Business Organizations—The SCOTX Report

23-0329·Petition For Review

Bertucci v. Watkins

A partner's appellate brief that argued he had standing to assert derivative claims and that the defendant owed fiduciary duties to the business entities did not waive his appeal of the dismissal of those derivative claims, so the court of appeals must reach them.
Fact issues do not preclude summary judgment against a partner's claim that his co-venturer owed him individual fiduciary duties, because the claim was not properly asserted or established in the trial court and he conceded it made no difference given his derivative claims; the court of appeals also correctly held fact issues on limitations and that the Dead Man's Rule bars the surviving partner's testimony that the decedent approved the expenditures.

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23-0703·Petition For Review

S. Methodist Univ. v. S. Cent. Jurisdictional Conference of the United Methodist Church

business organizations civil procedure texas constitution

Business Organizations Code § 22.207, which lets a religious conference elect and control the board of a nonprofit educational corporation, protects the Conference's authority to sue SMU to enforce its rights under the articles of incorporation, so § 20.002's limit on who may challenge ultra vires acts does not bar the suit.
SMU's articles are not a contract between SMU and the Conference, but the articles are a contract between SMU and the State, and given § 22.207 and the articles' express grants of rights, the Conference may pursue its breach-of-contract claim as a third-party beneficiary; SMU was entitled to summary judgment on the false-filing claim because the certificate of amendment, read as a whole, was not materially false.

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24-0024·Mandamus

In re UMTH Gen. Servs., L.P.

business organizations fiduciary duty civil procedure contract interpretation

Individual shareholders of a Maryland real estate investment trust may not sue the trust's advisors directly on an advisory agreement that says the advisor is in a fiduciary relationship "to the Trust and its Shareholders," because the phrase refers to the shareholders collectively and creates no duty to individual shareholders distinct from the duty to the entity.
The shareholders therefore lack capacity to bring claims the trust owns and must pursue them derivatively under the trust documents' exclusive Maryland forum, so the trial court erred in denying the advisors' plea in abatement and the Court conditionally granted mandamus directing dismissal with prejudice.

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24-0055·Petition For Review

Inwood Nat'l Bank v. Fagin

business organizations

A beneficiary's tortious-interference claim against a bank fails as a matter of law where the trust agreement only stated the grantor's intent to transfer bank shares "upon approval by" the bank: it made no present, unconditional transfer or gift, so the beneficiary held no contract right the bank could interfere with.
The Court reversed the part of the court of appeals' judgment reviving the tortious-interference claim and reinstated the trial court's take-nothing judgment.

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24-0205·Petition For Review

Huffman Asset Mgmt., LLC v. Colter

civil procedure business organizations

A no-answer default judgment against two LLCs was reversed because the record did not show the Secretary of State forwarded process to the addresses the statute requires, the most recent addresses on file, so strict compliance with substituted service was not shown.
A Whitney certificate showing that process was forwarded does not by itself establish that it went to the statutorily required addresses.

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24-0206·Petition For Review

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

business organizations

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.

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24-0573·Other

Paxton v. Annunciation House, Inc.

texas constitution business organizations criminal law federal constitution

The Texas attorney general has constitutional authority under Article IV, § 22 to file a quo warranto action seeking revocation of a corporation's charter based on alleged criminal acts, here knowingly harboring illegal aliens, and neither Business Organizations Code § 11.301(a)(5) nor Civil Practice and Remedies Code chapter 66 expressly limits it; on a motion for leave, the trial court asks only whether the petition states a cause of action, not how the evidence weighs.
Neither RFRA, federal preemption nor vagueness justified denying leave to file, and Business Organizations Code §§ 12.151-.152, which let the attorney general demand corporate records "immediately," are not facially unconstitutional under City of Los Angeles v. Patel because "immediately" does not foreclose precompliance review, so the Court vacated the injunction against further records requests.

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24-0581·Petition For Review

Shamrock Enters., LLC v. Top Notch Movers, LLC

civil procedure business organizations

A no-answer default judgment against an Alabama LLC was reversed on restricted appeal because the record did not show process was forwarded to the statutorily required address, the most recent address on file with the Secretary of State; the lower courts wrongly presumed it was.
The Court vacated the default judgment and remanded, with five Justices joining Chief Justice Blacklock's concurrence.

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24-0828·Other

Mann v. Sikh Nat'l Ctr., Inc.

attorney fees civil procedure business organizations

The Court denied a petition for review in a fight over control of the Sikh National Center's board and bank accounts that raised whether a trial court that lacks subject-matter jurisdiction under the ecclesiastical-abstention doctrine may still award attorney's fees under the Uniform Declaratory Judgments Act, and Justice Young concurred in the denial.
The concurrence tentatively viewed a court wholly lacking jurisdiction over a UDJA claim as unable to award fees on that claim, though fees may be available for litigating the jurisdictional question itself, but said the case was a poor vehicle because the trial court's rulings were unclear and the parties changed their jurisdictional positions.

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25-0074·Petition For Review

Exec. Workspace–ABC–Preston Rd., LLC v. Reserve Capital–Preston Grove SPE, LLC

business organizations

The Court denied rehearing, and Justice Young wrote that the Court has decided too few cases under the Texas Uniform Fraudulent Transfer Act (TUFTA), leaving lower courts to rely on Fifth Circuit "Erie guesses," but that this fact-intensive case is a poor vehicle for the question of whether terminating a contractual right to future payments can be a fraudulent "transfer" of an "asset."
He urged litigants to bring TUFTA cases of clear jurisprudential importance and said he expects the Court to be receptive.

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25-0159·Mandamus

In re Westdale Asset Mgmt., Ltd.

civil procedure business organizations

The Court denied mandamus to companies that sought to remove a 2021 breach-of-contract suit from a Dallas County court at law to the Texas Business Court, and Justice Sullivan, joined by Justice Young, concurred, explaining that the Business Court Act applies only to civil actions commenced on or after September 1, 2024.
The concurrence noted that House Bill 40 now lets a party seek transfer of a pre-September 2024 action to the Business Court by agreed motion and its permission, so the relators can try that route after September 1, 2025.

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25-0274·Petition For Review

Wings v. Freedman

business organizations contract interpretation attorney fees breach of contract

Does an LLC's buy-sell provision let a member condition a buyout offer on return of the other member's unreturned capital contribution, or does Section 12.2 allow only the purchase and sale of "Membership Interest"?
Can a party recover Chapter 38 attorney's fees when the only relief obtained on a breach-of-contract claim is a specific-performance injunction rather than damages?

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25-0557·Mandamus

In re Morningstar Oil & Gas, LLC

business organizations

What must a plaintiff plead to show demand futility in a derivative suit for a Delaware limited partnership: futility as to the general partner as an entity, or director-by-director as to the board of the general partner's delegate?
Did Delaware's amendment to 6 Del. C. § 17-403(c) abrogate the entity-based approach, and did the trial court abuse its discretion by overruling the special exceptions to the demand-futility allegations?

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25-1078·Petition For Review

Chukwuneke v. Chionuma

civil procedure business organizations

Whether a trial court, after its plenary power has expired, may use a judgment nunc pro tunc to impose new joint-and-several attorney's fees, costs and a future enforcement fee on a defendant against whom the original judgment awarded no money, so that the nunc pro tunc is void as correcting judicial rather than clerical error.
Whether a party collaterally attacking a judgment as void must offer evidence beyond the face of the two judgments, or whether the court of appeals imposed the wrong burden by faulting the petitioners for introducing only a partial copy of the original judgment.

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