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Doonan v. Larry C. Wood, Joy C. Helbing, Woodven, L.P.

Court of Appeals of Texas, Eighth District, El Paso

June 7, 2005

FRANCIS DOONAN, Individually and as Minority Member of RIO GRANDE TOOL & STAMPING, and MICHELE DOONAN, Appellants
v.
LARRY C. WOOD, JOY C. HELBING, WOODVEN, L.P., and WOODVEN TEXAS CORPORATION, Appellees.

          Appeal from the 120th District Court of El Paso County, Texas (TC# 2002-4801)

          Before Barajas, C.J., McClure, and Chew, JJ.

          OPINION

          DAVID WELLINGTON CHEW, JUSTICE

         This is an appeal from a grant of a summary judgment. Appellants sued Appellees for breach of fiduciary duty, conspiracy, and alter-ego for damages. Appellees moved for a no-evidence summary judgment, and it was granted as to all claims. In four issues, Appellants appeal the trial court's granting of the summary judgment in favor of Appellees. We affirm.

         On May 15, 1995, Conrad Moore and Francis G. Doonan formed Rio Grande Tool & Stamping, L.L.C. Mr. Moore owned 51 percent of the interests and Mr. Doonan owned a 40percent interest. Rio Grande was formed to provide custom tooling and precision metal stamping for the maquila industry in Juarez, Mexico. From the onset, Rio Grande was not successful, incurring operating losses of $630, 172 and a debt of $589, 966 between May 15, 1995 and July 31, 1997. In the spring of 1997, Sunwest Bank gave Rio Grande notice that it would not renew Rio Grande's operating line of credit forcing Rio Grande to find new financing. Mr.Moore contacted his long time acquaintance Larry C. Wood.

         Mr. Larry Wood and his brother Donald Wood had recently formed an investment company named Woodven, L.P., (“Woodven”). Woodven is a Texas limited partnership, whose general partner is Woodven Texas Corp. Larry and Donald are the only shareholders of Woodven Texas Corp., and the only limited partners of Woodven. Larry Wood was the president, secretary, treasurer, and director of WoodvenTexas Corp. Joy C. Helbing was the vice president and director of Woodven Texas Corp.

         On October 7, 1997, Woodven made a term loan of $500, 000 and granted a line of credit of $700, 000 to Rio Grande. Mr. Moore and Mr. Doonan offered Woodven an option to purchase 34 percent membership interest in Rio Grande. As security for the loans, Woodven was granted a security interest in all of Rio Grande's assets. Mr. and Mrs. Moore and Mr. and Mrs. Doonan also personally guaranteed the debt.

         On November 6, 1997, Woodven exercised its option to acquire a 34 percent interest in Rio Grande. The equity interests in Rio Grande became: Woodven, L.P. -- 34 percent; Moore -- 33.66 percent; and Doonan -- 32.34 percent.

         Mr. Moore withdrew as an officer of Rio Grande in March 1998. Mr. Moore's personal guaranty was extinguished. Larry Wood was then elected Chief Executive Officer and Joy Helbing was elected Chief Financial Officer of Rio Grande. On September 30, 1998, Mr.Moore's interest in Rio Grande was conveyed to Woodven.

         Mr. Doonan was Rio Grande's Chief Operating Officer. His responsibilities included procuring business through the use of his expertise and skill as a master die and toolmaker utilizing his own designs and running the day to day production of the business. In mid April 2001, Mr. Doonan quit. Almost a year later, Woodven foreclosed its security interest in the assets of Rio Grande and the assets were sold in a private sale to Woodven.

         Woodven then contributed the purchased assets as the capital to form RGTS, L.L.C., a Texas limited liability company, that was wholly owned by Woodven. On September 29, 2003, Woodven sold the assets to an unrelated third party.

         In Issue One, Appellants argue that the trial court erred in granting the Appellees' motion for no-evidence summary judgment when the motion was defective because it contained only global and conclusory statements. Appellants allege that the motion lists the essential elements of the raised causes of action and generally asserts that there is no evidence to support the elements. They allege that “this constitutes the impermissible making of a 'general no-evidence challenge to an opponent's case.'” Appellees argue that the motion was not defective because it specified the elements of each claim lacking evidentiary support.

         Texas Rules of Civil Procedure 166a(i) states in part:

After adequate time for discovery, a party without presenting summary judgment evidence may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. ...

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