Opinion
NO. 4:09-CV-456-A.
March 10, 2010
MEMORANDUM OPINION and ORDER
Before the court for decision is the motion for summary judgment of defendants, Darren Simpkins, Kelly Simpkins, and Darren Simpkins Cutting Horses, Inc. After having considered such motion, the response of plaintiffs, Lynn Welk and Larry Welk, thereto, the reply of defendants, the surreply of plaintiffs, the summary judgment record, and pertinent legal authorities, the court has concluded that defendants' motion should be granted.
Each side has made objections to the other's summary judgment evidence. Rather than ruling on those objections, the court is giving everything tendered by either party as summary judgment evidence whatever weight it deserves.
I. The Pleadings
A. Plaintiffs' Pleaded Claims
This action was initiated by plaintiffs by the filing of their original complaint on August 5, 2009. Plaintiffs' current pleading is their second amended complaint filed September 16, 2009. They alleged negligence, breach of contract, fraud, fraudulent concealment, and breach of fiduciary duty claims against defendants growing out of veterinarian treatment a horse owned by plaintiffs underwent while under the care of defendants in June and July 2005. Plaintiffs alleged that:In August 2004 plaintiffs, who reside in Malibu, California, placed their horse Juan Bad Cat with defendants in Weatherford, Texas, for cutting horse training. When they did so, plaintiffs and defendants had an oral agreement that defendants were to provide reasonable and prudent training and care to the horse along with room and board, for which plaintiffs would pay defendants on a monthly basis. The horse previously had received treatment for a bone cyst in his right stifle joint from Dr. Van Snow in California. Because of that treatment, Ms. Welk gave instructions to Ms. Simpkins that nothing was to be done to the horse without first consulting Dr. Snow. If defendants had not agreed to that arrangement, plaintiffs would not have allowed defendants to train the horse.
On June 10, 2005, the horse was taken by Ms. Simpkins to Dr. Jeffrey Foland in Weatherford for an examination because of partial lameness in the horse's right stifle. Ms. Simpkins verbally informed Dr. Foland when the horse was delivered to him that nothing was to be done to the horse without first consulting with Dr. Snow. When Dr. Foland started to tend to the horse, he could not get in touch with Dr. Snow. Dr. Foland contacted Mr. Simpkins and asked for permission to inject the horse's right stifle joint. Mr. Simpkins gave Dr. Foland permission to do so. As a result of that injection, the horse subsequently progressed to complete lameness. Defendants returned the horse to Dr. Foland on July 2, 2005, when Dr. Foland gave the horse another injection in the right stifle, again without consulting with or obtaining permission from Dr. Snow and based on permission given by Mr. or Ms. Simpkins.
Because of damage to the stifle joint from the injections performed by Dr. Foland, and Dr. Foland's course of treatment of the horse, the horse underwent arthroscopic surgery under general anesthesia on July 8, 2005. The end result was permanent damage to the horse's right stifle, ending any show career for the horse. Prior to the injections and course of treatment in June and July 2005, the horse had shown outstanding potential for training and was slated for a distinguished career in cutting horse competition. Subsequent thereto due to defendants' conduct, he cannot compete, will not have a career as a cutting horse, and his career as a sire will be severely limited.
After the surgery was performed on the horse, plaintiffs discussed with defendants what had occurred with the horse. During those discussions, Ms. Welk repeatedly asked Ms. Simpkins if she had informed Dr. Foland that he was to consult with Dr. Snow before doing anything to the horse; and, each time Ms. Simpkins replied "yes." Because of the long relationship between Ms. Welk and Ms. Simpkins, Ms. Welk had no reason to believe that Ms. Simpkins was being dishonest or holding back any information. At no time before August 2007 did Mr. or Ms. Simpkins ever admit to plaintiffs that they had given Dr. Foland permission to inject the horse on June 10 and July 2, 2005, with the consequence that there is no way that plaintiffs would have known earlier about any cause of action they may have had against defendants.
On August 14, 2007, an attorney for plaintiffs met and interviewed Mr. and Ms. Simpkins at their ranch in Weatherford, at which time Mr. and Ms. Simpkins first admitted giving permission to Dr. Foland for the injections on June 10 and July 2, 2005. The withholding of the information that Mr. and Ms. Simpkins gave permission to Dr. Foland to give the injections breached the fiduciary duty Mr. and Ms. Simpkins had to plaintiffs, thus making the injury inherently undiscoverable.
Defendants were negligent in that (1) they failed to comply with plaintiffs' instructions not to do anything with the horse without consulting Dr. Snow, (2) they gave permission to Dr. Foland to inject the horse in the right stifle joint twice, and (3) they failed to secure plaintiffs' consent prior to giving Dr. Foland permission to inject the horse. Defendants fraudulently concealed from plaintiffs that they gave Dr. Foland permission to inject the horse on June 10 and July 2, 2005. Mr. and Ms. Simpkins were aware that they had concealed their unlawful conduct by not telling plaintiffs that they had given permission for the injections until after the time they believed the statute of limitations had run. Plaintiffs exercised due diligence in trying to determine what occurred with the horse that caused his injury.
In support of their fraud cause of action, plaintiffs alleged that defendants falsely made a material representation that they would follow plaintiffs' instructions that Dr. Snow would be consulted before anything was done to the horse. Defendants knew when they made that representation that it was false, or recklessly made as a positive assertion without knowledge of its truth. Defendants intended to induce plaintiffs by the representation to allow defendants to train and care for the horse, and plaintiffs actually and justifiably relied upon the representation, thereby suffering injury.
The breach of contract claim is based on alleged conduct of defendants in giving permission to Dr. Foland to inject the horse. Plaintiffs say that such conduct violated an oral contract plaintiffs and defendants entered into when the horse was delivered by plaintiffs to defendants for training in August 2004. That breach caused plaintiffs to be damaged by the loss of value of their horse resulting from the injections and course of treatment Dr. Foland provided to the horse.
According to plaintiffs, an informal fiduciary relationship existed between plaintiffs and defendants, separate from the training of the horse. Plaintiffs knew defendants in both a professional capacity, as defendants trained many of plaintiffs' horses, and in a personal capacity, as they were all friends for a number of years prior to August 2004. In addition, there existed a formal fiduciary relationship between plaintiffs and defendants, that of principal and agent. Mr. and Ms. Simpkins were the agents of plaintiffs and thereby owed them a duty of loyalty, good faith, fair dealing, integrity in all matters, avoidance of conflicting positions, and disclosure of all material information. When defendants gave Dr. Foland permission to inject and treat the horse without first consulting with Dr. Snow, they violated their fiduciary obligations to plaintiffs, to the damage of plaintiffs.
In anticipation of a statute of limitations defense, plaintiffs alleged, under the heading "Discovery Rule," that:
The discovery rule applies because the injury and the cause of action against Defendants was inherently undiscoverable due to Defendants' concealment and breach of fiduciary duty herein in addition to Defendants' fraudulent concealment.
Second Am. Compl. at 14.
B. Defendants' Answer to the Second Amended Complaint
Defendants admitted in their answer plaintiffs' allegations that plaintiffs delivered the horse to defendants for training in August 2004; that there were business and personal relationships between plaintiffs and defendants that started about three-and-a-half years before August 2004; that they took the horse to Dr. Foland at his clinic on June 10, 2005; that Ms. Simpkins told Dr. Foland that he could consult with Dr. Snow in California; that Dr. Foland later contacted Mr. Simpkins and recommended a course of treatment; and, that Mr. Simpkins, in reliance on Dr. Foland's advice, gave authorization for Dr. Foland to treat the horse. Otherwise, defendants denied the allegations made in the second amended complaint. As one of their affirmative defenses, defendants pleaded that plaintiffs' claims are barred by limitations.
II. Grounds of Defendants' Motion and Plaintiffs' Response
A. The Motion
Under the heading "Summary and Grounds for Motion" in defendants' brief in support of their motion, they asserted that:
The injury giving rise to the causes of action asserted by Plaintiffs, Lynn and Larry Welk, occurred in June 2005, more than four years prior to the filing of this action. Whether the two-year or four-year statute of limitations applies, Plaintiffs' claims are barred by limitations.
As a defense to part of the limitations argument, Plaintiffs have urged that Defendants owed them a fiduciary duty requiring full disclosure of all facts known to them. Plaintiffs cannot establish the existence of a fiduciary relationship with Defendants under the facts of this case, because the relationship arises solely out of, and as a result of, business dealings.
Br. in Supp. of Mot. at 1-2.
Defendants contended that plaintiffs' negligence claim is barred by the Texas two-year statute of limitations, section 16.003 of the Texas Civil Practice and Remedies Code, and that the remaining claims for breach of contract, fraud, and breach of fiduciary duty are barred by the four-year statutes of limitations, sections 16.004 and 16.051 of the same code. If plaintiffs have any cause of action against them, defendants asserted that it accrued no later than July 2005, when plaintiffs say that they learned that their horse had been injected.
The pertinent text of section 16.003 is as follows:
[A] person must bring suit . . . for injury . . . to the property of another . . . not later than two years after the day the cause of action accrues.
Tex. Civ. Prac. Rem. Code § 16.003 (Vernon 2002).
The pertinent text of sections 16.004 and 16.051 is as follows:
(a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues:
. . . .
(4) fraud; or
(5) breach of fiduciary duty.
Tex. Civ. Prac. Rem. Code § 16.004(a) (Vernon 2002).
Every action for which there is no express limitations period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues.Id. § 16.051 (Vernon 2008).
B. Plaintiffs' Response
Plaintiffs responded by maintaining that the discovery rule and the doctrine of fraudulent concealment apply and served to prevent the running of limitations on plaintiffs' claims against defendants until no earlier than August 14, 2007, when plaintiffs say they first learned, or could have learned, of the fact that Mr. Simpkins authorized Dr. Foland to inject the horse in June and July 2005 without first consulting with Dr. Snow. They argue that there are genuine issues of fact that are material to whether the discovery rule and fraudulent concealment doctrines apply, thus precluding the grant of summary judgment.
III. Analysis
A. Pertinent Summary Judgment Standards
A party is entitled to summary judgment on all or any part of a claim as to which there is no genuine issue of material fact and as to which the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The moving party has the initial burden of showing that there is no genuine issue of material fact. Anderson, 477 U.S. at 256. The movant may discharge this burden by pointing out the absence of evidence to support one or more essential elements of the non-moving party's claim "since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial."Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). The party opposing the motion may not rest on mere allegations of the pleadings, but must set forth specific facts showing a genuine issue for trial. Anderson, 477 U.S. at 248, 256. To meet this burden, the nonmovant must "identify specific evidence in the record and articulate the `precise manner' in which that evidence support[s] [its] claim[s]." Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994).
The standard for granting a motion for summary judgment is the same as the standard for rendering judgment as a matter of law. Celotex Corp., 477 U.S. at 323. If the record taken as a whole could not lead a rational trier of fact to find for the nonmovant party, there is no genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 597 (1986). See also Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir. 1969) (en banc) (explaining the standard to be applied in determining whether the court should enter judgment on motions for directed verdict or for judgment notwithstanding the verdict).
B. Accrual of the Causes of Action Plaintiffs Are Assumed to Have Against Defendants
The court assumes, arguendo, for the time being, that the causes of action pleaded by plaintiffs exist. Texas substantive law controls in this diversity action. Under Texas law, "[a] cause of action generally accrues, and the statute of limitations begins to run, when facts come into existence that authorize a claimant to seek a judicial remedy."Johnson Higgins of Tex. v. Kenneco Energy, Inc., 962 S.W.2d 507, 514 (Tex. 1998). Stating it another way, the Texas Supreme Court has explained that, as a rule, "a cause of action accrues when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred." S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). "[L]imitations begin[s] to run when the fact of injury is known, not when the alleged wrongdoers are identified."Russell v. Ingersoll-Rand Co., 841 S.W.2d 343, 344 n. 3 (Tex. 1992) (citation internal quotation marks omitted).
When these principles are applied to this case, absent exceptional circumstances, whatever causes of action plaintiffs might have against defendants accrued, and limitations started to run, in June 2005, more than four years prior to the filing of this suit in August 2009.
C. Theories of Avoidance of the Limitations Bar Upon Which Plaintiffs Rely
Texas law recognizes theories of avoidance of the operation of the general rule, as stated above, for determining whether there is a limitations bar. The Texas court decisions have put the theories of avoidance under two general categories, the "discovery rule" and the "fraudulent concealment" doctrine. S.V., 933 S.W.2d at 4-5. Texas law places the trial burden on a plaintiff to prove a theory of avoidance of limitations. See Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 830 (Tex. 1990); Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1988); Willis v. Maverick, 760 S.W.2d 642, 647 (Tex. 1988); Nichols v. Smith, 507 S.W.2d 518, 521 (Tex. 1974); Quigley v. Bennett, 256 S.W.3d 356, 362 (Tex. App. — San Antonio 2008, no pet.).
Texas courts have not been consistent in placement of the summary judgment burden. In the cases of Shah v. Moss, 67 S.W.3d 836, 841 (Tex. 2001), Earle v. Ratliff, 998 S.W.2d 882, 888 (Tex. 1999), Taub v. Houston Pipeline Co., 75 S.W.3d 606, 620 (Tex. App. — Texarkana 2002, pet. denied), and Thames v. Dennison, 821 S.W.2d 380, 384 (Tex. App. — Austin 1991, writ denied), the courts held that the plaintiff had the summary judgment burden. A contrary conclusion was reached in Pustejovsky v. Rapid-American Corp., 35 S.W.3d 643, 646 (Tex. 2000), Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex. 1998), Weaver v. Witt, 561 S.W.2d 792, 794 (Tex. 1977) (per curiam), and Kelley v. Rinkle, 532 S.W.2d 947, 949 (Tex. 1976). No matter what the Texas procedural rule might be, federal summary judgment procedure places the summary judgment burden on the parties having the trial court burden, that is, the plaintiffs. See Porter v. Charter Med. Corp., 957 F. Supp. 1427, 1436 (N.D. Tex. 1997); McLaren v. Imperial Cas. Indem. Co., 767 F. Supp. 1364, 1378 (N.D. Texas 1991).
1. The Summary Judgment Record Does Not Support Application of the Discovery Rule in this Case
"The discovery rule exception defers accrual of a cause of action until the plaintiff knew or, exercising reasonable diligence, should have known of the facts giving rise to the cause of action." Computer Assocs. Int'l v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1994). "The discovery rule is a limited exception to strict compliance with the statute of limitations."Id. at 457.
Generally, application of the discovery rule has been permitted in Texas only in those cases in which two elements exist: (1) the nature of the injury incurred is inherently undiscoverable and (2) the evidence of injury is objectively verifiable. Id. at 456. "Inherently undiscoverable encompasses the requirement that the existence of an injury is not ordinarily discoverable, even though due diligence has been used." Id. "Requiring objective verifiability assures that the policy underpinnings of statutes of limitations are met — balancing the possibility of stale or fraudulent claims against individual injustice." Id. at 457 "The determination of whether the discovery rule applies to a particular cause of action is a question law." TIG Ins. Co. v. Aon Re, Inc., 521 F.3d 351, 357 (5th Cir. 2008).
The element of inherent undiscoverability is to be decided on a categorical rather than a case-specific basis because the focus is on whether a type of injury rather than a particular injury is discoverable. See Quigley, 256 S.W.3d at 361-62. The court has concluded that this case does fit within an inherently undiscoverable category of cases. The fact that Mr. Simpkins authorized the injections was not inherently undiscoverable. The court is satisfied that, in normal circumstances, and in this case in particular, appropriate inquiry would have led a reasonable person to have knowledge during June or, at the latest, July 2005 that Mr. Simpkins had given permission to Dr. Foland to administer shots to the horse.
As to the "objectively verifiable" element of the discovery rule, which is another legal issue, the court notes that the fact that the horse was impaired following the treatment it received from Dr. Foland would appear to be objectively verifiable, but the court doubts that the objectively verifiable element exists in a broader vein in this case. At a basic level, the fact that the horse was injured by the June 10, 2005, injection probably was not objectively verifiable. Moreover, there undoubtedly would be extensive subjective debate over whether consultation with Dr. Snow before the injection was given would have led to a different outcome. And, while reasonable inquiry would have disclosed in June 2005 that Mr. Simpkins authorized the injection, ascertainment of that fact could involve subjective evaluations of memories, possible misunderstandings, and of course, intentional misrepresentations. The objective verifiability element was found not to exist as a matter of law for much the same reasons in S.V. v. R.V., 933 S.W.2d at 15-17 (noting that "the bar of limitations cannot be lowered for no other reason than a swearing match between parties over facts"). For this additional reason, the summary judgment record leads to the conclusion that the discovery rule does not extend the statutory limitations periods in this action.
2. The Summary Judgment Record Does Not Raise a Fraudulent Concealment Avoidance
The gist of plaintiffs' fraudulent concealment avoidance theory is as follows:
At no time during the next two years did Kelly or Darren Simpkins ever admit to the Welks that they had given Dr. Foland permission to inject Juan Bad Cat on June 10, 2005 and July 2, 2005. Thus, there is no way that the Plaintiffs would have know about any causes of action that they may have had against the Simpkins' at that time. On or about August 14, 2007, Plaintiffs counsel met and interviewed the Simpkins at their ranch in Weatherford. At that time they first admitted giving permission to Dr. Foland for the injections on June 10 and July 2, 2005 despite the special instructions given by Ms. Welk.
Second Am. Compl. at 7. The summary judgment evidence potentially pertinent to plaintiffs' reliance on this theory is as follows:
Ms. Welk said that she learned in early July 2005 that Dr. Foland had injected the horse and performed arthroscopic surgery on the horse. She said she promptly contacted Dr. Snow, from whom she learned that he had not been contacted by Dr. Foland and knew nothing of the treatment Dr. Foland had given the horse. Dr. Snow expressed disappointment that he had not been contacted before the horse was treated. She said that shortly after she talked to Dr. Snow she visited by telephone with Dr. Foland, who told her that he had injected the horse because Dr. Snow told him to do so. Ms. Welk said that she then called Ms. Simpkins to determine if Ms. Simpkins had told Dr. Foland to contact Dr. Snow before doing anything with the horse, and that Ms. Simpkins responded that she had told Dr. Foland not to do anything with the horse unless he cleared it first with Dr. Snow.
Thus, plaintiffs do not seriously take issue with instructions that were given to Dr. Foland when the horse was taken to him by Ms. Simpkins on June 10, 2005. Indeed, in their second amended complaint plaintiffs pleaded that on June 10, 2005, when Ms. Simpkins took the horse to Dr. Foland she "verbally informed Dr. Foland on that visit that nothing was to be done to the horse without first consulting with Dr. Van Snow in California." Second Am. Compl. at 5-6. When the Welks first sued the Simpkinses by adding them to their Parker County, Texas, suit against Dr. Foland on December 19, 2007, the Welks made the following allegations against the Simpkinses:
b. On or about June 10, 2005, Juan Bad Cat was brought to Defendants for an examination by Kelly Simpkins, the wife of horse's trainer. Ms. Simpkins verbally informed Dr. Foland on several occasions on that visit that nothing was to be done to the horse without first conferring with Dr. Van Snow in California. After being informed of this, Dr. Foland left the horse and went back to his office. When he came back to tend to the horse with a needle, Ms. Simpkins was under the impression that Dr. Snow had been contacted by Dr. Foland and Dr. Snow had agreed to the course of treatment next given by Dr. Foland. Darren Simpkins has testified that he gave permission to Dr. Foland to inject the horse. Darren Simpkins did not have the authority to give such permission and Defendant Foland disregarding the special instructions, failing to contact Dr. Snow regarding the horse before injecting it.
Mot., App. at 15-16.
The complaint plaintiffs have is that when Dr. Foland failed to reach Dr. Snow on June 10, 2005, he sought and obtained permission from Mr. Simpkins to make the injection. Id. at 6. While the contentions of plaintiffs are somewhat vague on the subject, apparently they have the same or a similar complaint as to the injection Dr. Foland gave on July 2, 2005. Id.
Plaintiffs undoubtedly consider an important ingredient of their fraudulent concealment theory the testimony the Welks gave when their oral depositions were taken in the instant action on February 10, 2010. Ms. Welk testified that in December 2005, Mr. Welk, in her presence, asked Mr. Simpkins if he gave permission for any of the procedures on the horse, and that Mr. Simpkins said: "No, I did not give permission for any of the procedures. I did not give permission for anything that was done to that horse." Resp., App. at 53. Mr. Welk, on February 10, 2010, supported his wife's testimony, saying during his deposition that he specifically asked Mr. Simpkins in December 2005 whether he authorized any of the injections or surgery or any other procedures that took place on the horse, and that Mr. Simpkins replied: "Absolutely not." Id. at 74.
To put the matter mildly, the testimony given by plaintiffs on February 10, 2010, is suspect. If the February 10, 2010, testimony were truthful, both of the Welks would have known in November 2007 that Mr. Simpkins maintained that he did not authorize Dr. Foland to inject the horse. Yet, when Ms. Welk gave deposition testimony on November 30, 2007, in her Parker County lawsuit against Dr. Foland, she said that she did not know whether Mr. Simpkins authorized Dr. Foland to inject the horse. Mot., App. at 52. Obviously, she would not have answered that way if she and her husband had been told by Mr. Simpkins in December 2005 that he did not authorize the injections. When Mr. Welk testified by deposition on November 30, 2007, in the lawsuit against Dr. Foland, his answers indicated that he did not have knowledge different from or in addition to the knowledge disclosed by his wife during her deposition. Id. at 59-61.
Interestingly, although plaintiffs were seeking to allege an avoidance of the statute of limitations in their second amended complaint in the instant action, no mention was made in that complaint of any denial by Mr. Simpkins at any time that he had authorized Dr. Foland to inject the horse. Rather, the plaintiffs place reliance in their second amended complaint on their contention that they first learned that Mr. Simpkins had given permission for Dr. Foland to make the injections when Mr. Simpkins admitted to plaintiffs' attorney on August 14, 2007, that he had done so. Second Am. Compl. at 7. Also of interest is the fact that when the Welks gave their deposition testimony in November 2007 against Dr. Foland, they made no mention of the admission they say Mr. Simpkins made to their attorney on August 14, 2007, that he had authorized the injections. The appearance is that each time the Welks gave depositions they tailored their testimony to match the goal they have in a particular lawsuit, giving testimony one way in their lawsuit against Dr. Foland and another in the instant action against the Simpkinses.
In evaluating whether the summary judgment evidence puts in issue the elements of a theory of avoidance of the running of limitations, the court has given plaintiffs the benefit of the evidence most favorable to their positions. However, the court is required to consider the entire summary judgment record when evaluating whether judgment should be rendered as a matter of law because the record taken as a whole would not lead a rational trier of fact to find for plaintiffs. Supra at 12. For that same reason, the court is giving consideration to the summary judgment evidence that on June 13, 2005, Mr. Simpkins placed multiple calls to Ms. Welk, and that when she returned his call they spoke for fourteen minutes. Mot., App. at 81. The reasonable inference to be drawn is that Mr. Simpkins informed Ms. Welk of the horse's June 10, 2005, treatment and would have responded to whatever inquiry Ms. Welk might have made.
In Timberlake v. A.H. Robins Co., 727 F.2d 1363 (1984), the Fifth Circuit described the Texas fraudulent concealment avoidance theory as follows:
Under Texas law, fraudulent concealment is an affirmative defense to an assertion that the statute of limitations has run. In Nichols v. Smith, 507 S.W.2d 518, 519 (Tex. 1974), the Texas Supreme Court stated the doctrine as follows:
When the defendant is under a duty to make a disclosure but fraudulently conceals the existence of a cause of action from the one to whom it belongs, the guilty party will be estopped from relying on the defense of limitations until the right of action is, or in the exercise of reasonable diligence should be, discovered.
A successful assertion of fraudulent concealment requires the plaintiff to prove that the defendant had actual knowledge of the facts allegedly concealed, and a fixed purpose to conceal the wrong. The mere failure to disclose a cause of action, or its mere concealment, does not constitute fraudulent concealment for purposes of tolling the statute of limitations. Rather, the plaintiff is under a duty to exercise reasonable diligence to discover his or her cause of action. . . . There cannot be fraudulent concealment of facts which admittedly were or should have been known by the plaintiff.Id. at 1366-67 (internal quotation marks, brackets citations other than Nichols v. Smith omitted). "[P]roof of fraudulent concealment . . . requires evidence that the defendant actually knew the plaintiff was in fact wronged, and concealed that fact to deceive the plaintiff." Earle v. Ratliff, 998 S.W.2d at 888.
As a Texas intermediate court explained:
The estoppel effect [of fraudulent concealment] ends, and the statute of limitations begins to run when a plaintiff has knowledge of facts, conditions or circumstances that would cause a reasonable person to make an inquiry, which, if pursued, would lead to discovery of the concealed cause of action, because such knowledge is the equivalent for limitations purposes of knowledge of the cause of action itself.Winn v. Martin Homebuilders, Inc., 153 S.W.3d 553, 558 (Tex. App. — Amarillo 2004, no pet.).
Mere silence by a defendant is not fraudulent concealment; rather, the defendant must engage in affirmative acts of concealment. See State of Texas v. Allan Constr. Co., 851 F.2d 1526, 1528-29 (5th Cir. 1988). "[G]enerally speaking, denial of wrongdoing is no more an act of concealment than is silence." Id. at 1532 (footnote omitted). However, courts have recognized that "a denial may constitute concealment where the parties are in a fiduciary relationship, or where the circumstances indicate that it was reasonable for the plaintiff to rely on defendant's denial." Id. at 1532-33 (footnote omitted). But, a plaintiff is not relieved of his duty of diligence even if there has been a concealment of wrongful conduct:
Even where a defendant has concealed wrongful conduct, the statute of limitations is tolled only until such time as the plaintiff, exercising reasonable diligence, could have discovered the facts forming the basis for the claim. Moreover, the plaintiff need not have actual knowledge of such facts; those who have learned of facts calculated to excite inquiry must inquire.Id. at 1533 (footnote, quotation marks brackets omitted).
The court has concluded that plaintiffs have not met their summary judgment burden on their fraudulent concealment avoidance theory. Plaintiffs had knowledge based on what Dr. Snow told them in July 2005 that Dr. Foland had not consulted Dr. Snow before injecting the horse. The court concludes as a matter of law that pointed inquiry made at that time would have disclosed that Mr. Simpkins authorized Dr. Foland to make the injections. Reasonable inquiry by plaintiffs would have provided them more than four years before this action was instituted sufficient information from which they could infer that one of the defendants had authorized Dr. Foland to make the injections. Common sense dictates that Dr. Foland would not have made the injections if he had not received permission to do so from someone who had responsibility relative to the horse. Plaintiffs knew in July 2005 that neither they nor Dr. Snow had authorized the injections. By process of elimination, one or both of the Simpkinses must have authorized them. No rational fact finder would find by a preponderance of the evidence contained in the summary judgment record that plaintiffs could not have learned more than four years before August 2009 that Mr. Simpkins had authorized Dr. Foland to make the injections if they had exercised reasonable diligence to ascertain the identity of the person who authorized Dr. Foland to do so.
Moreover, there is no summary judgment evidence that plaintiffs had any fixed purpose to conceal any wrong. Even if they concealed, by nondisclosure or otherwise, the consent given by Mr. Simpkins to Dr. Foland, the summary judgment record would not support a finding that such a concealment evidenced a fixed purpose to conceal a wrong.
3. The Summary Judgment Record Does Not Support Plaintiffs' Fraud, Fiduciary, and Agency Theories
The summary judgment record is devoid of any evidence that Mr. Simpkins engaged in fraudulent conduct when he authorized Dr. Foland to inject the horse. The most the summary judgment record would support in criticism of Mr. Simpkins is that perhaps he made a mistake or was negligent. Under Texas law, fraud prevents the running of the statute of limitations until the fraud is discovered or until, by use of reasonable diligence, it might have been discovered.See Ruebeck v. Hunt, 176 S.W.2d 738, 739 (Tex. 1944); Port Arthur Rice Milling Co. v. Beaumont Rice Mills, 143 S.W. 926, 929 (Tex. 1912). However, in each of those cases, the cause of action was the fraudulent conduct. There is no evidence that would give rise to a fraud cause of action against a defendant in this action.
If a fiduciary relationship had existed between plaintiffs and defendants there could be a tolling of the statute of limitations. Texas courts have applied fiduciary relationship tolling when the cause of action grows out of a professional relationship, such as a physician-patient relationship, Borderlon v. Peck, 661 S.W.2d 907, 909 (Tex. 1983), an attorney-client relationship, Willis v. Maverick, 760 S.W.2d at 643, or an accountant-client relationship, Murphy v. Campbell, 964 S.W.2d 265, 270-71 (Tex. 1997).
However, there is no summary judgment evidence of a fiduciary relationship existing between plaintiffs and defendants at any time pertinent to this action. There was a business relationship that ripened into a personal relationship as well. The business relationship alone would not create a fiduciary relationship, Crim Truck Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594-95 (Tex. 1992), nor would the personal relationship alone create a fiduciary relationship, Meyer v. Cathey, 167 S.W.3d 327, 331 (Tex. 2005) (per curiam). Combining the two does not make the relationship any more fiduciary. "[N]ot every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship." Meyer, 167 S.W.3d at 330 (internal quotation marks omitted). Texas courts do not create fiduciary relationships lightly.Id. at 331; see also Imperial Premium Fin., Inc. v. Khoury, 129 F.3d 347, 353-54 (5th Cir. 1997). The fact that one businessman trusts another, and relies on his promise to perform a contract, does not give rise to a fiduciary relationship. Crim Truck Tractor, 823 S.W.2d at 594. Nor is mere subjective trust alone enough to transform arms-length dealing into a fiduciary relationship. Id. at 595.
In a further attempt to establish a fiduciary relationship, plaintiffs argue that a principal-agency relationship existed between plaintiffs and defendants, and that when Mr. Simpkins gave Dr. Foland permission to inject the horse, he was acting as agent for plaintiffs. There is no record support for such a proposition. The summary judgment record makes clear that the business relationship between plaintiffs and defendants was a contractual relationship pursuant to which defendants exercised their independent judgments in the performance of their contract with the plaintiffs, subject only to general instructions. Such a relationship is not a principal-agency relationship. See First Nat'l Bank of Fort Worth v. Bullock, 584 S.W.2d 548, 551-52 (Tex. Civ. App. — Austin 1979, writ ref'd n.r.e.).
4. Conclusion
The court concludes that the summary judgment evidence establishes as a matter of law that whatever causes of action plaintiffs might have against defendants accrued in June 2005. Unless there is summary judgment evidence raising a theory of avoidance of the limitations bar, plaintiffs' claims are barred by limitations. The court concludes as a matter of law that the evidence in the summary judgment record would not support any theory of avoidance of the otherwise established limitations defense. No rational fact finder would find from a preponderance of the summary judgment evidence facts essential to an avoidance theory. Therefore, defendants' motion for summary judgment is being granted, and plaintiffs' claims against defendants are being dismissed.
IV. Order
For the reasons given above,The court ORDERS that all claims and causes of action asserted by plaintiffs against defendants be, and are hereby, dismissed.