Background: Self-Dealing Allegations in an Oil and Gas LLC

Russell A. Hinds served as co-manager of Sandman Offshore, LLC, a five-member oil and gas company in which each member held a 20% interest. According to Sandman's amended counterclaims, Hinds recommended in June 2025 that Wyotex Offshore, LLC—assignee of one of Sandman's oil and gas leases—hire EnviroCore, Inc. for drilling services at $777,204 without disclosing that Hinds owned, served as president of, and directed EnviroCore. When Wyotex paid EnviroCore in August 2025, it informed Hinds the payment would hinder its ability to make a $1 million lease payment due to Sandman in October 2025 under a Purchase Sale Agreement. Hinds then allegedly granted Wyotex a payment deferral without obtaining approval from his co-manager David Wegner or other members. Sandman's members removed Hinds as co-manager in March 2026 and expelled him as a member in April 2026, prompting this litigation.

The Procedural Posture and Rule 91a Motions

After the court partially granted defendants' earlier Rule 91a motions in a prior memorandum opinion, Hinds moved to dismiss Sandman's fraud-by-nondisclosure, constructive-trust, and conspiracy counterclaims, while third-party defendant EnviroCore moved to dismiss all claims against it. Wegner nonsuited his counterclaims before the hearing, and Sandman amended its counterclaims to add facts responsive to the motions. Hinds conceded that amendments to the constructive-trust claim adequately remedied the deficiencies he had argued. The court then addressed the remaining fraud-by-nondisclosure claim and other causes of action under Texas Rule of Civil Procedure 91a, which permits dismissal only when a claim "has no basis in law or fact."

Reliance Through Inaction Satisfies Notice Pleading

Judge Sharp's analysis focused on whether Sandman adequately pleaded reliance—a required element of fraud by nondisclosure. Hinds argued that Sandman failed to identify an act or omission actually induced by the nondisclosure. The court disagreed, holding that

"[i]naction can constitute reliance"

and that

"the form of reliance—action or inaction—is not critical to the actionability of fraud."

Sandman alleged that if Wegner had known about Hinds's conflicting EnviroCore interest and his deferred-payment discussions with Wyotex, Wegner would have exercised his managerial authority under the Sandman Company Agreement to oppose modification of the payment terms and insist on timely payment. The court found these pleadings sufficient, noting that

"Sandman's pleaded facts, taken as true, allege that it refrained from acting through Wegner based on Hinds's nondisclosures."

Aiding-and-Abetting Claims Survive Rule 91a Review

The court staff description indicates that Division 11 also addressed claims for tortious interference, civil conspiracy, and knowing participation, denying the Rule 91a motions as to each. Significantly, the court

"decline[d] to hold that established Texas law precludes a viable aiding-and-abetting claim under Rule 91a's standard for dismissal."

This holding suggests the court found sufficient legal and factual basis in the pleadings to survive the heightened scrutiny of a pre-answer motion to dismiss, even where the viability of aiding-and-abetting claims under Texas law may be subject to debate.

Significance for Texas Commercial Practice

This memorandum opinion reinforces that Rule 91a motions face a high bar when plaintiffs satisfy Texas's notice-pleading requirements. Commercial litigators defending fraud claims should note that forbearance—refraining from action based on nondisclosure—constitutes adequate reliance at the pleading stage, particularly in the LLC context where co-managers possess authority to act individually or through member consent. The court's willingness to allow aiding-and-abetting and related claims to proceed past Rule 91a dismissal also signals that the Business Court will not resolve unsettled questions of Texas law through pre-answer motions when reasonable inferences from the pleadings support the claim. For parties facing self-dealing allegations in closely held entities, the opinion underscores the importance of disclosure obligations and the difficulty of obtaining early dismissal when factual disputes about reliance and causation are embedded in the pleadings.