Court Opinion

ID: 4655612
Source: CourtListenerOpinion
Date Created: 2021-01-29 01:00:19.163389+00
Date Added: 2024-06-11T08:00:24.484783
License: Public Domain

Case: 19-50717      Document: 00515724229          Page: 1     Date Filed: 01/28/2021

            United States Court of Appeals
                 for the Fifth Circuit
                                                                        United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                        January 28, 2021
                                    No. 19-50717                          Lyle W. Cayce
                                                                               Clerk

   Richard Belliveau,

                                                             Plaintiff—Appellant,

                                        versus

   Barco, Incorporated; Barco, N.V.,

                                                           Defendants—Appellees.

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 1:17-CV-379

   Before Davis, Jones, and Willett, Circuit Judges.
   Edith H. Jones, Circuit Judge:
          Critical to this appeal is under what circumstances Texas law
   authorizes a claim against a corporate shareholder for the corporation’s
   breach of contract. See TEX. BUS. ORGS. CODE (“TBOC”) § 21.223. In
   2007, Richard Belliveau, a prolific inventor in the field of lighting technology,
   licensed his intellectual property exclusively to High End Systems, Inc.
   (“High End”). Several years later, High End became a wholly owned
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                                       No. 19-50717

   subsidiary of appellees Barco, N.V. (collectively, “Barco” 1). When Barco
   decided to sell High End to a third party in 2017, Barco and Belliveau fell out
   and litigation ensued. Pertinent here, Belliveau appeals the district court’s
   summary judgment rejecting, inter alia, his attempt to pierce High End’s
   corporate veil and hold Barco liable for the subsidiary’s breach of contract.
   For the reasons that follow, we AFFIRM.
                                 I. BACKGROUND
          Over a forty-year career, Belliveau touts that he has provided lighting
   systems for a variety of high-profile events, from Beyoncé concerts to the
   “Royal Wedding.” Three decades ago, Belliveau co-founded High End, a
   professional lighting company. Belliveau’s involvement in High End has
   been on and off. In 1998, he separated himself from the company, but in
   2004, he rejoined as the company’s chief technology officer.
          In 2007, Belliveau and High End entered into an Exclusive License
   and Operation Agreement (the “High End License”), which granted High
   End an exclusive license to all the intellectual property Belliveau had created
   between his 1998 separation from High End and his 2004 reemployment,
   together with an option to license all of his future IP. The License gave High
   End, “in its sole discretion,” the right to license or sublicense Belliveau’s
   intellectual property so long as High End used “commercially reasonable
   efforts to commercialize” it. Belliveau received a guaranteed annual royalty
   (subject to an initial $200,000 floor and approximately $350,000 cap, both
   with annual cost of living adjustments) for High End’s exploitation of the
   Licensed IP. Until Belliveau resigned, he had never received less than this
   royalty cap. He also received a royalty on sublicensing proceeds, $120,000

          1
           The formal name of High End was later changed to Barco, Inc., but we use “High
   End” for simplicity. Barco, Inc. was and remains a (nominal) defendant.

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   annually for the first several years of the License, which thereafter became a
   50/50 split.      The High End License also acknowledged Belliveau’s
   employment as the company’s Chief Technology Officer and provided that
   his salary would be deducted from the guaranteed annual royalty. 2
          A year after the parties executed the High End License, Barco
   acquired all of High End’s stock and other securities for $55 million. For
   nearly a decade, the three parties worked well together. High End signed
   several sublicenses, some of which yielded Belliveau substantial sublicense
   royalties. Belliveau worked closely with both Barco and High End in
   negotiating these sublicense agreements.
          High End, however, did not prosper. By 2016, Barco had lost a lot of
   money on High End and was searching for a purchaser. At the end of January
   2017, Barco signed a letter of intent with potential buyer Electronic Theater
   Controls, Inc. (“ETC”) outlining a stock purchase. High End was going to
   be sold for merely $7.5 million. During the negotiating period, Belliveau took
   umbrage at Barco’s tactics and failure to appreciate his position.
          In February, as part of the sale’s due diligence process, a Barco
   executive contacted Belliveau and asked him to shed some light on which of
   Belliveau’s patents covered Barco products.               Belliveau responded by
   suggesting that “if Barco chooses to divest in this situation then it might be
   best to contract back [a] license to intellectual property in the contract of
   sale.” Belliveau alleges he was assured “he would be kept appraised [sic] of
   the deal terms and would have a role in approving them.” But ETC
   executives did not include Belliveau in the negotiations, and Belliveau
   eventually learned that ETC would be changing his employment status from

          2
            This is a bare summary of the complex formulae for Belliveau’s various payments
   under the High End License.

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   CTO to that of an independent contractor following the buyout. Belliveau,
   incensed, resigned.
          Meanwhile, High End and Barco, N.V. began negotiating a License
   and Royalty Allocation Agreement (the “Barco Sublicense”), which was
   executed on March 24, 2017. It is undisputed that ETC was involved in
   negotiating the Barco Sublicense, but the agreement was between High End
   and Barco. The Barco Sublicense granted Barco a “non-transferable, non-
   exclusive, perpetual, irrevocable, and non-terminable, world-wide license
   and/or sublicense” to, inter alia, High End’s (and Belliveau’s) current patent
   portfolio as well as Belliveau’s future IP, for which High End had exercised
   the option granted in the High End License. Barco paid $75,000 as a lump
   sum in consideration of the license, sublicense, and releases conferred in the
   agreement, but it agreed not to make or sell any licensed products for four
   years. The parties agreed to negotiate a mutually acceptable royalty for
   future sales following that non-competition period.
          Belliveau asserts that High End had no employees, in-house counsel,
   or outside counsel independent of Barco throughout the negotiations. Five
   days after executing the Barco Sublicense, Barco sold High End to ETC.
   Belliveau alleges he was kept completely in the dark as to the Barco
   Sublicense and did not discover it until months later.
          Shortly after ETC’s purchase of High End, Belliveau amended his
   petition in a preexisting state court lawsuit originally filed against High End.
   He nonsuited the claims against High End and named Barco, Inc. and Barco,
   N.V. as defendants. Belliveau’s complaint asserted claims against Barco
   including breach of contract, breach of fiduciary duty, and fraud by
   nondisclosure arising out of the events leading up to the sale of High End.
   The case was removed to federal court. Following discovery, the district

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   court granted summary judgment in favor of Barco on all claims. Belliveau
   timely appealed.
                                II. DISCUSSION
          Challenging the district court’s summary judgment, Belliveau
   contends that High End breached the High End License by sublicensing all
   of his intellectual property to Barco for unreasonably low value. He seeks to
   pierce High End’s corporate veil and hold Barco liable for the breach.
   Additionally, Belliveau alleges that Barco owed him a fiduciary duty that was
   breached when Barco executed the Barco Sublicense. Based on the same
   alleged fiduciary relationship, Belliveau contends Barco committed fraud by
   failing to disclose to him the details of the Barco Sublicense. We address each
   issue in turn.
   A. Standard of Review
          This court reviews the district court’s grant of summary judgment de
   novo. Five Star Royalty Partners, Ltd. v. Mauldin, 973 F.3d 367, 371 (5th Cir.
   2020). Summary judgment is appropriate when the movant is entitled to
   judgment as a matter of law and there is no genuine dispute of material fact.
   Id; FED. R. CIV. P. 56(a). “[T]he inferences to be drawn from the underlying
   facts contained in the affidavits, depositions, and exhibits of record must be
   viewed in the light most favorable to the party opposing the motion.” Waste
   Mgmt. of La., L.L.C. v. River Birch, Inc., 920 F.3d 958, 964 (5th Cir. 2019)
   (quoting Reingold v. Swiftships, Inc., 126 F.3d 645, 646 (5th Cir. 1997)).
   B. Piercing the Corporate Veil
          Belliveau first contends that High End breached its contract because
   the Barco Sublicense was not a commercially reasonable sublicense of his
   intellectual property. “Because corporations offer their shareholders limited
   liability, a plaintiff seeking to impose individual liability on a shareholder

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   must pierce the corporate veil to do so.” In re Ritz, 832 F.3d 560, 566 (5th
   Cir. 2016). Rather than sue High End, however, Belliveau has opted to sue
   its sole shareholder, Barco. Thus, Belliveau must “pierce the corporate
   veil.”
            Texas law enforces contracts but disfavors extra-contractual
   remedies, such as allowing creditors of Texas business entities to sue their
   owners. Due to “amendments to Article 2.21 of the TBCA in 1989 and
   several subsequent legislative sessions, veil piercing is now addressed by
   statute in Texas in such a way that piercing the corporate veil to impose
   personal liability for a contractual, or contractually related, obligation of a
   corporation is quite difficult.” Elizabeth S. Miller, The Limits of Limited
   Liability: Veil Piercing and Other Bases of Personal Liability of Owners,
   Governing Persons, and Agents of Texas Business Entities, State Bar of Texas,
   13th Annual Advanced Real Estate Strategies ch. 4, 2 (2019). Texas law thus
   insulates a shareholder from a corporation’s contractual or contractually
   related obligations “on the basis that the holder . . . is or was the alter ego of
   the corporation or on the basis of actual or constructive fraud, a sham to
   perpetrate a fraud, or other similar theory.”           TBOC § 21.223(a)(2).
   Section 21.223(b), however, creates an exception to this limitation.            A
   shareholder may be held personally liable for a corporation’s obligations “if
   the obligee demonstrates that the . . . beneficial owner . . . caused the
   corporation to be used for the purpose of perpetrating and did perpetrate an
   actual fraud on the obligee primarily for the direct personal benefit of the . . .
   beneficial owner.” Id. § 21.223(b) (emphasis added). See Willis v. Donnelly,
   199 S.W.3d 262, 271–72 (Tex. 2006) (discussing “narrowly prescribed . . .
   circumstances under which a shareholder can be held liable for corporate
   debts” under then-TBCA Art. 2.21).
            Thus, to hold Barco liable for High End’s alleged breach of contract,
   Belliveau must show that Barco (the then-shareholder) used High End (the

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   corporation) to (1) “perpetrate an actual fraud” (2) primarily for Barco’s
   “direct personal benefit.” In re Ritz, 832 F.3d 560, 566 (5th Cir. 2016) (citing
   SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444, 454 (Tex.
   2009)).
           Belliveau argues that the fraud, in this instance, was High End’s
   execution of the Barco Sublicense. He explains that Barco used High End to
   perpetrate an actual fraud by having High End sublicense Belliveau’s
   intellectual property to Barco at a price well below market value. Barco does
   not dispute that the Barco Sublicense gave Barco a direct personal benefit.
   Nor does Barco challenge the merits of Belliveau’s underlying breach of
   contract claim. 3 The sole issue on appeal, then, is whether Belliveau met his
   burden of raising a fact issue regarding “actual fraud.”
           In the veil-piercing context, Texas courts have held that “actual fraud
   is not equivalent to the tort of fraud.” In re Ritz, 832 F.3d at 567 (internal
   quotations omitted). Some courts have held, for instance, that proving a
   material misrepresentation may not be required—even in connection with
   contractually originated claims. See, e.g., TransPecos Banks v. Strobach,
   487 S.W.3d 722, 730 (Tex. App.—El Paso 2016, no pet.); Latham v. Burgher,
   320 S.W.3d 602, 606–07 (Tex. App.—Dallas 2010, no pet.); Dick’s Last
   Resort of W. End, Inc. v. Mkt./Ross, Ltd., 273 S.W.3d 905, 909–10 (Tex.
   App.—Dallas 2008, pet. denied); McCarthy v. Wani Venture, A.S.,
   251 S.W.3d 573, 584 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).
   Rather, “actual fraud involves ‘dishonesty of purpose or intent to deceive,’”

           3
              Barco perfunctorily argues for the first time on appeal that Belliveau cannot show
   High End breached the High End License. The issue is waived as insufficiently briefed.
   See Hollis v. Lynch, 827 F.3d 436, 451 (5th Cir. 2016) (considering a “passing reference” to
   a claim in an appellate brief insufficient). In any event, Barco cannot raise an argument for
   the first time [on appeal]. See Flex Frac Logistics, L.L.C. v. N.L.R.B., 746 F.3d 205, 208
   (5th Cir. 2014) (“[A]rguments raised for the first time on appeal are waived.”).

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   In re Ritz, 832 F.3d at 567, and is “characterized by deliberately misleading
   conduct,” Shook v. Walden, 368 S.W.3d 604, 620 (Tex. App.—Austin 2012,
   pet. denied). Because “direct evidence of actual fraud is scarce,” id.,
   “[c]ourts may deduce fraudulent intent from all of the facts and
   circumstances,” Spring Street Partners-IV, L.P. v. Lam, 730 F.3d 427, 443
   (5th Cir. 2013). This has court emphasized the overall purpose of the statute,
   however, to strike a balance in economic regulation between contract
   claimants, who may protect themselves ex ante, and tort claimants who have
   no such opportunity. Id. at 444 (quoting Shook, 368 S.W.3d at 619–20).
           Citing many of these authorities, the district court held that Belliveau
   was unable to demonstrate actual fraud. The court noted that the execution
   of a sublicense, standing alone, was permitted by the High End License and
   not evidence of actual fraud. It found that Belliveau did not provide sufficient
   evidence that the Barco Sublicense was undervalued. 4 The court also
   explained that Belliveau had not contracted around the risk that High End
   might use inadequate efforts to commercialize his IP. And the court faulted
   Belliveau for not pursuing a claim against High End instead of Barco.
           Belliveau cobbles together circumstantial evidence to argue that there
   exists a material issue of fact concerning actual fraud. First, he relies on his
   expert’s opinion that estimates the fair market value of Barco’s rights under
   the Barco Sublicense was well over $100 million (discounted over ten years).
   Belliveau argues that the $75,000 consideration paid for the Barco Sublicense
   was grossly inadequate and evidence of fraudulent intent. 5

           4
             At the time of the district court’s initial summary judgment ruling, Belliveau had
   failed to submit his expert’s damage opinion, though he did offer it prior to the court’s
   ruling on his motion to reconsider.
           5
             Belliveau considers that the Barco Sublicense admitted actual fraud in statements
   to the effect that the $75,000 royalty was based on all the circumstances of the transaction

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          Extremely insufficient consideration may provide, at least in the
   fraudulent transfer context, evidence of actual fraud. See Spring Street,
   730 F.3d at 445 (finding actual fraud based, inter alia, on the fact that the
   transferee in fraud of creditors “paid no consideration for a 25% interest each
   in his assets”); see also In re Ritz, 832 F.3d at 568. But as Barco points out,
   the Barco Sublicense’s $75,000 payment did not include sublicense rights.
   In addition, Barco agreed not to sell for four years certain competing
   Licensed Products that include lighting control systems, after which the
   parties were required to negotiate a mutually agreeable royalty for such sales.
          In any event, this was not the first time High End had sublicensed
   Belliveau’s intellectual property for an arguably small monetary
   consideration.     The record indicates High End sublicensed Belliveau’s
   intellectual property in 2013 for no monetary fee. Similarly, High End had
   previously issued sublicenses in exchange for multiple cross-licenses to the
   purchaser’s patents. And it bears emphasis that these were transactions in
   which Belliveau confirms he was “intimately involved.” See S. Union Co. v.
   City of Edinburg, 129 S.W.3d 74, 88 (Tex. 2003) (finding no evidence of
   “conduct involving dishonesty of purpose” or “intent to deceive” when the
   conduct underlying a breach of contract claim was “well known to the
   [plaintiff]”).
          But the overriding point as to the alleged insufficiency of the royalty
   is that Belliveau at most complains about a breach of his own High End
   License.     “[T]o impose individual liability for corporate contractual
   obligations,” a claimant must have been unable to foresee and contractually
   avert potential risks. Shook, 368 S.W.3d at 620. The Shook court also

   and thus not a “precedent” for determining a reasonable royalty in the future. This was,
   however, a statement of fact, not a concession.

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   explained that “contract claimants, unlike most third parties suing in tort,
   have voluntarily chosen to deal with the corporation and, ‘[a]bsent some
   deception or fraud,’ would have had the opportunity to apportion, through
   negotiated contract terms, the risk that the entity would be unable to meet its
   obligations.” Id. (quoting Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 375
   (Tex. 1984)).
           Belliveau is correct that High End contractually agreed to “use
   commercially reasonable efforts to commercialize” his intellectual property.
   A breach of this provision, however, is not enough to support veil piercing.
   For instance, although the High End License bears the hallmarks of intense
   negotiation by sophisticated parties, there is no clause that required
   Belliveau’s specific approval for sublicenses or that prohibited sublicenses to
   affiliates of High End. Nor had he any right to approve minimum royalties to
   be paid under each sublicense. Nor had he a contractual right to approve the
   sale of High End. Nor is the term “commercially reasonable efforts”
   expressly applicable to every single sublicense, as opposed to the overall
   “commercial reasonableness” of High End’s commercialization efforts. 6
   The Barco Sublicense is also non-exclusive, meaning that High End remained
   in a position to execute any other sublicenses it might see fit in a commercially
   reasonable manner.
           The High End License could have provided a number of alternative
   contractual measures to protect Belliveau’s interests and ward off claims he
   is now asserting. As it stands, this is a breach of contract case. The Texas
   statute does not authorize Belliveau to sue Barco, the shareholder, simply for

           6
            Indeed, here, the four-year noncompete by Barco may have provided a
   “commercially reasonable” benefit to High End, and thus to Belliveau, as it allowed High
   End to continue to sell certain Licensed Products free of Barco’s competition during that
   period.

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   operating according to the terms of the contract—even if Barco may have
   committed a breach—by artfully pleading dishonesty and intent to deceive.
   See TBOC § 21.223.         Dramatic as the expert’s opinion of Belliveau’s
   damages appears to be, this is not a case in which Barco attempted to purloin
   High End’s assets in order to deprive Belliveau of the benefit of his High End
   License rights to a minimum royalty or sublicense royalties in general. The
   parties’ dispute here, if anything, is about one particular sublicense royalty
   provision, not a denuding of the company to avoid a creditor. Compare In re
   Ritz, 832 F.3d at 563 (defendant drained corporation of assets by transferring
   funds to other entities he controlled in efforts to defraud creditor).
          Belliveau also argues that Barco’s intent to deceive or dishonest
   purpose may be inferred from the fact that he was kept in the dark, not only
   about the Barco Sublicense, but also about ETC’s impending “demotion” of
   him to an independent contractor status. As to the first charge, the Barco
   Sublicense was signed after Belliveau had filed suit in an attempt to stop the
   acquisition. Since Belliveau himself had proposed such a sublicense, and
   since the High End License gave him no right to pre-approve sublicenses, this
   should not in itself have come as a surprise. As to the second charge, neither
   Barco nor Belliveau could control ETC’s employment decisions following its
   takeover. 7
          Belliveau next points to a statement in the Barco Sublicense for
   evidence of fraudulent intent. Specifically, although the Barco Sublicense
   expressly covers all of Belliveau’s intellectual property, Section 2.1 purports
   to acknowledge that Barco holds and has held a preexisting sublicense on this
   IP since 2008.       Belliveau contends this acknowledgement is factually

          7
            Evidently, Belliveau and ETC reconciled, and he is now listed as a technology
   contractor for High End.

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   incorrect and that a jury could find that Barco was dishonest in claiming that
   it already had an informal, royalty-free license to all of his intellectual
   property. This is a curious provision, but even assuming that Section 2.1
   misstates the facts preceding the Barco Sublicense, Belliveau offers no
   evidence that Barco included the statement for any dishonest purpose
   relevant to him. He asserts no way in which the acknowledgement has any
   bearing on his rights under the High End sublicense. Absent more, the
   Section 2.1 acknowledgment does not raise a fact issue regarding actual fraud.
          Finally, Belliveau urges us to apply the “badges of fraud,” which are
   listed in the Texas Uniform Fraudulent Transfer Act (“TUFTA”) to aid in
   determining fraudulent intent for claims under that statute. Belliveau calls
   his claim “an IP version of a fraudulent transfer” and relies on In re Ritz, in
   which this court held that “establishing that a transfer is fraudulent under
   the actual fraud prong of TUFTA is sufficient to satisfy the actual fraud
   requirement of veil-piercing.” 832 F.3d at 567. That TUFTA liability may
   amount to liability under TBOC § 21.223 does not prove that liability for
   piercing the corporate veil must depend on TUFTA’s statutory formula.
   Belliveau cites no authority to support that Texas courts look to the badges
   of fraud outside the TUFTA context (i.e., claims involving a debtor’s
   transfer of property to avoid liability on a debt) to pierce the corporate veil.
   We do not consider the badges of fraud here.
          The evidence, when viewed as a whole, does not raise a fact issue
   regarding Barco’s dishonest purpose or intent to deceive Belliveau in
   entering into the Barco Sublicense. Piercing the corporate veil is not a
   cumulative remedy for creditors of corporate or other legal entities in Texas;
   that theory does not make owners of such entities codefendants for every
   breach of contract case. It is a remedy to be used when the actions of the
   entity’s owner amounting to “actual fraud” have rendered the entity unable

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   to pay its debts. The district court properly granted summary judgment on
   Belliveau’s claim to pierce the corporate veil.
   C. Breach of Fiduciary Duty and Fraud by Nondisclosure
           Belliveau also contends that Barco was his fiduciary, and that by
   entering into the Barco Sublicense and failing to disclose certain information
   related to that agreement, Barco breached its fiduciary duties and committed
   fraud by nondisclosure. The district court granted summary judgment on
   both claims, reasoning there was no evidence of a fiduciary relationship
   between Belliveau and Barco. 8 We agree.
           A fiduciary relationship, of course, is a sine qua non of a breach of
   fiduciary duty claim.            See Navigant Consulting, Inc. v. Wilkinson,
   508 F.3d 277, 283 (5th Cir. 2007). 9 And “[f]or there to be actionable
   nondisclosure fraud, there must be a duty to disclose,” which arises “when
   there is a fiduciary relationship.” Hoggett v. Brown, 971 S.W.2d 472, 487
   (Tex. App.—Houston [14th Dist.] 1997, pet. denied). Barco does not dispute
   any of the other elements of Belliveau’s breach of fiduciary duty and fraud by
   nondisclosure claims. As a result, the sole issue on appeal, common to both
   claims, is whether there are fact issues as to the existence of a fiduciary
   relationship between Belliveau and Barco. 10

           8
             The district court initially denied Barco’s motion for summary judgment on
   Belliveau’s breach of fiduciary duty and fraud by nondisclosure claims, but later reversed
   course.
           9
             Under Texas law, “[t]he elements of a breach of fiduciary duty claim are: (1) a
   fiduciary relationship between the plaintiff and defendant; (2) the defendant must have
   breached his fiduciary duty to the plaintiff; and (3) the defendant’s breach must result in
   injury to the plaintiff or benefit to the defendant.” Navigant Consulting, Inc., 508 F.3d at
   283 (quoting Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet. denied)).
           10
              Texas courts have held that a duty to disclose may be shown in situations where
   a fiduciary relationship is lacking. See Navigant Consulting, Inc., 508 F.3d at 283 (listing

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           A fiduciary relationship may arise either from formal or informal
   relationships. Lundy v. Masson, 260 S.W.3d 482, 501 (Tex. App.—Houston
   [14th Dist.] 2008, no pet.). “[A] formal fiduciary relationship[] ‘arises as a
   matter of law and includes the relationships between attorney and client,
   principal and agent, partners, and joint venturers.’” Navigant Consulting,
   508 F.3d at 283 (quoting Abetter Trucking Co. v. Arizpe, 113 S.W.3d 503, 508
   (Tex. App.—Houston [1st Dist.] 2003, no pet.)). By contrast, an informal
   fiduciary relationship “may arise where one person trusts in and relies upon
   another, whether the relationship is a moral, social, domestic, or purely
   personal one.” Id. “In other words, a fiduciary relationship ‘exists where a
   special confidence is reposed in another who in equity and good conscience
   is bound to act in good faith and with due regard to the interests of the one
   reposing confidence.’” Jacked Up, L.L.C. v. Sara Lee Corp., 854 F.3d 797,
   809 (5th Cir. 2017) (quoting Tex. Bank & Tr. Co. v. Moore, 595 S.W.2d 502,
   507 (Tex. 1980)).
           Belliveau contends that the record supports two kinds of fiduciary
   relationships between Belliveau and Barco: one formal (an attorney-client
   relationship) and one informal (a “confidential” relationship”). Neither
   argument is persuasive.
           First, Belliveau asserts there was an implied attorney-client
   relationship between himself and Barco’s in-house lawyers. “An agreement
   to form an attorney-client relationship may be implied from the conduct of
   the parties.” Perez v. Kirk & Carrigan, 822 S.W.2d 261, 265 (Tex. App.—
   Corpus Christi 1991, writ denied). “But whether the agreement is express or
   implied, there must be evidence both parties intended to create an attorney-

   four situations). Belliveau, however, relies only on Barco’s alleged fiduciary duty in
   support of his fraud by nondisclosure claim. The assertion of any other theory is therefore
   waived. See Hollis, 827 F.3d at 451.

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   client relationship—one party’s subjective belief is insufficient to raise a
   question of fact to defeat summary judgment.”                Kiger v. Balestri,
   376 S.W.3d 287, 291 (Tex. App.—Dallas 2012, pet. denied) (citing Valls v.
   Johanson & Fairless, L.L.P., 314 S.W.3d 624, 634 (Tex. App.—Houston
   [14th Dist.] 2010, no pet.)). In other words, courts “determine whether a[n]
   [attorney-client] contract can be implied using an objective standard . . . and
   . . . do not consider [the parties’] unstated, subjective beliefs.” Span Enters.
   v. Wood, 274 S.W.3d 854, 858 (Tex. App.—Houston [1st Dist.] 2008, no
   pet.).
            Belliveau alleges that two of Barco’s in-house lawyers, Kurt
   Verheggen and Carolyn Vignery, represented him in sublicensing his
   intellectual property. In support, Belliveau relies solely on a declaration he
   submitted in response to Barco’s motion for summary judgment.
            To begin with, much of the declaration, as it pertains to the existence
   of a fiduciary relationship, is subjective. Indeed, Belliveau claims he “trusted
   [Barco’s] employees, including its in-house lawyers, to protect my IP
   interests,” and that he believed his discussions with Verheggen and Vignery
   “to be privileged and confidential discussions with my own lawyers.” His
   subjective belief is not enough to create attorney-client privilege, however.
   See LeBlanc v. Lange, 365 S.W.3d 70, 79 (Tex. App.—Houston [1st Dist.]
   2011, no pet.) (“One party’s subjective belief that such a relationship was
   formed is not sufficient.”); see also Jacked Up, 854 F.3d at 808–09 (“[M]ere
   subjective trust alone is not enough to transform arm’s-length dealing into a
   fiduciary relationship.” (quoting Crim Truck & Tractor Co. v. Navistar Int’l
   Transp. Corp., 823 S.W.2d 591, 595 (Tex. 1992))).
            Moreover, most of the declaration excerpts that Belliveau relies on are
   vague and conclusory. For example, Belliveau represents in his briefing that
   his declaration states that “Verheggen and Vignery communicated their

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   agreement to act as Belliveau’s personal lawyers in sublicensing his IP.” But
   the declaration does not support that assertion. Rather, the paragraph that
   Belliveau cites states that “Barco employees, including its in-house lawyers,
   agreed to act at my direction on matters related to my IP.” As the district
   court held, Belliveau fails to explain what in-house lawyers acted at his
   discretion, or whether they did so with the intention of representing him in a
   legal capacity. See Kariuki v. Tarango, 709 F.3d 495, 505 (5th Cir. 2013)
   (“[W]ithout more, a vague or conclusory affidavit is insufficient to create a
   genuine issue of material fact in the fact of conflicting probative evidence.”).
          Belliveau also asserts that Verheggen and Vignery “readily
   communicated with [Belliveau] about his personal IP issues,” “kept
   Belliveau appraised of the details surrounding sublicensing his IP,” and
   “sought Belliveau’s input and approval of settlements and sublicenses.”
   Contrary to Belliveau’s representations, however, the portions of the
   declaration Belliveau cites indicate that much of the correspondence
   regarding Belliveau’s sublicensing did not involve attorneys, let alone
   Verheggen and Vignery.
          Finally, to the extent Belliveau’s declaration does specifically address
   interactions with Verheggen and Vignery, his subsequent deposition
   testimony directly contradicts his assertions. The declaration states that
   Belliveau “sought and obtained legal advice from Barco’s in-house lawyers—
   specifically Kurt Verheggen and Carolyn Vignery—related to sublicensing
   my IP . . . . In seeking legal advice from Mr. Verheggen and Ms. Vignery, I
   gave them confidential information related to my IP . . . .” Even if this
   statement could be sufficient evidence of an attorney-client relationship,
   Belliveau testified at his deposition that he could not recall ever directly
   discussing with Verheggen or Vignery any of the past sublicenses. Belliveau
   fails to explain this contradiction. See Copeland v. Wasserstein, Parella & Co.,
   Inc., 278 F.3d 472, 482 (5th Cir. 2002) (“[W]hen the sole evidence

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                                    No. 19-50717

   purporting to create a genuine issue of material fact and thus to preclude
   summary judgment is an affidavit that conflicts with deposition testimony,
   we have required an explanation of that conflict.”). Summary judgment was
   appropriate on this claim regarding Belliveau’s alleged attorney-client
   relationship with Barco.
          Belliveau argues, in the alternative, that there was an informal
   confidential relationship between himself and Barco. “Texas law does not
   recognize a fiduciary relationship lightly, especially in the commercial
   context.” Jacked Up, 854 F.3d at 809 (quoting Lundy, 260 S.W.3d at 501;
   Willis v. Donnelly, 199 S.W.3d 262, 278 (Tex. 2006)) (internal citations and
   quotations omitted). “It is well settled that ‘not every relationship involving
   a high degree of trust and confidence rises to the stature of a fiduciary
   relationship.’” Meyer v. Cathey, 167 S.W.3d 327, 330 (Tex. 2005) (quoting
   Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176–77 (Tex. 1997)).
   Instead, “[t]o impose an informal fiduciary duty in a business transaction, the
   special relationship of trust and confidence must exist prior to, and apart
   from, the agreement made the basis of the suit.” Associated Indem. Corp. v.
   CAT Contracting, Inc., 964 S.W.2d 276, 288 (Tex. 1998).
          To show an informal fiduciary relationship, Belliveau alleges, again
   based on his declaration, that Barco ensured, for almost a decade, that High
   End met its contractual duty to commercialize Belliveau’s IP on reasonable
   terms, and that Barco involved Belliveau in all sublicensing efforts. But, as
   the district court found, the 2008 High End License is the basis of Belliveau’s
   suit, and he offers no evidence of a relationship predating that agreement.
   Indeed, the record suggests that Barco did not enter the picture until 2008,
   when it purchased all High End’s shares. Belliveau has not demonstrated the
   existence of an informal confidential relationship with Barco.

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           Still, Belliveau contends that the 2017 Barco Sublicense, not the High
   End License, is the agreement that should be used to measure the existence
   of a prior relationship. As noted, however, the test is whether the “special
   relationship of trust and confidence” existed prior to the “agreement made
   the basis of the suit.” Associated Indem. Corp., 964 S.W.2d at 288 (emphasis
   added). But the agreement that forms the basis of Belliveau’s lawsuit is the
   High End License.         After all, Belliveau sued Barco for breach of that
   agreement. Further, even if the court used the Barco Sublicense as the start
   of the relationship look-back period, Belliveau provides no evidence that his
   preexisting relationship with Barco consisted of anything more than arms-
   length transactions commencing with the High End License. The Texas
   Supreme Court has expressly rejected the use of such interactions to
   establish a relationship predating the challenged agreement. See Meyer
   167 S.W.3d at 331 (“These earlier projects were arms-length transactions
   entered into for the parties’ mutual benefit, and thus do not establish a basis
   for a fiduciary relationship.”). 11
           Belliveau reasons that the preexisting relationship rule does not
   necessarily apply here.         Citing Jacked Up, L.L.C. v. Sara Lee Corp.,
   854 F.3d 797 (5th Cir. 2017), and Schlumberger Tech. Corp. v. Swanson,
   959 S.W.2d 171 (Tex. 1997), he insists that courts only look to a preexisting
   relationship when “the plaintiff transacts with the defendant and then claims
   that the defendant betrayed his trust in that transaction.” Belliveau correctly
   distinguishes Jacked Up and Schlumberger on the facts; both cases involved
   disputes between litigants over transactions to which they were both parties.

           11
             Meyer also underscored its rejection of an informal fiduciary relationship by
   pointing out that “the agreements governing the earlier projects expressly disavowed the
   creation of any fiduciary duties or special relationships.” Id. at 331; see also Jacked Up,
   854 F.3d at 809 (same). The High End License contains a nearly identical disclaimer.

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   By contrast, Belliveau and Barco had no contractual relationship. But this is
   a commercial case in which Belliveau is attempting to impose a fiduciary duty
   on Barco based on the parties’ business relations. Belliveau’s foundational
   theory of liability is that Barco should be held responsible for High End’s
   contractual obligations. Belliveau can hardly argue that he does not need to
   show a prior relationship because the parties have no formal contractual
   relationship.
          In sum, Belliveau has not raised a fact issue regarding the existence of
   an informal fiduciary relationship with Barco. Because Belliveau cannot meet
   his burden to show a formal or informal fiduciary relationship, the district
   court properly granted Barco’s summary judgment motion on the breach of
   fiduciary duty and fraud by nondisclosure claims.
                              III. CONCLUSION
          For the foregoing reasons, the district court’s grant of summary
   judgment is AFFIRMED.

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                                    No. 19-50717

   W. Eugene Davis, Circuit Judge, concurring in part and dissenting in
   part.
          I concur in the majority’s decision to affirm the summary-judgment
   dismissal of Belliveau’s claims against Barco for breach of fiduciary duty and
   fraud by nondisclosure. I respectfully dissent, however, from the majority’s
   decision to affirm the summary-judgment dismissal of Belliveau’s veil-
   piercing claim against Barco for High End’s breach of contract.
          Under the Texas veil-piercing statute, a shareholder (Barco) of a
   corporation (High End) may be held personally liable for a corporation’s
   obligations if the obligee (Belliveau) demonstrates that the shareholder
   caused the corporation to be used to perpetrate an actual fraud on the obligee
   primarily for the direct personal benefit of the shareholder. TEX. BUS.
   ORGS. CODE § 21.223(b). It is undisputed that the fraud alleged here, the
   Barco Sublicense, gave Barco a direct personal benefit. The remaining
   question presented, thus, is whether Belliveau came forward with sufficient
   summary-judgment evidence to create a genuine issue of material fact
   establishing that Barco used High End to perpetrate an actual fraud on him
   when it obtained the Barco Sublicense. In my view, and for the following
   reasons, Belliveau has done so.
          Under Rule 56, summary judgment shall be granted “if the movant
   shows that there is no genuine dispute as to any material fact and the movant
   is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).
   Importantly, “[i]n assessing whether genuine disputes of material fact exist,
   the court may not undertake to evaluate the credibility of witnesses, weigh
   the evidence, or resolve factual disputes.” Matter of Green, 968 F.3d 516, 520
   (5th Cir. 2020) (internal quotation marks and citation omitted) (emphasis
   added).
          This Court has noted that “actual fraud” under the Texas veil-
   piercing statute involves “dishonesty of purpose or intent to deceive.” In re
   Ritz, 832 F.3d 560, 567 (5th Cir. 2016) (internal quotation marks and citations
   omitted). We have further noted that “[c]ourts may deduce fraudulent intent

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                                        No. 19-50717

   from all of the facts and circumstances.” Spring Street Partners-IV, L.P. v.
   Lam, 730 F.3d 427, 443 (5th Cir. 2013). Under Texas law, intent is a
   “question of fact uniquely within the realm of the trier of fact.” In re Ritz,
   832 F.3d at 569 (internal quotation marks and citations omitted).
          Belliveau contends that the following evidence established a genuine
   issue of material fact regarding Barco’s dishonest purpose or deceptive intent
   in connection with the Barco Sublicense: (1) language in the Barco Sublicense
   wrongly stating that Barco already had a license to the Licensed IP, free of
   any royalty, (2) the disparity between the amount Barco paid for the
   Sublicense and the fair value of the rights obtained, and (3) other facts and
   circumstances, similar to the “badges of fraud” used for detecting fraudulent
   transfers, demonstrating Barco’s dishonest intent.
            As Belliveau contends, the Barco Sublicense states that Barco “has
   had, since [2008, when it acquired High End], a . . . license, free of any royalty
   . . . to the Licensed IP” and that it had been operating under an “informal
   license” to the Licensed IP. There is no evidence in the record supporting
   this statement. Moreover, the authority for an implied license submitted by
   Barco after oral argument in response to the Court’s questioning does not
   provide any legal basis for Barco’s contention that it had an implied license. 1
   The majority acknowledges that the statement in the Barco Sublicense is a
   “curious provision.” The majority submits, however, “even assuming [the
   provision] misstates the facts,” that “absent more” the provision does not
   raise any fact issue regarding any dishonest purpose on the part of Barco.

          1
            The authority cited by Barco, Wommack v. Durham Pecan Co., 715 F.2d 962 (5th
   Cir. 1983), involved the concept of “shop rights,” which is when an employer can obtain
   an implied license to use an employee’s invention when the employee makes the invention
   using the employer’s tools and services and during his employment. Belliveau was not an
   employee of Barco, and the great majority of the IP at issue was developed by Belliveau
   when he was self-employed.

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          The record, however, does contain “more”—starting with the
   disparity between Barco’s payment of $75,000 and the fair market value of
   the rights Barco obtained under the Sublicense. The Sublicense itself admits
   that the $75,000 payment “shall not be deemed to be any indication of, or
   any precedent for determining, the value of the Licensed IP.” 2 The only
   evidence in the record regarding the fair value of the rights Barco obtained
   was contained in the expert report submitted by Belliveau. The report
   determined that the fair market value of the Barco Sublicense was between
   $93.2 and $356.7 million, drastically more than the $75,000 paid by Barco.
           The majority again dismisses this evidence as “not enough” to
   support Belliveau’s veil-piercing claim, but it does so after impermissibly
   weighing the evidence. Specifically, in an apparent attempt to justify the
   $75,000 payment, the majority points out that that the Barco Sublicense did
   not grant Barco the right to sublicense and that Barco agreed not to sell
   certain competing licensed products for four years, after which the parties
   would negotiate a mutually agreeable royalty. The majority further submits,
   noting past sublicenses granted by High End, that the Barco Sublicense “was
   not the first time High End had sublicensed Belliveau’s intellectual property
   for an arguably small monetary consideration.” In my view, however, the
   majority’s analysis simply confirms that there is a genuine issue of material
   fact regarding whether the consideration Barco paid was grossly inadequate.
          The majority also submits that the $75,000 payment required by the
   Barco Sublicense shows at most that High End breached the provision in the
   High End License requiring it to “use commercially reasonable efforts to
   commercialize” Belliveau’s IP. A close review of the Barco Sublicense shows
   that High End did not just grant Barco a license and/or sublicense to
   Belliveau’s IP, but also “unconditionally, fully, and forever, release[d],
   discharge[d], and covenant[ed] not to sue [Barco] . . . under or related to any

          2
            There is no evidence explaining the $75,000 payment because High End and
   Barco have asserted a “common interest” privilege.

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                                     No. 19-50717

   Licensed IP . . . on or prior to the Effective Date, and any liability related
   thereto, regardless of the legal basis or theory of such liability.” Therefore,
   in addition to granting Barco licensing and/or sublicensing rights, High End
   agreed to give up certain rights it might potentially have against Barco in
   connection with the Licensed IP.
           This provision (which follows the implied license provision discussed
   above) shows, contrary to the majority’s conclusion, that this is more than
   just a “breach of contract case.” Specifically, the majority submits that “this
   is not a case in which Barco attempted to purloin High End’s assets in order
   to deprive Belliveau of the benefit of his High End License rights.” But the
   provision requiring High End to release any claims it might have against
   Barco with respect to Belliveau’s IP meant that High End is cut off from
   asserting any claims it might be able to assert against Barco, and, as a result,
   any additional funds/assets High End might be able to access from Barco in
   a claim relating to Belliveau’s IP.
           As Belliveau maintains, there are numerous other facts and
   circumstances, similar to the “badges of fraud” indicative of fraudulent
   transfers under the Texas Uniform Fraudulent Transfer Act (“TUFTA”),
   demonstrating Barco’s dishonest intent in executing the Barco Sublicense.
   The majority declines to consider the TUFTA badges of fraud because
   Belliveau cites to no authority showing that Texas courts look to such factors
   outside of the TUFTA context. However, as noted above, “[c]ourts may
   deduce fraudulent intent from all of the facts and circumstances.” Spring
   Street Partners-IV, L.P., 730 F.3d at 443.
           The badges of fraud constitute facts and circumstances indicative of
   fraudulent transfers which (like a veil-piercing claim) also require fraudulent
   intent. Simply because such factors are listed under TUFTA does not mean
   that such factors are not relevant or that courts are prohibited from reviewing
   those factors when determining fraudulent intent in other cases. For
   example, the first factor, whether “the transfer or obligation was to an
   insider,” is directly relevant here, as Barco was the sole shareholder of High

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                                    No. 19-50717

   End when the Barco Sublicense was executed. The third factor is also
   applicable here: “the transfer or obligation was concealed.” Belliveau had no
   knowledge of the Barco Sublicense until Barco raised it as the basis for a
   counterclaim against Belliveau in this litigation for declaratory judgment of
   non-infringement. The fourth factor, whether the debtor had been
   threatened with suit, also applies here. Belliveau had threatened to sue Barco
   for infringing his IP at the time of the Barco Sublicense.
          Based on the foregoing, a jury could reasonably infer that Barco
   committed actual fraud when it executed the Barco Sublicense with High
   End. The Barco Sublicense falsely states that Barco had a preexisting
   “informal license” to the vast array of licensed patents and licensed
   technology developed by Belliveau and covered by the High End License.
   And to avoid any doubt regarding the implied license, High End agreed to
   release Barco from any liability related to the Licensed IP. This release
   conveniently occurred after Belliveau threatened to sue Barco for
   infringement. Furthermore, the Barco Sublicense granted Barco a formal
   license/sublicense to High End’s and Belliveau’s patent portfolio, as well as
   Belliveau’s future IP. For all of this, Barco paid High End $75,000, of which
   Belliveau is entitled to half. Belliveau’s expert report, which is the only
   valuation evidence in the record, opines that Barco should have paid between
   $93.2 and $356.7 million for a license to this valuable IP. Based on this
   competent summary-judgment evidence, a jury could find that the price paid
   by Barco, and the amount Belliveau would receive, was grossly inadequate.
          The Barco Sublicense was confected between High End and its sole
   shareholder, Barco. This was clearly an “inside” deal, executed in the middle
   of negotiations between Barco and ETC. Barco subsequently sold all of its
   shares in High End to ETC. A jury could infer that the Barco Sublicense
   played a part in persuading ETC to close the deal.
         Mr. Belliveau deserves to have a jury decide all of these fact issues.
   Therefore, I respectfully dissent.

                                        24