# Megatel C90-2, Inc. v. Bank of Utah

Supreme Court of Texas, No. 24-0206

**Megatel C90-2, Inc. v. Bank of Utah, No. 24-0206, is before the Supreme Court of Texas. Key issue: The Court granted the petition, vacated the trial court's and court of appeals' judgments, and remanded for rendition of judgment under the parties' settlement, without reaching the merits, but denied the parties' request to vacate the court of appeals' opinion.**

Practice areas: business organizations

## Key issues

- The Court granted the petition, vacated the trial court's and court of appeals' judgments, and remanded for rendition of judgment under the parties' settlement, without reaching the merits, but denied the parties' request to vacate the court of appeals' opinion.
- The petition asked the Court to limit alter-ego liability, which the court of appeals had imposed largely on undercapitalization, and to decide whether belatedly added alter-ego defendants may assert limitations.

## Factual History
In 2015 Megatel C90-2, Inc., an aviation-services entity formed by Megatel Homes founders Aaron and Armin Afzalipour, leased a 1991 Cessna CE650 aircraft from Bank of Utah, as trustee for its Mexican owner, for $11,000 per month. C90 says the aircraft had airworthiness problems from the start; after a 2019 inspection in Mexico the Bank demanded over $100,000 in repairs, and C90, without the aircraft since June 2019 and having stopped rent in 2018, terminated the lease and sued (Petition for Review, PDF pp. 12-15).

## Procedural History
The Bank counterclaimed in March 2020 for breach of the lease, obtained partial summary judgment against C90 when its counsel missed a response deadline, and added alter-ego theories against Armin Afzalipour and Megatel Homes. After a bench trial the trial court awarded the Bank $1,615,051.41 in actual damages and other amounts and imposed alter-ego liability; the Fifth Court of Appeals affirmed. The petition was filed June 21, 2024, the parties later settled, and on May 16, 2025 the Court granted their joint motion in part (Petition for Review, PDF p. 32; May 16, 2025 orders).

## Issues Presented
Whether the court of appeals improperly expanded alter-ego liability by relying almost solely on undercapitalization, and whether alter-ego defendants added after limitations ran may assert limitations as a defense to their own liability (Petition for Review, PDF p. 10).

## Legal Arguments
**Megatel C90-2, Afzalipour and Megatel Homes (Petitioners):** Texas law permits alter-ego liability only where abuse of the corporate form causes injustice, undercapitalization alone is not enough, and the newly added defendants could assert limitations. **Bank of Utah (Respondent):** the record showed gross undercapitalization, extensive control and intent to defraud creditors, supporting alter-ego findings (Petition for Review, PDF pp. 10-11; Response, PDF pp. 7, 12).

## Stated Reasons the Court Should Take the Case
Not applicable; the case ended on a motion.

## Practice Area Tags
business-organizations

## Procedural Posture/Vehicle
Petition for review from the Fifth Court of Appeals in a contract and veil-piercing suit; disposed under Rule 56.3 on a joint motion to dismiss pursuant to settlement, after supplemental briefing on the vacatur request (May 16, 2025 orders). Justice Sullivan filed a concurring opinion in No. 24-0206, joined by Justice Busby, explaining that he would deny requests to vacate courts of appeals' opinions after a settlement, and noting that Rule 56.3 sets a presumption against vacatur that the Court has overcome only rarely (Sullivan, J., concurring, PDF pp. 1-6).

## Amicus Involvement
None noted

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Source: The SCOTX Report, https://scotxreport.com/cases/24-0206. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.