Halprin et al v. First National Bank et al

Filing 389

ORDER DENYING 264 Motion for Summary Judgment; DISMISSING AS MOOT 274 Motion to Strike; GRANTING 284 Motion for Summary Judgment. Signed by Judge Robert Pitman. (rg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
GREGORY HALPRIN, et al.,

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Plaintiffs,
v.
FEDERAL DEPOSIT INSURANCE
CORP., et al.,
Defendants.

5:13-CV-1042-RP

ORDER
Before the Court are Defendant American Title Group, Inc. f/k/a LandAmerica Lawyers
Title of San Antonio, Inc.’s (“American Title”) Motion for Summary Judgment on Its Counterclaim
for Contractual Indemnity Against All Plaintiffs, (Dkt. 264); American Title’s Motion to Strike
Plaintiffs’ Evidence in Opposition, (Dkt. 274); and Plaintiffs’ 1 Motion for Summary Judgment
Against Defendant American Title Group, Inc., (Dkt. 284); and the responsive filings to each.
Having considered the parties’ submissions and the relevant law, the Court will deny American
Title’s motion for summary judgment; grant Plaintiffs’ motion for summary judgment; and dismiss
as moot American Title’s motion to strike.
I. BACKGROUND
Plaintiffs allege that they entered into individual agreements with Defendants HTG Real
Property Management (“HTG”), the Padilla Property Corporation (“PPC”), Maria Del Rosario
Padilla, Mauro T. Padilla III, Mauro Joe Padilla, and Carlos Miguel Padilla (collectively, the “Padilla
The plaintiffs in this matter are Kennie Arriola, Edward Arriola, Silvio Brigliadoro, Gregory Halprin, George
Heywood, Denise Heywood, Kristopher Hochart, Hermann Kinschner, Ben Li, Lin Li, Michael Loeffler, Stan Salah,
Brian Taus, Michael Vick, Desiree Young, Payam Kohanbash, Gerald Bates, Paul Weber, Joseph Amelio, Tawny
Amelio, Adolfo Bejarano, Mauricio Bejarano, Maria R. Collins, David Goldberg, Gohar Karahogopian, Hagop
Karahogopian, Les Klingermann, Irina Minkova, Mikail Minkova, Andrew V. Nguyen, Simon Parrott, Melissa Parrott,
David Trustey, Kevin Trustey, Patricia Trustey, and Michael Trustey (collectively, “Plaintiffs”). (7th Am. Compl., Dkt.
124, at 2–4).

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Defendants”) to purchase lots on which the Padilla Defendants would build one or more multifamily living units. (7th Am. Compl., Dkt. 124, ¶¶ 5–6). Plaintiffs allege that they provided American
Title with a down payment and that the Padilla Defendants then deeded half-acre lots to Plaintiffs.
(Id.). After construction began, the Padilla Defendants allegedly asked Plaintiffs to deed their lots
back to the Padilla Defendants in order to obtain construction financing. (Id. ¶ 7). The Padilla
Defendants also allegedly asked Plaintiffs to agree to subrogate their claims to those of the
construction lender, telling Plaintiffs that this would allow the Padilla Defendants to obtain
construction financing and complete construction. (Id.). Instead, Plaintiffs allege that the Padilla
Defendants used those funds to pay personal and/or corporate debt. (Id.). The investment
properties were never completed. (Id. ¶ 13). Plaintiffs then brought this action, in which they assert a
variety of claims against HTG, PPC, and the Padilla Defendants. (Id. at 9–24).
Plaintiffs also assert a number of claims against American Title, the title company that
survived the merger with the company 2 that facilitated Plaintiffs’ real estate transactions: common
law and statutory fraud, violations of the Deceptive Trade Practices Act (“DTPA”), civil conspiracy,
assisting and participating, negligence, and breach of fiduciary duty. (Id. at 25–28). American Title
filed a motion to dismiss each of Plaintiffs’ claims, (Dkt. 126), which the Court granted, (Dkt. 227).
Meanwhile, American Title filed counterclaims against Plaintiffs for contractual and statutory
indemnity, arguing that each plaintiff violated their agreement to indemnify American Title by suing
it. (LandAm. Am. Ans., Dkt. 125, at 20–24). American Title and Plaintiffs now each seek summary
judgment on American Title’s contractual indemnity counterclaims in their favor. (Dkts. 264, 284).
American Title seeks damages in the amount of $307,165.58. (Def.’s Mot. Summ. J., Dkt. 264, at 15).

2 The title company originally involved with Plaintiffs’ real estate transactions was LandAmerica Lawyers Title of San
Antonio, Inc. (“LandAmerica”). (See Def.’s Reply Mot. Summ. J., Dkt. 275, at 1–2). American Title asks the Court to
take judicial notice of evidence that LandAmerica merged with American Title in 2010, id., and the Court assumes
without deciding that they did so for purpose of resolving the parties’ cross motions for summary judgment.

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II. LEGAL STANDARD
Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure
only “if the movant shows there is no genuine dispute as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute is genuine only if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). “A fact issue is ‘material’ if its resolution could affect the
outcome of the action.” Poole v. City of Shreveport, 691 F.3d 624, 627 (5th Cir. 2012).
The party moving for summary judgment bears the initial burden of “informing the district
court of the basis for its motion, and identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). “[T]he moving party may [also] meet its burden by simply pointing to an absence of
evidence to support the nonmoving party’s case.” Boudreaux v. Swift Transp. Co., 402 F.3d 536, 544
(5th Cir. 2005). The burden then shifts to the nonmoving party to establish the existence of a
genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585–87
(1986); Wise v. E.I. Dupont de Nemours & Co., 58 F.3d 193, 195 (5th Cir. 1995). After the nonmovant
has been given the opportunity to raise a genuine factual issue, if no reasonable juror could find for
the nonmovant, summary judgment will be granted. Miss. River Basin Alliance v. Westphal, 230 F.3d
170, 175 (5th Cir. 2000). Courts must view the summary judgment evidence in the light most
favorable to the nonmovant. Rosado v. Deters, 5 F.3d 119, 123 (5th Cir. 1993).
III. DISCUSSION
Under Texas law, indemnity agreements are valid and enforceable obligations of the
principal and indemnitors. Ford v. Aetna Ins. Co., 394 S.W.2d 693, 698 (Tex. Civ. App.—Corpus
Christi 1965, writ ref’d n.r.e.). There are five elements of a contractual indemnity claim under Texas
law: (1) a contractual indemnity agreement exists; (2) the indemnity agreement obligates one party to

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indemnify the other for particular claims; (3) those claims were made; (4) all conditions precedent
for recovery have occurred or been waived or excused; and (5) the party seeking relief has been
damaged. See Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 719 (5th Cir. 1995).
American Title seeks relief from each plaintiff in this action based on the contested premise
that “[e]ach Plaintiff agreed to indemnity and hold harmless Land America.” (Def.’s Mot. Summ. J.,
Dkt. 264, at 7). Plaintiffs, meanwhile, respond that 14 of the 37 plaintiffs 3 did not sign an indemnity
agreement. (Pls.’ Resp., Dkt. 273, at 8). American Title admits it does not have copies of executed
indemnity agreements for those fourteen plaintiffs. (Def.’s Mot. Part. Summ. J., Dkt. 127, at 15).
Nevertheless, American Title seeks to holds those fourteen plaintiffs liable based on the factual
allegations in their pleading. (Def.’s Mot. Summ. J., Dkt. 264, at 8).
A. The Fourteen Plaintiffs for Whom American Title Cannot Produce a Signed Indemnity Agreement
American Title has the burden to prove the existence of a valid indemnity agreement, and
for the fourteen plaintiffs for whom American Title can produce no agreement, its only evidence of
an agreement is a statement made in Plaintiffs’ Seventh Amended Complaint. (Id. (citing 7th Am.
Compl., Dkt. 124, at ¶ 11 (alleging that “Land America Title required all parties to sign hold
harmless agreements”))). In its order granting American Title’s motion to dismiss, the Court held
that this allegation was a binding judicial admission only of the fact that each plaintiff executed an
indemnification agreement. (Order, Dkt. 227, at 11–12, 14). American Title now argues that the law
of the case doctrine compels the Court to find not only that each plaintiff signed an indemnification
agreement, but also that the “indemnification provision contained therein is binding” on each
plaintiff. (Def.’s Mot. Summ. J., Dkt. 264, at 8). The Court does not agree.

3 Those fourteen plaintiffs are “Les Klingerman, Maria Collin (also known as Maria Penunuri), Mauricio Bejarano,
Kennie Arriola, Gerald Bates, Silvio Brigliadoro, Gregory Halprin, Kristopher Hochart, Herman Hinschner, Craig Inaba,
Brian Taus, Michael Vic, Paul Weber, and Desire Young.” (Pls.’ Resp., Dkt. 273, at 8).

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“A judicial admission is a formal concession in the pleadings . . . by a party or counsel that is
binding on the party making them. . . . [I]t has the effect of withdrawing a fact from contention.”
Martinez v. Bally’s La., Inc., 244 F.3d 474, 476-77 (5th Cir. 2001). A district court may allow an
admission “to be withdrawn,” id., or it “may, in a proper exercise of discretion, relieve a party of the
adverse consequences of a judicial admission.” McGee v. O & M Boat Co., 412 F.2d 75, 76 (5th Cir.
1969).
The law of the case doctrine only applies to issues actually decided, either implicitly or
explicitly. Morrow v. Dillard, 580 F.2d 1284, 1290 (5th Cir. 1978). “[U]nlike res judicata, the law of the
case doctrine applies only to issues that were actually decided, rather than all questions in the case
that might have been decided, but were not.” Clifford v. Gibbs, 298 F.3d 328, 331 (5th Cir. 2002).
The issue now before the Court is whether American Title can prove not only that each
plaintiff signed an indemnification agreement, but also that the signed agreement covers the claims
asserted by the plaintiffs and whether any precedent conditions exist. See Transamerica Ins., 66 F.3d at
719. In other words, it is necessary to prove the terms of each indemnification agreement, not simply
the agreements’ existence. And it is clear from the agreements that American Title has produced that
the terms of each agreement are not identical. (See Def.’s Mot. Summ. J., Dkt. 264, at 4–6
(excerpting Plaintiffs’ hold harmless agreements, some of which state that the plaintiff will
indemnify LandAmerica “from any claims . . . with regard to the payment of the down payment”;
others apply to “any claims . . . with regard to the title of the property and the Owner’s Title Policy
not being issued at the time of conveyance”; and still others apply to any claims . . . with regard to
the condition of the property and the payment of the down payment”)).
The issue now before the Court is considerably broader than the issue before the Court in
American Title’s motion to dismiss. (See Order, Dkt. 227, at 11). There, the issue was whether
American Title was negligent in disbursing funds to the Padilla Defendants, and the question was

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whether Plaintiffs admitted to signing hold harmless agreements that directed LandAmerica to
disburse funds. (Order, Dkt. 227, at 11, 14). The Court found that Plaintiffs’ allegation that “Land
America Title required all parties to sign hold harmless agreements” was a judicial admission that
each plaintiff signed a hold harmless agreement containing a disbursement provision; that fact was
dispositive. (Id. at 14). The Court explicitly declined to consider whether Plaintiffs’ allegation was a
judicial admission of the existence or terms of any other provision of any particular indemnification
agreement. (Id.).
The law of the case doctrine does not require the Court to make the broad finding that
American Title seeks now. 4 The Court’s prior finding that Plaintiffs judicially admitted to signing
indemnification agreements with a disbursement provision does not entail the broader finding that
each (or even any one) of the fourteen plaintiffs agreed to indemnify American Title for a certain
claim or set of claims. 5 That is especially true when the claims language in the indemnification
agreements produced by American Title for the other 23 plaintiffs varies from agreement to
agreement. (See Def.’s Mot. Summ. J., Dkt. 264, at 4–6).
Accordingly, the Court may use its discretion to determine whether Plaintiffs’ pleading
constitutes a judicial admission that these fourteen plaintiffs executed indemnification agreements
containing claims provisions that match the claims later asserted against American Title. McGee, 412

Even if the issues now and then were identical, the law of the case doctrine would not necessarily require the Court to
reach the same finding in this instance. The doctrine does not limit a court’s power; it guides its discretion. See
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815–17 (1988) (“When a court decides upon a rule of law, that
decision should continue to govern the same issues in subsequent stages in the same case. . . . A court has the power to
revisit prior decisions of its own.”). Although the doctrine is not controlling, it should ordinarily be applied absent
“extraordinary circumstances such as where the initial decision was clearly erroneous and would work a manifest
injustice.” Id. at 817 (citation and quotation marks omitted). Accordingly, the Fifth Circuit applies the doctrine “unless (i)
the evidence on a subsequent trial was substantially different, (ii) controlling authority has since made a contrary decision
of the law applicable to such issues, or (iii) the decision was clearly erroneous and would work manifest injustice.” Royal
Ins. Co. of Am. v. Quinn-L Capital Corp., 3 F.3d 877, 880 (5th Cir. 1993) (citation and quotation marks omitted).
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Not only can the prior judicial admission not establish any unproduced indemnification agreement’s claim terms, but
also it cannot establish that the fourteen plaintiffs signed agreements including a provision explicitly agreeing to
indemnify American Title for claims that they might bring against it, which, as discussed infra at 8–9, must appear in an
agreement for American Title to recover against its indemnitor.

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F.2d at 76. The Court declines to do so, given that these fourteen plaintiffs deny executing
indemnification agreements, (Pls.’ Mot. Summ. J., Dkt. 284, at 6), 6 and American Title cannot
produce evidence that would establish the specific terms of any particular missing agreement.
Without judicial-admission evidence, American Title lacks evidence sufficient to raise a
genuine fact issue regarding whether, for these fourteen plaintiffs, the claims identified in the
indemnification agreement they admitted signing were later made and whether there existed in those
agreements any conditions precedent for recovery See Transamerica Ins., 66 F.3d at 719. Those
fourteen plaintiffs are therefore entitled to summary judgment in their favor.
B. The Remaining 23 Plaintiffs
It remains to be determined whether summary judgment is appropriate—for either Plaintiffs
or American Title—on American Title’s contractual indemnity claims against the 23 plaintiffs for
whom American Title has produced indemnity agreements. (See Hold Harmless Agreements, Alva
Decl. Exs. A-1–A-23, Dkt. 119-1). Plaintiffs argue that they are entitled to summary judgment
because the indemnity agreements do not obligate them to indemnify American Title for claims that
they might bring against American Title. (Pls.’ Mot. Summ. J., Dkt. 284, at 9–11). According to
Plaintiffs, indemnity agreements under Texas law do not ordinarily apply to claims between the
indemnitor and indemnitee, but only to claims brought by third parties against the indemnitee. (Id.
(quoting Wallerstein v. Spirt, 8 S.W.3d 774, 780 (Tex. App.—Austin 1999, no pet.))). They argue that
the indemnity provisions in their agreements follow this default rule—and therefore do not include
claims that they, the indemnitors, might bring against American Title—because the provisions do
not explicitly provide otherwise. Defendants make no argument to the contrary, either in their own
motion for summary judgment, their reply in support of that motion, or in their response to
Plaintiffs’ motion for summary judgment. The Court agrees with Plaintiffs.
Plaintiffs attribute the allegation in the Seventh Amended Complaint, (see Dkt. 124, ¶ 11), to the “imprecise words of a
junior attorney. (Pls.’ Mot. Summ. J., Dkt. 284, at 7).

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Under Texas law, “an indemnity does not apply to claims between the parties to the
agreement. . . . Rather, it obligates the indemnitor to protect the indemnitee against claims brought
by persons not a party to the provision.” Wallerstein v. Spirt, 8 S.W.3d 774, 780 (Tex. App.—Austin
1999, no pet.) (citing Derr Constr. Co. v. City of Houston, 846 S.W.2d 854, 858 (Tex. App.—Houston
[14th Dist.] 1992, no writ)). Indemnity agreements are to be strictly construed in favor of the
indemnitor. Keystone Equity Mgmt. v. Thoen, 730 S.W.2d 339, 340 (Tex. App.—Dallas 1987, no writ)
(citing Smith v. Scott, 261 S.W. 1089 (Tex. Civ. App.—Amarillo 1924, no writ)). Accordingly, an
indemnitor’s obligations cannot be extended, by construction or implication, beyond the precise
terms of the agreement. Hudson v. Hinton, 435 S.W.2d 211, 214 (Tex. Civ. App.—Dallas 1968, no
writ). An indemnity provision can be written “such that the parties indemnify each other against
claims they later assert against the other,” but the provision must do so expressly. Ganske v. Spence,
129 S.W.3d 701, 708 (Tex. App.—Waco 2004, no pet.).
Plaintiffs cite Kellogg Brown & Root Int’l, Inc. v. Altanmia Commercial Mktg. Co. W.L.L., No.
CIV.A. H-07-2684, 2008 WL 5114962, at *19 (S.D. Tex. Dec. 3, 2008), as instructive. (Pls.’ Mot.
Summ. J., Dkt. 284, at 10). In Kellogg Brown, the plaintiff sued the defendant for breaching the
indemnity provision of a contract between them that stated: “[The defendant] agrees to defend,
indemnify and hold harmless [the plaintiff] from and against any claim . . . or liability of whatever
kind or nature . . . from injury . . . to any property arising from or in connection with the Sublet
Work.” Id. at *19. The defendant submitted reimbursement claims to the plaintiff, which the
plaintiff alleged to breach their contract’s indemnity provision. Id. The defendant responded that it
had not breached the contract because indemnification provisions apply to “claims brought by third
parties,” and the defendant was not a third party. Id. (citing MG Building Materials, Ltd. v. Moses Lopez
Custom Homes, Inc., 179 S.W.3d 51, 63-64 (Tex. App.—San Antonio 2005, pet. denied)). The court
agreed because the contract “[did] not expressly provide for indemnification of claims asserted

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between the parties to the agreement.” Kellogg Brown, 2008 WL 5114962, at *20; see also id. (“The term
‘any claim’ describes the types of claims that are covered by the indemnity obligation but does not
address whether those asserting covered claims include the contracting parties.”). Because the “plain
language” of the contract did not “show that the parties intended to require [the defendant] to
indemnify [the plaintiff] for claims that [the defendant] asserted against [the plaintiff],” the plaintiff
in Kellogg Brown could not recover its costs and attorney’s fees under the contract’s indemnity
provision. Id.
The same is true here. The indemnity provisions in Plaintiffs’ hold harmless agreements
provide that Plaintiffs will “indemnify and hold harmless . . . LandAmerica Lawyers Title of San
Antonio, Inc. . . . from any and all claims for payment, damages, and attorney’s fees” with regard to
either (depending on the particular agreement) the condition of the property, the payment of the
down payment, or the title of the property not being issued at the time of conveyance. (See Hold
Harmless Agreements, Alva Decl. Exs. A-1–A-23, Dkt. 119-1). None of Plaintiffs’ indemnification
agreements expressly state that Plaintiffs agree to indemnify LandAmerica from claims that they, the
indemnitors, may bring against LandAmerica, the indemnitee. These indemnification agreements
must be strictly construed in favor of Plaintiffs, which means that their obligations must not be
extended beyond the terms of the agreements. Like the court in Kellogg Brown, this Court finds that
“any claims” defines the scope of the causes of action that fall within the agreement and not the
scope of the parties who might bring causes of action. Although the indemnity agreements could
have explicitly provided that they applied to claims brought by the indemnitor, Ganske, 129 S.W.3d
at 708, they did not. Accordingly, Plaintiffs have established that there is no genuine fact issue

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concerning American Title’s inability to prove multiple prongs of its contractual indemnity claims
against them. The remaining 23 plaintiffs are therefore entitled to summary judgment in their favor. 7
IV. CONCLUSION
For these reasons, Plaintiffs’ Motion for Summary Judgment, (Dkt. 284) is GRANTED.
American Title’s Motion for Summary Judgment, (Dkt. 264), is DENIED. American Title’s Motion
to Strike Plaintiffs’ Evidence in Opposition, (Dkt. 274), is DISMISSED AS MOOT.
SIGNED on August 27, 2018.

_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

American Title moved to strike a number of statements made by Plaintiffs in the declarations they attached to their
response to American Title’s motion for summary judgment. (Def.’s Mot. Strike, Dkt. 274). Because the Court need not
rely on those declarations to decide Plaintiffs’ or American Title’s motion for summary judgment, American Title’s
motion to strike is moot.

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