On Appeal from the County Court at Law No. 2 Montgomery County, Texas Trial Cause No. 09-05-04558 CV
The opinion of the court was delivered by: Charles Kreger Justice
Appellants Robert Wilson, Mahesh Kanojia, and Steve McGuire, directors of Texoga Technologies Corporation ("Texoga"), appeal the trial court's judgment holding them jointly and severally responsible for Texoga's indebtedness to Palermo REI, L.P. a/k/a Palermo REI, Ltd. ("Palermo"), which Texoga incurred during a period of time when its corporate charter had been forfeited. We affirm the trial court's judgment.
On February 8, 2008, the Texas Secretary of State issued a forfeiture of Texoga's charter. On May 21, 2008, Texoga and Safe Renewables Corporation ("Safe Renewables") entered into a written lease assignment whereby they assigned their lease interest in certain commercial office space to Legado Resources, LLC. Paragraph 9 of the assignment provides:
Assignor covenants and agrees to pay, hold harmless and indemnify Assignee from and against any and all cost, expense or liability for any compensation, commissions and charge claimed by any broker or agent with respect to the assignment contemplated by this Agreement of the negotiation thereof, including, without limitation, the commission payable to Coldwell Banker Commercial-Ingram Group in an amount equal to four percent (4%), and commission payable to Palermo REI, Ltd. dba Palermo Barr in an amount equal to two percent (2%), of the gross rents payable over the term of the assignment contemplated by this Agreement, to be paid upon execution of this Agreement.
McGuire executed the assignment as an authorized officer of Texoga.
Palermo, a licensed real estate broker, brokered the assignment between Texoga, Safe Renewables, and Legado. In exchange for Palermo's real estate services in securing the lease assignment, Texoga agreed to pay Palermo a two percent commission of the gross rents payable over the term of the assignment. The only document in the record referencing Texoga's agreement to pay Palermo's two percent commission is found in the assignment described above. There is no dispute that Palermo fully performed its duties in securing the lease assignment for Texoga. There is also no dispute that Texoga did not fully pay Palermo's broker fee and still owed Palermo $60,085.54 at the time of trial.
On October 21, 2008, Texoga applied for reinstatement of its charter and the Secretary of State set aside the forfeiture. On May 8, 2009, Palermo filed suit against Texoga, Safe Renewables, Biofuels Power Corporation,*fn1 Wilson, Kanojia, and McGuire seeking to recover the balance owed for the broker fee. Palermo alleged that Texoga and Safe Renewables failed to perform under the assignment when they failed to pay Palermo its full commission. Palermo further alleged Wilson, Kanojia and McGuire were personally liable to Palermo for Texoga's debt under section 171.255 of the Texas Tax Code, as officers and directors of Texoga, as Texoga incurred the debt after its corporate charter had been forfeited and before its corporate privileges were revoked. In response, defendants filed a joint answer generally denying Palermo's allegations. Wilson, McGuire and Kanojia filed a sworn denial alleging they were not liable in the capacity in which they were sued.
On March 15, 2010, Palermo filed a motion for summary judgment against Texoga and Safe Renewables. Texoga and Safe Renewables did not contest the motion and the trial court granted summary judgment in favor of Palermo on April 6, 2010.
Simultaneously, but in a separate motion, Palermo moved for summary judgment against appellants Wilson, Kanojia and McGuire seeking to hold Texoga's directors personally liable for the commission fee pursuant to section 171.255 of the Tax Code. Appellants contested Palermo's motion, asserting that "[t]here is a factual issue under the statutory standard of TEX. TAX CODE §171.255(c)(2) that remains contested." Appellants' response concludes with,
The summary judgment proof tendered by Plaintiff fails to eliminate the fact issue concerning TEX. TAX CODE §171.255(c)(2) safe harbor for a director of a corporation that has suffered a temporary forfeiture of charter for failure to file an annual report and pay whatever franchise taxes may be owed. The Individual Defendants have each left open to themselves this factual defense by virtue of their replies to Plaintiff's First Request for Admissions.
Appellants presented the trial court with no other grounds for denying Palermo's motion for summary judgment. In support of its response in opposition to Palermo's motion, appellants presented a single affidavit signed by Steve McGuire. After a hearing, the trial judge granted summary judgment against appellants. The trial court entered final judgment in favor of Palermo finding Texoga, Safe Renewables, Wilson, Kanojia, and McGuire jointly and severally liable for Palermo's actual damages, interest and attorneys' fees.
Appellants contend the trial court erred in granting Palermo's motion for summary judgment because two fact issues remain concerning the application of section 171.255 of the Tax Code. Specifically, appellants contend there is a fact issue as to their intent to create a debt, and a fact issue as to whether the ...