Preview
FILED
4/30/2024 9:08 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Lafonda Sims DEPUTY
CAUSE NO. DC-21-14304
BANNER RESOURCES, LLC, IN THE DISTRICT COURT
Plaintiff,
v.
PIMURO CAPITAL PARTNERS, LLC, DALLAS COUNTY, TEXAS
BONSAI ENERGY PARTNERS, LLC,
SAGE ROAD ENERGY II, LP, AND G.
JONATHAN PINA,
Defendants. 191? JUDICIAL DISTRICT
DEFENDANTS BONSAI ENERGY PARTNERS, LLC AND SAGE ROAD ENERGY II,
LP’S TRADITIONAL AND NO-EVIDENCE MOTIONS FOR PARTIAL SUMMARY
JUDGMENT
Pursuant to Texas Rules of Civil Procedure 166a and 166a(i), Defendants Bonsai Energy
Partners, LLC (“Bonsai”), and Sage Road Energy II, LP (“Sage Road”) (collectively
“Defendants”) file these Traditional and No-Evidence Motions for Partial Summary Judgment (the
“Motions”) against Plaintiff Banner Resources, LLC’s (“Banner” or “Plaintiff’) knowing
participation in breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and
conspiracy claims against them, and would respectfully show the Court as follows:
DEFENDANTS’ TRADITIONAL MOTION FOR PARTIAL SUMMARY JUDGMENT
L SUMMARY OF THE ARGUMENT
Banner’s claims for knowing participation in breach of fiduciary duty, aiding and abetting
breach of fiduciary duty, and conspiracy should be dismissed on summary judgment for each of
the following reasons.
First, Banner’s allegations against Bonsai and Sage Road are founded on a belief that
Bonsai and Sage Road knowingly participated in Pimuro Capital Partners, LLC (“Pimuro”) and
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G. Jonathan Pina’s (“Pina”) breach of fiduciary duty by usurping a corporate opportunity from
Banner to acquire Banner’s Loan Facility (the “Loan Facility”) from Elm Park Capital
Management, LLC, an agent and representative of Elm Park Credit Opportunities Fund, L.P. and
Elm Park Credit Opportunities Fund (Canada), L.P. (collectively “Elm Park”). The evidence,
however, conclusively disproves at least two elements of Banner’s claim: (1) that Banner had a
corporate opportunity to acquire the Loan Facility from Elm Park, and (2) that Bonsai and Sage
Road had actual knowledge of such an opportunity.
Second, Banner’s allegations against Bonsai and Sage Road depend on the existence of a
fiduciary relationship between Banner and Pina and Pimuro. But Banner cannot prove that it was
in a fiduciary relationship with Pimuro or Pina at the time Bonsai acquired the Loan Facility.
Instead, the summary judgment evidence conclusively proves that Banner and Pimuro or Pina did
not have a fiduciary relationship during the relevant time. Further, Banner has not, and cannot,
prove that Sage Road knew of a fiduciary relationship between Banner and Pina or Pimuro, as
there was no fiduciary relationship.
Third, Banner’s aiding and abetting claim should be dismissed as a matter of law because
Texas does not even recognize such a cause of action.
And fourth, the evidence presented conclusively disproves Banner’s conspiracy claims
against Bonsai and Sage Road because: (1) no fiduciary relationship existed; (2) initiating an
involuntary bankruptcy proceeding against Banner is not a tort; (3) Defendants did not usurp
Banner’s corporate opportunity; and (4) no confidential information was acquired through fraud
or misappropriation.
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IL. SUMMARY JUDGMENT EVIDENCE
Defendants rely on the following summary judgment evidence as if incorporated fully
herein:
Exhibit A G. Jonathan Pina’s Deposition Excerpts (“Pina Dep.”)
Exhibit B Peter Partain’s Deposition Excerpts (“Partain Dep.”)
Exhibit C 2017 Confidentiality Agreement Between Pimuro and
Banner
Exhibit D 2017 Engagement Agreement Between Pimuro and Banner
Exhibit E Statement of Banner’s Payments to Pimuro
Exhibit F 2019 Confidentiality Agreement between Pimuro and
Banner
Exhibit G Banner’s Working Capital Review for Elm Park
Exhibit H Mark Stanger’s Deposition Excerpts (“Stanger Dep.”)
Exhibit I Writ of Garnishment Against Banner
Exhibit J Benjamin Stamets’ Deposition Excerpts (““Stamets Dep.”)
Exhibit K Bonsai Company Agreement and Amendment
Exhibit L Declaration of Benjamin Stamets (“Stamets Declaration’)
Exhibit M Bonsai’s Deed Assignments
Exhibit N Jason Tracton’s Deposition Excerpts (“Tracton Dep.”)
Exhibit O Pimuro’s Letter of Intent to Elm Park
Exhibit P Ryan Smith’s Deposition Excepts (“Smith Dep.”)
Exhibit Q Declaration of G. Jonathan Pina
Exhibit R Declaration of Lorena D. Valle
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Hl. STATEMENT OF UNDISPUTED FACTS
Banner cannot dispute any of the following facts, which support this Motion, most of which
are derived directly from Banner’s Third Amended Petition and Application for Restraining Order
and for Temporary Injunction (“Banner’s Petition”) and from testimony by Banner’s
representatives:
A. Introduction.
This case arises out of a series of events that took place in 2020, culminating with Pina
partnering with Sage Road to form Bonsai to purchase the Loan Facility from Elm Park. Banner
claims it was “betrayed” by Pina and Pimuro following Bonsai’s acquisition of Banner’s working
interests in certain oil and gas leases in Iron County and Tom Green County, Texas (the “Working
Interests”) through foreclosure on the Loan Facility. Pl.’s Third Am. Pet. at {| 22-23. However,
as further explained below, Banner wanted what it could not afford. Banner was in extreme
financial turmoil and could not keep up with its financial obligations under the Loan Facility,
ultimately leading to its default and the foreclosure of the Working Interests.
As a last-ditch effort, Banner brought this lawsuit claiming that its limited interactions with
Pina and Pimuro constituted a fiduciary relationship that required Pina and Pimuro to work solely
on Banner’s behalf without any pay or benefit to Pina or Pimuro. But the summary judgment
evidence is clear—Banner and Pina/Pimuro were not in a fiduciary relationship and Banner could
not acquire the Loan Facility. Thus, Defendants are entitled to summary judgment.
B. Pimuro and Pina’s Relationship with Banner.
Pina, through Pimuro, offers clients a diverse range of consulting services, and those
services are dependent on the scope of each engagement. Exhibit A at p. 28, Pina Dep. 7:2-17,
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8:19-25. Pimuro provided certain transaction advisory services to Banner on a handful of
occasions over the past decade, each time negotiating (and sometimes executing) a new agreement.
Banner engaged Pimuro for the first time in 2014 to help Banner raise capital. Exhibit B
at p. 47, Partain Dep. 83:6—14. Banner agreed to pay Pimuro a fee if Pimuro could successfully
secure a deal with a company that would provide capital to Banner. Jd. at 46 (79:3-8). Banner was
unwilling to formalize an agreement with Pimuro, yet Pimuro introduced Banner to Elm Park, and
Banner obtained a $15 million Loan Facility with Elm Park to finance its operations. /d. at p. 47—
48, 50 (83:11—14, 86:3—6, 97:22-25); Pl.’s Third Am. Pet. at | 14. After execution of the Loan
Facility, based on previous conversations that Pina had with an owner of Banner, Peter Partain
(“Partain”), Pina reached out to Banner to determine Pimuro’s future role within the company. Ex.
B at p. 48, Partain Dep. 88:19-23. However, it was clear that Banner had no intention on
formalizing its relationship with Pimuro. /d. at p. 48-49 (88:21—23, 90:15-17).
Banner engaged Pimuro a second time in 2017 to assist in a potential sale and purchase of
certain oil and gas properties. /d. at p. 49 (93:21—23). This time, Banner required that Pimuro
execute a one-year confidentiality agreement. /d.; Exhibit C at p. 70-76, 2017 Confidentiality
Agreement. Banner and Pimuro also negotiated and executed an engagement agreement that paid
Pimuro a $5,000 monthly retainer fee for at least three months and entitled Pimuro to earn a fee if
Banner successfully closed a transaction with certain specifically identified parties. Ex. B at p. 52,
Partain Dep. 104:20—23, 105:7-12; Exhibit D at p. 77-83, 2017 Engagement Agreement. Banner
paid Pimuro the monthly retainer fee from April to October 2017. Exhibit E at p. 85, Statement
of Banner’s Payments to Pimuro. But because Banner did not consummate a deal through the 2017
Engagement Agreement, Pimuro’s involvement with Banner once again tapered off. Ex. B at p.
53, Partain Dep. 106:22—25, 107:19—24.
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Throughout 2018 and 2019, Pina occasionally checked in with Partain, which Partain
characterized as “open door” interactions. Jd. at p. 53 (108:10—-14, 109:3—7). In October 2019,
Banner authorized Pina and Pimuro to discuss a potential transaction with another company
Pimuro was working with. /d. at p. 54 (112:12—23). In connection with those discussions, Banner
requested that Pimuro once again execute a confidentiality agreement, which Pina reduced to a
one-year term and executed on behalfof Pimuro. /d. at 113:25—114:2; Exhibit F at p. 86-91, 2019
Confidentiality Agreement. At this point, Banner had not paid Pimuro in almost two years. Ex. B
at p. 61, Partain Dep. 176:18—21; Ex. E at p. 85, Statement of Banner’s Payments to Pimuro.
Tellingly, Banner never discussed whether Pimuro would be compensated if a deal was closed
during the term of the 2019 Confidentiality Agreement, nor did it execute an engagement
agreement. Ex. B at p. 61, Partain Dep. 175:17—23, 176:18-21. Ultimately, no transaction was
consummated, Pimuro was not paid, and Pimuro ceased working with Banner.
C. Banner’s Financial Troubles.
By the Spring of 2020, Banner was acutely suffering from the compounding negative
impact of years of poor operating and financial performance. Ex. B at p. 56-57, Partain Dep.
136:6-139:13. With the onset of the COVID-19 pandemic and the resulting drastic collapse of
energy prices, Banner hit a “liquidity wall” exacerbating what was already an untenable financial
position. /d. at 137:8-137:21. Banner could not meet its financial obligations to Elm Park under
the Loan Facility or satisfy its ever-growing liability to vendors and working interest owners. /d.
at 137:8-12, 138:14—139:12. In fact, by May of 2020, Banner owed more than $3.8 million to field
vendors, $400,000 to G&A vendors, $57,000 to landowners, and more than $3 million in payables
to working interest and royalty owners, in addition to the $18.5 million owed under the Loan
Facility, including principal and accrued unpaid interest. Exhibit G at p. 98-99, Banner’s Working
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Capital Review for Elm Park. At this time, Falcon E&P One, LLC, the largest working interest
owner, demanded that Banner resign as the operator of the Working Interests. Exhibit H at p. 111
13, Stanger Dep. 25:24—26:5, 62:14-17. Banner agreed because it was completely insolvent, with
less than $1,000 in cash on hand, and a working capital deficit of more than $8 million. Ex. B at
p. 57, Partain Dep. 134:16-18; Ex. G at p. 98-108, Banner’s Working Capital Review for Elm
Park. Creditors had filed suits against Banner and Banner allowed them to obtain default
judgments. Ex. B at p. 40, 59, 66-67, Partain Dep. 35:10—13, 36:5-6, 159:10—14, 237:23-238:4.
One creditor even obtained a writ of garnishment on one of Banner’s bank accounts, seizing
approximately $3,000. /d. at p. 59 (158:20—159:21); Exhibit I at p. 117-120, Writ of Garnishment
against Banner.
With its complete financial collapse eminent, Banner began discussions with Elm Park on
how Elm Park could proceed to preserve its collateral for the Loan Facility. Ex. B at p. 56, Partain
Dep. 137:13-21. Because the Elm Park Loan Facility was secured by a mortgage on the Working
Interests in 2014, Elm Park had the first priority lien over Banner’s oil and gas assets. /d. at p. 58
(154:20-21).
In May 2020, the outstanding balance on the Loan Facility was approximately $18.5
million, with the loan coming due on June 30, 2020. /d. at p. 64 (211:22—212:11); Ex. G at p. 98,
Banner’s Working Capital Review for Elm Park. At this point, Banner acknowledged that the only
way to clear out the outstanding debts was to take Banner through bankruptcy or to foreclose on
the Elm Park Loan Facility. /d.; Ex. B at p. 56, 65, Partain Dep. 136:17—137:21, 232:10-13. Elm
Park, however, was not interested in funding Banner’s bankruptcy or foreclosing on Banner’s oil
and gas assets. Ex. B at p. 65, Partain Dep. 232:19-21. As an alternative, Banner suggested a
“grand bargain” whereby a new company would be formed to buy the Loan Facility from Elm
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Park and foreclose to wipe out the indebtedness Banner had racked up with the various vendors
and other parties. /d. at p. 39-40 (29:17-25, 35:10-17).
Elm Park was open to selling the Loan Facility to Banner, but Banner did not have the
money to acquire the Loan Facility and even admitted to only having $1,000 in the bank. /d. at
158:20-159:21. But even if Banner had the money to acquire the Loan Facility, Banner knew that
it could not avoid the debts owed to the vendors and contractors; thus, Banner ceased negotiations
with Elm Park. /d. at p. 42-43 (48:14—22, 49:5-50:13). Banner knew that a new company would
need to be formed to acquire the Loan Facility—a new company that did not include Banner or its
three owners (Peter Partain, Mark Stanger, Scott Sherwood). /d. at p. 45 (75:7-16); Exhibit P at
p. 220, Smith Dep. 85:6—14. Thus, Banner could not and would not acquire the Loan Facility.
D. Bonsai’s Purchase of the Loan Facility.
Through his connections with Elm Park independent of Banner, Pina learned that Elm Park
was interested in selling the Loan Facility because Banner could not keep up with its financial
obligations. Pina advised Banner’s President, Peter Partain, that he was interested in acquiring the
Loan Facility on his own account. Ex. A at p. 29, Pina Dep. 112:7—12. In July 2020, Pina reached
out to Sage Road to determine whether Sage Road would be interested in working with him to
acquire the Loan Facility from Elm Park and restructure Banner through bankruptcy or foreclosure.
Exhibit J at p. 125, Stamets Dep. 127:25—128:7. Pina explained that he was negotiating with Elm
Park to purchase the note and that he had signed a confidentiality agreement with Elm Park under
which he obtained Banner’s latest financial information and other due diligence materials from
Elm Park. Ex. J at p. 123, Stamets Dep. 59:5—10. Pina shared those materials with Sage Road as a
potential source of financing in accordance with the terms of Pimuro’s confidentiality agreement
with Elm Park. Exhibit N at p. 207, Tracton Dep. 121:24—25.
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In September 2020, Sage Road formed Bonsai to acquire the Loan Facility from Elm Park.
Exhibit K at p. 131, Bonsai Company Agreement and Amendment. The Company Agreement for
Bonsai was amended on October 6, 2020, to make Pina a member with a 10% ownership interest
and Sage Road a 90% ownership interest. Ex. K at p. 173, Bonsai Company Agreement and
Amendment. Bonsai closed on the acquisition of the Loan Facility from Elm Park on October 13,
2020, for $250,000. Exhibit L at p. 193, Stamets Declaration at § 5. On October 16 and 20, 2020,
respectively, Bonsai recorded in the applicable counties the assignment of all of Elm Park’s right,
title, and interest in and to the Mortgage, Deed of Trust, Security Agreement, Fixture Filing and
Financing Statement dated as of February 10, 2014, that secured the Loan Facility. Exhibit M at
p. 195-200, Bonsai’s Deed Assignments. At the time Bonsai purchased the Loan Facility, the
outstanding principal balance was not less than $16,351,856.43, with accrued and unpaid interest
of $2,800,501.32, for a total of $19,152,357.75. Ex. L at p. 193, Stamets Declaration at 4 5.
Iv. SUMMARY JUDGMENT STANDARD
To obtain a traditional summary judgment, the movant must show that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIv. P. 166a(c);
Larsen v. Carlene Langford & Assocs., Inc., 41 S.W.3d 245, 249 (Tex. 2001); Nixon v. Mr. Prop.
Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A matter is conclusively established if ordinary
minds cannot differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp.
v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 443 (Tex. 1982). A defendant who
conclusively negates at least one element of a plaintiff's cause of action or conclusively establishes
an affirmative defense is entitled to summary judgment. Frost Nat. Bank v. Fernandez, 315 8.W.3d
494, 508 (Tex. 2010).
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Vv. ARGUMENTS & AUTHORITIES
A. Summary judgment should be granted against Banner’s Knowing Participation in
Breach of Fiduciary Duty and Aiding and Abetting Breach of Fiduciary Duty claims.
Banner’s claims for knowing participation in breach of fiduciary duty and aiding and
abetting breach of fiduciary duty against Sage Road and Bonsai are contingent on the existence of
a fiduciary relationship, that Defendants had knowledge of such relationship, and that Defendants
knew they were participating in a breach of such relationship. Banner’s claims are also contingent
on Banner having been able to secure for itself the corporate opportunity it claims Pina and Pimuro
usurped. Because the summary judgment evidence conclusively disproves each of the elements,
Defendants are entitled to summary judgment.
1 Pimuro and Pina were not in a fiduciary relationship with Banner.
To prove knowing participation in a breach of fiduciary duty and aiding and abetting a
breach of fiduciary duty by Bonsai and Sage Road, Banner must prove the existence of a fiduciary
relationship with Pimuro or Pina. Straehla v. AL Glob. Servs., LLC, 619 S.W.3d 795, 804 (Tex.
App.—San Antonio 2020, pet. denied) (holding that the existence of a fiduciary duty is an essential
element of a knowing participation in breach of fiduciary duty cause of action); Super Starr Int'l,
LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829, 847 (Tex. App.—Corpus Christi-Edinburg
2017, no pet.) (holding that when a breach of fiduciary duty claim fails, so should an aiding and
abetting claim).
It is well settled in Texas, that “not every relationship involving a high degree of trust and
confidence rises to the stature of a fiduciary relationship.” Schlumberger Tech. Corp. v. Swanson,
959 S.W.2d 171, 176-77 (Tex. 1997). An informal fiduciary relationship might exist when a party
places a special confidence or trust in another, but courts will not create such a relationship lightly.
Meyer v. Cathey, 167 S.W.3d 327, 331 (Tex. 2005). For example, a fiduciary relationship may be
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encompassed by a financial advisor under certain circumstances. See, e.g., W. Reserve Life Assur.
Co. v. Graben, 233 $.W.3d 360, 374 (Tex. App.—Fort Worth 2007, no pet.). However, the
financial advisor role must extend beyond a simple arms-length business transaction. /d. A court
will only impose a fiduciary or confidential relationship in a business transaction if the relationship
exists prior to, and apart from the transaction. Meyer, 167 S.W.3d at 330-31.
Banner alleges a fiduciary relationship existed because Pimuro and Pina acted as Banner’s
“financial advisor” and “Banner placed a special confidence and trust in them.” /d. However, the
evidence demonstrates that Pimuro and Banner’s relationship did not extend beyond a few,
discrete, arms-length transactions. In 2014, Pimuro and Banner entered their first arms-length
transaction—a transaction Banner did not want to formalize despite Pimuro’s efforts. Ex. B at p.
50, 52-53, Partain Dep. 86:34, 97:22—25. After the transaction was complete, Pimuro was paid a
negotiated fee, and Banner abandoned all prior discussions of continuing any relationship with
Pimuro. Ex. B at p. 50-51, Partain Dep. 88:21—23, 90:15—17. At that time, Pimuro was not formally
engaged as a financial advisor or in any other capacity beyond the 2014 transaction. Ex. B at p.
50, 52, Partain Dep. 86:3-4, 97:22-25.
Pimuro and Banner entered their second arms-length transaction in 2017—the only time
Pimuro was formally engaged as a financial advisor to Banner. Ex. B at p. 52-53, Partain Dep.
95:23-25, 97:22—98:1. The Engagement Agreement specifically stated that Pimuro would advise
Banner with respect to a “strategic transaction to pay-off existing debt obligations and/or acquire
and/or develop oil and gas assets.” Ex. D at p. 77. The Agreement provided Pimuro with a monthly
retainer fee, and an opportunity to earn a fee if a deal was closed with any company specifically
listed in the Agreement. Ex. D at p. 78. The Agreement was in effect for a period of three months
and month-to-month, thereafter. Ex. D at p. 79. Banner paid Pimuro from April to October 2017.
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Ex. E at p. 85, Statement of Banner’s Payments to Pimuro. However, because no deal came from
the Agreement, Banner stopped paying Pimuro and effectively, terminated the Agreement. Ex. B
at p. 55, Partain Dep. 106:22—25, 107:19-24. October 2017, thirty-three months prior to Pina first
contacting Sage Road regarding the Loan Facility, was the last time Banner paid Pimuro. Ex. B at
p. 63, Partain Dep. 176:18-21.
Pimuro and Banner entered their last arms-length agreement on October 12, 2019, when
Banner demanded that Pimuro execute the 2019 Confidentiality Agreement. P1.’s Third Am. Pet.
at § 15; Ex. F at p. 89, 2019 Confidentiality Agreement. The 2019 Confidentiality Agreement
specifies that it is the final agreement between the parties concerning their relationship and that
there are no other oral agreements between them. Ex. F at p. 87-89, 2019 Confidentiality
agreement. Importantly, the 2019 Confidentiality Agreement does not create or impose any
fiduciary duties on Pimuro or Pina. /d. Pimuro and Banner did not execute another engagement
agreement and Pimuro was not paid. Ex. B at p. 63, Partain Dep. 175:11—23. Partain even admitted
that Banner and Pimuro never discussed compensation if a deal closed in 2019 or 2020—at least
two years after Banner last paid Pimuro for its services. Ex. B at p. 63, Partain Dep. 175:17—23,
176:18-21. Thus, the 2019 Confidentiality Agreement was the last agreement Banner entered into
with Pimuro and Pina, and that agreement specifies there are no other agreements, fiduciary or
otherwise, between them.
The evidence thus conclusively establishes that Banner and Pimuro or Pina did not have a
fiduciary relationship, rather each transaction was discrete, and always at arms-length. Banner’s
claims for knowing participation of a breach of fiduciary duty and aiding and abetting a breach of
fiduciary duty fail as a matter of law.
2. Sage Road did not know of the existence of a fiduciary relationship or a breach of one.
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Not only does the evidence show that no fiduciary relationship existed, but it also shows
that Sage Road did not know of a fiduciary relationship or that it was participating in breach of
one. To prove knowing participation in a breach of fiduciary duty or aiding and abetting breach of
a fiduciary duty, Banner must prove the defendant had actual knowledge that a fiduciary
relationship existed, and that breach of such duty is occurring. See First United Pentecostal Ch. v.
Parker, 514 S.W.3d 214, 225 (Tex. 2017) (holding that though defendant helped the fiduciary
cover up actions against plaintiff, there was no evidence that defendant was aware of the
fiduciary’s plans until after they had taken place); see also Franklin D. Azar & Associates, P.C. v.
Bryant, 2019 WL 5390172, at *3 (E.D. Tex. July 30, 2019) (holding that a claim for aiding and
abetting a breach of fiduciary duty requires knowledge and awareness and reasoning that
“knowingly” means that the third party had “actual awareness, at the time of the conduct, that the
fiduciary in question owed the plaintiff a fiduciary duty, and that the fiduciary was breaching that
duty”).
Sage Road did not have actual knowledge at the time of the transaction that there was a
fiduciary duty owed to Banner, let alone a breach of any such duty. Banner admitted that it never
communicated to Sage Road that Pimuro or Pina were fiduciaries. Ex. B at p. 65, Partain Dep.
183:8-11; 184:9-16. In fact, Banner’s allegation that Sage Road knowingly participated in the
alleged breach of fiduciary hinges on its belief that “they should have known [of the fiduciary duty]
. . because of [Pina’s] long-standing relationship with our company,” not that they did know of
the duty. Ex. B at p. 65, Partain Dep. 182:3—-13 (emphasis added).
Contrary to Banner’s assertion, Jason Tracton, a managing director with Sage Road,
testified that Sage Road had prior experience with Pimuro and Pina working for one of Sage Road’s
portfolio companies and knew Pimuro and Pina to be a consultant for various companies and
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worked in other capacities, not just for Banner. Ex. N at p. 205-06, Tracton Dep. 69:25—6, 71:12—
18. Banner even admits that Pina and Pimuro work with many other companies in the oil and gas
industry, further discrediting its allegation that Pimuro and Pina were its fiduciaries. Pl’s. Am. Pet.
at 412.
Tracton also testified that he believed Pimuro was not working with Banner or any of its
representatives to acquire the Loan Facility (Ex. N at p. 204, Tracton Dep. 65:10-13), and that
Sage Road believed Banner was aware that Pimuro and Pina were working on their own. Jd. 66:20-
67:13. Further, Tracton stated that the discussions between Sage Road and Pimuro conveyed that
Pina, acting through Pimuro, was engaging in negotiations with Elm Park for his own benefit. Ex.
N at p. 205, Tracton Dep. 67:15—20. The reasonableness of his beliefis bolstered by the fact that
the letter of intent Pimuro signed with Elm Park includes an express representation that Pimuro
was not working with Banner or any of its owners to acquire the Loan Facility. Exhibit O at p.
211, Pimuro’s Letter of Intent; Ex. N at p. 204, Tracton Dep. 65:10—-13. Benjamin Stamets, the co-
managing partner of Sage Road, likewise testified that Sage Road believed Banner was aware that
Pimuro and Pina working on the transaction for themselves. Ex. J at p. 124, Stamets Dep. 111:10-
16; 111:24-112:1. Thus, Sage Road did not have actual knowledge of the existence of a fiduciary
duty, or an alleged breach of any such duty.
Because the evidence conclusively establishes that Sage Road did not have actual
knowledge of a fiduciary relationship or breach thereof, Banner’s knowing participation in breach
of fiduciary duty and aiding and abetting breach of fiduciary duty claims fail as a matter of law.
See e.g. Cox Tex. Newspapers, L.P. v. Wootten, 59 S.W.3d 717, 722 (Tex. App.—Austin 2001,
pet. denied) (affirming summary judgment on knowing participation claim where there was no
evidence of knowledge of a fiduciary duty); Kastner v. Jenkens & Gilchrist, P.C.,231 S.W.3d 571,
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580 (Tex. App.—Dallas 2007, no pet.) (affirming summary judgment where there was no evidence
of knowing participation in the alleged breach of fiduciary duty).
3. Banner did not have a corporate opportunity to acquire the Loan Facility from Elm Park.
Banner’s knowing participation and aiding and abetting claims further fail because Banner
did not have a corporate opportunity to acquire the Loan Facility from Elm Park, precluding
Banner’s claim that a fiduciary duty was breached. To establish a breach of a fiduciary duty by
usurping a corporate opportunity, Banner must prove that Pimuro or Pina misappropriated a
business opportunity that properly belonged to Banner. Landon v. S & H Mktg Group, Inc., 82
S.W.3d 666, 681 (Tex. App.—Eastland 2002, no pet.). “The business opportunity arises where a
corporation has a legitimate interest or expectancy in and the financial resources to take advantage
of a particular business opportunity.” /d. A corporation’s financial inability to take advantage of a
corporate opportunity or abandonment of the opportunity are viable defenses. Jd.
The evidence is clear that Banner did not have a legitimate interest or expectancy in
acquiring the Loan Facility from Elm Park. Banner’s controller at the time of the alleged breach,
Ryan Smith, testified that a new company needed to be formed to acquire the Loan Facility. Ex. P
at p. 219, Smith Dep. 66:8-15. Banner’s owner, Partain, likewise confirmed that a new company
would need to be formed, but never was. Ex. B at p. 47, Partain Dep. 75: 7-16. The new company
would be the one to acquire the Loan Facility from Elm Park and satisfy Bannet’s liabilities to
other third parties. Ex. P at p. 217, 221 (Smith Dep. 28:15—29:1, 109:16~25). In this transaction,
Banner would not have been paid any money, it would be released from any liabilities related to
the assets, and the assets would be foreclosed. Ex. P at p. 217-18, Smith Dep. 27:13—-24, 63:3-24,
Banner also admitted that it had no legitimate interest in the Loan Facility, as Elm Park attempted
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to negotiate a deal with Banner, but Banner never made an offer to acquire it. Ex. B at p. 43, 45,
Partain Dep. 45:14—23, 51:19-52:2.
The evidence also shows that Banner did not have the financial ability to take advantage
of the opportunity. Even if Banner had made an offer to Elm Park—it did not—Banner could not
have closed the deal because it only had $1,000 in its bank account and approximately $8 million
in payables to vendors and working interest and royalty owners (in addition to the Loan Facility).
Ex. B at p. 61, Partain Dep. 159:18-21; Pet. at § 17. See e.g. Plas-Tex, Inc. v. Jones, No. 03-99-
00286-CV, 2000 WL 632677, at *6 (Tex. App.—Austin May 18, 2000, pet. denied) (affirming
summary judgment finding no opportunity where uncontroverted evidence showed that business
was insolvent and in default). Thus, because Banner did not have a legitimate interest or
expectancy in purchasing the Loan Facility, Banner’s claims fail as a matter of law.
4. Aiding and Abetting Breach of Fiduciary Duty is not a recognized cause of action in Texas.
The Texas Supreme Court has never recognized an independent claim for aiding and
abetting breach of fiduciary duty. First U. Pentecostal Church of Beaumont v. Parker, 514 S.W.3d
214, 224 (Tex. 2017) (“[T]his Court has not expressly decided whether Texas recognizes a cause
of action for aiding and abetting.”). The Fifth Circuit Court of Appeals, for its part, has definitively
held that “no such claim exists in Texas.” Jn re DePuy Orthopaedics, Inc., Pinnacle Hip Implant
Prod. Liab. Litig., 888 F.3d 753, 782 (5th Cir. 2018). This has led the Dallas Court of Appeals to
likewise repeatedly refuse to recognize aiding and abetting claims. See Gamble v. Anesthesiology
Associates, P.S.C., No. 05-20-01024-CV, 2022 WL 2865877, at *7 (Tex. App.—Dallas July 21,
2022, no pet.) (“This Court has relied on Parker and Fifth Circuit authority in refusing to recognize
such claims.”); BioTE Med., LLC v. Medcalf, No. 05-20-00661-CV, 2022 WL 18007665, at *14
(Tex. App.—Dallas Dec. 30, 2022, no pet.); Ahmed v. Bank of Whittier, N.A., No. 05-21-00058-
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CV, 2022 WL 1401432, at *6 (Tex. App.—Dallas May 4, 2022, pet. denied); Hill v. Keliher, No.
05-20-00644-CV, 2022 WL 213978, at *10 (Tex. App.—Dallas Jan. 25, 2022, pet. denied); accord
Hampton v. Equity Tr. Co., 607 S.W.3d 1, 5 (Tex. App.—Austin 2020, pet. denied) (noting that
courts of appeal should not recognize new causes of action and holding that “[i]n the absence of
recognition by the Supreme Court of Texas or the Legislature, we conclude that a common-law
cause of action for aiding and abetting does not exist in Texas”). Because it is not a recognized
cause of action in Texas, Defendants are entitled to judgment as a matter of law as to Banner’s
aiding and abetting claim.
B. Summary judgment should be granted on Banner’s conspiracy claims against Bonsai and
Sage Road.
Banner’s claims for conspiracy fail because the evidence presented conclusively disproves
at least one essential element of its claims against Bonsai and Sage Road. To prevail in a conspiracy
cause of action, Banner must show that there was: “(1) two or more persons; (2) an object to be
accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful,
overt acts; and (5) damages as the proximate result.” Massey v. Armco Steel Co., 652 S.W.2d 932,
934 (Tex. 1983). Conspiracy is not an independent cause of action and is contingent on a
defendant’s participation in an underlying tort. Agar Corp., Inc. v. Electro Circuits Int'l, LLC, 580
S.W.3d 136, 142 (Tex. 2019). Conspiracy requires specific intent, and a party cannot agree,
expressly or tacitly, to commit a wrong about which they have no knowledge. Firestone Steep
Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996).
1 Pimuro/Pina did not owe Banner a fiduciary duty.
As explained above, the testimony provided by Banner’s owners, Peter Partain and Mark
Stanger, conclusively establishes that no fiduciary duty existed, no breach of fiduciary duty
occurred, and Sage Road did not know of a fiduciary relationship or breach thereof.
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Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment
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During his deposition, Partain could not articulate when any alleged special relationship
between Pimuro/Pina and Banner began. Ex. B at p. 39, Partain Dep. 12:9—25. Partain could not
testify under what circumstances any alleged special relationship would terminate. Ex. B at p. 40,
62, Partain Dep. 20:13—22, 173:19—25. Partain even admitted that Banner had not paid Pimuro or
Pina a dime for more than two years prior to the alleged breach. Ex. B at p. 63, Partain Dep.
176:18-21.
Further, Sage Road could not have conspired to cause or induce a breach of fiduciary duty
because it did not know of a fiduciary duty. Partain testified that Banner never communicated to
Sage Road that Pimuro or Pina were fiduciaries of Banner. Ex. B at p. 65, Partain Dep. 183:8—11;
184:9-16. Instead, Partain just believes that Sage Road “should have known” of the fiduciary
relationship. Ex. B at p. 65, Partain Dep. 181:24—182:6. Conspiracy, however, requires “specific
intent to agree to accomplish something unlawful or to accomplish something lawful by unlawful
means.” JnteliTrac, Inc. v. UMB Fin. Corp., No. 05-22-00635-CV, 2024 WL 1171383, at *10
(Tex. App.—Dallas Mar. 19, 2024, no pet. h.) (affirming summary judgment where, as here,
evidence of a meeting of the minds was lacking). Because Sage Road could not have agreed to
commit a wrong it had no knowledge of, the Court should grant summary judgment as to this
claim.
2. The evidence conclusively disproves Banner’s claim that Sage Road and Bonsai conspired
to usurp Banner’s opportunities.
The evidence also conclusively disproves that Banner’s claim that Sage Road and Bonsai
conspired to usurp Banner’s opportunities because Banner did not have any corporate
opportunities. As explained above, Banner did not have a legitimate interest or expectancy in
acquiring the Loan Facility from Elm Park or the financial means to do so. The evidence further
established that, although Elm Park was willing to engage in negotiations with Banner for the Loan
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Facility, Banner was unwilling to formally negotiate a buy-out of the Loan Facility and did not
make any formal offer to Elm Park. Instead, the only possible path forward was for Banner’s
principals form a new company to purchase the Loan Facility. Ex. P at p. 219, Smith Dep. 66:8—
15. Thus, Defendants are also entitled to summary judgment as to this claim. See InteliTrac, Inc.,
2024 WL 1171383, at *10.
3. Banner’s claim against Bonsai and Sage Road for conspiracy to improperly force Banner
into bankruptcy fails because no unlawful or overt act occurred.
Banner’s claim for conspiracy to improperly force Banner into bankruptcy fails as a matter
of law because the underlying tort does not legally exist. If an underlying tort against a defendant
does not exist in Texas, the plaintiff cannot have a conspiracy claim against the defendant for that
underlying tort. Chu v. Hong, 249 $.W.3d 441, 447 (Tex. 2008).
Banner misses a key issue—involuntary bankruptcy is not a tort. The Bankruptcy Code
under Section 303 specifically permits involuntary bankruptcy. 11 U.S. Code §303(a). Bonsai, as
a creditor of Banner, was permitted to file an involuntary case against Banner. As Partain admits,
there was nothing wrongful about demanding that Banner file for bankruptcy relief. Ex. B at p. 46,
Partain Dep. 60:19—25. And the evidence also shows that Banner’s only options in 2020 were to
either file for bankruptcy or undergo a foreclosure on the Loan Facility. Ex. B at p. 58, Partain
Dep. 136:17—137:5. Thus, Banner’s claim for conspiracy to force Banner into bankruptcy fails as
a matter of law.
4, The evidence presented disproves that Sage Road and Bonsai conspired to misappropriate
Banner’s trade secrets or commit fraud.
Banner’s conspiracy claim against Sage Road and Bonsai for misappropriation of trade
secrets and fraud fail because the evidence presented establishes that no trade secrets were
misappropriated. Banner’s claim for misappropriation of trade secrets hinges on the allegation that
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Pina and Pimuro made false representations regarding Banner’s confidential information and that
the information was used to “evaluate Banner’s plan before completing it for their own personal
advantage, and to benefit Bonsai.” Pl.’s Third Am. Pet at §§ 17, 37. However, the evidence
presented demonstrates that the confidential information that Sage Road received from Pimuro in
relation to the acquisition of the Loan Facility came lawfully from Elm Park and was subject to a
confidentiality agreement executed between Pimuro and Elm Park. Ex. N at p. 208, Tracton Dep.
187:1—3. Pimuro acted through guidance of Elm Park to acquire information from Banner. Ex. A
at p. 32, Pina Dep. 216:4—13. That information was only requested in connection with the potential
transaction. Ex. A at p. 31, Pina Dep. 168:18-170:16. Because the evidence establishes that no
information was misappropriated, this claim also fail as a matter of law.
DEFENDANTS’ NO-EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT
I LEGAL STANDARD
“In a no-evidence summary judgment motion, the defendant alleges that adequate time for
discovery has passed and that the plaintiff has failed to produce any evidence to support one or
more essential elements of a claim for which the plaintiff would bear the burden of proof at
trial.” EP Hotel Partners, LP v. City of El Paso, 527 S.W.3d 646 (Tex. App.—El Paso 2017, no
pet.) (citing KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015)). A no-evidence motion
for summary judgment is “essentially a motion for a pretrial directed verdict: the party without the
burden of proof contends that no evidence supports one or more essential elements of the non-
movant’s claim.” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003) (citing Tex.
R. Civ. P. 166a(i)). When a no-evidence summary judgment motion is presented under Rule
166a(i), the movant does not bear the burden of establishing each element of its own claim or
defense. Burroughs v. APS Intern., Ltd., 93 S.W.3d 155, 159 (Tex. App.—Houston [14th Dist.]
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Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment
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2002, pet. denied). Rather, the trial court must grant the motion unless the non-movant meets its
burden of raising a genuine issue of material fact on each challenged element. Nguyen v. Bank of
Am., N.A., 506 S.W.3d 620, 623 (Tex. App.—Houston [Ist Dist.] 2016, pet. denied) (citing
Boerjan v. Rodriguez, 436 S.W.3d 307, 312 (Tex. 2014)).
The trial court must grant a motion for no-evidence summary judgment where “(a) there is
a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to
prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the
opposite of the vital fact.” King Ranch, Inc., 118 S.W.3d at 751 (quotation omitted).
I. ARGUMENT
A. Defendants are entitled to No-Evidence Summary Judgment as to Plaintiff's Knowing
Participation in Breach of Fiduciary Duty and Aiding and Abetting Breach of
Fiduciary Duty Claims
A claim for knowing participation in a breach of fiduciary duty requires (1) the existence
of a fiduciary duty owed by a third party to the plaintiff; (2) the defendant knew of the fiduciary
relationship; and (3) the defendant was aware of his participation in the third party’s breach of its
duty. Darocy v. Abildtrup, 345 S.W.3d 129, 138 (Tex. App.—Dallas 2011, no pet.).
The Texas Supreme Court has never recognized an independent claim for aiding and
abetting breach of fiduciary duty. First U. Pentecostal Church of Beaumont v. Parker, 514 S.W.3d
214, 224 (Tex. 2017); see also Gamble v. Anesthesiology Associates, P.S.C., No. 05-20-01024-
CV, 2022 WL 2865877, at *7 (Tex. App.—Dallas July 21, 2022, no pet.) (noting that the Dallas
Court of Appeals has refused to recognize aiding and abetting claims). That said, if such a claim
exists, its elements are likely (1) the primary actor committed a tort; (2) the defendant had
knowledge that the primary actor’s conduct constituted a tort; (3) defendant had intent to assist the
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primary actor; (4) defendant gave the primary actor assistance or encouragement; and (5)
defendant’s conduct was a substantial factor in causing the tort. Immobiliere Jeuness
Establissement v. Amegy Bank Nat'l Ass’n, 525 S.W.3d 875, 882 (Tex. App.—Houston [14th
Dist.] 2017, no pet.).
Thus, aiding and abetting breach of fiduciary duty claims (to the extent they exist) share at
least three common elements with knowing participation claims: (1) evidence of a breach of a
fiduciary duty, (2) an awareness of the underlying wrong, and (3)
Preview
FILED 4/30/2024 9:08 PM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Lafonda Sims DEPUTY CAUSE NO. DC-21-14304 BANNER RESOURCES, LLC, IN THE DISTRICT COURT Plaintiff, v. PIMURO CAPITAL PARTNERS, LLC, DALLAS COUNTY, TEXAS BONSAI ENERGY PARTNERS, LLC, SAGE ROAD ENERGY II, LP, AND G. JONATHAN PINA, Defendants. 191? JUDICIAL DISTRICT DEFENDANTS BONSAI ENERGY PARTNERS, LLC AND SAGE ROAD ENERGY II, LP’S TRADITIONAL AND NO-EVIDENCE MOTIONS FOR PARTIAL SUMMARY JUDGMENT Pursuant to Texas Rules of Civil Procedure 166a and 166a(i), Defendants Bonsai Energy Partners, LLC (“Bonsai”), and Sage Road Energy II, LP (“Sage Road”) (collectively “Defendants”) file these Traditional and No-Evidence Motions for Partial Summary Judgment (the “Motions”) against Plaintiff Banner Resources, LLC’s (“Banner” or “Plaintiff’) knowing participation in breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and conspiracy claims against them, and would respectfully show the Court as follows: DEFENDANTS’ TRADITIONAL MOTION FOR PARTIAL SUMMARY JUDGMENT L SUMMARY OF THE ARGUMENT Banner’s claims for knowing participation in breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and conspiracy should be dismissed on summary judgment for each of the following reasons. First, Banner’s allegations against Bonsai and Sage Road are founded on a belief that Bonsai and Sage Road knowingly participated in Pimuro Capital Partners, LLC (“Pimuro”) and PAGE 1 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 G. Jonathan Pina’s (“Pina”) breach of fiduciary duty by usurping a corporate opportunity from Banner to acquire Banner’s Loan Facility (the “Loan Facility”) from Elm Park Capital Management, LLC, an agent and representative of Elm Park Credit Opportunities Fund, L.P. and Elm Park Credit Opportunities Fund (Canada), L.P. (collectively “Elm Park”). The evidence, however, conclusively disproves at least two elements of Banner’s claim: (1) that Banner had a corporate opportunity to acquire the Loan Facility from Elm Park, and (2) that Bonsai and Sage Road had actual knowledge of such an opportunity. Second, Banner’s allegations against Bonsai and Sage Road depend on the existence of a fiduciary relationship between Banner and Pina and Pimuro. But Banner cannot prove that it was in a fiduciary relationship with Pimuro or Pina at the time Bonsai acquired the Loan Facility. Instead, the summary judgment evidence conclusively proves that Banner and Pimuro or Pina did not have a fiduciary relationship during the relevant time. Further, Banner has not, and cannot, prove that Sage Road knew of a fiduciary relationship between Banner and Pina or Pimuro, as there was no fiduciary relationship. Third, Banner’s aiding and abetting claim should be dismissed as a matter of law because Texas does not even recognize such a cause of action. And fourth, the evidence presented conclusively disproves Banner’s conspiracy claims against Bonsai and Sage Road because: (1) no fiduciary relationship existed; (2) initiating an involuntary bankruptcy proceeding against Banner is not a tort; (3) Defendants did not usurp Banner’s corporate opportunity; and (4) no confidential information was acquired through fraud or misappropriation. PAGE 2 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 IL. SUMMARY JUDGMENT EVIDENCE Defendants rely on the following summary judgment evidence as if incorporated fully herein: Exhibit A G. Jonathan Pina’s Deposition Excerpts (“Pina Dep.”) Exhibit B Peter Partain’s Deposition Excerpts (“Partain Dep.”) Exhibit C 2017 Confidentiality Agreement Between Pimuro and Banner Exhibit D 2017 Engagement Agreement Between Pimuro and Banner Exhibit E Statement of Banner’s Payments to Pimuro Exhibit F 2019 Confidentiality Agreement between Pimuro and Banner Exhibit G Banner’s Working Capital Review for Elm Park Exhibit H Mark Stanger’s Deposition Excerpts (“Stanger Dep.”) Exhibit I Writ of Garnishment Against Banner Exhibit J Benjamin Stamets’ Deposition Excerpts (““Stamets Dep.”) Exhibit K Bonsai Company Agreement and Amendment Exhibit L Declaration of Benjamin Stamets (“Stamets Declaration’) Exhibit M Bonsai’s Deed Assignments Exhibit N Jason Tracton’s Deposition Excerpts (“Tracton Dep.”) Exhibit O Pimuro’s Letter of Intent to Elm Park Exhibit P Ryan Smith’s Deposition Excepts (“Smith Dep.”) Exhibit Q Declaration of G. Jonathan Pina Exhibit R Declaration of Lorena D. Valle PAGE 3 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Hl. STATEMENT OF UNDISPUTED FACTS Banner cannot dispute any of the following facts, which support this Motion, most of which are derived directly from Banner’s Third Amended Petition and Application for Restraining Order and for Temporary Injunction (“Banner’s Petition”) and from testimony by Banner’s representatives: A. Introduction. This case arises out of a series of events that took place in 2020, culminating with Pina partnering with Sage Road to form Bonsai to purchase the Loan Facility from Elm Park. Banner claims it was “betrayed” by Pina and Pimuro following Bonsai’s acquisition of Banner’s working interests in certain oil and gas leases in Iron County and Tom Green County, Texas (the “Working Interests”) through foreclosure on the Loan Facility. Pl.’s Third Am. Pet. at {| 22-23. However, as further explained below, Banner wanted what it could not afford. Banner was in extreme financial turmoil and could not keep up with its financial obligations under the Loan Facility, ultimately leading to its default and the foreclosure of the Working Interests. As a last-ditch effort, Banner brought this lawsuit claiming that its limited interactions with Pina and Pimuro constituted a fiduciary relationship that required Pina and Pimuro to work solely on Banner’s behalf without any pay or benefit to Pina or Pimuro. But the summary judgment evidence is clear—Banner and Pina/Pimuro were not in a fiduciary relationship and Banner could not acquire the Loan Facility. Thus, Defendants are entitled to summary judgment. B. Pimuro and Pina’s Relationship with Banner. Pina, through Pimuro, offers clients a diverse range of consulting services, and those services are dependent on the scope of each engagement. Exhibit A at p. 28, Pina Dep. 7:2-17, PAGE 4 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 8:19-25. Pimuro provided certain transaction advisory services to Banner on a handful of occasions over the past decade, each time negotiating (and sometimes executing) a new agreement. Banner engaged Pimuro for the first time in 2014 to help Banner raise capital. Exhibit B at p. 47, Partain Dep. 83:6—14. Banner agreed to pay Pimuro a fee if Pimuro could successfully secure a deal with a company that would provide capital to Banner. Jd. at 46 (79:3-8). Banner was unwilling to formalize an agreement with Pimuro, yet Pimuro introduced Banner to Elm Park, and Banner obtained a $15 million Loan Facility with Elm Park to finance its operations. /d. at p. 47— 48, 50 (83:11—14, 86:3—6, 97:22-25); Pl.’s Third Am. Pet. at | 14. After execution of the Loan Facility, based on previous conversations that Pina had with an owner of Banner, Peter Partain (“Partain”), Pina reached out to Banner to determine Pimuro’s future role within the company. Ex. B at p. 48, Partain Dep. 88:19-23. However, it was clear that Banner had no intention on formalizing its relationship with Pimuro. /d. at p. 48-49 (88:21—23, 90:15-17). Banner engaged Pimuro a second time in 2017 to assist in a potential sale and purchase of certain oil and gas properties. /d. at p. 49 (93:21—23). This time, Banner required that Pimuro execute a one-year confidentiality agreement. /d.; Exhibit C at p. 70-76, 2017 Confidentiality Agreement. Banner and Pimuro also negotiated and executed an engagement agreement that paid Pimuro a $5,000 monthly retainer fee for at least three months and entitled Pimuro to earn a fee if Banner successfully closed a transaction with certain specifically identified parties. Ex. B at p. 52, Partain Dep. 104:20—23, 105:7-12; Exhibit D at p. 77-83, 2017 Engagement Agreement. Banner paid Pimuro the monthly retainer fee from April to October 2017. Exhibit E at p. 85, Statement of Banner’s Payments to Pimuro. But because Banner did not consummate a deal through the 2017 Engagement Agreement, Pimuro’s involvement with Banner once again tapered off. Ex. B at p. 53, Partain Dep. 106:22—25, 107:19—24. PAGE 5 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Throughout 2018 and 2019, Pina occasionally checked in with Partain, which Partain characterized as “open door” interactions. Jd. at p. 53 (108:10—-14, 109:3—7). In October 2019, Banner authorized Pina and Pimuro to discuss a potential transaction with another company Pimuro was working with. /d. at p. 54 (112:12—23). In connection with those discussions, Banner requested that Pimuro once again execute a confidentiality agreement, which Pina reduced to a one-year term and executed on behalfof Pimuro. /d. at 113:25—114:2; Exhibit F at p. 86-91, 2019 Confidentiality Agreement. At this point, Banner had not paid Pimuro in almost two years. Ex. B at p. 61, Partain Dep. 176:18—21; Ex. E at p. 85, Statement of Banner’s Payments to Pimuro. Tellingly, Banner never discussed whether Pimuro would be compensated if a deal was closed during the term of the 2019 Confidentiality Agreement, nor did it execute an engagement agreement. Ex. B at p. 61, Partain Dep. 175:17—23, 176:18-21. Ultimately, no transaction was consummated, Pimuro was not paid, and Pimuro ceased working with Banner. C. Banner’s Financial Troubles. By the Spring of 2020, Banner was acutely suffering from the compounding negative impact of years of poor operating and financial performance. Ex. B at p. 56-57, Partain Dep. 136:6-139:13. With the onset of the COVID-19 pandemic and the resulting drastic collapse of energy prices, Banner hit a “liquidity wall” exacerbating what was already an untenable financial position. /d. at 137:8-137:21. Banner could not meet its financial obligations to Elm Park under the Loan Facility or satisfy its ever-growing liability to vendors and working interest owners. /d. at 137:8-12, 138:14—139:12. In fact, by May of 2020, Banner owed more than $3.8 million to field vendors, $400,000 to G&A vendors, $57,000 to landowners, and more than $3 million in payables to working interest and royalty owners, in addition to the $18.5 million owed under the Loan Facility, including principal and accrued unpaid interest. Exhibit G at p. 98-99, Banner’s Working PAGE 6 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Capital Review for Elm Park. At this time, Falcon E&P One, LLC, the largest working interest owner, demanded that Banner resign as the operator of the Working Interests. Exhibit H at p. 111 13, Stanger Dep. 25:24—26:5, 62:14-17. Banner agreed because it was completely insolvent, with less than $1,000 in cash on hand, and a working capital deficit of more than $8 million. Ex. B at p. 57, Partain Dep. 134:16-18; Ex. G at p. 98-108, Banner’s Working Capital Review for Elm Park. Creditors had filed suits against Banner and Banner allowed them to obtain default judgments. Ex. B at p. 40, 59, 66-67, Partain Dep. 35:10—13, 36:5-6, 159:10—14, 237:23-238:4. One creditor even obtained a writ of garnishment on one of Banner’s bank accounts, seizing approximately $3,000. /d. at p. 59 (158:20—159:21); Exhibit I at p. 117-120, Writ of Garnishment against Banner. With its complete financial collapse eminent, Banner began discussions with Elm Park on how Elm Park could proceed to preserve its collateral for the Loan Facility. Ex. B at p. 56, Partain Dep. 137:13-21. Because the Elm Park Loan Facility was secured by a mortgage on the Working Interests in 2014, Elm Park had the first priority lien over Banner’s oil and gas assets. /d. at p. 58 (154:20-21). In May 2020, the outstanding balance on the Loan Facility was approximately $18.5 million, with the loan coming due on June 30, 2020. /d. at p. 64 (211:22—212:11); Ex. G at p. 98, Banner’s Working Capital Review for Elm Park. At this point, Banner acknowledged that the only way to clear out the outstanding debts was to take Banner through bankruptcy or to foreclose on the Elm Park Loan Facility. /d.; Ex. B at p. 56, 65, Partain Dep. 136:17—137:21, 232:10-13. Elm Park, however, was not interested in funding Banner’s bankruptcy or foreclosing on Banner’s oil and gas assets. Ex. B at p. 65, Partain Dep. 232:19-21. As an alternative, Banner suggested a “grand bargain” whereby a new company would be formed to buy the Loan Facility from Elm PAGE 7 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Park and foreclose to wipe out the indebtedness Banner had racked up with the various vendors and other parties. /d. at p. 39-40 (29:17-25, 35:10-17). Elm Park was open to selling the Loan Facility to Banner, but Banner did not have the money to acquire the Loan Facility and even admitted to only having $1,000 in the bank. /d. at 158:20-159:21. But even if Banner had the money to acquire the Loan Facility, Banner knew that it could not avoid the debts owed to the vendors and contractors; thus, Banner ceased negotiations with Elm Park. /d. at p. 42-43 (48:14—22, 49:5-50:13). Banner knew that a new company would need to be formed to acquire the Loan Facility—a new company that did not include Banner or its three owners (Peter Partain, Mark Stanger, Scott Sherwood). /d. at p. 45 (75:7-16); Exhibit P at p. 220, Smith Dep. 85:6—14. Thus, Banner could not and would not acquire the Loan Facility. D. Bonsai’s Purchase of the Loan Facility. Through his connections with Elm Park independent of Banner, Pina learned that Elm Park was interested in selling the Loan Facility because Banner could not keep up with its financial obligations. Pina advised Banner’s President, Peter Partain, that he was interested in acquiring the Loan Facility on his own account. Ex. A at p. 29, Pina Dep. 112:7—12. In July 2020, Pina reached out to Sage Road to determine whether Sage Road would be interested in working with him to acquire the Loan Facility from Elm Park and restructure Banner through bankruptcy or foreclosure. Exhibit J at p. 125, Stamets Dep. 127:25—128:7. Pina explained that he was negotiating with Elm Park to purchase the note and that he had signed a confidentiality agreement with Elm Park under which he obtained Banner’s latest financial information and other due diligence materials from Elm Park. Ex. J at p. 123, Stamets Dep. 59:5—10. Pina shared those materials with Sage Road as a potential source of financing in accordance with the terms of Pimuro’s confidentiality agreement with Elm Park. Exhibit N at p. 207, Tracton Dep. 121:24—25. PAGE 8 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 In September 2020, Sage Road formed Bonsai to acquire the Loan Facility from Elm Park. Exhibit K at p. 131, Bonsai Company Agreement and Amendment. The Company Agreement for Bonsai was amended on October 6, 2020, to make Pina a member with a 10% ownership interest and Sage Road a 90% ownership interest. Ex. K at p. 173, Bonsai Company Agreement and Amendment. Bonsai closed on the acquisition of the Loan Facility from Elm Park on October 13, 2020, for $250,000. Exhibit L at p. 193, Stamets Declaration at § 5. On October 16 and 20, 2020, respectively, Bonsai recorded in the applicable counties the assignment of all of Elm Park’s right, title, and interest in and to the Mortgage, Deed of Trust, Security Agreement, Fixture Filing and Financing Statement dated as of February 10, 2014, that secured the Loan Facility. Exhibit M at p. 195-200, Bonsai’s Deed Assignments. At the time Bonsai purchased the Loan Facility, the outstanding principal balance was not less than $16,351,856.43, with accrued and unpaid interest of $2,800,501.32, for a total of $19,152,357.75. Ex. L at p. 193, Stamets Declaration at 4 5. Iv. SUMMARY JUDGMENT STANDARD To obtain a traditional summary judgment, the movant must show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIv. P. 166a(c); Larsen v. Carlene Langford & Assocs., Inc., 41 S.W.3d 245, 249 (Tex. 2001); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 443 (Tex. 1982). A defendant who conclusively negates at least one element of a plaintiff's cause of action or conclusively establishes an affirmative defense is entitled to summary judgment. Frost Nat. Bank v. Fernandez, 315 8.W.3d 494, 508 (Tex. 2010). PAGE 9 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Vv. ARGUMENTS & AUTHORITIES A. Summary judgment should be granted against Banner’s Knowing Participation in Breach of Fiduciary Duty and Aiding and Abetting Breach of Fiduciary Duty claims. Banner’s claims for knowing participation in breach of fiduciary duty and aiding and abetting breach of fiduciary duty against Sage Road and Bonsai are contingent on the existence of a fiduciary relationship, that Defendants had knowledge of such relationship, and that Defendants knew they were participating in a breach of such relationship. Banner’s claims are also contingent on Banner having been able to secure for itself the corporate opportunity it claims Pina and Pimuro usurped. Because the summary judgment evidence conclusively disproves each of the elements, Defendants are entitled to summary judgment. 1 Pimuro and Pina were not in a fiduciary relationship with Banner. To prove knowing participation in a breach of fiduciary duty and aiding and abetting a breach of fiduciary duty by Bonsai and Sage Road, Banner must prove the existence of a fiduciary relationship with Pimuro or Pina. Straehla v. AL Glob. Servs., LLC, 619 S.W.3d 795, 804 (Tex. App.—San Antonio 2020, pet. denied) (holding that the existence of a fiduciary duty is an essential element of a knowing participation in breach of fiduciary duty cause of action); Super Starr Int'l, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829, 847 (Tex. App.—Corpus Christi-Edinburg 2017, no pet.) (holding that when a breach of fiduciary duty claim fails, so should an aiding and abetting claim). It is well settled in Texas, that “not every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.” Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176-77 (Tex. 1997). An informal fiduciary relationship might exist when a party places a special confidence or trust in another, but courts will not create such a relationship lightly. Meyer v. Cathey, 167 S.W.3d 327, 331 (Tex. 2005). For example, a fiduciary relationship may be PAGE 10 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 encompassed by a financial advisor under certain circumstances. See, e.g., W. Reserve Life Assur. Co. v. Graben, 233 $.W.3d 360, 374 (Tex. App.—Fort Worth 2007, no pet.). However, the financial advisor role must extend beyond a simple arms-length business transaction. /d. A court will only impose a fiduciary or confidential relationship in a business transaction if the relationship exists prior to, and apart from the transaction. Meyer, 167 S.W.3d at 330-31. Banner alleges a fiduciary relationship existed because Pimuro and Pina acted as Banner’s “financial advisor” and “Banner placed a special confidence and trust in them.” /d. However, the evidence demonstrates that Pimuro and Banner’s relationship did not extend beyond a few, discrete, arms-length transactions. In 2014, Pimuro and Banner entered their first arms-length transaction—a transaction Banner did not want to formalize despite Pimuro’s efforts. Ex. B at p. 50, 52-53, Partain Dep. 86:34, 97:22—25. After the transaction was complete, Pimuro was paid a negotiated fee, and Banner abandoned all prior discussions of continuing any relationship with Pimuro. Ex. B at p. 50-51, Partain Dep. 88:21—23, 90:15—17. At that time, Pimuro was not formally engaged as a financial advisor or in any other capacity beyond the 2014 transaction. Ex. B at p. 50, 52, Partain Dep. 86:3-4, 97:22-25. Pimuro and Banner entered their second arms-length transaction in 2017—the only time Pimuro was formally engaged as a financial advisor to Banner. Ex. B at p. 52-53, Partain Dep. 95:23-25, 97:22—98:1. The Engagement Agreement specifically stated that Pimuro would advise Banner with respect to a “strategic transaction to pay-off existing debt obligations and/or acquire and/or develop oil and gas assets.” Ex. D at p. 77. The Agreement provided Pimuro with a monthly retainer fee, and an opportunity to earn a fee if a deal was closed with any company specifically listed in the Agreement. Ex. D at p. 78. The Agreement was in effect for a period of three months and month-to-month, thereafter. Ex. D at p. 79. Banner paid Pimuro from April to October 2017. PAGE 11 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Ex. E at p. 85, Statement of Banner’s Payments to Pimuro. However, because no deal came from the Agreement, Banner stopped paying Pimuro and effectively, terminated the Agreement. Ex. B at p. 55, Partain Dep. 106:22—25, 107:19-24. October 2017, thirty-three months prior to Pina first contacting Sage Road regarding the Loan Facility, was the last time Banner paid Pimuro. Ex. B at p. 63, Partain Dep. 176:18-21. Pimuro and Banner entered their last arms-length agreement on October 12, 2019, when Banner demanded that Pimuro execute the 2019 Confidentiality Agreement. P1.’s Third Am. Pet. at § 15; Ex. F at p. 89, 2019 Confidentiality Agreement. The 2019 Confidentiality Agreement specifies that it is the final agreement between the parties concerning their relationship and that there are no other oral agreements between them. Ex. F at p. 87-89, 2019 Confidentiality agreement. Importantly, the 2019 Confidentiality Agreement does not create or impose any fiduciary duties on Pimuro or Pina. /d. Pimuro and Banner did not execute another engagement agreement and Pimuro was not paid. Ex. B at p. 63, Partain Dep. 175:11—23. Partain even admitted that Banner and Pimuro never discussed compensation if a deal closed in 2019 or 2020—at least two years after Banner last paid Pimuro for its services. Ex. B at p. 63, Partain Dep. 175:17—23, 176:18-21. Thus, the 2019 Confidentiality Agreement was the last agreement Banner entered into with Pimuro and Pina, and that agreement specifies there are no other agreements, fiduciary or otherwise, between them. The evidence thus conclusively establishes that Banner and Pimuro or Pina did not have a fiduciary relationship, rather each transaction was discrete, and always at arms-length. Banner’s claims for knowing participation of a breach of fiduciary duty and aiding and abetting a breach of fiduciary duty fail as a matter of law. 2. Sage Road did not know of the existence of a fiduciary relationship or a breach of one. PAGE 12 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Not only does the evidence show that no fiduciary relationship existed, but it also shows that Sage Road did not know of a fiduciary relationship or that it was participating in breach of one. To prove knowing participation in a breach of fiduciary duty or aiding and abetting breach of a fiduciary duty, Banner must prove the defendant had actual knowledge that a fiduciary relationship existed, and that breach of such duty is occurring. See First United Pentecostal Ch. v. Parker, 514 S.W.3d 214, 225 (Tex. 2017) (holding that though defendant helped the fiduciary cover up actions against plaintiff, there was no evidence that defendant was aware of the fiduciary’s plans until after they had taken place); see also Franklin D. Azar & Associates, P.C. v. Bryant, 2019 WL 5390172, at *3 (E.D. Tex. July 30, 2019) (holding that a claim for aiding and abetting a breach of fiduciary duty requires knowledge and awareness and reasoning that “knowingly” means that the third party had “actual awareness, at the time of the conduct, that the fiduciary in question owed the plaintiff a fiduciary duty, and that the fiduciary was breaching that duty”). Sage Road did not have actual knowledge at the time of the transaction that there was a fiduciary duty owed to Banner, let alone a breach of any such duty. Banner admitted that it never communicated to Sage Road that Pimuro or Pina were fiduciaries. Ex. B at p. 65, Partain Dep. 183:8-11; 184:9-16. In fact, Banner’s allegation that Sage Road knowingly participated in the alleged breach of fiduciary hinges on its belief that “they should have known [of the fiduciary duty] . . because of [Pina’s] long-standing relationship with our company,” not that they did know of the duty. Ex. B at p. 65, Partain Dep. 182:3—-13 (emphasis added). Contrary to Banner’s assertion, Jason Tracton, a managing director with Sage Road, testified that Sage Road had prior experience with Pimuro and Pina working for one of Sage Road’s portfolio companies and knew Pimuro and Pina to be a consultant for various companies and PAGE 13 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 worked in other capacities, not just for Banner. Ex. N at p. 205-06, Tracton Dep. 69:25—6, 71:12— 18. Banner even admits that Pina and Pimuro work with many other companies in the oil and gas industry, further discrediting its allegation that Pimuro and Pina were its fiduciaries. Pl’s. Am. Pet. at 412. Tracton also testified that he believed Pimuro was not working with Banner or any of its representatives to acquire the Loan Facility (Ex. N at p. 204, Tracton Dep. 65:10-13), and that Sage Road believed Banner was aware that Pimuro and Pina were working on their own. Jd. 66:20- 67:13. Further, Tracton stated that the discussions between Sage Road and Pimuro conveyed that Pina, acting through Pimuro, was engaging in negotiations with Elm Park for his own benefit. Ex. N at p. 205, Tracton Dep. 67:15—20. The reasonableness of his beliefis bolstered by the fact that the letter of intent Pimuro signed with Elm Park includes an express representation that Pimuro was not working with Banner or any of its owners to acquire the Loan Facility. Exhibit O at p. 211, Pimuro’s Letter of Intent; Ex. N at p. 204, Tracton Dep. 65:10—-13. Benjamin Stamets, the co- managing partner of Sage Road, likewise testified that Sage Road believed Banner was aware that Pimuro and Pina working on the transaction for themselves. Ex. J at p. 124, Stamets Dep. 111:10- 16; 111:24-112:1. Thus, Sage Road did not have actual knowledge of the existence of a fiduciary duty, or an alleged breach of any such duty. Because the evidence conclusively establishes that Sage Road did not have actual knowledge of a fiduciary relationship or breach thereof, Banner’s knowing participation in breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims fail as a matter of law. See e.g. Cox Tex. Newspapers, L.P. v. Wootten, 59 S.W.3d 717, 722 (Tex. App.—Austin 2001, pet. denied) (affirming summary judgment on knowing participation claim where there was no evidence of knowledge of a fiduciary duty); Kastner v. Jenkens & Gilchrist, P.C.,231 S.W.3d 571, PAGE 14 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 580 (Tex. App.—Dallas 2007, no pet.) (affirming summary judgment where there was no evidence of knowing participation in the alleged breach of fiduciary duty). 3. Banner did not have a corporate opportunity to acquire the Loan Facility from Elm Park. Banner’s knowing participation and aiding and abetting claims further fail because Banner did not have a corporate opportunity to acquire the Loan Facility from Elm Park, precluding Banner’s claim that a fiduciary duty was breached. To establish a breach of a fiduciary duty by usurping a corporate opportunity, Banner must prove that Pimuro or Pina misappropriated a business opportunity that properly belonged to Banner. Landon v. S & H Mktg Group, Inc., 82 S.W.3d 666, 681 (Tex. App.—Eastland 2002, no pet.). “The business opportunity arises where a corporation has a legitimate interest or expectancy in and the financial resources to take advantage of a particular business opportunity.” /d. A corporation’s financial inability to take advantage of a corporate opportunity or abandonment of the opportunity are viable defenses. Jd. The evidence is clear that Banner did not have a legitimate interest or expectancy in acquiring the Loan Facility from Elm Park. Banner’s controller at the time of the alleged breach, Ryan Smith, testified that a new company needed to be formed to acquire the Loan Facility. Ex. P at p. 219, Smith Dep. 66:8-15. Banner’s owner, Partain, likewise confirmed that a new company would need to be formed, but never was. Ex. B at p. 47, Partain Dep. 75: 7-16. The new company would be the one to acquire the Loan Facility from Elm Park and satisfy Bannet’s liabilities to other third parties. Ex. P at p. 217, 221 (Smith Dep. 28:15—29:1, 109:16~25). In this transaction, Banner would not have been paid any money, it would be released from any liabilities related to the assets, and the assets would be foreclosed. Ex. P at p. 217-18, Smith Dep. 27:13—-24, 63:3-24, Banner also admitted that it had no legitimate interest in the Loan Facility, as Elm Park attempted PAGE 15 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 to negotiate a deal with Banner, but Banner never made an offer to acquire it. Ex. B at p. 43, 45, Partain Dep. 45:14—23, 51:19-52:2. The evidence also shows that Banner did not have the financial ability to take advantage of the opportunity. Even if Banner had made an offer to Elm Park—it did not—Banner could not have closed the deal because it only had $1,000 in its bank account and approximately $8 million in payables to vendors and working interest and royalty owners (in addition to the Loan Facility). Ex. B at p. 61, Partain Dep. 159:18-21; Pet. at § 17. See e.g. Plas-Tex, Inc. v. Jones, No. 03-99- 00286-CV, 2000 WL 632677, at *6 (Tex. App.—Austin May 18, 2000, pet. denied) (affirming summary judgment finding no opportunity where uncontroverted evidence showed that business was insolvent and in default). Thus, because Banner did not have a legitimate interest or expectancy in purchasing the Loan Facility, Banner’s claims fail as a matter of law. 4. Aiding and Abetting Breach of Fiduciary Duty is not a recognized cause of action in Texas. The Texas Supreme Court has never recognized an independent claim for aiding and abetting breach of fiduciary duty. First U. Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 224 (Tex. 2017) (“[T]his Court has not expressly decided whether Texas recognizes a cause of action for aiding and abetting.”). The Fifth Circuit Court of Appeals, for its part, has definitively held that “no such claim exists in Texas.” Jn re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 782 (5th Cir. 2018). This has led the Dallas Court of Appeals to likewise repeatedly refuse to recognize aiding and abetting claims. See Gamble v. Anesthesiology Associates, P.S.C., No. 05-20-01024-CV, 2022 WL 2865877, at *7 (Tex. App.—Dallas July 21, 2022, no pet.) (“This Court has relied on Parker and Fifth Circuit authority in refusing to recognize such claims.”); BioTE Med., LLC v. Medcalf, No. 05-20-00661-CV, 2022 WL 18007665, at *14 (Tex. App.—Dallas Dec. 30, 2022, no pet.); Ahmed v. Bank of Whittier, N.A., No. 05-21-00058- PAGE 16 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 CV, 2022 WL 1401432, at *6 (Tex. App.—Dallas May 4, 2022, pet. denied); Hill v. Keliher, No. 05-20-00644-CV, 2022 WL 213978, at *10 (Tex. App.—Dallas Jan. 25, 2022, pet. denied); accord Hampton v. Equity Tr. Co., 607 S.W.3d 1, 5 (Tex. App.—Austin 2020, pet. denied) (noting that courts of appeal should not recognize new causes of action and holding that “[i]n the absence of recognition by the Supreme Court of Texas or the Legislature, we conclude that a common-law cause of action for aiding and abetting does not exist in Texas”). Because it is not a recognized cause of action in Texas, Defendants are entitled to judgment as a matter of law as to Banner’s aiding and abetting claim. B. Summary judgment should be granted on Banner’s conspiracy claims against Bonsai and Sage Road. Banner’s claims for conspiracy fail because the evidence presented conclusively disproves at least one essential element of its claims against Bonsai and Sage Road. To prevail in a conspiracy cause of action, Banner must show that there was: “(1) two or more persons; (2) an object to be accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result.” Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Conspiracy is not an independent cause of action and is contingent on a defendant’s participation in an underlying tort. Agar Corp., Inc. v. Electro Circuits Int'l, LLC, 580 S.W.3d 136, 142 (Tex. 2019). Conspiracy requires specific intent, and a party cannot agree, expressly or tacitly, to commit a wrong about which they have no knowledge. Firestone Steep Prods. Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996). 1 Pimuro/Pina did not owe Banner a fiduciary duty. As explained above, the testimony provided by Banner’s owners, Peter Partain and Mark Stanger, conclusively establishes that no fiduciary duty existed, no breach of fiduciary duty occurred, and Sage Road did not know of a fiduciary relationship or breach thereof. PAGE 17 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 During his deposition, Partain could not articulate when any alleged special relationship between Pimuro/Pina and Banner began. Ex. B at p. 39, Partain Dep. 12:9—25. Partain could not testify under what circumstances any alleged special relationship would terminate. Ex. B at p. 40, 62, Partain Dep. 20:13—22, 173:19—25. Partain even admitted that Banner had not paid Pimuro or Pina a dime for more than two years prior to the alleged breach. Ex. B at p. 63, Partain Dep. 176:18-21. Further, Sage Road could not have conspired to cause or induce a breach of fiduciary duty because it did not know of a fiduciary duty. Partain testified that Banner never communicated to Sage Road that Pimuro or Pina were fiduciaries of Banner. Ex. B at p. 65, Partain Dep. 183:8—11; 184:9-16. Instead, Partain just believes that Sage Road “should have known” of the fiduciary relationship. Ex. B at p. 65, Partain Dep. 181:24—182:6. Conspiracy, however, requires “specific intent to agree to accomplish something unlawful or to accomplish something lawful by unlawful means.” JnteliTrac, Inc. v. UMB Fin. Corp., No. 05-22-00635-CV, 2024 WL 1171383, at *10 (Tex. App.—Dallas Mar. 19, 2024, no pet. h.) (affirming summary judgment where, as here, evidence of a meeting of the minds was lacking). Because Sage Road could not have agreed to commit a wrong it had no knowledge of, the Court should grant summary judgment as to this claim. 2. The evidence conclusively disproves Banner’s claim that Sage Road and Bonsai conspired to usurp Banner’s opportunities. The evidence also conclusively disproves that Banner’s claim that Sage Road and Bonsai conspired to usurp Banner’s opportunities because Banner did not have any corporate opportunities. As explained above, Banner did not have a legitimate interest or expectancy in acquiring the Loan Facility from Elm Park or the financial means to do so. The evidence further established that, although Elm Park was willing to engage in negotiations with Banner for the Loan PAGE 18 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 Facility, Banner was unwilling to formally negotiate a buy-out of the Loan Facility and did not make any formal offer to Elm Park. Instead, the only possible path forward was for Banner’s principals form a new company to purchase the Loan Facility. Ex. P at p. 219, Smith Dep. 66:8— 15. Thus, Defendants are also entitled to summary judgment as to this claim. See InteliTrac, Inc., 2024 WL 1171383, at *10. 3. Banner’s claim against Bonsai and Sage Road for conspiracy to improperly force Banner into bankruptcy fails because no unlawful or overt act occurred. Banner’s claim for conspiracy to improperly force Banner into bankruptcy fails as a matter of law because the underlying tort does not legally exist. If an underlying tort against a defendant does not exist in Texas, the plaintiff cannot have a conspiracy claim against the defendant for that underlying tort. Chu v. Hong, 249 $.W.3d 441, 447 (Tex. 2008). Banner misses a key issue—involuntary bankruptcy is not a tort. The Bankruptcy Code under Section 303 specifically permits involuntary bankruptcy. 11 U.S. Code §303(a). Bonsai, as a creditor of Banner, was permitted to file an involuntary case against Banner. As Partain admits, there was nothing wrongful about demanding that Banner file for bankruptcy relief. Ex. B at p. 46, Partain Dep. 60:19—25. And the evidence also shows that Banner’s only options in 2020 were to either file for bankruptcy or undergo a foreclosure on the Loan Facility. Ex. B at p. 58, Partain Dep. 136:17—137:5. Thus, Banner’s claim for conspiracy to force Banner into bankruptcy fails as a matter of law. 4, The evidence presented disproves that Sage Road and Bonsai conspired to misappropriate Banner’s trade secrets or commit fraud. Banner’s conspiracy claim against Sage Road and Bonsai for misappropriation of trade secrets and fraud fail because the evidence presented establishes that no trade secrets were misappropriated. Banner’s claim for misappropriation of trade secrets hinges on the allegation that PAGE 19 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy IT LP’s Motion for Partial Summary Judgment 15282113 Pina and Pimuro made false representations regarding Banner’s confidential information and that the information was used to “evaluate Banner’s plan before completing it for their own personal advantage, and to benefit Bonsai.” Pl.’s Third Am. Pet at §§ 17, 37. However, the evidence presented demonstrates that the confidential information that Sage Road received from Pimuro in relation to the acquisition of the Loan Facility came lawfully from Elm Park and was subject to a confidentiality agreement executed between Pimuro and Elm Park. Ex. N at p. 208, Tracton Dep. 187:1—3. Pimuro acted through guidance of Elm Park to acquire information from Banner. Ex. A at p. 32, Pina Dep. 216:4—13. That information was only requested in connection with the potential transaction. Ex. A at p. 31, Pina Dep. 168:18-170:16. Because the evidence establishes that no information was misappropriated, this claim also fail as a matter of law. DEFENDANTS’ NO-EVIDENCE MOTION FOR PARTIAL SUMMARY JUDGMENT I LEGAL STANDARD “In a no-evidence summary judgment motion, the defendant alleges that adequate time for discovery has passed and that the plaintiff has failed to produce any evidence to support one or more essential elements of a claim for which the plaintiff would bear the burden of proof at trial.” EP Hotel Partners, LP v. City of El Paso, 527 S.W.3d 646 (Tex. App.—El Paso 2017, no pet.) (citing KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015)). A no-evidence motion for summary judgment is “essentially a motion for a pretrial directed verdict: the party without the burden of proof contends that no evidence supports one or more essential elements of the non- movant’s claim.” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003) (citing Tex. R. Civ. P. 166a(i)). When a no-evidence summary judgment motion is presented under Rule 166a(i), the movant does not bear the burden of establishing each element of its own claim or defense. Burroughs v. APS Intern., Ltd., 93 S.W.3d 155, 159 (Tex. App.—Houston [14th Dist.] PAGE 20 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 2002, pet. denied). Rather, the trial court must grant the motion unless the non-movant meets its burden of raising a genuine issue of material fact on each challenged element. Nguyen v. Bank of Am., N.A., 506 S.W.3d 620, 623 (Tex. App.—Houston [Ist Dist.] 2016, pet. denied) (citing Boerjan v. Rodriguez, 436 S.W.3d 307, 312 (Tex. 2014)). The trial court must grant a motion for no-evidence summary judgment where “(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.” King Ranch, Inc., 118 S.W.3d at 751 (quotation omitted). I. ARGUMENT A. Defendants are entitled to No-Evidence Summary Judgment as to Plaintiff's Knowing Participation in Breach of Fiduciary Duty and Aiding and Abetting Breach of Fiduciary Duty Claims A claim for knowing participation in a breach of fiduciary duty requires (1) the existence of a fiduciary duty owed by a third party to the plaintiff; (2) the defendant knew of the fiduciary relationship; and (3) the defendant was aware of his participation in the third party’s breach of its duty. Darocy v. Abildtrup, 345 S.W.3d 129, 138 (Tex. App.—Dallas 2011, no pet.). The Texas Supreme Court has never recognized an independent claim for aiding and abetting breach of fiduciary duty. First U. Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 224 (Tex. 2017); see also Gamble v. Anesthesiology Associates, P.S.C., No. 05-20-01024- CV, 2022 WL 2865877, at *7 (Tex. App.—Dallas July 21, 2022, no pet.) (noting that the Dallas Court of Appeals has refused to recognize aiding and abetting claims). That said, if such a claim exists, its elements are likely (1) the primary actor committed a tort; (2) the defendant had knowledge that the primary actor’s conduct constituted a tort; (3) defendant had intent to assist the PAGE 21 Defendants Bonsai Energy Partners, LLC, and Sage Road Energy II LP’s Motion for Partial Summary Judgment 15282113 primary actor; (4) defendant gave the primary actor assistance or encouragement; and (5) defendant’s conduct was a substantial factor in causing the tort. Immobiliere Jeuness Establissement v. Amegy Bank Nat'l Ass’n, 525 S.W.3d 875, 882 (Tex. App.—Houston [14th Dist.] 2017, no pet.). Thus, aiding and abetting breach of fiduciary duty claims (to the extent they exist) share at least three common elements with knowing participation claims: (1) evidence of a breach of a fiduciary duty, (2) an awareness of the underlying wrong, and (3)