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Cause No. 2016-49450
HEMANT GAJARAWALA, Individually § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
DEVSJ CONCRETE, LLC, derivatively on behalf §
Of Texas Concrete Enterprise IV, LLC § HARRIS COUNTY, TEXAS
Intervenor Plaintiff §
§
vs. §
§
SOMAIAH KURRE §
§
Defendant. § 80th JUDICIAL DISTRICT
PLAINTIFF AND INTERVENOR PLAINTIFF S
RESPONSE IN OPPOSITION TO DEFENDANT SOMAIAH KURRE S MOTION FOR
JUDGMENT NOTWITHSTANDING THE VERDICT AND MOTION FOR NEW TRIAL
Plaintiff Hemant Gajarawala ( Gajarawala ),and Plaintiff Intervenor DEVSJ Concrete,
LLC ( DEVSJ ) submit this Response to Defendant Somaiah Kurre s ( Kurre or Defendant )
Motion for Judgment Notwithstanding the Verdict and Motion for New Trial (the Motion ), and
states as follows:
I. UMMARY OF THIS ESPONSE
Defendant s Motion fails for various reasons, the majority of which hinge on the
undeniable fact that the purported issues complained of were not preserved by Defendant at trial
and have therefore been waived. Notably, Defendant complains of the very questions he tendered
with his proposed jury charge and now seeks to have this Court grant him a judgment
notwithstanding the verdict ( JNOV ) or a new trial based upon the very questions he wanted
tendered to the jury. Such a request is ludicrous.
Moreover, even if Defendant had not failed to preserve error and even if he was not relying
upon his own proposed jury questions and instructions as the bases for his Motion, the JNOV fails
as a matter of law because there was substantial evidence to support the jury s finding as to each
question at issue.
Finally because there was no error by this Court Defendant s request for a new trial fails
as matter of law.
II. ACKGROUND
A jury verdict in this case was rendered n favor of Plaintiff and DEVSJ Concrete, LLC
DEVSJ and against Defendant Somaiah Kurre ( Defendant ) on February 23, 20 after 4
days of evidence was presented via various witnesses and trial exhibits tendered by the parties
The unanimous verdict was adopted by the Court. By their verdict, the jury found that:
Gajarawala and Kurre agreed that, if Gajarawala personally guaranteed two loans from
Allegiance Bank to Texas Concrete Enterprise, LLC ( Texas Concrete then Kurre
would work to ensure that the Kendleton Cement Plant (the Plant would be
operational and profitable in a timely manner the Oral Agreement
(B) Kurre failed to comply with the Oral Agreement that, if Gajarawala personally
guaranteed two loans from Allegiance Bank to Texas Concrete Enterprise, then Kurre
would work to ensure that the Plant would be operational and profitable in a timely
manner
Kurre s failure to comply with the Oral Agreement was not excused;
Kurre s breach of the Oral Agreement caused Gajarawala money damages totaling
$834,656.00;
(E) Kurre failed to comply with his fiduciary duty to Texas Concrete;
(F) Kurre s failure to comply with his fiduciary duty to Texas Concrete resulted in damages
to the company totaling $0.00
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Kurre failed to comply with the Company Agreement of Texas Concrete dated October
14, 2
Gajarawala failed to comply with the Company Agreement of Texas Concrete dated
October 14, 2014;
Kurre failed to comply with the Company Agreement of Texas Concrete dated October
14, 2014 first;
Kurre s failure to comply with the Company Agreement of Texas Concrete dated
October 14, 2014 was not excused;
Kurre s breach of the Company Agreement of Texas Concrete dated October 14, 2014
caused damages totaling $300,000.00
(L) Gajarawala failed to comply with his fiduciary duty to Texas Concrete;
Gajarawala failure to comply with his fiduciary duty to Texas Concrete resulted in
damages to the company totaling $0.00 and
Texas Concrete and Gajarawala did not fail to comply with the Memorandum of
Understanding for the mixer trucks dated June 25, 2015.
III. EGAL TANDARD
Rule 301 of the Texas Rules of Civil Procedure permits a trial court to render a judgment
notwithstanding the verdict ( JNOV ) if a directed verdict would have been proper or to
disregard any jury s finding on a question that has no support in the evidence. EX IV .
301. Courts have held that a JNOV is proper only when (1) there is no evidence to support one or
more of the jury findings on issues necessary to liability, or (2) a legal principle precludes recovery.
Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); ohn Masek Corp. v. Davis, 848 S.W.2d 170,
173 (Tex. App. Houston [1st Dist.] 1992, writ denied).
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A trial court may disregard a jury's finding and grant a motion for judgment
notwithstanding the verdict only when there is no evidence to support the jury's finding. EX
IV Komet v. Graves, 40 S.W.3d 596, 603 (Tex. App. San Antonio 2001, no pet.).
Challenges to a trial court's ruling on a motion for JNOV are reviewed under the same legal
sufficiency test applied to appellate no evidence challenges. City of Keller v. Wilson, 168 S.W.3d
802, 822 23, 827 (Tex. 2005). Under that standard, the court considers the evidence in the light
most favorable to the verdict and indulge every reasonable inference that would support it. Id. at
822. The court credits favorable evidence if reasonable jurors could, and disregards contrary
evidence unless reasonable jurors could not. Id. at 827. More than a scintilla of evidence exists
when the evidence rises to a level that would enable reasonable and fair minded people to differ
in their conclusions. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994). Both direct and
circumstantial evidence may be used to establish any material fact. Lozano v. Lozano 52 S.W.3d
141, 149 (Tex. 2001); Browning Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex. 1993). A jury's
verdict or finding may be based on inferences that are fairly drawn from the facts in evidence.
Briones v. Levine's Dep't Store, Inc., 446 S.W.2d 7, 10 (Tex. 1969).
IV. HE OURT HOULD ENY URRE OTION
Consideration Exists for the Oral Agreement Between Kurre and Gajarawala
First, Kurre complains of an issue he did not deal with (1) in his proposed Charge of the
Court, (2) during trial, (3) during any argument to the Court or the jury, (3) during the jury charge
conference or (4) during closing arguments. Without question this issue has not been preserved.
Moreover, Kurre misstates the question posed and the agreement made by Kurre. The jury
did not find that Kurre promised to ensure that the Plant would be operational and profitable. The
jury found that Kurre promised to WORK to ensure that the Plant would be operational and
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profitable. The operative word being work .
However, even if itwas, the argument fails. Consideration consists of a benefit to the
promisor or a detriment to the promisee. Angelou v. African Overseas Union, 33 S.W.3d 269, 280
(Tex. App. Houston [14th Dist.] 2000, no pet.). It may consist of a benefit that accrues to one
party, or, alternatively, a responsibility that is undertaken by the other party. Id.
Defendant s repeated attempts to baldly state there was no contract between the parties
is contrary to the jury s findings of facts, the evidence, and testimony of the case. Significant
evidence and testimony exists to establish that the parties in fact agreed hat, if Gajarawala
personally guaranteed two loans from Allegiance Bank to Texas Concrete, then Kurre would work
to ensure that the Plant would be operational and profitable in a timely manner.
Significant evidence and testimony exists to establish that the parties in fact agreed that, if
Mr. Gajarawala personally guaranteed two loans from Allegiance Bank to Texas Concrete
Enterprise, then Mr. Kurre would work to ensure that the Plant would be operational and profitable
in a timely manner.
In fact, the Court need not look any further than Defendant s own testimony. Kurre
testified that he agreed that it was his duty to get the lant up and running and profitable
in a timely manner and that he entered into that agreement with Mr. Gajarawala.
Gajarawala s personal guarantee is sufficient and valid consideration because he
assumed a debt he would otherwise not have had to in exchange for a promise of
Kurre. This provided a benefit to Kurre as Gajarawala would become responsible
for the two loan . On the other hand, Kurre s own testimony showed that he
provided due consideration when he accepted a duty to work to ensure the Plant
would be operational and profitable in a timely manner. Gajarawala Personal
Guarantee for Repayment of the Two Loans is Valid Consideration
Generally, a personal guarantee for repayment of a loan is valid consideration. See Gulf
Liquid Fertilizer Co. v. Titus, 354 S.W.2d 378, 385 (Tex. 1962) (noting, in a bilateral contract, the
promise to extend credit or repay a debt is sufficient consideration); Womack v. Ballard Sales Co.,
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S.W.2d 956, 957 (Tex. App. Houston [1st Dist.] 1967, no writ) (holding valid consideration
existed in an oral contract where one business owner personally guaranteed the repayment of a
loan for his business and the other party agreed to forward merchandise); Neeley v. Intercity
Management Corp., 623 S.W.2d 942, 953 (Tex. App. Houston [1st Dist.] 1981, no writ).
In fact, most guaranties are executed before the contracting parties are bound; they are
part of the consideration that makes the deal happen. Veldekens v. GE HFS Holdings, Inc.,
CIV WL at S.D Tex Aug (Rosenthal, J.). Thus,
the personal guarantee made by Gajarawala to repay the loans with Allegiance ank were valid
consideration and binding on all parties. See generally Bank of Garvin v. Freeman, 181 S.W. 187,
191 (Tex. 1915) ( [O]ne person for a valuable consideration may assume as his own debt the debt
of another. ).
(a) Defendant Fails to Show a Personal Guarantee is Not Valid Consideration as a
Matter of Law
Defendant argues that the personal guarantee was an existing requirement for a commercial
loan, and thus claims that the legally correct decision is that the personal guarantee cannot be
consideration for any agreement between the parties. Defendant cites to no case law to support
his argument as a matter of law and has wholly failed to establish that some principle of law
precludes judgment on this element. In reality, as discussed above, personal guarantees are often
treated as consideration in a contractual agreement. Defendant s Motion on legal insufficiency
should thus be denied.
Defendant s Motion, p. 8.
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(b) Gajarawala s Testimony Presents Sufficient Factual Evidence to Support the
Jury s Verdict
Further, Defendant ignores the sufficient factual evidence showing Gajarawala s personal
guarantee was consideration for the Oral Agreement. For example, Gajarawala testified that he
would not have agreed to have the company borrow money from Allegiance Bank and personally
guarantee the loans if Kurre had not promised to to get the Plant up and running and
profitable in a timely manner and enter an agreement as discussed. Gajarawala s testimony
establishes more than a scintilla of the evidence concerning his intent and consideration for
entering into the ral greement with Kurre.
Even if contrary evidence existed, all evidence is considered in the light most favorable to
the verdict and indulges every reasonable inference. City of Keller v. Wilson, 168 S.W.3d at 822.
Here, based on Gajarawala s testimony the jury could have easily determined that
Gajarawala would never have agreed to borrow money at all but for Kurre s promise and the
jury was free to disregard any contrary evidence. Simply, the record is replete with evidence of
an oral agreement and the jury agreed unanimously with Gajarawala that the Oral Agreement, and
valid consideration, existed.
(c) Kurre Received the Benefit of the Oral Agreement s Consideration
Defendant also argues that Gajarawala s personal guarantee is not valid consideration
because the guarantee was made for the benefit of Texas Concrete and not Kurre directly. This
argument fails on several fronts.
First, Gajarawala s personal guarantee meant that Kurre was not entirely personally
responsible should Texas Concrete default on the loan , providing Kurre a direct benefit for not
having to shoulder full responsibility of the loans upon default. Second, it has long been Texas
law that a shareholder or owner of a company receives substantial benefit and good consideration
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for a personal guarantee of the company debt. Dyer Wortham v. Lake Jackson State Bank, 435
S.W.2d 612, 613 (Tex. Civ. App. Houston [14th Dist.] 1968, writ ref d n.r.e) (finding ample
consideration directly benefiting an individual existed for an extension and renewed guarantee of
a corporate loan when the individual owns at least 50% of the corporate entity) (citing Motor &
Industrial Finance Corp. v. , 302 S.W.2d 386 (Tex. 1957) Where the maker or makers
of notes, as here, are stockholders in the payee, the maker's promise is supported by legal
consideration. It matters not that the enhancement in benefits is one to be anticipated. The
continuation of the corporation by feeding it new assets gives rise to the hope or chance that the
welfare of the maker stockholders will be materially benefited by improving the assets of the
corporation and thereby increasing the value of the maker's individual stock certificates.
s a 65% shareholder in Texas Concrete, Kurre received a personal benefit when
Gajarawala personally guaranteed the loan , because Kurre interest in the company was worth
more without the additional debts on the business, increasing Kurre s financial worth and potential
future value. See id.; see also Dyer v. A I Automotive, Inc. 743 S.W.2d 685, 686 87 (Tex. App.
El Paso 1987, no writ). Accordingly, Gajarawala personal guarantee is sufficient consideration
for the ral greement and Defendant s Motion should be denied.
Kurre s Promise Work Was Not Illusory because He Admits That He Did
Work
The jury question at issue was carefully and specifically drafted by Plaintiff to emphasize
Defendant s agreement to work to ensure as opposed as to ensure as proposed by Defendant s
in his proposed jury questions. Had Defendant s proposed question been utilized, he might have
an argument. Stated simply this illusory argument is baseless.
hether a particular matter constitutes adequate consideration is a question of law for the
court. Williams v. Hill, S.W.2d 911, 913 (Tex. Civ. App. Dallas 1965, no writ). However,
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he court may base its determination on whether there is adequate consideration based on facts
found by the jury. Houston Med. Testing Servs. v. Mintzer, 417 S.W.3d 691, 695 96 (Tex. App
Houston [14th Dist.] 2013, no pet.). There must be a contemporaneous exchange of consideration
between the parties at the time the otherwise enforceable agreement is executed for the promise
not to be illusory. TMC Worldwide, L.P. v. Gray, 178 S.W.3d 29, 37 (Tex. App. Houston [1st
Dist.] 2005, no pet.).
Regardless of the level of specificity provided for in a contract,
where the evidence shows that the parties intended to enter into
an agreement, the courts should find the contract definite
h to grant a remedy provided there is a certain basis for
determin the remedy.
America s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 623 (Tex. App.
San Antonio 1996, no writ) (emphasis added)
Based on the jury finding , it was clearly the intent of both parties to enter into the Oral
Agreement and there was clearly a contemporaneous exchange of consideration.
Plaintiff would sign a personal guarantee and Defendant would to ensure that the
Plant was operational and profitable in a timely manner.
The jury found that the evidence demonstrated Kurre and Gajarawala entered into a
mutually beneficial agreement On one side of the bargain, Gajarawala was personally
guaranteeing the two loans from Allegiance Bank to Texas Concrete. This was not an optional
agreement and Gajarawala was bound to repay the loans as bargained for in the ral greement.
For example, more certainty is necessary in an action for specific performance than is necessary in an
action for damages. Pace Corp. v. Jackson, 284 S.W.2d at 345; Tenneco, 917 S.W.2d at 830.
See HARGE OF THE OURT at 4 7.
Id
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On the other hand, in exchange for Gajarawala s guarantee, Kurre was bound by his
agreement to work to ensure that the Plant was operational and profitable in a timely manner.
Notably Kurre purports to allege that his agreement was illusory because there is no clarity
as to operational and profitable, etc.
Kurre wholly misses the operative action of his agreement. As the jury questions
specifically lay out: Kurre agreed to ensure that the Plant was operational and profitable.
As the Court will recall, about five ( minutes into Kurre s cross examination testimony,
he was impeached with his deposit on testimony establishing, unequivocally, that Kurre did not
provide any work or capital to the Plant since the day the lawsuit was filed. Without question the
jury, after catching Kurre in his lie fiv (5) minutes into his examination, found that he failed to
fulfill his clear agreement to work to ensure that the plant was operational and profitable because
he admitted that he did not work.
Moreover, Kurre s arguments of illusory promises cite to no support in the law or the
evidence. Here, the jury and this Court can (and did) determine potential remedies for Kurre s
failure to work to ensure that the plant was operational and profitable in a timely manner
including, but not limited to, the promised lost profits from the operational Plant, the loans taken
by the company, the loans made by Plaintiffs to the company, and the lost profits the members of
the company
Because the jury found the parties intended to be bound by an agreement, and the Court
can discern a remedy based on the promises, Defendant allegations of illusory promises are
without merit as a matter of law and Defendant s otion should be denied.
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B. Texas Law Expressly Permitted this Court to Treat the Breach of Company
Claim and Award of $300,000 as a Direct Claim Brought on Gajarawala s
Behalf
The following is not in dispute:
DEVSJ Concrete, LLC is a closely held limited liability company under Texas law.
Texas Concrete Enterprise IV, LLC is a closely held limited liability company
under Texas law.
DEVSJ is a 35% owner and a member of Texas Concrete
DEVSJ brought its derivative action on behalf of Texas Concrete.
Gajarawala is the sole owner and member of DEVSJ.
Moreover, based on the evidence presented, the jury found that (1) the Company
Agreement was an enforceable contract, (2) Kurre breached the Company Agreement, and (3)
Kurre breach was not excused. The charge then asked the jury to determine
What sum of money, if any, if paid in cash, would fairly and
reasonable compensate Gajarawala for his damages, if any, that
10
resulted from the breach of the Company Agreement.
11
The jury responded with a total of $300,000.00. In the Court s Final Judgment, the Court
awarded the $300,000 to DEVSJ for Kurre s breach of the Company Agreement.
See US RG ODE NN § 101.463.
Id
Defendant never challenged DEVSJ or Gajarawala s ability to sue in this capacity in a verified pleading,
and has therefore waived any right to complain about the capacity DEVSJ or Gajarawala was sued. Texas
Rule of Civil Procedure 93(2). When capacity is contested, Rule 93(2) requires that a verified plea be filed
anytime the record does not affirmatively demonstrate the plaintiff's or defendant's right to bring suit or be
sued in whatever capacity he is suing. Pledger v. Schoellkopf, 762 S.W.2d 145 (Tex. 1988) (per curiam)
(citing TEX. R. CIV. P. 93(2)).
Defendant s motion admits as much on page 2: Plaintiff Hemant Gajarawala, is the sole managing partner of
DEVSJ
Verdict, Questions 11, 13, and 14.
10
Verdict, Question 15.
11
Id.
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Notably any purported error related to this question, was again not preserved by
Defendant. In fact Defendant tendered a damages question related to this question seeking to have
damages awarded to Texas Concrete.
Moreover, Plaintiff tendered the proper question seeking damages for DEVSJ and at
Defendant s counsel s request the damages question and all other questions related to DEVSJ
were changed, by agreement to Plaintiff because Plaintiff was the sole owner of DEVSJ and the
real person . Plaintiff s counsel s reasoning for such a change was because he did not want to
confuse the jury.
That said, the law supports the Court s entry of judgment on this matter as it did,
irrespective of the fact that DEVSJ was not listed in the damages question for breach of the
company agreement.
Defendant seeks to make an issue out of this award because, as Defendant claims, Question
16 did not identify Interveno DEVSJ and any award of damages was wrongly attributed to
Plaintiff Gajarawala.
Defendant s argument is based entirely on the fact that the juror charge states ajarawala
instead of DEVSJ in Question 1 . The facts, and Texas law, dictate otherwise.
Specifically, Texas law explicitly states:
(c) If justice requires
(1) a derivative proceeding brought by a member of a closely held
limited liability company may be treated by a court as a direct
action brought by the member for the member s own benefit;
and
(2) a recovery in a direct or derivative proceeding by a member may
be paid directly to the plaintiff or to the limited liability company
if necessary to protect the interests of creditors or other members
of the limited liability company.
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EX RG ODE § 101.463(c) (emphasis added) 12 In other words, a court may elect to
treat a derivative claim (like Interveno claim) as a direct action brought by the member for their
own benefit (DEVSJ, which is fully owned by Gajarawala . This direct action can either be treated
as a direct claim brought by either the named member, such as DEVSJ or the named member s
owner, such as Gajarawala 13 Ritchie, 443 S.W.3d at 880 (citing EX RG ODE
); see also Saden v. Smith, 415 S.W.3d 450, 463 64 (Tex. App. Houston [1st
Dist.] , pet. denied trial court was authorized to treat the derivative claims as individual
claims ).
herefore, in addition to Kurre and his counsel s insistence on having Gajarawala named
as the recipient of the damages award, this Court was authorized to treat the breach of the Company
Agreement as Gajarawala s direct claim brought on his individual behalf, and thus appropriately
identified Gajarawala on Question 1 despite the recovery being assigned to DEVSJ in the Court s
nal Judgment.
The Breach of the Company Agreement Claim Always Remained s
Derivative Action
A trial court's decision to treat an action as a direct action under § 21.563(c) ... does not
mean that the action is no longer a derivative proceeding. Swank v. Cunningham 258 S.W.3d
647, 665 (Tex. App. Eastland 2008, pet. denied). Thus, even though the Court elected to treat
12
Texas law applies the same qualifications for closely held status to both corporations and
LLCs. Compare US RGS ODE NN 463 (defining closely held LLC as LLC with fewer
than 35 members that has no membership interests listed on national securities exchange or regularly quoted
in over the counter market), with id. § 21.563 (defining closely held corporation as corporation with fewer
than 35 shareholders that has no shares listed on national securities exchange or regularly quoted in over
the counter market). Case law and opinions concerning closely held corporations on this issue is equally
applicable to closely held LLCs, and vice versa.
13
Under the Double Derivative Concept adopted the Texas Supreme Court, Gajarawala, as the member
and owner of DEVSJ, is interchangeable with DEVSJ for purposes of the derivative claim because both
DEVSJ and Gajarawala have standing to bring a derivative claim for the breach of the Company Agreement.
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DEVSJ s derivative claims as a direct claim of Gajarawala on the jury charge and verdict form,
the breach of contract for the Company Agreement never stopped being s derivative
In Saden v. Smith, the Court rejected the exact same argument made by Defendant here.
415 S.W.3d at . he Houston Court of Appeals held that it is appropriate for an individual
to be identified on the jury charge as if it were the individual s direct claim, even if the action itself
derivative and belong to a corporate entity. Id
Specifically, at the charge conference, Saden argued that Smith should not be included on
the jury charge individually because Smith could not recover for breach of fiduciary duty because
there was no evidence of any fiduciary relationship whatsoever between Saden and Smith the
fiduciary relationship existed only between Saden and the corporate entity. Id.
The court rejected this argument because § 101.463(c) allows the trial court to treat the
derivative claim as Smith s direct claim and include Smith on the charge as the plaintiff seeking
to recover damages. See id.
ust as in , Defendant argues that because Gajarawala is not a member of Texas
Concrete it has no standing or right to recover for a claim for Kurre s violation of the Company
Agreement and should not be identified on Question 1 This argument was soundly rejected in
.
In reality, Texas law explicitly permits this Court to treat the claim as Gajarawala s direct
claim in the jury charge instead of either DVESJ or Texas Concrete all while the derivative claim
and recovery remained the property of Texas Concrete and its member DVESJ. Thus, as in ,
the jury charge appropriately identified Gajarawala.
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Damages from Kurre s Breach of Company Agreement Belong to Texas
Concrete s Non Breaching Members
Finally, because Kurre s breach of the Company Agreement is a derivative action, the
injury suffered actually belongs to Texas Concrete s members namely Kurre and DEVSJ.
However, considering that DEVSJ was the only non breaching member and was injured by
Kurre s wrongful conduct (while Kurre himself, as the only other member, benefited from the
wrongful conduct), § 101.463(c)(2) explicitly allows the Court to dictate that the payment and
recovery for Texas Concrete s injury be paid directly to DEVSJ, as it did in the Final Judgment.
415 S.W.3d at 463. Thus, the Court s Final Judgment appropriately rendered a verdict
based on the findings of the jury: a valid enforceable Company Agreement exists, Kurre breached
the Company Agreement, Kurre s breach was not excused, and that the jury s award of $300,000
for the claim was given to the appropriate entity DEVSJ as the non breaching member of Texas
Concrete though awarded directly to its sole managing member, Plaintiff, as just requires per the
aforementioned applicable law.
The Jury s Verdict and Award are Factually Sufficient and Not Excessive
A court utilizes the same test for determining excessive damages as for any factual
sufficiency question. Pope v. Moore, 711 S.W.2d 622, 624 (Tex. ; Rose v. Doctors
Hosp., 801 S.W.2d 841, 847 48 (Tex. 1990) (the standard of review for an excessive damages
complaint is factual sufficiency of the evidence.).
When considering a factual sufficiency challenge to a jury's verdict, courts must consider
and weigh all of the evidence, not just that evidence which supports the verdict. Ortiz v. Jones,
917 S.W.2d 770, 772 (Tex. 1996).
To analyze a factual sufficiency challenge, we must consider and weigh all of
the evidence and may set aside a verdict only if the evidence is so weak or ifthe finding is
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so against the great weight and preponderance of the evidence that it is clearly wrong and
unjust. Dow Chem. Co. v. Francis 46 S.W.3d 237, 241 (Tex. 2001) see Al Turki v. Taher, 958
S.W.2d 258, 261 & n.2 (Tex. App. Eastland 1997, pet. denied).
A reviewing court will reverse the trial court only if the evidence which supports the jury's
finding is so weak as to be clearly wrong and manifestly unjust. Id. (citing Cain v. Bain,
S.W.2d 175, 176 (Tex. 1986)); see also Dyson v. Olin Corp., 692 S.W.2d 456, 457 (Tex. 1985).
Defendant argues that there is insufficient factual evidence to support the $834,646 damage
award to Plaintiff, that this damage award to Plaintiff was excessive, the $300,000 damage award
in favor of Intervenor, and that the jury s finding that Kurre failed to comply with the Company
greement first.
In reality, the record in this case show there is legally and factually sufficient evidence to
support the jury s findings.
First, with respect to Defendant s bald claim that there is no evidence of damages resulting
from Defendant s breach of the Oral Agreement, Defendant ignores the evidence and testimony.
More specifically Defendant ignores numerous exhibits that were pre admitted by his agreement
in this case.14 There are various records pre admitted by Defendant that identify the moneys spent
by Gajarawala as a direct result of Kurre s breach of the agreement and such exhibits constitute
much more than a scintilla of evidence. The jury had ample opportunity to review those pre
admitted exhibits and to surmise that those financial documents, credit card statements, bank
account records, copies of checks , summary sheets, testimony, and the like established a damage
amount the directly related to Kurre s breach of the agreement. Furthermore, there is significant
14
See e.g., Defendant s Exhibits 7, 19, 28, 35, 38, 59, 97, 111, and Plaintiff and Intervenor Plaintiff
Exhibits 5, 10, 13, 14, 15, 17, 18, 20, 23, 24, 25, 26, 27, 30, 33, 34. In addition to the aforementioned,
approximately 200 additional exhibits were pre admitted and considered by the jury during deliberations.
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evidence for the jury to determine that the only reason that the Allegiance Bank loans were not
called on was because Gajarawala loaned the company in excess of $1.7 million dollars and
otherwise spent a lot of money to try to mitigate the losses caused by Defendant s breach of the
agreement. This is both an injury and proof of monetary damages that was not in any way
excessive.
Second, with respect to Defendant s claim that there is no evidence of damages resulting
from Defendant s breach of the Company Agreement, Defendant again ignores the evidence and
testimony of this case. In addition to the pre admitted exhibits showing financial records, the jury
heard evidence of the expected profits that were lost as a result of Kurre s breach of the Company
Agreement.
Finally, one does not have to look father than Defendant s own testimony for evidence that
Kurre failed to comply with the Company Agreement first. Specifically, Kurre admitted that he
willingly and intentionally quit providing capital or work for the company and that he did nothing
to get the Plant operational and profitable.
Therefore, after viewing the entire record and the evidence in support of and against
Kurre breach of the Company Agreement and Oral Agreement and damages thereto, there is
more than enough evidence to demonstrate that the jury's determination was supported by
sufficient evidence. Accordingly, the Court should deny Defendant s Motion.
The Court Properly Entered Its Declaratory Judgment
Under the declaratory judgment act, a court has the power to declare rights, status, and
other legal relations whether or not further relief is or could be claimed. EX IV RAC EM
ODE § 37.003
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A contract may be construed either before or after there has been a breach. Id. §
37.004(b). When a corporate bylaws or company agreement is unambiguous it may be interpreted
as a matter of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). The entry of a
declaratory judgment rests within the sound discretion of the trial court. Bonham State Bank v.
Beadle, 907 S.W.2d 465, 468 (Tex.1995); Crawford v. City of Houston, 600 S.W.2d 891, 894
(Tex. App. Houston [1st Dist.] 1980, writ ref'd n.r.e.).
Ultimately, Defendant s complaints as to the interpretation of the Company Agreement
should fall on deaf ears. 15 There can be no dispute, the Court was well within its authority to
interpret the unambiguous Company Agreement as a matter of law with the verdict of the jury as
a backdrop.
Specifically, the jury found that Kurre breached his fiduciary duty and violated the
Company Agreement, with the latter resulting in damage to Texas Concrete in the amount of
$300,000.16 As detailed above, the breach of the fiduciary duty and Company Agreement claims
brought by Intervenor DEVJS were derivative claims brought against Kurre on behalf of Texas
Concrete. In other words, the jury absolutely found that Kurre violated both his fiduciary duty and
the Company Agreement and caused damage to Texas Concrete.
15
Defendant s issues raised as to whether Gajarawala has standing or capacity to bring a declaratory
judgment have been well briefed throughout this Response and the concept of derivative actions.
Preview
Cause No. 2016-49450 HEMANT GAJARAWALA, Individually § IN THE DISTRICT COURT OF § Plaintiff, § § DEVSJ CONCRETE, LLC, derivatively on behalf § Of Texas Concrete Enterprise IV, LLC § HARRIS COUNTY, TEXAS Intervenor Plaintiff § § vs. § § SOMAIAH KURRE § § Defendant. § 80th JUDICIAL DISTRICT PLAINTIFF AND INTERVENOR PLAINTIFF S RESPONSE IN OPPOSITION TO DEFENDANT SOMAIAH KURRE S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT AND MOTION FOR NEW TRIAL Plaintiff Hemant Gajarawala ( Gajarawala ),and Plaintiff Intervenor DEVSJ Concrete, LLC ( DEVSJ ) submit this Response to Defendant Somaiah Kurre s ( Kurre or Defendant ) Motion for Judgment Notwithstanding the Verdict and Motion for New Trial (the Motion ), and states as follows: I. UMMARY OF THIS ESPONSE Defendant s Motion fails for various reasons, the majority of which hinge on the undeniable fact that the purported issues complained of were not preserved by Defendant at trial and have therefore been waived. Notably, Defendant complains of the very questions he tendered with his proposed jury charge and now seeks to have this Court grant him a judgment notwithstanding the verdict ( JNOV ) or a new trial based upon the very questions he wanted tendered to the jury. Such a request is ludicrous. Moreover, even if Defendant had not failed to preserve error and even if he was not relying upon his own proposed jury questions and instructions as the bases for his Motion, the JNOV fails as a matter of law because there was substantial evidence to support the jury s finding as to each question at issue. Finally because there was no error by this Court Defendant s request for a new trial fails as matter of law. II. ACKGROUND A jury verdict in this case was rendered n favor of Plaintiff and DEVSJ Concrete, LLC DEVSJ and against Defendant Somaiah Kurre ( Defendant ) on February 23, 20 after 4 days of evidence was presented via various witnesses and trial exhibits tendered by the parties The unanimous verdict was adopted by the Court. By their verdict, the jury found that: Gajarawala and Kurre agreed that, if Gajarawala personally guaranteed two loans from Allegiance Bank to Texas Concrete Enterprise, LLC ( Texas Concrete then Kurre would work to ensure that the Kendleton Cement Plant (the Plant would be operational and profitable in a timely manner the Oral Agreement (B) Kurre failed to comply with the Oral Agreement that, if Gajarawala personally guaranteed two loans from Allegiance Bank to Texas Concrete Enterprise, then Kurre would work to ensure that the Plant would be operational and profitable in a timely manner Kurre s failure to comply with the Oral Agreement was not excused; Kurre s breach of the Oral Agreement caused Gajarawala money damages totaling $834,656.00; (E) Kurre failed to comply with his fiduciary duty to Texas Concrete; (F) Kurre s failure to comply with his fiduciary duty to Texas Concrete resulted in damages to the company totaling $0.00 Page of Kurre failed to comply with the Company Agreement of Texas Concrete dated October 14, 2 Gajarawala failed to comply with the Company Agreement of Texas Concrete dated October 14, 2014; Kurre failed to comply with the Company Agreement of Texas Concrete dated October 14, 2014 first; Kurre s failure to comply with the Company Agreement of Texas Concrete dated October 14, 2014 was not excused; Kurre s breach of the Company Agreement of Texas Concrete dated October 14, 2014 caused damages totaling $300,000.00 (L) Gajarawala failed to comply with his fiduciary duty to Texas Concrete; Gajarawala failure to comply with his fiduciary duty to Texas Concrete resulted in damages to the company totaling $0.00 and Texas Concrete and Gajarawala did not fail to comply with the Memorandum of Understanding for the mixer trucks dated June 25, 2015. III. EGAL TANDARD Rule 301 of the Texas Rules of Civil Procedure permits a trial court to render a judgment notwithstanding the verdict ( JNOV ) if a directed verdict would have been proper or to disregard any jury s finding on a question that has no support in the evidence. EX IV . 301. Courts have held that a JNOV is proper only when (1) there is no evidence to support one or more of the jury findings on issues necessary to liability, or (2) a legal principle precludes recovery. Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); ohn Masek Corp. v. Davis, 848 S.W.2d 170, 173 (Tex. App. Houston [1st Dist.] 1992, writ denied). Page of A trial court may disregard a jury's finding and grant a motion for judgment notwithstanding the verdict only when there is no evidence to support the jury's finding. EX IV Komet v. Graves, 40 S.W.3d 596, 603 (Tex. App. San Antonio 2001, no pet.). Challenges to a trial court's ruling on a motion for JNOV are reviewed under the same legal sufficiency test applied to appellate no evidence challenges. City of Keller v. Wilson, 168 S.W.3d 802, 822 23, 827 (Tex. 2005). Under that standard, the court considers the evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it. Id. at 822. The court credits favorable evidence if reasonable jurors could, and disregards contrary evidence unless reasonable jurors could not. Id. at 827. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair minded people to differ in their conclusions. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994). Both direct and circumstantial evidence may be used to establish any material fact. Lozano v. Lozano 52 S.W.3d 141, 149 (Tex. 2001); Browning Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex. 1993). A jury's verdict or finding may be based on inferences that are fairly drawn from the facts in evidence. Briones v. Levine's Dep't Store, Inc., 446 S.W.2d 7, 10 (Tex. 1969). IV. HE OURT HOULD ENY URRE OTION Consideration Exists for the Oral Agreement Between Kurre and Gajarawala First, Kurre complains of an issue he did not deal with (1) in his proposed Charge of the Court, (2) during trial, (3) during any argument to the Court or the jury, (3) during the jury charge conference or (4) during closing arguments. Without question this issue has not been preserved. Moreover, Kurre misstates the question posed and the agreement made by Kurre. The jury did not find that Kurre promised to ensure that the Plant would be operational and profitable. The jury found that Kurre promised to WORK to ensure that the Plant would be operational and Page of profitable. The operative word being work . However, even if itwas, the argument fails. Consideration consists of a benefit to the promisor or a detriment to the promisee. Angelou v. African Overseas Union, 33 S.W.3d 269, 280 (Tex. App. Houston [14th Dist.] 2000, no pet.). It may consist of a benefit that accrues to one party, or, alternatively, a responsibility that is undertaken by the other party. Id. Defendant s repeated attempts to baldly state there was no contract between the parties is contrary to the jury s findings of facts, the evidence, and testimony of the case. Significant evidence and testimony exists to establish that the parties in fact agreed hat, if Gajarawala personally guaranteed two loans from Allegiance Bank to Texas Concrete, then Kurre would work to ensure that the Plant would be operational and profitable in a timely manner. Significant evidence and testimony exists to establish that the parties in fact agreed that, if Mr. Gajarawala personally guaranteed two loans from Allegiance Bank to Texas Concrete Enterprise, then Mr. Kurre would work to ensure that the Plant would be operational and profitable in a timely manner. In fact, the Court need not look any further than Defendant s own testimony. Kurre testified that he agreed that it was his duty to get the lant up and running and profitable in a timely manner and that he entered into that agreement with Mr. Gajarawala. Gajarawala s personal guarantee is sufficient and valid consideration because he assumed a debt he would otherwise not have had to in exchange for a promise of Kurre. This provided a benefit to Kurre as Gajarawala would become responsible for the two loan . On the other hand, Kurre s own testimony showed that he provided due consideration when he accepted a duty to work to ensure the Plant would be operational and profitable in a timely manner. Gajarawala Personal Guarantee for Repayment of the Two Loans is Valid Consideration Generally, a personal guarantee for repayment of a loan is valid consideration. See Gulf Liquid Fertilizer Co. v. Titus, 354 S.W.2d 378, 385 (Tex. 1962) (noting, in a bilateral contract, the promise to extend credit or repay a debt is sufficient consideration); Womack v. Ballard Sales Co., Page of S.W.2d 956, 957 (Tex. App. Houston [1st Dist.] 1967, no writ) (holding valid consideration existed in an oral contract where one business owner personally guaranteed the repayment of a loan for his business and the other party agreed to forward merchandise); Neeley v. Intercity Management Corp., 623 S.W.2d 942, 953 (Tex. App. Houston [1st Dist.] 1981, no writ). In fact, most guaranties are executed before the contracting parties are bound; they are part of the consideration that makes the deal happen. Veldekens v. GE HFS Holdings, Inc., CIV WL at S.D Tex Aug (Rosenthal, J.). Thus, the personal guarantee made by Gajarawala to repay the loans with Allegiance ank were valid consideration and binding on all parties. See generally Bank of Garvin v. Freeman, 181 S.W. 187, 191 (Tex. 1915) ( [O]ne person for a valuable consideration may assume as his own debt the debt of another. ). (a) Defendant Fails to Show a Personal Guarantee is Not Valid Consideration as a Matter of Law Defendant argues that the personal guarantee was an existing requirement for a commercial loan, and thus claims that the legally correct decision is that the personal guarantee cannot be consideration for any agreement between the parties. Defendant cites to no case law to support his argument as a matter of law and has wholly failed to establish that some principle of law precludes judgment on this element. In reality, as discussed above, personal guarantees are often treated as consideration in a contractual agreement. Defendant s Motion on legal insufficiency should thus be denied. Defendant s Motion, p. 8. Page of (b) Gajarawala s Testimony Presents Sufficient Factual Evidence to Support the Jury s Verdict Further, Defendant ignores the sufficient factual evidence showing Gajarawala s personal guarantee was consideration for the Oral Agreement. For example, Gajarawala testified that he would not have agreed to have the company borrow money from Allegiance Bank and personally guarantee the loans if Kurre had not promised to to get the Plant up and running and profitable in a timely manner and enter an agreement as discussed. Gajarawala s testimony establishes more than a scintilla of the evidence concerning his intent and consideration for entering into the ral greement with Kurre. Even if contrary evidence existed, all evidence is considered in the light most favorable to the verdict and indulges every reasonable inference. City of Keller v. Wilson, 168 S.W.3d at 822. Here, based on Gajarawala s testimony the jury could have easily determined that Gajarawala would never have agreed to borrow money at all but for Kurre s promise and the jury was free to disregard any contrary evidence. Simply, the record is replete with evidence of an oral agreement and the jury agreed unanimously with Gajarawala that the Oral Agreement, and valid consideration, existed. (c) Kurre Received the Benefit of the Oral Agreement s Consideration Defendant also argues that Gajarawala s personal guarantee is not valid consideration because the guarantee was made for the benefit of Texas Concrete and not Kurre directly. This argument fails on several fronts. First, Gajarawala s personal guarantee meant that Kurre was not entirely personally responsible should Texas Concrete default on the loan , providing Kurre a direct benefit for not having to shoulder full responsibility of the loans upon default. Second, it has long been Texas law that a shareholder or owner of a company receives substantial benefit and good consideration Page of for a personal guarantee of the company debt. Dyer Wortham v. Lake Jackson State Bank, 435 S.W.2d 612, 613 (Tex. Civ. App. Houston [14th Dist.] 1968, writ ref d n.r.e) (finding ample consideration directly benefiting an individual existed for an extension and renewed guarantee of a corporate loan when the individual owns at least 50% of the corporate entity) (citing Motor & Industrial Finance Corp. v. , 302 S.W.2d 386 (Tex. 1957) Where the maker or makers of notes, as here, are stockholders in the payee, the maker's promise is supported by legal consideration. It matters not that the enhancement in benefits is one to be anticipated. The continuation of the corporation by feeding it new assets gives rise to the hope or chance that the welfare of the maker stockholders will be materially benefited by improving the assets of the corporation and thereby increasing the value of the maker's individual stock certificates. s a 65% shareholder in Texas Concrete, Kurre received a personal benefit when Gajarawala personally guaranteed the loan , because Kurre interest in the company was worth more without the additional debts on the business, increasing Kurre s financial worth and potential future value. See id.; see also Dyer v. A I Automotive, Inc. 743 S.W.2d 685, 686 87 (Tex. App. El Paso 1987, no writ). Accordingly, Gajarawala personal guarantee is sufficient consideration for the ral greement and Defendant s Motion should be denied. Kurre s Promise Work Was Not Illusory because He Admits That He Did Work The jury question at issue was carefully and specifically drafted by Plaintiff to emphasize Defendant s agreement to work to ensure as opposed as to ensure as proposed by Defendant s in his proposed jury questions. Had Defendant s proposed question been utilized, he might have an argument. Stated simply this illusory argument is baseless. hether a particular matter constitutes adequate consideration is a question of law for the court. Williams v. Hill, S.W.2d 911, 913 (Tex. Civ. App. Dallas 1965, no writ). However, Page of he court may base its determination on whether there is adequate consideration based on facts found by the jury. Houston Med. Testing Servs. v. Mintzer, 417 S.W.3d 691, 695 96 (Tex. App Houston [14th Dist.] 2013, no pet.). There must be a contemporaneous exchange of consideration between the parties at the time the otherwise enforceable agreement is executed for the promise not to be illusory. TMC Worldwide, L.P. v. Gray, 178 S.W.3d 29, 37 (Tex. App. Houston [1st Dist.] 2005, no pet.). Regardless of the level of specificity provided for in a contract, where the evidence shows that the parties intended to enter into an agreement, the courts should find the contract definite h to grant a remedy provided there is a certain basis for determin the remedy. America s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 623 (Tex. App. San Antonio 1996, no writ) (emphasis added) Based on the jury finding , it was clearly the intent of both parties to enter into the Oral Agreement and there was clearly a contemporaneous exchange of consideration. Plaintiff would sign a personal guarantee and Defendant would to ensure that the Plant was operational and profitable in a timely manner. The jury found that the evidence demonstrated Kurre and Gajarawala entered into a mutually beneficial agreement On one side of the bargain, Gajarawala was personally guaranteeing the two loans from Allegiance Bank to Texas Concrete. This was not an optional agreement and Gajarawala was bound to repay the loans as bargained for in the ral greement. For example, more certainty is necessary in an action for specific performance than is necessary in an action for damages. Pace Corp. v. Jackson, 284 S.W.2d at 345; Tenneco, 917 S.W.2d at 830. See HARGE OF THE OURT at 4 7. Id Page of On the other hand, in exchange for Gajarawala s guarantee, Kurre was bound by his agreement to work to ensure that the Plant was operational and profitable in a timely manner. Notably Kurre purports to allege that his agreement was illusory because there is no clarity as to operational and profitable, etc. Kurre wholly misses the operative action of his agreement. As the jury questions specifically lay out: Kurre agreed to ensure that the Plant was operational and profitable. As the Court will recall, about five ( minutes into Kurre s cross examination testimony, he was impeached with his deposit on testimony establishing, unequivocally, that Kurre did not provide any work or capital to the Plant since the day the lawsuit was filed. Without question the jury, after catching Kurre in his lie fiv (5) minutes into his examination, found that he failed to fulfill his clear agreement to work to ensure that the plant was operational and profitable because he admitted that he did not work. Moreover, Kurre s arguments of illusory promises cite to no support in the law or the evidence. Here, the jury and this Court can (and did) determine potential remedies for Kurre s failure to work to ensure that the plant was operational and profitable in a timely manner including, but not limited to, the promised lost profits from the operational Plant, the loans taken by the company, the loans made by Plaintiffs to the company, and the lost profits the members of the company Because the jury found the parties intended to be bound by an agreement, and the Court can discern a remedy based on the promises, Defendant allegations of illusory promises are without merit as a matter of law and Defendant s otion should be denied. Page of B. Texas Law Expressly Permitted this Court to Treat the Breach of Company Claim and Award of $300,000 as a Direct Claim Brought on Gajarawala s Behalf The following is not in dispute: DEVSJ Concrete, LLC is a closely held limited liability company under Texas law. Texas Concrete Enterprise IV, LLC is a closely held limited liability company under Texas law. DEVSJ is a 35% owner and a member of Texas Concrete DEVSJ brought its derivative action on behalf of Texas Concrete. Gajarawala is the sole owner and member of DEVSJ. Moreover, based on the evidence presented, the jury found that (1) the Company Agreement was an enforceable contract, (2) Kurre breached the Company Agreement, and (3) Kurre breach was not excused. The charge then asked the jury to determine What sum of money, if any, if paid in cash, would fairly and reasonable compensate Gajarawala for his damages, if any, that 10 resulted from the breach of the Company Agreement. 11 The jury responded with a total of $300,000.00. In the Court s Final Judgment, the Court awarded the $300,000 to DEVSJ for Kurre s breach of the Company Agreement. See US RG ODE NN § 101.463. Id Defendant never challenged DEVSJ or Gajarawala s ability to sue in this capacity in a verified pleading, and has therefore waived any right to complain about the capacity DEVSJ or Gajarawala was sued. Texas Rule of Civil Procedure 93(2). When capacity is contested, Rule 93(2) requires that a verified plea be filed anytime the record does not affirmatively demonstrate the plaintiff's or defendant's right to bring suit or be sued in whatever capacity he is suing. Pledger v. Schoellkopf, 762 S.W.2d 145 (Tex. 1988) (per curiam) (citing TEX. R. CIV. P. 93(2)). Defendant s motion admits as much on page 2: Plaintiff Hemant Gajarawala, is the sole managing partner of DEVSJ Verdict, Questions 11, 13, and 14. 10 Verdict, Question 15. 11 Id. Page of Notably any purported error related to this question, was again not preserved by Defendant. In fact Defendant tendered a damages question related to this question seeking to have damages awarded to Texas Concrete. Moreover, Plaintiff tendered the proper question seeking damages for DEVSJ and at Defendant s counsel s request the damages question and all other questions related to DEVSJ were changed, by agreement to Plaintiff because Plaintiff was the sole owner of DEVSJ and the real person . Plaintiff s counsel s reasoning for such a change was because he did not want to confuse the jury. That said, the law supports the Court s entry of judgment on this matter as it did, irrespective of the fact that DEVSJ was not listed in the damages question for breach of the company agreement. Defendant seeks to make an issue out of this award because, as Defendant claims, Question 16 did not identify Interveno DEVSJ and any award of damages was wrongly attributed to Plaintiff Gajarawala. Defendant s argument is based entirely on the fact that the juror charge states ajarawala instead of DEVSJ in Question 1 . The facts, and Texas law, dictate otherwise. Specifically, Texas law explicitly states: (c) If justice requires (1) a derivative proceeding brought by a member of a closely held limited liability company may be treated by a court as a direct action brought by the member for the member s own benefit; and (2) a recovery in a direct or derivative proceeding by a member may be paid directly to the plaintiff or to the limited liability company if necessary to protect the interests of creditors or other members of the limited liability company. Page of EX RG ODE § 101.463(c) (emphasis added) 12 In other words, a court may elect to treat a derivative claim (like Interveno claim) as a direct action brought by the member for their own benefit (DEVSJ, which is fully owned by Gajarawala . This direct action can either be treated as a direct claim brought by either the named member, such as DEVSJ or the named member s owner, such as Gajarawala 13 Ritchie, 443 S.W.3d at 880 (citing EX RG ODE ); see also Saden v. Smith, 415 S.W.3d 450, 463 64 (Tex. App. Houston [1st Dist.] , pet. denied trial court was authorized to treat the derivative claims as individual claims ). herefore, in addition to Kurre and his counsel s insistence on having Gajarawala named as the recipient of the damages award, this Court was authorized to treat the breach of the Company Agreement as Gajarawala s direct claim brought on his individual behalf, and thus appropriately identified Gajarawala on Question 1 despite the recovery being assigned to DEVSJ in the Court s nal Judgment. The Breach of the Company Agreement Claim Always Remained s Derivative Action A trial court's decision to treat an action as a direct action under § 21.563(c) ... does not mean that the action is no longer a derivative proceeding. Swank v. Cunningham 258 S.W.3d 647, 665 (Tex. App. Eastland 2008, pet. denied). Thus, even though the Court elected to treat 12 Texas law applies the same qualifications for closely held status to both corporations and LLCs. Compare US RGS ODE NN 463 (defining closely held LLC as LLC with fewer than 35 members that has no membership interests listed on national securities exchange or regularly quoted in over the counter market), with id. § 21.563 (defining closely held corporation as corporation with fewer than 35 shareholders that has no shares listed on national securities exchange or regularly quoted in over the counter market). Case law and opinions concerning closely held corporations on this issue is equally applicable to closely held LLCs, and vice versa. 13 Under the Double Derivative Concept adopted the Texas Supreme Court, Gajarawala, as the member and owner of DEVSJ, is interchangeable with DEVSJ for purposes of the derivative claim because both DEVSJ and Gajarawala have standing to bring a derivative claim for the breach of the Company Agreement. Page of DEVSJ s derivative claims as a direct claim of Gajarawala on the jury charge and verdict form, the breach of contract for the Company Agreement never stopped being s derivative In Saden v. Smith, the Court rejected the exact same argument made by Defendant here. 415 S.W.3d at . he Houston Court of Appeals held that it is appropriate for an individual to be identified on the jury charge as if it were the individual s direct claim, even if the action itself derivative and belong to a corporate entity. Id Specifically, at the charge conference, Saden argued that Smith should not be included on the jury charge individually because Smith could not recover for breach of fiduciary duty because there was no evidence of any fiduciary relationship whatsoever between Saden and Smith the fiduciary relationship existed only between Saden and the corporate entity. Id. The court rejected this argument because § 101.463(c) allows the trial court to treat the derivative claim as Smith s direct claim and include Smith on the charge as the plaintiff seeking to recover damages. See id. ust as in , Defendant argues that because Gajarawala is not a member of Texas Concrete it has no standing or right to recover for a claim for Kurre s violation of the Company Agreement and should not be identified on Question 1 This argument was soundly rejected in . In reality, Texas law explicitly permits this Court to treat the claim as Gajarawala s direct claim in the jury charge instead of either DVESJ or Texas Concrete all while the derivative claim and recovery remained the property of Texas Concrete and its member DVESJ. Thus, as in , the jury charge appropriately identified Gajarawala. Page of Damages from Kurre s Breach of Company Agreement Belong to Texas Concrete s Non Breaching Members Finally, because Kurre s breach of the Company Agreement is a derivative action, the injury suffered actually belongs to Texas Concrete s members namely Kurre and DEVSJ. However, considering that DEVSJ was the only non breaching member and was injured by Kurre s wrongful conduct (while Kurre himself, as the only other member, benefited from the wrongful conduct), § 101.463(c)(2) explicitly allows the Court to dictate that the payment and recovery for Texas Concrete s injury be paid directly to DEVSJ, as it did in the Final Judgment. 415 S.W.3d at 463. Thus, the Court s Final Judgment appropriately rendered a verdict based on the findings of the jury: a valid enforceable Company Agreement exists, Kurre breached the Company Agreement, Kurre s breach was not excused, and that the jury s award of $300,000 for the claim was given to the appropriate entity DEVSJ as the non breaching member of Texas Concrete though awarded directly to its sole managing member, Plaintiff, as just requires per the aforementioned applicable law. The Jury s Verdict and Award are Factually Sufficient and Not Excessive A court utilizes the same test for determining excessive damages as for any factual sufficiency question. Pope v. Moore, 711 S.W.2d 622, 624 (Tex. ; Rose v. Doctors Hosp., 801 S.W.2d 841, 847 48 (Tex. 1990) (the standard of review for an excessive damages complaint is factual sufficiency of the evidence.). When considering a factual sufficiency challenge to a jury's verdict, courts must consider and weigh all of the evidence, not just that evidence which supports the verdict. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). To analyze a factual sufficiency challenge, we must consider and weigh all of the evidence and may set aside a verdict only if the evidence is so weak or ifthe finding is Page of so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Dow Chem. Co. v. Francis 46 S.W.3d 237, 241 (Tex. 2001) see Al Turki v. Taher, 958 S.W.2d 258, 261 & n.2 (Tex. App. Eastland 1997, pet. denied). A reviewing court will reverse the trial court only if the evidence which supports the jury's finding is so weak as to be clearly wrong and manifestly unjust. Id. (citing Cain v. Bain, S.W.2d 175, 176 (Tex. 1986)); see also Dyson v. Olin Corp., 692 S.W.2d 456, 457 (Tex. 1985). Defendant argues that there is insufficient factual evidence to support the $834,646 damage award to Plaintiff, that this damage award to Plaintiff was excessive, the $300,000 damage award in favor of Intervenor, and that the jury s finding that Kurre failed to comply with the Company greement first. In reality, the record in this case show there is legally and factually sufficient evidence to support the jury s findings. First, with respect to Defendant s bald claim that there is no evidence of damages resulting from Defendant s breach of the Oral Agreement, Defendant ignores the evidence and testimony. More specifically Defendant ignores numerous exhibits that were pre admitted by his agreement in this case.14 There are various records pre admitted by Defendant that identify the moneys spent by Gajarawala as a direct result of Kurre s breach of the agreement and such exhibits constitute much more than a scintilla of evidence. The jury had ample opportunity to review those pre admitted exhibits and to surmise that those financial documents, credit card statements, bank account records, copies of checks , summary sheets, testimony, and the like established a damage amount the directly related to Kurre s breach of the agreement. Furthermore, there is significant 14 See e.g., Defendant s Exhibits 7, 19, 28, 35, 38, 59, 97, 111, and Plaintiff and Intervenor Plaintiff Exhibits 5, 10, 13, 14, 15, 17, 18, 20, 23, 24, 25, 26, 27, 30, 33, 34. In addition to the aforementioned, approximately 200 additional exhibits were pre admitted and considered by the jury during deliberations. Page of evidence for the jury to determine that the only reason that the Allegiance Bank loans were not called on was because Gajarawala loaned the company in excess of $1.7 million dollars and otherwise spent a lot of money to try to mitigate the losses caused by Defendant s breach of the agreement. This is both an injury and proof of monetary damages that was not in any way excessive. Second, with respect to Defendant s claim that there is no evidence of damages resulting from Defendant s breach of the Company Agreement, Defendant again ignores the evidence and testimony of this case. In addition to the pre admitted exhibits showing financial records, the jury heard evidence of the expected profits that were lost as a result of Kurre s breach of the Company Agreement. Finally, one does not have to look father than Defendant s own testimony for evidence that Kurre failed to comply with the Company Agreement first. Specifically, Kurre admitted that he willingly and intentionally quit providing capital or work for the company and that he did nothing to get the Plant operational and profitable. Therefore, after viewing the entire record and the evidence in support of and against Kurre breach of the Company Agreement and Oral Agreement and damages thereto, there is more than enough evidence to demonstrate that the jury's determination was supported by sufficient evidence. Accordingly, the Court should deny Defendant s Motion. The Court Properly Entered Its Declaratory Judgment Under the declaratory judgment act, a court has the power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. EX IV RAC EM ODE § 37.003 Page of A contract may be construed either before or after there has been a breach. Id. § 37.004(b). When a corporate bylaws or company agreement is unambiguous it may be interpreted as a matter of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). The entry of a declaratory judgment rests within the sound discretion of the trial court. Bonham State Bank v. Beadle, 907 S.W.2d 465, 468 (Tex.1995); Crawford v. City of Houston, 600 S.W.2d 891, 894 (Tex. App. Houston [1st Dist.] 1980, writ ref'd n.r.e.). Ultimately, Defendant s complaints as to the interpretation of the Company Agreement should fall on deaf ears. 15 There can be no dispute, the Court was well within its authority to interpret the unambiguous Company Agreement as a matter of law with the verdict of the jury as a backdrop. Specifically, the jury found that Kurre breached his fiduciary duty and violated the Company Agreement, with the latter resulting in damage to Texas Concrete in the amount of $300,000.16 As detailed above, the breach of the fiduciary duty and Company Agreement claims brought by Intervenor DEVJS were derivative claims brought against Kurre on behalf of Texas Concrete. In other words, the jury absolutely found that Kurre violated both his fiduciary duty and the Company Agreement and caused damage to Texas Concrete. 15 Defendant s issues raised as to whether Gajarawala has standing or capacity to bring a declaratory judgment have been well briefed throughout this Response and the concept of derivative actions.