Ahmed v. Shimi Ventures, L.P.

Citation99 S.W.3d 682
Decision Date31 January 2003
Docket NumberNo. 01-02-00914-CV.,01-02-00914-CV.
PartiesMohammed Atique AHMED, Appellant,<SMALL><SUP>1</SUP></SMALL> v. SHIMI VENTURES, L.P. and Beltway Insurance Agency, Inc., Appellees.
CourtTexas Court of Appeals

John H. Thomisee Jr., Houston, for Appellant.

John H. Sklar, Houston, for Appellee. Panel consists of Justices TAFT, KEYES, and HIGLEY.

OPINION

TIM TAFT, Justice.

Appellant, Mohammed Atique Ahmed, takes this interlocutory appeal from the granting of a temporary injunction. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(4) (Vernon Supp.2003). We determine (1) whether the trial court could enter, and whether we may review in this interlocutory appeal, a modified temporary injunction order that was entered after Ahmed had appealed the original temporary injunction order; (2) whether we must vacate the injunction in part because it requires some acts violating the Insurance Code; and (3) whether the trial court abused its discretion in determining that appellees, Beltway Insurance Agency, Inc. ("Beltway") and Shimi Ventures, L.P. ("Shimi"), carried their burden of showing a probable right of recovery and irreparable injury. We modify the temporary injunction order in part, to vacate certain of its provisions, and affirm it as so modified.

Background

The following background facts come from evidence presented at the temporary injunction hearing and from two affidavits, which the trial court considered without objection, that were attached to Beltway and Shimi's petition.2

Beltway incorporated in October 2000 and is the managing general partner of Shimi, which was formed the same month. Shortly after Shimi's formation, Shimi purchased the assets, goodwill, and books of business of the Houston offices of Amco Insurance Agencies, Inc. ("Amco").

The undisputed evidence shows that, through the date of the temporary injunction hearing, Beltway had never been licensed as an insurance agency by the Texas Department of Insurance, even though Beltway's petition admitted that, since the purchase of Amco's business, Beltway had been "in the business of selling Texas personal automobile liability insurance." In contrast, Ahmed — originally the president, board member, employee, and shareholder of Beltway and also a limited partner in Shimi — had been a licensed, limited lines agent since 1999. There was testimony that Beltway had wanted Ahmed to get an insurance license in Beltway's name and that Ahmed could have obtained that license in as few as six weeks.

Starting sometime in late 2000, Ahmed began entering into producer agreements in his own name with insurers or their agents with whom Beltway did business. Ahmed received commission checks pursuant to these agreements. Through July 23, 2002, when he left Beltway, Ahmed endorsed his commission checks earned under any of these producer agreements to Beltway and deposited them in Beltway's account.

Ahmed signed one such producer agreement in early 2002 with Logic Underwriters, Inc. ("Logic"), an insurance agency with which Beltway did business. As with his other producer agreements, Ahmed signed the agreement in his own name, not expressly as agent of Beltway. Logic generally issued commission checks either in Ahmed's name or jointly in his and Beltway's name, showing Beltway's address under the payee line.3 However, Logic mailed these checks to the addresses of Ahmed's personal stores, not to Beltway's address. Following the usual procedure, Ahmed endorsed the Logic commission checks to Beltway.

On July 23, 2002, Beltway's shareholders and board members met and removed Ahmed as a board member, president, and employee of Beltway. The board removed Ahmed because he had not obtained the licenses required for Beltway to act as a limited lines agency. According to Beltway and Shimi's evidence, Ahmed promised at that meeting not to interfere with Beltway's operations or relations with insurers after his removal. Nonetheless, Ahmed thereafter instructed Logic to issue commission checks solely in his name and to send them to him.

This dispute concerns who is entitled to the commission checks issued after Ahmed's removal for insurance policies that Ahmed wrote before his removal. In a nutshell, the parties dispute the capacity in which Ahmed acted under the producer agreements and, thus, the ownership of his commissions. Ahmed testified that he entered into the producer agreements on his own behalf, not as Beltway's agent; that the commissions earned pursuant to his producer agreements were his alone; and that the commission checks that he endorsed to Beltway were loans, although he admitted that no loan documents existed. Beltway and Shimi presented evidence that Ahmed acted as Beltway's agent under the producer agreements through July 23, 2002; that Ahmed knew that the commissions he earned on policies written before that date belonged to Beltway; and that no loan existed.

Shimi and Beltway sued Ahmed for fraud and conversion, seeking a temporary restraining order ("TRO") and temporary and permanent injunctions and damages.4 The ancillary judge granted an ex parte TRO that restrained Ahmed, his wife, and those acting for or with them from "directly or indirectly removing, transferring, wiring, spending, investing, secreting, or ... disposing" of funds belonging to Beltway and Shimi, whether from Logic or otherwise. The TRO also restrained the same people from contacting any insurers with whom Beltway and Shimi conducted business.

Ahmed answered, seeking to dissolve the TRO, counter-claiming for contract breach and conversion, and seeking a TRO and temporary and permanent injunctions against Beltway and Shimi. On August 19, 2002, the trial court held an evidentiary hearing on the applications for temporary injunction. The trial court orally granted Beltway and Shimi's application and denied Ahmed's.5 On August 23, 2002, the trial court signed a temporary injunction order, which provided in pertinent part as follows:

IT IS THEREFORE ORDERED that Mohammed Atique Ahmed and all persons acting on behalf of or in concert with him, and all persons with actual notice of this Order, are temporarily enjoined from directly or indirectly removing, transferring, wiring, spending, investing, secreting, or in any manner whatsoever disposing of the commissions from Logic Underwriters, Inc. or the commissions paid by any insurer, or any other funds that belong to [Shimi] or [Beltway].

IT IS FURTHER ORDERED that Mohammed Atique Ahmed shall remit to [Beltway] the proceeds from all commission checks that have been deposited to accounts under his control for commissions earned on policies written through July 23, 2002 (approx.$47,325.00) from Logic Underwriters, Inc. or paid by any insurer with whom [Shimi] or [Beltway] conduct business and shall deliver such proceeds to [Shimi and Beltway's] counsel....

IT IS FURTHER ORDERED that Mohammed Atique Ahmed shall deliver to [Shimi and Beltway's] counsel a photocopy of each commission check that has been deposited to accounts under his control for commissions earned on policies written through July 23, 2002 from Logic Underwriters, Inc. or paid by any insurer with whom [Shimi] or [Beltway] conduct business and shall deliver such photocopies to [Shimi and Beltway's] counsel....

IT IS FURTHER ORDERED that Mohammed Atique Ahmed shall endorse and make payable to the order of [Beltway] all checks from Logic Underwriters, Inc. or paid by any insurer with whom [Shimi] or [Beltway] conduct business for commissions earned on policies written through July 23, 2002 and shall deliver within forty-eight (48) hours after his receipt of all such checks to [Shimi and Beltway's] counsel.

IT IS FURTHER ORDERED that [Shimi and Beltway] and Mohammed Atique Ahmed shall photocopy each commission check that comes into their respective possession for commissions earned on policies written through July 23, 2002 from Logic Underwriters, Inc. or any other insurer with whom [Shimi] or [Beltway] conduct business and shall make such photocopies available to opposing counsel upon request.

IT IS FURTHER ORDERED that Mohammed Atique Ahmed, his family members, agents, servants, employees, attorneys and all other persons or entities in active concert or participation with him are enjoined from directly or indirectly contacting Logic Underwriters, Inc. or any insurer with whom [Shimi] or [Beltway] conduct business for any purpose related to insurance policies written or commissions earned on insurance policies written through July 23, 2002 and claiming that they represent the interests of [Shimi and Beltway].

(Emphasis added.)

Ahmed appealed the temporary injunction order three days later. He then left the country, reportedly to visit a sick family member. In September 2002, Beltway and Shimi moved to modify the temporary injunction order because Ahmed had allegedly failed to remit the commissions that he had already deposited (about $47,000), to endorse further commission checks to Beltway, and to provide Beltway and Shimi with copies of further commission checks. Beltway and Shimi claimed that Ahmed had not returned to the country. After holding a non-evidentiary hearing on the modification motion, the trial court entered a modified temporary injunction order, which was substantively similar to the first order except that it lowered Shimi and Beltway's bond and also ordered all insurers doing business with Shimi or Beltway to reissue any commission checks issued to Ahmed or Ahmed and Beltway jointly since August 2002, making them payable solely to Beltway, and to make all future commissions checks on policies written through July 23, 2002 payable solely to Beltway.

Effect of Temporary Injunction's Modification After Perfection of Appeal

While this interlocutory appeal was pending, and after Ahmed had filed his brief, the trial court entered an order modifying the appealed temporary injunction order. Citing Rule of Appellate Procedure...

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