Temporary injunction rules vs. Arbitration: which one is superior?

Posted on January 25, 2012 by Mike Northrup

The Texas arbitration statutes contemplate that a trial court has jurisdiction to issue an injunction in support of an arbitration.  So what happens if the trial court issues a temporary injunction but the form of the injunction does not (and cannot) comply with Rule 683?  According to the Dallas Court of Appeals, Rule 683 takes a backseat to the Texas Arbitration Act.

Senter Investments, L.L.C. v. Veerjee, involves an interlocutory appeal from a temporary injunction order.  The parties to the appeal had a lease agreement that required them to arbitrate, but the Veerjees asserted that there was a breach of the agreement when Senter entered into a contract with a third party to sell the property without first giving the Veerjees a right of first offer.  For that reason, the Veerjees sought and obtained a temporary injunction to halt the sale.  The trial court also ordered the parties to arbitrate pursuant to the arbitration clause in the lease agreement.  In its interlocutory appeal, Senter challenged the injunction as void because Rule 683 requires an injunction order to set a date for trial on the merits.

The court of appeals held that Rule 683's trial-setting requirement would conflict with the Texas Arbitration Act and that the Texas Arbitration Act must prevail over court rule.  Interestingly, the court also refused to address any of the merit-based challenges to the temporary injunction on the ground that doing so would constitute an advisory opinion, which is prohibited.  The court's opinion scolds the parties for having done nothing toward filing and pursuing the arbitration ordered by the trial court.  One question that is raised by this opinion (and the predecessor opinions cited within it) is whether the statutory right to an interlocutory appeal to challenge the granting of a temporary injunction is an empty right if it means a party can never have the merits of the temporary injunction determined by the court of appeals.  The court's opinion may be found here.

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Demise of Interlocutory Appeal of Temporary Injunctions?

Posted on January 19, 2011 by Mike Northrup

If you've got a pending interlocutory appeal from a temporary injunction, or if you are considering filing such an appeal, you will want to pay attention to this.

The Dallas Court of Appeals has held that interlocutory appeals of temporary injunctions should be dismissed because they seek advisory opinions.  In Dallas/Fort Worth International Airport Board v. Association of Taxicab Operators, USA, the Association of Taxicab Operators sought temporary and permanent injunctive relief against the Airport Board's new airport policy favoring taxicabs with dedicated CNG-powered engines.  After the trial court granted a temporary injunction, the Airport Board appealed.  Notably, at the oral argument, the court of appeals panel asked about the status of the trial on the permanent injunction and the parties advised the court that they had agreed to continue the case because of the pendency of the appeal of the temporary injunction.

In reliance on prior authority (decided in 1993), the court of appeals holds that "[a] party may not use an appeal of a temporary injunction ruling to get an advance ruling on the merits."  Because there was no trial on the merits of the permanent injunction with a final judgment, the court of appeals holds that appeal seeks an improper advance ruling on the merits.

Separately, the Court cites Civil Procedure Rule 683's requirement that the appeal of a temporary injunction "shall constitute no cause for delay of the trial" and reiterates its prior disapprovals of such tactics.  The court reasons that "[j]udicial economy dictates that we not reward such efforts" and dismisses the appeal.  The court's opinion may be found here.

So, I've got three questions after reading this opinion (at least two).  First, how is it that an appeal of an interlocutory injunction seeks an advisory opinion, but the initial request in the district court does not?  The concept of an advisory opinion is not unique to courts of appeals.  See, e.g., Coulson v. City Council of Victoria, 610 S.W.2d 744, 747 (Tex. 1980) ("District courts, under our Constitution, do not give advice nor decide cases upon speculative, hypothetical, or contingent situations.").  Second, if neither party raises a complaint of a violation of Rule 683, can the court of appeals sua sponte raise such a violation as a basis for dismissal of the appeal without running afoul of the rule against raising issues that neither party raised?  Third, does this opinion effectively cut off a party's right to an interlocutory appeal of a temporary injunction?
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Temporary injunctions must strictly follow the rules

Posted on March 30, 2010 by Mike Northrup

A couple of weeks ago, I blogged about a Dallas Court of Appeals opinion holding that a temporary injunction that fails to set a trial date on the merits is a void injunction order.  Now the San Antonio Court of Appeals gets into the act and reaffirms the strictness with which temporary injunctions are construed.

In Kotz v. Imperial Capital Bank, the court reaffirmed the principle that "[t]he procedural requirements of Rule 683 are mandatory, and an order granting a temporary injunction that fails to strictly comply with the rule is subject to being declared void and dissolved."  In Kotz, the trial court signed an injunction order with the following language:

The Court finds that Intervenors Patrick Man and Grace Man will suffer irreparable injury in their possession and use of the Subject Property in the event that the requested injunctive relief is not granted, that they have no adequate remedy at law, and that the requested injunctive relief is necessary to preserve the status quo pending final trial.

The court of appeals held that this language violated Rule 683 because it did not provide specific reasons why injury will result without injunctive relief.   After citing examples of numerous other invalidated injunctions, the court stated that the injunction "must be specific and legally sufficient on its face and not merely conclusory."

The Mans argued that the nature of the case justified deviation from Rule 683 because the case involved a dispute to real estate, which is innately unique.  Thus, the Mans argued that the court could presume irreparable injury and lack of an adequate remedy.  But the court of appeals rejected this argument as a basis for overcoming Rule 683's mandatory requirements.  The court's opinion dissolving the injunction may be found at this link.

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Temporary injunction that fails to include a trial setting is void

Posted on March 8, 2010 by Mike Northrup

The Dallas Court of Appeals held that a temporary injunction order that does not on its face set the cause for trial on the merits or fix the amount of security to be given is void and must be dissolved.  In CLST Holdings, Inc. v. Red Oak Partners, LLC, the trial court granted Red Oak Partners', Pinnacle Fund's and Red Oak Fund's application for injunctive relief to compel CLST to conduct its annual shareholder's meeting.  CLST filed an interlocutory appeal to complain and sought emergency relief. 

The court of appeals observed that when an order grants injunctive relief that is effective immediately so that it operates during the pendency of the suit, it is a temporary injunction.  The Court further held that the rules of civil procedure are mandatory and require that the order "set the cause for trial on the merits and fix the amount of security to be given by the applicant."  Further, because Rule 683 is strictly construed as to its requirements, the court of appeals held that the order must be complete on its face, such that it is unacceptible to set a trial date in a separate document.  Here, the court granted CLST's motion for emergency relief, declared the injunction void and ordered it dissolved.  The court's opinion can be found at this link.

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