Driveway Austin GP, LLC v. Turbo Partners, LLC

409 S.W.3d 197, 2013 WL 4525702, 2013 Tex. App. LEXIS 9846
CourtCourt of Appeals of Texas
DecidedAugust 7, 2013
Docket07-12-00191-CV
StatusPublished
Cited by1 cases

This text of 409 S.W.3d 197 (Driveway Austin GP, LLC v. Turbo Partners, LLC) 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.

Bluebook
Driveway Austin GP, LLC v. Turbo Partners, LLC, 409 S.W.3d 197, 2013 WL 4525702, 2013 Tex. App. LEXIS 9846 (Tex. Ct. App. 2013).

Opinions

OPINION

MACKEY K. HANCOCK, Justice.

Appellant, Driveway Austin GP, LLC, appeals the entry of summary judgment in favor of appellee, Turbo Partners, LLC, in [200]*200a declaratory judgment action. We will affirm the judgment of the trial court.

Factual and Procedural Background

In August of 2007, Driveway Austin, LP (“the limited partnership”) was created under a limited partnership agreement (“the LP agreement”) which defined the rights and duties of two classes of limited partners and named Driveway Austin GP, LLC (“Driveway”), as the general partner of the limited partnership. The limited partnership was formed to build and operate a fully functioning “road racing and off-road motorsports training and entertainment complex” in East Austin. Under the LP agreement, Class A limited partners provided the capital for the business but were not afforded the power to manage the business, while Class B limited partners provided no capital. The LP agreement expressly provided that the general partner could be removed only by a one hundred percent vote of the Class B limited partners. The LP agreement also provided that, “[ejxcept as herein otherwise expressly provided, this Agreement may be amended ... only by a written consent of a Majority in Interest of the Limited Partners.”

After certain Class A limited partners became dissatisfied with the state of the business, on August 3, 2010, a majority in interest of the Class A limited partners executed an Action by Written Consent of Limited Partners in Lieu of Special Meeting which, inter alia, purported to amend the LP agreement’s requirement that the general partner could be removed only by a unanimous vote of the Class B limited partners. Rather, under the August 8 amendment, the general partner could be removed by the vote or written consent of a majority in interest of the Class A limited partners. Driveway was notified about the amendments and made some efforts to appease the dissatisfied limited partners.

Despite Driveway’s efforts, on November 21, 2010, a majority in interest of the Class A limited partners executed an Action by Written Consent of Limited Partners in Lieu of Special Meeting which purported to amend the LP agreement to remove Driveway as general partner of the limited partnership and substitute the recently formed Turbo Partners, LLC (“Turbo”) as general partner. Driveway was notified of this change, and Turbo filed a certificate of amendment with the Texas Secretary of State to reflect that Turbo was the general partner of the limited partnership. However, when Turbo attempted to assume the position of general partner, Driveway thwarted its efforts.

After being unable to gain physical control of the limited partnership’s operations, Turbo filed suit against Driveway seeking declarations that the August 8 and November 21 amendments were valid and that Turbo was, in fact, the general partner of the limited partnership. After discovery, Turbo filed a motion for summary judgment requesting the declarations sought by their suit as well as an award of $20,000 in attorney’s fees. Soon thereafter, Driveway filed a motion for summary judgment seeking declarations that the amendments were invalid and that Driveway remained general partner of the limited partnership. In addition, Driveway amended its answer to include a plea to the jurisdiction and affirmative request for the same declarations sought by its summary judgment motion.

After considering the parties’ competing motions for summary judgment, the trial court issued an order denying Driveway’s plea to the jurisdiction, an order denying Driveway’s motion for summary judgment, an order sustaining certain of Turbo’s objections to Driveway’s summary judgment [201]*201evidence, and granted final summary judgment in favor of Turbo. The final summary judgment declared that the August 3 and November 21 amendments were authorized under the LP agreement. The final summary judgment also awarded Turbo $20,000 in attorney’s fees. After Driveway’s motion for new trial was overruled by operation of law, Driveway appealed.

Driveway presents six issues by its appeal. By its first and second issues, Driveway contends that the trial court erred in granting Turbo’s motion for summary judgment and denying Driveway’s motion for summary judgment because the LP agreement does not allow the limited partners to amend the LP agreement or remove the general partner by a simple majority. By its third issue, Driveway alternatively contends that the amendment provision of the LP agreement is vague and ambiguous and, therefore, not appropriate for summary judgment. By its fourth issue, Driveway contends that the trial court erred in denying Driveway’s plea to the jurisdiction. Driveway’s fifth issue contends that the trial court’s award of attorney’s fees to Turbo was not supported by evidence that it was equitable and just. Finally, by its sixth issue, Driveway contends that the trial court erred in sustaining certain of Turbo’s objections to Driveway’s summary judgment evidence.

Issues 1 & 2: Authority to Amend

By its first two issues, Driveway contends that the trial court erred in granting summary judgment because the LP agreement’s provision requiring the unanimous vote of the Class B limited partners to remove the general partner cannot be amended by a vote of a simple majority in interest of the Class A limited partners under the LP agreement’s general amendment provision. Turbo responds that Driveway misconstrues the amendment provision and that the trial court properly granted summary judgment in favor of Turbo and properly denied Driveway’s motion for summary judgment.

When a trial court resolves a declaratory judgment action on competing motions for summary judgment, “we review the propriety of the declaratory judgment under the same standards that we apply in reviewing a summary judgment.” Hicks v. Castille, 313 S.W.3d 874, 879 (Tex.App.-Amarillo 2010, pet. denied) (quoting City of Galveston v. Tex. Gen. Land Office, 196 S.W.3d 218, 221 (Tex.App.-Houston [1st Dist.] 2006, pet. denied)). We review a trial court’s decision to grant or deny a motion for summary judgment de novo. Id. (citing Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184, 192 (Tex.2007)). Although the denial of summary judgment is ordinarily not appealable, we may review such a denial when both parties moved for summary judgment and the trial court granted one and denied the other. Id. When reviewing competing motions for summary judgment, we review the summary judgment evidence presented by each party, determine all questions presented, and render the judgment that the trial court should have rendered. Id. (citing Tex. Mun. Power Agency, 253 S.W.3d at 192). In the present case, each party moved for traditional summary judgment. See Tex.R. Civ. P. 166a(c). Traditional summary judgment is appropriate if the movant has shown that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. See id., Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.2002).

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Bluebook (online)
409 S.W.3d 197, 2013 WL 4525702, 2013 Tex. App. LEXIS 9846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/driveway-austin-gp-llc-v-turbo-partners-llc-texapp-2013.