Julie Johnson v. Bank of America, N.A.

In The

Court of Appeals
Ninth District of Texas at Beaumont
_________________
NO. 09-12-00477-CV
NO. 09-13-00004-CV
_________________

JULIE JOHNSON, Appellant

V.

BANK OF AMERICA, N.A., Appellee
________________________________________________________________________

On Appeal from the 172nd District Court
Jefferson County, Texas
Trial Cause Nos. E-185,420 and E-185,420-A
________________________________________________________________________

MEMORANDUM OPINION

In this consolidated appeal, Julie Johnson appeals the trial court’s grant of

summary judgments favoring Bank of America, N.A. We affirm the trial court’s

judgments on all causes of action save and except that as to Johnson’s breach of

contract claim, which we reverse and remand to the trial court for further

proceedings consistent with this opinion.

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 I. Factual and Procedural Background

In August 2006, Johnson purchased a home and financed it by executing a

promissory note (the “Note”) secured by a deed of trust (the “Deed of Trust”).

Bank of America (“BOA”) was the owner and holder of the Note, the beneficiary

of the Deed of Trust, and the mortgage servicer. Under the terms of the Deed of

Trust, Johnson was required to obtain and maintain insurance on the home. To

fulfill her obligations under the Deed of Trust, Johnson contacted F.B. Taylor

Insurance & Real Estate Agency (“F.B. Taylor”) and purchased property

insurance, which included windstorm coverage through Texas Windstorm

Insurance Association (“TWIA”). Johnson paid the premium to renew her

windstorm policy annually. She paid her premium as part of her monthly mortgage

payment, which was deposited and maintained by BOA in an escrow account.

BOA was required to send payment to the agent, F.B. Taylor, who would then

issue separate payment of the annual premium amount to TWIA.

Johnson’s windstorm policy was scheduled to expire in September 2008. In

order to avoid a disruption in coverage, Johnson had to renew the policy before

September 12, 2008. BOA mailed Johnson’s renewal premium for her windstorm

policy from its office in Irvine, California to F.B. Taylor on September 4, 2008.

The check issued by BOA arrived at the F.B. Taylor office on September 10, 2008,

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at 5:08 p.m. On the morning of September 11, in anticipation of the landfall of

Hurricane Ike, the Jefferson County Judge announced a mandatory evacuation of

the county. F.B. Taylor did not mail the premium renewal check on September 11,

2008. The local post office was closed.

Johnson alleges that “[o]n or about September 12, 2008, in the late evening

going into the early morning hours of September 13, 2008,” Hurricane Ike

damaged her home. Sometime after the hurricane, Johnson filed a claim with

TWIA for her storm damages. TWIA, however, denied her claim because there

was no windstorm insurance coverage in effect for her property at the time the

hurricane allegedly damaged her home.

Johnson filed a lawsuit against F.B. Taylor, International Risk Control LLC,

Guy Fischer, and BOA. 1 Johnson asserted the following causes of action against

BOA: (1) negligence; (2) violation of the Texas Deceptive Trade Practices-

Consumer Protection Act (“DTPA”); (3) fraudulent misrepresentation; (4)

1
Johnson reached settlement agreements with F.B. Taylor, International
Risk Control LLC, and Guy Fischer and filed notices of nonsuit with prejudice as
to these defendants.

3
negligent misrepresentation; (5) breach of contract; (6) breach of fiduciary duty;

(7) fraud; and (8) conspiracy to commit fraud. 2

On May 3, 2012, BOA filed a traditional and no-evidence motion for

summary judgment. In support of its motion, BOA attached copies of the Note and

Deed of Trust. BOA also attached excerpts from the depositions of Johnson,

George Taylor, and Stephen Grzeskowiak.

Johnson responded to BOA’s motion for summary judgment on May 23,

2012. In support of her response, Johnson submitted excerpts from her deposition,

excerpts from the depositions of George Taylor and Stephen Grzeskowiak, a sworn

affidavit and report from Terry Shipman, and a sworn affidavit and report from

Walter Carter.

2
We note that Johnson did not file her Third Amended Petition until May
23, 2012, after the deadline indicated on the docket control order. Johnson filed a
motion for leave to file her Third Amended Petition on July 9, 2012. The record
does not reflect whether leave of court was granted; however, the trial court
granted summary judgment in favor of BOA on Johnson’s fiduciary duty cause of
action, which Johnson added in the Third Amended Petition. The parties have not
raised any error on appeal concerning the late amended petition. Because it appears
from the record that the trial court considered the amended pleading, we presume
that Johnson filed her amended pleading with leave of court. See Goswami v.
Metro. Sav. & Loan Ass’n, 751 S.W.2d 487, 490 (Tex. 1988) (“Texas courts have
held that in the absence of a sufficient showing of surprise by the opposing party,
the failure to obtain leave of court when filing a late pleading may be cured by the
trial court’s action in considering the amended pleading.”).
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 After holding a hearing on BOA’s motion, the trial court granted an

interlocutory summary judgment as to all of Johnson’s claims. However, after

BOA filed its motion for summary judgment and before the hearing on such

motion, Johnson amended her petition to include a claim for breach of fiduciary

duty, which BOA’s first motion for summary judgment did not address. As such,

Johnson filed a motion to set aside the summary judgment as to her breach of

fiduciary duty claim. The record does not reflect whether the trial court granted

Johnson’s motion. However, on August 15, 2012, BOA filed a no-evidence and

traditional motion for summary judgment as to Johnson’s breach of fiduciary duty

claim. As evidence supporting her response, Johnson attached her sworn affidavit.

After granting BOA’s motion to strike Johnson’s affidavit, the trial court also

granted BOA’s motion for summary judgment as to Johnson’s breach of fiduciary

duty claim. The trial court did not specify the grounds on which it granted either

summary judgment.

Johnson timely appealed each of the trial court’s judgments. We

consolidated the appeals. In her appellate brief, Johnson raises fourteen issues for

our consideration. In her first issue, Johnson complains that the trial court erred in

granting summary judgment in favor of BOA. However, in her argument of this

issue, Johnson just states the legal standards governing review of summary

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judgments. We therefore overrule Johnson’s first issue. See Tex. R. App. P.

38.1(i) (“The brief must contain a clear and concise argument for the contentions

made, with appropriate citations to authorities and to the record.”) In her second,

third, and fourth issues, Johnson essentially challenges whether BOA conclusively

established that it did not breach the Deed of Trust or, alternatively, that any

breach did not cause Johnson’s injuries. In her fifth issue, Johnson contests

whether BOA conclusively established that the economic loss rule bars all of her

non-contractual claims. In her sixth issue, Johnson challenges whether BOA

conclusively established its limitations defense. Because BOA did not reassert its

limitations defense on appeal as a basis for summary judgment, we need not

address Johnson’s sixth issue. In her seventh issue, Johnson challenges whether

BOA conclusively established that Johnson is not a consumer under the DTPA. In

her eighth, ninth, tenth, eleventh, twelfth, thirteenth, and fourteenth issues,

respectively, Johnson challenges whether BOA raised a fact issue as to her breach

of contract, negligence, negligent misrepresentation, DTPA, fraud, conspiracy, and

breach of fiduciary duty claims. We note that with regard to the thirteenth issue

challenging the trial court summary judgment on her conspiracy claim, Johnson

makes no substantive argument in her brief regarding her framed issue. We

therefore overrule Johnson’s thirteenth issue. See Tex. R. App. P. 38.1(i)

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 II. Standards of Review

We review a trial court’s grant of summary judgment de novo. Buck v.

Palmer, 381 S.W.3d 525, 527 (Tex. 2012). If the trial court does not specify the

grounds for its summary judgment, as is the case here, we must affirm the

summary judgment if any of the theories presented to the trial court and preserved

for appellate review are meritorious. See State v. Ninety Thousand Two Hundred

Thirty-Five Dollars & No Cents in U.S. Currency, 390 S.W.3d 289, 292 (Tex.

2013); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex.

2003).

A no-evidence motion for summary judgment under Rule 166a(i) must

challenge at least one specific element of the opponent’s claim or defense on which

the opponent will have the burden of proof at trial. Tex. R. Civ. P. 166a(i). The

opponent must then present summary judgment evidence raising a genuine issue of

material fact to support the challenged elements. Id. “The court must grant the

motion unless the respondent produces summary judgment evidence raising a

genuine issue of material fact[]” on the challenged elements. Id. A genuine issue of

material fact exists if the nonmovant produces more than a scintilla of evidence

establishing the existence of the challenged element. Fort Worth Osteopathic

Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004).

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 To prevail on a traditional motion for summary judgment, a defendant must

conclusively negate at least one essential element of each of the plaintiff’s causes

of action or must conclusively establish each element of an affirmative defense.

Tex. R. Civ. P. 166a(c); Long Distance Int’l, Inc. v. Telefonos de Mexico, S.A. de

C.V., 49 S.W.3d 347, 350-51 (Tex. 2001). The defendant bears the burden to prove

its entitlement to summary judgment as a matter of law. Roskey v. Tex. Health

Facilities Comm’n, 639 S.W.2d 302, 303 (Tex. 1982).

In reviewing both a traditional and no-evidence summary judgment, we

consider the evidence in the light most favorable to the nonmovant. See Nixon v.

Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985) (traditional); see also

Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009) (no-evidence). We credit

evidence favorable to the nonmovant if a reasonable fact-finder could, and we

disregard evidence contrary to the nonmovant unless a reasonable fact-finder could

not. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844,

848 (Tex. 2009).

III. Evidentiary Complaints

As a preliminary matter, we address Johnson’s challenges to the evidentiary

rulings made by the trial court to determine whether we can appropriately consider

certain evidence in analyzing Johnson’s substantive contentions. We review the

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trial court’s evidentiary rulings under an abuse of discretion standard. In re J.P.B.,

180 S.W.3d 570, 575 (Tex. 2005). A trial court abuses its discretion when it acts

without regard to any guiding rules or principles. Downer v. Aquamarine

Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Unless an erroneous

evidentiary ruling probably caused rendition of an improper judgment, we will not

overturn the trial court’s ruling. Horizon/CMS Healthcare Corp. v. Auld, 34

S.W.3d 887, 906 (Tex. 2000).

BOA made a number of written objections to certain evidence Johnson

relied on in opposition to BOA’s first motion for summary judgment. However,

BOA failed to obtain a ruling on these objections before the trial court entered

judgment on this motion. “‘Generally, a party is required to obtain an express

ruling on its objections to summary judgment evidence.’” Atl. Shippers of Tex.,

Inc. v. Jefferson Cnty., 363 S.W.3d 276, 284 (Tex. App.—Beaumont, 2012, no

pet.) (quoting Pink v. Goodyear Tire & Rubber Co., 324 S.W.3d 290, 300 (Tex.

App.—Beaumont 2010, pet. dism’d)). “Evidence that has been objected to remains

part of the summary judgment proof unless an order sustaining the objection is

reduced to writing, signed, and entered of record.” Mitchell v. Baylor Univ. Med.

Ctr., 109 S.W.3d 838, 842 (Tex. App.—Dallas 2003, no pet.). Because BOA did

9
not obtain a ruling on its objections to Johnson’s summary judgment evidence,

BOA waived its objections to the evidence. See Tex. R. App. P. 33.1(a).

BOA also made a number of written objections to evidence relied on by

Johnson in opposition to BOA’s motion for summary judgment as to Johnson’s

breach of fiduciary duty claim. The trial court expressly sustained those objections.

Because we resolve the breach of fiduciary duty issue without reference to the

evidence, we need not address Johnson’s complaint that the trial court abused its

discretion in granting BOA’s objections.

IV. Breach of Contract

Johnson contends that the trial court erred in granting summary judgment on

her breach of contract claim against BOA. She argues that she raised a fact issue as

to whether BOA breached the Deed of Trust by failing to timely forward funds

from her escrow account to F.B. Taylor for the renewal premium of her windstorm

policy. After reviewing the summary judgment record in a light most favorable to

Johnson, we conclude that Johnson has presented more than a scintilla of evidence

that BOA breached its Deed of Trust with Johnson.

A. Preservation of Error

BOA contends that Johnson’s argument that timeliness is a question of fact

that depends on whether the disbursement was made within a reasonable time was

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not presented to the trial court and thus not preserved for appeal. To preserve a

complaint for appellate review, a party must make a timely request, objection, or

motion with sufficient specificity to notify the trial court of the complaint and to

afford the trial court an opportunity to rule on the objection. Tex. R. App. P.

33.1(a)(1)(A). With the exception of challenging the legal sufficiency of a

summary judgment, a “non-movant must expressly present to the trial court, by

written answer or response, any issues defeating the movant’s entitlement[]” to

summary judgment to preserve the right to appeal. McConnell v. Southside Indep.

Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993); see also City of Houston v. Clear

Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979) (holding that failure to

“expressly present to the trial court those issues that would defeat the movant’s

right to a summary judgment” waives complaint); see also Tex. R. Civ. P. 166a(c)

(“Issues not expressly presented to the trial court by written motion, answer or

other response shall not be considered on appeal as grounds for reversal.”).

In response to BOA’s motion for summary judgment on the breach of

contract claim, Johnson argued,

[T]here is ample evidence of the fact that [BOA] did not [comply]
with its duty under the contract to ensure that adequate payment was
issued in order for [Johnson’s] policy to be renewed. For example,
[BOA]’s corporate representative admitted that the average regular
mail transit time is eight (8) days; however, [BOA] sent by regular
mail the payment for [Johnson’s] renewal of her insurance policy on
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 September 4, 2008, even though [F.B.] Taylor’s invoice specifically
requested that the check be at [F.B.] Taylor’s office by September 7,
2008, and [BOA] was capable of sending the check via overnight mail
and in fact had done it previously. A simple math calculation shows
that if the average regular mail transit time is eight (8) days, and
[BOA] sent [F.B.] Taylor the payment for [Johnson’s] policy renewal
on September 4, 2008, it is obvious that [Johnson’s] policy could not
have been renewed. Thus, there is sufficient evidence of the fact that
[BOA] did not comply with its duty under the contract by failing to
send the payment for [Johnson’s] premium of the insurance policy in
a timely manner so the policy could be renewed.

Throughout her response, Johnson cited to portions of the summary judgment

record to support her argument that BOA did not remit payment in a timely manner

for F.B. Taylor to process the payment. Johnson specifically raised the issue to the

trial court that BOA did not timely remit the escrow funds under the Deed of Trust.

We conclude that Johnson fairly apprised BOA and the trial court of the issue

Johnson now contends should defeat BOA’s motion—i.e., BOA did not timely

perform its obligations under the Deed of Trust. See Clear Creek, 589 S.W.2d at

678.

B. Breach of Contract Cause of Action

To prevail on a breach of contract claim, a plaintiff must prove (1) the

existence of a valid contract; (2) the plaintiff’s performance or tender of

performance; (3) the defendant’s breach; and (4) the plaintiff’s damages resulting

from the breach. Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 677 (Tex. App.—

12
Houston [1st Dist.] 2008, pet. denied); Sullivan v. Smith, 110 S.W.3d 545, 546

(Tex. App.—Beaumont 2003, no pet.). “A breach of contract occurs when a party

fails to perform an act that it has expressly or impliedly promised to perform.”

Case Corp. v. Hi-Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 769-70 (Tex.

App.—Dallas 2005, pet. denied). Neither party contests the validity of the Deed of

Trust. There is also no allegation that Johnson failed to perform her obligations

under the Note or Deed of Trust. The parties’ basic obligations under the Deed of

Trust are likewise not in dispute. The real point of contention is whether BOA

timely performed its obligation under the Deed of Trust to remit premium funds to

F.B. Taylor. To determine if BOA failed to perform its contract obligations timely,

we must construe the relevant language in the Deed of Trust.

C. Rules of Contract Construction

We interpret a deed of trust according to the ordinary rules of contract

interpretation. Fin. Freedom Sr. Funding Corp. v. Horrocks, 294 S.W.3d 749, 753

(Tex. App.—Houston [14th Dist.] 2009, no pet.). Our primary concern in

interpreting a contract is ascertaining the true intent of the parties. Italian Cowboy

Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). In

so doing, “‘we must examine and consider the entire writing in an effort to

harmonize and give effect to all the provisions of the contract so that none will be

13
rendered meaningless.’” Id. (quoting J.M. Davidson, Inc. v. Webster, 128 S.W.3d

223, 229 (Tex. 2003)). To understand the parties’ intent we must examine the

agreement as a whole in light of the circumstances present at the time when the

parties entered into the agreement. Anglo-Dutch Petrol. Int’l, Inc. v. Greenberg

Peden, P.C., 352 S.W.3d 445, 450-51 (Tex. 2011). No single provision taken alone

should control—instead, we must consider all provisions with reference to the

entire agreement. J.M. Davidson, 128 S.W.3d at 229. We also consider the

particular business activity to be served, and when possible and proper, we avoid a

construction that is unreasonable, inequitable, and oppressive. Frost Nat’l Bank v.

L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005). We begin our analysis

with the contract’s express language. Italian Cowboy, 341 S.W.3d at 333.

D. Relevant Provisions of the Deed of Trust

Under the “Uniform Covenants” of the Deed of Trust, the subparagraph

titled “Funds for Escrow Items” provides:

Borrower shall pay to Lender on the day Periodic Payments are due
under the Note, until the Note is paid in full, a sum (the “Funds”) to
provide for payment of amounts due for: (a) taxes and assessments
and other items which can attain priority over this Security Instrument
as a lien or encumbrance on the Property; (b) leasehold payments or
ground rents on the Property, if any; (c) premiums for any and all
insurance required by Lender under Section 5; and (d) Mortgage
Insurance premiums, if any, or any sums payable by Borrower to
Lender in lieu of the payment of Mortgage Insurance premiums in

14
 accordance with the provisions of Section 10. These items are called
“Escrow Items.”
….
The Funds shall be held in an institution whose deposits are
insured by a federal agency, instrumentality, or entity (including
Lender, if Lender is an institution whose deposits are so insured) or in
any Federal Home Loan Bank. Lender shall apply the Funds to pay
the Escrow Items no later than the time specified under RESPA.
The Deed of Trust defines “RESPA” as “the Real Estate Settlement Procedures

Act (12 U.S.C. Section 2601 et seq.) and its implementing regulation, Regulation

X (24 C.F.R. Part 3500), as they might be amended from time to time, or any

additional or successor legislation or regulation that governs the same subject

matter.” The Deed of Trust further provides that the use of the acronym “RESPA”

in the agreement “refers to all requirements and restrictions that are imposed in

regard to a ‘federally related mortgage loan’ even if the Loan does not qualify as a

‘federally related mortgage loan’ under RESPA.”

E. Construction of the Deed of Trust

BOA argues that under the Deed of Trust, the parties reached an express

agreement on the time for performance. However, as indicated above, the Deed of

Trust does not specifically state a date or deadline for BOA’s timely remittance of

the premium payment. Instead, the Deed of Trust provides that BOA shall remit

the funds “no later than the time specified under RESPA.” RESPA, in turn,

15
provides that servicers who collect funds from borrowers for deposit into an

escrow account for the purpose of paying taxes, insurance premiums, and other

charges “shall” make those payments “in a timely manner as such payments

become due.” 12 U.S.C. § 2605(g). The statute does not define “in a timely

manner[.]” Id. The U.S. Consumer Financial Protection Bureau (“CFPB”)

construes “[t]imely payment” in its regulations interpreting RESPA.3 12 C.F.R. §

1024.17(k) (2014). The CFPB provides that timely payment requires the servicer to

pay disbursements “in a timely manner, that is, on or before the deadline to avoid a

penalty[.]” 12 C.F.R. § 1024.17(k)(1). This regulation clearly implies that there is a

direct relation between the timeliness of a payment and whether a penalty can be

avoided. See id.

BOA contends the Deed of Trust provides that it has timely performed if it

delivers the funds to the insurance agent before the deadline renewal date.

However, neither the statute nor the regulation supports this interpretation. The

3
Because the alleged breach of contract occurred in 2008, the RESPA
provisions and interpreting regulations existing then are applicable to our analysis.
However, because there were no material changes in the relevant portions of the
applicable statute or regulations, we will cite to their current versions. The CFPB
regulations are the current operative regulations interpreting RESPA, and the
Department of Housing & Urban Development’s regulations (previously found at
24 C.F.R. Part 3500) have been withdrawn pursuant to Title X of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. See 79 Fed. Reg. 34224 (June
16, 2014).
16
Deed of Trust requires Johnson to obtain insurance coverage for the property to

protect BOA’s collateral. The desired outcome of the provision, while not

expressly stated, seems obvious—to prevent a lapse in insurance coverage. BOA’s

interpretation does not further this goal. Rather, under BOA’s interpretation, a

servicer’s performance would be considered “timely” even if the servicer delivered

the funds to the agent at such a time that the agent only had minutes to process the

check and forward it to TWIA before the policy’s expiration. The timeliness of the

payment does not depend on when F.B. Taylor—an agent with no authority to bind

coverage—receives the payment, but rather, timeliness depends on when TWIA

receives payment. We refuse to interpret the Deed of Trust’s provision in such a

way as to be unreasonable or lead to absurd results. See Frost Nat’l Bank, 165

S.W.3d at 312; see also Avasthi & Assocs., Inc. v. Banik, 343 S.W.3d 260, 264

(Tex. App.—Houston [14th Dist.] 2011, pet. denied) (citing Lane v. Travelers

Indem. Co., 391 S.W.2d 399, 402 (Tex. 1965)).

We conclude that the Deed of Trust does not fix a specific time for BOA’s

performance, and, as such, BOA’s disbursement of funds must be reasonable. See

Valencia v. Garza, 765 S.W.2d 893, 897 (Tex. App.—San Antonio 1989, no writ).

“[W]hen a contract is silent regarding the date for an action to be taken, the court[]

will construe the contract as requiring such action be taken within a reasonable

17
time.” Hewlett-Packard Co. v. Benchmark Elecs., Inc., 142 S.W.3d 554, 563 (Tex.

App.—Houston [14th Dist.] 2004, pet. denied). Reasonableness depends on the

facts and circumstances as they existed at the time the parties formed the contract.

CherCo Props., Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262, 266 (Tex.

App.—Fort Worth 1999, no pet.). Whether a party performed within a reasonable

amount of time is usually a question for the trier of fact. Hewlett-Packard, 142

S.W.3d at 563; GNG Gas Sys., Inc. v. Dean, 921 S.W.2d 421, 429 (Tex. App.—

Amarillo 1996, writ denied).

BOA contends that Johnson’s repeated admissions that BOA complied with

its loan agreement with her conclusively establishes that BOA timely performed

under the Deed of Trust. We look at the testimony on which BOA relies in

context. 4 BOA’s counsel asked Johnson if she believed the following allegation in

her pleading was true:

4
In BOA’s motion for summary judgment, BOA references other portions
of Johnson’s deposition transcript and even quotes portions at length. However,
we note that several of the referenced transcript pages were not attached in the
summary judgment evidence. Pleadings do not constitute summary judgment
evidence. Madeksho v. Abraham, Watkins, Nichols & Friend, 57 S.W.3d 448, 455
(Tex. App.—Houston [14th Dist.] 2001, pet. denied). Thus, the quotations and
corresponding allegations made by BOA in its motion do not constitute summary
judgment evidence. See id. Even if we did consider the testimony cited in the
additional references, it would not change our opinion because the testimony only
reiterates Johnson’s testimony considered and described in this opinion.
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 Alternatively, BOA failed to make monies available in a timely
fashion so that F.B. Taylor could purchase a Texas Windstorm
Insurance Association policy to cover the Property from windstorm
damages. BOA failed to make the money available from Plaintiff’s
escrow despite F.B. Taylor’s request that it do so within time to renew
Plaintiff’s Texas Windstorm Insurance Association homeowner’s
policy.

Johnson responded, “Um-hum.” She then stated, “I believe Bank of America had

the money.” When asked if she believed that BOA failed to make the money

available, she responded, “[n]o, I don’t.” When asked if she knew when BOA

made the money available, Johnson replied, “I know that I spoke with the lady that

told me that the money was made available on September 3rd that—” Johnson also

testified as follows:

Q. Okay. And that’s the money that you had given Bank of
America to send to F.B. Taylor to pay your premiums?
A. That’s correct.
Q. Okay. And as part of this understanding that F.B. Taylor
would keep your insurance in force, did you also assure F.B. Taylor
that you would make sure they were provided with the money
necessary to keep your insurance in force?
….
A. Yes.
Q. And was that done in September of 2008 with regard to
your windstorm policy?
A. Was what done?
Q. Was the money provided to F.B. Taylor in time for them to
keep it in force?
A. Yes.
Q. And you believe that based on them having received the
money on the 10th, right?
A. They received the money before the policy lapsed, yes.
19
Johnson recalled that Janice at F.B. Taylor told her that she had the money from

BOA but did not send it off before evacuating for the hurricane. Janice did not tell

Johnson when F.B. Taylor received the money or why it was not sent to TWIA

before the hurricane. Janice did not tell Johnson anything about whether it could

have been sent or how it would have been sent. Johnson also recalled that she had a

conversation with George Taylor at F.B. Taylor in June of 2009. She recalled that

Taylor told her “he had been assured that everything had been taken care of before

they shut down their office and evacuated for the hurricane.” She believes that his

statement to her included his beliefs about her policy specifically and the business

generally. She recalled that eventually George Taylor told her that there was no

insurance and “[i]t was on him to make it right.”

BOA also argues that F.B. Taylor’s purported admission that it timely

received the renewal check from BOA, but failed to forward the payment to TWIA

conclusively establishes that BOA timely performed. George Taylor testified on

behalf of F.B. Taylor. He indicated that under the TWIA rules, if a check is mailed

on or before the expiration date of the policy, it will renew the policy. He testified

that Johnson’s policy expired on September 12, 2008 at 12:01 a.m. He received the

check from BOA on September 10, 2008. He acknowledged that no one from his

20
office went to the post office on September 11, 2008, but had the check been

mailed on September 11, 2008, the windstorm policy would have been renewed.

The testimony relied on by BOA does not conclusively establish that the

timeliness of BOA’s disbursement of funds was reasonable under the

circumstances. We note that BOA does not argue that Johnson’s alleged

“admissions” amount to judicial admissions. Even assuming for the sake of

argument that Johnson’s testimonial statements amounted to judicial admissions

regarding BOA’s timeliness in disbursing the premium payments, BOA failed to

preserve its right to rely on the admissions as judicial admissions by failing to

object and obtain a ruling on subsequent controverting evidence. See Marshall v.

Vise, 767 S.W.2d 699, 700 (Tex. 1989) (holding that plaintiff waived his right to

rely upon his opponent’s admissions because those admissions were controverted

by testimony admitted at trial without objection); Hurlbut v. Gulf Atl. Life Ins. Co.,

749 S.W.2d 762, 765 (Tex. 1987) (holding that defendants could not benefit from

purported judicial admission when they failed to timely object to jury issue that

was contrary to facts admitted in plaintiffs’ pleadings); Houston First Am. Savings

v. Musick, 650 S.W.2d 764, 769 (Tex. 1983) (explaining that the party relying on

an admission by an opponent must protect the record by objecting to the

introduction of evidence contrary to the admission and by objecting to the

21
submission of any issue bearing on the fact admitted). Here, as explained above,

BOA failed to obtain rulings on its objections to Johnson’s summary judgment

evidence supporting her breach of contract claim. Even if BOA had obtained

rulings on its objections, BOA never objected to Johnson’s evidence on the ground

that it was contrary to Johnson’s purported judicial admissions. Thus, BOA did not

timely protect its reliance, if any, on Johnson’s purported judicial admissions.

Further, when we look at the context and totality of the statements BOA

labels as admissions, we cannot say they conclusively establish that BOA met its

obligations under the Deed of Trust. At most, Johnson testified that she believed

F.B. Taylor received the premium payment in time to prevent a lapse in her

coverage because F.B. Taylor “received the money before the policy lapsed[.]”

The fact that F.B. Taylor received the payment before the policy expired is

undisputed and is not contrary to an essential fact embraced by Johnson’s claim.

Additionally, this fact alone does not conclusively establish that BOA met its

obligations under the Deed of Trust to timely disburse the premium payments. As

explained above, the Deed of Trust requires BOA to do more than just remit the

funds before the expiration of the policy. Furthermore, Johnson’s belief that F.B.

Taylor had time to fulfill its obligations to her because F.B. Taylor received the

payment before the policy’s expiration is nothing more than the impression she

22
gathered in litigating her case. Her purported admission, which she quantified as

being based on the fact that F.B. Taylor received the payment before the policy’s

expiration, did not eliminate the possibility that she could be mistaken about her

belief of F.B. Taylor’s ability to process the payment timely. Taylor’s testimony, at

most, establishes that had he been able to place a check to TWIA in the mail on

September 11, 2008, Johnson’s windstorm policy would have been renewed. The

statements BOA relies on are not conclusive as to the breach of contract issue.

Johnson countered BOA’s evidence with evidence that BOA’s delay in

sending the funds to F.B. Taylor made it impossible for F.B. Taylor to timely

renew the policy. Taylor testified that his office received the check from BOA on

September 10, 2008 at 5:08 p.m. According to Taylor, his office did not receive

the check from BOA in sufficient time to process it to prevent a lapse in coverage.

His specific testimony follows:

Q. If your office received this check on September 10th, as is
indicated by that stamp, would you [have] had sufficient time to
renew Ms. Johnson’s Texas Windstorm policy to where she wouldn’t
have had a lapse in coverage during Hurricane Ike?
A. No.
Q. And why not?
A. Because we didn’t receive it in time to process it.
Q. Tell me . . . more about that. What do you mean by process it?
A. Once we get the check, we have to deposit the check. We have to
reissue our check. We can’t send this check in.
….

23
 Q. Is there anything that would have prevented you from sending a
check with your own upon receipt of this in order no [sic] bind the
policy?
A. I didn’t get this check until about 5:08, as I remember, in the
afternoon.
Q. Okay.
A. My office was closed. The post office was closed. My computers
were turned down. Everybody was gone. It was impossible to get this
done.
Q. And where did you go when you evacuated?
….
A. Baton Rouge, Louisiana.
Q. Baton Rouge. Were the post offices functioning there?
A. I don’t know.

Taylor also testified:

Q. And then a check would be cut by F.B. Taylor for renewal of that
premium.
A. Correct.
Q. Which would then be deposited in the mail on that –
A. That afternoon.
Q. –afternoon mail. So, the turn-around time is typically 24 hours.
A. Yes.

While the complete context of this line of questioning is not in the summary

judgment record, what is present seems to imply that typically F.B. Taylor can

process a check from the lender in twenty-four hours.

Johnson contends that BOA knew that time was of the essence because BOA

knew Johnson’s policy expired on September 12. BOA’s corporate representative,

Grzeskowiak, testified that BOA’s automated system notified BOA on September

3 that Johnson’s policy would expire September 12. BOA mailed the check to F.B.
24
Taylor on September 4. Grzeskowiak testified that in his experience it takes

approximately eight days for a check to arrive in the agency’s office after BOA

mails it. He agreed that if BOA mailed the check on September 4, BOA could

foresee that the check would not arrive at F.B. Taylor until September 12, the same

day the policy expired. Grzeskowiak testified that it is standard business practice to

send the escrow checks to the agent so that the agent receives the check five days

before the expiration of the insurance policy. He further testified that this five-day

rule was BOA’s practice. Grzeskowiak acknowledged that F.B. Taylor sent BOA a

letter, which was in BOA’s system indicating that F.B. Taylor needed to have the

payment in its office five days before September 12, 2008 in order to keep the

policy in effect. He also acknowledged that BOA did not send the escrow check

early enough for it to arrive at the F.B. Taylor office five days before Johnson’s

policy expired. As such, the summary judgment evidence raises a genuine issue of

material fact as to whether BOA breached its contractual duties under the Deed of

Trust to timely remit funds in a reasonable manner when BOA’s remittance of the

escrow funds failed to comply with standard business practice, failed to comply

with BOA’s own policy, and failed to comply with the express instructions F.B.

Taylor provided BOA.

25
 BOA also argues that it conclusively established that F.B. Taylor, not BOA,

was the sole cause of Johnson’s damages. BOA cites to Johnson’s deposition

testimony that Taylor had informed her that the property was uninsured and it “was

on him to make it right[.]” BOA essentially argues that this testimony established

that F.B. Taylor’s actions were the sole cause of Johnson’s damages. However,

Taylor’s testimony, when viewed in the light most favorable to Johnson, supports

that BOA’s untimely remittance of the funds made it impossible for F.B. Taylor to

pay the TWIA premium timely. We conclude that the evidence demonstrates that

Johnson has raised a genuine issue of material fact as to whether BOA’s untimely

payment caused the lapse in Johnson’s TWIA coverage.

Viewing the evidence in a light most favorable to Johnson, we conclude that

BOA has not conclusively established that it did not breach the Deed of Trust and

that its actions were not a cause of Johnson’s injuries, and that Johnson has raised a

genuine issue of material fact on these issues, which preclude summary judgment.

We sustain Johnson’s second, third, fourth, and eighth issues inasmuch as they

relate to the issues discussed above regarding the breach of contract claims.

V. Negligence and Negligent Misrepresentation

Johnson contends that BOA failed to establish conclusively that her

negligence and negligent misrepresentation claims were barred by the economic

26
loss rule. In Sharyland Water Supply Corp. v. City of Alton, the Texas Supreme

Court explained that the “‘economic loss rule’” is “something of a misnomer[.]” 5

354 S.W.3d 407, 415 (Tex. 2011). However, a basic understanding of the rule, as

applicable to this case, is that a party should only be able to recover in contract and

not in tort when the injury is limited purely to economic losses suffered to the

subject matter of a contract. James J. Flanagan Shipping Corp. v. Del Monte Fresh

Produce N.A., Inc., 403 S.W.3d 360, 365 (Tex. App.—Houston [1st Dist.] 2013,

no pet.).

Texas courts have generally applied the economic loss rule in cases

involving defective products and in cases involving the failure to perform a

contract. Sharyland, 354 S.W.3d at 418. The economic loss rule has also been

applied in cases involving claims for negligent misrepresentation. See D.S.A., Inc.

v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662, 663-64 (Tex. 1998) (per curiam).

To determine whether the economic loss rule applies, we consider “‘both the

source of the defendant’s duty to act (whether it arose solely out of the contract or

from some common-law duty) and the nature of the remedy sought by the
5
“‘[T]here is not one economic loss rule broadly applicable throughout the
field of torts, but rather several more limited rules that govern recovery of
economic losses in selected areas of the law.’” Sharyland, 354 S.W.3d at 415
(quoting Vincent R. Johnson, The Boundary–Line Function of the Economic Loss
Rule, 66 WASH. & LEE L. REV. 523, 534-35 (2009)).

27
plaintiff.’” Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc.,

960 S.W.2d 41, 45 (Tex. 1998) (quoting Crawford v. Ace Sign, Inc., 917 S.W.2d

12, 13 (Tex. 1996)). We look at the substance of the cause of action and not simply

the manner in which it was pleaded to determine the type of action that is brought.

Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 617-18 (Tex. 1986). “The nature

of the injury most often determines which duty or duties are breached. When the

injury is only the economic loss to the subject of a contract itself, the action sounds

in contract alone.” Id. at 618. In some circumstances, a party’s actions may breach

duties simultaneously in contract and in tort. See id. To maintain a separate tort

action, the plaintiff must show that he has “suffered an injury that is distinct,

separate, and independent from the economic losses recoverable under a breach of

contract claim.” Sterling Chems., Inc. v. Texaco Inc., 259 S.W.3d 793, 797 (Tex.

App.—Houston [1st Dist.] 2007, pet. denied) (citing D.S.A. Inc., 973 S.W.2d at

664).

A. Negligence

Johnson generally responds to BOA’s economic loss argument by claiming

that she is not seeking to recover economic losses but rather she is seeking to

recover the costs of repairing her home. However, there is no allegation that

BOA’s actions or inactions caused the actual damage to her home. Johnson alleges

28
that Hurricane Ike damaged her home. The foundation of Johnson’s complaint is

that she was denied insurance proceeds because BOA failed to carry out its

obligation under the Deed of Trust to timely disburse her escrow payment. BOA’s

failure to disperse the escrow funds timely did not cause the damage to Johnson’s

home, Hurricane Ike did. Johnson’s injury is the loss of insurance proceeds that she

allegedly would have received if BOA had fulfilled its obligations under the Deed

of Trust.

The gravamen of Johnson’s negligence complaint is that BOA had a duty to

timely disburse Johnson’s windstorm policy premium and failed to do so. The

subject matter of the contract provision at issue in this case was BOA’s timely

disbursement of escrow funds. The injury suffered by Johnson is an economic loss

to the subject matter of the contract—the denial of insurance coverage because of

BOA’s failure to timely pay premiums.

Johnson argues for the first time on appeal that her tort claims do not solely

arise from contract obligations, but also under federal law. Specifically, she argues

that BOA had a duty to timely forward the escrowed premium payments to F.B.

Taylor under RESPA. Because Johnson did not raise this argument with the trial

court, she has waived this argument. See Tex. R. App. P. 33.1; Tex. R. Civ. P.

166a(c) (“Issues not expressly presented to the trial court by written motion,

29
answer[,] or other response shall not be considered on appeal as grounds for

reversal.”). Even if she had raised this argument to the trial court, Johnson has not

alleged a cause of action or sought relief under RESPA, or alleged BOA had a duty

under RESPA.

Johnson has failed to show that she suffered an injury that is distinct,

separate, and independent from the economic losses recoverable under her breach

of contract claim. Johnson’s negligence claim is a recasting of her claim for

economic loss for breach of contract and is precluded by the economic loss rule.

See Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991) (holding

where the only duty between the parties arises from a contract, a breach of that

duty will ordinarily sound only in contract, not in tort). We overrule Johnson’s

fifth and ninth issues inasmuch as they concern claims for negligence.

B. Negligent Misrepresentation

The burden to prove an independent injury is on the plaintiff claiming

negligent misrepresentation. Plano Surgery Ctr. v. New You Weight Mgmt. Ctr.,

265 S.W.3d 496, 503 (Tex. App.—Dallas 2008, no pet.). In support of her

negligent misrepresentation claim, Johnson argues that BOA falsely represented to

her that “her insurance policy would be paid on time with the funds deposited by

Plaintiff in her escrow account.” However, the duty to timely pay the funds out of

30
Johnson’s escrow account arises under the Deed of Trust and falls within the

pleaded breach of contract claim. Therefore, any injury due to negligent

misrepresentation is not independent of the damages for breach of contract. See

Blue Star Operating Co. v. Tetra Techs., Inc., 119 S.W.3d 916, 922 (Tex. App.—

Dallas 2003, pet. denied). We overrule Johnson’s fifth and tenth issues inasmuch

as they concern claims for negligent misrepresentation.

VI. Violations of the DTPA

Johnson contends that BOA failed to establish conclusively that her DTPA

claims were barred by the economic loss rule. In her petition, Johnson alleges that

BOA’s conduct constitutes multiple violations of the DTPA. See Tex. Bus. &

Com. Code Ann. 17.41-.63 (West 2011 & West Supp. 2014). Johnson’s third

amended petition asserts five violations under Texas Business and Commerce

Code section 17.46, including violations of subsections (b)(5), (7), (9), (12), and

(24). However, in her brief to this Court, Johnson only argues a fact question as to

violations of three subsections—(b)(5), (b)(6), and (b)(24). Because Johnson did

not raise a violation of subsection (b)(6) with the trial court, her argument with

respect to subsection (b)(6) has been waived for purposes of appeal. See Tex. R.

App. P. 33.1.

31
 With regards to her allegations under subsection (b)(5), Johnson contends

the evidence shows that BOA “misrepresented that it would be forwarding the

payments for her insurance premium in time for the policy to be renewed[,]” and

thus misrepresented that the Note had characteristics that it did not have. BOA

responds that Johnson’s DTPA allegations are nothing more than a recasting of her

breach of contract claim.

In Crawford v. Ace Sign, Inc., the Texas Supreme Court affirmed the rule

that when a party alleges merely a breach of contract claim, without more, the

breach of contract allegation does not constitute a false, misleading, or deceptive

act in violation of the DTPA. 917 S.W.2d 12, 14 (Tex. 1996) (quoting Ashford

Dev., Inc. v. USLife Real Estate Servs., 661 S.W.2d 933, 935 (Tex. 1983)). The

plaintiff in Crawford contracted for services in the form of an advertisement in a

directory. 917 S.W.2d at 13. The plaintiff alleged that the sales agent represented

to him that the success of his business was heavily dependent upon the advertising,

and that the advertisement would increase his business by at least seventy to eighty

percent in the first year. Id. The sales agent also told the plaintiff that if he paid the

full price upfront, his advertisement would appear in a particular edition. Id. Based

on these representations, the plaintiff agreed to renew a written contract for

32
advertising. Id. Subsequently, the defendant failed to print the advertisement as

promised. Id.

The plaintiff argued that the defendant not only failed to publish the

advertising as required by the contract but also made certain misrepresentations

during the meeting at which the plaintiff had agreed to renew his contract. Id. at

14. Notwithstanding these allegations, the Court rejected the plaintiff’s argument

that the case was actionable under the DTPA. Id. The Court concluded that the

defendant’s statements, including the alleged misrepresentations, “were nothing

more than representations that the defendants would fulfill their contractual duty to

publish, and the breach of that duty sounds only in contract.” Id. The Court

explained that “[t]he statements themselves did not cause any harm. The failure to

run the advertisement (the breach of the contract) actually caused the lost profits,

and that injury is governed by contract law, not the DTPA.” Id. at 14-15 (emphasis

in original).

The misrepresentation that Johnson claims BOA made was that BOA

misrepresented that it would timely pay the premium to renew her windstorm

insurance. This representation is nothing more than a representation that BOA

would fulfill its contractual duties under the Deed of Trust. The representation

itself did not cause harm, but rather BOA’s failure to pay the premium timely

33
allegedly caused the harm of which Johnson complains. The nature of Johnson’s

injury flows from the breach of contract and not the representation that Johnson

has alleged to be a violation of the DTPA. Therefore, Johnson has failed to show

that she suffered an injury under subsection (b)(5) that is distinct, separate, and

independent from the economic losses recoverable under her breach of contract

claim.

Johnson further pleaded that BOA violated the DTPA by failing “to disclose

information concerning goods or services which was known at the time of the

transaction if such failure to disclose such information was intended to induce the

consumer into a transaction into which the consumer would not have entered had

the information been disclosed[.]” See Tex. Bus. & Com. Code Ann. § 17.46

(b)(24). In response, BOA argued to the trial court that Johnson could not produce

evidence that BOA engaged in a false, misleading, or deceptive act under the

DTPA. BOA did not brief this issue on appeal. However, because the trial court’s

summary judgment order did not state the grounds upon which the summary

judgment was granted, we must address all grounds raised by BOA in its motion

for summary judgment. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

Johnson alleges that BOA violated section 17.46(b)(24) by failing to disclose to

34
her information that BOA had at the time of the transaction—i.e., that BOA did not

have any procedures in place to prevent untimely disbursement of premium funds.

To prevail on a DTPA claim, the plaintiff must demonstrate (1) the

plaintiff’s status as a consumer, (2) the defendant can be sued under the DTPA, (3)

the defendant committed a wrongful act under the DTPA, and (4) the defendant’s

actions were a producing cause of the plaintiff’s damages. Tex. Bus. & Com. Code

Ann. § 17.50(a). To prove a DTPA action for failure to disclose information, the

plaintiff must show (1) a failure to disclose information concerning goods or

services; (2) the information was known at the time of the transaction; (3) the

failure to disclose was intended to induce the plaintiff into a transaction; and (4)

that the plaintiff otherwise would not have entered the transaction if the

information had been disclosed. Tex. Bus. & Com. Code § 17.46(b)(24).

The record contains no evidence that BOA was aware of the necessity to

have a different policy in place to prevent what happened in this case. BOA’s

corporate representative testified that if someone requests BOA to send a check

overnight, BOA will do so. He testified that if F.B. Taylor had requested it, the

money could have been wired to F.B. Taylor’s account. Grzeskowiak also testified

that BOA’s computer system is set up to automatically notify BOA when a policy

is set to expire and prompts BOA to contact the agent. This testimony suggests

35
that BOA had at least some policies in place for dealing with last-minute renewals.

There is no evidence in the record before us that BOA did not believe at the time it

entered into the Deed of Trust with Johnson that the policies it did have in place

were insufficient to meet its obligations under the Deed of Trust. Moreover, there

is no evidence that BOA withheld any information, known or otherwise, with the

intention of inducing Johnson to enter into the Deed of Trust. The trial court did

not err in granting summary judgment on Johnson’s DTPA claim under section

17.46(b)(24). Because our ruling on Johnson’s claim under section 17.46(b)(24) is

dispositive, we need not address whether this claim is also barred under the

economic loss doctrine. We overrule Johnson’s eleventh issue.

VII. Fraud

Johnson contends that BOA failed to establish conclusively that her fraud

claim was barred by the economic loss rule. She further argues there are genuine

issues of material fact that preclude summary judgment on her fraud claim against

BOA. In its motion for summary judgment, BOA’s argument with respect to

Johnson’s fraud claim was twofold: first, Johnson’s fraud claim is merely a

restatement of her cause of action based on breach of contract, and secondly, even

if Johnson did plead a valid cause of action for fraud, there was no summary

judgment evidence of any of the essential elements of common law fraud. We note

36
that BOA did not brief its no-evidence points on appeal regarding its fraud claim.

However, because the trial court’s summary judgment order did not state the

grounds upon which the summary judgment was granted, we must address all

grounds raised by BOA in its motion for summary judgment. See Carr, 776

S.W.2d at 569.

We find that Johnson has failed to raise a genuine fact issue on her fraud

claim. Johnson contends that

[BOA] misrepresented to Plaintiff that it would take care of
adequately paying for the premium of the insurance policy covering
Plaintiff’s property from risk when in fact Defendant failed to do so,
as evidenced by the fact that Defendant’s corporate representative
admitted that the manner in which Defendant issued and sent the
payment for Plaintiff’s policy precluded her policy to be renewed on
time.

To succeed on her common law fraud claim, Johnson must establish: (1) a material

misrepresentation was made; (2) the representation was false; (3) when the

representation was made, the speaker knew it was false or made it recklessly

without any knowledge of the truth and as a positive assertion; (4) the speaker

made the representation with the intent that the other party should act upon it; (5)

the party acted in reliance on the representation; and (6) the party thereby suffered

injury. Italian Cowboy, 341 S.W.3d at 337. Failure to perform a contractual

promise, standing alone, does not constitute evidence of fraud. See Morgan Bldgs.

37
& Spas, Inc. v. Humane Soc’y of Se. Tex., 249 S.W.3d 480, 489 (Tex. App.—

Beaumont 2008, no pet.). However, “[a] promise to do an act in the future is

actionable fraud when made with the intention, design and purpose of deceiving,

and with no intention of performing the act.” Werth v. Johnson, 294 S.W.3d 908,

909 (Tex. App.—Beaumont, 2009, no pet.) (citing Spoljaric v. Percival Tours,

Inc., 708 S.W.2d 432, 434 (Tex. 1986)).

Johnson’s basic theory is that BOA made a false promise of future

performance to her, that is, BOA made a false promise to timely pay her premiums

out of her escrow account. To prove a false promise of future performance,

Johnson must establish that BOA made a promise to Johnson with no intention of

performing it. See Werth, 294 S.W.3d at 909. There is nothing in Johnson’s

petition, her responses, or the summary judgment evidence that BOA’s alleged

promise of future timely disbursements was made by BOA with the intent at the

time the contract was entered into by the parties not to perform the promise.

Johnson argues that at the time BOA made the representations to her that it would

timely pay her premiums, “[BOA] either knew them to be false or made them

recklessly without any knowledge of their truth as positive assertions, as it knew

that it had no procedures in place for timely issuing and sending payments for

insurance policies that were set to expire close to the date the payment is issued.”

38
However, the testimony Johnson relies on as evidence does not support this

allegation. Johnson cites to the deposition testimony of Grzeskowiak, which

concerns what BOA allegedly knew when it issued the check in September, not

what it knew when it entered into the agreement with Johnson years before.

We hold that the summary judgment proof shows as a matter of law that one

of the necessary elements of common law fraud, the lack of intent to perform

promise at the time it was made, is completely lacking. We therefore overrule

Johnson’s twelfth issue. Because our ruling on Johnson’s twelfth issue is

dispositive of this claim, we need not address whether her claim is barred under the

economic loss doctrine.

VIII. Breach of Fiduciary Duty

Johnson contends that her fiduciary duty claim is not barred by the economic

loss rule. According to Johnson, BOA’s fiduciary duty existed independent of the

Deed of Trust and stems instead from BOA’s position as her escrow agent. It is

true that courts have declined to apply the economic loss rule where the fiduciary

duty breached “existed independent of [the] contract[.]” See Flanagan, 403 S.W.3d

at 366. However, we disagree that BOA had a fiduciary duty as Johnson’s escrow

agent.

39
 It is axiomatic that to establish a breach of fiduciary duty, a plaintiff must

first show a fiduciary relationship between herself and the defendant. See Jones v.

Blume, 196 S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet. denied) (identifying

the elements of a breach of fiduciary duty claim). The record supports that the

relationship between Johnson and BOA can be described a number of different

ways: borrower and lender, bank and customer, mortgagor and mortgagee,

mortgagor and mortgage servicer, and escrow agent and escrow account holder.

These types of relationships are not, as a matter of law, fiduciary or otherwise

special. The relationship between a borrower and a lender or a bank and its

customers does not usually create a special or fiduciary relationship. Farah v.

Mafrige & Kormanik, P.C., 927 S.W.2d 663, 675 (Tex. App.—Houston [1st Dist.]

1996, no writ); see also Jones v. Thompson, 338 S.W.3d 573, 583 (Tex. App.—El

Paso 2010, pet. denied) (holding lenders owe no fiduciary duties to their

borrowers); Bank One, Tex., N.A. v. Stewart, 967 S.W.2d 419, 442 (Tex. App.—

Houston [14th Dist.] 1998, pet. denied) (“A special relationship does not usually

exist between a borrower and lender, and when Texas courts have found one, the

findings have rested on extraneous facts and conduct, such as excessive lender

control or influence in the borrower’s business activities.”). The relationship

between a mortgagor and a mortgagee ordinarily does not involve a duty of good

40
faith. FDIC v. Coleman, 795 S.W.2d 706, 709 (Tex. 1990); see also Lovell v. W.

Nat’l Life Ins. Co., 754 S.W.2d 298, 303 (Tex. App.—Amarillo 1988, writ denied)

(noting “the great weight of authority is that while the relationship between the

mortgagor and mortgagee is often described as one of trust, technically it is not of

a fiduciary character”). “An escrow agent’s duties are strictly limited to those set

forth in the escrow agreement.” Blume, 196 S.W.3d at 448. “[W]hen the escrow

agreement simply provides for the payment of funds by the mortgagor into an

account for the mortgagee’s use to meet tax, insurance, and other obligations . . .

no fiduciary relationship is created.” Garcia v. Bank of Am. Corp., 375 S.W.3d

322, 333 (Tex. App.—Houston [14th Dist.] 2012, no pet.).

Here, BOA’s duties are limited to those set forth in the Deed of Trust, which

contains the escrow arrangement. BOA’s servicer duties are purely contractual

since its sole obligation is to collect the payments due and disburse those monies as

required by the Deed of Trust. There is no evidence in the record of excessive

lender control or influence in Johnson’s personal business activities. Johnson’s

breach of fiduciary duty claim is not distinct, separate, or independent from her

breach of contract claim. Therefore, the trial court did not err in granting summary

judgment on Johnson’s breach of fiduciary duty claim. We overrule Johnson’s

fourteenth issue.

41
 IX. Conclusion

In summary, the trial court properly granted summary judgment in favor of

Bank of America on Johnson’s claims for negligence, negligent misrepresentation,

DTPA violations, fraud, and breach of fiduciary duty. We have concluded a

genuine issue of material fact exists on Johnson’s breach of contract claim. Thus,

the trial court erred in granting summary judgment on Johnson’s breach of contract

claim. We reverse the trial court’s judgment and remand for further proceedings

consistent with this opinion.

As to all other causes of action asserted by Johnson against Bank of America

herein, we conclude Johnson failed to raise a genuine issue of material fact as to

these issues and affirm the trial court’s judgments.

AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

______________________________
CHARLES KREGER
Justice

Submitted on October 24, 2013
Opinion Delivered October 30, 2014

Before McKeithen, C.J., Kreger, and Horton, JJ.

42