First United Pentecostal Church of Beaumont v. Parker

514 S.W.3d 214, 60 Tex. Sup. Ct. J. 608, 2017 WL 1359849, 2017 Tex. LEXIS 295
CourtTexas Supreme Court
DecidedMarch 17, 2017
DocketNo. 15-0708
StatusPublished
Cited by424 cases

This text of 514 S.W.3d 214 (First United Pentecostal Church of Beaumont v. Parker) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 60 Tex. Sup. Ct. J. 608, 2017 WL 1359849, 2017 Tex. LEXIS 295 (Tex. 2017).

Opinion

Justice Johnson

delivered the opinion of the Court.

This case involves the loss of over a million dollars that a church entrusted for safekeeping to The Lamb Law Firm, P.C. The firm deposited the money into its trust account. Less than two weeks later, $750,000 was transferred from the trust account to a new account opened and only accessible by the firm’s owner, Kip Lamb. That transfer was just the beginning, and in shortly over a year the church’s money was gone. When Leigh Parker, one of the firm attorneys representing the church, told the church that its money had been spent, the church sued the firm, Lamb, and Parker. The trial court granted summary judgment to Parker. The court of appeals affirmed. We affirm in part and reverse and remand in part.

I. Background

In the fall of 2007, Lonnie Treadway, pastor and chief executive manager of the First Pentecostal Church of Beaumont, hired The Lamb Law Firm, P.C. to defend Treadway and the church in a sexual harassment lawsuit. The firm was a professional corporation owned by Kip Lamb. Parker worked for the firm on what he characterized as a contract basis, being paid a set monthly amount and receiving benefits paid for. by the firm. Lamb and Parker participated on the' firm’s behalf in defending the church in the sexual harassment suit.

In April 2008, the church settled an insurance claim for property damage it sustained during Hurricane Rita. The church’s part of the settlement was $1,094,611.02. Treadway, was concerned that the settlement money would be targeted by plaintiffs in the sexual harassment suit. Pursuant to these concerns, Treadway and Lamb agreed that the firm would hold the money in an attempt to shield it from potential judgment creditors. The settlement funds were deposited in the firm’s trust account on April 14, 2008. On April 25, 2008, $750,000 was electronically transferred out of the trust account into another account in Lamb’s name. Ten days later Lamb initiated the transfer of another $150,000 out of the trust account. By the end of September 2009, approximately $1,200,000 had been transferred from the firm’s trust account to either personal accounts of Lamb or the firm operating account. ■ The money was spent either on Lamb’s personal expenses or on firm expenses. Parker maintains he was unaware that the church’s money had been transferred from the trust account until Lamb told him about it in the summer of 2010.

In July 2011, Parker attended a meeting with the church’s Board of Trustees and reported that the firm still had the money. In October 2011, Jonathan Green, the church’s new pastor, contacted Parker and told him the church needed the money. At that point Parker told Green that the money was gone, Lamb spent it, and there were no prospects that it could be repaid in the immediate future. The next day Parker sent the church a letter memorializing what he told Green. In his letter, Parker maintained that he did not know Lamb had withdrawn and spent the [218]*218church’s money until the summer of 2010. But Parker stated that he breached his fiduciary duty by not disclosing that the funds were missing once he knew they were gone and by not investigating to find out what happened to the money. He explained that he had hoped a transaction he had been working on for the firm (the Ghana deal) would work out so the church could have been made whole. Parker also stated in the letter that he never had control of the church’s funds, but he could have unknowingly and indirectly received some of the money in the form of his bimonthly paychecks from the firm.

In February 2012, the church sued the firm, Lamb, and Parker. It alleged causes of action for theft and embezzlement, misapplication of funds by a fiduciary, breach of fiduciary duty, fraud, legal malpractice, conspiracy, and “other wrongful conduct.” By then Lamb was facing criminal charges. He eventually pleaded guilty to misapplication of fiduciary property and fraud and was sentenced to fifteen years confinement.1 This Court accepted his resignation as an attorney in lieu of disciplinary action, cancelled his law license and state bar card, and prohibited him from practicing law in the State of Texas. In re Kip Kevin Lamb, Misc. Docket No. 13-9056 (Tex. Apr. 29, 2013).

In support of its claims against Parker, the church alleged that he was associated with, or worked for, the firm; he was part of a joint venture with Lamb and the firm; Parker knowingly participated in Lamb’s breach of fiduciary duty; Parker made intentional misrepresentations to the church to cover up the fact that the money was gone; and he was jointly and severally liable for the church’s damages.

Parker filed no-evidence and traditional motions for summary judgment as to all the claims. The trial court scheduled a hearing on the motions for August 2012, but the church non-suited Parker before the hearing. Then, in October 2013, the church brought Parker back into the suit via supplemental petition. Parker re-filed his motions for summary judgment.

In his no-evidence motion, Parker argued that the church had not produced any evidence of causation between his actions and the church’s damages. In support of the traditional motion, Parker attached his affidavit. In the affidavit, Parker averred that he was at all times a contract attorney for the firm, had no knowledge of Lamb’s scheme until the summer of 2010, and did not control or receive any of the church’s money. Parker also attached a copy of Lamb’s reply to a criminal pre-sentencing investigation (PSI) report in which Lamb admitted he used the church’s funds, but he considered them a loan. Finally, Parker attached bank records and deposit slips evidencing that Lamb had taken the church’s money.

In its response, the church relied in part on Parker’s 2011 letter and a sworn statement he had given to the church’s attorneys. The church pointed to language in the letter and from Parker’s sworn statement that it claimed evidenced Parker was part of a joint venture and that Parker’s actions were causally related to the church’s loss. Specifically, the church pointed to Parker’s admission that he “had [219]*219a duty to investigate and inform [the church] that their funds were no longer there,” Parker’s reference to “our firm,” and his statement that “we had to pay back the church funds.”

The trial court granted Parker’s motions for summary judgment without specifying its reasons. The church appealed, challenging the court’s rulings only with respect to the claims for breach of fiduciary duty, civil conspiracy, aiding and abetting, and joint venture.2

In a split decision, the court of appeals affirmed. — S.W.3d — (Tex. App.— Beaumont 2015). It focused primarily on the lack of causation between any of Parker’s actions and the church’s loss. The dissenting justice would have reversed as to the claims for breach of fiduciary duty and joint venture. Id. at-(Johnson, J., dissenting).

Here, the church argues that it did not need to provide evidence of causation in order to survive summary judgment on its breach of fiduciary duty claim. It also argues that the civil conspiracy and joint venture claims should survive because Parker’s statements conflict, creating a fact issue regarding his knowledge that Lamb stole the money. Finally, the church argues that the appeals court misapplied the law on aiding and abetting and there is evidence Parker knowingly aided Lamb in stealing the money.

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Bluebook (online)
514 S.W.3d 214, 60 Tex. Sup. Ct. J. 608, 2017 WL 1359849, 2017 Tex. LEXIS 295, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-united-pentecostal-church-of-beaumont-v-parker-tex-2017.