Mohamed Ahmed v. Hinga Mbogo

CourtCourt of Appeals of Texas
DecidedJuly 30, 2018
Docket05-17-00457-CV
StatusPublished

This text of Mohamed Ahmed v. Hinga Mbogo (Mohamed Ahmed v. Hinga Mbogo) 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
Mohamed Ahmed v. Hinga Mbogo, (Tex. Ct. App. 2018).

Opinion

Affirmed; Opinion Filed July 30, 2018.

In The Court of Appeals Fifth District of Texas at Dallas No. 05-17-00457-CV

MOHAMED AHMED, Appellant V. HINGA MBOGO, Appellee

On Appeal from the 101st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-06400

MEMORANDUM OPINION Before Justices Lang-Miers, Myers, and Boatright Opinion by Justice Myers This is an appeal from a final judgment in favor of appellee Hinga Mbogo following

motions for summary judgment and a four-day jury trial. In twenty-three issues, appellant

Mohamed Ahmed contests the trial court’s denial of his motion for summary judgment; the legal

and factual sufficiency of the evidence supporting the jury’s verdict; the trial court’s refusal of

appellant’s proposed jury questions; and the granting of appellee’s motion for partial summary

judgment. We affirm.

BACKGROUND AND PROCEDURAL HISTORY

Appellee Hinga Mbogo is an automotive mechanic. In the 1980s, he moved to Dallas and

began working as a certified auto mechanic. In 1986, appellee leased a portion of a property

located at the 3500 block of Ross Avenue, in Dallas, Texas, for the purpose of owning and

operating an automotive repair business, Universal Motors. With the help of two other mechanics, Martin Nganga and Charles Kaguma, appellee operated Universal Motors on the property until

June of 1991, at which point the property’s owner approached appellee about buying the property

––three lots in city block 513 of the City of Dallas, Texas, located at 3512, 3516, and 3520 Ross

Avenue––for $178,000, with an up-front $30,000 down payment. Appellee wanted to purchase

the property but neither he nor his two mechanics had sufficient funds to make the down payment.

Appellee learned, however, that a former auto repair customer, appellant Mohamed Ahmed, who

was not a mechanic, might be interested in contributing the money for the down payment in

exchange for an ownership interest in the business.

The parties’ discussions ultimately resulted in the purchase of the property and the

formation of a new business entity, “Universal Auto Repair, Inc.,” that operated a new automotive

repair business in place of the one appellee previously operated. They signed a ten-year note for

$178,080; appellant contributed the $30,000 down payment for the property’s purchase. Appellee

contributed the automotive repair business he already operated on the property, along with its tools

and equipment. Three of the four persons involved––appellee, Nganga, and Kaguma–––testified

that their understanding of the parties’ oral agreement was that for their interest in the business

and property to vest, they had to work full time for the business for ten years, and anyone who left

the business in the first ten years of operation forfeited his ownership interest. As appellee

described it: “If anybody left before the ten-year note matured, or before ten years, he would lose

his . . . share in the company. He would lose everything. If he walked away, that was it.” Appellant

confirmed the existence of the ten-year agreement but testified it did not apply to him.

On June 21, 1991, appellant completed and submitted to the Texas Secretary of State

articles of incorporation naming himself, appellee, Kaguma, and Nganga as the initial board of

directors of Universal Auto Repair, Inc. The ownership interest was to be divided four ways, with

each person getting a 25 percent share, and each of the four owners’ interest included an ownership

–2– interest in the property. Appellee testified the business agreement was between himself, appellant,

Kaguma, and Nganga, but for tax reasons his sister Mary Mbogo, who lived in Miami, was named

on the warranty deed instead of appellee. From 1997 until 2014, Mary Mbogo was listed as a co-

tenant on the warranty deed for the property alongside appellant, Kaguma, and Nganga. On

December 23, 2014, she executed a general warranty deed transferring her interest to appellee.

The evidence at trial showed she was not a party to the original agreement, she claimed no

ownership interest in the property, and that she was a “stand in” for appellee and held title on his

behalf.

After Universal Auto Repair was up and running, the parties agreed that appellant,

appellee, Nganga, and Kaguma would each receive $350 a week in salary when funds were

available, and any money remaining was to be divided between them. Appellee testified that the

first few years of the business were “okay,” but the parties soon started fighting among themselves

because “[t]here was not enough money.” At times, after the business expenses were paid,

including the note for the property, there were not enough funds to pay everyone their salaries.

Kaguma testified that the agreed $350 salary was a “[h]uge pay cut” for him, and that “there were

times we went without.”

Sometime in 1994, Charles Kaguma decided to leave the business and relinquished his co-

ownership interest in the business and the property, telling the jury he felt he had no choice because

“[i]t became impossible for me to survive on $350 a week when it was available.” The following

year, in 1995, Martin Nganga also relinquished his interest. For the next two years, appellant and

appellee operated the business alone, with some assistance from non-mechanic “helpers.”

Appellee testified that it was difficult to operate the business without experienced mechanics to

help him and that he was working long hours, sometimes staying until 10:00 p.m. at night and

working seven days a week. To supplement the business’s income, appellant and appellee decided

–3– to purchase a tow truck in 1995.

In late May or early June of 1997, not long after securing a towing contract with AAA,

appellant quit Universal Auto Repair, closing the business’s checking account (after withdrawing

the funds on deposit) and starting his own towing business. Appellant also took the tow truck,

which he claimed he owned. Appellee continued paying the expenses for the property’s upkeep,

the mortgage payments, the tax assessments, and the insurance. Somewhere around a $95,909

principal balance remained on the property when appellant left the business.

In October of 1997, after a few months of operating Universal Auto Repair alone, appellee

formed a new, solely-owned, automotive repair business called Hinga’s Automotive. Along with

changing the store-front signage from Universal Auto Repair to “Hinga Auto Repair,” appellee

registered his company with the Texas Secretary of State as “Hinga’s Automotive;” changed the

business’s uniforms to Hinga’s Automotive from Universal Auto Repair; changed the locks; built

an extension on the back of the building; and otherwise exercised control over the property.

Appellee made these changes without appellant’s authorization or consent. Appellee also obtained

warranty deeds from Kaguma and Nganga in June of 1997 conveying their interest in the property

to appellee.

In August of 2001, appellee received notice that the property’s note was maturing. As he

had been doing since appellant’s departure from the business, appellee paid the remaining amounts

due under the note and received, in December of 2001, both the property’s deed and a release of

the lender’s lien.

After holding the property deed for almost fifteen years, appellee approached appellant

about getting his name removed from the deed.

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