482 S.W.3d 184
Tex. App.2015Background
- Longview sued Huff, D’Angelo, and related Huff entities for fiduciary breaches including corporate-opportunity usurpation and loyalty-based competition.
- Longview investigated Eagle Ford opportunities via Lober’s analysis and discussions with land brokers Gooden and Ford.
- Huff (HEF) funded and controlled some of Riley-Huff Energy; Riley-Huff began acquiring Eagle Ford leases.
- Longview presented a proposal to buy Eagle Ford acreage, but Huff allegedly blocked funding; Riley-Huff subsequently acquired similar leases.
- Longview alleged Huff and D’Angelo used confidential information and formed Riley-Huff to exploit the Eagle Ford opportunity for themselves.
- The jury found both Huff and D’Angelo breached their fiduciary duties; trial court entered a constructive trust and a $95.5 million award; appeal challenged on legal-sufficiency and pleading grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a cognizable corporate opportunity | Longview had an expectancy in the Eagle Ford opportunity | No cognizable corporate opportunity existed; it was only a generic strategy | No legally sufficient evidence of an actual corporate opportunity. |
| Whether a separate competition claim was pleaded and properly submitted | Competition was pled as part of fiduciary duty breaches | No separate competition claim; improper submission | Longview failed to plead a separate competition claim; submission was harmful. |
Key Cases Cited
- Guth v. Loft, Inc., 5 A.2d 503 (Del.1939) (corporate-opportunity doctrine governs loyalty duties; balance of factors; two-step analysis.)
- Broz v. Cellular Info. Sys., 673 A.2d 148 (Del.1996) (Guth corollary; no single factor dispositive; balance four factors.)
- Johnston v. Greene, 121 A.2d 919 (Del.1956) (tie between opportunity and corporate business necessary.)
- Colorado & Utah Coal Co. v. Harris, 49 P.2d 429 (Colo.1935) (test for expectancy in opportunities; board rejection can bar claims.)
- Thorpe ex rel. Castleman v. CERBCO, Inc., 676 A.2d 436 (Del.1996) (two-step corporate-opportunity framework; imperative to disgorge profits.)
- McGowan v. Ferro, 859 A.2d 1012 (Del.2004) (corporate opportunity; safe-harbor and nexus considerations.)
- Field v. Allyn, 457 A.2d 1089 (Del.1983) (recognizes two-step approach; no automatic entitlement to opportunities.)