516 S.W.3d 198
Tex. App.2017Background
- Guerrero-McDonald converted prior interests into a 35% limited partner interest in LaVista Partners LP (general partner: LaVista Partners—GP, LLC); project failed for lack of financing.
- She sued the general partner and co‑limited partner Nassour for breach of contract, breach of fiduciary duty, fraud, and negligent misrepresentation.
- Trial court granted summary judgment for defendants on breach of contract, breach of fiduciary duty, and negligent misrepresentation (standing and economic‑loss grounds).
- Case proceeded to jury trial on fraud; court imposed a discovery sanction deeming a request for admission admitted; jury found for defendants and judgment was take‑nothing.
- On appeal, the court reviewed standing (whether alleged injuries were personal vs. derivative), the economic‑loss/no‑evidence ruling on negligent misrepresentation, the discovery sanction, and cumulative‑error arguments; it affirmed in part, reversed in part, and remanded limited claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue for breach of fiduciary duty | Guerrero‑McDonald: some breaches (failure to pay consulting fee/loan) caused personal injuries unique to her. | Defendants: alleged wrongs injured the partnership, not her individually; thus no standing. | Court: lacks standing for claims tied to partnership losses generally; standing exists for fiduciary claim based on failure to pay consulting agreement/note (personal). |
| Standing to sue for breach of contract | Guerrero‑McDonald: contract rights (consulting fee, $1M note, anti‑dilution) produced personal damages. | Defendants: contract harms derive from partnership failure; claims are derivative. | Court: claims alleging misuse/mismanagement of partnership funds and loss of investment (¶18(a),(b),(c),(d),(e),(g),(h)) are derivative; ¶18(f) (consulting agreement/note) is personal — remanded. |
| Negligent misrepresentation — economic loss / no‑evidence | Guerrero‑McDonald: seeks recoverable out‑of‑pocket losses from negligent misrepresentation; not limited to benefit‑of‑bargain. | Defendants: no evidence of independent injury distinct from contract damages; economic‑loss doctrine bars recovery. | Court: defendants’ Rule 166a(i) no‑evidence ground was adequate; plaintiff failed to point to summary‑evidence of independent injury in response; summary judgment on negligent misrepresentation affirmed. |
| Discovery sanction (deemed admission) & cumulative error | Guerrero‑McDonald: deeming admission (insolvency) was excessive, merit‑preclusive, and harmed her fraud case; cumulative error requires new trial. | Defendants: plaintiff provided evasive/incomplete responses and massive disorganized productions; court justified deeming admission to address noncompliance. | Court: sanction was not an abuse of discretion because answer was evasive and sanction related to discovery misconduct; deemed admission concerned damages the jury never reached; cumulative‑error claim rejected. |
Key Cases Cited
- Linegar v. DLA Piper LLP (US), 495 S.W.3d 276 (Tex. 2016) (standing requires personal, concrete injury and causation; assessed claim‑by‑claim)
- Wingate v. Hajdik, 795 S.W.2d 717 (Tex. 1990) (general rule: stakeholder cannot recover personally for injuries solely to the entity; personal cause of action required for individual recovery)
- In re Fisher, 433 S.W.3d 523 (Tex. 2014) (limited partner has standing for claims alleging injuries personal to him, e.g., unique contract entitlements)
- Hodges v. Rajpal, 459 S.W.3d 237 (Tex. App.—Dallas 2015) (distinguishes Fisher; harms that merely diminish partnership value are derivative)
- D.S.A., Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662 (Tex. 1998) (economic‑loss doctrine limits negligent‑misrepresentation recovery when injuries overlap contract damages)
- TransAmerican Nat. Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (sanction review: must be just and proportionate; analyze relation between conduct and sanction)