TIC Philly Landsdale 2, LLC v. Brett C. Moody, Individually and Dba or Alter Ego for Moody National Companies, Moody National, Moody National Realty Company, L.P., Moody Realty Corporation, Moody National Philly Lansdale S, LLC, Moody National Philly Lansdale H, LLC

CourtCourt of Appeals of Texas
DecidedJuly 30, 2024
Docket01-22-00610-CV
StatusPublished

This text of TIC Philly Landsdale 2, LLC v. Brett C. Moody, Individually and Dba or Alter Ego for Moody National Companies, Moody National, Moody National Realty Company, L.P., Moody Realty Corporation, Moody National Philly Lansdale S, LLC, Moody National Philly Lansdale H, LLC (TIC Philly Landsdale 2, LLC v. Brett C. Moody, Individually and Dba or Alter Ego for Moody National Companies, Moody National, Moody National Realty Company, L.P., Moody Realty Corporation, Moody National Philly Lansdale S, LLC, Moody National Philly Lansdale H, LLC) 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.

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TIC Philly Landsdale 2, LLC v. Brett C. Moody, Individually and Dba or Alter Ego for Moody National Companies, Moody National, Moody National Realty Company, L.P., Moody Realty Corporation, Moody National Philly Lansdale S, LLC, Moody National Philly Lansdale H, LLC, (Tex. Ct. App. 2024).

Opinion

Opinion issued July 30, 2024

In The

Court of Appeals For The

First District of Texas ——————————— NO. 01-22-00610-CV ——————————— TIC PHILLY LANSDALE 2, LLC, TIC PHILLY LANSDALE 3, LLC, TIC PHILLY LANSDALE 4, LLC, TIC PHILLY LANSDALE 5, LLC, TIC PHILLY LANSDALE 6, LLC, TIC PHILLY LANSDALE 7, LLC, TIC PHILLY LANSDALE 8, LLC, TIC PHILLY LANSDALE 9, LLC, TIC PHILLY LANSDALE 10, LLC, TIC PHILLY LANSDALE 11, LLC, TIC PHILLY LANSDALE 13, LLC, TIC PHILLY LANSDALE 14, LLC, TIC PHILLY LANSDALE 16, LLC, TIC PHILLY LANSDALE 18, LLC, TIC PHILLY LANSDALE 19, LLC, TIC PHILLY LANSDALE 20, LLC, TIC PHILLY LANSDALE 21, LLC, TIC PHILLY LANSDALE 23, LLC, TIC PHILLY LANSDALE 24, LLC, TIC PHILLY LANSDALE 25, LLC, TIC PHILLY LANSDALE 27, LLC, TIC PHILLY LANSDALE 29, LLC, TIC PHILLY LANSDALE 30, LLC, TIC PHILLY LANSDALE 31, LLC, TIC PHILLY LANSDALE 32, LLC, TIC PHILLY LANSDALE 33, LLC, AND WAYNE MAR D/B/A TIC PHILLY LANSDALE H, Appellants V. BRETT C. MOODY, MOODY NATIONAL HOSPITALITY PHILLY LANSDALE V, LLC, MOODY NATIONAL PHILLY LANSDALE S, LLC, AND MOODY NATIONAL PHILLY LANSDALE H, LLC, Appellees On Appeal from the 151st District Court Harris County, Texas Trial Court Case No. 2021-46723

MEMORANDUM OPINION

Appellants, TIC Philly Lansdale 2, LLC, TIC Philly Lansdale 3, LLC, TIC

Philly Lansdale 4, LLC, TIC Philly Lansdale 5, LLC, TIC Philly Lansdale 6, LLC,

TIC Philly Lansdale 7, LLC, TIC Philly Lansdale 8, LLC, TIC Philly Lansdale 9,

LLC, TIC Philly Lansdale 10, LLC, TIC Philly Lansdale 11, LLC, TIC Philly

Lansdale 13, LLC, TIC Philly Lansdale 14, LLC, TIC Philly Lansdale 16, LLC, TIC

Philly Lansdale 18, LLC, TIC Philly Lansdale 19, LLC, TIC Philly Lansdale 20,

LLC, TIC Philly Lansdale 21, LLC, TIC Philly Lansdale 23, LLC, TIC Philly

Lansdale 24, LLC, TIC Philly Lansdale 25, LLC, TIC Philly Lansdale 27, LLC, TIC

Philly Lansdale 29, LLC, TIC Philly Lansdale 30, LLC, TIC Philly Lansdale 31,

LLC, TIC Philly Lansdale 32, LLC, TIC Philly Lansdale 33, LLC, and Wayne Mar,

doing business as TIC Philly Lansdale H (collectively, the “investors”), challenge

the trial court’s final order dismissing their petition seeking to vacate, correct, and

modify an arbitration award entered in their arbitration proceeding against appellees,

Brett C. Moody (“Moody”) and Moody National Hospitality Philly Lansdale V,

LLC, Moody National Philly Lansdale S, LLC, and Moody National Philly Lansdale

2 H, LLC (collectively, the “entity appellees”). In five issues, the investors contend

that the trial court erred in granting the motions to dismiss of Moody and the entity

appellees.1

We affirm.

Background

Moody National Hospitality Philly Lansdale V, LLC operated a Homewood

Suites hotel on real property that it rented under a master lease in Lansdale,

Pennsylvania (the “property”). The property’s owners, which included the investors,

were parties to a tenants-in-common investment agreement, which was subject to

the master lease.

The master lease, among other things, contained a provision entitled “Binding

Arbitration, which provided:

Any controversy between the parties hereto arising out of or related to this [master lease] or the breach thereof or an investment in the tenant in common interests in the [property] shall be settled by arbitration in Harris County, Texas, unless otherwise agreed to by the parties thereto, in accordance with the rules of The American Arbitration Association, and judgment entered upon the award rendered may be enforced by appropriate judicial action. . . . The losing party shall bear any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorneys’ fees of both parties, any costs of producing witnesses and any other reasonable costs or expenses incurred by the losing party or the prevailing party or such costs shall be allocated by the arbitrator. . . .

1 See TEX. R. CIV. P. 91a. 3 Arbitration proceeding

In September 2017, the investors filed an arbitration proceeding against

Moody and other entities or purported entities (collectively, “respondents”). The

investors alleged that under the master lease, respondents were “obligated to pay

[the investors] a monthly base rent and additional rent,” an obligation that, according

to the investors, “was free of any defenses to non-payment.” (Emphasis omitted.)

The investors brought claims against the respondents for breach of contract,

alter ego liability, fraud in a real estate transaction, fraud in the inducement,

conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty,

and unjust enrichment. And they alleged that the respondents’ conduct caused them

collective damages of $9,632,260.00, “exclusive of penalties and interest.”

Ultimately, the arbitrator found that only three respondents—the entity

appellees—were signatories to the arbitration agreement, and it dismissed the

remaining respondents from the arbitration for lack of jurisdiction.

The arbitration hearing took place from March 23, 2021, through March 26,

2021. In the arbitration award, the arbitrator found that each investor, in addition to

being a party to an assignment of leases and rents, was a party to a mortgage that

“covered not just the physical property” but also the investors’ “interest and

ownership in all rent payments, proceeds, and awards from the [p]roperty.” The

investors had “assigned all rents to the [l]ender” in the mortgage. And the lender

4 had foreclosed on the collateral, “which included any current or future unpaid

[rent].” The arbitrator concluded that because the foreclosure had extinguished “any

right, title, or interest” that the investors had in the rent, they were not entitled to

recover on their claim for breach of contract based on the entity appellees’ failure to

pay them rent.

The arbitrator found that the investors were entitled to recover $193,296.00

from the entity appellees for the entity appellees’ breach of the terms of the master

lease that required them to hold reserves for payment of taxes, insurance, and

improvements. The arbitrator also found that the investors were entitled to recover

$40,000.00 from the entity appellees for their “misappropriat[ion], or fail[ure] to

transfer,” funds for a franchise transfer fee that they had agreed to pay. The arbitrator

rejected the investors’ remaining claims.

Based on those findings, the arbitrator awarded the investors total damages of

$233,296.00, $44,715.22 in pre-award interest, and $75,000.00 in attorney’s fees

and costs.

Trial court proceeding

In their amended petition to vacate, correct, or modify the arbitrator’s award,

the investors requested that the trial court vacate the arbitrator’s decision denying

them recovery for their breach-of-contract claim against the entity appellees for

failure to pay past due rent and additional rent under the master lease. The investors

5 also requested that the trial court “[v]acate or [m]odify the [a]rbitrator’s decision

dismissing” certain appellees for lack of jurisdiction and modify the award in other

respects. The investors attached to their petition all the documents filed in the

arbitration, as well as transcripts from the arbitration hearing.

Moody and the entity appellees filed motions to dismiss the investors’ claim

for vacatur of the arbitration award.2 In his motion, Moody asserted that as a

non-signatory to the arbitration agreement and a non-participant in the arbitration

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TIC Philly Landsdale 2, LLC v. Brett C. Moody, Individually and Dba or Alter Ego for Moody National Companies, Moody National, Moody National Realty Company, L.P., Moody Realty Corporation, Moody National Philly Lansdale S, LLC, Moody National Philly Lansdale H, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tic-philly-landsdale-2-llc-v-brett-c-moody-individually-and-dba-or-texapp-2024.