Ahmed v. Mbogo
| Decision Date | 30 July 2018 |
| Docket Number | No. 05-17-00457-CV,05-17-00457-CV |
| Parties | MOHAMED AHMED, Appellant v. HINGA MBOGO, Appellee |
| Court | Court of Appeals of Texas |
On Appeal from the 101st Judicial District Court Dallas County, Texas
Before Justices Lang-Miers, Myers, and Boatright
Opinion by Justice Myers
This is an appeal from a final judgment in favor of appellee Hinga Mbogo following motions for summary judgment and a four-day jury trial. In twenty-three issues, appellant Mohamed Ahmed contests the trial court's denial of his motion for summary judgment; the legal and factual sufficiency of the evidence supporting the jury's verdict; the trial court's refusal of appellant's proposed jury questions; and the granting of appellee's motion for partial summary judgment. We affirm.
Appellee Hinga Mbogo is an automotive mechanic. In the 1980s, he moved to Dallas and began working as a certified auto mechanic. In 1986, appellee leased a portion of a property located at the 3500 block of Ross Avenue, in Dallas, Texas, for the purpose of owning and operating an automotive repair business, Universal Motors. With the help of two other mechanics, Martin Nganga and Charles Kaguma, appellee operated Universal Motors on the property until June of 1991, at which point the property's owner approached appellee about buying the property—three lots in city block 513 of the City of Dallas, Texas, located at 3512, 3516, and 3520 Ross Avenue—for $178,000, with an up-front $30,000 down payment. Appellee wanted to purchase the property but neither he nor his two mechanics had sufficient funds to make the down payment. Appellee learned, however, that a former auto repair customer, appellant Mohamed Ahmed, who was not a mechanic, might be interested in contributing the money for the down payment in exchange for an ownership interest in the business.
The parties' discussions ultimately resulted in the purchase of the property and the formation of a new business entity, "Universal Auto Repair, Inc.," that operated a new automotive repair business in place of the one appellee previously operated. They signed a ten-year note for $178,080; appellant contributed the $30,000 down payment for the property's purchase. Appellee contributed the automotive repair business he already operated on the property, along with its tools and equipment. Three of the four persons involved—appellee, Nganga, and Kaguma—testified that their understanding of the parties' oral agreement was that for their interest in the business and property to vest, they had to work full time for the business for ten years, and anyone who left the business in the first ten years of operation forfeited his ownership interest. As appellee described it: Appellant confirmed the existence of the ten-year agreement but testified it did not apply to him.
On June 21, 1991, appellant completed and submitted to the Texas Secretary of State articles of incorporation naming himself, appellee, Kaguma, and Nganga as the initial board of directors of Universal Auto Repair, Inc. The ownership interest was to be divided four ways, with each person getting a 25 percent share, and each of the four owners' interest included an ownershipinterest in the property. Appellee testified the business agreement was between himself, appellant, Kaguma, and Nganga, but for tax reasons his sister Mary Mbogo, who lived in Miami, was named on the warranty deed instead of appellee. From 1997 until 2014, Mary Mbogo was listed as a co-tenant on the warranty deed for the property alongside appellant, Kaguma, and Nganga. On December 23, 2014, she executed a general warranty deed transferring her interest to appellee. The evidence at trial showed she was not a party to the original agreement, she claimed no ownership interest in the property, and that she was a "stand in" for appellee and held title on his behalf.
After Universal Auto Repair was up and running, the parties agreed that appellant, appellee, Nganga, and Kaguma would each receive $350 a week in salary when funds were available, and any money remaining was to be divided between them. Appellee testified that the first few years of the business were "okay," but the parties soon started fighting among themselves because "[t]here was not enough money." At times, after the business expenses were paid, including the note for the property, there were not enough funds to pay everyone their salaries. Kaguma testified that the agreed $350 salary was a "[h]uge pay cut" for him, and that "there were times we went without."
Sometime in 1994, Charles Kaguma decided to leave the business and relinquished his co-ownership interest in the business and the property, telling the jury he felt he had no choice because "[i]t became impossible for me to survive on $350 a week when it was available." The following year, in 1995, Martin Nganga also relinquished his interest. For the next two years, appellant and appellee operated the business alone, with some assistance from non-mechanic "helpers." Appellee testified that it was difficult to operate the business without experienced mechanics to help him and that he was working long hours, sometimes staying until 10:00 p.m. at night and working seven days a week. To supplement the business's income, appellant and appellee decidedto purchase a tow truck in 1995.
In late May or early June of 1997, not long after securing a towing contract with AAA, appellant quit Universal Auto Repair, closing the business's checking account (after withdrawing the funds on deposit) and starting his own towing business. Appellant also took the tow truck, which he claimed he owned. Appellee continued paying the expenses for the property's upkeep, the mortgage payments, the tax assessments, and the insurance. Somewhere around a $95,909 principal balance remained on the property when appellant left the business.
In October of 1997, after a few months of operating Universal Auto Repair alone, appellee formed a new, solely-owned, automotive repair business called Hinga's Automotive. Along with changing the store-front signage from Universal Auto Repair to "Hinga Auto Repair," appellee registered his company with the Texas Secretary of State as "Hinga's Automotive;" changed the business's uniforms to Hinga's Automotive from Universal Auto Repair; changed the locks; built an extension on the back of the building; and otherwise exercised control over the property. Appellee made these changes without appellant's authorization or consent. Appellee also obtained warranty deeds from Kaguma and Nganga in June of 1997 conveying their interest in the property to appellee.
In August of 2001, appellee received notice that the property's note was maturing. As he had been doing since appellant's departure from the business, appellee paid the remaining amounts due under the note and received, in December of 2001, both the property's deed and a release of the lender's lien.
After holding the property deed for almost fifteen years, appellee approached appellant about getting his name removed from the deed. Appellant indicated a willingness to help clear the cloud on the property's title if paid "the right price." According to appellee, he demanded $200,000. Unwilling to pay for what he believed he already owned, appellee filed the underlyingadverse possession lawsuit on June 3, 2015.
In his live pleading—the plaintiff's third amended petition—appellee asserted a claim for adverse possession against appellant, and alternative claims against him for breach of contract and for partition and contribution/accounting. Appellee based his claims on the fact that, among other things, appellee, his mechanics, and appellant had agreed to form, and to equally co-own, Universal Auto Repair; each co-owner's interest in Universal Auto Repair included an equal ownership share in the property; and any co-owner who quit Universal Auto Repair before the business's tenth anniversary automatically forfeited his interest in the business and the property to the remaining co-owners. Appellee further alleged that, upon quitting Universal Auto Repair in June of 1997, appellant automatically forfeited to appellee (the sole remaining co-owner) whatever interest he had in the property. Appellee also argued that even if appellant retained an interest in the property, appellee acquired that interest by adversely possessing the entire property in accordance with the ten-year limitations period in section 16.026 of the Texas Civil Practice and Remedies Code.
Appellant answered and counterclaimed. Appellant's live pleading—the defendant's third amended counterclaim—asserted counterclaims against appellee for fraud, statutory fraud, fraudulent inducement, breach of fiduciary duty, conspiracy, purchase money resulting trust, declaratory judgment, and an accounting. Appellant's live answer—the defendant's first amended answer—included three verified denials challenging appellee's standing and capacity to sue. It also included the affirmative defenses of estoppel, waiver, assumption of the risk, statute of frauds, statute of limitations, fraud, illegality, and unclean hands. Appellant's counterclaim argued that he, not appellee, owned 100 percent of the property, pointing out (among other things) that appellee's sister was the fourth co-owner of the property; she failed to contribute the agreed-to amount pledged for her co-equal interest; appellee's post-1997 possession of the property was notadverse to appellant because, after appellant left the business, appellee just managed the property for appellant's benefit; and appellant was the only co-owner who made any contributions towards the property's purchase.
Before trial, appellee moved for partial no-evidence and traditional...
To continue reading
Request your trial