Alicea v. Curie Bldg., L.L.C.
| Decision Date | 17 February 2021 |
| Docket Number | No. 08-19-00235-CV,08-19-00235-CV |
| Citation | 632 S.W.3d 142 |
| Parties | Jose A. ALICEA, M.D., Appellant, v. CURIE BUILDING, L.L.C., Appellee. |
| Court | Texas Court of Appeals |
ATTORNEY FOR APPELLANT: Jamie T. Wall, James & Haugland, P. C., P.O. Drawer 1770, El Paso, TX 79902.
ATTORNEY FOR APPELLEE: E. Link Beck, Beck & Hall, P. C., 5915 Silver Springs Drive, Bldg. 4, El Paso, TX 79912.
Before Rodriguez, C.J., Alley, J., and Ferguson, Judge, Ferguson, Judge (Sitting by Assignment)
Appellant Jose A. Alicea appeals the trial court's granting of Appellee Curie Building, L.L.C.'s Motion for Summary Judgment against him.
After withdrawing his ownership rights in several entities that owned commercial properties, Appellant sought to invoke a provision of his agreement with those entities which would entitle him to a share of sale proceeds if all or substantially all of their assets were sold within two years of withdrawing his ownership rights. The entities—which, through a series of conversions and mergers were consolidated into the entity which is now the Appellee in this case—disputed his right to invoke the contract's subsequent-sale provision because they claimed the asset transfer in question occurred pursuant to a corporate reorganization. Appellant filed a declaratory action to determine his rights under their agreement, which the trial court resolved in Appellee's favor after it filed for summary judgment.
We agree with the trial court and affirm its judgment.
The factual background of this case is recited in detail in Appellee's motion for summary judgment, whose corresponding judgment forms the basis of this appeal. Because Appellant does not controvert the facts presented by Appellee, we take them as true.
The doctors of a local surgical group formed a number of entities whose purpose was to own real estate from which the surgical group would rent to operate their practice locations. Each such entity was originally organized as a limited partnership, and was the subject of a buy-sell agreement, each with identical terms. The most recent version of each buy-sell agreement prior to the transaction underlying this case was signed in 2009 and attached to Appellee's motion for summary judgment (the Buy-Sell Agreement). Appellant was a party to the Buy-Sell Agreement which memorialized his ownership interest in each entity as either a limited partner or member.
In 2013, Appellant executed withdrawal and redemption agreements with each of the various entities in which he held an ownership interest, effectively withdrawing his interest as an owner and/or member of each entity, as applicable.
The Transaction occurred in three distinct phases. The first phase occurred on September 29, 2014, when, in preparation for the acquisition of various properties by a real estate investor, each limited partnership was converted into an LLC and the LLC which formerly served as its general partner was merged into it. Specifically as to Appellee, Curie Building, Ltd. was converted into an LLC and its general partner, Curie General, LLC, was merged into Curie Building, LLC. A similar process occurred with the remaining entities. Specifically, East Building, Ltd. was converted into an LLC and EPOSG - East General, LLC merged into it; and Kenworthy Building, Ltd. was converted into an LLC and Kenworthy General, LLC merged into it.
The second phase involved the contribution of property from the newly formed LLCs to subsidiaries of the real estate investment partnership, Physicians Realty, LP. Each of the new LLC entities entered into a contribution agreement with subsidiaries of Physicians Realty, LP, which contributed the LLCs' property in exchange for ownership units in the real estate investment company, as well as cash.
In the third and final phase of the Transaction, East Building, LLC and Kenworthy Building, LLC merged into Curie Building, LLC. When all was said and done, forty-nine percent of the net equity contribution value of the properties was received by the LLCs' members in the form of ownership shares of the real estate investment partnership; fifty-one percent was received in cash. Accordingly, the members of the LLCs obtained more favorable tax treatment because only the cash portion they received from the transaction was taxed.
Following the transaction, Appellant sought to invoke the Subsequent Sale Provision of the Buy-Sell Agreement. Appellee resisted, claiming any asset transfer was pursuant to a reorganization.
Appellant filed suit against Appellee seeking declaratory judgment regarding his rights under the Buy-Sell Agreement. Specifically, Appellant contends the Transaction triggered the Subsequent Sale Premium provision and he is thus entitled to his share of the property transfer received by the other members. Appellee answered with a general denial, and filed its motion for summary judgment a few months after litigation initiated. In its motion, Appellee asserts the Transaction was a reorganization of the companies, which would therefore, according to Appellee, explicitly preclude triggering the Subsequent Sale Premium provision. In support of its motion, Appellee attached the Buy-Sell Agreement and an affidavit by Steve Lauterbach, an accountant who assisted the various entities involved in the Transaction.
In his response, Appellant objected to Lauterbach's affidavit. Specifically, he complained that Lauterbach's failure to attach documentary evidence of the subject matter upon which Lauterbach testified in the affidavit constituted factual conclusions. He likewise complains the affidavit's contents labeling the Transaction as a reorganization rather than a sale constitutes a legal conclusion without providing facts for its basis. He also complained of Appellee's failure to designate Lauterbach as an expert witness, and for such reason his affidavit should be struck.
Appellant argues that even if Lauterbach's affidavit is considered competent summary judgment, genuine issues of material fact exist regarding whether a reorganization or sale took place based on Lauterbach's testimony.
Following a hearing, the trial court granted Appellee's motion for summary judgment. After entering the order, the trial court sent a letter to counsel regarding its decision not to award attorney's fees. In the letter, the trial judge referenced the complexity of the transaction and Appellee's counsel's use of diagrams at the summary judgment hearing to aid in the trial court's understanding of the various entities and their relationships. She made the reference to justify the trial court's decision not to award attorney's fees due to the complexity of the transaction and each side's right to counsel to navigate it in the declaratory judgment action.
Final judgment was rendered in the case a short time after the trial court sent its correspondence to the parties. Appellant timely filed his notice of appeal.
Appellant raises three issues on appeal: (1) Whether the trial court erred in overruling his objections to Lauterbach's affidavit as summary judgment evidence; (2) whether the trial court erred in relying on evidence not properly referenced in or incorporated into Appellee's motion for summary judgment; and (3) whether genuine issues of material fact exist regarding whether the Transaction was a sale or a reorganization which would preclude the trial court from granting summary judgment in Appellee's favor.
In his first issue, Appellant contends the trial court erred in overruling Appellant's objections to the affidavit of Steve Lauterbach, CPA. Specifically, Appellant complains the affidavit contains a number of factual and legal conclusions, the evidence it refers to is not on file with the court or attached to the Defendant's motion for summary judgment, and Lauterbach was never designated an expert witness.
A trial court's decision to admit or exclude evidence for summary judgment is reviewed for abuse of discretion. Lujan v. Navistar, Inc. , 555 S.W.3d 79, 85 (Tex. 2018) ; Hall v. Domino's Pizza, Inc. , 410 S.W.3d 925, 929 (Tex.App.—El Paso 2013, pet. denied). The test for abuse of discretion is "whether the court acted without reference to any guiding rules or principles." In Re National Lloyds Ins. Co. , 507 S.W.3d 219, 226 (Tex. 2016). The complaining party must show, "(1) the trial court erred in admitting the evidence; (2) the erroneously admitted evidence was controlling on a material issue dispositive of the case and was not cumulative; and (3) the error probably caused rendition of an improper judgment in the case." Hall , 410 S.W.3d at 929.
An affidavit that makes factual conclusions or conclusory statements without providing supporting facts is not sufficient evidence to warrant summary judgment. See Elizondo v. Krist , 415 S.W.3d 259, 264 (Tex. 2013) ; Gunville v. Gonzales , 508 S.W.3d 547, 560 (Tex.App.—El Paso 2016, no pet.). When used as summary judgment evidence, "[s]upporting and opposing affidavits shall be made on personal knowledge, shall...
To continue reading
Request your trial
-
Crane v. Rave Rest. Grp., Inc.
...is given its ‘plain, ordinary, and generally accepted meaning unless the instrument directs otherwise.’ " Alicea v. Curie Bldg., L.L.C. , 08-19-00235-CV, 632 S.W.3d 142, 153 (Tex. App.—El Paso Feb. 17, 2021, no pet. h.) (quoting URI, Inc. v. Kleberg Cnty. , 543 S.W.3d 755, 764 (Tex. 2018) )......