13 July 7 P7:07
CAUSE NO. 09-08231
MARSHALL HODGES AND § IN THE DISTRICT COURT OF
RHON ROMMER §
v. § DALLAS COUNTY, TEXAS
JITENDRA RAJPAL §
§ 95H JUDICIAL DISTRICT
DEFENDANT’S RESPONSE TO PLAINTIFFS’
MOTION TO ENTER JUDGMENT AND MOTION FOR JUDGMENT
TO THE HONORABLE KEN MOLBERG, DISTRICT COURT JUDGE:
COMES NOW defendant Jitendra Rajpal and files this Response to Plaintiffs‟ Motion to Enter Judgment and
For Judgment and in support thereof would show the Court the following:
Plaintiffs have submitted a proposed Judgment (“Judgment”) to the Court seeking actual damages of
$150,000.00 per plaintiff based upon their three causes of action, fraud, breach of contract and breach of fiduciary
duty; pre judgment interest on their claims in the amount of $72,833.34 and attorneys‟ fees in the total amount of
$140,000.00 to be divided equally between the plaintiffs. The Judgment cannot be entered and defendant is entitled
to judgment on all of plaintiffs‟ claims for the reasons set forth below:
Plaintiffs sued defendant and the jury entered a verdict in favor of plaintiffs on three causes of action, breach
of the Limited Partnership Agreement of Greenville Travelers LP (“Agreement”); breach of fiduciary duty and fraud.
The sole evidence that plaintiffs introduced at trial as to damages consisted exclusively of evidence that each
of the plaintiffs invested the sum of $50,000.00 to become a limited partner in Greenville Travelers LP
(“Partnership”). Plaintiffs‟ entire case as to the monetary relief being sought was to obtain return of their respective
Plaintiffs‟ evidence rests on two sets of representations, pre investment oral statements allegedly made by
defendant and post investment statements contained in the Greenville Travelers LP Agreement.
RESPONSE TO MOTION FOR JUDGMENT 1
a. Pre Investment Representations. Both plaintiffs testified that in December, 2003 prior to their
investing in the Greenville Partnership, defendant Rajpal represented to plaintiffs that:
(i) Plaintiffs would receive a lien on the hotel property to secure the return of their investment;
(ii) Plaintiffs would receive their investment back upon the sale of the Greenville hotel.
b. Post investment Representations. Plaintiffs‟ claims post investment for breach of fiduciary
duty, breach of contract and fraud are predicated exclusively on certain terms and conditions contained in the
Greenville Agreement; to wit:
Section 7.31 which provides that “the general partner shall cause an unaudited annual report to be
sent to each of the unit holders no later than 90 days after the close of the fiscal year”;1
Section 7.32: “The general partner shall cause quarterly unaudited reports of the partnership‟s
operation to be sent to each of the unit holders as soon as practicable after the end of each quarter
commencing with the fiscal quarter ending March 31, 2004, but in no event more than 60- days after the
close of each fiscal quarter….”2
Section 15.1.4: “The general partner will have and maintain a net worth sufficient to meet the
existing requirements of applicable regulations, rulings and policies of the Internal Revenue service in
order that the Partnership be in a position to be classified as a partnership for Federal income tax
Section 9.4: “Upon dissolution (if the business of the partnership is not continued) and again upon
the termination of the Partnership after the winding up of affairs of the Partnership is complete, an
accounting of the Partnership shall be made and a report thereof shall be furnished to the General Partner
or its legal representative and to all Unit holders.”4
Section 14.2: “Loans to the General Partner or Others. The Partnership shall not make any loans to
the General Partner or to any other person.”5
Testimony of Marshall Hodges (“Hodges Tr.”) taken on May 28, 2013, at page 24.
Hodges Tr. at page 25.
Hodges Tr. at page 27.
Hodges Tr. at page 28.
RESPONSE TO MOTION FOR JUDGMENT 2
Section 15.1.2: “Good Faith and Best Efforts. The General Partner covenants and agrees for the
benefit of the limited partners, that throughout the term of this Agreement, it will at all times use its best
efforts, acting as a fiduciary on behalf of the Limited Partners to (i) perform or cause to be performed its
obligations under this Agreement and all other agreements and documents executed in furtherance or in
connection with this Agreement and (ii) do or cause to be done all things necessary or proper within its
power or control to protect the rights of the Limited Partners.”6
Based upon what plaintiffs contend were violations of the above Sections and money paid to or on behalf of
defendant Rajpal, plaintiffs requested submission of a jury charge for breach of contract, breach of fiduciary duty
and, apparently fraud by concealment.
While plaintiffs failed to put on any evidence of a specific injury caused by defendant‟s alleged breach of
contract and breach of fiduciary duty (see discussion below), plaintiffs introduced evidence reflecting what they
contended were “loans” made by the Partnership to defendant and other entities and alleged payments made by
defendant from Partnership funds for non Partnership liabilities, which apparently was the primary basis for
plaintiffs‟ claims of contract breach (Section 14.2 of the Agreement cited above) and breach of defendant‟s fiduciary
duty. Plaintiffs brought their claims as limited partners of the Partnership. Under the holding by the Dallas Court of
Appeals in Hall v. Douglas, 380 S.W.3d 860 (Tex.App.—Dallas 2012, no pet.), as a matter of law, plaintiffs‟ claims
must be dismissed for the reason that they have no standing to bring those claims.
In Hall, a case factually identical to the present case, suit was brought by a limited partner against both the
general partner and another limited partner for both contract breach and breach of fiduciary duty based upon
defendants‟ use of partnership funds to pay non partnership debts. In holding that Hall had no standing to bring his
claims, the court began its analysis by citing §152.211 of the Texas Business Organization Code (“BOC”) which
Hodges Tr. at page 29.
RESPONSE TO MOTION FOR JUDGMENT 3
“[A] partnership may maintain an action against a partner for breach of the partnership agreement or for
violation of a duty to the partnership causing harm to the partnership” which the court found to be exclusive to the
partnership, precluding a limited partner from bringing such action. (“A limited partner does not have standing to sue
for injuries to the partnership that merely diminish the value of the partner‟s interest”7).
Turning to the alleged misappropriation of the partnership funds, the court found that any injury caused by
this act was a partnership injury and the right of recovery was the partnership‟s alone “even though the economic
impact of the alleged wrongdoing may bring about reduced earnings, salary or bonus”8 or “a diminution in value of
partnership interests or a share of the partnership income.”9
Holding that Hall did not have standing to sue for “distributions, profits and other benefits he allegedly lost
because of the harm suffered by the partnership”,10 the court held that a limited partner only has standing where it
could show that the wrongdoing complained of directly caused personal injury to the partner.
Putting aside the fact that plaintiffs totally failed to show any injury caused by any of the alleged fiduciary or
contractual breaches, much less direct personal injury, what is indisputable is that all of the acts complained of,
whether the alleged misappropriations, failure of the general partner to have a „sufficient net worth‟ or making loans
to third parties, belong exclusively to the Partnership to the exclusion of plaintiffs who made no attempt to, much
less succeeded in proving direct personal damages to them as a result of the complained of acts.
What is undeniable is that all of plaintiffs‟ claims, whether for breach of fiduciary duty, breach of contract or
fraud by concealment, founded upon and arising from alleged violations of the Partnership Agreement, belong
exclusively to the Partnership and plaintiffs lack standing to bring such claims individually. As such, plaintiffs‟
claims for breach of contract, breach of fiduciary duty and fraud by concealment founded on the Partnership
Agreement must be dismissed.
ELECTION OF REMEDIES
In their verdict, the jury awarded each of the plaintiffs‟ actual damages as follows:
a. For breach of contract the sum of $20,000.00;11
Id at 873.
Id. at 874.
RESPONSE TO MOTION FOR JUDGMENT 4
b. For breach of fiduciary duty, the sum of $50,000.00;12 and
c. For fraud the sum of $20,000.00.13
On the face of the Judgment, it is clear that the damages being sought by plaintiffs are cumulative of all
damages found by the jury or as requested by plaintiffs on all of plaintiffs‟ claims and therefore plaintiffs must be
required to elect under which theory they seek judgment. Gallo v. Chapa, 212 S.W.3d 299, 303 (Tex. 2007) (“There
can be but one recovery for one injury and the fact that …there may be more than one theory of liability does not
modify this rule”); Cottman Transmission Systems, L.L.C. v. FVLR Enterprises, L.L.C., 295 S.W.3d 372, 379
(Tex.App.—Dallas 2009, review denied) (“The one satisfaction rule limits a plaintiff to one satisfaction for the
injuries sustained by him”).
In sum, plaintiffs are required to make an election of remedies as to which theory of recover they are seeking
DAMAGES AND THE JURY CHARGE
As a matter of law, plaintiffs are not entitled to any damages for two reasons. First, plaintiffs failed to put on
any evidence that any of the alleged wrongdoing by defendant or other entities caused plaintiffs any injury and
second that the jury charge as to damages for each of the causes of action are not the proper measure of damages.
a. Breach of Contract-Causation.
The universal rule for measuring damages for the breach of a contract is just compensation for the loss or
damage actually sustained.14 In order to prevail on their breach of contract claim, plaintiffs were required to
introduce into evidence and establish that they suffered some pecuniary injury or loss as a result of the
breach(es) being alleged. 15 The evidence must show that the damages are the natural, probable and foreseeable
Question 2. In their Motion, plaintiffs have requested that the Court disregard the jury‟s finding and instead award each of the
plaintiffs the sum of $50,000.00.
Question 5. In their Motion, plaintiffs have requested that the Court disregard the jury‟s finding and instead award each of the
plaintiffs the sum of $50,000.00.
Coldwell Bankerv Whiteside Associates v. Ryan Equity Partners Ltd., 181 S.W.3d 879, 891-892 (Tex. App.—Dallas 2006, no
Employers Retirement System of Texas v. Putnam LLC, 294 S.W.3d 309, 318 (Tex.App.—Austin 2009, no pet.); Allen v.
American General Finance, Inc., 251 S.W.3d 676, 685 (Tex.App.—San Antonio 2007, review granted); Prudential Securities Inc.
v. Haugland, 973 S.W.2d 394, 396 (Tex.App.—El Paso 1998, review denied).
RESPONSE TO MOTION FOR JUDGMENT 5
consequence of the defendant‟s conduct.16 The absence of this causal connection between the alleged breach and the
alleged damages will preclude recovery.17
As reflected above, plaintiffs introduced into evidence what they claimed were six breaches of the
Agreement, which are cited above. In none of these cases did plaintiffs introduce any evidence that the alleged
breach caused a specific pecuniary injury. Thus, by way of example, plaintiffs asserted that Section 7.31 of the
Agreement which provides that the general partner shall cause an unaudited annual report to be sent to each of the
unit holders no later than 90 days after the close of the fiscal year was breached for failure to do so. What plaintiffs
totally failed to do however was put on any evidence that they suffered a pecuniary injury as a result of the alleged
breach, much less that the injury was the natural, probable and foreseeable consequence of the breach. This is equally
true of each and every alleged breach of the Agreement cited above.
In sum, plaintiffs‟ failure to introduce any evidence of causation between any alleged breach and an injury
precludes as a matter of law, any recovery for breach of contract.
The Jury Charge
WHAT SUM OF MONEY, IF PAID NOW IN CASH, WOULD FAIRLY AND REASONABLY COMPENSATE
HODGES AND ROMMER FOR THEIR DAMAGES, IF ANY, THAT RESULTED FROM RAJPAL'S FAILURE TO
COMPLY WITH THE AGREEMENT?
Consider the following element of damages, if any, and none other Reliance Interest
Reliance Interest The amount of money that Hodges and Rommer
paid to enter i n to the Greenville Travelers Limited Partnership Agreement
Answer in dollars and cents for damages, If any, for
Hodges 20, 000.
Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741, 758 (Tex.App.—El Paso 2000, no pet.).
Employers Retirement, supra at 318; Prudential, supra at 397.
RESPONSE TO MOTION FOR JUDGMENT 6
Reliance damages are measured as the out-of-pocket expenditures made by one party in reliance on the
actions of another party.18 Plaintiffs have defined for the jury the damages as being the initial investment made in
the Agreement, which on its face is improper and fatally defective. Any damages, if any to which plaintiffs would be
entitled would have to be caused by the claimed breach (see discussion above). The jury instruction therefore and
jury finding should be disregarded for the reason that plaintiffs have failed to put into evidence any basis for a
finding that any alleged breach caused them any injury and for the further reason that any breach complained of
occurred after plaintiffs invested in the Partnership and therefore could not constitute out of pocket expenditures
resulting from defendant‟s alleged breaches.
Additionally, the jury‟s finding that each of the plaintiffs suffered monetary injury of $20,000.00 has no
evidentiary basis in the record and must be disregarded since there is no evidence which would sustain such a
b. Fraud- Causation.
In order to prevail on their theory of fraud, plaintiffs were required to, inter alia, present evidence
establishing that as to any of the fraudulent statements alleged, that plaintiffs suffered an injury by actively and
justifiably relying on that representation.19 Thus to prevail on their theory of fraud, plaintiffs must present evidence
first of reliance-that is that plaintiffs took some action in reliance upon the alleged fraudulent statement(s) (“A
plaintiff establishes reliance by showing that the defendant‟s acts and representations induced it to either act or
refrain from acting to its detriment”) 20and that as a result of the reliance, plaintiffs suffered injury. To establish the
element of causation, a plaintiff must show that the defendant‟s acts or omissions are a cause in fact of foreseeable
losses. The defendant‟s acts or omissions are a cause in fact if the plaintiff can show, beyond mere conjecture, guess
or speculation, that an „act or omission was a substantial factor in bringing about an injury which would not
otherwise have occurred.21 In the present case, plaintiffs have asserted a claim for fraud by concealment based upon
defendant‟s alleged non disclosure of violations of some or all-it was never made clear-of the above cited terms of
Sterling Chemicals, Inc. v. Texaco, Inc., 259 S.W.3d 793, 798 (Tex.App.—Houston [1st Dist] 2007, review denied).
Exxon Corporation v. Emerald Oil & Gas Company LC, 348 S.W.3d 194, 217 (Tex. 2011).
Prospect High Income Fund v. Grant Thornton LLP, 203 S.W.3d 603, 618 (Tex.App.—Dallas 2006, reversed in part on other
RESPONSE TO MOTION FOR JUDGMENT 7
the Agreement. What plaintiffs failed to do-the record is absolutely silent- was put on any evidence that as a result of
the fraud, plaintiffs acted or failed to act and as a result suffered a pecuniary injury. There is therefore no evidence of
either reliance or causation and as a result, defendant is entitled to judgment on plaintiffs‟ claims for fraud by
The Jury Charge and Verdict:
Plaintiffs requested the following jury charge which was submitted to the jury on the question of damages
What sum of money, if any, if paid now in cash, would fairly and reasonably
compensate Hodges and Rommer for their damages, if any, that resulted from such fraud as
you have found in answer to Question 4?
Consider the following elements of damages, if any, and none other
Reliance The value/amount of money that Hodges and Rommer paid or gave in
reliance on Rajpal's representations, or kept invested based on Rajpal's failure to disclose a
Out of Pocket The value/amount of money Hodges and Rommer paid in
exchange for an interest in the Greenville Travelers Limited Partnership
Plaintiffs have asserted two distinct causes of action for fraud, that being the
pre investment oral representations allegedly made by defendant prior to plaintiffs
investing in the Partnership and the alleged fraud by concealment by failing to
disclose breaches of the Partnership Agreement.
In keeping with their distinct fraud claims- pre and post investment-,
plaintiffs requested damages for the alleged pre investment fraud under its damage
theory of “Reliance” damages for “The value/amount of money that Hodges and
Rommer paid or gave in reliance on Rajpal‟s representations….” The jury found
that plaintiffs incurred zero damages as to this claim. Defendant therefore is entitled
RESPONSE TO MOTION FOR JUDGMENT 8
to judgment on plaintiffs‟ claims of fraud based upon defendant‟s alleged pre
investment oral representations.
As to plaintiffs‟ charge for “out of pocket damages, Texas recognizes two
measures of direct damages for common law fraud; out-of-pocket and benefit-of-
While plaintiffs use the term “out-of-pocket” as a measure of damages, their definition has
no legal basis and therefore is fatally defective. “Out-of-pocket” damages measure the difference
between the value of that which was parted with and the value of what was received.23 Plaintiffs
totally failed to put on any evidence to establish the difference between what plaintiffs paid and the
value of what they received-that is there was no evidence presented establishing the value of what
plaintiffs received. Finally, the jury‟s finding that plaintiffs incurred damages of $20,000.00 has no
evidentiary basis in the record. For the foregoing reasons, the jury‟s finding of out-of-pocket
damages must be disregarded.
c. Breach of Fiduciary Duty- Causation.
To prove damages for breach of fiduciary duty, plaintiffs must show that defendant‟s
breach resulted in either injury to plaintiffs or a benefit to defendant.24 Plaintiffs introduced no
evidence establishing any benefit obtained by defendant for which they sought damages in the Jury
Baylor University v. Sonnichsen, 221 S.W.3d 632, 636 (Tex. 2007).
Baylor, supra at 636; Arthur Andersen & Co. v. Perry Equipment Corporation, 945 S.W.2d 812, 817 (Tex. 1997); Biko v.
Siemans Corporation, 246 S.W.3d 148, 160 (Tex.App.—Dallas 2008, review denied).
Anderton v. Cawley 378 S.W.3d 38, 51 (Tex.App.—Dallas 2012, no pet).
RESPONSE TO MOTION FOR JUDGMENT 9
In order to prevail on their claim, therefore, plaintiffs were required to prove that defendant‟s
breach of that duty proximately caused plaintiffs‟ damages.25 Proximate cause includes two essential
elements: (i) forseeability and (ii) cause in fact.26 Cause in fact means that the act or omission was a
substantial factor in bringing about the injury and without which no harm would have occurred.27
Proximate cause cannot be established by mere guess or conjecture, but rather must be proved by evidence
of probative force.28
In the present case, plaintiffs never specified for the jury, what breaches of duty occurred other than
referencing the above six Sections of the Agreement and the alleged breach of the Sections. Plaintiffs
presented no evidence at the trial however that the alleged breaches proximately caused them injury or
even introduced any evidence identifying the alleged injury to them arising from the breach. In sum,
plaintiffs have totally failed to establish any causation between the alleged breaches and an identifiable
legally cognizable injury to them and therefore have failed to establish a necessary element required to
prevail on their theory of breach of fiduciary duty.
The Jury Charge.
Plaintiffs requested and the following Question regarding damages for breach of fiduciary
duty was submitted and answered by the jury:
What sum of money, 1f any, if paid now in cash, would fairly and reasonably compensate
Hodges and Rammer for their damages, i f any, that were proximately caused by such breach of duty
relating to Greenville Travelers Limited Partnership?
Consider the following elements of damages, 1f any, and none other
Finger v. Ray, 326 S.W.3d 285, 291 (Tex.App.—Houston [1st Dist] 2010, no pet).
McClure v. Allied Stores of Texas, Inc., 608 D.W.2d 901, 903 (Tex. 1980).
RESPONSE TO MOTION FOR JUDGMENT 10
Loss of Contractual Consideration. The value/amount of money that Hodges and Rommer paid to
enter into the Greenville Travelers Limited Partnership Agreement
Out of Pocket. The value/amount of money Hodges and R o mmer paid in exchange for an
interest in the Greenville Travelers Limited Partnership Agreement.
Answer in dollars and cents for damages, i f any, for a Loss of Contractual Consideration
b Out of Pocket
Hodges $ 25,000
The jury‟s above verdict as to plaintiffs‟ claim for breach of fiduciary duty must be disregarded for
three reasons. First the jury found damages to have occurred under two different theories of recovery for
the same wrong arising from the same acts or omissions and therefore plaintiffs are required to elect their
remedies as to the above two findings.29 Second, there is no evidence in the record supporting the amount
of damages found by the jury. Third, there is no legally cognizable theory of damages for “Loss of
Contractual Consideration” for breach of fiduciary duty, nor is the definition given by plaintiffs for “out of
pocket” damages legally correct or supportive of plaintiffs‟ claim that they are entitled to receive their
initial investment back.
For the foregoing reasons, the jury‟s verdict as to the damages for breach of fiduciary duty must be
RESPONSE TO MOTION FOR JUDGMENT 11
STATUTE OF LIMITATIONS
Based upon the uncontradicted testimony and other evidence adduced at trial, defendant is entitled to
judgment on plaintiffs‟ claim of pre-investment fraud for the reason that that claim is barred by the applicable statue
of limitations. Both Hodges and Rommer testified at trial to the following:
1. Prior to their investing in the Greenville Partnership, defendant represented to them that they would
i.) receive a lien on the hotel property to secure their investment; and ii) there investment would be paid back at the
time that the Greenville hotel was sold;
2. The alleged representations by defendant were made to them in December, 2003 just prior to their
making their investments;
3. According to Hodges own testimony, thereafter, in April or May or June, 2004, he received the
Greenville Partnership Agreement and saw that it did not contain any reference to either the lien or
return of Hodges‟ investment and “objected that the limited partnership agreement was not what
[Hodges]-was not what was agreed to.”30
4. According to Rommer‟s testimony, he received the Greenville Partnership Agreement in April or
May, 2004 at which time he objected that the Agreement did not incorporate providing Rommer
with a lien nor committed to giving Rommer back his investment.31
Based upon the foregoing testimony and evidence, defendant is entitled to judgment on plaintiffs‟ claims of
pre investment fraud by defendant for the reason that as a matter of law, those claims are barred by limitations.
Fraud has a limitation periods of four years after which such claims are barred.32 A cause of action
for fraud accrues on the date the defendant makes the fraudulent statement.33 However, the limitation
period does not begin to run until the fraud is discovered or could have been discovered through the
exercise of due diligence, otherwise known as the discovery rule.34 In order for the plaintiff to evoke the
discovery rule, plaintiff has the burden to show that the injury was both inherently undiscoverable and
Hodges Tr. at 56; page 59; pages 61-62.
Transcript of the testimony of Rhon Rommer taken on May 29, 2013 (“Rommer Tr.”) at pages 97-98.
Tex. Civ.Prac. & Rem Code § 16.004(a) (4); Eagle Props Ltd. v. Scharbauer, 807 S.W.2d 714, 725 (Tex. 1990).
Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988).
Computer Assocs. V. Altal, Inc., 918 S.W.2d 453, 455 (Tex. 1996).
RESPONSE TO MOTION FOR JUDGMENT 12
objectively verifiable.35 An injury is „inherently undiscoverable‟ if it is, by nature, unlikely to be
discovered within the prescribed limitations period despite the plaintiff‟s diligence.36 Whether an injury is
inherently undiscoverable is determined categorically that is whether the particular type of injury claimed
is generally discoverable through the exercise of reasonable diligence.37
In the present case, by their own uncontradicted testimony, the pre investment fraudulent statements
were made to them by defendant in December, 2003. Concurrently, by their own uncontradicted testimony,
both plaintiffs discovered that the statements made were false when they received the Greenville
Partnership Agreement by June, 2004 at the very latest and having read it objected that the pre investment
terms agreed to by defendant were not in the Agreement.
Plaintiffs filed their lawsuit against defendant in June 2009, at least five years following their
discovery that the statements made by defendant in December, 2003 were false. Thus as a matter of law,
plaintiffs‟ fraud claims based upon defendant‟s pre investment misrepresentations are barred and defendant
is entitled to judgment on those claims.
The jury‟s finding that each of the plaintiffs were entitled to attorneys‟ fees of $140,000.00 must be
disregarded for the reason that there was no evidence in the record supporting such a finding. This is equally true if
the jury‟s finding was the sum of $140,000.00 for both plaintiffs. By their own admission the only evidence before
the jury was a billing statement that reflected approximately $101,000.00. Since there is no evidence to support the
jury‟s finding it must be disregarded.
In submitting their evidence to the jury regarding the awarding of attorneys‟ fees, plaintiffs made no attempt
to identify the work expended in prosecuting plaintiffs‟ claim for breach of contract- which is the only cause of
action asserted by plaintiffs for which plaintiffs are entitled to recovery of attorneys fees-from the work expended
throughout the litigation in pursuing their claims for which no legal fees are recoverable nor for the work performed
in pursuing plaintiffs‟ claims against a host of other defendants.
Via Net v. TIG Ins. Co, 211 S.W.3d 310, 313 (Tex. 2006).
RESPONSE TO MOTION FOR JUDGMENT 13
To put this in perspective, plaintiffs‟ original petition named a total of six defendants.
Although plaintiffs identified in their caption a total of eight. Thereafter, on June 17, 2011, plaintiffs added a total of
four additional defendants asserting causes of action for conspiracy to defraud and conspiracy to breach a fiduciary
duty. It was not until October 19, 2011, that the Bankruptcy Court remanded the case against the non bankruptcy
defendants to state court resulting in the reduction in the number of defendants to a total of four. Thereafter, on
August 31, 2012 plaintiffs‟ claims against three of the remaining defendants were dismissed on those defendants‟
motion for summary judgment.
Concurrently, plaintiffs‟ claims against all defendants, as subsequently amended, extended to a total of
twenty-two counts which, by counsel‟s own admission at trial were actively pursued against all of the defendants,
including claims for securities violations, spoliation, conspiracy to breach fiduciary duty, fraudulent transfer, civil
theft, conversion, negligent misrepresentation, fraud and piercing the corporate veil.
Finally, each of the causes of action alleged by plaintiffs was asserted not only as to Greenville Travelers LP
but also as to Sulphur Springs Travelers LP. There was no finding by the jury of a breach of contract as to Sulphur
Springs Travelers LP.
In defense of their failing to segregate the fees being sought under their claim for breach of the Greenville
Travelers LP partnership agreement, plaintiffs have asserted that the facts or circumstances underlying all of the
causes of action intertwined to the point of being inseparable citing the 1991 supreme court case of Stewart Title
Guar. Co. v. Sterling38. What plaintiffs fail to appreciate is that in a more recent 2009 case, Tony Gallo Motors I,
LPP v. Chapa, 212 S.W.3d 299 (Tex. 2007), the court acknowledged that the exception announced in Sterling was
threatening to swallow the rule, stating:
“It is certainly true that [plaintiff‟s] fraud, contract and DTPA claims were all „dependent upon the same set
of facts or circumstances‟ but that does not mean they all required the same research, discovery proof or legal
expertise….To the extent that Stering suggested that a common set of underlying facts necessarily made all claims
arising therefrom „inseparable‟ and all legal fees recoverable, it went too far.”39
The court concluded by holding:
822 S.W.2d 1 (Tex. 1991)
212 S.W.3d at 313.
RESPONSE TO MOTION FOR JUDGMENT 14
“Accordingly, we reaffirm the rule that if any attorney‟s fees relate solely to a claim for which such fees are
unrecoverable, a claimant must segregate recoverable from unrecoverable fees. Intertwined facts do not make tort
fees recoverable; it is only when discrete legal services advance both a recoverable and unrecoverable claim
that they are so intertwined that they need not be segregated.”40
Even a cursory review of plaintiffs‟ Exhibit 100, which are the legal billing statements of plaintiffs‟ counsel,
clearly reflect that only a tiny fraction of the hours expended and the work performed could be argued to relate to
plaintiffs‟ claim of breach of the Greenville Travelers limited partnership agreement and therefore be compensable.
What is undisputed is that the overwhelming amount of the work performed was totally unrelated to the contract
action for Greenville. Simply by way of example:
1. Throughout the litigation plaintiffs pursued their claims arising from the partnership agreement of
Sulphur Springs Travelers LP. None of this, of course, is compensable;
2. Claims against defendants Harish Rajpal, Paris Travelers LP and Elk City Travelers LP for conspiracy to
defraud and conspiracy to breach a fiduciary duty, including defending, unsuccessfully a motion for
summary judgment brought by the defendants to dismiss those claims;
3. Discovery of all defendants on all causes of action for both Sulphur Springs Travelers LP and Greenville
4. Responding to defendant, Rajpal‟s motions for summary judgment on all of plaintiffs‟ claims;
5. Preparation of motion for summary judgment on “fraud, negligent misrepresentation and breach of
And it goes on and on. In fact only a miniscule portion of the billing statements reflect any discrete work
performed as to plaintiffs‟ claim of breach of the Greenville agreement or any „discrete legal service which advances
both a recoverable and unrecoverable claim.‟ Plaintiffs‟ assertion therefore that they are entitled to all fees, is, on its
face patently absurd.
Id. at 313-314.
Description of work performed on August 18, 2012 in the billing statements.
RESPONSE TO MOTION FOR JUDGMENT 15
As a matter of law, therefore, plaintiffs are not entitled to judgment on the legal fees being sought or
found by the jury since there vwas no evidence before the jury which would support the fees awarded and plaintiffs
have totally failed to segregate those fees which are recoverable from all other fees.
Plaintiffs have asserted that they are entitled to prejudgment interest on their claims from December 15, 2003
to the date of judgment. Section 304.104 of the Finance Code provides in pertinent part that:
“[P]rejudgment interest accrues on the amount of a judgment during the period beginning the earlier of the
180th day after the date the defendant receives written notice of a claim or the date the suit is filed and ending on the
day preceding the date the judgment is entered.” In the present case, therefore, the commencement date for accruing
prejudgment interest would be June 30, 2009, the date that plaintiffs filed suit.
Based upon the foregoing, this Court should deny in allthings plaintiffs‟ motion for judgment and grant
judgment for defendant on all claims being asserted by plaintiffs.
WHEREFORE, PREMISES CONSIDERED, defendant prays that this Court deny in all things plaintiffs‟
Motion for Judgment; that it grant judgment in favor of defendant as to all of plaintiffs‟ claims and that it grant such
other and further relief, general or special, legal or equitable, to which defendant may show itself justly entitled.
_/s/ John Gitlin________
John J. Gitlin, Esq.
State Bar No. 07986600
5339 Spring Valley Road
Dallas, Texas 75254
Telephone: (972) 385.8450
Telecopier: (972) 385.8460
ATTORNEY FOR DEFENDANT
CERTIFICATE OF SERVICE
I certify that on July 8, 2013, a true and correct copy of the foregoing instrument was served on defendant‟s
counsel of record, via facsimile.
__/s/ John Gitlin__________
John J. Gitlin
RESPONSE TO MOTION FOR JUDGMENT 16
Did RaJpal fall to comply wIth one or !D0re matenal terms of the GreenvIlle Travelers
umited PartnershIp Agreement WIth respect to eIther Hodges or Rommer?
A faIlure to' comply must be materIal The CIrcumstances to conSIder in
determmmg whether a faIlure to comply IS matenal mclude
1 the extent to whIch an mJured party will be depnved of the benefIt
whIch he reasonably expected,
2 the extent to whIch the mJured party can be adequately compensated
for the part of that benefit of WhICh he wIll be dep~ved,
3 the extent to