No Control, No Liability

Seib Family GP and Richard Seib purchased a limited liability company that owned a 60-acre tract in a warehouse district adjoining the Trinity River levee in Dallas. Two years later, Seib sued the bank that held the note on the property, alleging that it was liable under the Texas Securities Act because it had failed to disclose its knowledge that the levee was “in jeopardy” and “being decertified” by the Corps of Engineers. The trial court granted traditional summary judgment for the bank, and the Court of Appeals affirmed. To the extent that Seib alleged direct seller liability by the bank, that claim failed because the bank was only a lender, not a seller of the LLC. Nor could the bank be liable under the TSA for secondary liability, as the evidence demonstrated — and Seb did not contest — that the bank did not and could not exercise control over the operation of the purchased LLC.

Seib Family GP, LLC v. Bank of the Ozarks, No. 05-12-01171-CV