MetroPCS v. Fiesta Cell Phone & Dish Network, Inc. et al

Filing 90

MEMORANDUM AND ORDER DENIED 75 MOTION for Summary Judgment Against Defendant Zawar H. Shah and Incorporated Memorandum of Law (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
METROPCS,
Plaintiff,
v.
FIESTA CELL PHONE & DISH
NETWORK, INC, et al.,
Defendants.

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August 09, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. H-16-3573

MEMORANDUM AND ORDER
This case is before the Court on the Motion for Summary Judgment Against
Defendant Zawar H. Shah (“Motion”) [Doc. # 75] filed by Plaintiff MetroPCS, to
which Defendant Shah filed a Response [Doc. # 87], and Plaintiff filed a Reply [Doc.
# 89]. Having reviewed the record and applied relevant legal authorities, the Court
denies the Motion.
Plaintiff alleges that Defendants engaged in the unauthorized bulk purchase and
resale of MetroPCS wireless handsets. Defendant Fiesta Cell Phone & Dish Network,
Inc. (“Fiesta Cell”) failed to appear and, by Final Judgment [Doc. # 41] entered March
6, 2017, final default judgment was entered against it. Based on the final default
judgment against Fiesta Cell, Plaintiff has now moved for summary judgment against
Shah. The Motion has been fully briefed and is ripe for decision.

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Summary judgment is proper only if the pleadings, depositions, answers to
interrogatories, and admissions in the record, together with any affidavits filed in
support of the motion, demonstrate that there is no genuine issue as to any material
fact, and that the moving party is entitled to judgment as a matter of law. See FED. R.
CIV. P. 56(a); Bacharach v. Suntrust Mortg., Inc., 827 F.3d 432, 434 (5th Cir. 2016).
Where the movant bears the burden of proof at trial on the issues at hand, as is the
case here, it “bears the initial responsibility of demonstrating the absence of a genuine
issue of material fact with respect to those issues.” Transamerica Ins. Co. v. Avenell,
66 F.3d 715, 718 (5th Cir. 1995); see also Brandon v. Sage Corp., 808 F.3d 266, 26970 (5th Cir. 2015); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005).
If the moving party fails to meet its initial burden, the motion for summary judgment
must be denied, regardless of the non-movant’s response. ExxonMobil Corp., 289
F.3d at 375.
Under Texas law, “[i]f the corporate privileges of a corporation are forfeited for
the failure to file a report or pay a tax or penalty, each director or officer of the
corporation is liable for each debt of the corporation that is created or incurred in this
state after the date on which the report, tax, or penalty is due and before the corporate
privileges are revived.” TEX. TAX CODE § 171.255(a). To impose liability on Shah
based on the judgment against Fiesta Cell, MetroPCS must prove that (1) the

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corporate charter was forfeited for noncompliance with the Texas Tax Code; (2) a
judgment exists against Fiesta Cell; and (3) Shah was an officer or director of Fiesta
Cell at the time the corporate debt was incurred. See Am. Star Energy & Minerals
Corp. v. Stowers, 457 S.W.3d 427, 431 (Tex. 2015). In this case, it is undisputed that
Fiesta Cell’s corporate charter was forfeited in October 2004 for failure to comply
with the Texas Tax Code. It is also undisputed that a default judgment exists against
Fiesta Cell.1 There is no evidence, however, that Shah was an officer or director of
Fiesta Cell in March 2017 when default judgment was entered and the debt was
created. Plaintiff’s evidence demonstrates only that Shah was an officer (President)
of Fiesta Cell in April 2011 when the company filed a Texas Franchise Tax Public
Information Report. Plaintiff has not demonstrated that no genuine issue of material
fact exists regarding whether Shah was an officer or director of Fiesta Cell in March
2017. As a result, Plaintiff has not demonstrated that it is entitled to summary
judgment against Shah pursuant to § 171.255(a) of the Texas Tax Code, and it is
hereby
ORDERED that Plaintiff’s Motion for Summary Judgment Against Defendant
Zawar H. Shah [Doc. # 75] is DENIED.

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It is undisputed that the judgment exists, but Shah challenges the validity of the
default judgment.

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9th
SIGNED at Houston, Texas, this _____ day of August, 2017.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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