Ritchie v. Rupe

Dallas Court of Appeals, No. 05-08-00615-CV (January 12, 2016)

Justices Lang-Miers, Stoddart (Opinion), and Whitehill

On remand from the landmark Texas Supreme Court Ritchie opinion that reversed a judgment for “shareholder oppression” and eliminated that cause of action (see 2014 Sua Sponte post), the Dallas Court of Appeals completed the dismantling of the minority shareholder’s judgment. The Supreme Court remanded for consideration of an issue the Dallas Court had not addressed in its original opinion (see 2013 Sua Sponte post)—whether the judgment could be affirmed on the jury’s findings that a “relationship of trust and confidence” existed between the shareholders of the closely held Rupe Investment Corporation and that the defendants had breached fiduciary duties arising from that relationship.

The Court first declined to consider appellants’ argument that the Supreme Court’s opinion had rendered a sentence in the jury charge erroneous as a matter of law—“For a majority to owe a fiduciary duty to minority shareholders, you must find that the majority shareholder dominates control over the business.”—because they had not objected to that sentence at trial. However, the Court held, a finding of “domination and control” alone would not supplant the threshold requirement that the relationship be one of trust and confidence. The Court then reviewed and applied the well-established principles governing the formation of an informal fiduciary relationship in Texas. Holding no evidence supported finding a fiduciary relationship in this situation, the Court reversed and rendered a take-nothing judgment.

(Justice Moseley, who wrote the original opinion, and Justice FitzGerald had both retired in the intervening years, and were replaced on the panel by Justices Stoddart and Whitehill.)