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Nnabugwu v. Cos-Okpalla

Court of Appeals of Texas, Fifth District, Dallas

October 16, 2019


          On Appeal from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-14-12053

          Before Justices Myers, Osborne, and Nowell.



         Ezi Nnabugwu brings this appeal from the trial court's judgment in favor of Chuma Cos-Okpalla, Leonard Nwonumah, Anderson Obiagwu, Kingsley Nwasuruba, and Bonny Uwakweh, individually and derivatively on behalf of Enyimba Social Club U.S.A., Inc. The trial court awarded appellees $30, 000 in actual damages, $10, 000 for exemplary damages, and attorney's fees. The trial court also ordered appellant to turn over a trademark he had applied for on behalf of Enyimba Social Club, and the court enjoined appellant from conduct that interfered with the club. Appellant brings five issues on appeal contending the trial court abused its discretion by (1) awarding actual damages of $30, 000, (2) awarding exemplary damages of $10, 000, (3) awarding attorney's fees through trial of $21, 075, (4) ordering appellant to turn over the trademark to the club, and (5) granting the permanent injunction against him. We affirm the trial court's judgment.


         Enyimba Social Club is a for-profit Texas corporation organized as a social club for the purpose of aiding people from the city of Aba in Nigeria by bringing them together, providing social events and gatherings, and to "support them in times of brotherhood." In 2014, the club had chapters in Dallas, Austin, Houston, Atlanta, and Chicago.

         The club is governed by its National Executive Council (NEC), which the club's constitution states is the "decision making body of the club." The NEC consists of members selected by each chapter with the number of members from a chapter proportionate to the size of the chapter. The officers of the NEC include the president, vice-president, secretary, treasurer, and public relations officer. The president is the club's principal officer. He is a signatory to the club's bank accounts and approves the disbursement of the club's funds. The constitution provides that the president has "the power to authorize expenses up to $500.00 annually without consulting cabinet members." Amounts "in excess of $500.00 shall require 2/3 approval of NEC members." The officers are elected at the club's national convention held every three years. The terms of the current NEC officers end at the beginning of the convention, and the officers elected during the convention are sworn in. Only members of the NEC may vote in the election of the NEC officers.

         Although the NEC is the club's decision-making body, the constitution gives the club's general assembly "the sole right to reject or reverse any enactment, decision, report or recommendation of NEC."

         The club also has a board of directors consisting of one member from each chapter. The constitution provides that the board's functions include acting "as the co-coordinating authority on Enyimba affairs," supporting the NEC and reviewing its performance, approving the budget for NEC events, and undertaking studies and researching the urgency of matters brought to its attention by the chapters or the NEC. The board's members also conduct the club's election of the NEC officers.

         This case concerns the events and their aftermath at the club's national convention on July 12, 2014. Appellant, who was from the club's Austin chapter, was the NEC president before the convention, and his term and the term of the other NEC officers ended as the convention began. Appellant was running for re-election as president against Victor Okereke from the Houston chapter. When the votes were tallied, the secretary of the board of directors announced appellant had twelve votes and Okereke had eleven. Appellees Cos-Okpalla, Nwonumah, and Nwasuruba, who were from the Houston and Dallas chapters, questioned whether one of the voters from the Austin chapter, Godfery Emeribe, was a member of the NEC. The board's secretary, who also was from the Austin chapter, stated that Emeribe was an NEC member. When Emeribe was asked whether he was a member of the NEC, he admitted he was not but stated he was voting on behalf of an NEC member who had to leave the convention. The constitution states, "No member shall be allowed to vote or be voted for in absentia." After Emeribe admitted he was not an NEC member, the general assembly decided that the presidential election would be canceled. The general assembly determined that the newly elected vice-president would be acting president until a new presidential election could be held, and the assembly gave him and the NEC thirty days to come up with a plan for electing a president.[1] The newly elected officers were sworn in that night.

         Six days later, appellant sent a letter to the board of directors stating the board should not go to the expense of holding a new election but should declare him to be the winner of the election at the convention. Appellant also sent letters to the officers stating he was president and that all decisions had to be routed through him. Appellant closed one of the club's bank accounts and moved the money to another bank. Testimony about the amount of money appellant moved varied from $20, 000 to $28, 000.

         The NEC held the second presidential election on September 19, 2014. Appellant did not attend, and Okereke was elected and sworn in as president of the club.

         After these events, there was a split in the club. Some members recognized appellant as president and followed him as he set up a separate governing body for the club, and others stayed with the officers elected at the convention and with Okereke as president. Although the club already had a website, appellant created another website in the club's name that stated he was the president.[2]

         Appellant then hired a lawyer, who filed suit in October 2014 in the club's name against appellees in their individual capacities. The suit alleged appellees had filed false statements with the Texas Secretary of State identifying the club's registered agent and board of directors. Amongst other claims, the suit sought a declaratory judgment that appellees had no authority to act on behalf of Enyimba Social Club.

         The next year, appellant's lawyers sent cease-and-desist letters to the Dallas and Houston chapters to stop using the club's name and logo. Appellees then filed suit against appellant alleging his term as president ended on July 12, 2014 and that he refused to turn over the club's assets. Appellees sought declaratory judgments that appellant was not president, that Okereke was president, and that appellant lacked authority to act on the club's behalf. They also brought causes of action for conversion, money had and received, and breach of fiduciary duty for appellant's closing the club's bank account, moving the money to another bank, and refusing to provide an accounting for the funds. They also sought injunctive relief and attorney's fees.

         Before trial, appellant nonsuited the claims he brought in the club's name against appellees.

         The case was tried before the court. The court rendered judgment for appellees awarding them $30, 000 for actual damages, $10, 000 for exemplary damages, $21, 075 for attorney's fees through trial, and additional amounts for appellate attorney's fees. The trial court did not make any declaratory judgments.


         Appellant's issues contend the evidence is legally and factually insufficient to support the trial court's judgment.

         In his arguments, appellant complains that the trial court did not file findings of fact and conclusions of law. Appellant timely requested findings of fact and conclusions of law, but the trial court did not file them. To preserve his request for findings of fact and conclusions of law, appellant had to file notice of past due findings of fact and conclusions of law within thirty days of the original request. See Tex. R. Civ. P. 297. Appellant did not do so. Accordingly, he waived any complaint that the trial court did not file findings of fact and conclusions of law. In re W.C.B., 337 S.W.3d 510, 513 n.2 (Tex. App.-Dallas 2011, no pet.).

         When no findings of fact and conclusions of law were properly requested or filed, it is implied that the trial court made all findings necessary to support its judgment. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990) (per curiam); Niskar v. Niskar, 136 S.W.3d 749, 753 (Tex. App.-Dallas 2004, no pet.). The judgment will be upheld on any legal theory that finds support in the evidence. Niskar, 136 S.W.3d at 754.

         We review the implied findings of fact for legal and factual sufficiency, and we review the trial court's implied legal conclusions de novo. In re M.P.B., 257 S.W.3d 804, 808 (Tex. App.- Dallas 2008, no pet.). When addressing a legal sufficiency challenge, we view the evidence in the light most favorable to the challenged finding, crediting favorable evidence if a reasonable fact-finder could and disregarding contrary evidence unless a reasonable fact-finder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). Anything more than a scintilla of evidence is legally sufficient to support the finding. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). In a factual sufficiency review, we view all the evidence in a neutral light and set aside the finding only if the finding is so contrary to the overwhelming weight of the evidence such that the finding is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam); Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838, 842 (Tex. App.-Dallas 2011, no pet.).


         In his first issue, appellant contends the trial court abused its discretion by awarding appellees actual damages of $30, 000. Appellant argues the trial court should not have awarded appellees any damages because the board of directors directed him to move the club's money to another bank and spend the money on the attorney's fees and expenses for bringing this lawsuit. Appellant argues that his actions benefitted the club. The parties presented two different versions of what happened.

         Under appellees' version, appellant was not president after his term ended at the beginning of the convention. The presidential election at the convention was voided by the general assembly because of the illegal vote cast by Emeribe, and the vote for the president was postponed. Cos-Okpalla testified that people from the Austin chapter said Emeribe voted the same way the absent member would have voted; however, Cos-Okpalla said the vote was by secret ballot, so there was no way to know how Emeribe voted or how the absent member would have voted. When the second election was held on September 19, appellant was not elected president. Therefore, although appellant was a member of the NEC, he was not an officer, and he had no authority to access the club's bank account or to spend the club's money.

         The NEC sent appellant a letter demanding that he return the money, but he refused, stating he had closed the account at the behest of the board of directors and that he had turned the money over to the board. Cos-Okpalla testified he did not know what appellant had done with the money, but he had heard appellant had spent all the money on attorneys and litigation expenses. Appellant set up a parallel governing structure within the club with himself as president. He set up a parallel website using the club's name. He also obtained a federal registered trademark for the name "Enyimba Social Club U.S.A., Inc." and its logo. Appellant hired lawyers using the club's money to send cease-and-desist letters to the Houston and Dallas chapters telling them they were violating the club's trademark by using the club's name and logo. The constitution has provisions for terminating chapters, but appellant did not follow them.[3] It was members of the Dallas and Houston chapters that had raised the issue of the illegal vote at the convention that prevented appellant from being recognized as president. Appellant used the money in the bank account to pay the lawyers and expenses of bringing the litigation, the cease-and-desist letters, obtaining the trademark and for paying for the creation of the new website. Appellant did not have the NEC's approval to make these expenditures as required by the constitution. The NEC asked appellant to ...

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