Abigail Kampmann
The Business Court has denied a defendant’s attempt to escape the jurisdiction of the Business Court in an action for dissolution and winding up of several entities that own and operate numerous automobile dealerships in San Antonio and elsewhere.
Abigail G. Kampmann, Individually and Derivatively on Behalf of Principle Auto Group, LLC, Principle Auto Management, Ltd, Principle Mississippi, Ltd., MLSAGKARC Properties, Ltd., and Principle Auto Mississippi, LLC v. Mark L. Smith (2026 Tex. Bus. 42; July 8, 2026) arose from the “breakdown” of a business relationship between Kampmann and Smith. In 2014 they formed Principle Auto Group, LLC to serve as sole general partner of Principle Auto Management, Ltd., a limited partneraship formed for the specific purpose of managing certain automobile dealerships. Both entites maintain their registered office and principal place of business in Bexar County.
Kampmann filed suit in the Business Court on April 3, 2026, seeking declarations of breach of the company agreement breach of fiduciary duties and requesting the court to wind up and terminate the entities under §§ 11.314 and 11.054, BOC. Smith filed a plea to the jurisdiction and moved to dismiss all claims except that seeking a court-ordered winding-up and termination. In his Plea in Abatement, Smith moved to abate or transfer the entire case in deference to certain suits in Kendall County.
In an opinion by Judge Barnard, the court denied Smith’s pleas and motion to abate or transfer. First, the court examined Smith’s plea to the jurisdiction. Smith argued that because Plaintiffs’ petition didn’t quantify damages or identity a loss, they didn’t adequately plead a case or controversy. But Plaintiffs did allege “damages in excess of jurisidictional limits” or $5 million. The court thus had jurisdiction. Next, Smith contended that no controversy existed because Kampmann didn’t accept his offer to buy out Kampmann’s interest in the Mississippi entites, which was made under the limited partnership agreement and required Kampmann to respond within 60 days. The court rejected this argument because under the limited partnership agreement, an offeree’s failure to respond to the offeror’s written notice of offer is “conclusively . . . an election to sell.” In other words, Kampmann couldn’t just ignore the offer. Rather, Plaintiffs pleadings assert that Smith’s offer didn’t comply with any of the entity agreements, setting up a disagreement over their interpretation. A dec action would thus be appropriate to render a judicial interpretation and resolve that question. Plaintiffs petition thus presented a justiciable controversy.
The court next turned to Smith’s argument that Plaintiffs lacked standing because they weren’t “personally injured by a ‘concrete and particularized’ injury that is ‘actual or imminent, not hypothetical.’” Detailing Plaintiffs’ various allegations of specific ways in which Smith’s alleged breaches resulted in harm, including cross-entity liability exposure and misallocation of personal legal fees to three dealerships, the court concluded that Plaintiffs pleaded concrete, particularized injuries traceable to Smith’s conduct. Whether Plaintiffs could prove them was a merits question.
Smith’s plea in abatement raised a different issue, the dominant-jurisdiction question. In 2024 Smith sued Kampmann in Tarrant County district court for breach of fiduciary duty and breach of contract. In October, Barvarian Imports, an entity owned by Kampmann, sued Smith in Kendall County over Smith’s alleged interference with shared-services employees. In December 2025, the Tarrant County trial court severed Smith’s claims for declaratory judgment and injunctive relief and transferred them to Kendall County. Smith’s original lawsuit was tried to a jury in 2026, resulting in a verdict in favor of Smith. No final judgment has yet been issued in that case. The question became whether the lawsuits are inherently related. The court concluded that they were not. In the Business Court, the central issue was the dissolution and winding up of the Principle Auto entities. In the Kendall County case, however, the question involved interference with the entity’s shared-services employees and Kampmann’s alleged formation of a competing business and diversion of opportunities and assets.
Looking to the “logical relationship” test, which “asks whether the same facts are signficant to both lawsuits,” the court determined that they were not. “A lawsuit that turns on employee interference [] and competitive diversion [],” the court stated, “does not arise from the same facts as a suit that turns on the MS offer, the Side Deal, the Platform Manager appointment, the legal-fee allocation, and most importantly, the statutory predicates for dissolving two Bexar County entities ….” For example, the MS offer postdated the Tarrant County verdict and wasn’t part of the original lawsuit at all. The dissoluton claims and other claims related to the MS entities didn’t arise from the transaction or occurrence underlying the Kendall County suits, either. And even if they did, Kampmann’s dissolution claim couldn’t have been brought in Kendall County as a counterclaim because the district court there doesn’t have the authority to grant it.
Independently of failing the logical relationship test, however, an independent basis existed for rejecting the plea in abatement. Under § 11.314, BOC, a “district court in the county in which the registered office or principal place of business in this state of a domestic partnership or limited liability company is located has jurisdiction to order the winding up and termination” of the entity. Both Principle Auto GP and LP fit that description. Consequently, either a Bexar County district court or a court exercising concurrent jurisdiction over actions arising out of the BOC has to do it. And the Business Court has such jurisdiction under § 25A.004(b)(7). Even so, abatement wouldn’t have done any good since a judgment in the Kendall County suits wouldn’t foreclose all issues between the parties. Smith tried to argue alternative that the Business Court should abate the case for the convenience of the parties, but the court brushed this aside as controverting the Legislature’s investment of original jurisdiction in the court, “even when related claims proceed elsewhere.”
The court held that Plaintiffs’ properly invoked the court’s subject-matter jurisdiction and denied Smith’s plea. It further denied Smith’s plea in abatement based on dominant-jurisdiction and motions to transfer.
