Desai v. Reliance Mach. Works, Inc., A14-90-280-CV

• Decision Date: 11 July 1991
• Docket Number: No. A14-90-280-CV,A14-90-280-CV
• Citation: 813 S.W.2d 640
• Parties: Davendra D. DESAI, Appellant, v. RELIANCE MACHINE WORKS, INC., Natu Patel and Kokila Patel, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 640

813 S.W.2d 640

Davendra D. DESAI, Appellant, v. RELIANCE MACHINE WORKS, INC., Natu Patel and Kokila Patel, Appellees.

No. A14-90-280-CV.

Court of Appeals of Texas Houston (14th Dist.).

July 11, 1991.

Rehearing Overruled Aug. 22, 1991.

Stuart M. Nelkin, Kathy D. Boutchee, Houston, for appellant.

Leonard L. Scarcella, Stafford, Deborah Bailey, Suger Land, for appellees.

Before JUNELL, MURPHY and CANNON, JJ.

OPINION

JUNELL, Justice.

This is an interlocutory appeal from the trial court's order dissolving a temporary injunction. TEX.CIV.PRAC. & REM.CODE ANN. § 51.014 (Vernon Supp.1989). In six points of error, appellant asserts that the trial court abused its discretion in dissolving the temporary injunction. We affirm.

Reliance Machine Works, Inc. was founded in 1982 by appellant and appellee, Natu Patel. Fifty percent of the stock was issued to appellant and the remaining fifty percent was issued to Dhanash Patel, Natu Patel's brother. Appellant and Dhanash Patel were the sole officers of the corporation and the only members of the board of directors. In 1983, the parties entered into an oral agreement whereby ownership of Reliance would be transferred to appellant's wife, Minaxi Desai, and appellee, Kokila Patel, in order to qualify as a minority (female) owned business for the purposes of securing government contracts. Shortly thereafter, fifty-one percent of the stock was transferred to appellee, Kokila Patel, and this is where the dispute begins. Appellees contend that the issuance of an additional one percent of the stock to Kokila Patel was permanent in that it was in exchange for $55,000 of unpaid salaries. Appellant asserts that this arrangement was only temporary due to the fact that Minaxi Desai was in India at the time, and that the agreement was that ownership in Reliance would be equalized upon her return. When Minaxi Desai returned from India, Kokila Patel did not relinquish her majority interest. Appellant contends that appellee, Kokila Patel, fraudulently obtained the majority interest in Reliance and has used that interest to the detriment of Reliance and appellant.

In January 1987, appellant brought a shareholder's derivative suit against appellees and on April 2, 1987, the trial court entered a temporary injunction order enjoining the appellees from engaging in twenty enumerated acts. The temporary injunction order did not include an order setting the cause for trial on the merits. On March 21, 1990, the trial court dissolved the temporary injunction upon a finding that a material and substantial change in circumstances and conditions had occurred since the issuance of the temporary injunction, and appellant appealed. On appellant's motion, this court entered a temporary order, pursuant to TEX.R.APP.P. 43(c), continuing the injunction pending disposition of this appeal.

By way of a counterpoint, appellees assert that the trial court did not abuse its discretion in dissolving the temporary injunction because the original temporary injunction order did not comply with TEX.R.CIV.P. 683. Rule 683 provides, in pertinent part, that:

Every order granting a temporary injunction shall include an order setting the cause for trial on the merits with respect to the ultimate relief sought.

TEX.R.CIV.P. 683. The trial court's April 2, 1987 order granting the temporary injunction did not include an order setting the cause for trial on the merits. We agree that had appellees appealed from the original order, the temporary injunction should have been dissolved. E.g., Interfirst Bank San Felipe N.A. v. Paz Construction Co., 715 S.W.2d 640 (Tex.1986). However, appellees did not perfect an appeal from the initial order, and the time limit for doing so has long since expired. See TEX.R.APP.P. 42(a). Accordingly, we have no jurisdiction to review the validity of the trial court's April 2, 1987 order granting the temporary injunction. See, e.g., Ludewig v. Houston Pipeline Co., 737 S.W.2d 15, 16 (Tex.App.--Corpus Christi 1987, no writ); Tober v. Turner of Texas, Inc., 668 S.W.2d 831, 834 (Tex.App.--Austin 1984, no writ). Appellees' counterpoint is overruled.

The decision to dissolve a temporary injunction is a matter lying within the broad discretion of the trial court. Our review of the trial court's order of dissolution is limited to the narrow question of whether the trial court's action constituted a clear abuse of discretion. See Tober, 668 S.W.2d at 834; State v. Friedmann, 572 S.W.2d 373, 375 (Tex.Civ.App.--Corpus Christi 1978, writ ref'd n.r.e.). The trial court has the authority to dissolve a temporary injunction upon a showing of changed conditions. See, e.g., Tober, 668 S.W.2d at 835-36. Here, appellees' motion to dissolve alleged that, since the issuance of the temporary injunction, appellees had been effectively excluded from any participation in the operations and management of Reliance. After three days of testimony in a contested hearing, the trial court dissolved the injunction upon a finding of material and substantial changes in circumstances and conditions since the issuance of the temporary injunction on April 2, 1987.

Appellant's first point of error asserts that the trial court abused its discretion in...