Affirmed in Part, Reversed and Rendered in Part, and Reversed and 

Remanded in Part, and Memorandum Opinion filed July 6, 2021.

In The

Fourteenth Court of Appeals

NO. 14-19-00732-CV

HOUSTON METRO ORTHO AND SPINE SURGERY, LLC; ELITE 

AMBULATORY SURGERY CENTERS, LLC; LORI RAMIREZ; JAMES

ALBRIGHT, M.D.; CARL PALUMBO, M.D.; NAVIN SUBRAMANIAN, 

M.D.; ALAN RECHTER, M.D.; MARK PROVENZANO, M.D.; JUAN 

CARLOS BUSTOS, M.D.; ASIF CHAUDRY, M.D.; AND NEWTON 

DUNCAN, M.D., Appellants

V.

JUANSRICH, LTD., AND RICHARD FRANCIS, M.D., Appellees

On Appeal from the 215th District Court

Harris County, Texas

Trial Court Cause No. 2015-24460

MEMORANDUM OPINION

Appellee Richard Francis, M.D., through his business entity, appellee 

Juansrich, Ltd. (collectively “Juansrich”), owned an interest in appellant Houston 

Metro Ortho and Spine Surgery, LLC (“Metro”), an ambulatory surgical center. 
2

Juansrich shared ownership in Metro with several other surgeons, including

appellants James Albright, M.D., Carl Palumbo, M.D., Navin Subramanian, M.D., 

Alan Rechter, M.D., Mark Provenzano, M.D., Juan Carlos Bustos, M.D., Asif 

Chaudry, M.D., and Newton Duncan, M.D. Appellant Elite Ambulatory Surgery 

Centers, LLC (“Elite”) also owned an interest in Metro and managed the daily 

operations of the surgery center. Appellant Lori Ramirez was an officer of Elite. 

As Class A members of Metro, the surgeons agreed, among other things, that each 

would conduct a certain percentage of their eligible procedures at Metro. A 

dispute began when appellants believed Dr. Francis had stopped performing 

procedures at Metro.

Metro terminated Juansrich’s ownership interest in Metro. It then filed suit 

against Dr. Francis seeking to enforce a noncompetition agreement contained in 

the “Company Agreement of Houston Metro Ortho and Spine Surgery Center

LLC” (the “LLC Agreement”). Believing it was owed significant sums as payment 

for its ownership interest in Metro, as well as for missed distributions of earnings

made while it was still a member of Metro, Juansrich filed counterclaims alleging 

numerous causes of action including breach of contract, conversion, aiding and 

abetting, and unjust enrichment. The trial court granted Dr. Francis’s motion for 

partial summary judgment asserting that the noncompetition agreement was 

unenforceable. It then realigned the parties making Juansrich the plaintiff. The 

trial court subsequently granted two Rule 166 motions filed by Juansrich and 

conducted a bench trial on the remaining issues. At the conclusion of the bench 

trial, the trial court found in favor of Juansrich. Juansrich elected to recover on its 

conversion cause of action. The trial court signed a final judgment awarding (1) 

Juansrich $9,855,596.85 in damages on Juansrich’s conversion cause of action and 

$23,048.50 in attorney’s fees in connection with Juansrich’s efforts to inspect 
3

Metro’s records, and (2) Dr. Francis $403,918.15 in attorney’s fees and costs for 

defending against Metro’s noncompete claim.

Because Metro has not challenged the $23,048.50 attorney’s fees award on 

appeal, we affirm that part of the trial court’s final judgment. Concluding that 

none of Juansrich’s tort claims can support the final judgment, we reverse the trial 

court’s final judgment based on conversion and render judgment that Juansrich 

take nothing on those claims. In addition, because the primary purpose of the LLC 

Agreement was not for the provision of personal services, we reverse and render 

judgment that Dr. Francis take nothing on his request for attorney’s fees for 

defending against Metro’s suit seeking to enforce the non-compete contained in the 

LLC Agreement. We conclude that the trial court erred when it granted 

Juansrich’s first and second Rule 166 motions, which Juansrich relied on to 

support its breach of contract cause of action. As a result, Juansrich cannot now

elect to recover on its breach of contract claim seeking payment for its ownership 

interest. We therefore remand that cause of action to the trial court for further 

proceedings. Finally, we conclude that the evidence is legally sufficient to support

the trial court’s judgment on Juansrich’s claim for missed distribution payments. 

We therefore affirm that part of the trial court’s final judgment.

BACKGROUND

Dr. Francis is an orthopedic surgeon. Dr. Francis and Dr. Rechter, another

orthopedic surgeon, were the original doctors involved in the formation of Metro. 

Ramirez, Elite’s chief executive officer, was the moving force in the formation of 

Metro and the recruitment of doctors as investors in Metro. Metro is an

ambulatory surgery center that specializes in orthopedic, pain management, spine, 

and pediatric ear, nose, and throat procedures. As an ambulatory surgery center, 

Metro performs only outpatient surgery cases. Metro’s Class A members consist
4

entirely of doctors and some of those doctors’ business organizations. Juansrich is 

a Class A member and it eventually owned about 19.50 units of Class A 

membership in Metro.1 Juansrich paid a total of $195,000 for those units. The 

doctor appellants are all Class A members of Metro. Elite is the sole Class B 

member. Elite handles the day-to-day business operations of the surgical center, 

such as managing the staff.

As with all limited liability companies, Metro is governed by a contract, the 

LLC Agreement. See Tex. Bus. Orgs. Code Ann. § 101.052. Among the key 

provisions in the LLC Agreement are sections 2.3, 4.3, and 10.7.

Section 2.3

Section 2.3(b)(iv) provides that each Class A member “shall perform at least

one-third of such Class A Member’s procedures that require or can be performed at 

an ambulatory surgery center at the [Metro] Center.” 

Section 4.3

Section 4.3 addresses redemption of members’ ownership interests. Section 

4.3 divides terminating events with respect to a member’s ownership interest as 

either “Adverse Terminating Events” or “Non-Adverse Terminating Events.” It 

further provides that the redemption price for a Class A member’s units “shall be

based on whether the Terminating Event is an Adverse Terminating Event or a 

Non-Adverse Terminating Event.” An Adverse Terminating Event occurs when, 

among other events not at issue here, a Class A Member materially breaches the 

LLC Agreement. A Non-Adverse Terminating Event occurs with respect to a 

Class A Member if, among other things, the Class A Member is removed “for any 

reason or no reason,” by “Supermajority Approval.” The redemption price is also 

1 The LLC Agreement defines “Unit” as “a unit or share of interest in the Company.”
5

affected by whether Metro has become “Operational” as defined in the LLC

Agreement. Metro becomes “Operational” once it “is Medicare certified as an

ambulatory surgical center.” If Metro is not “Operational,” or the termination is 

“Adverse,” then the redemption price for a departing Class A Member’s Units is 

limited to the departing Member’s capital contribution. If Metro is “Operational,”

and the termination is “Non-Adverse,” the redemption price is determined by a 

formula found in section 4.3(g)(ii) of the LLC Agreement. 

Section 10.7

Section 10.7 of the LLC Agreement contains a non-competition clause. It 

provides that 

[d]uring the term of a Class A Member’s membership in [Metro], and 

for a period of one year thereafter, no Class A Member nor any of 

such Class A Member’s Affiliates, except as provided below or 

through [Metro], shall, without prior written Consent of the Class B 

Member, directly or indirectly own, manage, operate, control, or 

participate in any manner in the ownership, management, operation,

or control of, or serve as a partner, employee, principal, agent, 

consultant, or otherwise contract with, or have any financial interest 

in, or aid or assist any other person or entity that operates a facility 

(including an ambulatory surgical center or office-based or practicebased facility or operating site or room that provides any of the 

services offered by [Metro]) to provide outpatient surgical services, 

including a state-licensed, Medicare-certified or accredited surgery 

center or office-based surgical facility, within 10 miles of the location 

of [Metro’s ambulatory surgical center] (the “Restricted Territory”) 

nor may a Class A Member provide Facility Fee Procedures in such 

Class A Member’s office. The preceding sentence shall not be 

construed to prevent a Class A Member or any of a Class A Member’s 

Affiliate’s from (i) maintaining staff privileges at any facility, (ii) 

providing professional surgical services and earning a professional fee

thereon (but not acting as an owner or having a compensation or 

financial relationship) in any other ambulatory surgical center or 

hospital, (iii) performing any in-office procedures under local 

anesthesia that does not require the presence of an anesthesiologist or 
6

a certified registered nurse anesthetist, or (iv) having any financial 

relationship or owning an interest in any hospital within the Restricted 

Territory. For purposes of this Section 10.7, it shall be presumed that 

a person or entity competes with [Metro] and violates this provision if 

such person or entity has any interest in any facility or center of any 

type whatsoever for the conduct of, or compensation relationship 

with, any outpatient surgery center within the Restricted Territory.

The beginning of the Practice

In a “Confidential Private Offering Memorandum for Accredited Investors 

Only,” dated May 6, 2011, Metro notified potential investors that 

THERE IS NO CURRENT SURGERY CENTER. 

CONSEQUENTLY, THE SURGERY CENTER HAS NO 

OPERATIONAL HISTORY AND CURRENTLY CONDUCTS NO 

BUSINESS. IT IS CONTEMPLATED THAT THE SURGERY 

CENTER WILL NOT CONDUCT ANY OPERATIONS OR 

BUSINESS UNLESS AND UNTIL SUFFICIENT SUBSCRIPTIONS 

ARE RECEIVED AND ACCEPTED PURSUANT TO THIS 

OFFERING (THE MINIMUM AMOUNT OF WHICH IS YET TO 

BE DETERMINED BY THE COMPANY).

That same offering memorandum further warned potential investors that Metro did 

“not intend to service Medicare or Medicaid patients.” Metro repeated those same 

warnings in a second confidential memorandum for potential investors dated 

January 1, 2012. Metro’s business model was to operate as an out-of-network 

facility unaffiliated with managed care providers. Under this model, Metro did not 

contract with insurance companies on the rates that would be charged for 

procedures, instead the doctors would submit their normal charges and wait on 

reimbursement. By choosing this model, the doctors expected “to have 

reimbursement, in most cases, that is significantly higher than what they might be 

able to receive on a contracted basis.”

Metro opened its doors to patients in April 2012. Metro was initially very 

successful. Dr. Francis was one of the main reasons for that success. He 
7

performed the most procedures at the Metro surgery center and as a result, he was 

consistently responsible for more than twenty percent of Metro’s revenues. Dr. 

Francis also served as chairman of Metro’s board.

The Change in the Practice and the Board vote

Problems began to arise in 2014 when two large insurance companies

stopped paying Metro for services rendered to their insureds. As a result, Dr. 

Francis began performing more of his procedures at other facilities. Concerned, 

his fellow surgeons and Ramirez attempted to communicate with Dr. Francis. 

Those efforts were generally unsuccessful. Dr. Francis did, however, talk with Dr. 

Rechter. Dr. Francis told Dr. Rechter that while he was committed to Metro, he 

was not going to continue performing surgeries at the center if payment would not 

be received. In addition, Dr. Francis’s appearances at the surgery center noticeably 

declined and he stopped attending board meetings. The Metro board voted 

unanimously on October 31, 2014, to remove Juansrich as a member. Ramirez 

notified Juansrich of the board’s decision. Several days later, Dr. Francis 

responded that he acknowledged and accepted the board’s decision. Juansrich’s

membership units went back into Metro’s treasury. Metro placed $195,000, 

Juansrich’s capital contribution to obtain its membership units, in escrow. Metro

eventually tendered the $195,000 payment to Juansrich, but it was rejected.

Several of the remaining Class A members acquired those former Juansrich 

membership units out of the Metro treasury in 2015. Each purchase was 

authorized by a vote of the Metro board. Metro made no distributions for earnings 

in September or October 2014.2 Distributions resumed in December 2014 when 

Metro distributed $1,043,600.37. In late 2017, the Metro members sold 50.1

2 Metro had historically made distributions of a month’s earnings in the middle of the 

following month. September and October 2014 were the first months where no distributions 

occurred.
8

percent of their interest in Metro to Nobilis Health Corporation for $21,446,364.

The Lawsuit

Metro filed suit against Dr. Francis in 2015 alleging that he had violated the 

noncompete contained in the LLC Agreement. Juansrich intervened. Juansrich 

alleged a breach of contract cause of action seeking payment for the redemption of 

its units and its proportionate share of the December 2014 distribution. Juansrich 

also alleged conversion, aiding and abetting, and unjust enrichment claims based 

on the same facts. Dr. Francis moved for summary judgment arguing that the

noncompete found in the LLC Agreement was unenforceable. The trial court 

granted Dr. Francis’s motion. In additional rulings, the trial court (1) awarded Dr. 

Francis $403,918.15 in attorney’s fees and costs pursuant to the noncompete 

statute; (2) awarded Juansrich $23,048.50 in attorney’s fees in connection with 

Juansrich’s efforts to inspect Metro’s company records; and (3) granted Juansrich’s

no-evidence motion on all of Metro’s remaining affirmative claims for relief. In 

addition, the trial court realigned the parties making Juansrich the plaintiff.

As the trial date approached, Juansrich filed two motions pursuant to Rule 

166 of the Texas Rules of Civil Procedure. See Tex. R. Civ. P. 166 (authorizing 

trial court to schedule a pre-trial conference during which it may consider, among 

other things, “contested issues of fact and simplification of the issues,”

“identification of legal matters to be ruled on or decided by the court,” and “such 

other matters as may aid in the disposition of the action.”). 

The first 166 motion

The first motion argued that Metro’s termination of Juansrich was nonadverse. Juansrich then argued that the undisputed facts showed that it had not 

violated the LLC Agreement. The motion relied on Metro’s corporate deposition
9

which identified two alleged breaches, violating the one-third procedures rule and 

violations of the non-compete in the LLC Agreement. Juansrich argued that there 

was no violation of the one-third of procedures rule because the period for 

measuring compliance with the rule was Metro’s prior fiscal year, and Metro had 

admitted Francis had complied with the rule for that year. Juansrich then argued 

there could be no breach of the non-compete because the trial court had granted Dr. 

Francis’s motion for summary judgment arguing the non-compete was 

unenforceable. The trial court granted Juansrich’s first Rule 166 motion.

The second 166 motion

In the second Rule 166 motion, Juansrich argued that the trial court could 

rule as a matter of law that at the time of Juansrich’s termination, Metro was 

“Operational” as defined in the Metro Agreement. In other words, Metro had been 

Medicare certified as an ambulatory surgical center. Juansrich based this argument 

on alleged judicial admissions by Metro admitting that Metro became 

“Operational” on May 22, 2011. According to Juansrich, this occurred three 

separate times, all in relation to Metro’s summary judgment motion arguing that 

Juansrich’s termination was adverse: (1) a sentence in a supplemental motion for 

summary judgment on the subject filed by Metro stating that “Here, Metro became 

operational on May 22, 2011;” (2) a Metro lawyer stating during the summary 

judgment hearing that Juansrich “withdrew within five years after Metro became 

operational;” and (3) a Power Point slide stating that “Metro became operational 

on May 22, 2011.” The trial court granted this Rule 166 motion as well.

The Bench Trial

The case proceeded to a contentious trial before the bench. At the 

conclusion of the evidence, the trial court found in favor of Juansrich. It 

subsequently signed findings of fact and conclusions of law supporting recovery on 
10

theories of conversion, aiding and abetting, unjust enrichment, and breach of 

contract. Juansrich elected to recover for conversion. The trial court’s final 

judgment awarded Juansrich $9,855,596.85 on Juansrich’s conversion cause of 

action, plus attorney’s fees and costs for defending against Metro’s noncompete 

claim. The judgment also ordered that Juansrich recover $23.048.50 in attorney’s 

fees awarded pursuant to section 3.152(c) of the Texas Business Organizations 

Code. See Tex. Bus. Orgs. Code Ann. § 3.152(c) (authorizing award of attorneys’

fees “in a suit to require a filing entity to open its books and records”). This appeal

followed.

ANALYSIS

Metro raises numerous issues on appeal challenging most of the trial court’s 

judgment. It does not challenge the trial court’s award of attorney’s fees awarded 

pursuant to the statute regulating access to a company’s financial records. See id. 

Metro also does not dispute that it owes Juansrich something; it argues the 

recovery is limited to the return of Juansrich’s capital contribution. With that 

introduction, we turn to Metro’s issues.

I. Because an express contract covers the dispute, Juansrich cannot

recover under tort theories.

A. Conversion

Metro argues in its first issue that the trial court erred when it found that 

Metro and several of its members had converted Juansrich’s Metro membership 

units because the dispute is governed by a contract, the LLC Agreement. Metro 

then asserts that a case from this court, Exxon Mobil Corporation v. Kinder 

Morgan Operating, L.P., controls the outcome here. 192 S.W.3d 120, 126–27 

(Tex. App.—Houston [14th Dist.] 2006, no pet.).

In Exxon Mobil, we explained that the independent injury rule provides that 
11

“when the only loss or damage is to the subject matter of the contract, the 

plaintiff’s action is ordinarily on the contract.” Id. at 127. We further explained

that “when the contract spells out the parties’ respective rights about a subject 

matter, the contract–not common law tort theories–governs any dispute about the 

subject matter.” Id. We then rejected Exxon Mobil’s conversion claim because

“(1) the only loss Exxon Mobil complains of is the propane, which is the subject of 

the contract, and (2) the contract spells out the parties’ respective rights regarding 

the processing of the propane.” Id. at 128 (internal citations omitted). This rule

was recognized by the Supreme Court of Texas in Chapman Custom Homes, Inc.

v. Dallas Plumbing Company, 445 S.W.3d 716, 718 (Tex. 2014). There, the Court 

stated that “the economic loss rule generally precludes recovery in tort for 

economic losses resulting from a party’s failure to perform under a contract when 

the harm consists only of the economic loss of a contractual expectancy.” Id. It 

went on to explain that the economic loss rule does not bar all tort claims arising 

out of a contractual setting. Id. The court observed that “a party states a tort claim 

when the duty allegedly breached is independent of the contractual undertaking 

and the harm suffered is not merely the economic loss of a contractual benefit.” Id. 

Here, we are presented with the former situation rather than the latter. The 

LLC Agreement covers the field of this dispute. It created Juansrich’s ownership 

interest, defined the parties’ rights and duties under the agreement, and established 

the remedies available when a party failed to perform those duties. In addition,

Juansrich’s alleged loss is the receipt of a contractual benefit, reimbursement for 

the loss of its ownership interest in Metro. As a result, Juansrich’s conversion

claim fails as a matter of law. See Exxon Mobil, 192 S.W.3d at 128 (“The very 

nature of the dispute between the parties was whether appellees legally performed 

their contractual obligations under the GPA. Appellees have conclusively 
12

demonstrated that Exxon Mobil’s conversion claims were barred by application of

the independent injury rule.”).

Because Juansrich cannot recover on a conversion theory, its aiding and 

abetting theory of imposing joint and several liability also fails. See Jessen v. 

Duvall, No. 14-16-00869-CV, 2018 WL 1004659, at *7 (Tex. App.—Houston 

[14th Dist.] Feb. 22, 2018, no pet.) (mem. op.) (“Therefore, if the underlying tort 

fails, an aiding and abetting claim related to the failed tort likewise fails.”). In 

addition, to the extent Juansrich asserts aiding and abetting as an independent tort

supporting recovery against certain appellants, we have previously rejected aiding 

and abetting as a valid legal theory. Solis v. S.V.Z., 566 S.W.3d 82, 102–03 (Tex. 

App.—Houston [14th Dist.] 2018, pet. denied) (refusing to recognize aiding and 

abetting as a valid theory of recovery in Texas). We once again do so here.

We sustain Metro’s first issue and reverse the trial court’s judgment based 

on conversion and render judgment that Juansrich take nothing on either its 

conversion or its aiding and abetting causes of action.

B. Unjust enrichment

The trial court also made findings supporting a recovery by Juansrich for 

unjust enrichment. Metro argues in its second issue that there can be no recovery 

for unjust enrichment because a contract covers all aspects of the claim. We agree. 

Here, as pointed out above, the LLC Agreement covers all aspects of Juansrich’s

unjust enrichment claim. In addition, there was a legitimate dispute regarding the 

amount owed under the LLC Agreement, which forecloses an unjust enrichment 

recovery. See Industrial III, Inc. v. Burns, No. 14-13-00386-CV, 2014 WL 

4202495, at *6 (Tex. App.—Houston [14th Dist.] Aug. 26, 2014, pet. denied) 

(mem. op.) (“Generally speaking, a party may not recover under quantum meruit or 

unjust enrichment if an express contract covers the services or materials 
13

furnished.”). As a result, we hold that Juansrich cannot recover under an unjust 

enrichment cause of action. Id.

II. The trial court erred when it granted Juansrich’s first and second Rule 

166 motions requiring a new trial on Juansrich’s breach of contract 

claims seeking payment for its ownership interest in Metro.

As previously stated, Juansrich elected to recover under its conversion cause 

of action. The trial court, however, also found that Metro breached the LLC

Agreement. It determined that Juansrich’s breach of contract damages totaled (1)

$7,844,676 for Metro’s breach of its obligation to pay Juansrich for its membership 

units, and (2) $191,764.21 for member distributions for September and October of 

2014. The first amount was initially based on the trial court granting the two Rule 

166 motions and thereby determining that Juansrich’s termination was non-adverse

and that Metro was “Operational” as defined in the LLC Agreement when the 

termination occurred. Both are requirements that must be met before Juansrich can 

recover anything more than its initial capital contribution. The second amount was

based on (1) undisputed evidence that Juansrich was still a member of Metro in 

September and October of 2014 and was entitled to a proportionate share of any 

distributions that occurred for those months, and (2) evidence admitted during the 

bench trial allegedly establishing the amount of those distributions. Metro argues 

in its third issue that neither amount can stand.

A. The trial court could use Rule 166 in appropriate circumstances 

to resolve legal issues.

We turn first to Metro’s argument that Juansrich’s use of Rule 166 here was 

improper. We conclude that the trial court had the authority under Rule 166, in 

appropriate circumstances, to resolve legal issues that could streamline a trial. See

Tex. R. Civ. P. 166(g) (p); JP Morgan Chase Bank v. Orca Assets G.P., LLC., 546 

S.W.3d 648, 653 (Tex. 2018) (stating that Rule 166(g) authorizes trial courts to 
14

decide matters that, though ordinarily fact questions, have become questions of law 

“because reasonable minds cannot differ on the outcome.”). Therefore, the 

question before us is not whether the procedure was authorized, but whether the 

circumstances were appropriate for such a ruling. We review a trial court’s Rule 

166 order de novo. JP Morgan Chase Bank, 546 S.W.3d at 653.

B. The trial court erred when it granted Juansrich’s first Rule 166 

motion.

To be entitled to a return of anything more than its initial capital 

contribution, Juansrich initially had to establish that Juansrich’s termination by 

Metro was non-adverse as defined in the LLC Agreement. An adverse termination 

occurs if the member materially breached the LLC Agreement. If the termination 

was “adverse,” then Juansrich would only be entitled to a return of its initial capital 

contribution of $195,000. If the termination was non-adverse, then the redemption 

price for Juansrich’s ownership interest would be determined by whether the 

termination occurred before or after Metro became “Operational” as defined in the 

LLC Agreement. If the termination occurs before Metro becomes “Operational,”

Juansrich would only be entitled to a return of its initial capital contribution, 

$195,000. If after, then the payment would be determined by performing a 

calculation laid out in article 4.3(g)(ii)(B) of the LLC Agreement.

Metro had alleged that Juansrich’s termination was adverse because it had 

materially breached the LLC Agreement by violating (1) the non-compete, and (2) 

the one-third procedures rule. Juansrich argued that the trial court should grant its 

first Rule 166 motion because (1) the undisputed facts showed that it had complied 

with the one-third procedures rule, and (2) its prior summary judgment order had 

determined that the non-compete agreement was unenforceable. Juansrich argued 

compliance with the one-third procedures requirement was measured by the prior 
15

fiscal year and Metro had admitted that Juansrich had complied with that

requirement for 2013. Juansrich based this argument on the fact that the LLC 

Agreement required that compliance with the one-third of medical-income rule be 

measured “for the previous fiscal year or previous 12-month period.” The trial 

court agreed and granted Juansrich’s first Rule 166 motion.

On appeal, Metro argues, in part, that the trial court erred when it granted 

Juansrich’s first Rule 166 motion because the LLC Agreement did not specify that,

unlike the one-third of medical-income rule, compliance with the one-third 

procedures rule was measured by the prior fiscal year. Metro asserts this omission 

was intentional and the trial court erred when it added the annual compliance 

language into the number of procedures rule. We agree.

Courts are not authorized to rewrite agreements to insert provisions that the 

parties could have included or to imply terms for which they have not bargained. 

Tenneco, Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 646 (Tex. 1996); Bennett 

v. Comm’n for Lawyer Discipline, 489 S.W.3d 58, 68 (Tex. App.—Houston [14th 

Dist.] 2016, no pet.). Here, because the parties chose to include an annual

measurement period for determining compliance with the one-third of medicalincome rule, we must accept that the parties’ omission of that language from the 

one-third of procedures rule was intentional. See George Joseph Assets, LLC v. 

Chenevert, 557 S.W.3d 755, 771 (Tex. App.—Houston [14th Dist.] 2018, pet. 

denied) (“We will not read language into the agreement that the parties did not 

include.”); Bennett, 489 S.W.3d at 70 (“We are not authorized to rewrite the 

parties’ contract under the guise of interpreting it, even if one of the parties has 

come to dislike one of its provisions.”). Therefore, because the parties did not 

include an annual time-period for measuring compliance with the one-third 

procedures rule, we construe the contract to require the measurement to occur over 
16

a reasonable time period. See Hewlett-Packard Co. v. Benchmark Electronics, 

Inc., 142 S.W.3d 554, 563 (Tex. App.—Houston [14th Dist.] 2004, pet. denied)

(“[W]hen a contract is silent regarding the date for an action to be taken, the courts 

will construe the contract as requiring such action be taken within a reasonable 

time.”). “The question of reasonableness is usually one for the trier of fact.” Id.

We therefore hold that there was a fact question on whether Juansrich complied

with the one-third procedures rule to be resolved by the trier of fact. Accordingly, 

the trial court erred when it ruled as a matter of law that Juansrich’s termination 

was non-adverse and it granted Juansrich’s first Rule 166 motion.

Metro also argues that the trial court erred when it partially based its first 

Rule 166 order on its previous summary judgment order declaring the covenant not 

to compete found in the LLC Agreement unenforceable. The trial court had 

previously determined that the covenant not to compete in the LLC Agreement was 

unenforceable because it failed to comply with the requirements set forth in 

subsection 15.50(b) of the Business and Commerce Code. See Tex. Bus. & Com. 

Code Ann. § 15.50(b) (establishing requirements that a covenant not to compete 

relating to the practice of medicine must comply with to be enforceable). Metro 

did not deny that the covenant not to compete found in the LLC Agreement did not 

include those restrictions. Metro instead argued that the LLC Agreement did not 

need to comply with the subsection 15.50(b) requirements because the legislature 

had amended the statute by adding subsection (c), which provides that “subsection 

(b) does not apply to a physician’s business ownership interest in a licensed 

hospital or licensed ambulatory surgical center.” Id. at § 15.50(c). As a result of 

this addition to the statute, Metro argued the covenant not to compete did not need 

to comply with subsection 15.50(b) and was otherwise enforceable against Dr. 

Francis. We agree with Metro.
17

This issue presents a question of statutory construction, which we review de 

novo. Texas Dep’t of Transp. v. Needham, 82 S.W.3d 314, 318 (Tex. 2002).

When construing statutes, our primary objective is to give effect to the legislature’s 

intent. Willacy Cty. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 

29, 38 (Tex. 2018). We rely on the plain meaning of the text as expressing 

legislative intent unless a different meaning is supplied by legislative definition or 

is apparent from the context, or the plain meaning leads to absurd results. Id. 

Here, it is undisputed that the covenant not to compete at issue here was 

contained in the LLC Agreement forming Metro, the entity owning and operating 

an ambulatory surgical center. As a result, pursuant to the plain language of the 

statute, the covenant not to compete in the LLC Agreement was not required to 

comply with the limitations found in subsection (b) of the statute. See Tex. Bus. & 

Com. Code Ann. § 15.50(c) (providing that subsection 15.50(b) of the Business 

and Commerce Code “does not apply to a physician’s business ownership interest 

in a licensed hospital or licensed ambulatory surgical center”); Novamed Surgery

Ctr. of Tyler, L.P. v. Bochow, No. 12-12-00159-CV, 2013 WL 2725544, at *4 

(Tex. App.—Tyler June 12, 2013, no pet.) (mem. op.) (“Before the [2009] 

amendment, a noncompetition covenant involving a physician’s ownership interest 

in an [ambulatory surgical center] required a buyout provision. Following the 

amendment, it did not. It is more than a ‘clarification.’ It is a change in the law.”) 

(internal citations omitted). We therefore hold that the trial court erred when it 

ruled that the covenant not to compete in the LLC Agreement was unenforceable

because it did not contain the limitations found in subsection 15.50(b) of the 

Business and Commerce Code and then relied on that ruling in part to determine 

that Metro’s termination of Dr. Francis and Juansrich was non-adverse.

C. The trial court erred when it granted Juansrich’s second Rule 166 

motion.
18

A judicial admission results when a party makes a statement of fact which

conclusively disproves a right of recovery or a defense. In re Estate of Guerrero, 

465 S.W.3d 693, 705 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). A 

judicial admission is a formal waiver of proof that dispenses with the production of 

evidence on an issue and bars the admitting party from disputing it. Id. The 

elements required for a judicial admission are: (1) a statement made during a 

judicial proceeding; (2) that is contrary to an essential fact or defense asserted by 

the person making the admission; (3) that is deliberate, clear, and unequivocal; (4) 

that if given conclusive effect, would be consistent with public policy; and (5) that 

is not destructive of the opposing party’s theory of recovery. Id. at 705–06. An 

attorney’s statements on behalf of a client may serve as a judicial admission. Id. at 

705.

Juansrich argued that Metro’s judicial admission occurred three separate 

times, all related to Metro’s motion for summary judgment asserting that 

Juansrich’s termination was adverse because Juansrich had materially breached the 

LLC Agreement. According to Juansrich, the first instance occurred in a 

supplemental motion for summary judgment which provided that “Here, Metro 

became operational on May 22, 2011.” The second occurred when a Metro lawyer 

stated during the summary judgment hearing that Juansrich “withdrew within five 

years after Metro became operational.” The third occurred in a Power Point slide

stating that “Metro became operational on May 22, 2011.” As explained above, 

“Operational” (emphasis added) was a defined term in the LLC Agreement. 

Operational however, also has a generic meaning when applied to a business,

meaning the state of being functional. Here, none of Metro’s alleged judicial 

admissions used “operational” with a capitalized “O.” Based on these dual 

meanings, and the fact Metro used the uncapitalized version of operational, we 
19

hold that it is not clear in what sense Metro used the term. Therefore, the three 

alleged admissions do not meet the requirement of being deliberate, clear, and 

unequivocal. See Estate of Guerrero, 465 S.W.3d at 706. We conclude that none 

of the statements rise to the level of a judicial admission as to the contractually 

defined term and therefore the trial court erred when it granted Juansrich’s second

Rule 166 motion. 

Because we have determined that the trial court erred when it granted

Juansrich’s second Rule 166 motion, we need not reach Metro’s argument that 

Francis waived the judicial admission by not objecting to all contrary evidence 

offered during the bench trial. Having determined that the trial court erred when it 

granted both of Juansrich’s Rule 166 Motions, we sustain Metro’s third issue in 

part, and conclude that Juansrich cannot simply elect to recover under its breach of 

contract cause action seeking payment on the value of its membership units. 

Instead, the breach of contract claim seeking payment for Juansrich’s ownership

interest must be remanded to the trial court for further proceedings. 

B. Distributions

As stated above, the trial court found that Juansrich was entitled to 

$191,764.21 as its proportionate share of the December 2014 distribution allegedly 

made by Metro for earnings in September and October 2014, a time-period when 

Juansrich was still a Metro member. Metro argues that the evidence is legally 

insufficient to support the trial court’s finding.

When an appellant challenges the legal sufficiency of the evidence on an 

adverse finding on an issue on which it did not have the burden of proof it must 

demonstrate on appeal that there is no evidence to support the adverse finding.

Univ. Gen. Hosp., L.P. v. Prexus Health Consultants, LLC, 403 S.W.3d 547, 550 

(Tex. App.—Houston [14th Dist.] 2013, no pet.). In conducting a legal-sufficiency 
20

review, we must consider all the record evidence in the light most favorable to the 

appealed finding and indulge every reasonable inference that supports it. Id. at 

550–51 (citing City of Keller v. Wilson, 168 S.W.3d 802, 821–22 (Tex. 2005)). 

The evidence is legally sufficient if it would enable reasonable and fair-minded 

people to reach the decision under review. Id. at 551. This Court must credit 

favorable evidence if a reasonable trier of fact could, and disregard contrary 

evidence unless a reasonable trier of fact could not. Id. The trier of fact is the sole 

judge of the witnesses’ credibility and the weight to be given their testimony. Id. 

We sustain a legal sufficiency (or no-evidence) issue only if the record 

reveals one of the following: (1) the complete absence of evidence of a vital fact; 

(2) the court is barred by rules of law or evidence from giving weight to the only 

evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact 

is no more than a scintilla; or (4) the evidence established conclusively the 

opposite of the vital fact. Id. Evidence that is so weak as to do no more than 

create a mere surmise or suspicion that the fact exists is less than a scintilla. Id. 

“The Texas Supreme Court has held that conclusory or speculative opinion 

testimony is incompetent evidence and cannot support a judgment.” Hong v. 

Integrated Eng’g, Inc., No. 14-06-00579-CV, 2008 WL 660650, at *4 (Tex. 

App.—Houston [14th Dist.] March 11, 2008, pet. denied) (mem. op.) (internal

quotations omitted).

Shelia Enriquez testified that she reviewed Metro’s financial documents, 

including financial statements, bank records, and Metro’s distribution schedule. 

These documents were admitted into evidence for the trial judge to review. 

Distributions for a particular month were normally made around the middle of the 

following month. Metro made a distribution for every month in 2014 except for 

the months of September and October. Enriquez opined that the November 
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distribution, made in December, included revenue attributable to the months of 

September and October.

Enriquez reviewed Metro’s records and determined that there was sufficient 

cash in the company in both September and October to make distributions, yet 

none were made. Enriquez then looked at the November distribution (made in 

December) and concluded that $801,600 of the total distribution of $1,043,600.37

was attributable to income earned in September and October. According to 

Enriquez, Juansrich’s percentage share of those earnings was 23.92268, which 

yields a payment for Juansrich of $191,764.21. During her trial testimony,

Enriquez explained, in a step-by-step manner, how she arrived at this amount, a 

number derived from Metro’s own records. We hold this testimony is not 

conclusory and is legally sufficient to support the trial court’s award of that exact

amount in the final judgment.

We therefore overrule this part of Metro’s third issue on appeal and affirm 

the final judgment’s award of $191,764.51 for missed distributions.

III. The trial court erred when it awarded Dr. Francis attorney’s fees

pursuant to the Covenant Not to Compete Act.

In its final issue on appeal, Metro challenges the trial court’s award of 

attorneys’ fees to Dr. Francis pursuant to the Covenant Not to Compete Act.3 See

Tex. Bus. & Com. Code Ann. § 15.51(c) (authorizing a trial court to award 

attorney’s fees in certain circumstances). The judgment’s fee award was based on 

the trial court (1) granting Dr. Francis’s motion for summary judgment declaring 

the non-competition provision in the LLC Agreement unenforceable; and (2) a 

3 There is no dispute on appeal that the Covenant Not to Compete Act is the sole basis 

pursuant to which the trial court awarded the $403,918.15 in attorney’s fees and costs because

Dr. Francis conceded on appeal “that the fees and costs were not recoverable under the [LLC]

Agreement.”
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subsequent pretrial order granting Dr. Francis’s motion seeking attorney’s fees 

pursuant to Subsection C of the statute. See id. The trial court ordered Metro to 

pay Dr. Francis $380,471.50 in attorney’s fees plus $23,446.65 in costs. The pretrial orders were then merged into the final judgment.

Metro argues in its final issue on appeal that the trial court erred when it 

awarded the attorney’s fees because (1) the primary purpose of the LLC 

Agreement was not to obligate Dr. Francis to render personal services; and (2) 

even if the primary purpose was to render personal services, Dr. Francis failed to 

establish that Metro knew at the time of the execution of the LLC Agreement that 

the covenant did not contain reasonable limitations as to time, geographical area, 

and the scope of activity to be restrained.

4

 Dr. Francis responds that the trial court 

did not abuse its discretion when it awarded the attorney’s fees because he 

adequately established both statutory requirements.

Subsection 15.51(c) of the Covenant Not to Compete Act provides that a 

“court may award the promisor the costs, including reasonable attorney’s fees, 

actually and reasonably incurred by the promisor in defending the action to enforce 

the covenant,” but only if the promisor can establish that “the primary purpose of 

the agreement to which the covenant is ancillary is to obligate the promisor to 

render personal services.” See Tex. Bus. & Com. Code Ann. § 15.51(c). We 

conclude that Dr. Francis failed to meet this initial, statutory requirement for the

recovery of fees.

This issue requires us to review the trial court’s construction of the 

Covenants Not to Compete Act. Statutory interpretation presents a question of law 

4 As stated above, the final judgment also includes a second award of attorney’s fees

totaling $23,048.50 pursuant to section 3.152(c) of the Texas Business Organizations Code. 

Metro affirmatively stated in its appellate briefing that it does not challenge this award on appeal. 

We therefore affirm this part of the final judgment.
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subject to de novo review. Texas Law Shield, LLP v. Crowley, 513 S.W.3d 582, 

588 (Tex. App.—Houston [14th Dist.] 2016, pet. denied). This issue also requires 

us to review the trial court’s construction of the LLC Agreement, the contract at 

issue in this dispute. If a contract is not ambiguous, it is construed as a matter of 

law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003). We 

review a trial court’s legal conclusions de novo. Trelltex, Inc. v. Intecx, L.L.C., 

494 S.W.3d 781, 790 (Tex. App.—Houston [14th Dist.] 2016, no pet.). When 

performing a de novo review, we exercise our own judgment and redetermine each 

legal issue. Id. Neither side has argued the LLC Agreement is ambiguous and we 

agree that it is not. See Lane-Valente Indus. (Nat’l), Inc, v. J.P. Morgan Chase 

Bank, N.A., 468 S.W.3d 200, 205 (Tex. App.—Houston [14th Dist.] 2015, no pet.) 

(stating that deciding whether a contract is ambiguous is a question of law). We 

therefore review the trial court’s implied legal conclusion that the primary purpose 

of the LLC Agreement was to obligate the members to provide personal services 

de novo.

Here, it is undisputed that Dr. Francis was never an employee of Metro and 

never had an employment contract with Metro. Instead, the only contract at issue 

here is the LLC Agreement, which the parties signed in order “to develop, own, 

and operate an ambulatory surgical center.” The LLC Agreement has lengthy 

provisions establishing how doctors could become and remain members of the

company. The LLC Agreement also covered the management of the surgical 

center. We conclude that the primary purpose of the LLC Agreement, as its title 

and content implies, was to create and then regulate a limited liability company for

the purpose of developing and operating an ambulatory surgical center from which 

its members could ultimately derive profits. See Rimkus Consulting Grp., Inc. v. 

Cammarata, 688 F.Supp.2d 598, 678 (S. D. Tex. 2010) (“The language of the 
24

Agreement shows that the primary purpose was not to obligate Bell to render 

services to Rimkus.”); CSL Prop. Mgmt. Co. v. Thyssenkrupp Elevator, Co., No.

01-11-00665-CV, 2013 WL 396252, at *6 (Tex. App.—Houston [1st Dist.] Jan.

31, 2013, no pet.) (mem. op.) (“A primary purpose of the assumption agreement, as 

evidenced on the face of the agreement, is to protect Thyssenkrupp from the risks 

associated with Greatland’s removal of Emergency Services as the general 

contractor for the project after the project commenced, especially with respect to

the payment of the contract price.”); Swinehart v. Stubbeman, McRae, Sealy, 

Laughlin & Browder, Inc., 48 S.W.3d 865, 877 (Tex. App.—Houston [14th Dist.]

2001, pet. denied) (holding in a legal malpractice case that the Statute of Frauds 

applied to underlying contract because, after “considering all the terms of the third 

contract, it is clear that the primary purpose of the contract was to secure interests 

in oil and gas lease” rather than the acquisition of geologic information gathered by

a petroleum geologist). We conclude that the primary purpose of the LLC 

Agreement was not to obligate its members to render personal services.

Accordingly, we hold that Dr. Francis failed to meet the first requirement for the 

recovery of attorney’s fees pursuant to the Covenant Not to Compete Act. See

Tex. Bus. & Com. Code Ann. § 15.51(c) (“If the primary purpose of the agreement 

to which the covenant is ancillary is to obligate the promisor to render personal 

services . . . the court may award the promisor the costs, including reasonable 

attorney’s fees, actually and reasonably incurred by the promisor in defending the 

action to enforce the covenant.”). We sustain Metro’s fourth issue, reverse the trial 

court’s award of attorney’s fees and costs pursuant to the Covenants Not to 

Compete Act and render judgment that Dr. Francis take nothing on that claim.

CONCLUSION

Because Metro has not challenged the trial court’s award of $23,048.50 in 
25

attorney’s fees pursuant to section 3.152(c) of the Texas Business Organizations 

Code, we affirm that part of the trial court’s final judgment. Having sustained

Metro’s first and second issues on appeal, we reverse the trial court’s final 

judgment based on Juansrich’s conversion cause of action and render judgment 

that Juansrich take nothing on its conversion, aiding and abetting, and unjust 

enrichment causes of action. Having reversed and rendered a take-nothing

judgment on Juansrich’s tort causes of action and having sustained the part of 

Metro’s third issue challenging the trial court’s Rule 166 orders which prevent

Juansrich from electing to recover on its breach of contract cause of action seeking 

payment for the value of its membership units, we remand that claim to the trial 

court for further proceedings. Having overruled the part of Metro’s third issue 

challenging the sufficiency of the evidence supporting the award of $191,764.21 

for missed distribution payments, we affirm that part of the final judgment.

Having sustained Metro’s fourth issue challenging the part of the trial court’s final 

judgment awarding attorney’s fees to Dr. Francis pursuant to the Covenants Not to 

Compete Act, we reverse and render judgment that Dr. Francis take nothing on that 

claim.

/s/ Jerry Zimmerer

Justice

Panel consists of Chief Justice Christopher and Justices Jewell and Zimmerer.