Court Opinion

ID: 4508818
Source: CourtListenerOpinion
Date Created: 2020-02-20 09:23:43.950104+00
Date Added: 2024-06-11T09:37:45.931662
License: Public Domain

Fourth Court of Appeals
                                     San Antonio, Texas
                                 MEMORANDUM OPINION

                                         No. 04-18-00769-CV

  Alberto ORTIZ, Trustee of the Rolando Rafael Saenz Trust and as Limited Partner of Las
Blancas Minerals, L.P., and Rolando Rafael Saenz, as Limited Partner of Las Blancas Minerals,
                                            L.P.,
                                        Appellants

                                                  v.

 LAS BLANCAS MINERALS, L.P., Pedro I. Saenz, Jr., Maria Graciela Saenz Martinez, San
  Pedro Minerals, L.P., Saenz Management Co., L.L.C., and Las Blancas Investments, L.P.,
                                      Appellees

                     From the 341st Judicial District Court, Webb County, Texas
                                Trial Court No. 2015CVQ002991D3
                        Honorable Rebecca Ramirez Palomo, Judge Presiding

Opinion by:       Rebeca C. Martinez, Justice

Sitting:          Sandee Bryan Marion, Chief Justice
                  Rebeca C. Martinez, Justice
                  Luz Elena D. Chapa, Justice

Delivered and Filed: February 19, 2020

AFFIRMED

           The Rolando Rafael Saenz Trust is a limited partner in Las Blancas Minerals, L.P. Alberto

Ortiz, trustee of the Rolando Rafael Saenz Trust, and Rolando Rafael Saenz (collectively,

“Appellants”) sued Las Blancas Minerals, L.P., Pedro I. Saenz, Jr., Maria Graciela Saenz Martinez,

San Pedro Minerals, L.P., Saenz Management Co., L.L.C., and Las Blancas Investments, L.P.

(collectively, “Appellees”) for breach of the partnership agreement, conversion, fraud, and breach

of the duty of loyalty and the duty of care. Appellants also sought an accounting. Each of the
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Appellees, excluding Las Blancas Investments, L.P. and Las Blancas Minerals, L.P., is a general

partner in Las Blancas Minerals, L.P. Appellees filed a no-evidence and traditional motion for

summary judgment, which the trial court granted. On appeal, Appellants contend Appellees were

not entitled to summary judgment. We affirm.

                                           BACKGROUND

       Maria del Refugio M. De Saenz and Pedro I. Saenz, Sr. gifted tracts of land in Webb and

Zapata counties to their four adult children: Pedro I. Saenz, Jr., Maria Graciela Saenz Martinez,

Rolando Rafael Saenz, and Maria del Refugio S. Pena. The parents retained some real estate

holdings. In 1979, the family formed Las Blancas Minerals, L.P. and executed a partnership

agreement. The parents and their adult children each deeded their respective surface and mineral

interests in their real property holdings in Webb and Zapata counties to Las Blancas Minerals, L.P.

in exchange for equal partnership interests in Las Blancas Minerals, L.P. Each of the four adult

children was given an additional partnership interest to hold as trustees for their minor children.

       At some point in 1991, the Rolando Rafael Saenz Trust was created. Around the same

time, the individual partnership interest of Rolando Rafael Saenz (“Rolando”) was transferred into

the Rolando Rafael Saenz Trust. The Rolando Rafael Saenz Trust is presently a limited partner in

Las Blancas Minerals, L.P.

       In 2015, Appellants sued Appellees for breach of the Las Blancas Minerals, L.P.

partnership agreement, conversion, fraud, and breach of the duty of loyalty and the duty of care.

Appellants alleged that the Appellees diverted partnership profits from the Rolando Rafael Saenz

Trust and unlawfully distributed those profits to a non-partner entity, Las Blancas Investments,

L.P. Appellants also alleged Appellees wrongfully exercised dominion and control over Rolando’s

individual partnership interest by transferring his partnership interest in Las Blancas Minerals, L.P.

to the Rolando Rafael Saenz Trust without his consent. Appellants requested an accounting to

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determine the extent of their losses. Appellees moved for a no-evidence summary judgment on

each of Appellants’ claims. Appellees also moved for a traditional summary judgment on the

affirmative defenses of limitations, res judicata, collateral estoppel, and release. The trial court

granted both motions for summary judgment but did not specify the grounds upon which it relied.

Appellants now appeal.

                                     STANDARD OF REVIEW

          We review a trial court’s grant of summary judgment de novo. Lightning Oil Co. v.

Anadarko E&P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017). If the trial court’s order granting

summary judgment does not specify the grounds relied upon for its ruling, we will affirm the

judgment if any of the theories advanced are meritorious. Id. When a party moves for both a

traditional and a no-evidence summary judgment, we first consider the no-evidence motion. Id.

          A party may move for summary judgment on the ground that there is no evidence of one

or more essential elements of a claim or defense on which the adverse party would have the burden

of proof at trial. TEX. R. CIV. P. 166a(i). Upon the filing of a no-evidence motion, the burden

shifts to the nonmovant to produce “more than a scintilla of evidence which raises a genuine issue

of material fact on each of the challenged elements.” Covarrubias v. Diamond Shamrock Ref. Co.,

359 S.W.3d 298, 301 (Tex. App.—San Antonio 2012, no pet.). More than a scintilla of evidence

is defined as evidence that “rises to a level that would enable reasonable and fair-minded people

to differ in their conclusions.” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003)

(quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). Less than a

scintilla of evidence exists when the evidence is “so weak as to do no more than create a mere

surmise or suspicion” of a fact. Id. (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.

1983)).

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        When reviewing a summary judgment, we take as true all evidence favorable to the

nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s

favor. Lightning Oil Co., 520 S.W.3d at 45. We will uphold a no-evidence summary judgment

when:

        (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by
        rules of law or of evidence from giving weight to the only evidence offered to prove
        a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere
        scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.

King Ranch, Inc., 118 S.W.3d at 751. If the no-evidence motion was properly granted, we

need not address the traditional motion for summary judgment. See Lightning Oil Co., 520
S.W.3d at 45.

                                        DISCUSSION

A. BREACH OF THE PARTNERSHIP AGREEMENT

        A cause of action based on a breach of the partnership agreement requires showing: (1) the

existence of a partnership agreement; (2) the plaintiffs performed or tendered performance; (3) a

breach of the partnership agreement by the defendants; and (4) the plaintiffs were damaged as a

result of the breach. See Nguyen v. Hoang, 507 S.W.3d 360, 376–77 (Tex. App.—Houston [1st

Dist.] 2016, no pet.). In their motion for summary judgment, Appellees argued that there was no

evidence of a breach of the partnership agreement or evidence of damages.

        Appellants alleged Appellees breached the partnership agreement by distributing

partnership profits to non-partner entities. In support of this contention, Appellants provided

monthly distribution tables from the years 2011 to 2013. Appellants assert the monthly distribution

tables show that partnership profits were diverted from the Rolando Rafael Saenz Trust’s rightful

share of the profits and instead distributed to a non-partner entity, Las Blancas Investments, L.P.

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Appellants further alleged the amounts distributed to Las Blancas Investments, L.P. over the years

2011 to 2013 is evidence of damages.

       Despite Appellants’ assertions, there is nothing in the monthly distribution tables showing

any amount of the partnership profits of Las Blancas Minerals, L.P. was diverted from the Rolando

Rafael Saenz Trust and distributed to Las Blancas Investments, L.P. The monthly distribution

tables list each partner’s name, the total amount to be distributed for the month, each partner’s

ownership percentage, the amount to be distributed to each partner based on their ownership

percentage, and the net paid to each partner. These tables also display a column titled “Capital

Contribution to Las Blancas Investments” and the words “not partner” are displayed in parentheses

next to the name Las Blancas Investments, L.P. in a separate column titled “Partner.” The

distribution tables show that five out of nine partners, none of which is the Rolando Rafael Saenz

Trust, elected to make a capital contribution to Las Blancas Investments, L.P. each month, and that

amount was then deducted from those five partners’ respective shares for the month. The

distribution tables show this deduction was made after all the partners were allocated their

respective distribution amounts for the month. In fact, each distribution table shows that the

Rolando Rafael Saenz Trust was credited a share of the partnership profits each month in

accordance with its ownership percentage of 14.5%, and any capital contributions made to Las

Blancas Investments, L.P. had no bearing on the amount of profits distributed and paid out to the

Rolando Rafael Saenz Trust. Thus, the evidence does not raise a genuine issue of material fact

whether partnership profits were diverted from Appellants’ share of the profits and distributed to

Las Blancas Investments, L.P. Further, the evidence does not raise a genuine issue of material fact

whether the capital contributions paid out to Las Blancas Investments, L.P. from 2011 to 2013

damaged Appellants. Accordingly, the trial court properly granted Appellees’ no-evidence motion

for summary judgment as to Appellants’ partnership-agreement claim.

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B. FRAUD

        A fraud claim requires a plaintiff to show: (1) a material misrepresentation was made; (2)

the representation was false; (3) when the representation was made, the defendant knew it was

false or made the statement recklessly without any knowledge of the truth; (4) the defendant made

the representation with the intent that the plaintiff should act on it; (5) the plaintiff acted in reliance

on the representation; and (6) the plaintiff thereby suffered injury.            Moorehouse v. Chase

Manhattan Bank, 76 S.W.3d 608, 615 (Tex. App.—San Antonio 2002, no pet.) (citing Ins. Co. of

N. Am. v. Morris, 981 S.W.2d 667, 674 (Tex. 1998)). In their motion for summary judgment,

Appellees alleged there was no evidence of a false and material misrepresentation or evidence of

injury to Appellants.

        Appellants alleged the partnership agreement is evidence of a false and material

misrepresentation because it requires that partnership profits be distributed to the Rolando Rafael

Saenz Trust in accordance with its respective ownership share. According to Appellants, the

monthly distribution tables prove partnership profits were diverted from the Rolando Rafael Saenz

Trust to a non-partner entity, Las Blancas Investments, L.P. Appellants further assert the amounts

paid out to Las Blancas Investments, L.P. between 2011 and 2013 is evidence of injury. For the

reasons discussed above, the Appellants’ sole reliance on the monthly distribution tables as

summary judgment evidence is fatal to their fraud claim. Accordingly, the trial court properly

granted Appellees’ no-evidence motion for summary judgment as to Appellants’ fraud claim.

C. BREACH OF THE DUTY OF LOYALTY AND CARE

        The elements of a breach of fiduciary duty claim are: (1) the existence of a fiduciary

relationship between the plaintiff and defendant; (2) the defendant’s breach of the fiduciary duties

arising from that relationship; and (3) the defendant’s breach resulted in injury to the plaintiff or

benefit to the defendant. Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet.

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denied). Partners owe certain fiduciary duties to other partners within the partnership, such as the

duty of loyalty and the duty of care. Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 199

(Tex. 2002); Nguyen, 507 S.W.3d at 379.

        Appellants alleged Appellees breached the duty of loyalty and the duty of care when they

diverted partnership profits from the Rolando Rafael Saenz Trust and distributed those profits to

Las Blancas Investments, L.P. Appellants have provided no evidence to prove vital elements of

their breach of fiduciary duty claim because the monthly distribution tables do not show a diversion

of profits from the Rolando Rafael Saenz Trust. Accordingly, the trial court properly granted

Appellees’ no-evidence motion for summary judgment as to this claim.

D. CONVERSION

        To establish a claim for conversion of personal property, a plaintiff must show: (1) the

plaintiff owned, had legal possession of, or was entitled to possession of the property; (2) the

defendant unlawfully and without authorization assumed and exercised dominion and control over

the property to the exclusion of, or inconsistent with, the plaintiff’s rights as owner of the property;

(3) the plaintiff demanded return of the property; and (4) the defendant refused to return the

property. Khorshid, Inc. v. Christian, 257 S.W.3d 748, 758–59 (Tex. App.—Dallas 2008, no pet.).

        Appellants contend that Appellees’ no-evidence motion for summary judgment was

defective because it failed to challenge a specific element of Appellants’ conversion cause of

action. We disagree.

        A no-evidence summary judgment “motion must state the elements as to which there is no

evidence.” TEX. R. CIV. P. 166a(i). Although a no-evidence motion “must not be conclusory, such

a motion is sufficiently specific if it asserts there is no evidence of a particular element of a claim

or defense.” Gomez v. Am. Honda Motor Co., No. 04–16–00342–CV, 2017 WL 3159703, at *2

(Tex. App.—San Antonio July 26, 2017, pet. denied) (mem. op.) (citing Timpte Indus., Inc. v.

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Gish, 286 S.W.3d 306, 310–11 (Tex. 2009)). The reason for the specificity requirement in no-

evidence motions “is to provide the opposing party with adequate information for opposing the

motion, and to define the issues for the purpose of summary judgment.” Timpte, 286 S.W.3d at

311.

       Appellants’ petition sets forth the elements of a conversion action and, as to the second

element, states, “Defendants wrongfully exercised dominion and control over [Rolando’s]

property by unlawfully selling, transferring, assigning, or substituting [Rolando’s] interest, without

[Rolando’s] permission.” Appellees’ no-evidence motion states that Appellants could produce no

evidence of a conveyance of Rolando’s individual partnership interest in Las Blancas Minerals,

L.P. and no evidence that Rolando’s individual partnership interest had been sold, transferred,

assigned, or substituted by Appellees without his permission. Appellants responded to Appellees’

challenge and provided evidence that purportedly shows that Appellees had conveyed or

transferred Rolando’s individual partnership interest in Las Blancas Minerals, L.P. into the

Rolando Rafael Saenz Trust without Rolando’s permission.

       We conclude that Appellees’ no-evidence motion was sufficiently specific in challenging

the second element of Appellants’ conversion action. See Timpte, 286 S.W.3d at 311; see also

Gomez, 2017 WL 3159703, at *2–3. Although Appellees’ no-evidence motion failed to use the

technical words of art associated with the second element of a conversion claim, it was not a

conclusory motion or a general no-evidence challenge. See Timpte, 286 S.W.3d at 311. Appellants

had adequate information for opposing the motion, and in fact, did so. By providing evidence

attempting to show that Appellees had conveyed or transferred Rolando’s individual partnership

interest into the Rolando Rafael Saenz Trust without Rolando’s permission, Appellants indicated

an understanding that the second element of their conversion action was being challenged. See id.

(concluding the appellee’s motion gave the appellant “fair notice” of appellee’s no-evidence

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challenge when the appellant responded thoroughly with evidence, “indicating his understanding

of [the appellee’s] motion”).

       We next consider whether Appellants provided more than a scintilla of evidence raising a

genuine issue of material fact on the second element of Appellants’ conversion action. In support

of their claim, Appellants provided the Second Amended Certificate of Limited Partnership of Las

Blancas Minerals, L.P. (the “Second Amended Certificate”) from 1991. Appellants assert the

purpose of the Second Amended Certificate was to effectuate a transfer of Rolando’s individual

partnership interest in Las Blancas Minerals, L.P. into the Rolando Rafael Saenz Trust. Among

other provisions, the Second Amended Certificate provides the names of the partners and lists as

a limited partner the Rolando Rafael Saenz Trust, with the words “successor in interest to Rolando

R. Saenz” in parentheses below. Notably, however, nowhere within the Second Amended

Certificate does it state that the purpose of the document is to effectuate a transfer of Rolando’s

individual partnership interest in Las Blancas Minerals, L.P. into the Rolando Rafael Saenz Trust,

and the Second Amended Certificate does not state that it amends the listed partners. On the

signatory page of the Second Amended Certificate, the trustee of the Rolando Rafael Saenz Trust

signed on behalf of that trust. Appellants emphasize that Rolando’s signature is missing from the

Second Amended Certificate. However, contrary to this assertion, Rolando’s signature is found

on the signatory page of the Second Amended Certificate in his capacity as trustee of the Rolando

Rafael Saenz Children’s Trust.

       This evidence is at best a mere scintilla of evidence to show that Appellees wrongfully

exercised dominion and control over Rolando’s property by transferring Rolando’s individual

partnership interest in Las Blancas Minerals, L.P. to the Rolando Rafael Saenz Trust without

Rolando’s consent. Viewing the evidence in the light most favorable to Appellants, the Second

Amended Certificate merely lists the Rolando Rafael Saenz Trust as a limited partner and denotes

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that trust as a successor in interest to Rolando Rafael Saenz. It does not purport to serve as a

transfer instrument or an assignment of interests. Additionally, Rolando’s signature, albeit in his

capacity as trustee for his children’s trust, is found on the complained-of document. We conclude

Appellants’ evidence is “so weak as to do no more than a create a mere surmise or suspicion” that

Appellees exercised dominion and control over Rolando’s individual partnership interest in Las

Blancas Minerals, L.P. See King Ranch, Inc., 118 S.W.3d at 751. Accordingly, the trial court

properly entered summary judgment on Appellants’ conversion claim.

E. REQUEST FOR ACCOUNTING

       Appellants’ petition “request[ed] that the court order an equitable accounting to determine

the extent of [Appellants’] losses.” Thus, Appellants’ petition sought an accounting “in the form

of a remedy, not as a separate claim for relief.” Michael v. Dyke, 41 S.W.3d 746, 754 (Tex. App.—

Corpus Christi-Edinburg 2001, no pet.) (noting a request for an accounting “may be a suit in equity,

or it may be a particular remedy sought in conjunction with another cause of action” to determine

the extent of the plaintiff’s damages). Appellees moved for summary judgment on Appellants’

request for an accounting, which the trial court granted. Appellants contend this was error.

       “The issue of whether [Appellants were] entitled to an accounting cannot be reached unless

[the trial court] first determined that [Appellants were] owed at least some damages.” Id. at 755.

Having already found the trial court properly granted summary judgment on Appellants’

underlying causes of action, Appellants cannot show damages or any “losses.” Accordingly, the

trial court did not err in granting summary judgment on Appellants’ request for an accounting. Cf.

id. (reversing a summary judgment on a request for an accounting when summary judgment was

not proper on the appellant’s underlying causes of action).

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                                           CONCLUSION

       We hold the trial court properly entered summary judgment in favor of Appellees on all of

Appellants’ claims and requests for relief. Accordingly, the judgment of the trial court is affirmed.

                                                   Rebeca C. Martinez, Justice

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