Bhatia v. Woodlands N. Houston Heart Ctr., PLLC

• Court: Texas Court of Appeals
• Writing for the Court: MARTHA HILL JAMISON
• Citation: Bhatia v. Woodlands N. Houston Heart Ctr., PLLC, 396 S.W.3d 658 (Tex. App. 2013)
• Decision Date: 01 March 2013
• Docket Number: No. 14–11–00477–CV.,14–11–00477–CV.
• Parties: Harmohinder S. BHATIA, Appellant v. WOODLANDS NORTH HOUSTON HEART CENTER, PLLC, North Houston Heart Center, PLLC, Northwest Houston Cardiovascular Imaging Center II, Ltd., Northwest Houston Cardiovascular Imaging Associates, P.A., Bacl Investments, LLC, Vincent Aquino, M.D., Gary Coleman, M.D., Bruce Lachterman, M.D., and Christopher Lavergne, M.D., Appellees.

396 S.W.3d 658

Harmohinder S. BHATIA, Appellant

v.WOODLANDS NORTH HOUSTON HEART CENTER, PLLC, North Houston Heart Center, PLLC, Northwest Houston Cardiovascular Imaging Center II, Ltd., Northwest Houston Cardiovascular Imaging Associates, P.A., Bacl Investments, LLC, Vincent Aquino, M.D., Gary Coleman, M.D., Bruce Lachterman, M.D., and Christopher Lavergne, M.D., Appellees.

No. 14–11–00477–CV.

Court of Appeals of Texas, Houston (14th Dist.).

Feb. 14, 2013.

Rehearing Overruled March 1, 2013.

Sean Alan Roberts, Houston, for Appellant.

Alex E. Cosculluela, Houston, for Appellees.

Panel consists of Justices BOYCE, CHRISTOPHER, and JAMISON.

OPINION

MARTHA HILL JAMISON, Justice.

This lawsuit concerns the breakup of a medical practice group. Although the group involved several related business entities, appellant Harmohinder S. Bhatia sued his former partners regarding his interest in just one of the entities, Northwest Houston Cardiovascular Imaging Center II, Ltd. (Imaging Center). At the conclusion of trial, a jury found that no party was liable for any damages to any other party. The trial court entered a take-nothing judgment on Bhatia's claims and awarded attorney's fees to appellees Vincent Aquino, M.D., Gary Coleman, M.D., Bruce Lachterman, M.D., and Christopher Laverge, M.D.¹

Bhatia raises six issues on appeal, alleging: (1) the trial court erred in failing to award Bhatia the fair value of his interest in the Imaging Center, (2) the evidence was legally and factually insufficient to support the jury's “no” answer to Question 1 in the charge asking whether the appellees failed to comply with the partnership agreement, (3) the evidence was legally and factually insufficient to support the jury's finding of zero damages, (4) the trial court erred in admitting appellees' expert's valuation testimony, (5) the trial court erred in admitting certain evidence regarding Bhatia's conduct and income, and (6) appellees were not entitled to attorney's fees as “prevailing parties” under the partnership agreement. We affirm.

I. Background

Bhatia opened a sole-proprietorship cardiology practice in 1978. In 1985, he hired Aquino as an employee and, three years later, the two doctors formed a partnership. Between 1988 and 2003, the other three appellees, Drs. Coleman, Lachterman, and LaVergne, each joined the partnership. Bhatia and Aquino also formed a separate partnership for the purpose of performing nuclear stress testing for their patients. Over the ensuing years, the ownership of this testing enterprise was restructured to add the remaining appellees as partners. By 2003, Bhatia and the appellees began having business disputes.

Appellees made plans to begin a new practice in a different building, Lantern Bend, and Bhatia planned to practice in the current building, Peakwood. As of that time, Bhatia owned an interest in the following entities:

(1) North Houston Heart Center, PLLC (NHHC)—the clinical practice at Peakwood.

(2) Northwest Houston Cardiovascular Imaging Center II, Ltd. (Imaging Center)—a provider of diagnostic testing to clients of NHHC (Imaging GP as general partner and 80 percent owner; Bhatia and each of the appellees owning minor limited partnership interests ²).

(3) Northwest Houston Cardiovascular Imaging Associates, PA (Imaging GP)—the general partner of the Imaging Center.

(4) BACL Investments, LLC—the holding company for equipment used in the medical practice.

A partnership meeting for NHHC was noticed for February 17, 2003. On that day, Bhatia and appellees met, along with their lawyers, and voted unanimously to dissolve “the organization” as of September 1, 2003.³ The Imaging Center was not expressly mentioned in the meeting notice or in the call for a vote on dissolution. Appellee Aquino testified, however, that business for all of the entities was customarily handled together and was addressed during meetings called for NHHC. This testimony was echoed by that of appellees' business structures expert, Edgar Marston, who indicated in his testimony that the partners treated the various entities as a “unitary bucket” so that the vote to dissolve the organization on February 17, 2003 was effective to dissolve all of the entities.

At a meeting on September 15, 2003, Bhatia and at least some of the appellees discussed, among other things, the allocation of equipment that had been used by the Imaging Center. Several accounting experts, including John Wade, an auditor appointed by the court on Bhatia's motion, testified at trial that Bhatia received at least his fair share of these assets. John Henderson, the accountant who purportedly oversaw the windup of business and disbursement of assets for the medical practice group, specifically testified that Bhatia received cash distributions, equipment, and files related to his patients. Liabilities similarly were disposed of, although Henderson and Wade both testified appellees satisfied the final $180,000 in liabilities after Bhatia failed to complete his contribution.

After September 30, 2003, appellees moved into Lantern Bend and opened Woodlands North Houston Heart Center, PLLC. There, they continued to treat patients much as they had at Peakwood with some of the same employees and using some of the same equipment. Meanwhile, Bhatia continued to practice at Peakwood with some of the same equipment and some of the same employees.

Bhatia subsequently sued appellees for, among other things, breach of the Imaging Center partnership agreement, breach of fiduciary duty, conversion, and misappropriation of partnership assets. Appellees counterclaimed for breach of fiduciary duty, conversion, and misappropriation.⁴ Bhatia's primary position at trial and on appeal is that the Imaging Center never properly and officially dissolved, so when appellees continued performing diagnostic testing for patients at a new location with much of the same equipment and many of the same employees, this was in effect a continuation of the Imaging Center. Thus, Bhatia contends that he was entitled to the value of his interest as a withdrawing partnerin an ongoing and quite profitable partnership rather than merely the value of his interest in a dissolved or defunct partnership.

The jury answered “no” to Question 1 in the charge asking whether the appellees failed to comply with the agreement. The jury also answered “no” to Question 6 asking whether the appellees misappropriated or converted partnership property, and to Question 8 asking whether Bhatia converted or misappropriated partnership property. The jury further found that appellees and Bhatia each violated their fiduciary duty, but it declined to award damages to anyone. The trial court entered judgment in accordance with the jury's verdict and awarded attorney's fees to appellees as “prevailing parties,” as authorized under the Imaging Center partnership agreement. The parties stipulated before trial to the amount of reasonable attorney's fees incurred in the litigation and necessary in the event of an appeal.⁵

II. Legal and Factual Sufficiency

Bhatia's first three issues raise legal or factual sufficiency challenges to the trial court's judgment or the jury's findings. In his first issue, Bhatia contends that, as a matter of law, the trial court should have awarded him the fair market value of his interest in the Imaging Center as of September 30, 2003. In his second issue, he asserts that the jury's failure to find that appellees breached the partnership agreement is not supported by legally or factually sufficient evidence. And, in his third issue, Bhatia contends that the evidence was legally and factually insufficient to support the jury's finding of “zero” damages for appellees' breach of their partnership duties to Bhatia.

A. Standards of Review

In considering a legal sufficiency challenge, we view the evidence in the light most favorable to the fact finding, crediting favorable evidence if reasonable persons could, and disregarding contrary evidence unless reasonable persons could not. City of Keller v. Wilson, 168 S.W.3d 802, 822, 827 (Tex.2005); Port of Houston Auth. of Harris Cnty. v. Zachry Constr. Corp., 377 S.W.3d 841, 859 (Tex.App.-Houston [14th Dist.] 2012, pet. filed). To challenge the factual sufficiency of the jury's findings successfully, Bhatia must establish that the evidence was so weak or the findings were so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. See Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996); Horowitz v. Berger, 377 S.W.3d 115, 122 (Tex.App.-Houston [14th Dist.] 2012, no pet.).

B. Issue One: Going Concern as a Matter of Law

In his first issue, Bhatia contends that as a matter of law, the trial court should have awarded him the fair market value of his interest in the Imaging Center as of September 30, 2003. More specifically, Bhatia asserts that, after that date, he “no longer participated or retained his interest” in the Imaging Center and that this “disassociation” from the partnership was equivalent to either a withdrawal from the partnership under the Texas Revised Limited Partnership Act (TRLPA), an expulsion or transfer of interest under the Texas Revised Partnership Act (TRPA), or a repurchase of his interest under the applicable provisions of the agreement. Tex.Rev.Civ. Stat. art. 6132a–1, §§ 1.01–13.09 (expired Jan. 1, 2010) (TRLPA); id.arts. 6132b–2.02(a) to 2.03(a) (expired Jan. 1, 2010) (TRPA).

Bhatia does not explain how his alleged rights under the TRLPA or the TRPA relate to any of the causes of action he submitted to the trial court below or to the jury or to the evidence introduced at trial. As discussed above, the only claims submitted to the jury were for breach of contract, breach of fiduciary duty, conversion, and misappropriation. Although other claims were included in his live petition, neither the TRLPA nor the TRPA was cited, referenced, or alluded to in that petition. We cannot reverse the trial...