Khaledi v. H.K. Global Trading, Ltd.
| Decision Date | 01 October 2003 |
| Docket Number | No. 04-02-00906-CV.,04-02-00906-CV. |
| Citation | 126 S.W.3d 273 |
| Parties | Heydar "Shaun" KHALEDI, Appellant v. H.K. GLOBAL TRADING, LTD.; Abdol Rasoul "Ross" Khaledi; Abbas "Shahram" Khaledi; and HAR Properties, Ltd., Appellees. |
| Court | Texas Supreme Court |
Honorable Andres Reyes, Judge Presiding.
AFFIRMED AS MODIFIED.
Sitting: Catherine Stone, Justice
This is an appeal from a temporary injunction order entered against appellant, Heydar "Shaun" Khaledi. We modify the trial court's order and affirm as modified.
The underlying lawsuit arises from a business dispute among Heydar "Shaun" Khaledi, Abdol Rasoul "Ross" Khaledi, and Abbas "Shahram" Khaledi, all brothers who began their business relationship in the 1980s. By the 1990s, the brothers had created almost seventeen companies/partnerships ("the Khaledi Companies") involving electronics, money exchange, and construction. Throughout most of the 1990s, the three brothers worked harmoniously; however, in 1999, they began to experience personal and professional problems. As a result, Ross and Shahram agreed to buy out Shaun's business interests. The brothers also agreed to retain Shaun as a consultant for the companies. On May 11, 2000, the brothers signed a Letter Agreement detailing the sale and consulting agreement terms. On June 2, 2000, Shaun transferred his interest in the Khaledi Companies for approximately $5 million to be paid over three years pursuant to a Promissory Note, under which H.K. Global Trading, Ltd. ("H.K. Global") was the borrower and Shaun the lender. On that same day, the brothers also signed a Consulting Agreement, under which Shaun would act as a consultant to H.K. Global. Pursuant to the Consulting Agreement, Shaun was to be compensated approximately $6 million over five years. The brothers and H.K. Global also executed an Agreement Regarding Conditions to Survive Closing, which set forth other obligations related to closing the deal amongst the brothers.
Ross and Shahram personally guaranteed the debt owed under the Consulting Agreement and the promissory note (collectively, "the indebtedness"). In addition to the personal guarantees, HAR Properties, Ltd. executed deeds of trust on property located on Grant Street and Spivey Lane in Laredo, Texas to secure the indebtedness. As part of the closing on the deal, H.K. Global granted International Bank of Commerce ("IBC") a lien on the Grant Street and Spivey Lane properties. The brothers' and H.K. Global's obligations under the Agreement Regarding Conditions to Survive Closing included obtaining the release of Shaun's guarantees on certain other debt owed to IBC and another bank and obtaining the release of deeds of trust on two properties on San Mateo in Laredo, Texas that secured other debt owed to IBC. Shaun's obligations included the subordination of his liens on the Grant Street and Spivey Lane properties to IBC. Pursuant to the Promissory Note and the two deeds of trust, Shaun would release his Grant Street lien "upon retirement of 50%" of the indebtedness and he would release his Spivey Lane lien "upon payment in full" of the indebtedness.
In late 2001, Ross and Shahram paid off the IBC debt early, which removed IBC's liens from the Grant Street and Spivey Lane properties and resulted in Shaun now holding a first lien position on both properties. In late 2001, Ross and Shahram asked Shaun to again subordinate his liens to another lender, but he refused. The underlying litigation eventually ensued.
In January 2002, H.K. Global, Ross, Shahram, and HAR Properties, Ltd. (collectively, "plaintiffs") sued Shaun on the following causes of action: fraud in the inducement of the Consulting Agreement, an equitable claim for rescission of the agreement, breach of fiduciary duties, breach of the Consulting Agreement and Agreement Regarding Conditions to Survive Closing, violations of the Deceptive Trade Practices Act, battery, and assault. Ross and Shahram also asserted several claims related to the deeds of trust that secured the indebtedness. After filing suit, H.K. Global made the payments owed to Shaun under the Consulting Agreement and the promissory note into the registry of the court, rather than directly to Shaun. In October 2002, Shaun informed his brothers of his intention to accelerate the entire indebtedness. Plaintiffs obtained a temporary restraining order to enjoin acceleration of the indebtedness and to enjoin any foreclosure of the two properties. Despite the temporary restraining order, Shaun attempted to accelerate the indebtedness and commenced foreclosure proceedings. On October 29, 2002, the trial court signed an order enjoining acceleration and foreclosure and setting a hearing on plaintiffs' applications for temporary injunction for November 7, 2002. On November 7th, the trial court heard evidence on plaintiffs' application. On November 26, 2002, the court issued its Order on Plaintiffs' Applications for Temporary Injunction ("the November 26th Order"). Shaun filed this interlocutory appeal.
On March 31, 2003, this court "provide[d] the trial court with the opportunity to make further orders, including one dissolving the order appealed from or amending the Order on Plaintiffs' Application for Temporary Injunction to correct any typographical errors or to bring the Order into compliance with Tex. R. Civ. P. 683." On May 5, 2003, the trial court issued an Amended Order on Application for Temporary Injunction ("the Amended Order"). This court allowed further briefing by the parties and consolidated Shaun's complaints regarding the November 26th Order with his complaints regarding the Amended Order (collectively, "the temporary injunction").
On appeal, Shaun asserts the trial court abused its discretion in issuing the temporary injunction because the Amended Order changes the status quo by granting relief that will irrevocably harm him, grants plaintiffs ultimate relief without a trial on the merits, and improperly grants plaintiffs more relief than they sought in their applications for injunctive relief. Shaun also asserts the findings contained in the Amended Order are conclusory, do not comply with Texas Rule of Civil Procedure 683, and are not supported by the evidence. Finally, Shaun asserts the bond set by the court in the Amended Order is not supported by the evidence and is inadequate as a matter of law.
A temporary injunction is an extraordinary remedy and does not issue as a matter of right. Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993). A temporary injunction serves to preserve the status quo of the litigation's subject matter pending trial on the merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). Accordingly, the only question before the trial court is whether the applicant is entitled to preservation of the status quo pending trial on the merits. Walling, 863 S.W.2d at 58; Blackthorne v. Bellush, 61 S.W.3d 439, 442 (Tex. App.—San Antonio 2001, no pet.). At the hearing for a temporary injunction, the applicant is not required to establish that it will prevail on final trial. Walling, 863 S.W.2d at 58. A temporary injunction should issue only if the applicant establishes (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 if the injunction is not granted. Butnaru, 84 S.W.3d at 204.
The decision to grant a temporary injunction lies in the sound discretion of the trial court and is subject to reversal only for a clear abuse of that discretion. Id.; Walling, 863 S.W.2d at 58. The trial court abuses its discretion when it misapplies the law to the "established facts or when the evidence does not reasonably support the conclusion that the applicant has a probable right of recovery." State v. Southwestern Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975). All legitimate inferences from the evidence are drawn in favor of the trial court's judgment. City of San Antonio v. Rankin, 905 S.W.2d 427, 430 (Tex. App.—San Antonio 1995, no writ). An abuse of discretion does not exist when the trial court bases its decision on conflicting evidence and the evidence reasonably supports its conclusion. Butnaru, 84 S.W.3d at 211; Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978).
Shaun asserts the trial court's findings in the Amended Order do not comply with Texas Rule of Civil Procedure 683 because they are conclusory. Every order granting a temporary injunction must "set forth the reasons for its issuance." Tex. R. Civ. P. 683. The procedural requirements of Rule 683 "are mandatory, and an order granting a temporary injunction that does not meet them is subject to being declared void and dissolved." Qwest Communications Corp. v. AT&T Corp., 24 S.W.3d 334, 337 (Tex. 2000). Here, the trial court found that Shaun's failure to release and subordinate prevented the plaintiffs "from realizing the significant loan values in such unique properties," and placed an extreme hardship and/or significantly impaired plaintiffs' ability to assist in paying amounts owed under the promissory note and to tender monies into the court's registry. The court also found that the plaintiffs' business plan and ability to obtain financing on the properties were "adversely affected in a way that cannot be effectively measured in dollars" if the injunction is not issued. We hold these findings are adequate under Rule 683.
Rule 683 also requires that the order define, in reasonable detail, the act to be enjoined. Tex. R. Civ. P. 683. Shaun contends the Amended Order is vague for several reasons. First, he complains that the language in the order enjoining him...
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