The exact moment a statute of limitations begins to run is not always black and white. In a case where water and mud were directed onto a property by an adjacent property’s construction project the Texas Court of Appeals, basing its holding on accrual of nuisance claims rather than accrual of a negligence action, found that the two-year statute of limitations did not accrue until property damage occurred, even though plaintiff knew at a much earlier date that the condition might cause property damage.
Hussion St. Bldgs., LLC (“Hussion”) owned property and a warehouse next to a large construction project referred to as Fenix Estates (Project) where housing was being developed by HCHA. Qualified Construction (“Qualified”) was retained to build the Project and TRW Engineers (“TRW”) provided civil engineering design for the Project. In 2017, Hussion claimed that Qualified inadvertently cut the sewage line to Hussion's property. Hussion sued various parties for the damage and also alleged that the fill placed on the Project's land to elevate its foundation above the foundation of Hussion's warehouse caused the natural flow of water to change. Hussion amended its petition in September 2018 to add TRW, but failed to attach the requisite Certificate of Merit to its petition. TRW used this procedural mistake to obtain an order dismissing it from the case. Hussion appealed the trial court’s dismissal and lost on appeal. In addition, Hussion sought a permanent injunction prohibiting HCHA and Qualified from redirecting or changing the grade of the Project site in any way that would alter the natural flow of water to Hussion's property. The trial court denied Hussion's request and the construction of the Project continued.
In March 2020, Hussion sued TRW again asserting that TRW's scope of work included providing a water detention plan for the Project and that TRW failed to provide such plan. Hussion asserted that, because of TRW’s failure, water and mud flowed onto Hussion's property and warehouse during four normal rainfall events beginning in 2018. Hussion asserted claims of negligence, gross negligence, professional negligence, and breach of fiduciary duty against TRW. TRW filed a motion for summary judgment based, in part, on a statute of limitations defense asserting that Hussion knew about the drainage issues as early as October 2017, more than two years before filing suit. The trial court agreed with TRW and granted summary judgment on TRW’s limitations defense.
TRW’s motion for summary judgment also asserted, as a defense to Hussion’s claim for breach of fiduciary duty, that licensed engineers do not owe non-clients any fiduciary duties under Texas law. The trial court agreed and granted the motion which defeated Hussion’s breach of fiduciary claim. On appeal, the Texas Court of Appeals considered both the limitations and breach of fiduciary duty issues.
Negligence under a Nuisance Analysis
TRW based its motion for summary judgment on the theory that Hussion's claim was outside the statute of limitations and therefore, barred. TRW as the movant had the burden to show that the cause of action accrued after the time to file by law had passed. The general rule is a negligence cause of action accrues when the defendant's negligence causes the plaintiff a legal injury, which entitles the plaintiff to some relief under the law. Regency Field Servs., LLC v. Swift Energy Operating, LLC, 622 S.W.3d 807, 815 (Tex. 2021).
Hussion asserted that the cause of action accrued on or about May 5, 2018, when the Project's nonexistent water detention plan first resulted in water and mud flooding Hussion's property; and, since Hussion filed suit against TRW in March 2020, the statute of limitations had not yet run.
To analyzer the issue of when the action accrued, the court considered nuisance law. Although neither party expressly mentioned nuisance, the court identifies other court decisions with similar damages basing their holdings on nuisance law. "Although neither party expressly made nuisance arguments at trial, or the appeal, instead of characterizing the claims as garden-variety negligence claims… deciding to use the term nuisance is a matter of semantics." Crosstex v. N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d, 580, 604 (Tex. 2016). A nuisance "is created when a legal injury involves interference with the use and enjoyment of the land." Id.
In determining when a cause of action accrues in a nuisance case, the court differentiated between cases in which the nuisance injury is permanent versus cases in which the nuisance injury is temporary. If the nuisance injury is permanent, then a single cause of action accrues for all damages when the injury first occurs or is discovered for the first time. If the nuisance injury is temporary, then a new cause of action accrues each time a new injury occurs. "Successive actions may be brought for the injuries as they occur," Austin & N.W. Ry.Co. v. Anderson, 79 Tex. 427, 431, 15 S.W. 484 (1891).
The appellate court ruled that TRW's argument that Hussion was aware of a potential injury back in 2017 alone is not sufficient to show that the action accrued. Instead, the court agreed with Hussion's argument that a cause of action accrued with each incident of flooding. Because each of the flooding incidents happened within two years before suit was filed against TRW, the deadline for the statute of limitations had not run. Because the court used the nuisance analysis, it did not agree with TRW's contention that the statute of limitations begins to run the moment the landowner discovers the potential for an injury.
Breach of Fiduciary Duty
Hussion also alleged that TRW breached it duty of fiduciary duty. In the complaint, Hussion looked to Tex. Admin, Code §137.55- the duty to be objective and truthful, and §137.59, which discusses the duty of competence. That section states, "Engineers shall be entrusted to protect the health, safety, property, and welfare of the public in the practice of their profession. The public as used in this section and other rules is defined as any individual(s), client(s), business or public entities, or any member of the general population whose normal course of life might reasonably include an interaction of any sort with the engineering work of the license holder. Engineers shall not perform any engineering function which, when measured by generally accepted engineering standards or procedures, is reasonably likely to result in the endangerment of lives, health, safety, property, or welfare of the public. Any act or conduct which constitutes incompetence or gross negligence, or a criminal violation of law, constitutes misconduct and shall be censurable by the board."
22 TEX. ADMIN. CODE § 137.55(a), (b). Section 137.57 goes on to say, “Engineers shall issue statements only in an objective and truthful manner.” Id. § 137.57(a). And section 137.59 provides, “Engineers shall practice only in their areas of competence.” Id. § 137.59(a).
TRW moved for summary judgment opposing Hussion's breach-of-fiduciary-duty claim on the ground that engineers do not owe fiduciary duties to non-clients under Texas law, which was aptly stated Texas courts hold that engineers owe their own clients fiduciary duties, but do not owe such duties to a third parties. See Sheffield Dev. Co. v. Carter & Burgess, Inc., No. 02-11-00204-CV, 2012 WL 6632500, at *10 (Tex. App.—Fort Worth Dec. 21, 2012, pet. dism'd).
Hussion's faulty argument relies on the idea that TRW owes him an informal fiduciary duty, also referred to as a confidential relationship. A confidential relationship is present when, "One person trusts in and relies upon another, whether the relation is a moral, social, domestic or merely personal one.” Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992). For an informal fiduciary duty to exist in the context of a business relationship, “the special relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of the suit.” Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 288 (Tex. 1998). In the present case, Hussion is not positioned in a relationship of trust with TRW under any business agreement or otherwise. There is not an independent relationship of trust that exists independently outside an engineer-client agreement and relationship that TRW maintains with owners and others involved in the construction of the land. TRW and Hussion do not have a relationship that imposes any type of legal duty between them.
Since TRW did not owe a formal or informal fiduciary duty to Hussion as a third party and non-client, the trial court was proper in granting TRW's motion for summary judgment.