AFFIRMED and Opinion Filed December 21, 2018 

# S

In The 

## Court of Appeals Fifth District of Texas at Dallas
No. 05-17-01261-CV SITINA ABDU, Appellant V. MESAY HAILU AND ELYAS GEBR ESILASSIE, Appellees On Appeal from the 429th Judicial District Court Collin County, Texas Trial Court Cause No. 429-55610-2016



### MEMORANDUM OPINION Before Justices Francis, Evans, and Schenck Opinion by Justice Francis Sitina Abdu appeals the trial court’s orders dismissing without prejudice her fraudulent lien claim against her ex-husband Mesay Hailu and Elyas Gebresilassi e. In four issues, Abdu challenges the trial court’s ruling that she lacked standing to bring the suit. For the reasons set out below, we affirm. In February 2015, Abdu sued Hailu for divorce after Hailu went to Ethiopia and did not return. During the divorce proc eedings, Abdu learned that the month before Hailu left, he sold the sole asset of a corporation (Mockingbird Skillman Mobil, Inc., “MSM”) in which he and Abdu were 50-50 shareholders. The ass et was land with a gas station on Mockingbird L ane in Dallas. Proceeds from the sale were used to pay off the first lien on t he property and a portion of an alleged–2– loan made by Gebresilassie to the corporation. 1 Gebresilassie asserts that, over a period of years, he made cash loans to MSM in the amount of $2 58,500, and the lo ans were ultimately reduced to a promissory note that was secured by a deed of trust executed in his favor against the corporate property. The proceeds of the s ale did not cover the entire am ount of the loan, and Gebresilassie agreed to release his lien in exchange for a partial payment of $150,141.93 so the sale could be completed. As part of her divorce action, A bdu sued Hailu and Gebresilassi e for a fraudulent lien under chapter 12 of the Texas Civil Practice and Remedies Code, alleg ing the sale of the property was an attempt to deplete the community estate. She alleged MSM wa s a closely-held corporation in which she had an undivided 50 percen t interest, and MSM purchas ed the land and gas station that Hailu later sold. She further alleged Hailu allowed a fraudule nt lien to be filed on the property and allowed Gebresilassie to receive payment of $150,141.93 on the fraudulent lien at closing. Abdu sought damages, exemplary damages, and attorney’s fees. In her fourth amended petition, Abdu asserted she had “standing to pursue this action as a direct ac tion” under Texas Practice as Remedies Code §§ 12.002 and 12.003; article 5.14(A) and (L) of the Texas Business Corporations Act, and sections 21.551 and 21.563 of the Texas Business Organ izations Code. 2 Gebresilassie filed a motion to dismiss the claim against him f or lack of jurisdiction. He asserted his loan to MSM was evi denced by a prom issory note whi ch Hailu signed in his capacity as “president and sole owner” of MSM as well as a deed of trust signed by Hailu in his capacity

1 The remaining funds were used to repay the first lien against the property.
2 The Texas Business Corporations Act has been superseded, and t he provisions at issue can now be found at sections 21.551 and 21.563 of the business organizations code . Section 21.551 defines a deri vative proceeding, and section 21. 563 addresses closely held co rporations. See T EX

. B US

. O RGS

. C ODE A NN

. §§ 21.551, 21.563.–3– as president of MSM. He attached to his motion the promissory note, deed of trust, and Hailu’s affidavit of arm’s length transa ction executed as part of the s ale of the property. Gebresilassie argued that neither the Texas Business Corporatio ns Act nor the Texas Business Organizations Code conferred standing on Abdu “to sue in her own name and for her own benefit on a cause of action that clearly belongs of MSM, e ven if she has been directly injured through injury to MSM.” Abdu filed a joint response to the mot ion and a “traditional no-evidence motion for summary judgment.” I n the response, Abdu alleged sh e was “provided the cause of action and standing” against Hailu and Gebresilassie under sect ion 12.003(a)(8) of the civil practice and remedies code, presumably as a “person who owns an interest in the real or personal property.” 3 Gebresilassie responded that t he corporation owned the proper ty, not Abdu. Following a hearing, the trial c ourt granted Gebresilassie’s mo tion to dismiss for lack of jurisdiction and dismissed Abdu’s claim against him without pre judice. Abdu filed a motion to reconsider, which the trial cour t denied. (Abdu attached evide nce to this motion.) A month later, the trial court granted Abdu a default divorce from Hailu and d ismissed without prejudice her claim for fraudulent lien agai nst him on the ground she lacked standing. This appeal followed. In a plea to the jurisdiction, a party may challenge either th e plaintiff’s pleadings or the existence of jurisdictional facts, or both. Alamo Heights Indep. Sch. Dist. v. Clark , 544 S.W.3d 755, 770 (Tex. 2018). When a plea to the jurisdiction challeng es the pleadings, as Gebresilassie did here, we determine if the pleader has alleged facts that af firmatively demonstrate the court’s jurisdiction to hear the cause. Tex. Dep’t of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004). We construe the pleadings liberally in favor of t he plaintiff and look to the pleader’s intent. Id . If the pleadings do not contain sufficient facts to affirmat ively demonstrate the trial

3 Section 12.003(a)(8) grants standing in the case of a fraudule nt lien to an “obligor or debtor , or a person who owns an inter est in the real or personal property.” T EX

. C IV

. P RAC

. & R EM

. C ODE A NN

. § 12.003(a)(8).–4– court’s jurisdiction but do not a ffirmatively demonstrate incur able defects in juri sdiction, the issue is one of pleading sufficiency a nd the plaintiffs should be aff orded the opportunity to amend. Id

. at 226–27. If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted withou t allowing the plaintiffs an opportunity to amend. Id . at 227. Shareholders of a corporation a re not owners of the corporation ’s assets. Reid Road Mun. Utility Dist. No. 2 v. Speedy Stop Food Stores, Ltd. , 337 S.W.3d 846, 854 (Tex. 2011). A corporate shareholder lacks standing to sue in her own name or for her ow n benefit on a cause of action belonging to the corporation, even if the shareholder is indire ctly injured through injury to the corporation. Mossler v. Nouri , No. 03-08-00476-CV, 2010 WL 2133940, at *4 (Tex. App.— Austin May 27, 2010, pet. denied). This applies to closely hel d corporations and to sole shareholders. Mossler , 2010 WL 2133940, at *4. “Relatedly, any recovery on a corpor ate cause of action must be available to pay the corporations debts.” Id

. We begin with Abdu’s third issue in which she complains the tri al court erred in granting Gebresilassie’s motion to dismiss based on lack of standing. A bdu appears to argue that because she is a shareholder of a closely held corporation, she has sta nding to bring a direct action individually and on her own beha lf for a fraudulent lien on the corporation’s asset. Relying on section 21.563(c) of the busines s organizations code, Abdu argu es that “special rules authorize the trial court, if justice requires, to treat the derivative actio n as a direct action brought by the shareholder for the shareholder’s own benefit, and award recove ry directly to that shareholder.”
See Sneed v. Weber , 465 S.W.3d 169, 182 (Tex. 2015). While we generally ag ree with this proposit ion of law, Abdu’s a rgument misses the mark. Nothing in section 21.563(c) or Sneed dispenses with the need for a shareholder to bring the suit derivatively or in the name of the corporation. Abdu did not a rgue below, nor does she on appeal,–5– that she brought her claim derivatively, nor has she asked the trial court or this Court to treat her petition as a deri vative action. Abdu’s latest petition specifically alleged she had standing to “pursue this action as a direct action.” While she may have bee n entitled to rec over directly, “if justice require d,” she could not bring a direct action. See Sneed , 465 S.W.3d at 182. Rather, as stated above, any viable fraud ulent lien claim that could have been brought is a claim belonging to the corporation and has to be brought derivatively. See Mossler , 2010 WL 2133940, at *4. To the extent Abdu suggests section 12.002 or 12.003(a)(8) of the civil practice and remedies code provides an independent basis for standing under the circumstances of this case, we disagree. Se ction 12.003(a)(8) a llows “a person who owns an interest in the real or personal property” to bring an action to enjoin a violation or seek damages under chapter 12. T EX
. C IV
. P RAC

. & R EM
. C ODE A NN
. § 12.003(a)(8). In her original brief, Abdu quoted porti ons of the language of section s 12.002 and 12.003, but she offered no analysis as to how these provi sions provided her standing. In her reply brief, she asserted she has a “beneficial interest” in the corporate assets as a shareh older, which she contends is sufficient for standing. But Abdu has cited us to no authority that would allow us to ignore the law that a shareholder lacks standing to sue in her own name or for her ow n benefit on a cause of action belonging to the corporation; rat her, the action must be brough t derivatively. In short, Abdu is asserting a cause of action individually agai nst Gebresilassie that belongs to MSM and is seeking damages personally for that alleged wrong , even though damages, if any, belong to MSM. Construing her petition liberally, we conclude Abdu’s pleadings do not contain sufficient facts to affirmativel y demonstrate ju risdiction and instead affirmatively demonstrate an–6– incurable defect in jurisdicti on. Accordingly, the trial court did not err in granting Gebresilassie’s motion and dismissing her claim against him. 4 We overrule the third issue. In her fourth issue, Abdu complains the trial court erred by di smissing her action against Hailu and incorporates her previous argument. For the same rea sons set out above, we likewise conclude the trial court did not err in dismissing her suit aga inst Hailu based on lack of standing. We overrule the fourth issue. In her first and second issues, A bdu raises issues related to t he sufficiency of the evidence to support the motion to dismiss or fact findings made by the c ourt. We have concluded the trial court’s decision on standing was based on a review of the plead ings; thus, we conclude any findings are not material or necessary to our decision. See Cooke Cty. Tax Appraisal Dist. v. Teel , 129 S.W.3d 724, 731 (Tex. App.—Fort Worth 2 004, no pet.) (stati ng immaterial fin ding of fact is harmless and not ground for rever sal). We overrule the first a nd second issues. We affirm the trial court’s judgment.

171261F.P05

4 To the extent Abdu has raised any new issues in her reply brie f, we do not consider them. See Dallas County v. Gonzales , 183 S.W.3d 94,104 (Tex. App.—Dallas 2006, pet. denied). /Molly Francis/ MOLLY FRANCIS JUSTICE–7– 

# S

Court of Appeals Fifth District of Texas at Dallas JUDGMENT
SITINA ABDU, Appellant
No. 05-17-01261-CV V.
MESAY HAILU AND ELYAS GEBRESILASSIE, Appellees On Appeal from the 429th Judicial District Court, Collin County, Texas Trial Court Cause No. 429-55610-2016. Opinion delivered by Justice Francis; Justices Stoddart and Sch enck participating.

In accordance with this Court’s opinion of this date, the judg ment of the trial court is AFFIRMED

. It is ORDERED that appellee MESAY HAILU AND ELYAS GEBRESILASSIE recover their costs of this app eal from appellant SITINA ABDU.
Judgment entered December 21, 2018.