Court Opinion

ID: 3119325
Source: CourtListenerOpinion
Date Created: 2015-10-16 08:20:24.846706+00
Date Added: 2024-06-11T12:47:04.784301
License: Public Domain

Opinion issued February 26, 2013

                                    In The

                             Court of Appeals
                                   For The

                        First District of Texas
                          ————————————
                            NO. 01-11-01062-CV
                          ———————————
TOBY SHOR AND SEASHORE INVESTMENTS MANAGEMENT TRUST
      BY AND THROUGH TOBY SHOR, TRUSTEE, Appellants
                                      V.
PELICAN OIL & GAS MANAGEMENT, LLC, PELICAN OIL & GAS, LP,
SGW INTERESTS, LLC, BNP OPERATING, LLC, AND JAMES BLACK,
 AS TRUSTEE OF THE PAUL PATRICK BLACK HERITAGE TRUST,
                         Appellees

                  On Appeal from the 12th District Court
                         Grimes County, Texas
                       Trial Court Case No. 32190

                                OPINION

     In this interlocutory appeal, appellants, Toby Shor and Seashore Investments

Management Trust, by and through Toby Shor, trustee (collectively, “Shor”),
sought execution on a prior judgment awarded in their favor from the assets of

appellees, Pelican Oil & Gas Management, LLC, Pelican Oil & Gas, LP, SGW

Interests, LLC, BNP Operating, LLC, and James Black as Trustee of the Paul

Patrick Black Heritage Trust (collectively, “the applicants” or “Pelican”). Pelican

moved for a temporary injunction to prevent further execution attempts by Shor

pending resolution of the issues in the underlying declaratory judgment action, and

the trial court granted the requested injunctive relief. In two issues, Shor contends

that (1) the trial court lacked subject matter jurisdiction over the case and (2) if the

trial court had jurisdiction, it abused its discretion in granting the temporary

injunction.

      We affirm the temporary injunction order.

                                     Background

      Shor originally sued Paul Black, individually, and several entities owned, in

whole or in part, by Black—PBF Investments, Ltd., BNP Holdings, Ltd., BNP Oil

& Gas Properties, Ltd., BNP Commercial Properties, Ltd., Pagenergy Company,

L.L.C., TSE Equities I, L.L.C., TSE Equities Company, Ltd., BNP Management,

L.L.C., 500 Water Street Property, L.L.C., and 500 N. Water Street Property I,

L.L.C.—for breach of contract, breach of fiduciary duties, conversion, fraud,

fraudulent inducement, and conspiracy to defraud in the County Court at Law

Number 3 of Nueces County (“the Nueces County suit”). On August 17, 2010, an

                                           2
arbitration panel found in favor of Shor on all of her claims against the defendants

in the arbitration (collectively, “the judgment debtors”) and awarded her over $30

million in damages. On April 6, 2011, the Nueces County court confirmed the

arbitration panel’s award and entered judgment in favor of Shor (“the Nueces

County judgment”). Black and the other judgment debtors, none of whom are

parties to this suit, appealed to the Corpus Christi Court of Appeals, but they did

not file a supersedeas bond or otherwise supersede execution on that judgment. 1

       On August 11, 2011, Shor obtained a turnover order from the Nueces

County Court which stated that the judgment debtors were the owners of

“shares/stock/stock certificates/ownership interests” in twenty-three entities related

to Paul Black. The turnover order required Black and certain other of the judgment

debtors from the arbitration to turn over for levy to the sheriff in Corpus Christi

“all   documents      and     records    related    to”    the    “shares/stock/stock

certificates/ownership interests” in the twenty-three entities and “all real and

personal property located at 500 N. Water Street, Corpus Christi.” The order

decreed that “Toby Shor, as Trustee for the Seashore Investments Management

Trust, is owner of any and all of judgment debtors’ interests in the entities

listed . . . above and all real and personal property located at 500 N. Water Street,

Corpus Christi.” The headquarters of both the judgment debtors and the applicants

1
       This appeal remains pending before the Corpus Christi Court of Appeals in
       appellate cause number 13-11-00715-CV.
                                          3
are located at 500 N. Water Street. Pursuant to this turnover order, Shor changed

the locks on the offices of the entities related to Paul Black that have their

headquarters at 500 N. Water Street, and she took possession of the business

records and files of the applicants—none of which were named in the turnover

order and none of which have been shown to be owned by a judgment debtor or

subject to execution.

      On October 4, 2011, Pelican filed an original petition in this case in the 12th

District Court of Grimes County (“the Grimes County suit”) seeking a declaratory

judgment that the applicants are, in fact, not owned by a judgment debtor but by a

spendthrift trust, the Paul Patrick Black Heritage Trust (“the Trust”), which is also

an applicant, and are not subject to execution to satisfy the debts of the judgment

debtors. With its petition, Pelican filed an application for a temporary restraining

order, a temporary injunction, and a permanent injunction, seeking to enjoin Shor

from seizing any assets of any of the applicants until a legal determination is made

in the underlying declaratory judgment action as to whether the assets of the

applicants are subject to execution to satisfy the judgment debt Shor is attempting

to enforce.

      In this suit, Pelican alleged that, in an attempt to collect on the Nueces

County judgment, Shor had filed an application for a turnover order seeking

applicants’ interests in real property, including oil and gas leases, located in

                                         4
Grimes County. Pelican alleged that none of the applicants were parties to the

Nueces County judgment, and, therefore, Shor could not use their assets to satisfy

that judgment. Pelican alleged that, although Paul Black, one of the judgment

debtors in the Nueces County suit, was the sole beneficiary of the Trust, Black

does not own an interest in any of the parties to this suit, which are all ultimately

wholly owned by the Trust, or in any of the assets sought by Shor in her

application for turnover relief.

      Pelican sought a declaration (1) holding that the applicants are not liable for

the debts of Paul Black, (2) holding that they are not liable to Shor “for any monies

or debts,” (3) quieting and resolving title to and ownership of the applicants in

favor of the Trust, and (4) quieting and resolving title to and ownership of the

applicants’ properties, leases, and mineral interests in Grimes County. Pelican also

requested that the trial court prevent Shor from “filing liens, interfering in the

business relations of the [applicants], or taking any other action including seeking

turnover relief in any court . . . concerning [applicants] and the [applicants’]

mineral interest and oil and gas properties.”

      Pelican alleged that it was probable that it would prevail at a trial on the

merits because the Nueces County judgment debtor, Paul Black, had no interest in

either the applicants or in their Grimes County properties. It also alleged that harm

was imminent because Shor had “expressly avowed that [she] will seek the

                                          5
turnover of the [applicants] and their assets, which will damage and cloud the title

of [applicants’] oil and gas properties situated in Grimes County.” And it alleged

that the harm was irreparable because Shor’s actions would slander the applicants’

title to their mineral interests, would interrupt and interfere with the operation of

oil and gas wells, and would make it impossible for the applicants to obtain

financing for future drilling operations while the cloud remains on their title.

Pelican argued that it had no adequate remedy at law because “the damages from

loss of a lease position may be incalculable” and the “real property and mineral

estate is unique and cannot be reasonably replaced if lost.”

      The Grimes County trial court granted an ex parte temporary restraining

order (“TRO”) on the same day that Pelican filed its application and original

petition.   The order prohibited Shor from:          (1) seeking turnover relief or

proceeding with other collection efforts pertaining to the applicants; (2) seeking

turnover relief or proceeding with other collection efforts pertaining to the

applicants’ assets; (3) contacting or interfering in the contracts and business

relations of the applicants; (4) taking any other action or instituting any legal action

which may slander or cloud title to the “Pelican Oil and Gas Ltd. Wolk lease

and/or the Walkoviak Gas Unit and Walkoviak No. 1 well”; and (5) taking any

other action or instituting any legal action related to attempts to collect or recover

from the applicants any oil and gas interests, leases, real property, or proceeds

                                           6
from production on land located in Grimes County. Ten days later, on October 14,

2011, the trial court extended and modified the TRO to prohibit Shor from

“retaining, possessing, copying, reviewing or otherwise using in any manner the

property, files, records, documents, and data” of the applicants.

      On October 24, 2011, the trial court heard Pelican’s application for a

temporary injunction against Shor. At the beginning of the hearing, Shor argued

that the Grimes County court lacked jurisdiction over the case pursuant to Civil

Practice and Remedies Code section 65.023(b). See TEX. CIV. PRAC. & REM. CODE

ANN. § 65.023(b) (Vernon 2008).        Shor argued that an injunction relating to

execution on a judgment has to be heard in the court in which the judgment was

originally rendered.    Therefore, because the judgment upon which she was

attempting to execute was rendered in Nueces County, only the Nueces County

court had jurisdiction to grant an injunction restraining her from executing on the

judgment, if appropriate.     The trial court took the jurisdictional issue under

advisement, and it heard testimony concerning the propriety of granting the

temporary injunction.

      At the hearing, James Black, Paul Black’s brother, testified that he—not

Paul—is the trustee of the Trust. James also testified that the Trust is a spendthrift

trust, created by the brothers’ parents for the benefit of Paul, and that it has never

had a judgment entered against it. James testified that the Trust is the sole owner

                                          7
of the other applicants and that no judgments have been entered against any of

these entities. He further testified that Paul Black has never owned any interest in

any of the applicants, and no court has ever determined that the applicants are the

alter ego of Paul Black or that Black used the applicants to defraud his creditors.

      James testified that Shor had already pursued a garnishment proceeding in

Live Oak County and obtained a writ of garnishment addressed to Mego

Resources, LLC, garnishing any property or interests owned by SGW Interests and

held by Mego. James also testified that he is the property manager for the building

located at 500 N. Water Street in Corpus Christi. He stated that after Shor obtained

her turnover order in Nueces County, she changed the locks on the offices of the

entities at 500 N. Water Street related to Paul Black, and she then took possession

of the applicants’ records and files located in the building. He testified that, after

reading Shor’s affidavit attached to the Live Oak County garnishment proceeding,

it appeared to him that Shor had been reading SGW Interests’ records.2 James

stated that it was “extremely important” that he regain access to these records

because he needed them to file franchise and federal income tax returns for the

2
      Shor states, in her affidavit, “I have reason to believe and do believe that [Mego
      Resources] has property belonging to, or is indebted to, Defendant Paul Black,
      through SGW Interests, LLC. This belief is based on the fact that I have seen
      documents which show that Paul Black is the owner of SGW Interests, LLC, and
      that SGW Interests LLC owns an interest in oil and gas wells/leases in Grimes
      County, Texas.”
                                          8
applicants. James also stated that the records and files contain communications

protected by the attorney-client privilege.

      On cross-examination, James acknowledged that he took over the trustee

position from Paul around the time of the Nueces County judgment. James agreed

with Shor’s counsel that Paul “is the one [who] actually controls where the money

goes and what assets are purchased and the business dealings with the trust.” He

further agreed that Paul is the one who is “involved in the oil and gas deals on

behalf of the trust or any of the trust inventory on a day-to-day basis.”

      Shor’s attorney also testified at the temporary injunction hearing.          He

testified that he believed the TRO that was in effect was void, and, thus, he argued

that he could “continue doing the things in violation of the letter of the order,” such

as filing writs of garnishment, and not be in contempt because the TRO is not

enforceable. He also testified, however, that he would not take such action in

violation of the TRO or any other injunctive relief “as an officer of the Court.”

Pelican’s counsel asked whether he would agree to return the records and files of

the Trust, SGW Interests, and the other applicants, and Shor’s attorney responded

that he would not. He stated that he believed, pursuant to the Nueces County

turnover order, that Shor owns all personal property located at 500 N. Water Street

that was “related to Paul Black entities.”

                                             9
      Ultimately, the Grimes County court granted the temporary injunction. The

court found that Pelican had provided sufficient evidence that the applicants are

not judgment debtors of and do not owe any money to Shor; that Paul Black has

never owned any of the applicants or any of their assets; that Shor presented no

evidence to support an assertion that Paul Black transferred assets to the applicants

or used these entities to defraud Shor; that the applicants own real and personal

property in Grimes County, including oil and gas leases that run the risk of

expiring; that Shor has threatened to or has actually clouded the title of the

applicants’ property; that Shor’s collection attempts have resulted in the

withholding of funds to the applicants; and that the applicants are likely to suffer

permanent and irreplaceable loss of real and personal property without a temporary

injunction pending a determination of the parties’ rights. The court then ordered

Shor to refrain from participating in the same acts that were prohibited in the two

previous TROs.

      The temporary injunction ordered Shor to return all property, files, records,

documents, and data of the applicants and prohibited Shor from retaining this

information or copies of this information. The order also required Shor to take all

necessary actions to dismiss the Live Oak County garnishment proceeding and to

dissolve the writ of garnishment addressed to Mego Resources that had already

issued in that proceeding. The temporary injunction order also included language

                                         10
stating that it should not be construed as prohibiting Shor from attempting to

satisfy the Nueces County judgment from the assets of Paul Black or any of the

named judgment debtors in that suit.

      This interlocutory appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 51.014(a)(4) (Vernon Supp. 2012) (allowing interlocutory appeal from order of

district court that grants temporary injunction).

                            Subject Matter Jurisdiction

      In her first issue, Shor contends that the Grimes County court lacked subject

matter jurisdiction to enter Pelican’s requested temporary injunctive relief pursuant

to Civil Practice and Remedies Code section 65.023(b).

      Civil Practice and Remedies Code section 65.013 permits a suit for an

injunction to stay execution on a judgment. See TEX. CIV. PRAC. & REM. CODE

ANN. § 65.013 (Vernon 2008); Butron v. Cantu, 960 S.W.2d 91, 94 (Tex. App.—

Corpus Christi 1997, no pet.); McVeigh v. Lerner, 849 S.W.2d 911, 914 (Tex.

App.—Houston [1st Dist.] 1993, writ denied).          Section 65.023(b) provides,

however, that “[a] writ of injunction granted to stay . . . execution on a judgment

must be tried in the court in which . . . the judgment was rendered.” TEX. CIV.

PRAC. & REM. CODE ANN. § 65.023(b). We have previously held that this section

“is intended to ensure that comity prevails among the various trial courts of Texas”

because “[o]rderly procedure and proper respect for the courts will require

                                          11
that . . . attacks upon their judgment should be made in the court rendering such

judgment, rather than in other courts indiscriminately.” McVeigh, 849 S.W.2d at

914 (quoting Lloyds Alliance v. Cook, 290 S.W.2d 716, 718 (Tex. Civ. App.—

Waco 1956, no writ)). We further held that not only does section 65.023(b) control

venue in a suit for an injunction seeking to stay execution on a judgment, it also

controls “jurisdiction as well, so long as the judgment in question is valid on its

face.” Id. (citing Int’l Sec. Life Ins. Co. v. Riley, 467 S.W.2d 213, 214 (Tex. Civ.

App.—Amarillo 1971, writ ref’d n.r.e.)); see also Butron, 960 S.W.2d at 94 (“This

requirement that an action to enjoin execution on a judgment must be brought in

the court in which the judgment was rendered is jurisdictional, and does not relate

merely to venue.”). The requirement of facial validity is a requirement that the

underlying judgment is not void. Butron, 960 S.W.2d at 95; McVeigh, 849 S.W.2d

at 914.

      In McVeigh, the 61st District Court of Harris County rendered a judgment in

favor of McVeigh, and after Lerner, the judgment debtor, failed to satisfy the

judgment, a writ of execution issued. 849 S.W.2d at 912–13. Lerner then filed an

action in the 151st District Court of Harris County, seeking an injunction

prohibiting the distribution of funds that Lerner had paid under protest and a

declaration of the amount that she owed. Id. at 913. The 151st District Court

granted a temporary restraining order and, subsequently, summary judgment in

                                        12
favor of Lerner. Id. On appeal, McVeigh argued that the summary judgment was

“outside the scope of the 151st District Court’s jurisdictional authority under

[section] 65.023.”    Id.   In determining whether the 151st District Court had

jurisdiction to enter the injunction, we held that the fact that Lerner’s suit was not,

on its face, a claim for an injunction to stay execution on the original judgment but

was, instead, a claim to enjoin the distribution of funds paid under protest to

prevent execution was an “immaterial” distinction. Id. at 915. We held:

      We construe section 65.023 to preclude a court from interfering in the
      execution of a judgment rendered by a sister court of this
      state . . . . We conclude section 65.023 barred the bringing of a claim
      for injunctive relief to stay execution of the 1987 legal malpractice
      judgment in any court but the 61st District Court of Harris County.

Id. We therefore concluded that section 65.023 deprived the 151st District Court

of “subject matter jurisdiction on Lerner’s claim for injunctive relief” because that

court did not render the underlying judgment. Id.; see also Butron, 960 S.W.2d at

95 (“In the instant case, the 138th District Court rendered the $1,019,840.53

judgment against Mark Cantu. . . . Accordingly, Cantu had to bring his application

for writ of injunction in the 138th District Court because that court had rendered

the judgment. No other court had jurisdiction over that issue.”).

      Shor contends that, under the rationale of McVeigh, the Grimes County court

lacks jurisdiction over Pelican’s application for temporary injunction because the

original Nueces County judgment was not void. As a result, pursuant to section

                                          13
65.023(b), only the Nueces County court has jurisdiction to enter an injunction

restraining Shor from executing on that judgment.

      Pelican, however, cites the San Antonio Court of Appeals’ decision in

Zuniga v. Wooster Ladder Co., 119 S.W.3d 856 (Tex. App.—San Antonio 2003,

no pet.), for the proposition that section 65.023(b) does not apply to cases in which

a stranger to the underlying judgment seeks injunctive relief from execution on that

judgment. In Zuniga, Wooster assigned a legal malpractice cause of action to the

Zunigas and the parties also entered into a consent agreement in the 73rd District

Court which provided that (1) Wooster could transfer all of its assets, except the

legal malpractice cause of action, to a new corporation, (2) the Zunigas waived all

rights to the new corporation’s assets, (3) the Zunigas released all claims against

Wooster, and (4) Wooster’s transfer of assets was not fraudulent. See id. at 859–

60. Ten years later, the Zunigas sued the new corporation and threatened to

execute on the consent judgment against the assets of the new corporation. Id. at

860. In the 224th District Court, Wooster sought a declaration that it was the only

judgment debtor under the original consent judgment and applied for a temporary

injunction to “prevent the Zuniga children from executing on the judgment against

any entity other than Wooster.” Id. The 224th District Court granted the requested

injunctive relief. Id.

                                         14
      In addressing whether the 224th District Court had jurisdiction to grant the

requested injunctive relief, the San Antonio Court of Appeals noted that, in most

circumstances, “a suit to enjoin enforcement of a judgment must be brought in the

court which rendered the judgment.” Id. at 861. However, it then held that “this

jurisdictional limitation only applies to a suit ‘attacking the judgment, questioning

its validity, or presenting defenses properly connected with the suit in which it was

rendered, and which should have been adjudication therein.’” Id. (quoting Kruegel

v. Rawlins, 121 S.W. 216, 217 (Tex. Civ. App.—Dallas 1909, writ ref’d)). The

court observed that Wooster was not attempting to attack the underlying judgment,

question its validity, or present defenses that it should have raised in the previous

suit; instead, it was “attempting to prevent the misuse of the judgment—its

execution against a stranger to the judgment.” Id. According to the San Antonio

court, “The jurisdictional limitation of section 65.023 does not require a claim

seeking to prevent the misuse of a judgment to be brought in the court that

rendered judgment.” Id. (citing Kruegel, 121 S.W. at 217 (injunction to prevent

stranger from enforcing judgment is not required to be filed in original court

rendering judgment)). The court held that the 224th District Court had jurisdiction

to issue the temporary injunction. Id.

      The Corpus Christi Court of Appeals reached a similar result in Williams v.

Murray, 783 S.W.2d 233 (Tex. App.—Corpus Christi 1989, no writ). In Williams,

                                         15
the 134th District Court of Dallas County entered a judgment in favor of First City

Bank of Dallas, which subsequently assigned that judgment to Williams. 783
S.W.2d at 234. Williams then obtained a writ of execution on some real property

owned by one of the judgment debtors in Cameron County. Id. Janie Hughston,

who was another judgment creditor of the defendant on whose property Williams

sought execution but was not a party to the Dallas County judgment, filed suit

against Williams in Cameron County, seeking an order restraining Williams from

executing on the property and a determination that the assignment of the judgment

to Williams was void. Id. The trial court granted the order, and Williams sought

mandamus relief.

      In determining whether Hughston had to bring her suit against Williams in

Dallas County, where the underlying judgment was rendered, the Corpus Christi

Court of Appeals noted that “[t]he object of § 65.023 is to protect the judgment and

processes of one court from interference by another court.” Id. (citing Carey v.

Looney, 251 S.W. 1040, 1041 (Tex. Comm’n App. 1923)). The court noted that,

one hundred years previously, the Texas Supreme Court had held that the

predecessor statute to section 65.023 was “inapplicable to suits by non-parties to a

judgment who seek to enjoin execution upon property in which they have an

interest.” Id. at 235 (citing Van Ratcliff v. Call, 10 S.W. 578, 579 (Tex. 1889)).

The court reasoned that Hughston was not seeking to set aside the underlying

                                        16
judgment or seeking to set aside an execution on the judgment; instead, she

requested a stay of execution on the judgment until the rights of the parties with

regard to the property could be determined in her declaratory judgment action. Id.

The court ultimately concluded that section 65.023 was not applicable because

Hughston was a stranger to the underlying Dallas County judgment. Id. In the

Cameron County suit, the trial court “was not attempting to interfere with the

Dallas court’s judgment. Rather, the granting of the temporary restraining order

was merely a way of preserving the status quo until a determination of the parties’

rights could be made.” Id. The Corpus Christi court held that the Cameron County

court had jurisdiction to determine Hughston’s declaratory judgment action. Id.

      Shor argues that the cases that rely upon Van Ratcliff v. Call are not

controlling because the predecessor statute to section 65.023, article 4656, was a

mandatory venue statute and not a jurisdictional statute. See 10 S.W. at 578–79.

In support, Shor cites two cases referring to article 4656 as a venue provision. See

Williams, 783 S.W.2d at 235; Flewellen v. Brownfield State Bank & Trust Co., 517
S.W.2d 384, 388 (Tex. Civ. App.—Amarillo 1974, no writ). Shor ignores the fact,

however, that article 4656 was entitled “[j]urisdiction for trial” and provided that

“[w]rits of injunction granted to stay proceedings in a suit, or execution on a

judgment, shall be returnable to and tried in the court where such suit is pending,

or such judgment was rendered . . . .” Act to Regulate Proceedings in District

                                        17
Courts, 1st Leg., R.S., § 152, 1838–46 Laws of Tex. 1669, 1711–12, repealed by

Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 9(1), 1985 Tex. Gen. Laws 3242,

3294. Section 65.023(b) is almost identical: “A writ of injunction granted to stay

proceedings in a suit or execution on a judgment must be tried in the court in

which the suit is pending or the judgment was rendered.” TEX. CIV. PRAC. & REM.

CODE ANN. § 65.023(b) (Vernon 2008).          In analyzing section 65.023(b) in

McVeigh, we noted that it “controls not just venue of such a suit, but also

jurisdiction . . . .” 849 S.W.2d at 914. Thus, although article 4656 was primarily

considered a mandatory venue provision, it also controlled jurisdiction. As such,

Van Ratcliff and the cases that rely upon it are applicable. In Van Ratcliff, the

Texas Supreme Court explicitly held that article 4656

      has no application to parties who do not sue to stay or enjoin the
      execution previously of the judgment as contemplated by the statute,
      but who sue to prevent the sale of property alleged to belong to them,
      under a judgment, however valid and regular it may be, to which they
      are not parties, and for the satisfaction of which their property could
      in no event be subject.
10 S.W. at 579.

      We agree with Pelican that Butron and McVeigh—in which the courts of

appeals held that the suits seeking injunctive relief from execution on a judgment

had to be filed in the same courts in which the underlying judgments were

originally rendered—are distinguishable from the present case. In both Butron and

McVeigh, the party seeking an injunction to restrain execution on the underlying
                                        18
judgment was the original judgment debtor.         See Butron, 960 S.W.2d at 93;

McVeigh, 849 S.W.2d at 913. Here, in contrast, none of the applicants were parties

to the original Nueces County judgment and none have been determined to be

owned by a judgment debtor. The allegation in the underlying suit is that none of

the applicants are owned by a judgment debtor.

      In its Grimes County suit, Pelican does not attack the merits of the Nueces

County judgment, it does not question the validity of that judgment, and it does not

present defenses to that judgment that should have been adjudicated in the

underlying suit. See Zuniga, 119 S.W.3d at 861 (noting that section 65.023 applies

to suits “attacking the judgment, questioning its validity, or presenting defenses” to

judgment arising from original court). Instead, Pelican seeks declarations that the

entities are not liable for the debts of Paul Black, the original judgment debtor, that

they are not liable to Shor for any debts, and that Black has no ownership interest

in the entities or in the Grimes County assets owned by the Trust. Pelican’s

application for a temporary injunction seeks only to preserve the status quo by

preventing the garnishment and turnover of its Grimes County assets until the trial

court can determine the proper ownership of the assets. The trial court’s temporary

injunction order also does not interfere with Shor’s ability to execute on the assets

of Paul Black and the other judgment debtors to satisfy the Nueces County

judgment; the order includes language stating that it should not be construed as

                                          19
prohibiting Shor from collecting from the assets of Black or the other named

debtors.

      We follow Williams and Zuniga and hold that section 65.023(b) does not

apply to situations in which a non-party to the underlying judgment seeks to

prevent execution on that judgment from its assets. See Zuniga, 119 S.W.3d at

861; Williams, 783 S.W.2d at 235; see also Van Ratcliff, 10 S.W. at 579 (holding

that predecessor to section 65.023(b) “has no application” to non-party who seeks

to prevent execution on judgment). We therefore conclude that section 65.023(b)

does not require Pelican and the other applicants, who are not parties to the original

Nueces County judgment, to bring their declaratory judgment action and

applications for injunctive relief in Nueces County.

      Shor argues that the applicants are not “strangers” to the judgment because,

as James Black testified at the temporary injunction hearing, Paul Black actually

controls the business dealings of the Trust, including determining which assets the

Trust purchases, and is the one involved with the “day-to-day” oil and gas deals of

the Trust. Shor further points out that two of the applicants—Pelican Oil & Gas

Management, LLC and Pelican Oil & Gas, LP—were created after the arbitration

panel awarded over $30 million to Shor from Black and other entities that he owns.

At the hearing, however, Pelican presented evidence that the Trust, and not Paul

Black, ultimately owns the applicants and that the Grimes County assets at issue

                                         20
are owned by the Trust. Although Paul Black is the beneficiary of the Trust, the

Trust is a spendthrift trust, and spendthrift trusts “protect the beneficiary’s interest

in the trust corpus and income from claims of a beneficiary’s creditors while the

corpus and income remain in the trust and are held by the trustee.” Burns v. Miller,

Hiersche, Martens & Hayward, P.C., 948 S.W.2d 317, 321 (Tex. App.—Dallas

1997, writ denied). Spendthrift trusts are “exempt from attachment, execution,

garnishment, or other seizure.”      Id. at 322.    Furthermore, Shor presented no

evidence that Black transferred assets to the Trust in an attempt to defraud her and

protect his assets from execution on the Nueces County judgment, and no court has

yet determined that the applicants are alter egos of Paul Black. Thus, the “status

quo,” pending resolution of the underlying Grimes County declaratory judgment

action, is that the Trust and the other applicant entities are separate from Paul

Black, and his involvement with the management of these entities does not compel

the conclusion that he owns an interest in the assets of these entities.

      We hold that the Grimes County trial court properly exercised subject matter

jurisdiction over Pelican’s application for a temporary injunction.

      We overrule Shor’s first issue.

                        Propriety of Temporary Injunction

      In her second issue, Shor contends that, if the trial court had subject matter

jurisdiction, the court abused its discretion in granting injunctive relief in favor of

                                          21
Pelican because the evidence in the record does not support the court’s conclusions

that Pelican has a probable right of recovery or that Pelican will suffer imminent

harm and irreparable injury without a temporary injunction.

      The purpose of a temporary injunction is to preserve the status quo of the

subject matter of the litigation pending a trial on the merits. Butnaru v. Ford

Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); see also In re Newton, 146 S.W.3d
648, 651 (Tex. 2004) (defining “status quo” as “the last, actual, peaceable, non-

contested status which preceded the pending controversy”).               A temporary

injunction is an extraordinary remedy and does not issue as a matter of right;

therefore, an applicant must plead and prove three specific 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 time period. Butnaru, 84 S.W.3d at 204 (citing Walling v. Metcalfe,

863 S.W.2d 56, 57 (Tex. 1993)).

      Because the decision to grant or deny a temporary injunction falls within the

trial court’s sound discretion, we will reverse an order granting injunctive relief

only if the trial court abused that discretion. Id. We must not substitute our

judgment for that of the trial court unless the court’s action “was so arbitrary that it

exceeded the bounds of reasonable discretion.” Id. The trial court does not abuse

its discretion by making a decision based on conflicting evidence, but it does abuse

                                          22
its discretion when the evidence does not reasonably support the court’s

determination of the existence of probable injury. Marketshare Telecom, L.L.C. v.

Ericsson, Inc., 198 S.W.3d 908, 916 (Tex. App.—Dallas 2006, no pet.); Tri-Star

Petroleum Co. v. Tipperary Corp., 101 S.W.3d 583, 587 (Tex. App.—El Paso

2003, pet. denied). We review the evidence submitted to the trial court in the light

most favorable to the trial court’s ruling, draw all legitimate inferences from the

evidence, and defer to the trial court’s resolution of conflicting evidence. INEOS

Grp. Ltd. v. Chevron Phillips Chem. Co., 312 S.W.3d 843, 848 (Tex. App.—

Houston [1st Dist.] 2009, no pet.). Our review is limited to determining whether

the trial court abused its discretion in its ruling on the application for a temporary

injunction; we do not reach the merits of the underlying case. Sonwalkar v. St.

Luke’s Sugar Land P’ship, L.L.P., No. 01-11-00473-CV, 2012 WL 3525384, at *5

(Tex. App.—Houston [1st Dist.] Aug. 16, 2012, no pet.); INEOS Grp., 312 S.W.3d

at 848 (“On appeal, the scope of review is limited to the validity of the temporary

injunction order. We do not review the merits of the underlying case.”).

      Shor contends that the evidence presented at the temporary injunction

hearing does not support the second and third elements necessary to obtain a

temporary injunction:     a probable right to the relief sought and a probable,

imminent, and irreparable injury in the interim time period. She does not challenge

the first element—whether Pelican has asserted a cause of action against her.

                                         23
      A.     Probable Right to Relief Sought

      With regard to the second element, a probable right to the relief sought, the

applicant is not required to prove, at this stage, that it will prevail on final trial;

instead, the only question before the trial court is whether the applicant is entitled

to preservation of the status quo pending trial. Sonwalkar, 2012 WL 3525384, at

*5 (citing Walling, 863 S.W.2d at 58); INEOS Grp., 312 S.W.3d at 848 (“The sole

issue presented to a trial court at a temporary injunction hearing is whether the

applicant may preserve the status quo pending trial on the merits.”). The applicant

must, at the very least, present some evidence that, under the applicable rules of

law, tends to support its cause of action. INEOS Grp., 312 S.W.3d at 848; Tanguy

v. Laux, 259 S.W.3d 851, 857 (Tex. App.—Houston [1st Dist.] 2008, no pet.) (“A

probable right to the relief sought is shown by alleging a cause of action and

presenting evidence that tends to sustain it.”).

      At the temporary injunction hearing, James Black testified that Paul Black

does not have an ownership interest in any of the applicants and that he does not

have an ownership interest in any of the applicants’ Grimes County properties. As

further supporting evidence, Pelican presented the Nueces County judgment

incorporating the earlier arbitration award, the trust declaration for the Trust

reflecting that Paul Black is the sole beneficiary of this spendthrift trust, and the

formation documents for each of the other applicant-entities.            All of these

                                          24
formation documents indicate that the Trust or an entity wholly-owned by the

Trust is the sole owner of each of the entities and that Paul Black does not have an

ownership interest in the entities. James further testified that the Grimes County

oil and gas leases and other mineral interests are all Trust assets and are not owned

by Paul Black. He also testified that none of the applicants have been involved in

litigation with Shor, and Shor does not have a judgment against any of these

entities. This is some evidence, therefore, that Black does not have an ownership

interest in any of the applicants or their assets, and, therefore, that the applicants

are not parties to the Nueces County judgment and their assets are not susceptible

to execution on that judgment. See INEOS Grp., 312 S.W.3d at 848 (holding that,

to establish probable right of recovery, applicant must present at least some

evidence that tends to support its cause of action); see also Intercontinental

Terminals Co., LLC v. Vopak N. Am., Inc., 354 S.W.3d 887, 897 (Tex. App.—

Houston [1st Dist.] 2011, no pet.) (“The evidence must be sufficient to raise a bona

fide issue as to [the applicant’s] right to ultimate relief.”).

       Shor contends that the evidence does not support the trial court’s conclusion

that Pelican established a probable right of recovery because the evidence reflects

that Paul Black “actually controls” the business dealings of the Trust, including

determining which assets are purchased by the Trust, that he is involved on a “day-

to-day” basis with the Trust’s oil and gas deals, and that two of the entities—

                                            25
Pelican Oil & Gas Management, LLC, and Pelican Oil & Gas, LP—were formed

after the arbitration panel rendered an award against Black in favor of Shor,

suggesting that the entities were formed to fraudulently transfer Black’s assets to

avoid execution on the Nueces County judgment, entered several months later.

Shor has, however, presented no evidence of specific assets that Black transferred

to the Pelican entities or to the Trust after either the arbitration award or the

Nueces County judgment was entered against him.            Moreover, in a case of

conflicting evidence, such as this one, when reviewing the trial court’s decision to

grant injunctive relief, we view the evidence in the light most favorable to the trial

court’s ruling and defer to the trial court’s resolution of conflicting evidence. See

INEOS Grp., 312 S.W.3d at 848. The trial court does not abuse its discretion when

some evidence reasonably supports its decision. Butnaru, 84 S.W.3d at 211;

Sharma v. Vinmar Int’l, Ltd., 231 S.W.3d 405, 419 (Tex. App.—Houston [14th

Dist.] 2007, no pet.).

      We therefore conclude that Pelican presented some evidence supporting its

probable right to recovery on the merits of its claims against Shor.

      B.     Probable, Imminent, and Irreparable Injury

      “Probable injury” includes the elements of imminent harm, irreparable

injury, and no adequate remedy at law. El Tacaso, Inc. v. Jireh Star, Inc., 356
S.W.3d 740, 743 (Tex. App.—Dallas 2011, no pet.); Khaledi v. H.K. Global

                                         26
Trading, Ltd., 126 S.W.3d 273, 283 (Tex. App.—San Antonio 2003, no pet.)

(“Probable injury in the interim is established by tendering evidence of imminent

harm, irreparable injury, and inadequate legal remedy.”). 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. Butnaru, 84
S.W.3d at 204; Sharma, 231 S.W.3d at 427 (“That is, the applicant has to establish

there is no adequate remedy at law for damages. An adequate remedy at law is one

that is as complete, practical, and efficient to the prompt administration of justice

as is equitable relief.”).   Generally, money damages may be inadequate to

compensate an injured party for the loss of property deemed to be legally “unique”

or irreplaceable. Sonwalkar, 2012 WL 3525384, at *12 (quoting N. Cypress Med.

Ctr. Operating Co. v. St. Laurent, 296 S.W.3d 171, 175 (Tex. App.—Houston

[14th Dist.] 2009, no pet.)). A trial court may grant equitable relief when a dispute

involves real property. Butnaru, 84 S.W.3d at 211. A trial court may also grant

injunctive relief when the enjoined conduct threatens to disrupt an ongoing

business. See Sonwalkar, 2012 WL 3525384, at *12; Frequent Flyer Depot, Inc. v.

Am. Airlines, Inc., 281 S.W.3d 215, 228 (Tex. App.—Fort Worth 2009, pet.

denied) (“Disruption to a business can be irreparable harm.”).         A temporary

injunction may not, however, be granted solely upon the mere speculation of

                                         27
injury, based only on fear or apprehension. Fox v. Tropical Warehouses, Inc., 121
S.W.3d 853, 861 (Tex. App.—Fort Worth 2003, no pet.).

      At the temporary injunction hearing, Shor’s counsel testified that, before he

received notice of the temporary restraining order that the trial court entered on

October 4, 2011, he filed an application for a writ of garnishment in Live Oak

County, seeking to garnish any interest that applicant SGW Interests, LLC, has in

oil and gas leases in that county. James Black testified that, pursuant to the Live

Oak County writ of garnishment, Mego Resources, the garnishee, withheld a

“substantial amount of money” based on royalty payments owed to SGW Interests

and refused to make these payments until the resolution of this dispute. Prior to

the filing of Pelican’s original petition and application for injunctive relief, Shor

sought turnover relief in Nueces County. Shor also obtained a court order giving

her title to property at 500 N. Water Street in Corpus Christi, which is where the

headquarters of all of the Pelican entities are located. Shor took possession of the

records of all of the entities, and her counsel refused to return their files, books,

and records. James testified that it is “extremely important” for him to retrieve

these records because he needs them for, among other things, filing franchise tax

returns and federal tax returns. He also stated that the records contain information

covered by the attorney-client privilege. Thus, Shor had already sought execution

                                         28
on the applicants’ assets before the applicants sought injunctive relief prohibiting

this conduct.

      James also testified that the applicants own “valuable” oil and gas interests,

including “some leases,” in Grimes County.           He agreed with the applicants’

counsel that the Trust “stands to lose substantial real property rights if its title does

not apply.” He agreed that any liens that Shor placed on the applicants’ property

would “cause significant financial harm” to the Trust. James testified that if the

Trust lost its income stream, he would not receive compensation as the trustee and

the Trust would not be able to make distributions to Paul Black. 3

      James’s testimony concerning Shor’s writ of garnishment filed in Live Oak

County commanding Mego Resources to withhold funds payable to SGW Interests

and his testimony and the testimony of Shor’s attorney concerning Shor’s retention

of the applicants’ records and files, show that Shor has already pursued, and, in the

absence of temporary injunctive relief pending trial on the merits of the underlying

3
      In the absence of an agreement by the parties, the affidavit of James Black, filed
      with Pelican’s application for injunctive relief, does not constitute evidence
      supporting the issuance of the temporary injunction. See Millwrights Local Union
      No. 2484 v. Rust Eng’g Co., 433 S.W.2d 683, 686 (Tex. 1968); Ahmed v. Shimi
      Ventures, L.P., 99 S.W.3d 682, 684 n.2 (Tex. App.—Houston [1st Dist.] 2003, no
      pet.) (“[A]bsent the parties’ agreement, affidavits attached to pleadings and not
      admitted into evidence do not constitute evidence.”); see also Pierce v. State, 184
S.W.3d 303, 307 (Tex. App.—Dallas 2005, no pet.) (“We conclude a trial court
      may issue a temporary injunction based on affidavit testimony admitted into
      evidence at the hearing thereon.”) (emphasis in original). James’s affidavit was
      not entered into evidence during the temporary injunction hearing, and, therefore,
      we do not consider it when determining whether evidence supports the temporary
      injunction.
                                           29
dispute, is likely to continue pursuing, attempts to satisfy her judgment against

Paul Black from the assets of the applicants without a judicial determination that

the applicants are, in fact, liable for Paul Black’s debts, to their harm.

      By withholding the documents and records of the applicants and funds owed

to SGW Interests by Mego Resources, Shor is interfering with the business

relations of the applicants. See Sonwalkar, 2012 WL 3525384, at *12; see also

Frequent Flyer Depot, Inc., 281 S.W.3d at 228 (holding that disruption to business

can be irreparable harm). James testified that allowing Shor to continue pursuing

garnishment remedies or to place liens on the applicants’ property would result in

the Trust’s losing “substantial property rights” and suffering “significant financial

harm.”    Although Shor’s attorney testified that he would not pursue collection

methods while temporary injunctive relief is in place, there is every indication that,

if she were not restrained by injunctive relief, Shor would continue to pursue

garnishment and turnover relief seeking the applicants’ assets, without a judicial

determination that Paul Black fraudulently conveyed assets to the applicants or that

the applicants are alter egos of Paul Black, which would permit execution against

those assets. Under the status quo, which the applicants seek to preserve, the

applicants’ assets are ultimately owned by the Trust, a valid spendthrift trust whose

assets are not subject to “attachment, execution, garnishment, or other seizure” by

Paul Black’s creditors. See Burns, 948 S.W.2d at 322. The applicants have

                                           30
presented evidence that Shor has already disrupted the status quo by seeking

execution on their assets and that she will likely continue to do so in the future,

thus demonstrating probable injury in the absence of injunctive relief.

      We conclude that the temporary injunction order is supported by evidence

establishing probable injury to the applicants.

      We overrule Shor’s second issue.

                                    Conclusion

      We lift the temporary stay of trial court proceedings entered on March 21,

2012, and affirm the order of the trial court granting a temporary injunction in

favor of Pelican.

                                              Evelyn V. Keyes
                                              Justice

Panel consists of Justices Keyes, Massengale, and Brown.

                                         31