Dandachli v. Active Motorwerks, Inc.
| Decision Date | 23 July 2021 |
| Docket Number | 03-19-00494-CV |
| Parties | Hassan Dandachli, Appellant v. Active Motorwerks, Inc. and Mario Garcia, Appellees |
| Court | Texas Court of Appeals |
FROM THE 200TH DISTRICT COURT OF TRAVIS COUNTY NO D-1-GN-17-002153, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING
Before Justices Goodwin, Kelly, and Smith.
This is an appeal from final judgment disposing of a suit arising from a business partnership between Hassan Dandachli and Mario Garcia. Dandachli, awarded $30, 621.87 in damages and possession of certain equipment once used by the partnership raises multiple issues on appeal. We will affirm in part reverse in part, and remand the case.
The facts material to the disposition of this appeal are largely undisputed. In early 2013, Dandachli and Garcia, who were both well-respected professionals in the Austin automotive industry, decided to join forces to own and operate "a high-end automotive repair shop" known as Active Motorwerks, Inc. To memorialize this decision, Dandachli drafted a Partnership Agreement requiring that each partner "provide their full-time services and best efforts on behalf of the partnership" and indicating that the partners would "each have a 50% share of Active Motorwerks and a 50% share of net profits." The Partnership Agreement further stipulated that the partnership would "commence on February 5th, 2013[, ] and [would] end only on mutual agreement between the parties involved or mutual dissolution." Although not included in the Partnership Agreement, the partners had apparently reached an understanding that Garcia would oversee the work in the garage while Dandachli would oversee front-office operations including handling administrative matters and bookkeeping.
Dandachli was the primary financial contributor to the partnership lending Active Motorwerks money when necessary and obtaining reimbursement when possible. In early 2015, Active Motorwerks began operating out of a facility that Dandachli owned and had remodeled, at his own expense, to suit the purpose. Later in 2015, Active Motorwerks and Dandachli executed a Lease Purchase Agreement providing that Active Motorwerks would lease certain equipment from Dandachli for a sum of $2, 895 per month. When Active Motorwerks failed to make its monthly payments, Dandachli sold approximately $40, 000 of the equipment in December of that year.
In March of 2017, Dandachli moved to Lebanon. Although Dandachli had assured Garcia that Dandachli could and would satisfy his obligations under the Agreement from abroad, his move strained the partnership. Garcia felt as though he had been "abandon[ed]" and "was doing more than [he] bargained for," while Dandachli was frustrated by an increasing number of customer complaints that the business was no longer operating efficiently or professionally. The two partners began negotiations for Garcia to buy out Dandachli's share of the partnership but never reached an agreement.
The dispute between the partners reached a breaking point in May of 2017. Early in the month, Dandachli learned that Garcia had moved equipment owned by Active Motorwerks 2 and Dandachli to an unknown location. On May 10, in an apparent attempt to prevent any further loss, Dandachli asked his agents in Austin to change the locks on the Dandachli-owned facility from which Active Motorwerks was operating. Dandachli then refused to allow Garcia access to the facility or to any equipment or vehicle therein. Later the same day, Dandachli attempted to redirect $22, 000 in Active Motorwerks funds to his personal bank account. Garcia received notice of the attempted transfer, stopped payment, and then removed all remaining funds to an account that only he could access.
By May 15, Garcia was still without access to the Active Motorwerks facility and had eliminated Dandachli's digital access to the accounting and administrative software used to manage Active Motorwerks. Garcia then used Active Motorwerks's email account to contact over 800 current and former Active Motorwerks customers, notifying them that "technical issues" necessitated a change in the business's phone number and email address. The notice provided Garcia's cell phone number and his personal email address as the only means of contacting Active Motorwerks. Garcia also revised Active Motorwerks's social media to reflect the change.
Meanwhile, and unbeknownst to Dandachli, Garcia had made plans to operate a new automotive shop, which Garcia would ultimately register as Active Euroworks, LLC, from a facility in Pflugerville. When customers or potential customers would attempt to contact or locate Active Motorwerks, Garcia or Active Motorwerks's online materials would direct them to the Active Euroworks location. Garcia later designed a logo for Active Euroworks nearly identical to the one used by Active Motorwerks.
On May 17, at Garcia's direction, Active Motorwerks sued Dandachli for breach of contract and violations of the Texas Property Code provisions governing commercial landlordtenant relationships. See Tex. Prop. Code § 93.002(c) (enumerating limited circumstances allowing for lock out). Active Motorwerks also sought a temporary restraining order prohibiting Dandachli from interfering with Garcia's access to the facility. A week later, the district court issued a temporary injunction ordering Garcia to return all equipment and monies belonging to Active Motorwerks and prohibiting him from using the name "Active Motorwerks" in association with his operation of his Pflugerville automotive shop.
Dandachli filed a counterpetition on his own behalf and derivatively on behalf of Active Motorwerks, naming both Garcia and Active Euroworks as defendants. On his own behalf and against Garcia, Dandachli alleged breach of the Partnership Agreement and breach of fiduciary duty. On behalf of Active Motorwerks and against Garcia, Dandachli alleged money had and received, breach of fiduciary duty, and tortious interference with business relations. On behalf of Active Motorwerks and against both Garcia and Active Euroworks, Dandachli alleged tortious interference with contract, misappropriation of trade secrets, trademark infringement, and unfair competition. Also on behalf of Active Motorwerks, Dandachli pleaded aiding and abetting breach of fiduciary duty against Active Euroworks. As relief, Dandachli and Active Motorwerks sought damages, exemplary damages, pre- and post-judgment interest, attorney's fees and costs, and an injunction prohibiting "the further self-dealing, trade secret misappropriation, and service mark infringement by Garcia and Active Euroworks."
In response to the counterpetition, Active Motorwerks amended its petition to add Garcia as a plaintiff, to delete the claim brought under the Property Code, and to allege theories of breach of contract, breach of fiduciary duty, and unjust enrichment against Dandachli. As relief, Garcia and Active Motorwerks sought damages, pre- and post-judgment interest, attorney's fees and costs, and a declaration "that Dandachli has withdrawn as partner under the Partnership Agreement, that the Partnership Agreement is terminated, and that the assets and cash of the partnership shall be used to pay all creditors, with any remaining amounts to be distributed to the partners."
The case was tried to the bench. On the first day of trial, Dandachli nonsuited the tortious interference, misappropriation, and trademark-infringement claims. After Garcia rested, the district court granted a directed verdict for Danchachli on Garcia's claim of unjust enrichment. At the end of trial, the district court then rendered final judgment finding:
In accordance with those findings, the district court ordered:
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