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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

DEAN CHASE,

Plaintiff

v.

RYAN E. HODGE, HELPING 

HANDS CAPITAL, LLC, A TEXAS 

LIMITED LIABILITY COMPANY;

Defendants

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No. 1:20-CV-00175-DH

MEMORANDUM ORDER AND OPINION AND FINAL JUDGMENT

Before the Court is Defendants’ Motion for Summary Judgment, Dkt. 97, 

Plaintiff’s Response, Dkt. 98, and Defendants’ Reply, Dkt. 106, along with all related 

briefing and exhibits. For the reasons stated below, the Court finds Defendants’ 

Motion should be GRANTED.

I. BACKGROUND 

This case involves a dispute about the ownership of Texas limited liability 

company Helping Hands Capital, LLC. Helping Hands provides non-recourse living 

expenses for parties involved in personal injury claims and suits. Helping Hands was 

formed in 2013, by Ryan Hodge, an attorney licensed in and residing in Kansas, who 

formed the business as its sole member. Dean Chase, a Florida citizen, asserts an 

ownership claim in Helping Hands, based upon an alleged agreement among Hodge, 

Chase, and another individual, Mark Guedri, to partner in a litigation funding 

business, which was ultimately organized as Helping Hands. Chase filed the suit in 

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Travis County on February 11, 2020, Dkt. 1-1, which Defendants removed to federal 

court on the basis of diversity on February 17, 2020. Dkt. 1-4. 

After removal, Magistrate Judge Andrew W. Austin submitted a Report and 

Recommendation to the district court. Dkt. 72. The district court adopted the Report 

and Recommendation and dismissed the majority of Chase’s claims. Accordingly, 

Chase’s remaining claims against Hodge are: (1) breach of fiduciary duty arising from 

the formation of Helping Hands Capital, LLC, Dkt. 72, at 18; and (2) breach of 

contract. The district court also did not dismiss the requested remedies against all 

Defendants for: (1) declaratory relief and (2) the appointment of a receiver. 

Defendants now move for summary judgment asserting: (1) Chase’s claims are 

barred by the applicable statute of limitations; (2) Chase’s claims are barred by the 

Statute of Frauds: (3) Chase’s claims fail for indefiniteness; and (4) appointment of a 

receiver is not available to Chase under Texas law as he is not a partner or joint 

owner of Helping Hands Capital, LLC. 

II. FACTUAL BACKGROUND

The following facts are taken from Chase’s First Amended Complaint, Dkt. 54. 

Chase asserts that in 2013, Ryan Hodge, Chase, and Mark Guedri, decided to start a 

business to provide loans to litigants, which would be secured by the future proceeds 

of any lawsuit settlement. At the time, the three were partners in a separate business, 

HMR, that provided case expense loans. Chase maintains that Hodge, acting as an 

attorney for Chase and Guedri, formed the new entity, and that the parties agreed to 

treat it as an equal partnership in which each owned one third of the company, and 

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would share profits in thirds as well. On March 28, 2013, Hodge formed Helping 

Hands Capital, LLC, as a Texas limited liability company, listing himself on the 

Certificate of Formation as the Managing Member, but making no mention of Chase 

or Guedri in the filing. 

From 2013 through 2016 the Company typically reinvested profits into the 

Company; however, when funds were occasionally distributed to the three partners, 

it was always on the same one-third basis as initially agreed upon. In 2016, Guedri 

tendered his interest back to the Company. Chase asserts Hodge acknowledged to 

Chase in writing that going forward they were “50/50 partners.” In 2016 and 2017, 

distributions to Hodge and Chase were allegedly made on a 50/50 basis. Chase alleges 

that up to 2017, Hodge was always forthcoming with financial information on the 

Company, and Chase and Hodge worked together to further the interests of the 

Company. In early 2018, Chase began pressing Hodge for financial information on 

the Company. On April 26, 2018, Hodge sent a communication to Chase advising that 

Chase’s interest in the Company was an “economic benefit only” and not “legal 

ownership.” Chase alleges that Hodge instructed Chase to cease telling third parties 

that he was an owner of the Company, despite Hodge having mentioned to third 

parties on countless occasions that Chase was his “partner” and an “owner of Helping 

Hands.” 

Chase contends that Hodge asserted for the first time in 2018 that the 

Company was “owned 100% by a trust” and that Hodge had no ownership in Helping 

Hands himself. It was during this timeframe that Chase alleges Hodge began 

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excluding Chase from the business. On May 13, 2018, Hodge and Chase met in 

Washington, DC to try to resolve their issues regarding Helping Hands. Chase alleges 

that during this meeting Hodge again assured Chase that each were “50/50 partners” 

in Helping Hands and each would continue to work to realize solid growth and an 

exit strategy for the Company. Following the meeting, Chase requested he be 

provided with all information and documents pertaining to Helping Hands since its 

inception and requested “complete and unlimited access” to Helping Hands’ books 

and records on a going forward basis. Chase requested that this information be 

provided on or before June 1, 2018. Hodge, however, never provided the information.

On January 11, 2019, Hodge forwarded “preliminary financials” to Chase, and 

Chase requested further documentation be provided to a forensic accountant. Hodge 

refused. Throughout 2019, Chase tried to resolve the issues with Hodge. Then, on 

September 26, 2019, Hodge emailed Chase and offered to buy Chase’s “interests” in 

Helping Hands for $25,000, or otherwise he would “transfer” his money out of Helping 

Hands and sell the assets and wind down the Company. Chase argues this offer was 

patently disingenuous because the company has made and received millions of dollars 

in loans over the past two years. 

III. LEGAL STANDARD

Summary judgment is appropriate when the pleadings, the discovery and 

disclosure materials on file, and any affidavits show that there is no genuine dispute 

as to any material fact and that the moving party is entitled to judgment as a matter 

of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); 

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Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007). A dispute regarding a 

material fact is “genuine” if the evidence is such that a reasonable jury could return 

a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 248 (1986). When ruling on a motion for summary judgment, the court is 

favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 

U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. Further, a court “may not make 

credibility determinations or weigh the evidence” in ruling on a motion for summary 

judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); 

Anderson, 477 U.S. at 254-55.

Once the moving party has made an initial showing that there is no evidence 

to support the nonmoving party’s case, the party opposing the motion must come 

forward with competent summary judgment evidence of the existence of a genuine 

fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not 

competent summary judgment evidence, and thus are insufficient to defeat a motion 

for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 

(5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported 

speculation are not competent summary judgment evidence. Id. The party opposing 

summary judgment is required to identify specific evidence in the record and to 

articulate the precise manner in which that evidence supports his claim. Adams v. 

Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). If the nonmoving 

party fails to make a showing sufficient to establish the existence of an element 

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essential to its case and on which it will bear the burden of proof at trial, summary 

judgment must be granted. Celotex, 477 U.S. at 322-23.

IV. ANALYSIS 

A. Limitations 

Defendants assert that limitations bar all of Chase’s claims. The parties agree 

that Texas’ four-year statute of limitations applies to Chase’s claims for breach of 

contract and breach of fiduciary duty. See, e.g., Tex. Civ. Prac. & Rem. Code 

§§ 16.004(a)(5) (breach of fiduciary duty), 16.051 (residual limitations period, 

applicable to breach-of-contract claims); Eagle Oil & Gas Co. v. TRO-X, L.P., 619 

S.W.3d 699, 707 (Tex. 2021). The parties agree that the same four-year statute of 

limitations also applies to the remedies of declaratory judgment and receivership. 

See, e.g., Ammerman v. Ranches of Clear Creek Cmty. Ass’n, 562 S.W.3d 622, 636 

(Tex. App.—Houston [1st Dist.] 2018, no pet.); Petro Harvester Operating Co., L.L.C. 

v. Keith, 954 F.3d 686, 699 (5th Cir. 2020); Dkt. 98, at 8 (Plaintiff’s brief states 

“Plaintiff agrees with Defendants that Texas law governs the limitations issue in this 

case and that the four-year statute applies.”)

Accrual of Chase’s claim

Defendants assert that Chase’s claims accrued on March 28, 2013, when Hodge

formed Helping Hands Capital, LLC, and executed the Limited Liability Company 

Operating Agreement for Helping Hands Capital, LLC. Dkt. 97, at 14; Dkt. 97-5, 

Certificate of Formation; Dkt. 97-6, Operating Agreement. Chase argues that his 

claim accrued in 2018 “when Ryan Hodge first asserted that Plaintiff was not an 

owner of Helping Hands, LLC.” Dkt. 98, at 8. Chase contends that “he had no idea 

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that Hodge had breached the parties’ agreement until Hodge admitted it in the 

Spring of 2018.” Dkt. 98, at 12. 

In support of their contention that the formation of Helping Hands is the 

relevant legal injury in this case, Defendants rely on statements in Chase’s First 

Amended Complaint, the live pleading in this case, which he verified. Dkt. 54. In it, 

Chase states: 

7. In 2013, Plaintiff Dean Chase (“Chase”), Defendant Hodge, and Mark 

Guedri (“Guedri”) decided to start a business to provide loans to litigants 

with said loans being secured by the future proceeds of any lawsuit 

settlement. At the time, the three gentlemen were partners in a separate 

business, known as HMR, that provided case expense loans, and each 

saw the need for this additional service. 

8. Hodge, as attorney for Chase and Guedri, was to form an entity. The 

parties agreed to treat the company as an equal partnership in which 

each owned one third of the company. The three agreed that all profits 

from the company would be distributed on this basis.

9. Hodge then formed Helping Hands Capital, LLC, as a Texas limited 

liability company on March 28, 2013. Hodge was listed on the Certificate 

of Formation as the Managing Member of Helping Hands, but he 

omitted Chase and Guedri from the filing.

10. The initial Company Agreement listed Hodge as 100% owner of the 

10,000 member units of the Company issued and outstanding as of 

March 28, 2013. Despite Plaintiff trusting his friend, partner, and 

attorney to follow through with the parties’ agreement, Hodge did not 

include Plaintiff or Guedri on the Company Agreement. 

***

21. Defendant Ryan Hodge also owed Plaintiff a fiduciary duty because:

a) He served as Plaintiff’s attorney in Texas in connection with 

the formation and launch of the business that became Helping Hands;

b) He served as Plaintiff’s attorney for business and personal 

matters in Texas before the formation of Helping Hands;

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c) He entered into a de facto partnership with Plaintiff to 

carry out a litigation funding business in Texas ...

***

24. Defendant Ryan Hodge breached his fiduciary duty to Plaintiff in 

the following respects:

***

b) Defendant Ryan Hodge engaged in self-dealing when, 

unbeknownst to Plaintiff, he named himself the 100% owner of 

Helping Hands and deliberately omitted Plaintiff from Helping 

Hands’ corporate documents.

Id., at 2, 5, 6. 

Defendants cite Texas law holding that a cause of action accrues when the 

allegedly wrongful act effects an injury, regardless of when the plaintiff learns of the 

injury. Dkt. 97, at 15 (citing Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 

609 (Tex. 2017); Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990). The 

date a cause of action accrues is a question of law. See, e.g., Exxon Corp. v. Emerald 

Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011); Holy Cross Church of God in Christ 

v. Wolf, 44 S.W.3d 562, 567 (Tex. 2001). 

Chase responds that Defendants misinterpret the general rule as to when a 

cause of action accrues. Dkt. 98, at 8. Chase argues, without citing any case law, that 

in Texas, “claims accrue when a wrongful act has taken place and an injury has been 

caused. Both the act and the injury must have occurred for the claim to accrue.” Dkt. 

98, at 8. Chase asserts that the wrongful act occurred 2013, but the injury “did not 

occur until he was deprived of the profits and the benefits of the business in 2018 and 

2019.” Id.

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Defendants reply that Chase is confusing the concept of accrual and “legal 

injury” and the discovery rule. The undersigned agrees. Under Texas law, a cause of 

action accrues, and the statute of limitations begins to run, when facts come into 

existence that authorize a party to seek a judicial remedy. Provident Life & Acc. Ins. 

Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003). In most cases, a cause of action accrues 

when a wrongful act causes a legal injury, regardless of when the plaintiff learns of 

that injury or if all resulting damages have yet to occur. Id. (citing S.V. v. R.V., 933 

S.W.2d 1, 4 (Tex. 1996)).

The legal injury in this case, “the wrongful act”—the alleged breaches of 

fiduciary duty1 and contract, as identified by Chase in his First Amended Complaint 

and agreed to in his Response—is when Hodge “named himself the 100% owner of 

Helping Hands and deliberately omitted Plaintiff from Helping Hands’ corporate 

documents.” Dkt. 54, at 6. This occurred on March 28, 2013, and as a matter of law, 

the undersigned finds this is when Chase’s cause of action accrued. Accordingly, 

unless Chase can make out an exception to the legal injury rule, his breach of contract 

and breach of fiduciary duty claims are time-barred.

The discovery rule 

Chase argues the discovery rule tolls the statute of limitations in this case. 

Dkt. 98, at 10. Defendants argue that Chase may not rely on the discovery rule to 

1 For breach of fiduciary duty and breach of contract claims, an injury occurs at the moment 

of breach. Leigh v. Weiner, 679 S.W.2d 46, 48-49 (Tex. App.—Houston [14th Dist.] 1984, no 

writ) (breach of fiduciary duty); Barker v. Eckman, 213 S.W.3d 306, 311 (Tex. 2006) (breach 

of contract).

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delay accrual of his claims because: (1) the nature of the injury incurred was not 

inherently undiscoverable; and (2) Chase failed to properly plead the discovery rule, 

as required by the Fifth Circuit. Dkt. 97, at 19.

Chase maintains that the relevant injury did not occur in 2013 when Helping 

Hands, LLC, was formed, but when Hodge asserted Chase was not an owner, and he 

was deprived of the profits and benefits of the business which occurred in 2018 and 

2019. Dkt. 98-1, Chase Declaration. Chase argues that until that time, he was 

included in the business, he continued to receive payments, that Hodge fraudulently 

concealed his wrongdoing, and that he “had no idea” he was not a partner in Helping 

Hands until Hodge notified him in 2018. Dkt. 98, at 9-10. Chase further asserts that 

the injury in this case was inherently undiscoverable because Hodge fraudulently 

concealed his wrongdoing, and that that he put the discovery rule into issue in 

paragraphs 13-15 of his First Amended Complaint. Dkt. 98, at 10. 

The discovery rule is a “narrow exception” to the legal injury rule that “defers 

accrual of a cause of action until the plaintiff knew or, exercising reasonable diligence, 

should have known of the facts giving rise to the cause of action.” Comput. Assocs. 

Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). It “applies when the injury 

is by its nature inherently undiscoverable.” Childs v. Haussecker, 974 S.W.2d 31, 36-

37 (Tex. 1998). “An injury is inherently undiscoverable if it is by nature unlikely to 

be discovered within the prescribed limitations period despite due diligence.” S.V., 

933 S.W.2d at 25. “The determination of whether an injury is inherently 

undiscoverable is made on a categorical basis rather than on the facts of the 

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individual case.” Archer v. Tregellas, 566 S.W.3d 281, 290 (Tex. 2018) (citing HECI 

Expl. Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998)). 

The question is whether the injury is “the type of injury that could be 

discovered through the exercise of reasonable diligence.” BP Am. Prod. Co. v. 

Marshall, 342 S.W.3d 59, 66 (Tex. 2011) (citing Wagner & Brown, Ltd. v. Horwood, 

58 S.W.3d 732, 734-35 (Tex. 2001)). Further, “knowledge of facts that could cause a 

reasonably prudent person to make an inquiry that would lead to discovery of the 

cause of action is in the law equivalent to knowledge of the cause of action for 

limitation purposes.” Mitchell Energy Corp. v. Bartlett, 958 S.W.2d 430, 436 (Tex. 

App.—Fort Worth 1997, pet. denied) (internal quotations omitted).

Defendants first argue that Chase did not plead the discovery rule. The 

discovery rule must be affirmatively pleaded in federal court, whether specifically or 

through “sufficient facts to put the defense on notice of the theories on which the 

complaint is based.” Colonial Penn Ins. Co. v. Mkt. Planners Ins. Agency, Inc., 1 F.3d 

374, 376 (5th Cir. 1993). Chase concedes that he “has not yet specifically pled the 

discovery rule,” but he asserts he put it “plainly in issue in his First Amended 

Complaint. Dkt. 98, at 10. He cites the following paragraphs in support: 

13. In 2016, Guedri tendered his interest back to the Company and 

Hodge acknowledged to Chase in writing that going forward they were 

“50/50 partners.” During the timeframe of 2016 and 2017, distributions 

to Hodge and Chase were allegedly made on a 50/50 basis. Up to the 

2017 timeframe, Hodge had always been forthcoming with financial 

information of the Company, and Chase and Hodge worked together to 

further the interests of the Company.

14. In early 2018, Chase began pressing Hodge for financial information 

on the Company. On April 26, 2018, Hodge sent a communication to 

Chase advising—for the first time—that Chase’s interest in the 

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Company was an “economic benefit only” and not “legal ownership.” He 

instructed Chase to cease telling third parties that he (Chase) was an 

owner of the Company, despite Hodge having mentioned to third parties 

on countless occasions that Chase was his “partner” and an “owner of 

Helping Hands.” Hodge also asserted for the first time in 2018 that the 

Company was “owned 100% by a trust” and that Hodge had no 

ownership in Helping Hands himself. It was during this timeframe that 

Hodge began excluding Chase from the business.

15. On May 13, 2018, Hodge and Chase met in Washington, DC to try to 

resolve their issues regarding Helping Hands. During this meeting 

Hodge again assured Chase that each were “50/50 partners” in Helping 

Hands and each would continue to work to realize solid growth and an 

exit strategy for the Company in order to reap the rewards of their many 

years of sacrifice in building the Company. Following the meeting, 

Chase requested he be provided with all information and documents 

pertaining to Helping Hands since its inception and requested “complete 

and unlimited access” to Helping Hands’ books and records on a go 

forward basis. Chase requested that this information be provided on or 

before June 1, 2018; however, said information was never provided by 

Hodge.

16. On January 11, 2019, Hodge forwarded “preliminary financials” to 

Chase, and Chase requested further documentation be provided to a 

forensic accountant. Hodge refused.

17. Throughout 2019, Chase tried to resolve the issues with Hodge. 

However, on September 26, 2019, Hodge sent an email to Chase wherein 

he offered to buyout Chase’s “interests” in Helping Hands for $25,000.00 

or otherwise threatened to “transfer” his money out of Helping Hands 

and sell the assets and wind down the Company. This offer was patently 

disingenuous, because the company has made and received millions of 

dollars in loans over the past two years.

18. Chase is now aware that Hodge has been involved in a hotly 

contested divorce and fears that Hodge may be wasting or transferring 

assets and revenues of the Company in an effort to hide the money from 

both Chase and Hodge’s ex-wife. It has now come to light that Defendant 

Ryan Hodge has engaged in a consistent scheme of self-dealing, 

usurpation of corporate opportunities, and wasting of company assets. 

19. All conditions precedent to Chase’s recovery have occurred or have 

been waived, excused, or otherwise satisfied. All notices required have 

been provided or waived, excused, or otherwise satisfied.

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Dkt. 54, at 3-4. 

Defendants argue that the allegations in these paragraphs do not concern the 

wrongful acts that are the bases of Chase’s claims─ defined as the omission of Chase 

as a member of and from the operating documents of Helping Hands Capital, LLC. 

Dkt. 106, at 10. The undersigned agrees that these paragraphs do not plead facts that 

put the discovery rule squarely in issue, sufficient to put Defendants on notice of the 

discovery rule; but even if these pleadings were adequate to do so, Chase’s reliance 

on the discovery rule fails on additional bases. 

Inherently undiscoverable 

The parties dispute whether the discovery rule is available to Chase because 

the nature of his injuries is “inherently undiscoverable.” Defendants assert that any 

injury to Chase based upon exclusion from the Helping Hands corporate documents 

was discoverable, and he cannot rely on the discovery rule because: (1) Chase was not 

listed on the Helping Hands Capital, LLC certificate of formation which was publicly 

filed; (2) Chase is listed as a member on the certificate of formation of TransAmerica 

Medical Assistance, LLC; (3) Chase had a prior dispute with former business 

associates where he alleged they breached an oral agreement to form and operate a 

business, which occurred prior to the formation of Helping Hands; (4) Chase had 

executed company agreements in the past for limited liability companies; (5) Chase 

received Form 1099 tax forms no later that February 2015; and (6) Chase never 

received a Schedule K-1 from Helping Hands, LLC. Dkt. 97, at 20-21. Thus, 

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Defendants assert, Chase either knew or should have known he was not a partner in 

Helping Hands. 

Chase responds that: (1) a company is not required to list all its members on 

its corporate filings or amend its filings when ownership changes; (2) the filing with 

the Secretary of State did not constitute constructive notice to Chase as it did not rule 

out Chase as an owner, because companies are not required to disclose all their 

owners; (3) his unrelated dispute with others, and the fact that he had executed 

corporate documents in the past, have no relevance to this case; and (4) Chase’s lack 

of receipt of a K-1 filing is legally irrelevant, because for all Chase knew, the company 

had elected to be taxed as a corporation, or Hodge was delinquent in filing K-1s. Dkt. 

98, at 11-12. 

Reviewing the summary judgment evidence, the undersigned finds that the 

alleged injuries in this case were not “inherently undiscoverable,” and that in

exercising reasonable diligence Chase knew or should have known about his status 

as a non-member of Helping Hands. Chase alleges that Hodge breached his fiduciary 

duty when he omitted him from the corporate formation documents. There is no 

dispute that these documents are publicly available, and Chase could have easily 

ascertained whether or not he was included on these documents once they were filed. 

See Luck v. Alamo Printing Co., 190 S.W. 204, 204 (Tex. App.—San Antonio 1916, no 

writ) (cited by Defendants, holding publicly filed documents constitute constructive 

notice); see also In re Cornerstone E & P Co., L.P., 436 B.R. 830, 862 (Bankr. N.D. 

Tex.) (“Under Texas law, ‘[a] person is charged with constructive notice of the actual 

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knowledge that could have been acquired by examining public records.’)(quoting 

Mooney v. Harlin, 622 S.W.2d 83, 85 (Tex. 1981)); Pokorne Priv. Cap. Grp., LLC v. 

21st Mortg. Corp., No. 13-06-575-CV, 2008 WL 963296, at *8 (Tex. App.—Corpus 

Christi Apr. 10, 2008, pet. denied) (filings with Secretary of State put party on 

constructive notice of record). 

To the extent that Chase argues that a company is not required to list its 

members every time they change, this argument does not make sense in the context 

of Chase’s claims, and in light of his assertion that Helping Hands had three 

purported initial owners, himself, Hodge, and Guedri.2 Importantly, his breach of 

fiduciary claim is explicitly based on the failure to include him in the formation 

documents. He pleaded, “Despite Plaintiff trusting his friend, partner, and attorney 

to follow through with the parties’ agreement, Hodge did not include Plaintiff or 

Guedri on the Company Agreement.” Dkt. 54. The evidence supports that Chase is a 

sophisticated businessman, who not only had formed other companies, but had sued 

another former business associate for this same issue prior to the inception of Helping 

Hands. 

Chase argues that he could not have determined who the legal owners of 

Helping Hands were without getting that information from Hodge, who was unwilling 

to provide it. Dkt. 98, at 11. However, the fact that Chase was paid as a 1099 contract 

employee, rather than receiving a K-1 tax form, is summary judgment evidence that 

2 See Texas Secretary of State, Form 205 “Certificate of Formation—Limited Liability 

Company,” https://sos.state.tx.us/corp/forms/205_boc.pdf (requiring the filing entity to list 

the managers and initial members of the limited liability company along with their 

addresses). 

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exercising reasonable diligence, he knew or should have known he was not a member 

or owner of Helping Hands. In an LLC partnership, each owner should show their 

pro-rata share of partnership income, credits and deductions on a Schedule K-1.3

The summary judgment evidence establishes that Chase was issued Form 

1099-MISC forms by Helping Hands, with income listed as “nonemployee 

compensation.” Dkt. 97-2, at 1-2. This form is issued to independent contractors, to 

report nonemployee compensation.4 And while Chase argues Helping Hands might 

have chosen to be taxed as a corporation, even then a C Corporation reports payments 

to investors through a 1099-DIV form.5 And in the case of an S Corporation, each 

owner reports their pro-rata share of corporate income, credits and deductions on 

Schedule K-1.6 Thus, even if Helping Hands had been taxed as a corporation, Chase

would not have received a 1099-MISC. Chase also agreed in his deposition that a 1099 

is typically sent to independent contractors and not business owners. Dkt. 97, at 21-

22. Thus Chase knew or should have known from his receipt of the 1099-MISC form 

3 See Internal Revenue Service Online Guide, “LLC Filing as a Corporation or Partnership,” 

https://www.irs.gov/businesses/small-businesses-self-employed/llc-filing-as-a-corporation-orpartnership#:~:text=If%20the%20LLC,of%20partnership%20earnings (last visited January 

19, 2023).

4 See Internal Revenue Service Online Guide, “Reporting Payments to Independent 

Contractor,”https://www.irs.gov/businesses/small-businesses-self-employed/reportingpayments-to-independent-contractors#:~:text=You%20made%20the,during%20the%20year 

(last visited January 19, 2023).

5 See id., “About Form 1099-DIV, Dividends and Distributions,” https://www.irs.gov/formspubs/about-form-1099-

div#:~:text=financial%20institutions%20to%20report%20dividends%20and%20other%20dis

tributions%20to%20taxpayers (last visited January 19, 2023). 6 Id., “LLC Filing as a Corporation or Partnership,” https://www.irs.gov/businesses/smallbusinesses-self-employed/llc-filing-as-a-corporation-orpartnership#:~:text=If%20the%20LLC%20is%20a%20corporation,Schedule%20K%2D1%20(

Form%201120%2DS) (last visited January 19, 2023). 

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reporting his 2014 income from Helping Hands, mailed to him no later than January 

31, 2014, that at that time he was not a member or owner of Helping Hands. This is 

especially true in light of the fact that Chase was a member of other limited liability 

companies, and aware of how monies were distributed to members. The undersigned 

finds that the failure to include Chase on the Helping Hands formation documents 

was not inherently undiscoverable.

Defendants also maintain that Chase cannot rely on the discovery rule as he 

previously admitted he was aware that Hodge formed Helping Hands Capital, LLC 

with himself as the sole member at the time of formation. In Chase’s state court 

Petition, filed with this Court upon removal, he pleaded that:

Hodge, as attorney for Chase and Guedri, suggested that he form and 

own the entity [a company to provide loans to litigants with said loans 

being secured by the future proceeds of any settlement]; however, he 

stated he would treat the company as a partnership in which each owned 

a third of the company. They agreed all profits would be distributed on 

this basis. Hodge then formed Helping Hands Capital, LLC, as a Texas 

limited liability company on March 28, 2013. Hodge was listed on the 

Certificate of Formation as the Managing Member of Helping Hands. 

The initial Operating Agreement of the Company listed Hodge as 100% 

owner of the 10,000 member units of the Company issued and 

outstanding as of March 28, 2013. 

Dkt. 1-1, at 6 (emphasis added). Chase verified the facts set forth in this petition via 

sworn declaration. Id., at 22-23. 

Thus, the verified state court pleadings, which differ from his later-filed 

declaration, state that Chase was aware of the fact that he was not listed on the

formation documents or operating agreement of Helping Hands when the company 

was formed, and did not legally own the company. This is also in conflict with Chase’s 

First Amended Complaint, where he alleges that “despite Plaintiff trusting his friend, 

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partner, and attorney to follow through with the parties’ agreement, Hodge did not 

include Plaintiff or Guedri on the Company Agreement.” Dkt. 54, at 2. Chase further 

asserts, in his later-filed First Amended Complaint, “On April 26, 2018, Hodge sent 

a communication to Chase advising – for the first time – that Chase’s interest in the 

Company was an “’economic benefit only’ and ‘not legal ownership.’” Id., at 3. This 

statement is in direct conflict with Chase’s earlier assertion that the parties knew 

Hodge was the sole owner of Helping Hands, LLC. As stated in Judge Austin’s prior 

Report and Recommendation, inconsistent pleadings do not constitute unequivocable 

judicial admissions. Dkt. 72, at 19. However, as also noted by Judge Austin, “the 

allegation in the original complaint that Chase knew he was omitted from the 

formation documents is troubling,” but does not mandate dismissal. Dkt. 72, at 19.

However, the Declaration of Mark Guedri, the other Helping Hands “partner” 

supports that Chase was aware or should have been aware that he was not included 

in the formation documents of Helping Hands Capital, LLC. Dkt. 97-4. Guedri 

explains that Guedri, Chase, and another individual, Terry Carden, formed HMR 

Funding, LLC, in February 2012. Hodge eventually entered an agreement with HMR 

Funding, LLC, that allowed him to earn-in a small 3% equity position in that 

company. Guedri explained that as Board of Manager Members and executives of 

HMR Funding, LLC, both he and Chase entered into employment agreements that 

precluded them from “diverting our work attention away from HMR Funding, LLC.” 

Id., at 5. He also explained that HMR Funding, LLC’s Operating Agreement did not 

allow it to engage in the pre-settlement cash advance business of Helping Hands 

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Capital, LLC. And, in his Declaration, Chase does not actually state that he believed 

he was included on the formation documents. See, e.g., Dkt. 98-1. The summary 

judgment evidence establishes that, despite his claims in his First Amended 

Complaint, Chase was aware or should have been aware he was not included on the 

formation documents of Helping Hands, LLC, and in fact, would have been in 

contravention of his employment agreement had he done so.

For all of these reasons, the Court finds that the discovery rule does not apply, 

and Chase’s claims are therefore barred by the statute of limitations. 

Fraudulent concealment 

Chase also argues that the discovery rule should apply because Hodge 

pretended that Chase was an owner of Helping Hands, allowing him to weigh in on 

corporate matters and paying him a share of the profits. Dkt. 98, at 9. “[F]raudulent 

concealment estops the defendant from relying on the statute of limitations as an 

affirmative defense to [the] plaintiff’s claim.” Comput. Assocs., 918 S.W.2d at 456 

(alterations in original) (quoting Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1983)). 

Defendants argue that Chase cannot argue fraudulent concealment because he failed 

to plead it. 

Texas courts have recognized fraudulent concealment as an affirmative 

defense to limitations that the plaintiff must plead and prove. Matter of Placid Oil 

Co., 932 F.2d 394, 399 (5th Cir. 1991); Weaver v. Witt, 561 S.W.2d 792, 793 (Tex. 1977) 

(per curiam); FDIC v. Henderson, 61 F.3d 421, 430 (5th Cir. 1995) (requiring that 

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fraudulent concealment be pleaded to be considered by a jury). Chase did not plead 

fraudulent concealment. Accordingly, this defense to limitations fails.

But even if he did, the doctrine “does not extend the limitations period 

indefinitely.” Etan Indus., Inc. v. Lehmann, 359 S.W.3d 620, 623 (Tex. 2011). Instead, 

the limitations period is tolled only until “a party learns of facts, conditions, or 

circumstances which would cause a reasonably prudent person to make inquiry, 

which, if pursued, would lead to the discovery of the concealed cause of action. 

Knowledge of such facts is in law equivalent to knowledge of the cause of action.”

Borderlon, 661 S.W.2d at 909.

Here, for the reasons explained above, Chase knew or should have known that 

he was not a member or owner of Helping Hands as early as 2015, when he received 

his first 1099-MISC. This was enough to make a reasonably prudent person inquire 

into whether he had a cause of action against Hodge for breach of fiduciary duty and 

breach of contract in setting up Helping Hands. See Marcus & Millichap Real Estate 

Inv. Services of Nevada, Inc. v. Triex Texas Holdings, LLC, No. 21-0913, 2023 WL 

175434, at *4-5 (Tex. Jan. 13, 2023). Chase’s fraudulent concealment assertion does 

not negate Defendants’ statute of limitations defense.

B. Statute of Frauds 

Defendants also argue that Chase’s claims are barred by the statute of frauds. 

Chase argues the statute of frauds is inapplicable because the contract in issue could 

be performed within one year. 

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The purpose of the statute of frauds is to “remove uncertainty, prevent 

fraudulent claims, and reduce litigation” by requiring that certain agreements be in 

writing and signed by the parties. Haase v. Glazner, 62 S.W.3d 795, 799 (Tex. 2001). 

The statute of frauds is an affirmative defense in a breach of contract suit and renders 

a contract that falls within its purview unenforceable. Tex. Bus. & Com. Code

§ 26.01(a). Whether an agreement falls within the statute of frauds is a question of 

law. Hill v. Shamoun & Norman, LLP, 544 S.W.3d 724, 735 (Tex. 2018). 

An agreement that cannot be completed within one year is not enforceable 

unless it is in writing and signed by the person to be charged. Tex. Bus. & Com. Code

§ 26.01(a), (b)(6); Niday v. Niday, 643 S.W.2d 919, 920 (Tex. 1982) (per curiam). If the 

agreement is capable of being performed within one year, it is not precluded by the 

statute of frauds. Hairston v. S. Methodist Univ., 441 S.W.3d 327, 334 (Tex. App.—

Dallas 2013, pet. denied).

In determining whether an agreement is capable of being performed in one 

year, courts compare the date of the agreement to the date when the performance is 

to be completed. Id. This analysis is complicated somewhat when the agreement does 

not state the time for performance and does not indicate that it cannot be performed 

within a year. Gano v. Jamail, 678 S.W.2d 152, 153 (Tex. App.—Houston [14th Dist.] 

1984, no writ). Although such agreements generally do not fall within the statute of 

frauds, Miller v. Riata Cadillac Co., 517 S.W.2d 773, 775-76 (Tex. 1974), when the 

agreement cannot be performed within one year because of its terms or the nature of 

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the required acts, the statute of frauds applies, and the agreement must be in writing. 

Niday, 643 S.W.2d at 920.

Chase pleaded: “Chase and Hodge entered into a contract to combine their 

efforts to make loans to finance litigation and split the profits that came from those 

efforts.” Dkt. 54, at ¶ 30. He pleads they entered into an oral contract as he has not 

supplied a written agreement. Where an oral contract omits the performance term, 

duration may properly be implied from extrinsic evidence. If that evidence 

conclusively proves that the contract cannot be completed within one year, the oral 

contract violates the statute of frauds as a matter of law. Krueger v. Young, 406 

S.W.2d 751 (Tex. Civ. App.—Eastland 1966, writ ref’d n.r.e.).

In considering whether an oral agreement that does not explicitly mention a 

time for performance falls within the statute of frauds, the court must determine 

whether the parties intended to complete the agreement within a year. 

Metromarketing Servs., Inc. v. HTT Headwear, Ltd., 15 S.W.3d 190, 195 (Tex. App.—

Houston [14th Dist.] 2000, no pet.). In conducting this analysis, courts look to the 

intended performance of the agreement. Id. at 196 (noting “reasonable time” for 

performance is based on circumstances surrounding adoption of agreement, the 

situation of the parties, and the subject matter of the contract). The duration of the 

agreement “may properly be implied from extrinsic evidence.” Niday, 643 S.W.2d at 

920. If the evidence conclusively proves the alleged oral agreement cannot be 

completed within one year, the agreement violates the statute as a matter of law. Id.

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There is no evidence either Chase or Hodge thought the litigation-funding 

agreement could be completed within one year, and all the available evidence 

indicated they anticipated it would take much longer to perform the object of the 

alleged agreement. Chase testified in his deposition that “Helping Hands was going 

to provide money for injured plaintiffs [for] what’s called pre-settlement advances for 

living expenses.” Dkt. 97-7, at 28:4-8, and 28:18-20. Hodge has submitted evidence 

that providing litigation funding to personal-injury plaintiffs is a years-long 

endeavor. Dkt. 97-1 and Dkt. 97-4. And the evidence shows that Helping Hands 

continued its litigation funding business for multiple years. Id. Also, the parties were 

partners in HMR, another litigation funding business, and were well aware that it 

would commonly take years to receive a return on funds advanced to personal injury 

claimants. Dkt. 97-1, at 1-2. Chase likewise testified in his declaration that he 

“worked for over 5 years to bring business to Helping Hands.” Dkt. 98-1. 

Chase asserts that the relevant agreement was to start Helping Hands and 

share the ownership equally, “which could be completed within a matter of weeks.” 

Id. But, the relevant alleged agreement, as he acknowledged, included sharing profits 

from the litigation funding business, Dkt. 54, and the summary judgment evidence 

establishes this could not occur within a matter of weeks. Dkt. 97-7, Chase 

Declaration (acknowledging that from 2013 to 2016 Helping Hands focused on growth 

and redeployed profits into the company, with the long-term expectation the company 

would grow “for three to seven years”). The alleged agreement was not just to start a 

litigation funding business, but also to operate one and share profits, which could not 

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occur within one year. See Yee v. Anji Techs., LLC, No. 05-18-00662-CV, 2019 WL 

2120290, at *5 (Tex. App.—Dallas May 15, 2019, no pet.) (finding the statute of frauds 

applied because the parties had conducted business for five years, the purpose of the 

partnership was to increase the defendant’s existing client base and workforce, there 

was no evidence either party believed this could be accomplished within one year, and 

there was no evidence either party thought this purpose could be completed within 

one year, and all the available evidence indicated they anticipated it would take much 

longer to perform the partnership agreement). Accordingly, both the extrinsic 

evidence and the nature of the required acts establish that full performance of the 

partnership agreement could not be completed within one year. See Chapman v. 

Arfeen, No. 09-16-00272-CV, 2018 WL 4139001, at *11 (Tex. App.—Beaumont Aug. 

30, 2018, pet. denied) (mem. op.) (concluding, based on terms of agreement, that 

parties did not contemplate undertaking would be completed within a year); Gano, 

678 S.W.2d at 154 (concluding oral agreement between lawyers could not be 

performed in less than a year given the nature of the business and based on testimony 

by the lawyer seeking to enforce the agreement). 

Therefore, the agreement Chase alleges falls within the statute of frauds and 

was required to be in writing in order to be enforceable. 

Chase also pleads partial performance of the alleged agreement. “Under the 

partial performance exception to the statute of frauds, contracts that have been partly 

performed, but do not meet the requirements of the statute of frauds, may be enforced 

in equity if denial of enforcement would amount to a virtual fraud.” Berryman’s S. 

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Fork, Inc. v. J. Baxter Brinkmann Int’l Corp., 418 S.W.3d 172, 192 (Tex. App.—Dallas 

2013, pet. denied). However, the partial performance must be unequivocally referable 

to the agreement and corroborative of the fact that a contract actually was made. Id.

at 193; Holloway v. Dekkers, 380 S.W.3d 315, 324 (Tex. App.—Dallas 2012, no pet.).

The performance a party relies on to remove an oral agreement from the 

statute of frauds “must be such as could have been done with no other design than to 

fulfill the particular agreement sought to be enforced.” Exxon Corp. v. Breezevale Ltd., 

82 S.W.3d 429, 439-40 (Tex. App.—Dallas 2002, pet. denied). “If the evidence 

establishes that the party who performed the act that is alleged to be partial 

performance could have done so for some reason other than to fulfill obligations under 

the oral contract, the exception is unavailable.” Nat’l Prop. Holdings, L.P. v. 

Westergren, 453 S.W.3d 419, 426-27 (Tex. 2015) (per curiam). 

Chase relies on the fact that Helping Hands paid Chase and Guedri from the 

inception of the company until 2018, to show partial performance. Dkt. 97-4; Dkt. 97-

98-1. In this case, the evidence supports that Hodge’s “partial performance” by paying 

Chase and Guedri could also show that Hodge was running Helping Hands as an 

individually owned business and compensating Chase and Guedri as independent 

contractors. Thus, this exception to the statute of frauds is unavailable. See Nat’l 

Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 426-27 (Tex. 2015) (per curiam)

(“If the evidence establishes that the party who performed the act that is alleged to 

be partial performance could have done so for some reason other than to fulfill 

obligations under the oral contract, the exception is unavailable.”). Accordingly, this

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exception to the statute of frauds does not apply.7 The undersigned finds that, along 

with limitations, Chase’s claims are barred by the statute of frauds. 

C. Indefiniteness

Defendants argue that to the extent Chase alleges a cause of action for breach 

of contract to share profits from a litigation funding business, other than a claim not 

barred by limitations or the statute of frauds, that claim fails for indefiniteness. Dkt.

97, at 31. Without citing any supporting authority, Chase asserts that this argument 

is not appropriate to address via a summary judgment motion. Dkt. 98, at 15. 

Chase argues that the contract claim is sufficiently definite, arguing that they 

entered into an oral agreement: (1) to form a partnership to make pre-settlement 

medical advances to litigants; (2) that Hodge was to handle the administrative and 

legal matters including arranging for capital; (3) Guedri was to set up the software 

system to manage the business; (4) Chase was to handle business development and 

bring in clients; (5) the parties agreed to equally own the business and share profits; 

and (6) the equity interest was not contingent on performance. Id., at 16-17. 

A contract is legally binding only if its terms are sufficiently definite to enable 

a court to understand the parties’ obligations. Fort Worth Indep. Sch. Dist. v. City of 

Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000); T.O. Stanley Boot Co. v. Bank of El Paso, 

847 S.W.2d 218, 221 (Tex. 1992). The terms of an oral contract must be definite, 

7 The parties also argue about whether the statute of frauds applies to Chase’s breach of 

fiduciary duty claims. However, those claims were limited by the Court’s prior order, Dkt. 77,

“to the claim of breach of fiduciary duty arising out of an alleged attorney-client relationship 

during the formation of Helping Hands.” Since the undersigned has found this claim is barred 

by limitations, it need not address the applicability of the statute of frauds to this claim. 

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certain, and clear as to all essential terms, and if they are not, the oral contract fails 

for indefiniteness. Southern v. Goetting, 353 S.W.3d 295, 299-300 (Tex. App.—El Paso 

2011, pet. denied). “[E]ssential or material terms are those that parties would 

reasonably regard as vitally important elements of their bargain.” Heartland 

Holdings, Inc. v. U.S. Trust Co. of Tex., N.A., 316 S.W.3d 1, 9 (Tex. App.—Houston 

[14th Dist.] 2010, no pet.). When essential terms are missing, courts find no more 

than an agreement to agree. Fiduciary Fin. Servs. of the Sw., Inc. v. Corilant Fin., 

L.P., 376 S.W.3d 253, 256 (Tex. App.—Dallas 2012, pet. denied). Whether an 

agreement fails for indefiniteness is a question of law for the court. Argo Data Res. 

Corp. v. Shagrithaya, 380 S.W.3d 249, 274 (Tex. App.—Dallas 2012, pet. denied). 

Whether a partnership exists requires an examination of the totality of the 

circumstances. Liserio v. Colt Oilfield Services, LLC, No. SA-19-CV-01159-XR, 2022 

WL 16542585, at *4 (W.D. Tex. Oct. 28, 2022). Texas law establishes five factors that 

indicate whether persons have created a partnership, although no one factor is 

decisive: (1) the right to receive a share of profits of the business; (2) an expression of 

intent to be partners in the business; (3) the right to participate in control of the 

business; (4) an agreement to share: (a) losses of the business, or (b) liability for claims 

by third parties against the business; and (5) agreement to contribute or contribution 

of money to the business. Tex. Bus. Orgs. Code § 152.052(a)(1)-(5). However, the 

receipt of, or right to receive, a share of profits as payment of wages or other 

compensation to an employee does not indicate that a person is a partner. Id.,

§ 152.052(b)(1)(B). Finally, a “representation or other conduct indicating that a 

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person is a partner in an existing partnership, if that is not the case, does not of itself 

make that person a partner in the partnership.” Tex. Bus. Orgs. Code § 152.054.

Weighing these factors, the undersigned finds that to the extent Chase alleges 

a breach of contract not barred by limitations, this claim fails for indefiniteness, and 

Chase has failed to establish the existence of a partnership. In this case, the summary 

judgment evidence supports that Chase did not have a right to control the business, 

and instead received periodic small payments. The right to control a business is the 

right to make executive decisions. Ingram v. Deere, 288 S.W.3d 886, 900 (Tex. 2009);

Stephens v. Three Finger Black Shale P’ship, 580 S.W.3d 687, 712 (Tex. App.—

Eastland 2019, pet. denied). This includes managing business operations, viewing 

and managing the books, writing checks, and controlling assets. Ingram, 288 S.W.3d 

at 901-02 (collecting cases). The summary judgment evidence establishes that Chase

did not have access to the books, did not control assets, and that he received checks 

from Hodge. Dkt. 97-1. 

Moreover, an agreement to contribute money or property to the business is 

indicative of a partnership. Tex. Bus. Orgs. Code § 152.052(a)(5). Chase declares that 

Hodge was “to arrange for the company to have capital.” Dkt. 98-1, at 2. Hodge 

declares that “I was the only one who provided any capital to start the company.” Dkt. 

97-1, at 3. Chase has not offered any controverting evidence that he contributed 

money or property. Chase’s alleged contributions to Helping Hands were his labor, 

and the evidence supports he was paid as a contract employee. Dkt. 97-2. Moreover, 

he has offered no evidence distinguishing his value as an employee from the 

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contributions of a partner. See Ingram, 288 S.W.3d at 903 (“Employees may 

contribute to business endeavors by lending their time and reputation, but that is not 

a contribution to the venture indicative of a partnership interest.”). Chase has offered 

no evidence of an affirmative agreement to share in the losses of the company, made 

no capital contributions to Helping Hands’ formation, and he had no say in the 

company’s executive operations. See Liserio, 2022 WL 16542585, at *6. Chase’s 

breach-of-contract claim to form a partnership fails for indefiniteness. See Knowles v. 

Wright, 288 S.W.3d 136, 144-46 (Tex. App.—Houston [1st Dist.] 2009, pet. denied)

(finding contract too indefinite to support breach of contract claim where the 

appellants did not offer evidence of obligations or specific services owing under the 

agreement and did not address how shares were to be paid or costs calculated). 

D. Remedies 

Chase requests that the court appoint a receiver and claims that he is entitled 

to declaratory relief. Because the Court finds he cannot prevail on his claims, he is 

not entitled to the appointment of a receiver for Helping Hands Capital, LLC. 

Similarly, he is not entitled to declaratory relief.

V. CONCLUSION

The Court GRANTS Defendants’ Motion for Summary Judgment, Dkt. 97, and 

ENTERS Final Judgment in favor of Defendants. The trial setting in this case is 

CANCELED, all other pending motions are DISMISSED AS MOOT, and this cause 

of action is CLOSED.

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SIGNED January 24, 2023.

DUSTIN M. HOWELL

UNITED STATES MAGISTRATE JUDGE

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