Ezi Nnabugwu v. Enyimba Social Club, USA, Inc.

Court of Appeals of Texas·Decided October 16, 2019·No. 05-18-01334-CV·Published

Opinion

Affirmed; Opinion Filed October 16, 2019.

In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-18-01334-CV

EZI NNABUGWU, Appellant

V.

CHUMA COS-OKPALLA, LEONARD NWONUMAH, ANDERSON OBIAGWU, KINGSLEY NWASURUBA, AND BONNY UWAKWEH, INDIVIDUALLY AND DERIVATIVELY ON BEHALF OF ENYIMBA SOCIAL CLUB U.S.A., INC., Appellees

On Appeal from the 101st Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-14-12053

MEMORANDUM OPINION

Before Justices Myers, Osborne, and Nowell Opinion by Justice Myers

Ezi Nnabugwu brings this appeal from the trial court’s judgment in favor of Chuma Cos-

Okpalla, Leonard Nwonumah, Anderson Obiagwu, Kingsley Nwasuruba, and Bonny Uwakweh, individually and derivatively on behalf of Enyimba Social Club U.S.A., Inc. The trial court awarded appellees $30,000 in actual damages, $10,000 for exemplary damages, and attorney’s fees. The trial court also ordered appellant to turn over a trademark he had applied for on behalf of Enyimba Social Club, and the court enjoined appellant from conduct that interfered with the club. Appellant brings five issues on appeal contending the trial court abused its discretion by (1) awarding actual damages of $30,000, (2) awarding exemplary damages of $10,000, (3) awarding attorney’s fees through trial of $21,075, (4) ordering appellant to turn over the trademark to the club, and (5) granting the permanent injunction against him. We affirm the trial court’s judgment.

BACKGROUND

Enyimba Social Club is a for-profit Texas corporation organized as a social club for the purpose of aiding people from the city of Aba in Nigeria by bringing them together, providing social events and gatherings, and to “support them in times of brotherhood.” In 2014, the club had chapters in Dallas, Austin, Houston, Atlanta, and Chicago.

The club is governed by its National Executive Council (NEC), which the club’s constitution states is the “decision making body of the club.” The NEC consists of members selected by each chapter with the number of members from a chapter proportionate to the size of the chapter. The officers of the NEC include the president, vice-president, secretary, treasurer, and public relations officer. The president is the club’s principal officer. He is a signatory to the club’s bank accounts and approves the disbursement of the club’s funds. The constitution provides that the president has “the power to authorize expenses up to $500.00 annually without consulting cabinet members.” Amounts “in excess of $500.00 shall require 2/3 approval of NEC members.” The officers are elected at the club’s national convention held every three years. The terms of the current NEC officers end at the beginning of the convention, and the officers elected during the convention are sworn in. Only members of the NEC may vote in the election of the NEC officers.

Although the NEC is the club’s decision-making body, the constitution gives the club’s general assembly “the sole right to reject or reverse any enactment, decision, report or recommendation of NEC.”

The club also has a board of directors consisting of one member from each chapter. The constitution provides that the board’s functions include acting “as the co-coordinating authority on Enyimba affairs,” supporting the NEC and reviewing its performance, approving the budget for

NEC events, and undertaking studies and researching the urgency of matters brought to its attention by the chapters or the NEC. The board’s members also conduct the club’s election of the NEC officers.

This case concerns the events and their aftermath at the club’s national convention on July 12, 2014. Appellant, who was from the club’s Austin chapter, was the NEC president before the convention, and his term and the term of the other NEC officers ended as the convention began. Appellant was running for re-election as president against Victor Okereke from the Houston chapter. When the votes were tallied, the secretary of the board of directors announced appellant had twelve votes and Okereke had eleven. Appellees Cos-Okpalla, Nwonumah, and Nwasuruba, who were from the Houston and Dallas chapters, questioned whether one of the voters from the Austin chapter, Godfery Emeribe, was a member of the NEC. The board’s secretary, who also was from the Austin chapter, stated that Emeribe was an NEC member. When Emeribe was asked whether he was a member of the NEC, he admitted he was not but stated he was voting on behalf of an NEC member who had to leave the convention. The constitution states, “No member shall be allowed to vote or be voted for in absentia.” After Emeribe admitted he was not an NEC member, the general assembly decided that the presidential election would be canceled. The general assembly determined that the newly elected vice-president would be acting president until a new presidential election could be held, and the assembly gave him and the NEC thirty days to come up with a plan for electing a president.1 The newly elected officers were sworn in that night.

Six days later, appellant sent a letter to the board of directors stating the board should not go to the expense of holding a new election but should declare him to be the winner of the election at the convention. Appellant also sent letters to the officers stating he was president and that all

1 The minutes of the convention state the general assembly gave the interim president and the NEC thirty days to come up with a plan for the election. Witnesses testified that the general assembly required the NEC to hold the election within thirty days.

decisions had to be routed through him. Appellant closed one of the club’s bank accounts and moved the money to another bank. Testimony about the amount of money appellant moved varied from $20,000 to $28,000.

The NEC held the second presidential election on September 19, 2014. Appellant did not attend, and Okereke was elected and sworn in as president of the club.

After these events, there was a split in the club. Some members recognized appellant as president and followed him as he set up a separate governing body for the club, and others stayed with the officers elected at the convention and with Okereke as president. Although the club already had a website, appellant created another website in the club’s name that stated he was the president.2 Appellant then hired a lawyer, who filed suit in October 2014 in the club’s name against appellees in their individual capacities. The suit alleged appellees had filed false statements with the Texas Secretary of State identifying the club’s registered agent and board of directors. Amongst other claims, the suit sought a declaratory judgment that appellees had no authority to act on behalf of Enyimba Social Club.

The next year, appellant’s lawyers sent cease-and-desist letters to the Dallas and Houston chapters to stop using the club’s name and logo. Appellees then filed suit against appellant alleging his term as president ended on July 12, 2014 and that he refused to turn over the club’s assets. Appellees sought declaratory judgments that appellant was not president, that Okereke was president, and that appellant lacked authority to act on the club’s behalf. They also brought causes of action for conversion, money had and received, and breach of fiduciary duty for appellant’s

2 The only difference in the website names was the suffix: Enyimba Social Club’s website ended with “.org” while appellant’s website ended with “.com.”

closing the club’s bank account, moving the money to another bank, and refusing to provide an accounting for the funds. They also sought injunctive relief and attorney’s fees.

Before trial, appellant nonsuited the claims he brought in the club’s name against appellees.

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Ezi Nnabugwu v. Enyimba Social Club, USA, Inc., (Tex. Ct. App. 2019).

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