Zaan, LLC v. Barry Sangani, Sangini Properties, LTD, Kathy Webster
05-12-00423-CV
| Tex. App. | May 20, 2015Background
- In 2007 Fazeli wanted to buy raw land in Prosper, Texas; Mansourian and Sangani (partners) arranged a purchase through Sangani’s negotiations with the seller (DIRA).
- Sangani negotiated a purchase price from DIRA of $6.50/sq ft and arranged for Webster (a real-estate agent) to contract as buyer and then resell to Fazeli (later Zaan, LLC) at $7.50/sq ft, with the $1.00 flip profit directed to Sangani Entities.
- Fazeli formed Zaan after contracting and assigned the purchase contract to Zaan; Webster represented Zaan at closing and received her broker commission.
- Zaan later litigated against DIRA, discovered the flip profit, and added Sangani, Sangani Properties, and Webster alleging negligence, negligent misrepresentation, gross negligence, fraud (common-law and statutory), fraudulent inducement, and breach of fiduciary duty.
- Pretrial: the court granted partial summary judgment in favor of Sangani and Sangani Properties on various claims and a plea to the jurisdiction resulted in dismissal of Zaan’s claims against Sangani for lack of standing (Zaan did not exist when the alleged misrepresentations occurred).
- At trial the jury found for appellees (no fiduciary breach, no fraud); the trial court directed verdicts on certain vicarious-liability theories. The trial court rendered judgment that Zaan take nothing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue Sangani | Zaan: assignment of contract/claims from Fazeli gives Zaan standing to assert fraud and nondisclosure claims | Appellees: Zaan lacked standing because it did not exist when misrepresentations occurred; claims belonged to Fazeli; assignment after filing cannot cure lack of jurisdiction | Court: Affirmed dismissal of claims against Sangani for lack of standing (claims belonged to Fazeli; subsequent assignment did not retroactively vest standing) |
| Summary judgment on negligence/gross negligence (Sangani Properties) | Zaan: negligence claims survive; factual disputes exist | Sangani Properties: economic‑loss rule and no‑evidence show no duty or recoverable tort damages | Court: Affirmed summary judgment as to negligence/gross negligence (Zaan failed to challenge no‑evidence grounds) |
| No‑evidence summary judgment on negligent misrepresentation (Sangani Properties) | Zaan: misrepresentations to Fazeli/lack of disclosure created triable issues | Sangani Properties: no evidence the alleged misrepresentations were made to Zaan or that Sangani Properties failed to exercise reasonable care | Court: Affirmed no‑evidence dismissal (statements to Fazeli do not create negligence liability to Zaan; standing and element failures) |
| Jury verdicts on fiduciary duty and fraud (Webster and Sangani Properties) | Zaan: admissions and testimony establish fiduciary breach and (statutory and common‑law) fraud; verdict is against the weight or legally insufficient | Appellees: evidence supports jury findings (materiality, intent, and reliance contested; Fazeli possibly would have bought even if informed) | Court: Affirmed—Zaan failed to show the evidence conclusively establishes its claims or that verdicts were against the great weight of evidence |
| Directed verdicts / vicarious liability theories (partnership, ratification, joint enterprise) | Zaan: Sangani Properties vicariously liable for acts of agents/partners; trial by consent of fiduciary claim | Appellees: no direct liability established for principals/partners, so no vicarious liability; fiduciary relationship not pleaded for Sangani Properties | Court: Affirmed directed verdicts—no direct liability proven, so no vicarious or ratification liability for Sangani Properties |
| Exclusion of infrastructure‑cost evidence | Zaan: owners/party witnesses competent to testify to diminished market value and damages | Appellees: evidence was unreliable, hearsay, and proffer lacked expert basis for infrastructure cost and market valuation | Court: No reversible error—jury found no liability, Zaan failed to proffer admissible market‑value proof and cannot show harm from exclusion |
Key Cases Cited
- Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000) (standing may be raised by plea to the jurisdiction; courts consider pleadings and evidence presented at hearing)
- Nobles v. Marcus, 533 S.W.2d 923 (Tex. 1976) (fraud claims are personal to the defrauded party; only that party may sue)
- Town of Fairview v. Lawler, 252 S.W.3d 853 (Tex. App.—Dallas 2008) (standing is determined at the time suit is filed; later assignment does not retroactively confer jurisdiction)
- McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787 (Tex. 1999) (elements of negligent misrepresentation)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing legal and factual sufficiency of evidence)
- G & H Towing Co. v. Magee, 347 S.W.3d 293 (Tex. 2011) (vicarious liability requires proof of direct liability of the agent or actor)