On April 23, 2026, the Texas Business Court (Third Division) issued its opinion in Enosis Investments, LLC v. Brett Jensen, Cause No. 25-BC03A-0008, which addressed questions regarding the creation and existence of fiduciary duties under Texas law in the context of Texas limited liability companies (LLCs) and multi-entity business ventures. This decision offers helpful guidance for business owners, investors, and legal practitioners when it comes to structuring and managing multi-party business arrangements involving Texas LLCs.
Case Background
The dispute arose from the acquisition and management of the Reserve at Lake Travis, a mixed-use development in Travis County. In 2021, George Lake and Brett Jensen collaborated on acquiring and managing the property through a series of separate LLCs (the “Shared LLCs”). Each Shared LLC was governed by a written LLC agreement, manager-managed, and co-managed by Enosis Investments, LLC (which was owned by Lake) and Braverman Management, Inc. (which was owned by Jensen). In the event of a deadlock between Enosis and Braverman, the agreements gave Enosis the authority to break all ties.
When disputes arose about the Reserve’s management, the plaintiffs sued Jensen, Braverman, and Southfork Development Partners, LLC — a member of each of the Shared LLCs — alleging that they each breached fiduciary duties owed to Lake, Enosis, and the Shared LLCs. Based on the plaintiffs’ allegations, the court addressed whether the defendants owed fiduciary duties based on either (1) the existence of a joint venture with Enosis and Lake, or (2) the managerial positions and/or control of Jensen, Braverman, and Southfork. With the exception of the fiduciary duties Braverman undisputedly owed to the Shared LLCs based on its status as a co-manager, the court rejected the plaintiffs’ other theories for establishing fiduciary duties under Texas law.
No Joint Venture Existed
Under Texas law, establishing a joint venture requires proof of four essential elements: (1) an express or implied agreement to engage in a joint venture; (2) a community of interest; (3) an agreement to share both profits and losses; and (4) a mutual right of control. Based on the pleadings, the court found the plaintiffs could not establish the existence of a joint venture because they failed to allege that Jensen, Braverman, and Southfork agreed to share profits and losses with Lake and Enosis. Though the plaintiffs alleged that the parties’ venture “was to ‘profit from’ the Reserve,” they did not allege whether or how any profits would be shared among the parties, nor did they mention losses (or their allocation) at all. According to the court, these omissions were fatal to the plaintiffs’ attempt to establish a joint venture, therefore precluding that fiduciary duty theory.
The court also noted that the plaintiffs’ joint venture theory conflicted with the written agreements governing the Shared LLCs, which (i) expressly disclaimed the creation of any joint venture or partnership, and (ii) contained “entire agreement” clauses confirming that the parties’ entire agreement was reflected in the four corners of each agreement and that the agreements superseded all prior agreements.
Finally, the court noted that, if the parties wished to create a joint venture, they could have done so by structuring the ownership and management of the Reserve accordingly instead of using a series of LLCs whose agreements repeatedly disclaimed any joint venture.
Fiduciary Duties in Manager-Managed LLCs
The court then addressed whether the managerial positions and/or control of Jensen, Braverman, and Southfork created any fiduciary duties. Setting aside the fiduciary duties owed by Braverman, which the defendants did not contest because of Braverman’s status as co-manager of the Shared LLCs, the court found that neither Southfork nor Jensen owed fiduciary duties.
With respect to Southfork, the court noted that it was only a member of the Shared LLCs, and not a manager of any of them. The court explained Texas law does not impose inherent fiduciary duties on non-managing members of manager-managed LLCs and noted that the agreements governing the Shared LLCs did not otherwise impose such duties on Southfork.
As for Jensen, he served as Braverman’s president and was alleged to control Braverman, but he was neither a member nor a manager of the Shared LLCs. Though the plaintiffs tried to impose fiduciary duties on Jensen because of his ownership of and status with Braverman — which undisputedly owed fiduciary duties to the plaintiffs — the court held Jensen, individually, did not owe any fiduciary duties. The court found no Texas authority imposing a fiduciary duty on officers or shareholders of an entity that is acting as a manager of an LLC simply because of that status. The court held that, absent a viable basis for piercing the corporate veil — which the plaintiffs neither pleaded nor argued — Jensen’s duties and liability ran only to Braverman and could not pass through to those to whom Braverman has fiduciary duties.
The court did note that individuals may be held personally liable for their own fraudulent or tortious conduct and for knowingly participating in a breach of fiduciary duty. However, none of these theories were before the court.
Key Takeaways for Texas LLCs and Business Ventures
This decision serves as a reminder that Texas businesses should consider the following when establishing an entity structure and drafting and negotiating LLC agreements for multi-party business ventures:
- Keep Status Clear. Explicit disclaimers of joint venture or partnership status in company agreements are helpful (and effective) tools to define — and limit — legal relationships and potential liability.
- Structure Matters. The choice to organize as an LLC rather than a partnership or joint venture is legally significant, and courts will honor that choice.
- Roles Matter in LLCs. In manager-managed LLCs, non-managing members generally do not owe fiduciary duties to the LLC under Texas law, absent specific contractual provisions stating otherwise.
- Corporate Separateness May Protect Individuals. Officers and shareholders of an entity that is acting as a manager of a LLC typically do not owe fiduciary duties to the LLC under Texas law, absent a valid theory for piercing the corporate veil.
