BEAUMONT – An energy provider has lost its appeal against a trial court judgment in a case involving two projects based in Texas and Louisiana.
Ninth District of Texas Court of Appeals Justice Leanne Johnson, who authored the July 26 unanimous appeals court decision, ruled the 253rd District Court in Liberty County "did not abuse its discretion in refusing to submit the requested instruction, and....did not abuse its discretion" in denying Sam Rayburn Municipal Power Agency (SRMPA) equitable relief.
SRMPA provides energy to the cities of Jasper, Livingston, and Liberty in Texas and to Vinton, Louisiana.
SRMPA sued its former lawyer, a Texas city, and a trust that manages the energy needs of a Louisiana municipality over allegations of wrongful conduct.
The agency claimed it was cut out of deals, named the Nisco Deal and Cambridge Project, that netted its former lawyer, Ralph J. Gillis, and related entities millions of dollars, and is expected to bring in $20 million more through 2036.
Gillis and the entities were accused of penning contracts with the city of Jasper and the Vinton Public Power Authority that should have included SRMPA.
A jury awarded SMPRA $5 million in connection with the Nisco deal after finding Gillis failed to comply with his fiduciary duty. But, because the jury also answered that SMPRA should have known of the fiduciary duty breach shortly after the contracts were signed, and therefore damages were barred by the statute of limitations, the trial judge cut that award to zero.
The judge, sitting in the 253rd District Court in Liberty County, Texas, did find Gillis "violated his fiduciary duty" to SRMPA in the Cambridge deal and awarded $1.7 million in past damages, plus post-judgment interest.
SMPRA appealed, claiming the trial court erred in denying SRMPA’s claims for equitable relief. Gillis, the company claimed, "breached his fiduciary duty regarding both the Nisco Deal and the Cambridge Project," the opinion states.
Gillis should have been ordered to “disgorge the monies he has already received from the Nisco Deal and the Cambridge Project," the SMPRA complained, arguing further that the trial court judge should have included further instructions that would have led a reasonable person to conclude a breach of fiduciary duty in the Nisco deal.