1 

In The 

Court of Appeals 

Ninth District of Texas at Beaumont 

________________ 

NO. 09-20-00116-CV 

________________ 

DANIEL V. TRAVIS AND TRAVIS BROTHERS BUILDING 

AUTOMATION TEXAS, LLC, Appellants 

V. 

TOMMY TRAVIS, Appellee 

________________________________________________________________________ 

On Appeal from the 60th District Court 

Jefferson County, Texas 

Trial Cause No. B-201,895 

________________________________________________________________________ 

MEMORANDUM OPINION 

Daniel V. Travis and Travis Brothers Building Automation Texas, LLC 

(collectively, “Appellants”) appeal the trial court’s order granting Tommy Travis’s 

motion for traditional summary judgment.1

 In three issues, Appellants complain that 

the trial court: (1) abused its discretion in overruling their objections to Tommy’s 

summary judgment evidence, which constituted harmful error; (2) erred in granting 

1

For clarity, we use Daniel Travis and Tommy Travis’s first names.
2 

summary judgment and involuntarily winding up Travis Brothers Building 

Automation Texas, LLC (“the Company”) as a matter of law; and (3) erred in finding 

Tommy and Daniel each have a fifty percent ownership interest in the Company as 

a matter of law. Because genuine issues of material fact remain, we reverse and 

remand. 

I. BACKGROUND

A. Company Formation and Litigation 

In 2007, brothers Daniel and Tommy formed the Company. An Operating 

Agreement executed by the brothers governed the Company’s business. Article 2 of 

the Operating Agreement provided that “[t]he Members initially shall contribute to 

the Company capital as described in Exhibit 3 attached to this Agreement. The 

agreed value of such property and cash is $11,000.” It further provided that “the 

description and each individual portion of this capital contribution is as follows” and 

shows Daniel providing $6,000 and Tommy providing $5,000. The Operating 

Agreement allocated the Company’s profits and losses to the Members in proportion 

to each Member’s relative capital interest in the Company. According to the 

Operating Agreement, the Members voted on Managers, and while both brothers 

were initially named Managers, Daniel was elected Chief Executive Manager 

(“CEM”) and had the “primary responsibility for managing the operations of the 

Company and for effectuating the decisions of the Managers.” The Operating 
3 

Agreement also provided that “[b]y a vote of the Members holding a majority of the 

capital interests in the Company as set forth in Exhibit 2, as amended from time to 

time, shall elect so many Managers as the Members determine[.]” 

On June 11, 2018, Tommy filed his Original Petition for Dissolution and 

Application for Temporary Restraining Order and Injunctive Relief, naming Daniel 

and the Company as defendants. In his petition, Tommy alleged he and Daniel each 

had a fifty percent ownership interest, were equal Managers, and that Daniel was 

appointed CEO. In his petition, Tommy further sought a court order dissolving the 

Company “because actions by Defendant Daniel Travis has caused and continue to 

cause substantial damages to the Plaintiff[,]” and “because there is a deadlock within 

the [C]ompany” between the parties due to discord and distrust for which there is no 

expectation of resolution. Tommy complained that Daniel attempted to lock him out 

of the Company, removed him as a signer from their bank account, and reduced his 

responsibilities by naming him as Fleet Coordinator. Tommy contends that as a 

Manager, he has the right to be involved in the Company’s daily operation, and 

Daniel attempted to prevent him from doing so. He sought dissolution pursuant to 

Texas Business Organizations Code section 11.051 and asked the court to supervise 

the winding up of the Company, appoint a receiver, and appoint an accountant 

pursuant to section 11.054(3). See Tex. Bus. Orgs. Code Ann. §§ 11.051 (listing 

events requiring winding up of domestic entity), 11.054(3) (outlining court 
4 

supervision of domestic entity winding up). Tommy also applied for temporary and 

permanent injunctive relief pursuant to Texas Civil Practice and Remedies Code 

section 65.011. See generally Tex. Civ. Prac. & Rem. Code Ann. § 65.011 (outlining 

circumstances when a writ of injunction may be granted). Tommy’s requested relief 

included: a) the Company’s dissolution; b) appointment of a receiver to carry out the 

Company’s operations during dissolution process; c) appointment of an accountant 

to determine the appropriateness of the withdrawal of Company funds; d) attorneys’ 

fees; e) costs; and f) temporary injunction. On the same day Tommy filed his 

petition, the trial court signed a Temporary Restraining Order. Tommy subsequently 

filed a Motion to Appoint a Receiver. 

Appellants answered with a general denial and challenged Tommy’s claims 

he owned fifty percent of the Company. Daniel claimed that the Company’s 

Operating Agreement showed he owned 6/11ths or 54.55% and Tommy owned 

5/11ths or 45.45% based on their initial capital contribution. Daniel asserted that 

because he owned a majority interest in the Company, no deadlock existed in the 

Company’s management, and receivership was not authorized under the 

circumstances. 

B. Summary Judgment Record 

On February 24, 2020, Tommy filed his Traditional Motion for Summary 

Judgment and Request for a Court Appointed Person to Carry Out the Winding Up 
5 

of the Company.2 Tommy argued that Texas Business Organizations Code section 

11.314 gave the court the jurisdiction to wind up the Company. Specifically, Tommy 

argued the Code authorizes winding a company up because: 1) the economic purpose 

2

On the same day, Appellants filed an Objection to Entry of Receivership 

Order, asserting that Daniel claimed a 6/11 or 54.55% ownership in the Company 

and Tommy owned 5/11 or 45.45% of the Company. In its objection, Appellants 

argued that the trial court conducted evidentiary hearings on Tommy’s Motion to 

Appoint Receiver on November 2, 2018 and April 4, 2019, at the conclusion of 

which, the trial court announced it would appoint a receiver “because the Court 

believed that the management of the [C]ompany was deadlocked[,]” noting it relied 

on Tommy’s testimony that he made nonmonetary contributions that increased his 

ownership to 50% and the Company’s tax returns. The trial court didn’t reduce its 

oral announcement to a written order. Appellants alleged that in December 2019, 

Tommy “stole a significant amount of money from [the Company].” Appellants then 

explained in response to Tommy’s action, they filed counterclaims to recover the 

“stolen money.” Appellants alleged that in response to the counterclaims, Tommy 

requested a hearing to enter the order appointing a receiver. In their Objection to 

Entry of a Receivership Order, Appellants argued that a rehabilitating receiver could 

be appointed pursuant to Texas Business Organizations Code section 11.404 and that 

a liquidating receiver could be appointed pursuant to section 11.405. While a 

deadlock of management could justify appointing a receiver to rehabilitate the 

Company, it does not authorize a court to appoint a receiver to liquidate a company’s 

assets. Appellants also argued that prior to ordering a company’s assets liquidated 

and appointing a receiver for that purpose under section 11.405, the court must 

determine “that all other available legal and equitable remedies, including the 

appointment of a receiver for specific property of the domestic entity and 

appointment of a receiver to rehabilitate the domestic entity are inadequate.” They 

further contended that Tommy failed to satisfy the elements of appointment of a 

receiver pursuant to section 11.404 and specifically challenged that a deadlock 

existed. On February 20, 2020, the trial court conducted another hearing on 

appointing a receiver. In that hearing, the trial court requested additional briefing on 

setting a bond and appointing a receiver under sections 11.404 and 11.405. However, 

instead of proceeding on the question of appointing a receiver, Tommy then filed his 

Traditional Motion For Summary Judgment and asked the trial court to involuntarily 

dissolve the Company. 
6 

of the Company is likely to be frustrated; 2) defendant’s conduct has made it 

impracticable to carry on business with the defendant; and 3) the defendant’s actions 

made it not reasonably practicable to carry on the Company’s business in conformity 

with the Company’s governing documents. See Tex. Bus. Orgs. Code Ann. § 11.314. 

Tommy also requested the court appoint someone to wind up the Company pursuant 

to section 11.054 of the Texas Business Organizations Code. See id. § 11.054. 

Tommy’s summary judgment evidence included his Original Petition and 

Application for TRO, a statement from American Express showing charges from 

July 2013 to March 2015, a federal tax lien notice against the Company from 2017 

and 2018 totaling $580,289.19, the Company Operating Agreement, a letter dated 

May 15, 2018 from Daniel to Post Oak Bank requesting that Tommy be deleted as a 

person authorized to sign on the account, an email from a former employee 

explaining why she decided to leave her job, and an email from Daniel to Tommy 

dated May 17, 2018, regarding his new role as Fleet Coordinator. 

Appellants filed their response to the summary judgment motion. The 

evidence filed with their response included the affidavit of Company Controller 

Jessie Travis,3

 the Company Operating Agreement, Jessie’s CV, Company 

Reconciliation of Partners’ Capital Accounts, and certified copies of federal tax lien 

3

Jessie is not related to the brothers. For purposes of clarity we refer to her by 

her first name.  
7 

releases. In their response, they contended there was no evidence to support a 

statutory winding up and dissolution pursuant to section 11.314. They also argued 

there was not any competent evidence that the economic purpose of the entity was 

likely to be unreasonably frustrated, that another owner had engaged in conduct 

relating to the entity’s business that made it impractical to carry on the Company’s 

business, or that it was not reasonably practicable to carry on the entity’s business 

in conformity with the Company’s governing documents. In the alternative, 

Appellants asserted that at a minimum, their summary judgment evidence created 

fact issues on those questions. For example, Appellants pointed to the Operating 

Agreement, which shows Tommy contributed $5,000 of the $11,000 startup capital, 

giving him a 45.45% ownership interest in the Company even though he claims he 

owns 50% of the Company. They argued Daniel owned a majority interest in the 

Company and could elect or remove Company managers as he saw fit. As the 

Company’s CEM, the Appellants said Daniel had the authority to make the decisions 

that he made on the Company’s behalf. The Appellants also objected to Tommy’s 

summary judgment evidence, including the petition for dissolution and TRO Tommy 

filed, arguing that the pleadings Tommy filed did not constitute summary judgment 

proof. They also objected to the American Express statement that shows Daniel’s 

expenditures and the former employee’s email discussing why she left the Company, 

relying on Texas Rules of Evidence 802, 901, and 902. 
8 

On March 19, 2020, the day before the summary judgment hearing, Tommy 

filed a reply with exhibits and supplemental reply with exhibits. These replies 

incorporated summary judgment evidence already before the court, including 

Jessie’s affidavit.4

 The only new evidence Tommy included with his supplemental 

reply was a copy of the transcript of the trial court’s April 4, 2019 evidentiary 

hearing on his motion to appoint a receiver and hearing exhibits. Tommy did not 

request leave to file this evidence. Appellants filed their Motion to Strike Tommy’s 

4

Tommy objected to Jessie’s affidavit on two grounds, complaining it was 

conclusory and asserting she was not an expert qualified to provide the opinions she 

expressed in the affidavit. The trial court never ruled on Tommy’s objections. 

Tommy’s objections lack merit because the affidavit is neither conclusory, nor does 

it contain the unsupported ipse dixit of an expert witness. Jessie based her affidavit 

on her personal knowledge as the Company’s Controller. She outlines her 

qualifications in her affidavit and supports the statements she makes in it with the 

documents she relied upon, including the Company’s Operating Agreement, the 

account reconciliations, and the IRS release of liens. Jessie explained the Company’s 

records she reviewed did not show any additional recorded capital contributions by 

Tommy in the form of cash or property. She explained why she offered the opinions 

that are in the affidavit, citing the Company’s documents. Jessie also discussed her 

personal knowledge of the Company’s operations, operations with which she was 

familiar given her role as Controller and her job duties in that role. See Tex. R. Civ. 

P. 166a(f) (requiring affidavits to be made on personal knowledge, set forth facts as 

would be admissible in evidence, and show affiant’s competency to testify on the 

matters included). When dealing with an expert, “the affidavit must explain the link 

between the facts the expert relied upon and the opinion reached.” Starwood Mgmt., 

LLC v. Swaim, 530 S.W.3d 673, 679 (Tex. 2017) (citations omitted). Appellants 

argue that Jessie’s affidavit was not offered as an expert but rather as the Controller 

with knowledge of the Company’s operations and finances. Here, Jessie’s 

conclusions are supported by demonstrable and reasoned bases and a subjective 

comment in an affidavit, without more, does not render the affidavit conclusory as a 

whole. See id. at 680. 
9 

replies and this evidence as untimely. The trial court overruled all objections to the 

summary judgment evidence and denied the Motion to Strike. 

On March 20, 2020, the trial court held a hearing on the motion for summary 

judgment. On March 23, 2020, the trial court signed on order granting Tommy’s 

Traditional Motion for Summary Judgment and Request for a Court Appointed 

Person to Carry Out the Winding Up of the Company. The trial court found that 

Tommy and Daniel each held a 50% ownership interest in the Company and “the 

members are unable to jointly agree on any business matters or management of the 

Company’s affairs, the members are unable to break the deadlock, and, as a result, 

Court ordered winding up of the Company is necessary and proper.”5

 

II. STANDARDS OF REVIEW 

We review a trial court’s ruling on objections to summary judgment evidence 

under an abuse of discretion standard. See Starwood Mgmt., LLC v. Swaim, 530 

S.W.3d 673, 678 (Tex. 2017) (“We review the rendition of summary judgments de 

novo. But we review a trial court’s decision to exclude evidence for an abuse of 

discretion.”) (citations omitted). A trial court abuses its discretion if it acts without 

reference to any guiding rules or principles. Carpenter v. Cimarron Hydrocarbons 

5

The trial court’s summary-judgment order did not dispose of Appellant’s 

counterclaims. Subsequently, Appellants filed a notice of nonsuit of these claims. 

The trial court thereafter signed on order dismissing these claims, making the 

summary-judgment order final and appealable. 
10 

Corp., 98 S.W.3d 682, 687 (Tex. 2002). To constitute reversible error, an appellant 

must show that the trial court’s substantive ruling was erroneous and that it was 

harmful, meaning it was calculated to cause and probably did cause the rendition of 

an improper judgment. See City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 

(Tex. 1995); see also Tex. R. App. P. 44.1(a)(1). 

We review a trial court’s decision to grant summary judgment de 

novo. See Shell Oil Co. v. Writt, 464 S.W.3d 650, 654 (Tex. 2015) (citation omitted). 

We view the evidence in the light most favorable to the nonmovant. Id. (citing City 

of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005)). In doing so, we indulge every 

reasonable inference and resolve any doubts against the motion. See City of Keller, 

168 S.W.3d at 824. “Undisputed evidence may be conclusive of the absence of a 

material fact issue, but only if reasonable people could not differ in their conclusions 

as to that evidence.” Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012) (citation 

omitted). When a plaintiff moves for summary judgment on its claim, it must 

establish its right to summary judgment by conclusively establishing all elements of 

its cause of action as a matter of law. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 

223 (Tex. 1999). The movant has the burden to show with competent summaryjudgment evidence, that no genuine issue of material fact exists, and he is entitled to 

summary judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Mann Frankfort 

Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). Once a 
11 

plaintiff meets this burden, the burden shifts to the nonmovant to raise a genuine 

issue of material fact precluding summary judgment. Smiley Dental-Bear Creek, 

P.L.L.C. v. SMS Financial LA, L.L.C., No. 01-18-00983-CV, 2020 WL 4758472, at 

*4 (Tex. App.—Houston [1st Dist.] Aug. 18, 2020, no pet.) (mem. op.). Evidence 

raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their 

conclusions considering all the summary judgment evidence. Goodyear Tire & 

Rubber v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). When the trial court fails to 

specify the grounds on which it granted summary judgment, we must affirm if any 

of the summary judgment grounds are meritorious. FM Props. Operating Co. v. City 

of Austin, 22 S.W.3d 868, 872–73 (Tex. 2000) (citation omitted). 

III. ANALYSIS 

A. Issue One: Objections to Summary Judgment Evidence 

In their first issue, Appellants contend that the trial court abused its discretion 

in overruling their objections to Tommy’s summary judgment evidence. Assuming 

without deciding that this evidence was admissible, and the trial court properly 

considered it, Tommy still failed to prove he was entitled to judgment as a matter of 

law, as explained more fully below. Genuine issues of material fact exist regarding 

Tommy’s ownership share in the Company and whether Tommy is entitled to have 

the Company involuntary dissolved, thus precluding summary judgment on this 

ground. 
12 

B. Issue Two: Texas Business Organizations Code § 11.314 

 In their second issue, Appellants contend that Tommy failed to conclusively 

establish his entitlement to summary judgment on his claim seeking to dissolve the 

Company under section 11.314. Section 11.314 of the Texas Business and 

Commerce Code permits a district court to order a Company wound up and the 

partnership terminated “if the court determines” that at least one of three exigent 

circumstances listed in the statute exists. CBIF Ltd. P’ship v. TGI Friday’s Inc., No. 

05-15-00157-CV, 2017 WL 1455407, at *9 (Tex. App.—Dallas Apr. 21, 2017, pet. 

denied) (mem. op.) (quoting Tex. Bus. Orgs. Code Ann. § 11.314). Specifically, the 

statute provides 

A district court in the county in which the registered office or principal 

place of business in this state of a domestic partnership or limited 

liability company is located has jurisdiction to order the winding up and 

termination of the domestic partnership or limited liability company on 

application by an owner of the partnership or limited liability company 

if the court determines that: 

(1) the economic purpose of the entity is likely to be 

unreasonably frustrated. 

(2) another owner has engaged in conduct relating to the entity’s 

business that makes it not reasonably practicable to carry on the 

business with that owner; or 

(3) it is not reasonably practicable to carry on the entity’s 

business in conformity with its governing documents. 

Tex. Bus. Orgs. Code Ann. § 11.314. “Dissolution proceedings are equitable in 

nature and contested facts concerning a basis for dissolution are for the jury.” CBIF 

Ltd. P’ship, 2017 WL 1455407, at *9 (citing M.R. Champion, Inc. v. Mizell, 904 
13 

S.W.2d 617, 618 (Tex. 1995)). At least one other appellate court has determined that 

a case involving dissolution pursuant to 11.314 “presented contested fact issues that 

had to be resolved by the jury before the court could determine whether dissolution 

was warranted.” Id. The fact that there are only two members and they disagree does 

not mean there is a deadlock where one owns a majority interest. See, e.g., Shannon 

Med. Ctr. v. Triad Holdings III, L.L.C., 601 S.W.3d 904, 917 (Tex. App.—Houston 

[14th Dist.] 2019, no pet.) (discussing section 11.314 in partnership context and 

determining appellant failed to conclusively establish it was not reasonably 

practicable to carry on the entity’s business in conformity with the governing 

documents). Further, an entity can carry on its business in accordance with its 

governing documents despite litigation between the members. See id. (noting same). 

1. Economic Purpose of the Company Likely to be Frustrated 

In his Traditional Motion for Summary Judgment, Tommy argued that the 

economic purpose of the Company is likely to be frustrated. See Tex. Bus. Orgs. 

Code Ann. § 11.314(1). Specifically, Tommy asserted that Daniel created a toxic 

work environment, used funds for inappropriate entertainment and housing, allowed 

a federal tax lien to be filed, and attempted to lock Tommy out of the Company. In 

support of this, he points to an American Express statement with charges between 

2013 and 2015 purporting to show the inappropriate charges, a federal tax lien, and 

a former employee’s email complaining of Daniel. However, Jessie’s affidavit and 
14 

the documents that support it create a fact issue on whether the Company’s purpose 

is likely to be frustrated. As a CPA, Jessie’s affidavit shows that based on her duties, 

qualifications, and familiarity with the financial conditions and operations of the 

Company, she was qualified to express opinions about the Company’s operations. 

She averred that she interacts with the Company’s employees and customers and 

opined that the Company has sought and obtained additional profitable projects. 

Jessie swore that the Company is current on all its federal and state taxes, currently 

the Company has no tax liens against its property, and she attached certified copies 

of the releases of tax liens to her affidavit. 

In her affidavit, Jessie attached “a true and correct copy” of the Company 

Operating Agreement and explained that based on that agreement, the total initial 

capital contribution was $11,000. Of that total, Tommy contributed $5,000 while 

Daniel contributed $6,000. She explained that Daniel owned 6/11 or 54.55% and 

Tommy owned 5/11 or 45.45% of the Company, and Company records do not reflect 

or show any additional capital contributions of cash or property, testimony that 

contradicts Tommy’s claim asserting he contributed additional capital consisting of 

a truck and tools. The testimony of the Company’s prior Controller, Gina Crisci, 

from the April 4 hearing also contradicts Tommy’s claims that he provided 

additional capital to the Company.
15 

Appellants both signed the Company’s Operating Agreement, which 

Appellants included in their summary judgment evidence. Article 2 of the Company 

Operating Agreement outlined the Members’ initial capital contributions and stated 

the “agreed value of such property and cash is $11,000.” It further showed Daniel 

providing $6,000 and Tommy providing $5,000. The Operating Agreement provided 

that the Members’ interests would be determined by their capital contributions as set 

forth in the agreement, which established Daniel owned a 6/11 interest, and Tommy 

owned a 5/11 interest. Tommy’s claim that he owned 50% per income tax filings 

was contradicted not only by the plain language of the Operating Agreement, but by 

Jessie’s affidavit. Jessie averred that in her role, she reviewed these documents, 

performed a reconciliation of the capital accounts, determined that the federal tax 

filings showing 50-50 ownership were erroneous, and that the tax filings were 

contrary to the Operating Agreement. 

While the summary judgment evidence does show the brothers have disputes 

regarding issues involving the Company’s management, genuine issue of material 

fact exist about the percentage ownership interests each owner has in the Company. 

If Daniel owns the 54.55% that he claims as reflected by the Company Operating 

Agreement and by Jessie’s testimony, he holds a majority ownership interest in the 

Company. If that is the case, there would not be a deadlock. Further, if it is 

determined that Daniel is the majority owner in a trial, he would have the right as 
16 

the owner of the largest interest in the Company to exercise his vote to remove or 

add Managers, including Tommy, under Article 4.1 of the Operating agreement. 

Tommy argued Daniel’s actions harmed the Company, and he alleged that 

Daniel attempted to lock him out of the business. As evidence to support these 

claims, Tommy provided American Express statements, a former employee’s email, 

federal tax liens, documents showing he was appointed to coordinate the Company’s 

fleet, and documents showing he was removed as an authorized signer from the 

Company bank accounts. Even if admissible, the American Express statement shows 

charges from three to five years before the lawsuit was filed. There was no 

conclusive evidence that those charges were relevant to the issues in the suit. In her 

affidavit, Jessie averred that any charges that were not legitimate business expenses 

are “treated as distributions to the partner who made the charge or received the 

benefit of the expenditure.” Moreover, apart from generally being unhappy, the 

former employee’s email likewise did not provide any conclusive evidence that the 

economic purposes of the Company were likely frustrated, a claim the Appellants 

challenged in any event with the summary judgment evidence they filed. Jessie ’s 

affidavit and releases of tax liens show that issues as to past taxes owed had been 

resolved. Further, Jessie explained that the Company was viable and had good 

customers, the Company was current on its taxes, and the capital account 

reconciliation for the Company showed the Company has over $250,000 in equity. 
17 

According to Jessie’s affidavit, given the Company’s financial condition, operations, 

and “its ability to seek and regularly obtain additional profitable and quality projects 

and work, the company is economically viable, and its economic purpose is not 

likely to be frustrated.” 

 Viewing the evidence in the light most favorable to the nonmovant, we 

conclude a genuine issue of material fact existed regarding whether the Company’s 

economic purpose was likely to be frustrated. See JLB Builders, L.L.C. v. 

Hernandez, 622 S.W.3d 860, 864 (Tex. 2021) (outlining movant’s burden in 

traditional motion for summary judgment to show no genuine issue of material fact 

remains); Writt, 464 S.W.3d at 654; see also Tex. R. Civ. P. 166a(c) (same); Tex. 

Bus. Orgs. Code Ann. § 11.314(1) (providing circumstance warranting involuntary 

winding up). 

2. An Owner Engaged in Conduct Relating to the Entity’s Business that 

Makes it Not Reasonably Practicable to Carry On the Business with that 

Owner 

 Appellants further contend that Tommy failed to conclusively establish that 

Daniel engaged in conduct relating to the entity’s business that makes it not 

reasonably practicable to carry on with Daniel as a matter of law. See Tex. Bus. 

Orgs. Code Ann. § 11.314(2). We agree. In his motion for summary judgment, 

Tommy argued it was not practicable to carry on the business, relying on the 

American Express statement, which shows what he asserted were inappropriate 
18 

expenditures of Company funds and correspondence proving that Daniel removed 

Tommy from the account at the Company’s bank, reduced Tommy’s role within the 

Company, and unilaterally reduced Tommy’s salary. Appellants’ evidence, 

however, raises fact issues on Tommy’s claims. In Jessie’s affidavit, she explained 

how non-business or personal expenses are treated as distributions by the individual 

who charged an expense to a credit card. Crisci’s affidavit is similar, as she explained 

that when the person charges something to the Company that is not a legitimate 

business expenses, the person ends up paying for the item personally. Likewise, 

Daniel testified that the Company’s policies had changed, and the Company no 

longer entertains customers in ways like those reflected by the statements the 

Company has received in the past from American Express. 

The Operating Agreement shows that based on the initial capital 

contributions, Daniel held the majority interest and accordingly could have removed 

managers by exercising his majority vote. Moreover, the evidence shows that Daniel 

as the CEM was responsible for the day-to-day operations of the Company. Jessie 

outlined the payments Tommy continued to receive annually despite not currently 

providing any services to the Company. Likewise, in her affidavit, Jessie states the 

Company carried on business and that “Dan Travis is not engaging in any conduct 

relating to the company’s business that makes it reasonably impractical to carry 

on[.]” To support her opinion, Jessie’s cites the Company’s improved financial 
19 

condition since Tommy filed the suit and notes the Company is operating profitably. 

Viewing the evidence in the light most favorable to the nonmovant, we conclude 

that a genuine issue of material fact exists regarding whether Daniel’s conduct has 

made it impracticable to carry on the business with Daniel, thus precluding summary 

judgment on this ground. See JLB Builders, 622 S.W.3d at 864; Writt, 464 S.W.3d 

at 654; see also Tex. R. Civ. P. 166a(c); Tex. Bus. Orgs. Code Ann. § 11.314(2). 

3. Not Reasonably Practicable to Carry on the Entity’s Business in 

Conformity with its Governing Documents 

Under section 11.314(3), the final exigent circumstance that would allow for 

involuntary judicial winding up of the entity is if “it is not reasonably practicable to 

carry on the entity’s business in conformity with its governing documents.” Tex. 

Bus. Orgs. Code Ann. § 11.314(3). Appellants likewise argue that Tommy failed to 

establish his right to summary judgment under this final statutory circumstance that 

would allow for involuntary dissolution. In his summary judgment motion, Tommy 

points to the Operating Agreement and contends that as a Manager, he has the power 

to act on behalf of the Company and to control and manage the Company. He 

contends that the Operating Agreement lists both brothers as Managers and given 

the trial court’s prior finding of 50% ownership by each member, Daniel’s attempts 

to assume full control of the Company runs “afoul” of the Company’s Operating 

Agreement. Tommy asserts that the “Parties have become deadlocked and are unable 

to jointly agree on any business matters or the management of the Company, which 
20 

is the direct result of [Daniel’s] repeated attempts to lock [him] out.” Therefore, he 

argues he is entitled to dissolution under section 11.314(3). See id. 

Tommy’s argument that he is entitled to dissolution based on this subsection 

necessarily hinges on the trial court’s finding that the brothers each own a 50% 

interest. However, as discussed above, the Operating Agreement appears to show 

that the Members’ initial capital contributions dictated their ownership interest, and 

Jessie’s affidavit supports this. If true, Daniel owns 6/11 interest, and Tommy owns 

a 5/11 interest. As the Member owning the majority interest, Daniel would have the 

right to vote Managers in or out as he sees fit. Further, Jessie averred that the 

Company continued to operate in accordance with its Operating Agreement and 

delineated the reasons why. At a minimum, Appellants’ evidence establishes that a 

genuine issue of material fact exists precluding summary judgment under section 

11.314(3). See Tex. R. Civ. P. 166a(c). 

The trial court improperly granted summary judgment based upon Texas 

Business Organizations Code section 11.314, because genuine issues of material fact 

exist as to whether: 1) the economic purpose of the Company is likely to be 

unreasonably frustrated; 2) Daniel has engaged in conduct relating to the Company’s 

business that makes it not reasonably practicable to carry on the business with him; 

and 3) it is not reasonably practicable to carry on the Company’s business in 
21 

conformity with its governing documents. See Tex. Bus. Orgs. Code Ann. § 

11.314(1) – (3). We sustain Appellants’ second issue. 

C. Issue Three: Trial Court’s Finding as to Members’ Ownership Interest 

To support its order of dissolution, the trial court found that “the members are 

unable to jointly agree on any matters or the management of the Company’s affairs, 

[and] the members are unable to break the deadlock.” Appellants again disputed any 

deadlock existed. While Tommy contended that he and Daniel each owned a 50% 

interest in the Company, as explained above, the Operating Agreement undercuts 

this assertion. “The profits and losses of a limited liability company shall be 

allocated to each member of the company on the basis of the agreed value of the 

contributions made by each member, as stated in the company’s records required 

under Section 101.501.” Id. § 101.201. LLCs are required to keep a written statement 

of “the amount of a cash contribution and a description and statement of the agreed 

value of any other contribution made or agreed to be made by each member” and 

“the dates any additional contributions are to be made by a member[.]” Id. § 

101.501(a)(7)(A)–(B). 

Even assuming without deciding the trial court properly considered testimony 

from the hearing on April 4, 2019 of Tommy and Daniel’s sister that she participated 

in a family meeting where her brothers discussed forming the Company and that 

they intended to own the business 50-50, this evidence did not conclusively establish 
22 

the shares the parties owned in the Company given the terms of the Operating 

Agreement and testimony that Daniel’s capital contribution of $6,000 made him the 

majority owner. During the same hearing, Daniel testified that their father gave each 

brother $5,000 to start the business, but he contributed an extra $1,000 in case a 

dispute arose between the owners of the business. Daniel said that Tommy saw “the 

paper” with these amounts and “signed it.” Daniel explained Tommy expected a 60-

40 or 80-20 split, and Tommy did not object to Daniel owning five or six percent 

more of the Company’s shares. Additional documents introduced in the hearing 

included federal tax documents, which show each brother owns 50% of the 

Company. 

The summary judgment evidence includes the testimony of Crisci. Crisci 

disputed Tommy owns the Company equally with Daniel and disputed that Tommy 

contributed additional capital based on providing the Company tools and a truck. 

Crisci testified errors were made on the Company’s federal tax filings, specifically 

where the filings reflect the brothers each own 50% of the Company as the 

Company’s accountant made a mistake. Crisci explained the CPA firm responsible 

for preparing the Company’s tax documents made the error because the accounting 

firm was never given a copy of the Operating Agreement and instead assumed the 

brothers each owned 50% shares in the Company. In its April 4, 2019 ruling, the 

trial court explained that it relied on federal tax returns in finding that each brother 
23 

held a 50% interest in the Company and on Tommy’s testimony that he contributed 

additional capital to the Company in the form of a truck and tools. 

At the summary judgment hearing and in their response to Tommy’s motion 

for summary judgment, Appellants disputed evidence of 50-50 ownership and 

deadlock with Crisci’s testimony and Jessie’s affidavit. Crisci and Jessie testified 

that the federal tax documents were erroneous and why, and each explained the 

ownership interests based on the Company’s Operating Agreement. Both also 

testified that no Company records showed that Tommy made additional capital 

contributions to the Company for providing the Company with either additional cash 

or property. See id. §§ 101.201, 101.501(a)(7)(A)–(B). 

Viewing the summary judgment evidence in the light most favorable to the 

nonmovant, we conclude a genuine issue of material fact exists regarding the shares 

each brother owns in the Company. See City of Keller, 168 S.W.3d at 824. Tommy 

failed to meet his burden to establish that no genuine issue of material fact remained. 

See Tex. R. Civ. P. 166a(c); JLB Builders, 622 S.W.3d at 864. Simply put, the trial 

court erred by finding that as a matter of law each brother owns 50% of the Company 

and that the equal ownership resulted in a deadlock that made a “winding up of the 

[C]ompany” necessary and proper” under section 11.314 of the Texas Business 

Organizations Code. We sustain issue three. 

 
24 

IV. CONCLUSION 

 Viewing the evidence in the light most favorable to the nonmovant, we 

conclude genuine issues of material fact remain. Accordingly, we reverse the trial 

court’s order granting summary judgment and remand the matter to the trial court. 

REVERSED AND REMANDED. 

 

 

 ________________________________ 

 W. SCOTT GOLEMON 

Chief Justice 

 

Submitted on November 12, 2021 

Opinion Delivered April 21, 2022 

Before Golemon, C.J., Kreger, and Horton, JJ.