David A. Skeels v. Jonathan T. Suder, Michael T. Cooke, and Friedman, Suder & Cooke, P.C.

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-18-00112-CV
___________________________

DAVID A. SKEELS, Appellant

V.

JONATHAN T. SUDER; MICHAEL T. COOKE; AND FRIEDMAN, SUDER &
COOKE, P.C., Appellees

On Appeal from the 236th District Court
Tarrant County, Texas
Trial Court No. 236-284262-16

Before Birdwell and Womack, JJ.; Lee Gabriel (Senior Justice, Retired,
Sitting by Assignment)
Memorandum Opinion on Further Rehearing by Justice Womack
Dissenting Memorandum Opinion on Further Rehearing by Justice Birdwell
 MEMORANDUM OPINION ON FURTHER REHEARING

On June 17, 2021, we issued a memorandum opinion and judgment on

rehearing, affirming the trial court’s declaratory judgment based on the application of

the Texas Business Organizations Code but modifying the amended final judgment to

delete the awards for attorney’s fees and costs and for sanctions. Appellant and

Appellees filed further motions for rehearing. See Tex. R. App. P. 49.5. Although we

deny Appellant’s further motion for rehearing, we withdraw our June 17, 2021

memorandum opinion and judgment on rehearing and substitute this memorandum

opinion and our contemporaneously issued judgment on further rehearing. We deny

Appellant’s further motion for en banc reconsideration as moot. And we deny

Appellees’ further motion for rehearing.

I. INTRODUCTION

This appeal presents the question of the applicability of a corporate entity’s

shareholder agreement to the entity’s right to redeem its shares. We conclude that the

plain language of the shareholder agreement at issue is broad, clearly including any

actions such as share redemption even though not specifically itemized in the

agreement. Thus, we affirm the trial court’s declaratory judgment holding as such.

But because the awards for sanctions, attorney’s fees, and costs are supported by no

evidence, we reverse those awards.

2
 II. BACKGROUND

A. Factual Background

1. The Firm Incorporates and Hires Skeels

Appellee Friedman, Suder & Cooke, P.C. (“the Firm”) is a Texas professional

corporation, which incorporated in December 1992 and is a closely held corporation.1

See Tex. Bus. Org. Code Ann. § 21.563(a). The Firm’s articles of incorporation

expressly denied preemptive rights to the Firm’s shareholders and granted the

governing authority sole discretion as to the issuance and disposal of shares:

Any shares of stock authorized by these Articles or any additional
authorized issues of any capital stock, rights or securities convertible into
any shares of such stock may be issued and disposed of by the Board of
Directors to such persons, firms, corporations or associations for such
consideration, upon such terms and in such manner as the Board of
Directors may, in its discretion, determine without any offering thereof
on the same terms or on any other terms to the shareholders then of
record or to any class of shareholders.

See Tex. Bus. Org. Code Ann. §§ 21.203, 21.204(b).

In 1993, 1999, and 2002, the Firm amended its articles to reflect the Firm’s

name changes and to provide that no shares in the corporation had been issued. The

1999 and 2002 amendments were signed by appellee Michael T. Cooke as “President.”

1
The Firm began as Friedman & Young, a Professional Corporation, but
changed its name twice over the years until it became known as Friedman, Suder &
Cooke, P.C. in 2002. The Firm was not formed as a close corporation and, thus, was
an ordinary corporation. See Tex. Bus. Org. Code Ann. §§ 1.002(8), 3.008, 21.701(1),
(3).

3
Walker C. Friedman, appellee Jonathan T. Suder, and Cooke were considered to be

the Firm’s “founding shareholders.”

In 2007, appellant David A. Skeels began work as an associate attorney at the

Firm for its business-litigation group, which was headed by Suder and Cooke. As an

associate, Skeels was paid a guaranteed yearly salary with biannual bonuses.

2. Skeels Becomes a Shareholder and Shareholder Agreement Signed

In January 2011, Skeels was promoted to shareholder in the Firm and received

1,000 shares. Skeels’s compensation scheme changed and became based on a certain

percentage of the business-litigation group’s net profits with no guaranteed salary.2

Under the percentage arrangement, the business litigators’ recoveries (minus

expenses) would be pooled, and each litigator would then receive a percentage, even if

that litigator had not worked on every case included in the pool. Skeels received no

dividends based on his shares, however. The share certificate, which was issued later

but dated in January 2011, reflected that the shares had been “fully paid.” See Tex.

Bus. Org. Code Ann. §§ 21.157(b), 21.162.

That same year, Skeels and Suder tried a patent case (“Lighting Ballast”), which

Skeels had begun working on while still an associate, that resulted in a $4.5 million

jury verdict in favor of the Firm’s client. See Lighting Ballast Control, LLC v. Philips

2
Although Skeels did not receive a guaranteed salary as a shareholder, he would
receive a sporadic monthly “draw” that effectively was an advance on his future
percentage of the yearly net profits for the business-litigation group.

4
Elecs. N. Am. Corp., 814 F. Supp. 2d 665, 670, 698 (N.D. Tex. 2011), rev’d,

498 F. App’x 986, 987 (Fed. Cir. 2013),3 vacated & remanded, 574 U.S. 1133 (2015), aff’d,

790 F.3d 1329, 1333–34 (Fed. Cir. 2015), cert. denied, 577 U.S. 1144 (2016).

In early 2014 and while Lighting Ballast wended its way through the federal

appellate courts, the Firm received notice of an impending IRS audit, and the Firm’s

bookkeeper recommended that its “record keeping” be shored up. In February 2014

and in an apparent response to the looming audit, the shareholders of the Firm

executed a Resolution “to ratify, confirm and memorialize in writing a policy and

practice of the Firm, and a right possessed by Walker Friedman, Jonathan Suder and

Michael Cooke, before any current shareholder other than Walker Friedman, Jonathan

Suder and Michael Cooke became a shareholder in the Firm.” The policy and practice

that was “resolved” in the Resolution was broadly worded:

Notwithstanding the number of shareholders, or the number of shares
issued to any shareholder, Walker Friedman, Jonathan Suder and
Michael Cooke, collectively, have been entitled, and shall continue to be
entitled, to take affirmative action on behalf of the Firm, and veto any
vote or action taken by or on behalf of the Firm, and/or by any other
shareholder, whether individually, or collectively.

Friedman, Suder, and Cooke signed the Resolution in one column; in a separate

column, Skeels and the three other shareholders signed it as well. Skeels does not

3
Although the Federal Circuit reheard the panel’s decision en banc, the Court
reinstated the panel’s prior January 2, 2013 decision. 744 F.3d 1272, 1292 (Fed. Cir.
2014) (en banc op. on reh’g).

5
contend that the Resolution was ambiguous or that he signed it under coercion or

duress.

Cooke later stated that the purpose of the Resolution was to ensure that his,

Friedman, and Suder’s decisions about the management and control of the Firm—

“whatever we need to do in the [F]irm”—could not be overturned by a combined

vote of the other shareholders, which had been the Firm’s prior practice and

unwritten policy. In short, the shareholders memorialized that Friedman, Suder, and

Cooke were the governing authority for the Firm. See Tex. Bus. Org. Code Ann.

§ 1.002(35)(A) (defining corporation’s governing authority as a “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”), § 3.101 (providing that a governing authority

“manages and directs the business and affairs of the domestic entity”). As

characterized by the Firm, the Resolution afforded “the founding shareholders final

word in all matters relating to the [F]irm,” including the “extinguishment or

redemption of non-founding shareholders’ shares.” Similarly and as we previously

quoted, the Firm’s articles of incorporation denied the shareholders preemptive rights

to their shares and provided that the governing authority could issue and dispose of

shares at its discretion.

3. Skeels is Fired

In 2015, Skeels’s relationship with Suder deteriorated, and Skeels began sending

emails to another non-founding shareholder complaining about Suder’s work ethic.

6
Skeels and the other shareholder began talks with another law firm later in 2015 about

“exploring other opportunities.” Skeels averred that he approached the other law

firm as leverage to negotiate a higher percentage share of the profits at the Firm.

In early December 2015, Skeels and the other “younger” shareholders met with

Suder and Cooke “to discuss with them some concerns [they] had about the division

of profits and the way in which the [F]irm was compensating certain shareholders,

particularly in light of how much work [Suder and Cooke] were doing or . . . not

doing.” Friedman apparently was not part of the meeting because he, Cooke, and

Suder “operated internally like two different law firms; Walker Friedman and his

group and [Cooke and Suder] separately with their group.” It is unclear what the

outcome of this meeting was.

On December 11, Suder discovered the emails in which Skeels had groused

that Suder was “arrogant,” “delusional,” and prone to leave the office early.4 On

December 14, the Firm told Skeels that his employment would be terminated at the

end of the year and, as part of its “Proposal Regarding Separation,” required him to

“tender” his shares in the Firm. In the proposal, the Firm stated that it would pay

Skeels $50,000 “from the Lighting Ballast matter” once all appeals were exhausted and

Although Skeels argues in his briefing that these emails were “private,” he sent
4

the emails under his Firm email address via the Firm’s computer server.

7
the Firm received its fees.5 Skeels asserted that this offer was later increased to

$75,000. Without accepting or rejecting the Firm’s proposal, Skeels began working

for the other law firm he had previously approached. The other shareholder on

Skeels’s emails was also fired; he began working at the same firm as Skeels.

4. The Firm Attempts a Share Redemption

On January 8, 2016, Skeels sent a letter to Cooke seeking “to evaluate and

determine [his] rights in connection with [his] involuntary termination” from the Firm

and requested multiple documents relating to the Firm’s finances and corporate

governance. See id. § 21.218(b). Skeels stated that once he received the requested

information, he would be able to respond to the “proposals concerning my

involuntary separation.”

The Firm gave Skeels’s newly retained attorney (“Attorney One”) some of the

requested documentation, which the Firm stated was information “given to all [Firm]

lawyers at the end of each year.” In a letter to Attorney One shortly thereafter, the

Firm’s attorney formally requested that Skeels “voluntarily surrender his share

[certificate] and relinquish all rights, if any, attendant thereto” and issued a notice that

his shares would be redeemed on March 11. See id. § 21.305. The Firm’s attorney

explained that the redemption would be priced at “zero,” which was authorized by the

Skeels asserts that this payment was intended to compensate him for his
5

shares. However, the proposal does not link the $50,000 to the “tender” of Skeels’s
shares; the $50,000 was mentioned only in connection to the Lighting Ballast
“proceeds.”

8
Resolution as a governing document or applicable agreement. See id. § 303.004(b)(2).

Attorney One, on Skeels’s behalf, rejected the Firm’s demands.

B. Procedural Background

1. Morphing Allegations and Counterclaim

Skeels filed a verified petition against Suder, Cooke, and the Firm on March 9,

2016, and successfully sought an ex parte temporary restraining order against the

Firm’s attempt to redeem his share certificate.6 Skeels stated that he knew the Firm

was “likely to receive . . . a large fee” from Lighting Ballast in March or April, which

appeared to be one factor in his filing suit quickly.7 Against Suder and Cooke, Skeels

brought a derivative breach-of-fiduciary-duty claim arising from their decisions to fire

Skeels and to withhold “full disclosure.” Skeels also sought a mandamus in order to

inspect the Firm’s business records and requested several declarations under the

Uniform Declaratory Judgments Act (the UDJA) regarding the Firm’s allegedly

wrongful attempt to redeem Skeels’s shares for no compensation based on the

Resolution.

Shortly after filing suit, Skeels was interviewed for an article in the Texas Lawyer

with the headline “Partner Alleges He Was Fired By Firm Before Receiving Big

6
The trial court later denied Skeels’s request for a temporary injunction.
7
Indeed, the last appellate action in Lighting Ballast—the Supreme Court’s denial
of certiorari—occurred on February 29, and a satisfaction of judgment was executed
on March 28. 577 U.S. 1144 (2016).

9
Attorney Fee.” The article discussed Skeels’s allegations that the Firm, Suder, and

Cooke were attempting to divest him of his shareholder interest in the Firm with no

compensation and were trying to deny him any interest in the Lighting Ballast recovery.

In his first amended verified petition, Skeels reasserted the derivative fiduciary

claim against Suder and Cooke and added a direct breach-of-fiduciary-duty claim

against them. Against the Firm, Skeels alleged claims for a “wrongful attempt” to

redeem Skeels’s shares, for violating Skeels’s ownership rights in the Firm, and for a

breach of the Firm’s statutory duty to allow an examination of its business records.

Skeels reasserted his UDJA claim regarding the Firm’s attempt to redeem his shares.

The Firm, Suder, and Cooke answered the verified petitions and raised

affirmative defenses. They also sought sanctions, alleging that Skeels’s pleadings were

in bad faith, groundless, and had been brought solely for the purpose of harassment.

Suder’s and Cooke’s sanctions requests were specifically sought under Rule 13; the

Firm’s request was not so limited and cited no supporting authority. See Tex. R. Civ.

P. 13.

Attorney One then withdrew from his representation of Skeels, and Attorney

Two began representing Skeels. Attorney Two filed a second amended petition on

Skeels’s behalf. This petition omitted most of the factual allegations from the verified

petitions and reasserted the requests for mandamus relief to examine the Firm’s

business records and for declarations regarding the legality of the Firm’s share-

redemption attempts. Skeels also raised claims for breach of an oral contract and

10
promissory estoppel against the Firm based on his assertion that he had not been paid

appropriately in 2016—after he no longer worked for the Firm—under the Firm’s

profit-sharing agreement with the shareholders. Against Suder and Cooke, Skeels

alleged unjust enrichment arising from their conspiracy to “avoid sharing . . . net

profits with [Skeels].”

The Firm answered the second amended petition, raising affirmative defenses,

and again sought unspecified sanctions against Skeels for his groundless, bad-faith,

and harassing pleadings. The Firm also raised a UDJA counterclaim, requesting

declarations that the Resolution was a governing document authorizing the Firm’s

governing authority—Friedman, Suder, and Cooke—to “make any decision . . . with

respect to . . . Skeels’[s] status as a shareholder” and that Skeels had been properly

terminated as an at-will employee. The Firm pleaded for the recovery of its attorney’s

fees and costs as authorized under the UDJA. Suder and Cooke also answered,

alleging affirmative defenses, and again sought sanctions under Rule 13; they did not

allege a counterclaim.

2. Unsuccessful Summary Judgment and Discovery

The Firm, Suder, and Cooke moved for partial summary judgment on Skeels’s

contractual and quasi-contractual claims—breach of an oral contract, promissory

estoppel, and unjust enrichment. They did not seek summary judgment on their or

Skeels’s declaratory-judgment requests. Attorney Two sought leave to file a third

amended petition “to allow additional causes of action based on actions that occurred

11
in December, 2016.” The trial court denied both the summary-judgment motion and

the motion for leave.

During discovery, the parties entered into an agreement under which the Firm

agreed to provide its business records for fiscal year 2016. See Tex. R. Civ. P. 11.

After Skeels unsuccessfully attempted to designate himself as a witness regarding

share valuation and his damages, Skeels served his expert designation in which he

disclosed that A. Lamar Casparis would testify as to the appropriate valuation of

Skeels’s shares in the Firm. The Firm, Suder, and Cooke moved to exclude Casparis’s

testimony because his opinion would be irrelevant—the Resolution allowed the Firm

to value the shares as it saw fit.8

3. Declaratory Judgment

The trial court set the case for a September 11, 2017 trial. During the

September 8 pretrial hearing, the parties argued the effect of the Resolution and

whether its scope and interpretation were issues of law or fact. The trial court orally

ruled at the hearing “that the shareholder agreement [i.e., the Resolution] controls,”

obviating the need for a valuation expert. See Tex. R. Civ. P. 166(g), (p). Accordingly,

the trial court granted the Firm, Suder, and Cooke’s motion to exclude Casparis’s

testimony. See Tex. R. Civ. P. 166(a).

8
They also attacked Casparis’s methodology.

12
 Based on the trial court’s rulings at the pretrial hearing, Skeels recognized that

his claim for declaratory judgment had been effectively dismissed. On the first day of

trial, the Firm requested that the trial court grant its UDJA counterclaim based on the

trial court’s legal ruling during the pretrial hearing regarding the effect of the

Resolution. The trial court signed an order denying Skeels’s UDJA claim and granting

the Firm’s UDJA counterclaim and declared that the Resolution was a governing

document that authorized all of the Firm’s actions. The “issue of attorney’s fees and

costs related [to] the granting of this Declaratory Judgment” was expressly reserved

for a later date. The trial court then recessed the trial for one week.

4. Sanctions, Attorney’s Fees, and Final Judgment

When the trial continued, Attorney Two asserted that Skeels would not

proceed on his remaining claims, based on what Attorney Two determined was the

trial court’s effective denial of those claims in its UDJA ruling, and that the only

remaining issues were the Firm’s, Suder’s, and Cooke’s requests for sanctions and the

Firm’s request for UDJA fees and costs. The trial court then held an evidentiary

hearing.

The trial court entered findings of fact and conclusions of law, concluding that

$20,000 in sanctions against Skeels personally should be awarded to Suder and Cooke

based on Rule 13 and under Chapter 10 of the Civil Practice and Remedies Code

because Skeels’s pleadings were “groundless,” were brought in “bad faith,” were

harassing, “lacked evidentiary support,” and were brought “for an improper purpose.”

13
See Tex. Civ. Prac. & Rem. Code Ann. § 10.004; Tex. R. Civ. P. 13; see also Tex. R. Civ.

P. 296.

The sanctions award was traced back to Skeels’s pleadings and litigation

conduct. The trial court found that Skeels’s verified petitions (as well as the Texas

Lawyer article) contained unnecessary personal attacks and disclosed confidential client

information surrounding Lighting Ballast. The fiduciary-duty claims in Skeels’s

superseded petitions and the contractual and quasi-contractual claims in the second

amended petition were found to be groundless in part because Skeels had been an at-

will employee. Regarding the second amended petition, the trial court found that

Skeels’s unjust-enrichment claim was frivolous because it was untethered to any other

claim against Suder and Cooke or to an attempt to pierce the Firm’s corporate veil.

The trial court also found Skeels’s requests to inspect the Firm’s business records to

be groundless and harassing because it was not tied to another cause of action and

was an attempt to recover attorney’s fees for a remedy that was easily achieved

through the discovery rules. The trial court found that Skeels’s “specific animus for

Suder” (shown through Skeels’s emails while still employed at the Firm and through

Skeels’s testimony at the sanctions hearing) led to Skeels’s filing suit for an improper,

harassing purpose. Also persuasive to the trial court was its finding that Skeels was a

licensed attorney, its finding that Skeels delayed seeking discovery for eleven months

after filing suit, Skeels’s testimony that he had no regrets about the manner in which

his suit proceeded, and the trial court’s “inference that Skeels asserted the baseless

14
claims to coerce Defendants to settle because he did not have a way to compel

payment for his shares.”

The trial court also addressed attorney’s fees and costs in its findings and

conclusions, awarding the Firm $75,000 in reasonable and necessary attorney’s fees

and $12,500 in costs, both regarding the UDJA claim. The trial court awarded

“$25,000 in expenses incurred by [the Firm, Suder, and Cooke] in this matter,

including retaining an expert to rebut the positions of . . . Casparis, who was stricken

by order of the Court.”

The trial court then entered a final, take-nothing judgment on Skeels’s claims

based on its prior order granting the Firm’s UDJA counterclaim. The trial court

granted the Firm’s, Suder’s, and Cooke’s motions for sanctions, awarding $20,000

against Skeels, and awarded the Firm, Suder, and Cooke $100,000 in attorney’s fees

and costs related to the declaratory judgment. In its judgment, the trial court

recognized that after its declaratory-judgment order in favor of the Firm, Attorney

Two had “represented that none of [Skeels’s] claims remained to be tried to a jury,”

thereby “conced[ing] [that] judgment against [Skeels] on all of [Skeels’s] claims was

proper.”

15
 5. Post-Judgment Proceedings and Amended Final Judgment

Skeels filed a pro se,9 verified motion for new trial or to modify the judgment

and argued that the trial court erred by excluding his evidence of share valuation and

by concluding that the Resolution governed and authorized the Firm’s share

redemption. He also argued that sanctions against him based on Attorney One’s

conduct was in error.

Although the trial court held a hearing on Skeels’s new-trial motion, it was

overruled by operation of law. See Tex. R. Civ. P. 329b(c). The trial court did,

however, sign an amended final judgment, clarifying the attorney’s-fees and sanctions

awards:

[The Firm] shall recover from [Skeels] $100,000.00 in attorneys’ fees and
costs related to the granting of the . . . Declaratory Judgment.

. . . Suder[’s] and Cooke’s Motion[s] for Sanctions [are] granted
and . . . Suder and Cooke shall each recover from [Skeels] $10,000.00 as
a sanction against [Skeels] pursuant to the Court’s Findings of Fact and
Conclusions of Law.

The trial court did not award the Firm sanctions. The remainder of the amended final

judgment tracked the original judgment, including the trial court’s recognition that

“none of [Skeels’s] claims remained to be tried to a jury” and that “judgment against

[Skeels] on all of [his] claims was proper” based on the declaratory judgment.

9
Attorney Two was granted leave to withdraw from her representation of
Skeels after the trial court entered final judgment.

16
 Skeels filed a motion for new trial or to modify the amended final judgment,

raising essentially the same grounds as were in his prior postjudgment motion. The

motion was overruled by operation of law.

III. DISCUSSION

A. Declaratory Judgment

1. Declaration Regarding Effect of Resolution

a. Standard of Review

Skeels first contends that the trial court’s declaratory judgment that the

Resolution authorized the Firm’s redemption of Skeels’s shares was in error. We

review a declaratory judgment under the same standards as other judgments and look

to the procedure used to resolve the issue in the court below to determine the

appropriate standard of review. See Tex. Civ. Prac. & Rem. Code Ann. § 37.010;

Waldrop v. Waldrop, 552 S.W.3d 396, 401 (Tex. App.—Fort Worth 2018, no pet.) (en

banc op. on reconsideration); Solar Soccer Club v. Prince of Peace Lutheran Church of

Carrollton, 234 S.W.3d 814, 820 (Tex. App.—Dallas 2007, pet. denied). Here, the trial

court determined the import of the Resolution to Skeels’s claims at a pretrial hearing,

which the parties recognized essentially disposed of Skeels’s claims against the Firm,

Suder, and Cooke. Accordingly, the ruling was “akin to a summary judgment or

directed verdict,” which we review de novo as a matter of law. JPMorgan Chase Bank,

N.A. v. Orca Assets G.P., 546 S.W.3d 648, 653 (Tex. 2018). As in a directed-verdict

review, we may affirm the declaratory judgment on any ground that supports it. See

17
RSL–3B–IL, Ltd. v. Prudential Ins. Co. of Am., 470 S.W.3d 131, 136 (Tex. App.—

Houston [1st Dist.] 2015, pet. denied); Westchester Fire Ins. Co. v. Admiral Ins. Co., 152

S.W.3d 172, 191 (Tex. App.—Fort Worth 2004, pet. denied) (en banc op. on reh’g).

b. The Applicable Statutes

Corporate share redemption is addressed in the Business Organizations Code

(the BOC). Such redemptions “take[] effect by call and written notice of the

redemption of the shares,” and a notice must state several statutory specifics.10 Tex.

Bus. Org. Code Ann. §§ 21.304–21.305. Additionally, if an owner of a professional

entity “ceases to be an authorized person,” the entity is to purchase the ownership

interest and “may” provide the “price and terms” of purchase in its governing

documents. Id. § 301.008(b), (d). The BOC further allows a corporation’s governing

documents or an applicable agreement to address share redemption:

(a) A professional corporation may redeem shares of a shareholder,
including a deceased shareholder.

(b) The price and other terms of a redemption of shares may be:

(1) agreed to between the board of directors of the professional
corporation and the shareholder or the shareholder’s personal
representative; or

(2) specified in the governing documents of the professional
corporation or an applicable agreement.

Id. § 303.004.

The Firm asserts that it complied with the call-and-notice mandates of
10

Sections 21.304 and 21.305 in redeeming Skeels’s shares.

18
 However, the BOC in Chapter 21, Subchapter C, also grants shareholders

broad authority to enter into written agreements that control corporate governance:

The shareholders of a corporation may enter into an agreement that . . .

....

. . . governs, in general or with regard to specific matters, the
exercise or division of voting power by and between the shareholders,
directors, or other persons, including use of disproportionate voting
rights or director proxies; [or]

. . . otherwise governs the exercise of corporate powers, the
management of the business and affairs of the corporation, or the
relationship among the shareholders, the directors, and the corporation
as if the corporation were a partnership or in a manner that would
otherwise be appropriate only among the partners and not contrary to
public policy.

Tex. Bus. Org. Code Ann. § 21.101(a)(7), (12). This statutory authorization validates

shareholder agreements even if they are otherwise “inconsistent” with the BOC. Id.

§ 21.104; see also id. § 21.110 (providing provisions governing shareholder agreements

in Chapter 21, Subchapter C, do not “prohibit or impair any agreement between two

or more shareholders”); Batey v. Droluk, No. 01-12-01058-CV, 2014 WL 1408115, at

*9 (Tex. App.—Houston [1st Dist.] Apr. 10, 2014, no pet.) (mem. op.) (recognizing

the BOC contemplates that its provisions may be limited by a shareholder agreement).

Thus, a shareholder agreement, signed by all shareholders and “made known” to the

corporation, governs corporate action notwithstanding a contrary provision in the

BOC. Tex. Bus. Org. Code Ann. § 21.101(b)(1)(B). And shareholders are, therefore,

free to agree to stricter or more lenient rights than those provided in the BOC. See,

19
e.g., Ritchie v. Rupe, 443 S.W.3d 856, 881 (Tex. 2014). Accordingly, the terms of any

share redemption may be provided in a governing document or an applicable

agreement among the members, even if the document or agreement is broader or

narrower than the dictates of the BOC. See id.; 1 Greg Abbott & Doug Coulson,

Texas Practice Guide: Business and Commercial Litigation § 3:74 (2020). See generally

Elisabeth de Fontenay, Individual Autonomy in Corporate Law, 8 Harv. Bus. L. Rev. 183,

189 (2018) (“[O]rganizational law facilitates business enterprise and encourages

investment by dramatically reducing the transaction costs (including negotiation costs

and information costs) of forming, operating, and governing business entities, while at

the same time affording the parties considerable freedom to set their own terms.”).

c. Application

Skeels asserts that the Resolution was an “unremarkable delegation of authority

to the founding shareholders to manage the day-to-day affairs of the Firm” and could

not be interpreted to include “additional redemption-related characteristics.” Skeels

contends that although the BOC grants corporations the right to compel the

redemption of shares, the price and other terms of such redemption must be

specifically provided in a governing document or applicable agreement under Section

303.004. Skeels recognizes that the language of Section 303.004(b) is permissive but

asserts that the term “redemption” is necessarily conditioned on specified redemption

terms, which are not included in the Resolution. See generally Tex. Gov’t Code Ann.

§ 311.016 (providing “may” is permissive unless “the context in which the word or

20
phrase appears necessarily requires a different construction”); Tex. Bus. Org. Code

Ann. § 1.051 (providing Chapter 311 of the Government Code applies to the

construction of the BOC). According to Skeels, the “interdependence” between a

redemption and an advance arrangement on price is further “confirmed” by the call-

and-notice provisions in Section 21.304(c). Tex. Bus. Org. Code Ann. § 21.304(c). In

sum, Skeels argues that the Resolution cannot be considered a governing document or

applicable agreement regarding share redemption because of the Resolution’s lack of

detail regarding the terms of redemption.

We disagree. Skeels does not argue that the Resolution is ambiguous; thus, we

interpret it based on its plain language. See URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755,

763–64 (Tex. 2018); Lyons v. Montgomery, 701 S.W.2d 641, 643 (Tex. 1985); Herring

Bancorp, Inc. v. Mikkelsen, 529 S.W.3d 216, 224 (Tex. App.—Amarillo 2017, pet.

denied) (op. on reh’g). The unambiguous Resolution is broadly worded and allows

Friedman, Suder, and Cooke to take “affirmative action” on behalf of the Firm with

no limitation placed on that power. All shareholders had signed the written

Resolution, and the Resolution had been made known to the corporation—the Firm.

See Tex. Bus. Org. Code Ann. § 21.101(b)(1)(B); cf. Sanders v. McMullen, 868 F.2d 1465,

1468 (5th Cir. 1989) (holding notice of shareholder agreement insufficient under

statutory predecessor to BOC because “other shareholders existed who were totally

unaware of the agreement”); R. H. Sanders Corp. v. Haves, 541 S.W.2d 262, 265 (Tex.

App.—Dallas 1976, no writ) (concluding notice requirements for shareholder

21
agreements under statutory predecessor to BOC sufficiently met because all

shareholders had knowledge of the agreement, meeting the notice requirements’

purpose). Although the circumstances surrounding the formation of the Resolution

may be used to aid construction of its unambiguous language, see First Bank v. Brumitt,

519 S.W.3d 95, 110 (Tex. 2017), restricting the scope of the Resolution based on the

circumstance of the Firm’s audit would incorrectly narrow the Resolution’s broad

language to exclude share redemption (and, presumably, most other actions taken by

the governing authority under the Resolution not directly referrable to the audit). In

short, inferring a narrow intent from the circumstances surrounding the formation of

the unambiguous, expansive shareholder agreement would impermissibly alter it. See

URI, 543 S.W.3d at 757–58, 767–69. Further, the surrounding circumstances do not

clearly indicate that share redemption was intended to be excluded from the scope of

the Resolution. See, e.g., Piranha Partners v. Neuhoff, 596 S.W.3d 740, 752 (Tex. 2020).

Section 303.004, which is plainly permissive, does not mandate that such a

broadly worded agreement must expressly provide for share redemption. A contrary

interpretation of Section 303.004 would eviscerate the far-reaching authority granted

to a corporation’s shareholders in Section 21.101(a), which applies even if the

Resolution were inconsistent with the BOC, and would ignore the clear permissive

language used by the Legislature. See Tex. Bus. Org. Code Ann. §§ 21.101, 21.104;

Ritchie, 443 S.W.3d at 881. Nothing in the context of Section 303.004 indicates that

the Legislature intended these permissive provisions to be mandatory such that a

22
shareholder agreement could not provide otherwise, especially in light of the fact that

the Legislature expressly provided that shareholder agreements could be

“inconsistent” with other BOC provisions. Tex. Bus. Org. Code Ann. § 21.104; see

also id. § 21.110; Tex. Gov’t Code Ann. § 311.016(1); Ritchie, 443 S.W.3d at 881;

Hernandez v. Ebrom, 289 S.W.3d 316, 318 (Tex. 2009).

Similarly, Section 301.008 does not dictate a different conclusion. A purchase

of an ownership interest is required if a member ceases to be an authorized person,

and the terms of such purchase may be provided in the governing documents or an

applicable agreement among the members. Tex. Bus. Org. Code Ann. § 301.008(c).

Here, the shareholders, including Skeels, agreed that Friedman, Suder, and Cooke

would be the Firm’s governing authority and that they could take affirmative action

on the Firm’s behalf, which would necessarily include share redemption from an

unauthorized person and its terms. The Resolution’s failure to specify the terms upon

which share redemption could be accomplished does not mean that the Resolution

excluded or could not apply to share redemption. Cf. id. § 21.101(a)(7) (recognizing

shareholder agreement may govern the exercise of voting power “in general or with

regard to specific matters”). In our view, the Resolution’s broad language allowed the

governing authority to set the terms of any share redemption as it saw fit. Indeed,

shareholders may agree to terms even if inconsistent with the BOC, including the

share-redemption provisions on which Skeels relies. See id. §§ 21.104, 21.110.

23
 Again, the shareholders of the Firm all signed the Resolution, which granted

Friedman, Suder, and Cooke—the agreed governing authority for the Firm—the

unfettered right to take “affirmative action” on the Firm’s behalf. Skeels admits that

he voluntarily signed the Resolution, that it was unambiguous, and that it made

Friedman, Suder, and Cooke the Firm’s governing authority. Although the Resolution

is not specific to share redemption, we find nothing in the expansive provisions of

Sections 21.101, 21.104, and 21.110 (all included in Subchapter C of Chapter 21) that

require a shareholder agreement to expressly refer to the permissive redemption

options delineated by Section 303.004 or the permissive price-and-terms provision of

Section 301.008. The Firm notified Skeels that it would redeem his shares for zero

dollars, which it was authorized to do under the Resolution.11 As the trial court

concluded, the Resolution “controls” and authorized the Firm’s actions surrounding

Skeels’s dismissal from the Firm. This result was clearly contemplated by the

Legislature in granting corporate founders and owners far-reaching rights to govern

themselves:

Of course, shareholders may also prevent and resolve common disputes
by entering into a shareholders’ agreement to govern their respective
rights and obligations. Importantly the Legislature has granted corporate
founders and owners broad freedom to dictate for themselves the right,
duties, and procedures that govern their relationship with each other and
with the corporation. . . . Again, we note that although [the
corporation’s] owners did not enter into a shareholders’ agreement, they

11
Additionally, the Firm’s articles of incorporation authorized the governing
authority to issue and dispose of shares at its sole discretion.

24
 certainly could have done so, and by doing so could have avoided the
current dispute.

Ritchie, 443 S.W.3d at 881. And the dissent recognizes that the intent of the

Resolution was to avoid the type of dispute we are presented with today.

Skeels contends that the Resolution cannot be considered an enforceable, valid

shareholder agreement because “there is no indication that the shareholders received

any consideration for signing it and ceding their voting power to the founding

shareholders.” As the Firm points out, however, a written agreement presumes

consideration for its execution; thus, Skeels was required to rebut this presumption.

See TLC Hosp., LLC v. Pillar Income Asset Mgmt., Inc., 570 S.W.3d 749, 761 (Tex.

App.—Tyler 2018, pet. denied); City of The Colony v. N. Tex. Mun. Water Dist.,

272 S.W.3d 699, 725 (Tex. App.—Fort Worth 2008, pet. dism’d); Franklin v. Jackson,

847 S.W.2d 306, 310 (Tex. App.—El Paso 1992, writ denied). Skeels did not

specifically plead or otherwise give fair notice that there was a lack of consideration to

support the shareholder agreement in answer to the Firm’s counterclaim or in his

request for declaratory relief.12 See Tex. R. Civ. P. 45(b), 47(a), 93(9). See generally

12
We agree with the Firm that Skeels’s isolated statement at the temporary-
injunction hearing—the Resolution was not a shareholder agreement partially because
“it doesn’t recite any consideration”—did not sufficiently and fairly provide notice
that he was attempting to rebut the consideration presumption, especially because this
statement was untethered to a pleading allegation. And, as noted by the Firm in its
response to Skeels’s motion for further rehearing, Skeels’s consideration argument
“was never really intended to be a focus of Skeels’[s] appeal,” having “received the
attention of two sentences in Skeels’[s] opening brief, a footnote in [the Firm’s]

25
Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000) (“Texas follows

a ‘fair notice’ standard for pleading, which looks to whether the opposing party can

ascertain from the pleading the nature and basic issues of the controversy and what

testimony will be relevant.”).

Skeels urges that a lack of consideration may be argued even in the absence of a

specific, verified pleading because the issue “appear[ed] of record.” Tex. R. Civ. P.

93(9). But because a written contract presumes consideration for its execution, a lack

of consideration for the Resolution would not be apparent from the record and would

require a specific pleading even under Rule 93. See Est. of Griffin v. Sumner, 604 S.W.2d

221, 228 (Tex. App.—San Antonio 1980, writ ref’d n.r.e.); cf. Nootsie, Ltd. v. Williamson

Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996) (“We have not hesitated in

previous cases to hold that parties who do not follow rule 93’s mandate waive any

right to complain about the matter on appeal. . . . Here Nootsie first questioned the

district’s capacity in its briefing before this Court. Therefore, Nootsie has waived its

complaint about capacity.”); ACI Design Build Contractors Inc. v. Loadholt, 605 S.W.3d

515, 519 (Tex. App.—Austin 2020, pet. denied) (applying Nootsie).

Skeels also seems to argue that the Resolution was against public policy and,

therefore, was void under Section 21.101 because it allowed the Firm’s governing

authority—Friedman, Suder, and Cooke—to breach owed fiduciary duties to the

response brief[,] and zero mention in Skeels’[s] reply brief.” [Citations to referenced
filings omitted.]

26
minority shareholders. See, e.g., Tex. Bus. Org. Code Ann. § 21.101(a)(12). However,

the Firm cogently argues that the Resolution did not violate public policy because it

was “an agreement among shareholders: a) who are lawyers specialized in handling

highly technical commercial and intellectual property matters; and b) in which the

three founding shareholders desired the ability to control who among [the] junior

lawyers . . . join and remain in the law firm.” The BOC expressly contemplates

allowing shareholders to mutually and expansively agree to governance and business

matters. See, e.g., id. §§ 21.101, 21.104; Tex. Com. Bank, N.A. v. Grizzle, 96 S.W.3d 240,

250 (Tex. 2002) (“[T]he State’s public policy is reflected in its statutes.”). Merely

because the Resolution was broader than Skeels would now wish does not render it

against public policy under the facts presented. See generally Fortis Benefits v. Cantu, 234

S.W.3d 642, 649 (Tex. 2007) (emphasizing State’s public policy in favor of the right to

contract); Indian Oil Co. v. Bishop Petroleum Inc., 406 S.W.3d 644, 649 (Tex. App.—

Houston [14th Dist.] 2013, pet. denied) (recognizing purpose of rule voiding contracts

that violate public policy is “not to protect or punish either party to the contract, but

to benefit and protect the public”).

We conclude that the Resolution was a compliant shareholder agreement that

broadly allowed the Firm’s governing authority to act on behalf of the Firm, including

the actions taken surrounding Skeels’s discharge from the Firm. We overrule Skeels’s

first and second issues.

27
 2. Attorney’s Fees and Costs

Attorney’s fees and costs are authorized in a UDJA action if such an award is

equitable and just and if the amount is reasonable and necessary. See Tex. Civ. Prac. &

Rem. Code Ann. § 37.009. Whether such an award is equitable and just is a question

of law, and we review a trial court’s equitable-and-just determination for an abuse of

discretion. See City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 646 (Tex. 2013)

(citing Bocquet v. Herring, 972 S.W.2d 19, 20–21 (Tex. 1998)). We also review the

reasonableness and necessity of such awards, which are questions of fact, for an abuse

of discretion. See Morath v. Tex. Taxpayer & Student Fairness Coal., 490 S.W.3d 826, 885

(Tex. 2016). For the following reasons, we sustain Skeels’s fourth issue.

a. Equitable and Just

Skeels contends that the fees-and-costs award was neither equitable nor just

because the Firm’s requested declaratory relief “mirrored Skeels’s own”: “[T]here is

no more blatant abuse of the [U]DJA than requesting declarations that merely mirror

previously-filed affirmative claims, all in an effort to obtain fees that otherwise would

be unrecoverable.”

A “counterclaim that presents no new controversy, but exists solely to pave the

way to an award of attorney’s fees is improper.” Howell v. Mauzy, 899 S.W.2d 690, 706

(Tex. App.—Austin 1994, writ denied). Thus, the UDJA is generally not available to

settle disputes that are already pending. BHP Petroleum Co. v. Millard, 800 S.W.2d 838,

841 (Tex. 1990) (orig. proceeding). But this rule, sometimes referred to as the mirror-

28
image rule, has exceptions. See McGehee v. Endeavor Acquisitions, LLC, 603 S.W.3d 515,

529 (Tex. App.—El Paso 2020, no pet.). Once a plaintiff seeks declaratory relief, for

example, the mirror-image rule does not prevent the trial court from awarding

attorney’s fees even if the defendant’s declaratory counterclaim merely duplicates the

plaintiff’s claim. See Save Our Springs All., Inc. v. Lazy Nine Mun. Util. Dist., 198 S.W.3d

300, 318 (Tex. App.—Texarkana 2006, pet. denied). This exception is founded on the

recognition that a fees-and-costs award under the UDJA may be awarded to a

nonprevailing party:

[B]ecause the UDJA authorizes the trial court to determine that it is
equitable and just to award attorney’s fees to either party, . . . a defendant
that raises a mirror-image counterclaim in response to the plaintiff’s
declaratory-judgment claim cannot be said to have raised the
counterclaim solely to pave the way for an award of otherwise-
impermissible attorney’s fees.

Wash. Square Fin., LLC v. RSL Funding, LLC, 418 S.W.3d 761, 776 (Tex. App.—

Houston [14th Dist.] 2013, pet. denied) (citing Save Our Springs, 198 S.W.3d at 318); see

also Morath, 490 S.W.3d at 885; Ridge Oil Co. v. Guinn Invs., Inc., 148 S.W.3d 143, 162

(Tex. 2004).

Here, the Firm raised its UDJA counterclaim in response to Skeels’s second

amended petition. Because Skeels had already invoked the UDJA against the Firm,

we cannot conclude that the Firm asserted its counterclaim solely to authorize a fees-

and-costs award. Wash. Square, 418 S.W.3d at 776. Thus, the Firm’s request for fees

29
and costs would not be barred under the UDJA and was equitable and just. See

McGehee, 603 S.W.3d at 529.

b. Reasonable and Necessary

(1.) Legal Sufficiency

Skeels next argues that the trial court abused its discretion by awarding the

Firm $100,000 in attorney’s fees and costs related to its successful UDJA counterclaim

because it submitted no evidence to support the awarded amount. If a trial court’s

award of fees and costs under the UDJA is supported by no or insufficient evidence,

it is an abuse of discretion. See Bocquet, 972 S.W.2d at 21; see also Rohrmoos Venture v.

UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 490 (Tex. 2019) (“[W]e evaluate

whether legally sufficient evidence supports that the amount of attorney’s fees

awarded is reasonable and necessary for the legal representation, so that a fee-shifting

award will compensate the prevailing party generally for its losses resulting from the

litigation process.”). The party seeking such fees and costs carries the burden of

proof to support the award. See Yowell v. Granite Operating Co., 620 S.W.3d 335, 354

(Tex. 2020); Kinsel v. Lindsey, 526 S.W.3d 411, 427 (Tex. 2017).

The Firm alone alleged the UDJA counterclaim against Skeels and sought its

fees and costs under that statute. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009; see

also Spicer, Tr. for Est. of Brady v. Maxus Healthcare Partners, LLC, 616 S.W.3d 59, 127–29

(Tex. App.—Fort Worth 2020, no pet.) (op. on reh’g) (recognizing attorney’s-fee

award must be supported by specific, fair-notice pleading that raises grounds to

30
recover fees and costs). One week after the trial court granted declaratory judgment

in favor of the Firm, the trial reconvened (“the reconvened hearing”). From the start

of the reconvened hearing, it was unclear what was being addressed, but the Firm’s

attorney stated that the Firm wanted to put on evidence “about the bad faith nature of

this lawsuit from the beginning . . . and what that’s cost us in terms of attorneys’

fees.” To that end, the Firm proffered one witness: Suder. Suder testified that the

Firm’s attorney, whose hourly rate was $450, sent the Firm a bill for $75,000 in

attorney’s fees, which the Firm paid.13 Suder testified to the tasks the Firm’s attorney

had performed on the Firm’s behalf:

[The Firm’s attorney] attended every hearing. He attended every
deposition. He prepared for those. He prepared for trial. He drafted
letters. He took the lead on some discovery conferences. And a lot of
what he did was review all work product and reviewed it and then edited
so that it could be filed. A lot of it was filed under his signature.

Suder stated with no elaboration that the charged amount was reasonable and

necessary. The Firm also paid its attorney’s costs, which totaled “[a]pproximately

$25,000” and consisted of “[d]eposition costs, copy costs, court reporter fees, our

expert, our rebuttal expert . . . in connection with the response to Mr. Casparis’s

13
Suder also testified that he and Cooke spent “a general estimate” of 200
hours, which would have been billed at $550 per hour, performing legal tasks “on
behalf of the law firm . . . in defense of Mr. Skeels’[s] lawsuit.” We question, as did
the trial court, whether Suder and Cooke could recover attorney’s fees for work they
performed on the Firm’s behalf, as opposed to fees for work they performed pro se
for their own defenses. Suder and Cooke never appeared as attorneys of record for
the Firm. We need not decide that issue today, however, because we conclude that
the Firm’s evidence of its UDJA fees and costs was legally insufficient.

31
report, [and] filing fees.” The trial court’s findings and conclusions referred to this

evidence, and the trial court awarded the Firm $100,000 in attorney’s fees and costs

“related to the granting of the . . . Declaratory Judgment.”14

The record is clear, however, that the Firm’s evidence was not admitted for the

purpose of establishing fees and costs under the UDJA. Throughout Suder’s

testimony, Attorney Two consistently and repeatedly objected to Suder’s testimony

regarding the Firm’s fees and costs, arguing that the Firm had never previously

disclosed its evidence to Skeels. The Firm’s attorney affirmatively disclaimed that the

Firm’s fees-and-costs evidence related to a UDJA award:

[The Firm does not] need [to have disclosed its evidence of fees and
costs] for the purposes of what we’re doing here. This is not something
where we’re going to the jury asking for a finding in connection with a
claim that was made to support attorneys’ fees.

We’re putting on evidence of costs associated with the bringing
and maintaining of this lawsuit which [the Firm] has incurred. So the
Court can take that into consideration if the Court decides to issue a
sanctions order. And if so, how much? That’s just different.

Cooke, during his questioning of Suder, similarly denied that the fees-and-costs

evidence was proffered for any purpose other than sanctions:

[The Firm’s attorney] described our position of why [the disclosure
requirements are] not applicable in this particular case. So it goes to the
issue of this is not a claim for attorneys’ fees tied to a cause of action for

14
The trial court stated at the hearing on Skeels’s motion for new trial or
modified judgment that the $100,000 award was derived from Suder’s testimony that
the Firm’s attorney had charged the Firm “$75,000 worth of time and $25,000 worth
of costs.”

32
 which there is fee recovery. It’s for a different purpose that we’ve said
several times now.

And the trial court expressly admitted the fees-and-costs evidence solely in the

context of sanctions: “With that limitation then, I’ll permit [the Firm’s attorney] to

continue.” Indeed, the amended final judgment indicated that only the sanctions

requests were heard at the reconvened hearing: “[At the reconvened hearing,] the

Court heard evidence and argument on Defendants’ Motions for Sanctions and by

separate document has made corresponding Findings of Fact and Conclusions of Law

related to its order on Defendants’ Motions for Sanctions.”

Later, Skeels clearly pointed out at the new-trial hearing that the issue of the

Firm’s entitlement to attorney’s fees under the UDJA had not been tried at the

reconvened hearing. He referred the trial court to the clear disclaimer by the Firm’s

attorney at the reconvened hearing. On that basis, Skeels asserted that the trial court

should have awarded no fees or costs under the UDJA. Interestingly, the Firm’s

attorney did not assert at the new-trial hearing that the Firm had proved its fees and

costs under the UDJA; he argued that any fees and costs that had been awarded under

the UDJA could be “fix[ed]” by “mov[ing] that over under the blank for sanctions.”15

The Firm’s attorney also represented that the UDJA fees and costs had been included

15
We note that even in the context of attorney’s fees awarded as a sanction,
such amount must be proven to be reasonable through evidence substantiating the
reasonable hours worked and the reasonable hourly rate. See Nath v. Tex. Children’s
Hosp., 576 S.W.3d 707, 709–10 (Tex. 2019).

33
in the Firm’s proposed judgment only because the trial court had asked that the issue

be included, not because the Firm had sought and proved UDJA fees and costs at the

reconvened hearing.

Under these facts, we cannot conclude that evidence specifically adduced and

admitted for the limited purpose of crafting an appropriate sanction could also be

considered lodestar evidence to establish attorney’s fees for a UDJA claim, especially

when that evidence had not been previously disclosed, did not meet the lodestar

considerations, and was explicitly and undisputedly admitted to address only

sanctions. See Peaster ISD v. Glodfelty, 63 S.W.3d 1, 10 (Tex. App.—Fort Worth 2001,

no pet.) (“[E]vidence specifically offered only for a limited purpose remains subject to

its limited purpose; consequently, such evidence is simply not probative evidence of

any other fact.” (citing Davis v. Gale, 330 S.W.2d 610, 612–13 (Tex. 1960))); see also

Tex. R. Evid. 105(a) (requiring trial court to “restrict evidence to its proper scope” if

admissible for one purpose but not admissible for another); Intercont’l Grp. P’ship v. KB

Home Lone Star L.P., 295 S.W.3d 650, 658–59 (Tex. 2009) (holding appellant did not

preserve issue directed to absence of attorney’s-fee award because no jury question

submitted on the issue and because appellant only asserted post-verdict that the issue

could be “fixed by the court”).

(2.) Remedy

Although we have concluded that the evidence was legally insufficient to

support a fees and costs award under the UDJA, we must determine the appropriate

34
remedy. Skeels argues that he is entitled to a take-nothing judgment on the Firm’s

fees-and-costs request under the UDJA or, “at the very least, . . . a remand for a jury

trial.” The Texas Supreme Court has held that when the evidence is legally

insufficient to support a fees-and-costs award under the UDJA, the appropriate

remedy is to remand the issue to the trial court for a redetermination of

reasonableness and necessity. Rohrmoos, 578 S.W.3d at 505–06; see also Long v. Griffin,

442 S.W.3d 253, 256 (Tex. 2014).

We find Rohrmoos distinguishable from the facts presented here. In Rohrmoos

(and in other cases that remand the reasonableness issue to the trial court), the

prevailing party introduced its evidence specifically to prove attorney’s fees based on a

cause of action providing for those fees, not to prove sanctions. Rohrmoos, 578 S.W.3d

at 503–06; see also Kinsel, 526 S.W.3d at 428; Long, 442 S.W.3d at 255–56; El Apple I,

Ltd. v. Olivas, 370 S.W.3d 757, 764 (Tex. 2012); Boyaki v. John M. O’Quinn & Assocs.,

PLLC, No. 01-12-00984-CV, 2014 WL 4855021, at *15–16 (Tex. App.—Houston [1st

Dist.] Sept. 30, 2014, pet. denied) (mem. op.). The Supreme Court found the

evidence legally insufficient to support the awarded amount because the fees evidence

was too generalized to meet the lodestar standard. Rohrmoos, 578 S.W.3d at 505. In

short, the prevailing party’s evidence lacked “the requisite details.” Id. at 506.

Here, however, the Firm proffered no evidence to support its fees and costs

under the UDJA and clearly stated its intention to seek only sanctions, not UDJA

attorney’s fees and costs. The Firm then proffered evidence of what it had paid to

35
defend itself against Skeels’s allegedly groundless claims, which the trial court

admitted only for that limited purpose. The Firm unswervingly disclaimed any intent

to proffer fees-and-costs evidence for purposes of the UDJA, and the Firm did not

dispute that it had never disclosed its attorney’s-fee evidence to Skeels. In the absence

of any evidence of fees and costs, the trial court nevertheless made such an award

under the UDJA.16 The awarded fees and costs do not fail because the evidence lacks

the “requisite details”; the award fails because the Firm offered no evidence at all

while asserting it was not seeking UDJA fees and costs. Id.; cf. Intercont’l Grp.,

295 S.W.3d at 659 (holding appellant waived its right to recover contractual attorney’s

fees because it did not plead for contractual fees, did not seek to amend its pleadings

to do so, and did not submit a jury question on the issue); Spicer, 616 S.W.3d at 129–

30 (reforming judgment to delete fees and costs award because prevailing party did

not plead for such recovery).

When there is a complete absence of a vital fact, the evidence is legally

insufficient, and the appropriate remedy is to render the judgment that should have

been rendered. See City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005); Garza v.

16
At first blush, it would appear that the trial court’s judgment could have been
interlocutory because the issue of fees and costs under the UDJA had not been tried.
But the trial court actually disposed of the fees and costs issue in its findings and
conclusions and in the amended final judgment. Further, the amended final judgment
provided that it had disposed “of all issues and claims among all parties in this
lawsuit.” Thus, the amended final judgment was, in fact, final and appealable. See
Lehmann v. Har-Con Corp., 39 S.W.3d 191, 192–93, 205–06 (Tex. 2001).

36
Alviar, 395 S.W.2d 821, 823 (Tex. 1965); Yarbrough v. Booher, 174 S.W.2d 47, 49 (Tex.

[Comm’n Op.] 1943); Spicer, 616 S.W.3d at 129–30; see also Catalina v. Blasdel,

881 S.W.2d 295, 297 (Tex. 1994) (providing trial court’s findings of fact reviewed for

sufficiency under same standards used to review jury findings). Not only did the Firm

proffer absolutely no evidence of its fees and costs under the UDJA, it also

affirmatively disclaimed that it was requesting fees and costs under the UDJA. In

fact, the Firm even suggested that any fees and costs awarded under the UDJA could

be “move[d]” to a sanctions award as “an easy way to fix” the trial court’s UDJA fees-

and-costs award. Under these unique facts, we conclude that a remand for a

redetermination would be inappropriate in light of the Firm’s affirmative disclaimer of

UDJA fees and costs and of its failure to adduce any evidence on the issue. Cf. Tony

Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 314 (Tex. 2006) (holding remand

appropriate remedy if evidence legally insufficient to support entire unsegregated

attorney’s-fees award because evidence of unsegregated attorney’s fees was

nevertheless some evidence of segregated attorney’s fees); Spicer, 616 S.W.3d at 129–

30 (reforming judgment to delete fees-and-costs award because prevailing party did

not specifically plead for such an award).

B. Exclusion of Valuation Evidence and Denial of Records Examination

Skeels contends that the trial court abused its discretion by excluding both his

and Casparis’s testimony regarding the appropriate valuation for Skeels’s shares.

Because we have determined that the Resolution controlled the Firm’s share

37
redemption, vesting in the Firm’s governing authority the discretion to set the terms

of redemption, valuation evidence was not relevant. See Tex. R. Evid. 401. Thus, the

trial court did not abuse its discretion. We overrule Skeels’s fifth issue.

Similarly, the declaration that the Resolution authorized the Firm’s share

redemption rendered Skeels’s request to examine the Firm’s business records moot.

Skeels’s request was based on his narrower legal interpretation of the scope of the

Resolution, which we have determined is incorrect. We overrule Skeels’s third issue.

C. Sanctions in Favor of Suder and Cooke

Skeels argues that the trial court erred by awarding Suder and Cooke $20,000

($10,000 each) in sanctions based on a lack of good cause for such an award, which he

contends was arbitrarily imposed and excessive.

In its findings and conclusions, the trial court stated that Skeels’s pleadings

violated Chapter 10 and Rule 13 because they were groundless, had been brought in

bad faith, and were asserted to harass Suder, Cooke, and the Firm, which justified a

“substantial” sanctions award. Although the trial court seemed to grant the Firm a

sanctions award for Skeels’s litigation conduct by considering the damages caused to

the Firm, the amended final judgment awarded sanctions only to Suder and Cooke.

The trial court awarded the Firm fees and costs under the UDJA but not sanctions.

1. Standard and Scope of Review

We review the trial court’s sanctions award for an abuse of discretion. See Low

v. Henry, 221 S.W.3d 609, 614, 619–20 (Tex. 2007). We may reverse the trial court’s

38
ruling only if the trial court acted arbitrarily or unreasonably. See id. at 614; see also

Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009). However, we are not

limited by the trial court’s findings and conclusions and must independently review

the entire record to determine whether an abuse occurred. See Am. Flood Rsch., Inc. v.

Jones, 192 S.W.3d 581, 583 (Tex. 2006). The party seeking sanctions bears the burden

to show that the opposing party’s filings were groundless and that the pleadings were

filed in bad faith or for the purpose of harassment. See Nath, 446 S.W.3d at 362–63;

GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 729 (Tex. 1993) (orig. proceeding);

Mobley v. Mobley, 506 S.W.3d 87, 94 (Tex. App.—Texarkana 2016, no pet.).

2. Fair Notice of Grounds for Sanctions

Skeels posits in a preliminary contention that the trial court abused its

discretion by awarding sanctions under Chapter 10 of the Civil Practice and Remedies

Code because Suder and Cooke specifically limited their pleaded sanctions requests to

Rule 13. In their answers, Suder and Cooke, using identical language, cited Rule 13 as

the sole authority for their sanctions requests and harkened back to the language of

Rule 13 to support their requests:

[Skeels’s] suit against [Suder or Cooke] is groundless, brought in bad
faith and for the purpose of harassment, and is without sufficient
foundation in law or fact. Pursuant to Rule 13 of the Texas Rules of
Civil Procedure, [Suder or Cooke] requests that the Court impose
appropriate sanctions against [Skeels] for this frivolous pleading.

The record from the reconvened hearing confirms that the sanctions had been

sought under Rule 13. Although it was unclear what the trial court was specifically

39
hearing—sanctions or UDJA attorney’s fees—the Firm, Suder, and Cooke only

mentioned Chapter 10 (or Rule 10 or Section 10) four times, and then it was only in

passing. The gist of Suder’s and Cooke’s sanctions evidence was directed to the

alleged “groundless” nature of Skeels’s allegations, which is addressed in Rule 13 and

not in Chapter 10. Compare Tex. R. Civ. P. 13, with Tex. Civ. Prac. & Rem. Code Ann.

§ 10.001. Attorney Two consistently referred to the sanctions requests as arising

under Rule 13 and addressed them as such.

We conclude that Suder and Cooke failed to give Skeels fair notice that

sanctions could be imposed under Chapter 10. See Greene v. Young, 174 S.W.3d 291,

300 & n.4 (Tex. App.—Houston [1st Dist.] 2005, pet. denied); see also Bellow v.

McQuade, No. 09-16-00165-CV, 2017 WL 6559053, at *4 (Tex. App.—Beaumont

Dec. 21, 2017, no pet.) (mem. op.) (“A court is not authorized to grant sanctions

under a statute or rule that is not identified in the motion for sanctions.”); cf. Low,

221 S.W.3d at 618 (holding party had fair notice sanctions were sought under Chapter

10 because request cited to Chapter 10 and because “the allegations made and relief

sought are consistent with Chapter 10”). Accordingly, we will review the awarded

sanctions through the lens of Rule 13.

3. Sanctionable Pleadings under Rule 13

Rule 13 authorizes sanctions against an attorney or his client if the attorney

signs a pleading that is either (1) groundless and brought in bad faith or (2) groundless

and brought for the purpose of harassment. Tex. R. Civ. P. 13; Nath, 446 S.W.3d at

40
362–63. A groundless pleading is defined as having “no basis in law or fact and not

warranted by good faith argument for the extension, modification, or reversal of

existing law.” Tex. R. Civ. P. 13; see GTE Commc’ns, 856 S.W.2d at 730. This is more

than merely pursuing a weak case; there must be no arguable basis for the cause of

action. See Falk & Mayfield L.L.P. v. Molzan, 974 S.W.2d 821, 824 (Tex. App.—

Houston [14th Dist.] 1998, pet. denied). In other words, “[g]roundlessness turns on

the legal merits of a claim.” River Oaks Place Council of Co-Owners v. Daly, 172 S.W.3d

314, 322 (Tex. App.—Corpus Christi 2005, no pet.). To determine if a pleading is

groundless, a trial court is to use an objective standard in determining if a party or its

counsel made a reasonable inquiry into the legal and factual bases of his claims at the

time the pleading was filed. See Lake Travis ISD v. Lovelace, 243 S.W.3d 244, 254 (Tex.

App.—Austin 2007, no pet.).

Against Suder and Cooke, Skeels raised a derivative breach-of-fiduciary claim in

his original petition arising from Suder and Cooke’s decision to fire Skeels, which he

alleged was against the Firm’s best financial interests. In his first amended petition,

Skeels retained the derivative claim against Suder and Cooke and added a direct

breach-of-fiduciary claim based on their alleged mismanagement of the shareholder

profit-sharing agreement, which led to an alleged improper and inequitable profit

distribution to Skeels. In his second amended petition, Skeels dropped the fiduciary-

duty claims and alleged, in the alternative to his breach-of-contract claim against the

41
Firm,17 that Suder and Cooke “conspired to obtain an unfair advantage or benefit by

terminating [Skeels’s] employment,” leading to their unjust enrichment based on the

“enhanced” profits occasioned by Skeels’s legal work performed before he was fired

but realized after he was fired.

The trial court found that these claims against Suder and Cooke were

groundless:

The Court finds that the claims asserted by Skeels were groundless and
for an improper purpose. Skeels filed a derivative lawsuit on behalf of
all of the shareholders of [the Firm] against Suder and Cooke, and a
further breach of fiduciary duty claim and mismanagement only to drop
those claims without any explanation or attempt to conduct discovery.
Skeels’[s] deliberate attempt to include confidential information of both
[the Firm] and its clients in the Original Petition and First Amended
Petition (which Skeels personally verified), putting in motion an article in
the Texas Lawyer to repeat these allegations, including the disclosure of
confidential information, improperly seeking and obtaining an ex parte
Temporary Restraining Order and including substantial inflammatory
rhetoric, unnecessary to support any asserted cause of action, but merely
to “play to the press” and embarrass and harass the [Firm, Suder, and
Cooke], support this finding.

. . . The claims in the Second Amended Petition are equally
groundless. . . . There is also no basis to bring a claim for unjust
enrichment against Suder and Cooke without any underlying cause of
action against the individuals against whom that claim was made.

....

. . . Skeels’[s] claims for breach of fiduciary duty, mismanagement,
derivative claims on behalf of all the shareholders of [the Firm] were

The breach-of-contract claim was based on Skeels’s allegation that the Firm
17

fired him in an attempt to avoid paying him his percentage of the business-litigation
team’s net profits for 2016 as had been past practice among the shareholders.

42
 legally deficient at the time they were asserted and were not well
grounded in law or fact. In essence, the “claim” was that Suder and
Cooke breached their fiduciary duties to [the Firm] by firing Skeels, an
“at will” employee. This claim has no merit on its face.

....

. . . Reasonable inquiry would have negated the assertion of [the
unjust-enrichment] allegation from the time it first was asserted.

....

. . . Skeels’[s] Second Amended Original Petition does not assert
unjust enrichment as a remedy against Suder and Cooke tethered to any
cause of action asserted against Suder and Cooke[.]

. . . There is no allegation in Skeels’[s] Second Amended Original
Petition that the corporate veil of [the Firm] should be pierced, or the
type of fraud allegations necessary to make such an allegation (which is
permitted in only . . . limited, exceptional circumstances).

....

. . . Therefore, Skeels’[s] unjust enrichment allegation was legally
deficient at the time it was asserted in Skeels’[s] Second Amended
Original Petition and was not well grounded in law or fact.

a. Fiduciary-Duty Claims

Regarding Skeels’s claims in his original and first amended petitions against

Suder and Cooke, the trial court’s findings focused almost exclusively on Skeels’s

motivations for bringing suit against Suder and Cooke individually—that the claims

were brought in bad faith or for the purpose of harassment—and not on the

purported lack of legal or factual bases for these claims.

43
 Similarly, Suder’s testimony at the reconvened hearing regarding sanctions

explored why Skeels had filed suit, which Suder posited was to embarrass and harass

him and to get money from the Firm. Suder briefly testified that Skeels’s claims

against him and Cooke individually were groundless because they were based on the

allegation that “we fired him on a case he worked on [i.e., Lighting Ballast] so we would

not have to pay him a portion of a fee which was confidential that he disclosed,” and

that the compensation system in the business-litigation group “was that you got paid a

percentage of the entire pot whether you worked on a case or not.” However,

because the Firm considered Skeels to have lost his status as a shareholder at the time

the fee for Lighting Ballast was paid into the business-litigation group’s profits, Skeels

necessarily would not have been entitled to a percentage of those net profits. And

that was the basis of Skeels’s fiduciary-duty claims against Suder and Cooke—by

ensuring Skeels was no longer a shareholder in the Firm, Suder and Cooke denied

Skeels his percentage of the 2016 net profits with no just compensation for his shares,

putting their interests above the Firm’s.

Suder and Cooke attempted to specifically tie Skeels’s fiduciary-duty claims to

the Lighting Ballast fee and contended that Skeels had no more right to that fee than

did any other profit-sharing shareholder in the business-litigation group. Skeels did

not so limit his claims, instead alleging that he impermissibly was deprived of his

shareholder right to the business-litigation group’s net profits, not just of the Lighting

Ballast fee.

44
 In a related finding, the trial court averred that Skeels’s derivative fiduciary-duty

claim was based on the Firm’s firing of an at-will employee—Skeels—which “has no

merit on its face.” But Skeels alleged that his termination was harmful to the Firm

and that this harm, caused by Suder’s and Cooke’s actions, was a breach of their

fiduciary duty to the Firm. This claim was at least a good-faith argument to expand

existing at-will employment law in the context of corporate shareholders. See, e.g.,

Ritchie, 443 S.W.3d at 886 (“There may be situations in which, despite the absence of

an employment agreement, termination of a key employee is improper, for no

legitimate business purpose, intended to benefit the directors or individual

shareholders at the expense of the minority shareholder, and harmful to the

corporation.”). Thus, the claim cannot be considered groundless. See Tex. R. Civ.

P. 13; Lake Travis ISD, 243 S.W.3d at 254–55; McIntrye v. Wilson, 50 S.W.3d 674, 687

(Tex. App.—Dallas 2001, pet. denied).

The trial court also found that because Skeels “drop[ped]” his fiduciary-duty

claims with no explanation and no prior discovery, those claims were groundless

when made. Skeels testified that he understood the fiduciary-duty claims were

dropped from the second amended petition for strategic reasons. Suder and Cooke

posited that the strategic reason was to get Skeels’s “name and picture in the

newspaper” and once that happened, the claims were not pursued. Skeels denied this

assertion. However, a decision to amend a petition and drop a claim does not, on its

own, render the dropped claim groundless when made. See Tex. R. Civ. P. 62

45
(providing that the purpose of an amendment is to add or withdraw something from a

previous pleading “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”); State v.

PR Invs. & Specialty Retailers, Inc., 180 S.W.3d 654, 671 (Tex. App.—Houston [14th

Dist.] 2005) (en banc op. on reh’g) (explaining superseded pleading must have been

signed in violation of Rule 13 to be sanctionable), aff’d, 251 S.W.3d 472 (Tex. 2008); cf.

Mann v. Kendall Home Builders Constr. Partners I, Ltd., 464 S.W.3d 84, 91 (Tex. App.—

Houston [14th Dist.] 2015, no pet.) (recognizing Rule 13 sanctions may be based on

groundless and bad-faith or harassing statements in superseded pleading).

The trial court further found that the fiduciary-duty claims were groundless

because Skeels included “inflammatory” and confidential factual allegations. But

there is no indication that these allegations lacked a factual basis when alleged and,

thus, were groundless. While Skeels’s original and first amended petitions contained

hyperbolic and presumably disconcerting factual allegations, there is no indication that

they were without any basis in fact. Indeed, the trial court pointed to no specific

factual allegation in these pleadings that was affirmatively baseless when alleged.

Skeels’s fiduciary-duty claims, which were not included in his second amended

petition, were not groundless. Indeed, Suder and Cooke do not argue in their

appellate briefing that the fiduciary-duty claims were supported by no legal or factual

basis. Instead, they stress the apparent bad-faith underpinnings for Skeels’s decision

46
to file suit.18 We recognize that the trial court made many factual findings that

Skeels’s motivations for filing suit were to harass the Firm, Suder, and Cooke; were to

force the Firm to either pay him for his shares or give him a larger portion of the

Lighting Ballast fee; and were tied to his “specific animus for Suder.” But as we have

concluded, Skeels’s claims against Suder and Cooke were not groundless as that term

is defined in Rule 13. Opposing litigants rarely have affable relationships, and the

facts leading to litigation generally and necessarily cause the type of hostility relied on

by the trial court to impose sanctions here. But if a plaintiff has a legal and factual

basis for his claims, even if weak, the underlying personal motivations for filing suit

are immaterial under Rule 13. See Nath, 446 S.W.3d at 366 n.14 (noting “bad faith

must be coupled with groundless pleadings to support sanctions under Rule 13”).

b. Unjust-Enrichment Claim

Skeels’s unjust-enrichment claim was pleaded in the alternative to his claim

against the Firm for promissory estoppel, which was based on the Firm’s promise that

he would be included in the profit-sharing plan so long as he was a shareholder, which

Skeels alleged would include the business-litigation group’s net profits for 2016.

Against Suder and Cooke, Skeels alleged that they conspired to fire him in 2015 to

avoid sharing the 2016 net profits, which were “enhanced significantly” by Skeels’s

18
Suder and Cooke argue that the sanction was warranted because Skeels
requested $1 million in damages in his original petition. However, “[t]he amount
requested for damages does not constitute a violation of [Rule 13].” Tex. R. Civ. P.
13.

47
efforts, and he sought his unpaid net profits “as equitable relief.” The trial court

found Skeels’s alternative unjust-enrichment claim “legally deficient” because no other

cause of action was asserted against Suder or Cooke, Skeels did not allege that Suder

and Cooke received a specific amount of money that they should not have received,

and Skeels did not perform services for Suder and Cooke. In short, the trial court

concluded that unjust enrichment, as pleaded by Skeels, “is not a cause of action.”

Unjust enrichment is not a stand-alone cause of action; rather, it is an implied-

contract, equitable measure of damages that addresses a failure to make restitution for

benefits wrongfully received. See Richardson Hosp. Auth. v. Duru, 387 S.W.3d 109, 114

(Tex. App.—Dallas 2012, no pet.); Christus Health v. Quality Infusion Care, Inc.,

359 S.W.3d 719, 722–23 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (op. on

reh’g); Argyle ISD ex rel. Bd. of Trs. v. Wolf, 234 S.W.3d 229, 246 (Tex. App.—Fort

Worth 2007, no pet.). A party may recover under an unjust-enrichment theory if one

party has obtained a benefit from another by fraud, duress, or the taking of unfair

advantage. See HECI Expl. Co. v. Neel, 982 S.W.2d 881, 891 (Tex. 1998); Heldenfels

Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Denco CS Corp. v. Body

Bar, LLC, 445 S.W.3d 863, 876–77 (Tex. App.—Texarkana 2014, no pet.); First Union

Nat’l Bank v. Richmont Cap. Partners I, L.P., 168 S.W.3d 917, 931 (Tex. App.—Dallas

2005, no pet.).

Although Skeels styled his claim as an unjust-enrichment claim, his allegations

viewed as a whole gave fair notice that he was attempting to make an equitable claim

48
for the return of money that he alleged Suder and Cooke had unfairly retained. See

Tex. R. Civ. P. 45(b), 47(a); Brumley v. McDuff, 616 S.W.3d 826, 831 (Tex. 2021);

Richardson Hosp., 387 S.W.3d at 114. Such an equitable claim, falling under the

umbrella of quantum meruit, money had and received, or the like, provides an

independent legal basis for recovery. See, e.g., GRCDallasHomes LLC v. Caldwell,

619 S.W.3d 301, 308 (Tex. App.—Fort Worth 2021, pet. denied); Christus Health,

359 S.W.3d at 722–23; Edwards v. Mid-Continent Office Distribs., L.P., 252 S.W.3d 833,

837 (Tex. App.—Dallas 2008, pet. denied); David Dittfurth, Restitution in Texas: Civil

Liability for Unjust Enrichment, 54 S. Tex. L. Rev. 225, 240–49 (2012). Even so, Skeels’s

unjust-enrichment claim was warranted by a good-faith argument for the extension,

modification, or reversal of existing law that unjust enrichment is not an independent

cause of action. See, e.g., Ritchie, 443 S.W.3d at 882 (“[V]arious common-law causes of

action already exist to address misconduct by corporate directors and officers [such

as] unjust enrichment . . . .”); Heldenfels Bros., 832 S.W.2d at 41 (suggesting “recovery

under the theory of unjust enrichment” available as a cause of action); Pepi Corp. v.

Galliford, 254 S.W.3d 457, 460 (Tex. App.—Houston [1st Dist.] 2007, pet. denied)

(“Unjust enrichment is an independent cause of action.”); City of Harker Heights v. Sun

Meadows Land, Ltd., 830 S.W.2d 313, 318 (Tex. App.—Austin 1992, no writ)

(recognizing equitable remedy of quantum meruit is “grounded in the principle of

unjust enrichment” and is one of “many” legal and equitable remedies developed “to

49
avoid unjust enrichment”);19 Dittfurth, supra, at 250 (“Although the evidence suggests

that the Texas Supreme Court has accepted [an independent unjust-enrichment

claim], that court has not done so with such clarity as to end controversy on the

issue.”). Thus, Skeels’s unjust-enrichment claim as pleaded was not groundless under

Rule 13. See Lake Travis ISD, 243 S.W.3d at 254–56.

4. Summary of Holding Regarding Groundlessness

Skeels’s fiduciary-duty claims and his unjust-enrichment claim were grounded

in law, or at least a good-faith extension of existing law, and were supported by

specifically pleaded facts. None of these facts were found to have been baseless when

alleged. Suder and Cooke failed to meet their burden to objectively establish that

Skeels’s claims against them were groundless as that term is defined in Rule 13.

Accordingly, the trial court abused its discretion by awarding sanctions against Skeels

on the basis that his claims were groundless under Rule 13. And as we indicated

above, because Skeels’s claims were not groundless, we need not determine whether

they were brought in bad faith or for the purpose of harassment. See Nath, 446

S.W.3d at 366 n.14. We sustain Skeels’s sixth issue and reverse the trial court’s award

of sanctions against Skeels.

19
In the trial court, Skeels cited this case as authority for his proposed jury
questions on unjust enrichment against Suder and Cooke.

50
 IV. CONCLUSION

The plain language of the Resolution—a shareholder agreement—broadly

allowed Friedman, Suder, and Cooke as the Firm’s governing authority to take

affirmative action on behalf of the Firm; thus, the trial court did not err by finding

that the Resolution governed the redemption of Skeels’s shares on the terms dictated

by the Firm’s governing authority. This conclusion renders moot Skeels’s arguments

that his valuation evidence was improperly excluded and that he was wrongly denied

his asserted statutory right to examine the Firm’s business records to determine the

value of his shares. However, we conclude that the Firm failed to proffer any

evidence of its UDJA attorney’s fees and costs while affirmatively disclaiming its

pleaded request for such fees and costs. Similarly, the record does not show that

Skeels’s claims were groundless when made, rendering the trial court’s award of

sanctions in favor of Suder and Cooke under Rule 13 an abuse of discretion.

Accordingly, we affirm the trial court’s September 11, 2017 order granting the

Firm’s counterclaim for declaratory judgment and denying Skeels’s claim for

declaratory judgment. See Tex. R. App. P. 43.2(a). We modify portions of the trial

court’s January 7, 2018 amended final judgment to delete the Firm’s award of

attorney’s fees and costs under the UDJA and to delete the award of sanctions in

favor of Suder and Cooke. As modified, we affirm the trial court’s amended final

judgment. See Tex. R. App. P. 43.2(b); Spicer, 616 S.W.3d at 128–29, 132; McIntyre,

50 S.W.3d at 688–89.

51
 /s/ Dana Womack

Dana Womack
Justice

Delivered: October 14, 2021

52