HOUSTON — A Texas Appeals Court has denied both appeals to dismiss a case involving Center Rose Partners and its $2,650,000 defaulted loan taken out in 2008 to finance the buyout of one of its acquisition managers.
Appellees Center Rose Partners, Ltd, individually and as a member of Rose Acquisition LLC, David Felt, Nicole Felt and appellees Lloyd Hall, Jerry Bailey and David Sonnier filed appeals in the Fourteenth Court of Appeals regarding a trial court's arbitration award.
The case stems from a 2008 agreement by Center Rose that it would pledge 100 of the units it purchased from one of its acquisition managers, L.J. Black as an "inducement" for the other acquisition manager, Jerry Bailey, to remain with Rose Acquisition, according to the Appeals Court filing. Bailey claims Center Rose also promised that if it was allowed to receive 55 percent of the distributions to Rose Acquisition members, it would use that money to pay off the loan, however Center Rose defaulted on the loan. In 2014 and 2015, lawsuits were filed by both parties that resulted in an arbitration panel finding Center Rose breached its agreement and that Bailey was entitled to the 100 units. A trial court then denied requests to vacate the arbitration award.
"On the merits of the appeals, we conclude that appellant Lloyd Hall did not challenge the arbitration award in a timely manner and that appellants Center Rose Partners, Ltd., Individually and Derivatively as a Member of Rose Acquisition, LLC, David Felt, and Nicole Felt have not shown that the trial court erred in denying their applications to vacate the arbitration award," Chief Justice Kem Frost wrote in the Appeals Court's opinion. "We affirm."
Justice Charles Spain dissented stating "Texas' fundamental public policy in favor of a broad freedom to contract, which allows parties to allocate risks as they see fit as long as their agreement does not violate the law or public policy.”
Fourteenth Court of Appeals case number 1407-00739-CV