LG Insurance Management Services, L.P. v. Leick, 378 S.W.3d 632

Background

Leick and George formed LG Insurance Management Services L.P. in 2004; Wilmer joined in 2007 after her agency merged with LG.
Partners’ Agreement (2008) set terms for voluntary and involuntary terminations and specified no payment for involuntary terminations unless remaining partners choose to pay.
On Oct 3–7, 2008, Leick was involuntarily terminated; he left, then George and Wilmer controlled partnership finances and affairs.
The parties offered disputed payments to Leick; Leick claimed $597,338.58 for voluntary termination, while defendants offered and reduced sums following negotiations.
On Nov 12, 2008, appellants filed declaratory judgment claiming Leick’s termination was involuntary; Leick counterclaimed with breach of contract and breach of fiduciary duty; trial court granted directed verdict on fiduciary duty; jury awarded a specific involuntary-termination payment amount and fees; the trial court awarded damages, future payments, and fees.
This appeal challenges jury 4’s amount as based on an implied covenant, seeks disregard of question 4, and contests the award of costs and attorney’s fees; the court reverses the damages and fees award, renders Leick take-nothing on damages, and remands costs/fees for further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the jury instruction on the implied covenant was proper	Leick (plaintiff) argues the instruction reflected an implied covenant not in the contract.	Appellants argue the instruction inserted an implied covenant not supported by the agreement.	The implied covenant was improper and not supported by the contract.
Whether the jury’s answer to question 4 should have been disregarded	Leick asserts the amount should not be determined since the instruction imposed a duty that did not exist.	Appellants contend question 4 was improper and the jury’s answer should be disregarded.	The court held the jury's answer to question 4 should have been disregarded; the amount was within the defendants’ discretion and not subject to a fair-and-reasonable standard.
Whether Leick is entitled to actual damages	Leick claims he is entitled to damages for breach resulting from the improper termination and negotiation.	Appellants maintain there were no duties after involuntary termination and no damages; the trial court erred in awarding actual damages.	Leick take-nothing on actual damages; the award was reversed.
Whether costs and attorney’s fees under §37.009 were properly awarded	Leick contends fees were recoverable as declaratory-judgment relief.	MBM Financial limits fees for overlaps with contract claims; the award should be limited or remanded.	The award of costs and attorney’s fees under §37.009 is reversed and remanded for equitable disposition.
Whether the directed verdict on breach of fiduciary duty should be sustained	Leick contends there was evidence of fiduciary breach (conspiracy to terminate and negotiate in bad faith).	Appellants argue no fiduciary duty existed post-termination and evidence failed to show breach caused damages.	Directed verdict on breach of fiduciary duty affirmed; no fiduciary duty existed after Leick’s termination.

Key Cases Cited

Hyundai Motor Co. v. Rodriguez ex rel. Rodriguez, 995 S.W.2d 661 (Tex.1999) (trial charge review requires legal correctness; improper instruction may require reversal)
Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473 (Tex.2001) (standard for reversal when instruction is improper)
Halmos v. Bombardier Aerospace Corp., 314 S.W.3d 606 (Tex.App.-Dallas 2010) (reversal if instruction likely produced improper judgment)
MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660 (Tex.2009) (fees/tort and declaratory judgments interplay; limitations on §38.001 and §37.009 awards)
Bohatch v. Butler & Binion, 977 S.W.2d 543 (Tex.1998) (fiduciary duties among partners; no duty to remain partners)
Universal Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742 (Tex.2003) (implied covenants are rare; must reflect intent from contract)
Gamma Group, Inc. v. Transatlantic Reinsurance Co., 242 S.W.3d 203 (Tex.App.-Dallas 2007) (court may not imply covenants beyond terms; implied duties must rest on contract terms)
City of Houston v. Williams, 353 S.W.3d 128 (Tex.2011) (contract interpretation and statutory alignment relevant to duties)
Danciger Oil & Ref. Co. of Tex. v. Powell, 154 S.W.2d 632 (Tex.1941) (well-established rule that writing embodies the contract; no implied terms)