Court Opinion

ID: 9966113
Source: CourtListenerOpinion
Date Created: 2024-05-05 07:12:36.713735+00
Date Added: 2024-06-11T08:25:12.333733
License: Public Domain

Motion for Rehearing Overruled, Majority and Concurring Memorandum
Opinions Issued August 15, 2023 Withdrawn, Judgment Issued August 15, 2023
Vacated, Affirmed, and Substitute Memorandum Majority Opinion and
Substitute Memorandum Concurring Opinion filed May 2, 2024.

                                      In The

                       Fourteenth Court of Appeals

                              NO. 14-21-00558-CV

   DANIEL OGBONNA AND KINGSLEY EKWOROMADU, OLIMAX
 GROUP INC., OLIMAX MANUFACTURING, LLC AND ROYALBRAVE
                      INC., Appellants
                                        V.

                      NELIA CRUICKSHANK, Appellee

                    On Appeal from the 281st District Court
                            Harris County, Texas
                      Trial Court Cause No. 2020-64885

        SUBSTITUTE MEMORANDUM CONCURRING OPINION

      I join the majority opinion. I do not believe all of the arguments under issue
number one—as set out in the majority opinion—are waived. However, I do not find
appellants’ arguments persuasive and write separately to address the issues. I also
agree that appellants inadequately briefed the fraud and reliance issue but they would
also lose on the merits.

I.    The Partnership Issues

      The jury found that appellants entered into a partnership. Appellants argue
that the partnership issue is immaterial because—as a matter of law—the partnership
was “created under the statute for corporations.”

      Appellants did not request a jury instruction as to whether or not the
partnership was created under the statute for corporations or otherwise note any
objection to the partnership question. Appellants argue that because the partnership
used a pre-existing corporation’s bank account for the partnership, the partnership
was “created under a statute” other than the partnership statutes, and consequently
under Section 152.051(c) there can be no partnership as a matter of law. See Tex.
Bus. Org. Code. § 152.051(c).

      Appellants cite no case to support their position that the use of a corporate
bank account somehow transforms this partnership into a corporation. First the
corporation pre-existed the partnership and did not include Cruickshank. So it is hard
to see how the business deal with Cruickshank could be a corporation. The one case
cited by appellants—Lentz Eng’g, L.C. v. Brown, No. 14-10-00610-CV, 2011 WL
4449655, at *3–4 (Tex. App.—Houston [14th Dist.] Sept. 27, 2011, no pet.)—dealt
with a written agreement between the parties creating an LLC. There was no written
agreement here. Although appellants characterized the facts as admitted, there was
no admission that her agreement was to be part of a corporation. Appellants do not
even attempt to argue that Cruickshank’s testimony does not support the creation of
a partnership. Nor do they cite any testimony from Ogbonna or Kingsley that
Cruickshank had any interest in the pre-existing corporation. Ogbonna testified that
Cruickshank was entitled to an equal share of the profits that she generated—not of
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the entire business. Ogbonna and Kingsley used a number of company names under
which they operated without really any regard for corporate formalities. Ogbonna
states he gave her the title of CEO, Olimax Medical Supplies, LLC, but stated that
she had no ownership in the business—that she was essentially just a commissioned
worker. Ogbonna testified that Cruickshank never had any authority to sign on the
“company’s” behalf. Ogbonna’s testimony does not support his argument that his
agreement with Cruickshank was “created under a corporate statute.” Appellants
have not established this as a matter of law. Cf. Tanner v. Nationwide Mut. Fire Ins.
Co., 289 S.W.3d 828, 832–33 (Tex. 2009) (JNOV movant failed to satisfy its high
burden of demonstrating its point as a matter of law); JJJJ Walker, LLC v. Yollick,
447 S.W.3d 453, 472 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (same).

      Appellants also argue that the jury was tasked with the wrong measure of
damages, arguing—as a matter of law—that the partnership was dissolved. But once
again, appellants never asked the jury if the partnership was dissolved. The jury
found that Cruickshank did not withdraw from the partnership. The appellants make
no effort to show that the evidence does not support this jury finding. Instead, they
argue as a matter of law that Cruickshank was not terminated from the partnership
because she did not prove the elements of termination, citing only Section
152.501(b)(4)(A)–(D) of the Texas Business Organizations Code. They fail to
address the other ways that a partner can be terminated under the statute. They also
fail to address the idea that they might have terminated her illegally. There was no
testimony from the appellants that the partnership was dissolved, nor did appellants
take any of the steps necessary to dissolve a partnership. The appellants spend a great
deal of time outlining the statutory requirements for what the remaining partners
should do after ending a partnership, yet they failed to do so. Instead the two

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remaining partners continued the business just as before—with the profits split
equally between them.

      Appellants failed to obtain jury findings on the issues that they now contend
were established as a matter of law. They cite no cases that support these arguments
except for one case that is quite distinguishable. I agree that their first point should
be overruled.

II.   The Fraud Issue

      In one sentence, appellants contend that Cruickshank did not show any
reliance on the fraud by omission theory. Yet Cruickshank repeatedly testified that
she continued to work on the partnership business and would not have worked had
she known the truth. This is evidence of reliance.

      I respectfully concur.

                                        /s/       Tracy Christopher
                                                  Chief Justice

Panel consists of Chief Justice Christopher and Justices Jewell and Bourliot.

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