Forrest Property Management, Inc. and Charles Michael Forrest v. William Clinton Forrest ( 2010 )


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  •                                    IN THE
    TENTH COURT OF APPEALS
    No. 10-09-00338-CV
    FORREST PROPERTY MANAGEMENT, INC.
    AND CHARLES MICHAEL FORREST,
    Appellants
    v.
    WILLIAM CLINTON FORREST,
    Appellee
    From the 18th District Court
    Johnson County, Texas
    Trial Court No. C200900357
    MEMORANDUM OPINION
    Forrest Property Management, Inc. and Charles Michael Forrest (“Mike”) have
    appealed the granting of a temporary injunction ordering them to “desist and refrain
    from mortgaging, hypothecating or otherwise encumbering any property owned
    and/or managed by the Forrest Cleburne Properties, L.P.” William Clinton Forrest
    (“Clint”) had sought the injunction to prevent Mike from using the real estate owned by
    Forrest Cleburne Properties, L.P., as collateral for a line of credit for floor plan financing
    for a separate entity, Forrest Chevrolet-Cadillac, Inc. The appellants complain that the
    trial court abused its discretion by granting the temporary injunction because the
    temporary injunction lacked specificity, because Clint did not establish all of the
    required grounds for the issuance of a temporary injunction, and because the findings
    listed in the injunction are not specific or supported by the facts. Because we find that
    the trial court abused its discretion in finding that Clint established a probable,
    imminent, and irreparable injury, we reverse the trial court’s order, dissolve the
    temporary injunction, and remand this cause to the trial court for further proceedings.
    Facts
    Forrest Cleburne Properties, L.P. was formed as a Texas Limited Liability
    Partnership. Forrest Property Management, Inc. was named as the general partner and
    held a one percent (1%) ownership interest. Forrest Property Management, Inc. is
    equally owned by Mike and the Martha J. Forrest Management Trust. The limited
    partners and their respective ownership interests are: Clint, with twenty-five percent
    (25%); Mike, with twenty-four and one-half percent (24.5%); and the Martha J. Forrest
    Management Trust with forty-nine and one-half percent (49.5%). Some time thereafter,
    the entity currently known as Forrest Chevrolet-Cadillac, Inc. conveyed approximately
    fifty-two (52) acres of real estate to Forrest Cleburne Properties, L.P. for $2.145 million,
    which was secured by a note and deed of trust. That same day, the property was leased
    back to Forrest Chevrolet-Cadillac, Inc. for $20,000.00 per month.          Mike was the
    president of Forrest Property Management, Inc. and Forrest Chevrolet-Cadillac, Inc., as
    well as a trustee in the Martha J. Forrest Management Trust.
    At one time, several acres of the tract were sold to a third party for
    approximately three million dollars. A natural gas production company and pipeline
    Forrest Property Management, Inc. v. Forrest                                          Page 2
    company entered into a lease agreement with Forrest Cleburne Properties, Inc. It is not
    clear in the record what the terms of the agreement were other than Forrest Cleburne
    Properties, Inc. had been paid a one-time payment and received lease payments and
    royalties in accordance with the lease agreement.
    When General Motors filed for bankruptcy protection, Forrest Chevrolet-
    Cadillac, Inc.’s franchise was terminated or suspended, which resulted in the loss of
    their floor plan financing through General Motors Acceptance Corporation. In order to
    find a way to obtain a new line of credit, Mike intended to use the real property owned
    by Forrest Cleburne Properties, Inc., as collateral to secure the line of credit to Forrest
    Chevrolet-Cadillac, Inc.
    Clint filed a petition against Forrest Property Management, Inc. and Charles
    Michael Forrest alleging causes of action for breach of fiduciary duty, tortious
    interference, and breach of the partnership agreement. He also obtained a temporary
    restraining order against Forrest Property Management, Inc. and Mike. This appeal
    stems from the temporary injunction granted by the trial court after a hearing.
    Standard of Review
    The decision to grant or deny a temporary injunction lies within the sound
    discretion of the trial court. Butnaru v. Ford Motor Co., 
    84 S.W.3d 198
    , 204 (Tex. 2002). A
    reviewing court should reverse an order granting injunctive relief only if the trial court
    abused that discretion. 
    Id. The reviewing
    court must not substitute its judgment for the
    trial court's judgment unless the trial court's action was so arbitrary that it exceeded the
    bounds of reasonable discretion. 
    Id. Forrest Property
    Management, Inc. v. Forrest                                          Page 3
    For purposes of this appeal, we presume all findings necessary to support the
    trial court’s order, and affirm the order if there is any legal theory sufficiently raised by
    the evidence to support it. Davis v. Huey, 
    571 S.W.2d 859
    , 862 (Tex. 1978). Generally, if
    some evidence reasonably supports the trial court’s decision, the trial court does not
    abuse its discretion. 
    Butnaru, 84 S.W.3d at 211
    (citing 
    Davis, 571 S.W.2d at 862
    ).
    The purpose of a temporary injunction is to maintain the status quo of the
    litigation’s subject matter pending a trial on the merits. 
    Butnaru, 84 S.W.3d at 204
    .
    Status quo has long been defined as “the last, actual, peaceable, non-contested status
    which preceded the pending controversy.” State v. Sw. Bell Tel. Co., 
    526 S.W.2d 526
    , 528
    (Tex. 1975). The applicant must plead and prove three elements to obtain a temporary
    injunction: (1) a cause of action against the defendant; (2) a probable right to the relief
    sought; and (3) a probable, imminent, and irreparable injury in the interim. 
    Butnaru, 84 S.W.3d at 204
    . An injury is irreparable if the injured party cannot be adequately
    compensated in damages or if the damages cannot be measured by any certain
    pecuniary standard. 
    Id. Failure to
    Establish Elements
    This Court has followed the standard set forth in Butnaru for determining
    whether or not a temporary injunction was properly instituted by a trial court. See
    Manheim v. Adam Dev. Props., L.P., No. 10-09-00259-CV, 2009 Tex. App. LEXIS 9824 (Tex.
    App.—Waco Dec. 30, 2009, no pet. h.). Appellants complain that the trial court abused
    its discretion in granting the temporary injunction because Appellee did not meet his
    burden of proof to establish any of the three elements required. Because we agree with
    Forrest Property Management, Inc. v. Forrest                                           Page 4
    Appellants that Appellee did not meet his burden of proof regarding a probable,
    imminent, and irreparable injury, we will only address that element.
    Probable, Imminent, and Irreparable Injury
    The Appellants complain that the trial court abused its discretion by finding the
    existence of probable, imminent, and irreparable injury in the interim because there was
    no evidence that Clint’s damages were incapable of calculation, no evidence that either
    of the Appellants were incapable of responding in damages, and no evidence that there
    is no certain pecuniary standard for measuring Clint’s alleged damages.
    Clint contends that every parcel of real estate is unique, which should be
    considered in determining whether the injury is irreparable. Clint further contends that
    because Mike has already driven Forrest Chevrolet-Cadillac, Inc. into insolvency, there
    is a risk that by using the partnership’s real estate to assist that entity, Mike will cause
    the loss of the real estate. This would then result in a damage award that would come
    too late to save Forrest Cleburne Properties, L.P.      Further, Clint contends that the
    damages are difficult to calculate because of the real estate involved and the questions
    regarding the accounting practices of Mike and the various entities under his control.
    Generally, money damages may be inadequate to compensate an injured party
    for the loss of property deemed to be legally “unique” or irreplaceable. N. Cypress Med.
    Ctr. Operating Co. v. St. Laurent, 
    296 S.W.3d 171
    , 175 (Tex. App.—Houston [14th Dist.]
    2009, no pet.). The “uniqueness” rule is most commonly applied when the disputed
    property involves real estate. See Lavigne v. Holder, 
    186 S.W.3d 625
    , 629 (Tex. App.—
    Fort Worth 2006, no pet.); In re Stark, 
    126 S.W.3d 635
    , 640 (Tex. App.—Beaumont 2004,
    Forrest Property Management, Inc. v. Forrest                                          Page 5
    orig. proceeding [mand. denied]) (finding that real estate is unique and therefore, may
    constitute some evidence of an irreparable injury).
    The partnership agreement between the parties states that the interest of each
    partner is personal property and that “[a]ll property and interests in the property, real
    or personal, owned by the Partnership shall be deemed owned by the Partnership as an
    entity, and no Partner or Assignee, individually, shall have any ownership of such
    property or interest owned by the Partnership except as a Partner in the Partnership or
    an Assignee. Each of the Partners and the Assignees irrevocably waives, …, any right
    that such Partner or Assignee may have to maintain any action for partition with
    respect to any of the assets of the Partnership.” Clint’s interest in the partnership is that
    of a limited partner in Forrest Cleburne Properties, L.P., and he has no direct ownership
    interest in the real property at all.
    Because Clint’s interest is not an interest in real estate, we do not consider the
    evidence regarding the unique nature of that real estate to be evidence of an irreparable
    injury or of the existence of an inadequate remedy at law.         See N. Cypress Med. Ctr.
    Operating 
    Co., 296 S.W.3d at 175
    (limited partner’s shares of the limited partnership not
    sufficient to constitute a unique interest in real estate.); see also, e.g., Doerwald v. MBank
    Fort Worth, N.A., 
    740 S.W.2d 86
    , 90-91 (Tex. App.—Fort Worth 1987, no writ) (ample
    evidence to support trial court’s finding that applicant failed to prove irreparable injury
    or inadequate remedy at law from foreclosure where applicant did not own equity
    interest in property).
    Forrest Property Management, Inc. v. Forrest                                            Page 6
    Further, it is important to note that the burden of proof to establish a probable,
    immediate, and irreparable injury was on Clint. See N. Cypress Med. Ctr. Operating 
    Co., 296 S.W.3d at 177
    ; Marketshare Telecom, L.L.C. v. Ericsson, Inc., 
    198 S.W.3d 908
    , 925 (Tex.
    App.—Dallas 2006, no pet.). A party proves irreparable injury for injunction purposes
    by proving that damages would not adequately compensate the injured party or cannot
    be measured by any certain pecuniary standard. 
    Butnaru, 84 S.W.3d at 204
    ; Frequent
    Flyer Depot, Inc. v. American Airlines, Inc., 
    281 S.W.3d 215
    , 227 (Tex. App.—Fort Worth
    2009, pet. denied). Damages are an inadequate remedy if they are difficult to calculate.
    Frequent Flyer 
    Depot, 281 S.W.3d at 228-29
    .
    In the hearing, Mike Forrest testified that he was uncertain as to where certain
    monies had gone, but that his accountants had all of the financial information of the
    partnership. Clint’s claims were for money damages for a breach of fiduciary duty and
    tortious interference. Clint claims that Mike had driven Forrest Chevrolet-Cadillac, Inc.
    into insolvency.      Further, Clint contends that the insolvency of Forrest Chevrolet-
    Cadillac, Inc., taken with Mike’s intent to use the property of the partnership to
    resurrect it, establishes a substantial risk that the real property would be lost. This
    would render any damage award too late. However, no evidence was presented at the
    temporary injunction hearing regarding the financial condition of either Mike Forrest
    individually or of Forrest Property Management, Inc. for the trial court to determine
    whether either Mike or Forrest Property Management, Inc. were incapable of
    responding to monetary damages.
    Forrest Property Management, Inc. v. Forrest                                         Page 7
    Clint further contends that his damages are difficult to calculate due to the
    unique nature of the property at issue and “the convoluted mess of accounting and
    business practices utilized by the partnership, the appellant and his dealership.”
    Because we have determined that the unique nature of the real property is not a factor,
    we turn to the calculation of damages. While there was testimony of some large sums
    of money that were unaccounted for, there was also testimony that the accountants
    used for the limited partnership and the other entities involved were in possession of all
    of the financial information for the entities and that the monies could be accounted for
    by them.
    Thus, on the record presented, Clint did not meet his burden of proof to establish
    that money damages could not compensate him or that such damages are incapable of
    calculation. Absent proof of an irreparable injury, Clint was not entitled to injunctive
    relief. See N. Cypress Med. Ctr. Operating 
    Co., 296 S.W.3d at 175
    . Accordingly, we
    reverse the trial court’s order, dissolve the temporary injunction, and remand this cause
    to the trial court for further proceedings.
    Conclusion
    We find that the trial court abused its discretion in granting the temporary
    injunction.    Therefore, we reverse the trial court’s order, dissolve the temporary
    injunction, and remand this cause to the trial court for further proceedings.
    TOM GRAY
    Chief Justice
    Forrest Property Management, Inc. v. Forrest                                        Page 8
    Before Chief Justice Gray,
    Justice Reyna, and
    Justice Davis
    Reversed and remanded
    Opinion delivered and filed July 21, 2010
    [CV06]
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