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Butt v. Ali

Court of Appeals of Texas, Fourteenth District

March 14, 2017

HASEEB A. BUTT, Appellant
v.
AMEEN ALI, CPA, Appellee

         On Appeal from the 61st District Court Harris County, Texas Trial Court Cause No. 2012-26411

          Panel consists of Chief Justice Frost and Justices Boyce and Christopher.

          MEMORANDUM OPINION

          Kem Thompson Frost Chief Justice.

         A member of a limited liability company alleged that a company-hired accountant used the wrong member-ownership percentages in preparing the company's tax returns. The member sued the accountant for breach of contract, breach of the duty of good faith and fair dealing, and negligence. The trial court granted summary judgment in favor of the accountant on all of the claims. We affirm.

         I. Background

         Appellant Haseeb A. Butt is a member, along with Sajid Khan, in Duncanville Real Estate, LLC, a limited liability company formed in late 2007. Butt asserts that he and Khan each own 50% of Duncanville. Appellee Ameen Ali, Duncanville's outside accountant, prepared the company's 2007 tax year return, showing Khan as an 85% member and Butt as a 15% member. When Butt saw that the tax return reflected the 85/15 split, he told Ali that Butt and Khan each owned 50% in Duncanville.

         Butt filed suit against Khan in 2010, and the two members later settled the lawsuit. While that lawsuit was pending, Butt asked Ali for information about the 85/15 split, including the documentation Ali received from Khan supporting the 85/15 split and whether Ali had corrected the 2007 year tax return. Butt also asked Ali to provide Butt with the 2008 year tax return, the paperwork used to file the 2007 and 2008 returns, and all the paperwork Khan had provided to Ali to prepare the 2009 return. According to Butt, Ali did not respond to Butt's requests and instead helped Khan by hiding the information Ali had in his possession. Butt later repeated his requests to Ali and, again, Ali did not respond.

         Butt filed a complaint against Ali with the Texas State Board of Pubic Accountancy. According to Butt, Ali responded to the complaint by producing (1) a set of meeting minutes reflecting the 85/15 split and (2) a Small Business Administration loan application Khan had signed reflecting an 85/15 split. In 2012, Butt retained another accounting firm to prepare and file corrected tax returns.

         Butt filed suit against Ali, asserting claims for breach of contract, breach of the duty of good faith and fair dealing, and negligence. Ali answered the suit and sought sanctions against Butt, asserting that Butt's suit was groundless, brought in bad faith, and brought for the purpose of harassment because the Accountancy Board dismissed Butt's complaint with no action having been taken.

         No-Evidence Summary Judgment

         Ali filed a no-evidence motion for summary judgment, asserting that there was no evidence of the essential elements of Butt's claims for breach of contract, breach of the duty of good faith and fair dealing, and negligence. Butt responded to Ali's no-evidence motion for summary judgment. The trial court granted the motion as to Butt's claims for breach of contract and breach of the duty of good faith and fair dealing, but denied the motion as to the negligence claim.

         Traditional Summary Judgment

         Twenty months later, Ali filed a traditional motion for summary judgment on Ali's claim for negligence in providing tax and accounting services. Butt did not file a response to Ali's traditional motion for summary judgment, and the trial court granted it, disposing of the only remaining claim. The trial court, observing that Ali's no-evidence motion for summary judgment had been granted on Butt's other claims, rendered a final judgment.

         Motion for ...


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