Yetter Coleman has obtained an appellate victory for GE Capital in Houston’s Fourteenth Court of Appeals. GE Capital had sued for payment of a promissory note issued by Simulis, an unsuccessful start-up company in which GE Capital had invested. Instead of paying, Simulis filed various counterclaims, which were either dismissed on summary judgment or dropped. But Simulis then alleged a second round of counterclaims, seeking up to $100 million in damages.
The district court dismissed those new claims on summary judgment, and the court of appeals has now affirmed that dismissal. The court of appeals explained that Texas law foreclosed the reliance element of Simulis’s claims such as fraud and negligent misrepresentation. And the court explained that Simulis’s claim of breach of a fiduciary duty is precluded by the Delaware law defining the alleged duty. The court thus rejected Simulis’s attempt to revive its counterclaims after its initial loss.