United States District Court, S.D. Texas, Victoria Division
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS'
MOTIONS TO DISMISS
W. HEAD, JR. SENIOR UNITED STATES DISTRICT JUDGE.
commercial lawsuit is one of several (filed in both state and
federal court) involving the construction of the TexInn, a
hotel in Cuero, DeWitt County, Texas. Plaintiff Gaetan
Pelletier claims hotel ownership and seeks various damages
allegedly caused by faulty plumbing installed by Defendants
Victoria Air Conditioning, Ltd. ("VAC") and its
alleges liability for (1) breach of contract; (2) negligence;
(3) negligence per se; (4) gross negligence; (5)
common law fraud and fraudulent inducement; (6) fraud by
nondisclosure; and (7) conspiracy. For each of these causes
of action, Plaintiff seeks damages in excess of $75, 000 for:
(1) lost revenues from the delay in opening the TexInn hotel
and (2) the costs of repair to the building and replacement
of the allegedly faulty plumbing.
is a citizen and resident of California. Defendants VAC,
Lloyd Boedeker, Warren Heilker, Gay Heilker, Benjamin F.
Heilker, Donald H. Anderson, and Mario Ledesma are all
citizens and residents of Texas. The individual Defendants
are current and former employees or officers of VAC. This
Court has diversity jurisdiction. 28 U.S.C. § 1332(a).
Rule 12(b)(1) motion, Defendants have challenged Plaintiffs
standing to bring these claims. Fed.R.Civ.P. 12(b)(1). The
issue is his ownership of the hotel. If he is not the owner,
he is not the proper party to bring this lawsuit. See
Schwartzott v. Etheridge Prop. Mgmt., 403 S.W.3d 488,
499 (Tex. App. 2013) (holding that plaintiffs lacked standing
to sue for damaged property they did not own);
Develo-cepts, Inc. v. City of Galveston, 668 S.W.2d
790, 794 (Tex. App. 1984) ("Without an interest in the
property, appellant had no legal right to be breached, and
therefore, had no standing to challenge zoning decisions
concerning that property."). "If a plaintiff lacks
standing to bring a claim, the Court lacks subject matter
jurisdiction over the claim and dismissal under Federal Rule
of Civil Procedure 12(b)(1) is appropriate." In re
Enron Corp. Sec., Derivative & ERISA Litig., 279
F.R.D. 395, 403 (S.D. Tex. 2011) (citations omitted).
"[A] plaintiff generally must assert his own legal
rights and interests, and cannot rest his claim to relief on
the legal rights or interests of third parties."
Superior MRI Servs., Inc. v. All. Healthcare Servs.,
Inc., 778 F.3d 502, 504 (5th Cir. 2015) (quoting
United States v. Johnson, 632 F.3d 912,
919-20 (5th Cir. 2011)). When a defendant factually
challenges ownership of legal rights by submitting evidence,
the plaintiff must prove to the Court his own interest in the
legal claims of his suit and must do so by a preponderance of
the evidence. Superior MRI Servs., Inc., 778 F.3d at
504. If he fails to do so, he has no standing and his suit
must be dismissed. Id.
on Plaintiffs pleadings and the evidence in the record,
Defendants contend that Plaintiff lacks standing to bring his
claims against them because any claims would belong to
Plaintiffs limited liability companies, not Plaintiff as an
individual. The limited liability companies of Plaintiff s
Cuero project are:
(1) Pelletier Management & Consulting, LLC
("PMC"), which Plaintiff describes in this suit as
"a Colorado Limited Liability Company and...the land
owner on which the improvements of the project are
(2) TexInn, LLC, a limited liability company formed under
Texas law which Plaintiff alleges in this suit "manages
the TexInn project in part and [which] is designated to own
and operate the [hotel] business."
(3) Q.I. Wholesale, Lumber LLC, a limited liability company
formed under Texas law which Plaintiff claims in this suit is
"one of the building material purchasing agents for the
TexInn Project." Plaintiff is a member of Q.I. Wholesale
Lumber, LLC and TexInn, LLC, and the chief executive manager
of Pelletier Management & Consulting, LLC. It is apparent
to the Court that Plaintiff is the primary actor of each of
the limited liability companies. On May 25, 2017, the Court
(Hanks, J., presiding) ordered the parties to engage in
discovery related to Plaintiffs standing. The parties have
submitted substantial documentary evidence bearing on the
ownership of the TexInn hotel. The Court also held a motion
hearing on January 30, 2018 during which Plaintiff testified
under oath and Defendants submitted further documentary
public record for the TexInn hotel shows no ownership in
Plaintiff. In the first instance, general warranty deed
#85582, dated February 10, 2012, conveys title of the land
where the TexInn is built from grantors David and Nancy
Calhoon to grantee PMC. See Vol. 407, Pages 206-211,
Deed Records, DeWitt County, Texas. (D.E. 37-1, Pages 38-43).
Likewise, DeWitt County Appraisal District records through
2017 name PMC as the owner of the land, valued at $146, 180,
and owner of the improvements, valued at $1, 255, 010. (D.E.
37-1, Pages 56-59).
deeds of trust to secure loans for the hotel's
construction, Pelletier as chief executive manager signed
three deeds of trusts each on separate occasions declaring
that PMC was the owner of the property "including any
improvements": (1) in deed of trust #108081, dated
February 25, 2015, PMC pledged that it owned the land
"including any improvements" to secure a loan of
$2, 000, 000 (D.E. 37-1, Pages 60-65); (2) in deed of trust
#113287, dated April 12, 2016, PMC again made such
representation of ownership in PMC to secure a loan of $500,
000 (D.E. 37-1, Pages 66-70); (3) in deed of trust #116974,
dated March 31, 2017, PMC again made the same statement of
ownership in PMC to secure a loan of $1, 000, 000 (D.E. 37-1,
Pages 71-77). This last deed of trust was signed by Pelletier
after he filed this suit claiming he was the owner of the
hotel. These mortgages contradict Pelletier's personal
claims to owning the improvements.
troubling are claims in a state of Texas lawsuit. On
September 23, 2016, Q.I. Wholesale Lumber, LLC and TexInn,
LLC brought suit against VAC and Boedeker in the 267th
District Court in DeWitt County, Texas claiming the same
damages arising from the same events as this lawsuit.
Plaintiffs limited liability companies alleged that they were
"the owners of the TexInn hotel." (D.E. 37-1, Page
3). Plaintiff made the decision to bring the DeWitt County
lawsuit and retain counsel. When counsel withdrew, the state
district judge ordered the plaintiffs to enlist counsel and
admonished that limited liability companies could not proceed
pro se. Plaintiff testified that he decided to
abandon the state suit. After Plaintiffs limited liability
companies failed to hire counsel or further prosecute the
case, the district judge dismissed Q.I. Wholesale Lumber, LLC
and TexInn, LLC's claims, but entered default judgment on
VAC's counterclaim against the state plaintiffs.
this federal suit, and appearing pro se, Plaintiff
claims hotel ownership for himself-not his limited liability
companies. Plaintiff clarifies that he owns the
"hotel" itself, which the Court takes to mean the
building (its physical manifestation of steel, concrete, and
lumber) as opposed to the "hotel business" of
TexInn, LLC. Plaintiff further explained that it is his
practice to use the limited liability companies, as the
organizational structures here and at other properties, to
develop his hotel projects. Income tax advantages are the
motivation for using limited liability companies.
his burden of proving to the Court that he is the owner of
the hotel, Plaintiff offers one document, entitled "Land
Lease Agreement." The lessor is PMC, signed by
Plaintiffs wife, Nancy Pelletier, on behalf of lessor; ...