Appeal from the 201st District Court Travis County, Texas
Trial Court Cause No. D-1-GN-10-003822
consists of: Wright, C.J., Willson, J., and Bailey, J.
M. BAILEY JUSTICE.
appeal concerns the standing of a limited partner to sue both
the general partner and another limited partner after a
failed real estate project. It also involves an application
of the economic loss doctrine to preclude a recovery for
negligent misrepresentation. We affirm in part and reverse
and remand in part.
limited partnership dispute arises out of an unsuccessful
effort to revive a failed real estate development project.
Mary Guerrero-McDonald initially partnered with the
now-deceased Gene Fondren to develop a condominium project at
1701 Lavaca in downtown Austin. This initial project was
called "1701 Lavaca LP." The initial project
stalled due to monetary issues and Fondren's declining
subsequently sought additional investors for the project.
Guerrero-McDonald, Jimmy Nassour, Jim Mattox, and Pike Family
Partnership, LP formed LaVista Partners LP for the purpose of
acquiring and developing the project. Guerrero-McDonald
converted her prior interests in the project into a
thirty-five percent limited partnership interest in the newly
formed limited partnership. The limited partners selected
LaVista Partners - GP, LLC as the general partner of the
limited partnership. H.M. Pike Jr. executed the partnership
agreement on behalf of LaVista Partners - GP, LLC in his
capacity as its manager. Nassour also served as one of the
initial managers of the general partner.
limited partnership failed after being unable to procure
financing to complete the project. Guerrero-McDonald
subsequently sued Appellees, LaVista Partners - GP, LLC (the
general partner), and Nassour (another limited partner) for
breach of contract, breach of fiduciary duty, fraud, and
negligent misrepresentation.The trial court granted
Appellees' motion for summary judgment with respect to
Guerrero-McDonald's claims for breach of contract, breach
of fiduciary duty, and negligent misrepresentation.
case subsequently went to trial on Guerrero-McDonald's
remaining claim for fraud. The trial court imposed a
discovery sanction against Guerrero-McDonald by deeming a
request for admission to be "admitted." The jury
returned a verdict in favor of Appellees on the fraud claim.
The trial court entered judgment that Guerrero-McDonald take
nothing from Appellees. Guerrero-McDonald appeals the trial
court's judgment in five issues.
first three issues concern the claims resolved by summary
judgment. Additionally, Appellees present a cross-point
raising six alternative grounds why the summary judgment
should be upheld. Guerrero-McDonald's final two issues
involve claims resolved at trial.
address the summary judgment issues first. We review a
summary judgment de novo. Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When the trial
court's summary judgment order specifies the ground or
grounds upon which it was granted, we generally limit our
consideration to the ground or grounds upon which it was
granted. See Cincinnati Life Ins. Co. v. Cates, 927
S.W.2d 623, 625-26 (Tex. 1996).
trial court's summary judgment order specified that it
granted Appellees' motion for summary judgment on
Guerrero-McDonald's claims for breach of contract and
breach of fiduciary duty based upon its determination that
she lacked standing to bring the claims. Guerrero-McDonald
challenges these determinations by the trial court in her
first (standing for breach of fiduciary duty claim) and
second (standing for breach of contract claim) issues.
Because Guerrero-McDonald's arguments are the same for
her first two issues, we will address them together.
asserted the issue of standing as a traditional summary
judgment ground. A party seeking a traditional summary
judgment bears the burden of showing that no genuine issue of
material fact exists and that he is entitled to judgment as a
matter of law. Tex.R.Civ.P. 166a(c); Diversicare Gen.
Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005).
Appellees asserted that they were entitled to summary
judgment on Guerrero-McDonald's "breach of contract
claims and breach of fiduciary duty claims because she lacks
standing; the claims she asserts are for alleged injuries
primarily suffered by the Limited Partnership."
Texas Supreme Court recently addressed standing in
Linegar v. DLA Piper LLP (US), 495 S.W.3d
276 (Tex. 2016). "A party's standing to sue is
implicit in the concept of subject-matter jurisdiction and is
not presumed; rather, it must be proved." Id.
at 279 (citing Tex. Ass'n of Bus. v. Tex. Air Control
Bd., 852 S.W.2d 440, 445-46 (Tex. 1993)). "Standing
is a question of law for the court to determine, although
facts necessary to the determination may need to be
determined by the factfinder." Id. Standing is
a matter that concerns the jurisdiction of a court to afford
the relief requested, rather than the right of a plaintiff to
maintain a suit for the relief requested. Sneed v.
Webre, 465 S.W.3d 169, 186 (Tex. 2015) (citing
Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71,
76-77 (Tex. 2000)). As noted by the court in
In Texas, the standing doctrine requires a concrete injury to
the plaintiff and a real controversy between the parties that
will be resolved by the court . . . . The plaintiff must be
personally injured-he must plead facts demonstrating that he,
himself (rather than a third party or the public at large)
suffered the injury . . . . [The injury] must be concrete and
particularized, actual or imminent, not hypothetical . . . .
[T]he plaintiff's alleged injury must be fairly traceable
to the defendant's conduct.... [And] the plaintiff's
alleged injury [must] be likely to be redressed by the
Linegar, 495 S.W.3d at 279 (quoting Heckman v.
Williamson Cty., 369 S.W.3d 137, 154-55 (Tex. 2012)).
The standing analysis begins with determining the nature of
the wrong being alleged and whether there was a causal
connection between a defendant's conduct and the injury
caused by the alleged wrong. Id. Standing is
assessed on a claim-by-claim basis. Id.
court in Linegar relied on its earlier decision in
Wingate v. Hajdik, 795 S.W.2d 717 (Tex. 1990), and
its progeny dealing with stockholder standing. 495 S.W.3d at
279. In Wingate, the court stated the general rule
that "[a] corporate stockholder cannot recover damages
personally for a wrong done solely to the corporation, even
though he may be injured by that wrong." 795 S.W.2d at
719. The general rule does not preclude a stockholder from
recovering damages for wrongs done to the stockholder
individually, provided the wrongdoer violated a duty owed
directly by the wrongdoer to the stockholder. Id.
"However, to recover individually, a stockholder must
prove a personal cause of action and personal injury."
addressed stockholder standing in a corporate context.
However, its holding has been relied upon in other contexts
when an individual stakeholder in another form of a legal
entity seeks to recover personally, including situations
where a limited partner attempts to bring a claim
individually. See, e.g., Nauslar v. Coors
Brewing Co., 170 S.W.3d 242, 250 (Tex. App.-Dallas 2005,
no pet.) (citing Wingate for the proposition that
"[a]n individual stakeholder in a legal entity does not
have a right to recover personally for harms done to the
legal entity"). Appellees rely upon a line of these
cases from the Dallas Court of Appeals addressing the
standing of a limited partner to assert a claim individually.
See Hall v. Douglas, 380 S.W.3d 860, 873-74 (Tex.
App.-Dallas 2012, no pet.); Nauslar, 170 S.W.3d at
involved a limited partner who sued the limited partnership
and other limited partners for breach of the partnership
agreement and breach of fiduciary duty. 380 S.W.3d at 872.
The limited partner sought "disgorgement" of
partnership funds that he alleged were improperly transferred
to a third party to pay non-partnership debts. Id.
at 873. The court in Hall began its analysis of
standing by noting that "[a] person has standing to sue
when he is personally aggrieved by the alleged wrong."
Id. at 872 (citing Nootsie Ltd. v. Williamson
Cty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996)).
"Without a breach of a legal right belonging to a
plaintiff, that plaintiff has no standing to litigate."
Id. at 873. "Only the person whose primary
legal right has been breached may seek redress for an
court held in Hall that "[a] limited partner
does not have standing to sue for injuries to the partnership
that merely diminish the value of that partner's
interest." Id. (citing Swank v.
Cunningham, 258 S.W.3d 647, 661 (Tex. App.- Eastland
2008, pet. denied); Nauslar, 170 S.W.3d at 250-51).
The court held: "To distinguish between injuries
suffered by a partnership, for which [the limited partner]
lacks standing, and those suffered directly by [the limited
partner], we must focus on the nature of the alleged
injury." Id. at 874. The limited partner must
be personally aggrieved in order to have standing to bring a
claim individually. Id. (citing Nauslar,
170 S.W.3d at 249-51). The court concluded that, because the
limited partner asserted that the defendants misappropriated
the limited partnership's funds, the alleged harm was to
the limited partnership alone, even though the economic
impact of the alleged wrongdoing may have brought about
reduced earnings, salary, or bonus to the limited partner.
Id. at 873.
Texas Supreme Court subsequently addressed
Hall's analysis in In re Fisher, 433
S.W.3d 523, 527 (Tex. 2014). Fisher also involved a
limited partner seeking to recover damages individually in
connection with a failed business venture. 433 S.W.3d at
525-27. The defendants in Fisher relied upon
Hall to assert that the plaintiff did not have
standing to assert his claims. Id. at 527. The court
acknowledged Hall's holding that "[a]
limited partner does not have standing to sue for injuries to
the partnership that merely diminish the value of that
partner's interest." Id. (quoting
Hall, 380 S.W.3d at 873). However, the court also
noted that Hall ...