Affirmed and Memorandum Opinion filed May 21, 2013.

In The 

## Fourteenth Court of Appeals

NO. 14

- 09

- 00866

- CV NO. 14

- 10

- 00324

- CV

CHRIS THYGESEN AND B RUCE W. DERRICK, DER IVATIVELY ON BEHALF OF CLEARMEDIA ONE, INC., AND ITS S HAREHOLDERS , Appellant s
V.
RO BERT F. STRANGE, JR. , ROBERT J. VIGUET, JR., AND THOMPSON & KNIGHT, LLP , Appellee s

On Appeal from the 157th District Court

Harris County, Texas Trial Court Cause No. 2008

- 35835

M E M O R A N D U M O P I N I O N

This case is a d erivative shareholder suit brought by appe llants, Chris Thygesen and Bruce W. Derrick
, D erivatively on B ehalf of ClearMedi aOne, Inc. and its Shareholders, against appellees, Robert F. Strange, Jr., Robert J. Viguet, Jr.,2

and Thompson & Knight, LLP. In three issues, appellants contend the trial co urt erred by rendering a take

- nothing judgment on the jury’s verdict instead of adjudicat ing appellants’ request for equitable relief as a “Chancellor in Equity
under Delaware law

. ” We affirm.

I. B ACKGROUND 1
Appellants ow n ed shares in ClearMediaOne, Inc. (“ClearMediaOne”) , one of several companies founded and directed by appellee Strange

. Appellee Viguet, through his current law firm
, appellee Thompson & Knight (collectively “the lawyer defendants”)
, and former law firms, has performed legal work over th e years for Strange and his companies. According to appellants, Strange
mastermind ed a fraud on the ClearMediaOne shareholders and the lawyer
defendants facilitated the fraud via their alleged representation of Strange and his companies. Although appella nts made numerous allegations regarding appellees’
action s , ultimately the jury was asked about appellees’ conduct relative to three
transactions.
(1) Discontinuing ClearMediaOne and S tarting SecurityComm. D uring its existence, ClearMediaOne experienced financial difficulties. Strange
discontinue d operation of ClearMediaOne and form ed SecurityComm Group, Inc. (“SecurityComm”)

. Appellants claim SecurityComm was formed to evade liabilities to ClearMediaOne’s shareholders and use its assets for SecurityCo mm’s
business without benefit to ClearMediaOne’s shareholders

. (2) Acquisition of Westex. SecurityComm acqui red a company named
“Westex.” Relative to that acquisition, Strange represented to Westex that

1 In their appellate brief, appellants present almost thirty pages of factual background. Because all those facts are not material to our disposition, we p resent only a brief overview.3

SecurityComm had acquired another company named “ APT.” Appellants allege
th is statement was false because the APT acquisition had not closed
, which contributed to the unraveling of Westex

. ( 3 ) Settlement of the Westex Litigation. S hortly after the Westex acquisition, conflicts ar o s e and SecurityComm and Strange became involved in
l itigation with the stockholders, principals, and lenders of Westex. The parties reached a partial settlement whereby SecurityComm and Strange received funds in exchange for releasing their interest in Westex. According to appellants, the funds were improperly distributed to the lawyer defendants under the guise of a payment for legal fees and to Strange as payment under a consulting contract.
Appellants sued appellees for various causes of action and sought actual damages, e xemplary damages
, and equitable relief. The o nly issues submitted to the jury con c er n ed alleged breach es of fiduciary duties by Strange and alleged conspiracy in such conduct by the lawyer defendants

. The jury found that Strange
breached his fiduciary d uty to ClearMediaOne with respect to “Discontinuing ClearMediaOne and starting SecurityComm

. ” However, the jury declined to award any damages for this breach or find any harm to ClearMediaOne resulted from malice on the part of Strange. The jury found th at Strange did not breach his fiduciary duty to ClearMediaOne with respect to “The acquisition of Westex” or “The settlement of the Westex Litigation.” The questions concerning the lawyer defendants, including whether they knowingly participated in a cons piracy to damage ClearMediaOne and whether any such conduct was committed with malice, were conditioned on a findin g of damages against Strange. Therefore, the jury did not answer any questions concerning the lawyer defendants.
In their post

- trial filing, a ppellants stated they had previously claimed a jury had no “adjudicative role” in the case although they agreed to the jury sitting in an4

“advisory role
, ” to avoid “ any issues ” concerning the right to trial by jury

. Appellees requested the trial court t o grant equitable relief, sitting as “a Court of Chancery in Delaware.” On September 25, 2009, the trial court signed a final judgment ordering appellant s take nothing from appellees

. II. A NALYSIS

In t hree issue s , appellants contend the trial court er red by (1) failing to apply
Delaware law and adjudicate the case as a “C hancellor in E quity under Delaware
law
, ” (2) rendering judgment on the jury’s verdict because it was advisory only, and (3) violating the “fundamental maxim” that “equity will not suff er a wrong without a remedy” via the actions described in issues one and two. Appellants do not challenge sufficiency of the evidence to support any of the jury’s findings. Appellants complain only that the trial court render ed a take nothing judgment on the jury verdict rather than adjudicating their request for equitable relief. Appellants seek equitable relief in the form of rescissory damages and fee
forfeiture

. Appellants contend that
, under the law of Delaware, as the state of
ClearMediaOne ’s incor

poration , the Delaware C ourt of C hancery has exclusive jurisdiction over all aspects of a claim for breach of fiduciary duty by a corporate fiduciar y even when monetary relief is the only remedy. Thus, appellants suggest the jury verdict was advisory only and the trial court, sitting as a Delaware
C hancellor in E quity, was required to decide the equitable issue s of whether appellees’ actions deceived the ClearMediaOne shareholders and fashion a remedy. Therefore, appellants maintain this case has never be en properly adjudicated and they have thereby been deprived of an equitable remedy.
We disagree the jury’s verdict was advisory only. Appellees properly demanded their right to a trial by jury. I n a pre

- trial Rule 11 agreement, appellants5

agreed to a tri al by jury. When the trial court entertained objections to the jury charge , a ppellants did not object to any of the questions

. Moreover , w hen a suit is brought in a Texas state court , procedural matters are governed by Texas law even if the law of anothe r state or federal law governs substantive issues. See Mitchell
v. Missouri

– Kansas

– Texas R.R. Co. , 786 S.W.2d 659, 66 1 (Tex. 1990) (op. on rehearing)
, overruled on other grounds by Union Pac. R. Co. v. William s , 85 S.W.3d 162, 169 (Tex. 2002) ; Penny v. Powell
, 347 S.W.2d 601 , 602 ( Tex. 1961) ; Illinois Tool Works, Inc. v. Harris , 194 S.W.3d 529, 532 (Tex. App.

— Houston [14th Dist.] 2006, no pet. ) ; In re Wells Fargo Bank Minn. N.A. , 115 S.W.3d 600,
605 n .7 (Tex. App.

— Houston [14 th Dist.] 2003, orig. proceeding [mand. denied] )

. W hether a party is entitled to a jury trial on a particular claim is typically a procedural issue governed by the law of the forum. Wells Fargo Bank Minn.
, 115
S.W.3d at 605 n.7 (citing R estatement ( S econd ) of C onflict of L aws § 129 ( 2012 ) ) ;

see Restatement (Second) of Conflict of Laws § 129 cmt. a

. ( “ T he local law of the forum determines whether a party is entitled to a jury trial on any aspect of his

case .” ); see also Mitchell , 786 S.W.2d at 661

– 62 (“ This court has recognized that rules relating to the form, necessity , and effect of jury issues are procedural rather than substantive if they do not interfere with a right or defense provided by the F.E.L.A.”) (emphasis in original ; internal quotations omitted ).

R elative to the apportionment of duties between the jury and the trial court when a party requests equitable relief , the Supreme Court of Texas has held : “ As a general rule, a jury does not determine the expediency, necessity, or propriety of equitable relief. . . . However, when contested fact issues must be resolved before equitable relief can be determined, a party is entitled to have that resolution made by a jury.” Burrow v. Arce , 997 S.W.2d 229, 245 (Tex. 1999) ( internal quotations6

omitted ) . Mo re specifically, with respect to the equitable remedy at issue in
Burrow , attorney

- fee forfeiture, the court continued:

Thus, when forfeiture of an attorney ’ s fee is claimed, a trial court must determine from the parties whether factual disputes exist that must be decided by a jury before the court can determine whether a clear and serious violation of duty has occurred, whether forfeiture is appropriate, and if so, whether all or only part of the attorney ’ s fee should be forfeited. Such factual disputes ma y include, without limitation, whether or when the misconduct complained of occurred, the attorney ’ s mental state at the time, and the existence or extent of any harm to the client. If the relevant facts are undisputed, these issues may, of course, be det ermined by the court as a matter of law. Once any necessary factual disputes have been resolved, the court must determine, based on the factors we have set out, whether the attorney ’ s conduct was a clear and serious breach of duty to his client and whether any of the attorney ’ s compensation should be forfeited, and if so, what amount. Id. at 246. Accordingly, under Texas procedural law applicable in this case, the jury had the exclusive role of resolv ing factual issues underlying a request for equitable re lief , including whether appellees breach ed fiduciary duties or committed any other misconduct ; the court then had the role of deciding whether to
order equitable relief based on any jury finding of misconduct

. See id. at 245

– 46. Appellants’ brief is devo ted to the contention that this case has not been adjudicated because the trial court failed to consider an equitable remedy. We disagree. The trial lasted approximately a week. The jury heard testimony from eight witnesses, as well as arguments of coun sel, before rendering its verdict. Appellants then presented their request for equitable relief to the trial court before it signed the judgment. In the judgment, the court ordered that appellants take nothing based on the jury verdict and then recited, “ A ll other relief not expressly granted in this judgment i s denied.” Therefore, the trial court did rule on the request for equitable relief

— it denied the request.7

Appellants did not obtain a jury finding that (1) the lawyer defendants
breached fiducia ry duties or committed any other misconduct , or (2) Strange breached fiduciary duties or committed any other misconduct relative to the acquisition of Westex and settlement of the Westex litigation

. The jury expressly found Strange did not breach his fidu ciary duties with respect to th ose transactions. The requirement that the jury answer questions concerning the lawyer defendants was conditioned on a finding of damages against Strange. Appellants did not object to this conditional submission. Because t he jury found no damages against Strange, it did not answer the question s concerning the lawyer defendants. Thus, appellants failed to obtain the factual findings prerequisite to equitable re lief on (1) any claims against the lawyer defendants
, and (2) th e claims against Strange relative to acquisition of Westex and settlement of the Westex litigation

. The jury did find Strange breached a fiduciary duty with respect to discontinuation of ClearMediaOne and formation of SecurityComm , although the jury did not assess any damages and found no malice on the part of Strange

. We recognize a jury’s refusal to award actual damages for breach of fiduciary duty does not preclude a trial court from ordering e quitable relief, such as disgorgement of profits or fee fo rfeiture, although the fiduciary’s mental state and existence of actual damages are factors for the trial court’s consideration. See id. at 239

– 240
, 246

. However, equitable relief is not mandatory because the “the expediency,

neces sity, or propriety of equitable relief” is committed to the trial court’s
discretion. See Wagner & Brown, Ltd. v. Sheppard , 282 S.W.3d 419, 428

– 29 (Tex. 2008) ; see also Burrow , 997 S.W.2d at 2 40

– 4 2, 246

. Accordingly, a trial
court’ s decision on whether to order equitable relief is reviewed for abuse of
discretion. Wagner & Brown , 282 S.W.3d at 428

– 29 ; s ee Illinois Tool Works
, 1948

S.W.3d at 532 (stating the applicable standard of review is a p rocedural matter governed by law of the forum)

. However, a ppellants have not demonstrated the trial court abused its
discretion. Specifically, a p pellants do not present an appellate issue, contending
the trial court abused its discretion by denying their request for equitable relief at least on the one transaction for which the jury found Strange breach ed fiduciary
dut ies. Instead, appellants’ com plaint is that the trial court failed to adjudicate their request for equitable relief at all and decide the underlying factual and legal
issue s relative to all the transactions as a Delaware C hancellor in E quity

. For instance, i n their brief, a ppellants suggest the trial court was required to treat all the jury findings as advisory only
, decide for itself that appellees committed
misconduct relative to all th re e transactions
, and then order equitable relief :

The jury answered this question (whether Securi tyComm was a

“ sham to perpetuate a fraud ” ) affirmatively in broad form by finding that [Strange] failed to comply with his fiduciary duty to [ClearMediaOne] in di s cont i nuing [ClearMediaOne] and sta r ting up [SecurityComm]. In pointing this out, Appellant s lay no claim to this verdict , which Appellants continue to believe was flawed and should not be parsed out by one seeking equity. What is lacking here is a pro per adjudication of the case. (emphasis added).

At some points , appellant s request a remand for the trial court to adjudicate their request for equitable relief. At another point, appellants suggest that , because of the trial court’s alleged fail ure to adjudicate their request, we act as the court in equity and order the following relief : rescissor y damages in an amount o ver $2.3 million, allocated pro rata among “innocent shareholders ; ” and forfeiture of the $244,000.00 obtained by appell ees in settlement of the Westex litigation.9

As discussed above, t he trial court has ruled on the request for equ itable
relief in accordance with applicable Texas law governing the apportionment of duties among the jury and the trial court . On most of appellants’ claims, the trial court was precluded from ordering such relief based on the lack of a prerequisite jury finding. We reject appellants’ suggestion that the trial court was required, or even authorized, to consider the verdict as advisory only and re

- decide factual issues underlying the request for equitable relief . On the other claim, appellants
fail to de monstrate the trial court abused its discretion by denying the request for equitable relief. Accordingly , we decline to remand for any further determination
or order recovery of the sum s urged by appe llants.
We overrule appellant s ’ three issues and affirm the trial court’s judgment.

/s/ John Donovan Justice

Panel consists of Justice s Boyce , McCally, and Donovan

.