Manohar Singh Mann, Narinder Singh Nagra and Bhupinder Singh v. Sikh National Center, Inc. (No. 14-23-00272-CV; filed August 1, 2024) arose from a dispute between the Sikh National Center (SNC) and the appellants over access to SNC’s bank accounts. SNC filed suit, alleging that SNC board members Mann and Nagra conducted a fraudulent election putting Singh on the board. According to SNC, the three subsequently illegally asserted rights to the corporation’s bank accounts, interfered with another SNC account, and improperly transferred funds to their own account. Appellants filed a counter-suit against SNC under the UDJA, seeking a declaration that § 22.351, Texas Business Corporations Act, required SNC to give them access to SNC’s books and financial reports so that can be copied and examined. After consolidating the two cases, the trial court ruled that pursuant to the ecclesiastical abstention doctrine, the court lacked jurisdiction over the case. It then granted SNC’s motion for summary judgment on Appellants’ UDJA claim, leaving only the issue of attorney’s fees claimed by both parties. The court granted SNC’s claim for $120,000 in fees and denied Appellants’ request for fees. Appellants took the matter to the court of appeals.
In an opinion by Justice Poissant, the court of appeals affirmed. Under the UDJA, parties may seek a declaration concerning the construction or validity of a contract. The statute authorizes the trial court to award attorney’s fees and costs to either party that the court deems fair and equitable. The court of appeals held that the trial court did not abuse its discretion in awarding SNC the fees they asked for pursuant to the UDJA. The upshot of the case is even where a trial court did not have jurisdiction over SNC’s fraud claim, as this court determined it did not under the ecclesiastical abstention doctrine, it could nevertheless award SNC attorney’s fees for the UDJA claim asserted by the Appellants.
This is a clear case of be careful what you ask for. If Appellants had simply sought dismissal of SNC’s suit under the ecclesiastical abstention doctrine and eaten the attorney’s fees, they wouldn’t have been stuck with the bill for SNC’s fees from a trial court that apparently didn’t think very much of Appellants’ UDJA claim (which may well have been filed solely for the purpose of getting attorney’s fees, since it’s not at all clear that the declaration Appellants sought under § 22.351, TBCA, had any bearing on SNC’s fraud claim).
TCJL Intern Hannah Greer provided the research for and contributed to drafting this article.
