Daniel Ogbonna and Kingsley Ekworomadu, Olimax Group Inc., Olimax Manufacturing, LLC and Royalbrave Inc. v. Nelia Cruickshank

Motion for Rehearing Overruled, Majority and Concurring Memorandum
Opinions Issued August 15, 2023 Withdrawn, Judgment Issued August 15,
2023 Vacated, Affirmed, and Substitute Memorandum Majority Opinion and
Substitute Memorandum Concurring Opinion filed May 2, 2024.

In The

Fourteenth Court of Appeals

NO. 14-21-00558-CV

DANIEL OGBONNA, KINGSLEY EKWOROMADU, OLIMAX GROUP
INC., OLIMAX MANUFACTURING, LLC, AND ROYALBRAVE INC.,
Appellants
V.
NELIA CRUICKSHANK, Appellee

On Appeal from the 281st District Court
Harris County, Texas
Trial Court Cause No. 2020-64885

SUBSTITUTE MEMORANDUM MAJORITY OPINION

Appellants Daniel Ogbonna, Kingsley Ekworomadu, Olimax Group, Inc.,
Olimax Manufacturing, LLC, and RoyalBrave, Inc. appeal from the trial court’s
judgment favoring appellee Nelia Cruickshank. Cruickshank sued appellants
alleging, among other things, that she, Ogbonna, and Ekworomadu agreed to form
a partnership to sell personal protective equipment (PPE) during the COVID-19
pandemic and Ogbonna and Ekworomadu failed to comply with that agreement.
Based on a jury verdict largely favoring Cruickshank, the trial court entered
judgment requiring Ogbonna and Ekworomadu to pay Cruickshank specified
damages for the failure to comply with the agreement as well as for fraud. The
court also ordered Ogbonna and Ekworomadu to pay Cruickshank’s attorney’s
fees. In three issues on appeal, appellants assert that Cruickshank was not entitled
to any recovery for breach of a partnership agreement, fraud, or attorney’s fees. We
affirm.

The original opinions in this case issued on August 15, 2023. Appellants
have filed a motion for rehearing. We overrule the motion for rehearing, withdraw
our previous opinions, and issue these substitute opinions.

Background

In early 2020, during the beginning of the COVID-19 pandemic,
Cruickshank, Ogbonna, and Ekworomadu discussed the creation of a new business
venture to answer the growing need for PPE equipment, such as isolation gowns.
There is no dispute in this case that the three individuals agreed to work together in
some capacity or that they did not initially, or at any time, memorialize their
agreement in a formal writing. Ogbonna has business experience and a Master of
Business Administration degree, Ekworomadu has engineering and project
management experience, and Cruickshank has extensive experience in marketing
within the healthcare industry. In order to get the business up and running quickly,
the parties began by using an existing bank account owned by Olimax Group, Inc.,
a company owned by Ogbonna. The parties also incorporated Olimax
Manufacturing as part of their PPE business. RoyalBrave Inc., another entity

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involved in this case, was owned by Ekworomadu.1 The business was referred to at
times as Olimax Medical Supplies, and Cruickshank was referred to as CEO.

The business appears to have been quickly successful, making millions in
profits in just a few months, but disputes began to arise regarding the nature of the
business relationship between Cruickshank, Ogbonna, and Ekworomadu, and
Cruickshank ultimately filed the present lawsuit in October 2020. In her petition,
Cruickshank raised claims for breach of an agreement to form a partnership, fraud,
fraud by nondisclosure, and breaches of fiduciary duties. At trial, Cruickshank
principally asserted that she, Ogbonna, and Ekworomadu had agreed to form a
partnership to sell PPE equipment and that she was entitled to an equal partnership
share in the business. Meanwhile, Ogbonna and Ekworomadu insisted that the two
of them had started a PPE business and invited Cruickshank to participate on the
basis of her receiving only a share of the profits she generated and not the profits
of the business as a whole and certainly not an equal partnership share.

The 35-question jury charge submitted numerous claims, defenses, and
measures of damages. Because of the structure of the charge, not all of the
questions were answered or are relevant to this appeal. Question no. 1 asked
whether Cruickshank, Ogbonna, and Ekworomadu had an agreement to form a
partnership to sell PPE, and it provided several instructions to guide the
determination, including a list of “[f]actors indicating the creation of a
partnership.” The jury answered “[y]es” to this question. Question no. 2 asked
whether Olimax Manufacturing was property of the partnership, and the jury again
answered “[y]es.” In response to Question no. 3, the jury found that Ogbonna and
Ekworomadu failed to comply with the agreement. Questions four through eight

1
Although Olimax Group, Olimax Manufacturing, and RoyalBrave are all listed as
appellants in this appeal, none of the issues on appeal directly concern them as parties.

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inquired about various defenses or excuses for noncompliance by Ogbonna and
Ekworomadu, including statute of frauds, prior material breach, repudiation, fraud,
and waiver, but the jury did not find that any of the defenses applied in this case. In
response to Question no. 9, the jury found that Cruickshank’s damages for
Ogbonna’s and Ekworomadu’s failures to comply amounted to $5,130,673.

Question no. 15 asked whether Ogbonna and Ekworomadu had complied
with a list of fiduciary duties, and the jury found that they had complied. In
response to Question no. 22, the jury found that Ogbonna and Ekworomadu
committed fraud against Cruickshank based on the instructions and definitions
provided. In Question no. 23, the jury found her damages for fraud to be $525,000.

In its judgment, the trial court stated that “Cruickshank and [] Ogbonna and
[] Ekworomadu formed a partnership to sell personal protective equipment. [And]
Plaintiff’s interest in the partnership was terminated no later than November 16,
2020.” The court awarded Cruickshank the amounts found by the jury as damages
on her breach of the agreement and fraud claims as well as $866,248.67 in
attorney’s fees plus additional amounts in the event of an appeal. The court further
ordered that the parties take nothing on their remaining claims.

Breach of Agreement to Form a Partnership

In their first issue, appellants contend that Cruickshank was not entitled to
any recovery for breach of an agreement to form a partnership because the jury’s
findings that Cruickshank, Ogbonna, and Ekworomadu agreed to form a
partnership and Ogbonna and Ekworomadu failed to comply with that agreement
cannot support the damages awarded. Specifically, appellants argue that (1) the
Texas partnership statute controlled Cruickshank’s rights and remedies as a
putative partner, but evidence conclusively established that the three principals
created a relationship under the law governing corporations rather than the law
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governing partnerships, thus foreclosing the partnership claim, citing Texas
Business Organizations Code sections 152.002(a) and 152.051; (2) the alleged
partnership must have been terminated as a whole pursuant to subchapter I of the
partnership statute, which would not have resulted in the type of damages awarded
to Cruickshank, citing numerous Business Organizations Code provisions,
including sections 11.057(a), 152.003, and 152.701 “et seq.,” as well as Bohatch v.
Butler & Binion, 977 S.W.2d 543, 544–47 (Tex. 1998); and (3) Cruickshank failed
to obtain a specific finding of a breach of any recognized partnership duty, citing
Business Organizations Code sections 152.204 and 152.206. As will be explained
below, the first argument is not supported by the evidence, the second argument
was not preserved below, and the third argument need not be reached as it is
merely an attempt to preempt a possible argument that Cruickshank could raise on
appeal.

Creation argument. Under their first argument, appellants contend that the
business at issue in this case could not have been a partnership because the
evidence conclusively established that it was created as a corporation, citing Tex.
Bus, Org. Code § 152.051(c).2 For this reason, appellants argue that jury charge
Question no. 1 was immaterial. Although Cruickshank urges otherwise, we will
assume for the sake of analysis that this argument was preserved for our review. In
support of their contention, appellants cite evidence that when the business was
2
Section 152.051(c) provides as follows:
An association or organization is not a partnership if it was created under a statute
other than:

(1) this title and the provisions of Title 1 applicable to partnerships and limited
partnerships;

(2) a predecessor to a statute referred to in Subdivision (1); or

(3) a comparable statute of another jurisdiction.

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first starting up, it temporarily used preexisting assets—including primarily a bank
account—of Olimax Group, Inc., which was a corporation owned by Ogbonna. We
disagree that this evidence conclusively established that the parties’ new business
was created as a corporation and not a partnership, particularly in light of
significant other evidence, including Cruickshank’s testimony, supporting the
conclusion that the parties agreed to form a partnership, not a corporation. We
therefore find no merit in appellants’ first argument under issue one.

Termination argument. Appellants second argument under issue one is of a
different nature than its first argument. Whereas the first argument asserted that
appellants conclusively established a fact that rendered Question no. 1 immaterial,
the second argument asserts essentially that the trial court submitted the wrong law
in Question no. 3 on breach and Question no. 9 on fair market value damages.
Specifically, in the second argument, appellant’s assert that the trial court should
have considered the case as a termination of a partnership case governed by
termination rules under the partnership statutes rather than as a failure to comply
with an agreement to form a partnership as was submitted in Question no. 3.
Appellants then argue that the trial court submitted an incorrect query on relief in
Question no. 9.

In response, Cruickshank asserts that appellants failed to raise either of these
points in the trial court and thus did not preserve them for appeal. See generally
Tex. R. App. P. 33.1(a) (providing that appellate complaints generally must be
preserved in the trial court by a timely and sufficiently specific request, objection,
or motion). Appellants acknowledge that they did not raise these specific points
below; however, they insist that they preserved the issues by making general
objections in a post-verdict motion challenging the sufficiency of the evidence,
citing Arkoma Basin Exploration Co. v. FMF Associates 1990-A, Ltd., 249 S.W.3d

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380, 387–88 (Tex. 2008) (“Generally, a no-evidence objection directed to a single
jury issue is sufficient to preserve error without further detail.”), and Greene v.
Farmers Insurance Exchange, 446 S.W.3d 761, 764 n.4 (Tex. 2014) (“We do not
consider issues that were not raised in the courts below, but parties are free to
construct new arguments in support of issues properly before the Court.”)
(emphasis in original).

While these cases indicate that a general objection may be sufficient to
preserve a legal sufficiency issue, including based on arguments not expressly
made in the trial court, the cases do not alter the well-established rule that “it is the
court’s charge, not some other unidentified law, that measures the sufficiency of
the evidence when the opposing party fails to object to the charge.” Osterberg v.
Peca, 12 S.W.3d 31, 55 (Tex. 2000); Deluxe Barber Sch., LLC v. Nwakor, 609
S.W.3d 282, 293 (Tex. App.—Houston [14th Dist.] 2020, pet. denied); see also GB
Tubulars, Inc. v. Union Gas Operating Co., 527 S.W.3d 563, 568 (Tex. App.—
Houston [14th Dist.] 2017, pet. denied) (“Where, as here, the parties have not
objected at trial to the substance of the law set forth in the jury charge, we review
sufficiency of the evidence in light of legal standards contained in the unobjected-
to charge.”). Appellants second argument under their first issue essentially
contends that the trial court submitted the wrong law in questions 3 and 9, and they
do not assert that they preserved their positions on appeal by objecting to the
charge. Accordingly, we cannot consider these points. See Osterberg, 12 S.W.3d at
55; Deluxe Barber Sch., 609 S.W.3d at 293; GB Tubulars, 527 S.W.3d at 568; see
also Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 794 (Tex. 2020) (following
Osterberg where no objection was made to the charge and rejecting assertion party
was entitled to judgment because it conclusively proved ground that was not
submitted to the jury); Green v. Dall. Cnty. Sch., 537 S.W.3d 501, 502, 504–05

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(Tex. 2017) (following Greene on preservation but looking solely to the jury
charge for the law governing the sufficiency of the evidence analysis); Warrior
Energy Servs. Corp. v. Oilfield Specialties, LLC, No. 14-20-00069-CV, 2022 WL
3655417, at *2–3 & n.3 (Tex. App.—Houston [14th Dist.] Aug. 25, 2022, no pet.)
(mem. op.) (following Arkoma regarding preservation but then citing Osterberg
and looking to the jury charge for sufficiency of the evidence analysis).3

Preemptive argument. Lastly, as mentioned above, appellants third
argument under their first issue merely attempts to preempt an argument
Cruickshank could make on appeal should we agree with appellants on their
second argument. Because appellants’ second argument was not preserved, their
third argument is moot and we need not address it. Finding no merit in any of
appellants’ arguments under their first issue, we overrule that first issue.

Fraud

In their second issue, appellants contend that Cruickshank was not entitled to
any recovery on her fraud claim. Under this issue, appellants primarily challenge
the legal sufficiency of the evidence to support the jury’s findings regarding fraud
and damages resulting from fraud. When examining a legal-sufficiency challenge,
we review the evidence in the light most favorable to the challenged finding and
3
In a letter brief, appellants also cited a number of opinions written by members of this
panel following Greene, but none of the cited opinions involved legal sufficiency complaints on
claims tried to a jury. See Childress v. Palo Pinto Cty., No. 14-19-00783, 2021 WL 4472562, at
*3 (Tex. App.—Houston [14th Dist.] Sept. 30, 2021, no pet.) (mem. op.) (holding issue was
waived in appeal from bench trial); Methodist Hosp. v. Addison, 574 S.W.3d 490, 507–08 (Tex.
App.—Houston [14th Dist.] 2018, no pet.) (Christopher, J., concurring) (appeal of ruling on
sufficiency of medical malpractice expert report); Cent. Petroleum Ltd. v. Geoscience Res.
Recovery, LLC, 543 S.W.3d 901, 924 n.15 (Tex. App.—Houston [14th Dist.] 2018, pet. denied)
(appeal of denial of a special appearance); Menon v. Water Splash, Inc., No. 14-14-00012-CV,
2018 WL 344040, at *3–4 (Tex. App.—Houston [14th Dist.] Jan. 9, 2018, no pet.) (appeal from
no answer default judgment) (mem. op.); Bansal v. Univ. of Tex. M.D. Anderson Cancer Ctr.,
502 S.W.3d 347, 352 (Tex. App.—Houston [14th Dist.] 2016, pet. denied) (appeal from ruling
on plea to the jurisdiction).

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indulge every reasonable inference that would support it. City of Keller v. Wilson,
168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable
factfinder could and disregard contrary evidence unless a reasonable factfinder
could not. Id. at 827. Evidence is legally sufficient if it would enable reasonable
and fair-minded people to reach the conclusion under review. Id.

Regarding the challenge to the damages finding, while a factfinder may not
arbitrarily assess an amount not authorized or supported by evidence at trial by
“pull[ing] figures out of a hat,” we will not disregard the factfinder’s determination
of damages merely because its reasoning in reaching its figures is unclear. Picard
v. Badgett, No. 14-19-00006-CV, 2021 WL 786817, at *17 (Tex. App.—Houston
[14th Dist.] Mar. 2, 2021, no pet.) (mem. op.) (quoting Enright v. Goodman
Distribution, Inc., 330 S.W.3d 392, 403 (Tex. App.—Houston [14th Dist.] 2010,
no pet.)). A factfinder generally has discretion to award damages within the range
of evidence presented at trial. Id. (citing Gulf States Utils. Co. v. Low, 79 S.W.3d
561, 566 (Tex. 2002)).

The fraud question in the charge read as follows:

QUESTION NO. 22

Did the defendants commit fraud against Nelia Cruickshank?

Fraud occurs when (1) a party makes a material misrepresentation, (2)
the misrepresentation is made with knowledge of its falsity or made
recklessly without any knowledge of the truth and as a positive
assertion, and (3) the misrepresentation is made with the intention that
it should be acted on by the other party, and (4) the other party relies
on the misrepresentation and thereby suffers injury.
Fraud also occurs when (1) a party fails to disclose a material fact
within the knowledge of that party, (2) the party knows that the other
party is ignorant of the fact and does not have an equal opportunity to
discover the truth, and (3) the party intends to induce the other party

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to take some action by failing to disclose the fact, and (4) the other
party suffers injury as a result of acting without knowledge of the
undisclosed fact.

“Misrepresentation” means (1) a false statement of fact, or (2) a
promise of future performance made with an intent, at the time the
promise was made, not to perform as promised.

The fraud damages question read in relevant part as follows:

QUESTION NO. 23

What sum of money, if any, if paid now and in cash, would
fairly and reasonably compensate Nelia for her damages, if any, that
were proximately caused by the conduct you have found in response
to Question 22?

Consider the following element of damages, if any, and none
other: the difference between the value of what Nelia was promised
by Defendant(s), if any, and the value of what she received, if any.
The jury answered the liability question with a “[y]es” for both Ogbonna and
Ekworomadu and answered the damages question with “$525,000.”

Cruickshank asserts that the fraud award was based on evidence that
Ogbonna and Ekworomadu had taken PPE funds that should have been used or
held for the partnership and distributed it to themselves as salary and bonuses
while concealing that fact from her.4 Cruickshank cites evidence that while the
three putative partners had not had any specific discussions about compensation,
they had talked about equity, being equal partners, and being able to disburse their

4
As Cruickshank points out, she alleged under her fraud claim in her live petition that
Defendants further took PPE Venture funds for their direct, personal benefit and
fraudulently concealed that they were doing so. Defendants knew that they were
in control of the financial accounts and certain operational aspects of the PPE
Venture to the exclusion of Mrs. Cruickshank. Indeed, they knew that she could
not discover their fraudulent conduct because they actively concealed it and
abused their position to conceal it.

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equity only once the business was profitable and there were sufficient funds to
keep the business running. Cruickshank also cites evidence that between them,
Ogbonna and Ekworomadu signed employment contracts that awarded each a
salary and a guaranteed annual bonus. Ekworomadu was subsequently given a
$525,000 bonus and Ogbonna a $517,500 bonus, but they kept the fact of these
contracts, salaries, and bonuses from Cruickshank; controlled and did not allow her
access to the business’s financial records when she requested; and did not award
her a contract, salary, or bonus. Cruickshank further asserts that she continued to
work on behalf of the business without compensation while being kept in the dark
regarding the contracts, salaries, and bonuses. Cruickshank notes that the $525,000
the jury assessed as fraud damages matches the amount of Ekworomadu’s bonus
and was close to the amount of Ogbonna’s bonus, which suggests the jury viewed
the bonuses either as a distribution of equity to which Cruickshank was entitled to
an equal share or a diminution of the fair market value of Cruickshank’s interest in
the partnership.

Appellants initially respond to this view of the evidence by pointing out that
during discussions with the trial judge on the fraud claim and in closing argument
to the jury, Cruickshank described her fraud theory as an alternative to her breach
of an agreement to form a partnership claim, i.e., that she was promised an equal
equity interest in a partnership but never received it. Appellants suggest that these
representations somehow prevent Cruickshank from now suggesting her fraud
claim was anything other than an alternative to her breach claim. Appellants,
however, make no cogent legal argument and cite no authority suggesting that
counsel’s argument to the court and summation to the jury restricted the jury’s
consideration of the evidence in this manner, and we are aware of no such
authority. See generally Tex. R. App. P. 38.1(i) (requiring that appellate briefs

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“must contain a clear and concise argument for the contentions made, with
appropriate citations to authorities and to the record”); In re S.A.H., 420 S.W.3d
911, 929 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (declining to craft
appellant’s argument for him). Moreover, appellants have not alleged that there
was error in the jury charge on fraud or suggested that any other law controls, so
we review the legal sufficiency of the evidence in light of the charge as given. See
generally Osterberg, 12 S.W.3d at 55; GB Tubulars, 527 S.W.3d at 568.

Appellants additionally point out that while Question no. 22 included fraud
by nondisclosure as an option, Question no. 23 limited fraud damages to the
difference between the value Cruickshank was promised by Ogbonna and
Ekworomadu and the value that she received. And appellants argue that the fraud
damages award amounted to an impermissible double-recovery for Cruickshank,
citing Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303 (Tex. 2006)
(“There can be but one recovery for one injury, and the fact that . . . there may be
more than one theory of liability[ ] does not modify this rule.”). The jury, however,
could have reasonably determined that Ogbonna and Ekworomadu promised
Cruickshank an equal share of equity in the business and then concealed from her
the fact that they had withdrawn some of the equity that had been built up by
giving themselves employment contracts, salaries, and guaranteed bonuses but not
her. The equity disbursed in this way was thus not included in the damages
awarded for the breach of the agreement to form a partnership claim, which was
calculated as the fair market value of Cruickshank’s interest in the partnership as of
the date her interest in the partnership was terminated.5 The fraud finding and

5
The question of timing also merits discussion as the timeline of relevant events is a
short one. It is undisputed that by at least April 2020, Cruickshank, Ogbonna, and Ekworomadu
had made some agreement to do business together. The undisclosed contracts giving Ogbonna
and Ekworomadu salaries and guaranteed bonuses were signed in June 2020, but the actual
bonuses apparently were not paid until June 2021. Cruickshank filed her lawsuit in October
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award therefore met the measure of damages set forth in Question no. 23 and was
not an impermissible double-recovery of the award for breach of the agreement to
form a partnership.

Appellants further assert that there was no evidence Ogbonna and
Ekworomadu intended to induce Cruickshank into any action by failing to disclose
the contracts, salaries, and guaranteed bonuses. However, as Cruickshank points
out, the jury could have reasonably inferred from the evidence that by concealing
the fact of the contracts, salaries, and guaranteed bonuses, Ogbonna and
Ekworomadu intended to induce Cruickshank into continuing to work on behalf of
the business in a CEO capacity without compensation (such as a salary or
guaranteed bonus) but with the expectation that she ultimately would receive an
equal share of the business’s equity. See City of Keller, 168 S.W.3d at 822; see
also Brauss v. Triple M Holding GmbH, 411 S.W.3d 614, 623 (Tex. App.—Dallas
2013, pet. denied) (holding evidence supported inference defendant misrepresented
and concealed information to induce plaintiffs to make an original investment,
continue investing, loan additional money, and to forbear collection); Windsor
Vill., Ltd. v. Stewart Title Ins. Co., No. 14-09-00721-CV, 2011 WL 11545169, at
*4 (Tex. App.—Houston [14th Dist.] Mar. 17, 2011, no pet.) (mem. op.) (holding
evidence supported inference that defendants remained silent regarding lien to
induce plaintiff to issue title policy).

Next, appellants suggest that Cruickshank’s theory of fraud by nondisclosure

2020. The jury was instructed to calculate breach damages based on the fair market value of
Cruickshank’s interest in the partnership as of the date that interest was terminated, and the trial
court stated in its final judgment that Cruickshank’s “interest in the partnership was terminated
no later than November 16, 2020.” Although the bonuses were apparently not paid until after the
termination date of Cruickshank’s interest, the salaries were paid before that time and the signed
contracts obligated the business to pay the bonuses; thus, the jury could have reasonably
determined in calculating fraud damages that the value of Cruickshank’s partnership interest had
been reduced by the concealed contract, salaries, and guaranteed bonuses.

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of salaries and bonuses was dealt with in the jury submission on breach of
fiduciary duty, wherein it stated that “[a] partner does not violate a duty or
obligation merely because the partner’s conduct furthers the partner’s own
interest.” But, as described above, Cruickshank’s theory did not rest merely on the
fact that the alleged conduct furthered Ogbonna’s and Ekworomadu’s own
interests; it rested on the assertion the conduct deprived Cruickshank of her share
of the equity in the business.

In their final sentence under this issue, appellants contend that there was no
evidence of reliance on any act that caused $525,000 in damages. However, even
assuming that appellants are correct that the fraud-by-nondisclosure portion of
Question no. 22 required proof of reliance, this argument was inadequately briefed.
See Tex. R. App. P. 38.1(i). We find no merit in appellants’ arguments under their
second issue and accordingly overrule that issue.

Attorney’s Fees

In their third issue, appellants contend that Cruickshank was not entitled to
recover her attorney’s fees. Appellants’ argument under this issue appears limited
to asserting that Cruickshank was not entitled to her attorney’s fees because she did
not prevail on her claim for breach of the agreement, as discussed under issue one
above. See Tex. Civ. Prac. & Rem. Code § 38.001(b). Because we overruled
appellants’ first issue challenging the breach claim, we also overrule appellants’
third issue, which is dependent on success on the first issue.

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Having overruled appellants’ three issues, we affirm the trial court’s
judgment.

/s/ Frances Bourliot
Justice

Panel consists of Chief Justice Christopher and Justices Jewell and Bourliot.
(Christopher, C.J., concurring) (Jewell, J., joins both opinions)

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