McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests
Texas Supreme Court
991 S.W.2d 787 (1999)
F.E. Appling Interests (Appling) was the managing partner of Boca Chica Development Company (Boca) (plaintiffs). Boca obtained credit from Victoria Savings Association (VSA) to finance a project. VSA declined to extend additional credit to Boca to complete the project. Boca went bankrupt and brought a lender-liability claim against VSA. Concerned about VSA’s solvency, Boca agreed to settle the claim but wanted assurance that the settlement would be enforceable against the Federal Savings and Loan Insurance Corporation (FSLIC). VSA’s law firm, McCamish, Martin, Brown & Loeffler (McCamish) (defendant) represented in the settlement agreement that the agreement met the statutory requirements for binding the FSLIC. In fact, the agreement had not been approved by the VSA board as required. VSA was declared insolvent. A federal court held that the agreement did not bind the FSLIC. Appling and Boca sued McCamish, claiming that the firm negligently misrepresented that the VSA board had approved the agreement. The court granted summary judgment to McCamish, finding that McCamish owed no duty to Appling. The court of appeals reversed. McCamish petitioned for review.
Rule of Law
Holding and Reasoning (Hankinson, J.)
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