Not So Imminent Harm

In this derivative suit, the plaintiff sought a temporary injunction stopping officers of the defendant company who had each been granted a promissory note in lieu of salary (which note was then in default) giving them the right to foreclose.  Although the trial court granted the temporary injunction, the Court of Appeals held that the mere existence of unexercised contractual rights does not give rise to the “imminent harm” required to sustain a temporary injunction, reversing the trial court’s decision.

Schmidt v. Richardson

Injunction Reversed for Lack of Specificity

In this memorandum opinion, the Court found that the trial court’s temporary injunction preventing the defendants from disclosing, among other things, “techniques,”  “materials,” “confidential information” and “proprietary information,” was not specific enough to meet the  requirements of TRCP 683, which requires that an injunction shall “describe in reasonable detail . . . the acts sought to be restrained.”

Ramirez v. Ignite Holdings

For Your Information, the Court of Appeals Has Roundly Rejected Prior Restraint

Jay Nanda and his brother, Atul, ended up in a dispute over their jointly-owned company, Dibon Solutions. An arbitrator awarded ownership of the company to Atul and ordered him to pay Jay in excess of $500,000. After the arbitration award, Jay began to call Dibon’s customers and its bank, claiming that Dibon was engaged in all kinds of misconduct, including money laundering, human trafficking, and forging documents. Dibon sued Jay, asking the trial court for a temporary injunction to stop Jay from spreading his allegations any further. The trial court denied the temporary injunction, and Dibon filed an interlocutory appeal. The court of appeals affirmed, holding that the testimony supported Jay’s assertion that the statements were true. Without any false or misleading statements at issue, Dibon could not meet its burden of establishing an exception to the First Amendment’s prohibition of prior restraint. The court went on to hold that an injunction could not be sustained on Dibon’s alternative theory of tortious interference because, apart from the fact that Jay admitted sending the disparaging information in an email, there was no evidence that he had otherwise taken an active part in persuading Dibon’s customer to breach its contract. Accordingly, the trial court did not abuse its discretion in denying Dibon’s request for a temporary injunction.

Dibon Solutions, Inc. v. Nanda, No. 05-12-01112-CV

Void From the Start

A temporary injunction order is void if it does not fix the amount of security for the applicant’s bond or fails to set a trial date. The injunction issued against appellant Michael Lodispoto did neither. As a result, the court of appeals set aside both the TI order and the trial court’s subsequent order to show cause for violations of the injunction.

Lodispoto v. Ruvolo, No. 05-12-01580-CV

Some Appeals Are Easier Than Others

A temporary injunction order is void if it doesn’t set a specific date for trial on the merits. In this case, the county court at law issued a temporary injunction that only said it “shall remain in effect until final disposition of this case or until further order of the Court.” Neither “final disposition” nor “further order” is a date certain, so the TI was reversed on appeal as void without further reference to the merits.

ACI Healthcare Staffing, LLC v. V-Platinum Consulting, LP, No. 05-12-01060-CV

Standard of Review

In February, the court of appeals reversed a district court’s temporary injunction prohibiting a lender from foreclosing on the borrower’s properties, concluding that the testimony only established an agreement to negotiate, not an enforceable agreement to forebear from foreclosure. The court has now issued an updated opinion in that case that clarifies the standard of review. In the original opinion, the court wrote that “the trial court abuses its discretion when it misapplies the law to established facts or when the evidence does not reasonably support the trial court’s determination of the existence of a probable injury or a probable right of recovery.” In the revised opinion, the court states that an abuse of discretion occurs when the trial court “misapplies the law to established facts or when there is no evidence that supports the trial court’s determination of the existence of a probable injury or a probable right of recovery.” The difference between those two standards yielded no difference in the outcome of the case, but anyone appealing a temporary injunction should be sure to cite the correct standard of review.

Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-00653-CV

No Probable Right to Postpone Foreclosure

The court of appeals has reversed the grant of a temporary injunction that prohibited the lender from foreclosing on a pair of properties that secured a $10,000,000 promissory note. After multiple previous foreclosures, a bankruptcy filing, and the voluntary dismissal of the bankruptcy case, the borrower sued to enjoin further foreclosures, claiming that the parties had entered into a binding agreement that limited the lender’s ability to foreclose. The court of appeals rejected that argument, concluding that the testimony of the borrower’s witness at the injunction hearing only demonstrated an agreement to engage in further negotiations following dismissal of the bankruptcy, not any concrete and enforceable contractual terms. The court of appeals also rejected the borrower’s contention that the foreclosures would be wrongful because they would result in less than fair market value being received. That argument, the court held, was only applicable to a deficiency claim after foreclosure, not as grounds to prevent foreclosure itself.  The court of appeals therefore dissolved the temporary injunction and remanded the case to the trial court.

Branch Banking & Trust Co. v. TCI Luna Ventures, LLC, No. 05-12-000653-CV

UPDATE: The court has issued a revised opinion in the case, in which it clarifies the standard of review. The outcome remains the same.

Interlocutory Appeal Is No Substitute for Trial on the Merits

Kaufman County obtained a temporary injunction against the operators of a local firing range, preventing them from continuing to operate the gun range because it was too close to nearby businesses and residences.  The range owners filed an interlocutory appeal, and the parties thereafter agreed to stay the trial court proceedings while the appeal was pending. But an interlocutory appeal of a temporary injunction is not supposed to delay the trial on the merits, as the issue on appeal is whether the court abused its discretion in ordering temporary relief before the case can proceed to full trial, not to obtain a ruling on the merits from the appellate courts. Invoking the rule that the fastest way to cure the hardship of a temporary injunction is to try the case on the merits, the court of appeals dismissed the appeal, admonishing the parties and the trial court to proceed “expeditiously” to trial.

Morgan Security Consultants, LLC v. Kaufman County, No. 05-12-00721-CV

No Appellate Review for Permanent Injunction Granted On Summary Judgment

In this Memorandum Opinion, the Court of Appeals addressed whether it may exercise jurisdiction over an order granting an interlocutory summary judgment order for permanent injunctive relief, but which did not dispose of the defendant’s counterclaims. The Court refused to exercise jurisdiction, holding that “[a] summary judgment that fails to dispose of all claims, even if it grants a permanent injunction, is interlocutory and unappealable.”  Notably, however, the court pointed out that the appellant could have tried to challenge the injunction as actually being an appealable temporary injunction, but the appellant had not attempted to use that procedure.

Young v. Golfing Green Homeowners Ass’n, Inc., No. 05-12-00651

Pirated Download

Hood worked for ISC as both an employee and an independent contractor “registered representative” working to bring in new clients on commission. Hood regularly downloaded ISC client information onto personal storage. ISC fired Hood, who solicited 800 of ISC clients at his new place of business. Many of those clients Hood brought to ISC and was entitled to solicit; other he did not. ISC sued and sought a temporary injunction. Both side submitted a list of client files taken from Hood’s hard drive, but disagreed about which clients were not Hood’s and thus ISC proprietary information. The court accepted Hood’s list, ordering him to destroy or return all of the files he designated as belonging to ISC, or preserve them and refrain from accessing them. ISC appealed the denial of a temporary injunction based on ISC’s list.

On appeal, the court first held that Hood’s download of client lists, prohibited by ISC for registered representatives, could constitute a violation of the Penal Code’s offense for accessing a computer without the consent of the owner. The court next held that some of the data Hood retained contained sensitive information about the clients that exposed ISC to FINRA violations, and that this information was unnecessary to Hood’s solicitations. Thus, the injunction should have extended to both information about clients that Hood did not bring to ISC and the social security numbers and account information of all ISC clients.

ISC Group, Inc. v. Hood, No. 05-12-00568-CV