B Choice Limited v. Epicentre Development Associates, LLC et al

Filing 264

ORDER ADOPTING 252 Memorandum and Recommendations DENYING 217 Sealed Motion, DENYING 208 MOTION for Summary Judgment , DENYING 218 Sealed Motion.(Signed by Judge Gray H Miller) Parties notified.(rkonieczny, 4)

IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
B CHOICE LIMITED,

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Plaintiff,
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v.
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EPICENTRE DEVELOPMENT ASSOCIATES, LLC, §
et al.,
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Defendants.
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CIVIL ACTION H-14-2096

MEMORANDUM OPINION & ORDER
Pending before the court is a memorandum and recommendation (“M&R”) filed by
Magistrate Judge Nancy Johnson. Dkt. 252. The Magistrate Judge considered a motion for
summary judgment filed by defendant Andrea Frattini (“Frattini”) (Dkt. 208), a motion for summary
judgment filed by defendants EpiCentre Development Associates, LLC (“EDA”), EpiCentre
Development Associates II, LLC, Alianza Financial Services, LLC, Alianza Holdings, LLC,
Vanguard Equity Holdings, LLC, Vantage Equity Holdings, LLC, Vantage Financial Services, LLC,
Vantage Plus Corp., Vantage Plus Development Company, LLC, Vantage Realty Holdings VI-X,
LLC, Omar Botero, Jr. (“Botero”), Albert F. Delaney (“Delaney”), and Gilberto Iragorri (“Iragorri”)
(collectively, “EpiCentre Defendants”) (Dkt. 217), and a motion for summary judgment filed by
defendants PLG Consulting, Ltd. (“PLG”) and Pierluigi Guiduzzi (“Guiduzzi”) (Dkt. 218). Having
considered the M&R, the motions, the EpiCentre Defendants’ objections (Dkt. 255), Guiduzzi and
PLG’s objections (Dkt. 256), plaintiff’s responses (Dkts. 259, 260, 261), and other relevant materials
in the record, the court is of the opinion that the EpiCentre Defendants, Guiduzzi, and PLG’s
objections should be OVERRULED and the M&R should be ADOPTED IN FULL.

I. LEGAL STANDARD
A.

Magistrate Judge
For dispositive matters, the court “determine(s) de novo any part of the magistrate judge’s

disposition that has been properly objected to.” See Fed. R. Civ. P. 72(b)(3). “The district judge
may accept, reject, or modify the recommended disposition; receive further evidence; or return the
matter to the magistrate judge with instructions.” Id. “When no timely objection is filed, the court
need only satisfy itself that there is no clear error on the face of the record in order to accept the
recommendation.” Fed. R. Civ. P. 72(b), Advisory Comm. Note (1983). For non-dispositive
matters, the court may set aside the magistrate judge’s order only to the extent that it is “clearly
erroneous or contrary to law.” Fed. R. Civ. P. 72(a).
B.

Motion for Summary Judgment
A court shall grant summary judgment when a “movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(c). “[A] fact is genuinely in dispute only if a reasonable jury could return a verdict for
the non-moving party.” Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir. 2006). The
moving party bears the initial burden of demonstrating the absence of genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552 (1986). If the party meets its
burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue
for trial. Fed. R. Civ. P. 56(e). The court must view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of the non-movant. Envtl. Conservation Org.
v. City of Dall., Tex., 529 F.3d 519, 524 (5th Cir. 2008).
II. OBJECTIONS
The EpiCentre Defendants filed objections to the Magistrate Judge’s M&R, PLG and

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Guiduzzi jointly filed objections to the M&R, and Frattini filed a notice of joinder to both sets of
objections.1 The background and facts of this dispute are detailed in the M&R and incorporated
herein. Dkt. 252.
A.

EpiCentre Defendants’ Objections
The EpiCentre Defendants assert the following objections to the Magistrate Judge’s M&R:

(1) the Magistrate Judge misapplied Texas law in finding that there was an issue of material fact
whether Delaney, Botero, Iragorri, and Vantage Realty owed a fiduciary duty to the plaintiff; (2) the
Magistrate Judge erred in finding a fact issue on the statute of limitations related to the $11,000,000
transaction; and (3) there is no evidence of fraud, and therefore, related claims should be dismissed.
Dkt. 255.
With regard to the breach of fiduciary duty issue, the EpiCentre Defendants challenge the
citation of Allen v. Devon Energy Holdings, LLC, 367 S.W.3d 355 (Tex. App–Houston [1st Dist]
2012, pet. granted, judgm’t vacated, w.r.m.). However, the court finds that the part of the case that
is cited was not overruled, is still good law, and supports the Magistrate Judge’s decision that there
is a genuine issue of material fact for the jury to decide whether some of the EpiCentre Defendants
owed a fiduciary duty to plaintiff. To be clear, the court is aware that, in dicta, another court stated
that as of April 2010, no Texas court had found that fiduciary duties existed between members of
a limited liability company as a matter of law. See Entertainment Merchandising Technology, LLC
v. Houchin, 720 F. Supp.2d 792, 797 (N.D. Tex. 2010). However, that court acknowledged in the
next sentence that whether such fiduciary duty existed was typically a question of fact. Therefore,

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Plaintiff has objected to Frattini’s notice of joinder as untimely filed. As the court adopts
the M&R in full, it need not reach this objection.
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the court agrees with the Magistrate Judge that whether the EpiCentre Defendants owed a fiduciary
duty to plaintiff is an issue of fact for the jury.
The EpiCentre Defendants’ remaining arguments were considered and discussed by the
Magistrate Judge in the M&R, and the court reviewed the Magistrate Judge’s rationale and
conclusions as expressed in the M&R de novo and ADOPTS them in full.
B.

Guiduzzi and PLG’s Objections
Guiduzzi and PLG assert the following objections to the Magistrate Judge’s M&R: (1) the

Magistrate Judge erred in finding a fact issue on the statute of limitations related to the $11,000,000
transaction; (2) the Magistrate Judge erred in finding that there was a fact issue related to the fraud
claims because Guiduzzi did not make any false statements; (3) the claims for civil conspiracy and
RICO should have been dismissed because Guiduzzi and PLG did not enter into an agreement to
commit unlawful acts; and (4) the Magistrate Judge erred in finding that there was a fact issue
whether there was a stock transaction for plaintiff’s statutory fraud claims under Texas Business &
Commerce Code § 27.01. Dkt. 256.
These are all arguments considered and discussed by the Magistrate Judge in the M&R, and
the court reviewed the Magistrate Judge’s rationale and conclusions as expressed in the M&R de
novo and ADOPTS them in full.

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III. CONCLUSION
The EpiCentre Defendants’ and PLG and Guiduzzi’s objections are OVERRULED. The
M&R (Dkt. 252) is ADOPTED IN FULL. The defendants’ respective motions for summary
judgment (Dkts. 208, 217, 218) are DENIED.
It is so ORDERED.
Signed at Houston, Texas on March 29, 2017.

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Gray H. Miller
United States District Judge

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