Curtis C. Pennington v. John P. Fields, Kyle B. Phillips, Advantage Marking and Labeling, Inc., and Michael J. Collins, the Collins Law Group

CourtCourt of Appeals of Texas
DecidedAugust 21, 2018
Docket05-17-00321-CV
StatusPublished

This text of Curtis C. Pennington v. John P. Fields, Kyle B. Phillips, Advantage Marking and Labeling, Inc., and Michael J. Collins, the Collins Law Group (Curtis C. Pennington v. John P. Fields, Kyle B. Phillips, Advantage Marking and Labeling, Inc., and Michael J. Collins, the Collins Law Group) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Curtis C. Pennington v. John P. Fields, Kyle B. Phillips, Advantage Marking and Labeling, Inc., and Michael J. Collins, the Collins Law Group, (Tex. Ct. App. 2018).

Opinion

AFFIRM; and Opinion Filed August 21, 2018.

In The Court of Appeals Fifth District of Texas at Dallas No. 05-17-00321-CV

CURTIS C. PENNINGTON, Appellant V. JOHN P. FIELDS, KYLE B. PHILLIPS, ADVANTAGE MARKING AND LABELING, INC., MICHAEL J. COLLINS, AND THE COLLINS LAW GROUP, Appellees

On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-12400

MEMORANDUM OPINION Before Justices Francis, Brown, and Stoddart Opinion by Justice Brown Appellees John P. Fields, Kyle B. Phillips, and Advantage Marking and Labeling, Inc. sued

appellant Curtis C. Pennington seeking declaratory relief. Pennington filed counterclaims against

Fields and Phillips and brought a third-party action against appellees Michael J. Collins and the

Collins Law Group. All claims were resolved on the appellees’ motions for summary judgment.

The trial court granted Fields, Phillips, and Advantage declaratory relief and ordered that

Pennington take nothing on his counterclaims and third-party claims. In this appeal, Pennington

raises thirteen issues in which he contends the trial court erred in granting summary judgment. We

affirm. BACKGROUND

Pennington, Fields, and Phillips are the only shareholders of Advantage Marking and

Labeling. They each own one third of Advantage’s outstanding stock. Pennington was a founding

member of Advantage and until 2012 was its president and a member of its board of directors.

In May 2012, Fields and Phillips hired attorney Collins and his firm the Collins Law Group

(collectively referred to as “Collins”) to represent them in their individual capacities as

shareholders and directors of Advantage. They sought advice regarding the corporate governance

of Advantage. On June 27, 2012, Fields and Phillips called a special meeting of the board of

directors to remove Pennington from the office of president. In December 2012, Pennington was

removed from the board of directors.

In a previous lawsuit filed in July 2012, also in the 162nd District Court in Dallas County,

Pennington sued Fields, Phillips, and Advantage alleging minority shareholder oppression.

Advantage filed a counterclaim for conversion. Pennington later nonsuited his claim, but

Advantage’s counterclaim was tried to the court. In August 2013, the trial court rendered a take-

nothing judgment in favor of Pennington.

In October 2013, Fields, Phillips, and Advantage initiated the instant litigation against

Pennington. They sought declaratory relief. Pennington, both individually and derivatively on

behalf of Advantage, counterclaimed against Fields and Phillips and brought third-party claims

against Collins. Pennington’s counterclaims against Fields and Phillips were for the appointment

of a receiver over Advantage under chapter 11 of the business organizations code, breach of

fiduciary duty, conspiracy, and misappropriation and conversion of corporate funds. Pennington’s

third-party claims against Collins were for legal malpractice, breach of fiduciary duty, and

–2– conspiracy. Pennington alleged Fields, Phillips, and Collins conspired with each other to commit

breach of fiduciary duty.

The appellees filed various motions for summary judgment. Fields, Phillips, and

Advantage filed a motion for partial summary judgment on some of their requests for declaratory

relief, one of which involved res judicata. As counter-defendants, Fields and Phillips filed a

traditional and no-evidence motion for summary judgment. They asserted Pennington’s claims

against them were barred by res judicata and also asserted Pennington had no evidence of certain

elements of his claims against them and no evidence of any injury to Advantage that would support

any derivative claim. Collins filed a traditional and no-evidence motion for summary judgment

on Pennington’s claims against him. Among other things, Collins asserted he was entitled to

judgment as a matter of law because he never provided legal services to Pennington and owed him

no legal duty. Collins also filed a supplemental no-evidence motion on grounds Pennington had

no evidence of damages.

After a hearing on the motions for summary judgment, the trial court signed four orders on

December 21, 2016. By these orders, the trial court respectively: (1) granted Fields and Phillips’s

traditional motion on res judicata grounds and granted their no-evidence motion as to Pennington’s

claims on all grounds except for damages; (2) sustained Fields, Phillips, and Advantage’s

objections to Pennington’s summary judgment evidence; (3) granted Collins’s motion for

summary judgment without specifying the grounds; and (4) granted Fields and Phillips’s motion

for partial summary judgment on res judicata grounds and on three of their requests for declaratory

relief. After Fields and Phillips nonsuited unresolved requests for declaratory relief, the trial court

rendered a final judgment. In its judgment, the court ordered that Pennington take nothing on his

claims against Fields, Phillips, and Collins. The court also ordered that: (1) the decision to remove

Pennington from his positions as officer and director of Advantage did not violate any agreement

–3– or understanding between Advantage’s shareholders; (2) a Cross Purchase Agreement dated

November 21, 2006, is valid and enforceable; and (3) Advantage is within its authority to prohibit

the recording of any shareholder or board of directors meetings.

STANDARD OF REVIEW

In this appeal, Pennington raises thirteen issues challenging the trial court’s summary

judgment. We review the trial court’s summary judgment de novo. Valence Operating Co. v.

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). The standards for reviewing both traditional and no-

evidence motions for summary judgment are well established. See Timpte Indus., Inc. v. Gish, 286

S.W.3d 306, 310 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.

1985). A trial court must grant a traditional motion for summary judgment if the moving party

establishes that no genuine issue of material fact exists and that the movant is entitled to judgment

as a matter of law. Nixon, 690 S.W.2d at 548–49; see TEX. R. CIV. P. 166a(c). A no-evidence

summary judgment motion is essentially a motion for a pretrial directed verdict. Timpte Indus.,

286 S.W.3d at 310. To defeat a no-evidence motion for summary judgment, the nonmovant is

required to produce evidence that raises a genuine issue of material fact on each challenged

element of its claim. Rico v. L-3 Commc’ns Corp., 420 S.W.3d 431, 438 (Tex. App.—Dallas 2014,

no pet.); see TEX. R. CIV. P. 166a(i). We consider the evidence in the light most favorable to the

nonmovant. Rico, 420 S.W.3d at 438. A genuine issue of material fact exists if more than a

scintilla of evidence establishing the existence of the challenged element is produced. Ford Motor

Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). More than a scintilla of evidence exists if the

evidence rises to a level that would enable reasonable and fair-minded people to differ in their

conclusions. Id. at 601.

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Curtis C. Pennington v. John P. Fields, Kyle B. Phillips, Advantage Marking and Labeling, Inc., and Michael J. Collins, the Collins Law Group, Counsel Stack Legal Research, https://law.counselstack.com/opinion/curtis-c-pennington-v-john-p-fields-kyle-b-phillips-advantage-marking-texapp-2018.