Court Opinion

ID: 5132766
Source: CourtListenerOpinion
Date Created: 2021-12-08 07:15:42.955427+00
Date Added: 2024-06-11T08:23:32.027064
License: Public Domain

REVERSE in part; REMAND and Opinion Filed November 30, 2021

                                   S  In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-20-00492-CV

                 GBENGA M. FUNMILAYO, Appellant
                               V.
             ARESCO, LP AND BRANDON LAXTON, Appellees

                On Appeal from the County Court at Law No. 7
                            Collin County, Texas
                    Trial Court Cause No. 007-02520-2019

                         MEMORANDUM OPINION
                Before Justices Osborne, Pedersen, III, and Reichek
                            Opinion by Justice Reichek
      Gbenga M. Funmilayo, representing himself pro se, appeals a summary

judgment rendered by a special judge and memorialized in an order of the trial court.

Funmilayo asserts ten issues generally challenging the special judge’s rulings, the

sufficiency of the summary judgment motions filed by appellees, and the sufficiency

of the evidence supporting those motions. For the reasons that follow, we reverse

the trial court’s judgment in part and remand the cause for further proceedings.
                                   Background

      At issue in this case are various joint venture and subscription agreements

entered into by Funmilayo, his closely held limited liability company, Velandera

Petrophysical Consulting LLC, and Aresco, LP. After disputes arose concerning the

agreements, Aresco filed a declaratory judgment action and a motion for referral of

the case to a special judge.

      In its petition, Aresco sought declarations including (1) Aresco’s conduct and

actions have been proper with respect to Funmilayo and Velandera, (2) Funmilayo

and Velandera have no cause of action against Aresco, and (3) any cause of action

held by Funmilayo or Velandera is time barred. Aresco requested the appointment

of the Honorable John McClellan Marshall as special judge to hear the case pursuant

to a dispute resolution provision in the agreements. In response to the special judge

request, Funmilayo filed a motion to transfer venue from Collin County to Dallas

County. The trial court denied the motion to transfer venue and granted Aresco’s

request to appoint Judge Marshall as special judge.

      Several weeks later, Aresco filed a motion for summary judgment on its

requests for declaratory judgment. In support of the motion, Aresco submitted the

declaration of Aresco’s president, Brandon Laxton, which set forth Laxton’s version

of the facts leading up to the suit. In addition, Aresco stated that “confidential

information memorandums, subscription agreements, purchaser questionnaires, and

joint venture agreements contain[ing] personal information of Defendants” were

                                        –2–
being submitted in support of the motion, but would not be filed of record. Instead,

Aresco stated those documents would be emailed to Judge Marshall and the

defendants separately.

      As grounds for summary judgment, Aresco asserted that “[b]ased on Brandon

Laxton’s declaration, and after reviewing the respective confidential memorandums

and joint venture agreements, there is no evidence Aresco’s conduct has been

improper in any way.” Similarly, Aresco contended that “[b]ased on Brandon

Laxton’s declaration and after reviewing the respective confidential memorandums

and joint venture agreements, Defendants’ causes of action, if any, are timed barred.”

The latter contention was followed by a chart setting out the dates the joint venture

and subscription agreements were made and the limitations periods for eight

different causes of action.

      Five days after Aresco filed its motion for summary judgment, Funmilayo

filed counterclaims against Aresco and cross-claims against Laxton for fraud,

fraudulent inducement, fraudulent misrepresentation, forgery, and breach of

fiduciary duty. Funmilayo brought the claims individually and “derivatively on

behalf of Velandera or, in the alternative, as a direct action.”

      Aresco then filed a supplement to its motion for summary judgment stating

simply that Aresco and Laxton were “mov[ing] for summary judgment based on the

same grounds and evidence” as asserted in the original summary judgment motion.

                                          –3–
Aresco and Laxton also moved to strike any pleading filed by Velandera because the

company was not represented by an attorney.

      In his response to the summary judgment motions, Funmilayo contended there

were disputed material fact issues precluding summary judgment. In support of this

argument, Funmilayo submitted his own declaration which set forth a different

version of the facts leading up to the lawsuit than was stated in Laxton’s declaration.

Funmilayo further contended the discovery rule tolled the limitations period on his

claims because he did not discover the fraud committed by Aresco and Laxton until

more than a year after the agreements were signed. All of the claims brought by

Funmilayo were filed within the limitations periods following the date he asserts he

discovered the injury.

      Finally, with respect to Aresco and Laxton’s request that the court strike any

pleading filed by Velandera, Funmilayo argued Velandera had not filed any

pleadings. Instead, Funmilayo stated his claims were filed on his own behalf and

derivatively as a member of Velandera representing the company’s interests. In their

reply, Aresco and Laxton argued that Funmilayo could not bring a derivative action

on behalf of Velandera because there was no evidence Funmilayo made a demand

on Velandera to take action and the company had refused to do so. They further

argued that Funmilayo could not rely on the discovery rule to toll limitations because

he had discovered his injury within the limitations period.

                                         –4–
       Four days after Aresco and Laxton filed their reply, Judge Marshall signed a

final summary judgment setting forth the following declarations:

             [Aresco’s] conduct and actions have been proper with respect to
       the subscription and joint venture agreements;

             [Funmilayo and Velandera] have no cause of action against
       [Aresco] and its officers and employees;

             Defendant Funmilayo has no standing to assert derivative claims
       on behalf of Velandera, LLC;

               Velandera, LLC is not represented by a licensed attorney; and,

              [Funmilayo and Velandera’s] causes of action, whether asserted
       as direct claims on behalf of an individual plaintiff or as a derivative
       claim brought on behalf of a corporate party, if any, are time barred.

The judgment went on to award Aresco costs and attorney’s fees and stated all other

relief requested was denied.

       Two days after signing the summary judgment, Judge Marshall signed an

“Order of Voluntary Recusal” in which he sua sponte recused himself as special

judge based on “the interest of judicial economy along with the appearance of

propriety.” Following a request by both parties, the trial court signed an order

memorializing the summary judgment as the final verdict of the court.1

   1
     The parties requested the order following a jurisdictional letter from this Court stating that an
appeal in a case referred to a special judge must be from an order of the referring court
memorializing the finality of the case. See Rainier Income Fund I, Ltd. v. Gans, 501 S.W.3d 617,
621 (Tex. App.—Dallas 2016, pet. denied).
                                                –5–
                                           Analysis

        In his appeal, Funmilayo asserts ten issues challenging the summary

judgment. Because Funmilayo makes many of the same arguments in connection

with multiple issues, we will address the arguments necessary to resolve the appeal

as they relate to the individual declarations made by the trial court.

I. Declaration of Proper Conduct and “No Cause of Action.”

        We first address the special judge’s declarations that Aresco’s actions were

proper with respect to the agreements and that Funmilayo has no cause of action

against Aresco, its officers, or its employees. We do not discuss the propriety of

Aresco and Laxton’s request for a declaration of non-liability in tort2 and instead

address the judgment to the extent it concludes Aresco and Laxton are entitled to

judgment as a matter of law on the claims asserted by Funmilayo.

        Funmilayo contends the special judge erred in granting summary judgment

against him because the motion and supplemental motion filed by Aresco and Laxton

failed to negate any of the elements of his causes of action or even reference any of

his claims. We agree.

        Summary judgment in favor of a party against whom claims have been made

is proper only if that party disproves at least one element of each of the opposing

party’s claims or affirmatively establishes each element of an affirmative defense.

   2
       See In re Houston Specialty Ins. Co., 569 S.W.3d 138, 141 (Tex. 2019).
                                              –6–
Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). In the motion

for summary judgment, the movant must expressly present the grounds upon which

the motion is made. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341

(Tex. 1993). A “ground” is a reason the movant is entitled to judgment and is not

presented by mere reference to the summary judgment evidence. McConnell, 858

S.W.2d at 341; Mid S. Constructors, L.C. v. Malone Mortg. Co. Am., Ltd., No. 05-

01-00245-CV, 2002 WL 851739, at *2 (Tex. App.—Dallas May 6, 2002, no pet.).

The nonmovant need not object to a summary judgment motion that presents no

grounds because such a motion is insufficient as a matter of law. McConnell, 858

S.W.2d at 342.

      In this case, the only “ground” asserted for summary judgment on the merits

of Funmilayo’s claims was the statement that Laxton’s declaration and the summary

judgment evidence showed Aresco’s conduct was proper. The motions make no

reference to any element of Funmilayo’s causes of action and there is no argument

as to how the evidence demonstrates Aresco and Laxton are entitled to judgment as

a matter of law. As stated above, a ground for summary judgment is not sufficiently

presented by mere reference to the evidence. Id. at 341.

      Even if we were to liberally construe Aresco and Laxton’s argument that

“there is no evidence Aresco’s conduct has been improper in any way” as a request

for a no-evidence summary judgment, the motions are still deficient. “A no-

evidence motion that only generally challenges the sufficiency of the non-movant’s

                                       –7–
case and fails to state the specific elements that the movant contends lack supporting

evidence is fundamentally defective and cannot support summary judgment as a

matter of law.” Jose Fuentes Co., Inc. v. Alfaro, 418 S.W.3d 280, 283 (Tex. App.—

Dallas 2013, pet. denied) (en banc). Passing references will not suffice to raise no-

evidence summary judgment grounds. Id. at 284. Because Aresco and Laxton’s

motions for summary judgment on the merits of Funmilayo’s claims were

insufficient as a matter of law, the trial court erred in granting judgment in favor of

Aresco and Laxton on that basis.

II. Declaration that Funmilayo’s Claims are Time-Barred.

      Funmilayo asserts the special judge erred in holding his claims were barred

by the applicable statutes of limitations because Aresco and Laxton failed to prove

when his causes of action accrued and did not negate the applicability of the

discovery rule. Aresco and Laxton’s request for summary judgment on the basis of

limitations was nearly identical to its request for summary judgment on the merits.

They simply referred to the summary judgment evidence as demonstrating their

entitlement to judgment. Once again, this is insufficient to support summary

judgment as a matter of law. McConnell, 858 S.W.2d at 341. The only additional

information Aresco and Laxton provided was a chart showing the dates the parties

entered into the joint venture and subscription agreements and the limitations periods

for various causes of action. But the motions provided no argument or authority to

show that Funmilayo’s claims accrued at the time the agreements were made.

                                         –8–
      Furthermore, the burden was on Aresco and Laxton to negate the applicability

of the discovery rule. See Draughon v. Johnson, 631 S.W.3d 81, 90 (Tex. 2021).

Funmilayo contended below that his claims were brought timely because the

discovery rule tolled the accrual date of his claims until he discovered his injury

more than a year after the agreements were made. In response, Aresco and Laxton

argued only that the discovery rule did not apply because Funmilayo discovered his

injury within the limitations period. This argument misapplies the discovery rule.

      The discovery rule applies to injuries that are inherently undiscoverable.

Clark v. Dillard’s, Inc., 460 S.W.3d 714, 721 (Tex. App.—Dallas 2015, no pet.).

“Inherently undiscoverable” does not mean that the claimant failed to discover the

injury within the limitations period. Id. Instead, whether a claim is inherently

undiscoverable is determined on a categorical basis. Id. To be entitled to summary

judgment, Aresco and Laxton were required to show that Funmilayo’s alleged injury

was the type of injury that generally is discoverable by the exercise of reasonable

diligence. Id. The motions for summary judgment made no attempt at such a

showing.

      On appeal, Aresco and Laxton argue the special judge’s limitations ruling

should be upheld because Funmilayo’s fraud claims fail in the face of a clearly

written contract and he has not brought forward any documents to demonstrate a

breach of fiduciary duty. Neither of these arguments was made below and both go

to the merits of Funmilayo’s claims rather than whether the claims are time-barred.

                                       –9–
Because Aresco and Laxton failed to demonstrate they were entitled to summary

judgment on the basis of limitations, the special judge erred in granting judgment on

that ground.

III. Declarations on Funmilayo’s Standing and Pro Se Representation.

      Funmilayo contends Aresco and Laxton failed to carry their burden to

establish he has no standing to bring derivative claims on behalf of Velandera. As

noted by Aresco and Laxton, however, Funmilayo’s notice of appeal was perfected

only as to Funmilayo in his individual capacity, and not in his capacity as a

representative of Velandera’s interests. See McMahan v. Izen, No. 01-20-00233-

CV, 2021 WL 3919219, at *4 n.2 (Tex. App.—Houston [1st Dist.] Sept. 2, 2021,

no pet. h.) (mem. op.). An individual acting in a representative capacity is distinctly

separate from the same person acting as an individual. Id. Accordingly, the only

party before this Court is Funmilayo in his individual capacity. Id.

      Even if we were to conclude that Funmilayo’s notice of appeal constituted a

bona fide attempt to invoke this Court’s jurisdiction over him in his representative

capacity, Funmilayo is before us pro se and he concedes he is not a licensed attorney.

Under Rule 7 of the Texas Rules of Civil Procedure, a person can only represent

himself pro se and cannot litigate rights in a representative capacity. TEX. R. CIV. P.

7; Kaminetzky v. Newman, No. 01-10-01113-CV, 2011 WL 6938536, at *2 (Tex.

App.—Houston [1st Dist.] Dec. 29, 2011, no pet.) (mem. op.). A notice of appeal

filed by a non-attorney in a representative capacity is ineffective. Id.; Premier

                                        –10–
Assocs., Inc. v. Louetta Shopping Ctr. Houston, L.P., No. 01-12-00369-CV, 2012

WL 4243802, at *1 (Tex. App.—Houston [1st Dist.] Sept. 20, 2012, no pet.) (mem.

op.) (per curiam) (notice of appeal filed by corporate representative that is not

licensed attorney ineffective). Because Funmilayo in his representative capacity is

not properly before us, we will not consider any issues challenging the judgment as

it applies to the claims brought by Funmilayo derivatively on behalf of Velandera.

                                    Conclusion

      Based on the foregoing, we need not address the remainder of Funmilayo’s

arguments. We reverse the trial court’s judgment only to the extent it applies to

Funmilayo in his individual capacity and remand the cause to the trial court for

further proceedings consistent with this opinion.

                                           /Amanda L. Reichek/
                                           AMANDA L. REICHEK
                                           JUSTICE

200492F.P05

                                       –11–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

GBENGA M. FUNMILAYO,                           On Appeal from the County Court at
Appellant                                      Law No. 7, Collin County, Texas
                                               Trial Court Cause No. 007-02520-
No. 05-20-00492-CV           V.                2019.
                                               Opinion delivered by Justice
ARESCO, LP and BRANDON                         Reichek. Justices Osborne and
LAXTON, Appellees                              Pedersen, III participating.

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED in part. We REVERSE the trial court's judgment only to the
extent it applies to GBENGA M. FUNMILAYO in his individual capacity. We
REMAND this cause to the trial court for further proceedings consistent with this
opinion.

      It is ORDERED that each party bear its own costs of this appeal.

Judgment entered November 30, 2021

                                        –12–