Medical Discount Pharmacy, L.P., Lifechek Rosenberg GP, Inc., LifeChek, Inc. and Bruce v. Gingrich, Individually v. State of Texas

Opinion

ACCEPTED 01-13-00963-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 7/22/2015 3:26:59 PM CHRISTOPHER PRINE CLERK

No. 01-13-00963-CV FILED IN 1st COURT OF APPEALS IN THE FIRST COURT OF APPEALS HOUSTON, TEXAS 7/22/2015 3:26:59 PM HOUSTON, TEXAS CHRISTOPHER A. PRINE Clerk _________________________________________________________________

MEDICAL DISCOUNT PHARMACY, L.P., LIFECHEK ROSENBERG GP, INC., LIFECHEK, INC., AND BRUCE V. GINGRICH, INDIVIDUALLY,

Appellants, v. STATE OF TEXAS, Appellee

On Appeal from Cause No. 12-DCV-196841 In the 434th District Court of Fort Bend County, Texas _______________________________________________________________

APPELLEE’S MOTION FOR REHEARING

Rosemarie Donnelly Assistant Attorney General State Bar No. 05983020 Office of the Attorney General of Texas Consumer Protection Division 808 Travis, #1520 Houston, Texas 77002 Phone: 713-225-8919 Fax: 713-223-5821 rosemarie.donnelly@texasattorneygeneral.gov TO THE HONORABLE FIRST COURT OF APPEALS:

Appellee, the State of Texas, respectfully submits this Motion for Rehearing

in response to the judgment and opinion issued by the Court on July 7, 2015, and

requests that the Court consider the following issue:

ISSUE PRESENTED FOR REVIEW

Issue 1 The Court of Appeals erred in rendering judgment that the State of Texas take nothing on its claims against Lifechek Rosenberg GP, Inc. instead of finding that as general partner Lifechek Rosenberg GP, Inc. is jointly and severally liable for the portion of the judgment rendered against the limited partnership, Medical Discount Pharmacy, L.P.

ARGUMENT

The judgment of the Court of Appeals erroneously renders judgment that the

State of Texas take nothing on its claims against Lifechek Rosenberg GP, Inc. The

judgment of the Court of Appeals should be corrected to state that Lifechek

Rosenberg GP, Inc., as general partner of Medical Discount Pharmacy, L.P., is

jointly and severally liable for the judgment rendered against the limited partnership,

Medical Discount Pharmacy, L.P.

Even if Lifechek Rosenberg has no independent liability in this case, it

nevertheless is jointly and severally liable for the judgment rendered against the

limited partnership, Medical Discount Pharmacy, L.P. Under Texas limited

partnership law, generally “a general partner of a limited partnership has the 2 liabilities of a partner in a partnership without limited partners to a person other than

the partnership or other partners.” Tex. Bus. Org. Code §153.152(b) (formerly Tex.

Rev. Limited Partnership Act § 4.03(b)). A general partner may be sued in the same

action as the limited partnership or in a separate action and may be jointly and

severally liable for the obligations of the limited partnership, including judgments.

Tex. Bus. Org. Code §152.304(a); §152.305;§152.306. See e.g., In re Anzalduas

Bus. Park, L.P., 494 B.R. 704, 713 (Bankr. S.D. Tex. 2013).

Section 152.306(a) of the Texas Business Organizations Code states that “[a]

judgment may be entered against a partner who has been served with process in a

suit against the partnership.” Tex. Bus. Org. Code §152.306(a). Subsection (b)

provides that a judgment creditor “may proceed against one or more partners or the

property of the partners to satisfy a judgment based on a claim against the partnership

only if a judgment:

(1) is also obtained against the partner; and

(2) based on the same claim:

(A) is obtained against the partnership;

(B) has not been reversed or vacated; and

(C) remains unsatisfied for 90 days after:

(i) the date on which the judgment is entered; or

3 (ii) the date on which the stay expires, if the judgment

is contested by appropriate proceedings and

execution on the judgment is stayed.”

Tex. Bus. Org. Code §152.306(b). See American Star Energy & Minerals Corp. v.

Stowers, 457 S.W.3d 427, 429-30 (Tex. 2015).

The State respectfully requests that the judgment be corrected to state that

Lifechek Rosenberg GP, Inc., as general partner of Medical Discount Pharmacy,

L.P., is jointly and severally liable for the judgment rendered against Medical

Discount Pharmacy, L.P. In this case, it was undisputed that Lifechek Rosenberg

GP, Inc. was the general partner of Medical Discount Pharmacy, L.P.

(Memorandum Opinion, p. 2; Appellants’ Reply Brief, pp. 9-10; PX 58 (p.1), RR

10:763-769 (admitted at RR 3:18)). Lifechek Rosenberg GP, Inc. was named in the

underlying lawsuit as general partner of Medical Discount Pharmacy, L.P. and

served with process. (CR 11, 13, 26, 34, 36, 90, 91) Therefore, Lifechek Rosenberg

GP, Inc. had notice of its potential liability as general partner and should be named

in the judgment as jointly and severally liable for the judgment against Medical

Discount Pharmacy, L.P. See KAO Holdings, L.P. v. Young, 261 S.W.3d 60, 63

(Tex. 2008).

4 PRAYER

For the reasons stated, Appellee, the State of Texas, requests that the Court

grant this Motion for Rehearing and correct the Court’s judgment to i) delete the

portion which states that the State of Texas take nothing on its claims against

Lifechek Rosenberg GP, Inc., and ii) add that Lifechek Rosenberg GP, Inc. is jointly

and severally liable for the judgment rendered against Medical Discount Pharmacy,

L.P.

Respectfully submitted,

KEN PAXTON Attorney General of Texas

CHARLES E. ROY First Assistant Attorney General

JAMES E. DAVIS Deputy Attorney General for Civil Litigation

TOMMY PRUD’HOMME Chief, Consumer Protection Division

/s/ Rosemarie Donnelly ___________________________ Rosemarie Donnelly Assistant Attorney General State Bar No. 05983020 Assistant Attorney General Consumer Protection Division 808 Travis, Suite 1520 Houston, Texas 77002 5 Telephone (713) 225-8919 Facsimile (713) 223-5821 rosemarie.donnelly@ texasattorneygeneral.gov

ATTORNEYS FOR APPELLEE, THE STATE OF TEXAS

CERTIFICATE OF COMPLIANCE

This is to certify that, based upon the Word program used, the text of the foregoing Motion contains 635 words. /s/ Rosemarie Donnelly ____________________________________ Rosemarie Donnelly

CERTIFICATE OF SERVICE

I hereby certify that, on July 22, 2015, a true and correct copy of the Motion for Rehearing was served to the following: Bruce E. Ramage – via email and e-filing Levon G. Hovnatanian – via email and e-filing Martin, Disiere, Jefferson & Wisdom, L.L.P 808 Travis, #1800 Houston, Texas 77002 Attorneys for Appellants Medical Discount Pharmacy, L.P., LifeChek Rosenberg GP, Inc., LifeChek, Inc., and Bruce V. Gingrich, Individually

________/s/ Rosemarie Donnelly__ Rosemarie Donnelly