AFFIRM and Opinion Filed March 12, 2013.
In The Qtiiirt ni Aprat 3fiItIi tlitrict of Lrxa at aLI&ui No. 05-1 1-01 123-CV
BANK OF TEXAS, N.A., Appellant
V.
WILLIAM RAV KIND, Appellee
On Appeal from the 193rd judicial District Court Dallas County, Texas Trial Court Cause No. 11-6647
MEMORANDUM OPINION Before Justices Lang-Miers, Myers, and Richter’ Opinion by Justice Lang-Miers Appellant Bank of Texas. N.A. appeals the trial court’s order granting Appellee William
Ravkind’s motion for summary judgment. We issue this memorandum opinion pursuant to Texas
Rule of Appellate Procedure 47.4 because the law to be applied in the case is well settled. We
affirm the trial court’s judgment.
BACKGROUND
Bank of Texas sued Ravkind for negligent misrepresentation. It alleged that Ravkind
completed a form entitled “Verification of Deposit” stating that he was the depository of two
The Honorable Martin E. Richter, Retired Justice, Court of Appeals, Fifth District of Texas at Dallas, sitting by assignment. trust accounts belonging to his client Cindy Lantrip that contained assets totaling $1 .2 million:
that Ravkind was not the depository of the accounts: that the inlorination on the Verification of
Deposit was false; that it relied on the Verification of Deposit in deciding to lend Lantrip almost
$2 million for improvements to property located on Colgate in University Park, Texas; that
Lantrip defaulted on the loan: that the Rank sold the property at foreclosure for $640,000; and
that Ravkind’s negligent misrepresentation proximately caused the Bank’s injuries.
Ravkind tiled a combined no—evidence and traditional inot ion lor summary judgment.
The trial court granted Ravkind’s motion “on each ground allegedl.I” The Bank raises seven
issues on appeal challenging the court’s order, In its first issue on appeal, the Bank argues that
the trial court erred by granting Ravkind’s no-evidence motion for summary judgment on the
issue of justifiable reliance.
Standard of Review
When a party files both a no-evidence and a traditional motion for summary judgment,
we consider the no-evidence motion first. ford Motor Co. i’. Ridgwav. 135 S.W .3d 598, 6(X)
(Tex. 2004). The no-evidence motion must specifically state the elements for which there is no
evidence. TEx. R. Civ. P. 166a(i). The burden then shifts to the nonmovant to produce more than
a scintilla of summary judgment evidence that raises a genuine issue of material fact as to each
essential element identified in the motion. Id. & cmt (1997); Sw. Elec. Power Co. v. Grant. 73
S.W.3d 211, 215 (Tex. 2002). More than a scintilla of evidence exists if the evidence would
allow reasonable and fair-minded people to reach the verdict under review. See City of Keller v.
Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d
167, 172 (Tex. 2003). Less than a scintilla of evidence exists when the evidence is so weak that it
2 Ravkind claimed that his signature on the Verification of Deposit was forged. does no more than create a mere surmise or suspicion of a fact. h)rbes, 124 S.W3d at 172. We
must credit favorable evidence if reasonable jurors could and disregard contrary evidence unless
reasonable jurors could not. City of Keller, 168 S.W.3d at 827. To determine whether the
nonmovant met its burden, we review the summary judgment evidence in the light most
lavorable to the nonmovant and disregard all contrary evidence and inferences. Sudan v. Sudan,
199 S,W.3d 291, 292 (Tex. 2006) (per ctlriam) (quoting City of Keller, 168 S.W.3d at 823).
Applicable Law
The Supreme Court of Texas adopted section 552 of the Restatement (Second) of Torts as
the law of Texas with regard to a professional’s liability to a nonclient for negligent
misrepresentation. McCamish. Martin. Brown & Loeffler v. FE. Appling Interesis, 991 S.W.2d
787, 794 (Tex, 1999). To prove negligent misrepresentation, a plaintiff must show that the
defendant, in the course of his business or a transaction in which he had an interest, supplied
false information for the guidance of others without exercising reasonable care or competence in
communicating the information, that the plaintiff justifiably relied on the information, and that
the misrepresentation proximately caused the plaintiff’s injury. Kastner v. Jenkens & Gikhrist,
P.C., 231 S.W.3d 571, 577 (Tex. App.—Dallas 2007, no pet.). Liability is premised on the
professional’s “independent duty to the nonclient based on the professional’s manifest awareness
of the nonclient’s reliance on the misrepresentation and the professional’s intention that the
nonclient so rely.” McCa,nish, 991 S.W.2d at 792.
Discussion
Initially we must determine the scope of our review. Ravkind’s combined motion for
summary judgment contained a heading, “No Evidence — Justifiable Reliance.” Under that
heading, Ravkind argued that there was no evidence he made a representation to the Bank, no
3 evidence the Bank was within the limited group oh recipients to whom he would have liability,
no evidence he made any representation concerning the Colgate properly loan, and no evidence
the Bank justifiably relied on any alleged misrepresentation. The Bank acknowledges in its brief
on appeal that the argument in the noevidence part of Ravkind’s motion was not limited to the
justifiablerel i ance element of a ci aim for negligent misrepresentation: “the actual argument
presented within the text of the motion appears to he (1) there is no evidence of a representation
by Ravkind: and (2) Bank of Texas was not within the class of recipients for which the law
imposes liabilities• therefore there could not have been reasonable and/or justifiable reliance.”
But the Bank contends that Ravkind challenged only the element of justifiable reliance and, as a
result, this Court is limited to an analysis of that element.
We construe the Bank to argue that because the motion’s heading contained only the
element of justifiable reliance that we are limited to an analysis of the evidence on that element.
But appellate courts are to construe pleadmgs based on their content, not the labels assigned to
them. See Garza v. C7Z Mortg. Co., LLC. 285 S.W.3d 919, 925 (Tex. App.—l)allas 2009, no
pet.): Rush v. Barrios, 56 S.W.3d 88,93 (Tex. App.—Houston [1st Dist.j 2001, pet. denied). We
construe Ravkind’ s noevidence motion to challenge the element of representation as well as
justifiable reliance, and will analyze the issue accordingly. 3
In his motion. Ravkind argued that the Verification of Deposit was addressed to a
specific party, Troy Jones at Bright Mortgage. 1-Ic argued that the Bank had no evidence it was
the intended recipient or was within a limited group of intended recipients of the Verification of
Deposit. Relying on McCamish, Ravkind argued that “liability arises when a professional
Ravkind also moved for traditional summary judgment on these same grounds. transfers information to a known party For a known purpose.” See MeCamisli. 991 S .W.2d at
794.
The Bank responded with evidence that it actually relied on the Verification of Deposit
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AFFIRM and Opinion Filed March 12, 2013.
In The Qtiiirt ni Aprat 3fiItIi tlitrict of Lrxa at aLI&ui No. 05-1 1-01 123-CV
BANK OF TEXAS, N.A., Appellant
V.
WILLIAM RAV KIND, Appellee
On Appeal from the 193rd judicial District Court Dallas County, Texas Trial Court Cause No. 11-6647
MEMORANDUM OPINION Before Justices Lang-Miers, Myers, and Richter’ Opinion by Justice Lang-Miers Appellant Bank of Texas. N.A. appeals the trial court’s order granting Appellee William
Ravkind’s motion for summary judgment. We issue this memorandum opinion pursuant to Texas
Rule of Appellate Procedure 47.4 because the law to be applied in the case is well settled. We
affirm the trial court’s judgment.
BACKGROUND
Bank of Texas sued Ravkind for negligent misrepresentation. It alleged that Ravkind
completed a form entitled “Verification of Deposit” stating that he was the depository of two
The Honorable Martin E. Richter, Retired Justice, Court of Appeals, Fifth District of Texas at Dallas, sitting by assignment. trust accounts belonging to his client Cindy Lantrip that contained assets totaling $1 .2 million:
that Ravkind was not the depository of the accounts: that the inlorination on the Verification of
Deposit was false; that it relied on the Verification of Deposit in deciding to lend Lantrip almost
$2 million for improvements to property located on Colgate in University Park, Texas; that
Lantrip defaulted on the loan: that the Rank sold the property at foreclosure for $640,000; and
that Ravkind’s negligent misrepresentation proximately caused the Bank’s injuries.
Ravkind tiled a combined no—evidence and traditional inot ion lor summary judgment.
The trial court granted Ravkind’s motion “on each ground allegedl.I” The Bank raises seven
issues on appeal challenging the court’s order, In its first issue on appeal, the Bank argues that
the trial court erred by granting Ravkind’s no-evidence motion for summary judgment on the
issue of justifiable reliance.
Standard of Review
When a party files both a no-evidence and a traditional motion for summary judgment,
we consider the no-evidence motion first. ford Motor Co. i’. Ridgwav. 135 S.W .3d 598, 6(X)
(Tex. 2004). The no-evidence motion must specifically state the elements for which there is no
evidence. TEx. R. Civ. P. 166a(i). The burden then shifts to the nonmovant to produce more than
a scintilla of summary judgment evidence that raises a genuine issue of material fact as to each
essential element identified in the motion. Id. & cmt (1997); Sw. Elec. Power Co. v. Grant. 73
S.W.3d 211, 215 (Tex. 2002). More than a scintilla of evidence exists if the evidence would
allow reasonable and fair-minded people to reach the verdict under review. See City of Keller v.
Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d
167, 172 (Tex. 2003). Less than a scintilla of evidence exists when the evidence is so weak that it
2 Ravkind claimed that his signature on the Verification of Deposit was forged. does no more than create a mere surmise or suspicion of a fact. h)rbes, 124 S.W3d at 172. We
must credit favorable evidence if reasonable jurors could and disregard contrary evidence unless
reasonable jurors could not. City of Keller, 168 S.W.3d at 827. To determine whether the
nonmovant met its burden, we review the summary judgment evidence in the light most
lavorable to the nonmovant and disregard all contrary evidence and inferences. Sudan v. Sudan,
199 S,W.3d 291, 292 (Tex. 2006) (per ctlriam) (quoting City of Keller, 168 S.W.3d at 823).
Applicable Law
The Supreme Court of Texas adopted section 552 of the Restatement (Second) of Torts as
the law of Texas with regard to a professional’s liability to a nonclient for negligent
misrepresentation. McCamish. Martin. Brown & Loeffler v. FE. Appling Interesis, 991 S.W.2d
787, 794 (Tex, 1999). To prove negligent misrepresentation, a plaintiff must show that the
defendant, in the course of his business or a transaction in which he had an interest, supplied
false information for the guidance of others without exercising reasonable care or competence in
communicating the information, that the plaintiff justifiably relied on the information, and that
the misrepresentation proximately caused the plaintiff’s injury. Kastner v. Jenkens & Gikhrist,
P.C., 231 S.W.3d 571, 577 (Tex. App.—Dallas 2007, no pet.). Liability is premised on the
professional’s “independent duty to the nonclient based on the professional’s manifest awareness
of the nonclient’s reliance on the misrepresentation and the professional’s intention that the
nonclient so rely.” McCa,nish, 991 S.W.2d at 792.
Discussion
Initially we must determine the scope of our review. Ravkind’s combined motion for
summary judgment contained a heading, “No Evidence — Justifiable Reliance.” Under that
heading, Ravkind argued that there was no evidence he made a representation to the Bank, no
3 evidence the Bank was within the limited group oh recipients to whom he would have liability,
no evidence he made any representation concerning the Colgate properly loan, and no evidence
the Bank justifiably relied on any alleged misrepresentation. The Bank acknowledges in its brief
on appeal that the argument in the noevidence part of Ravkind’s motion was not limited to the
justifiablerel i ance element of a ci aim for negligent misrepresentation: “the actual argument
presented within the text of the motion appears to he (1) there is no evidence of a representation
by Ravkind: and (2) Bank of Texas was not within the class of recipients for which the law
imposes liabilities• therefore there could not have been reasonable and/or justifiable reliance.”
But the Bank contends that Ravkind challenged only the element of justifiable reliance and, as a
result, this Court is limited to an analysis of that element.
We construe the Bank to argue that because the motion’s heading contained only the
element of justifiable reliance that we are limited to an analysis of the evidence on that element.
But appellate courts are to construe pleadmgs based on their content, not the labels assigned to
them. See Garza v. C7Z Mortg. Co., LLC. 285 S.W.3d 919, 925 (Tex. App.—l)allas 2009, no
pet.): Rush v. Barrios, 56 S.W.3d 88,93 (Tex. App.—Houston [1st Dist.j 2001, pet. denied). We
construe Ravkind’ s noevidence motion to challenge the element of representation as well as
justifiable reliance, and will analyze the issue accordingly. 3
In his motion. Ravkind argued that the Verification of Deposit was addressed to a
specific party, Troy Jones at Bright Mortgage. 1-Ic argued that the Bank had no evidence it was
the intended recipient or was within a limited group of intended recipients of the Verification of
Deposit. Relying on McCamish, Ravkind argued that “liability arises when a professional
Ravkind also moved for traditional summary judgment on these same grounds. transfers information to a known party For a known purpose.” See MeCamisli. 991 S .W.2d at
794.
The Bank responded with evidence that it actually relied on the Verification of Deposit
signed by Ravkind and that the Verification of Deposit “was instrumental” in its decision to
make the loan to Lantrip. It offered evidence that it received the Verification of Deposit from a
mortgage broker at Metropolitan Mortgage and that it was “industry practice” for residential
construction loans to be “packaged and presented by a mortgage company.” The Bank also
presented evidence that it was not concerned about the Verification of Deposit being addressed
to a different mortgage company because a borrower “will submit a loan to multiple lenders
simultaneously.”
Although the Supreme Court of Texas agreed that professionals could face liability for
negligent misrepresentation to a nonclient, the court limited the professional’s liability to
situations in which the professional transfers the information “to a known party For a known
purpose.” Id. Several years later, the court reaffirmed that decision and expounded on it. It
explained that a “known party” is limited to situations “in which the professional who provides
the information is ‘aware of the nonclient and intends that the nonclient rely on the
information.” Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 920 (Tex.
2010) (quoting McCatnish, 991 S.W.2d at 794). It cited with approval courts which have held
that the professional must have actual knowledge of the party to whom the information is
provided and the purpose for which the information is provided. Id. at 920 n.h (quoting Ervin v.
Mann Frankfrrt Stein & Lipp CPAs, LLP, 234 S.W.3d 172, 177 (Tex. App.—San Antonio 2007,
no pet.) and Abrams Ctr. Nat’l Bank v. Farmer, Fuqua & Huff P.c., 225 S.W.3d 171, 177 (Tex.
App.—El Paso 2005, no pet.)).
5 The l3ank did not present any evidence that Ravkind had actual knowledge that the
Verification of Deposit was being provided to the Bank, and it did not present any evidence that
Ravkind had actual knowledge that the Verification of Deposit was being supplied for the
Colgate properly loan. In tact, there is no summary judgment evidence connecting Ravkind to
the Bank or the Colgate property loan. The Verification of Deposit was addressed to Bright
Mortgage, a different mortgage company from the one that supplied it to the Bank (Metropolitan
Mortgage). And the Verification of Deposit did not state any purpose for which the form was
being completed other than for a “mortgage loan.”
Despite this, the Bank argues that Ravkind intended the form to “reach a lender to Lantrip
and intended to verify assets for underwriting a loan to Lantrip. Ravkind, an experienced white
collar crimmal defense attorney, knew and recognized the purpose of the Verification of
Deposit.” The Bank argues that “Ravkind, by making the misrepresentations, invited a lender to
Lantrip to rely on his verification. Bank of Texas was that lender.” However, to hold Ravkind
liable to any lender who may have come into possession of the Verification of Deposit addressed
to Bright Mortgage “would ‘eviscerate the Restatement rule in favor of a de facto foreseeability
approach—an approach [wel have refused to embrace” and would render meaningless the
restriction upon liability to those within a limited group of intended recipients. Grant Thornton,
314 S.W.3d at 921 (quoting Scottish Heritable Trust, PLC v. Peat Marwick Main & Co., 81 F.3d
606, 613 (5th Cir. 1996)).
We conclude that the Bank did not present any summary judgment evidence raising a fact
issue that Ravkind made a representation to the Bank regarding the loan on the Colgate property
The form states. To Depository; I/We have applied for a mortgage loan and stated in my/our financial statement that the balance on deposit with you is shown as above. You are authorized to verify this information and to supply to the Lender identified ahove. The lender was identified as Bright Mortgage.
6 as is required to suppoil a claim for negligent misrepresentation. Consequently. the trial court did
not err by granting Ravkind’s noevidence motion for summary judgment.
Conclusion
We resolve issue one against appellant. Because of our disposition of issue one, we do
not need to reach the remaining issues. We affirm the trial court’s judgment.
‘EL1ZA,3ET[1 LANGM1ERS J USTJtE
111 123FY05
7 __—
(LLuTrt ni \ptiril .‘FiIL1! JiLrirt ut iL Ji1Ii JUDGMENT
BANK OF TEXAS, N.A.. Appellant On Appeal from the 193rd Judicial District Court, Dallas County. Texas No. 054 IMI 12T-CV V. Trial Court Cause No. I I6647, Opinion delivered by Justice LangMiers, WILLIAM RAVKIND, Appellee Justices Myers and Richter participating.
In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED. It is ORDERED that appellee William Ravkind recover his costs of this appeal from appellant Bank of Texas, N.A.
th 12 Judgment entered this day of March, 2013.
/ ( j’ ( I:LIzAB[:l’I I LANG-f TIERS / JUSTICE