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Revised August 21, 1998
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 97-50439
___________________________
ROBERTO MARTINEZ TAPIA, individually and as a shareholder of
Tellas Limited; ROBERTO J. MARTINEZ ROCHA, individually and as a
shareholder of Tellas Limited; ROSA DE LOURDES R. DE MARTINEZ,
individually and as a shareholder of Tellas Limited; TELLAS
LIMITED
Plaintiffs-Appellants,
VERSUS
THE CHASE MANHATTAN BANK, N.A.; CHASE BANK & TRUST COMPANY (C.I.)
LIMITED; THE CHASE MANHATTAN PRIVATE BANK; THE CHASE MANHATTAN
TRUST CORPORATION LIMITED; THE CHASE MANHATTAN UNIT TRUST; THE
CHASE MANHATTAN REAL ESTATE FUND,
Defendants-Appellees.
___________________________________________________
Appeal from the United States District Court
For the Western District of Texas
___________________________________________________
August 19, 1998
Before POLITZ, Chief Judge, and DAVIS and DUHÉ, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Plaintiffs, Roberto Martinez Tapia et al., appeal the district
court's grant of summary judgment to Defendants, The Chase
Manhattan Bank, N.A. et al., dismissing Plaintiffs' suit arising
out of their investment losses in a real estate unit fund. We find
no error and affirm.
I.

Roberto Martinez Tapia is a successful Mexican businessman who
lives in Durango, Mexico. From 1986 to 1992, Martinez Tapia served
as the Secretary of Finance for the State of Durango, Mexico.
Martinez Tapia's net worth was nearly $1 billion dollars. His
assets included hotels located in both Mexico and the United
States, hardware stores located in Mexico, various other real
estate holdings, and stock in several companies.
In the early 1980s, Martinez Tapia began a financial
relationship with Defendant Chase Manhattan Bank, N.A. ("Chase
Bank"). Martinez Tapia initially sought advice from Antonio Moreno
("Moreno"), a Chase Bank Vice President in the Private Banking
International Division. Over the next several years, Martinez
Tapia invested conservatively in items such as certificates of
deposit. Eventually, Moreno persuaded Martinez Tapia to diversify
his investments to obtain higher returns. In order to facilitate
these investments, Martinez Tapia agreed to obtain a private
investment company. Moreno arranged for Martinez Tapia to take
over a dormant Chase-owned private investment company, Tellas
Limited ("Tellas"). Tellas had been organized under the laws of
Jersey in the Channel Islands, and had previously been owned by
Chase Bank & Trust Company (C.I.) Limited ("Chase Jersey"), a Chase
Bank subsidiary.
In February of 1986, Martinez Tapia and his family executed a
Company Management Services Agreement. Under the terms of this
agreement, Chase Jersey provided nominal shareholders who held the
Tellas stock in trust for Martinez Tapia, his wife, and his son.
2

Chase Jersey agreed to provide management and administrative
services that Martinez Tapia might require, including maintenance
of corporate and financial records. More importantly, Chase Jersey
agreed to invest Tellas's funds as directed by Martinez Tapia.
Martinez Tapia did not authorize Chase Jersey to invest Tellas
funds without his authorization.
In April of 1987, Martinez Tapia told Moreno he was
disappointed in the return his investments had earned. Moreno and
Martinez Tapia agreed to meet in El Paso, Texas on April 13, 1987
to discuss other investment opportunities. Manuel Martinez
("Martinez"), another Chase Bank employee, accompanied Moreno to
the El Paso meeting. At this meeting, Moreno and Martinez told
Martinez Tapia that he could obtain a better return by diversifying
into more aggressive investments such as the Chase Manhattan Unit
Trust ("Unit Trust"), and, more specifically, the Chase Manhattan
Real Estate Fund ("Real Estate Fund" or "Fund").
During these discussions, Moreno and Martinez gave Martinez
Tapia general information about the Real Estate Fund. Moreno and
Martinez told Martinez Tapia that investment in the Fund was
subject to a three-year minimum holding period and required
Martinez Tapia to give one year's advance notice to redeem the
investment. Moreno and Martinez provided Martinez Tapia with a
sales brochure for the Real Estate Fund. This sales brochure
provided that "[t]he offering is made only by the Offering
Circular, which can be obtained only from Chase offices . . . ."
Both parties concede that Martinez Tapia neither requested nor read
3

either the Offering Circular or the Subscription Agreement.
However, language in both documents is important to this appeal
because the district court concluded that knowledge of this
language should be imputed to Martinez Tapia.
The Offering Circular limited each fundholder's right to
redeem the units that the fundholder had purchased as follows:
Units may not be redeemed at the option of the
Unitholders for a period of three years from their date
of issuance. Thereafter, Units may be redeemed without
charge upon twelve months' notice at the net asset value
on the scheduled redemption date, which date shall be the
first redemption date following the expiration of such
notice period, unless postponed. . . . In order to
safeguard the remaining Unitholders against the adverse
effects of a hasty disposition of Fund assets, the Fund
may postpone the scheduled redemption date for up to
twelve months after the scheduled redemption date to
complete the redemption of Units. . . . Management may
suspend redemptions during any period when in its
judgment conditions unduly interfere with the business or
properties of the Fund or the equitable determination of
net asset value. There will be no redemption fee or
charge.
Thus, the Offering Circular expressly granted the manager of the
Fund, Chase Manhattan Trust Corporation, Ltd. ("Chase Trust"), the
authority to suspend redemptions indefinitely. The Offering
Circular also discussed the restrictions on Unit redemption in a
section entitled "Risk Factors."
After several hours of discussion with Moreno and Martinez,
Martinez Tapia agreed to purchase $1.6 million dollars of Units in
the Real Estate Fund. Martinez prepared a letter signed by
Martinez Tapia confirming his purchase of the Real Estate Fund
Units. The letter directed that all correspondence relating to the
investment be sent to Moreno and Martinez in New York.
4

After returning to New York, Moreno arranged the purchase of
the Units. Following the instructions in Martinez Tapia's letter,
Chase Jersey executed a subscription agreement for $1.6 million
dollars in Fund Units. The officers of Chase Jersey who executed
the transaction read the Offering Circular and were aware of the
rights vested in the manager to suspend or postpone redemption
rights. During the next several months, Moreno and Martinez
advised Martinez Tapia that his investments were performing well.
In the fall of 1987, Martinez Tapia agreed to purchase an
additional $1 million dollars in Fund Units. This purchase was
executed in the same manner as Martinez Tapia's initial purchase.
In January of 1988, Martinez left Chase Bank and went to work
with American Express International Bank ("American Express") in
Miami, Florida. Martinez Tapia moved his accounts to American
Express to continue dealing with Martinez. In March of 1988,
American Express, on behalf of Martinez Tapia, began writing
letters to Chase Bank and Chase Jersey directing that Martinez
Tapia's investments be liquidated. In June of 1988, Chase Jersey
informed Martinez Tapia that all of Tellas's investments had been
liquidated, except for his investment in the Real Estate Fund. In
response to Chase Jersey's letter, Martinez Tapia requested that
all correspondence relating to Tellas and the investment in the
Real Estate Fund be directed to American Express in Miami.
In July of 1989, Martinez Tapia requested that Tellas's Board
of Directors redeem the Units in the Real Estate Fund and that the
Board consider this request the one year advance notice required by
5

the Offering Circular. Racquel Brookins, Martinez's assistant at
American Express, wrote to Chase Jersey seeking confirmation that
Martinez Tapia's Units would be sold in 1990 and that the proceeds
would be transferred to American Express. Chase Jersey confirmed
receipt of Martinez Tapia's instructions and advised American
Express that the Tellas Units would be sold in October of 1990.
On July 5, 1990, Martinez sent a letter signed by Martinez
Tapia to Chase Jersey inquiring about the status of the Real Estate
Fund and the requested redemption. One day earlier, Chase Jersey
had written American Express a letter advising American Express
that redemptions of Units in the Real Estate Fund had been
suspended, and therefore, that it could not honor Martinez Tapia's
request to redeem Tellas's Units in the Real Estate Fund. Martinez
Tapia concedes that some time in 1990, American Express advised him
of Chase Jersey's letter and that redemptions in the Fund had been
suspended.
On July 23, 1990, Chase Trust issued letters to all investors
in the Real Estate Fund confirming that as of April 23, 1990, it
had suspended all redemptions of Units in the Real Estate Fund.
Chase Trust cited the declining American real estate market as the
reason for the suspension. Following the suspension of
redemptions, Chase Trust formulated a proposal to reorganize the
Real Estate Fund. Chase Trust sent this proposal to each
Unitholder along with proxy ballots. Martinez Tapia voted against
the plan.
In October of 1990, Chase Trust notified all Unitholders that
6

the plan of reorganization had been approved. The plan provided
for no new subscriptions and a queue system to honor redemptions in
the order that they had been requested. From December of 1990 to
March of 1991, American Express continued to exchange
communications with Chase Jersey concerning the Real Estate Fund.
Chase Jersey informed Martinez Tapia that it was awaiting his
"final decision" regarding his interests in the Real Estate Fund.
Chase Jersey did not receive any further communications regarding
Martinez Tapia's "final decision" from either Martinez Tapia or
American Express.
In January of 1992, Chase Trust advised the Unitholders that
the plan of reorganization was no longer feasible and that the Real
Estate Fund had been terminated as of January 14, 1992 as part of
a liquidation plan. Under the liquidation plan, each Unitholder
would receive a distribution on a ratable basis, without regard to
any priority established under the previous plan of reorganization.
The Unitholders incurred significant losses.
In June of 1993, Martinez Tapia, along with his wife and son,
filed suit in Texas state court against Chase Bank, Chase Jersey,
Chase Trust, The Chase Manhattan Private Bank, the Unit Trust, and
the Real Estate Fund. Plaintiffs sought recovery under theories of
breach of contract, fraud and misrepresentation, breach of
fiduciary duty, breach of the duty of good faith and fair dealing,
and violations of the Racketeer Influenced and Corrupt
Organizations Act ("RICO"). The Defendants removed the action to
federal court under 28 U.S.C. § 1441(b). Subsequently, the
7

district court dismissed the Unit Trust, the Real Estate Fund, and
Chase Manhattan Private Bank. The remaining Defendants filed a
motion for summary judgment, which the district court granted,
finding that Plaintiffs' claims were barred by the two- and four-
year statutes of limitations found in Tex. Civ. Prac. & Rem. Code
§§ 16.003(a) and 16.004(a). The district court also concluded that
none of the applicable limitations periods had been tolled by
Plaintiffs' alleged fiduciary relationship with any of the
Defendants. This appeal followed.
II.
A.
We review de novo the grant or denial of summary judgment.
Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir.
1997). The moving party bears the initial responsibility of
informing the district court of the basis for its motion and
identifying those portions of the record which it believes
demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct 2548, 2553
(1986). Summary judgment is proper if the evidence shows the
existence of no genuine issue of material fact and that the moving
party is entitled to a judgment as a matter of law. Fed. R. Civ.
P. 56(c). While we consider the evidence with all reasonable
inferences in the light most favorable to the nonmovant, Coleman,
113 F.3d at 533, the nonmoving party must come forward with
specific facts showing that there is a genuine issue for trial.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
8

574, 587, 106 S. Ct. 1348, 1356 (1986). If the record taken as a
whole could not lead a rational trier of fact to find for the
nonmoving party, there is no genuine issue for trial. Szabo v.
Errisson, 68 F.3d 940, 942 (5th Cir. 1995).
B.
Plaintiffs' arguments on appeal focus exclusively on the
district court's conclusion that all of Plaintiffs' claims are
time-barred. Plaintiffs contend that (1) their claims for breach
of contract, fraud and misrepresentation, and RICO violations were
timely filed within four years of the date they first had knowledge
of any problems relating to the investment; (2) their claims for
breach of fiduciary duty and breach of the duty of good faith and
fair dealing were timely filed within two years of the time they
learned that Chase Trust possessed the right to suspend
redemptions; and (3) an alleged fiduciary and/or confidential
relationship between Martinez Tapia and certain of the Defendants
tolled the applicable statute of limitations. We consider below
each of Plaintiffs' arguments.
1.
Plaintiffs argue first that the district court erred in
concluding that the statute of limitations had run on the claims
for breach of contract, fraud and misrepresentation, and RICO
violations. Specifically, Martinez Tapia argues that the statute
of limitations on these claims did not begin to run until 1990 at
the earliest, when he was notified that redemptions in the Real
Estate Fund had been suspended. The district court concluded that
9

Martinez Tapia should have known of Chase Trust's right to suspend
redemptions when he purchased the Units in 1987, and, therefore,
the statute of limitations began to run on that date. For reasons
to follow, we agree with the district court.
Courts recognize that financial investment involves attendant
risks. The investor who seeks to blame his investment loss on
fraud or misrepresentation must himself exercise due diligence to
learn the nature of his investment and the associated risks.1 As
several courts have recognized, the party claiming fraud and/or
misrepresentation must exercise due diligence to discover the
alleged fraud and cannot close his eyes and simply wait for facts
supporting such a claim to come to his attention. This principle
applies in a variety of contexts, including the issue presented in
this case: when the applicable statutes of limitations begin to
run.
In McGill v. Goff, 17 F.3d 729 (5th Cir. 1994), a panel of
this Court considered whether the plaintiffs' claims for fraud and
breach of fiduciary duty were barred by the applicable statute of
limitations. The plaintiffs invested in a real estate joint
venture. The plaintiffs alleged, inter alia, that the defendant,
a co-manager of the joint venture, fraudulently solicited their
1 See, e.g., Carr v. Cigna Sec., Inc., 95 F.3d 544, 547 (7th
Cir. 1996) ("This principle is necessary to provide sellers of
goods and services, including investments, with a safe harbor
against groundless, or at least indeterminate, claims of fraud by
their customers. . . . Risky investments by definition often
fizzle, and an investor who loses money is a prime candidate for a
suit to recover it.")
10

participation in the joint venture by overstating the return they
would realize and misrepresenting how long the venture would hold
the property. The district court dismissed plaintiffs' suit as
time-barred because it was filed more than six years after the
initial investment. On appeal, this Court affirmed, concluding
that the defendant's "summary judgment evidence indisputably
establishe[d] that [the plaintiffs] were aware of the falsity of
[the defendant's] alleged representations in the summer of 1985."
Id. at 733. Central to the court's conclusion was the fact that
the plaintiffs had received and signed a copy of the joint venture
agreement, which contained terms "so contrary to [the plaintiffs']
alleged understanding of the deal that upon review of the document,
[the plaintiffs] would have been put on notice of [the defendant's]
alleged fraud." Id.

The Seventh Circuit addressed a similar issue in Wolin v.
Smith Barney Inc., 83 F.3d 847 (7th Cir. 1996). There, the
plaintiffs, trustees of a pension plan, brought suit against a
broker and his employer for advising the plaintiffs to make risky,
illiquid investments while assuring them that the investments were
liquid and safe. The court of appeals found that the plaintiffs'
claims were barred and affirmed the district court's dismissal of
the suit. The court stated that
the doctrine of equitable tolling requires that the
plaintiff lack constructive as well as actual knowledge
in order to be permitted to sue after the deadline in the
statute of limitations has expired. The plaintiffs in
this case, had they been diligent, would have discovered
the fraud long before 1990--indeed, before the fraud was
even committed. For if diligent they would have
11

discovered it when they received, and before they signed,
the subscription agreement for the shares in the two
limited partnerships. A written statement available to
the victims of fraud that reveals that a fraud has been
committed furnishes constructive or inquiry notice of the
fraud, and constructive notice creates a duty of diligent
inquiry. Eckstein v. Balcor Film Investors, 58 F.3d
1162, 1168 (7th Cir. 1995).
Id. at 853.
In Dodds v. Cigna Sec. Inc., 12 F.3d 346 (2d Cir. 1993), the
plaintiff, a forty-five year old widow with a tenth-grade
education, brought a securities action in which she alleged that
she was induced into investing in securities that were unsuitable.
The plaintiff alleged that contrary to the promises made to her by
the defendant and its agent, the securities were too risky and
illiquid. The plaintiff did not read the prospectus the defendants
furnished her. Plaintiff brought suit, alleging four violations of
the Securities Act and pendent state law claims for fraud, breach
of fiduciary duty, and negligent misrepresentation. The district
court dismissed the claims as time-barred. On appeal, the Second
Circuit Court of Appeals concluded that warnings contained in the
prospectus "were sufficient to put a reasonable investor of
ordinary intelligence on notice of . . . the risk, and the
illiquidity of these investments." Id. at 351. Therefore, the
plaintiff's claims were time-barred.
The Fourth Circuit considered an analogous case in Brumbaugh
v. Princeton Partners, 985 F.2d 157 (4th Cir. 1993). The defendant
marketed units in a limited partnership that owned and operated
commercial properties and also served as a tax shelter to offset
12

the income of limited partners. The defendant advertised the sale
of the units through a document entitled "Private Placement
Memorandum." The plaintiff purchased one unit in 1982. Several
years later, in 1988, the Internal Revenue Service disallowed the
partnership's tax deductions. The plaintiff filed suit, alleging
common law fraud and violations of state and federal securities
laws. The district court dismissed the complaint on statute of
limitations grounds. The Fourth Circuit affirmed, noting that
"[i]nquiry notice is triggered by evidence of the possibility of
fraud, not by complete exposure of the alleged scam." Id. at 162.
The document by which the defendant marketed the investment
"contained a host of prior warnings making it plain that [the
plaintiff] was purchasing, to put it mildly, a highly speculative
investment." Id. The court therefore concluded that the plaintiff
should be charged with constructive knowledge of the contents of
the Private Placement Memorandum, which clearly disclosed the risk
that the Internal Revenue Service could disallow tax deductions.
Id.
With this background, we now turn to the issues presented in
Martinez Tapia's appeal. As the district court stated, the statute
of limitations on the claims of breach of contract, fraud and
misrepresentation, and RICO violations is four years. Tex. Civ.
Prac. & Rem. Code § 16.004(a). In concluding that the limitations
period accrued when Martinez Tapia initially purchased the Units in
April of 1987, the district court imputed knowledge of the Offering
Circular to Martinez Tapia. We agree with this conclusion and
13

reject Martinez Tapia's argument that this was error.
The evidence is undisputed that Martinez Tapia is a
sophisticated and successful businessman who spent several years
serving as Secretary of Finance in the State of Durango, Mexico.
It is also undisputed that Martinez Tapia invested over two and
one-half million dollars in the Real Estate Fund. We agree with
the district court that it was incumbent upon Martinez Tapia to do
more than simply rely on the bald assertions and promises of Moreno
and Martinez. Before he invested over two and one-half million
dollars, reasonable diligence required him to read the only
documents that contained the details of the offer he accepted when
he purchased the Fund Units. See, e.g., Carr v. Cigna Sec., Inc.,
95 F.3d 544, 547-48 (7th Cir. 1996); Myers v. Finkle, 950 F.2d 165,
167 (4th Cir. 1991).
The summary judgment record makes it clear that the Defendants
did not "hide the ball" from Martinez Tapia. Moreno and Martinez
supplied Martinez Tapia with a sales brochure outlining the Real
Estate Fund in general terms. The sales brochure acknowledged that
there were certain risks inherent in the Real Estate Fund due to
possible changes in the market. Additionally, under a heading
entitled "What to Do Next," the sales brochure directed the reader
to obtain a copy of the Offering Circular and Subscription
Agreement from Chase Bank. Rather than following this directive
and obtaining a copy of the Offering Circular, Tapia relied upon
the general assertions of Moreno and Martinez. As the district
court concluded, a reasonable investigation by Martinez Tapia prior
14

to the purchase, consisting of reading the Offering Circular and
Subscription Agreement, would have alerted him to the right of the
Fund manager to suspend redemption, the right upon which this suit
is predicated. Martinez Tapia is therefore charged with the
knowledge of the contents of these documents, including the Fund
manager's right to suspend redemptions.
It is also clear to us that Martinez Tapia should have been
aware of substantial risks associated with his investment in the
Real Estate Fund. A sophisticated investor knows that the price of
real estate can fluctuate and that the fund manager of a real
estate fund would likely reserve the right to limit or suspend
redemptions in the fund in a depressed market. Martinez Tapia
should have known to look to the Offering Circular for the precise
contours of this likely limitation on his right to redeem his
Units.
For the reasons stated above, we therefore agree with the
district court that the statute of limitations on the claims for
breach of contract, fraud and misrepresentation, and RICO
violations began to run in 1987 when Martinez Tapia first purchased
Units in the Real Estate Fund. A simple reading of the Offering
Circular and the Subscription Agreement at that time would have
alerted Martinez Tapia that the written terms of his investment
varied from the alleged assertions and promises of Moreno and
Martinez. Therefore, the district court correctly concluded that
these claims were barred by the four-year statute of limitations.
2.
15

Next, Martinez Tapia argues that the district court erred in
concluding that his claims for breach of fiduciary duty and breach
of the duty of good faith and fair dealing were time-barred. The
district court concluded that at the latest, the period of
limitations on these claims began to run when Chase Trust informed
Martinez Tapia that redemptions in the Real Estate Fund were being
suspended in July of 1990--three years before Martinez Tapia filed
suit. Assuming, without deciding, that a fiduciary relationship
existed among the parties, we agree with the district court.
The district court concluded that these claims were governed
by a two-year statute of limitations. Tex. Civ. Prac. & Rem. Code
§ 16.003(a).2 The summary judgment evidence is undisputed that
Chase Jersey advised Martinez Tapia by letter dated July 4, 1990
that redemption of Units had been suspended. Chase Jersey followed
Martinez Tapia's instructions and sent this letter to Martinez
Tapia's representatives at American Express. Martinez Tapia argues
that the period of limitations did not begin to run until March of
1993, when he actually read the Offering Circular and discovered
that Chase Trust had the authority to suspend redemptions. We find
this argument unpersuasive. As more fully discussed above, the
Offering Circular disclosed in plain terms the right of Chase Trust
to suspend redemptions. The district court correctly concluded
2 Although there has been some debate over whether the two-
year or four-year statute of limitations applies to claims of
breach of fiduciary duty under Texas law, Kansa Reinsurance Co.,
Ltd. v. Congressional Mortgage Corp. of Texas, 20 F.3d 1362 (5th
Cir. 1994), holds that the two-year statute of limitations is the
correct limitations period for such claims. Id. at 1373-74.
16

that a reasonable investor, when informed that redemption of his
investment had been suspended, would have immediately investigated
the propriety of this action. If Martinez Tapia had undertaken
such an investigation, he would have easily discovered Chase
Trust's right to suspend redemptions, along with any breach of
fiduciary duty or breach of good faith and fair dealing.
Therefore, we agree with the district court that the claims of
breach of fiduciary duty and breach of good faith and fair dealing
are barred by the two-year statute of limitations.
3.
To avoid the Defendants' arguments that his claims are time-
barred, Martinez Tapia argues throughout this appeal--as he did in
the district court--that an alleged fiduciary and/or confidential
relationship between himself, Chase Jersey, and Moreno and Martinez
lessened the degree of care he was required to exercise and tolled
the statute of limitations on his claims. The district court
rejected the fiduciary relationship argument, noting that Martinez
Tapia had the "final word" on all investment decisions and that
none of the Defendants were to make investments without Martinez
Tapia's authorization. The district court concluded that any
fiduciary duty that any of the Defendants may have owed the
Plaintiffs was limited to ensuring that all investments were duly
authorized by Martinez Tapia, and that this limited duty did not
toll the statute of limitations.
While the nature of the duty owed by a broker will vary
depending on the relationship between the broker and the investor,
17

where the investor controls a nondiscretionary account and retains
the ability to make investment decisions, the scope of any duties
owed by the broker will generally be confined to executing the
investor's order. Romano v. Merrill Lynch, Pierce, Fenner & Smith,
834 F.2d 523, 530 (5th Cir. 1987); see also Hill v. Bache Halsey
Stuart Shields Inc., 790 F.2d 817, 825 (10th Cir. 1986) ("fiduciary
duty in the context of a brokerage relationship is only an added
degree of responsibility to carry out pre-existing, agreed-upon
tasks properly"); Limbaugh v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 732 F.2d 859, 862 (11th Cir. 1984) ("duty owed by the
broker was simply to execute the order").
O u r r e v i e w o f t h e
summary judgment record reveals that none of the Defendants
possessed the authority to act without Martinez Tapia's direction.
The Management Agreement between Martinez Tapia and Chase Jersey
provided that funds would only be invested on the advice of
Martinez Tapia. Nothing in the summary judgment record suggests
that Martinez Tapia gave Moreno or Martinez any discretionary
investment authority. Martinez Tapia does not point to any summary
judgment evidence, other than his own subjective trust in Moreno
and Martinez, to create a genuine issue of material fact on this
point. We therefore agree with the district court that any
fiduciary relationship between Martinez Tapia and the Defendants
was limited to making investments approved by Martinez Tapia.3 See
3 Martinez Tapia also argues that not only were Moreno and
Martinez agents of Chase Bank, they were also agents of Chase
Jersey and Martinez Tapia. He contends, therefore, that Moreno and
Martinez were acting in dual capacities and should be subjected to
18

Hand v. Dean Witter Reynolds Inc., 889 S.W.2d 483, 492 n.5 (Tex.
App.--Houston [14th Dist.] 1994, writ denied). This relationship,
therefore, did not serve to relieve Martinez Tapia from making a
reasonably diligent effort to inform himself about his purchase,
and did not toll the statute of limitations. See Courseview, Inc.
v. Phillips Petroleum Co., 158 Tex. 397, 407, 312 S.W.2d 197, 205
(Tex. 1957) ("[A] failure to exercise reasonable diligence is not
excused by mere confidence in the honesty and integrity of the
other party.").
The district court also correctly rejected Martinez Tapia's
argument that his confidential relationship with Moreno and
Martinez relieved him of the duty to protect his own interests. As
the district court reasoned, any confidential relationship Martinez
Tapia may have had with Moreno and Martinez did not excuse Martinez
Tapia from investigating more thoroughly the terms of such a
substantial investment. As more fully discussed above, the summary
judgment evidence establishes Martinez Tapia's lack of due
diligence in protecting his investment. As the district court
stated, Martinez Tapia "failed to take the most basic precautions
to learn of the terms governing an asset he was purchasing." The
summary judgment record is silent on any inquiry that Martinez
a heightened fiduciary standard. Under this standard, Martinez
Tapia argues that as "agents," they had an obligation to inform
Chase Jersey and himself of all material facts pertaining to the
Real Estate Fund, and that failure to do so constituted a breach of
fiduciary duties. Notwithstanding other potential obstacles to
this argument, as indicated above, the scope of any fiduciary
duties owed by Moreno and Martinez was limited to making
investments authorized by Martinez Tapia.
19

Tapia directed to Moreno or Martinez regarding the possible risks
of his investment. Relatedly, Martinez Tapia produced no summary
judgment evidence that either Moreno or Martinez concealed
information relating to the risks of the investment. We agree with
the district court that the summary judgment evidence indicates
that Martinez Tapia was "an investor who simply did not want to be
troubled with the details," and that his focus was solely "goal-
oriented." Martinez Tapia did not exercise reasonable diligence in
light of his relationships with the Defendants. Thus, we agree
with the district court that any fiduciary and/or confidential
relationship between Martinez Tapia and the Defendants did not toll
the statute of limitations
III.
For the reasons stated above, we conclude that the district
court correctly determined that no genuine issues of material fact
existed with respect to when the statute of limitations began to
run on Martinez Tapia's claims. The district court correctly
concluded that the two- and four-year statutes of limitations
barred all of Martinez Tapia's claims. We therefore AFFIRM the
district court's judgment in all respects.
AFFIRMED.
20