Burnap v. Linnartz

38 S.W.3d 612, 2000 WL 1670883
CourtCourt of Appeals of Texas
DecidedJanuary 12, 2001
Docket04-97-00959-CV
StatusPublished
Cited by3 cases

This text of 38 S.W.3d 612 (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, 38 S.W.3d 612, 2000 WL 1670883 (Tex. Ct. App. 2001).

Opinions

Opinion by

SARAH B. DUNCAN, Justice.

A majority of this Court grants the motion for consideration en banc filed by Willard H. Burnap. Upon reconsideration, we withdraw the panel’s opinion and judgment signed September 16, 1998, and substitute this opinion and a new judgment in their place.

Willard H. Burnap appeals the summary judgment rendered against him on his claims against attorney Lawrence R. Lin-nartz and Linnartz’s former law firm, Ingram, Linnartz <& Reynolds, P.C. Sitting en banc, a majority of this court holds the trial court correctly rendered judgment [615]*615against Burnap on his claim for negligent infliction of emotional distress. We thus affirm this aspect of the trial court’s judgment. However, we reverse the remainder of the trial court’s judgment and remand Burnap’s remaining claims for trial.

STANDARD OP REVIEW

We review a summary judgment de novo. Accordingly, we will uphold a Rule 166a(c) summary judgment only if the summary judgment record establishes there is no genuine issue of material fact, and the movant is entitled to judgment as a matter of law on a ground set forth in the motion. Tex.R. Civ. P. 166a(c); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). In deciding whether the summary judgment record establishes the absence of a genuine issue of a material fact, we view as true all evidence favorable to the respondent and indulge every reasonable inference and resolve all doubts in his favor. Id. This standard is reflected in the factual background set forth below.

Factual and Procedural Background

In the early 1980s, Walter S. Burnap and Daniel J. Linnartz became acquainted as a result of their involvement in the management of two corporations, River City Corporation (RCC) and Kittie Petroleum, Inc. (KPI). The two corporations were represented on occasion by Lin-nartz’s brother, Lawrence, who was then a partner in MeCamish, Ingram, Martin & Brown (the MeCamish Firm). In August 1984, Burnap and Danny Linnartz, along with B. Max Burleson and Lester L. Kelly, formed a third partnership — Kittie Partners 1984-1. From its inception, Kittie Partners was responsible for payment of a $8.22 million note executed by Walter Bur-nap and made payable to First South Savings Association. Payment of the First South Note was personally guaranteed by Kelly, Burleson, and Linnartz.

Shortly after Kittie Partners was formed, Larry Linnartz told Burnap that he and the MeCamish Firm wanted to provide all of the legal services for RCC, KPI, and Kittie Partners, as well as the involved individuals. Thereafter,' as a result of this meeting, Burnap and all of the other individuals involved in RCC, KPI, and Kittie Partners moved the majority of their legal work to Larry Linnartz and the MeCamish Firm.

In March 1985, Walter Burnap assigned a portion of his interest in Kittie Partners to his father, Willard H. Burnap. This assignment was made effective as of the date of Kittie Partners’ inception in August 1984, However, unlike the original partners, Willard Burnap did not personally guarantee payment of the First South Note.

In the summer of 1986, Danny Linnartz and Max Burleson withdrew from Kittie Partners. Under the terms of their withdrawal, Linnartz and Burleson reconveyed to Kittie Partners their partnership interests, and Kittie Partners conveyed to Lin-nartz’s and Burleson’s new partnership, D & M Partners, certain of its assets. As a part of this transaction, Kittie Partners, Walter Burnap, Linnartz, Burleson, and D & M Partners entered the 1986 Release and Indemnity Agreement, which was drafted by a MeCamish Firm associate, William M. Rork, at Lawrence Linnartz’ request. In substance, this agreement provided as follows:

RECITALS
WHEREAS, effective July 31, 1986, Linnartz and Burleson have conveyed their respective interests in [Kittie] Partners to [Kittie] Partners and have withdrawn from [Kittie] Partners in consideration of the distribution by [Kittie] Partners of certain assets of [Kittie] Partners to D & M; and WHEREAS, the withdrawal of Linnartz and Burleson from [Kittie] Partners and the distribution of assets by [Kittie] Partners to D & M has been approved by the remaining partners in accordance [616]*616with the terms of [the partnership agreement].
WITNESSETH:
NOW, THEREFORE, ... [Kittie] Partners, [Walter] Burnap, Linnartz, Burle-son, and D & M agree as follows:
1. [Kittie] Partners and [Walter] Burnap ... (collectively, the “Releasing Party”) hereby covenant and agree to release, indemnify and hold harmless Linnartz, Burleson and D & M ... (collectively, the “Indemnified Party”) from and against any claim, demand, recovery, obligation, loss, liability, damage, cost or expense ... that any Indemnified Party, may incur or sustain for, on or by reason of any matter, cause or thing whatsoever, relating to, arising out of, or in connection with any transaction, conveyance, encumbrance, loan, mortgage, or other activity by, for or on behalf of the Releasing Party, or any other liability the Indemnified Party may have undertaken to pay (as maker, co-maker, endorser, guarantor, indemnitor or otherwise) on behalf of [Kittie] Partners or [Walter] Burnap, ..., except as specifically assumed, taken subject to or otherwise consented to, and only to the extent so assumed, taken subject to or consented to by the Indemnified Party in conjunction with the transactions recited in the premises hereof, whether now existing or hereafter arising.
2. Linnartz, Burleson and D & M ... hereby covenant and agree to release, indemnify and hold harmless [Kit-tie] Partners and [Walter] Burnap ... from and against any claim, demand, recovery, obligation, loss, liability, damage, cost or expense ... that [Kittie] Partners and/or [Walter] Burnap ... may incur or sustain for, on or by reason of any matter, cause or thing whatsoever, relating to, arising out of, or in connection with any transaction, conveyance, encumbrance, loan, mortgage asset or activity of, by, for or on behalf of Linnartz, Burleson and/or D & M, whether now existing or hereafter arising.

This release was signed by the two partnerships, Kittie Partners (by its remaining partners) and D & M Partners (by its partners), and by Walter Burnap, Lin-nartz, and Burleson, individually and as partners. Willard Burnap signed the 1986 Release and Indemnity Agreement only in his capacity as a partner. The Burnaps’ understanding was that because Willard Burnap “did not sign the agreement as an individual, it would not impose any personal liability on him.” The Burnaps relied on Larry Linnartz’ and Rork’s expertise in preparing the appropriate documents and expected they would protect the Burnaps’ individual interests or explain any conflicts of interest. It is undisputed that neither Rork nor Linnartz presented the Burnaps with a conflicts letter or a memorandum explaining the possible conflicts that could arise out of the indemnity agreement.

In July 1987, Kelly withdrew from Kittie Partners and, in January 1988, Willard Burnap sold his interest in Kittie Partners to his son Walter. Shortly thereafter, Walter Burnap, as Kittie Partners’ sole remaining partner, dissolved the partnership and sold a majority of its assets and liabilities to KPI.

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38 S.W.3d 612, 2000 WL 1670883, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burnap-v-linnartz-texapp-2001.