July 5, 2022

Volume XII, Number 186

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Court Holds That Engineer Does Not Owe Fiduciary Duties To A Non-Client

In Hussion St. Bldgs., LLC v. TRW Eng’rs, Inc., the plaintiff landowner claimed its real property was injured by the failure of an engineering firm involved in developing the adjoining property to include a water-detention plan. No. 14-20-00641-CV, 2022 Tex. App. LEXIS 2193 (Tex. App.—Houston [14th Dist.] April 5, 2022, no pet. history). The landowner asserted claims of negligence and breach of fiduciary duty, and the trial court granted the engineering firm’s summary-judgment motion on the grounds that limitations barred the negligence claim and licensed engineers do not owe fiduciary duties to non-clients. The court of appeals reversed the summary judgment on the negligence claim because the engineering firm failed to conclusively establish that the landowner’s claims accrued more than two years before this suit was filed. Turning to the breach of fiduciary duty claim, the court held:

TRW moved for summary judgment on Hussion’s breach-of-fiduciary-duty claim on the ground that engineers do not owe fiduciary duties to non-clients under Texas law. TRW is correct. Indeed, courts have declined to hold that engineers owe fiduciary duties even to their own clients. See Sheffield Dev. Co. v. Carter & Burgess, Inc., No. 02-11-00204-CV, 2012 Tex. App. LEXIS 10599, 2012 WL 6632500, at *10 (Tex. App.—Fort Worth Dec. 21, 2012, pet. dism’d). The provisions of the Administrative Code on which Hussion relies do not create fiduciary duties owed to the public at large, nor do they purport to do so. They do not refer to “duty” at all, much less to the elevated duties owed by fiduciaries.

Hussion nevertheless argues that the Administrative Code creates an informal fiduciary relationship. This argument misapprehends the nature of an informal fiduciary relationship. An informal fiduciary relationship, also known as a “confidential relationship,” may arise “where one person trusts in and relies upon another, whether the relation is a moral, social, domestic or merely personal one.” … Fiduciary duties arise only in the context of fiduciary relationships, and Hussion does not claim to have had a relationship of trust and confidence with TRW that existed independently from, and prior to, TRW’s work on the Project.… If a business transaction is involved, “the special relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of the suit.” … Because TRW owed no fiduciary duties to Hussion, we conclude that the trial court properly granted summary judgment against Hussion on its breach-of-fiduciary-duty claim.

Id.

© 2022 Winstead PC.National Law Review, Volume XII, Number 119
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About this Author

David Johnson Financial Institution lLtigation Winstead Law Firm Fort Worth Texas
Managing Shareholder - Fort Worth

David maintains an active trial and appellate practice and has consistently worked on financial institution litigation matters throughout his career. David is the primary author of the Texas Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. 

David's financial institution experience includes (but is not limited to): breach of contract, foreclosure litigation, lender liability, receivership and injunction remedies upon default, non-recourse and other real estate lending, class...

817.420.8223
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