Opinion filed May 30, 2014




                                     In The


        Eleventh Court of Appeals
                                  __________

                              No. 11-12-00253-CV
                                  __________

           SANTINO AGUIRRE, BRENDA ECHAVARRIA,
               AND LEROY AGUIRRE, Appellants
                                       V.
     SCOTT S. AGUIRRE AND IRMA S. AGUIRRE, Appellees


                    On Appeal from the County Court at Law
                             Tom Green County, Texas
                         Trial Court Cause No. 11C458-L


                     MEMORANDUM OPINION
      Santino Aguirre, Brenda Echavarria, and Leroy Aguirre (Appellants) appeal
from the trial court’s take-nothing summary judgment in favor of Scott S. Aguirre
and Irma S. Aguirre (Appellees). We reverse and remand.
                                                   Background
      On September 20, 2011, Appellants brought suit against Appellees.1
Santino, Brenda, Leroy, and Scott are siblings. Their mother is Lydia Aguirre.
      Appellants alleged in their petition that, on November 22, 1996, Lydia
executed a warranty deed in which she conveyed the house located at 2002 Gunter
Street in San Angelo, Texas, to each of them and Scott. At that time, Scott was
married to Irma, and Scott and Irma lived in the house. Appellants alleged that, in
1998, Appellees requested them to sign a document that would allow Appellees to
use the house as collateral for a home improvement loan. Appellants also alleged
that they signed the document.                      Appellants further alleged that “[Appellees]
extracted the signatures on the loan agreement document and fraudulently placed
them on a Warranty Deed.” The deed was purportedly signed by Appellants on
April 10, 1998, and it purportedly conveyed Appellants’ interests in the house to
Appellees. The deed was filed in the Official Public Records of Real Property of
Tom Green County on April 30, 1998, and it was recorded in the Official Public
Records of Real Property of Tom Green County on May 7, 1998. Based on the
filing of the warranty deed, Appellants alleged a common-law fraud claim against
Appellees. Appellants sought to recover damages in the amount of $75,000.
      Appellees raised the statute of limitations as an affirmative defense in their
answer. Appellees alleged that “[Appellants] were charged with notice of their
claims at or near the time of the execution and recording of the deed and failed to
bring suit in a timely manner.” Therefore, Appellees asserted that the statute of
limitations barred Appellants’ suit.
      Appellees filed a traditional motion for summary judgment in which they
asserted that the four-year statute of limitations that applies to fraud claims barred
Appellants’ suit. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(4) (West
      1
          Appellees have not filed an appellate brief.

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2002).    Appellees’ motion was based on the assertion that Appellants had
constructive notice of the allegedly fraudulent warranty deed because it was
recorded in the official public records. Specifically, Appellees stated in the motion
that “[Appellants] were charged with notice of the contents of the public records,
including the Warranty Deed; therefore, their cause of action for fraud accrued no
later that [sic] May 7, 1998.” Because Appellants did not file their suit until more
than four years after the deed was recorded, Appellees asserted that the suit was
barred by limitations.
      Appellants filed a response to Appellees’ motion for summary judgment.
Appellants asserted that the filing and recording of the warranty deed in the public
records did not charge them with constructive notice of their fraud claim against
Appellees. Each of the Appellants signed an affidavit in support of the response.
In the affidavits, Appellants stated that they “did not become aware of the
fraudulent deed until October 2009.” Appellants asserted in their response to the
motion for summary judgment that they did not have actual or constructive
knowledge of the alleged fraud until October 2009 and that, therefore, the statute
of limitations did not bar their suit.
      The trial court held a hearing on Appellees’ motion for summary judgment.
Following the hearing, the trial court entered a final summary judgment in favor of
Appellees.
                                    Issues on Appeal
      Appellants present two issues for review. They contend that the trial court
erred when it granted summary judgment (1) because the recording of the warranty
deed in the public records did not impute constructive notice of the deed to them
for the purpose of the accrual of their fraud claim and (2) because the question of
when they discovered or, in the exercise of reasonable diligence, should have
discovered the fraud was a fact issue that precluded summary judgment.
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                                Standard of Review
      We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). To prevail on a traditional motion for summary
judgment, the movant must show that there is no genuine issue of material fact and
that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.
2009). A defendant who moves for summary judgment on the affirmative defense
of limitations has the burden to conclusively establish that defense. KPMG Peat
Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).
To meet this burden, the defendant must (1) conclusively prove when the cause of
action accrued and (2) negate the discovery rule, if it applies and if it has been
raised, by proving as a matter of law that there is no genuine issue of material fact
about when the plaintiff discovered or, in the exercise of reasonable diligence,
should have discovered the nature of its injury. Id.; Salinas v. Gary Pools, Inc., 31
S.W.3d 333, 336 (Tex. App.—San Antonio 2000, no pet.).
      In our review, we take as true all evidence favorable to the nonmovant, and
we indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
2003). Evidence is conclusive only if reasonable minds could not differ in their
conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).
                                      Analysis
      A four-year statute of limitations applies to a fraud claim. CIV. PRAC. &
REM. § 16.004(a)(4). A suit for fraud must be brought within four years after the
day the cause of action accrues. Id. Generally, a cause of action accrues and
limitations begin to run when a wrongful act causes a legal injury. S.V. v. R.V.,
933 S.W.2d 1, 4 (Tex. 1996). However, the discovery rule applies in common-law
fraud cases. Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex. 1997); Galindo v.
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Snoddy, 415 S.W.3d 905, 910 (Tex. App.—Texarkana 2013, no pet.). When the
discovery rule applies, the cause of action does not accrue and, consequently, the
limitations period does not begin to run until the plaintiff knows or, through the
exercise of reasonable diligence, should know of the facts giving rise to the cause
of action. Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001);
HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998).
      Appellees asserted in their motion for summary judgment that Appellants
had constructive notice of the warranty deed because it was filed and recorded in
the public records. Therefore, Appellees argued that Appellants’ fraud cause of
action accrued no later than May 7, 1998, which was the date the deed was
recorded.   In some circumstances, constructive notice creates an irrebuttable
presumption of actual notice. HECI, 982 S.W.2d at 887; Noble Mortg. & Invs.,
LLC v. D & M Vision Invs., LLC, 340 S.W.3d 65, 76 (Tex. App.—Houston [1st
Dist.] 2011, no pet.). Generally, the doctrine of constructive notice is applied
when a person knows where to find the relevant information, and had a duty to find
that information, but failed to seek it out. See Little v. Smith, 943 S.W.2d 414, 421
(Tex. 1997); Salinas, 31 S.W.3d at 336. The doctrine has limited application, and
when the rationale behind application of the doctrine does not exist, public records
will not be held to create an irrebuttable presumption of actual notice. HECI, 982
S.W.2d at 887; Salinas, 31 S.W.3d at 336–37.
      Courts will impose constructive notice of the contents of a public record
when a need for stability and certainty exists.       The HECI court noted that
constructive notice of the contents of real property records is necessary to preserve
stability and certainty regarding title to real property. HECI, 982 S.W.2d at 887.
Thus, real property records constitute constructive notice to buyers, but the courts
have not generally imposed on others a similar irrebuttable presumption of notice.
Id.; Lee v. Perez, 120 S.W.3d 463, 467 (Tex. App.—Houston [14th Dist.] 2003, no
                                         5
pet.). The court in HECI also noted that constructive notice of the contents of
probate records in in rem proceedings is necessary because such proceedings are
intended to bind all persons. HECI, 982 S.W.2d at 887. Accordingly, a person
interested in a probated estate is charged with notice of the will’s provisions, and a
claim for fraud based on an exclusion from a will must be brought within the
applicable limitations period. Id. (citing Mooney v. Harlin, 622 S.W.2d 83, 85
(Tex. 1981)).
      In this case, the title to the house is not in issue, and this case is not a probate
proceeding. Instead, Appellants filed a suit for damages based on an allegedly
fraudulent deed that was filed after they obtained their interests in the property.
Courts have not imposed constructive notice of real property records in similar
cases that have involved allegations of fraud or violations of the Deceptive Trade
Practices-Consumer Protection Act.2 Ojeda de Toca v. Wise, 748 S.W.2d 449, 451
(Tex. 1988); Salinas, 31 S.W.3d at 337; Boucher v. Wallis, 236 S.W.2d 519, 526
(Tex. Civ. App.—Eastland 1951, writ ref’d n.r.e.).
      There was no summary judgment evidence that Appellants had a reason to
believe that their brother and his wife would file a fraudulent deed in an attempt to
divest Appellants of their interests in the property.                    In the absence of such
evidence, Appellees failed to establish that Appellants had a duty to periodically
check the public records to make sure that no one had filed a fraudulent deed that
related to their interests in the property. Boucher, 236 S.W.2d at 526. The purpose
of the recording laws is to provide notice to subsequent purchasers of the interests
conveyed in instruments and not to give protection to perpetrators of fraud. Id.
Based on the facts, the rationale for imposing constructive notice is lacking in this
case. Therefore, we conclude that Appellants did not have constructive notice of
the allegedly fraudulent warranty deed.
      2
          TEX. BUS. & COM. CODE ANN. §§ 17.41–.63 (West 2011 & Supp. 2013).

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      Appellees failed to meet their summary judgment burden to establish that
Appellants’ cause of action accrued more than four years before Appellants filed
suit. Appellees failed to prove that the statute of limitations barred Appellants’ suit
as a matter of law. Accordingly, the trial court erred when it granted summary
judgment to Appellees.       Appellants’ first and second issues on appeal are
sustained.
                                   This Court’s Ruling
      We reverse the judgment of the trial court, and we remand this cause to the
trial court for further proceedings consistent with this opinion.




                                                JOHN M. BAILEY
                                                JUSTICE


May 30, 2014
Panel consists of: Wright, C.J.,
Willson, J., and Bailey, J.




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