400 S.W.3d 658
Tex. App.2013Background
- WCCBA is an unincorporated nonprofit association with up to six members; five members listed: Chisholm Trail, Booster Club, Round Rock Optimist Club, St. Mary’s School PTC, Williamson County Children’s Advocacy Center.
- WCCBA entered a five-year lease (July 1, 2008) with MT Falkin for a bingo hall; MT Falkin as landlord, WCCBA as tenant.
- WCCBA ceased shared bingo operations after three months and defaulted on the lease.
- MT Falkin sued Chisholm Trail and Booster Club for damages; Booster Club defaulted; MT Falkin obtained a default judgment against Booster Club.
- Chisholm Trail sought summary judgment arguing it was not liable for WCCBA’s contractual obligations and that res judicata barred recovery after the Booster Club judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is WCCBA a nonprofit association or a partnership? | Falkin: may be partnership under TPBOC | Chisholm Trail: WCCBA is nonprofit under chapter 252 | WCCBA is a nonprofit association under chapter 252 |
| Does TUUNAA abrogate member liability for the WCCBA’s contracts? | TUUNAA does not abrogate common-law liability | TUUNAA abrogates; members not liable | TUUNAA abrogates; no member liability under 252 |
| Is Chisholm Trail liable under WCCBA contract despite 252? | Chisholm Trail authorized/ratified lease; fact issue | 252 shields from liability as member of nonprofit | No liability under 252; no need to resolve ratification if 252 applies |
| Does res judicata bar Falkin’s claim against Chisholm Trail? | Not expressly discussed as control issue | Res judicata could bar | Not reached; court ruled on liability grounds first |
Key Cases Cited
- Cox v. Thee Evergreen Church, 836 S.W.2d 167 (Tex. 1992) (unincorporated associations analogies; entity considerations)
- Karl Rove & Co. v. Thornburgh, 39 F.3d 1273 (5th Cir. 1994) (pre TUUNAA liability of members for association contracts)
- Izen v. Sjostrom, 2007 WL 968841 (Tex. App.—Houston [14th Dist.] 2007) (TUUNAA abrogates common-law member liability (memorandum))
- Mohr v. Kelley, 8 P.3d 543 (Colo. App. 2000) (UUNAA changes law; members not liable for contracts)
- Fetter v. Wells Fargo Bank Tex., N.A., 110 S.W.3d 683 (Tex. 2003) (official comments persuasive on uniform acts)
- FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (summary-judgment grounds; decide on any meritorious basis)
- First American Title Ins. Co. v. Combs, 258 S.W.3d 627 (Tex. 2008) (statutory construction; plain meaning governs)