United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED March 8, 2024 No. 21-10805 Lyle W. Cayce ____________ Clerk David M. Clapper, individually; Atlantic Midwest, L.L.C., a Michigan limited liability company; Atlantic XIII, L.L.C., a Michigan limited liability company,

Plaintiffs—Appellants,

versus American Realty Investors, Incorporated, a Nevada corporation; American Realty Trust, Incorporated, a Georgia corporation; Pillar Income Asset Management, Incorporated, a Nevada Corporation; Prime Income Asset Management, Incorporated, a Nevada corporation; Prime Income Asset Management, L.L.C., a Nevada limited liability company; EQK Holdings, Incorporated, a Nevada corporation; Basic Capital Management, Incorporated, a Nevada corporation; Bradford Phillips, Independent Executor of Gene Phillips Will and Estate,

Defendants—Appellees. ______________________________

Appeal from the United States District Court for the Northern District of Texas USDC No. 3:14-CV-2970 ______________________________ Before Richman, Chief Judge, and Higginbotham and Elrod, Circuit Judges. Case: 21-10805 Document: 88-1 Page: 2 Date Filed: 03/08/2024

No. 21-10805

Per Curiam: David Clapper sued American Realty Investors, Inc., and other defendant entities, claiming that they transferred assets to avoid paying a judgment from a previous lawsuit in violation of the Texas Uniform Fraudulent Transfers Act (TUFTA) and the doctrine of alter ego liability. The jury rendered a verdict in favor of the Defendants on all claims. Clapper appealed, contending that Defendants’ counsel made numerous improper and highly prejudicial statements in closing argument. Because we agree that the Defendants’ counsels’ closing argument irreparably prejudiced the fairness of the trial, we REVERSE the judgment of the district court and REMAND for further proceedings consistent with this opinion. I This appeal is part of a long-running series of litigation between the parties. In 1999, the Defendants sued David Clapper for breaching an agreement regarding the acquisition and management of various apartment complexes. In 2004, the Defendants prevailed at trial, and Clapper appealed. We reversed and remanded. In 2011, Clapper prevailed in a second trial and was awarded over $70 million in damages. Finally, in 2016, following an appeal of the second trial, the district court again entered final judgment in Clapper’s favor, this time for more than $50 million. In 2014, Clapper filed the instant lawsuit, claiming that a series of transfers beginning in 2010, on the eve of the second trial, violated TUFTA. For example, he claimed that one of the Defendants “exercised total domination and control” over two other Defendants, and that assets (mostly stock) were transferred between the Defendants with the intent to “hinder, delay, or defraud” his efforts to collect on the judgment in violation of TUFTA. See Tex. Bus. & Com. Code § 24.001. Clapper also claimed that one of the Defendants violated Georgia and Nevada alter ego law because it

2 Case: 21-10805 Document: 88-1 Page: 3 Date Filed: 03/08/2024

No. 21-10805

had served for years as the alter ego of