Court of Appeals
Tenth Appellate District of Texas
10-24-00250-CV
Moore Family First Property Company, LLC, as General Partner to,
Fain Family First Limited Partnership,
Appellant
v.
Fain Property Company, LLC, Fain Family Management Corporation, Quail Ridge Management Corporation, Double Gun Hunting Lease, and
Rickey M. Fain,
Appellees
On appeal from the
18th District Court of Somervell County, Texas
Judge Sydney B. Hewlett, presiding
Trial Court Cause No. C10851
JUSTICE HARRIS delivered the opinion of the Court.
MEMORANDUM OPINION
Appellant Moore Family First Property Company, LLC, [Moore Family
First] as general partner to Fain Family First Limited Partnership appeals
from the trial court’s final judgment in favor of Appellees Fain Property
Company, LLC, Fain Family Management Corporation, Quail Ridge
Management Corporation, Double Gun Hunting Lease, and Rickey M. Fain. In three issues, Moore Family First argues that the trial court erred in
granting Appellees’ motion for summary judgment and in denying Moore
Family First’s motion for new trial. We affirm the trial court’s judgment.
Factual and Procedural Background
Dr. Rickey Fain, a retired family doctor, is the father of Katherine
Moore. In 1998, Dr. Fain formed the Fain Family First Limited Partnership
[Limited Partnership] and deeded his assets to the Limited Partnership. At
the formation of the Limited Partnership, Dr. Fain owned an 89% limited
partner interest, and Katherine received a 10% limited partner interest.
Appellee Fain Property Company, LLC [Fain Property] received a 1% general
partner interest in the Limited Partnership. Dr. Fain is the sole member of
Fain Property.
In 2012, Dr. Fain gifted his entire 89% limited partner interest to
Katherine. Fain Property remained as the sole general partner of the Limited
Partnership. Also in 2012, the Limited Partnership financed and built a
home for Katherine and her family on the ranch owned by the Limited
Partnership. Dr. Fain continued to manage the Limited Partnership, but
Katherine and her husband participated in running the Limited Partnership
under Dr. Fain’s mentorship.
Moore Family First Property Company, LLC v. Fain Property Page 2
Dr. Fain does not receive compensation for his management of the
Limited Partnership. He pays for his expenses using Appellee Quail Ridge
Management Corporation’s [Quail Ridge] resources. Quail Ridge manages
the rental property owned by the Limited Partnership. Dr. Fain made a loan
to Quail Ridge, and he reduces the amount of the loan based upon the
expenditures covered by Quail Ridge.
Dr. Fain and Katherine began having disagreements over management
of the Limited Partnership. Katherine became concerned that Dr. Fain was
pledging Limited Partnership assets as security for property that was not
part of the Limited Partnership. On May 19, 2022, Katherine voted her
limited partnership interest to remove Fain Property as general partner.
Katherine formed Moore Family First, with her as the sole owner, and
appointed Moore Family First as the general partner of the Limited
Partnership. Katherine notified Dr. Fain and Fain Property of the removal of
Fain Property as general partner, and she provided notification that the
management agreements between the Limited Partnership and Quail Ridge
were terminated.
Also on May 19, 2022, Moore Family First filed suit against the
Appellees, seeking declaratory relief confirming Fain Property’s removal and
Moore Family First’s appointment as general partner of the Limited
Moore Family First Property Company, LLC v. Fain Property Page 3 Partnership. Moore Family First also sought injunctive relief to prevent Fain
Property from interfering with Moore Family First’s partnership operations.
Appellees answered and also filed a counterclaim against Moore Family First
and added Katherine as a third-party defendant. Appellees’ suit included
claims for fraud, breach of the Partnership Agreement, breach of fiduciary
duty, and tortious interference with existing contracts. Appellees further
sought a declaratory judgment to invalidate the removal of Fain Property and
appointment of Moore Family First as general partner of the Limited
Partnership and to invalidate the termination of the management
agreements between the Limited Partnership and Quail Ridge.
On October 3, 2022, Appellees filed a motion for summary judgment on
their breach of contract and declaratory judgment claims. After a hearing,
the trial court granted Appellees’ motion for summary judgment on
December 15, 2022. On February 22, 2023, Appellees filed a motion for
partial summary judgment on the cancellation of the contracts between the
Limited Partnership and Quail Ridge. The parties reached a Rule 11
Agreement that granted relief on the Quail Ridge contracts but provided that
if Moore Family First successfully appealed the December 15, 2022, order
granting summary judgment, the Quail Ridge ruling would automatically be
reversed and be of no further force and effect. On June 9, 2023, the trial
Moore Family First Property Company, LLC v. Fain Property Page 4 court signed an order granting the Appellees’ Partial Motion for Summary
Judgment in accordance with the Rule 11 agreement.
The trial court signed a final judgment on June 3, 2024, declaring that
the actions of Moore Family First and Katherine in attempting to remove
Fain Property as general partner of the Limited Partnership were
inconsistent and not authorized by the Partnership Agreement and that, as a
result, Fain Property remains as the general partner of the Limited
Partnership. The final judgment also declared that the actions of Moore
Family First and Katherine in attempting to appoint Moore Family First as
general partner of the Limited Partnership were inconsistent and not
authorized by the Partnership Agreement and that, as a result, Moore
Family First is not the general partner of the Limited Partnership. The trial
court’s judgment further granted Appellees’ claims for declaratory relief
relating to the Quail Ridge contracts. Moore Family First and Katherine
filed a motion for new trial that was overruled by operation of law. This
appeal ensued.
Issues One and Two
In the first and second issues, Moore Family First argues that the trial
court erred by granting summary judgment in favor of Appellees.
Moore Family First Property Company, LLC v. Fain Property Page 5 Standard of Review and Applicable Law
“We review an order granting summary judgment de novo, taking as
true all evidence favorable to the nonmovant and indulging every reasonable
inference in the nonmovant’s favor.” JLB Builders, L.L.C. v. Hernandez, 622
S.W.3d 860, 864 (Tex. 2021) (citing Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005)). “When reviewing a traditional motion for
summary judgment, we must determine whether the movant met its burden
to establish that no genuine issue of material fact exists and that the movant
is entitled to judgment as a matter of law.” James v. Young, No. 10-17-00346-CV, 2018 WL 1631636, at *2 (Tex. App.—Waco Apr. 4, 2018, no pet.)
(mem. op.) (citing TEX. R. CIV. P. 166a(c); Sw. Elec. Power Co. v. Grant, 73
S.W.3d 211, 215 (Tex. 2002)). Once the movant produces sufficient evidence
to establish the right to summary judgment, the nonmovant must present
evidence sufficient to raise a fact issue. Centeq Realty, Inc. v. Siegler, 899
S.W.2d 195, 197 (Tex. 1995).
The primary concern of a court in construing a contract is to ascertain
and give effect to the parties’ intentions as expressed in the writing itself. El
Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805
(Tex.2012); Nat’l. Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc.,
907 S.W.2d 517, 520 (Tex. 1995). To discern the parties’ intent, we must
Moore Family First Property Company, LLC v. Fain Property Page 6 examine and consider the entire writing in an effort to harmonize and give
effect to all of the provisions of the contract so that none of the provisions will
be rendered meaningless. El Paso Field Servs., 389 S.W.3d at 805. We are to
look at the contract as a whole in light of the circumstances present when the
contract was entered. Horseshoe Bay Resort, Ltd, v. CRVI CDP Portfolio,
LLC, 415 S.W.3d 370, 376 (Tex. App.—Eastland 2013, no pet.).
Removal of Fain Property
In the first issue, Moore Family First contends that the trial court
erred in determining that the Partnership Agreement did not authorize
Katherine to remove Fain Property as general partner. The Partnership
Agreement for the Limited Partnership provided for the removal of a general
partner in Section 8.5. That section states:
Notwithstanding any provision herein to the contrary, a General
Partner may not be removed unless there is one remaining
General Partner. The Limited Partners may remove the General
Partner upon the vote of 100% of the then outstanding ownership
interest of the Limited Partners. Written notice of such
determination setting forth the effective date of such removal
shall be served upon the General Partner, and as of the effective
date, shall terminate all of such Person’s rights and powers as
General Partner hereunder, except for any accrued rights to
receive payments authorized by Article XI. hereunder. Such
Partner shall thereafter cease to be the General Partner, and the
removed General Partner shall automatically become a Limited
Partner, and such removed General Partner’s partnership
interest shall be converted to a limited partnership interest. The
remaining General Partners shall continue the business of the
Partnership. Notwithstanding the foregoing, if a General Partner
Moore Family First Property Company, LLC v. Fain Property Page 7
is in material breach of such General Partner’s obligations and
does not cure, or commence and diligently prosecute the curing of,
such breach within 90 days after notice thereof by any of the
Limited Partners, or if he has committed any act or omission of
fraud or malfeasance to the injury of the Partnership, then such
General Partner may be removed upon agreement of 51% of the
then outstanding ownership interest of the Limited Partners.
Moore Family First contends that Katherine properly followed
Section 8.5 when she removed Fain Property as general partner. Appellees
argue that Section 8.5 of the Partnership Agreement precluded Katherine’s
removal of Fain Property as general partner because the first sentence states
that “a General Partner may not be removed unless there is one remaining
General Partner,” and it is undisputed that Fain Property was the sole
general partner at the time of Katherine’s purported removal of Fain
Property.
Moore Family First maintains that Section 8.5 provides for two
different removal standards: (1) removal without cause, and (2) removal with
cause. We agree. However, Moore Family First argues that the first
sentence of Section 8.5 that states, “[n]otwithstanding any provision herein to
the contrary, a General Partner may not be removed unless there is one
remaining General Partner,” applies only to removal without cause. We
disagree that the first sentence of Section 8.5 applies only to removal without
cause.
Moore Family First Property Company, LLC v. Fain Property Page 8
“Superordinating” language, signaled by notwithstanding, shows which
provision prevails in the event of a clash but does not necessarily denote a
clash of provisions. Horseshoe Bay Resort, 415 S.W.3d at 384. When parties
use the clause “notwithstanding anything to the contrary contained herein”
in a paragraph of their contract, they contemplate the possibility that other
parts of their contract may conflict with that paragraph, and they agree that
this paragraph must be given effect regardless of any contrary provisions of
the contract. Helmerich & Payne Int’l Drilling Co. v. Swift Energy Co., 180
S.W.3d 635, 643 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Therefore,
by using the language, “Notwithstanding any provision herein to the
contrary, a General Partner may not be removed unless there is one
remaining General Partner,” the parties intended that Section 8.5 be given
effect in the event of a conflict with other provisions of the Partnership
Agreement. See id.
Moore Family First contends that the requirement for a remaining
general partner applies only to removal without cause. Section 8.5 provides
that removal of a general partner without cause requires a vote of 100% the
outstanding ownership interests of the limited partners. Upon removal
without cause, the removed general partner shall automatically become a
limited partner, and the remaining general partners shall continue the
Moore Family First Property Company, LLC v. Fain Property Page 9 business of the Limited Partnership. Immediately following the process for
removal without cause, Section 8.5 states “[n]otwithstanding the foregoing”
and provides the process for removal with cause of a general partner.
Moore Family First argues that the phrase “[n]otwithstanding the
foregoing” negates the requirement of a remaining general partner before
removal with cause. The second “notwithstanding” phrase is followed by the
process for removal with cause when the general partner is in material
breach of the general partner’s obligations or if he has committed any act or
omission of fraud or malfeasance to the injury of the Limited Partnership.
Removal with cause requires an agreement of 51% of the then outstanding
ownership interests of the limited partners. Reading Section 8.5 in its
entirety, the second “[n]otwithstanding the foregoing” phrase is referring to
the process for removal without cause provision. Section 8.5 requires 100%
agreement of the limited partners to remove a general partner without cause,
but “notwithstanding” the foregoing requirement of 100%, a general partner
may be removed with cause by agreement of 51% of the limited partners. We
conclude that the superordinating language requiring a remaining general
partner before a general partner may be removed in the first sentence of
Section 8.5 applies to both removal without cause and removal with cause.
See id. Therefore, in order to remove Fain Property as general partner in
Moore Family First Property Company, LLC v. Fain Property Page 10 accordance with the Partnership Agreement, a remaining general partner
was required.
Moore Family First argues that Katherine complied with Section 8.5’s
requirement of at least one remaining general partner because she appointed
Moore Family First as general partner at the same time she voted her 100%
limited partner interest to remove Fain Property as general partner.
Section 7.2 of the Partnership Agreement applies to successor general
partners. That section states that:
If a General Partner, serving alone, ceases to serve for any reason
and there are no Designated Successor General Partners
remaining, then without amendment to this Agreement, the
remaining Limited Partners may continue the business of the
Partnership, and may, by unanimous vote of the then
outstanding ownership interest of the Limited Partners,
excluding from such election any limited partnership interest
controlled by the General Partner who brought about such
withdrawal or cessation of service, appoint one or more new
General Partners effective as of the date of withdrawal or
cessation of service of the withdrawing Partner.
In order for Section 7.2 to be applicable, Fain Property would first have to be
removed as general partner. As previously discussed, Fain Property could
not be removed without a remaining general partner. Thus, Section 7.2 did
not allow Katherine to appoint Moore Family First as general partner in
order to satisfy the requirements of a remaining general partner under
Section 8.5.
Moore Family First Property Company, LLC v. Fain Property Page 11
Moore Family First also argues that an interpretation of Section 8.5
requiring a remaining general partner fails to harmonize other provisions of
the Partnership Agreement and renders them meaningless. Article 11 of the
Partnership Agreement provides for the dissolution and termination of the
Limited Partnership. Section 11.1(b) provides that the Limited Partnership
shall be immediately dissolved upon the withdrawal or removal of a general
partner unless the Limited Partnership is continued pursuant to Article 11.
Section 11.2 outlines how to prevent a dissolution under Section 11.1(b).
Throughout the Partnership Agreement, it is contemplated that there could
be more than one general partner. Nothing in Section 11.1(b) conflicts with
the requirement of Section 8.5 that there must be a remaining general
partner before removal. Section 11.1(b) recognizes that a general partner
may be removed, in accordance with Section 8.5, but does not override the
requirements of Section 8.5.
Moore Family First further argues that Appellees’ interpretation of
Section 8.5 prevents a sole general partner from ever being removed for cause
and renders the with cause removal process in Section 8.5 meaningless. As
stated, the Partnership Agreement contemplates multiple general partners.
Therefore, the with cause removal process would not be rendered
meaningless in the event there were multiple general partners.
Moore Family First Property Company, LLC v. Fain Property Page 12
Dr. Fain created the Limited Partnership to transfer wealth while
minimizing estate tax liability. He intended to control the assets before
passing them on to his family. The Partnership Agreement contemplates
multiple general partners even though Fain Property was the sole general
partner at the formation of the Limited Partnership. Considering the
Partnership Agreement as a whole in light of the circumstances present when
it was formed, we conclude that the superordinating language in the first
sentence of Section 8.5 does not allow the removal of a general partner unless
there is one remaining general partner. See Horseshoe Bay Resort, 415
S.W.3d at 376. Therefore, the Partnership Agreement did not authorize
Katherine to remove Fain Property as general partner. We overrule the first
issue.
Appointment of Moore Family First as General Partner
In the second issue, Moore Family First maintains that the trial court
erred in determining that Katherine could not appoint Moore Family First as
general partner. It argues that Katherine properly appointed Moore Family
First as general partner pursuant to Section 7.2 of the Partnership
Agreement.
As previously stated, Section 7.2 of the Partnership Agreement applies
to successor general partners. That section states that the limited partners
Moore Family First Property Company, LLC v. Fain Property Page 13 may appoint one or more new general partners when a general partner,
serving alone, ceases to serve for any reason. In order for Section 7.2 to be
applicable, Fain Property would have to be properly removed under Section
8.5 of the Partnership Agreement. Because the Partnership Agreement did
not authorize Katherine to remove Fain Property as general partner, she
could not utilize Section 7.2 to appoint Moore Family First as the successor
general partner.
Section 10.3 provides that additional general partners shall not be
admitted to the Limited Partnership without the consent of all partners. It is
undisputed that Fain Property did not consent to the admission of Moore
Family First as a general partner. Moore Family First argues that Fain
Property’s consent was not required for Katherine to appoint Moore Family
First as general partner citing, Great Sw. Reg’l Ctr., LLC v. ACSWD, LP as
authority. No. 14-18-00689-CV, 2020 WL 20593, at *1 (Tex. App.—Houston
[14th Dist.] Jan. 14, 2020, no pet.).
In that case, Great Southwest Regional Center, LLC organized ACSWD
as a limited partnership to serve as the new commercial enterprise for a
saltwater disposal project, with Great Southwest serving as ACSWD’s
general partner. Id. The sole limited partner of ACSWD removed Great
Southwest as ACSWD’s general partner and appointed a new general
Moore Family First Property Company, LLC v. Fain Property Page 14 partner. Id. at *6. In Great Southwest, the partnership agreement provided
that upon the removal of a general partner all remaining partners may agree
in writing to continue the Partnership and appoint a new successor general
partner. Id. at *7. Great Southwest argued that the partnership agreement
required its consent as general partner to admit a new general partner. The
court noted that the partnership agreement provided that “after the general
partner’s removal, the remaining partners may agree to appoint a new
general partner.” Id. at *8. The court held that after Great Southwest was
removed as general partner, the remaining sole limited partner could appoint
a successor general partner. Id.
Great Southwest is distinguishable from the case before us because the
court determined that Great Southwest was removed as general partner. See
id. In this case, Fain Property was not properly removed as the general
partner. Great Southwest does not support the conclusion that Katherine
was authorized to appoint Moore Family First as general partner without the
consent of Fain Property in contravention of the requirements of the
Partnership Agreement. See id.
We conclude that the Partnership Agreement did not authorize
Katherine’s appointment of Moore Family First as general partner. We
overrule the second issue.
Moore Family First Property Company, LLC v. Fain Property Page 15
Issue Three
In the third issue, Moore Family First argues, in the alternative, that
the trial court erred by denying its motion for new trial. Moore Family First
states that the trial court limited its summary judgment, which forms the
basis of the final judgment, to the sole issue of contract interpretation. Moore
Family First contends that if the trial court’s judgment was based on any
evidentiary issues, it abused its discretion by denying the motion for new
trial. Having overruled Moore Family First’s first and second issues based
solely on contract interpretation, we need not address the third issue. See
Tex. R. App. P. 47.1.
Conclusion
We affirm the trial court’s judgment.
LEE HARRIS
Justice
OPINION DELIVERED and FILED: August 27, 2026
Before Chief Justice Johnson,
Justice Smith, and
Justice Harris
Affirmed
CV06
Moore Family First Property Company, LLC v. Fain Property Page 16