In TSA-Tex. Surgical Assocs., L.L.P. v. Vargas, one partner sued his other partners for various claims regarding the defendants attempt to squeeze the plaintiff out of the partnership. No. 14-19-00135-CV, 2021 Tex. App. LEXIS 1330 (Tex. App.—Houston [14th Dist.] February 25, 2021, no pet. history). The defendants filed a motion to dismiss under the Texas Citizens Participation Act (TCPA), and the trial court denied the motion. The defendants appealed.

The TCPA was enacted “to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.” Id. (citing Tex. Civ. Prac. & Rem. Code § 27.002). It does so by authorizing a party to file a motion to dismiss a legal action that “is based on, relates to, or is in response to a party’s exercise of the right of free speech, right to petition, or right of association.” Id.

The court of appeals affirmed the denial of the motion to dismiss under the TCPA. The defendants argued that the plaintiff’s claims were based on, related to, or in response to the exercise of free speech because the claims purportedly involve communications regarding the provision of medical services. The court of appeals disagreed:

We do not agree that Vargas’s claims are based on communications regarding the provision of medical services because the communications at issue relate to Vargas’s withdrawal from the partnership and occurred after Vargas stopped practicing medicine. This case involves a private contract dispute affecting only the fortunes of the partners. The alleged representations were made to a limited business audience concerning a business dispute among the partners related to Vargas’s withdrawal from the partnership. Because the statements are not relevant to a wider audience of potential patients, the statements were not made “in connection with a matter of public concern.” The issues presented by this case are simply not a matter of public concern.

Id. The court of appeals also addressed whether plaintiff’s claims were based on, related to, or in response to the exercise of the right of association. The exercise of the right of association is defined in the applicable version of the TCPA as “a communication between individuals who join together to collectively express, promote, pursue, or defend common interests.” The court held that the communications did not constitute an exercise of the right of association:

We have defined the word “common” in the TCPA to mean “of or relating to a community at large: public.” The only communications at issue in Vargas’s claims are based on Vargas’s allegations that appellants (1) breached the Partnership Agreement and breached their fiduciary duties by “making false statements and denying [Vargas] access to important records,” (2) wrongfully assumed and exercised control over Vargas’s partnership interest, (3) sought to deprive Vargas of his partnership interest, and (4) attempted to fraudulently induce Vargas “to surrender his stake in the venture below its proper value.” These communications therefore are related to disagreements about Vargas’s withdrawal from the partnership. These communications concern a private transaction between private parties, not a matter of “common interest,” as we have held that expression is used in the applicable version of the TCPA. Accordingly, the communications do not constitute an exercise of the right of association protected by the TCPA.

Id.

In In re Estate of Pandozy, a woman attempted to intervene in a probate proceeding claiming that she was the informal spouse of the decedent. No. 05-19-00755-CV, 2021 Tex. App. LEXIS 1265 (Tex. App.—Dallas February 22, 2021, no pet. history). The trial court heard evidence and ruled that she was not an informal spouse, and the woman appealed. The court of appeals first discussed the standards for proving an informal marriage:

As the proponent of the marriage, Gonzalez bore the burden to prove by a preponderance of the evidence that she and Pandozy were informally married. Specifically, Gonzalez was required to prove: (1) she and Pandozy agreed to be married; (2) after the agreement, they lived together in Texas as spouses; and (3) and there represented to others that they were married. The existence of a common law marriage is a question of fact to be resolved by the fact finder.

Id. The court of appeals then reviewed the evidence and held that although the decedent’s girlfriend presented some evidence relevant to the elements of an informal marriage, the evidence was contradicted and not sufficient to conclusively prove as a matter of law all vital facts in support of the existence of an informal marriage. Importantly, the court noted:

Although Gonzalez alleged that she and Pandozy discussed marriage in around 2009, she offered no evidence that the discussion ever culminated in an agreement to be married. At most, Gonzalez’s testimony describes an agreement to get married at some point in the future, not an agreement to be married. This distinction is significant. The agreement-to-be-married element requires proof of an intent to create an immediate and permanent marital relationship and that the couple did in fact agree to be husband and wife. There is no such evidence here.

Id. The appellate court affirmed the trial court’s order.

Parties often begin a business together without thinking through all of the legal details that define their rights. When they eventually divorce, they need to resort to the language in agreements that they entered into and also rely on statutory and common-law principles. In one recent case, the court held that the parties’ agreement’s language on the requirements for the formation of a partnership will trump other legal theories. In Anubis Pictures, LLC v. Selig, entities sued a defendant for choosing not to proceed with them and working with directly with a film company. No. 05-19-00817-CV, 2021 Tex. App. LEXIS 1580 (Tex. App.—Dallas March 3, 2021, no pet. history). The plaintiffs asserted a claim that they formed a partnership with the defendant, and that the defendant breached fiduciary duties by cutting the plaintiffs out of business deals. The trial court granted summary judgment for the defendant, and the plaintiffs appealed. Regarding the plaintiffs’ breach of fiduciary duty claim, the court of appeals held:

Anubis contends it presented evidence of the factors indicating the creation of a partnership under section 152.052(a) of the Texas Business Organizations Code. These factors are irrelevant, however, where the parties have agreed that no binding or enforceable obligations will be created unless certain conditions are met. Such an agreement to not be bound absent the specified conditions is ordinarily conclusive on the issue of partnership formation. In this case, Selig and Anubis agreed they were not obligated to work together on any transaction unless both parties signed a formal, written transactional contract. It is undisputed that this did not occur. Although performance of a condition precedent to forming a partnership can be waived, in determining whether such waiver has occurred, we consider only evidence directly tied to the condition precedent, and not the factors relevant to partnership creation set out in section 152.052(a). As discussed above, the evidence conclusively shows Selig did not waive her right to require a signed contract before being obligated to work with Anubis. Accordingly, Selig negated the creation of a partnership as a matter of law.

Id.

One of the most difficult areas for probate litigation is determining when a party has an order that is appealable. There have been several recent cases that discuss this important area of probate litigation. In In re Estate of Mims, a party attempted to appeal an order denying his motion to remove an executor. No. 06-21-00005-CV, 2021 Tex. App. LEXIS 1650 (Tex. App.—Texarkana March 4, 2021, no pet. history). The court of appeals dismissed the appeal for lack of jurisdiction. Regarding general principals of finality, the court stated:

“It is well settled that appellate courts have jurisdiction over final judgments and interlocutory orders made appealable by statute.” “A judgment is final for purposes of appeal if it disposes of all pending parties and claims.” “Only one final judgment shall be rendered in any cause except where it is otherwise specially provided by law.” “Probate proceedings are an exception to the ‘one final judgment’ rule.” “A final order issued by a probate court is appealable to the court of appeals.” The Texas Supreme Court has adopted the following test to determine when a court order in a decedent’s estate is final and appealable: “If there is an express statute, such as the one for the complete heirship judgment, declaring the phase of the probate proceedings to be final and appealable, that statute controls. Otherwise, if there is a proceeding of which the order in question may logically be considered a part, but one or more pleadings also part of that proceeding raise issues or parties not disposed of, then the probate order is interlocutory.” There is no statute that declares an order refusing to remove an executor to be final and appealable.

Continue Reading Courts Rule On Jurisdictional Issues Involving Probate Orders

Parties often begin a business together without thinking through all of the legal details that define their rights. When they eventually divorce, they need to resort to the language in agreements that they entered into and also rely on statutory and common-law principles. In one recent case, the court held that the parties’ agreement’s language on the requirements for the formation of a partnership will trump other legal theories. Continue Reading Business Divorce: Court Held That Parties Did Not Form A Partnership Where Certain Express Conditions Precedent Were Not Met

A recent bill has been submitted that would provide a trustee release relief for transactions described in an accounting where a beneficiary fails to timely object to the accounting and there is no fraud, intentional misrepresentation, or material omission. The bill provides:

Sec. 113.153. BENEFICIARY’S APPROVAL OF ACCOUNTING.

(a) This section does not apply to a trust that is under judicial supervision.
(b) If a beneficiary does not object to a trustee’s accounting before the 180th day after the date a copy of the accounting has been delivered to the last known address of the beneficiary: (1) the beneficiary is considered to have approved the accounting; and (2) absent fraud, intentional misrepresentation, or material omission, the trustee is released from liability relating to all matters in the accounting.

Continue Reading New Texas Bill Would Provide Release Relief To Trustees Who Deliver Adequate Accountings Without A Timely Objection By The Beneficiary

In Odom v. Coleman, a brother and a sister sued each other regarding their father’s estate. No. 01-19-00669-CV, 2020 Tex. App. LEXIS 9551 (Tex. App.—Houston [1st Dist.] December 8, 2020, no pet.). The dispute centered on whether the father’s will should be reformed pursuant to Texas Estates Code Section 255.451(a)(3) that permits a court to modify or reform a will if “necessary to correct a scrivener’s error in the terms of the will, even if unambiguous, to conform with the testator’s intent,” which must be established by clear and convincing evidence. Id. The will contained a residuary clause that devised “personal property” to the son and then to the daughter. A strict reading of the will meant that the decedent’s real property would not be included in the residuary clause and would pass by intestancy. The son sued to reform the will to omit the word “personal” in the residuary clause. The trial court ruled for the son and the daughter appealed. Continue Reading Court Affirmed Trial Court’s Reformation Of A Will To Omit The Word “Personal” From The Term “Property” In A Residuary Clause

A business divorce may mean that the owners need to sell the business or the business’s assets. In the following case, some of the owners/officers took advantage of a sale transaction to benefit from that transaction at the expense of their co-owners. In Rex Performance Prods., LLC v. Tate, a company sued its former officers for breaching fiduciary duties related to the sale of the company’s assets. No. 02-20-00009-CV, 2020 Tex. App. LEXIS 10465 (Tex. App.—Fort Worth December 31, 2020, no pet.). The company alleged that the officers intentionally drove down the price of the sale in order to obtain a separate bonus from the buyer. The defendants alleged that the plaintiff knew of the side bonus agreement and consummated the transaction anyway, thereby establishing a waiver or ratification. The trial court granted summary judgment for the defendants, and the plaintiff appealed. Continue Reading Business Divorce: Court Found That There Was A Fact Question On Whether Officers Violated Fiduciary Duties By Obtaining A Side Bonus From A Purchaser When Negotiating A Sale Of The Company’s Assets

David F. Johnson recently published a new law review article: “Tricks, Traps, and Snares in Appealing a Summary Judgment in Texas, 72 BAYLOR L. REV. 564 (Fall 2020).” David originally published this article in 1998 with Chief Justice William J. Cornelius of the Sixth Court of Appeals of Texas. David’s original article has been cited by the Texas Supreme Court and the Texas Courts of Appeals located in Dallas, Houston, Waco, and Texarkana. This new version is substantially more detailed and reflects the current law on various issues that a party faces when appealing or defending against an appeal of a summary judgment order. Among other things, the article discusses the standards and scopes of review for traditional and no-evidence motions for summary judgment; pleading requirements; drafting considerations for a motion, response, and reply; appealing interlocutory orders; mandamus review of denials of summary judgment motions; timing and evidence issues; motions for continuance; appellate record issues; briefing issues; and the waiver of appellate rights.

Read the Article

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. Continue Reading Court Holds That A Defendant Did Not Owe A Fiduciary Duty To An Affiliate’s Licensee Because Its In-House Attorneys Did Not Have An Attorney/Client Relationship To The Plaintiff And There Was No Informal Confidential Relationship