Bank of Texas, N.A. v. Ravkind
Dallas Court of Appeals, No. 05-11-01123-CV (March 12, 2013)
Justices Lang-Miers (Memo. Opinion), Myers, and Richter (by assignment)
Blankinship v. Brown,
Dallas Court of Appeals, No. 05-11-00649-CV (March 14, 2013)
Justices O’Neill (Opinion), Francis, and Murphy
The Court affirmed summary judgment in favor of defendants in two cases involving claims of negligent misrepresentation or fraud by attorneys. One case, Ravkind, focused on a lawyer’s alleged verification that he was the depository of client trust accounts totaling $1.2 million on which a lender relied in granting a mortgage to that client, which resulted in a foreclosure and financial loss by the lender. The second case, Blankinship, arose from a lawyer’s editing of a contract for his client, on which a non-client allegedly relied to its detriment.
The verification of deposit in Ravkind was addressed to Bright Mortgage, and in accordance with “industry practice,” subsequently presented to Bank of Texas, which relied on the verification in extending credit to the lawyer’s client. Following McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787 (Tex. 1999), and Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010), the court held that plaintiffs did not satisfy an essential element of a negligent misrepresentation claim against a professional, namely, “that the professional must have actual knowledge of the [specific] party to whom the information is provided and the purpose for which the information is provided.” It was not sufficient that the attorney anticipated that “a lender” would rely on his representation.
Plaintiffs in the Blankinship case sought to hold an attorney liable for misrepresentations by his client that were expressed in a contract edited by the attorney. Plaintiffs obtained a judgment against the client (Brown) for breach of contract, negligent misrepresentation, and fraud arising out of Brown’s entering into a business relationship with plaintiffs in violation of a non-compete agreement with a former employer without informing plaintiffs of that agreement. Parallel claims for fraud and negligent misrepresentation against Brown’s attorney were dismissed on summary judgment. The attorney’s only role was to review and revise Brown’s agreement with plaintiffs. The court of appeals affirmed, holding that plaintiffs could not satisfy the reliance element of fraud or negligent misrepresentation. “The non-client cannot rely on an attorney’s representations unless the attorney invites that reliance.” The court followed McCamish, 991 S.W.2d at 793-95, and Kastner v. Jenkens & Gilchrist, P.C., 231 S.W.3d 571 (Tex. App.—Dallas 2007, no pet.). “We again refuse to expand McCamish to the point that an attorney can be held liable for alleged misrepresentations when preparing legal documents, based on information provided by the client, that ended up in the hands of non-clients.”
