Affirmed in Part; Reversed and Rendered in Part; Reversed and Remanded in 

Part; and Opinion filed December 5, 2019.

In The

Fourteenth Court of Appeals

NO. 14-18-00638-CV

SHANNON MEDICAL CENTER, Appellant

V.

TRIAD HOLDINGS III, L.L.C., INDIVIDUALLY AND DERIVATIVELY 

ON BEHALF OF REGIONAL CANCER TREATMENT CENTER, LTD., 

Appellee

On Appeal from the 340th District Court

Tom Green County, Texas

Trial Court Cause No. C150381C

O P I N I O N

Shannon Medical Center and Triad Holdings III, L.LC. are general partners 

in Regional Cancer Treatment Center, Ltd. (the Partnership). The Partnership

operates its regional cancer-treatment center (RCTC) on premises leased from 

Shannon’s subsidiary, Shannon Real Estate Services, Inc. (SRES). Shannon, the 

managing general partner, sued for judicial dissolution of the Partnership so that it 
2

can take over RCTC’s operations. Triad, both individually and derivatively on behalf 

of the Partnership, sued Shannon for breach of common-law and statutory fiduciary 

duties. In accordance with the jury’s verdict, the trial court rendered judgment 

denying Shannon’s request for judicial dissolution and awarding the Partnership 

actual damages in the amount of excess rent that Shannon bound the Partnership to 

pay to SRES. The trial court additionally ordered Shannon to pay the identical 

amount to Triad as equitable disgorgement of profits. Finally, the trial court awarded 

Triad and the Partnership their attorneys’ fees, costs, and expenses. Shannon appeals 

the judgment.1

We affirm the portions of the judgment denying Shannon’s request for judicial 

dissolution and awarding actual damages to the Partnership; however, we reverse 

the disgorgement award to Triad because there is neither a finding nor evidence of 

Shannon’s profits from the excessive rent charged by, and paid to, a different entity.

In light of our disposition of these claims, we reverse the awards of attorney’s fees, 

costs, and expenses, and we remand the case solely for relitigation of this ancillary 

relief.

I. BACKGROUND

Since its formation in 1988, the Partnership has operated RCTC from a

building constructed by the Trust of the Margaret Shannon Estate. The Trust then 

transferred the building to Shannon, and in 2007 Shannon transferred the building 

to its wholly owned subsidiary, SRES. Except for this partnership, Shannon and 

Triad are competitors.

1 Pursuant to an order by the Supreme Court of Texas, this case was transferred to us from 

the Third Court of Appeals, and we have applied that court’s precedent to the extent that it is 

inconsistent with our own. See TEX. R. APP. P. 41.3.
3

Under the terms of the Partnership Agreement, the general partners manage 

and control the Partnership “through and by virtue of their selection of the 

Partnership Committee and the Managing General Partner.” The Partnership 

Committee consists of one representative of each general partner. For several years 

Shannon and Triad have been the only general partners. Shannon serves as the 

managing general partner, for which the Partnership pays Shannon management fees

under a separate agreement.

For some time now, Shannon has been attempting to dissolve the Partnership 

and take over RCTC. The Partnership Agreement provides that the Partnership will 

dissolve upon the earliest of (a) December 31, 2038; (b) approval of 75% of the 

partnership units; (c) the Partnership’s ceasing to operate a radiotherapy facility; or 

(d) the occurrence of any other circumstance that, under the Texas Revised Limited 

Partnership Act,2 would require dissolution. Shannon has attempted to obtain the 

right to vote 75% of the partnership units in favor of dissolution.

There originally were three general partners and a varying number of limited 

partners, but the third general partner left the Partnership and sold its partnership 

units to Shannon and Triad. With the addition of those units, Shannon owned about 

72.32% of the partnership units, Triad owned about 24.35%, and limited partners 

Drs. Bolen, Gordon, and Hughes owned, respectively, 1.72%, 0.86%, and 0.75%.

A. The 2012 Lease Amendment

The Partnership’s landlord SRES informed the Partnership that it would not 

renew the Partnership’s five-year lease upon its expiration in 2012. SRES offered to 

withdraw the notice of termination if Triad, as the only other member of the 

2 The Act expired in 2010; now see Title 4 of the Texas Business Organizations Code, TEX.

BUS. ORGS. CODE ANN. §§ 151.001–154.204.
4

Partnership Committee, would agree to change the Partnership’s name to “Shannon 

Regional Cancer Treatment Center, Ltd.” Triad declined. 

Three days before the lease expired, Bryan Horner, who is both Shannon’s 

chief executive officer and SRES’s president, sent the Partnership and Triad a lease 

amendment he had executed on behalf of Shannon, as the Partnership’s managing 

partner, and SRES. The lease raised the Partnership’s annual rent of about $16.00/sq. 

ft. to $31.04/sq. ft., of which $11.79/sq. ft.was purportedly to reimburse SRES for 

specialized tenant improvements it made to the building for the Partnership’s use.

The building’s features that are characterized as specialized tenant improvements 

are two vaults designed to contain radiation from the facility’s linear accelerators. 

Contrary to these representations, however, Shannon knew that SRES had not 

modified the building and that the Trust had included the vaults as part of the 

building’s original construction in 1988. 

B. Assignment of Voting Rights 

To reach the 75% threshold needed for it to dissolve the Partnership, Shannon 

proposed voting agreements with the limited partners, offering a guaranteed floor 

price for a limited partner’s units upon dissolution of the Partnership in exchange for 

the limited partner’s proxy. Triad blocked this move by entering into a voting 

agreement with Dr. Bolen. The Triad-Bolen Voting Agreement is binding upon the 

parties’ successors and assigns and it cannot be assigned absent the other party’s 

written consent. With this agreement, Triad controlled the votes of more than 26% 

of the Partnership, effectively preventing Shannon from forcing the Partnership to 

dissolve without Triad’s consent. 

Shannon subsequently bought some of partnership units that were subject to 

the Triad-Bolen Voting Agreement before entering into a similar voting agreement 

with Dr. Hughes. Believing that these transactions gave it the right to vote 75% of 
5

the partnership units, Shannon unilaterally issued a “Written Consent” purporting to 

dissolve the Partnership and transfer the Partnership’s assets and liabilities to 

Shannon. In response, Triad pointed out that its proxy to vote Dr. Bolen’s partnership 

units is binding on Dr. Bolen’s successors, so that Triad retains the right to vote those 

units that Dr. Bolen later sold to Shannon. Shannon concedes this point and agrees 

that the Written Consent was ineffective.

By the time of trial, Shannon and Triad had purchased all of the limited 

partners’ partnership units, making them the only members of the partnership. Due 

to the voting agreements, Shannon has the right to vote slightly less than 74% of the 

partnership units, and Triad has the right to vote slightly more than 26%.

C. The Lawsuit

Unable to cast the votes of 75% of the partnership units as needed to dissolve 

the Partnership, Shannon filed this suit for judicial dissolution on the ground that it 

is not reasonably practicable to carry on the Partnership’s business in conformity 

with its governing documents. Triad counterclaimed in its individual capacity and 

additionally brought a derivative action on behalf of the Partnership. For clarity, we 

refer to the derivative claims as if brought by the Partnership directly.

The jury charge contained separate questions asking whether Shannon 

complied with common-law fiduciary duties, with the statutory duty of loyalty, and 

with the statutory duty of care. Regardless of the theory of liability, the jury was told 

to measure the Partnership’s damages, if any, by “[t]he amount of any improperly 

charged rents.” The jury found that Shannon did not comply with any of these duties 

to the Partnership or to Triad and assessed the Partnership damages of $572,725.00, 

which is equal to the sum of the annual charges of $11.79/sq. ft. of the leased 

premises over the five-year lease term. This is the amount that Shannon bound the 

Partnership to pay SRES, purportedly to reimburse SRES for its costs of constructing 
6

the vaults. The trial court also included an allegedly unpleaded claim, asking the jury 

if Shannon committed fraud by non-disclosure against Triad “in connection with the 

Lease Amendment.” The jury then was again asked, “What was the amount of any 

improperly charged rents,” and again answered, “$572.725.00.” The jury answered 

all of Shannon’s affirmative-defense questions in the negative and failed to find any 

of the statutory grounds for judicial dissolution of the Partnership.

The trial court awarded the Partnership actual damages of $572,725.00 as 

found by the jury for breach of duty. Triad recovered no damages, but the trial court 

ordered Shannon to pay Triad $572,725.00 as equitable disgorgement of profits.

Finally, Shannon was ordered to pay Triad’s and the Partnership’s attorneys’ fees 

and expenses. Shannon appeals the judgment.

II. ISSUES PRESENTED

Of Shannon’s first two issues, we address only the arguments in Shannon’s 

second issue challenging the jury’s finding that Shannon breached its statutory duty

of care.3In its fourth issue, Shannon seeks reversal of Triad’s disgorgement award, 

and in its fifth issue, Shannon argues that it conclusively established a basis for 

judicial dissolution of the Partnership. In its two remaining issues, Shannon 

challenges both the unconditional nature of the award of appellate attorneys’ fees 

and the amount of fees awarded.

Given the differences in the claims and the relief awarded to the Partnership 

and to Triad individually, we separately address Shannon’s appellate arguments 

concerning the Partnership’s claims, Triad’s individual claims, and Shannon’s 

3 Shannon’s first two issues challenge the jury’s findings on three alternative theories of 

liability: (1) breach of general, common-law fiduciary duties; (2) breach of the statutory duty of 

loyalty; and (3) breach of the statutory duty of care. Because we affirm the judgment for the 

Partnership based on Shannon’s breach of the statutory duty of care, it is unnecessary to address 

the Partnership’s alternative liability theories.
7

judicial-dissolution claim, before addressing the incidental relief of attorneys’ fees, 

costs, and expenses.

III. BREACH OF THE DUTY OF CARE TO THE PARTNERSHIP

In this issue, Shannon maintains that the charge’s question regarding breach 

of the duty of care does not support the judgment because none of the transactions 

or conduct relied upon give rise to a legally viable claim.4

A. Question 6: The Charge on the Statutory Duty of Care 

Shannon first contends the trial court erroneously charged the jury on breach 

of the statutory duty of care. A trial court must submit jury questions, instructions, 

and definitions that “are raised by the written pleadings and the evidence.” TEX. R.

CIV. P. 278; United Scaffolding, Inc. v. Levine, 537 S.W.3d 463, 469 (Tex. 2017). 

When reviewing a complaint of charge error, we consider “the pleadings of the 

parties and the nature of the case, the evidence presented at trial, and the charge in 

its entirety.” United Scaffolding, 537 S.W.3d at 469 (quoting Columbia Rio Grande 

Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 862 (Tex. 2009)). We review the trial 

court’s ruling on charge objections and charge requests for abuse of discretion. Sw. 

Energy Prod. Co. v. Berry–Helfand, 491 S.W.3d 699, 727 (Tex. 2016). A trial court 

abuses its discretion when it acts without reference to guiding rules or principles. In 

re Thetford, 574 S.W.3d 362, 374 (Tex. 2019) (orig. proceeding). Charge error is 

reversible if, under the totality of these circumstances, the error “amounted to such 

a denial of the rights of the complaining party as was reasonably calculated and 

probably did cause the rendition of an improper judgment.” United Scaffolding, 537 

4 Although this question pertains both to the Partnership and to Triad individually, we 

dispose of the judgment for Triad on other grounds. See Section IV, infra.
8

S.W.3d at 469 (quoting Island Recreational Dev. Corp. v. Republic of Tex. Sav. 

Ass’n, 710 S.W.2d 551, 555 (Tex. 1986) (op. on reh’g)).

Question 6 of the charge addressed the duty of care as follows:

Did Shannon comply with its duty of care to [Triad] and the 

Partnership?

As a partner in the Partnership, Shannon owes [Triad] and 

the Partnership a duty of care. Shannon must discharge 

this duty and conduct the Partnership business (1) in good 

faith and (2) in a manner that Shannon reasonably believes 

to be in the best interest of the Partnership.

To prove it complied with its duty of care, Shannon must 

show that, in conducting the Partnership’s business, it 

acted with the care of an ordinarily prudent person in

similar circumstances. An error in judgment does not by 

itself constitute a breach of the duty of care.

A partner is presumed to have satisfied the duty of care if 

the partner acted on an informed basis, in good faith, and 

in a manner that the partner reasonably believed to be in 

the best interest of the Partnership.

A partner does not violate a duty or obligation merely 

because the partner’s conduct furthers the partner’s own 

interests.

The jury answered “no” as to both Triad and the Partnership. A “no” answer to 

Question 6 was one of several alternative predicates to Question 7, in which the jury 

was asked to determine the amount that would compensate the Partnership for its 

damages, if any, “that were proximately caused by the non-compliant conduct.” The 

jury was instructed to consider only “[t]he amount of any improperly charged rents, 

determined at the time and place of the payment.”

1. Alleged Casteel Error

Shannon asserts that trial court reversibly erred in submitting Question 6 

because it commingles valid and invalid theories of liability. See Crown Life Ins. Co. 
9

v. Casteel, 22 S.W.3d 378, 388 (Tex. 2000) (op. on reh’g) (“[W]hen a trial court 

submits a single broad-form liability question incorporating multiple theories of 

liability, the error is harmful and a new trial is required when the appellate court 

cannot determine whether the jury based its verdict on an improperly submitted 

invalid theory.”). Shannon argues that a breach of duty cannot be based on its attempt 

to dissolve the Partnership by Written Consent because “partners have no duty to 

remain partners.”

5 Shannon further contends that a breach of duty cannot be based 

on “transactions that never closed, proposals that were rejected, or actions that had 

no legal effect,” such as Shannon’s various offers to purchase partnership units, the 

proposal to the Partnership to choose between renaming itself after Shannon or 

vacating the premises, and its attempts to obtain voting agreements from Drs. 

Hughes and Bolen. Shannon states in its brief that these theories cannot support a 

finding that it failed to comply with the duty of care it owed to the Partnership 

because these uncompleted transactions neither benefited Shannon nor harmed 

Triad.

We disagree that the jury could have based its answers on any of these 

scenarios. The damage question that is predicated on any finding that Shannon failed 

to comply with a common-law or statutory duty required the jury to determine the 

amount of “improperly charged rents” proximately caused by Shannon’s “noncompliant conduct.” Thus, the non-compliant conduct at issue was Shannon’s 

agreement, as the Partnership’s managing partner, to pay SRES the “improperly 

charged rents.” 

Some of the scenarios that Shannon alleges were improperly encompassed in 

Question 6 could not have been included for the additional reason that they were 

5 Bohatch v. Butler & Binion, 977 S.W.2d 543, 544 (Tex. 1998).
10

excluded by the accompanying instruction. The instruction informed the jury that 

Shannon owed a duty of care in conducting the Partnership’s business, not 

Shannon’s own business, and we presume the jury followed the charge instructions. 

See Barnes v. Mathis, 353 S.W.3d 760, 765 (Tex. 2011) (per curiam). In attempting

to purchase partnership units, Shannon was conducting its own business, not 

Partnership business, and the renaming ultimatum was made by SRES, not by 

Shannon. As defined in the charge, “Shannon” meant only Shannon Medical Center 

and specifically excluded SRES and the Trust.

We conclude that the scenarios Shannon describes as invalid theories of 

liability were not submitted to the jury. They instead were merely factual matters 

that were admitted into evidence without objection or a request for a limiting 

instruction, and they were not encompassed in Question 6.

2. The Partnership Agreement’s Effect on the Duty of Care

On appeal, Shannon also reurges its objection that the duty-of-care question

“does not adequately address the partnership agreement and the alterations of the 

statutory duty of care.” See TEX. BUS. ORGS. CODE ANN. §§ 152.206, 153.003.

Shannon argues on appeal that the duty of care was contractually disclaimed and that 

Shannon’s conduct was authorized.

As a matter of law, however, the duty of care cannot be disclaimed. See id. 

§ 152.002(b)(3). A partner must conduct the partnership’s business “with the care 

an ordinarily prudent person would exercise in similar circumstances.” Id. 

§ 152.206(a). A partner additionally must discharge the partner’s duties “in good 

faith” and “in a manner the partner reasonably believes to be in the best interest of 

the partnership.” Id. § 152.204(b). Although the Partnership Agreement authorizes

contracts between the Partnership and a partner or a partner’s affiliate, a partner 

entering into such a contract still must comply with the duty of care by acting in 
11

good faith and in a manner the partner reasonably believes to be in the partnership’s 

best interest. The Partnership Agreement could not change this and did not purport 

to do so.

The instructions accompanying this question tracked the statute. The 

instructions additionally clarified that “[a] partner does not violate a duty or 

obligation merely because the partner’s conduct furthers the partner’s own interest” 

and that “a[n] error in judgment does not by itself constitute a breach of the duty of 

care.” Under these instructions, the jury could find that Shannon complied with its 

duty of care by entering into a contract with the Partnership that furthered Shannon’s 

interest, so long as Shannon acted in good faith and reasonably believed that the 

contract also was in the Partnership’s best interest. Because this charge correctly 

reflects both the governing law and the Partnership Agreement’s terms, the trial 

court did not abuse its discretion in overruling Shannnon’s objection. See Tex. Dep’t 

of Human Servs. v. E.B., 802 S.W.2d 647, 649 (Tex. 1990) (op. on reh’g) (no abuse 

of discretion where controlling question was accompanied by instructions tracking 

statute’s language).

B. The Evidence That Shannon Failed to Comply with Its Duty of Care

Shannon further asserts there is no evidence to support the jury’s finding that 

Shannon failed to comply with its statutory duty of care. Because the jury returned 

an adverse finding on this issue on which Shannon bore the burden of proof, Shannon 

must demonstrate on appeal that the evidence conclusively established that it

complied with its statutory duty of care. See Dow Chem. Co. v. Francis, 46 S.W.3d 

237, 241 (Tex. 2001).6 We review the record in the light most favorable to the 

6

In a footnote in its brief, Shannon states that it also objected to the three breach-of-duty 

questions on the ground that they improperly shifted the burden to Shannon. Shannon offers no 

argument or authority in support of that objection; thus, it too is waived. See TEX. R. APP. P. 

38.1(i). We note, however, that under the common law, when a fiduciary enters into a transaction 
12

challenged finding, crediting favorable evidence if a reasonable factfinder could and 

disregarding contrary evidence unless a reasonable factfinder could not. See City of 

Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005) (per curiam). After reviewing 

the record in accordance with this standard, we hold that the evidence does not 

conclusively show that Shannon complied with its duty of care concerning the lease 

amendment.

Before the lease was renewed in 2012, SRES asked appraiser Dale Scoggins 

to analyze the fair-market rental value of the leased premises. Scoggins determined 

that the annual fair-market rental range was $18.50 to $19.25/sq. ft. In his report, 

Scoggins stated, 

The above rental amount does not include consideration of the 

amortization of the specialized items of tenant improvements (TI) that 

might be a part of a new lease agreement. The subject suite has two 

vaults that house linear accelerator equipment. The estimated costs for 

each of these vaults is $450,000 or a total of $900,000. These 

improvements were installed at the time of original construction. The 

building was built in 1988 making the improvements 24 years old. 

Typical economic life for medical office buildings is 50 years. The 

accrued depreciation attributable to the vault improvements would 

therefore be (24/50) 48%. . . . The depreciated value of the specialized 

TI is $468,000. Typically specialized TI is amortized over the primary 

lease term. In this case no amortization of this cost has occurred.

in which its self-interest might conflict with the beneficiary’s interests, the fiduciary bears the 

burden to show compliance with the duty of care. Stephens Cty. Museum, Inc. v. Swenson, 517 

S.W.2d 257, 260 (Tex. 1974). The Texas Business Organizations Code makes this burden-shifting 

rule applicable to alleged violations of statutory duties as well. See TEX. BUS. ORGS. CODE ANN. 

§ 153.003 (in matters not addressed in Business Organizations Code chapter 153 dealing with 

limited partnerships, “the provisions of Chapter 152 governing partnerships that are not limited 

partnerships and the rules of law and equity govern”); id. § 152.003 (“The principles of law and 

equity and the other partnership provisions supplement this chapter unless otherwise provided by 

this chapter or the other partnership provisions.”); see also id. §§ 152.004, 153.002(b) (“The rule 

that a statute in derogation of the common law is to be strictly construed does not apply” to the 

statute’s partnership and limited-partnership provisions).
13

From these figures, Scoggins calculated that the post-depreciation cost of the two 

vaults, if amortized over a five-year term, would increase the annual rent by

$11.79/sq. ft.

The day after receiving the report, Bryan Horner, both in his capacity as 

Shannon’s CEO and as president of SRES, executed a lease amendment and sent it 

to Triad and the Partnership, enclosing a copy of Scoggins’s report. The lease 

amendment states, “A market rental analysis prepared for SRES indicates that 

specialized tenant improvements funded by the landlord, such as the [Partnership] 

linear accelerator vaults, are typically amortized and reimbursed by the tenant.”7 The 

amendment called for annual rent of $31.04/sq. ft., which is the sum of the highest 

fair-market rental value found by Scoggins plus an additional $11.79/sq. ft. to 

“reimburse” SRES. 

But Shannon knew that SRES did not fund the improvements that were made 

in 1988, because Shannon was the previous owner and transferred the building—

with the vaults already in place—to SRES in 2007.

Moreover, there is legally sufficient evidence that the improvements also were 

not funded by Shannon. According to Horner, the building was constructed by the 

Trust, which then transferred ownership to Shannon, who later transferred the 

building to SRES. 

Further still, the original lease indicates that the Partnership had no financial 

responsibility for improvements that were part of the original construction. Attached 

to the Partnership’s original 1988 lease is an exhibit cover sheet that appears to give 

directions to clerical staff, stating, “Attach floor plan of demised premises 

showing . . . all improvements to be constructed by Landlord” and directing 

7 Emphasis added.
14

someone to type on the floor plan, “All improvements, equipment and furnishings 

shown hereon are to be constructed, furnished and installed at the sole cost and 

expense of Landlord.” A private placement memorandum seeking investors in the 

Partnership identifies the Trust as the landlord.

Although the floor plan itself is missing from the lease, the building’s 1987 

blueprints show that the vaults are part of the original construction. The 1988 lease 

did not require the Partnership to pay for any part of the original construction but to 

pay only for those improvements that were added after the lease’s “Commencement 

Date,” which was defined as the date the Partnership “delivers written notice to 

Landlord that the demised premises are complete and fully suitable to [the 

Partnership] for the purpose for which same are leased.”

From this evidence, the jury reasonably could conclude that the Trust assumed

sole responsibility for the cost of constructing a building suitable for use as a 

radiotherapy center, and this included construction of the vaults shown on the 

blueprints.

The evidence also establishes that Shannon knew there was no support for the 

position taken in the 2012 lease amendment that “a rate of $31.04 per year per square 

foot (including reimbursement of specialized tenant improvements funded by SRES) 

is within the range of fair market value.” Shannon knew that the vaults were included 

in the original construction nearly two decades before SRES acquired the building. 

Moreover, Scoggins asked for documentation of the costs of constructing the vaults, 

but because the vaults were included as an integral part of the building’s original 

construction, Shannon could find none. To the contrary, Shannon’s controller 

informed Horner, “The best I’ve been able to come up with for the 1988 vaults is a 

lease agreement that indicates [the] landlord is responsible for all leasehold 

improvements . . . .” Scoggins additionally explained to Horner, “The TI increment
15

is not included in the market rental amount as it is not an aspect of market rent but 

an individual modification to a building for a particular tenant rather than a feature 

that would be typical of the market.”8 Thus, Shannon knew that (1) the vaults were 

not a modification to the building, and thus, they were not a “tenant improvement”; 

(2) the Trust, not SRES, paid to construct the building, including the vaults; and 

(3) the vaults’ construction-costs are not part of the building’s fair-market rental 

value. There accordingly was no basis for Shannon, as the Partnership’s managing 

general partner, to bind the Partnership to “reimburse” SRES for construction costs 

Shannon knew had been paid by the Trust in accordance with its agreement with the 

Partnership.

Although Shannon emphasizes that the Partnership Agreement permits the 

Partnership to contract with a partner’s affiliate such as SRES, the agreement 

specifies that such contracts “must be competitive with the terms that the Partnership 

could obtain from third parties in an arm’s length transaction.” The Partnership was 

not renting space that SRES had modified at the landlord’s expense to satisfy the 

Partnership’s requirements; the Partnership was renting a space that already satisfied 

the Partnership’s requirements without requiring the landlord to modify it. 

Scoggins’s report shows that the highest annual fair-market rental value for the 

property was $19.25/sq. ft., and the record supports the finding that in binding the 

Partnership to pay SRES an additional $11.79/sq. ft., Shannon did not act “on an 

informed basis, in good faith, and in a manner [it] reasonably believed to be in the 

[Partnership’s] best interest.”

We conclude the jury’s assessment of the Partnership’s actual damages is 

amply supported by the evidence. We overrule Shannon’s second issue, and we 

8 Emphasis added.
16

affirm the portion of the judgment awarding the Partnership actual damages as found 

by the jury.

IV. TRIAD’S DISGORGEMENT AWARD

Shannon argues that Triad’s disgorgement award must be reversed because, 

among other reasons, there is no evidence of Shannon’s profits. We agree, and 

because this point is dispositive, we do not address Shannon’s remaining challenges 

to this award.9

In determining the amount that equity required Shannon to disgorge to Triad, 

the trial court relied on the jury’s answer to Question 9 of the charge, in which the 

jury was asked, “What was the amount of any improperly charged rent?” The jury 

answered, “$572,725.00.” 

But Texas law limits profit disgorgement to the amount of a fiduciary’s profits

obtained as a result of the fiduciary’s breach of duty. See Longview Energy Co. v. 

Huff Energy Fund LP, 533 S.W.3d 866, 877–78 (Tex. 2017) (citing ERI Consulting 

Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 873 (Tex. 2010)).10 As Shannon pointed 

out at the charge conference, the Partnership paid the rent to its landlord SRES, and 

SRES is a corporation distinct from Shannon, SRES’s sole shareholder. See Grain 

9 Shannon argues in its third issue that the disgorgement award cannot be supported by the 

jury’s finding of fraud by non-disclosure in connection with the lease amendment, because (a) the 

claim was not pleaded, (b) Triad lacks standing to pursue the claim, and (c) there is no evidence 

of one or more elements of fraud by non-disclosure. In its fourth issue, Shannon contends that the 

trial court abused its discretion in ordering equitable disgorgement to Triad of Shannon’s profits 

because (a) that request for relief was not pleaded, (b) there is no direct relationship between Triad 

and the amount to be disgorged, (c) no clear and serious breach occurred, and (d) there is no basis 

for the amount awarded. Under the latter subheading, Shannon argues that the rent was paid to 

SRES, not Shannon, and there is no evidence of Shannon’s profits from the 2012 lease amendment. 

Because this point is dispositive of the judgment in Triad’s favor, we do not address Shannon’s 

other arguments.

10 We address only the disgorgement of profits, not the forfeiture or disgorgement of fees, 

which are not at issue in this appeal.
17

Dealers Mut. Ins. Co v. McKee, 943 S.W.2d 455, 458 (Tex. 1997) (“Under Texas 

law, a corporation is an entity separate from its shareholders.”). The excess rent was 

SRES’s profit, not Shannon’s, and Triad did not plead or litigate any basis for 

ignoring the distinction between the two entities. The extent to which Shannon 

profited from the excess rent paid to SRES was a question of fact11 on which there 

is no finding and no evidence.

In response, Triad asserts that the damages Shannon now must pay to the 

Partnership “inure . . . primarily to Shannon’s benefit as the [Partnership’s] majority 

owner.” But this argument misses the mark for several reasons. First, the judgment 

Shannon must pay to the Partnership is not Shannon’s profit; it is Shannon’s debt. 

See TEX. CIV. PRAC. & REM. CODE ANN. § 31.008(h)(2) (party against whom 

judgment is rendered is a “judgment debtor”). Second, when Shannon pays the 

judgment, the money will inure to the Partnership’s benefit, not to Shannon’s. The 

extent of Shannon’s partnership interest is irrelevant, because a partnership is “an 

entity distinct from its partners” and “[p]artnership property is not property of the 

partners.” TEX. BUS. ORGS. CODE ANN. §§ 152.056, 152.101. Third, if Triad intends 

to imply that some part of the judgment that Shannon pays to the Partnership will 

later be repaid to Shannon in the form of a partnership distribution, this theory cannot 

support the judgment because there is no fact finding on the subject. And fourth, no 

evidence was offered that would have supported the submission of a question asking 

the jury to measure Shannon’s profits from the improperly charged rents by the 

amount of a partnership distribution. The rent increase became effective in October 

2012, and the evidence showed that the only distribution since that time was in 

January 2013. The distribution could not have included any improperly charged rent, 

11 See Longview, 533 S.W.3d at 877–78.
18

because the Partnership paid the rent to SRES, so the Partnership had no improperly 

charged rent to distribute.

For each of these reasons, we sustain Shannon’s fourth issue in part, and we 

do not reach Shannon’s remaining challenges to the judgment in Triad’s favor. 

Because Triad’s only recovery was the disgorgement award, which cannot stand, we 

reverse this part of the judgment and render judgment that Triad take nothing by its 

claims in its individual capacity.

V. SHANNON’S CLAIM FOR JUDICIAL DISSOLUTION OF THE PARTNERSHIP

On application by a partner in a domestic partnership, a district court may 

order the winding up and termination of the partnership “if the court determines that 

it is not reasonably practicable to carry on the entity’s business in conformity with 

its governing documents.”12 The jury was asked, “Is it reasonably practicable to 

carry on the Partnership’s business in conformity with the governing documents, and 

the jury answered, “Yes.” In its fifth issue, Shannon contends it is entitled to judicial 

dissolution of the Partnership because it conclusively established the contrary.

Citing Wiess v. McFaddin, 211 S.W. 337, 342 (Tex. App.—Beaumont 1919, 

no writ), Shannon argues that voting deadlock is a recognized basis for judicial 

dissolution of a partnership, and now that Shannon and Triad are the only partners, 

the two are bound to become deadlocked on important matters. But the evidence 

before us—and Shannon’s own admission—easily distinguish the facts in this case 

from those in Wiess. In Wiess, all of the property of an unincorporated joint stock 

association was vested in a board of three trustees: Wiess, Kyle, and McFaddin. Id. 

at 338. Wiess died and was succeeded by one of his children; however, the joint12 Act of May 13, 2003, 78th Leg., R.S., ch. 182, § 1, sec. 11.314(2), 2003 TEX. GEN. LAWS

267, 400–01 (amended 2009 & 2017; now codified at TEX. BUS. ORGS. CODE ANN. § 11.314(3)).
19

stock agreement provided that the election of a new trustee would not be complete 

unless a certificate of acknowledgment was signed by the two remaining trustees 

and the new trustee signed an acceptance of the trust. Id. at 338–39. Wiess’s 

successor was elected, but McFaddin refused to sign the necessary certificate. Id. at 

339. The court noted that it was decided in an earlier case that McFaddin could not 

be compelled to sign the certificate, and Kyle refused to act until the board was 

complete. See id. at 342 (citing McFaddin v. Wiess, 168 S.W. 486, 487 (Tex. App.—

Galveston 1914, no writ)). Because it was impossible to operate the business in 

conformity with its governing documents, the court affirmed the business’s judicial 

dissolution. See id.

No such deadlock does, or could, exist here. As Shannon admits, the 

Partnership Agreement provides that a deadlock may be broken “upon the ‘Approval 

of the General Partners,’” which is defined as the approval by those general partners 

holding a majority of the partnership units. Shannon concedes that it can “break the 

deadlock on its own because it holds the majority” of the partnership units. 

Shannon nevertheless speculates that “Triad would inevitably object to any 

effort by Shannon to resolve the deadlock on its own” and “would resort to a 

lawsuit.” But “speculation is not evidence.” Joe v. Two Thirty Nine Joint Venture, 

145 S.W.3d 150, 164 (Tex. 2004). Moreover, a partnership can carry on its business 

in accordance with its governing documents despite litigation between partners—

and the Partnership has done so.

Shannon’s arguments, and the record, fall far short of conclusively 

establishing that it is not “reasonably practicable to carry on the Partnership’s 

business in conformity with its governing documents.” We overrule this issue.
20

VI. ATTORNEYS’ FEES

A trial court has discretion to award the plaintiff reasonable attorneys’ fees 

and expenses if the plaintiff is wholly or partly successful in prosecuting a derivative 

action. TEX. BUS. ORGS. CODE ANN. § 153.405. Moreover, the Partnership 

Agreement provides that in litigation between partners relating to the Partnership, 

the prevailing partner “shall be entitled to recover, in addition to all damages allowed 

by law and other relief, all court costs and reasonable attorney’s fees incurred in 

connection therewith from the Partner or Partners not prevailing.” Based on these 

provisions, the trial court ordered Shannon to pay Triad’s and the Partnership’s fees, 

expenses, and court costs. These amounted to almost $1.19 million in attorney’s fees 

through trial, expenses of nearly $247,000, and over $12,000 in court costs. The trial 

court also conditionally awarded attorneys’ fees of $75,000 in the event of an appeal 

to an intermediate court of appeals; $25,000 in the event that a petition for review is 

filed with the Texas Supreme Court, and $55,000 if the Texas Supreme Court 

requests briefing on the merits.

In its sixth issue, Shannon contends that the trial court erred in failing to 

condition the award of appellate attorneys’ fees upon the success of the appeal, and 

in its seventh issue, Shannon argues that reversal of the judgment requires remand 

for a new trial on attorneys’ fees, costs, and expenses. We agree with both points.

Awards of appellate fees must be conditioned upon a successful appeal. See 

A.G. Edwards & Sons, Inc. v. Beyer, 235 S.W.3d 704, 707 n.1 (Tex. 2007). Triad 

acknowledges this and does not oppose reformation of the judgment to expressly 

condition the award of appellate attorneys’ fees upon Shannon’s success on appeal; 

however, in light of our reversal of Triad’s disgorgement award, the case must be 

remanded for a redetermination of the appropriate award of fees, costs, and 

expenses. Cf. Young v. Qualls, 223 S.W.3d 312, 314 (Tex. 2007) (per curiam) 
21

(“Although attorney’s fees in this case were awarded by the trial court rather than 

the jury, the factors governing their assessment are the same and include 

consideration of the ‘results obtained.’” (quoting Arthur Andersen & Co. v. Perry 

Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997))).

We sustain Shannon’s sixth and seventh issues, and we remand the case for 

for a new trial solely on the issues of attorneys’ fees, reasonable expenses, and costs, 

and with instructions to the trial court to condition any award of appellate attorneys’ 

fees on a successful appeal.

VII. CONCLUSION

We overrule Shannon’s arguments challenging the portion of the judgment 

awarding the Partnership actual damages for Shannon’s breach of the duty of care, 

and we affirm this part of the judgment without reaching Shannon’s arguments 

regarding the Partnership’s remaining claims. We likewise affirm the portion of the 

judgment denying Shannon’s request for judicial dissolution of the Partnership.

Because no evidence supports the trial court’s disgorgement-of-profits award 

to Triad, we reverse this part of the judgment and render judgment that Triad take 

nothing by its claims in its individual capacity. In light of this result, we reverse the 

trial court’s award of attorneys’ fees, expenses, and costs, and we remand the case 

to the trial court for a new trial only on this ancillary relief, with any award of 

appellate attorneys’ fees to be conditioned on a successful appeal. 

/s/ Tracy Christopher

Justice

Panel consists of Justices Christopher, Bourliot, and Zimmerer.