Court Opinion

ID: 9778700
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:16:41.08175+00
Date Added: 2024-06-11T07:33:12.676538
License: Public Domain

COHEN, Justice,
dissenting on rehearing.
On original submission, I joined the panel’s decision to dissolve the temporary injunction and remand the cause for another temporary injunction hearing at which the trial judge would apply the legal standard stated in West Texas Transmission, L.P. v. Enron Corp., 907 F.2d 1554 (5th Cir.1990), cert. denied, 499 U.S. 906, 111 S.Ct. 1105, 113 L.Ed.2d 215 (1990). Upon further consideration, I would affirm the judgment.
The majority opinion employs an appeal from a temporary injunction to establish a new rule of Texas law. The new rule is based solely on a Fifth Circuit opinion that claims to apply Texas law, but the Texas cases it relies on did not make the holdings for which they are cited. I believe that the West Texas Transmission case did not follow Texas law; rather, it created new law. The opinion in West Texas Transmission is long, loose, and hard to understand. Its declaration of Texas law is questionable, even if it ultimately proves to be correct. Moreover, the Fifth Circuit was reviewing a final judgment following a full trial with a complete record. We are reviewing an interlocutory order before all the facts have been developed in a full trial on the merits. Given that the rule of law announced is new, that its application is difficult (for me at least), and that we do not have a complete record, I would defer to the trial court’s judgment. I would follow the rule set out in Liberty Mut. Ins. Co. v. Mustang Tractor and Equipment Co., 812 S.W.2d 663, 666 (Tex.App.—Houston [14th Dist.] 1991, no writ), which affirmed an order granting a temporary injunction and declared:
It cannot be said that the trial judge clearly abused his discretion when the state of the law on an issue is undecided. Given evidence of a probable right to recovery, the trial court may grant an injunction and reserve difficult questions of law and fact for full development at trial.
The weaknesses of the West Texas Transmission opinion are apparent upon examination. Its first major holding applicable to this case is the statement that:
[T]he owner of property subject to a right of first refusal remains master of the conditions under which he will relinquish his interest, as long as those conditions are commercially reasonable, imposed in good faith and not specifically designed to defeat the preemptive rights.
907 F.2d at 1563. The only Texas authority cited for this proposition is Holland v. Fleming, 728 S.W.2d 820, 823 (Tex.App.—Houston [1st Dist.] 1987, writ refd n.r.e.); however, the Holland opinion does not say that. After citing authority from other states, the Fifth Circuit concludes:
Where the owner meets these three standards, the holder of the right of first refusal lacks grounds to remove specific condi*13tions from the contract, or to extract other concessions as part of the agreement.
907 F.2d at 1563. No authority is cited for this statement, which is the basis for the majority’s holding that the holder of the right of first refusal may remove specific conditions from the contract or extract other concessions if the conditions of the offered contract were not commercially reasonable, were imposed in bad faith, or were specifically designed to defeat the option holder’s rights. The only other Texas cases relied on by the Fifth Circuit for this proposition are also not in point. Id. at 1566.
I agree with my colleagues and with the Fifth Circuit that sellers and buyers should not be allowed to defeat a right of first refusal by creating terms that are a sham. Nevertheless, this difficult issue is best resolved after a full trial and a final judgment. I think we have both a weak record and a weak opinion in West Texas Transmission on which to announce a new rule of law. Thus, I would hold that the trial judge did not abuse his discretion in preserving the status quo pending a final judgment.
I respectfully dissent.