Court Opinion

ID: 4708882
Source: CourtListenerOpinion
Date Created: 2021-08-04 05:30:00.951407+00
Date Added: 2024-06-11T08:06:53.220933
License: Public Domain

REVERSE and RENDER and Opinion Filed July 30, 2021

                                            S   In The
                                  Court of Appeals
                           Fifth District of Texas at Dallas
                                       No. 05-19-00440-CV

     OBSIDIAN SOLUTIONS, LLC F/N/A ARCO IDEAS, LLC, Appellant
                               V.
                KBIDC INVESTMENTS, LLC, Appellee

                    On Appeal from the 14th Judicial District Court
                                Dallas County, Texas
                         Trial Court Cause No. DC-17-10092

                             MEMORANDUM OPINION
                         Before Justices Pedersen, III, and Reichek1
                                Opinion by Justice Reichek
        In this business dispute, KBIDC Investments, LLC sued Obsidian Solutions,

LLC f/n/a ARCO Ideas, LLC for breach of contract, fraud, unjust enrichment, and

money had and received in connection with agreements to develop and bring

conceptual consumer products to market and to design an office facility. KBIDC

purportedly purchased these causes of action out of bankruptcy from a company

    1
      The Honorable Bill Whitehill was on the panel and participated at the submission of this case. Due
to the expiration of his term on December 31, 2020, he did not participate in the issuance of this opinion.
See TEX. R. APP. P. 41.1(a), (b).
called Blue Matrix, LLC. Following a jury trial, the trial court rendered a judgment

favorable to KBIDC. Both sides appealed.

      Among its issues on appeal, Obsidian challenges the trial court’s subject

matter jurisdiction over the lawsuit. For the reasons set out below, we conclude that,

although the trial court had jurisdiction over the lawsuit, KBIDC lacked capacity to

sue or recover on the claims it asserted against Obsidian. Accordingly, we reverse

the trial court’s judgment and render judgment that KBIDC take nothing.

                           FACTUAL BACKGROUND

      Kendall Harter, an entrepreneur and inventor, founded Blue Matrix, LLC and

Hydro Toys, LLC (collectively, “Blue Matrix”) in 2012 and engaged ARCO Ideas

to assist in developing his ideas for an automatic sandwich-making machine, self-

sealing water balloons, and water balloon-launching toys. Harter required ARCO to

sign a mutual non-disclosure agreement to protect any proprietary information

related to the products.     The agreement prohibited ARCO from disclosing

confidential information to third parties and required Obsidian to limit internal

disclosure of information to only those employees to whom it was necessary to

disclose information. Once those projects began, Harter also engaged ARCO to

design its new offices.

      Two years later, in May 2014, Blue Matrix was running out of money and

terminated the relationship. By that time, ARCO had produced a self-sealing water

balloon, which won Best in Show at Toy Fair 2015, but was not able to develop

                                         –2–
either a water balloon “bazooka” or a working sandwich machine prototype. As for

the office design/buildout, Harter said the finished product was riddled with

problems. Harter testified that ARCO had failed to develop working products on

time or within budget despite continually representing it was “on target.” But Scott

Goodwin of ARCO testified ARCO was hired to “assist” Harter in developing his

ideas, and he detailed the work ARCO put into the projects. He said he never made

any guarantees to Harter nor could he in a business in which “[s]omething has never

been done before.” As for the office space, Goodwin believed Harter put too much

money into it by selecting high-rent space. He acknowledged there were issues with

some of the vendors and products relating to the build out, but he said these were

corrected.

      In December 2015, Blue Matrix filed for chapter 11 bankruptcy. During the

bankruptcy, Blue Matrix executed an Asset Purchase Agreement (APA) conveying

certain assets to appellee KBIDC, a company created by Blue Matrix’s largest

investor, Jeff Kent, to buy the assets. After making the purchase, Kent said he

wanted to determine why Blue Matrix went bankrupt and had a forensic accounting

performed. Kent believed that despite the fact that Blue Matrix paid ARCO a

substantial amount of money, ARCO had not fulfilled its contractual obligations, but

had instead produced “worthless trash.” KBIDC ultimately sued ARCO, now

known as Obsidian, alleging claims for breach of the development agreements,

                                        –3–
breach of the agreement to build out an office interior, breach of the nondisclosure

agreement, fraud, unjust enrichment, and money had and received.

      In its answer, Obsidian generally denied the claims and also raised several

affirmative defenses, including that KBIDC was not a proper party because there

had been no assignment of the claims and that the bankruptcy court had exclusive

jurisdiction over the claims.

        The case was tried to a jury. At the conclusion of the evidence, Obsidian

sought a directed verdict on all claims on the basis that (1) KBIDC had no standing

because it failed to list the causes of action on the bankruptcy schedules and (2) there

was no evidence that the causes of actions were assigned to KBIDC. KBIDC

alternatively argued there was no evidence that Obsidian breached any agreement.

The trial court directed a verdict on KBIDC’s fraud and money had and received

claims in Obsidian’s favor, but submitted questions on the contract claims and unjust

enrichment claims.

      The jury failed to find in KBIDC’s favor on breach of contract, found

Obsidian breached the nondisclosure agreement but awarded no damages, and

awarded damages for unjust enrichment. The trial court rendered judgment in

accordance with the jury’s verdict and also awarded injunctive relief and attorneys’

fees to KBIDC. The parties’ post-judgment motions were denied by operation of

law, and both sides appealed.

                                          –4–
      In five issues, Obsidian contends the trial court lacked subject matter

jurisdiction over KBIDC’s claims, misapplied the law regarding unjust enrichment,

and erred in awarding attorney’s fees and injunctive relief. In two issues by cross-

appeal, KBIDC conditionally challenges the trial court’s directed verdict on its

claims for fraud, money had and received, and exemplary damages.               It also

challenges the jury’s failure to find breach of contract and the jury finding of zero

damages for breach of the NDA.

      We begin our review with Obsidian’s assertion that the trial court lacked

jurisdiction over the claims.

                                    ANALYSIS

      In its third issue, Obsidian argues the trial did not have subject matter

jurisdiction over any of the causes of action asserted by KBIDC because (1) KBIDC

did not acquire the contract claims or related causes of action under the APA and

therefore had no standing to assert them and (2) the claims remain within the

exclusive jurisdiction of the bankruptcy estate because they were not disclosed on

Blue Matrix’s bankruptcy schedules.

      Subject matter jurisdiction is essential to a court’s authority to decide a case.

Tex. Ass’n of Business v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993).

Standing is implicit in the concept of subject matter jurisdiction. Id. If a plaintiff

lacks standing to assert a claim, the court has no jurisdiction over that claim and

must dismiss it. Heckman v. Williamson Cnty., 369 S.W.3d 137, 150 (Tex. 2012).

                                         –5–
Whether a party has standing to pursue a cause of action is a question of law subject

to de novo review. Id. at 149–50. Because standing is jurisdictional, it cannot be

waived and may be raised for the first time on appeal by the parties or the court. Tex.

Ass’n of Bus., 440 S.W.2d at 445–46. Moreover, if necessary, we may consider any

submitted documents that are outside the record for the limited purpose of

determining our own jurisdiction. Greystar, LLC v. Adams, 426 S.W. 861, 865 (Tex.

App.—Dallas 2014, no pet.).

      The record here shows that one month before trial, Obsidian filed a plea to the

jurisdiction with evidence raising the same complaints as brought here. The plea,

however, was never set for hearing and was not ruled on by the trial judge. During

trial, however, both sides presented the issue as to whether the claims were assigned

to KBIDC under the APA, and the trial judge ruled the claims were assigned. With

that background in mind, we turn to Obsidian’s jurisdictional arguments.

A. Bankruptcy Court Jurisdiction

      We begin with Obsidian’s argument that the trial court lacked subject matter

jurisdiction because the claims at issue were not disclosed on Blue Matrix’s

bankruptcy schedule and, therefore, remain within the exclusive jurisdiction of the

bankruptcy court. Obsidian argues that until the claims are abandoned by the

bankruptcy trustee or administered in the bankruptcy case, they remain the property

of the bankruptcy estate even if the bankruptcy case has been closed or a plan was

confirmed. See Dixon v. First Family Fin. Servs., 276 B.R. 173, 181 (S.D. Miss.

                                         –6–
2002), abrogated on other grounds, Reed v. Miss. Farm Bureau Mut. Co., 299 B.R.

804 (S.D. Miss. 2003). Where, as here, the property was not disclosed, Obsidian

contends the claims cannot have been either abandoned or administered. Id.

       Bankruptcy can affect a debtor’s standing to sue. Norris v. Brookshire

Grocery Co., 362 S.W.3d 226, 231 (Tex. App.—Dallas 2012, pet. denied). And

while we agree that claims can, in some cases, remain the property of the bankruptcy

estate if not disclosed before the estate is fully administered, this is not the result

where, as here, the bankruptcy court dismisses the case. See id.           Under the

Bankruptcy Code, a dismissal, unless otherwise ordered, “revests the property of the

estate in the entity in which such property was vested immediately before the

commencement of the case under this title.” 11 U.S.C. § 349(b)(3). All of the

property that was transferred from the debtor to the estate revests in the debtor

regardless of whether the debtor disclosed it to the bankruptcy court. See e.g.,

Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 485 (2d Cir. 2014)

(explaining that section 349(b)(3) “makes no distinction between those [assets] that

were listed in the debtor’s schedule of assets and those [assets] that were not; what

is revested in the immediately-pre-petition owner or owners is ‘the property of the

estate.’”).

       The language of section 349(b) is unqualified; it states simply that unless a

court orders otherwise, the dismissal of a bankruptcy revests the estate’s property in

the entity in which the property was previously vested. See 11 U.S.C. 349(b); see

                                         –7–
Revell v. Morrison Supply Co., LLC, 501 S.W.3d 255, 262–63 (Tex. App.—Fort

Worth 2016, no pet.). Nothing in the section provides that revesting is subject to

disclosure requirements. Id. at 263. Rather, the section protects the interests of

creditors and the bankruptcy process by allowing a court, for cause, to alter the

general rule of revesting upon dismissal on a case-by-case basis. See 11 U.S.C.

349(b); Revell, 501 S.W.3d at 263.        “Thus, if a bankruptcy court finds that

undisclosed assets, if in existence, could impact the decision to dismiss, or if the

debtor is receiving a “functional equivalent of a discharge” through dismissal . . . or

if other considerations exist impacting the fairness to debtors or creditors of the

revesting of undisclosed assets, the court has the authority to fashion an appropriate

remedy in its dismissal order.” Revell, 501 S.W.3d at 263.

      Here, we assume for purposes of this opinion that (1) the causes of action were

not disclosed on the Blue Matrix bankruptcy schedules but were known to Blue

Matrix at the time it filed its schedules and (2) the duty to disclose imposed on Blue

Matrix was likewise imposed on KBIDC, as the purported assignee. The bankruptcy

court, however, dismissed the case and, in doing so, specifically referenced section

349. Although the order made several other provisions, including that all prior

orders remained in full force and effect and the bankruptcy court retained jurisdiction

to enforce, interpret, and implement terms those orders, it made no provision

regarding undisclosed assets. Under these circumstances, we conclude section

349(b) revested the property in Blue Matrix upon dismissal and, accordingly, the

                                         –8–
assets are not within the exclusive jurisdiction of the bankruptcy court. See id. We

therefore reject Obsidian’s assertion that the trial court lack subject matter

jurisdiction on this basis.

B. Standing

      We next address Obsidian’s contention that KBIDC has no standing in this

case because the contracts at issue, and the causes of action related to them, were not

assigned to it under the Asset Purchase Agreement.

      The concept of standing is frequently confused with the concept of capacity.

Highland Credit Opportunities CDO, L.P. v. UBS AG, 451 S.W.3d 508, 515 (Tex.

App.—Dallas 2014, no pet.). A person must have both standing to sue and capacity

to sue. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005).

      The issue of standing focuses on whether a party has a sufficient relationship

with the lawsuit so as to have a “justiciable interest” in its outcome; in contrast, the

issue of capacity “is conceived of as a procedural issue dealing with the personal

qualifications of a party to litigate.” Austin Nursing Ctr., 171 S.W.3d at 849. A

plaintiff has standing when it is personally aggrieved, regardless of whether it is

acting with legal authority; a party has capacity when it has the legal authority to

act, regardless of whether it has a justiciable interest in the controversy. Id.;

Highland Credit Opportunities, 451 S.W.3d at 515. And, as we have explained:

“When the issue involves capacity arising from a contractual right, ‘Texas law is

clear, and this court has previously held numerous times, that a challenge to a party’s

                                          –9–
privity of contract is a challenge to capacity, not standing.’” Highland Credit

Opportunities, 451 S.W.3d at 515; see Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d

763, 779 n.19 (Tex. 2020). Thus, while the question of whether a party is entitled

to sue on a contract is often informally referred to as a question of standing, it is not

truly a standing issue because it does not affect the jurisdiction of the court; it is

instead, a decision on the merits. Highland Credit, 451 S.W.3d at 515; Malouf v.

Sterquell PSF Settlement, L.C., No. 05-17-01343-CV, 2019 WL 5799988, at *3

(Tex. App.—Dallas Nov. 7, 2019, pet. denied) (mem. op.). Unlike jurisdiction, the

assertion of lack of capacity can be waived. Nootsie, Ltd. v. Williamson Cnty.

Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996).

      Here, Obsidian’s complaint––that the APA did not assign or transfer to

KBIDC the contracts and the causes of action related to them––is one of privity of

contract. See Subsequent Injury Fund, v. Serv. Lloyds Ins. Co., 961 S.W.2d 673, 677

(Tex. App.—Houston [1st Dist.] 1998, pet. denied) (“Privity is generally defined as

a mutual or successive relationship to the same rights in property.”); see also 6200

GP, LLC v. Multi Serv. Corp., No. 05-16-01492-CV, 2018 WL 3154594, at *3 (Tex.

App.—Dallas June 28, 2018, no pet.) (mem. op.) (“Privity is established by proving

the defendant was a party to an enforceable contract with either the plaintiff or

someone who assigned the cause of action to the plaintiff.”). As such, it is not a

question of standing but whether KBIDC can recover in the capacity in which it

sued, an issue that goes to the merits of KBIDC’s claims. See Highland Credit, 451

                                         –10–
S.W.3d at 516 (concluding that question of whether party could sue on contract

because of lack of evidence of assignment was question of capacity, not standing);

Nat’l Health Res Corp. v. TBF Fin., LLC., 429 S.W.3d 125, 129 (Tex. App.—Dallas

2014, no pet.) (concluding whether plaintiff was assignee of lease was question of

capacity, not standing); Douglas-Peters v. Cho, Choe & Holen, P.C., No. 05-15-

01538-CV, 2017 WL 836848, at *11–12 (Tex. App.—Dallas March 3, 2017 no pet.)

(mem. op.) (addressing whether retainer agreement was assigned to plaintiff as

capacity issue in breach of contract suit). The question, therefore, is whether KBIDC

has capacity to sue and recover on its claims. Before addressing that issue, however,

we must first determine whether that particular question is properly before us.

C. Capacity

      KBIDC argues Obsidian has waived any defense as to capacity by failing to

timely raise it below. Specifically, KBIDC asserts that Obsidian did not file a

verified pleading until four months after the pleading deadline and did not seek leave

to amend; accordingly, they assert the issue of capacity is waived.

      Texas Rule of Civil Procedure 93 provides that a pleading must be verified by

affidavit if it alleges the plaintiff does not have the legal capacity to sue or is not

entitled to recover in the capacity in which it sues. See TEX. R. CIV. P. 93. A party

who fails to raise the issue of capacity through a verified pleading waives the issue

on appeal. Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1988) (per curiam).

However, if a plaintiff does not challenge the absence of a verified pleading raising

                                        –11–
the issue of capacity, the issue may be tried by consent. Highland Credit, 451

S.W.3d at 516. When issues not raised by the pleadings are tried by consent, they

must be treated in all respects as if they had been raised by the pleadings. TEX. R.

CIV. P. 67; Compass Bank v. Nacim, 459 S.W.3d 95, 113 (Tex. App.—El Paso 2015,

no pet.). Trial by consent “applies only where it appears from the record that the

issue was actually tried, although not pleaded.” Id.

      Here, Obsidian’s verified pleading was filed after the deadline set by the trial

court, but KBIDC did not move to strike. Moreover, at trial, the issue of whether

KBIDC bought the assets out of bankruptcy and which assets were purchased arose

during KBIDC’s direct examination of Kent. After several questions, the trial court

took a break, and, outside the jury’s presence, KBIDC’s counsel explained that he

was asking the line of questions because Obsidian appeared to dispute whether

KBIDC owned the claims. Obsidian’s counsel then told the court he planned to

argue that under the APA, which had been admitted into evidence, KBIDC had not

purchased the “right . . . to the lawsuit.” The trial court listened to arguments from

both sides on their interpretations of the APA before finding that the APA gave

“authority to the Plaintiff for . . . the advancement of this suit.” Given the parties’

arguments and the trial court’s ruling, we conclude that capacity was tried by consent

in the trial court. See Highland Credit, 451 S.W.3d at 516 (“[W]here capacity was

clearly litigated, albeit mischaracterized as standing, we are reluctant to conclude

that the issue has not been preserved for our review.”); Malouf, 2019 WL 5799988,

                                        –12–
at *4 (addressing capacity issue, brought as standing, when issue tried by consent).

To the extent KBIDC argues the issue was waived by Obsidian’s failure to

specifically argue capacity on appeal, as opposed to standing, both Highland Credit

and Malouf considered capacity under similar circumstances. See Highland Credit,

451 S.W.3d at 517; Malouf, 2019 WL 5799988, at *4. Accordingly, we consider

whether KBIDC had capacity to bring or recover on these claims.

      When a cause of action is assigned or transferred, the assignee becomes the

real party in interest with the authority to prosecute the suit to judgment. Douglas-

Peters, 2017 WL 836848, at *10. To recover on an assigned cause of action, an

assignee must prove: (1) a cause of action existed; (2) the claim was capable of

assignment; and (3) the cause was in fact assigned to the party seeking recovery. See

id. Accordingly the assignee, being the real party in interest and in control of the

lawsuit, is also in privity with the nominal party such that the judgment therein will

bind him as a party. Id.

      Here, Obsidian argues that, under the plain language of the APA, the contracts

at issue here and the causes of action related to them were not assigned to KBIDC;

thus, KBIDC is without privity of contract. Contract terms are given their plain,

ordinary, and generally accepted meanings, and contracts are to be construed as a

whole in an effort to harmonize and give effect to all provisions of the

contract. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Our

primary concern when interpreting a contract is to ascertain and give effect to the

                                        –13–
intent of the parties as expressed in the contract. Seagull Energy E & P, Inc. v. Eland

Energy, Inc., 207 S.W.3d 342, 346 (Tex. 2006).

      As relevant here, the APA is between KBIDC, as buyer, and Blue Matrix

Labs, LLC, as seller. Article I is entitled “The Transaction” and sets out the purchase

and sale of acquired assets and assumed liabilities. The relevant provisions provide

as follows:

      1.1.    Purchase and Sale of Acquired Assets; Assumed Liabilities

      (a) Purchase and Sale of Acquired Assets. Subject to the terms and
      conditions hereof, at the Closing, [Blue Matrix] shall sell, convey,
      transfer, assign and deliver to [KBIDC], and [KBIDC] shall purchase
      from [Blue Matrix], all of such [Blue Matrix’s] right, title and interest
      in and to all of such Seller’s property and assets, real, personal or
      mixed, tangible or intangible, excluding only the Excluded Assets (the
      “Acquired Assets”), free and clear of all Encumbrances other than
      Permitted Encumbrances, including the following:

              [A list of fifteen categories of assets]

                                          ***

       (b) Excluded Assets. Notwithstanding anything herein to the
      contrary, from and after Closing, [Blue Matrix] shall retain all of [its]
      right, title and interest in and to, and there shall be excluded from the
      sale and conveyance, assignment or transfer to [KBIDC] hereunder,
      and the Acquired Assets shall not include, solely the following assets
      and properties (such retained assets and properties being the “Excluded
      Assets”):

                                          ***

                  (ii) all Contracts not set forth on the Assumed Contracts
      Schedule or, if set forth on the Assumed Contracts Schedule, that
      [KBIDC] elects by written notice to [Blue Matrix] in accordance with
      Section 5.8 hereof to remove from the Assumed Contracts Schedule

                                          –14–
       (together with the Excluded Leases and the Rejected Contracts, the
       “Excluded Contracts”);

       Under section 12.6, the “Assumed Contracts Schedule” has the meaning

ascribed in Section 1.1(a)(v), which defines the Assumed Contracts Schedule as the

“Contracts listed on Schedule 1.1(a)(v).” The “Assumed Contracts” listed on

Schedule 1.1(a)(v) are: (1) a sublease agreement with Kent Motorsports LP; (2)

certain purchase orders from customers where delivery had not been made by the

seller and payment had not been made by the customer; (3) Air Filled Balloons Deal

Memorandum, dated January 15, 2015, by and between Hydro Toys and Funtastic

Limited; and (4) Zorbz Licensing, Manufacturing and Distribution Deal

Memorandum, dated as of January 15, 2015 (as amended).

       Under the plain language of the contract, KBIDC obtained all of Blue Matrix’s

property and assets except for the Excluded Assets. These were the “Acquired

Assets.” The Excluded Assets included all contracts not set out on the Assumed

Contracts Schedule. Thus, if a contract was not listed on the Assumed Contracts

Schedule, Blue Matrix retained all right, title, and interest in and to it and the contract

was not assigned or transferred to KBIDC. The contracts at issue in this case are not

listed on the schedule; thus, they were not acquired by KBIDC.

       KBIDC nevertheless asserts the APA assigned the contracts under two of the

fifteen categories of assets listed in Section 1.1. Specifically, KBIDC contends the

APA specifically assigned

                                          –15–
          (iv) all rights, remedies and benefits of [Blue Matrix] arising under or
          relating to any of the Acquired Assets . . . including rights, remedies
          and benefits arising out of express or implied warranties from
          manufacturers or suppliers of equipment or inventory purchased or
          ordered by [Blue Matrix] prior to the Closing Date . . . , and all claims
          and causes or action arising therefrom;

          (viii) all goodwill, choses in action, causes of action, judgments,
          actions, claims and rights of any kind as against others (whether by
          contract or otherwise) relating to any of the Acquired Assets (including
          the assigned Intellectual Property) or Assumed Liabilities.”

          What KBIDC ignores, however, is that both categories are limited to either

the “Acquired Assets” or the “Acquired Assets . . . or Assumed Liabilities.” Under

section 1.1(c), there are four broad categories of “Assumed Liabilities,” which are

limited to either the Assumed Contracts or the Acquired Assets, and those terms

exclude any contract not listed on the Assumed Contracts Schedule.2 KBIDC

suggests the Assumed Contracts Schedule is limited to executory contracts and

    2
        Section 1.1(c) provided as follows:
    (c) Assumed Liabilities. Subject to the terms and conditions hereof, at the Closing, [KBIDC] shall
assume and agree to fully pay, discharge, satisfy and perform, all of the following liabilities and obligations
of [Blue Matrix] (the “Assumed Liabilities”):
          (i)     cure costs with respect to Assumed Contracts;
        (ii)     liabilities and obligations arising after the Closing Date relating to or arising out of the
Assumed Contracts, but excluding, for the avoidance of doubt, any and all liabilities or obligations under
any Assumed Contracts of any nature, whether due or to become due, whether accrued, absolute, contingent
or otherwise, whether or not existing on the Closing Date, arising out of any transactions entered into or
any state of facts existing, or the use, ownership, possession or operation of the Acquired Assets or the
conduct of any Seller’s business prior to the Closing Date other than the Cure Costs;
        (iii)     liabilities and obligations arising after the Closing Date relating or arising out of the
Acquired Assets, but excluding, for the avoidance of doubt, any and all liabilities and obligations of any
nature, whether due or to become due, whether accrued, absolute, contingent or otherwise, whether or not
existing, or the use, ownership, possession or operation of the Acquired Assets or the conduct of any Seller’s
business prior to the Closing Date; and
         (iv)    accounts payable relating to the Acquired Assets arising in the ordinary course of business
after the Closing Date.
                                                    –16–
unexpired leases, of which these contracts are neither. But nothing in the plain

language of the contract, or its reading as a whole, supports that interpretation.

      Considering the plain language of the APA and giving effect to all of its

provisions, we conclude KBIDC was not assigned the ARCO contracts and therefore

could not bring any claims based on or related to those contracts, including unjust

enrichment (for which the jury awarded damages), money had and received, and

fraud. Having failed to obtain an assignment of the claims, KBIDC lacked capacity

to bring and recover on its lawsuit, and the trial court erred in finding otherwise.

Given this determination, we need not address the remaining issues in this case.

      We reverse the trial court’s judgment and render judgment that KBIDC take

nothing on its claims.

                                            /Amanda L. Reichek/
                                            AMANDA L. REICHEK
                                            JUSTICE

190440F.P05

                                         –17–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

OBSIDIAN SOLUTIONS, LLC                        On Appeal from the 14th Judicial
F/N/A ARCO IDEAS, LLC,                         District Court, Dallas County, Texas
Appellant                                      Trial Court Cause No. DC-17-10092.
                                               Opinion delivered by Justice
No. 05-19-00440-CV           V.                Reichek; Justices Pedersen, III
                                               participating.
KBIDC INVESTMENTS, LLC,
Appellee

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and judgment is RENDERED that KBIDC Investments,
LLC take nothing on its claims.

    It is ORDERED that appellant OBSIDIAN SOLUTIONS, LLC F/N/A
ARCO IDEAS, LLC recover its costs of this appeal from appellee KBIDC
INVESTMENTS, LLC.

Judgment entered July 30, 2021.

                                        –18–