The Fort Worth Court of Appeals has upheld a trial court order granting Defendants’ Rule 91a motion to dismiss fraud and DTPA claims.
The Fort Worth Court of Appeals affirmed the final judgment of the Tarrant County District Court, finding that claims brought by Dr. Violetta Lozovyy for misrepresentation and justifiable reliance were unsubstantiated. The trial court had granted the Appellees’ rule 91a dismissal motion for the fraud and DTPA claims against Lincoln Property Company, et al., giving rise to this appeal.
High Risk Pregnancy Doctors, PLLC and Violetta Lozovyy v. Lincoln Property Company d/b/a Lincoln Harris CSG and Douglas Maclay III (No. 02-25-00386-CV; January 30, 2026) arose from a dispute over the construction of a lease for medical office space. Dr. Lozovvy, the sole member of HRPD (a maternal fetal medicine practice), Lozovyy contracted with HRT Properties of Texas, LTD through Lincoln Harris CSG to lease a space in the Baylor Medical Center at Grapevine. The contract contained a requirement that the tenant obtain staff privileges within the Hospital system within 120 days from the commencement of the lease. Maclay, a representative of Lincoln Harris, allegedly represented that the lease would not become effective if Lozovyy failed to obtain her credentials within the specified time period. After signing the lease, Dr. Lozovyy invested nearly half a million dollars into the space, although was unable to earn at the location, without the privileges. The 120-day period passed, and despite the earlier alleged representation, Maclay informed Dr. Lozovyy that despite the fact that Lozovvy’s application for privileges was denied, she was still expected to perform under the lease. Two days after the rejection of Lozovvy’s application for privileges, HRT Properties sued HRPD and Lozovyy, as Guarantor, for breach of the Lease and the Guaranty.
Defendants argued in their answer that the Lease had never become effective because Lozovyy failed to secure the required staff privileges. HRT subsequently non-suited its lawsuit against Defendants. Thereafter, Defendants became Plaintiffs, suing Lincoln and Maclay for fraudulent inducement, common law fraud, and DTPA violations. Maclay’s alleged misrepresentation formed the basis of each claim. The Property Defendants filed a joint Rule 91a motion to dismiss all causes of action failure to state a claim on the basis that any alleged misrepresentations contradicted the express terms of the agreement. Plaintiffs argued that they raised genuine issues of material fact regarding their fraud claims and that the DTPA claim was timely under the discovery rule. Furthermore, they contended that the trial court must assume all facts were true as pleaded, precluding a Rule 91a dismissal.
Following a hearing on the dismissal motion, the Property Defendants claimed that limitations on the DTPA claim began to run in May 2022, when Maclay made the deceptive statement. Plaintiffs countered that the discovery rule should apply because the deception was inherently undiscoverable until they were sued by HRT Properties. However, the Property Defendants argued that Plaintiffs failed to exercise reasonable diligence and, consequently, could not invoke the discovery rule. Besides, counsel for Property Defendants contended, Dr. Lozovvy was still obligated to pay under the express terms of the lease and could not justifiably rely on Maclay’s alleged misrepresentation. The trial court granted Property Defendants’ Rule 91a motion and dismissed Plaintiffs’ claims with prejudice. Plaintiffs appealed.
In an opinion by Justice Bassel, the court of appeals affirmed. Plaintiffs argued that the trial court erred by dismissing their fraud claims because their reliance on Maclay’s representation was justifiable. But, as the court observed, Plaintiffs did not plead justifiable reliance and did not argue it at the hearing. Even if they had, reliance could not have been justifiable as a matter of law because the misrepresentation directly contradicted the express, unambiguous terms of the written lease. If Plaintiffs had wanted a contingency provision in the lease in the event Dr. Lozovyy failed to obtain staff privileges, it could have negotiated for one. Instead, they took the gamble that when the time came, Macray and Lincoln would let them off the hook.
In their second issue, Plaintiffs argued that the trial court erred by dismissing their DTPA claim because the discovery rule tolled the statute of limitations. Tolling typical begins when facts come into existence which authorize a claimant to seek a judicial remedy. Exxon Corp v. Emerald Oil and Gas Co., 348 S.w.3d 194, 202 (Tex. 2011)(op. on reh’g). The court applied the “inquiry notice” described in Riverside Strategic Cap. Fund I, L.P v. CLG Invs., LLC, 722 S.W.3d 27, 36 (Tex. Bus. Ct. 2025) to determine the discovery rule accrual date. “Under this approach,” the court stated, “knowledge of facts that would lead a reasonably prudent person to inquire and to discover the cause of action within the statute of limitations period (critical date) is equivalent to knowledge of the cause of action for limitations purposes.” This is an objective standard, not an “inquiry into the plaintiff’s subjective belief as to whether the injury could be remedied affordably.” Here the alleged misrepresentation was made in May 2022 and Plaintiffs sued in October 2024. Plaintiffs argued that they didn’t know they were hurt by Maclay’s misrepresentation until they got the rude awakening of being sued for breaching the lease. But, as the court pointed out, if Plaintiffs had read the lease they would have discovered that Maclay’s statement was wrong well within the limitations period because they had actual or constructive notice of the alleged injury-causing action. Consequently, DTPA limitations was not tolled and dismissal was proper.
TCJL Legal Intern Satchel Williams researched and prepared the first draft of this article.
