Court Opinion

ID: 3109059
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:34:37.538962+00
Date Added: 2024-06-11T07:38:26.275644
License: Public Domain

NUMBER 13-09-00192-CV

                            COURT OF APPEALS

                  THIRTEENTH DISTRICT OF TEXAS

                     CORPUS CHRISTI - EDINBURG

ROBERT V. BUCK AND QUEEN ISABELLA
DEVELOPMENT JOINT VENTURE,                                                Appellants,

                                           v.

G.J. PALMER JR.,                                                             Appellee.

                   On appeal from the 370th District Court
                         of Hidalgo County, Texas.

                       MEMORANDUM OPINION
     Before Chief Justice Valdez and Justices Benavides and Vela
             Memorandum Opinion by Justice Benavides

      Appellants, Robert V. Buck (“Buck”) and Queen Isabella Development Joint Venture

(“Queen Isabella”), appeal the trial court’s final summary judgment and two other orders

rendered in favor of appellee, G.J. Palmer Jr. (“Palmer”). By five issues, Buck and Queen

Isabella argue that the trial court erred by: (1) granting summary judgment that Queen

Isabella was dissolved and that the value of Buck’s interest on dissolution was zero; (2)
granting summary judgment on limitations; (3) refusing to require Palmer to produce

personal financial statements; (4) denying Buck and Queen Isabella’s motion to disqualify

Palmer’s counsel; and (5) granting affirmative declaratory relief to Palmer. We affirm.1

                                                I. BACKGROUND

A.       The Creation and Demise of Queen Isabella Development Joint Venture

         On April 27, 1984, Buck, Palmer, John Thobe, and 1629 Service Corporation

(“1629") entered into a joint venture agreement (the “partnership agreement”) for the

development of property in Port Isabel, Texas. The joint venture was named Queen

Isabella Development Joint Venture, and the parties intended to purchase and develop

property in Port Isabel to construct Queen’s Point Marina and Yacht Club. Ownership of

the joint venture was initially distributed as follows: Buck, Palmer, and Thobe each owned

twenty percent, and 1629 owned forty percent.

         Queen Isabella borrowed over $7 million for the marina from 1629's parent

company, Peoples Savings and Loan (“Peoples”), and Palmer and Buck signed guaranties

on the promissory notes. Palmer and Buck also borrowed $200,000 from 1629 to fund

joint venture expenses. Construction began on the marina, and it opened for business.

In 1986, Thobe’s interest was transferred to 1629. Furthermore, in 1986, the marina was

hit by three major storms, causing severe damage.

         Peoples eventually stopped funding the joint venture and demanded payment of its

promissory note. In 1988, the Federal Home Loan Bank Board determined that Peoples

        1
          The sum m ary judgm ent stated that it “dispose[d] of all claim s and all parties” and was appealable.
Palm er raises a conditional cross-issue in his brief, arguing that if the sum m ary judgm ent in his favor is
reversed, this Court should rem and the entire case and allow him to present his claim s for affirm ative relief,
which were not presented to the trial court for a ruling but were foreclosed by the trial court’s rendition of a final
sum m ary judgm ent. Because we affirm the sum m ary judgm ent, we need not reach this conditional cross-
issue. See T EX . R. A PP . P. 47.1 (“The court of appeals m ust hand down a written opinion that is as brief as
practicable but that addresses every issue raised and necessary to final disposition of the appeal.”).

                                                          2
was insolvent and appointed the Federal Savings and Loan Insurance Corporation as its

receiver. The receiver transferred Peoples’s assets to Texas Trust Savings Bank (“Texas

Trust”), and later, CTX Holding Company (“CTX”) succeeded to the interests of Texas

Trust.

         Palmer and Buck defaulted on their personal note from 1629, and Queen Isabella

defaulted on the mortgage. In 1988, Thobe sued Palmer, Buck, and Peoples in Hidalgo

County. Queen Isabella’s creditors also attempted to foreclose on their note secured by

the marina’s property. Palmer and Buck engaged attorney Ramon Garcia to initiate

lawsuits in Hidalgo County against Queen Isabella’s lenders and against design

professionals and contractors who had constructed the marina.             Buck and Palmer,

individually and on behalf of Queen Isabella, added these claims as a third-party action in

Thobe’s lawsuit against them. Eventually, Thobe’s lawsuit was severed into three separate

actions. Additionally, lawsuits were filed in Llano County by Texas Trust against Queen

Isabella, Palmer, and Buck on the mortgage and by 1629 against Palmer and Buck on their

personal loan (the “Llano County litigation”). Attorney John Griffith represented Palmer and

Buck in the Llano County litigation.

         In 1992, in the Llano County litigation, Texas Trust obtained a judgment against

Queen Isabella for $14,865,977.80 and against Buck and Palmer individually for forty

percent of that amount, or $5,946,391.12, under the terms of their guaranty. The judgment

states that Texas Trust had the right to foreclose its lien against Queen Isabella’s property.

1629 also obtained a personal judgment against Buck and Palmer in 1994. The Llano

County litigation was ultimately settled after trial on September 29, 2005, and the

negotiation of this settlement is the basis for the current dispute.

B.       The Dispute Below

                                              3
       The current lawsuit began on April 19, 1996, as a suit by Garcia against Palmer for

legal fees. Buck was added as a defendant on June 13, 1997. Then, on July 22, 1997,

Palmer filed a cross-claim against Buck. Palmer asserted that on various dates in 1993,

he and Buck met to discuss the pending litigation, and Buck promised that if Palmer could

arrange for a complete release of liability for Buck from the joint venture’s indebtedness,

Buck would transfer his interest in Queen Isabella to Palmer. Palmer alleged that Buck

was not willing to assume any new liabilities and wanted to dissolve Queen Isabella as

early as 1993, but at the very least by 1995, Buck made it clear that he had no desire to

continue the joint venture. Palmer claimed that he thereafter negotiated a settlement of

the Llano County litigation, which included a complete release of Buck’s liability on Queen

Isabella’s indebtedness. The settlement agreement also provided for a transfer of 1629's

interest in Queen Isabella to Palmer.

       Palmer alleged that after the settlement agreement was negotiated with Queen

Isabella’s creditors, Buck refused to transfer his interest in Queen Isabella. Thus, Palmer

sued Buck for breach of an oral agreement to transfer Buck’s interest, requested specific

performance, and requested a declaration that “Buck is equitably required to transfer the

twenty percent interest in [Queen Isabella] which Buck alleges he still owns to Palmer . . . .”

Palmer also sought a declaratory judgment, asking the court to declare the “interest of the

said Palmer and Buck in Queen Isabella Development Joint Venture and in relation to the

obligation, if any, for attorneys’ fees alleged by Plaintiffs and Counter Defendants, Ramon

Garcia and Ramon Garcia, P.C.”

       Buck denied the existence of the oral contract, asserted several defenses to

enforcement of the alleged contract, and also asserted cross-claims against Palmer. Buck

claimed that to induce him into settling the Llano County litigation, Palmer represented that

                                               4
he would be responsible for executing a $600,000 promissory note secured by Queen

Isabella’s property in favor of CTX. Buck alleged that this representation was false, and

instead of executing the promissory note individually, Palmer caused Queen Isabella to pay

the note. As a result of this deceit, Buck alleged that Palmer acquired 1629's interest in

Queen Isabella, making him the owner of eighty percent of Queen Isabella. Buck asserted

that the joint venture continued to do business after settling the Llano County litigation in

1995, and in 1998, Palmer caused Queen Isabella to execute a promissory note payable

to himself secured by all of Queen Isabella’s real property. Palmer then assigned the note

and collateral to Texas State Bank (“TSB”) to collateralize his own promissory note in the

amount of $780,000. Finally, Palmer caused Queen Isabella to sell a portion of the Port

Isabel property to Port Isabel Land Company, Ltd. (“PILCO”), which was partly owned by

Palmer.   Thus, Buck claimed that Palmer had engaged in self-dealing with Queen

Isabella’s property.

       Buck sought a declaration that he was still the owner of an interest in Queen

Isabella and expressly requested the court to “determine the fair value of the interest in

[Queen Isabella] owned by him.” Buck also sought rescission of the agreement to transfer

1629's interest in Queen Isabella to Palmer and the transfer of Queen Isabella’s property

to PILCO in 1998. Buck asserted that Palmer: (1) committed constructive fraud and

common law fraud; (2) breached the partnership agreement; (3) breached his fiduciary

duties to Queen Isabella and to Buck; (4) committed securities fraud; and (5) conspired

with Garcia, Griffith, and his other attorney, Samuel McDaniel, to cause Garcia to sue Buck

for attorney fees. Buck requested injunctive relief, a receivership, an accounting, a

constructive trust, disgorgement of profits, and winding up of the partnership. The trial

court severed Garcia’s claims for attorney fees from Buck and Palmer’s cross-claims, and

                                             5
the cross-claims proceeded as trial court cause number C-2058-96-G(1).

C.     Buck Seeks Production of Palmer’s Financial Statements

       Buck deposed a TSB representative regarding transactions between Queen Isabella

and Palmer, attempting to prove that Palmer used Queen Isabella’s property to benefit

himself in violation of duties Palmer owed to Queen Isabella and to Buck. Buck obtained

a supboena and requested that TSB produce “loan documents” relating to Queen Isabella,

which included financial statements.

       At the deposition pursuant to the subpoena, TSB produced Palmer’s personal

financial statements.   Palmer’s counsel objected that the financial statements were

confidential. The parties agreed to allow the court reporter to copy the documents and to

submit them to the court under seal. On January 27, 2005, Buck filed a motion to overrule

Palmer’s objections to the production of his financial statements, and the trial court heard

the motion on March 7, 2006. The court stated on the record that it would review the

documents. Buck reminded the court of his request at various hearings throughout 2008,

but the trial court kept the matter under advisement.

D.     Buck Seeks to Disqualify Palmer’s Counsel

       On January 28, 2008, attorney Sarah Pierce Cowen filed a notice of appearance in

the case on Palmer’s behalf. On July 28, 2008, Buck moved to disqualify Cowen, alleging

that Cowen was associated with Griffith’s firm, Griffith & Garza, because she was at one

time “of counsel” to that firm and had signed her name on pleadings filed by that firm in

other cases. Because Griffith represented both Buck and Palmer in the Llano County

litigation, Buck asserted that Cowen’s association with Griffith’s firm precluded her from

representing Palmer. The trial court held a hearing on the motion to disqualify on August

19, 2008, and took the matter under advisement.

                                             6
E.     Palmer Moves for Summary Judgment on Dissolution of Queen Isabella

       On September 15, 2008, Palmer filed two separate motions for summary judgment.

The first motion was titled “Palmer’s No Evidence and Traditional Motions for Summary

Judgment Based on Dissolution as to All Causes of Action by Robert V. Buck and Queen

Isabella Development Joint Venture.” In this motion, under separate headings, Palmer

moved for summary judgment under the no-evidence standard and under the traditional

summary judgment standard. The no-evidence argument stated the no-evidence standard

and then argued: “In this case there is no evidence that buck [sic] had an interest in the

partnership after dissolution. Consequently, Buck is not entitled to prevail on any of his

claims.” The next heading contained the traditional summary judgment standard and

argued:

       In this [sic] present case there is no genuine dispute that dissolution occurred
       of the Queen Isabella Development Joint Venture some time prior to the
       filing date of this lawsuit. Therefore, Buck’s remedy was to receive the value
       of his interest in the partnership when it was dissolved. It is also undisputed
       that[,] because of the massive debt[,] his value was no more than zero
       dollars.

       Under another heading titled “Facts and Argument,” Palmer set forth the factual

background for the motion and the applicable law. Palmer argued that the Texas Uniform

Partnership Act (“TUPA”) applied to the joint venture. See Act of May 9, 1961, 57th Leg.,

R.S., ch. 158, 1961 TEX . GEN . LAW S 289, expired January 1, 1999, Act of May 31, 1993,

73rd Leg., R.S., ch. 917, 1993 TEX . GEN . LAW S 3887 (formerly TEX . REV. CIV. STAT . ANN .

art. 6132b).2 Palmer asserted that on various dates in 1993, 1995, and 1996, Buck

expressed a desire to dissolve the partnership, which caused a dissolution of the

partnership. Palmer argued that under TUPA, the remaining partners may elect to

      2
          W e will refer to sections within form er article 6132b as “TUPA § __” for ease of reference.

                                                      7
continue with the partnership business, but the powers and duties from the relationship

terminate except for those necessary to complete a winding up of the partnership. Thus,

once Buck expressed his will to dissolve the partnership, Palmer owed him no further

duties except with respect to winding up the partnership’s existing obligations. Palmer

argued that Buck was entitled to the fair value of his interest at the date of dissolution,

which, because of the amount of debt owed by the partnership, was zero. For these

reasons, Palmer argued that there were no causes of action that Buck could assert against

Palmer for his actions after dissolution of the partnership. Palmer’s motion referred to a

separately filed appendix containing evidence supporting the motion.

       Buck filed a response to the motion. He argued that he did not cause a dissolution,

but even if he did, the partnership continued for the purpose of winding up. Thus, he

claimed that Palmer’s fiduciary duty was continuing. He argued that to wind up the

partnership, the partnership business must be liquidated, and if a surplus remains after the

discharge of partnership liabilities, it must be distributed to the partners in accordance with

their capital accounts and profit sharing ratios. Thus, the partners share in the risks and

rewards of the post-dissolution appreciation or depreciation of the partnership’s assets.

Buck then argued that he was entitled to elect whether to liquidate the partnership or to

have his interest valued at the date of dissolution, and he did not elect to have his interest

valued at the date of dissolution.

       Buck attached evidence supporting his response. Buck also filed objections and

moved to strike Palmer’s summary judgment evidence. These objections went to the

admissibility of Palmer’s summary judgment evidence and not to the form or content of the

motion itself.

F.     Palmer Moves for Summary Judgment on Limitations

                                              8
       Palmer’s second motion for summary judgment was titled “Palmer’s No Evidence

and Traditional Motions for Summary Judgment as to All Causes of Action by Robert V.

Buck and Queen Isabella Development Joint Venture.” As with the first motion, Palmer set

out the no-evidence and traditional standards for summary judgment under separate

headings. Palmer argued that Buck bore the burden to show that he asserted his claims

in court after the partnership ceased doing the business intended within the applicable

statute of limitations. Palmer then argued that Buck’s claims were barred under the various

limitations periods applicable to the claims, arguing that Buck’s claims accrued in 1987,

when the partnership ceased doing business. Palmer filed a separate appendix containing

evidence supporting the motion.

       Buck responded and disputed that limitations barred his claims and provided

evidence supporting the response. Buck further objected to Palmer’s summary judgment

evidence, but he did not object to the form of the motion.

G.     The Trial Court Issues Its Rulings

       On January 7, 2009, the trial court ruled on all the motions that are the subject of

the current appeal.   It denied Buck’s motion to overrule Palmer’s objections to the

production of his financial statements and sustained Palmer’s objections. It also denied

Buck’s motion to disqualify Cowen. Neither of these orders stated a basis for the trial

court’s ruling.

       The same day, the trial court granted Palmer’s motions for summary judgment and

denied all of Buck’s objections to Palmer’s summary judgment evidence. This order,

however, stated the following:

            The court GRANTS the following Palmer Motions for Summary
       Judgment on both No Evidence grounds and Traditional grounds:

                                            9
       1.     Palmer’s No Evidence and Traditional Motions for Summary
              Judgment Based on Dissolution as to All Causes of Action by Robert
              V. Buck and Queen Isabella Development Joint Venture; and

       2.     Palmer’s No Evidence and Traditional Motions for Summary
              Judgment Based on the Statute of Limitations as to All Causes of
              Action by Robert V. Buck and Queen Isabella Development Joint
              Venture.

              The Court hereby GRANTS Judgment for G.J. Palmer, Jr.

               Further the Court grants judgment that G.J. Palmer, Jr. is the sole
       owner of Queen Isabella Development Joint Venture and all properties held
       in its name whether real or personal. . . .

               The Court finds that Queen Isabella Development Joint Venture was
       dissolved, at the latest, in June 1995, that the value of Robert V. Buck’s
       interest in the venture at dissolution was zero, that G.J. Palmer, Jr. was
       entitled to carry on the business of the venture after dissolution, and that
       Buck’s claims are barred by the Statute of Limitations.

              The Court orders Robert V. Buck and Queen Isabella Development
       Joint Venture take nothing by their suit against Palmer, and that Palmer
       recover costs of court.

This appeal ensued.

                                II. MOTION TO DISQUALIFY

       By their fourth issue, Buck and Queen Isabella argue that the trial court erred by

denying their motion to disqualify Cowen. Buck and Queen Isabella assert that Griffith,

who represented both Buck and Palmer in the Llano County litigation, had a conflict of

interest once Buck and Palmer disputed the terms of the 1995 settlement agreement.

Because Cowen was “associated” with Griffith’s firm, Buck and Queen Isabella reason that

Cowen also has a conflict of interest under rule 1.09(b) of the Texas Disciplinary Rules of

Professional Conduct. See TEX . DISCIPLINARY R. PROF’L CONDUCT 1.09(b), reprinted in TEX .

GOV’T CODE ANN ., tit. 2, subtit. G app. A (Vernon Supp. 2008) (TEX . STATE BAR R. art. X,

                                            10
§ 9). Buck and Queen Isabella argue that the judgment must be reversed and remanded

because Cowen’s participation in the summary-judgment proceedings tainted them beyond

repair. Palmer claims that Buck and Queen Isabella waived this argument by waiting too

long to file the motion to disqualify. We agree with Palmer.

A.     Standard of Review and Applicable Law

       The denial of a motion to disqualify is reviewed for an abuse of discretion. See

Metro. Life Ins. Co. v. Syntek Fin. Corp., 881 S.W.2d 319, 321 (Tex. 1994) (per curiam).

“The test for abuse of discretion is whether the trial court acted without reference to any

guiding rules or principles, or acted in an arbitrary or unreasonable manner.” Id. Trial

courts have no discretion in determining what the law is or applying the law to the facts.

WCM Group, Inc. v. Brown, 305 S.W.3d 222, 229 (Tex. App.–Corpus Christi 2009, pet.

dism’d by agr.). “A trial court does not abuse its discretion when it bases a decision on

conflicting evidence—rather, a factual decision is an abuse of discretion only if there is no

evidence to support the decision.” Id. In this regard, we may not substitute our own

judgment for the trial court’s judgment. In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex.

2002) (orig. proceeding) (per curiam). Likewise, we will not set aside the trial court’s

finding “unless it is clear from the record that the trial court could only reach one decision.”

Id. When the trial court does not issue findings of fact in conjunction with a ruling on a

motion to disqualify, we imply all findings necessary to support the ruling. See In re Hoar

Const., L.L.C.    256 S.W.3d 790, 795 (Tex. App.–Houston [14th Dist.] 2008, orig.

proceeding) (reviewing an implied finding that a party did not waive a motion to disqualify

opposing counsel).

        “‘Disqualification is a severe remedy.’” Id. (quoting Spears v. Fourth Court of

                                              11
Appeals, 797 S.W.2d 654, 656 (Tex. 1990) (orig. proceeding)). When deciding a motion

to disqualify, trial courts must “strictly adhere to an exacting standard to discourage a party

from using the motion as a dilatory tactic” because disqualification of counsel “can result

in immediate and palpable harm, disrupt trial court proceedings, and deprive a party of the

right to have counsel of choice.” Id.

       It is well established that a party can waive its motion to disqualify opposing counsel

by failing to timely file the motion. See Turner v. Turner, 385 S.W.2d 230, 236 (Tex. 1965);

see also In re EPIC Holdings, Inc., 985 S.W.2d 41, 52 (Tex. 1998); Vaughan v. Walther,

875 S.W.2d 690, 690 (Tex. 1994) (orig. proceeding) (per curiam). “In determining whether

a party has waived the complaint, the court will consider the length of time between when

the conflict became apparent to the aggrieved party and when the aggrieved party filed the

motion to disqualify.” In re Butler, 987 S.W.2d 221, 224-25 (Tex. App.–Houston [14th Dist.]

1999, orig. proceeding). We must also consider any evidence that indicates the motion is

being filed not due to a concern arising from the conflict of interest alleged but as a dilatory

trial tactic. See Wasserman v. Black, 910 S.W.2d 564, 568 (Tex. App.–Waco 1995, orig.

proceeding) (citing Spears, 797 S.W.2d at 656)).

B.     Date the Conflict Became Apparent

       The parties dispute when Cowen’s conflict became apparent. Cowen filed her

notice of appearance in this case on January 28, 2008, signing it as “The Law Offices of

Sarah Pierce Cowen.” Buck argues that his lead counsel, Charles Gorham, did not

become aware that Cowen was associated with Griffith’s law firm until June 2008, when

the relationship between Cowen and Griffith was disclosed in open court. Buck then filed

its motion to disqualify Cowen on July 28, 2008. Buck argues that, therefore, his motion

                                              12
to disqualify was timely.

        Palmer responds that Gorham’s co-counsel in this case, Francisco Rodriguez, was

aware that Cowen was participating in the case in January 2008 and was, at that time,

aware of Cowen’s relationship with Griffith’s firm.3 It is undisputed that in January 2008,

Rodriguez was co-counsel with Gorham representing Buck in this litigation. The notice of

appearance was admitted as an exhibit at the hearing on the motion to disqualify, and it

states that it was served on Rodriguez on January 24, 2008.

        Gorham questioned Cowen about his own knowledge of the conflict and told the

court that he would put on testimony that no one on Buck’s behalf knew of the association

between Cowen and Griffith until June 2008. The following exchange occurred:

        [Buck’s Lead Counsel]:              How would you expect me, as a lawyer, to know
                                            you were associated with the Griffith & Garza
                                            law firm in other matters?

        [Cowen]:                            Because your co-counsel is Frank Rodriguez,
                                            and I have known him for years and litigated
                                            against him for years, and he is familiar with my
                                            personal situation.

        [Buck’s Lead Counsel]:              And so what you are telling me is that Mr.
                                            Rodriguez as local counsel, knew of your
                                            involvement, and so you are attributing that to
                                            Mr. Buck?

        [Cowen]:                            That’s the first thing that comes to mind. I don’t
                                            know how you would learn it, but I know Mr.
                                            Rodriguez is familiar with that.

        3
           Palm er argued below and argues on appeal that Cowen was m erely “of counsel” to Griffith & Garza
a few years ago and now only serves as co-counsel on certain cases. Cowen testified that she does not have
a perm anent office, but rather, uses her co-counsels’ office space in cases with those firm s. She stated that
Griffith & Garza have allowed her to use an em pty office and desk at their firm ’s office. Cowen explained that
she does not share attorney fees with Griffith & Garza, does not utilize the firm ’s staff or their phone lines for
this case, does not have access to the firm ’s server, and has not discussed the case with Griffith. Because
of our disposition of the waiver argum ent, we need not decide if this type of association would require Cowen’s
disqualification. See T EX . R. A PP . P. 47.1.

                                                       13
No other evidence was presented on Rodriguez’s knowledge of Cowen’s association with

Griffith.

        Buck argues that this evidence is insufficient because it does not delineate what

Rodriguez supposedly knew or the time frame of his knowledge; thus, there is no

knowledge to impute to Buck. Additionally, citing In re EPIC Holdings, Buck argues that

even though Rodriguez knew of the connection, he did not communicate it to Gorham;

therefore, waiver should not be based on this information. 985 S.W.2d at 52. We

disagree.

        First, Cowen’s testimony that Rodriguez knew her and litigated against her “for

years” and was aware of her situation is some evidence that Rodriguez knew that Cowen

had been associated with Griffith’s firm. Furthermore, the questioning, in context, shows

that Cowen meant that Rodriguez knew about the facts giving rise to the alleged conflict

when Cowen appeared in the lawsuit—she expressly stated that she believed the

knowledge should be imputed to Buck and to Gorman prior to the June 2008 hearing,

where Gorman claimed to have first learned of the conflict. Because the trial court did not

issue any findings of fact, we presume that the trial court determined that Rodriguez knew

about Cowen’s association with Griffith in January 2008, and because this finding was

supported by evidence in the record, it was not an abuse of discretion. See WCM Group,

Inc., 305 S.W.3d at 229; In re Hoar Const., L.L.C. 256 S.W.3d at 795.

        Second, an attorney’s knowledge or notice that is acquired during the existence of

the attorney-client relationship is imputed to the client. See Am. Flood Research Ins. v.

Jones, 192 S.W.3d 581, 584 (Tex. 2006) (per curiam); Lehrer v. Zwerneman, 14 S.W.3d
14
775, 778 (Tex. App.–Houston [1st Dist.] 2000, pet. denied). In re EPIC Holdings does not

render this rule inapplicable in this case. In that case, Anderson sued EPIC Holdings and

its chief executive officer, George, for breaching fiduciary duties to EPIC Holdings’s

shareholders by exorbitantly compensating executives in connection with the acquisition

of EPIC Holdings by HealthTrust, Inc.—The Hospital Company. In re EPIC Holdings, Inc.,
192 S.W.3d at 43-44. The law firm of Johnson & Gibbs represented George and EPIC

Holdings in the acquisition and negotiation of executive compensation. Id. at 45-46.

       One of the Johnson & Gibbs lawyers who worked on the merger, Jakes Jordaan,

left Johnson & Gibbs to form the firm of Jordaan, Howard & Pennington. Id. at 45. When

Anderson filed suit against George and EPIC Holdings, she was represented by James E.

Pennington, a member of Jordaan’s firm. Id. at 46. George and EPIC Holdings, however,

were represented by Jerry R. Selinger, who was unaware of the connection. Id. at 46. The

Texas Supreme Court determined that Pennington was disqualified and that George and

EPIC Holdings did not waive their motion to disqualify, noting that:

       Anderson argues that EPIC and George waived disqualification of her
       counsel by waiting over four months after suit was filed to raise the issue and
       seven more months to file their motions. We think EPIC and George have
       satisfactorily explained these delays. For four months after Anderson filed
       suit defendants’ counsel was unaware of the connection between attorney
       Pennington’s firm and Johnson & Gibbs. Johnson & Gibbs, who was
       representing EPIC in the HealthTrust merger, recognized the connection but
       did not communicate it to defendants’ litigation counsel.

Id. at 52.

       In re EPIC Holdings is distinguishable because the party’s attorney who had

knowledge of the conflict was not representing the party in the litigation where

disqualification was asserted. Id. That is not the case here: Rodriguez was Gorham’s co-

                                             15
counsel representing Buck in this lawsuit at the time that Cowen appeared on behalf of

Buck’s opponent. Thus, Rodriguez’s failure to communicate the conflict to Buck’s lead

counsel, Gorham, does not excuse the delay in filing the motion to disqualify.

C.     Length of Delay and Prejudice to Palmer

       Because we hold that Buck acquired knowledge of the conflict in January 2008, the

delay in filing the motion amounts to nearly seven months. Aside from his argument that

Gorham was unaware of the conflict, Buck has offered no other explanation to justify the

seven-month delay in filing the motion to disqualify. The Texas Supreme Court has held

that an unexplained delay of six and a half months before filing a motion to disqualify

waives the motion. See Vaughan, 875 S.W.2d at 691. The delay in this case was even

longer. See id.

       Nevertheless, Buck argues that Palmer was required to present evidence that he

was prejudiced by the delay and points out that the motion was not filed on the eve of trial,

again citing In re EPIC Holdings. See 985 S.W.2d at 53. The Texas Supreme Court has

never held that proof of prejudice is required to sustain a claim of waiver under these

circumstances, see Spears, 797 S.W.2d at 656 n.1, and In re EPIC Holdings does not

state as much. See 985 S.W.2d at 53. Rather, in that case, after finding that EPIC

Holdings and George sufficiently explained their delay in filing the motion to disqualify, the

court simply noted that Anderson had not suffered any prejudice as a result of the delay.

See id. (“It is of some importance that in the eleven months before the motions to disqualify

were filed almost no discovery was conducted except on disqualification issues. The delay

in filing the motions did not prejudice Anderson’s prosecution of her claims.”).

       We read In re EPIC Holdings as following the traditionally-accepted rationale that

                                             16
reviewing courts must apply an exacting standard when reviewing motions to disqualify,

which are disfavored, and evidence that a party is using the motion as a dilatory tactic is

merely relevant to the determination of waiver. Grant v. Thirteenth Court of Appeals, 888
S.W.2d 466, 468 (Tex. 1994) (“The untimely urging of a disqualification motion lends

support to any suspicion that the motion is being used as a tactical weapon.”). In fact, in

cases involving a lengthy delay, such as the one here, courts have refused a motion to

disqualify without discussing whether trial was impending. See HECI Exploration Co. v.

Clajon Gas Co., 843 S.W.2d 622, 628-29 (Tex. App.–Austin 1992, writ denied); Conoco

Inc. v. Baskin, 803 S.W.2d 416, 420 (Tex. App.–El Paso 1991, orig. proceeding) (noting

that an eleven-month delay, without regard to a trial setting, was enough to find waiver, and

then recognizing that a four-month delay would also support a waiver because although

it was shorter, it was more significant in the context of the close trial date).

        Regardless, even if we applied In re EPIC Holdings the way Buck proposes, we

would still find waiver. There, the Texas Supreme Court noted that no activity, other than

discovery related to disqualification, had occurred during the delay, and therefore,

Anderson was not prejudiced. See 985 S.W.2d at 53. That is not the case here. Cowen

appeared in January 2008, and the record reflects that there was substantial activity in the

case on the merits between the time that Cowen appeared as Palmer’s counsel and the

time the motion to disqualify was filed.

        For example, the docket sheet shows that the case was set for trial in April 2008 and

that the parties were preparing for trial.4 Palmer moved to exclude Buck’s experts at the

        4
         Buck concedes in his brief that the case was scheduled for a jury trial on May 17, 1999; October 18,
2004; March 14, 2005; October 9, 2007; February 11, 2008; April 14, 2009; and October 20, 2009, and those
dates were continued.

                                                     17
end of March 2008, and Buck filed his trial exhibits, his list of trial witnesses, and a motion

in limine on April 1, 2008. The April trial date was passed, but not without the parties

having prepared for trial. Additionally, the docket sheet shows that Palmer filed a motion

for no-evidence and traditional summary judgment5 on March 19, 2008 and that this motion

was heard on April 10, 2008. Furthermore, Palmer had filed special exceptions, and these

were heard on June 10, 2008. Cowen appeared on Palmer’s behalf at this hearing. Thus,

even if we were required to examine the proceedings between Cowen’s appearance and

the filing of the motion to disqualify, we could not say that Palmer was not prejudiced.

Accordingly, we hold that the trial court did not abuse its discretion in refusing to disqualify

Cowen as Palmer’s attorney, and we overrule Buck’s fourth issue.

                                          III. SUMMARY JUDGMENT

         By their first issue, Buck and Queen Isabella argue that the trial court erred by

granting Palmer’s no-evidence and traditional motions for summary judgment on

dissolution.          They argue that Palmer’s motion was based on a defensive

issue—dissolution—and relied on evidence Palmer attached to the motion, which

converted it into a traditional motion for summary judgment. Furthermore, Buck and

Queen Isabella argued that Palmer failed to conclusively establish dissolution on the dates

alleged and that the value of Buck’s interest was zero. Finally, they argue that to the extent

the burden shifted to them, they presented evidence to defeat the motion. For the reasons

that follow, we disagree.6

A.       Standards of Review

         5
             This particular m otion was not included in the record on appeal, but it is reflected on the docket
sheet.

         6
            Because we affirm the sum m ary judgm ent on dissolution grounds, we need not address the
lim itations argum ents. See T EX . R. A PP . P. 47.1.

                                                        18
        The trial court granted both of Palmer’s motions for summary judgment. Buck

argues that the trial court made factual findings in the judgment, including that: (1) Queen

Isabella was dissolved at the latest in June 1995; (2) Buck’s interest at the date of

dissolution was zero; (3) Palmer was entitled to carry on the business of the venture; and

(4) Buck’s claims were barred by limitations. Buck argues that these factual findings are

inappropriate because, as a matter of form, findings and conclusions should not be

contained in the judgment itself. We agree. Thus, we do not consider the factual findings

set out in the judgment. See TEX . R. CIV. P. 299a; IKB Indus. v. Pro-Line Corp., 938
S.W.2d 440, 441 (Tex. 1997) (“The trial court should not make, and an appellate court

cannot consider, findings of fact in connection with a summary judgment.”).7

        We review the grant of summary judgment as we would a summary judgment that

failed to state the grounds for its rulings. Under these circumstances, we must affirm the

judgment if any of the grounds alleged in the motions were meritorious. W. Invs., Inc. v.

Urena, 162 S.W.3d 547, 550 (Tex. 2005). The standard of review we apply is determined

by whether the motion was brought on no-evidence or traditional grounds. See TEX . R. CIV.

P. 166a(c), (i); see also Ortega v. City Nat’l Bank, 97 S.W.3d 765, 771 (Tex. App.–Corpus

Christi 2003, no pet.) (op. on reh’g).

         7
            In their fifth issue, Buck and Queen Isabella argue that the trial court erred by declaring in the
judgm ent that Palm er is the sole owner of Queen Isabella and all properties held in its nam e whether real or
personal. Buck and Queen Isabella argue that Palm er did not m ove for sum m ary judgm ent on his affirm ative
claim s for declaratory relief, and m oreover, Palm er did not include a request for this type of declaratory relief
in his pleadings. W e do not read this statem ent in the judgm ent as a grant of declaratory relief, but rather,
as a factual finding that results from the final sum m ary judgm ent on Buck’s claim s. Sim ply put, because the
trial court granted sum m ary judgm ent that the partnership was dissolved as to Buck, and Palm er owned the
rem aining interest, Palm er becam e the sole owner of the partnership. As we stated above, however, we m ust
disregard the factual findings because they are inappropriately contained in the sum m ary judgm ent order.
Because we are affirm ing the sum m ary judgm ent without considering the factual findings, Buck and Queen
Isabella have not shown any harm suffered by the inclusion of this language. See T EX . R. A PP . P. 44.1
(requiring appellant to show that the error probably caused the rendition of an im proper judgm ent). Thus, we
overrule Buck and Queen Isabella’s fifth issue.

                                                        19
         A no-evidence summary judgment is equivalent to a pretrial directed verdict, and we

apply the same legal sufficiency standard on review. Mack Trucks, Inc. v. Tamez, 206
S.W.3d 572, 582 (Tex. 2006); Ortega, 97 S.W.3d at 772. Once an appropriate motion for

no-evidence summary judgment is filed, the burden of producing evidence is entirely on

the non-movant; the movant has no burden to attach any evidence to the motion. TEX . R.

CIV. P. 166a(i). We may not consider any evidence presented by the movant unless it

creates a fact question. Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004); Newkumet

v. Allen, 230 S.W.3d 518, 521 (Tex. App.–Eastland 2007, no pet.).

         To defeat a no-evidence motion for summary judgment, the non-movant must

merely produce a scintilla of probative evidence to raise a genuine issue of material fact.

Ortega, 97 S.W.3d at 772. “Less than a scintilla of evidence exists when the evidence is

‘so weak as to do no more than create a mere surmise or suspicion of a fact.’” Id. (quoting

Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). More than a scintilla exists

when the evidence “rises to a level that would enable reasonable and fair-minded people

to differ in their conclusions.” Id. (citing Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex.

1994)). In determining whether the non-movant has met its burden, we review the

evidence in the light most favorable to the non-movant, crediting such evidence if

reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could

not. Tamez, 206 S.W.3d at 582; City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.

2005).

         We review the trial court’s granting of a traditional motion for summary judgment de

novo. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003);

Branton v. Wood, 100 S.W.3d 645, 646 (Tex. App.–Corpus Christi 2003, no pet.). When

                                              20
reviewing a traditional summary judgment, we must determine whether the movant met its

burden to establish that no genuine issue of material fact exists and that the movant is

entitled to judgment as a matter of law. TEX . R. CIV. P. 166a(c); Sw. Elec. Power Co. v.

Grant, 73 S.W.3d 211, 215 (Tex. 2002); City of Houston v. Clear Creek Basin Auth., 589
S.W.2d 671, 678 (Tex. 1979). The movant bears the burden of proof in a traditional motion

for summary judgment, and all doubts about the existence of a genuine issue of material

fact are resolved against the movant. See Sw. Elec. Power Co., 73 S.W.3d at 215. We

take as true all evidence favorable to the nonmovant, and we indulge every reasonable

inference and resolve any doubts in the nonmovant’s favor. Valence Operating Co. v.

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

      We will affirm a traditional summary judgment only if the record establishes that the

movant has conclusively proved its defense as a matter of law or if the movant has

negated at least one essential element of the plaintiff’s cause of action. IHS Cedars

Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004); Am.

Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); Clear Creek Basin Auth., 589
S.W.2d at 678. A matter is conclusively established if reasonable people could not differ

as to the conclusion to be drawn from the evidence. City of Keller, 168 S.W.3d at 816.

Only when the movant has produced sufficient evidence to establish its right to summary

judgment does the burden shift to the plaintiff to come forward with competent

controverting evidence raising a genuine issue of material fact with regard to the element

challenged by the defendant. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.

1999); see Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

      When a party moves for summary judgment under both rules 166a(c) and 166a(i)

                                           21
of the Texas Rules of Civil Procedure, we will first review the trial court’s judgment under

the standards of rule 166a(i). Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.

2004). If the appellant failed to produce more than a scintilla of evidence under that

burden, then there is no need to analyze whether appellee’s summary judgment proof

satisfies the rule 166a(c) burden. Id.

B.     Procedural Arguments Against the No-Evidence Motion on Dissolution and
       the Value of Buck’s Interest in Queen Isabella

       Initially, we must address two procedural arguments Buck makes against Palmer’s

no-evidence motion. First, Buck argues that because Palmer’s motion cited the evidence

submitted along with the motion, we must treat the motion as a traditional motion for

summary judgment, placing the initial burden to produce evidence on Palmer. Buck cites

our decisions in Michael v. Dyke, 41 S.W.3d 746, 751 (Tex. App.–Corpus Christi 2001, no

pet.), and Graham Land & Cattle Co. v. Independent Bankers Bank, 205 S.W.3d 21, 28-29

(Tex. App.–Corpus Christi 2006, no pet.). We disagree.

       In Michael, we held that “[w]hen it is not readily apparent to the trial court that

summary judgment is sought under rule 166a(i), the court should presume that it is filed

under the traditional summary judgment rule and analyze it according to those

well-recognized standards.” 41 S.W.3d at 751. In that case, we treated Dyke’s motion as

a traditional motion for summary judgment because it “intermixe[d] language from the

traditional summary judgment rule and the no-evidence rule, fail[ed] to clearly state under

which rule summary judgment [was] sought, fail[ed] to follow rule 166a(i) precisely by

identifying the particular elements in dispute, and attache[d] evidence that would be

appropriate for a traditional motion, but not a no-evidence motion.” Id. at 752.

       After Michael , the Texas Supreme Court decided Binur v. Jacobo, 135 S.W.3d 646,

                                            22
650-51 (Tex. 2004). In that case, the court held that although it is better to file separate

motions for traditional and no-evidence summary judgment, parties may file hybrid motions.

Id. at 651. Furthermore, although delineating the different grounds under separate

headings would help the bench and bar, the rules do not require it. Id. Most importantly,

however, the court held that we, as reviewing courts, cannot disregard a motion for no-

evidence summary judgment merely because it attaches evidence. Id. Rather, in that

circumstance, we must simply disregard the attached evidence when reviewing the no-

evidence grounds unless the evidence raises a fact issue in favor of the non-movant. Id.

       Our later holding in Graham Land & Cattle did not, and moreover could not, change

the rule in our jurisdiction back to its pre-Binur state. See 205 S.W.3d at 28-29. In

Graham Land & Cattle, we held that a motion did not raise no-evidence grounds because

it made two obscure references to the lack of evidence of an element, the references to

the lack of evidence were made within the traditional summary judgment arguments, and,

as an additional problem, the motion cited to the summary judgment evidence as

supporting the no-evidence arguments. Id. at 29.

       Palmer’s motion for summary judgment, however, separately stated the standards

for no-evidence and traditional summary judgment and expressly stated the basis for the

no-evidence motion. Although Palmer referenced summary judgment evidence in a

separate section entitled “Facts and Argument,” Palmer’s motion clearly asserted no-

evidence grounds. Binur, 135 S.W.3d at 651. Accordingly, we may not treat Palmer’s

motion as a traditional motion simply because it attached evidence; rather, we ignore

Palmer’s evidence unless it raises a fact issue. Id.

       Second, Buck argues that Palmer’s motion was defective because a no-evidence

                                             23
motion may only attack a claim or defense “on which an adverse party would have the

burden of proof at trial.” TEX . R. CIV. P. 166a(i). Buck argues that Palmer’s no-evidence

arguments, that dissolution occurred and that the value of Buck’s interest in the partnership

was zero, were asserted in a defensive posture to Buck’s claims. We disagree.

       First, Palmer’s argument that the partnership was dissolved in 1995 is actually a

challenge to Buck’s standing to assert claims against him for actions he took after

dissolution. In every case, a party must have standing to litigate the matters in issue. See

Hunt v. Bass, 664 S.W.2d 323, 324 (Tex. 1984). Because standing is a prerequisite to the

maintenance of a lawsuit, a party may move for no-evidence summary judgment on his

opponent’s standing to bring suit. See TEX . R. CIV. P. 166a(i); Tex. Ass’n of Bus. v. Tex.

Air Ctrl. Bd., 852 S.W.2d 440, 444 (Tex. 1993); see also Bank of Am. v. Eisenhauer, No.

13-09-00004-CV, 2010 WL 2784031, at *6 (Tex. App.–Corpus Christi July 15, 2010, no

pet.) (mem. op.) (holding that the trial court erred by denying the defendant’s no-evidence

motion based on the plaintiff’s standing to sue). Arguments like Palmer’s—that a partner

has no right to sue another partner for breach of fiduciary duty or fraud after dissolution

except to the extent that the liability arises from winding up the partnership—raise the issue

of whether the partner has standing to sue. See Rodgers v. RAB Invs., Ltd., 816 S.W.2d
543, 546-47 (Tex. App.–Dallas 1991, no writ) (addressing a partner’s standing to sue in this

context).

       Second, Palmer’s argument that the value of Buck’s interest in the partnership was

valued at the date of dissolution and was zero attacks Buck’s action for an accounting and

for distribution of the value of his partnership interest. Buck would have the burden at trial

to prove the value of his interest, and Palmer argues that he has no evidence to prove that

                                             24
it was anything greater than zero. See Bader v. Cox, 701 S.W.2d 677, 683 (Tex.

App.–Dallas 1985, writ ref’d n.r.e.) (“Thus, to recover the value of decedent’s interest in the

dissolved partnership, Ms. Bader has the burden of proving the market value of, and

decedent’s share of, the partnership assets.”); Cauble v. Handler, 503 S.W.2d 362, 364

(Tex. Civ. App.–Fort Worth 1973, writ ref’d n.r.e.) (“We agree that the burden of proof in

this accounting case was on the plaintiff to show that Handler was indebted to the

deceased’s estate and to show the amount of such debt. Plaintiff thus had the burden to

prove the market value of the partnership assets.”).

        Accordingly, we hold that Palmer’s no-evidence motion appropriately challenged

issues on which Buck would bear the burden of proof at trial, and it shifted the burden to

Buck to produce evidence that he had an interest in the partnership on the dates of the

alleged actions that form the basis of his claims against Palmer and the value of his

interest for which he sought distribution.8

C.      Date of Dissolution and Buck’s Standing

        In response to Palmer’s no-evidence motion, Buck submitted his own affidavit and

several documents he claims demonstrate that after settling the Llano County litigation in

September of 1995, he continued to own a twenty percent interest in Queen Isabella and

that the partnership was not dissolved. Palmer, on the other hand, argues that Buck’s

evidence shows that in the summer of 1995, Buck expressed his intent to dissolve the

partnership. Palmer argues that Queen Isabella continued with Buck as a partner for the

sole purpose of winding up and terminating the partnership, and the settlement of the Llano

        8
          W e note that on appeal, Buck does not argue that the m otion failed to set forth the elem ents of the
causes of action being challenged by the no-evidence m otion. See T EX . R. C IV . P. 166a(i) (“The m otion m ust
state the elem ents as to which there is no evidence.”).

                                                       25
County litigation was merely part of that process. Because all of Buck’s claims for

damages were based on actions Palmer took after dissolution, when Buck no longer had

an interest in the partnership, Buck had no standing to assert claims for damages to

himself or to Queen Isabella based on these actions. These arguments require this Court

to analyze the law of dissolution, winding up, and termination of partnerships, which we will

do before addressing Buck’s evidence.

         1.       Dissolution, Winding up, and Termination of Partnerships

         The parties agree that TUPA governs this case.9                             TUPA discusses three

different concepts that apply in this case: dissolution, winding up, and termination of the

partnership. TUPA § 29 (defining dissolution); id. § 30 (explaining that dissolution does not

terminate the partnership, which continues until winding up); id. § 37 (explaining right to

wind up); see Woodruff v. Bryant, 558 S.W.2d 535, 538 (Tex. Civ. App.–Corpus Christi

1977, writ ref’d n.r.e.) (citing McKellar v. Bracewell, 473 S.W.2d 542, 549 (Tex. Civ.

App.–Houston [1st Dist.] 1971, writ ref’d n.r.e.)). “Dissolution” is defined as “the change

in the relation of the partners caused by any partner ceasing to be associated in the

carrying on as distinguished from the winding up of the business.” TUPA § 29.

         TUPA clarifies that “[o]n dissolution the partnership is not terminated, but continues

until the winding up of partnership affairs is completed.” Id. § 30. In other words,

         [g]enerally when a partnership is dissolved, the partnership continues during
         the period of winding up until all preexisting matters are terminated.
         Dissolution is an act that actually changes the legal relationship of the
         partnership, and has nothing to do with whether or not the partnership
         business is continuing or winding up. It is a technical legal concept, unlike

         9
          TUPA was replaced by the Texas Revised Partnership Act (“TRPA”) effective January 1, 1994. See
Act of May 9, 1961, 57th Leg., R.S., ch. 158, 1961 T EX . G EN . L AW S 289 (form erly T EX . R EV . C IV . S TAT . A N N .
art. 6132b), expired January 1, 1999, Act of May 31, 1993, 73rd Leg., R.S., ch. 917, 1993 T EX . G EN . L AW S
3887. However, TRPA contained transition rules providing that TUPA would apply to existing partnerships
for a period of years, and the parties agree that it applies in this case.

                                                           26
       the concept of dissolution in other areas, such as corporations. . . . The
       causes [of dissolution] set out in [section 31] are automatic and dissolution
       occurs immediately upon the happening of the specified event.

Woodruff, 558 S.W.2d at 539. After dissolution, the partnership continues for the limited

purpose of winding up the affairs of the partnership. Id. “It is only upon termination that

the final partnership relationship ceases to exist.” Id.

       Every partner has the right to dissolve the partnership, which may either be in

compliance with or in violation of the partnership agreement. Id. Dissolution may be

caused by several different acts, which are set out in TUPA section 31, and include the

following:

       Dissolution is caused:

       (1)    Without violation of the agreement between the partners,

              (a)    By the termination of the definite term or particular undertaking
                     specified in the agreement,

              (b)    By the express will of any partner when no definite term or
                     particular undertaking is specified,

              (c)    By the express will of all the partners who have not assigned
                     their interests or suffered them to be charged for their separate
                     debts, either before or after the termination of any specified
                     term or particular undertaking,

              (d)    By the expulsion of any partner from the business bona fide in
                     accordance with such a power conferred by the agreement
                     between the partners;

       (2)    In contravention of the agreement between the partners, where the
              circumstances do not permit a dissolution under any other provision
              of this Section, by the express will of any partner at any time; . . . .

TUPA § 31. Thus, under TUPA, a partner may dissolve the partnership by his express will,

which may either be in compliance with or in violation of the partnership agreement. Id.

       When a partnership is dissolved in violation of the partnership agreement, TUPA

                                             27
provides that the partners who “have not wrongfully dissolved the partnership . . . [have]

the right to wind up the partnership affairs; provided, however, that any partner, his legal

representative or his assignee, upon cause shown, may obtain winding up by the court.”

Id. § 37. We now turn to Buck’s evidence.

        2.       Buck’s Evidence

        Buck’s evidence includes a letter dated June 16, 1995, from him to Palmer

regarding the settlement of the Llano County litigation. It states:

               Further, as I have previously informed you, I have no desire to embark
        into any [Queen Isabella] land development scenario with you. However, my
        20% ownership in the [Queen Isabella] property will be made available to the
        development entity after the resolve [sic] of the Construction Defect Lawsuit,
        your payment in full to 1629 for your purchase of its 60% ownership interest,
        and immediately prior to the start of any development of the [Queen Isabella]
        property.

Later, on June 26, 2005, Buck sent a letter to Garcia, which stated:

              I have never made an “announcement” to you, Jay Palmer, Tom
        Matlock, or anyone else that I was not interested in resolving the issues
        surrounding [Queen Isabella], nor that I would be willing to relinquish any
        element of my rights in the existing [Queen Isabella] partnership. However,
        you and Jay Palmer have been told that I have absolutely no desire
        whatsoever to participate in any future development of the [Queen Isabella]
        property with you and/or Jay Palmer.

        Although Buck’s affidavit states that “[e]xcept in connection with my request for relief

in this lawsuit, on no occasion have I declared dissolution of [Queen Isabella],”10 he

expressly admits that on several occasions he and Palmer “expressed our desire to

change our business relations.” He states:

         10
            Palm er argues, and we agree, that this is a legal conclusion that is incom petent sum m ary judgm ent
evidence. Brownlee v. Brownlee, 665 S.W .2d 111, 112 (Tex. 1984) (“By stating that his contractual obligation
had been m odified, Michael asserted nothing m ore than a legal conclusion.”); Ramirez v. Transcon. Ins. Co.
881 S.W .2d 818, 829 (Tex. App.–Houston [14th Dist.] 1994, writ denied) (holding that an objection that the
sum m ary judgm ent evidence states a legal conclusion is a defect of substance that m ay be raised for the first
tim e on appeal).

                                                       28
             Palmer and I have told each other that we did not wish to be in
      business together. For example, by letter dated August 1, 1995, my
      attorney, John Ray, stated, “I am advised by Mr. Buck that both he and Mr.
      Palmer made it known during the July 5, 1995 Settlement Status Conference
      in Llano County that neither of the gentlemen wishes to have any further
      business relationships together.” . . . . Palmer expressed the same
      sentiment to me by letter dated January 11, 1996.

Both of these letters are included in Buck’s summary judgment evidence.

      Buck claims that several documents executed around the same time reaffirmed the

existence of the Queen Isabella partnership and his interest in the partnership. First, he

points to an amendment to the partnership agreement executed on September 29, 1995,

which reflects that Palmer acquired 1629's sixty-percent interest in the partnership and

states that Buck is a twenty percent interest owner in Queen Isabella. Second, Buck points

to the settlement agreement resolving the Llano County litigation, which was also executed

on September 29, 2005. The settlement agreement provides for the assignment of 1629's

interest to Palmer and provides that Palmer will own eighty percent of Queen Isabella and

Buck will own twenty percent.

      3.     Analysis

      The first question that must be answered is whether Buck dissolved the partnership

by his communications in the summer of 1995. As noted above, a dissolution may be

caused by the “express will” of a partner. TUPA § 31(1)(b), (2). The parties dispute

whether Buck dissolved the partnership through his statements that he had “no desire to

embark into any [Queen Isabella] land development scenario with [Palmer],” that he had

“absolutely no desire whatsoever to participate in any future development of the [Queen

Isabella] property” with Palmer, that he had “expressed [his] desire to change [his]

business relations” with Palmer, and that he did not wish to have “any further business

                                           29
relationships together.” We hold these statements were sufficient to constitute notice of

Buck’s “express will” to terminate the partnership.

        As explained above, dissolution means “the change in the relation of the partners

caused by any partner ceasing to be associated in the carrying on as distinguished from

the winding up of the business.” Id. § 29. It is hard to imagine a more clear statement of

intent to dissolve than that expressed by Buck, where he used the precise definition of

dissolution in his statements regarding continuation of the partnership business. See id.

He wanted to “change [his] business relations,” he did not want “any further business” with

Palmer, and he did not want to participate in any future development of the property, which

was the sole purpose of the joint venture as stated in the partnership agreement. See id.

Under these circumstances, we hold that Buck dissolved the partnership in the summer of

1995, and the dissolution was automatic upon the making of these statements. See

Woodruff, 558 S.W.2d at 540 (holding evidence was legally sufficient to support finding of

dissolution where partner stated that she “wanted to get out of it”);11 id. at 539 (“The causes

set out in [section] 31 are automatic and dissolution occurs immediately upon the

        11
           W hile we held in W oodruff that the evidence was legally sufficient to support the jury’s finding of
dissolution, we also held that it was factually insufficient based on facts in that case that are not present here.
W oodruff v. Bryant, 558 S.W .2d 535, 540 (Tex. Civ. App.–Corpus Christi 1977, writ ref’d n.r.e.). In that case,
Bryant quit an existing partnership and entered into a partnership with a com petitor. Id. at 538. The rem aining
partners sued Bryant for breach of her fiduciary duty not to com pete. Id. Bryant claim ed that prior to
com peting with the partnership, she expressed her will to dissolve the partnership by sending a letter to the
rem aining partners that she “wanted to get out of it.” Id. at 540. W e held that evidence was sufficient to
support the jury’s finding that she dissolved the partnership prior to com peting with it. Id. However, we held
that the evidence was factually insufficient to support the finding because Bryant’s letter was am biguous,
stating that she intended to sell her interests in accordance with the partnership agreem ent’s bylaws. Id. at
540-42. The evidence showed that she did not com ply with the bylaws’ procedures for selling her interest.
Id. By her own testim ony, she assum ed the other partners rejected her offer and that she was still a partner,
and she continued to receive partnership profits and to participate as a partner. Id. That is not what we have
here. Here, Buck did not state he intended to continue as a partner or invoke the partnership agreem ent, but
rather, unequivocally stated that he wished not to engage in any future partnership business. And as we
explain next, the settlem ent agreem ent was consistent with winding up the partnership business by settling
the existing lawsuits against the partnership, not with continuing the partnership business.

                                                       30
happening of the specified event.”).12

        The amendment of the partnership agreement and the settlement of the Llano

County litigation are not inconsistent with dissolution, but rather, evidence the purpose of

winding up of the partnership’s existing affairs. See TUPA § 30; Woodruff, 558 S.W.2d at

539. It is undisputed that the Llano County litigation was pending in the summer of 1995,

when Buck expressed his will to dissolve the partnership. The litigation was instituted

against Queen Isabella, and the settlement agreement necessarily required the partners

responsible for the liability on the promissory notes be a part of the settlement agreement.

See TUPA § 15(1) (“Except as provided by Paragraph (2) of this Section, all partners are

liable jointly and severally for all debts and obligations of the partnership including those

under Sections 13 and 14); id. § 36(1) (“The dissolution of the partnership does not of itself

discharge the existing liability of any partner.”). The dissolution occurred before the

settlement in September 1995, but the settlement did not reinstate the dissolved

partnership.

        In sum, we agree that a dissolution occurred as a result of Buck’s statements in the

summer of 1995. Palmer’s motion for no-evidence summary judgment argued that all of

        12
           Buck argues that Palm er’s pleadings at the tim e he initiated this lawsuit insisted on the continued
existence of the joint venture between them , and the live pleadings at the tim e of sum m ary judgm ent also
continued along those lines. W e disagree. First, Buck cites to G arcia’s original petition for attorney fees,
which em phatically cannot constitute an adm ission by Palm er. Second, Buck cites to the first two pages of
Palm er’s second am ended cross-claim , where he recites the history of the partnership and notes that he and
Buck “were” partners in Queen Isabella and each owned twenty percent initially. Nowhere on those two pages
did Palm er adm it that Buck retained a twenty percent interest after settlem ent of the Llano County litigation.
Third, Buck cites Palm er’s second am ended petition in the severed action. In this pleading, however, Palm er
expressly states that in Decem ber 1993, Buck “was not willing to assum e any new liabilities and preferred
getting out of the venture rather than incurring new obligations.” Palm er’s pleadings acknowledge that “[a]t
the tim e of the Decem ber 1993 m eetings and agreem ents alleged above, Mr. Palm er and Mr. Buck were
partners and had fiduciary duties to each other.” W e fail to see, however, how these statem ents are in any
way inconsistent with Palm er’s argum ent that in the sum m er of 1995, Buck caused a dissolution. Accordingly,
Palm er’s pleadings do not require reversal of the sum m ary judgm ent and do not constitute evidence
supporting Buck’s argum ents.

                                                      31
Buck’s causes of action were based on actions Palmer took after dissolution, at a time

when Palmer was entitled to continue the partnership and engage in new business and

when Buck no longer had an interest in the partnership. Woodruff, 558 S.W.2d at 542; see

also Nielsen v. Nielsen, No. 13-97-338-CV, 1999 WL 34973311, at *5 (Tex. App.–Corpus

Christi Aug. 19, 1999, no pet.) (not designated for publication) (“The rule is that the

fiduciary relationship between partners comes to an end as to new business commenced

after the date of dissolution. New business encompasses transactions which are neither

unfinished partnership business commenced prior to dissolution or transactions rightfully

belonging to the partnership during the wind-up stage.”). Because Buck did not present

evidence that he had an interest in the partnership after the summer of 1995, he had no

standing to maintain his suit against Palmer for new business the partnership engaged in

after dissolution.13

D.      Value of Buck’s Interest in Queen Isabella

        Buck argues that his interest should be valued as of the date of the distribution,

which according to him has not yet occurred, instead of the date of dissolution. He bases

his argument on the partnership agreement and on TUPA section 38, arguing that he had

a right to insist on liquidation of the partnership’s assets and to receive his distribution from

the excess of assets over liability. See TUPA § 38. Palmer, on the other hand, argues that

        13
            Buck argues that even if the partnership was dissolved, Palm er is not entitled to sum m ary judgm ent
on all of his claim s. He argues that his fraud claim is based on a representation by Palm er that Palm er would
be personally responsible for paying a $600,000 prom issory note as part of the Septem ber 29, 2005
settlem ent agreem ent rather than causing Queen Isabella to be liable for it. Thus, he argues that Palm er’s
fraud and breach of fiduciary duties predated any 1995 dissolution. Buck cites his pleadings in this case,
wherein he relied on this representation as the basis for his fraud claim , but this pleading does not give a tim e
fram e for the representation or dem onstrate that it occurred prior to Buck’s statem ents in the sum m er of 1995
when Buck caused the dissolution. As we explain next, the value of Buck’s interest was set on the date of
dissolution, and Buck failed to prove it was greater than zero. Thus, whether Palm er or Queen Isabella
executed the prom issory note to settle the litigation was irrelevant. Accordingly, Buck has not presented
evidence to defeat sum m ary judgm ent on his fraud claim .

                                                       32
Buck’s interest must be valued at the date of dissolution because Buck dissolved the

partnership in contravention of the partnership agreement,14 and Buck has no evidence

that the value at that time was more than zero. See id. Buck counters that even if the

value was set on dissolution, he was entitled to share in the settlement of liabilities and the

appreciation of joint venture property during the winding up process, and he presented

evidence of the value of the partnership property. We agree with Palmer.

        1.       Value of Partnership Interest at Dissolution or Distribution?

        As we noted earlier, dissolution may be caused by the express will of the partners,

which may be in accordance with or in violation of the partnership agreement. Id. § 31.

Under section 38, whether dissolution was in violation of the agreement determines the

dissolving partner’s right to a distribution. Id. § 38. When a definite term has been

specified in the partnership agreement, a partner may dissolve the partnership without

violating the agreement if the term has expired at the time of dissolution. Id. § 31(1)(a).

If the definite term has not expired, dissolution by the partner’s express will is in violation

of the agreement. Id. § 31(2). Palmer argues that Buck dissolved the partnership in

contravention of the partnership agreement because the agreement provided for a

specified term that had not expired. We agree.

        Buck submitted the partnership agreement as part of the summary judgment

evidence. It states that the purpose of Queen Isabella was to “acquire certain real property

situated in Cameron County, Texas,” which it described in a separate schedule. The term

        14
           Buck argues that Palm er did not m ake this argum ent in the trial court. W e disagree. Palm er
argued that the relevant date was the date of dissolution, which we hold was sufficient to raise the issue
because the applicable law only provides for a distribution on this date if the dissolution is in violation of the
partnership agreem ent. To the extent that Buck was confused by the argum ents m ade below, Buck was
required to specially except to the m otion. McConnell v. Southside Indep. Sch. Dist., 858 S.W .2d 337, 342
(Tex. 1993) (“An exception is required should a non-m ovant wish to com plain on appeal that the grounds
relied on by the m ovant were unclear or am biguous.”).

                                                       33
of the joint venture is provided: “The Joint Venture shall commence as of the date hereof

and shall continue in existence for a period of FIVE (5) years, and thereafter from

year-to-year unless it is sooner terminated, liquidated, or dissolved as hereinafter

provided.” The partnership agreement was signed April 27, 1984.

           Buck argues that because the partnership commenced in 1984, the initial five-year

term had long since expired by 1995. Thus, in 1995 when the alleged dissolution occurred,

the partnership was in the middle of a year-to-year term, making dissolution an option

without violating the partnership agreement. Buck argues that the purpose of having a

partnership continue from year to year was to ensure that the expiration of the fixed term

did not cause a dissolution. Essentially, he argues that the year-to-year term does not

constitute a “fixed term” but is a mere saving provision that should be disregarded for

purposes of dissolution.

           Palmer points out, however, that although the partnership agreement states that the

partnership can be terminated prior to the expiration of a year-to-year term “as hereinafter

provided,” the agreement does not provide for a method to terminate the partnership in the

middle of the one-year additional terms.            He disputes Buck’s argument that the

year-to-year provision was included merely to save the partnership from dissolving upon

the expiration of the five-year initial term, pointing out that section 23 already provides for

the continuation of a partnership as an “at will” partnership after a fixed term when there

is no express agreement to the contrary. Id. § 23 (“When a partnership for a fixed term or

particular undertaking is continued after the termination of such term or particular

undertaking without any express agreement, the rights and duties of the partners remain

the same as they were at such termination, so far as is consistent with a partnership at

will.”).

                                               34
       When possible, we are required to give effect to all the terms of a contract so that

none of the provisions are rendered meaningless. Kelley-Coppedge, Inc. v. Highlands Ins.

Co., 980 S.W.2d 462, 464 (Tex. 1998). Section 23 expressly contemplates that parties

may agree to a contingent term upon the expiration of an initial fixed term to avoid

becoming an “at will” partnership, and that is what the parties did in this case. Thus,

section 23 requires this Court to assume that the partnership agreement fixed successive

one-year terms following the expiration of the initial five-year term and was not merely

included to prevent dissolution upon the expiration of the initial term. Id. § 23. We will not

read the year-to-year provision in the contract as mere surplusage. Kelley-Coppedge, Inc.,
980 S.W.2d at 464. Because the dissolution occurred in the middle of a fixed, year-long

term, Buck’s dissolution violated the partnership agreement. Id. §31(2).

       Section 38 provides for the application of partnership property after dissolution and

distinguishes between partners who have dissolved the partnership in contravention of the

partnership agreement and those who have not:

       (1)    When dissolution is caused in any way, except in contravention of the
              partnership agreement, each partner, as against his co-partners and
              all persons claiming through them in respect of their interests in the
              partnership, unless otherwise agreed, may have the partnership
              property applied to discharge its liabilities, and the surplus applied to
              pay in cash the net amount owing to the respective partners. But if
              dissolution is caused by expulsion of a partner, bona fide under the
              partnership agreement and if the expelled partner is discharged from
              all partnership liabilities, either by payment or agreement under
              Section 36(2), he shall receive in cash only the net amount due him
              from the partnership.

       (2)    When dissolution is caused in contravention of the partnership
              agreement the rights of the partners shall be as follows:

              (a)    Each partner who has not caused dissolution wrongfully shall
                     have,

                                             35
                    (I)    All the rights specified in paragraph (1) of this Section,
                           and

                    (II)   The right, as against each partner who has caused the
                           dissolution wrongfully, to damages for breach of the
                           agreement.

             (b)    The partners who have not caused the dissolution wrongfully,
                    if they all desire to continue the business in the same name,
                    either by themselves or jointly with others, may do so, during
                    the agreed term for the partnership and for that purpose may
                    possess the partnership property, provided they secure the
                    payment by bond approved by the court, or pay to any partner
                    who has caused the dissolution wrongfully, the value of his
                    interest in the partnership at the dissolution, less any damages
                    recoverable under clause [2(a)(II)] of this Section, and in like
                    manner indemnify him against all present or future partnership
                    liabilities.

             (c)    A partner who has caused the dissolution wrongfully shall
                    have:

                    (I)    If the business is not continued under the provisions of
                           paragraph (2b) all the rights of a partner under
                           paragraph (1), subject to clause [2(a)(II)], of this
                           Section;

                    (II)   If the business is continued under (2b) of this Section,
                           the right as against his co-partners and all claiming
                           through them in respect of their interests in the
                           partnership, to have the value of his interest in the
                           partnership, less any damages caused to his
                           co-partners by the dissolution, ascertained and paid to
                           him in cash, or the payment secured by bond approved
                           by the court, and to be indemnified against all existing
                           liabilities of the partnership; but in ascertaining the
                           value of the partner’s interest the value of the good-will
                           of the business shall not be considered.

Id. § 38. Under section 38(2)(b), because Buck wrongfully dissolved the partnership,

Palmer was entitled to continue the partnership but was required to pay Palmer “the value

of his interest in the partnership at the dissolution, less any damages recoverable under

clause [2(a)(II)] of this Section, and in like manner indemnify him against all present or

                                           36
future partnership liabilities.” Id. § 38(2)(b) (emphasis added). Palmer elected to continue

the partnership; therefore, Palmer was required to pay Buck the value of his interest in the

partnership at dissolution and was also required to indemnify against “all present or future

partnership liabilities.” Id.

       Buck points to the partnership agreement and argues that the agreement itself

requires distributions to be made “using the property’s fair market value as of the time of

distribution, as the basis for making the distribution.” (emphasis added). Thus, because

there has not been a distribution, Buck is entitled to his share of the property’s current fair

market value. We disagree that this provision requires Buck’s value to be calculated at the

date of distribution instead of the date of dissolution.

       The agreement provides that “[t]he Joint Venture may be terminated upon any date

specified in a notice of termination, signed by sixty percent (60%) in interest, not in

numbers, of the Joint Venturers. The death, incapacity, or dissolution of a Joint Venturer

shall have no effect on the life of the Joint Venture, which shall continue.”            Thus,

dissolution under the agreement would not terminate the joint venture.

       In contrast, the provisions for distribution of the partnership assets upon termination,

which the agreement says can only be by a vote of sixty percent of the interests,

contemplate liquidation:

                Upon such termination, the assets of the Joint Venture shall be
       applied as follows: to payment of the outstanding Joint Venture liabilities,
       although an appropriate reserve may be maintained in the amount
       determined by the manager or Trustee-in-Liquidation for any contingent
       liability until said contingent liability is satisfied, and the balance of such
       reserve, if any, shall be distributed together with any other sum remaining
       after payment of the outstanding Joint Venture liabilities to all of the Joint
       Venturers as their interest appears on Exhibit “A” unless otherwise provided
       herein.

In fact, the language Buck relies upon actually discusses the situation where a Joint

                                              37
Venturer demands payment of his interest by use of the joint venture’s property:

               No Joint Venturer shall be entitled to demand a distribution be made
       to him in Joint Venture Property, but the Manager may make or direct
       property distributions to be made, using the property’s fair market value as
       of the time of distribution, as the basis for making the distribution.

Thus, the termination and distribution provisions do not apply to this situation, where Buck

caused a dissolution of the partnership, but was not entitled to insist on termination. We

find nothing in the agreement that requires Buck’s interest be paid as of the date of the

“distribution” as opposed to the date of dissolution as required by section 38. See id. In

the absence of any provisions to the contrary, section 38 applies and requires the value

be set at the date of dissolution. See id.

       2.     Buck’s Evidence of the Value at Dissolution

       As we held above, Buck dissolved the partnership, at the very latest, on July 5,

1995. First, Buck points to appraisals of Queen Isabella’s property that valued the property

at $4,000,000. The appraisals he references provide estimates of the market value as of

June 30, 2000 and as of July 15, 2008, neither of which are the dates of dissolution.

       Second, Buck points to a meeting he attended on December 15, 1993, arguing that

Palmer disregarded an appraisal conducted in 1992 and valued the property at

$1,500,000. Again, the dissolution occurred in 1995, not in 1992 or 1993. And in any

event, in 1992, Texas Trust obtained a judgment against Queen Isabella for

$14,865,977.80 and against Buck and Palmer individually for forty percent of that amount,

or $5,946,391.12, under the terms of their guaranty. Thus, even if we accepted the value

stated by Palmer in December 1993, the partnership’s liabilities at that time exceeded the

estimated value by more than $13 million. Buck then argues that in 1998, the property had

increased in value to $2,060,000. Yet again, 1998 is not the relevant date.

                                             38
       Although Buck points to the September 29, 1995 settlement agreement, which

reduced the partnership’s liabilities to a $600,000 note payable to 1629, Buck does not

provide any evidence of the value of the partnership’s real property at that time. Buck

points to other evidence in the record that he claims “refers to other property owned by the

joint venture, for which Palmer fails to account, including recovery in the construction

defects litigation.” The evidence shows that in the construction defects litigation, one of

the defendants settled the suit with Palmer, Queen Isabella, and 1629 for $195,000. The

evidence does not, however, show how these amounts were allocated between these

parties. Buck participated in the settlement as well, receiving $5,000. Because the only

evidence Buck presented showed that the partnership had at least $600,000 in debt, but

none of Buck’s evidence provides a value for the partnership property at the time of

dissolution, the evidence shows nothing more than a negative value for the partnership.

Thus, the trial court did not err in granting summary judgment that Buck take nothing on

all his claims. We overrule Buck and Queen Isabella’s first issue.

                   V. DISCOVERY OF PALMER ’S FINANCIAL STATEMENTS

       By their third issue, Buck and Queen Isabella argue that the trial court erred by

denying them discovery of Palmer’s financial statements, which they argue would have

shown the value of Queen Isabella at the date of the alleged dissolution. For this reason,

they argue that the summary judgment should be reversed. We disagree.

       “If the trial court abuses its discretion in a discovery ruling, the complaining party

must still show harm on appeal to obtain a reversal.” Ford Motor Co. v. Castilllo, 279
S.W.3d 656, 667 (Tex. 2009) (citing TEX . R. APP . P. 44.1(a)). An error is harmful if it

“probably caused the rendition of an improper judgment” or “probably prevented the

                                             39
appellant from properly presenting the case to the court of appeals.” TEX . R. APP. P.

44.1(a).

       The trial court reviewed the financial statements in camera, and so have we. The

documents submitted to the court as responsive to the discovery requests include Palmer’s

personal financial statements for the following dates: December 31, 1999; August 31,

2000; December 31, 2000; July 31, 2001; December 31, 2001; March 31, 2002; and July

31, 2003. The relevant time period for valuing Queen Isabella’s property was the date of

dissolution, in the summer of 1995, which was more than four years prior to the first

financial statement appearing in the record. Thus, Buck has failed to show that the trial

court’s denial of his discovery in this regard has caused any harm, as this evidence would

not have supported his claim that the value of Queen Isabella was greater than zero at the

date of dissolution. For this reason, we cannot say that the trial court abused its discretion

in denying discovery of Palmer’s financial records. Martin v. Commercial Metals Co., 138
S.W.3d 619, 624 (Tex. App.–Dallas 2004, no pet.) (holding that the non-movant failed to

show “how any of the information he sought could have changed the outcome of the

summary judgment process,” and thus “failed to show how he was harmed by the lack of

further discovery”). Accordingly, we overrule Buck and Queen Isabella’s third issue.

                                      VI. CONCLUSION

       Having overruled all of Buck and Queen Isabella’s issues, we affirm the trial court’s

summary judgment.

                                                     _______________________________
                                                     GINA M. BENAVIDES,
                                                     Justice

                                             40
Delivered and filed the
21st day of December, 2010.

                              41