Knowles v. Wright

288 S.W.3d 136, 2009 Tex. App. LEXIS 1931, 2009 WL 723885
CourtCourt of Appeals of Texas
DecidedMarch 19, 2009
Docket01-08-00546-CV
StatusPublished
Cited by26 cases

This text of 288 S.W.3d 136 (Knowles v. Wright) 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
Knowles v. Wright, 288 S.W.3d 136, 2009 Tex. App. LEXIS 1931, 2009 WL 723885 (Tex. Ct. App. 2009).

Opinion

OPINION

TERRY JENNINGS, Justice.

Appellants, Christopher Knowles and Mina Mann, challenge the trial court’s rendition of summary judgment in favor of appellee, Jimmy D. Wright, in their suit against Wright for breach of contract, breach of fiduciary duty, quantum meruit, and fraud. Knowles and Mann bring four issues for our review. In their first two issues, Knowles and Mann contend that the trial court erred in granting summary judgment on their breach of contract claim on the ground that Knowles’s oral contract with Wright was not “sufficiently definite” and in granting summary judgment on their claim for breach of fiduciary duty arising from a partnership on the ground that Knowles and Wright had not formed a partnership under Texas law. In their third issue, Knowles and Mann contend that the trial court erred in granting summary judgment against Mann on the *139 ground that she, as Knowles’s former wife, does not have standing to sue Wright. In their fourth issue, Knowles and Mann contend that the trial court erred in granting summary judgment on their claims for quantum meruit, breach of fiduciary duty arising from a relationship of trust and confidence, and fraud because Wright did not seek summary judgment on those claims.

We affirm in part and reverse and remand in part.

Factual and Procedural Background

In their second amended petition, Knowles and Mann alleged that, in 2003, Knowles, a landman, approached Wright, a friend and business associate, about a proposed “business plan to exploit the Barnett Shale,” a “blanket gas reservoir” in Texas, and Wright orally agreed to be Knowles’s partner in “build[ing] a business focused on the Barnett Shale.” In May 2003, Wright formed Westside Energy, LLP (the “Westside Partnership”) to exploit the Barnett Shale opportunities, and Knowles and Wright orally agreed that, in consideration for Knowles’s presenting the opportunity to Wright, and in exchange for Knowles’s further consulting work, Knowles would receive 50% of Wright’s interests in the business after Wright had recovered his costs.

Knowles further alleged that, “[pjursu-ant to this business arrangement,” he provided consulting services and the Westside Partnership, with his assistance, “acquired several leases in the Barnett Shale and developed plans to drill wells and grow the business.” Later in 2003, Wright transferred assets of Westside Partnership, “primarily the leases and business plan,” to Westside Energy Corporation (“the Westside Corporation”), which had been a “dormant oil and gas company” owned by Keith Spicklemier, another friend ' of Knowles. 1 In exchange for the transfer of assets and an additional $23,000, the West-side Partnership received approximately three million shares of Westside Corporation stock and another 150,000 warrants to purchase Westside Corporation stock at 50 cents per share. Wright “repeatedly promised” Knowles that if he would continue providing consulting services, Knowles would receive a “substantial boot” of 50% of the Westside Corporation’s stock. At this point, the business plan, as alleged by Knowles, was to grow Westside Corporation “to get Wright in a position to monetize his stock” in six to nine months. Again, Wright stated his promise to give Knowles 50% of his Westside Corporation shares in exchange for Knowles’s continued consulting services from 2004 to 2006.

Knowles further alleged that by April 2007, Wright, “through” the Westside Partnership, 2 owned approximately 3.4 million shares of the Westside Corporation, which had since become a publicly traded corporation on the American Stock Exchange. Although, “[pjursuant to their agreements,” Knowles was entitled “to one-half of the shares that Wright and his companies had received in [Westside Corporation],” Wright, in early 2006, refused to honor “his promise,” and, instead, offered to Knowles “far less than the approximately [1.7 million] shares” owed to Knowles.

Knowles and Mann asserted claims for breach of contract, breach of fiduciary duty, fraud, and quantum meruit. In sup *140 port of their contract claim, Knowles and Mann alleged that Knowles had a legally binding contract with Wright to “share one half of the business with Knowles” in exchange for Knowles’s idea and consulting services to grow the Westside Corporation. In support of this claim for breach of fiduciary duty arising from a partnership, Knowles and Mann alleged that Knowles had formed a partnership with Wright to exploit the Barnett Shale and that, under the express terms of the partnership, Wright had agreed to share one-half of the operating business with Knowles in exchange for Knowles’s idea and consulting services.

After answering, Wright filed a summary judgment motion on Knowles’s claims for breach of contract and breach of fiduciary duty arising from a partnership. Wright argued that Knowles and Mann’s breach of contract claim was barred as a matter of law because “the alleged oral agreement [was] unenforceable due to a lack of clear, certain, and definite terms.” Wright also argued that Knowles and Mann’s claim for breach of fiduciary duty arising from a partnership was barred as a matter of law because the parties did not have a fiduciary relationship. Finally, Wright asserted that Mann had no claims against Wright. Wright attached to his summary judgment motion both his and Knowles’s deposition testimony. Citing to their testimony, Wright contended that none of the essential terms of the purported agreement were “clear, certain, [or] definite terms.” He asserted that the purported oral agreement was not definite as to what services Knowles was obligated to perform, what Wright was required to give Knowles, and when and for how long each party would be expected to perform his respective obligations.

In his response to Wright’s motion, Knowles asserted that the summary judgment record “clearly define[d]” that the parties had orally agreed that, in consideration for Knowles’s presentation of the opportunity to Wright and the performance of consulting work, Wright promised Knowles “50% of Wright’s interest in the business after Wright had monetized the investment and recovered his cost.” Knowles contended that their oral agreement “later became more specific when [Westside Corporation] was identified as the business entity that would be used to develop the Barnett Shale opportunity, whereby Wright promised Knowles 50% of his shares of [Westside Corporation] stock as soon as they became transferable.” Knowles attached to his response his affidavit, in which he testified that in 2003 he approached Wright “with a plan to develop a business to invest in and exploit the Barnett Shale,” and Wright agreed to the idea and further agreed to be Knowles’s partner. Knowles further testified,

We agreed that, in consideration for my conceiving this idea and then offering Wright the opportunity to participate, and in exchange for my further consulting work at a reduced rate of payment, I would receive fifty percent of Wright’s interests in the business after Wright had recovered his costs. Wright promised to transfer those shares as soon as they were legally transferable. The initial plan for our partnership was to purchase lease interests associated with the Barnett Shale and sell them quickly.

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Cite This Page — Counsel Stack

Bluebook (online)
288 S.W.3d 136, 2009 Tex. App. LEXIS 1931, 2009 WL 723885, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knowles-v-wright-texapp-2009.