Who Actually Owes You a Fiduciary Duty? The Texas Business Court Just Drew the Line for LLC Partners
Five Key Takeaways
Duties flow from documents, not trust. In Enosis Investments, LLC v. Brett Jensen, decided April 23, 2026, the Texas Business Court held that fiduciary duties in LLC ventures come from the agreements and formal roles the parties chose, not from expectations or actual control.
No joint venture existed. The plaintiffs never pleaded how profits and losses would be shared, and each LLC agreement expressly disclaimed joint venture status. That combination was fatal to the claim.
Non managing members owe no inherent duties. A member of a manager managed LLC who is not a manager does not automatically owe fiduciary duties under Texas law.
Entity managers insulate their owners. The individual who owns and controls an entity manager does not personally inherit that entity's fiduciary duties absent a veil piercing theory.
Fraud and knowing participation stay on the table. Individuals are never shielded from liability for their own fraud, and Texas still recognizes claims for knowing participation in another party's breach.
You went into business with someone you trusted. You formed a few LLCs together, split the management duties, and got to work. Years later, the relationship sours, and you discover your counterpart has been steering the venture in a direction that benefits him and hurts you. Surely he owed you a fiduciary duty, right?
Not necessarily. A recent decision from the Texas Business Court, Enosis Investments, LLC v. Brett Jensen, issued on April 23, 2026 by Judge Melissa Andrews of the court's Third Division, is a sharp reminder that in Texas, fiduciary duties in LLC ventures flow from the documents and the formal roles the parties chose, not from trust, expectations, or even actual control. For business owners across Texas, and especially for anyone in a multi member or multi entity venture, this case deserves your attention.
Why It Matters
Fiduciary duty claims are the backbone of most partnership disputes and business divorces. When co owners fall out, the aggrieved party almost always alleges that the other side breached duties of loyalty and care. Whether those duties actually exist is often the whole ballgame; if no fiduciary duty was owed, the claim fails no matter how unfair the conduct felt.
Enosis is also notable because it comes from the Texas Business Court, the specialized trial court that opened its doors in September 2024 to handle complex commercial disputes. The court is now producing a steady body of written opinions, something Texas trial courts historically did not do, and those opinions are quickly becoming required reading for anyone structuring or litigating business relationships in this state.
What Happened
In 2021, George Lake and Brett Jensen agreed to acquire and manage the Reserve at Lake Travis, a mixed use development in Travis County. To do it, they formed four LLCs, referred to as the Shared LLCs, to own and operate different components of the project. Each Shared LLC was manager managed and co managed by two entities: Enosis Investments, LLC, owned by Lake, and Braverman Management, Inc., owned by Jensen. Enosis held the tie breaking vote in the event of deadlock. A third entity, Southfork Development Partners, LLC, was a member of each Shared LLC but not a manager.
When management disputes erupted, Lake and Enosis sued Jensen, Braverman, and Southfork, alleging breach of fiduciary duties owed to Lake, to Enosis, and to the Shared LLCs themselves.
What the Court Decided
The court rejected nearly every fiduciary duty theory the plaintiffs raised, with one exception nobody contested.
First, the court held there was no joint venture. Texas law requires four elements to establish a joint venture: an agreement to engage in one, a community of interest, an agreement to share both profits and losses, and a mutual right of control. The plaintiffs alleged the parties intended to profit from the Reserve, but never alleged how profits would be shared, and never mentioned losses at all. That pleading gap was fatal on its own. Just as important, each LLC agreement expressly disclaimed any intent to form a joint venture or partnership, and each contained an integration clause. The parties could have structured the deal as a joint venture; they chose LLCs with anti joint venture language instead, and the court held them to that choice.
Second, Southfork owed no fiduciary duties. Southfork was a member but not a manager of the manager managed Shared LLCs. Texas law does not impose inherent fiduciary duties on non managing members, and nothing in the LLC agreements imposed them contractually.
Third, and perhaps most significantly, Jensen personally owed no fiduciary duties. Jensen was the president and controlling shareholder of Braverman, the entity that served as co manager. The plaintiffs asked the court to pass Braverman's fiduciary duties through to Jensen because he owned and controlled it. The court declined. Absent a veil piercing theory, which the plaintiffs never pleaded, an officer or shareholder of an entity manager does not personally inherit that entity's fiduciary duties. Jensen's exposure, if any, runs to Braverman, not to the Shared LLCs.
The only conceded point: Braverman, as co manager, owed fiduciary duties to the Shared LLCs. That was never in dispute.
The court did flag two doors it left open. Individuals are never shielded from liability for their own fraud or tortious conduct, even when acting for an entity. And Texas recognizes a claim for knowing participation in another party's breach of fiduciary duty. Neither theory was before the court, but both remain live options in cases like this.
Practical Takeaways
For anyone forming or operating a multi party venture in Texas, Enosis offers several concrete lessons.
Your documents control. If your LLC agreement disclaims a joint venture and includes an integration clause, Texas courts will honor that language, even if the working relationship looked and felt like a partnership. Handshake understandings and course of dealing will not override the four corners of the agreement.
Roles matter more than influence. In a manager managed LLC, non managing members generally owe no fiduciary duties. If you want a co investor to owe duties to the company or to you, write those duties into the agreement. Do not assume the law will supply them.
Entity managers insulate their owners. If your counterpart's manager is an entity rather than a person, understand that the individual behind that entity likely owes you no fiduciary duty directly. That cuts both ways. It is protection when you are the one using an entity manager, and it is a gap in your remedies when you are on the other side. Plead veil piercing, fraud, or knowing participation theories where the facts support them, because the pass through fiduciary theory is now a dead end.
Structure is a litigation decision, not just a tax decision. The Enosis plaintiffs are living with the consequences of a structure built years ago. Every entity chart should be reviewed with an eye toward what happens if the relationship fails. Our corporate structuring team builds that review into every multi entity engagement.
How Warren Kalyan Can Help
Warren Kalyan sits on both sides of these issues every day. Our corporate team structures multi entity ventures, drafts LLC agreements that say what clients actually intend about duties and control, and builds deadlock and exit mechanics before they are needed. Our disputes team litigates business divorces, fiduciary duty claims, and governance fights across Texas and New York, including in the Texas Business Court.
For a look at how the court is engaging with other modern issues, see our post on AI chat log privilege in Texas litigation.
Whether you are papering a new venture or unwinding one that has gone sideways, we bring transactional insight and litigation strength together under one roof. We serve founders and operators across Austin, Houston, Dallas and New York City.
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General information only, not legal advice for your specific situation.