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C.H. Canada Appellant v. W.R. Canada

April 25, 2013



The opinion of the court was delivered by: Sue Walker Justice



In 2011, Appellant C.H. Canada (Carol) filed a bill of review challenging an agreed divorce decree that was signed on May 18, 2000. The trial court granted a combined traditional and no-evidence motion for summary judgment filed by W.R. Canada, Jr. (Ralph). Carol perfected an appeal, raising eleven issues challenging the summary judgment. We will affirm.

The trial court also found that Carol's claims had been brought in bad faith and in violation of Texas Rule of Civil Procedure 13 and signed an order sanctioning Carol but declined to impose sanctions on Carol's attorney, Mark Lieberman. Ralph perfected an appeal, raising one issue challenging the trial court's refusal to sanction Lieberman. We will affirm.


Carol and Ralph married on December 31, 1993. Ralph asked Carol for a divorce in November 1999, and Carol and Ralph executed an agreed decree of divorce on May 18, 2000. The decree awarded Ralph [a]ll sums of money and other assets held for the benefit of W.R. CANADA, JR., whether matured or unmatured, accrued or unaccrued, vested or otherwise, together with all increases thereof, the proceeds therefrom, and any other rights related to any profit-sharing plan, retirement plan, Keogh plan, pension plan, employee stock option plan, 401(k) plan, employee savings plan, accrued unpaid bonuses, salaries or commissions, disability plans, retirement plans, deferred compensation plans or other benefits existing by reason of W.R. CANADA, JR.'s past, present, or future employment. According to Carol, ten and a half years later, in December 2010, she ran an internet search and discovered litigation between Ralph and his former employer, The Heritage Organization, revealing that Ralph allegedly "had earned substantial income and had acquired substantial assets deferred income [sic] that he had never disclosed to her during their marriage or prior to the entry of the divorce decree." Carol concluded that Ralph allegedly had misstated their marital assets during the divorce by not revealing deferred compensation that he was entitled to receive. Carol claims that if she had known about this information, she would not have entered into the consent divorce agreement.

Carol sued Ralph in 2011, pleading various causes of action; she contended that the statute of limitations applicable to her pleaded claims did not accrue until December 2010 when she discovered them and that Ralph had fraudulently concealed the compensation owed him from Heritage, tolling the statute of limitations.

Ralph filed a general denial and alleged numerous affirmative defenses, including limitations. He also moved for sanctions jointly and severally against Carol and Lieberman. Eventually, Ralph filed a combined traditional and no-evidence motion for summary judgment, asserting the affirmative defense of limitations as one of his grounds for summary judgment.

The trial court granted Ralph's traditional and no-evidence motion for summary judgment. The trial court later granted Ralph's motion for sanctions against Carol and simultaneously denied Ralph's motion for sanctions against Lieberman. These appeals followed.


In her second issue, Carol argues that Ralph failed to meet his summary judgment burden to conclusively establish every element of the affirmative defense of limitations as to each of her claims. Carol argues that she pleaded the discovery rule and fraudulent concealment and that Ralph did not negate these theories.

A. Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable to the non-movant, crediting evidence favorable to the non-movant if reasonable jurors could and disregarding evidence contrary to the non-movant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the non-movant's favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). On appeal, we will affirm the summary judgment if any ground raised by the prevailing party in its summary judgment motion has merit. Bradley v. State ex. rel. White, 990 S.W.2d 245, 247 (Tex. 1999).

A defendant is entitled to summary judgment on an affirmative defense if the defendant conclusively proves all the elements of the affirmative defense. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508--09 (Tex. 2010), cert. denied, 131 S. Ct. 1017 (2011); see Tex. R. Civ. P. 166a(b), (c). To accomplish this, the defendant-movant must present summary judgment evidence that conclusively establishes each element of the affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008). To conclusively establish the affirmative defense of limitations, a defendant must (1) conclusively prove that the cause of action accrued before the commencement of the statute of limitations period, and (2) negate the discovery rule, if it applies and has been pleaded or otherwise raised, by proving as a matter of law that there is no genuine issue of material fact about when the plaintiff discovered, or in the exercise of reasonable diligence should have discovered, the nature of her injury. KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). If the defendant establishes that the statute of limitations bars the action, the plaintiff must then adduce summary judgment proof raising a fact issue in avoidance of the statute of limitations. See id.

B. The Discovery Rule and Fraudulent Concealment

Two doctrines may apply to extend the statute of limitations: the discovery rule, which delays accrual of the cause of action, and fraudulent concealment, which tolls the statute of limitations after a cause of action has accrued. Shell Oil Co. v. Ross, 356 S.W.3d 924, 927 (Tex. 2011); BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 65--67 (Tex. 2011).

The discovery rule is applied categorically to instances in which "the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable." Marshall, 342 S.W.3d at 65 (citing Computer Assoc. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455--56 (Tex. 1996)). An injury is not inherently undiscoverable when it is the type of injury that could be discovered through the exercise of reasonable diligence-especially diligence in searching public records. See id. at 66 (explaining that injury was not inherently undiscoverable when information concerning a lessee's failure to continue good-faith effort to develop an oil and gas lease was obtainable from public records); Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734--35 (Tex. 2001) (explaining that injury was not inherently undiscoverable when information concerning royalty owner's claims for underpayment was obtainable from lessee, general partner, and gas purchasers). Recognizing the social benefit in granting repose after a reasonable time, the Texas Supreme Court has described the discovery rule as a "‗very limited exception to statutes of limitations.'" Wagner & Brown, 58 S.W.3d at 734 (quoting Altai, 918 S.W.2d at 455--56).

Fraudulent concealment is an equitable doctrine that may operate to toll the statute of limitations after a cause of action accrues. Marshall, 342 S.W.3d at 65. Fraudulent concealment tolls limitations "because a person cannot be permitted to avoid liability for his actions by deceitfully concealing wrongdoing until limitations has run." Shell Oil Co., 356 S.W.3d at 927 (quoting S.V. v. R.V., 933 S.W.2d 1, 6 (Tex. 1996)). But fraudulent concealment will toll the running of limitations only until the fraud is discovered or could have been discovered with reasonable diligence. Marshall, 342 S.W.3d at 67.

C. Ralph Conclusively Established the Affirmative Defense of Limitations and Conclusively Negated the Discovery Rule and Fraudulent Concealment

Here, Ralph set forth the applicable statutes of limitations (which is four years) for each of the three claims that Carol asserted in her second amended petition-bill of review, fraudulent inducement to enter into a consent divorce property division by intentional omissions, and breach of fiduciary duty. See Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(4)--(5) (West 2002); Caldwell v. Barnes, 975 S.W.2d 535, 538 (Tex. 1998) (stating that the residual four-year statute of limitations applies to bills of review and citing Texas Civil Practice and Remedies Code section 16.051); see also Dodson Int'l v. Atl. Aviation Corp., No. 01-07-00654-CV, 2008 WL 962829, at *4 (Tex. App.-Houston [1st Dist.] Apr. 10, 2008, no pet.) (mem. op.) (stating that statute of limitations for fraudulent inducement claim is four years). Ralph attached to his motion for summary judgment excerpts from Carol's deposition in which she testified that she knew of Ralph's claims against Heritage in 2002:

Q. When did you first know about that arbitration claim?

A. Gosh, I heard about when -- well, it must have been 2002, maybe like March, and I'm just guessing on that. I know Ralph was -- he called me and said he might be a little late on payments to me --

Q. Did you ever make any effort to go find a copy of the arbitration claim?

A. No.

Q. All of the things that he [Ralph] claimed in his arbitration claim were related to his employment with Heritage. Is that correct, Ms. Canada?

A. Yes, according to what I've recently seen has to do with the oral -- or the employment contract.

Q. So, as of August of '02, you were aware that --

A. Uh-huh.

Q. -- Mr. Canada and Mr. Kornman were in a dispute with each other?

Q. So, in August of '02, what did you do to determine whether or not you had any interest as a result of your marriage to Mr. ...

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