in Re Murrin Brothers 1885, Ltd., Eri-Bbtx, LLC, and Concho Minick, Individually and Derivatively on Behalf of Billy Bob's Texas Investments, LLC, Philip Murrin, and Cowtown Concessions, Inc., D/B/A River Ranch Stockyards

CourtTexas Supreme Court
DecidedDecember 20, 2019
Docket18-0737
StatusPublished

This text of in Re Murrin Brothers 1885, Ltd., Eri-Bbtx, LLC, and Concho Minick, Individually and Derivatively on Behalf of Billy Bob's Texas Investments, LLC, Philip Murrin, and Cowtown Concessions, Inc., D/B/A River Ranch Stockyards (in Re Murrin Brothers 1885, Ltd., Eri-Bbtx, LLC, and Concho Minick, Individually and Derivatively on Behalf of Billy Bob's Texas Investments, LLC, Philip Murrin, and Cowtown Concessions, Inc., D/B/A River Ranch Stockyards) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
in Re Murrin Brothers 1885, Ltd., Eri-Bbtx, LLC, and Concho Minick, Individually and Derivatively on Behalf of Billy Bob's Texas Investments, LLC, Philip Murrin, and Cowtown Concessions, Inc., D/B/A River Ranch Stockyards, (Tex. 2019).

Opinion

IN THE SUPREME COURT OF TEXAS ══════════ No. 18-0737 ══════════

IN RE MURRIN BROTHERS 1885, LTD., ERI-BBTX, LLC, AND CONCHO MINICK, INDIVIDUALLY AND DERIVATIVELY ON BEHALF OF BILLY BOB’S TEXAS INVESTMENTS, LLC, PHILIP MURRIN, AND COWTOWN CONCESSIONS, INC., D/B/A RIVER RANCH STOCKYARDS ══════════════════════════════════════════ ON PETITION FOR WRIT OF MANDAMUS ══════════════════════════════════════════

Argued October 10, 2019

JUSTICE BLACKLOCK delivered the opinion of the Court.

The parties to this mandamus action are warring ownership factions of “the world’s largest

honky-tonk,” the iconic Fort Worth establishment Billy Bob’s. Both sides, the Hickman Group

and the Murrin Group, assert the right to control the management of Billy Bob’s. The litigation

began in May 2017. By January 2018, it was nearly ready for trial, when the Murrin Group,

relators in this case, moved to disqualify the Hickman Group’s lawyers. Conflicts of interest can

require disqualification of counsel in some circumstances, even at a late stage of the case, and

courts must carefully examine alleged conflicts to ensure the integrity of the judicial process. In

these circumstances, however, the Murrin Group relators have not established a clear entitlement

to the harsh remedy of attorney disqualification. Nor have they established their lack of an

adequate remedy at law if the case proceeds with its current alignment of parties and counsel. For

the reasons explained below, the Court denies mandamus relief. I. Factual and Procedural Background

Billy Bob’s is a historic entertainment venue located in the Fort Worth Stockyards. In

2011, the three long-time owners of Billy Bob’s—Steve Murrin, Don Jury, and Holt Hickman—

decided to reorganize the company. They brought in additional owners and collectively formed

Bill Bob’s Texas Investments (BBT), a closely held LLC, to own and manage Billy Bob’s. BBT’s

owners adopted a Company Agreement, which dictates BBT’s structure and contains rules for the

management of BBT. One of those rules requires unanimous consent of the owners to any “matter

within the scope of any major decision.” Among the “major decisions” requiring unanimous

consent is “settling, prosecuting, defending or initiating any lawsuit, administrative or similar

actions concerning or affecting the business of BBT LLC and/or the BBT LLC Property.” After

adopting the Company Agreement, the owners received a Certificate of Formation for BBT from

the Secretary of State. The Certificate of Formation lists six “Governing Persons” of BBT, all of

whom are either owners of BBT or closely related to an owner or ownership entity.

On January 1, 2011, Concho Minick, both an owner and a Governing Person, was

unanimously elected President and Managing Member with “full power and authority to make and

carry out all decisions in connection” with “the ordinary, daily and routine business affairs of

BBT.” Several years later, nine of BBT’s twelve owners—and four of its six Governing Persons—

became dissatisfied with Minick’s performance. This opinion refers to the anti-Minick faction as

the Hickman Group. In May 2017, the Hickman Group attempted to dismiss Minick by a majority

vote of the Governing Persons.

Despite the Hickman Group’s attempt to dismiss him, Minick claimed a right to remain as

President and Managing Member. He claimed his dismissal was a “major decision” for which the

2 Company Agreement required a unanimous vote of the owners. Under that theory, the Hickman

Group’s dismissal of Minick was invalid because three owners—Minick himself, Murrin Brothers

1885, Ltd., and ERI-BBTX, LLC—opposed Minick’s dismissal. Two Governing Persons—

Minick and Steve Murrin—opposed the dismissal as well. This opinion refers to the pro-Minick

faction as the Murrin Group. Generally speaking, the Murrin Group are the Relators in this

mandamus action, while the Hickman Group are the Real Parties in Interest. 1

The Murrin Group responded to the Hickman Group’s attempt to dismiss Minick by filing

the underlying lawsuit against the Hickman Group. The suit contained claims asserted individually

by the members of the Murrin Group and claims asserted derivatively on behalf of BBT. The suit

sought injunctive relief to prevent the Hickman Group from acting unilaterally on behalf of BBT

and the appointment of a receiver for BBT to break the intractable gridlock allegedly caused by

the unanimity provision. It also sought a declaration that the four Governing Persons in the

Hickman Group lacked authority to replace Minick as Managing Member without a unanimous

vote.

The Hickman Group hired the law firm of Kelly Hart & Hallman (KHH) to represent BBT

in the litigation and to represent the defendants named in the Murrin Group’s suit. The engagement

letter with KHH was signed by BBT’s CFO as well as nine of BBT’s twelve owners and four of

its six Governing Persons. It appears to be undisputed that KHH’s legal fees have been paid from

BBT’s funds, both for its representation of BBT itself and at least to some extent for its

1 The terms “Hickman Group” and “Murrin Group” are used for convenience and, hopefully, for clarity. They are not intended to have any legal significance. Both groups contain several entities and individuals, and we do not suggest that all members of each “Group” share identical interests or are perfectly aligned procedurally in every nook and cranny of this complex case.

3 representation of the individuals and entities comprising the Hickman Group. KHH filed

counterclaims, again on behalf of both the Hickman Group members individually and on behalf of

BBT derivatively. The counterclaims also sought appointment of a receiver for BBT.

Between May 2017 and January 2018, the parties engaged in active litigation, including

competing summary judgment motions, which the trial court denied in November 2017. The case

was set for trial in April 2018. In January 2018, the Murrin Group filed a motion to disqualify

KHH as counsel for BBT and as counsel for the Hickman Group. The motion alleged that because

BBT is the “plaintiff” in the Murrin Group’s derivative claims against the Hickman Group, KHH’s

representation of both BBT and the Hickman Group amounts to the impermissible representation

of both sides in the same case. And because BBT is really a plaintiff, the Murrin Group alleged,

KHH must also be disqualified from representing the individual Hickman Group defendants who

are adverse to KHH’s former client, BBT. In March 2018, the Murrin Group filed a Rule 12

motion, which required KHH to “show [its] authority” to represent BBT. TEX. R. CIV. P. 12. The

Rule 12 motion argued that the decision to hire counsel on behalf of BBT was a “major decision”

requiring unanimous agreement of the owners. The Hickman Group’s principal response was that

the Certificate of Formation granted them authority to hire counsel for BBT with a simple majority

of the Governing Persons.

The trial court denied both motions. It did not explain its denial of the motion to disqualify.

As to the Rule 12 motion, the trial court explained in writing that the letter of representation and

BBT’s Certificate of Formation constituted the “sufficient authority” required by the rule. The

Murrin Group sought mandamus relief in the court of appeals as to the denial of both motions.

The court of appeals denied relief without explanation. The Murrin Group filed a petition for writ

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in Re Murrin Brothers 1885, Ltd., Eri-Bbtx, LLC, and Concho Minick, Individually and Derivatively on Behalf of Billy Bob's Texas Investments, LLC, Philip Murrin, and Cowtown Concessions, Inc., D/B/A River Ranch Stockyards, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-murrin-brothers-1885-ltd-eri-bbtx-llc-and-concho-minick-tex-2019.