Adeel Zaidi, A. K. Chagla, Prestige Consulting, Inc., and Apex Katy Physicians – TMG, L.L.C. v. Pankaj K. Shah and Apex Katy Physicians, LLC
14-14-00855-CV
| Tex. App. | Jun 22, 2015Background
- Dispute arose from parties’ efforts to open and operate Apex Long Term Acute Care – Katy (the Hospital); complex multi-party financing, real‑estate, and management relationships are central.
- Plaintiffs/Appellees: Pankaj K. Shah and Apex Katy Physicians, LLC (the Landlord). Defendants/Appellants: Adeel Zaidi, A.K. Chagla, Prestige Consulting, Inc. (TMG), and Apex Katy Physicians – TMG, LLC (Apex TMG).
- At trial the court entered a judgment awarding Plaintiffs roughly $50.6 million (actual damages to Shah and the Landlord plus exemplary damages) and concluded Zaidi committed perjury; Chagla was also sanctioned and held liable.
- Appellants challenge: (1) the trial court’s perjury finding as vague/unsupported; (2) aggregate damages awards that are not allocated to specific claims or items of damage; and (3) insufficiency of evidence for many damage elements (lost accounts receivable, contingent guaranty liability, alleged commissions, transfers to Medistar, letter‑of‑credit issues) and for punitive liability as to Chagla.
- Appellants seek reversal and remand for new trial on liability and damages, arguing Harris County/Casteel principles require specific allocation of damages and that many awarded items lack legal or factual support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held (trial court result challenged on appeal) |
|---|---|---|---|
| Perjury / credibility | Zaidi lied at trial; court may rely on trial judge’s credibility findings to infer intent | Appellants: trial court failed to identify specific false statements; conclusion of perjury is overbroad and unsupported | Trial court found Zaidi committed perjury and relied on credibility findings against appellants; appellants seek reversal |
| Aggregate damages / lack of specific findings | Plaintiffs presented multiple damage elements and larger ad damnum; bulk award harmless because ad damnum exceeded judgment | Appellants: court awarded gross amounts without allocating damages to particular claims or defendants, preventing meaningful appeal; error under Harris County/Casteel | Trial court awarded lump‑sum damages to Shah and Landlord without itemized findings; appellants argue reversible error |
| Sufficiency of evidence for specific damage items (accounts receivable; contingent guaranty; commissions; Medistar units; LOC draws) | Plaintiffs claim large losses: lost AR, guaranty liability, inability to draw LOC, commissions paid, units given to Medistar | Appellants: no competent evidence for many items (AR figures unreliable, no proof LOC was in defendants’ control or that draws were attempted, no evidence commissions paid, Medistar units were services‑in‑lieu of cash); guaranty is contingent and speculative | Trial court awarded amounts that may include these elements; appellants argue many awards lack legal or factual basis and require new trial |
| Exemplary/punitive damages and Chagla’s liability | Plaintiffs: conduct justified exemplary damages and liability of both Zaidi and Chagla | Appellants: punitive award excessive; Chagla had minimal role (notary/clerical); he could not appear at trial for medical reasons; no showing of malice or fiduciary duty | Trial court awarded large exemplary damages, including over $6M against Chagla; appellants contend award shocks conscience and lacks evidentiary support |
Key Cases Cited
- Harris County v. Smith, 96 S.W.3d 230 (Tex. 2002) (broad‑form or commingled damages that mix valid and invalid elements require reversal/remand)
- Crown Life Insurance Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (appellate review cannot sustain verdict based on potentially invalid liability theories)
- Eastern Tex. Elec. Co. v. Baker, 254 S.W. 933 (Tex. 1923) (defendants entitled to damages assessed under proper instructions and by elements of damage supported by pleadings/evidence)
- Whitaker v. Rose, 218 S.W.3d 216 (Tex. App.—Houston [14th Dist.] 2007) (Harris County rule applies to nonjury trials)
- Spiritas v. Robinowitz, 544 S.W.2d 710 (Tex. Civ. App.—Dallas 1976) (contingent liabilities that cannot be determined with reasonable certainty are generally not recoverable as definite damages)
- State v. Eversole, 889 S.W.2d 418 (Tex. App.—Houston [14th Dist.] 1994) (facts constituting perjury must be alleged with certainty)
- Haase v. Glazner, 62 S.W.3d 795 (Tex. 2001) (fraudulent inducement is a species of fraud that requires both fraud elements and a contract between the parties)
- Bunton v. Bentley, 153 S.W.3d 50 (Tex. 2004) (standards for punitive/exemplary damages review)