NO. 12-10-00189-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

KEJZAR MOTORS, INC. d/b/a EASTEX § APPEAL FROM THE 159TH

TRACTOR & POWERSPORTS AND

JASPER FARM & RANCH SUPPLY,

APPELLANT

V. § JUDICIAL DISTRICT COURT 

KUBOTA TRACTOR CORPORATION

AND MICHAEL HAMMER,

APPELLEES § ANGELINA COUNTY, TEXAS

OPINION

Kejzar Motors, Inc., d/b/a Eastex Tractor and Powersports and Jasper Farm and Ranch 

Supply (Eastex), brings this interlocutory appeal from the trial court’s denial of its application 

for a temporary injunction against Kubota Tractor Corporation and Michael Hammer. Relying 

on the Texas Business Opportunities and Agreements Act (TBOA), Eastex raises six issues 

contending the trial court erred in denying its application. We affirm.

BACKGROUND

Kubota manufactures farm, industrial, and outdoor equipment. Eastex is a Kubota tractor 

dealer, with locations in Nacogdoches and Jasper, Texas. Owners Mark Kaiser and David Feron 

purchased the two existing dealerships in 2007. They operate those two stores as one dealership 

with two locations. In early 2010, Kubota granted a dealership to Michael Hammer, located in 

Lufkin, between Eastex’s two dealership locations.

In May 2010, Eastex filed its original petition and application for injunctive relief to 

prevent Kubota from contracting with Hammer to locate a dealership in the same trade area as 

Eastex’s stores. Eastex asserted that the new location, which is less than twenty-five miles from 
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Eastex’s Nacogdoches location, would constitute a substantial change in the competitive 

circumstances of Eastex’s contractual relationship with Kubota and lead to the eventual 

destruction of Eastex’s dealership. Eastex asserted causes of action against Kubota for violation 

of the TBOA, the Texas Deceptive Trade Practices and Consumer Protection Act, breach of 

contract and the implied covenant of good faith and fair dealing, promissory estoppel, and unjust 

enrichment. Additionally, it asserted tortious interference with contractual relations and 

prospective economic advantage against both Kubota and Hammer.

The trial court immediately signed a temporary restraining order based on Eastex’s 

statutory rights under the TBOA, ordering Kubota and Hammer to “desist and refrain from 

opening a new Kubota dealership in Angelina or Nacogdoches [C]ounty.” Two weeks later, 

after a two day hearing, the trial court denied Eastex’s application for a temporary injunction and 

dissolved the temporary restraining order. Eastex brought this interlocutory appeal. See TEX.

CIV. PRAC. & REM. CODE ANN. § 51.014(a)(4) (Vernon 2008).

TEMPORARY INJUNCTION

In its first issue, Eastex contends the trial court erred when it denied Eastex’s application 

for a temporary injunction. Eastex argues that the court erroneously concluded that Eastex had 

no probable right of recovery. Specifically, Eastex argues that Kubota violated the TBOA

because it changed the prevailing conditions, surroundings, and background of the Dealer 

Agreement when it placed a competing dealer in Lufkin after previously holding Eastex 

responsible for Angelina County. In its second issue, Eastex asserts that the trial court erred 

when it ruled that the act of placing a competing dealer in Lufkin could not constitute a 

substantial change in the competitive circumstances of a dealer agreement that unambiguously 

permits the dealer only a nonexclusive local market. Eastex further contends that the trial court’s 

ruling constitutes a declaration that the Dealer Agreement trumps the TBOA, thus rendering the 

statute meaningless. In its fifth issue, Eastex asserts that the trial court erred in not considering 

extrinsic evidence in deciding whether Kubota substantially changed the Dealer Agreement.

Standard of Review

In an interlocutory appeal from a ruling on an application for a temporary injunction, we 

do not review the merits of the applicant’s case. See Davis v. Huey, 571 S.W.2d 859, 861 (Tex. 

1978). To obtain a temporary injunction, the applicant must plead a cause of action and show a 
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probable right to the relief he seeks, and probable, imminent, and irreparable injury in the 

interim. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The applicant is not 

required to establish that he will finally prevail in the litigation. State v. Sw. Bell Tel. Co., 526 

S.W.2d 526, 528 (Tex. 1975). Whether to grant or deny a temporary injunction is within the trial 

court’s sound discretion. Butnaru, 84 S.W.3d at 204. We limit our review to whether there has 

been a clear abuse of discretion. Id. We may not substitute our judgment for that of the trial 

court; we merely determine whether the court’s action was so arbitrary as to exceed the bounds 

of reasonable discretion. Id. The trial court abuses its discretion when it misapplies the law to 

the established facts, or when the evidence does not reasonably support the conclusion that the 

applicant has a probable right of recovery. Sw. Bell Tel. Co., 526 S.W.2d at 528.

Applicable Law

Chapter 55 of the Texas Business and Commerce Code addresses industrial equipment 

dealer agreements. See TEX. BUS. & COM. CODE ANN. §§ 55.001–.201 (Vernon 2009). Section 

55.052 provides that “[a] supplier may not substantially change the competitive circumstances of 

a dealer agreement without cause.” TEX. BUS. & COM. CODE ANN. § 55.052. Further, a supplier 

may not terminate, cancel, or fail to renew a dealer agreement without cause. Id. § 55.056. A 

person injured by a violation of Chapter 55 may bring an action for an injunction and damages. 

Id. § 55.201.

Analysis

The trial court determined that, as a matter of law, Eastex does not have a probable right 

to recover under Section 55.052 “because the Dealership Agreement, which has an entirety 

clause, unambiguously provides Eastex with no exclusive territory.” The trial court concluded 

that the Dealer Agreement provides that Kubota had the right, in its sole discretion, to enter into 

Dealer Agreements with others at any location and that Eastex agreed to these terms. The court 

also concluded that the parol evidence rule precluded it from considering evidence that 

conflicted with the unambiguous provisions and terms of the Dealer Agreement. Further, the 

court concluded that Eastex did not prove a probable right of recovery or relief on its cause of 

action for violation of Section 55.056. 

We first must consider the question of whether the Dealer Agreement is ambiguous. 

Whether a contract is ambiguous is a question of law that must be decided by examining the 

contract as a whole in light of the circumstances present when the contract was entered. Sacks v. 
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Haden, 266 S.W.3d 447, 451 (Tex. 2008). A contract is not ambiguous if a court can give the 

contract a definite or certain meaning as a matter of law. Columbia Gas Transmission Corp. v. 

New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). If a written contract’s terms are 

unambiguous, then parol evidence is inadmissible to vary, add to, or contradict its terms. Sun 

Oil Co. v. Madeley, 626 S.W.2d 726, 732 (Tex. 1981); Zapata County Appraisal Dist. v. Coastal 

Oil & Gas Corp., 90 S.W.3d 847, 852 (Tex. App.–San Antonio 2002, pet. denied) (op. on reh’g).

Eastex argues that the trial court erroneously refused to consider evidence regarding what 

the parties reasonably believed to be Eastex’s local market. Paragraph 6.D. of the Dealer 

Agreement provides that Eastex shall “maintain an inventory of Products constituting adequate 

stock to serve the competitive requirements of the local market surrounding [its] Retail Store.” 

Paragraph 6.I. provides that Eastex “shall maintain the location(s) of the Retail Store(s) at the 

location(s) set forth on the first page ... of this Agreement” and “shall focus the sales, service, 

and marketing efforts for the Retail Store(s) in the Local Market(s).” Eastex argues that 

evidence related to the local market was needed to determine the competitive circumstances of 

the dealer agreement. Eastex further argues that evidence of the local market is important 

because it provides the baseline for evaluating the substantiality of the change in competitive 

circumstances that will occur when Kubota authorizes placement of a new dealer in Eastex’s 

local market. 

The Dealer Agreement, however, is written in such a way that it can be given a definite 

meaning without a definition or explanation of what the parties reasonably believed to be 

Eastex’s local market. Paragraph 1.A. of the Dealer Agreement provides that Kubota “reserves 

the right, in its sole discretion, to directly or indirectly sell Products to others and to enter into 

Dealer Sales and Service Agreements with others at any location within or without the locale 

wherein [Eastex] maintains the Retail store(s).” Regardless of what constituted Eastex’s local 

market, Kubota had the right to enter into a dealer agreement with others at any location. We 

agree with the trial court’s determination that the Dealer Agreement is not ambiguous. See New 

Ulm Gas, Ltd., 940 S.W.2d at 589. Furthermore, as there was no change in the competitive 

circumstances of the Dealer Agreement, the necessity for a baseline for evaluating the 

substantiality of a change never arises. The trial court did not err in not considering extrinsic 

evidence in deciding whether Kubota substantially changed the Dealer Agreement. See 

Madeley, 626 S.W.2d at 732. We overrule Eastex’s fifth issue.
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To prove entitlement to the temporary injunction, Eastex needed to prove a probable right 

to relief under the TBOA. Eastex alleged that Kubota violated Section 55.052, that is, 

substantially changed the competitive circumstances of their Dealer Agreement without cause, 

by appointing a new Kubota dealer in Eastex’s trade area. Paragraph 1.A. of the Dealer 

Agreement clearly refutes that assertion. That paragraph unambiguously gives Kubota the right 

to enter into dealer agreements “with others at any location within or without the locale wherein 

[Eastex] maintains” its stores. Kubota’s right to do so is part of the competitive circumstances 

contemplated by their Dealer Agreement. See Freightliner of Knoxville, Inc. v. 

DaimlerChrysler Vans, LLC, 484 F.3d 865, 869-70 (6th Cir. 2007) (business relationship 

between supplier and dealer did not amount to a change in the competitive circumstances of the 

agreement in violation of statute where the relationship was anticipated by the dealer agreement). 

Even though Section 55.056 is not mentioned either by name or by reference to its 

subject matter in Eastex’s list of issues, Eastex seems to also attack the trial court’s 

determination that Eastex has no right to relief under Section 55.056. However, it is difficult to 

discern Eastex’s reasoning. Section 55.056 provides that the supplier may not terminate a dealer 

agreement without cause. See TEX. BUS. & COM. CODE ANN. § 55.056. Eastex admits that 

Kubota has never threatened to terminate Eastex and does not argue that Kubota actually 

attempted to terminate their agreement. Instead, Eastex claims that appointing a new, competing 

dealer in Eastex’s trade area would lead to Eastex’s “destruction” and constitute a de facto

termination of the Dealer Agreement by Kubota due to loss of business. Eastex claims that it 

presented evidence predicting that “the gross margin would drop significantly” if a new Kubota 

dealer opened in Lufkin. In its brief, Eastex refers to its own evidence as “common-sense 

assumptions.” 

One of the owners of Eastex testified that Eastex was currently operating “at break even” 

and that it would not take much in lost sales to cause Eastex to go out of business. He testified 

that, based on his calculations, Eastex’s sales would drop thirty-four percent if the new dealer 

was allowed to open in Lufkin. Kubota did its own analysis and determined that the new Lufkin 

dealer would have a potential impact on Eastex of eight percent of sales in Angelina County. 

However, Kubota’s East Texas regional sales manager testified that, based on his experiences 

with other dealers, he believed that placement of a new dealer in Lufkin would lead to an 

improvement in Eastex’s sales. 
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Assuming Section 55.056 includes de facto or constructive termination, a question we do 

not address, Eastex did not show that placement of a new Kubota dealer in Lufkin would 

constitute a constructive termination of the Dealer Agreement. Faced with conflicting evidence, 

the trial court did not abuse its discretion in determining that Eastex did not prove a probable 

right of recovery under Section 55.056.

The trial court’s ruling is not, as Eastex claims, a declaration that the Dealer Agreement 

trumps the statute. Under the facts of this case, the statute is not implicated and cannot be used 

to alter the terms of the parties’ binding agreement. Because Eastex did not show a probable 

right to the relief sought, the trial court did not abuse its discretion in denying Eastex’s 

application for a temporary injunction. See Butnaru, 84 S.W.3d at 204. We overrule Eastex’s 

first and second issues.

CONCLUSION

Parol evidence was inadmissible to vary the terms of the unambiguous Dealer 

Agreement. Eastex has not shown a probable right of recovery. Therefore, the trial court did not 

abuse its discretion in denying Eastex’s application for a temporary injunction. We need not 

reach the remainder of Eastex’s issues. See TEX. R. APP. P. 47.1.

We affirm the trial court’s order denying Eastex’s application for a temporary injunction. 

BRIAN T. HOYLE

 Justice

Opinion delivered January 19, 2011.

Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

(PUBLISH)