Sonwalkar v. St. Luke's Sugar Land Partnership, L.L.P.
394 S.W.3d 186
| Tex. App. | 2012Background
- Partnership owns St. Luke’s Sugar Land Hospital as a Texas LLC; two classes of units (Class A for physicians, Class B for Managing Partner) initially set at 49% A and 51% B for Percentage Interest.
- Amended Partnership Agreement (July 2007) eliminated fixed 49/51 split and introduced a formula dividing units by total units held, regardless of class.
- Amendment also gave the Managing Partner a right to buy Class B units to keep ownership proportionate as Class A units are issued.
- Governing Board has 15 members: 8 appointed by the Managing Partner and Physician Representatives appointed by Class A holders; major actions require 75% of Partnership Interest or Voting Interest.
- In April 2011 Patel sued the Partnership for various claims; a rescission offer was made to Class A holders, most accepted, but Patel (and later Vijayan) did not accept.
- After multiple injunction proceedings, a capital call was issued to remaining Class A holders (Patel, Vijayan, Sonwalkar, Oladut) with termination risk for nonpayment; Sonwalkar and Oladut joined as co-plaintiffs seeking injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the capital call was authorized under the Amended Partnership Agreement requiring 75% approval. | Sonwalkar and Oladut argue Class A controls 49% of Voting Interest; capital call lacks 75% approval. | Partnership contends changes reduced Class A influence; capital call approved under governing board rules. | Yes; capital call lacked 75% Voting Interest approval under the current agreement. |
| Whether irreparable injury standard is required or superseded by Section 152.211(b). | Section 152.211(b) authorizes equitable relief to enforce rights, defeating irreparable injury requirement. | Statutory relief does not automatically remove irreparable injury requirement; injury here is monetaryizable. | Section 152.211(b) does not supersede irreparable injury; irreparable injury shown due to loss of management rights. |
| Whether there is a probable right to injunctive relief to prevent termination of Class A interests given 49% voting control. | Amended Agreement vests 49% of Voting Interest in Class A physicians; capital call cannot be enacted. | Governing Board can act under amended terms; 75% threshold governs actions. | Yes; plaintiff demonstrated probable right to injunctive relief to prevent 75%-required actions. |
Key Cases Cited
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (three-part test for temporary injunction; irreparable harm standard retained unless statute governs)
- In re Newton, 146 S.W.3d 648 (Tex. 2004) (interlocutory review limits; status quo preservation)
- Walling v. Metcalfe, 863 S.W.2d 56 (Tex. 1993) (temporary injunction scope and abuse of discretion standard)
- Town of Palm Valley v. Johnson, 87 S.W.3d 110 (Tex. 2001) (statutory injunctive relief does not supplant irreparable injury requirement)
- Ruiz Wholesale Co., 901 S.W.2d 772 (Tex.App. Austin 1995) (changed circumstances; no piecemeal relief where grounds were available earlier)
- North Cypress Med. Ctr. Operating Co. v. St. Laurent, 296 S.W.3d 171 (Tex.App. Houston [14th Dist.] 2009) (irreparable injury not shown when ownership lacks control rights)
- Health Discovery Corp. v. Williams, 148 S.W.3d 167 (Tex.App. Waco 2004) (injunctive relief may be appropriate where share transfers threaten irreparable harm to corporate structure)