Energy Transfer Fuel, L.P. v. Norman E. Black, Jr. and Karol Black ( 2010 )

NO. 12-09-00060-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
ENERGY TRANSFER FUEL, L.P., ' APPEAL FROM THE 173RD
APPELLANT
V. ' JUDICIAL DISTRICT COURT OF
NORMAN E. BLACK, JR. AND
KAROL BLACK, ' HENDERSON COUNTY, TEXAS
APPELLEES
MEMORANDUM OPINION
In one issue, Appellant, Energy Transfer Fuel, LP (“ETF”), contends that the trial
court abused its discretion by failing to release the bond ETF posted after obtaining a
temporary restraining order against the Appellees, Norman E. Black, Jr. and Karol Black.
ETF’s complaint pertains to two orders: the trial court’s order denying ETF’s motion to
release the bond and its order denying ETF’s motion to reconsider that ruling. We
reverse the trial court’s orders and remand with instructions.
BACKGROUND
ETF is a public gas utility and has the right of eminent domain. As a condemning
authority, ETF has the right to enter upon property to make preliminary surveys of
proposed routes along which its gas pipelines may be constructed. ETF requested
permission to enter the Blacks’ property to conduct surveying activities in connection
with a proposed pipeline route, but was refused entry. Thereafter, on July 23, 2008, ETF
petitioned the court for a temporary restraining order (“TRO”) as well as a temporary
injunction and a permanent injunction against the Blacks. On the same day, the trial
court signed an order granting a TRO prohibiting the Blacks from interfering or
attempting to interfere with ETF’s right to enter and survey the route of its pipeline
across the Blacks’ property. As a condition of issuing the TRO, the trial court ordered
ETF to post a $25,000 bond. The order also set a hearing for July 31, 2008, “to
determine whether this temporary restraining order should be made a temporary
injunction pending a full trial on the merits.” ETF deposited $25,000 cash in lieu of a
bond, which was approved by the Henderson County District Clerk.
After obtaining the TRO, ETF immediately began its surveying activities on the
Blacks’ property and completed its work on July 29, 2008. The following events then
occurred in the trial court:
July 29, 2008
ETF filed a notice of nonsuit, and sent the Blacks notice of the filing.
July 31, 2008
ETF filed a motion requesting the return of its $25,000 cash bond.
August 11, 2008
The trial court denied ETF’s motion requesting the return of its cash bond.
August 28, 2008
ETF filed a motion requesting the trial court to reconsider its refusal to release the
bond.
September 4, 2008
Counsel for ETF and counsel for two of the other restrained parties appeared for a
hearing on ETF’s motion to reconsider. The Blacks did not appear. For reasons
unrelated to the Blacks’ absence, the hearing was reset for September 10, 2008.
September 10, 2008
The trial court conducted a hearing on ETF’s motion to reconsider. Counsel for
ETF was present at the hearing along with one of the other restrained parties and
his counsel. Counsel for ETF presented oral argument, and the trial court ruled
from the bench that ETF’s motion to reconsider was denied.
November 17, 2008
The trial court signed an order denying ETF’s motion to reconsider.
December 29, 2008
ETF filed a petition for writ of mandamus in this court requesting an order
directing the trial court to (1) set aside the order denying its motion to reconsider,
(2) release ETF’s bond, and (3) issue an order of nonsuit.
February 3, 2009
The trial court signed an order dismissing “[the] cause,” but did not release the
bond.
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March 3, 2009
ETF filed a notice of appeal complaining of the trial court’s failure to release the
bond.
The trial court’s dismissal order rendered ETF’s petition for writ of mandamus
moot except as to ETF’s request for an order of nonsuit. We denied mandamus relief
after concluding that appeal was an adequate remedy for ETF to challenge the trial
court’s rulings on the bond. See In re Energy Transfer Fuel, L.P., 298 S.W.3d 361, 366
(Tex. App.–Tyler 2009, orig. proceeding). Specifically, we concluded that the order
denying ETF’s motion to release the bond and the order denying ETF’s motion to
reconsider that ruling merged into the final order dismissing the case and were
appealable. See Webb v. Jorns, 488 S.W.2d 407, 408-09 (Tex. 1973) (interlocutory order
merges into final judgment and becomes final for purposes of appeal); Douglas v. Am.
Title Co., 196 S.W.3d 876, 877, 879 n.6 (Tex. App.–Houston [1st Dist.] 2006, no pet.)
(vexatious litigant order merged into final judgment and was appealable even though
final judgment not appealed). ETF now appeals from those orders.1
FAILURE TO RELEASE THE BOND
ETF contends that, in light of its nonsuit and the subsequent order dismissing the
underlying proceeding, the trial court was required to release the $25,000 cash bond. The
Blacks have not filed a brief.
Standard of Review
ETF states in its brief that the trial court’s orders are reviewable for abuse of
discretion. We have not located any authority prescribing the standard of review for the
precise issue presented here. But typically, the abuse of discretion standard is applied to
procedural or other trial management determinations. In re Doe, 19 S.W.3d 249, 253
(Tex. 2000). Consequently, we will review the appealed orders for an abuse of
discretion. See id.
A trial court commits an abuse of discretion when it acts “without reference to
any guiding rules and principles.” Downer v. Aquamarine Operators, Inc., 701 S.W.2d
1
At ETF’s request, we have taken judicial notice of our file in appellate cause number 12-08-
00487-CV. See, e.g., Tello v. Bank One, N.A., 218 S.W.3d 109, 113 n.4 (Tex. App.–Houston [14th Dist.]
2007, no pet.) (appellate court took judicial notice of pertinent pleadings included in appellate record for
another appeal in same trial court case).
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238, 241-42 (Tex. 1985). The “mere fact that a trial judge may decide a matter within his
discretionary authority in a different manner than an appellate judge in a similar
circumstance does not demonstrate that an abuse of discretion occurred.” Id. at 242. A
trial court has no discretion in determining what the law is, which law governs, or how to
apply the law. Univ. of Tex. Health Sci. Ctr. v. Gutierrez, 237 S.W.3d 869, 871 n.1
(Tex. App.–Houston [1st Dist.] 2007, pet. denied). To the extent that an issue turns on a
question of law, the standard of review is the same “regardless of whether it is described
as abuse of discretion or de novo.” Id.
Applicable Law
In the order granting any TRO, the court must fix the amount of security to be
given by the applicant. TEX. R. CIV. P. 684.2 Before the issuance of the TRO, the
applicant must execute and file with the clerk a bond to the adverse party, with two or
more good and sufficient sureties, to be approved by the clerk, in the sum fixed by the
judge. Id. The bond must be conditioned that the applicant will abide the decision made
in the cause, and will pay all sums adjudged against it if the TRO is dissolved, either in
whole or in part. Id. The applicant may instead deposit cash in lieu of filing the bond.
See TEX. R. CIV. P. 14c.
A plaintiff may take a nonsuit at any time before it has introduced all of its
evidence other than rebuttal evidence. TEX. R. CIV. P. 162. In a bench trial, a plaintiff
can take a nonsuit at any time before the decision in the case is announced. See Hyundai
Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (stating that “[o]nce a judge
announces a decision that adjudicates a claim, that claim is no longer subject to the
plaintiff’s right to nonsuit”). A plaintiff’s right to take a nonsuit is unqualified and
absolute as long as the defendant has not made a claim for affirmative relief. BHP
Petroleum Co. v. Millard, 800 S.W.2d 838, 840-41 (Tex. 1990). A nonsuit may be taken
after a temporary restraining order has been obtained but before the hearing on the
temporary injunction. See Payne v. Nichols, 176 S.W.2d 961, 963-64 (Tex. Civ. App.–
Galveston 1943, writ ref’d w.o.m.) (holding that nonsuit may be taken after temporary
injunction obtained but before hearing on permanent injunction, even where suit had been
2
Rule 684 also applies to temporary injunctions. Therefore, in our analysis, we cite authority
relating to TROs and also authority relating to temporary injunctions.
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pending for two years and nonsuit was taken when case came up for trial) (interpreting
and applying predecessors to rules 162 and 684). But the nonsuit does not defeat the
right of a restrained party who is damaged by the temporary restraining order to sue for
wrongful injunction. See id. at 963.
It has long been established that a party who wrongfully obtains injunctive
restraint against another is liable for damages caused by the issuance of the injunction.
See Parks v. O’Connor, 70 Tex. 377, 388, 8 S.W.104, 107 (1888). An injunction is
wrongful if its issuance was wrongful at its inception or if it was continued in effect due
to some wrong on the part of the proponent. I.P. Farms v. Exxon Pipeline Co., 646
S.W.2d 544, 545 (Tex. App.–Houston [1st Dist.] 1982, no writ); Craddock v. Overstreet,
435 S.W.2d 607, 609 (Tex. Civ. App.–Tyler 1968, writ ref’d n.r.e.). Texas recognizes
two separate causes of action for wrongful injunction, one upon the bond ordinarily filed
to obtain the TRO or injunction, and the other for malicious prosecution. DeSantis v.
Wackenhut Corp., 793 S.W.2d 670, 685 (Tex. 990). The two actions differ in the kind of
wrong that must be shown to establish liability and in the amount of recovery. Id. A
claim for wrongful injunction can be predicated upon the wrongful issuance of a TRO.
Id. at 685-86.
A cause of action upon an injunction bond is predicated upon a breach of the
condition of the bond. Id. at 685. As pertinent to the case at hand, the claimant must
prove that the TRO was issued when it should not have been, and that it was later
dissolved. Id. at 685-86. The claimant need not prove that the TRO was obtained
maliciously or without probable cause. Id. at 686. The purpose of the bond is to protect
the defendant from the harm he may sustain as a result of temporary relief granted upon
the reduced showing required of the injunction plaintiff, pending full consideration of all
issues. Id. The damages under this claim are limited by the amount of the bond. Id.
A cause of action for malicious prosecution requires the claimant prove the
injunction suit was prosecuted maliciously and without probable cause, and was
terminated in his favor. Id. In this instance, the injunction defendant recovers the full
amount of his damages. Id.
Under either cause of action, the claimant must prove that issuance of the TRO
resulted in damages. Id. Unless the TRO was wrongfully issued, damages, except to
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property, are precluded as a matter of law. See I.P. Farms, 646 S.W.2d at 545. But the
claimant “cannot recover for having been prohibited from doing something which he had
no right to do.” DeSantis, 793 S.W.2d at 686; see also Beathard Joint Venture v. W.
Houston Airport Corp., 72 S.W.3d 426, 435 (Tex. App.–Texarkana 2002, no pet.)
(injunction not wrongfully issued where airport’s efforts to obtain injunction were based
on an assertion of its own legal rights not to have Beathard or Beathard’s tenants trespass
on airport facilities).
Application
Here, the trial court denied ETF’s motion to release its bond. ETF filed a motion
for reconsideration of that ruling, and the trial court conducted a hearing on the motion.
At the hearing, the court agreed with ETF that it had a right to take a nonsuit, but
expressed concern that ETF did so before the restrained parties’ answer date and before
the temporary injunction hearing set for July 31.
ETF’s counsel briefly recounted the procedural history of the case, and asserted
that ETF was required to dismiss its suit when its surveying activities were completed to
avoid wrongfully prolonging the TRO. Counsel then argued that if the restrained parties
believed their property had been harmed, they had the right to “come back and seek
property damages from [ETF] at any time.” Counsel further offered to present testimony
regarding the propriety of obtaining the TRO, but the trial court did not allow the
testimony.
The trial court responded that the restrained parties still had a right to bring an
action on the propriety of the TRO, and that if the bond were released, they could not sue
on the bond. The court cited that outcome as the reason it refused to release the bond.
When asked by ETF’s counsel whether the bond would be held indefinitely, the court
responded that it would “until there is some either disposition or loss of [the restrained
parties’] right to sue on the TRO.” Counsel stated that she presumed the statute of
limitations for any action on the TRO would be two years, and asked whether the court
intended to hold the bond for two years. The court did not specifically answer counsel’s
inquiry. The Blacks did not attend the hearing.
Initially, we note that we have located no authority supporting the retention, after
final judgment, of a bond posted as a condition to the issuance of a TRO. See Lovall v.
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Yen, No. 14-07-00770-CV, 2008 WL 361373, at *2 (Tex. App.–Houston [14th Dist.]
Feb. 12, 2008, no pet.) (mem. op.) (stating that bond disbursement order is merely a
ministerial act incident to final judgment). Even assuming, however, that the bond could
be retained after final judgment under special circumstances, no such circumstances are
present here.
As ETF points out, the Blacks did not appear and move for dissolution or
modification of the TRO. See TEX. R. CIV. P. 680 (“On two days’ notice to the party who
obtained the [TRO] without notice or on such shorter notice to that party as the court may
prescribe, the adverse party may appear and move its dissolution or modification . . . .”).3
Moreover, they did not (1) plead a claim for affirmative relief prior to ETF’s nonsuit, (2)
file a response to ETF’s motion for release of the bond, (3) attend the September 10,
2008, hearing, (4) notify the court that they intended to assert a wrongful injunction claim
against ETF; or (5) otherwise provide the trial court with any argument or authority in
opposition to ETF’s motion for reconsideration. In other words, the Blacks did nothing
to show that they objected to the release of ETF’s bond or would be adversely affected by
its release.
In light of the Blacks’ inaction resulting in an absence of pleadings or objections
in opposition to ETF’s motion to release its bond and its motion to reconsider the trial
court’s ruling, we hold that the trial court abused its discretion in denying the motions.
See Goodin v. Jolliff, 257 S.W.3d 341, 353 (Tex. App.–Fort Worth 2008, no pet.) (error
to release bond to enjoined party in absence of pleading or proof that she was damaged
by issuance of temporary injunction); Am. Jet Charter, Inc. v. Cobbs, 184 S.W.3d 369,
377 (Tex. App.–Dallas 2006, no pet.) (trial court did not err in denying posttrial request
to reinstate injunction bond where enjoined party did not object to prejudgment release of
bond). Accordingly, we reverse the trial court’s orders denying ETF’s motion to release
its bond and denying ETF’s motion for reconsideration of the order denying release of the
bond, and remand with instructions to the trial court to order release of the bond to ETF.
3
We do not suggest that recovery of damages for wrongful injunction is foreclosed if the
restrained party does not avail itself of this procedure. See Lindsey v. Hart, 260 S.W. 286, 289 (Tex. Civ.
App.–Beaumont 1924), modified on other grounds, 276 S.W. 199 (Tex. Comm’n App. 1925, jdgmt.
adopted) (holding that enjoined party is not estopped to claim damages by failing to sooner move to
dissolve the injunction).
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SAM GRIFFITH
Justice
Opinion delivered August 31, 2010.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
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