C3 Venture Flint, LLC (Texas), C3 Venture Flint, LLC ( Michigan), and C3 PH, LLC v. Blue Dog Holdings, Inc. ( 2022 )

REVERSED AND REMANDED and Opinion Filed November 30, 2022
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-21-00863-CV
C3 VENTURE FLINT, LLC (TEXAS), C3 VENTURE FLINT, LLC
(MICHIGAN), AND C3 PH, LLC, Appellants
V.
BLUE DOG HOLDINGS, INC., Appellee
On Appeal from the 162nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-20-08434
MEMORANDUM OPINION
Before Justices Myers, Pedersen, III, and Garcia
Opinion by Justice Garcia
Appellee Blue Dog Holdings, Inc. sued appellants for failing to pay a debt,
and it won its case on summary judgment. Appellants argue that the trial judge erred
by granting appellee’s summary-judgment motion and denying appellants’
summary-judgment motion. Concluding that neither side was entitled to summary
judgment, we reverse and remand.
I. BACKGROUND
A. Factual Allegations
In its live petition, appellee Blue Dog Holdings, Inc. (“Blue Dog”) alleged
that it and one other entity, Green Gambreezzi, LLC (“Gambreezzi”), loaned
appellants $700,000 under a Loan and Investment Agreement (“Agreement”).
Pursuant to the Agreement, Blue Dog and Gambreezzi also performed certain
services for appellants. Appellants promised to pay Blue Dog $770,000 by a certain
date. Appellants failed to pay, and the entire amount remained due and owing when
Blue Dog filed this lawsuit.
B. Procedural History
Blue Dog sued appellants, asserting a single claim entitled “Suit on a Note.”1
Appellants answered.
Blue Dog filed a summary-judgment motion solely against appellant “C3
Venture Flint LLC,” and that appellant filed a response.2 It appears that this
summary-judgment motion was never considered by the trial judge.
1
In their trial-court filings, both sides often referred to the Agreement as a note.
2
At this point we note that appellants are not named consistently in the trial-court filings. Appellant
C3 PH LLC is generally identified without a comma before “LLC,” but appellants’ joint notice of appeal
lists that appellant as “C3 PH, LLC.”
The record is more confusing as to the other two appellants. It appears that they have the same name,
“C3 Venture Flint LLC,” but one is a Michigan limited liability company and the other is a Texas limited
liability company. With respect to the Michigan company, Blue Dog’s filings generally omit the space
between “C3” and “Venture,” but appellants’ filings generally include the space. Appellants’ summary-
judgment motion refers to these two parties as “C3 Venture Flint, LLC (TX)” and “C3 Venture Flint, LLC
(MI),” but their notice of appeal refers to them as “C3 Venture Flint, LLC (Texas)” and “C3 Venture Flint,
LLC (Michigan).” When we must refer to a specific appellant, we refer to the Michigan “C3 Venture”
company as C3MI, the Texas “C3 Venture” company as C3TX, and the other appellant as C3PH.
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Blue Dog later filed a first amended petition, which added alternative claims
such as quantum meruit. This was Blue Dog’s live pleading at the time of judgment.
Appellants filed amended answers. Their live answers included verified
denials that Blue Dog had capacity to sue on the Agreement because Blue Dog was
not a party to the Agreement. Rather, the Agreement named Blue Dog Holdings,
LLC, not Blue Dog Holdings, Inc., as a party. Appellants also asserted the
affirmative defenses of waiver, quasi-estoppel, and laches.
Appellants filed a traditional motion for summary judgment on the entire
case, arguing that Blue Dog could not recover because (1) Blue Dog was not a
signatory of the Agreement, (2) no amount was due and owing, and (3) appellants
conclusively established all of their affirmative defenses.
Blue Dog filed a second summary-judgment motion, this time seeking
judgment on its note claim against all three appellants. Appellants did not file a
response to this motion.
The docket sheet suggests that the trial judge held a hearing on each side’s
summary-judgment motion, but there is no reporter’s record of that hearing. The trial
judge signed a final judgment that granted Blue Dog’s motion and awarded Blue
Dog damages, interest, and attorney’s fees against appellants. The judgment also
denied “all relief not expressly granted,” and it purported to dispose of all claims and
parties.
Appellants timely appealed.
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II. ISSUES PRESENTED
Appellants assert two issues on appeal.
First, they argue that the trial judge erred by denying appellants’ summary-
judgment motion on the affirmative defenses of quasi-estoppel and laches.
Second, they argue that the trial judge erred by granting Blue Dog’s summary-
judgment motion.
We address appellants’ second issue first.
III. ISSUE TWO: WHETHER BLUE DOG WAS ENTITLED
TO SUMMARY JUDGMENT
A. Standard and Scope of Review
We review a summary judgment de novo. Trial v. Dragon, 593 S.W.3d 313,
316 (Tex. 2019).
When we review a summary judgment in favor of a claimant, we determine
whether the claimant established every element of its claim as a matter of law.
Alexander v. Wilmington Sav. Fund Soc’y, FSB, 555 S.W.3d 297, 299 (Tex. App.—
Dallas 2018, no pet.). We consider the evidence in the light most favorable to the
nonmovant, indulge every reasonable inference in favor of the nonmovant, and
resolve any doubts against the movant. Id.If the nonmovant relies on an affirmative defense to defeat summary
judgment, it must come forward with evidence sufficient to raise a genuine fact issue
on each element of the defense. TrueStar Petroleum Corp. v. Eagle Oil & Gas Co.,
323 S.W.3d 316, 319 (Tex. App.—Dallas 2010, no pet.). We take evidence favorable
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to the nonmovant as true, and we draw every reasonable inference from the evidence
in the nonmovant’s favor. Id.When both sides move for summary judgment, each side bears the burden of
establishing that it is entitled to judgment as a matter of law, and neither side can
prevail because the other side has failed to carry its burden. SA-OMAX 2007, L.P. v.
Certain Underwriters at Lloyd’s, London, 374 S.W.3d 594, 597 (Tex. App.—Dallas
2012, no pet.). We consider all the evidence accompanying both motions in
determining whether either side’s motion should have been granted. Id. When the
trial judge grants one motion and denies the other, we determine all questions
presented. Id. We may affirm the trial court’s summary judgment, reverse and render
judgment for the other side if appropriate, or reverse and remand if neither side
carried its summary-judgment burden. Dallas Cent. Appraisal Dist. v. Mission Aire
IV, L.P., 279 S.W.3d 471, 474 (Tex. App.—Dallas 2009, pet. denied).
In this case, the final judgment grants Blue Dog’s summary-judgment motion
but does not mention appellants’ summary-judgment motion. In its appellee’s brief,
Blue Dog argues that appellants failed to obtain a trial-court ruling on their motion.
But, as noted above, the docket sheet seems to indicate that the cross-motions were
heard together. Moreover, the final judgment recites that the trial judge considered
Blue Dog’s motion, “all related briefing, all admissible evidence, and any argument
of counsel,” which could encompass appellants’ motion. Finally, at oral argument
Blue Dog conceded that the trial judge denied appellants’ motion. We accept that
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concession and conclude that the judgment implicitly denied appellants’ summary-
judgment motion. See TEX. R. APP. P. 33.1(a)(2)(A) (implicit ruling suffices to
preserve error). Accordingly, the evidence attached to appellants’ motion is part of
the summary-judgment record for both motions. See SA-OMAX 2007, L.P., 374
S.W.3d at 597.
B. Applicable Law
In their summary-judgment papers, the parties consistently treated the
Agreement as a note, and appellants do not challenge that characterization on appeal.
Accordingly, for purposes of this appeal, we assume that the Agreement is a note.
See Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 782 (Tex. 2020) (“A court of
appeals may not reverse a trial court judgment on a ground not raised [by the
appellant].”).
The elements of a claim for breach of a promissory note are (1) a note exists,
(2) the plaintiff is the legal owner and holder of the note, (3) the defendant is the
maker of the note, and (4) a certain balance is due and owing on the note. See Levitin
v. Michael Grp., L.L.C., 277 S.W.3d 121, 123 (Tex. App.—Dallas 2009, no pet.).
C. The Summary-Judgment Evidence
We summarize the evidence with an eye to the contested issues on appeal—
(1) whether Blue Dog conclusively proved itself to be the owner and holder of the
Agreement and (2) whether appellants raised a genuine fact issue on any of their
affirmative defenses.
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1. Background Facts
Appellants filed the declaration of Robert Schaffer, who explained the genesis
of the transaction as follows. In the 2010s, Schaffer was investing in Michigan real
estate. He worked with a real-estate broker named Robert Waun. At some point he
created the first C3 entity, C3MI, which was going to focus on recycling and
renovating underutilized properties in Flint, Michigan.
In 2016, Schaffer discussed the opportunities in Flint with a friend, Dallas
attorney Christopher A. Payne. Payne had two clients who wanted to get involved
in the Flint opportunities, namely Dr. Tom Kenjarski, M.D. and Dr. Joel Ciarochi,
M.D. The doctors agreed to invest $700,000 in C3MI in return for a 10% ownership
interest in all C3-related entities. To accomplish this goal, Waun and the doctors
negotiated the Agreement.
2. The Agreement
The first paragraph of the Agreement identifies the parties:
This Loan and Investment Agreement is entered into effective as of the
29th day of August 2016 between C3 PH, LLC, a Michigan Limited
Liability Company (C3PH), C3Venture Flint, LLC, a Michigan
Limited Liability Company (C3MI) and C3 Venture Flint, LLC a Texas
Series Limited Liability Company (C3TX) as Borrowers and Blue Dog
Holdings, LLC a Texas Limited Liability Company (Blue Dog) and
Green Gambreezzi, LLC a Texas Limited Liability
Company[ ](Gambreezzi) as the Lenders as set forth below.
Although the Agreement calls all three appellants “Borrowers,” the parties agreed
that C3PH would actually receive the money:
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1. Blue Dog and Gambreezzi each agree to loan C3PH the sum of
[$350,000] for a total of Seven Hundred Thousand and No/100
Dollars ($700,000.00) (“the Loan Amount”) for a period of thirty
(30) days from September 1, 2016.
The Agreement provides that “Blue Dog” (previously defined to mean Blue Dog
Holdings, LLC) would receive the repayment:
2. The full Loan Amount shall be repaid to Blue Dog on or before
October 1, 2016, together with a consulting fee of [$70,000]
(“the Consulting Fee”) for consulting services provided by Blue
Dog and/or its representatives.
The Agreement provides that the lenders would then reinvest the loaned funds in
return for equity in C3TX:
3. Upon repayment of the Loan Amount together with the
Consulting Fee on or before October 1, 2016, Blue Dog and
Gambreezzi agree to utilize the entire sum of [$770,000] to
acquire a ten percent (10%) interest in C3TX (“the C3 Equity
Interest”). Such C3Equity Interest shall be split equally between
Blue Dog and Gambreezzi so that each such entity has a five
percent (5%) interest exclusive of the other.
Kenjarski signed the Agreement on behalf of “Blue Dog Holdings, LLC, a
Texas Limited Liability Company” as its “Member/Manager/Director.” Ciarochi
signed it on behalf of Gambreezzi as its “Member/Manager/Director.”
3. The Loan and the Fate of the C3 Enterprise
Regarding the parties’ performance under the Agreement, the summary-
judgment evidence includes Schaffer’s deposition testimony that “Blue Dog and
Gambreezzi” each loaned $350,000 to C3PH. Kenjarski stated in a declaration that
appellants “defaulted on the [Agreement] by failing to pay as agreed. The entire
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unpaid balance of the [Agreement] remains due and owing.” Schaffer agreed in his
deposition that “C3 in fact did not repay the loan amount.”
As for the C3 enterprise as whole, the summary-judgment evidence indicates
that it was unsuccessful. According to Schaffer, C3MI opened its operations in Flint,
Michigan, and Waun hired over 100 people. However, the accounting and
bookkeeping employees for the C3 entities provided poor service, and Wuan
mismanaged the business’s affairs. Kenjarksi and Ciarochi proposed that they be
placed in charge of accounting for all C3 entities, and Waun and Schaffer agreed
that this was a good idea. According to Schaffer’s declaration, “[a]fter about a year
of action, C3MI was in need of money each month to meet payroll, land contract
payments as well as other cash needs. In November 2017, Mr. Waun wanted to
resign as CEO of all the C3 entities and claimed that C3MI was not going to make
it.” Moreover, Kenjarski and Ciarochi “offered no real operational support,” and
Schaffer hired a new local accounting service to document the companies’ bills.
Eventually, Schaffer had to lay off almost all employees of the C3 entities, and he
said in his declaration that “C3MI is not able to continue its affairs.”
4. Evidence Regarding Whether Appellee Blue Dog Holdings, Inc.
Was Entitled to Payment Under the Agreement
Appellants maintain that the evidence raises a genuine fact issue whether
appellee Blue Dog Holdings, Inc. is an owner or holder of the Agreement. They rely
on the following evidence:
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• An August 29, 2016 email from attorney Christopher Payne to
Kenjarski, Ciarochi, Schaffer, and Wuan that covered a draft of
the Agreement. That draft named Blue Dog Holdings, LLC as
the party entitled to repayment.
• An August 30, 2016 email from Payne to the same four recipients
that covered the final version of the Agreement, which again
named Blue Dog Holdings, LLC as the party entitled to
repayment.
• An August 30, 2016 email from Kenjarski to someone named
Shannon Bass in which Kenjarski said, “I approve $300,000 to
be transferred from Blue Dog Holdings LLC.”
• A September 28, 2016 email from Kenjarski to Shannon Bass
with a subject line reading “Re: Wiring Instructions” and text
saying, “green gambreezzi, LLC for joel” and “blue dog
holdings, LLC for tom.”
• A June 3, 2019 letter that Kenjarski emailed to Schaffer with
copies to Ciarochi and Payne. In this letter, Kenjarksi wrote, “As
you know, Blue Dog Holdings, LLC and Green Gambreezzi,
LLC, which are wholly owned entities belonging to me and Joel,
each loaned $350,000 to [appellants] via the Loan and
Investment Agreement signed on August 30, 2016.” He went on
to propose rescinding the Agreement if Schaffer returned the
$700,000.
• Schaffer’s declaration testimony that after the Agreement was
executed he never agreed to any assignment of interest from Blue
Dog Holdings, LLC to Blue Dog Holdings, Inc. on behalf of
C3TX, C3MI, and/or C3PH. To his knowledge, no party to the
Agreement ever proposed such an assignment.
We agree with appellants that a jury could reasonably infer from this evidence
that Blue Dog Holdings, LLC was the entity entitled to repayment under the
Agreement and that it was the owner and holder of the Agreement to the extent the
Agreement constitutes a note.
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Blue Dog, however, argues that it is nevertheless a proper party to enforce the
Agreement for several reasons:
1. Blue Dog Holdings, LLC does not exist.
2. Blue Dog Holdings, LLC’s appearance in the Agreement
resulted from a drafting error.
3. Blue Dog Holdings, Inc. actually sent appellants the money
pursuant to the Agreement.
4. Certain K-1 tax forms prepared by appellants list Blue Dog
Holdings, Inc., not Blue Dog Holdings, LLC, as a partner in C3
Venture Flint LLC.
We examine each proposition in turn.
To prove that Blue Dog Holdings, LLC does not exist, Blue Dog relies solely
on one page of evidence, which it represents is a printout from the Texas Secretary
of State’s webpage. The pertinent portion of that printout is this:
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We disagree that this document conclusively proves either that Blue Dog
Holdings, LLC does not exist as a Texas business entity or that it did not exist as a
Texas business entity when the Agreement was executed. The document does not
state those facts; rather, Blue Dog asks us to infer them from the absence of Blue
Dog Holdings, LLC from the ten-item list shown. We cannot, for two reasons. First,
we generally do not draw inferences from summary-judgment evidence in favor of
the movant. See, e.g., State v. Durham, 860 S.W.2d 63, 66 (Tex. 1993); Ennis, Inc.
v. Dunbrooke Apparel Corp., 427 S.W.3d 527, 535 (Tex. App.—Dallas 2014, no
pet.). Here, the inference Blue Dog would have us draw is not one that a reasonable
juror would be compelled to make. The document indicates that a search for “blue
dog holdings” generated 2,013 results, of which only ten are shown. Thus, “Blue
Dog Holdings, LLC” could be among the 2,003 results not shown. Second, Kenjarski
repeatedly referred to Blue Dog as “Blue Dog Holdings, LLC” in his pre-litigation
correspondence. This is some evidence that Blue Dog Holdings, LLC existed.
Blue Dog next asserts that the appearance of “Blue Dog Holdings, LLC” in
the Agreement was necessarily a scrivener’s error because Blue Dog Holdings, LLC
does not exist. Because we conclude that the latter premise is not conclusively
proved, we further conclude that Blue Dog’s “scrivener’s error” theory is also not
conclusively proved.
Third, Blue Dog asserts that it, and not Blue Dog Holdings, LLC, sent the
money to appellants pursuant to the Agreement. For support, it relies on two
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passages from Schaffer’s deposition. But neither passage conclusively proves Blue
Dog’s assertion. The first is this:
Q. Do you see where [the Agreement] says, “Blue Dog and
Gambreezzi each agree to loan C3 PH the sum of $350,000” do
you see that?
A. Yes.
Q. Did that in fact happen?
A. Yes.
But because the Agreement defines “Blue Dog” to mean “Blue Dog Holdings, LLC
a Texas Limited Liability Company,” Schaffer testimony’s reasonably means that
Blue Dog Holdings, LLC actually loaned C3PH the money. The second passage is
this:
Q. Yeah. So do you think—let’s talk about Blue Dog Inc. versus
Blue Dog, LLC, which one do you think is the lender under the
note?
A. Well, the note says LLC. But I know—I know it is on the tax
reports that I received that there was Inc.
Schaffer’s testimony here is equivocal and does not conclusively establish that
appellee Blue Dog Holdings, Inc. actually furnished the money that was loaned
under the Agreement.
Finally, Blue Dog argues that the evidence conclusively proves it is the owner
and holder of the Agreement because it shows that appellants issued three K-1
federal tax forms that listed Blue Dog Holdings, Inc. as a partner in “C3 Venture
Flint, LLC.” We reject this argument for two reasons. First, it is factually incorrect.
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The K-1s actually identify “Blue Dog Holding, Inc” and not “Blue Dog Holdings,
Inc.” as a partner in C3 Venture Flint, LLC.3 Thus, they do not establish that appellee
was in fact a partner in C3 Venture Flint, LLC. Second, the K-1s say nothing about
the loan made under the Agreement. Essentially, Blue Dog urges us to draw a
conclusive inference that if the K-1s identified Blue Dog as a C3 owner, Blue Dog
must have been the entity that furnished the money loaned under the Agreement.
Although this may be a possible inference, it is not one we can draw in Blue Dog’s
favor given its status as the summary-judgment movant.4 See, e.g., Durham, 860
S.W.2d at 66; Ennis, Inc., 427 S.W.3d at 535.
D. Conclusion
We agree with appellants that Blue Dog did not conclusively establish that it
is the owner of, the holder of, or a party entitled to repayment under the Agreement.5
Accordingly, we sustain appellants’ second issue and hold that the trial judge erred
by granting Blue Dog’s summary-judgment motion. In light of our holding, we need
3
The K-1s also appear to state that “Blue Dog Holding, Inc.” is a partnership, not a corporation.
4
Blue Dog does not mention a sentence in Kenjarski’s declaration that states, “Blue Dog is the legal
owner and holder of the Note and no rights or obligations under the Note have been assigned to any third
party.” Regardless, the other evidence discussed above suffices to raise a genuine fact issue as to Blue
Dog’s right to recover on the Agreement.
5
Appellants also argue that Blue Dog’s position fails as a legal matter because the nonexistence of
Blue Dog Holdings, LLC would make Kenjarski, not Blue Dog Holdings, Inc., a party to the Agreement.
See A to Z Rental Ctr. v. Burris, 714 S.W.2d 433, 436 (Tex. App.—Austin 1986, writ ref’d n.r.e.) (per
curiam) (“[O]ne who contracts as an agent in the name of a nonexistent or fictitious principal, or a principal
without legal status or existence, renders himself personally liable on those contracts.”). We need not
address this argument.
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not consider whether appellants successfully defeated Blue Dog’s summary-
judgment motion via one of their affirmative defenses.
IV. ISSUE ONE: WHETHER APPELLANTS WERE ENTITLED
TO SUMMARY JUDGMENT
In their first issue, appellants contend that they were entitled to summary
judgment based on their affirmative defenses of quasi-estoppel and laches.
A. Standard of Review
When a defendant seeks summary judgment based on an affirmative defense,
it bears the burden of conclusively proving every essential element of the defense.
Alexander v. Wilmington Sav. Fund Soc’y, FSB, 555 S.W.3d 297, 299 (Tex. App.—
Dallas 2018, no pet.). We take evidence favorable to the nonmovant as true, and we
indulge every reasonable inference and resolve every doubt in the nonmovant’s
favor. Id. A matter is conclusively established if ordinary minds could not differ as
to the conclusion to be drawn from the evidence. Id.B. Quasi-estoppel
1. Applicable Law
Quasi-estoppel is a term applied to certain legal bars such as ratification,
election, acquiescence, or acceptance of benefits. Forney 921 Lot Dev. Partners I,
L.P. v. Paul Taylor Homes, Ltd., 349 S.W.3d 258, 268 (Tex. App.—Dallas 2011,
pet. denied). The doctrine precludes a person from asserting, to another’s
disadvantage, a right inconsistent with a position previously taken. Id. It applies
when it would be unconscionable to allow someone to maintain a position
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inconsistent with one in which he or she acquiesced. Id. Unlike equitable estoppel,
quasi-estoppel does not require a showing of a false representation or detrimental
reliance. Id.
2. Application of the Law to the Facts
Appellants’ theory is that Blue Dog forwent repayment under the Agreement
and accepted an equity ownership interest in the C3 enterprise. They contend that
allowing Blue Dog to obtain repayment under the Agreement’s original terms would
permit an unconscionable change of positions by Blue Dog to appellants’ detriment.
In support of their argument, appellants assert that they conclusively proved
that Blue Dog and Gambreezzi received an equity interest in appellants through the
following evidence. First, they point to K-1 tax forms for 2016, 2017, and 2018
showing that Blue Dog and Gambreezzi were partners in a “Partnership” called “C3
Venture Flint, LLC” with a Michigan address. Those forms also purportedly show
that Blue Dog and Gambreezzi (1) represented to the IRS that they were owners of
“the C3 entities” and (2) took large tax-loss deductions in 2016 and 2017 as owners
of those entities.
Appellants also rely on a June 2019 letter from Kenjarski to Schaffer in which
he proposed the following:
[T]he simplest solution would be to rescind the Loan and Investment
Agreement. You return our $700,000.00, we forego any C3 claim(s),
you and the remaining members of C3 take all of the tax losses for 2018.
If you are able to send us $700,000.00 by July 1, 2019, Joel and I are
willing to waive the 10% Consulting Fee. However, if you are unwilling
to rescind the Loan and Investment Agreement and return our
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$700,000.00 by July 1, 2019, we will be forced to examine other
alternatives.
According to appellants, this letter is an admission that Kenjarski and Ciarochi
received an equity interest in the C3 entities and took advantage of that status to
declare the tax losses in 2016 and 2017.
We disagree that the foregoing evidence conclusively proves the elements of
quasi-estoppel by acceptance of benefits. Appellants themselves aver that C3MI—
not Blue Dog—issued the K-1 forms. Thus, absent additional evidence that Blue
Dog actually used the K-1 forms to secure some benefit, the K-1 forms are not
evidence that Blue Dog took a position inconsistent with its current claim to be a
lender rather than an equity owner. Appellants cite no evidence other than the June
2019 Kenjarski letter. But that letter does not state that Blue Dog was an equity
owner or that Blue Dog claimed C3’s business losses in 2016 and 2017. Although
Kenjarski’s offer to let C3’s members claim the tax losses for 2018 arguably
supports an inference that Blue Dog took the tax losses in prior years, we cannot
draw that inference in favor of appellants in their capacity as summary-judgment
movants.6 See, e.g., Durham, 860 S.W.2d at 66; Ennis, Inc., 427 S.W.3d at 535.
6
The record also contains a one-page document apparently prepared by a CPA in September 2020 that
seems to indicate that “blue dog” received “K-1 pass through losses” from “C3 Venture Flint, LLC” in
2016, 2017, 2018, and 2019. Appellants do not cite this document in their quasi-estoppel argument. Even
if they did, the document does not conclusively establish any fact against appellee Blue Dog Holdings, Inc.
because (1) the phrase “blue dog” is ambiguous in the context of this case; (2) near the top of the page, the
document refers to “Blue Dog Holding, LLC”; and (3) the document does not mention Blue Dog Holdings,
Inc.
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Appellants also argue that quasi-estoppel is shown because Blue Dog actively
participated in the management and operations of the C3 entities for several years
before seeking repayment of the loan. But they cite no evidence to support this
contention, and Schaffer’s declaration says that Kenjarski and Ciarochi “offered no
real operational support.” Moreover, appellants do not explain why such
participation, even if proved, would conclusively show that Blue Dog was an equity
owner of C3 entities rather than a lender to them. We reject appellants’ argument.
Finally, appellants assert that Blue Dog’s summary-judgment response failed
to deny that Blue Dog received an ownership interest in the C3 entities and received
tax savings accordingly. But “[i]n our summary judgment practice, the opponent’s
silence never improves the quality of a movant’s evidence.” Swilley v. Hughes, 488
S.W.2d 64, 67 (Tex. 1972).
We reject appellants’ contention that they were entitled to summary judgment
based on quasi-estoppel.
C. Laches
1. Applicable Law
A party asserting the defense of laches must show both an unreasonable delay
and harm resulting from the delay. In re Marriage of Stroud, 376 S.W.3d 346, 357
(Tex. App.—Dallas 2012, pet. denied). Generally, laches will not bar a suit filed
within the limitations period unless there is some element of estoppel or such
extraordinary circumstances as would render it inequitable to enforce the claimant’s
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right after a delay. Id. Laches will not bar an action filed within limitations unless
allowing the action would work a grave injustice. Id.
2. Application of the Law to the Facts
Appellants concede that Blue Dog filed suit within the statute of limitations.
They argue nonetheless that Blue Dog unreasonably delayed in filing suit by waiting
almost four years after the repayment of the loan was due. Appellants further argue
that it would be inequitable to allow Blue Dog to enforce the Agreement after the
delay for the same reasons they assert under their quasi-estoppel argument—i.e.,
Blue Dog obtained an equity interest in the C3 enterprise, Blue Dog represented that
fact to the IRS, Blue Dog benefited from its ownership by taking tax deductions, and
Blue Dog, Kenjarski, and Ciarochi actively participated in C3’s management and
operations for several years.
We have already concluded in our quasi-estoppel analysis above that
appellants did not conclusively prove that Blue Dog’s claim is barred by estoppel.
For the same reasons, we conclude that appellants did not conclusively prove that
allowing Blue Dog to press its claims would be inequitable or work a grave injustice
to appellants. Thus, appellants were not entitled to summary judgment based on
laches.
D. Conclusion
For the foregoing reasons, we overrule appellants’ first issue on appeal.
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V. DISPOSITION
We reverse the trial court’s judgment and remand the case for further
proceedings consistent with this opinion.
/Dennise Garcia/
DENNISE GARCIA
JUSTICE
210863F.P05
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
C3 VENTURE FLINT, LLC On Appeal from the 162nd Judicial
(TEXAS), C3 VENTURE FLINT, District Court, Dallas County, Texas
LLC (MICHIGAN), AND C3 PH, Trial Court Cause No. DC-20-08434.
LLC, Appellants Opinion delivered by Justice Garcia.
Justices Myers and Pedersen, III
No. 05-21-00863-CV V. participating.
BLUE DOG HOLDINGS, INC.,
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and this cause is REMANDED to the trial court for further
proceedings consistent with the opinion.
It is ORDERED that each party bear its own costs of this appeal.
Judgment entered this 30th day of November 2022.
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