January 23, 2019
Petition for Review from the Court of Appeals for the
Fourteenth District of Texas
Justice Devine delivered the opinion of the court. Justice
Busby did not participate in the decision.
P. Devine, Justice.
summary-judgment appeal we must determine what statute of
limitations applies to a claim of civil conspiracy. Following
its own precedent, the court of appeals applied the two-year
statute generally applicable to torts, including trespass,
and affirmed the trial court's summary judgment
concluding that the civil conspiracy claims were indeed
barred by limitations. 565 S.W.3d 12, 18 (Tex. App.-Houston
[14th Dist.] 2016) (mem. op.) (citing Tex. Civ. Prac. &
Rem. Code § 16.003 and cases applying it to civil
conspiracy). We do not agree that section 16.003 universally
applies to such claims.
civil conspiracy is a derivative tort that "depends on
participation in some underlying tort," we conclude that
the applicable statute of limitations must coincide with that
of the "underlying tort for which the plaintiff seeks to
hold at least one of the named defendants liable."
See Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.
1996) (describing the nature of a civil conspiracy claim).
And because at least one of the underlying torts asserted as
the basis for the conspiracy claims here may not be barred by
its applicable statute of limitations, we reverse the court
of appeals' judgment in part and affirm it in part.
Corporation designs, manufactures, and sells measuring
devices for use in the oil and gas industry. Agar sued more
than a dozen individuals and entities, including Sanjay Shah
and Pandurang Nayak, who they alleged sold Agar's
technology in the scheme to produce the knock-off products.
Electro Circuits and its owner Suresh Parikh (collectively
"Electro") were subsequently implicated in the
scheme and added to Agar's lawsuit in November 2011.
Electro once manufactured circuit boards for Agar, and its
alleged role in the conspiracy was that it used Agar's
proprietary information to manufacture circuit boards for the
seventh amended petition filed on February 10, 2012, Agar
asserted claims against Electro for tortious interference,
breach of fiduciary duty, aiding and abetting breach of
fiduciary duty, fraud, fraud by non-disclosure,
misappropriation of trade secrets, violations of the Texas
Theft Liability Act, conversion, and civil conspiracy and
asserted similar claims against the other defendants. Electro
answered and, as pertinent here, filed a counterclaim against
Agar seeking attorney's fees under the Texas Theft
later filed a traditional motion for summary judgment based
on the statute of limitations and a no-evidence motion that
attacked the elements of Agar's various claims.
See Tex. R. Civ. P. 166a(c), (i). The trial court
(1) denied the no-evidence motion for summary judgment as to
Agar's claims for civil conspiracy; (2) granted the
no-evidence motion in favor of Electro "as to all other
claims [by Agar] alleging direct liability;" and (3)
granted "a traditional summary judgment on
Plaintiff's claims against Defendants Electro Circuits
International, LLC and Suresh Parikh only on the limited
basis as to [their] . . . affirmative defense of statute of
limitations." Following the severance of Agar's and
Electro's adverse claims from the others in the case,
Electro filed another motion for summary judgment in the
severed case on the issue of attorney's fees under the
Texas Theft Liability Act. The trial court granted that
motion, awarded Electro its attorney's fees, and together
with the previous summary judgment in Electro's favor
disposed of all issues in the severed case.
appealed, complaining about that part of the summary judgment
that barred its civil conspiracy claims because of
limitations and the subsequent summary judgment that awarded
Electro attorney's fees. Agar argued that the trial court
should not have applied a two-year statute of limitations to
its conspiracy claims and thereby erred in concluding that
such claims were barred by limitations. Agar also contended
that the Texas Theft Liability Act did not provide for the
award of fees to Electro, the defendant. The court of appeals
rejected Agar's arguments and affirmed the summary
judgments for Electro. 565 S.W.3d at 26. In a concurrence to
the denial of rehearing en banc, Chief Justice Frost
explained that the courts of appeals have uniformly applied
section 16.003's two-year statute of limitations to civil
conspiracy claims, even though the logic for that rule might
reasonably be questioned. 529 S.W.3d 559, 563-64 (Tex.
App.-Houston [14th Dist.] 2017) (Frost, C.J., concurring in
order denying rehearing en banc). Having never passed on the
question, we granted Agar's petition to consider the
relevant statute of limitations for a claim of civil
Statute of Limitations
statute of limitations is an affirmative defense that serves
to "establish a point of repose and to terminate stale
claims." Murray v. San Jacinto Agency, Inc.,
800 S.W.2d 826, 828 (Tex. 1990). Statutes of limitations vary
from claim to claim as determined by the Legislature. See
generally Tex. Civ. Prac. & Rem. Code §§
16.002-.051. For example, a two-year limitations period
applies to suits for trespass and conversion, whereas a
four-year limitations period applies to suits for fraud or
breach of fiduciary duty. Id. §§
16.003(a), .004(a)(4), (5). For claims not expressly
identified by the Legislature, a residual limitations period
of four years is provided. Id. § 16.051.
the statutes of limitations mention civil conspiracy by name.
Rather than apply the residual limitations period, the courts
of appeals that have considered the issue have held civil
conspiracy falls under the two-year statute of limitations
applied to suits for trespass in section 16.003 of the Civil
Practices and Remedies Code. Agar contends that these cases
are wrong and that they misunderstand the nature of a civil
civil conspiracy, the plaintiff seeks to hold the defendant
liable for an injury caused by a third party who has acted in
combination with the defendant for a common purpose. Chu
v. Hong, 249 S.W.3d 441, 444-45 (Tex. 2008); Carroll
v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex.
1979). Agar therefore submits that the applicable statute of
limitations for a civil conspiracy claim should be that of
the underlying tort because that limitations period more
accurately reflects civil conspiracy's status as a
vicarious liability theory that hinges on an underlying tort.
responds that civil conspiracy is not a vicarious liability
theory but rather an independent cause of action in the
nature of a trespass to which section 16.003's two-year
statute of limitations applies. Electro accordingly concludes
that the courts of appeals have correctly applied this
limitations period to past civil conspiracy claims and that
this uniform line of decisions should not be disturbed. The
parties thus disagree about whether civil conspiracy is an
independent tort or merely a theory of vicarious tort
liability derivative of an underlying wrong.
Civil Conspiracy in Texas as a Vicarious Liability
jurisdictions, civil conspiracy is a vicarious liability
theory that imparts joint-and-several liability to a
co-conspirator who may not be liable for the underlying tort.
See, e.g., Mackey v. Compass Mktg., Inc.,
892 A.2d 479, 485 (Md. 2006); Upah v. Ancona Bros.
Co., 521 N.W.2d 895, 901 (Neb. 1994), disapproved on
other grounds, Welsch v. Graves, 582 N.W.2d
312, 316 (Neb. 1998); Granewich v. Harding, 985 P.2d
788, 792 (Or. 1999); Dunn v. Rockwell, 689 S.E.2d
255, 269 ( W.Va. 2009). Liability depends on injury from the
underlying tort, not the conspiracy itself. Mackey,
892 A.2d at 485. By contrast, a minority of states treat
civil conspiracy as an independent claim where defendants may
be held liable for damages caused by the conspiracy itself,
even in the absence of an unlawful act. See, e.g.,
Allegro, Inc. v. Scully, 791 S.E.2d 140, 144 (S.C.
2016). Our case law on civil conspiracy leaves Texas's
position on the debate arguably unclear. Although we have not
expressly said whether a civil conspiracy claim is in the
nature of a vicarious liability theory or an independent
tort, we have at various times used language implying that it
was one or the other.
said a proven civil conspiracy means "each of [the]
defendants in error is responsible for all acts done by any
of the conspirators in furtherance of the unlawful
combination." State v. Standard Oil Co., 107
S.W.2d 550, 559 (Tex. 1937). This is a statement of vicarious
liability. See Carroll, 592 S.W.2d at 925-26 (citing
Standard Oil while describing civil conspiracy as a
theory of vicarious liability). We have repeatedly called civil
conspiracy a "derivative tort," meaning it depends
on some underlying tort or other illegal act. Chu,
249 S.W.3d at 444; Tilton, 925 S.W.2d at 681. Our
use of the word "derivative" in this context means
a civil conspiracy claim is connected to the underlying tort
and survives or fails alongside it. NME Hosps., Inc. v.
Rennels, 994 S.W.2d 142, 148 (Tex. 1999). This is
because "[i]t is not the agreement itself, but an injury
to the plaintiff resulting from [another] act done pursuant
to the common purpose that gives rise to the cause of
action." Carroll, 592 S.W.2d at 925. Civil
conspiracy depends entirely on the injury caused by the
underlying tort; the injury is the damage from the underlying
wrong, not the ...