibit I, Mediated Settlement Agreement at 7.
But then in April of 2021, an incident occurred at the Ross Molina Oliveros PC law firm. 2d Am. Compl. at 11. According to Christine's recounting of events, she was the victim of a physical assault by David. Id.
In November of 2021, Christine, David, and James all signed and executed an Agreement Incident to Divorce. The Agreement Incident to Divorce styles itself, “a merger of [the] mediated settlement agreement dated March 18, 2021, between the parties.” Dkt. No. 33, Exhibit N (“Agreement Incident to Divorce”) at 18. The Agreement Incident to Divorce, like the preceding Mediated Settlement Agreement, includes a release provision. See Dkt. No. 33, Exhibit I (“Mediated Settlement Agreement”). The release in the Agreement Incident to Divorce provides in pertinent part the following:
Save and except the obligations contained in this Agreement or in the Final Decree of Divorce, each party to this Agreement releases each other party to this Agreement for all claims, liabilities, debts, obligations, and causes of action of any and every character, whether asserted or unasserted, at law or equity, whether sounding in contract, tort, or arising under any federal or state statute, that each party may have against the other and that are known or reasonably could have been known.
Agreement Incident to Divorce at 15. As an aside, Christine now takes issue with the validity of this release, claiming the “release was obtained under both emotional and financial duress, duress of property, through fraudulent means, and should be deemed invalid.” 2d Am. Compl. at 8; Dkt. No. 38 at 14; Dkt. No. 39 at 6.
In January of 2022, the state court entered a final decree of divorce. Dkt. No. 33, Exhibit O (“Final Divorce Decree”). The decree incorporates by reference the Agreement Incident to Divorce, using the following language:
The Court finds that the Parties have entered into an Agreement Incident to Divorce, in a document separate from the Final Decree of Divorce. The Court approves the agreement and incorporates it by reference as part of this decree as if it were recited herein verbatim and orders the parties to do all things necessary to effectuate the agreement.
Final Divorce Decree at 2. The divorce decree also includes a mutual release, which states:
Save and except the obligations contained in this Final Decree of Divorce and the obligations contained in the parties' Agreement Incident to Divorce, CHRISTINE OLIVEROS and DAVID OLIVEROS have fully and forever released each other from all claims and causes of action of any and every character, whether asserted or unasserted, at law or in equity, whether sounding in contract, tort, or arising under any federal or state statute, that each party may have against the other and that are known or reasonably could have been known. This release does not apply to any claims or causes of action that may arise after March 18, 2021.
Final Divorce Decree at 28 (emphasis added).
Plaintiff Christine filed her complaint against Defendants David Oliveros, James Oliveros, and the Ross Molina Oliveros PC law firm on April 1, 2023. Dkt. No. 1. Against her former husband, Defendant David, Christine raises claims of sexual assault, physical assault, and civil conspiracy to defraud. 2d Am. Compl. at 6-8, 11-12, & 22-35. Against David's brother, Defendant James, Christine raises claims for sexual assault (as an accessory after the fact), fraud, civil conspiracy to defraud, knowing participation in breach of fiduciary duty, tortious interference with a contract or business relationship, and intentional infliction of emotional distress. Id. at 8-10 & 15-35. Against Ross Molina Oliveros PC, Christine alleges vicarious liability for physical assault, negligent retention, fraud, and civil conspiracy to defraud. Id. at 1215 & 22-35. In the present Motions to Dismiss, filed on August 8, 2023, Defendants ask the Court to dismiss Plaintiff's various claims on the basis of res judicata and due to pleading deficiencies. See generally Dkt. Nos. 33, 34 & 35.
In their Original Answer, Defendants David, James, and Ross Molina Oliveros PC raise counterclaims against Christine for breach of contract and trespass. Dkt. No. 11 at 15-16. These claims, however, are not at issue in the present motions and, indeed, are not presently the subject of any dispositive motion.
Upon its initial review of the present motions to dismiss, the Court observed that Defendants attached to those motions a significant amount of evidentiary material that had not been attached to or referenced in the live complaint. See id.; see also 2d Am. Compl. Accordingly, the Court ordered the motions converted to motions for summary judgment and ordered the parties to submit any additional summary judgment evidence they believed the Court should consider when resolving the motions in a summary judgment posture. See Dkt. No. 47.
But having spoken with the parties at a December 1, 2023, hearing on a motion to quash depositions, the Court will now-at the parties' request-convert the motions back to motions to dismiss and exclude from consideration when addressing those motions any evidence not properly before the Court under Rule 12(b)(6). See Dkt. No. 52.
Analysis
The Court will first explain why the motions are being converted back to motions to dismiss and, second, what the scope of the record is in connection with the Court's consideration of those motions. The Court then will address the motions' merits. As discussed further below, some of Plaintiff's claims warrant dismissal under the doctrine of res judicata, some warrant dismissal due to pleading deficiencies, and some survive Defendants' dismissal arguments. The surviving claims are Christine's claims against James Oliveros and Ross Molina Oliveros PC law firm for fraud and civil conspiracy to defraud, as well as Christine's claim against James for intentional infliction of emotional distress and her direct negligence claim against Ross Molina Oliveros PC law firm. Also still alive are all of Defendants' counterclaims, as none are the subject of a dispositive motion.
A. Defendants' Present Motions Should Be Converted Back to Motions to Dismiss.
Although the Court initially converted Defendants' motions to dismiss into motions for summary judgment, the parties both requested at the December 1 hearing that the motions be treated as motions to dismiss and that the Court exclude from consideration any evidence not properly before the Court in a Rule 12(b)(6) posture. Dkt. Nos. 52 & 53. In light of this request, the Court converts the motions to motions to dismiss.
Accordingly, IT IS ORDERED that Defendants' Motions for Summary Judgment, Dkt. Nos. 33, 34, & 35, are converted back to Motions to Dismiss.
B. The Court Considers Only Such Evidence as Is Properly Before It on a Rule 12(b)(6) Motion.
In reviewing the present motions to dismiss under Rule 12(b)(6), the Court will “accept[] all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” Martin K. Eby Const. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quotation marks omitted). The Court, however, need not credit conclusory allegations or allegations that merely restate the legal elements of a claim. Chhim v. Univ. of Tex. at Austin, 836 F.3d 467, 469 (5th Cir. 2016) (citing Iqbal, 556 U.S. at 678). In resolving the motions to dismiss, the Court does not consider any evidence outside the pleadings, except for documents that are attached or referred to in the live complaint or are central to the complaint. See Villarreal v. Wells Fargo Bank, N.A., 814 F.3d 763, 766 (5th Cir. 2016).
At the motion hearing on December 1, Defendants agreed to file a brief explaining which of the documents attached to their Motions to Dismiss could properly be considered under a 12(b)(6) standard. Dkt. No. 52. Christine agreed that she would respond with her position on the issue. Id. Both sides filed their respective briefs outlining which materials should be considered at this juncture. Dkt. Nos. 55 & 56. While the parties disagree on whether some documents can be considered, they agree that certain documents filed as part of the record in the state court divorce case may be considered. See id. Those documents-specifically, the Final Divorce Decree, Agreement Incident to Divorce, and Mediated Settlement Agreement-will be considered by the Court. The three documents are referred to in Christine's complaint, and the Final Divorce Decree and Mediated Settlement Agreement are attached to her complaint. See generally 2d Am. Compl. The Court will also take judicial notice of matters of public record, including all documents publicly filed as part of the divorce case. See Dkt. No. 56 at 4; see also Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008) (“A court [ruling on a motion to dismiss] is permitted . . . to rely on documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.”) (internal quotations omitted).
The parties also agree that a Correction Instrument may be considered. See Dkt. Nos. 55 & 56; see also Dkt. No. 33, Exhibit K (“Correction Instrument.”) Christine's complaint refers to the Correction Instrument, which is central to her fraud claims. See 2d Am. Compl. at 15-17, 31. Accordingly, it is also properly considered by the Court at this stage.
No argument seeking the Court to consider any other evidence in connection with the Rule 12(b)(6) motions convinces the Court. To consider the motions, the well-pleaded allegations in Christine's live complaint will be taken as true and modified only by conclusive or uncontested evidence in the Final Divorce Decree, the Agreement Incident to Divorce, the Mediated Settlement Agreement, or the Correction Instrument. All other evidence is excluded from the Court's consideration at this Rule 12(b)(6) stage of the case.
C. Plaintiff's Claims Against David Should Be Dismissed.
Defendant David's argument that Christine's claims are barred under the principles of res judicata is well taken. Res judicata “prevents relitigation of a claim or cause of action that has been finally adjudicated, as well as related matters that, with the use of diligence, should have been litigated in the prior suit.” Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992). When federal courts determine the preclusive effect of Texas judgments, Texas law applies. Basic Capital Mgmt., Inc. v. Dynex Capital, Inc., 976 F.3d 585, 591 (5th Cir. 2020). Under Texas law, “res judicata bars assertion of a claim in a subsequent case when: (1) there is a prior final judgment on the merits by a court of competent jurisdiction; (2) the parties in the second action are the same or in privity with those in the first action; and (3) the second action is based on the claims as were raised or could have been raised in the first action.” Id. (citing Weaver v. Tex. Capital Bank, N.A., 660 F.3d 900, 906 (5th Cir. 2011) (internal quotes omitted)). “To determine what claims could have been raised in the first action, Texas follows a transactional approach, under which a final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the action arose.” Id. (citing Barr, 837 S.W. at 631 (internal quotes omitted)).
The three requirements for res judicata under Texas law are met here with respect to Christine's claims against David. The Final Divorce Decree is a final judgment. Under Texas law, res judicata “applies to a final divorce decree to the same extent that it applies to any other final judgment.” Baxter v. Ruddle, 794 S.W.2d 761, 762 (Tex. 1990). The divorce decree itself bars relitigation of any claims by Christine against David that could have been raised in the divorce case. See Barr, 837 S.W.2d at 628. Further, the decree includes a release that, on its face, bars any claims against David predating March 18, 2021. Christine, therefore, cannot assert any claims against David that relate to the divorce as a matter of law. The parties in the present case and in the divorce-Christine and David-are the same. Finally, Christine could have raised her claims against David in the state divorce proceedings but did not. The claims all relate to the same transaction, the divorce. In sum, Christine is seeking to relitigate her divorce and raise claims against David-for assault, for fraud, for sexual assault-that she could have raised in her divorce case that wasn't final until January of 2022. Texas's transactional approach to res judicata bars these claims regardless of the various releases that were executed, although those releases do nothing to assist Christine's efforts.
Christine's argument that her claims against David are not barred do not convince the Court, including her argument that although she could have sued David in the divorce she didn't. Through this argument she urges, “Texas is a state in which joinder of such actions in tort in divorce proceedings in [sic] permissive, not mandatory . . . [so that] Christine . . . could have sued David for his rape during the marriage in the divorce proceedings, and may have even threatened to, but did not do so, and she did not recover damages for, nor was she compensated for the rape or physical assault in any way.” Dkt. No. 38 at 2. Christine further emphasizes that none of her claims against David were actually adjudicated in the divorce case. Id. at 8-10. This argument cannot be reconciled with Texas's transaction approach to res judicata, and Christine does not dispute that Texas follows that transactional approach.
The principal case Christine cites in support of her argument, Brinkman, actually undercuts her argument. Id. at 12 (citing Brinkman v. Brinkman, 966 S.W.2d 780, 782 (Tex. App.-San Antonio 1998, pet. denied). In Brinkman, the Court of Appeals cited Twyman, noting that “the Texas Supreme Court adopted the less extreme permissive approach, whereby the joinder of tort causes of action with divorce proceedings is permitted but not required.” Brinkman, 966 S.W.2d at 782 (citing Twyman v. Twyman, 855 S.W.2d 619, 624 (Tex. 1993)). However, the court noted immediately thereafter that in Twyman, “the court cautioned that while joinder of the two actions is permissive, the principles of res judicata remain applicable.” Id. (citing Twyman, 855 S.W.2d at 625) (emphasis added). Accordingly, the transactional approach to res judicata, as set out in Barr, still applies. 837 S.W.2d at 631.
Christine's claims all arise out of the same transaction (or at the very least, a “series of connected transactions, out of which the action arose”)-the divorce. See id. Indeed, Christine pleads that the alleged sexual assault was the instigating cause of the divorce. 2d Am. Compl. at 3-4. Because she could have brought all her connected claims against David relating to the divorce in the divorce case, those claims are now barred by res judicata.
As Christine's claims against David are barred by res judicata, the Court need not address David's fairly conclusory argument that the claims are also barred by the narrow Rooker-Feldman doctrine.
D. Plaintiff's Claims Against Defendant James Oliveros Are Not Barred .
Plaintiff Christine alleges claims against Defendant James for the following: sexual assault as an accessory after the fact, fraud, knowing participation in breach of fiduciary duty, tortious interference with a contract or business relationship, intentional infliction of emotional distress, and civil conspiracy to defraud. See generally 2d Am. Compl. James responds that Christine's claims against him are barred by res judicata and the Rooker-Feldman doctrine. Dkt. No. 34 at 2-5 & 13.
1. Christine's claims against James are not barred by res judicata. Res judicata applies when “the parties in the action are the same or in privity with those in the first action.” Basic Capital, 976 F.3d at 591 (emphasis added). Christine's claims against James are not barred by res judicata because James was not a party to the divorce case or the divorce decree.
Moreover, James's argument that he was in privity with David in the divorce case does not convince the Court under a 12(b)(6) standard. Under Texas law, there are “three ways” someone can be in privity with a judgment they are not a party to: “(1) they can control an action even if they are not parties to it; (2) their interests can be represented by a party to the action; or (3) they can be successors in interest, deriving their claims through a party to the prior action.” E.E.O.C. v. Jefferson Dental Clinics, PA, 478 F.3d 690, 694 (5th Cir. 2007), quoting Amstadt v, U.S. Brass Corp., 919 S.W.2d 644, 653 (internal quotations omitted). James invokes the first two of these, arguing that he was in privity with the divorce case because he controlled it and because David represented his interest in the case. He fails to convince on both.
Privity through control exists when “an individual actively and openly participated in the prior proceedings to such an extent that it was clear that the individual had the right to direct them.” E.E.O.C., 478 F.3d at 695, quoting Maxson v. Travis Cty. Rent Account, 21 S.W.3d 311, 316 (Tex. App.-Austin 1999). James argues that Christine's complaint itself establishes privity through control because she alleges James “maliciously inserted himself into the divorce case” and wrongfully took control. Dkt. No. 34 at 4. James also argues that he was in privity because David represented non-party James's interest in Christine's home that was involved in the divorce case. Id.
Privity is a fact-bound inquiry. Reading Christine's complaint fairly, the Court would be required to draw several inferences to conclude on the basis of the complaint's allegations that James “actively and openly participated” in the divorce case “to such an extent that it was clear that [he] had the right to direct” it. See E.E.O.C., 478 F.3d at 695 (emphasis added). Keep in mind, Christine alleges that James's participation in the divorce case was malicious and wrongful. See 2d Am. Compl. at 16-17. It is undisputed that James participated in the divorce case to some degree, but “mere participation” does not suffice to establish privity for res judicata. E.E.O.C., 478 F.3d at 695, quoting Brown v. Zimmerman, 160 S.W.3d 695, 703 (Tex. App.-Dallas 2005). While Christine's complaint and the documents properly before the Court suggest James had an interest in the marital home, it is not clear that part of David's role in the divorce was to represent that interest. See Correction Instrument, Mediated Settlement Agreement at 4, Agreement Incident to Divorce at 3, 2d Am. Compl. at 16. Conversely, James's involvement in signing and acting as a party to several of the agreements involved in the divorce proceedings indicates that perhaps David did not fully or significantly represent James's interest. Drawing all inferences in favor of Christine under Rule 12(b)(6)'s standard, the facts she alleges do not affirmatively establish that James was in privity.
James was, however, a signatory to two of the releases in the divorce case but this does little to assist him at this stage. See Mediated Settlement Agreement & Agreement Incident to Divorce. Christine's claims against James based on facts predating March 18, 2021, are arguably brought in violation of the Mediated Settlement Agreement's release. See Mediated Settlement Agreement at 7. And claims against him that arose prior to the November 12, 2021, date of the Agreement Incident to Divorce arguably violate that agreement's release. See Agreement Incident to Divorce at 15. But invoking these releases to bar Christine's claims is James' burden under Texas law, see Tex.R.Civ.P. 94, and thus the Court can only grant dismissal if the releases are valid on the face of the live complaint. See, e.g., Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986). Christine, however, takes issue with the validity of these releases in her complaint, claiming inter alia that they were procured by fraud. 2d Am. Compl. at 7-8.
2 . Christine's claims against James are not barred by the Rooker-Feldman doctrine. James argues, in conclusory fashion, that the narrow Rooker-Feldman doctrine bars Christine's claims against him. Dkt. No. 34 at 13. James' argument is devoid of analysis; indeed, he does not even provide the applicable four-part test adopted by the Supreme Court. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S 280, 284 (2005). On that basis alone, the Court rejects James's argument for failure to carry his burden under a 12(b)(6) standard. Regardless, Christine's claims against James are not Rooker-Feldman barred.
Rooker-Feldman is a complex, incredibly narrow doctrine that only applies in cases “[1] brought by state-court losers [2] complaining of injuries caused by state-court judgments [3] rendered before the district court proceedings commenced and [4] inviting district court review and rejection of those judgments.” Land & Bay Gauging, L.L.C. v. Shor, 623 Fed.Appx. 674, 678 (5th Cir. 2015) (emphasis added); citing Exxon Mobil, 544 U.S. at 284. Here, James does not explain how Christine's alleged injuries were caused by the divorce decree.
To the extent that any fraud claim Christine brings against James seeks to change the divorce decree, that relief would likely be barred. But resolving all ambiguities in Christine's favor, she alleges injuries distinct from the decree and asks for money damages, not to re-open or change the decree. Accordingly, the “second hallmark of the Rooker-Feldman inquiry” is not met. See Truong v. Bank of America, N.A., 717 F.3d 377, 382 (5th Cir. 2013). In Truong, the Fifth Circuit gave several examples of cases not barred by Rooker-Feldman because the plaintiffs' alleged injuries were not caused by the state-court judgment, and James has not done enough to explain why such cases don't control the issue here.
See id. at 382-83 (citing Noel v. Hall, 341 F.3d 1148, 1164 (9th Cir. 2003) (noting that if a plaintiff asserts as a legal wrong an allegedly illegal act or omission by an adverse party, rather than an allegedly erroneous decision by a state court, Rooker-Feldman does not bar the case), Scott v. Fortenberry, 278 Fed.Appx. 440, 441 (5th Cir. 2008) (“Rooker-Feldman does not bar a 1983 plaintiff's claim for damages arising from court reporter's failure to prepare a trial transcript and consequent delay of his criminal appeal because the suit did not challenge his conviction.”); and Mosley v. Bowie Cnty. Tex., 275 Fed.Appx. 327, 328-29 (5th Cir. 2008) (“Rooker-Feldman bars a claim that a state child support order is void, but not a claim that state government defendants violated the federal plaintiffs' constitutional rights in the course of enforcing the order.”)).
Furthermore, to determine whether a plaintiff is complaining of injuries caused by statecourt judgments, courts have looked at the timing of the alleged injuries. See Land & Bay Gauging, 623 Fed.Appx. at 679; citing Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 172 (observing that a “useful guidepost is the timing of the injury”). Here, the timing indicates that the divorce decree itself was not the source of Christine's alleged injuries-all the facts she alleges giving rise to her claims occurred prior to the Final Divorce Decree judgment on January 11, 2022. See generally 2d Am. Compl.; see also Final Divorce Decree. James has not carried his burden to demonstrate that Christine's claims against him are barred by res judicata or Rooker-Feldman.
Whether James could benefit from any preclusion principles as to the validity of the releases based on the divorce decree-as opposed to only res judicata-is an issue the parties do not raise or brief. In sum, James has not demonstrated that Chirstine's claims against him are barred pursuant to either of the two arguments raised in his motion.
E. Some of Plaintiff's Claims Should Be Dismissed for Pleading Deficiencies or
Failure to State a Viable Claim.
Christine also brings claims against Defendants James and the Ross Molina Oliveros PC law firm that fail for pleading deficiencies. Again, under a Rule 12(b)(6) standard, the Court “accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” Martin, 369 F.3d at 467 (5th Cir. 2004). But the Court will not accept conclusory allegations or allegations that merely restate the legal elements of a claim. Chhim, 836 F.3d at 469.
1. Christine's claim against James for sexual assault as an accessory after the fact should be dismissed. In her apparently criminal claim against James, Christine relies on § 38.05 of the Texas Penal Code and 18 U.S.C. §§ 3, 1512, & 1513. There is no private cause of action under the Texas Penal Code or under the federal criminal statutes Christine cites. See Hanna v. Home Ins. Co., 281 F.2d 298, 303 (5th Cir. 1960); Jones v. Chevron Phillips Chem. Co., No. A-14-CV-761-DAE at *4 (W.D. Tex. 2014); Spurlock v. Johnson, 94 S.W.3d 655, 658 (Tex. App.-San Antonio 2002, no pet.). Christine does not plead any facts or make any arguments explaining how she could recover via criminal charges raised in a civil case. This claim against James should be dismissed.
2. Christine's claim against James for knowing participation in breach of fiduciary duty should be dismissed. Knowing participation in breach of fiduciary duty is a derivative claim that depends on a claim for breach of fiduciary duty. See Matter of Estate of Poe, 648 S.W.3d 277, 286 (Tex. 2002). Under Texas law, “where a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such.” Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 574 (Tex. 1942) (emphasis added). Christine alleges that James “maliciously inserted himself into the dealings and participated in Charles Hardy [Christine's divorce attorney]'s breach of fiduciary duty to Christine.” 2d Am. Compl. at 17. But a defendant's liability for a derivative tort “depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.” Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996) (emphasis added). Christine has not sued her divorce attorney, Charles Hardy, for breach of fiduciary duty. Therefore, the derivative claim against James fails. This claim should be dismissed.
3. Christine's claim against James for tortious interference with a contract should be dismissed. In Texas, a person “must be a stranger to a contract to tortiously interfere with it.” In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 761 (Tex. 2006) (quoting Morgan Stanley & Co., Inc. v. Texas Oil Co., 958 S.W.2d 178, 179 (Tex. 1997)). Christine's complaint alleges that James was a party to the Mediated Settlement Agreement and Agreement Incident to Divorce, and the documents properly considered by the Court confirm her allegations in that regard. See 2d Am. Compl. at 19; see also Mediated Settlement Agreement & Agreement Incident to Divorce. Taking Christine's complaint as true, she has failed to successfully plead a claim against James for tortious interference. Since James was a party to the contracts mentioned by Christine in her complaint, he was not a “stranger” to the contracts and cannot be liable for tortious interference with them. See id.; see also In re Vesta, 192 S.W.3d at 761. Therefore, this claim should be dismissed.
4. Christine's claim against Ross Molina Oliveros PC law firm for vicarious liability for physical assault should be dismissed. In Texas, claims for vicarious liability are considered “liability-spreading theories [that] depend upon liability for an underlying tort, and they survive or fail alongside that tort.” Nettles v. GTECH Corporation, 606 S.W.3d 726, 738 (Tex. 2020). Christine's claim for vicarious liability against the law firm for physical assault is based on her underlying claim against David for physical assault. 2d Am. Compl. at 12-14. Christine's claims against David are barred, as explained above. Without direct liability against David for the alleged assault, there can be no vicarious liability against his employer for the same alleged incident. See Nettles, 606 S.W.3d at 738. This claim should be dismissed.
F. Some of Plaintiff's Claims Survive Defendants' Motions to Dismiss.
Some of Christine's claims survive at this stage.
1. Christine's complaint against James for fraud should not be dismissed under a 12(b)(6) standard. In her complaint, Christine alleges various facts supporting her claim against James for fraud, and at this stage the Court takes those facts as true. See Martin, 369 F.3d at 467 (5th Cir. 2004). In his motion to dismiss, James argues that Christine's fraud claim is “nonsensical” because she cannot establish a critical element of fraud: reliance. See Dkt. No. 34 at 6; see also Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (“A commonlaw fraud claim requires a material misrepresentation, which was false, and which was either known to be false when made or was asserted without knowledge of its truth, which was intended to be acted upon, which was relied upon, and which caused injury.”). James also argues “it is obvious” that Christine's pleadings affirmatively disprove her reliance on James' alleged misrepresentations because she “immediately disputed” them. Dkt. No. 34 at 6. James also argues that Christine failed to establish that James intended to induce her reliance and that she suffered damages. Id. at 7-8. These arguments fall short because they all implicate disputed fact issues.
The question before this Court is not whether Christine has established each element of fraud, but whether she has sufficiently pleaded a plausible claim for relief that can survive a motion to dismiss. Christine alleges that James fraudulently added his name to the title of her house, that she “was deceived and acted upon that deception,” and that she “suffered great damages emotionally, mentally and financially . . . and she had to hire a property attorney.” 2d Am. Compl. at 16. These allegations, taken as true, plead not only reliance but also James's intent and Christine's damages.
2. For the same reason that Christine's claims for fraud against James don't fail, her fraud claim against Ross Molina Oliveros PC law firm doesn't fail. Christine alleged that James, a partner at the law firm, used the law firm's mailing envelope to send the allegedly fraudulent document adding James to the title of her house. See 2d Am. Compl. at 16. She also alleges that another employee of Ross Molina Oliveros PC law firm was involved in the fraud by notarizing the allegedly fraudulent document. Id. Under a Rule 12(b)(6) standard that resolves all inferences in favor of Christine, her claim survives the law firm's motion to dismiss.
In its response and reply, the law firm argues only that Christine's fraud claim against James is barred, which then also bars her fraud claim against the firm. Dkt. Nos. 35 & 46. The firm, like James, also argues that Christine failed to show the essential element of reliance. However, as explained above, Christine pleads various allegations supporting reliance or a reasonable inference to that effect, and the Court takes her pleading as true at this stage and draws such inferences in her favor. See 2d Am. Compl. at 16. Accordingly, for the same reasons that Christine's fraud claim against Jame survives, so does her fraud claim against Ross Molina Oliveros PC law firm.
3. Christine's claims for civil conspiracy to defraud against James and Ross Molina Oliveros PC law firm survive. In Texas, a civil conspiracy is defined as “a combination of two or more persons to accomplish an unlawful purpose, or to accomplish a lawful purpose by unlawful means.” Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). It is a derivative tort, meaning that “a defendant's liability for conspiracy depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.” Id. Here, Christine has alleged that two or more persons, namely, James and the law firm, conspired to defraud her. 2d Am. Compl. at 22-35. She has also alleged various facts supporting her underlying fraud claim; for example, she alleges that James sent her a fraudulent document which she detrimentally relied on, and that the document was sent via a law firm envelope and notarized by a law firm employee. See id. at 16. Therefore, this claim, as to James and the law firm, survives.
No party discusses whether and to what extent a law firm can conspire with its own employee in circumstances such as those alleged here, and so the Court declines to address that topic.
4. Christine's claim for intentional infliction of emotional distress against James should not be dismissed at this stage. In Texas, the elements of intentional infliction of emotional distress are: “(1) the defendant acted intentionally or recklessly; (2) its conduct was extreme and outrageous; (3) its actions caused the plaintiff emotional distress; and (4) the emotional distress was severe.” Hersh v. Tatum, 526 S.W.3d 462, 468 (Tex. 2017). In support of this claim Christine alleges, inter alia, that James “interrogated [her] . . . about being raped,” “mocked . . . her pain and trauma and tried to tell her that it did not count as rape,” “mocked [her] fragile mental state,” “yelled at [her] children,” and “instructed David . . . to use physical force to throw Christine out of [the Defendant law firm] with aggression and cruelty.” 2d Am. Compl. at 20-21. Christine further alleges that this conduct was extreme and outrageous, and that it caused her severe emotional distress. Id. at 22. (“James [sic] maliciousness and cruelty towards Christine nearly caused her to commit suicide and it ended up causing her to move away from Texas and her children suffered daily... [t]his is very disruptive and traumatizing to Christine as a mother to see her children so traumatized.”).
James argues that Christine's claim should be dismissed as a matter of law because it is “nothing more than a regurgitated summary of her other claims against James.” Dkt. No. 34 at 13-14. But Christine alleges various facts to support her intentional-infliction-of-emotional-distress claim that are not stated anywhere else in her complaint. See 2d Am. Compl. at 20-22 (“James interrogated Christine via text and . phone call about her being raped,” “James mocked Christine and .tried to tell her that it did not count as rape,” “James had called and yelled at [Christine's children].”). It is not, as James argues, based on the exact same conduct she alleges in her other claims against James. And although the Court need not credit her legal conclusions or conclusory allegations, there are sufficient specific facts alleged to describe a plausible claim.
James' argument that Christine's claim should be dismissed because his alleged conduct is not sufficiently extreme and outrageous fails under the Rule 12(b)(6) standard. Dkt. No. 34 at 15-16. In Texas, “[w]hether a defendant's conduct is extreme and outrageous is a matter of law.” Bradford v. Vento, 48 S.W.3d 749, 758 (Tex. 2001). James argues that the conduct Christine alleges against him, as a matter of law, cannot satisfy this element of her tort claim. Dkt. No. 24 at 15-16. James cites several Texas Supreme Court cases to support his contention that Christine's claims fail as a matter of law. See Bradford, 48 S.W.3d at 758; Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); Kroger Texas Ltd. Partnership v. Suberu, 216 S.W.3d 788, 798 (Tex. 2006); Twyman, 855 S.W.2d at 622. One of the cases is inapplicable: in Twyman, the Texas Supreme Court held that the plaintiff could not recover because the trial court did not make findings of outrageousness or extreme emotional distress-but this was because, at the trial court, the plaintiff's claim was negligent infliction of emotional distress. See 855 S.W.2d at 62526. The Court in Twyman remanded the case for a new trial. Id. at 626.
The other cases are distinguishable. In Bradford, the defendant was the landlord of a store at a mall. 48 S.W.3d at 752-53. After an altercation between the plaintiff and a third party, the defendant told the police that the third party owned the store and that “he did not want [the plaintiff] in the mall since he was causing a scene.” Id. at 753. The plaintiff believed that he was the store's proper tenant and brought an intentional infliction of emotional distress claim against the defendant. Id. The facts Christine alleges in her complaint, taken as true, are more egregious than the facts in Bradford.
Kroger is also distinguishable. In Kroger, the plaintiff was acquitted of a misdemeanor theft charge for alleged shoplifting. 216 S.W.3d at 791. Then, the plaintiff sued the grocery store where the alleged incident occurred, claiming intentional infliction of emotional distress and urging that the grocery store “knowingly provid[ed] false information to police so that an innocent person is prosecuted.” Id. at 791, 796. The Court found that such behavior would be sufficiently extreme and outrageous if the evidence supported it. Id. at 796. But the Court found that the evidence was insufficient to show that “Kroger did not honestly and reasonably believe [the plaintiff] was guilty.” Id. The facts Christine alleges in her complaint are also more egregious than the facts in Kroger. And whether Christine has provided sufficient evidence to support her factual allegations is not appropriately considered by the Court on a motion to dismiss.
Tiller presents a factual scenario most comparable to that before the Court, but it is still distinguishable. The plaintiff in Tiller owned a construction company with her husband. 121 S.W.3d at 711. Their company contracted with the defendant to complete a construction project. Id. The plaintiff's husband became ill and died during the project, and the plaintiff increasingly took over more management duties of the company. Id. The plaintiff sent a letter to the defendant letting him know that the project would nevertheless be completed, but that it was a hard time for her. Id. at 711-12. Throughout the project, the defendant called the plaintiff and her children at home many times at odd hours, including late at night, on Sunday mornings, and over holidays. Id. at 712. He “raised hell” with her, and was “rude, demanding and curt.” Id. At one point, when the construction site was shut down for one day, the day of the plaintiff's husband's funeral, the defendant threatened to terminate the contract. Id. The Court held that this threat was the most egregious of the defendant's actions, but even so, it was not sufficiently extreme and outrageous as a matter of law. Id. at 713-14. The Court highlighted that “to determine whether certain conduct is extreme and outrageous, [courts] consider the context and the relationship between the parties.” Id. at 714 (citing GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 612 (Tex. 1999)). The Court determined that in the context of a business relationship, where the plaintiff was designated as a contact person for complaints relating to the project, and especially because the defendant only complained about the project and did not insult the plaintiff personally or threaten to harm her, the defendant's conduct was not sufficiently extreme and outrageous. Id. at 714.
Like in Tiller, the conduct Christine complains of involves phone calls by James and alleged cruel comments made to her and her children. However, Christine also alleges that James incited David to “use physical force to throw Christine out” of the law firm. 2d Am. Compl. at 20-21. Taking this allegation as true, it distinguishes Christine's allegations from the facts in Tiller. Additionally, the context in the two cases is different: Tiller involved a business relationship with a plaintiff who opted to receive customer complaints by phone, while this case involves a family relationship and allegations of highly personal statements about an alleged sexual assault. Based on the facts at hand, the Court cannot apply the same reasoning as the court in Tiller.
Here, the question before the Court is whether Christine has pleaded sufficient factual allegations to state a “plausible” claim to relief and survive a motion to dismiss. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Taking Christine's allegations as true, she has described extreme and outrageous conduct. She alleges intentional cruelty and incitement to violence in the aftermath of an intentional sexual assault. Nothing in Defendants' arguments convince the Court that Christine has failed to plead sufficient facts to raise a plausible claim for relief.
5. Christine's claim against Ross Molina Oliveros PC law firm for negligent retention should not be dismissed. The claim against Ross Molina Oliveros PC law firm for negligent retention should not be dismissed because Christine has pleaded facts plausibly demonstrating a claim for relief. The Texas Supreme Court has not ruled definitively on the existence or elements of a negligent-retention cause of action. Pagayon v. Exxon Mobil Corp., 536 S.W.3d 499, 505 (Tex. 2017) (citing Waffle House, Inc. v. Williams, 313 S.W.3 796, 804 n.27 (Tex. 2010)). Various Texas Courts of Appeals have recognized a claim for negligent retention and “have often held employers to very general duties, but they have not weighed the factors that determine whether a duty exists, and what it is.” Id. at 505-06. Common law negligence, however, is recognized under Texas law, and has three elements: “1) a legal duty owed by one person to another; 2) a breach of that duty; and 3) damages proximately resulting from the breach. Greater Hous. Transp. Co. v. Phillips, 801 S.W.3d 523, 525 (Tex. 1990).
The five relevant factors in determining whether a defendant owed a duty to a third party are “risk, foreseeability, and likelihood of injury weighed against the social utility of the actor's conduct, the magnitude of the burden guarding against the injury, and the consequences of placing the burden on the defendant.” Id. at 525; see also Pagayon, 536 S.W.3d at 507-08. In Pagayon, the Texas Supreme Court assessed a negligent retention claim by analyzing various factors that determine whether an employer in certain situation owes a duty to third parties to supervise its employees. See id. at 507-508. There, the Court considered various facts relevant to the legal question of whether the employer owed a duty to a third party. Id. In applying the facts to the Phillips factors mentioned above, the Court found that the employer owed no duty as a matter of law and reversed the jury verdict. Id.
In her complaint, Christine alleges various facts surrounding the circumstances under which David allegedly physically assaulted her on the premises of the law firm. See 2d Am. Compl. at 11-12. She also alleges that Ross Molina Oliveros PC had a “legal duty to hire, supervise, train, and retain competent employees” and to “protect the public . . . from . . . abuse.” 2d Am. Compl. at 14. Christine also alleges that the law firm “was made aware of the events alleged herein and that [David] had a history of domestic violence and sexual assault” and that the firm “breached its duty . . . due to the fact that it retained [David] as an employee without any limitations or supervision or remedies to ensure the safety of anyone in the general public on company property or the environment after becoming aware of his history of domestic violence and sexual assault.” Id. at 14-15.
Defendant Ross Molina Oliveros PC law firm admits that Christine's claim is “a claim for direct liability against [the law firm], not vicarious liability.” Dkt. No. 35 at 3. Therefore, it does not necessarily fail because the claim against David fails. Cf. Nettles, 606 S.W.3d at 738. In arguing why this claim should be dismissed, however, the law firm claims that “the existence of a legal duty is a threshold question of law for the court to decide based on the facts surrounding the occurrence in question.” Dkt. No. 35 at 3-4 (citing Greater Hous. Transp. Co., 801 S.W.3d at 525) (emphasis added). But the law firm does not provide further analysis under a Rule 12(b)(6) standard, which requires the Court to accept as true facts alleged in the complaint. Twombly, 550 U.S. 544 at 556; see also Martin, 369 F.3d at 467 (5th Cir. 2004). This claim, and the law firm's response to it, raise a fact issue which the Court cannot properly resolve at this stage of the litigation.
The law firm contends that Christine's negligent retention claim must be dismissed because she is required to allege facts showing that her injury relates to “David's competence or fitness to perform his job [at the law firm]”-specifically, his legal work as an attorney, though the Court finds this unpersuasive. Dkt. No. 35 at 4. The law firm cites Houser v. Smith for this proposition. 968 S.W.2d 542, 544 (Tex. App-Austin 1998, no pet.) (noting, “the theory of negligent hiring and supervision does require that a plaintiff's harm be the result of the employment.” (emphasis added)). But Houser doesn't appear to support the law firm's reading of it, and the firm has provided no Texas Supreme Court case or other binding authority to support its contention. Considering Pagayon's hesitance to clearly recognize or set out elements for negligent retention, Christine's claim is more fairly read as a simple negligence claim. Pagayon, in fact, also involved a claim that an employer owed a duty to a third party, and the Court there declined to find that the negligence claim must relate to the nature of the employee's job. See generally Pagayon, 968 S.W.2d 542.
Considering the facts that Christine alleged and applying those to the five factors Texas courts use in determining the existence of a legal duty, her claim survives the law firm's motion to dismiss. Christine's allegations that prior to the incident in question the law firm was “aware . . . that [David] had a history of domestic violence and sexual assault,” and that the firm had no “limitations or supervision or remedies to ensure the safety of anyone in the general public on company property” inform the Court's weighing of the risk, foreseeability, likelihood, and consequence factors. See 2d Am. Compl. at 14; see also Pagayon, 536 S.W.3d at 507-08. These allegations support Christine's claim that the firm owed her a legal duty. At this stage, considering all facts Christine alleges as true, the law firm has failed to carry its burden to show that Christine's direct negligence claim warrants dismissal.
Conclusion and Recommendation
For the reasons discussed above, it is recommended that Defendants' Motions to Dismiss, Dkt. Nos. 33, 34, & 35, be GRANTED IN PART and DENIED IN PART. Plaintiff's Motion to Set Aside Mutual Release, Dkt. No. 58, will be taken up by the Court in due time by a separate order.
The surviving claims are Christine's claims against James Oliveros and Ross Molina Oliveros PC law firm for fraud and civil conspiracy to defraud, as well as Christine's claim against James for intentional infliction of emotional distress and her direct negligence claim against Ross Molina Oliveros PC law firm.
Also surviving are the three defendants' two counterclaims against Christine for trespass and breach of contract, as neither counterclaim has been the subject of a dispositive motion. See Dkt. No. 11.
The Court anticipates motions for summary judgment will be filed. Accordingly, the Court will by separate order extend the deadlines for discovery and to file motions for summary judgment. The parties need not wait until the completion of those deadlines to file motions.
Instructions for Service and Notice of Right to Object/Appeal
The United States District Clerk shall serve a copy of this report and recommendation on all parties by either (1) electronic transmittal to all parties represented by attorneys registered as a “filing user” with the clerk of court, or (2) by mailing a copy by certified mail, return receipt requested, to those not registered. Written objections to this report and recommendation must be filed within fourteen (14) days after being served with a copy of same, unless this time period is modified by the district court. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Objections, responses, and replies must comply with the same page limits as other filings, unless otherwise excused by the district court's standing orders. See Rule CV-7. The objecting party shall file the objections with the clerk of the court, and serve the objections on all other parties. A party filing objections must specifically identify those findings, conclusions, or recommendations to which objections are being made and the basis for such objections; the district court need not consider frivolous, conclusory, or general objections. A party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the district court. Thomas v. Arn, 474 U.S. 140, 149-52 (1985); Acuna v. Brown & Root, Inc., 200 F.3d 335, 340 (5th Cir. 2000). Additionally, failure to timely file written objections to the proposed findings, conclusions, and recommendations contained in this report and recommendation shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the district court. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).
IT IS SO ORDERED.