Court of Appeals
Tenth Appellate District of Texas
10-24-00250-CV
Moore Family First Property Company, LLC, as General Partner to, Fain Family First Limited Partnership, Appellant
v.
Fain Property Company, LLC, Fain Family Management Corporation, Quail Ridge Management Corporation, Double Gun Hunting Lease, and Rickey M. Fain,
Appellees
On appeal from the
18th District Court of Somervell County, Texas Judge Sydney B. Hewlett, presiding Trial Court Cause No. C10851
JUSTICE HARRIS delivered the opinion of the Court.
MEMORANDUM OPINION
Appellant Moore Family First Property Company, LLC, [Moore Family First] as general partner to Fain Family First Limited Partnership appeals from the trial court’s final judgment in favor of Appellees Fain Property Company, LLC, Fain Family Management Corporation, Quail Ridge Management Corporation, Double Gun Hunting Lease, and Rickey M. Fain.
In three issues, Moore Family First argues that the trial court erred in granting Appellees’ motion for summary judgment and in denying Moore Family First’s motion for new trial. We affirm the trial court’s judgment.
Factual and Procedural Background Dr. Rickey Fain, a retired family doctor, is the father of Katherine Moore. In 1998, Dr. Fain formed the Fain Family First Limited Partnership [Limited Partnership] and deeded his assets to the Limited Partnership. At the formation of the Limited Partnership, Dr. Fain owned an 89% limited partner interest, and Katherine received a 10% limited partner interest. Appellee Fain Property Company, LLC [Fain Property] received a 1% general partner interest in the Limited Partnership. Dr. Fain is the sole member of Fain Property.
In 2012, Dr. Fain gifted his entire 89% limited partner interest to Katherine. Fain Property remained as the sole general partner of the Limited Partnership. Also in 2012, the Limited Partnership financed and built a home for Katherine and her family on the ranch owned by the Limited Partnership. Dr. Fain continued to manage the Limited Partnership, but Katherine and her husband participated in running the Limited Partnership under Dr. Fain’s mentorship.
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Dr. Fain does not receive compensation for his management of the Limited Partnership. He pays for his expenses using Appellee Quail Ridge Management Corporation’s [Quail Ridge] resources. Quail Ridge manages the rental property owned by the Limited Partnership. Dr. Fain made a loan to Quail Ridge, and he reduces the amount of the loan based upon the expenditures covered by Quail Ridge.
Dr. Fain and Katherine began having disagreements over management of the Limited Partnership. Katherine became concerned that Dr. Fain was pledging Limited Partnership assets as security for property that was not part of the Limited Partnership. On May 19, 2022, Katherine voted her limited partnership interest to remove Fain Property as general partner. Katherine formed Moore Family First, with her as the sole owner, and appointed Moore Family First as the general partner of the Limited Partnership. Katherine notified Dr. Fain and Fain Property of the removal of Fain Property as general partner, and she provided notification that the management agreements between the Limited Partnership and Quail Ridge were terminated.
Also on May 19, 2022, Moore Family First filed suit against the Appellees, seeking declaratory relief confirming Fain Property’s removal and Moore Family First’s appointment as general partner of the Limited
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Partnership. Moore Family First also sought injunctive relief to prevent Fain Property from interfering with Moore Family First’s partnership operations. Appellees answered and also filed a counterclaim against Moore Family First and added Katherine as a third-party defendant. Appellees’ suit included claims for fraud, breach of the Partnership Agreement, breach of fiduciary duty, and tortious interference with existing contracts. Appellees further sought a declaratory judgment to invalidate the removal of Fain Property and appointment of Moore Family First as general partner of the Limited Partnership and to invalidate the termination of the management agreements between the Limited Partnership and Quail Ridge.
On October 3, 2022, Appellees filed a motion for summary judgment on their breach of contract and declaratory judgment claims. After a hearing, the trial court granted Appellees’ motion for summary judgment on December 15, 2022. On February 22, 2023, Appellees filed a motion for partial summary judgment on the cancellation of the contracts between the Limited Partnership and Quail Ridge. The parties reached a Rule 11 Agreement that granted relief on the Quail Ridge contracts but provided that if Moore Family First successfully appealed the December 15, 2022, order granting summary judgment, the Quail Ridge ruling would automatically be reversed and be of no further force and effect. On June 9, 2023, the trial
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court signed an order granting the Appellees’ Partial Motion for Summary Judgment in accordance with the Rule 11 agreement.
The trial court signed a final judgment on June 3, 2024, declaring that the actions of Moore Family First and Katherine in attempting to remove Fain Property as general partner of the Limited Partnership were inconsistent and not authorized by the Partnership Agreement and that, as a result, Fain Property remains as the general partner of the Limited Partnership. The final judgment also declared that the actions of Moore Family First and Katherine in attempting to appoint Moore Family First as general partner of the Limited Partnership were inconsistent and not authorized by the Partnership Agreement and that, as a result, Moore Family First is not the general partner of the Limited Partnership. The trial court’s judgment further granted Appellees’ claims for declaratory relief relating to the Quail Ridge contracts. Moore Family First and Katherine filed a motion for new trial that was overruled by operation of law. This appeal ensued.
Issues One and Two
In the first and second issues, Moore Family First argues that the trial court erred by granting summary judgment in favor of Appellees.
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Standard of Review and Applicable Law “We review an order granting summary judgment de novo, taking as true all evidence favorable to the nonmovant and indulging every reasonable inference in the nonmovant’s favor.” JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021) (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)). “When reviewing a traditional motion for summary judgment, we must determine whether the movant met its burden to establish that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law.” James v. Young, No. 10-17- 00346-CV, 2018 WL 1631636, at *2 (Tex. App.—Waco Apr. 4, 2018, no pet.) (mem. op.) (citing TEX. R. CIV. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002)). Once the movant produces sufficient evidence to establish the right to summary judgment, the nonmovant must present evidence sufficient to raise a fact issue. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
The primary concern of a court in construing a contract is to ascertain and give effect to the parties’ intentions as expressed in the writing itself. El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805 (Tex.2012); Nat’l. Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). To discern the parties’ intent, we must
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examine and consider the entire writing in an effort to harmonize and give effect to all of the provisions of the contract so that none of the provisions will be rendered meaningless. El Paso Field Servs., 389 S.W.3d at 805. We are to look at the contract as a whole in light of the circumstances present when the contract was entered. Horseshoe Bay Resort, Ltd, v. CRVI CDP Portfolio, LLC, 415 S.W.3d 370, 376 (Tex. App.—Eastland 2013, no pet.). Removal of Fain Property In the first issue, Moore Family First contends that the trial court erred in determining that the Partnership Agreement did not authorize Katherine to remove Fain Property as general partner. The Partnership Agreement for the Limited Partnership provided for the removal of a general partner in Section 8.5. That section states:
Notwithstanding any provision herein to the contrary, a General Partner may not be removed unless there is one remaining General Partner. The Limited Partners may remove the General Partner upon the vote of 100% of the then outstanding ownership interest of the Limited Partners. Written notice of such determination setting forth the effective date of such removal shall be served upon the General Partner, and as of the effective date, shall terminate all of such Person’s rights and powers as General Partner hereunder, except for any accrued rights to receive payments authorized by Article XI. hereunder. Such Partner shall thereafter cease to be the General Partner, and the removed General Partner shall automatically become a Limited Partner, and such removed General Partner’s partnership interest shall be converted to a limited partnership interest. The remaining General Partners shall continue the business of the Partnership. Notwithstanding the foregoing, if a General Partner
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is in material breach of such General Partner’s obligations and does not cure, or commence and diligently prosecute the curing of, such breach within 90 days after notice thereof by any of the Limited Partners, or if he has committed any act or omission of fraud or malfeasance to the injury of the Partnership, then such General Partner may be removed upon agreement of 51% of the then outstanding ownership interest of the Limited Partners.
Moore Family First contends that Katherine properly followed Section 8.5 when she removed Fain Property as general partner. Appellees argue that Section 8.5 of the Partnership Agreement precluded Katherine’s removal of Fain Property as general partner because the first sentence states that “a General Partner may not be removed unless there is one remaining General Partner,” and it is undisputed that Fain Property was the sole general partner at the time of Katherine’s purported removal of Fain Property.
Moore Family First maintains that Section 8.5 provides for two different removal standards: (1) removal without cause, and (2) removal with cause. We agree. However, Moore Family First argues that the first sentence of Section 8.5 that states, “[n]otwithstanding any provision herein to the contrary, a General Partner may not be removed unless there is one remaining General Partner,” applies only to removal without cause. We disagree that the first sentence of Section 8.5 applies only to removal without cause.
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“Superordinating” language, signaled by notwithstanding, shows which provision prevails in the event of a clash but does not necessarily denote a clash of provisions. Horseshoe Bay Resort, 415 S.W.3d at 384. When parties use the clause “notwithstanding anything to the contrary contained herein” in a paragraph of their contract, they contemplate the possibility that other parts of their contract may conflict with that paragraph, and they agree that this paragraph must be given effect regardless of any contrary provisions of the contract. Helmerich & Payne Int’l Drilling Co. v. Swift Energy Co., 180 S.W.3d 635, 643 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Therefore, by using the language, “Notwithstanding any provision herein to the contrary, a General Partner may not be removed unless there is one remaining General Partner,” the parties intended that Section 8.5 be given effect in the event of a conflict with other provisions of the Partnership Agreement. See id.
Moore Family First contends that the requirement for a remaining general partner applies only to removal without cause. Section 8.5 provides that removal of a general partner without cause requires a vote of 100% the outstanding ownership interests of the limited partners. Upon removal without cause, the removed general partner shall automatically become a limited partner, and the remaining general partners shall continue the
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business of the Limited Partnership. Immediately following the process for removal without cause, Section 8.5 states “[n]otwithstanding the foregoing” and provides the process for removal with cause of a general partner.
Moore Family First argues that the phrase “[n]otwithstanding the foregoing” negates the requirement of a remaining general partner before removal with cause. The second “notwithstanding” phrase is followed by the process for removal with cause when the general partner is in material breach of the general partner’s obligations or if he has committed any act or omission of fraud or malfeasance to the injury of the Limited Partnership. Removal with cause requires an agreement of 51% of the then outstanding ownership interests of the limited partners. Reading Section 8.5 in its entirety, the second “[n]otwithstanding the foregoing” phrase is referring to the process for removal without cause provision. Section 8.5 requires 100% agreement of the limited partners to remove a general partner without cause, but “notwithstanding” the foregoing requirement of 100%, a general partner may be removed with cause by agreement of 51% of the limited partners. We conclude that the superordinating language requiring a remaining general partner before a general partner may be removed in the first sentence of Section 8.5 applies to both removal without cause and removal with cause. See id. Therefore, in order to remove Fain Property as general partner in
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accordance with the Partnership Agreement, a remaining general partner was required.
Moore Family First argues that Katherine complied with Section 8.5’s requirement of at least one remaining general partner because she appointed Moore Family First as general partner at the same time she voted her 100% limited partner interest to remove Fain Property as general partner. Section 7.2 of the Partnership Agreement applies to successor general partners. That section states that:
If a General Partner, serving alone, ceases to serve for any reason and there are no Designated Successor General Partners remaining, then without amendment to this Agreement, the remaining Limited Partners may continue the business of the Partnership, and may, by unanimous vote of the then outstanding ownership interest of the Limited Partners, excluding from such election any limited partnership interest controlled by the General Partner who brought about such withdrawal or cessation of service, appoint one or more new General Partners effective as of the date of withdrawal or cessation of service of the withdrawing Partner.
In order for Section 7.2 to be applicable, Fain Property would first have to be removed as general partner. As previously discussed, Fain Property could not be removed without a remaining general partner. Thus, Section 7.2 did not allow Katherine to appoint Moore Family First as general partner in order to satisfy the requirements of a remaining general partner under Section 8.5.
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Moore Family First also argues that an interpretation of Section 8.5 requiring a remaining general partner fails to harmonize other provisions of the Partnership Agreement and renders them meaningless. Article 11 of the Partnership Agreement provides for the dissolution and termination of the Limited Partnership. Section 11.1(b) provides that the Limited Partnership shall be immediately dissolved upon the withdrawal or removal of a general partner unless the Limited Partnership is continued pursuant to Article 11. Section 11.2 outlines how to prevent a dissolution under Section 11.1(b). Throughout the Partnership Agreement, it is contemplated that there could be more than one general partner. Nothing in Section 11.1(b) conflicts with the requirement of Section 8.5 that there must be a remaining general partner before removal. Section 11.1(b) recognizes that a general partner may be removed, in accordance with Section 8.5, but does not override the requirements of Section 8.5.
Moore Family First further argues that Appellees’ interpretation of Section 8.5 prevents a sole general partner from ever being removed for cause and renders the with cause removal process in Section 8.5 meaningless. As stated, the Partnership Agreement contemplates multiple general partners. Therefore, the with cause removal process would not be rendered meaningless in the event there were multiple general partners.
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Dr. Fain created the Limited Partnership to transfer wealth while minimizing estate tax liability. He intended to control the assets before passing them on to his family. The Partnership Agreement contemplates multiple general partners even though Fain Property was the sole general partner at the formation of the Limited Partnership. Considering the Partnership Agreement as a whole in light of the circumstances present when it was formed, we conclude that the superordinating language in the first sentence of Section 8.5 does not allow the removal of a general partner unless there is one remaining general partner. See Horseshoe Bay Resort, 415 S.W.3d at 376. Therefore, the Partnership Agreement did not authorize Katherine to remove Fain Property as general partner. We overrule the first issue. Appointment of Moore Family First as General Partner In the second issue, Moore Family First maintains that the trial court erred in determining that Katherine could not appoint Moore Family First as general partner. It argues that Katherine properly appointed Moore Family First as general partner pursuant to Section 7.2 of the Partnership Agreement.
As previously stated, Section 7.2 of the Partnership Agreement applies to successor general partners. That section states that the limited partners
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may appoint one or more new general partners when a general partner, serving alone, ceases to serve for any reason. In order for Section 7.2 to be applicable, Fain Property would have to be properly removed under Section 8.5 of the Partnership Agreement. Because the Partnership Agreement did not authorize Katherine to remove Fain Property as general partner, she could not utilize Section 7.2 to appoint Moore Family First as the successor general partner.
Section 10.3 provides that additional general partners shall not be admitted to the Limited Partnership without the consent of all partners. It is undisputed that Fain Property did not consent to the admission of Moore Family First as a general partner. Moore Family First argues that Fain Property’s consent was not required for Katherine to appoint Moore Family First as general partner citing, Great Sw. Reg’l Ctr., LLC v. ACSWD, LP as authority. No. 14-18-00689-CV, 2020 WL 20593, at *1 (Tex. App.—Houston [14th Dist.] Jan. 14, 2020, no pet.).
In that case, Great Southwest Regional Center, LLC organized ACSWD as a limited partnership to serve as the new commercial enterprise for a saltwater disposal project, with Great Southwest serving as ACSWD’s general partner. Id. The sole limited partner of ACSWD removed Great Southwest as ACSWD’s general partner and appointed a new general
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partner. Id. at *6. In Great Southwest, the partnership agreement provided that upon the removal of a general partner all remaining partners may agree in writing to continue the Partnership and appoint a new successor general partner. Id. at *7. Great Southwest argued that the partnership agreement required its consent as general partner to admit a new general partner. The court noted that the partnership agreement provided that “after the general partner’s removal, the remaining partners may agree to appoint a new general partner.” Id. at *8. The court held that after Great Southwest was removed as general partner, the remaining sole limited partner could appoint a successor general partner. Id.
Great Southwest is distinguishable from the case before us because the court determined that Great Southwest was removed as general partner. See id. In this case, Fain Property was not properly removed as the general partner. Great Southwest does not support the conclusion that Katherine was authorized to appoint Moore Family First as general partner without the consent of Fain Property in contravention of the requirements of the Partnership Agreement. See id.
We conclude that the Partnership Agreement did not authorize Katherine’s appointment of Moore Family First as general partner. We overrule the second issue.
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Issue Three
In the third issue, Moore Family First argues, in the alternative, that the trial court erred by denying its motion for new trial. Moore Family First states that the trial court limited its summary judgment, which forms the basis of the final judgment, to the sole issue of contract interpretation. Moore Family First contends that if the trial court’s judgment was based on any evidentiary issues, it abused its discretion by denying the motion for new trial. Having overruled Moore Family First’s first and second issues based solely on contract interpretation, we need not address the third issue. See Tex. R. App. P. 47.1.
Conclusion
We affirm the trial court’s judgment.
LEE HARRIS
Justice
OPINION DELIVERED and FILED: August 27, 2026 Before Chief Justice Johnson, Justice Smith, and Justice Harris Affirmed CV06