Court Opinion

ID: 4425733
Source: CourtListenerOpinion
Date Created: 2019-08-15 11:51:55.040492+00
Date Added: 2024-06-11T14:52:59.348893
License: Public Domain

REVERSE and REMAND; and Opinion Filed August 14, 2019.

                                       In The
                          Court of Appeals
                   Fifth District of Texas at Dallas
                                No. 05-18-00206-CV

  H. JONATHAN COOKE, INDIVIDUALLY AND ON BEHALF OF ESCROW PARTNERS
DALLAS, L.P.; ESCROW PARTNERS DALLAS, GP, INC.; ESCROW PARTNERS HOUSTON,
  L.P.; ESCROW PARTNERS HOUSTON, GP, INC.; ESCROW PARTNERS AUSTIN, L.P.;
   ESCROW PARTNERS AUSTIN, GP, INC.; ESCROW PARTNERS SAN ANTONIO, L.P.;
   ESCROW PARTNERS SAN ANTONIO, GP, INC.; TITLE PARTNERS, L.L.P.; NORTH
 AMERICAN MANAGEMENT, L.L.P.; TJ PARTNERS I, LLC; AND TJ PARTNERS II, LLC,
                                 Appellants
                                     V.
  ROBERT C. KARLSENG; KARLSENG LAW FIRM, P.C.; ASHLEY BRIGHAM PATTEN;
 PATTEN & KARLSENG LAW FIRM, P.C.; JACQUES YVES LEBLANC; AND LEBLANC,
                 PATTEN AND KARLSENG LAW FIRM, P.C., Appellees

                                        AND

  ROBERT C. KARLSENG; KARLSENG LAW FIRM, P.C.; ASHLEY BRIGHAM PATTEN;
 PATTEN & KARLSENG LAW FIRM, P.C.; JACQUES YVES LEBLANC; AND LEBLANC,
              PATTEN AND KARLSENG LAW FIRM, P.C., Cross-Appellants
                                     V.
  H. JONATHAN COOKE, INDIVIDUALLY AND ON BEHALF OF ESCROW PARTNERS
DALLAS, L.P.; ESCROW PARTNERS DALLAS, GP, INC.; ESCROW PARTNERS HOUSTON,
  L.P.; ESCROW PARTNERS HOUSTON, GP, INC.; ESCROW PARTNERS AUSTIN, L.P.;
   ESCROW PARTNERS AUSTIN, GP, INC.; ESCROW PARTNERS SAN ANTONIO, L.P.;
   ESCROW PARTNERS SAN ANTONIO, GP, INC.; TITLE PARTNERS, L.L.P.; NORTH
 AMERICAN MANAGEMENT, L.L.P.; TJ PARTNERS I, LLC; AND TJ PARTNERS II, LLC,
                               Cross-Appellees

                 On Appeal from the 193rd Judicial District Court
                              Dallas County, Texas
                     Trial Court Cause No. DC-06-02783-L

                       MEMORANDUM OPINION
                  Before Justices Brown, Schenck, and Pedersen, III
                           Opinion by Justice Pedersen, III
           This is a permissive interlocutory appeal of the trial court’s February 6, 2018 Second

Amended Order Granting Defendants’ Motion for Summary Judgment on Defendants’ Illegality

and Business Judgment Rule Defenses and Amended Order on Defendants’ Plea to the Jurisdiction

and Traditional Motion for Partial Summary Judgment Related to the Business Entities’ Claims

(the Order). See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d). The trial court granted the

parties’ agreed motion for this appeal, concluding that the Order “involves controlling questions

of law about which there is a substantial ground for difference of opinion,” id. § 51.014(d)(1), and

that an immediate interlocutory appeal “may materially advance the ultimate termination of the

litigation,” id. § 51.014(d)(2). Those controlling questions take the form of four issues. Appellants1

contend the trial court erroneously granted summary judgment in favor of the cross-appellants on

two affirmative defenses: illegality and the business judgment rule. Cross-appellants2 argue the

trial court erroneously denied their plea to the jurisdiction and denied their summary judgment

motion on a third affirmative defense, limitations. We reverse the trial court’s Order in part, and

we dismiss appellants’ claims that are subject to this appeal.

                                                           BACKGROUND3

           In 1999, Cooke and Karlseng went into business together to provide title closing services

to lenders and real estate companies. Cooke and Karlseng formed a partnership, Title Partners,

L.L.P, each with a fifty-percent ownership interest, to supervise the day-to-day management of the

business. Karlseng is a licensed attorney and became a licensed escrow agent; Cooke, who is not

      1
         The appellants/cross-appellees include: Escrow Partners Dallas, L.P.; Escrow Partners Dallas, Gp, Inc.; Escrow Partners Houston, L.P.;
Escrow Partners Houston, Gp, Inc.; Escrow Partners Austin, L.P.; Escrow Partners Austin, Gp, Inc.; Escrow Partners San Antonio, L.P.; Escrow
Partners San Antonio, Gp, Inc.; Title Partners, L.L.P.; North American Management, L.L.P.; Tj Partners I, LLC; and Tj Partners II, LLC (the
Business Entities) and H. Jonathan Cooke, who appeals individually and on behalf of the Business Entities. We will refer to Cooke and the Business
Entities collectively as the appellants.
     2
        The appellees/cross-appellants include: Robert C. Karlseng; Karlseng Law Firm, P.C.; Ashley Brigham Patten; Patten & Karlseng Law
Firm, P.C.; Jacques Yves Leblanc; and Leblanc, Patten and Karlseng Law Firm, P.C. We will refer to these parties as the cross-appellants.
     3
       This is the fourth appeal in this case. We adopt the relevant factual background statement from the first appeal in 2009, Karlseng v. Cooke,
286 S.W.3d 51, 53–54 (Tex. App.—Dallas 2009, no pet.), and we add facts concerning subsequent events as necessary to resolve this appeal.

                                                                      –2–
an attorney, handled marketing duties. Over the next five years, Cooke and Karlseng expanded

their business operations to several Texas cities and formed other partnerships with attorneys

Ashley Brigham Patten and Jacques Yves LeBlanc. The partners split profits according to the terms

of the partnership agreements.

       In 2004 and 2005, the Texas Department of Insurance (TDI) conducted an investigation of

the partnerships to determine whether a licensed attorney was supervising the work of certain

employees who were closing real estate transactions. Although appellants’ counsel advised that

the business relationship was legal, he also suggested that switching to a law firm structure could

expedite a resolution with TDI. Thereafter, Karlseng, Patten, and LeBlanc created the defendant

law firms and transferred partnership assets and business to the new firms without paying Cooke

or observing the requirements of the partnership agreements when transferring these assets. The

parties disputed whether Cooke was consulted on this change. The parties unsuccessfully

attempted to negotiate a settlement to compensate Cooke either through a buyout or

employment/consulting contract. Cooke claimed he was then fired, but appellants asserted he quit.

       In March 2006, Cooke filed a lawsuit alleging appellants tortiously transferred partnership

assets to new professional corporations, owned solely by the individual appellants, and falsely told

Cooke that the partnerships needed to shut down due to certain state regulations. The partnership

agreements provided for arbitration, and appellants filed a motion to compel arbitration. The trial

court granted the motion and ordered the parties to arbitration.

       A contested arbitration hearing was held in December 2007. The arbitrator ruled in Cooke’s

favor and awarded him more than $22 million. The trial court affirmed the arbitration order, but

this Court vacated the award and remanded the cases for further proceedings. Karlseng v. Cooke,

346 S.W.3d 85, 100 (Tex. App.—Dallas 2011, no pet.).

                                                –3–
       Over subsequent years, the case has been litigated in depth. Claims and defenses have been

added, and a number of legal theories have been raised in response. This permissive appeal turns

on four of those theories.

       (1) Cross-appellants moved for summary judgment contending that Cooke’s claims were

barred because the partnership agreements structuring the operations of the Business Entities

called for Cooke to share in the profits of the enterprise. According to title insurance law and

regulations, sharing profits with a party not licensed as an escrow agent or an attorney is illegal.

The trial court granted the motion. In their first issue, appellants challenge that ruling.

       (2) Cross-appellants also moved for summary judgment arguing that Cooke’s claims were

barred because the attorney-partners’ decision to move the illegal operation to one operating

legally within law firms was protected by the Business Judgment Rule. The trial court granted this

motion as well. Appellants’ second issue challenges that ruling.

       (3) Cross-appellants filed special exceptions and a plea to the jurisdiction arguing that all

claims within Cooke’s Second Amended Petition, which were pleaded as his own individual

claims, belonged to the Business Entities. Thus, they contended, Cooke lacked standing to bring

the claims. The trial court granted the special exceptions and allowed Cooke to replead. His Third

Amended Petition added the twelve Business Entities as plaintiffs and—for each of Cooke’s

pleaded claims—stated that the claim was now being brought individually and derivatively on

behalf of the Business Entities. Cross-appellants filed a second plea to the jurisdiction, again

arguing that Cooke lacked standing to pursue his individual claims. The trial court denied this

second plea, and that ruling underlies cross-appellants’ first issue.

                                                 –4–
           (4) Cross-appellants moved for summary judgment arguing that all of the Business

Entities’ claims were barred by their respective statutes of limitation.4 The trial court denied this

motion; cross-appellants’ second issue challenges that ruling.

           After some time, the parties agreed to request this permissive appeal, and the trial court

granted their motion. Following jurisdictional briefing, this Court concluded that it had jurisdiction

to hear the appeal.

                                                    THE CROSS-APPEAL
           We begin with cross-appellants’ issues because the plea to the jurisdiction addresses the

threshold issue of standing and the limitations issue addresses which parties are properly before

the trial court.

                                           Plea to the Jurisdiction on Standing
           “A plea to the jurisdiction challenges the court’s authority to decide a case.” Heckman v.

Williamson County, 369 S.W.3d 137, 149 (Tex. 2012). Cross-appellants’ specific challenge was

to Cooke’s standing, which is a question of law that we review de novo. Id. at 150. Standing is a

constitutional prerequisite to suit, and a court has no jurisdiction over a claim made by a plaintiff

who lacks standing to assert it. Id. A party’s standing to sue is not presumed; it must be proved.

Linegar v. DLA Piper LLP (US), 495 S.W.3d 276, 279 (Tex. 2016). The plaintiff bears the burden

of affirmatively demonstrating the trial court’s jurisdiction. Heckman, 369 S.W.3d at 150.

           The test for standing in Texas requires “a concrete injury to the plaintiff and a real

controversy between the parties that will be resolved by the court.” Id. at 154. Our analysis begins

by determining the nature of the alleged wrong. Linegar, 495 S.W.3d at 279. We assess standing

on a claim-by-claim basis. Id. The plaintiff must plead facts demonstrating that he suffered the

injury alleged. Heckman, 369 S.W.3d at 155.

    4
        The limitations motion was titled Motion for Summary Judgment on the Business Entities’ Claims.

                                                                   –5–
           Cross-appellants’ plea to the jurisdiction was directed at the individual claims brought by

Cooke in his 2006 original petition and expanded in his amended petitions. The plea alleged that

Cooke’s individual claims pleaded only an injury to the Business Entities and thus did not belong

to him individually. Cooke was a limited partner of the partnerships in 2006, but “[a] limited

partner does not have standing to sue for injuries to the partnership that merely diminish the value

of that partner’s interest.” Hall v. Douglas, 380 S.W.3d 860, 873 (Tex. App.—Dallas 2012, no

pet.).

           In this Court, Cooke acknowledges that his original claim for breach of fiduciary duty—as

well as his later-added claims for breach of contract, conversion, shareholder oppression, unjust

enrichment, and money had and received—were “premised on Appellees’ decision to stop sharing

partnership proceeds with Mr. Cooke, move all of the assets and business goodwill of the Title

Businesses to law firms without paying fair market value to Cooke, and mislead him on their

actions.” Thus, he concedes, those claims were rooted in “harm done to Mr. Cooke as a partner,

[by] eliminating the value of his partnership interest.” It is readily apparent, therefore, that Cooke

lacked standing to bring these claims individually.5 Id.

           Cooke contends, however, that his 2006 claim for fraud—and his later-added claim for

negligent misrepresentation—presented claims of individual harm distinct from the partnership.

He asserts that cross-appellants falsely told him that the Business Entities needed to be shut down,

thereby “misleading [him] into thinking that he would be fully compensated for the value of the

partnership business that they took to their law firms.” He contends that he was kept away from

the TDI audit, not informed of the “real reasons” for moving operations to the law firms, and

“strung along” to continue managing the companies. He argues that he relied on cross-appellants’

      5
         Although Cooke makes these concessions, he alleges that he had standing in 2006 to bring these claims as derivative claims. We address
that allegation below.

                                                                    –6–
misrepresentations and omissions “on the understanding that he would receive fair compensation

for the conversion of the business to the law firms.”

       Cross-appellants challenge both Cooke’s factual and legal arguments related to the fraud

claim. We must construe the plaintiff’s pleadings liberally, taking all factual assertions as true and

looking to the plaintiff’s intent. Heckman, 369 S.W.3d at 150. Cooke’s pleadings, not his factual

representations on appeal, control our inquiry. Id. And the critical inquiry for our standing analysis

is the injury Cooke pleaded for his fraud claim. In his original petition, Cooke alleged that cross-

appellants assured him “that the assets of the partnerships would be purchased by new entities for

fair market value and that Mr. Cooke would be fully compensated for the value of his partnership

shares.” Cooke alleged that those representations were false and that the individual cross-

appellants “have paid no real compensation to [him] for their theft of the partnership assets and

businesses.” In his first amended petition, Cooke repeated these allegations, adding only that the

cross-appellants “did not pay fair market value for the assets,” as they falsely represented they

would. “Instead, they intentionally and deliberately paid Mr. Cooke nothing for his assets.” Cooke

never pleaded separate, different injuries for his fraud or negligent misrepresentation claims.

Instead, as for all of his claims, he complained that he was not compensated for the value of his

partnership shares and for the partnerships’ assets and businesses. We do not question that Cooke

felt the economic impact of the losses he alleges. However, “[t]hese damages, although cast as

personal damages, belong to the partnership[s] alone.” Hall, 380 S.W.3d at 873.

       We conclude that Cooke’s fraud and negligent misrepresentation claims did not allege an

individual injury. Accordingly, all claims that Cooke filed in 2006—and all claims that he added

later as individual claims—alleged injuries that legally belonged to the Business Entities.

                                                 –7–
          But Cooke argues that he had standing in 2006 to assert any claims that belonged to the

Business Entities.6 He contends that at that time he could “proceed with individual or derivative

claims on behalf of all of these entities seeking recovery for the lost value of his interest.” We

disagree.

          Cooke’s argument is rooted in his interpretation of this statutory provision:

          If justice requires . . . a derivative proceeding brought by a shareholder of a closely
          held corporation may be treated by a court as a direct action brought by the
          shareholder for the shareholder’s own benefit.

TEX. BUS. ORGS. CODE ANN. § 21.563(c)(1) (formerly Tex. Bus. Corp. Act, art. 5.14(L)). Cooke

argues that this statute creates an identity between his individual claims and any derivative claims,

because the latter may be treated as “direct” actions. He states that “[a]lthough it is true that the

claims are injuries to the organization and thus derivative, the statute itself makes a clear distinction

between this direct procedure and a typical derivative proceeding.” And he goes on to posit that,

pursuant to this statute, “the question is not whether the injuries are to Cooke or to the corporation.

It is whether he can sue individually for those corporate injuries as though they were personal.”

(Emphasis in original.) He concludes that section 21.563 permits such a procedure. But it does not.

          Section 21.563 does not turn a derivative claim into an individual claim. This Court has

concluded that although the statute permits a court to “treat a derivative action as a direct action

by a shareholder, the claims remain vested in the corporation.” 2055 Inc. v. McTague, No. 05-08-

01057-CV, 2009 WL 2506342, at *8 (Tex. App.—Dallas Aug. 18, 2009, no pet.) (mem. op.).

Rather than transforming the nature of the plaintiff’s claim, the statute permits the trial court to

award damages in a derivative proceeding directly to the shareholder “if necessary to protect the

interests of creditors or other shareholders of the corporation.” BUS. ORGS. § 21.563(c)(2).

     6
        Cooke also contends he had capacity in 2006 to bring all of the claims belonging to the Business Entities. We need not address Cooke’s
capacity to resolve this issue, so we do not address it.

                                                                    –8–
Accordingly, “[a] trial court’s decision to treat an action as a direct action under Section 21.563(c)

so as to allow recovery to be paid directly to a shareholder plaintiff, as opposed to the corporation,

does not mean that the action is no longer a derivative proceeding.” Swank v. Cunningham, 258
S.W.3d 647, 665 (Tex. App.—Eastland 2008, pet. denied).

       Although Cooke contends that he was able to bring a derivative action in 2006, the fact

remains that he did not. And despite his assertion to the contrary, the question before us is whether

the injuries pleaded were to Cooke or to the Business Entities. We have concluded that the injuries

were to the Business Entities.

       We conclude Cooke lacked standing to assert his individual claims. If a plaintiff lacks

standing to assert a claim, the court lacks jurisdiction over that claim and must dismiss it. Heckman,
369 S.W.3d at 150. The trial court should have dismissed Cooke’s individual claims. It erred by

denying cross-appellants’ plea to the jurisdiction. We sustain cross-appellants’ first cross-point.

                                 Summary Judgment on Limitations
       In their second cross-point, cross-appellants contend that the trial court erred in denying

their summary judgment motion on limitations. We apply well-known standards in our review of

traditional summary judgment motions. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548

(Tex. 1985). The movant has the burden to demonstrate that no genuine issue of material fact exists

and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nixon, 690 S.W.2d at

548–49. We consider the evidence in the light most favorable to the nonmovant. 20801, Inc. v.

Parker, 249 S.W.3d 392, 399 (Tex. 2008). We credit evidence favorable to the nonmovant if

reasonable jurors could, and we disregard evidence contrary to the nonmovant unless reasonable

jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848

(Tex. 2009). Within the framework of these standards, we review the summary judgment de novo.

Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010).

                                                 –9–
           Cross-appellants argue that the derivative claims brought by Cooke on behalf of the

Business Entities are barred by the relevant statutes of limitations. Cooke filed the derivative

claims in his Third Amended Petition on February 24, 2014. That petition alleged that the

underlying business relationship between Cooke and Karlseng began in 1999. The allegations

underlying all of Cooke’s claims took place during 2005 and 2006. And Cooke first filed suit

against appellants in 2006. Thus, cross-appellants urge that all of Cooke’s derivative claims

accrued by 2006 and are barred by their respective four-year or two-year statutes of limitations.7

           Cooke has not challenged cross-appellants’ allegations concerning when claims accrued

either in his response to the motion below or in this Court. Instead, Cooke relies on the doctrine of

relation back, arguing that all of his derivative claims relate back to his original filing in 2006. The

relevant statute provides:

           If a filed pleading relates to a cause of action, cross action, counterclaim, or defense
           that is not subject to a plea of limitation when the pleading is filed, a subsequent
           amendment or supplement to the pleading that changes the facts or grounds of
           liability or defense is not subject to a plea of limitation unless the amendment or
           supplement is wholly based on a new, distinct, or different transaction or
           occurrence.

CIV. PRAC. & REM. § 16.068. Cooke argues that the derivative claims are not based on a new,

distinct, or different transaction or occurrence, and thus section 16.068 operates to prevent the

summary judgment on limitations.8 We agree that Cooke’s derivative claims rely upon the same

facts as the individual claims he pleaded in 2006. Indeed Cooke added his derivative claims by

noting for each individual claim that he “asserts this claim both individually and derivatively on

      7
         Four-year statutes govern limitations for claims of fraud (CIV. PRAC. & REM. § 16.004(a)(4)), breach of fiduciary duty (id. § 16.004(a)(5)),
breach of contract (id. § 16.051), and shareholder oppression (id. § 16.051). Two-year statutes govern claims for negligent misrepresentation (HECI
Expl. Co. v. Neel, 982 S.W.2d 881, 885 (Tex. 1998)), conversion (CIV. PRAC. & REM. § 16.003(a)), money had and received (id. § 16.003(a)), and
unjust enrichment (HECI Expl., 982 S.W.2d at 885). Claims for aiding and abetting and civil conspiracy share a limitations period with their
underlying tort. See Agar Corp., Inc. v. Electro Circuits Int’l, LLC, No. 17-0630, __S.W.3d ___, 2019 WL 1495211, at *5 (Tex. Apr. 5, 2019)
(addressing conspiracy). For purposes of general discussion in this case, we will treat these derivative torts as if they are governed by the longest
statute governing the underlying claims, four years.
      8
        Based on this argument, Cooke relies heavily on Chien v. Chen, 759 S.W.2d 484 (Tex. 1988). Because we resolve the relation-back issue
on different grounds, Chien is not helpful to our analysis.

                                                                      –10–
behalf of each of the entities named in the caption.” Cooke also contends that cross-appellants

have had ample notice of his claims and the facts underlying them, so the derivative claims did not

operate as a surprise.

       However, the Third Amended Petition added twelve new plaintiffs to the case. As cross-

appellants point out, “[o]rdinarily, an amended pleading adding a new party does not relate back

to the original pleading.” Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 121 (Tex. 2004).

       Cross-appellants also argue that because Cooke lacked standing when he filed his original

claims, “there was nothing to which he could relate back.” This argument is dispositive of the

limitations motion. “A court has no jurisdiction over a claim made by a plaintiff who lacks standing

to assert it.” Heckman, 369 S.W.3d at 150. We have concluded that Cooke lacked standing to assert

his original individual claims. For that reason, the trial court never obtained jurisdiction over his

claims. See id. The doctrine of relation back cannot create jurisdiction where none existed. Goss

v. City of Houston, 391 S.W.3d 168, 175 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (because

trial court lacked jurisdiction over plaintiff’s TCHRA suit, original petition was nullity and could

neither toll limitations nor create subject matter jurisdiction over plaintiff’s amended petition);

SJW Prop. Commerce, Inc. v. Sw. Pinnacle Props., Inc., 328 S.W.3d 121, 145 (Tex. App.—Corpus

Christi 2010, pet. denied) (subsequent pleadings cannot give trial court jurisdiction over new

parties retroactive to original filing of suit) (citing Armes v. Thompson, 222 S.W.3d 79, 84 (Tex.

App.—Eastland 2006, no pet.)); see also Burt v. City of New Boston, Tex., No. 5:05CV33, 2006
WL 722102, at *4 (E.D. Tex. Mar. 17, 2006) (amended petition does not relate back to original

petition when original petition did not give court jurisdiction to hear case).

       The parties cite a number of cases concerning relation back that involve the capacity of the

plaintiff. The Texas Supreme Court has clarified the distinction between capacity and standing,

stating that: ‘“A plaintiff has standing when it is personally aggrieved, regardless of whether it is

                                                –11–
acting with legal authority; a party has capacity when it has the legal authority to act, regardless of

whether it has a justiciable interest in the controversy.”’ Austin Nursing Ctr., Inc. v. Lovato, 171
S.W.3d 845, 848–49 (Tex. 2005) (quoting Nootsie, Ltd. v. Williamson Cty. Appraisal Dist., 925
S.W.2d 659, 661 (Tex. 1996)). The Supreme Court acknowledged in Lovato that sometimes the

distinction between these concepts has been “blurred.” Id. at 848, n.1. This is certainly true in cases

involving later-added claims. But Lovato, a survival action, dealt with such claims, and its analysis

focused first on the existence of standing at the time of filing. Id. at 848. The court concluded that

“because the [original] pleadings in this case alleged that the defendants’ negligent conduct injured

[the decedent], her estate had standing to pursue a claim.” Id. at 850. Defects of capacity, on the

other hand, could be remedied later in the litigation. Id. at 853 (“Under those circumstances, the

estate had standing and was ultimately represented by a person with capacity to pursue the claim

on its behalf.”). 9

           Cooke’s problem is one of standing, not capacity. See Hall, 380 S.W.3d at 873. Unlike the

plaintiff in Lovato, who pleaded an injury to the estate, Cooke pleaded only individual injury. But

any injuries he identified were not his own; they were injuries to the Business Entities. Cooke

could not simply “change hats” and create jurisdiction in the trial court long after limitations had

run. We conclude his derivative claims cannot relate back. Thus, those claims are barred by their

respective statutes of limitations, and the trial court should have granted cross-appellant’s motion

for summary judgment. We sustain the cross-appellants’ second issue.

     9
        The Supreme Court affirmed the Austin Court of Appeals’ judgment in Lovato, although by characterizing the plaintiff’s error as “defective
capacity,” id. at 851, the court implicitly corrected the court of appeals, which had concluded that the plaintiff had cured her “defective standing.”
113 S.W.3d 45 (Tex. App.—Austin 2003).

                                                                       –12–
                             REMAINING ISUES AND CLAIMS

       Our analysis of cross-appellants’ plea to the jurisdiction has resolved all of Cooke’s

individual claims against him. Likewise our analysis of cross-appellants’ motion for summary

judgment on limitations has resolved Cooke’s derivative claims against him and the Business

Entities. We need not address appellants’ issues regarding the trial court’s summary judgments on

illegality or the business judgment rule.

       Although some briefing in this case has suggested that Cooke’s derivative claims related

to the tangible assets of the Business Entities could survive this appeal, we disagree. Cross-

appellants’ motion for summary judgment addressed all of the Business Entities’ claims. The trial

court’s Order does not except the tangible-assets claims from the reach of the limitations motion.

And cross-appellants’ jurisdictional briefing in this Court asserted: “Resolution of the Standing

and Limitations Orders in the Defendants’ favor would resolve all of the Plaintiffs’ claims against

the Defendants.” We conclude that those derivative claims related to the Business Entities’

tangible assets are included within the bar of limitations resolved by cross-appellants’ second

issue. There is no need to remand them.

       The single exception to our resolution of all of Cooke’s derivative claims is based on the

trial court’s Order, which specifically states that it “does not address any derivative claims that

Plaintiff H. Jonathan Cooke has asserted derivatively on behalf of TJ Partners I, LLC and TJ

Partners II, LLC.” Those claims apparently remain pending below, so we remand this case for

further proceedings consistent with this opinion.

                                               –13–
                                         CONCLUSION

       We reverse the trial court’s Order denying cross-appellants’ plea to the jurisdiction and

summary judgment on limitations. We dismiss Cooke’s individual claims for lack of jurisdiction,

and we dismiss Cooke’s derivative claims (other than those specifically excepted by this opinion)

because they are barred by limitations. We render judgment that Cooke and the Business Entities

take nothing on all claims subject to this appeal.

                                                     /Bill Pedersen, III/
                                                     BILL PEDERSEN, III
                                                     JUSTICE

180206F.P05

                                                –14–
                              Court of Appeals
                       Fifth District of Texas at Dallas
                                     JUDGMENT

 H. JONATHAN COOKE,                               On Appeal from the 193rd Judicial District
 INDIVIDUALLY AND ON BEHALF OF                    Court, Dallas County, Texas
 ESCROW PARTNERS DALLAS, L.P.;                    Trial Court Cause No. DC-06-02783-L.
 ESCROW PARTNERS DALLAS, GP,                      Opinion delivered by Justice Pedersen, III.
 INC.; ESCROW PARTNERS HOUSTON,                   Justices Brown and Schenck participating.
 L.P.; ESCROW PARTNERS HOUSTON,
 GP. INC.; ESCROW PARTNERS
 AUSTIN, L.P.; ESCROW PARTNERS
 AUSTIN, GP, INC.; ESCROW
 PARTNERS SAN ANTONIO, L.P.;
 ESCROW PARTNERS SAN ANTONIO,
 GP, INC.; TITLE PARTNERS, L.L.P.;
 NORTH AMERICAN MANAGEMENT,
 L.L.P.; TJ PARTNERS I, LLC; AND TJ
 PARTNERS II, LLC, Appellants/Cross-
 Appellees

 No. 05-18-00206-CV        V.

 ROBERT C. KARLSENG; KARLSENG
 LAW FIRM, P.C.; ASHLEY BRIGHAM
 PATTEN; PATTEN & KARLSENG LAW
 FIRM, P.C.; JACQUES YVES LEBLANC;
 AND LEBLANC, PATTEN AND
 KARLSENG LAW FIRM, P.C.,
 Appellees/Cross-Appellants

       In accordance with this Court’s opinion of this date, the order of the trial court is
REVERSED in part. We DISMISS the individual claims of appellant H. JONATHAN COOKE,
and we DISMISS the claims brought by H. JONATHAN COOKE on behalf of ESCROW
PARTNERS DALLAS, L.P.; ESCROW PARTNERS DALLAS, GP, INC.; ESCROW
                                           –15–
PARTNERS HOUSTON, L.P.; ESCROW PARTNERS HOUSTON, GP. INC.; ESCROW
PARTNERS AUSTIN, L.P.; ESCROW PARTNERS AUSTIN, GP, INC.; ESCROW
PARTNERS SAN ANTONIO, L.P.; ESCROW PARTNERS SAN ANTONIO, GP, INC.;
TITLE PARTNERS, L.L.P.; and NORTH AMERICAN MANAGEMENT, L.L.P.

       This cause is REMANDED to the trial court for further proceedings consistent with this
opinion.

        It is ORDERED that appellees ROBERT C. KARLSENG; KARLSENG LAW FIRM,
P.C.; ASHLEY BRIGHAM PATTEN; PATTEN & KARLSENG LAW FIRM, P.C.; JACQUES
YVES LEBLANC; and LEBLANC, PATTEN AND KARLSENG LAW FIRM, P.C. recover
their costs of this appeal from appellant H. JONATHAN COOKE, INDIVIDUALLY and on
behalf of ESCROW PARTNERS DALLAS, L.P.; ESCROW PARTNERS DALLAS, GP, INC.;
ESCROW PARTNERS HOUSTON, L.P.; ESCROW PARTNERS HOUSTON, GP. INC.;
ESCROW PARTNERS AUSTIN, L.P.; ESCROW PARTNERS AUSTIN, GP, INC.; ESCROW
PARTNERS SAN ANTONIO, L.P.; ESCROW PARTNERS SAN ANTONIO, GP, INC.;
TITLE PARTNERS, L.L.P.; NORTH AMERICAN MANAGEMENT, L.L.P.; TJ PARTNERS I,
LLC; AND TJ PARTNERS II, LLC.

Judgment entered this 14th day of August, 2019.

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