Marshall Hodges D/B/A Guaranteed Printing Supply and Rhon Rommer v. Jitendra Rajpal
2015 Tex. App. LEXIS 1946
Tex. App.2015Background
- Hodges and Rommer (appellants) invested in two limited partnerships formed and controlled by Rajpal: Greenville Travelers, L.P. and Sulphur Springs Travelers, L.P.; each contributed $50,000 and $56,000 respectively. Greenville sold in 2006 (appellants did not recover Greenville capital); Sulphur Springs sold in 2005 (appellants recovered capital).
- Appellants sued Rajpal (2009) asserting breach of contract (Greenville limited partnership agreement), common-law fraud (fraudulent inducement and fraudulent concealment), and breach of fiduciary duty arising from Rajpal’s control and alleged misuse of partnership funds.
- A jury found for appellants on breach of contract (Greenville), fraud (Greenville), and breach of fiduciary duty (Greenville), awarding modest out-of-pocket/reliance damages and substantial attorney’s fees on the contract claim.
- Rajpal moved in response to appellants’ proposed judgment (captioned as a response and motion for judgment) asking the court to disregard certain jury findings and enter judgment for him, asserting lack of standing, statute-of-limitations on fraudulent inducement, improper damages, and need for election of remedies.
- The trial court granted JNOV and entered a take-nothing judgment for Rajpal. Appellants appealed; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Hodges/Rommer) | Defendant's Argument (Rajpal) | Held |
|---|---|---|---|
| Whether trial court erred by granting JNOV without a formally filed JNOV motion | Rajpal did not file a motion for JNOV or formally ask the court to disregard jury findings; JNOV was therefore improper | Rajpal’s response to appellants’ motion to enter judgment functioned as a motion for judgment and requested disregard of jury findings | Court: No error; substance controls over form — Rajpal’s filings asked for relief and sufficed to support JNOV |
| Whether fraud claims survive JNOV given statute of limitations and jury’s undifferentiated fraud finding | Appellants: jury verdict encompassed post‑investment concealment as well as inducement, so limitations defense shouldn't eliminate recovery | Rajpal: fraudulent inducement accrued by June 2004 (receipt of partnership agreement and objections), so those claims are time‑barred; the jury awarded no reliance damages for concealment | Court: Affirmed JNOV on fraudulent inducement (barred by limitations); concealment produced no reliance damages so fraud claims fail overall |
| Whether limited partners have standing to sue individually for breach of partnership agreement and fiduciary duty | Appellants: they personally were harmed and sought recovery of their capital and profits | Rajpal: alleged injuries are to the partnership, not individual, so claims belong to partnership and appellants lack standing | Court: Applied Hall — injuries alleged were to the partnership; appellants lack standing; JNOV on contract and fiduciary claims proper |
| Whether appellants are entitled to attorney’s fees or prejudgment interest | Appellants: should recover attorney’s fees for breach of contract and prejudgment interest if verdict reinstated | Rajpal: no recovery because JNOV properly granted and appellants recovered nothing | Court: No fees or prejudgment interest — appellants recover nothing on contract claim after JNOV |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal‑sufficiency standard for reviewing jury findings)
- Hall v. Douglas, 380 S.W.3d 860 (Tex. App.—Dallas 2012) (limited partner lacks standing to sue for injuries belonging to the partnership)
- Seureau v. ExxonMobil Corp., 274 S.W.3d 206 (Tex. App.—Houston [14th Dist.] 2008) (application of discovery rule to accrual of fraud claims)
- MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) (no attorney’s fees under section 38.001 when plaintiff recovers no contract damages)