Douglas W. STREBEL, Appellant, v. John C. WIMBERLY II, Appellee
371 S.W.3d 267
Tex. App.2012Background
- Wimberly sued Strebel for profit-distribution damages from Black River entities; trial court found breach of fiduciary duties and awarded damages and fees.
- Black River LLC and Black River LP were formed with complex divisions of profits, management duties, and changing sharing ratios.
- 2004 TXU engagement generated majority of revenue; 60/40 and later adjustments allocated 40% to Wimberly, 60% to Strebel, with LP terms limiting partner duties.
- December 2005 amendments relocated assets to LP, clarified managers’ duties, and imposed fiduciary duties on LLC managers while disclaiming them at LP level.
- 2006 amendments reduced Wimberly’s TXU-sharing and distributions; 2007 events included capital calls and TXU renegotiations affecting distributions.
- Court of Appeals reversed the fiduciary-duty judgment due to contractual disclaims in the LP agreement and remanded for oppression claims and fee reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Strebel owe fiduciary duties to Wimberly at LLC level? | Wimberly argues duties run to individual member. | Strebel contends duties run only to LLC collectively or were limited. | Yes; duties owed to Wimberly as an individual Member. |
| Are fiduciary duties between limited partners implied under TRLPA/TRPA or limited by LP agreement? | Limited-partner duties exist unless contractually disclaimed. | Limited partners owe no fiduciary duties; LP agreement disclaimed them. | LP agreement contractually disclaims fiduciary duties. |
| Did evidence show causation between alleged breaches and damages? | Damages arose from Strebel’s fiduciary breaches in LP capacity. | Damages arise from actions by the LP’s general partner; LP disclaimer bars claims. | Damages not proven under applicable fiduciary-duty theory; causation lacking. |
| Was Question No. 1 a proper, single theory or was it a flawed commingling of theories? | Question No. 1 properly instructed on fiduciary duties. | Question No. 1 commingled valid and invalid theories, prejudicing Strebel. | Court erred by commingling theories; remand warranted; reversed on fiduciary-duty finding. |
| Are attorney’s fees recoverable given the fiduciary-duty reversal? | Fees recoverable under contract-based claims enforcing bargain. | If fiduciary finding reversed, fee award lacks basis. | Fees reversed; no fee award supported. |
Key Cases Cited
- Malone v. Brincat, 722 A.2d 5 (Del. 1998) (director-like fiduciary duties include due care, good faith, loyalty)
- Allen v. Devon Energy Holdings, L.L.C., S.W.3d (Tex. App.—Houston [1st Dist.] 2011) (interpreted manager duties akin to fiduciary duties to members)
- Graham Mortg. Corp. v. Hall, 307 S.W.3d 472 (Tex. App.—Dallas 2010) (fiduciary duties recognized in partnership context)
- Zinda v. McCann St., Ltd., 178 S.W.3d 890 (Tex. App.—Texarkana 2005) (limited partners owe fiduciary duties to one another in some contexts)
- McBeth v. Carpenter, 565 F.3d 171 (5th Cir. 2009) (fiduciary duties between limited partners when control exists)
- National Plan Adm’rs, Inc. v. National Health Ins. Co., 235 S.W.3d 695 (Tex. 2007) (contractual limitations on fiduciary duties recognized)