Phap v. Nguyen, Andy Ngo and Dung T. Vu v. Manh Hoang and Dung Le
2016 Tex. App. LEXIS 11273
Tex. App.2016Background
- Family members pooled money in 2006 to buy a Georgia chicken farm; contributions mapped to percentage shares (Nguyen/Vu 25%, Hoang 25%, Le 15.6%, Andy Ngo 10%, others nonparties). Title and loan documents listed only the three appellants (Nguyen, Ngo, Vu).
- Parties later sold the Georgia farm, bought a First Texas farm, sold it in 2010, and appellants purchased a Second Texas farm without including appellees.
- Appellant Andy Ngo prepared distribution calculations that withheld (a) ~20% of profits as labor compensation for himself and Nguyen and (b) amounts labeled as taxes; appellees received reduced distributions. Le’s distribution was partly given to her then-boyfriend Tuan Ngo, whom she said did not contribute funds.
- Appellees sued for breach of the partnership agreement and breach of partnership duties (and alleged breach of fiduciary duty); a jury found a partnership existed, found breaches by all three appellants, and awarded damages on both contract and partnership-duty claims (but awarded no exemplary damages for fiduciary breach).
- Trial court entered judgment awarding both contract and partnership-duty damages to Hoang and Le; appellants appealed on sufficiency and other grounds, including the one-satisfaction rule.
- Court of Appeals modified judgment: affirmed partnership finding and partnership-duty awards, but deleted the separate contract awards to avoid double recovery under the one-satisfaction rule.
Issues
| Issue | Plaintiff's Argument (Hoang/Le) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| Existence of a partnership | Parties agreed to share profits by contribution percent; parties participated in decisions, paid salaries, shared losses/loan interest — supports partnership factors | Appellants said appellees were mere investors; title/loan documents named only appellants; no formal written partnership | Partnership upheld: evidence (profit sharing, contributions, control, and loss-sharing) sufficed to find a general partnership under the GPA |
| Breach of partnership agreement / contract damages | Appellees: appellants breached agreed ownership shares and improperly withheld labor and tax amounts, causing quantifiable lost proceeds | Appellants: no contract breach — appellees were investors; withholding labor amounts justified or compensable; insufficient damages | Breach-of-agreement claim supported: jury’s contract-damages numbers traced to withheld labor/tax amounts, but award vacated on appeal due to double recovery (see one-satisfaction) |
| Breach of statutory partnership duties; Vu’s liability | Appellees: managing partners withheld funds and used proceeds to buy the Second Texas farm; Vu ratified distribution decisions and thus is liable as a partner | Appellants: Vu was passive and should not be liable merely as Nguyen’s wife or because she signed title | Jury’s partnership-duty findings supported; damages based on total withheld ($848,835 × partners’ percentages) sustained; Vu liable by virtue of partnership status and ratification/socially consistent conduct |
| One‑satisfaction / double recovery | Appellees sought recovery on alternative theories (contract and statutory duties) for same wrongs | Appellants: awarding both contract and partnership-duty damages results in double recovery | Court applied one-satisfaction rule: reformed judgment to award only the remedy affording greatest recovery (breach of partnership duties) and deleted contract awards |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standard for legal‑sufficiency review)
- Ingram v. Deere, 288 S.W.3d 886 (Tex. 2009) (statutory partnership factors and analysis under Texas partnership law)
- Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) (definition of more‑than‑a‑scintilla standard)
- Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997) (evidentiary standards referenced for sufficiency)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (one‑recovery/one‑injury principle)
- Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1 (Tex. 1991) (one‑satisfaction rule preventing duplicate recovery)
- K & G Oil & Tool Serv. Co. v. G & G Fishing Tool Serv., 314 S.W.2d 782 (Tex. 1958) (ratification and partner liability principles)