Court of Appeals of Texas, Seventh District, Amarillo
Appeal from the 251st District Court Potter County, Texas
Trial Court Nos. 106, 839-C, 107, 650-C, Honorable Ana
QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
QUINN CHIEF JUSTICE.
Poole appealed from the trial court's judgment denying
her recovery upon her counterclaims against her two children,
Danny Poole and Jayme Poole Rittenberry, removing her as
trustee of her children's trusts, ordering her to return
monies taken from a partnership, and assessing attorney's
fees against her. Apparently, mother and children had a
difficult relationship. The underlying dispute generally
concerned a family limited partnership known as Entrania
Springs L.P. Its general partner was Poole IV, Inc., whose
management consisted of Danny and Jayme. In turn, 99.5% of
the limited partnership was owned or controlled by Karen,
through various means. For reasons superfluous to this
opinion, Poole IV and Entrania secured a loan from AXA
Equitable Life Insurance Company for approximately $9.9
million. Repayment of that debt was secured by realty of the
limited partnership. Karen purportedly did not know of the
loan and objected upon discovering it. She also undertook
various actions in response, including the removal of funds
from various family entities or businesses. Danny, Jayme, and
various family businesses sued her alleging causes of action
sounding in breached fiduciary duties, trespass, theft, civil
conspiracy, and unjust enrichment. So too did they seek
declaratory relief. Karen counterclaimed, alleging among
other things claims of breached fiduciary duty against her
children. The facts underlying these claims were tried to a
jury which ultimately found in favor of Danny and Jayme.
Judgment was entered upon the verdict, and Karen appealed.
issues pend for our review. We affirm.
One and Two
the first two issues, Karen avers that the "trial
evidence unequivocally prove[d] that Danny Poole and Poole IV
breached their duties to Entrania Springs and failed to
comply with the Entrania Springs partnership agreement."
Each is based upon the belief that the borrowers were
obligated under the limited partnership agreement to obtain
her consent to the loan and security agreement, which consent
she never gave. We overrule the issues.
specific provisions of the limited partnership agreement
allegedly establish the accuracy of her contentions. The
provisions in question state as follows:
Partnership Interest Pledge or Encumbrance. No Partner may
grant a security interest in or otherwise pledge,
hypothecate, or encumber his interest in this Partnership or
such Partner's distributions without 70 Percent in
Interest of Limited Partners. It is understood that the
Partners are under no obligation to give consent nor are they
subject to liability for withholding consent. [XIII.C. of the
Entrania Springs Partnership Agreement]
Restrictions on General Partner. The General Partner will not
have the authority to enter into any of the following
transactions without the consent of 70 Percent in Interest of
the Limited Partners/Unanimous Consent: . . . (5) make,
execute, or deliver any assignments for the benefit of
creditors, or on the Assignee's promise to pay the debts
of the Partnership. [VII.F.5. of the Entrania Springs Limited
these issues requires us to construe the meaning of each
provision. In construing them, our primary goal "is to
ascertain and effectuate the intent of the parties to the
agreement" by reading "the instrument as a whole
and accord[ing] its language its plain grammatical meaning
unless doing so defeats the parties' intent,"
Renda v. Erikson, 547 S.W.3d 901, 913 (Tex.
App.-Amarillo 2018, pet. granted), or the contract itself
shows that the words were used in a technical or different
sense. Whittington v. Green, No. 07-15-00102-CV,
2016 Tex.App. LEXIS 13533, at *15 (Tex. App.-Amarillo Dec.
20, 2016, pet. denied) (mem. op.).
the first provision, we see that it refers to
"partners" granting security interests or
encumbrances. The subject of those encumbrances is the
partner's or his interest in this Partnership or
such Partner's distributions (Emphasis added).
"[H]is" interest in and his distributions from the
partnership refer to the property rights or interests which
the partner may have in the partnership itself. Indeed, our
jurisprudence has long recognized that a partner does not own
a specific interest in particular chattel or property of a
partnership. Sherk v. First Nat'l Bank of
Hereford, 206 S.W. 507, 509 (Tex. Comm'n App. 1918,
judgm't adopted). What is owned is a right to receive
distributive shares of the partnership's profits and
surpluses. Stanley v. Reef Sec, Inc., 314 S.W.3d
659, 664 (Tex. App.-Dallas 2010, no pet.). The aforementioned
section of the limited partnership agreement reflects that
right by prohibiting a partner from encumbering his interest
in his distributive shares of partnership profits or
surpluses without approval.
Danny nor Poole IV pledged or otherwise encumbered his or its
own respective interest in any partnership, that is, in their
own respective right to receive distributive shares of
partnership profits or surpluses. The property being pledged
or encumbered was not a partnership interest as we know that
term to mean. It consisted of realty apparently owned by
Entrania, the limited partnership. Consequently, neither
Poole IV nor Danny had ...