Court Opinion

ID: 3125557
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:10:33.581958+00
Date Added: 2024-06-11T11:45:45.243278
License: Public Domain

Opinion issued January 12, 2012.

In The
Court of
Appeals
For The
First District
of Texas
————————————
NO. 01-10-00227-CV
———————————
Douglas W. Strebel, Appellant
V.
John C.
Wimberly II,
Appellee

 

 
On Appeal from the 10th District Court
Galveston County, Texas

Trial Court Case No. 07-CV-0207
 

 
O P I N I O N
This is an
appeal from a judgment following a jury trial. 
Plaintiff John Wimberly sued defendant Douglas Strebel to recover profit
distributions from their business ventures that Wimberly alleges Strebel
wrongfully withheld.  The trial court
entered judgment on the jury’s finding that Strebel breached his fiduciary
duties to Wimberly and awarded to Wimberly actual damages and attorneys’
fees.  We reverse the trial court’s
judgment on Wimberly’s breach of fiduciary duty claims because we conclude that
the parties contractually disclaimed the fiduciary duties related to profit
distributions to Wimberly.  We remand to
the trial court for consideration of the jury’s alternative liability and damages
findings on Wimberly’s minority oppression claims and for reconsideration of
its attorneys’ fees award in light of our opinion.        
BACKGROUND
Plaintiff Wimberly has extensive
background and expertise in corporate tax compliance and planning.  He met, and became close friends with, defendant Strebel while working at Shell Oil Company.  Wimberly worked in the Research and Planning
division developing structured transactions. 
Strebel began in Shell’s tax department and later moved on to mergers
and acquisitions, eventually leaving Shell to go into investment banking. 
A.   Black River Capital, LLC (f/k/a
Longhorn Trade, LLC)
In February 2003, Wimberly and Strebel
went into business together.  They formed—under Delaware law—Longhorn Trade, LLC as 50/50 members to provide
advisory tax services to third parties.  In
its first year, the company handled only 3 or 4 small deals, and no funds were
distributed to members.  In February of
2004, the name of Longhorn Trade was changed to Black River Capital, LLC (Black
River LLC).  
B.   The TXU Engagement and 2004 Profit
Distributions 
Around the time Longhorn Trade was
formed, Strebel began talks with John Wilder, an old friend who had recently
become the CEO of TXU Energy, about potentially doing some work for TXU.  The resulting contracts became the focus of
Wimberley’s and Strebel’s business ventures, and also the source of the
majority of the profits forming the basis of the underlying lawsuit.  Given that this work for TXU arose from Strebel’s
relationship with Wilder, Wimberly and Strebel orally agreed early on to change
their profit-sharing percentages to 60% to Strebel and 40% to Wimberly.  
Later in 2004, TXU formally engaged
Black River LLC under a one-year advisory agreement.  Under that agreement, TXU agreed to pay Black
River LLC a $208,000 monthly retainer, as well as substantial success
fees.  During 2004, Wimberly helped TXU
structure about 30 transactions under that agreement.  This TXU agreement, which accounted for 95%
of Black River LLC’s revenue, brought over $7 million in advisory fees and over
$6.5 million in net profits for 2004. 
Pursuant to their agreement, $2,610,291 (40%) was allocated to Wimberly
in 2004, and $3,915,437 (60%) was allocated to Strebel. 
In April 2005, Black River LLC and
TXU signed a new, three-year agreement. 
It mandated that 95% of Wimberly’s time and 75% of Strebel’s time be
devoted to TXU’s business and continued to provide for an approximately
$208,000 monthly retainer and success fees. 
It also provided that TXU would pay Black River LLC $3,000,000 if TXU
was ever sold.   
C.   The 2005 Agreements
As their business grew and they
continued work on multiple TXU projects, Wimberly and Strebel began discussing
the future direction of their company and negotiating long-term agreements.  They also hired two new employees, Alejandro
Sole and Federico Brom, and brought in a friend of Strebel’s, Eric Manley, to
develop new business. 
In December 2005, Wimberly and
Strebel executed several documents that altered their entity structure to (1)
memorialize some changed and additional agreed-upon terms, (2) provide
additional specifics about business purpose, management, and operations, (3)
comply with certain federal securities regulations, and (4) minimize Texas
franchise tax liability.  
1.     The Amended Black River LLC Agreement
First, on December 8, 2005, Wimberly,
Strebel, and their respective wives, Donna Wimberly (Donna) and Lee Strebel
(Lee), executed an Amended and Restated Limited Liability Company Agreement of
Black River Capital, LLC, which provided an effective date of almost two years
earlier—January 1, 2004. 
a.    
Members and Managers
That agreement, among other things,
designated:
-   Strebel and Wimberly as the Members with sharing ratios of 60% and
40% respectively in the LLC’s profits,
-   Wimberly, Strebel, Donna, and Lee as Managers of the LLC,
collectively the Board of Managers, and
-   Strebel as Managing Manager and CEO of the LLC, with broad
decisionmaking and management powers.
b.    
Strebel’s Decision-making Authority
The Amended Black River LLC
Agreement prohibited Strebel from making “any Major Decision without Consulting
with the Board of Managers.”  “Major
Decisions” include: 
-        
changing any Member’s Sharing Ratio,
-        
requesting additional Capital Contributions, and
-        
making any Fundamental Changes in the Company.
Also encompassed in the definition
of Major Decisions was “causing” Black River LLC to take action in its capacity
as a partner, owner, or manager of affiliated entities or a subsidiary that
would be a Major Decision at the LLC level.  “Consulting with the Board of Managers” means
discussion at a meeting with a quorum of Managers after due notice and adequate
information is provided.  Another consulting
requirement under the agreement provides that Wimberly must be fully informed
on an ongoing basis about substantive negotiations concerning any Fundamental
Change (i.e., merger, acquisition, or other event that would change ownership),
or any admission of a new Member that would decrease Wimberly’s Sharing Ratio. 
Strebel had the power, as Managing
Manager, to require Members to make additional Capital Contributions in cash
“in such amounts as are necessary to continue the business of the
Company.”  Wimberley’s Capital Contributions,
however, could not exceed $500,000 per year without his consent.  
Strebel’s Managing Manager powers
were circumscribed by a prohibition on taking eleven specific actions without
Wimberly’s approval.  Under this
provision, Strebel could not reduce Wimberly’s Sharing Ratio “to a level less
than 30% for TXU Business prior to January 1, 2006 or 25% for TXU Business
thereafter.”
c.     
Fiduciary Duties
The Amended Black River LLC
Agreement provided that “the Managers shall have fiduciary duties to the
Company and the Members equivalent to the fiduciary duties of directors of
Delaware corporations.”  It also contains
a provision that the “Members shall have fiduciary duties to the Company
comparable to stockholders of Delaware corporations.”           
2.     The Black River Capital Partners, LP
Agreement 
Also on December 8, 2005, Wimberly,
Strebel, Lee and Manley executed an Agreement of Limited Partnership of Black
River Capital Partners, LP (Black River Capital LP), which formed a new limited
partnership as of August 12, 2005. 
a.     Members and Powers
Under this agreement, Black River
LLC was appointed as the general partner and, with limited exceptions, granted
broad and exclusive power and authority to control Black River LP.  Wimberly, Strebel, Manley, and Lee became limited
partners of Black River LP, agreeing not to take “part in the management or
control . . . of the Partnership’s business,” and, in their capacity as limited
partners, have “no right or authority” to act for the LP.            
b.    
Assets and Profit Sharing
The Black River LP Agreement
required Black River LLC, as the general partner, to assign and contribute all
of its business assets, including its 2005 TXU contract, to Black River LP.  The LP agreement also contained different
profit allocation and Sharing Ratios. 
Lee was guaranteed the first $310,000 of any TXU profits, with the
remainder of TXU profits split among: Black River LLC (1%), Strebel (59.37%),
Wimberly (34.63%), and Manley (5%).  The
Sharing Ratio for all other Advisory Business Profits was: Black River LLC
(1%), Strebel (4.6%), Wimberly (4.4%), Manley (5%), with the remainder to be
allocated individually based on particular client engagement letters and
terms.  The general partner, Black River
LLC, was empowered to change the Sharing Ratio of any partner based on a
majority vote of the limited partners, provided no change could reduce
Wimberly’s share of TXU profits below 30% prior to January 1, 2006, or below
25% thereafter.  The general partner
could also require mandatory capital contributions from partners, with the
caveat that the maximum that Wimberly could be required to contribute in
capital to the limited partnership and any of its affiliates was $500,000 per
year. 
c.     
Fiduciary Duties
The Black River LP Agreement
provides that “the General Partner shall have no duties (including fiduciary
duties) except as expressly set forth in th[e] Agreement.”  No other provision in the agreement imposes
fiduciary duties upon the general partner. 

3.     BRC Securities, LP
On December 8, 2005, the same day
that the Amended Black River LLC Agreement and the Black River LP Agreements
were signed, Strebel and Wimberly executed documents to form another limited
partnership, BRC Securities, LP.  The
genesis was concern about whether a NASD license was needed for certain
business activities, which could be held by this separate entity.  Black River LLC was designated as the general
partner, and Black River LP was the sole limited partner.  
D.   2005’s Profit Distribution   
In December 2005, pursuant to the
Black River LP Agreement, Black River LLC assigned the TXU contract and its
other assets to the Black River LP retroactively, as of August 12, 2005.  The LLC’s revenue was then split for the
year, with $2,111,237 retained by the LLC, and $1,065,769 allocated to Black
River LP.  
Of Black River LLC’s 2005 net
income of $1,527,396, Strebel was allocated $916,438 (60%) and Wimberly
$610,958 (40%).  All of Black River LP’s
$238,450 net income was distributed to Lee and Manley under the Black River LP
agreement, with no positive allocation to Strebel or Wimberly.  
E.  
2006 Partnership/Share
Ratio Changes and Profit Distributions 
On November 9, 2006, Strebel
emailed Wimberly that, effective January 1, 2006, Wimberly’s Sharing Ratio in
TXU work would be reduced to 25%.  On
September 17, 2007, Strebel—acting as
Managing Manager of Black River LLC (the general partner) and as holder of the
Majority of the limited partner voting rights—amended the Black River LP Agreement. 
This amendment, which was made retroactively effective August 1, 2006,
made Steve Houle a limited partner.    As
of January 1, 2006, Houle was allocated a 7.5% Sharing Ratio in profits from
TXU business; Manley’s Sharing Ratio was increased from 5% to 7.5%, and Wimberly’s
Sharing Ratio was reduced from 34.63% to 24.63%.[1]  
In 2006, Black River LP generated
about $7,300,000 in revenue—all but
$110,000 from TXU business.  Profits for
2006 were approximately $5,393,233, of which $1,244,673 (23%) was distributed
to Wimberly. 
F.    The 2007 Dispute and Wimberly’s
Departure 
In January 2007, Wimberly
complained to Strebel about retroactively reducing his Sharing Ratio, and about
him doing so without consulting with the LLC’s Board of Managers.  When Strebel refused to reconsider, Wimberly
hired counsel, who sent a demand letter requesting access to books and records
of the Black River Entities and complaining of Strebel’s failure to conduct a meeting
or consult with the Board of Managers about changes.  The relationship quickly deteriorated and, on
February 16, 2007, Wimberly and his wife sued Strebel in Galveston County.  
On February 21, 2007, Strebel
issued a Capital Call, requiring himself to inject $750,000 in cash in the
Black River LLC, and requiring Wimberly to inject $500,000 to be immediately
contributed to Black River LP.  The trial
court enjoined Strebel from enforcing the Capital Call against Wimberly or from
deeming his interest in Black River LLC tendered for failure to comply with the
Capital Call. 
Two days later, on February 23,
2007, Wimberly was briefly hospitalized following an episode at the office related
to his depression medications.  On
February 26, 2007, TXU announced it was in negotiations with a potential
purchaser and, consequently, “shut down permanently” all of the Black River
projects Wimberly worked on.  While
Wimberly continued working on non-TXU business at home, he never returned to
Black River’s offices.
G.  The New TXU Agreement
After the TXU sale was announced,
Strebel renegotiated the terms of the engagement with TXU.  While the existing agreement between TXU and
Black River LLC did not terminate until April 1, 2008, the new agreement—between TXU and Black River Securities, LP and
Black River LP—was for the same temporal
term.  This new agreement expressly
superseded the prior agreement between TXU and the LLC (which had been assigned
to the LP), and TXU agreed to pay $3,000,000 under the new agreement for the
termination of the earlier agreements and “for the services provided under such
prior agreements.” 
The new agreement made no mention
of Wimberly and provided for 50% of Strebel’s time to be devoted to TXU
business.  It also contained a term, as
did the earlier TXU agreement, providing for a $3,000,000 payment from TXU upon
to the sale of TXU to a third party.  
H.  2007’s Income and Distributions
TXU made both $3,000,000 payments
in 2007—one triggered by termination
of its earlier agreements with Black River LLC and one triggered by the sale of
TXU to a third party.  These payments
contributed in large part to Black River LP’s gross income of $8,821,029 in
2007.  That same year, for the first
time, bonuses were awarded to partners. 
Specifically, Black River LP awarded Strebel $3,000,000 in bonuses, as
well as another $1,000,000 in bonuses to Houle and Manley.    
Of the net income of $2,017.000 of
the Black River LP and net income of $51,266 of Black River LLC, allocations of
$539,148 to Wimberly were reported, but not paid to him, resulting in a tax
liability to Wimberly of more than $200,000 on the undistributed allocation.  After Wimberly filed a motion to in the
district court to compel a distribution consistent with Black River LP’s tax
return allocations and his K-1, the LP revised its return to reflect Wimberly’s
distributions were zero.[2]   
In January 2008, the trial court
issued a temporary injunction prohibiting Strebel from causing or permitting
the LLC or LP to reduce Wimberly’s Sharing Ratio in any Black River entity
below 25% of TXU’s business.  The court
further ordered Strebel to cause the LLC or the LP to pay into the Court’s
registry “the equivalent of 25% of the TXU profits when compared to the other
75% of the TXU profits disbursed to any of the other partners for tax years
2007 or 2008.”  After that order and a
subsequent sanctions order deeming the initial deposit inadequate, a total of
$438,702 was deposited.               
THE PARTIES’ CLAIMS
Wimberly’s live pleading at the
time of trial asserted claims for (1) Breach of Fiduciary Duty, (2) Unjust
Enrichment, (3) Oppression of a Minority Member/Owner, (4) Defamation, and (5)
Breach of Contract.  He sought actual
damages, exemplary damages, equitable relief and attorney’s fees. 
Strebel pleaded affirmative
defenses of (1) Prior Breach, (2) Failure of Consideration, (3) Unclean Hands,
(4) Parol Evidence Rule, (5) Business Judgment Rule, (6) Waiver, and (7) Accord
and Satisfaction.  His answer also
asserted that Wimberly lacked standing to bring some or all of his claims, and
that the various terms of the Black River LLC Agreement and Black River LP
Agreement barred his claims.  Strebel
further alleged that Wimberly’s claims were defeated by Wimberly’s own breaches
of fiduciary duties to Strebel and by Wimberly’s suing Strebel in the wrong
capacity.  Strebel counterclaimed for a
Declaratory Judgment that Wimberly has “committed willful malfeasance, bad
faith, and gross negligence in disregard of his obligations to the Companies;
materially breached his obligations under the Agreements; and failed to cure
such breach within thirty (30) days after receiving written notice of such
breach.”  Strebel also sought attorney’s
fees.  
THE JURY TRIAL AND VERDICT
The case proceeded to a jury trial
in September 2009.  Wimberly’s theory was
that his work for TXU was above reproach, and that Strebel acted in bad faith—and contrary to his fiduciary duties—to deprive Wimberly of distributions by
retroactively reducing his percentages and shifting money from profit to
bonuses to reduce funds available for profit distributions.  In response, Strebel argued that all his
actions were taken in good faith, in furtherance of legitimate business interests,
and that Wimberly was not pulling his own weight and was acting in bad faith by
engaging in inappropriate conduct and working to advance endeavors outside the
Black River entities.  The jury returned
a verdict in Wimberly’s favor.
A.   Fiduciary Duties
The Court instructed the jury that
Strebel owed a fiduciary duty to Wimberly:
Because of the relationship
of Douglas Strebel and John Wimberly as co-owners of Black River Capital, LLC
with Douglas Strebel owning a majority share and exercising control over Black
River Capital LLC as Managing Manager; and because of the relationship of
Douglas Strebel and John Wimberly as partners in Black River Capital Partner,
LP, Douglas Strebel owed John Wimberly a fiduciary duty of due care, good faith
and loyalty in managing the business of the Black River Entities.
The jury then found that Strebel “fail[ed] to comply
with his fiduciary duty,” and awarded $2,748,925 for Wimberly’s “Loss of
Distribution Sustained in the Past.” 
B.   Oppression            
The jury found in Wimberly’s favor
on his minority oppression theory and awarded $200,000 as compensation for
oppression for “Loss of distributions sustained in the past.”  
C.   Exemplary Damages and Strebel’s
Counterclaims and Defenses
Because the jury’s verdict was not
unanimous, the jury did not reach the issue of exemplary damages.  On Strebel’s counterclaims and defenses, the
jury failed to find that Wimberly “engaged in any bad faith in disregard of his
material duties,” or that Wimberly breached the Black River LLC Agreement or
the Black River LP Agreement. 
THE JUDGMENT
The court entered judgment for
Wimberly, awarding the $2,748,925 in actual damages found by the jury for
breach of fiduciary duties plus prejudgement interest and costs.  In addition, the court awarded Wimberly
$400,000 for trial attorneys’ fees, as well as conditional appellate attorneys’
fees of $75,000 for an appeal to this Court and $50,000 for an appeal to the
Supreme Court of Texas.    
THIS APPEAL
In seven issues, Strebel requests
that the Court reverse the trial court’s judgment and render judgment in his
favor or, alternatively, reverse the trial court’s judgment and remand the case
for a new trial.  
In his first issue, Strebel argues
that the trial court erred by entering judgment in Wimberly’s favor because (a)
Strebel did not owe Wimberly any fiduciary duties at the LLC level and, in any
event, Wimberly’s “loss of distributions” stemming from any breach of fiduciary
duty was at the LP—rather than
the LLC—level, (b) Strebel did not
owe a fiduciary duty to Wimberly at the LP level because, as a matter of law,
limited partners in Texas do not owe fiduciary duties to other limited
partners, and (c) Wimberly did not sue the LP’s general partner, “which took
the actions that allegedly caused Wimberly to lose distributions, and the trial
court did not instruct the jury . . . that Strebel, as the  managing manager of the [LP]’s general partner, owned a fiduciary duty to Wimberly as a limited
partner.”  
In his second issue, Strebel argues
that the trial court erred by entering judgment for Wimberly because “(a) fiduciary
duties do not create duties in derogation of the express terms of the parties’
agreements, and (b) all of the acts that allegedly caused Wimberly to lose
distributions were required or permitted by the terms of the parties’” LLC and
LP agreements. 
In his third issue, Strebel argues
a new trial is required because “Wimberly’s damages for lost distributions were
based, in large part, on claims regarding alleged improper payments that
Wimberly was required to bring derivatively” on behalf of the LP or LLC, rather
than individually.  
In his fourth issue, Strebel argues
that the trial court’s finding that “Strebel failed to comply with a fiduciary
duty [is] immaterial because it seeks to impose fiduciary duties far broader than
the parties’ agreements allow, and does not take into account the controlling
contractual provisions that limit Strebel’s duties and liability to
Wimberly.”  Alternatively, Strebel
contends a new trial is required because the court “failed to submit a
requested question on Strebel’s affirmative defense based on the exculpation
clause” in the parties’ LP agreement.
In his fifth issue, Strebel argues
that the trial court erred by “commingling invalid and arguably valid theories
of liability” and that error was harmful because “It is not possible to tell
the ground or grounds on which the jury found that Strebel ‘failed to comply
with his fiduciary duty.”  
In his sixth issue, Strebel argues
that the evidence is legally or factually insufficient “to support the award of
$2,748,925 in lost distributions when Wimberly’s damages expert ignored the
sharing ratios assigned to Wimberly and other limited partners, and made arbitrary
adjustments to the companies’ expenses and distributable profits.”  
In his seventh issue, Strebel
argues that the trial court erred by awarding Wimberly attorneys’ fees because
“attorney’s fees are not recoverable for breach of fiduciary duty claims, and
Wimberly did not prevail on any claim for which attorney’s fees are
recoverable.”  
ANALYSIS
A.   Fiduciary Duties
The Court instructed the jury that
a fiduciary duty existed by virtue of two relationships between Strebel and
Wimberly—their relationship at the
LLC level (Strebel as Managing Member and Wimberly as a Member) and their
relationship at the LP level (both as limited partners).  Neither party argues that the question of
whether a fiduciary duty existed was a question for the jury in this case.  Rather, both parties appear to agree that it
was a question for the court to decide as a matter of law. Specifically, they
both agree that (1) whether Strebel owed Wimberly a fiduciary duty at the LLC
level turns on interpretation of language in the Black River LLC agreement, and
(2) whether Strebel owed Wimberly a fiduciary duty at the LP level turns on
whether limited partners owe other limited partners fiduciary duties under
Texas law.     
1.    
Fiduciary
duties related to Black River LLC
The Black River LLC Agreement is
governed by Delaware law and thus governed by the Delaware Limited Liability
Company Act.  An express policy of the
Act is “to give the maximum effect to the principle of freedom of contract and
to enforceability of limited liability company agreements.”  Del.
Code Ann. tit. 6, § 18-1101(b)
(West 2010).  Towards that end, it
expressly provides that a member’s or manager’s duties—including fiduciary duties—to the LLC or other members or managers “may be
expanded or restricted or eliminated by provisions in the limited liability
company agreement,” so long as it does not “eliminate the implied contractual
covenant of good faith and fair dealing.” 
Del. Code Ann. tit. 6, § 18-1101(c) (West 2010).  Delaware courts have thus recognized that the
existence and scope of any fiduciary duties of manager or members usually must
be determined by reference to the specific LLC agreement.  See,
e.g., Douzinas v. Am. Bureau of Shipping, Inc., 888 A.2d 1146, 1149–50 (Del. Ch. 2006) (recognizing that, because section
18-1101 permits contracting parties to expand or restrict fiduciary duties in
LLC agreements, “it is frequently impossible to decide fiduciary duty claims
without close examination and interpretation of the governing instrument of the
entity giving rise to what would be, under default law, a fiduciary
relationship.”).   
The Black River LLC Agreement states:

Except as otherwise provided in this
Agreement, the Managers shall have fiduciary duties to the Company and the
Members equivalent to the fiduciary duties of directors of Delaware
corporations. 
[PX 2 at § 7.5(a).]  The Delaware Supreme
Court has characterized a “director’s fiduciary duty to both the corporation
and its shareholders” as that of “due care, good faith, and loyalty.”  Malone
v. Brincat, 722 A.2d 5, 10 (Del. 1998). 

Strebel argues that because, under
Delaware law, a director’s fiduciary duty “runs to the corporation and to the
entire body of shareholders generally, as opposed to specific shareholders,” Strebel as the Managing Manager owed
fiduciary duties to the LLC and its members collectively—not to Wimberly individually.  It follows, according to Strebel, that the
jury’s finding Strebel breached his fiduciary duty under the LLC Agreement in
response to “Question 1 cannot support a judgment for Wimberly.”
In response, Wimberly points out
that Strebel’s proffered interpretation of the LLC agreement ignores the
inclusion of “Members” in the clause providing that the “Managers shall have
fiduciary duties to the Company and the
Members.”   Wimberly also notes that,
absent an explicit contractual disclaimer disavowing the application of default
principles, Delaware courts have treated “LLC members as owing each other the
traditional fiduciary duties that directors owe a corporation.”  He urges us to conclude that Strebel’s
interpretation of the agreement to provide that fiduciary duties run to Members
only collectively rather than individually is “illogical ([as] it is undisputed
that Wimberly was the only other Member) and contrary to the plain language of
Section 7.5(a), and it confuses to whom Strebel owed a duty (i.e., the Members”) with the nature and
scope of that duty (i.e., equivalent to that owed by corporate directors).” 
We agree with Wimberly.  Under both Texas and Delaware law, contracts
should be read as a whole, with terms given their plain, ordinary, and
generally accepted meaning, and with each term given effect so as not to render
recitations meaningless or mere surplusage. 
E.g.,Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 662 (Tex. 2005); Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010).  Applying these principles, we recently
rejected an argument similar to that made by Strebel here.  In Allen
v. Devon Energy Holdings, L.L.C., we interpreted a clause in a Texas LLC
agreement recognizing a manager’s liability for breach of his “duty of loyalty to the company or its members” to
include fiduciary obligations to both the company and its individual members.  ___ S.W.3d ___, ___ 2011 WL 3208234, at *28
& n.26 (Tex. App.—Houston [1st Dist.] 2011, no pet. h.) (emphasis
added).  Insisting that he could not be
liable to an individual member of the LLC, the manager in Allen argued “that the phrase ‘or its members’ refers to the owners
collectively, and therefore is only describing the duty to the limited
liability company itself.”  Id. at *28 n.26.  We rejected that argument, noting that this
“interpretation makes this phrase superfluous because the duty to the
corporation is stated in the same sentence.” 
Id.
In this case, we hold that the
trial court correctly interpreted the Black River LLC Agreement as imposing
upon Strebel, as a Managing Manager, duties of due care, good faith, and
loyalty to Wimberly as an individual Member. 
We read the LLC’s Agreement reference to the Manager’s duties being
“equivalent to the fiduciary duties of directors of Delaware corporations” not
to limit to whom the duties are owed,
but instead to identify the type of duty,
i.e., due care, good faith and loyalty. 
The earlier part of the clause—i.e., “the Managers shall have fiduciary duties to the Company and the Members” (emphasis added)—identifies to whom the duties are owed.  To interpret it otherwise would give no
meaning to the word “Members.”  The trial
court thus did not err in instructing the jury in Question No. 1 that Strebel
owed a fiduciary duty to Wimberly as the Managing Manager of the Black River
LLC.   
2.    
Fiduciary
duties related to Black River LP     
The Black River LP Agreement was
entered pursuant to the Texas Revised Limited Partner Act (TRLPA) and is
governed by Texas law.  The agreement is
silent as to any fiduciary duties owed between and among the limited partners—i.e., Strebel, Wimberly, Manley, and Lee.  In Question No. 1, the trial court instructed
the jury that “because of the relationship of Douglas Strebel and John Wimberly
as partners in Black River Capital Partner, LP,” Strebel owed to Wimberly a
fiduciary duty.   
Strebel argues that this
instruction was erroneous because, under Texas law, “a person’s mere status as
a limited partner is insufficient to create fiduciary duties,” and the LP
agreement expressly disclaims any fiduciary duty owed by the general partner.  In support, he cites two unpublished cases—Crawford v.
Ancira, No. 04-96-00078-CV, 1997 WL 214835, at *5 (Tex. App.—San Antonio, April
30, 1997, no writ) (not designated for publication) and AON Props. Inc. v. Riveraine Corp., No. 14-96-00229-CV, 1999 WL
12739, at *23 (Tex. App.—Houston [14th Dist.] Jan. 14, 1999, no pet.) (not
designated for publication)—and an
article positing that limited partners should not owe fiduciary duties because
they are passive investors.  Miller, Fiduciary Duties, Exculpation, and
Indemnification in Texas Business Organizations, at 11–12, 15–16, in State Bar of Tex. Prof. Dev. Program, Essentials of Business Law
Course (2010).         
Strebel also argues that, because a
shareholder in a closely held corporation does not “as a matter of law owe a
fiduciary duties to his co-shareholder[s], . . . it follows with even more
force that limited partners in a Texas limited partnership do not as a matter
of law owe fiduciary duties to each other.” 
For these reasons, Strebel argues that his relationship with Wimberly as
a limited partner cannot support the jury’s finding of a breach of fiduciary
duty.    
Wimberly disagrees, noting that the
TRLPA, which Strebel agrees governs, provides that “[i]n any case not provided
for by this Act,” the Texas Revised Partnership Act (TRPA) “and the rules of
law and equity” govern.  Tex. Rev. Civ. Stat. Ann. art. 6132a-1 § 13.03(a)(c) (Vernon 2002).[3]  Because TRLPA contains no provisions about
duties owed by limited partners to each other, Wimberly argues that the “TRPA
therefore determines what fiduciary duty Strebel owed Wimberly,” and it
expressly provides that “[a] partner owes to the partnership and the other
partners: (1) a duty of loyalty; and (2) a duty of care.”  Tex
Rev. Civ. Stat. Ann. art. 6132b-4.04(a) (Vernon 2002 & Supp. 2010).[4] 
Finally, Wimberly notes that that
Strebel relies only on two non-precedential, unpublished cases that are
distinguishable on their facts and that do not cite or acknowledge—much less explain—why the express duties provided for by the TRPA do not apply through the
TRLPA.  Wimberly also points out that both
the Fifth Circuit and the Texarkana Court of Appeals have, in more recently
decided cases, expressly recognized that fiduciary obligations exist between
limited partners.  See McBeth v Carpenter, 565 F.3d 171, 177 (5th Cir. 2009) (“With
respect to fiduciary duties owed by . . . [defendant] limited partners to the
Plaintiffs, Texas law recognizes such obligations between limited partners,
applying the same partnership principles that govern the relationship between a
general partner and limited partners.”); Zinda
v. McCann St., Ltd., 178 S.W.3d 883, 890–91 (Tex. App.—Texarkana 2005, pet. denied) (recognizing limited partners
owe fiduciary duties to one another, including the duty to fully disclose all
matters affecting the partnership and account for all profits and property, as
well as a strict duty of good faith and candor).     
As a recent commentator aptly
observed, the relevant question is more nuanced than simply whether limited
partners, as a matter of law, do or do not owe fiduciary duties to other
limited partners.  See Colin P. Marks, Limited
Partnership Status and the Imposition of Fiduciary Duties in Texas, 63 Baylor L. Rev. 126, 132 (2010).  A look at the facts presented in these seemingly
conflicting cases demonstrates that they are reconcilable with the rule that
status as a passive investor does not give rise to fiduciary duties, but that a
party’s status as a limited partner does not insulate that party from the
imposition of fiduciary duties that arise when a limited partner also takes on
a nonpassive role by exercising control over the partnership in a way that
justifies the recognition of such duties or by contract.  See id.
at *128 (“[T]hough Texas jurisprudence has failed to articulate a clear rule,
it is consistent with the cases decided thus far and the nature of a limited
partnership to only create a fiduciary duty in certain equitable circumstances,
such as when the limited partner is exercising control over the limited
partnership or is also acting in the role of general partner.”).  When a person serves in a dual capacity as a
limited partner and as a person controlling or managing the affairs of a
limited partnership, it is not the party’s status as a limited partner that
gives rise to fiduciary duties; rather those duties exist by virtue of the
additional relationship, such as agent or employee, in which capacity that
person controls or manages the business of the partnership or by contract.        
In Crawford v. Ancira, the first case Strebel cites, a limited partner
plaintiff  brought fraud claims against another limited partner in an
attempt to avoid certain contractual obligations, claiming that limited partner
had made misrepresentations to her that were contrary to the contractual
terms.  1997 WL 214835, at *4.  Recognizing that the plaintiff’s fraud claim
was only viable if a fiduciary or confidential relationship existed between the
parties, the San Antonio Court of Appeals rejected her claim.  Id.  The court reasoned that limited partners do
not have the broad managerial powers enjoyed by general partners and, thus, “a
person’s mere status as a limited partner is insufficient to create fiduciary
duties.”  Id. at *5.  Notably, the
defendant in Crawford was not also
the general partner, nor was there any indication that the defendant exercised
any management or control over the limited partnership affairs.
The second case Strebel cites, AON Properties v. Riveraine Corporation, involved
a suit by one limited partner against another limited partner for breach of
fiduciary duty, complaining about the defendant limited partner’s actions in 
(1) voting down an agreement to sell the limited partnership to a third party,
and (2) voting to remove a corporation as general partner after that
corporation lost its charter.  1999 WL
12739, at *1, 23.  The trial court
instructed the jury that the limited partners “owe[d] each other fiduciary
duties as a matter of law.”  Id. at *7.  On appeal, the Fourteenth Court of Appeals in
Houston held that this instruction was erroneous, relying on cases from other
jurisdictions holding that “a limited partner does not owe a fiduciary duty unless it actively engages in control over the operation of the business so as
to create duties that otherwise would not exist.” Id. at *23  (emphasis
added).  Because the TRLPA provisions
applicable at the time provided that “a limited partner does not participate in
the control of the business” by voting on the sale of “an asset or assets of
the limited partnership” or by voting on the “admission, removal or retention
of the general partner,” the court concluded that the actions complained of by
the plaintiff did not amount to the types of control that could given rise to a
duty to the other limited partners. 
Thus, consistent with Crawford,
the AON Properties court looked to
the issue of management and control by the limited partner in assessing what
duty, if any, existed.  
In support of his argument that
limited partners do owe each other fiduciary duties, Wimberly cites Zinda v. McCann Street, Ltd., a case in
which one limited partner sued a general partner and other limited partners for
breach of fiduciary duty.  178 S.W.3d at 890.  The jury returned a verdict in favor of the
general partner and the two limited partners that owned the general
partner.  Id.  On appeal, the Texarkana
Court of Appeals made no distinction between the general partner defendant and
the two limited partner defendants in observing that the “relationship among
the various parties was a partnership; thus the [defendants] owed fiduciary
duties to” the plaintiff.  Id. at 890.  The court concluded, however, that the
evidence supported the jury’s finding that no duties had been breached,
rendering its broad pronouncement about the relationships giving rise to the
fiduciary duties dicta.  Id. 
While not part of the Zinda
court’s analysis, it is noteworthy that the limited partners at issue there
also controlled the general partner.  It
was thus not their status as limited partners but, rather, their operating control
over the partnership through the general partner that could give rise to
fiduciary duties.  Id.  
Finally, Wimberly cites McBeth v. Carpenter, a Fifth Circuit
case in which the court, “[a]fter careful review of the record and Texas law,”
affirmed a judgment against limited partners for breaching fiduciary duties to
other limited partners.  565 F.3d at 177.  McBeth and Reynold, the limited partner
plaintiffs in McBeth, obtained a verdict against three
parties: James Carpenter, Texas Water Solutions (TWS) and Texas Water
Management (TWM).  Id. at 174.  TWS and TWM were limited partners.  Id.
at 174–75.  Both TWS and TWM were entities
controlled by Carpenter, and Carpenter further controlled the general
partnership entity (not a party to the suit). 
Id.  On appeal, in discussing Texas law the court did
not distinguish between the fiduciary obligations of general partners and
limited partners.  Id. at 177–78.  The court did,
however, explain why—on the facts presented—Crawford
and AON Properties would not
compel a different result even if they had precedential value:
[TWS] and [TWM] maintain that limited
partners owe no fiduciary duties to one another, citing two unpublished Texas
cases . . . . [E]ven a review of these cases reveals that they do not stand for
the proposition urged by [TWS] and [TWM]. 
AON Properties sets forth that
even where no fiduciary duties normally arise, they spring into existence when
a limited partner “actively engages in control over the operation of the
business so as to create duties that otherwise would not exist.” AON Props., 1999 WL 12739, at *23.  Carpenter controlled both [TWS] and [TWM] and
the evidence at trial showed that it was often unclear on whose behalf
Carpenter was acting in exercising control over [the limited partnership].  Therefore, even accepting the argument that
fiduciary duties would not normally arise between limited partners, even AON Properties militates the opposite
conclusion due to the relationship between these parties.  
565 F.3d at 178 n.1. 
In response to TWS’s and TWM’s argument that there was no evidence that
TWS and TWM exerted any control, the court noted that while the “limited
partnership agreement itself specifically stated that the general partner
retained exclusive control and management over the partnership,” at trial
“extensive testimony established that Carpenter was ‘the man in control’” and
there was “evidence that Carpenter exerted control over [the limited
partnership] not just as general partner . . . but also in his capacity as
President of both” TWS and TWM.  Id. at 178. 
We reconcile these cases by holding
that status as a limited partner alone does not give rise to a fiduciary duty
to other limited partners.  That is not
to say, however, that a party who is a limited partner does not owe fiduciary
duties to other limited partners when that party, wearing a different hat, exerts
operating control over the affairs of the limited partnership.  For example, when a limited partner also
serves as an officer of the limited partnership, as in McBeth, that partner may owe fiduciary duties based on his agency
relationship to the partnership and the other limited partners, without regard
for his limited partner role.  The
existence and scope of that duty will be defined not by the law governing
limited partners, but rather by the relevant laws and contracts governing the
role under which the party is exercising the authority.  
In this case, Strebel complains
about the trial court’s instruction to the jury that “because of the
relationship of Douglas Strebel and John Wimberly as partners in Black River
Capital Partners LP,” Strebel owed Wimberly “a fiduciary duty of due care, good
faith, and loyalty in managing the business of the Black River Entities.”  The relationship between Strebel and Wimberly
as limited partners in Black River Capital Partners LP did not give rise to a direct
fiduciary duty to each other.  And, as
explained further below, to the extent that the instruction conveys that Strebel
owed a fiduciary duty to limited partners in his capacity as Managing Manager
of the LLC that that serves at the GP of the LP, the LP agreement expressly
disclaimed any fiduciary duty owed to the limited partners by the general
partner itself.  The trial court’s
instruction fails to account for the legal effect of this disclaimer.       
3.    
The trial
court commingled valid and invalid theories in Question No. 1.  
 
  A trial court errs by submitting
to the jury theories of liability that are not legally viable—e.g., liability
theories that have not been pleaded, are not supported by the legally
sufficient evidence, or are not supported by operative law. See Tex.
R. Civ. P. 277; Crown Life Ins.
Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000) (stating that Rule 277
implicitly mandates that the jury be able to base its verdict on legally valid
questions and instructions); see also
Romero v. KPH Consol., Inc., 166 S.W.3d 212, 215 (Tex. 2005) (“[B]road-form
submission cannot be used to put before the jury issues that have no basis in
the law or the evidence.”).
Strebel argues that the trial court
committed harmful error by commingling valid and invalid theories in Question
No. 1.  We agree.  The broad form question instructed the jury
that Strebel owed Wimberly a fiduciary duty at the LLC level, which is correct,
and at the LP level, which is not.  It is
thus impossible to determine whether the jury’s affirmative finding of a breach
of fiduciary duty in response to Question No. 1 is based on a valid or invalid
theory.  Casteel, 22 S.W.3d at 389–90.  We accordingly sustain
Strebel’s fifth issue that the trial court improperly commingled valid and
invalid theories in Question No. 1.    
Generally, such commingling error
mandates a new trial rather than rendition in the appellant’s favor.  See id.;
Powell Elec. Sys., Inc. v. Hewlett
Packard Co., __ S.W.3d __, ___, 2011 WL 1598758, at *7 (Tex. App.—Houston
[1st Dist.] 2011, no pet.).  But here
Strebel argues that he is entitled to rendition because—even if he owed Wimberly fiduciary duties at
the LLC or LP level as instructed in Question No. 1—“Wimberly did not sue the [LP]’s general
partner, which took the actions that allegedly caused Wimberly to lose
distributions, and the trial court did not instruct the jury in Question No. 1
that Strebel, as the managing manager of the [LP]’s general partner, owed a
fiduciary duty to Wimberly as a limited partner.”  Because, as explained below, we agree that
Wimberly’s recovery under Question No. 1 fails on causation grounds, we reverse
and render judgment on Wimberly’s fiduciary duty claims.  
B.   Causation
In addition to demonstrating duty,
to recover on a breach of fiduciary duty claim, the plaintiff must also prove breach
of that duty, causation and damages.  Las Colinas
Obstetrics-Gynecology-Infertility Ass’n v. Villalba, 324 S.W.3d 634, 645
(Tex. App.—Dallas 2010, no pet.) (citing Abetter
Trucking Co., Inc. v. Arizpe, 113 S.W.3d 503, 508 (Tex. App.—Houston [1st
Dist.] 2003, no pet.)); Graham Mortg.
Corp. v. Hall, 307 S.W.3d 472, 479 (Tex. App.—Dallas 2010, no pet.).       
Strebel asserts that, even if he
owed Wimberly the fiduciaries duties charged by the court, he did not breach
those duties because the damages alleged by Wimberly and found by the jury were
not caused by him acting in “the two ‘horizontal’ relationships defined in
Question No. 1 (i.e., the co-owner
and the limited partner relationships).” 
Rather, he contends that “Wimberly’s complaints regarding lost
distributions were primarily aimed in a ‘vertical’ direction — i.e.,
to the actions and decisions of the LP’s general partner (i.e., the LLC) in
exercising its exclusive authority to run the LP and Strebel’s alleged control
of the general partner.”  Both because
there is an express contractual disclaimer in the Black River LP agreement of
fiduciary duties owed by the general partner to the limited partner and because
there was no jury question about breaches of any duty by the general partner,
Strebel argues that Wimberly has failed to establish the breach of the duties found
by the Jury in response to Jury Question No. 1 caused his damages.
Wimberly responds that Strebel’s
argument “disregards the fact that the Black River entities were created
together with the intention that they be operated as one business; with
Strebel, as Managing Manager of Black River LLC, ultimately in control of all;
subject to the limitations imposed upon his exercise of such power.”  Further, Wimberly asserts, Strebel ignores
that the Black River LLC agreement “expressly: (a) defines Major Decisions to
include his ‘causing’ Black River LLC to take any action ‘in its capacity as
partner, Manager, . . . or owner . . . of any Subsidiary or Affiliate;’  and (b) makes limitations upon his power as
Managing Manager, including his fiduciary duty to Wimberly, applicable to ‘[a]ny
action or decision [by him], directly or indirectly in the name of the Company
or otherwise, with respect to any Subsidiary or Affiliate of the Company . . .
as if such action or decision were directly taken by the Company.’” 
As we have explained, the trial
court correctly determined that Strebel owed contractual fiduciary duties to
Wimberly as a Member of the LLC.  The
Black River LP Agreement, however, expressly disclaims any fiduciary duty owed
by the general partner that Strebel controlled, i.e., Black River LLC, to
Wimberly as a limited partner:  
The General Partner shall have no duties
(including fiduciary duties) except as expressly set forth in this Agreement.
Thus, we must determine in which
capacity Strebel was functioning when performing the specific actions that
Wimberly claims gave rise to damages for breach of fiduciary duty.  For the reasons set forth below, we conclude
Wimberly’s claims relate to actions taken by Strebel as the controlling manager
of the general partner (i.e., Black River, LLC) against Wimberly as a limited
partner in Black River LP while operating under the LP agreement.  The contractual disclaimer of fiduciary
duties in the Black River LP Agreement thus forecloses Wimberly’s recovery on
his breach of fiduciary duty claim.      
Wimberly was awarded damages for
“Loss of Distribution[s] sustained in the past” that “were proximately caused
by Douglas Strebel’s failure to comply with his fiduciary duties to John
Wimberly.”  These past distributions primarily
relate to profits from the TXU Agreement. 
When the Black River Amended LLC Agreement and the Black River LP
Agreement were executed on December 8, 2005, they provided that all of Black
River LLC’s assets— including the
TXU Agreement— were assigned from Black
River LLC to Black River LP as of August 12, 2005.  After that time, all the TXU and other
business was conducted through the LP rather than the LLC.  To ascertain whether the LLC or the LP
agreement governed the relevant obligations and duties between Strebel and
Wimberly, we thus look to the specific complaints and their timing.   
In his brief, Wimberly complains
that after “the several agreements
were executed on December 8, 2005, Strebel exploited his control over Black
River LLC as Managing Manager (and through Black River LLC over Black River LP),
to systematically take actions that were designed to and did improperly reduce
Wimberly’s profit distributions.”  Specifically,
he complains that 
(1)     “[I]n December of 2005, Strebel allocated $1,065,769 that Black
River LLC had already earned that year from TXU from Black River LLC (where
Wimberly’s share was 40%) to Black River LP (where Wimberly’s share was 34.63
in TXU business.”
(2)     “In
2006, the Black River LLC advisory business generated profits of approximately
$5,400,000.  However, Strebel distributed
only $1,244,674 — or 23% of these profits to Wimberly; far less than the 40% share of all
profits Wimberly was entitled to under the Amended LLC Agreement and far less
than the 34.63% of TXU profits Wimberly was entitled to under the LP Agreement.”  
(3)     “Strebel unilaterally announced, in a November 2006 email, that
‘[e]ffective 1/1/06 your sharing ratio in TXU business will be 25%.’”
(3)     “Strebel used his control over the books and records to record
various personal expenses that he had caused the Black River entities to pay on
his behalf not as compensation to himself but as business costs that reduced
the profits available to be distributed.” 

(3)     On February 18, 2007, “Strebel used his power as the Managing
Manager of Black River LLC to demand a $500,000 Capital Contribution from Wimberly.”  
(4)     In 2007, “Strebel secretly renegotiated the terms of the
engagement with TXU, without informing Wimberly or the other managers, in an
effort to deprive Wimberly of profit distributions.”
(5)     In 2007, Strebel awarded himself two ‘bonuses’ totaling
$3,000,000 (20 times his annual salary) and awarded two close friends who were
also minor limited partners in Black River LP close to $1,000,000 in bonuses.” 
As Wimberly acknowledges, all business was conducted at the Black River
LP level after the December 2005 agreements were executed.  Thus, the parties at that point were
operating under the Black River LP Agreement, and each of these acts Wimberly
complains of relate to Black River LP business and Black River LP revenue and
profits.[5]  Moreover, Strebel’s actions were necessarily
taken on behalf of the general partner of the LP, as the general partner was
the only one empowered to make decisions about allocations, profit
distributions, sharing ratios, business expense allocations, TXU negotiations,
and the award of bonuses. 
While courts have recognized that
general partners in a limited partnership owe fiduciary duties to the limited
partners, e.g., Graham Mortg. Corp.,
307 S.W.3d at 479, the supreme court has emphasized the importance of honoring
parties’ contractual terms defining the scope of their obligations and
agreements, including limiting fiduciary duties that might otherwise exist.  E.g.,
Nat’l Plan Adm’rs, Inc. v. Nat’l Health
Ins. Co., 235 S.W.3d 695, 703 (Tex. 2007) (recognizing parties’ agreement to
limit the fiduciary duties that would otherwise exist between agent and
principal).  This is especially true in
arms-length business transactions in which the parties are sophisticated
businessmen represented by counsel, as the parties were here.  Id.
When Strebel and Wimberly first
began their consulting work, Strebel clearly owed Wimberly fiduciary duties
that were expressly provided for in their LLC Agreement.  But later the parties—after much negotiation and while
represented by counsel—entered
into a limited partnership agreement expressly providing that all the assets of
their LLC would be transferred to the LP, and that the Strebel-controlled
general partner would owe no fiduciary
duties to the limited partners, including Wimberly.  Because Strebel’s actions that Wimberly
complains of were all taken in his capacity as Managing Manager of the general
partner, we hold that the waiver of fiduciary duties in the Black River LP
Agreement forecloses those claims.  E.g., Jochec v. Clayburne, 863 S.W.2d 516, 520 (Tex. App.—Austin 1993,
writ denied) (holding trial court erred by refusing to recognize that trustee’s
fiduciary duties had been contractually limited); Kline v. O’Quinn, 874 S.W.2d 776, 787 (Tex. App.—Houston [14th
Dist.] 1994, writ denied) (holding that contract between lawyers defined scope
of their duties to each other, and refusing to impose fiduciary duties in
addition to the duties expressly provided for in contract).    
Wimberly urges us to view Strebel’s
actions as encompassed by the fiduciary duty Strebel owed to Wimberly at the
LLC level because Strebel “caused” the LLC—as the general partner of the limited partnership—to perform the acts Wimberly complains
about.  Adopting this reasoning, however,
would render meaningless the express disclaimer of fiduciary duties in the
limited partnership agreement under which that the parties were operating.  And such reasoning ignores that Wimberly
necessarily suffered his injury and damages as a limited partner of the LP, not
as a member of the LLC parent, as the contracts that produced the revenues that
he complains should have been distributed to him were held at the limited
partnership level.     
In sum, we agree with Strebel that
Wimberly failed to demonstrate that Strebel took actions that caused his
lost-distribution damages while acting within the scope of any fiduciary
relationship that existed between the parties. 
The actions Wimberly complains about causing his lost-distribution
damages instead were taken by the Strebel-controlled general partner of the LP
and, thus, cannot form the basis of a breach of fiduciary duty claim where
those fiduciary duties have been expressly disclaimed.  
For all of these reasons, we
sustain Strebel’s first issue and hold the trial court erred by entering
judgment on the jury’s breach of fiduciary duty finding.   
C.   Attorneys’ Fee Award
Without specifying a basis for the
award, the trial court’s judgment awards to Wimberly $400,000 in trial
attorneys’ fees, as well as conditional attorneys’ fees for an appeal.  In his seventh issue, Strebel urges us to
reverse the attorneys’ fees award because, he argues, “Wimberly did not prevail
on any claim for which attorney’s fees are recoverable.” See Spangler v. Jones, 861 S.W.2d 392, 397 (Tex. App.—Dallas 1993,
writ denied) (“To obtain attorney’s fees, a party must prevail on a claim for
which attorney’s fees are recoverable.”). 
Wimberly counters that the Texas Supreme Court has recognized that any
claim can support attorneys’ fees under section 38.001(8) of the Civil Practice
and Remedies Code when the claim enforces “a part of the basis of a bargain and
is contractual in nature.”  Med. City Dallas, Ltd. v. Carlisle Corp,
251 S.W.3d 55, 58–61 (Tex.
2008).  We need not address the merits of
these arguments because our reversal of the trial court’s award of actual
damages requires us to reverse the trial court’s award of attorneys’ fees.  E.g.,
Barker v. Eckman, 213 S.W.3d 306, 315
(Tex. 2006).  We thus sustain Strebel’s
seventh issue.  
D.   Other Issues
Our sustaining Strebel’s first,
fifth, and seventh issues is dispositive of this appeal.  We thus need not reach his second, third,
fourth, and sixth issues.           
E.  
Remand for Consideration of Other Claims 
Although the trial court entered
judgment on the jury’s breach of fiduciary duty findings, the jury also found
in Wimberly’s favor in response to four minority oppression questions and
awarded him $200,000 in damages.  When, as
here, “a party tries a case on alternative theories of recovery and a jury
returns favorable findings on two or more theories, the party has a right to a
judgment on the theory entitling him to the greatest or most favorable relief.”  Boyce
Iron Works, Inc. v. Sw. Bell Tel. Co., 747 S.W.2d 785, 787 (Tex.
1988).  “[A]n election by the prevailing
party is not necessary,” and that “party may seek recovery under an alternative
theory if the judgment is reversed on appeal.” 
Id.  
Because we have reversed the trial
court’s judgment on the jury’s breach of fiduciary duty finding, Wimberly may
be entitled to seek judgment on his alternative oppression theory.  We thus remand to the trial court for
consideration of the jury’s alternative findings.  
CONCLUSION
We reverse the trial court’s
judgment and remand for further proceedings consistent with this opinion.
 
 
 
 
 
   
  
                                                                   Sherry
Radack
                                                                   Chief
Justice 
 
Panel
consists of Chief Justice Radack and Justices Bland and Huddle.

[1]
          Because Wimberly still held a
40% Sharing Ratio in Black River LLC’s profits, and because Black River LLC—as the general partner—was entitled to 1% of
Black River LP’s profits, Wimberly’s Sharing Ratio at the LP level of 24.63%,
combined with his Share Ratio of 40% of the LLC’s 1% interest, effectively
allocated to him 25% of the TXU profits.  

 

[2]
          Strebel testified at trial that
his intent was to “provisionally allocate” income from the LP’s and LLC’s
profit because at some point during the pendency of the underlying suit here,
the LLC filed suit in Dallas to remove Wimberly “for cause” from the LLC and
LP.  No details about this suit or its
outcome are found in the record of this proceeding.

[3]
          Act of May 31, 1993, 73d Leg.,
R.S., ch. 917m § 8,
1993 Tex. Gen. Laws 3887, 3914 (expired Jan. 1, 2010). 
 

[4]
          Act of May 20, 2003, 78th
Leg., R.S. ch. 572, §
20, 2003 Tex. Gen. Laws 1934, 1941 (expired Jan 1, 2010).

[5]
          The exception is the $500,000
Capital Call, which was made by Black River LLC.  That call, however, was enjoined by the trial
court, so even assuming it could amount to a breach of fiduciary duty, it did
not contribute to any damages.