FILED 14-0594 8/6/2015 4:00:59 PM tex-6391963 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK
NO. 14-0594 __________________________________________________________________ IN THE SUPREME COURT OF TEXAS ____________________________________________________________________ Hallie Brock (Deceased), Carolyn Brock, Niki Powell, Linda Thompson (Deceased), Michael Beaver, Marisa Reeves, Dina Artebury, Kay Moore, Judy Birdwell, Linda Coats, William Thompson, Jilian Henson Petitioners,
v.
Gene Tipton Respondent. ___________________________________________________________________ On Appeal from the Eighth District Court of Appeals El Paso, Texas Appellate Cause No. 08-12-00138-CV ___________________________________________________________________ RESPONDENT’S RESPONSE TO PETITIONERS’ MOTION FOR REHEARING __________________________________________________________________
RICHARD H. KELSEY State Bar No. 11244000 rkelsey@dentontexaslawyers.com KELSEY, KELSEY & HICKEY P.O. Box 918 Denton, Texas 76202-0918 Telephone: 940-387-9551 Metro: 940-243-2888 Facsimile: 940-387-9553
ATTORNEY FOR RESPONDENT GENE TIPTON TABLE OF CONTENTS
Table of Contents .......................................................................................................2
Index of Authorities ...................................................................................................3
Respondent’s Answer to Petitioners’ Motion for Rehearing............................... 4-11
Overview of Petitioners’ Motion ...................................................................4, 5
Specific Responses to Petitioners’ Argument ................................................ 5-9
Item (A)(1), page 5 .................................................................................5, 6
Item (B)(1), pages 9 and 10 ........................................................................ 7
Item (B)(2), pages 10-13 ........................................................................ 7-9
Item (C), page 13 and 14 ............................................................................9
Conclusion ...........................................................................................................9, 10
Prayer .......................................................................................................................10
Certificate of Service ...............................................................................................11
Certificate of Compliance ........................................................................................11
2 INDEX OF AUTHORITIES Page CASES
Cade vs. Cosgrove, 430 S.W.3d 488, (Tex. App.—Fort Worth 2014, pet. pending) ...............5, 10
City of Fort Worth vs. Pippen, 439 S.W.2d 660, 664 (Tex. 1969) ................................................................... 7
Computer Associates International, Inc. vs. Altai, Inc., 918 S.W.2d 453 (Tex. 1994) ................................................................. 4, 6, 10
Lesley vs. Veterans Land Board of Texas, 352 S.W.3d 479, 485, 86 (Tex. 2011) ...........................................................10
Martinka vs. Commonwealth Land Title Insurance Company, 836 S.W.2d 773, 777 (Tex. App.—Houston [1st Dist.] 1992 writ denied) ..... 7
3 RESPONDENT’S ANSWER TO PETITIONERS’ MOTION FOR REHEARING Gene Tipton, Respondent, answers Petitioners’ arguments presented in their
Motion for Rehearing as follows:
I.
Overview of Petitioners’ Motion
The motion for rehearing concentrates on the bar of the statute of limitations
against Petitioner’s claim first made in 2009 for reformation of a 1999 deed. The
issue in this case is not the effect of the statute of limitations but the application vel
non of the discovery rule as articulated in Altai1. From the beginning of this case,
Petitioners’ arguments have failed to recognize the substantial change in the
analysis and application of the discovery rule. Altai adds a gatekeeper predicate;
only after satisfying the “inherently undiscoverable” standard of review may the
question of who-knew-what-when be submitted to a jury. The legal issue is
reviewed de novo under the Altai standard of due diligence as embedded in the
inherently undiscoverable concept.
The Court of Appeals unanimously decided that the 1999 Deed was not
ambiguous, the “mistake” was not inherently undiscoverable, and Petitioners failed
to show due diligence as a matter of law.
1 Computer Associates International, Inc. vs. Altai, 918 S.W.2d 455 (Tex. 1994, opinion withdrawn, reissued 1996)
4 The Supreme Court, in denying the petition for review, determined that
Petitioners’ lack of due diligence as found by the Court of Appeals was the correct
application of the gatekeeper legal standard of review.
II.
Specific Responses to Petitioners’ Argument
This response will follow the organizational format of petitioners’ argument,
starting with item (A)(1), page 5.
Petitioners speculate that the denial of their petition for review is completely
dependent on the opinion in Cosgrove2. Petitioners seem to be filing a motion for
rehearing addressed to Cosgrove rather than to this case. Contrary to Petitioners’
motion, the Cosgrove case does not involve “…the application of the statutes of
limitation in deed reformation cases.” Cosgrove does clarify the application of the
discovery rule to deed reformations. Petitioners do not argue against the ruling of
the Supreme Court that the discovery rule does apply categorically to deed
reformation cases.
Petitioners make an inconsistent argument in stating that the deed in this
case is not a “so-plain-omission” issue. In the trial court, the Court of Appeals, and
the Supreme Court, Petitioners have heretofore argued that the “mutual mistake”
was plain and obvious because of the difference between the contract and the deed.
2 Cade vs. Cosgrove, 430 S.W.3d 488, (Tex. App.—Fort Worth 2014, pet. pending)
5 The Petitioners have now completely changed their theory of the case by arguing
that the reference in the 1999 Deed to “predecessors” somehow creates an
ambiguity that triggers the deferral of the discovery rule. Petitioners did not ask
for that ruling in the trial court and lost the ruling in the Court of Appeals. At this
point in their motion, Petitioners reargue pre-Altai precedent to support their
reasoning that even though none of them ever read the deed, they misunderstood
the word “predecessors” to include a mineral reservation to them. The Court of
Appeals correctly analyzed that argument as being defective. Petitioners’ case is
totally dependent upon their position as grantors that the deed (that they signed but
never read), allegedly left them with a subjective understanding that the word
“predecessors” reserved to minerals by them. They have morphed their argument
into that position because the deed itself contained a reference to minerals
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FILED 14-0594 8/6/2015 4:00:59 PM tex-6391963 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK
NO. 14-0594 __________________________________________________________________ IN THE SUPREME COURT OF TEXAS ____________________________________________________________________ Hallie Brock (Deceased), Carolyn Brock, Niki Powell, Linda Thompson (Deceased), Michael Beaver, Marisa Reeves, Dina Artebury, Kay Moore, Judy Birdwell, Linda Coats, William Thompson, Jilian Henson Petitioners,
v.
Gene Tipton Respondent. ___________________________________________________________________ On Appeal from the Eighth District Court of Appeals El Paso, Texas Appellate Cause No. 08-12-00138-CV ___________________________________________________________________ RESPONDENT’S RESPONSE TO PETITIONERS’ MOTION FOR REHEARING __________________________________________________________________
RICHARD H. KELSEY State Bar No. 11244000 rkelsey@dentontexaslawyers.com KELSEY, KELSEY & HICKEY P.O. Box 918 Denton, Texas 76202-0918 Telephone: 940-387-9551 Metro: 940-243-2888 Facsimile: 940-387-9553
ATTORNEY FOR RESPONDENT GENE TIPTON TABLE OF CONTENTS
Table of Contents .......................................................................................................2
Index of Authorities ...................................................................................................3
Respondent’s Answer to Petitioners’ Motion for Rehearing............................... 4-11
Overview of Petitioners’ Motion ...................................................................4, 5
Specific Responses to Petitioners’ Argument ................................................ 5-9
Item (A)(1), page 5 .................................................................................5, 6
Item (B)(1), pages 9 and 10 ........................................................................ 7
Item (B)(2), pages 10-13 ........................................................................ 7-9
Item (C), page 13 and 14 ............................................................................9
Conclusion ...........................................................................................................9, 10
Prayer .......................................................................................................................10
Certificate of Service ...............................................................................................11
Certificate of Compliance ........................................................................................11
2 INDEX OF AUTHORITIES Page CASES
Cade vs. Cosgrove, 430 S.W.3d 488, (Tex. App.—Fort Worth 2014, pet. pending) ...............5, 10
City of Fort Worth vs. Pippen, 439 S.W.2d 660, 664 (Tex. 1969) ................................................................... 7
Computer Associates International, Inc. vs. Altai, Inc., 918 S.W.2d 453 (Tex. 1994) ................................................................. 4, 6, 10
Lesley vs. Veterans Land Board of Texas, 352 S.W.3d 479, 485, 86 (Tex. 2011) ...........................................................10
Martinka vs. Commonwealth Land Title Insurance Company, 836 S.W.2d 773, 777 (Tex. App.—Houston [1st Dist.] 1992 writ denied) ..... 7
3 RESPONDENT’S ANSWER TO PETITIONERS’ MOTION FOR REHEARING Gene Tipton, Respondent, answers Petitioners’ arguments presented in their
Motion for Rehearing as follows:
I.
Overview of Petitioners’ Motion
The motion for rehearing concentrates on the bar of the statute of limitations
against Petitioner’s claim first made in 2009 for reformation of a 1999 deed. The
issue in this case is not the effect of the statute of limitations but the application vel
non of the discovery rule as articulated in Altai1. From the beginning of this case,
Petitioners’ arguments have failed to recognize the substantial change in the
analysis and application of the discovery rule. Altai adds a gatekeeper predicate;
only after satisfying the “inherently undiscoverable” standard of review may the
question of who-knew-what-when be submitted to a jury. The legal issue is
reviewed de novo under the Altai standard of due diligence as embedded in the
inherently undiscoverable concept.
The Court of Appeals unanimously decided that the 1999 Deed was not
ambiguous, the “mistake” was not inherently undiscoverable, and Petitioners failed
to show due diligence as a matter of law.
1 Computer Associates International, Inc. vs. Altai, 918 S.W.2d 455 (Tex. 1994, opinion withdrawn, reissued 1996)
4 The Supreme Court, in denying the petition for review, determined that
Petitioners’ lack of due diligence as found by the Court of Appeals was the correct
application of the gatekeeper legal standard of review.
II.
Specific Responses to Petitioners’ Argument
This response will follow the organizational format of petitioners’ argument,
starting with item (A)(1), page 5.
Petitioners speculate that the denial of their petition for review is completely
dependent on the opinion in Cosgrove2. Petitioners seem to be filing a motion for
rehearing addressed to Cosgrove rather than to this case. Contrary to Petitioners’
motion, the Cosgrove case does not involve “…the application of the statutes of
limitation in deed reformation cases.” Cosgrove does clarify the application of the
discovery rule to deed reformations. Petitioners do not argue against the ruling of
the Supreme Court that the discovery rule does apply categorically to deed
reformation cases.
Petitioners make an inconsistent argument in stating that the deed in this
case is not a “so-plain-omission” issue. In the trial court, the Court of Appeals, and
the Supreme Court, Petitioners have heretofore argued that the “mutual mistake”
was plain and obvious because of the difference between the contract and the deed.
2 Cade vs. Cosgrove, 430 S.W.3d 488, (Tex. App.—Fort Worth 2014, pet. pending)
5 The Petitioners have now completely changed their theory of the case by arguing
that the reference in the 1999 Deed to “predecessors” somehow creates an
ambiguity that triggers the deferral of the discovery rule. Petitioners did not ask
for that ruling in the trial court and lost the ruling in the Court of Appeals. At this
point in their motion, Petitioners reargue pre-Altai precedent to support their
reasoning that even though none of them ever read the deed, they misunderstood
the word “predecessors” to include a mineral reservation to them. The Court of
Appeals correctly analyzed that argument as being defective. Petitioners’ case is
totally dependent upon their position as grantors that the deed (that they signed but
never read), allegedly left them with a subjective understanding that the word
“predecessors” reserved to minerals by them. They have morphed their argument
into that position because the deed itself contained a reference to minerals
outstanding in others at the time the deed was signed and delivered. This is a
specious argument.
Petitioners’ statement of the facts is not supported by the record.
Specifically, the comment in the footnote at the bottom of page 8 erroneously
assumes that Respondent knew there was a mistake in the deed at the time he
accepted and paid for it. If that is true, the better question is, “Why didn’t any of
the Petitioners also realize there had been a mistake in the deed and do something
about it within the four years allotted by law to correct an instrument?”
6 Item (B)(1), pages 9 and 10
Petitioners struggle mightily to blame the title company for the forged
deed. This ignores that the title company representative testified without
equivocation that the title company did not prepare or have anything to do with the
forged deed. Petitioners’ reliance on City of Fort Worth vs. Pippen, 439 S.W.2d
660, 664 (Tex. 1969) advancing the proposition that a title company owes a
general fiduciary duty to the parties to a transaction is simply incorrect. The
holding of that case is that if a title company accepts funds from a buyer which are
to be applied solely to pay for the purchase, the misappropriation by an employee
of the title company creates respondeat superior liability on the title company.
Martnika vs. Commonwealth Land Title Insurance Company, 836 S.W.2d 773,
777 (Tex. App.—Houston [1st Dist.] 1992 writ denied).
Petitioners next argue at this late date that the title company in this case
breached a fiduciary relationship to the Petitioners by authoring a deed that
Petitioners insist states the truth even though it was forged. There is no evidence in
the record that Respondent had anything to do with the forged deed. Since the
forged deed is contrary to his interests, why would he have prepared and filed a
deed that removed minerals from his ownership and gave them to Petitioners?
Item (B)(2), pages 10-13
Petitioners are desperate to explain why they should not be held responsible
7 for failure to read the deed they signed. Petitioners were not required to hire
attorneys to review the deed. (Even though the record shows that a draft of the
deed was sent to both attorneys). The argument that no one in a real estate
transaction should have to hire an attorney to advise them reveals petitioners’
failure to use due diligence even though being advised in the contract itself:
22. CONSULT YOUR ATTORNEY: Real estate licensees cannot give legal advice. This is intended to be a legally binding contract. READ IT CAREFULLY. If you do not understand the effect of this Contract, consult your attorney BEFORE signing. [Equally applicable to a deed!]
Immediately thereafter the Contract states, “Seller’s Attorney is: Cary J.
Cross/ L. KIp (sic) Schiller”. Please note that the Sale Contract on page 2 does not
even state a purchase price. See Plaintiffs’ Exhibit 1. The simple answer to
Petitioners’ question of whether every party to a real estate transaction should, in
the exercise of due diligence, hire a lawyer is unquestionably, “Yes”. The reason
for this response is that the failure to use an attorney to shepherd the transaction
and insure conformity between the contract and the deed is an obvious lack of due
diligence. There would be far less litigation over real estate matters if all parties to
a real estate transaction engaged attorneys from the beginning through the end of
the transaction. Those who fail to do so must suffer the consequences. This dispute
could have been prevented had the Petitioners used the attorneys they designated in
8 the contract. Petitioners argue that their failure to use their designated attorneys
excuses their failure to read the deed. This is patently an attempt to escape from
their failed responsibility to exercise due diligence.
Item (C), page 13 and 14
This item presents Petitioners’ final argument in a last attempt to support
their motion.
The title company is not a party to this litigation. Petitioners do not claim
that they have sued the attorney who prepared the “mistaken” deed. Any cause of
action against the title company would have to be predicated on negligence. The
preparation of a deed is the practice of law. The relationship between a title
company and a fee attorney preparing the deed is not normally an agency. This is
just another attempt by the Petitioners to deflect the obvious consequences of their
failure to use due diligence and try to push off such obligation onto anyone other
than themselves.
III.
Conclusion
The opinion of the Court of Appeals in this case was well written, well-
reasoned, and well substantiated by the record and precedent. It answers the
question of whether the petitioners failed to satisfy the gatekeeper role announced
9 in Altai. Cosgrove is informative on the law by reinforcing the “so plain” rule as
recently stated in Lesley 3.
PRAYER
Respondent asks the Court to deny Petitioners’ Motion for Rehearing.
Respectfully submitted,
KELSEY, KELSEY & HICKEY
By: /s/ RICHARD H. KELSEY State Bar No. 11244000 rkelsey@dentontexaslawyers.com JOHN E. KELSEY State Bar No. 00792620 jkelsey@dentontexaslawyers.com SCOTT W. HICKEY State Bar No. 00789371 shickey@dentontexaslawyers.com P.O. Box 918 Denton, Texas 76202-0918 Telephone: 940-387-9551 Metro: 940-243-2888 Facsimile: 940-387-9553
ATTORNEYS FOR GENE TIPTON
3 Lesley vs. Veterans Land Board of Texas, 352 S.W.3d 479, 485, 86 (Tex. 2011)
10 CERTIFICATE OF FILING AND SERVICE Pursuant to the Texas Rules of Appellate Procedure, the undersigned hereby certifies that on the 6th day of August, 2015, a true and correct copy of the foregoing is being filed with the Supreme Court of Texas and served via electronic service and/or facsimile as listed below:
Kathryn L. Shilling kshilling@shillinglawgroup.com 400 Providence Towers East 5001 Spring Valley Road Dallas, Texas 75244 (972) 638-8590 Facsimile Attorney for Petitioners
/s/ RICHARD H. KELSEY
CERTIFICATE OF COMPLAINCE WITH RULE 9.4 Pursuant to TEX. R. APP. P. 9.4(i)(3), I hereby certify that this above-styled document contains 1839 words (excluding the caption, identity of parties and counsel, table of contents, index of authorities, statement of the case, issues presented, statement of jurisdiction, signature, proof of service, certificate of compliance, and appendix). This is a computer-generated document created in Microsoft Word. In making this certificate of compliance, I am relying on the word count provided by the software used to prepare the document, excluding the parts of the petition that are exempted by TEX. SUP. CT. R. 33.1(d).