Preview
Filed
13 October 17 P4:58
Gary Fitzsimmons
District Clerk
Dallas District
CAUSE NO. DC-09-17536
MICHAEL WIDO, et al., § IN THE DISTRICT COURT
§
Plaintiffs, §
§
Vs. § DALLAS COUNTY, TEXAS
§
RAY McDONIEL, et al. §
§
Defendants. § 44th JUDICIAL DISTRICT
DEFENDANTS LANDAMERICA COMMONWEALTH
AND FIDELITY’S MOTION FOR NEW TRIAL
TO THE HONORABLE JUDGE OF SAID COURT:
COME NOW LANDAMERICA COMMONWEALTH TITLE COMPANY and
FIDELITY DEFENDANTS, in the above-styled and numbered cause, and ask the court to grant a
new trial in the interest of justice and fairness.
A. Introduction and Background
1. Plaintiffs Michael Wido, Donald Warren, Carolyn Sue Warren, Sterling Trust
Company, Custodian FBO Donald Warren IRA, 56.5% or $62,503.13 and Sterling Trust
Company, Custodian FBO Carolyn Sue Warren IRA, 43.5% or $48,121.97 (hereinafter
collectively referred to as “Plaintiffs”), sued Defendants LANDAMERICA COMMONWEALTH
TITLE COMPANY and FIDELITY Defendants (hereinafter collectively referred to as
“LandAmerica”), for breach of fiduciary duty, common law fraud, civil conspiracy, and aiding and
abetting, arising from closing transactions on a property investment.
2. After a trial on the merits, the Court submitted this cause to the jury.
3. The jury returned a verdict for Plaintiffs.
4. The Court signed a judgment for Plaintiffs on September 17, 2013.
DEFENDANT’S MOTION FOR NEW TRIAL - Page 1
B. Sufficiency of the Evidence
5. The Court should grant a motion for new trial because the evidence is insufficient
to support the jury's answer to question number 1. Question 1 addresses agency and apparent
authority. Plaintiffs in this matter sued LandAmerica and the Fidelity entities that later acquired
LandAmerica, not Lowry Davison or Katherine Metcalfe. However, Plaintiffs’ case against
LandAmerica was based entirely on the actions of Lowry Davison, a contracted fee attorney, and
his employed notary, Katherine Metcalfe. Therefore, to prevail on the causes of action against
LandAmerica, Plaintiff was required to prove that LandAmerica authorized the actions of Lowry
Davison and Katherine Metcalfe that were specifically complained of by Plaintiffs.
5.1 Plaintiffs’ evidence failed to show that LandAmerica authorized the complained of
conduct by Lowry Davison and Katherine Metcalfe. Plaintiffs’ evidence failed to show that
Davison and Metcalfe acted with the authority or apparent authority of LandAmerica.
Specifically, Plaintiffs failed to prove that Davison and Metcalfe were acting with the authority of
LandAmerica at the time of the alleged forgery, during any actions taken after closing (including
actions taken at the April mediation), and at that time of the alleged failure to disclose.
6. The Court should grant a motion for new trial because the evidence is insufficient
to support the jury's answers to questions numbered 2, 3, 4, 5 and 6. These questions address
Plaintiffs’ claim for breach of fiduciary duty.
6.1 Defendant LandAmerica asserts that the evidence does not support the jury’s
answers finding that LandAmerica received a benefit from the April mediation agreement (#2);
that LandAmerica failed to comply with or breached their fiduciary duty to Plaintiffs Wido and
Warren (#3 and 5); and that Plaintiffs did not ratify the complained of conduct (#4 and 6).
6.2 To prevail on their cause for breach of fiduciary duty Plaintiffs were required to
DEFENDANT’S MOTION FOR NEW TRIAL - Page 2
show: (1) that Plaintiffs and Defendant had a fiduciary relationship; (2) that Defendant breached
its fiduciary duty to the Plaintiffs; and (3) that Defendant’s breach resulted in (a) injury to the
Plaintiffs, or (b) a benefit to the Defendant. It was not disputed that LandAmerica did have a
fiduciary duty to Plaintiffs when conducting the escrow transactions. Plaintiffs had the burden to
prove LandAmerica or its authorized agents breached that fiduciary duty. Plaintiffs failed to
prove that LandAmerica breached its fiduciary duty to either Plaintiff, and failed to prove that if a
breach did occur, that it caused injury to Plaintiffs or a benefit to Defendant. On the contrary, the
cumulative evidence showed that the escrow funds were properly distributed to Plaintiffs’
attorney-in-fact, Ray McDoniel the President of Encore Mortgage, pursuant to the escrow
instructions. Furthermore, McDoniel testified that he never gave Rayford Construction money
for work they did not perform. This testimony was uncontroverted.
6.3 Plaintiffs asserted that an alleged forgery and actions taken by Lowry Davison after
the closings somehow constituted a breach of the fiduciary duty and caused damages, but the
argument is not supported by the evidence. It is important to note that Plaintiffs alleged a forged
signature on the Wido transaction only, not the Warren transaction. There was no evidence, or
even allegation, of a forged signature on the Warren transaction. Further, Plaintiffs only
complained of injury occurred after the closings had been completed, when Plaintiffs decided to
enter into a subsequent agreement with Defendants Encore, Durden and Rayford instead of
foreclosing on the properties.
6.4 Additionally, the alleged forgery was not on the escrow agreement and did not
cause any damages to Plaintiffs. The escrow agreement was enforceable by its express terms
even if the document that contained the alleged forgeries was found to be unenforceable. Simply
put, even if the documents in question contained actual forgeries, there was no loss because of the
DEFENDANT’S MOTION FOR NEW TRIAL - Page 3
validity and enforceability of the escrow agreement. Moreover, after the April mediation,
McDoniel turned the money over to Defendant Durden per the mediation agreement. Therefore,
by the time the money was turned over to Durden, which is where any loss occurred, the alleged
forgery was not an issue because the agreement containing the alleged forgery was superseded by
the mediation agreement.
6.5 The evidence presented by Plaintiffs was insufficient for the jury to find the
LandAmerica breached its fiduciary duty to Plaintiff Wido or Warren, and that such breach caused
any injury to them.
7. The Court should grant a motion for new trial because the evidence is insufficient
to support the jury's answer to questions numbered 10 and 11.
7.1 There is no evidence that LandAmerica committed fraud by failing to disclose to
Plaintiffs the alleged forgery. To the contrary, the evidence showed that Lowry Davison, not
LandAmerica, was made aware of the alleged forgery by Plaintiffs’ acting attorney-in-fact
Defendant Ray McDoniel. There is no duty to tell a principal what has already been
communicated to their agent.
7.2 Plaintiffs’ fraud case against LandAmerica is based on failure to disclose to
Plaintiffs an alleged forgery on the Wido transaction. To prevail on their cause of action for fraud
for failure to disclose, Plaintiffs were required to prove that LandAmerica: (1) had a duty to
disclose the information; (2) concealed or failed to disclose a material fact within its knowledge;
(3) knew that Plaintiffs were ignorant of the material fact and did not have an equal opportunity
to discover the truth; (4) intended to induce Plaintiff to take some action by concealing or failing to
disclose the material fact; and (5) Plaintiff suffered injury as a result of the undisclosed fact. See
Bradford v. Vento 48 S.W.3d 749, 754, 755 (Tex 2001.)
DEFENDANT’S MOTION FOR NEW TRIAL - Page 4
7.3 Plaintiffs’ evidence fails to meet several of the elements of fraud. Plaintiffs did
not produce any evidence that LandAmerica concealed or failed to disclose a material fact.
Defendant incorporates its argument contained in Paragraph’s 6 - 6.5 above. Plaintiffs did not
prove that LandAmerica knew Plaintiffs were ignorant of a material fact. Plaintiffs did not prove
that LandAmerica intended to induce Plaintiff to take some action by concealing or failing to
disclosure the material fact. The evidence presented showed that both Plaintiff Wido and
Plaintiffs Warren had given Defendant Ray McDoniel power-of-attorney and that Mr. McDoniel
was the person to inform Lowry Davison of the alleged forgery. The Plaintiffs’ attorney-in-fact,
McDoniel, who had represented them at all times during the closings and afterwards, had
knowledge of the alleged forgery. Therefore, Plaintiffs legally had knowledge of the alleged
forgery. LandAmerica could not conceal or fail to disclose a material fact that Plaintiffs already
knew or should have known through their attorney-in-fact.
7.4 Plaintiffs failed to prove that they suffered injury as a result of an undisclosed fact
by LandAmerica. The evidence showed that after Plaintiffs’ money was correctly transferred to
Mr. McDoniel to disburse to Rayford Construction, LandAmerica had no control over the funds.
The entire amount of money was controlled by Defendant Encore and later Defendant Durden.
The evidence showed that Plaintiffs’ damages were caused by Durden distributing money to
Rayford Construction for work that was not done. Plaintiffs’ damages were further caused by
their failure to foreclose on the subject property which they were free to do at any time.
7.5 Finally, Plaintiffs did not offer any direct evidence of fraud. All of Plaintiffs’
evidence of fraud is based on inference and suspicion. The Texas Supreme Court stated that
“some suspicion linked to other suspicion produces only more suspicion, which is not the same as
some evidence. We have also said that an inference stacked only on other inferences is not legally
DEFENDANT’S MOTION FOR NEW TRIAL - Page 5
sufficient evidence.” Marathon v. Pitzner, 106 S.W.3d 724, 728 (Tex. 2003). Clearly, the
evidence presented at trial does not support the jury finding of fraud against LandAmerica.
8. The Court should grant a motion for new trial because the evidence is insufficient
to support the jury's answer to questions numbered 14. The evidence does not support the jury
finding that LandAmerica was part of a civil conspiracy.
8.1 To prevail on their action for civil conspiracy, Plaintiffs were required to prove that
Defendant LandAmerica was a member of a combination of two or more persons who intended a
common objective to accomplish an unlawful purpose, or a lawful purpose by unlawful means,
and that Plaintiffs suffered injury as a result of the wrongful act.
8.2 Plaintiffs failed to prove that LandAmerica was a member of a civil conspiracy.
Defendant incorporates its argument contained in Paragraph’s 5 - 5.1 above. Plaintiffs asserted
that LandAmerica acted in concert with Defendant Encore during the April mediation. The only
evidence presented involved actions of Lowry Davison. Mr. Davison testified that after the
closings were complete he was acting under Lowry Davison, LLC, not as an agent of
LandAmerica. There was no evidence presented that LandAmerica was part of a civil conspiracy
with Defendant Encore.
9. The Court should grant a motion for new trial because the evidence is insufficient
to support the jury's answer to questions numbered 15. Question 15 addresses Plaintiffs’
allegation of aiding and abetting. Plaintiffs presented absolutely no evidence that Defendant
LandAmerica knowingly participated in Encore’s Mortgage’s breach of its fidicuary duty to
Plaintiffs. Defendant incorporates its argument contained in Paragraph 8 0- 8.2 above.
C. Attorney’s Fees
10. The Court erred by awarding attorney fees because the suit against LandAmerica
DEFENDANT’S MOTION FOR NEW TRIAL - Page 6
involves breach of fiduciary duty, common law fraud, civil conspiracy, and aiding and abetting,
and no rule, statute, or case permits the award of attorney fees in this type of case. See Holland v.
Wal-Mart Stores, Inc., 1 S.W.3d 91, 95 (Tex. 1999). Attorney's fees are not available for a breach
of fiduciary duty claim. See Oldner v. Medlock, 05-10-00848-CV, 2012 WL 114192 (Tex.
App.—Dallas Jan. 12, 2012, no pet.) citing Musquiz v. Marroquin, 124 S.W.3d 906, 913
(Tex.App.-Corpus Christi 2004, pet. denied); S. Concrete Co. v. Metrotec Fin. Inc., 775 S.W.2d
446, 450–51 (Tex.App.-Dallas, 1989 no writ). Attorney’s fees are not recoverable for common
law fraud. See MBM Fin. Corp. v. Woodlands Oper. Co., 292 S.W.3d 660, 667 (Tex. 2009).
Finally, civil conspiracy and aiding and abetting require a finding of an underlying tort, if the
underlying tort does not entitle Plaintiffs to fees neither does the conspiracy to commit the tort.
10.1 Plaintiffs’ Third Amended Petition seeks attorneys’ fees because their claim
“involves an oral and/or written contract.” Plaintiffs did not present evidence or seek a jury
finding on breach of contract. There is no basis for an award attorney’s fees for Plaintiffs in this
matter.
10.2 A party is entitled to attorney fees only if it prevails on a cause of action for which
attorney fees are recoverable. State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 437 (Tex.
1995); London v. London, 94 S.W.3d 139, 149 n.5 (Tex. App.—Houston [14th Dist.] 2002, no
pet.); Rodgers v. RAB Invs., Ltd., 816 S.W.2d 543, 551 (Tex. App.—Dallas 1991, no writ).
Plaintiffs did not prevail on a claim for which attorney fees were recoverable.
D. Conclusion
11. Based on the reasons and authorities stated above, the Court should grant
Defendant’s motion for new trial.
DEFENDANT’S MOTION FOR NEW TRIAL - Page 7
E. Prayer
12. For these reasons, and in the interest of justice and fairness, Defendant asks the
court to grant a new trial.
Respectfully submitted,
/s/ Elizabeth R. Flora
_____________________________
Elizabeth R. Flora
State Bar No. 24036572
FIDELITY NATIONAL LAW GROUP
5151 Beltline Road, Ste. 410
Dallas, Texas 75254
972-812-6541
972-812-9408 (facsimile)
ATTORNEY FOR DEFENDANTS
LANDAMERICA COMMONWEALTH
TITLE and FIDELITY
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument has been sent to all
known counsel of record pursuant to the Texas Rules of Civil Procedure on this 17th day of
October, 2013 as follows:
John P. Walsh
The Law Office of Jack Walsh
5430 LBJ Freeway, Suite 1200
Dallas, TX 75240
Tel: 972-663-9397
Fax: 214-299-8668
ATTORNEY FOR PLAINTIFFS
Caleb I. Moore, Esq.
Law Firm of Caleb Moore, PLLC
2205 Martin Drive, Ste 200
Bedford, TX 76021
Telephone: (817) 953-2420
Facsimile: (817) 581-2540
ATTORNEY FOR RAY MCDONIEL and
ENCORE MORTGAGE CORP.
DEFENDANT’S MOTION FOR NEW TRIAL - Page 8
/s/ Elizabeth R. Flora
__________________________________
Elizabeth R. Flora
DEFENDANT’S MOTION FOR NEW TRIAL - Page 9