In B Choice v. Epicentre Development Associates, the federal district court affirmed a magistrate’s recommendations concerning whether members of an LLC owe fiduciary duties to each other in Texas. No. H-14-2096, 2017 U.S. Dist. LEXIS 46284 (S. D. Tex. March 29, 2017). The court held that whether the members owed each other fiduciary duties was a fact question:
With regard to the breach of fiduciary duty issue, the EpiCentre Defendants challenge the citation of Allen v. Devon Energy Holdings, LLC, 367 S.W.3d 355 (Tex. App-Houston [1st Dist] 2012, pet. granted, judgm’t vacated, w.r.m.). However, the court finds that the part of the case that is cited was not overruled, is still good law, and supports the Magistrate Judge’s decision that there is a genuine issue of material fact for the jury to decide whether some of the EpiCentre Defendants owed a fiduciary duty to plaintiff. To be clear, the court is aware that, in dicta, another court stated that as of April 2010, no Texas court had found that fiduciary duties existed between members of a limited liability company as a matter of law. See Entertainment Merchandising Technology, LLC v. Houchin, 720 F. Supp.2d 792, 797 (N.D. Tex. 2010). However, that court acknowledged in the next sentence that whether such fiduciary duty existed was typically a question of fact. Therefore, the court agrees with the Magistrate Judge that whether the EpiCentre Defendants owed a fiduciary duty to plaintiff is an issue of fact for the jury.
The court then denied the defendant’s motion for summary judgment on that ground.