MARY E. BIVINS FOUNDATION, Appellant v. HIGHLAND CAPITAL MANAGEMENT L.P., James Dondero, and Mark Okada, Appellees

AFFIRM; and Opinion Filed November 4, 2014.

Court of Appeals
S In The

Fifth District of Texas at Dallas
No. 05-12-00896-CV

MARY E. BIVINS FOUNDATION, Appellant
V.
HIGHLAND CAPITAL MANAGEMENT L.P., JAMES DONDERO,
AND MARK OKADA, Appellees

On Appeal from the 68th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-09-03742-C

OPINION
Before Justices O’Neill, Lang-Miers, and Brown
Opinion by Justice Lang-Miers
This is an appeal from a summary judgment granted in favor of appellees Highland

Capital Management L.P. (HCM) and its president, James Dondero, and chief investment officer,

Mark Okada (collectively Officers), on appellant Mary E. Bivins Foundation’s claims arising

from HCM’s and the Officers’ alleged mismanagement of the Foundation’s investment funds.

For the following reasons, we affirm the trial court’s judgment.

BACKGROUND 1

The Parties. Highland Credit Strategies Fund Ltd. (the Fund) is a mutual (hedge) fund

incorporated under Bermuda law in August 2005 with its principal place of business in Dallas

County. The Fund, along with a fund incorporated under Delaware law, were feeder funds into

1
This factual background is taken from the parties’ pleadings.
the Highland Credit Strategies Master Fund L.P., a Delaware limited partnership. The Master

Fund made all the investments for the two feeder funds. The Fund’s governing documents

included a private offering memorandum, bylaws, and subscription agreements for each investor.

HCM had a contract with the Fund to act as the Fund’s investment manager; the Officers were

HCM’s president and chief investment officer. HCM and the Officers also invested in the Fund.

The Foundation is a Texas charitable corporation with its principal place of business in

Amarillo. It invested almost two million dollars in the Fund in March 2006. In March 2008, the

Foundation submitted a request to redeem its total investment, which was permitted under the

Fund’s governing documents. The Fund valued the Foundation’s shares as of the redemption

date (July 2008) at $1,904,053 (the redemption amount). According to the Fund’s governing

documents, settlement of redemption requests was required prior to the end of the ninth month

following the redemption date.

The Winding Down of the Fund. In October 2008, due to a deterioration of the

financial markets and before the Fund settled the Foundation’s redemption request, HCM made

the decision to wind down the Fund and liquidate its assets. The Fund involuntarily redeemed

the investments of all investors who had not previously redeemed. Those investors who had

redeemed before the decision to liquidate, like the Foundation, disagreed with the investors who

had not previously redeemed about how to divide the Fund’s assets. The Fund eventually

negotiated a plan for distribution that divided the shareholders into two groups: (1) “prior

redeemers”—those investors whose withdrawal or redemption became effective on or before

September 30, 2008, but who had not received full payment of their redemption amounts; and (2)

“compulsory redeemers”—investors who were compulsorily withdrawn or redeemed when the

decision was made to wind down the Fund. The Foundation was a “prior redeemer.”

–2–
 The “Scheme of Arrangement.” The plan for distributing the Fund’s assets was

approved by a majority of the investors and creditors. The Fund then sought approval of the plan

from a Bermuda court. It used a procedure under Bermuda law called a “Scheme of

Arrangement.” BERMUDA COMPANIES ACT 1981 § 99. Under this law, a company and its

creditors may agree to “a compromise or arrangement” of the creditors’ claims. Id. The Scheme

of Arrangement requires “a majority in number representing three-fourths in value of the

creditors” to approve the arrangement. Id. If the required number of creditors approve the

Scheme, it then must be approved by the Bermuda court. Once approved by the court, it is

“binding on all the creditors . . . and also on the company . . . .” Id.

The Fund’s Scheme of Arrangement was approved by the required number of creditors

and investors and also by the Bermuda court. Under the Scheme, “the first $30 million available

for Distribution will be distributed 100% to [the Fund’s] Prior Redeemers pro rata based on their

Redemption Amounts relative to one another.” After distributions to the compulsory redeemers

who consented to the Scheme and to the non-consenting compulsory redeemers, any remaining

amounts will be distributed “85% to [the Fund’s] Prior Redeemers pro rata based on their

Redemption Amounts relative to one another[.]” In exchange for release from liability for

claims relating to the Fund’s administration and winding down, HCM agreed to fund a trust

account with $3 million on the Scheme’s effective date and another $6 million on the third

anniversary of the effective date, and the Officers agreed to guarantee the $6 million, for the

benefit of the Fund’s creditors and investors.

The Foundation’s Lawsuit. When the Foundation received notice that its outstanding

redemption payments would be paid on a pro rata basis with the amounts owed to other

investors, it sued HCM and the Officers asserting claims arising from the alleged

mismanagement of its investment funds. The claims included, among others, negligence, gross

–3–
negligence, unjust enrichment, money had and received, civil conspiracy, breach of fiduciary

duty, and violation of the Texas Theft Liability Act. The Foundation alleged that HCM and the

Officers intentionally delayed payment of the redemption amount to the Foundation, unlawfully

appropriated those funds, and reinvested them in “highly speculative and risky investments” to

keep the Fund “solvent while [HCM and the Officers] recouped their own significant

investments.” The Foundation alleged that it had received only $80,380 of the redemption

amount to date. It sought divestment of all profits as well as actual and exemplary damages.

HCM and the Officers asked the trial court to recognize the Scheme as a judgment from a

foreign country, TEX. CIV. PRAC. & REM. CODE ANN. §§ 36.001–.008 (West 2008), and then

moved for no-evidence and traditional summary judgment arguing that the Scheme released

them from liability for the Foundation’s claims. Alternatively, HCM and the Officers argued

that the Foundation’s claims were repackaged breach of contract claims and barred by the

economic loss rule. They also argued there was no evidence to support the Foundation’s claims.

The trial court granted the traditional motion for summary judgment “on all grounds stated” in

the motion; it granted the no-evidence motion for summary judgment “because [the Foundation

has] not submitted evidence supporting each of the elements specified in” the motion. The court

dismissed the Foundation’s causes of action with prejudice.

The Appeal. The Foundation appeals arguing in two issues that the trial court erred by

granting summary judgment in favor of HCM and the Officers because (1) the court did not have

subject matter jurisdiction to consider the Scheme, and (2) the Foundation raised a genuine issue

of material fact on each challenged element of its claims. We resolve this appeal by analyzing

–4–
the trial court’s no-evidence summary judgment under issue two; as a result, we do not need to

decide issue one. 2

STANDARD OF REVIEW

We review the grant of summary judgment de novo. Travelers Ins. Co. v. Joachim, 315

S.W.3d 860, 862 (Tex. 2010). When a party files a combined no-evidence and traditional motion

for summary judgment, we consider the no-evidence motion first. Ford Motor Co. v. Ridgway,

135 S.W.3d 598, 600 (Tex. 2004). We review the summary judgment evidence in the light most

favorable to the nonmovant. Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009). If the

nonmovant produced more than a scintilla of probative evidence raising a genuine issue of

material fact on each challenged element of its claim, we will reverse the no-evidence summary

judgment. Id. More than a scintilla of evidence exists if the evidence would allow reasonable

and fair-minded people to reach the verdict under review. City of Keller v. Wilson, 168 S.W.3d

802, 827 (Tex. 2005). In our review, we must credit evidence favorable to the nonmovant if

reasonable jurors could and disregard evidence contrary to the nonmovant unless reasonable

jurors could not. Id.

CLAIMS FOR NEGLIGENCE AND GROSS NEGLIGENCE

The Foundation alleged claims for negligence against HCM and gross negligence against

HCM and the Officers.

Negligence against HCM. The Foundation alleged that the Fund had assets to satisfy

the Foundation’s redemption request when it was made. But it alleged that HCM failed to act

prudently and reasonably and delayed payment of the redemption request for nine months, and

2
In our analysis of the trial court’s no-evidence summary judgment, we do not consider HCM and the Officers’ alternative arguments that
the Foundation’s claims are repackaged breach of contract claims or are barred by the economic loss rule because they are not necessary to final
disposition of this appeal. See TEX. R. APP. P. 47.1.

–5–
by that time the Fund’s assets had declined and there were not enough funds to fulfill the

Foundation’s redemption request.

Gross Negligence Against HCM and the Officers. The Foundation alleged that HCM

and the Officers were grossly negligent by failing to segregate assets to satisfy the Foundation’s

redemption request and, instead, reinvested the money “in highly speculative and risky

investments.” It alleged that this action was taken in reckless disregard of the Foundation’s

rights and was done knowingly “in an effort to salvage [HCM and the Officers’] own

investments.”

HCM and the Officers asserted there was no evidence they owed a duty of care to the

Foundation. HCM argued its duty was to the Fund pursuant to its contract to manage the Fund’s

investments, and the Officers argued their duties were to HCM, not to the Fund or to investors in

the Fund.

Applicable Law

Whether a duty of care exists is a question of law for the court to decide from the

circumstances of the case. See Greater Hous. Transp. Co. v. Phillips, 801 S.W.2d 523, 525

(Tex. 1990). “Duty, for purposes of a negligence claim, is a question of whether the defendant

has a legally enforceable obligation to comply with a general standard of conduct.” Ware v.

Cyberdyne Sys., Inc., No. 05-10-01080-CV, 2012 WL 376671, at *4 (Tex. App.—Dallas Feb. 7,

2012, no pet.) (mem. op.). A duty of care generally is imposed by law and does not arise from a

contract or promise. Id. It “is separate from a fiduciary duty which arises from a relationship

involving a high degree of trust and confidence.” Id. In determining whether a duty of care

exists, a court must consider “‘several interrelated factors, including the risk, foreseeability, and

likelihood of injury weighed against the social utility of the actor’s conduct, the magnitude of the

burden of guarding against the injury, and the consequences of placing the burden on the

–6–
defendant.’” City of Waco v. Kirwan, 298 S.W.3d 618, 623–24 (Tex. 2009) (quoting Edward D.

Jones & Co. v. Fletcher, 975 S.W.2d 539, 544 (Tex. 1998)).

Analysis

The Foundation argues that it raised a genuine issue of material fact on each element of

its negligence claim because it “put forth evidence that HCM was the manager of the Fund and

that HCM made the investment decisions for the Fund and keeps the books for the Fund. . . .

[And] HCM employs all of the people who are involved in the investment management of the

Fund.” It argues that “[b]ased on the control HCM [and the Officers] had over the Fund, and the

fact that all decisions, including how much to invest and/or withdraw from a particular

investment rested with HCM [and the Officers], they owed duties [to the Foundation] not to

negligently manage the Fund.”

The Foundation does not cite, nor have we found, any Texas authority stating that a

hedge fund’s investment manager and the manager’s employees owe a duty of care to individual

investors to protect the investors’ investments in the fund. Instead, to support its argument, the

Foundation relies on its expert’s opinion that HCM acted recklessly by failing to segregate assets

in the Fund to honor the Foundation’s redemption request. The expert testified that “the

managing company who was responsible for managing [the Fund]. . . failed . . . to equitably treat

[the Foundation] . . . I do think that they did not carry out their responsibilities, obligations.” But

although the Foundation’s expert criticized HCM’s handling of the Foundation’s redemption

request, he did not testify that HCM owed the Foundation a duty of care for purposes of a

negligence claim.

The Foundation also cites two cases to support its argument that it was owed a duty of

care: SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180 (1963), and Hand v. Dean

Witter Reynolds, Inc., 889 S.W.2d 483 (Tex. App.—Houston [14th Dist.] 1994, writ denied).

–7–
But those cases do not support a determination that HCM and the Officers owed a duty of care

under these circumstances. The SEC case involved the interpretation of the Investment Advisers

Act of 1940 and whether the SEC could obtain an injunction ordering the investment adviser to

disclose certain information to his clients. 375 U.S. at 181–82. And although the Hand case

involved a negligence claim, it was in the context of an agency relationship between a client and

a broker, and the court concluded there was no duty of care in that case. 889 S.W.2d at 492–96.

These cases do not persuade us that we should balance the Kirwan factors in this case to

conclude that HCM and the Officers owed a duty to the Foundation. See 298 S.W.3d at 623–24).

The Foundation cites the Restatement (Second) of Agency § 425 for the general

proposition that “[t]he duties of an agent who has authority to make and to manage investments

are similar to those of the trustee of a formal trust[.]” But it offered no evidence that HCM or the

Officers were its agents.

We conclude that the trial court did not err by granting a no-evidence summary judgment

on the Foundation’s claims for negligence because HCM and the Officers did not owe the

Foundation a duty of care under the circumstances of this case. Consequently, we further

conclude that the court did not err by granting a no-evidence summary judgment on the

Foundation’s claims for gross negligence. See Kirwan, 298 S.W.3d at 623 (defendant liable for

gross negligence only to extent it owed plaintiff a legal duty); Ware, 2012 WL 376671, at *4

(subject to exception in worker’s compensation cases, if no liability for negligence exists,

liability for gross negligence cannot be imposed).

–8–
 CLAIMS FOR UNJUST ENRICHMENT AND MONEY HAD AND RECEIVED

The Foundation also alleged claims against HCM for unjust enrichment and money had

and received. 3 On appeal the Foundation does not distinguish between these two claims or

address the specific elements for which HCM argued there was no evidence. Rather, it contends

generally that it raised a genuine issue of material fact on both claims by producing evidence that

HCM admitted the Foundation made a proper redemption request and was owed money; that

instead of liquidating and segregating Fund assets to satisfy its obligations, HCM chose to

reinvest those assets in risky investments; and that HCM, as the Fund’s largest investor, made

the decision to implement the Scheme of Arrangement to protect its own investment in the Fund

and take undue advantage of its position as investment manager. As a result, the Foundation

argues, “HCM has or will receive fund assets that are otherwise due and owing to” the

Foundation.

Applicable Law

Unjust enrichment occurs when the person sought to be charged has wrongfully secured

or passively received a benefit that would be unconscionable to retain. Tex. Integrated Conveyor

Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 367 (Tex. App.—Dallas 2009,

pet. denied). To prevail, a plaintiff must show that the defendant obtained a benefit from the

plaintiff by fraud, duress, or the taking of an undue advantage. Heldenfels Bros., Inc. v. City of

Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).

A claim for money had and received “‘belongs conceptually to the doctrine of unjust

enrichment.’” Edwards v. Mid-Continent Office Distributors L.P., 252 S.W.3d 833, 837 (Tex.

App.—Dallas 2008, pet. denied) (quoting Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex.

App.—El Paso 1997, no writ)). It is not premised on wrongdoing, but seeks to determine to

3
These claims were not asserted against the Officers.

–9–
which party, in equity, justice, and law, the money belongs. Id. To prevail, a plaintiff must

show that a defendant holds money which in equity and good conscience belongs to the plaintiff.

Id.

Analysis

The Foundation does not cite any summary judgment evidence showing that HCM has

received any distribution of Fund assets. See Heldenfels Bros., Inc., 832 S.W.2d at 41. And an

allegation that a party “will receive” assets sometime in the future does not raise a fact issue

about whether the party currently holds money that in equity and good conscience belongs to the

Foundation. See Edwards, 252 S.W.3d at 837. We conclude that the Foundation did not raise a

genuine issue of material fact on its claims for unjust enrichment and money had and received

and that the trial court did not err by granting a no-evidence summary judgment on these claims.

CLAIM FOR CIVIL CONSPIRACY

The Foundation alleged that HCM and the Officers conspired to protect their own

investments in the Fund by failing to liquidate assets of the Fund to satisfy the Foundation’s

redemption request.

Applicable Law

A civil conspiracy is a combination of two or more persons to accomplish an unlawful

purpose or to accomplish a lawful purpose by unlawful means. Tilton v. Marshall, 925 S.W.2d

672, 681 (Tex. 1996). Proof of a civil conspiracy depends upon proof of an underlying tort. Id.

(“a defendant’s liability for conspiracy depends on participation in some underlying tort for

which the plaintiff seeks to hold at least one of the named defendants liable”).

Analysis

To support its argument on the civil conspiracy claim, the Foundation cites the same

evidence it cited to support its claims for negligence, unjust enrichment, and money had and

–10–
received, all of which we have rejected. HCM and the Officers argue that a claim for civil

conspiracy must fail when there is no evidence of an underlying tort. We agree. Because the

Foundation has not prevailed in raising a genuine issue of material fact on the underlying tort

claims, its claim for civil conspiracy also must fail. See id. We conclude that the trial court did

not err by granting a no-evidence summary judgment on the Foundation’s civil conspiracy claim.

CLAIM FOR BREACH OF FIDUCIARY DUTY

The Foundation argues that it presented evidence raising a genuine issue of material fact

on its claim for breach of fiduciary duty by showing “that HCM was responsible for managing

the Fund and failed to carry out its duties and obligations to [the Foundation] by failing to

segregate assets and raise cash immediately to honor the redemption requests.” The Foundation

argues that “as a result of the control . . . HCM had over [the Foundation], they [sic] owed

fiduciary duties, including the duty to prudently manage the Fund and not to engage in self-

dealing conduct at the expense of [the Foundation].”

Applicable Law

To prevail on a claim for breach of fiduciary duty, an appellant first must establish that

the appellee owed the appellant a fiduciary duty. Johnston v. Kruse, 261 S.W.3d 895, 902 (Tex.

App.—Dallas 2008, no pet.). Whether a fiduciary duty exists is a question of law. Meyer v.

Cathey, 167 S.W.3d 327, 330 (Tex. 2005). In some cases, a fiduciary relationship arises as a

matter of law, such as in attorney–client or trustee relationships. Id. Additionally, an informal

fiduciary duty may arise “from ‘a moral, social, domestic or purely personal relationship of trust

and confidence.’” Id. (quoting Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d

276, 287 (Tex. 1998)). But “‘not every relationship involving a high degree of trust and

confidence rises to the stature of a fiduciary relationship.’” Id. (quoting Schlumberger Tech.

Corp. v. Swanson, 959 S.W.2d 171, 176–77 (Tex. 1997)). Instead, “[a] fiduciary relationship is

–11–
an extraordinary one that the law does not recognize lightly.” Myer v. Cuevas, 119 S.W.3d 830,

836 (Tex. App.—San Antonio 2003, no pet.). And “[c]orporate officers owe fiduciary duties to

the corporations they serve[,] . . . [but they] do not owe fiduciary duties to individual

shareholders unless a contract or special relationship exists between them in addition to the

corporate relationship.” Id.

Analysis

The Foundation does not cite, and we have not found, any Texas authority recognizing a

fiduciary relationship between an investor in a hedge fund and the hedge fund’s investment

manager. To support its argument, the Foundation again cites SEC v. Capital Gains Research

Bureau, Inc. and Hand v. Dean Witter Reynolds. But these cases are not persuasive. The issue

in the SEC case was not whether a fiduciary duty was owed, but whether an investment adviser

had a duty to disclose to his clients that the adviser had “a practice of purchasing shares of a

security for his own account shortly before recommending that security for long-term investment

and then immediately selling the shares at a profit upon the rise in the market price following the

recommendation.” 375 U.S. at 181. The court concluded that this practice, known as

“scalping,” “operates as a fraud or deceit upon any client or prospective client” and the adviser

was required to make full disclosure of the practice to his clients. Id. at 181–82. And in the

Hand case, the appellant did not assert a claim for breach of fiduciary duty. 889 S.W.2d at 492

n.5. However, the court noted that even if the appellant had asserted a claim for breach of

fiduciary duty, the court would have concluded that no fiduciary duty arose under the

circumstances of that case. Id.

HCM and the Officers rely on authority from the District of Columbia Court of Appeals

to assert that there is no fiduciary duty between the Fund and the Foundation. In that case, a

hedge fund and the fund’s investment adviser appealed the SEC’s order equating “client” with

–12–
“investor” for the purpose of registering with the SEC under the “Hedge Fund Rule.” Goldstein

v. SEC, 451 F.3d 873, 874 (D.C. Cir. 2006). In considering the order, the court provided a

detailed review of the development and regulation of hedge funds. Id. at 874–84. It ultimately

concluded that investors in the fund were not clients of the fund’s adviser and, consequently,

were not owed a fiduciary duty by the adviser. Id. at 881–84. In reaching this conclusion, the

court stated, “The adviser is concerned with the fund’s performance, not with each investor’s

financial condition,” and explained:

If the investors are owed a fiduciary duty and the entity is also owed a fiduciary
duty, then the adviser will inevitably face conflicts of interest. Consider an
investment adviser to a hedge fund that is about to go bankrupt. His advice to the
fund will likely include any and all measures to remain solvent. His advice to an
investor in the fund, however, would likely be to sell. For the same reason, we do
not ordinarily deem the shareholders in a corporation the “clients” of the
corporation’s lawyers or accountants. While the shareholders may benefit from
the professionals’ counsel indirectly, their individual interests easily can be drawn
into conflict with the interests of the entity. It simply cannot be the case that
investment advisers are the servants of two masters in this way.

Id. at 880–81 (internal citations and footnote omitted).

The Goldstein court’s analysis is persuasive. The only basis for imposing a fiduciary

duty alleged by the Foundation in this case is HCM’s position as investment manager of the

Fund and the Officers’ positions as employees of HCM. But HCM’s contract was with the Fund

to act as its investment adviser. To impose a fiduciary duty on HCM and the Officers to the

Foundation under the facts of this case would place them in the position of being the “servants of

two masters.” Id. Additionally, the Foundation did not present any evidence that it had an

informal trust or confidential relationship with HCM and the Officers or received direct

investment advice from HCM and the Officers that would give rise to a fiduciary duty. See

Cuevas, 119 S.W.3d at 836; see also Goldstein, 451 F.3d at 879–81. We will not impose a

fiduciary duty in the absence of circumstances showing a formal or informal relationship giving

–13–
rise to such a duty. Consequently, we conclude that the trial court did not err by granting a no-

evidence summary judgment on the Foundation’s claim for breach of fiduciary duty.

CLAIM UNDER THE TEXAS THEFT LIABILITY ACT

The Foundation alleged a claim against HCM and the Officers for violation of the Texas

Theft Liability Act. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 134.001–.005 (West 2011 &

Supp. 2014). It argues that it raised a genuine issue of material fact on its TTLA claim by

showing that, at the time it requested redemption of its shares, it ceased to be an investor in the

Fund and became a creditor. It argues that because it was a creditor of the Fund, the redemption

amount was not property of the Fund or at least there was a question of fact about whether the

redemption amount was property of the Fund. The Foundation also argues that HCM and the

Officers “misappropriated money which rightfully belong[ed]” to the Foundation by “self-

dealing in order to protect their own investment in the Fund by reinvesting in illiquid assets and

failing to honor the outstanding redemption requests.”

Applicable Law

The TTLA states that “[a] person who commits theft is liable for damages resulting from

the theft.” Id. § 134.003(a). It defines “theft” as “unlawfully appropriating property or

unlawfully obtaining services as described by Section 31.03, 31.04, 31.06, 31.07, 31.11, 31.12,

31.13, or 31.14, Penal Code.” Id. § 134.002(b). Section 31.03 of the penal code, the provision

that applies here, states that a person commits theft “if he unlawfully appropriates property with

intent to deprive the owner of property.” TEX. PENAL CODE ANN. § 31.03(a) (West Supp. 2014).

“Appropriate” means to “acquire or otherwise exercise control over property other than real

property.” Id. § 31.01(4). Appropriation of property is unlawful if, among other things, it is

without the owner’s effective consent. Id. § 31.03(b)(1).

–14–
 Analysis

Creditor of the Fund. The Foundation does not cite authority to support its argument

that when it ceased to be an investor and became a creditor of the Fund that the redemption

amount was no longer property of the Fund. HCM and the Officers argue that creditors do not

“hold an ownership interest in the assets of the Fund.” We agree with HCM and the Officers.

A creditor of a corporation does not own the corporation’s assets and generally may not,

on its own behalf, sue the directors of the corporation for negligent mismanagement of the

corporation’s affairs. See Sutton v. Reagan & Gee, 405 S.W.2d 828, 835 (Tex. Civ. App.—San

Antonio 1966, writ ref’d n.r.e.). And as a creditor of the Fund, the Foundation could not sue

HCM and the Officers for mismanagement of the Fund. See id.; see also Eagle Props. Ltd. v.

Scharbauer, 807 S.W.2d 714, 724 (Tex. 1990) (creditor cannot maintain personal action against

directors of corporation for breaching duty to corporation) (citing Sutton, 405 S.W.2d at 834–

35). Instead, any cause of action lay with the Fund to sue on its own behalf to recover for the

benefit of all its creditors. See Sutton, 405 S.W.2d at 835.

Misappropriation of Foundation’s Money. The Foundation did not present authority to

support its argument that the money in the Fund became the property of the Foundation at the

time the Foundation submitted its redemption request. Nor did it present summary judgment

evidence raising a fact issue about whether HCM and the Officers unlawfully received assets

from the Fund or acted unlawfully by failing to pay the Foundation its entire redemption amount.

See TEX. PENAL CODE ANN. § 31.03(a) (theft requires unlawful appropriation of property with

intent to deprive owner of property); Freeman v. State, 707 S.W.2d 597, 605–06 (Tex. Crim.

App. 1986) (person accused of theft must have exercised unauthorized control over property).

We conclude that the trial court did not err by granting a no-evidence summary judgment on the

Foundation’s claim under the TTLA.

–15–
 CONCLUSION

We affirm the trial court’s judgment.

/Elizabeth Lang-Miers/
ELIZABETH LANG-MIERS
JUSTICE

120896F.P05

–16–
 S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT

MARY E. BIVINS FOUNDATION, On Appeal from the 68th Judicial District
Appellant Court, Dallas County, Texas
Trial Court Cause No. DC-09-03742-C.
No. 05-12-00896-CV V. Opinion delivered by Justice Lang-Miers,
Justices O’Neill and Brown participating.
HIGHLAND CAPITAL MANAGEMENT
L.P., JAMES DONDERO, AND MARK
OKADA, Appellees

In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

It is ORDERED that appellees Highland Capital Management L.P., James Dondero, and
Mark Okada recover their costs of this appeal from appellant Mary E. Bivins Foundation.

Judgment entered this 4th day of November, 2014.

–17–