Hector Gonzalez v. Atenea Capital Markets Fund, LP ( 2015 )


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  •                              Fourth Court of Appeals
    San Antonio, Texas
    MEMORANDUM OPINION
    No. 04-14-00614-CV
    Hector GONZALEZ,
    Appellant
    v.
    ATENEA CAPITAL MARKETS FUND, LP,
    Appellee
    From the 57th Judicial District Court, Bexar County, Texas
    Trial Court No. 2012-CI-13872
    Honorable Larry Noll, Judge Presiding
    Opinion by:      Karen Angelini, Justice
    Sitting:         Sandee Bryan Marion, Chief Justice
    Karen Angelini, Justice
    Jason Pulliam, Justice
    Delivered and Filed: October 28, 2015
    AFFIRMED
    This is an appeal stemming from a dispute regarding an alleged investment scam.
    Appellee, Atenea Capital Markets Fund, LP (“Atenea”), brought suit against several of its
    founders, including appellant, Hector Gonzalez, for multiple causes of action. In three issues on
    appeal, Gonzalez argues Atenea did not have standing to sue, Atenea’s claims were not ripe at the
    time the lawsuit was filed, and Atenea’s recovery violates the one-satisfaction rule. We affirm the
    trial court’s judgment.
    04-14-00614-CV
    BACKGROUND
    Atenea is an investment fund that sued seven of its founders, including Gonzalez, alleging
    they engaged in a “Ponzi-type” scheme by failing to properly invest money raised by the fund and
    intentionally misrepresenting how funds were being utilized. According to Atenea, the defendants,
    acting as financial advisers on behalf of Atenea, told investors that their monies were being
    properly invested. The defendants provided investors with certificates, promising a return on the
    investments, and portfolios, detailing the stocks and other investments to which their monies were
    allegedly contributed. However, instead of investing the funds, the defendants embezzled over
    five million dollars of investment funds. As time passed, investors never received their dividends
    or principals as provided by the certificates. As a result, Atenea sued, contending it lost investment
    money and now faces potential liability from investors who were deceived by the defendants’
    alleged conduct.
    In its original petition, Atenea asserted the following causes of action: breach of fiduciary
    duty, fraud, negligent misrepresentation, tortious interference with a contract, breach of contract,
    civil conspiracy, and failure to provide an accounting. Atenea also sought a declaratory judgment,
    requesting the trial court to make a determination to what extent certain “purported documents”
    were legal and the effect of those documents with respect to Atenea. Gonzalez filed a general
    denial, denying all the allegations.
    During pretrial discovery, Gonzalez did not comply with several discovery requests, and
    consequently, the trial court imposed death penalty sanctions against Gonzalez, striking
    Gonzalez’s pleadings and finding liability against Gonzalez. After a bench trial concerning the
    issue of damages, the trial court rendered a final judgment, granting liability against Gonzalez with
    regard to Atenea’s claims of fraud, negligent misrepresentation, tortious interference with a
    contract, breach of contract, civil conspiracy, and failure to provide an accounting. The judgment
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    further imposed liability against Gonzalez & Duarte, LLC, one of the other listed defendants in
    Atenea’s original petition.     It then awarded Atenea monetary damages in the amount of
    $4,224,426.00, specifying both Gonzalez and Gonzalez & Duarte, LLC were responsible for the
    amount. Atenea’s remaining claims against the other defendants were subsequently non-suited.
    Gonzalez then perfected this appeal.
    ANALYSIS
    In his first two issues on appeal, Gonzalez argues the trial court lacked subject matter
    jurisdiction over Atenea’s suit. Specifically, Gonzalez contends Atenea lacked standing to assert
    the claims against him and Atenea’s claims were not ripe at the time the lawsuit was filed. In his
    last issue, Gonzalez argues the trial court erred in awarding Atenea duplicative damages in
    violation of the one-satisfaction rule.
    Subject Matter Jurisdiction
    Subject matter jurisdiction is essential to the authority of a court to decide a case. Tex.
    Ass’n of Bus. v. Tex. Air Control Bd., 
    852 S.W.2d 440
    , 446 (Tex. 1993). The plaintiff bears the
    burden of alleging facts that affirmatively demonstrate a court’s jurisdiction to hear a case. 
    Id. When considering
    jurisdictional issues for the first time on appeal, we will construe the petition in
    favor of the plaintiff and look to the pleader’s intent. 
    Id. A. Standing
    Standing is a necessary component of a court’s subject matter jurisdiction. 
    Id. at 445;
    R &
    R White Family Ltd. Partnership v. Jones, 
    182 S.W.3d 454
    , 458 (Tex. App.—Texarkana 2006, no
    pet.). A plaintiff must have standing for the court to have subject matter jurisdiction to decide the
    merits of the claims. Austin Nursing Ctr., Inc. v. Lovato, 
    171 S.W.3d 845
    , 848 (Tex. 2005); State
    Bar of Tex. v. Gomez, 
    891 S.W.2d 243
    , 245 (Tex. 1994); Tex. Ass’n of 
    Bus., 852 S.W.2d at 446
    .
    Standing is never presumed and is an issue that may be raised for the first time on appeal; it may
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    not be waived by the parties. Tex. Ass’n of 
    Bus., 852 S.W.2d at 443
    –45. Without standing, a court
    lacks subject matter jurisdiction to hear the case. 
    Lovato, 171 S.W.3d at 849
    ; Tex. Ass’n of 
    Bus., 852 S.W.2d at 443
    –44.
    Standing focuses on whether a party has a sufficient relationship with a lawsuit so as to
    have a justiciable interest in its outcome; thus, standing focuses on the question of who may bring
    a lawsuit. 
    Lovato, 171 S.W.3d at 849
    ; Patterson v. Planned Parenthood of Houston and Se. Tex.,
    Inc., 
    971 S.W.2d 439
    , 442 (Tex. 1998). The Texas Supreme Court has noted that “[t]he general
    test for standing in Texas requires that there ‘(a) shall be a real controversy between the parties,
    which (b) will be actually determined by the judicial declaration sought.’” Nootsie Ltd. v.
    Williamson Cty. Appraisal Dist., 
    925 S.W.2d 659
    , 662 (Tex. 1996) (quoting Tex. Ass’n of 
    Bus., 852 S.W.2d at 446
    ). A party has standing to sue when it is personally aggrieved by an alleged
    wrong. 
    Id. at 661.
    A party does not have standing to sue if it does not have a legal right belonging
    to it. Nobles v. Marcus, 
    533 S.W.2d 923
    , 927 (Tex. 1976).
    According to Gonzalez, Atenea filed its lawsuit “on behalf of investors who may
    potentially sue it” when it lacked associational standing to bring such a challenge against him.
    Specifically, Gonzalez contends Atenea failed to meet two prongs of the three-prong associational
    standing test established by the United States Supreme Court and adopted by the Texas Supreme
    Court. See Hunt v. Wash. State Apple Adver. Comm’n, 
    432 U.S. 333
    , 343, (1977) (setting forth
    three prong test to determine whether association has standing); Tex. Ass’n of 
    Bus., 852 S.W.2d at 447
    (adopting associational standing test set forth in Hunt). Under the associational standing test,
    an association has standing to bring a lawsuit on behalf of its members when (1) its members
    would otherwise have standing to sue in their own right, (2) the interests it seeks to protect are
    germane to the organization’s purpose, and (3) neither the claim asserted nor the relief requested
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    04-14-00614-CV
    requires the participation in the lawsuit of each of the individual members. 
    Hunt, 432 U.S. at 343
    (1977); Texas Ass’n of 
    Bus., 852 S.W.2d at 447
    .
    In response, Atenea argues Gonzalez misstates the nature of the lawsuit because it did not
    sue Gonzalez on behalf of investors. Instead, Atenea contends it sued Gonzalez on behalf of itself,
    a party that not only had been wronged and suffered damages, but also was the only proper party
    to file a lawsuit. We agree with Atenea.
    Although Gonzalez is correct that the doctrine of associational standing applies when an
    organization sues on behalf of its members, the doctrine is not applicable in this case. Here, Atenea
    was not suing Gonzalez on behalf of investors. Nowhere in its petition does Atenea allege it is
    suing Gonzalez on behalf of investors. Instead, Atenea alleges (1) it was in a fiduciary relationship
    with Gonzalez and Gonzalez breached his fiduciary duty by failing to invest funds; (2) Gonzalez
    interfered with its business by obtaining monies through improper activities; (3) Gonzalez
    deprived it of monies that were provided to it for investment purposes; and (4) it made a written
    demand for an accounting of the funds, which Gonzalez failed to provide. Atenea argues that as a
    result of Gonzalez’s actions, it lost investment income. When there is damage to a business entity’s
    worth, the right of recovery is that entity’s right alone; individual stockholders and employees have
    no separate, independent right of action for injuries suffered by the business entity. See Nauslar
    v. Coors Brewing Co., 
    170 S.W.3d 242
    , 250–51 (Tex. App.—Dallas 2005, no pet.) (pointing out
    that right of recovery for injuries to partnership that diminishes partnership’s value is partnership’s
    right alone); see also Wingate v. Hajdik, 
    795 S.W.2d 717
    , 719 (Tex. 1990) (stating claim against
    defendant for misappropriating corporate assets indisputably belongs to corporation);
    Fredericksburg Indus., Inc. v. Franklin Int’l, Inc., 
    911 S.W.2d 518
    , 520 (Tex. App.—San Antonio
    1995, writ denied) (holding that cause of action for damages against corporation belonged to
    corporation). Here, Atenea suffered a direct injury from the alleged harm to the investment fund’s
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    04-14-00614-CV
    worth, and as a result, the right of recovery is Atenea’s alone. See 
    Wingate, 795 S.W.2d at 719
    ;
    
    Nauslar, 170 S.W.3d at 250
    –51; 
    Franklin, 911 S.W.2d at 520
    . Accordingly, after construing the
    petition in favor of Atenea, we conclude Atenea was personally aggrieved by an alleged harm. See
    
    Nootsie, 925 S.W.2d at 661
    ; 
    Nauslar, 170 S.W.3d at 250
    –51. Thus, we hold Atenea has standing
    to pursue and recover on the asserted causes of action.
    B. Ripeness
    Like standing, ripeness is an element of subject matter jurisdiction, and thus, it is subject
    to a de novo review. Robinson v. Parker, 
    353 S.W.3d 753
    , 755 (Tex. 2011); Mayhew v. Town of
    Sunnyvale, 
    964 S.W.2d 922
    , 928–29 (Tex. 1998). The ripeness doctrine prevents lawsuits
    involving “uncertain or contingent future events that may not occur as anticipated, or indeed may
    not occur at all.” Perry v. Del Rio, 
    66 S.W.3d 239
    , 249 (Tex. 2001). To determine whether a case
    is ripe for review, courts consider “whether, at the time a lawsuit is filed, the facts are sufficiently
    developed ‘so that an injury has occurred or is likely to occur, rather than being contingent or
    remote.’” Waco Indep. Sch. Dist. v. Gibson, 
    22 S.W.3d 849
    , 851–52 (Tex. 2000) (quoting
    
    Patterson, 971 S.W.2d at 442
    ). A case is not ripe when its resolution depends on hypothetical or
    contingent facts or upon events that have not yet come to pass. 
    Patterson, 971 S.W.2d at 442
    .
    In his second issue, Gonzalez contends Atenea’s claims are not ripe for judicial review.
    Similar to his standing argument, Gonzalez argues Atenea’s lawsuit is an attempt to bring a lawsuit
    on behalf of “potential investor litigants,” and because no investors have filed suit against Atenea
    at this time, Atenea’s lawsuit is not ripe. In response, Atenea argues the basis of its lawsuit is
    against Gonzalez for misappropriating funds and thereby depriving it of investment monies.
    Atenea argues that because such monies have been embezzled, its lawsuit is ripe for review.
    Again, we agree with Atenea.
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    Here, in its petition, as the basis for each of its causes of action, Atenea pleads facts to
    show that an injury has already occurred. See 
    Gibson, 22 S.W.3d at 851
    –52; 
    Patterson, 971 S.W.2d at 442
    . According to Atenea, it lost investment funds as a result of Gonzalez’s and the
    other defendants’ actions. The loss of investment funds is not hypothetical or contingent on facts
    or upon events that have not yet come to pass. See 
    Gibson, 22 S.W.3d at 851
    –52; 
    Patterson, 971 S.W.2d at 442
    . Rather, it has already occurred. Thus, after construing the petition in favor of
    Atenea, we hold Atenea asserted claims ripe for determination. See 
    Gibson, 22 S.W.3d at 851
    –
    52; 
    Patterson, 971 S.W.2d at 442
    .
    One-Satisfaction Rule
    In his last issue, Gonzalez contends the trial court violated the one-satisfaction rule by
    awarding “both tort damages and contract damages for a single alleged injury.” Specifically,
    Gonzalez contends Atenea did not elect a remedy between its overlapping claims, and as a result,
    Atenea received a double recovery because it was awarded mental and exemplary damages on its
    tort claims and attorney’s fees on its contract claim.
    The one-satisfaction rule prohibits a plaintiff from recovering more than once for a single
    injury. Tony Gullo Motors I, L.P. v. Chapa, 
    212 S.W.3d 299
    , 303 (Tex. 2006); Crown Life Ins.
    Co. v. Casteel, 
    22 S.W.3d 378
    , 390 (Tex. 2000). This rule applies when multiple defendants
    commit the same act as well as when multiple defendants commit technically different acts that
    result in a single injury. 
    Casteel, 22 S.W.3d at 390
    . If a plaintiff pleads alternate theories of
    liability, a judgment awarding damages on each alternate theory may only be upheld if the theories
    depend on separate and distinct injuries and if separate and distinct damages findings are made as
    to each theory. See Birchfield v. Texarkana Mem’l Hosp., 
    747 S.W.2d 361
    , 367 (Tex. 1987).
    However, if a party seeks recovery under two or more alternate theories of recovery for a single
    injury, then that party must elect under which remedy he wishes the court to enter a judgment
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    04-14-00614-CV
    before the judgment is rendered. Star Houston, Inc. v. Shevack, 
    886 S.W.2d 414
    , 422 (Tex. App.—
    Houston [1st Dist.] 1994), writ denied per curiam, 
    907 S.W.2d 452
    (Tex. 1995). If the prevailing
    party fails to make that election, then the trial court should use the findings affording the greater
    recovery and render judgment accordingly. 
    Birchfield, 747 S.W.2d at 367
    . If the trial court fails
    to do so, the appellate court must reform the trial court’s judgment to effect such an election. Star
    
    Houston, 886 S.W.2d at 423
    .
    Here, Atenea pleaded several causes of action against Gonzalez and the other defendants;
    however, its lawsuit was predicated on one injury: loss of investment income. Nevertheless, in its
    pleading, Atenea did not distinguish between the damages it suffered as a result of each of its
    claims. Rather, it presented its damages generally, stating Gonzalez and the other defendants
    controlled $5,000,168.00. After a bench trial on the issue of damages, the trial court rendered a
    final judgment imposing a recovery of damages against Gonzalez and Gonzalez & Duarte, LLC
    jointly and severally. The judgment does not specify whether the damages awarded are based on
    one or multiple theories of recovery as Gonzalez suggests, and the appellate record does not
    include a copy of the reporter’s record. Without a copy of a reporter’s record, we must presume
    the evidence supports the trial court’s judgment—that the trial court’s award of damages is a single
    recovery predicated on one theory of liability. See Bryant v. United Shortline Inc. Assurance
    Servs., N.A., 
    972 S.W.2d 26
    , 31 (Tex. 1998); Rittenhouse v. Sabine Valley Foundation, Inc., 
    161 S.W.3d 157
    , 165 (Tex. App.—Texarkana, no pet.). Accordingly, because Gonzalez failed to
    properly secure a reporter’s record, we presume that the evidence supported the damages awarded
    and the trial court rendered judgment accordingly. See 
    Bryant, 972 S.W.2d at 31
    ; 
    Rittenhouse, 161 S.W.3d at 165
    . Therefore, we overrule Gonzalez’s last issue.
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    04-14-00614-CV
    CONCLUSION
    Based on the foregoing, the trial court’s judgment is affirmed.
    Karen Angelini, Justice
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