Coffee shop owner accuses partner of mismanaging business

GALVESTON - Harris County resident Sharm Baker is suing Dickinson local Howard C. Cates and H.C. Cates and Co. over what she asserts is mismanagement of their business, recent court documents say.

A lawsuit filed Oct. 23 in Galveston County District Court accuses the defendants of financial wrongdoing and sabotage in connection with the operation of Coffee Oasis, stating their professional relationship with Baker has been jeopardized.

Cates and his company were Coffee Oasis's original owners and operators until it went out of business.

In late October 2012, they teamed up with Baker, doing business as BESTRR Enterprises LLC, and subsequently revived the venture, of which the latter became a partner by paying $11,487.92.

Though "no formal partnership agreement was prepared to memorialize the terms of the agreement between the plaintiff and Cates," the suit says, "the parties verbally agreed that the plaintiff and Cates were equal partners in the enterprise based on the plaintiff's capital contributions."

It further explains that the complainant took on many duties and responsibilities as the presumed co-operator of Coffee Oasis.

Baker asserts sometime earlier this year, she discovered that the business incurred debts which the respondents supposedly misrepresented.

The claimant also learned of how Cates purportedly pocketed the shop's funds for himself to pay for his personal expenses as well as tried to exclude her from the business.

When he failed to completely freeze her out, Cates filed for bankruptcy twice to no avail, the suit says.

According to the original petition, the defendants chose to "grow the debt load" of Coffee Oasis rather than work with Baker to resolve "the dilemma he created in the business."

"Deadlock exists that paralyze the partnership that cannot be resolved," the suit says.

"Despite the deadlock, Cates continues to act unilaterally and without authority."

Galveston County 10th District Court Judge Kerry L. Neves granted Baker a temporary restraining order.

A temporary injunction hearing is set for 9:30 a.m., Nov. 7.

Attorney Larry A. Vick of Houston is representing the plaintiff.

Case No. 13-CV-1367