DocketNumber： 13-15-00452-CV
Filed Date： 10/13/2015
Status： Precedential
Modified Date： 9/30/2016
ACCEPTED 13-15-00452-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 10/13/2015 10:43:12 AM Dorian E. Ramirez CLERK NO. 13-15-00452- CV IN THE THIRTEENTH COURT OF APPEALS FILED IN 13th COURT OF APPEALS CORPUS CHRISTI-EDINBURG, TEXAS CORPUS CHRISTI/EDINBURG, TEXAS __________________________________________________________________ 10/13/2015 10:43:12 AM DORIAN E. RAMIREZ SANDEEP PATEL, Clerk Appellant v. HARBOR HOSPICE OF BEAUMONT, L.P., ET AL, Appellees __________________________________________________________________ 172nd Judicial District Court of Jefferson County, Texas On Appeal from the 172nd Trial Court Cause No. E-192,576 The Honorable Donald J. Floyd, Presiding __________________________________________________________________ BRIEF OF APPELLANT __________________________________________________________________ PORTNER ♦ PORTNER ♦BBoND, PLLC OND, PLLC Chris M. Portner State Bar No. 24007858 cportner@portnerbond.com J. Trenton Bond State Bar No. 00785707 tbond@portnerbond.com 1905 Calder Avenue Beaumont, Texas 77701 Telephone: (409) 838-4444 (409) 554-0240 Facsimile: (409) COUNSEL COUNSEL FOR AAPPELLANT, PPELLANT, SANDEEP S PATEL ANDEEP PATEL ORAL ARGUMENT REQUESTED IDENTITY OF PARTIES AND COUNSEL APPELLANT Sandeep Patel APPELLANT’S COUNSEL(S) APPELLANT'S Chris M. Portner State Bar No.: 24007858 cportner@portnerbond.com J. Trenton Bond State Bar No.: 00785707 tbond@portnerbond.com P ORTNER ♦ PORTNER ♦ BOND, BOND, PLLC PLLC 1905 Calder Avenue Beaumont, Texas 77701 Telephone: (409) 838-4444 (409) 554-0240 Facsimile: (409) 554-0240 Anthony Malley, III State Bar No.: 24041382 tony@mallaw.com MALLEY LLAW MALLEY AW FFIRM, IRM, PLLC PLLC 905 Orleans, Suite 110 Beaumont, Texas 77701 Telephone: (409) 212-8888 (409) 212-8002 Facsimile: (409) 212-8002 Jamie Matuska MATUSKA L MATUSKA AW F LAW FIRM IRM State Bar No.: 24051062 jamie@matuskalaw.com 2809 Highway 69 North Nederland, Texas 77627 Telephone: (409) 722-5600 (409) 727-1290 Facsimile: (409) 727-1290 ii APPELLEE(S) Beaumont, L.P. Harbor Hospice of Beaumont, L.P. Harbor Hospice Managers, LLC Arfeen Properties, L.P. Qamar Arfeen APPELLEES COUNSEL(S) David Gaultney State Bar No.: 07765300 davidgaultney@mehaffyweber.com MEHAFFYWEBER, P.C. MEHAFFYWEBER, P.C. 823 Congress Avenue, Suite 200 Austin, Texas 78701 Telephone: (512) 394-3840 (512) 394-3860 Facsimile: (512) David E. Bernsen State Bar No.: 02217500 dbernsen@bernsenlaw.com Christine L. Stetson State Bar No.: 00785047 cstetson@bernsenlaw.com BERNSEN L BERNSEN AW F LAW FIRM IRM 420 North MLK, Jr., Pkwy Beaumont, Texas 77701 Telephone: (409) 212-9994 (409) 212-9411 Facsimile: (409) 212-9411 Glen W. Morgan State Bar No.: 14438900 gmorgan@rmqlawfirm.com John Werner State Bar No.: 00789720 jwerner@rmqlawfirrn.com jwerner@rmqlawfirm.com REAUD, R MORGAN EAUD, M ORGAN & &QQUINN, LLP UINN, LLP P.O. Box 26005 Beaumont, Texas 77720-6005 Telephone: (409) 838-1000 (409) 833-8236 Facsimile: (409) ii TRIAL COURT Honorable Donald J. Floyd Judge Presiding 172nd Civil District Court Jefferson County Courthouse 1001 Pearl Street Beaumont, Texas 77701 Telephone: (409) 835-8485 iii TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL ..............................................................ii TABLE OF CONTENTS...........................................................................................iv CONTENTS iv INDEX OF AUTHORITIES.....................................................................................vii AUTHORITIES vii CASE STATEMENT OF THE CASE................................................................................... x PRESENTED...............................................................................................xi ISSUES PRESENTED xi STATEMENT OF FACTS ......................................................................................... 1 SUMMARY OF ARGUMENT ................................................................................ 12 ARGUMENT ............................................................................................................ 15 I. The TheTrial TrialCourt CourtErred ErredininGranting GrantingAppellees' Appellees’Amended Amended Motion for Summary Judgment ................................................................ ……...15 ..15 ISSUE ONE: A. ISSUE ONE: Appellees Appellees Did Did Not Not Establish a Statute of Limitations Defense as a Matter of Law ............................... 16 1. Summary 1. Judgment Evidence Summary Judgment Evidence Establishes Establishes Patel Patel Partner in Harbor Was a Partner Harbor Hospice Hospice After June 15, 2008 ......................................................................................... ……...18 ..18 2. Appellees Failed to Establish As a Matter of Law That Patel That Patel Was Was No Longer Longer a Partner Partner inin Harbor Harbor Hospice On or Before June 15, 2008 2008................................ ……...20 ..20 a. The a. The Parker Parker Letter Letter does does not not terminate terminate Patel’s limited Patel's limited partnership interest interest.............................. ……...20 20 b. Amendment 4 to the partnership agreement was executed on November 10, 2011........................... 2011 ……...22 ..22 c. c. Undated Amendment 4 No. 4 ................................... 22 iv iv Appellees failed d. Appellees failed to to establish establish as as a Matter of Law that Patel knew or should have known of any injury on or before June 15, 2008 2008..................... …..….23 23 e. e. Patel never testified Patel never testified that that his his limited limited partnership interest partnership interest was was terminated, terminated, redeemed or redeemed transferred to or transferred to Defendant Defendant Arfeen Arfeen................................................................ .24 ……...24 3. Appellees 3. Appellees Failed Failed to to Establish Establish as as aa Matter Matter of Law that Patel's Law that Patel’s Cause Cause of of Action Action for for Conversion Conversionand and Under Under the the Texas Texas Theft Theft Liability Liability Act Act Accrued Accrued on on or Before Before June 15, 2010 ................................................................................... ……...24 ..24 Appellees Failed 4. Appellees Failed to to Conclusively Conclusively Establish Establish Discovery Rule that Patel Knew or Under the Discovery Reasonably Reasonably Should Should Have Have Known That His Known That His Interest Was Terminated by June 15, 2008........................ 2008 …...…26 ........26 5. Appellees Failed 5. Appellees Failed to to Conclusively Conclusively Negate Negate Patel’s Affirmative Defense Patel's Affirmative Defense of of Fraudulent Fraudulent Concealment ................................................................ ……...31 ..31 ISSUE TWO: B. ISSUE TWO: The Trial Trial Court Court Erred Erred in in Concluding Concluding that No Genuine that Genuine Issue Issue of Material Material Fact Exists Exists on on Any of Patel’s Claims................................................... Patel's Asserted Claims ……...32 ..32 1. The 1. trial court The trial court erred erred iningranting granting summary summary judgment regarding judgment regarding Patel’s breach of Patel's breach of fiduciary fiduciary duty claims duty claims because because the the summary summary judgment judgment evidence raises questions of material fact ...............…..….33 33 2. The trial court The trial court erred erred iningranting granting summary summary judgment regarding judgment regarding Patel’s breach of Patel's breach of contract contract claim because the claim because the summary summary judgment judgment evidence evidence raises questions of material fact................................ fact ……...36 ..36 v 3. The 3. trial court The trial court erred erred iningranting granting summarysummary judgment regarding judgment regarding Patel's Patel’s conversion conversion claim claim because the summary because summary judgment judgment evidence evidence raises raises questions of material fact................................ fact ........................ ……...37 ..37 4. The trial court The trial court errederred iningranting granting summarysummary judgment regarding regarding Patel’sPatel's claim for Texas Theft Liability Liability Act violations because Act violations because the the summary summary judgment evidence judgment evidence raises raises questions questions of material material fact .......................................................................................... ……...38 38 5. 5. The trial court The trial court erred erred iningranting granting summary summary judgment regarding judgment regardingPatel’s Patel's claim for fraud claim for fraud because Appellees because Appellees did not seek did not seek summary summary judgment regarding Patel’s claim................................ Patel's fraud claim ……...4040 Cow. C
. ISSUE THREE: The Trial Court Erred in Concluding Appellees Conclusively Appellees Conclusively Established Established that that Patel Patel Did Did Not Suffer Damages ................................................................ ……...40 40 D. ISSUE ISSUE FOUR: FOUR: The The Trial Trial Court Court ErredErred in in Granting Granting Summary Summary Judgment Judgment Because Because Appellee’s Appellee's Failed Failed to Authenticate Any Authenticate Any of Their Their Summary Summary Judgment Judgment Evidence................................................................ Evidence ....................... ……...43 43 E. CONCLUSION and PRAYER for RELIEF ....................................................... 44 CERTIFICATE OF SERVICE ................................................................................. 46 CERTIFICATE OF COMPLIANCE, TEX. R. APP. PROC. 9.4(1)(3) ................... 47 APPENDIX June 18, 2015 Order on Defendants’ Defendants' Amended Motion for Summary Judgment.................................................................................................. Judgment 1AB TAB A vi vi INDEX OF AUTHORITIES CASES Alaniz v. Hoyt, 330, 344105 S.W.3d 330
, 344 (Tex. (Tex. App. App.—– Corpus Corpus Christi Christi 2003, 2003, not pet.)...............15 pet.) 15 Aquaplex, Inc. v. Rancho La Valencia, Inc., 42297 S.W.3d 768
, 775-776 (Tex. 2009)..........................................................42 2009) Blanche v. First Nationwide Mortg. Corp.74 S.W.3d 444
, 451 (Tex. App. Dallas 2002) ..............................................44 44 Bliss v. NRG Industries, S.W.3d 434162 S.W.3d 434
(Tex. (Tex. App. App.—– Dallas Dallas 2005, 2005, pet. pet. denied) ..............................15 15 BP America Prod. Co. v. Marshall,342 S.W.3d 59
, 67-69 (Tex. 2011) ................................................................31 31 Dernick Resources, Inc. v. Wilstein, st312 S.W.3d 864
, 878 (Tex. App.—Houston [1 [1St Dist.] 2009, no pet.)..........31 pet.) 31 Doe v. Boys Club of Greater Dallas, Inc.,907 S.W.2d 472
, 476-77 (Tex. 1995)............................................................16 1995) 16 Friendswood Dev. Co. v. McDade & Co.,926 S.W.2d 280
, 282 (Tex. 1996) .................................................................15 15 Gaddis v. Smith,417 S.W.2d 577
, 578 (Tex. 1977) .................................................................26 26 G&H Towing Co. v. Magee,347 S.W.3d 293
, 297 (Tex. 2011) .................................................................40 40 Graham Morg. Morg. Corp. Corp. v. v. Hall, Hag307 S.W.3d 472
, 479 (Tex. App. - Dallas 2010, no pet)...............................33 pet) 33 Groves v. Hanks,546 S.W.2d 638
, 647 (Tex. Civ. App. Corpus Christi 1976)........................42 1976) 42 vii vii Haas v. George,71 S.W.3d 904
, 913 (Tex. App.—Texarkana 2002, no pet.) ........................32 32 Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,289 S.W.3d 844
, 848 (Tex. 2009) .................................................................15 15 Messner v. Boon, 2015 Tex. App. LEXIS 747, *30 (Tex. App. Texarkana Jan. 28, 2015) ......17 17 Moreno v. Sterling Drug, Inc.,787 S.W.2d 348
, 351 (Tex. 1990) .................................................................26 26 Nautilus Training Center No. 2, Inc. v. Seafirst Leasing Corp.,647 S.W.2d 344
, 344, 346-47 346-47 (Tex. (Tex. App. App.—– Corpus Corpus Christi Christi 1982, 1982, no writ)..........16 writ) 16 Qaddura v. Indo-European Foods, Inc. Inc,,141 S.W.3d 882
, 888-890 (Tex. App. Dallas 2004)......................................41 2004) 41 Punts v. Wilson,137 S.W.3d 889
, 891 (Tex. App. Texarkana 2004) ......................................42 42 Rhone-Poulenc, Inc. v. Steel,997 S.W.2d 217
, 223 (1999)..........................................................................16 (1999) 16 Santanna Natural Gas v. Hamon Operations,954 S.W.2d 885
, 890-891 (Tex. App.—Austin 1997, pet. denied).........17, denied) 17, 31 Schneider Nat’l Carriers, Inc. v. Bates, Nat'l Carriers,147 S.W.3d 264
, 279 (Tex. 2004) .................................................................21 21 Shell Oil Co. v. Ross,356 S.W.3d 924
, 927 (Tex. 2011) .................................................................31 31 S.V. v. R.V., 26, 27933 S.W.2d 1
, 4 (Tex. 1996) ...................................................................26, Willis v. Maverick,760 S.W.2d 642
, 646 (Tex. 1988) .................................................................26
26
viii
viii
RULES
Tex. R. Civ. P. 166a .................................................................................................15
15
Tex. R. Civ. P. 166a(c) ............................................................................................15
15
ix
ix
STATEMENT OF THE CASE
This is an
This an appeal
appeal by
by Plaintiff
Plaintiff Sandeep
Sandeep Patel ("Patel")
("Patel") from motion for
from a motion
summary judgment granted in favor of Appellees, disposing of all of Patel's claims
against Appellees
against Appellees in
in a lawsuit for fraud,
fraud, breach
breach of contract,
contract, breach
breach of
of fiduciary
fiduciary
duty, conversion,
duty, conversion, for
for violations
violationsofof the Texas Theft
the Texas Theft Liability
Liability Act, and for
Act, and for
declaratory relief.
xx
ISSUES PRESENTED
1.
1. Issue One: The
Thetrial
trialcourt
courterred
erredin
ingranting
granting summary
summary judgment
judgment based upon
Appellees’ affirmative
Appellees' affirmative defense
defense of statute of limitations because the summary
judgment evidence raises questions of material fact.
2. Issue Two:
Two: TheThetrial
trialcourt
courterred
errediningranting
grantingsummary
summary judgment
judgment upon all
Appellees’ alleged
Appellees' alleged causes
causes of
of action
action because the summary judgment evidence
raises questions of material fact regarding the merits of each alleged claim.
a.
a. The trial court erred in granting
granting summary
summary judgment
judgment regarding Patel's
breach of fiduciary
breach fiduciary duty
duty claim
claim because
because the
the summary
summary judgment
judgment
evidence raises questions of material fact.
b. The trial court erred in granting
granting summary
summary judgment
judgment regarding Patel's
breach of contract
breach contract claim
claim because
because the
the summary
summary judgment
judgment evidence
evidence
raises questions of material fact.
c.
c. The trial court erred in granting
granting summary
summary judgment
judgment regarding Patel's
conversion
conversion claim because the summary
claim because summary judgment
judgment evidence
evidence raises
raises
questions of material fact.
d. The trial court erred in granting
granting summary
summary judgment
judgment regarding Patel's
violations of the Texas Theft Liability Act claim because the summary
judgment evidence raises questions of material fact.
e.
e. The trial court erred in granting
granting summary
summary judgment
judgment regarding Patel's
claim fraud because
claim for fraud because Appellees
Appellees did not
not seek
seek summary
summary judgment
judgment
regarding Patel’s
Patel's fraud claim.
6. Issue Three:
Three: The
Thetrial
trialcourt
courterred
errediningranting
grantingsummary
summary judgment
judgment and
and
finding
finding that
that Patel did not
not suffer
suffer damages
damages because
because the
the summary
summary judgment
judgment
evidence raises questions of material fact.
7. Issue Four: TheThetrial
trialcourt
courterred
errediningranting
grantingsummary
summary judgment
judgment because
because
Appellees' failed to authenticate any of their summary judgment evidence.
xi
xi
STATEMENT OF FACTS
Patel and Qamar Arfeen ("Arfeen") were limited partners in Harbor Hospice
of Beaumont, LP
of Beaumont, LP ("Harbor
("HarborHospice").
Hospice"). (C.R.
(C.R. 42-88). The general
42-88). The general partner
partner of
Harbor Hospice
Harbor Hospice is
is Harbor
Harbor Hospice
Hospice Managers,
Managers,LLC. 87, 126-129,
LLC. (C.R. 84, 87, 126-129, 135-
140, 171-203).
Patel received a 3% Class A Limited Partnership Interest in Harbor Hospice
of Beaumont,
Beaumont, LP
LP in
in 2005. 83). Several
2005. (C.R. 79, 83) Severalamendments
amendments were
were allegedly
allegedly then
made to the
made the Harbor
Harbor Hospice
Hospice Limited
Limited Partnership
Partnership Agreement
Agreement (the
(the "Partnership
“Partnership
Agreement”). (C.R.
Agreement"). (C.R. 126
126 - 129, 135-
135- 140,
140, 171
171 - 203).
203). Patel's
Patel's Class
Class A
A Limited
Limited
Partnership
Partnership Interest
Interest in Harbor Hospice
Hospice was increased
increased to 6% in Amendment No. 2
to Agreement of Limited Partnership
Partnership of
of Harbor
Harbor Hospice.
Hospice. (C.R. 176-180).
Appellees' decided
At some point, the Appellees' decided to implement aa plan
to implement Arfeen to
plan for Arfeen
improperly take
improperly possession of
take possession Patel's limited
of Patel's limited partnership
partnership interest
interest in Harbor
Harbor
Hospice. Appellees'
Hospice. Appellees' had
had several
several options
options about
about how
how to try to take
take possession
possession of
Patel's
Patel's limited
limited partnership
partnership interest. First of
interest. First of all,
all, Harbor
Harbor Hospice
Hospice could
could attempt to
terminate Patel’s
terminate limited partnership
Patel's limited partnership interest
interest for alleged
alleged wrongful
wrongful conduct
conduct and
forfeit
forfeit the limited partnership
the limited partnership interest
interestback
backto
to the
the partnership. If this
partnership. If this occurred,
occurred,
Patel's limited
limited partnership
partnership interest
interest would
would be
be returned
returned to
to the
the partnership
partnership and
and all
all of
partners would
the partners would benefit
benefit on
on a pro-rata
pro-rata basis. Secondly, Harbor
basis. Secondly, Harbor Hospice
Hospice could
could
attempt to
attempt redeem Patel’s
to redeem Patel's interest.
interest. IfIfthis
thisoccurred,
occurred, Patel's
Patel's interest
interest would
would be
1
1
returned to the partnership and all of the partners would benefit on a pro-rata basis.
Finally, Arfeen
Finally, Arfeen could
could seek
seek to acquire Patel's
to acquire Patel’s interest
interest directly
directly from
from Patel
Patel and
and
transfer the
transfer shares to
the shares Arfeen. However,
to Arfeen. However, ififArfeen
Arfeen acquired
acquired Patel's
Patel’s limited
limited
partnership interest
partnership interestdirectly,
directly,he
hewould
wouldhave
havetoto pay
pay Patel
Patel the
the fair value for the
fair value
shares.
Apparently, none
Apparently, none of
of these
these options
options were
were appealing
appealing to
to Arfeen. Therefore,
Arfeen. Therefore,
instead of complying the terms of the Partnership Agreement, Appellees decided to
wrongfully transfer
wrongfully transfer Patel’s
Patel's limited
limited partnership
partnership interest
interest to
to Arfeen,
Arfeen, to Patel
to pay Patel
nothing, to not inform Patel that the transfer occurred, and to ultimately create false
documents in an effort to conceal this improper transaction.
Arfeen Wrongfully Took Possession of Patel’s
Patel's Limited Partnership Interest
Appellees’ Amended
In Appellees' Amended Motion
Motion for
for Summary
Summary Judgment,
Judgment, Appellees'
Appellees' assert
assert
Patel’s Limited
that Patel's Limited Partnership
Partnership Interest was terminated
terminated or redeemed
redeemed by Harbor
Harbor
Hospice. However,
Hospice. However, in
in reality,
reality, Patel's
Patel’s Limited
Limited Partnership
Partnership Interest
Interest was
was not
not
redeemed, terminated
redeemed, terminated or
or otherwise
otherwise returned
returnedto
to Harbor
HarborHospice
Hospiceininany
anymanner.
manner. It
was improperly
improperly transferred
transferred directly
directly to
to Arfeen. This improper
Arfeen. This improper transfer
transfer was made
made
without consideration
without considerationand
and without
withoutever
ever informing
informingPatel. Appellees failed
Patel. Appellees failed to
produce summary judgment evidence demonstrating
demonstrating that
that Patel was ever informed
limited partnership
that his limited partnership interest in Harbor Hospice was transferred directly to
Arfeen.
22
The Harbor
The Harbor Hospice
Hospice General
General Ledger
Ledger for the year
for the year 2009
2009conclusively
conclusively
establishes
establishes that Patel’s limited
that Patel's limited partnership
partnership interest
interest was transferred
transferred directly
directly to
(C.R. 204
Arfeen. (C.R. 204 -- 206). The
The2009
2009 General
General Ledger
Ledger states:
01/01/09 “Transfer of
"Transfer 2008 partnership
of 2008 partnership interest
interest from
from
Chaudhury &
Chaudhury Patel to
& Patel to Arfeed'.
Arfeen”. (C.R.
(C.R. 204
204 -- 205)
205)
(“emphasis added”).
("emphasis added').
Clearly,
Clearly, if Patel's
Patel’s limited
limited partnership
partnership interest
interest was
was transferred
transferred directly
directly to
Arfeen, then Patel's
Arfeen, Patel’s limited
limited partnership
partnership interest could not have
have been
been terminated,
terminated,
forfeited, or redeemed.
The transfer of Patel's
Patel’s limited
limited partnership
partnership interest is explained in an e-mail
dated April 6, 2009 from Harbor Hospice’s
Hospice's accountant, Monica Surratt:
Paul pointed out
Paul pointed out that
that Sandeep
Sandeep Patel
Patel && Trip
Trip Chaudhury
Chaudhury were
were
included in the Due from
from Partners
Partners account.
account. Since both of them are
out as of 1/1/08, what should I do with these balances?
Since partnership did
Since the partnership did not interest back
not buy their interest back (it was
transferred to Qamar instead of re-allocated among the other
transferred
then any
partners), then anypurchase/payment
purchase/payment should
should have
have happened
happened
outside of the
the partnership.
partnership. (C.R. 207)(“emphasis
207)("emphasis added”).
added').
After the direct
After direct transfer
transfer of Patel's
Patel’s limited
limited partnership
partnership interest
interest to
to Arfeen,
Arfeen,
Harbor Hospice
Harbor Hospice filed
filed Form
Form 8308,
8308, Report
Report of
of aa Sale
Sale or
or Exchange
Exchange of
of Certain
Certain
Partnership
Partnership Interests
Interests(“Form
("Form8308”)
8308")with
with the
the Internal
Internal Revenue
RevenueService. (C.R.
Service. (C.R.
208). Form
208). Form 8308
8308 was
was filed
filed with
with the
the Internal
Internal Revenue
Revenue Service
Service on April 7, 2009.
2009.
(C.R. 209). In
InForm
Form 8308,
8308, Harbor
Harbor Hospice
Hospice informed
informed the Internal
Internal Revenue Service,
3
3
under penalty of perjury, that Patel’s
Patel's limited partnership interest in Harbor Hospice
was transferred directly
directly to
to Arfeen. 208).
Arfeen. (C.R. 208)
These documents
These documents clearly
clearly establish
establish that Patel’s limited
that Patel's limited partnership
partnership interest
interest
transferred directly
was transferred directly from
from Patel
Patel to
to Arfeen. Unfortunately, the Appellees
Arfeen. Unfortunately, Appellees never
informed Patel
informed Patel that
that his
his interest
interest was
was transferred
transferredtoto Arfeen. This is
Arfeen. This is not
not disputed.
disputed.
Ultimately, Arfeen
Ultimately, Arfeen transferred
transferred Patel's
Patel's limited partnership interest
limited partnership interest in Harbor
Harbor
Hospice to Arfeen
Arfeen Properties,
Properties, LP.
LP. (C.R. 193-198). There
There is
is no
no summary
summary judgment
evidence
evidence suggesting
suggesting that
that Patel
Patel was informed that
was ever informed that his
his limited
limited partnership
partnership
interest was transferred to Arfeen and then to Arfeen Properties, LP.
Patel's Limited Partnership Interest in Harbor Hospice Was Never Terminated
Section 10.2 of the Harbor Hospice Partnership Agreement provides:
All
All ofof the
thegeneral
generalpartners
partners maymayunanimously
unanimously terminate
terminate the the
interest of a limited partner and expel him(a) for interfering in the
management of
management the partnership
of the partnership affairs
affairs or otherwise
otherwise engaging
engaging in
conduct which could result in the partnership losing losing its tax status as a
partnership, (b)
partnership, (b)ifif the conduct of
the conduct of aa limited
limited partner
partner brings
brings the the
partnership into disrepute, or (c) for failing to meet any commitment
the partnership
to the partnership or manager
manager in in accordance
accordance with any any written
written
undertaking signed
undertaking signed by by such limited partner,
such limited partner, butbut thethe general
general
partners shall
partners shall not
not be required
required to so so terminate.
terminate. In In each
each of of the
the
foregoing
foregoing events,
events, the
the expulsion
expulsion andand termination
termination may,may, in the sole
in the sole
discretion of
discretion of the general partners
the general partners in order to
in order to compensate
compensate for for any
any
damages caused
damages causedto to the partnership, result
the partnership, resultinin aa forfeiture
forfeiture to the
to the
partnership of
partnership of all or a portion
portion of the
the value
value of
of the
the partnership
partnership interest
interest
of the expelled
expelled partner at the timetime ofof such
such expulsion
expulsion or or termination.
termination.
(C.R. 62)(“emphasis
62)("emphasis added”).
added").
4
4
There is no
There no summary
summary judgment
judgment evidence
evidence to establish
establish that the
the general
general
partners of Harbor Hospice unanimously
unanimously terminated
terminated Patel’s
Patel's interest as required by
Section 10.2 of the Harbor
Harbor Hospice
Hospice Partnership
Partnership Agreement.
Agreement. The general partner of
Harbor Hospice
Harbor Hospice is
is Harbor
Harbor Hospice
Hospice Managers,
Managers,LLC. 87, 126-129,
LLC. (C.R. 84, 87, 126-129, 135-
140, 171-203).
140, 171-203). There
There isisno
nosummary
summaryjudgment
judgment evidence
evidence that
that Harbor
Harbor Hospice
Hospice
Managers, LLC ever took any action to terminate the interest of Patel.
Furthermore, there
Furthermore, there is summary judgment
is no summary judgment evidence
evidence to establish
establish that
that
Patel’s Limited Partnership
Patel's Limited Partnership Interest
Interest in
in Harbor
Harbor Hospice
Hospice was
was ever
ever terminated.
terminated. No
witness testimony
witness testimony alleges
alleges Patel’s limited partnership
Patel's limited partnership interest
interest in Harbor
Harbor Hospice
Hospice
was ever terminated.
was terminated. No
Nodocument
document establishes
establishes that
that Patel's
Patel’s limited
limited partnership
partnership
interest in
interest Harbor Hospice
in Harbor Hospice was ever terminated.
was ever terminated. The
The only
only summary
summary judgment
judgment
evidence
evidence that
that even
even mentions
mentions termination
termination isis aa letter
letter dated
dated March
March 4, 2008 to Patel
from Maggie Parker (the “Parker
"Parker Letter”). 121-125).1
(C.R. 121-125)1
Letter"). (C.R.
When presented with a copy of this letter in his deposition and a copy of the
green card
green card showing
showing his wife’s signature
his wife's signature evidencing
evidencing receipt
receipt of letter, Patel
of the letter, Patel
acknowledged his
acknowledged his wife’s signature and
wife's signature receipt as evidenced
and receipt evidenced by the
the documents.
documents.
(C.R. 94-95). However, Patel
94-95). However, Patel did
did not
not recall
recall seeing
seeing the
the letter
letter or whether
whether his wife
brought the letter to his
brought his attention;
attention; he further
further testified
testified that his wife
wife handled
handled their
'1 The Parker Letter attached to Defendants' Amended Motion for Summary Judgment is missing
second page.
the second However, the
page. However, the full
full letter
letter isis in
inthe
theDefendant's
Defendant’s original
original motion
motion for
for summary
summary
judgment filed as a supplemental clerk’s
clerk's record in this Court.
55
financials and that he was certain that his wife or his accountant would have taken
care
care of after receiving
of it after receiving the
the letter. (C.R. 97,
letter. (C.R. 97, 98).
98). Appellees
Appellees presented
presented no
no
summary judgment evidence conclusively
conclusively establishing
establishing that
that Patel
Patel failed to comply
with Parker’s financials.2
request for financials
Parker's request
Additionally, Appellees
Additionally, Appellees presented
presented no summary judgment
no summary judgment evidence
evidence that
that
Harbor Hospice’s
Hospice's general partner took any action against Patel’s
Patel's interest as a result
of any alleged noncompliance
noncompliance with
with the
the letter. Although the
letter. Although the Parker
Parker Letter
Letter clearly
clearly
threatens termination
threatens terminationifif certain
certain conduct
conductdid
did not
not occur,
occur, itit does
does not provide
provide any
evidence
evidence whatsoever
whatsoever that
that the termination actually
the termination actually occurred. Furthermore, the
occurred. Furthermore,
Parker
Parker letter
letter does provide any evidence
does not provide evidence that the general
general partner
partner of Harbor
Harbor
Hospice unanimously
Hospice unanimouslyterminated
terminatedthe
theinterest
interestofofPatel
Pateland
andexpelled
expelledhim. The
him. The
Parker
Parker Letter
Letter was
was aa threat
threat and
and nothing
nothing more. There isisno
more. There nosummary
summary judgment
judgment
evidence
evidence that
that the general partner
the general partner took
took any
any action
action to
to terminate
terminate Patel's
Patel's limited
limited
partnership interest and expel him after the Parker Letter.
Patels' Limited Partnership Interest in Harbor Hospice Was Never Redeemed
Section 8.5 provides:
(a) The partnership
partnership interests
interests of
of all limited
limited partners
partners are subject
subject to
redemption
redemption by the partnership
by the partnership at at the
the election
election of
of the
the general
general
partners. In the event
In the event the
the general
general partners
partners make
make such
such an
an
2
2 only arguably
The only arguably controverting
controverting evidence
evidence that Appellees
Appellees submitted
submitted was
was the
the inconclusive
inconclusive
deposition testimony
deposition testimony of
of Joe
Joe Chapman
Chapman wherein
wherein hehe testified
testified that
that he
he was aware there were some
issues with
issues getting partners
with getting partners to provide financials
to provide financialstoto the bank prior
the bank prior to the
the refinance,
refinance, and
and
speculated, but could not say for certain,
certain, that
that Patel
Patel failed
failed to
to provide
provide financials.
financials. (C.R. 117)
6
6
election, the general partners shall provide the limited partner
partnership interest
whose partnership interest is to be
be redeemed
redeemed (the
(the "Redeemed
“Redeemed
Partner”) with
Partner") with aa least
least sixty days’ prior written
sixty days' written notice
notice of the
redemption.
(b) The purchase price of the Redeemed
(b)The Redeemed Partner’s
Partner's LPI shall equal the
balance of the
balance the Redeemed
Redeemed Partner's
Partner’s capital
capital account
account established
established
under Section 5.1 hereof, determined
determined as of the end of the calendar
month
month immediately preceding the
immediately preceding the month
month inin which
which the
the closing
closing of
redemption transaction
the redemption transactiontakes
takesplace. (C.R. 57-58)(“
place. (C.R. emphasis
57-58)(tmphasis
added”).
added").
The summary
The summary judgment
judgment record
record establishes
establishes that
that the general partners
the general partners failed
failed to
provide sixty days
days prior written
written notice
notice of
of redemption
redemption to
to Patel. Therefore, Section
Patel. Therefore,
8.5 of
8.5 of the
the Harbor
Harbor Hospice
Hospice Partnership
Partnership Agreement
Agreementdoes
doesnot
notapply. The only
apply. The only
summary judgment
summary judgment evidence
evidence that
that was
was ever
ever allegedly
allegedly sent
sent to Patel was the Parker
Letter. The
The Parker
Parker Letter
Letter (i)
(i) does
does not
not address
address redemption,
redemption, (ii) does not provide 60
days notice of anything (the deadline in the letter actually passed before the letter
was received),
was received), (iii) threatens termination,
(iii) threatens termination,and
and (iv)
(iv) does not even
does not even mention
mention the
the
general partner,
general partner, Harbor
Harbor Hospice
HospiceManagers,
Managers,LLC. Patel's interest
LLC. Patel's interest was
was not
not
redeemed in
redeemed compliance with
in compliance Section 8.5
with Section of the
8.5 of the Harbor
Harbor Hospice
Hospice Partnership
Partnership
Agreement. Most
Agreement. Most importantly,
importantly, Appellees
Appellees have failed to establish
have failed establish that
that Patel's
Patel's
limited partnership interest was actually redeemed by the partnership
partnership or the date of
the alleged redemption. Instead
Instead of
of redeeming
redeeming Patel's
Patel's limited
limited partnership interest to
partnership, Appellees
the partnership, Appellees decided
decided to transfer
transfer Patel's
Patel's limited
limited partnership
partnership interest
interest
directly to Arfeen.
77
The Coverup
Though Appellees
Though Appellees contend
contend Patel’s partnership interest
Patel's partnership interest was
was "forfeited"
“forfeited”
15, 2008,
before June 15, 2008, several
several significant
significant documents
documents contradict
contradict their
their contentions.
contentions.
A Harbor Hospice Balance Sheet dated December 31, 2008 establishes that Patel
was still a limited
limited partner
partner as
as of
of that
that date.
date. (C.R. 217). AAHarbor
Harbor Hospice
Hospice General
General
Ledger establishes that Arfeen
Ledger from 2009 establishes Arfeen wrongfully
wrongfully took possession
possession of Patel's
Patel's
limited partnership interest
interest in
in 2009.
2009. (C.R. 204-206).
Hospice’s accountant,
An email from Harbor Hospice's accountant, Monica Surratt, from April of
2009 confirms
2009 confirms Arfeen’s improper direct
Arfeen's improper direct transfer
transfer stating,
stating, “[s]ince the partnership
"[Once the partnership
interest back (it was
did not buy their interest was transferred
transferred to Qamar
Qamar instead of reallocated
reallocated
among the other
among other partners),
partners), then
then any
any purchase/payment
purchase/payment should
should have
have happened
happened
outside
outside of the partnership.”3 (C.R.
the partnership.° (C.R. 207).
207). Arfeen's
Arfeen’simproper
impropertransfer
transfer is
is further
further
evidenced by Harbor Hospice’s
Hospice's 8309 Form filed with the Internal Revenue Service
Patel’s limited
stating that Patel's limited partnership
partnership interest
interest in Harbor
Harbor Hospice
Hospice was
was transferred
transferred
directly to
directly to Arfeen. (C.R. 208).
Arfeen. (C.R. 208). Though
Thoughthe
theform
formstates
statesthe
thelimited
limited partnership
partnership
interest was transferred as of 1/1/08 that date is inconsistent with the balance sheet
3
3 Arfeen’s improper
Arfeen's improper transfer is further confirmed by Harbor Hospice’s
Hospice's 8309 Form filed with the
Internal Revenue
Revenue Service
Service stating
stating that
that Patel’s limited partnership
Patel's limited partnership interest in Harbor Hospice was
transferred directly to
to Arfeen.
Arfeen. (C.R. 208).
88
and general ledger, and the form does not appear to have been prepared until April
of 2009. (C.R.
(C.R. 207, 209).
2011, apparently
In 2011, apparently Appellees
Appellees realized
realized that
that they had not
they had not completed
completed an
an
appropriate paper
appropriate paper trail regarding this
trail regarding improper transaction.
this improper The Partnership
transaction. The Partnership
Agreement had
Agreement never been amended
had never amended to reflect
reflect Arfeen's
Arfeen's wrongful
wrongful acquisition
acquisition of
Patel's limited partnership
Patel's limited partnership interest. Therefore, Appellees
interest. Therefore, Appellees created
created two
two different
different
Amendment No.
Amendment No. 4’s to Agreement
4's to Agreement of
of Limited
Limited Partnership
Partnership of
of Harbor
Harbor Hospice.
Hospice.
(C.R. 126-129,
126-129, 135-140). One of
135-140). One of the
the Amendment
Amendment No. 4's is
is dated
dated November
November 10,
2011 (the "Dated
2011 "Dated Amendment
AmendmentNo.
No.4"). (C.R. 135-140).
4"). (C.R. 135-140). The
The Dated
Dated Amendment
Amendment
No. 4 states:
(1)Section 12.2(a) of the Partnership Agreement provides that each limited
partner authorizes
partner authorizes and
and empowers
empowers the
the general
general partners
partners to amend the
to amend the
Partnership Agreement;
(2)The General Partner has elected to redeem the limited partner interests of
Triptesh Chaudhury and Sandeep Patel in accordance with Section 8.5 of
the Partnership Agreement;
The General
(3)The General Partner
Partner desires
desires to amend
amend the
the Partnership
Partnership Agreement
Agreement to
adjust the limited partnership percentages
percentages following
following the effective
effective date of
the redemption;
(4) The effective
(4)The effective date of the redemption shall be January 1, 2008;
(5)Exhibit “A” Partnership is hereby amended so that from and after
"A" to the Partnership
the effective date, the limited partners and their respective interest in the
partnership shall be as set forth in such exhibit; and
(6)Exhibit “A”
"A" appears to reflect all Class C Limited Partners.
9
9
Amendment No.
The other Amendment No. 4 (the "Undated
"Undated Amendment
Amendment No.
No. 4") states an
effective
effective date
date but
but does
does not
not state
statethe
the date
dateitit was
was executed.
executed. (C.R.
(C.R. 126-129). The
126-129). The
Undated Amendment No. 4 states:
(1) The same
(1)The same information
information set
set forth
forth in
in (1)
(1)—
– (5) from the Dated Amendment
Amendment
No. 4 above;
(2)The
The document
documentisis not
not dated
dated but
but states
states that was "EXECUTED
that it was “EXECUTED to
to be
st
effective as of the 1st
1 day of January, 2008”;
2008"; and
(3) Exhibit “A”
(3)Exhibit does not
"A" does not reflect
reflect the
the Class
Class C Limited Partners.
C Limited (C.R. 126-
Partners. (C.R.
129).
The inconsistencies
The inconsistencies inin the
the two amendment No.
two amendment No. 4’s evidence a blatant
4's evidence blatant
attempt to cover up the improper
attempt improper transfer. The second
transfer. The second Amendment
Amendment No. 4 deletes
November 10, 2011 date of
the November of execution
execution and
and deceptively
deceptively attempts
attempts to make the
amendment effective
amendment effectiveas
as of January 1, 2008,
of January 2008, nearly
nearly four
four years
years earlier,
earlier, without
without
stating that the document was actually executed in 2011. (C.R. 126-129, 135-140).
Regardless
Regardless of Appellees’ futile attempt
of Appellees' attempt to legally
legally effectuate
effectuate Arfeen's
Arfeen’s improper
improper
transfer, there
transfer, no summary
there is no summary judgment
judgment evidence
evidence indicating
indicating that
that the
the Limited
Limited
Partnership
Partnership Agreement
Agreement of
of Harbor
Harbor Hospice
Hospice was amended to remove Patel before
was amended before
November 10, 2011. (C.R. 135 - 140).
2011. (C.R.
Both Amendment
Both Amendment 4's
4's state
state that
that Patel's
Patel's interest
interest was
was redeemed. (C.R. 126-
redeemed. (C.R.
129, 135-140).
129, 135-140). Both
Both Amendment
Amendment 4's
4's are
are inconsistent
inconsistent with
with the
the 2009
2009 General
General
Ledger
Ledger of Harbor
Harbor Hospice,
Hospice, the 2008
2008 Tax
Tax Return
Return of
of Harbor
Harbor Hospice
Hospice (including
(including
Form 8308), and
and the notes
notes of
of the accountant
accountant of
of Harbor
Harbor Hospice.
Hospice. (C.R. 204 - 206,
10
10
C.R.
C.R. 208,
208, and
and C.R. 207). TheDated
207). The Dated Amendment
Amendment No.
No. 44 was
was created
created nearly
nearly four
years after the alleged transfer.
transfer. ItIt isis unclear
unclear when
when the
the Undated
Undated Amendment
Amendment 4 was
created. When confronted
created. When confronted with
with the
the conflicting
conflicting Amendment
Amendment 4’s, the Harbor
4's, the Harbor
Hospice representative
Hospice representative designated
designated to
to testify
testify regarding
regarding the alleged termination
the alleged termination of
Patel’s ownership interest
Patel's ownership interest in Harbor
Harbor Hospice
Hospice stated
stated that was concerned
that he was concerned that
someone might
someone might have
have done
done something
something unethical,
unethical,immoral
immoralororillegal.
illegal. (C.R. 212-
213).
Appellees persuade the trial court to grant summary judgment
Appellees' Amended Motion for Summary Judgment did not seek summary
judgment on
judgment no-evidence grounds.
on no-evidence Instead, Appellees
grounds. Instead, Appellees sought
sought to establish as
to establish as a
matter of law that (i) Patel's claims are barred by the statute of limitations, (ii) there
was no genuine issue of material fact as to Patel's claims for breach of partnership,
breach of fiduciary duty, conversion, or Texas Theft Liability Act violations, and
(iii) there
(iii) there was
was no genuine
genuine issue
issue of material fact
of material fact as
as to damages.
damages. (C.R.
(C.R. 26-141).
26-141).
Patel responded with
Patel responded evidence establishing
with evidence establishing that
that Appellees
Appellees did
did not meet their
not meet their
burden of proof under any of these
burden these theories
theories and
and by
by establishing
establishing that fact
fact issues
issues
existed
existed that
that precluded
precluded summary
summaryjudgment.
judgment. (C.R.
(C.R. 145-238
145-238 and
and C.R.
C.R. 248-254).
248-254). On
April 29, 2015, a hearing
hearing was
was held
held on
on Appellees'
Appellees' Amended
Amended Motion for Summary
Summary
Judgment. (C.R. 291).
Judgment. (C.R. 291). The
Thesummary
summaryjudgment
judgment motion
motion was
was taken
taken under
under
advisement. (C.R.
advisement. (C.R. 291).
291). On
OnJune
June18,
18,2015,
2015,the
thetrial
trialcourt
courtgranted
granted Appellees'
Appellees'
11
11
Amended Motion
Amended Motionfor
for Summary
SummaryJudgment.
Judgment. (C.R.
(C.R. 255). Patel then
255). Patel then submitted
submitted a
Motion for
Motion for New
New Trial
Trial that
that was
was denied. (C.R. 256-282,
denied. (C.R. 256-282, C.R.
C.R. 283). This appeal
283). This appeal
followed. (C . R. 287-288).
(C.R.
SUMMARY OF THE ARGUMENT
Appellees have not established
Appellees established that they are entitled
entitled to summary
summary judgment
judgment
as a matter of law on any ground. Appellees sought
ground. Appellees sought to establish as a matter of law
that (i) Patel's
that Patel's claims
claims are barred
barred by the
the statute
statute of
of limitations,
limitations, (ii) there was no
(ii) there
genuine issue of material fact as to Patel's claims for breach of partnership, breach
of fiduciary
fiduciary duty,
duty, conversion,
conversion, or Texas Theft Liability
or Texas Liability Act violations,
violations, and
and (iii)
genuine issue
there was no genuine issue of material
material fact
fact as
as to
to damages. However, facts
damages. However, facts issues
exist regarding each
exist regarding which Appellees
each and every ground on which Appellees moved for summary
summary
judgment.
support of their
In support their affirmative
affirmative defense
defense of
of statute
statute of
of limitations,
limitations, Appellees
Appellees
claimed
claimed they
they could
could prove
prove as
as aa matter
matter of
of law
law that
that Patel’s claims for (i) breach
Patel's claims breach of
fiduciary
fiduciary duty,
duty, breach
breach of partnership,
partnership, fraud
fraud and declaratory relief
and declaratory relief accrued
accrued on
on or
before June 15, 2008 (4 years before suit was filed), and (ii) conversion and Texas
Theft Liability
Theft Liability Act
Act violations
violations accrued
accrued before
before June
June 15,
15, 2010
2010 (2 years before suit
However, Appellees
was filed). However, Appellees failed to meet their burden
burden of
of proof. Furthermore,
proof. Furthermore,
Patel presented summary judgment
judgment evidence
evidence that
that establishes
establishes that
that Patel’s
Patel's claims for
breach of fiduciary duty, breach of partnership, fraud and declaratory relief accrued
12
12
after June
after June 15, 2008
2008 and
and that
that Patel's
Patel’s claims
claims for
for conversion
conversion and
and Texas
Texas Theft
Theft
Liability Act violations accrued
accrued after
after June
June 15,
15, 2010.
2010. Accordingly, Appellees failed
limitations defense
to prove their statute of limitations defense as
as a matter
matter of law and the trial court
should have denied Appellees'
should Appellees’ Amended
Amended Motion
Motion for
for Summary
Summary Judgment
Judgment based
based
upon Appellees’ statute of limitations defense.
Appellees' statute
Appellees also claimed that their conduct was proper under the Partnership
Appellees Partnership
Agreement and
Agreement and Texas
Texas law and therefore no genuine issue of material fact existed
regarding Patel's claims for breach of fiduciary duty, breach of contract, conversion
or violations
violations of Liability Act.
of the Texas Theft Liability Appellees argument
Act. Appellees argument is
is premised
premised
solely on the claim that Patel's partnership interest was terminated or redeemed by
Harbor Hospice. However, the
Hospice. However, the summary
summary judgment
judgment evidence
evidence clearly
clearly demonstrates
demonstrates
Patel's interest
that Patel's interest was terminated or redeemed.
was not terminated redeemed. Patel's
Patel's limited
limited partnership
partnership
interest was
interest improperly transferred
was improperly transferreddirectly
directlytotoArfeen. Not only
Arfeen. Not only did
did Appellees
Appellees
improperly transfer
improperly transfer Patel's
Patel's limited
limited partnership
partnershipinterest
interesttoto Arfeen,
Arfeen, they
they did
did so
without informing
without informing Patel,
Patel, without
without complying
complying with
with the terms of the
the terms the Partnership
Partnership
Agreement, and
Agreement, and did not provide
did not provide Patel
Patel any
any compensation
compensation for
for this
this limited
limited
partnership interest.
partnership Accordingly, Appellees failed to establish
interest. Accordingly, establish as a matter of law
that no genuine issue of material fact existed regarding Patel's claims for breach of
fiduciary
fiduciary duty,
duty, breach
breach of contract, conversion
of contract, conversion or violations of
or violations Texas Theft
of the Texas Theft
Liability Act.
13
13
Additionally, Appellees
Additionally, Appelleesclaimed
claimedthat
thatno
no genuine
genuine issue
issue of material
material fact
fact
existed
existed regarding
regarding Patel's
Patel's claim
claimfor
for damages
damagesfor
for any
any cause
cause of
of action. Appellees
action. Appellees
allege that
allege that pursuant
pursuant to the
the Partnership
Partnership Agreement,
Agreement, aa partner
partner that
that leaves
leaves the
the
partnership either voluntarily
voluntarily or through expulsion
expulsion leaves with nothing more than
his capital account. However,
However, the
the provisions
provisions cited
cited by Appellees do not apply to an
improper transfer
improper transferfrom
fromPatel
Pateldirectly
directlytotoArfeen. Moreover, a fact
Arfeen. Moreover, fact issue
issue exists
exists
regarding Patel's capital account
account balance. Therefore, Appellees failed to prove that
balance. Therefore,
material fact existed
no genuine issue of material existed regarding
regarding Patel's claim for damages for
any cause of action.
Finally, Appellees
Finally, Appellees failed
failed to authenticate
authenticate any their summary
any of their summary judgment
judgment
evidence. No affidavit
evidence. No affidavit was
was attached
attached to
to Appelles'
Appelles' Amended
Amended Motion
Motion for
for Summary
Summary
Judgment
Judgment attempting
attempting to authenticate any
to authenticate the summary
any of the summary judgment
judgment evidence.
evidence.
Accordingly, Appellees'
Accordingly, Appellees' summary
summary judgment
judgment evidence
evidence was authenticated and
was not authenticated
should not have been admissible as summary judgment evidence.
For all of these reasons, the trial court’s
court's judgment should be reversed.
14
14
ARGUMENT
I. The Court Erred
The Trial Court Erred in
in Granting
Granting Appellees'
Appellees' Amended
Amended Motion
Motion for
Summary Judgment.
function of summary judgment
The function judgment procedure
procedure is
is not
not to deprive litigants
litigants of
their right to a full hearing on the merits of fact issues or their right to a jury trial.
See Tex. R. Civ. P. 166a; see also Alaniz v. Hoyt, 105 S.W.3d 330, 344 (Tex. App. – Corpus — CorpusChristi Christi2003, 2003,not notpet.). pet.). The The goal of the summary judgment procedure is the elimination of patently unmeritorious claims or unmeritorious defenses and the summary termination termination of of a case when it clearly appears appears there there are no issues of fact. Bliss v. See Bliss v. NRG NRG Industries, Industries,162 S.W.3d 434
162 S.W.3d 434
(Tex. (Tex. App. App. — – Dallas 2005, pet. Dallas 2005, denied). Appellate courts Appellate courts review review aa trial trial court’s grant of court's grant of summary summary judgment under a novo standard de novo standard of of review. review. Mann Mann Frankfort Frankfort Stein Stein & Advisors, Inc. & Lipp Advisors, Inc. v. v. Fielding,289 S.W.3d 844
, 848 (Tex. (Tex. 2009). To prevail 2009). To prevail on on aa traditional traditional motion for summary judgment, summary judgment, the the movant movant must must prove prove that that “there "there is is no genuine genuine issue issue as to any material any material fact fact and and the moving party the moving party is entitled to is entitled judgment as to judgment as aa matter matter of law[.]” Tex. law[.]" Tex. R. R. Civ. P. 166a(c). Therefore, Therefore, when when aa defendant defendant moves for summary judgment, he must either disprove disprove at least one essential element element of each theory of recovery pleaded recovery pleaded by by the plaintiff, plaintiff, or he must must plead plead and and conclusively conclusively prove each essential element of an affirmative defense. See Friendswood Dev. Co. v. McDade 15 15 Co.,926 S.W.2d 280
, 282 (Tex. & Co., (Tex. 1996); 1996); Doe v. Boys Boys Club Club of of Greater Greater Dallas, Dallas, Inc.,907 S.W.2d 472
, 476-77 (Tex. 1995). “If there "If there is is any any genuine genuine issue issue of of material material fact, fact, aa motion motion for for summary summary judgment must judgment denied.” Nautilus must be denied." Nautilus Training Training Center Center No. No. 2, Inc. v. 2, Inc. v. Seafirst Seafirst Corp.,647 S.W.2d 344
, Leasing Corp., 344, 346-47 346-47 (Tex. (Tex. App. App. — – Corpus Corpus Christi Christi 1982, 1982, no writ). InIndetermining writ). determining whether whether Appellee Appellee met met its its summary summary judgment judgment burden, burden, this Court must resolve every reasonable inference in favor of Patel, resolve all doubts in favor of Patel, and take all evidence favorable to Patel as true. Rhone-Poulenc, Inc. v.Steel, 997 S.W.2d at 223
(1999). A. ISSUE A. ISSUE ONE:Appellees ONE: AppelleesDid DidNot NotEstablish Establish aaStatute StatuteofofLimitations Limitations Defense as a Matter of Law. Appellees did not establish their statute of limitations limitations defense defense as as a matter of Intheir law. In theirAmended AmendedMotion Motionfor forSummary SummaryJudgment, Judgment,Appellees Appellees relied upon the affirmative defense affirmative defense of of statute statute of of limitations. limitations. (C.R. (C.R. 31-33). Appellees alleged that 31-33). Appellees uncontroverted evidence they had uncontroverted evidence that that Patel Patel knew knew or or should should have have known known of any alleged injuries alleged injuries before before June June 15, 15, 2008 2008 (4 years years before before suit suit was filed) for breach breach of fiduciary duty, breach of partnership, and fraud claims and before June 15, 2010 (2 years before suit was filed) filed) for for the the alleged alleged conversion conversion and Texas Texas Theft Theft Liability Liability Act violations. Act violations. (C.R. (C.R. 31-33). 31-33). Appellees Appellees failed failed to to address address Patel's Patel's claim claim for for declaratory relief declaratory relief in their Amended Amended Motion for Summary Summary Judgment Judgment based upon 16 16 statute of limitations or any other theory. Therefore, summary theory. Therefore, summary judgment disposing of the declaratory judgment action was improper. prevail on aa statute In order to prevail statute of of limitations limitations claim, claim, Appellees Appellees had had to (1) conclusively conclusively prove prove that Patel's cause of action accrued accrued before before the the commencement commencement of the statute of limitations period, and (2) negate the discovery rule by proving as there was no a matter of law that there no genuine genuine issue of material material fact about when Patel discovered, or in the exercise discovered, exercise of reasonable reasonable diligence diligence should have discovered the injury. See Messner See Messner v. Boon, Boon, 2015 2015 Tex. Tex. App. App. LEXIS LEXIS 747, 747, *30 *30 (Tex. (Tex. App. App. Texarkana Jan. Texarkana Jan. 28, 28, 2015). Furthermore, Appellees had to negate Patel's claim of 2015). Furthermore, fraudulent concealment. See Santanna Natural Gas v. v. Hamon Hamon Operations, Operations, 954 S.W.2d S.W.2d 885, 885, 890-891 890-891 (Tex. (Tex. App.--Austin App.--Austin 1997, 1997, pet. pet. denied). Appellees failed to denied). Appellees establish any of these points as a matter of law. Appellees failed Appellees failedtoto establish establishasas aa matter matter of of law law that that Patel's Patel's limited limited partnership interest partnership interest was terminated terminated or otherwise otherwise transferred transferred on on or before June 15, 2008. Significantly, 2008. Significantly, Appellees Appellees have have not not conclusively conclusively established established when when Patel's Patel’s limited partnership limited partnership interest interest was taken from was taken from him, him, whether whether by bytermination, termination, redemption, forfeiture, or improper improper transfer. Viewing all evidence in the light most transfer. Viewing favorable favorable to the non-movant, non-movant, Patel, and resolving all reasonable inferences inferences in his favor, favor, the improper improper transfer transfer does does not appear to have have occurred occurred until sometime sometime in have been 2009 and does not appear to have been legally legally effectuated effectuated through amendment amendment of 17 17 Partnership Agreement the Partnership Agreement until until 2011. Further, Appellees 2011. Further, Appellees failed to establish establish as a matter of law matter law that that Patel Patel discovered discovered or or in in the theexercise exercise of ofreasonable reasonable diligence diligence should have should have discovered discoveredthe theinjury injuryon onor or before beforeJune June15, 15,2008. In addition 2008. In addition to having failed having failed to conclusively conclusively establish establish that Patel’s interest that Patel's interest was was terminated terminated or otherwise otherwise transferred transferred before before June June 15, 2008, Appellees likewise failed to establish establish their statute of limitations defense as a matter of law because of the discovery rule and because of Appellees’ Appellees' fraudulent concealment. Summary Judgment 1. Summary Judgment Evidence Evidence Establishes Establishes Patel Patel Was Was aa Partner Partner in Harbor Hospice After June 15, 2008 The following The following chart clearly demonstrates chart clearly demonstratesthe the timeline timeline of of events events in this in this matter: DATE Description of Document March 4, 2008 Maggie Parker Maggie Parker Threatening Threatening Letter (does not Letter (does not establish establish anything anything for statute of for statute of limitations limitations purposes)(C.R. 121-125) ******* 4 year year statute statute—– June June 15, 15, 2008 ******* December 31, 2008 Harbor Hospice Harbor Hospice Balance Balance Sheet Sheet (C.R. (C.R. 217-219). 217-219). This balance sheet establishes establishes that as of 12/31/08, 12/31/08, Patel was still a limited partner in Harbor Hospice. January 1, 2009 2009 General 2009 General Ledger Ledger of Harbor Harbor Hospice Hospice (C.R. (C.R. 204-206). The 204-206). The 2009 2009General General Ledger Ledger establishes establishes limited partner on January 1, that Patel was still a limited 2009. 18 18 ******* 22year yearstatute statute— – June June15, 15,2010 2010 ******* November 10, 2011 Amendment 4 to the Partnership Amendment Partnership Agreement (C.R. 135-140). This 135-140). This document document establishes establishes that Patel Patel limited partner was still a limited partner in Harbor Harbor Hospice Hospice until November 10, 2011. As set forth above, the following documents demonstrate that Patel was still a partner after June 15, 2008: (a) Dated Amendment No. 4 dated November 10, 2011 (C.R. 135-140). This document This document establishes establishesthat that Patel Patel was was still still a limited limited partner partner in Harbor Hospice until November 10, 2011. (b) Harbor Hospice Balance Sheet as of December 31, 2008 (C.R. 217 219). This - 219). Thisbalance balancesheet sheet establishes establishes that that as as of of December December 31, 31, 2008, 2008, Patel was still a limited partner in Harbor Hospice. 2009 General (c) 2009 General Ledger Ledger of of Harbor Harbor Hospice Hospice(C.R. (C.R.204 204--206). The 206). The 2009 General Ledger establishes that Patel was still a limited partner on January 1, 2009. There are multiple documents in the summary judgment record that indicate Patel was still a Limited Partner as of June 15, 2008 and remained a Limited Partner for a period of time after that date. Therefore, Therefore, Appellees Appellees failed failed to establish as a matter of law that they are entitled to judgment on Patel's Patel’s claims claims for breach breach of fiduciary fiduciary duty, breach duty, breach of the the Partnership Partnership Agreement Agreement and and Fraud, Fraud, under under their statute of their statute limitations defense. limitations The trial defense. The trial court court should should have have denied denied summary summary judgment judgment on limitations grounds limitations grounds based on these based on these documents documents alone. alone. Nevertheless, Nevertheless, even even considering considering the the remainder remainder of of Appellees’ arguments and Appellees' arguments evidence on and evidence issue, on this issue, Appellees’ failed Appellees' failed to to establish establish their limitations defense as a matter of law. 19 19 Appellees Failed 2. Appellees Failed To To Establish Establish As As aa Matter Matter of of Law That Patel Was No Longer a Partner in Harbor Hospice On Or Before June 15, 2008 The evidence relied upon by Appellees was insufficient to justify summary Appellees relied judgment. Appellees relied upon upon the the following following exhibits to establish their statute of limitations defense (i) limitations defense (i) the the Parker Parker Letter Letter (C.R. (C.R. 121 121 - 125), (ii) the the Certified Certified Mail Receipt Receipt for for the Parker Parker Letter Letter dated dated March March 29, 2008 (C.R. 29, 2008 (C.R. 134), 134), (iii) the Dated Dated Amendment No. 4 (C.R. 135 - 140), (iv) the Undated Amendment No. 4 (C.R. 126 - 129), and (v) deposition excerpts from Patel (C.R. 89 - 100). a. The Parker a. The Parker Letter Letter does does not not terminate terminate Patel's Patel's limited limited partnership interest The Parker The Parker Letter Letter does does not not terminate terminate Patel's Patel's limited limited partnership partnership interest. interest. Therefore, the Therefore, the Parker Parker Letter Letter is of no is of no significance significance for for statute statute of oflimitations limitations The letter purposes. The letter isis dated dated March March 4, 4, 2008 2008 and and was was signed signed for by Patel's wife on March 29, March 29, 2008. (C.R. 134). 2008. (C.R. 134). The TheParker ParkerLetter Letter was was aathreat threat and and nothing nothing more. more. Further, in order to terminate Patel's limited partnership interest pursuant to Section Section 10.2 the Partnership 10.2 of the Partnership Agreement Agreement of Harbor Harbor Hospice, Hospice, the general general partners had to partners to unanimously unanimously terminate terminate Patel's Patel's limited limited partnership partnership interest interest and and expel expel him. (C.R. 62). him. (C.R. 62). The Thesummary summaryjudgment judgment record record does does not not contain contain any evidence that any evidence that the the general general partner partner ever ever terminated terminated Patel's Patel's interest interest in Harbor Hospice. 20 20 The Parker The Parker Letter Letter is not not sufficient sufficient to trigger trigger the statute statute of of limitations limitations to "Generally, aa cause begin to run. "Generally, cause of of action action accrues accrues when when facts facts exist exist that authorize a plaintiff to seek judicial relief.” relief." See Schneider Nat’l Nat'l Carriers, Inc. v. Bates Bates, 147 S.W.3d S.W.3d 264, 264, 279 279 (Tex. (Tex. 2004). The Parker 2004). The Parker Letter, Letter, without without further further action action by the general partner general partner of Harbor Hospice, of Harbor Hospice, was was not sufficient sufficient to authorize authorize a plaintiff to seek judicial relief. Therefore, Therefore, for for statute statute of of limitations limitations purposes, purposes, the Parker Letter is meaningless. Appellees' Amended In Appellees' Amended Motion for Summary Summary Judgment, Judgment, Appellees Appellees assert assert that the Parker that Parker Letter Letter was was aa "notice "notice of forfeiture". (C.R. of forfeiture". (C.R. 31). 31). However, However, this this statement is clearly incorrect and demonstrates why Appellees failed to meet their summary judgment burden to establish that Patel was on actual notice of the loss of states that his interest. The Parker Letter never states that Patel's Patel's limited limited partnership partnership been forfeited. interest had been forfeited. Because Becausethe theParker Parker Letter Letter was was nothing nothing but a threat, threat, an additional act had to occur to put Patel on notice of his alleged loss before June 15, 2008. Clearly, Clearly, this this additional additional act did not occur. Additionally, Appellees Additionally, Appelleesargue argue in their Amended in their Amended Motion Motion for for Summary Summary Judgment Judgment that that Patel Patel ignored ignoredthe theletter. letter. (C.R. 29). However, However, Appellees Appellees failed to establish as a matter of law law that that Patel Patel did did not not comply comply with with the the letter. letter. Patel testified deposition that in his deposition that he did not recall recall whether his wife brought brought the letter letter to his attention, that attention, that his wife handled the financials, and that whatever was required he 21 21 certain his was certain his wife, wife, or or his accountant, would his accountant, wouldhave havetaken takencare careofofit. (C.R. 97). it. (C.R. Chapman Chapman was was only only able to speculate able to speculate that Patel had that Patel had not not complied complied with with this this obligation, obligation,but but admitted admittedthat thathe hecould couldnot notsay sayfor forsure. (C.R. 117). sure. (C.R. Appellees 117). Appellees argument that argument that the the Parker Parker letter letter put put Patel Patel on notice that on notice that his interest interest may may be be terminated, oror aa duty terminated, duty to to investigate, investigate, is based based on on the theinconclusive inconclusive and and undocumented assumption undocumented assumption that that he he did did not not comply comply with withits itsrequest. request. Finally, even if was sufficient the Parker letter was sufficient to to give give rise rise to toaaduty dutytotoinvestigate investigatefurther further— – and it was not — was – had had Patel Patel obtained obtained aa copy the partnership copy of the partnership agreement agreement and and all all its amendments at that time, it would not have evidenced a termination of his interest. Thus, the Parker Letter is of no consequence. Amendment 44 to the b. Amendment the partnership partnership agreement agreement was executed on November 10, 2011 According to the Dated Amendment No. 4, the Appellees had not taken any action to take Patel's limited limited partnership partnership interest interest until until November November10, 10,2011. 2011. (C.R. 135-140). This 135-140). This is is less less than than one one year year before before Patel Patel filed filed his his lawsuit. The Dated lawsuit. The Dated Amendment No. 4 was enough to create a fact issue by itself regarding regarding Appellees' statute of limitations claim. c. Undated Amendment 4 No. 4. Undated Amendment The Undated Amendment No. No. 44 that that is effective effective January January 1, 2008 does not establish establishaa date date that that Patel's Patel'scause causeofofaction actionaccrued. accrued. (C.R. (C.R.126 126-- 129). The 129). The Undated Amendment Undated AmendmentNo. No.44 gives gives no indication of no indication when it of when it was was prepared. prepared. 22 22 Furthermore, the Furthermore, the Undated Undated Amendment AmendmentNo. No.44 is inconsistent with is inconsistent Dated with the Dated Amendment No. Amendment No. 4. Finally, Finally, there there isis no no summary summary judgment judgment evidence evidence that Undated Amendment No. Amendment No.44 was was ever provided to ever provided to Patel. Clearly Appellees Patel. Clearly Appellees failed failed to establish establish as as a matter of law that Patel's cause of action accrued accrued prior to June 15, 2008. d. Appellees Appellees failed failed to to establish establish as as aa Matter Matter of Law Law that that Patel Patel knew or should knew should have have known known of any injury on or before before June June 15, 2008 15,2008 Harbor Hospice If Harbor Hospice Managers, Managers, LLC LLC terminated, terminated, forfeited, forfeited, redeemed redeemed or otherwise otherwise transferred transferredPatel's Patel'sinterest interestinin Harbor Harbor Hospice, Hospice, itit would would have have been been required to required notify Patel to notify Patel pursuant pursuant to Section Section 12.2(b) 12.2(b) of of the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement. 66-67). Harbor Agreement. (C.R. 66-67). Harbor Hospice Hospice Managers, Managers, LLC failed to Furthermore, Section do so. Furthermore, Section 3.4 3.4ofofthe theHarbor HarborHospice HospicePartnership Partnership Agreement Agreement required Harbor Hospice to secure Patel's initials on Exhibit "A" to the Partnership Agreement if Agreement if his his partnership partnership interest interestwas waschanged changedorordeleted. deleted. (C.R. (C.R. 45). Finally, 45). Finally, Section 13.4 of the Harbor Hospice Partnership Agreement clearly provides that no modification, waiver modification, waiver of of termination termination of Agreement shall of the Agreement shall be effective effective unless unless made in a writing signed by parties parties sought sought to to be be bound bound thereby. thereby. (C.R. 68). Appellees failed Appellees failed to to take take any any of these actions. of these actions. These These safeguards safeguards were were in limited partner would be placed on notice if his interest place to make sure that a limited was changed or deleted. Patel Patel could could reasonably reasonably rely upon the Appellees to comply 23 23 with the partnership agreement and provide him with the notice required under the partnership agreement partnership agreementififhis his interest interest was was taken taken from from him any manner. him in any manner. Furthermore, Patel Furthermore, Patel could could reasonably reasonably rely rely upon upon the Appellees to comply the Appellees comply with the Partnership Partnership Agreement Agreement and and secure secure Patel's Patel's signature signature before before any effort was made to modify the Partnership Agreement. e. Patel Patel never never testified testified that that his his limited limited partnership partnership interest interest was was terminated, redeemed or transferred to Defendant Arfeen Appellees' claim Appellees' claim that that Patel Patel was on notice notice of of his his impending impending expulsion expulsion and that Patel that Patel simply simply choose choose to ignore the to ignore the notification notification and and warning. (C.R. 32). warning. (C.R. 32). However, these However, assertions are not supported by the these assertions the summary summary judgment judgment evidence evidence and are certainly not supported supported by by the the testimony testimony of of Patel. Patel. (C.R. 89 - 100). Appellees Failed 3. Appellees Failed to to Establish Establish as aa Matter Matter of of Law Law that that Patel's Patel's Cause Cause of Action for Conversion Conversion and Under the Texas Texas Theft Theft Liability Liability Act Accrued on or Before June 15, 2010 Appellees' claim Appellees' claim that that Patel's Patel's causes causes of action for of action for conversion conversion and and for for violations of the Texas Theft Liability Act accrued violations accrued before before June June 15, 2010 and that Patel knew or should have known that his cause of action for conversion and under Liability Act accrued the Theft Liability accrued before before June June 15, 15, 2010. However, Appellees 2010. However, Appellees failed that Patel's to establish as a matter of law that Patel's cause of action action for conversion conversion or under the Theft Liability Act accrued accrued on on or or before before June June 15, 15, 2010. 2010. As set forth above, the Dated Amendment 4 to the partnership agreement dated November 10, 2011 (C.R. 24 24 135-140) is summary 135-140) summary judgment judgment evidence evidence that that Patel Patel was was still still a limited partner in Harbor Hospice until November 10, 2011. Appellees alleged that simple due diligence would have revealed the alleged harm after harm after Patel's Patel's receipt receiptof of the the Parker ParkerLetter. Letter. (C.R. (C.R. 32). However, if Patel 32). However, Patel had reviewed that Partnership reviewed Partnership Agreement Agreement and amendments thereto between 2008 and all amendments November 20, and November 20, 2011, 2011, itit appears appears he he would would have have been been listed listedas as aa partner. partner. (C.R. 135-140, 171-185). 42 -88, 135-140, Appellees have failed to establish 171-185). Appellees establish as a matter of law that Patel could have discovered he was not a partner by reviewing the Partnership Agreement and amendments thereto. Furthermore, ifif Harbor Furthermore, Harbor Hospice Hospice Managers, Managers, LLC LLC terminated, terminated, forfeited, forfeited, redeemed, or redeemed, otherwise transferred or otherwise transferred Patel's Patel's interest interest in Harbor Hospice, in Harbor Hospice, it would would have been have been required required to notify Patel to notify Patel pursuant pursuant to Section Section 12.2(b) 12.2(b) of the the Harbor Harbor Hospice Partnership Hospice Partnership Agreement. 66-67). Harbor Agreement. (C.R. 66-67). Harbor Hospice Hospice Managers, Managers, LLC LLC failed to do so. Section Section 3.4 3.4 of of the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement required Harbor Hospice Harbor Hospice to secure Patel's to secure Patel's initials initials on Exhibit "A" on Exhibit "A" to to the thePartnership Partnership Agreement if Agreement if his his partnership partnership interest interestwas waschanged changedorordeleted. deleted. (C.R. (C.R. 45). 45). This did not occur. occur. Section Section13.4 13.4ofofthe theHarbor HarborHospice HospicePartnership Partnership Agreement Agreement clearly clearly provides that provides modification, waiver that no modification, waiver of termination termination of Agreement shall of the Agreement shall be effective effective unless unless made made in in a writing signed by parties sought to be bound bound thereby. thereby. (C.R. 68). This This also also did not occur. 25 25 Appelleees failed Appelleees failed to to take take any any of of these these actions. These safeguards actions. These safeguards were in limited partner would be placed on notice if his interest place to make sure that a limited was changed or deleted. Patel Patel could could reasonably reasonably rely upon the Appellees to comply with the partnership agreement and provide him with the notice required under the Partnership Partnership Agreement Agreement and and secure secure his signature signature if his interest was taken from him in any manner. Appellees Failed 4. Appellees Failed to to Conclusively Conclusively Establish Establish Under the Discovery Rule that Patel that Patel Knew Knew or or Reasonably Reasonably Should Should Have Have Known Known That That His His Interest Was Terminated by June 15, 2008. The discovery The discovery rule rule defers defers the the time time aa cause cause of of action action accrues, accrues, and and the the limitation period limitation period begins, begins, for for certain certain types types of tort cases. This deferral of accrual is exception to an exception general rule to the general rule under under which which a cause of action action accrues accrues when when a wrongful act causes some wrongful some legal legal injury, injury, even even if the fact of injury is not discovered discovered all resulting until later, and even if all resulting damages damages have not not yet yet occurred. occurred. See S. S.V. V. v. R.V., R. V.,933 S.W.2d 1
, 4 (Tex. 1996). Under Under the the discovery discovery rule, rule, the limitation period starts running from the date the injury is actually discovered discovered or the date when the injury should injury should have have been been discovered discovered if the the plaintiff plaintiff had hadexercised exercised reasonable reasonable diligence, whichever diligence, whichever is earlier. See Moreno v. Sterling Sterling Drug, Drug, Inc., Inc.,787 S.W.2d 348
, 351 (Tex. 348, (Tex. 1990); 1990); Willis Maverick, 760 Willis v. Maverick, S.W.2d 642,760 S.W.2d 642
, 646 (Tex. (Tex. 1988); 1988); Gaddis v. Smith, 417 S.W.2d S.W.2d 577, 577, 578 578 (Tex. (Tex. 1977). The discovery 1977). The discovery rule rule applies to cases which the cases in which the nature nature of of the theinjury injuryisisinherently inherently undiscoverable undiscoverable and and the the 26 26 evidence evidence of of injury injury is objectively objectively verifiable. Both of verifiable. Both of these these circumstances circumstances exist in Injuries arising this case. Injuries arising from from aa breach breach of of fiduciary fiduciary duty are considered inherently S.V., undiscoverable. S. V., 933 933 S.W.2d S.W.2d at 8. Appellees failed Appellees failed to to establish establish as as a matter matter of law that there there was was no no genuine genuine issue of material issue material fact fact that that Patel Patel discovered, discovered, or in in the the exercise exercise of of reasonable reasonable diligence should diligence should have have discovered discovered the the injury injury before before June June 15, 15, 2008. Appellees also 2008. Appellees failed failed to establish establish as as a matter of law that that there there was was no no genuine genuine issue issue of of material material fact that Patel discovered, discovered, or in the the exercise exercise of of reasonable reasonable diligence diligence should have discovered the injury before before June June 15, 15, 2010. Significantly, Appellees have failed to 2010. Significantly, conclusively conclusively establish establish the the date should defeat date the injury accrued, which should defeat summary summary judgment on limitations in and of itself. document that Appellees The only document Appellees are relying relying upon upon to establish establish that Patel Patel discovered or should discovered should have or in the the exercise exercise of of reasonable reasonable diligence diligence should have discovered the discovered the injury injury before beforeJune June15, 15, 2008 2008 isis the the Parker Parker Letter. As explained Letter. As explained above, the above, the Parker Parker Letter Letter was was a threat threat and nothing nothing more more and and did did not put Patel on notice that his interest was terminated. Moreover, generally, generally, a party who is owed a fiduciary duty is relieved of the responsibility ofof diligent responsibility diligentinquiry inquiryinto intothe the fiduciary’s fiduciary's conduct conductas as long long as the as the relationship exists.Id. Patel reasonably
entitled Patel was reasonably entitled to Sections 3.4, to rely upon Sections 12.2(b), and 12.2(b), the Partnership and 13.4 of the Partnership Agreement Agreement and should have and (i) he should have received received 27 27 notice promptly notice promptly after Appellees allegedly after Appellees allegedly terminated terminatedhis his interest, interest, and and (ii) his (ii) his written signature written signature was required before was required before the the Partnership Partnership Agreement Agreement could could be be modified to transfer modified transfer his his interest. Since Appellees interest. Since Appellees failed failed to to comply comply with with Sections Sections 12.2(b), and 13.4 3.4, 12.2(b), 13.4 of of the the Partnership Partnership Agreement, Agreement, the injury injury was was inherently inherently undiscoverable (the transfer may also be void). Finally, there Finally, there is clearly a fact is clearly fact issue issue based based upon upon the thesummary summary judgment judgment record that record that well well after after June 15, 2008, June 15, 2008, Patel Patel was was still still the the owner owner of of his his limited limited partnership interest. See 2009 General Ledger Ledger (C.R. 204 - 206), 206), Harbor Harbor Hospice Hospice Balance Sheet as of December 31, 2008 (C.R. 217 - 219), 219), and and Dated Dated Amendment Amendment No. No. 4 dated dated November 10, 2011(C.R. November 10, 2011(C.R.135 135 -- 140). 140). Appellees Appellees have have failed failed to establish establish as as a matter of law law that that Patel's Patel's cause cause of of action action accrued accrued before June 15, 2008 or that 2008 that Patel Patel discovered, discovered, or in in the the exercise exercise of of reasonable reasonable diligence diligence should should have discovered the injury before June 15, 2008. Apparently, the only additional document Appellees relied upon to establish that Patel that Patel discovered discovered or should have or should have in in the the exercise exercise ofofreasonable reasonable diligence diligence discovered the injury before before June June 15, 15, 2010 2010 is is Patel's Patel's 2008 2008 K-1. K-1. Appellees assert in the Amended Amended Motion Motion for Summary Summary Judgment Judgment that that since Patel received since Patel received his K-1 K-1 sometime in sometime in 2009, 2009, his his claims claims for for conversion conversion and and theft theft are are time time barred. barred. (C.R. 33). However, Appellees However, Appellees have have failed failed to to establish establish as as aa matter matter of law that Patel Patel should should 28 28 have known have known that that his interest interest in Harbor Harbor Hospice Hospice was was being being taken taken from from him him as as a result of a K-1. Patel testified that: Arfeen took (i) he was shocked that Dr. Arfeen took his his ownership ownership interest away (C.R. 222); and (ii) he discovered he was no longer a partner in Harbor Hospice right before he retained his attorney (C.R. 96). Furthermore, as Furthermore, explained above, as explained Harbor Hospice above, if Harbor Hospice Managers, Managers, LLC LLC terminated, forfeited or redeemed Patel's interest in Harbor Hospice, it would have required to notify Patel pursuant been required pursuant to Section Section 12.2(b) of the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement. Harbor Hospice Agreement. (C.R. 66 - 67). Harbor Hospice Managers, Managers, LLC failed to Furthermore, Section do so. Furthermore, Section 3.4 3.4ofofthe theHarbor HarborHospice HospicePartnership Partnership Agreement Agreement required Harbor Hospice to secure Patel's initials on Exhibit "A" to the Partnership Agreement ifif his Agreement his partnership partnership interest interestwas waschanged changedorordeleted. deleted. (C.R. (C.R. 45). Section 45). Section 13.4 of 13.4 of the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement Agreement clearly clearly provides provides that that no modification, waiver modification, waiver of of termination termination of Agreement shall of the Agreement shall be effective effective unless unless made in a writing signed by parties parties sought sought to to be be bound bound thereby. thereby. (C.R. 68). Defendants failed Defendants failed to to take take any any of of these these actions. These safeguards actions. These safeguards were in limited partner would be placed on notice if his interest place to make sure that a limited was changed or deleted. Patel Patel could could reasonably reasonably rely upon the Appellees to comply with the Partnership Agreement and provide him with the notice required under the 29 29 Partnership PartnershipAgreement Agreementififhis his interest interestwas was taken taken from from him any manner. him in any manner. Attempting to slide information past Patel in a K-1 is certainly not sufficient under the Partnership the Partnership Agreement Agreementororinin light light of fiduciary nature of the fiduciary nature of the parties' of the parties’ relationship. It would have been reasonable for Patel to believe that unless he received the notice required notice required under under the the Partnership Partnership Agreement Agreement and and signed signed documents documents terminating or terminating otherwise transferring or otherwise transferring his his partnership partnership interest, interest,that that he he was was still still a limited partner limited partner and and that that no no cause cause of of action action had had yet yet accrued. accrued. After all, there is no summary judgment summary judgment evidence evidence suggesting suggestingthat that Patel Patel ever signed aa document ever signed document transferring his interest in Harbor Hospice. Finally, according Finally, according to Amendment 4 to to Dated Amendment to the the Partnership Partnership Agreement, Agreement, executed executed November November 10, 10, 2011, 2011, the the Appellees Appellees had had not not taken taken any any action action to to take or transfer Patel's transfer Patel's limited limited partnership partnership interest interestuntil untilNovember November10, 10,2011. 2011. This is less than one year before Patel filed his lawsuit. When one considers When considers the requirements requirements of the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement, the Agreement, the fiduciary fiduciary nature nature of of the parties’ relationship, and Amendment parties' relationship, Amendment 4 to the Partnership Partnership Agreement Agreement dated dated November November 10, 10, 2011, 2011, aa fact issue clearly clearly exists regarding whether regarding whetheror or not not Patel Patel discovered discoveredor or should should have have in the exercise in the exercise of reasonable diligence reasonable diligencediscovered discoveredthe theinjury injurybefore beforeJune June15, 15,2010. Patel never 2010. Patel never received the notification he was required to receive from the general partner, Patel 30 30 Partnership Agreement, never received an amended Partnership Agreement, and and Patel Patel was never asked to sign a document stating that his partnership interest was taken away. 5. Appellees Appellees Failed Failed to to Conclusively Conclusively Negate Negate Patel's Patel’s Affirmative Affirmative Defense of Fraudulent Concealment. The fraudulent The fraudulent concealment concealment doctrine doctrine applies applies when defendant makes when a defendant makes fraudulent fraudulent misrepresentations misrepresentationsor, or, ifif under under aa duty to disclose, conceals facts from the plaintiff and thereby prevents the plaintiff from discovering the cause of action against the defendant. against defendant. See Santanna Santanna Natural Natural Gas v. v. Hamon Hamon Operations, Operations, 954 S.W.2d S.W.2d 885, 885, 890-891 890-891 (Tex. (Tex. App.--Austin App.--Austin1997, 1997,pet. pet.denied). denied). As with the As with the discovery rule, discovery rule, this this doctrine doctrine tolls tolls the the statute statute of limitation until of limitation until the fraud is the fraud discovered or could have been discovered with reasonable diligence. See Shell Oil Co. Ross, 356 Co. v. Ross, 356 S.W.3d S.W.3d 924, 924, 927 (Tex. 2011). 927 (Tex. 2011). The Theelements elements of of fraudulent fraudulent concealment include the following: (1) the existence of the underlying tort; (2) the defendant's knowledge defendant's knowledge of of the the tort; (3) the defendant's use of deception to conceal the tort; the tort; and and (4) (4) the the plaintiffs plaintiff'sreasonable reasonable reliance reliance on on the the deception. deception. See See BP America Prod. Co. v. Marshall, Marshall 342 S.W.3d S.W.3d 59, 59, 67-69 67-69 (Tex. (Tex. 2011). 2011). A breach of a fiduciary fiduciary duty duty of disclosure is tantamount of disclosure tantamount to concealment concealment for purposes of for purposes of the doctrine. See Dernick Dernick Resources, Resources, Inc. v. v. Wilstein, Wilstein, 312 312 S.W.3d S.W.3d 864, 878 (Tex. (Tex. App.--Houston [1st App.--Houston [1st Dist.] Dist.] 2009, 2009, no no pet.). Stateddifferently, pet.). Stated differently, silence silence constitutes constitutes fraudulent fraudulent concealment concealmentwhen whenaa defendant defendanthas has aa duty duty to disclose disclose and its silence silence 31 31 prevents the plaintiff from discovering the injury. See Haas v. George,71 S.W.3d 904
, 913 (Tex. App.—Texarkana 2002, no pet.). summary judgment evidence demonstrating that Appellees failed to present summary they ever informed Patel that his partnership interest was taken from him, or even conclusively conclusivelydemonstrating demonstratingwhen whenit itwas wastaken takenaway awayfrom from him. Appellees him. Appellees concealed concealed the the fact fact that that Patel’s interest was Patel's interest was transferred transferred directly directlyto to Arfeen. (C.R. Arfeen. (C.R. Appelleeswere 126 - 129, 1353 - 140). Appellees were required required pursuant pursuant to to the the Harbor Harbor Hospice Hospice Partnership Partnership Agreement Agreementtoto disclose disclosethis thisto to Patel Patel and and did did not not do so. See Section 12.2(b) the 12.2(b) Partnership Agreement the Partnership Agreement(C.R. (C.R.66 66-- 67). Appellees were 67). Appellees were required required to secure Patel's secure Patel's signature signature on document transferring on any document transferring his his interest interest to Arfeen but failed to do so (C.R. 45 and 68). This This conduct conduct violated violated the the Partnership Partnership Agreement and was a breach of fiduciary duty. Instead, Appellees duty. Instead, Appellees created two Amendment 4's in an effort to conceal conceal the the improper improper transfer transfer to to Arfeen. Arfeen. (C.R. 135 - 140 and 126 - Thedocumentary 129). The documentary evidence evidence in in the the record, record, coupled coupled with with Appellees Appellees failure to comply with the notice provisions of the Partnership Partnership Agreement, constitutes some evidence of fraudulent fraudulent concealment. concealment. Appellees did not conclusively negate negate Patel’s Patel's affirmative defense of fraudulent concealment as a matter of law. B. ISSUE B. ISSUE TWO: TWO: TheThe Trial Trial Court Court Erred Erred in in Concluding Concluding that that No No Genuine Issue Genuine Issue of Material Material Fact Fact Exists Exists on Any of Patel's Patel’s Asserted Asserted Claims. 32 32 Thetrial 1. The trialcourt court erred erred in in granting granting summary summary judgment regarding Patel's breach Patel's breach of fiduciary fiduciary duty claims claims because because the summary summary judgment evidence raises questions of material fact. Appellees allege that their actions in wrongfully taking possession of Patel's limited partnership limited partnership interest interest were appropriate under were appropriate that Harbor under that Harbor Hospice Hospice Partnership Partnership Agreement. Appellees also allege Agreement. Appellees allege that since their conduct conduct was proper under the Partnership Agreement and under Texas law, there cannot cannot be a breach of fiduciary fiduciary duty duty claim. However, in claim. However, in order order totosupport supportthis thisargument, argument, Appellees Appellees assume that assume partnership interest that Patel's partnership interest was terminated or redeemed was terminated redeemed by Harbor Harbor (C.R. 33 Hospice. (C.R. 33 -36). -36). As Asexplained explainedabove, above,aafact fact issue issue exists exists regarding regarding whether Patel's partnership interest Patel's partnership interest was redeemed, terminated, was redeemed, terminated, or transferred directly or transferred directly to Arfeen. (C.R. (C.R. 204 204 -- 206, 206, 207, 208). Appellees assert that the elements of a breach of fiduciary duty claim are (i) plaintiff and defendant plaintiff defendant had a fiduciary fiduciary relationship, relationship, (ii) defendant defendant breached breached this duty, (iii) this breach duty, breach resulted resulted in harm to plaintiff plaintiff or or benefit benefit to to defendant. defendant. See Graham Graham Morg. Morg. Corp. Corp. v. v. Hall, Hag307 S.W.3d 472
, 479 (Tex. App. - Dallas 2010, no pet). (C.R. pet). (C.R. 33). 33). Appellees Appelleesallege allege that that there there is is no no requirement requirement in law or in the in law the Partnership Partnership Agreement Agreement that that prevents prevents them them from from rejecting rejecting Patel Patel as their their partner. partner. (C.R. 35). (C.R. 35). Relying Relying upon Section 10.2 upon Section 10.2 of of the thePartnership Partnership Agreement Agreement (Expulsion/Termination Provision), (Expulsion/Termination Provision), Appellees Appellees assert assert that that exercising exercising aa right under the Partnership the Partnership Agreement Agreementis isnot notaa breach breach of of fiduciary fiduciaryduty. (C.R. 30). duty. (C.R. 30). 33 33 Apparently, Appellees Apparently, Appelleesasserted assertedthat thatthere therewas was no no breach breach of of fiduciary fiduciary duty duty as as a matter of law. matter law. However, However,the thesummary summaryjudgment judgmentevidence evidence clearly clearly demonstrates demonstrates that Patel's partnership interest was not terminated in accordance accordance with with the terms of the Partnership Agreement, rather rather itit was was transferred transferred directly directly to to Arfeen. Arfeen. (C.R. 204 - 206, 207, 208). InInlight lightofofthis thissummary summaryjudgment judgmentevidence, evidence, Appellees' Appellees' reliance reliance the Partnership upon Section 10.2 of the Partnership Agreement Agreement is misplaced misplaced and cannot support summary judgment. Appellees assertion Appellees assertion that that they they did did not violate violate the terms terms of of the the Partnership Partnership Agreement isis also Agreement incorrect. AAcursory also incorrect. cursory review review of ofthe thePartnership Partnership Agreement Agreement shows that Appellees violated the following provisions: (a) Section Section 3.4 requires requires all general general partners partners and limited limited partners partners whose whose interest has interest has changed changedtotoinitial initialExhibit Exhibit"A". "A". (C.R. (C.R. 45). This did not 45). This occur. Section 3.4 is in place to protect a limited partner such as Patel to prevent his interest from being taken without his knowledge. (b) Section Section 7.2(iii) 7.2(iii) prevents prevents the general partner the general partner from from amending amending thethe Harbor Hospice Harbor Hospice Partnership Partnership Agreement Agreement without without the the approval approval of of the limited partners limited partners owning owning moremore than 50% of the than 50% the aggregate aggregate limited limited partnership interest. partnership (C.R. 51). Appellees interest. (C.R. Appellees wrongful wrongful transfer transfer of Patel's Limited LimitedPartnership Partnership Interest to Arfeen Interest to Arfeenviolates violatesthis provision. this provision. Furthermore, the wrongful transfer was committed without informing Patel. (c) Section Section 7.2(iv) prevents the 7.2(iv) prevents general partner the general partner from from permitting permitting any any assignment or assignment transfer of any or transfer any portion portion of of the the partnership partnership agreement agreement without the approval of the limited partners owning more than 50% of the aggregate the aggregate limited limited partnership partnershipinterest. interest. (C.R. (C.R. 51). Appellees 51). Appellees Limited Partnership Interest violates this wrongful transfer of Patel's Limited Furthermore, the provision. Furthermore, the wrongful wrongful transfer transfer was was committed committed without informing Patel. 34 34 (d) Section 8.1 prevents any limited partner from assigning any portion of his limited partnership interest without the prior written consent of all of the thegeneral generalpartners. partners. (C.R. (C.R. 53 53 - 54). 54). Furthermore, Furthermore, section section 8.1 8.1 provides that provides thatany attempted assignment any attempted assignment which which is permitted by is not permitted Section Section 8.1 shall be automatically void and ineffective, except except to the extent extent otherwise otherwise required requiredbyby law. Appellees wrongful law. Appellees wrongful transfer transfer of Patel's Limited Partnership Partnership Interest Interest to Arfeen violates this provision. provision. Furthermore, the wrongful transfer was committed without informing Patel. (g) Defendants Defendantsfailed failedtoto satisfy satisfySection Section8.5 8.5 and and 10.2 10.2 as has been as has been explained above. (h) Section 12.2(a)(iv) 12.2(a)(iv) provides provides that the general partners shall not reduce the rights the rights or or interests, interests, or or enlarge enlarge the the obligations, obligations, or the the limited limited partners without the prior written consent of all of the limited partners. Appellees wrongful (C.R. 66). Appellees wrongful transfer transfer of of Patel's Patel's Limited Limited Partnership Partnership Interest violates Interest violates this provision. Furthermore, this provision. Furthermore, the the wrongful wrongful transfer transfer was committed without informing Patel. (i) (i) Section 12.2(b) provides that the general partner shall promptly notify limited partners the limited partners of of any any such such amendments. amendments. (C.R. (C.R. 66). Appellees 66). Appellees wrongful transfer wrongful transfer of Patel's Patel's Limited Limited Partnership Partnership Interest Interest to Arfeen Arfeen violates this violates provision. Furthermore, this provision. Furthermore, the the wrongful wrongful transfer transfer was was committed without informing Patel. (j) Section Section 13.4 the Harbor 13.4 of the Harbor Hospice Hospice Partnership Partnership Agreement Agreement clearly clearly provides that no modification, waiver of termination of the Agreement beeffective shall be effectiveunless unlessmade madeininaa writing writing signed signed by by parties sought to be bound bound thereby. thereby. (C.R. 68). Clearly,this 68). Clearly, this did did not not occur. Appellees have Appellees have failed failed to establish establish that their conduct conduct was proper under the Harbor Hospice Partnership Agreement. Appellees concede Appellees concedethat that aa partner’s partner's fiduciary fiduciary duty duty includes: includes:(i) (i) aa duty duty of loyalty to the concern, loyalty concern, (ii) a duty duty of of good good faith, faith, fairness fairness and and honesty honesty in in dealing dealing with each other on matters pertaining to the partnership, (iii) duty of full disclosure 35 35 on all matters, on all matters, (iv) (iv) accounting accounting for for partnership partnership profits profits and and property, property, and (v) and (v) refraining from refraining from competing competing or or dealing dealing with with the partnership partnership in a manner adverse to partnership. (C.R. the partnership. (C.R. 34 34 at at paragraph paragraph 28). Appellees Appellees violated violated their their fiduciary fiduciary duty to Patel by improperly transferring Patel's limited partnership interest to Arfeen, by failing failing to inform Patel Patel of the same, and by failing failing to to pay pay Patel Patel any any consideration consideration for the limited limited partnership partnership interest. interest. (C.R. 96, 222, 222, 223 223 and and 235). Appellees have 235). Appellees failed to establish establish as a matter of law that that Appellees Appellees did not breach breach their fiduciary fiduciary duty to Patel. Appellees did Appellees even suggest did not even suggest in in their theirAmended Amended Summary Summary Judgment Judgment Motion that Motion they were that they were entitled entitled to to summary summary judgment judgment if Patel's Patel's interest interest was was transferred directly transferred directlyto to Arfeen. On the Arfeen. On the record record before before court, court, Appellees Appellees failed failed to establish establish as as a matter of law that that Appellees Appellees did not breach breach their fiduciary duty to Patel. Thetrial 2. The trialcourt court erred erred in in granting granting summary summary judgment regarding Patel's breach Patel's breach of breach of of breach of contract contract claim claim because because the the summary judgment evidence raises questions of material fact. Appellees sought Appellees sought summary summary judgment judgment regarding regarding Patel's Patel's claim claim for for breach breach of contract by asserting that Patel could not establish a genuine issue of material fact regarding the regarding the element element of of breach. Appellees again breach. (C.R. 36). Appellees again asserted asserted that (i) they were entitled to terminate or expel Patel from Harbor Hospice pursuant to Section Partnership Agreement 10.2 of the Partnership Agreement(C.R. (C.R.36), 36),and and(ii) no provision (ii) no provision of the Texas Texas 36 36 Business Organizations Business Organizations Code Code prohibits prohibits partners partners from agreeing to from agreeing to expulsion expulsion provisions in a partnership provisions partnership agreement agreement (C.R. (C.R. 37). However, as explained 37). However, explained above, a fact issue exists fact issue exists regarding regarding whether whether Patel's Patel's partnership partnership interest interest was was redeemed, redeemed, terminated, or transferred directly directly to to Arfeen. Arfeen. (C.R. 204 - 206, 207, 208). Clearly, Clearly, if Patel's partnership interest was transferred transferred directly directly to Arfeen, as evidenced evidenced by the documents in the summary summary judgment record, Appellees violated Sections Sections 3.4, 3.4, 7.2(iii), 7.2(iii), 7.2(iv), 7.2(iv), 8.1, 8.1, 8.5, 12.2(a)(iv), 12.2(b), 8.5, 10.2, 12.2(a)(iv), 12.2(b), and and 13.4 13.4 of the Partnership PartnershipAgreement. Agreement. (C.R. (C.R. 45, 45, 51, 51, 53-54, 53-54,66, 66,and and68). 68). It is also clear that that if Patel's partnership partnership interest interest was was transferred transferred directly directly to to Arfeen, Arfeen, Section Section 10.2 10.2 of the Partnership Partnership Agreement Agreement does does not not apply. Substantial summary apply. Substantial summary judgment judgment evidence evidence exists demonstrating demonstrating that that Patel's Patel's interest interest was was transferred transferreddirectly directlyto toArfeen. Arfeen. (C.R. 204 -- 206, 204 206, 207, 207, 208). 208). Substantial Substantialsummary summaryjudgment judgment evidence evidence also also exists exists indicating that indicating that Appellees Appellees failed failed to to inform inform Patel Patel of of the transfer and the transfer and failed failed to pay Patel any consideration for the limited partnership interest. (C.R. 96, 222, 223 and Therefore, aa fact 235). Therefore, fact issue issue exists exists regarding regarding Patel's Patel's claim for breach of contract. 3. The Thetrial trialcourt court erred erred in in granting granting summary summary judgment regarding Patel's conversion Patel's conversion claim claim because because the the summary summary judgment judgment evidence raises questions of material fact. Appellees sought summary judgment regarding Patel's claim for conversion asserting that by asserting Patel could that Patel could not establish establish aa genuine genuine issue issue of material fact of material fact as to expulsion was justified under Section 10.2 of the whether expulsion the Partnership Partnership Agreement Agreement 37 37 and therefore termination of Patel's interest cannot constitute conversion (C.R. 38). In support of this Argument, Appellees claimed that Patel violated the Partnership Agreement and Agreement and triggered triggered Section Section 10.2 10.2 of of the the Partnership Partnership Agreement. Agreement. (C.R. 38). Appellees also Appellees also allege allege that that they they had every right had every right to take take control control of of Patel's Patel's shares. shares. (C.R. 38). (C.R. 38). However, However, as asexplained explained above, above, aa fact fact issue issue exists exists regarding regarding whether whether Patel's partnership interest Patel's partnership interest was redeemed, terminated, was redeemed, terminated, or transferred directly or transferred directly to (C.R. 204 Arfeen. (C.R. 204 -- 206, 206, 207, 208). partnership interest was transferred If Patel's partnership transferred directly to Arfeen, Arfeen, Appellees Appellees violated Sections 3.4, 7.2(iii), 7.2(iv), 8.1, 8.5, 10.2, 12.2(a)(iv), 12.2(b), and 13.4 of the Partnership Partnership Agreement. Agreement. (C.R. 45, 51, 53-54, 53-54, 66, 66, and and 68). Further, if Patel's 68). Further, partnership interest partnership interestwas was transferred transferreddirectly directlytoto Arfeen, Arfeen, Section Section 10.2 10.2 of the of the Partnership Agreement does not apply. Substantial Substantial summary summary judgment judgment evidence exists demonstrating evidence exists demonstrating that Patel's Patel's interest was transferred transferred directly directlyto to Arfeen. Arfeen. (C.R. 204 - 206, 206, 207, 207, 208). 208). Substantial summary judgment evidence evidence also exists indicating that Appellees failed to inform Patel Patel of the the transfer transfer and and failed failed to to pay pay Patel Patel any any consideration consideration for the the limited limited partnership interest. partnership interest. (C.R. 96, 222, 223 223 and 235). Therefore, and 235). Therefore, aa fact fact issue issue exists exists regarding Patel's claim for conversion. The trial 4. The trial court court erred erred iningranting grantingsummary summary judgment judgment regarding regarding Patel's claim Patel's claim for Texas Texas Theft Theft Liability Liability Act Act violations violations because because the summary judgment evidence raises questions of material fact. 38 38 Appellees sought summary Appellees summary judgment judgment regarding regarding Patel's violations Patel's claim for violations of the the Texas Texas Theft Theft Liability Liability Act Act by asserting asserting that that Patel Patel could could not not establish establish a genuine issue of material fact as to whether whether expulsion expulsion was justified under Section 10.2 of the 10.2 the Partnership Partnership Agreement Agreement and and therefore therefore termination termination of Patel's Patel's interest interest cannot constitute constitute theft theft (C.R. (C.R. 38). In support 38). In support of of this this Argument, Argument, Appellees Appellees claimed violated the Partnership that Patel violated Partnership Agreement Agreement and and triggered triggered Section Section 10.2 10.2 of the Partnership Partnership Agreement. Agreement. (C.R. (C.R. 38). Appellees also 38). Appellees also allege allege that had every every right to take control of Patel's Patel's shares. However, as shares. (C.R. 38). However, as explained explained above, above, a fact issue exists regarding whether Patel's partnership interest was redeemed, terminated, or transferred directly to to Arfeen. (C.R. 204 - 206, 207, 208). Arfeen. (C.R. As is set forth above, if Patel's partnership interest was transferred directly to Arfeen, Appellees violated Sections 3.4, 7.2(iii), 7.2(iv), 8.1, 8.5, 10.2, 12.2(a)(iv), 12.2(b), and 13.4 13.4 of the Partnership Partnership Agreement. Agreement. (C.R. 45, 51, 53-54, 66, and 68). Additionally, ifif Patel's Additionally, Patel's partnership partnership interest was transferred interest was transferred directly directly to Arfeen, Arfeen, Section 10.2 of the Partnership Agreement does not apply. Substantial Substantial summary summary judgment judgment evidence exists demonstrating evidence exists demonstrating that Patel's Patel's interest was transferred transferred directly directlyto to Arfeen. Arfeen. (C.R. 204 - 206, 206, 207, 207, 208). 208). Substantial summary judgment evidence also exists that Appellees failed to inform Patel of the transfer and transfer failed to pay and failed pay Patel Patel any anyconsideration consideration for for the the limited limited partnership partnership 39 39 interest. (C.R. interest. (C.R. 96, 96, 222, 222, 223 223 and and 235). 235). Therefore, Therefore, aafact factissue issue clearly clearly exists exists regarding Patel's claim for violations of the Texas Theft Liability Act. 5. The Thetrial trialcourt court erred erred in in granting granting summary summary judgment regarding Patel's claim Patel's claim for fraud because for fraud because Appellees Appellees did not seek did not seek summary judgment regarding Patel’s Patel's fraud claim. Appellees did not independently Appellees independently seek summary summary judgment judgment regarding regarding Patel’s Patel's claim claim for fraud by by non-disclosure non-disclosure in Appellees' Appellees’ Amended Amended Motion Motion for for Summary Summary Judgment. (C.R. 26-141). Judgment. (C.R. 26-141). Appellees Appelleesonly onlysought soughtsummary summary judgment judgment regarding regarding Patel’s fraud claim Patel's fraud claim in in the the Amended Amended Motion for Summary Judgment based upon the theory that (i) the fraud claim is barred by statute of limitations, and (ii) Patel did not suffer damages damages as as aa result result of of Patel’s Patel's fraud claim. These arguments claim. These arguments are without merit and are discussed elsewhere elsewhere in in this this brief. It would brief. It would be be reversible reversible error for the trial court trial court to to grant grantAppellees' Appellees’Amended Amended Motion Motion for forSummary Summary Judgment Judgment independently regarding independently regarding Patel’s Patel's fraud claim because this relief was not requested requested in the Amended Motion for Summary Judgment. See G&H Towing Co. v. Magee, Mage4347 S.W.3d 293
, 297 (Tex. 2011). C. ISSUE ISSUETHREE: THREE: The TheTrial TrialCourt CourtErred ErredininConcluding Concluding Appellees Appellees Conclusively Established that Patel Did Not Suffer Damages. Appellees alleged Appellees alleged that that Patel could not establish Patel could establish injury injury from any any alleged alleged cause cause of of action. (C.R. 38 action. (C.R. 38 at at paragraph paragraph 37). In Infact, fact,Appellees Appellees alleged alleged that"[i]t that"[i]t is clear that the clear that the partnership partnership agreement, agreement, the the terms which Plaintiff terms of which Plaintiff agreed agreed to, to, provides that any partner who leaves the partnership, either voluntarily or through 40 40 expulsion, expulsion,leaves leaveswith withnothing nothingmore morethan thanhis his capital capital account." (C.R. 39). account." (C.R. 39). However, Patel However, Patel did not leave did not leave the the partnership partnership voluntarily voluntarily or or though though expulsion. expulsion. There is no provision in the Partnership Agreement that provides Patel was entitled capital account if his to nothing more than his capital his shares shares were were improperly improperly transferred transferred directly to directly Arfeen. Pursuant to Arfeen. Pursuant to to Sections Sections 3.4, 3.4, 8.1, 8.1, and and 13.4 13.4 of of the thePartnership Partnership Agreement of Harbor Hospice, the alleged transfer to Arfeen is void and that Patel is entitled to retain retain his his limited limited partnership partnershipinterest. interest. (C.R. (C.R. 42-88). Therefore, under 42-88). Therefore, the Partnership Agreement Agreement Patel Patel is entitled to the return of his limited limited partnership partnership interest in Harbor Hospice. Furthermore, Furthermore, since since Arfeen Arfeen and and Arfeen Arfeen Properties have wrongfully taken the distributions that Patel was entitled to, Patel is entitled a pro- rata share of the distributions made to Arfeen and/or Arfeen Properties since 2008 th (financial amounts (financial amounts redacted redacted pursuant pursuant to to Order from the 58 Order from District Court 5g1i District Court in Chapman Chapman v. Arfeen, et. v. Arfeen, et. al.)(C.R. al.)(C.R. 227 227 -- 233). 233). Arfeen Arfeen wrongfully wrongfully received received a substantial amount of distributions and Arfeen Properties, LP wrongfully received amount of distributions an even greater amount distributions that that clearly clearly belonged belonged to to Patel. Appellees Patel. Appellees Amended Motion for Summary Judgment did not address these claims at all. Patel Patel is also also entitled entitled to the the value value of of his hislimited limited partnership partnership interest interest under under Texas law on the date it was improperly acquired by Arfeen.See Qaddura v. Indo- European Foods, European Foods, Inc., Inc., 141 141 S.W.3d S.W.3d 882, 882, 888-890 888-890 (Tex. (Tex. App. App. Dallas Dallas 2004); 2004); Aquaplex, Inc. v. Rancho La Valencia, Inc. Inc,,297 S.W.3d 768
, 775-776 (Tex. 2009); 41 41 Wilson, 137 Punts v. Wilson, 137 S.W.3d S.W.3d 889, 891 (Tex. (Tex. App. App. Texarkana Texarkana 2004); 2004); Groves Groves v. Hanks,546 S.W.2d 638
, 647 (Tex. Civ. App. Corpus Christi 1976); e.g. Business
Organization’s
Organization's Code
Code Section
Section 152.602.. There is
152.602.. There is no
no provision
provision in
in the
the Partnership
Partnership
Agreement ofofHarbor
Agreement HarborHospice
Hospicetotothe
thecontrary.
contrary. (C.R.
(C.R.42
42 -- 88).
88). Appellees
Appellees
Amended Motion for Summary Judgment likewise did not address this claim at all.
Appellees also
Appellees argued that
also argued that if
if Patel's
Patel's limited
limited partnership
partnership interest
interest was
was
redeemed then the purchase price of his redeemed interest is limited to his capital
redeemed
account. First
account. First of
of all,
all, Patel's
Patel's interest
interest was not redeemed
redeemed (see
(see above). Secondly, the
above). Secondly,
Business Organization Code provides:
. .. .. aapartnership
partnership agreement
agreement governs
governs the relations
relations of the partners
partners and
between the partners
between partners and the
the partnership.
partnership. To the extent
To the extent that
that the
the
partnership agreement
partnership agreementdoesdoesnot otherwise
not otherwiseprovide,
provide,this chapter
this chapter
and the other partnership provisions govern the relationship of the
partners and between the partners and the
partners the partnership
partnership. Business
Business
Organization’s
Organization's Code Section 152.002(a)("emphasis
152.002(a)('emphasis added").
added').
. . . the redemption price of a withdrawn partner’s
partner's partnership interest is
the fair
the fair value
value of the
the interest
interest on the
the date
date of
of withdrawal.
withdrawal. Business
Business
Organization’s
Organization's Code Section 152.602(a).
Therefore, if Patel's limited partnership interest was redeemed, Section 8.5
Therefore,
of the Partnership Agreement would not apply because Appellees failed to provide
Patel with
with 60 days notice
notice as required.
required. Since
Since Appellees
Appellees failed
failed to comply
comply with the
terms of the partnership agreement, Texas law applies and Patel would be entitled
to the fair value of his limited partnership interest pursuant to section 152.602(a) of
the Business Organization's Code.
42
42
Finally, even
Finally, even if Section 8.5 of
of the
the Partnership
Partnership Agreement
Agreement applied,
applied, Patel is
entitled
entitled to
to damages. Patel's K-1
damages. Patel's K-1 for
for the
the year
year 2008
2008 states
states that
that Patel
Patel received
received a
distribution from
distribution from Harbor
HarborHospice
Hospiceinin the
the amount
amount of
of $28,575.00. (C.R. 141).
$28,575.00. (C.R. 141).
However, the Harbor Hospice general ledger for the year 2008 does not reflect any
distributions totoPatel.
distributions (C.R. 234).
Patel. (C.R. 234). Patel
Pateltestified
testifiedthat
thathe
henever
never received
received any
any
money. (C.R.
money. (C.R. 223
223 and
and 235).
235). Therefore,
Therefore,Appellees
Appelleeshave
have wrongfully
wrongfully asserted
asserted that
$28,575
$28,575 was
was paid
paid to
to Patel
Patel even
even though
though itit was
was not. Clearly, this
not. Clearly, this would
would increase
increase
Patel's capital account
account by
by $28,575. Once this
$28,575. Once this inaccurate
inaccurate entry is removed from the
account balance
K-1 of Patel, Patel's capital account balance would
would be
be $28,575. Therefore, even
$28,575. Therefore,
under Appellees' theory
theory of damages,
damages, Patel
Patel would
would be entitled to at least $28,575 in
damages. Appellees
damages. Appellees are
are unable
unable to establish
establish that
that there
there is no genuine
is no genuine issue
issue of
material fact regarding Patel's claim for damages.
D. ISSUE
D. ISSUE FOUR:
FOUR: The
The Trial
Trial Court
Court Erred
Erred ininGranting
Granting Summary
Summary
Judgment Because
Judgment Because Appellees'
Appellees' Failed
Failed to Authenticate
Authenticate Any
Any of Their
Summary Judgment Evidence.
Appellees failed
Appellees authenticate any of their
failed to authenticate their summary
summary judgment
judgment evidence.
evidence.
(C.R. 26
(C.R. 26 - 141).
141). No
Noaffidavit
affidavitwas
wasattached
attachedtotoAppelles'
Appelles' Amended
Amended Motion
Motion for
Summary
Summary Judgment
Judgment attempting
attempting to
to authenticate
authenticate any
any of the
the summary
summary judgment
judgment
evidence. (C.R. 26
evidence. (C.R. 26 -- 141).
141). Accordingly,
Accordingly,Appellees'
Appellees'summary
summary judgment
judgment evidence
evidence
admissible as summary judgment
was not authenticated and should not have been admissible
evidence. See Blanche
Blanche v. First
First Nationwide
Nationwide Mortg. Corp,
Corp., 74 S.W.3d
S.W.3d 444, 451
43
43
(Tex. App.--Dallas
(Tex. App.--Dallas 2002,
2002, no
no pet.). Accordingly, the trial court
pet.). Accordingly, court erred in granting
granting
Appellees' Amended Motion for Summary Judgment.
Conclusion
E. Conclusion
It is clear that fact issues exist regarding Patel's claims
claims for fraud, breach of
contract,
contract, breach
breach of fiduciary
fiduciary duty, conversion, for
duty, conversion, for violations
violations of Theft
of the Texas Theft
Liability
Liability Act,
Act, and for declaratory
and for declaratory relief.
relief. The
Thesummary
summaryjudgment
judgment evidence
evidence
establishes
establishes fact
fact issues
issues regarding
regarding each
each of Patel's claims,
of Patel's claims, Appellees'
Appellees' statute
statute of
limitations defense,
limitations defense, Patel’s fraudulent concealment
Patel's fraudulent concealment defense,
defense, and
and Patel’s
Patel's claim for
damages. The
damages. Thetrial
trialcourt's
court'ssummary
summary judgment
judgment ruling
ruling was
was unwarranted,
unwarranted, improper
improper
and constitutes reversible error.
PRAYER
forth herein,
For the reasons set forth herein, Appellant,
Appellant, Patel, respectfully requests pray
that this Honorable Court reverse the summary judgment granted by the trial court
in its entirety and remand this case to the trial court for a trial on the merits.
44
44
Respectfully submitted,
/s/ Chris M. 7)
/4/ &4414711, Portner
oftea et
Chris M. Portner
State Bar No.: 24007858
cportner@portnerbond.com
cportner@portnerbond. corn
J. Trenton Bond
State Bar No.: 00785707
tbond@portnerbond.com
P ORTNER ♦. B
PORTNER OND, PLLC
BOND, PLLC
1905 Calder Avenue
Beaumont, Texas 77701
Telephone: (409) 838-4444
(409) 554-0240
Facsimile: (409)
Anthony Malley, III
State Bar No.: 24041382
tony@mallaw.com
MALLEY LLAW
MALLEY AW FFIRM,
IRM, PLLC
PLLC
905 Orleans, Suite 110
Beaumont, Texas 77701
Telephone: (409) 212-8888
(409) 212-8002
Facsimile: (409) 212-8002
Jamie Matuska
MATUSKA L
MATUSKA AW F
LAW FIRM
IRM
State Bar No.: 24051062
jjamie@matuskalaw.com
amie@matuskalaw. corn
2809 Highway 69 North
Nederland, Texas 77627
Telephone: (409) 722-5600
(409) 727-1290
Facsimile: (409)
45
CERTIFICATE OF SERVICE
correct copy of the
I certify that on October 12, 2015, a true and correct the foregoing
foregoing
instrument was
instrument was provided
provided to
to all known
known counsel
counsel of record in accordance
accordance with the
Texas Rules of Civil Procedure.
David Gaultney
MehaffyWeber, P.C.
823 Congress Avenue, Suite 200
Austin, Texas 78701
David E. Bernsen
Christine L. Stetson
Bernsen Law Firm
420 North MLK, Jr., Pkwy
Beaumont, Texas 77701
Glen W. Morgan
John Werner
Reaud, Morgan & Quinn, LLP
P.O. Box 26005
Beaumont, Texas 77720-6005
/s/ Chris 712,
/4/ &wad M. Peewit
Portner
Chris M. Portner
46
46
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of TEX. R. APP. P.
9.4(e), it has been prepared in a conventional typeface no smaller than 14-point for
text and no smaller than 12-point for footnotes. This document
footnotes. This document also complies with
the word-count limitations
limitations of TEX. R. APP. P. 9.4(i)(3) because it contains 7,034
words.
/s/ Chris M. 7)
/4/ &4414711, Portner
oftea et
Chris M. Portner
47
47
NO. 13-15-00452- CV
IN THE THIRTEENTH COURT OF APPEALS
CORPUS CHRISTI-EDINBURG, TEXAS
__________________________________________________________________
SANDEEP PATEL,
Appellant
v.
HARBOR HOSPICE OF BEAUMONT, L.P., ET AL,
Appellees
__________________________________________________________________
172nd Judicial District Court of Jefferson County, Texas
On Appeal from the 172nd
Trial Court Cause No. E-192,576
The Honorable Donald J. Floyd, Presiding
__________________________________________________________________
APPENDIX TO BRIEF OF APPELLANT
__________________________________________________________________
TAB
A June 2015 Order
June 18, 2015 Order on
onDefendants'
Defendants’ Amended
Amended Motion
Motion for
for Summary
Summary
Judgment
FILED
DISTRICT CLERK OF
TAB A JEFFERSON CO TEXAS
6/18/2015 2:29:33 PM
JAMIE SMITH
DISTRICT CLERK
CAUSE NO.
CAUSE E-192, 576
NO. E-192, E-192576
SANDEEP PATEL § IN THE DISTRICT COURT OF
§
vs.
VS. § JEFFERSON COUNTY, TEXAS
§
HARBOR HOSPICE OF §
BEAUMONT, L.P., ET AL § 172nd nJDICIAL
JUDICIAL DISTRICT COURT
ORDER ON
DEFENDANTS' AMENDED MOTION FOR SUMMARY JUDGMENT
1"'#
On ---¥~~-___:1:.......::8::._.
i 8_______, 2015 the Court
Court considered
considered Qamar
Arfeen, Harbor H
H pice
piceofofBeaumont
BeaumontLP,
LP,Harbor
HarborHospice
HospiceManagers,
Managers, LLC
LLC and
and Arfeen
Arfeen Properties,
for Summary Judgment, and ORDERS that Defendants' Motion is in all
LLP's Amended Motion for
things GRANTED.
GRANTED. Plaintiff's
Plaintiff'sclaims
claimsare
aredismissed in their entirety
dismissed in
All other relief not herein
herein granted
granted isis expressly
expresslydenied.
denied. This
ThisOrder
Order is
is final
final and
and appealable.
,.i(
SIGNED /8
on this 18 day
SIGNEDonthis ~d
of C:
dayof ~
) Sv v. Rv , 933 S.W.2d 1 ( 1996 )
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Bliss v. NRG INDUSTRIES , 162 S.W.3d 434 ( 2005 )