Opinion
No. 04-15-00320-CV
03-23-2016
Jonathan SHURBERG, as Personal Representative of the Estate of Rebecca Lord, Individually and Derivatively on Behalf of La Salle Industries, a Limited Partnership, Appellant v. LA SALLE INDUSTRIES LIMITED, Roy G. Martin Jr. Property Management, Inc., Roy Martin, Elizabeth Martin, Jennifer Lord, Brenda Lord, Kent Lord, Janie Martin, Mark Martin, Thomas L. Martin, and Jill Martin, Appellees
MEMORANDUM OPINION
From the 218th Judicial District Court, La Salle County, Texas
Trial Court No. 14-08-00154-CVL
Honorable Donna S. Rayes, Judge Presiding Opinion by: Marialyn Barnard, Justice Sitting: Sandee Bryan Marion, Chief Justice Marialyn Barnard, Justice Patricia O. Alvarez, Justice AFFIRMED
Appellant Jonathan Shurberg, as Personal Representative of the Estate of Rebecca Lord ("the Estate"), Individually and Derivatively on Behalf of La Salle Industries, a Limited Partnership, appeals the trial court's orders granting appellees', La Salle Industries Limited, Roy G. Martin Jr. Property Management, Inc., Roy Martin, Elizabeth Martin, Jennifer Lord, Brenda Lord, Kent Lord, Janie Martin, Mark Martin, Thomas L. Martin, and Jill Martin, pleas to the jurisdiction based on Shurberg's lack of standing. Shurberg contends the trial court erred in granting the pleas to the jurisdiction because he has standing to pursue his claims. We affirm the trial court's orders.
BACKGROUND
This case involve two entities, La Salle Industries, Inc. ("the Corporation") and La Salle Industries, a Limited Partnership ("the Limited Partnership"). Charles Lord created these entities with the intention of assigning ownership interests in the Limited Partnership to his nine nieces and nephews: Roy Martin, Rebecca Martin, Jennifer Lord, Brenda Lord, Kent Lord, Janie Martin, Mark Martin, Thomas L. Martin, and Jill Martin. Originally, Charles placed Roy and his wife, Elizabeth, in control of the Corporation and named the Corporation general partner of the Limited Partnership. He also assigned the Corporation 10% of the partnership interests in the Limited Partnership. Charles then assigned himself the remaining 90% of the partnership interests as the sole limited partner of the Limited Partnership. Eventually, he transferred his 90% limited partnership interest to his nine nieces and nephews and "their heirs, executors, administrators and assigns" through a series of assignments. Ultimately, the Corporation, controlled by Roy and Elizabeth, owned 10% of the partnership interests as general partner of the Limited Partnership, and Roy Martin, Rebecca Lord, Jennifer Lord, Brenda Lord, Kent Lord, Janie Martin, Mark Martin, Thomas L. Martin, and Jill Martin collectively owned 90% of the partnership interests as limited partners of the Limited Partnership.
Over the course of the next several years, Roy, acting on behalf of the Corporation, controlled the operations of the Limited Partnership. When Charles died, Roy began liquidating the assets of the Limited Partnership, including mineral rights underlying real property in La Salle County. Thereafter, six of the limited partners, including Rebecca, sent Roy a letter, expressing concern about the lack of communication and transparency in the operation of the Limited Partnership. The letter requested a status update regarding the Limited Partnership's assets. In response, Roy stated he had assumed he was carrying out the wishes of the limited partners by liquidating the Limited Partnership's assets. Despite the letter, neither Roy's communication nor actions regarding the operation of the Limited Partnership changed.
In November 2011, Rebecca wrote another letter to Roy and the other limited partners. In her letter, she stated she learned the Limited Partnership "appears to have gone out of existence on several occasions, most recently in 2006, and was not revived[, and] a new entity (La Salle Industries Limited) was created in 2009." Concerned, Rebecca requested to know which entity executed a lease with Chesapeake Operating, Inc., covering the mineral rights in the real property located in La Salle County. She also sought information regarding what rights, if any, the new entity owned in the property. Roy replied, explaining the Limited Partnership's name was changed from "La Salle Industries, a Limited Partnership," to "La Salle Industries Limited, a Limited Partnership," and the original partnership agreement was still in place. Both Roy and Elizabeth, on behalf of the Corporation, denied any knowledge of drilling activities taking place in La Salle County.
In 2012, Rebecca died. Her husband, Shurberg, was recognized as her sole heir and appointed personal representative of her estate. As personal representative of the Estate, Shurberg filed a lawsuit against La Salle Industries Limited (the new entity), Roy G. Martin Jr. Property Management, Inc. (the registered agent of the new entity), Roy Martin, and Elizabeth Martin, alleging mismanagement of the Limited Partnership under various theories, including breach of fiduciary duty, fraud, negligent misrepresentation, and breach of contract. He also sought the removal of the defendants as general partner of the Limited Partnership and demanded an accounting and access to books and records. In addition to these claims, Shurberg asked for a temporary restraining order and temporary injunction as well as the appointment of a receiver. The other limited partners were eventually joined as nominal defendants.
It is undisputed that by this time the general partnership interests of the Limited Partnership were controlled by La Salle Industries Limited, Roy G. Martin Jr. Property Management, Inc., Roy Martin, and Elizabeth Martin.
In response, the limited partner defendants, with the exception of Roy, collectively filed a plea to the jurisdiction. They argued Shurberg lacked standing because all his claims were derivative and could not be brought by him, as personal representative of the Estate, because the Estate is not a limited partner. The limited partner defendants argued that he, at best, is a mere assignee of Rebecca's limited partnership interests. Thereafter, the other defendants, La Salle Industries Limited, Roy G. Martin Jr. Property Management, Inc., Roy, and Elizabeth, collectively filed a plea to the jurisdiction, also challenging Shurberg's standing on the same grounds. Shurberg then filed an amended petition, explaining he was pursuing his claims "individually and, where required, derivatively on behalf of the Limited Partnership." After a hearing on the pleas, the trial court granted the pleas to the jurisdiction, dismissing Shurberg's claims for lack of jurisdiction. Shurberg then perfected this appeal.
ANALYSIS
On appeal, Shurberg challenges the trial court's orders granting appellees' pleas to the jurisdiction. Shurberg contends the trial court erred in granting appellees' pleas because he has standing to pursue his claims. According to Shurberg, he, as personal representative of the Estate, is a limited partner, and this capacity allows him to pursue derivative claims against the Limited Partnership on behalf of the limited partners. Shurberg also argues several of the claims are direct as opposed to derivative, and as a result, he may pursue them directly as personal representative of the Estate.
Standard of Review
A plea to the jurisdiction challenges a trial court's authority to determine the subject matter jurisdiction of a party's claim without deciding the merits of the case. Sneed v. Webre, 465 S.W.3d 169, 180 (Tex. 2015); Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Whether a trial court has subject matter jurisdiction is a question of law we review de novo. City of Elsa v. Gonzalez, 325 S.W.3d 622, 625 (Tex. 2010) (per curiam); Wolff v. Deputy Constables Ass'n of Bexar Cty., 441 S.W.3d 362, 364 (Tex. App.—San Antonio 2013, no pet.). A trial court must have subject matter jurisdiction in order to have authority to hear a case. Tex. Dep't of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 225-28 (Tex. 2004); Waco Ind. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000); Rodriguez ex rel. Rodriguez v. EMC Mortg. Corp., 94 S.W.3d 795, 797 (Tex. App.—San Antonio 2002, no pet.). Standing is an essential component of a court's subject matter jurisdiction. Sneed, 465 S.W.3d at 180; Wolff, 441 S.W.3d at 365; Green Tree Servicing, LLC v. Woods, 388 S.W.3d 785, 790 (Tex. App.—Houston [1st Dist.] 2012, no pet.); see also Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012). A court lacks subject matter jurisdiction over a claim if the plaintiff lacks standing to assert that claim. Heckman, 369 S.W.3d at 150; Wolff, 441 S.W.3d at 365. A party may challenge another party's standing by filing a plea to the jurisdiction. Miranda, 133 S.W.3d at 227; Brown v. Todd, 53 S.W.3d 297, 305 n.3 (Tex. 2001); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000.
We review a trial court's ruling on a plea to the jurisdiction under a de novo standard of review. Miranda, 133 S.W.3d at 228; Univ. of Tex. Health Sci. Ctr. at San Antonio v. Stevens, 330 S.W.3d 335, 337 (Tex. App.—San Antonio 2010, no pet.). In cases where a plea to the jurisdiction challenges the existence of jurisdictional facts, we must consider the relevant evidence submitted by the parties to resolve the jurisdictional issues raised. Stevens, 330 S.W.3d at 337-38; Bland, 34 S.W.3d at 554. We take all evidence favorable to the nonmovant as true and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Miranda, 133 S.W.3d at 228. If the evidence raises a fact issue regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, and the fact issue must be left to be resolved by the fact finder. Id. at 227-28; Stevens, 330 S.W.3d at 338. However, if the relevant evidence fails to raise a fact question on the jurisdictional issue or is undisputed, then the trial court must rule on the plea to the jurisdiction as a matter of law. Miranda, 133 S.W.3d at 227-28; Stevens, 330 S.W.3d at 338.
Whether Shurberg Is a Limited Partner
In their pleas to the jurisdiction, appellees assert the trial court lacked subject matter jurisdiction to consider Shurberg's claims because his claims can only be brought by a limited partner because the claims are derivative. According to appellees, although Shurberg is the personal representative of the Estate, he is not a limited partner of the Limited Partnership, but instead is a mere assignee of a limited partnership interest. Therefore, because Shurberg is not a limited partner, he does not have standing to file any derivative claims.
Shurberg, on the other hand, argues that as personal representative of the Estate, he is a limited partner with standing to pursue derivative claims. Shurberg also points out several of the claims are direct as opposed to derivative, and his status as limited partner is not relevant to his standing to pursue direct claims.
The crux of Shurberg's arguments rests on his assertion that he is a limited partner of the Limited Partnership. Therefore, we begin our discussion by determining whether Shurberg, acting as the personal representative of the Estate, is a limited partner. Shurberg contends he is a limited partner based on: (1) section 153.113 of the Texas Business and Organizations Code, (2) the Limited Partnership Agreement, and (3) previous conduct by the general and limited partners.
1. Section 153 .113 of the Texas Business and Organizations Code
Section 153.113 provides, in pertinent part:
If a limited partner who is an individual dies . . . the limited partner's . . . legal representative may exercise all of the limited partner's rights and powers to settle the limited partner's estate or administer the limited partner's property, including the power of an assignee to become a limited partner under the partnership agreement.TEX. BUS. ORGS. CODE ANN. § 153.113 (West 2014). According to Shurberg, section 153.113 gives him - as legal representative of the Estate - the right to exercise all of Rebecca's rights and powers as limited partner so that he can settle her estate or administer her partnership property. Thus, section 153.113 makes him a de facto limited partner. Appellees, however, contend Shurberg's interpretation of section 153.113 is incorrect. According to appellees, under section 153.113, Shurberg does not automatically become a limited partner of the Limited Partnership based on his status as personal representative of the Estate.
There is no case law regarding the construction and application of section 153.113. Construction of a statute is a question of law and therefore, subject to de novo review. Jaster v. Commet II Const., Inc., 438 S.W.3d 556, 562 (Tex. 2014). We will enforce the statute "as written" and "refrain from rewriting text that lawmakers choose." Id. (quoting Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 443 (Tex. 2009)). We also limit our analysis of a statute by looking only to the words of the statute and applying the plain meaning of those words. Id. We will give effect to every word, clause, and sentence of the statute. Id. (citing In re Office of Att'y Gen., 422 S.W.3d 623, 629 (Tex. 2013)). Thus, we begin our analysis with the words of section 153.113 and consider the plain meaning of those words. See id.
After considering the plain language of section 115.113, we conclude it does not transform Shurberg, acting as personal representative of the Estate, into a limited partner. If we interpret section 153.115 as automatically transforming Shurberg — or any other estate representative — into a limited partner, then the last clause of the statute would be rendered mere surplusage: "including the power of an assignee to become a limited partner under the partnership agreement." See State v. Shumake, 199 S.W.3d 279, 287 (Tex. 2006) (holding that in construing statute, courts give effect to all words and, if possible, do not treat any statutory language as mere surplusage). By its plain language, this last portion of the statute signifies that a legal representative is not automatically transformed into a limited partner, but may become one if the partnership agreement permits it. Accordingly, after giving effect to every clause of the statute, we hold Shurberg was not automatically transformed into a limited partner by virtue of his role as personal representative of the Estate. The statute merely gives him the power to become a limited partner should the terms of the partnership agreement permit it. See TEX. BUS. ORGS. CODE ANN. § 153.113; Jaster, 438 S.W.3d at 562.
2. Limited Partnership Agreement
Shurberg next contends the successors and assigns provision of the partnership agreement expressly recognizes his rights as a personal representative, and under the terms of the partnership agreement, he is a de facto limited partner. The provision reads:
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns where permitted by this Agreement.To further support his argument, Shurberg points to language in the original assignment from Charles Lord to Rebecca which states "an assignee may exercise all the rights and powers of a limited partner."
We construe partnership agreements under the law of contracts. Sonwalkar v. St. Luke's Sugar Land P'ship, L.L.P., 394 S.W.3d 186, 202 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (citing Park Cities Corp. v. Byrd, 534 S.W.2d 668, 672 (Tex. 1976)); see Bird v. Lubricants, USA, LP, No. 2-06-061-CV, 2007 WL 2460352, at *3 (Tex. App.—Fort Worth Aug. 31, 2007, pet. denied) (mem. op.) (setting forth contract construction rules to interpret partnership agreement). When construing a contract, our primary concern is ascertaining and giving effect to the parties' intent as expressed in the instrument. Frost Nat. Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 311-12 (Tex. 2005); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). Similar to our analysis of a statute, we give the language used by parties in a contract its plain, grammatical meaning unless it appears that the parties' intention would thereby be defeated. Arlington Surgicare Partners, Ltd. v. CFL Inv., LLC, 02-15-00090-CV, 2015 WL 5766928, at *2 (Tex. App—Fort Worth Oct. 1, 2015, no pet.); Bird, 2007 WL 2460352, at *3. We also consider the entire contract and harmonize and give effect to all of the contract's provisions by analyzing the provisions with reference to the whole agreement. Frost Nat'l Bank, 165 S.W.3d at 312; Bird, 2007 WL 2460352, at *3. If, after applying these rules of construction, a contract can be given a definite meaning, then the contract is considered unambiguous, and we will construe it as a matter of law. Frost Nat'l Bank, 165 S.W.3d at 312. Finally, if after applying the rules of contract construction, the partnership agreement is silent on the matter, we look to the Texas Revised Limited Partnership Act as codified in the Texas Business Organizations Code for guidance. See id.; Bird, 2007 WL 2460352, at *3.
Although the language in the successors and assigns provision of the agreement makes the agreement binding on a successor or assignee, there is nothing in the language of that provision to suggest an assignee or successor is automatically transformed into a limited partner. More importantly, the following provision of the partnership agreement expressly provides that an assignment does not automatically give the assignee the right to become a limited partner:
Any assignment made to anyone, not already a partner, shall be effective only to give the assignee the right to receive the share of the profits to which his assignor would otherwise be entitled . . . and shall not give the assignee the right to become a substituted Limited Partner.(emphasis added). Thus, under the plain language of the partnership agreement, an assignment - such as the one Shurberg points to - cannot automatically transform an assignee into a substituted limited partner. See Arlington Surgicare Partners, 2015 WL 5766928, at *2. Moreover, to the extent the language in the original assignment from Charles Lord to Rebecca conflicts with the plain language of the partnership agreement, the partnership agreement necessarily controls.
Shurberg, however, argues the foregoing provision in the partnership agreement applies only to assignees who receive a partnership interest by a sale rather than upon death. In support of his contention, Shurberg points to the title of the provision — "Permitted Sales." However, when reviewing the Limited Partnership Agreement as a whole, the agreement also includes a provision regarding the interpretation of headers. The agreement specifically states headers are to be "used for administrative purposes only and do not constitute substantive matter to be considered in construing the terms of this Agreement." Thus, when harmonizing and giving effect to each of the provisions in the partnership agreement, we conclude the partnership agreement does not automatically transform Shurberg into a limited partner. See Frost Nat'l Bank, 165 S.W.3d at 312; Bird, 2007 WL 2460352, at *3.
3. Consent by the Parties
Finally, Shurberg contends he is a limited partner based on the consent of the other limited partners. Shurberg argues there is evidence that shows the other limited partners consented to him becoming a limited partner. Thus, according to Shurberg, this evidence raises a fact issue, and the trial court improperly granted the appellees' pleas to the jurisdiction.
We agree with Shurberg that consent by the other limited partners is a valid means for him to be given limited partner status. When, as is the case here, the partnership agreement is silent with regard to how one may become a limited partner, we must look to the statutes governing limited partnerships for guidance. See Frost Nat'l Bank, 165 S.W.3d at 312; Bird, 2007 WL 2460352, at *3. Here, Shurberg points to section 153.253 of the Texas Business and Organizations Code, which governs how an assignee of a limited partnership interest becomes a limited partner. It states, "an assignee of a partnership interest . . . may become a limited partner if and to the extent that: (1) the partnership agreement provides; or (2) all partners consent." TEX. BUS. ORGS. CODE ANN. § 153.253.
After reviewing the evidence attached to Shurberg's response, we conclude it does not establish the other limited partners consented to him becoming a limited partner. Rather, the evidence establishes the other limited partners — specifically Roy — recognized Shurberg was the owner of a partnership interest because he was the personal representative of the Estate. The evidence also establishes that Roy recognized that Shurberg had a right to information regarding that partnership interest because he was the new owner. The evidence shows Roy interacted with Shurberg on that basis alone by asking for Rebecca's probate information to confirm Shurberg's authority as personal representative and Shurberg's contact information to update the Limited Partnership's records. Thus, the evidence establishes Roy recognized that Shurberg, at most, owned a partnership interest.
Moreover, Shurberg does not point to any evidence of the other limited partners' consent. Instead, he argues the other limited partners treated another surviving spouse of a deceased limited partner like a limited partner. However, treatment of another spouse as a limited partner does not establish evidence of consent to him being a limited partner. Accordingly, because there is no evidence of consent, a fact issue is not raised, and as a matter of law, we hold the other limited partners did not consent to Shurberg becoming a limited partner. See Miranda, 133 S.W.3d at 227-28; Stevens, 330 S.W.3d at 338.
Standing, i.e., Proper Party to Bring Derivative or Direct Claim
Having determined Shurberg is not a limited partner, we turn our attention to whether Shurberg has standing to pursue his claims. The parties agree section 153.402 of the Texas Business Organizations Code identifies who may bring a derivative claim. Section 153.402 provides that, "In a derivative action, the plaintiff must be a limited partner when the action is brought and:
(1) The person must have been a limited partner at the time of the transaction that is the
subject of the action; orTEX. BUS. ORGS. CODE ANN. § 153.402 (emphasis added). Therefore, if Shurberg's claims are derivative, he does not have standing to pursue them because he is not a limited partner. See id. Accordingly, we must consider the applicable law distinguishing between derivative and direct claims to determine whether Shurberg's claims are derivative or direct.
(2) The person's status as a limited partner must have arisen by operation of law or under the terms of the partnership agreement from a person who was a limited partner at the time of the transaction."
Derivative v. Direct Claims
It is well-settled that "[a]n individual stakeholder in a legal entity does not have a right to recover personally for harms done to the legal entity." Nauslar v. Coors Brewing Co., 170 S.W.3d 242, 249 (Tex. App—Dallas 2005, no pet.); see also Wesolek v. Layton, 871 F. Supp. 2d 620, 633 (S.D. Tex. 2012). In other words, an individual stakeholder does not have a separate, independent right of action for injuries suffered by a legal entity even though that individual stakeholder may be injured. Nauslar, 170 S.W.3d at 250 (holding that because limited partnership was entity that suffered direct injury from harm to limited partnership's worth, limited partner did not have a separate, individual right of action for injuries to partnership); see also Swank v. Cunningham, 258 S.W.3d 647, 661 (Tex. App.—Eastland 2008, pet. denied) ("A corporate stakeholder cannot recover damages personally for a wrong done solely to the corporation, even though he may be injured by that wrong."). This principle has been applied to situations involving limited partners seeking to personally recover damages also incurred by the limited partnership. See Hall v. Douglas, 380 S.W.3d 860, 873 (Tex. App.—Dallas 2012, no pet.). "A limited partner does not have standing to sue for injuries to the partnership that merely diminish the value of that partner's interest." Id. Rather, the right to recover is the legal entity's alone even though the economic impact of the alleged wrongdoing may affect an individual stakeholder. Id.; see also Nauslar, 170 S.W.3d at 250; Asshauer, 263 S.W.3d 468, 474 (Tex. App.—Dallas 2008, pet. denied). In the event a stakeholder desires to recover for wrongs done to a legal entity, then the stakeholder must bring the suit derivatively in the name of the legal entity so that each stakeholder will be made whole if the entity obtains compensation from the wrongdoer. Swank, 258 S.W.3d at 661; see also Wesolek, 871 F. Supp. 2d at 632 (pointing out Texas law requires plaintiffs to bring claims for injury to partnership derivatively).
An individual stakeholder is said to have a direct claim for wrongs done to him in cases where the wrongdoer violates a duty that arises from a contract or otherwise that is owed directly by the wrongdoer to the stakeholder. Swank, 258 S.W.3d at 661. Thus, a wrongful act that causes an injury that is separate and distinct from a corporate injury will give rise to a direct cause of action. See id. (citing PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATION § 7.01 cmt. c(2005)).
In this case, it is undisputed Shurberg's breach of fiduciary duty, fraud, negligent misrepresentation and breach of contract claims are derivative and must be brought by a limited partner. See TEX. BUS. ORGS. CODE ANN. § 153.402; Wesolek, 871 F. Supp. 2d at 632; Swank, 258 S.W.3d at 661; Hall, 380 S.W.3d at 873. Thus, having determined Sherberg is not a limited partner, it therefore follows he does not have standing to bring these claims. See TEX. BUS. ORGS. CODE ANN. § 153.402; Wesolek, 871 F. Supp. 2d at 632; Swank, 258 S.W.3d at 661; Hall, 380 S.W.3d at 873.
With regard to his accounting, access to books and records, and removal claims, as well as his applications for temporary restraining order, injunctive relief, and appointment of a receiver, Shurberg argues these claims are direct because the Estate suffered a direct and "unique" injury that is separate and apart from any injury to the Limited Partnership. As a result, he contends that he, as personal representative of the Estate, is entitled to bring these direct claims "individually" against the general partners of the Limited Partnership.
In contrast, appellees argue these specific claims, except his demand for access to books and records, are derivative in nature because the claims refer to injuries directed against the Limited Partnership. With regard to Shurberg's demand for access to books and records, appellees agree Shurberg has a right to bring this claim. Appellees argue, however, there is no justiciable controversy because they have given Shurberg access to the Limited Partnership's books and records and stipulate he is free to access them again.
1. Access to Books and Records
Before we analyze whether Shurberg's claims relating to an accounting, removal, temporary restraining order, injunctive relief, and receiver are direct or derivative, we first address appellees' contention that there is no justiciable controversy with regard to Shurberg's access to books and records claim. This is because even if the trial court erred in granting Shurberg's plea to the jurisdiction with regard to this claim, appellees' argument regarding justiciability raises the issue of subject matter jurisdiction.
It is well-established that subject matter jurisdiction may be challenged for the first time on appeal. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). And although appellees' justiciability argument was not part of their pleas to the jurisdiction, such a matter is a jurisdictional issue that may be raised for the first time on appeal. See Harris Cty. Mun. Utility Dist. No. 156 v. United Somerset Corp., 274 S.W.3d 133, 137 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (addressing ripeness although not raised in plea to jurisdiction); City of Houston v. Northwood Mun. Utility Dist. No. 1, 73 S.W.3d 304, 313 (Tex. App.—Houston [1st Dist.] 2001, pet. denied) (addressing sovereign immunity challenge even though only standing raised in plea to jurisdiction).
"To constitute a justiciable controversy, there must exist a real and substantial controversy involving a genuine conflict of tangible interests and not merely a theoretical dispute." Bonham State Bank v. Beadle, 907 S.W.3d 465, 467 (Tex. 1995); Davis v. Middle Bosque Partners, LP, No. 04-13-00461-CV, 2014 WL 1390497, at *2 (Tex. App.—San Antonio April 7, 2014, pet. denied) (mem. op.). Here, the crux of Shurberg's access to books and records claims rests on his allegation that appellees denied him access to the Limited Partnership's books and records. Appellees pointed to a stipulation they made in open court in which they stated: "the only one that is a direct claim would be his demand for examination of records and information . . . he gets the right to examine the records and to examine information. We've given him the right. He flew down to Texas. He went through the books and records . . . we'll stipulate that he has the right to do that again if he so wishes." Therefore, based on this stipulation and even assuming Shurberg's access to books and records claim is a direct claim that he has standing to pursue, we conclude the trial court did not err in granting appellees' plea to the jurisdiction with respect to Shurberg's access to books and records claim as there is no justiciable controversy. See Bonham, 907 S.W.3d at 467; Davis, 2014 WL 1390497, at *2.
2. Removal and Application for Temporary Restraining Order, Injunctive Relief, and a Receiver
Turning to Shurberg's claim for removal and his applications for a temporary restraining order, injunctive relief, and appointment of a receiver, we next consider whether these claims are direct or derivative. To determine the nature of these claims, we must focus on whether the alleged injuries suffered by Shurberg are separate and distinct from a corporate injury suffered by the Limited Partnership. See Swank, 258 S.W.3d at 661-62.
After reviewing his live pleading, we conclude Shurberg's removal claim and applications for a restraining order, injunctive relief, and appointment of a receiver are based on his assertion that appellees breached their fiduciary duties to the Limited Partnership and the express terms of the partnership agreement, thereby causing injury to the Limited Partnership. Nowhere in his pleading does Shurberg describe how he, as personal representative of the Estate, suffered injuries that are separate and distinct from the injuries allegedly suffered by the Limited Partnership as a result of appellees' alleged conduct. See id. Although Shurberg argues he is injured by the appellees' wrongdoing, he does not have a separate and independent right to bring such claims when the injury is also incurred by the Limited Partnership. See id; see also Wesolek, 871 F. Supp. 2d at 632; Nauslar, 170 S.W.3d at 250. Accordingly, we hold Shurberg's removal claim and applications for a temporary restraining order, injunctive relief, and appointment of a receiver are derivative. See Wesolek, 871 F. Supp. 2d at 632; Nauslar, 170 S.W.3d at 250.
3. Accounting
With regard to Shurberg's assertion that his accounting claim is a direct claim, Shurberg relies on a Utah case in which the Utah Court of Appeals concluded an accounting claim was direct. See GLFP, Ltd. v. CL Mgmt., Ltd., 163 P.3d 636, 641 (Utah 2007). He seems to suggest the court in GLFP, Ltd. held accounting claims are always direct claims. We disagree with Shurberg's interpretation of the court's holding.
In GLFP, Ltd., the court reasoned that because GLFP sought an accounting "as part of [its] dissolution" claim, which the court concluded was a direct claim, then its accounting claim was a direct claim. Id. The court stated the dissolution claim was direct because it was based on allegations of an injury that was separate and distinct from any injury to the Limited Partnership. Id. However, the court also recognized not all accounting claims are direct; the court stated an accounting claim might be a derivative claim if it was asserted as part of another derivative claim. Id; see also Richardson v. Arizona Fuels Corp., 614 P.2d 636, 640 (Utah 1980) (holding request for accounting was derivative because was brought in connection with claim for damages under derivative theory). Thus, we disagree with appellant that GLFP, Ltd. stands for the proposition that accounting claims are always direct claims. See GLFP, Ltd., 163 P.3d at 641; Richardson, 614 P.2d at 640. Instead, we agree with the court's analysis in GLFP, Ltd. that an accounting claim asserted as part of a derivative claim is also a derivative claim. See GLFP, Ltd., 163 P.3d at 641.
Shurberg also relies on a Fifth Circuit case, which quotes New York federal law for the proposition that "the only direct lawsuit against general partners that a limited partner can bring in an individual, non-representative capacity consists of an action for an accounting." Bankston v. Burch, 27 F.3d 164, 167 (5th Cir. 1994) (quoting Lenz v. Assoc. Inns & Restaurants Co. of Am., 833 F. Supp. 362, 379 (S.D.N.Y. 1993)). However, the cited proposition is dicta, and the claims at issue in that case did not involve an accounting. See id. at 167 n.6. Thus, for numerous reasons we are not bound by Bankston. See Lund v. Giauque, 416 S.W.3d 122, 128-29 (Tex. App.—Fort Worth 2013, no pet.) (recognizing that obiter dictum — statement not necessary to determination of case — is neither binding nor precedential); Roe v. Ladymon, 318 S.W.3d 502, 510 n.5 (Tex. App.—Dallas 2010, no pet.) (recognizing that only decisions from united States Supreme Court, Texas Supreme Court, and prior decisions of appellate court before which case is pending are binding precedent). --------
Shurberg also cites section 152.204 of the Texas Business Organizations Code for the proposition that his accounting claim is "unquestionably direct." Section 152.204(a) provides: "A partner owes to the partnership, the other partners, and a transferee of a deceased partner's partnership interest as designated in Section 152.406(a)(2): (1) a duty of loyalty; and (2) a duty of care." TEX. BUS. ORGS. CODE ANN. § 152.204 (West 2012). Thus, Shurberg appears to be arguing that he, the transferee of a deceased limited partner's interest, has a direct claim for an accounting because the general partners violated an independent duty of loyalty and care owed to him. However, when reviewing Shurberg's live pleading, he did not plead appellees breached a duty of loyalty and care owed to him in violation of section 152.204. Rather, he specifically alleges appellees owed a duty of fiduciary care to the Estate, relying on section 113.151 of the Texas Property Code. See TEX. PROP. CODE § 113.151 (West 2014). Section 113.151 governs trusts and provides a beneficiary may demand an accounting by a trustee. See id. Furthermore, Shurberg goes on to demand an accounting "in order to ascertain the amount due to the limited partners, including the Estate." Thus, he seeks an accounting to ascertain the damage done to all the limited partners, including himself as a result of appellees' breach of fiduciary duty owed to the Limited Partnership. Therefore, because Shurberg's accounting claim derives out of his breach of fiduciary duty claim, an undisputed derivative claim, Shurberg's demand for an accounting is also a derivative claim. See GLFP, Ltd., 163 P.3d at 641; Richardson, 614 P.2d at 640.
4. Conclusion
Based on the foregoing, we hold all of Shurberg's claims, except access to books and records, are derivative claims that must be filed by a limited partner. As a result, because Shurberg is not a limited partner, he lacked standing to file such claims against the general partners. With regard to Shurberg's access to books and records claim, we hold there is no justiciable controversy as to that claim.
CONCLUSION
Accordingly, we hold the trial court properly granted appellees' pleas to the jurisdiction, and we affirm the trial court's orders.
Marialyn Barnard, Justice