Court Opinion

ID: 4157689
Source: CourtListenerOpinion
Date Created: 2017-04-04 15:15:10.745133+00
Date Added: 2024-06-11T14:22:52.960195
License: Public Domain

In The
                               Court of Appeals
                      Seventh District of Texas at Amarillo

                                     No. 07-15-00031-CV

                               THO Q. PHAM, APPELLANT

                                              V.

             JASON BRYAN CARRIER, STEPHEN BRADLEY WOMACK,
               MICHAEL CHADWICK PICKELSIMER AKA MICHAEL
           CHADWICK WOMACK, HMP PARTNERS MANAGEMENT, INC.,
                 AND CARMACK PROPERTIES, LLC, APPELLEES

                          On Appeal from the 126th District Court
                                   Travis County, Texas
          Trial Court No. D-1-GN-13-003813, Honorable Gisela D. Triana, Presiding

                                        April 3, 2017

                             MEMORANDUM OPINION

                   Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

       Appellant Tho Q. Pham appeals from the trial court’s take-nothing summary

judgment order granting summary judgment in favor of appellees. We will reverse the

court’s judgment in part and affirm it in part.
                                       Background

       Pham, Jason Bryan Carrier and Stephen Bradley Womack were the members of

a Texas limited liability company, Austin Barfish, LLC (“Barfish”), which owned and

operated Chuggin’ Monkey, a bar on Sixth Street in Austin.        Pham brought suit in

November 2013 after he learned Carrier and Womack had caused Barfish to convey the

bar in late 2005 to another entity, Carmack Properties, LLC. Carmack was formed by

Carrier and Womack, and did not include Pham. His suit asserted fraud, breach of

fiduciary duty and other claims. He sought relief that included monetary and exemplary

damages, a 40% interest in the existing Chuggin’ Monkey bar and interests in “spinoff”

bars, an accounting and attorney’s fees.1

       Summary judgment evidence showed that after a 2002 re-organization of Barfish,

Carrier and Womack owned a combined 60% interest and Pham 40%. The bar opened

that year. During 2002 and 2003, Pham received some cash distributions from Barfish.

He left Austin sometime in 2004 and moved to Houston.            His summary judgment

evidence shows he told Carrier and Womack to retain his share of profits in the

company. Pham had no communication with Carrier or Womack from the time he left

Austin until he had lunch with Carrier in early 2011.

       Appellees filed special exceptions to some of Pham’s claims, and made the court

aware that a certificate of termination2 had been filed for Barfish on September 30,

       1
        The defendants, appellees in this Court, were Carrier, Womack, Michael
Chadwick Pickelsimer a/k/a Michael Chadwick Womack, Conrad Properties, LLC, HMP
Partners Management Inc. and Carmack Properties, LLC.
       2
           See TEX. BUS. ORGS. CODE ANN. § 11.101 (West 2015).
                                             2
2010. Appellees also filed a motion for summary judgment, asserting no-evidence and

traditional grounds, including limitations.

       After a hearing, the court sustained appellees’ special exceptions to Pham’s

causes of action for majority oppression of a minority member, conversion of his

membership interest and breach of fiduciary interest owed to him individually, and

dismissed those causes of action with prejudice.

       The day before a scheduled later hearing on appellees’ motion for summary

judgment, Pham filed his second amended petition in which he plead, for the first time,

derivative claims on behalf of Barfish, alleging fraud and unjust enrichment. In this

petition Pham also sought, both individually and derivatively, revocation of Barfish’s

termination under section 11.153 of the Texas Business Organizations Code.3 See

TEX. BUS. ORGS. CODE ANN. § 11.153 (West 2015).

       The trial court held the hearing as scheduled, and took the summary judgment

motion under advisement. It later signed a final judgment ordering that Pham take

nothing on his remaining claims. This appeal followed.

       Standard of Review

       We review a summary judgment de novo. Mann Frankfort Stein & Lipp Advisors,

Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). In a traditional motion for summary

       3
         Appellees objected to the filing of Pham’s second amended petition. As
appellees’ brief acknowledges, the record does not reflect an express ruling on their
objection to the amended petition, and the court’s final judgment says the trial court
considered “the other pleadings and papers on file herein,” language the Supreme
Court has found sufficient to invoke the presumption that the trial court considered the
amended pleading. See Goswami v. Metropolitan Sav. and Loan Ass’n, 751 S.W.2d
487, 490 (Tex. 1988).
                                              3
judgment, the movant has the burden to demonstrate that no genuine issue of material

fact exists and it is entitled to judgment as a matter of law.   Nixon v. Mr. Prop. Mgmt.

Co., 690 S.W.2d 546, 548-49 (Tex. 1985); TEX. R. CIV. P. 166a(c). We review a no-

evidence summary judgment under the same legal sufficiency standard used to review

a directed verdict. Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009), citing

TEX. R. CIV. P. 166a(i). To defeat a no-evidence summary judgment, the nonmovant is

required to produce evidence that raises a genuine issue of material fact on each

challenged element of its claim. Gish, 286 S.W.3d at 310 (citations omitted); see also

TEX. R. CIV. P. 166a(i).

       In reviewing both traditional and no-evidence summary judgments, we consider

the evidence in the light most favorable to the nonmovant. Smith v. O'Donnell, 288
S.W.3d 417, 424 (Tex. 2009); 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).

We credit evidence favorable to the nonmovant if reasonable jurors could, and

disregard evidence contrary to the nonmovant unless reasonable jurors could not.

Mann Frankfort, 289 S.W.3d at 848; Gish, 286 S.W.3d at 310; Nixon, 690 S.W.2d at

548-49.    Further, every reasonable inference must be indulged in favor of the

nonmovant and any doubts resolved in its favor. Nixon, 690 S.W.2d at 548-49. When,

as here, the trial court does not specify the grounds for its ruling, we must affirm its

summary judgment if any ground on which judgment was sought is meritorious.

Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013); Burge v. Ocwen Loan

Servicing, LLC, No. 03-14-00135-CV, 2016 Tex. App. LEXIS 5634, at *3 (Tex. App.—

Austin May 27, 2016, no pet.) (mem. op.) (“When the trial court does not state the basis

for granting summary judgment, the appealing party must negate all possible grounds

that could form the basis of that ruling”).
                                              4
      Issues

      Pham brings four issues on appeal, one asserting appellees’ motion for summary

judgment did not address all the causes of action on which summary judgment was

granted; two issues addressing the statute of limitations grounds appellees asserted;

and the other issue addressing appellees’ no-evidence grounds challenging the merits

of some causes of action.

Issue One – Summary Judgment on Claims Not Challenged in Summary Judgment
Motion
      By his first issue, Pham contends summary judgment on his individual and

derivative claims seeking revocation of Barfish’s termination under Business

Organizations Code section 11.153 and his derivative claims on Barfish’s behalf for

fraud and unjust enrichment was improper because they were not addressed in

appellees’ motion for summary judgment.

      As a general rule, a trial court commits reversible error by granting summary

judgment on a claim not addressed in the summary judgment motion. G & H Towing

Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (per curiam). The error is harmless,

however, “when the omitted cause of action is precluded as a matter of law by other

grounds raised in the case.” Id. at 298; see Tarr v. Lantana Sw. Homeowners’ Ass’n,

No. 03-14-00714-CV, 2016 Tex. App. LEXIS 13372 (Tex. App.—Austin December 16,

2016, no pet.) (mem. op.).

      As noted, Pham plead his revocation-of-termination claim and his derivative fraud

and unjust enrichment claims in his second amended petition, filed after appellees’

motion for summary judgment, and appellees acknowledge their motion did not

                                          5
“specifically” address those claims.      They assert any error in granting summary

judgment on the claims nevertheless was harmless, for two reasons: first, the grounds

asserted in the motion show Pham could not recover on the omitted claims; and

second, his request for revocation of Barfish’s termination is a remedy, not an

independent cause of action.

      We begin with appellees’ second contention, that Pham’s request for revocation

of Barfish’s termination, brought pursuant to section 11.153, is a request for a remedy,

not the assertion of a cause of action.4 A review of appellees’ motion for summary

judgment and their reply to Pham’s response to the motion reveals no mention of

section 11.153.

      Appellees’ motion for summary judgment anticipated that Pham would amend his

pleadings to assert derivative claims, and the motion contained a contention that any

cause of action asserted on behalf of Barfish survived only for three years after the

effective date of its termination, under Business Organizations Code section 11.356.

TEX. BUS. ORGS. CODE ANN. § 11.356.         The motion did not address, however, the

impact, if any, that revocation of an entity’s termination under section 11.153 might have

on the operation of section 11.356. We cannot agree that appellees have shown that

      4
          Section 11.153, entitled, “Court Revocation of Fraudulent Termination,” reads:
      Notwithstanding any provision of this code to the contrary, a court may order the
      revocation of termination of an entity’s existence that was terminated as a result
      of actual or constructive fraud. In an action under this section, any limitation
      period provided by law is tolled in accordance with the discovery rule. The
      secretary of state shall take any action necessary to implement an order under
      this section.
      TEX. BUS. ORGS. CODE ANN. § 11.153.

                                             6
grounds they raised with the trial court preclude Pham’s section 11.153 revocation-of-

termination claim as a matter of law. Appellees’ contention section 11.153 establishes

only a remedy and not a cause of action was not argued to the trial court, and we

express no opinion on the question. It suffices for our present purpose merely to state

that appellees have not shown by that reasoning that the trial court’s grant of summary

judgment on the section 11.153 request, though error, was harmless. G & H Towing

Co., 347 S.W.3d at 298.

      We reach the same conclusion on the fraud and unjust enrichment claims Pham

asserted derivatively on behalf of Barfish. The ground raised by appellees’ summary

judgment motion was the assertion all Pham’s causes of action were barred by

limitations. His second amended petition asserted Womack and Carrier owed fiduciary

duties to Barfish.   Appellees’ summary judgment motion did not challenge that

assertion, and did not address the impact fiduciary duties may have on the application

of statutes of limitations. See, e.g., Valdez v. Hollenbeck, 465 S.W.3d 217, 230-31

(Tex. 2015); S.V. v. R.V., 933 S.W.2d 1, 8 (Tex. 1996). We thus cannot agree the

limitations grounds asserted in the motion were conclusively shown to preclude the

derivative claims. Appellees have not demonstrated the trial court’s grant of summary

judgment on the unaddressed derivative claims was harmless error. G & H Towing Co.,
347 S.W.3d at 298.

      Pham’s issue one is sustained.

Issue Three—Continuing Tort

      We next consider Pham’s issues three and four, which address appellees’

entitlement to summary judgment under the statutes of limitations.       Pham’s brief
                                           7
complains of two injuries:     (1) Carrier and Womack’s private sale of the Chuggin’

Monkey to Carmack, a company they owned and controlled, for less than fair market

value; and (2) Carrier and Womack’s distribution of Pham’s share of profit to

themselves. His response to appellees’ motion for summary judgment correctly noted

that the chronology relevant to appellees’ limitations grounds “is basically undisputed,”

the parties instead disagreeing over “what dates are relevant to determine when

limitations began to run.” His response also acknowledged that his claims “had he

known about them and had [appellees] not concealed them, would be barred by

limitations.”5

       By his third issue, Pham asserts the summary judgment record raises a genuine

issue of material fact on the “validity” of Barfish’s 2005 sale of the bar to Carmack

Properties, LLC. And, his reply brief asserts, “If the sale was invalid, Pham contends

that Austin Barfish still owns the bar.       And, if Austin Barfish still owns the bar,

[a]ppellees’ continuing diversion of the bar’s profits is an act of conversion still occurring

at the present.” He asserts the same argument would apply to his claim for lost profits

from breach of contract. For his assertion’s effect on accrual of his causes of action and

limitations, Pham relies on the concept of the continuing tort. “A continuing tort involves

wrongful conduct inflicted over a period of time that is repeated until desisted, and each

day creates a separate cause of action.” First Gen. Realty Corp. v. Maryland Cas. Co.,

981 S.W.2d 495, 501 (Tex. App.—Austin 1998, pet. denied) (citations omitted).               A

       5
        Claims for breach of contract and fraud must be brought “not later than four
years after the day the cause of action accrues.” TEX. CIV. PRAC. & REM. CODE ANN.
§ 16.004(a) (fraud); TEX. CODE CRIM. PROC. ANN. § 16.051; see Exxon Corp. v. Emerald
Oil & Gas Co., L.C., 348 S.W.3d 194, 203 (Tex. 2011) (breach of contract and fraud).
Claims for conversion must be brought within two years. TEX. CIV. PRAC. & REM. CODE
ANN. § 16.003(a) (West 2015).
                                              8
cause of action for a continuing tort does not accrue until the tortious act ceases. Id.

But the mere continuation of damages after a wrongful act does not prevent the running

of imitations. Id. at 502; see Rogers v. Veigel Inter Vivos Trust No. 2, 162 S.W.3d 281,

290 (Tex. App.—Amarillo 2005, pet. denied) (drawing distinction between repeated

injury proximately caused by repetitive wrongful conduct and continuing injury arising

from one wrongful act).

      To raise a fact issue on the validity of sale of the bar, Pham points to evidence

the individual, Brian Scofield, who signed sale documents for Barfish, had previously

been a Barfish member and manager, but had transferred his interest to Pham in 2002

and was not a manager or member in 2005. He notes also that Carmack was not

formed until January 10, 2006, after the December 31, 2005 effective date of the bar

sale. And Pham relies on evidence of Carrier and Womack’s failures to follow the

disclosure provisions of Business Organizations Code section 101.255 with respect to

the sale of the bar, which was Barfish’s only asset, to Carmack. TEX. BUS. ORGS. CODE

ANN. § 101.255.

      Regardless of the propriety of sale of the bar to Carmack, however, it is

undisputed that Carmack took possession of the bar in January 2006 and operated it

thereafter. We agree with appellees the transfer that caused Pham’s legal injury, if any,

was complete in January 2006. As this Court noted when faced with a continuing tort

assertion in Rogers, the injury the plaintiff asserted may have been continuing, but “it

arose from a single act of usurpation.” 162 S.W.3d at 290. The same is true here.

While Pham may have suffered some continuing injury, all the injuries he alleges arise

                                           9
from the asset sale.     We find the continuing tort doctrine inapplicable to Pham’s

individual claims, and so overrule his third issue.

Issue Four – Discovery Rule and Fraudulent Concealment

       We next address Pham’s fourth issue, by which he contends the trial court erred

by granting summary judgment because, he argues, the summary judgment record

raises genuine issues of material fact concerning the application of the discovery rule

and the doctrine of fraudulent concealment.           Because we have determined in our

consideration of Pham’s first issue that appellees’ summary judgment motion did not

address Pham’s derivative claims brought on behalf of Barfish or his revocation-of-

termination action, we here consider only the claims Pham plead individually for breach

of contract, fraud and conversion. In his response to appellees’ motion for summary

judgment, Pham acknowledged the trial court “has already ruled” that appellees did not

owe Pham fiduciary duties individually. 6 He does not challenge that ruling of the trial

court on appeal. We therefore analyze this fourth issue under the law applicable to

parties who are not fiduciaries.

       Unless an accrual date is prescribed by statute, "[c]auses of action accrue and

statutes of limitations begin to run when facts come into existence that authorize a

claimant to seek a judicial remedy." Valdez, 465 S.W.3d at 229 (quoting Exxon Corp.,
348 S.W.3d at 202).      The general rule is that a breach of contract action accrues

immediately on the breach. Barker v. Eckman, 213 S.W.3d 306, 311 (Tex. 2006). With

regard to conversion actions, “the general rule is that limitations begin to run at the time

       6
        Recall, the trial court dismissed Pham’s individual claim for breach of fiduciary
duty on appellees’ special exception.
                                             10
of the unlawful taking.” Rogers v. Ricane Enters., 930 S.W.2d 157, 166 (Tex. App.—

Amarillo 1996, writ denied) (citing Republic Supply Co. v. French Oil Co., 392 S.W.2d
462, 464-65 (Tex. App.—El Paso 1965, no writ)).

       Discovery Rule

                Breach of Contract and Conversion

       The discovery rule provides a “very limited exception to statutes of limitations.”

Shell Oil Co. v. Ross, 356 S.W.3d 924, 929 (Tex. 2011) (quoting Computer Assocs. Int'l,

Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996)). Where it applies, the discovery

rule defers accrual of a cause of action until the injury was or reasonably could have

been discovered. Valdez, 465 S.W.3d at 229 (citation omitted); see Cosgrove v. Cade,

468 S.W.3d 32, 36 (Tex. 2015) (discovery rule “defers accrual of a claim until the injured

party learned of, or in the exercise of reasonable diligence should have learned of, the

wrongful act causing the injury”). The rule applies when the nature of the injury is

inherently undiscoverable and the injury itself is objectively verifiable. HECI Exploration

Co. v. Neel, 982 S.W.2d 881, 886-87 (Tex.1998). An inherently undiscoverable injury is

one that by its nature is unlikely to be discovered within the prescribed limitations

period, despite the exercise of due diligence. Wagner & Brown, Ltd. v. Horwood, 58
S.W.3d 732, 734-35 (Tex. 2001) (citing S.V., 933 S.W.2d at 7). Whether an injury is

inherently undiscoverable is a legal question, decided on a categorical rather than case-

specific basis. Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006) (per curiam).

To answer the question, “the focus is on whether a type of injury rather than a particular

injury was discoverable.” Id. at 314 (citing Wagner & Brown, 58 S.W.3d at 736) (italics

in original).   We consider, then, whether Pham’s injury is “the type of injury that

                                            11
generally is discoverable by the exercise of reasonable diligence.” Wagner & Brown, 58
S.W.3d at 735 (quoting HECI Exploration, 982 S.W.2d at 886).

       With regard to claims based on contract, the Texas Supreme Court declined in

Via Net to hold that the discovery rule can never apply to breach of contract claims. 211
S.W.3d at 314. But it noted that such cases should be “rare, as diligent contracting

parties should generally discover any breach during the relatively long four-year

limitations period provided for such claims.”     Id. at 315.   It held the discovery rule

inapplicable to defer accrual of the plaintiff’s cause of action for breach of an agreement

to provide additional-insured liability coverage. Id. at 311-312, 315.

       In the course of its analysis, the court held that because contracting parties

generally are not fiduciaries, “[t]hus, due diligence requires that each protect its own

interests.” Id. at 314. It further noted the exercise of due diligence may require a party

to request from its contract partner information needed to verify the other’s contractual

performance. Id. (citing Wagner & Brown, 58 S.W.3d at 736; HECI Exploration, 982
S.W.2d at 886). Pointing out that a contracting party who responds to such a request

with false information risks application of the doctrine of fraudulent concealment, it

concluded, “[b]ut failing to even ask for such information is not due diligence.”       Id.

(citations omitted); see Seureau v. ExxonMobil Corp., 274 S.W.3d 206, 229 (Tex.

App.—Houston [14th Dist.] 2008, no pet) (citing and applying Via Net).

       In the absence of fiduciary duties, which as we have noted are not a part of our

analysis of Pham’s fourth issue, we find the court’s description in Via Net of the

requirements of due diligence applies to Pham’s relationship with Carrier and Womack

                                            12
in Barfish. Pham contends the sale of Barfish’s bar to another entity that did not include

him was an inherently undiscoverable injury.

      In support of his contention, Pham asserts there was no publicly available

evidence of the sale; he was not involved in the operation of the bar; he had told Carrier

and Womack to hold his share of the bar’s profits; and the bar continued to operate

under the same name and at the same location.7 We accept, for this purpose, the truth

of Pham’s assertions of fact.    Nonetheless, we are unwilling to hold that the injury

suffered by one of three Texas LLC members from the sale of all the assets of its

operating retail business is inherently undiscoverable. The ease with which someone in

Pham’s position could have learned of the sale and his resulting exclusion from

ownership preclude such a holding. See Via Net, 211 S.W.3d at 314; Seureau, 274
S.W.3d at 229. We agree with Pham’s contention his injury was objectively verifiable by

means of such evidence as Barfish’s asset sale agreement with Carmack and Barfish’s

financial records. But his injury was not of the type to be inherently undiscoverable

despite the exercise of reasonable diligence.

      Pham plead the discovery rule, and on summary judgment it was appellees’

burden to negate it. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988
S.W.2d 746, 748 (Tex. 1999); Ward v. Stanford, 443 S.W.3d 334, 342 (Tex. App.—

Dallas 2014, pet. denied). The summary judgment record demonstrates the discovery

rule had no application to Pham’s individual breach of contract and conversion claims.

Appellees met their summary judgment burden to negate the rule’s application to those

individual claims. See Pirtle v. Kahn, 177 S.W.3d 567, 572 (Tex. App.—Houston [1st

      7
       Pham also relies on evidence that Carmack did not obtain a liquor license until
March 2007, and operated under Barfish’s license until then.
                                           13
Dist.] 2005, pet. denied) (defendant may negate discovery rule by showing that it does

not apply).

              Fraud

       Pham’s briefing of his fourth issue does not distinguish his fraud claim from his

breach of contract and conversion claims. Limitations does not begin to run on a fraud

claim until the fraud is discovered or the exercise of reasonable diligence would

discover it. Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52, 57 (Tex. 2015);

Computer Assocs, 918 S.W.2d at 455-56; see S.V., 933 S.W.2d at 4 (distinguishing

deferral of accrual of causes of action for fraud from discovery rule).

       In his reply brief’s discussion of fraudulent concealment, Pham points to the

holding in Hooks that “reasonable diligence is an issue of fact.” 457 S.W.3d at 58 (citing

Estate of Stonecipher v. Estate of Butts, 591 S.W.2d 806, 809 (Tex. 1979). As he notes

also, however, the court in Hooks went on to state that in some circumstances the court

nevertheless “can still determine as a matter of law that reasonable diligence would

have uncovered the wrong.” 457 S.W.3d at 58. We agree with appellees’ contention

that the exercise of reasonable diligence would have led Pham to discover that Barfish

was no longer operating the Chuggin’ Monkey after January 2006.             “Reasonable

diligence requires that owners of property interests make themselves aware of relevant

information available in the public record.” Shell Oil Co. v. Ross, 356 S.W.3d 924, 928

(Tex. 2011). The summary judgment record contains Barfish’s Texas franchise tax

reports filed from 2003 through 2006. By September 2005, the report filed shows that

                                             14
Pham had been removed as a manager of Barfish.8 Nor is an LLC member like Pham

limited to the public record for information on the company’s internal affairs.       The

Business Organizations Code provides an LLC member the rights, on written request, to

examine records the company is required to keep, including tax returns, and to receive

a copy of certain records, again including tax returns.9 TEX. BUS. ORGS. CODE ANN.

§§ 101.501, 101.502 (West 2015).10 And, for a party whose rights and interests are

essentially contractual, like Pham’s, the courts have found that one who has neglected

even to inquire of the other contracting parties about contractual performance is not

conducting himself with reasonable diligence. Via Net, 211 S.W.3d at 314. We find that

concept particularly applicable to an absentee 40% business owner like Pham. As a

matter of law, outside the context of fiduciary duties, Pham would have been able to

discover any fraud involved in Barfish’s sale of the Chuggin’ Monkey within the

limitations period, by the exercise of reasonable diligence.

       Fraudulent Concealment

       We likewise find the present summary judgment record raises no issue of

material fact regarding application of the doctrine of fraudulent concealment.

       8
         Citing Hooks, 457 S.W.3d at 61, Pham’s briefing asserts that the franchise tax
reports were inconsistent and contained misleading information. Even viewed in the
light most favorable to Pham, however, the reports are clear on the absence of Pham’s
name.
       9
         Cf. Ritchie v. Rupe, 443 S.W.3d 856, 882 (Tex. 2014) (shareholder’s access to
corporate records).
       10
          Elsewhere in his briefing Pham contends that because Barfish had no written
LLC regulations or a company agreement, the LLC provisions of the Business
Organizations Code constitute the members’ agreement. He cites section 101.052(b)
for the proposition. TEX. BUS. ORGS. CODE ANN. § 101.052 (West 2015). We need not
address the contention, but note that if it is accurate, sections 101.501 and 101.502 also
must be deemed a part of the members’ agreement.

                                            15
Fraudulent concealment is an equitable doctrine that, unlike the discovery rule, is fact-

specific. Shell Oil Co., 356 S.W.3d at 927. “Fraudulent concealment is an affirmative

defense to the statute of limitations under which the plaintiff has the burden of coming

forward with proof to support the allegation.” Weaver v. Witt, 561 S.W.2d 792, 793

(Tex. 1977) (per curiam). “A party asserting fraudulent concealment must establish an

underlying wrong, and that ‘the defendant actually knew the plaintiff was in fact

wronged, and concealed that fact to deceive the plaintiff.’”      BP Am. Prod. Co. v.

Marshall, 342 S.W.3d 59, 67 (Tex. 2011) (quoting Earle v. Ratliff, 998 S.W.2d 882, 888

(Tex. 1999)). If established, a defendant’s fraudulent concealment of wrongdoing may

toll limitations. Kerlin v. Sauceda, 263 S.W.3d 920, 925 (Tex. 2008).

      “When a defendant is under a duty to make a disclosure but conceals the

existence of a cause of action from the party to whom it belongs, the defendant is

estopped from relying on the defense of limitations until the party learns of the right of

action or should reasonably have discovered it.” Valdez, 465 S.W.3d at 229-30 (citing

Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1983)). The estoppel effect does not last

indefinitely, however, but ends when the party “learns of facts, conditions, or

circumstances which would cause a reasonably prudent person to make inquiry, which,

if pursued, would lead to the discovery of the concealed cause of action.” Id. at 230

(quoting Borderlon, 661 S.W.2d at 909).

      Pham contends the law imposed on appellees, particularly on Womack and

Carrier, duties of disclosure that obligated them, at the least, to make Pham aware that

                                           16
Barfish had sold the bar to Carmack.11 For purposes of our consideration of this issue,

we will assume Pham’s contention is correct. We will assume also that the sale of the

bar gave rise to a cause of action by Pham against appellees, and that the record

presents a fact issue whether appellees knowingly concealed from Pham the existence

of the cause of action.

       For the same reasons we have agreed with appellees and the trial court that

Pham’s individual fraud claim is barred as a matter of law, however, we find the

fraudulent concealment doctrine cannot save his breach of contract or conversion claim.

In Kerlin, the court noted its previous holding that royalty owners “are not entitled to

‘make no inquiry for years on end,’ and then sue for contractual breaches that could

have been discovered within the limitations period through the exercise of reasonable

diligence.” 263 S.W.3d at 925 (quoting HECI Expl. Co. v. Neel, 982 S.W.2d 881, 887-

88 (Tex. 1998)). The court further noted that HECI was a discovery rule case but

nevertheless found its holding instructive in application of fraudulent concealment. Id. at

925-26; see Valdez, 465 S.W.3d at 230 (citing Kerlin). We find it instructive in this case

as well.

       For those reasons, we overrule Pham’s fourth issue.

       11
          In this Court, Pham contends appellees’ duties of disclosure arose from
provisions of the Business Organizations Code. He cites sections 101.107, 101.255
and 101.356(c). TEX. BUS. ORGS. CODE ANN. §§ 101.107, 101.255, 101.356(c) (West
2015). Appellees deny those provisions imposed any duty of disclosure to Pham. We
need not address the issue.

                                            17
                                      Conclusion

      In view of our disposition of Pham’s issues one, three and four, we find it

unnecessary to address his second issue.        We affirm the trial court’s take-nothing

judgment as to Pham’s individual claims for breach of contract, fraud and conversion.

We affirm also the trial court’s judgment on the claim Pham plead for conspiracy to

defraud.   We further note that as we perceive the summary judgment record, it is

undisputed HMP Partners Management Inc. has no liability in this case. We affirm the

trial court’s grant of summary judgment as to HMP.

      We reverse the trial court’s judgment as to Pham’s derivative claims and his

claim for revocation of Barfish’s termination, and remand those claims to the trial court

for further proceedings.12 See Pinnacle Data Servs., Inc. v. Gillen, 104 S.W.3d 188,

199 (Tex. App.—Texarkana 2003, no pet.) (“Where, as here, a final summary judgment

has disposed of a case and included causes of action not addressed in the underlying

motion, that judgment is erroneous and must be affirmed as to the causes of action

properly adjudged and remanded as to those causes of action not addressed in the

underlying motion.”).

                                                      James T. Campbell
                                                         Justice

      12
           Pham’s pleading asserted justice requires that the court treat his derivative
action as a direct action brought for Pham’s own benefit and that any recovery be paid
directly to him. See TEX. BUS. ORGS. CODE ANN. § 101.463 (West 2015). By this opinion
and our judgment, we make no adjudication relating to that assertion.

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