Pitts v. Rivas

Supreme Court of Texas
══════════
No. 23-0427
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Pitts, et al.,
Petitioners,

v.

Rivas, et al.,
Respondents

═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fifth District of Texas
═══════════════════════════════════════

Argued September 11, 2024

CHIEF JUSTICE BLACKLOCK delivered the opinion of the Court.

JUSTICE HUDDLE filed a concurring opinion, in which Justice
Lehrmann, Justice Bland, and Justice Young joined.

In professional malpractice cases, Texas’s courts of appeals have
developed a principle known as the “anti-fracturing rule.” The rule
limits the ability of plaintiffs to recharacterize a professional negligence
claim as some other claim—such as fraud or breach of fiduciary
duty—in order to obtain a litigation benefit like a longer statute of
limitations. In today’s accounting malpractice case, we agree with the
court of appeals that the anti-fracturing rule must be applied to the
plaintiffs’ claims. We disagree, however, with how the court of appeals
applied the anti-fracturing rule, and we hold that the rule bars the
plaintiffs’ fraud claim. We further hold that the plaintiffs’ breach of
fiduciary duty claim fails because, as a matter of law, no fiduciary duty
existed under the undisputed facts. The judgment of the court of appeals
is reversed, and judgment is rendered for the defendants on all claims.
I.
Rudolph Rivas is a home builder and real estate developer.
Brandon and Linda Pitts, husband and wife, are accountants who
operate the firm of Pitts & Pitts. 1 Beginning in 2007, the Accountants
provided various accounting services for Rivas, including preparation of
quarterly financial statement compilations and tax returns. The
compilations were prepared as consolidated statements for multiple
Rivas entities. To prepare them, Brandon Pitts accessed Rivas’s data
using QuickBooks. The relationship continued for ten years. During
this time, Brandon and Linda Pitts developed a personal friendship with
Rivas and his wife.
For several years, the Accountants provided services without a
written agreement. In 2015 and 2016, the parties executed engagement
letters, which stated that Pitts & Pitts would “perform a compilation
engagement with respect to the consolidated financial statements of”
Rivas’s company. The letters, signed by Rivas and Brandon Pitts,
further stated:

1 We refer to Petitioners Brandon Pitts, Linda Pitts, and the firm of

Pitts & Pitts collectively as the Accountants.

2
The objective of our engagement is to apply accounting and
financial reporting expertise to assist you in the
presentation of financial statements without undertaking
to obtain or provide any assurance that there are no
material modifications that should be made to the financial
statements in order for them to be in accordance with
accounting principles generally accepted in the United
States of America.
The letters contain several other provisions limiting the
responsibility and liability of the Accountants. For example: “Our
engagement cannot be relied upon to identify or disclose any financial
statement misstatements, including those caused by fraud or error”; and
“we will issue a report that will state that we did not audit or review the
financial statements and that, accordingly, we do not express an
opinion, a conclusion, nor provide any assurance on them.” The
Accountants also provided services not described in the engagement
letters, both before and after the letters were executed, including
preparing tax returns.
In 2016, the financial statements Rivas supplied to lenders
contained errors. The statements were later corrected. Rivas testified
that he complained to the Accountants about the accuracy of statements
showing shareholder equity in excess of $10 million, thinking this figure
was too high. He then retained a different accountant, Pamela Whipple,
who audited the financial statements and found multiple errors that
caused the inflated figure for shareholder equity. One alleged reason
for the inflated figure was that the Accountants erroneously duplicated
entries for certain assets.
By January 2018, the Accountants had ceased providing services
to Rivas. In August 2020, Rivas sued the Accountants. He claimed the

3
Accountants were responsible for the errors in the financial statements.
These errors, he alleged, required a restatement that lowered the figure
for shareholder equity, which in turn caused lenders to demand
additional deposits and refuse to provide further credit to Rivas. The
errors also caused Rivas to overpay taxes, and although these
overpayments were eventually refunded, they drained Rivas’s accounts.
This loss of cash reserves, combined with the loss of access to credit,
allegedly forced Rivas’s business into bankruptcy. The petition brought
claims for “negligence/gross negligence/professional malpractice,”
“intentional misrepresentations/fraud,” breach of fiduciary duty, and
breach of contract. 2
The Accountants moved for summary judgment, arguing: (1) the
plaintiffs judicially admitted in a related bankruptcy proceeding that
the defendants’ alleged conduct was not the proximate cause of their
injuries; (2) the negligence claims, which accrued in 2016 at the latest,
were barred by the two-year statute of limitations; (3) the breach of
fiduciary duty, breach of contract, and fraud claims were barred by the
anti-fracturing rule because they should be classified as professional
negligence claims; (4) any alleged breach of contract that occurred
before August 14, 2016, was barred by the four-year statute of

2The negligence and breach of fiduciary duty claims were brought
against all defendants. The breach of contract claim was brought against
Pitts & Pitts. The fraud claim was brought against Brandon Pitts and
Pitts & Pitts. The petition also alleged that Pitts & Pitts is vicariously liable
for the individual torts of Brandon and Linda. Because, as we hold below, none
of the underlying tort claims against the individuals is viable, the vicarious
liability theory necessarily fails. See Agar Corp. v. Electro Cirs. Int’l, LLC,
580 S.W.3d 136, 140–41 (Tex. 2019).

4
limitations; and (5) no evidence supported Rivas’s claims. The district
court granted summary judgment for the Accountants on all claims
without specifying the grounds.
Rivas appealed. The court of appeals affirmed as to the
negligence and breach of contract claims. 684 S.W.3d 849, 859, 868 (Tex.
App.—Dallas 2023). The court reversed, however, as to the fraud and
breach of fiduciary duty claims. Id. at 866–68. It held that the
anti-fracturing rule did not bar these two claims and that the evidence
supporting them was sufficient to survive summary judgment.
Id. at 862–67.
The Accountants petitioned for review, and we granted the
petition. Rivas did not seek our review of the lower courts’ rejection of
his negligence, gross negligence, and breach of contract claims. The case
before this Court is therefore confined to whether summary judgment
was proper on Rivas’s fraud and breach of fiduciary duty claims against
the Accountants. 3
II.
A.
The Accountants argue that the fraud and breach of fiduciary
duty claims are barred by the anti-fracturing rule. The anti-fracturing

3 Rivas also sued two other accountants, Reed Pitts (son of Brandon and

Linda) and Jan Turner, for negligence and breach of fiduciary duty. As to all
defendants, Rivas conceded in the court of appeals that the statute of
limitations for professional malpractice bars the negligence claims.
684 S.W.3d at 858. The court of appeals affirmed summary judgment against
Rivas on the breach of fiduciary duty claims against Reed Pitts and Jan
Turner, id. at 865–66, 868, and Rivas does not appeal this result. Thus, all
claims against Reed Pitts and Jan Turner have failed, and none of those claims
is before this Court.

5
rule has been developed extensively in Texas courts of appeals in
professional negligence cases in recent decades. 4 No court of appeals
has disclaimed it. Under the rule, plaintiffs in professional negligence
cases may not convert “what are really negligence claims” into other

4 E.g., Forshee v. Moulton, 694 S.W.3d 803, 808–11 (Tex. App.—Houston

[14th Dist.] 2024, no pet.); Brickley v. Reed, No. 03-22-00453-CV, 2023 WL
2376127, at *2–4 (Tex. App.—Austin Mar. 7, 2023); Tex. Pharmomedical Exps.,
Inc. v. Wang, No. 14-19-00888-CV, 2021 WL 2325085, at *5–6 (Tex. App.—
Houston [14th Dist.] June 8, 2021, pet. denied); Webb v. Ellis, No. 05-19-00673-
CV, 2020 WL 1983358, at *10 (Tex. App.—Dallas Apr. 27, 2020, pet. dism’d by
agr.); Cotton v. Jones, No. 11-15-00142-CV, 2017 WL 3572818, at *2–4 (Tex.
App.—Eastland Aug. 17, 2017, no pet.); Parker v. Glasgow,
No. 02-15-00378-CV, 2017 WL 2686474, at *8 (Tex. App.—Fort Worth June 22,
2017, no pet.); J.A. Green Dev. Corp. v. Grant Thornton, LLP, No. 05-15-00029-
CV, 2016 WL 3547964, at *6–8 (Tex. App.—Dallas June 28, 2016, pet. denied);
Vara v. Williams, No. 03-10-00861-CV, 2013 WL 1315035, at *3–4 (Tex. App.—
Austin Mar. 28, 2013, pet. denied); Riverwalk CY Hotel Partners, Ltd. v. Akin
Gump Strauss Hauer & Feld, LLP, 391 S.W.3d 229, 236 (Tex. App.—San
Antonio 2012, no pet.); Isaacs v. Schleier, 356 S.W.3d 548, 556–60 (Tex. App.—
Texarkana 2011, pet. denied); Won Pak v. Harris, 313 S.W.3d 454, 457–59
(Tex. App.—Dallas 2010, pet. denied); Beck v. Law Offs. of Edwin J. (Ted)
Terry, Jr., P.C., 284 S.W.3d 416, 426–28 (Tex. App.—Austin 2009, no pet.);
Duerr v. Brown, 262 S.W.3d 63, 70–75 (Tex. App.—Houston [14th Dist.] 2008,
no pet.); Murphy v. Gruber, 241 S.W.3d 689, 693–99 (Tex. App.—Dallas 2007,
pet. denied); Murphy v. Mullin, Hoard & Brown, L.L.P., 168 S.W.3d 288, 289
n.1 (Tex. App.—Dallas 2005, no pet.); Aiken v. Hancock, 115 S.W.3d 26, 28–29
(Tex. App.—San Antonio 2003, pet. denied); Deutsch v. Hoover, Bax &
Slovacek, L.L.P., 97 S.W.3d 179, 189–91 (Tex. App.—Houston [14th Dist.]
2002, no pet.); Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921,
924 (Tex. App.—Fort Worth 2002, pet. denied); Goffney v. Rabson, 56 S.W.3d
186, 190–94 (Tex. App.—Houston [14th Dist.] 2001, pet. denied); Greathouse v.
McConnell, 982 S.W.2d 165, 172 (Tex. App.—Houston [1st Dist.] 1998, pet.
denied); Kahlig v. Boyd, 980 S.W.2d 685, 689 (Tex. App.—San Antonio 1998,
pet. denied); Sledge v. Alsup, 759 S.W.2d 1, 2 (Tex. App.—El Paso 1988, no
writ).

6
claims such as fraud, breach of contract, or breach of fiduciary duty in
order to gain a litigation advantage. Murphy, 241 S.W.3d at 693.
The logic underlying the anti-fracturing rule is straightforward.
It may often be possible to artfully recast a professional negligence
allegation as something more—such as fraud or breach of fiduciary
duty—to avoid a litigation hurdle such as the statute of limitations.
Courts, however, must look not merely to the labels chosen by the
plaintiff but instead to the gravamen of the facts alleged to determine
how to treat the claim. Forshee, 694 S.W.3d at 809; Vara, 2013 WL
1315035, at *4; Won Pak, 313 S.W.3d at 457; Murphy, 241 S.W.3d
at 697. Under the anti-fracturing rule, if the crux or gravamen of the
plaintiff’s claim is a complaint about the quality of professional services
provided by the defendant, then the claim will be treated as one for
professional negligence even if the petition also attempts to repackage
the allegations under the banner of additional claims. J.A. Green Dev.
Corp., 2016 WL 3547964, at *8; Won Pak, 313 S.W.3d at 457. In other
words, if the “gist of a client’s complaint” or “the real issue” is that the
professional failed to exercise the degree of care, skill, or diligence that
professionals of ordinary skill and knowledge would exercise, the
anti-fracturing rule requires the claim to be litigated as one for
professional negligence, and the plaintiff may not re-label the
allegations under a different claim to obtain a litigation advantage.
Riverwalk CY Hotel Partners, 391 S.W.3d at 236; Kimleco Petroleum,
91 S.W.3d at 924.
The anti-fracturing rule has developed primarily in legal
malpractice cases. For example, one court has stated that the rule

7
“prevents plaintiffs from converting what are actually professional
negligence claims against an attorney into other claims such as fraud,
breach of contract, breach of fiduciary duty, or violations of the DTPA.”
Won Pak, 313 S.W.3d at 457. To avoid application of the rule, “the
plaintiff must do more than merely reassert the same claim for legal
malpractice under an alternative label. The plaintiff must present a
claim that goes beyond what traditionally has been characterized as
legal malpractice.” Duerr, 262 S.W.3d at 70. If, however, the gravamen
of the claim extends beyond professional negligence and the plaintiff
raises a genuine fact issue on the additional elements of such a claim,
then the claim will survive summary judgment. See id. We agree with
these descriptions of the anti-fracturing rule, which has been applied to
accountant malpractice as well, including suits asserting claims for
fraud and breach of fiduciary duty. Wang, 2021 WL 2325085, at *5–6;
J.A. Green Dev. Corp., 2016 WL 3547964, at *6–8.
We have noted the anti-fracturing rule’s existence, but we have
not expressly applied it. See Starwood Mgmt., LLC v. Swaim,
530 S.W.3d 673, 678 (Tex. 2017) (describing a court of appeals’ dismissal
of a breach of fiduciary duty claim under the rule). We apply the rule
today. The law has long provided a remedy for clients who can prove
their allegations of professional negligence, but it does so within a
well-developed body of common law and statutory law applicable to such
claims. The anti-fracturing rule appropriately seeks to ensure that
professional malpractice allegations are litigated under the law
applicable to professional malpractice claims. As one of the first
anti-fracturing cases reasoned:

8
Nothing is to be gained by fracturing a cause of action
arising out of bad legal advice or improper representation
into claims for negligence, breach of contract, fraud or some
other name. If a lawyer’s error or mistake is actionable, it
should give rise to a cause of action for legal malpractice
with one set of issues which inquire if the conduct or
omission occurred, if that conduct or omission was
malpractice and if so, subsequent issues on causation and
damages. Nothing is to be gained in fracturing that cause
of action into three or four different claims and sets of
special issues.
Sledge, 759 S.W.2d at 2. As another court of appeals explained, “The
rule also serves to prevent legal-malpractice plaintiffs from
opportunistically transforming a claim that sounds only in negligence
into other claims to avail themselves of longer limitations periods, less
onerous proof requirements, or other tactical advantages.” Beck,
284 S.W.3d at 427 (cleaned up).
The anti-fracturing rule comports with this Court’s recognition,
in other contexts, that the law should not reward artful pleading. See,
e.g., Yamada v. Friend, 335 S.W.3d 192, 196 (Tex. 2010). 5 Where

5 “It is well settled that such artful pleading and recasting of claims is

not permitted.” Yamada, 335 S.W.3d at 196. In Yamada, we held that “if the
gravamen or essence of a cause of action is a health care liability claim, then
allowing the claim to be split or spliced into a multitude of other causes of
action with differing standards of care, damages, and procedures would
contravene the Legislature’s explicit requirements.” Id. at 197. See also Pinto
Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428, 433 (Tex. 2017) (“Our holding
today . . . prevents litigants from avoiding a forum-selection clause with ‘artful
pleading.’”); Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 636 (Tex. 2007) (“This
analysis is consistent with our holdings that focus the legal treatment of claims
on the true nature of disputes rather than allow artful pleading to morph
contract claims into fraud causes of action to gain favorable redress under the
law.”); Murphy v. Russell, 167 S.W.3d 835, 838 (Tex. 2005) (“We reaffirm that
a claimant cannot escape the Legislature’s statutory scheme by artful

9
possible, courts should look to the gravamen or underlying nature of the
claim and apply the law accordingly. “The gravamen of a claim is its
true nature, as opposed to what is simply alleged or artfully pled,
allowing courts to determine the rights and liabilities of the involved
parties.” B.C. v. Steak N Shake Operations, Inc., 512 S.W.3d 276, 283
(Tex. 2017). 6
Importantly, the anti-fracturing rule does not categorically bar a
client from pursuing multiple causes of action against a professional,
including claims for fraud or breach of fiduciary duty. Instead, the rule
prohibits plaintiffs from attaching these labels, and others like them, to
their allegations when the gravamen of the allegations is that the
defendant failed to exercise the requisite degree of care or skill in the
provision of professional services. If additional facts supporting
additional claims are supported by the allegations and evidence, then
the gravamen of the claim may extend beyond a claim for professional
negligence, and the plaintiff may rightly maintain such a claim. In other
words, if the gravamen of the claim “goes beyond what traditionally has
been characterized as [professional] malpractice,” then additional
claims beyond professional negligence may be viable. Duerr, 262 S.W.3d
at 70.

pleading.”); Garland Cmty. Hosp. v. Rose, 156 S.W.3d 541, 543 (Tex. 2004)
(“Plaintiffs cannot use artful pleading to avoid the MLIIA’s requirements when
the essence of the suit is a health care liability claim.”).
6 See also CHRISTUS Health Gulf Coast v. Carswell, 505 S.W.3d 528,

534 (Tex. 2016) (when determining whether a claim is a health care liability
claim, “we examine the underlying nature and gravamen of the claim, rather
than the way it is pleaded”).

10
As we said in Latham v. Castillo, there is a “difference between
negligent conduct and deceptive conduct,” and in a case involving
genuine allegations of fraud, “[t]o recast th[e] claim as one for legal
malpractice is to ignore this distinction.” 972 S.W.2d 66, 69 (Tex. 1998).
The anti-fracturing rule does not ask courts to blur the distinction
between negligent conduct and deceptive conduct. Instead, it requires
courts to examine whether the plaintiff has blurred such distinctions by
framing its professional negligence allegations as something more in
order to gain a litigation advantage. Thus, if a plaintiff raises a genuine
fact issue on the elements of additional claims that truly extend beyond
the scope of what has traditionally been considered a professional
negligence claim, then the additional claims may survive summary
judgment under the anti-fracturing rule. In this way, application of the
anti-fracturing rule may often resemble application of the familiar
summary-judgment standards. The rule nevertheless serves an
important purpose by requiring a searching analysis of the gravamen of
the plaintiff’s claims and thereby guarding against efforts to artfully
evade the procedural and substantive rules applicable to allegations of
professional malpractice.
B.
The court of appeals suggested that Rivas’s fraud claim was not
barred by the anti-fracturing rule in part because the alleged
deficiencies in the Accountants’ work were outside the scope of the
parties’ engagement letters, which contemplated only the preparation of
consolidated financial statements. 684 S.W.3d at 864. This was error.
All of the Accountants’ alleged work for Rivas—and all of the

11
Accountants’ alleged errors—fell well within the scope of services that
an outside accountant might commonly perform for a small-business
client. The Accountants in this case, and accountants generally, may
often provide many services that extend beyond the scope of a company’s
financial statements. The anti-fracturing rule is not limited to the
subject matter of the client’s engagement letter and does not require
detailed analysis of whether the allegedly deficient professional services
were, in a technical sense, accounting services (or legal services or other
services, as the case may be). The rule extends to any allegations that
traditionally sound in professional negligence, as do the allegations
here.
The court of appeals further reasoned that Rivas successfully
alleged fraudulent misrepresentations by the Accountants sufficient to
distinguish his claims from traditional malpractice claims under the
anti-fracturing rule. We disagree. The relevant allegations are as
follows. Rivas alleged that Brandon Pitts misrepresented that he and
his staff were proficient with the QuickBooks computer program. The
Accountants allegedly misused QuickBooks, resulting in duplicated
assets and overstatement of shareholder equity in the financial
statements. These errors caused an overpayment of taxes and a large
overstatement of the entities’ net worth. Despite the discovery of these
mistakes in financial statements in September 2016, Brandon Pitts gave
the statements to Jenny White, who then forwarded them to lenders.
Brandon later suggested concealing the errors by “amortizing” them “as
an expense to income” over a period of 10 to 15 years, but Rivas rejected
this proposal. When the errors were revealed to Rivas, he was advised

12
by legal counsel that he needed to circulate corrected financials to his
lenders, and he did so. The lenders then demanded that Rivas make
additional deposits and declined to provide further credit. The loss of
credit and overpayment of taxes led to the collapse of Rivas’s business.
A fraud claim premised on the above facts is barred by the
anti-fracturing rule because the gravamen of the claim is that the
Accountants failed to provide competent accounting services, which
damaged Rivas’s business. The crux of the claim—indeed the entirety
of the claim and supporting evidence—is that the Accountants made
accounting errors that, when revealed to lenders, led to a loss of credit,
which in turn was fatal to the business. This is a straightforward
professional malpractice allegation.
The separate fraud claim boils down to the allegation that the
Accountants misrepresented their proficiency with QuickBooks and the
allegation that the Accountants did not disclose their errors to Rivas or
to the banks as soon as they should have. Overstating one’s professional
competence is a classic example of malpractice. 7 Likewise, the
Accountants’ alleged failure to timely disclose their errors does not
extend “beyond what traditionally has been characterized
as [professional] malpractice.” Duerr, 262 S.W.3d at 70. The gravamen
of the fraud claim is that the Accountants knew they were incompetent
but proceeded anyway, which led to mistakes they later knew about.

7 See, e.g., Aiken, 115 S.W.3d at 28–29 (allegation that attorney “falsely

represented he was prepared to go forward and try [the plaintiff’s] case” does
not state a claim beyond professional negligence); Beck, 284 S.W.3d at 431 (a
lawyer’s “‘fail[ure] to disclose’ his incompetence” concerns the ordinary duty of
care and cannot support a non-negligence claim).

13
Then, rather than immediately confess their mistakes, they hoped
nothing would come of it. Finally, after the mistakes were revealed, they
suggested ways to hide them. These are serious allegations of
professional misconduct. But there is no evidence that the Accountants
were engaged in a fraudulent scheme against Rivas or that they
otherwise intended to harm him. Nor is there any evidence that the
Accountants’ alleged deception is what harmed Rivas. To the contrary,
the harm to Rivas stemmed from the accounting errors themselves, not
from any alleged misrepresentations associated with them.
At bottom, the heart of the plaintiffs’ allegations is that the
Accountants’ woeful incompetence harmed Rivas’s business. These are
allegations for which Rivas could have recovered, had he timely brought
them and proved them. But they are allegations of accounting
malpractice and must therefore be treated as such by the courts. Under
the anti-fracturing rule, these allegations cannot be reframed as a fraud
claim to avoid the two-year statute of limitations applicable to
malpractice claims.
C.
The court of appeals also held that the anti-fracturing rule did not
bar Rivas’s breach of fiduciary duty claim. This claim fails regardless of
the anti-fracturing rule.
Rivas’s breach of fiduciary duty claim largely tracks his other
claims. He alleges that the Accountants breached their fiduciary duties
when they created erroneous financial statement compilations that
severely damaged Rivas’s business. At the summary judgment hearing,
Rivas’s counsel stated that the damages for the negligence claim and the
breach of fiduciary duty claim were the same.

14
The courts of appeals have often rejected breach of fiduciary duty
claims under the anti-fracturing rule, and we agree that in many cases
the rule may bar such claims when they amount to re-packaged
malpractice claims. 8 Here, however, we need not apply an
anti-fracturing analysis to the breach of fiduciary duty claims because,
on the undisputed facts, no fiduciary duty existed as a matter of law.
When the question is whether a plaintiff has sufficiently alleged
additional claims beyond a professional malpractice claim, the answer
under both the anti-fracturing rule and under conventional
summary-judgment standards may often turn on whether the
allegations and evidence support the additional elements of the
additional claim. In this case, we need not ask whether the breach of
fiduciary duty claim runs afoul of the anti-fracturing rule, because there
was no fiduciary duty to breach.
Unlike the attorney–client relationship, Texas courts have not
held that an accountant–client relationship automatically gives rise to
fiduciary duties under Texas law. See Slack v. Preuss,
No. 06-21-00018-CV, 2022 WL 247824, at *7 (Tex. App.—Texarkana
Jan. 27, 2022, pet. denied); In re Est. of Abernethy, 390 S.W.3d 431,
438–39 (Tex. App.—El Paso 2012, no pet.). Rivas does not argue

8 See, e.g., Beck, 284 S.W.3d at 431–39 (holding the anti-fracturing rule

barred claims that attorney breached fiduciary duty by failing to disclose
substance abuse and conflict of interest); Duerr, 262 S.W.3d at 71–75 (holding
the anti-fracturing rule barred claims that attorneys breached fiduciary duties
in settling lawsuit); Kimleco Petroleum, 91 S.W.3d at 923–24 (holding the
anti-fracturing rule barred claims that attorney breached fiduciary duty in
failing to designate qualified expert and misleading clients about another
lawsuit).

15
otherwise, so we have no occasion to comment on that question. Rivas
argues instead that an informal fiduciary relationship arose due to his
close personal and business relationship with his accountants. We
disagree.
We have held in the past that an informal fiduciary relationship
can arise from personal relationships of special trust and confidence.
Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176–77
(Tex. 1997). Neither party has questioned that precedent, and we need
not reconsider it here in order to reject Rivas’s argument that fiduciary
duties arose under these facts. 9
Because a fiduciary relationship entails exceptionally high duties,
this Court has repeatedly held that the law will not lightly impose
fiduciary duties on the parties in a business relationship. E.g., Meyer v.
Cathey, 167 S.W.3d 327, 331 (Tex. 2005); Schlumberger, 959 S.W.2d
at 177. Under our precedent, in order for there to be any possibility that
parties to a business relationship owe each other informal fiduciary
duties arising from a special relationship of trust and confidence, the
special relationship must have existed “prior to, and apart from, the
agreement made the basis of the suit.” Meyer, 167 S.W.3d at 331;
Schlumberger, 959 S.W.2d at 177.

9 The concurring Justices take a dim view of this Court’s precedent on

“informal” fiduciary duties. Post at 2 (Huddle, J., concurring). If a party
questioned that precedent or if the outcome of the case turned on the
precedent’s continuing vitality, we might have occasion to decide whether we
share the concurring Justices’ view. Because we have not considered whether
to overturn or revise our precedent, nothing in this opinion should be taken as
reaffirming or agreeing with it. We simply decide the case under the existing
precedent, which the parties agree governs their case.

16
Further, a party’s subjective belief that his business associate is
a fiduciary is always insufficient to create such a relationship. See
Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex. 1962); Gregan v. Kelly,
355 S.W.3d 223, 229 (Tex. App.—Houston [1st Dist.] 2011, no pet.)
(“Kelly’s subjective trust and feelings alone do not justify transforming
the parties’ arm’s-length dealings into a relationship of trust and
confidence.”). Were the law otherwise, an unusually trusting person
could unilaterally impose fiduciary duties on business associates who do
not expect to be subjected to such heightened duties. As we have noted:
The fact that one businessman trusts another, and relies
upon his promise to perform a contract, does not rise to a
confidential relationship. Every contract includes an
element of confidence and trust that each party will
faithfully perform his obligation under the contract.
Neither is the fact that the relationship has been a cordial
one, of long duration, evidence of a confidential
relationship.
Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 S.W.2d
591, 594–95 (Tex. 1992) (citations, footnotes omitted), superseded by
statute on other grounds as noted in Subaru of Am., Inc. v. David
McDavid Nissan, Inc., 84 S.W.3d 212, 225–26 (Tex. 2002). In the same
vein, evidence that business associates were “friends and frequent
dining partners” is legally insufficient to establish a fiduciary
relationship. Meyer, 167 S.W.3d at 331.
Rivas mustered no evidence supporting the existence of an
informal fiduciary relationship between himself and Brandon Pitts or
any other defendant. The claimed fiduciary relationship allegedly arose
from the following facts. Rivas met Brandon and Linda Pitts in 2006 or
2007. Their sons were friends and at one time were roommates. Rivas

17
retained the Accountants in 2007. The accounting and consulting
services became more extensive over time, and Rivas relied heavily on
the Accountants to provide accurate and proper accounting. Rivas had
“a high degree of trust and confidence” in Brandon Pitts and therefore
relied on decisions the Accountants made. Rivas and his wife had
dinners with Brandon and Linda Pitts on an unspecified number of
occasions. Rivas built a house for Brandon at a discount. Brandon spent
many hours explaining the accounting process to Rivas without charge.
This evidence comes nowhere close to creating a fiduciary
relationship under our precedents. There is no evidence that a special
relationship of trust and confidence preceded the parties’ business
agreement. Rivas’s subjective trust in the Accountants is no evidence of
a fiduciary relationship. Providing discounted commercial services—
like home-building—to a business associate does not impose fiduciary
duties on the recipient. And the evidence offered to show a special
personal relationship between Rivas and the Accountants amounts only
to business conversations, a few dinners, and a close friendship between
their sons. None of these allegations, even taken together and viewed
in the light most favorable to Rivas, could support the imposition of
informal fiduciary duties on Pitts or any other defendant under this
Court’s precedent.
It also bears noting that nothing in the parties’ engagement
letters suggests that either party contemplated that the law would treat
them as having a special relationship of trust and confidence. On the
contrary, the letters state: “Our engagement cannot be relied upon to
identify or disclose any financial statement misstatements, including

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those caused by fraud or error, or to identify or disclose any wrongdoing
within the entity or noncompliance with law and regulations.” The
letters place on Rivas the “overall responsibilities” in “[t]he selection of
accounting principles generally accepted in the United States”; “[t]he
preparation and fair presentation of financial statements in accordance
with accounting principles generally accepted in the United States”;
“[t]he design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of the financial
statements”; and “[t]he prevention and detection of fraud.”
These written contracts provide a strong, objective indication that
these parties, however friendly and cordial their relationship may have
been, contemplated that the law would treat them as having an
arm’s-length business relationship—not a fiduciary relationship giving
rise to special legal duties. To impose a fiduciary duty on a party who
enters into a business transaction using an engagement letter that
disclaims such duties and goes to great pains to hold the counter-party
at arm’s length would be to give judges and juries—rather than the
parties themselves—the authority to define the parameters of the
parties’ legal relationship. The freedom of contract includes the freedom
to define the nature and scope of a business relationship in a way that
forecloses the imposition by courts of duties inconsistent with the
parties’ agreement. See In re Prudential Ins. Co. of Am., 148 S.W.3d
124, 129–33 (Tex. 2004); Gym-N-I Playgrounds, Inc. v. Snider,
220 S.W.3d 905, 909–14 (Tex. 2007); Schlumberger, 959 S.W.2d at
181–82. The parties did so here, and Rivas’s evidence about their

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personal relationship cannot displace the choices reflected in the parties’
written agreement.
Because there was no fiduciary relationship as a matter of law,
summary judgment on the breach of fiduciary duty claim was proper.
III.
For the foregoing reasons, the district court correctly granted
summary judgment for the defendants on all claims. The judgment of
the court of appeals is affirmed in part and reversed in part, and
judgment is rendered for the defendants on all claims.

James D. Blacklock
Chief Justice

OPINION DELIVERED: February 21, 2025

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