### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03

- 21

- 00219

- CV

LMP Austin English Aire, LLC, derivatively through Lafayette English Partner, LLC, (individually and derivatively) through Lafayette English Apartments, LP , Appellant s

v. Lafayette English Apartments, LP (Nominal Defendant); Lafayette English GP, LLC; HVC English, LLC; HVC Lafayette, LLC; Scott Schaeffer; Austin Lafayette Landing Realty LLC; and Austin CMA English Aire Realty LLC , Appellee s

FROM THE 459TH DISTRICT COURT OF TRAVIS CO UNTY NO. D-1- GN -18-001682, HONORABLE DUSTIN M. HOWELL , JUDGE PRESIDING

O P I N I O N

Appellants filed thi s appeal from a final take -nothing judgment in the ir suit against Appellees involving the 2015 sale of two s outheast Austin apartment complexes (c ollectively , t he Properties) in which Appellants owned an interest. For the reasons stated below, we will affirm the district court ’s judgment in part and reverse and remand in part.

Summary of Underlying Suit In 2006, Lafayette English Apartments, LP fi nanced its p urchase of the Properties
with a $17,300,000 loan from RAIT Partnership, LP that was secured by the P roperties

. Appellants owned i nterests in business entities that bought the Properties. In 20 09, contending
that the Properties were underperf orm ing, the lender took control of th e Properties , and the
entities that owned the Properties were reorga nized.2 The Properties were sold in 2015 , and in 2018, Appellants filed suit challeng ing
th e sale

. They argued that the Propertie s were sold a t an un de rv alu ed pri ce , which depriv ed th em of a distribution of the sale proceeds , and that th e s ale was improper and should be unwound
because it occurred without the consent of a c o n t r a c t u a l l y r e q u i r e d “ I ndependent M anager
. ” T he
Pr operties wer e sold ag ai n i n 20 18 after A ppella nt s had filed suit

. In th eir suit, Appellants made derivative claims against : (1) the reorganized entities that owned the Properties ( Lafayett e English GP, LLC and S cott Schaeffer ) ; (2) the

p a r t i e s w h o p u r c h a s e d t h e P r o p e r t i e s i n 2 0 1 5 fro m the le nder

- contro lled owner s ( HVC English,
LLC and HV C Lafayette, LLC ) ; and (3) the ultimate buyers and current owners of the Properties ( Austin Lafayette Landing Realty LLC and Austin CMA English Aire Re alty LLC ). Appella n t s pleaded clai ms f or b r each o f contract, breach of fiduciary duty, fraud by non disclosure ,

“ knowing participation / aiding and abetting breach of fiduciary duty , ” and violation s of the Texas Uniform Fraudulent Transfer Act (TUFTA)

. 1 They sought re lief in the form of a de claratory judg m en t, an account ing , a nd qui et ing of title. 2 Ap pellees responded with seve ral motions , includ i n g a plea to the j urisdi ction and motions to dismiss und er the Tex as Citizens Participation Act (TCPA) 3 and Texas Rule of Civil Procedure 91a. 4 T he parties also fi led cross - motion s for

sum ma ry judgment.

1 S ee ge nerally Tex. Bus. & Com. Code §§ 24.001

- .05

.
2 A ppella n ts d id no t p le a d every claim against every A p p e llee.

3 S ee generally Tex. Civ. Prac. & Rem. Code §§ 27.001

- .011

.
4 T h e distric t court ’ s o rde r s d e n ying t he Rule 91a m otion and aw ard ing fees to App ellant s are no t at is s ue in this a ppeal.3 After hearin g the motions, t he di st rict court s igned a s e r i e s o f interlocutory o r d e r s : (1) grant ing Appellees ’ p lea to the jurisdiction as to Appellants’ TUFTA claims ; (2) grant ing a partial motion to dismiss under t he TCPA as to A p pellants ’ claim for “ knowing participation / aiding and abetting breach o f fiduciar y duty ” ; ( 3) a ssess ing $ 50,651 .82 in attorney ’ s fees and $50 ,203.00 in sanctions against Appellant s under the TCPA; (4) overruling all part ies ’ objections to t he summary - judg m ent evidence ; and (5) grant ing Appellees summary judgment as to Appellants ’ remaining claim s an d de n ying Appell ants ’ cross - moti on for summ ary judgment

. The orders d ismissing Appellants ’ claims and the associated orders award ing attorney’ s fees and sa ncti o ns to Appellees w ere memorialized in the district court ’ s Ma y 4, 2021
f inal j u dgm ent

.
Appellate Issues Appellants present multiple issues c hallenging the final judgment and the
subsumed orders . They challenge the order grant ing the p le a t o the jurisdi ction , asserting that they have st anding to bring a TUFTA claim . They challenge t he order grant ing the TCPA
motion , contending that the statute is inapplicable to a claim for “knowing participation/aiding

a nd abetting breach of fiduciary d uty ” in a privat e business t ransa ction and alternatively, that they presented clear

- and

- specific evidence to defeat the TCPA motion . Related ly, they argu e
t hat t he TCPA attorney’s fees award was made without ev aluating whether the f ees were “reasonably ne ces sary” and that the TCPA sanc ti o ns award was “exce ssive and impermissibly punitive

. ” Lastly, Appellants challeng e the district court ’ s e vid entiary rulings and order gr anting Appellees summary j udgment as to Appellants ’ breach

- o f

- contract claim , their cl ai m s a gainst t he general partner that were not the subject of a summ ary - judgment motio n , their re quest for4 declaratory judgment that the property

- sale documents were void for lack of consent by an
Inde p en dent Manager , a nd their quiet

- title claim premised o n t h e void sal e of the property

.

B A CKGROUND
T he number of entitie s i n this case and the similarity of s ome o f their na mes complicates d iscussio n of the complex back groun d

. The relevant c orporate structure is :

0.5% 99.5%

100% 46. 5%
53.5 %

U sing this corporate st ructure, w e will ref er t o the entities as :

• Original Partnership ( Appellant and Appellee N ominal Defendant Lafayette English Apartments, LP) ,

• General Partner (Appellee Lafayette English GP, LLC),

• Limited Partner ( Appellant Lafay et te English Partne r , LLC),

• Subsidiary G eneral Partner ( Nonpar ty Lafayette English Member, LLC) , and

• Subsidiary L imited P artner ( Appellant LMP Austin English Aire, LLC )

. Su bsidi ary Limited Partner L MP Austin Eng lish Aire, LLC Sub sidiary General Partner Lafayette English Member, LLC Gen eral Partner La f ayette Engli sh, GP , LLC ( replace d or i ginal general partner , NCV) Limited Partner Lafa yet te Engl is h Partner, LLC Original Partnership Lafayette Englis h Apartm ents, LP5 We will refer to the buyers as :

• F irst Buyer s ( Appellees H VC E nglish, LLC and HVC Lafa yette, LLC ) , and

• Seco n d B u yers ( App ellees Austin Lafayette Landing Realt y LLC and Austi n C MA English Aire Real ty LLC )

.

P urc hase o f Propert ies by Ownership Entit ies in 2006
Richard Nathan is a r eal

- estat e investor from Los Ange les who acquir ed the
Pr oper ties in 2006 . He s et up t h e own ershi p en tities and handled the o rgan iz a tion. L e e Minshu ll ( who had had prio r dealing s with Nathan ) alon g with his brother P aul Minshull , and two others , William J o hnson and Balazs Cz ak i , formed a limited liability com pany , LMP Austin English Aire, LLC (Subsi d iary Lim i t ed P artner) , to invest in the Prop er ties

. Lafa yett e Eng lish A partments, LP (Original Partnership ) is a Texas limited partnership c reated to own and manage the Properties. Upon its creation, Original Partnersh ip

co nsist ed of a g e n e r a l p a r t n e r , N CV Austi n Gen er al, LL C ( N CV ) , a Delaware lim ited liability

co mpany , and a l imited p artner , Lafayette English Par t ner, LLC ( Limited Partner ), a Delaware limited liability compa ny. Limited Partner and NCV each ha d i t s own LLC agreement , and
Nathan w as presiden t of b oth

. NCV had a 0

. 5% general partnership interest in Original Partnership , while Limited Partner had a 99

. 5% limited partnershi p int erest

. LMP Austin English Aire, LLC ( Su bsidiary L imited Partner ) o wned a 46.5% limited partnership interest in
Limited Partner.
As we w i ll d is cuss further, Original Partnersh ip ’ s “A gree m ent of L imi ted
Pa rtnership of Laf ayette English Apar tments , LP” (th e 2006 Original Partnership Agreement) included provisions desi gned to make it a “special purpose entity.” T he 2006 Original Partnership A gree me nt also included a requirement that the gen e ral part ner , N CV , have so me on e6 serve as an “Ind ep ende nt Man ager” for Original Partnership and obtain t he Ind ependent Manager ’ s written consent befo r e ta king any “Material Action , ” includ ing sale of “all or
subs ta ntially all o f the assets of t he Company

. ”
O rig inal Partnership bough t the Pro pert ies by ob taining $17,3 00 , 000 in first

- lien
f inanci ng from R AIT

. The financin g involved a non recou rse loan tha t required interest

- only

p ayments until its m atur ity date th re e years later , in 2009

. Orig i nal Part nership ’ s p artners,
L imited P artner and NCV , each ente red into p ledge and s ecurity a greem ents w ith RAIT that

p led g ed their respective interest s in Original Partnership as col lateral for the lo a n
. Under the provis i o ns of th e se p led ge and s ecurity a greement s , a ny de f a

ult authorized RAIT t o “transfer and regis ter in its or its nominee’s name th e whol e or any part o f t he C ollat eral ”

— i.e., Limited
Partner ’ s and N CV ’ s interest s in Original Partnership

— and to “act with r e spec t t o the Collateral
or the Pr o ceeds as though Len der w ere the outri gh t owne r thereof.” The se pro visions were incl uded as an altern ative to judici al fore closu re
. As John Reyle, General Co unsel for RAIT
Financial Trust , e x p l a i n e d i n his dep osition, it is “ qu icker and easier for a len d e r to sei ze the

o wne rship entit y than t o seize the property i tself

. ”
A cc ording to Sco tt Sc haeffer, President and Chief Ex ecutive Officer of RAIT
Financial Trus t , t he Properties “never performed well

. ” 5 Schaeffer clarified i n h is deposition
that “ n ever pe r f o rm ed we ll , ” meant that “ expense s [we] re high and growing fa ster than the rents.” Appellants d ispute that the Prope rti es u nderp erformed.

5 S cott S ch aeffer was presiden t of RAIT Financia l Trust from 2000 to 2 016 , CEO from 2009 t o 20 1 6 , and a d ire c to r of R A I T Ge neral, Inc. , the g ene ral partner of RA I T F inancial Tru st

. John Reyle succe ed ed Sc haeffer as CEO of RAIT Financial Trust , a m ortgage r ea l estate investment trust ( R EIT). RAIT Financial Trust ’ s subs idiary , RAIT Partnership, LP, was t he origi nal lende r o n the $ 17,300,0 00 loan

.7 Reor ganization o f Entitie s in 2009 and Loan Increase in 2010 After maturity of th e loa n i n 2009 , and one year into the recession that be gan the year befor e , RA IT t ook ov er the Properties with out a judicial foreclosure . Scha e ffer e xplained
that R AIT “to ok the property bac k becaus e the pr operty didn ’ t p erform either at m aturity or
durin g its t erm paying its interes t

. ” As part of this proce ss, t he entit ies w e re r eorg anized

. After
the reorganization, RAIT contro ll e d t he manage ment o f the e ntiti es and Lafayette English GP ( General P artner ) re placed NCV as g eneral p art ner o f Original Partn e rship. B oth G en er al
P ar tner and L imited P artner o f Original Partnership amended their organiz a tional documents,
sub stituting RAIT

- affi liated employees as Original Partnership ’ s part ners and officer s. Schaeffer

was p resident of a l l the re organiz ed entiti e s, exc ept L imited Partne r. A fte r the 20 09

r eorganization, the RA IT

- affiliated entities step ped into Nathan ’ s shoes and owned the entirety
of General P ar tner o f Original Partnership and 53.5% of Lim ited Partner of Original Par tnership

. 1. 2 009 Original Partn e rship A greement
To effectuate the reorganization , Origina l Partnersh ip execut ed a “First
Amendm ent t o Agreement of Li mited Pa rtnership of Lafayette English Apartment s , LP” (2009 Original Partnershi p Agreem ent). Under th e 2 0 09 Original Partnership Agreem e nt : (1 ) NCV
withd re w fr om the partnership and assigned al l its inter est to G eneral P artner ; (2) Natha n withdr ew from Original Partnership ; and ( 3) Schaeffer became president of bo th G ene ral P a rtner
and L imited P artner

. A f ter the reorganization , as reflec t ed in the chart abo ve , the ow nersh i p interests in Origina l Partnership we r e split between G eneral Partner , wh i c h had a 0

. 5% general partnership interest , and Limited Partner , wh ich own ed a 99.5% lim ited partnership interest

. Limited Partner , in turn, is o wned b y Subsidiary L imited Partner ( LMP Austin English Air e , LLC ) and Subsi diary General Partner ( Lafayette English Member, LLC ) , which hold 4 6.5% and8 53.5% interests respectively in Limited Partner

. Notably , t h e 2009 Origina l Partnership Agreement d oes n ot spe cifically requ ir e appointmen t of an Independe nt Ma na g er as the 2006
O riginal Partnership A greement did

. Appellants contend that the Independent Manager requirement c arried forward , pointing t o a p aragraph stat ing tha t “ except as modified hereby ” th e
2006 Original Partn ership Agreement “ shall continue in fu l l force and effect in accordance with
its terms. ”
2. 2009 G ene ral Partner Agreement
O r i g i n a l P a r t n e r s h i p ’ s 2 0 0 9 O r i g i n a l P a r t n e r s h i p A g r e e m e n t c o n t e m p lated a new
LL C agre ement for NCV ’ s replacement, G ener al Partner . Th e new agreement, “ Limited Liability Com p any Agreemen t of Lafayet te En g lish GP, LLC ” (2009 G eneral Partner Agreement) , was drafted and approved by General Partner and its so le memb er, Subsidiary
G eneral Partner

. T h is 20 0 9 G en eral P artner Agreeme nt d e leted a pro vision re quiring appointment of an Independent M ana ger that had been in NCV ’ s 20 0 6 LLC agreement

. Although th is 2009 G eneral Partner Agreement was unsigned , Appelle es point out that under the
law in De laware

— where General Partner wa s created a n d regi stered as an L LC

— LLC agreements are not subject to a n y statute of frauds and are binding on LLC s r egardless of
whether the LLC agreeme nt is executed

. See Del. Code Ann

. t it. 6, § 18

- 101

- (9). T h e district

court overrule d App ellan t s’ evid entiary obj e ct ions to the admissibi lity and authenticity of th is
2009 G en e ral Partner Agreement and to the testimony from a corporate repr esentative about th is agreement

. Appellants ch allenge thos e evidentiary rulings here.
3. 20 09 Limited Partner A g r e e m e n t Orig inal Partn ership ’ s Limit ed Partner amende d its LLC agree me nt a s p art of the
200 9 reorganization

. The new agreement, “ Amended and Resta ted Limited Li a bility Company9 Agreem ent of Lafayette E nglish Partner, L LC , ” ( 2009 Limited Partn er A greement ) spec ified th at

t h e int erest s in Limi ted Partner were split between Subsidiar y General Partn er , which ha d a
53 .5 % interest , an d Subsidiary Limited Partner, which had a 4 6.5 % interest

. The 2009 Limited
Partner A greement also specified that Sub sidiary General Partner wo uld be the manager of
Li mited Partner , including its business an d aff airs as th e sole limited partner of Origi nal Partnership

. The 2009 Limited Partner Agreement req uire d General Partner t o make capital
distributions to Subsidiar y General Partner and Subs idia ry Lim ited Partner u nder certain
circumstan ces, including th e sal e of the P roperties by Original Pa rtnership

. Thu s, i n th e event of such sale, Li mited Partner had to distribute 53.5% o f any net proceeds to Subsidiary General
Partner and 46.5% of any n et p roceed s to Subsidiar y Limited Partner

. T h e 2009 Limited Par t ner Agreement was signed by S chaeffer for Subsidiary General Partner ( m anager of Limited Partner )
and Lee Mins hull for Subs i diary Limited Partner

. As a result of t h e 2009 reorganization , Lee
Min shull was rel iev ed o f hi s $17.3 million obligati on as guarantor f or th e investment.
4. 2009 Sharing and Relea se Ag reement
Also in 2 009 , Nathan ( as president of the withdraw ing general par t ner NC V ) and
Le e Mins hull ( a s manager of Subsidiary Limited Partne r ) s igned a “ Sharing and Releas e
A greement

. ” Under th i s agreement , t he par ties acknowledge d that NCV had assigned a ll its
interest i n Original Partnership to a ffiliates of the lender, RAIT

. Further, t his agreem ent st ated
that N C V a nd Subsidiary Limited P artn er r el eas ed one anot h e r from claims concerning th e investment and tha t Subsidiary Limited Partner would sha re with N CV any future distribu tions
that Subsidiary Limited Partner migh t rec eive from it s mem b ership interest in Limi ted Partner

. In 2010, Orig inal Partn ership ( as B or rower) an d RAIT CR E CDO I, Ltd

. (as
L ender) signed a “Third Amendmen t to Loan and Securi ty Agreement an d Omnibus Amendment10 to Other Lo an Documents” (Thir d Amended Lo an)

. 6 Unde r t he Third Amende d Loa n , Orig inal Partnership reque sted

— a nd RAIT CRE CDO I, Ltd

. agreed to pro vide

— an advance o f $700,000
to fund capita l improveme nts on the Propertie s. Th is $700,0 00 capita l

- improvements advance
increase d the prin cip al balanc e o f Original Partnership ’ s loan to $18 m illion.

Sale of Propertie s to First Buyer s in 201 5
In 2015, Schaeff er called Ho w ard T reatm an, a manager of First Buyers ( HVC English, LLC an d HVC La fayette, LLC ) , offerin g the oppo rtunity to purchase some re al

- es ta te
owned ( REO ) a sset s , including the Pro perties. Treatman expla in ed i n h is d ep osition t ha t RE O is
an indus tr y term for p r operty that is “R eal Esta te Owned by a lender that basically they ’ ve had to
take back ” aft e r some default by t he borrower

. Original P artnership a nd First Buye r s entered
into an Agreement of Purchase and Sale to convey the P roperties for $18,7 86,500

. Att o rneys from the firm of Ledgewood , P.C. in Pennsylvania r epresent ed both parties in the 2015 Sa le. Treatman signed t he P urch ase and Sal e Agreeme nt fo r the First Buye r s a nd S co tt
Davids on , pr esident o f RA IT Genera l , I nc
. , si gned for Original P artn er s hip

. The sale price
consist ed of First Bu yer s ’ assumpt ion of approxim ately $18 mi ll ion in d ebt f or the Properties , plu s ou t standing accrued i n terest of $786,500

. Given th e purc ha se pric e and the existing debt on the P roperties, there were no net p roceeds from the sale to distrib ute. Fi fteen months after the closing, Csaki , a m ember of Subsidiary Limited Partner , req uest e d a copy of Subsidi ary Limited
Partner ’ s K

- 1 form from a tax manager at RAIT Fi nanci al and learned t h at the Pr operti es wer e sold in 2015

.

6 Appellants pleaded that RAIT Partnership, LP a ssign ed the l oan to RAIT Preferred Holdings I, LLC , whi ch then ass igned the l oan to RAIT CRE C DO I, Ltd

.11 App e llant s contend that th e 2015 S ale to First Buyers w as void because Original Partnership lac ked authority to sell the Proper ties witho ut p rior written conse nt of an Independe n t M anager , which was not o btai ned. Rel ying on a r eport from t heir ex pe rt, Pa u l
H o rnsby, A ppellants also contend tha t the Properties w ere sold for less than their fa ir ma r k e t
value of $29,700,0 00

. Convers el y, Appellee s contend that no consent f rom a n I ndep endent Mana ger was

necessa ry f or the sa le after th e 2009 reorganizati on of the ow n er en tities , and Appellees ’ expert
Robert R adebaugh issued a report disput ing Hornsby’s conclusions as to the v alu e o f the Properties

. Appellees fur ther conten d t hat the Pro perties ’ sale p rice covere d th e outsta n din g loan

o bligation of over $ 18 million a n d allowed the owner entities “to c ut t heir losses and find a third party to take over the operating defi cits and debt se rv ice.” A ppelle es state that th e Properties
continu ed underperform in g af t er bei ng t ransfer r e d t o RAIT i n 2009 , requiring f urther credi t

e xtensions

. A dd it ionally, Appelle es n ote that Ma tt Harker, R AIT ’ s asset manager for the Prop erties , confirm ed in his deposi ti on that t he Propert ies were ex periencing a nega tiv e cash
flow in th e ti m e per iod prece ding the sa le.

Suit Filed and Properties S old to Second Buyers in 2018
In 201 8, Subsidiary Limited Partner demand ed that Limited Partner investigate
and file suit concerning the 2015 Sale

. Limited Partner d ecl ined

. O n April 6 , 201 8, Subsid iary
Limited P artner fil ed its der ivative s uit agai nst O riginal Partner ship , G eneral Partn er , Schaeffer , and First Buy er s , alle ging that the 2015 S ale to First Buyers undervalued Original Partn ership ’ s only assets and was fraudule nt.12 M onths afte r Subsidiar y Li mited Part ner fil ed suit , First Buyer s sold the
Pro p er ti es to Second Buyers ( Austin Lafayette Lan ding Realty LLC and Austin CMA English
Aire Real t y LL C ) for $38 ,450, 000. Appellees contend that th is 2018 sale price reflects Fi rst Buy er s ’ inves t ment in , and impr ove me nt to , the Propertie s in the years afte r t hey bought them

. Ap p ellees also note that Radebaugh attributed “ major increases in property value s in this area ” to
Oracle ’ s December 20 15 announcement that it wou ld locate a corporate campus near b y
. Af t er th e 201 8 S ale , Ap pel l ants amended their p l eading s to bring a qu ie t

- title
claim agai ns t Second Buyers . In sum, Appellants contend that th e 201 8 Sale to Second Buyers is
void and must be unwound because the 2015 Sale to Firs t Buyers is void.
The l iti gati on proceed ed , a nd th e p arties file d t heir respectiv e m oti on s . The
district c ou rt convened hearings on the motions and then issu e d the rulin gs at iss ue i n t h i s a p p e a l

.

DISCUSSION Appellan ts challenge the distric t court’s final judgment and sub sumed ord e rs in
multi pl e appell at e issu es. We addres s th e issues i n t hre e g roup s , as they per t ain to the orders
issued on the plea to the jurisdiction, the T CPA mot ion, and the summa ry - judgment motio n s
.

I. Plea to the Jurisdi ctio n
A. TUFTA C laims A gainst First Buyers Appellants conte nd t h at the district c ourt erred by su s tai ni ng a plea to the jur isdiction that dismissed with prejud ice their TUFTA causes of action a gainst First Buyer s ( HVC Engl ish, LLC an d HVC Lafayett e, LLC ) , alleging the intentional ly fra u dulen t t rans fer13 and/or cons truct ive ly fra udulen t transfer of the P r op er ti es
. 7 See Tex. Bus . & Com. Code § 2 4.00 5 (a)(1), (2)

. Appellants ’ allegations i ncluded t hat Original Partn e r s hip sold the Propert ies (its on ly assets) in 2015 to Fir st Buyer s for a “ dr astical ly u ndervalued price , ” r esultin g in no net proceeds fo r Li m ited Partner to distribute ; that the sa le of the Properti es was without notice to Subsidiary Limited Partner an d was not an arms - length transaction between Original Partne rship
and First Buyer s ; an d th at App ell an ts w ere c reditors with cla ims “ that arose b e fore or within a

reas ona bl e time after the Sal e of the Properties as a resul t of the breach of the [ 2006 Original Partnership Agreement and 2009 Ori ginal Partnership Ag ree ment ]

. ” In the plea to th e ju risdiction , First Bu yer s argu ed that Ap pel lants could n ot meet the thr eshold standing requirement to bring th e s ta tu tor y TUFTA claims against t hem as purchasers of the Pro perties
becau se App ellan t s are no t “ creditor s ” of Origi nal Partnership , the entit y th at sold the Pr operti es
.

B. Stan dard of R e vi e w “C ourts l a ck subject

- mat ter ju risdiction to adj udicate dispute s ini ti ated by parties
lac king stand ing.” Vernco Constr., Inc. v. Nelson , 460 S.W.3 d 14 5 , 149 (T ex. 2015). A
claimant ’ s l ack of sta nding may be cha llenged thro ugh a pl ea to the jurisdict ion

. Sn eed

v. W ebre , 465 S.W. 3d 169, 180 (Tex. 2015)

. To show stan di ng, a plaintiff has the burden of alleging facts that affirmat ively demonstrate th e co u rt’s jur isdiction to hear the cause
. Tex as Ass’n of Bus . v. Texas Air C ontrol B d ., 852 S .W.2d 440, 44 6 (Te x. 1993 ) ; Suarez v. Si lvas , No. 04

- 21

- 0 0113

- C V , 2022 Tex. Ap p. LE XI S 992, at *10

- 11 (T ex. App.

— S an Antonio Feb. 9, 2022, no pet.) (mem. op.) ( no ting that pla intiff has burden to a ffirmatively demonstrate t rial

cour t ’ s jur isdictio n, which includes s tan ding )

.

7 The distri ct cou rt al so denied App el l ants ’ moti on to r econsider th e r uli n g on the pl ea to the jurisdiction

.14 “We r e view a trial c ourt’s ruling on a plea to the jurisdi ct ion d e novo.” In re
Dio cese of Lu bbock , 624 S.W.3d 506, 512 ( Tex. 2021) (orig. pr ocee d ing). I n determining

w hether a plaintiff has affirmativ ely demonstrated the tri al court ’ s jurisdic tio n to hear a c ase, we consid er the facts alle ged in the petition a lo ng w i th any evidence nec essary to resolve the jurisdictional i ssues rai sed

. See T exas Dep’t of Parks & Wildlife v. M iranda , 133 S.W.3d 217,
22 6

- 27 (Tex. 2004) ; Bland Indep. Sc h. Dist. v . B lue , 34 S.W. 3 d 547, 555 (Te x. 200 0 ). If the plain tiff meet s its bu rde n of affirmatively de monstrat in g the court’s jurisdiction t o hear the

cause , th e pl e a to the jurisdiction should b e denied. Diocese of Lubb ock , 624 S.W.3d at 512.
But if t he pleadin gs affir mativel y negate jurisd iction, the plea should be granted wit ho ut
af

fording the plainti ff a n oppo rtunity to replead. Id

.

C. S tatutory C o nstruction of “ C redito r ” U nder TUFTA
T UFTA p rovides a comprehensive st atut ory scheme th rough w hich a cr editor may

se ek re course for a fraudulen t transfer of ass ets or property. Renat e N ix dorf GmbH & Co. KG

v. TRA Mid land Props., LL C , No. 05

- 17

- 00577

- CV, 2019 Tex. A pp. LEXIS 26 , at *10 (Tex.
A pp.

— Da llas Jan. 3, 2019 , pet. de n i e d ) (mem. op.)

. “ TU FTA is ‘ desig ned to pr otect cred ito rs fr om bei n g defrauded or left without reco urse d ue to the actions of u nscrupulous debtors

. ’ ”
Janve y v. GMAG, L. L. C ., 592 S.W.3 d 125, 126 (Tex. 2019) ( q uoting K CM Fin. LLC

v. B radsha w , 457 S.W.3d 7 0, 8 9 (Tex. 2015) )

. TUFTA aims “ to prevent debtors fr om preju dicing creditors by im properly moving a ssets beyond their reac h. ” Id. at 129. When, as here , standing to b ri ng a claim is statutorily conferred, t he statu te itself

serves as th e proper framew ork for a standing analysis , rather than com mon - law ru les

. Ci ty of
D all. v. East Vi ll. Ass’n , 480 S. W.3d 3 7, 43 (Tex. App.

— Dal la s 2015, pet. denied ). “ To ha ve15 standing to bring a cause of action f or fraudulen t transfe r, a plaintiff must al lege it is a ‘ c redi tor ’
with a ‘ cl aim ’ against a ‘ debtor, ’ that there wa s a f raudul e nt transfer of property by the d ebtor, and the plaintif f s ee ks relief concernin g the frau dulently transf erred propert y. ” R enate Nixdorf
GmbH v. Midla nd Inv ’ rs, LLC , No. 05

- 14

- 01258

- CV, 2 016 Tex. App. LEXIS 4508, at *1 2

- 14 (Tex. Ap p.

— Dallas Apr . 2 8, 2016 , pet. di sm ’ d ) (mem. op. on reh ’ g)

. Under TUFTA , a “c reditor” is “a person .

. . who has a claim , ” a nd a “ debt or ” is “ a person w ho is liable on a claim. ” Tex. Bu s. & Com. Code § 24.002(4) , (6 )

. “Debt ” is d e fined as “liability on a claim.”
I

d. § 24.0 02(5). “ C lai m, ” i n turn , is defin ed as “ a right to payme nt or property, whether or n ot the right is red uced to ju dgment, liquidat ed, unliquidate d, fixed, contingent, matured, unmatured, dispu ted, undisputed, le g al, equitable, secured , or unsecure d. ” Id. § 24.002(3 ).

“ Ou r prim a ry objective in construing a sta tute is to ascertain an d e ff ectuate the Legisla ture ’ s int ent without unduly r es tricting or expanding the stat ute ’ s sco pe. ” Janvey v. G olf
C

hannel, Inc. , 4 8 7 S.W.3d 560, 572 (Te x. 2016)

. We derive i ntent from th e pla in mea n ing of the

text c onstrued i n lig ht of the whole statute

. Id

. A statute ’ s term s bear the ir ordinary meaning

un less (1) the Legislature has s upplied a different meanin g by definition, (2) a different meaning
i s apparent fr om the co ntext, or (3) appl ying t h e plain meaning would lead to ab surd results. Id.

“ TU FTA f urther directs that it be ‘ ap plied and construed to effectua te its general purpos e to
make uniform the law with respect to [fra u dulent transfers] amo ng states ena cting [ the Uniform Fraudulent Transfer Act ( UF TA ) ]. ’ ” Id

. ( quoti ng Tex

. Bus. & Com. Co de § 24.012 )

. We may
also co nsi der the construction of pe rtin ent terms in cases app lying the UFTA b y cou rt s in st ates
that hav e enact e d the UFT A. See Janvey , 487 S.W .3d a t 572

- 73. As we discuss further, c ourts uniformly treat statuto ry “ creditor ” status under TUFTA as a question of standing.16 1. S tanding as TUFTA “ c red itor ” Here, Appellants se ek reversal of the dist r ict court ’ s order sus taining the First Buyers ’ plea to the jurisdiction and co ntend that the plea “ is d efective ” b ecause a challenge to
TUFTA c reditor status is a n issue of capacity

— a no n - j urisdic tion al ques tion

— rather than standing

. However, Ap pellants ’ cite d authori ties for this p roposition do not suppo rt it. See Pike
v. Texas E MC Mgmt., LLC , 610 S.W.3d 763 (Te x
. 2020) ; see also Coo ke v. Kar l seng , 615 S.W.3d 911 (Tex. 2021) ; Lips hy v. Bu rk , No. 05

- 19

- 0049 3

- CV, 2020 Tex. App. LEXIS
8840 (Tex. A pp.

— Dallas Nov . 12, 202 0 , no pe t. ) (me m. op.) ; Mosai c Baybroo k One L P

v. Cessor , Nos. 14

- 19

- 00514

- CV, 14

- 19

- 00695

- CV, 202 1 T ex. A pp . LEXIS 5164 (Tex. Ap p
. — Houston [14th Dist.] June 29, 2021, pe t. filed ) (mem. o p.)

. S ignificantly, Pike v. Texas EMC Mgm t. a nd the cit ed c ases that follow it are inapplicable h ere becau se they do not involve
T UFT A claims and do not addre ss statu t o r y “ cred itor ” st atus

. See 610 S.W.3d 763 ; see also
Cooke , 615 S .W.3 d a t 91 2 ; Lipshy , 2 020 Tex . App. LEXIS 8840 , at *1

. W e determine a party ’ s
sta tus as a TUFTA “ c reditor ” by a dh ering to the st atutory definition of that term

. See Youngkin
v. Hi nes , 546 S

. W.3d 67 5, 680 (T ex. 2018) ( “ C ourts must adhere to legislative d efin iti on s of
terms whe n they are supplied. ” ) ; see also T ex. Gov ’ t Code § 311.0 11(b ) ( “ Words and phr ases th at have acquir ed a tech nical or particular meaning , whether by legislative definiti o n or

o the rwise, sh all be constr ued accordingly

. ” ). App ellants ’ reli anc e on Mosai c B aybro ok is similarly misplaced . It i nvolved the question o f wh ether par ties who w ere “ personal ly agg rieved ” a nd had standing to bring th eir
individual TUFTA clai ms also h a d the ca pacity to br ing TUFTA claims on behalf of others in a cl ass “ wi th out first seekin g new class

- certification for th e TUFTA claims. ” Mosa ic B aybrook17 O ne , 202 1 T ex. A pp. LEXI S 5164 , at * 23

- 24

. But there is no issue here involving cl ass clai ms

or wh e t h er any p art y cou ld properly r epresent a class of othe rs
. Next , Appe lla nt s cite a recent “ hold ing ” that a plain tiff

— who c ontrolled a trust
that was an 80% l imi ted par tner in a l im ited p artnershi p

— qualified as a TUFTA cred itor:

Cohen qualifies a s a cred i t o r for p urposes o f t his claim because a trust that he controlled had an o wnership interes t in the A &D p artnership and a r ight to payment when [ the general p artner] D i lick sold A&D ’ s sol e asset a nd then derived millions of dollars in profits when he , [ a p e r s on who controlle d t he pur chas er entity] , and [the purchaser ent ity] re fi nan ced that asse t. S ee Tex. Bus. & Comm. Code § 24.002(2)

- (6).

In r e Al abama & D unlavy, L t d. , 9 83 F.3d 766, 7 74 ( 5th C ir. 2020). Th is sentence i s the extent of
the case ’ s discu s s i on about credit or st a tus

. See id. I t is unclear whet her the p arties presented the appel late court with any is sue about the plaintiff’s standi ng a s a creditor under TUFTA

. T hus,

we d isagree with Appellant s ’ assertion th at the Fifth C i rcuit ’ s “ ho lding ” i n the ca se was “ t hat a limited partner was a TUFTA cred itor an d could pursue improper sale s of partnership asset s. ”
And ev en i f that were the c ase ’ s holding , we would not be b ound by it : “ Whil e Texas courts may certainly draw upon the p recedents o f the F i f th Circuit , or any o ther federal or state c ourt, in
determ ini ng the appropriate fede ral r ule of deci sion, they are obligated to follow only hig her
Texas courts and th e Uni te d States Supreme Co urt. ” Penrod Drilling Corp. v. Williams , 86 8 S.W.2d 29 4, 29 6 ( T ex. 1993)

. Appellan ts have not shown that a ch allenge to TUF TA

c reditor status is a non - jurisdictional issue . Accordingly , w e disagree with their con tention s tha t

t he district court “improperly sustained” a “ defective ” plea to the juris dict io n as to Appellants ’
TUFTA claims a n d the necessity of establishing s t a t u t o r y “ c r e d i t o r ” s t a t u s
.18 2. E q ui ty i nterest h olders i n l imi ted p artnership a re not i ts c re ditors In response to A ppellants ’ plead ing of “ c reditor ” status, First Buyer s r e f e r to a
prov ision in the 2006 Original Partner ship Agreement expressly discl aim in g credito r st atu s: “ N o
P a rtner shall have any interest in any s pecific assets of th e Par tner sh ip, and no Partner shall have
the status of a cr editor with r espect to any distr i b ution pu rsuant to Se ction 16 [ discuss ing
distributions t o partners]

. ” Thus , a s First Buyer s note , i t is undisputed that Limited Partner , in
wh ich Subsidiary Limited Partne r h ad a 46.5% int eres t , owns equity in terest

— not d ebt

— in Origin al Partn ership

. Re l y ing on the construct ion of t he U FTA by other courts , First Buyer s

co ntend that be ing a ho l de r of a n equi ty interest in a limited part nership i s i nconsi stent with being a “cre ditor ” in the conte xt of statutory fraudul ent transfe r claims. We agree.
First Buyer s poin t t o t he customary distinction between equity interests and de bt ,

a s referenced by a Pennsylvania federal d istrict court : “[ I ]t is w el l

- establi s hed that a limited partner ship interest constitu tes an equity security

. I n turn , cour ts wi thi n the Thir d Circui t h a ve consistently held that equity interests are not ‘debt’ withi n the meaning of PUFTA [Pennsylvania
U ni form Fraudulen t Tr an sfer Ac t ] or the Bankruptcy Code’s a nalogou s fraudulent t ransfer provision

. ” United States v. Ro cky Mo unt ai n H oldings, I nc. , 782 F. Supp. 2d 106 , 122 ( E.D. Pa. 2011) (internal citation omitt ed) ; see 11 U.S.C. § 548

. That court also di stinguis hed the fi xe d

nat ur e of cred i tors ’ claims from t he vari able distribut ions to partners : “ It is widely he ld th at true

cr ed ito rs ‘ hold c laims re g ar d less of the performance of the partnership business, ’ wher eas payment of par tnership distributions ar e ‘ subject to [] pro fi ts or l osses. ’ ” Id. (quoting In re
R ive rside

- L inden Inv. Co

. , 925 F. 2d 320 , 323 (9th Cir. 1 991) )

. First Buyer s also cite as persuasive authority the Ninth Ci rcu it ’ s conclu sion s that “ [ a] partnership inte rest is not a claim”19 and that “ if partn ers hip interests are not ‘claims,’ then the hold ers of those in teres t s are not
‘c reditors.’” In re R iv erside-Linden Inv. Co ., 925 F.2d at 323.
S tate courts have simila r ly r ejected the n otion th a t h olders of equity interest s or investments have “ cr editor” statu s under the Un iform Fraudu l ent Transfer Act

. One court
de termin ed , as part o f its constructive- fr aud analysis under t he Ariz ona UFTA , that an “ interest in a partn ers hi p is not a debt of th e pa rtnership .” Hullett v. Cousin , 63 P.3d 1029, 10 35- 36 (Ari z. 2003)

. Another court recognized , when a pplyi ng the Hawaii U FT A, t hat “the ret u rn of a capital

con tr ibuti on to or for t h e benef it of an investor is not the same as t he re payment of in debtednes s
t o a creditor .” Schmidt v. HSC, Inc

. , 358 P.3d 7 27 , 737 -73 9 (Haw. Ct. App. 2015 ), cert. denie d , 2015 Haw. LEXIS 330 (Haw. D ec. 9, 2015)

. And another court concl uded that : “Equity
investme nts neither trigger a right to payment no r transform cap italists in t o creditors

. Consequent ly, [plain tiff ’s] allege d equity i nterest in [a busine ss entity] does not con stitu te a
claim for th e pu rposes of th e UFTA , and [he] can no t claim creditor st a tus on its account .” Maloney v. Alliance Dev . Grp. , LLC , No. 06 CVS 67 76, 2006 NCBC LEXIS 14 , at *20 (N.C. Super. Ct. Sept. 18, 2006).
Debt holders , b y contrast, have been afford ed statutory “c red ito r” status un d er
TUF TA

. See , e.g
. , C ohen v. New Biss Prop., L.P. , No. 0 1-19-00397- CV, 2020 Tex. App. LEXIS 9190, at *26 ( Tex

. App.—Houston [1st Dist.] Nov. 24, 2020, pet. denied ) (mem. op.) ( addressi ng iss ue of plaintif f’ s sta nding to p urs ue TUFTA claim aga in st purchasers as TUFTA “ cre ditor”

a fter s et tl ement a n d d ismissal of plaintiff ’ s underlying cla im a gainst debtor ) ; Midl and Inv’rs , 201 6 Tex. App. LEXIS 4508, at *14-15 (conc ludin g th at plaintiffs h ad sta nding to seek TUFTA relief agai nst Brauss defendants b ecause pla intiffs “showed the y had a claim, their judgment against the Br ausses , that they w ere creditors of th e Braus ses and the Bra usses w ere their20 debtors, and that the Braus s es ma de a fraudule nt tra ns f er ” ); Parham Fam

. Ltd. P’shi p v. Morgan , 4 34 S.W. 3d 774, 78 5 (Tex. App.

— Houston [14th Dist.] 2014, no pet

. ) ( co ncluding tha t judgment
creditor of debt or had standi ng to bri ng TUFTA claim challenging sale of deb tor ’s property);
E

ssex Crane Rental Corp. v . Carter , 371 S.W.3 d 366, 386

- 8 7 (Tex. App.

— Hous ton [1st Dist.] 2012, pet. denied) ( conc l udi ng tha t creditor w i th judgment lien ag ai nst d ebtor’s propert y had

s tand ing to sue transferee under TUFTA aft er property was sold an d l ien w as extinguished)

. O n this record, w e c onclude that Subsi diary Limited Partner ’ s pa rtners hi p interest
in Origina l Partnership , as the 46. 5% int e rest holder i n Limited Partner , is an equity i nterest that
does not co ns t itute a “ d eb t ” or a “ claim ” a s those t er ms are defin ed in T UFTA

. See T ex. B us. &
Com. Code § 24 .002(3) , (5) ; ac c ord I n re Riverside

- Linden In v. , 925 F .2d at 323 ; Rocky
Mountain Ho ld i ng s , 782 F. S up p. 2d a t 12 2 ; Maloney , 2006 NCBC LEXIS 14 , at * 20

. Moreover, b eca use TUFTA defines a “ creditor” a s “a person

. . . who has a cl a im,” the lack of a “claim ” de feat s Appellants ’ pleaded statu s as a “ c reditor

. ” See Tex. Bus. & Com. Code § 24

. 0 02(4)

. Fin al ly, b ec a use Appellants are not statutory “creditors” of Original Par tnership , the seller of the Pr op erties , Ap p el lants lacked standing to bring the ir TUFTA c laims as plea ded

aga in st First Buyer s , the 2015 purcha sers of the P roperties

. S ee id

. ; see also Midland Inv’rs , 2016 Tex. App. LEXIS 4508, at *1 2

- 14

. W e overrul e Appella n ts ’ eig hth issue.

II. TCPA Moti on and Award of Attorney ’ s Fees an d Sanctio ns
A. K nowing P articipation C laim a g ainst Fi rst Buyer s Appellants also c hallenge the district c ou rt ’ s or der g ran ting First Buyer s ’
amended parti al motio n t o dismiss under the TCP A

. Appel lants con tend that the TCPA is inapplicable t o a claim of “ kno wing participation/ a idi ng and abetting br e ac h of f iduci ary d ut y ” in21 a private transaction and furth er, t hat they present e d clea r - and

- specific evi dence supporti ng t h at

c l aim. Relatedly, they con tend that the district cour t abused its discr et ion by awar ding TCPA attorney’s fee s without evaluating w he ther t he fe es w e re “reasonably ne cessary” and by
awardi ng TC PA sanctions that were “excessive and imp ermiss ibly pun iti v e .” We address these
issues in turn.

B. TCPA Framework and S tandard of Re view
The TCPA wa s de signe d to protec t bo th a de fen da nt ’ s right s o f spe ech, p et it i on, and associat ion a nd a cl aimant ’ s ri ght to pursue v a lid le gal claims for injur ies caused by the
def en dant

. Montelong o v
. Abrea , 6 22 S.W. 3 d 2 9 0, 295 (Tex. 202 1); S PS Austin, Inc.

v. Wilb our n , No. 03

- 20

- 0005 4

- CV , 2021 Tex

. App. LEXIS 9 4 08 , at * 2 ( Te x. A p p.

— Austin
Nov

. 1 9 , 2021, no pet.) (mem. op.) ; see T ex. Civ. P rac. & Rem. Cod e § 2 7.00 2. 8 “ The Legi sla tu re has instructed tha t the TC PA ‘ shall be construed liber ally to effectuate its purpose
and intent fully. ’ ” Ex xonMobil Pipeline Co. v
. Colem an , 51 2 S. W .3d 895, 898 (Te x. 2017) (quoting Tex. Civ. Prac. & Rem. Code § 27.0 11(b) )

. In f urth ering its purp ose , t he TCPA

e s t a b l i s h e s a three

- step process to evalu a t e whe ther a legal acti on should be d is m issed for

8 S ec tion 27.002 des crib ing the TCPA ’ s purpo se w a s unchan ged in 20 19 , but other po rti o ns we re exte n sively amend ed. See Act of M ay 2 1 , 2011 8 2 d Leg., R.S., c h. 341 , 201 1 Tex. Ge n. L aw s 96 1, amended by Ac t of Ma y 2 2, 201 3 , 83 d L eg ., R.S., ch. 1042, 2 0 13 Tex . Gen. Laws 2499 (af fectin g i n rel evant part T ex . C iv. Pr ac. & Rem . C ode § 27.004) , a m ended by Act of May 17, 2 019, 86th Leg., R .S., ch. 37 8, 2 0 19 Tex . Gen. Laws 6 84, 6 84

- 687 (i n re le v ant pa rt amendin g T e x. Civ . P rac . & Rem. C o de § § 27.0 01(2), .003( a ), .00 5(b) & (d) , .006( a), .009 (a) )

. Be cause t his sui t w as fil ed on Apr il 6, 2018 , the pre - amend men t ve r si on o f t he TCPA a p pl ie s
. See Ac t of Ma y 17, 20 19, 86th L eg., R .S., ch. 378, §§ 1 1

- 1 2, 201 9 Tex. Gen . Law s a t 687 ( s pec i fyin g that amendm ents to TC PA app ly “ only to an actio n f iled on or after ” S e p tem be r 1, 2019). We will re fer to rele vant, applicab le p r ovisio ns of the TCPA th a t were am e nded i n 201 9 as “ former Tex. C iv. P rac. & Re m. C od e § 27.

. . . ”22 impro per i nfring emen t of pr ot e ct e d right s. See Mo ntel o ngo , 622 S.W .3d at 295

- 96 ; Wilb ourn , 20 21 Tex

. App. LEXIS 940 8, at * 2

. First , a par ty seeking d i s mis sa l bea rs the burden o f sho wing by a prep ond eran ce of the evid ence that th e no n - mov ant ’ s l ega l action is base d on, relates to, or is i n re s pons e to a
par t y ’ s exe rcise of t h e right of free sp ee c h, right to pe t iti on, or right o f associati on
. Former Tex.
Civ . Prac . & Re m. Code §§ 27.0 0 3(a ), .005(b) ; Mont elong o , 62 2 S. W.3d at 29 6 ; Wilbourn , 2021 Tex. App. LEXIS 9408 , at * 3

. I f the m ovant m e e t s t h a t b u r d e n , the tr i al cou rt mus t dismiss the

act io n unless t he non - mova nt es ta blishes by clear and sp eci fic evi dence a prima f acie case fo r

e a ch element of its claim

. Forme r Tex. Civ . P r ac. & Rem. Cod e § 27.005(b ), ( c); In r e Lipsky , 460 S. W.3 d 579, 58 6 (Tex. 20 15) (orig. procee d ing); Wilbou r n , 2021 Te x. App. LEXIS 9408, at

* 3. Finally, eve n if the non - movant sat isf ies its b u r den of est abl is h i ng a prima facie case , the

cour t “ shall d ism iss a legal act i on agains t the moving p arty if the mov i ng party esta blishes b y a
pre ponderance of the evidence each es se ntial eleme nt of a va lid def e nse to the nonmovant ’ s claim. ” Former Tex. Civ . Prac . & Re m. C ode § 2 7.005 (d) ; Coleman , 512 S .W.3d at 8 98

. In
de term inin g w hether the TCPA appli es and whether t o dis miss the case, th e t ri al c our t cons iders

“ the p leadin g s an d s upporting and oppos i ng affidavit s stating the facts on w hich the liability or
defense i s b a sed. ” Former Tex . C iv. Prac. & Rem. C ode § 27.00 6(a ) ; In r e Lipsky , 460 S.W.3d

at 5 8 7 ; Wilbourn , 2 0 21 Tex. App. LEXI S 94 08, at *2

- 3

. A “ p r ima fa cie case ” refe rs to evidence that is “ su fficient as a matter of law to
establish a given fact if i t is not reb u tted or contra dic ted

. ” Landry ’ s, Inc. v. An imal Legal Def.
Fund , 63 1 S.W.3d 40, 54 (Tex. 2021). “ It is the ‘ mi nimum qua ntum of evidence n ecessa ry to support a r at ional inference that the allegation of fact is true. ’ ” Id. The claimant mus t submit

ev ide n ce of fac ts to ma ke the prim a f a cie ca se. M ontel ongo , 622 S .W.3d at 301 ; see Tex. Civ.23 Prac. & Rem . Code § 27.0 05(c) ; Wi lbourn , 2021 Tex. App. L EXIS 9408, at * 4

. E vidence of a prima f acie case must be clear and specific to avoid di smissal, mean ing th a t a “ plaintiff must provide enough detail to sh ow th e fact ual b asis for its claim

. ” L andry ’ s , 6 31 S.W. 3d at 54 ( qu oting Bedf ord v. Spassoff , 520 S.W .3d 901, 904 ( Tex

. 2017) ) ; see Tex. Civ. Prac. & Rem. Code § 27.005(c)

. Here, A ppellant s dispute whether First Bu yer s met the ir burden of sho wing the
TC PA ’ s app lic abilit y , and First Buyer s disp ute whether Appellants me t th eir burden of establishing a prima facie c ase
. We revie w de novo wh ether the TCPA mova n t established by a

pr epon der ance of t he evidenc e that t h e le gal act i on is subject to th e TCPA a nd whether th e

non - m o vant pres ented clear an d specif i c evid ence estab lish ing a prima facie case for e a c h

ess en tial ele m e nt of its chall enged cla ims. See Serafine v. Blunt , 466 S.W.3d 35 2, 357 (Tex. App.

— Austin 2015, no pet.) ; Wilbourn , 2 021 Tex. A pp. LEXI S 9408, a t * 4

- 5

.

C. App lica bility of TCPA
Und er th e f irst ste p of the T CPA process , First Buyer s had t he burden to show
that Ap pellees ’ claim of “kn owing particip ati on /aiding and abetting breach of fiduciary duty”

was within the scope of the TCPA. A ppellants c o n t e n d t h a t the TCPA i s inapplicable to “a purely p rivate busi nes s transac t ion ” in which First Buyer s “ had divergent interest s from a party on the op posit e side o f a t r a n s a c t i o n
. ” We co ncl ude that First Buyer s met their bu rden of showing that t he TCPA applies.
Fi rst Buy er s ’ amended partial moti on to di smiss und er the T C PA asser t ed t h at Appell ants ’ le gal actio n against the m w as based on, related to, or in resp ons e to First Buyer s ’

e xercise of t he ir right of asso ciation

. See Former Tex. Civ. Prac

. & Rem. Code § 27.00 3 ( a )

.24 “ T he phrase ‘ based on, relates to , or is in re sp o nse to ’ d icta tes the nexus t hat must exi st between
the ‘ legal ac tion ’ a nd the protected con du ct under the TCPA. ” Grant v. Piv ot Tech. Sols., In c ., 556 S.W.3 d 865, 8 79 (Tex. App.

— Au stin 2018 , pet. deni ed )

. At a minimum, t he phra s e
encompas ses a “ legal a ct ion ” th a t is factually pred icated on the alleged conduct that falls withi n the scope of the TC PA ’ s definition of the exercise of the right of free speech, pe tition, or
association

. Id

. E xercise of the righ t of association is de fi ned in the TCPA as “ a c o mm unication
b etween individuals who join to gether to collectively express, pr omote, pursue, or d efen d
common interest s. ” See Former Tex. Civ. Prac. & Rem. C ode § 27.001(2) ; In re Lipsky , 46 0 S.W.3d at 586 n.6

. “ C ommunication , ” i n tu rn, is defined in the TCPA a s incl uding “ the

m aking or submit ti n g of a statement or document in any form or medium, includ ing ora l, visual,
wri tte n , audiovi sual, or elec tronic

. ” Tex. Civ. Prac. & Re m. Code § 27.001(1)

. Although First Buyer s deny the a l legatio ns of wrongdoing a gai nst them , t hey point to Appel lants ’ p l e adings a s proof of “ communication ” un der subsection 27.001(a) of the
TCPA

. See id. § 27.006 (stating that trial court may consider plead ings as proof in d etermining
whether legal action i s subject to or should be dismissed under TCPA )

. First B uyers no te that

t he se pleadings

— which do not des cri be the parties as disinterested buyers and sellers i n a n

arms - length transaction

— alleg e com m unica tion of a schem e b etween First Buyers , their princi pals, and Schaffer to coll ecti vely pursu e th eir c ommon in terest i n sh aring profits fro m the
full value of the P roperties through creation of a sham sale

. T h e pleadings factually assert that
Sc ott Sch aeff e r

— as p reside nt of Origi nal Partn e rship an d a princi pal in one o r more entitie s that

co nt rolled the gen era l p artner

— “ with the ai d of ” the Fi rst Buyers ’ prin cipals, Howard P

.25 Treatman and John J . Curry , manufacture d the complained

- of sale thr ough commun icati ons in

w hich th ey expre ssly “dis c ussed ” the Propert ies :

• Scha effer “ contacted ” two fri ends, Treatman an d Curr y, “ to m anufactu re a drasticall y below market sale of the Properties, that would res ult in no money to [ Original Partners hip ] ” ;

• Sc haeffer and G ener al Partner [ Lafayet te E nglish GP , LLC ] “ n egotiated and agreed ” to a lesser am ount than First Buyers of fe red fo r the Properti es ;

• First Buye rs “ were aware ” that their initial proposal was re duced to the lesser amount ;

• First Buye rs “ knew ” that Schaeff er an d General Partner were not ex erc i sin g their fiduc ia ry duties b ecause al l of t he interested parti es (buyer, s el ler , a nd lender) shared Le dge wood counsel in ne gotiating the sale and “ paper ing the transac tio n ” ;

• S chaeffer, Treatman, and Curry have had a “ long , ongoi ng relati onship ” and “ [ t ]h r oug h various ent i ties, the three have owned and/or m anaged seve ral propert ies to ge ther over the last d eca de ” ;

• “ Thi s symbiotic relationship continued with the fraud ule nt sale o f the Propert ies her ein ” ;

• “ Treatman con fi rmed to Sc h aeffer [in an em ail exc erp t co pied in to the p etition ] that he and Curr y were in terested in looking a t, a mon g others, the Properti es in Austin

. H o w long Schaeffer, Treatman, and Curr y discussed the Prope rties prior to Janu ary 2 2, 2015, is unkn ow n ” ;

• All pa rticipants in th e sale of t he Properties we r e “ working in tandem ” with counsel to transfer the Prope rtie s ; an d

• “ Evidence clearly i ndicates that the sale was not an arms - length transaction

. ”

When r e spond ing to First Buye rs ’ TC PA motion to d i smiss , App ellants confirmed t heir
chara c ter iz ation of the se communications : “ [ First Buyers ] ’ ‘ neg otiations ’ wit h t he ir lon gtime
business partner , and co

- owner of several multifamily properties, do not amo unt to a n arms’ length transac t ion ” and “ almost no n egotia t ions took place in the sale of [ O rig inal Partnersh ip ] to
the [ First Buyers ] , largely b ecause these p art ie s make mil lions toge ther from th eir numerous shared properties each year. ”26 As First Buyers n ote, negotiating and closing on the rea l property transact ion

necess arily requi red a “ com m uni cation ”

— that i s, “the making or submitting of a statement or
doc um ent in any fo rm or m edium, includin g oral, visual, written, audiovisual, or electronic ”

— and First Buyers “ could not have consu mmated t h e transac tio n withou t commu nicat ing among
themselve s an d with Schaeff er and other defendants in s ome way. ” See id

. Further, t h e a ff i davit
of Howard Tre atm an, filed with the TCPA motion , avers that such communications oc curre d : “ I,
on behalf of [ First Buyers ] HVC E ng lish, LL C and HVC Lafayette, LLC , co mmu n ic ated with
Scott Schaeffer and ot hers in con nection with t he purchase an d s al e of the Properties in 201 5. ”
The bas is for A ppellants ’ knowing pa rticipation claim , a s alleged in their pl eadings , is the oral and wr it ten commu n ication among F ir st Buyers , S chaeffer , and Gene ral
Partner that occurr ed whil e they were collec tively p ur suin g t he ir common interest i n sharing

pro fits from the sale of the Properties

. These communicat ions implicate First Buyers ’ exercis e of the i r right o f association

. S ee F ormer T ex. Civ. Prac. & Re m. Code § 27.001(1), (2) ; In r e Lipsky , 460 S .W.3d at 58 6 n .6

. T he y fall within t he “ w ide n et ” of the TC PA

. S ee Adams

v. Starside Custom Builders, LLC , 547 S.W.3d 890, 894 (T ex. 2018) (“The TCPA ca s ts a wide

n et.” ) ; see also Lara v. S t reamline In s. Ser v s
. , LLC , No. 03

- 19

- 00474

- CV, 20 20 Tex. A pp. LEXIS 10436 , a t * 8

- 9 ( Tex. App.

— Austin Dec. 31, 2020, no pet.) (mem. op.) ( conc luding that TCPA applied to plain tiffs ’ claim of knowing partic ipation in bre ach of fid uciary du ty because it

c on cerned com m unications in whi ch defendant s “ all eged l y joined together to col le ctively

e xpr ess , promote, pursu e, or defend their common interests in developing business , ” i mplicat ing
d efendants ’ exercise of r ight of associ ation ); Re eves v. H ar bor Am. Cent., Inc ., 631 S .W.3d 299,
30 3, 3 08 (Tex. A pp
. — Houston [ 14th Dist.] 2020 , pet. d en ied ) ( con clu din g that TCPA appl ied to
brea ch

- of

- fiduciary

- duty counterclaim that implicated e mployee ’ s ex ercise of right of assoc iation27 because it involv ed com m u n ic ations about hi s “ endeavo r with othe rs
. . . to colle ct ively expr e ss, promote, pursue, or de fend a co mmo n i nt erest ” i n esta b l ishi ng co mpeting business ) ; Grant , 556 S.W.3d at 881 ( concluding that TC PA applied to plaintiffs ’ breach

- of

- fi duc iary

- du ty claim
th at concerned c o m m u n i c a t i o n s b e t w e e n d e f e n d a n t s w h o j o i n e d t o g e t h e r t o p u r s u e c o m m o n i n t e r e s t i n e m p l o y m e n t w i t h c o m p a n y a n d r e t e n t i o n o f c o m p a n y ’ s a b i l i t y t o o p e r a t e a s h i s t o r i c a l l y u n derutilized b usiness , which implicate d defendant s ’ right of a ssociatio n ) ; Elite Auto
Bo dy, LLC v. Autocraft Bodywer ks , Inc. , 52 0 S.W.3d 1 9 1, 205 (Tex. App.

— Austin 2 017, pet.
di sm ’ d) ( c oncluding t hat TC PA applied to breach

- of

- fiduciary

- duty claim alleg ing
communication s be tween defendants to lure competitor ’ s employ e es to th ei r business and to
share o r use confid ential information , implicat in g exercise of righ t of ass ociation )

.

D. Inappli cability of S ubsequent A mendments to TCPA
See ki ng to exclude their claim of “knowing participation/aiding an d abetting
brea ch of fiduc i ary duty” from the TCPA , Appellant s contend t hat the 2019 a mendme nts t o the

statute “ evidence the Leg isla ture ’ s inte nt that § 27.001 (2) does not appl y to this type of d ispute

. ”
But we h av e rejected the argument th at a mendments to th e TCPA control our con struction of the prior l a w. See Wilbo u rn , 2 0 2 1 Tex. App . LEXIS 94 08, at *18

- 19. In Wilbo u rn , we not ed that
the TCPA amen dments are inapplicable to cases fil ed before September 1, 2019 :
We look at the plain language of the appl icabl e sta tute and give lit tle weigh t to a men d m ents i n interpreting the p rior law. Pruett v. Harris Cnt y. Bail Bond B d. , 249 S. W.3d 447, 454 (Tex. 2 008). We are constrai ned to cons tru e the statute as it ex isted, to apply the applicable law as wri tten

— not as i t would later be writt en

— absent the L egi s l ature m a king the law retr o actively ap plicable. Hegar v. American Multi

- Cinema, I nc. , 605 S.W.3d 35, 4 4 (Tex. 2020).

Id. at *1 9. App ell a n ts do not address Wi lbo u rn
.28 Relying i nstead on two other decis ions, Grand Parkline, LLC v. Mama Fu’s
Lake l ine, L LC , No. 03

- 1 9

- 00683

- CV, 2020 T ex. App. LEX IS 9358 (T ex. App.

— Austin Dec. 2, 2020, no pet.) (mem . op.) and Crossroads Cattle Co. v. AGEX Tra din g , LLC , 607 S.W.3d 98 (Tex. App.

— Austin 2020, no pet.) , Ap pella nts contend t hat we “ expressly narr owed the
defini ti o n of ‘ ri g ht of associatio n ’ under the p re - 2019 st atute

. ” W e disagree. A s an inter mediate

c ourt of appe als, we may not “ narrow ” a TCPA d efi ni tion

. See Caden a Co mercial USA Corp.

v. Tex as Alco holic Bev e rage Comm ’ n , 518 S.W.3d 318, 337 (T ex. 2017 ) ( “ We reve r sed th e court of appeals ’ judgment b e cause it r ead langua ge into the TC PA that na rrowed it s applicatio n. ”)

. When a statute defines its te rm s, we may not “ c onst ruct a restated definition using alt ernat ive verbiage that adds or subtracts substan t i ve re quir e ments o r limiting factors

. ” Tex as C o mm ’ n on
En v ’ t Qualit y v. Maverick C ounty , 64 2 S.W.3d 537, 541 (Te x. 2022)

. Further, n either Gran d P ar kline nor Crossr oads Cattle purport to change any of

our prio r decision s. Cf. Lawson v. Keene , No . 03

- 13

- 00498

- CV, 2016 T e x. App. LEXIS 1812 , at

* 13 (Te x. App.

— Au stin Feb. 23 , 2016, pet. denied) ( mem. op .) ( “ W e may no t overrule a prior panel opinion of th is court absent an i ntervening change in the law by the Legis lature or a h igher court or by decisi on of this co urt sitting en banc. ” ( q uoting Ayeni v. St ate , 440 S .W.3d 707, 7 17 (Tex. App

. — Austin 2 013, no pet.) (Pember ton, J. , concurring) ) )

. Both cas es co ncluded that
whe n tw o co unt e rparties enter into a single arm’ s length tran saction, they do not nec essar ily “joi n to collec t ivel y
. . . pursue a common in terest ” wi thin the mea ning of t he TCPA. See
Crossr oads Cattle , 6 07 S.W .3d at 105 ( concluding that de fe ndants did not “ alle gedly c o llectively

pursue any ongoing or greater enter prise than one mere sale of c attle”); Grand Park l ine , 2020 Tex . App. LEXIS 9358 , at * 14 ( concluding t hat sub sequent landlor ds were not alle ged to “share[] any specific comm on in terest with the prio r landl o rds other than mer e co nsummation of29 the sales transaction”) ; see also Tex. Civ. Pra c. & Rem. C o de § 27.001(2)

. T he pl e adings in
those cases are di sti nc t from A ppell an ts ’ pleadings here, which include assertions th at “ t he sale

was not an a rms - len gth trans action ” ; that particip ant s in the sale of the Properties were “work ing
in t a ndem ” ; tha t Schaeffer , General Partner , and First Bu yers ha d a “long, ongoi ng relationsh ip ”
invo l vin g own e rship or manag ement of several properties to ge ther over the la st d eca de ; and that
the sale of the P roper ties was a continuation of th at “ symbiotic re l ation ship

. ” Having considered the ple adings and the aff idav it in this recor d , w e concl ude that

t he T CPA ap plies to Appel lants ’ claim of “knowing pa rti ci pation/aiding an d ab ett ing breach of fiduciary duty” based on the implication of First Buyers ’ right of ass ociatio n
. S ee Former Tex.
Civ. Prac. & R em. Code § 2 7.006(a)

. Because Fi rst Buyers de mons trated that the TCPA applies ,

w e consider next whe th er Appellants pr esen te d cle ar and specific evidence establi shing a prima
facie case for each essential elemen t of their knowing participation c lai m agains t First Buyers

. See id. § 27.0 05 (c)

.

E. Prima F ac ie C ase for K nowin g - P articipation C laim
Unde r t he seco n d step of th e TC PA pr ocess , Appellants had the burden t o establish b y clear and specific evidence a prima f acie case for each element of their claim a gainst
F irst Buyers

. A t the ou tse t, we note t hat Appellants p lea ded their claim as “knowing

pa rt icipati o n /aiding a nd a betti ng breach of fiduciary duty

. ” W e hav e previously concluded that
there is no co mmon - law c laim for “ aidi ng a nd abe tting ” in Texas. H amp ton v . Equity Tr. Co. , 607 S .W. 3d 1, 5 (Te x . App.

— Austin 20 20, pet. denied) ( “ In the abse n ce o f recognition by t he
S uprem e Court of Texas or the Legislature, we conclude t hat a common

- law cause of action for
ai ding and a betting does n ot exist in Texas. ” ) ; Thibo deaux v. Starx Inv. H ol din gs, Inc .,30 N o
. 03

- 20

- 00613

- CV , 2 021 Tex. App. LEXIS 8576, a t * 38 n.8 (Tex. App.

— Au sti n Oct. 22,
2021 , pet. dism ’ d ) (mem. op.)

. However, t he Texas Supreme Court has r ecognized a cla im for knowing partici pation in a breach of fiduc iary duty : “It is settl e d as the law o f this State tha t whe re a third party knowingl y p ar ticipates in the b reach o f duty o f a fiduciary, such third party becomes a jo int

tort

- feasor with the f iduciary an d is liabl e as such.” Kin zbach Tool Co. v. C orb ett

- W allace Corp

. , 160 S.W.2 d 509 , 514 (Te x . 1942) ; see Lar a , 20 20 Tex. App. LEXIS 10436, at * 20

- 21 ; Darocy v. A bildtru p , 345 S .W.3d 129, 137 (Tex. App.

— Dalla s 2011, no pe t.) ; Cox Tex

. Newspapers, L.P. v. Woo tten , 59 S

. W.3d 717, 720

- 21 (Tex. App.

— Austin 2 001, pet. denied)

. E s t a b l i s h i n g a c l a i m o f k nowing particip atio n in a breach of fiduciar y d ut y r e q u i r e s s h o w i n g t h a t : ( 1 ) t h e r e w a s a fiduciary duty owed by a third par ty to the plaintiff ; (2) the defendant kn ew o f t h e fiduciary re la tionship ; and (3) th e defe n dant was aware of his pa rtici pation i n the third party ’ s br each of its duty. Darocy , 3 45 S.W.3d at 138 ; se e Wootte n , 59 S.W.3d at 722 (applying
Kinzbach to plain t i ff ’ s allegations)

. The part ies dispute whet her A p pellants establ ish ed by clear
and s pe cific evidence the second and thir d elemen ts : that First Bu y ers knew of a fiduciary

re lat io nship between Schaeffer, Gen eral Partner, and Appellants , and that First Buyers w ere aware of their part ici pat ion i n Schae ffer ’ s and General Partner ’ s breach of th e ir dutie s to Appellants

. Appe lla nt s cont end that First Buyer s knew t hat Schaeff er and General Partner owed fiduciary duties to Appel lan ts through “ inferr ed ” a nd “ im puted ” knowledge of the 2006 Original
Partne rship Agre e ment containing the fiduciary oblig atio ns and th e Independent Mana ger

r equir ement for sale of the Properties

.31 1. Inferred knowledge First, re lying on Treatman ’ s de p osition testimony , Appella nts a ss ert that First Buyers ’ knowledge of the fiduciary dut ies ow e d may be inferred from Treatman ’s re ques t for

an d re ceipt of a CD i n 2 015 c ontaini ng copies of t h e loan and acquisition documents concern ing

t h e prior conveyan ce of the Properties, inclu din g the 2 006 Original P artnership Agreement

. B ut
Treatman con firmed in his deposition that : (1) he did not re view the CD o r read t he

or gan izational do cuments whe n t he y were sent ; (2) he never had discussio ns with Schaeffer
about the necessity of an Independent Man ager to aut ho r ize a ny sale of Original Partnership ’ s
assets ; and (3) if there were such a requ iremen t, he was una w are of it. T her e is no evid ence to
th e co nt rary
. T he two authorities that Appellants cite for th e ir inferred

- knowledge argument do not supp ort it

. I n Gr aham Mortg ag e Co rp. v. Hall , ther e i s no disc u ssion o f in ferred knowledge
beca us e it w as undisputed that the defend ant

— the mo rt ga ge len der f or the sale of the real estate
at issue

— had act ual knowledge of the t erms of the parties ’ a g reem ent s
. See 307 S.W. 3d 4 72 , 480 (Tex. App.

— D allas 201 0 , no pet .)

. In McNeil Pac ific Inv estors Fund 7 2, Ltd . v. Ernst &
Y

oung & BDO Seid man , an un publ i s hed and nonprece dential case , the court considered wheth er the statute of limita tions barred claim s and w hen a p laintiff is deem ed to h ave construct ive noti c e of his claims for p u r p o s e s o f the discovery r u le

. S ee No. 05

- 94

- 0 1527

- CV, 19 95 T ex. App.
L EXI S 3 551 , at * 15

- 16 ( Tex. App.

— Dallas July 28, 1995, writ den ied) (not designated for publication)

. 9 T hese ca ses a re not persuas ive

. See I n re Lipsky , 460 S.W.3 d at 5 90 (noti ng that

9 See Tex. R . App. P. 47.7 (pr ovi di ng that opinions d esignated “do not publish” b y cour ts of app eals befor e January 1, 2003 “ have n o pre cedential value b ut may be ci ted with the notation, ‘( not de signa ted for publi ca t ion) ’” ).32 “ pleadings that might suff ice in a case that d oe s not implica te the TCP A ma y not be sufficien t to satisfy the TCPA ’ s ‘ clear and speci fic evidence ’ requirement ” ).
There is no b asis fo r A pp el lants ’ sugge sted infere nce besides t he excerp t of
Trea tman ’ s testimony

. Any inference from T reatma n ’ s testimony that the docume nts were

r evie we d around the tim e that the y were sent to him vanishes gi ven his testimony t hat the
docum ents were not reviewed. See In re Certain Underwriters at Lloy d ’ s London , 294 S.W.3d 891, 907 (Tex. A pp.

— Beaumont 20 09, ori g. proce eding ) ( “ While evide nce that doc umen ts are
sent creates an inference that the doc ume nt s were reviewe d ar ound th at time, that inferenc e vanishes when opposing evidence is introduced to sho w that the docu ment was not reviewed. ” )

.

“ A n inferenc e is no t rational ‘ i f p remised on m ere suspicio n

— s o me suspicion linked to other suspicion produc es on ly m ore suspic ion, which is not the sa me as som e evidence. ’ ” Neurodiagnostic Consultants, Ltd. Liab. Co. v. Villalo bo s , No. 03

- 18

- 00743

- CV, 201 9 Tex. App.
LEXIS 8875, at *13 (Tex. App.

— Aust in Oct. 4, 2 019 , no pet. ) (mem. op.) (quoting Suarez

v
. City of Te xas City , 465 S.W. 3d 623, 634 (Tex. 20 15) ).
A p pellants say t hat c ircums tantial evidenc e supports th e ir suggest ed i nference of
First Buyers ’ ac tual knowle dge of the fiduciary duties owed

. “ Bu t f or ci rcums tantial evidence to establish any mate rial fa ct , including kn owle dg e or intent, there mu st be ‘ a l ogical bridge
between the proffered evidence and t he necessary act. ’ ” Porter

- Garcia v. T ravis L aw Firm,
P. C

. , 564 S.W.3d 75, 8 9 (Tex. App.

— Ho ust on [1s t Dist. ] 2018 , pet. denied ) (quoting IKON Off ice Sol s. , Inc. v. Eife rt , 125 S.W .3d 113, 124 (Te x. App.

— H o uston [14th Di st.] 200 3, pet. denied) ) ; see KPH Co nsol i d a t i o n , Inc. v. Romero , 102 S.W.3d 135, 1 45 (Tex. Ap p.

— H ouston [14th Dis t.] 2003), aff ’ d s ub nom

. Romer o v. KPH Consol., Inc ., 166 S.W.3d 212 (Te x. 20 05) ( “The mate rial fact m ust be reasonabl y inferre d from the know n circumstances.” )

. Here, no33 logica l bridge conn e c ts the proffered evidenc e

— Treat man ’ s testi mony that he did not re ad the
docum ent s

— to t he nece ssary act

— First Buyers ’ knowledge from th e d ocuments of a fidu ciary
d

uty owed to Appella nts

. Thu s , we cannot c o ncl ude that Appellants presented any c lear and specifi c evidence to supp ort a rati onal infere n ce tha t First Buyer s had act ual kn owl edge of a fid uciary r elationship among Schaeffer, General Partner, and Appellants

. 2. Imputed knowle dge
Alte r natively, Appell ants contend that knowledge of a fiduciary r elationship
between Schaeffer, General Partner, a nd Ap pellants is i mp uted to First B uyers b ased on t he
knowl edge of the ir attorneys at L edgewood , who represented First Buyers an d t he Gen eral
Part n er in the 2015 S al e and provided the documents on the CD to Tr eatman

. A p pellants ’ cite d
authorities do no t s upport this prop osi t ion. See , e.g. , Am e rican Flood R s ch

. , Inc. v. Jo nes , 192 S.W.3d 58 1, 584 (Tex. 2006) ( u pho ld ing trial court ’ s im posi tion of s a nctions , althoug h there

wa s “ no direct evidence that t h e emplo yees knew of the [ordered] depositi ons and d eli be rately
failed to a ttend, ” because thei r attorney ’ s knowledge of court order compellin g deposit i ons was imp ute d to them ); Cohen v. H awki ns , No. 1 4

- 07

- 00043

- CV, 20 08 Tex. App. LEXIS 2647, at

* 19

- 20 (Tex. App.

— Houston [1 4th Dist.] Apr. 15, 2008 , pet. den ied ) (mem. op.) ( co ncl u ding
that purch aser of property kn ew that seller did not own it bec ause seller ’ s power o f a t t orney , wh ich both pu rcha ser and h i s attorney revie wed , did not show seller as property owne r ) ; L ehrer
v. Z wernemann , 14 S.W.3d 775, 778 (Tex . A pp.

— Houston [1st Di s t.] 2000 , pet. denie d ) ( conclu d ing that plaintiff was “ on notice ” o f defendant mediator ’ s p ro fessiona l relation sh ip w ith

oppos i ng counsel becau se both plaintiff and his attorney knew before mediation that defendant
had acted as media tor for opposing co uns e l in past )

. N o ne of Appellant s ’ c ited case s stand for34 the proposi t ion that automatica ll y i mp uted know ledge suf fi ces as clear a nd spe cific evid ence to support a plaintiff ’ s claim of knowing participa tion when the defendant lacks a ctu al knowledge

. I mput ed knowledge in the agen cy context is based on a presumption. See Holm es v. Uvalde Nat. Ba nk , 2 22 S.W. 640, 642 (T ex. App.

— S a n Antonio 1920 , writ ref ’ d ) ( noting that doctrine of imputed knowledge rests on presumption conce rning age nt ’ s com municat ion of
knowle dge to principa l )

. A true pr es umption is “ a rule o f law laid down by t he co urts whi ch
attaches to fa cts certa i n procedural conseque nces
. ” Combined Am. Ins. Co. v. Blanton , 353 S.W.2d 847, 849 ( Tex. 1962)

. A presump tion is not evidenc e
. See id. (no ti ng that

“ p resumptio n is not evi dence and is not to be we ighed or treated as evide nce ” ) ; Da v id A.
Schlueter & Jon athan D. Sc hlueter, Texas Rules of Evide n ce Manual , § 301.01 [ 2 ] (10 th ed. 2015)

. M o reover, the imputed

- kn owl edg e doctrine is not automatical ly applie d in a ll

c ircumsta nces a nd has been expressl y r ej ec ted when, a s here , an a ttorney r e presented parties on
both sides of transaction

. See Hazlewood Patterson Co. v. Hancock , No. 10

- 03

- 00274

- C V,
2004 Tex. App. L EXI S 1131 4, at * 8 (Tex. App.

— Waco Dec. 1 5, 2004 , pet. denied) (me m. op. ) ; see also GXG, Inc. v. Te xa cal Oil & G as , 97 7 S.W. 2d 403, 4 1 0 (Tex. App.

— Corpus Christi

– Edinburg 1998, pet. denied) ( concluding tha t where agent represented both purchaser and seller , agent ’s kn owl edge was not “ automatically imputed ” to se ller ). T he necessity of a ctual
knowl edge for a c la im of “aiding and a bettin g” breach of fiduciary duty w as discussed i n a decision involving a suit against a law firm, its owner attorne y , and a second attorney fro m th e

sam e firm

. See First United Penteco stal Chur ch of Beaumont v. Parker , 514 S.W.3d 214 , 225 (Tex. 2 017). T he pla i ntiff al l eged that the owner attorney stole from them and th at the seco nd attorney from the firm “knowingly” pa rtic ipated in that brea ch of f iduci ary duty

. Id. But t he35 Te xas Sup reme Cour t not ed that the r e was no evidence th at th e second attorney w as awa re before h and of the owner at torney ’ s plans or actions and affirm ed summ a ry judgment for the
second attorne y
. I d

. Consistent with t h is au th ority , w e have s tated that “ [a] cause of action p remised

on cont ributi on to a bre ach of a fiduciary duty

. . . mus t involve the knowing p artici pation in
such a breach. ” W ootten , 59 S.W. 3d at 722 ; see Kinzbach , 160 S.W.2d at 514

. Accordingly,

“ i m pu ted kno wledg e is insufficient to find knowing participat ion in a breach of fi duciary dut y. ”
D eY oung v. Beirne, May nard & Parsons, L.L.P. , No. 01

- 13

- 0 0365

- CV, 2014 Tex. App. LEXIS 2965, at *16 (Tex. App.

— Houston [1st Dist.] Mar. 18, 20 14 , no pet. ) (mem. op .) ; a cc ord
R otstain v. Trustmark Nat’l Bank , Civil Actio n No. 3:09

- CV

- 2 3 84

- N, 2022 U.S. Dis t. LE XIS
10332 , at *43 ( N.D. T ex. 2022) ( noting that for cl aims of knowing participation , “ [c] ourts ha ve made clear that a les s culpable mental st ate, such as constr uct i v e knowl edge, will not suffice ” );
Fran kli n D. Azar & Assoc s. , P. C . v. Bryant , No. 4: 17

- cv - 00418

- ALM

- KPJ, 201 9 U.S. Dist.
LE X IS 147393, at * 9 (E.D. T ex. 2019) ( concluding that knowi ng par ticipation claim under
Texas la w requires ac t ual knowledge, not co n s truct ive k nowledge )

. Te xas law do es not sup port the as sertio n that autom atica lly i mput ing
L edg e wood ’ s knowledg e of t he cont en t s of the 2006 Original Partnership Agreement to First Buyers su ffices as clea r and specific evidence to sup port a rat iona l in ference th at Fi rst Buyers
had actual know ledge o f a fiducia ry relations hip among Schaeffer, General Partner, and App ell an ts

. Wi t hout t his e lement , Appel lants could not show a claim of kn owing participation in

a breach of fiduci ary duty a nd the prima facie case fail s. T h us, we need n o t reach App ellant s ’

c ontentio n as t o th e third element of a knowing part icipa tion clai m, wh ether F i rst Buyers were36 aware of the ir alleged participation in Schaeffer ’ s and G eneral Partner ’ s breach of their dut ies

to Appellants

. In sum, b eca use First Buyers m et their b u rd en of show ing t hat Appe llants ’ clai m of knowing participation in a bre ach o f fiduc i a ry du ty ha d the requisi t e connection to the
exercise of the right of association and because Appellant s failed to meet th eir burd en of

e stabl ish in g by clear an d specif i c evid ence a prima facie ca se for e ach element of their knowing participat ion c laim , t h e TC PA requ ired dismissa l of it

. See Former Tex. Civ . Prac. & Rem. Code § 27.005( b), (c)

. W e proceed to cons i der the requi site award s o f att orney ’ s fees and s anctions

.

F. TCPA A ttorney ’ s Fe es A war d to First Buyers
Under t he applicable ve rsion of the TCPA , th e trial cou rt is requ ired to award attorney’s fees to a succ essfu l movant and may award sanct ions to deter th e par ty who brought
the s uit f r om bringing similar a ctio ns. Fo rmer Tex. Civ. Prac

. & Rem. Code § 27.009(a). In support of the attorn eys’ fees r ec ov erable under the TC P A, a n attorney fo r First Buyers filed an
affidavit

. After granting the TCPA motion to dismiss, t he district cou rt si g ned a separate orde r

a war d ing Fi rst Buyers att or ne y’s fees of $50,651.82 and sanctions of $50,203.00

. Reg ar d in g t h e a t t o r n e y ’ s f e e a w a r d , Appellants co mpla in that the district court
“rubb er stampe d” First Buyers ’ fee request , that it “clearly did n ot consider” the iss ues th at Appe ll ants “ident ifi ed” b elow , and that its “failure to apply any substanti v e r ed ucti o n in the light
of serio us issues raised with specificity requires reversal

. ” However, Appellants provi d e no citation to the record to s upp or t these complai nt s a nd no discuss io n about ho w th e ir a lleged
“issues ” with the award of attorney ’s fees a ppl y to t h e evidence tha t First B uyers fi led

.37 The Rules of Appellate Procedure require the appellant ’s brief to present “ clear

a nd concise ar gum ent f or th e content io ns m ade , w ith ap p ropriate c itations to

. . . the record. ” Tex. R. App. P. 38.1(i)

. W he n , as here , a party fa ils to prope rly cite to the record and omits meaningful argument , appell ate courts may co n sider the issue wai ve d due to in ade quate briefing.
See Fredo nia St ate Ba n k v. Gener al Am. L ife I ns. Co ., 881 S.W.2d 279, 28 3

- 85 (Tex. 19 9 4) ; Canto n - Carter v. Baylor Coll. of Med

. , 271 S.W.3d 928, 931 (Tex. App.

— Houston [14th Dist. ] 2008) ( not ing t h at f ailure to “ provide subs tanti ve analysis of t he leg al iss ues presente d results i n waiver of the compl aint ” ); see also Adams v. Adams , No. 0 1

- 1 7

- 00305

- C V , 2018 Tex. App. LEXIS 6675, at *2 (Tex. App.

— Houston [1st Dist.] Aug. 23, 2018 , no pet. ) (mem. op .) ( concluding that party ’ s ch allen ge to suffi cienc y of e videnc e support ing a ward of a ttorney ’ s f ees

w as wa ived due to inadequate briefing )

. We co n cl ude tha t Appell ants ’ fail ure to prope rl y brief
th eir attorney ’s fees iss ue waives th e co mpl aint. See Tex. R

. App. P. 38.1(i)

.

G. TCPA Sanc tions Award to First Buyers Next, A ppellants c o mp lain that the $50 ,203 sanct ions award is “excessive” and
thereb y v i o lates du e process, and that there is “no evidence in the record to suggest that futu re actions would be filed by” them. 10 In their reply b rie f, Appellant s fur the r co mplain that the

sanc t ions a ward was not suppo rted by any finding as t o First Buyers ’ c on te ntion tha t th e aw ard

“ matches the amount o f fees ” and “ reflects the economic impac t of [ App ellan t ] s ’ claims. ”
We app l y an abuse

- of

- discre ti on standard in rev ie w i ng a trial court ’ s aw ar d of

sa nctions under the TC PA

. L andry ’ s , 631 S.W. 3d at 46 ; Low v. H en ry , 221 S

. W.3d 60 9, 612 (Tex. 2007) ; see F ormer Tex. Civ. Prac. & Rem. Cod e § 27.0 09( a)

. “ A trial court abuses it s

10 Appellants acknow l edge t ha t the distri c t court awarded First Buye rs $50,203 i n sanctions , w h i c h i s slight ly les s tha n the $ 50,23 0 that First Buyers requ ested.38 di scr etion by ‘ ac t[ing] w ithout referen ce t o guidi ng rule s and princ ip les to s uch an exten t that i ts

r uling was a rbitrary or unreason a bl e. ’ ” L andry ’ s , 631 S .W. 3d at 46 (quoting Na th v. Tex as Child. ’ s Hosp ., 446 S.W.3d 355, 3 6 1 (Tex. 2014) )

. The ap pli cable version of the TCPA requ ire s an awar d of s anctions aga inst the

pa rt y who b rought an act ion that was d ismissed under the TCPA :
(a) I f t he cou rt o r ders dis missal of a legal action under t his chapter, the court s hall award t o the moving part y:

. . . . ( 2) sanctions against t he pa rty who br o ught t h e legal act ion as the co urt det ermines suffi cie nt to d eter the party w ho brought the le gal a ct ion from bringing simila r actions describe d in this chapter.

Former Te x. Civ. Prac. & Rem. Code § 27.00 9 ( a ) (2) (emphasis added)

. “ [ T ] he statu te does not

spe ci fy a particu lar formula , amount, or guideline for deter minin g the sanctions amount other
th an t o say th at the am ount is to be sufficient to deter the party who brought the legal action from
bri nging similar actions.” Tatum v. Hersh , 559 S .W.3d 581, 587 (T ex. App.

— Dal las 2018, n o pet.) ( op. on remand ). Thus, the T CPA “give s the tria l court b roa d di scretion t o deter mine what

am ount is suffi cient to de ter the party from bringing similar actions in th e future.” Kinney

v. BCG Att ’ y Searc h, In c ., No. 03

- 12

- 0 05 79

- CV, 2014 Tex. App. L EX IS 3998 , at *35 (Tex

. App.

— Aus tin A pr. 11, 2014 , pet

. deni ed) ( mem
. op . on reh ’ g )

. He re, the district court ’ s order stated that Appellants were ordered to pay to First Buyers “sanctions sufficient to dete r [Appella nts] from br i nging similar actions in th e amoun t of $50,203. 00.” A p p e l l a n t s s u g g e s t t h a t f i n d i n g s e xpl ai ning t h i s s a n c t i o n s a w a r d w e r e n e c e s s a r y ,

c o m p l a i n i n g t h a t “ [ t ] h ere are no findings or other indi cations of the trial court’s rationale

. ”39 Ad ditionally , they st ate that our recen t decisi on in Serafi ne v. Blunt , No. 03

- 20

- 00 294

- C V,
2021 Tex. App. LEXIS 93 86 (Tex . App.

— A us t in Nov. 19, 2021 , pet. denied ) (mem. op.), “ is directly on point and contradicts Appellees’ argumen t ” as to the propriety of t he award.
We dis agre e on both count s
. F irs t, w e have recognized tha t the TCPA “ d oes n ot expressly require t he tr ial c ourt to ex p lai n how it reached its determ ination. ” 11 Kinney , 2014 Tex. App. LEXIS 3998, at *3 5

. Second, in Serafine , we concluded that t he s pecifi c findi ngs that the trial court ha d en tered i n that case we re at odds wi th it s sanctions award :

“ Be cau se the trial co ur t fo und that the Blunts wer e no t likely to file further actions that would implicate the TCPA ” and further, “ because it determ ined that a n attor neys ’ fee awar d to Serafine

wou ld have a deterrent e ffect, we con clude that the trial court act ed with out refe re n ce to guiding rules and princi ples by imposing more than a nominal amount of sanctions

. ” Id. at *22

- 23

. Our holding hinged on th ose sp ecific t ria l

- court fi nding s
. Id. at 2 1

- 23 ( p refacing our d eterminations by n oting “ [i]t is evident fr om the trial co ur t ’ s own findings, ” “ [i ]n light of its own findings, ” and

“ [i]n light of the tria l court ’ s own findings ” ). B y c o n t r a s t , this r ecord prese nts no such conflict
betwe en any f indi ngs ent ered and sanct ions award ed

. Thu s, Serafine does not “ con tr adict ” First

11 T he only cir cumstance in whi ch the applicable version o f the TCPA requires tria l

- c ourt findings is whe n the par t y mov i ng f or dismiss a l requests t hem

. See Tex. Civ. Pra c. & Rem. Code § 27.007(a) ( requir ing certain fin dings “[a]t the request of a party makin g a motion [to dismiss] und er Section 27.003”). If th at re q uest is made, the tr i al court “shall issu e finding s rega r ding whether t h e legal acti on was brought to deter or prevent the moving party from exercising cons titut ional rights and is brou ght for an improper pu rpose, including to harass or to cause unne cessa r y delay or to incr ea s e the cost of litiga tion.” I d

. ; se e Gre er v. Abra h am , 489 S.W. 3d 440, 443 n. 3 (Tex. 2 016) (noting that “[t]his fi nding is the only one expr essly required by the TC PA if reque sted by the party seeking d ismissal” and that “[t]he A ct do e s not otherwise ex pr e ssly address finding s of fact and c o nclu sions of l a w, but neith er does it for bid them” ) (citing Tex. Civ. Prac. & Rem. C ode § 27.007(a) ). H ere, First Buyers , as mo vants seeki ng dismi ssal under the TCPA , did not request entry of su ch f indings.40 Bu y ers ’ argument that th is sancti on s award “matches the amount of fe es” and “reflects the economic impact of [Appellant]s’ cl aims.”
O u r s i s t e r c o u r t c o n s i d e r e d the p ropri ety of the amo unt of a TCPA sanctions

awa rd by using the amount o f a tt orney ’ s fees aw ar d e d in that case as a g uide : “ [W ] e rely on two

c ase - specifi c guideposts that are objectively q uan tifiable: we know the amoun t of the [defe ndants] ’ re asonable attorn eys’ fees, c osts, a nd ex penses, a nd we know th at th e number of
si mila r ac ti ons [pla inti ff] h a s filed is zero.” Landry ’s, In c. v. Animal Legal Def. Fun d , 566 S.W.3d 41, 73 (Tex. App.

— Houst on [14th Dist.] 2018) , aff’d in part, rev’ d in pa r t o n other grounds , 631 S.W.3d 40 ( Tex. 202 1)

. Ultima tely, t he cour t c onclu d ed t hat the amount of the

sa nct io ns award should n o t have excee ded the amount of t he attorney ’ s fees aw ard :
[W] e do not review the award de novo. Because we review the s anc tions aw ard only for a buse of discretion , it is not for thi s court to det e rmine anew what an appropriate sanct ion w ould be. We ho ld o nly that, on this record , the trial court lacked discretion to award an amount that is larger than the only monetary gu ide post in evidence.

Id

. The court then sugge st ed “ re mittitu r t o redu ce th e sanctions to an amount equal to th e

a tt orneys ’ f ees aw ar d e d

. ” Id. at 73

- 74

. Simi larly, t he di strict cou rt could have reasonably d ete rm ined that the $ 50 , 2 03.00
award of TCPA san ctions to F irst Buyers

— wh ich is less than but n early equ al to t he award of
TC PA attorney ’ s fe es

— wa s both within the pe rmissi ble ratio refer en ced in Landry ’ s and was

“ su ffici ent to deter [Appellants] from br ing in g similar ac tions. ” See id. a t 73

. Addition ally,

w hen entering this order th e district co urt c ould have co nside red the h istory of th e litigation since
the suit ’ s fili ng more than a year earlier , incl udi ng its pr ior o rders d i s missing Appell an ts ’
TUFTA claims a n d knowing participation claims against First Buyer s for lack of merit , as well41 as Appellants ’ u nsucces sf ul requ est t hat the dis t rict court instead sanction First Buyers for filing

a mot ion to di smiss that wa s “ fr i volou s ” and “ filed solely for undue delay ” under subsection 27.009(b) of the TCPA

. See Strom berger v. Turl ey Law Firm , 31 5 S.W.3d 921, 92 4 (Tex

. App.

— Dal las 2 010, no pet. ) ( considering party’s conduct dur ing litigation when awardin g

s an ctions ). On this r ecord , A ppellants have not demonstrate d t hat in award ing TCPA sanction s of $50,203 .00 to Firs t Buyers , t he distr ict c ou rt acted “ without r efe renc e to guid ing r ules and pri nciples ” such that its ruling was “ arbitrary or unreasonab le

. ” See Landry’s , 6 31 S.W.3d at 46

. T h us , no abuse of t he distr ic t court ’ s discretion is shown

. After revi ew ing App ellants ’ issue s conce rning th e TCPA

- related o rders i n favor
of First Buyers , w e con clude that :

• Appella n t s ’ claim of knowing participation in a breach of fid uciary du ty is subject to th e T CPA ;

• A p p e llants did not present c lear an d speci fic evidenc e establi s hing a prima fac ie case

for each essential e lement o f their kn owin g - partic ipati on claim ;

• A ppellan ts ’ is sue chall enging the award of attorney ’ s f ees is waiv e d ; an d

• Ap pellants did not sh ow that th e sanctio ns award was an abuse of the distri ct

cou rt ’ s disc ret ion.

Acco rdingly, we ov err ule Appel lants ’ fifth , sixth, an d sev enth is s ues.

III. Cross

- Motions for Summar y Jud g me n t The last set of issues in this appeal c oncern ch all enges to the order on the p a rties ’

cross - motions for summary judgment and the o bjection s to certain s ummary - judgment evidence

. As m entione d, t he distr ict c ourt gr anted Appellees ’ motions, deni ed App el lants ’ motions, a nd
overruled all of the ev id entiary ob jections

. Appellants conten d t hat the distri ct court erred by :42 (1) dismissing “sua spo nte” some of t heir c laims against General Par tner , S ubsidiary Ge neral Partner, and Schaeffer (GP Appellees) ; (2) o ver r uling their objections to certain

summa ry - judgmen t e vid ence; (3) g rant ing GP Ap pe l lees ’ s ummary judgme nt on Appe llants ’
breach

- of

- cont ract claim ; (4) gr anting First Buyers ’ summary ju dgment on Appellant s’
de claratory

- judgment cl aim ; and (5) granting Secon d Buyers ’ summary judgment on Appellants ’ quiet

- ti tle claim

. W e address these c on t entions in tur n.

A. D ismiss al “Sua Sponte” of C la im s Again st GP Appell ee s As an initial matter, A pp el lants co mpla in tha t the district court “ s ua sp o nte ”
dismiss ed c e r t a i n claims t hat were un addressed in the sum m a ry - judg ment motion filed b y GP
A ppellees ( General Partner, Subsidiary General Partner, and Schaeff er )

. Appellan ts complain

t hat the order gran ted sum mary judgment as t o all claims against GP Appellees despite the

summary - judgmen t motion ’ s lack of refer en ce to Ap pe ll ants ’ cl ai m s for b reach of f iduc iary d uty , f raud by no ndisclosure , a cc ounting , a nd one breach

- of

- cont ract theory

. In that way, Appe llants
contend that the o r der granted g re ater r elief than the summary - judgm e nt motion reques ted a n d

t h a t t h o s e u naddress ed c l a i m s s h o u l d b e r emanded

. W e agree. Summary judgments may only be granted on grou nds expressly a sserted in the

summary - judgmen t motio n. Tex. R. Civ . P. 166a(c) ( “ The motion for summary judgment s hall state the specific groun ds therefor. ” )

. “A t rial court cannot grant summary judgment on grounds that were not presented.” Nall v. Plun kett , 404 S.W. 3d 552, 555 (Tex. 2013). “ Gran ting a summary judgmen t on a claim not addressed in the summary judgme nt motion therefore is, as a general rule, reversi ble e rror. ” Id. (quoting G & H Towing Co. v. Magee , 347 S.W.3d 293, 297 (Tex. 2011) ).43 Here, A ppella n ts ’ live pleading, their T hird A mended P etition, allege s cla ims against GP A pp elle es for br eac h of co ntract , b rea ch of fiduciary duty, fraud by nondisc losure and accounting

. See Tex. Bus. Orgs. Code § 152.211 (a)

- (b) (allowing part ner to m ain tain action fo r breach of partne rship agreeme nt or v iolation of duty to pa rtner ship and pr oviding for
enforcement o f cert ai n rights by “legal or equitable re lief, in cluding an accounting of partnership business”). Appellants also pleaded two breach

- of

- con tract theories : the first based on the allege d neces sity of an Indepe ndent Manager’s consent to the sale of the Pro perties and the second based on the allege d sale o f the Properties below market value that was not in the best interest of the Origina l Pa rtn ership. GP Ap pellees move d for summary judgm ent on one basis:
the br each

- of

- contract theory con cerning the alleged ne cessity o f an I ndependent M anager.

Accordin gly, we sustain th e portion of Appellants ’ first issue challenging t he summary judgment gr a nted in favo r of GP Appellees on Appellants’ claims for breach of
fiduc iary duty, fraud by nondisclosure, accountin g, and the second breach

- of

- contract theor y alleg i ng that the sale of the Properties was below market value and was not in the best interest of the Origina l Partnership

. We proceed to c onsider only the br each

- of

- co nt ract claim concerning the alleged neces sity of an Independent Manage r that was ex pressl y addresse d i n GP Appellees ’

summary - judgment motion and in Appellants ’ “ Second Amended Moti o n for Partial Summary Jud g ment

. ”
B. Breach

- of

- C o ntract C la im A gai nst G P Ap pe lle es In their cros s - motions for summar y judgment , the parties dispute whether GP Appelle es breached certain sections of the 2006 Original Partnership Agreemen t r equi ring the

cons e nt of an Indep endent Manager for the sa le of the Pro pert ies and conside ratio n of the partnership ’ s interests

. Appe llants contend that the 2015 Sale to First Buyers was void because44 GP Appellees lacked authority to sell the Properties without the prior wr i tten consent o f an Independent Manager

. We review grants o f summary j udgme nt de novo. Lightni ng Oil Co. v. Anada rko E&P Onshore, LLC , 520 S.W.3d 39, 45 (T ex. 20 1 7 )

. If a trial court does not specify the grounds
it relied u p on in making its determinati o n, r e v i e w i n g c o u r t s must affir m su mmar y judgm ent if

a ny of t he grounds asser ted are meritorious. Id. On cross

- mot ions for summary judgment, each party bear s th e b u rden of establishing its entitle ment t o judgment as a matter of law. Miles

v. Tex as Cent. R.R. & Infrast ructure, Inc ., 647 S.W.3d 61 3 , 619 ( Te x. 2022)

. When , as here , the trial court g rants one motion and denies the other, we “ det er m i ne a ll quest ions presented ” and

“ render the judgm ent that the trial court should have rendered. ” Id. (quoting City of Ga rlan d

v. Dall as Morning News , 22 S.W.3d 35 1, 356 (Tex. 2000) )

. A plaintiff assert ing a breach

- of

- contract claim must prove that : ( 1 ) a valid

c o ntract exists; (2) the plaintiff performed or tendered performance as the contract required; (3) th e defendan t br each ed the contract by fai ling to perf orm or tender perform ance as the

contract r equired; and (4) the plaintiff sustained damag es a s a result o f the b reach. USAA Tex. Lloyds Co. v. Menchaca , 545 S.W.3d 479, 502 (Tex. 2018). The breach eleme n t is the focu s of
these parties ’ summary - judgment m otions.
1. Parties ’ G rou nds f or S ummary J udg me nt GP Appellees moved for summary judgment o n m ultiple g rou nds , including that
there was no breach because consent of an Independent M anager w as no t required u nder the

term s of the 20 06 Original Partnership Agr eement . Specifically , G P Appellees contend that
under subsection 9(c)(v) of the 2006 Or ig i na l Partnershi p Agreement , consent of an I ndependent
M anag er for a sale of the Properties was required only “ [s]o long as a n y O blig a t ion i s45 outstanding.” G P Appelle es argue that such co nsent was not necessar y or appropriate becau se the outstanding loan ob li gation was b eing repaid in full by the s ale of the Properties , thereby having no impact on the rights of the len der. Appell ant s moved for su mm ary judgment allegi ng that GP Appellees breached subsection 9(c)(iii) of the 2006 Original Partnership Agre em ent requiring a n Independent Manager’s consent for the sale of the Properties and section 11 of the 2006 Original Partnership Ag reement req uiring that, “so long as an y obligation remains outstanding,” the General Partner

must consider the Original P artne rs h ip ’ s interests when acting or voting on a matter requiring the General Partner’s approval

. We turn to the provisio ns of the 2006 Origina l Partnership Agreement tha t the se

s ummary -judgm ent m otions invoked.
2. I ndependent

- Manager Provisions
The gener al partne r is vest ed with broad powers in the 2006 Original Partnership Agreement —una ltered in t he amend ed 2009 Original Partnershi p A greement

— as set forth in
sub section s 9 (a) and (b):

Section 9. Management and Con tro l. (a) Except as provided herein, the manag e ment of the Par tner ship shall be vested exclusively in the General Partner. Except as provided herein, the Limited Pa rtner shal l have n o p art i n the operation or man agement of the Partnership an d shall have no a uthority or r ight to act on behalf of or to bind t he Partne rshi p in connection with any matter. (b) Subject to Section 9(c) of this Agreement, the General Partner an d the Offi cers sha ll have the exclusive right, power and authority on be half of and in the nam e of the Part nership to carry out any and al l acts necessar y, convenient or incidental to or for the fur therance of the purposes described herein, including with out limitat ion, all po wers, statutory or otherwise, possessed by officers of a limited partners hip and a gen eral partner of a limited pa rt n ership formed u nder the laws46 o f the State of Texas. The Limited Partner agrees that all determinations, decisions an d actions made or t ake n by the General Partner an d the Officers shall be concl usive and absolutely binding u pon the Partnership, the Lim it e d Part ner and i ts s uccessors an d assigns.

The next subsection of the 2006 Original Partnership Agreement , 9( c), se ts forth

c ertain limi tatio ns on the partnership ’ s activities that are di recte d at qual ify ing t he Original Partnership as a “ special pur pos e enti ty .” Spe cial

- purpose entities are used to protect lenders by isolating financial assets from the potential ban krupt cy estate of the borrower. See Basic C ap.
M gmt ., Inc. v. Dynex Com. , Inc ., 348 S.W.3d 894, 896 n.4 (Tex. 2011) (citing In re Gen. Gr o wth
Pr ops., Inc ., 409 B.R. 43, 49 n. 15 (Bankr. S.D.N.Y. 2009) ) ; see also In re Pac ific Lumber Co ., 584 F.3d 229, 250 (5th Cir. 2009) (“Spe cial purpose entities are o ften us ed in securitized lend ing because they are bankruptcy- remote, that is, they decrease th e like lihoo d that the originator’s financial trouble will affect the special purpose entity’s assets serving as c o llate ral f or the

note s.”)

. Consistent with it s specia l-purpose- entity d esig n, subsection 9(c)(iii) contains “Independent Manag e r” provisions as par t of the Original Partnership ’ s management structure and requir es an Independent Manager’s approval for “ Ma t erial Acti on [s] ”:

(c) Li mitatio ns on the Partnership’ s Activities

. (i) This Se ction 9(c ) is being adopted in order to comply with cert ain provisions requir ed in order to qualify the Partnership as a “ special purpose” entity. [ 12 ]

12 A “ special purpose entity ” i s defined in Sch e du le A, a ttach e d to the 2006 Original Par tnership Agreement:
“S peci al Purpose Entity ” means a Pers on (o ther than a natural pers on) whose o rgan izational documents con tain restric tions on its pu rpo se and activities and impose requirements to preserve its s e parateness tha t are substantially similar to t he Special Purp ose Pro visions of this Agreement or Ge neral Partner Agr eement, as applicable.47 . . . . (iii) Notwithstanding any ot he r provision of this A gr eement a nd any provision of la w that otherwise so empo wers the Partners hip, t he General Partner, the Office rs or any o th e r Pers on, neither the Partnership nor the General Partner nor any Officer nor any other Person shall be author iz ed or empo wered, nor sh all they permit the Compa ny, w ithout the prior wr itten consent of the G eneral Partner (which consent shall, purs uant t o the Genera l Partner Agreement, require the prior unanimous written consent of the Members (as such term is defi ne d in the General Part ne r Agreem ent), Manager and the Independent Manager of t he General Partne r) to take any Material Action; prov ided howeve r, that p urs uant to the General Partner Agreement, the General Partner may not authorize the taking of any Materi al Action, u nless there i s at lea st one Independen t Man ager serving in suc h cap acity. [ 13 ]

13 An “Independent Manager” is defined in S chedule A :

“ Ind ependent Manager ” means a natural person who, for the fi ve- year period p rior to his or her appointm ent as Independent Ma n ager of the General Partner has not been, and during the conti nu ation of hi s or her service as Indepen dent Manager is not and will not be: (i) an employee, director, attorney, counsel, truste e , member, stockholder, partner or officer of t he Partnership, Ge nera l Partner or any of either of th eir A ffiliates ( other than h is or her s e rvice as an Independent Manager of the General Partner ); (i i) a creditor, customer or supplier of the Partner ship, t he General Part ner or either of their Affi liat es; (iii) any m em b er o f the immediate family of a pers on described in (i) or (ii ); or (iv) a P erson Controlling or under common Control with any Person excluded from serving as Independent Manager under (i) or (ii). A natural person who satisfies the fore going definitio n o ther than subparagraph (ii) shall no t be disqualifie d from ser vi ng as an In d ependent Manager of the General Partne r if such indivi dual is an Independent Manager provided by a nationally

- recog n ized company that provides professional In depe ndent Managers (a “Pro fessional Independent Manager”) and o ther corpor ate servic es in the ord i nary course of its business. A natura l person who oth erwis e satisfies the foregoing definition other than su bparag r aph (i) by reas on of being an independent dire ctor of a Speci al Purp ose Entity affiliated with the G enera l Partner or the Part ne rship shall not be disqualified from s erving as an Independent Man ager of the General Partner if such individual is eithe r (i) a Professional I ndependent Manager or (ii) the fees that such in d ivid ual earns from serving as independent director o f Affiliat e of the Gener al Partner constitute in t he aggregate less than five perce nt (5%) of such individual’s annual income.48 A “Material Action , ” for which an Independent Manager ’ s consent is required, is
defined in the 2006 Original Partnership Agreement as including the sale of “all or s ubstantially
all of the assets of the Company [ Ori ginal Partnership ].” 14 Addi tionally, sub s ection 9(c) (v)(A)

o f the 2006 Original Partnership Agr ee m ent sta t es that if ther e is an outstanding “O bligation ,” the general partner shall not allow the partnership to sell its assets:
(v) So long as any Obligation is outstanding , the Gene ral Partner shall not cau s e or permit the Partnership to: (A) sell , assi gn, pledge , encumb er or otherwise transfer or di spose of all or any portion of its assets (including, without limitation, t he Property ) without the prior written consent of Lender (e xcept pursuant to the Basic Do cuments); any attempt to transfer or encumbe r any asse ts owned by the Partnership to the ext ent not expressly permitted hereunder shall be void and of no force or ef

fe ct, to the fullest extent permitted by law [.]

(Empha sis a dded.) “Oblig ations, ” in turn, are de fined in the 2006 Original Partnersh ip Agr eeme nt to include “ the inde bte dness, l iabilities and obligat ions of the Partnership under or in

connect ion with this Agreement .” Finally, s ection 11 of t he 2006 Original Part nersh ip Agreement states that the

g eneral partn er will “ cause the G eneral Partne r ag reement to provide that

. . . the G eneral P artner

14 “M ateria l Action ” means t o co nsolidat e or merge the Partner ship with o r i n to any Person, or sell all or substa ntial ly a ll of the assets o f the Company, or to institu te proceed ings to have the Partnership be adjudicated bankrupt or insolvent, or consent to th e inst i tution of bank ru ptcy or inso lvency proceedi ngs aga inst the Pa rtn e rship or f il e a petition seeking, or cons ent to, reorganization or relief with respect to the Partner ship under any applicable fed eral or state law relating to bankruptcy, or consent to the a ppointment of a rece iver, li quidator, assig nee, tr

ustee, sequest r ator (or other similar official) of the P artn ership or a substa ntial part of its property, or make an y assignment for the benefit of c reditors of the Partnership, or admit in writing t he Par t nership ’ s inabi l ity to pay its debts genera lly as they become due , or take action in furtherance of a ny su ch a ction, or, to the fullest ext ent permitted by law, disso lve or liq uidate the Partners hip.49 shall at times have at least one (1) Independent M anager. ” (Em phas is adde d .) A t the time the Proper ties we re sol d in 201 5, th ere was not an app ointed In dependent Manager

. But i f an Independent Ma n age r ha d been appointed at th at time , and if “ any Obligation remain [ed] outstanding,” section 11 would hav e required the I ndependen t M anager to “consid er only the
i nteres t of the Part n ership . . . in acting or otherwise voting on” a Material Action, s uch a s t he

s ale of the Properties :

Section 11. General Partner: Independent Managers

. So long as any Obliga tio n rem ains outst anding , the Part ne rship shall have onl y one General Partne r whi ch, to the fullest extent permitted by law, shall consider only the i nte rest s of the Partnership , including, if the Partnership is insolvent, the Partnership ’ s creditors , in a cti n g or otherwise voting on t he m at ter for which its ap proval is required h ereunder

. The General Partner hereby agrees, to the fullest extent permit te d by law, to cause the General Partner Agreement t o provide that (i) any Independent Manager may not be rem oved until a su ccessor Ind e penden t Manager shall have (A) accepted his or her appointment as an Independ ent Manager by a written instrument, and (B ) e xecuted a counterpart to the General Partner Agre ement as required thereby, (ii) to the fullest extent per m itte d by law, including S e ctio n 18- 1101(c) of the De laware Limited Liabi lity Company Act, the Independe nt Managers sha ll consider only the interes t o f th e Pa rtnership, including its respective creditors, in acting or otherwise voting on the matter referre d in Section 9( c)(iii) of t he G en eral Partner Agreeme nt, and (iii) the Ge neral Partner shall at times ha ve at least one (1) Independent Manager.

(Emphas is a dded.)
3. Independent Manager Not R equired for S ale T hat S atisfied Original Partnership ’ s O utstandin g O bligation Considering the se prov isi ons collect ively and assuming, as Ap pellants do , that th e Ind e pendent Manager provis ion carried forwar d a ft e r Or igin al Partnership ’ s 2009 reorganization , we conclude that an In dependen t Manager ’ s consent would have been un necessa ry for the 2015 sale of the Properties

. T he Independent Ma nage r provision— expressly incl uded as part of the50 partne rship ’ s special

- p ur p ose - enti ty desi gn in section 9 (c) of the 2006 Original Partnership Agreeme nt

— sought to prevent actio ns enc u mbe r ing the colla teral for the outstanding l o a n
. See,

e.g. , J. Bradley Boeri cke , et. al., Inde pendent Manager Provisions Ineffective to P re c lude
Ban kruptcy Filing by Supposedly “ Bankruptcy

- Remot e ” Ent it ies , 64 Cons umer Fin. L.Q. Rep. 45, 46 (2010) ( noti n g that objective o f independent

- manager requi rements “ is to reduce the

po ssibi lity that creditor s or investors who have extended credit to th e SPE [sp ecial purpose
entit y] will be caught up in a b ankruptc y, which wou ld preclud e the timely enforcement of th e ir

rem edies again st the SPE or its assets, a nd to insulate the SPE from the r isk of having its assets

‘ substantively consolidated ’ with th os e of an i nsolvent affiliate ” ). U p o n repayment of t he loan , the propert y owner ha d authority to dispose of the prop e rty wi thout an In dependent Manager

. The GP Appellees’ summary

- judgment moti on noted that th e 2009 reorganization “placed the lender [RAIT] in con trol of both the general partner and the limited partner of the entity which held record title to the prop ert ies” and conten ded that “once the loan was repaid, the owner of the prop erty had absolute aut hority to dispose of the property as it saw fit.” GP Appellees ’ motion quoted Reyle ’ s dep osition testimony explain ing that subsection 9( c )(v ) and
section 11 we re ope r ative only “ so long as any obligation remain [ed] out standing ” :

Q. And a s in section 9(c )(v) that we already looked at, the req uirements o f
se ction 11 only operate, quote, so long as any obligatio n remain s outstandin g , corr ec t ?
A. That ’ s the lead

- in phr ase of the paragraph, yes. Q.· All ri ght.· And why is that the lead

- in p h rase of the par agraph [?]
A. As I explained earlier, so that

— you kno w, take a step back. Our

— a lender ’ s requirements are ext remel y onerous.· They ’ re o n erous to comply with f rom an operational perspective.· They ’ re expe nsive, Independent Managers, h ave t o basically you ’ d be

— be hired from a third

— third

- party agency beca use they have51 to be unaffiliated with everyone associate d with the transaction

. They ’ r e not things that borro wer s ty pically wou ld do on their own, or, in my experience, ever do on thei r own
. · They don ’ t wa nt to be a single

- purpose entity.· They don ’ t want to have a portfolio that they ’ re amassing and have 200 en tities t hat they hav e to ma na g e because their lender s a re r equiring th em to have a different enti ty own the property every sing le ti m e.· The lenders require it, and that ’ s the deal, so th ey have to do i t.

. . . . Q.· Again, tell the jury why the existenc e of an Independent Manager

— i s it tied to a loan bei ng outs tanding?
A .· It is, yes. Q.· Well, w hy?
A.· Why?· To

— to pr otect t he cr editors of the ul timate borrower, which is controlled through the

— t he general partner, from the various equity members doing things that are adv erse to t h e interests of the cre dit ors. · You know, most

— most prominently, it ’ s filing bankruptcy. Q .· And if a loan isn ’ t outsta nding, this agreement no longer require s an Indepe nde nt Manager, correct?
A.· Correct, and there would be no need for one. Q .· Becau se there would be no lend er to pr otect if no loan was outstanding.
A.· Correct.

. . . . Q.· In yo ur ex perience, if a lo an is being repaid in full, does the Independent M anag er have any ability or authority to block a sale oth erwise a uthorized by general p a r tne r?
A. No, it doe s n ot. Q.· What wa s the final sale price for the two apartment complexes i n 201 5, Mr. Reyle?
A. · 18,786,000. Q.· What was the outstanding loan b alan ce?52 A.· 18,786,000.25

.
(Emp hasis added.) Thus, under the express ter ms of sub se c tion 9(c) and sect ion 1 1 o f the 2006 Original Partnership Agreem ent , because the Original Partn ershi p ’ s outstanding loan obli gation was being full y rep a id with the s ale of the Properties, the General Partner was not limited to considering only the interes ts of t h e Partnersh ip in ac ting on tha t sale , an Independent Mana ger

wo uld have been unable to b lock that action by the G eneral P ar tner , and a n I ndependent Manager ’ s cons ent to the sale would have been un n ecessary
. 15 On this record, GP Appellees have conclusiv e l y disproved Appel lan ts ’ allegat ions
that GP Appellees brea ched subsection 9(c)(iii) of th e 200 6 Original Part nership Agreement requiring an Independent Manager ’s c onsent for the sale of the Properties and section 11 of the 2006 Original Partnership Agree me n t requiring that , “ so long as any obligation remains

outs tanding,” the General Partner m ust c onsider the Ori ginal Partnership’s interests when acting
or votin g on a matter requiring the General Partner’s approval

. F or this reason, w e conclude that
the di s tric t court did not err by den yin g Appellants ’ summary - ju dgment motion and gr anting GP
A ppell ees ’ summary - ju dgment motion on Appellants ’ first breach

- of

- contr act theory

. Thus, we

15 Additionally, an Independent Manager’s consen t woul d have been unne c essary for the 2015 sale of the Properties be cau s e that transaction was made with the “pri or written consent of Lender,” th ereby complying with subsec tion 9(c)(v)(A) of the 2006 O rigi nal Partnership Agreement. As quoted above, this provis i on states that “ [s]o long as any Obligation is outstanding, t he G eneral Partner shall not cause or pe rmit the Partnership to: se ll, assign, pledge, encumber or otherw ise transfer or dispose of al l or any portion of its assets (including, without lim itatio n , the Property) without the prior written c o nsent of Lender.” H e re, the lender RAIT, acting through the G eneral Partner, signed the agreem ent to sell the Properties and signed the s pecial w arran ty d eeds for the Properties to the First Buyers. Thus , the 2 015 Sale was va l id because of RAIT’s “prior written consent” to i t.53 overrule th e portion of Appellants’ first issue challenging the summary judgment as to the ir
br each

- of

- con tract claim concerning the alleged necessity of an Indepen dent Manager

. 16

C. Declaratory

- Ju dgment Claim Ag ainst First Buyers and Q uiet

- Title C l aim Against Second Buyers Finally, o ur conclus i on t h at GP Appellees ’ sale of the Pro perties t o Firs t B uyers in
20 15 was not void necessarily resolves the remaining appella te is sues , wh i ch chall eng e the

summ ary judgments as to Appellan ts ’ d e clara tory

- judgment claim a gainst First Buyers 17 and Appel lants ’ qu ie t

- title claim against Second Buyers

. 18 O n this r eco rd, Appella nts were not
entitled , as a matter of law, to their reques ted d eclar ati ons against First Buyers as to the “ void ”
sale of the P r opert ies in 2015. 19 Nor were A ppellants entitled , as a matter of l a w , to clear the

16 Appellants ’ f o urt h i ssue cont e nd s that the district cour t abused it s discre tion by ad mitting e vid en ce of an unsign ed, unaut hent icated operating agreem ent a nd accept i ng t estimony f rom a corporate repr e sentative who lac ked person al knowledge of that operating ag ree m ent

. We need not rea ch th is issue as we have no t considere d the alleged wrongly admit ted evidence in upholding the dis trict court ’ s summary judgment on Appellants ’ bre ach

- of

contract claim a g ainst GP Appellees concerni ng the need for an Independent Manager

. See Tex. R. App

. P. 47 .1.

17 W hen First Buy ers moved f or s ummary ju dgm ent as to A p p e ll ant s ’ declaratory

judgme nt cl aim, it was the o nl y r emaining claim aga i nst the m. As di s cu ssed , the d i strict court gr anted First Buyers ’ plea to the juri sdi ctio n d i smi ssing App ellants’ T U FTA c laim s and later grante d First Buy ers ’ am ended partial m oti o n t o dismiss under the TCPA as to A pp ellants ’

“ know ing participat ion / ai ding and abe tting breach of fiduc ia r y duty ” claim

.
18 This wa s Appellants ’ o nly c laim against Se c ond Buyers

.
19 Appella nts r equested declara tions stat ing th a t :
1. (A) in order to autho r ize the sale of the Pro pertie s to the HVC Defen dants, an Independent Manag er was r equired to approve the s ale of the Prop erties beca u se such action was a “material act i on” pursuant to §9(c)(i ii) o f the TAO Agreement; ( B) absent s uc h approval, TAO and GP D e fendant were without au thorit y to ent er into th e APS, Loan Assumption, and any att endant agreements relat e d thereto; and (C) absent s uch54 cloud from their p urport ed title by hav ing S ec ond Buyers ’ special warrant y deed to the Properties “ decla red v oid and removed f rom the title records , ” as requested in t he ir q uiet

- title
claim against Second Buyers

. Thus, we overrule Appell an t s ’ second and third issues ch all enging
th e summ ary judgments o n those claims granted in favor of First Buyers and Secon d Buy ers
.

C ON CL U SION
W e affirm in part the distric t c ourt ’ s M ay 4 , 2021 f ina l jud gment as to these
subsumed orders :
(1) t he Febr ua r y 12, 2019 “ Order S ustaining D efendants HVC Eng l ish, L LC ’ s and HVC L afayette, LLC ’ s Plea to the Jurisdiction ” ; (2) the June 24, 2 019 “ O rde r Granting Defe ndants HVC English, LLC’s and HVC L afaye t te, LLC’s Amended Partial Motio n to Dismiss Pursuant to Chapte r 2 7 of the Tex as Ci vil Practice and Remedies C ode ” ; (3) the Ju ly 31, 2019 “ Subsequent Order on Attor ney ’ s Fees , Costs , Other Expens es an d Sanctions Awarded to Defendants HVC English, LLC and H VC Lafay ette, LLC Pursuant to Chapt er 27 of the Texas Civil Practi ce and Remedies Code ”; and

authority, the APL, Loan As sum p tion, and any attendant docu ments related thereto are void, a nd /o r void ab initio.
2. (A) the Partnership and GP Defend ant w ere obligated not to authorize, empower, or perm it a “material action” a bsent the appro val of an I n dependent Manager pursuant to § 9(c ) (iii) and §9(c)(v); (B) that the sale of the Prope rties was a “ ma terial action” pursuan t to §9(c)(iii) of the T AO Agr eemen t r equiring t he approval of an Independe nt Manag er; (C) absent such app r oval the Partne rship and G P Defendant were without authori ty t o enter into the APS, L oan A ssumption, and any att endant agr e em en ts rel ated thereto pur s uant to §9(c)(v)(A); an d (D) absen t s uch author ity, the APL, Loan Assumpti on, and any attendant documents related thereto are void a n d/or void ab initio.
3. [N] o au th ori t y existed to enter into the APS, Loan Assumption, and any at t endant agreements rel ated t hereto, including any attempt s to pass tit le from TAO to the HVC Defendant s, are v oid, void ab initio, in c apable of ratification, an d of no legal effect.55 (4) the portion of the December 16, 2020 Order denying “Plaintiff’s Second Amended Motion for Partial Summary Judgment”; granting “HVC Defendants’ [HVC English, LLC and HVC Lafayette, LLC’s] . . . Cross

- Motion for Summary Judgment”; granting the “Motion for Summary Judgment of Defendants Austin Lafayette Landing Realty LLC and Austin CMA English Aire Realty LLC”; and granting “Defendants Lafayette English Apartments, LP, Lafayette English GP, LLC and Scott Schaeffer’s Motion for Summary Judgment” on Appellants’ breach

- of

- contract claim al leging the necessity of an Independent Manager.

We reverse in part the dist ric t cou rt’s May 4, 2021 final judgment as to the Dece mber 1 6, 2020
Order gra nting “Defendants Lafayette English Apartments, LP, Lafayette English GP, LLC, and
Scott Schaeffer’s M otion for Summary Judgment” on Appellants’ claims for : (1) breach of
fiduciar y duty ; (2) frau d by nondis closure, (3) accounting ; an d (4) breach

- of

- contract alleg i n g th at the sale of the Propert ies was below market valu e and was not in t he best interest of the Original Partnership , and we remand th o se claims to the district court fo r furth er procee di ngs consi st ent wit h this opinion.

_ ___ _

_

_

____ _____________________ _

_

___ _____ Gise la D. Triana , Justice
Be f ore Jus tices Go odwin, Ba ker, and Trian a Affi rme d in Part and Reversed and R e manded in Part
Filed: Septemb er 30 , 2022