Petition For Review To The Texas Supreme Court

FILED
15-0812
10/20/2015 8:25:51 AM
tex-7444817
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK
Case No.
___________________________________________
IN THE SUPREME COURT OF TEXAS

______________________________________________
FRANCIS W.S. CHAN,
Petitioner,
V.
J. SHELBY SHARPE, HENRY CHANG, KAREN CHANG
& THE LAW OFFICES OF J. SHELBY SHARPE,
A PROFESSIONAL CORPORATION,
Respondents.
_______________________________________________
On Petition for Review
from the Second Court of Appeals, Fort Worth, Texas, No. 02-14-00286-CV
(48TH District Court of Tarrant County, Texas, No. 48-243228-10)
________________________________________________________________
PETITION FOR REVIEW
________________________________________________________________
Mayur Amin
Texas Bar No. 00790227
The Amin Law Firm
2131 N. Collins- Suite 433-610
Arlington, Texas 76011
Ph. 817-253-6711
Fax 1-888-580-6175
Email: amin@theaminlawfirm.com
Counsel for Petitioner
IDENTITY OF PARTIES & COUNSEL
Plaintiff,
Appellant,
Petitioner:
Represented By:
Mr. Francis W. S. Chan

Mayur Amin
TX Bar No. 00790227
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
Trial and Appellate Counsel
Defendants,
Appellees,
Respondents:
Represented By:
Mr. James Shelby Sharpe &

The Law Office of J. Shelby Sharpe,
A Professional Corporation
John W. Proctor
TX Bar No. 16347300
Brown Dean Wiseman Proctor Hart & Howell
306 W. 7th Street, Suite 200
Fort Worth, Texas 76102
Ph. 817-332-1391
Fax 817-870-2427
Email: jproctor@browndean.com
Defendants,
Appellees,
Respondents:
Represented By:
Mr. Henry Chang &

Mrs. Karen Chang
Marshall M. Searcy, Jr.
TX Bar No. 17955500
Kelly Hart & Hallman, L.L.P.
201 Main Street, Suite 2500
Ph. 817-332-2500
Fax 817-878-9280
Email: marshall.searcy@kellyhart.com
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL...i
TABLE OF CONTENTS..iii
INDEX OF AUTHORITIES..v
ABBREVIATIONS.....viii
STATEMENT OF THE CASE.ix
STATEMENT OF JURISDICTION..x
ISSUES PRESENTED...xi
The Due Process clauses of both the Texas and United States Constitutions
entitle a person to an impartial and disinterested tribunal in civil cases. Did
the court of appeals (COA) violate Chans fundamental rights by
rendering a take-nothing judgment supported by an opinion that (I)
repeatedly transgresses the applicable standard of review, (II) contains
numerous false assertions or implications about Chans case, (III)
prejudicially omits more than a dozen of Chans arguments, (IV) time and
again turns a blind eye to Chans evidence, (V) conflicts with precedent set
by many Texas Supreme Court and other appellate cases, (VI) construes
statutes in a distorted fashion, and (VII) contains several other errors,
omissions or irregularities?
STATEMENT OF FACTS.........1
SUMMARY OF THE ARGUMENT.....8
ARGUMENT......9
I.
On the first seven pages of its opinion alone, the COA transgressed
the applicable standard of review seven times to cast doubt on Chans case
where no doubt should have been cast. 1 By doing so, it revealed a bias
1
Chan, No.02-14-00286-CV at *3-7.
iii
from
the
outset...9
II.
The COA repeatedly makes false assertions or implications about
Chans case. An impartial court would have no reason to do this as it
could rely only on truth as a basis to render opinion and
judgment.....10
III. The COA repeatedly relied only on Respondents arguments to
formulate opinion on a particular issue while knowingly omitting from its
analysis and discussion Chans superseding or countervailing arguments
on the very same issue....12
IV. It was disingenuous for the COA to repeatedly turn a blind eye to
Chans evidence and then contend that summary judgment was proper
because there is no evidence to support a particular element of his
claim...15
V.
In order to affirm judgment in favor of Respondents, the COA had to
repeatedly ignore important precedent. Its decision conflicts with prior
decisions of another court of appeals or the Texas Supreme Court...18
VI. The COA construes Tex. Bus. Orgs. Code 21.223-21.224 in such
a distorted fashion so as to (A) prematurely analyze the burden of proof
issue on actual fraud in the context of Tex. R. Civ. P. 166a(i) and (B)
hold that corporate officers are shielded from tort liability merely because
they also are shareholders of the corporation.21
VII. The COAs opinion contains six other errors or irregularities which
further contribute to the appearance and reality that there was a complete
lack of neutrality in the adjudicative proceedings below...22
PRAYER...23
CERTIFICATIONS......24
APPENDIX...END
iv
INDEX OF AUTHORITIES
STATUTES:
Tex. Bus. & Com. Code 24.001 et seq. (TUFTA)...passim
Tex. Bus. Orgs. Code 21.223......x, 21

Tex. Bus. Orgs. Code 21.224..x, 21
Tex. Bus. Orgs. Code 21.563(c)(2)....14
Tex. R. Civ. P. 47(a)x, 19

Tex. R. Civ. P. 93.....19
Tex. R. Civ. P. 166a(f).18
Tex. R. Civ. P. 166a(i) .....21
Tex. R. Evid. 601(a)..18
CASES:
Blackthorne v. Bellush,
61 S.W.3d 439 (Tex.App.-San Antonio 2001, no pet.).x, 19
Chan v. Sharpe et al., No.02-14-00286-CV at *3-7 (Tex.App.Fort Worth
August 26, 2013, pet. filed.) (mem. op.)passim
Dallas Fire Insurance Co. v. Texas Contractors Surety,
128 S.W.3d 279 (Tex. App.Fort Worth 2004), judgment reversed on other
grounds, 159 S.W.3d 895 (Tex. 2004)....x, 18-19
v
Farah v. Mafrige & Kormanik, P.C.,

927 S.W.2d 663 (Tex.App.-Houston [1st Dist.] 1996, no writ)....x, 18
Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754 (Tex. 2007)......9
Horizon/CMS Healthcare Corp. v Auld,
34 S.W.3d 887 (Tex. 2000)...x, 19
James v. Comm'n for Lawyer Discipline,
310 S.W.3d 598 (Tex.App.-Dallas 2010, no pet.)....19
K & G Tool & Serv. Co. v. G & G Fishing Tool Serv.,
314 S.W.2d 782 (Tex.1958).....21
Kinzbach Tool Co. v. Corbett-Wallace Corp.,
160 S.W.2d 509 (Tex. 1942)....14
Lassiter v. Alabama A & M Univ.,
28 F.3d 1146, 1151 (11th Cir. 1994) (en banc).....8
Lunsford v. Morris,
746 S.W.2d 471 (Tex.1988).....19
MacDonald v. Follett,
180 S.W.2d 334 (Tex. 1944).x, 18
Malley v. Briggs,
475 U.S. 335 (1986)...........................................................................8
Marshall v. Jerrico, Inc.,
446 U.S. 238 (1980)...x, 9
Metzger v. Sebek,
892 S.W.2d 20 (Tex. App. - Houston [1st Dist.] 1994, writ denied).x, 9
Nixon v. Mr. Prop. Mgmt. Co.,
690 S.W.2d 546 (Tex. 1985)..9
vi
Pledger v. Schoellkopf,
762 S.W.2d 145 (Tex. 1988).14
Ritchie v. Rupe,
443 S.W.3d 856 (Tex. 2014).14
Stonewall Surplus Lines Ins. Co. v. Drabek,
835 S.W.2d 708 (Tex.App.-Corpus Christi 1992, writ denied)....15
Walker v. Anderson,
232 S.W.3d 899 (Tex.App.-Dallas 2007, no pet.)x, 21
Wolfe v. Devon Energy Prod. Co., LP,
382 S.W.3d 434 (Tex.App.-Waco 2012, pet. denied)...x, 18
Yeaman v. Galveston City Co.,
167 S.W. 710 (Tex. 1914).....14
vii
ABBREVIATIONS
1.
Mr. Sharpe refers to Respondent James Shelby Sharpe.
2.
Sharpe refers to Respondents James Shelby Sharpe and The Law Office
of J. Shelby Sharpe, a Professional Corporation, collectively.
3.
WFFI refers to the corporate defendant, Wan Fu Foods, Inc.
4.
Changs refers to Respondents Henry and Karen Chang, collectively.
6.
Primary defendants refers to the Changs and WFFI, collectively.
7.
Shareholder rights claims refers collectively to Petitioner Chans

underlying dividend, wage, breach of employment contract, and the value
of his shares (e.g. buy-out remedy) claims.
8.
Amin refers to Petitioners trial and appellate counsel.
9.
TUFTA refers to the Texas Uniform Fraudulent Transfers Act which is

the same as Section 24.001 et seq. of the Tex. Bus. & Com. Code.
10.
[App. Tab] refers to documents found in the Appendix.
viii
STATEMENT OF THE CASE

Nature of the Case:
Chan is a shareholder in and was an employee of

corporate defendant WFFI. The Changs are the
majority shareholders in and the controlling officers of
WFFI. Sharpe was an attorney for these persons. Chan
sued Sharpe for legal malfeasance in connection with
the handling of his shareholder rights claims against
WFFI and the Changs. Chan also sued the Changs on
theories of direct, derivative and participatory liability
in connection with these claims.
Trial Court:
48th District Court, Tarrant County, Texas

Honorable David L. Evans
Trial Disposition:
The trial court granted take nothing summary judgment

in favor of all Respondents.
Parties on Appeal:
Plaintiff-Appellant-Petitioner
Francis W.S. Chan
Defendants-Appellees-Respondents
James Shelby Sharpe
The Law Offices of J. Shelby Sharpe, P.C.
Henry Chang
Karen Chang
Court of Appeals:
Second Court of Appeals, Fort Worth, Texas
Disposition:
Affirmed. Chan v. Sharpe et al., No. 02-14-00286-CV

(Tex.App.-Fort Worth August 26, 2015, pet. filed)
(mem. op.) (Per Curiam Opinion per Meier, Gardner,
and Gabriel, JJ.) (Motion for Rehearing denied
September 17, 2015) (Motion for En Banc
Reconsideration denied October 1, 2015)
ix
STATEMENT OF JURISDICTION
This Court has jurisdiction under 22.001, Subsections (a)(2), (a)(3), (a)(6)
& (e) and under 22.225, Subsections (c) and (e) of the Texas Government Code
because (i) there exists an issue of whether the court of appeals violated Chans
fundamental due process rights under both the United States and Texas
Constitutions, (ii) it is necessary to construe 21.223-21.224 of the Tex. Bus.
Orgs. Code and other statutes to determine the case, and (iii) the court of appeals
(COA) opinion conflicts with several other appellate opinions at least as follows:
1.
On the issue of what constitutes due process, it conflicts with
Marshall, 446 U.S. at 242 and Metzger, 892 S.W.2d at 37-38;
2.
On the issue of whether a corporate officer is shielded from tort
liability under 21.223-21.224 of the Tex. Bus. Orgs. Code, it conflicts
with Walker 232 S.W.3d at 918-19;
3.
On the issue of what show affirmatively means under Tex. R. Civ.
Proc. 166a(f), it conflicts with Wolfe, 382 S.W.3d at 449;
4.
On the issue of what constitutes a benefit in the context of the third
element of a breach of fiduciary duty claim, it conflicts with MacDonald,
180 S.W.2d at 338;
5.
On the issue whether or when a tort claim must be brought as a
contract claim, it conflicts with Dallas Fire Insurance Co., 128 S.W.3d at
293 and Farah, 927 S.W.2d at 674;
6.
On the issue of what must be pled to support a TUFTA claim, it
conflicts with the fair notice standard set forth in Tex. R. Civ. Proc. 47(a)
and Horizon, 34 S.W.3d at 896; and
7.
On the issue of whether a TUFTA claim may be abated pending an
outcome on the merits of a claimants underlying tort claims, it conflicts
with Blackthorne, 61 S.W.3d at 443-44.
x
ISSUES PRESENTED
entitle a person to an impartial and disinterested tribunal in civil cases. This
neutrality requirement in adjudicative proceedings safeguards two central
concerns. First, it prevents an unjustified or mistaken deprivation of property.
Second, it promotes participation and dialogue by litigants in the decision
making process. Did the court of appeals (COA) violate Chans fundamental
rights by rendering a take-nothing judgment supported by an opinion that (I)
repeatedly transgresses the applicable standard of review, (II) contains
numerous false assertions or implications about Chans case, (III) prejudicially
omits more than a dozen of Chans arguments, (IV) time and again turns a blind
eye to Chans evidence, (V) conflicts with precedent set by many Texas
Supreme Court and other appellate cases, (VI) construes statutes in a distorted
fashion, and (VII) contains several other errors, omissions or irregularities? 2
Items (I) thru (VII) contains some unbriefed subsections.
xi
TO THE HONORABLE SUPREME COURT OF TEXAS:

The Second District Court of Appeals (COA) affirmed take-nothing
summary judgment in favor of all Respondents. With respect to Petitioner Chans
legal malfeasance claim, the COA affirmed in favor of Sharpe because there
[purportedly] is no evidence on the third element of a breach of fiduciary duty claim.
With respect to Chans direct, derivative, and participatory liability claims against
the Changs, the COA affirmed because there [purportedly] is no evidence of actual
fraud for the Changs personal benefit. Chan requests review because the COA
turned a blind eye to his evidence and arguments. The decision below cannot stand
because it was rendered under circumstances that suggest bias, prejudice or
favoritism.
STATEMENT OF FACTS
1.
WFFI was formed in 1990 for the purpose of owning and operating a
Chinese food restaurant (WFFI). [CR 1225, 1266, 1370, 1392] WFFI issued a
total of 45,000 shares. [CR 1268] Chan invested $60,000.00 in WFFI in exchange
for 10,000 shares of its stock. [CR 1234, 1267] Henry and Karen Chang each also
received 10,000 shares. [CR 1268] The remaining shares were divided equally
between Chih Mu and Ling Mu, each receiving 7,500 shares. 1 Id.
2.
Chan had an employment contract with WFFI, the duration of which was
Chih Mu was non-suited on 10/22/12 [CR 526]; Ling Mu was never a defendant. [CR 12]
contingent upon his continued ownership of WFFI stock. [CR 1235, 1220, 1503,
532, 1505, 15] Chans on-going right to such employment was central to his
decision to invest in WFFI. [CR 1235] In 2004, Chan had a falling out with WFFI
and its other shareholders. [CR 1220] On September 12, 2004, Karen Chang
terminated Chans employment and told him not to return to the restaurant. [CR
1220, 1503, 14]
3.
Just before termination, Chan was receiving compensation in the form
monthly dividend income averaging $1,689.00 and a salary of $2,500.00 after tax.
[CR 1233, 1369, 1235] He was also entitled to receive employment benefits in the
form of: (i) a $600.00 annual bonus, (ii) 7-1/2 days of yearly vacation pay at the
rate of $83.33 per day, and (iii) sick leave pay at that same daily rate. [CR 1235]
As of September 12, 2004, WFFI still owed him accrued sick leave pay for seven
days in April of 2000 and earned vacation pay for the time period of August 2001
thru September 2004. Id.
4.
After termination, Chan remained unemployed for three months until he
found a job at his current place of employment. Id. At this new job, Chan has only
been paid a salary of $2,000 per month after taxes and does not receive benefits in
the form of vacation pay or yearly bonuses. Id. Also, since termination, Chan has
only received one dividend payment in the amount of $2,000 which was paid to
him in late 2004. [CR 1233, 1234, 1224] In October of 2009, Chans shares became
2
worthless when WFFI permanently closed its doors to business. [CR 1234]
5.
Chan is suing the primary defendants and Sharpe for $141,895.00 in
monetary damages in the form of: (a) unpaid dividend income, (b) unpaid wages,
(c) lost earnings, and (d) the total loss of his initial capital investment in WFFI
stock. [CR 1235] He also seeks attorneys fees, in equity, incurred to prosecute
the underlying shareholder rights claims; as distinguished from those incurred to
prosecute the professional malfeasance claims against Sharpe. [CR 1235] Finally,
Chan seeks exemplary damages. Id.
6.
Mr. Sharpe and his wife were regular patrons of WFFI since about 1997.
[CR 1221, 1225] Chan met Mr. Sharpe while serving him food and that is how he
found out that Mr. Sharpe was an attorney. Id. Over the years, he became friends
with Mr. and Mrs. Sharpe. [CR 1221, 1408] The Changs had not formally met Mr.
Sharpe or had any direct communications with him about his being an attorney
before September 12, 2004. [CR 1225]
7.
In October of 2004, Chan met Mr. Sharpe at his law office to obtain a legal
consultation regarding his falling out with the primary defendants. [CR 1220]
During this consultation, Chan disclosed certain information about his dispute to
Sharpe.2 Chan inquired of Sharpe about his legal options in resolving his dispute.
[CR 1220] Sharpe advised Chan of three possible options. [CR 1221, 1408] Chan
Appellants Brief-Section II-B-2.1 [App. 12]
then inquired of Sharpe as to what he would charge for his legal services. [CR
1221] Sharpe responded by saying he would assist Chan at no charge in honor of
Mrs. Sharpes request to do so. Id. When Chan left Sharpes office that day, he was
to consider the suggested options and call back with a decision. Id. During the
consultation, Sharpe never stated to Chan that he ever knew of the Changs or that
he would have any conflict of interest in helping Chan or in discussing matters of
his dispute against the primary defendants. [CR 1225] Sharpe admits that he never
represented the primary defendants in any legal matters before meeting with Chan
in October of 2004. [CR 1422]
8.
A few days later, Chan called Sharpe back and told him that he opted to hold
on to his WFFI shares so as to continue to receive monthly dividends. [CR 1221]

Sharpe then drafted a demand type letter on plain bond paper for Chan to sign and
send if he was satisfied with the letter. [CR 1221, 1272-74] Chan never sent that
letter. Id. Sometime later, Chan again contacted Sharpe and asked him how to go
about collecting money on his shareholder rights claims. [CR 1221] Sharpe
advised Chan to draft and send his own version of a demand letter and, if that
failed, to then file suit in small claims court. Id.
9.
On June 23, 2005 Chan followed Sharpes advice and sent a written demand
letter to WFFI asking for payment on his shareholder rights claims. [CR 1275]
Unbeknownst to Chan, on this same date, Sharpe switched sides and began
4
defending WFFI on the same shareholder rights claims that he advised Chan to
send a demand letter on; which same claims are now the subject of this suit. 3 [CR
1446] On July 22, 2005, WFFI responded to Chans demand letter and denied all
his claims. [CR 1276]
10.
In September of 2006, Chan then filed three small claims suits against Mr.
Chang seeking damages for unpaid dividends, unpaid wages, and wrongful
employment termination accompanied by assault. [CR 1280-82] Sharpe stepped
in to defend Mr. Chang in those suits. [CR 1283] On December 27, 2006, Sharpe
made a written offer to Chan to act as an intermediary on his claims against the
primary defendants in an out-of-court setting, if Chan would voluntarily dismiss
his suits against Mr. Chang. [CR 1284-85] On January 12, 2007, Chan accepted
Sharpes offer. [CR 1286]
11.
Between January 2007 and July 2007, a series of communications transpired
between Sharpe and Chan in the context of Sharpes promise to intermediate. [CR
1286-96] On July 28, 2007, however, Chan asked that his claims be referred to a
neutral arbitrator or to dispute resolution. [CR 1295] During August and
September of 2007, Sharpe continued to send written correspondence to Chan
attempting to validate the recommendations he had made as intermediary. [CR
1297-99] In December of 2007, Chan started seeking alternate counsel. [CR 1300-
Appellants Brief-Section II-B-2.1-2.2 [App. 12]
01]
12.
In September of 2009, Chan, through Amin, sent WFFI a demand letter
asking to audit its books and records. [CR 1302] Sharpe stepped in to defend WFFI
in the audit. [CR 1304] WFFI concealed certain of its financial records during the
audit. 4 As of January 2008 WFFI became insolvent; and in October of 2009, WFFI
closed its doors to business. [CR 1311, 1313]
13.
In January of 2010, Chan filed suit. [CR 12] Initially, Sharpe defended
himself and the primary defendants in this suit. [1SUPP-CR 4, CR 1335-36] After
conducting some discovery, in April of 2010 and thereafter, Chan asked Sharpe to
voluntarily withdraw from defending the primary defendants in this suit. [CR 1340,
1346] Sharpe refused to do so until after court order issued a year later in April of
2011. [CR 1489-90] Chan incurred substantial attorneys fees to obtain this order.
[CR 1235]
14.
After Sharpe was ordered permanently withdrawn, WFFI never hired
replacement counsel and willfully failed to answer the balance of Chans

discovery requests. [CR 1503-04] On September 16, 2011, the court signed a postanswer sanctions default judgment against WFFI as to liability. Id. The issue of
the amount of damages WFFI is liable for is still pending adjudication. [CR
1699]
Appellants Brief-Section II-C-4.0(b) [App. 12]
15.
In April of 2014, Sharpe moved to disqualify Amin as trial counsel and all
Respondents moved for summary judgment on one or more of Chans claims. [CR
991, 956, 2SUPP-CR 36] On June 17, 2014, the court signed interlocutory orders
granting these of Respondents motions. [CR 1619, 1622] [2SUPP-CR 389] On
August 12, 2014, the court finalized the summary judgments through a direct
severance order. [CR 1699] On September 8, 2014 Chan appealed. [CR 1702]
16.
On August 26, 2015, the COA affirmed the trial courts take-nothing
judgment. On September 10th, Chan filed a Motion for Rehearing which was
denied on September 17, 2015. On September 18th, he filed a Motion for En Banc
Reconsideration which was denied on October 1, 2015. The COA correctly stated
the nature of the case, except to the extent that it: (i) contradicted the facts above,
(ii) omitted the additional facts above, or (iii) transgressed the applicable standard
of review as discussed in Argument.
SUMMARY OF THE ARGUMENT

entitle a person to an impartial and disinterested tribunal in civil cases. The court
of appeals unjustifiably deprived Chan of his property because, while affirming
take-nothing summary judgment in favor of Respondents, it issued a twenty (20)
page supporting opinion that contains over forty (40) errors, omissions or distorted
conceptions of the facts or the law. This conduct is so obviously wrong that only
a plainly incompetent judiciary or one which was knowingly violating the law
would have done such a thing. 5 Judicial decisions rendered under circumstances
that suggest bias, prejudice, or favoritism should not be allowed to stand
unchanged because they undermine the integrity of the courts and thwart the
principles on which the justice system is based.
Malley, 475 U.S. at 341-43; Lassiter, 28 F.3d at 1151.
ARGUMENT
This Court should grant review because the COA violated Chans
fundamental rights. Marshall, 446 U.S. at 242. It affirmed a take-nothing judgment
supported by an opinion that (I) repeatedly transgresses the applicable standard of
review, (II) contains numerous false assertions or implications about Chans case,
(III) prejudicially omits more than a dozen of Chans arguments, (IV) time and again
turns a blind eye to Chans evidence, (V) conflicts with precedent set by many Texas
Supreme Court and other appellate cases, (VI) construes statutes in a distorted
fashion, and (VII) contains several other errors or irregularities. If the COAs
judgment and opinion stand unchanged, it will breed skepticism and mistrust of
the Texas judiciary. Metzger, 892 S.W.2d at 37-38.
I.
On the first seven pages of its opinion alone, the COA transgressed the
applicable standard of review seven times to cast doubt on Chans case where
no doubt should have been cast.6 By doing so, it revealed a bias from the outset.
An appellate court reviewing summary judgment must resolve any doubts in
favor of the non-movant [Chan] and take his evidence as true. Goodyear Tire, 236
S.W.3d at755-56; Nixon, 690 S.W.2d at 548-49.
Chan, No.02-14-00286-CV at *3-7. [App. 2]

9
II.
The COA repeatedly makes false assertions or implications about
Chans case. An impartial court would have no reason to do this as it could rely
only on truth as a basis to render opinion and judgment.
II-A. To the extent the COA implies that Chan merely speculates that
Appellees have fraudulently transferred assets on account of the passage of time,
the evidence shows otherwise.7 It appears that Sharpe fraudulently transferred
$32,000.00 one day after receiving notice of the suit and $36,006.00 exactly one
week before a 2012 trial setting. [CR 906, 904]
II-B. The COA states: Chan does not identify any admissions or include
any analysis explaining why the trial court should have relied on them. At a
minimum, Chan identified eleven (11) admissions on pages 59-61 of his brief
and explained how they relate to the conspiracy claim. He also identified seventeen
(17) admissions made by the Changs and WFFI on pages 110-117 of his brief
and explained how they relate to the Changs participatory liability. [App. 12]
II-C. The COA states: Chans own summary-judgment evidence indicates

that Sharpe had an on-going friendship with the Changs because he had been a
patron of their restaurant for years. Chan, however, testified:
I met Sharpe because he was a patron at the restaurant. I used to serve him his food and
that's how I found out that he was a lawyer. He used to bring his wife there to eat with
7
Id. at *17.
10
him sometimes. The Changs had not formally met Mr. Sharpe or had any direct
communications with him about his being an attorney before September 12, 2004. When
I met with Mr. Sharpe at his office in October of 2004, he never stated to me that he
previously knew the Changs or represented them or WFFI in any legal matters or that he
would have any conflict of interest in helping me or discussing my dispute against those
persons.[CR 1225]
II-D. To the extent that the COA implies that there is no evidence of
injury, its contention is false. 8 Chan testified to damages in the amount of
$141,895.00 plus the attorney's fees. [CR 1233-35]
II-E. The COA contends that Chan waived his objections to Respondents
summary judgment motions because he supports his arguments with no analysis
or citations to any authority.9 Chan will give three examples in his brief to prove
this false.
8
9
Id. at *6-7.
Id. at *9&14.
11
III. The COA repeatedly relied only on Respondents arguments to formulate

opinion on a particular issue while knowingly omitting from its analysis and
discussion Chans superseding or countervailing arguments on the very same
issue.
III-A. The COA concluded that admissions of a defaulting corporate

defendant cannot [under any circumstances] also be the deemed admissions of its
shareholders because they are treated as distinct and separate entities.10 Chan argued
this treatment is not necessarily applicable when these shareholders acted in their
capacity as officers and agents because the acts of an agent and its principal are the
acts of a single entity. These omitted arguments appeared on pages 28-30 of
Appellants Reply Brief and page 95 of Appellants Brief. [App. 13, 12]
III-B. The COA states there was a proper severance of Chans common law
tort claims from his TUFTA claims because Respondents met all three severance
factors. 11 Chan argued that Respondents severance motions are defeated ab initio
because bifurcation was an option to severance and they never made a showing of
prejudice as required by Texas law. The COA omitted this superseding argument
presented on pages 71 & 120 of Appellants Brief. [App. 12]
10
11
Id. at *10.
Id. at *16-17.
12
III-C. The COA concluded that Chans TUFTA and common law tort claims
do not involve the same underlying facts and issues.12 Chan argued that they do
because (i) the two types of claims involve the same financial facts concerning net
worth and insolvency, (ii) a defendants current net worth is inextricably intertwined
with his past fraudulent transfers and (iii) TUFTA serves as a mechanism to
differentiate between fraudulent and non-fraudulent transfers so as to help jurors
ascertain a defendants true net worth. These omitted arguments appeared on pages
72-73 and 120 of Appellants Brief. [App. 12]
III-D. On the one hand, the COA argues that Chans TUFTA claims would
be the proper subject of a lawsuit if independently asserted.13 On the other, it
contradictorily states that Chans TUFTA claims would hinge on the successful
outcome of one or more of his common law tort claims. 14. Chan argued [and the
Respondents judicially admitted] that his severed TUFTA claims could not be the
proper subject of a lawsuit if independently asserted because the TUFTA claims, in
this instance, were made before any judgment of liability against Respondents
issued. These omitted arguments appeared on pages 73-75 of Appellants Brief.
[App. 12]
12
Id.
Id.
14
Id.
13
13
III-E. The COA concludes that the damages Chan seeks are all plainly
contractual in nature. 15 Chan, however, presented the following superseding or
countervailing arguments on pages 92-94 & 102-107 of Appellants Brief which the
COA ignored. [App. 12]
1.
The Changs waived their right to argue that they were not individually
liable on WFFIs contractual claims because they failed to make a verified
plea pursuant to Tex. R. Civ. Proc. 93. [App. 8]; Pledger, 762 S.W.2d at 145.
2.
The malicious suppression or diversion of dividends is a fiduciary
breach which the Changs can be held liable for through a derivative action.
Ritchie, 443 S.W.3d at 883, 885, 887 and 906.
3.
A court-ordered buy-out of Chans shares is an equitable remedy
available under a fiduciary breach claim; Ritchie, 443 S.W.3d at 892.
4.
The buy-out remedy is available off the contract even if a shareholder
agreement exists; Ritchie, 443 S.W.3d at 902, n.43; Tex. Bus. Orgs. Code
21.563(c)(2). [App. 6];
5.
The Changs can also be held individually liable for dividend and buyout claims because of their participation in WFFIs fiduciary breach. Yeaman,
167 S.W. at 723-24; Kinzbach Tool Co., 160 S.W.2d at 51214; and
6.
Disparate treatment by the Changs [as the controlling officers] of
Chans employment rights emanating from stock ownership can constitute a
direct or derivative fiduciary breach establishing the Changs liability.
III-F thru III-H.
15
Id. at *12.
(Unbriefed)
14
IV. It was disingenuous for the COA to repeatedly turn a blind eye to Chans
evidence and then contend that summary judgment was proper because there is
no evidence to support a particular element of his claim.
IV-A. The COA asserts there is no evidence that the injury suffered by Chan
resulted from Sharpes misconduct. 16 The evidence, however, shows that Sharpes
wrongful dilatory conduct reduced the value of Chans claims, from a collectability
standpoint. This is because WFFI became insolvent and eventually went out of
business. [CR 1311, 1221-25, 1233-34] Something similar happens to a plaintiffs
claim when his attorney misses the statute of limitations deadline. Under these
circumstances, Stonewall precludes summary judgment on the proximate cause
element as a matter of law. See Stonewall Surplus Lines Ins. Co., 835 S.W. 2d at 712.
IV-B. The COA states there is no evidence that Sharpe gained association
with a more prominent, for profit corporate client and its controlling officers by
switching sides.17 The evidence shows Sharpe gained at least prospective business
association with (i) WFFI [a for-profit corporation], as compared to Chan, [a
disenfranchised individual] and (ii) the Changs [WFFIs controlling officers] whom
Sharpe had not previously formally met. [CR 1225, 1508, 1452-53, 1380, 1383, 1395,
1278] The evidence goes on to show that Sharpe then rendered legal services to these
16
17
Id. at *6-7.
Id.
15
new clients on seven occasions between 2005 and 2011. [CR 1446-47, 1276-79,
1283-99, 1302-17, 1335-36, 1498-1500, 1396].
IV-C. The COA states that there is no evidence that Chan was prevented from
pursuing his claims after Sharpe switched sides.18 The evidence, however, shows (i)
that Sharpe switched sides on June 23, 2005 [CR 1222], (ii) that in 2006 Sharpe
stepped in to defend Henry Chang in three small claims suits filed by Chan [CR 1221,
1283], (iii) that in 2007 Sharpe persuaded Chan into withdrawing those suits in favor
of an out-of-court intermediation which Sharpe had no intention of and did not carry
out in good faith [CR 1221-24, 1284-1301], and (iv) that Chan thereby lost an
opportunity to either prosecute his claims or settle them through court-ordered
mediation [CR 1286, 1298].
IV-D. The COA states the evidence is undisputed that neither the Changs
nor WFFI ever paid Sharpe for any legal services rendered. 19
The COA
omitted from its discussion material countervailing circumstantial evidence as

presented on pages 28-39 of Appellants Brief from which a jury could reasonably
find that Sharpe is being dishonest about not being paid on any of the seven instances
18
19
Id. at *6.
Id. at *7.
16
that he rendered services to these persons between 2005 and 2011. At least three of
those instances were unrelated to this case. [App. 12]
IV-E. The COA states that there is no evidence that the Changs perpetrated
an actual fraud for their personal benefit.20 The evidence, however, shows that the
Changs (a) misrepresented to Chan that WFFI did not earn profits sufficient to pay
dividends [CR 532-35, 14] [2SUPP-CR 152-53, 269, 380-84, 347(RFA#17)], (b)
misrepresented to Chan that WFFIs dividend records had been destroyed when in
fact those records are being concealed [2SUPP-CR 184-87, 200, 333, 350(RFA#4041), 353(RFA#61-68)], (c) remained silent on the issue of dividend income when
they had a legal duty to speak [CR 21; 2SUPP-CR 165-77] and (d) engaged in this
conduct for the purpose of unlawfully diverting, receiving and retaining Chans
dividend monies [CR 13-15, 21 532-35; 2SUPP-CR 380-84]. See also pages 112114 of Appellants Brief and pages 28-30 of Appellants Reply Brief. [App. 12-13]
20
Id. at *12.
17
V.
In order to affirm judgment in favor of Respondents, the COA had to
repeatedly ignore important precedent. Its decision conflicts with prior
decisions of another court of appeals or the Texas Supreme Court.
V-A. In conjunction with Tex. R. Evid. 601(a), Wolfe requires key language
that would affirmatively negate the affiants insanity before an affidavit would meet
the show affirmatively requirement imposed by Tex. R. Civ. Proc. 166a(f). Wolfe,
382 S.W. 3d at 449. [App. 11, 9] The COA holds that no such key language is
required and that this issue is merely within the trial courts discretion. 21
V-B. MacDonald holds that a fiduciary is not permitted to use his position so
as to obtain for himself any advantage or profit inconsistent with his supreme duty
to a beneficiary. MacDonald, 180 S.W.2d at 338. The COA now holds that a
fiduciary may obtain such advantage so long as there is no evidence of monetary
payment. 22
V-C. Farah holds that a plaintiff is not precluded from asserting a tort claim
solely because his damages are analogous to damages sought in a contractual claim.
Farah, 927 S.W.2d at 674. Dallas Fire holds that when a defendants conduct would
give rise to liability independently of whether a contract exists between the parties,
21
22
Id. at *9-10.
Id. at *7.
18
a plaintiffs claim may sound in tort. Dallas Fire Insurance Co., 128 S.W.3d at 293.
The COA now holds that a breach of fiduciary duty tort claim must be maintained
as a breach of contract claim even under these circumstances.23
V-D. Under Texas law, a party is relieved of the burden of pleading

evidentiary matters with particularity under the fair notice standard. Tex. R. Civ.
Proc. 47(a); Horizon, 34 S.W.3d at 896; James, 310 S.W.3d at 608. [App. 7] The
COA now holds that a TUFTA claim is not properly pled without including evidence
or allegations of particular fraudulent transfers.24 How is a plaintiff to obtain such
specific information unless he first pleads TUFTA and conducts financial discovery?
V-E. Blackthorne and Lunsford hold that (i) tort claimants are entitled to file
a TUFTA claim based upon pending, unliquidated tort claims, (ii) tort claimants are
entitled to seek interim injunctive relief using TUFTA to protect their equitable
interest in a tort recovery, and (iii) there is no evidentiary threshold tort claimants
must cross before seeking TUFTA discovery. Blackthorne, 61 S.W.3d at 443-44;
Lunsford, 746 S.W.2d at 473. [App. 3] The COA opinion conflicts with these
holdings because it states that a trial court may abate the TUFTA claim unless and
23
24
Id at *12-13.
Id. at *17.
19
until plaintiff first prevails on his pending common law tort claims. 25 In this context,
the COA also erroneously argues that Chans TUFTA claims may be abated because
he [purportedly] can obtain identical relief under his common law tort claims. 26
25
26
Id.
Id.
20
VI. The COA construes Tex. Bus. Orgs. Code 21.223-21.224 in such a
distorted fashion so as to (A) prematurely analyze the burden of proof issue on
actual fraud in the context of Tex. R. Civ. P. 166a(i) and (B) hold that
corporate officers are shielded from tort liability merely because they also are
shareholders of the corporation. [App. 4-5, 10]
VI-A.
(Unbriefed)
VI-B. K&G Tool holds that a corporate officer who converts the property of
another to the use of the corporation, or who misapplies private funds in the hands
of the corporation is personally liable to the person whose property has been
misappropriated. K & G Tool & Serv. Co., 314 S.W.2d at 793. Walker holds (i) that
it is not necessary to pierce the corporate veil in order to impose personal liability
upon a shareholder/officer, as long as it is shown that this officer knowingly
participated in the wrongdoing, and (ii) that if such showing is made, then 21.223
will not shield this officer from individual liability for his own tortious conduct.
Walker, 232 S.W.3d at 918-19. The COA, however, construes 21.223-21.224 to
mean that a corporate officer who engages in a tort other than the one of using the
corporation to perpetrate an actual fraud for his personal benefit is not subject to
personal liability if he is also a shareholder in the corporation. 27
27
Id. at *13.
21
VII. The COAs opinion contains six other errors or irregularities which
further contribute to the appearance and reality that there was a complete lack
of neutrality in the adjudicative proceedings below.
VII-A.
The COA erroneously argues that Chan was not injured or there
is no evidence of injury because he still had the ability to enforce his rights in the
same way, manner, and/or degree before; as compared to after Sharpes
misconduct.28 The evidence, however, shows that: (i) WFFI was solvent in 2005
because it renewed a 5-year lease and paid dividends [CR 1392, 1470(RFA#17)],
(ii) Sharpe unlawfully switched sides on June 23, 2005 [CR 1446], (iii) Chan filed
suit pro se in 2006 [CR 1280-82], (iv) in 2007, Sharpe then persuaded Chan to
dismiss his suits in favor of an out-of-court intermediation, (v) Sharpe did not carry
out that intermediation ethically [CR 1272-1300], and (vi) within four months after
the intermediation concluded, WFFI became insolvent. [CR 1311, 1221-24, 1234]
Thus, collectability became an issue with the passage of time; a circumstance
facilitated by Sharpe.
VII-B. thru VII-F.
28
Id. at *7.
(Unbriefed)
22
PRAYER
WHEREFORE, Petitioner prays this Court (i) grants his Petition for Review,
(ii) reverses the COAs judgment and opinion, (iii) remands the case to it for further
proceedings, and (iv) grants Petitioner such other relief in law or equity to which he
may be justly entitled.
23
Respectfully submitted:
/s/ Mayur Amin
Mayur Amin
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
ATTORNEY FOR PETITIONER
CERTIFICATE OF SERVICE
I hereby certify that on October 20, 2015, a true and correct copy of the
foregoing Petition for Review and supporting appendix was served via electronic
service and/or email to the following parties in accordance with Rule 9.5 of the
Texas Rules of Appellate Procedure:
John W. Proctor
Attorney for J. Shelby Sharpe and The Law Offices of J. Shelby Sharpe, A
Professional Corporation
Attorney for Henry and Karen Chang
/s/ Mayur Amin
Mayur Amin
24
CERTIFICATE OF COMPLIANCE WORD COUNT

Pursuant to Rule 9.4(i)(2)(B), I certify that this document contains 4,498
words, as indicated by the word-count function of the computer program used to
prepare it, and excluding the caption, identity of the parties and counsel,
statement regarding oral argument, table of contents, index of authorities,
statement of the case, statement of the issues presented, statement of jurisdiction,
statement of procedural history, signature, proof of service, certification,
certificate of compliance, and appendix.
/s/ Mayur Amin
Mayur Amin
25
Case No.
____________________________________

____________________________________
FRANCIS W.S. CHAN,
Petitioner,
V.
Respondents.
_______________________________________________
On Petition for Review
from the Second Court of Appeals, Fort Worth, Texas, No. 02-14-00286-CV
(48TH District Court of Tarrant County, Texas, No. 48-243228-10)
_____________________________________________
APPENDIX TO PETITION FOR REVIEW
______________________________________________
Tab
Court Judgments and Opinions:
1.
Order Granting Defendants Joint Motion to Sever and Final

Judgment August 12, 2014 [CR 1699];
2.
Second Court of Appeals Opinion and Judgment;
Tab
Any Rules, Regulations, Ordinances, and Statutes Relied On:
3.
Tex. Bus. & Com. Code 24.001 et seq. (TUFTA)
Page 1 of 2
4.
Tex. Bus. Orgs. Code 21.223
5.
6.
Tex. Bus. Orgs. Code 21.563(c)(2)
7.
Tex. R. Civ. P. 47(a)
8.
Tex. R. Civ. P. 93
9.
Tex. R. Civ. P. 166a(f)
10.
Tex. R. Civ. P. 166a(i)
11.
Tex. R. Evid. 601(a)
Tab
Any Other Documents or Items Relied On:
12.
Appellants Brief
13.
Appellants Reply Brief
Page 2 of 2
048-243228-10
NO. 48-24322810
FRANCIS WING-SING CHAN
Plaintiff
v.
WAN FU FOODS, I c., KAREN
CHANG, HENRY CHANG, CHIH TEH
MU, J. SHELBY SHARPE, AND
THE LAW OFFICE~ OF J. SHELBY
SHARPE, A PROFESSIONAL
CORPORATIONj
IN THE DISTRICT COURT
TARRANT COUNTY, TEXAS
Defendants
48TH JUDICIAL DISTRICT
ER GRANTING DEFENDANTS' JOINT MOTION

TO SEVER AND FINAL JUDGMENT
On July 24, im4, came on to be heard Defendants' Joint Motion to Sever. The
Court, having
consi~ered. such Motion and Plaintiff's response. and having heard the
arguments of counJl, finds that the Motion should be granted and the following order
entered:
IT IS, THE
FORE, ORDERED that Plaintiff's claims against Defendant Wan
Fu Foods. Inc. are Jvered from this cause and shall appear on the docket of this court as
Cause
Numberit:-a?~67~ -IC/
, styled Francis Wing-Sing Chan v. Wan Fu Foods, inc.
IT IS FURTkR ORDERED that the clerk of this
C~urt shall make a new file for
the severed suit. ine1jding the following court papecs from this suit
(1)
Plainti s Original Petition and Request for Disclosure filed January 22,
2010;
Order Orantlng Defendan Joint Motion to Sever And Final Judgment
Pagel
'~.
04S..243228-10
(2)
Order n Plaintiff's Motion to Disqualify Opposing Counsel and on Opposing

Couns rs Oral Motion to Withdraw as Counsel entered to Withdraw as
CouJl April 6, 2011 (actual date on Order is inadvertently shown as April 6,
2010);
(3)
Order on Plaintiff's Motion to Compel WFFI to Respond to Discovery
Reque ts filed July 22, 2011;

(4)
(5)
Plains Motion for Discovery Sanctions Against Wan Fu Foods, Inc.

(Au
t 29, 2011);
Order
bn Plaintiff's Motion for Discovery Sanctions Against Wan Fu Foods.
Inc. elered September 16, 2011;

(6)
Ordert:tered September 23) 201 l;
(7)
Defen
ts' Joint Motion to Sever (June 26, 2014);
Moti
to Sever and Plaintiffs' Motion to Reconsider June 17, 2014, Order of
Disqualification entered July 25, 2014;
(9)
OrderJGranting Defendants' Joint Motion to Sever and Final Judgment
~/Z,.2014; and
entere
(10)
DockeJ
~beet itemizing the foregoing items.
IT IS FINALLY ORDEREDt ADJUDGED AND DECREED that with this
severance, the June 7, 2014 Order Granting No-Evidence Motionfor Summary Judgment
(Chang) granting th Chang Defendants summary judgment, and the Jwie 17, 2014 Order
Re: Defendants J. S elby Sharpe and The Law Offices of J. Shelby Sharpe's Third No-
\
Order Granting Defendan Joint Motion to Sever And Final Judgment
Pagel
....
'
I,
046-243228-10
Evidence Motion fo Summary Judgment and Fourth Motion far Traditional Summary
Judgment granting ilie Sharpe Defendants summary judgment, are now final Orders. and all
relief not granted is hereby denied, with the costs of court being taxed against the party
incurring same.
Order Granting Defendant Joint Motion to Sever And Final Judgment
Pagel
FILE COPY
COURT OF APPEALS
SECOND DISTRICT
CHIEF JUSTICE
TERRIE LIVINGSTON
JUSTICES
LEE ANN DAUPHINOT
ANNE GARDNER
SUE WALKER
BILL MEIER
LEE GABRIEL
BONNIE SUDDERTH
OF
TEXAS
TIM CURRY CRIMINAL JUSTICE CENTER

401 W. BELKNAP, SUITE 9000
FORT WORTH, TEXAS 76196-0211
TEL: (817) 884-1900
FAX: (817) 884-1932
CLERK
DEBRA SPISAK
CHIEF STAFF ATTORNEY
LISA M. WEST
GENERAL COUNSEL
CLARISSA HODGES
www.txcourts.gov/2ndcoa
August 26, 2015

Civil District Clerk, Tarrant County
Tim Curry Criminal Justice Center
401 W. Belknap St., 3rd Floor
Fort Worth, TX 76196
* DELIVERED VIA E-MAIL *
Mayur Harshad Amin

The Amin Law Firm
2131 N. Collins Street, Suite 433-610
Arlington, TX 76011
John W. Proctor
Brown, Dean, Wiseman, et al.
306 W. 7th St., Ste. 200
Hon. David L. Evans

Judge, 48th District Court
Tim Curry Criminal Justice Center
401 W. Belknap St.

Kelly Hart & Hallman LLP
201 Main St., Ste. 2500
RE:
Court of Appeals Number:

Trial Court Case Number:
02-14-00286-CV
048-243228-10
Style:
Francis Wing-Sing Chan v. J. Shelby Sharpe and the Law Offices of J. Shelby
Sharpe, a Professional Corporation, and Karen Chang and Henry Chang
Today the Second Court of Appeals issued an opinion and judgment in the
above-referenced cause.
Copies of the opinion and judgment are attached and can also be viewed on our
Courts webpage at: http://www.txcourts.gov/2ndcoa.
Respectfully yours,
DEBRA SPISAK, CLERK
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00286-CV
APPELLANT
V.
J. SHELBY SHARPE AND THE

LAW OFFICES OF J. SHELBY
CORPORATION, AND KAREN
CHANG AND HENRY CHANG
APPELLEES
---------FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY

TRIAL COURT NO. 048-243228-10
----------
MEMORANDUM OPINION1
---------I. INTRODUCTION
In thirty issues, Appellant Francis Wing-Sing Chan appeals various trial
court orders, including orders granting summary judgment, in favor of Appellees
1
See Tex. R. App. P. 47.4.
J. Shelby Sharpe; The Law Offices of J. Shelby Sharpe, a Professional

Corporation; Karen Chang; and Henry Chang. We will affirm.
II. BACKGROUND
Wan Fu Foods, Inc. (WFFI) was formed in 1990 for the purpose of owning
and operating a restaurant in Fort Worth. Chan, the Changs, and several other
individuals were WFFIs initial shareholders. Chan was also an employee of, and
claims to have had an employment contract with, WFFI.
In September 2004, Chan had a falling out with WFFI [and its] other
shareholders and was told not to return to the restaurant.2 Sometime soon
thereafter, Chan and his then-wife met with Sharpe at his law office.3 Chan
thought that the restaurant owed him money, and he wanted Sharpe to represent
him in an effort to collect it. Sharpe told Chan that he would not represent him but
that he would draft a demand letter for him. Chans ex-wife also recalled that
Karen Chang, on the other hand, claimed that she had repeatedly
requested Chan to return to the restaurant after he left on his own volition[,] and
he repeatedly refused to return.
3
Chan claims that Sharpe had been a patron of the restaurant for a number
of years.
3
Sharpe had refused to represent Chan.4 Chan, however, claims that Sharpe
agreed to represent him at no charge.5
Chan subsequently filed three pro se lawsuits in small-claims court against
Henry Chang, seeking damages related to his dispute with WFFI. Sharpe filed
an answer on behalf of Henry Chang and later notified Chan by letter that he
should nonsuit the claims because they lacked merit.6 Chan dismissed the three
suits and met with the Changs in Sharpes conference room in an attempt to
resolve their differences, but they were unsuccessful.7
WFFI went out of
business in 2009.
Chan sued Appellees and WFFI in 2010.
According to Chan, his
employment with WFFI was wrongfully terminated and when Sharpe filed an
answer on behalf of Henry Chang in the three lawsuits in small-claims court,
Sharpe switched sides and stepped in to defend Henry in those suits without
obtaining Chans verbal or written consent to do so. Chan alleged claims for
According to Chans ex-wife, after the meeting with Sharpe, Chan asked
her to help him find an attorney to represent him in the dispute with WFFI, and
Chan began meeting with other attorneys.
5
Chan points out that his ex-wife was not there during the entire meeting
and that she has been under the care of a board certified psychiatrist for many
years.
6
Sharpe also informed Chan, There is a way to resolve your frustration,

but it is not in a court proceeding. I am pleased to sit down with you, Henry[,]
and Karen to discuss these frustrations, if you are willing.
7
Sharpe did not participate in the meeting.

4
breach of fiduciary duty and conspiracy, among other things; he later added a
claim for violation of the Texas Uniform Fraudulent Transfer Act (TUFTA); and he
sought damages for (i) unpaid dividends, (ii) lost wages, (iii) lost benefits, and
(iv) the value of his initial capital contribution to WFFI. The trial court ultimately
severed and abated the TUFTA claims; granted summary judgment in favor of
Sharpe, Sharpes law offices, and the Changs; and granted Sharpes and his law
offices motion to disqualify Chans counsel.
The summary judgment orders
became final when the trial court severed Chans claims against WFFI from the
remainder of the suit.8
III. SUMMARY JUDGMENT ISSUESSHARPE AND LAW OFFICES
A.
Breach of Fiduciary Duty
In issue II-B, Chan argues that the trial court erred by granting summary
judgment in favor of Sharpe and Sharpes law offices on Chans claim for breach
of fiduciary duty.9 The elements of a claim for breach of fiduciary duty are (1) a
fiduciary relationship existed between the plaintiff and the defendant, (2) the
defendant breached its fiduciary duty, and (3) the breach resulted in injury to the
plaintiff or benefit to the defendant. Heritage Gulf Props., Ltd. v. Sandalwood
Apartments, Inc., 416 S.W.3d 642, 650 (Tex. App.Houston [14th Dist.] 2013,
A different trial court had previously granted a default judgment against
WFFI.
9
Chan posits that an attorney-client relationship arose out of his meeting

with Sharpe.
5
no pet.). Sharpe and his law offices challenged the third element on no-evidence
groundsthat Chan suffered no injury and that Sharpe and the law offices
received no benefit because of any alleged breach of fiduciary duty by Sharpe
and his law offices.10
Chan argues that Sharpes switching of sides injured him because it
thwarted the timely prosecution, settlement, resolution, and/or payment of his
shareholder rights claims. Chan non-suited his lawsuits in small-claims court in
January 2007, and he and the Changs failed to resolve their differences at the
meeting at Sharpes law offices in March 2007.
There is no evidence that
Sharpes alleged switching of sides prevented Chan from thereafter timely

pursuing any of his claims.
Chan argues that Sharpes alleged misconduct injured him because it
undermined his on-going rights as a WFFI shareholder.
More specifically,
observing that WFFI went out of business in October 2009 and that he is no
longer able to collect money for my claims against WFFI from WFFI, Chan
contends that if Sharpe had acted fairly, honestly, impartially, and mediated
10
After an adequate time for discovery, the party without the burden of
proof may, without presenting evidence, move for summary judgment on the
ground that there is no evidence to support an essential element of the
nonmovants claim or defense. Tex. R. Civ. P. 166a(i). The motion must
specifically state the elements for which there is no evidence. Id.; Timpte Indus.,
Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). The trial court must grant the
motion unless the nonmovant produces summary judgment evidence that raises
a genuine issue of material fact. See Tex. R. Civ. P. 166a(i); Hamilton v. Wilson,
249 S.W.3d 425, 426 (Tex. 2008).
6
[Chans] claims in good faith, [Chan] would have settled those claims for a
reasonable sum of money within a few months after January 12, 2007, if not long
before then. Not only is this sheer speculation, but Chans claimed inability to
execute a money judgment against WFFI has nothing to do with Sharpes alleged
switching of sides years earlier. Based on this record, Chan had the ability to
enforce his rights as a WFFI shareholder after Sharpes alleged misconduct.
Chan additionally argues that Sharpes conduct caused [Chan] to incur
thousands of dollars in attorneys fees to rectify the consequences of Sharpes
misconduct. Again, notwithstanding that this is pure speculation, attorneys fees
ordinarily cannot be recovered as damages, and no exception applies under
these circumstances.
See G.R.A.V.I.T.Y. Enters. v. Reece Supply Co., 177
S.W.3d 537, 54647 (Tex. App.Dallas 2005, no pet.).

Regarding a benefit to Sharpe and his law offices, Chan argues that
Sharpe benefitted from this conduct because he gained association with a more
prominent, for-profit corporate client and its controlling officers. There is no
evidence of any such benefit.
Chans own summary-judgment evidence
indicates that Sharpe had an ongoing friendship with the Changs because he
had been a patron of their restaurant for years. Consistent with that relationship,
the evidence is undisputed that neither the Changs nor WFFI ever paid Sharpe
for any legal services rendered. The same can be said for Sharpes purported
agreement to represent Chan at no charge.
The trial court did not err by
granting Sharpe and his law offices summary judgment on Chans claim for
breach of fiduciary duty. We overrule Chans issue II-B.
B.
Civil Conspiracy
In issue II-C, Chan argues that the trial court erred by granting summary
judgment in favor of Sharpe and his law offices on Chans claim for civil
conspiracy.
In addition to challenging each civil-conspiracy element on no-
evidence grounds, Sharpe and his law offices argued that summary judgment
was proper because civil conspiracy is a derivative tort, and there is no
underlying tort to support the claim. We agree. The trial court properly granted
summary judgment on Chans breach-of-fiduciary-duty claim. There being no
other underlying tort to support the civil-conspiracy claim, the trial court properly
granted summary judgment thereon.
See Am. Tobacco Co. v. Grinnell, 951
S.W.2d 420, 438 (Tex. 1997). We overrule Chans issue II-C.

C.
Judicial Notice and Objections
In issue II-E, Chan argues that the trial court erred by failing to take
judicial notice of pertinent adjudicative facts and by overruling [his] proper
objections to Sharpes summary judgment motions and evidence.
In his response, Chan asked the trial court to take judicial notice of the
dates when certain documents referenced herein were filed, the dates when
jury trial was previously set in this matter, the dates when certain procedural
deadlines elapsed in this matter, and any other adjudicative facts that are
referenced herein and which are capable of accurate and ready determination by
8
resort to sources whose accuracy cannot be reasonably questioned.
Chan
asserts no argument explainingand we fail to seehow the trial courts failure

to take judicial notice of those matters can be reversible error under these
circumstances. See Tex. R. App. P. 44.1(a).
Chan argues that [t]he court erred in overruling his objections because
Sharpes motions make or are based on multiple erroneous, false, and/or
unsubstantiated assertions, conclusions or implications. Chan directs us to over
twenty pages of objections contained in his summary-judgment response but
supports his argument with no analysis or citation to any authority. Therefore,
this argument is waived as inadequately briefed. See Tex. R. App. P. 38.1(i);
Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex. 1994).
Chan argues that the court erred by considering evidence that contradicts
any admissions favorably supporting appellants claims or defenses. Chan does
not identify any admissions or include any analysis explaining why the trial court
should have relied on them. Therefore, this argument is inadequately briefed
and waived. See Tex. R. App. P. 38.1(i); Fredonia State Bank, 881 S.W.2d at
284.
Chan argues that the trial court improperly overruled his objections to the
Changs affidavits because the Changs are not competent to so testify.
To
constitute competent summary-judgment evidence, affidavits must be made on

personal knowledge, set forth facts as would be admissible in evidence, and
show affirmatively that the affiant is competent to testify to matters stated therein.
9
Tex. R. Civ. P. 166a(f). We have reviewed the affidavits. The trial court could
have reasonably concluded that they satisfy all three rule 166a(f) requisites;
therefore, the trial court did not abuse its discretion by denying Chans objection.
Chan argues that the trial court improperly overruled his objections to the
Changs affidavits because the affidavits cannot readily be controverted. In the
context of rule of civil procedure 166a(c), could have been readily controverted
means the testimony at issue is of a nature that can be effectively controverted
by opposing evidence. Fort Worth Star-Telegram v. Street, 61 S.W.3d 704, 710
(Tex. App.Fort Worth 2001, pet. denied).
The trial court did not abuse its
discretion by denying Chans objection on this ground because the testimony

contained in both affidavits is readily controvertible.11
Finally, Chan argues that the trial court erred in finding that the WFFI
admissions relied upon by [him] do not constitute admissions of fact because
they [allegedly] are conclusions, opinion, or statements of subjective intent. 12
The trial court did not abuse its discretion because it reasonably could have
concluded that it was improper to impute the admissions of one party (a
defaulting
corporate
defendant)
upon
another
(nondefaulting
individual
11
For example, Karen testified that she was the individual who repeatedly
requested Chan to return to the restaurant after he left on his own volition and he
repeatedly refused to return. Chan controverted this testimony by arguing that
he was wrongfully terminated and told not to return to the restaurant.
12
At some point, one of the three trial courts that handled this case granted
a motion that Chan filed after WFFI had defaulted to deem certain allegations
against WFFI true.
10
defendants). See H.E. Butt Grocery Co. v. Sheppard, 137 S.W.2d 823, 824
(Tex. Civ. App.Austin 1940, writ refd) (The general characteristics of a
corporation as a distinct entity separate and apart from its stockholders,
regardless of how and by whom its stock is held, are well settled and uniformly
recognized.). We overrule Chans issue II-E.
D.
Unpleaded Claims or Defenses
In issue II-A, Chan argues that the trial court erred by granting summary
judgment in favor of Sharpe and his law offices on any unpleaded claims or
defenses because [Chan] objected to the trying of the same through summary
judgment. The trial court did not grant summary judgment on any unpleaded
claims or defenses. Chan alleged claims for breach of fiduciary duty and civil
conspiracy, Sharpe and the law offices moved for summary judgment on those
claims, and the trial court properly granted summary judgment on those claims.
We overrule Chans issue II-A.
E.
Requested Relief
In issue II-F, Chan argues that the trial court erred by granting Sharpe and
his law offices more relief than was requested in the summary-judgment motion
because the motion did not address or properly address Chans claims for
breach of fiduciary duty and civil conspiracy. As explained above, Sharpe and
his law offices properly moved for summary judgment on both claims.
overrule Chans issue II-F.
11
We
F.
Limitations
In issue II-D, Chan argues that the trial court erred by granting summary
judgment in favor of Sharpe and his law offices on the ground of limitations. The
trial court properly granted summary judgment on grounds other than limitations,
as explained. Therefore, we overrule Chans issue II-D.
IV. SUMMARY JUDGMENT ISSUESTHE CHANGS
A.
Breach of Fiduciary Duty
In issues IX-D, IX-E, IX-F, IX-G, IX-H, and IX-I, Chan argues that the trial
court erred by granting summary judgment in favor of the Changs on his claim for
breach of fiduciary duty. As the Changs point out, Chan seeks to hold them
personally liable for certain corporate, contractual damagesunpaid dividends,
lost wages, lost benefits, and the value of Chans initial capital contribution to
WFFIthat are plainly attributable to WFFI via a shareholder agreement or the
employment agreement that Chan claims he had with WFFI.
It is well
established that a shareholder is generally not liable for the obligations of a

corporation. See Tex. Bus. Orgs. Code Ann. 21.223(a) (West 2012). To pierce
the corporate veil, and thus disregard the corporate form, a plaintiff must show
that the shareholder used the corporation to perpetrate an actual fraud . . .
primarily for the direct personal benefit of the shareholder. Id. 21.223(b); see
Willis v. Donnelly, 199 S.W.3d 262, 27173 (Tex. 2006). Chan produced no
summary-judgment evidence demonstrating that the Changs perpetrated an
actual fraud for their personal benefit.
12
His breach-of-fiduciary-duty claim is
therefore an impermissible attempt to pierce the corporate veil, and the trial court
properly granted summary judgment in favor of the Changs on that claim. 13 We
overrule Chans issues IX-D, IX-E, IX-F, IX-G, IX-H, and IX-I.
B.
Unpleaded Claims or Defenses
In issue IX-A, Chan argues that the trial court erred by granting summary
judgment in favor of the Changs on any unpleaded claims or defenses because
[Chan] objected to the trying of the same through summary judgment. The trial
court did not grant summary judgment on any unpleaded claims or defenses.
We overrule Chans issue IX-A.
C.
Judicial Notice and Objections
In issue IX-B, Chan argues that the trial court erred by failing to take
judicial notice of pertinent adjudicative facts and by overruling [his] proper
objections to the Changs summary judgment motion.
The matters that Chan asked the trial court to take judicial notice of are the
same matters that he asked the trial court to take judicial notice of in his
response to Sharpes motion for summary judgment and that we set out above.
13
Chan asserts several arguments attempting to demonstrate that his claim

for breach of fiduciary duty is not legally foreclosed (issues IX-D, IX-E, IX-G, IXH), but the arguments do not somehow obviate business organizations code
section 21.223(b)s essential requirement of actual fraud for purposes of
imposing personal liability. This includes Chans argument that the Changs are
liable as officers or directors of WFFI. See Sparks v. Booth, 232 S.W.3d 853,
869 (Tex. App.Dallas 2007, no pet.) ([A]n individuals standing as an officer,
director, or majority shareholder of an entity alone is insufficient to support a
finding of alter ego.).
13
Like we stated, Chan asserts no argument explainingand we fail to seehow

the trial courts failure to take judicial notice of those matters can be reversible
error. See Tex. R. App. P. 44.1(a).
Chan argues that [t]he court erred in overruling his objections because the
Changs motion makes or is based on multiple erroneous, false, and/or
unsubstantiated assertions, conclusions or implications.
Chan supports his
argument with no analysis or citation to any authority. Therefore, it is waived as

inadequately briefed. See Tex. R. App. P. 38.1(i); Fredonia State Bank, 881
S.W.2d at 284.
Chan also argues that the court erred by considering evidence that
contradicts any admissions favorably supporting appellants claims or defenses.
Chan does not identify any admissions or include any analysis explaining why
the trial court should have relied on them.
Therefore, this argument is
inadequately briefed and waived. See Tex. R. App. P. 38.1(i); Fredonia State
Bank, 881 S.W.2d at 284. We overrule Chans issue IX-B.
D.
Propriety of Summary-Judgment Motion
In issue IX-C, Chan argues that the trial court erred by granting summary
judgment in favor of the Changs because their motion is legally insufficient with
respect to any claims or defenses where they failed to state the specific
challenged element as to which there is no evidence and improper with
respect to any defensive elements where they have the burden of proof at trial.
The Changs motion for summary judgment complied with rule 166a(i) because it
14
stated that Chan had no evidence of any actual fraud committed by the Changs.
See Sanchez v. Mulvaney, 274 S.W.3d 708, 711 (Tex. App.San Antonio 2008,
no pet.) (construing motion in which movant argued that there was no evidence
of actual fraud for purposes of piercing corporate veil as no-evidence motion for
summary judgment). We overrule Chans issue IX-C.
E.
Requested Relief
In issue IX-J, Chan argues that the trial court erred by granting the
Changs more relief than requested in their summary judgment motion.
He
contends that the motion did not seek summary judgment on numerous claims,
including breach of fiduciary duty, civil conversion, conspiracy, and aiding and
abetting. Each of Chans claims, however identified, sought to impose personal
liability upon the Changs for obligations owed by WFFI; business organizations
code section 21.223(b) consequently imposed a burden upon Chan to prove
actual fraud.
See Tex. Bus. Orgs. Code Ann. 21.223(b).
The Changs
summary-judgment motion unquestionably put Chan to that burden, see Tex. R.

Civ. P. 166a(i), and he failed to respond with summary-judgment evidence.
Therefore, the trial court properly granted summary judgment as to each of
Chans claims against the Changs and did not grant the Changs more relief than
they requested in their motion. See Sanchez, 274 S.W.3d at 71112 (holding
that trial court properly granted no-evidence summary judgment on claim seeking
to impose personal liability for obligation owed by limited liability company
15
because nonmovant produced no evidence of actual fraud). We overrule Chans

issue IX-J.
V. MOTIONS TO COMPEL AND PROTECTIVE ORDER
In issues III, VI, VII, VIII, XII, and XIII, Chan argues that the trial court erred
(1) by denying motions to compel in which he sought discovery related to (i) his
claim for breach of fiduciary duty against Sharpe and his law offices, (ii) Sharpes
net worth, (iii) the Changs net worth, and (iv) Chans TUFTA claims against both
Sharpe and the Changs, and (2) by granting Sharpe and his law offices a
protective order involving discovery materials related to the law offices bank
statements. None of the information that Chan sought has any relevance to the
grounds upon which the trial court properly granted summary judgment in favor
of Appellees. In other words, even if the trial court had abused its discretion by
denying the motions and granting the protective order, the errors were harmless.
See Tex. R. App. P. 44.1(a). We overrule Chans issues III, VI, VII, VIII, XII, and
XIII.
VI. SEVERANCE AND ABATEMENT ISSUES
In issues IV, V, X, and XI, Chan argues that the trial court erred by
severing and abating his TUFTA claims. A claim is properly severable if (1) the
controversy involves more than one cause of action, (2) the severed claim is one
that would be the proper subject of a lawsuit if independently asserted, and
(3) the severed claim is not so interwoven with the remaining action that they
16
involve the same facts and issues.
Guaranty Fed. Sav. Bank v. Horseshoe
Operating Co., 793 S.W.2d 652, 658 (Tex. 1990); see Tex. R. Civ. P. 41.
Chans TUFTA allegation stated,
Over three years have transpired since defendants have been
sued in this case and/or were threatened with this suit. . . . [T]he
defendants have had motive, sufficient means, opportunity and time
to engage in fraudulent conduct [] in violation of TUFTA. Such
conduct may include, but is not limited to, transfer of their assets to
another for receipt of less than reasonably equivalent value during a
time of insolvency or resulting in insolvency.
Chans TUFTA claims are not premised upon any of the same facts underlying
his other claims; he merely speculates that Appellees have fraudulently
transferred assets on account of the passage of time. All three severance factors
are met; therefore, the trial court did not abuse its discretion by severing Chans
TUFTA claims. See Guaranty Fed. Sav. Bank, 793 S.W.2d at 658. Further, the
trial court could have reasonably concluded that the parties should not have to
spend time and incur expenses conducting discovery on claims that, as pleaded,
appear to hinge in part on a successful outcome on one or more of the other
claims. Thus, the trial court did not abuse its discretion by also abating the
TUFTA claims. See Timon v. Dolan, 244 S.W.2d 985, 987 (Tex. Civ. App.San
Antonio 1951, no writ) (stating that a court, in exercise of its sound discretion,
may abate an action for reasons of comity, convenience and orderly procedure,
and in the exercise of that discretion may look to the practical results to be
obtained, dictated by a consideration of the inherent interrelation of the subject
matter of the two suits.). We overrule Chans issues IV, V, X, and XI.
17
In issue XIV, Chan argues that the trial court erred by severing his claims
against WFFI from the remainder of the suit. By severing Chans claims against
WFFI, the trial courts otherwise interlocutory orders granting summary judgment
in favor of Appellees became final and, therefore, appealable. This procedure is
frequently utilized by trial courts to manage dockets in multi-party litigation. The
trial court did not abuse its discretion by severing Chans claims against WFFI,
and we overrule his issue XIV.
VII. MOTION FOR LEAVE
In issue XV, Chan argues that the trial court erred by denying his motion
for leave to supplement his pleadingswhich he included in the motion for new
trial that he filed after the trial court had granted summary judgment in favor of
the Changsto include facts about WFFIs closely-held corporation status.14
The trial court could have reasonably concluded that the facts had no bearing on
the requirement that Chan prove actual fraud by the Changs. If there was any
error, it was harmless. See Tex. R. App. P. 44.1(a). We overrule Chans issue
XV.
14
The facts are that the Changs were signatories to WFFIs 1/2/90 buy-sell
stock agreement and have known since then that WFFI has only had five
shareholders and that it has never been listed on any stock exchange.
18
VIII. MOTION IN LIMINE

On August 4, 2014, Chan filed a withdrawal to his stipulation to Item #3 in
the courts January 22, 2013 limine order. In the motion for new trial that Chan
filed on August 22, 2013, he moved the court to reconsider said [limine] order
and to allow him to withdraw his stipulation to Item #3 in the same. In issue XVI,
Chan argues that the trial court erred by denying his motion to reconsider Item #3
in the January 22, 2013 limine order.15
Once again, we fail to see how a
stipulation to an item contained in a motion in limine pertaining to a jury trial that

never occurred has anything to do with the trial courts grant of summary
judgment in favor of the Changs. If there was any error, it was harmless. See id.
We overrule Chans issue XVI.
IX. DISQUALIFICATION
In issue I, Chan argues that the trial court erred by granting Sharpes and
Sharpes law offices motion to disqualify Chans counsel, Mayur Amin. Sharpe
moved to disqualify Amin because at a pretrial conference, Amin advised the trial
court that he intended to offer into evidence at trial business record affidavits that
included letters and documents that he had personally authored. Sharpe argued
that by doing so, Amin had injected himself as a material witness in the case.
See Tex. Disciplinary Rules Profl Conduct R. 3.08(a), reprinted in Tex. Govt
15
The stipulation involved the alleged fiduciary duty of any individual

shareholder of the corporate defendant to any other shareholder.
19
Code Ann., tit. 2, subtit. G, app. A (West 2013) (Tex. State Bar R. art. X, 9).
However, Sharpe and his law offices expressly predicated the motion to
disqualify Amin on the occurrence of a jury trial.16 But a jury trial never occurred,
and in light of our decision to affirm the trial courts judgment in its entirety, this
cause will not be remanded to the trial court for further proceedings. Therefore, if
the trial court erred by granting the motion to disqualify Amin, any error was
harmless. See Tex. R. App. P. 44.1(a). We overrule Chans issue I.
X. CONCLUSION
Having overruled Chans thirty issues, we affirm the trial courts judgment.
PER CURIAM
PANEL: MEIER, GARDNER, and GABRIEL, JJ.
DELIVERED: August 26, 2015
16
The motion stated,
If the Court is going to permit the use of the Amin business

records affidavit, correspondence between Plaintiffs counsel and J.
Shelby Sharpe, and/or permit Plaintiffs counsel to testify on matters
other than as to attorneys fees, then the Court should disqualify
Plaintiffs counsel and this case be continued until such time as
Plaintiff has had an opportunity to obtain other counsel. [Emphasis
added.]
Indeed, Amin represents Chan in this appeal, and no party has challenged his
authority to do so.
20
COURT OF APPEALS
FORT WORTH
NO. 02-14-00286-CV
Francis Wing-Sing Chan
v.
From the 48th District Court

of Tarrant County (048-243228-10)
J. Shelby Sharpe and the Law

Offices of J. Shelby Sharpe, a
Professional Corporation, and Karen
Chang and Henry Chang
August 26, 2015

Per Curiam
JUDGMENT
This court has considered the record on appeal in this case and holds that
there was no error in the trial courts judgment. It is ordered that the judgment of
the trial court is affirmed.
It is further ordered that Appellant Francis Wing-Sing Chan shall pay all
costs of this appeal, for which let execution issue.
SECOND DISTRICT COURT OF APPEALS
PER CURIAM
BUSINESS AND COMMERCE CODE

TITLE 3. INSOLVENCY, FRAUDULENT TRANSFERS, AND FRAUD
CHAPTER 24. UNIFORM FRAUDULENT TRANSFER ACT
Sec. 24.001.
SHORT TITLE.
This chapter may be cited as the
Uniform Fraudulent Transfer Act.

Amended by Acts 1987, 70th Leg., ch. 1004, Sec. 1, eff. Sept. 1,
1987.
Sec. 24. 002.

( 1)
DEFINITIONS.
In this chapter:
"Affiliate" means:
(A)
a person who directly or
indirectly owns,
controls, or holds with power to vote, 20 percent or more of the

outstanding voting securities of the debtor, other than a person
who holds the securities:
( i)
as a fiduciary or agent without sole
discretionary power to vote the securities;
or
solely to secure a debt, if the person
(ii)
has not exercised the power to vote;

(B)
corporation 20 percent or more of whose
outstanding voting securities are directly or indirectly owned,

controlled, or held with power to vote, by the debtor or a person
who directly or indirectly owns, controls, or holds, with power to
vote, 20 percent or more of the outstanding voting securities of the
debtor, other than a person who holds the securities:
(i)
as a fiduciary or
power to vote the securities;

(ii)
agent without sole
or
solely to secure a debt, if the person
has not in fact exercised the power to vote;

(C)
a person whose business is operated by the
debtor under a lease or other agreement, or a person substantially

all of whose assets are controlled by the debtor;
(D)
or
a person who operates the debtor's business
under a lease or other agreement or controls substantially all of

the debtor's assets.
(2)
"Asset" means property of a debtor, but the term
does not include:

1
(A)
property to the extent it is encumbered by a
(B)
property to the extent it is generally exempt
valid lien;
under nonbankruptcy law;

(C)
or
an interest in property held in tenancy by
the entireties to the extent it is not subject to process by a

creditor holding a claim against only one tenant, under the law of
another jurisdiction.
"Claim" means a
( 3)
whether
or
not
unliquidated,
the
fixed,
right
right
is reduced
contingent,
to payment
to
matured,
or property,
judgment,
liquidated,
unmatured,
disputed,
undisputed, legal, equitable, secured, or unsecured.

(4)
"Creditor" means a person,
including a spouse,
minor, person entitled to receive court or administratively ordered

child support for the benefit of a child, or ward, who has a claim.
(5)
"Debt" means a liability on a claim.
(6)
"Debtor" means a person who is liable on a claim.
(7)
"Insider" includes:
(A)
i f the debtor is an individual:
( i)
a relative of the debtor or of a general
partner of the debtor;

(ii)
a partnership in which the debtor is a
general partner;
(iii)
a general partner
described in Subparagraph (ii) of this paragraph;

(iv)
in a partnership
or
a corporation of which the debtor is a
director, officer, or person in control;

(B)
if the debtor is a corporation:

( i)
a director of the debtor;

an officer of the debtor;
(ii)
a person in control of the debtor;
(iii)
(iv)
a partnership in which the debtor is a
general partner;
(v)
general
partner
described in Subparagraph (iv) of this paragraph;

(vi)
relative
of
in
or
general
director, officer, or person in control of the debtor;

2
partnership
partner,
( C)
if the debtor is a partnership:

( i)
a general partner in the debtor;
(ii}
a relative of a general partner in, a
general partner of, or a person in control of the debtor;

(iii)
another
partnership
in
which
the
debtor is a general partner;

(iv)
general partner
in
described in Subparagraph (iii) of this paragraph;

(v)
(D)
(8)
property
to
partnership
or
a person in control of the debtor;
an affiliate, or an insider of an affiliate
as if the affiliate were the debtor;

(E)
and
.a managing agent of the debtor.
"Lien" means a charge against or an interest in
secure
payment
of
debt
or
performance
of
an
obligation, and includes a security interest created by agreement,

a
judicial
lien
obtained
by
legal
or
equitable
process
or
proceedings, a conunon-law lien, or a statutory lien.

(9)
"Person"
means
an
individual,
partner ship,
corporation, association, organization, government or governmental

subdivision or agency, business trust, estate, trust, or any other
legal or conuner c ial entity.
( 10)
"Property" means anything that may be the subject
of ownership.
( 11)
"Relative"
means
an
individual
related
by
consanguinity within the third degree as determined by the common

law, a spouse, or an individual related to a spouse within the third
degree as so determined, and includes an individual in an adoptive
relationship within the third degree.
(12}
"Transfer" means every mode, direct or indirect,
absolute or conditional, voluntary or involuntary, of disposing of

or parting with an asset or an interest in an asset, and includes
payment of money, release, lease, and creation of a lien or other
encumbrance.
The
term
does
not
include
transfer
under
disclaimer filed under Section 37A, Texas Probate Code, or Section

112.010, Property Code.
(13)
"Valid
against the holder of a
lien"
means
lien
that
is
effective
judicial lien subsequently obtained by
legal or equitable process or proceedings.

1987;
Acts 1993, 73rd Leg., ch. 846, Sec. 2, eff. Sept. 1, 1993;
Acts1997, 75thLeg., ch. 911, Sec. 95, eff. Sept. 1, 1997.
Sec. 24.003.
INSOLVENCY.
(a)
A debtor is insolvent if the
sum of the debtor's debts is greater than all of the debtor's assets
at a fair valuation.
(b)
A debtor who is generally not paying the debtor's debts
as they become due is presumed to be insolvent.

(c)
Repealed by Acts 2013, 83rd Leg., R.S., Ch. 9, Sec. 11,
eff. September 1, 2013.

(d)
Assets under this section do not include property that
has been transferred, concealed, or removed with intent to hinder,

delay, or defraud creditors or that has been transferred in a manner
making the transfer voidable under this chapter.
( e)
Debts under this section do not include an obligation to
the extent it is secured by a valid lien on property of the debtor

not included as an asset.
1987; Acts 1993, 73rd Leg., ch. 570, Sec. 8, eff. Sept. 1, 1993.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 9 (S.B. 847), Sec. 11, eff.
September 1, 2013.
Sec. 24.004.
VALUE.
(a) Value is given for a transfer or an
obligation if, in exchange for the transfer or obligation, property

is transferred or an antecedent debt is secured or satisfied, but
value does not include an unperformed promise made otherwise than
in the
ordinary course of the promisor 's business to
furnish
support to the debtor or another per son.

(b)
For the purposes of Sections 24.00S(a) (2) and 24.006 of
this code, a person gives a reasonably equivalent value if the

person acquires an interest of the debtor in an asset pursuant to a
regularly conducted, noncollusive foreclosure sale or execution of
a power of sale for the acquisition or disposition of the interest
of the debtor upon default under a mortgage, deed of trust, or
4
security agreement.
(c)
A transfer is made for present value if the exchange
between the debtor and the transferee is intended by them to be

contemporaneous and is in fact substantially contemporaneous.
(d)
"Reasonably
equivalent
value"
includes
without
limitation, a transfer or obligation that is within the range of

values for which the transferor would have sold the assets in an
arm's length tTansaction.
1987; Acts 1993, 73rdLeg., ch. 570, Sec. 9, eff. Sept. 1, 1993.
Sec. 24.005.
CREDITORS.
(a)
TRANSFERS FRAUDULENT AS TO PRESENT AND FUTURE
A transfer made or obligation incurred by a debtor
is fraudulent as to a creditor, whether the creditor's claim arose

before or within a reasonable time after the transfer was made or
the obligation was incurred, if the debtor made the transfer or
incurred the obligation:
(1)
with actual intent to hinder, delay, or defraud
any creditor of the debtor;

(2)
or
without receiving a reasonably equivalent value in
exchange for the transfer or obligation, and the debtor:

(A)
was
engaged
or
was
about
to
engage
in
business or a transaction for which the remaining assets of the

debtor were unreasonably small in relation to the business or
transaction;
or
{B}
intended to incur, or believed or reasonably
should have believed that the debtor would incur, debts beyond the
debtor's ability to pay as they became due.
{b}
In determining actual intent under Subsection (a)(l) of
this section, consideration may be given, among other factors, to

whether:
( 1)
the transfer or obligation was to an insider;
(2}
the debtor retained possession or control of the
property transferred after the transfer;

( 3)
the transfer or obligation was concealed;
(4)
before the transfer was made or
obligation was
incurred, the debtor had been sued or threatened with suit;

5
(5)
the transfer was of substantially all the debtor's
(6)
the debtor absconded;
(7)
the debtor removed or concealed assets;
(8)
the value of the consideration received by the
assets;
debtor
was
reasonably
equivalent
to
the
value
of
the
asset
transferred or the amount of the obligation incurred;

(9)
the
debtor
was
insolvent
or
became
insolvent
shortly after the transfer was made or the obligation was incurred;
(10)
the transfer occurred shortly before or shortly
after a substantial debt was incurred;

(11)
and
the debtor transferred the essential assets of
the business to a lienor who transferred the assets to an insider of

the debtor.
1987; Acts 1993, 73rdLeg., ch. 570, Sec. 10, eff. Sept. 1, 1993.
Sec. 24.006.
(a)
A transfer
TRANSFERS FRAUDULENT AS TO PRESENT CREDITORS.

made
or
obligation
incurred
by
debtor
is
fraudulent as to a creditor whose claim arose before the transfer

was made or the obligation was incurred if the debtor made the
transfer or incurred the obligation without receiving a reasonably
equivalent value in exchange for the transfer or obligation and the
debtor was insolvent at that time or the debtor became insolvent as
a result of the transfer or obligation.
(b)
A transfer
made
by a
debtor
is fraudulent
as
to
creditor whose claim arose before the transfer was made if the
transfer was made to an insider for an antecedent debt, the debtor
was insolvent at that time, and the insider had reasonable cause to
believe that the debtor was insolvent.
1987.
Sec. 24.007.
INCURRED.
WHEN
TRANSFER
IS
MADE
OR
OBLIGATION
IS
For the purposes of this chapter:

( 1)
a transfer is made:
(A)
with
respect
6
to
an
asset
that
is
real
property other than a fixture,
but including the interest of a
seller or purchaser under a contract for the sale of the asset, when
the transfer is so far perfected that a good faith purchaser of the
asset from the debtor
against whom applicable
law permits the
transfer to be perfected cannot acquire an interest in the asset

that is superior to the interest of the transferee;
(B)
and
with respect to an asset that is not real
property or that is a fixture, when the transfer is so far perfected

that a creditor on a simple contract cannot acquire a judicial lien
otherwise than under this chapter that is superior to the interest
of the transferee;
( 2)
if
applicable
law permits
the
transfer
to
be
perfected as provided in Subdivision (1) of this section and the

transfer is not so perfected before the commencement of an action
for
relief
under
this
chapter,
the
transfer
is
deemed
made
immediately before the commencement of the action;

(3)
if applicable law does not permit the transfer to
be perfected as provided in Subdivisi.on ( 1) of this section, the

transfer is made when it becomes effective between the debtor and
the transferee;
(4)
transfer
is
not
made
acquired rights in the asset transferred;

(5)
the parties;
until
the
debtor
has
and
an obligation is incurred:
(A)
if oral, when it becomes effective between
(B)
if evidenced by a writing, when the writing
or
executed by the obligor is delivered to or for the benefit of the

obligee.
1987.
Sec. 24.008.
relief against
creditor,
REMEDIES OF CREDITORS.
transfer
or
(a)
obligation under
In an action for
this chapter,
subject to the limitations in Section 24. 009 of this
code, may obtain:

(1)
avoidance of the transfer or obligation to the
extent necessary to satisfy the creditor's claim;

7
(2)
the
asset
an attachment or other provisional remedy against
transferred or
other
property of
the
transferee
in
accordance with the applicable Texas Rules of Civil Procedure and

the
Civil
Practice
proceedings;
and
Remedies
Code
relating
to
ancillary
or
(3)
subject to applicable principles of equity and in
accordance with applicable rules of civil procedure:

(A)
an injunction against further disposition by
the debtor or a transferee, or both, of the asset transferred or of

other property;
(B)
appointment of a receiver to take charge of
the asset transferred or of other property of the transferee;

(C)
any
other
relief
the
or
circumstances
may
require.
(b)
If a creditor has obtained a judgment on a claim against
the debtor, the creditor, if the court so orders, may levy execution
on the asset transferred or its proceeds.
1987.
Sec. 24. 009.

TRANSFEREE.
(a)
DEFENSES,
LIABILITY,
AND
PROTECTION
OF
A transfer or obligation is not voidable under
Section 24.00S{a) (1) of this code against a person who took in good
faith
and
for
reasonably
equivalent
value
or
against
any
subsequent transferee or obligee.

(b)
Except as otherwise provided in this section, to the
extent a transfer is voidable in an action by a creditor under

Section
24.008(a) (1)
of
this
code,
the
creditor
may
recover
judgment for the value of the asset transferred, as adjusted under

Subsection (c) of this section, or the amount necessary to satisfy
the creditor's claim, whichever
is less.
The
judgment may be
entered against:
(1)
the first transferee of the asset or the person for
whose benefit the transfer was made;

(2)
or
any subsequent transferee other than a good faith
transferee who took for value or from any subsequent transferee.

(c) (1)
Except
as
provided
8
by
Subdivision
(2)
of
this
subsection, if the judgment under Subsection (b) of this section is

based upon the value of the asset transferred, the judgment must be
for an amount equal to the value of the asset at the time of the
transfer, subject to adjustment as the equities may require.
(2)
The value of the asset transferred is not to be
adjusted to include the value of improvements made by a good faith

transferee, including:
(A)
physical additions or changes to the asset
(B)
repairs to the asset;
( C)
payment of any tax on the asset;
(D)
payment of any debt secured by a lien on the
transferred;
asset that is superior or equal to the rights of a voiding creditor

under this chapter;
and
(E)
(d) ( 1)
preservation of the asset.
Notwithstanding
voidability
of
transfer
or
an
obligation under this chapter, a good faith transferee or obligee

is entitled,
at
the transferee's or
obligee's
election,
to the
extent of the value given the debtor for the transfer or obligation,
to:
(A)
lien,
prior
to the
rights
of
voiding
creditor under this chapter, or a right to retain any interest in

the asset transferred;
(B)
enforcement of any obligation incurred;
or
( C)
a reduction in the amount of the liability on
the judgment.
(2)
Notwithstanding voidability of a transfer under
this chapter, to the extent of the value of any improvements made by

a good faith transferee, the good faith transferee is entitled to a
lien on the asset transferred prior to the rights of a voiding
creditor under this chapter
(e)
transfer is not voidable under Section 24.00S(a) (2) or
Section 24. 006 of this code if the transfer results from:
(1)
termination of a lease upon default by the debtor
when the termination is pursuant to the lease and applicable law;

or
(2)
enforcement of a security interest in compliance

9
with Chapter 9 of this code.

(f)
A transfer is not voidable under Section 24.006(b) of
this code:
(1)
to the extent the insider gave new value to or for
the benefit of the debtor after the transfer was made unless the new
value was secured by a valid lien;
(2)
if made
in the ordinary course
financial affairs of the debtor and the insider;

(3)
if
made
pursuant
rehabilitate the debtor
to
of business or
or
good-faith
and the transfer
effort
to
secured present value
given for that purpose as well as an antecedent debt of the debtor.

Sec. 24.010.
EXTINGUISHMENT OF CAUSE OF ACTION.
(a)
Except
as provided by Subsection (b) of this section, a cause of action

with respect to a fraudulent
transfer or obligation under this
chapter is extinguished unless action is brought:
(1)
four
years
under Section 24.00S(a)(l)
after
incurred or,
if
the
transfer
later,
was made
within one year
of this code, within
or
the
after
obligation was
the
transfer
or
obligation was or could reasonably have been discovered by the

claimant;
(2)
code,
within
under Section 24.005(a)(2)

four
years
obligation was incurred;

(3)
after
the
or 24.006(a)
transfer
was
of this
made
or
the
or
under Section 24.006(b) of this code, within one
year after the transfer was made.

(b)
A cause of action on behalf of a spouse, minor, or ward
with respect to a fraudulent transfer or obligation under this

chapter is extinguished unless the action is brought:
(1)
under Section 24.00S(a) or 24.006(a) of this code,
within two years after the cause of action accrues, or if later,

within one year
after
the transfer
or obligation was or
reasonably have been, discovered by the claimant;

(2)
under Section 24.006(b)
year after the date the transfer was made.

10
could
or
of this code within one
(c)
If a creditor entitled to bring an action under this
chapter is under a legal disability when a time period prescribed by

this section starts, the time of the disability is not included in
the period.
A disability that arises after the period starts does
not suspend the running of the period.
A creditor may not tack one
legal. disability to another to extend the period.
For the purposes
of this subsection, a creditor is under a legal disability if the

creditor is:
(1)
younger
than
whether the person is married;

( 2)
18
years
of
age,
regardless
of
or
of unsound mind.
Sec. 24. 011.
SUPPLEMENTARY PROVISIONS.
Unless displaced by
the provisions of this chapter, the principles of law and equity,

including the law merchant and the law relating to principal and
agent,
estoppel,
laches,
fraud,
misrepresentation,
duress,
coercion, mistake, insolvency, or other validating or invalidating

cause, supplement its provisions.
1987.
Sec. 24. 012.

This chapter
UNIFORMITY OF APPLICATION AND CONSTRUCTION.
shall be applied and construed to effectuate
its
general purpose to make uniform the law with respect to the subject
of this chapter among states enacting it.
1987.
Sec. 24.013.
COSTS.
In any proceeding under this chapter,
the court may award costs and reasonable attorney's fees as are
equitable and just.
Added by Acts 2003, 78th Leg., ch. 420, Sec. 1, eff. Sept. 1, 2003.
11
21.223. Limitation Of Liability For Obligations.

Texas Statutes
Business Organizations Code
Title 2. Corporations
Chapter 21. For-Profit Corporations
Subchapter E. Shareholder Rights And Restrictions
Current through the 2013 Regular and Special Sessions
21.223. Limitation Of Liability For Obligations

(a)
A holder of shares, an owner of any beneficial interest in shares, or a subscriber for

shares whose subscription has been accepted, or any affiliate of such a holder, owner, or
subscriber or of the corporation, may not be held liable to the corporation or its obligees
with respect to:
(1)
the shares, other than the obligation to pay to the corporation the full amount of
consideration, fixed in compliance with Sections 21.157-21.162, for which the
shares were or are to be issued;
(2)
any contractual obligation of the corporation or any matter relating to or arising

from the obligation on the basis that the holder, beneficial owner, subscriber, or
affiliate is or was the alter ego of the corporation or on the basis of actual or
constructive fraud, a sham to perpetrate a fraud, or other similar theory; or
(3)
any obligation of the corporation on the basis of the failure of the corporation to
observe any corporate formality, including the failure to:
(A)
comply with this code or the certificate of formation or bylaws of the

corporation; or
(8)
observe any requirement prescribed by this code or the certificate of

formation or bylaws of the corporation for acts to be taken by the
corporation or its directors or shareholders.
(b)
Subsection (a)(2) does not prevent or limit the liability of a holder, beneficial owner,
subscriber, or affiliate if the obligee demonstrates that the holder, beneficial owner,
subscriber, or affiliate caused the corporation to be used for the purpose of perpetrating
and did perpetrate an actual fraud on the obligee primarily for the direct personal benefit of
the holder, beneficial owner, subscriber, or affiliate.
Cite as Tex. Bus. Org. Code 21.223
History. Amended by Acts 2007, 80th Leg., R.S., Ch. 688, Sec. 74, eff. September 1, 2007.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
21.224. Preemption Of Liability.

Texas Statutes
21.224. Preemption Of Liability
The liability of a holder, beneficial owner, or subscriber of shares of a corporation, or any affiliate
of such a holder, owner, or subscriber or of the corporation, for an obligation that is limited by
Section 21.223 is exclusive and preempts any other liability imposed for that obligation under
common law or otherwise.
History. Amended by Acts 2009, 81st Leg., R.S., Ch. 84, Sec. 34, eff. September 1, 2009.
21.563. Closely Held Corporation.

Texas Statutes
Subchapter L. Derivative Proceedings
21.563. Closely Held Corporation

(a)
In this section, "closely held corporation" means a corporation that has:

(1)
fewer than 35 shareholders; and
(2)
no shares listed on a national securities exchange or regularly quoted in an overthe-counter market by one or more members of a national securities association.
(b)
Sections 21.552-21.559 do not apply to a closely held corporation.
(c)
If justice requires:
(1)
a derivative proceeding brought by a shareholder of a closely held corporation may

be treated by a court as a direct action brought by the shareholder for the
shareholder's own benefit; and
(2)
a recovery in a direct or derivative proceeding by a shareholder may be paid

directly to the plaintiff or to the corporation if necessary to protect the interests of
creditors or other shareholders of the corporation.
Pleadings in the district and county courts shall

(a)
be by petition and answer;
(b)
consist of a statement in plain and concise language of the plaintiff's cause of action
or the defendant's grounds of defense. That an allegation be evidentiary or be oflegal
conclusion shall not be grounds for objection when fair notice to the opponent is
given by the allegations as a whole; and
(c)
contain any other matter which may be required by any law or rule authorizing or
regulating any particular action or defense.
Pleadings that are not filed electronically must be in writing, on paper measuring approximately 8
1;i inches by 11 inches, and signed by the party or his attorney. The use of recycled paper is strongly
encouraged.
All pleadings shall be construed so as to do substantial justice.
RULE 46. PETITION AND ANSWER; EACH ONE INSTRUMENT OF WRITING

The original petition, first supplemental petition, second supplemental petition, and every other,
shall each be contained in one instrument of writing, and so with the original answer and each of the
supplemental answers.
RULE 47. CLAIMS FOR RELIEF

An original pleading which sets forth a claim for relief, whether an original petition, counterclaim,
cross-claim, or third party claim, shall contain
(a)
a short statement of the cause of action sufficient to give fair notice of the claim
involved;
(b)
a statement that the damages sought are within the jurisdictional limits of the court;
(c)
except in suits governed by the Family Code, a statement that the party seeks:
(1)
only monetary relief of $100,000 or less, including damages of any kind,

penalties, costs, expenses, pre-judgment interest, and attorney fees; or
(2)
monetary relief of $100,000 or less and non-monetary relief; or
(3)
monetary relief over $100,000 but not more than $200,000; or
(d)
(4)
monetary relief over $200,000 but not more than $1,000,000; or
(5)
monetary relief over $1,000,000; and
a demand for judgment for all the other relief to which the party deems himself.
entitled.
Relief in the alternative or of several different types may be demanded; provided, further, that upon
special exception the court shall require the pleader to amend so as to specify the maximum amount
claimed. A party that fails to comply with (c) may not conduct discovery until the party's pleading
is amended to comply.
Comment to 2013 change: Rule 4 7 is amended to require a more specific statement of the relief
sought by a party. The amendment requires parties to plead into or out of the expedited actions
process governed by Rule 169, added to implement section 22.004(h) of the Texas Government
Code. Except in a suit governed by the Family Code, the Property Code, the Tax Code, or Chapter
74 of the Civil Practice & Remedies Code, a suit in which the original petition contains the
statement in paragraph (c)( 1) is governed by the expedited actions process. The further specificity
in paragraphs (c)(2)-(5) is to provide information regarding the nature of cases filed and does. not
affect a party's substantive rights.
RULE 48. ALTERNATIVE CLAIMS FOR RELIEF

A party may set forth two or more statements of a claim or defense alternatively or hypothetically,
either in one count or defense or in separate cou11:ts or defenses. When two or more statements are
made in the alternative and one of them ifmade independently would be sufficient, the pleading is
not made insufficient by the insufficiency of one or more of the alternative statements. A party may
also state as many separate claims or defenses as he has regardless of consistency and whether based
upon legal or equitable grounds or both.
RULE 49. WHERE SEVERAL COUNTS

Where there are several counts in the petition, and entire damages are given, the verdict or judgment,
as the case may be, shall be good, notwithstanding one or more of such counts may be defeCtive.
RULE 50. PARAGRAPHS, SEPARATE STATEMENTS

All averments of claim or defense shall be made in numbered paragraphs, the contents of each of
which shall be limited as far as practicable to a statement of a single set of circumstances; and a
paragraph may be referred to by number in all succeeding pleadings, so long as the pleading
containing such paragraph has not been superseded by an amendment as provided by Rule 65. Each
claim founded upon a separate transaction or occurrence and each defense other than denials shall
be stated in a separate count or defense whenever a separation facilitates the clear presentation of
action, the party so served, in the absence of a responsive pleading, shall be deemed to have pleaded
a general denial of the counterclaim or cross-claim, but the party shall not be deemed to have waived
any special appearance or motion to transfer venue. In all other respects the rules prescribed for
pleadings of defensive matter are applicable to answers to counterclaims and cross-claims.
RULE 93. CERTAIN PLEAS TO BE VERIFIED
A pleading setting up any of the following matters, unless the truth of such matters appear of record,
shall be verified by affidavit.
1.
That the plaintiff has not legal capacity to sue or that the defendant has not legal
capacity to be sued.
2.
That the plaintiff is not entitled to recover in the capacity in which he sues, or that
the defendant is not liable in the capacity in which he is sued.
3.
That there is another suit pending in this State between the same parties involving
the same claim.
4.
That there is a defect of parties, plaintiff or defendant.
5.
A denial of partnership as alleged in any pleading as to any party to the suit.
6.
That any party alleged in any pleading to be a corporation is not incorporated as

alleged.
7.
Denial of the execution by himself or by his authority of any instrument in writing,

upon which any pleading is founded, in whole or in part and charged to have been
executed by him or by his authority, and not alleged to be lost or destroyed. Where
such instrument in writing is charged to have been executed by a person then
deceased, the affidavit shall be sufficient if it states that the affiant has reason to
believe and does believe that such instrument was not executed by the decedent or
by his authority. In the absence of such a sworn plea, the instrument shall be received
in evidence as fully proved.
8.
A denial of the genuineness of the indorsementor assignment of a written instrument

upon which suit is brought by an indorsee or assignee and in the absence of such a
sworn plea, the indorsement or assignment thereof shall be held as fully proved. The
denial required by this subdivision of the rule may be made upon information and
belief.
9.
That a written instrument upon which a pleading is founded is without consideration,

or that the consideration of the same has failed in whole or in part.
10.
A denial of an account which is the foundation of the plaintiffs action, and supported
by affidavit.
11.
That a contract sued upon is usurious. Unless such plea is filed, no evidence of
usurious interest as a defense shall be received.
12.
That notice and proof of loss or claim for damage has not been given as alleged.
Unless such plea is filed such notice and proof shall be presumed and no evidence
to the contrary shall be admitted. A denial of such notice or such proof shall be made
specifically and with particularity.
13.
In the trial of any case appealed to the court from the Industrial Accident Board the
following, if pleaded, shall be presumed to be true as pleaded and have been done
and filed in legal time and manner, unless denied by verified pleadings:
(a)
Notice of injury.
(b)
Claim for Compensation.
(c)
Award of the Board.
(d)
Notice of intention not to abide by the award of the Board.
(e)
Filing of suit to set aside the award.
(f)
That the insurance company alleged to have been the carrier of the workers'
compensation insurance at the time of the alleged injury was in fact the
carrier thereof.
(g)
That there was good cause for not filing claim with the Industrial Accident
Board within the one year period provided by statute.
(h)
Wage rate.
A denial of any of the matters set forth in subdivisions (a) or (g) of paragraph 13 may
be made on information and belief.
Any such denial may be made in original or amended pleadings; but if in amended
pleadings the same must be filed not less than seven days before the case proceeds
to trial. In case of such denial the things so denied shall not be presumed to be true,
and if essential to the case of the party alleging them, must be proved.
14.
That a party plaintiff or defendant is not doing business under an assumed name or
trade name as alleged.
15.
In the trial of any case brought against an automobile insurance company by an

insured under the provisions of an insurance policy in force providing protection
against uninsured motorists, an allegation that the insured has complied with all the
terms of the policy as a condition precedent to bringing the suit shall be presumed
to be true unless denied by verified pleadings which may be upon information and
belief.
16.
Any other matter required by statute to be pleaded under oath.
RULE 94. AFFIRMATIVE DEFENSES

In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction,
arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress,
estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment,
release, res judicata, statute of frauds, statute of limitations, waiver, and any other matter
constituting an avoidance or affirmative defense. Where the suit is on an insurance contract which
insures against certain general hazards, but contains other provisions limiting such general liability,
the party suing on such contract shall never be required to allege that the loss was not due to a risk
or cause coming within any of the exceptions specified in the contract, nor shall the insurer be
allowed to raise such issue unless it shall specifically allege that the loss was due to a risk or cause
coming within a particular exception to the general liability; provided that nothing herein shall be
construed to change the burden of proof on such issue as it now exists.
RULE 95. PLEAS OF PAYMENT

When a defendant shall desire to prove payment, he shall file with his plea an account stating
distinctly the nature of such payment, and the several items thereof; failing to do so, he shall not be
allowed to prove the same, unless it be so plainly and particularly described in the plea as to give
the plaintiff full notice of the character thereof.
RULE 96. NO DISCONTINUANCE

Where the defendant has filed a counterclaim seeking affirmative relief, the plaintiff shall not be
permitted by a discontinuance of his suit, to prejudice the right of the defendant to be heard on such
counterclaim.
RULE 97. COUNTERCLAIM AND CROSS-CLAIM

(a)
Compulsory Counterclaims. A pleading shall state as a counterclaim any claim within the
jurisdiction of the court, not the subject of a pending action, which at the time of filing the
pleading the pleader has against any opposing party, if it arises out of the transaction or
occurrence that is the subject matter of the opposing party's claim and does not require for
its adjudication the presence of third parties of whom the court cannot acquire jurisdiction;
provided, however, that a judgment based upon a settlement or compromise of a claim of one
party to the transaction or occurrence prior to a disposition on the merits shall not operate
as a bar to the continuation or assertion of the claims of any other party to the transaction or
occurrence unless the latter has consented in writing that said judgment shall operate as a
bar.
(b)
Permissive Counterclaims. A pleading may state as a counterclaim any claim against an
(m)
Written trial objections to the opposite party's exhibits, stating the basis for each
objection;
(n)
The advisability of a preliminary reference of issues to a master or auditor for

findings to be used as evidence when the trial is to be by jury;
(o)
The settlement of the case, and to aid such consideration, the court may encourage
settlement;
(p)
Such other matters as may aid in the disposition of the action.
The court shall make an order which recites the action taken at the pretrial conference, the
amendments allowed to the pleadings, the time within which same may be filed, and the agreements
made by the parties as to any of the matters considered, and which limits the issues for trial to those
not disposed of by admissions, agreements of counsel, or rulings of the court; and such order when
issued shall control the subsequent course of the action, unless modified at the trial to prevent
manifest injustice. The court in its discretion may establish by rule a pretrial calendar on which
actions may be placed for consideration as above provided and may either confine the calendar to
jury actions or extend it to all actions.
Pretrial proceedings in multidistrict litigation may also be governed by Rules 11 and 13 of the Rules
of Judicial Administration.
RULE 166a. SUMMARY JUDGMENT
(a)
For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to

obtain a declaratory judgment may, at any time after the adverse party has appeared or
answered, move with or without supporting affidavits for a summary judgment in his favor
upon all or any part thereof. A summary judgment, interlocutory in character, may be
rendered on the issue of liability alone although there is a genuine issue as to amount of
damages.
(b)
For Defending Party. A party against whom a claim, counterclaim, or cross-claim is

asserted or a declaratory judgment is sought may, at any time, move with or without
supporting affidavits for a summary judgment in his favor as to all or any part thereof.
(c)
Motion and Proceedings Thereon. The motion for summary judgment shall state the
specific grounds therefor. Except on leave of court, with notice to opposing counsel, the
motion and any supporting affidavits shall be filed and served at least twenty-one days
before the time specified for hearing. Except on leave of court, the adverse party, not later
than seven days prior to the day of hearing may file and serve opposing affidavits or other
written response. No oral testimony shall be received at the hearing. The judgment sought
shall be rendered forthwith if (i) the deposition transcripts, interrogatory answers, and other
discovery responses referenced or set forth in the motion or response, and (ii) the pleadings,
admissions, affidavits, stipulations of the parties, and authenticated or certified public
records, if any, on file at the time of the hearing, or filed thereafter and before judgment with
permission of the court, show that, except as to the amount of damages, there is no genuine
issue as to any material fact and the moving party is entitled to judgment as a matter oflaw
on the issues expressly set out in the motion or in an answer or any other response. Issues
not expressly presented to the trial court by written motion, answer or other response shall
not be considered on appeal as grounds for reversal. A summary judgment may be based on
uncontroverted testimonial evidence of an interested witness, or of an expert witness as to
subject matter concerning which the trier of fact must be guided solely by the opinion
testimony of experts, if the evidence is clear, positive and direct, otherwise credible and free
from contradictions and inconsistencies, and could have been readily controverted.
(d)
Appendices, References and Other Use of Discovery Not Otherwise on File. Discovery
products not on file with the clerk may be used as summary judgment evidence if copies of
the material, appendices containing the evidence, or a notice containing specific references
to the discovery or specific references to other instruments, are filed and served on all parties
together with a statement of intent to use the specified discovery as summary judgment
proofs: (i) at least twenty-one days before the hearing if such proofs are to be used to support
the summary judgment; or (ii) at least seven days before the hearing if such proofs are to be
used to oppose the summary judgment.
(e)
Case Not Fully Adjudicated on Motion. If summary judgment is not rendered upon the
whole case or for all the relief asked and a trial is necessary, the judge may at the hearing
examine the pleadings and the evidence on file, interrogate counsel, ascertain what material
fact issues exist and make an order specifying the facts that are established as a matter of
law, and directing such further proceedings in the action as are just.
(f)
Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall be made
on personal knowledge, shall set forth such facts as would be admissible in evidence, and
shall show affirmatively that the affiant is competent to testify to the matters stated therein.
Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be
attached thereto or served therewith. The court may permit affidavits to be supplemented or
opposed by depositions or by further affidavits. Defects in the form of affidavits or
attachments will not be grounds for reversal unless specifically pointed out by objection by
an opposing party with opportunity, but refusal, to amend.
(g)
When Affidavits Are Unavailable. Should it appear from the affidavits of a party opposing
the motion that he cannot for reasons stated present by affidavit facts essential to justify his
opposition, the court may refuse the application for judgment or may order a continuance to
permit affidavits to be obtained or depositions to be taken or discovery to be had or may
make such other order as is just.
(h)
Affidavits Made in Bad Faith. Should it appear to the satisfaction of the court at any time
that any of the affidavits presented pursuant to this rule are presented in bad faith or solely
for the purpose of delay, the court shall forthwith order the party employing them to pay to
the other party the amount of the reasonable expenses which the filing of the affidavits
caused him to incur, including reasonable attorney's fees, and any offending party or attorney
may be adjudged guilty of contempt.
(i)
No-Evidence Motion. After adequate time for discovery, a party without presenting
summary judgment evidence may move for summary judgment on the ground that there is
no evidence of one or more essential elements of a claim or defense on which an adverse
party would have the burden of proof at trial. The motion must state the elements as to which
there is no evidence. The court must grant the motion unless the respondent produces
summary judgment evidence raising a genuine issue of material fact.
[RULE 166b. Repealed effective January 1, 1999]
[RULE 166c. Repealed effective January 1, 1999]
RULE 167. OFFER OF SETTLEMENT; AWARD OF LITIGATION COSTS

167.1. Generally.
Certain litigation costs may be awarded against a party who rejects an offer made substantially in
accordance with this rule to settle a claim for monetary damages - including a counterclaim,
crossclaim, or third-party claim - except in:
(a)
a class action;
(b)
a shareholder's derivative action;
(c)
an action by or against the State, a unit of state government, or a political subdivision

of the State;
(d)
an action brought under the Family Code;
(e)
an action to collect workers' compensation benefits under title 5, subtitle A of the

Labor Code; or
(t)
an action filed in a justice of the peace court or small claims court.
167.2. Settlement Offer

(a)
Defendant's declaration a prerequisite; deadline. A settlement offer under this rule may not
be made until a defendant -- a party against whom a claim for monetary damages is made -files a declaration invoking this rule. When a defendant files such a declaration, an offer or
offers may be made under this rule to settle only those claims by and against that defendant.
The declaration must be filed no later than 45 days before the case is set for conventional
trial on the merits.
(b)
Requirements ofan offer. A settlement offer must:
( 1)
be in writing;
(2)
state that it is made under Rule 167 and Chapter 42 of the Texas Civil Practice and
Remedies Code;
(3)
identify the party or parties making the offer and the party or parties to whom the
(4)
Controlling Effect of a Party Agreement. An agreement on the effect of

disclosure in a state proceeding of any state is binding only on the parties
to the agreement, unless it is incorporated into a court order.
Comment to 2015 Restyling: The amendments to Rule 511 are designed to align Texas law with
federal law on waiver of privilege by voluntary disclosure. Subsection (a) sets forth the general
rule. Subsection (b) incorporates the provisions of Federal Rule of Evidence 502. Like the
federal rule, subsection (b) only addresses disclosure of communications or information covered
by the lawyer-client privilege or work-product protection. These amendments do not affect the
law governing waiver of other privileges or protections.
Rule512.
Privileged Matter Disclosed Under Compulsion or Without Opportunity to

Claim Privilege
A privilege claim is not defeated by a disclosure that was:

(a)
compelled erroneously; or
(b)
made without opportunity to claim the privilege.
Rule 513.
Comment On or Inference From a Privilege Claim; Instruction
(a)
Comment or Inference Not Permitted. Except as permitted in Rule 504(b)(2), neither the
court nor counsel may comment on a privilege claim-whether made in the present
proceeding or previously-and the factfinder may not draw an inference from the claim.
(b)
Claiming Privilege Without the Jury's Knowledge. To the extent practicable, the court
must conduct a jury trial so that the making of a privilege claim is not suggested to the jury
by any means.
(c)
Claim of Privilege Against Self-Incrimination in a Civil Case. Subdivisions (a) and (b)
do not apply to a party's claim, in the present civil case, of the privilege against
self-incrimination.
(d)
Jury Instruction. When this rule forbids a jury from drawing an inference from a privilege
claim, the court must, on request of a party against whom the jury might draw the
inference, instruct the jury accordingly.
ARTICLE VI.
WITNESSES
Rule 601.
Competency to Testify in General; "Dead Man's Rule"
32
(a)
(b)
In General. Every person is competent to be a witness unless these rules provide

otherwise. The following witnesses are incompetent:
(1)
Insane Persons. A person who is now insane or was insane at the time of the
events about which the person is called to testify.
(2)
Persons Lacking Sufficient Intellect. A child-or any other person-whom the

court examines and finds lacks sufficient intellect to testify concerning the matters
in issue.
The "Dead Man's Rule."

(1)
Applicability. The "Dead Man's Rule" applies only in a civil case:

(A)
by or against a party in the party's capacity as an executor, administrator, or

guardian; or
(B)
by or against a decedent's heirs or legal representatives and based in whole

or in part on the decedent's oral statement.
(2)
General Rule. In cases described in subparagraph (b)(l)(A), a party may not testify
against another party about an oral statement by the testator, intestate, or ward. In
cases described in subparagraph (b)(I)(B), a party may not testify against another
party about an oral statement by the decedent.
(3)
Exceptions. A party may testify against another party about an oral statement by
the testator, intestate, ward, or decedent if:
(4)
(A)
the party's testimony about the statement is corroborated; or
(B)
the opposing party calls the party to testify at the trial about the statement.
Instructions. If a court excludes evidence under paragraph (b)(2), the court must
instruct the jury that the law prohibits a party from testifying about an oral
statement by the testator, intestate, ward, or decedent unless the oral statement is
corroborated or the opposing party calls the party to testify at the trial about the
statement.
Comment to 2015 Restyling: The text of the "Dead Man's Rule" has been streamlined to clarify
its meaning without making any substantive changes. The text of former Rule 601(b) (as well as
its statutory predecessor, Vernon's Ann. Civ. St. art. 3716) prohibits only a "party" from
testifying about the dead man's statements. Despite this, the last sentence of former Rule 601 (b)
requires the court to instruct the jury when the rule "prohibits an interested party or witness"
from testifying. Because the rule prohibits only a "party" from testifying, restyled Rule 601(b)(4)
references only "a party," and not "an interested party or witness." To be sure, courts have
indicated that the rule (or its statutory predecessor) may be applicable to a witness who is not
33
nominally a party and inapplicable to a witness who is only nominally a party. See, e.g.,
Chandler v. Welborn, 156 Tex. 312, 294 S.W.2d 801, 809 (1956); Ragsdale v. Ragsdale, 142
Tex. 476, 179 S.W.2d 291, 295 (1944). But these decisions are based on an interpretation of the
meaning of "party." Therefore, limiting the court's instruction under restyled Rule 601 (b)(4) to
"a party" does not change Texas practice. In addition, restyled Rule 601(b) deletes the sentence
in former Rule 601 (b) that states "[ e]xcept for the foregoing, a witness is not precluded from
giving evidence ... because the witness is a party to the action ... " This sentence is surplusage.
Rule 601(b) is a rule of exclusion. If the testimony falls outside the rule of exclusion, its
admissibility will be determined by other applicable rules of evidence.
Rule 602.
Need for Personal Knowledge
A witness may testify to a matter only if evidence is introduced sufficient to support a finding
that the witness has personal knowledge of the matter. Evidence to prove personal knowledge
may consist of the witness's own testimony. This rule does not apply to a witness's expert
testimony under Rule 703.
Rule 603.
Oath or Affirmation to Testify Truthfully
Before testifying, a witness must give an oath or affirmation to testify truthfully. It must be in a
form designed to impress that duty on the witness's conscience.
Rule 604.
Interpreter
An interpreter must be qualified and must give an oath or affirmation to make a true translation.
Rule 605.
Judge's Competency as a Witness
The presiding judge may not testify as a witness at the trial. A party need not object to preserve
the issue.
Rule 606.
Juror's Competency as a Witness
(a)
At the Trial. A juror may not testify as a witness before the other jurors at the trial. If a
juror is called to testify, the court must give a party an opportunity to object outside the
jury's presence.
(b)
During an Inquiry into the Validity of a Verdict or Indictment.

(1)
Prohibited Testimony or Other Evidence. During an inquiry into the validity of a

verdict or indictment, a juror may not testify about any statement made or incident
34
ACCEPTED
02-14-00286-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
12/29/2014 12:00:00 AM
DEBRA SPISAK
CLERK
Case No. 02-14-00286-CV

IN THE COURT OF APPEALS FOR THE
Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
Appellees
_______________________________________________
Appealed from the 48TH District Court of Tarrant County, Texas
Cause No. 48-243228-10; Honorable David L. Evans, Presiding
________________________________________________________________
APPELLANTS BRIEF
________________________________________________________________
Mayur Amin
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
ATTORNEY FOR APPELLANT.
Available for Oral Argument If It Would Significantly Aid the Decisional
Process. Tex. R. App. P. 39.1(d); Local Rule 4A
Case No. 02-14-00286-CV

Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
J. SHELBY SHARPE, HENRY CHANG, KAREN CHANG &
THE LAW OFFICES OF J. SHELBY SHARPE,
Appellees
________________________________________________
_________________________________________________
APPELLANT:
Represented By:

Mayur Amin
TX Bar No. 00790227
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
APPELLEES:
Represented By:
APPELLEES:
Represented By:

John W. Proctor
TX Bar No. 16347300
Ph. 817-332-1391
Fax 817-870-2427
Mr. Henry Chang &

Mrs. Karen Chang
TX Bar No. 17955500
Ph. 817-332-2500
Fax 817-878-9280
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL....i
INDEX OF AUTHORITIES...x
ABBREVIATIONS ...xxv
RECORD REFERENCES.....xxvi
STATEMENT OF THE CASE.xxvii
ISSUES PRESENTEDxxviii
STANDARDS OF REVIEW..xxx
STATEMENT OF PROCEDURAL HISTORY.xxxiii
STATEMENT OF FACTS.........1
ARGUMENT....12
I.
On June 17, 2014, the court erred in granting Sharpes fourth motion to
disqualify Amin because Sharpe: (1) waived the right to seek disqualification by
delay, (2) failed to show actual prejudice as required for a Rule 3.08(a)
disqualification, and (3) failed to meet his burden of proof on the substantive
elements of such a disqualification...12
II.
On June 17, 2014, the court erred in granting Sharpes (third and fourth)
motions for summary judgment....21
II-A. The court erred in granting judgment on any unpleaded claims or
defenses because appellant objected to the trying of the same through
summary judgment.21
iii
II-B. The court erred in granting judgment on appellants breach of

fiduciary duty claim because appellant produced more than a scintilla of
evidence on each element...22
1.0 More than a scintilla of evidence shows that Sharpe was
appellants attorney..23
2.1 More than a scintilla of evidence shows that Sharpe breached
his fiduciary duty by using the knowledge he gained from appellant
about the existence of a dispute to further pit appellant against his
opponents; only to then side with the party where he stood most to
gain financially28
his fiduciary duty to appellant by unlawfully switching sides on the
same matter...40
his fiduciary duties by failing to intermediate in good faith, without
deception, and/or impartially43
his fiduciary duty to timely withdraw from defending the primary
defendants in this suit...47
3.1 More than a scintilla of evidence shows that Sharpes breach
injured appellant...49
3.2 More than a scintilla of evidence shows that Sharpe benefitted
from the breach.52
II-C. The court erred in granting judgment on appellants conspiracy

claims because appellant produced more than a scintilla of evidence as to
each element...54
1.0 More than a scintilla of evidence shows that two or more
persons were involved....55
iv
2.1 More than a scintilla of evidence shows that one of the objects
to be accomplished was to defend WFFI against appellants
shareholder rights claims..56
2.2 More than a scintilla of evidence shows that the other object
to be accomplished was to maliciously suppress, convert and/or
divert dividend monies owed to appellant57
3.1 More than a scintilla of evidence shows that Sharpe and WFFI
had a meeting of the minds for Sharpe to defend WFFI against
appellants shareholder rights claims...58
3.2 More than a scintilla of evidence shows that Sharpe and WFFI
had a meeting of the minds for WFFI to maliciously suppress,
convert, and/or divert dividend monies owed to appellant...59
4.0 More than a scintilla of evidence shows that one or more
unlawful, overt acts were committed by Sharpe or WFFI in
furtherance of the conspiracies.59
5.1 More than a scintilla of evidence shows that appellants
damages were a proximate result of the wrongful acts underlying the
conspiracies and/or Sharpes direct fiduciary breach...62
5.2 More than a scintilla of evidence shows that appellant
suffered monetary damages as a result of the wrongful acts
underlying the conspiracies and/or Sharpes direct fiduciary
breach...63
II-D. The court erred in barring appellants claims based on any
limitations defense because (1) a two-year negligence limitations period
does not apply as Sharpe argues, (2) Sharpe failed to meet his burden to
show when appellants claims accrued, and (3) more than a scintilla of
evidence shows that appellants claims accrued within the applicable fouryear limitations period64
II-E. The court erred by failing to take judicial notice of pertinent

adjudicative facts and by overruling appellants proper objections to
Sharpes summary judgment motions and evidence..66
II-F. The court erred by granting Sharpe more relief than requested in his
summary judgment motions...68
III. On September 26th and November 14th, 2011, the court erred by denying
appellants motion to compel seeking discovery of non-privileged information
that goes to the crucial element of fiduciary breach.69
IV. On October 23, 2013, the court erred by severing appellants TUFTA claims
against Sharpe from his common law tort claims against Sharpe. Given the more
efficient and convenient option of bifurcation, Sharpe did not show how he would
be prejudiced by denial of his motion to sever. Further, Sharpe judicially admits
that the TUFTA claims against him (as the debtor) are not independent of the
common law tort claims..........................................................................................71
V.
On October 25, 2013, the court erred by abating appellants TUFTA claims.
Appellant is entitled to file a TUFTA claim based on pending, unliquidated tort
claims and there is no evidentiary threshold he must cross before seeking TUFTA
discovery or relief....75
VI. On June 24, 2014, the court erred by denying appellants motion to compel
supplemental net-worth discovery responses. Appellant is legally entitled to know
information about Sharpes current net-worth in this punitive damages
case..77
VII. On July 24, 2013, October 15, 2013, and May 6, 2014, the court erred by
denying appellants motions to compel his third set of discovery requests.
Appellant is legally entitled to discover the financial information sought because it
relates to appellants TUFTA claims and/or to the issue of Sharpes net-worth in
the context of proving exemplary damages.78
vi
VIII. On October 22, 2013, the court erred in granting Sharpes motion for
protective order because it precludes appellant from filing discovery materials
which constitute court records.84
IX. On June 17, 2014, the court erred in granting the Changs motion for
summary judgment....86
IX-A. The court erred in granting judgment on any unpleaded claims or
summary judgment.....86
IX-B. The court erred by failing to take judicial notice of pertinent
adjudicative facts and by overruling appellants proper objections to the
Changs summary judgment motion...87
IX-C. The court erred in granting the Changs summary judgment because
their no-evidence motion is (a) legally insufficient with respect to any
claims or defenses where they failed to state the specific challenged
element as to which there is no evidence and (b) improper with respect
to any defensive elements where they have the burden of proof at
trial..88
IX-D. The court erred in finding, as a matter of law, that there is no
fiduciary duty owed by the Changs, as majority shareholders, to appellant,
as a minority shareholder. The Texas Supreme Court has not foreclosed
the existence of such a duty and several other Texas courts have
specifically recognized it92
IX-E. The court erred in granting the Changs judgment based on 21.223
and 21.224 of the Tex. Bus. Orgs. Code because those sections do not
foreclose the Changs liability for conduct committed in their capacity as
the officers and directors of WFFI; as compared to their capacity as
shareholders of WFFI.95
vii
IX-F. The court erred in finding that the Changs are not jointly and
severally liable with Sharpe for the attorneys fees incurred by appellant to
have Sharpe ordered permanently withdrawn from defending them in
this suit. More than a scintilla of evidence shows that the Changs
knowingly participated in Sharpes breach of his fiduciary duty not to
switch sides on the same matter..96
IX-G. The court erred in granting the Changs summary judgment based on
any legal argument or theories that they cannot, as a matter of law, be held
individually liable for damages arising from WFFIs breach of its
employment contract with appellant. Such liability can accrue to them
through their knowing participation in Sharpes fiduciary breach.98
IX-H. The court erred in granting the Changs summary judgment based on
any legal argument or theories that all of appellants damages necessarily
arise only out of breach of contract claims against WFFI for which the
Changs cannot be held individually liable. Disparate treatment by
controlling directors of a minority shareholders rights emanating from
stock ownership can constitute a fiduciary breach...102
IX-I. The court erred in granting the Changs summary judgment against
appellant on any pleaded claims or defenses because appellant produced
more than a scintilla of evidence as to all challenged
elements....108
IX-J. The court erred by granting the Changs more relief than requested in
their summary judgment motion...118
X.
On October 23, 2013, the court erred by severing appellants common law
tort claims against the Changs from his TUFTA claims against them, as the
debtor(s). Given the more efficient and convenient option of bifurcation, the
Changs did not show how they would be prejudiced by denial of their motion to
sever120
XI. On October 25, 2013, the court erred by abating appellants TUFTA
claims. Appellant is entitled to file a TUFTA claim based on pending,
unliquidated tort claims and there is no evidentiary threshold he must cross
before seeking TUFTA discovery or relief.....122
viii
XII. On June 24, 2014, the court erred by denying appellants motion to compel
supplemental net-worth related discovery responses. Appellant is legally entitled
to know information about the Changs current net-worth in this punitive
damages case...123
XIII. On July 24, 2013, October 15, 2013, and on May 6, 2014, the court erred
by denying appellants motions to compel his third set of discovery requests.
Appellant is legally entitled to discover the financial information sought because
it relates to appellants TUFTA claims and/or to the issue of the Changs networth in the context of proving exemplary damages..124
XIV. On August 12, 2014 the court erred by severing, into a separate cause
number, appellants claims against WFFI from his claims against the Changs.
Severance is not proper if the claim to be severed is so interwoven with the
remaining claims that two trials will involve the same facts and legal
issues...127
XV. On November 3, 2014, the court erred in denying appellants motion for
leave to supplement his pleadings to include facts about WFFIs closely-held
corporation status because the Changs cannot and/or did not show
surprise....130
XVI. On November 3, 2014, the court erred in denying appellants motion to
reconsider Item #3 in its January 22, 2013 liminie order, predicated in part on
appellants motion to withdraw his stipulation to the same. The Changs can show
no prejudice from appellants withdrawal of his stipulation and under Texas law a
new trial may be granted in the interest of justice if it appears that a party may
have proceeded under the wrong legal theory131
PRAYER.135
CERTIFICATIONS....136
APPENDIX...END
ix
STATUTES:
Tex. Bus. & Com. Code 24.001 et seq. (TUFTA)...passim
Tex. Bus. & Com. Code 24.005......73
Tex. Bus. & Com. Code 24.006..73
Tex. Bus. & Com. Code 24.008(a)(3)(C)..72-73
Tex. Bus. & Com. Code 24.010(a).....78
Tex. Bus. & Com. Code 24.012..72
Tex. Bus. Orgs. Code 1.002....95
Tex. Bus. Orgs. Code 21.223....9, 86, 95
Tex. Bus. Orgs. Code 21.224..9, 95
Tex. Bus. Orgs. Code 21.563(b)...134
Tex. Bus. Orgs. Code 21.563(c)(2)..103-04, 134
Tex. Civ. Prac. & Rem. Code 16.004(a)...65, 88
Tex. Civ. Prac. & Rem. Code 41.009.....72, 120
Tex. Civ. Prac. & Rem. Code 41.011(a).....72, 127
Tex. Civ. Prac. & Rem. Code 154.055(a)...21
Tex. R. App. P. 9.9(a)...85

Tex. R. App. P. 9.9(b)...85
Tex. R. App. P. 13.1(a).................84
Tex. R. App. P. 13.1(c).84
Tex. R. Civ. P. 63....130
Tex. R. Civ. P. 93....102, 122, 130
Tex. R. Civ. P. 76a....84
Tex. R. Civ. P. 76a (1)(b)..84
Tex. R. Civ. P. 166(l)....15
Tex. R. Civ. P. 166a...passim
Tex. R. Civ. P. 166a(c)....xxxi, 67
Tex. R. Civ. P. 166a(d).84
Tex. R. Civ. P. 166a(f)..67
Tex. R. Civ. P. 166a(i)...xxxi, 88, 89, 108
Tex. R. Civ. P. 192.3.....81
Tex. R. Civ. P. 193.5.....xxxix, xliv, 77, 123
Tex. R. Civ. P. 215.6.....84
xi
Tex. Disciplinary R. Prof. Conduct Preamble...24, 41, 43

Tex. Disciplinary R. Prof. Conduct 1.05...23, 28, 64
Tex. Disciplinary R. Prof. Conduct 1.07...21, 24, 42-43, 47, 59, 64
Tex. Disciplinary R. Prof. Conduct 1.09...23, 40, 42, 64, 90, 96, 99, 115
Tex. Disciplinary R. Prof. Conduct 3.08(a)...7, 12, 15-18
Tex. R. Evid. 106..19
Tex. R. Evid. 107..19
Tex. R. Evid. 201....66, 87
Tex. R. Evid. 503(a)..23
Tex. R. Evid. 503(d)..70
Tex. R. Evid. 803..19
Tex. R. Evid. 803(6)........12, 19
Tex. R. Evid. 902(10)12, 18-20
CASES:
Abelow v. Symonds,
156 A.2d 416, 420 (Del. Ch. 1959).....132
A. Copeland Enters. Inc. v. Guste,
706 F. Supp. 1283 (W.D. Tex. 1989)....94
Ayres v. Canales,
790 S.W.2d 554 (Tex. 1990)...14-15
xii
Baja Energy, Inc. v. Ball,

669 S.W.2d 836 (Tex.App.-Eastland 1984, no writ)96
Beasley v. Burns,
7 S.W.3d 768 (Tex.App.-Texarkana 1999).66, 87
Behrens v. Aerial Communications, Inc.,
No. Civ. A 17436, 2001 WL 599870 (Del. Ch. 2001)........132
Bellows v. San Miguel,
2002 WL 835667 (Tex.App.-Houston [14th Dist.] 2002, pet. denied)...46, 62
Bernstein v. Portland Sav. & Loan Ass'n,
850 S.W.2d 694 (Tex.App.-Corpus Christi 1993, writ denied)55
Blackthorne v. Bellush,
61 S.W.3d 439 (Tex.App.-San Antonio 2001, no pet.).75
Boulet v. State,
189 S.W.3d 833, (Tex.App.-Houston [1st Dist.] 2006, no pet.)67, 133
Brantley v. Etter,
662 S.W.2d 752 (Tex.App.-San Antonio 1983), ref. n.r.e, 677 S.W.2d 503 (Tex.
1984)...44, 45, 51, 58
Braun v. Valley Ear Nose and Throat Specialist,
611 S.W.2d 470 (Tex.Civ.App.-Corpus Christi 1980, no writ)40
Brazos Elec. Power Coop. v. Weatherford ISD,
453 S.W.2d 185 (Tex.App.-Fort Worth 1970, writ refd n.r.e)76, 122
Bryant v. Lewis,
27 S.W.2d 604 (Tex.Civ.App.-Austin 1930, writ dismd w.o.j.)..42
Butler v. Whitten,
No. 02-13-00306-CV (Tex.App.-Fort Worth January 2, 2014, no pet.)
(mem. op.)...129
xiii
Cal-Tex Lumber Co., Inc. v. Owens Handle Co., Inc.,

989 S.W.2d 802 (Tex.App.-Tyler, 1999 no pet.)..89
Cantu v. Butron,
921 S.W.2d 344 (Tex.App.-Corpus Christi 1996, writ denied)....45
Cardiac Perfusion Service, Inc. v. Hughes,
No. 13-0014 (Tex. June 27, 2014)..133
Casso v. Brand,
776 S.W.2d 551 (Tex. 1989) 67
Castaneda v. Texas Dep't of Agric.,
831 S.W.2d 501 (Tex.App.-Corpus Christi 1992, writ denied)55
City of Keller v. Wilson,
168 S.W.3d 802 (Tex. 2005).xxxii
Cotten v. Weatherford Bancshares, Inc., 187 S.W.3d 687 (Tex. App.Fort Worth
2006)....99, 108-10
Crown Life Ins. Co. v. Casteel,
22 S.W.3d 378 (Tex.2000)56
Dallas Fire Insurance Co. v. Texas Contractors Surety,
128 S.W.3d 279 (Tex. App.Fort Worth 2004)..105
Dallas ISD v. Finlan,
27 S.W.3d 220 (Tex.App.-Dallas 2000, pet. denied)....56
Davis v. Sheerin,
754 S.W.2d 375 (Tex.App. Houston [1 Dist.] 1988)....92, 103, 106
Dolenz v. Continental Natl Bank,
620 S.W.2d 572 (Tex. 1981)...xxx
Duncan v. Lichtenberger,
671 S.W.2d 948 (Tex. App.Fort Worth 1984, writ ref'd n.r.e.)92, 107
Durham v. Durham, 871 A.2d 41 (N.H. 2005)...103, 134
xiv
Estate of Arlitt v. Paterson,

995 S.W.2d 713 (Tex.App.-San Antonio 1999, pet. denied)..51, 96
Farah v. Mafrige & Kormanik, P.C.,
927 S.W.2d 663 (Tex.App.-Houston [1st Dist.] 1996, no writ)..105
Favila v. Katten Muchin Foseman, LLP,
2010 WL 3448606, (Cal. Dist. Ct. App.) (2010)..56
Financial General Bankshares, Inc. v. Metzger,
523 F. Supp. 744 (D.C. 1981)...42
First General Realty Corp. v. Maryland Cas. Co.,
981 S.W.2d 495 (Tex.App.-Austin 1998, no pet.)..65, 89
Flores v. State,
155 S.W.3d 144 (Tex.Crim.App. 2004)....16
Ford Motor Co. v. Ridgway,
135 S.W.3d 598 (Tex.2004)..xxxii
Fojtik v. First Natl Bank,
752 S.W.2d 669 (Tex.App.-Corpus Christi 1988), writ denied, 775 S.W.2d
632(Tex. 1989)110
General Resources Organization, Inc. v. Deadman,
907 S.W.2d 22, 28 (Tex.App.-San Antonio 1995, no writ)....128
General Tire, Inc. v. Kepple,
970 S.W.2d 520 (Tex. 1998)...xxx
Goffney v. Rabson,
56 S.W.3d 186 (Tex.App.-Houston [14th Dist.] 2001, no pet.)..28, 43
Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754 (Tex. 2007).....xxxii
Grimes v. Donald,
673 A.2d 1207 (Del. 1996).....132
xv
Guar. Fed. Savs. Bank v. Horseshoe Operating Co.,

793 S.W.2d 652 (Tex.1990) (op. on reh'g)...71
Hansen v. Cramer,
39 Cal. 2d 321, 245 P.2d 1059, 30 A.L.R2d 458 (1968)..76
Hasely v. Whitten,
580 S.W.2d 104 (Tex.App.-Waco 1979, no writ).....47
Hersbach v. City of Corpus Christi,
883 S.W.2d 720 (Tex.App.-Corpus Christi 1994, writ denied)....57, 109
Hinds v. Southwestern Savings Assn,
562 S.W.2d 4 (Tex.Civ.App.-Beaumont 1977, writ refd n.r.e.)..57, 109
Holt v. Heine,
835 S.W.2d 80 (Tex. 1992).....44, 58, 60, 99, 110
Hoover Slovacek LLP v. Walton,
206 S.W.3d 557 (Tex. 2006).....28
Huie v. DeShazo,
922 S.W.2d 920 (Tex. 1996)..xxxi
In re Allied Chemical Corp.,
227 S.W.3d 652 (Tex. 2007, orig. proceeding).......xxx
In re Allstate Texas Lloyds,
202 S.W.3d 895 (Tex.App.-Corpus Christi-Edinburg 2006, orig.
proceeding)....71
In re Arthur Anderson,
121 S.W.3d 471 (Tex.App.-Houston [14th Dist.] 2003, orig. proceeding)...54
In re Bahn,
13 S.W.3d 865 (Tex.App.-Fort Worth 2000, orig. proceeding)....12, 15-16
In re Colonial Pipeline Co.,
968 S.W.2d 938 (Tex. 1998, orig. proceeding).81
xvi
In re El Paso County Hosp. Dist.,

979 S.W.2d 10 (Tex.App. - El Paso 1998, orig. proceeding)xxxi
In re Frost,
No. 12-08-00154-CV, 2008 Tex. App. LEXIS 3700 (Tex.App.-Tyler May 21,
2008, orig. proceeding).....16
In re Guidry,
316 S.W.3d 729 (Tex.App.-Houston [14th Dist.] 2010, orig. proceeding)...20
In re Hormachea,
No. 04-04-00581-CV, 2004 WL 2597447 (Tex. App.San Antonio Nov. 17,
2004, orig. proceeding).16
In re Mark A. Jacobs,
300
S.W.3d
35
(Tex.App.-Houston
[14
Dist.]
2009,
orig.
proceeding)..77, 78, 123
In re N.C.M.,
66 S.W.3d 417 (Tex.App.Tyler 2001, orig. proceeding)19
In re Prudential Ins. Co. of America,
148 S.W.3d 124 (Tex. 2004, orig. proceeding)...128
In re Sanders,
In re State,
355 S.W.3d 611 (Tex. 2011, orig. proceeding).72, 120, 127
In Re Van Waters & Rogers, Inc.,
In re Williams,
328
S.W.3d
103
(Tex.App.-Corpus
Christi
2010
orig.
proceeding).82-85, 125-26
International Bankers Life Ins. Co. v. Holloway,
368 SW 2d 567 (Tex. 1963)..55
xvii
Jim Walter Homes, Inc. v. Reed,

711 S.W.2d 617 (Tex. 1986)...134
Jones v. H. F. Ahmanson & Co.,
1 Cal. 3d 93, 107 (Cal. 1969)..132
K & G Tool & Serv. Co. v. G & G Fishing Tool Serv.,
314 S.W.2d 782 (Tex.1958)..98, 108, 127
Keck, Mahin & Cate v. National Un. Fire Ins. Co.,
20 S.W.3d 692 (Tex. 2000).....28, 43
Kern v. Gleason,
840 S.W.2d 730, 735-37 (Tex.App.-Amarillo 1992, orig. proceeding)..72, 81
Kindred v. Con/Chem, Inc.,
650 S.W.2d 61 (Tex.1983)..xxxiii
Kinzbach Tool Co. v. Corbett-Wallace Corp.,
160 S.W.2d 509 (Tex. 1942).56, 96, 98, 104, 109, 128
Kirby v. Cruce,
688 S.W.2d 161 (Tex.App.-Dallas 1985, writ refd n.r.e)57, 129
KPMG Peat Marwick v. Harrison County Housing Finance Corp.,
988 S.W.2d 746 (Tex. 1999)...64, 88
Krohn v. Marcus Cable Associates, L.P.,
201 S.W.3d 876 (Tex.App.-Waco 2006)..89
Latham v. Castillo,
972 S.W.2d 66 (Tex. 1998)...46, 62, 64
Lesikar v. Rappeport,
33 S.W.3d 282 (Tex.App.-Texarkana 2000, pet. denied). ...55
Leyendecker & Assocs., Inc. v. Wechter,
683 S.W.2d 369 (Tex.1984)....108, 127
xviii
Lunsford v. Morris,
746 S.W.2d 471 (Tex.1988)75, 77, 123
MacDonald v. Follett,
180 S.W.2d 334 (Tex. 1944).52
Manges v. Guerra,
673 S.W.2d 180 (Tex. 1984)...102
Marshall v. Vise,
767 S.W.2d 699 (Tex.1989)66, 87
Massey v. Armco Steel Co.,
652 S.W.2d 932 (Tex. 1983).54
May v. Crofts,
868 S.W.2d 397 (Tex.App.-Texarkana 1993, orig. proceeding)..18
Mayflower Investment Company et al. v. Stephens,
345 S.W.2d 786 (Tex.Civ.App.--Dallas 1960, writ ref'd n.r.e.).118
Merrell Dow Pharmaceuticals, Inc. v. Havner,
953 S.W.2d 706 (Tex.1997)xxx
Metropolitan Life Ins. Co. v. Syntek Finance Corp.,
881 S.W.2d 319 (Tex. 1994)..xxxi-ii
Mitchell v. LaFlamme,
60 S.W.3d 123 (Tex.App.-Houston [14th Dist.] 2000, no pet.)...133
Morrison v. St. Anthony Hotel,
295 S.W.2d 246 (Tex.Civ.App.-San Antonio 1956, writ ref'd n.r.e.)...93
Mott v. Red's Safe and Lock Services, Inc.,
249 S.W.3d 90 (Tex.App.-Houston [1 Dist.] 2007, no pet.).....88
Neely v. Wilson,
418 S.W.3d 52 (Tex. 2013).108
xix
Nolan v. Forman,
665 F.2d 738 (5th Cir. 1982).....23
Pabich v. Kellar,
71 S.W.3d 500 (Tex.App.-Fort Worth 2002, pet. denied)..109
Parr v. State,
557 S.W.2d 99 (Tex.Crim.App. 1977)..19
Patton v. Nicholas,
279 S.W.2d 848 (Tex. 1955)...57, 92, 102, 106, 109, 127
Peavy v. WFAA-TV,
221 F.3d 158 (5th Cir. 2000) .56
Peeler v. Hughes & Luce,
909 S.W.2d 494 (Tex. 1995).22
Peeples v. Honorable Fourth Supreme Judicial Dist.,
701 S.W.2d 635 (Tex.1985) (orig. proceeding)81
Permian Petroleum Co. v. Barrow,
484 S.W.2d 631 (Tex.Civ.App.-El Paso 1972, no writ).108
Pinnacle Data Services, Inc. v. Gillen,
104 S.W.3d 188 (Tex.App.-Texarkana 2003)...68, 118
Portlock v. Perry,
852 S.W.2d 578, 582 (Tex.App.-Dallas 1993, writ denied)..108-09, 114
Preston Gate, LP v. Bukaty,
248 S.W. 3d 892 (Tex.App.-Dallas 2008, no pet.)...54
Randall, LP v. BAC Home Loans Servicing, LP
No. 4:11-CV-182, 2012 U.S. Dist. LEXIS 72342
(E.D. Tex. May 24, 2012).16, 17, 20
Redmon v. Griffith,
202 S.W.3d 225, 237 (Tex.App-Tyler 2006, pet. denied)....93
xx
Renbolt v. Kern,
2013 Ohio 1359, 2013 WL 1390607 (April 5, 2013)...72
Riebe v. Nat'll Loan Investors, L.P.,
828 F. Supp. 453, 456 (N.D. Tex. 1993)...93
Ritchie v. Rupe, No. 11-0447
(Tex. June 20, 2014).58, 86, 92, 95, 102-04, 110, 132-33
Ritchie v. Rupe,
339 S.W.3d 275 (Tex. App.Dallas 2011, pet. granted)...107
Roark v. Stallworth Oil and Gas, Inc.,
813 S.W.2d. 492 (Tex. 1991)..21, 86
Rogers v. Walker,
No. 13-12-00048-CV (Tex.App.-Corpus Christi-Edinburg
May 23, 2013, pet. denied)...12
Sanders v. Sheldon,
970 S.W.2d 721 (Tex. App.-Austin 1998, writ denied)..xxx
Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp.,
435 S.W.2d 854 (Tex. 1969).55
Sharyland Water Supply Corp. v. City of Alton,
354 S.W.3d 407 (Tex. 2011)...105
Slay v. Burnett Trust,
187 S.W.2d 377 (Tex. 1945).....28
Southwestern Bell Tel. v. Delanney,
809 S.W.2d 493 (Tex. 1991)...105
Sparks v. Bolton,
335 S.W.2d 780 (Tex.App.-Dallas 1960, no writ)76, 122
State Bar of Texas v. Grossenbacher,
781 S.W.2d 736 (Tex.App.-San Antonio 1989 no pet.)..133
xxi
Stephens County Museum, Inc. v. Swenson,

517 S.W.2d 257 (Tex. 1974).28
Stiles v. Onorato,
318 S.C. 297, 457 S.E.2d 601 (1995)...56
Stonewall Surplus Lines Ins. Co. v. Drabek,
835 S.W. 2d 708 (Tex.App.-Corpus Christi 1992, writ denied)...62, 116
St. Paul Fire & Marine Ins. Co. v. Murphree,
357 S.W.2d 744, (Tex. 1962)74
Sutton v. McCormick,
47 S.W.3d. 179 (Tex.App.-Corpus Christi 2001, no pet.)23
S.V. v. R.V.,
933 S.W.2d 1 (Tex. 1996)...65, 89
Texas-Ohio Gas, Inc. v. Mecom,
28 S.W.3d 129 (Tex.App.-Texarkana 2000, no pet.)..110
Thompson v. Hambrick,
508 S.W.2d 949 (Tex.Civ.App.-Dallas 1974, writ ref'd n.r.e.).93
Thywissen v. Cron,
781 S.W.2d 682 (Tex.App.-Houston [1st Dist.] 1989, writ denied).94
Tilton v. Marshall,
925 S.W.2d 672 (Tex. 1996).55, 129
Travelers Ins. Co. v. Creyke,
446 S.W.2d 954 (Tex.Civ.App.-Houston [14th Dist.] 1969, no writ)...19
Tuscano v. Tuscano,
403 F. Supp. 2d 214 (E.D.N.Y. 2005)132
Two Thirty Nine Joint Venture,
60 S.W.3d 896 (Tex.App.Dallas 2001), revd on other grounds, 145 S.W.3d 150
(Tex. 2004)40
xxii
Walker v. Packer,
827 S.W.2d 833 (Tex.1992)...xxxi
Webb v. Jorns,
488 S.W.2d 407 (Tex. 1972)...xxx
Wilkes v. Springside Nursing Home, Inc.,
353 N.E.2d 657 (Mass. 1976).....105
Willis v. Bydalek,
997 S.W.2d 798 (Tex.App.Houston [1st Dist.] 1999, pet. denied)..105-06
Willis v. Donnelly,
118 S.W.3d 10 (Tex.App.-Houston [14th Dist.] 2003), revd 199 S.W.3d 262
(Tex. 2006)92, 105
Willis v. Maverick,
760 S.W.2d 642 (Tex. 1988)...43, 65
Winkle Chevy-Olds-Pontiac, Inc. v. Condon,
830 S.W.2d 740 (Tex.App.-Corpus Christi 1992, writ dismissed).102
W & W Equipment Co., Inc. v. Mink,
568 N.E.2d 564 (Ind.App. 1 Dist. 1991).105
Yancy v. City of Tyler,
836 S.W.2d 337 (Tex.App.-Tyler 1992, writ denied)...68, 118
Yeaman v. Galveston City Co.,
167 S.W. 710 (Tex. 1914)...57, 92, 102, 106, 109, 127
OTHER AUTHORITY:
Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges:
Business Consumer Insurance & Employment PJC 115.15 (2010)....102
Henry Campbell Black, Blacks Law Dictionary (6th ed. 1991)...17
Henry Campbell Black, Blacks Law Dictionary (7th ed. 1999).....108
xxiii
Henry Campbell Black, Blacks Law Free Online Legal Dictionary (2nd ed.
1910).17
Jason M. Tanguay, Minority Shareholders and Direct Suits in Closely-held
Corporations Where Derivative Suits Are Impractical: Durham v. Durham, 5
Pierce Law Review 469 (2007)...103
Krishna Dvaipyana Vysadeva, rmad Bhgavatam, Canto 12, Chapter 2;
(Anand Aadhars Internet Version) (locate at www.bhagavata.org)
(2007)..120
Restatement (Second) of Trusts 183...43, 107
Roy R. Anderson and Walter W. Steele, Fiduciary Duty, Tort and Contract: A
Primer on the Legal Malpractice Puzzle, 47 SMU L. Rev. 249
(1994)22
The Holy Bible, New International Version, NIV Copyright 1973, 1978,
1984, 2011 by Biblica, Inc. Used by permission. All rights reserved
worldwide..23, 120
xxiv
ABBREVIATIONS
1.
Mr. Sharpe refers to appellee James Shelby Sharpe.
2.
The Law Offices refers to appellee The Law Office of J. Shelby Sharpe,
A Professional Corporation.
3.
Sharpe refers to appellees James Shelby Sharpe and The Law Office of
J. Shelby Sharpe, A Professional Corporation, collectively.
4.
Inc.
WFFI refers to the unrepresented corporate defendant, Wan Fu Foods,
5.
Mr. Chang refers to appellee Henry Chang.
6.
Mrs. Chang refers to appellee Karen Chang.
7.
Changs refers to appellees Henry and Karen Chang, collectively.
8.
Primary defendants refers to the Changs and WFFI, collectively.
9.
Shareholder litigants refers to the Changs, WFFI, and the appellant,
collectively.
10. Shareholder rights claims refers collectively to appellants underlying
dividend, wage, breach of employment contract, and the value of his shares (e.g.
buy-out remedy) claims.
11.
Amin refers to appellants trial and appellate counsel.
12. TUFTA refers to the Texas Uniform Fraudulent Transfers Act which is
the same as Section 24.001 et seq. of the Tex. Bus. & Com. Code.
13.
TDRPC refers to the Texas Disciplinary Rules of Professional Conduct.
14. ADR refers to the alternate dispute resolution methods and procedures as
set forth under Title 7 of the Tex. Civ. Prac. & Rem. Code.
xxv
RECORD REFERENCES
1.
Documents found in the Appendix shall be referenced as:

[App. Tab]
2.
Documents found in the Clerks Record shall be referenced as:

[CR Page] or [#SUPP-CR Page]
3.
Documents found in the Reporters Record shall be referenced as:

[RR Page]
xxvi
STATEMENT OF THE CASE

Appellant and the Changs have been co-shareholders of WFFI since the
early 1990s. [CR 1267-68] The Changs have been officers of and on the board
of directors of WFFI since its inception. [CR 1452-53, 1278] In September of
2004 the appellant, as an employee/shareholder of WFFI, had a falling out with
WFFI, the Changs, and its other shareholders. [CR 1220] In October of 2004,
appellant obtained a legal consultation with, and sought to retain, Sharpe
regarding the same. [CR 1220] In June of 2005, Sharpe switched sides and began
defending WFFI and the Changs on the same claims that appellant sought to
retain Sharpe on in October of 2004. [CR 1220-22]
On January 22, 2010, appellant sued Sharpe, WFFI and the Changs
seeking money damages under the following claims: (1) breach of fiduciary duty,
(2) civil conspiracy, (3) aiding and abetting, and (4) civil conversion. [CR 12-23]
In April of 2014, the Changs and Sharpe moved for summary judgment on one or
more of these claims against them. [2SUPP-CR 36, CR 956] On June 17, 2014,
the court granted appellees summary judgment. [App. A2.1, A9.0] The court
then severed all of appellants claims against WFFI from his claims against the
appellees for the purpose of making the June 17th orders final and appealable.
[App. A2.2]
xxvii
ISSUES PRESENTED
I.
The trial court erred in granting Sharpes fourth motion to disqualify Amin
as plaintiffs trial counsel.
II.
The trial court erred in granting Sharpes motions for summary judgment.
III.
The trial court erred in denying appellants motion to compel nonprivileged discovery related to proving the crucial element of Sharpes
fiduciary breach.
IV.
The trial court erred in granting Sharpes motion to sever appellants

common law tort claims against Sharpe from his TUFTA claims against
Sharpe, as the debtor.
V.
The trial court erred in granting Sharpes motion to abate appellants

TUFTA claims.
VI.
The trial court erred in denying appellants motion to compel supplemental

discovery related to proving Sharpes current net worth.
VII. The trial court erred in denying appellants motions to compel discovery
related to proving Sharpes net worth and/or TUFTA violations.
VIII. The trial court erred in granting Sharpes motion for protective order
precluding appellant from filing financial documents obtained under
discovery and constituting court records.
IX.
The trial court erred in granting the Changs motion for summary
judgment.
X.
The trial court erred in granting the Changs motion to sever appellants
common law tort claims against them from his TUFTA claims against
them, as debtor(s).
XI.
The trial court erred in granting the Changs motion to abate appellants
TUFTA claims.
xxviii
XII. The trial court erred in denying appellants motion to compel supplemental
discovery related to proving the Changs current net worth.
XIII. The trial court erred in denying appellants motion to compel discovery
related to proving the Changs net worth and/or TUFTA violations.
XIV. The trial court erred in severing appellants claims against WFFI from his
claims against the Changs.
XV. The trial court erred by denying appellants motion for leave to supplement
his petition to add allegations of WFFIs closely-held corporation status.
XVI. The trial court erred by denying appellants motion to reconsider and to
withdraw his stipulation to Item # 3 in a January 22, 2013 liminie order.
xxix
STANDARDS OF REVIEW
A trial courts preceding interlocutory orders merge into the final judgment
whether or not they are named in the final judgment. Webb v. Jorns, 488 S.W.2d
407, 409 (Tex. 1972). For example, an interlocutory order refusing to compel
discovery is normally reviewed on appeal after final judgment. In re Allied
Chemical Corp., 227 S.W.3d 652, 658 (Tex. 2007). The standard of review of a
discovery order is abuse of discretion. In re Colonial Pipeline Co., 968 S.W.2d
938, 941 (Tex. 1998). The same standard applies to other similar interlocutory
orders. An appellate court reviews the trial court's decision on a motion to
disqualify counsel under an abuse of discretion standard. Metropolitan Life Ins.
Co. v. Syntek Finance Corp., 881 S.W.2d 319, 321 (Tex. 1994).
An improperly
granted severance is reviewed on appeal under an abuse of discretion standard. In

re El Paso County Hosp. Dist., 979 S.W.2d 10, 11-12 (Tex.App. El Paso
1998). The standard of review on a motion to abate is for abuse of discretion.
Dolenz v. Continental Natl Bank, 620 S.W.2d 572, 575 (Tex. 1981). A trial
courts orders concerning a Tex. R. Civ. P. 76a matter is reviewed under an abuse
of discretion standard. General Tire, Inc. v. Kepple, 970 S.W.2d 520, 526 (Tex.
1998). A trial courts rulings concerning the admission or exclusion of summary
judgment evidence are reviewed under an abuse of discretion standard. Sanders
v. Sheldon, 970 S.W.2d 721, 727 (Tex. App.-Austin 1998, writ denied).
xxx
The test for abuse of discretion is a question of whether the trial court acted
without reference to any guiding rules and principles or whether the act was
arbitrary and unreasonable. Metropolitan Life Ins. Co. v. Syntek Finance Corp.,
881 S.W.2d 319, 321 (Tex. 1994). A trial court has no 'discretion' in determining
what the law is or applying the law to the facts." Walker v. Packer, 827 S.W.2d
833, 840 (Tex.1992). Consequently, the trial court's erroneous legal conclusion,
even in an unsettled area of law, is an abuse of discretion. Huie v. DeShazo, 922
S.W.2d 920, 927 (Tex. 1996).
Appellate review of the granting of summary judgment is conducted de
novo. Neely v. Wilson, 418 S.W.3d 52, 59-60 (Tex. 2013). The moving party
bears the burden of showing that no genuine issue of material fact exists and that
it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). [App. B4.5]
When the summary judgment motion is a hybrid motion and both parties bring
forth summary judgment evidence, the ultimate issue is whether a fact issue
exists. Neely v. Wilson, 418 S.W.3d 52, 59-60 (Tex. 2013).
When a no-evidence summary judgment motion is filed, the movant must
specifically challenge the evidentiary support for an element of a claim or
defense. Tex. R. Civ. P. 166a(i) & cmt. [App. B4.8-B4.85] Once a movant files a
no-evidence summary judgment motion, the burden shifts to the non-movant to
produce summary judgment evidence raising a genuine issue of material fact on
xxxi
the challenged element of the claim or defense. Id. To defeat a no-evidence

motion, the non-movant is not required to marshal his proof; rather, he need only
point out evidence that raises a fact issue on the challenged elements. Id.
A fact issue exists if there is more than a scintilla of probative evidence.
Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.2004). More than a
scintilla of evidence exists when the evidence rises to a level that would enable
reasonable and fair-minded jurors to differ in their conclusions. Merrell Dow
Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997); City of Keller
v. Wilson, 168 S.W.3d 802, 822-23 (Tex. 2005).
Less than a scintilla of
evidence exists when the evidence is "so weak as to do no more than create a
mere surmise or suspicion" of a fact. Kindred v. Con/Chem, Inc., 650 S.W.2d 61,
63 (Tex.1983). An appellate court reviewing a summary judgment must consider
all the evidence in the light most favorable to the non-movant, indulging every
reasonable inference in favor of the non-movant and resolving any doubts against
the motion. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755-6 (Tex.
2007).
xxxii
STATEMENT OF PROCEDURAL HISTORY

Appellant filed suit against Sharpe and the primary defendants on January
22, 2010. [CR 12] The suit was initially assigned to the 236th District Court
under Cause No. 243228-10. Id. On February 22, 2010, appellees submitted for
filing their original answer. [CR 24, 1SUPP-CR 4] As of that time, Sharpe was
defending himself and the primary defendants in this suit. [1SUPP-CR 4, CR
352] On April 6, 2011, The Honorable Tom Lowe ordered Sharpe permanently
withdrawn as counsel for the primary defendants. [CR 353] On April 7, 2011,
Judge Lowe then recused himself, sua sponte. [CR 354] On April 26, 2011, this
suit was transferred to the 17th District Court. [CR 355] The Honorable Melody
Wilkinson presided over this suit until August 15, 2013. [CR 685] This suit was
then transferred, sua sponte, to the 48th District Court. Id. The Honorable David
Evans has presided over this suit since that time. [CR 1699] On August 12, 2014,
Judge Evans severed appellants claims against WFFI from his claims against
appellees and signed a take nothing final judgment on all of appellants claims
against appellees. Id. On August 22, 2014, appellant filed a motion for new trial
with respect to the Changs. [2SUPP-CR 392] On September 8, 2014, appellant
filed a notice of appeal with respect to Sharpe. [CR 1702] On October 20, 2014,
appellant filed a notice of appeal with respect to the Changs. [2SUPP-CR 443]
On November 3, 2014, appellants motion for new trial against the Changs was
xxxiii
denied. [App. A10.0] This appeal ensued.

I.
History of June 17, 2014 Order
Disqualifying Amin as Trial Counsel [App. A1.1]
This case has been set for trial on the following dates: April 30, 2012,
October 22, 2012, March 18, 2013, and March 17, 2014. [CR 356, 519, 527, 883]
On September 18, 2012, appellant filed Tex. R. Evid. 902(10) affidavits with
accompanying Tex. R. Evid. 803(6) business records. [App. B6.7-B6.8] [CR
1245, 1247, 1249, 1263-1508]
On October 12, 2012, Sharpe filed his first
motion to disqualify Amin based on Amin [allegedly] being a material witness

as to 30 of those records. [CR 522] Sharpe never obtained a hearing or ruling
on this first motion. [App. C1] [CR 1712-1719] Seventeen months later and five
days before trial, on March 12, 2014, Sharpe filed a second motion to disqualify
Amin based on those same thirty exhibits. [CR 925] That motion was denied
without prejudice to Sharpe refiling a more specific motion to disqualify. [CR
954]
On March 27, 2014, Sharpe filed a third motion to disqualify Amin. [CR
936]
On April 24, 2014, the court denied Sharpes third motion without
prejudice to it being refiled because the motion failed to specify the exhibits
which would disqualify Amin. [CR 990] On April 29, 2014 Sharpe filed a fourth
motion to disqualify Amin; this time identifying and attaching twenty-one of the
xxxiv
thirty complained of exhibits. [CR 991] On May 16, 2014 appellant filed a
response to this fourth motion. [CR 1516-1568]
On June 17, 2014 the court granted Sharpes fourth motion to disqualify
Amin. [CR 1622] On July 18, 2014 appellant filed a motion to reconsider the
order of disqualification. [CR 1635] On July 24, 2014 Sharpe filed a response to
that motion. [CR 1675] On July 25, 2014 the court denied appellants motion for
reconsideration. [CR 1690]
II.
Granting Sharpe Summary Judgment [App. A2.1]
On January 22, 2010, appellant sued Sharpe in the 236th District Court
seeking money damages under the following claims: (1) breach of fiduciary duty,
(2) civil conspiracy, (3) aiding and abetting, and (4) civil conversion. Id. In March
of 2012, the 17th District Court granted summary judgment in favor of Sharpe on
the aiding and abetting and civil conversion claims. [CR 400] In April of
2014, Sharpe moved for summary judgment for a third and fourth time on
appellants breach of fiduciary duty and civil conspiracy claims. [CR 956] On
May 5, 2014, appellant filed his Response to Sharpes motions. [CR 1094-1508]
Appellants Response contains within it his objections and responsive motions to
Sharpes summary judgment motions. [CR 1100-1123] On June 17, 2014, the 48th
xxxv
District Court granted Sharpe summary judgment on those two remaining claims.
[CR 1623]
On July 18, 2014, appellant filed a motion requesting an express written
ruling on his summary judgment related objections and responsive motions in
order to preserve error. [CR 1630] On July 24, 2014, a hearing was held on
appellants motion and the court denied it. [CR 1688] Later that day, appellant
then filed an objection to the courts refusal to rule. [CR 1682]
III.
History of September 26 and November 14th, 2011 Orders
Denying Discovery on the Element of Breach [App. A3.1, A3.2]
th
On January 27, 2011, appellant filed a motion to compel Mr. Sharpe to

respond to discovery. [CR 330] On August 8, 2011, Mr. Sharpe filed a response
to appellants motion. [CR 360] On September 26, 2011, the court sustained Mr.
Sharpes objections to appellants first set of interrogatory numbers: 14-16 on the
ground that the information sought to be discovered is [allegedly] protected by
the attorney-client privilege. [CR 394]
On November 14, 2011 the court
sustained Mr. Sharpes objections to appellants first set of request for admissions
numbers: 42-45, 47-48, and 52-55 for the same alleged reason. [CR 397]
xxxvi
IV.
History of October 23, 2013 Order Severing
TUFTA Claims With Respect to Sharpe [App. A4.1]
On June 25, 2013, appellant supplemented his original petition to add a
claim under the Texas Uniform Fraudulent Transfers Act (TUFTA) against
Sharpe. [CR 652] On September 10, 2013, Sharpe filed a motion to strike
appellants TUFTA claims which he later voluntarily withdrew on October 15,
2013. [CR 718, 857] On October 10, 2013, Sharpe then filed a motion to sever
appellants TUFTA claims from appellants common law tort claims against him.
[CR 804] On October 14, 2013, appellant filed a response objecting to Sharpes
motion to sever and appellant also moved for a bifurcated trial on his TUFTA
claims. [CR 812]
On October 14, 2013, Sharpe then filed a first amended motion to sever
and abate the TUFTA claims. [CR 845] On October 17, 2013, appellant filed his
objections and response to that amended motion. [1SUPP-CR-5, CR 863, 849]
Later that day, a hearing was held on Sharpes motion to sever and abate. [CR
886] No evidence was presented on the record at that hearing. [App. C1] [RR 19] On October 23, 2013, the court signed an order severing appellants TUFTA
claims into a separate cause. [CR 886] On October 30, 2013, appellant filed a
motion to reconsider the order of severance. [CR 892] On July 21, 2014,
appellant filed a first supplement to his motion to reconsider. [CR 1650] On July
xxxvii
25, 2014 the court denied his motion to reconsider. [CR 1687]
V.
History of October 25, 2013 Order Abating
TUFTA Claims With Respect to Sharpe [App. A5.0]
On October 25, 2013, the trial court abated the severed TUFTA claims.
[CR 888] No evidence was presented on the record at the abatement hearing.
[App. C1] [RR 4-9] The motion to abate was not verified. [CR 845-48]
VI.
History of June 24, 2014 Order Denying Supplemental
Net-Worth Related Discovery With Respect to Sharpe [App. A6.0]
On January 25, 2013, appellant filed a motion to compel proper net worth
discovery responses from Sharpe. [CR 536]
On February 22, 2013, the court
signed an order granting, in part, appellants motion. [CR 539] On June 12,
2013, appellant filed a motion to compel proper responses from Sharpe to his
third set of discovery requests which also pertain to net worth and/or TUFTA
issues. [CR 610] On June 28, 2013, Sharpe filed a response to appellants
motion. [CR 654] A hearing was held on appellants motion to compel later that
day. [CR 678] On July 24, 2013, the court signed an order granting, in part,
appellants motion to compel. [CR 678]
xxxviii
On May 21, 2014, appellant filed a notice of duty to provide supplemental

discovery responses. [CR 1569] On May 27, 2014, appellant filed a motion to
compel supplemental discovery responses pursuant to Tex. R. Civ. P. 193.5 as it
would pertain to the February 22, 2013 and July 24, 2013 court orders referenced
above. [App. B4.10] [CR 1575] On June 17, 2014, Sharpe filed a response to
appellants motion to compel. [CR 1603] On June 24, 2014, the court denied
appellants motion to compel supplemental discovery responses. [CR 1624]
VII.
History of the July 24, 2013, October 15, 2013, and May 6, 2014 Orders
Denying Net-Worth and TUFTA Related Discovery
With Respect to Sharpe [App. A7.1-A7.3]
On June 12, 2013, appellant filed a motion to compel proper responses
from Sharpe to his third set of discovery requests. [CR 610] These requests
pertain to financial issues surrounding appellants TUFTA claims and Sharpes
net worth in the context of punitive damages. Id. On June 28, 2013, Sharpe filed
a response to appellants motion. [CR 654] On July 24, 2013 the court signed an
order granting, in part, appellants motion to compel without prejudice to his
seeking additional discovery after Sharpes [anticipated] compliance with the
July 24, 2013 order. [CR 678] On October 15, 2013 the court then signed an
order denying appellants June 12th motion to compel after it was granted in part
on July 24, 2013. [CR 610, 860]
xxxix
On September 5, 2013 appellant filed a first supplemental motion to

compel proper discovery responses to his third set of discovery requests and/or
several alternative related forms of that motion (e.g. appellants motion for
reconsideration of the July 24, 2013 order; or motion for order permitting
additional discovery). [CR 687] On September 18, 2013 Sharpe filed a response.
[CR 788] A hearing was held on appellants motion on April 30, 2014. [CR
1509] On May 6, 2014, the court denied appellants first supplemental motion
to compel in toto. Id.
VIII.
History of October 22, 2013 Protective Order
Precluding the Filing of Court Records [App. A8.0]
On October 14, 2013, Sharpe moved for a protective order to preclude the
filing of his financial records produced under discovery with the court. [CR 825]
On October 17, 2013, appellant objected to Sharpes motion on multiple grounds.
[CR 849, 863] On October 22, 2013, the trial court granted Sharpes motion for
protective order. [CR 885]
xl
IX.
Granting the Changs Summary Judgment [App. A9.0]
Appellant filed suit against the Changs on January 22, 2010. [CR 12] On
February 22, 2010 the Changs filed their original answer. [2SUPP-CR 4] On April
4, 2014, the Changs filed a no-evidence summary judgment motion. [2SUPP-CR
36] On April 29, 2014, appellant filed his Response to that motion. [2SUPP-CR
42] Appellants Response contains within it his objections and responsive motions
to the Changs summary judgment motion. [2SUPP-CR 44-49] On June 17, 2014,
the court granted the Changs motion. [2SUPP-CR 389]
On July 18, 2014,
appellant filed a motion requesting an express written ruling on his summary

judgment related objections and responsive motions in order to preserve error. [CR
1630] On July 24, 2014, a hearing was held on appellants motion and the court
denied it. [CR 1688] Later that day, appellant then filed an objection to the courts
refusal to rule. [CR 1682] On July 25, 2014, and again on August 12, 2014, the
trial court severed all of appellants claims against WFFI from his claims against
the Changs for the purpose of making the June 17th order a final order. [CR
1690, 1699] On August 22, 2014, appellant filed a motion for new trial with
respect to the Changs. [2SUPP-CR 392] On October 20, 2014, appellant filed a
notice of appeal with respect to the Changs. [2SUPP-CR 443] Appellants motion
for new trial was denied on November 3, 2014. [1SUPP-CR 63]
xli
X.
History of October 23, 2013 Order Severing
TUFTA Claims With Respect to the Changs [App. A4.1]
On June 25, 2013, appellant supplemented his original petition to add a
claim under the Texas Uniform Fraudulent Transfers Act (TUFTA) against the
Changs. [CR 652] On October 10, 2013, Sharpe then filed a motion to sever
appellants TUFTA claims from appellants common law tort claims against him.
[CR 804] On October 14, 2013, appellant filed a response objecting to Sharpes
motion to sever and appellant also moved for a bifurcated trial on his TUFTA
claims. [CR 812]
On October 14, 2013, Sharpe then filed a first amended motion to sever
and abate the TUFTA claims. [CR 845] On October 17, 2013, appellant filed his
objections and response to that amended motion. [1SUPP-CR 5, CR 863, 849]
Later that day, a hearing was held on Sharpes motion to sever and abate. [CR
886]
No evidence was presented on the record at that hearing. [App. C1]
However, the Changs orally indicated that they desired to join in the Sharpes
motion to sever. [RR 4] Appellant objected since the Changs never filed a
written motion. Id. On October 23, 2013, the court signed an order severing
appellants TUFTA claims into a separate cause. [CR 886] On October 30, 2013,
appellant filed a motion to reconsider the order of severance. [CR 892] On July
21, 2014, appellant filed a first supplement to his motion to reconsider. [CR
xlii
1650] On July 25, 2014 the court denied his motion to reconsider. [CR 1687]
XI.
History of October 25, 2013 Order Abating
TUFTA Claims With Respect to the Changs [App. A5.0]
On October 25, 2013, the trial court abated the severed TUFTA claims.
[CR 888] No evidence was presented on the record at the abatement hearing.
[App. C1] [RR 4-9] No verified motion to abate was ever filed. [CR 845-48]
XII.
History of June 24, 2014 Order Denying Supplemental Net-Worth Related
Discovery With Respect to the Changs [App. A6.0]
On January 25, 2013, appellant filed a motion to compel proper net worth
discovery responses from the Changs. [CR 536] The Changs did not file a
response to the motion. [App. C1] [CR 1714] On February 22, 2013, the court
signed an order granting, in part, appellants motion. [CR 539] On June 12,
2013, appellant filed a motion to compel proper responses from the Changs to his
third set of discovery requests which also pertain to net worth and/or TUFTA
issues. [CR 610] The Changs also did not file a response to that motion. [App.
C1] [CR 1715] A hearing was held on appellants motion to compel on June 28,
2013. [CR 678] On July 24, 2013, the court signed an order granting, in part,
appellants motion to compel. [CR 678]
xliii
On May 21, 2014, appellant filed a notice of duty to provide supplemental

discovery responses. [CR 1569] On May 27, 2014, appellant filed a motion to
compel supplemental discovery responses pursuant to Tex. R. Civ. P. 193.5 as it
would pertain to the February 22, 2013 and July 24, 2013 court orders referenced
above. [App. B4.10] [CR 1575] The Changs never filed a response to that
motion. [App. C1] [CR 1722-23] On June 24, 2014, the court denied appellants
motion to compel supplemental discovery responses. [CR 1624]
XIII.
History of the July 24, 2013, October 15, 2013 & May 6, 2014 Orders
Denying Net-Worth and TUFTA Related Discovery
With Respect to the Changs [App. A7.1-7.3]
On June 12, 2013, appellant filed a motion to compel proper responses
from the Changs to his third set of discovery requests. [CR 610] These requests
pertain to financial issues surrounding appellants TUFTA claims and/or the
Changs net worth in the context of punitive damages. Id. The Changs did not
file a response to appellants motion. [App. C1] [CR 1715] A hearing was held
on appellants motion to compel on June 28, 2013. [CR 654] On July 24, 2013
the court signed an order granting, in part, appellants motion to compel without
prejudice to his seeking additional discovery after Changs [anticipated]
compliance with the July 24, 2013 order. [CR 678] On October 15, 2014 the
court then signed an order denying appellants June 12th motion to compel
xliv
responses on appellants third set of discovery after it was granted in part on July
24, 2013. [CR 610, 860]
On September 5, 2013 appellant filed a first supplemental motion to
compel proper discovery responses to his third set of discovery requests and/or
several alternative related forms of that motion (e.g. appellants motion to
reconsider the July 24, 2013 order; or motion for order permitting additional
discovery). [CR 687] The Changs did not file a response to this motion. [App.
C1] [CR 1716-22] A hearing was held on appellants motion on April 30, 2014.
[CR 1509] On May 6, 2014, the court denied appellants first supplemental
motion to compel in toto. Id.
XIV.
History of the August 12, 2014 Order of Severance
With Respect to the Changs [App. A2.2]
On June 17, 2014 this court granted the Changs summary judgment.
[2SUPP-CR 389] On June 26, 2014, the Changs filed a motion to sever all
claims asserted against them from those asserted by appellant against defendant
WFFI. [CR 1625] On July 18, 2014, appellant responded and objected to that
motion to sever. [CR 1635] In the Prayer section of plaintiffs response, he
asked the court to deny the Chang defendants motion to sever. [CR 1639]
Plaintiff also asked the court to sustain his objections to the Changs motion to
xlv
sever. Id. On July 24, 2014, a hearing was held on the motion to sever. [CR
1690]
On the early morning of July 25, 2014, appellant filed additional
objections to any improper severance. [CR 1684] On July 25, 2014, the court
signed an order and DENIED what appellant had prayed for. [CR 1690] This
is a double negative type order. On August 12, 2014, the court signed another
order severing appellants claims against WFFI from his claims against the
Changs. [CR 1699]
This order assigned a separate cause number of: 048-
273672-14 to appellants claims against WFFI. Id.
XV.
History of November 3, 2014 Order Denying Appellants
Motion for Leave to Supplement His Petition
With Allegations of WFFIs Closely-Held Corporation Status [App. A10.0]
On August 22, 2014, appellant filed a motion for new trial which contained a
motion for leave to supplement his petition to add allegations of WFFIs closelyheld corporation status. [2SUPP-CR 395] No response was ever filed to the
motion for new trial. [App. C1]
On November 3, 2014, the court denied
appellants motion for new trial in toto. [1SUPP-CR 63]
xlvi
XVI.
History of November 3, 2014 Order Denying Appellants
Motion to Reconsider the Courts Ruling to Item # 3
In a January 22, 2013 Liminie Order [App. A10.0]
On August 22, 2014 appellant filed a motion for new trial which contained a
motion to reconsider Item #3 in the courts January 22, 2013 liminie order
predicated, in part, on allowing appellant to withdraw his stipulation to the same.
[2SUPP-CR 395] No response was ever filed to the motion for new trial. [App.
C1] On November 3, 2014, the court denied appellants motion for new trial in
toto. [1SUPP-CR 63]
xlvii
STATEMENT OF FACTS
1.
WFFI was formed in 1990 for the purpose of owning and operating a
Chinese food restaurant (WFFI) in Ridglea Plaza in the City of Fort Worth,
Texas. [CR 1225, 1266, 1370, 1392] WFFI issued a total of 45,000 shares. [CR
1268] Appellant invested $60,000.00 in WFFI in exchange for 10,000 shares of
its stock. [CR 1234, 1267] Henry and Karen Chang each also received 10,000
shares. [CR 1268] The remaining shares were divided equally between Chih Mu
and Ling Mu, each receiving 7,500 shares.1 Id.
2.
Appellant had an employment contract with WFFI, the duration of which
was contingent upon his continued ownership of WFFI stock. [CR 1220, 1503,
532, 1505, 15] Appellants on-going right to such employment was central to his
decision to invest in WFFI. [CR 1235] In 2004, appellant had a falling out with
WFFI and its other shareholders. [CR 1220] On September 12, 2004, Karen
Chang terminated appellants employment and told him not to return to the
restaurant. [CR 1220, 1503, 14]
3.
Just before termination, appellant was receiving compensation in the form
monthly dividend income averaging $1,689.00 and a salary of $2,500.00 after

tax. [CR 1233, 1369, 1235] He was also entitled to receive employment benefits
in the form of: (i) a $600.00 annual bonus, (ii) 7-1/2 days of yearly vacation pay
Defendant Chih Mu was non-suited on 10/22/12 [CR 526]; Ling Mu was never a party to the suit. [CR 12]
at the rate of $83.33 per day, and (iii) sick leave pay at that same daily rate. [CR
1235] As of September 12, 2004, WFFI still owed him accrued sick leave pay
for seven days in April of 2000 and earned vacation pay for the time period of
August 2001 thru September 2004. Id.
4.
After termination, appellant remained unemployed for three months until
he found a job at his current place of employment. Id. At this new job, appellant
has only been paid a salary of $2,000 per month after taxes and does not receive
benefits in the form of vacation pay or yearly bonuses. Id.
Also, since
termination, appellant has only received one dividend payment in the amount of
$2,000 which was paid to him in late 2004. [CR 1233, 1234, 1224] In October of
2009, appellants shares became worthless when WFFI permanently closed its
doors to business. [CR 1234]
5.
Appellant is suing the primary defendants and Sharpe for $141,895.00 in
monetary damages in the form of: (a) unpaid dividend income, (b) unpaid wages,
(c) lost earnings, and (d) the total loss of his initial capital investment in WFFI
stock. [CR 1235] He also seeks attorneys fees, in equity, incurred to prosecute
the underlying shareholder rights claims; as distinguished from those incurred to
prosecute the professional malfeasance claims against Sharpe. [CR 1235]
Finally, appellant seeks exemplary damages. Id.
6.
Mr. Sharpe and his wife were regular patrons of WFFI since about 1997.
2
[CR 1221, 1225] Appellant met Mr. Sharpe while serving him food and that is
how he found out that Mr. Sharpe was an attorney. Id. Over the years, he became
friends with Mr. and Mrs. Sharpe. [CR 1221, 1408]
The Changs had not
formally met Mr. Sharpe or had any direct communications with him about his
being an attorney before September 12, 2004. [CR 1225]
7.
In October of 2004, appellant met Mr. Sharpe at his law office to obtain a
legal consultation regarding his falling out with the primary defendants. [CR
1220] During this consultation, appellant disclosed certain information about his
dispute to Sharpe. 2 Appellant inquired of Sharpe about his legal options in
resolving his dispute. [CR 1220] Sharpe advised appellant of three possible
options. [CR 1221, 1408] Appellant then inquired of Sharpe as to what he would
charge for his legal services. [CR 1221] Sharpe responded by saying he would
assist the appellant at no charge in honor of Mrs. Sharpes request to do so. Id.
When appellant left Sharpes office that day, he was to consider the suggested
options and call back with a decision. Id. During the consultation, Sharpe never
stated to appellant that he ever knew of the Changs or that he would have any
conflict of interest in helping appellant or in discussing matters of his dispute
against the primary defendants. [CR 1225]
Sharpe admits that he never
represented the primary defendants in any legal matters before meeting with
2
See Section II-B-2.1, below.
appellant in October of 2004. [CR 1422]

8.
A few days later, appellant called Sharpe back and told him that he opted
to hold on to his WFFI shares so as to continue to receive monthly dividends.

[CR 1221] Sharpe then drafted a demand type letter on plain bond paper for
appellant to sign and send if he was satisfied with the letter. [CR 1221, 1272-74]
Appellant never sent that letter. Id. Sometime later, appellant again contacted
Sharpe and asked him how to go about collecting money on his shareholder
rights claims. [CR 1221] Sharpe advised appellant to draft and send his own
version of a demand letter and, if that failed, to then file suit in small claims
court. Id.
9.
On June 23, 2005 appellant followed Sharpes advice and sent a written
demand letter to WFFI asking for payment on his shareholder rights claims. [CR
1275] Unbeknownst to appellant, on this same date, Sharpe switched sides and
began defending WFFI on the same shareholder rights claims that he advised
appellant to send a demand letter on; which same claims are now the subject of
this suit.3 [CR 1446] On July 22, 2005, WFFI responded to appellants demand
letter and denied all his claims. [CR 1276]
10.
In September of 2006, appellant then filed three small claims suits against
Mr. Chang seeking damages for unpaid dividends, unpaid wages, and wrongful
3
See Section II-B-2.1-2.2, below.
employment termination by assault. [CR 1280-82] Sharpe stepped in to defend

Mr. Chang in those suits. [CR 1283] On December 27, 2006, Sharpe made a
written offer to appellant to act as an intermediary on his claims against the
primary defendants in an out-of court setting, if appellant would voluntarily
dismiss his suits against Mr. Chang. [CR 1284-85]
On January 12, 2007,
appellant accepted Sharpes offer. [CR 1286]

11.
Between January 2007 and July 2007, a series of communications
transpired between Sharpe and the appellant in the context of Sharpes promise to
intermediate. 4 [CR 1286-96]
On July 28, 2007, however, appellant asked that
his claims be referred to a neutral arbitrator or to dispute resolution. [CR

1295] During August and September of 2007, Sharpe continued to send written
correspondence to appellant attempting to validate the recommendations he had
made as intermediary. [CR 1297-99] In December of 2007, appellant started
seeking alternate counsel. [CR 1300-01]
12.
In September of 2009, appellant, through Amin, sent WFFI a demand letter
asking to audit its books and records. [CR 1302] Sharpe stepped in to defend
WFFI in the audit. [CR 1304] WFFI concealed certain of its financial records
during the audit. 5 In October of 2009, WFFI closed its doors to business. [CR
1311, 1313]
4
5

See Section II-C-4.0(b), below.
13.
In January of 2010, appellant filed suit. [CR 12] Initially, Sharpe defended
himself and the primary defendants in this suit. [1SUPP-CR 4, CR 1335-36]

After conducting some discovery, in April of 2010 and thereafter, appellant asked
Sharpe to voluntarily withdraw from defending the primary defendants in this
suit. [CR 1340, 1346] Sharpe refused to do so until after court order issued a
year later in April of 2011. [CR 1489-90]
Appellant incurred substantial
attorneys fees to obtain this order. [CR 1235]

14.
After Sharpe was ordered permanently withdrawn, WFFI never hired
replacement counsel and willfully failed to answer the balance of appellants

discovery requests. [CR 1503-04] On September 16, 2011, the court signed a
post-answer sanctions default judgment against WFFI as to liability. Id. The
issue of the amount of damages WFFI is liable for is still pending adjudication.
[CR 1699]
15.
In April of 2014, Sharpe moved to disqualify Amin as trial counsel and all
appellees moved for summary judgment on one or more of appellants claims.

[CR 991, 956, 2SUPP-CR 36] On June 17, 2014, the court signed interlocutory
orders granting these of appellees motions. [CR 1619, 1622] [2SUPP-CR 389]
On August 12, 2014, the court finalized the summary judgments through a direct
severance order. [CR 1699]

I.
On June 17, 2014, the court erred in granting Sharpes fourth motion to
disqualify Amin because Sharpe: (1) waived the right to seek disqualification by
delay, (2) failed to show actual prejudice as required for a Rule 3.08(a)
disqualification, and (3) failed to meet his burden of proof on the substantive
elements of such a disqualification.
II.
On June 17, 2014, the court erred in granting Sharpes motions for
summary judgment.
summary judgment.
evidence on each element.
each element.
II-D. The court erred in barring appellants claims based on any
limitations defense because (1) a two-year negligence limitations period
does not apply as Sharpe argues, (2) Sharpe failed to meet his burden to
show when appellants claims accrued, and (3) more than a scintilla of
evidence shows that appellants claims accrued within the applicable fouryear limitations period.
Sharpes summary judgment motions and evidence.
summary judgment motions.
that goes to the crucial element of fiduciary breach.
IV. On October 23, 2013, the court erred by severing appellants TUFTA claims
against Sharpe from his common law tort claims against Sharpe. Given the more
efficient and convenient option of bifurcation, Sharpe did not show how he would
be prejudiced by denial of his motion to sever. Further, Sharpe judicially admits
that the TUFTA claims against him (as the debtor) are not independent of the
common law tort claims.
V.
On October 25, 2013, the court erred by abating appellants TUFTA claims.
Appellant is entitled to file a TUFTA claim based on pending, unliquidated tort
claims and there is no evidentiary threshold he must cross before seeking TUFTA
discovery or relief.
VI. On June 24, 2014, the court erred by denying appellants motion to compel
supplemental net-worth discovery responses. Appellant is legally entitled to know
information about Sharpes current net-worth in this punitive damages case.
VII. On July 24, 2013, October 15, 2013, and May 6, 2014, the court erred by
denying appellants motions to compel his third set of discovery requests.
Appellant is legally entitled to discover the financial information sought because it
relates to appellants TUFTA claims and/or to the issue of Sharpes net-worth in
the context of proving exemplary damages.
which constitute court records.
summary judgment.
summary judgment.
Changs summary judgment motion.
their no-evidence motion is (a) legally insufficient with respect to any
claims or defenses where they failed to state the specific challenged
element as to which there is no evidence and (b) improper with respect
to any defensive elements where they have the burden of proof at trial.
as a minority shareholder. The Texas Supreme Court has not foreclosed
the existence of such a duty and several other Texas courts have
specifically recognized it.
IX-E. The court erred in granting the Changs summary judgment based on
21.223 and 21.224 of the Tex. Bus. Orgs. Code because those sections
do not foreclose the Changs liability for conduct committed in their
capacity as the officers and directors of WFFI; as compared to their
capacity as shareholders of WFFI.
have Sharpe ordered permanently withdrawn from defending them in
this suit. More than a scintilla of evidence shows that the Changs
knowingly participated in Sharpes breach of his fiduciary duty not to
switch sides on the same matter.
9
through their knowing participation in Sharpes fiduciary breach.

stock ownership can constitute a fiduciary breach.
more than a scintilla of evidence as to all challenged elements.
their summary judgment motion.
X.
On October 23, 2013, the court erred by severing appellants common law
tort claims against the Changs from his TUFTA claims against them, as the
debtor(s). Given the more efficient and convenient option of bifurcation, the
Changs did not show how they would be prejudiced by denial of their motion to
sever.
before seeking TUFTA discovery or relief.
XII. On June 24, 2014, the court erred by denying appellants motion to compel
supplemental net-worth related discovery responses. Appellant is legally entitled
to know information about the Changs current net-worth in this punitive
damages case.
XIII. On July 24, 2013, October 15, 2013, and on May 6, 2014, the court erred
Appellant is legally entitled to discover the financial information sought because
it relates to appellants TUFTA claims and/or to the issue of the Changs networth in the context of proving exemplary damages.
10
XIV. On August 12, 2014 the court erred by severing, into a separate cause
number, appellants claims against WFFI from his claims against the Changs.
Severance is not proper if the claim to be severed is so interwoven with the
remaining claims that two trials will involve the same facts and legal issues.
XV. On November 3, 2014, the court erred in denying appellants motion for
leave to supplement his pleadings to include facts about WFFIs closely-held
corporation status because the Changs cannot and/or did not show surprise.
XVI. On November 3, 2014, the court erred in denying appellants motion to
reconsider Item #3 in its January 22, 2013 liminie order, predicated in part on
appellants motion to withdraw his stipulation to the same. The Changs can show
no prejudice from appellants withdrawal of his stipulation and under Texas law a
new trial may be granted in the interest of justice if it appears that a party may have
proceeded under the wrong legal theory.
11
ARGUMENT
I.
On June 17, 2014, the court erred in granting Sharpes fourth motion
to disqualify Amin because Sharpe: (1) waived the right to seek
disqualification by delay, (2) failed to show actual prejudice as required
for a Rule 3.08(a) disqualification, and (3) failed to meet his burden of proof
on the substantive elements of such a disqualification. [App. A1.1]
Waiver: The court in In re Bahn, 13 S.W.3d 865, 875 (Tex.App.-Fort
Worth 2000) acknowledged that a party could waive the right to seek a Tex.
Disciplinary R. Prof. Conduct 3.08(a) disqualification due to delay. [App. B5.5]
In Rogers v. Walker, No. 13-12-00048-CV (Tex.App.-Corpus Christi-Edinburg
May 23, 2013, pet. denied) (mem. op.) the court held that the trial court abused
its discretion in granting a Rule 3.08(a) disqualification in favor of a party that
waited nine months to file the motion. In our case, Sharpe waited seventeen
months between the time he first became aware of the [alleged] grounds for
disqualification and the time of setting a hearing on such a motion. The facts
establishing this delay are as follows:
i.
On September 18, 2012, appellant filed certain Tex. R. Evid. 803(6)
business records and accompanying Rule 902(10) affidavits. [App. B6.7B6.8][CR 997-1083] 6
These substantially same records were filed with the court on 5/17/10, 1/20/11, and 4/9/12
under a different numbering system. [CR 36-198, 199-329, 402-477] See also the footnotes
to the September 18, 2012 affidavits. In other words, Sharpe has known about the potential
trial exhibits he complains of since before May of 2012 and many of them as early as May of
2010.
12
ii.
On October 12, 2012, ten days before trial, Sharpe filed his first
motion to disqualify Amin. [CR 520] In that motion, Sharpe stated: Of

the 157 exhibits listed on Plaintiffs Exhibit List minus 20 of them, which
are court opinions, Plaintiffs counsel is a material witness to 30 of them.
[CR 522]
iii.
On October 18, 2012, a pre-trial conference was held and the parties
agreed to continue the October 22, 2012 trial setting, in part, due to
pending pretrial motions that they desired the Court to hear before trial.
[CR 527] Sharpe promised to set the motions that served the basis for
continuance for hearing in the coming weeks. [CR 1646]
iv.
However, Sharpe never in fact set his first motion to disqualify
for hearing either before or after the October 18, 2012 pretrial
conference.7 [App. C1] Thus, no ruling was ever made by the court on that
first motion. Id. Then, some seventeen months later, and five days before
the March 17, 2014 trial setting, Sharpe filed a second motion to disqualify
Plaintiff also asks the court to take judicial notice of the absence of any notice of hearing,
hearing, and ruling on Sharpes first motion in the trial courts transaction list. [CR 1643-45]
13
Amin. [CR 925] That motion complained of the same thirty exhibits as the
first motion [CR 928]. Sharpes second motion was denied. [CR 954]
v.
On March 27, 2014, Sharpe filed a third motion to disqualify Amin.
[CR 936] That motion was denied for failure to specify the exhibits.
[CR 990] On April 29, 2014, Sharpe filed a fourth motion to disqualify
Amin in which he identified and attached twenty-one of the thirty exhibits
he complained of in his first two motions. [CR 991] Appellant objected to
Sharpes fourth motion on the grounds of waiver due to delay. [CR 1516]
The court, nevertheless, granted Sharpes motion on June 17, 2014. [CR
1622]
The court erred in disqualifying Amin (i) over four years after appellant filed
many of the potential trial exhibits complained of and/or (ii) over seventeen
months after Sharpe first actually became aware of the [alleged] grounds for
disqualification.
No Actual Prejudice Shown: Perhaps the most common justification

given for the advocate-witness rule is that when an attorney representing a party
also serves as a witness and testifies as to a controversial or contested matter,
there exists a potential danger that the jury will confuse the roles of counsel.
14
Ayres v. Canales, 790 S.W.2d 554, 557-58 n.4 (Tex. 1990). However, the fact
that a lawyer serves, as both an advocate and a witness, does not itself compel
disqualification. See Ayres, 790 S.W.2d at 557-58.
Rather, Sharpe must
demonstrate that Amins dual roles as attorney and witness will cause him
actual prejudice. Id. Sharpes fourth motion for disqualification does nothing
more that state there is potential for confusion. [CR 993] It is devoid of any
arguments showing actual prejudice. This potential for confusion, alone, was
essentially the case in Ayres, and, without more, did not compel disqualification.
See Ayres, 790 S.W.2d at 557-58. The court erred in disqualifying Amin without
Sharpe ever having made a showing of actual prejudice.
Failure to Meet Burden on the Elements: In the context of Rule 3.08(a),
Sharpes motion to disqualify must also present evidence that Amins testimony
is "necessary" and that it goes to an "essential fact" of the appellants case. In re
Bahn, 13 S.W.3d at 872-73. Sharpes motion attempts to meet this standard by
simply identifying and attaching twenty-one of appellants potential trial exhibits.
[CR 992] This, however, is insufficient to meet a movants burden on the
elements of disqualification.
First, Tex. R. Civ. P. 166(l) permits the court to direct the parties to mark
and exchange exhibits that any party may use at trial [App. B4.3] Merely
because a document is identified on an exhibit list does not mean, ipso facto, that
15
a party will in fact offer that exhibit into evidence at trial. Thus, Sharpe must still
make a showing that any potential trial exhibit complained of is necessary to
prove an element of appellants case. See In re Bahn, 13 S.W.3d at 872-73.
Merely attaching potential trial exhibits to a disqualification motion is tantamount
to making conclusory allegations about their necessity; which is not permitted.
See In re Frost, 2008 Tex. App. LEXIS 3700, at *8. Sharpe must demonstrate
what fact Amins testimony is necessary to establish and why that fact is
essential to the case. Id.
Second, in order to establish that Amins testimony is necessary Sharpe
must also show that the evidence that goes to an essential element of appellants
case is unavailable from another source. See In re Hormachea, 2004 WL
2597447, at *1 (Tex.App.-San Antonio 2004). More specifically, Sharpe must
show that there is no feasible alternative for obtaining and presenting the subject
information to the jury except through Amins testimony. See Flores v. State,
155 S.W.3d 144, 148 (Tex.Crim.App. 2004). One court, for example, denied a
Rule 3.08(a) disqualification because the attorney could only have testified
regarding written communications sent or received by the attorney; which
documents speak for themselves. See Randall v. BAC Home Loans Servicing,
LP No. 4:11-CV-182, 2012 U.S. Dist. LEXIS 72342, *8 (E.D. Tex. May 24,
2012).
16
With respect to appellants Exhibits 35-36, 40, 42-43, 46, 48, 50, 56, 59,
69, 70, 74, 76, and 78-79, our case is the same as the Randall case. These
exhibits that Sharpe complains of are letters authored by Amin; which letters
speak for themselves. [CR 999-1011, 1014, 1017-1040]
Further,
[d]isqualification is only appropriate if the lawyers testimony is necessary to

establish an essential fact. In re Sanders, 153 S.W.3d 54, 57 (Tex. 2004). Even
if we assume for sake of argument that all the statements contained in Amins
letters are essential to appellants case, those statements do not constitute
Amins testimony.
Testimony properly means only such evidence as is
delivered by a witness on the trial of a cause, either orally or in the form of

affidavits or depositions. Henry Campbell Black, Blacks Law Dictionary (6th
ed. 1991). Testimony is defined as [e]vidence given by a competent witness
under oath or affirmation; as distinguished from evidence derived from writings,
and other sources. Id. Testimony is not synonymous with evidence. It is but a
species, a class, or kind of [sic] evidence. Id. See also Henry Campbell Black,
Blacks Law Free Online Legal Dictionary (2nd ed. 1910). Unlike other writings
such as affidavits and depositions, Amins letters are not made under oath or
affirmation. Thus, they do rise to the level of testimonial evidence; the showing
of which is a prerequisite to a Rule 3.08(a) disqualification. [App. B5.5]
17
With respect to appellants Exhibits 82-83 which Sharpe complains of,

these motions also do not constitute testimonial evidence. [CR 1041, 1070] This
is because Amin has not sworn to the contents of the motions other than as to
matters that qualify as exceptions to disqualification under Rule 3.08(a)(1)-(3).
[App. B5.5] Amins supporting affidavit to EX 82 simply attests to the true and
correct nature of the copies attached as exhibits to the motion. [CR 1055] Amins
supporting affidavit to EX 83 merely speaks to attorneys fees. [CR 1079]
Further, it is important to note that Amin does not intend to testify as a fact
witness at trial except as to issues covered under the exceptions to
disqualification under Rule 3.08(a). [CR 1667] See May v. Crofts, 868 S.W.2d
397, 399 (Tex.App.-Texarkana 1993).
Sharpe also argues that Amins Tex. R. Evid. 902(10) affidavits (i.e.
Exhibits 3, 58, and 64) themselves serve as a basis to disqualify Amin because
they [allegedly] inject Amin as a material witness in the case. [CR 992] Even
assuming that Amins 902(10) affidavits were necessary to prove an essential
element of appellants case, the affidavits themselves cannot serve as a basis to
disqualify Amin. This is because the affidavit testimony constitutes an exception
to disqualification under Rule 3.08(a)(1) and/or (2). [App. B5.5]
The
foundational matters alleged in Amins 902(10) affidavits cannot reasonably be

contested because they track the standardized form language found under Tex. R.
18
Evid. 902(10)(b). [App. B6.8]

Furthermore, it cannot be said that Amins 902(10) affidavits are
necessary in order to introduce into evidence the records they support. First,
there is no requirement that the 902(10) affidavits actually be attached to a
business record when the exhibit is offered into evidence. See In re N.C.M., 66
S.W.3d 417, 419 (Tex.App.Tyler 2001). The authentication and foundational
requirements for admitting a Tex. R. Evid. 803(6) record is accomplished by
proper notice and filing of the affidavit at least 14 days before trial. Id. Second,
there are several other feasible alternatives for admitting those records into
evidence without Amins testimony.
For example, under Tex. R. Evid. 803(6), 106, and 107, Amins letters are
admissible irrespective of whether he is available to testify as a witness. [App.
B6.7, B6.1, B6.2] Under Rule 803(6) the availability of the declarant to testify is
immaterial. [App. B6.6] Under Rule 106, remainder evidence is admissible
even though it might violate an exclusionary rule such as hearsay so long as such
evidence is (i) relevant to the subject matter and (ii) explanatory of the true
meaning of the portion already received. See Travelers Ins. Co. v. Creyke, 446
S.W.2d 954, 957 (Tex.Civ.App.-Houston [14th Dist.] 1969, no writ). Rule 107
also permits the introduction of otherwise inadmissible hearsay evidence. Parr v.
State, 557 S.W.2d 99, 102 (Tex.Crim.App. 1977) ([i]t is well established that
19
the evidence which is used to fully explain a matter opened up by the other party
need not be ordinarily admissible.).
Thus, Amins complained of letters can be admitted into evidence without
Amins 902(10) affidavits or his live testimony. Also, Amins unsworn letters
and motions themselves do not constitute testimony. Sharpes motion fails to
identify a single essential disputed fact going to appellants case that Amin is the
sole witness to and for which Amins testimony would be necessary. See
Randall, LP, No. 4:11-CV-182, 2012 U.S. Dist. LEXIS 72342, at *8. Nor does
Sharpes motion identify how Amins thought processes regarding any letter he
authored would be relevant and essential to appellants case. See In re Guidry
316 S.W.3d 729, 733-742 (Tex.App.-Houston [14th Dist.] 2010). The court erred
in granting Sharpes defective motion to disqualify Amin.
On July 25, 2014, the court also erred by denying appellants July 18, 2014
motion to reconsider the order of disqualification for one or more of the reasons
explained above. [CR 1635, 1690]
20
II.
On June 17, 2014, the court erred by granting Sharpes summary
judgment motions. [App. A2.1-A2.2]

summary judgment. [CR 1094, 1105, 1178-79]. See Roark v. Stallworth Oil
and Gas, Inc., 813 S.W.2d. 492, 495 (Tex. 1991).
Sharpe moved for judgment on claims of negligence, conspiracy to commit
negligence, and breach of his duties as an ADR mediator. [CR 9568, 961-62, 966]
Appellant did not plead any such theories of liability in his petitions. [CR 12,
529, 650, 920, 984, 1598] Sharpe also moved for judgment on an ADR statutory
immunity defense pursuant to Tex. Civ. Prac. & Rem. Code 154.055.9 [App.
B2.4] [CR 962] Sharpe did not plead this statutory defense in his answer. [CR
493]
See Mason case cited in footnote 1 of Sharpes motion.
This statute provides an immunity defense to appointed impartial third party volunteers
qualified to participate in some form of ADR. More than a scintilla of evidence shows that
Sharpe does not qualify as such a volunteer because one or more of the shareholder litigants
were his clients before, during and after the [alleged] 2007 ADR session and with respect
to the same matters that were the subject of said [alleged] ADR mediation. See Comment 3
to Tex. Disciplinary R. Prof. Conduct 1.07. [App. B5.3] A traditional summary judgment
motion on this defense also fails because more than a scintilla of evidence shows that Sharpe
acted with wanton and willful disregard of appellants rights, safety, or property See
154.055(a) of the Tex. Civ. Prac. & Rem. Code. [App. B2.4] & Sections II-B-2.1 thru II-B2.4, below.
21

evidence on each element.
The elements of a breach of fiduciary duty malfeasance claim are:
1.
An attorney-client relationship must have existed between appellant and
Sharpe;
2.
Sharpe must have breached a fiduciary duty emanating from that
relationship; and
3.
The breach must have resulted in injury to the appellant or benefited
Sharpe.
See Peeler v. Hughes & Luce, 909 S.W.2d 494, 496 (Tex. 1995). See also Roy
R. Anderson and Walter W. Steele, Fiduciary Duty, Tort and Contract: A Primer
on the Legal Malpractice Puzzle, 47 SMU L. Rev. 249 (1994); (It is important to
distinguish a legal malpractice action based on negligence from a professional
malfeasance action rooted in breach of fiduciary duty. The former involves
violation of a standard of care. The latter involves violation of a minimum
standard of conduct). See also Id. at 254 (However, because an action based
on breach of fiduciary duty raises only the issue of whether the attorneys
conduct violated the rules governing the profession, an experts testimony is not
required to show a violation of those rules.)
22
1.0 More than a scintilla of evidence shows that Sharpe was appellants
attorney:
An attorney-client relationship can extend to preliminary consultations
between the client and the attorney regarding the attorneys possible retention.
Nolan v. Forman, 665 F.2d 738, 739 n.3 (5th Cir. 1982). See also Comment 1 to
Rule 1.05 of the Tex. Disciplinary R. Prof. Conduct (duty of confidentiality applies
with respect to a person who sought to employ the lawyer.) [App. B5.2] Tex. R.
Evid. 503(a) (1) states that a "client" is a person who is rendered professional
legal services by a lawyer, or who consults a lawyer with a view to obtaining
professional legal services from that lawyer. [App. B6.4] Comment 4A to Rule
1.09 of the Tex. Disciplinary R. Prof. Conduct states that when the same matter
is involved, a lawyer is prohibited from switching sides and representing a party
whose interests are adverse to a person who sought in good faith to retain the
lawyer. 10 [App. B5.4]
Whether an attorney-client relationship exists is normally a fact issue for the
jury. Sutton v. McCormick, 47 S.W.3d. 179, 181 (Tex.App.-Corpus Christi 2001,
no pet.). An objective standard is used to look at what the parties said and did and
their subjective state of mind is not considered. Id. As a representative of clients,
10
Matthew 6:24, The Holy Bible, New International Version, Copyright 1973, 1978, 1984,
2011 by Biblica, Inc. (No one can serve two masters. Either you will hate the one and love
the other, or you will be devoted to the one and despise the other. You cannot serve both God
and money.)
23
a lawyer performs various functions. Tex. Disciplinary R. Prof. Conduct, 2 of the

Preamble. [App. B5.1] As advisor, a lawyer provides a client with an informed
understanding of the clients legal rights and obligations and explains their
practical implications. Id. As intermediary between clients, a lawyer seeks to
reconcile their divergent interests as an advisor and, to a limited extent, as a
spokesperson for each client. Id. A lawyer acts as intermediary if the lawyer
represents two or more parties with potentially conflicting interests. Tex.
Disciplinary R. Prof. Conduct Rule 1.07(d). [App. B5.3]
More than a scintilla of evidence shows that an attorney-client relationship
existed between Sharpe and appellant as of October 2004 because:
(i) Appellant met with Sharpe at his law office in October of 2004 for a legal
consultation regarding a shareholder/employment dispute he was having
with the primary defendants. [CR 1220, 1408, 1376-77, 1426];
(ii) During the consultation, appellant inquired of Sharpe as to how much he
would charge for his legal services. [CR 1221, 982] Sharpe responded that
he would assist appellant at no charge in honor of Mrs. Sharpes request that
he do so. [CR 1221] Sharpe admits that he was friends with the appellant at
this time [CR 1408]; and
24
(iii)
Sharpe admits that appellant sought to retain him during this
consultation. [CR 982].

More than a scintilla of evidence also shows that an attorney-client relationship
existed between Sharpe and appellant as of January 12, 2007 because:
(i)
In December of 2006, Sharpe made a written offer to appellant that
if appellant would dismiss his pending small claims suits against Henry
Chang, he would serve as an intermediary to help appellant and the
primary defendants resolve their disputes in an out-of-court setting. [CR
1284-85]
(ii)
On January 12, 2007, appellant accepted Sharpes offer by taking
voluntary dismissals of all his small claims suits against Henry Chang. [CR
1286] Sharpe testified that he persuaded appellant to withdraw his small
claims cases against Henry Chang. [CR 1377] Appellant testified that he
trusted Sharpe to do what he promised since they had been friends for
about six years. [CR 1221]
(iii)
Between December 26, 2007 and September 20, 2007, Sharpe did
the following:
a.
He advised appellant that it would be a waste of his and
appellants time to go forward with the small claims suits. [CR
1284];
25
b.
He prepared a letter for appellant to sign in order to secure a
dismissal of the small claims suits against Henry Chang. [CR 1285];
He then filed that dismissal letter with the court on appellants
behalf [CR 1286];
c.
He advised appellant that it would be in appellants best
interest to sign the non-suit letter [CR 1285];
d.
He set up a meeting with appellant and the primary defendants
at his law office on March 24, 2007 to attempt a resolution [CR
1287];
e.
He never specifically told appellant that he [supposedly] did
not represent appellant even after appellant sent him two letters
indicating that appellant was relying on him as an intermediary. [CR
1290-91, 1295]
f.
He again advised appellant that the proposals he had made
were in everyones best interest and that it was a proper way to
resolve the disagreement that currently exists. [CR 1297]
g.
He told the Changs that it was improper for them to withhold
schedule K-1 from appellant. [CR 1293] and
h.
He admits that he made specific recommendations to
appellant in writing as to things appellant could do to resolve his
conflict. [CR 1299];
(iv)
On January 6, 2010, Sharpe stated: At all times I have urged all of
the parties to resolve their differences and to effectuate reconciliation.

[CR 1330] On January 13, 2010, Sharpe stated: At no time have I done or
said anything but for his [appellants] good. [CR 1332,] 11 On December
11
How was Sharpes switching of sides on the same matters for appellants good?
26
9, 2009, Sharpe stated: At no time has your client [i.e. appellant] been
treated differently than the other shareholders. [CR 1317]
27
2.1 More than a scintilla of evidence shows that Sharpe breached his
fiduciary duty by using the knowledge he gained from appellant about the
existence of a dispute to further pit appellant against his opponents; only to
then side with the party where he stood most to gain financially.
Sharpe had a duty to make reasonable use of the confidence and trust
placed in him and to ensure that the transactions he entered into with appellant
were fair and equitable. Stephens County Museum, Inc. v. Swenson, 517 S.W.2d
257, 261 (Tex. 1974). Confidential information includes both privileged and
unprivileged client information. Tex. Disciplinary R. Prof. Conduct 1.05(a).
[App. B5.2] Sharpe had a duty not place his interests before appellants interests.
He could not use the advantage of his position to gain a benefit for himself at the
expense of appellant or place himself in any position where his self-interest might
conflict with appellants interests. Slay v. Burnett Trust, 187 S.W.2d 377, 38788
(Tex. 1945). The attorney-client relationship is one of most abundant good faith,
requiring absolute perfect candor, openness and honesty, and the absence of any
concealment or deception. Hoover Slovacek LLP v. Walton, 206 S.W.3d 557,
560-561 (Tex. 2006); Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex.App.-Houston
[14th Dist.] 2001, no pet.) Sharpe had a duty to make full disclosure of all
important information. Keck, Mahin & Cate v. National Un. Fire Ins. Co., 20
S.W.3d 692, 699 (Tex. 2000). More than a scintilla of evidence shows that
Sharpe breached these duties:
28
UNDERSTANDING WHAT TRANSPIRED

AT THE OCTOBER 2004 PRELIMINARY CONSULTATION
(a)
In October of 2004 appellant and his ex-wife made an appointment to meet
with Sharpe at his law office to discuss a falling out he had with the primary
defendants. [CR 1220] During that meeting, appellant told Sharpe at least the
following: (i) that he had a falling out with the other shareholders of WFFI and a
cook in the kitchen. Id. (ii) that he was a shareholder in WFFI and was entitled to
dividend income. [CR 1220, 1408]; and (iii) that he was terminated from his
employment at WFFI and entitled to lost wages. [CR 1220, 1272-73, 1349]
(b)
Appellant asked Sharpe what his legal options were and how to resolve his
dispute with the primary defendants. [CR 1220, 1319, 1324, 1329] Appellant
also inquired of Sharpe as to what Sharpe would charge for his legal services.
[CR 1221] Sharpe stated that he would assist appellant at no charge in honor
of Mrs. Sharpes request to do so. The following additional facts support that this
conversation actually took place between Sharpe and the appellant during the
October 2004 preliminary consultation:
(i)
Sharpe and his wife were patrons of WFFIs Chinese Food
restaurant and became friends with the appellant. [CR 1225, 1329,
1408];
29
(ii)
Sometime between September 12, 2004 and October 29, 2004
Appellant sent a gift to attorney Sharpes office in the form of a Chinese

food dish called leaf wrapped brown rice. [CR 1226] This dish was hand
made by appellants mother. Id. Sharpe was out of the office and his
secretary called Mrs. Sharpe to inform her of the gift. Id. Mrs. Sharpe
picked up the gift from Mr. Sharpes office and drove to the restaurant to
thank the appellant. This is when Mrs. Sharpe learned that appellant was
no longer employed at the restaurant. She then asked Mr. Sharpe to look
into the matter. Id.
But for the fact that Sharpe admitted and communicated the above information to
the appellant, appellant would not know that this is what had happened.
(c)
Sharpe then advised appellant that he had three legal options by which to
resolve his dispute: (i) he could buy-out the other shareholders, (ii) he could sell
his share to the other shareholders, or (iii) he could keep his shares and ask for
monthly dividend amounts. [CR 1221, 1408] At the close of the preliminary
consultation, Sharpe told appellant to think about which option he wanted to
exercise and call him back. [CR 1221] Appellant then called Sharpe back at a
later date and told him he wanted to keep his shares and continue to receive
30
dividends. Id.
(d)
In response to appellants phone call, Sharpe then drafted a demand type
letter [on plain bond paper] on behalf of appellant wherein appellant sought
$5,000 of monthly income from the primary defendants. [CR 1272-73] Sharpe
sent that letter to appellant for him to sign and send if he was satisfied. Id.
Appellant was not satisfied with the letter and never sent it. [CR 1221] Instead,
appellant called Sharpe back and asked him how he could go about collecting his
money from the primary defendants. Id.
SHARPE USED KNOWLEDGE OF THE EXISTENCE OF A DISPUTE TO

FURTHER PIT THE APPELLANT AGAINST HIS OPPONENTS
(e)
In response, Sharpe advised appellant to send his own demand letter and to
file suit in small claims court if the demand letter failed. [CR 1221] He advised
appellant that the small claims courts were divided into precincts and that he
needed to file suit in Precinct NO. 1. Id. Sharpe does not, and cannot now
credibly deny, that he in fact advised appellant of this. [CR 1427] Appellant
followed this advice from Sharpe and sent WFFI a detailed demand letter on June
23, 2005. [CR 1275].
31
SHARPE THEN SWITCHED SIDES TO REPRESENT THE PERSONS

WHERE HE STOOD THE MOST TO GAIN FINANCAILLY
(f)
Unbeknownst to the appellant, Sharpe, on the same day that appellant
sent the demand letter, switched sides to advise WFFI from behind the scenes
on how to respond to appellants demand letter. 12 [CR 1446] On July 22, 2005,
WFFI sent appellant a response letter denying his shareholder rights claims. [CR
1276] After receiving the denial, appellant then followed Sharpes advice and
filed suits in small claims court. [CR 1221, 1280-82] Those suits were filed
against Henry Chang, the chairman of WFFI. Id. Sharpe stepped in to defend
Henry Chang in those suits. [CR 1283-84]
(g)
More than a scintilla of evidence shows that Sharpe unlawfully switched
sides for his own actual or anticipated self-gain because:

(i)
As of the time of switching sides in June of 2005, Sharpe had
been a patron of WFFI for about six years. [CR 1223] As a patron, Sharpe
knew that WFFI had an extensive menu and was generally a successful
business enterprise located in the Ridglea Plaza Shopping Center. [CR 137071, 1392]
(ii)
At the time of switching side, Sharpe knew that appellants monthly
income and employment from WFFI had terminated. [CR 1272-73] From
this, he could reasonably surmise that appellant probably could not afford
12
32
legal fees as compared to WFFI, an on-going successful corporate entity.

Because Sharpe knew about appellants status as a shareholder of WFFI and
appellants recent termination, Sharpe could also deduce that there were
other, more powerful shareholders who were still operating the restaurant in
appellants absence. [CR 1408]
(iii)
Sharpe claims he does not recall when and under what
circumstances he first met the Changs. [CR 1415] The Changs claim that
Sharpe first identified himself to them as a patron of the restaurant, but they
do not recall when. [CR 1460] However, the Changs do confirm that
appellant knew that Sharpe was a lawyer and that they learned that
information from the appellant. Id. Sharpe admits that he never represented
the Changs before 9/12/04; the date when appellants employment
terminated. [CR 1422] From these facts a reasonable inference could be
drawn that appellant knew of attorney Sharpe and had made his
acquaintance before the Changs knew of Sharpe. Appellant confirms this in
his affidavit. [CR 1225]
Appellant also confirms that Sharpe had not
formally met the Changs before the October 2004 preliminary consultation.
Id.
(iv)
On January 5, 2010, Amin inquired of Sharpe what prompted
you to choose the side of the primary defendants over Mr. Chan when you
33
and your wife knew Mr. Chan on a personal basis and/or professional basis
long before you knew Mr. or Mrs. Chang? [CR 1322] Sharpe never
answered this question in his response letter. [CR 1323-25] So, he was
asked this exact question again the next day. [CR 1328] Sharpe again
declined to answer. [CR 1329-34]
(v)
However, more than a scintilla of evidence shows that Sharpe
switched sides with the intent to render legal services to the primary
defendants on a long-term, recurring basis:
a.
On May 4, 2005, Sharpe represented Karen Chang in a matter
that was unrelated to this suit. [CR 1446]
b.
As of June 23, 2005 Sharpe began assisting WFFI in
responding to appellants demand letter of June 23, 2005. Id. and [CR
1276, 1446]
c.
On August 13, 2005, Sharpe assisted WFFI in drafting
minutes of the directors meetings by which WFFI removed appellant
as secretary of the corporation and replaced him with Karen Chang.
[CR 1278]
d.
On August 13, 2005, Sharpe assisted WFFI in drafting
minutes of the stockholders meeting where by appellant was
illegally13 removed from the board of directors. [CR 1279]
e.
On September 15, 2006, Sharpe began defending Henry
Chang on three small claims court suits filed by the appellant. [CR
1283]
13
See Section II-C-4.0(b)(x), below (WFFI bylaws require stockholders meeting to remove a
director to be held at WFFIs place of business; not at WFFIs attorneys office). [CR 1263]
34
f.
On December 27, 2006, Sharpe offered to act as an
intermediary for the primary defendants with respect to appellants
claims against them. [CR 1284] Between that date and September 20,
2007, Sharpe wrote multiple letters wherein he sided with the primary
defendants by denying the validity of appellants claims. [CR 128499]
g.
On April 22, 2008 Sharpe defended Karen Chang in a
criminal suit filed by the City of Fort Worth which Sharpe later also
appealed on her behalf. [CR 1324, 1498-1500] That matter was
related to WFFIs discharge of grease into the cities storm drainage
system. Id.
h.
On September 21, 2009 Sharpe defended WFFI in the audit of
its books and records. [CR 1302-04] Between that date and December
9, 2009, Sharpe wrote and responded to multiple letters regarding the
audit. [CR 1304-17]
i.
As of February 3, 2010, Sharpe defended the primary
defendants in a breach of lease agreement suit filed by WFFIs
landlord. [CR 1396]
j.
In 2010, Sharpe began representing the primary defendants in
this suit and answered numerous discovery requests on their behalf.
[CR 1397-1400, 1450-84]
(vi)
On January 5, 2010, Amin inquired of Sharpe what was and is
your motivation for [allegedly] gratuitously rendering legal services to one

or more of the primary defendants for the past several years? [CR 1322] In
response to this question Sharpe stated: I have done this because I know
that many non-Chinese people have taken advantage of the Chinese in this
country. [CR 1324] The evidence and arguments below show that this
answer by Sharpe is nothing more than a pre-text for his true motivation
35
behind switching sides:

a.
Appellant is of Chinese origin just like the Changs. [CR 1225]
b.
As of October 2004, if there was anyone that appeared to need
pro bono legal services it was the appellant who had just been
terminated from his job at WFFI. It is undisputed that WFFI was an
on-going for-profit entity at that time while the appellant was merely
an individual. [CR 1508] And yet, Sharpe was willing to do little
more than draft a one-paragraph rudimentary demand type letter on
his behalf for him to sign. [CR 1272-74, 1329] When appellant asked
for additional assistance, Sharpe advised him to send his own 30-day
demand letter against WFFI. [CR 1221] As soon as appellant sent
that demand letter, Sharpe switched sides to assist WFFI in
responding to the demand. [CR 1221-22, 1276, 1446] Thereafter, he
began representing WFFI and its officers in various legal matters as
shown above.
c.
In his affidavit, appellant testifies that WFFI paid many
expenses in cash from cash income that it never reported to the IRS.
[CR 1224]
Appellant was an officer of WFFI before he was
terminated and he has intimate knowledge of WFFIs practices in this

36
regard. [CR 1278] Appellant states that WFFI routinely paid dividend
income, illegal immigrants wages, and other miscellaneous expenses
in cash from the unreported cash income. [CR 1224]
d.
Sharpe maintains that he has never been paid for all the legal
services that he rendered to the primary defendants over the span of

about seven years. [CR 1379] However, Sharpe has already proven
himself to be dishonest on at least one occasion.
SHARPES DISHONEST STATEMENT
ABOUT HIS ENGAGEMENT LETTER PRACTICES
e.
On January 6, 2010, Sharpe stated in writing the following:
The fact that I prepared a letter that he [appellant] could send

supports my position that an attorney-client relationship was never
established. If I were going to act as his attorney, I would have sent
a letter on his behalf and entered into a fee agreement letter even if it
were pro bono. [CR 1329]
f.
On January 22, 2010, appellant filed this suit and served
Sharpe with initial discovery requests shortly thereafter. [CR 12]

From the discovery responses, it became apparent that Sharpe was
37
dishonest about his January 6, 2012 statement.
What appellant
learned is that Sharpe never entered into any engagement letter

before acting as counsel for Karen Chang in 2005, for WFFI in
2005, for Henry Chang in the 2006, for WFFI in 2009, for all the
primary defendants in January of 2010 and also for them in this suit.
[CR 1397-1404, 1422, 1429, 1437-39] (The privilege log shows no
other documents were withheld from production which means that
the March 8, 2010 letter was the only engagement letter that ever
existed). The only time that Sharpe entered into a written
engagement agreement with any of these persons, whether
representing them on a pro-bono basis or otherwise, was on March
8, 2010, over a month after this suit was filed. [CR 1438]
g.
In other words, Sharpe seeks to employ a double standard
here. On the one hand, he wants to claim there was no attorneyclient relationship between him and the appellant as of the October
2004 consultation because of the absence of an engagement letter.
[CR 1329] On the other hand, he acted as counsel for the Changs
and WFFI on multiple occasions without one. 14
14
See Section II-B-2.1-(g)-(v), above.
38
h.
Furthermore, how could Sharpe safely begin to profit from
switching sides so long as appellant was still in the picture? He

reasonably couldnt. Could it be that Sharpe engaged in dilatory
tactics hoping either that appellant would just give up or that the
statute of limitations would run out on his claims? In effect, this
shows that even if it were true that Sharpe was not charging the
primary defendants for his services, he was doing so out of a selfinterest to give the appearance of clean hands until appellant
became a non-issue.
39
fiduciary duty to appellant by unlawfully switching sides on the same
matter.
Irrespective of whether appellant ever entered into an actual contract for
the rendition of legal services, Sharpe had a mandatory legal duty to be loyal and
not switch sides on the same matters that appellant previously sought in good
faith to retain him on. See Braun v. Valley Ear Nose and Throat Specialist, 611
S.W.2d 470 (Tex.Civ.App.-Corpus Christi 1980, no writ); Comment 4A to Tex.
Disciplinary R. Prof. Conduct 1.09 [App. B5.4]; Two Thirty Nine Joint Venture,
60 S.W.3d 896, 905-912 (Tex.App.Dallas 2001). During the October 2004
preliminary consultation, appellant discussed his shareholder rights claims with
Sharpe and sought to retain him with respect to those claims. 15 More than a
scintilla of evidence shows that Sharpe secretly switched sides on these same
matters that appellant sought to retain him on because:
(a)
Sharpe admits that after meeting with the appellant in October of 2004, he
then, on June 23, 2005, began representing WFFI on the same matters as those
involved in this suit. [CR 1446]
(b)
The matters involved in this suit are the same as the ones appellant
addressed in his June 23, 2005 demand letter. [CR 12, 23, 1275] Sharpe is the
15
See Section II-B- 2.1(a)-(e), above.
40
one who advised appellant to send this demand letter. [CR 1221]16
(c)
The matters addressed in the June 23, 2005 demand letter are also the same
as those appellant discussed with Sharpe in the October 2004 preliminary

consultation (i.e. employment issues and the right to receive dividends and sell
his shares)17. [CR 1221, 1349, 1408]
(d)
About thirty days after appellant sent his demand letter and after Sharpe
had already switched sides, WFFI, on July 22, 2005, sent appellant a response
letter denying his demands. [CR 1276] From the face of WFFIs letter, there is
no clear and specific notice to appellant that Sharpe was actually acting as
WFFIs counsel. Id. This is because WFFIs letter is on plain bond paper and
signed by president, Henry Chang. Id. The response letter is not on Sharpes
letterhead even though Sharpe admits that he was acting as WFFIs attorney as of
a month earlier. Id. In effect, Sharpe was acting as counsel for WFFI from
behind the scenes.
(e)
Appellant testifies that the first indication he ever received that Sharpe may
have switched sides is when he received WFFIs July 22, 2005 denial letter;
about a month after the actual switching of sides occurred. [CR 1222] This is
16
It is irrelevant that appellant sent the letter as a pro se claimant because attorneys are
permitted to act merely as advisors as opposed to outright advocates; See 2 to the
Preamble to the Tex. Disciplinary R. Prof. Conduct [App. B5.1]
17
Section II-B-2.1(a)-(e), above.
41
because Sharpes law firms name and address appear in the last line of that
letter. [CR 1276] This is proof positive that there could not have been consent
and full disclosure of the conflict before Sharpe switched sides.
(f)
There in fact is no evidence in any of the correspondence between Sharpe
and appellant that Sharpe ever made full disclosure to appellant and obtained his
consent before beginning to represent WFFI on June 23, 2005. [CR 1272-1304]
There can be no waiver of a conflict of interest without such informed consent.
See Comment 10 to Rule 1.09 of Tex. Disciplinary R. Prof. Conduct. [App. B5.4]
Full disclosure means just that affirmative revelation by the attorney of all the
facts, legal implications, possible effects, and other circumstances relating to the
proposed representation. Financial General Bankshares, Inc. v. Metzger, 523 F.
Supp. 744, 771 (D.C. 1981) citing Bryant v. Lewis, 27 S.W.2d 604, 607
(Tex.Civ.App.-Austin 1930, writ dismd w.o.j.). A client's mere knowledge of
the existence of his attorney's other representation does not alone constitute full
disclosure sufficient to waive a conflict of interest. 18 Id.
(g)
Appellant did not actually find out that Sharpe begin representing WFFI on
June 23, 2005 with respect to the same claims that are the subject of this suit until
over six years after it happened (i.e. when he received Sharpes discovery
responses in this suit). [CR 1222, 1446]
18
This law makes some sense in light of Tex. Disciplinary R. Prof. Conduct 1.07 and 1.09.
42
fiduciary duties by failing to intermediate in good faith, without deception,
and/or impartially.
A lawyer acts as an intermediary if the lawyer represents two or more
parties with potentially conflicting interest. Tex. Disciplinary R. Prof. Conduct
1.07(d). [App. B5.3]
As intermediary between clients, a lawyer seeks to
reconcile their divergent interests as an advisor and, to a limited extent, as a

spokesperson for each client. Tex. Disciplinary R. Prof. Conduct Preamble-2.
[App. B5.1] The lawyer must carry out this role impartially. Tex. Disciplinary R.
Prof. Conduct 1.07-Comment 7. [App. B5.1]; Restatement (Second) of Trusts at
183 (When there are two or more beneficiaries of a trust, the trustee is under a
duty to deal impartially with them). Further, the attorney-client relationship is
one of most abundant good faith, requiring absolute perfect candor, openness
and honesty, and the absence of any concealment or deception. Goffney, 56
S.W.3d at 193. An attorney must fully disclose all important facts and every
facet of a proposed settlement. See Keck, Mahin & Cate, 20 S.W.3d at 699 and
Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988). More than a scintilla of
evidence shows Sharpe breached these duties because:
(a)
Sharpe has known about appellants right to receive dividends since
October of 2004. [CR 1408, 1275, 1289] Sharpe also had specific knowledge
during the intermediation that appellant was making a claim for unpaid
43
dividends. [CR 1288-89] However, Sharpe opted to remain silent on and ignore
that claim in favor of the primary defendants. There is no evidence in any of the
intermediation correspondence that Sharpe ever addressed appellants dividend
claim. [CR 1283-99] Through litigation it has now been determined that WFFI
breached its fiduciary duty to appellant by maliciously suppressing, converting
and/or diverting dividend monies owed to him and that his dividend claim was a
valid one. [CR 13-15, 1239, 1503-05] See also Holt v. Heine, 835 S.W.2d 80, 83
(Tex. 1992) (allegations of fact in petition are deemed admitted); Brantley v.
Etter, 662 S.W.2d 752, 756 (Tex.App.-San Antonio 1983), ref. n.r.e, 677 S.W.2d
503 (Tex. 1984) (in a sanctions default, liability is determined without
evidentiary support).
(b)
These same arguments hold true for appellants earned sick leave and
vacation pay claims. [CR 1275, 1288-92] Sharpe simply told appellant that he
could not be compensated for time when he refused to work. [CR 1292] Sharpe
tried to gloss over these claims in favor of the primary defendants by making it
appear that appellant was unreasonably seeking money that he did not earn. Id.
Appellant testifies that Sharpe ignored his dividend and accrued wages claims.
[CR 1223] It has now been determined that WFFI wrongfully failed to pay
appellant on these claims. [CR 13-15, 1239, 1503-05, 510, 532] See also Holt,
835 S.W.2d at 83; Brantley, 662 S.W.2d at 756.
44
(c)
Further, and once again in favor of the primary defendants, Sharpe either
implied to appellant that he did not have a valid breach of contract claim or
ignored it all together. [CR 1292] It has now been proven that WFFI is liable for
wrongfully terminating and breaching its employment contract with appellant.
[CR 13-15, 1239, 1503-05, 510, 532, 1220] See also Holt, 835 S.W.2d at 83;
Brantley, 662 S.W.2d at 756.
(d)
Sharpe set a meeting with appellant and the primary defendants at his law
office on March 24, 2007 to attempt a resolution of their disputes. [CR 1287] He
then cancelled that meeting within less than a minute of it starting and asked
appellant to go home and put his demands in writing. [CR 1224]
(e)
Sharpe never informed the appellant that he [supposedly] did not represent
the appellant during the intermediation even after appellant sent him two letters
letting him know that appellant relied on him and considered him to be acting as
an intermediary. [CR 1290-91, 1295-96] More specifically, appellant stated Mr.
Shelby Sharpe, I am praying the same God we are worshipping will give you the
wisdom how to solve and settle this tragedy. Id. See Cantu v. Butron, 921
S.W.2d 344, 351 (Tex.App.-Corpus Christi 1996, writ denied) (an attorney may
incur liability when the circumstances would lead a person to believe the attorney
has undertaken representation).
(f)
Sharpe misrepresented to appellant that appellant would have to help pay

45
for an independent expert to determine the value of his shares before he could sell
them to the primary defendants. [CR 1292] This was false because WFFI had the
sole responsibility to hire a valuation expert under Article 8 of WFFIs
shareholder buy-sell agreement. [CR 1269]
(g)
Sharpe misrepresented to appellant that the proposal he had made was in
everyones best interest and that it was a proper way to resolve the
disagreement that currently exists. [CR 1297]
Under Sharpes proposal,
appellant would have received nothing for his legitimate claims and would have
to come out-of-pocket to pay for an expert; when WFFI had the sole obligation to
bear that expense.
(h)
The totality of the foregoing incidents, when viewed in light of Sharpe
secretly and unlawfully switching sides for actual or anticipated self-gain, shows
not that Sharpe was merely careless; but rather that he could have cared less
about the appellant and impartially intermediating appellants claims. These facts
support appellants fraud allegations that Sharpe was merely posing and
purporting to be his intermediary. [CR 18, 15] The Texas Supreme Court has
stated: It is the difference between negligent conduct and deceptive conduct. To
recast this claim as one for legal malpractice is to ignore this distinction. Latham
v. Castillo, 972 S.W.2d 66, 68 (Tex. 1998); Bellows v. San Miguel, 2002 WL
835667, *11 (Tex.App.-Houston [14th Dist.] 2002, pet. denied).
46
fiduciary duty to timely withdraw from defending the primary defendants in
this suit.
A lawyer has a duty to follow his clients instructions. Hasely v. Whitten,
580 S.W.2d 104, 106 (Tex.App.-Waco 1979, no writ). A lawyer has a mandatory
duty to withdraw from his role as an intermediary if a client so requests, if he
cannot act impartially, or if he believes litigation will be needed to resolve the
matter. Tex. Disciplinary R. Prof. Conduct 1.07(c) and Comment 7. [App. B5.3]
Thereafter, he cannot continue to represent any of the clients in the matters that
were the subject of the intermediation. Id. More than a scintilla of evidence
shows that Sharpe breached these duties because:
(a)
In midst of the intermediation, on July 28, 2007, appellant indicated that he
was dissatisfied with Sharpe as an intermediary and requested that a neutral

arbitrator now resolve his case. [CR 1295, 1224] After receiving this letter,
Sharpe nevertheless continued to advise appellant that the proposal he made as
intermediary was the proper way to resolve the parties disagreement and was in
everyones best interest. [CR 1297-99] Appellant then began seeking other
counsel. [CR 1300-01]
(b)
On or about September 16, 2009, Sharpe received a letter from Amin that
put him on direct notice that appellant was seeking to audit the books of WFFI to
obtain information in aid of legitimate litigation [CR 1302] Sharpe,
47
nevertheless, stepped in and defended WFFI in the audit after the failed 2007
intermediation concerning the same dividend matters that were the subject of the
audit. [CR 1304-17]
(c)
On April 21, 2010, Amin asked Sharpe in writing to withdraw from
representing the primary defendants in this suit [CR 1340]. Sharpe refused to
comply until about a year later and after appellant incurred substantial legal
expense to have the court order him permanently withdrawn. [CR 1489-90]
48
3.1 More than a scintilla of evidence shows that Sharpes breach injured
appellant.
Sharpes conduct injured appellant because (i) it thwarted the timely
prosecution, settlement, resolution, and/or payment of his shareholder rights
claims, (ii) it undermined his on-going rights as a WFFI shareholder, and /or (iii)
it caused appellant to incur thousands of dollars in attorneys fees to rectify the
consequences of Sharpes misconduct. More than a scintilla of evidence shows
these injuries because:
(a)
Before Sharpes switching of sides, appellant was, at a minimum, a pro-se
litigant who had the backing and support of Sharpe as an advisor against pro-se
adversaries who had yet to retain counsel. After switching sides, appellant
became a pure pro-se litigant against adversaries who now had the secret backing
and support of Sharpe. Appellant testified that: By switching sides on me, Mr.
Sharpe made it more difficult for me to settle my claims against the primary
defendants. I was left without the help of a lawyer while my opponents, who
previously did not have a lawyer, were being defended by my lawyer. [CR
1223]
(b)
After unlawfully switching sides, in 2006, Sharpe stepped in to defend
Henry Chang in the small claims suits that appellant filed. [CR 1283] If Shape
had not switched sides, Henry Chang would have had to hire independent counsel
or represent himself pro-se.
Sharpe then persuaded appellant to voluntarily

49
dismiss those suits in favor of an out-of-court settlement through intermediation.

[CR 1377] In this regard, appellant testified: By Mr. Sharpe persuading me to
release my small claims suits against Henry, I also lost out on an opportunity to
have a court-ordered mediation of my claims take place back in the Winter of
2006. [CR 1223] Sharpes own letter indicates that said mediation was in fact
cancelled. [CR 1298]
(c)
Appellant testified that: Mr. Sharpes switching of sides and his not really
caring about my wage, dividend and value of my shares claims against WFFI also
caused an undue delay in the settlement of and payment of my claims. This delay
spanned over the course of several years. In 2008 the United States experienced
a severe economic downturn. In October of 2009, WFFI closed its doors and
went out of business. Because of Mr. Sharpes conduct, I am no longer able to
collect money for my claims against WFFI from WFFI. If Mr. Sharpe had acted
fairly, honestly, impartially, and mediated my claims in good faith, I would have
settled those claims for a reasonable sum of money within a few months after
January 12, 2007, if not long before then. [CR 1223, 1234] Appellants injury
here is similar to a situation where an attorney misses a statute of limitations
deadline in filing suit.
(d)
Appellant testified that he incurred thousands of dollars in attorneys fees
as a result of Sharpes breach of his fiduciary duties. [CR 1224] Those fees relate
50
to appellant now having to show that he had valid claims against the primary
defendants which Sharpe failed to timely prosecute, settle, or resolve as
appellants attorney. [CR 1485-88] Because those fees relate to the prosecution
of the shareholder rights claim (as opposed to the legal malfeasance action), they
are collectible in equity from Sharpe. See Estate of Arlitt v. Paterson, 995 S.W.2d
713, 717-721 (Tex.App.-San Antonio 1999, pet. denied). Some of these fees were
incurred in obtaining a court order to have Sharpe permanently withdrawn
from representing the primary defendants in the shareholder rights action. [CR
1223-24, 85-89]
(e)
By court orders, WFFI is deemed liable to appellant on his shareholder
rights claims. [CR 532, 1239, 1503-05] See also Brantley, 662 S.W.2d at 756.
More than a scintilla of evidence shows that appellant was proximately and
monetarily damaged by Sharpes wrongful conduct concerning those claims. 19
19
See Sections II-C-5.1 & 5.2, below.
51
3.2 More than a scintilla of evidence shows that Sharpe benefitted from the
breach.
During the October 2004 preliminary consultation, Sharpe gained
knowledge from appellant of the existence of a legal dispute between appellant
and the primary defendants. He used that knowledge to further pit one side
against the other, only to then switch sides and come to represent the side where
he stood the most to gain financially. 20 More than a scintilla of evidence shows
that Sharpe benefitted from this conduct because he gained association with a
more prominent, for-profit corporate client and its controlling officers, Henry and
Karen Chang, who could serve as a potential source for, and did serve as a source
for recurring business for his law firm. 21 In MacDonald v. Follett, 180 S.W.2d
334, 338 (Tex. 1944), the Court stated:
it is stated that the rule is: '* * * a particular application of a broad
principle of equity, extending to all actual and quasi trustees, that a
trustee, or person clothed with a fiduciary character, shall not be
permitted to use his position or functions so as to obtain for himself any
advantage or profit inconsistent with his supreme duty to his beneficiary.'
That rule is sound and we heartily subscribe thereto. [Emphasis added].
More than a scintilla of evidence shows that the Changs were the
controlling officers, directors, and majority shareholders of WFFI because the
Changs admit these facts: (a) Henry Chang has been the president of WFFI and
been on its board of directors since its inception; [CR 1266, 1270, 1452-53, 1380]
20
21
Sections IIB2.1 & 2.2, above.

Section IIB 2.1(g), above.
52
(b) Karen Chang has been an officer in and on the board of directors of WFFI
since its inception; [1452, 1383] (c) The Changs signed all the payroll checks;
[CR 1395] (d) The Changs admit to being majority shareholders of WFFI with
Mu; [CR 1453] (e) Karen Chang has been the secretary of WFFI since August
13, 2005; [CR 1278]
Alternatively, there exists a genuine issue of fact as to whether Sharpe is
being honest about his [allegedly] never being paid for any of the legal services
he rendered to the primary defendants over the time period between 2005 and
2011.22
22
Section II-B-2.1(f)-(g), above.
53

each element.
Appellant alleges that Sharpe conspired with one or more of the primary
defendants (i) to breach his own fiduciary duties to the appellant and/or (ii) to
breach their fiduciary duties to appellant. [CR 20] With respect to the former,
Sharpe conspired with WFFI to defend it against appellants shareholder rights
claims by unlawfully allowing himself to be hired away by WFFI. [CR 13] With
respect to the latter, Sharpe conspired with the primary defendants to maliciously
suppress, convert and/or divert dividend monies owed to appellant. Id. The
elements of a civil conspiracy claim are:
1.
2.
3.
4.
5.
Two or more persons;

An object to be accomplished;
A meeting of the minds on the object or course of action;
One or more unlawful, overt acts; and
Damages as the proximate result.
See Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Conspiracy is
a derivative tort and liability is dependent upon participation in an underlying tort
by at least one defendant. Preston Gate, LP v. Bukaty, 248 S.W. 3d 892, 898
(Tex.App.-Dallas 2008, no pet.); In re Arthur Anderson, 121 S.W.3d 471, 482
(Tex.App.-Houston [14th Dist.] 2003, orig. proceeding).
Proof of a civil
conspiracy usually must be made by circumstantial evidence. See Schlumberger

Well Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 858 (Tex.
54
1969). Recovery for conspiracy is based on the injury caused by the underlying
tort. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996).
For summary
judgment purposes, the element of "meeting of minds" generally may not be

disproven as a matter of law merely by the denial statements of an interested
party. Castaneda v. Texas Dep't of Agric., 831 S.W.2d 501, 505 (Tex.App.Corpus Christi 1992, writ denied). The general rule is that conspiracy liability is
sufficiently established by proof showing concert of action or other facts and
circumstances from which the natural inference arises that the unlawful, overt
acts were committed in furtherance of common design, intention, or purpose of
the alleged conspirators. International Bankers Life Ins. Co. v. Holloway, 368
SW 2d 567, 581 (Tex. 1963).
1.0 More than a scintilla of evidence shows that two or more persons
were involved.
An attorney can conspire with a client to commit a tort against another
party. Lesikar v. Rappeport, 33 S.W.3d 282, 318 (Tex.App.-Texarkana 2000, pet.
denied). An attorney may be held liable for conspiracy where, in addition to
representing his client, he breaches some independent duty to a third person or
acts in his own personal interest, out-side the scope of his representation of the
client. Bernstein v. Portland Sav. & Loan Ass'n, 850 S.W.2d 694, 709 n. 12
(Tex.App.-Corpus Christi 1993, writ denied), overr. on other grounds, Crown
55
Life Ins. Co. v. Casteel, 22 S.W.3d 378, 389 (Tex. 2000); Favila, 2010 WL
3448606, *8 (quoting Doctors Co., 49 Cal. 3d at 46, 260 Cal. Rptr. 183, 775 P.2d
508); Stiles v. Onorato, 318 S.C. 297, 300, 457 S.E.2d 601, 602 (1995). A
person can be liable for knowingly participating in anothers fiduciary breach.
Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 51214 (Tex.
1942)
Thus, Sharpe, as an attorney, can conspire with one or more of the
primary defendants, as his clients.

2.1 More than a scintilla of evidence shows that one of the objects to be
accomplished was to defend WFFI against appellants shareholder rights
claims.
A person can be held liable for conspiracy if he is engaged in a lawful
purpose but employs unlawful means to accomplish that purpose. See Peavy v.
WFAA-TV, 221 F.3d 158, 173 (5th Cir. 2000) (conspiracy to investigate and
expose wrongdoing (lawful purpose) by violating the Texas Wire Tap Act
(unlawful means); Dallas ISD v. Finlan, 27 S.W.3d 220, 232 (Tex.App.-Dallas
2000, pet. denied) (conspiracy to obtain consent judgments against one entity
(lawful purpose) to collect them from another entity (unlawful means). More
than a scintilla of evidence shows that Sharpe defended WFFI against appellants
claims because (i) Sharpe admits that he began defending WFFI on these claims
as of June 23, 2005. [CR 1446]; (ii) Sharpe admits that he defended WFFI in the
2009 audit of its books. [CR 1304-17]; and (iii) Sharpe admits that he defended
56
WFFI in this suit. [CR 1335]

2.2 More than a scintilla of evidence shows that the other object to be
accomplished was to maliciously suppress, convert and/or divert dividend
monies owed to appellant.
Breach of fiduciary duty can serve as the basis of a conspiracy claim. See
Kirby v. Cruce, 688 S.W.2d 161, 166 (Tex.App.-Dallas 1985, writ refd n.r.e).
WFFI had a fiduciary duty not to maliciously suppress, convert and/or divert
dividend monies owed to appellant. See Hinds v. Southwestern Savings Assn,
562 S.W.2d 4, 5 (Tex.Civ.App.-Beaumont 1977, writ refd n.r.e.); Patton v.
Nicholas, 279 S.W.2d 848, 854 (Tex. 1955); Hersbach v. City of Corpus Christi,
883 S.W.2d 720, 735 (Tex.App.-Corpus Christi 1994, writ denied). The Texas
Supreme Court has held that a corporation is a trustee for the interests of its
shareholders in its property, and is under the obligation to observe its trust for
their benefit. Its possession is friendly, and not adverse, and the shareholder is
entitled to rely upon its not attempting to impair his interest. Yeaman v.
Galveston City Co., 167 S.W. 710, 723-24 (Tex. 1914) (conversion of dividend
monies is a breach of trust by the corporation). In other words, WFFI had a duty
to timely pay appellant his dividends. It would be a breach of that duty for WFFI
to engage in conduct designed to needlessly thwart appellants ability to collect
that money. More than a scintilla of evidence shows that WFFI maliciously
suppressed, converted and diverted dividend monies owed to appellant because:
57
(a) WFFI admits to suppression, diversion, and/or conversion of appellants

dividend monies and dividend records. [CR 13-16, 20-21, 1239, 1503-05, 532];
See also Holt, 835 S.W.2d at 83; Brantley, 662 S.W.2d at 756 and Ritchie, No.
11-0447 at *41-42.
(b) WFFI admits to paying dividends to shareholders [at least] in the year
2005; [CR 1470]
(c) Appellant was excluded from the 2005 dividend payments. Appellant
testifies that he has only received one dividend payment in the amount of $2,000
since his termination in September of 2004. [CR 1224, 1233] He further testifies
that he never received any dividend payments after November of 2004. Id; and
(d) Appellant testifies that prior to his termination he was being paid dividends
in the average amount of $1,689.00 on a monthly basis. [CR 1233].
3.1 More than a scintilla of evidence shows that Sharpe and WFFI had a
meeting of the minds for Sharpe to defend WFFI against appellants
shareholder rights claims.
WFFI admits that it hired away Sharpe after appellant had already sought
legal advice from him and revealed confidences to him with regards to potential
claims appellant had against WFFI. [CR 13, 1239, 1503-05, 532] Appellant
sought such advice from Sharpe in October of 2004. [CR 1220-21] WFFI then
hired Sharpe to defend it against appellants shareholder rights claims in 2005,
2009, and in this suit. [CR 1446, 1335]
58
3.2 More than a scintilla of evidence shows that Sharpe and WFFI had a
meeting of the minds for WFFI to maliciously suppress, convert and/or
divert dividend monies owed to appellant.
Sharpe has known about appellants status as a WFFI shareholder and his
right and desire to receive dividends since October of 2004. [CR 1220, 1408] In
April of 2007, Sharpe was again apprised of appellants desire to be paid his
dividend income. [CR 1288-89] Sharpe, nevertheless, opted to remain silent on
the subject of appellants dividend income, even when he had a fiduciary duty to
speak.23 [CR 1284-99]
4.0 More than a scintilla of evidence shows that one or more unlawful,
overt acts were committed by Sharpe or WFFI in furtherance of the
conspiracies.
(a)
By representing WFFI in 2005 against appellants shareholder rights
claims, Sharpe unlawfully switch sides on the same matters that appellant sought
to retain him on in October of 2004.24 Sharpe also defended WFFI against
appellants claims by conducting a fraudulent intermediation. 25 Finally, Sharpe
defended WFFI in this suit by refusing to timely withdraw in violation of Tex.
Disciplinary R. Prof. Conduct 1.07.26
23
Section IIB-2.3, above.

Sections IIB 2.1&2.2, above.
25
26
24
59
(b)
More than a scintilla of evidence shows that WFFI breached its fiduciary
duties to appellant because the facts identified below have been deemed admitted
against WFFI by court orders and by operation of law. [CR 1239, 1503-05, 532];
See Holt v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). It has been deemed admitted
that WFFI acted wrongfully [CR 13] by:
(i)
Purposefully destroying corporate records that would allow for
FRANCIS CHAN to account for the amount of dividends owed to him.
[CR 13]
(ii) Manipulating its finances so that profits were not distributed as
dividends but were diverted to majority shareholders and/or their close
relatives through excessive salaries, bonuses, or other personal benefits.
[CR 13]
(iii) Misrepresenting to FRANCIS CHAN that it did not make a profit
sufficient to pay FRANCIS CHAN a dividend, when it in fact did. [CR 14]
(iv) Refusing to give FRANCIS CHAN access to corporate information
by alleging that it was destroyed when it, in fact, existed. [CR 14]
(v) Remaining silent on the subject of dividend income when it had a
fiduciary duty to disclose such information to FRANCIS CHAN. [CR 21]
(vi)
Excluding appellant from participating in the management. [CR 14]
More than a scintilla of other evidence supports the above deemed

admissions:
(vii) Karen Chang admits to and apologized for being involved in the
destruction of WFFIs records. [CR 1307-10, 1323]
(viii) WFFI admits to producing unaltered income records for the time
period before January of 2003 and for the time period after May of 2007,
but not for the time period in between. [CR 1473, 1476, 13, 14]
60
(ix) On July 22, 2005, Henry Chang told appellant that WFFI did not
have money to pay his claims. [1275-76] However, WFFI admits to
making a profit and paying dividends in 2005. [CR 1470] It also renewed
a five year lease in 2005 which contained a percentage of sales clause in
addition to a fixed monthly rental obligation. [CR 1392]
(x) More than a scintilla of evidence shows that Sharpe assisted WFFI
in preparing the letter containing the above misrepresentation because
Sharpe admits that he started defending WFFI on June 23, 2005 and
because his name and address appear in that letter. [CR 1446, 1276]
(xi) In August of 2005, appellant was removed from WFFIs board of
directors. [CR 1277-79] The minutes of that meeting reflect that such
removal took place at Sharpes law office in Fort Worth and that the
minutes were drafted on Sharpes computer. Id. This removal was
unlawful, however, because WFFIs bylaws require that a meeting to
remove a director must take place at WFFIs own office located in
Benbrook, Texas. [CR 1263]
(xii) The notice of the special meeting of the directors refers to Section
2.03 of WFFIs bylaws. [CR 1271-79] This tends to indicate that Sharpe
had read the bylaws; but he nevertheless decided to hold the meeting to
remove appellant as a director at an illegal venue. Id.
61
5.1 More than a scintilla of evidence shows that appellants damages were
a proximate result of the wrongful acts underlying the conspiracies and/or
Sharpes direct fiduciary breach.
Summary judgment may not be had on the element of proximate cause
because appellant testified that defendants wrongful conduct negatively affected
the value of his shareholder rights claims. [CR 1223, 1233-34] This alone is
sufficient to create an issue of fact on the proximate cause element as a matter of
law. See Stonewall Surplus Lines Ins. Co. v. Drabek, 835 S.W. 2d 708, 712
(Tex.App.-Corpus Christi 1992, writ denied).
Also, where a plaintiff has
presented some evidence of unconscionable action by an attorney [e.g.

unlawfully switching sides for actual or anticipated self-gain and fraud by the
way of posing as an intermediary] he is not required to prove the suit within
suit sub-element of proximate cause (i.e. that his damages were recoverable
and collectible). See Latham, 972 S.W.2d at 69; Bellow, 2002 WL 835667 at
*11 (Bellows argues that San Miguel was required to prove her damages on the
basis of the suit within a suit requirement for legal malpractice claims. We
disagree. San Miguels claims were for breach of fiduciary duty and DTPA
violations, not negligence. Therefore, she was not required to prove her damages
as a suit within a suit).
Even if appellant were required to prove the
collectability element, appellant argues that he is exempt from having to do so

because the financial records that WFFI has destroyed or is concealing are the
62
very same records that appellant would need to prove the collectability of his
damages. [CR 1234] Further, WFFI admits that its insolvency status did not
begin until late 2007 while the fraudulent intermediation complained of occurred
in early 2007. [CR 1311, 1284-99]
5.2 More than a scintilla of evidence shows that appellant suffered
monetary damages as a result of the wrongful acts underlying the
conspiracies and/or Sharpes direct fiduciary breach.
More than a scintilla of evidence shows injury because appellant testified
that he suffered the following forms of damages: (a) a total loss in the value of
his shares in the amount of $60,000; (b) accrued, but unpaid dividend income in
the amount of $54,048; (c) accrued, but unpaid sick leave in the amount of
583.31; (d) earned, but unpaid vacation pay in the amount of $1,953.12; (e)
breach of employment contract damages in the form: (i) of annual bonus monies
of $1,800, (ii) three months of unemployment pay of $7,500, (iii) difference in
monthly salary between WFFI and his current employer of $14,500, and (iv) and
vacation pay benefits of $1,510.42; and (f) thousands of dollars in attorneys fees
to prosecute these claims. [CR 1233-35]
63
II-D. The court erred in barring appellants claims based on any limitations
defense because (1) a two-year negligence limitations period does not apply as
Sharpe argues, (2) Sharpe failed to meet his burden to show when appellants
claims accrued, and (3) more than a scintilla of evidence shows that
appellants claims accrued within the applicable four-year limitations period.
(1)
Sharpe argued that appellants legal malfeasance claim should be
reclassified as a legal malpractice/negligence action. [CR 961] Appellant objected

to such reclassification. [CR 1114, 1118] The court erred by doing so because: (a)
appellant pled that Sharpe posed and purported to act as an intermediary [CR
18, 15], (b) the evidence supports a finding of fraud during the intermediation 27,
and (iii) Sharpes violations of the disciplinary rules are violations of a minimum
mandatory standard of conduct; not a standard of care. Note the repeated use of
the words shall and shall not in those ethical rules. See Tex. Disciplinary R.
Prof. Conduct 1.05(b), 1.07, and 1.09(a). [App. B5.2-B5.4] It is improper to
reclassify a claim involving deceptive conduct into a mere negligence action. See
Latham, 972 S.W.2d at 68. Thus, a two-year limitations period for negligence
actions does not apply.
(2)
A defendant moving for summary judgment on the affirmative defense of
limitations has the burden to conclusively establish that defense. See KPMG Peat
Marwick v. Harrison County Housing Finance Corp., 988 S.W.2d 746, 748 (Tex.
1999). The defendant must prove when the cause of action accrued. Id. Tex. Civ.
27
See Section II-B-2.3, above.
64
Prac. & Rem. Code 16.004(a) states that a person must bring a breach of fiduciary
duty suit not later than four years after the day the cause of action accrues. [App.
B2.1] Appellant alleged the continuing tort doctrine as an exception to the legal
injury rule for determining the accrual date. [CR 19] See First General Realty
Corp. v. Maryland Cas. Co., 981 S.W.2d 495, 501 (Tex.App.-Austin 1998, no
pet.).
Appellant also pled fraudulent concealment and the discovery rule as
theories to defer the accrual date. [CR 19, 529] See S.V. v. R.V., 933 S.W.2d 1, 4
(Tex. 1996). Sharpes motions are defective in that they present no evidence of
when appellants claims against him accrued. [CR 956]
(3)
Sharpe cannot prevail on a limitations defense against the legal malfeasance
action because appellants element of damage manifested sometime after January

22, 2006; when WFFI became insolvent and appellant could no longer collect
money for his shareholder rights claims from WFFI. [CR 1223, 1234] See Willis v.
Maverick, 760 S.W.2d 642, 645-646 (Tex. 1988) (Accordingly, we hold that the
statute of limitations for legal malpractice actions does not begin to run until the
claimant discovers or should have discovered through the exercise of reasonable
care and diligence the facts establishing the elements of his cause of action.).
Also, the fraudulent intermediation complained of, itself, took place in 2007 which
is within the four-year limitations period. [CR 1284-95]
65

Sharpes summary judgment motions and evidence.
(1)
Appellant moved the court to take judicial notice of pertinent adjudicative
facts pursuant to Tex. R. Evid. 201. [App. B6.3] [CR 1098] The court erred by
declining to take notice as requested because the judicial notice statute is
mandatory in nature when the party requesting notice has complied with the
terms of the statute; as appellant did in this case. [CR 1098, 1123-27, 1630, 1682,
1688]
(2)
Appellant objected to the defects in the form and substance of Sharpes
motions. [CR 1104-23] The court erred in overruling his objections because
Sharpes motions make or are based on multiple erroneous, false, and/or
unsubstantiated assertions, conclusions or implications. [CR 1104-23, 1630,
1682, 1688]
(3)
Notwithstanding whether an objection was lodged, for purposes of
summary judgment, the court erred by considering evidence that contradicts any
admissions favorably supporting appellants claims or defenses. See Marshall v.
Vise, 767 S.W.2d 699, 700 (Tex.1989); Beasley v. Burns, 7 S.W.3d 768, 770-71
(Tex.App.-Texarkana 1999). Appellant objected to Sharpes attempts in this
regard. [CR 1106-07, 1123]
66
(4)
Appellant objected to defects in Sharpes summary judgment evidence.
[CR 1109-11] The court erred in overruling those objections because:

(a) The affidavits of the Changs and of Tammy Chan fail to affirmatively
show these witnesses are competent to testify as required by Tex. R. Civ.
P. 166a(f) [App. B4.7] [CR 970-78]; and
(b) The affidavits cannot readily be controverted for the multiple reasons
stated in the appellants summary judgment response, but especially those
argued under Section III below. [CR 1109-11] See Casso v. Brand, 776
S.W.2d 551, 558 (Tex. 1989) and Tex. R. Civ. P. 166a(c) [App. B4.5]
(5)
The court erred in finding that the WFFI admissions relied upon by
appellant do not constitute admissions of fact because they [allegedly] are

conclusions, opinions, or statements of subjective intent. See Boulet v. State, 189
S.W.3d 833, 838 (Tex.App.-Houston [1st Dist.] 2006, no pet.) For example,
appellants original petition factually alleges that the defendants:
(a) told plaintiff during the TBCA audit that WFFIs records were
destroyed when they in fact existed. [CR 14]; (b) diverted profits to
majority shareholders via excessive salaries, bonus, or other personal
benefits while excluding appellant from such informal dividend payments.
[CR 13-14]; (c) hired away Sharpe after appellant sought legal advice from
and revealed confidences to Sharpe on the same claims appellant had
against them. [CR 13]; (d) terminated appellants employment even while
he continued to own WFFI stock and when WFFI and appellant had an
agreement that appellant would be employed so long as he continued to
own WFFI stock. [CR 14-16, 18]; (e) failed to pay plaintiff his accrued
annual leave, vacation pay, sick leave, and bonuses. [CR 15]; (f)
suppressed dividends owed to appellant. [CR 13]; and (g) failed to notify
appellant of any further shareholders meetings as required under the Tex.
Bus. Orgs. Code. [CR 14]
67
summary judgment motions.
A motion for summary judgment must be analyzed in light of the pleadings
to ensure that it effectively defeats every cause of action raised in the petition.
Yancy v. City of Tyler, 836 S.W.2d 337, 341 (Tex.App.-Tyler 1992, writ denied).
A trial court errs by granting final judgment on causes of action not addressed by
the underlying motion for summary judgment. Pinnacle Data Services, Inc. v.
Gillen, 104 S.W.3d 188, 199 (Tex.App.-Texarkana 2003). Sharpes motion does
not address or properly address:
(1) Appellants breach of fiduciary duty claims as set forth under Section
II-B. [CR 17];
(2) Appellants conspiracy claims as set forth under Section II-C. [CR
20];
(3) Appellants theories of the continuing tort doctrine, discovery rule,
and fraudulent inducement. [CR 19, 529];
(4) Sharpes defenses, including, but not limited to, those of limitations,
waiver, and ratification. [CR 493]
Summary judgment must be reversed and remanded as to unaddressed causes of
action. See Pinnacle Data Services, Inc., 104 S.W.3d at 199.
68
that goes to the crucial element of fiduciary breach. [App. A3.1-A3.2]
Appellants January 27, 2011 motion to compel seeks discovery against
Mr. Sharpe on Interrogatories 14-16 and Request for Admissions (RFA) 42-45,
47-48, and 52-55. [CR 330] On August 8, 2011, Mr. Sharpe filed a response to
that motion. [CR 360]
The requests at issue seek information that goes to
proving the crucial element of fiduciary breach. More specifically:

(1) Interrogatory Requests 14-16 ask Mr. Sharpe to describe what he
did to investigate the various components of appellants shareholder rights
claims in his capacity as appellants attorney. [CR 333]
(2) RFA#s 42-45 ask Mr. Sharpe to admit or deny whether he ever asked
WFFI to pay appellant money on his shareholder rights claims against it.
[CR 333]
(3) RFA#s 47-48 ask Mr. Sharpe to admit or deny whether he assisted
Henry Chang in preparing a response to appellants June 23, 2005 demand
letter; the very demand letter that appellant testifies that Mr. Sharpe
advised him to send. [CR 334]
(4) RFA#s 52-55 ask Mr. Sharpe to admit or deny various facts
concerning the role he played in having appellant removed from WFFIs
board and management after switching sides on the same matters that
appellant previously sought his representation on. [CR 334-35]
Through this written discovery, appellant sought to show (with something more
than circumstantial evidence) that Sharpe breached his fiduciary duties of loyalty,
impartiality, good faith, and/or full disclosure. However, the court denied said
69
discovery based on Sharpes attorney-client privilege objections. [CR 394, 397]

The court erred by sustaining said objections because the facts of this case bring
it within the exceptions to privilege under Tex. R. Evid. 503(d) (1), (3) and/or
(5). [App. B6.5] Appellant sued Sharpe for breach of fiduciary duty which also
involves a component of fraud in his capacity as an intermediary. [CR 15, 18]
Appellant also sued the primary defendants for conspiracy to commit that
fiduciary breach. [CR 20] Thus, appellant is entitled to discover the information
sought because this suit alleges a breach of fiduciary duty claim against Sharpe, a
joint client situation, and/or the use of Sharpe to perpetrate a fraud upon
appellant.
70
IV. On October 23, 2013, the court erred by severing appellants TUFTA
claims against Sharpe from his common law tort claims against Sharpe.
Given the more efficient and convenient option of bifurcation, Sharpe did
not show how he would be prejudiced by denial of his motion to sever.
Further, Sharpe judicially admits that the TUFTA claims against him (as
the debtor) are not independent of the common law tort claims. [App.
A4.1]28
A claim is severable if the controversy involves more than one cause of
action, the severed claim is one that would be the proper subject of a lawsuit if
independently asserted, and the severed claim is not so interwoven with the
remaining action that they involve the same facts and issues. Guar. Fed. Savs.
Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex.1990) (op. on
reh'g). The controlling reasons for a severance are to do justice, avoid prejudice,
and further convenience. Id. If bifurcation is an option, the party moving for
severance has the burden to show how he would be prejudiced by a denial of his
motion. In re Allstate Texas Lloyds, 202 S.W.3d 895, 900 (Tex.App.-Corpus
Christi-Edinburg 2006).
The court erred by granting Sharpes October 2013 motion for severance
because bifurcation was presented as an option and Sharpe never made any
showing of how he would be prejudiced if severance of the TUFTA claims was
denied. [CR 845] In any case, bifurcation could have avoided any perceived
prejudice because the issue of whether Sharpe violated TUFTA could be decided
28
See also Section X, below.
71
after the issue of Sharpes liability for exemplary damages on the common law
tort claims but before the issue of the amount of exemplary damages. In other
words, if the jury increases its award for the amount of exemplary damages
based in any part on the finding of TUFTA violations, then it does so properly
only after also making a finding of liability for exemplary damages on the
common law claims. See Renbolt v. Kern, 2013 Ohio 1359, 2013 WL 1390607
*12 (April 5, 2013); Tex. Bus. & Com. Code 24.008(a)(3)(C) and 24.012.
[App. B1.4, B1.6]
Bifurcating the TUFTA claims would have also furthered convenience
because if the issue of liability on the common law torts is resolved in favor of
Sharpe, then no aspect of the TUFTA claim would ever need to be presented to
the jury. Bifurcation was also the more judicially efficient option because: (i)
Sharpe already requested bifurcation of the issue of the amount of punitive
damages pursuant to Tex. Civ. Prac. & Rem. Code 41.009. [App. B2.2] [CR
478] and (ii) it would avoid the expense of litigating the same factual issues
before two separate juries. See In re State 355 S.W.3d 611, 614 (Tex. 2011).
Appellants TUFTA claims and his common law tort based exemplary
damages claims involve proof of the same financial facts concerning issues of
Sharpes net-worth and solvency. Tex. Civ. Prac. & Rem. Code 41.011(a)
provides that a jury shall consider evidence of a defendants net-worth in
72
determining the amount of exemplary damages. [App. B2.3] Sharpes true networth at the time of trial is inextricably intertwined with any past asset transfers
made by him with the intent either (i) to artificially lower his net-worth in
anticipation of an unfavorable punitive damages award and/or (ii) to generally
hinder, delay or defraud appellants collectability on an anticipated tort judgment.
See Tex. Bus. & Com. Code 24.005(a)(1). [App. B1.2] Over four and a half
years have transpired since suit was filed and its been five years since imminent
litigation was first threatened. [CR 12, 1302-03] Substantial evidence exists to
show that Sharpe began violating TUFTA two days after litigation was first
threatened.29 Also, the TUFTA statute can serve as a mechanism by which to
differentiate between Sharpes fraudulent and non-fraudulent transfers so as to
help ascertain his true current net-worth. See Tex. Bus. & Com. Code 24.005
and 24.006. [App. B1.2-B1.3]
Sharpe judicially admits that appellants TUFTA claims against him (as
the debtor 30) are not independent of his common law claims. On June 17, 2014
the court signed an order disqualifying Amin as trial counsel in the 2010 suit
(Cause No. 48-243228-10). [CR 1622] The very next day, Sharpe filed a motion
in the severed 2013 TUFTA suit (Cause No. 48-268902-13) stating: The effect
29
See Section VII, below.
30
It may have been proper for the court to sever appellants TUFTA claims against Sharpes
transferees as compared to appellants TUFTA claims against Sharpe as the debtor. See
Tex. Bus. & Com. Code 24.008. [App. B1.4]
73
of the Order disqualifying counsel in the 2010 suit from which this cause was
severed out precludes Plaintiffs counsel from further representation in this
suit [1SUPP-CR 8]. Similarly, Sharpe admits that the effect of summary
judgment on the common law tort claims is to render appellants TUFTA claims
moot. Id. Pleadings in other actions which contain statements inconsistent with
the partys present position are receivable as admissions. St. Paul Fire & Marine
Ins. Co. v. Murphree, 357 S.W.2d 744, 747 (Tex. 1962).
On July 25, 2014, the court also erred by denying appellants October 2013
motion and July 2014 supplemental motion to reconsider the TUFTA severance
based on one or more of the arguments explained above. [App. A4.2] [CR 892,
1650]
74
V.
On October 25, 2013, the court erred by abating appellants TUFTA
before seeking TUFTA discovery or relief. [App. A5.0]31
Tort claimants are entitled to file causes of action under TUFTA based
upon pending, unliquidated tort claims and interim injunctive relief is an
available remedy to a fraudulent transfer for which the claimant asserts an
equitable interest. Blackthorne v. Bellush, 61 S.W.3d 439, 443-444 (Tex.App.San Antonio 2001, no pet.)
In Lunsford v. Morris, 746 S.W.2d 471, 473
(Tex.1988) the Court said:

"Our rules of civil procedure and evidence do not require similar practices
[i.e., that a prima facie right to punitive damages be established or
delaying the production until the jury hears evidence sufficient to submit a
punitive damage issue] before net-worth may be discovered. Absent a
privilege or specifically enumerated exemption, our rules permit discovery
of any `relevant' matter; thus there is no evidentiary threshold a litigant
must cross before seeking discovery."
This general standard can be said to also apply in the context of appellants
TUFTA claims. Even if appellant were first required to meet some type of
evidentiary threshold on a TUFTA claim, how could he possibly do so without
first conducting financial discovery? In cases involving non-public corporations,
it is the defendants that typically have sole control and possession of their
financial information. Additionally, a legitimate argument can be made that the
31
See also Section XI, below
75
mere passage of a substantial amount of time since the threat of tort litigation
would be a sufficient basis to plead TUFTA.
Other than to say that appellant could file his TUFTA claims after the
common law tort claims are tried, Sharpes motion to abate offers no legal or
evidentiary basis for abatement and the motion was not verified. [CR 845-48]
Nor was any evidence presented on the record at the abatement hearing. [App.
C1] [RR 1-9] It is reversible error for abatement to be sustained without any
evidence. Brazos Elec. Power Coop. v. Weatherford ISD, 453 S.W.2d 185, 189
(Tex.App.-Fort Worth 1970, writ refd n.r.e).
Also, the motion to abate is
defective because it is not verified. Sparks v. Bolton, 335 S.W.2d 780, 785
(Tex.App.-Dallas 1960, no writ). Finally, abatement deprives appellant of his
right to conduct timely discovery and pursue relief designed to preserve his
equitable interests as a tort victim. See Hansen v. Cramer, 39 Cal. 2d 321, 245
P.2d 1059, 30 A.L.R2d 458 (1968). To abate discovery without justification is an
abuse of discretion. See In Re Van Waters & Rogers, Inc., 62 S.W.3d 197, 200201 (Tex. 2001).
76
VI. On June 24, 2014, the court erred by denying appellants motion to
compel supplemental net-worth discovery responses. Appellant is legally
entitled to know information about Sharpes current net-worth in this
punitive damages case. [App. A6.0]
Appellant sued Sharpe for an intentional breach of his fiduciary duty and
seeks exemplary damages. [CR 22, 652] Appellant is legally entitled to discover
information relating to Sharpes net-worth. Lunsford, 746 S.W.2d at 473. Sharpe
last disclosed his net-worth as of February 25, 2013. [CR 672-77] However,
appellant is legally entitled to know Sharpes current net-worth information as
opposed to last years information. In re Mark A. Jacobs, 300 S.W.3d 35, 45
(Tex.App.-Houston [14 Dist.] 2009).
To date, the court signed two orders
permitting net-worth related discovery. [CR 539, 678].
The court erred in
denying appellants May 27, 2014 motion to compel supplemental discovery

responses under the authority of those orders. Id.
Said discovery is also
permitted under appellants Tex. R. Civ. P. 193.5 motion/request. [App. B4.10]

[CR 1569, 1575]
77
VII. On July 24, 2013, October 15, 2013, and May 6, 2014, the court erred
Appellant is legally entitled to discover the financial information sought
because it relates to appellants TUFTA claims and/or to the issue of
Sharpes net-worth in the context of proving exemplary damages. [App.
A7.1-A7.3]32
Under TUFTA, a plaintiff is entitled to seek information about a
defendants solvency and financial transfers for a time period of at least four
years before the TUFTA claim was filed.
See Tex. Bus. & Com. Code
24.010(a). [App. B1.5] Appellant filed his TUFTA claim on June 25, 2013. [CR
650] Thus, he is entitled to seek financial discovery from Sharpe dating back to
June 25, 2009. Independently of the TUFTA claim, and notwithstanding the
holding in In re Mark A. Jacobs, 300 S.W.3d at 45, appellant argues he is
alternatively entitled to seek financial discovery from Sharpe dating back to the
time when litigation was first threatened (i.e. September of 2009). [CR 1302]
This is because the integrity of Sharpes purported current net-worth is
inextricably intertwined with his past financial maneuvering. 33
The financial discovery received in this case indicates that Mr. Sharpe
engaged in material financial transfers that bring into question the truthfulness of
his proclaimed negative net-worth as of February 25, 2013. [CR 672] Without
proper discovery, however, the purpose of those transfers cannot be determined.
32
33
See also Section XIII, below.

See Section IV, above.
78
If it is determined that those asset transfers were fraudulent, should their adjusted
dollar values not be added back to Sharpes proclaimed current net-worth? For
example, if the following transfers are determined to be fraudulent, then Mr.
Sharpes proclaimed net-worth of -$14,500.00 could no longer be considered
negative:
(i)
Two days after receiving notice that appellant hired Amin to audit
the books of WFFI in aid of legitimate litigation, Mr. Sharpe received an
$89,170.00 distribution from The Law Offices; which he then, on the same
day, immediately withdrew from his personal checking account.34
(ii) One day after acknowledging receipt of a draft copy of the original
petition naming Sharpe as a defendant in this suit, Mr. Sharpe transferred a
lump sum of $32,000.00 out of his personal checking account. [CR 906,
904]
(iii) Exactly one week before the October 22, 2012 trial setting, Mr.
Sharpe transferred the lump sum of $36,006.00 out of his personal
checking account. [CR 906, 904]
There is also substantial evidence showing that Sharpe failed to comply with the
July 24, 2013 discovery order. [CR 678] That order required Sharpe to produce:
(1) financial statements delivered to third parties for the time period since 1/1/09,
(2) any other financial statements since 1/1/09, and (3) bank statements and
brokerage accounts since 1/1/09; if items (1) and (2) were not available. Id.
34
Proof of this information is found in Sharpes Bates numbered documents 000052 and
000276. However, the intent behind an October 22, 2013 protective order appears to
preclude the filing of such documents with any court. Please see Section VIII, below. [This
same issue also pertains to the transfers described under (ii) and (iii), which are proven here
indirectly.]
79
After receiving select financial information from Sharpe, on September 5,

2013, appellant filed a supplemental motion to compel 35 discovery pursuant to
the July 24th order. [CR 687] On September 18, 2013 Sharpe filed a response and
stated under oath:
(i) that Neither I nor the firm has any brokerage statements for the period
January 1, 2009, to the present.; [CR 794]
(ii) that he and The Law Offices have no balance sheet statements for the
time period since 1/1/09; Id. and
(iii) that he has requested OmniAmerican Bank to provide the ordered
statements. Id.
It appears that Mr. Sharpe was less than honest when he said that he did not have
any brokerage statements. Upon review of the select OminAmerican statements
Mr. Sharpe produced, appellant discovered the existence of brokerage accounts at
Mass Mutual Financial, Ram Debit Daily, and Royal Bank of Canada for which
no statements were produced. [CR 902-07] Also, Mr. Sharpe has four other
accounts at OmniAmerican for which he never produced any statements. Id.
Sharpe has a duty to produce these documents under the July 24th order and the
court erred by denying supplemental production under the authority of that order
or otherwise. [CR 1624]
In light of the foregoing facts and appellants TUFTA and exemplary
35
Alternatively referenced as, for example, appellants motion for reconsideration of the trial
courts July 24, 2013 order; or his motion for order permitting additional discovery. [CR 687]
80
damage claims, appellant is also entitled to receive proper discovery responses to

his third set of discovery requests identified below.
Appellant may obtain
discovery regarding any matter that is not privileged and is relevant to the subject
matter of the pending action. Tex. R. Civ. P. 192.3. [App. B4.9] Appellant argues
that he is entitled to sufficient financial information that would allow him to: (i)
know the amount of Sharpes net-worth as a current date certain, (ii) verify,
through financial records, the accuracy of Sharpes purported net-worth
declaration/calculation, and (iii) identify any fraudulent transfers made since
September of 2009.
Because the discovery requests identified below are limited in scope to
seeking this type of information, the court erred in denying appellants motion to
compel. The general rule in financial records production cases is that the burden
on the discovery of financial records lies with the party seeking to prevent
production. Peeples v. Honorable Fourth Supreme Judicial Dist., 701 S.W.2d
635, 637 (Tex.1985) (orig. proceeding); Kern v. Gleason, 840 S.W.2d 730, 73537 (Tex.App.-Amarillo 1992, orig. proceeding) (applying the general rule to
production of financial records). The purpose of discovery is to seek the truth so
that disputes may be decided by what the facts reveal, not by what facts are
concealed. In re Colonial Pipeline Co., 968 S.W.2d 938, 941 (Tex.1998).
INTERROGATORY 3: List, identify and describe with sufficient detail
all assets, real property, and personal property owned by you, that are in
81
your name, and/or that are held in trust for you. Include in your response
all assets that you own whether they are in the United States, overseas, or
elsewhere. For each such asset identified state:
(a) the full address information of where that asset is located;
(b) the name and contact information of the person who has possession or
control of such asset;
(c) the amount of outstanding and currently unpaid debt or liability
associated with such asset;
(d) the name and contact information of the lender and/or creditor who
loaned money in association with that asset;
(e) the current fair market value of such asset; and
(f) the current net-worth of that asset.
INTERROGATORY 4: List, identify and describe with sufficient detail
each debt or liability owed by you or that is in your name that you have not
already identified in response to an interrogatory above. For each such
liability or debt identified, state the amount of the liability and the name,
address and contact information of the lender or creditor involved.
REQUEST FOR PRODUCTION 3: Produce the most recent loan or credit
application submitted by you to any third party.
REQUEST FOR PRODUCTION 5: Produce true and correct copies of
your filed federal income tax returns for tax years 2009, 2010, 2011, and
2012. 36
REQUEST FOR PRODUCTION 6: Produce all documents that would
show the nature and amount of your current liabilities and / or debts owed
by you.
36
Since Sharpe admits that he has no financial statements (i.e. balance sheets) accurately
revealing his net-worth, income tax returns have now become relevant because the
information sought cannot be obtained through another source. See In re Williams, 328
S.W.3d 103, 116 (Tex.App.-Corpus Christi 2010);
82
REQUEST FOR PRODUCTION 7: Produce any and all documents that

would help plaintiff identify each asset owned by you, that is in your name,
and/or that is held in trust for you.
REQUEST FOR PRODUCTION 8: Produce any and all documents
showing your closing, transfer, sale liquidation and/or disposition of any
bank accounts, brokerage accounts, savings accounts, checking accounts,
money market accounts, and/or other such financial accounts since
January 1, 2010.37
REQUEST FOR PRODUCTION 9: Produce any and all documents
showing your sale, transfer, liquidation and/or disposition of any asset
having a fair market value in excess of $2,000 since January 1, 2010.
REQUEST FOR PRODUCTION 10: Produce any and all documents that
would help plaintiff identify the change in your true net-worth since
January 1, 2010.
REQUEST FOR PRODUCTION 11: Produce true and correct copies of
the most recent version of any and all TD F 90-22.1 forms filed by you or
any other papers that you filed with the United States Department of
Treasury whereby you report your ownership interest in foreign bank
accounts and financial accounts.
Thus, the court erred by denying appellants June 12, 2013 and September 5,
2013 motions. [CR 610, 687]
37
In a case where a plaintiff has alleged fraudulent transfers he is entitled to discovery broad
enough to trace the moving of such assets at least between the date of the original petition
and the present. See In re Williams, 328 S.W.3d at 118-120;
83
which constitute court records. [App. A8.0]
On October 14, 2013, Sharpe moved for a protective order precluding
appellant from filing with the court financial records Sharpe produced under
discovery. [CR 825] Appellant objected on multiple grounds, including [CR 863]:
(i) that such unfiled discovery materials constitute court records under
Tex. R. Civ. P. 76a [App. B4.1] as it may apply in conjunction with Tex. R.
Civ. P. 166a(d) [App. B4.6], Tex. R. Civ. P. 215.6 [App. B4.11], and/or Tex.
R. App. P. 13.1(a)-(c) [App. B3.3-B3.4] in the context and course of proving
appellants TUFTA and exemplary damage claims; [CR 863-65]
(ii) that the court failed to make a threshold determination on the issue of
court records; [CR 864]
(iii) that the protective order was an attempt to circumvent Rule 76a; Id. and
(iv) that appellants inability to file the subject court records makes it so
that an appellate court is unable to evaluate the effect of the trial courts
error. [CR 863]
See General Tire, Inc., 970 S.W.2d at 525 and Walker, 827 S.W.2d at 843-844.
On October 22, 2013, the court granted Sharpe a protective order. [CR 885] The
court erred in not requiring Sharpe to comply with Rule 76as record sealing
procedures with respect to his financial documents. Alternatively, the court erred
in not employing a less restrictive means than a blanket protective order
prohibiting the filing of these court records. See Tex. R. Civ. Proc. 76a (1)(b).
[App. B4.2] For example, if Sharpe desired to protect any sensitive data such as
financial account numbers, the court could have ordered proper, limited pre84
production redaction. See Tex. R. App. P. 9.9(a)-(b). [App. B3.1-B3.2] There are
no constitutional rights of privacy affected by disclosure of banking records or in
personal financial records. In re Williams, 328 S.W.3d at 119.
85
summary judgment. [App. A9.0]
summary judgment. [2SUPP-CR 42, 47]. See Roark v. Stallworth Oil and
Gas, Inc., 813 S.W.2d. 492, 495 (Tex. 1991).
The Changs moved for
judgment on:
(1) a statutory claim of vicarious liability under Tex. Bus. Orgs. Code 21.223.
[App. B1.8] [2SUPP-CR 38-39];
(2) the alter ego theory of liability. Id;
(3) the piercing of WFFIs corporate veil theory of liability. Id;
(4) a breach of a personal guarantee claim. Id;
(5) a breach of the January 2, 1990 stockholder Buy & Sell Agreement as a basis
for restitution for the purchase price of appellants stock. [2SUPP-CR 37]38;
(6) claims of civil conspiracy and aiding & abetting as theories of vicarious
liability. [2SUPP-CR 37-38];
Appellant did not plead any such claims or theories of liability in his petitions.
[CR 12, 1598] The court erred by granting judgment on them because appellant
objected to and did not consent to the trying of the same through summary
judgment. [2SUPP-CR 42, 47]
38
Appellant is entitled to an equitable buy-out remedy even though an express buy-sell

stockholder agreement may exist, as in this case. See Ritchie, No. 11-0447 at * 36 n. 43
(Tex. June 20, 2014).
86

Changs summary judgment motion.
(1)
Appellant moved the court to take judicial notice of pertinent adjudicative
facts pursuant to Tex. R. Evid. 201. The court erred by declining to take notice
as requested because the judicial notice statute is mandatory in nature when the
party requesting notice has complied with the terms of the statute; as appellant
did in this case. [App. B6.3] [2SUPP-CR 42, 49-53]
(2)
Appellant objected to the defects in the form and substance of the Changs
motion. [2SUPP-CR 46-49] The court erred in overruling his objections because
the Changs motion makes or is based on multiple erroneous, false, and/or
unsubstantiated assertions, conclusions or implications. [2SUPP-CR 36, 46-49,
1682, 1688, 388]
(3)
Notwithstanding whether an objection was lodged, for purposes of
summary judgment, the court erred by considering evidence that contradicts any
admissions favorably supporting appellants claims or defenses. See Marshall v.
Vise, 767 S.W.2d 699, 700 (Tex.1989); Beasley v. Burns, 7 S.W.3d 768, 770-71
(Tex.App.-Texarkana 1999, pet. denied.). Appellant objected to the Changs
attempts in this regard. [2SUPP-CR 48-49] With respect to admissions, the court
also erred for the same reasons as expressed under Section II-E (5) of this brief.
87
their no-evidence motion is (a) legally insufficient with respect to any claims
or defenses where they failed to state the specific challenged element as to
which there is no evidence and (b) improper with respect to any defensive
elements where they have the burden of proof at trial.
A no-evidence challenge that only generally challenges the sufficiency of
the non-movant's case and fails to state specific elements as to which there is no
evidence is fundamentally defective and insufficient to support summary
judgment as a matter of law. Mott v. Red's Safe and Lock Services, Inc., 249
S.W.3d 90, 97-98 (Tex.App.-Houston [1 Dist.] 2007, no pet.). Courts decline to
extend a fair notice exception to this requirement. Id. Further, a no-evidence
motion is only appropriate with respect to an essential element of a claim or
defense on which the non-movant would have the burden of proof at trial. Tex. R.
Civ. P. 166a(i). [App. B4.8-B4.85]
(1)
On the defense of limitations: Under Sections III (E) and (F) of their
motion, the Changs sought judgment under Tex. Civ. Prac. & Rem. Code
16.004(a) which states that a person must bring a breach of fiduciary duty, fraud,
and/or a debt suit not later than four years after the day the cause of action accrues.
[App. B2.1] [2SUPP-CR 38-39] A defendant moving for summary judgment on
the affirmative defense of limitations has the burden to conclusively establish that
defense; including proving when the cause of action accrued. KPMG Peat
Marwick v. Harrison County Housing Finance Corp., 988 S.W.2d 746, 748 (Tex.
88
1999). Since the Changs have the burden to prove limitations generally and also
its element of accrual, the court erred in rendering judgment based on any statute
of limitations challenges made through a no-evidence motion. Tex. R. Civ. P.
166a(i). [App. B4.8] Similarly, the court erred in granting judgment on any other
defensive theories where the Changs would have the burden of proof at trial (e.g.
affirmative defenses such as waiver). Cal-Tex Lumber Co., Inc. v. Owens Handle
Co., Inc., 989 S.W.2d 802, 812 (Tex.App.-Tyler, 1999, no pet.).
Further, appellant pled the continuing tort doctrine as a basis for determining
the accrual date. [CR 16-20] This doctrine is an exception to the legal injury rule
and if a defendant commits a continuing tort, the action accrues when the tortious
conduct ceases. First General Realty Corp. v. Maryland Cas. Co., 981 S.W.2d
495, 501 (Tex.App.-Austin 1998, no pet.).
Appellant also pled fraudulent
concealment and the discovery rule as theories to defer the accrual date. [CR 21,
1598] See S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). The Changs motion is
defective in that it presents no evidence conclusively showing that appellants
claims against them accrued outside the limitations period. [2SUPP-CR 36-41]
(2)
On the continuing tort doctrine: Appellant alleged the continuing tort
doctrine as a common law method for determining the accrual date. [CR 16-20] A
continuing tort requires a showing of (i) repeated injury (ii) proximately caused by
repetitive wrongful acts. Krohn v. Marcus Cable Associates, L.P., 201 S.W.3d 876,
89
880 (Tex.App.-Waco 2006). The Changs motion wholly fails to specify which, if
any, elements of this doctrine they are making a no-evidence challenge on. In fact,
their motion makes no mention of the continuing tort doctrine and thus is defective
as to this theory. [2SUPP-CR 36-41]
In any case, more than a scintilla of evidence shows that one of the Changs
participatory tortious acts occurred after suit was filed and thus was within the
limitations period. This is because they, individually and as officers of WFFI,
hired Sharpe as their defense counsel in this suit on March 8, 2010. [2SUPP-CR
212-13] This was done in the face of a known conflict of interest and in
furtherance of Sharpes breach of his fiduciary duties to appellant. At the time the
primary defendants formally hired Sharpe for this suit, they had been served with a
copy of plaintiffs original petition alleging conflict of interest violations.39 [CR
12] See Tex. Disciplinary R. Prof. Conduct 1.09 and Comment 4A thereto. [App.
B5.4]
(3)
Vicarious liability vs. participatory liability:
Appellant sued the
Changs for participatory liability claims of aiding and abetting and conspiracy
to commit a breach of fiduciary duty tort in their capacity as officers and
directors of WFFI. [CR 16-17, 19-20] The Changs moved for judgment on
39
See Sections IX-I-L, below; Sections II-B- 2.1, -2.1(g)(v)(j), -2.2, above; and Sections IIC-2.1, -3.1,- 4.0, above.
90
theories of vicarious liability in their capacity as shareholders of WFFI. [2SUPPCR 38-39] The Changs fail to state which elements of appellants participatory
liability claims they are making a no-evidence challenge on and thus their motion
is defective as to those claims. [2SUPP-CR 36-41]
91

as a minority shareholder. [2SUPP-CR 144-45, 330, 153, 396-98, 441] The
Texas Supreme Court has not foreclosed the existence of such a duty and
several other Texas courts have specifically recognized it.
In Willis v. Donnelly, 199 S.W.3d 262, 277 (Tex. 2006) the Court stated:
The only conceivable basis for a fiduciary relationship in this case would
be a duty owed by a majority shareholder to a minority shareholder.
Assuming without deciding that such a relationship can give rise to a
general fiduciary duty, we decline to recognize the existence of such a duty
on this record. Donnelly never actually became a shareholder of URH or
WHE, and indeed his contract claim is based on the alleged failure of
these corporations and the Willises to convey stock owed to him under the
letter agreement.
The existence of or possible existence of such a duty is supported by the holdings
in other Texas Supreme Court cases. See Patton v. Nicholas, 279 S.W.2d 848,
852-854 (Tex. 1955); Yeaman v. Galveston City Co., 167 S.W. 710, 723-24 (Tex.
1914); Ritchie, No. 11-0447 at *25, n.27. Several other Texas courts in fact have
recognized a fiduciary duty running between majority and minority shareholders
precisely because of the controlling position of the majority shareholder over the
minority shareholder.
See Hoggett v. Brown, 971 S.W.2d 472, 488 n. 13
(Tex.App.-Houston [14th Dist.] 1997, no pet.) citing Patton v. Nicholas, 279

S.W.2d 848 (Tex. 1955); Davis v. Sheerin, 754 S.W.2d 375 (Tex.App.-Houston
[1st Dist.] 1988, writ denied) (court ordered buy-out of minority shareholder
where majority shareholder engaged in oppressive conduct); Duncan v.
Lichtenberger, 671 S.W.2d 948 (Tex.App.-Fort Worth 1984, writ ref'd n.r.e.)
92
(minority shareholders entitled to reimbursement of monetary contribution to

corporation
where
majority
shareholder
completely
excluded
minority
shareholders from management of business); Thompson v. Hambrick, 508

S.W.2d 949 (Tex.Civ.App.-Dallas 1974, writ ref'd n.r.e.) (fact issue existed as to
whether majority shareholders wrongfully obtained premium for selling control
of the corporation); Morrison v. St. Anthony Hotel, 295 S.W.2d 246
(Tex.Civ.App.-San Antonio 1956, writ ref'd n.r.e.) (former minority shareholder
entitled to sue majority shareholder for malicious suppression of dividends);
Redmon v. Griffith, 202 S.W.3d 225, 237 (Tex.App-Tyler 2006, pet. denied) (the
court holds that a fiduciary duty exists between majority and minority
shareholders on the facts of that case merely because the majority shareholder
exercises a great deal of control over the business.); Riebe v. Nat'l Loan
Investors, L.P., 828 F. Supp. 453, 456 (N.D. Tex. 1993) (Texas law) (It is clear
that under Texas law a majority shareholder owes a certain fiduciary duty to
minority shareholders.); DeBord v. Circle Y of Yoakum, Inc., 951 S.W.2d 127,
132 (Tex.App.-Corpus Christi 1997), rev'd on other grounds sub nom. Stary v.
DeBord, 967 S.W.2d 352 (Tex. 1998) (Majority shareholders are sometimes
said to stand in a fiduciary relationship both with the corporation which they
control and with the minority shareholders. Pepper v. Litton, 308 U.S. 295, 30607, 60 S.Ct. 238, 245, 84 L.Ed. 281 (1939). This is especially true when the
93
corporation is closely held by a small number of shareholders who operate more

as partners than in strict compliance with the corporate form. In such a situation,
it may be proper for the shareholders to bring an individual action even though,
technically, the cause of action may rest with the corporation. 19 AM.JUR.2D
Corporations 2246 (1986). Consequently, claims of oppressive conduct arising
out of the fiduciary duties owed by the majority shareholders to the minority
shareholders are, in our opinion, individual claims of the minority
shareholders.); Thywissen v. Cron, 781 S.W.2d 682,685 (Tex.App.-Houston [1st
Dist.] 1989, writ denied) (the trial court did not err in deciding, as a matter of
law, that Thywissen, as the majority shareholder and chief executive officer of
Flexbin, had the fiduciary obligation to deal fairly with Cron in connection with
the right of first refusal, and with the profits resulting from the exercise of that
right.); A. Copeland Enters. Inc. v. Guste, 706 F. Supp. 1283, 1291 (W.D. Tex.
1989) ([a] director is a fiduciary. So is a dominant or controlling stockholder or
group of stockholders. Their powers are powers of trust. Their dealings with the
corporation are subjected to rigorous scrutiny and where any of their contracts or
engagements with the corporation is challenged the burden is on the director or
stockholder not only to prove the good faith of the transaction but also to show its
inherent fairness from the viewpoint of the corporation and those interested
therein.).
94
IX-E. The court erred in granting the Changs summary judgment based on
21.223 and 21.224 of the Tex. Bus. Orgs. Code because those sections do
not foreclose the Changs liability for conduct committed in their capacity as
the officers and directors of WFFI; as compared to their capacity as
shareholders of WFFI. [2SUPP-CR 38]
Sections 21.223 and 21.224 of the Tex. Bus. Orgs. Code are designed to
protect the Changs from contractual obligations of WFFI based on alter-ego
doctrine type theories and only in their capacity as shareholders of WFFI. [App.
B1.8-B1.9] They do not protect the Changs from liability in their capacity as
directors of WFFI; even if the Changs were also simultaneously shareholders of
WFFI. See Ritchie v. Rupe, No. 11-0447 at *16, n. 12 (Tex. June 20, 2014). In
Ritchie, the Court held that persons managing the corporation act in the capacity
of directors and are treated as directors under the Code. Id. Also, 1.002 of the
Code distinguishes between shareholders and director and the legislature did
not opt to extend 21.223 and 21.224s protections to directors as such. [App.
B1.7-1.9]
95
have Sharpe ordered permanently withdrawn from defending them in this
suit. More than a scintilla of evidence shows that the Changs knowingly
participated in Sharpes breach of his fiduciary duty not to switch sides on
the same matter.
Appellant is entitled to recover his attorneys fees in equity against a
lawyer for the lawyers misconduct that causes the appellant to be involved in a
separate or non-separate first suit. See Estate of Arlitt v. Paterson, 995 S.W.2d
713, 717 (Tex.App.-San Antonio, pet. denied); Baja Energy, Inc. v. Ball, 669
S.W.2d 836, 837-38 (Tex.App.-Eastland 1984, no writ). Appellant sued Sharpe
in the second suit alleging that Sharpe breached his fiduciary duties to
appellant by switching sides on the same matter in violation of Tex. Disciplinary
R. Prof. Conduct 1.09. [App. B5.4] [CR 15] Appellant sued the Changs for
participating in that breach. [CR 19-20] Appellant incurred attorneys fees in the
first suit to disqualify Sharpe from continuing to represent the primary
defendants in that suit. [2SUPP-CR 113, 124] The Changs would be jointly and
severally liable with Sharpe for those fee if they knowingly participated with
Sharpe in his fiduciary breach. Kinzbach Tool Co. v. Corbett-Wallace Corp., 160
S.W.2d 509, 51214 (Tex. 1942). More than a scintilla of evidence shows that
Sharpe breached his fiduciary duty not to switch sides on the same matter by
96
defending the primary defendants in the first suit.40 More than a scintilla of
evidence also shows that the Changs knowingly participated in Sharpes breach.
After being served with the appellants original petition [that specifically alleged
conflict of interest violations] both the Changs [in their individual capacity and as
officers of WFFI] still hired Sharpe to defend them and WFFI in the first suit.
[CR 13-19, 1SUPP-CR 4] This also happened by formal agreement on March 8,
2010. 41 [2SUPP-CR 212-13]
Thus, the court erred in granting the Changs
summary judgment on appellants claims that they are jointly and severally liable
with Sharpe for attorneys fees appellant incurred to have Sharpe ordered
permanently withdrawn. [2SUPP-CR 367]
40
41
See Sections II-B-2.2, -2.4.

See Sections IX-C(2), above and IX-I-L, below.
97
through their knowing participation in Sharpes fiduciary breach.
Appellant alleges that Sharpe breached fiduciary duties owed him by
unlawfully switching sides on the same matter, conducting a fraudulent
intermediation, failing to timely withdraw as counsel in this suit, and/or by
misusing confidential information appellant disclosed during the October 2004
preliminary consultation.42 [CR 15-19]
Appellant further alleges that, as a
proximate result of Sharpes conduct, (1) there was an undue delay in the timely
prosecution, resolution and payment of his shareholder rights claims, and (2)
appellant received less money on these claims (i.e. zero dollars) than if Sharpe
had not acted wrongfully. 43 [CR 1601] If Sharpe is found liable to the appellant
for receiving nothing on his dividend claims, breach of employment contract
claims, and forced buyout of his shares claims, then WFFI, and thus the Changs,
can be held jointly and severally liable with Sharpe for damages emanating from
these claims if they knowingly participated in Sharpes fiduciary breach.
Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 51214 (Tex.
1942); K & G Tool & Serv. Co. v. G & G Fishing Tool Serv., 314 S.W.2d 782,
793 (Tex.1958) (An officer or any other agent of a corporation may be
42
43
See also Section II-B, above.

See also Sections II-B-3.1; II-C-5.1, -5.2, above.
98
personally as responsible as the corporation itself for tortious acts when

participating in the wrongdoing.) Cotten v. Weatherford Bancshares, Inc., 187
S.W.3d 687, 701 (Tex.App.-Fort Worth 2006 pet. denied);
For example, more than a scintilla of evidence shows that Sharpe breached
his fiduciary duties to appellant by switching sides on the same matter in
violation of Tex. Disciplinary R. Prof. Conduct 1.09.44 [App. B5.4] More than a
scintilla of evidence also shows that WFFI participated in Sharpes unlawful
switching of sides in June of 2005 because WFFI admits that it hired away
Sharpe after appellant had sought legal advice from Sharpe and revealed
confidences to him with regards to potential claims appellant had against the
primary defendants. [CR 13, 532, 2SUPP-CR 380-382]; Holt v. Heine, 835
S.W.2d 80, 83 (Tex. 1992). More than a scintilla of evidence also shows that the
Changs, as the officers and directors of WFFI, directed or participated in this
decision by WFFI because:
(1) Henry Chang has been the president of WFFI and been on its board of
directors since its inception; [2SUPP-CR 143, 257, 329-30]
(2) Karen Chang has been an officer in and on the board of directors of WFFI
since its inception; [2SUPP-CR 155, 260, 329-30]
(3) The Changs signed all the payroll checks; [2SUPP-CR 272]
44
See Sections II-B-2.2, above.
99
(4) The Changs admit to being majority shareholders of WFFI with Mu. [2SUPPCR 153, 330]
(5) WFFI has only had the following five directors on its board since its
inception: Henry and Karen Chang, Mr. and Mrs. Mu, and the appellant.
[2SUPP-CR 145, 156]
(6) WFFIs bylaws require the presence of at least four directors to transact
business. [2SUPP-CR 132-33]
(7) WFFIs bylaws require at least three out of the four quorum directors to vote
in favor of the resolution for it to pass. [2SUPP-CR 132-33]
(8) Sharpe admits that he began defending WFFI on the same claims that are the
subject of this suit on June 23, 2005. [2SUPP-CR 323, 153]
(9) Appellant could not have [and would not have] participated in a vote to allow
Sharpe to be hired away by his opponent(s) on the same matters that he sought
Sharpes representation and advice on. This is because more than a scintilla of
evidence shows that the hiring away was done secretly; without appellants
knowledge. 45
(10) Henry Chang, as president of WFFI, hired Sharpe to defend WFFI against
appellants shareholder rights claims as early as June 23, 2005. [2SUPP-CR 323,
153]
(11) WFFI admits to removing appellant from the board on August 13, 2005;
[2SUPP-CR 156]
(12) Sharpe assisted WFFI in unlawfully46 removing appellant from its board of
directors. [2SUPP-CR 140, 156]
In other words, at least one of the Chang directors had to vote in favor of WFFIs
unlawful hiring away of Sharpe for that resolution to be valid. Since the Changs
are husband and wife, a reasonable inference can be drawn that they both in fact
45
46
See Sections II-B-2.1, -2.2.

See Section IX-I-M, below.
100
may have voted in favor of such a resolution. This can also be inferred from the
fact that they both voted in favor of unlawfully removing appellant from the
board. [2SUPP-CR 140, 154, 156] Thus, the court erred in finding that the
Changs could not, as a matter of law, be jointly and severally liable for the same
damages and remedies that Sharpe is liable to appellant for; including those for
breach of WFFIs employment contract.
101
stock ownership can constitute a fiduciary breach.
First, the court erred by entertaining the Changs argument that they are
not liable in their individual capacity for WFFIs contractual breach because the
Changs never filed verified pleas to this effect as required by Tex. R. Civ. P. 93
and appellant objected to such failure. [App. B4.25] [2SUPP-CR 4, 26-29, 395,
398]
Second, appellants claim that WFFI maliciously suppressed, converted,
diverted or otherwise failed to timely pay him his dividends is a fiduciary breach
claim sounding in tort for which he is entitled to actual and exemplary damages.
[CR 13-15] See Patton v. Nicholas, 279 S.W.2d 848, 852-854 (Tex. 1955);
Yeaman v. Galveston City Co., 167 S.W. 710, 723-24 (Tex. 1914); Ritchie v.
Rupe, No. 11-0447 at *41-42 (Tex. June 20, 2014); Comm. on Pattern Jury
Charges, State Bar of Tex., Texas Pattern Jury Charges: Business Consumer
Insurance & Employment PJC 115.15 (2010); Manges v. Guerra, 673 S.W.2d
180, 184 (Tex. 1984); Winkle Chevy-Olds-Pontiac, Inc. v. Condon, 830 S.W.2d
740, 746 (Tex.App.-Corpus Christi 1992 writ dismissed);
Third, under this
fiduciary breach claim, appellant is also entitled to an equitable remedy of a

court-ordered buy-out of his shares. See Ritchie v. Rupe, No. 11-0447 at *54
(Tex. June 20, 2014); Comm. on Pattern Jury Charges, State Bar of Tex., Texas
102
Pattern Jury Charges: Business Consumer Insurance & Employment PJC 115.15
(2010); Davis v. Sheerin, 754 S.W.2d 375, 382 (Tex.App.-Houston [1 Dist.]
1988). Under Texas law, this buy-out remedy is available off the contract, even
if a shareholder buy-sell agreement exists. See Ritchie v. Rupe, No. 11-0447 at
*36, n. 43 (Tex. June 20, 2014). Additionally, the buy-out remedy is available
under 21.563(c)(2) of the Tex. Bus. Orgs. Code as discussed in the next
paragraph. [App. B1.11]
In Ritchie v. Rupe, No. 11-0447 at *42, n. 53 (Tex. June 20, 2014), the
Court states: Refusal to pay dividends, paying majority shareholders outside the
dividend process, and making fire-sale offers certainly can harm the corporation,
for instance, by lowering the value of its stock. A diminution in the value of
stock is a loss that is sustained by all the shareholders and thus subject to the
derivative fiduciary action requirement. Ritchie, No. 11-0447, at *46. However,
in the closely held corporation context, even when that loss is recovered, [a]ny
recovery from a derivative proceeding goes to the corporation and thus would be
under the control of the alleged wrongdoers. Durham v. Durham, 871 A.2d 41,
46 (N.H. 2005).
Practically speaking then, an injured shareholder would
ultimately have to sell her shares to participate in the recovery. Since there
typically is no ready market for the shares of a closely-held corporation, an
injured shareholders ability to sell those shares [and realize her investment] may
103
be contingent upon the approval of her co-owners. See Jason M. Tanguay,

Minority Shareholders and Direct Suits in Closely-held Corporations Where
Derivative Suits Are Impractical: Durham v. Durham, 5 Pierce Law Review 469,
487-89 (2007). Under such circumstances, a forced buy-out may be the only way
to adequately compensate a minority shareholder. See Id. at 484. Texas law
provides that, [i]f justice requires a corporate recovery from either a direct or
derivative proceeding may be ordered paid directly to the plaintiff. See Tex.
Bus. Orgs. Code 21.563(c)(2). [App. B1.11] At least implicitly, this means that
a derivative corporate recovery could legitimately be ordered converted to a
direct one through the buy-out process. [2SUPP-CR 399]
Since the Changs can be held liable for participating in WFFIs fiduciary
breach or be held liable under a direct 47 or derivative fiduciary breach claim with
respect to WFFIs refusal to pay appellant his dividends, the court erred in
finding, as a matter of law, that the appellants dividend claims are only breach of
contract claims for which the Changs have no liability. See Kinzbach Tool Co. v.
Corbett-Wallace Corp., 160 S.W.2d 509, 51214 (Tex. 1942); Ritchie, No. 110447, at *39. For the reasons stated above, the court also erred in finding, as a
matter of law, that appellant could only pursue an equitable buy-out remedy
under a breach of contract theory.
47
See Section IX-D, above.
104
The court also erred in finding, as a matter of law, that the denial of
employment to a minority shareholder or a breach of her employment contract
could not constitute a fiduciary breach under any circumstances. 48 See Willis v.
Bydalek, 997 S.W.2d 798 802-803 (Tex.App.-Houston [1st Dist.] 1999, pet.
denied). Some breach of contract cases might also qualify for action as torts.
See Willis v. Donnelly, 118 S.W.3d 10 (Tex.App.-Houston [14th Dist.] 2003),
revd 199 S.W.3d 262 (Tex. 2006); Southwestern Bell Tel. v. Delanney, 809
S.W.2d 493, 494 n.1 (Tex. 1991) ([S]ome contracts involve special relationships
that may give rise to duties enforceable as torts.). Farah v. Mafrige &
Kormanik, P.C. 927 S.W.2d 663, 674 (Tex.App.- Houston [1st Dist.] 1996, no
writ) (A plaintiff is not precluded from asserting a tort cause of action solely
because his damages are analogous to damages sought in a contractual claim).
Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 418 (Tex. 2011)
(Noting that pure economic loss is recoverable in a breach of fiduciary duty tort
claim.) Dallas Fire Insurance Co. v. Texas Contractors Surety, 128 S.W.3d 279,
293 (Tex.App.-Fort Worth 2004) (when a defendants conduct would give
rise to liability independently of whether a contract exists between the parties, a
plaintiffs claim may sound in tort.
48
See also W & W Equipment Co., Inc. v. Mink, 568 N.E.2d 564, 574-75 (Ind.App. 1 Dist.
1991) citing Wilkes v. Springside Nursing Home, Inc., 353 N.E.2d 657, 662 (Mass. 1976).
105
Appellant owns approximately 22% of WFFIs shares. [2SUPP-CR 14445] He testified that his right to secure continued employment was a central
reason for investing $60,000 to purchase the shares of WFFI. [2SUPP-CR 124]
Courts have protected a minority shareholders expectations concerning the rights
and interests that are incident to stock ownership. See Yeaman v. Galveston City
Co., 167 S.W. 710, 723 (Tex. 1914); Patton v. Nicholas, 279 S.W.2d 848, 854
(Tex. 1955); Davis v. Sheerin, 754 S.W.2d 375, 381 (Tex.App.-Houston [1st
Dist.] 1988, writ denied). Here, WFFI admits that it had an employment contract
with appellant that allowed him to be employed by WFFI so long as he owned
WFFI stock. [CR 15, 532, 2SUPP-CR 380-82] Appellant also testified to this
same fact. [2SUPP-CR 109]
Some Texas courts have recognized a minority shareholders expectations
of continued employment as being objectively reasonable when there is an
employment contract in place. See Willis v. Bydalek, 997 S.W.2d 798, 803
(Tex.App.-Houston [1st Dist.] 1999, no writ). Here, appellant testified that he had
such an employment contract which was breached. [2SUPP-CR 109, 124] WFFI
also admits that it breached its fiduciary duty to appellant by wrongfully
terminating him. [CR 14-15, 532, 2SUPP-CR 380-82]
More than a scintilla of
evidence shows that Karen Chang knowingly participated in WFFIs breach

because appellant testifies that she is the one that told him not to return to the
106
restaurant on September 12, 2004. [2SUPP-CR 109] Considering that she and
Ms. Mu were the ones that assaulted appellant, Ms. Chang should have
terminated herself and Ms. Mu also. [2SUPP-CR 115] Then, there would not
have been disparate treatment between her, Ms. Mu and the appellant, all of
whom were shareholders in WFFI. 49 Arguably, under these circumstances, the
firing of a minority shareholder/employee may be construed as an act of fiduciary
breach by the controlling directors/ majority shareholders. See Ritchie v. Rupe,
339 S.W.3d 275, 290 (Tex. App.Dallas 2011, pet. granted) (court held that,
despite the lack of a single majority shareholder, three shareholders who acted in
concert and controlled 73.7% of a corporation's voting stock committed
shareholder oppression); Duncan v. Lichtenberger, 671 S.W.2d 948, 950-53
(Tex.App-Fort Worth 1984, writ refd n.r.e) (the court permits minority
shareholders to recover their capital contribution under similar circumstances).
Here, it is important to note that the Ritchie Court does not address a situation
where the minority shareholders employment rights are tied to and contingent
upon his continued ownership of his employers stock. See Ritchie, No. 11-0447
at *42-44. For the foregoing reasons, the court erred in finding that WFFIs
termination of appellants employment could not constitute a fiduciary breach, as
a matter of law.
49
See Restatement (Second) of Trusts at 183 (When there are two or more beneficiaries of
a trust, the trustee is under a duty to deal impartially with them).
107
more than a scintilla of evidence as to all challenged elements. Neely v.
Wilson, 418 S.W.3d 52, 59-60 (Tex. 2013); Notes and Comments to Tex. R.
Civ. P. 166a(i). [App. B4.8-B4.85]
A.
The Texas Supreme Court has clearly held that an officer of a corporation
may be personally as responsible as the corporation itself for tortious acts when he
directs or participates in the wrongdoing. See K & G Tool & Serv. Co. v. G & G
Fishing Tool Serv., 314 S.W.2d 782, 793 (Tex.1958); Leyendecker & Assocs., Inc.
v. Wechter, 683 S.W.2d 369, 375 (Tex.1984). Participation is found to exist where
an officer instigates, aids, or abets a wrongdoing. See Permian Petroleum Co. v.
Barrow, 484 S.W.2d 631, 634 (Tex.Civ.App.-El Paso 1972, no writ); Cotten v.
Weatherford Bancshares, Inc., 187 S.W.3d 687, 701(Tex.App.- Fort Worth 2006);
Portlock v. Perry, 852 S.W.2d 578, 582 (Tex.App.-Dallas 1993, writ denied);
Aid means to assist or help another; Abet means to encourage, advise, or
instigate the action. Blacks Law Dictionary (7th ed. 1999);
B.
A corporate officer who converts the property of another to the use of the
corporation, or who misapplies private funds in the hands of the corporation is

personally liable to the person whose property or funds have been so
misappropriated. See K & G Tool & Serv. Co. v. G & G Fishing Tool Serv., 314
S.W.2d 782, 793 (Tex.1958). Under Texas law, where a third party knowingly
108
participates in the breach of duty of a fiduciary, such third party becomes a joint
tortfeasor with the fiduciary and is liable as such. See Kinzbach Tool Co. v.
Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942). A corporate officer
may be held individually liable for a corporations tortious conduct if he
knowingly participates in the conduct or has either actual or constructive
knowledge of the tortious conduct. Cotten v. Weatherford Bancshares, Inc., 187
S.W.3d at 701; Pabich v. Kellar, 71 S.W.3d 500, 508 (Tex.App.-Fort Worth 2002,
pet. denied); Further, an omission by a corporate officer can constitute direct
participation, if he had an affirmative duty to act. Portlock v. Perry, 852 S.W.2d
578, 582 (Tex.App.-Dallas 1993, writ denied);
C.
With respect to his rights as a shareholder, WFFI is appellants fiduciary and
owes him an unwavering duty of good faith, fair dealing, loyalty and fidelity over
the trusts affairs and its corpus. Hinds v. Southwestern Savings Assn, 562 S.W.2d
4, 5 (Tex. Civ. App.-Beaumont 1977, writ refd n.r.e.); Patton v. Nicholas, 279
S.W.2d 848, 854 (Tex. 1955); Hersbach v. City of Corpus Christi, 883 S.W.2d
720, 735 (Tex.App.-Corpus Christi 1994, writ denied) The Texas Supreme Court
has held that a corporation is a trustee for the interests of its shareholders in its
property, and is under the obligation to observe its trust for their benefit. Its
possession is friendly, and not adverse, and the shareholder is entitled to rely upon
its not attempting to impair his interest. Yeaman v. Galveston City Co., 167 S.W.
109
710, 723 (Tex. 1914). 50 More than a scintilla of evidence shows that WFFI
breached its fiduciary duties to appellant because the allegations set forth in
appellants original petition have been deemed admitted against it by court orders
and as a matter of law. [CR 12, 532, 2SUPP-CR 380-82]; Holt v. Heine, 835
S.W.2d 80, 83 (Tex. 1992)] The court erred in finding otherwise.
D.
The Chang directors can be said to have conspired with WFFI if they were
acting in a different capacity than a corporate agent or were acting for personal
purposes. See Texas-Ohio Gas, Inc. v. Mecom, 28 S.W.3d 129, 138 (Tex.App.Texarkana 2000, no pet.); Fojtik v. First Natl Bank, 752 S.W.2d 669, 673
(Tex.App.-Corpus Christi 1988), writ denied, 775 S.W.2d 632(Tex. 1989); Cotten
v. Weatherford Bancshares, Inc., 187 S.W.3d 687, 700-701(Tex.App.-Fort Worth
2006). More than a scintilla of evidence shows that the Changs acted for personal
purposes because WFFI admits (i) to maliciously suppressing, converting, and/or
diverting dividend monies owed to appellant [CR 13-15]; (ii) to manipulating its
finances to divert appellants dividend monies for their personal benefit [CR 13];
and (iii) to paying for their personal legal fees. [CR 14] See Holt, 835 S.W.2d at
83.
50
The Texas Supreme Court acknowledges that it may consider the possibility of a direct
fiduciary duty being owed by the corporation to individual shareholders, if a party requests it
to do so. See Ritchie, No. 11-0447 at *26, n.27; but then see Ritchie, No. 11-0447 at *51,
n.62.
110
E.
More than a scintilla of other evidence shows that the other shareholders,
officers, and/or directors received dividends from WFFI that appellant did not
receive. That evidence is as follows:
(1) WFFI admits to paying dividends to shareholders [at least] in the
year 2005. [2SUPP-CR 347(RFA #17)];
(2) Appellant was excluded from these 2005 dividend payments. He
testifies that he has only received one dividend payment in the amount of
$2,000 since his termination in September of 2004. [2SUPP-CR 122, 113];
(3) He further testifies that he never received any dividend payments
after November of 2004. Id.
(4) Appellant also testifies that prior to his termination he was being
paid dividends on a monthly basis in the average amount of $1,689.00. Id.
F.
More than a scintilla of evidence shows that at least one of the Changs
participated in WFFIs misappropriation of appellants dividend monies:

(1) The Changs admit to being on the board of directors since inception
of WFFI. [2SUPP-CR 260, 330]
(2) WFFIs bylaws require the presence of at least four directors to
transact business. [2SUPP-CR 132-33]
(3) WFFIs bylaws require at least three out of the four quorum
directors to vote in favor of the resolution for it to pass. Id.
(4) WFFI admits to removing appellant from the board on August 13,
2005. [2SUPP-CR 156];
(5) Based on the foregoing, appellant could not have and would not
have participated in a vote to divert his own dividend income to the
personal benefit of one or more of the other four shareholders/directors
constituting a majority. [2SUPP-CR 145, 156]
111
By inference then, either Mr. Chang or Mrs. Chang or both must have voted in
favor of a resolution to misappropriate appellants dividends.
G.
WFFI admits to purposeful and wrongful destruction of corporate records
that would allow for appellant to account for the amount of dividends owed to
him. [CR 13-14, 532, 2SUPP-CR 380-82, 350 (RFA#40-41), 353 (RFA#61-68)]
More than a scintilla of evidence shows that Karen Chang participated in WFFIs
wrongful conduct because she admits to and apologized for being involved in the
destruction of those records. [2SUPP-CR 184-87, 200]
H.
WFFI admits to misrepresenting to appellant that it did not make a profit
sufficient to pay him a dividend. [CR 14, 532, 2SUPP-CR 380-82, 347, 269]
More than a scintilla of evidence shows that Henry Chang was the one who made
this misrepresentation on WFFIs behalf because he signed the July 22, 2005
letter containing the same. [2SUPP-CR 152-53] More than a scintilla of evidence
shows that the representation was false because WFFI admits to paying dividends
in 2005 and WFFI admits to signing a new fixed monthly rent plus a percentage
of sales lease in 2005. [2SUPP-CR 269, 547]
I.
WFFI admits to concealing records at the 2009 audits of its books and
records. More specifically, it admits to producing unaltered income records for

112
the time period before January of 2003 and for the time period after May of 2007;
but not for the time period in between. [CR 14, 532, 2SUPP-CR 380-82, 184-87,
200, 350 (RFA#40-41), 353(RFA#61-68)]
A reasonable inference of
concealment may be made from these facts because WFFI produced records for
the time period before appellants employment termination and for the time
period just after the 2007 intermediation [when WFFI started to experience an
economic downturn and lower profits]; but not the time period in between when
appellant was absent. If a company destroyed prior year records in the routine
course of business, then typically all prior year records would have been
destroyed. It would not typically be in the selective fashion as WFFI purports to
have done here. More than a scintilla of evidence shows that Karen Chang
participated in the concealment because she is the one who produced WFFIs
records at the audits. [2SUPP-CR 184-87, 200] She admits that she was the one
responsible for taking care of WFFIs financial records and sending them on a
yearly basis to its accountants. [2SUPP-CR 333]
J.
On April 7, 2007, appellant asked WFFI to pay him his accrued dividends
and earned employment benefits. [2SUPP-CR 165-66] In responding to

appellants request, WFFI remained silent on the subject of dividend income even
while speaking about and denying other of appellants claims. [2SUPP-CR 169]
113
As appellants fiduciary, WFFI had an affirmative duty to speak candidly and

openly about his dividend rights. It also had a duty to act by promptly paying
appellant the dividends that were owed to him. WFFI admits that its silence in
this regard was fraudulent. [CR 21, 532, 2SUPP-CR 380-82, 165-77] More than
a scintilla of evidence shows that both the Changs participated in this silence
because:
(1) Both the Changs had either actual or constructive knowledge,
through appellants letter dated April 9, 2007, that he was making a claim
for dividend income. [2SUPP-CR 165]
(2) They also had actual or constructive knowledge that WFFI ignored
appellants dividend claim. [2SUPP-CR 165-77]
(3) The Changs unlawfully assisted in and/or encouraged WFFIs
silence because, as controlling officers of WFFI, they had a duty to speak
and act. [2SUPP-CR 165-77] See Portlock, 852 S.W.2d at 582.
K.
Appellant testifies that he is still owed payment for accrued sick leave and
vacation pay he earned before his termination in 2004. [2SUPP-CR 124] WFFI
admits to wrongfully exercising dominion and control over and failing to pay
these funds. [CR 20-21, 532, 2SUPP-CR 380-82]
More than a scintilla of
evidence shows that the Changs participated in this wrongful conduct because
they were responsible for and had the authority to issue payroll checks by which
appellant could have been timely compensated, but failed to do so. [2SUPP-CR
272]
114
L.
WFFI admits that it breached a fiduciary duty to appellant by hiring away
the very attorney (i.e. Sharpe) that appellant sought legal advice from him and
revealed confidences to with regards to his potential claims against WFFI. [CR 13,
532, 2SUPP-CR 380-82]
Appellant sought Sharpes legal advice and
representation on these claims as early as October of 2004. [2SUPP-CR 109-110,

253-54, 285]
More than a scintilla of evidence shows that Henry Chang
participated in WFFIs hiring away of Sharpe because:

(1) Henry Chang was the president of WFFI at the time WFFI decided
to hire Sharpe on June 23, 2005 to defend against appellants demand letter
of that same date. [2SUPP-CR 257]
(2) Henry Chang was also the person that responded to appellants
demand letter on behalf of WFFI on July 22, 2005. [2SUPP-CR 152-53]
(3) Appellant sued Sharpe in this suit alleging that Sharpe breached his
fiduciary duties to him by switching sides on the same matter in violation
of Tex. Disciplinary R. of Prof. Conduct 1.09. [App. B4.1] [CR 15]
(4) After being served with this suit containing that allegation, Henry
Chang, as president of WFFI, still hired Sharpe to defend WFFI in this
suit. This happened by formal agreement on March 8, 2010. [2SUPP-CR
212-13]
M.
WFFI admits that it breached its fiduciary duty to appellant by wrongfully
excluding him from participation in management. [CR 14, 532, 2SUPP-CR 38082] WFFIs bylaws require that a stockholders meeting to remove a director
must take place at WFFIs registered office on Timber Creek Road. [2SUPP-CR
115
140] The August 13, 2005 stockholders meeting to remove appellant from the
board actually took place at Sharpes law office. [2SUPP-CR 156] More than a
scintilla of evidence shows that the Changs knowingly participated in this breach
because:
1.
Both the Changs admit to knowing, since 1990, that a stockholders
meeting to remove a director must take place at WFFIs registered office
on Timber Creek Road in order for the resolution to be valid. [2SUPP-CR
330 (RFA#s 9-10), 140]
2.
Both the Changs, as officers of WFFI, appeared at Sharpes law
office on August 13, 2005 to sign the minutes approving appellants
removal from the board. [2SUPP-CR 156]
3.
Sharpe scheduled the meeting to remove appellant from the board at
his law office and the minutes documenting appellants removal were
typed on his law firms computer [2SUPP-CR 156].
N.
More than a scintilla of evidence shows that appellants damages were a
proximate result of Sharpes fiduciary breach because appellant testified that

defendants wrongful conduct negatively affected the value of his shareholder
rights claims. [2SUPP-CR 112, 122-24] This testimony alone is sufficient to
create an issue of fact on the proximate cause element as a matter of law. See
Stonewall Surplus Lines Ins. Co. v. Drabek, 835 S.W. 2d 708, 712 (Tex.App.Corpus Christi 1992, writ denied).
116
O.
More than a scintilla of evidence shows that appellants damages were a
proximate result of WFFIs wrongful conduct because WFFI admitted the same
and because appellant testifies to the same. [CR 16, 532, 2SUPP-CR 380-82, 123,
112]
P.
More than a scintilla of evidence shows that appellant suffered monetary
damages as a result of defendants wrongful acts because appellant testifies that

he suffered $141,895.00 of damages. 51 [2SUPP-CR 123-24]
51
See also Section II-C-5.2, above.
117
their summary judgment motion.
A motion for summary judgment must be analyzed in light of the pleadings
to ensure that it effectively defeats every cause of action raised in the petition.
Yancy v. City of Tyler, 836 S.W.2d 337, 341 (Tex.App.-Tyler 1992, writ denied).
A trial court errs by granting final judgment on causes of action not addressed by
the underlying motion for summary judgment. Pinnacle Data Services, Inc. v.
Gillen, 104 S.W.3d 188, 199 (Tex.App.-Texarkana 2003). Summary judgment
must be reversed and remanded as to unaddressed causes of action. Id. The
Changs motion does not address or properly address [2SUPP-CR 36]:
(1) Appellants direct breach of fiduciary duty claims against them in their
capacity as the majority shareholders. [CR 16-17]52
(2) Appellants derivative breach of fiduciary duty claims against them in their
capacity as the officers and directors of WFFI. Id. 53
(3) Appellants direct breach of fiduciary duty claims against them in their
capacity as the officers and directors of WFFI. Id. 54
(4)
Appellants claims of civil conversion.55 [CR 20]
(5) Appellants conspiracy and aiding and abetting claims against them for their
participation in WFFIs breach of its trustee-cestui que trust relationship with
appellant. [CR 16, 19-20]56
52

See Section IX-H, above and Sections XV-XVI, below.
54
Id.
53
55
A corporate officer who converts the property of another to the use of the corporation, or
who misapplies private funds in the hands of the corporation is personally liable to the person
whose property or funds have been so misappropriated. Mayflower Investment Company et
al. v. Stephens, 345 S.W.2d 786, 795 (Tex.Civ.App.-Dallas 1960, writ ref'd n.r.e.);
118
(6) Appellants conspiracy and aiding and abetting claims against them for their
participation in Sharpes breach of his fiduciary relationship with appellant. [CR
17, 19-20]57
(7) Appellants theories of the continuing tort doctrine, discovery rule, and
fraudulent inducement. [CR 17, 21, 1598]58
(8) The Changs defenses where they have the burden of proof, including, but
not limited to, those of limitations and waiver [2SUPP-CR 4, 26]59
(9) Any other claims or theories not properly addressed or included in their
summary judgment motion (e.g. ones that might emanate from appellants
stipulation to Item # 3 in a January 22, 2013 liminie order).60
56
See Section IX-I, above.

See Sections IX-F and IX-G, above.
58
See Section IX-C, above.
59
See Section IX-C, above.
60
See Sections XV & XVI, below.
57
119
X.
On October 23, 2013, the court erred by severing appellants TUFTA
claims against the Changs from his common law tort claims against them, as
the debtor(s). [App. A4.1] Given the more efficient and convenient option
of bifurcation, the Changs did not show how they would be prejudiced by
denial of their motion to sever. [CR 845-48][RR 4]
Appellant respectfully refers the court to the severance and TUFTA laws,
analysis, and arguments made under Section IV of this brief as they also apply to
the Changs. Additionally, the trial court erred by granting the Changs October
17, 2013 motion for severance because bifurcation was as an option and the
Changs never made any showing of how they would be prejudiced if severance
of the TUFTA claims was denied. [RR 4] [CR 845-49] Bifurcation was also the
more judicially efficient option because: (i) the Changs, like Sharpe, will likely
request mandatory bifurcation of the issue of the amount of punitive damages
pursuant to Tex. Civ. Prac. & Rem. Code 41.009. [App. B2.2] [CR 478] and (ii)
it would avoid the expense of litigating the same factual issues before two
separate juries. See In re State 355 S.W.3d 611, 614 (Tex. 2011).
Having now crossed the threshold into this Age of Quarrel 61 it would be
utopian thinking to deny the real probability that appellees engaged in fraudulent
transfers with intent either (i) to artificially lower their net worth in anticipation
of an unfavorable punitive damages verdict or (ii) to hinder appellants ability to
61
See, e.g. Krishna Dvaipyana Vysadeva, rmad Bhgavatam, (Canto 12, Chapter 2);
(Anand Aadhars internet version located at www.bhagavata.org ) (Amin was not able to
locate a contextually appropriate parallel citation in The Holy Bible).
120
collect on a judgment. Over four and a half years have transpired since suit was
filed and its been almost five years since litigation was threatened. [CR 12,
2SUPP-CR 179-81]
For one or more of the reasons stated above, on July 25, 2014, the court
also erred by denying appellants October 30, 2013 and July 21, 2014 motion and
supplemental motion, respectively, to reconsider the TUFTA severance order.
[App. A4.1] [CR 892, 1650]
121
claims. [App. A5.0] Appellant is entitled to file a TUFTA claim based on
pending, unliquidated tort claims and there is no evidentiary threshold he
must cross before seeking TUFTA discovery or relief.
Appellant respectfully refers the court to the abatement and TUFTA laws,
analysis, and arguments made under Section V of this brief as they also apply to
the Changs. Additionally, the Changs [and the Sharpe appellees] offered no
evidence or arguments to support abatement and appellant objected. [RR 4] [CR
797, 809, 812, 845-49, 1SUPP-CR 5] [App. C1] The Changs simply joined in
Sharpes unverified motion to abate. Id. Tex. R. Civ. P. 93 [App. B4.25] [CR
845-48]
The appellees motion(s) are defective from a procedural and
evidentiary stand point and thus the trial court erred in granting abatement. See
Sparks, 335 S.W.2d at 785 (A motion to abate must be verified or supported by
affidavit); Brazos Elec. Power Coop. v. Weatherford ISD, 453 S.W.2d at 189 (a
hearing on a motion to abate is for the receipt of evidence).
122
XII. On June 24, 2014, the court erred by denying appellants motion to
compel supplemental net-worth related discovery responses. [App. A6.0]
Appellant is legally entitled to know information about the Changs
current net-worth in this punitive damages case.
Appellant sued the Changs for an intentional breach of their fiduciary duty
and he seeks exemplary damages. [CR 22, 1600] Appellant is legally entitled to
discover information relating to the Changs net-worth. Lunsford, 746 S.W.2d at
473. The Changs last disclosed net-worth related information on August 5, 2013.
[CR 706, 2SUPP-CR 442] However, appellant is legally entitled to know their
current net-worth information as opposed to last years information. In re
Mark A. Jacobs, 300 S.W.3d 35, 45 (Tex.App.-Houston [14 Dist.] 2009). To
date, the court signed two orders permitting certain limited net-worth related
discovery. [CR 539, 678] The court erred in denying appellants May 27, 2014
motion to compel supplemental discovery responses under the authority of those
court orders. [App. A6] Said discovery is also permitted under appellants Tex.
R. Civ. P. 193.5 motion and request. [App. B4.10] [CR 1569, 1575]
123
XIII. On July 24, 2003, October 15, 2013, and on May 6, 2014, the court
erred by denying appellants motions to compel his third set of discovery
requests. [App. A7.1-A7.3] Appellant is legally entitled to discover the
financial information sought because it relates to appellants TUFTA claims
and/or to the issue of the Changs net-worth in the context of proving
exemplary damages.
Appellant respectfully refers the court to the law and analysis presented
under Section VII of this brief as it applies to the Changs as well. Additionally,
appellant argues he is entitled to seek financial discovery from the Changs dating
back to the time when litigation was first threatened (i.e. September of 2009).
[2SUPP-CR 179-81] This is because the integrity of the Changs purported
current net-worth is inextricably intertwined with their past financial
maneuvering. In this context, appellant propounded financial discovery upon the
Changs (i.e. his third set of discovery requests) and when the Changs failed to
properly respond, he filed motions to compel on June 12, 2013 and September
5, 2013. [CR 610, 687] The court erred in denying those motions and alternate
motions, in whole or in part. [App. A7.1-A7.3]
By attorney letter dated August 5, 2013, the Changs admitted that they did
not have any post-January 1, 2009 balance sheets showing their net worth that
would be responsive to this courts July 24, 2013 discovery order. [CR 706] The
Changs have never provided appellant with an actual dollar figure of their net
worth. [2SUPP-CR 442]
Nor have they provided appellant with sufficient
documentation by which he could calculate and verify the dollar amount of their
124
net worth as of any date certain. Id.

After receiving select financial information from the Changs pursuant to
the July 24, 2013 order, on September 5, 2013, appellant then filed a
supplemental motion to compel62 discovery pursuant to that order. [CR 687] In
light of the foregoing facts and appellants TUFTA and exemplary damage
claims, appellant is entitled to receive proper discovery responses to his third set
of discovery requests specifically identified under Section VII of this brief.
Those requests were the subject of appellants original and first supplemental
motion to compel. [CR 610, 687]
With respect to appellants REQUEST FOR PRODUCTION 5, since the
Changs admit that they have no financial statements (i.e. balance sheets)
accurately revealing their net-worth, income tax returns have now become
relevant because the information sought cannot be obtained through another
source. [CR 706] See In re Williams, 328 S.W.3d 103, 116 (Tex.App.-Corpus
Christi 2010). Income tax returns contain asset and liabilities information which
can assist a plaintiff in ascertaining, identifying, and/or verifying a defendants
potential fraudulent transfers and net worth calculations. Also, with respect to
appellants REQUEST FOR PRODUCTION 8, in a case where a plaintiff has
62
This motion is also pled in the alternative, for example, as appellants motion to reconsider
the July 24, 2013 order; or his motion for order permitting additional discovery. [CR 687]
125
alleged fraudulent transfers he is entitled to discovery broad enough to trace the

moving of such assets at least between the date of the original petition and the
present. See In re Williams, 328 S.W.3d at 118-120.
126
XIV. On August 12, 2014, the court erred by severing, into a separate
cause number, appellants claims against WFFI from his claims against the
Changs. [App. A2.2] Severance is not proper if the claim to be severed is so
interwoven with the remaining claims that two trials will involve the same
facts and legal issues. See In re State 355 S.W.3d 611, 614 (Tex. 2011).
Appellant sued WFFI for an intentional breach of its fiduciary duties to
him with respect to his rights as a stockholder. [CR 23, 1600] See Yeaman v.
Galveston City Co., 167 S.W. 710, 723-24 (Tex. 1914); Patton v. Nicholas, 279
S.W.2d 848, 852-854 (Tex. 1955).
Appellant pled that the Changs were the
controlling directors and officers of WFFI and sued them for participating in
WFFIs breach. [CR 17, 19-20] An officer of a corporation may be personally as
responsible as the corporation itself for tortious acts when he directs or
participates in the wrongdoing. K & G Tool & Serv. Co. v. G & G Fishing Tool
Serv., 314 S.W.2d 782, 793 (Tex.1958); Leyendecker & Assocs., Inc. v. Wechter,
683 S.W.2d 369, 375 (Tex.1984).
With respect to appellants rights as a stockholder, it has been deemed
admitted that WFFI breached the trustee-cestui que trust fiduciary relationship
between itself and appellant. [CR 16, 532, 2SUPP-CR 380-82] It has also been
deemed admitted that WFFI has fiduciary relationship with appellant, whether
formal or informal. Id. At a trial on the amount of damages, including the
amount of exemplary damages, the factual allegations pertaining to WFFIs
breach will need to be presented to the jury so that they can understand the nature
127
and character of the wrong committed. See Tex. Civ. Prac. & Rem. Code
41.011(a). [App. B2.3] Now however, because of the courts severance,
appellant would have to present theses same factual allegations again in a
separate jury trial against the Changs for their participation in WFFIs breach. If
the two claims are tried together, the only additional facts needed to establish the
Changs culpability would be on the subject of which of the Chang directors
participated in WFFIs wrongful conduct at issue. 63 It would be an utter waste
of resources to try these claims separately before two juries.
See In re
Prudential Ins. Co. of America, 148 S.W.3d 124, 136-37 (Tex. 2004) (orig.
proceeding). Further, the claims should be tried together because of the concept
of joint liability which applies to participatory conduct. Kinzbach Tool Co. v.
Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942).
These same arguments apply to appellants conspiracy claims against the
Changs and WFFI. Appellant has sued them for conspiring to commit a breach
of fiduciary. [CR 16, 20] As such, a second trial on the conspiracy claim would
require proof of the underlying breach of fiduciary duty cause of action all over
again. In other words, the unlawful object, the unlawful means, proximate
cause, and damages elements of the conspiracy claim would be established by
63
See General Resources Organization, Inc. v. Deadman, 907 S.W.2d 22, 28 (Tex.App.-San Antonio 1995, no
writ) (However, the allegations of the plaintiffs make clear that the Manns were an integral part of the
fraudulent scheme. Clearly, the causes of action at issue are so interwoven as to require introduction of evidence
on the same facts and issues.).
128
proving the very same facts as the four elements of a breach of fiduciary duty
cause of action. See Kirby v. Cruce, 688 S.W.2d 161, 166 (Tex.App.Dallas
1985, writ refd n.r.e). Recovery for conspiracy is based on the injury caused by
the underlying tort. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). Thus,
appellants conspiracy claims against WFFI and the Changs should also be tried
before one jury.
Also, it was improper for the court to sever appellants breach of fiduciary
duty claims against the Changs from his breach of fiduciary duty claims against
WFFI. This is because, in the context of closely-held corporation, the two claims
can be treated as one and the same, if justice requires. 64 Finally, severance for
the purposes of making an interlocutory summary judgment order final and
appealable could have been done without creating a separate physical file and
assigning different cause numbers for appellants claims against WFFI to
distinguish them from his claims against the Changs. See Butler v. Whitten, No.
02-13-00306-CV (Tex.App.-Fort Worth January 2, 2014, no pet.) (mem. op.).
Thus, the August 12, 2014 severance order should be reversed in part and
modified. Appellants claims against the Changs should be ordered consolidated
with his claims against WFFI under the severed cause number of 48-273672-14.
64
See Sections XV & XVI, below.
129
XV. On November 3, 2014, the court erred in denying appellants motion

for leave to supplement his pleadings to include facts about WFFIs closelyheld corporation status because the Changs cannot and/or did not show
surprise. [App. A10.0]
Appellant moved for leave to supplement his pleadings to include facts
about WFFIs closely-held corporation status. [2SUPP-CR 395] The proposed
fifth supplemental pleading was attached to appellants motion for new trial.
[2SUPP-CR 417]
The court erred by denying appellants motion for leave
because the Changs can show or prove no surprise. [1SUPP-CR 63] This is
because the Changs were signatories to WFFIs 1/2/90 buy-sell stock agreement
and have known since then that WFFI has only had five shareholders and that it
has never been listed on any stock exchange. [2SUPP-CR 441, 145]
Furthermore, the Changs never properly challenged the parties capacity to sue or
be sued as required by Tex. R. Civ. P. 93 to which failure appellant objected.
[App. B4.25] [2SUPP-CR 4, 26, 392] Finally, Tex. R. Civ. P. 63 states that leave
shall be granted unless there is a showing of surprise. [App. B4.0] The Changs
never filed a response to appellant motion to make such a showing. [App. C1]
130
XVI. On November 3, 2014, the court erred in denying appellants motion

to reconsider Item #3 in its January 22, 2013 liminie order, predicated in
part on appellants motion to withdraw his stipulation to the same. [App.
A10.0] The Changs can show no prejudice from appellants withdrawal of
his stipulation and under Texas law a new trial may be granted in the
interest of justice if it appears that a party may have proceeded under the
wrong legal theory.
On August 4, 2014, appellant filed a withdrawal to his stipulation to Item #
3 in the courts January 22, 2013 liminie order. [2SUPP-CR 390] On August 22,
2014, appellant filed a motion for new trial in which he moved the court to
reconsider said liminie order and to allow him to withdraw his stipulation to Item
#3 in the same. [2SUPP-CR 395] The court erred in denying appellants motions
for at least four reasons. [1SUPP-CR 63]
First, [p]arties may stipulate only to facts, and courts are not bound by
stipulations to legal conclusions to be drawn from the evidence. Cartwright v.
MBank Corpus Christi, N.A., 865 S.W.2d 546, 549 (Tex.App.-Corpus Christi
1993 no pet.).
Whether, and under what circumstances, any individual
shareholder might owe a fiduciary duty to any other individual shareholder is an

issue of Texas law; not an issue of fact. For example, there is some consensus
among Texas courts that majority shareholders owe minority shareholders a
fiduciary duty under certain circumstances. 65 Whether officers and directors owe
fiduciary duties to individual shareholders and whether a particular action is a
65
131
direct or derivative one are also both questions of law. See Ritchie, No. 11-0447
at 37-47, 51. [2SUPP-CR 422] It is not always easy for courts to differentiate
between direct and derivative actions. See Abelow v. Symonds, 156 A.2d 416, 420
(Del. Ch. 1959) ("[T]he line of distinction between derivative suits and those
brought for the enforcement of personal rights asserted on behalf of a class of
stockholders is often a narrow one, the latter type of actions being designed to
enforce common rights running against plaintiffs' own corporation or those
dominating it, while the former are clearly for the purpose of remedying wrongs
to the corporation itself"). Often, the same set of facts gives rise to both direct
and derivative claims. See, e.g., Grimes v. Donald, 673 A.2d 1207, 1212 (Del.
1996); Jones v. H. F. Ahmanson & Co. 1 Cal. 3d 93, 107 (1969). ("The individual
wrong necessary to support a suit by a shareholder need not be unique to that
plaintiff. The same injury may affect a substantial number of shareholders. If the
injury is not incidental to an injury to the corporation, an individual cause of
action exists."); Behrens v. Aerial Communications, Inc., No. Civ. A 17436, 2001
WL 599870 (Del. Ch. 2001) ("The distinction between a direct and derivative
claim, which is difficult to apply in specific circumstances, turns on the existence
of direct or 'special' injury to the plaintiff stockholder."); Tuscano v. Tuscano,
403 F. Supp. 2d 214, 222 (E.D.N.Y. 2005). Based on the foregoing, appellant
could not have legitimately stipulated to the above three described issues of
132
law. 66
Second, [i]n order for evidence to be considered as proof in a case, it must
be admitted at trial. Stipulations are agreements between the parties, but must
be admitted into evidence in order to be binding upon the trial judge.
Furthermore, the trial court ordinarily has the discretion to set aside a
stipulation. State Bar of Texas v. Grossenbacher, 781 S.W.2d 736, 738
(Tex.App.-San Antonio 1989 no pet.). Here, the Changs never made appellants
liminie stipulation a part of the evidence in their motion for summary judgment.
[2SUPP-CR 36-41] The court erred in considering the same for the purpose of
granting the Changs judgment.
Third, the Changs have shown no prejudice from appellants withdrawal of
his agreement to the subject liminie item and a new trial may be granted in the
interest of justice if it appears that a party may have proceeded under the wrong
legal theory. See Cardiac Perfusion Service, Inc. v. Hughes, No. 13-0014 at 2-5
(Tex. June 27, 2014) in conjunction with a certified copy of Hughess petition in
that case. [2SUPP-CR 409-413]
Also, from a notice pleadings standpoint,
plaintiffs original petition contains allegations that would support both direct and
derivative claims. [CR 12-16] See Ritchie, No. 11-0447, at 37-47; Mitchell v.
LaFlamme, 60 S.W.3d 123, 130 (Tex.App.Houston [14th Dist.] 2000, no pet.)
66
See Boulet, 189 S.W.3d at 838 (an admission of a purely legal issue is of no effect).
133
When it is difficult to determine in practice what type of action is brought, courts

must look to the substance of the cause of action and not necessarily the manner
in which it is pleaded. See Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617
(Tex. 1986). Finally, the stipulation pertains to a limine order and appellants
request to withdraw it is being made far in advance of a jury trial. [2SUPP-CR
392, 395]
Fourth, the facts of our case are analogous to those in Durham v. Durham,
871 A.2d 41, 46 (N.H. 2005) and in other cases where the courts have abandoned
the distinction between direct and derivative actions. This is because WFFI is a
closely-held corporation. [2SUPP-CR 441] For closely-held corporations Texas
law appears to have abandoned this distinction through legislative action. For
example, under 21.563(b) of the Tex. Bus. Orgs. Code, the formalities for filing
derivative actions do not apply to shareholders in a closely-held corporation.
[App. B1.10]
Additionally, 21.563(c)(2) permits a recovery in a direct
proceeding to be paid to the corporation and a recovery in a derivative

proceeding to be paid to an individual shareholder, [i]f justice requires. [App.
B1.11] Thus, it matters not whether appellant may have stipulated that this case
is not a derivative one.
134
PRAYER
Appellant prays that this Court reverses the trial court(s) order(s): (i)
disqualifying Amin as appellants counsel, (ii) granting appellees summary
judgment, (iii) denying appellants motion to compel discovery on the crucial
element of fiduciary breach, (iv) severing and abating appellants TUFTA claims
against appellees as the debtors, (v) denying appellants motion to compel
supplemental discovery on current net-worth, (vi) denying appellants motions
seeking discovery on net-worth and TUFTA related issues, (vii) precluding
appellant from filing Sharpes financial documents constituting court records,
(viii) severing, into a separate cause number, appellants claims against WFFI from
his claims against the Changs, (ix) denying appellant leave to supplement his
petition to include allegations of WFFIs closely-held corporation status, and (x)
denying appellants motion to reconsider Item#3 on the courts January 22, 2013
liminie order and appellants motion to withdraw his stipulation to the same.
Appellant further prays (xi) that appellants TUFTA claims against appellees as
debtor(s) be ordered reconsolidated with his common law tort claims against
them, (xii) that his claims against the Changs be ordered consolidated with his
claims against WFFI under Cause No. 48-273672-14, (xiii) that this case be
remanded to the trial court for further proceedings, and (xiv) for such other relief
as may be just.
135
/s/ Mayur Amin
Mayur Amin
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
ATTORNEY FOR APPELLANT
I hereby certify that on or before December 29, 2014, a true and correct copy of
the foregoing Appellants Brief and supporting appendix was served via
electronic service and/or email to the following parties in accordance with Rule
9.5 of the Texas Rules of Appellate Procedure:
John W. Proctor
Attorney for Appellees J. Shelby Sharpe and The Law Offices of J. Shelby Sharpe,
Attorney for Appellees Henry and Karen Chang
/s/ Mayur Amin
Mayur Amin
136

Pursuant to Rule 9.4(i)(2)(B), I certify that this document contains 29,825
Appellants motion for extension of the word limit to 30,000 words was
previously granted by order of this court dated November 21, 2014.
/s/ Mayur Amin
Mayur Amin
137
Case No. 02-14-00286-CV

Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
Appellees
_____________________________________________
APPENDIX TO APPELLANTS BRIEF
______________________________________________
Tab
Trial Courts Judgment or Other Appealable Orders:
A1.1
Order re: Defendants J. Shelby Sharpe and The Law Offices of J.

Shelby Sharpes Fourth Motion to Disqualify Plaintiffs Counsel
June 17, 2014 [CR 1622];
A1.2
Order Denying Plaintiffs Motion to Reconsider June 17, 2014

Order of Disqualification July 25, 2014 [CR 1690];
A2.1
Order re: Defendants J. Shelby Sharpe and The Law Offices of J.

Shelby Sharpes Third No-Evidence Motion for Summary Judgment
and Fourth Motion for Traditional Summary Judgment June 17,
2014 [CR 1623];
A2.2
Order Granting Defendants Joint Motion to Sever and Final

Judgment August 12, 2014 [CR 1699];
Page 1 of 6
A3.1
First Partial Order on Plaintiffs Motion to Compel James Sharpe to

Respond to Discovery Requests September 26, 2011 [CR 394];
A3.2
Second Partial Order on Plaintiffs Motion to Compel James Sharpe

to Respond to Discovery Requests November 14, 2011 [CR 397];
A4.1
Order of Severance October 23, 2013 [CR 886];
A4.2
Order Denying Plaintiffs First Supplement to His October 30, 2013

Motion to Reconsider Order Severing His TUFTA Claims July 25,
2014 [CR 1687];
A5.0
Order of Abatement October 25, 2013 [CR 888];
A6.0
Order Denying Plaintiffs Motion to Compel Supplemental

Discovery Responses June 24, 2014 [CR 1624];
A7.1
Order on Plaintiffs Motion to Compel the Sharpe Defendants and

the Chang Defendants to Properly Respond to Plaintiffs Third Set
of Discovery July 24, 2013 [CR 678];
A7.2
Order Denying Plaintiffs Motion to Compel Proper Responses from

Defendants to Plaintiffs Third Set of Discovery October 15, 2013
[CR 860];
A7.3
Order re: Plaintiff's First Supplemental Motion to Compel &

Response to Sharpe Defendants' Motion for Reconsideration of the
Court's July 24, 2013, Order Concerning Plaintiff's Third Set of
Discovery Requests May 6, 2014 [CR 1509];
A8.0
Order Granting Defendants J. Shelby Sharpe and the Law Offices of

J. Shelby Sharpe's Motion for Protective Order to Limit Viewing of
Financial Documents to Plaintiff's Counsel Only October 22, 2013
[CR 885];
A9.0
Order Granting No-Evidence Motion for Summary Judgment

(Chang) [2SUPP-CR 389];
Page 2 of 6
A10.0
Order Denying Plaintiffs Motion for New Trial with Respect to the
Chang Defendants [1SUPP-CR 63]
Tab
Any Rules, Regulations, Ordinances, and Statutes Relied On:
B1.1
Tex. Bus. & Com. Code 24.001
B1.2
B1.3
B1.4
Tex. Bus. & Com. Code 24.008(a)(3)(C)
B1.5
Tex. Bus. & Com. Code 24.010(a)
B1.6
B1.7
B1.8
B1.9
B1.10
Tex. Bus. Orgs. Code 21.563(b)
B1.11
Tex. Bus. Orgs. Code 21.563(c)(2)
B2.1
Tex. Civ. Prac. & Rem. Code 16.004(a)
B2.2
Tex. Civ. Prac. & Rem. Code 41.009
B2.3
B2.4

Page 3 of 6
B3.1
Tex. R. App. P. 9.9(a)
B3.2
Tex. R. App. P. 9.9(b)
B3.3
Tex. R. App. P. 13.1(a)
B3.4
Tex. R. App. P. 13.1(c)
B4.0
Tex. R. Civ. P. 63
B4.1
Tex. R. Civ. P. 76a
B4.2
Tex. R. Civ. P. 76a (1)(b)
B4.25
Tex. R. Civ. P. 93
B4.3
Tex. R. Civ. P. 166(l)
B4.4
Tex. R. Civ. P. 166a
B4.5
Tex. R. Civ. P. 166a(c)
B4.6
Tex. R. Civ. P. 166a(d)
B4.7
Tex. R. Civ. P. 166a(f)
B4.8
Tex. R. Civ. P. 166a(i)
B4.85
Tex. R. Civ. P. 166a(i) - Comments
B4.9
Tex. R. Civ. P. 192.3
B4.10
Tex. R. Civ. P. 193.5
B4.11
Tex. R. Civ. P. 215.6

Page 4 of 6
B5.1
Tex. Disciplinary R. Prof. Conduct - Preamble
B5.2
Tex. Disciplinary R. Prof. Conduct 1.05
B5.3
B5.4
B5.5
Tex. Disciplinary R. Prof. Conduct 3.08(a)
B6.1
Tex. R. Evid. 106
B6.2
Tex. R. Evid. 107
B6.3
Tex. R. Evid. 201
B6.4
Tex. R. Evid. 503(a)
B6.5
Tex. R. Evid. 503(d)
B6.6
Tex. R. Evid. 803
B6.7
Tex. R. Evid. 803(6)
B6.8
Tex. R. Evid. 902(10)
Tab
Any Other Documents or Items Relied On:
C1
Affidavit of No Evidence in Support of Appellants Brief
Page 5 of 6
STATE OF TEXAS
TARRANT COUNTY
APPENDIX VERIFICATION
Before me, the undersigned notary, on this day personally appeared Mayur Amin,
the affiant, a person whose identity is known to me. After I administered an oath
to affiant, affiant testified:
1.
"My name is Mayur Amin. I am over 18 years of age, of sound mind, and
capable of making this affidavit. The facts in this affidavit are within my personal
knowledge and are true and correct.
2.
I am the attorney for appellant. All t e documents included with the
appendix true copies."
Sworn to and subscribed before me by
Notary Public in a
the State ofTexa
My commission expires:
I (--D0 -/5
CHERIE SINGLETON
Notary Public
STATE OF TEXAS
My Com~. Exp. 11-09-15
Page 6 of6
Jun 17 2014
Fax:8178842384
TARRANT COUNTY
.
15:58
P. 08
~~
CAUSE NO. 048 ..243~28-1;0

:
:
,,
F'R.A.Ncis WING-siNo cfiAN .
v.
.WA'N,FU FOODS. INC KAR.EN' CHANG,
'
'
'
'
HENRY CHANG, CHIH TEH MU,
'
. i. S:A:EL13Y SHAkPE, AND THE LAW
'.;
OFFICES OFJ. SHELBY SHARPE.

.. A PROFESSIONAL CORPOR.ATION
!
~
IN THE l!OISTRICT COIURT
TA.R.R.AN'r COUNTYJrEXAS
..
II
.
48TH ruDICIAL DISTiuCT

;
,1'
:
...
'
...
:;
.:
. ORDER RE: DEFENDANTS J. SliELBf SHARPE AND

THE LAWOFFICES OF J. SHELBV SHARPE'S l
F'OURTH MOTION TO DISQUALIFY PLAiNTIFF'S
COPNSEL
.
.
.
.\
i
On the 11 til day of June 2014 came on to be
con~idenid Defendants~ Shelby Sharpe and

. .
:
l
The Law
Offices of J. Shelby Sharpe 19 Fourth Motion to }jtsqualify
Plaifztiffs
Counsel.' filed .
.
'
l
r
'
ApriL29, 2014.
. The Court, after having considered the motioh, the evidence, at}d the mgu.ments of
!
.
CoWsel, has detennined the motion should be Granted. .
l
.
,;
: IT IS. THEREFORE ORDERED that Defendants J. Shelby S~arpe and The Law
)
Offlc~s of J Shelby Sharpe's Fourth Motion toi DisqualifY Plaini(ff's Counsel,. filed
Apri1'29, 2014~ is GRANTED.. .
.
:':
'
l'
..
>
Signed this the
/*'$i.ay of Jtme 2014.
.:.
'
.,
oc: . Mr. Marc H. Amin

Mr. John W, Pro.::tor
Via Fax No. {888/ 580-~175

Via Fax No. (817) 870-~427
Mr. Marshall Searcy

Ms. Lisa M. Holt
Via Fax No. (972). 383-2935
Vta Fax No. (817)' 878-~280

I .
~
:,
'
,.'
'
CAUSE NO. 048-243228-10

v.
WAN FU FOODS, INC., KAREN CHANG,
J. SHELBY SHARPE, AND THE LAW
OFFICES OF J. SHELBY SHARPE,
A PROFESSIONAL CORPORATION
TARRANTCOUNTY, TEXAS
ORDER DENYING PLAINTIFF'S RESPONSE AND OBJECTIONS TO DEFENDANTS'

JOINT MOTION TO SEVER AND PLAINTIFF'S MOTION TO RECONSIDER
JUNE 17,2014, ORDER OF DISQUALIFICATION
On the 24th day of July 2014 came on to be considered Plaintiff's Response And
Objections To Defendants' Joint Motion To Sever and Plaintiff's Motion To Reconsider

June 17, 2014, Order OfDisqualification.
The Court, after having considered the motion, the evidence, and the arguments of
Counsel, has determined the motion should be Denied.
IT IS THEREFORE ORDERED that Plaintiff's Response And Objections To
Defendants'
Joint
Motion
To
Sever
and
Plaintiff's
Motion
To
Reconsider
June 17, 2014, Order Of Disqualification are DENIED.

Signed this the ~ay of July 2014.
David L. Evans, Judge Presiding
cc:
Mr. Marc H. Amin

Mr. John W. Proctor
Mr. Marshall Searcy
Ms. Lisa M. Holt
Via Fax No.

Via Fax No.
Via Fax No.
Via Fax No.
(888)
(817)
(817)
(972)
580-6175
870-2427
878-9280
383-2935
1690
TARRANT COUNTY
Jun 17 2014
Fax:8178842384
P.02
15:56
'
'
l'
(
1
I
CAUSE NO. 048 ..243228-1:{)

j
.
.
l
FRANCIS WING-SINO CHAN
IN THE l)ISTRICT cqUR.T
'
:
v.
..
:
f.
WAN FU FOODS~ INC., KAREN CHANG,

HENRY CHANGt CHIH TEH MU,
J. SHELBY SHARPE, AND TliE LAW
OFFlCES OF J. SHELBY SHARPE,
.:
TAR.RAJh
COUNTY,!mXAS .
'
:
i
48TH JUpiCIA:L DISTjuCT
i
j
i'
,'
!
:
'
ORDER RE: DEFENDANTS J. SHELBY Sl:lAJzyE ~THE LA}" OFFICES OF

. J. SHitLBY SHARPE'S TimiD NO-EVIDENCE MOTION FOR SUMMARY
JUDGMENT AND FOURTH MOTION FOR TRADiTIONAL S~Y JUDGMENT
'
:'
'
'
On the 11th day of June 2014 came on to be con.Sider~ Defendant~ )f. Shelby Sharpe and
the L~ Offices of J. Shelby Sharpe 's Third No-Evidence Motion for
su.,J,mary Judgment 'and'
'
:
i
Fourlft Motion for Traditional Summary Judgment filed on A~ril3, 2014. !
'
'
'
The Courtt having considered the motion, the evidence, and the
'
'
~ents
of Counsel,
'
<
'
has determined the motion should be GRANTED:
.
'
'(
.
l
:. IT IS THEREFORE ORDERED that Defendants
J.
:Shelby
Shar!J.
and the Law Offices
.
.
~
cc:
Mr. Marc H. Amin

Mr. John W. Proctor
Mr. Marshall Searcy
Ms: Lisa M. Holt
ViaFaxNo.
Via Fax No.
Via Fax No.
Via Fax No.
(888/sS0-6175
(8J.7)870~2427
(817);878-~28q
(972Y383-2935
048~243228-1 0
NO. 48-24322810
I
Plaintiff
v.
WAN FU FOODS, I c., KAREN
CHANG, HENRY CHANG, CHIH TEH
MU, J. SHELBY SHARPE, AND
THE LAW OFFICES OF J. SHELBY
CORPORATION
Defendants
OR ER GRANTING DEFENDANTS' JOINT MOTION

TO SEVER AND FINAL JUDGMENT
~014,
On July 24,
came on to be heard Defendants' Joint Motion to Sever. The
Court, having consibered such Motion and Plaintiff's response. and having heard the
arguments of counsll, finds that the Motion should be granted and the following order
entered:
IT IS, THE EFORE, ORDERED that Plaintiff's claims against Defendant Wan
Fu Foods. Inc. are Jvered from this cause and shall appear on the docket of this court as
Cause Number*ci>i;sb7.2 -1 C/
, styled Francis Wing-Sing Chan v. Wan Fu Foods, Inc.
IT IS FURTHER ORDERED that the clerk of this Court shall make a new file for
the severed suit, incljding the following court papers from this suit:
(1)
Plainti
s Original Petition and Request for Disclosure filed January 22,
2010;
O<do< o...nting Deferubnl Jdnt Motion to S<ve< And Final Judgment
Pagel
-MAILED
f!S?J
..
f{~ 15-14J1..;
t~
(2)
Order n Plaintiff's Motion to Disqualify Opposing Counsel and on Opposing

Counsel's Oral Motion to Withdraw as Counsel entered to Withdraw as
Counshl April6, 2011 (actual date on Order is inadvertently shown as April6,

2010);
(3)
Order on Plaintiff's Motion to Compel WFFI to Respond to Discovery

Reque ts filed July 22, 2011;
(4)
Plainti~s Motion for Discovery Sanctions Against Wan Fu Foods, Inc.

(Augjt 29, 2011);
(5)
Order bn Plaintiff's Motion for Discovery Sanctions Against Wan Fu Foods,

Inc. enlered September 16, 2011;
{6)
Order intered September 23, 2011;
(7)
DefenAants' Joint Motion to Sever (June 26, 2014);
(8)
Order Denying Plaintiff's Response and Objections To Defendants' Joint

Motio to Sever and Plaintiffs' Motion to Reconsider June 17, 2014, Order of
Disqualification entered July 25, 2014;
(9)
OrderJGranting Defendants' Joint Motion to Sever and Final Judgment
~LZ..2oi4; aru1
entere
( 10)
DockeJ
~beet itemizing the foregoing items.
IT IS FINALLY ORDERED, ADJUDGED AND DECREED that with this

severnnce, the June
17, 20 I4 Order Granting No-Evidence Motion for Summary Judgment
(Chang) granting the! Chang Defendants summary judgment, and the June 17, 2014 Order
Re: Defendants J. sLlby Sharpe and The Law Offices of J. Shelby Sharpe's Third No1
Order Granting Defendan ''Joint Motion to Sever And Final Judgment
Pagel
'
'
Evidence Motion for Summary Judgment and Fourth Motion for Traditional Summary
Judgment granting
tJe Sharpe Defendants summary judgment, are now final Orders, and all
relief not granted is hereby denied, with the costs of court being taxed against the party
incurring same.
Order Granting DefendantS' Joint Motion to Sever And Final Judgment
Page3
NO. 17-243228-10
PLAINTIFF,
~
Wan Fu Foods, Inc., Karen Chang,

Henry Chang, Chili Teh Mu,
J. Shelby Sharpe, and
The Law Offices of J. Shelby Sharpe,
DEFENDANTS
OFTARRI\1"1 COlJNTY, TEXAS
17TH JUDICIAL DISTIUCT
FIRST PARTIAL ORDER ON PLAINTIFF'S MOTION TO COMPEL

SAMES SHARPE TO RESPOND TO DISCOVERY REQUESTS
Came on to be heard on the 23rd day of September 2011 was Plaintiff's Motion to
On this date, the court
considered only the follo\"\ing discovery requests L.1. plabtiff's motion: Interrogatories 8 &10;
Request for Admissions 28 & 29; and Interrogatories 14-16.
Compel JAMES SHARPE to Respond to Discovery Requests.
After considering plabtiff s motion, the other papers on file with the court, the
response and arguments of counsel, the court hereby GRi\NTS plaintiff's motion in part and
DENIES it in part as follows:
(a) With respect to Interrogatories 14-16, the defendant's objections are sustained;
(b) With respect to Request for Admissions 28 & 29, the defendant's objections are overruled
and JA.MES SHARPE is to answer each of these discovery requests wit1.out new objections;
(c) With respect to Interrogatories 8 & 10, the defenda.TJ.t's objections are overruled except in
that the defendant is not required to "describe the matter involved". Otherwise, defenda.TJ.t
JAMES SHARPE is to answer each of these discovery requests wit.l-J.out new objections;
Defendant JA.l"VfES SRA..RPE's responses and answers must be served upon plaintiff vvithin 15.
days oft..i-te date of this order.
SIGNED on Szpt~mber :U , 2011.
~v~
P
-~
MAILED COPYTO AU. ATTORNEYS
ANDeRO~EPARTIESOF~D
9 /C)...7 /!I
INGJ1JTIGE
Court S Minutes Page 1 of 2

Transaction # 1Q.-[
1
NO. 17-243228-10
..
FRA..~CIS WING-SING
LN THE DISTRicr COURT
CR.-ili
Plaintiff
W A.~ FU FOODS, INC., KAREN CHANG

HENRY CHANG, cmH TEB "Ml.J1 J.
J. SHELBY SHA.RJ?E~ A:.~D THE LAw
OmnCESOF~SHELBYSBARPE
TAJL~T
A PROFESSIONAL CORPORATl:ON
Defendants
COu"NTY, TEXAS
171'H JUDICIAL DISTRICT
SECOND PARTIAL OnDER ON P.L..\.!1\'Tll!'F'S MOTION TO COD-1PEL

JAMES SflARPE TO RESPOND TO DISCOVERY REO!JESTS
Ceme on to be heard on t.I:ie 11th day ofNoveillber~ 2011 was .Plair.tiff's .:.1-fotion to Compel
J..a.MES SHARPE to Respond to Discovery Requests. After considering plaintiff's motion, the other
papers on file with the cou..-t, the response end arguments of counsel, the court hereby GR.&.......:rrs
plaintiff's motion in part and DR.~IES it in part as follows:
'-
(a)
With respect to Request for Admissions 39, 40, 41~ 42, 43> 44, 45, 46, 47~ 48, 52, 53, 54, 55,
56, 57,
58~ 59,
68, 69, 70, 71, 72) 73, 74,
75~
76, 77 78) a.TJ.d 79., the defendant,s objections are

1
sustained;
(b)
With respect to Request for Admissions 7, 16, 23~ 24. 34, 35) 36, 37, 38, 49, 50, 51~ 65, 66 1
67, and 80, the defenda.'1t's objections are overruled and JAMES SH.A..RPB is to answer each of
fh.P...se discovery requests without new objections;
Defendant JAMES SHARPE's responses and itr'.swers must be served upon plaintiff on or before
November 28,2011.
SIGNED this
I yi'J- day ofNovember, 2011.
~~
.P
MAiLED COPY TO AU. ATTORNEYS
ANll PRO SEM:ES OF RECORD

tl Jt..sl
7
71AITO
=H.J
hr~~~~p~~-r;
SIDING
CAUSE NO. 048-243228-lO
FRANCIS WING-SIN"G CHAK
I.t'\ THE DISTRJCT COURT
V.
'
::.<
WAN FU FOODS, IN" C., K.A.REN CHANG,

HENRY CHAl"JG, CHIH TEH MU,
J. SHELBY SRAAPE, AND THE LA\V
OFFICES OF J. SF..ELBY SH..t\RPE,
A PROFESSIONAL CORPOR.A.TIOi\
TA~~\TCOG~TY,TEXA.S
8,,
48TH .JuDICIAL DISTRICT
ORDER OF SEVERA...~CE
On the 17m day of October 20
came on to be considered Defendatits J. Shelby Sharpe
and The Law Offices of J. Shelby Sharpe's Motion
tO
Sever S11bject
1:0
Defenda.'1ts' Motion to
Strike Claim in Plaintiff's Second Supplemenral Petition.

The Court, having considered the motion, the pleadings on file, and t."iJ.e argwilents of
Counsel, is of the opinion that t."iJ.e motion should be granted.
IT IS THEREFORE ORDERED that Defenda.'1ts 1 Shelby Sharpe and the Law Offices
of J. Shelby Sharpe's Motion to Sever Subject to Defendants' Motion to Strike Claim in
Plaintiff's Second Supplemental Petition is GR.A.i'\YTED, and t:..he Court severs all of Plaintiff's
claims alleging violations of the Texas Uniform Fraudulem Transfer Act by t.L1.e Defendants and
orders the Clerk of the court to assign the severed claims a separate cause m:u-nber ac"ld include in
the severed cause the following pleadings on file in this action:
l. Plaintiff's Second Supplemental Petition filed Jw"le 23, 20 13.
2. Second Amended Original A..rJ.swer of J. Shelby Shfuue and The Law Offices of
J. Shelby Sharpe filed April20, 2012.
3. Defendants J. Shelby Sha.rpe and Tne Law Offices
OI
j.
Shelby Sharpe's First
Amended Motion to Sever fu"ld Abate filed October 14, 2013.
4. Original Answer of Wan Fu Foods, Inc., Karen Cr..a.:.1g and Henry Chang filed
February 2, 2010.
Cause No. 048-243228-10
Francis Wing-Sing Chan v. Wan Fu Foods, inc., eta!
?agel
5. Signed Order of Severance and. Abatement.

IT IS FURTHER ORDERED thai the severed cause of acrion shall be styled
Francis Wing-Sing Chan (TUFTA CLAIMS)
i'.
Wan Fu Foods, Inc., Karen Chang Henry Chang,
Chih Teh 2vfu, J Shelbv Sharpe, and The La:v.; Offlce of J ShelbJ.: Sharoe. A Professional
.;
J..,
.J
"'
'
Corporarion, and be assigned Cause ~umber _~_,

!_,.~"-?__..::k:::...>.;
""-'~:::..-c_:,_::"=::_:....:/==----~f~_:3L7
Signed this the J d a v of October 2013.
/\
!I~
/ '
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;t ;JrP~
David L Eva..'1s, Judge Presiding
Cause No. 048-243228-10

Francis Wing-Sing Chan v. Wan Fu Foods, inc.,
ec af
Page2
CAUSE NO. 048-243228-10
V.
ORDER DENYING PLAINTIFF'S FIRST SUPPLEMENT TO HIS OCTOBER 30, 2013,

MOTION TO RECONSIDER ORDER SEVERING HIS TUFTA CLAIMS
On the 24th day of July 2014 came on to be considered Plaintiff's First Supplement To
His October 30, 2013, Motion To Reconsider Order Severing His TUFTA Claims.
The Court. after having considered the motion, the evidence, and the arguments of
Counsel, has determined the motion should be Denied.
IT IS THEREFORE ORDERED that Plaintiff's First Supplement To His

October 30, 2013, Motion To Reconsider Order Severing His TUFTA Claims is DENIED.
Signed this the
.h5(day of July 2014.
David L. Evans, Judge Presiding
cc:
Mr. Marc H. Amin

Mr. John W. Proctor
Mr. Marshall Searcy
Ms. Lisa M. Holt
Via Fax No.

Via Fax No.
Via Fax No.
Via Fax No.
(888)
(817)
(817)
(972)
580-6175
870-2427
878-9280
383-2935
1687
FRANCIS WING-SING CHA.N

(TUFTA CLAIMS)
V.
WAN FU FOODS, INC., KAREN CHA."'G,

HENRY CHANG, J. SHELBY SHARPE
AND THE LAW OFFICES OF
J. SHELBY SHARPE,
IN THE DISTRICT C01JRT
TAR.R.k~T
COLl\TY, TEX.A.S
ORDEROFABATENffiNT
Whereas, an Order of Severance was signed on October 23, 2013, it is hereby ordered
that this case is abated pending further order of this court.
Signed this the
~y of0ctober2013.
David
Evans, Judge Presiding
p. 01
Jun 24 2014 16:15
Fax:8178842384
HRRANT COUNTY
CAUSE NO. 048-243~28-lO

.
v.
'
I.
IN THE
J?ISTRICT
cciuRT
,.
.
'
~
'
WAN. FU FOODS, INC., KAREN CHANG~

J. SHELBY SHARPE~ AND THE LAW
OFFI~ES OF J. SHELBY SHARPE,
TARRANT
COUNTY, iTEXAS
.
I
~
,
;:
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48TH JUPICIAL DISTftlCT

l
l
ORDER DENYING PLAINTIFF'S MOTION TO COMPEL

SUPPLEMENTAL DISCOVERY RESPONSES l
)
On the 1 ith day of June 2014 came on to be 6o~sidered Plaintlff.f Motion to Cpmpel
.,
Supp/.emental Discovery Responses.

. ' . The Court, after having considered the
motio~, ttU:
evidence,
Counsel, has dejcrmined the motion should be Denied.
the
argume~ts
of .
'
. IT IS THEREFORE ORDERED that Plaintiff1s: Motion to dpmpel Supplemental

'
'
l'
'
Discoyery Responses is DENIED. Any other relief ~eque~ed in conne~tion with Plaintiffs
.
Motiqn to Compel Supplemental Discovery Re$ponses ~d not granted hereij,. is hereby Deirled.
Signed this the
!IJ/l day
'
'
of June 2014. . .
'
'
David L. Evans~ Judge Presidi.g

!
cc:
Mr. Marc H. Amin

.Mr. John W. Proctor
Mr. Marshall Searcy
Ms. Lisa M. Holt
VIa Fax No.

Via Fax No.
Via Fax l'{o.
Via Fax No.
(888}:58Q .. fJ175
(817) 870-2427
(817} 878-P280
(972}. 383-7935
NO. 17-243228-10

PLAINTIFF~
~
Wan Fu Foods, Inc., Karen Chang,

Henry Chang, Chih Teh Mu~
J. Shelby Sharpe, and
The Law Offices of J. Shelby Sharpe,
A Professional Corporation,
DEFENDANTS
IN THE DISTRI CT COURT
OF TARRANT COUNTY, TEXAS
ORDER ON PLAINTIFF'S MOTION TO COMPEL

THE SHARPE DEFENDANTS AND THE CHANG DEFENDANTS
TO PROPERLY RESPOND TO PLAINTIFF'S THIRD SET OF DISCOVERY
On the 28th day of June. 2013, carne on to be heard Plaintifrs motion to compel
proper and complete discovery responses from Defendants (1) J. Shelby Sharpe, (2) The
Law Offices of J. Shelby Sharpe, A Professional Corporation, (3) Henry Chang, and
(4) Karen Chang (all four Defendants hereinafter are collectively referred to as
"Defendants") to Plaintifrs third set of discovery requests.
Upon consideration of the papers on file with the Court. the financial and net worth
related discovery propounded by Plaintiff on the Defendants, the Defendants' responses
and objections thereto, and the arguments of Counsel, the Court RULES and ORDERS as
follows with respect to the follm-ving of Plaintiffs third set of discovery requests to each
of the Defendants:
IT IS ORDERED that each Defendant will produce the following by August 13,
2013:
.~
(
1. Any financial statement or information delivered to third parties for any purpose
for the period beginning January 1, 2009, to the p_resent.

2. Any periodic financial statements generated from January 1, 2009, to the present,
Cause No. 01724322810
Francis Wing-Sing Chan v. Wan Fu Foods, lnc., et al
Page 1
regardless of whether they were provided to third parties. These periodic financial
statements would include statements reflecting net worth or account balances. It
does not include cash flow statements.
3. In the event there are no documents responsive to Numbers 1 & 2 for any year
since 2009, the Defendants will produce bank statements and brokerage
statements for that year.
All other relief requested by the parties with regard to this discovery is denied
without prejudice to the right of the Plaintiff to request additional discovery after
compliance with this order.
SIGNED this the
~y of July 2013.
Cause No. 017 243228-10
Francis Wing-Sing Chan v. Wan Fu Foods, Inc., eta/
Page 2
NO. 48243228-10
Plaintiff
v.
WAN FU FOODS, INC., KAREN CHANG
HENRY CHANG, CHIH TEH MU, J.
OFFICES OF J. SHELBY SHARPE
.A PROFESSIONAL CORPORATION
Defendants
ORDER DENYING PLAINTIFF'S MOTION TO

COMPEL PROPER RESPONSES FROM DEFENDANTS
TO PLAINTIFF'S TIDRD SET OF DISCOVERY
On September 19, 2013, came on to be heard the Plaintiff's "Motion To Compel Proper
Responses From Defendants To Plaintiff's Third Set Of Discovery" and the Court, having heard
such Motion and the argument of counsel, finds that the Motion should be and it is hereby
denied.
IT IS, THEREFORE, ORDERED that the Motion To Compel Proper Responses From
Defendants To Plaintiff's Third Set of Discovery is DENIED.
SIGNED
this~y of October, 2013.
PACElOFl
May
Fax:8178842384
TARRANT COUNTY
7 2014
p. 01
16:10
CAUSE NO. 048-24\3228410

:!
FRANCIS
WING~SING
CHAN
WAN FU FOODS, INC., KAREN CHAL"\10,
:i
.j
'
TARP.Am COUNT~, TEXAS

A PROFESSIONAL CORPORA.TION
:!
rN TIIB~DISTRICT COURT
v..
48TH niDICIAL DIStRICT

f
l,l
'
. . ' '
..
ORDER~: PLAINTlFF'S FIRST SUPPLEl)IENTAL MQTION TO

COMPEL & RESPONSE TO SHARPE DEFENDANTS' MQTION FOR
RECONSIDERATION OF TilE COURT,S JJJLY 24, 2013~ ORDER
CONCERNING
PLAINTIFF'S !BIRD SET OF DISCOVERY:
REQUESTS
'
;,
?
On the 30th day of April, 2014 came on to be cohsideied Plaintiff's first Supplemental
.
Matton to Compel & ResponNe tQ Sharpe Defendants' Motio~for Reconsidbration ofthe Court 1S
July 24, 2013, Order Concerning Plaintiff's Third Set
JfDis~overy Reques~ filed on

~
Septembers, 2013.
!
;
The Court, having .considered the motion, the e"idenae, and the arg~ents of Col,lnsel. is
.
.
I
oft opinion the motion should. be Denied.
j
.
'
'
j:
'
. lT lS THEREFORE ORDERED that Plaintiff's Fii;st

Supplement'pl
Motion to Compel
;.
.
:.
'
& Response to Sharpe Defendants' Motion for
'
Reconsi~eration ofthe CouJtl 's 'July 24, 2013,
. .. , ' ' : : . ". . :' ~: . . 'f '
'
'
' ' .
Order Concerning Plaintiff's Third Se{ojDiscovery Reque&#$ filed on Sept~mber 5, 2013! is

.
. :
!'
DENIED.
Signe.d this tile
M_aay o f f l ! ; - - 2014. ~.
David L. Evans~ Judge Pr~sidipg

. }
. ;~
~
'
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~
NO. 48-243228-10
Plaintiff
v.
WAN FU FOODS, INC., KAREN CHANG .
HENRY CHANG, CHIH THE MU, J.
~~~:~~~N~5~~~N
Defendants
48TH JlJDICIAL DISTRICT
ORDER GRANTING DEFENDANTS J. SHELBY SHARPE

~THE LAW OFFICES OF J. SHELBY SHARPE'S
MOTION
FOR PROTECTIVE ORDER TO LIMIT VIEWING
I
OF FINAN<IlAL DOCUMENTS TO PLAINTIFF'S COUNSEL ONLY
I
On this 17th day of October, 2013, came on to be heard Defendants J. Shelby Sharpe and
The Law Offices of J. Shelby Sharpe's (the "Sharpe Defendants") Motion for Protective Order to
Limit Viewing of Finanlcial Documents to Plaintiff's Counsel Only.
1
consider~on
Upon
of the Motion, Plaintiffs Response and the arguments of counsel, the
Court hereby GRANTS, in part, the Sharpe Defendants' Motion for Protective Order to Limit
Viewing of Financial Documents to Plaintiff's Counsel Only as follows:
1
IT IS THEREFORE ORDERED that all bank statements, profit and loss statements, or
other financial documefts previously or hereafter produced by the Sharpe Defendants (including
but not limited to any id all documents ordered to be produced after in camera review by the
.
Court:
i
1.
Shall not be filed with the Court, without prior Court approval; and,
2.
Shall bel returned to Sharpe the Sharpe Firm's counsel of record within fifteen
(15) days after the conclusion of this litigation.
I
Signed
this~y
of October, 2013.
Hon. David Evans, Judge Presiding
'
. '
it
il
. .
. :
. CAUSE NO. 048 ..243228-10
C~URT
IN 'rHE brsTRICT
.
,'
'
1
.
,
r
.
TARRANT COUNTY,\TEXAS
l
I
FRANCIS WING:-SING CHAN
.v. '
J. SHELBY SHARPE, AND TH.:E LAw
OFFICES OF. J. SHELBY SHARPE,
A P~OFESSIONAL CORPORATION
'II
i
::
4$1ll .fOPICIAL DIS'IlRICT

'
~
l
ORDER GRANTiNG ;:
NQ..EVIDENCE MOTION FOR SUMMARY -!UDGMENT (CHANG)
,
'
'.,
~
On
:.
'
the llr.h chty of June .2014 c~e on to be :consi4ered the No-kvidence Motion for
'
'
sum~ Judgment (Chang)
')
I,
filed on April4, 2014.
;:. The Court, after having .considered the motion, ~ evidence, m!td the arguments of .
'
~;,
Coum;el, has determined the motion should be GRANTED. :
'
~'
\;
i IT IS TiiEREFORE OIU)ERED that the No-EvidetJce Motion fo~ Summary Judgment
',j
.,.,
(Ch~g)
flled on.Aprll4, 2014, is GRANTED.
Signed this the~ cia ~f June 2014.
David L. Evans,!iJudge Presi~g

.
I
cc:
Mr. Marc H. Amin

.Mr.. John W. Proctor
Mr. Marshall Searcy
Ms. Lisa M. Holt
Via Fax No.

Via Fax No.
Via Fax No.
Via Fax No.
(888):,580-6175
(817/870-4427
(817/878-9,280
(912);383-f935
i;
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':: .
.
.: ..
v.
WAN .FU FOODS, INC., KAREN CHANG,
) . HENR)'CHANG,CHIH-TEHMU~
J. SHELBY SHARPE~ AND
LAW
. O~Fics OF J. SHELBY SHARPE,
nm
ORDER DENYING PLAINTIFF'S MolhoN ~oR. NEW~

.
. WITH
RESPECT TO THE CHANP
DE;.FENDANTS
l . ..
.
.
.
'
'
:.On the rsth day of October. 2014 came on to be ~nsi~ Plainti.t.As Mo~ion For New
..
'
:i: ..
(,
..
.. :
'
. The Court,
motiori -~ho~ld.be. D~nied.
. ):
::
~ . ..
. IT IS. THEREFORE ORl>ERED that Plaintif)s

.
j ..
..
!:
:
.
after having considered
the motion f:and the evidence, Jw :determined th6
. . .
.t
..
! ..
Trtal With Respect To The Chang Defondants.

. : ,
. ~.
....... To rh~ Chang Defenda~'ts

iS D NIED.
:Signed this the
day of November 201 .
M~tion For New~ Triai With Respe,c~

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t: .. .
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,.t:.
ce: . Mr. Marc H. Amin
::' Mr. John W.'Proctor

. .: Mr. Marshall' Searcy:
..,. Ms. Lisa M. :Holt
..
Via Fax No. (888) pB0-6._175

.via Fax No. (817) ~70-~427
Via Fax No. (817) ~78-~28&
: Via F~ No. (972) ~8.3-2935

l.
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BUSINESS AND COMMERCE CODE

TITLE 3. INSOLVENCY, FRAUDULENT TRANSFERS, AND FRAUD
CHAPTER 24. UNIFORM FRAUDULENT TRANSFER ACT
Sec.A24.001.AASHORT TITLE.
This chapter may be cited as the
Uniform Fraudulent Transfer Act.

1987.
Sec.A24.002.AADEFINITIONS.
In this chapter:
(1)AA"Affiliate" means:
(A)AAa
person who
directly
or
indirectly
owns,
controls, or holds with power to vote, 20 percent or more of the

outstanding voting securities of the debtor, other than a person
who holds the securities:
(i)AAas a fiduciary or agent without sole
discretionary power to vote the securities;
or
(ii)AAsolely to secure a debt, if the person

has not exercised the power to vote;
(B)AAa corporation 20 percent or more of whose
outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote, by the debtor or a person
who directly or indirectly owns, controls, or holds, with power to
vote, 20 percent or more of the outstanding voting securities of the
debtor, other than a person who holds the securities:
(i)AAas a fiduciary or agent without sole
power to vote the securities;
or
(ii)AAsolely to secure a debt, if the person

has not in fact exercised the power to vote;
(C)AAa person whose business is operated by the
debtor under a lease or other agreement, or a person substantially
all of whose assets are controlled by the debtor; or
(D)AAa person who operates the debtor s business
under a lease or other agreement or controls substantially all of
the debtor s assets.
(2)AA"Asset" means property of a debtor, but the term
does not include:
(A)AAproperty to the extent it is encumbered by a

valid lien;
(B)AAproperty to the extent it is generally exempt
under nonbankruptcy law;
or
(C)AAan interest in property held in tenancy by

the entireties to the extent it is not subject to process by a
creditor holding a claim against only one tenant, under the law of
another jurisdiction.
(3)AA"Claim"
whether
or
not
unliquidated,
the
means
right
fixed,
is
right
reduced
contingent,
to
to
payment
or
judgment,
matured,
property,
liquidated,
unmatured,
disputed,
undisputed, legal, equitable, secured, or unsecured.

(4)AA"Creditor"
means
person,
including
spouse,
minor, person entitled to receive court or administratively ordered

child support for the benefit of a child, or ward, who has a claim.
(5)AA"Debt" means a liability on a claim.
(6)AA"Debtor" means a person who is liable on a claim.
(7)AA"Insider" includes:
(A)AAif the debtor is an individual:
(i)AAa relative of the debtor or of a general
partner of the debtor;
(ii)AAa partnership in which the debtor is a
general partner;
(iii)AAa
general
partner
in
described in Subparagraph (ii) of this paragraph;
partnership
or
(iv)AAa corporation of which the debtor is a

director, officer, or person in control;
(B)AAif the debtor is a corporation:
(i)AAa director of the debtor;
(ii)AAan officer of the debtor;
(iii)AAa person in control of the debtor;
(iv)AAa partnership in which the debtor is a
general partner;
(v)AAa
general
partner
in
described in Subparagraph (iv) of this paragraph;

(vi)AAa
relative
of
or
general
director, officer, or person in control of the debtor;
partnership
partner,
(C)AAif the debtor is a partnership:

(i)AAa general partner in the debtor;
(ii)AAa relative of a general partner in, a
general partner of, or a person in control of the debtor;
(iii)AAanother
partnership
in
which
the
debtor is a general partner;

(iv)AAa
general
partner
in
described in Subparagraph (iii) of this paragraph;
partnership
or
(v)AAa person in control of the debtor;

(D)AAan affiliate, or an insider of an affiliate
as if the affiliate were the debtor; and
(E)AAa managing agent of the debtor.
(8)AA"Lien" means a charge against or an interest in
property
to
secure
payment
of
debt
or
performance
of
an
obligation, and includes a security interest created by agreement,

a
judicial
lien
obtained
by
legal
or
equitable
process
or
proceedings, a common-law lien, or a statutory lien.

(9)AA"Person"
means
an
individual,
partnership,
corporation, association, organization, government or governmental

subdivision or agency, business trust, estate, trust, or any other
legal or commercial entity.
(10)AA"Property" means anything that may be the subject
of ownership.
(11)AA"Relative"
means
an
individual
related
by
consanguinity within the third degree as determined by the common

law, a spouse, or an individual related to a spouse within the third
degree as so determined, and includes an individual in an adoptive
relationship within the third degree.
(12)AA"Transfer" means every mode, direct or indirect,
absolute or conditional, voluntary or involuntary, of disposing of
or parting with an asset or an interest in an asset, and includes
payment of money, release, lease, and creation of a lien or other
encumbrance.
The
term
does
not
include
transfer
under
disclaimer filed under Section 37A, Texas Probate Code, or Section

112.010, Property Code.
(13)AA"Valid
lien"
means
lien
that
is
effective
against the holder of a judicial lien subsequently obtained by
legal or equitable process or proceedings.

1987;
Acts 1993, 73rd Leg., ch. 846, Sec. 2, eff. Sept. 1, 1993;
Acts 1997, 75th Leg., ch. 911, Sec. 95, eff. Sept. 1, 1997.
Sec.A24.003.AAINSOLVENCY.
(a)
A debtor is insolvent if the
sum of the debtor s debts is greater than all of the debtor s assets
at a fair valuation.
(b)AAA debtor who is generally not paying the debtor s debts
as they become due is presumed to be insolvent.
(c)AARepealed by Acts 2013, 83rd Leg., R.S., Ch. 9, Sec. 11,
eff. September 1, 2013.
(d)AAAssets under this section do not include property that
has been transferred, concealed, or removed with intent to hinder,
delay, or defraud creditors or that has been transferred in a manner
making the transfer voidable under this chapter.
(e)AADebts under this section do not include an obligation to
the extent it is secured by a valid lien on property of the debtor
not included as an asset.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 9 (S.B. 847), Sec. 11, eff.
September 1, 2013.
Sec.A24.004.AAVALUE.
(a)
Value is given for a transfer or an
obligation if, in exchange for the transfer or obligation, property

is transferred or an antecedent debt is secured or satisfied, but
value does not include an unperformed promise made otherwise than
in
the
ordinary
course
of
promisor s
the
business
to
furnish
support to the debtor or another person.

(b)AAFor the purposes of Sections 24.005(a)(2) and 24.006 of
this code, a person gives a reasonably equivalent value if the
person acquires an interest of the debtor in an asset pursuant to a
regularly conducted, noncollusive foreclosure sale or execution of
a power of sale for the acquisition or disposition of the interest
of the debtor upon default under a mortgage, deed of trust, or
security agreement.
(c)AAA transfer is made for present value if the exchange
between the debtor and the transferee is intended by them to be
contemporaneous and is in fact substantially contemporaneous.
(d)AA"Reasonably
equivalent
value"
includes
without
limitation, a transfer or obligation that is within the range of

values for which the transferor would have sold the assets in an
arm s length transaction.
Sec.A24.005.AATRANSFERS FRAUDULENT AS TO PRESENT AND FUTURE

CREDITORS.
(a)
A transfer made or obligation incurred by a debtor
is fraudulent as to a creditor, whether the creditor s claim arose

before or within a reasonable time after the transfer was made or
the obligation was incurred, if the debtor made the transfer or
incurred the obligation:
(1)AAwith actual intent to hinder, delay, or defraud
any creditor of the debtor;
or
(2)AAwithout receiving a reasonably equivalent value in

exchange for the transfer or obligation, and the debtor:
(A)AAwas
engaged
or
was
about
to
engage
in
business or a transaction for which the remaining assets of the

debtor
were
transaction;
unreasonably
small
in
relation
to
the
business
or
or
(B)AAintended to incur, or believed or reasonably
should have believed that the debtor would incur, debts beyond the
debtor s ability to pay as they became due.
(b)AAIn determining actual intent under Subsection (a)(1) of
this section, consideration may be given, among other factors, to
whether:
(1)AAthe transfer or obligation was to an insider;
(2)AAthe debtor retained possession or control of the
property transferred after the transfer;
(3)AAthe transfer or obligation was concealed;
(4)AAbefore the transfer was made or obligation was
incurred, the debtor had been sued or threatened with suit;
(5)AAthe transfer was of substantially all the debtor s

assets;
(6)AAthe debtor absconded;
(7)AAthe debtor removed or concealed assets;
(8)AAthe value of the consideration received by the
debtor
was
reasonably
equivalent
to
the
value
of
the
asset
transferred or the amount of the obligation incurred;

(9)AAthe
debtor
was
insolvent
or
became
insolvent
shortly after the transfer was made or the obligation was incurred;
(10)AAthe transfer occurred shortly before or shortly
after a substantial debt was incurred;
and
(11)AAthe debtor transferred the essential assets of

the business to a lienor who transferred the assets to an insider of
the debtor.
Sec.A24.006.AATRANSFERS FRAUDULENT AS TO PRESENT CREDITORS.

(a)
transfer
made
or
obligation
incurred
by
debtor
is
fraudulent as to a creditor whose claim arose before the transfer

was made or the obligation was incurred if the debtor made the
transfer or incurred the obligation without receiving a reasonably
equivalent value in exchange for the transfer or obligation and the
debtor was insolvent at that time or the debtor became insolvent as
a result of the transfer or obligation.
(b)AAA
transfer
made
by
debtor
is
fraudulent
as
to
creditor whose claim arose before the transfer was made if the
transfer was made to an insider for an antecedent debt, the debtor
was insolvent at that time, and the insider had reasonable cause to
believe that the debtor was insolvent.
1987.
Sec.A24.007.AAWHEN
INCURRED.
TRANSFER
IS
MADE
OR
OBLIGATION
IS
For the purposes of this chapter:

(1)AAa transfer is made:
(A)AAwith
respect
to
an
asset
that
is
real
property other than a fixture, but including the interest of a

seller or purchaser under a contract for the sale of the asset, when
the transfer is so far perfected that a good faith purchaser of the
asset
from
the
debtor
against
whom
applicable
law
permits
the
transfer to be perfected cannot acquire an interest in the asset

that is superior to the interest of the transferee;
and
(B)AAwith respect to an asset that is not real

property or that is a fixture, when the transfer is so far perfected
that a creditor on a simple contract cannot acquire a judicial lien
otherwise than under this chapter that is superior to the interest
of the transferee;
(2)AAif
applicable
law
permits
the
transfer
to
be
perfected as provided in Subdivision (1) of this section and the

transfer is not so perfected before the commencement of an action
for
relief
under
this
chapter,
the
transfer
is
deemed
made
immediately before the commencement of the action;

(3)AAif applicable law does not permit the transfer to
be perfected as provided in Subdivision (1) of this section, the
transfer is made when it becomes effective between the debtor and
the transferee;
(4)AAa
transfer
is
not
made
acquired rights in the asset transferred;
until
the
debtor
has
and
(5)AAan obligation is incurred:

(A)AAif oral, when it becomes effective between
the parties;
or
(B)AAif evidenced by a writing, when the writing
executed by the obligor is delivered to or for the benefit of the

obligee.
1987.
Sec.A24.008.AAREMEDIES OF CREDITORS.
relief
against
transfer
or
obligation
(a)
under
In an action for
this
chapter,
creditor, subject to the limitations in Section 24.009 of this

code, may obtain:
(1)AAavoidance of the transfer or obligation to the
extent necessary to satisfy the creditor s claim;
(2)AAan attachment or other provisional remedy against

the
asset
transferred
or
other
property
of
the
transferee
in
accordance with the applicable Texas Rules of Civil Procedure and

the
Civil
Practice
proceedings;
and
Remedies
Code
relating
to
ancillary
or
(3)AAsubject to applicable principles of equity and in

accordance with applicable rules of civil procedure:
(A)AAan injunction against further disposition by
the debtor or a transferee, or both, of the asset transferred or of
other property;
(B)AAappointment of a receiver to take charge of
the asset transferred or of other property of the transferee;
(C)AAany
other
relief
the
or
circumstances
may
require.
(b)AAIf a creditor has obtained a judgment on a claim against
the debtor, the creditor, if the court so orders, may levy execution
on the asset transferred or its proceeds.
1987.
Sec.A24.009.AADEFENSES,
TRANSFEREE.
(a)
LIABILITY,
AND
PROTECTION
OF
A transfer or obligation is not voidable under
Section 24.005(a)(1) of this code against a person who took in good

faith
and
for
reasonably
equivalent
value
or
against
any
subsequent transferee or obligee.

(b)AAExcept as otherwise provided in this section, to the
extent a transfer is voidable in an action by a creditor under
Section
24.008(a)(1)
of
this
code,
the
creditor
may
recover
judgment for the value of the asset transferred, as adjusted under

Subsection (c) of this section, or the amount necessary to satisfy
the
creditor s
claim,
whichever
is
less.
The
judgment
may
be
entered against:
(1)AAthe first transferee of the asset or the person for
whose benefit the transfer was made;
or
(2)AAany subsequent transferee other than a good faith

transferee who took for value or from any subsequent transferee.
(c)(1)
Except
as
provided
by
Subdivision
(2)
of
this
subsection, if the judgment under Subsection (b) of this section is

based upon the value of the asset transferred, the judgment must be
for an amount equal to the value of the asset at the time of the
transfer, subject to adjustment as the equities may require.
(2)AAThe value of the asset transferred is not to be
adjusted to include the value of improvements made by a good faith
transferee, including:
(A)AAphysical additions or changes to the asset
transferred;
(B)AArepairs to the asset;
(C)AApayment of any tax on the asset;
(D)AApayment of any debt secured by a lien on the
asset that is superior or equal to the rights of a voiding creditor
under this chapter; and
(E)AApreservation of the asset.
(d)(1)
Notwithstanding
voidability
of
transfer
or
an
obligation under this chapter, a good faith transferee or obligee

is entitled, at the transferee s or obligee s election, to the
extent of the value given the debtor for the transfer or obligation,
to:
(A)AAa
lien,
prior
to
the
rights
of
voiding
creditor under this chapter, or a right to retain any interest in

the asset transferred;
(B)AAenforcement of any obligation incurred;
or
(C)AAa reduction in the amount of the liability on

the judgment.
(2)AANotwithstanding voidability of a transfer under
this chapter, to the extent of the value of any improvements made by
a good faith transferee, the good faith transferee is entitled to a
lien on the asset transferred prior to the rights of a voiding
creditor under this chapter
(e)AAA transfer is not voidable under Section 24.005(a)(2) or
Section 24.006 of this code if the transfer results from:
(1)AAtermination of a lease upon default by the debtor
when the termination is pursuant to the lease and applicable law;
or
(2)AAenforcement of a security interest in compliance
with Chapter 9 of this code.

(f)AAA transfer is not voidable under Section 24.006(b) of
this code:
(1)AAto the extent the insider gave new value to or for
the benefit of the debtor after the transfer was made unless the new
value was secured by a valid lien;
(2)AAif
made
in
the
ordinary
course
financial affairs of the debtor and the insider;

(3)AAif
made
pursuant
to
of
business
or
or
good-faith
effort
to
rehabilitate the debtor and the transfer secured present value

given for that purpose as well as an antecedent debt of the debtor.
Sec.A24.010.AAEXTINGUISHMENT OF CAUSE OF ACTION.
(a)
Except
as provided by Subsection (b) of this section, a cause of action

chapter is extinguished unless action is brought:
(1)AAunder Section 24.005(a)(1) of this code, within
four
years
incurred
after
or,
if
the
transfer
later,
within
was
made
or
the
one
year
after
obligation
the
transfer
was
or
obligation was or could reasonably have been discovered by the

claimant;
(2)AAunder Section 24.005(a)(2) or 24.006(a) of this
code,
within
four
years
obligation was incurred;
after
the
transfer
was
made
or
the
or
(3)AAunder Section 24.006(b) of this code, within one

year after the transfer was made.
(b)AAA cause of action on behalf of a spouse, minor, or ward
chapter is extinguished unless the action is brought:
(1)AAunder Section 24.005(a) or 24.006(a) of this code,
within two years after the cause of action accrues, or if later,
within
one
year
after
the
transfer
or
obligation
reasonably have been discovered by the claimant;
was
or
could
or
(2)AAunder Section 24.006(b) of this code within one

year after the date the transfer was made.
10
(c)AAIf a creditor entitled to bring an action under this

chapter is under a legal disability when a time period prescribed by
this section starts, the time of the disability is not included in
the period.
A disability that arises after the period starts does
not suspend the running of the period.
A creditor may not tack one
legal disability to another to extend the period.
For the purposes
of this subsection, a creditor is under a legal disability if the

creditor is:
(1)AAyounger
than
18
years
of
age,
regardless
of
whether the person is married; or

(2)AAof unsound mind.
Sec.A24.011.AASUPPLEMENTARY PROVISIONS.
Unless displaced by
the provisions of this chapter, the principles of law and equity,

including the law merchant and the law relating to principal and
agent,
estoppel,
laches,
fraud,
misrepresentation,
duress,
coercion, mistake, insolvency, or other validating or invalidating

cause, supplement its provisions.
1987.
Sec.A24.012.AAUNIFORMITY
This
chapter
shall
be
applied
OF
APPLICATION
and
construed
AND
to
CONSTRUCTION.
effectuate
its
general purpose to make uniform the law with respect to the subject
of this chapter among states enacting it.
1987.
Sec.A24.013.AACOSTS.
In any proceeding under this chapter,
the court may award costs and reasonable attorney s fees as are
equitable and just.
Added by Acts 2003, 78th Leg., ch. 420, Sec. 1, eff. Sept. 1, 2003.
11
1.002. Definitions.
Texas Statutes
Title 1. General Provisions
Chapter 1. Definitions And Other General Provisions
Subchapter A. Definitions And Purpose
1.002. Definitions
In this code:
(1)
"Affiliate" means a person who controls, is controlled by, or is under common control with
another person.
(2)
"Associate," when used to indicate a relationship with a person, means:

(A)
a domestic or foreign entity or organization for which the person:

(i)
is an officer or governing person; or
(ii)
beneficially owns, directly or indirectly, either individually or through an

affiliate, 10 percent or more of a class of voting ownership interests or
similar securities of the entity or organization;
(B)
a trust or estate in which the person has a substantial beneficial interest or for
which the person serves as trustee or in a similar fiduciary capacity;
(C)
the person's spouse or a relative of the person related by consanguinity or affinity

who resides with the person; or
(D)
a governing person or an affiliate or officer of the person.
(3)
"Association" means an entity governed as an association under Title 6 or 7. The term

includes a cooperative association, nonprofit association, and professional association.
(4)
"Assumed name" means a name adopted for use by a person. The term includes an
assumed name filed under Chapter 71, Business & Commerce Code.
(5)
"Business" means a trade, occupation, profession, or other commercial activity.
(6)
"Certificate of formation" means:

(A)
the document required to be filed with the filing officer under Chapter 3 to form a
filing entity; and
(B)
if appropriate, a restated certificate of formation and all amendments of an original

or restated certificate of formation.
(7)
"Certificated ownership interest" means an ownership interest of a domestic entity

represented by a certificate issued in bearer or registered form.
(8)
"Close corporation" means a for-profit corporation that elects to be governed as a close

corporation in accordance with Subchapter O, Chapter 21.
(9)
"Contribution" means a tangible or intangible benefit that a person transfers to an entity in

consideration for an ownership interest in the entity or otherwise in the person's capacity
as an owner or a member. The benefit includes cash, services rendered, a contract for
services to be performed, a promissory note or other obligation of a person to pay cash or
transfer property to the entity, or securities or other interests in or obligations of an entity,
but does not include cash or property received by the entity:
(10)
(A)
with respect to a promissory note or other obligation to the extent that the agreed
value of the note or obligation has previously been included as a contribution; or
(B)
that the person intends to be a loan to the entity.
"Conversion" means:
(A)
the continuance of a domestic entity as a non-code organization of any type;
(B)
the continuance of a non-code organization as a domestic entity of any type;
(C)
the continuance of a domestic entity of one type as a domestic entity of another

type;
(D)
the continuance of a domestic entity of one type as a foreign entity of the same
type that may be treated as a domestication, continuance, or transfer transaction
under the laws of the jurisdiction of formation of the foreign entity; or
(E)
the continuance of a foreign entity of one type as a domestic entity of the same
type that may be treated as a domestication, continuance, or transfer transaction
under the laws of the jurisdiction of formation of the foreign entity.
(11)
"Converted entity" means an organization resulting from a conversion.
(12)
"Converting entity" means an organization as the organization existed before the

organization's conversion.
(13)
"Cooperative" or "cooperative association" means an association governed as a
cooperative association under Chapter 251.

(14)
"Corporation" means an entity governed as a corporation under Title 2 or 7. The term

includes a for-profit corporation, nonprofit corporation, and professional corporation.
(15)
"Debtor in bankruptcy" means a person who is the subject of:

(A)
an order for relief under the United States bankruptcy laws (Title 11, United States
Code); or
(B)
a comparable order under a:

(i)
successor statute of general applicability; or
(ii)
federal or state law governing insolvency.
(16)
"Director" means an individual who serves on the board of directors of a foreign or

domestic corporation.
(17)
"Domestic" means, with respect to an entity, that the entity is formed under this code or
the entity's internal affairs are governed by this code.
(18)
"Domestic entity" means an organization formed under or the internal affairs of which are
governed by this code.
(19)
""Domestic entity subject to dissenters' rights" means a domestic entity the owners of
which have rights of dissent and appraisal under this code or the governing documents of
the entity.
(20)
"Effective date of this code" means January 1, 2006. The applicability of this code is
governed by Title 8.
(20a)
"Electronic transmission" means a form of communication that:

(A)
does not directly involve the physical transmission of paper;
(B)
creates a record that may be retained, retrieved, and reviewed by the recipient;
and
(C)
may be directly reproduced in paper form by the recipient through an automated

process.
(21)
"Entity" means a domestic entity or foreign entity.
(22)
"Filing entity" means a domestic entity that is a corporation, limited partnership, limited
liability company, professional association, cooperative, or real estate investment trust.
(23)
"Filing instrument" means an instrument, document, or statement that is required or

authorized by this code to be filed by or for an entity with the filing officer in accordance
with Chapter 4.
(24)
"Filing officer" means:

(A)
with respect to an entity other than a domestic real estate investment trust, the
secretary of state; or
(B)
with respect to a domestic real estate investment trust, the county clerk of the
county in which the real estate investment trust's principal office is located in this
state.
(25)
"For-profit corporation" means a corporation governed as a for-profit corporation under

Chapter 21.
(26)
"For-profit entity" means an entity other than a nonprofit entity.
(27)
"Foreign" means, with respect to an entity, that the entity is formed under, and the entity's
internal affairs are governed by, the laws of a jurisdiction other than this state.
(28)
"Foreign entity" means an organization formed under, and the internal affairs of which are
governed by, the laws of a jurisdiction other than this state.
(29)
"Foreign filing entity" means a foreign entity, other than a foreign limited liability
partnership, that registers or is required to register as a foreign entity under Chapter 9.
(30)
"Foreign governmental authority" means a governmental official, agency, or instrumentality

of a jurisdiction other than this state.
(31)
"Foreign nonfiling entity" means a foreign entity that is not a foreign filing entity.
(32)
"Fundamental business transaction" means a merger, interest exchange, conversion, or

sale of all or substantially all of an entity's assets.
(33)
"General partner" means:
(34)
(35)
(A)
each partner in a general partnership; or
(B)
a person who is admitted to a limited partnership as a general partner in

accordance with the governing documents of the limited partnership.
"General partnership" means a partnership governed as a general partnership under

Chapter 152. The term includes a general partnership registered as a limited liability
partnership.
(A)
"Governing authority" means a person or group of persons who are entitled to

manage and direct the affairs of an entity under this code and the governing
documents of the entity, except that if the governing documents of the entity or this
code divide the authority to manage and direct the affairs of the entity among
different persons or groups of persons according to different matters, "governing

authority" means the person or group of persons entitled to manage and direct the
affairs of the entity with respect to a matter under the governing documents of the
entity or this code. The term includes:
(B)
(36)
(i)
the board of directors of a corporation or other persons authorized to

perform the functions of the board of directors of a corporation;
(ii)
the general partners of a general partnership or limited partnership;
(iii)
the managers of a limited liability company that is managed by managers;
(iv)
the members of a limited liability company that is managed by members

who are entitled to manage the company;
(v)
the board of directors of a cooperative association; and
(vi)
the trust managers of a real estate investment trust.
The term does not include an officer who is acting in the capacity of an officer.
"Governing documents" means:

(A)
(B)
in the case of a domestic entity:

(i)
the certificate of formation for a domestic filing entity or the document or

agreement under which a domestic nonfiling entity is formed; and
(ii)
the other documents or agreements adopted by the entity under this code to
govern the formation or the internal affairs of the entity; or
in the case of a foreign entity, the instruments, documents, or agreements adopted

under the law of its jurisdiction of formation to govern the formation or the internal
affairs of the entity.
(37)
"Governing person" means a person serving as part of the governing authority of an entity.
(38)
"Individual" means a natural person.
(39)
"Insolvency" means the inability of a person to pay the person's debts as they become due
in the usual course of business or affairs.
(40)
"Insolvent" means a person who is unable to pay the person's debts as they become due
in the usual course of business or affairs.
(41)
"Interest exchange" means the acquisition of an ownership or membership interest in a

domestic entity as provided by Subchapter B, Chapter 10. The term does not include a
merger or conversion.
(42)
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. The
term includes corresponding provisions of subsequent federal tax laws.
(43)
"Jurisdiction of formation" means:

(A)
in the case of a domestic filing entity, this state;
(B)
in the case of a foreign entity for which a certificate of formation or similar

organizational instrument is filed in connection with its formation, the jurisdiction in
which the entity's certificate of formation or similar organizational instrument is
filed; or
(C)
in the case of a domestic nonfiling entity or a foreign entity for which a certificate of
formation or similar organizational instrument is not filed in connection with its
formation:
(i)
the jurisdiction the laws of which are chosen in the entity's governing
documents to govern its internal affairs if that jurisdiction bears a
reasonable relation to the owners or members or to the entity's business
and affairs under the principles of this state that otherwise would apply to a
contract among the owners or members; or
(ii)
if Subparagraph (i) does not apply, the jurisdiction in which the entity has its
chief executive office.
(44)
"Law" means, unless the context requires otherwise, both statutory and common law.
(45)
"License" means a license, certificate of registration, or other legal authorization.
(46)
"Limited liability company" means an entity governed as a limited liability company under
Title 3 or 7. The term includes a professional limited liability company.
(47)
"Limited liability limited partnership" means a partnership governed as a limited liability

partnership and a limited partnership under Title 4.
(48)
"Limited liability partnership" means a partnership governed as a limited liability

partnership under Title 4.
(49)
"Limited partner" means a person who has been admitted to a limited partnership as a
limited partner as provided by:
(50)
(A)
in the case of a domestic limited partnership, Chapter 153; or
(B)
in the case of a foreign limited partnership, the laws of its jurisdiction of formation.
"Limited partnership" means a partnership that is governed as a limited partnership under

Title 4 and that has one or more general partners and one or more limited partners. The
term includes a limited partnership registered as a limited liability limited partnership.
(51)
"Manager" means a person designated as a manager of a limited liability company that is

not managed by members of the company.
(52)
"Managerial official" means an officer or a governing person.
(53)
"Member" means:
(A)
in the case of a limited liability company, a person who is a member or has been
admitted as a member in the limited liability company under its governing
documents;
(B)
in the case of a nonprofit corporation, a person who has membership rights in the
nonprofit corporation under its governing documents;
(C)
in the case of a cooperative association, a member of a nonshare or share

association;
(D)
in the case of a nonprofit association, a person who has membership rights in the
nonprofit association under its governing documents; or
(E)
in the case of a professional association, a person who has membership rights in

the professional association under its governing documents.
(54)
"Membership interest" means a member's interest in an entity. With respect to a limited

liability company, the term includes a member's share of profits and losses or similar items
and the right to receive distributions, but does not include a member's right to participate in
management.
(55)
"Merger" means:
(A)
the division of a domestic entity into two or more new domestic entities or other
organizations or into a surviving domestic entity and one or more new domestic or
foreign entities or non-code organizations; or
(B)
the combination of one or more domestic entities with one or more domestic
entities or non-code organizations resulting in:
(i)
one or more surviving domestic entities or non-code organizations;
(ii)
the creation of one or more new domestic entities or non-code

organizations; or
(iii)
one or more surviving domestic entities or non-code organizations and the

creation of one or more new domestic entities or non-code organizations.
(55a)
"National securities exchange" means an exchange registered as a national securities

exchange under Section 6, Securities Exchange Act of 1934 ( 15 U.S.C. Section 78f ).
(56)
"Non-code organization" means an organization other than a domestic entity.
(56a)
"Non-United States entity" means a foreign entity formed under, and the internal affairs of
which are governed by, the laws of a non-United States jurisdiction.
(56b)
"Non-United States jurisdiction" means a foreign country or other foreign jurisdiction that is
not the United States or a state of the United States.
(57)
"Nonfiling entity" means a domestic entity that is not a filing entity. The term includes a
domestic general partnership and nonprofit association.
(58)
"Nonprofit association" means an association governed as a nonprofit association under

Chapter 252.
(59)
"Nonprofit corporation" means a corporation governed as a nonprofit corporation under

Chapter 22.
(60)
"Nonprofit entity" means an entity that is a nonprofit corporation, nonprofit association, or

other entity that is organized solely for one or more of the purposes specified by Section
2.002.
(61)
"Officer" means an individual elected, appointed, or designated as an officer of an entity by

the entity's governing authority or under the entity's governing documents.
(62)
"Organization" means a corporation, limited or general partnership, limited liability

company, business trust, real estate investment trust, joint venture, joint stock company,
cooperative, association, bank, insurance company, credit union, savings and loan
association, or other organization, regardless of whether the organization is for-profit,
nonprofit, domestic, or foreign.
(63)
"Owner," for purposes of Title 1, 7, or 8, means:

(A)
with respect to a foreign or domestic for-profit corporation or real estate investment

trust, a shareholder;
(B)
with respect to a foreign or domestic partnership, a partner;
(C)
with respect to a foreign or domestic limited liability company or professional

association, a member; or
(D)
with respect to another foreign or domestic entity, an owner of an equity interest in

that entity.
(64)
"Ownership interest" means an owner's interest in an entity. The term includes the owner's
share of profits and losses or similar items and the right to receive distributions. The term
does not include an owner's right to participate in management.
(65)
"Parent" means an organization that, directly or indirectly through or with one or more of its
subsidiaries:
(A)
owns at least 50 percent of the outstanding ownership or membership interests of

another organization; or
(B)
possesses at least 50 percent of the voting power of the owners or members of

another organization.
(66)
"Partner" means a limited partner or general partner.
(67)
"Partnership" means an entity governed as a partnership under Title 4.
(68)
"Partnership interest" means a partner's interest in a partnership. The term includes the
partner's share of profits and losses or similar items and the right to receive distributions.
The term does not include a partner's right to participate in management.
(69)
"Party to the merger" means a domestic entity or non-code organization that under a plan
of merger is divided or combined by a merger. The term does not include a domestic entity
or non-code organization that is not to be divided or combined into or with one or more
domestic entities or non-code organizations, regardless of whether ownership interest of
the entity are to be issued under the plan of merger.
(69a)
"Period of duration," in reference to when a domestic entity is required to wind up its

business and affairs:
(A)
(B)
means:
(i)
a specified term or period of time, such as a specified number of months or

years; or
(ii)
a period that expires as of a specified time or date; and
does not include:

(i)
a period that expires or whose expiration is made contingent on the

occurrence of a future event or fact, other than the passage of time or the
occurrence of a specified time or date; or
(ii)
a period specified to be perpetual.
(69b)
"Person" means an individual or a corporation, partnership, limited liability company,

business trust, trust, association, or other organization, estate, government or
governmental subdivision or agency, or other legal entity.
(69c)
"Plan of conversion" means a document that conforms with the requirements of Section
10.103.
(69d)
"Plan of exchange" means a document that conforms with the requirements of Section
10.052.
(69e)
"Plan of merger" means a document that conforms with the requirements of Sections
10.002 and 10.003.
(70)
"President" means the:

(A)
individual designated as president of an entity under the entity's governing

documents; or
(B)
officer or committee of persons authorized to perform the functions of the principal

executive officer of an entity without regard to the designated name of the officer or
committee.
(71)
"Professional association" has the meaning assigned by Section 301.003.
(72)
"Professional corporation" has the meaning assigned by Section 301.003.
(73)
"Professional entity" has the meaning assigned by Section 301.003.
(74)
"Professional individual" has the meaning assigned by Section 301.003.
(75)
"Professional limited liability company" has the meaning assigned by Section 301.003.
(76)
"Professional service" has the meaning assigned by Section 301.003.
(77)
"Property" includes tangible and intangible property and an interest in that property.
(78)
"Real estate investment trust" means an entity governed as a real estate investment trust
under Title 5.
(79)
"Secretary" means the:

(A)
individual designated as secretary of an entity under the entity's governing

documents; or
(B)
officer or committee of persons authorized to perform the functions of secretary of

an entity without regard to the designated name of the officer or committee.
(80)
"Share" means a unit into which the ownership interest in a for-profit corporation,
professional corporation, real estate investment trust, or professional association is
divided, regardless of whether the share is certificated or uncertificated.
(81)
"Shareholder" or "holder of shares" means:

(A)
the person in whose name shares issued by a for-profit corporation, professional

corporation, or real estate investment trust are registered in the share transfer
records maintained by the for-profit corporation, professional corporation, or real
estate investment trust; or
(B)
the beneficial owner of shares issued by a for-profit corporation, whose shares are
held in a voting trust or by a nominee on the beneficial owner's behalf, to the extent
of the rights granted by a nominee statement on file with the for-profit corporation
in accordance with Sections 21.201(b) and (c).
(82)
"Signature" means any symbol executed or adopted by a person with present intention to
authenticate a writing. Unless the context requires otherwise, the term includes a digital
signature, an electronic signature, and a facsimile of a signature.
(82a)
"Social purposes" means one or more purposes of a for-profit corporation that are
specified in the corporation's certificate of formation and consist of promoting one or more
positive impacts on society or the environment or of minimizing one or more adverse
impacts of the corporation's activities on society or the environment. Those impacts may
include:
(A)
providing low-income or underserved individuals or communities with beneficial

products or services;
(B)
promoting economic opportunity for individuals or communities beyond the creation

of jobs in the normal course of business;
(C)
preserving the environment;
(D)
improving human health;
(E)
promoting the arts, sciences, or advancement of knowledge;
(F)
increasing the flow of capital to entities with a social purpose; and
(G)
conferring any particular benefit on society or the environment.
(83)
"Subscriber" means a person who agrees with or makes an offer to an entity to purchase
by subscription an ownership interest in the entity.
(84)
"Subscription" means an agreement between a subscriber and an entity, or a written offer

made by a subscriber to an entity before or after the entity's formation, in which the
subscriber agrees or offers to purchase a specified ownership interest in the entity.
(85)
"Subsidiary" means an organization for which another organization, either directly or

indirectly through or with one or more of its other subsidiaries:
(86)
(A)
owns at least 50 percent of the outstanding ownership or membership interests of

the organization; or
(B)
possesses at least 50 percent of the voting power of the owners or members of the
organization.
"Treasurer" means the:
(87)
(88)
(89)
(A)
individual designated as treasurer of an entity under the entity's governing

documents; or
(B)
officer or committee of persons authorized to perform the functions of treasurer of

an entity without regard to the designated name of the officer or committee.
"Uncertificated ownership interest" means an ownership interest in a domestic entity that is

not represented by an instrument and is transferred by:
(A)
amendment of the governing documents of the entity; or
(B)
registration on books maintained by or on behalf of the entity for the purpose of

registering transfers of ownership interests.
"Vice president" means the:

(A)
individual designated as vice president of an entity under the governing documents

of the entity; or
(B)
officer or committee of persons authorized to perform the functions of the president

of the entity on the death, absence, or resignation of the president or on the
inability of the president to perform the functions of office without regard to the
designated name of the officer or committee.
"Writing" or "written" means an expression of words, letters, characters, numbers,

symbols, figures, or other textual information that is inscribed on a tangible medium or that
is stored in an electronic or other medium that is retrievable in a perceivable form. Unless
the context requires otherwise, the term:
(A)
includes stored or transmitted electronic data, electronic transmissions, and

reproductions of writings; and
(B)
does not include sound or video recordings of speech other than transcriptions that
are otherwise writings.

History. Amended by Acts 2013, 83rd Leg. - Regular Session, ch. 100, Sec. 1, eff. 9/1/2013.
Amended by Acts 2011, 82nd Leg., R.S., Ch. 139, Sec. 1, eff. September 1, 2011.
Amended by Acts 2009, 81st Leg., R.S., Ch. 84, Sec. 1, eff. September 1, 2009.
Amended by Acts 2007, 80th Leg., R.S., Ch. 885, Sec. 2.07, eff. April 1, 2009.
Amended by Acts 2007, 80th Leg., R.S., Ch. 688, Sec. 1, eff. September 1, 2007.
Amended by Acts 2005, 79th Leg., Ch. 64, Sec. 1, eff. January 1, 2006.
21.223. Limitation Of Liability For Obligations.

Texas Statutes
21.223. Limitation Of Liability For Obligations
(a)
(b)
A holder of shares, an owner of any beneficial interest in shares, or a subscriber for

shares whose subscription has been accepted, or any affiliate of such a holder, owner, or
subscriber or of the corporation, may not be held liable to the corporation or its obligees
with respect to:
(1)
the shares, other than the obligation to pay to the corporation the full amount of
consideration, fixed in compliance with Sections 21.157-21.162, for which the
shares were or are to be issued;
(2)
any contractual obligation of the corporation or any matter relating to or arising

from the obligation on the basis that the holder, beneficial owner, subscriber, or
affiliate is or was the alter ego of the corporation or on the basis of actual or
constructive fraud, a sham to perpetrate a fraud, or other similar theory; or
(3)
any obligation of the corporation on the basis of the failure of the corporation to
observe any corporate formality, including the failure to:
(A)
comply with this code or the certificate of formation or bylaws of the

corporation; or
(B)
observe any requirement prescribed by this code or the certificate of

formation or bylaws of the corporation for acts to be taken by the
corporation or its directors or shareholders.
Subsection (a)(2) does not prevent or limit the liability of a holder, beneficial owner,
subscriber, or affiliate if the obligee demonstrates that the holder, beneficial owner,
subscriber, or affiliate caused the corporation to be used for the purpose of perpetrating
and did perpetrate an actual fraud on the obligee primarily for the direct personal benefit of
the holder, beneficial owner, subscriber, or affiliate.

21.224. Preemption Of Liability.

Texas Statutes
21.224. Preemption Of Liability
The liability of a holder, beneficial owner, or subscriber of shares of a corporation, or any affiliate
of such a holder, owner, or subscriber or of the corporation, for an obligation that is limited by
Section 21.223 is exclusive and preempts any other liability imposed for that obligation under
common law or otherwise.
History. Amended by Acts 2009, 81st Leg., R.S., Ch. 84, Sec. 34, eff. September 1, 2009.
21.563. Closely Held Corporation.

Texas Statutes
Subchapter L. Derivative Proceedings
21.563. Closely Held Corporation
(a)
In this section, "closely held corporation" means a corporation that has:

(1)
fewer than 35 shareholders; and
(2)
no shares listed on a national securities exchange or regularly quoted in an overthe-counter market by one or more members of a national securities association.
(b)
Sections 21.552-21.559 do not apply to a closely held corporation.
(c)
If justice requires:
(1)
a derivative proceeding brought by a shareholder of a closely held corporation may

be treated by a court as a direct action brought by the shareholder for the
shareholder's own benefit; and
(2)
a recovery in a direct or derivative proceeding by a shareholder may be paid

directly to the plaintiff or to the corporation if necessary to protect the interests of
creditors or other shareholders of the corporation.

Sec. 16.004. FOUR-YEAR LIMITATIONS PERIOD. (a) A person

must bring suit on the following actions not later than four
years after the day the cause of action accrues:
(1) specific performance of a contract for the
conveyance of real property;
(2) penalty or damages on the penal clause of a bond
to convey real property;
(3) debt;
(4) fraud; or
(5) breach of fiduciary duty.
(b) A person must bring suit on the bond of an executor,
administrator, or guardian not later than four years after the
day of the death, resignation, removal, or discharge of the
executor, administrator, or guardian.
(c) A person must bring suit against his partner for a
settlement of partnership accounts, and must bring an action on
an open or stated account, or on a mutual and current account
concerning the trade of merchandise between merchants or their
agents or factors, not later than four years after the day that
the cause of action accrues. For purposes of this subsection,
the cause of action accrues on the day that the dealings in
which the parties were interested together cease.
Acts 1985, 69th Leg., ch. 959, Sec. 1, eff. Sept. 1, 1985.
Amended by Acts 1999, 76th Leg., ch. 950, Sec. 1, eff. Aug. 30,
1999.
41.009. Bifurcated Trial.

Texas Statutes
Civil Practice and Remedies Code
Title 2. Trial, Judgment, And Appeal
Subtitle C. Judgments
Chapter 41. Damages
41.009. Bifurcated Trial

(a)
On motion by a defendant, the court shall provide for a bifurcated trial under this section. A
motion under this subsection shall be made prior to voir dire examination of the jury or at a
time specified by a pretrial court order issued under Rule 166, Texas Rules of Civil
Procedure.
(b)
In an action with more than one defendant, the court shall provide for a bifurcated trial on
motion of any defendant.
(c)
(d)
In the first phase of a bifurcated trial, the trier of fact shall determine:
(1)
liability for compensatory and exemplary damages; and
(2)
the amount of compensatory damages.
If liability for exemplary damages is established during the first phase of a bifurcated trial,
the trier of fact shall, in the second phase of the trial, determine the amount of exemplary
damages to be awarded, if any.
Cite as Tex. Civ. Prac. and Rem. Code 41.009
History. Amended by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
41.011. Evidence Relating To Amount Of Exemplary Damages.

Texas Statutes
Civil Practice and Remedies Code
Title 2. Trial, Judgment, And Appeal
Subtitle C. Judgments
Chapter 41. Damages
41.011. Evidence Relating To Amount Of Exemplary Damages

(a)
In determining the amount of exemplary damages, the trier of fact shall consider evidence,
if any, relating to:
(1)
the nature of the wrong;
(2)
the character of the conduct involved;
(3)
the degree of culpability of the wrongdoer;
(4)
the situation and sensibilities of the parties concerned;
(5)
the extent to which such conduct offends a public sense of justice and propriety;
and
(6)
(b)
the net worth of the defendant.
Evidence that is relevant only to the amount of exemplary damages that may be awarded
is not admissible during the first phase of a bifurcated trial.
Cite as Tex. Civ. Prac. and Rem. Code 41.011
History. Added by Acts 1995, 74th Leg., ch. 19, Sec. 1, eff. Sept. 1, 1995.
CIVIL PRACTICE AND REMEDIES CODE

TITLE 7. ALTERNATE METHODS OF DISPUTE RESOLUTION
CHAPTER 154. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 154.001. DEFINITIONS. In this chapter:
(1) "Court" includes an appellate court, district
court, constitutional county court, statutory county court,
family law court, probate court, municipal court, or justice of
the peace court.
(2) "Dispute resolution organization" means a private
profit or nonprofit corporation, political subdivision, or
public corporation, or a combination of these, that offers
alternative dispute resolution services to the public.
Added by Acts 1987, 70th Leg., ch. 1121, Sec. 1, eff. June 20,
1987.
Sec. 154.002. POLICY. It is the policy of this state to

encourage the peaceable resolution of disputes, with special
consideration given to disputes involving the parent-child
relationship, including the mediation of issues involving
conservatorship, possession, and support of children, and the
early settlement of pending litigation through voluntary
settlement procedures.
1987.
Sec. 154.003. RESPONSIBILITY OF COURTS AND COURT

ADMINISTRATORS. It is the responsibility of all trial and
appellate courts and their court administrators to carry out the
policy under Section 154.002.
1987.
SUBCHAPTER B. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

Sec. 154.021. REFERRAL OF PENDING DISPUTES FOR ALTERNATIVE
DISPUTE RESOLUTION PROCEDURE. (a) A court may, on its own
motion or the motion of a party, refer a pending dispute for
resolution by an alternative dispute resolution procedure
including:
(1) an alternative dispute resolution system
established under Chapter 26, Acts of the 68th Legislature,
Regular Session, 1983 (Article 2372aa, Vernon's Texas Civil
Statutes);
(2) a dispute resolution organization; or
(3) a nonjudicial and informally conducted forum for
the voluntary settlement of citizens' disputes through the
intervention of an impartial third party, including those
alternative dispute resolution procedures described under this
subchapter.
(b) The court shall confer with the parties in the
determination of the most appropriate alternative dispute
resolution procedure.
(c) Except as provided by agreement of the parties, a
court may not order mediation in an action that is subject to
the Federal Arbitration Act (9 U.S.C. Sections 1-16).
1987.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 621 (H.B. 1083), Sec. 1,
eff. June 19, 2009.
Sec. 154.022. NOTIFICATION AND OBJECTION. (a) If a court

determines that a pending dispute is appropriate for referral
under Section 154.021, the court shall notify the parties of its
determination.
(b) Any party may, within 10 days after receiving the
notice under Subsection (a), file a written objection to the
referral.
(c) If the court finds that there is a reasonable basis
for an objection filed under Subsection (b), the court may not
refer the dispute under Section 154.021.
1987.
Sec. 154.023. MEDIATION. (a) Mediation is a forum in

which an impartial person, the mediator, facilitates
communication between parties to promote reconciliation,
settlement, or understanding among them.
(b) A mediator may not impose his own judgment on the
issues for that of the parties.
(c) Mediation includes victim-offender mediation by the
Texas Department of Criminal Justice described in Article 56.13,
Code of Criminal Procedure.
1987. Amended by Acts 2001, 77th Leg., ch. 1034, Sec. 12, eff.
Sept. 1, 2001.
Sec. 154.024. MINI-TRIAL. (a) A mini-trial is conducted

under an agreement of the parties.
(b) Each party and counsel for the party present the
position of the party, either before selected representatives
for each party or before an impartial third party, to define the
issues and develop a basis for realistic settlement
negotiations.
(c) The impartial third party may issue an advisory
opinion regarding the merits of the case.
(d) The advisory opinion is not binding on the parties

unless the parties agree that it is binding and enter into a
written settlement agreement.
1987.
Sec. 154.025. MODERATED SETTLEMENT CONFERENCE. (a) A

moderated settlement conference is a forum for case evaluation
and realistic settlement negotiations.
position of the party before a panel of impartial third parties.
(c) The panel may issue an advisory opinion regarding the
liability or damages of the parties or both.
(d) The advisory opinion is not binding on the parties.
1987.
Sec. 154.026. SUMMARY JURY TRIAL. (a) A summary jury

trial is a forum for early case evaluation and development of
realistic settlement negotiations.
position of the party before a panel of jurors.
(c) The number of jurors on the panel is six unless the
parties agree otherwise.
(d) The panel may issue an advisory opinion regarding the
liability or damages of the parties or both.
(e) The advisory opinion is not binding on the parties.
1987.
Sec. 154.027. ARBITRATION. (a) Nonbinding arbitration is

a forum in which each party and counsel for the party present
the position of the party before an impartial third party, who

renders a specific award.
(b) If the parties stipulate in advance, the award is
binding and is enforceable in the same manner as any contract
obligation. If the parties do not stipulate in advance that the
award is binding, the award is not binding and serves only as a
basis for the parties' further settlement negotiations.
1987.
Sec. 154.028. MEDIATION FOLLOWING APPLICATION FOR

EXPEDITED FORECLOSURE. (a) A citation for expedited foreclosure
may be served in the manner provided by Rule 106 or 736, Texas
Rules of Civil Procedure. Following the filing of a response to
an application for an expedited foreclosure proceeding under
Rule 736.5, Texas Rules of Civil Procedure, a court may, in the
court's discretion, conduct a hearing to determine whether to
order mediation. A court may not order mediation without
conducting a hearing. The petitioner or respondent may request
a hearing to determine whether mediation is necessary or whether
an application is defective.
(b) A hearing under Subsection (a) may not be conducted
before the expiration of the respondent's deadline to file a
response.
(c) Subject to Subsection (d), a hearing under Subsection
(a) may be conducted by telephone.
(d) Not later than the 10th day before the date of a
hearing under Subsection (a), the court shall send notice of the
hearing to the parties concerning whether the hearing will be
conducted by telephone and, if applicable, instructions for
contacting the court and attending the hearing by telephone.
(e) At a hearing under Subsection (a), the court must
consider any objections to the referral of the case to
mediation.
(f) If the court orders the case to mediation, the

mediation must be conducted before the expiration of any
deadline imposed by Rule 736, Texas Rules of Civil Procedure.
(g) If the parties to a case that has been ordered to
mediation are unable to agree on the appointment of a mediator,
the court may appoint a mediator. If a mediator is appointed by
the court, the court shall provide all parties with the name of
the chosen mediator at the mediation hearing if the parties are
unable to agree to a mediator at that hearing.
(h) A mediator's fee shall be divided equally between the
parties.
(i) The parties may agree to waive the mediation process.
(j) The court may not conduct a hearing under this section
if the applicant has served the citation in compliance with Rule
106, Texas Rules of Civil Procedure, and a response to the
application has not been filed before the deadline provided by
Rule 736, Texas Rules of Civil Procedure.
(k) If a respondent fails to attend a mediation hearing
after notice in accordance with Subsection (d), the court:
(1) may not order mediation; and
(2) shall grant or deny the petitioner's motion for
default order under Rule 736.7, Texas Rules of Civil Procedure.
(l) If a respondent attends a hearing and mediation is
ordered, any mediation must take place not later than the 29th
day after the date the petitioner filed a motion for default
order.
(m) Notwithstanding Section 22.004, Government Code, the
supreme court may not amend or adopt rules in conflict with this
section.
Added by Acts 2013, 83rd Leg., R.S., Ch. 1044 (H.B. 2978), Sec.
2, eff. June 14, 2013.
SUBCHAPTER C. IMPARTIAL THIRD PARTIES
Sec. 154.051. APPOINTMENT OF IMPARTIAL THIRD PARTIES. (a)

If a court refers a pending dispute for resolution by an
alternative dispute resolution procedure under Section 154.021,
the court may appoint an impartial third party to facilitate the
procedure.
(b) The court may appoint a third party who is agreed on
by the parties if the person qualifies for appointment under
this subchapter.
(c) The court may appoint more than one third party under
this section.
1987.
Sec. 154.052. QUALIFICATIONS OF IMPARTIAL THIRD PARTY.

(a) Except as provided by Subsections (b) and (c), to qualify
for an appointment as an impartial third party under this
subchapter a person must have completed a minimum of 40
classroom hours of training in dispute resolution techniques in
a course conducted by an alternative dispute resolution system
or other dispute resolution organization approved by the court
making the appointment.
(b) To qualify for an appointment as an impartial third
party under this subchapter in a dispute relating to the parentchild relationship, a person must complete the training required
by Subsection (a) and an additional 24 hours of training in the
fields of family dynamics, child development, and family law.
(c) In appropriate circumstances, a court may in its
discretion appoint a person as an impartial third party who does
not qualify under Subsection (a) or (b) if the court bases its
appointment on legal or other professional training or
experience in particular dispute resolution processes.
1987.
Sec. 154.053. STANDARDS AND DUTIES OF IMPARTIAL THIRD

PARTIES. (a) A person appointed to facilitate an alternative
dispute resolution procedure under this subchapter shall
encourage and assist the parties in reaching a settlement of
their dispute but may not compel or coerce the parties to enter
into a settlement agreement.
(b) Unless expressly authorized by the disclosing party,
the impartial third party may not disclose to either party
information given in confidence by the other and shall at all
times maintain confidentiality with respect to communications
relating to the subject matter of the dispute.
(c) Unless the parties agree otherwise, all matters,
including the conduct and demeanor of the parties and their
counsel during the settlement process, are confidential and may
never be disclosed to anyone, including the appointing court.
(d) Each participant, including the impartial third party,
to an alternative dispute resolution procedure is subject to the
requirements of Subchapter B, Chapter 261, Family Code, and
Subchapter C, Chapter 48, Human Resources Code.
1987. Amended by Acts 1999, 76th Leg., ch. 1150, Sec. 29, eff.
Sept. 1, 1999.
Sec. 154.054. COMPENSATION OF IMPARTIAL THIRD PARTIES.

(a) The court may set a reasonable fee for the services of an
impartial third party appointed under this subchapter.
(b) Unless the parties agree to a method of payment, the
court shall tax the fee for the services of an impartial third
party as other costs of suit.
1987.
Sec. 154.055. QUALIFIED IMMUNITY OF IMPARTIAL THIRD

PARTIES. (a) A person appointed to facilitate an alternative
dispute resolution procedure under this subchapter or under

Chapter 152 relating to an alternative dispute resolution system
established by counties, or appointed by the parties whether
before or after the institution of formal judicial proceedings,
who is a volunteer and who does not act with wanton and wilful
disregard of the rights, safety, or property of another, is
immune from civil liability for any act or omission within the
course and scope of his or her duties or functions as an
impartial third party. For purposes of this section, a
volunteer impartial third party is a person who does not receive
compensation in excess of reimbursement for expenses incurred or
a stipend intended as reimbursement for expenses incurred.
(b) This section neither applies to nor is it intended to
enlarge or diminish any rights or immunities enjoyed by an
arbitrator participating in a binding arbitration pursuant to
any applicable statute or treaty.
Added by Acts 1993, 73rd Leg., ch. 875, Sec. 1, eff. Sept. 1,
1993.
TEXAS RULES OF APPELLATE PROCEDURE
Table of Contents
SECTION ONE.
GENERAL PROVISIONS
Rule 5.
Rule 1.
Fees in Civil Cases
Scope of Rules; Local Rules of Courts of Appeals

Rule 6. Representation by Counsel
1.1. Scope.
1.2. Local Rules
(a) Promulgation.
(b) Copies.
(c) Party's Noncompliance.
6.1. Lead Counsel

(a) For Appellant.
(b) For a Party Other Than Appellant.
(c) How to Designate.
6.2. Appearance of Other Attorneys
Rule 2.
Suspension of Rules
6.3. To Whom Communications Sent
Rule 3.
Definitions; Uniform Terminology
6.4. Nonrepresentation Notice

(a) In General.
(b) Appointed Counsel.
3.1. Definitions
3.2. Uniform Terminology in Criminal Cases
Rule 4.
Time and Notice Provisions
4.1. Computing Time

(a) In General.
(b) Clerk's Office Closed or Inaccessible.
6.5. Withdrawal
(a) Contents of Motion.
(b) Delivery to Party.
(c) If Motion Granted.
(d) Exception for Substitution of Counsel.
6.6. Agreements of Parties or Counsel
Rule 7.
4.2. No Notice of Trial Court's Judgment in Civil
Case
(a) Additional Time to File Documents.
(1) In general.
(2) Exception for restricted appeal.
(b) Procedure to Gain Additional Time.
(c) The Court's Order.
4.3. Periods Affected by Modified Judgment in Civil
Case
(a) During Plenary-Power Period.
(b) After Plenary Power Expires.
4.4. Periods Affected When Process Served by
Publication
Substituting Parties
7.1. Parties Who Are Not Public Officers

(a) Death of a Party.
(I) Civil Cases.
(2) Criminal Cases.
(b) Substitution for Other Reasons.
7.2. Public Officers
(a) Automatic Substitution of Officer.
(b) Abatement.
Rule 8.
Bankruptcy in Civil Cases
8.1. Notice of Bankruptcy

8.2. Effect of Bankruptcy
4.5. No Notice of Judgment or Order of Appellate

Court; Effect on Time to File Certain Documents
(a) Additional Time to File Documents.
(b) Procedure to Gain Additional Time.
(c) Where to File.
(d) Order ofthe Court.
8.3. Motion to Reinstate or Sever Appeal Suspended

by Bankruptcy
(a) Motion to Reinstate.
(b) Motion to Sever.
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(c)
must retain an umedacted version of the filed

document during the pendency of the appeal and
any related proceedings filed within six months of
the date the judgment is signed.
Juvenile Court Cases. In an appeal or an original

proceeding in an appellate court, arising out of a
case under Title 3 of the Family Code:
(1)
except for a docketing statement, in all papers

submitted to the court, including all appendix
items submitted with a brief, petition, or
motion:
(d)
(A) a minor must be identified only by an

alias;
Notice to Clerk. If a document must contain

sensitive data, the filing party must notify the clerk
by:
(1)
designating the document as containing

sensitive data when the document is
electronically filed; or
(2)
if the document is not electronically filed, by

including, on the upper left-hand side of the
first page, the phrase: "NOTICE: THIS
DOCUMENT CONTAINS SENSITIVE
DATA."
(B) a minor's parent or other family member
must be identified only by an alias; and

(C) all documents
accordingly;
must
be
redacted
(2) the court must, in its opinion, use an alias to

refer to a minor and to the minor's parent or other
family member.
(d)
9.9
(e)
No Alteration ofAppellate Record Nothing in this

rule permits alteration of the original appellate
record except as specifically authorized by court
order.
Notes and Comments

Comment to 1997 change: This is former Rule 4.
Subdivision 9.4, prescribing the form of documents filed in the
appellate courts, is changed and the form to be used is stated in
significantly more detail. Former subdivisions (f) and (g),
regarding service of documents, are merged into subdivision 9 .5.
Former Rule 6 is included as subdivision 9.6, but no substantive
change is made. Other changes are made throughout the rule.
Electronic filing is authorized by 51.801-.807 of the
Government Code.
Privacy Protection for Documents Filed in Civil Cases.

(a)
(b)
(c)
Sensitive Data Defined. Sensitive data consists of:

(1)
a driver's license number, passport number,

social security number, tax identification
number or similar government-issued personal
identification number;
(2)
a bank account number, credit card number, or

other fmancial account number; and
(3)
a birth date, a home address, and the name of

any person who was a minor when the
underlying suit was filed.
Restriction on Remote Access. Documents that

contain umedacted sensitive data in violation of this
rule must not be posted on the Internet.
Comment to 2002 change: The change [to Rule 9.5(a)]

clarifies that the filing party must serve a copy of the document
filed on all other parties, not only in an appeal or review, but in
original proceedings as well. The rule applies only to filing
parties. Thus, when the clerk or court reporter is responsible for
filing the record, as in cases on appeal, a copy need not be served
on the parties. The rule for original civil proceedings, in which
a party is responsible for filing the record, is stated in subdivision
52.7.
Filing of Documents Containing Sensitive Data

Prohibited. Unless the inclusion of sensitive data is
specifically required by a statute, court rule, or
administrative regulation, an electronic or paper
document containing sensitive data may not be filed
with a court unless the sensitive data is redacted,
except for the record in an appeal under Section
Two.
Subdivision 9. 7 is added to provide express authorization for the

practice of adopting by reference all or part of another party's
filing.
Comment to 2008 change: Subdivision 9.3 is amended to
reduce the number of copies of a motion for extension of time or
response filed in the Supreme Court. Subdivision 9.8 is new. To
protect the privacy of minors in suits affecting the parent-child
relationship (SAPCR), including suits to terminate parental
rights, Section 109.002(d) of the Family Code authorizes
appellate courts, in their opinions, to identify parties only by
fictitious names or by initials. Similarly, Section 56.010) of the
Redaction ofSens itive Data; Retention Requirement.

Sensitive data must be redacted by using the letter
"X" in place of each omitted digit or character or by
removing the sensitive data in a manner indicating
that the data has been redacted. The filing party
10
Page 14
(e)
if the document filed is a petition for review filed in

the Supreme Court, notify the court of appeals clerk
of the filing of the petition.
(d)
after the case is submitted to the court and before the

court's decision, the record cannot be withdrawn;
(e)
after the court's decision, the losing party must be

given priority in withdrawing the record;
The clerk must put the case's docket number on each

item received in connection with the case and must put the
docket number on the envelope in which the record is stored.
(f)
the clerk may not allow original documents filed

under Rule 34.5(f) or original exhibits filed under
Rule 34.6(g) to be taken from the clerk's office;
Numbering System. Each case filed in a court of

appeals must be assigned a docket number consisting
of the following four parts, separated by hyphens:
(g)
if the court allows an original document or exhibit to

be taken by a party and it is not returned, the court
may accept the opposing party's statement
concerning the document's or exhibit's nature and
contents;
12.2. Docket Numbers
(a)
( 1)
the number of the court of appeals district;
(2)
the last two digits of the year in which the case

is filed;
(h)
withdrawn material must not be removed from the

court's jurisdiction; and
(3)
the number assigned to the case; and
(I)
the court may, on the motion of any party or its own

initiative, modify any of these conditions.
(4)
the designation "CV" for a civil case or "CR"

for a criminal case.
(b)
Numbering Order. Each case must be docketed in

the order of its filing.
(c)
Multiple Notices of Appeal. All notices of appeal

filed in the same case must be given the same docket
number.
(d)
12.5. Clerk's Duty to Account

The clerk of an appellate court who receives money due
another court must promptly pay the money to the court to whom
it is due. This rule is enforceable by the Supreme Court.
12.6. Notices of Court's Judgments and Orders

In any proceeding, the clerk of an appellate court must
promptly send a notice of any judgment, mandate or other court
order to all parties to the proceeding.
Appeals Not Yet Filed A motion relating to an

appeal that has been perfected but not yet filed must
be docketed and assigned a docket number that will
also be assigned to the appeal when it is filed.
Notes and Comments
12.3. Custody of Papers
Comment to 1997 change: This is former Rule 18. Former

subdivision (b), regarding the preparation of the record, is moved
to the order concerning the preparation of the appellate record.
Former Rule 14, which is revised and simplified, is relocated
here as subdivision 12.5. Subdivision 12.6, requiring the clerk
to send a notice of any order or judgment of an appellate court,
is added. Other changes are made.
The clerk must safeguard the record and every other item
filed in a case. If the record or any part of it or any other item is
missing, the court will make an order for the replacement of the
record or item that is just under the circumstances.
12.4. Withdrawing Papers

Comment to 2002 change: Subdivision 12.6 is amended to
require the clerk to notify the parties of all of the court's rulings,
including the mandate.
The clerk may permit the record or other filed item to be

taken from the clerk's office at any time, on the following
conditions:
(a)
the clerk must have a receipt for the record or item;
(b)
the clerk should make reasonable conditions to

ensure that the withdrawn record or item is preserved
and returned;
(c)
Rule 13. Court Reporters

and Court Recorders
13.1. Duties of Court Reporters and Recorders
The official court reporter or court recorder must:
the clerk may demand the return of the record or

item at any time;
14
Page 15
(a)
unless excused by agreement of the parties, attend

court sessions and make a fu11 record of the
proceedings;
(b)
take an exhibits offered in evidence during a

proceeding and ensure that they are marked;
reporter's duties relating to proceedings before the court take

preference over other work.
13.4. Report of Reporters
(c)
file all exhibits with the trial court clerk after a

proceeding ends;
(d)
perform the duties prescribed by Rules 34.6 and 35;

and
(e)
To aid the trial court in setting priorities under 13.3, each

court reporter must give the trial court a monthly written report
showing the amount and nature of the business pending in the
reporter's office. A copy of this report must be filed with the
appe11ate clerk of each district in which the court sits.
13.5. Appointing Deputy Reporter
perform other acts relating to the reporter's or

recorder's official duties, as the trial court directs.
When the official court reporter is unable to perform the

duties in 13.1 or 13.2 because of illness, press of official work,
or unavoidable absence or disability, the trial court may
designate a deputy reporter. If the court appoints a deputy
reporter, that person must file with the trial court clerk a
document stating:
13.2. Additional Duties of Court Recorder
The official court recorder must also:

(a)
(b)
ensure that the recording system functions properly

throughout the proceeding and that a complete, clear,
and transcribable recording is made;
(a)
the date the deputy worked;
(b)
the court in which the deputy worked; and
make a detailed, legible log of all proceedings being

recorded, showing:
(c)
the number and style of the case on which the deputy

worked.
(1)
the number and style of the case before the

court;
(2)
the name of each person speaking;
(3)
the event being recorded such as the voir dire,

the opening statement, direct and crossexaminations, and bench conferences;
(4)
each exhibit offered, admitted, or excluded;
(5)
the time of day of each event; and
(6)
the index number on the recording device

showing where each event is recorded;
13.6. Filing of Notes in a Criminal Case
When a defendant is convicted and sentenced, or is

granted deferred adjudication for a felony other that a state jail
felony, and does not appeal, the court reporter must- within 20
days after the time to perfect the appeal has expired
file the
untranscribed notes or the original recording of the proceeding
with the trial court clerk. The trial court clerk need not retain the
notes beyond 15 years of their filing date.
Notes and Comments
(c)
after a proceeding ends, file with the clerk the

original log;
(d)
have the original recording stored to ensure that it is

preserved and is accessible; and
(e)
ensure that no one gains access to the original

recording without the court's written order.
Comment to 1997 change: Former Rules 11 and 12 are

merged. Former Rules 11(a), (c) and (d) now appear as
subdivisions 13.1, 13.5 and 13.6. Former Rule ll(b) is omitted
as unnecessary. The provisions offormer Rule 12(a) are moved
to Rule 35.3. Former Rules 12(b) and (c) now appear as
subdivisions 13.3 and 13.4. The rule is made to apply to court
recorders as well as court reporters. Paragraph 13.l(a) merges
paragraphs (a)(l) and (2) of former Rule 11, and now requires
the reporter to make a record of voir dire and closing argument
unless excused by agreement of the parties. Paragraph 13.1 (b) is
new, but codifies current practice. Subdivision 13.2 is new and
specifies rules for electronic recording of proceedings. A
provision requiring a deputy court reporter to file with the trial
court clerk a document identifYing the proceedings in which the
reporter worked is included in paragraph 13.5. Other changes are
made.
13.3. Priorities of Reporters
The trial court must help ensure that the court reporter's
work is timely accomplished by setting work priorities. The
15
TEXAS RULES OF CIVIL PROCEDURE

PART II - RULES OF PRACTICE IN DISTRICT AND COUNTY COURTS
SECTION 1. GENERAL RULES

RULE 15. WRITS AND PROCESS
The style of all writs and process shall be "The State of Texas;" and unless otherwise specially
provided by law or these rules every such writ and process shall be directed to any sheriff or any
constable within the State of Texas, shall be made returnable on the Monday next after expiration
of twenty days from the date of service thereof, and shall be dated and attested by the clerk with the
seal of the court impressed thereon; and the date of issuance shall be noted thereon.
RULE 16. SHALL ENDORSE ALL PROCESS

Every officer or authorized person shall endorse on all process and precepts coming to his hand the
day and hour on which he received them, the manner in which he executed them, and the time and
place the process was served and shall sign the returns officially.
RULE 17. OFFICER TO EXECUTE PROCESS

Except where otherwise expressly provided by law or these rules, the officer receiving any process
to be executed shall not be entitled in any case to demand his fee for executing the same in advance
of such execution, but his fee shall be taxed and collected as other costs in the case.
RULE 18. WHEN JUDGE DIES DURING TERMS, RESIGNS OR IS DISABLED

If the judge dies, resigns, or becomes unable to hold court during the session of court duly convened
for the term, and the time provided by law for the holding of said court has not expired, such death,
resignation, or inability on the part of the judge shall not operate to adjourn said court for the term,
but such court shall be deemed to continue in session. If a successor to such judge shall qualify and
assume office during the term, or if a judge be transferred to said district from some other judicial
district, he may continue to hold said court for the term provided, and all motions undisposed of
shall be heard and determined by him, and statements of facts and bills of exception shall be
approved by him. If the time for holding such court expires before a successor shall qualify, and
before a judge can be transferred to said district from some other judicial district, then all motions
pending, including those for new trial, shall stand as continued in force until such successor has
qualified and assumed office, or a judge has been transferred to said district who can hold said court,
and thereupon such judge shall have power to act thereon at the succeeding term, or on an earlier
day in vacation, on notice to all parties to the motion, and such orders shall have the same effect as
if rendered in term time. The time for allowing statement of facts and bills of exception from such
add something to, or withdraw something from, that which has been previously pleaded so as to
perfect that which is or may be deficient, or to correct that which has been incorrectly stated by the
party making the amendment, or to plead new matter, additional to that formerly pleaded by the
amending party, which constitutes an additional claim or defense permissible to the suit.
RULE 63. AMENDMENTS AND RESPONSIVE PLEADINGS

Parties may amend their pleadings, respond to pleadings on file of other parties, file suggestions of
death and make representative parties, and file such other pleas as they may desire by filing such
pleas with the clerk at such time as not to operate as a surprise to the opposite party; provided, that
any pleadings, responses or pleas offered for filing within seven days of the date of trial or
thereafter, or after such time as may be ordered by the judge under Rule 166, shall be filed only after
leave of the judge is obtained, which leave shall be granted by the judge unless there is a showing
that such filing will operate as a surprise to the opposite party.
RULE 64. AMENDED INSTRUMENT

The party amending shall point out the instrument amended, as "original petition," or "plaintiffs first
supplemental petition," or as "original answer," or "defendant's first supplemental answer" or other
instrument file by the party and shall amend by filing a substitute therefor, entire and complete in
itself, indorsed "amended original petition," or "amended first supplemental petition," or "amended
original answer," or "amended first supplemental answer," accordingly as said instruments of
pleading are designated.
RULE 65. SUBSTITUTED INSTRUMENT TAKES PLACE OF ORIGINAL

Unless the substituted instrument shall be set aside on exceptions, the instrument for which it is
substituted shall no longer be regarded as a part of the pleading in the record of the cause, unless
some error of the court in deciding upon the necessity of the amendment, or otherwise in
superseding it, be complained of, and exception be taken to the action of the court, or unless it be
necessary to look to the superseded pleading upon a question of limitation.
RULE 66. TRIAL AMENDMENT

If evidence is objected to at the trial on the ground that it is not within the issues made by the
pleading, or if during the trial any defect, fault or omission in a pleading, either of form or substance,
is called to the attention of the court, the court may allow the pleadings to be amended and shall do
so freely when the presentation of the merits of the action will be subserved thereby and the
objecting party fails to satisfy the court that the allowance of such amendment would prejudice him
in maintaining his action or defense upon the merits. The court may grant a postponement to enable
the objecting party to meet such evidence.
withdraw filed exhibits, upon giving the clerk proper receipt therefor, whenever
necessary for the court reporter or stenographer to transmit such original exhibits to
an appellate court under the provisions of Rule 379 or to otherwise discharge the
duties imposed by law upon said court reporter or stenographer.
RULE 76. MAY INSPECT PAPERS

Each attorney at law practicing in any court shall be allowed at all reasonable times to inspect the
papers and records relating to any suit or other matter in which he may be interested.
RULE 76a. SEALING COURT RECORDS

1.
Standard for Sealing Court Records. Court records may not be removed from court files
except as permitted by statute or rule. No court order or opinion issued in the adjudication
of a case may be sealed. Other court records, as defined in this rule, are presumed to be open
to the general public and may be sealed only upon a showing of all of the following:
(a)
(b)
2.
a specific, serious and substantial interest which clearly outweighs:

(1)
this presumption of openness;
(2)
any probable adverse effect that sealing will have upon the general
public health or safety;
no less restrictive means than sealing records will adequately and effectively protect
the specific interest asserted.
Court Records. For purposes of this rule, court records means:

(a)
(b)
all documents of any nature filed in connection with any matter before any civil
court, except:
(1)
documents filed with a court in camera, solely for the purpose of obtaining
a ruling on the discoverability of such documents;
(2)
documents in court files to which access is otherwise restricted by law;
(3)
documents filed in an action originally arising under the Family Code.
settlement agreements not filed of record, excluding all reference to any monetary
consideration, that seek to restrict disclosure of information concerning matters that
have a probable adverse effect upon the general public health or safety, or the
administration of public office, or the operation of government.
(c)
discovery, not filed of record, concerning matters that have a probable adverse effect
upon the general public health or safety, or the administration of public office, or the
operation of government, except discovery in cases originally initiated to preserve
bona fide trade secrets or other intangible property rights.
3.
Notice. Court records may be sealed only upon a party's written motion, which shall be open
to public inspection. The movant shall post a public notice at the place where notices for
meetings of county governmental bodies are required to be posted, stating: that a hearing will
be held in open court on a motion to seal court records in the specific case; that any person
may intervene and be heard concerning the sealing of court records; the specific time and
place of the hearing; the style and number of the case; a brief but specific description of both
the nature of the case and the records which are sought to be sealed; and the identity of the
movant. Immediately after posting such notice, the movant shall file a verified copy of the
posted notice with the clerk of the court in which the case is pending and with the Clerk of
the Supreme Court of Texas.
4.
Hearing. A hearing, open to the public, on a motion to seal court records shall be held in
open court as soon as practicable, but not less than fourteen days after the motion is filed and
notice is posted. Any party may participate in the hearing. Non-parties may intervene as a
matter of right for the limited purpose of participating in the proceedings, upon payment of
the fee required for filing a plea in intervention. The court may inspect records in camera
when necessary. The court may determine a motion relating to sealing or unsealing court
records in accordance with the procedures prescribed by Rule 120a.
5.
Temporary Sealing Order. A temporary sealing order may issue upon motion and notice
to any parties who have answered in the case pursuant to Rules 21 and 21a upon a showing
of compelling need from specific facts shown by affidavit or by verfied petition that
immediate and irreparable injury will result to a specific interest of the applicant before
notice can be posted and a hearing held as otherwise provided herein. The temporary order
shall set the time for the hearing required by paragraph 4 and shall direct that the movant
immediately give the public notice required by paragraph 3. The court may modify or
withdraw any temporary order upon motion by any party or intervenor, notice to the parties,
and hearing conducted as soon as practicable. Issuance of a temporary order shall not reduce
in any way the burden of proof of a party requesting sealing at the hearing required by
paragraph 4.
6.
Order on Motion to Seal Court Records. A motion relating to sealing or unsealing court
records shall be decided by written order, open to the public, which shall state: the style and
number of the case; the specific reasons for finding and concluding whether the showing
required by paragraph 1 has been made; the specific portions of court records which are to
be sealed; and the time period for which the sealed portions of the court records are to be
sealed. The order shall not be included in any judgment or other order but shall be a separate
document in the case; however, the failure to comply with this requirement shall not affect
its appealability.
7.
Continuing Jurisdiction. Any person may intervene as a matter of right at any time before
or after judgment to seal or unseal court records. A court that issues a sealing order retains
continuing jurisdiction to enforce, alter, or vacate that order. An order sealing or unsealing
court records shall not be reconsidered on motion of any party or intervenor who had actual
notice of the hearing preceding issuance of the order, without first showing changed
circumstances materially affecting the order. Such circumstances need not be related to the
case in which the order was issued. However, the burden of making the showing required
by paragraph 1 shall always be on the party seeking to seal records.
8.
Appeal. Any order (or portion of an order or judgment) relating to sealing or unsealing
court records shall be deemed to be severed from the case and a final judgment which may
be appealed by any party or intervenor who participated in the hearing preceding issuance
of such order. The appellate court may abate the appeal and order the trial court to direct that
further public notice be given, or to hold further hearings, or to make additional findings.
9.
Application. Access to documents in court files not defined as court records by this rule
remains governed by existing law. This rule does not apply to any court records sealed in an
action in which a final judgment has been entered before its effective date. This rule applies
to cases already pending on its effective date only with regard to:
(a)
all court records filed or exchanged after the effective date;
(b)
any motion to alter or vacate an order restricting access to court records, issued
before the effective date.
RULE 77. LOST RECORDS AND PAPERS

When any papers or records are lost or destroyed during the pendency of a suit, the parties may, with
the approval of the judge, agree in writing on a brief statement of the matters contained therein; or
either party may supply such lost records or papers as follows:
a.
After three days' notice to the adverse party or his attorney, make written sworn
motion before the court stating the loss or destruction of such record or papers,
accompanied by certified copies of the originals if obtainable, or by substantial
copies thereof.
b.
If, upon hearing, the court be satisfied that they are substantial copies of the original,
an order shall be made substituting such copies or brief statement for the originals.
c.
Such substituted copies or brief statement shall be filed with the clerk, constitute a
part of the cause, and have the force and effect of the originals.
SECTION 4. PLEADING
any special appearance or motion to transfer venue. In all other respects the rules prescribed for
pleadings of defensive matter are applicable to answers to counterclaims and cross-claims.
RULE 93. CERTAIN PLEAS TO BE VERIFIED
A pleading setting up any of the following matters, unless the truth of such matters appear of record,
shall be verified by affidavit.
1.
That the plaintiff has not legal capacity to sue or that the defendant has not legal
capacity to be sued.
2.
That the plaintiff is not entitled to recover in the capacity in which he sues, or that
the defendant is not liable in the capacity in which he is sued.
3.
That there is another suit pending in this State between the same parties involving
the same claim.
4.
That there is a defect of parties, plaintiff or defendant.
5.
A denial of partnership as alleged in any pleading as to any party to the suit.
6.
That any party alleged in any pleading to be a corporation is not incorporated as

alleged.
7.
Denial of the execution by himself or by his authority of any instrument in writing,

upon which any pleading is founded, in whole or in part and charged to have been
executed by him or by his authority, and not alleged to be lost or destroyed. Where
such instrument in writing is charged to have been executed by a person then
deceased, the affidavit shall be sufficient if it states that the affiant has reason to
believe and does believe that such instrument was not executed by the decedent or
by his authority. In the absence of such a sworn plea, the instrument shall be received
in evidence as fully proved.
8.
A denial ofthe genuineness ofthe indorsement or assignment of a written instrument

upon which suit is brought by an indorsee or assignee and in the absence of such a
sworn plea, the indorsement or assignment thereof shall be held as fully proved. The
denial required by this subdivision of the rule may be made upon information and
belief.
9.
That a written instrument upon which a pleading is founded is without consideration,

or that the consideration of the same has failed in whole or in part.
10.
A denial of an account which is the foundation ofthe plaintiffs action, and supported
by affidavit.
11.
That a contract sued upon is usurious. Unless such plea is filed, no evidence of
usurious interest as a defense shall be received.
12.
That notice and proof of loss or claim for damage has not been given as alleged.
Unless such plea is filed such notice and proof shall be presumed and no evidence
to the contrary shall be admitted. A denial of such notice or such proof shall be made
specifically and with particularity.
13.
In the trial of any case appealed to the court from the Industrial Accident Board the
following, if pleaded, shall be presumed to be true as pleaded and have been done
and filed in legal time and manner, unless denied by verified pleadings:
(a)
Notice of injury.
(b)
Claim for Compensation.
(c)
Award of the Board.
(d)
Notice of intention not to abide by the award of the Board.
(e)
Filing of suit to set aside the award.
(f)
That the insurance company alleged to have been the carrier of the workers'
compensation insurance at the time of the alleged injury was in fact the
carrier thereof.
(g)
That there was good cause for not filing claim with the Industrial Accident
Board within the one year period provided by statute.
(h)
Wage rate.
A denial of any of the matters set forth in subdivisions (a) or (g) of paragraph 13 may
be made on information and belief.
Any such denial may be made in original or amended pleadings; but if in amended
pleadings the same must be filed not less than seven days before the case proceeds
to trial. In case of such denial the things so denied shall not be presumed to be true,
and if essential to the case of the party alleging them, must be proved.
14.
That a party plaintiff or defendant is not doing business under an assumed name or
trade name as alleged.
15.
In the trial of any case brought against an automobile insurance company by an

insured under the provisions of an insurance policy in force providing protection
against uninsured motorists, an allegation that the insured has complied with all the
terms of the policy as a condition precedent to bringing the suit shall be presumed
to be true unless denied by verified pleadings which may be upon information and
belief.
16.
Any other matter required by statute to be pleaded under oath.
RULE 94. AFFIRMATIVE DEFENSES

In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction,
arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress,
estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment,
release, res judicata, statute of frauds, statute of limitations, waiver, and any other matter
constituting an avoidance or affirmative defense. Where the suit is on an insurance contract which
insures against certain general hazards, but contains other provisions limiting such general liability,
the party suing on such contract shall never be required to allege that the loss was not due to a risk
or cause coming within any of the exceptions specified in the contract, nor shall the insurer be
allowed to raise such issue unless it shall specifically allege that the loss was due to a risk or cause
coming within a particular exception to the general liability; provided that nothing herein shall be
construed to change the burden of proof on such issue as it now exists.
RULE 95. PLEAS OF PAYMENT

When a defendant shall desire to prove payment, he shall file with his plea an account stating
distinctly the nature of such payment, and the several items thereof; failing to do so, he shall not be
allowed to prove the same, unless it be so plainly and particularly described in the plea as to give
the plaintiff full notice of the character thereof.
RULE 96. NO DISCONTINUANCE

Where the defendant has filed a counterclaim seeking affirmative relief, the plaintiff shall not be
permitted by a discontinuance ofhis suit, to prejudice the right of the defendant to be heard on such
counterclaim.
RULE 97. COUNTERCLAIM AND CROSS-CLAIM

(a)
Compulsory Counterclaims. A pleading shall state as a counterclaim any claim within the
jurisdiction of the court, not the subject of a pending action, which at the time of filing the
pleading the pleader has against any opposing party, if it arises out of the transaction or
occurrence that is the subject matter of the opposing party's claim and does not require for
its adjudication the presence of third parties of whom the court cannot acquire jurisdiction;
provided, however, that a judgment based upon a settlement or compromise of a claim of one
party to the transaction or occurrence prior to a disposition on the merits shall not operate
as a bar to the continuation or assertion of the claims of any other party to the transaction or
occurrence unless the latter has consented in writing that said judgment shall operate as a
bar.
(b)
Permissive Counterclaims. A pleading may state as a counterclaim any claim against an

opposing party whether or not arising out of the transaction or occurrence that is the subject
matter of the opposing party's claim.
SECTION 8. PRE-TRIAL PROCEDURE

RULE 166. PRE-TRIAL CONFERENCE
In an appropriate action, to assist in the disposition of the case without undue expense or burden to
the parties, the court may in its discretion direct the attorneys for the parties and the parties or their
duly authorized agents to appear before it for a conference to consider:
(a)
All pending dilatory pleas, motions and exceptions;
(b)
The necessity or desirability of amendments to the pleadings;
(c)
A discovery schedule;
(d)
Requiring written statements of the parties' contentions;
(e)
Contested issues of fact and the simplification of the issues;
(f)
The possibility of obtaining stipulations of fact;
(g)
The identification of legal matters to be ruled on or decided by the court;
(h)
The exchange of a list of direct fact witnesses, other than rebuttal or impeaching
witnesses the necessity of whose testimony cannot reasonably be anticipated before
the time of trial, who will be called to testify at trial, stating their address and
telephone number, and the subject of the testimony of each such witness;
(i)
The exchange of a list of expert witnesses who will be called to testify at trial, stating
their address and telephone number, and the subject of the testimony and opinions
that will be proffered by each expert witness;
(j)
Agreed applicable propositions of law and contested issues of law;
(k)
Proposed jury charge questions, instructions, and definitions for a jury case or
proposed findings of fact and conclusions of law for a nonjury case;
(l )
The marking and exchanging of all exhibits that any party may use at trial and
stipulation to the authenticity and admissibility of exhibits to be used at trial;
(m)
Written trial objections to the opposite party's exhibits, stating the basis for each
objection;
(n)
The advisability of a preliminary reference of issues to a master or auditor for

findings to be used as evidence when the trial is to be by jury;
(o)
The settlement of the case, and to aid such consideration, the court may encourage
settlement;
(p)
Such other matters as may aid in the disposition of the action.
The court shall make an order which recites the action taken at the pretrial conference, the
amendments allowed to the pleadings, the time within which same may be filed, and the agreements
made by the parties as to any of the matters considered, and which limits the issues for trial to those
not disposed of by admissions, agreements of counsel, or rulings of the court; and such order when
issued shall control the subsequent course of the action, unless modified at the trial to prevent
manifest injustice. The court in its discretion may establish by rule a pretrial calendar on which
actions may be placed for consideration as above provided and may either confine the calendar to
jury actions or extend it to all actions.
Pretrial proceedings in multidistrict litigation may also be governed by Rules 11 and 13 of the Rules
of Judicial Administration.

(a)
For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to

obtain a declaratory judgment may, at any time after the adverse party has appeared or
answered, move with or without supporting affidavits for a summary judgment in his favor
upon all or any part thereof. A summary judgment, interlocutory in character, may be
rendered on the issue of liability alone although there is a genuine issue as to amount of
damages.
(b)
For Defending Party. A party against whom a claim, counterclaim, or cross-claim is

asserted or a declaratory judgment is sought may, at any time, move with or without
supporting affidavits for a summary judgment in his favor as to all or any part thereof.
(c)
Motion and Proceedings Thereon. The motion for summary judgment shall state the
specific grounds therefor. Except on leave of court, with notice to opposing counsel, the
motion and any supporting affidavits shall be filed and served at least twenty-one days
before the time specified for hearing. Except on leave of court, the adverse party, not later
than seven days prior to the day of hearing may file and serve opposing affidavits or other
written response. No oral testimony shall be received at the hearing. The judgment sought
shall be rendered forthwith if (i) the deposition transcripts, interrogatory answers, and other
discovery responses referenced or set forth in the motion or response, and (ii) the pleadings,
admissions, affidavits, stipulations of the parties, and authenticated or certified public
records, if any, on file at the time of the hearing, or filed thereafter and before judgment with
permission of the court, show that, except as to the amount of damages, there is no genuine
issue as to any material fact and the moving party is entitled to judgment as a matter of law
on the issues expressly set out in the motion or in an answer or any other response. Issues
not expressly presented to the trial court by written motion, answer or other response shall
not be considered on appeal as grounds for reversal. A summary judgment may be based on
uncontroverted testimonial evidence of an interested witness, or of an expert witness as to
subject matter concerning which the trier of fact must be guided solely by the opinion
testimony of experts, if the evidence is clear, positive and direct, otherwise credible and free
from contradictions and inconsistencies, and could have been readily controverted.
(d)
Appendices, References and Other Use of Discovery Not Otherwise on File. Discovery
products not on file with the clerk may be used as summary judgment evidence if copies of
the material, appendices containing the evidence, or a notice containing specific references
to the discovery or specific references to other instruments, are filed and served on all parties
together with a statement of intent to use the specified discovery as summary judgment
proofs: (i) at least twenty-one days before the hearing if such proofs are to be used to support
the summary judgment; or (ii) at least seven days before the hearing if such proofs are to be
used to oppose the summary judgment.
(e)
Case Not Fully Adjudicated on Motion. If summary judgment is not rendered upon the
whole case or for all the relief asked and a trial is necessary, the judge may at the hearing
examine the pleadings and the evidence on file, interrogate counsel, ascertain what material
fact issues exist and make an order specifying the facts that are established as a matter of
law, and directing such further proceedings in the action as are just.
(f)
Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall be made
on personal knowledge, shall set forth such facts as would be admissible in evidence, and
shall show affirmatively that the affiant is competent to testify to the matters stated therein.
Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be
attached thereto or served therewith. The court may permit affidavits to be supplemented or
opposed by depositions or by further affidavits. Defects in the form of affidavits or
attachments will not be grounds for reversal unless specifically pointed out by objection by
an opposing party with opportunity, but refusal, to amend.
(g)
When Affidavits Are Unavailable. Should it appear from the affidavits of a party opposing
the motion that he cannot for reasons stated present by affidavit facts essential to justify his
opposition, the court may refuse the application for judgment or may order a continuance to
permit affidavits to be obtained or depositions to be taken or discovery to be had or may
make such other order as is just.
(h)
Affidavits Made in Bad Faith. Should it appear to the satisfaction of the court at any time
that any of the affidavits presented pursuant to this rule are presented in bad faith or solely
for the purpose of delay, the court shall forthwith order the party employing them to pay to
the other party the amount of the reasonable expenses which the filing of the affidavits
caused him to incur, including reasonable attorney's fees, and any offending party or attorney
may be adjudged guilty of contempt.
(i)
No-Evidence Motion. After adequate time for discovery, a party without presenting
summary judgment evidence may move for summary judgment on the ground that there is
no evidence of one or more essential elements of a claim or defense on which an adverse
party would have the burden of proof at trial. The motion must state the elements as to which
there is no evidence. The court must grant the motion unless the respondent produces
summary judgment evidence raising a genuine issue of material fact.
[RULE 166b. Repealed effective January 1, 1999]
[RULE 166c. Repealed effective January 1, 1999]
RULE 167. OFFER OF SETTLEMENT; AWARD OF LITIGATION COSTS
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Summary Judgment - Rule 166a

Misc. Docket No. 97-
FINAL APPROVAL OF REVISIONS TO THE

TEXAS RULES OF CIVIL PROCEDURE
ORDERED that:
1. Rule 166a of the Texas Rules of Civil Procedure, amended by Order in Misc. Docket No. 97-9067,
dated Aprill6, 1997, 60 TEX. BAR. J. 534 (June 1997), with only the comment changed to reflect
public comments received, is attached;
2. The amendments take effect September 1, 1997, and apply to all motions for summary judgment
filed on or after that date;
3. The comment appended to these changes, unlike other notes and comments in the rules, is intended
to inform the construction and application of the rule; and
4. The Clerk is directed to file an original of this Order with the Secretary of State forthwith, and to
cause a copy of this Order to be mailed to each registered member of the State Bar of Texas by
publication in the Texas Bar Journal.
SIGNED AND ENTERED this day of, 1997.
Thomas R. Phillips, Chief Justice

Raul A. Gonzalez, Justice
Nathan L. Hecht, Justice
John Comyn, Justice
Craig T. Enoch, Justice
Rose Spector, Justice
Priscilla R. Owen, Justice
James A. Baker, Justice
Greg Abbott, Justice

(a) For Claimant. [No change.]
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Summary Judgment - Rule 166a
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(b) For Defending Party. [No change.]

(c) Motion and Proceedings Thereon. [No change.]
(d) Appendices, References and Other Use of Discovery Not Otherwise on File. [No change.]
(e) Case Not Fully Adjudicated on Motion. If summary judgment is not rendered upon the whole
case or for all the relief asked and a trial is necessary, the judge may at the hearing examine the
pleadings and the evidence on file, interrogate counsel, ascertain what material fact issues exist and
make an order specifying the facts that are established as a matter of law, and directing such further
proceedings in the action as are just.
(f) Form of Affidavits; Further Testimony. [No change.]
(g) When Affidavits Are Unavailable. [No change.]

(h) Affidavits Made in Bad Faith. [No change.]
(i) No-Evidence Motion. After adequate time for discovery, a party without presenting summary
judgment evidence may move for summary judgment on the ground that there is no evidence of one
or more essential elements of a claim or defense on which an adverse party would have the burden of
proof at trial. The motion must state the elements as to which there is no evidence. The court must
grant the motion unless the respondent produces summary judgment evidence raising a genuine issue
of material fact.
Notes and Comments

Comment to 1997 change: This comment is intended to inform the construction and application of the
rule. Paragraph (i) authorizes a motion for summary judgment based on the assertion that, after
adequate opportunity for discovery, there is no evidence to support one or more specified elements of
an adverse party's claim or defense. A discovery period set by pretrial order should be adequate
opportunity for discovery unless there is a showing to the contrary, and ordinarily a motion under
paragraph (i) would be permitted after the period but not before. The motion must be specific in
challenging the evidentiary support for an element of a claim or defense; paragraph (i) does not
authorize conclusory motions or general no-evidence challenges to an opponent's case. Paragraph (i)
does not apply to ordinary motions for summary judgment under paragraphs (a) or (b), in which the
movant must prove it is entitled to judgment by establishing each element of its own claim or defense
as a matter oflaw or by negating an element of the respondent's claim or defense as a matter oflaw.
To defeat a motion made under paragraph (i), the respondent is not required to marshal its proof; its
response need only point out evidence that raises a fact issue on the challenged elements. The existing
rules continue to govern the general requirements of summary judgment practice. A motion under
paragraph (i) is subject to sanctions provided by existing law (Tex Civ. Prac. & Rem. Code 9.00110.006) and rules (Tex. R. Civ. P. 13). The denial of a motion under paragraph (i) is no more
reviewable by appeal or mandamus than the denial of a motion under paragraph (c).
OPINION DELIVERED: August 15, 1997
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court.
(d)
Retention requirement for persons. Any person required to serve discovery materials not
required to be filed must retain the original or exact copy of the materials during the
pendency of the case and any related appellate proceedings begun within six months after
judgment is signed, unless otherwise provided by the trial court.
(e)
Retention requirement for courts. The clerk of the court shall retain and dispose of
deposition transcripts and depositions upon written questions as directed by the Supreme
Court.
191.5 Service of Discovery Materials.

Every disclosure, discovery request, notice, response, and objection required to be served on a party
or person must be served on all parties of record.
RULE 192. PERMISSIBLE DISCOVERY: FORMS AND SCOPE;

WORK PRODUCT; PROTECTIVE ORDERS; DEFINITIONS
192.1 Forms of Discovery.
Permissible forms of discovery are:
(a)
requests for disclosure;
(b)
requests for production and inspection of documents and tangible things;
(c)
requests and motions for entry upon and examination of real property;
(d)
interrogatories to a party;
(e)
requests for admission;
(f)
oral or written depositions; and
(g)
motions for mental or physical examinations.
192.2 Sequence of Discovery.

The permissible forms of discovery may be combined in the same document and may be taken in
any order or sequence.
192.3 Scope of Discovery.
(a)
Generally. In general, a party may obtain discovery regarding any matter that is not
privileged and is relevant to the subject matter of the pending action, whether it relates to the
claim or defense of the party seeking discovery or the claim or defense of any other party.
It is not a ground for objection that the information sought will be inadmissible at trial if the
information sought appears reasonably calculated to lead to the discovery of admissible evidence.
(b)
Documents and tangible things. A party may obtain discovery of the existence,
description, nature, custody, condition, location, and contents of documents and tangible
things (including papers, books, accounts, drawings, graphs, charts, photographs, electronic
or videotape recordings, data, and data compilations) that constitute or contain matters
relevant to the subject matter of the action. A person is required to produce a document or
tangible thing that is within the person's possession, custody, or control.
(c)
Persons with knowledge of relevant facts. A party may obtain discovery of the name,
address, and telephone number of persons having knowledge of relevant facts, and a brief
statement of each identified person's connection with the case. A person has knowledge of
relevant facts when that person has or may have knowledge of any discoverable matter. The
person need not have admissible information or personal knowledge of the facts. An expert
is "a person with knowledge of relevant facts" only if that knowledge was obtained firsthand or if it was not obtained in preparation for trial or in anticipation of litigation.
(d)
Trial witnesses. A party may obtain discovery of the name, address, and telephone number
of any person who is expected to be called to testify at trial. This paragraph does not apply
to rebuttal or impeaching witnesses the necessity of whose testimony cannot reasonably be
anticipated before trial.
(e)
Testifying and consulting experts. The identity, mental impressions, and opinions of a
consulting expert whose mental impressions and opinions have not been reviewed by a
testifying expert are not discoverable. A party may discover the following information
regarding a testifying expert or regarding a consulting expert whose mental impressions or
opinions have been reviewed by a testifying expert:
(f)
(1)
the expert's name, address, and telephone number;
(2)
the subject matter on which a testifying expert will testify;
(3)
the facts known by the expert that relate to or form the basis of the expert's mental
impressions and opinions formed or made in connection with the case in which the
discovery is sought, regardless of when and how the factual information was
acquired;
(4)
the expert's mental impressions and opinions formed or made in connection with the
case in which discovery is sought, and any methods used to derive them;
(5)
any bias of the witness;
(6)
all documents, tangible things, reports, models, or data compilations that have been
provided to, reviewed by, or prepared by or for the expert in anticipation of a
testifying expert's testimony;
(7)
the expert's current resume and bibliography.
Indemnity and insuring agreements. Except as otherwise provided by law, a party may
obtain discovery of the existence and contents of any indemnity or insurance agreement
under which any person may be liable to satisfy part or all of a judgment rendered in the
action or to indemnify or reimburse for payments made to satisfy the judgment. Information
concerning the indemnity or insurance agreement is not by reason of disclosure admissible
in evidence at trial.
(g)
Settlement agreements. A party may obtain discovery of the existence and contents of any
relevant portions of a settlement agreement. Information concerning a settlement agreement
is not by reason of disclosure admissible in evidence at trial.
(h)
Statements of persons with knowledge of relevant facts. A party may obtain discovery
of the statement of any person with knowledge of relevant facts--a "witness statement"-regardless of when the statement was made. A witness statement is (1) a written statement
signed or otherwise adopted or approved in writing by the person making it, or (2) a
stenographic, mechanical, electrical, or other type of recording of a witness's oral statement,
or any substantially verbatim transcription of such a recording. Notes taken during a
conversation or interview with a witness are not a witness statement. Any person may obtain,
upon written request, his or her own statement concerning the lawsuit, which is in the
possession, custody or control of any party.
(i)
Potential parties. A party may obtain discovery of the name, address, and telephone
number of any potential party.
(j)
Contentions. A party may obtain discovery of any other party's legal contentions and the
factual bases for those contentions.
192.4 Limitations on Scope of Discovery.

The discovery methods permitted by these rules should be limited by the court if it determines, on
motion or on its own initiative and on reasonable notice, that:
(a)
the discovery sought is unreasonably cumulative or duplicative, or is obtainable from

some other source that is more convenient, less burdensome, or less expensive; or
(b)
the burden or expense of the proposed discovery outweighs its likely benefit, taking
into account the needs of the case, the amount in controversy, the parties' resources,
the importance of the issues at stake in the litigation, and the importance of the
proposed discovery in resolving the issues.
192.5 Work Product.

(a)
(b)
Work product defined. Work product comprises:

(1)
material prepared or mental impressions developed in anticipation of litigation or for

trial by or for a party or a party's representatives, including the party's attorneys,
consultants, sureties, indemnitors, insurers, employees, or agents; or
(2)
a communication made in anticipation of litigation or for trial between a party and

the party's representatives or among a party's representatives, including the party's
attorneys, consultants, sureties, indemnitors, insurers, employees, or agents.
Protection of work product.
(c)
(d)
(1)
Protection of core work product--attorney mental processes. Core work product

- the work product of an attorney or an attorney's representative that contains the
attorney's or the attorney's representative's mental impressions, opinions,
conclusions, or legal theories - is not discoverable.
(2)
Protection of other work product. Any other work product is discoverable only
upon a showing that the party seeking discovery has substantial need of the materials
in the preparation of the party's case and that the party is unable without undue
hardship to obtain the substantial equivalent of the material by other means.
(3)
Incidental disclosure of attorney mental processes. It is not a violation of

subparagraph (1) if disclosure ordered pursuant to subparagraph (2) incidentally
discloses by inference attorney mental processes otherwise protected under
subparagraph (1).
(4)
Limiting disclosure of mental processes. If a court orders discovery of work

product pursuant to subparagraph (2), the court must--insofar as possible--protect
against disclosure of the mental impressions, opinions, conclusions, or legal theories
not otherwise discoverable.
Exceptions. Even if made or prepared in anticipation of litigation or for trial, the following
is not work product protected from discovery:
(1)
information discoverable under Rule 192.3 concerning experts, trial witnesses,

witness statements, and contentions;
(2)
trial exhibits ordered disclosed under Rule 166 or Rule 190.4;
(3)
the name, address, and telephone number of any potential party or any person with
knowledge of relevant facts;
(4)
any photograph or electronic image of underlying facts (e.g., a photograph of the

accident scene) or a photograph or electronic image of any sort that a party intends
to offer into evidence; and
(5)
any work product created under circumstances within an exception to the attorneyclient privilege in Rule 503(d) of the Rules of Evidence.
Privilege. For purposes of these rules, an assertion that material or information is work
product is an assertion of privilege.
192.6 Protective Order.

(a)
Motion. A person from whom discovery is sought, and any other person affected by the
discovery request, may move within the time permitted for response to the discovery request
for an order protecting that person from the discovery sought. A person should not move for
protection when an objection to written discovery or an assertion of privilege is appropriate,
but a motion does not waive the objection or assertion of privilege. If a person seeks
protection regarding the time or place of discovery, the person must state a reasonable time
and place for discovery with which the person will comply. A person must comply with a
request to the extent protection is not sought unless it is unreasonable under the
circumstances to do so before obtaining a ruling on the motion.
(b)
Order. To protect the movant from undue burden, unnecessary expense, harassment,
annoyance, or invasion of personal, constitutional, or property rights, the court may make
any order in the interest of justice and may - among other things - order that:
(1)
the requested discovery not be sought in whole or in part;
(2)
the extent or subject matter of discovery be limited;
(3)
the discovery not be undertaken at the time or place specified;
(4)
the discovery be undertaken only by such method or upon such terms and conditions
or at the time and place directed by the court;
(5)
the results of discovery be sealed or otherwise protected, subject to the provisions of

Rule 76a.
192.7 Definitions.
As used in these rules
(a)
Written discovery means requests for disclosure, requests for production and
inspection of documents and tangible things, requests for entry onto property,
interrogatories, and requests for admission.
(b)
Possession, custody, or control of an item means that the person either has physical
possession of the item or has a right to possession of the item that is equal or superior
to the person who has physical possession of the item.
(c)
A testifying expert is an expert who may be called to testify as an expert witness at

trial.
(d)
A consulting expert is an expert who has been consulted, retained, or specially

employed by a party in anticipation of litigation or in preparation for trial, but who
is not a testifying expert.
RULE 193. WRITTEN DISCOVERY: RESPONSE; OBJECTION;

ASSERTION OF PRIVILEGE; SUPPLEMENTATION AND AMENDMENT;
FAILURE TO TIMELY RESPOND; PRESUMPTION OF AUTHENTICITY
193.1 Responding to Written Discovery; Duty to Make Complete Response.
A party must respond to written discovery in writing within the time provided by court order or these
rules. When responding to written discovery, a party must make a complete response, based on all
information reasonably available to the responding party or its attorney at the time the response is
made. The responding party's answers, objections, and other responses must be preceded by the
request to which they apply.
193.2 Objecting to Written Discovery

(a)
Form and time for objections. A party must make any objection to written discovery in
writing - either in the response or in a separate document - within the time for response. The
party must state specifically the legal or factual basis for the objection and the extent to
which the party is refusing to comply with the request.
(b)
Duty to respond when partially objecting; objection to time or place of production. A

party must comply with as much of the request to which the party has made no objection
unless it is unreasonable under the circumstances to do so before obtaining a ruling on the
objection. If the responding party objects to the requested time or place of production, the
responding party must state a reasonable time and place for complying with the request and
must comply at that time and place without further request or order.
(c)
Good faith basis for objection. A party may object to written discovery only if a good faith
factual and legal basis for the objection exists at the time the objection is made.
(d)
Amendment. An objection or response to written discovery may be amended or

supplemented to state an objection or basis that, at the time the objection or response initially
was made, either was inapplicable or was unknown after reasonable inquiry.
(e)
Waiver of objection. An objection that is not made within the time required, or that is
obscured by numerous unfounded objections, is waived unless the court excuses the waiver
for good cause shown.
(f)
No objection to preserve privilege. A party should not object to a request for written
discovery on the grounds that it calls for production of material or information that is
privileged but should instead comply with Rule 193.3. A party who objects to production of
privileged material or information does not waive the privilege but must comply with Rule
193.3 when the error is pointed out.
193.3 Asserting a Privilege

A party may preserve a privilege from written discovery in accordance with this subdivision.
(a)
(b)
Withholding privileged material or information. A party who claims that material

or information responsive to written discovery is privileged may withhold the
privileged material or information from the response. The party must state--in the
response (or an amended or supplemental response) or in a separate document--that:
(1)
information or material responsive to the request has been withheld,
(2)
the request to which the information or material relates, and
(3)
the privilege or privileges asserted.
Description of withheld material or information. After receiving a response

indicating that material or information has been withheld from production, the party
seeking discovery may serve a written request that the withholding party identify the
information and material withheld. Within 15 days of service of that request, the
withholding party must serve a response that:
(c)
(d)
(1)
describes the information or materials withheld that, without revealing the

privileged information itself or otherwise waiving the privilege, enables other
parties to assess the applicability of the privilege, and
(2)
asserts a specific privilege for each item or group of items withheld.
Exemption. Without complying with paragraphs (a) and (b), a party may withhold
a privileged communication to or from a lawyer or lawyer's representative or a
privileged document of a lawyer or lawyer's representative
(1)
created or made from the point at which a party consults a lawyer with a view
to obtaining professional legal services from the lawyer in the prosecution or
defense of a specific claim in the litigation in which discovery is requested,
and
(2)
concerning the litigation in which the discovery is requested.
Privilege not waived by production. A party who produces material or information

without intending to waive a claim of privilege does not waive that claim under these
rules or the Rules of Evidence if - within ten days or a shorter time ordered by the
court, after the producing party actually discovers that such production was made the producing party amends the response, identifying the material or information
produced and stating the privilege asserted. If the producing party thus amends the
response to assert a privilege, the requesting party must promptly return the specified
material or information and any copies pending any ruling by the court denying the
privilege.
193.4 Hearing and Ruling on Objections and Assertions of Privilege.

(a)
Hearing. Any party may at any reasonable time request a hearing on an objection or claim
of privilege asserted under this rule. The party making the objection or asserting the
privilege must present any evidence necessary to support the objection or privilege. The
evidence may be testimony presented at the hearing or affidavits served at least seven days
before the hearing or at such other reasonable time as the court permits. If the court
determines that an in camera review of some or all of the requested discovery is necessary,
that material or information must be segregated and produced to the court in a sealed
wrapper within a reasonable time following the hearing.
(b)
Ruling. To the extent the court sustains the objection or claim of privilege, the responding
party has no further duty to respond to that request. To the extent the court overrules the
objection or claim of privilege, the responding party must produce the requested material or
information within 30 days after the court's ruling or at such time as the court orders. A party
need not request a ruling on that party's own objection or assertion of privilege to preserve
the objection or privilege.
(c)
Use of material or information withheld under claim of privilege. A party may not use-at any hearing or trial--material or information withheld from discovery under a claim of
privilege, including a claim sustained by the court, without timely amending or
supplementing the party's response to that discovery.

193.5 Amending or Supplementing Responses to Written Discovery.
(a)
(b)
Duty to amend or supplement. If a party learns that the party's response to written
discovery was incomplete or incorrect when made, or, although complete and correct when
made, is no longer complete and correct, the party must amend or supplement the response:
(1)
to the extent that the written discovery sought the identification of persons with
knowledge of relevant facts, trial witnesses, or expert witnesses, and
(2)
to the extent that the written discovery sought other information, unless the
additional or corrective information has been made known to the other parties in
writing, on the record at a deposition, or through other discovery responses.
Time and form of amended or supplemental response. An amended or supplemental

response must be made reasonably promptly after the party discovers the necessity for such
a response. Except as otherwise provided by these rules, it is presumed that an amended or
supplemental response made less than 30 days before trial was not made reasonably
promptly. An amended or supplemental response must be in the same form as the initial
response and must be verified by the party if the original response was required to be
verified by the party, but the failure to comply with this requirement does not make the
amended or supplemental response untimely unless the party making the response refuses
to correct the defect within a reasonable time after it is pointed out.
193.6 Failing to Timely Respond - Effect on Trial

(a)
Exclusion of evidence and exceptions. A party who fails to make, amend, or supplement
a discovery response in a timely manner may not introduce in evidence the material or
information that was not timely disclosed, or offer the testimony of a witness (other than a
named party) who was not timely identified, unless the court finds that:
(1)
there was good cause for the failure to timely make, amend, or supplement the
discovery response; or
(2)
the failure to timely make, amend, or supplement the discovery response will not
unfairly surprise or unfairly prejudice the other parties.
(b)
Burden of establishing exception. The burden of establishing good cause or the lack of
unfair surprise or unfair prejudice is on the party seeking to introduce the evidence or call
the witness. A finding of good cause or of the lack of unfair surprise or unfair prejudice must
be supported by the record.
(c)
Continuance. Even if the party seeking to introduce the evidence or call the witness fails
to carry the burden under paragraph (b), the court may grant a continuance or temporarily
postpone the trial to allow a response to be made, amended, or supplemented, and to allow
opposing parties to conduct discovery regarding any new information presented by that
response.
193.7 Production of Documents Self-Authenticating
A party's production of a document in response to written discovery authenticates the document for
use against that party in any pretrial proceeding or at trial unless - within ten days or a longer or
shorter time ordered by the court, after the producing party has actual notice that the document will
be used - the party objects to the authenticity of the document, or any part of it, stating the specific
basis for objection. An objection must be either on the record or in writing and must have a good
faith factual and legal basis. An objection made to the authenticity of only part of a document does
not affect the authenticity of the remainder. If objection is made, the party attempting to use the
document should be given a reasonable opportunity to establish its authenticity.
RULE 194. REQUESTS FOR DISCLOSURE

194.1 Request.
A party may obtain disclosure from another party of the information or material listed in Rule 194.2
by serving the other party - no later than 30 days before the end of any applicable discovery period the following request: "Pursuant to Rule 194, you are requested to disclose, within 30 days of service
of this request, the information or material described in Rule [state rule, e.g., 194.2, or 194.2(a), (c),
and (f), or 194.2(d)-(g)]."
194.2 Content.
A party may request disclosure of any or all of the following:
(a)
the correct names of the parties to the lawsuit;
(b)
the name, address, and telephone number of any potential parties;
(c)
the legal theories and, in general, the factual bases of the responding party's claims
or defenses (the responding party need not marshal all evidence that may be offered
at trial);
(d)
the amount and any method of calculating economic damages;
(e)
the name, address, and telephone number of persons having knowledge of relevant
facts, and a brief statement of each identified person's connection with the case;
(f)
for any testifying expert:

(1)
the expert's name, address, and telephone number;
(2)
the subject matter on which the expert will testify;
(3)
the general substance of the expert's mental impressions and opinions and a
brief summary of the basis for them, or if the expert is not retained by,
employed by, or otherwise subject to the control of the responding party,
documents reflecting such information;
(4)
if the expert is retained by, employed by, or otherwise subject to the control
of the responding party:
(c)
Sanction against nonparty for violation of Rules 196.7 or 205.3. If a nonparty fails to
comply with an order under Rules 196.7 or 205.3, the court which made the order may treat
the failure to obey as contempt of court.
215.3 Abuse of Discovery Process in Seeking, Making, or Resisting Discovery.

If the court finds a party is abusing the discovery process in seeking, making or resisting discovery
or if the court finds that any interrogatory or request for inspection or production is unreasonably
frivolous, oppressive, or harassing, or that a response or answer is unreasonably frivolous or made
for purposes of delay, then the court in which the action is pending may, after notice and hearing,
impose any appropriate sanction authorized by paragraphs (1), (2), (3), (4), (5), and (8) of Rule
215.2(b). Such order of sanction shall be subject to review on appeal from the final judgment.
215.4 Failure to Comply with Rule 198
(a)
Motion. A party who has requested an admission under Rule 198 may move to determine
the sufficiency of the answer or objection. For purposes of this subdivision an evasive or
incomplete answer may be treated as a failure to answer. Unless the court determines that
an objection is justified, it shall order that an answer be served. If the court determines that
an answer does not comply with the requirements of Rule 198, it may order either that the
matter is admitted or that an amended answer be served. The provisions of Rule 215.1(d)
apply to the award of expenses incurred in relation to the motion.
(b)
Expenses on failure to admit. If a party fails to admit the genuineness of any document or
the truth of any matter as requested under Rule 198 and if the party requesting the
admissions thereafter proves the genuineness of the document or the truth of the matter, he
may apply to the court for an order requiring the other party to pay him the reasonable
expenses incurred in making that proof, including reasonable attorney fees. The court shall
make the order unless it finds that (1) the request was held objectionable pursuant to Rule
193, or (2) the admission sought was of no substantial importance, or (3) the party failing
to admit had a reasonable ground to believe that he might prevail on the matter, or (4) there
was other good reason for the failure to admit.
215.5 Failure of Party or Witness to Attend to or Serve Subpoena; Expenses.

(a)
Failure of party giving notice to attend. If the party giving the notice of the taking of an
oral deposition fails to attend and proceed therewith and another party attends in person or
by attorney pursuant to the notice, the court may order the party giving the notice to pay such
other party the reasonable expenses incurred by him and his attorney in attending, including
reasonable attorney fees.
(b)
Failure of witness to attend. If a party gives notice of the taking of an oral deposition of
a witness and the witness does not attend because of the fault of the party giving the notice,
if another party attends in person or by attorney because he expects the deposition of that
witness to be taken, the court may order the party giving the notice to pay such other party
the reasonable expenses incurred by him and his attorney in attending, including reasonable
attorney fees.
215.6 Exhibits to Motions and Responses.
Motions or responses made under this rule may have exhibits attached including affidavits,
discovery pleadings, or any other documents.
SECTION 10. - THE JURY IN COURT

RULE 216. REQUEST AND FEE FOR JURY TRIAL
a.
Request. No jury trial shall be had in any civil suit, unless a written request for a jury trial
is filed with the clerk of the court a reasonable time before the date set for trial of the cause
on the non-jury docket, but not less than thirty days in advance.
b.
Jury Fee. Unless otherwise provided by law, a fee of ten dollars if in the district court and
five dollars if in the county court must be deposited with the clerk of the court within the
time for making a written request for a jury trial. The clerk shall promptly enter a notation
of the payment of such fee upon the court's docket sheet.
RULE 217. OATH OF INABILITY

The deposit for a jury fee shall not be required when the party shall within the time for making such
deposit, file with the clerk his affidavit to the effect that he is unable to make such deposit, and that
he can not, by the pledge of property or otherwise, obtain the money necessary for that purpose; and
the court shall then order the clerk to enter the suit on the jury docket.
RULE 218. JURY DOCKET

The clerks of the district and county courts shall each keep a docket, styled "The Jury Docket," in
which shall be entered in their order the cases in which jury fees have been paid or affidavit in lieu
thereof has been filed as provided in the two preceding rules.
RULE 219. JURY TRIAL DAY

The court shall designate the days for taking up the jury docket and the trial of jury cases. Such order
may be revoked or changed in the court's discretion.
RULE 220. WITHDRAWING CAUSE FROM JURY DOCKET

When any party has paid the fee for a jury trial, he shall not be permitted to withdraw the cause from
the jury docket over the objection of the parties adversely interested. If so permitted, the court in its
discretion may by an order permit him to withdraw also his jury fee deposit. Failure of a party to
appear for trial shall be deemed a waiver by him of the right to trial by jury.
RULE 221. CHALLENGE TO THE ARRAY

When the jurors summoned have not been selected by jury commissioners or by drawing the names
TEXAS DISCIPLINARY RULES OF PROFESSIONAL

CONDUCT
Table of Contents
Page
Preamble: A Lawyers Responsibilities
Preamble: Scope
Terminology
3
4
6
I. CLIENT-LAWYER RELATIONSHIP
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
Competent and Diligent Representation

Scope and Objectives of Representation
Communication
Fees
Confidentiality of Information
Conflict of Interest: General Rule
Conflict of Interest: Intermediary
Conflict of Interest: Prohibited Transactions
Conflict of Interest: Former Client
Successive Government and Private Employment
Adjudicatory Official or Law Clerk
Organization as a Client
Conflicts: Public Interest Activities
Safekeeping Property
Declining or Terminating Representation
7
9
12
13
19
25
30
32
35
38
40
41
45
46
47
II. COUNSELOR
2.01
2.02
Advisor
Evaluation for use by Third Persons
50
51
III. ADVOCATE
3.01
3.02
3.03
3.04
3.05
3.06
52
53
55
58
61
62
Meritorious Claims and Contentions

Minimizing the Burdens and Delays of Litigation
Candor Toward the Tribunal
Fairness in Adjudicatory Proceedings
Maintaining Impartiality of Tribunal
Maintaining Integrity of Jury System
3.07
3.08
3.09
3.10
Trial Publicity
Lawyer as Witness
Special Responsibilities of a Prosecutor
Advocate in Non-adjudicative Proceedings
63
66
68
70
IV. NON-CLIENT RELATIONSHIPS

4.01
4.02
4.03
4.04
Truthfulness in Statements to Others

Communications with One Represented by Counsel
Dealing With Unrepresented Persons
Respect for Rights of Third Persons
70
71
73
73
V. LAW FIRMS AND ASSOCIATIONS

5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
Responsibilities of a Partner or Supervisory Lawyer

Responsibilities of a Supervised Lawyer
Responsibilities Regarding Nonlawyer Assistants
Professional Independence of a Lawyer
Unauthorized Practice of Law
Restrictions on Right to Practice
74
75
77
78
80
81
81
81
Prohibited Discriminatory Activities
VI. PUBLIC SERVICE

6.01
Accepting Appointments by a Tribunal
82
VII. INFORMATION ABOUT LEGAL SERVICES

7.01
7.02
7.03
7.04
7.05
7.06
7.07
Firm Names and Letterhead

Communications Concerning a Lawyers Services
Prohibited Solicitations and Payments
Advertisements and the Media
Prohibited Written Solicitations
Prohibited Employment
Filing Requirements for Public Advertisements and Written Solicitations
83
85
88
90
97
101
102
VIII. MAINTAINING THE INTEGRETY OF THE PROFESSION

8.01
8.02
8.03
8.04
8.05
Bar Admission, Reinstatement, and Disciplinary Matters

Judicial and Legal Officials
Reporting Professional Misconduct
Misconduct
Jurisdiction
107
108
108
110
112
IX. SEVERABILITY OF RULES

9.01
Severability
113
TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT

Preamble: A Lawyer's Responsibilities
1. A lawyer is a representative of clients, an officer of the legal system and a public citizen
having special responsibility for the quality of justice. Lawyers, as guardians of the law, play a
vital role in the preservation of society. The fulfillment of this role requires an understanding
by lawyers of their relationship with and function in our legal system. A consequent obligation
of lawyers is to maintain the highest standards of ethical conduct.
2. As a representative of clients, a lawyer performs various functions. As advisor, a lawyer
provides a client with an informed understanding of the clients legal rights and obligations and
explains their practical implications. As advocate, a lawyer zealously asserts the clients position
under the rules of the adversary system. As negotiator, a lawyer seeks a result advantageous to
the client but consistent with requirements of honest dealing with others. As intermediary
between clients, a lawyer seeks to reconcile their divergent interests as an advisor and, to a
limited extent, as a spokesperson for each client. A lawyer acts as evaluator by examining a
client's affairs and reporting about them to the client or to others.
3. In all professional functions, a lawyer should zealously pursue clients interests within the
bounds of the law. In doing so, a lawyer should be competent, prompt and diligent. A lawyer
should maintain communication with a client concerning the representation. A lawyer should
keep in confidence information relating to representation of a client except so far as disclosure
is required or permitted by the Texas Disciplinary Rules of Professional Conduct or other law.
4. A lawyers conduct should conform to the requirements of the law, both in professional
service to clients and in the lawyers business and personal affairs. A lawyer should use the laws
procedures only for legitimate purposes and not to harass or intimidate others. A lawyer should
demonstrate respect for the legal system and for those who serve it, including judges, other
lawyers and public officials. While it is a lawyers duty, when necessary, to challenge the
rectitude of official action, it is also a lawyers duty to uphold legal process.
5. As a public citizen, a lawyer should seek improvement of the law, the administration of
justice and the quality of service rendered by the legal profession. As a member of a learned
profession, a lawyer should cultivate knowledge of the law beyond its use for clients, employ
that knowledge in reform of the law and work to strengthen legal education. A lawyer should be
mindful of deficiencies in the administration of justice and of the fact that the poor, and
sometimes persons who are not poor, cannot afford adequate legal assistance, and should
therefore devote professional time and civic influence in their behalf. A lawyer should aid the
legal profession in pursuing these objectives and should help the bar regulate itself in the public
interest.
6. A lawyer should render public interest legal service. The basic responsibility for providing
legal services for those unable to pay ultimately rests upon the individual lawyer, and personal
4
involvement in the problems of the disadvantages can be one of the most rewarding experiences
in the life of a lawyer. Every lawyer, regardless of professional prominence or professional
workload, should find time to participate in or otherwise support the provision of legal services
to the disadvantaged. The provision of free legal services to those unable to pay reasonable fees
is a moral obligation of each lawyer as well as the profession generally. A lawyer may discharge
this basic responsibility by providing public interest legal services without fee, or at a
substantially reduced fee, in one or more of the following areas: poverty law, civil rights law,
public rights law, charitable organization representation, the administration of justice, and by
financial support for organizations that provide legal services to persons of limited means.
7. In the nature of law practice, conflicting responsibilities are encountered. Virtually all
difficult ethical problems arise from apparent conflict between a lawyers responsibilities to
clients, to the legal system and to the lawyers own interests. The Texas Disciplinary Rules of
Professional Conduct prescribe terms for resolving such tensions. They do so by stating
minimum standards of conduct below which no lawyer can fall without being subject to
disciplinary action. Within the framework of these Rules many difficult issues of professional
discretion can arise. The Rules and their Comments constitute a body of principles upon which
the lawyer can rely for guidance in resolving such issues through the exercise of sensitive
professional and moral judgment. In applying these rules, lawyers may find interpretive
guidance in the principles developed in the Comments.
8. The legal profession has a responsibility to assure that its regulation is undertaken in the
public interest rather than in furtherance of parochial or self-interested concerns of the bar, and
to insist that every lawyer both comply with its minimum disciplinary standards and aid in
securing their observance by other lawyers. Neglect of these responsibilities compromises the
independence of the profession and the public interest which it serves.
9. Each lawyers own conscience is the touchstone against which to test the extent to which his
actions may rise above the disciplinary standards prescribed by these rules. The desire for the
respect and confidence of the members of the profession and of the society which it serves
provides the lawyer the incentive to attain the highest possible degree of ethical conduct. The
possible loss of that respect and confidence is the ultimate sanction. So long as its practitioners
are guided by these principles, the law will continue to be a noble profession. This is its
greatness and its strength, which permit of no compromise.
Preamble: Scope
10. The Texas Disciplinary Rules of Professional Conduct are rules of reason. The Texas
Disciplinary Rules of Professional Conduct define proper conduct for purposes of professional
discipline. They are imperatives, cast in the terms shall or shall not. The comments are cast
often in the terms of may or should and are permissive, defining areas in which the lawyer has
professional discretion. When a lawyer exercises such discretion, whether by acting or not
acting, no disciplinary action may be taken. The Comments also frequently illustrate or explain
applications of the rules, in order to provide guidance for interpreting the rules and for
practicing in compliance with the spirit of the rules. The Comments do not, however, add
5
obligations to the rules and no disciplinary action may be taken for failure to conform to the
Comments.
11. The rules presuppose a larger legal context shaping the lawyers role. That context
includes court rules and statutes relating to matters of licensure, laws defining specific
obligations of lawyers and substantive and procedural law in general. Compliance with the
rules, as with all law in an open society, depends primarily upon understanding and voluntary
compliance, secondarily upon reinforcement by peer and public opinion and finally, when
necessary, upon enforcement through disciplinary proceedings. The rules and Comments do
not, however, exhaust the moral and ethical considerations that should guide a lawyer, for no
worthwhile human activity can be completely defined by legal rules.
12. Most of the duties flowing from the client-lawyer relationship attach only after the client has
requested the lawyer to render legal services and the lawyer has agreed to do so. For purposes of
determining the lawyers authority and responsibility, individual circumstances and principles
of substantive law external to these rules determine whether a client-lawyer relationship may be
found to exist. But there are some duties, such as of that of confidentiality, that may attach
before a client-lawyer relationship has been established.
13. The responsibilities of government lawyers, under various legal provisions, including
constitutional, statutory and common law, may include authority concerning legal matters that
ordinarily reposes in the client in private client-lawyer relationships. For example, a lawyer for a
government agency may have authority on behalf of the government to decide upon settlement
or whether to appeal from an adverse judgment. Such authority in various respects is generally
vested in the attorney general and the states attorney in state government, and their federal
counterparts, and the same may be true of other government law officers. Also, lawyers under
the supervision of these officers may be authorized to represent several government agencies in
intragovernmental legal controversies in circumstances where a private lawyer could not
represent multiple private clients. They also may have authority to represent the public interest
in circumstances where a private lawyer would not be authorized to do so. These rules do not
abrogate any such authority.
14. These rules make no attempt to prescribe either disciplinary procedures or penalties for
violation of a rule.
15. These rules do not undertake to define standards of civil liability of lawyers for professional
conduct. Violation of a rule does not give rise to a private cause of action nor does it create any
presumption that a legal duty to a client has been breached. Likewise, these rules are not
designed to be standards for procedural decisions. Furthermore, the purpose of these rules can
be abused when they are invoked by opposing parties as procedural weapons. The fact that a
rule is a just basis for a lawyers self-assessment, or for sanctioning a lawyer under the
administration of a disciplinary authority, does not imply that an antagonist in a collateral
proceeding or transaction has standing to seek enforcement of the rule. Accordingly, nothing in
the rules should be deemed to augment any substantive legal duty of lawyers or the extradisciplinary consequences of violating such a duty.
6
(2) Whether fees will be divided based on the proportion of services performed or by
lawyers agreeing to assume joint responsibility for the representation, and
(3) The share of the fee that each lawyer or law firm will receive or the basis on which
the division will be made if the division is based on proportion of service performed.
Consent by a client or prospective client to the referral to or association of other
counsel, made prior to any actual such referral or association but without knowledge of
the information specified in subparagraph (f)(2), does not constitute sufficient client
confirmation within the meaning of this rule. The referring or associating lawyer or
any other lawyer who employs another lawyer to assist in the representation has the
primary duty to ensure full disclosure and compliance with this rule.
16. Paragraph (g) facilitates the enforcement of the requirements of paragraph (f). It does so by
providing that agreements that authorize an attorney either to refer a persons case to another
lawyer, or to associate other counsel in the handling of a clients case, and that actually result in
such a referral or association with counsel in a different law firm from the one entering into the
agreement, must be confirmed by an arrangement between the person and the lawyers involved
that conforms to paragraph (f). As noted there, that arrangement must be presented to and
agreed to by the person before the referral or association between the lawyers involved occurs.
See subparagraph (f)(2). Because paragraph (g) refers to the party whose matter is involved as a
person rather than as a client, it is not possible to evade its requirements by having a
referring lawyer not formally enter into an attorney-client relationship with the person involved
before referring that persons matter to other counsel. Paragraph (g) does provide, however, for
recovery in quantum meruit in instances where its requirements are not met. See
subparagraphs (g)(1) and (g)(2).
17. What should be done with any otherwise agreed-to fee that is forfeited in whole or in part
due to a lawyers failure to comply with paragraph (g) is not resolved by these rules.
18. Subparagraph (f)(3) requires that the aggregate fee charged to clients in connection with a
given matter by all of the lawyers involved meet the standards of paragraph (a)that is, not be
unconscionable.
Fee Disputes and Determinations
19. If a procedure has been established for resolution of fee disputes, such as an arbitration or
mediation procedure established by a bar association, the lawyer should conscientiously
consider submitting to it. Law may prescribe a procedure for determining a lawyers fee, for
example, in representation of an executor or administrator, or when a class or a person is
entitled to recover a reasonable attorneys fee as part of the measure of damages. All involved
lawyers should comply with any prescribed procedures.
Rule 1.05 Confidentiality of Information
21
(a) Confidential information includes both privileged information and unprivileged client
information. Privileged information refers to the information of a client protected by the
lawyer-client privilege of Rule 5.03 of the Texas Rules of Evidence or of Rule 5.03 of the Texas
Rules of Criminal Evidence or by the principles of attorney-client privilege governed by Rule
5.01 of the Federal Rules of Evidence for United States Courts and Magistrates. Unprivileged
client information means all information relating to a client or furnished by the client, other
than privileged information, acquired by the lawyer during the course of or by reason of the
representation of the client.
(b) Except as permitted by paragraphs (c) and (d), or as required by paragraphs (e), and (f), a
lawyer shall not knowingly:
1) Reveal confidential information of a client or a former client to:
(i) a person that the client has instructed is not to receive the information; or
(ii) anyone else, other than the client, the clients representatives, or the
members, associates, or employees of the lawyers law firm.
2) Use confidential information of a client to the disadvantage of the client unless the
client consents after consultations.
(3) Use confidential information of a former client to the disadvantage of the former
client after the representation is concluded unless the former client consents after
consultation or the confidential information has become generally known.
(4) Use privileged information of a client for the advantage of the lawyer or of a third
person, unless the client consents after consultation.
(c) A lawyer may reveal confidential information:
(1) When the lawyer has been expressly authorized to do so in order to carry out the
representation.
(2) When the client consents after consultation.
(3) To the client, the clients representatives, or the members, associates, and employees
of the lawyers firm, except when otherwise instructed by the client.
(4) When the lawyer has reason to believe it is necessary to do so in order to comply
with a court order, a Texas Disciplinary Rule of Professional Conduct, or other law.
(5) To the extent reasonably necessary to enforce a claim or establish a defense on
behalf of the lawyer in a controversy between the lawyer and the client.
22
(6) To establish a defense to a criminal charge, civil claim or disciplinary complaint

against the lawyer or the lawyers associates based upon conduct involving the client or
the representation of the client.
(7) When the lawyer has reason to believe it is necessary to do so in order to prevent the
client from committing a criminal or fraudulent act.
(8) To the extent revelation reasonably appears necessary to rectify the consequences of
a clients criminal or fraudulent act in the commission of which the lawyers services
had been used.
(d) A lawyer also may reveal unprivileged client information.
(1) When impliedly authorized to do so in order to carry out the representation.
(2) When the lawyer has reason to believe it is necessary to do so in order to:
(i) carry out the representation effectively;
(ii) defend the lawyer or the lawyers employees or associates against a claim of
wrongful conduct;
(iii) respond to allegations in any proceeding concerning the lawyers
representation of the client; or
(iv) prove the services rendered to a client, or the reasonable value thereof, or
both, in an action against another person or organization responsible for the
payment of the fee for services rendered to the client.
(e) When a lawyer has confidential information clearly establishing that a client is likely to
commit a criminal or fraudulent act that is likely to result in death or substantial bodily harm
to a person, the lawyer shall reveal confidential information to the extent revelation reasonably
appears necessary to prevent the client from committing the criminal or fraudulent act.
(f) A lawyer shall reveal confidential information when required to do so by Rule 3.03(a)(2),
3.03(b), or by Rule 4.01(b).
Comment:
Confidentiality Generally
1. Both the fiduciary relationship existing between lawyer and client and the proper functioning
of the legal system require the preservation by the lawyer of confidential information of one
who has employed or sought to employ the lawyer. Free discussion should prevail between
lawyer and client in order for the lawyer to be fully informed and for the client to obtain the
23
full benefit of the legal system. The ethical obligation of the lawyer to protect the confidential
information of the client not only facilitates the proper representation of the client but also
encourages potential clients to seek early legal assistance.
2. Subject to the mandatory disclosure requirements of paragraphs (e) and (f) the lawyer
generally should be required to maintain confidentiality of information acquired by the lawyer
during the course of or by reason of the representation of the client. This principle involves an
ethical obligation not to use the information to the detriment of the client or for the benefit of
the lawyer or a third person. In regard to an evaluation of a matter affecting a client for use by a
third person, see Rule 2.02.
3. The principle of confidentiality is given effect not only in the Texas Disciplinary Rules of
Professional Conduct but also in the law of evidence regarding the attorney-client privilege and
in the law of agency. The attorney-client privilege, developed through many decades, provides
the client a right to prevent certain confidential communications from being revealed by
compulsion of law. Several sound exceptions to confidentiality have been developed in the
evidence law of privilege. Exceptions exist in evidence law where the services of the lawyer were
sought or used by a client in planning or committing a crime or fraud as well as where issues
have arisen as to breach of duty by the lawyer or by the client to the other.
4. Rule 1.05 reinforces the principles of evidence law relating to the attorney-client privilege.
Rule 1.05 also furnishes considerable protection to other information falling outside the scope
of the privilege Rule 1.05 extends ethical protection generally to unprivileged information
relating to the client or furnished by the client during the course of or by reason of the
representation of the client. In this respect Rule 1.05 accords with general fiduciary principles
of agency.
5. The requirement of confidentiality applies to government lawyers who may disagree with the
policy goals that their representation is designed to advance.
Disclosure for Benefit of Client
6. A lawyer may be expressly authorized to make disclosures to carry out the representation and
generally is recognized as having implied-in-fact authority to make disclosures about a client
when appropriate in carrying out the representation to the extent that the clients instructions
do not limit that authority. In litigation, for example, a lawyer may disclose information by
admitting a fact that cannot properly be disputed, or in negotiation by making a disclosure that
facilitates a satisfactory conclusion. The effect of Rule 1.05 is to require the lawyer to invoke,
for the client, the attorney-client privilege when applicable; but if the court improperly denies
the privilege, under paragraph (c)(4) the lawyer may testify as ordered by the court or may test
the ruling as permitted by Rule 3.04(d).
7. In the course of a firms practice, lawyers may disclose to each other and to appropriate
employees information relating to a client, unless the client has instructed that particular
24
information be confined to specified lawyers. Sub-paragraphs (b)(l) and (c)(3) continue these
practices concerning disclosure of confidential information within the firm.
Use of Information
8. Following sound principles of agency law, sub-paragraphs (b)(2) and (4) subject a lawyer to
discipline for using information relating to the representation in a manner disadvantageous to
the client or beneficial to the lawyer or a third person, absent the informed consent of the
client. The duty not to misuse client information continues after the client-lawyer relationship
has terminated. Therefore, the lawyer is forbidden by sub-paragraph (b)(3) to use, in absence of
the clients informed consent, confidential information of the former client to the clients
disadvantage, unless the information is generally known.
Discretionary Disclosure Adverse to Client

9. In becoming privy to information about a client, a lawyer may foresee that the client intends
serious and perhaps irreparable harm. To the extent a lawyer is prohibited from making
disclosure, the interests of the potential victim are sacrificed in favor of preserving the clients
information-usually unprivileged information-even though the clients purpose is wrongful. On
the other hand, a client who knows or believes that a lawyer is required or permitted to disclose
a clients wrongful purposes may be inhibited from revealing facts which would enable the
lawyer to counsel effectively against wrongful action. Rule 1.05 thus involves balancing the
interests of one group of potential victims against those of another. The criteria provided by the
Rule are discussed below.
10. Rule 5.03 (d)(l) Texas Rules of Civil Evidence (Tex. R. Civ. Evid.), and Rule 5.03(d)(1),
Texas Rules of Criminal Evidence (Tex R. Crim. Evid.), indicate the underlying public policy of
furnishing no protection to client information where the client seeks or uses the services of the
lawyer to aid in the commission of a crime or fraud. That public policy governs the dictates of
Rule 1.05. Where the client is planning or engaging in criminal or fraudulent conduct or where
the culpability of the lawyers conduct is involved, full protection of client information is not
justified.
11. Several other situations must be distinguished. First, the lawyer may not counsel or assist a
client in conduct that is criminal or fraudulent. See Rule 1.02(c). As noted in the Comment to
that Rule there can be situations where the lawyer may have to reveal information relating to
the representation in order to avoid assisting a clients criminal or fraudulent conduct, and subparagraph (c)(4) permits doing so. A lawyers duty under Rule 3.03(a) not to use false or
fabricated evidence is a special instance of the duty prescribed in Rule 1.02(c) to avoid assisting
a client in criminal or fraudulent conduct, and sub-paragraph (c)(4) permits revealing
information necessary to comply with Rule 3.03(a) or (b). The same is true of compliance with
Rule 4.01. See also paragraph (f).
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12. Second, the lawyer may have been innocently involved in past conduct by the client that
was criminal or fraudulent. In such a situation the lawyer has not violated Rule 1.02(c), because
to counsel or assist criminal or fraudulent conduct requires knowing that the conduct is of that
character. Since the lawyers services were made an instrument of the clients crime or fraud,
the lawyer has a legitimate interest both in rectifying the consequences of such conduct and in
avoiding charges that the lawyers participation was culpable. Sub-paragraph (c)(6) and (8) give
the lawyer professional discretion to reveal both unprivileged and privileged information in
order to serve those interests. See paragraph (g). In view of Tex. R. Civ. Evid. Rule 5.03(d)(1),
and Tex. R. Crim. Evid. 5.03(d)(1), however, rarely will such information be privileged.
13. Third, the lawyer may learn that a client intends prospective conduct that is criminal or
fraudulent. The lawyers knowledge of the clients purpose may enable the lawyer to prevent
commission of the prospective crime or fraud. When the threatened injury is grave, the lawyers
interest in preventing the harm may be more compelling than the interest in preserving
confidentiality of information. As stated in sub-paragraph (c)(7), the lawyer has professional
discretion, based on reasonable appearances, to reveal both privileged and unprivileged
information in order to prevent the clients commission of any criminal or fraudulent act. In
some situations of this sort, disclosure is mandatory. See paragraph (e) and Comments 18-20.
14. The lawyers exercise of discretion under paragraphs (c) and (d) involves consideration of
such factors as the magnitude, proximity, and likelihood of the contemplated wrong, the nature
of the lawyers relationship with the client and with those who might be injured by the client,
the lawyers own involvement in the transaction, and factors that may extenuate the clients
conduct in question. In any case a disclosure adverse to the clients interest should be no
greater than the lawyer believes necessary to the purpose. Although preventive action is
permitted by paragraphs (c) and (d), failure to take preventive action does not violate those
paragraphs. But see paragraphs (e) and (f). Because these rules do not define standards of civil
liability of lawyers for professional conduct, paragraphs (c) and (d) do not create a duty on the
lawyer to make any disclosure and no civil liability is intended to arise from the failure to make
such disclosure.
15. A lawyer entitled to a fee necessarily must be permitted to prove the services rendered in an
action to collect it, and this necessity is recognized by sub-paragraphs (c)(5) and (d)(2)(iv). This
aspect of the rule, in regard to privileged information, expresses the principle that the
beneficiary of a fiduciary relationship may not exploit the relationship to the detriment of the
fiduciary. Any disclosure by the lawyer, however, should be as protective of the clients interests
as possible.
16. If the client is an organization, a lawyer also should refer to Rule 1.12 in order to determine
the appropriate conduct in connection with this Rule.
Client Under a Disability
17. In some situations, Rule 1.02(g) requires a lawyer representing a client under a disability to
seek the appointment of a legal representative for the client or to seek other orders for the
26
protection of the client. The client may or may not, in a particular matter, effectively consent to
the lawyers revealing to the court confidential information and facts reasonably necessary to
secure the desired appointment or order. Nevertheless, the lawyer is authorized by paragraph
(c)(4) to reveal such information in order to comply with Rule 1.02(g). See also paragraph 5,
Comment to Rule 1.03.
Mandatory Disclosure Adverse to Client
18. Rule l.05(e) and (f) place upon a lawyer professional obligations in certain situations to
make disclosure in order to prevent certain serious crimes by a client or to prevent involvement
by the lawyer in a clients crimes or frauds. Except when death or serious bodily harm is likely
to result, a lawyers obligation is to dissuade the client from committing the crime or fraud or to
persuade the client to take corrective action; see Rule 1.02 (d) and (e).
19. Because it is very difficult for a lawyer to know when a clients criminal or fraudulent
purpose actually will be carried out, the lawyer is required by paragraph (e) to act only if the
lawyer has information clearly establishing the likelihood of such acts and consequences. If the
information shows clearly that the clients contemplated crime or fraud is likely to result in
death or serious injury, the lawyer must seek to avoid those lamentable results by revealing
information necessary to prevent the criminal or fraudulent act. When the threatened crime or
fraud is likely to have the less serious result of substantial injury to the financial interests or
property of another, the lawyer is not required to reveal preventive information but may do so
in conformity to paragraph (c) (7). See also paragraph (f); Rule 1.02 (d) and (e); and Rule 3.03
(b) and (c).
20. Although a violation of paragraph (e) will subject a lawyer to disciplinary action, the lawyers
decisions whether or how to act should not constitute grounds for discipline unless the lawyers
conduct in the light of those decisions was unreasonable under all existing circumstances as
they reasonably appeared to the lawyer. This construction necessarily follows from the fact that
paragraph (e) bases the lawyers affirmative duty to act on how the situation reasonably appears
to the lawyer, while that imposed by paragraph (f) arises only when a lawyer knows that the
lawyers services have been misused by the client. See also Rule 3.03(b).
Withdrawal
21. If the lawyers services will be used by the client in materially furthering a course of criminal
or fraudulent conduct, the lawyer must withdraw, as stated in Rule l.l5(a)(l). After withdrawal, a
lawyers conduct continues to be governed by Rule 1.05. However, the lawyers duties of
disclosure under paragraph (e) of the Rule, insofar as such duties are mandatory, do not survive
the end of the relationship even though disclosure remains permissible under paragraphs (6),
(7), and (8) if the further requirements of such paragraph are met. Neither this Rule nor Rule
1.15 prevents the lawyer from giving notice of the fact of withdrawal, and no rule forbids the
lawyer to withdraw or disaffirm any opinion, document, affirmation, or the like.
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Other Rules
22. Various other Texas Disciplinary Rules of Professional Conduct permit or require a lawyer
to disclose information relating to the representation. See Rules 1.07, 1.12, 2.02, 3.03 and
4.01. In addition to these provisions, a lawyer may be obligated by other provisions of statutes
or other law to give information about a client. Whether another provision of law supersedes
Rule 1.05 is a matter of interpretation beyond the scope of these Rules, but sub-paragraph (c)(4)
protects the lawyer from discipline who acts on reasonable belief as to the effect of such laws.
Rule 1.06 Conflict of Interest: General Rule
(a) A lawyer shall not represent opposing parties to the same litigation.
(b) In other situations and except to the extent permitted by paragraph (c), a lawyer shall not
represent a person if the representation of that person:
(1) involves a substantially related matter in which that persons interests are materially
and directly adverse to the interests of another client of the lawyer or the lawyers firm;
or
(2) reasonably appears to be or become adversely limited by the lawyers or law firm's
responsibilities to another client or to a third person or by the lawyers or law firms own
interests.
(c) A lawyer may represent a client in the circumstances described in (b) if:
(1) the lawyer reasonably believes the representation of each client will not be materially
affected; and
(2) each affected or potentially affected client consents to such representation after full
disclosure of the existence, nature, implications, and possible adverse consequences of
the common representation and the advantages involved, if any.
(d) A lawyer who has represented multiple parties in a matter shall not thereafter represent any
of such parties in a dispute among the parties arising out of the matter, unless prior consent is
obtained from all such parties to the dispute.
(e) If a lawyer has accepted representation in violation of this Rule, or if multiple representation
properly accepted becomes improper under this Rule, the lawyer shall promptly withdraw from
one or more representations to the extent necessary for any remaining representation not to be
in violation of these Rules.
(f) If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other
lawyer while a member or associated with that lawyer's firm may engage in that conduct.
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Comment:
Loyalty to a Client
1. Loyalty is an essential element in the lawyers relationship to a client. An impermissible
conflict of interest may exist before representation is undertaken, in which event the
representation should be declined. If such a conflict arises after representation has been
undertaken, the lawyer must take effective action to eliminate the conflict, including
withdrawal if necessary to rectify the situation. See also Rule 1.16. When more than one client
is involved and the lawyer withdraws because a conflict arises after representation, whether the
lawyer may continue to represent any of the clients is determined by this Rule and Rules 1.05
and 1.09. See also Rule 1.07(c). Under this Rule, any conflict that prevents a particular lawyer
from undertaking or continuing a representation of a client also prevents any other lawyer who
is or becomes a member of or an associate with that lawyers firm from doing so. See paragraph
(f).
2. A fundamental principle recognized by paragraph (a) is that a lawyer may not represent
opposing parties in litigation. The term opposing parties as used in this Rule contemplates a
situation where a judgment favorable to one of the parties will directly impact unfavorably upon
the other party. Moreover, as a general proposition loyalty to a client prohibits undertaking
representation directly adverse to the representation of that client in a substantially related
matter unless that clients fully informed consent is obtained and unless the lawyer reasonably
believes that the lawyers representation will be reasonably protective of that clients interests.
Paragraphs (b) and (c) express that general concept.
Conflicts in Litigation
3. Paragraph (a) prohibits representation of opposing parties in litigation. Simultaneous
representation of parties whose interests in litigation are not actually directly adverse but where
the potential for conflict exists, such as co-plaintiffs or co-defendants, is governed by paragraph
(b). An impermissible conflict may exist or develop by reason of substantial discrepancy in the
partys testimony, incompatibility in positions in relation to an opposing party or the fact that
there are substantially different possibilities of settlement of the claims or liabilities in question.
Such conflicts can arise in criminal cases as well as civil. The potential for conflict of interest in
representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should
decline to represent more than one co-defendant. On the other hand, common representation
of persons having similar interests is proper if the risk of adverse effect is minimal and the
requirements of paragraph (b) are met. Compare Rule 1.07 involving intermediation between
clients.
Conflict with Lawyers Own Interests
4. Loyalty to a client is impaired not only by the representation of opposing parties in situations
within paragraphs (a) and (b)(l) but also in any situation when a lawyer may not be able to
consider, recommend or carry out an appropriate course of action for one client because of the
29
lawyers own interests or responsibilities to others. The conflict in effect forecloses alternatives
that would otherwise be available to the client. Paragraph (b)(2) addresses such situations. A
potential possible conflict does not itself necessarily preclude the representation. The critical
questions are the likelihood that a conflict exists or will eventuate and, if it does, whether it will
materially and adversely affect the lawyers independent professional judgment in considering
alternatives or foreclose courses of action that reasonably should be pursued on behalf of the
client. It is for the client to decide whether the client wishes to accommodate the other interest
involved. However, the clients consent to the representation by the lawyer of another whose
interests are directly adverse is insufficient unless the lawyer also believes that there will be no
materially adverse effect upon the interests of either client. See paragraph (c).
5. The lawyers own interests should not be permitted to have adverse effect on representation
of a client, even where paragraph (b)(2) is not violated. For example, a lawyers need for income
should not lead the lawyer to undertake matters that cannot be handled competently and at a
reasonable fee. See Rules 1.01 and 1.04. If the probity of a lawyers own conduct in a
transaction is in question, it may be difficult for the lawyer to give a client detached advice. A
lawyer should not allow related business interests to affect representation, for example, by
referring clients to an enterprise in which the lawyer has an undisclosed interest.
Meaning of Directly Adverse
6. Within the meaning of Rule 1.06(b), the representation of one client is directly adverse to
the representation of another client if the lawyers independent judgment on behalf of a client
or the lawyers ability or willingness to consider, recommend or carry out a course of action will
be or is reasonably likely to be adversely affected by the lawyers representation of, or
responsibilities to, the other client. The dual representation also is directly adverse if the lawyer
reasonably appears to be called upon to espouse adverse positions in the same matter or a
related matter. On the other hand, simultaneous representation in unrelated matters of clients
whose interests are only generally adverse, such as competing economic enterprises, does not
constitute the representation of directly adverse interests. Even when neither paragraph (a) nor
(b) is applicable, a lawyer should realize that a business rivalry or personal differences between
two clients or potential clients may be so important to one or both that one or the other would
consider it contrary to its interests to have the same lawyer as its rival even in unrelated matters;
and in those situations a wise lawyer would forego the dual representation.
Full Disclosure and Informed Consent
7. A client under some circumstances may consent to representation notwithstanding a conflict
or potential conflict. However, as indicated in paragraph (c)(l), when a disinterested lawyer
would conclude that the client should not agree to the representation under the circumstances,
the lawyer involved should not ask for such agreement or provide representation on the basis of
the clients consent. When more than one client is involved, the question of conflict must be
resolved as to each client. Moreover, there may be circumstances where it is impossible to make
the full disclosure necessary to obtain informed consent. For example, when the lawyer
represents different clients in related matters and one of the clients refuses to consent to the
30
disclosure necessary to permit the other client to make an informed decision, the lawyer cannot
properly ask the latter to consent.
8. Disclosure and consent are not formalities. Disclosure sufficient for sophisticated clients may
not be sufficient to permit less sophisticated clients to provide fully informed consent. While it
is not required that the disclosure and consent be in writing, it would be prudent for the lawyer
to provide potential dual clients with at least a written summary of the considerations disclosed.
9. In certain situations, such as in the preparation of loan papers or the preparation of a
partnership agreement, a lawyer might have properly undertaken multiple representation and be
confronted subsequently by a dispute among those clients in regard to that matter. Paragraph (d)
forbids the representation of any of those parties in regard to that dispute unless informed
consent is obtained from all of the parties to the dispute who had been represented by the lawyer
in that matter.
10. A lawyer may represent parties having antagonistic positions on a legal question that has
arisen in different cases, unless representation of either client would be adversely affected. Thus,
it is ordinarily not improper to assert such positions in cases pending in different trial courts,
but it may be improper to do so in cases pending at the same time in an appellate court.
11. Ordinarily, it is not advisable for a lawyer to act as advocate against a client the lawyer
represents in some other matter, even if the other matter is wholly unrelated and even if
paragraphs (a), (b) and (d) are not applicable. However, there are circumstances in which a
lawyer may act as advocate against a client, for a lawyer is free to do so unless this Rule or
another rule of the Texas Disciplinary Rules of Professional Conduct would be violated. For
example, a lawyer representing an enterprise with diverse operations may accept employment as
an advocate against the enterprise in a matter unrelated to any matter being handled for the
enterprise if the representation of one client is not directly adverse to the representation of the
other client. The propriety of concurrent representation can depend on the nature of the
litigation. For example, a suit charging fraud entails conflict to a degree not involved in a suit for
declaratory judgment concerning statutory interpretation.
Interest of Person Paying for a Lawyers Service
12. A lawyer may be paid from a source other than the client, if the client is informed of that
fact and consents and the arrangement does not compromise the lawyers duty of loyalty to the
client. See Rule 1.08(e). For example, when an insurer and its insured have conflicting interests
in a matter arising from a liability insurance agreement, and the insurer is required to provide
special counsel for the insured, the arrangement should assure the special counsels professional
independence. So also, when a corporation and its directors or employees are involved in a
controversy in which they have conflicting interests, the corporation may provide funds for
separate legal representation of the directors or employees, if the clients consent after
consultation and the arrangement ensures the lawyers professional independence.
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Non-litigation Conflict Situations

13. Conflicts of interest in contexts other than litigation sometimes may be difficult to assess.
Relevant factors in determining whether there is potential for adverse effect include the
duration and intimacy of the lawyers relationship with the client or clients involved, the
functions being performed by the lawyer, the likelihood that actual conflict will arise and the
likely prejudice to the client from the conflict if it does arise. The question is often one of
proximity and degree.
14. For example, a lawyer may not represent multiple parties to a negotiation whose interests
are fundamentally antagonistic to each other, but common representation may be permissible
where the clients are generally aligned in interest even though there is some difference of
interest among them.
15. Conflict questions may also arise in estate planning and estate administration. A lawyer may
be called upon to prepare wills for several family members, such as husband and wife, and,
depending upon the circumstances, a conflict of interest may arise. In estate administration it
may be unclear whether the client is the fiduciary or is the estate or trust including its
beneficiaries. The lawyer should make clear the relationship to the parties involved.
16. A lawyer for a corporation or other organization who is also a member of its board of
directors should determine whether the responsibilities of the two roles may conflict. The
lawyer may be called on to advise the corporation in matters involving actions of the directors.
Consideration should be given to the frequency with which such situations may arise, the
potential intensity of the conflict, the effect of the lawyers resignation from the board and the
possibility of the corporations obtaining legal advice from another lawyer in such situations. If
there is material risk that the dual role will compromise the lawyers independence of
professional judgment, the lawyer should not serve as a director.
Conflict Charged by an Opposing Party
17. Raising questions of conflict of interest is primarily the responsibility of the lawyer
undertaking the representation. In litigation, a court may raise the question when there is
reason to infer that the lawyer has neglected the responsibility. In a criminal case, inquiry by the
court is generally required when a lawyer represents multiple defendants. Where the conflict is
such as clearly to call in question the fair or efficient administration of justice, opposing
counsel may properly raise the question. Such an objection should be viewed with great
caution, however, for it can be misused as a technique of harassment. See Preamble: Scope.
18. Except when the absolute prohibition of this rule applies or in litigation when a court
passes upon issues of conflicting interests in determining a question of disqualification of
counsel, resolving questions of conflict of interests may require decisions by all affected clients
as well as by the lawyer.
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Rule 1.07 Conflict of Interest: Intermediary

(a) A lawyer shall not act as intermediary between clients unless:
(1) the lawyer consults with each client concerning the implications of the common
representation, including the advantages and risks involved, and the effect on the
attorney-client privileges, and obtains each clients written consent to the common
representation;
(2) the lawyer reasonably believes that the matter can be resolved without the necessity
of contested litigation on terms compatible with the clients best interests, that each
client will be able to make adequately informed decisions in the matter and that there is
little risk of material prejudice to the interests of any of the clients if the contemplated
resolution is unsuccessful; and
(3) the lawyer reasonably believes that the common representation can be undertaken
impartially and without improper effect on other responsibilities the lawyer has to any
of the clients.
(b) While acting as intermediary, the lawyer shall consult with each client concerning the
decision to be made and the considerations relevant in making them, so that each client can
make adequately informed decisions.
(c) A lawyer shall withdraw as intermediary if any of the clients so requests, or if any of the
conditions stated in paragraph (a) is no longer satisfied. Upon withdrawal, the lawyer shall not
continue to represent any of the clients in the matter that was the subject of the intermediation.
(d) Within the meaning of this Rule, a lawyer acts as intermediary if the lawyer represents two
or more parties with potentially conflicting interests.
(e) If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other
lawyer while a member of or associated with that lawyers firm may engage in that conduct.
Comment:
1. A lawyer acting as intermediary may seek to establish or adjust a relationship between clients
on an amicable and mutually advantageous basis. For example, the lawyer may assist in
organizing a business in which two or more clients are entrepreneurs, in working out the
financial reorganization of an enterprise in which two or more clients have an interest, in
arranging a property distribution in settlement of an estate or in mediating a dispute between
clients. The lawyer seeks to resolve potentially conflicting interests by developing the parties
mutual interests. The alternative can be that each party may have to obtain separate
representation, with the possibility in some situations of incurring additional cost, complication
or even litigation. Given these and other relevant factors, all the clients may prefer that the
lawyer act as intermediary.
33
2. Because confusion can arise as to the lawyers role where each party is not separately
represented, it is important that the lawyer make clear the relationship; hence, the requirement
of written consent. Moreover, a lawyer should not permit his personal interests to influence his
advice relative to a suggestion by his client that additional counsel be employed. See also Rule
1.06 (b).
3. The Rule does not apply to a lawyer acting as arbitrator or mediator between or among
parties who are not clients of the lawyer, even where the lawyer has been appointed with the
concurrence of the parties. In performing such a role the lawyer may be subject to applicable
codes of ethics, such as the Code of Ethics for Arbitration in Commercial Disputes prepared by
a joint Committee of the American Bar Association and the American Arbitration Association.
4. In considering whether to act as intermediary between clients, a lawyer should be mindful
that if the intermediation fails the result can be additional cost, embarrassment and
recrimination. In some situations, the risk of failure is so great that intermediation is plainly
impossible. Moreover, a lawyer cannot undertake common representation of clients between
whom contested litigation is reasonably expected or who contemplate contentious negotiations.
More generally, if the relationship between the parties has already assumed definite antagonism,
the possibility that the clients interests can be adjusted by intermediation ordinarily is not very
good.
5. The appropriateness of intermediation can depend on its form. Forms of intermediation
range from informal arbitration, where each clients case is presented by the respective client
and the lawyer decides the outcome, to mediation, to common representation where the
clients interests are substantially though not entirely compatible. One form may be appropriate
in circumstances where another would not. Other relevant factors are whether the lawyer
subsequently will represent both parties on a continuing basis and whether the situation
involves creating a relationship between the parties or terminating one.
Confidentiality and Privilege
6. A particularly important factor in determining the appropriateness of intermediation is the
effect on client-lawyer confidentiality and the attorney-client privilege. In a common
representation, the lawyer is still required both to keep each client adequately informed and to
maintain confidentiality of information relating to the representation, except as to such clients.
See Rules 1.03 and 1.05. Complying with both requirements while acting as intermediary
requires a delicate balance. If the balance cannot be maintained, the common representation is
improper. With regard to the attorney-client privilege, the general rule is that as between
commonly represented clients the privilege does not attach. Hence, it must be assumed that if
litigation eventuates between the clients, the privilege will not protect any such
communications, and the clients should be so advised.
7. Since the lawyer is required to be impartial between commonly represented clients,
intermediation is improper when that impartiality cannot be maintained. For example, a lawyer
34
who has represented one of the clients for a long period and in a variety of matters might have
difficulty being impartial between that client and one to whom the lawyer has only recently
been introduced.
Consultation
8. In acting as intermediary between clients, the lawyer should consult with the clients on the
implications of doing so, and proceed only upon informed consent based on such a
consultation. The consultation should make clear that the lawyers role is not that of
partisanship normally expected in other circumstances.
9. Paragraph (b) is an application of the principle expressed in Rule 1.03. Where the lawyer is
intermediary, the clients ordinarily must assume greater responsibility for decisions than when
each client is independently represented.
10. Under this Rule, any condition or circumstance that prevents a particular lawyer either
from acting as intermediary between clients, or from representing those clients individually in
connection with a matter after an unsuccessful intermediation, also prevents any other lawyer
who is or becomes a member of or associates with that lawyers firm from doing so. See
paragraphs (c) and (e).
Withdrawal
11. In the event of withdrawal by one or more parties from the enterprise, the lawyer may
continue to act for the remaining parties and the enterprise. See also Rule 1.06 (c) (2) which
authorizes continuation of the representation with consent.
Rule 1.08 Conflict of Interest: Prohibited Transactions
(a) A lawyer shall not enter into a business transaction with a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and
reasonable to the client and are fully disclosed in a manner which can be reasonably
understood by the client;
(2) the client is given a reasonable opportunity to seek the advice of independent
counsel in the transaction; and
(3) the client consents in writing thereto.
(b) A lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer
as a parent, child, sibling, or spouse any substantial gift from a client, including a testamentary
gift, except where the client is related to the donee.
35
(c) Prior to the conclusion of all aspects of the matter giving rise to the lawyers employment, a
lawyer shall not make or negotiate an agreement with a client, prospective client, or former
client giving the lawyer literary or media rights to a portrayal or account based in substantial
part on information relating to the representation.
(d) A lawyer shall not provide financial assistance to a client in connection with pending or
contemplated litigation or administrative proceedings, except that:
(1) a lawyer may advance or guarantee court costs, expenses of litigation or
administrative proceedings, and reasonably necessary medical and living expenses, the
repayment of which may be contingent on the outcome of the matter; and
(2) a lawyer representing an indigent client may pay court costs and expenses of
litigation on behalf of the client.
(e) A lawyer shall not accept compensation for representing a client from one other than the
client unless:
(1) the client consents;
(2) there is no interference with the lawyers independence of professional judgment or
with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by Rule
1.05.
(f) A lawyer who represents two or more clients shall not participate in making an aggregate
settlement of the claims of or against the clients, or in a criminal case an aggregated agreement
to guilty or nolo contendere pleas, unless each client has consented after consultation,
including disclosure of the existence and nature of all the claims or pleas involved and of the
nature and extent of the participation of each person in the settlement.
(g) A lawyer shall not make an agreement prospectively limiting the lawyers liability to a client
for malpractice unless permitted by law and the client is independently represented in making
the agreement, or settle a claim for such liability with an unrepresented client or former client
without first advising that person in writing that independent representation is appropriate in
connection therewith.
(h) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of
litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien granted by law to secure the lawyers fee or expenses; and
(2) contract in a civil case with a client for a contingent fee that is permissible under
Rule 1.04.
36
(i) If a lawyer would be prohibited by this Rule from engaging in particular conduct, no other
lawyer while a member of or associated with that lawyers firm may engage in that conduct.
(j) As used in this Rule, business transactions does not include standard commercial
transactions between the lawyer and the client for products or services that the client generally
markets to others.
Comment:
Transactions between Client and Lawyer
1. This rule deals with certain transactions that per se involve unacceptable conflicts of
interests.
2. As a general principle, all transactions between client and lawyer should be fair and
reasonable to the client. In such transactions a review by independent counsel on behalf of the
client is often advisable. Paragraph (a) does not, however, apply to standard commercial
transactions between the lawyer and the client for products or services that the client generally
markets to others, such as banking or brokerage services, medical services, products
manufactured or distributed by the client, and utilities services. In such transactions, the lawyer
has no advantage in dealing, with the client, and the restrictions in paragraph (a) are
unnecessary and impracticable.
3. A lawyer may accept a gift from a client, if the transaction meets general standards of fairness.
For example, a simple gift such as a present given at a holiday or as a token of appreciation is
permitted. If effectuation of a substantial gift requires preparing a legal instrument such as a
will or conveyance, however, the client should have the detached advice that another lawyer can
provide. Paragraph (b) recognizes an exception where the client is a relative of the donee or the
gift is not substantial.
Literary Rights
4. An agreement by which a lawyer acquires literary or media rights concerning the conduct of
representation creates a conflict between the interests of the client and the personal interests of
the lawyer. Measures suitable in the representation of the client may detract from the
publication value of an account of the representation. Paragraph (c) does not prohibit a lawyer
representing a client in a transaction concerning literary property from agreeing that the
lawyers fee shall consist of a share in ownership in the property, if the arrangement conforms
to Rule 1.04 and to paragraph (h) of this Rule.
Person Paying for Lawyers Services
5. Paragraph (e) requires disclosure to the client of the fact that the lawyers services are being
paid for by a third party. Such an arrangement must also conform to the requirements of Rule
37
1.05 concerning confidentiality and Rule 1.06 concerning conflict of interest. Where the client
is a class, consent may be obtained on behalf of the class by court-supervised procedure. Where
an insurance company pays the lawyers fee for representing an insured, normally the insured
has consented to the arrangement by the terms of the insurance contract.
Prospectively Limiting Liability
6. Paragraph (g) is not intended to apply to customary qualification and limitations in legal
opinions and memoranda.
Acquisition of Interest in Litigation
7. This Rule embodies the traditional general precept that lawyers are prohibited from
acquiring a proprietary interest in the subject matter of litigation. This general precept, which
has its basis in common law champerty and maintenance, is subject to specific exceptions
developed in decisional law and continued in these Rules, such as the exception for contingent
fees set forth in Rule 1.04 and the exception for certain advances of the costs of litigation set
forth in paragraph (d). A special instance arises when a lawyer proposes to incur litigation or
other expenses with an entity in which the lawyer has a pecuniary interest. A lawyer should not
incur such expenses unless the client has entered into a written agreement complying with
paragraph (a) that contains a full disclosure of the nature and amount of the possible expenses
and the relationship between the lawyer and the other entity involved.
Imputed Disqualifications
8. The prohibitions imposed on an individual lawyer by this Rule are imposed by paragraph (i)
upon all other lawyers while practicing with that lawyers firm.
Rule 1.09 Conflict of Interest: Former Client
(a) Without prior consent, a lawyer who personally has formerly represented a client in a matter
shall not thereafter represent another person in a matter adverse to the former client:
(1) in which such other person questions the validity of the lawyer's services or work
product for the former client;
(2) if the representation in reasonable probability will involve a violation of Rule 1.05;
or
(3) if it is the same or a substantially related matter.
(b) Except to the extent authorized by Rule 1.10, when lawyers are or have become members of
or associated with a firm, none of them shall knowingly represent a client if any one of them
practicing alone would be prohibited from doing so by paragraph (a).
38
(c) When the association of a lawyer with a firm has terminated, the lawyers who were then
associated with that lawyer shall not knowingly represent a client if the lawyer whose association
with that firm has terminated would be prohibited from doing so by paragraph (a)(l) or if the
representation in reasonable probability will involve a violation of Rule 1.05.
Comment:
1. Rule 1.09 addresses the circumstances in which a lawyer in private practice, and other
lawyers who were, are or become members of or associated with a firm in which that lawyer
practiced or practices, may represent a client against a former client of that lawyer or the
lawyers former firm. Whether a lawyer, or that lawyers present or former firm, is prohibited
from representing a client in a matter by reason of the lawyers successive government and
private employment is governed by Rule 1.10 rather than by this Rule.
2. Paragraph (a) concerns the situation where a lawyer once personally represented a client and
now wishes to represent a second client against that former client. Whether such a personal
attorney-client relationship existed involves questions of both fact and law that are beyond the
scope of these Rules. See Preamble: Scope. Among the relevant factors, however, would be how
the former representation actually was conducted within the firm; the nature and scope of the
former clients contacts with the firm (including any restrictions the client may have placed on
the dissemination of confidential information within the firm); and the size of the firm.
3. Although paragraph (a) does not absolutely prohibit a lawyer from representing a client
against a former client, it does provide that the latter representation is improper if any of three
circumstances exists, except with prior consent. The first circumstance is that the lawyer may
not represent a client who questions the validity of the lawyers services or work product for the
former client. Thus, for example, a lawyer who drew a will leaving a substantial portion of the
testators property to a designated beneficiary would violate paragraph (a) by representing the
testators heirs at law in an action seeking to overturn the will.
4. Paragraph (a)s second limitation on undertaking a representation against a former client is
that it may not be done if there is a reasonable probability that the representation would cause
the lawyer to violate the obligations owed the former client under Rule 1.05. Thus, for example,
if there were a reasonable probability that the subsequent representation would involve either
an unauthorized disclosure of confidential information under Rule 1.05 (b) (l) or an improper
use of such information to the disadvantage of the former client under Rule 1.05 (b) (3), that
representation would be improper under paragraph (a). Whether such a reasonable probability
exists in any given case will be a question of fact.
4A. The third situation where representation adverse to a former client is prohibited is where
the representation involves the same or a substantially related matter. The "same" matter aspect
of this prohibition prevents a lawyer from switching sides and representing a party whose
interests are adverse to a person who sought in good faith to retain the lawyer. It can apply even
if the lawyer declined the representation before the client had disclosed any confidential
information. This aspect of the prohibition includes, but is somewhat broader than, that
39
contained in paragraph (a) (1) of this Rule. The "substantially related" aspect, on the other
hand, has a different focus. Although that term is not defined in the Rule, it primarily involves
situations where a lawyer could have acquired confidential information concerning a prior
client that could be used either to that prior client's disadvantage or for the advantage of the
lawyer's current client or some other person. It thus largely overlaps the prohibition contained
in paragraph (a)(2) of this Rule.
5. Paragraph (b) extends paragraph (a)s limitations on an individual lawyers freedom to
undertake a representation against that lawyers former client to all other lawyers who are or
become members of or associated with the firm in which that lawyer is practicing. Thus, for
example, if a client severs the attorney-client relationship with a lawyer who remains in a firm,
the entitlement of that individual lawyer to undertake a representation against that former
client is governed by paragraph (a); and all other lawyers who are or become members of or
associated with that lawyers firm are treated in the same manner by paragraph (b). Similarly, if a
lawyer severs his or her association with a firm and that firm retains as a client a person whom
the lawyer personally represented while with the firm, that lawyers ability thereafter to
undertake a representation against that client is governed by paragraph (a); and all other lawyers
who are or become members of or associates with that lawyers new firm are treated in the same
manner by paragraph (b).
6. Paragraph (c) addresses the situation of former partners or associates of a lawyer who once
had represented a client when the relationship between the former partners or associates and
the lawyer has been terminated. In that situation, the former partners or associates are
prohibited from questioning the validity of such lawyers work product and from undertaking
representation which in reasonable probability will involve a violation of Rule 1.05. Such a
violation could occur, for example, when the former partners or associates retained materials in
their files from the earlier representation of the client that, if disclosed or used in connection
with the subsequent representation, would violate Rule l.05(b)(l) or (b)(3).
7. Thus, the effect of paragraph (b) is to (a) extend any inability of a particular lawyer under
paragraph (a) to undertake a representation against a former client to all other lawyers who are
or become members of or associated with any firm in which that lawyer is practicing. If, on the
other hand, a lawyer disqualified by paragraph (a) should leave a firm, paragraph (c) prohibits
lawyers remaining in that firm from undertaking a representation that would be forbidden to
the departed lawyer only if that representation would violate sub-paragraphs (a) (1) or (a) (2).
Finally, should those other lawyers cease to be members of the same firm as the lawyer affected
by paragraph (a) without personally coming within its restrictions, they thereafter may
undertake the representation against the lawyers former client unless prevented from doing so
by some other of these Rules.
8. Although not required to do so by Rule 1.05 or this Rule, some courts, as a procedural
decision, disqualify a lawyer for representing a present client against a former client when the
subject matter of the present representation is so closely related to the subject matter of the
prior representation that confidences obtained from the former client might be useful in the
representation of the present client. See Comment 17 to Rule l.06. This so-called substantial
40
relationship test is defended by asserting that to require a showing that confidences of the first
client were in fact used for the benefit of the subsequent client as a condition to procedural
disqualification would cause disclosure of the confidences that the court seeks to protect. A
lawyer is not subject to discipline under Rule l.05(b)(l), (3), or (4), however, unless the protected
information is actually used. Likewise, a lawyer is not subject to discipline under this Rule
unless the new representation by the lawyer in reasonable probability would result in a violation
of those provisions.
9. Whether the substantial relationship test will continue to be employed as a standard for
procedural disqualification is a matter beyond the scope of these Rules. See Preamble: Scope.
The possibility that such a disqualification might be sought by the former client or granted by a
court, however, is a matter that could be of substantial importance to the present client in
deciding whether or not to retain or continue to employ a particular lawyer or law firm as its
counsel. Consequently, a lawyer should disclose those possibilities, as well as their potential
consequences for the representation, to the present client as soon as the lawyer becomes aware
of them; and the client then should be allowed to decide whether or not to obtain new counsel.
See Rules 1.03(b) and 1.06(b).
10. This Rule is primarily for the protection of clients and its protections can be waived by
them. A waiver is effective only if there is consent after disclosure of the relevant circumstances,
including the lawyers past or intended role on behalf of each client, as appropriate. See
Comments 7 and 8 to Rule 1.06.
Rule 1.10 Successive Government and Private Employment
(a) Except as law may otherwise expressly permit, a lawyer shall not represent a private
client in connection with a matter in which the lawyer participated personally and substantially
as a public officer or employee, unless the appropriate government agency consents after
consultation.
(b) No lawyer in a firm with which a lawyer subject to paragraph (a) is associated may knowingly
undertake or continue representation in such a matter unless:
(1) The lawyer subject to paragraph (a) is screened from any participation in the matter
and is apportioned no part of the fee therefrom; and
(2) written notice is given with reasonable promptness to the appropriate government
agency.
(c) Except as law may otherwise expressly permit, a lawyer having information that the lawyer
knows or should know is confidential government information about a person or other legal
entity acquired when the lawyer was a public officer or employee may not represent a private
client whose interests are adverse to that person or legal entity.
41
3. The existence of material prejudice normally depends on the circumstances in which a

particular statement is made. For example, an otherwise objectionable statement may be
excusable if reasonably calculated to counter the unfair prejudicial effect of another public
statement. Applicable constitutional principles require that the disciplinary standard in this
area retain the flexibility needed to take such unique considerations into account.
4. Although they are not standards of discipline, paragraphs (b) and (c) seek to give some
guidance concerning what types of statements are or are not apt to violate paragraph (a).
Paragraph (b) sets forth conditions under which statements of the types listed in subparagraphs
(b)(1) through (5) would likely violate paragraph (a) in the absence of exceptional extenuating
circumstances. Paragraph (c) on the other hand, describes statements that are unlikely to violate
paragraph (a) in the absence of exceptional aggravating circumstances. Neither paragraph (b)
nor paragraph (c) is an exhaustive listing.
5. Special rules of confidentiality may validly govern proceedings in juvenile, domestic relations
and mental disability proceedings, and perhaps other types of litigation. Rule 3.04(c)(1) and (d)
govern a lawyers duty with respect to such Rules. Frequently, a lawyers obligations to the client
under Rule 1.05 also will prevent the disclosure of confidential information.
Rule 3.08 Lawyer as Witness
(a) A lawyer shall not accept or continue employment as an advocate before a tribunal in a
contemplated or pending adjudicatory proceeding if the lawyer knows or believes that the
lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyers
client, unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony will relate solely to a matter of formality and there is no reason to
believe that substantial evidence will be offered in opposition to the testimony;
(3) the testimony relates to the nature and value of legal services rendered in the case;
(4) the lawyer is a party to the action and is appearing pro se; or
(5) the lawyer has promptly notified opposing counsel that the lawyer expects to testify
in the matter and disqualification of the lawyer would work substantial hardship on the
client.
(b) A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the
lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially
adverse to the lawyers client, unless the client consents after full disclosure.
(c) Without the clients informed consent, a lawyer may not act as advocate in an adjudicatory
proceeding in which another lawyer in the lawyers firm is prohibited by paragraphs (a) or (b)
71
from serving as advocate. If the lawyer to be called as a witness could not also serve as an
advocate under this Rule, that lawyer shall not take an active role before the tribunal in the
presentation of the matter.
Comment:
1. A lawyer who is considering accepting or continuing employment in a contemplated or
pending adjudicatory proceeding in which that lawyer knows or believes that he or she may be a
necessary witness is obligated by this Rule to consider the possible consequences of those dual
roles for both the lawyers own client and for opposing parties.
2. One important variable in this context is the anticipated tenor of the lawyers testimony. If
that testimony will be substantially adverse to the client, paragraphs (b) and (c) provide the
governing standard. In other situations, paragraphs (a) and (c) control.
3. A lawyer who is considering both representing a client in an adjudicatory proceeding and
serving as a witness in that proceeding may possess information pertinent to the representation
that would be substantially adverse to the client were it to be disclosed. A lawyer who believes
that he or she will be compelled to furnish testimony concerning such matters should not
continue to act as an advocate for his or her client except with the clients informed consent,
because of the substantial likelihood that such adverse testimony would damage the lawyers
ability to represent the client effectively.
4. In all other circumstances, the principal concern over allowing a lawyer to serve as both an
advocate and witness for a client is the possible confusion that those dual roles could create for
the finder of fact. Normally those dual roles are unlikely to create exceptional difficulties when
the lawyers testimony is limited to the areas set out in sub-paragraphs (a)(1)-(4) of this Rule. If,
however, the lawyers testimony concerns a controversial or contested matter, combining the
roles of advocate and witness can unfairly prejudice the opposing party. A witness is required to
testify on the basis of personal knowledge, while an advocate is expected to explain and
comment on evidence given by others. It may not be clear whether a statement by an advocatewitness should be taken as proof or as an analysis of the proof.
5. Paragraph (a)(1) recognizes that if the testimony will be uncontested, the ambiguities in the
dual role are purely theoretical. Paragraph (a)(2) recognizes that similar considerations apply if a
lawyers testimony relates solely to a matter of formality and there is no reason to believe that
substantial opposing evidence will be offered. In each of those situations requiring the
involvement of another lawyer would be a costly procedure that would serve no significant
countervailing purpose.
6. Sub-paragraph (a)(3) recognizes that where the testimony concerns the extent and value of
legal services rendered in the action in which the testimony is offered, permitting the lawyers to
testify avoids the need for a second trial with new counsel to resolve that issue. Moreover, in
such a situation the judge has firsthand knowledge of the matter in issue; hence, there is less
72
dependence on the adversary process to test the credibility of the testimony. Sub-paragraph
(a)(4) makes it clear that this Rule is not intended to affect a lawyers' right to self-representation.
7. Apart from these four exceptions, sub-paragraph (a)(5) recognizes an additional exception
based upon a balancing of the interests of the client and those of the opposing party. In
implementing this exception, it is relevant that one or both parties could reasonably foresee
that the lawyer would probably be a witness. For example, sub-paragraph (a)(5) requires that a
lawyer relying on that sub-paragraph as a basis for serving as both an advocate and a witness for
a party give timely notification of that fact to opposing counsel. That requirement serves two
purposes. First, it prevents the testifying lawyer from creating a substantial hardship, where
none once existed, by virtue of a lengthy representation of the client in the matter at hand.
Second, it puts opposing parties on notice of the situation, thus enabling them to make any
desired response at the earliest opportunity.
8. This rule does not prohibit the lawyer who may or will be a witness from participating in the
preparation of a matter for presentation to a tribunal. To minimize the possibility of unfair
prejudice to an opposing party, however, the Rule prohibits any testifying lawyer who could not
serve as an advocate from taking an active role before the tribunal in the presentation of the
matter. See paragraph (c). Even in those situations, however, another lawyer in the testifying
lawyers firm may act as an advocate, provided the clients informed consent is obtained.
9. Rule 3.08 sets out a disciplinary standard and is not well suited to use as a standard for
procedural disqualification. As a disciplinary rule it serves two principal purposes. The first is to
insure that a clients case is not compromised by being represented by a lawyer who could be a
more effective witness for the client by not also serving as an advocate. See paragraph (a). The
second is to insure that a client is not burdened by counsel who may have to offer testimony
that is substantially adverse to the clients cause. See paragraph (b).
10. This Rule may furnish some guidance in those procedural disqualification disputes where
the party seeking disqualification can demonstrate actual prejudice to itself resulting from the
opposing lawyers service in the dual roles. However, it should not be used as a tactical weapon
to deprive the opposing party of the right to be represented by the lawyer of his or her choice.
For example, a lawyer should not seek to disqualify an opposing lawyer under this Rule merely
because the opposing lawyers dual roles may involve an improper conflict of interest with
respect to the opposing lawyers client, for that is a matter to be resolved between lawyer and
client or in a subsequent disciplinary proceeding. Likewise, a lawyer should not seek to
disqualify an opposing lawyer by unnecessarily calling that lawyer as a witness. Such unintended
applications of this Rule, if allowed, would subvert its true purpose by converting it into a mere
tactical weapon in litigation.
Rule 3.09 Special Responsibilities of a Prosecutor
The prosecutor in a criminal case shall:
73
TEXAS RULES OF EVIDENCE

effective March 1, 2013
(F)
ARTICLE I. GENERAL PROVISIONS
(G) proceedings for the issuance of a search or

arrest warrant; or
RULE 101. TITLE AND SCOPE

(a)
Title. These rules shall be known and cited as the Texas

Rules of Evidence.
(b)
Scope. Except as otherwise provided by statute, these

rules govern civil and criminal proceedings (including
examining trials before magistrates) in all courts of Texas,
except small claims courts.
(c)
Hierarchical Governance in Criminal Proceedings.

Hierarchical governance shall be in the following order:
the Constitution of the United States, those federal statutes
that control states under the supremacy clause, the
Constitution of Texas, the Code of Criminal Procedure
and the Penal Code, civil statutes, these rules, and the
common law. W here possible, inconsistency is to be
removed by reasonable construction.
(d)
Special Rules of Applicability in Criminal Proceedings.

(1)
Rules not applicable in certain proceedings. These

rules, except with respect to privileges, do not apply
in the following situations:
(H) proceedings in a direct contempt determination.
(C) proceedings in an application for habeas corpus

in extradition, rendition, or interstate detainer;
(D) a hearing under Code of Criminal Procedure
article 46.02, by the court out of the presence
of a jury, to determine whether there is
sufficient evidence of incompetency to require
a jury determination of the question of
incompetency;
(E)
proceedings regarding bail except hearings to

deny, revoke or increase bail;
(2)
Applicability of privileges. These rules with respect

to privileges apply at all stages of all actions, cases,
and proceedings.
(3)
Military justice hearings. Evidence in hearings under

the Texas Code of Military Justice, T EX . G O V T
C O DE 432.001-432.195, shall be governed by that
Code.
Notes and Comments
Comment to 1997 change: "Criminal proceedings" rather than

"criminal cases" is used since that was the terminology used in
the prior Rules of Criminal Evidence. In subpart (b), the
reference to "trials before magistrates" comes from prior
Criminal Rule 1101(a). In the prior Criminal Rules, both Rule
101 and Rule 1101 dealt with the same thing the applicability
of the rules. Thus, Rules 101(c) and (d) have been written to
incorporate the provisions of former Criminal Rule 1101 and that
rule is omitted.
(A) the determination of questions of fact

preliminary to admissibility of evidence when
the issue is to be determined by the court under
Rule 104;
(B) proceedings before grand juries;
a hearing on justification for pretrial detention

not involving bail;
RULE 102. PURPOSE AND CONSTRUCTION

These rules shall be construed to secure fairness in
administration, elimination of unjustifiable expense and delay,
and promotion of growth and development of the law of evidence
to the end that the truth may be ascertained and proceedings
justly determined.
RULE 103. RULINGS ON EVIDENCE

(a)
Effect of Erroneous Ruling. Error may not be predicated

upon a ruling which admits or excludes evidence unless a
substantial right of the party is affected, and
(1)
Objection. In case the ruling is one admitting

evidence, a timely objection or motion to strike
Page 2

appears of record, stating the specific ground of
objection, if the specific ground was not apparent
from the context. W hen the court hears objections to
offered evidence out of the presence of the jury and
rules that such evidence be admitted, such objections
shall be deemed to apply to such evidence when it is
admitted before the jury without the necessity of
repeating those objections.
(2)
(b)
Offer of proof. In case the ruling is one excluding

evidence, the substance of the evidence was made
known to the court by offer, or was apparent from
the context within which questions were asked.
Record of Offer and Ruling. The offering party shall, as

soon as practicable, but before the courts charge is read
to the jury, be allowed to make, in the absence of the jury,
its offer of proof. The court may add any other or further
statement which shows the character of the evidence, the
form in which it was offered, the objection made, and the
ruling thereon. The court may, or at the request of a party
shall, direct the making of an offer in question and answer
form.
(c)
Hearing of Jury. In jury cases, proceedings shall be

conducted, to the extent practicable, so as to prevent
inadmissible evidence from being suggested to the jury by
any means, such as making statements or offers of proof or
asking questions in the hearing of the jury.
(d)
Fundamental Error in Criminal Cases. In a criminal

case, nothing in these rules precludes taking notice of
fundamental errors affecting substantial rights although
they were not brought to the attention of the court.
Notes and Comments
Comment to 1997 change. The exception to the

requirement of an offer of proof for matters that were apparent
from the context within which questions were asked, found in
paragraph (a)(2), is now applicable to civil as well as criminal
cases.
RULE 104. PRELIM INARY QUESTIONS

(a)
(b)
Questions of Admissibility Generally. Preliminary

questions concerning the qualification of a person to be a
witness, the existence of a privilege, or the admissibility of
evidence shall be determined by the court, subject to the
provisions of subdivision (b). In making its determination
the court is not bound by the rules of evidence except
those with respect to privileges.
Relevancy Conditioned on Fact. W hen the relevancy of
evidence depends upon the fulfillment of a condition of
fact, the court shall admit it upon, or subject to, the
introduction of evidence sufficient to support a finding of

the fulfillment of the condition.
(c)
Hearing of Jury. In a criminal case, a hearing on the

admissibility of a confession shall be conducted out of the
hearing of the jury. All other civil or criminal hearings on
preliminary matters shall be conducted out of the hearing
of the jury when the interests of justice so require or in a
criminal case when an accused is a witness and so
requests.
(d)
Testimony by Accused Out of the Hearing of the Jury.

The accused in a criminal case does not, by testifying upon
a preliminary matter out of the hearing of the jury, become
subject to cross-examination as to other issues in the case.
(e)
W eight and Credibility. This rule does not limit the right
of a party to introduce before the jury evidence relevant to
weight or credibility.
RULE 105. LIM ITED ADM ISSIBILITY

(a)
Limiting Instruction.
W hen evidence which is
admissible as to one party or for one purpose but not
admissible as to another party or for another purpose is
admitted, the court, upon request, shall restrict the
evidence to its proper scope and instruct the jury
accordingly; but, in the absence of such request the courts
action in admitting such evidence without limitation shall
not be a ground for complaint on appeal.
(b)
Offering Evidence for Limited Purpose.

W hen
evidence referred to in paragraph (a) is excluded, such
exclusion shall not be a ground for complaint on appeal
unless the proponent expressly offers the evidence for its
limited, admissible purpose or limits its offer to the party
against whom it is admissible.
RULE 106. REM AINDER OF OR RELATED

W RITINGS OR RECORDED STATEM ENTS
W hen a writing or recorded statement or part thereof is
introduced by a party, an adverse party may at that time
introduce any other part or any other writing or recorded
statement which ought in fairness to be considered
contemporaneously with it. "W riting or recorded statement"
includes depositions.
RULE 107. RULE OF OPTIONAL COM PLETENESS

W hen part of an act, declaration, conversation, writing or
recorded statement is given in evidence by one party, the whole
on the same subject may be inquired into by the other, and any
other act, declaration, writing or recorded statement which is
necessary to make it fully understood or to explain the same may
Page 3
ARTICLE II. JUDICIAL NOTICE
A court upon its own motion may, or upon the motion of a party
shall, take judicial notice of the constitutions, public statutes,
rules, regulations, ordinances, court decisions, and common law
of every other state, territory, or jurisdiction of the United States.
A party requesting that judicial notice be taken of such matter
shall furnish the court sufficient information to enable it properly
to comply with the request, and shall give all parties such notice,
if any, as the court may deem necessary, to enable all parties
fairly to prepare to meet the request. A party is entitled upon
timely request to an opportunity to be heard as to the propriety of
taking judicial notice and the tenor of the matter noticed. In the
absence of prior notification, the request may be made after
judicial notice has been taken. Judicial notice of such matters
may be taken at any stage of the proceeding. The courts
determination shall be subject to review as a ruling on a question
of law.
RULE 201. JUDICIAL NOTICE OF ADJUDICATIVE

FACTS
RULE 203. DETERM INATION OF THE LAWS OF

FOREIGN COUNTRIES
also be given in evidence, as when a letter is read, all letters on

the same subject between the same parties may be given.
"W riting or recorded statement" includes depositions.
Notes and Comments
Comment to 1997 change: This rule is the former Criminal
Rule 107 except that the example regarding "when a letter is
read" has been relocated in the rule so as to more accurately
indicate the provision it explains. W hile this rule appeared only
in the prior criminal rules, it is made applicable to civil cases
because it accurately reflects the common law rule of optional
completeness in civil cases.
(a)
Scope of Rule. This rule governs only judicial notice of

adjudicative facts.
(b)
Kinds of Facts. A judicially noticed fact must be one not

subject to reasonable dispute in that it is either
(1) generally known within the territorial jurisdiction of
the trial court or (2) capable of accurate and ready
determination by resort to sources whose accuracy cannot
reasonably be questioned.
(c)
W hen Discretionary. A court may take judicial notice,

whether requested or not.
(d)
W hen M andatory. A court shall take judicial notice if

requested by a party and supplied with the necessary
information.
(e)
Opportunity to Be Heard. A party is entitled upon

timely request to an opportunity to be heard as to the
propriety of taking judicial notice and the tenor of the
matter noticed. In the absence of prior notification, the
request may be made after judicial notice has been taken.
(f)
Time of Taking Notice. Judicial notice may be taken at

any stage of the proceeding.
(g)
Instructing Jury. In civil cases, the court shall instruct

the jury to accept as conclusive any fact judicially noticed.
In criminal cases, the court shall instruct the jury that it
may, but is not required to, accept as conclusive any fact
judicially noticed.
RULE 202. DETERM INATION OF LAW OF OTHER

STATES
A party who intends to raise an issue concerning the law of a

foreign country shall give notice in the pleadings or other
reasonable written notice, and at least 30 days prior to the date of
trial such party shall furnish all parties copies of any written
materials or sources that the party intends to use as proof of the
foreign law. If the materials or sources were originally written
in a language other than English, the party intending to rely upon
them shall furnish all parties both a copy of the foreign language
text and an English translation. The court, in determining the law
of a foreign nation, may consider any material or source, whether
or not submitted by a party or admissible under the rules of
evidence, including but not limited to affidavits, testimony,
briefs, and treatises. If the court considers sources other than
those submitted by a party, it shall give all parties notice and a
reasonable opportunity to comment on the sources and to submit
further materials for review by the court. The court, and not a
jury, shall determine the laws of foreign countries. The courts
determination shall be subject to review as a ruling on a question
of law.
RULE 204. DETERM INATION OF TEXAS CITY AND

COUNTY ORDINANCES, THE CONTENTS OF THE
TEXAS REGISTER, AND THE RULES OF AGENCIES
PUBLISHED IN THE ADM INISTRATIVE CODE
A court upon its own motion may, or upon the motion of a party
shall, take judicial notice of the ordinances of municipalities and
counties of Texas, of the contents of the Texas Register, and of
the codified rules of the agencies published in the Administrative
Code. Any party requesting that judicial notice be taken of such
matter shall furnish the court sufficient information to enable it
properly to comply with the request, and shall give all parties
such notice, if any, as the court may deem necessary, to enable
all parties fairly to prepare to meet the request. A party is
entitled upon timely request to an opportunity to be heard as to
the propriety of taking judicial notice and the tenor of the matter
Page 6
(2)

it is evidence:
(3)
refuse to produce any object or writing; or
(A) that is necessary to rebut or explain scientific

or medical evidence offered by the State;
(4)
prevent another from being a witness or disclosing

any matter or producing any object or writing.
(B) of past sexual behavior with the accused and is

offered by the accused upon the issue of
whether the alleged victim consented to the
sexual behavior which is the basis of the
offense charged;
(C) that relates to the motive or bias of the alleged
victim;
(D) is admissible under Rule 609; or
(E)
(3)
(c)
(d)
that is constitutionally required to be admitted;

and
its probative value outweighs the danger of unfair

prejudice.
Procedure for Offering Evidence. If the defendant

proposes to introduce any documentary evidence or to ask
any question, either by direct examination or crossexamination of any witness, concerning specific instances
of the alleged victims past sexual behavior, the defendant
must inform the court out of the hearing of the jury prior
to introducing any such evidence or asking any such
question. After this notice, the court shall conduct an in
camera hearing, recorded by the court reporter, to
determine whether the proposed evidence is admissible
under paragraph (b) of this rule. The court shall determine
what evidence is admissible and shall accordingly limit the
questioning. The defendant shall not go outside these
limits or refer to any evidence ruled inadmissible in
camera without prior approval of the court without the
presence of the jury.
Record Sealed. The court shall seal the record of the in
camera hearing required in paragraph (c) of this rule for
delivery to the appellate court in the event of an appeal.
RULE 502. REQUIRED REPORTS PRIVILEGED BY

STATUTE
A person, corporation, association, or other organization or
entity, either public or private, making a return or report required
by law to be made has a privilege to refuse to disclose and to
prevent any other person from disclosing the return or report, if
the law requiring it to be made so provides. A public officer or
agency to whom a return or report is required by law to be made
has a privilege to refuse to disclose the return or report if the law
requiring it to be made so provides. No privilege exists under
this rule in actions involving perjury, false statements, fraud in
the return or report, or other failure to comply with the law in
question.
RULE 503. LAW YER-CLIENT PRIVILEGE

(a)
Definitions. As used in this rule:

(1)
A "client" is a person, public officer, or corporation,

association, or other organization or entity either
public or private, who is rendered professional legal
services by a lawyer, or who consults a lawyer with
a view to obtaining professional legal services from
that lawyer.
(2)
A representative of the client is (i) a person having

authority to obtain professional legal services, or to
act on advice thereby rendered, on behalf of the
client or (ii) any other person who, for the purpose of
effectuating legal representation for the client, makes
or receives a confidential communication while
acting in the scope of employment for the client.
(3)
A "lawyer" is a person authorized, or reasonably

believed by the client to be authorized, to engage in
the practice of law in any state or nation.
(4)
A "representative of the lawyer" is:
ARTICLE V. PRIVILEGES
(A) one employed by the lawyer to assist the lawyer

in the rendition of professional legal services;
or
RULE 501. PRIVILEGES RECOGNIZED ONLY AS

PROVIDED
Except as otherwise provided by Constitution, by statute, by
these rules, or by other rules prescribed pursuant to statutory
authority, no person has a privilege to:
(1)
refuse to be a witness;
(2)
refuse to disclose any matter;
(B) an accountant who is reasonably necessary for

the lawyers rendition of professional legal
services.
(5)
A communication is "confidential" if not intended to

be disclosed to third persons other than those to
whom disclosure is made in furtherance of the
Page 7
rendition of professional legal services to the client

or those reasonably necessary for the transmission of
the communication.
(b)
(2)
Claimants through same deceased client. As to a

communication relevant to an issue between parties
who claim through the same deceased client,
regardless of whether the claims are by testate or
intestate succession or by inter vivos transactions;
(3)
Breach of duty by a lawyer or client. As to a

communication relevant to an issue of breach of duty
by a lawyer to the client or by a client to the lawyer;
(4)
Document attested by a lawyer.

As to a
communication relevant to an issue concerning an
attested document to which the lawyer is an attesting
witness; or
(5)
Joint clients. As to a communication relevant to a

matter of common interest between or among two or
more clients if the communication was made by any
of them to a lawyer retained or consulted in common,
when offered in an action between or among any of
the clients.
Rules of Privilege.
(1)
General rule of privilege. A client has a privilege to

refuse to disclose and to prevent any other person
from disclosing confidential communications made
for the purpose of facilitating the rendition of
professional legal services to the client:
(A) between the client or a representative of the
client and the clients lawyer or a
representative of the lawyer;
(B) between the lawyer
representative;
and
the
lawyers
(C) by the client or a representative of the client, or

the clients lawyer or a representative of the
lawyer, to a lawyer or a representative of a
lawyer representing another party in a pending
action and concerning a matter of common
interest therein;
RULE 504. HUSBAND-W IFE PRIVILEGES

(a)
(D) between representatives of the client or

between the client and a representative of the
client; or
(E)
(2)
(c)
(d)
(1)
Definition. A communication is confidential if it is

made privately by any person to the persons spouse
and it is not intended for disclosure to any other
person.
(2)
Rule of privilege. A person, whether or not a party,

or the guardian or representative of an incompetent
or deceased person, has a privilege during marriage
and afterwards to refuse to disclose and to prevent
a n o th e r fr o m d is c lo s i n g a c o n fid e n tia l
communication made to the persons spouse while
they were married.
(3)
Who may claim the privilege. The confidential

communication privilege may be claimed by the
person or the persons guardian or representative, or
by the spouse on the persons behalf. The authority
of the spouse to do so is presumed.
(4)
Exceptions. There is no confidential communication

privilege:
among lawyers and their representatives

representing the same client.
Special rule of privilege in criminal cases. In

criminal cases, a client has a privilege to prevent the
lawyer or lawyers representative from disclosing
any other fact which came to the knowledge of the
lawyer or the lawyers representative by reason of
the attorney-client relationship.
W ho M ay Claim the Privilege. The privilege may be

claimed by the client, the clients guardian or conservator,
the personal representative of a deceased client, or the
successor, trustee, or similar representative of a
corporation, association, or other organization, whether or
not in existence. The person who was the lawyer or the
lawyers representative at the time of the communication
is presumed to have authority to claim the privilege but
only on behalf of the client.
Exceptions. There is no privilege under this rule:
(1)
Confidential Communication Privilege.
Furtherance of crime or fraud. If the services of the

lawyer were sought or obtained to enable or aid
anyone to commit or plan to commit what the client
knew or reasonably should have known to be a crime
or fraud;
(A) Furtherance of crime or fraud.

If the
communication was made, in whole or in part,
to enable or aid anyone to commit or plan to
commit a crime or fraud.
(B) Proceeding between spouses in civil cases. In
(A) a proceeding brought by or on behalf of
one spouse against the other spouse, or (B) a
proceeding between a surviving spouse and a
Page 17
(B) consistent with the declarants testimony and is
offered to rebut an express or implied charge
against the declarant of recent fabrication or
improper influence or motive;
Comment to 1997 change: Paragraphs (b), (c), and (d) are based
on the former Criminal Rule and are made applicable to civil
cases. This rule does not preclude a party in any case from
conducting a voir dire examination into the qualifications of an
expert.
(C) one of identification of a person made after

perceiving the person; or
RULE 706. AUDIT IN CIVIL CASES
(D) taken and offered in a criminal case in
accordance with Code of Criminal Procedure
article 38.071.
Despite any other evidence rule to the contrary, verified reports

of auditors prepared pursuant to Rule of Civil Procedure 172,
whether in the form of summaries, opinions, or otherwise, shall
be admitted in evidence when offered by any party whether or
not the facts or data in the reports are otherwise admissible and
whether or not the reports embrace the ultimate issues to be
decided by the trier of fact. W here exceptions to the reports have
been filed, a party may contradict the reports by evidence
supporting the exceptions.
(2)
Admission by party-opponent.
offered against a party and is:
The statement is
(A) the partys own statement in either an

individual or representative capacity;
(B) a statement of which the party has manifested
an adoption or belief in its truth;
ARTICLE VIII. HEARSAY

(C) a statement by a person authorized by the party
to make a statement concerning the subject;
RULE 801. DEFINITIONS
(D) a statement by the partys agent or servant
concerning a matter within the scope of the
agency or employment, made during the
existence of the relationship; or
The following definitions apply under this article:

(a)
(b)
Statement. A "statement" is (1) an oral or written verbal

expression or (2) nonverbal conduct of a person, if it is
intended by the person as a substitute for verbal
expression.
Declarant.
statement
(E)
a statement by a co-conspirator of a party

during the course and in furtherance of the
conspiracy.
A "declarant" is a person who makes a
(c)
M atter Asserted. "Matter asserted" includes any matter

explicitly asserted, and any matter implied by a statement,
if the probative value of the statement as offered flows
from declarants belief as to the matter.
(d)
Hearsay. "Hearsay" is a statement, other than one made

by the declarant while testifying at the trial or hearing,
offered in evidence to prove the truth of the matter
asserted.
(3)
Depositions. In a civil case, it is a deposition taken

in the same proceeding, as same proceeding is
defined in Rule of Civil Procedure 207.
Unavailability of deponent is not a requirement for
admissibility.
RULE 802. HEARSAY RULE
(e)
Hearsay is not admissible except as provided by statute or these

rules or by other rules prescribed pursuant to statutory authority.
Inadmissible hearsay admitted without objection shall not be
denied probative value merely because it is hearsay.
Statements W hich Are Not Hearsay. A statement is not

hearsay if:
(1)
Prior statement by witness. The declarant testifies at

the trial or hearing and is subject to crossexamination concerning the statement, and the
statement is:
(A) inconsistent with the declarants testimony, and
was given under oath subject to the penalty of
perjury at a trial, hearing, or other proceeding
except a grand jury proceeding in a criminal
case, or in a deposition;
RULE 803. HEARSAY EXCEPTIONS; AVAILABILITY

OF DECLARANT IM M ATERIAL
The following are not excluded by the hearsay rule, even though
the declarant is available as a witness:
(1)
Present Sense Impression. A statement describing or

explaining an event or condition made while the declarant
was perceiving the event or condition, or immediately
thereafter.
Page 18
(2)
Excited Utterance. A statement relating to a startling

event or condition made while the declarant was under the
stress of excitement caused by the event or condition.
(3)
Then Existing M ental, Emotional, or Physical

Condition. A statement of the declarants then existing
state of mind, emotion, sensation, or physical condition
(such as intent, plan, motive, design, mental feeling, pain,
or bodily health), but not including a statement of memory
or belief to prove the fact remembered or believed unless
it relates to the execution, revocation, identification, or
terms of declarants will.

information or other circumstances indicate lack of
trustworthiness.
(8)
(4)
(5)
(6)
(7)
(A) the activities of the office or agency;

(B) matters observed pursuant to duty imposed by law as
to which matters there was a duty to report,
excluding in criminal cases matters observed by
police officers and other law enforcement personnel;
or
Statements for Purposes of M edical Diagnosis or

Treatment. Statements made for purposes of medical
diagnosis or treatment and describing medical history, or
past or present symptoms, pain, or sensations, or the
inception or general character of the cause or external
source thereof insofar as reasonably pertinent to diagnosis
or treatment.
Recorded Recollection. A memorandum or record
concerning a matter about which a witness once had
personal knowledge but now has insufficient recollection
to enable the witness to testify fully and accurately, shown
to have been made or adopted by the witness when the
matter was fresh in the witness memory and to reflect that
knowledge correctly, unless the circumstances of
preparation cast doubt on the documents trustworthiness.
If admitted, the memorandum or record may be read into
evidence but may not itself be received as an exhibit
unless offered by an adverse party.
Records of Regularly Conducted Activity.
A
memorandum, report, record, or data compilation, in any
form, of acts, events, conditions, opinions, or diagnoses,
made at or near the time by, or from information
transmitted by, a person with knowledge, if kept in the
course of a regularly conducted business activity, and if it
was the regular practice of that business activity to make
the memorandum, report, record, or data compilation, all
as shown by the testimony of the custodian or other
qualified witness, or by affidavit that complies with Rule
902(10), unless the source of information or the method or
circumstances of preparation indicate lack of
trustworthiness. "Business" as used in this paragraph
includes any and every kind of regular organized activity
whether conducted for profit or not.
Absence of Entry in Records Kept in Accordance W ith
the Provisions of Paragraph (6). Evidence that a matter
is not included in the memoranda, reports, records, or data
compilations, in any form, kept in accordance with the
provisions of paragraph (6), to prove the nonoccurrence or
nonexistence of the matter, if the matter was of a kind of
which a memorandum, report, record, or data compilation
was regularly made and preserved, unless the sources of
Public Records and Reports.

Records, reports,
statements, or data compilations, in any form, of public
offices or agencies setting forth:
(C) in civil cases as to any party and in criminal cases as

against the state, factual findings resulting from an
investigation made pursuant to authority granted by
law;
unless the sources of information or other circumstances
indicate lack of trustworthiness.
(9)
Records of Vital Statistics.

Records or data
compilations, in any form, of births, fetal deaths, deaths,
or marriages, if the report thereof was made to a public
office pursuant to requirements of law.
(10) Absence of Public Record or Entry. To prove the

absence of a record, report, statement, or data compilation,
in any form, or the nonoccurrence or nonexistence of a
matter of which a record, report, statement, or data
compilation, in any form, was regularly made and
preserved by a public office or agency, evidence in the
form of a certification in accordance with Rule 902, or
testimony, that diligent search failed to disclose the record,
report statement, or data compilation, or entry.
(11) Records of Religious Organizations. Statements of
births, marriages, divorces, deaths, legitimacy, ancestry,
relationship by blood or marriage, or other similar facts of
personal or family history, contained in a regularly kept
record of a religious organization.
(12) M arriage, Baptismal, and Similar Certificates.
Statements of fact contained in a certificate that the maker
performed a marriage or other ceremony or administered
a sacrament, made by a member of the clergy, public
official, or other person authorized by the rules or
practices of a religious organization or by law to perform
the act certified, and purporting to have been issued at the
time of the act or within a reasonable time thereafter.
(13) Family Records. Statements of fact concerning personal
or family history contained in family Bibles, genealogies,
charts, engravings on rings, inscriptions on family
portraits, engravings on urns, crypts, or tombstones, or the
like.
Page 19
sustain the judgment of conviction. In criminal cases,
evidence of a judgment, entered after a trial or upon a plea
of guilty or nolo contendere, adjudging a person guilty of
a criminal offense, to prove any fact essential to sustain the
judgment of conviction, but not including, when offered
by the state for purposes other than impeachment,
judgments against persons other than the accused. In all
cases, the pendency of an appeal renders such evidence
inadmissible.
(14) Records of Documents Affecting an Interest in

Property. The record of a document purporting to
establish or affect an interest in property, as proof of the
content of the original recorded document and its
execution and delivery by each person by whom it
purports to have been executed, if the record is a record of
a public office and an applicable statute authorizes the
recording of documents of that kind in that office.
(15) Statements in Documents Affecting an Interest in
Property.
A statement contained in a document
purporting to establish or affect an interest in property if
the matter stated was relevant to the purpose of the
document, unless dealings with the property since the
document was made have been inconsistent with the truth
of the statement or the purport of the document.
(16) Statements in Ancient Documents. Statements in a
document in existence twenty years or more the
authenticity of which is established.
(17) M arket Reports, Commercial Publications. Market
quotations, tabulations, lists, directories, or other
published compilations, generally used and relied upon by
the public or by persons in particular occupations.
(18) Learned Treatises. To the extent called to the attention
of an expert witness upon cross-examination or relied
upon by the expert in direct examination, statements
contained in published treatises, periodicals, or pamphlets
on a subject of history, medicine, or other science or art
established as a reliable authority by the testimony or
admission of the witness or by other expert testimony or
by judicial notice. If admitted, the statements may be read
into evidence but may not be received as exhibits.
(19) Reputation Concerning Personal or Family History.
Reputation among members of a persons family by blood,
adoption, or marriage, or among a persons associates, or
in the community, concerning a persons birth, adoption,
marriage, divorce, death, legitimacy, relationship by
blood, adoption, or marriage, ancestry, or other similar
fact of personal or family history.
(20) Reputation Concerning Boundaries or General
History. Reputation in a community, arising before the
controversy, as to boundaries of or customs affecting lands
in the community, and reputation as to events of general
history important to the community or state or nation in
which located.
(21) Reputation as to Character. Reputation of a persons
character among associates or in the community.
(22) Judgment of Previous Conviction. In civil cases,
evidence of a judgment, entered after a trial or upon a plea
of guilty (but not upon a plea of nolo contendere), judging
a person guilty of a felony, to prove any fact essential to
(23) Judgment as to Personal, Family, or General History,

or Boundaries. Judgments as proof of matters of
personal, family or general history, or boundaries,
essential to the judgment, if the same would be provable
by evidence of reputation.
(24) Statement Against Interest. A statement which was at
the time of its making so far contrary to the declarants
pecuniary or proprietary interest, or so far tended to
subject the declarant to civil or criminal liability, or to
render invalid a claim by the declarant against another, or
to make the declarant an object of hatred, ridicule, or
disgrace, that a reasonable person in declarants position
would not have made the statement unless believing it to
be true. In criminal cases, a statement tending to expose
the declarant to criminal liability is not admissible unless
corroborating circumstances clearly indicate the
trustworthiness of the statement.
RULE 804. HEARSAY EXCEPTIONS; DECLARANT
UNAVAILABLE
(a)
Definition of Unavailability. "Unavailability as a

witness" includes situations in which the declarant:
(1)
is exempted by ruling of the court on the ground of

privilege from testifying concerning the subject
matter of the declarants statement;
(2)
persists in refusing to testify concerning the subject

matter of the declarants statement despite an order
of the court to do so;
(3)
testifies to a lack of memory of the subject matter of

the declarants statement;
(4)
is unable to be present or to testify at the hearing

because of death or then existing physical or mental
illness or infirmity; or
(5)
is absent from the hearing and the proponent of the

declarants statement has been unable to procure the
declarants attendance or testimony by process or
other reasonable means.
A declarant is not unavailable as a witness if the

declarants exemption, refusal, claim of lack of memory,
inability, or absence is due to the procurement or wrong-
Page 20
doing of the proponent of the declarants statement for the

purpose of preventing the witness from attending or
testifying.
(b)
Hearsay Exceptions. The following are not excluded if

the declarant is unavailable as a witness:
(1)
(2)
(3)
Former testimony. In civil cases, testimony given as

a witness at another hearing of the same or a
different proceeding, or in a deposition taken in the
course of another proceeding, if the party against
whom the testimony is now offered, or a person with
a similar interest, had an opportunity and similar
motive to develop the testimony by direct, cross, or
redirect examination. In criminal cases, testimony
given as a witness at another hearing of the same or
a different proceeding, if the party against whom the
testimony is now offered had an opportunity and
similar motive to develop the testimony by direct,
cross, or redirect examination. In criminal cases the
use of depositions is controlled by Chapter 39 of the
Code of Criminal Procedure.
Dying declarations.
A statement made by a
declarant while believing that the declarants death
was imm inent, concerning the cause or
circumstances of what the declarant believed to be
impending death.
Statement of personal or family history.
W hen a hearsay statement, or a statement defined in Rule

801(e)(2) (C), (D), or (E), or in civil cases a statement defined in
Rule 801(e)(3), has been admitted in evidence, the credibility of
the declarant may be attacked, and if attacked may be supported
by any evidence which would be admissible for those purposes
if declarant had testified as a witness. Evidence of a statement or
conduct by the declarant at any time, offered to impeach the
declarant, is not subject to any requirement that the declarant
may have been afforded an opportunity to deny or explain. If the
party against whom a hearsay statement has been admitted calls
the declarant as a witness, the party is entitled to examine the
declarant on the statement as if under cross-examination.
ARTICLE IX. AUTHENTICATION AND

IDENTIFICATION
RULE 901. REQUIREM ENT OF AUTHENTICATION

OR IDENTIFICATION
(a)
General Provision. The requirement of authentication or

identification as a condition precedent to admissibility is
satisfied by evidence sufficient to support a finding that
the matter in question is what its proponent claims.
(b)
Illustrations. By way of illustration only, and not by way

of limitation, the following are examples of authentication
or identification conforming with the requirements of this
rule:
(A) A statement concerning the declarants own

birth, adoption, marriage, divorce, legitimacy,
relationship by blood, adoption, or marriage,
ancestry, or other similar fact of personal or
family history even though declarant had no
means of acquiring personal knowledge of the
matter stated; or
(1)
Testimony of witness with knowledge. Testimony

that a matter is what it is claimed to be.
(2)
Nonexpert opinion on handwriting. Nonexpert

opinion as to the genuineness of handwriting, based
upon familiarity not acquired for purposes of the
litigation.
(B) A statement concerning the foregoing matters,

and death also, of another person, if the
declarant was related to the other by blood,
adoption, or marriage or was so intimately
associated with the others family as to be
likely to have accurate information concerning
the matter declared.
(3)
Comparison by trier or expert witness. Comparison

by the trier of fact or by expert witness with
specimens which have been found by the court to be
genuine.
(4)
Distinctive characteristics and the like. Appearance,

contents, substance, internal patterns, or other
distinctive characteristics, taken in conjunction with
circumstances.
(5)
Voice identification. Identification of a voice,

whether heard firsthand or through mechanical or
electronic transmission or recording, by opinion
based upon hearing the voice at anytime under
circumstances connecting it with the alleged speaker.
(6)
Telephone conversations. Telephone conversations,

by evidence that a call was made to the number
RULE 805. HEARSAY W ITHIN HEARSAY

Hearsay included within hearsay is not excluded under the
hearsay rule if each part of the combined statements conforms
with an exception to the hearsay rule provided in these rules.
RULE 806. ATTACKING AND SUPPORTING

CREDIBILITY OF DECLARANT

assigned at the time by the telephone company to a
particular person or business, if:
Page 21
(3)
Foreign Public Documents. A document purporting to

be executed or attested in an official capacity by a person,
authorized by the laws of a foreign country to make the
execution or attestation, and accompanied by a final
certification as to the genuineness of the signature and
official position (A) of the executing or attesting person,
or (B) of any foreign official whose certificate of
genuineness of signature and official position relates to the
execution or attestation or is in a chain of certificates of
genuineness of signature and official position relating to
the execution or attestation. A final certification may be
made by a secretary of embassy or legation, consul
general, consul, vice consul, or consular agent of the
United States, or a diplomatic or consular official of the
foreign country assigned or accredited to the United
States. If reasonable opportunity has been given to all
parties to investigate the authenticity and accuracy of
official documents, the court may, for good cause shown,
order that they be treated as presumptively authentic
without final certification or permit them to be evidenced
by an attested summary with or without final certification.
The final certification shall be dispensed with whenever
both the United States and the foreign country in which the
official record is located are parties to a treaty or
convention that abolishes or displaces such requirement,
in which case the record and the attestation shall be
certified by the means provided in the treaty or
convention.
(4)
Certified Copies of Public Records. A copy of an

official record or report or entry therein, or of a document
authorized by law to be recorded or filed and actually
recorded or filed in a public office, including data
compilations in any form certified as correct by the
custodian or other person authorized to make the
certification, by certificate complying with paragraph (1),
(2) or (3) of this rule or complying with any statute or
other rule prescribed pursuant to statutory authority.
Extrinsic evidence of authenticity as a condition precedent to

admissibility is not required with respect to the following:
(5)
Official Publications. Books, pamphlets, or other

publications purporting to be issued by public authority.
Domestic Public Documents Under Seal. A document

bearing a seal purporting to be that of the United States, or
of any State, district, Commonwealth, territory, or insular
possession thereof, or the Panama Canal Zone, or the
Trust Territory of the Pacific Islands, or of a political
subdivision, department, officer, or agency thereof, and a
signature purporting to be an attestation or execution.
(6)
Newspapers and Periodicals.

Printed
purporting to be newspapers or periodicals.
(7)
Trade Inscriptions and the Like. Inscriptions, signs,

tags, or labels purporting to have been affixed in the
course of business and indicating ownership, control, or
origin.
Domestic Public Documents Not Under Seal. A

document purporting to bear the signature in the official
capacity of an officer or employee of any entity included
in paragraph (1) hereof, having no seal, if a public officer
having a seal and having official duties in the district or
political subdivision of the officer or employee certifies
under seal that the signer has the official capacity and that
the signature is genuine.
(8)
Acknowledged Documents. Documents accompanied by

a certificate of acknowledgment executed in the manner
provided by law by a notary public or other officer
authorized by law to take acknowledgments.
(9)
Commercial Paper and Related Documents.

Commercial paper, signatures thereon, and documents
(A) in the case of a person, circumstances,

including self-identification, show the person
answering to be the one called; or
(B) in the case of a business, the call was made to
a place of business and the conversation related
to business reasonably transacted over the
telephone.
(7)
Public records or reports. Evidence that a writing

authorized by law to be recorded or filed and in fact
recorded or filed in a public office, or a purported
public record, report, statement, or data compilation,
in any form, is from the public office where items of
this nature are kept.
(8)
Ancient documents or data compilation. Evidence

that a document or data compilation, in any form,
(A) is in such condition as to create no suspicion
concerning its authenticity, (B) was in a place where
it, if authentic, would likely be, and (C) has been in
existence twenty years or more at the time it is
offered.
(9)
Process or system. Evidence describing a process or

system used to produce a result and showing that the
process or system produces an accurate result.
(10) Methods provided by statute or rule. Any method of

authentication or identification provided by statute or
by other rule prescribed pursuant to statutory
authority.
RULE 902. SELF-AUTHENTICATION
(1)
(2)
materials
Page 22

No ______________
relating thereto to the extent provided by general

commercial law.
(10) Business Records Accompanied by Affidavit.
(a)
(b)
Records or photocopies; admissibility; affidavit;

filing.
Any record or set of records or
photographically reproduced copies of such records,
which would be admissible under Rule 803(6) or (7)
shall be admissible in evidence in any court in this
state upon the affidavit of the person who would
otherwise provide the prerequisites of Rule 803(6) or
(7), that such records attached to such affidavit were
in fact so kept as required by Rule 803(6) or (7),
provided further, that such record or records along
with such affidavit are filed with the clerk of the
court for inclusion with the papers in the cause in
which the record or records are sought to be used as
evidence at least fourteen days prior to the day upon
which trial of said cause commences, and provided
the other parties to said cause are given prompt
notice by the party filing same of the filing of such
record or records and affidavit, which notice shall
identify the name and employer, if any, of the person
making the affidavit and such records shall be made
available to the counsel for other parties to the action
or litigation for inspection and copying. The
expense for copying shall be borne by the party,
parties or persons who desire copies and not by the
party or parties who file the records and serve notice
of said filing, in compliance with this rule. Notice
shall be deemed to have been promptly given if it is
served in the manner contemplated by Rule of Civil
Procedure 21a fourteen days prior to commencement
of trial in said cause.
Form of affidavit. A form for the affidavit of such
person as shall make such affidavit as is permitted in
paragraph (a) above shall be sufficient if it follows
this form though this form shall not be exclusive, and
an affidavit which substantially complies with the
provisions of this rule shall suffice, to-wit:
John Doe (Name of Plaintiff)
v.
John Roe (Name of Defendant)
IN THE __________
COURT IN AND FOR
_________ COUNTY,
TEXAS
AFFIDAVIT
Before me, the undersigned authority, personally appeared
_________, who, being by me duly sworn, deposed as follows:
My name is _________, I am of sound mind, capable of
making this affidavit, and personally acquainted with the facts
herein stated:
I am the custodian of the records of _________. Attached
hereto are _____ pages of records from ______. These said
____ pages of records are kept by ________ in the regular
course of business, and it was the regular course of business of
__________ for an employee or representative of ________,
with knowledge of the act, event, condition, opinion, or
diagnosis, recorded to make the record or to transmit information
thereof to be included in such record; and the record was made
at or near the time or reasonably soon thereafter. The records
attached hereto are the original or exact duplicates of the
original.
______________________________________
Affiant
SW ORN TO AND SUBSCRIBED before me on the
_________ day of _________, 19 ____.
_____________________________________
Notary Public, State of Texas
____________________________________
Notarys printed name:
____________________________________
My commission expires:
(c)
Medical expenses affidavit. A party may make prima

facie proof of medical expenses by affidavit that
substantially complies with the following form:

Affidavit of Records Custodian of
____________________________________
STATE OF TEXAS
COUNTY OF ______________
Before me, the undersigned authority, personally appeared
__________, who, being by me duly sworn, deposed as follows:
Mv name is __________. I am of sound mind and capable
of making this affidavit, and personally acquainted with the facts
herein stated.
I am a custodian of records for __________. Attached to
this affidavit are records that provide an itemized statement of
the service and the charge for the service that __________
provided to __________ on _____. The attached records are a
part of this affidavit.
The attached records are kept by __________ in the
regular course of business, and it was the regular course of
business of __________ for an employee or representative of
__________, with knowledge of the service provided, to make
the record or to transmit information to be included in the record.
The records were made in the regular course of business at or
near the time or reasonably soon after the time the service was
provided. The records are the original or a duplicate of the
original.
Page 23
must also meet the admissibility standard of Haygood, 356
S.W .3d at 399-400 ([O]nly evidence of recoverable medical
expenses is admissible at trial,).
(11) Presumptions Under Statutes or Other Rules. Any
signature, document, or other matter declared by statute
or by other rules prescribed pursuant to statutory
authority to be presumptively or prima facie genuine or
authentic.
RULE 903. SUBSCRIBING W ITNESS TESTIM ONY

UNNECESSARY
The testimony of a subscribing witness is not necessary to
authenticate a writing unless required by the laws of the
jurisdiction whose laws govern the validity of the writing.
ARTICLE X. CONTENTS OF W RITINGS,

RECORDINGS, AND PHOTOGRAPHS
RULE 1001. DEFINITIONS

For purposes of this article the following definitions are
applicable:
(a)
W ritings and Recordings. "W ritings" and

"recordings" consist of letters, words, or numbers or
their equivalent, set down by handwriting, typewriting,
printing, photostating, photographing, magnetic impulse,
mechanical or electronic recording, or other form of
data compilation.
(b)
Photographs. "Photographs" include still photographs,

X-ray films, video tapes, and motion pictures.
(c)
Original. An "original" of a writing or recording is the

writing or recording itself or any counterpart intended to
have the same effect by a person executing or issuing it.
An "original" of a photograph includes the negative or
any print therefrom. If data are stored in a computer or
similar device, any printout or other output readable by
sight, shown to reflect the data accurately, is an
"original."
(d)
Duplicate. A "duplicate" is a counterpart produced by

the same impression as the original, or from the same
matrix, or by means of photography, including
enlargements and miniatures, or by mechanical or
electronic re-recording, or by chemical reproduction, or
by other equivalent techniques which accurately
reproduce the original.
The services provided were necessary and the amount

charged for the services was reasonable at the time and place that
the services were provided.
The total amount paid for the services was $_____ and the
amount currently unpaid but which __________ has a right to be
paid after any adjustments or credits is $_____.
________________________
Affiant
SW ORN TO AND SUBSCRIBED before me on the _____ day
of _____, _____.
________________________
Notary Public, State of Texas
Notarys printed name: _______________
My commission expires: ____________
Comment to 2013 Change: Rule 902(10)(c) is added to provide
a form affidavit for proof of medical expenses. The affidavit is
intended to comport with Section 41.0105 of the Civil Practice
and Remedies Code, which allows evidence of only those
medical expenses that have been paid or will be paid, after any
required credits or adjustments. See Haygood v. Escabedo, 356
S.W .3d 390 (Tex. 2011). The records attached to the affidavit
RULE 1002. REQUIREM ENT OF ORIGINALS
Case No. 02-14-00286-CV

Fort Worth, Texas
FRANCIS W.S. CHAN,

Appellant
v.
Appellees
AFFIDAVIT OF NO EVIDENCE IN
SUPPORT OF APPELLANT'S BRIEF
STATE OF TEXAS
TARRANT COUNTY
Before me, the undersigned notary, on this day personally appeared Mayur Amin,
the affiant, a person whose identity is known to me. After I administered an oath
to affiant, affiant testified:
1.
"My name is Mayur Amin. I am over 18 years of age, of sound mind, and
capable of making this affidavit. The facts in this affidavit are within my personal
knowledge and are true and correct.
I have been trial counsel for Francis W.S. Chan since the inception of this
2.
case.
3.
The trial court based its orders on the papers on file in this case and the
arguments of the attorneys. There is no evidence of any live witness testimony
Page 1 of2
and related exhibits being received into evidence at any of the hearings pertaining
to the trial court orders that are the subject of this appeal.
4.
There is no evidence that the Sharpe appellees ever noticed and set for
hearing their first motion to disqualify me as appellant's trial counsel and there is
no evidence that a court order ever issued on that first motion.
5.
In each instance in appellant's brief where he states that the appellees did
not file a response to any particular motion made by appellant, it is true that there
is no evidence of such a response ever bein fil "
Sworn to and subscribed before me
Notary Public in an
the State of Texas
My commission expires: }I~CJ- fS"
CHERIE SINGLETON
Notary Public
STATE OF TEXAS
MyComm. Exp.11-09-15
Page 2 of2
ACCEPTED
02-14-00286-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
3/11/2015 7:46:22 AM
DEBRA SPISAK
CLERK
Case No. 02-14-00286-CV

Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
Appellees
_______________________________________________
Appealed from the 48TH District Court of Tarrant County, Texas
Cause No. 48-243228-10; Honorable David L. Evans, Presiding
________________________________________________________________
APPELLANTS REPLY BRIEF
________________________________________________________________
Mayur Amin
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
ATTORNEY FOR APPELLANT.
Case No. 02-14-00286-CV

Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
J. SHELBY SHARPE, HENRY CHANG, KAREN CHANG &
THE LAW OFFICES OF J. SHELBY SHARPE,
Appellees
________________________________________________
_________________________________________________
APPELLANT:
Represented By:

Mayur Amin
TX Bar No. 00790227
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
APPELLEES:
Represented By:
APPELLEES:
Represented By:

John W. Proctor
TX Bar No. 16347300
Ph. 817-332-1391
Fax 817-870-2427
Mr. Henry Chang &

Mrs. Karen Chang
TX Bar No. 17955500
Ph. 817-332-2500
Fax 817-878-9280
ii
TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL....i
INDEX OF AUTHORITIES....vii
ARGUMENT......1
I.
Sharpe argues that Appellants claims are barred by limitations because
Appellant judicially admitted that his claims should have been filed before
12/31/09. The Changs argue that the continuing tort doctrine does not apply to
Appellants claims because he suffered only one distinct injury. The appellees
waived these arguments because they were never presented to the trial court.
Sharpes argument also fails because there is no evidence in the record to
support it. The Changs further argue that judgment was proper on limitations
because appellant failed to prove that the continuing tort doctrine applied. This
argument fails because they filed a defective motion. The burden of proof does
not shift unless a proper motion is filed. In any case, it is the movants duty to
conclusively establish the accrual date when seeking summary judgment on a
limitations defense. See Sections I(1) and O of this Reply1
II.
Sharpe argues that the PDG Group case is controlling on the fiduciary
breach and civil conspiracy claims. The Changs argue that the Lone Star case is
controlling on the issue of a no evidence motion made pursuant to 21.223 of
the Tex. Bus. Orgs. Code. They also argue that the Palombo and Butler cases are
controlling on a no evidence motion made on a limitations defense. Appellees
cases are materially distinguishable. The attorney sued in PDG Group was not
found to have switched sides on the same matter and did not participate in an
on-going fiduciary breach. Appellant here did not plead veil piercing theories
and the alter ego doctrine as a basis to hold the Changs liable as did the Lone
Star appellant. The Palombo and Butler cases involve traditional summary
judgment motions; not a pure no evidence motion on limitations as the Changs
filed here. See Sections B(5), H(3), N(3) and O(2) of this Reply...1
iii
III. Sharpe argues that (i) an attorney can only be held liable for misuse of
privileged confidential information, (ii) attorneys fees are only recoverable
pursuant to contract or statute, (iii) a non-movant has a duty to show prejudice on
a motion for severance, and (iv) the TUFTA severance order and the attorney
disqualification order are not ripe for appeal unless summary judgment is
reversed. Appellees arguments are based on incorrect, incomplete, and/or
misleading statements of Texas law. Confidential information includes both
privileged and unprivileged client information. Attorneys fees are also
recoverable in equity as a form of damage. When bifurcation is an option, as it
was here, the movant has the burden to show how he would be prejudiced if his
motion for severance is denied. Pretrial interlocutory orders are simultaneously
appealable with a final judgment because they merge into the final judgment. See
Sections B(1), G, K(1), K(2) and L(2) of this Reply....2
IV. Sharpe argues that (i) certain of Appellants statements of facts are
incorrect, (ii) he did not switch sides for a profit motive, (iii) he never met with
the Changs to discuss how appellant could be prevented from receiving money,
(iv) he never disclosed to the Changs the content of any conversations he had
with Appellant, (v) he declined to represent Appellant at the October 2004
preliminary consultation because he was friends with the Changs, (vi) Appellant
judicially admitted suit should have been filed by 12/31/09, (vii) the interlocutory
discovery orders discussed in Appellants brief are not ripe for appeal, and (viii)
the TUFTA claims are standalone claims. Appellees arguments are irrelevant,
frivolous, and/or not supported by Texas law. See Sections A, B(4), D, E, F(3),
H(2), I(1), J, and K(3) of this Reply2
V.
The Changs argue that (i) summary judgment was proper pursuant to a
statutory claim made under 21.223 of the Tex. Bus. Orgs. Code, (ii) whether a
fiduciary duty exists between the Changs and appellant has no bearing on the
courts summary judgment, and (iii) Appellant cannot bring a tort cause of action
against them because the relief he seeks is for breach of contract damages.
Appellees arguments are irrelevant, frivolous, and/or not supported by Texas
law. See Sections N(1), N(2), O(3), P(1) and P(4) of this Reply.2
VI. The Changs argue that Appellant has tried to skirt or side step certain
issues in his brief. Appellees lack standing to make this argument. See Section
M of this Reply.2
iv
VII. The Changs argue that under Texas law it is necessary for Appellant to
pierce the corporate veil in order to impose liability on them because of their
status as shareholders under Tex. Bus. Orgs. Code 21.223-224. This
argument fails because the Walker v. Anderson case clearly holds that these
statutory defenses do not shield the Changs from personally liability for their
participation in tortious conduct. The Changs also argue that Appellant waived
his arguments with respect to said statutory sections because he failed to present
them to the trial court. This is a substantial, if not also a patent,
misrepresentation of what the record shows. Appellant presented the subject
arguments, in part, in his summary judgment response and also in his August 22,
2014 motion for new trial. See Section P(5) of this Reply.....................................3
VIII. The rules governing attorney conduct state that a lawyer (i) shall not
knowingly make a false statement of material fact or law to a tribunal or offer or
use evidence that the lawyer knows to be false; 1 (ii) should not misrepresent or
mischaracterize the factual record or legal authorities; 2 and (iii) shall not engage in
conduct involving dishonesty, deceit, or misrepresentation. 3 Mr. John Proctor
maintains that: (i) certain of Sharpes evidence remains undisputed or
uncontradicted, (ii) there is no evidence or nothing in the record to support
certain of appellants claims or arguments, (iii) appellant failed to cite any legal
authority to support certain of his arguments, and (iv) Amin was disqualified
because of his continued insistence on being a witness at jury trial. In this
regard, Appellant points to approximately half a dozen instances where Mr. Proctor
makes patent misrepresentations. See Sections B(3), C(3), F(1), F(2), I(2), I(3),
K(4) and L(1) of this Reply. On about four other occasions, he substantially
mischaracterizes the record. See Sections B(2), C(1), C(2), F(3), and H(1) of this
Reply..........................................................................................................................3
Tex. Disciplinary R. Prof. Conduct 3.03(a);

Rule 3 of the Standards of Appellate Conduct (Lawyers Duties to the Court)
3
Tex. Disciplinary R. Prof. Conduct 8.04(a)(3);
2
IX. Given the overall tenor of the brief he signed and the sheer number of
misrepresentations involved, one must reasonably conclude that Mr. Proctor
acted knowingly, if not intentionally. Such conduct is not befitting of a lawyer of
Mr. Proctors age, intelligence, experience, and caliber. First, it shows disdain
and disrespect for this court. Second, it puts members of this court in a difficult
position.4 They must now consider their responsive obligations under Canon
3D(2) of the Texas Code of Judicial Conduct. Third, and even more troubling, is
that it shows a general lack of concern for ones own reputation. This is a clear
indication that Mr. Proctor is acting unconsciously. 5 Maybe this argument will
bring some awareness. Maybe that awareness will allow Mr. Proctor to conclude
that candidly reporting himself to the State Bar for disciplinary action is in his
own best interest. The ultimate and only purpose of human life is spiritual
development; of which truth, ethics, integrity and discipline are
prerequisites....4
CERTIFICATIONS.........32, 33
APPENDIX...End
It also puts appellants counsel in the same difficult position. See Rule 8.03 of the Tex.
Disciplinary R. Prof. Conduct.
5
Admittedly, Amin too has acted unconsciously at some time or another, just as we all have.
We are only human. The key is that when we realize this truth, we strive to improve; no
matter how often we may fall.
vi
STATUTES:
Tex. Bus. Orgs. Code 21.223...1-3, 21-23, 31
Tex. Bus. Orgs. Code 21.224..31
Tex. R. App. P. 38.1(g)...4
Tex. R. Civ. P. 166a(i).....22, 24
Tex. Code of Judicial Conduct Canon 3D(2)...4
Tex. Disciplinary R. Prof. Conduct 3.03(a)....3
Tex. Disciplinary R. Prof. Conduct 3.08(a)......19
CASES:
Butler v. Lowes Home Ctrs., Inc.,
No. 14-10-00297-CV, 2011 WL 1709898 (Tex.App.-Houston [14th Dist.] 2011,
pet. denied)..1, 24, 25
City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671 (Tex. 1979)...14, 26
vii
Doyle v. Komtemporary Builders, Inc., 370 S.W.3d 448 (Tex.App.-Dallas 2012,

pet. denied)....23
First General Realty Corp. v. Maryland Cas. Co.,
981 S.W.2d 495 (Tex.App.-Austin 1998, no pet.)..15, 25
Holloway v. Skinner,
898 S.W.2d 793 (Tex.1995)..29
In re Ben E. Keith Co.,
198 S.W.3d 844 (Tex.App.-Fort Worth 2006, orig. proceeding)17
In re ParkCentral Global Litigation,
No. 3:09-CV-0765-M (Lead Case) 2010 WL 3119403 (N.D. Tex. August 5,
2010) (mem. op.) (Lynn, J)...22
Lone Star Air Sys., Ltd. V. Powers,
401 S.W.3d 855 (Tex.App.-Houston [14th Dist.] 2013, no pet.)..............1, 22-23
Lubbock City v. Trammels Lubbock Bail Bonds,
80 S.W.3d 580 (Tex. 2002)...25
Lyons v. Lindsey Morden Claims Mgmt.,
985 S.W.2d 86 (Tex.App.-El Paso 1998, no pet.)29
M.D. Anderson Hosp. & Tumor Inst. V. Willrich
28 S.W.3d 22 (Tex. 2000).....5, 10
Mott v. Red's Safe and Lock Services, Inc.,
249 S.W.3d 90 (Tex.App.-Houston [1 Dist.] 2007, no pet.).....24
viii
Palombo v. Sw. Airlines Co.,

No. 04-05-00825-CV, 2006 WL 1993783 (Tex.App.-San Antonio 2006, pet.
denied).1, 24-25
PDG Group Inc. v. Holloway et al,
2006 Tex.App. LEXIS 5168 (Tex.App.-Fort Worth 2006, no pet.)..1, 7, 8 13
Ritchie v. Rupe,
443 S.W.3d 856 (Tex. 2014).30
State v. Tamminga,
928 S.W.2d 737 (Tex. App. Waco 1996)...18
S.V. v. R.V.,
933 S.W.2d 1 (Tex. 1996)....15, 26
Thomas v. Omar Investments, Inc.,
156 S.W.3d 681 (Tex.App.-Dallas 2005, no pet.)...22-24
Walker v. Anderson,
232 S.W.3d 899 (Tex.App.-Dallas 2007)....3, 29, 31
Wheeler v. Green,
157 S.W.3d 439, 442 (Tex. 2005).....32
OTHER AUTHORITY:
Standards of Appellate Conduct (adopted by The Texas Supreme Court)
(Lawyers Duties to the Court) (Rule 3) 3
ix

Appellees arguments fail because (1) they have been waived; (2) they are
supported by materially distinguishable cases; (3) they are supported by
incorrect, incomplete, and/or misleading statements of Texas law; (4) they are
irrelevant; (5) they are frivolous; (6) they are based on misrepresentations about
and/or mischaracterizations of the factual record; and/or (7) they are based on
substantially and/or patently false statements or arguments.
ARGUMENT
I.
Sharpe argues that Appellants claims are barred by limitations because
Appellant judicially admitted that his claims should have been filed before
12/31/09. The Changs argue that the continuing tort doctrine does not apply to
Appellants claims because he suffered only one distinct injury. The appellees
waived these arguments because they were never presented to the trial court.
Sharpes argument also fails because there is no evidence in the record to
support it. The Changs further argue that judgment was proper on limitations
because appellant failed to prove that the continuing tort doctrine applied. This
argument fails because they filed a defective motion. The burden of proof does
not shift unless a proper motion is filed. In any case, it is the movants duty to
conclusively establish the accrual date when seeking summary judgment on a
limitations defense. See Sections I(1) and O of this Reply.
II.
Sharpe argues that the PDG Group case is controlling on the fiduciary
breach and civil conspiracy claims. The Changs argue that the Lone Star case is
controlling on the issue of a no evidence motion made pursuant to 21.223 of
the Tex. Bus. Orgs. Code. They also argue that the Palombo and Butler cases are
controlling on a no evidence motion made on a limitations defense. Appellees
cases are materially distinguishable. The attorney sued in PDG Group was not
found to have switched sides on the same matter and did not participate in an
on-going fiduciary breach. Appellant here did not plead veil piercing theories
and the alter ego doctrine as a basis to hold the Changs liable as did the Lone
Star appellant. The Palombo and Butler cases involve traditional summary
judgment motions; not a pure no evidence motion on limitations as the Changs
filed here. See Sections B(5), H(3), N(3) and O(2) of this Reply.
III. Sharpe argues that (i) an attorney can only be held liable for misuse of
privileged confidential information, (ii) attorneys fees are only recoverable
pursuant to contract or statute, (iii) a non-movant has a duty to show prejudice on
a motion for severance, and (iv) the TUFTA severance order and the attorney
disqualification order are not ripe for appeal unless summary judgment is
reversed. Appellees arguments are based on incorrect, incomplete, and/or
misleading statements of Texas law. Confidential information includes both
privileged and unprivileged client information. Attorneys fees are also
recoverable in equity as a form of damage. When bifurcation is an option, as it
was here, the movant has the burden to show how he would be prejudiced if his
motion for severance is denied. Pretrial interlocutory orders are simultaneously
appealable with a final judgment because they merge into the final judgment. See
Sections B(1), G, K(1), K(2) and L(2) of this Reply.
IV. Sharpe argues that (i) certain of Appellants statements of facts are
incorrect, (ii) he did not switch sides for a profit motive, (iii) he never met with
the Changs to discuss how appellant could be prevented from receiving money,
(iv) he never disclosed to the Changs the content of any conversations he had
with Appellant, (v) he declined to represent Appellant at the October 2004
preliminary consultation because he was friends with the Changs, (vi) Appellant
judicially admitted suit should have been filed by 12/31/09, (vii) the interlocutory
discovery orders discussed in Appellants brief are not ripe for appeal, and (viii)
the TUFTA claims are standalone claims. Appellees arguments are irrelevant,
frivolous, and/or not supported by Texas law. See Sections A, B(4), D, E, F(3),
H(2), I(1), J, and K(3) of this Reply.
V.
The Changs argue that (i) summary judgment was proper pursuant to a
statutory claim made under 21.223 of the Tex. Bus. Orgs. Code, (ii) whether a
fiduciary duty exists between the Changs and appellant has no bearing on the
courts summary judgment, and (iii) Appellant cannot bring a tort cause of action
against them because the relief he seeks is for breach of contract damages.
Appellees arguments are irrelevant, frivolous, and/or not supported by Texas
law. See Sections N(1), N(2), O(3), P(1) and P(4) of this Reply.
VI. The Changs argue that Appellant has tried to skirt or side step certain
issues in his brief. Appellees lack standing to make this argument. See Section
M of this Reply.
2
VII. The Changs argue that under Texas law it is necessary for Appellant to
pierce the corporate veil in order to impose liability on them because of their
status as shareholders under Tex. Bus. Orgs. Code 21.223-224. This
argument fails because the Walker v. Anderson case clearly holds that these
statutory defenses do not shield the Changs from personally liability for their
participation in tortious conduct. The Changs also argue that Appellant waived
his arguments with respect to said statutory sections because he failed to present
them to the trial court. This is a substantial, if not also a patent,
misrepresentation of what the record shows. Appellant presented the subject
arguments, in part, in his summary judgment response and also in his August 22,
2014 motion for new trial. See Section P(5) of this Reply.
VIII. The rules governing attorney conduct state that a lawyer (i) shall not
knowingly make a false statement of material fact or law to a tribunal or offer or
use evidence that the lawyer knows to be false; 1 (ii) should not misrepresent or
mischaracterize the factual record or legal authorities; 2 and (iii) shall not engage in
conduct involving dishonesty, deceit, or misrepresentation. 3 Mr. John Proctor
maintains that: (i) certain of Sharpes evidence remains undisputed or
uncontradicted, (ii) there is no evidence or nothing in the record to support
certain of appellants claims or arguments, (iii) appellant failed to cite any legal
authority to support certain of his arguments, and (iv) Amin was disqualified
because of his continued insistence on being a witness at jury trial. In this
regard, Appellant points to approximately half a dozen instances where Mr. Proctor
makes patent misrepresentations. See Sections B(3), C(3), F(1), F(2), I(2), I(3),
K(4) and L(1) of this Reply. On about four other occasions, he substantially
mischaracterizes the record. See Sections B(2), C(1), C(2), F(3), and H(1) of this
Reply.
Tex. Disciplinary R. Prof. Conduct 3.03(a);

Rule 3 of the Standards of Appellate Conduct (Lawyers Duties to the Court)
3
Tex. Disciplinary R. Prof. Conduct 8.04(a)(3);
2
IX. Given the overall tenor of the brief he signed and the sheer number of
misrepresentations involved, one must reasonably conclude that Mr. Proctor acted
knowingly, if not intentionally. Such conduct is not befitting of a lawyer of Mr.
Proctors age, intelligence, experience, and caliber. First, it shows disdain and
disrespect for this court. Second, it puts members of this court in a difficult
position.4 They must now consider their responsive obligations under Canon
3D(2) of the Texas Code of Judicial Conduct. Third, and even more troubling, is
that it shows a general lack of concern for ones own reputation. This is a clear
indication that Mr. Proctor is acting unconsciously. 5 Maybe this argument will
bring some awareness. Maybe that awareness will allow Mr. Proctor to conclude
that candidly reporting himself to the State Bar for disciplinary action is in his own
best interest. The ultimate and only purpose of human life is spiritual
development; of which truth, ethics, integrity and discipline are prerequisites.
REPLY TO SHARPES BRIEF SECTION TITLED:
A.
Challenge to Appellants Statement of Facts 6
Sharpe lists seventeen statements of fact from Appellants Brief and
characterizes them as being incorrect. However, Sharpe fails to explain why
they are [allegedly] incorrect and fails to contradict them [in any manner that
would be readily discernable by this court] pursuant to Tex. R. App. P. 38.1(g). To
the extent that Sharpe classifies one or more of the subject statements as
incorrect because Sharpe disputes Appellants evidence with conflicting
4
It also puts appellants counsel in the same difficult position. See Rule 8.03 of the Tex.
Disciplinary R. Prof. Conduct.
5
Admittedly, Amin too has acted unconsciously at some time or another, just as we all have.
We are only human. The key is that when we realize this truth, we strive to improve; no
matter how often we may fall.
6
Sharpes Brief pg. 1;
evidence of his own, this type of argument is wholly irrelevant on an appeal from
summary judgment. The standard of review here is that this court is to take
Appellants evidence as true, indulge every reasonable inference in favor of
Appellant, and resolve all doubts in favor of Appellant. M.D. Anderson Hosp. &
Tumor Inst. V. Willrich, 28 S.W.3d 22, 23 (Tex. 2000).
B.
Trial Court Properly Granted Summary Judgment on Claim for Breach
of Fiduciary Duty 7
(1)
Sharpe argues that in order for Appellant to establish a breach of fiduciary
duty claim, Appellant must show that he gave Sharpe information not already
known to the other defendants. In other words, Sharpe implies that a fiduciary
breach based on an attorneys misuse of information is limited only to an
attorneys misuse of privileged confidential information. Sharpe has cited no
legal authority to support the proposition that this is an essential element of a
breach of fiduciary duty claim under Texas law. 8 In his response, Appellant
objected to such unsubstantiated legal conclusions. [CR 1107-09] See also page 21
of Appellants Brief. Sharpe fails to recognize that under Texas law confidential
information is defined to include both privileged and unprivileged client
information. See page 28 of Appellants Brief.
7
8

Id;
(2)
Sharpe argues that there is no evidence to show that he ever used any
information he received from Appellant to Appellants detriment. 9 More than a

scintilla of evidence shows that Appellant was injured by Sharpes misuse of his
confidential information. See pages 28-32, 49-51, and 63 of Appellants Brief.
Sharpe also argues there is no evidence to show that he ever benefited from use
of any information he received from Appellant.10 More than a scintilla of evidence
shows that Sharpe benefited from use of such information. See pages 32-39, 5253, and 63 of Appellants Brief.
(3)
Sharpe argues that it is undisputed that Tammy Chan was present during
the entire October 2004 preliminary consultation meeting with Appellant. 11 This
is patently false. In Appellants affidavit he states: My ex-wife was not there
during the entire meeting as she stepped out to go to the bathroom shortly after the
meeting started. [CR 1220]
(4)
Sharpe argues that his affidavit asserting that he [purportedly] never
disclosed to the Changs the content of any conversations he had with Appellant is
undisputed and thus dispositive of the fact that there was no fiduciary breach.12
Sharpe has cited no legal authority to establish that this is an essential element of a

Id;
11
Id;
12
Id;
10
breach of fiduciary duty claim (i.e. that showing this type of disclosure to have
occurred is the only manner by which one can establish a fiduciary breach under
Texas law). Since Appellant has shown at least four other ways a fiduciary breach
may be established, Sharpes argument is irrelevant and misleading. See pages
28, 40, 43, and 47 of Appellants Brief. Further, Appellant objected to the courts
use of this evidence as a basis to grant summary judgment. This is because
Sharpes evidence on this issue could not be readily controverted. [CR 1109-11]
See also page 67 of Appellants Brief.
(5)
Sharpe argues that the PDG Group case is controlling on Appellants breach
of fiduciary duty claims. 13 Appellant objected to Sharpes repeated attempts to

misapply the facts of that case to his. [CR 1108, 1116] Sharpe previously filed a
motion for summary judgment by trying to misapply the PDG Group case and it
was denied. The PDG Group case is materially distinguishable because the
attorney sued there did not become aware of the events made the basis of
plaintiffs claims against the other business owners until after these events
transpired. PDG Group Inc. v. Holloway et al, 2006 Tex.App. LEXIS 5168
(Tex.App.-Fort Worth 2006, no pet.)
In our case, Sharpe assisted with and
participated in the breaching of an on-going fiduciary duty between WFFI and
13
Appellant. See pages 54-61 of Appellants Brief.
Furthermore, there was no
finding in PDG Group that attorney Holloway unlawfully switch sides on the
same matters like Sharpe has done here. See pages 40-42 of Appellants Brief.
C.
Chans Flawed Breach of Fiduciary Duty Argument14
(1)
Sharpe argues that he never raised the issue of the existence of an attorney-
client relationship as a challenged element in his underlying third and fourth

summary judgment motions.15 This is substantially false. Sharpes third no
evidence motion for summary judgment states: While Sharpe and the firm still
contend there was never a fiduciary relationship with plaintiff Wing-Sing Chan
[CR 957] Under a no-evidence motion might a court not interpret this as a
challenge to the relationship element?
(2)
Sharpe argues that Tammy Chans affidavit unequivocally establishes that
he never had an attorney-client relationship with Appellant. 16
This is
substantially false. More than a scintilla of evidence shows that Sharpe in fact
had such a relationship. See pages 23-27 of Appellants Brief. Further, Tammy
Chans affidavit is defective as it fails to affirmatively show she is competent to
testify. See page 67 of Appellants Brief.
14

Id.
16
Id.
15
(3)
Sharpe argues that it remains uncontradicted that Appellant asked his wife
to help him find a lawyer after the October 2004 preliminary consultation
meeting.17 This is patently false. In his summary judgment response affidavit,
Appellant states: I did not ever tell my ex-wife after the meeting in October 2004
that Mr. Sharpe had refused to represent me nor did I ask her to help me find a
lawyer immediately thereafter as implied in her affidavit. [CR 1220]
D.
Sharpes Beneficence18
Based on an affidavit he signed just fourteen days before filing the
underlying April 2014 summary judgment motions, Sharpe wants this court to
believe that he told Appellant during the October 2004 preliminary consultation
that he would not represent him because Sharpe had a personal friendship with the
Changs. [CR 982-83] Yet, in his own discovery responses made four years prior to
the affidavit, Sharpe could not answer [even after a diligent search] questions about
when or under what circumstances he first met the Changs. [CR 1415] Similarly,
the Changs could not recall when they first met Sharpe. [CR 1460] All the
credible evidence shows that Sharpe only came to know the Changs on a personal
and professional basis after his October 2004 preliminary consultation with
Appellant. See pages 32-39 of Appellants Brief. Sharpes argument here is
17
18
Id.
irrelevant because this court is to take Appellants evidence as true, indulge every
reasonable inference in favor of Appellant, and resolve all such doubts in favor of
Appellant. M.D. Anderson Hosp., 28 S.W.3d at 23.
E.
Switching Sides 19
Sharpe argues that he could not have switched sides [in June of 2005] to
represent the Changs and WFFI for a profit motive because he [allegedly] knew
then that all these defendants were in serious financial trouble. 20 This argument is
irrelevant and frivolous. First, if the Changs were so poor at that time, how were
they able to give WFFI a capital infusion of massive amounts of money to keep
WFFI afloat? 21 Second, Sharpe admits to switching sides on June 23, 2005.
WFFI did not close its doors until some four and a half years later in October of
2009 [and after the U.S. economic downturn in 2008]. See pages 4-5 and 32-39 of
Appellants Brief. Third, all doubts on conflicting evidence are to be resolved in
Appellants favor.
19

Id.
21
Sharpes Brief pgs. 3 & 12;
20
10
F.
No One Benefited 22
(1)
Sharpe argues that there is no evidence to support Appellants claim that
the other shareholders received dividends that he did not receive. 23 This is a
substantial, if not also patent mischaracterization of the factual record. First,
Appellant cannot be faulted for allegedly having relatively little evidence to
support this aspect of his claim because the Changs wrongfully destroyed and/or
concealed the very records by which Appellant could more fully prove it. See
pages 112-14 of Appellants Brief. Second, Appellant in fact did present more
than a scintilla of evidence to show he was excluded from at least the 2005
dividend payments. WFFI admitted this in its discovery responses and as a result
of a sanctions default. See pages 110-111 of Appellants Brief.
(2)
Sharpe argues that there is nothing in the record to show a contractual
agreement between Appellant and WFFI. 24 This is patently false. Appellant

testified that he had an agreement that WFFI would employ him so long as he
owned WFFI stock and that this promise was central to his decision to invest
$60,000 in WFFI. WFFI admitted to the existence of this agreement. [CR 1220,
1235, 15, 1503, 532, 1505] See also page 1 of Appellants Brief.
22

Id.
24
23
11
(3)
Sharpe argues that he did not benefit from representing the Changs and
WFFI because he always represented them [allegedly] on a pro-bono basis.25 More

than a scintilla of evidence shows that Sharpe benefited from his wrongful conduct
and/or that reasonable and fair minded jurors could, under these facts, differ in
their conclusions about whether Sharpe only represented the primary defendants on
a pro-bono basis in all instances. See pages 32-39, 52-53, and 63 of Appellants
Brief. Sharpes argument is irrelevant because all doubts on conflicting evidence
are to be resolved in Appellants favor.
G.
Attorneys Fee Damages 26
Sharpe argues that under Texas law attorneys fee cannot be recovered
absent a statute or contract that allows this recovery. This is an incomplete
statement of the law. It ignores the whole line of Texas cases that support
recovery of attorneys fees as damages in equity. See the Estate of Arlitt and
Baja cases cited in Appellants Brief at pages 51 and 96.
25
26
Id.
12
H.
Trial Court Properly Granted Summary Judgment on Claim for Civil
Conspiracy27
(1)
Sharpe argues that there is no direct evidence anywhere in the record of a
civil conspiracy. 28 This is substantially false. Please see Appellants summary

judgment response at [CR 1133-41]. See also Appellants Brief on pages 54-63.
(2)
Sharpe argues that Appellants conspiracy claim should fail because there
[allegedly] is no evidence to show that Sharpe ever met with the Changs to discuss
how Appellant could be prevented from receiving any money. 29 This argument is
frivolous.
How did Sharpe come to defend the Changs and WFFI against
Appellants claims on multiple occasions between 2004 and 2011 if he never met
with the Changs? See pages 34-35 of Appellants Brief.
(3)
Sharpe argues that the PDG Group case is controlling on the conspiracy
claim. 30
Again, Sharpe is attempting to misapply the facts of a materially
distinguishable case.
27
Id;
29
Sharpes Brief - pgs. 15-16;
30
28
13
I.
Claims Barred by Limitations 31
(1)
Sharpe argues that Appellant judicially admitted that his claims should have
been filed before 12/31/09. Sharpe bases this argument on the allegation that
Amin, at a 2012 summary judgment hearing, stated that Appellants got at least
four years from 2005 to avoid the statute of limitations. 32 This argument has
several problems. First, note that the summary judgment transcripts that Sharpe
cites as supporting proof in footnotes 56-57 of his brief are not part of the record
on appeal and thus they contain no record references.33
Second, Sharpe
previously presented this argument in his December 18, 2012 motions for
summary judgment and those were denied on May 31, 2013 by Judge Wilkinson.
[CR 1713, 1715] Third, this argument is frivolous because it contains the words
at least which means that Amins statement leaves open the possibility of a post
12/31/09 accrual date. Fourth, Sharpe has waived this argument as it was never
presented to Judge Evans in his April 2014 summary judgment motions which are
the subject of this appeal. [CR 956-983] See City of Houston v. Clear Creek Basin
Auth., 589 S.W.2d 671, 675 (Tex. 1979).
Note that the transcripts Sharpe
references for supporting proof are not attached to his April 2014 summary
judgment motions. [CR 956-983]
31

Id.
33
Id.
32
14
(2)
Sharpe argues that Appellant has alleged the continuing tort doctrine but
that he cites no authority to support the argument. 34 This is patently false.

Please see footnotes 395-403 in Appellants summary judgment response at [CR
1175-1178].
See also page 65 of Appellants Brief where he cites the First
General Realty and S.V. v. R.V cases.
Furthermore, even absent use of the
continuing tort doctrine, by definition and pursuant to the holding in Willis v.

Maverick, Appellants malfeasance claim against Sharpe accrued sometime after
January 22, 2006; when WFFI became insolvent. See pages 64-65 of Appellants
Brief.
(3)
Sharpe argues that none of the authorities cited by Appellant supports his
legal argument that fraudulent concealment and the discovery rule are theories
by which to defer the accrual date to avoid limitations.35 This is patently false.
The S.V. v. R.V. case cited by Appellant on page 65 of his brief states:
Accrual of a cause of action is deferred in two types of cases. In one type,
those involving allegations of fraud or fraudulent concealment, accrual is
deferred because a person cannot be permitted to avoid liability for his
actions by deceitfully concealing wrongdoing until limitations has run. The
other type, in which the discovery rule applies, comprises those cases in
which "the nature of the injury incurred is inherently undiscoverable and the
evidence of injury is objectively verifiable."
See S.V. v. R.V., 933 S.W.2d 1, 4-7 (Tex. 1996).
34
35

Id.
15
J.
Evidentiary Arguments 36
Sharpe argues that the discovery related orders that Appellant addressed
under Sections III, VI, VII, and VIII of his brief cannot be appealed because
Appellant made no showing that the exclusion of the evidence sought caused the
trial court to render an improper summary judgment. 37
This argument is
frivolous. First, this argument confuses discovery issues with evidentiary issues
pertaining to the admission or exclusion of evidence [that has already been
discovered]. As supported by the Allied Chemical and the Webb cases cited by
Appellant, an interlocutory order refusing to compel discovery is normally
reviewed on appeal after a final judgment because such orders merge into the final
judgment whether or not they are named therein. See page xxx of Appellants
Brief. Second, Sharpes argument ignores the possibility that a trial court could
grant final summary judgment based on liability issues alone; while an appeal from
such a judgment might also include erroneous discovery orders pertaining to, for
example, the issue of the amount of damages. The orders on appeal under
Sections VI, VII, and VIII of Appellants Brief fall under this category. See pages
77-85 of Appellants Brief. Third, with respect to the discovery order addressed
under Section III, it would be impracticable, if not impossible, for Appellant to
36
37

Sharpes Brief pgs. 18-19;
16
prove that the exclusion of certain evidence caused the rendition of an improper
judgment if he does not first know the nature and content of said evidence. This
can only be done properly after discovery and with evidence in hand. This is why
Appellant objected to Sharpes summary judgment affidavit. Without having the
benefit of discovery on the crucial element of fiduciary breach sought under
Section III, Appellant could not readily controvert certain of Sharpes summary
judgment proof. Please see page 67 [at (4) (b)] and pages 69-70 of Appellants
Brief.
K.
Texas Uniform Fraudulent Transfer Act Claim 38
(1)
Sharpe implicitly argues that Appellant had a duty to show how the trial
courts severance of his TUFTA claims prejudiced him. 39 This is misleading and
false. One can only conclude that Mr. Proctor knowingly included this argument
to confuse the court. The Allstate Texas Lloyds case cited by Appellant on page 71
of his brief clearly shows that when bifurcation is an option, the party moving for
severance has the burden to show how he would be prejudiced by a denial of his
motion. See also In re Ben E. Keith Co., 198 S.W.3d 844, 851 (Tex.App.-Fort
Worth 2006, orig. proceeding).
38
39

Id.
17
(2)
Sharpe argues that this court may not consider the TUFTA severance order
on appeal without first reversing the trial courts summary judgment because the
granting of summary judgment made Appellants TUFTA claims moot. 40 Sharpe
cites no authority to support this and Texas law shows the opposite to be true:
The Texas Supreme Court has spoken on this issue and determined that
when a severance is ordered, the resulting two, or more, causes of action
are equally separate and distinct and that each one of them, presuming the
judgment therein is final, may be separately appealed. Kansas University
Endowment Ass'n v. King, 162 Tex. 599, 350 S.W.2d 11, 19 (1961); Pierce v.
Reynolds, 160 Tex. 198, 329 S.W.2d 76, 78-79 (1959). Moreover, on appeal
from any of these severed causes, the order of severance is subject to being
set aside. Pierce, 329 S.W.2d at 78-79. The court on appeal has jurisdiction
over the order of severance even though the severed cause on appeal may
not be a complete cause of action without its consolidation with the
remaining cause still pending before the trial court. Schieffer v. Patterson,
433 S.W.2d 418, 419 (Tex.1968).
See State v. Tamminga, 928 S.W.2d 737, 739 (Tex. App. Waco 1996).
(3)
Sharpe argues that it is particularly obvious the TUFTA claims are a
standalone claim. 41
If that is true, then how can summary judgment on
Appellants common law tort claims render the TUFTA claims moot? 42 Sharpe
judicially admitted that the severed TUFTA claims cannot be independently
asserted in a separate lawsuit. See pages 73-74 of Appellants Brief.
40
Id.
42
41
18
(4)
Sharpe argues that Appellant has not established that the trial court abused
its discretion in abating the severed TUFTA cause.
This is a patent
mischaracterization of the record. Under Texas law, it is an abuse of discretion

for the trial court to grant abatement on an unverified motion and/or on one that
was not supported by any evidence.
Appellant established both of these
circumstances by citations to the record. [CR 845-48] [RR 1-9] See also page 76
of Appellants Brief.
L.
Disqualification of Chans Trial Counsel43
(1)
Without citing any record authority, Sharpe argues that Amin was
disqualified because of his continued insistence on being a witness at a jury trial

to testify on facts other than attorneys fees. 44
This is a patent
mischaracterization of the record. On the contrary, Amin stated that he does

not intend to testify at the trial of this cause and before the jury except possibly as
to one or more issues covered under the exceptions to disqualification under
TDRPC 3.08(a) [CR 1667]45 See also page 18 of Appellants Brief. In any
case, even if Amin had insisted on testifying at trial on other matters,
disqualification was still improper because Sharpes motion failed to show how
43
44

Id.
45
This page is part of Appellants Reply to Sharpes Response to Appellants Motion for
Reconsideration of the Disqualification Order.
19
Amins dual roles as witness and trial counsel would have caused him actual
prejudice. See pages 14-15 of Appellants Brief.
(2)
Sharpe argues that it is somehow improper for this court to consider the
order disqualifying Amin on appeal because this is an appeal from summary

judgment; as opposed to an appeal after trial to a jury. 46 Sharpe has cited no
authority for this argument and Texas law shows the opposite to be true. The
Rogers v. Walker case cited by Appellant on page 12 of his Brief is a case where
the court of appeals reversed the trial courts attorney disqualification order on an
appeal from summary judgment. Further, in the Webb case, the Texas Supreme
Court has stated that preceding interlocutory orders merge into a final judgment
whether or not they are named therein. See page xxx of Appellants Brief.
REPLY TO THE CHANGS BRIEF:
M.
General Reply to the Changs Brief:
The Changs accuse Appellant of attempting to skirt or sidestep a
number of issues in this case. 47 Given the admitted length, width, and depth of
Appellants brief and his underlying summary judgment responses, the Changs
accusation is neither honest nor rationale. The Changs lack standing to make such
46
47

See page 11 of the Changs Brief.
20
an accusation. Their brief wholly or substantially fails to address the arguments

presented under at least the following Sections of Appellants Brief:
A.
B.
C.
D.
E.
F.
IX-A (6) at page 86;

IX-C (3) at page 90;
IX-F at page 96;
IX-G at page 98;
IX-H at page 102;
IX-I at page 108;
G.
H.
IX-J (2) thru (6) at page 118; and

X thru XVI at pages 120-134.
N.
Reply to Section II of the Changs Brief:
(1)
The Changs argue that summary judgment was proper with respect to a
statutory claim under Tex. Bus. Orgs. Code 21.223(b) because Appellant failed to
produce evidence showing that they engaged in actual fraud for their direct
personal benefit.48 This argument is frivolous because Appellant never pled this
statutory claim as a basis to hold the Changs liable. [CR 12-23] In fact, Appellant
specifically objected to the trying of any unpled statutory claims and/or defenses in
his response to the Changs summary judgment motion. [2SUPP-CR 46, 47, 69]
Thus, it was error for the court to grant judgment on such an unpled claim. See
page 86 of Appellants Brief. Further, more than a scintilla of evidence shows that
the Changs acted for their personal benefit. See Section P(3) of this Reply.
(2)
The Changs argue that summary judgment was proper with respect to the
statutory defense provided under Tex. Bus. Orgs. Code 21.223(a) because the
48
See the Changs Brief at pg. 6;
21
debts that Appellant seeks to hold the Changs liable on are [allegedly] the
corporate contractual obligations of WFFI. 49 The problem with this argument is
that the Changs cannot properly make a no evidence summary judgment motion
with respect to an affirmative defense they have the burden to prove at trial.
Thomas v. Omar Investments, Inc., 156 S.W.3d 681, 685 (Tex.App.-Dallas 2005,
no pet.); Tex. R. Civ. P. 166a(i). See pages 88-89 of Appellants Brief. Here, the
Changs judicially admit that their statutory defense under 21.223(a) is an
affirmative defense. 50 Case law confirms that defendants seeking exculpation
from liability under a statutory shield normally bear the burden of proof as to each
of its elements. See In re ParkCentral Global Litigation, No. 3:09-CV-0765-M
(Lead Case) 2010 WL 3119403 at *22-24 (N.D. Tex. August 5, 2010) (mem. op.)
(3)
The Changs then argue that the Lone Star case they cite is an example of
where an appellate court properly affirmed a no-evidence motion pertaining to

Tex. Bus. Orgs. Code 21.223 51.
The Lone Star case cited by the Changs is
materially distinguishable on several grounds. First, the Powers appellee there

filed a hybrid no-evidence and traditional summary judgment motion on Lone
Stars veil piercing claims, including fraud and alter ego. Lone Star Air Sys.,
Ltd. V. Powers, 401 S.W.3d 855, 857 (Tex.App.-Houston [14th Dist.] 2013, no pet.)
49
See the Changs Brief at pgs. 6-8;

See page 2 of the Changs Brief;
51
See pages 9-10 of the Changs Brief;
50
22
Here, the Changs only filed a pure no-evidence motion. [2SUPP-CR 36]
Second, appellant Lone Star specifically pled that David Powers is personally
liable because he used the corporate fiction to commit fraud. Lone Star, 401
S.W.3d at 863. Lone Star further pled that David Powers Homes, Inc. and David
Powers were inextricably tied together under an alter ego theory. Id. Here,
Appellant has made no such vicarious liability allegations against the Changs. [CR
12-23] Third, even if we assume Appellant had pled the alter-ego doctrine, fraud,
or a sham to perpetrate a fraud as vicarious common law theories upon which to
hold the Changs liable, the Changs would still have the burden of proof at trial to
show that Appellant [as the alleged obligee under 21.223(a)] was seeking to hold
the Changs liable for WFFIs contractual obligations. See Thomas, 156 S.W.3d
at 685; Doyle v. Komtemporary Builders, Inc., 370 S.W.3d 448, 457-58 (Tex.App.Dallas 2012, pet. denied).
O.
Reply to Section III of the Changs Brief:
(1)
The Changs argue that summary judgment was proper on their affirmative
defense of limitations. 52 This argument fails because the Changs cannot move for
no-evidence summary judgment based on an affirmative defense that they have
the burden to prove at trial. Thomas v. Omar Investments, Inc., 156 S.W.3d 681,
52
See pages 2 and 11-12 of the Changs Brief;
23
685 (Tex.App.-Dallas 2005, no pet.); Tex. R. Civ. P. 166a(i).
The Changs
judicially admit that their limitations defense is an affirmative defense.53

Further, nowhere in their entire summary judgment motion do the Changs ever
mention the continuing tort doctrine. [2SUPP-CR 36-41]
(2)
The Changs argue that Appellant has the burden at trial to prove the
elements of the continuing tort doctrine and thus a no-evidence motion on the
same is proper. Even if we assume [for a moment] that is true, then, with respect
to this continuing tort claim/defense, the Changs first had a duty to state the
elements as to which there is no evidence. Tex. R. Civ. P. 166a(i).
Once a
proper motion is filed, only then does the burden shift to the non-moving party to
present evidence raising any issues of material fact. Thomas, 156 S.W.3d at 684.
Since the Changs wholly failed to even mention the subject doctrine, their noevidence motion is fundamentally defective and insufficient to support summary
judgment as a matter of law. Mott v. Red's Safe and Lock Services, Inc., 249
S.W.3d 90, 97-98 (Tex.App.-Houston [1 Dist.] 2007, no pet.). Courts decline to
extend a fair notice exception to this requirement. Id. See pages 88-90 of
Appellants Brief.
Notwithstanding any of the foregoing, Appellant actually
presented more than a scintilla of evidence to create at least an issue of fact on

each element of the doctrine. [2SUPP-CR 64-69] The Palombo and Butler cases
53
24
cited by the Changs in support of their limitations arguments are materially

distinguishable. Those cases involve traditional motions of summary judgment;
not a pure no-evidence motion like the one the Changs filed. See Butler v.
Lowes Home Ctrs., Inc., No. 14-10-00297-CV, 2011 WL 1709898, at *2
(Tex.App.-Houston [14th Dist.] 2011, pet. denied) and Palombo v. Sw. Airlines Co.,
No. 04-05-00825-CV, 2006 WL 1993783, at *3 (Tex.App.-San Antonio 2006, pet.
denied).
(3)
In any case, the Changs fail to recognize that, when moving for summary
judgment on limitations, they actually bear the burden to conclusively establish the
accrual date; even if that would be appellants burden at trial under the
continuing tort doctrine. The Palombo case states:
In a motion for summary judgment based upon the affirmative defense of
limitations, the burden is on the movant to establish as a matter of law that
the applicable statute of limitations bars the action. KPMG Peat Marwick.,
988 S.W.2d at 748. The movant must (1) conclusively prove when the cause
of action accrued, and (2) negate the discovery rule
There are two methods for determining the accrual date. Under the legal injury
rule, a cause of action accrues on the date the defendants wrongful act caused
some legal injury. Lubbock City v. Trammels Lubbock Bail Bonds, 80 S.W.3d
580, 585 (Tex. 2002). The continuing tort doctrine is an exception to the legal
injury rule. First Gen. Rlty. Corp. v. Maryland Cas. Co., 981 S.W.2d 495, 501
(Tex.App.-Austin 1998, pet. denied). Under this doctrine the action accrues when
25
the tortious conduct ceases. Id. Once the accrual date is determined, the next
issues is can the accrual date be deferred either by application of the discovery
rule or under the theory of fraudulent concealment. S.V. v. R.V., 933 S.W.2d 1,
4-7 (Tex. 1996).
The Changs have wholly failed to argue at the summary
judgment proceedings [and in their brief on appeal] why the evidence set forth by
Appellant at [2SUPP-CR 64-69] does not extend the accrual date beyond January
22, 2006. For example, why does Karen Changs tortious conduct of concealing
dividend income records at the 2009 TBCA audits not qualify to extend the accrual
date into the limitations period? Or, why does the Changs participation in the
unlawful hiring and use of Sharpe to defend them in this suit in the face of a known
conflict of interest not qualify as another tortious act extending the accrual date?
Since the Changs have failed refute these facts and arguments, they failed to meet
their summary judgment burden to conclusively establish that the accrual date
fell outside the limitations period. See pages 88-90 of Appellants Brief.
(4)
The Changs argue that the continuing tort doctrine does not apply to
Appellants situation since he [allegedly] suffered only one distinct injury. To

begin with the Changs did not present this argument to the trial court.
Accordingly the Changs have waived this issue. City of Houston, 589 S.W.2d
at 675 (Tex. 1979) ([I]ssues not expressly presented to the trial court may not be
26
considered on appeal.) 54 Notwithstanding the fact that the Changs waived this
argument, Appellants summary judgment evidence shows that he suffered
separate and distinct injuries. For example, he has alleged injuries in the form of:
(a) unpaid dividend income on a monthly basis [i.e. each dividend payment
typically varies based on profits and constitutes a separate injury]; (b) attorneys
fees as damage; (c) a total loss in the value of his WFFI shares, and (d) lost
wages. See pages 63 and 96-101of Appellants Brief.
(5)
The Changs assert that Chan can point to no dividend payment that the
other WFFI shareholders took that Chan did not receive.55 This is a substantial,
if not also a patent, mischaracterization of the record. Appellants summary
judgment evidence clearly shows that WFFI made dividend payments to other
shareholders in 2005; but none to Appellant. WFFI admitted as much in its
discovery responses and through a sanctions default. See page 111 of Appellants
Brief.
P.
Reply to Section IV of the Changs Brief:
(1)
The Changs implicitly argue that Appellant is precluded, as a matter of law,
from asserting any tort claims against them because the relief he seeks is for
54
55

27
breach of contract obligations.56 However, Texas law is clear that a plaintiff is not
precluded from pursuing a tort claim merely because the damages he seeks are
analogous to damages sought in a breach of contract claim. See page 105 of
Appellants Brief.
(2)
The Changs argue that due to Appellants lack of specificity, they are unable
to discern what admissions resulted in a claim of reversible error. 57 In other words,

the Changs argue that Appellant presented less than a scintilla of evidence by
which to create a fact issue on the elements challenged in the their no-evidence
motion. This argument is false. Pages 108 thru 117 of Appellants Brief identify
the admissions which rise to a level that would at least cause reasonable and fairminded jurors to differ in their conclusions on the issue of the Changs liability. 58
Appellant also set forth sufficient evidence of specific participatory conduct
engaged in by the Changs to establish that they aided and abetted another
defendant(s) fiduciary breach. [2SUPP-CR 55-63]
(3)
The Changs argue that admissions made by WFFI due to a post-answer
sanctions default could not constitute summary judgment proof against the
Changs.59 It is not quite so clear that this argument has merit. The Changs, as
56

See page 14 of the Changs Brief;
58
See Appellants Brief generally; but especially Section IX-I pages 108-117.
59
See page 14, n.2 of the Changs Brief;
57
28
controlling officers, were responsible for deciding when and who to retain as
counsel for WFFI. In fact, they are the ones that decided to hire Sharpe to defend
WFFI in this suit before Sharpe was ordered permanently withdrawn and WFFI
was ordered to retain new counsel. [2SUPP-CR 212-13, 366-67] Since the court
found that WFFI willfully opted not to even defend its self in this suit and since
the Changs made this decision not to hire replacement counsel for WFFI, can a
legitimate argument not be made that WFFIs deemed admissions also constitute
the admissions of the Changs [in their capacity as officers] at least on the issue of
whether the Changs received a personal benefit or acted for personal
purposes? The acts of a corporate agent on behalf of the principal are ordinarily
deemed to be the corporation's acts. Walker v. Anderson, 232 S.W.3d 899, 918
(Tex.App.-Dallas 2007). The individual officer who acts for a corporation is that
corporation's agent. Id. The acts of an agent and its principal are the acts of a single
entity and cannot constitute conspiracy; unless the agent is acting for personal
purposes. Lyons v. Lindsey Morden Claims Mgmt., 985 S.W.2d 86, 91 (Tex.App.El Paso 1998, no pet.); Holloway v. Skinner, 898 S.W.2d 793, 797 (Tex.1995).
Would the following admissions by WFFI not constitute more than a scintilla of
evidence that the Changs acted for personal purposes (i.e. evidence that WFFI in
fact made unlawful payments to the Changs for their personal benefit)60:
60
See also Appellants Brief at page 110.
29
(a) [T]he manipulation of finances of WFFI so that profits were not

distributed as dividends but were diverted to majority shareholders and/or
their close relatives through excessive salaries, bonuses, or other personal
benefits. [CR 13];
(b) [T]he wasting of corporate funds by paying for the legal fees of
individual defendants. (See September 15, 2006 Answer filed by Defendant
Sharpe on behalf of Mr. Chang in a suit where Mr. Chang was sued
individually by plaintiff). [CR 14];
(c) [T]he paying of informal dividends to only majority shareholders. [CR
14];
When corporate controllers misappropriate corporate funds for their own use,
refuse to pay dividends, or pay majority shareholders outside the dividend process,
they do so in violation of their fiduciary duty to the corporation and the law affords
a remedy for this misconduct. See Ritchie v. Rupe, 443 S.W.3d 856, 885, n. 53
(Tex. 2014)
(4)
The Changs argue that whether they owed a fiduciary duty to Appellant is
completely irrelevant to the trial courts granting of summary judgment. 61 This

argument is frivolous. The duty issue could not have been irrelevant since: (a)
Appellant pled that the Changs owed him a fiduciary duty in their capacity as the
controlling shareholders and officers of WFFI [CR 16-17] and (b) the trial court
granted final judgment in favor of the Changs on all claims made by Appellant.
[CR 1699]
61
30
(5)
The Changs erroneously argue that it was necessary for Appellant to pierce
the corporate veil in order to impose personal liability upon them. Under Texas
law, if it can be shown that a corporate officer/shareholder knowingly participated
in a wrongdoing, then 21.223 of the Tex. Bus. Orgs. Code will not insulate or
shield corporate agents from individual liability for their own tortious conduct.
Walker, 232 S.W.3d at 918-19. The Changs also argue that Appellant waived any
of his arguments pertaining to 21.223 because he failed to present them to the trial
court.62 This is a substantial, if not also a patent misrepresentation of the
record. First, at [2SUPP-CR 46] Appellant specifically objected to the Changs
filing of a no-evidence summary judgment motion on any statutory or common
law defense where they would have the burden of proof. See also Appellants
Brief at page 89.
As discussed earlier in this Reply, Tex. Bus. Orgs. Code
21.223(a) is one such statutory affirmative defense.
Second, at [2SUPP-CR
47, 69] Appellant specifically objected to the trying of any unpleaded statutory
vicarious liability claims by and through summary judgment. See also Appellants
Brief at page 86.
Third, under Section H, at [2SUPP-CR 398] Appellant
specifically presented his arguments regarding 21.223-21.224 to the trial court in

his August 22, 2014 motion for new trial. See also Appellants Brief at page 95.
When, after summary judgment is rendered, a non-movant discovers a mistake that
62
31
should have been included in a summary judgment response, he can raise that issue
in a motion for new trial. See Wheeler v. Green, 157 S.W.3d 439, 442 (Tex.
2005).
/s/ Mayur Amin
Mayur Amin
The Amin Law Firm
Ph. 817-253-6711
Fax 1-888-580-6175
ATTORNEY FOR APPELLANT
I hereby certify that on March 11, 2015 a true and correct copy of the foregoing
Appellants Reply Brief and attached appendix were served via electronic service
and/or email to the following parties in accordance with Rule 9.5 of the Texas
Rules of Appellate Procedure:
John W. Proctor
Attorney for Appellees J. Shelby Sharpe and The Law Offices of J. Shelby Sharpe,
Attorney for Appellees Henry and Karen Chang
/s/ Mayur Amin
Mayur Amin
32

Pursuant to Rule 9.4(i)(2)(C), I certify that this document contains 7,492
/s/ Mayur Amin
Mayur Amin
33
Case No. 02-14-00286-CV

Fort Worth, Texas
____________________________________
FRANCIS W.S. CHAN,
Appellant
V.
Appellees
_____________________________________________
APPENDIX TO APPELLANTS REPLY BRIEF
______________________________________________
Tab
Any Additional Rules, Regulations, and Statutes Relied On:
Tex. Code of Judicial Conduct Canon 3D(2)
C.
D.
E.
Tex. Standards for Appellate Conduct

Rule 3 (Lawyers Duties to the Court)
TEXAS CODE
OF JUDICIAL CONDUCT
(As amended by the Supreme Court of Texas through August 22, 2002)
Preamble
Our legal system is based on the principle that an independent, fair and competent
judiciary will interpret and apply the laws that govern us. The role of the judiciary is central to
American concepts of justice and the rule of law. Intrinsic to all sections of this Code of
Judicial Conduct are the precepts that judges, individually and collectively, must respect and
honor the judicial office as a public trust and strive to enhance and maintain confidence in our
legal system. The judge is an arbiter of facts and law for the resolution of disputes and a
highly visible symbol of government under the rule oflaw.
The Code of Judicial Conduct is not intended as an exhaustive guide for the conduct of
judges. They should also be governed in their judicial and personal conduct by general ethical
standards. The Code is intended, however, to state basic standards which should govern the
conduct of all judges and to provide guidance to assist judges in establishing and maintaining
high standards ofjudicial and personal conduct.
Canon 1: Upholding the Integrity and Independence ofthe Judiciary

An independent and honorable judiciary is indispensable to justice in our society. A
judge should participate in establishing, maintaining and enforcing high standards of conduct,
and should personally observe those standards so that the integrity and independence of the
judiciary is preserved. The provisions of this Code are to be construed and applied to further
that objective.
Canon 2: Avoiding Impropriety and the Appearance of Impropriety in All of the

Judge's Activities
A. A judge shall comply with the law and should act at all times in a manner that
promotes public confidence in the integrity and impartiality of the judiciary.
B.
A judge shall not allow any relationship to influence judicial conduct or judgment. A
judge shall not lend the prestige of judicial office to advance the private interests of the judge
or others; nor shall a judge convey or permit others to convey the impression that they are in a
special position to influence the judge. A judge shall not testify voluntarily as a character
witness.
C. A judge shall not knowingly hold membership in any organization that practices
discrimination prohibited by law.
Canon 3: Performing the Duties of Judicial Office Impartially and Diligently
A. Judicial Duties in General. The judicial duties of a judge take precedence over all the
judge's other activities. Judicial duties include all the duties of the judge's office prescribed by
law. In the performance of these duties, the following standards apply:
B.
Adjudicative Responsibilities.
(1) A judge shall hear and decide matters assigned to the judge except those in which
disqualification is required or recusal is appropriate.
(2) A judge should be faithful to the law and shall maintain professional competence in it.
A judge shall not be swayed by partisan interests, public clamor, or fear of criticism.
(3)
A judge shall require order and decorum in proceedings before the judge.
(4) A judge shall be patient, dignified and courteous to litigants, jurors, witnesses, lawyers
and others with whom the judge deals in an official capacity, and should require similar
conduct of lawyers, and of staff, court officials and others subject to the judge's direction and
control.
(5)
A judge shall perform judicial duties without bias or prejudice.
(6) A judge shall not, in the performance of judicial duties, by words or conduct manifest
bias or prejudice, including but not limited to bias or prejudice based upon race, sex, religion,
national origin, disability, age, sexual orientation or socioeconomic status, and shall not
knowingly permit staff, court officials and others subject to the judge's direction and control to
do so.
(7) A judge shall require lawyers in proceedings before the court to refrain from
manifesting, by words or conduct, bias or prejudice based on race, sex, religion, national
origin, disability, age, sexual orientation or socioeconomic status against parties, witnesses,
counsel or others. This requirement does not preclude legitimate advocacy when any of these
factors is an issue in the proceeding.
(8) A judge shall accord to every person who has a legal interest in a proceeding, or that
person's lawyer, the right to be heard according to law. A judge shall not initiate, permit, or
consider ex parte communications or other communications made to the judge outside the
presence of the parties between the judge and a party, an attorney, a guardian or attorney ad
litem, an alternative dispute resolution neutral, or any other court appointee concerning the
merits of a pending or impending judicial proceeding. A judge shall require compliance with
this subsection by court personnel subject to the judge's direction and control. This subsection
does not prohibit:
(a) communications concerning uncontested administrative or uncontested procedural
matters;
(b) conferring separately with the parties and/or their lawyers in an effort to mediate or
settle matters, provided, however, that the judge shall first give notice to all parties
and not thereafter hear any contested matters between the parties except with the
consent of all parties;
D.
Disciplinary Responsibilities.
(1) A judge who receives infonnation clearly establishing that another judge has committed
a violation of this Code should take appropriate action. A judge having knowledge that
another judge has committed a violation of this Code that raises a substantial question as to the
other judge's fitness for office shall infonn the State Commission on Judicial Conduct or take
other appropriate action.
(2) A judge who receives infonnation clearly establishing that a lawyer has committed a
violation of the Texas Disciplinary Rules of Professional Conduct should take appropriate
action. A judge having knowledge that a lawyer has committed a violation of the Texas
Disciplinary Rules of Professional Conduct that raises a substantial question as to the lawyer's
honesty, trustworthiness or fitness as a lawyer in other respects shall infonn the Office of the
General Counsel of the State Bar of Texas or take other appropriate action.
Canon 4: Conducting the Judge's Extra-Judicial Activities to Minimize the Risk of
Conflict with Judicial Obligations
A. Extra-Judicial Activities in General. A judge shall conduct all of the judge's extrajudicial activities so that they do not:
(1)
cast reasonable doubt on the judge's capacity to act impartially as a judge; or
(2)
interfere with the proper perfonnance ofjudicial duties.
B.
Activities to Improve the Law. A judge may:
(1) speak, write, lecture, teach and participate in extra-judicial activities concerning the law,
the legal system, the administration of justice and non-legal subjects, subject to the
requirements ofthis Code; and,
(2) serve as a member, officer, or director of an organization or governmental agency
devoted to the improvement of the law, the legal system, or the administration of justice. A
judge may assist such an organization in raising funds and may participate in their
management and investment, but should not personally participate in public fund raising
activities. He or she may make recommendations to public and private fund-granting agencies
on projects and programs concerning the law, the legal system and the administration of
justice.
C. Civic or Charitable Activities. A judge may participate in civic and charitable
activities that do not reflect adversely upon the judge's impartiality or interfere with the
perfonnance of judicial duties. A judge may serve as an officer, director, trustee or non-legal
advisor of an educational, religious, charitable, fraternal, or civic organization not conducted
for the profit of its members, subject to the following limitations:
(1) A judge should not serve if it is likely that the organization will be engaged in
proceedings that would ordinarily come before the judge or will be regularly or frequently
engaged in adversary proceedings in any court.
(2) A judge shall not solicit funds for any educational, religious, charitable, fraternal or civic
organization, but may be listed as an officer, director, delegate; or trustee of such an
organization, and may be a speaker or a guest of honor at an organization's fund raising
events.
TEXAS DISCIPLINARY RULES OF PROFESSIONAL

CONDUCT
Table of Contents
Page
Preamble: A Lawyer's Responsibilities

Preamble: Scope
Terminology
4
6
I. CLIENT-LAWYER RELATIONSIDP
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
Competent and Diligent Representation

Scope and Objectives of Representation
Communication
Fees
Confidentiality of Information
Conflict of Interest: General Rule
Conflict of Interest: Intermediary
Conflict of Interest: Prohibited Transactions
Conflict of Interest: Former Client
Successive Government and Private Employment
Adjudicatory Official or Law Clerk
Organization as a Client
Conflicts: Public Interest Activities
Safekeeping Property
Declining or Terminating Representation
7
9
12
13
19
25
30
32
35
38
40
41
45
46
47
IT. COUNSELOR
2.01
2.02
50
51
Advisor
Evaluation for use by Third Persons
ill. ADVOCATE
3.01
3.02
3.03
3.04
3.05
3.06
3.07
3.08
3.09
Meritorious Claims and Contentions

Minimizing the Burdens and Delays of Litigation
Candor Toward the Tribunal
Fairness in Adjudicatory Proceedings
Maint:.:tining Impartiality of Tribunal
Maintaining Integrity ofJury System
Trial Publicity
Lawyer as Witness
Special Responsibilities of a Prosecutor
52
53
55
58
61
62
63
66
68
Unreasonable Delay
3. Dilatory practices indulged in merely for the convenience oflawyers bring the administration
of justice into disrepute and nonnally will be unreasonable within the meaning of this Rule. See
also Rule l.Ol(b) and (c) and paragraphs 6 and 7 of the Comment thereto. This Rule, however,
does not require a lawyer to eliminate all conflicts between the demands placed on the lawyer's
time by different clients and proceedings. Consequently, it is not professional misconduct either
to seek (or as a matter of professional courtesy, to grant) reasonable delays in some matters in
order to permit the competent discharge of a lawyer's multiple obligations.
4. Frequently, a la\\yer seeks a delay in some aspect of a proceeding in order to serve the
legitimate interests of the client rather than merely the lawyer's own interests. Seeking such
delays is justifiable. For example, in order to represent the legitimate interests of the client
effectively, a diligent lawyer representing a party named as a defendant in a complex civil or
criminal action may need more time to prepare a proper response than allowed by applicable
rules of practice or procedure. Similar considerations may pertain in preparing responses to
extensive discovery requests. Seeking reasonable delays in such circumstances is both the right
and the duty of a lawyer.
5. On the other hand, a client may seek to have a lawyer delay a proceeding primarily for the
purpose of harassing or maliciously injuring another. Under this Rule, a lawyer is obliged not to
take such an action. See also Rule 3. 01. It is not a justification that similar conduct is often
tolerated by the bench and the bar. The question is whether a competent lawyer acting in good
faith would regard the course of action as having some substantial purpose other than delay
undertaken for the purpose of harassing or malicious injuring. The fact that a client realizes a
financial or other benefit from such otherwise unreasonable delay does not make that delay
reasonable.
Unreasonable Costs and Other Burdens of Litigation
6. Like delay, increases in the costs or other burdens of litigation may be viewed as serving a
\tide range of interests of the client. Many of these interests are entirely legitimate and merit the
most stringent protection. Litigation by its very nature often is costly and burdensome. This
Rule does not suqject a lawyer to discipline for taking any actions not otherwise prohibited by
these Rules in order to fully and effectively protect the legitimate interests of a client that are at
stake in litigation.
7. Not all conduct that increases the costs or other burdens of litigation, however, can be
justified in this manner. One example of such impermissible conduct is a lawyer who counsels
or assists a client in seeking a multiplication of the costs or other burdens of litigation as the
primary purpose, because the client perceives himself as more readily able to bear those
burdens than is the opponent, and so hopes to gain an advantage in resolving the matter
unrelated to the merits of the clients position.
Rule 3.03 Candor Toward the Tribunal

(a) A lawyer shall not knowingly:
54
(1) make a false statement of material fact or law to a tribunal;
(2) fail to disclose a fact to a tribunal when disclosure is necessary to avoid assisting a
criminal or fraudulent act;
(3) in an ex parte proceeding, fail to disclose to the tribunal an unprivileged fact which
the lawyer reasonably believes should be known by that entity for it to make an
informed decision;
(4) fail to disclose to the tribunal authority in the controlling jurisdiction known to the
lawyer to be directly adverse to the position of the client and not disclosed by opposing
counsel; or
(5) offer or use evidence that the lawyer knows to be false.
(b) If a laVIyer has offered material evidence and comes to know of its falsity, the lawyer shall
make a good faith effort to persuade the client to authorize the laVIyer to correct or Vl~thdraw the
false evidence. If such efforts are unsuccessful, the laVIyer shall take reasonable remedial
measures, including disclosure of the true facts.
(c) The duties stated in paragraphs (a) and (b) continue until remedial legal measures are no
longer reasonably possible.
Comment:
1. The advocate's task is to present the client's case mth persuasive force. Performance of that
duty while maintaining confidences of the client is qualified by the advocate's duty of candor to
the tribunal.
Factual Representations by Lawyer

2. An advocate is responsible for pleadings and other documents prepared for litigation, but is
usually not required to have personal knowledge of matters asserted therein, for litigation
documents ordinarily present assertions by the client, or by someone on the client's behalf, and
not assertions by the lawyer. Compare Rule 3.0 1. However, an assertion purporting to be on the
lawyer's own knowledge, as in an affidavit by the lawyer or a representation of fact in open
court, may properly be made only when the lawyer knows the assertion is true or believes it to
be hue on the basis of a reasonably diligent inquiry. There are circumstances where failure to
make a disclosure is the equivalent of an affirmative misrepresentation. The obligation
prescribed in Rule 1.02(c) not to counsel a client to commit or assist the client in committing a
fraud applies in litigation. See the Comments to Rules 1.02(c) and 8.04(a).
Misleading Legal Argument

3. Legal argument based on a knomngly false representation of law constitutes dishonesty
toward the tribunal. A lavvyer is not required to make a disinterested exposition of the law, but
should recognize the existence of pertinent legal authorities. Furthermore, as stated in
55
paragraph (a) (4), an advocate has a duty to disclose directly adverse authority in the controlling
jurisdiction v.rhich has not been disclosed by the opposing party. The underlying concept is that
legal argument is a discussion seeking to determine the legal premises properly applicable to the
case.
Ex Parte Proceedings
4. Ordinarily, an advocate has the limited responsibility of presenting one side of the matters
that a tribunal should consider in reaching a decision; the conflicting position is expected to be
presented by the opposing party. However, in an ex parte proceeding, such as an application for
a temporary restraining order, there is no balance of presentation by opposing advocates. The
object of an ex parte proceeding is nevertheless to yield a substantially just result. The judge has
an affirmative responsibility to accord the absent party just consideration. The laV~-yer for the
represented party has the correlative duty to make disclosures of unprivileged material facts
known to the la\J\.Yer if the la""Yer reasonably believes the tribunal will not reach a just decision
unless informed of those facts.
Anticipated False Evidence
5. On occasion a laVIyer may be asked to place into evidence testimony or other material that
the laV~-Yer knows to be false. Initially in such situations, a laVIyer should urge the client or other
person involved to not offer false or fabricated evidence. However, whether such evidence is
provided by the client or by another person, the la""Yer must refuse to offer it, regardless of the
client's wishes. As to a laV~-Yer's right to refuse to offer testimony or other evidence that the
la,vyer believes is false, see paragraph 15 of this Comment.
6. If the request to place false testimony or other material into evidence came from the lawyer's
client, the la""Yer also would be justified in seeking to withdraw from the case. See Rules 1.15(a)(l)
and (b)(2), (4). If Vl~thdrawal is allowed by the tribunal, the la,vyer may be authorized under
Rule 1.05(c)(7) to reveal the reasons for that Vli.thdrawal to any other la\vyer subsequently
retained by the client in the matter; but normally that Rule would not allow the la\J\.Yer to reveal
that information to another person or to the tribunal. If the la""Yer either chooses not to
withchaw or is not allowed to do so by the tribunal, the lawyer should again urge the client not to
offer false testimony or other evidence and adv.ise the client of the steps the la""Yer Vl~l take if
such false evidence is offered. Even though the la\J\.Yer does not receive satisfactory assurances
that the client or other witness Vl~ll testifY truthfully as to a particular matter, the laV~-Yer may use
that person as a witness as to other matters that the la\J\.Yer believes will not result in perjured
testimony.
Past False Evidence

7. It is possible, however, that a la\J\.Yer will place testimony or other material into evidence and
only later learn of its falsity. When such testimony or other evidence is offered by the client,
problems arise between the la,~yer's duty to keep the client's revelations confidential and the
la,vyer's duty of candor to the tribunal. Under this Rule, upon ascertaining that material
testimony or other evidence is false, the lawyer must first seek to persuade the client to correct
the false testimony or to vv:ithdraw the false evidence. If the persuasion is ineffective, the la""Yer
must take additional remedial measures.
56
3. To maintain the fair and independent administration of justice, lawyers are encouraged to
continue traditional efforts to defend judges and courts unjustly criticized.
Rule 8.03 Reporting Professional Misconduct

(a) Except as permitted in paragraphs (c) or (d), a lawyer having knowledge that another lawyer
has committed a violation of applicable rules of professional conduct that raises a substantial
question as to that lawyers honesty, trustworthiness or fitness as a laVIyer in other respects, shall
inform the appropriate disciplinary authority.
(b) Except as permitted in paragraphs (c) or (d), a lawyer having knowledge that a judge has
committed a violation of applicable rules of judicial conduct that raises a substantial question as
to the judges fitness for office shall inform the appropriate authority.
(c) A lawyer having knowledge or suspecting that another lawyer or judge whose conduct the
lawyer is required to report pursuant to paragraphs (a) or (b) of this Rule is impaired by
chemical dependency on alcohol or drugs or by mental illness may report that person to an
approved peer assistance program rather than to an appropriate disciplinary authority. If a
lawyer elects that option, the lawyers report to the approved peer assistance program shall
disclose any disciplinary violations that the reporting lawyer would otherwise have to disclose to
the authorities referred to in paragraphs (a) and (b).
(d) This rule does not require disclosure of knowledge or information otherwise protected as
confidential infom1ation:
(1) by Rule 1.05 or
(2) by any statutory or regulatory provisions applicable to the counseling activities of the
approved peer assistance program.
Comment:
1. Self-regulation of the legal profession requires that members of the profession take efl'ective
measures to protect the public when they have knowledge not protected as a confidence that a
violation of these rules has occurred. Lawyers have a similar obligation with respect to judicial
misconduct.
2. There are two ways that a lawyer may discharge this obligation. The first is to initiate a
disciplinary investigation. See paragraphs (a) and (b). The second, applicable only where the
reporting lawyer knows or suspect~ that the other lawyer or judge is impaired by chemical
dependency on alcohol or drugs or by mental illness, is to initiate an inquiry by an approved
peer assistance program. (See V.T.C.A., Health & Safety Code, ch. 467.) Under this Rule, a
lawyer having reason to believe that another lawyer or judge qualifies for the approved peer
assistance progran1 reporting alternative may report that person to such a program, to an
appropriate disciplinary authority, or to both. Frequently, the existence of a violation cannot be
109
established with certainty until a disciplinary investigation or peer assistance progran1 inquiry has
been undertaken. Similarly, an apparently isolated violation may indicate a pattern of
misconduct that only such an investigation or inquiry can uncover. Consequently, a lawyer
should not fail to report an apparent disciplinary violation merely because he or she cannot
determine its existence or scope with absolute certainty. Reporting a violation is especially
important where the victim is unlikely to discover the offense absent such a report.
3. It should be noted that this Rule describes only those disciplinary violations that must be
revealed by the disclosing lawyer in order for that lawyer to avoid violating these rules. It is not
intended to, nor does it, limit those actual or suspected violations that a lawyer may report to an
appropriate disciplinary authority. Similarly, a lawyer knowing or suspecting that another lawyer
or judge is impaired by chemical dependency on alcohol or drugs or by mental illness may
inform an approved peer assistance program of that concern even if unaware of any disciplinary
violation committed by the supposedly impaired person.
4. If a laV~-yer were obliged to report every violation of these rules, the failure to report any
violation would itself be a professional offense. Such a requirement existed in many jurisdictions
but proved to be unenforceable. This Rule limits the reporting obligation to those offenses that
a self-regulating profession must vigorously endeavor to prevent. Similar considerations apply to
the reporting of judicial misconduct. A measure of judgment is, therefore, required in
complying with the provisions of this Rule. The term substantial refers to the seriousness of the
possible offense and not the quantum of evidence of which the laV~-yer is aware. The term fitness
has the meanings ascribed to it in the Terminology provisions of these Rules.
5. A report to a disciplinary authority of professional misconduct by a lawyer should be made

and processed in accordance with the Texas Rules of Disciplinary Procedure. Comparable
reports to approved peer assistance programs should follow the procedures those programs
have established. A laV~-yer need not report misconduct where the report would involve a
violation of Rule 1.05 or involve disclosure of information protected as confidential by the
statutes or regulations governing any approved peer assistance program. However, a lawyer
should consider encouraging a client to consent to disclosure where prosecution of the violation
would not substantially prejudice the client's interests. Likevvise, the duty to report professional
misconduct does not apply to a lawyer retained to represent a lawyer whose past professional
conduct is in question. Such a situation is governed by the rules applicable to the client-laVIyer
relationship.
Rule 8.04 Misconduct

(a) A lawyer shall not:
(1) violate these rules, knowingly assist or induce another to do so, or do so through the
acts of another, whether or not such violation occurred in the course of a client-laVIyer
relationship;
(2) commit a serious crime or commit any other criminal act that reflects adversely on
the lawyers honesty, trustworthiness or fitness as a lawyer in other respects;
(3) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
110
may inform an approved peer assistance program of that concern even if unaware of any
disciplinary violation committed by the supposedly impaired person.
4. If a lawyer were obliged to report every violation of these rules, the failure to report any
violation would itself be a professional offense. Such a requirement existed in many
jurisdictions but proved to be unenforceable. This Rule limits the reporting obligation to those
offenses that a self-regulating profession must vigorously endeavor to prevent. Similar
considerations apply to the reporting of judicial misconduct. A measure of judgment is,
therefore, required in complying with the provisions of this Rule. The term substantial refers to
the seriousness of the possible offense and not the quantum of evidence of which the lawyer is
aware. The term fitness has the meanings ascribed to it in the Terminology provisions of these
Rules.
5. A report to a disciplinary authority of professional misconduct by a lawyer should be made
and processed in accordance with the Texas Rules of Disciplinary Procedure. Comparable
reports to approved peer assistance programs should follow the procedures those programs have
established. A lawyer need not report misconduct where the report would involve a violation of
Rule 1.05 or involve disclosure of information protected as confidential by the statutes or
regulations governing any approved peer assistance program. However, a la\\-yer should consider
encouraging a client to consent to disclosure where prosecution of the violation would not
substantially prejudice the client's interests. Likewise, the duty to report professional
misconduct does not apply to a lawyer retained to represent a lawyer whose past professional
conduct is in question. Such a situation is governed by the rules applicable to the client-lawyer
relationship.
Rule 8.04 Misconduct
(a) A la\\-yer shall not:
(1) violate these rules, knowingly assist or induce another to do so, or do so through the
acts of another, whether or not such violation occurred in the course of a client-lawyer
relationship;
(2) commit a serious crime or commit any od1er criminal act that reflects adversely on
the lawyers honesty, trustworthiness or fitness as a lawyer in other respects;
(3) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(4) engage in conduct constituting obstruction of justice;

(5) state or imply an ability to influence improperly a government agency or official;
(6) knowingly assist a judge or judicial officer in conduct that is a violation of applicable
rules of judicial conduct or other law;
119
(7) violate any disciplinary or disability order or judgment;

(8) fail to timely furnish to the Chief Disciplinary Counsels office or a district grievance
committee a response or other information as required by the Texas Rules of
Disciplinary Procedure, unless he or she in good faith timely asserts a privilege or other
legal ground for failure to do so;
(9) engage in conduct that constitutes barratry as defined by the law of this state;
(10) fail to comply with section 13.01 of the Texas Rules of Disciplinary Procedure
, relating to notification of an attorneys cessation of practice;
(11) engage in the practice of law when the lawyer is on inactive status or when the
lawyers right to practice has been suspended or terminated, including but not limited to
situations where a lawyers right to practice has been administratively suspended for
failure to timely pay required fees or assessments or for failure to comply with Article
XII of the State Bar Rules relating to Mandatory Continuing Legal Education; or
(12) violate any other laws of this state relating to the professional conduct oflawyers
and to the practice oflaw.
(b) As used in subsection (a)(2) of this Rule, serious crime means barratry; any felony involving
moral turpitude; any misdemeanor involving theft, embezzlement, or fraudulent or reckless
misappropriation of money or other property; or any attempt, conspiracy, or solicitation of
another to commit any of the foregoing crimes.
Comment:
1. There are four principal sources of professional obligations for lawyers in Texas: these Rules,
the State Bar Act, the State Bar Rules, and the Texas Rules of Disciplinary Procedure (TRDP).
Rule 1.06(0) of the TRDP contains a partial listing of the grounds for discipline under those
Rules.
2. Rule 8.04 provides a comprehensive restatement of all forms of conduct that will subject a
lawyer to discipline under either these Rules, the State Bar Act, the TRDP, or the State Bar
Rules. In that regard, Rule 8.04(a)(1) is intended to correspond to TRDP Rule 1.06(0)(1);
Rules 8.04(a)(2) and 8.04(b) are intended to correspond to the provisions of TRDP Rules
1.06(0)(8) and (9) and Rules 1.06(0) and (U), as well as certain other crimes; and Rules
8.04(a)(7)-(11) are intended to correspond to TRDP 1.06(0)(3)-(7), respectively. Rule
8.04(a)(12) of these Rules corresponds to a prohibition that was contained in the last
(unnumbered) paragraph of former Article X, section 7, State Bar Rules.
120
3. The only provisions ofTRDP Rule 1.06(0) not specifically referred to in Rule 8.04 is Rule
1.06(0)(2)s provision for imposing discipline on an attorney in Texas for conduct resulting in
that lawyers discipline in another jurisdiction, which is provided for by Rule 8.05 of these
Rules.
4. Many kinds of illegal conduct reflect adversely on fitness to practice law. However, some
kinds of offenses carry no such implication. Traditionally in this state, the distinction has been
drawn in terms of serious crimes and other offenses. See former Article X, sections 7(8) and 26
of the State Bar Rules (now repealed). The more recently adopted TRDP distinguishes between
intentional crimes, serious crimes, and other offenses. See TRDP Rules 1.06(0) and (U),
respectively. These Rules make only those criminal offenses either amounting to serious crimes
or having the salient characteristics of such crimes the subject of discipline. See Rules
8.04(a)(2), 8.04(b).
5. Although a lawyer is personally answerable to the entire criminal law, a lawyer should be
professionally answerable only for offenses that indicate lack of those characteristics relevant to
his fitness for the practice of law, as fitness is defined in these Rules. A pattern of repeated
offenses, even ones of minor significance when considered separately, can indicate indifference
to legal obligations that legitimately could call a lawyer's overall fitness to practice into question.
6. A lawyer may refuse to comply with an obligation imposed by law upon a good faith belief,
openly asserted, that no valid obligation exists. The provisions of Rule 1.02(d) concerning a
good faith challenge to the validity, scope, meaning or application of the law apply to challenges
to legal regulation of the practice of law.
7. Lavvyers holding public office assume legal responsibilities going beyond those of other
citizens. A lawyers abuse of public office can suggest an inability to fulfill the professional role
of attorney. The same is true of abuse of positions of private trust. See Rules 8.04(a)(2),
8.04(a)(3), 8.04(b).
Rule 8.05 Jurisdiction

(a) A la\\yer is subject to the disciplinary authority of this state, if admitted to practice in this
state or if specially admitted by a court of this state for a particular proceeding. In addition to
being answerable for his or her conduct occurring in this state, any such lawyer also may be
disciplined in this state for conduct occurring in another jurisdiction or resulting in lawyer
discipline in another jurisdiction, if it is professional miscopduct under Rule 8.04.
(b) A lawyer admitted to practice in this state is also subject to the disciplinary autl1ority of this
state for:
( 1) an advertisement in the public media that does not comply with these rules and that
is broadcast or disseminated in another jurisdiction, even if the advertisement complies
121
Standards for.Appellate Conduct

The Supreme Court of Texas
Contact Rules Attorney Marisa Secco (512) 463-1353

Lawyers are an indispensable part of the pursuit of justice. They are officers of courts charged with
safeguarding, interpreting, and applying the law through which justice is achieved. Appellate courts rely on
counsel to present opposing views of how the law should be applied to facts established in other proceedings.
The appellate lawyer's role is to present the law controlling the disposition of a case in a manner that clearly
reveals the legal issues raised by the record while persuading the court that an interpretation or application
favored by the lawyer's clients is in the best interest of the administration of equal justice under law.
The duties lawyers owe to the justice system, other officers of the court, and lawyers' clients are generally
well-defined and understood by the appellate bar. Problems that arise when duties conflict can be resolved
through understanding the nature and extent of a lawyer's respective duties, avoiding the tendency to
emphasize a particular duty at the expense of others, and detached common sense. To that end, the following
standards of conduct for appellate lawyers are set forth by reference to the duties owed by every appellate
practitioner.
Use of these standards for appellate conduct as a basis for motions for sanctions, civil liability or litigation
would be contrary to their intended purpose and shall not be permitted. Nothing in these standards alters
existing standards of conduct under the Texas Disciplinary Rules of Professional Conduct, the Texas Rules of
Disciplinary Procedure or the Code of Judicial Conduct.
Lawyers' Duties to Clients

A lawyer owes to a client allegiance, learning, skill, and industry. A lawyer shall employ all appropriate means
to protect and advance the client's legitimate rights, claims, and objectives. A lawyer shall not be deterred by a
real or imagined fear of judicial disfavor or public unpopularity, nor be influenced by mere self-interest. The
lawyer's duty to a client does not militate against the concurrent obligation to treat with consideration all
persons involved in the legal process and to avoid the infliction of harm on the appellate process, the courts,
and the law itself.
1.
Counsel will advise their clients of the contents of these Standards of Conduct when undertaking
representation.
2.
Counsel will explain the fee agreement and cost expectation to their clients. Counsel will then endeavor to
achieve the client's lawful appellate objectives as quickly, efficiently, and economically as possible.
3.
Counsel will maintain sympathetic detachment, recognizing that lawyers should not become so closely
associated with clients that the lawyer's objective judgment is impaired.
4.
Counsel will be faithful to their clients' lawful objectives, while mindful of their concurrent duties to the legal
system and the public good.
5.
Counsel will explain the appellate process to their clients. Counsel will advise clients of the range of potential
outcomes, likely costs, timetables, effect of the judgment pending appeal, and the availability of alternative
dispute resolution.
6.
Counsel will not foster clients' unrealistic expectations.
7.
Negative opinions of the court or opposing counsel shall not be expressed unless relevant to a client's
decision process.
8.
Counsel will keep clients informed and involved in decisions and will promptly respond to inquiries.
9.
Counsel will advise their clients of proper behavior, including that civility and courtesy are expected.
10. Counsel will advise their clients that counsel reserves the right to grant accommodations to opposing
counsel in matters that do not adversely affect the client's lawful objectives. A client has no right to instruct
a lawyer to refuse reasonable requests made by other counsel.
11. A client has no right to demand that counsel abuse anyone or engage in any offensive conduct.
12. Counsel will advise clients that an appeal should only be pursued in a good faith belief that the trial court
has committed error or that there is a reasonable basis for the extension, modification, or reversal of
existing law, or that an appeal is otherwise warranted.
13. Counsel will advise clients that they will not take frivolous positions in an appellate court, explaining the
penalties associated therewith. Appointed appellate counsel in criminal cases shall be deemed to have
complied with this standard of conduct if they comply with the requirements imposed on appointed counsel
by courts and statutes.
Lawyers' Duties to the Court

As professionals and advocates, counsel assist the Court in the administration of justice at the appellate level.
Through briefs and oral submissions, counsel provide a fair and accurate understanding of the facts and law
applicable to their case. Counsel also serve the Court by respecting and maintaining the dignity and integrity of
the appellate process.
1.
An appellate remedy should not be pursued unless counsel believes in good faith that error has been
committed, that there is a reasonable basis for the extension, modification, or reversal of existing law, or
that an appeal is otherwise warranted.
2.
An appellate remedy should not be pursued primarily for purposes of delay or harassment.
3.
Counsel should not misrepresent, mischaracterize, misquote, or miscite the factual record or legal
authorities.
4.
Counsel will advise the Court of controlling legal authorities, including those adverse to their position, and
should not cite authority that has been reversed, overruled, or restricted without informing the court of
those limitations.
5.
Counsel will present the Court with a thoughtful, organized, and clearly written brief.
6.
Counsel will not submit reply briefs on issues previously briefed in order to obtain the last word.
7.
Counsel will conduct themselves before the Court in a professional manner, respecting the decorum and
integrity of the judicial process.
8.
Counsel will be civil and respectful in all communications with the judges and staff.
9.
Counsel will be prepared and punctual for all Court appearances, and will be prepared to assist the Court in
understanding the record, controlling authority, and the effect of the court's decision.
10. Counsel will not permit a client's or their own ill feelings toward the opposing party, opposing counsel, trial
judges or members of the appellate court to influence their conduct or demeanor in dealings with the
judges, staff, other counsel, and parties.
Lawyers' Duties to Lawyers

Lawyers bear a responsibility to conduct themselves with dignity towards and respect for each other, for the
sake of maintaining the effectiveness and credibility of the system they serve. The duty that lawyers owe their
clients and the system can be most effectively carried out when lawyers treat each other honorably.
1.
Counsel will treat each other and all parties with respect.
2.
Counsel will not unreasonably withhold consent to a reasonable request for cooperation or scheduling
accommodation by opposing counsel.
3.
Counsel will not request an extension of time solely for the purpose of unjustified delay.
4.
Counsel will be punctual in communications with opposing counsel.
5.
Counsel will not make personal attacks on opposing counsel or parties.
6.
Counsel will not attribute bad motives or improper conduct to other counsel without good cause, or make
unfounded accusations of impropriety.
7.
Counsel will not lightly seek court sanctions.
8.
Counsel will adhere to oral or written promises and agreements with other counsel.
9.
Counsel will neither ascribe to another counsel or party a position that counsel or the party has not taken,
nor seek to create an unjustified inference based on counsel's statements or conduct.
10. Counsel will not attempt to obtain an improper advantage by manipulation of margins and type size in a
manner to avoid court rules regarding page limits.
11. Counsel will not serve briefs or other communications in a manner or at a time that unfairly limits another
party's opportunity to respond.
The Court's Relationship with Counsel

Unprofessionalism can exist only to the extent it is tolerated by the court. Because courts grant the right to
practice law, they control the manner in which the practice is conducted. The right to practice requires counsel
to conduct themselves in a manner compatible with the role of the appellate courts in administering justice.
Likewise, no one more surely sets the tone and the pattern for the conduct of appellate lawyers than appellate
judges. Judges must practice civility in order to foster professionalism in those appearing before them.
1.
Inappropriate conduct will not be rewarded, while exemplary conduct will be appreciated.
2.
The court will take special care not to reward departures from the record.
3.
The court will be courteous, respectful, and civil to counsel.
4.
The court will not disparage the professionalism or integrity of counsel based upon the conduct or
reputation of counsel's client or co-counsel.
5.
The court will endeavor to avoid the injustice that can result from delay after submission of a case.
6.
The court will abide by the same standards of professionalism that it expects of counsel in its treatment of
the facts, the law, and the arguments.
Members of the court will demonstrate respect for other judges and courts.

Petition For Review To The Texas Supreme Court

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Petition For Review To The Texas Supreme Court

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FILED

IN THE SUPREME COURT OF TEXAS

IDENTITY OF PARTIES & COUNSEL

Mr. Francis W. S. Chan

Mr. James Shelby Sharpe &

Trial and Appellate Counsel

Mr. Henry Chang &

Chan, No.02-14-00286-CV at *3-7.

Tex. Bus. Orgs. Code 21.223......x, 21

Tex. R. Civ. P. 47(a)x, 19

Tex. R. Evid. 601(a)..18

Farah v. Mafrige & Kormanik, P.C.,

Mr. Sharpe refers to Respondent James Shelby Sharpe.

WFFI refers to the corporate defendant, Wan Fu Foods, Inc.

Changs refers to Respondents Henry and Karen Chang, collectively.

Primary defendants refers to the Changs and WFFI, collectively.

Shareholder rights claims refers collectively to Petitioner Chans

Amin refers to Petitioners trial and appellate counsel.

TUFTA refers to the Texas Uniform Fraudulent Transfers Act which is

[App. Tab] refers to documents found in the Appendix.

STATEMENT OF THE CASE

Chan is a shareholder in and was an employee of

48th District Court, Tarrant County, Texas

The trial court granted take nothing summary judgment

Second Court of Appeals, Fort Worth, Texas

Affirmed. Chan v. Sharpe et al., No. 02-14-00286-CV

Items (I) thru (VII) contains some unbriefed subsections.

TO THE HONORABLE SUPREME COURT OF TEXAS:

Just before termination, Chan was receiving compensation in the form

After termination, Chan remained unemployed for three months until he

Chan is suing the primary defendants and Sharpe for $141,895.00 in

Appellants Brief-Section II-B-2.1 [App. 12]

on to his WFFI shares so as to continue to receive monthly dividends. [CR 1221]

Between January 2007 and July 2007, a series of communications transpired

Appellants Brief-Section II-B-2.1-2.2 [App. 12]

In September of 2009, Chan, through Amin, sent WFFI a demand letter

After Sharpe was ordered permanently withdrawn, WFFI never hired

replacement counsel and willfully failed to answer the balance of Chans

Appellants Brief-Section II-C-4.0(b) [App. 12]

SUMMARY OF THE ARGUMENT

Malley, 475 U.S. at 341-43; Lassiter, 28 F.3d at 1151.

Chan, No.02-14-00286-CV at *3-7. [App. 2]

II-C. The COA states: Chans own summary-judgment evidence indicates

III. The COA repeatedly relied only on Respondents arguments to formulate

III-A. The COA concluded that admissions of a defaulting corporate

III-F thru III-H.

omitted from its discussion material countervailing circumstantial evidence as

V-D. Under Texas law, a party is relieved of the burden of pleading

VII-B. thru VII-F.

CERTIFICATE OF COMPLIANCE WORD COUNT

IN THE SUPREME COURT OF TEXAS

Court Judgments and Opinions:

Order Granting Defendants Joint Motion to Sever and Final

Second Court of Appeals Opinion and Judgment;

Any Rules, Regulations, Ordinances, and Statutes Relied On:

Tex. Bus. & Com. Code 24.001 et seq. (TUFTA)

Tex. Bus. Orgs. Code 21.223

Tex. Bus. Orgs. Code 21.224

Tex. Bus. Orgs. Code 21.563(c)(2)

Tex. R. Civ. P. 47(a)

Tex. R. Civ. P. 166a(f)

Tex. R. Civ. P. 166a(i)

Tex. R. Evid. 601(a)