Burnap v. Linnartz

914 S.W.2d 142, 1995 WL 790002
CourtCourt of Appeals of Texas
DecidedOctober 6, 1995
Docket04-94-00303-CV
StatusPublished
Cited by55 cases

This text of 914 S.W.2d 142 (Burnap v. Linnartz) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burnap v. Linnartz, 914 S.W.2d 142, 1995 WL 790002 (Tex. Ct. App. 1995).

Opinions

OPINION

STONE, Justice.

This is an appeal from a summary judgment entered in favor of the defendant lawyers in a legal malpractice action. The appellant, Willard Burnap, contends numerous unresolved fact issues preclude summary judgment. We agree that material issues of fact remain regarding the existence of an attorney-client relationship, and that these issues must be submitted to a jury. We find, however, that Burnap’s claims against appel-lees William Rork and McCamish & Martin, P.C. are barred by the statute of limitations. We therefore affirm in part and reverse and remand in part.

STANDARD OF REVIEW

We review the trial court’s judgment under well-established summary judgment rules. The movant in a summary judgment proceeding has the burden of showing that no genuine issue of material fact exists, and that it is entitled to judgment as a matter of law. In deciding whether a disputed material fact issue precludes summary judgment, we must take as true all evidence favoring the non-movant. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Eveiy reasonable inference from the evidence will be indulged in favor of the non-movant, and any doubts will be resolved in its favor. Id.; Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). In the instant case the trial court did not enumerate the grounds upon which summary judgment is based, thus the judgment will be affirmed if any of the theories advanced in appellees’ motions are meritorious. See Rogers v. Ricane Enter., Inc., 772 S.W.2d 76, 79 (Tex.1989).

FACTUAL BACKGROUND

A review of the record in the light most favorable to appellant discloses the following facts: In 1984 Walter Burnap, Lester Kelly, Max Burleson, and Daniel Linnartz formed a general partnership, Kittie Partners 1984-1 (“KP 1984-1”). Walter Burnap, who held an 80% interest in the partnership, executed a $3.2 million note payable to First South Savings Association (“First South Savings”). Each of the partners signed a personal guarantee of the note, and the partnership itself ultimately became an obligor on the note. In 1985 Willard Burnap, father of Walter Bur-nap, became a partner retroactive to August 1984. Willard never signed a personal guarantee on the First South Savings note.

In 1986 Daniel Linnartz and Max Burleson decided to withdraw from KP 1984-1. Wal[146]*146ter Bumap contacted Daniel Linnartz’ brother, Lawrence Linnartz, and engaged his law firm to draft the necessary paperwork for the withdrawal. Because the transaction involved his brother, Linnartz asked an associate, William Rork, to perform the legal work. Rork prepared a Mutual Release and Indemnity Agreement (“the indemnity agreement”) for all partners to sign. The indemnity agreement provided that KP 1984-1 through its remaining partners (Walter Burnap, Willard Burnap and Lester Kelly) would indemnify Daniel Linnartz and Burleson for any liability that the withdrawing partners may have undertaken to pay as guarantors on behalf of KP 1984-1. The indemnity agreement purported to comply with the partnership agreement, which provided for several alternatives in the event of partner withdrawal.

Rork and Lawrence Linnartz presented summary judgment evidence that the partners had agreed to all terms of the withdrawal, and that Rork was merely the “scrivener” who reduced the agreed terms to writing. Appellant Burnap presented summary judgment evidence that he and his son Walter relied on the legal expertise of Lawrence Linnartz and Rork in preparing the appropriate documents to effectuate the withdrawal of Daniel Linnartz and Burleson. Both Bumaps expected that Lawrence Lin-nartz and Rork would protect their individual interests or explain any conflicts as they related to and were affected by partnership matters. Appellant signed the indemnity agreement as a partner only, not individually. It is undisputed that neither Rork nor Lawrence Linnartz ever presented any partner of KP 1984-1 with a conflicts letter or memorandum outlining the possible conflicting positions that could arise upon execution of the indemnity agreement. Neither Rork nor Lawrence Linnartz could explain why such a conflicts letter was not prepared and presented to the partners. Rork did recall informally discussing possible conflicts with Walter Burnap. But he never had a similar conversation with Willard Burnap since Rork never saw, spoke with, or personally met Willard Bumap during the time he performed legal services relating to KP 1984-1.

On January 1, 1988, Willard Burnap sold his entire interest in KP 1984-1 to his son. Walter Burnap in turn dissolved the partnership and sold its assets to Kittie Petroleum, Inc. Again, Rork prepared the documentation, but this time he prepared a conflicts letter outlining to each Burnap the possible conflicts of interest that could arise from the transaction. There is no evidence that this conflicts letter was ever presented to the Bumaps.

Also in January 1988, First South Savings executed a release negotiated by William Rork, stating that it released from liability on the KP 1984-1 note all former partners, with the exception of Walter Burnap and any person who had signed a personal guarantee on the note. Willard Burnap was the only former partner who had not signed a personal guarantee on the note. Rork testified in his deposition that the intent of the release was to protect Willard Burnap from liability on the First South Savings note.

In 1989 Kittie Petroleum, Inc. filed for bankruptcy and defaulted on the First South Savings note. After foreclosing on collateral, a deficiency of $1.3 million remained. First South Savings itself then became insolvent and its successor, the FDIC and later the RTC, filed suit in federal court against KP 1984-1, and each of the individuals who had signed personal guarantees: Walter Bumap, Daniel Linnartz, Max Burleson, and Lester Kelly.

Lawrence Linnartz represented Daniel Linnartz and Max Burleson in negotiating a settlement with the RTC. Information regarding Willard Bumap, the 1986 indemnity agreement, and the history of the partnership was provided to the RTC, although at least some of this information was presented by Daniel, not Lawrence Linnartz. By the terms of the settlement agreement, Daniel Linnartz and Burleson agreed to assign to the RTC their rights under the indemnity agreement against KP 1984-1 and Walter Burnap, and granted an agreed judgment to the RTC for the full amount of the loan deficiency. The RTC in turn promised not to enforce the judgment against Daniel Lin-nartz and Burleson unless the RTC was wholly unsuccessful in its efforts to collect [147]*147under the indemnity agreement assignment. In the event of such lack of success, Daniel Linnartz and Bumap agreed to pay the RTC a total sum of $25,000.

Following this settlement agreement, the RTC added Willard Burnap as a defendant in the federal suit. Walter Bumap and Lester Kelly filed for bankruptcy and were dismissed from the suit. Summary judgment for the full amount of the deficiency was entered against KP 1984-1 and Willard Bur-nap in favor of First South Savings, and that ruling was affirmed by the Fifth U.S. Circuit Court of Appeals. The ease was remanded to the trial court for a review of the fairness of the underlying settlement.

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914 S.W.2d 142, 1995 WL 790002, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burnap-v-linnartz-texapp-1995.