Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

 What is the legal effect of a provision voiding a contract?  This was the issue in the Fourth Court of Appeals case Mr. W. Fireworks Inc. v. Ozuna.

In the case, Mr. W, between September of 2002 and February of 2003, contracted for the exclusive right to sell firework on the land of three different property owners.  Each contract provided two key provisions: (1) the contract was voidable if fireworks became unlawful during the term of the contract; and (2) the lessors agreed not to sell or lease a part of their property to any of Mr. W's competitors for ten years after the lease was terminated. 

Although Mr. W originally was able to sell fireworks at all three locations, by January of 2006, it was no longer legal to sell fireworks on any of them, and thus the contract was void.  In March of 2008, however, the city of San Antonio disannexed the lessors' properties allowing them to sell fireworks on their property again.  The three lessors then contracted with Alamo Fireworks, Inc., one of Mr. W's competitors, to sell fireworks on their property.

When Mr. W learned of the new contracts it sued the three lessors for breach of contract.  Mr. W argued that "[t]he phrase 'shall become void' was a 'contingent limitation' that created 'a voidable agreement, which the restrictive covenant [ten-year restriction] survive[d]."  In other words, the contracts terminated as to the lease, but not as to the ten-year restriction.  The lessors successfully moved for summary judgment arguing the entire contract was void, including the ten-year restriction.  Mr. W appealed.

Was the ten-year restriction enforceable in light of the "void" language?

No, according to the San Antonio Court of Appeals.  As the court explained, when a contract is voidable, it means that the contract may either be set aside or enforced in its entirety.  In other words, Mr. W cannot argue that the illegalization of fireworks made the contract voidable as to its lease obligation, but not to the ten-year restriction.  Thus, the San Antonio Court of Appeals affirmed the trial court's judgment that the entire agreement was void.

Here is the opinion.

• Email This
• Print
• Comments
• Trackbacks
• Share Link