In Belliveau v. Barco, Inc., a licensor of intellectual property sued the owner of the licensee for breach of fiduciary duty related to the sublicensing to a third party. No. 19-50717, 2021 U.S. App. LEXIS 2489 (5th Cir. January 28, 2021). The district court dismissed the claim, and the plaintiff appealed. The court of appeals affirmed, holding that the defendant did not owe a fiduciary duty to the plaintiff.

The court of appeals described that there can be two types of fiduciary relationships, a formal and an informal relationship. The plaintiff alleged both in this case. He alleged that the defendant had an attorney/client relationship with him because its in-house counsel represented him in the sublicense transaction. Regarding this issue, the court stated:

First, Belliveau asserts there was an implied attorney-client relationship between himself and Barco’s in-house lawyers. “An agreement to form an attorney-client relationship may be implied from the conduct of the parties.” “But whether the agreement is express or implied, there must be evidence both parties intended to create an attorney-client relationship—one party’s subjective belief is insufficient to raise a question of fact to defeat summary judgment.” In other words, courts “determine whether a[n] [attorney-client] contract can be implied using an objective standard . . . and . . . do not consider [the parties’] unstated, subjective beliefs.” Belliveau alleges that two of Barco’s in-house lawyers, Kurt Verheggen and Carolyn Vignery, represented him in sublicensing his intellectual property.

Id. The court disagreed, however, that the evidence supported such a relationship. The court noted that the plaintiff’s affidavit merely reflected his subjective beliefs and otherwise was vague and conclusory. For example, the court noted: “Rather, the paragraph that Belliveau cites states that ‘Barco employees, including its in-house lawyers, agreed to act at my direction on matters related to my IP.’ As the district court held, Belliveau fails to explain what in-house lawyers acted at his discretion, or whether they did so with the intention of representing him in a legal capacity.” Id. The court affirmed that there was no formal fiduciary relationship.

The court then turned to the plaintiff’s informal, confidential relationship argument and held:

Belliveau argues, in the alternative, that there was an informal confidential relationship between himself and Barco. “Texas law does not recognize a fiduciary relationship lightly, especially in the commercial context.” “It is well settled that ‘not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.'” Instead, “[t]o impose an informal fiduciary duty in a business transaction, the special relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of the suit.”

To show an informal fiduciary relationship, Belliveau alleges, again based on his declaration, that Barco ensured, for almost a decade, that High End met its contractual duty to commercialize Belliveau’s IP on reasonable terms, and that Barco involved Belliveau in all sublicensing efforts. But, as the district court found, the 2008 High End License is the basis of Belliveau’s suit, and he offers no evidence of a relationship predating that agreement. Indeed, the record suggests that Barco did not enter the picture until 2008, when it purchased all High End’s shares. Belliveau has not demonstrated the existence of an informal confidential relationship with Barco.

Still, Belliveau contends that the 2017 Barco Sublicense, not the High End License, is the agreement that should be used to measure the existence of a prior relationship. As noted, however, the test is whether the “special relationship of trust and confidence” existed prior to the “agreement made the basis of the suit.” But the agreement that forms the basis of Belliveau’s lawsuit is the High End License. After all, Belliveau sued Barco for breach of that agreement. Further, even if the court used the Barco Sublicense as the start of the relationship look-back period, Belliveau provides no evidence that his preexisting relationship with Barco consisted of anything more than arms-length transactions commencing with the High End License. The Texas Supreme Court has expressly rejected the use of such interactions to establish a relationship predating the challenged agreement.

Belliveau reasons that the preexisting relationship rule does not necessarily apply here. Citing Jacked Up, L.L.C. v. Sara Lee Corp., 854 F.3d 797 (5th Cir. 2017), and Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997), he insists that courts only look to a preexisting relationship when “the plaintiff transacts with the defendant and then claims that the defendant betrayed his trust in that transaction.” Belliveau correctly distinguishes Jacked Up and Schlumberger on the facts; both cases involved disputes between litigants over transactions to which they were both parties. By contrast, Belliveau and Barco had no contractual relationship. But this is a commercial case in which Belliveau is attempting to impose a fiduciary duty on Barco based on the parties’ business relations. Belliveau’s foundational theory of liability is that Barco should be held responsible for High End’s contractual obligations. Belliveau can hardly argue that he does not need to show a prior relationship because the parties have no formal contractual relationship.

Id. The court affirmed the dismissal.

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Photo of David Fowler Johnson David Fowler Johnson

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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 The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary…

[email protected]

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 The Fiduciary Litigator blog, which reports on legal cases and issues impacting the fiduciary field in Texas. Read More

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 action, RICO actions, usury, various tort causes of action, breach of fiduciary duty claims, and preference and other related claims raised by receivers.

David also has experience in estate and trust disputes including will contests, mental competency issues, undue influence, trust modification/clarification, breach of fiduciary duty and related claims, and accountings. David’s recent trial experience includes:

  • Representing a bank in federal class action suit where trust beneficiaries challenged whether the bank was the authorized trustee of over 220 trusts;
  • Representing a bank in state court regarding claims that it mismanaged oil and gas assets;
  • Representing a bank who filed suit in probate court to modify three trusts to remove a charitable beneficiary that had substantially changed operations;
  • Represented an individual executor of an estate against claims raised by a beneficiary for breach of fiduciary duty and an accounting; and
  • Represented an individual trustee against claims raised by a beneficiary for breach of fiduciary duty, mental competence of the settlor, and undue influence.

David is one of twenty attorneys in the state (of the 84,000 licensed) that has the triple Board Certification in Civil Trial Law, Civil Appellate and Personal Injury Trial Law by the Texas Board of Legal Specialization.

Additionally, David is a member of the Civil Trial Law Commission of the Texas Board of Legal Specialization. This commission writes and grades the exam for new applicants for civil trial law certification.

David maintains an active appellate practice, which includes:

  • Appeals from final judgments after pre-trial orders such as summary judgments or after jury trials;
  • Interlocutory appeals dealing with temporary injunctions, arbitration, special appearances, sealing the record, and receiverships;
  • Original proceedings such as seeking and defending against mandamus relief; and
  • Seeking emergency relief staying trial court’s orders pending appeal or mandamus.

For example, David was the lead appellate lawyer in the Texas Supreme Court in In re Weekley Homes, LP, 295 S.W.3d 309 (Tex. 2009). The Court issued a ground-breaking opinion in favor of David’s client regarding the standards that a trial court should follow in ordering the production of computers in discovery.

David previously taught Appellate Advocacy at Texas Wesleyan University School of Law located in Fort Worth. David is licensed and has practiced in the U.S. Supreme Court; the Fifth, Seventh, and Eleventh Federal Circuits; the Federal District Courts for the Northern, Eastern, and Western Districts of Texas; the Texas Supreme Court and various Texas intermediate appellate courts. David also served as an adjunct professor at Baylor University Law School, where he taught products liability and portions of health law. He has authored many legal articles and spoken at numerous legal education courses on both trial and appellate issues. His articles have been cited as authority by the Texas Supreme Court (twice) and the Texas Courts of Appeals located in Waco, Texarkana, Beaumont, Tyler and Houston (Fourteenth District), and a federal district court in Pennsylvania. David’s articles also have been cited by McDonald and Carlson in their Texas Civil Practice treatise, William v. Dorsaneo in the Texas Litigation Guide, and various authors in the Baylor Law ReviewSt. Mary’s Law JournalSouth Texas Law Review and Tennessee Law Review.

Representative Experience

  • Civil Litigation and Appellate Law