Establissement v. Amegy Bank Nat'l Ass'n

• Citation: 525 S.W.3d 875
• Decision Date: 20 June 2017
• Docket Number: NO. 14-16-00457-CV.,14-16-00457-CV.
• Parties: IMMOBILIERE JEUNESS ESTABLISSEMENT, Appellant v. AMEGY BANK NATIONAL ASSOCIATION and Steven J. Pritchard, Appellees
• Court: Texas Court of Appeals

525 S.W.3d 875

IMMOBILIERE JEUNESS ESTABLISSEMENT, Appellant

v.AMEGY BANK NATIONAL ASSOCIATION and Steven J. Pritchard, Appellees

NO. 14-16-00457-CV.

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

Opinion filed June 20, 2017

Lance Christopher Kassab, David Eric Kassab, Houston, TX, for Appellant.

Ruth Ann Brenton, Fred Wahrlich, Houston, TX, R. Michael Casseb, San Antonio, TX, for Appellees.

Panel consists of Justices Boyce, Jamison, and Brown.

OPINION

Martha Hill Jamison, Justice

Appellant Immobiliere Jeuness Establissement brought this derivative lawsuit on behalf of two limited partnerships against appellees Amegy Bank and Steven Pritchard for tortious interference with the partnership agreements, as well as aiding and abetting and civil conspiracy to commit fraud and a breach of fiduciary duty. In two issues, IJE challenges the trial court's granting of appellees' traditional motions for summary judgment on both statute of limitations and substantive grounds. In a cross-appeal, appellees contend the trial court erred in failing to rule on their motion for expenses. We affirm.

Background

IJE was a limited partner in 29 Kuykendahl Road Ltd., which was in turn a limited partner in 9.2 Louetta Road Ltd. Between them, the two partnerships owned two tracts of land in Harris County, Texas that were ultimately developed into a multi-family affordable housing project known as Villages at Louetta Apartments (the "Project"). Radnor Joint Venture, Inc. was the general partner of both partnerships. In 2001 and 2002, Radnor obtained two loans from InterContinental National Bank ("ICNB"), totaling $1.4 million, using the two partnership tracts as collateral. Amegy later succeeded to the interests of ICNB. Pritchard was president of ICNB at the time of the loans and was involved in the approval process.

The proceeds of the loans were allegedly used to enhance the balance sheet of FAS Construction Management, Inc., a company owned by Radnor's president, Michael Beucler, that is unrelated to either of the two partnerships. In November 2003, the loans were refinanced with Texas Capital Bank ("TCB"). The ICNB liens on the tracts were released at that time and liens favoring TCB took their place. In January 2004, Radnor obtained a $2.808 million construction loan for the Project from KeyBank, N.A. and used the proceeds to, among other things, pay off the TCB loan. Again, the TCB liens were released and replaced by liens for KeyBank. The primary purpose of the construction loan was purportedly the development of the two tracts owned by the partnerships.

According to IJE, the two tracts were subsequently transferred from the partnerships to Villages at Louetta Apartments, Ltd., a limited partnership created to develop the Project, and American Opportunity for Housing, a nonprofit corporation involved to obtain tax exemptions. IJE states that the partnerships originally received a $1.8 million note in exchange for the tracts, but this note was apparently later relinquished for an unsecured interest in Villages. According to IJE's pleadings in the present case, partnership assets were ultimately used to repay the KeyBank construction loan, even though approximately $1.4 million of that loan could be traced back to the original loan proceeds used to enhance FAS's balance sheet.

In 2004, IJE hired attorney Howard Cordray to look into the transactions involving the tracts. In response to Cordray's inquiries, lawyers for Radnor represented that the loan proceeds supplied to FAS (using the partnership tracts as collateral) were for a partnership purpose, namely, development of a viable plan for an affordable housing project. Radnor and its lawyers, however, apparently refused to allow Cordray or IJE to see any documentation supporting this claim. In February 2009, IJE sued Radnor, the partnerships, and Villages, seeking to obtain records, including loan documents, indicating whether the loans obtained using the tracts as collateral were for legitimate partnership purposes. IJE later added Beucler and FAS as defendants and alleged Radnor and Beucler may have committed fraud and breached their fiduciary duties. In July 2010, the trial court ordered Radnor to produce the requested documents, and when Radnor failed to do so, IJE subpoenaed the loan records from Amegy. In December 2010, Amegy produced documents which IJE contends revealed that the loan proceeds were used for a non-partnership purpose and that ICNB and Pritchard were aware of this fact at the time the loans were made. Beucler later acknowledged in his deposition the non-partnership use of the proceeds.

Radnor and Beucler agreed to settle the 2009 lawsuit by paying IJE and the partnerships $1.5 million. IJE then brought the present derivative action on behalf of the partnerships against Amegy, Pritchard, and the lawyers that had represented Radnor. After the claims against Amegy and Pritchard were severed from those against the lawyers, the lawyers settled for $442,500. IJE's claims against Amegy and Pritchard are based on the allegation that at the time of the loans, they were aware Radnor was using the two partnership tracts as collateral for non-partnership purposes in violation of the partnership agreements and, thereby, appellees tortiously interfered with the partnership agreements, aided and abetted Radnor's fraud and breach of fiduciary duty, and engaged in a civil conspiracy to commit fraud and a breach of fiduciary duty. As stated above, the trial court granted traditional summary judgment for appellees on both statute of limitations and substantive grounds. It is from this ruling that IJE appeals. The parties also dispute whether the trial court considered the merits of appellees' motion for expenses under Texas Business and Organizations Code section 153.404.

I. Summary Judgment

In its second issue, IJE contends the trial court erred in granting summary judgment favoring appellees on substantive grounds on each of IJE's claims for tortious interference, conspiracy, and aiding and abetting. We will begin by addressing the summary judgment on the tortious interference and conspiracy causes of action and then will turn to a discussion regarding the aiding and abetting cause of action.¹

We review a trial court's grant of summary judgment de novo. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). In a traditional motion for summary judgment, such as was granted here, the movant has the burden of establishing that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Id. (citing Tex. R. Civ. P. 166a(c) ). We consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Mack Trucks, Inc. v. Tamez , 206 S.W.3d 572, 582 (Tex. 2006). Evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary judgment evidence. See Goodyear Tire & Rubber Co. v. Mayes , 236 S.W.3d 754, 755 (Tex. 2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm if any of the independent summary judgment grounds is meritorious. State v. $90,235 , 390 S.W.3d 289, 292 (Tex. 2013).

A. Tortious Interference and Conspiracy

In their motion for summary judgment, appellees challenged IJE's tortious interference and civil conspiracy causes of action by asserting, among other things, that as a matter of law appellees' conduct did not cause any actual damages to the partnerships. See, e.g., Lear Siegler, Inc. v. Perez , 819 S.W.2d 470, 471 (Tex. 1991) (explaining that the element of causation is subject to being conclusively negated in a summary judgment proceeding). Both of these causes of action required proof of proximate causation as an element of the alleged tort.² Proximate cause itself requires proof of both cause-in-fact and foreseeability. Doe v. Boys Clubs of Greater Dallas, Inc. , 907 S.W.2d 472, 477 (Tex. 1995). The test for cause-in-fact is whether the tortious conduct was a substantial factor in bringing about the alleged injury, i.e. , a factor without which the injury would not have occurred. See id. The defendant's conduct was not a substantial factor if it did no more than furnish a condition that made the plaintiff's injury possible. Stanfield v. Neubaum , 494 S.W.3d 90, 97 (Tex. 2016) ; IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason , 143 S.W.3d 794, 799 (Tex. 2004). Even when some modicum of a causal nexus is established, the conduct of the defendant may be deemed too attenuated from the resulting injury to the plaintiff to be a substantial factor in bringing about the harm. Mason , 143 S.W.3d at 799-800. An injury is shown to be foreseeable if a person of ordinary intelligence and prudence would have reasonably anticipated it under the circumstances. Doe , 907 S.W.2d at 478.

While there can be more than one proximate cause of an injury, a new and independent, or superseding, cause may "intervene[ ] between the original wrong and the final injury such that the injury is attributed to the new cause rather than the first and more remote cause." Stanfield , 494 S.W.3d at 97 (quoting Dew v. Crown Derrick Erectors, Inc. , 208 S.W.3d 448, 450 (Tex. 2006) (plurality op.)). Such superseding cause destroys any causal connection between the defendant's tortious conduct and the plaintiff's harm, thus precluding the plaintiff from establishing the defendant's conduct as a proximate cause. See id.

In alleging tortious interference and conspiracy against appellees, IJE has consistently focused on the same causative conduct, asserting essentially that in making the original loans to Radnor and inducing Radnor to do so, ICNB (appellee Amegy's predecessor) and Pritchard (ICNB's...