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Holmes v. Graves

Court of Appeals of Texas, First District

December 10, 2013

STEVE HOLMES, DEBBIE HOLMES, CLINTON HOLMES, DANA ATKINSON, JERRY SMITH, GREG EVANS, PENNY EVANS, AND GARY EVANS, Appellants
v.
JOHN L. GRAVES AND HARPER TRAMMELL, Appellees

On Appeal from the 334th District Court Harris County, Texas Trial Court Case No. 2012-23495

Panel consists of Chief Justice Radack and Justices Higley and Brown.

MEMORANDUM OPINION

Harvey Brown Justice

Steve Holmes, Debbie Holmes, Clinton Holmes, Jerry Smith, Dana Atkinson, and Greg Evans―in their capacity as purported directors and members of the Houston Aeronautical Heritage Society, Inc.―and Penny Evans and Gary Evans―(collectively "Plaintiffs") in their capacity as members of HAHS―bring this interlocutory appeal challenging the trial court's denial of their motion to compel arbitration in the underlying suit against John L. Graves and Harper Trammell (collectively "Defendants") regarding the governance and operation of HAHS. Because we conclude that the trial court did not err by denying Plaintiffs' motion to compel arbitration, we affirm.

Background

The mission of HAHS is to "preserve, renovate and/or restore the original purpose-built airport terminal building known as the Houston Municipal Airport Building and/or The 1940 Air Terminal, and to operate within it, and nearby structures, a museum of civil aviation[.]" The operation and governance of HAHS has been the subject of multiple lawsuits, all of which have been filed in or transferred to the same district court.

In 2011, HAHS, through three of its directors (including Gary Evans), filed a lawsuit against six of its other directors (including Graves and Trammell) seeking to (1) enjoin a special meeting of the Board of Directors called for the purpose of appointing new directors and (2) obtain a declaration that a special meeting of members, rather than a special meeting of the Board, was required for the appointment of new directors under HAHS's bylaws. In its final summary judgment in the 2011 lawsuit, the trial court made the following findings and conclusions:

• HAHS shall take nothing on any of its claims against Graves, Trammell, or the other defendant directors;
• Graves, Trammell, and the other defendant directors were current members of the HAHS Board;
• The bylaws submitted by the defendant directors as part of their pleadings in the 2011 lawsuit were the "current, applicable and effective bylaws that govern the affairs of [HAHS]";[1] and
• The special meeting called by the defendant directors for the purpose of appointing new directors was authorized by the bylaws.

As part of its final judgment, the trial court also vacated an agreed temporary injunction in the 2011 lawsuit that prohibited the calling of special meetings.[2]

The day after the trial court rendered its final judgment in the 2011 lawsuit, Graves, Trammell, and the other defendant directors noticed a special meeting of the Board for the purpose of addressing "[t]he amendment and restatement of the bylaws with immediate effect" and "[c]onsideration of and a vote upon the proposed removal" of the directors who had been plaintiffs in the 2011 lawsuit. The special meeting was called for April 20, 2012. The minutes of the April 20 meeting recount that all directors (including the directors who were plaintiff and defendants in the 2011 lawsuit) were present and there was a quorum. The minutes recount that the following events occurred:

Discussion was opened pertaining to the amended bylaws which have been proposed by the Majority Directors [defendant directors in the 2011 lawsuit]. John Graves made the motion that the amended bylaws be accepted; Oscar Nipper seconded . . . A vote was called to adopt the proposed amended bylaws by Harper Trammell.[[3] The results were 6 in favor (Morris, Trammell, High, Nipper, M. Evans, Graves) and 3 opposed (G. Evans, D. Coats by proxy and K. Coats by proxy [plaintiff directors in the 2011 lawsuit]). The motion to accept the proposed bylaws passed.

A resolution removing the plaintiff directors in the 2011 lawsuit from the Board was also passed, with the same six directors voting in favor of the resolution and the same three directors opposing it.

A quorum of HAHS's members participated in a members meeting the following day at which the directors' actions at the special meeting were ratified, including the ratification and adoption of the amended and restated Bylaws. Relevant to this appeal, the arbitration clause ...


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