Michael J. DeLitta And DeLCom Properties, LLC v. Nancy Schaefer

ACCEPTED 03-15-00085-CV 4511551 THIRD COURT OF APPEALS CAUSE NO. 03-15-00085-CV AUSTIN, TEXAS 3/16/2015 1:38:15 PM JEFFREY D. KYLE CLERK In the Third Court of Appeals Austin, Texas FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 3/16/2015 1:38:15 PM MICHAEL J. DELITTA & DELCOM PROPERTIES, LLC JEFFREY D. KYLE Appellants Clerk

v.

NANCY SCHAEFER Appellee

Appeal from the 201st Judicial District Court Travis County, Texas; Cause No. D-1-GN-13-003516

APPELLANTS’ BRIEF (Oral Argument Requested)

DRUCKER | HOPKINS LLP Douglas R. Drucker Texas Bar No. 06136100 Kirby D. Hopkins Texas Bar No. 24034488 21 Waterway Avenue, Suite 300 The Woodlands, Texas 77380 281.362.2863 (phone) 855.558.1745 (fax) drucker@druckerhopkins.com (email) hopkins@druckerhopkins.com (email)

ATTORNEYS FOR APPELLANTS MICHAEL J. DELITTA AND DELCOM PROPERTIES, LLC

Identity of Parties and Counsel

Pursuant to Texas Rule of Appellate Procedure 38.1, Appellants submit the following designation of parties and counsel, and trial court:

APPELLANTS: Michael J. DeLitta DelCom Properties, LLC (Defendants in Underlying Suit)

APPELLANTS’ COUNSEL: Douglas R. Drucker Kirby D. Hopkins Drucker | Hopkins LLP 21 Waterway Avenue, Suite 300 The Woodlands, Texas 77380

APPELLEE: Nancy Schaefer (Plaintiff in Underlying Suit)

APPELLEE’S COUNSEL: Lisa Bowlin Hobbs Kurt Kuhn Kuhn Hobbs PLLC 3307 Northland Drive, Suite 310 Austin, Texas 78731

Howard F. (Sam) Carter The Carter Law Firm 14185 Dallas Parkway Suite 1275 Dallas, Texas 75254

Donald Taylor Taylor Dunham and Rodriguez, LLP 301 Congress Avenue Suite 1050 Austin, Texas 78701

ADDITIONAL PARTIES: Jeff Compton (Provisional Member and Limited- Receiver of Certain Defendants) Axiom Medical Consulting, LLC, Axiom Professionals, LLC, and Axiom Properties, LLC

ADDITIONAL PARTIES’ For Provisional Member Jeff Compton COUNSEL: and Axiom entities:

Eric J. Taube Hohmann, Taube & Summers, LLP 100 Congress Avenue 18th Floor Austin, Texas 78701

TRIAL COURT: Honorable Amy Clark Meachum 201st Judicial District Court Travis County, Texas

Table of Contents

Identity of Parties and Counsel ..................................................................................1 Table of Contents .......................................................................................................3

Table of Authorities ...................................................................................................4 Statement of the Case.................................................................................................6 Statement regarding Oral Argument ..........................................................................7 Issues Presented .........................................................................................................8

First Issue: Did the Trial Court Err in Refusing to Declare the October 29, 2013 Temporary Injunction Void? ..................................................................................8 Second Issue: Did the Trial Court Err in Refusing to Dissolve the October 29, 2013 Temporary Injunction?............................................................................................8 Statement of Facts ......................................................................................................9 Summary of the Argument.......................................................................................11

Argument..................................................................................................................12

The trial court erred in denying Appellants’ motion to dissolve and to declare void the temporary injunction. ............................................................12

1. The temporary injunction is void for two reasons. .....................................12

2. And it is irrelevant whether the temporary injunction was “agreed” to. ...15 Conclusion ...............................................................................................................15

Prayer .......................................................................................................................16

Certificate of Compliance ........................................................................................17 Certificate of Service ...............................................................................................18

Appendix ..................................................................................................................19

Table of Authorities

Cases Page(s) Bankler v. Vale, 75 S.W.3d 29 (Tex. App.—San Antonio 2001, no pet.)…………………...............12

Conlin v. Haun, 419 S.W.3d 682 (Tex. App. Houston [1st Dist.] 2013, no pet.).................................15

Emex Holdings LLC v. Naim, 2010 WL 2163139 (Tex. App.—Corpus Christi 2010, no pet.)...………………….14

EOG Res., Inc. v. Gutierrez, 75 S.W.3d 50 (Tex. App.—San Antonio 2002, no pet.)………….………………..14

Fasken v. Darby, 901 S.W.2d 591 (Tex. App.—El Paso 1995, no writ)………………….…………..13

Gray Wireline Service, Inc. v. Cavanna, 374 S.W.3d 464, 472 (Tex. App.--Waco 2011, no pet.)............................................16

Indep. Capital Mgmt., LLC v. Collins, 261 S.W.3d 792, 795 (Tex. App.—Dallas 2008, no pet.) ……………….…………14

InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640 (Tex. 1986) (per curiam)……………….……………………13, 15

Internat’l Broth. of Elec. Workers Local Un. 479 v. Becon Constr. Co., Inc., 104 S.W.3d 239 (Tex. App.—Beaumont 2003, no pet.)..……………..……….12, 13

Kotz v. Imperial Capital Bank, 319 S.W.3d 54 (Tex. App.—San Antonio 2010, no pet.)……………….................13

Poole v. U.S. Money Reserve, Inc., No. 09-08-137CV, 2008 WL 4735602, *9-13 (Tex. App.—Beaumont, Oct. 30, 2008, no pet.) (memo. op.)……………………..15

Qwest Comms. Corp. v. AT&T Corp., 24 S.W.3d 334 (Tex. 2000) (per curiam)….……….…….………………………...13

State v. Cook United, Inc., 464 S.W.2d 105 (Tex. 1971)….………………………………….………………..12

Stoner v. Thompson, 553 S.W.2d 150 (Tex. Civ. App.—Houston [1st Dist.] 1977, writ ref’d n.r.e.) ………………………………………………………………….…………………13

Rules Texas Rule of Civil Procedure 683……..…………………………………..Passim

Statement of the Case

This suit is, essentially, a dispute over the ownership and control of defendants’ Axiom Medical Consulting, LLC, Axiom Properties, LLC, and Axiom Professionals LLC.

On October 29, 2013, the parties agreed to a temporary injunction, which the trial court entered. [Appendix, Exhibit A]

On October 22, 2014, Appellants filed a motion to dissolve and to declare void that temporary injunction. [Appendix, Exhibit B.]

On January 16, 2015, the trial court entered an order denying the Appellants’ motion. [Appendix, Exhibit C.]

On February 5, Appellants timely appealed the trial court’s January 16, 2015 order.

Statement regarding Oral Argument

Appellants believe that oral argument should be permitted, given the relative complexity of the case, related proceedings, and issues presented.

Specifically, the Court’s decision process would be aided by oral argument by (among other things):

 providing further factual or procedural background not

adequately addressed in the briefing;

 responding to concerns over the proper use and application of

certain legal principles; and

 answering prudential questions concerning the future impact of

the Court’s ruling.

Issues Presented

First Issue: Did the Trial Court Err in Refusing to Declare the October 29, 2013 Temporary Injunction Void?

Second Issue: Did the Trial Court Err in Refusing to Dissolve the October 29, 2013 Temporary Injunction?

Statement of Facts

2013:

On October 29, 2013, Plaintiff and the Defendants agreed to a temporary injunction order (the “temporary injunction”) that the trial court signed. [Appendix, Exhibit A.]

On its face, the temporary injunction gave no reason for its issuance and set a trial date of April 7, 2014. Id. The temporary injunction order failed to identify any other possible date for its expiration, or provide any way for its terms to be renewed. Id.

2014:

On October 22, 2014, Appellants filed a motion to declare void and to dissolve the temporary injunction. [Appendix, Exhibit B.]

(In 2014, Appellants had two cases in this Court. First, this Court addressed whether it should provide mandamus relief for a trial court’s refusal to declare a temporary injunction void1 (not an issue here, as Appellants are not seeking mandamus relief). Second, this Court addressed whether it had jurisdiction to declare a temporary injunction void absent a

1See In re DeLitta et al., Cause No. 03-14-00423-CV, 2014 WL 3414187 (Tex. App.-Austin July 11, 2014, orig. proceeding) (mem. op.).

relevant motion, instead of a responsive pleading2 (not an issue here, as Appellants filed a motion).)

2015:

On January 16, 2015, the trial court denied the motion by order. [Appendix, Exhibit C.]

Appellants timely filed their accelerated notice of appeal.

2 See DeLitta v. Schaefer, Cause No. 03-14-00426-CV (Tex. App.—Austin). Defendants’ motion for rehearing and for en banc reconsideration in that case is still pending.

Summary of the Argument

Again and again, the Texas Supreme Court has emphasized that the requirements of Rule 683 are “mandatory.” That court has, accordingly, repeatedly held that injunctions not meeting those requirements are “void.”

Moreover, neither the Texas Rules of Civil Procedure nor the Texas Supreme Court have made any exceptions for “agreed” temporary injunctions. Indeed, other appellate courts have concluded—following the high court’s clear language—that even “agreed” temporary injunctions must meet these requirements, or be declared void.

As such, the temporary injunction here—which does not meet the requirements of Rule 683, for two independent reasons—is void. The trial court therefore erred in denying Appellants’ motion to declare the temporary injunction void and to dissolve it.

Argument

The trial court erred in denying Appellants’ motion to dissolve and to declare void the temporary injunction.

1. The temporary injunction is and was void for two reasons.

First, the temporary injunction fails to provide legally-sufficient reasons for its issuance.

“Every order granting an injunction and every restraining order shall set forth the reasons for its issuance.” TEX. R. CIV. P. 683 (emphasis added). In other words, while the trial court need not give its reasons for believing the applicant, “it is necessary to give the reasons why the injury will be suffered if the interlocutory relief is not ordered.” State v. Cook United, Inc., 464 S.W.2d 105, 106 (Tex. 1971 (emphasis added). Giving the reasons why the injury will be suffered includes “defining the injury and describing why it is irreparable.” Bankler v. Vale, 75 S.W.3d 29, 33 (Tex. App.—San Antonio 2001, no pet.) (emphasis added).

Moreover, the reasons provided by the trial court in the order of injunction “must be specific and legally sufficient, and not mere conclusory statements.” See Internat’l Broth. of Elec. Workers Local Un. *13 479 v. Becon Constr. Co., Inc., 104 S.W.3d 239, 244 (Tex. App.—Beaumont 2003, no pet.) (emphasis added).3

An injunction that fails to follow this requirement of Rule 683 is void and not valid. See Qwest Comms. Corp. v. AT&T Corp., 24 S.W.3d 334, 337 (Tex. 2000) (per curiam) (noting that 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.”) (emphasis added); InterFirst Bank San Felipe, N.A. v. Paz Constr. Co., 715 S.W.2d 640, 641 (Tex. 1986) (per curiam) (declaring temporary injunction void where it failed to satisfy requirements of Rule 683, as “[t]he requirements of Rule 683 are mandatory and must be strictly followed.”) (emphasis added); see also Fasken v. Darby, 901 S.W.2d 591, 593 (Tex. App.—El Paso 1995, no writ) (vacating order and dissolving temporary injunction for failing to comply with Rule 683).

Here, the temporary injunction gives no reason—much less a legally sufficient one—for its issuance. See Appendix, Exhibit A. It is therefore void.

3 See also, e.g., Stoner v. Thompson, 553 S.W.2d 150, 151 (Tex. Civ. App.—Houston [1st Dist.] 1977, writ ref’d n.r.e.) (“The conclusion that the situation is harmful is not a reason why injury will be suffered if the interlocutory relief is not ordered.”); Kotz v. Imperial Capital Bank, 319 S.W.3d 54, 57 (Tex. App.—San Antonio 2010, no pet.) (“At most, [] language [that Kotz will “suffer irreparable injury” to certain assets] characterizes by what means harm will occur unless Kotz is enjoined from taking possession and use of the subject property—but does not state or explain the reasons why irreparable injury will result absent an injunction.”).

And a “trial court abuses its discretion by issuing a temporary injunction order that does not comply with the requirements of rule 683.” Indep. Capital Mgmt., LLC v. Collins, 261 S.W.3d 792, 795 (Tex. App.—Dallas 2008, no pet.).

Second, the temporary injunction expired, and no longer carries an effective trial date.

A temporary injunction must include an order setting the case for a trial on the merits. TEX. R. CIV. P. 683. This rule works “to protect the parties from being subject to a temporary injunction made permanent by a court's failure to set the matter for a final determination on the merits.” See EOG Res., Inc. v. Gutierrez, 75 S.W.3d 50, 53 (Tex. App.—San Antonio 2002, no pet.); see also Emex Holdings LLC v. Naim, No. 13-09-591-CV, 2010 WL 2163139, *1-2 (Tex. App.—Corpus Christi 2010, no pet.). Right now, the appellants are subject to what amounts to a permanent injunction, even though they only agreed to terms through April 7, 2014 (e.g., paying appellee’s salary).

Rule 683 places the onus on the party requesting the injunctive relief to renew the injunction if the trial is delayed beyond the trial date set in the order. See Emex Holdings LLC, 2010 WL 2163139 at *2.

When a temporary injunction fails to comply with Rule 683’s procedural requirements, it is void. See, e.g., InterFirst, 715 S.W.2d at 641.

Here, the temporary injunction, by its own terms, was set to expire on April 7, 2014—the initial trial date. See Appendix, Exhibit A. No party ever moved to extend the temporary injunction, and the temporary injunction provides no method or mechanism for extending its terms beyond that time. In short, the temporary injunction expired then—and is now therefore void.

2. And it is irrelevant whether the temporary injunction was “agreed” to.

Neither Rule 683 nor the Texas Supreme Court has ever made any exception to these principles for “agreed” temporary injunctions.

Moreover, other appellate courts have correctly followed these principles in concluding that Rule 683’s mandatory requirements are, in fact, mandatory—and cannot be waived. See, e.g., Conlin v. Haun, 419 S.W.3d. 682, 686-87 (Tex. App. Houston [1st Dist.] 2013, no pet.) (where parties agreed to temporary injunction—and then sought appellate review more than four years later—rejecting estoppel argument and declaring injunction void for failing to comply with Rule 683); Poole v. U.S. Money Reserve, Inc., No. 09-08-137CV, 2008 WL 4735602, *9-13 (Tex. App.— Beaumont, Oct. 30, 2008, no pet.) (memo. op.).

In sum, a “void order has no force or effect and confers no rights; it is a mere nullity.” Gray Wireline Service, Inc., 374 S.W.3d at 472 (emphasis added) (reversing trial court, dissolving temporary injunction, and holding void-ness cannot be waived).

Conclusion

The trial court erred in refusing to declare the temporary injunction void and in refusing to dissolve it. The temporary injunction does comply with Rule 683’s requirement--in that the temporary injunction never included required reasons and currently has no effective trial date (as the specified—April 7, 2014—date has passed). And the Texas Supreme Court has made clear that such a temporary injunction is void. Moreover, no exception exists for “agreed” injunctions.

No harm will occur as a result of reversal by the appellate court here, as there is a court-appointed Receiver in place and appellee can re-apply for a temporary injunction that complies with Rule 683.

Prayer

Appellants DelCom Properties, LLC and Michael J. DeLitta respectfully requests that this Court: *17 (a) Reverse the trial court’s January 16, 2015 order denying

Appellants’ motion to dissolve and to declare void the October

29, 2013 temporary injunction; and (b) reverse, vacate, dissolve, and declare void the trial court’s

October 29, 2013 temporary injunction; and (c) grant them all other and further relief to which they may be

entitled.

Respectfully submitted,

DRUCKER | HOPKINS LLP

/s/ Douglas R. Drucker Douglas R. Drucker Texas Bar No. 06136100 Kirby D. Hopkins Texas Bar No. 24034488 21 Waterway Avenue, Suite 300 The Woodlands, Texas 77380 281.362.2863 (phone) 855.558.1745 (fax) drucker@druckerhopkins.com (email) hopkins@druckerhopkins.com (email)

ATTORNEYS FOR DEFENDANTS/APPELLANTS MICHAEL J. DELITTA & DELCOM PROPERTIES, LLC

Certificate of Compliance

Pursuant to Texas Rule of Appellate Procedure 9.4, the undersigned certifies that the number of words in this computer-generated document (according to the Word program’s word count function)—excluding the captions, identity of parties and counsel, statement regarding oral argument, table of contents, index of authorities, statement of the case, statement of issues presented, signature, proof of service, certification, certificate of compliance, and appendix—is 1,454 (text) and 133 (footnotes), for a total of 1,597.

Date: March 16, 2015 /s/ Kirby Hopkins Kirby Hopkins

Certificate of Service

Per Texas Rules of Appellate Procedure 6 and 9.5, I certify that I have served this document on all other parties on March 16, 2015 as follows:

Howard F. Carter via Electronic-filing The Carter Law Firm 14185 Dallas Parkway, Suite 1275 Dallas, Texas 75254 COUNSEL FOR PLAINTIFF NANCY SHAEFER

Donald Taylor via Electronic-filing Taylor Dunham & Rodriguez, LLP 301 Congress Avenue, Suite 1050 Austin, Texas 78701 COUNSEL FOR PLAINTIFF NANCY SHAEFER

Lisa Bowlin Hobbs via Electronic-filing Kurt Kuhn Kuhn Hobbs PLLC 3307 Northland Drive, Suite 310 Austin, Texas 78731 COUNSEL FOR PLAINTIFF NANCY SHAEFER

Eric J. Taube via Electronic-filing Hohmann, Taube & Summers LLP 100 Congress Avenue 18th Floor Austin, Texas 78701 COUNSEL FOR PROVISIONAL MEMBER JEFF COMPTON OF CERTAIN DEFENDANTS, AND OF CERTAIN DEFENDANTS

Date: March 16, 2015 /s/ Kirby Hopkins Kirby Hopkins

Appendix

The following constitutes the Appendix as required by Texas Rules of Appellate Procedure 38.1(k): A Agreed Temporary Injunction of October 29, 2013

B Motion to Dissolve and Declare Void Temporary Injunction of October 22, 2014 C January 16, 2015 Trial Court Order Denying Appellants’ Motion

A 1 2 3 4 5 6 7 8 9 B 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 C 468 469 470