The Texas Business Court recently ruled on a significant case involving Abigail G. Kampmann and Mark L. Smith, who were engaged in a business partnership for over a decade. The court's decision, issued on July 8, 2026, addresses multiple legal issues surrounding their partnership and the management of several related business entities. This ruling has implications for the future of their business operations and could affect similar partnership disputes.
Kampmann and Smith formed Principle Auto Group, LLC, in 2014, and their partnership has since deteriorated, leading to multiple lawsuits. The court's ruling is crucial for both parties as it determines the jurisdiction and the validity of their claims against each other. The outcome of this case could set a precedent for how similar business disputes are handled in Texas.
Background
The parties in this case are Abigail G. Kampmann, who is suing Mark L. Smith. They co-founded Principle Auto Group, LLC (PAG GP), which operates as a manager-managed limited liability company. Kampmann holds a 50.5% interest in PAG GP, while Smith holds 49.5%. Their partnership has been marred by conflicts, leading to various lawsuits in different jurisdictions.
Before this case, Smith filed a lawsuit against Kampmann in Tarrant County in August 2024, alleging breach of fiduciary duty and breach of contract. In October 2025, Kampmann's company, Bavarian Imports, Ltd., also sued Smith in Kendall County, claiming he interfered with their shared business operations. The current case was filed by Kampmann in the Texas Business Court on April 3, 2026. It seeks declarations about the dissolution of their business entities and claims against Smith for breach of contract and fiduciary duties.
The Ruling
The Texas Business Court, presided over by Judge Marialyn Barnard, ruled on several motions presented by Smith. The court denied Smith's Plea to the Jurisdiction, which challenged the court's authority to hear the case. The court concluded that Kampmann had adequately alleged a case or controversy, stating, "A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat a cause of action without regard to whether the claims asserted have merit."
Moreover, the court rejected Smith's Plea in Abatement, which sought to halt the current case in favor of the ongoing lawsuits in Kendall County. The court found that the issues in the current case were not inherently related to those in the Kendall County Suits. Judge Barnard emphasized that the claims regarding the dissolution of PAG GP and PAM LP were distinct from the other lawsuits, stating, "The logical-relationship test asks whether the same facts are significant in both lawsuits. A lawsuit that turns on the employee interference... does not arise from the same facts as a suit that turns on the MS Offer."
Impact
This ruling has significant implications for both Kampmann and Smith, as it allows the case to proceed in the Texas Business Court. The decision reinforces the court's jurisdiction over business disputes involving partnerships and limited liability companies in Texas. It clarifies that parties cannot simply transfer their cases to different jurisdictions to avoid legal challenges.
The ruling also sets a precedent for how courts may handle similar disputes in the future, particularly regarding jurisdictional challenges and the interrelation of multiple lawsuits. It emphasizes the importance of clearly defined claims and the necessity for courts to address them in the appropriate jurisdiction.
What's Next
The case will now proceed in the Texas Business Court, where the court will address the merits of Kampmann's allegations against Smith. It remains to be seen whether Smith will appeal this ruling or if there are related cases pending that could influence the outcome of this dispute.