Court Opinion

ID: 9409171
Source: CourtListenerOpinion
Date Created: 2023-07-16 07:11:04.923834+00
Date Added: 2024-06-11T17:20:49.196731
License: Public Domain

Petition for Writ of Mandamus Conditionally Granted in Part and Denied in
Part Memorandum Opinion filed July 13, 2023.

                                     In The

                    Fourteenth Court of Appeals

                               NO. 14-22-00913-CV

                       IN RE BRIAN NGUYEN, Relator

                         ORIGINAL PROCEEDING
                           WRIT OF MANDAMUS
                              80th District Court
                             Harris County, Texas
                       Trial Court Cause No. 2022-63128

                        MEMORANDUM OPINION

      On December 12, 2022, relator Brian Nguyen filed a petition for writ of
mandamus in this Court. See Tex. Gov’t Code Ann. § 22.221; see also Tex. R.
App. P. 52. In the petition, relator asks this Court to compel the Honorable
Jeralynn Manor, presiding judge of the 80th District Court of Harris County, to set
aside the following orders of the trial court: (1) the October 12, 2022 order
granting a temporary injunction; (2) the October 18, 2022, order granting sanctions
against Nguyen; (3) the October 18, 2022 order granting Nguyen’s motion to
compel arbitration only to the extent the trial court denied Nguyen’s plea in
abatement pending arbitration; and (4) the December 9, 2022 order denying
Nguyen’s motion for reconsideration and plea in abatement. We conditionally
grant the petition for writ of mandamus in part and deny in part.

                               I.     BACKGROUND

      On September 29, 2022, Fan Chen filed suit against Brian Nguyen seeking a
declaratory judgment concerning his rights related to a dissolution of their law
firm, Nguyen & Chen. Chen also sued for breach of contract and requested a
temporary restraining order (“TRO”), temporary injunction, and permanent
injunction against Nguyen. On September 30, 2022, the trial court signed an ex
parte TRO restraining Nguyen as follows:

      a.     Restricting or interfering Chen’s use or access to Old Firm
             assets and property, including but not limited to email, website,
             social media accounts, financial accounts, office space and
             supplies;
      b.     Restricting or impeding Chen’s access to the Old Firm’s
             domain name hosted by GoDaddy, including email addresses
             and archived emails;
      c.     Restricting or impeding Chen’s access to the Old Firm’s offsite
             storage unit;

      d.     Restricting or impeding Chen’s access to the Old Firm’s clients;

      e.     Restricting or impeding Chen’s access to the Old Firm’s client
             files, whether those files are in paper or electronic form;

      f.     Informing security or any other person that Chen is not allowed
             on the Old Firm’s offices or offsite storage unit;
                                         2
      g.        Pointing the Old Firm’s website to the Nguyen Firm’s website;

      h.        Listing the Old Firm’s phone numbers as the Nguyen Firm’s
                phone numbers;

      i.        Interfering with Chen’s relationship with any of the Old Firm’s
                clients, vendors, and his team members;

      j.        Transferring, using, or disposing of the Old Firm’s money or
                collections.

Additionally, the trial court ordered Nguyen to produce documents within five
days and give his deposition within four days of the documents being produced.
The trial court also set a temporary injunction hearing for October 10, 2022.

      On October 1, 2022, Nguyen filed an “emergency plea in abatement and
emergency motion to compel contractually agreed ADR.” Nguyen also filed a
request for emergency hearing on his emergency plea in abatement and emergency
motion to compel contractually agreed ADR. The next day, October 2, 2022,
Nguyen filed a counterclaim against Chen subject to the motion to compel. In the
underlying trial court, the parties agreed that the merits of the dispute were subject
to mandatory arbitration under the parties’ partnership agreement. 1

      1
           The partnership agreement provided:
      Any controversy or claim arising out of or relating to this Agreement, or the
      breach thereof, shall be determined by final and binding arbitration administered
      by the American Arbitration Association (“AAA”) under its Commercial
      Arbitration Rules and Mediation Procedures (“Commercial Rules”). The award
      rendered by the arbitrator shall be final and binding on the parties and may be
      entered and enforced in any court having jurisdiction. The seat or place of
      arbitration shall be Houston, TX. Each party shall pay its own legal and other
      costs relating to the arbitration regardless of the outcome. FC and BTN commit to
      resolve any conflicts or problems in good faith prior to escalating to arbitration.
                                                 3
      Chen filed a motion for contempt alleging that Nguyen violated the trial
court’s September 30, 2022 TRO. Thereafter, on Thursday, October 6, 2022, the
trial court conducted a hearing and ordered Nguyen’s deposition to be taken
between “now and Sunday” so that it would be completed by the Monday, October
10, 2022 temporary injunction hearing.

      Chen noticed Nguyen’s deposition for Sunday, October 9, 2022.                     On
October 10, 2022, Chen filed a second motion for contempt alleging that Nguyen
violated the September 30, 2022 deposition order when he “appeared by Zoom at
3:00 pm, but with his newborn child in his arms, a cacophony of sound from his
other children playing musical instruments, an audio connection where the court
report[er], counsel, and/or the videographer, and an all around [sic] farce of an
‘appearance’ to comply with [the] deposition [order].”

      On October 10, 2022, the trial court conducted a hearing on Chen’s request
for a temporary injunction.       At the hearing, the trial court granted Chen a
temporary injunction stating as follows:

      At this time the Court finds for the plaintiff. I’m going to order
      temporary injunction with the same language that allows access to the
      plaintiff’s 20 or so attorneys that have moved along with him to have
      access to the e-mail, and that – it would do both of you well to get
      together on how to decide the access carries over to the plaintiff so
      that defendant doesn’t have to bear the financial burden.
                                          ***

      The language in the TRO that addresses the social media as well as
      the e-mail as well as the Web site is to remain the same except when it

      This agreement will be governed by and construed in accordance with the laws of
      the State of Texas.
                                            4
        comes to the e-mail. His team should have access to the GoDaddy,
        and at some point should come up with a way to transfer the financial
        liability over to the plaintiff.
The trial court signed Chen’s application for temporary injunction on October 12,
2022.

        On October 17, 2022, the trial court began a hearing on Chen’s second
motion for contempt and sanctions. During the hearing, however, Chen’s counsel
abandoned contempt and elected to move for sanctions on the issue of Nguyen’s
failure to appear for deposition.       Although Nguyen’s counsel opposed going
forward on a sanctions hearing because it was not properly noticed, the trial court
disagreed and proceeded with an evidentiary hearing on sanctions. The trial court
found in favor of Chen and sanctioned Nguyen in the amount of $9,900.00.

        Additionally, during the hearing on October 17, the trial court heard
Nguyen’s motion to compel arbitration and plea in abatement. The trial court
commented on the record about arbitration and abatement:

        I know that this case – I can look at the language and tell that it is
        going to arbitration, but as I stated earlier, I’m not going to abate the
        case while it’s going to arbitration because there’s too many – there’s
        too many temporary – there’s too many injunctive problems
        associated with the case at this time.

                                          ***

        But like I said, I’m not going to abate the case. So what I’m going to
        ask you to do is – you can draft an order that I’ll sign compelling this
        case to arbitration, but the – the temporary restraining order is still in
        – I mean, the TI is still in effect.

                                            5
On October 18, 2022, the trial court granted Nguyen’s motion to compel
arbitration; however, the trial court denied Nguyen’s motion to abate the case
pending arbitration.      Additionally, on October 18, 2022, the trial court
memorialized the sanctions against Nguyen for his conduct during a court ordered
deposition. In the order, the trial court found as follows:

      The Court finds that that Brian Nguyen failed to appear for his
      deposition as previously Order by this Court on or before October 6,
      2022 and then subsequently on or before October 9, 2022. The Court
      finds that Brian Nguyen, while physically present on October 9, 2022
      for a video deposition, failed to provide an environment without
      disturbance or distraction for the deposition to be conducted in any
      meaningful manner. Plaintiff, through his counsel, put on evidence of
      the costs associated with preparing for the deposition along with the
      costs from the videographer and court reporter. The Court finds that
      the attorney’s fees in the amount of $8,990 were reasonable and
      necessary attorney’s fees incurred for the preparation and taking of the
      deposition. In addition, the Court finds that the $500 cost for each, the
      videographer and court reporter, are reasonable.

      IT IS, THEREFORE, ORDERED, ADJUGED AND DECREED that
      Defendant Brian Nguyen is sanctioned for his misconducted
      associated with his deposition in the amount of $9,990. Defendant
      shall pay this amount to Plaintiff’s counsel, Ashish Mahendru, within
      10 days of this Court’s entry of this Order.
      Nguyen filed a motion requesting the trial court to reconsider its denial of
his motion to abate the case pending arbitration as well as a motion to dissolve the
temporary injunction.

      On October 22, 2022, Nguyen filed a notice of appeal from the trial court’s
“Order Granting Brian Nguyen’s Motion to Compel Contractually Agreed ADR
and Denying Nguyen’s Plea in Abatement.” This Court dismissed his appeal for
                                          6
want of jurisdiction. See Nguyen v. Chen, No. 14-22-00783-CV, 2023 WL 166820
(Tex. App.—Houston [14th Dist.] Jan. 12, 2023, no writ) (per curiam) (mem. op.).2

        On December 9, 2022, the trial court denied Nguyen’s motion to reconsider
the denial of his request to abate pending arbitration and to dissolve the temporary
injunction. This original proceeding followed.

        In his petition for writ of mandamus, Nguyen argues that the trial court
abused its discretion by signing the temporary injunction, ordering sanctions
against Nguyen, and refusing to stay/abate the case pending arbitration.                             On
February 13, 2023, this Court requested from Chen a response to Nguyen’s petition
for writ of mandamus. To date, Chen has not filed a response.

                                         II.      ANALYSIS

A.      STANDARD OF REVIEW

        Ordinarily, to be entitled to mandamus relief, relator must establish that
(1) the trial court abused its discretion; and (2) no adequate remedy by appeal
exists. See In re Christianson Air Conditioning & Plumbing, LLC, 639 S.W.3d
671, 681 (Tex. 2022) (orig. proceeding). A trial court clearly abuses its discretion
if it reaches a decision so arbitrary and unreasonable as to amount to a clear and
prejudicial error of law or if it clearly fails to analyze the law correctly or apply the
law correctly to the facts. In re H.E.B. Grocery Co., L.P., 492 S.W.3d 300, 302–03
(Tex. 2016) (orig. proceeding) (per curiam); In re Cerberus Capital Mgmt. L.P.,
164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam). The relator

        2
            We take judicial notice of our own records in the direct appeal–i.e., the clerk’s records and
reporter’s records–as they involve the same parties and the same subject matter. See Douglas v. Am. Title
Co., 196 S.W.3d 876, 878 n.1 (Tex. App.—Houston [1st Dist.] 2006, no pet.).
                                                   7
must establish that the trial court could reasonably have reached only one decision.
Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding).

      Because there is no provision allowing for the interlocutory appeal of the
denial of a motion to abate pending arbitration, mandamus is the appropriate
remedy to correct a clear abuse of discretion. See Chambers v. O’Quinn, 242
S.W.3d 30, 31–32 (Tex. 2007) (per curiam) (holding that neither the Texas
Arbitration Act nor the Federal Arbitration Act provide for interlocutory appeals of
orders granting or compelling arbitration).

B.    TRIAL COURT ERRED IN HOLDING A TEMPORARY INJUNCTION HEARING AND
      ISSUING A TEMPORARY INJUNCTION               AFTER    MOTION     TO   COMPEL
      ARBITRATION HAD BEEN INVOKED

      Nguyen asserts that the trial court abused its discretion by conducting an
injunction hearing and issuing a temporary injunction after Nguyen filed an
undisputed motion to compel arbitration.

      Once the trial court concludes that that an agreement to arbitrate exists and
that the claims raised are within the agreement’s scope, the trial court has no
discretion but to compel arbitration and stay its own proceedings pending
arbitration. See In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753–54 & n.11 (Tex.
2001) (orig. proceeding) (citing Cantella & Co. v. Goodwin, 924 S.W.2d 943, 944
(Tex. 1996) (orig. proceeding)). “[A] court is not to rule on the potential merits of
the underlying claims. . . . [T]he [party]’s claim . . . is to be decided, not by the
court asked to order arbitration, but as the parties have agreed, by the arbitrator.”
AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649–50 (1986).
“‘The courts, therefore, have no business weighing the merits of the grievance,

                                           8
considering whether there is equity in a particular claim, or determining whether
there is particular language in the written instrument which will support the claim.
The agreement is to submit all grievances to arbitration, not merely those which
the court will deem meritorious.’” Id. at 650 (quoting United Steelworkers v. Am.
Mfg. Co., 363 U.S. 564, 568 (1960)).

       Thus, once Nguyen moved to compel arbitration on October 1, 2022, the
trial court should not have delayed in referring the case to arbitration. Chen did
not dispute that the partnership agreement contains a valid and enforceable
arbitration provision. Here, however, the trial court injected itself into the merits
of the parties’ dispute by conducting an injunction hearing on October 10, 2022,
and issuing a preliminary injunction on October 12, 2022, in an arbitrable dispute.
See Feldman/Matz Ints., L.L.P. v. Settlement Capital Corp., 140 S.W.3d 879, 886–
87 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (concluding that its precedent
in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. McCollum, 666 S.W.2d 604, 608
(Tex. App.—Houston [14th Dist.] 1984, writ ref’d n.r.e.) and Fifth Circuit
precedent compelled the conclusion that injunctive relief is improper pending
arbitration).

       We conclude that the trial court abused its discretion by conducting an
injunction hearing and issuing a temporary injunction after Nguyen filed an
undisputed motion to compel arbitration.

C.     TRIAL COURT ERRED IN REFUSING TO STAY ITS OWN PROCEEDINGS AFTER
       GRANTING MOTION TO COMPEL ARBITRATION

       Nguyen asserts that the trial court abused its discretion by denying on
October 18, 2022, Nguyen’s plea in abatement.
                                           9
       “If the movant has proven there is an arbitration agreement, as a matter of
law, the court must compel arbitration, and a presumption arises that all disputed
issues between the parties must be arbitrated.” In re Jebbia, 26 S.W.3d 753, 757
(Tex. App.—Houston [14th Dist.] 2000, orig. proceeding). “[T]he trial court has
no discretion but to compel arbitration and stay its own proceedings.” FirstMerit
Bank, N.A., 52 S.W.3d at 753–54.

       Accordingly, we conclude the trial court abused its discretion by denying
Nguyen’s plea in abatement of the trial court proceedings pending the arbitration.

                                  III.   CONCLUSION

       Nguyen has established that he is entitled, in part, to mandamus relief.
Accordingly, we conditionally grant relator’s petition for writ of mandamus, in
part, and direct the trial court to vacate its October 12, 2022 order granting a
temporary injunction and the portion of its October 18, 2022 order denying
Nguyen’s plea in abatement pending arbitration. We are confident the trial court
will act in accordance with this opinion and the writ will issue only if the trial court
fails to comply. All other relief requested by Nguyen is denied. 3

                                     PER CURIAM

Panel consists of Chief Justice Christopher and Justices Bourliot and Wilson.

       3
          To the extent Nguyen seeks mandamus relief from the trial court’s October 18, 2022
order granting sanctions against him, we deny the relief sought.
                                            10