Court Opinion

ID: 4462304
Source: CourtListenerOpinion
Date Created: 2019-12-07 03:17:42.668943+00
Date Added: 2024-06-11T14:53:30.584273
License: Public Domain

NUMBER 13-18-00215-CV

                    COURT OF APPEALS

             THIRTEENTH DISTRICT OF TEXAS

               CORPUS CHRISTI–EDINBURG

DENNIS W. BERRY; MARVIN G. BERRY;
BAY, INC.; BERRY GP, INC., D/B/A
BERRY CONTRACTING; AND
BERRY CONTRACTING, D/B/A BAY LTD.,                   Appellants,

                               v.

KENNETH L. BERRY, INDIVIDUALLY;
AND KENNETH L. BERRY, IN A DERIVATIVE
CAPACITY FOR SKYEAGLE, INC.,                             Appellees.

          On appeal from the County Court at Law No. 3
                   of Nueces County, Texas.

           DISSENTING MEMORANDUM OPINION
         Before Justices Benavides, Hinojosa, and Perkes
      Dissenting Memorandum Opinion by Justice Benavides
       The majority fails to give proper deference to the trial court’s resolution of credibility

issues when evaluating the evidence supporting the issuance of a temporary injunction.

Because I disagree with the majority’s analysis of irreparable harm, I respectfully dissent.

This is a case involving a closely held corporation with three shareholders, one of whom

is at odds with the other two.1 As a result, there is tremendous potential for mischief that

can be avoided through the limited injunctive relief granted by the trial court. I would

affirm the trial court’s grant of the temporary injunction.

       I do not disagree with the majority’s statement of the standard or review but

reemphasize that our review is for abuse of discretion. Henry v. Cox, 520 S.W.3d 28, 33

(Tex. 2017); Super Starr Int’l, LLC v. Fresh Tex. Produce, LLC, 531 S.W.3d 829, 838

(Tex. App.—Corpus Christi–Edinburg 2017, no pet.). “No abuse of discretion exists if

some evidence reasonably supports the court’s ruling.”            Henry, 520 S.W.3d at 34;

Tanguy v. Laux, 259 S.W.3d 851, 856 (Tex. App.—Houston [1st Dist.] 2008, no pet.).

We must consider the evidence submitted in the light most favorable to the trial court’s

ruling and draw all legitimate inferences from the evidence that support the ruling. See

Sargeant v. Al Saleh, 512 S.W.3d 399, 410 (Tex. App.—Corpus Christi–Edinburg 2016,

no pet.) (citing Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002)).

       Appellants argue that appellees failed to prove the second and third elements

needed for a temporary injunction. The trial court found those elements were proven.

The majority holds that money damages are sufficient and there is no irreparable harm.

I disagree.

       “An adequate remedy at law is one that is as complete, practical, and efficient to

       1
           Kenneth, Martin, and Dennis Berry are brothers.

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the prompt administration of justice as is equitable relief.” Noell v. City of Carrollton, 431
S.W.3d 682, 712 (Tex. App.—Dallas 2014, pet. denied).            “Thus, if damages do not

provide as complete, practical and efficient a remedy as may be had by injunctive relief,

the trial court does not err in granting temporary injunction so long as the other elements

of injunctive relief are satisfied.” Intercontinental Terminals Co., LLC v. Vopak N. Am.,

Inc., 354 S.W.3d 887, 895 (Tex. App.—Houston [1st Dist.] 2011, no pet.) “To establish

an irreparable injury, the applicant must show that it cannot be ‘adequately compensated

in damages or the damages cannot be measured by any certain pecuniary standard.’”

Cardinal Health Staffing Network, Inc. v. Bowen, 106 S.W.3d 230, 235 (Tex. App.—

Houston [1st Dist.] 2003, no pet.) (quoting Butnaru, 84 S.W.3d at 204); see In re Stark,

126 S.W.3d 635, 640 (Tex. App.—Beaumont 2004, orig. proceeding [mand. denied]). A

temporary injunction is also appropriate if damages would come too late. See Mabry v.

Sandstream, Inc., 124 S.W.3d 302, 319–20 (Tex. App.—Fort Worth 2003, no pet.) (finding

temporary injunction appropriate where company was losing money but competitor likely

stole trade secrets and could beat original company to market making damages recovery

too late).

       Martin testified that Skyeagle has been subsisting on corporate welfare for years,

starting with its original purchase of the easement with a loan from one of the Berry

entities for $175,000 in 1983. Martin further testified that Skyeagle should pay back the

loan. Skyeagle has not paid for preparation of its tax returns which Martin estimated

probably cost $400,000 to $500,000 over the years, and there have been attorneys’ fees,

although he did not know to whom or in what amounts. Martin’s testimony indicates that

his plan for Skyeagle to pay its “debts” likely involves a trade of Skyeagle’s liabilities to

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Bay and Berry in exchange for the easement that Bay promised TM, without paying cash

to Skyeagle. TM sued Bay and Skyeagle for specific performance in 2015 to compel the

transfer of the easement to TM. That litigation predates this suit and is not a suit among

shareholders. At Martin and Dennis’ request, the trial court here abated proceedings in

this court addressing disposition of the easement in favor of dominant jurisdiction in the

earlier-filed suit. The abatement of proceedings related to the easement in the unrelated

suit proceeding in the 214th District Court is part of the basis of the majority’s decision to

reverse the trial court’s grant of temporary injunctive relief.

       The majority holds that money damages are sufficient, but there is difficulty valuing

Skyeagle because of the way in which it has been used. The parties do not dispute that

Skyeagle has not been actively engaged in seeking business during its existence.

Instead, Skyeagle’s easement was used to provide a benefit to other Berry-owned

companies as exemplified by the contract with TM. See generally Sneed v. Webre, 465
S.W.3d 169 (Tex. 2015) (discussing shareholder derivative lawsuits in closely held

corporations).

       In addition, the loss of interests in real property, such as Skyeagle’s potential loss

of the easement through action by two directors to trade the easement to a Berry-owned

company in exchange for payment of Skyeagle’s alleged liabilities, or to settle the TM

litigation, is a probable, imminent, and irreparable injury that ordinarily qualifies a party

for a temporary injunction.2 See Butnaru, 84 S.W.3d at 211 (citing Bennett v. Copeland,

149 Tex. 474, 235 S.W.2d 605, 609 (1951)); Yarto v. Gilland, 287 S.W.3d 83, 97 (Tex.

       2
           An easement is a property interest protected by the Texas Constitution. Noell v. City of
Carrollton, 431 S.W.3d 682, 696 (Tex. App.—Dallas 2014, pet. denied); Hous. Lighting & Power Co. v.
State, 925 S.W.2d 312, 315 (Tex. App.—Houston [14th Dist.] 1996, writ denied).

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App.—Corpus Christi–Edinburg 2009, no pet.); Rus-Ann Development, Inc. v. ECGC,

Inc., 212 S.W.3d 921, 927 (Tex. App.—Tyler 2007, no pet.).               The Butnaru Court

reinstated the trial court’s temporary injunction in a dispute over the purchase of a parcel

of land that was part of the purchase of an automobile dealership. 84 S.W.3d at 211.

In Yarto, the temporary injunction was issued to prevent eviction of the alleged tenant

until the tenant’s claim of title to the property under a contract for deed could be litigated.
287 S.W.3d at 97. Here, control over Skyeagle’s future and its sole asset is at stake.

       Although Kenneth did not directly argue that the loss of the easement as real estate

was a cause of irreparable harm, he argued that its loss would directly and irreparably

affect Skyeagle. He also argued that the easement was unique. The majority takes

issue with my consideration of the well-known principle that real estate is unique and

therefore, temporary injunctive relief is appropriate to preserve the status quo until a

determination on the merits. See Greater Hous. Bank v. Conte, 641 S.W.2d 407, 410

(Tex. App.—Houston [14th Dist.] 1982, no pet.); see also Perales v. Rivera, No. 13–03–

002–CV, 2003 WL 21705740, at *3 (Tex. App.—Corpus Christi–Edinburg July 24, 2003,

no pet.). The judgment of a trial court must be affirmed if it can be upheld on any legal

theory supported by the record in the absence of findings of facts and conclusions of

law. See Seaman v. Seaman, 425 S.W.2d 339, 341 (Tex. 1968); Valenzuela v. Aquino,

763 S.W.2d 43, 44 (Tex. App.—Corpus Christi–Edinburg 1988, no writ).

       According to the majority, the order abating proceedings involving the easement,

precludes consideration of the easement’s uniqueness as realty in the calculation of

irreparable harm. The majority also focuses on the narrowness of the injunction which

does not prevent the sale of the easement. Instead, the temporary injunction prevents

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Martin and Dennis from dissolving Skyeagle, obligating Skyeagle to pay debts of or

transferring funds to any Defendant-owned entities, and from indemnifying Skyeagle in

the unrelated suit out of the 214th District Court.          These actions, which were

contemplated by Martin and Dennis as set forth in the notice of shareholders meeting, if

not restrained, could result in the dissolution of Skyeagle and as part of its dissolution,

the sale or transfer of Skyeagle’s sole asset, the easement, as part of the winding up of

Skyeagle’s affairs necessary to pay debts, resolve litigation, or indemnify related

companies before the resolution of the present litigation.3 Any of these actions would

ultimately result in Skyeagle’s loss of a valuable and irreplaceable interest in realty. All

of this could readily occur before any of Kenneth’s claims of conflict of interest and breach

of fiduciary duty on the part of the other shareholders could be determined. The result

would be that Skyeagle will be dissolved.

           Skyeagle currently remains an existing, if unprofitable, business.         If the

temporary injunction remains in place, the shareholder litigation can proceed on the

merits. If Kenneth can establish his claims, then the corporation he purportedly seeks to

protect will still exist.   If he does not prevail, the majority of the directors can take

whatever action they see fit. I would affirm the trial court’s temporary injunction and

overrule appellants’ issues. Because the majority does not, I respectfully dissent.

                                                                GINA M. BENAVIDES,
                                                                Justice

Delivered and filed the
5th day of December, 2019.

       3
           See TEX. BUS. ORG. CODE ANN. § 11.053.

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