The Texas Business Court’s decision in Enosis Investments, LLC v. Jensen turns on a simple point: Fiduciary duties depend on what is pleaded. The case arises out of a real estate development project structured through a series of LLCs. On one side were Enosis and its principal, George Lake. On the other were entities and individuals associated with Brett Jensen, including Braverman Management, Inc., which served as a co-manager of the relevant LLCs, and Southfork Development Partners, LLC, which held member interests. 

After the relationship broke down, the plaintiffs alleged that Jensen, Braverman, and Southfork owed fiduciary duties, primarily based on two theories: (1) that the parties were operating as a joint venture, and (2) that duties flowed through the entity structure itself. The court rejected both, resolving the issue early and narrowing the case.

Alleging a joint venture requires more than calling it one

The plaintiffs’ main theory was that the real estate development as a whole constituted a joint venture. Under Texas law, joint venturers owe fiduciary duties to one another. But Texas law imposes four elements that must be established to create a joint venture, and all four must be satisfied.

Here, the court held that the pleadings were insufficient because they did not allege an agreement to share both profits and losses, nor did they include concrete allegations regarding how profits were to be divided. Although the plaintiffs alleged other elements (cooperation, shared goals, and some degree of joint control), the absence of profit-and-loss sharing was fatal.

The court also held that the various LLC agreements governing the entities could not support the existence of a joint venture. The LLC agreements, which were signed by the plaintiffs, expressly disclaimed any joint venture or partnership and included integration clauses. The court was not willing to entertain a joint-venture theory that contradicted the parties’ written agreements. As the court noted, if the parties had wanted a joint venture, they could have structured one.

Courts will apply the structure the parties actually built

The plaintiffs’ second theory attempted to impose fiduciary duties on the defendants based on their alleged managerial status or control of the LLCs. The LLCs at issue were manager-managed. Braverman, an entity owned by Jensen, served as a co-manager alongside an entity affiliated with Enosis. Southfork was a member of the LLCs, not a manager. Jensen himself did not hold a direct position as either a member or a manager.

Against that structure, the court addressed whether each defendant owed fiduciary duties to the LLCs or to the plaintiffs.

It was undisputed that Braverman, as a co-manager of the LLCs, owed fiduciary duties to the LLCs. The court, however, did not address the breadth or scope of those duties in the context of resolving an “early legal issue” under Texas Rule of Civil Procedure 166(g).

The court rejected the plaintiffs’ argument that Southfork or Jensen owed fiduciary duties to the LLCs. Southfork was only a member. Because the entities were manager-managed, Texas law does not impose fiduciary duties on non-managing members by default. The plaintiffs identified no agreement or authority that would impose such duties here. Their theory ultimately depended on the existence of a joint venture, which the court had already rejected.

Jensen presented a similar issue in a different form. He did not serve as a manager or member of the LLCs; instead, he was Braverman’s president and owner. The plaintiffs asked the court to treat Braverman’s fiduciary duties to the LLCs as extending to Jensen personally. The court declined. Without a pleaded basis to pierce the corporate veil, Texas law respects the separateness of legal entities, and the parties had structured their relationship accordingly. The court emphasized that fiduciary duties are not imposed lightly, given the obligations they carry, and found no basis to impose one here. If the parties wanted Jensen to serve individually as a manager, they could have done so—but did not.

The court’s decision did not dispose of all claims against Jensen. The plaintiffs’ fraud claim remains pending. The court also noted that individuals can be liable for their own tortious conduct, even when acting through an entity, and it left open the possibility of a claim for knowing participation in a breach of fiduciary duty.

The Business Court’s early-resolution approach

This decision also fits a broader pattern. The Texas Business Court has shown a willingness to use Rule 166(g), which allows the early resolution of legal issues, to test threshold claims before they drive discovery. Here, the parties identified the existence of fiduciary duties as an issue in a Joint Advisory on Early Legal Issues, as provided for in the Third Division’s form joint proposed scheduling order. This allowed the court to streamline the claims at the outset, before discovery began.

The early use of Rule 166(g) provides courts with a meaningful mechanism to address key legal issues at the outset of a case. In some instances, such rulings may dispose of a case entirely. In others, they can narrow the issues and enable more targeted—and efficient—discovery than if those issues were deferred.

What this means in practice

The Business Court’s Third Division is actively using Rule 166(g) as an early case-management tool. This is not merely procedural; it shapes how cases develop, which claims survive, and the scope of discovery.

Accordingly, claimants should be careful and thorough in drafting their pleadings. Here, the court expressly noted that the failure to allege all required elements of a joint venture was a dispositive flaw. Likewise, defendants should evaluate claims early to identify legal issues that can be addressed and resolved at the outset of the case.