David A. Skeels v. Jonathan T. Suder Michael T. Cooke And Friedman, Suder & Cooke, P.C. ( 2023 )

Supreme Court of Texas
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No. 21-1014
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David A. Skeels,
Petitioner,
v.
Jonathan T. Suder; Michael T. Cooke; and Friedman, Suder &
Cooke, P.C.,
Respondents
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On Petition for Review from the
Court of Appeals for the Second District of Texas
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CHIEF JUSTICE HECHT, dissenting.
Attorney David Skeels and the other six shareholders in his law
firm, a professional corporation, signed a Resolution providing that the
three founders “have been entitled, and shall continue to be entitled, to
take affirmative action on behalf of the Firm”. When the firm discharged
Skeels some two years later, it insisted that he surrender his shares
without payment, like each of the other four shareholders who had left
the firm over its 23-year history had. Skeels demanded money and has
refused to surrender his shares.
The Court acknowledges that “‘affirmative action’ could broadly
encompass share-redemption actions” 1 but states that the Resolution
did not “authorize the Founders to unilaterally determine the
redemption terms.” 2 Except that it did, the Court concedes, by
authorizing the founders to unilaterally amend the firm’s governing
documents to “specify[] the price and other . . . redemption terms.” 3
Thus, the Court holds that under the Resolution, the founders cannot
unilaterally set the terms for redeeming Skeels’ shares but can
unilaterally amend the firm’s governing documents to set the terms of
redemption. To hold that Skeels agreed to the one but not the other
makes no sense. Skeels unquestionably could have agreed, in just so
many words, that the firm could redeem his shares on his departure
without payment. The only question is whether he did. In the end, the
answer is yes.
The Court recognizes that for Skeels to maintain an ownership
interest in the firm while being a member of a competing firm, as he has
now done for more than seven years during this litigation, raises ethical
issues. 4 A sensible reading of the Resolution would avoid them. I join
the Court in encouraging that these issues be addressed.
Skeels left his firm at the end of 2015 and sued a few months
later. After two years of litigation, the trial court granted judgment
1 Ante at 16.
2 Id.
3 See id. at 17.
4 Id. at 18 n.46.
2
against him including sanctions. 5 Almost four years after that, a divided
court of appeals affirmed. 6 Now, more than seven years after a dispute
arose between a law firm and a departing shareholder, the Court decides
that he did not, but actually did, agree to a no-cash redemption of his
shares.
I respectfully dissent.
Nathan L. Hecht
Chief Justice
OPINION FILED: June 23, 2023
5The trial court found that Skeels “attempted to wrongfully utilize the
court system to gain an advantage by trying to inflict embarrassment, harm,
and harassment on [the firm and its founding shareholders].”
6 665 S.W.3d 637 (Tex. App.—Fort Worth 2021). All three justices
agreed that the sanctions award should be reversed. See id. at 664; id. at 674(Birdwell, J., dissenting). Justice Birdwell explained:
Although I agree with the decision to overturn the trial court’s
sanctions award, I do not think this holding should be taken to
mean that I (or this court, for that matter) condone this litigation
in general. Regardless of the correctness of the parties’ legal
positions, or the fact that good-faith arguments could be made
in support of the pleadings, it does appear to have been
undertaken with a purpose beyond the recovery of simple
damages, which appear from the beginning to have had little
likelihood of recovery in an amount that would justify this suit’s
protracted nature.
Id. at 674-675 (Birdwell, J., dissenting).
3