In Corley v. Hendricks, three individuals (Gaylen, Dan, and Corley) operated a business as shareholders, officers, and directors. No. 02-16-00293-CV, 2017 Tex. App. LEXIS 3846 (Tex. App.—Fort Worth April 27, 2017, no pet. history). Galen then terminated Corley and removed him as an officer and director. Corley then sued the other two for breach of fiduciary duty, theft under the TTLA, fraud, and civil conspiracy, as well as a shareholder’s derivative action under Texas Business Organizations Code Section 21.563. During the course of discovery, an expert learned that Gaylen had moved $2.4 million from a retained earnings account to Gaylen’s personal account and did other inappropriate activities such as pay for family vacations from the business. Galen and Dan filed a no-evidence summary judgment motion on Corley’s theft claim under the TTLA, asserting that there was no evidence that they acted without consent. They argued that because Gaylen and Dan were officers and directors at the time of Gaylen’s actions, her actions had the effective consent of the company. The trial court granted the defendants’ motion for summary judgment, and the plaintiff appealed.

The court of appeals reversed, holding that Gaylen and Dan could not give consent to the improper transactions because they were interested directors and officers. “Interested directors and shareholders cannot give effective consent to breaching their fiduciary duty to the company by stealing from the company at the expense of other directors and shareholders.” Id. The court held:

In Corley’s affidavit attached to his summary judgment response, he stated that he did not know and was not told about the transactions in which the Hendrickses allegedly stole funds from SSBI. Corley could not consent to transactions he knew nothing about. Corley thus presented the trial court with more than a scintilla of summary judgment evidence that he—the only disinterested director and shareholder—had not consented to the transactions. See Tex. Bus. Orgs. Code Ann. § 21.418(b)(1) (providing that a transaction involving an interested director is valid if the material facts as to the director’s interest in the transaction are disclosed and the transaction is approved by the majority of disinterested directors or by a good faith vote by the shareholders).

The Hendrickses’ only summary judgment ground relied on their ability to consent to the transactions, which, as a matter of law, they could not do. Because the Hendrickses could not consent to their own theft, and because Corley produced evidence that he did not consent to the transactions, Corley produced evidence raising a fact issue about whether SSBI had consented to the transactions.

Id. The court reversed the summary judgment and remanded the case for further proceedings in the trial court.